Exhibit h.1
PIMCO New York Municipal Income Fund
Auction Preferred Shares
No Par Value
UNDERWRITING AGREEMENT
August 20, 2001
UNDERWRITING AGREEMENT
August 20, 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated
as Managing Underwriters
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
PIMCO New York Municipal Income Fund, a voluntary association with
transferable shares organized and existing under and by virtue of the laws of
The Commonwealth of Massachusetts (commonly referred to as a Massachusetts
business trust) (the "Fund"), proposes to issue and sell to the underwriters
named in Schedule A annexed hereto (the "Underwriters") an aggregate of 2,520
preferred shares of beneficial interest of the Fund, no par value, designated
Auction Preferred Shares of the Fund, with a liquidation preference of $25,000
per share (the "APS").
The Fund has filed with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations thereunder (collectively called the
"Act"), and with the provisions of the Investment Company Act of 1940, as
amended, and the rules and regulations thereunder (collectively called the
"Investment Company Act"), a registration statement on Form N-2 (File Nos. 333-
64828 and 811-10381), including a prospectus and a statement of additional
information, relating to the APS. The Fund has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses
(including a preliminary statement of additional information) (each thereof,
including such preliminary statement of additional information, being herein
called a "Preliminary Prospectus") relating to the APS. Except where the
context otherwise requires, the registration statement, as amended when it
becomes effective (the "Effective Date"), including all documents filed as a
part thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 497 under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430A under the Act is herein called
the Registration Statement, and the prospectus (including the statement of
additional information), in the form filed by the Fund with the Commission
pursuant to Rule 497 under the Act or, if no such filing is required, the form
of final prospectus (including the form of final statement of additional
information) included in
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the Registration Statement at the time it became effective, is herein called the
Prospectus. In addition, the Fund has filed a Notification of Registration on
Form N-8A (the "Notification") pursuant to Section 8 of the Investment Company
Act.
PIMCO Advisors L.P. ("PIMCO Advisors," or the "Investment Manager")
acts as the Fund's investment manager pursuant to an Investment Management
Agreement by and between the Fund and the Investment Manager, dated as of June
20, 2001 (the "Investment Management Agreement"). Pacific Investment Management
Company LLC ("PIMCO," or the "Portfolio Manager") acts as the Fund's portfolio
manager pursuant to a Portfolio Management Agreement by and between the
Investment Manager and PIMCO, as accepted and agreed to by the Fund, dated as of
June 20, 2001. State Street Bank & Trust Co. acts as the custodian (the
"Custodian") of the Fund's cash and portfolio assets pursuant to a Custodian
Agreement, dated as of June 20, 2001 (the "Custodian Agreement"). PFPC Inc.
acts as the Fund's transfer agent, registrar, shareholder servicing agent and
dividend disbursing agent with respect to the common shares of the Fund (the
"Transfer Agent") pursuant to a Transfer Agency Services Agreement, dated as of
June 20, 2001 (the "Transfer Agency Agreement"). Bankers Trust Company will act
as the Fund's auction agent (the "Auction Agent") for the APS pursuant to an
Auction Agency Agreement, dated as of August 23, 2001 (the "Auction Agency
Agreement"). The Fund has entered into a Letter Agreement, dated as of August
23, 2001, with the Depository Trust Company (the "DTC Agreement").
The Fund, the Investment Manager and the Underwriters agree as
follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and representations and
subject to the terms and conditions herein set forth, the Fund agrees to
sell to the respective Underwriters and each of the Underwriters, severally
and not jointly, agrees to purchase from the Fund the aggregate number of
APS set forth opposite the name of such Underwriter in Schedule A attached
hereto in each case at a purchase price per share of $24,750. The Fund is
advised that the Underwriters intend (i) to make a public offering of their
respective portions of the APS as soon after the effective date of the
Registration Statement as is advisable and (ii) initially to offer the APS
upon the terms set forth in the Prospectus. The Underwriters may from time
to time increase or decrease the public offering price after the initial
public offering to such extent as they may determine.
2. PAYMENT AND DELIVERY. Payment of the purchase price for the APS shall be
made by the Underwriters to the Fund by Federal Funds wire transfer, against
delivery of the certificates for the APS to you through the facilities of
the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York City time on the third business day following the date of this
Underwriting Agreement (unless another date or time shall be agreed to by
you and the Fund). The time at which such payment and delivery are actually
made is hereinafter sometimes called the "Time of Purchase" or the "Closing
Date." Certificates for the APS shall be delivered to you in definitive form
in such names and in such denominations as you shall specify on the second
business day preceding the
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Time of Purchase. For the purpose of expediting the checking of the
certificates for the APS by you, the Fund agrees to make such certificates
available to you for such purpose at least one full business day preceding
the Time of Purchase.
A certificate in definitive form representing the APS registered in
the name of Cede & Co., as nominee for DTC, shall be delivered by or on
behalf of the Fund to DTC for the account of the Underwriters.
3. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE INVESTMENT MANAGER. Each
of the Fund and the Investment Manager jointly and severally represents and
warrants to each Underwriter as follows:
(a) On (A) the Effective Date and the date on which the Prospectus is first
filed with the Commission pursuant to Rule 497(b) or (h) under the Act
or a certification is first filed with the Commission pursuant to Rule
497(j) under the Act, as the case may be, (B) the date on which any
post-effective amendment to the Registration Statement (except any
post-effective amendment which is filed with the Commission after the
later of (x) one year from the date of this Underwriting Agreement or
(y) the date on which the distribution of the APS is completed) became
or becomes effective or any amendment or supplement to the Prospectus
was or is filed with the Commission and (C) the Closing Date, the
Registration Statement, the Prospectus and any such amendment or
supplement thereto and the Notification complied or will comply in all
material respects with the requirements of the Act and the Investment
Company Act, as the case may be. On the Effective Date and on the date
that any post-effective amendment to the Registration Statement (except
any post-effective amendment which is filed with the Commission after
the later of (x) one year from the date of this Underwriting Agreement
or (y) the date on which the distribution of the APS is completed)
became or becomes effective, neither the Registration Statement nor any
such amendment did or will contain any untrue statement of a material
fact or omit to state a material fact required to be stated in it or
necessary to make the statements in it not misleading. On the Effective
Date, on the Closing Date, and, if applicable, on the date the
Prospectus or any amendment or supplement to the Prospectus was or is
filed with the Commission, the Prospectus did not or will not, as the
case may be, contain any untrue statement of a material fact or omit to
state a material fact required to be stated in it or necessary to make
the statements in it, in light of the circumstances under which they
were made, not misleading. The foregoing representations in this
Section 3(a) do not apply to statements or omissions relating to the
Underwriters made in reliance on and in conformity with information
furnished in writing to the Fund by the Underwriters expressly for use
in the Registration Statement, the Prospectus, or any amendments or
supplements thereto, as described in Section 9(f) hereof.
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(b) The Fund has been duly formed and is validly existing as an
unincorporated voluntary association under the laws of The Commonwealth
of Massachusetts (commonly known as a "Massachusetts business trust"),
with full power and authority to conduct all the activities conducted
by it, to own or lease all assets owned or leased by it and to conduct
its business as described in the Registration Statement and Prospectus,
and the Fund is duly licensed and qualified to do business and in good
standing in each jurisdiction in which its ownership or leasing of
property or its conducting of business requires such qualification,
except where the failure to be so qualified or be in good standing
would not have a material adverse effect on the Fund, and the Fund
owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its
business as contemplated in the Prospectus. The Fund has no
subsidiaries.
(c) The capitalization of the Fund is as set forth in the Registration
Statement and the Prospectus. The common shares of beneficial interest
of the Fund, no par value per share (the "Common Shares"), and the APS
conform in all material respects to the description of them in the
Prospectus. All outstanding Common Shares have been duly authorized and
are validly issued, fully paid and nonassessable (except as described
in the Registration Statement). The APS to be issued and delivered to
and paid for by the Underwriters in accordance with this Underwriting
Agreement against payment therefor as provided by this Underwriting
Agreement have been duly authorized and when issued and delivered to
the Underwriters will have been validly issued and will be fully paid
and nonassessable (except as described in the Registration Statement).
No person is entitled to any preemptive or other similar rights in
connection with the issuance of the APS.
(d) The Fund is duly registered with the Commission under the Investment
Company Act as a non-diversified, closed-end management investment
company, and, subject to the filing of any final amendment to the
Registration Statement (a "Final Amendment"), if not already filed, all
action under the Act and the Investment Company Act, as the case may
be, necessary to make the public offering and consummate the sale of
the APS as provided in this Underwriting Agreement has or will have
been taken by the Fund.
(e) The Fund has, or at the relevant time had, full power and authority to
enter into each of this Underwriting Agreement, the Investment
Management Agreement, the Custodian Agreement, the Transfer Agency
Agreement, the Auction Agency Agreement and the DTC Agreement
(collectively, the "Fund Agreements") and to perform all of the terms
and provisions hereof and thereof to be carried out by it and (i) each
Fund Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the
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Fund, (ii) each Fund Agreement does not violate in any material respect
any of the applicable provisions of the Investment Company Act or the
Investment Advisers Act of 1940, as amended, and the rules and
regulations thereunder (collectively called the "Advisers Act"), as the
case may be, and (iii) assuming due authorization, execution and
delivery by the other parties thereto, each Fund Agreement constitutes
the legal, valid and binding obligation of the Fund enforceable in
accordance with its terms, (A) subject, as to enforcement, to
applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law) and
(B) except as rights to indemnity thereunder may be limited by federal
or state securities laws.
(f) None of (i) the execution and delivery by the Fund of the Fund
Agreements, (ii) the issue and sale by the Fund of the APS as
contemplated by this Underwriting Agreement and (iii) the performance
by the Fund of its obligations under any of the Fund Agreements or
consummation by the Fund of the other transactions contemplated by the
Fund Agreements conflicts with or will conflict with, or results or
will result in a breach of, the Agreement and Declaration of Trust of
the Fund, as amended through the date hereof (the "Declaration of
Trust"), and the Amended and Restated Bylaws of the Fund, adopted in
connection with the issuance of the APS and as amended through the date
hereof (the "Amended Bylaws"), or any agreement or instrument to which
the Fund is a party or by which the Fund is bound, except where such
violation does not have a material adverse effect on the condition
(financial or other), business prospects, properties, net assets or
results of operations of the Fund, or any law, rule or regulation, or
order of any court, governmental instrumentality, securities exchange
or association or arbitrator, whether foreign or domestic, applicable
to the Fund, other than state securities or "blue sky" laws applicable
in connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(g) The Fund is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which it
or its property is bound or affected, except where such violation does
not have a material adverse effect on the condition (financial or
other), business prospects, properties, net assets or results of
operations of the Fund.
(h) No person has any right to the registration of any securities of the
Fund because of the filing of the Registration Statement.
(i) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association,
whether foreign or domestic, is required by the Fund for the
consummation by the Fund of the transactions to be performed by the
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Fund or the performance by the Fund of all the terms and provisions to
be performed by or on behalf of it in each case as contemplated in the
Fund Agreements, except such as (i) have been obtained under the Act,
the Investment Company Act or the Advisers Act, and (ii) may be
required under state securities or "blue sky" laws, in connection with
the purchase and distribution of the APS by the Underwriters pursuant
to this Underwriting Agreement.
