Exhibit k.5
PIMCO NEW YORK MUNICIPAL INCOME FUND III
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AUCTION AGENCY AGREEMENT
dated as of December __, 2002
Relating to
Auction Preferred Shares
Series A
Of
PIMCO NEW YORK MUNICIPAL INCOME FUND III
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DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of December __,
2002, is between PIMCO New York Municipal Income Fund III (the "Fund") and
Deutsche Bank Trust Company Americas, a New York banking corporation.
The Fund proposes to issue an aggregate of ______ preferred shares, par
value $0.00001 per share, liquidation preference $25,000 per share, designated
as Auction Preferred Shares, Series A (the "Preferred Shares"), pursuant to the
Fund's Amended and Restated Bylaws (as defined below).
The Fund desires that Deutsche Bank Trust Company Americas perform certain
duties as agent in connection with each Auction (as defined below) of Preferred
Shares (in such capacity, the "Auction Agent"), and as the transfer agent,
registrar, dividend paying agent and redemption agent with respect to the
Preferred Shares (in such capacity, the "Paying Agent"), upon the terms and
conditions of this Agreement, and the Fund hereby appoints Deutsche Bank Trust
Company Americas as said Auction Agent and Paying Agent in accordance with those
terms and conditions (hereinafter generally referred to as the "Auction Agent,"
except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Fund and the Auction Agent agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Amended and Restated Bylaws.
Capitalized terms used herein but not defined herein shall have the
respective meanings specified in the Amended and Restated Bylaws.
1.2 Certain Defined Terms.
As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Agent Member" shall mean a member of the Securities Depository
that will act on behalf of a Beneficial Owner of one or more Preferred Shares or
on behalf of a Potential Beneficial Owner.
(b) "Amended and Restated Bylaws" shall mean the Amended and Restated
Bylaws of the Fund in effect at the time the Registration Statement relating to
the Preferred Shares is declared effective by the Securities and Exchange
Commission, specifying the powers, preferences and rights of the Preferred
Shares.
(c) "Auction" shall have the meaning specified in Section 2.1 hereof.
(d) "Auction Procedures" shall mean the procedures as from time to
time in effect for conducting Auctions that are set forth in Section 11.10 of
the Amended and Restated Bylaws.
(e) "Authorized Officer" shall mean each Managing Director, Vice
President, Assistant Vice President and Associate of the Auction Agent and every
other officer or employee of the Auction Agent designated as an "Authorized
Officer" for purposes hereof in a written communication from the Auction Agent
to the Fund.
(f) "Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent and a Broker-Dealer substantially in the form attached hereto as
Exhibit A.
(g) "Closing" shall mean the date the Fund consummates the
transactions for the issuance and sale of the Preferred Shares.
(h) "Fund Officer" shall mean the Chairman, the President, each Vice
President (whether or not designated by a number or word or words added before
or after the title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant Treasurer of the Fund and every other
officer or employee of the Fund designated as a "Fund Officer" for purposes
hereof in a notice from the Fund to the Auction Agent.
(i) "Holder" shall be a holder of record of one or more Preferred
Shares, listed as such in the Share Register.
(j) "Settlement Procedures" shall mean the Settlement Procedures
attached as Exhibit A to the Broker-Dealer Agreement.
1.3 Rules of Construction.
Unless the context or use indicates another or different meaning or intent,
the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto" and other words of similar
import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to New
York City time.
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II. THE AUCTION.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Board of Trustees of the Fund has adopted a resolution
appointing Deutsche Bank Trust Company Americas as Auction Agent for purposes of
the Auction Procedures. The Auction Agent hereby accepts such appointment and
agrees that, on each Auction Date, it shall follow the procedures set forth in
this Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate for the Preferred Shares for the next Dividend Period. Each
periodic operation of such procedures is hereinafter referred to as an
"Auction."
(b) All of the provisions contained in the Auction Procedures and in
the Settlement Procedures are incorporated herein by reference in their entirety
and shall be deemed to be a part hereof to the same extent as if such provisions
were set forth fully herein.
2.2 Preparation for Each Auction; Maintenance of Registry of Existing
Holders.
