NICHOLAS-APPLEGATE EQUITY & CONVERTIBLE INCOME FUND Common Shares of Beneficial Interest ($0.00001 par value) UNDERWRITING AGREEMENT

Exhibit h.1

XXXXXXXX-XXXXXXXXX EQUITY & CONVERTIBLE INCOME FUND

Common Shares of Beneficial Interest

($0.00001 par value)

UNDERWRITING AGREEMENT

New York, New York

February , 2007

Citigroup Global Markets Inc.

X.X. Xxxxxxx & Sons, Inc.

As Representatives of the several Underwriters

listed on Schedule I hereto

c/o Citigroup Global Markets Inc.

000 Xxxxxxxxx Xxxxxx

Xxx Xxxx, Xxx Xxxx 00000

Ladies and Gentlemen:

The undersigned, Xxxxxxxx-Xxxxxxxxx Equity & Convertible Income Fund, a Massachusetts business trust (the “Fund”) and Allianz Global Investors Fund Management LLC, a Delaware limited liability company (the “Investment Adviser”), address you as underwriters and as the representatives (the “Representatives”) of each of the several underwriters named in Schedule I hereto (the “Underwriters”). The Fund proposes to sell to the Underwriters shares of its common shares of beneficial interest, par value $0.00001 per share (the “Common Shares”) (said shares to be issued and sold by the Fund being hereinafter called the “Underwritten Securities”). The Fund also proposes to grant to the Underwriters an option to purchase up to additional Common Shares to cover over-allotments (the “Option Securities”; the Option Securities, together with the Underwritten Securities, being hereinafter called the “Securities”). Unless otherwise stated, the term “you” as used herein means Citigroup Global Markets Inc. individually on its own behalf and on behalf of the other Representatives. Certain terms used herein are defined in Section 21 hereof.

The Fund has entered into an Investment Management Agreement with the Investment Adviser dated as of February , 2007, a Custodian Agreement with Xxxxx Brothers Xxxxxxxx & Co. dated as of February , 2007, an Accounting Agency Agreement with Xxxxx Brothers Xxxxxxxx & Co. dated as of February , 2007, and a Transfer Agency Services Agreement with PFPC Inc. dated as of February , 2007, and such agreements are herein referred to as the “Management Agreement,” the “Custodian Agreement,” the “Accounting Agreement,” and the “Transfer Agency Agreement,” respectively. The Investment Adviser has

entered into a Portfolio Management Agreement with Xxxxxxxx-Xxxxxxxxx Capital Management LLC, a Delaware limited liability company (the “Sub-Adviser” and together with the Investment Adviser, the “Advisers,” and each of them an “Adviser”) dated as of February , 2007, a Structuring Fee Agreement with Citigroup Global Markets Inc. and the Sub-Adviser dated as of February , 2007, and an Additional Compensation Agreement with X.X. Xxxxxxx & Sons, Inc. dated as of February , 2007, and such agreements are herein referred to as the “Portfolio Management Agreement,” the “Structuring Fee Agreement” and the “Additional Compensation Agreement.” Collectively, the Management Agreement, the Custodian Agreement, the Accounting Agreement and the Transfer Agency Agreement are herein referred to as the “Fund Agreements.” In addition, the Fund has adopted a dividend reinvestment plan (the “Dividend Reinvestment Plan”) pursuant to which holders of Common Shares shall have their dividends automatically reinvested in additional Common Shares of the Fund unless they elect to receive such dividends in cash.

1. Representations and Warranties of the Fund and the Investment Adviser. The Fund and the Investment Adviser, jointly and severally, represent and warrant to, and agree with, each Underwriter as set forth below in this Section 1.

(a) The Fund has prepared and filed with the Commission a registration statement (file numbers 333-139346 and 811-21989) on Form N-2, including a related preliminary prospectus (including the statement of additional information incorporated by reference therein), for registration under the Act and the 1940 Act of the offering and sale of the Securities. Such Registration Statement, including any amendments thereto filed prior to the Execution Time, has become effective. The Fund may have filed one or more amendments thereto, including a related preliminary prospectus (including the statement of additional information incorporated by reference therein), each of which has previously been furnished to you. The Fund will file with the Commission a final prospectus (including the statement of additional information incorporated by reference therein) in accordance with Rule 497. As filed, such final prospectus (including the statement of additional information incorporated by reference therein) shall contain all information required by the Act and the 1940 Act and the Rules and Regulations and, except to the extent the Representatives shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Fund has advised you, prior to the Execution Time, will be included or made therein.

(b) Each Preliminary Prospectus complied when filed with the Commission in all material respects with the provisions of the Act, the 1940 Act and the Rules and Regulations, and the Preliminary Prospectus and the Rule 430A Information, when taken together as a whole, as of the Execution Time, do not 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; provided, however, that the Fund makes no representations or warranties as to the information contained in or omitted from the Preliminary Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the

Fund or the Investment Adviser by or on behalf of any Underwriter through the Representatives specifically for inclusion therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(b) hereof.

(c) On the Effective Date, the Registration Statement did, and when the Prospectus is first filed in accordance with Rule 497 and on the Closing Date (as defined in Section 4 hereof) and on any date on which Option Securities are purchased, if such date is not the Closing Date (a “settlement date”), the Prospectus (and any supplements thereto) will, and the 1940 Act Notification when originally filed with the Commission and any amendment or supplement thereto when filed with the Commission did or will, comply in all material respects with the applicable requirements of the Act, the 1940 Act and the Rules and Regulations; on the Effective Date and at the Execution Time, the Registration Statement did not and will 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; and on the date of any filing pursuant to Rule 497 and on the Closing Date and any settlement date, the Prospectus (together with any supplement thereto) will not include 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; provided, however, that the Fund makes no representations or warranties as to the information contained in or omitted from the Registration Statement, or the Prospectus (or any supplement thereto), in reliance upon and in conformity with information furnished in writing to the Fund or the Investment Adviser by or on behalf of any Underwriter through the Representatives specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto), it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 9(b) hereof. The Commission has not issued any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus.

(d) The Fund has been duly organized and is validly existing in good standing as an unincorporated voluntary association (commonly known as a business trust) under and by virtue of the laws of The Commonwealth of Massachusetts, with full business power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Preliminary Prospectus and the Prospectus and is duly qualified to do business and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to so qualify does not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund. The Fund has no subsidiaries.

(e) The Fund’s authorized equity capitalization is as set forth in the Preliminary Prospectus and the Prospectus; the capital stock of the Fund conforms in all material respects to the description thereof contained in the Preliminary Prospectus and the Prospectus; all outstanding Common Shares have been duly and validly authorized and issued and are fully paid and nonassessable; the Securities have been duly and validly authorized, and, when issued and delivered to and paid for by the Underwriters pursuant to this Agreement, will be fully paid and nonassessable; the Securities are duly listed, and

admitted and authorized for trading, subject to official notice of issuance and evidence of satisfactory distribution, on the NYSE; the certificates for the Securities are in valid and sufficient form; the holders of outstanding Common Shares are not entitled to preemptive or other rights to subscribe for the Securities; and, except as set forth in the Preliminary Prospectus and the Prospectus, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any securities for, shares of capital stock of or ownership interests in the Fund are outstanding.

(f) The Fund’s registration statement on Form 8-A under the Exchange Act has become effective.

(g) The Fund, subject to the Registration Statement having been declared effective and the filing of the Prospectus under Rule 497, has taken all required action under the Act, the 1940 Act and the Rules and Regulations to make the public offering and consummate the sale of the Securities as contemplated by this Agreement.

