EXHIBIT H.1
PIMCO Corporate Opportunity Fund
(a Massachusetts business trust)
[ ] Common Shares of Beneficial Interest
(Par Value $.00001 Per Share)
FORM OF PURCHASE AGREEMENT
December [ ], 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc.
Prudential Securities Incorporated
UBS Warburg LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
Wachovia Securities, Inc.
Advest, Inc.
H&R Block Financial Advisors, Inc.
▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇▇ Investments Inc., a KeyCorp Company
SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Quick & ▇▇▇▇▇▇, Inc.
Wedbush ▇▇▇▇▇▇ Securities Inc.
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
PIMCO Corporate Opportunity Fund, a Massachusetts business trust (the
"Fund"), the Fund's investment adviser, PIMCO Advisors Fund Management LLC, a
Delaware limited liability company (the "Investment Adviser" and, together with
Pacific Investment Management Company, LLC, a Delaware limited liability company
("PIMCO"), the "Advisers"), each confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇.▇.
▇▇▇▇▇▇▇ & Sons, Inc., Prudential Securities Incorporated, UBS Warburg LLC, RBC
▇▇▇▇ ▇▇▇▇▇▇▇ Inc., Wachovia Securities, Inc., Advest, Inc., H&R Block Financial
Advisors, Inc., ▇▇▇▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC, ▇▇▇▇▇▇▇▇
Investments Inc., a KeyCorp Company, SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Quick & ▇▇▇▇▇▇,
Inc., Wedbush ▇▇▇▇▇▇ Securities Inc. are acting as representatives (in such
capacity, the "Representatives"), with respect to the issue and sale by the Fund
and the purchase by the Underwriters, acting severally and not jointly, of the
respective number of common shares of
beneficial interest, par value $.00001 per share, of the Fund ("Common Shares")
set forth in said Schedule A, and with respect to the grant by the Fund to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of [ ] additional Common Shares
for the sole purpose of covering over-allotments, if any. The aforesaid [ ]
Common Shares (the "Initial Securities") to be purchased by the Underwriters and
all or any part of the [ ] Common Shares subject to the option described in
Section 2(b) hereof (the "Option Securities") are hereinafter called,
collectively, the "Securities."
The Fund understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-100699 and No.
811-21238) covering the registration of the Securities under the Securities Act
of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses, and a notification on Form N-8A of registration of
the Fund as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the "Rules and Regulations"). Promptly after
execution and delivery of this Agreement, the Fund will either (i) prepare and
file a prospectus in accordance with the provisions of Rule 430A ("Rule 430A")
of the Rules and Regulations and paragraph (c) or (h) of Rule 497 ("Rule 497")
of the Rules and Regulations or (ii) if the Fund has elected to rely upon Rule
434 ("Rule 434") of the Rules and Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 497. The
information included in any such prospectus or Term Sheet, that was omitted from
such registration statement at the time it became effective but that is deemed
to be part of such registration statement at the time it became effective, if
applicable, (a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule
430A Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information or the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the Securities, including the
statement of additional information incorporated therein by reference, is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated November [ ], 2002 together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Investment
Adviser. The Fund and the Investment Adviser jointly and severally represent and
warrant to each Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act, or order of
suspension or revocation of registration pursuant to Section 8(e) of
the 1940 Act, and no proceedings for any such purpose have been
instituted or are pending or, to the knowledge of the Fund or the
Investment Adviser, are contemplated by the Commission, and any request
on the part of the Commission for additional information has been
complied with in all material respects.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement, the notification of Form N-8A
and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act, the 1940
Act and the Rules and Regulations and did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment
or supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
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. If Rule 434 is used, the Fund will comply with the
requirements of Rule 434 and the Prospectus shall not be "materially
different", as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
Each preliminary prospectus and the prospectus filed as part
of the effective Registration Statement or as part of any amendment
thereto, or filed pursuant to Rule 497 under the 1933 Act, complied
when so filed in all material respects with the Rules and Regulations
and each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical to
the electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in
connection with the offering and sale of the Securities, the Fund has
complied or will comply with the requirements of Rule 111 under the
1933 Act Regulations relating to the payment of filing fees thereof.
The foregoing representations in this Section 1(a)(i) do not
apply to statements or omissions relating to the Underwriters made in
reliance on and in conformity with information furnished in writing to
the Fund by the Underwriters or their agents expressly for use in the
Registration Statement, 462(b) Registration Statement, Prospectus or
preliminary prospectus (or any amendment or supplement to any of the
foregoing).
(ii) Independent Accountants. As of the date of the report of
the independent accountants contained in the Registration Statement,
the accountants who certified the statement
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of assets and liabilities included in the Registration Statement are
independent public accountants as required by the 1933 Act and the
Rules and Regulations.
(iii) Financial Statements. The statement of assets and
liabilities included in the Registration Statement and the Prospectus,
together with the related notes, presents fairly the financial position
of the Fund in all material respects at the date indicated; said
statement has been prepared in conformity with generally accepted
accounting principles ("GAAP").
(iv) Expense Summary. The information set forth in the
Prospectus in the Fee Table has been prepared in accordance with the
requirements of Form N-2 and to the extent estimated or projected, such
estimates or projections are reasonably believed to be attainable and
reasonably based.
(v) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Fund,
whether or not arising in the ordinary course of business (a "Material
Adverse Effect"), (B) there have been no transactions entered into by
the Fund, other than those in the ordinary course of business, which
are material with respect to the Fund, and (C) there has been no
dividend or distribution of any kind declared, paid or made by the Fund
on any class of its capital shares.