(a) As of the date hereof, the Fund shall provide the Auction Agent
with a list of the Broker-Dealers previously approved by the Auction Agent and
shall cause to be delivered to the Auction Agent for execution by the Auction
Agent a Broker-Dealer Agreement signed by each such Broker-Dealer. The Auction
Agent shall keep such list current and accurate and shall indicate thereon, or
on a separate list, the identity of each Existing Holder, if any, whose most
recent Order was submitted by a Broker-Dealer on such list and resulted in such
Existing Holder continuing to hold or purchase Preferred Shares. Not later than
five Business Days prior to any Auction Date for which any change in such list
of Broker-Dealers is to be effective, the Fund shall notify the Auction Agent in
writing of such change and, if any such change is the addition of a
Broker-Dealer to such list, the Fund shall cause to be delivered to the Auction
Agent for execution by the Auction Agent a Broker-Dealer Agreement signed by
such Broker-Dealer. The Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent shall have given the notice referred to in
clause (vii) of paragraph (a) of the Settlement Procedures, the Auction Agent,
by such means as the Auction Agent reasonably deems practicable, shall give
notice of such change to the Broker-Dealers not later than the earlier of 9:15
a.m. on the new Auction Date or 9:15 a.m. on the old Auction Date.
(c) The provisions contained in Section 11.2 of the Amended and
Restated Bylaws concerning Special Dividend Periods and the notification of a
Special Dividend Period will be followed by the Fund and, to the extent
applicable, the Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
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(d) (i) On each Auction Date, the Auction Agent shall determine the
Maximum Applicable Rate. Not later than 9:30 a.m. on each Auction Date, the
Auction Agent shall notify the Fund and the Broker-Dealers of the Maximum
Applicable Rate.
(ii) If the Reference Rate is the applicable "AA" Composite
Commercial Paper Rate and such rate is to be based on rates supplied by
Commercial Paper Dealers and one or more of the Commercial Paper Dealers shall
not provide a quotation for the determination of the applicable "AA" Composite
Commercial Paper Rate, the Auction Agent immediately shall notify the Fund so
that the Fund can determine whether to select a substitute Commercial Paper
Dealer or substitute Commercial Paper Dealers to provide the quotation or
quotations not being supplied by any Commercial Paper Dealer or Commercial Paper
Dealers. The Fund promptly shall advise the Auction Agent of any such selection.
If the Fund does not select any such substitute Commercial Paper Dealer or
substitute Commercial Paper Dealers, then the rates shall be supplied by the
remaining Commercial Paper Dealer or Commercial Paper Dealers.
(e) (i) The Auction Agent shall maintain a current registry of the
Existing Holders of the Preferred Shares for purposes of each individual
Auction. The Fund shall use commercially reasonable efforts to provide or cause
to be provided to the Auction Agent within ten Business Days following the date
of the Closing a list of the initial Existing Holders of Preferred Shares, and
the Broker-Dealer of each such Existing Holder through which such Existing
Holder purchased such shares. The Auction Agent may rely upon, as evidence of
the identities of the Existing Holders, such list, the results of each Auction
and notices from any Existing Holder, the Agent Member of any Existing Holder or
the Broker-Dealer of any Existing Holder with respect to such Existing Holder's
transfer of any Preferred Shares to another Person.
(ii) In the event of any partial redemption of Preferred Shares,
upon notice by the Fund to the Auction Agent of such partial redemption, the
Auction Agent promptly shall request the Securities Depository to notify the
Auction Agent of the identities of the Agent Members (and the respective numbers
of shares) from the accounts of which shares have been called for redemption and
the person or department at such Agent Member to contact regarding such
redemption. At least two Business Days prior to the Auction preceding the date
of redemption, the Auction Agent shall request each Agent Member so identified
to disclose to the Auction Agent (upon selection by such Agent Member of the
Existing Holders whose shares are to be redeemed) the number of Preferred Shares
of each such Existing Holder, if any, to be redeemed by the Fund, provided that
the Auction Agent has been furnished with the name and telephone number of a
person or department at such Agent Member from which it is to request such
information. In the absence of receiving any such information with respect to an
Existing Holder, from such Existing Holder's Agent Member or otherwise, the
Auction Agent may continue to treat such Existing Holder as having ownership of
the number of Preferred Shares shown in the Auction Agent's registry of Existing
Holders.
