TENDER OFFER AGREEMENT
This Agreement (“Agreement”) is made and entered into as of the 14th day of October, 2015, by and among PIMCO Corporate & Income Strategy Fund (“PCN”), PIMCO High Income Fund (“PHK” and, together with PCN, each, a “Fund” and, collectively, the “Funds”), Pacific Investment Management Company LLC (“PIMCO” and, together with the Funds, the “Fund Parties”) and Citigroup Global Markets Inc. and Citicorp Funding Inc. (collectively, the “Citigroup Parties”).
1. Tender Offers. With respect to each Fund, subject to satisfaction of Section 2(a) below, the Fund Parties (each Fund with respect to itself only) agree to conduct a tender offer by PCN for 100% of its issued and outstanding ARPS at a price equal to 82.5% of the $25,000 per share liquidation preference of the ARPS (i.e., a tender offer of $20,625 per ARPS share) and a tender offer by PHK for 100% of its issued and outstanding ARPS at a price equal to 83% of the $25,000 face value (i.e., a tender offer of $20,750 per ARPS share), scheduled to expire as of the close of the New York Stock Exchange on November 20, 2015 (such date, as it may be extended in accordance with the terms of the Tender Offers, the “Expiration Date”), subject only to substantially the same conditions as are set forth in Appendix A hereto (each, a “Tender Offer” and, collectively, the “Tender Offers”), which conditions do not include any minimum level of participation in the Tender Offer by ARPS holders of the Fund. Each Fund (with respect to itself only) hereby agrees that if, as of the Expiration Date of its Tender Offer, all of such conditions are satisfied, it shall accept for payment all ARPS properly tendered pursuant to its Tender Offer.
(a) With respect to each Fund, if a Tender Offer is conducted by the Fund, the Citigroup Parties shall tender one-hundred percent (100%) of their holdings in ARPS of the Fund, such that the Citigroup Parties would have no holdings in the Fund’s ARPS following completion of the Fund’s Tender Offer.
3. Release of Any Claims; Covenants Not to Xxx.
(a) Subject to and upon completion of the Tender Offers, each of the Citigroup
Parties, on behalf of itself, its heirs, beneficiaries, administrators, personal representatives, successors, assigns, parents, subsidiaries, shareholders, affiliates, and predecessors, as applicable, in exchange for the agreements and other consideration in this Agreement, (i) does hereby compromise, settle, and absolutely, unconditionally, and fully release and forever discharge each of the Fund Parties and their current and former respective successors, subsidiaries, affiliates, employees, officers, directors, trustees, managers, investors and shareholders, and each of their respective attorneys, administrators, personal representatives, insurers and assigns (together, the “Released Fund Parties”) of and from any and all claims, demands, debts, liens, obligations, fees and expenses, harm, injuries, liabilities, cause or causes of action, whether known or unknown, claimed or alleged, asserted or unasserted, either at law or in equity, whether statutory, in contract or in tort, of any kind or character which it has, or owns, or may now or in the future have or own for any claims arising out of or relating in any way to the Discussions, the Tender Offer or the Citigroup Parties’ acquisition of, transactions in, ownership of or holdings in the Funds’ ARPS and (ii) acknowledges and agrees that it will not now or in the future bring any claim, action, lawsuit, arbitration proceeding or other form of action against any of the Released Fund Parties, directly or indirectly, arising out of or in any way connected with any claim or potential claim released under this Agreement as referenced in sub-paragraph 3(a)(i) above, and that this Agreement is a bar to any such claim, action, lawsuit, proceeding or other form of action.
(b) Subject to and upon completion of the Tender Offers, each of the Fund Parties, on behalf of itself, its heirs, beneficiaries, administrators, personal representatives, successors, assigns, parents, subsidiaries, shareholders, affiliates, and predecessors, as applicable, in exchange for the agreements and other consideration in this Agreement, (i) does hereby compromise, settle, and absolutely, unconditionally, and fully release and forever discharge each of the Citigroup Parties and their current and former respective successors, subsidiaries, affiliates, employees, officers, directors, trustees, managers, investors and shareholders, and each of their respective attorneys, administrators, personal representatives, insurers and assigns (together, the “Released Citigroup Parties”) of and from any and all claims, demands, debts, liens, obligations, fees and expenses, harm, injuries, liabilities, cause or causes of action, whether known or unknown, claimed or alleged, asserted or unasserted, either at law or in equity, whether statutory, in contract or in tort, of any kind or character which it has, or owns, or may now or in the future have or own for any claims arising out of or relating in any way to the Discussions, the Tender Offers or the Citigroup Parties’ acquisition of, transactions in, ownership of or holdings in the Funds’ ARPS and (ii) acknowledges and agrees that it will not now or in the future bring any claim, action, lawsuit, arbitration proceeding or other form of action against any of the Released Citigroup Parties, directly or indirectly, arising out of or in any way connected with any claim or potential claim released under this Agreement as referenced in sub-paragraph 3(b)(i) above, and that this Agreement is a bar to any such claim, action, lawsuit, proceeding or other form of action.
(c) The Citigroup Parties and the Fund Parties acknowledge and agree that the releases and covenants provided in this Section 3 are in no way an admission or acknowledgment of any liabilities, claims or causes of action that one party may have against the other.
(d) The provisions of Section 3(a) and Section 3(b) shall not be deemed to preclude any claim by any party hereto alleging a breach of the terms of this Agreement.