(vi) Good Standing of the Fund. The Fund has been duly
organized and is validly existing as an unincorporated voluntary
association in good standing under the laws of the Commonwealth of
Massachusetts and has full power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Fund is duly qualified to transact business and is
in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) No Subsidiaries. The Fund has no subsidiaries.
(viii) Investment Company Status. The Fund is duly registered
with the Commission under the 1940 Act as a closed-end diversified
management investment company, and no order of suspension or revocation
of such registration has been issued or proceedings therefor initiated
or, to the knowledge of the Fund or the Investment Adviser, threatened
by the Commission.
(ix) Officers and Trustees. No person is serving or acting as
an officer, trustee or investment adviser of the Fund except in
accordance with the provisions of the 1940 Act and the Rules and
Regulations and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and the rules and regulations of the Commission
promulgated under the Advisers Act (the "Advisers Act Rules and
Regulations"). Except as disclosed in the Registration Statement and
the Prospectus (or any amendment or supplement to either of them), no
trustee of the Fund is an "interested person" (as defined in the ▇▇▇▇
▇▇▇) of the Fund or an "affiliated person" (as defined in the ▇▇▇▇ ▇▇▇)
of any Underwriter. For purposes of this Section 1(a)(ix), the Fund and
the Investment Adviser shall be entitled to rely on representations
from such officers and trustees.
(x) Capitalization. The authorized, issued and outstanding
shares of beneficial interest of the Fund is as set forth in the
Prospectus as of the date thereof under the caption "Description of
Shares." All issued and outstanding shares of beneficial interest of
the Fund have been duly authorized and validly issued and are fully
paid and non-assessable, (except as described in the Registration
Statement) and have been offered and sold or exchanged by the Fund in
compliance with all applicable laws (including, without limitation,
federal and state
4
securities laws); none of the outstanding shares of beneficial interest
of the Fund was issued in violation of the preemptive or other similar
rights of any securityholder of the Fund.
(xi) Authorization and Description of Securities. The
Securities to be purchased by the Underwriters from the Fund have been
duly authorized for issuance and sale to the Underwriters pursuant to
this Agreement and, when issued and delivered by the Fund pursuant to
this Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable, (except as
provided in the Registration Statement). The Common Shares conform to
all statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments
defining the same to the extent such rights are set forth; no holder of
the Securities will be subject to personal liability by reason of being
such a holder (except as described in the Registration Statement); and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Fund (other than the
right of the Investment Adviser to purchase securities as set forth in
Section 2 hereof).
(xii) Absence of Defaults and Conflicts. The Fund is not in
violation of its agreement and declaration of trust or by-laws, or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement
or instrument to which it is a party or by which it may be bound, or to
which any of the property or assets of the Fund is subject
(collectively, "Agreements and Instruments") except for such violations
or defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement, the Management
Agreement, the Sub-Advisory Agreement, the Administration Agreement,
the Custodian Agreement and the Transfer and Dividend Disbursing Agent
and Registrar Agreement referred to in the Registration Statement (as
used herein, the "Management Agreement," the "Sub-Advisory Agreement,"
the "Administration Agreement," the "Custodian Agreement" and the
"Transfer and Dividend Disbursing Agency and Registrar Agreement,"
respectively) and the consummation of the transactions contemplated
herein and in the Registration Statement (including the issuance and
sale of the Securities and the use of the proceeds from the sale of the
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Fund with its obligations hereunder
have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Fund pursuant to, the Agreements and Instruments (except
for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
agreement and declaration of trust or by-laws of the Fund or any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Fund or any of its assets,
properties or operations, other than State securities or "blue sky"
laws applicable in connection with the purchase and distribution of the
Securities by the Underwriters pursuant to this Agreement. As used
herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Fund.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Fund or the Investment Adviser, threatened,
against or affecting the Fund, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or which
might reasonably be expected to result in a Material
5
Adverse Effect, or which might reasonably be expected to materially and
adversely affect the properties or assets of the Fund or the
consummation of the transactions contemplated in this Agreement or the
performance by the Fund of its obligations hereunder. The aggregate of
all pending legal or governmental proceedings to which the Fund is a
party or of which any of its property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be
expected to result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no material contracts or
documents which are required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits thereto by the
1933 Act, the 1940 Act or by the Rules and Regulations which have not
been so described and filed as required.
(xv) Possession of Intellectual Property. The Fund owns or
possesses, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by the Fund, and the Fund has not received any notice or is
not otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property or of any
facts or circumstances which would render any Intellectual Property
invalid or inadequate to protect the interest of the Fund therein, and
which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Fund of its
obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been
already obtained or as may be required under the 1933 Act, the 1940
Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"),
or under the rules of the National Association of Securities Dealers,
Inc ("NASD") or state securities laws.
(xvii) Possession of Licenses and Permits. The Fund possesses
such permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies
necessary to operate its properties and to conduct the business as
contemplated in the Prospectus, except where the absence of such
possession would not result in a Material Adverse Effect; the Fund is
in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and the Fund has not received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would result in a
Material Adverse Effect.