(h) There are no agreements, contracts, indentures, leases, permits or other instruments that are required to be described in the Registration Statement, the Preliminary Prospectus or the Prospectus, or to be filed as an exhibit to the Registration Statement, which are not described or filed as required; the statements in the Registration Statement, the Preliminary Prospectus and the Prospectus under the headings “Management of the Fund – Regulatory and Litigation Matters,” “Description of Shares,” “Anti-Takeover and Other Provisions in the Declaration of Trust” and “Tax Matters,” insofar as such statements summarize legal matters, agreements, documents or proceedings discussed therein, are accurate and fair summaries of such legal maters, agreements, documents or proceedings.

(i) The execution and delivery of and the performance by the Fund of its obligations under this Agreement and the Fund Agreements have been duly and validly authorized by the Fund and this Agreement and the Fund Agreements have been duly executed and delivered by the Fund and constitute the valid and legally binding agreements of the Fund, enforceable against the Fund in accordance with their terms, except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of the Fund’s obligations hereunder and thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and by general equitable principles.

(j) The Fund is duly registered under the 1940 Act as a closed-end, diversified management investment company and the 1940 Act Notification has been duly filed with the Commission. The Fund has not received any notice from the Commission pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act Notification or the Registration Statement.

(k) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions

contemplated herein or in the Fund Agreements, except such as have been made or obtained under the Act, the 1940 Act and the Exchange Act, and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Preliminary Prospectus and the Prospectus, or for compliance with the rules and regulations of the NASD and the NYSE.

(l) Neither the issuance and sale of the Securities, the execution, delivery or performance of this Agreement or any of the Fund Agreements by the Fund, nor the consummation by the Fund of the transactions herein or therein contemplated nor the fulfillment of the terms hereof or thereof or the adoption of the Dividend Reinvestment Plan (i) conflicts or will conflict with or constitutes or will constitute a breach of the Declaration of Trust or By-Laws of the Fund, (ii) conflicts or will conflict with or constitutes or will constitute a material breach of or a material default under the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Fund is a party or bound or to which its property is subject or (iii) violates or will violate in any material respect any statute, law, rule, regulation, judgment, order or decree applicable to the Fund of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Fund or any of its properties.

(m) No holders of securities of the Fund have rights to the registration of such securities under the Registration Statement.

(n) The financial statements, together with related schedules and notes, included or incorporated by reference in the Preliminary Prospectus, the Prospectus and the Registration Statement present fairly in all material respects the financial condition, results of operations and cash flows of the Fund as of the dates and for the periods indicated and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein); and the other financial information and data included in the Registration Statement, the Preliminary Prospectus and the Prospectus are accurately derived from such financial statements and the books and records of the Fund.

(o) No action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Fund or its property is pending or, to the best knowledge of the Fund, threatened that (i) could reasonably be expected to have a material adverse effect on the performance of this Agreement or the consummation of any of the transactions herein contemplated or (ii) could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto).

(p) The Fund owns or leases all such properties as are necessary to the conduct of its operations as presently conducted.

(q) The Fund is not (i) in violation or default of any provision of its Declaration of Trust or By-Laws, (ii) in material breach or material default in the performance of the terms of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject or (iii) in material violation of any statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Fund or any of its properties.

(r) Since the date as of which information is given in the Preliminary Prospectus and Prospectus, except as otherwise stated therein, (i) there has been no material, adverse change in the condition (financial or other), prospects, earnings, business or properties of the Fund, whether or not arising in the ordinary course of business, (ii) there have been no transactions entered into by the Fund which are material to the Fund other than those in the ordinary course of its business as described in the Preliminary Prospectus and the Prospectus and (iii) there has been no dividend or distribution of any kind declared, paid or made by the Fund on any class of its Common Shares.

(s) To the knowledge of the Fund and the Investment Adviser, based on representations of such accountants, PricewaterhouseCoopers LLP, who have certified the financial statements of the Fund and delivered their report with respect to the audited financial statements included or incorporated by reference in the Registration Statement, the Preliminary Prospectus and the Prospectus, is an independent registered public accounting firm with respect to the Fund within the meaning of the Act, the 1940 Act and the Rules and Regulations.

(t) The Fund has not distributed and, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Securities, will not distribute any offering material in connection with the offering and sale of the Securities other than the Registration Statement, the Preliminary Prospectus, the Prospectus or other materials permitted by the Act, the 1940 Act or the Rules and Regulations.

(u) All advertising, sales literature or other promotional material (including “prospectus wrappers”, “broker kits”, “road show slides” and “road show scripts”), whether in printed or electronic form, authorized in writing by or prepared by the Fund or the Advisers for use in connection with the offering and sale of the Securities (collectively, “sales material”) complied and comply in all material respects with the applicable requirements of the Act, the 1940 Act, the Rules and Regulations and the rules and interpretations of the NASD and if required to be filed with the NASD under the NASD’s conduct rules were provided to Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, for filing. No sales material contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(v) The Fund’s trustees and officers errors and omissions insurance policy and its fidelity bond required by Rule 17g-1 of the 1940 Act Rules and Regulations are in full

force and effect; the Fund is in compliance with the terms of such policy and fidelity bond in all material respects; and there are no claims by the Fund under any such policy or fidelity bond as to which any insurance company is denying liability or defending under a reservation of rights clause; the Fund has not been refused any insurance coverage sought or applied for; and the Fund has no reason to believe that it will not be able to renew its existing insurance coverage and fidelity bond as and when such coverage and fidelity bond expires or to obtain similar coverage and fidelity bond from similar insurers as may be necessary to continue its business at a cost that would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto).

(w) The Fund possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business, and the Fund has not received any notice of proceedings relating to the revocation or modification of any such license, certificate, permit or authorization which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business, in each case except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto).

(x) The Fund maintains and 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 and with the investment objective, policies and restrictions of the Fund and the applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and the Internal Revenue Code of 1986, as amended (the “Code”); (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles, to calculate net asset value, to maintain accountability for assets and to maintain material compliance with the books and records requirements under the 1940 Act and the 1940 Act Rules and Regulations; (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 at reasonable intervals and appropriate action is taken with respect to any differences. The Fund is not aware of any material weakness in its internal controls over financial reporting.

(y) The Fund maintains “disclosure controls and procedures” (as such term is defined in Rule 30a-3 under the 0000 Xxx) that satisfy the requirements of said Rule 30a-3.

(z) The Fund has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the

Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Fund to facilitate the sale or resale of the Securities, and the Fund is not aware of any such action taken or to be taken by any affiliates of the Fund.

(aa) This Agreement and each of the Fund Agreements complies in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations.

(bb) Except as disclosed in the Preliminary Prospectus and the Prospectus, no trustee of the Fund is an “interested person” (as defined in the 0000 Xxx) of the Fund or an “affiliated person” (as defined in the 0000 Xxx) of any Underwriter listed in Schedule I hereto.

(cc) The Fund intends to direct the investment of the proceeds of the offering of the Securities in such a manner as to comply with the requirements of Subchapter M of the Code.

(dd) The conduct by the Fund of its business (as described in the Preliminary Prospectus and the Prospectus) does not require it to be the owner, possessor or licensee of any patents, patent licenses, trademarks, service marks or trade names which it does not own, possess or license, except where the failure to so own, possess or license would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business.

(ee) The Fund has filed all foreign, federal, state and local tax returns required to be filed or has properly requested extensions thereof (except in any case in which the failure so to file would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto)) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto); and the Fund has been and is currently in compliance with the requirements of Subchapter M of the Code to qualify as a regulated investment company under the Code.

(ff) There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the Fund or sale by the Fund of the Securities, except where the failure so to make any such payment would not have a material adverse effect on (i) the condition (financial or

otherwise), prospects, earnings, business or properties of the Fund, whether or not arising from transactions in the ordinary course of business, or (ii) the consummation of the transactions contemplated by this Agreement and the issuance by the Fund of the Securities.