(iii) The Auction Agent shall register a transfer of the ownership
of Preferred Shares from an Existing Holder to another Existing Holder, or to
another Person if permitted by the Fund, only if (A) such transfer is made
pursuant to an Auction or (B) if such transfer is made other than pursuant to an
Auction, the Auction Agent has been notified of such
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transfer in writing, in a notice substantially in the form of Exhibit C to the
Broker-Dealer Agreement, by such Existing Holder or by the Agent Member of such
Existing Holder. The Auction Agent is not required to accept any notice of
transfer delivered for an Auction unless it is received by the Auction Agent by
12:00 noon of the Auction Date. The Auction Agent shall rescind a transfer made
on the registry of the Existing Holders of any Preferred Shares if the Auction
Agent has been notified in writing, in a notice substantially in the form of
Exhibit D to the Broker-Dealer Agreement, by the Agent Member or the
Broker-Dealer of any Person that (i) purchased any Preferred Shares and the
seller failed to deliver such shares or (ii) sold any Preferred Shares and the
purchaser failed to make payment to such Person upon delivery to the purchaser
of such shares.
(f) The Auction Agent may request that the Broker-Dealers, as set
forth in Section 3.2(c) of the Broker-Dealer Agreements, provide the Auction
Agent with a list of their respective customers that such Broker-Dealers believe
are Beneficial Owners of Preferred Shares. The Auction Agent shall keep
confidential any such information and shall not disclose any such information so
provided to any Person other than the relevant Broker-Dealer and the Fund,
provided that the Auction Agent reserves the right to disclose any such
information if it is advised by its counsel that its failure to do so would be
unlawful.
2.3 Auction Schedule.
Subject to Article 11 of the Amended and Restated Bylaws, the Auction Agent
shall normally conduct Auctions weekly (usually Monday) in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent with
the consent of the Fund, which consent shall not be withheld unreasonably. The
Auction Agent shall give notice of any such change to each Broker-Dealer. Such
notice shall be received prior to the first Auction Date on which any such
change shall be effective.
Time Event
---- -----
By 9:30 a.m. Auction Agent shall advise the Fund and
the Broker-Dealers of the Reference Rate
and the Maximum Applicable Rate as set
forth in Section 2.2(d)(i) hereof.
9:30 a.m. - 1:00 p.m. Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Section 11.10(c) of the
Amended and Restated Bylaws. Submission
deadline is 1:00 p.m.
Not earlier than 1:00 p.m. Auction Agent shall make determinations
pursuant to Section 11.10(d)(i) of the
Amended and Restated Bylaws.
By approximately 3:00 p.m. Auction Agent shall advise the Fund of
the results of the Auction as provided
in Section 11.10(d)(ii) of the Amended
and Restated Bylaws.
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Submitted Bid Orders and Submitted Sell Orders will be accepted
and rejected in whole or in part and Preferred Shares will be
allocated as provided in Section 11.10(e) of the Amended and
Restated Bylaws.
Auction Agent shall give notice of the Auction results as set
forth in Section 2.4 hereof.
2.4 Notice of Auction Results.
The Auction Agent will advise each Broker-Dealer who submitted a Bid or
Sell Order in an Auction whether such Bid or Sell Order was accepted or rejected
in whole or in part and of the Applicable Rate for the next Dividend Period for
the related Preferred Shares by telephone or through its Auction Processing
System as set forth in paragraph (a) of the Settlement Procedures.
2.5 Broker-Dealers.
(a) Not later than 12:00 noon on each Auction Date, the Auction Agent
after each Auction will pay a service charge from funds provided by the Fund to
each Broker-Dealer on the basis of the purchase price of Preferred Shares placed
by such Broker-Dealer at such Auction. The service charge shall be (i) in the
case of any Auction Date immediately preceding a 7-day Dividend Period, the
product of (A) a fraction the numerator of which is the number of days in such
Dividend Period (calculated by counting the first day of such Dividend Period
but excluding the last day thereof) and the denominator of which is 365, times
(B) 1/4 of 1%, times (C) $25,000 times (D) the sum of (I) the aggregate number
of Preferred Shares placed by the Broker-Dealer in the applicable Auction that
were (x) the subject of a Submitted Bid of a Beneficial Owner submitted by the
Broker-Dealer and continued to be held as a result of such submission and (y)
the subject of a Submitted Bid of a Potential Beneficial Owner submitted by the
Broker-Dealer and were purchased as a result of such submission plus (II) the
aggregate number of Preferred Shares subject to valid Hold Orders (determined in
accordance with Section 11.10(b) of the Amended and Restated Bylaws) submitted
to the Auction Agent by the Broker-Dealer plus (III) the number of Preferred
Shares deemed to be subject to Hold Orders by Beneficial Owners pursuant to
Section 11.10(b) of the Amended and Restated Bylaws that were acquired by the
Broker-Dealer for its own account or were acquired by such Beneficial Owners
through the Broker-Dealer; and (ii) in the case of any Special Dividend Period
the amount determined by mutual consent of the Fund and any such Broker-Dealer
or Broker-Dealers and shall be based upon a selling concession that would be
applicable to an underwriting of fixed or variable rate preferred shares with a
similar final maturity or variable rate dividend period, respectively, at the
commencement of the Dividend Period with respect to such Auction.