(j) To the knowledge of the Fund and the Investment Manager after due
inquiry, based on representations from PricewaterhouseCoopers LLP,
whose report appears in the Prospectus, PricewaterhouseCoopers LLP are
independent public accountants with respect to the Fund as required by
the Act and the Investment Company Act.
(k) The statement of assets and liabilities included in the Registration
Statement and the Prospectus presents fairly in all material respects,
in accordance with generally accepted accounting principles in the
United States applied on a consistent basis, the financial position of
the Fund as of the date indicated.
(l) The Fund will maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets through an
asset reconciliation procedure or otherwise at reasonable intervals and
appropriate action is taken with respect to any differences.
(m) Since the date as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (i)
there has been no material adverse change in the condition, financial
or otherwise, business affairs or business of the Fund, whether or not
arising in the ordinary course of business, (ii) there have been no
transactions entered into by the Fund other than those in the ordinary
course of its business and (iii) there has been no dividend or
distribution of any kind declared, paid or made on any class of its
capital shares.
(n) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to
the knowledge of the Fund, threatened against or affecting the Fund,
which (i) might result in any material adverse change in the condition,
financial or otherwise, business affairs or business prospects of the
Fund or might materially adversely affect the properties or assets of
the Fund or (ii) is of a character required to be described in the
Registration Statement or the Prospectus; and there
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are no contracts, franchises or other documents that are of a character
required to be described in, or that are required to be filed as
exhibits to, the Registration Statement that have not been described or
filed as required.
(o) The Fund intends to direct the investment of the proceeds of the
offering of the APS in such a manner as to comply with the requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code").
(p) The Common Shares are listed on the New York Stock Exchange.
(q) The APS have been, or prior to the Closing Date will be, assigned a
rating of "Aaa" by Xxxxx'x Investors Service, Inc.
(r) No advertising, sales literature or other promotional materials
(excluding road show slides or road show tapes) were authorized or
prepared by or on behalf of the Fund, the Investment Manager or the
Portfolio Manager or any representative thereof for use in connection
with the public offering or sale of the APS (collectively referred to
as the "Sales Materials"); any road show slides or road show tapes
complied and comply in all material respects with the applicable
requirements of the Act and the rules and interpretations of the NASD;
and no broker kits, road show slides, road show tapes or sales
materials authorized or prepared by the Fund or authorized or prepared
on behalf of the Fund by the Investment Manager, the Portfolio Manager
or any representative thereof for use in connection with the public
offering or sale of the APS contained or contains any untrue statement
of a material fact or omitted or omits to state any material fact
required to be stated therein or necessary in order to make the
statements therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTMENT MANAGER. The Investment
Manager represents to each Underwriter and, in the case of paragraph (f)
also to the Fund, as follows:
(a) The Investment Manager has been duly formed, is validly existing as a
limited partnership under the laws of the State of Delaware with full
power and authority to conduct all of the activities conducted by it,
to own or lease all of the assets owned or leased by it and to conduct
its business as described in the Registration Statement and Prospectus,
and the Investment Manager is duly licensed and qualified to do
business and in good standing in each jurisdiction in which it is
required to be so qualified, except to the extent that failure to be so
qualified or be in good standing would not have a material adverse
effect on the Investment Manager's ability to provide services to the
Fund; and the Investment Manager owns, possesses or has obtained and
currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations,
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whether foreign or domestic, necessary to carry on its business as
contemplated in the Registration Statement and the Prospectus.
(b) The Investment Manager is (i) duly registered as an investment adviser
under the Advisers Act and (ii) not prohibited by the Advisers Act or
the Investment Company Act from acting as the investment adviser for
the Fund as contemplated by the Investment Management Agreement, the
Registration Statement and the Prospectus.
(c) The Investment Manager has, or at the relevant time had, full power and
authority to enter into each of this Underwriting Agreement, the
Investment Management Agreement and the Portfolio Management Agreement
(collectively, this Underwriting Agreement, the Investment Management
Agreement and the Portfolio Management Agreement being referred to as
the "Investment Manager Agreements") and to carry out all the terms and
provisions hereof and thereof to be carried out by it; and each
Investment Manager Agreement has been duly and validly authorized,
executed and delivered by the Investment Manager; none of the
Investment Manager Agreements violates in any material respect any of
the applicable provisions of the Investment Company Act or the Advisers
Act; and assuming due authorization, execution and delivery by the
other parties thereto, each Investment Manager Agreement constitutes a
legal, valid and binding obligation of the Investment Manager,
enforceable in accordance with its terms, (i) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding
in equity or at law) and (ii) except as rights to indemnity thereunder
may be limited by federal or state securities laws.
(d) Neither (i) the execution and delivery by the Investment Manager of any
Investment Manager Agreement nor (ii) the consummation by the
Investment Manager of the transactions contemplated by, or the
performance of its obligations under, any Investment Manager Agreement
conflicts or will conflict with, or results or will result in a breach
of, the limited partnership agreement or other organizational documents
of the Investment Manager or any agreement or instrument to which the
Investment Manager is a party or by which the Investment Manager is
bound, or any law, rule or regulation, or order of any court,
governmental instrumentality, securities exchange or association or
arbitrator, whether foreign or domestic, applicable to the Investment
Manager.
(e) No consent, approval, authorization or order of any court, governmental
agency or body or securities exchange or association, whether foreign
or domestic, is required for the consummation of the transactions
contemplated in, or the performance by the Investment Manager of its
obligations under, any Investment Manager Agreement, as the case may
9
be, except such as (i) have been obtained under the Act, the Investment
Company Act or the Advisers Act, and (ii) may be required by the New
York Stock Exchange or under state securities or "blue sky" laws, in
connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(f) The description of the Investment Manager and its business, and the
statements attributable to the Investment Manager, in the Registration
Statement and the Prospectus comply with the requirements of the Act
and the Investment Company Act and do not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
(g) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
the knowledge of the Investment Manager, threatened against or
affecting the Investment Manager of a nature required to be disclosed
in the Registration Statement or Prospectus or that might reasonably be
expected to result in any material adverse change in the ability of the
Investment Manager to fulfill its respective obligations under any
Investment Manager Agreement.
(h) None of the Fund, the Investment Manager or the Portfolio Manager has
made available any promotional materials intended for use only by
qualified broker-dealers and registered representatives thereof by
means of an Internet web site or similar electronic means.
(i) The Portfolio Manager has been duly formed, is validly existing as a
limited liability company under the laws of Delaware with full power
and authority to conduct all of the activities conducted by it, to own
or lease all of the assets owned or leased by it and to conduct its
business as described in the Registration Statement and Prospectus, and
the Portfolio Manager is duly licensed and qualified to do business and
in good standing in each jurisdiction in which it is required to be so
qualified, except to the extent that failure to be so qualified or be
in good standing would not have a material adverse affect on the
Portfolio Manager's ability to provide services to the Fund; and the
Portfolio Manager owns, possesses or has obtained and currently
maintains all governmental licenses, permits, consents, orders,
approvals and other authorizations, whether foreign or domestic,
necessary to carry on its business as contemplated in the Registration
Statement and the Prospectus.
(j) The Portfolio Manager is (i) duly registered as an investment adviser
under the Advisers Act and (ii) not prohibited by the Advisers Act or
the Investment Company Act from acting as the investment sub-adviser
for the Fund as contemplated by the Portfolio Management Agreement, the
Registration Statement and the Prospectus.
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(k) The Portfolio Manager has, or at the relevant time had, full power and
authority to enter into each of this Underwriting Agreement and the
Portfolio Management Agreement (collectively, this Underwriting
Agreement and the Portfolio Management Agreement being referred to as
the "Portfolio Manager Agreements") and to carry out all the terms and
provisions hereof and thereof to be carried out by it; and each
Portfolio Manager Agreement has been duly and validly authorized,
executed and delivered by the Portfolio Manager; none of the Portfolio
Manager Agreements violates in any material respect any of the
applicable provisions of the Investment Company Act or the Advisers
Act; and assuming due authorization, execution and delivery by the
other parties thereto, each Portfolio Manager Agreement constitutes a
legal, valid and binding obligation of the Portfolio Manager,
enforceable in accordance with its terms, (i) subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding
in equity or at law) and (ii) except as rights to indemnity thereunder
may be limited by federal or state securities laws.
(l) Neither (i) the execution and delivery by the Portfolio Manager of any
Portfolio Manager Agreement nor (ii) the consummation by the Portfolio
Manager of the transactions contemplated by, or the performance of its
obligations under, any Portfolio Manager Agreement conflicts or will
conflict with, or results or will result in a breach of, the limited
liability company agreement or other organizational documents of the
Portfolio Manager or any agreement or instrument to which the Portfolio
Manager is a party or by which the Portfolio Manager is bound, or any
law, rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator,
whether foreign or domestic, applicable to the Portfolio Manager.
(m) No consent, approval, authorization or order of any court, governmental
agency or body or securities exchange or association, whether foreign
or domestic, is required for the consummation of the transactions
contemplated in, or the performance by the Portfolio Manager of its
obligations under, any Portfolio Manager Agreement, as the case may be,
except such as (i) have been obtained under the Act, the Investment
Company Act or the Advisers Act, and (ii) may be required by the New
York Stock Exchange or under state securities or "blue sky" laws, in
connection with the purchase and distribution of the APS by the
Underwriters pursuant to this Underwriting Agreement.
(n) The description of the Portfolio Manager and its business, and the
statements attributable to the Portfolio Manager, in the Registration
Statement and the Prospectus comply with the requirements of the Act
and the Investment Company Act and do not contain any untrue statement
11
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
(o) There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to
the knowledge of the Portfolio Manager, threatened against or affecting
the Portfolio Manager of a nature required to be disclosed in the
Registration Statement or Prospectus or that might reasonably be
expected to result in any material adverse change in the ability of the
Portfolio Manager to fulfill its respective obligations under any
Portfolio Manager Agreement.
5. AGREEMENTS OF THE PARTIES.
(a) If the registration statement relating to the APS has not yet become
effective, the Fund will promptly file any Final Amendment, if not
previously filed, with the Commission, and will use its best efforts to
cause such registration statement to become effective and, as soon as
the Fund is advised, will advise UBS Warburg LLC (the "Managing
Representative") when the Registration Statement or any amendment
thereto has become effective. If the Registration Statement has become
effective and the Prospectus contained therein omits certain
information at the time of effectiveness pursuant to Rule 430A under
the Act, the Fund will file a 430A prospectus pursuant to Rule 497(h)
under the Act as promptly as practicable, but no later than the second
business day following the earlier of the date of the determination of
the offering price of the APS or the date the Prospectus is first used
after the Effective Date. If the Registration Statement has become
effective and the Prospectus contained therein does not so omit such
information, the Fund will file a prospectus pursuant to Rule 497(b) or
a certification pursuant to Rule 497(j) under the Act as promptly as
practicable, but no later than the fifth business day following the
date of the later of the Effective Date or the commencement of the
public offering of the APS after the Effective Date. In either case,
the Fund will provide you satisfactory evidence of the filing. The Fund
will not file with the Commission any Prospectus or any other amendment
(except any post-effective amendment which is filed with the Commission
after the later of (x) one year from the date of this Underwriting
Agreement or (y) the date on which distribution of the APS is
completed) or supplement to the Registration Statement or the
Prospectus unless a copy has first been submitted to the Managing
Representative a reasonable time before its filing and the Managing
Representative has not objected to it in writing within a reasonable
time after receiving the copy.