(gg) Except as disclosed in the Registration Statement, the Preliminary Prospectus and the Prospectus, the Fund (i) does not have any material lending or other relationship with any bank or lending affiliate of Citigroup Global Markets Holdings Inc. and (ii) does not intend to use any of the proceeds from the sale of the Securities hereunder to repay any outstanding debt owed to any affiliate of Citigroup Global Markets Holdings Inc.

(hh) There is and has been no failure on the part of the Fund and any of the Fund’s trustees or officers, in their capacities as such, to comply in all material respects with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection therewith (the “Xxxxxxxx-Xxxxx Act”), including Sections 302 and 906 related to certifications.

(ii) The Fund has adopted and implemented written policies and procedures reasonably designed to prevent violation of the Federal Securities Laws (as that term is defined in Rule 38a-1 under the 0000 Xxx) by the Fund, including policies and procedures that provide oversight of compliance by each investment adviser, administrator and transfer agent of the Fund.

Any certificate signed by any officer of the Fund and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by the Fund, as to matters covered therein, to each Underwriter.

2. Representations and Warranties of the Investment Adviser. The Investment Adviser represents and warrants to, and agrees with, each Underwriter as follows:

(a) Each of the Advisers has been duly formed and is validly existing in good standing as a limited liability company under the laws of the jurisdiction of its organization, with full company power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the Preliminary Prospectus and the Prospectus, and is duly qualified to do business and is in good standing under the laws of each jurisdiction which requires such qualification, except where the failure to so qualify would not have a material adverse effect on such Adviser’s ability to provide services on behalf of the Fund pursuant to the Management Agreement or the Portfolio Management Agreement, as applicable.

(b) Each of the Advisers is duly registered as an investment adviser under the Advisers Act and each Adviser is not prohibited by the Advisers Act, the 1940 Act, the Advisers Act Rules and Regulations or the 1940 Act Rules and Regulations from acting under the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement, as applicable, as contemplated by the Preliminary Prospectus and the Prospectus.

(c) The Investment Adviser has full power and authority to enter into this Agreement, the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement and the Sub-Adviser has full power and authority to enter into the Portfolio Management Agreement and the Structuring Fee Agreement; the execution and delivery of, and the performance by the Investment Adviser of its obligations under, this Agreement, the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement have been duly and validly authorized by the Investment Adviser, and the execution and delivery of, and the performance by the Sub-Adviser of its obligations under the Portfolio Management Agreement and the Structuring Fee Agreement have been duly and validly authorized by the Sub-Adviser; and this Agreement, the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement have been duly executed and delivered by the Investment Adviser and the Portfolio Management Agreement and the Structuring Fee Agreement have been duly executed and delivered by the Sub-Adviser, and each such agreement to which an Adviser is party constitutes the valid and legally binding agreement of such Adviser, enforceable against such Adviser in accordance with its terms, except as rights to indemnity and contribution hereunder may be limited by federal or state securities laws or principles of public policy and subject to the qualification that the enforceability of such Adviser’s obligations hereunder and thereunder may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws relating to or affecting creditors’ rights generally and by general equitable principles.

(d) Each of the Advisers has the financial resources available to it necessary for the performance of its services and obligations as contemplated in the Preliminary Prospectus and the Prospectus and under this Agreement, the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement, as applicable.

(e) The description of each Adviser and its business, and the statements attributable to such Adviser, in the Registration Statement, the Preliminary Prospectus and the Prospectus complied and comply in all material respects with the provisions of the Act, the 1940 Act, the Advisers Act, the Rules and Regulations and the Advisers Act Rules and Regulations and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

(f) With respect to each Adviser, no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving such Adviser or its property is pending or, to the best knowledge of such Adviser, threatened that (i) is required to be described in the Preliminary Prospectus and the Prospectus that is not so described as required, (ii) could reasonably be expected to have a material adverse effect on the ability of such Adviser to fulfill its obligations hereunder or under the

Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement, as applicable, or (iii) could reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of such Adviser, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto); and there are no agreements, contracts, indentures, leases, permits or other instruments relating to such Adviser that are required to be described in the Registration Statement, the Preliminary Prospectus or the Prospectus or to be filed as an exhibit to the Registration Statement that are not described or filed as required by the Act, the 1940 Act or the Rules and Regulations.

(g) With respect to each Adviser, since the date as of which information is given in the Preliminary Prospectus and the Prospectus, except as otherwise stated therein, (i) there has been no material adverse change in the condition (financial or other), prospects, earnings, business or properties of such Adviser, whether or not arising from the ordinary course of business and (ii) there have been no transactions entered into by such Adviser other than those in the ordinary course of its business as described in the Preliminary Prospectus and the Prospectus, except where such transactions could not reasonably be expected to have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of such Adviser.

(h) Each Adviser possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct its business in the manner described in the Preliminary Prospectus and the Prospectus, and has not received any notice of proceedings relating to the revocation or modification of any such license, certificate, permit or authorization which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of such Adviser, whether or not arising from transactions in the ordinary course of business, in each case except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto).

(i) This Agreement, the Management Agreement and the Portfolio Management Agreement comply in all material respects with all applicable provisions of the Act, the 1940 Act, the Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations.

(j) No consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein or in the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement, except such as have been made or obtained under the Act, the 1940 Act and the Exchange Act, and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Underwriters in the manner contemplated herein and in the Preliminary Prospectus and the Prospectus, or for compliance with the rules and regulations of the NASD and the NYSE.

(k) With respect to each Adviser, neither the execution, delivery or performance of this Agreement or the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement or the Additional Compensation Agreement to which such Adviser is a party, nor the consummation of the transactions herein or therein contemplated, nor the fulfillment of the terms hereof or thereof, conflict with, result in a breach or violation of, or imposition of any lien, charge or encumbrance upon any property or assets of such Adviser pursuant to (i) the organizational documents of such Adviser, (ii) the terms of any material indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which such Adviser is a party or bound or to which its property is subject, or (iii) any statute, law, rule, regulation, judgment, order or decree applicable to such Adviser of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over such Adviser or any of its properties.

(l) Each Adviser has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Fund to facilitate the sale or resale of the Securities, and each Adviser is not aware of any such action taken or to be taken by any affiliates of such Adviser.

(m) In the event that the Fund or either Adviser makes available any promotional materials related to the Securities or the transactions contemplated hereby intended for use only by registered broker-dealers and registered representatives thereof by means of an Internet web site or similar electronic means, such Adviser or its affiliates will install and maintain pre-qualification and password-protection or similar procedures which are reasonably designed to effectively prohibit access to such promotional materials by persons other than registered broker-dealers and registered representatives thereof.

Any certificate signed by any officer of an Adviser and delivered to the Representatives or counsel for the Underwriters in connection with the offering of the Securities shall be deemed a representation and warranty by such Adviser, as to matters covered therein, to each Underwriter.

3. Purchase and Sale. (a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Fund agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Fund, at a purchase price of $23.875 per share, the amount of the Underwritten Securities set forth opposite such Underwriter’s name in Schedule I hereto.

(b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Fund hereby grants an option to the several Underwriters to purchase, severally and not jointly, up to Option Securities at the same purchase price per share as the Underwriters shall pay for the Underwritten Securities. Said option may be exercised only to cover over-allotments in the sale of the Underwritten Securities by the Underwriters. Said option may be exercised in whole or in part at any time on or before the 45th day after the date of the Prospectus upon written or telegraphic notice by the Representatives to the Fund setting forth the number of

shares of the Option Securities as to which the several Underwriters are exercising the option and the settlement date. The number of Option Securities to be purchased by each Underwriter shall be the same percentage of the total number of shares of the Option Securities to be purchased by the several Underwriters as such Underwriter is purchasing of the Underwritten Securities, subject to such adjustments as you in your absolute discretion shall make to eliminate any fractional shares.