(b) The Fund shall not designate any Person to act as a Broker-Dealer,
or permit an Existing Holder or a Potential Beneficial Owner to participate in
Auctions through any Person other than a Broker-Dealer, without the prior
written approval of the Auction Agent, which approval shall not be withheld
unreasonably. The Fund may designate an Affiliate or UBS Warburg LLC to act as a
Broker-Dealer.
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(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Fund.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from time to
time shall enter into such Broker-Dealer Agreements as the Fund shall request.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
2.6 Ownership of Preferred Shares and Submission of Bids by the Fund and
Its Affiliates.
Neither the Fund nor any Affiliate of the Fund may submit an Order in any
Auction, except that an Affiliate of the Fund that is a Broker-Dealer may submit
an Order. The Fund shall notify the Auction Agent if the Fund or, to the best of
the Fund's knowledge, any Affiliate of the Fund becomes a Beneficial Owner of
any Preferred Shares. Pursuant to the Amended and Restated Bylaws of the Fund,
the Fund and the Fund's Affiliates shall be prohibited from reissuing and its
Affiliates (other than an Underwriter) will be prohibited from transferring
(other than to the Fund or pursuant to an Auction) any Preferred Shares they may
acquire. The restrictions in this Section 2.6 shall in no way limit the
activities of the Auction Agent. The Auction Agent shall have no duty or
liability with respect to enforcement of this Section 2.6.
2.7 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Fund and its agents, independent
public accountants and counsel access at reasonable times during normal business
hours to review and make extracts or copies (at the Fund's sole cost and
expense) of all books, records, documents and other information concerning the
conduct and results of Auctions, provided that any such agent, accountant or
counsel shall furnish the Auction Agent with a letter from the Fund requesting
that the Auction Agent afford such person access. The Auction Agent shall
maintain records relating to any Auction for a period of at least six years
after such Auction, and such records, in reasonable detail, shall accurately and
fairly reflect the actions taken by the Auction Agent hereunder. The Fund agrees
to keep confidential any information regarding the customers of any
Broker-Dealer received from the Auction Agent in connection with this Agreement
or any Auction, and shall not disclose such information or permit the disclosure
of such information without the prior written consent of the applicable
Broker-Dealer to anyone except such agent, accountant or counsel engaged to
audit or review the results of Auctions as permitted by this Section 2.7. The
Fund reserves the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to the Fund. Any such agent, accountant or counsel, before having
access to such information, shall agree to keep such information confidential
and not to disclose such information or permit disclosure of such information
without the prior written consent of the applicable Broker-Dealer, provided that
such agent, accountant or counsel may reserve the right to disclose any such
information if it is advised by its counsel that its failure to do so would (i)
be unlawful or (ii) expose it to liability, unless the Broker-Dealer shall have
offered indemnification satisfactory to such agent, accountant or counsel.
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2.8 Auction Procedures.
The provisions contained in Section 11.10 of the Amended and Restated
Bylaws concerning Auction Procedures will be followed by the Fund and, to the
extent applicable, the Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
III. THE AUCTION AGENT AS PAYING AGENT.
3.1 The Paying Agent.
The Board of Trustees of the Fund has adopted resolutions appointing
Deutsche Bank Trust Company Americas as Auction Agent and dividend paying agent
(in such capacity, the "Paying Agent"). The Paying Agent hereby accepts such
appointment and agrees to act in accordance with its standard procedures and the
provisions of the Amended and Restated Bylaws which are specified herein with
respect to the Preferred Shares and as set forth in this Section 3.
3.2 The Fund's Notices to the Paying Agent.
Whenever any Preferred Shares are to be redeemed, the Fund shall mail a
Notice of Redemption by first-class mail, postage prepaid, to each Holder of
Preferred Shares being redeemed and to the Paying Agent pursuant to the Amended
and Restated Bylaws.