(b) For the period of three years from the date hereof, the Fund will
advise the Managing Representative promptly (1) of the issuance by the
Commission of any order in respect of the Fund, the Investment Manager
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or the Portfolio Manager which relates to the Fund, or which relates to
any material arrangements or proposed material arrangements involving
the Fund, the Investment Manager or the Portfolio Manager, (2) of the
initiation or threatening of any proceedings for, or receipt by the
Fund of any notice with respect to, any suspension of the qualification
of the APS for sale in any jurisdiction or the issuance of any order by
the Commission suspending the effectiveness of the Registration
Statement, (3) of receipt by the Fund, or any representative or
attorney of the Fund, of any other communication from the Commission
relating in any material way to the Fund, the Registration Statement,
the Notification, any Preliminary Prospectus, the Prospectus or to the
transactions contemplated by this Underwriting Agreement and (4) of the
issuance by any court, regulatory body, administrative agency or other
governmental agency or body, whether foreign or domestic, of any order,
ruling or decree, or the threat to initiate any proceedings with
respect thereto, regarding the Fund, which relates in any material way
to the Fund or any material arrangements or proposed material
arrangements involving the Fund. The Fund will make every reasonable
effort to prevent the issuance of any order suspending the
effectiveness of the Registration Statement and, if any such order is
issued, to obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting Agreement, the
Fund will deliver to the Managing Representative, without charge, a
signed copy of the Registration Statement and the Notification and of
any amendments (except any post-effective amendment which is filed with
the Commission after the later of (x) one year from the date of this
Underwriting Agreement or (y) the date on which the distribution of the
APS is completed) to either the Registration Statement or the
Notification (including all exhibits filed with any such document) and
as many conformed copies of the Registration Statement and any
amendments thereto (except any post-effective amendment which is filed
with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution
of the APS is completed) (excluding exhibits) as the Managing
Representative may reasonably request.
(d) During such period as a prospectus is required by law to be delivered
by an underwriter or a dealer, the Fund will deliver, without charge,
to you, the Underwriters and any dealers, at such office or offices as
you may designate, as many copies of the Prospectus as you may
reasonably request, and, if any event occurs during such period as a
result of which it is necessary to amend or supplement the Prospectus,
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading in any material respect, or
if during such period it is necessary to amend or supplement the
Prospectus to comply with the Act or the Investment Company Act, the
Fund promptly will prepare, submit to the Managing Representative, file
with the Commission and deliver,
13
without charge, to the Underwriters and to dealers (whose names and
addresses the Managing Representative will furnish to the Fund) to whom
APS may have been sold by the Underwriters, and to other dealers on
request, amendments or supplements to the Prospectus so that the
statements in such Prospectus, as so amended or supplemented, will not,
in light of the circumstances under which they were made, be misleading
in any material respect and will comply with the Act and the Investment
Company Act; provided that if the amendment or supplement is required
exclusively as a result of a misstatement in or omission from the
information provided to the Fund in writing by the Underwriters
expressly for use in the Prospectus, the Fund may deliver such
amendment or supplement to the Underwriters and dealers at a reasonable
charge not to exceed the actual cost thereof to the Fund. Delivery by
the Underwriters of any such amendments or supplements to the
Prospectus will not constitute a waiver of any of the conditions in
Section 6 hereof.
(e) The Fund will make generally available to holders of the Fund's
securities, as soon as practicable but in no event later than the last
day of the 18th full calendar month following the calendar quarter in
which the Effective Date falls, an earnings statement, if applicable,
satisfying the provisions of the last paragraph of Section 11(a) of the
Act and, at the option of the Fund, Rule 158 under the Act.
(f) The Fund will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Fund's counsel and accountants in
connection with the registration of the APS and all other expenses in
connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus
and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of
printing or reproducing this Underwriting Agreement and any other
documents in connection with the offering, purchase, sale and delivery
of the APS (including advertising expenses of the Underwriters, if
any); (iii) the cost of preparing share certificates; (iv) the expenses
(including, but not limited to, travel, hotels and other
accommodations) incurred by the Fund's directors, officers, employees
and other personnel in connection with meetings held with registered
brokers in connection with the offering of the APS, the preparing to
market and the marketing of the APS; (v) any fees charged by securities
rating services for rating the APS; (vi) the fees and expenses of the
DTC and its nominee, the Custodian and the Auction Agent; and (vii) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for. It is
understood, however, that, except as provided in this Section 5 and
Section 7 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel and stock transfer taxes,
if any, on resale of any of the APS by them, except any advertising
expenses connected with any offers they may make.
14
(g) If the transactions contemplated by this Underwriting Agreement are not
consummated, except as otherwise provided herein, no party will be
under any liability to any other party, except that (i) if this
Underwriting Agreement is terminated by (A) the Fund or the Investment
Manager pursuant to any of the provisions hereof or (B) by you or the
Underwriters because of any inability, failure or refusal on the part
of the Fund or the Investment Manager to comply with any material terms
or because any of the conditions in Section 6 are not satisfied, the
Investment Manager or an affiliate and the Fund, jointly and severally,
will reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees, disbursements and other charges of
their counsel) reasonably incurred by them in connection with the
proposed purchase and sale of the APS and (ii) no Underwriter who has
failed or refused to purchase the APS agreed to be purchased by it
under this Underwriting Agreement, in breach of its obligations
pursuant to this Underwriting Agreement, will be relieved of liability
to the Fund, the Investment Manager and the other Underwriters for
damages occasioned by its default.
(h) Without the prior written consent of the Managing Representative, the
Fund will not offer, sell or register with the Commission, or announce
an offering of, any equity securities of the Fund, within 180 days
after the Effective Date, except for the APS as described in the
Prospectus and any issuance of Common Shares pursuant to the dividend
reinvestment plan established by the Fund.
(i) The Fund will direct the investment of the net proceeds of the offering
of the APS in such a manner as to comply with the investment objective
and policies of the Fund as described in the Prospectus.
(j) No later than the Closing Date, the Underwriters will provide, and will
cause any selling group member to whom they have sold APS to provide,
the Auction Agent with a list of the record names of the persons to
whom they have sold APS, the number of APS sold to each such person,
and the number of APS they are holding as of the Closing Date; provided
that in lieu of thereof, an Underwriter may provide the Auction Agent
with a list indicating itself as the sole holder of all the APS sold by
such Underwriter.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the APS are subject to the accuracy on the date of
this Underwriting Agreement, and on the Closing Date, of the representations
of the Fund and the Investment Manager in this Underwriting Agreement, to
the accuracy and completeness of all material statements made by the Fund
and the Investment Manager or any of their respective officers in any
certificate delivered to the Managing Representative or its counsel pursuant
to this Underwriting Agreement, to performance by the Fund and the
Investment Manager of their respective obligations under this Underwriting
Agreement and to each of the following additional conditions:
15
(a) The Registration Statement must have become effective by 5:30 p.m., New
York City time, on the date of this Underwriting Agreement or such
later date and time as the Managing Representative consents to in
writing. The Prospectus must have been filed in accordance with Rule
497(b) or (h) or a certificate must have been filed in accordance with
Rule 497(j), as the case may be, under the Act.
(b) No order suspending the effectiveness of the Registration Statement may
be in effect and no proceedings for such purpose may be pending before
or, to the knowledge of counsel to the Underwriters, threatened by the
Commission, and any requests for additional information on the part of
the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) must be complied with or waived to the
reasonable satisfaction of the Managing Representative.
(c) Since the dates as of which information is given in the Registration
Statement and the Prospectus, (i) there must not have been any material
change in the Common Shares, the APS or the liabilities of the Fund
except as set forth in or contemplated by the Prospectus; (ii) there
must not have been any material adverse change in the general affairs,
prospects, management, business, financial condition or results of
operations of the Fund, the Investment Manager or the Portfolio Manager
whether or not arising from transactions in the ordinary course of
business as set forth in or contemplated by the Prospectus which in the
opinion of the Managing Representative would materially adversely
affect the market for the APS; (iii) the Fund must not have sustained
any material loss or interference with its business from any court or
from legislative or other governmental action, order or decree, whether
foreign or domestic, or from any other occurrence not described in the
Registration Statement and Prospectus; and (iv) there must not have
occurred any event that makes untrue or incorrect in any material
respect any statement or information contained in the Registration
Statement or Prospectus or that is not reflected in the Registration
Statement or Prospectus but should be reflected therein in order to
make the statements or information therein (in the case of the
Prospectus, in light of the circumstances in which they were made) not
misleading in any material respect.
(d) The Managing Representative must have received on the Closing Date a
certificate, dated such date, of the President, a Vice President or
Managing Director and the chief financial or accounting officer of each
of the Fund and the Investment Manager certifying that (i) the signers
have carefully examined the Registration Statement, the Prospectus, and
this Underwriting Agreement, (ii) the representations of the Fund (with
respect to the certificates from such Fund officers) and the
representations of the Investment Manager (with respect to the
certificates from such officers of the Investment Manager) in this
Underwriting Agreement are accurate on and as of the date of the
certificate, (iii) there has not been any material
16
adverse change in the general affairs, prospects, management, business,
financial condition or results of operations of the Fund (with respect
to the certificates from such Fund officers) or the Investment Manager
(with respect to the certificates from such officers of the Investment
Manager), which change would materially and adversely affect the
ability of the Fund or the Investment Manager, as the case may be, to
fulfill its obligations unde r this Underwriting Agreement or the
Investment Management Agreement, whether or not arising from
transactions in the ordinary course of business, (iv) with respect to
the Fund only, to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the
Registration Statement, prohibiting the sale of any of the APS or
otherwise having a material adverse effect on the Fund has been issued
and no proceedings for any such purpose are pending before or
threatened by the Commission or any other regulatory body, whether
foreign or domestic, (v) to the knowledge of the officers of the
Investment Manager, after reasonable investigation, no order having a
material adverse effect on the ability of the Investment Manager to
fulfill its obligations under this Underwriting Agreement or the
Investment Management Agreement, as the case may be, has been issued
and no proceedings for any such purpose are pending before or
threatened by the Commission or any other regulatory body, whether
foreign or domestic, and (vi) each of the Fund (with respect to the
certificates from such Fund officers) and the Investment Manager (with
respect to the certificates from such officers of the Investment
Manager) has performed all of its respective agreements that this
Underwriting Agreement requires it to perform by the Closing Date (to
the extent not waived in writing by the Managing Representative).
(e) You must have received on the Closing Date the opinions dated the
Closing Date substantially in the form of Schedules B, C, D and E to
this Underwriting Agreement from the counsel identified in each such
Schedule, or in such other form as is acceptable to counsel for the
Underwriters.