4. Delivery and Payment. Delivery of and payment for the Underwritten Securities and the Option Securities (if the option provided for in Section 3(b) hereof shall have been exercised on or before the third Business Day prior to the Closing Date) shall be made at 10:00 AM, New York City time, on February 27, 2007 or at such time on such later date not more than three Business Days after the foregoing date as the Representatives shall designate, which date and time may be postponed by agreement between the Representatives and the Fund or as provided in Section 10 hereof (such date and time of delivery and payment for the Securities being herein called the “Closing Date”). Delivery of the Securities shall be made to the Representatives for the respective accounts of the several Underwriters against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Fund by wire transfer payable in same-day funds to an account specified by the Fund. Delivery of the Underwritten Securities and the Option Securities shall be made through the facilities of The Depository Trust Company unless the Representatives shall otherwise instruct.

If the option provided for in Section 3(b) hereof is exercised after the third Business Day prior to the Closing Date, the Fund will deliver the Option Securities (at the expense of the Fund) to the Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the Representatives (which shall be within three Business Days after exercise of said option) for the respective accounts of the several Underwriters, against payment by the several Underwriters through the Representatives of the purchase price thereof to or upon the order of the Fund by wire transfer payable in same-day funds to an account specified by the Fund. If settlement for the Option Securities occurs after the Closing Date, the Fund will deliver to the Representatives on the settlement date for the Option Securities, and the obligation of the Underwriters to purchase the Option Securities shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 7 hereof.

5. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Securities for sale to the public as set forth in the Prospectus.

6. Agreements of the Fund and the Investment Adviser. The Fund and the Investment Adviser, jointly and severally, agree with the several Underwriters that:

(a) Prior to the termination of the offering of the Securities, the Fund will not file any amendment of the Registration Statement or supplement to the Prospectus or any Rule 462(b) Registration Statement unless the Fund has furnished you a copy for your review prior to filing and will not file any such proposed amendment or supplement to which you reasonably object. The Fund will cause the Prospectus, properly completed, and any supplement thereto to be filed in a form approved by the Representatives with

the Commission pursuant to the applicable paragraph of Rule 497 within the time period prescribed and will provide evidence satisfactory to the Representatives of such timely filing. The Fund will promptly advise the Representatives (i) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 497 or when any Rule 462(b) Registration Statement shall have been filed with the Commission, (ii) when, prior to termination of the offering of the Securities, any amendment to the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or of any notice objecting to its use or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Fund of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Fund will use its best efforts to prevent the issuance of any such stop order or the occurrence of any such suspension or objection to the use of the Registration Statement and, upon such issuance, occurrence or notice of objection, to obtain as soon as possible the withdrawal of such stop order or relief from such occurrence or objection, including, if necessary, by filing an amendment to the Registration Statement or a new registration statement and using its best efforts to have such amendment or new registration statement declared effective as soon as practicable.

(b) If, at any time when a prospectus relating to the Securities is required to be filed or delivered under the Act, any event occurs as a result of which, in the judgment of the Fund or the reasonable opinion of counsel to the Fund or counsel to the Underwriters, the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made at such time not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act, the 1940 Act and the Rules and Regulations, the Fund promptly will (i) notify the Representatives of any such event; (ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 6, an amendment or supplement which will correct such statement or omission or effect such compliance; and (iii) supply any supplemented Prospectus to you in such quantities as you may reasonably request.

(c) As soon as practicable, the Fund will make generally available to its security holders and to the Representatives an earnings statement or statements of the Fund which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act.

(d) The Fund will furnish to the Representatives and counsel for the Underwriters at their request signed copies of the Registration Statement (including exhibits thereto) and to each other Underwriter at its request a copy of the Registration Statement (without exhibits thereto) and, so long as delivery of a prospectus by an Underwriter or dealer may be required by the Act, as many copies of each Preliminary Prospectus and the Prospectus and any supplement thereto as the Representatives may reasonably request.

(e) The Fund will cooperate with you and with counsel to the Underwriters in connection with, if necessary, the qualification of the Securities for sale under the laws of such jurisdictions as the Representatives may designate and will maintain such qualifications in effect so long as required for the distribution of the Securities; provided that in no event shall the Fund be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Securities, in any jurisdiction where it is not now so subject.

(f) The Fund will not, without the prior written consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Fund or any affiliate of the Fund or any person in privity with the Fund, directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act, any other Common Shares or any securities convertible into, or exercisable, or exchangeable for, Common Shares; or publicly announce an intention to effect any such transaction for a period of 180 days after the date of this Agreement, provided, however, that the Fund may issue and sell Common Shares pursuant to any dividend reinvestment plan of the Fund in effect at the Execution Time.

(g) The Fund will comply in all material respects with all applicable securities and other applicable laws, rules and regulations, including, without limitation, the Xxxxxxxx-Xxxxx Act, and will use its best efforts to cause the Fund’s trustees and officers, in their capacities as such, to comply in all material respects with such laws, rules and regulations, including, without limitation, the provisions of the Xxxxxxxx-Xxxxx Act.

(h) The Fund and the Advisers will not take, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Fund to facilitate the sale or resale of the Securities.

(i) The Fund agrees to pay the costs and expenses relating to the following matters: (i) the preparation, printing or reproduction and filing with the Commission of the Registration Statement (including financial statements and exhibits thereto), each Preliminary Prospectus, the Prospectus and the 1940 Act Notification and each amendment or supplement to any of them; (ii) the printing (or reproduction) and delivery (including postage, air freight charges and charges for counting and packaging) of such copies of the Registration Statement, each Preliminary Prospectus, the Prospectus, any sales material and all amendments or supplements to any of them, as may, in each case, be reasonably requested for use in connection with the offering and sale of the Securities; (iii) the preparation, printing, authentication, issuance and delivery of certificates for the Securities, including any stamp or transfer taxes in connection with the original issuance and sale of the Securities; (iv) the printing (or reproduction) and delivery of this

Agreement, any blue sky memorandum, dealer agreements and all other agreements or documents printed (or reproduced) and delivered in connection with the offering of the Securities; (v) the registration of the Securities under the Exchange Act and the listing of the Securities on the NYSE; (vi) any registration or qualification of the Securities for offer and sale under the securities or blue sky laws of the several states (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such registration and qualification); (vii) any filings required to be made with the NASD (including filing fees and the reasonable fees and expenses of counsel for the Underwriters relating to such filings); (viii) the transportation and other expenses incurred by or on behalf of Fund representatives in connection with presentations to prospective purchasers of the Securities; (ix) the fees and expenses of the Fund’s accountants and the fees and expenses of counsel (including local and special counsel) for the Fund; (x) all other costs and expenses incident to the performance by the Fund of its obligations hereunder; and (xi) an amount equal to $0.005 per Common Share for each Common Share sold pursuant to this Agreement, payable no later than 45 days from the date of this Agreement to the Underwriters in partial reimbursement of their expenses in connection with the offering. To the extent that the foregoing costs and expenses incidental to the performance of the obligations of the Fund under this Agreement, as well as the Fund’s other costs associated with the offering of the Securities (other than the sales load) exceed $0.05 per Share, the Investment Adviser will pay all such costs and expenses.

(j) The Fund will direct the investment of the net proceeds of the offering of the Securities in such a manner as to comply with the investment objective, policies and restrictions of the Fund as described in the Preliminary Prospectus and the Prospectus.