3.3 The Fund to Provide Funds for Dividends and Redemptions.
(a) Not later than 12:00 noon on each Dividend Payment Date, the Fund
shall deposit with the Paying Agent an aggregate amount of Federal Funds or
similar same-day funds equal to the declared dividends to be paid to Holders on
such Dividend Payment Date and shall give the Paying Agent irrevocable
instructions to apply such funds to the payment of such dividends on such
Dividend Payment Date.
(b) If the Fund shall give a Notice of Redemption, then by noon of the
date fixed for redemption, the Fund shall deposit in trust with the Paying Agent
an aggregate amount of Federal Funds or similar same-day funds sufficient to
redeem such Preferred Shares called for redemption and shall give the Paying
Agent irrevocable instructions and authority to pay the redemption price to the
Holders of Preferred Shares called for redemption upon surrender of the
certificate or certificates therefor.
3.4 Disbursing Dividends and Redemption Price.
After receipt of the Federal Funds or similar same-day funds and
instructions from the Fund described in Section 3.3 above, the Paying Agent
shall pay to the Holders (or former Holders) entitled thereto (i) on each
corresponding Dividend Payment Date, dividends on the Preferred Shares, and (ii)
on any date fixed for redemption, the redemption price of any Preferred Shares
called for redemption. The amount of dividends for any Dividend Period to be
paid by the Paying Agent to Holders will be determined by the Fund as set forth
in Section 11.2 of the
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Amended and Restated Bylaws. The redemption price to be paid by the Paying Agent
to the Holders of any Preferred Shares called for redemption will be determined
as set forth in Section 11.4 of the Amended and Restated Bylaws.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1 Original Issue of Share Certificates.
On the Date of Original Issue for any Preferred Share, one certificate for
each series of Preferred Shares shall be issued by the Fund and registered in
the name of Cede & Co., as nominee of the Securities Depository, and
countersigned by the Paying Agent.
4.2 Registration of Transfer or Exchange of Shares.
Except as provided in this Section 4.2, each series of Preferred Shares
shall be registered solely in the name of the Securities Depository or its
nominee. If there is no Securities Depository, at the Fund's option and upon its
receipt of such documents as it deems appropriate, any Preferred Shares may be
registered in the Stock Register in the name of the Beneficial Owner thereof,
and such Beneficial Owner thereupon will be entitled to receive certificates
therefor and required to deliver certificates thereof or upon transfer or
exchange thereof. If the certificate or certificates for Preferred Shares are
not held by the Securities Depository or its nominee, payment will be made in
same-day funds to the Auction Agent against delivery of such certificates.
4.3 Removal of Legend.
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing Preferred Shares shall be accompanied by an
opinion of counsel stating that such legend may be removed and such shares may
be transferred free of the restriction described in such legend, said opinion to
be delivered under cover of a letter from a Fund Officer authorizing the Paying
Agent to remove the legend on the basis of said opinion.
4.4 Lost, Stolen or Destroyed Share Certificates.
The Paying Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed, upon the
fulfillment of such requirements as shall be deemed appropriate by the Fund and
by the Paying Agent, subject at all times to provisions of law, the Amended and
Restated Bylaws governing such matters and resolutions adopted by the Fund with
respect to lost, stolen or destroyed securities. The Paying Agent may issue new
certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Fund to the Paying Agent to issue a replacement
or new certificate pursuant to this Section 4.4 shall be deemed to be a
representation and warranty by the Fund to the Paying Agent that such issuance
will comply with provisions of applicable law and the Amended and Restated
Bylaws and resolutions of the Fund.
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4.5 Disposition of Canceled Certificates; Record Retention.
The Paying Agent shall retain share certificates which have been canceled
in transfer or in exchange and accompanying documentation in accordance with
applicable rules and regulations of the Securities and Exchange Commission (the
"Commission") for at least six calendar years from the date of such
cancellation. The Paying Agent, upon written request by the Fund, shall afford
to the Fund, its agents and counsel access at reasonable times during normal
business hours to review and make extracts or copies (at the Fund's sole cost
and expense) of such certificates and accompanying documentation. Upon the
expiration of this six-year period, the Paying Agent shall deliver to the Fund
the canceled certificates and accompanying documentation. The Paying Agent also
shall undertake to furnish to the Commission, upon demand, either at its
principal office or at any regional office, complete, correct and current hard
copies of any and all such records. Thereafter, such records shall not be
destroyed by the Fund without the approval of the Paying Agent, which approval
shall not be withheld unreasonably, but will be safely stored for possible
future reference.