(xviii) Advertisements. Any advertising, sales literature or
other promotional material (including "prospectus wrappers", "broker
kits," "road show slides" and "road show scripts" and "electronic road
show presentations") authorized in writing by or prepared by the Fund
or the Investment Adviser used in connection with the public offering
of the Securities (collectively, "sales material") does not contain an
untrue statement of a material fact or omit to state a material
6
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they were made, not
misleading. Moreover, all sales material complied and will comply in
all material respects with the applicable requirements of the 1933 Act,
the 1940 Act, the Rules and Regulations and the rules and
interpretations of the National Association of Securities Dealers, Inc.
("NASD").
(xix) Subchapter M. The Fund intends to direct the investment
of the proceeds of the offering described in the Registration Statement
in such a manner as to comply with the requirements of Subchapter M of
the Internal Revenue Code of 1986, as amended ("Subchapter M of the
Code" and the "Code," respectively), and intends to qualify as a
regulated investment company under Subchapter M of the Code.
(xx) Distribution of Offering Materials. The Fund has not
distributed and, prior to the later to occur of (A) the Closing Time
and (B) completion of the distribution of the Shares, will not
distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, a preliminary
prospectus, the Prospectus or other materials, if any, permitted by the
1933 Act or the 1940 Act or the Rules and Regulations.
(xxi) Accounting Controls. The Fund maintains a system of
internal accounting controls sufficient to provide reasonable
assurances that (A) transactions are executed in accordance with
management's general or specific authorization and with the applicable
requirements of the 1940 Act, the Rules and Regulations and the Code;
(B) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets and to maintain
compliance with the books and records requirements under the 1940 Act
and the Rules and Regulations; (C) access to assets is permitted only
in accordance with the management's general or specific authorization;
and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(xxii) Absence of Undisclosed Payments. To the Fund's
knowledge, neither the Fund nor any employee or agent of the Fund has
made any payment of funds of the Fund or received or retained any
funds, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(xxiii) Material Agreements. This Agreement, the Management
Agreement, the Administration Agreement, the Custodian Agreement and
the Transfer and Dividend Disbursing Agency and Registrar Agreement
have each been duly authorized by all requisite action on the part of
the Fund and executed and delivered by the Fund, as of the dates noted
therein, and each complies with all applicable provisions of the 1940
Act in all material respects. Assuming due authorization, execution and
delivery by the other parties thereto with respect to the Management
Agreement, the Sub-Advisory Agreement, the Administration Agreement,
the Custodian Agreement and the Transfer and Dividend Disbursing Agency
and Registrar Agreement, each of the Management Agreement, the
Administration Agreement, the Sub-Advisory Agreement, the Custodian
Agreement and the Transfer and Dividend Disbursing Agency and Registrar
Agreement constitutes a valid and binding agreement of the Fund,
enforceable in accordance with its terms, except as affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing and except as rights to indemnification or
contribution thereunder may be limited by federal or state laws.
7
(xxiv) Registration Rights. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Fund under the 1933 Act.
(xxv) NYSE Listing. The Securities have been duly authorized
for listing, upon notice of issuance, on the New York Stock Exchange
("NYSE") and the Fund's registration statement on Form 8-A under the
1934 Act has become effective.
(b) Representations and Warranties by the Investment Adviser. The
Investment Adviser represents and warrants to each Underwriter as of the date
hereof, as of the Closing Time referred to in Section 2(c) hereof, and as of
each Date of Delivery (if any) referenced to in Section 2(b) hereof as follows:
(i) Good Standing of the Advisers. The Investment Adviser has
been duly organized and is validly existing and in good standing as a
limited liability company under the laws of the State of Delaware, and
PIMCO has been duly organized and is validly existing and in good
standing as a limited liability company under the laws of the State of
Delaware with full limited liability company power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and each is duly qualified as a foreign
limited liability company to transact business and is in good standing
in each other jurisdiction in which such qualification is required,
except to the extent that failure to be so qualified and in good
standing would not have a Material Adverse Effect on either Adviser's
ability to provide services to the Fund.
(ii) Investment Adviser Status. Each of the Advisers is duly
registered and in good standing with the Commission 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 under such acts, from
acting under the Management Agreement for the Fund as contemplated by
the Prospectus.
(iii) Description of Advisers. The description of the Advisers
in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) complied and complies in all material
respects with the provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and is true and correct and does 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.
(iv) Capitalization. Each of the Advisers has the financial
resources available to it necessary for the performance of its services
and obligations as contemplated in the Prospectus, this Agreement and
under the Management Agreement or Sub-Advisory Agreement to which it is
a party.
(v) Authorization of Agreements; Absence of Defaults and
Conflicts. This Agreement, the Management Agreement, the Sub-Advisory
Agreement and the Additional Compensation Agreement have each been duly
authorized, executed and delivered by each Adviser that is a party
thereto, and (assuming the due authorization, execution and delivery by
each of the parties thereto) the Management Agreement, the Sub-Advisory
Agreement and the Additional Compensation Agreement each constitute a
valid and binding obligation of each respective Adviser that is a party
thereto, enforceable against it in accordance with its terms, except as
affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally and general equitable principles
(whether considered in a proceeding in equity or at law); and neither
the execution and delivery of this Agreement, the Management Agreement,
the Sub-Advisory Agreement or the
8
Additional Compensation Agreement nor the performance by either of the
Advisers of its obligations hereunder or thereunder will conflict with,
or result in a breach of any of the terms and provisions of, or
constitute, with or without the giving of notice or lapse of time or
both, a default under, any agreement or instrument to which either
Adviser is a party or by which it is bound, the certificate of
formation, the operating agreement, or other organizational documents
of the Advisers, or to each Adviser's knowledge, by any law, order,
decree, rule or regulation applicable to it of any jurisdiction, court,
federal or state regulatory body, administrative agency or other
governmental body, stock exchange or securities association having
jurisdiction over the Advisers or their respective properties or
operations; and no consent, approval, authorization or order of any
court or governmental authority or agency is required for the
consummation by the Advisers of the transactions contemplated by this
Agreement, the Management Agreement, the Sub-Advisory Agreement and the
Additional Compensation Agreement, except as have been obtained or may
be required under the 1933 Act, the 1940 Act, the 1934 Act or state
securities laws.