(k) The Fund will comply with the requirements of Subchapter M of the Code to qualify as a regulated investment company under the Code.

(l) The Fund and the Advisers will use their reasonable best efforts to perform all of the agreements required of them by this Agreement and discharge all conditions of theirs to closing as set forth in this Agreement.

7. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Underwritten Securities and the Option Securities, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Fund and the Investment Adviser contained herein as of the Execution Time, the Closing Date and any settlement date pursuant to Section 4 hereof, to the accuracy of the statements of the Fund and the Advisers made in any certificates pursuant to the provisions hereof, to the performance by the Fund or the Advisers of their obligations hereunder and to the following additional conditions:

(a) The Prospectus and any supplements thereto have been filed in the manner and within the time period required by Rule 497; and no stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use or order pursuant to Section 8(e) of the 1940 Act shall have been issued and no proceedings for that purpose shall have been instituted or threatened by the Commission, and any request of the Commission for additional information (to be included in the Registration Statement or Prospectus or otherwise) shall have been complied with in all material respects.

(b) The Fund shall have requested and caused Ropes & Xxxx LLP, counsel for the Fund, to have furnished to the Representatives their opinion, dated the Closing Date and addressed to the Representatives, to the effect that:

(i) The Registration Statement and all post-effective amendments filed with the Commission on or before the Closing Date, if any, have been declared effective under the Act; the filing of the Prospectus, and any supplements thereto, pursuant to Rule 497 under the 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, 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;

(ii) The Fund has been duly organized and is validly existing and in good standing as an unincorporated voluntary association (commonly known as a business trust) 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 Preliminary Prospectus and the Prospectus. To such counsel’s knowledge, the Fund has no subsidiaries. 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;

(iii) The Fund’s authorized capitalization is as set forth in the Preliminary Prospectus and the Prospectus; the capital stock of the Fund conforms in all material respects to the description thereof contained in the Registration Statement, the Preliminary Prospectus and the Prospectus. The Fund has an indefinite number of authorized common shares of beneficial interest, par value $0.00001 per share. All issued and outstanding common shares of beneficial interest of the Fund have been duly authorized and are validly issued, fully paid and, subject to the following paragraph, non-assessable. The Securities have been duly authorized and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid and, subject to the following paragraph, non-assessable. Except as contemplated by this Agreement and as described in the Preliminary Prospectus and the Prospectus, no person is entitled to any preemptive or other similar rights with respect to the Securities;

(iv) 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.

(v) The Fund was duly registered under Section 8(a) of the 1940 Act upon receipt by the Commission of the 1940 Act Notification. To our knowledge after oral inquiry of the Commission, the Commission has not issued to the Fund notice of any hearing or other proceeding to consider suspension or revocation of such registration. All required action has been taken by the Fund under the Act, the 1940 Act and the Rules and Regulations in connection with the issuance and sale of the Securities pursuant to this Agreement;

(vi) The Fund has 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 of the Fund Agreements complies in all material respects with all applicable provisions of the 1940 Act and the Advisers Act, as the case may be, and the rules and regulations thereunder (except we express no opinion as to the reasonableness or fairness of compensation payable under such agreements). 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 against the Fund in accordance with its terms (except we express no opinion as to the reasonableness or fairness of compensation payable under such agreements), 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), including without limitation specific performance regarding intellectual property rights;

(vii) The Fund has full power and authority to enter into this Agreement and to perform all of the terms and provisions thereof to be carried out by it. This Agreement has been duly and validly authorized, executed and delivered by the Fund;

(viii) None of (a) the execution and delivery by the Fund of this Agreement or any of the Fund Agreements, (b) the issue and sale by the Fund of the Securities as contemplated by this Agreement and (c) the performance by the Fund of its obligations under this Agreement, the Dividend Reinvestment Plan or any of the Fund Agreements or consummation by the Fund of the other transactions contemplated by this Agreement, the Dividend Reinvestment Plan 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 By-Laws or any agreement or instrument to which the Fund is a party or by which the Fund is bound (and that is filed as an exhibit to the Registration Statement) or violates or will violate any

federal or Massachusetts statute, law or regulation, or any judgment, injunction, order or decree of any federal or Massachusetts governmental agency or body, which violation would have a material adverse effect on the condition or business of the Fund;

(ix) No consent, approval, authorization or order of or registration with 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 this Agreement and the Fund Agreements, except such as (a) have been obtained under the Act, the 1940 Act or the Exchange Act and (b) may be required by the NYSE or the NASD or under state securities or Blue Sky laws in connection with the purchase and distribution of the Securities by the Underwriters pursuant to this Agreement;

(x) To such counsel’s knowledge, based upon a letter dated January 25, 2007, from Xxxxxx X. Xxxxxxx, Executive Vice President, Global Corporate Client Group, New York Stock Exchange, authorizing the Securities for listing on such Exchange, the Securities have been authorized for listing on the New York Stock Exchange and will be admitted and authorized for trading, subject to official notice of issuance, and to our knowledge after due inquiry, including oral inquiries of the Commission staff on February 27, 2007, the Exchange Act Registration Statement has become effective;

(xi) To such counsel’s 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 Preliminary Prospectus or the Prospectus but are not described therein as required;

(xii) To such counsel’s knowledge, there are no agreements, contracts, indentures, leases or other instruments that are required to be described in the Preliminary Prospectus 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;

(xiii) Each of the sections in the Preliminary Prospectus and the Prospectus entitled (i) “Tax Matters,” to the extent that they state matters of United States law or legal conclusions with respect thereto, and (ii) “Anti-Takeover and Other Provisions in the Declaration of Trust,” to the extent hat they summarize the Declaration of Trust, the By-Laws or matters of Massachusetts law or legal conclusions with respect thereto, present a fair summary of the laws and documents described therein; and

(xiv) 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 Date, and the Preliminary Prospectus and the Prospectus (except as aforesaid), as of the date thereof, complied as to form in all material respects with the applicable requirements of the Act and the 1940 Act and the Rules and Regulations.

Such counsel shall also state that it has not independently verified the accuracy, completeness or fairness of the statements made or the information contained in the Registration Statement, the Preliminary Prospectus or the Prospectus, or the price to the public, the number of Underwritten Securities and the number of Option Securities to be included on the cover page of the Prospectus (together, “Pricing Information”) and, except in the respects and to the extent set forth in paragraphs (iii), (xii) and (xiii) above, such counsel is not passing upon and does not assume any responsibility therefor. In the course of the preparation by the Fund of the Registration Statement, the Preliminary Prospectus and the Prospectus, such counsel has participated in discussions with your representatives and employees and officers of the Fund and the Advisers and in discussions with the Fund’s independent registered public accounting firm, in which the business and the affairs of the Fund and the Advisers and the contents of the Registration Statement and the Preliminary Prospectus and the Prospectus were discussed. There is no assurance that all material facts as to the Fund, the Advisers and their affairs were disclosed to such counsel or that its familiarity with the Fund and the Investment Adviser or any familiarity with the Sub-Adviser is such that such counsel would have necessarily recognized the materiality of such facts as were disclosed to it, and that such counsel has to a large extent relied upon statements of representatives of the Fund and the Advisers as to the materiality of the facts disclosed to it. Moreover, many of the determinations required to be made in preparation of the Registration Statement, the Preliminary Prospectus and the Prospectus involve matters of a non-legal nature. Further, such counsel is relying exclusively on information provided to it by representatives of the Underwriters and the Investment Adviser with respect to the Pricing Information and has made no independent inquiries regarding the accuracy or veracity thereof. Subject to the foregoing, on the basis of information that such counsel has gained in the course of performing the services referred to above, such opinion shall also provide that no facts have come to such counsel’s attention that would lead it to believe that, (i) as of the effective date of the Registration Statement, 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, (ii) as of the time of the pricing of the offering of the Underwritten Securities, the Preliminary Prospectus and the Pricing Information, when taken together as a whole, contained any untrue statement of material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, or (iii) as of its date and on the Closing Date, the Prospectus contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in light 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 or accounting data contained or incorporated by reference therein or omitted therefrom, as to which such counsel expresses no opinion).