(f) You must have received on the Closing Date from Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP and its affiliated entities an opinion dated the
Closing Date with respect to the Fund, the APS, the Registration
Statement and the Prospectus, this Underwriting Agreement and the form
and sufficiency of all proceedings taken in connection with the sale
and delivery of the APS. Such opinion and proceedings shall fulfill the
requirements of this Section 6(f) only if such opinion and proceedings
are satisfactory in all respects to the Managing Representative. The
Fund, the Investment Manager and the Portfolio Manager must have
furnished to such counsel such documents as counsel may reasonably
request for the purpose of enabling them to render such opinion.
17
(g) The Managing Representative must have received on the date this
Underwriting Agreement is signed and delivered by you a signed letter,
dated such date, substantially in the form of Schedule F to this
Underwriting Agreement from the firm of accountants designated in such
Schedule. The Managing Representative also must have received on the
Closing Date a signed letter from such accountants, dated as of the
Closing Date, confirming on the basis of a review in accordance with
the procedures set forth in their earlier letter that nothing has come
to their attention during the period from a date not more than five
business days before the date of this Underwriting Agreement, specified
in the letter, to a date not more than five business days before the
Closing Date, that would require any change in their letter referred to
in the foregoing sentence.
(h) The APS shall have been accorded a rating of "Aaa" by Xxxxx'x Investors
Service, Inc. and a letter to such effect, dated on or before the
Closing Date, shall have been delivered to the Managing Representative.
(i) As of the Closing Date, and assuming the receipt of the net proceeds
from the sale of the APS, the 1940 Act APS Asset Coverage and the APS
Basic Maintenance Amount (each as defined in the Prospectus) each will
be met.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Underwriting Agreement will comply only if they are in
form and scope reasonably satisfactory to counsel for the Underwriters,
provided that any such documents, forms of which are annexed hereto, shall
be deemed satisfactory to such counsel if substantially in such form.
7. TERMINATION. This Underwriting Agreement may be terminated by the Managing
Representative by notifying the Fund at any time:
(a) before the later of the effectiveness of the Registration Statement and
the time when any of the APS are first generally offered pursuant to
this Underwriting Agreement by the Managing Representative to dealers
by letter or telegram;
(b) at or before the Closing Date if, in the sole judgment of the Managing
Representative, payment for and delivery of any APS is rendered
impracticable or inadvisable because (i) trading in the APS or the
Common Shares of the Fund is suspended by the Commission or the
principal exchange that lists the Common Shares, (ii) trading in
securities generally on the New York Stock Exchange or the Nasdaq Stock
Market shall have been suspended or limited or minimum or maximum
prices shall have been generally established on such exchange or over-
the-counter market, (iii) additional material governmental
restrictions, not in force on the date of this Underwriting Agreement,
have been imposed upon trading in securities or trading has been
suspended on any U.S. securities exchange, (iv) a general banking
moratorium has been
18
established by U.S. federal or New York authorities or (v) any material
adverse change in the financial or securities markets in the United
States or in political, financial or economic conditions in the United
States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or
other calamity or crisis shall have occurred the effect of any of which
is such as to make it, in the sole judgment of the Managing
Representative, impracticable or inadvisable to market the APS on the
terms and in the manner contemplated by the Prospectus; or
(c) at or before the Closing Date, if any of the conditions specified in
Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
8. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters fails
(other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on the Closing Date the APS agreed to be
purchased on the Closing Date by such Underwriter or Underwriters, the
Managing Representative may find one or more substitute underwriters to
purchase such APS or make such other arrangements as the Managing
Representative deems advisable, or one or more of the remaining Underwriters
may agree to purchase such APS in such proportions as may be approved by the
Managing Representative, in each case upon the terms set forth in this
Underwriting Agreement. If no such arrangements have been made within 36
hours after the Closing Date, and
(a) the number of APS to be purchased by the defaulting Underwriters on the
Closing Date does not exceed 10% of the APS that the Underwriters are
obligated to purchase on such Closing Date, each of the nondefaulting
Underwriters will be obligated to purchase such APS on the terms set
forth in this Underwriting Agreement in proportion to their respective
obligations under this Underwriting Agreement, or
(b) the number of APS to be purchased by the defaulting Underwriters on the
Closing Date exceeds 10% of the APS to be purchased by all the
Underwriters on the Closing Date, the Fund will be entitled to an
additional period of 24 hours within which to find one or more
substitute underwriters reasonably satisfactory to the Managing
Representative to purchase such APS on the terms set forth in this
Underwriting Agreement.
Upon the occurrence of the circumstances described in the foregoing
paragraph (b), either the Managing Representative or the Fund will have the
right to postpone the Closing Date for not more than five business days in
order that necessary changes and arrangements (including any necessary
amendments or supplements to the Registration Statement or the Prospectus)
may be effected by the Managing Representative and the Fund. If the number
of APS to be purchased on the Closing Date by such defaulting Underwriter
or Underwriters
19
exceeds 10% of the APS that the Underwriters are obligated to purchase on
the Closing Date, and none of the nondefaulting Underwriters or the Fund
makes arrangements pursuant to this Section within the period stated for
the purchase of the APS that the defaulting Underwriters agreed to
purchase, this Underwriting Agreement will terminate without liability on
the part of any nondefaulting Underwriter, the Fund, the Investment Manager
or the Portfolio Manager, except as provided in Sections 5(g) and 9 hereof.
Any action taken under this Section will not affect the liability of any
defaulting Underwriter to the Fund or to the nondefaulting Underwriters
arising out of such default. A substitute underwriter will become an
Underwriter for all purposes of this Underwriting Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) Each of the Fund and the Investment Manager, jointly and severally,
agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, and the successors and assigns of all of the
foregoing persons from and against any loss, damage, expense, liability
or claim (including the reasonable cost of investigation) which,
jointly or severally, any such Underwriter or any such person may incur
under the Act, the Exchange Act, the Investment Company Act, the
Advisers Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the
Fund) or in a Prospectus (the term "Prospectus" for the purpose of this
Section 9 being deemed to include any Preliminary Prospectus, any Sales
Materials, the Prospectus and the Prospectus as amended or supplemented
by the Fund), or arises out of or is based upon any omission or alleged
omission to state a material fact required to be stated in either such
Registration Statement or Prospectus or necessary to make the
statements made therein (with respect to the Prospectus, in light of
the circumstances under which they were made) not misleading, except
insofar as any such loss, damage, expense, liability or claim arises
out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter to
the Fund, the Investment Manager or the Portfolio Manager expressly for
use with reference to any Underwriter in such Registration Statement or
such Prospectus or arises out of or is based upon any omission or
alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information (with respect to
the Prospectus, in light of the circumstances under which they were
made) not misleading, provided, however, that the indemnity agreement
contained in this subsection (a) with respect to any Preliminary
Prospectus or amended Preliminary Prospectus shall not inure to the
20
benefit of any Underwriter (or to the benefit of any person controlling
such Underwriter) from whom the person asserting any such loss, damage,
expense, liability or claim purchased the APS which is the subject
thereof if the Prospectus corrected any such alleged untrue statement
or omission and if such Underwriter failed to send or give a copy of
the Prospectus to such person at or prior to the written confirmation
of the sale of such APS to such person, unless the failure is the
result of noncompliance by the Fund with Section 5(d) hereof.
If any action, suit or proceeding (together, a "Proceeding") is
brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Fund or the Investment Manager
pursuant to the foregoing paragraph, such Underwriter or such person
shall promptly notify the Fund and the Investment Manager in writing
of the institution of such Proceeding and the Fund or the Investment
Manager shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that
the omission to so notify the Fund or the Investment Manager shall not
relieve the Fund or the Investment Manager from any liability which
the Fund or the Investment Manager may have to any Underwriter or any
such person or otherwise. Such Underwriter or such person shall have
the right to employ its or their own counsel in any such case, but the
reasonable fees and expenses of such counsel shall be at the expense
of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by
21
the Fund or the Investment Manager, as the case may be, in connection
with the defense of such Proceeding or the Fund or the Investment
Manager shall not have, within a reasonable period of time in light of
the circumstances, employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them
which are different from, additional to or in conflict with those
available to the Fund or the Investment Manager (in which case neither
the Fund nor the Investment Manager shall have the right to direct the
defense of such Proceeding on behalf of the indemnified party or
parties, but the Fund or the Investment Manager, as the case may be,
may employ counsel and participate in the defense thereof at the
expense of the Fund or the Investment Manager, as the case may be), in
any of which events such reasonable fees and expenses shall be borne by
the Fund or the Investment Manager and paid as incurred (it being
understood, however, that the Fund or the Investment Manager shall not
be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of
related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). Neither the
Fund nor the Investment Manager shall be liable for any settlement of
any Proceeding effected without its written consent but if settled with
the written consent of the Fund or the Investment Manager, the Fund or
the Investment Manager, as the case may be, agrees to indemnify and
hold harmless any Underwriter and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
reasonable fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it
shall be liable for any settlement of any Proceeding effected without
its written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of
such settlement and (iii) such indemnified party shall have given the
indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder
by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such Proceeding and does not
include an admission of fault, culpability or a failure to act, by or
on behalf of such indemnified party.
(b) Each Underwriter severally agrees to indemnify, defend and hold
harmless the Fund and the Investment Manager, and each of their
respective shareholders, partners, managers, members, trustees,
directors and officers, and any person who controls the Fund or the
Investment Manager within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all
of the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation)
which, jointly or severally, the Fund or the Investment Manager or any
such person may incur under the Act, the Exchange Act, the Investment
Company Act, the Advisers Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is
based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information furnished
in writing by or on behalf of such Underwriter to the Fund or the
Investment Manager expressly for use with reference to such Underwriter
in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Fund) or in a
Prospectus, or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information
required to be stated in such Registration Statement or such Prospectus
or necessary to make such information not misleading (with
22
respect to the Prospectus, in light of the circumstances under which
they were made).
If any Proceeding is brought against the Fund, the Investment
Manager or any such person in respect of which indemnity may be sought
against any Underwriter pursuant to the foregoing paragraph, the Fund,
the Investment Manager or such person shall promptly notify such
Underwriter in writing of the institution of such Proceeding and such
Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified
party and payment of all fees and expenses; provided, however, that
the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the
Fund, the Investment Manager or any such person or otherwise. The
Fund, the Investment Manager or such person shall have the right to
employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Fund, the
Investment Manager or such person, as the case may be, unless the
employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or
such Underwriter shall not have, within a reasonable period of time in
light of the circumstances, employed counsel to have charge of the
defense of such Proceeding or such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it
or them which are different from or additional to or in conflict with
those available to such Underwriter (in which case such Underwriter
shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties, but such Underwriter may
employ counsel and participate in the defense thereof at the expense
of such Underwriter), in any of which events such fees and expenses
shall be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable for the
expenses of more than one separate counsel (in addition to any local
counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties
to such Proceeding). No Underwriter shall be liable for any
settlement of any such Proceeding effected without the written consent
of such Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless
the Fund, the Investment Manager and any such person from and against
any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for
fees and expenses of counsel as contemplated by the second sentence of
this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its
written consent if (i) such settlement is entered into more than 60
business days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying
23
party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement and (iii) such
indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party
shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened Proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such Proceeding and does not include an admission of fault,
culpability or a failure to act, by or on behalf of such indemnified
party.