(vi) No Material Adverse Change. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, there has not occurred
any event which should reasonably be expected to have a material
adverse effect on the ability of either Adviser to perform its
respective obligations under this Agreement and the respective
Management Agreement and Sub-Advisory Agreement to which it is a party.
(vii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Advisers, threatened against or affecting either
Adviser or any "affiliated person" of either Adviser (as such term is
defined in the ▇▇▇▇ ▇▇▇) or any partners, trustees, officers or
employees of the foregoing, whether or not arising in the ordinary
course of business, which might reasonably be expected to result in any
material adverse change in the condition, financial or otherwise, or
earnings, business affairs or business prospects of the relevant
Adviser, materially and adversely affect the properties or assets of
the relevant Adviser or materially impair or adversely affect the
ability of the relevant Adviser to function as an investment adviser or
perform its obligations under the Management Agreement or the
Sub-Advisory Agreement, or which is required to be disclosed in the
Registration Statement and the Prospectus.
(viii) Absence of Violation or Default. Each Adviser is not in
violation of certificate of formation, its operating agreement or other
organizational documents or in default under any agreement, indenture
or instrument, where such violation or default would reasonably be
expected to have a Material Adverse Effect on either Adviser's ability
to function as an investment adviser or perform its obligations under
the Management Agreement or Sub-Advisory Agreement.
(c) Officer's Certificates. Any certificate signed by any officer of
the Fund or an Adviser delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or the
relevant Adviser, as the case may be, to each Underwriter as to the matters
covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Fund agrees to sell to each Underwriter, severally and not jointly,
and each Underwriter, severally and not jointly, agrees to purchase from the
Fund, at the price per share set forth in Schedule B, the number of Initial
Securities set forth in Schedule A opposite
9
the name of such Underwriter, plus any additional number of Initial Securities
which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Fund hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional [ ] Common Shares in the aggregate
at the price per share set forth in Schedule B, less an amount per share equal
to any dividends or distributions declared by the Fund and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 45 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Fund setting forth
the number of Option Securities as to which the several Underwriters are then
exercising the option and the time and date of payment and delivery for such
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Representatives, but shall not be earlier than the
third day after the date on which the option is being exercised nor later than
seven full business days after the exercise of said option, nor in any event
prior to the Closing Time, as hereinafter defined. If the option is exercised as
to all or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as
▇▇▇▇▇▇▇ ▇▇▇▇▇ in its discretion shall make to eliminate any sales or purchases
of a fractional number of Option Securities plus any additional number of Option
Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
The Fund also agrees, subject to all the terms and conditions set forth
herein, to sell to the Investment Adviser, and, upon the basis of the
representations, warranties and agreements of the Fund herein contained and
subject to all the terms and conditions set forth herein, the Investment Adviser
shall have the right to purchase from the Fund, at the same purchase price per
share as the Underwriters shall pay for the Option Securities, up to an
aggregate of [ ] Securities (the "Investment Adviser Securities").
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Ropes &
▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other
place as shall be agreed upon by the Representatives and the Fund, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Fund (such time and date of payment and delivery being
herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Fund, on each Date of Delivery as specified in the notice from the
Representatives to the Fund.
Payment shall be made to the Fund by wire transfer of immediately
available funds to a bank account designated by the Fund, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may
10
(but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any
Underwriter whose funds have not been received by the Closing Time or the
relevant Date of Delivery, as the case may be, but such payment shall not
relieve such Underwriter from its obligations hereunder.
The place and time of closing for the Investment Adviser Securities
shall be as agreed upon by the Investment Adviser and the Fund, except that the
date of such closing for the Investment Adviser Securities shall in no event be
earlier than the relevant Date of Delivery.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in the City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants.
(a) The Fund and the Investment Adviser, jointly and severally,
covenant with each Underwriter as follows:
(i) Compliance with Securities Regulations and Commission
Requests. With respect to the offering of the Securities, the Fund,
subject to Section 3(a)(ii), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or, to the knowledge of the
Fund or the Investment Adviser, threatening of any proceedings for any
of such purposes. The Fund will promptly effect the filings necessary
pursuant to Rule 497 and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for
filing under Rule 497 was received for filing by the Commission and, in
the event that it was not, it will promptly file such prospectus. The
Fund will make every reasonable effort to prevent the issuance of any
stop order, or order of suspension or revocation of registration
pursuant to Section 8(e) of the 1940 Act, and, if any such stop order
or order of suspension or revocation of registration is issued, to
obtain the lifting thereof at the earliest possible moment.
(ii) Filing of Amendments. With respect to the offering of the
Securities, the Fund will give the Representatives notice of its
intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or
any amendment, supplement or revision to either the prospectus included
in the Registration Statement at the time it became effective or to the
Prospectus, will furnish the Representatives with copies of any such
documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to
which the Representatives or counsel for the Underwriters shall
reasonably object.