In rendering such opinion, such counsel may rely as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Fund, the Advisers and public officials. References to the Prospectus in this paragraph (b) shall also include any supplements thereto at the Closing Date.

(c) You shall have received on the Closing Date an opinion of Xxxxxxx X. Xxxxxx, Chief Legal Officer of the Investment Adviser, dated the Closing Date and addressed to the Representatives, to the effect that:

(i) The Investment Adviser is a limited liability company and is validly existing and in good standing under the Delaware Limited Liability Company Act (6 Del. C §. 18-101, et seq.) with all necessary limited liability company power and authority to enter into and deliver this Agreement, the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement (together, the “Investment Adviser Transaction Documents”) and perform its obligations thereunder and to carry on its business as it is now being conducted and as described in the Preliminary Prospectus and the Prospectus. Based solely on (1) a search report of the corporate records of the Secretary of State of the State of California, prepared by Corporation Service Company, dated February __, 2007, showing the “status” of the Investment Adviser as “In Good Standing,” and (2) certificates from public officials in the States of New York and Connecticut, such counsel confirms that the Investment Adviser is qualified to do business in the following States: California, New York and Connecticut, 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 may have a material adverse effect on the ability of the Investment Adviser to perform its obligations under the Management Agreement and the Portfolio Management Agreement.

(ii) The execution, delivery and performance of the Investment Adviser Transaction Documents by the Investment Adviser have been duly authorized by all necessary limited liability company action of the Investment Adviser and no other actions on the part of the Investment Adviser or its unitholders or any subsidiary of the Investment Adviser or its unitholders is necessary to authorize and consummate the transactions contemplated thereby, and the Investment Adviser Transaction Documents have been duly executed and delivered by the Investment Adviser. The Investment Adviser has full power and authority to enter into the Investment Adviser Transaction Documents.

(iii) Each of the Management Agreement, the Portfolio Management Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement constitutes a legally valid and binding agreement of the Investment Adviser, enforceable against the Investment Adviser 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).

(iv) The Management Agreement complies in all material respects with all applicable provisions of the Act, the 1940 Act and the Advisers Act, as the case may be, and the rules and regulations thereunder.

(v) Neither the execution and delivery of the Investment Adviser Transaction Documents by the Investment Adviser, nor the consummation by the Investment Adviser of transactions contemplated thereby, nor compliance by the Investment Adviser with any of the terms and provisions thereof will:

(a) violate any provision of the Limited Liability Company Agreement of the Investment Adviser, effective May 23, 2000, as amended on July 1, 2001, December 12, 2001, October 31, 2002, May 3, 2004 and April 1, 2005 which is still in full force and effect and which has not been further amended or supplemented through the date hereof,

(b)(i) with respect to this Agreement, the Structuring Fee Agreement and the Additional Compensation Agreement, violate any federal, Delaware or New York statute, rule or regulation applicable to the Investment Adviser (other than federal and state securities or blue sky laws, the 1940 Act and the Advisers Act, as to which such counsel expresses no opinion), and (ii) with respect to the Management Agreement and the Portfolio Management Agreement, violate any federal, Delaware or New York statute, rule or regulation applicable to the Investment Adviser (other than state securities or blue sky laws, as to which such counsel expresses no opinion),

(c) violate any agreement to which the Investment Adviser is a party or by which it is bound and which is material to the Investment Adviser’s businesses taken as a whole (the “Material Agreements”),

(d) violate any order, writ, injunction or decree, known to me and applicable to the Investment Adviser, or

(e) require any consents, approvals, authorizations, registrations, declarations or filings by the Investment Adviser under any federal, Delaware or New York statute, rule or regulation applicable to the Investment Adviser, except as have been obtained under the Act, the 1940 Act or the Advisers Act and the rules and regulations thereunder.

No opinion is expressed in this paragraph (v) 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 (v) with respect to the operating licenses necessary for the Investment Adviser’s businesses.

(vi) The Investment Adviser is duly registered as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act or the 1940 Act or the rules and regulations thereunder from acting as investment manager for the Fund as contemplated by the Management Agreement, the Preliminary Prospectus and the Prospectus.

(vii) The description of the Investment Adviser and its business, and the statements attributable to the Investment Adviser, set forth in the Preliminary Prospectus and the Prospectus under the headings “Prospectus Summary—Investment Manager,” “Management of the Fund” and “Investment Manager and Sub-Adviser” 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.

(viii) Other than as disclosed in the Preliminary Prospectus and the Prospectus, 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 such counsel’s knowledge, threatened against the Investment Adviser of a nature required to be disclosed in the Preliminary Prospectus or the Prospectus or that might reasonably result in any material adverse change in the ability of the Investment Adviser to fulfill its obligations under any of the Investment Adviser Transaction Documents.

In rendering such opinion, such counsel may rely as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Fund, the Investment Adviser, the Sub-Adviser and public officials. References to the Prospectus in this paragraph (c) shall also include any supplements thereto at the Closing Date.

(d) You shall have received on the Closing Date an opinion of Xxxxxxx X. Field, Jr., General Counsel of the Sub-Adviser, dated the Closing Date and addressed to the Representatives, to the effect that:

(i) The Sub-Adviser is a limited liability company and is validly existing and in good standing under the Delaware Limited Liability Company Act (6 Del. C § 18-101, et seq.) with all necessary limited liability company power and authority to enter into and deliver the Portfolio Management Agreement and the Structuring Fee Agreement and perform its obligations thereunder and to carry on its business as it is now being conducted and as described in the Preliminary Prospectus and the Prospectus. Based solely on certificates from public officials, such counsel confirms that the Sub-Adviser 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 may have a material adverse effect on the ability of the Sub-Adviser to perform its obligations under the Portfolio Management Agreement.

(ii) The execution, delivery and performance of the Portfolio Management Agreement and the Structuring Fee Agreement by the Sub-Adviser has been duly authorized by all necessary limited liability company action of the Sub-Adviser and no other actions on the part of the Sub-Adviser or its members or any subsidiary of the Sub-Adviser or its members is necessary to authorize and consummate the transactions contemplated thereby, and the Portfolio Management Agreement and the Structuring Fee Agreement have been duly executed and delivered by the Sub-Adviser. The Sub-Adviser has full power and authority to enter into the Portfolio Management Agreement and the Structuring Fee Agreement.

(iii) Each of the Portfolio Management Agreement and the Structuring Fee Agreement constitutes a legally valid and binding agreement of the Sub-Adviser, enforceable against the Sub-Adviser 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).

(iv) The Portfolio Management Agreement complies in all material respects with all applicable provisions of the Act, the 1940 Act and the Advisers Act, as the case may be, and the rules and regulations thereunder.