(c) If the indemnification provided for in this Section 9 is unavailable to
an indemnified party under subsections (a) and (b) of this Section 9 in
respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
damages, expenses, liabilities or claims (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and
the Investment Manager on the one hand and the Underwriters on the
other hand from the offering of the APS or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of
the Fund and the Investment Manager on the one hand and of the
Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities
or claims, as well as any other relevant equitable considerations. The
relative benefits received by the Fund and the Investment Manager on
the one hand and the Underwriters on the other shall be deemed to be in
the same respective proportions as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting
expenses) received by the Fund and the total underwriting discounts and
commissions received by the Underwriters, bear to the aggregate public
offering price of the APS. The relative fault of the Fund and the
Investment Manager on the one hand and of the Underwriters on the other
shall be determined by reference to, among other things, whether the
untrue statement or alleged untrue statement of a material fact or
omission or alleged omission relates to information supplied by the
Fund or the Investment Manager or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, damages, expenses,
liabilities and claims referred to in this subsection shall be deemed
to include any legal or other fees or expenses reasonably
24
incurred by such party in connection with investigating, preparing to
defend or defending any Proceeding.
(d) The Fund, the Investment Manager and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this
Section 9 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any
other method of allocation that does not take account of the equitable
considerations referred to in subsection (c) above. Notwithstanding the
provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the fees and commissions received by
such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant
to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in this Section 9
and the covenants, warranties and representations of the Fund contained
in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its
partners, directors or officers or any person (including each partner,
officer or director of such person) who controls any Underwriter within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
or by or on behalf of the Fund or the Investment Manager, its
shareholders, partners, managers, members, trustees, directors or
officers or any person who controls the Fund or the Investment Manager
within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and shall survive any termination of this Agreement or
the issuance and delivery of the APS. The Fund and the Investment
Manager and each Underwriter agree promptly to notify each other of the
commencement of any Proceeding against it and, in the case of the Fund
or the Investment Manager, against any of the Fund's or the Investment
Manager's shareholders, partners, managers, members, trustees,
directors or officers in connection with the issuance and sale of the
APS, or in connection with the Registration Statement or Prospectus.
(f) The Fund and the Investment Manager each acknowledge that the
statements with respect to (1) the public offering of the APS as set
forth on the cover page of, and (2) selling concessions and
reallowances of selling concessions under the caption "Underwriting"
in, the Prospectus constitute the only information furnished in writing
to the Fund by the Underwriters expressly for use in such document. The
Underwriters severally confirm that these statements are correct in all
material respects and were so furnished by or on behalf of the
Underwriters severally for use in the Prospectus.
25
(g) Notwithstanding any other provisions in this Section 9, no party shall
be entitled to indemnification or contribution under this Underwriting
Agreement against any loss, claim, liability, expense or damage arising
by reason of such person's willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties in the performance of
its duties hereunder.
10. NOTICES. Except as otherwise herein provided, all statements, requests,
notices and agreements shall be in writing or by telegram and, if to the
Underwriters, shall be sufficient in all respects if delivered or sent to
UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention:
Syndicate Department and, if to the Fund or the Investment Manager, shall
be sufficient in all respects if delivered or sent to the Fund or the
Investment Manager, as the case may be, at the offices of the Fund or the
Investment Manager at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way
relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter
of convenience of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of
the State of New York located in the City and County of New York or in the
United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and
the Fund and UBS Warburg LLC each consent to the jurisdiction of such
courts and personal service with respect thereto. The Fund and UBS Warburg
hereby consent to personal jurisdiction, service and venue in any court in
which any Claim arising out of or in any way relating to this Agreement is
brought by any third party against UBS Warburg LLC or any indemnified
party. Each of UBS Warburg LLC, the Fund (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates)
and the Investment Manager (on its behalf and, to the extent permitted by
applicable law, on behalf of its unitholders and affiliates) waives all
right to trial by jury in any action, proceeding or counterclaim (whether
based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. Each of the Fund and the Investment Manager
agrees that a final judgment in any such action, proceeding or counterclaim
brought in any such court shall be conclusive and binding upon the Fund and
the Investment Manager, as the case may be, and may be enforced in any
other courts in the jurisdiction of which the Fund or the Investment
Manager, as the case may be, is or may be subject, by suit upon such
judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters, the Fund and the Investment
Manager and to the extent provided in Section 9 hereof the controlling
persons, shareholders,
26
partners, members, trustees, managers, directors and officers referred to
in such section, and their respective successors, assigns, heirs, personal
representatives and executors and administrators. No other person,
partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties in one or more
counterparts which together shall constitute one and the same agreement
among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Underwriters, the Fund and the Investment Manager, and any successor or
assign of any substantial portion of the Fund's, the Investment Manager's,
or any of the Underwriters' respective businesses and/or assets.
16. DISCLAIMER OF LIABILITY OF TRUSTEES AND BENEFICIARIES. A copy of the
Declaration of Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice hereby is given that this
Underwriting Agreement is executed on behalf of the Fund by an officer or
Trustee of the Fund in his or her capacity as an officer or Trustee of the
Fund and not individually and that the obligations under or arising out of
this Underwriting Agreement are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets
and properties of the Fund.
27
If the foregoing correctly sets forth the understanding among the Fund, the
Investment Manager and the Underwriters, please so indicate in the space
provided below, whereupon this letter and your acceptance shall constitute a
binding agreement among the Fund, the Investment Manager and the Underwriters,
severally.
Very truly yours,
PIMCO NEW YORK MUNICIPAL INCOME FUND
__________________________
By:
Title:
PIMCO ADVISORS L.P.
__________________________
By:
Title:
Accepted and agreed to as of the
date first above written, on
behalf of themselves and
the other several Underwriters
named in Schedule A
UBS WARBURG LLC
X.X. XXXXXXX & SONS, INC.
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By: UBS WARBURG LLC
__________________________
By: Xxxxx Xxxxxxxx
Title: Managing Director
__________________________
By: Xxxx X. Reit
Title: Executive Director
28
SCHEDULE A
Number of Shares
Name to be Purchased
---- ---------------
UBS Warburg
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Total
29
SCHEDULE B
FORM OF OPINION OF
ROPES & XXXX REGARDING THE FUND
August , 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
We have acted as counsel to PIMCO New York Municipal Income Fund (the
"Fund") in connection with the proposed issuance of 2,520 Auction Preferred
Shares, Series A (the "Preferred Shares"). This opinion is furnished to you
pursuant to Section 6(e) of the Underwriting Agreement dated as of August ,
2001 (the "Underwriting Agreement") among the Fund, PIMCO Advisors L.P. (the
"Investment Manager") and UBS Warburg LLC, X.X. Xxxxxxx & Sons, Inc. and Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, as representatives of the
underwriters listed on Schedule A thereto (the "Underwriters"). Capitalized
terms used in this opinion, unless otherwise defined, have the meanings
specified in the Underwriting Agreement.
We have examined signed copies of the registration statement of the Fund on
Form N-2 (File No. 333-10381) under the Securities Act of 1933, as amended (the
"Securities Act") (which also constitutes Amendment No. 5 to the Fund's
Registration Statement on Form N-2 (File No. 811-64828) under the Investment
Company Act of 1940, as amended (the "Investment Company Act")), including all
exhibits thereto, as filed with the Securities and Exchange Commission (the
"Commission") on July 10, 2001 (the "Original Registration Statement"), Pre-
Effective Amendment No. 1 to the Original Registration Statement, including all
exhibits thereto, as filed with the Commission on August 14, 2001 ("Pre-
Effective Amendment No. 1") and Pre-Effective Amendment No. 2 to the Original
Registration Statement, including all exhibits thereto, as filed with the
Commission on August , 2001 ("Pre-Effective Amendment No. 2," and together
with Pre-Effective Amendment No. 1 and the Original Registration Statement, the
"Registration Statement"); the Fund's Agreement and Declaration of Trust, as
amended to the date hereof (the "Declaration of Trust"), on file in the offices
of the Secretary of State of The Commonwealth of Massachusetts and the Clerk of
the City of Boston; the Amended and Restated Bylaws of the Fund, as amended to
B-1
the date hereof (the "Amended Bylaws"); a copy of the Prospectus dated August
, 2001, relating to the Preferred Shares and the Statement of Additional
Information of the Fund dated August , 2001, each as filed with the
Commission pursuant to Rule 497 under the Securities Act on August , 2001
(together, the "Prospectus"); the Investment Management Agreement dated as of
June 20, 2001, between the Fund and the Investment Manager (the "Investment
Management Agreement"); the Portfolio Management Agreement dated as of June 20,
2001, between Pacific Investment Management Company LLC (the "Portfolio
Manager") and the Investment Manager (the "Portfolio Management Agreement"), as
agreed to and accepted by the Fund; the Custodian Agreement dated as of June 29,
2001, between the Fund and State Street Bank and Trust Company (the "Custodian
Agreement"); the Auction Agency Agreement dated as of August , 2001, as
supplemented by the acceptance letter dated as of the date hereof between
between the Fund and Bankers Trust Company (the "Auction Agency Agreement," and
together with the Custodian Agreement, the "Fund Agreements"); and the
Underwriting Agreement. Additionally, we have relied upon the Order of the
Commission pursuant to Section 8(a) of the Securities Act, declaring the
Registration Statement effective as of p.m. on August , 2001, and
the oral representation by a member of the Commission staff on the date hereof
that as of a.m., no stop order suspending the effectiveness of the
Registration Statement had been issued and no proceeding for any such purpose
was pending or threatened.
We have also examined and relied upon the original or copies of minutes of
the meetings or written consents of the sole shareholder and the Board of
Trustees of the Fund, the documents delivered to the Underwriters by the Fund
and the Investment Manager dated as of the date hereof pursuant to the
Underwriting Agreement and such other documents, including certificates of
officers of the Fund, as we have deemed necessary for purposes of rendering our
opinions below. For purposes of paragraph 2 below, we have relied solely on (1)
the certificate dated as of August , 2001, of the Secretary of State of the
State of California as to the entitlement of the Fund to transact intrastate
business in the State of California and (2) a Certificate of the Special Deputy
Secretary of State of the State of New York dated June 21, 2001, certifying
copies of (a) a Certificate of Designation by the Fund dated June 11, 2001 and
(b) a Statement under Section 18 of the New York General Associations Law, (3) a
Filing Receipt of the Department of State of the State of New York dated June
21, 2001 relating to the Fund and (4) a LEXIS search on August , 2001, of
the New York Department of State, Corporate Record, showing the "status" of the
Fund as "active" and noting that "good standing status can only be determined by
performing a search in the records of both the Department of State Corporation
Records and the Department of Tax and Franchise." We have assumed the
genuineness of the signatures on all documents examined by us, the authenticity
of all documents submitted to us as originals and the conformity to the
corresponding originals of all documents submitted to us as copies.
We express no opinion as to the laws of any jurisdiction other than The
Commonwealth of Massachusetts and the United States of America. We call your
attention to the fact that each of the Underwriting Agreement, the Auction
B-2
Agency Agreement and the Broker-Dealer Agreement provides that it is to be
governed by and construed in accordance with the laws of the State of New York.