11
(iii) Delivery of Registration Statements. The Fund has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, a signed copy of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and a
signed copy of all consents and certificates of experts, and will also
deliver to the Representatives, without charge, a conformed copy of the
Registration Statement as originally filed and of each amendment
thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the
extent permitted by Regulation S-T. No copy of a post-effective
amendment shall be required to be delivered after one year from the
date hereof.
(iv) Delivery of Prospectuses. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Fund
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Fund will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(v) Continued Compliance with Securities Laws. If at any time
when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters or for the Fund, to
amend the Registration Statement or amend or supplement the Prospectus
in order that the Prospectus will not include any untrue statements of
a material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the reasonable opinion of such counsel, at
any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the Rules and Regulations, the Fund will promptly
prepare and file with the Commission, subject to Section 3(a)(ii), such
amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus
comply with such requirements, and the Fund will furnish to the
Underwriters such number of copies of such amendment or supplement as
the Underwriters may reasonably request; provided that, if the
supplement or amendment is required exclusively as a result of a
misstatement in or omission from the information provided to the Fund
in writing by the Underwriters expressly for use in the Prospectus, the
Fund may deliver such supplement or amendment to the Underwriters and
dealers at a reasonable charge not to exceed the actual cost thereof to
the Fund.
(vi) Blue Sky Qualifications. The Fund will use its best
efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions of the United States as the
Representatives may designate and to maintain such qualifications in
effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Fund shall not be
obligated to file any general consent to service of process or to
qualify as a foreign business trust or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Fund will file such statements
and reports as may be
12
required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(vii) Rule 158. The Fund will make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds
received by it from the sale of the Securities in substantially the
manner specified in the Prospectus under "Use of Proceeds".
(ix) Listing. The Fund will use its reasonable best efforts to
effect the listing of the Securities on the NYSE, subject to notice of
issuance, concurrently with the effectiveness of the Registration
Statement.
(x) Restriction on Sale of Securities. During a period of 180
days from the date of the Prospectus, the Fund will not, without the
prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (A) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of Common
Shares or any securities convertible into or exercisable or
exchangeable for Common Shares or file any registration statement under
the 1933 Act with respect to any of the foregoing or (B) enter into any
swap or any other agreement or any transaction that transfers, in whole
or in part, directly or indirectly, the economic consequence of
ownership of the Common Shares, whether any such swap or transaction
described in clause (A) or (B) above is to be settled by delivery of
Common Shares or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (1) the Securities to be sold
hereunder or (2) Common Shares issued or, for the avoidance of doubt,
purchased in the open market pursuant to any dividend reinvestment
plan.
(xi) Reporting Requirements. The Fund, during the period when
the Prospectus is required to be delivered under the 1933 Act or the
1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1940 Act and the 1934 Act within the time
periods required by the 1940 Act and the Rules and Regulations and the
1934 Act and the rules and regulations of the Commission thereunder,
respectively.
(xii) Subchapter M. The Fund will use its best efforts to
comply with the requirements of Subchapter M of the Code to qualify as
a regulated investment company under the Code.
(xiii) No Manipulation of Market for Securities. The Fund will
not (a) take, directly or indirectly, any action designed to cause or
to result in, or that might reasonably be expected to constitute, the
stabilization or manipulation of the price of any security of the Fund
to facilitate the sale or resale of the Securities in violation of
federal or state securities laws, and (b) until the Closing Date, or
the Date of Delivery, if any, (i) except for share repurchases
permitted in accordance with applicable laws and purchases of
Securities in the open market pursuant to the Fund's dividend
reinvestment plan, sell, bid for or purchase the Securities or pay any
person any compensation for soliciting purchases of the Securities or
(ii) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Fund.
(xiv) Rule 462(b) Registration Statement. If the Fund elects
to rely upon Rule 462(b), the Fund shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this
Agreement, and the Fund shall at the time of filing either pay to the
Commission the filing fee for the Rule 462(b)
13
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the 1933 Act.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the reasonable costs of the preparation, printing and delivery to
the Underwriters of this Agreement, any Agreement among Underwriters and such
other documents as may be required in connection with the offering, purchase,
sale, issuance or delivery of the Securities, (iii) the preparation, issuance
and delivery of the certificates for the Securities to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties
payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Fund's counsel, accountants
and other advisers, (v) the qualification of the Securities under securities
laws in accordance with the provisions of Section 3(a)(vi) hereof, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
the Blue Sky Survey and any supplement thereto, (vi) the printing and delivery
to the Underwriters of copies of each preliminary prospectus, Prospectus and any
amendments or supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by
the NASD of the terms of the sale of the Securities, (x) the fees and expenses
incurred in connection with the listing of the Securities on the NYSE and (xi)
the printing of any sales material. Also, the Fund shall pay to ▇▇▇▇▇▇▇ ▇▇▇▇▇,
on behalf of the Underwriters, $.005 per share of the securities purchased
pursuant to this agreement as partial reimbursement of expenses incurred in
connection with the offering. The Investment Adviser has agreed to pay
organizational expenses and offering costs (other than sales load) of the Fund
that exceed $.03 per Common Share.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Fund and the Investment Adviser, jointly and severally, agree that
they shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Fund and the
Investment Adviser contained in Section 1 hereof or in certificates of any
officer of the Fund or the Investment Adviser delivered pursuant to the
provisions hereof, to the performance by the Fund and the Investment Adviser of
their respective covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act, no notice or
order pursuant to Section 8(e) of the 1940 Act shall have been issued, and no
proceedings with respect to either shall have been initiated or, to the
knowledge of counsel to the Fund and counsel to the Investment Adviser,
threatened by the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing the Rule
430A Information shall have been filed with the Commission in accordance with
Rule 497 (or a post-effective amendment providing such information shall have
been filed and declared effective in accordance with the requirements of Rule
430A or a certification must have
14
been filed in accordance with Rule 497(j)) or, if the Fund has elected to rely
on upon Rule 434, a Term Sheet shall have been filed with the Commission in
accordance with Rule 497.