6. Term. This Agreement shall terminate on the earlier of (i) October 27, 2015, if the Funds have not on or before that date commenced the Tender Offers, (ii) the close of the New York Stock Exchange on the business day next following the Expiration Date, if the Funds have not accepted validly tendered ARPS for purchase pursuant to the Tender Offers by such time and (iii) the date of completion of the Tender Offers. In the case of termination of this Agreement pursuant to Section 6(i) and Section 6(ii), all provisions of this Agreement shall terminate and have no further force or effect upon such termination, except that the confidentiality obligations of the parties under Section 5 hereof and the Confidentiality Letter Agreement shall survive the termination of this Agreement for a period of three years from the date of this Agreement. In the case of termination of this Agreement pursuant to Section 6(iii), the obligations of the parties under Sections 1, 2, 3, 4 and 5 hereof shall survive the termination of this Agreement.
If to a Citigroup Party: | Citigroup Global Markets Inc. | |||
000 Xxxxxxxxx Xx., 0xx Xxxxx | ||||
Xxx Xxxx, XX 00000 | ||||
Attn: Xxxxx Xxxxx | ||||
E-mail: xxxxxxx.xxxxx@xxxx.xxx | ||||
Facsimile: 000 000-0000
| ||||
If to PIMCO: | Pacific Investment Management Company LLC | |||
0000 Xxxxxxxx | ||||
Xxx Xxxx, Xxx Xxxx 00000 | ||||
Attn: Xxxxxx Xxxxxx | ||||
E-mail: xxxx.xxxxxx@xxxxx.xxx | ||||
Facsimile: 000-000-0000 |
If to PCN: | PIMCO Corporate & Income Strategy Fund | |||
c/o Pacific Investment Management Company LLC | ||||
0000 Xxxxxxxx | ||||
Xxx Xxxx, Xxx Xxxx 00000 | ||||
Attn: Xxxxxx Xxxxxx | ||||
E-mail: xxxx.xxxxxx@xxxxx.xxx | ||||
Facsimile: 000-000-0000
| ||||
If to PHK: | PIMCO High Income Fund | |||
c/o Pacific Investment Management Company LLC | ||||
0000 Xxxxxxxx | ||||
Xxx Xxxx, Xxx Xxxx 00000 | ||||
Attn: Xxxxxx Xxxxxx | ||||
E-mail: xxxx.xxxxxx@xxxxx.xxx | ||||
Facsimile: 000-000-0000 |
(e) Governing Law. This Agreement is governed by the laws of the State of New York, without regard to the principles of conflicts of laws or choice of laws of any state or commonwealth. Each party submits to the exclusive jurisdiction of, and acknowledges the propriety of venue in the United States District Court for the Southern District of New York sitting in New York County, New York, and its appellate courts, as well as any Courts of the State of New York sitting in New York County, New York, and the appellate courts thereof. To the extent not prohibited by applicable law that cannot be waived, the parties hereby waive, and covenant that they will not assert (whether as plaintiff, defendant or otherwise), any right to trial by jury in any action arising in whole or in part under or in connection with this Agreement, whether now existing or hereafter arising, and whether sounding in contract, tort or otherwise.
The parties agree that any of them may file a copy of this Section 8(e) with any court as written evidence of the knowing, voluntary and bargained-for agreement between the parties each irrevocably to waive its right to trial by jury in any proceeding whatsoever between them relating to this Agreement, which will instead be tried in a court of competent jurisdiction by a judge sitting without a jury.
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PIMCO Corporate & Income Strategy Fund
By: | /s/ Xxxxx X. Xxxxxxx |
Date: | October 14, 2015 |
By: | /s/ Xxxxx X. Xxxxxxx |
Date: | October 14, 2015 |
Pacific Investment Management Company LLC
By: | /s/ Xxxxx X. Xxxxxx |
Date: | October 14, 2015 |
Citigroup Global Markets, Inc.
By: | /s/ Xxxxxxx Xxxxx |
Date: | October 14, 2015 |
Citicorp Funding Inc.
By: | /s/ Xxxxxx Xxxx |
Date: | October 14, 2015 |
APPENDIX A
TENDER OFFER CONDITIONS:
It is a condition to the tender offer that each Fund cannot accept tenders or effect repurchases, unless otherwise determined by the Fund’s Board, if (1) such transactions, if consummated, would (a) result in delisting of the Fund’s common shares from the New York Stock Exchange; (b) impair the Fund’s status as a regulated investment company under the Internal Revenue Code of 1986 (which would make the Fund subject to federal income tax on all of its net income and gains in addition to the taxation of shareholders who receive distributions from the Fund); or (c) result in a failure of the Fund to comply with the applicable asset coverage requirements in the event any senior securities are issued and outstanding; (2) there shall be instituted or pending before any governmental entity or court any action, proceeding, application or claim, or any judgment, order or injunction sought, or any other action taken by any person or entity, which (a) restrains, prohibits or materially delays the making or consummation of the tender offer; (b) challenges the acquisition by the Fund of ARPS pursuant to the tender offer or the Board’s fulfillment of its fiduciary obligations in connection with the tender offer; (c) seeks to obtain any material amount of damages in connection with the tender offer; or (d) otherwise directly or indirectly materially adversely affects the tender offer or the Fund; or (3) there is any (a) suspension of or limitation on prices for trading securities generally on the New York Stock Exchange or other national securities exchange(s); (b) declaration of a banking moratorium by Federal or state authorities or any suspension of payment by banks in the United States or New York State; or (c) limitation affecting the Fund or the issuers of its portfolio securities imposed by federal or state authorities on the extension of credit by lending institutions.