4.6 Share Register.
The Paying Agent shall maintain the share register, which shall contain a
list of the Holders, the number of shares held by each Holder and the address of
each Holder. The Paying Agent shall record in the share register any change of
address of a Holder upon notice by such Holder. In case of any written request
or demand for the inspection of the share register or any other books of the
Fund in the possession of the Paying Agent, the Paying Agent will notify the
Fund and secure instructions as to permitting or refusing such inspection. The
Paying Agent reserves the right, however, to exhibit the share register or other
records to any person in case it is advised by its counsel that its failure to
do so would be unlawful.
4.7 Return of Funds.
Any funds deposited with the Paying Agent by the Fund for any reason under
this Agreement, including for the payment of dividends or the redemption of
Preferred Shares, that remain with the Paying Agent after 90 days shall be
repaid to the Fund upon written request by the Fund.
V. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(i) the Fund has been duly organized and is validly existing as
an unincorporated voluntary association under, and by virtue of, the laws of The
Commonwealth of Massachusetts and has full power to execute and deliver this
Agreement and to authorize, create and issue the Preferred Shares;
(ii) the Fund is registered with the Commission under the 1940
Act as a closed-end, diversified, management investment company;
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(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and constitutes the legal, valid and binding
obligation of the Fund, enforceable against the Fund in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equitable principles;
(iv) the form of the certificates evidencing the Preferred
Shares comply with all applicable laws of The Commonwealth of Massachusetts;
(v) the Preferred Shares have been duly and validly authorized
by the Fund and, upon completion of the initial sale of the Preferred Shares and
receipt of payment therefor, will be validly issued by the Fund, fully paid and
nonassessable;
(vi) at the time of the offering of the Preferred Shares, the
shares offered will be registered under the Securities Act and no further action
by or before any governmental body or authority of the United States or of any
state thereof is required in connection with the execution and delivery of this
Agreement or will be required in connection with the issuance of the Preferred
Shares, except such action as required by applicable state securities laws;
(vii) the execution and delivery of this Agreement and the
issuance and delivery of the Preferred Shares do not and will not conflict with,
violate or result in a breach of the terms, conditions or provisions of, or
constitute a default under, the Agreement and Declaration of Trust, any order or
decree of any court or public authority having jurisdiction over the Fund or any
mortgage, indenture, contract, agreement or undertaking to which the Fund is a
party or by which it is bound the effect of which conflict, violation, default
or breach would be material to the Fund; and
(viii) no taxes are payable upon or in respect of the execution
of this Agreement or will be payable upon or in respect of the issuance of the
Preferred Shares.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Fund that:
(i) The Auction Agent is duly organized and is validly
existing as a banking corporation in good standing under the laws of the State
of New York and has the corporate power to enter into and perform its
obligations under this Agreement; and
(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the legal, valid and
binding obligation of the Auction Agent, enforceable against the Auction Agent
in accordance with its terms, subject to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general equitable principles.
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VI. THE AUCTION AGENT.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Fund hereunder
and owes no fiduciary duties to any Person except as provided by this Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are set forth specifically in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered or omitted by it, or
for any error of judgment made by it in the performance of its duties under this
Agreement.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may rely upon, and shall be protected in acting
or refraining from acting upon, any communication authorized by this Agreement
and any written instruction, notice, request, direction, consent, report,
certificate, share certificate or other instrument, paper or document reasonably
believed by it to be genuine. The Auction Agent shall not be liable for acting
upon any telephone communication authorized by this Agreement which the Auction
Agent reasonably believes in good faith to have been given by the Fund or by a
Broker-Dealer. The Auction Agent may record telephone communications with the
Fund or with the Broker-Dealers or with both.
(b) The Auction Agent may consult with counsel of its choice, and the
written advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reasonable reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk
its own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
6.3 Compensation, Expenses and Indemnification.
(a) The Fund shall pay to the Auction Agent from time to time
reasonable compensation for all services rendered by it under this Agreement and
under the Broker-Dealer Agreements as shall be set forth in a separate writing
signed by the Fund and the Auction Agent, subject to adjustments if the
Preferred Shares no longer are held of record by the Securities Depository or
its nominee or if there shall be such other change as shall increase or decrease
materially the Auction Agent's obligations hereunder or under the Broker-Dealer
Agreements.