In rendering the opinion as to enforceability expressed in paragraph 5 below, we
have limited the scope of our opinion to the conclusions that would be reached
by a Massachusetts court that had determined that each of the Fund Agreements
would be governed by, and construed in accordance with, the internal laws of The
Commonwealth of Massachusetts. Further, we express no opinion as to the state
securities or Blue Sky laws of any jurisdiction, including The Commonwealth of
Massachusetts.
For purposes of our opinion set forth in paragraph 2 below with respect to
the power and authority of the Fund to own, lease and operate its properties and
conduct its business, we have relied upon certificates of officers of the Fund
as to the states in which the Fund leases or owns real property or in which it
conducts material operations.
Insofar as this opinion relates to factual matters, we have made inquiries
to officers of the Fund, the Investment Manager and the Portfolio Manager to the
extent we believe reasonable with respect to such matters and have relied upon
representations made by the Fund and the Investment Manager in the Underwriting
Agreement, representations made by the Portfolio Manager to the Investment
Manager and representations made to us by one or more officers of the Fund, the
Investment Manager or the Portfolio Manager. We have not independently verified
the accuracy of such representations. In respect of our opinions set forth in
paragraphs 7, 9 and 10 below, we have not searched the dockets of any court,
administrative body or other filing office in any jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Registration Statement is effective under the Securities Act; the
filing of the Prospectus pursuant to Rule 497 under the Securities Act has been
made in the manner and within the time period required by Rule 497; and based
upon oral inquiries to the Commission staff on the date hereof, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for any such purpose is pending or threatened by the Commission.
2. The Fund has been duly organized and is validly existing and in good
standing as an unincorporated voluntary association under and by virtue of the
laws of The Commonwealth of Massachusetts and has full power and authority to
own or lease its properties and to conduct its business as described in the
Registration Statement and the Prospectus. The Certificate of Designation
relating to the Fund's conduct of business in the State of New York is on file
with the Department of State of the State of New York, and the Fund is entitled
to transact intrastate business in the State of California.
3. The Fund's authorized capitalization is as set forth in the Registration
Statement and the Prospectus. The Fund has an indefinite number of authorized
common shares of beneficial interest, no par value per share. The Shares
conform in all material respects as to legal matters to the description of them
under the caption entitled
B-3
"Description of APS" in the Prospectus. All outstanding common shares of
beneficial interest of the Fund have been duly authorized and are validly
issued, fully paid and, subject to the penultimate paragraph of this opinion
letter, non-assessable. The Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance with
the terms of the Underwriting Agreement, will be validly issued, fully paid and,
subject to the penultimate paragraph of this opinion letter, non-assessable. No
person is entitled to any preemptive or other similar rights with respect to the
Shares.
4. To the best of our knowledge after due inquiry, including oral inquiries
of the Commission staff on June 28, 2001, the Fund is duly registered with the
Commission under the Investment Company Act as a closed-end management
investment company, and all required action has been taken by the Fund under the
Securities Act, the Investment Company Act and the rules and regulations
thereunder in connection with the issuance and sale of the Shares to make the
public offering and consummate the sale of the Shares pursuant to the
Underwriting Agreement.
5. The Fund has, or at the relevant time had, full power and authority to
enter into each of the Fund Agreements and to perform all of the terms and
provisions thereof to be carried out by it. Each Fund Agreement has been duly
and validly authorized, executed and delivered by the Fund. Each Fund Agreement
complies in all material respects with all applicable provisions of the
Investment Company Act and the Investment Advisers Act of 1940, as amended, as
the case may be. Assuming due authorization, execution and delivery by the other
parties thereto, each Fund Agreement constitutes the legal, valid and binding
obligation of the Fund enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, moratorium, reorganization and other laws
of general applicability relating to or affecting creditors' rights and to
general equity principles (regardless of whether enforceability is considered in
a proceeding in equity or at law).
6. The Fund has, or at the relevant time had, full power and authority to
enter into each of the Investment Management Agreement and the Underwriting
Agreement and to perform all of the terms and provisions thereof to be carried
out by it. The Investment Management Agreement and the Underwriting Agreement
have been duly and validly authorized, executed and delivered by the Fund.
7. None of (a) the execution and delivery by the Fund of the Investment
Management Agreement, the Underwriting Agreement or any of the Fund Agreements,
(b) the issue and sale by the Fund of the Shares as contemplated by the
Underwriting Agreement and (c) the performance by the Fund of its obligations
under the Investment Management Agreement, the Underwriting Agreement or any of
the Fund Agreements or the consummation by the Fund of the other transactions
contemplated by the Investment Management Agreement, the Underwriting Agreement
or any of the Fund Agreements conflicts or will conflict with, or results or
will result in a breach of, the Declaration of Trust or the Amended Bylaws or,
to our knowledge, any agreement or instrument to which the Fund is a party or by
which the Fund is bound, or violates or will violate any federal statute, law or
regulation or any judgment, injunction, order or decree of any
B-4
federal governmental agency or body that is applicable to the Fund and that is
known to us, which violation would have a material adverse effect on the
condition or business of the Fund.
8. To the best of our knowledge, the Fund is not currently in breach of, or
in default under, any material written agreement or instrument to which it is a
party or by which it or its property is bound or affected.
9. No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or securities association is
required by the Fund for the consummation by the Fund of the transactions
contemplated in the Investment Management Agreement, the Underwriting Agreement
and the Fund Agreements, except such as (a) have been obtained under the
Securities Act, the Investment Company Act or the Exchange Act and (b) may be
required by the New York Stock Exchange or the National Association of
Securities Dealers, Inc. or under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters
pursuant to the Underwriting Agreement.
10. To our knowledge, there are no legal or governmental proceedings
pending or threatened against the Fund, or to which the Fund or any of its
properties is subject, that are required to be described in the Registration
Statement or the Prospectus but are not described therein as required.
11. To the best of our knowledge after due inquiry, there are no
agreements, contracts, indentures, leases or other instruments that are required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which have not been so described or
filed as an exhibit or incorporated therein by reference.
12. Each of the sections in the Prospectus entitled "Taxes" and "Tax
matters," to the extent that it states matters of United States law or legal
conclusions with respect thereto, presents a fair summary of the principal
federal income tax rules currently in effect applicable to the Fund and to the
purchase, ownership and disposition of the Shares.
13. The Registration Statement (except for the financial statements and
schedules, the notes thereto and any schedules and other financial data
contained or incorporated by reference therein or omitted therefrom, as to which
we express no opinion), at the effective time set forth above, and the
Prospectus (except as aforesaid), as of the date thereof, complied as to form in
all material respects to the applicable requirements of the Securities Act and
the Investment Company Act.
We have not independently verified the accuracy, completeness or fairness
of the statements made or the information contained in the Registration
Statement or the Prospectus and, except in the respects and to the extent set
forth in paragraphs 3 and 13 above, we are not passing upon and do not assume
any responsibility therefor. In the course of the preparation by the Fund of
the Registration Statement and the Prospectus,
B-5
we have participated in discussions with your representatives and employees and
officers of the Fund, the Investment Manager and the Portfolio Manager and in
discussions with the Fund's independent accountants, in which the business and
the affairs of the Fund, the Investment Manager and the Portfolio Manager and
the contents of the Registration Statement and the Prospectus were discussed.
There is no assurance that all material facts as to the Fund, the Investment
Manager, the Portfolio Manager and their affairs were disclosed to us or that
our familiarity with the Fund, the Investment Manager or the Portfolio Manager
is such that we would have necessarily recognized the materiality of such facts
as were disclosed to us, and we have to a large extent relied upon statements of
representatives of the Fund, the Investment Manager and the Portfolio Manager as
to the materiality of the facts disclosed to us. On the basis of information
that we have gained in the course of our representation of the Fund in
connection with its preparation of the Registration Statement and the Prospectus
and our participation in the discussions referred to above, no facts have come
to our attention that would lead us to believe that as of August , 2001, the
Registration Statement contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or that as of the date of
the Prospectus and the date hereof the Prospectus contained an untrue statement
of material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light, in each case, of
the circumstances under which they were made, not misleading (in each case,
other than the financial statements and schedules, the notes thereto and any
schedules and other financial data contained or incorporated by reference
therein or omitted therefrom, as to which we express no opinion).
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Fund. However, the Fund's
Declaration of Trust disclaims shareholder liability for acts or obligations of
the Fund and requires that notice of such disclaimer be given in each agreement,
obligation, and instrument entered into or executed by the Fund or the Trustees.
The Declaration of Trust provides for indemnification out of the property of the
Fund for all loss and expense of any shareholder held personally liable solely
by reason of being or having been a shareholder of the Fund. Thus, the risk of
a shareholder's incurring financial loss on account of being a shareholder is
limited to circumstances in which the Fund itself would be unable to meet its
obligations.
This letter and the opinions expressed herein are furnished by us to you
and are solely for benefit of the Underwriters, except that Skadden, Arps,
Slate, Xxxxxxx & Xxxx (Illinois) may rely on this letter as to all matters
governed by the laws of The Commonwealth of Massachusetts in delivering its
opinion to you on the date hereof.
Very truly yours,
Ropes & Xxxx
B-6
SCHEDULE C
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING PIMCO ADVISORS L.P.
August , 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: PIMCO Advisors L.P.
-------------------
Ladies and Gentlemen:
I am the General Counsel of PIMCO Advisors L.P., a Delaware limited
partnership ("PIMCO Advisors"), and have counseled PIMCO Advisors in such
capacity in connection with the sale to you by PIMCO New York Municipal Income
Fund, a voluntary association with transferable shares organized and existing
under and by virtue of the laws of The Commonwealth of Massachusetts (commonly
referred to as a Massachusetts business trust) (the "Fund"), of 2,520 Auction
Preferred Shares, Series A, of the Fund (the "APS"), pursuant to a registration
statement on Form N-2 under the Securities Act of 1933, as amended (the "Act")
and the Investment Company Act of 1940, as amended (the "Investment Company
Act"), filed with the Securities and Exchange Commission (the "Commission") on
July 10, 2001 (Act File No. 333-64828, and Investment Company Act File No. 811-
10381), as amended by Amendment No. 1 filed with the Commission on August 14,
2001, and Amendment No. 2 filed with the Commission on August , 2001 (the
"Registration Statement"), and an underwriting agreement dated August , 2001
by and among you, the Fund and PIMCO Advisors (the "Underwriting Agreement")
relating to the issuance and sale by the Fund of the APS.
This opinion is rendered to you pursuant to Section 6(e) of the
Underwriting Agreement. Capitalized terms used herein without definition have
the meanings assigned to them in the Underwriting Agreement.
As such counsel, I have examined such matters of fact and questions of
law as I have considered appropriate for purposes of rendering the opinions
expressed below, except where a statement is qualified as to knowledge or
awareness, in which case
C-1
I have made no or limited inquiry as specified below. I have examined, among
other things, the following:
(a) the Underwriting Agreement;
(b) that certain Investment Management Agreement by and between the
Fund and PIMCO Advisors, dated as of June 20, 2001; and
(c) that certain Portfolio Management Agreement by and among Pacific
Investment Management Company LLC and PIMCO Advisors, as accepted
and agreed to by the Fund, dated as of June 20, 2001.
The documents described in subsection (a)-(c) above are referred to
herein collectively as the "Transaction Documents."