(b) Opinion of Counsel for Fund and the Advisers. At Closing Time, the
Representatives shall have received the favorable opinions, dated as of Closing
Time, of Ropes & ▇▇▇▇, counsel for the Fund and ▇▇▇▇ ▇▇▇▇▇▇, Esq., internal
counsel for the Investment Adviser, in form and substance satisfactory to
counsel for the Underwriters, together with signed or reproduced copies of such
letters for each of the other Underwriters substantially to the effect set forth
in Exhibits A-1 and A-2 hereto or in such other form and substance as may be
reasonably satisfactory to counsel to the Underwriters.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in clauses (A) (i), (ii), (vi), (vii)
(solely as to preemptive or other similar rights arising by operation of law or
under the charter or by-laws of the Fund), (viii) through (x), inclusive, (xiv)
(solely as to the information in the Prospectus under "Description of Shares")
and the last paragraph of Exhibit A hereto. In giving such opinion such counsel
may rely, as to all matters governed by the laws of jurisdictions other than the
law of the State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Representatives. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Fund and
certificates of public officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business, and the
Representatives shall have received (A) a certificate of a duly authorized
officer of the Fund and of the chief financial or chief accounting officer of
the Fund and of the President or a Vice President or Managing Director of the
Investment Adviser, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and warranties in
Sections 1(a) and (b) hereof are true and correct with the same force and effect
as though expressly made at and as of Closing Time, (iii) each of the Fund and
the Advisers, respectively, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied pursuant to this Agreement
at or prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement, or order of suspension or revocation of
registration pursuant to Section 8(e) of the 1940 Act, has been issued and no
proceedings for any such purpose have been instituted or are pending or are
contemplated by the Commission and (B) a certificate of the President or a Vice
President or Managing Director of PIMCO, dated as of Closing Time, to the effect
that (i) the description of PIMCO and its business, and the statements
attributable to PIMCO in the Registration Statement (and any amendment or
supplement thereto) under the headings "Prospectus Summary--Portfolio Manager,"
"Management of the Fund" and "Investment Manager and Portfolio Manager," at the
time such Registration Statement became effective, were true and correct and did
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 or the description of PIMCO and its business,
and the statements attributable to PIMCO in the Prospectus (and any amendment or
supplement thereto) under the headings "Prospectus Summary--Portfolio Manager"
and "Management of the Fund," at the time the Prospectus was issued, were true
and correct and did not, or at the Closing Time, are true and correct and do
not, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form
15
and substance satisfactory to the Representatives, together with signed or
reproduced copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and the
Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the NYSE, subject only to official notice of
issuance.
(h) Execution of Additional Compensation Agreement. At Closing Time,
▇▇▇▇▇▇▇ ▇▇▇▇▇ shall have received the Additional Compensation Agreement, dated
the date of the Closing Time, as executed by the Investment Adviser.
(i) No Objection. The NASD has confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the underwriting
terms and arrangements.
(j) Conditions to Purchase of Option Securities. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Securities, the representations and warranties
of the Fund contained herein and the statements in any certificates furnished by
the Fund hereunder shall be true and correct as of each Date of Delivery and, at
the relevant Date of Delivery, the Representatives shall have received:
(i) Officers' Certificates. Certificates, dated such Date of
Delivery, of a duly authorized officer of the Fund and of the chief
financial or chief accounting officer of the Fund and of the President
or a Vice President or Managing Director of each of the Advisers, as
applicable, confirming that the information contained in the applicable
certificate delivered by each of them at the Closing Time pursuant to
Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) Opinions of Counsel for the Fund and the Advisers. The
favorable opinions of Ropes & ▇▇▇▇, counsel for the Fund, and ▇▇▇▇
▇▇▇▇▇▇, Esq., internal counsel for the Investment Adviser, in form and
substance reasonably satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.
(iii) Opinion of Counsel for the Underwriters. The favorable
opinion of ▇▇▇▇▇▇▇▇ Chance US LLP, counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(f) hereof, except that the "specified date" in
the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of Delivery,
counsel for the Underwriters shall have been furnished with such opinions,
certificates and other documents as they may reasonably require from the Fund
and the Advisers for the purpose of enabling them to pass upon the issuance and
sale of the Securities as herein contemplated, or in order to evidence the
accuracy of any of
16
the representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Fund and the Investment
Adviser in connection with the organization and registration of the Fund under
the 1940 Act and the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters.