(v) Neither the execution and delivery of the Portfolio Management Agreement or the Structuring Fee Agreement by the Sub-Adviser, nor the consummation by the Sub-Adviser of transactions contemplated thereby, nor compliance by the Sub-Adviser with any of the terms and provisions thereof will:

(a) violate any provision of the Limited Liability Company Agreement of the Sub-Adviser, effective January 1, 2002, which is still in full force and effect and has not been amended or supplemented through the date hereof,

(b)(i) with respect to the Structuring Fee Agreement, violate any federal, Delaware or New York statute, rule or regulation applicable to the Investment Adviser (other than federal and state securities or blue sky laws, the 1940 Act and the Advisers Act, as to which such counsel expresses no opinion), and (ii) with respect to the Portfolio Management Agreement, violate any federal or state statute, rule or regulation applicable to the Sub-Adviser (other than state securities or blue sky laws, as to which such counsel expresses no opinion),

(c) violate any agreement to which the Sub-Adviser is a party or by which it is bound and which is material to the Sub-Adviser’s businesses taken as a whole (the “Material Agreements”),

(d) violate any order, writ, injunction or decree, known to me and applicable to the Sub-Adviser, or

(e) require any consents, approvals, authorizations, registrations, declarations or filings by the Sub-Adviser under any federal, Delaware or New York statute, rule or regulation applicable to the Sub-Adviser, except as have been obtained under the Act, the 1940 Act or the Advisers Act and the rules and regulations thereunder.

(vi) The Sub-Adviser is duly registered as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act, the 1940 Act or the rules and regulations thereunder from acting as investment sub-adviser for the Fund as contemplated by the Portfolio Management Agreement, the Preliminary Prospectus and the Prospectus.

(vii) The description of the Sub-Adviser and its business, and the statements attributable to the Sub-Adviser, set forth in the Preliminary Prospectus and the Prospectus under the headings “Prospectus Summary—Sub-Adviser,” “Management of the Fund” and “Investment Manager and Sub-Adviser” 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.

(viii) Other than disclosed in the Preliminary Prospectus and the Prospectus, 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 such counsel’s knowledge, threatened against the Sub-Adviser of a nature required to be disclosed in the Preliminary Prospectus or the Prospectus or that might reasonably result in any material adverse change in the ability of the Sub-Adviser to fulfill its obligations under the Portfolio Management Agreement.

In rendering such opinion, such counsel may rely as to matters of fact, to the extent they deem proper, on certificates of responsible officers of the Fund, the Investment Adviser, the Sub-Adviser and public officials. References to the Prospectus in this paragraph (d) shall also include any supplements thereto at the Closing Date.

(e) The Representatives shall have received from Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Representatives, with respect to the issuance and sale of the Securities, the Registration Statement, the Preliminary Prospectus and the Prospectus (together with any supplement thereto) and other related matters as the Representatives may reasonably require, and the Fund and the Advisers shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

(f) Each of the Fund and the Investment Adviser shall have furnished to the Representatives a certificate, signed by the Chairman of the Board or the President or an Executive Vice President or a Managing Director and the principal financial or accounting officer of each of the Fund and the Investment Adviser, as the case may be, dated the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Preliminary Prospectus and the Prospectus, any amendments or supplements thereto and this Agreement and that:

(i) The representations and warranties in this Agreement of the Fund and the Investment Adviser, and the representations and warranties made by the Investment Adviser with respect to the Sub-Adviser, as the case may be, are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and the Fund or the Advisers, as the case may be, have complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;

(ii) No stop order suspending the effectiveness of the Registration Statement or any notice objecting to its use has been issued and no proceedings for that purpose have been instituted or, to the Fund’s or each of the Adviser’s knowledge, as the case may be, threatened; and

(iii) Since the date of the most recent financial statements included in the Prospectus (exclusive of any supplement thereto) (with respect to the certificate of the Fund) and since the date of the Prospectus (exclusive of any supplements thereto) (with respect to the certificate of the Investment Adviser), there has been no material adverse effect on the condition (financial or otherwise), prospects, earnings, business or properties of the Fund or each of the Advisers, as the case may be, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto).

(g) The Fund shall have requested and caused PricewaterhouseCoopers LLP to have furnished to the Representatives, at the Execution Time and at the Closing Date, letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance satisfactory to the Representatives, confirming that they are independent accountants within the meaning of the Act and the 1940 Act and the Rules and Regulations and stating in effect that:

(i) in their opinion the audited financial statements and financial statement schedules included in the Registration Statement, Preliminary Prospectus and the Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Act, the 1940 Act and the Rules and Regulations; and

(ii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical

information derived from the general accounting records of the Fund) set forth in the Registration Statement, the Preliminary Prospectus and the Prospectus, including the information set forth under the captions “Summary of Fund Expenses” in the Prospectus, agrees with the accounting records of the Fund, excluding any questions of legal interpretation.

References to the Prospectus in this paragraph (g) include any supplement thereto at the date of the letter.

(h) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto), there shall not have been (i) any material change or material decrease specified in the letter or letters referred to in paragraph (g) of this Section 7 or (ii) any change, or any development involving a prospective change, in or affecting the condition (financial or otherwise), prospects, earnings, business or properties of the Fund and each of the Advisers, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Representatives, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Registration Statement (exclusive of any amendment thereof), the Preliminary Prospectus and the Prospectus (exclusive of any supplement thereto).

(i) The Securities shall have been listed and admitted and authorized for trading on the NYSE, and satisfactory evidence of such actions shall have been provided to the Representatives.

(j) Prior to the Closing Date, the Fund and the Advisers shall have furnished to the Representatives such further information, certificates and documents as the Representatives may reasonably request.

(k) If any of the conditions specified in this Section 7 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Representatives and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Representatives. Notice of such cancellation shall be given to the Fund in writing or by telephone or facsimile confirmed in writing.

(l) The documents required to be delivered by this Section 7 shall be delivered at the office of Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, counsel for the Underwriters, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing Date.

8. Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 7 hereof is not satisfied, because of any termination pursuant to

Section 11 hereof or because of any refusal, inability or failure on the part of the Fund or the Advisers to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Investment Adviser will reimburse the Underwriters severally through Citigroup Global Markets Inc. on demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities.

9. Indemnification and Contribution. (a) The Fund and the Investment Adviser, jointly and severally, agree to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as originally filed or in any amendment thereof (and including any post-effective amendment, any Rule 462(b) Registration Statement and any Rule 430A Information deemed to be included or incorporated therein), or in any Preliminary Prospectus, the Prospectus, any sales material or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Fund and the Investment Adviser will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Fund or the Advisers by or on behalf of any Underwriter through the Representatives specifically for inclusion therein. This indemnity agreement will be in addition to any liability which the Fund and the Investment Adviser may otherwise have.

(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless each of the Fund and the Investment Adviser, each of its directors and trustees, each of its officers who signs the Registration Statement, and each person who controls the Fund or the Investment Adviser within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Fund and the Investment Adviser to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Fund or the Advisers by or on behalf of such Underwriter through the Representatives specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Fund and the Investment Adviser acknowledge that the statements set forth in the last paragraph of the cover page regarding delivery of the Securities and, under the heading “Underwriting”, (i) the list of Underwriters and their respective participation in the sale of the Securities, (ii) the sentences related to concessions and reallowances and (iii) the paragraphs related to stabilization, syndicate covering transactions and penalty bids in any Preliminary Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the several Underwriters specifically for inclusion in any Preliminary Prospectus or the Prospectus.

(c) Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party, (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.

(d) In the event that the indemnity provided in paragraph (a), (b) or (c) of this Section 9 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Fund, the Investment Adviser and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively, “Losses”) to which the Fund, the Investment Adviser and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Fund and the Investment Adviser on the one hand (treated jointly for this purpose as one person) and by the Underwriters on the other from the offering of the Securities; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating

to the offering of the Securities) be responsible for any amount in excess of the underwriting discount or commission applicable to the Securities purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Fund, the Investment Adviser and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Fund and the Investment Adviser on the one hand (treated jointly for this purpose as one person) and of the Underwriters on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Fund and the Investment Adviser (treated jointly for this purpose as one person) shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) received by the Fund, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Fund and the Investment Adviser on the one hand (treated jointly for this purpose as one person) or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Fund, the Investment Adviser and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 9, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls the Fund or the Investment Adviser within the meaning of either the Act or the Exchange Act, each officer of the Fund and the Investment Adviser who shall have signed the Registration Statement and each director or trustee of the Fund and the Investment Adviser shall have the same rights to contribution as the Fund and the Investment Adviser, subject in each case to the applicable terms and conditions of this paragraph (d).

10. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Securities agreed to be purchased by such Underwriter or Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Securities set forth opposite their names in Schedule I hereto bears to the aggregate amount of Securities set forth opposite the names of all the remaining Underwriters) the Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Securities which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Securities set forth in Schedule I hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Securities, and if such nondefaulting Underwriters do not purchase all the Securities, this Agreement will terminate without liability to any nondefaulting Underwriter, the Fund or the Investment Adviser. In the event of a default by

any Underwriter as set forth in this Section 10, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Fund and any nondefaulting Underwriter for damages occasioned by its default hereunder.

11. Termination. This Agreement shall be subject to termination in the absolute discretion of the Representatives, without liability on the part of the Underwriters to the Fund or the Investment Adviser, by notice given to the Fund or the Investment Adviser prior to delivery of and payment for the Securities, if at any time prior to such time (a) trading in the Fund’s Common Shares shall have been suspended by the Commission or the NYSE or trading in securities generally on the NYSE shall have been suspended or limited or minimum prices shall have been established on the NYSE, (b) a banking moratorium shall have been declared either by Federal or New York State authorities or (c) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Representatives, impractical or inadvisable to proceed with the offering or delivery of the Securities as contemplated by the Preliminary Prospectus or the Prospectus (exclusive of any supplement thereto).

12. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of each of the Fund and the Investment Adviser or its officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Fund or the Investment Adviser or any of the officers, directors, trustees, employees, agents or controlling persons referred to in Section 9 hereof, and will survive delivery of and payment for the Securities. The provisions of Sections 8 and 9 hereof shall survive the termination or cancellation of this Agreement.

13. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to the Representatives, will be mailed, delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General Counsel; or, if sent to the Fund or the Advisers, will be mailed, delivered or telefaxed to Allianz Global Investors Fund Management LLC, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000, Attention: Xxxxxxx X. Xxxxxx, Chief Legal Officer (fax no.: (000) 000-0000) and confirmed to it at, attention of the President of the Fund.

14. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers, directors, employees, agents and controlling persons referred to in Section 9 hereof, and no other person will have any right or obligation hereunder.

15. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.

16. Waiver of Jury Trial. Each of the Fund, the Investment Adviser and the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

17. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.

18. Integration. This Agreement supersedes all prior agreements and understandings (whether written or oral) among the Fund, the Investment Adviser and the Underwriters, or any of them, with respect to the subject matter thereof.

19. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof.

20. No Fiduciary Duty. Each of the Fund and Investment Adviser hereby acknowledges that (a) the purchase and sale of the Securities pursuant to this Agreement is an arm’s-length commercial transaction between the Fund and Investment Adviser, on the one hand, and the Underwriters and any affiliate through which they may be acting, on the other, (b) the Underwriters are acting as principal and not as an agent or fiduciary of the Fund or Investment Adviser and (c) the Fund’s and Investment Adviser’s engagement of the Underwriters in connection with the offering and the process leading up to the offering is as independent contractors and not in any other capacity. Furthermore, each of the Fund and the Investment Adviser agrees that it is solely responsible for making its own judgments in connection with the offering (irrespective of whether any of the Underwriters has advised or is currently advising the Fund or Advisers on related or other matters). Each of the Fund and the Investment Adviser agrees that it will not claim that the Underwriters have rendered advisory services of any nature or respect, or owe an agency, fiduciary or similar duty to the Fund or the Advisers, in connection with such transaction or the process leading thereto.

21. Definitions. The terms which follow, when used in this Agreement, shall have the meanings indicated.

“1940 Act” shall mean the Investment Company Act of 1940, as amended.

“1940 Act Rules and Regulations” shall mean the rules and regulations of the Commission under the 1940 Act.

“1940 Act Notification” shall mean a notification of registration of the Fund as an investment company under the 1940 Act on Form N-8A, as the 1940 Act Notification may be amended from time to time.

“Act” shall mean the Securities Act of 1933, as amended.

“Act Rules and Regulations” shall mean the rules and regulations of the Commission under the Act.

“Advisers Act” shall mean the Investment Advisers Act of 1940, as amended.

“Advisers Act Rules and Regulations” shall mean the rules and regulations of the Commission under the Advisers Act.

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.

“By-Laws” shall mean the Fund’s By-Laws, as amended or restated through the date hereof.

“Commission” shall mean the Securities and Exchange Commission.

“Declaration of Trust” shall mean the Fund’s Agreement and Declaration of Trust, as amended or restated through the date hereof.

“Effective Date” shall mean each date and time that the Registration Statement, any post-effective amendment or amendments thereto and any Rule 462(b) Registration Statement became or become effective.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

“Execution Time” shall mean the date and time that this Agreement is executed and delivered by the parties hereto.

“NASD” shall mean the National Association of Securities Dealers, Inc.

“NYSE” shall mean the New York Stock Exchange.

“Preliminary Prospectus” shall mean the preliminary prospectus (including the statement of additional information incorporated by reference therein) dated January 29, 2007 and any preliminary prospectus (including the statement of additional information incorporated by reference therein) included in the Registration Statement at the Effective Date that omits Rule 430A Information.

“Prospectus” shall mean the prospectus (including the statement of additional information incorporated by reference therein) relating to the Securities that is first filed pursuant to Rule 497 after the Execution Time.

“Registration Statement” shall mean the registration statement referred to in paragraph 1(a) above, including exhibits and financial statements and any prospectus supplement relating to the Securities that is filed with the Commission pursuant to Rule 497 and deemed part of such registration statement pursuant to Rule 430A, as amended at the Execution Time and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b) Registration

Statement, as the case may be. Such term shall include any Rule 430A Information deemed to be included therein at the Effective Date as provided by Rule 430A.

“Rule 430A” and “Rule 462” refer to such rules under the Act.

“Rule 430A Information” shall mean information with respect to the Securities and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A.

“Rule 462(b) Registration Statement” shall mean a registration statement and any amendments thereto filed pursuant to Rule 462(b) relating to the offering covered by the registration statement referred to in Section 1(a) hereof.

“Rule 497” refers to Rule 497(c) or 497(h) under the Act, as applicable.

“Rules and Regulations” shall mean, collectively, the Act Rules and Regulations and the 1940 Act Rules and Regulations.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Fund, the Investment Adviser and the several Underwriters.


Very truly yours,

XXXXXXXX-XXXXXXXXX EQUITY & CONVERTIBLE INCOME FUND

By:
Name:
Title:

ALLIANZ GLOBAL INVESTORS FUND MANAGEMENT LLC

By:
Name:
Title:

The foregoing Agreement is hereby confirmed and accepted as of the date first above written.


		Citigroup Global Markets Inc.

		X.X. Xxxxxxx & Sons, Inc.

				By: Citigroup Global Markets Inc.

				By:
				Name:
				Title:

For themselves and the other several Underwriters named in Schedule I to the foregoing Agreement.

SCHEDULE I


Underwriters		Number of Underwritten Securities to be Purchased
Citigroup Global Markets Inc.		[ ]
[ ]		[ ]
Total

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NICHOLAS-APPLEGATE EQUITY & CONVERTIBLE INCOME FUND Common Shares of Beneficial Interest ($0.00001 par value) UNDERWRITING AGREEMENT

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