In my examination, I have assumed the genuineness of all signatures
(other than those of officers of PIMCO Advisors on the Transaction Documents),
the authenticity of all documents submitted to me as originals, and the
conformity to authentic original documents of all documents submitted to me as
copies.
I have been furnished with, and with your consent have relied upon,
certificates of officers of PIMCO Advisors with respect to certain factual
matters. In addition, I have obtained and relied upon such certificates and
assurances from public officials as I have deemed necessary.
I am opining herein as to the effect of the federal laws of the United
States, the internal laws of the State of New York and the internal laws of the
State of Delaware, and I express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other jurisdiction or country
or as to any matters of municipal law or the laws of any other local agencies
within any state or country. My opinions set forth in paragraph 4 below are
based upon my consideration of only those statutes, rules and regulations which,
in my experience, are normally applicable to transactions similar to those
contemplated by the Transaction Documents, generally.
Whenever a statement herein is qualified by "to my knowledge" or a
similar phrase, it is intended to indicate that I do not have current actual
knowledge of the inaccuracy of such statement. However, except as otherwise
expressly indicated, I have not undertaken any independent investigation to
determine the accuracy of any such statement, and no inference that I have any
knowledge of any matters pertaining to such statement should be drawn from my
position as General Counsel of PIMCO Advisors.
Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:
1. PIMCO Advisors is a limited partnership and is validly existing
and in good standing under the Delaware Revised Uniform Limited Partnership Act
(6 Del. C (S). 17-101, et seq.) with all necessary partnership power and
authority to enter into
C-2
and deliver the Transaction Documents and perform its obligations thereunder and
to carry on its business as it is now being conducted and as described in the
Registration Statement. Based solely on certificates from public officials, I
confirm that PIMCO Advisors is qualified to do business in the following States:
California, New York, Connecticut, Texas and Washington, such States being those
in which its ownership or leasing of property or its conducting of business may
require such qualification and where failure to so qualify would have a material
adverse effect on the ability of the Investment Manager to perform its
obligations under the Investment Management Agreement and the Portfolio
Management Agreement.
2. The execution, delivery and performance of the Transaction
Documents by PIMCO Advisors have been duly authorized by all necessary
partnership action of PIMCO Advisors and no other actions on the part of PIMCO
Advisors or its unitholders or any subsidiary of PIMCO Advisors or its
unitholders is necessary to authorize and consummate the transactions
contemplated thereby, and the Transaction Documents have been duly executed and
delivered by PIMCO Advisors.
3. Each of the Investment Management Agreement and the Portfolio
Management Agreement constitutes a legally valid and binding agreement of PIMCO
Advisors, enforceable against PIMCO Advisors in accordance with its terms.
4. Neither the execution and delivery of the Transaction Documents by
PIMCO Advisors, nor the consummation by PIMCO Advisors of transactions
contemplated thereby, nor compliance by PIMCO Advisors with any of the terms and
provisions thereof will:
(i) violate any provision of the Second Amended and Restated
Agreement of Limited Partnership of PIMCO Advisors L.P., effective May 5,
2000,
(ii) violate any federal, California or New York statute, rule or
regulation applicable to PIMCO Advisors (other than federal and state
securities or blue sky laws, the Investment Company Act of 1940, as
amended, and the Investment Advisers Act of 1940, as amended, as to which I
express no opinion),
(iii) violate any agreement to which PIMCO Advisors is a party or
by which it is bound and which is material to PIMCO Advisors' businesses
taken as a whole (the "Material Agreements"),
(iv) violate any order, writ, injunction or decree, known to me
and applicable to PIMCO Advisors, or
(v) to the best of my knowledge, require any consents,
approvals, authorizations, registrations, declarations or filings by PIMCO
Advisors under any federal statute, rule or regulation applicable to PIMCO
Advisors, except as have been obtained under the Act, the Investment
Company Act or the Investment Advisers Act of 1940.
C-3
No opinion is expressed in this paragraph 4 as to the application of
Section 548 of the federal Bankruptcy Code and comparable provisions of state or
foreign law or of any antifraud laws, antitrust or trade regulation laws. No
opinion is expressed in this paragraph 4 with respect to the operating licenses
necessary for PIMCO Advisors' businesses.
5. PIMCO Advisors is duly registered as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act or the Investment
Company Act from acting as investment adviser for the Fund as contemplated by
the Investment Management Agreement, the Registration Statement and the
Prospectus.
6. The description of PIMCO Advisors and its business, and the
statements attributable to PIMCO Advisors, set forth in the Registration
Statement and the Prospectus under the headings "Prospectus Summary - Investment
Manager" and "Management of the Fund" do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to my knowledge, threatened
against PIMCO Advisors of a nature required to be disclosed in the Registration
Statement or Prospectus or that might reasonably result in any material adverse
change in the ability of PIMCO Advisors to fulfill its obligations under either
the Investment Management Agreement or the Portfolio Management Agreement.
The opinions expressed in paragraph 3 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting the
rights or remedies of creditors generally;
(b) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought;
(c) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy; and
(d) the unenforceability of any provision requiring the payment of
attorney's fees, except to the extent that a court determines such fees to be
reasonable.
C-4
In rendering the opinions expressed in paragraph 4 insofar as they
require interpretation of the Material Agreements (i) I have assumed with your
permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the internal laws
of any other state and (ii) to the extent that any questions of legality or
legal construction have arisen in connection with my review, I have applied the
laws of the State of New York in resolving such questions. I advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.
To the extent that the obligations of PIMCO Advisors may be dependent
upon such matters, I assume for purposes of this opinion that: (i) all parties
to the Transaction Documents other than PIMCO Advisors are duly incorporated or
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization; (ii) all parties to
the Transaction Documents other than PIMCO Advisors have the requisite power and
authority and, in the case of natural persons, legal capacity to execute and
deliver the Transaction Documents and to perform their respective obligations
under the Transaction Documents to which they are a party; and (iii) the
Transaction Documents to which such parties other than PIMCO Advisors are a
party have been duly authorized, executed and delivered by such parties and,
other than PIMCO Advisors, constitute their legally valid and binding
obligations, enforceable against them in accordance with their terms. I express
no opinion as to compliance by any parties to the Transaction Documents with any
state or federal laws or regulations applicable to the subject transactions
because of the nature of their business and I express no opinion as to
compliance by any parties to the Transaction Documents with any foreign laws or
regulations applicable to the transactions contemplated by the Transaction
Documents or which may affect the Transaction Documents' enforceability.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
* * *
Special Counsel for the Investment Adviser shall separately opine that, assuming
the Investment Manager is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment adviser for the Fund as contemplated by the
Investment Management
C-5
Agreement, the Registration Statement and the Prospectus, neither the execution
and delivery of the Underwriting Agreement, the Investment Management Agreement
or the Portfolio Management Agreement by the Investment Manager, nor the
consummation by the Investment Manager of the transactions contemplated thereby,
nor compliance by the Investment Manager with any of the terms and provisions
thereof will violate the provisions of the Investment Company Act or the
Advisers Act; provided, however, that such opinion may specifically disclaim any
opinion as to (a) the reasonableness of the fees to be paid to the Investment
Manager under the Investment Management Agreement and (b) the compliance by the
Investment Manager with its indemnification and contribution obligations set
forth in the Underwriting Agreement.
C-6
SCHEDULE D
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING PIMCO
August , 2001
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Re: Pacific Investment Management Company LLC
-----------------------------------------
Ladies and Gentlemen:
I am the General Counsel of PIMCO Advisors L.P., a Delaware limited
partnership ("PIMCO Advisors"), managing member of Pacific Investment Management
Company LLC, a Delaware limited liability company ("PIMCO"). In such capacity I
am rendering this opinion on behalf of PIMCO in connection with the sale to you
by PIMCO New York Municipal Income Fund, a voluntary association with
transferable shares organized and existing under and by virtue of the laws of
The Commonwealth of Massachusetts (commonly referred to as a Massachusetts
business trust) (the "Fund"), of 2,520 Auction Preferred Shares, Series A, of
the Fund (the "APS"), pursuant to a registration statement on Form N-2 under the
Securities Act of 1933, as amended (the "Act") and the Investment Company Act of
1940, as amended (the "Investment Company Act"), filed with the Securities and
Exchange Commission (the "Commission") on July 9, 2001 (Act File No. 333-64828,
and Investment Company Act File No. 811-10381), as amended by Amendment No. 1
filed with the Commission on August 14, 2001, and Amendment No. 2 filed with the
Commission on August , 2001 (the "Registration Statement"), and an
underwriting agreement dated August , 2001, by and among you, the Fund and
PIMCO Advisors (the "Underwriting Agreement") relating to the issuance and sale
by the Fund of the APS.
This opinion is rendered to you pursuant to Section 6(e) of the
Underwriting Agreement. Capitalized terms used herein without definition have
the meanings assigned to them in the Underwriting Agreement.
As such counsel, I have examined such matters of fact and questions of
law as I have considered appropriate for purposes of rendering the opinions
expressed below, except where a statement is qualified as to knowledge or
awareness, in which case I have made no or limited inquiry as specified below.
I have examined, among other
D-1
things, that certain Portfolio Management Agreement by and between PIMCO and
PIMCO Advisors L.P., as accepted and agreed to by the Fund, dated as of June 20,
2001 (the "Portfolio Management Agreement").
In my examination, I have assumed the genuineness of all signatures
(other than those of officers of PIMCO on the Portfolio Management Agreement),
the authenticity of all documents submitted to me as originals, and the
conformity to authentic original documents of all documents submitted to me as
copies.
I have been furnished with, and with your consent have relied upon,
certificates of officers of PIMCO with respect to certain factual matters. In
addition, I have obtained and relied upon such certificates and assurances from
public officials as I have deemed necessary.
I am opining herein as to the effect of the federal laws of the United
States, the internal laws of the State of New York and the internal laws of the
State of Delaware, and I express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other jurisdiction or country
or as to any matters of municipal law or the laws of any other local agencies
within any state or country. My opinions set forth in paragraph 4 below are
based upon my consideration of only those statutes, rules and regulations which,
in my experience, are normally applicable to transactions similar to those
contemplated by the Portfolio Management Agreement, generally.
Whenever a statement herein is qualified by "to my knowledge" or a
similar phrase, it is intended to indicate that I do not have current actual
knowledge of the inaccuracy of such statement. However, except as otherwise
expressly indicated, I have not undertaken any independent investigation to
determine the accuracy of any such statement, and no inference that I have any
knowledge of any matters pertaining to such statement should be drawn from my
position as General Counsel of PIMCO Advisors.
Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:
1. PIMCO is a limited liability company and is validly existing and
in good standing under the Delaware Limited Liability Company Act (6 Del. C (S).
18-101, et seq.) with all necessary limited liability company power and
authority to enter into and deliver the Portfolio Management Agreement and
perform its obligations thereunder and to carry on its business as it is now
being conducted and as described in the Registration Statement. Based solely on
certificates from public officials, I confirm that PIMCO is qualified to do
business in the following States: California and New York, such States being
those in which its ownership or leasing of property or its conducting of
business may require such qualification and where failure to so qualify would
have a material adverse effect on the ability of PIMCO to perform its
obligations under the Portfolio Management Agreement.