(l) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Fund at
any time at or prior to Closing Time or such Date of Delivery, as the case may
be, and such termination shall be without liability of any party to any other
party except as provided in Section 4 and except that Sections 1, 6, 7, 8 and 13
shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Investment
Adviser, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and any
director, officer, employee or affiliate thereof as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(e) below) any such settlement is effected
with the prior written consent of the Fund and the Investment Adviser;
and
(iii) against any and all expense whatsoever, as incurred
(including the reasonable fees and disbursements of counsel chosen by
▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or the
Investment Adviser by any Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or
17
supplement thereto); provided, further, that the indemnity agreement contained
in this Section 6(a) shall not inure to the benefit of any Underwriter (or to
the benefit of any person controlling such Underwriter) from whom the person
asserting any such loss, liability, claim, damage and expense purchased the
Securities which are the subject thereof if the Prospectus corrected any such
alleged untrue statement or omission and if such Prospectus was delivered to
such Underwriter in a timely manner and if such Underwriter failed to send or
give a copy of the Prospectus to such person at or prior to the written
confirmation of the sale of such Securities to such person.
(b) Indemnification of Fund, Investment Adviser, Trustees and Officers.
Each Underwriter severally agrees to indemnify and hold harmless the Fund and
the Investment Adviser, their respective directors and trustees, each of the
Fund's officers who signed the Registration Statement, and each person, if any,
who controls the Fund or the Investment Adviser within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act against any and all loss,
liability, claim, damage and expense described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the Fund
or the Investment Adviser by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly
for use in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Indemnification for Marketing Materials. In addition to the
foregoing indemnification, the Fund and the Investment Adviser also, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in Section 6(a),
as limited by the proviso set forth therein, with respect to any sales material.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Fund and the Investment Adviser. An
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
18
(e) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 60 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then, each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Fund and the Investment Adviser on
the one hand and the Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Fund and the Investment Adviser on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Fund and the Investment Adviser
on the one hand and the Underwriters on the other hand in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement (before deducting expenses) received
by the Fund and the total underwriting discount received by the Underwriters
(whether from the Fund or otherwise), in each case as set forth on the cover of
the Prospectus or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Securities as
set forth on such cover.
The relative fault of the Fund and the Investment Adviser on the one
hand and the Underwriters on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Fund or the Investment Adviser or by the
Underwriters and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.
The Fund, the Investment Adviser and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
19
Underwriter has otherwise been required to pay by reason of any such
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Fund and each director of the Investment Adviser,
respectively, each officer of the Fund who signed the Registration Statement,
and each person, if any, who controls the Fund or the Investment Adviser, within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Fund and the Investment Adviser,
respectively. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial Securities set
forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Fund or the Advisers submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Fund or the Advisers, and shall survive
delivery of the Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Fund, at any time at or prior to Closing Time (i) if
there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Fund or the Advisers,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in the Common Shares of the Fund has been suspended or materially
limited by the Commission or the NYSE, or if trading generally on the NYSE or
the American Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7, 8 and 13 shall survive such termination and remain in full force and
effect.
20
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time or a Date
of Delivery to purchase the Securities which it or they are obligated to
purchase under this Agreement (the "Defaulted Securities"), the Representatives
shall have the right, within 24 hours thereafter, to make arrangements for one
or more of the non-defaulting Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as may be agreed upon and upon the terms herein set forth; if, however, the
Representatives shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Fund to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Fund to sell the relevant Option Securities, as
the case may be, either the Representatives or the Fund shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the case may be, for
a period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
As used herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representatives, ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., North Tower, 4 World Financial Center, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of Equity Capital Markets; and notices to the
Fund or the Advisers shall be directed, as appropriate, to the office of PIMCO
Advisors Fund Management LLC, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention ▇▇▇▇ ▇▇▇▇▇.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Fund, the Investment Adviser and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund, the Investment Adviser and their respective successors
and the controlling persons and officers and trustees referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Fund, the
Investment Adviser and their respective partners and successors, and said
controlling persons and officers, trustees and directors and their heirs and
legal
21
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 15. Massachusetts Business Trust
A copy of the Agreement and Declaration of Trust of the Fund is on file
with the Secretary of State of the Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed on behalf of the Fund by an officer
or trustee of the Fund in his or her capacity as an officer or trustee of the
Fund and not individually and that the obligations of or arising out of this
instrument are not binding upon any of the trustees, officers or shareholders
individually but are binding only upon the assets and property of the Fund.
22
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriters, the Fund and the Investment Adviser in accordance with its
terms.
Very truly yours,
PIMCO CORPORATE OPPORTUNITY FUND
By:
-----------------------------------------
Name:
Title:
PIMCO ADVISORS FUND MANAGEMENT LLC
By:
------------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇.▇. ▇▇▇▇▇▇▇ & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
UBS WARBURG LLC
RBC ▇▇▇▇ ▇▇▇▇▇▇▇ INC.
WACHOVIA SECURITIES, INC.
ADVEST, INC.
H&R BLOCK FINANCIAL ADVISORS, INC.
▇▇▇▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ LLC
▇▇▇▇▇▇▇▇ INVESTMENTS INC., A KECORP COMPANY
SUNTRUSTROBINSON ▇▇▇▇▇▇▇▇
QUICK & ▇▇▇▇▇▇, INC.
WEDBUSH ▇▇▇▇▇▇ SECURITIES INC.
By: ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By:
------------------------------------------------
Authorized Signatory
23
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
24
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
Sch A-1
SCHEDULE B
PIMCO Corporate Opportunity Fund
[ ] Common Shares of Beneficial Interest
(Par Value $.00001 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $15.00.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the initial public
offering price set forth above less $[ ] per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions declared by the Fund and
payable on the Initial Securities but not payable on the Option Securities.