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(b) The Fund shall reimburse the Auction Agent upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Auction Agent in accordance with any provision of this Agreement and of the
Broker-Dealer Agreements (including the reasonable compensation, expenses and
disbursements of its agents and counsel), except any expense, disbursement or
advance attributable to its negligence or bad faith.
(c) The Fund shall indemnify the Auction Agent for, and hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Auction Agent arising out of or in connection with
its agency under this Agreement and under the Broker-Dealer Agreements,
including the costs and expenses of defending itself against any claim of
liability in connection with its exercise or performance of any of its duties
hereunder and thereunder, except such as may result from its negligence or bad
faith.
VII. MISCELLANEOUS.
7.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Fund may terminate this
Agreement at any time by so notifying the Auction Agent, provided that, if any
Preferred Shares remain outstanding, the Fund shall have entered into an
agreement with a successor auction agent. The Auction Agent may terminate this
Agreement upon prior notice to the Fund on the date specified in such notice,
which date shall be no earlier than 60 days after delivery of such notice. If
the Auction Agent terminates this Agreement while any Preferred Shares remain
outstanding, the Fund shall use its best efforts to enter into an agreement with
a successor auction agent containing substantially the same terms and conditions
as this Agreement.
(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Fund and the Auction Agent under this
Agreement shall cease upon termination of this Agreement. The Fund's
representations, warranties, covenants and obligations to the Auction Agent
under Sections 5.1 and 6.3 hereof shall survive the termination hereof. The
Auction Agent's representations, warranties, covenants and obligations under
Section 6.1 shall survive the termination hereof. Upon termination of this
Agreement, the Auction Agent shall (i) resign as Auction Agent under the
Broker-Dealer Agreements, (ii) at the Fund's request, deliver promptly to the
Fund copies of all books and records maintained by it in connection with its
duties hereunder, and (iii) at the request of the Fund, transfer promptly to the
Fund or to any successor auction agent any funds deposited by the Fund with the
Auction Agent (whether in its capacity as Auction Agent or as Paying Agent)
pursuant to this Agreement which have not been distributed previously by the
Auction Agent in accordance with this Agreement.
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7.2 Communications.
Except for (i) communications authorized to be made by telephone pursuant
to this Agreement or the Auction Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in writing),
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to such
party at its address or telecopier number set forth below:
If to the Fund, PIMCO New York Municipal Income Fund III
addressed to: c/o PIMCO Advisory Services
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
If to the Auction Agent, Deutsche Bank Trust Company Americas
addressed to: c/o Deutsche Bank Services New Jersey, Inc.
000 Xxxxx Xxx
0/xx/ Xxxxx Xxxxxx Xxxx, XX 00000
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
or such other address or telecopier number as such party hereafter may specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Fund by a Fund Officer and on
behalf of the Auction Agent by an Authorized Officer.
7.3 Entire Agreement.
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof, except for agreements
relating to the compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other than
the Fund, the Auction Agent and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged.
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(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
7.6 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by, the respective successors and permitted assigns of each of the
Fund and the Auction Agent. This Agreement may not be assigned by either party
hereto absent the prior written consent of the other party, which consent shall
not be withheld unreasonably.
7.7 Severability.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8 Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be an original and all of which shall constitute but one and the same
instrument.
7.9 Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to agreements made and to be performed
in said state.
7.10 Limitation of Liability.
The Fund's Agreement and Declaration of Trust is on file with the Secretary
of State of The Commonwealth of Massachusetts. This Agreement is executed on
behalf of the Fund by the Fund's officers as officers and not individually, and
the obligations imposed upon the Fund by this Agreement are not binding upon any
of the Fund's Trustees, officers or shareholders individually but are binding
only upon the assets and property of the Fund.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
PIMCO NEW YORK MUNICIPAL INCOME
FUND III
By:____________________________
Name: Xxxxxxxx Xxxxxxxxx
Title: Treasurer and Principal
Financial and Accounting
Officer
DEUTSCHE BANK TRUST
COMPANY AMERICAS
By:____________________________
Name:
Title: Assistant Vice President
EXHIBIT A
FORM OF BROKER-DEALER AGREEMENT