2. The execution, delivery and performance of the Portfolio
Management Agreement by PIMCO have been duly authorized by all necessary limited
D-2
liability company action of PIMCO and no other actions on the part of PIMCO or
its unitholders or any subsidiary of PIMCO or its unitholders is necessary to
authorize and consummate the transactions contemplated thereby, and the
Portfolio Management Agreement has been duly executed and delivered by PIMCO.
3. The Portfolio Management Agreement constitutes a legally valid and
binding agreement of PIMCO, enforceable against PIMCO in accordance with its
terms.
4. Neither the execution and delivery of the Portfolio Management
Agreement by PIMCO, nor the consummation by PIMCO of transactions contemplated
thereby, nor compliance by PIMCO with any of the terms and provisions thereof
will:
(i) violate any provision of the limited liability company
agreement of PIMCO, effective May 5, 2000,
(ii) violate any federal, California or New York statute, rule or
regulation applicable to PIMCO (other than federal and state securities or
blue sky laws, the Investment Company Act of 1940, as amended, and the
Investment Advisers Act of 1940, as amended, as to which I express no
opinion),
(iii) violate any agreement to which PIMCO is a party or by which
it is bound and which is material to PIMCO's businesses taken as a whole
(the "Material Agreements"),
(iv) violate any order, writ, injunction or decree, known to me
and applicable to PIMCO, or
(v) to the best of my knowledge, require any consents, approvals,
authorizations, registrations, declarations or filings by PIMCO under any
federal statute, rule or regulation applicable to PIMCO, except as have
been obtained under the Act, the Investment Company Act or the Investment
Advisers Act of 1940.
No opinion is expressed in this paragraph 4 as to the application of
Section 548 of the federal Bankruptcy Code and comparable provisions of state or
foreign law or of any antifraud laws, antitrust or trade regulation laws. No
opinion is expressed in this paragraph 4 with respect to the operating licenses
necessary for PIMCO's businesses.
5. PIMCO is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act or the Investment Company
Act from acting as investment sub-adviser for the Fund as contemplated by the
Portfolio Management Agreement, the Registration Statement and the Prospectus.
6. The description of PIMCO and its business, and the statements
attributable to PIMCO, set forth in the Registration Statement and the
Prospectus under the headings "Prospectus Summary - Portfolio Manager" and
"Management of the Fund" do not contain any untrue statement of a material fact
or omit to state any material fact
D-3
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to my knowledge, threatened
against PIMCO of a nature required to be disclosed in the Registration Statement
or Prospectus or that might reasonably result in any material adverse change in
the ability of PIMCO to fulfill its obligations under the Portfolio Management
Agreement.
The opinions expressed in paragraph 3 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization, moratorium
or other similar laws now or hereafter in effect relating to or affecting the
rights or remedies of creditors generally;
(b) the effect of general principles of equity, whether enforcement
is considered in a proceeding in equity or at law, and the discretion of the
court before which any proceeding therefor may be brought;
(c) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or
contribution to a party with respect to a liability where such indemnification
or contribution is contrary to public policy; and
(d) the unenforceability of any provision requiring the payment of
attorney's fees, except to the extent that a court determines such fees to be
reasonable.
In rendering the opinions expressed in paragraph 4 insofar as they
require interpretation of the Material Agreements (i) I have assumed with your
permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the internal laws
of any other state and (ii) to the extent that any questions of legality or
legal construction have arisen in connection with my review, I have applied the
laws of the State of New York in resolving such questions. I advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.
To the extent that the obligations of PIMCO may be dependent upon such
matters, I assume for purposes of this opinion that: (i) all parties to the
Portfolio Management Agreement other than PIMCO are duly incorporated or
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization; (ii) all parties to
the Portfolio Management Agreement
D-4
other than PIMCO have the requisite power and authority and, in the case of
natural persons, legal capacity to execute and deliver the Portfolio Management
Agreement and to perform their respective obligations under the Portfolio
Management Agreement; and (iii) the Portfolio Management Agreement has been duly
authorized, executed and delivered by such parties other than PIMCO and, other
than PIMCO, constitutes their legally valid and binding obligations, enforceable
against them in accordance with their terms. I express no opinion as to
compliance by any parties to the Portfolio Management Agreement with any state
or federal laws or regulations applicable to the subject transactions because of
the nature of their business and I express no opinion as to compliance by any
parties to the Portfolio Management Agreement with any foreign laws or
regulations applicable to the transactions contemplated by the Portfolio
Management Agreement or which may affect the Portfolio Management Agreement's
enforceability.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
D-5
SCHEDULE E
FORM OF OPINION OF SIMPSON, THACHER & XXXXXXXX
August , 2001
Re: PIMCO New York Municipal Income Fund
------------------------------------
UBS Warburg LLC
X.X. Xxxxxxx & Sons, Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
as Managing Underwriters
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
We have acted as special New York counsel to PIMCO New York Municipal
Income Fund, a voluntary association with transferable shares organized and
existing under and by virtue of the laws of the Commonwealth of Massachusetts
(the "Fund") in connection with the purchase by you of an aggregate of 2,520
Series A auction preferred shares, no par value, (the "Shares") pursuant to the
Underwriting Agreement dated August [20], 2001, among you as managing
underwriters of the several underwriters named in Schedule A thereto (the
"Underwriters"), the Fund, PIMCO Advisors, L.P., and Pacific Investment
Management Company LLC (the "Underwriting Agreement").
We have examined the Registration Statement on Form N-2 (File Nos.
333-64828 and 811-10381) filed by the Fund under the Securities Act of 1933, as
amended (the "Act"), and the Investment Company Act of 1940, as amended, as it
became effective under each of such Acts, and the Fund's prospectus dated August
[20], 2001 (the "Prospectus") and the statement of additional information
incorporated by reference therein (the "Statement of Additional Information"),
filed by the Fund pursuant to Rule 497(h) of the rules and regulations of the
Securities and Exchange Commission (the "Commission") under the Act. We have
examined such official statements issued, and other information reported, by the
State of New York and by the City of New York in connection with the issuance of
securities, as we have deemed appropriate. In addition, we have made such other
and further investigations as we have deemed relevant and necessary as a basis
for the opinion expressed herein.
We understand that the Fund was organized as a Massachusetts business
trust on May 10, 2001 pursuant to a Declaration governed by the laws of the
Commonwealth of Massachusetts, and is a non-diversified, closed-end management
E-1
investment company registered under the Investment Company Act of 1940, as
amended. We further understand that the Fund will invest its assets so that,
(i) under normal market conditions, at least 90% of its assets will be invested
in municipal bonds which pay interest that, in the opinion of bond counsel to
the issuer (or on the basis of other authority believed by the Fund's portfolio
manager to be reliable), is exempt from federal, New York State and New York
City income taxes and (ii) less than 50% of the value of its total assets, as
described in Section 851(c) of the Internal Revenue Code of 1986, as amended,
will consist of obligations of the United States and its possessions.
We understand that the Fund intends to (i) qualify as a "regulated
investment company" under Subchapter M of the Internal Revenue Code of 1986, as
amended, (ii) distribute out its income to shareholders of the Fund each year so
that the Fund itself generally will be relieved of federal income and excise
taxes, and (iii) pay "exempt-interest dividends" (as defined in the Prospectus)
which are not generally subject to federal income tax.
We have reviewed the statements set forth in the Prospectus under the
heading "Tax Matters - New York Tax Matters" and in Appendix B to the Statement
of Additional Information under the heading "Factors Pertaining to New York".
Based upon the foregoing, we are of the opinion that the statements contained in
the Prospectus under the heading "Tax Matters - New York Tax Matters" and in
Appendix B to the Statement of Additional Information under the heading "Factors
Pertaining to New York", to the extent that such statements purport to
constitute summaries of matters of law or legal conclusions, constitute accurate
summaries of such law or legal conclusions in all material respects. Such
statements are based on current New York tax laws and our understanding of the
Fund's proposed operations, as disclosed in the Prospectus.
We have not independently verified the accuracy, completeness or
fairness of the statements made in the Prospectus under the heading "Tax Matters
- New York Tax Matters" and in Appendix B to the Statement of Additional
Information under the heading "Factors Pertaining to New York" and take no
responsibility therefor, except as and to the extent set forth above. In the
course of the preparation by the Fund of the Prospectus and Statement of
Additional Information, we participated in conferences with counsel to the Fund
concerning the information contained in the Prospectus and in Appendix B to the
Statement of Additional Information under such headings. Based upon our
examination of the Prospectus and Statement of Additional Information and our
participation in the conferences referred to above, we have no reason to believe
that the statements made in the Prospectus under the heading "Tax Matters - New
York Tax Matters" and in Appendix B to the Statement of Additional Information
under the heading "Factors Pertaining to New York" contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States. This opinion letter is
rendered to you in connection with the above-mentioned transaction. This
opinion letter may not be relied
E-2
upon by you for any other purpose, or relied upon by, or furnished to, any other
person, firm or corporation without our prior written consent.
Very truly yours,
XXXXXXX XXXXXXX & XXXXXXXX
E-3
SCHEDULE F
FORM OF ACCOUNTANT'S LETTER
August , 2001
The Board of Trustees of
PIMCO New York Municipal Income Fund
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of PIMCO New York
Municipal Income Fund (the "Fund") as of _________, 2001 included in the
Registration Statement on Form N-2 filed by the Fund under the Securities Act of
1933 (the "Act") (File No. 333- ) and under the Investment Company Act of
1940 (the "1940 Act") (File No. 811- ); such statement and our report with
respect to such statement are included in the Registration Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the Fund
within the meaning of the Act and the applicable rules and regulations
thereunder.
2. In our opinion, the statement of assets and liabilities included in
the Registration Statement and audited by us complies as to form in all
respects with the applicable accounting requirements of the Act, the 1940
Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Trustees and all Committees of
the Board of Trustees of the Fund as set forth in the minute books at the
offices of the Fund, officials of the Fund having advised us that the
minutes of all such meetings through ________________, 2001, were set
forth therein.
4. Fund officials have advised us that no financial statements as of
any date subsequent to ________________, 2001, are available. We have made
inquiries of certain officials of the Fund who have responsibility for
financial and accounting
F-1
matters regarding whether there was any change at ________________, 2001,
in the capital shares or net assets of the Fund as compared with amounts
shown in the _____________, 2001, statement of assets and liabilities
included in the Registration Statement, except for changes that the
Registration Statement discloses have occurred or may occur. On the basis
of our inquiries and our reading of the minutes as described in Paragraph
3, nothing came to our attention that caused us to believe that there were
any such changes.
The foregoing procedures do not constitute an audit made in accordance with
generally accepted auditing standards. Accordingly, we make no representations
as to the sufficiency of the foregoing procedures for your purposes.
This letter is solely for the information of the addressees and to assist the
underwriters in conducting and documenting their investigation of the affairs of
the Fund in connection with the offering of the securities covered by the
Registration Statement, and is not to be used, circulated, quoted or otherwise
referred to within or without the underwriting group for any other purpose,
including but not limited to the registration, purchase or sale of securities,
nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Very Truly Yours,
PRICEWATERHOUSECOOPERS LLP
F-2