Sch B-1
Exhibit A-1
FORM OF OPINION OF FUND'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
December __, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
As Representatives of the Several Underwriters listed on
Schedule A to the Purchase Agreement
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to PIMCO Corporate Opportunity Fund (the
"Fund") in connection with the proposed issuance of _______ common shares of
beneficial interest, with a par value of $0.00001 per share (the "Shares"). This
opinion is furnished to you pursuant to Section 5(b) of the Purchase Agreement
dated as of December __, 2002 (the "Purchase Agreement") among the Fund, PIMCO
Advisors Fund Management LLC (the "Investment Manager") and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ________, as representatives of the
underwriters listed on Schedule A thereto (the "Underwriters"). Capitalized
terms used in this opinion, unless otherwise defined, have the meanings
specified in the Purchase Agreement.
We have examined signed copies of the registration statement of the
Fund on Form N-2 (File No. 333-100699) under the Securities Act of 1933, as
amended (the "Securities Act"), and under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), including all exhibits thereto, as filed
with the Securities and Exchange Commission (the "Commission") on October 23,
2002 (the "Original Registration Statement"), Pre-Effective Amendment No. 1 to
the Original Registration Statement, including all exhibits thereto, as filed
with the Commission on November 22, 2002 ("Pre-Effective Amendment No. 1") and
Pre-Effective Amendment No. 2 to the Original Registration Statement, including
all exhibits thereto, as filed with the Commission on December __, 2002
("Pre-Effective Amendment No. 2" and, together with the Original Registration
Statement and Pre-Effective Amendment No. 1, the "Registration Statement"); the
Fund's Notification of Registration on Form N-8A (File No. 811-21238) under the
Investment Company Act, as filed with the Commission on October 23, 2002 (the
"Notification of Registration"); the Fund's Registration Statement on Form 8-A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
filed with the Commission on November 25, 2002 (the "Exchange Act Registration
Statement"); the Fund's Agreement and Declaration of Trust, as amended to the
date hereof (the "Declaration of Trust"), on file in the offices of the
Secretary of State of The Commonwealth of Massachusetts and the Clerk of the
City of Boston; the By-laws of the Fund, as amended to the date hereof (the
"By-laws"); a copy of the Prospectus dated December __, 2002, relating to the
Shares and the Statement of Additional Information of the Fund dated December
__, 2002, each as filed with the Commission pursuant to Rule 497 under the
Securities Act on December __, 2002 (together, the "Prospectus"); the Investment
Management Agreement dated as of November 19, 2002, between the Fund and the
Investment Manager (the "Investment Management
A-1
Agreement"); the Portfolio Management Agreement dated as of November 19, 2002,
between Pacific Investment Management Company LLC (the "Portfolio Manager") and
the Investment Manager (the "Portfolio Management Agreement"), as agreed to and
accepted by the Fund; the Custodian Agreement dated as of December __, 2002,
between the Fund and State Street Bank and Trust Company (the "Custodian
Agreement"); and the Transfer Agency Services Agreement dated as of December __,
2002, between the Fund and PFPC Inc. (the "Transfer Agency Agreement," and,
together with the Custodian Agreement, the "Fund Agreements"); and the Purchase
Agreement. Additionally, we have relied [upon the order of the Commission
pursuant to Section 8(a) of the Securities Act declaring the Registration
Statement effective as of [ ____] on December __, 2002, and] upon the oral
representation of ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇ of the Commission staff to the effect that the
Exchange Act Registration Statement and the Registration Statement became
effective as of 12:15 p.m. on December __, 2002; a letter dated November 27,
2002, from ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President, Corporate Listings and
Compliance of the New York Stock Exchange, authorizing the Shares for listing on
such Exchange; and the oral representation by a member of the Commission staff
on the date hereof that as of [8:10] a.m., no stop order suspending the
effectiveness of the Registration Statement had been issued and no proceeding
for any such purpose was pending or threatened.
We have also examined and relied upon the original or copies of written
consents of shareholders and the Board of Trustees of the Fund and copies of
resolutions of the Board of Trustees of the Fund certified by the Secretary of
the Fund, the documents delivered to the Underwriters by the Fund, the
Investment Manager and the Portfolio Manager dated as of the date hereof
pursuant to the Purchase Agreement and such other documents, including
certificates of officers of the Fund, as we have deemed necessary for purposes
of rendering our opinions below. For purposes of paragraph 2 below, we have
relied solely on (1) the certificate of recent date of the Secretary of State of
the State of California as to the entitlement of the Fund to transact intrastate
business in the State of California, (2) a Certificate of the Special Deputy
Secretary of State of the State of New York dated December 5, 2002, certifying
copies of (a) a Certificate of Designation by the Fund dated November 26, 2002
and (b) a Statement under Section 18 of the New York General Associations Law,
(3) a Filing Receipt of the Department of State of the State of New York dated
December 2, 2002 relating to the Fund and (4) a Certificate dated December __,
2002 of the Special Deputy Secretary of State of the State of New York
certifying that the Fund filed a Certificate of Designation in the Department of
State of the State of New York on December 2, 2002. We have assumed the
genuineness of the signatures on all documents examined by us, the authenticity
of all documents submitted to us as originals and the conformity to the
corresponding originals of all documents submitted to us as copies. For purposes
of our opinions regarding the effectiveness of the Registration Statement and
the Exchange Act Registration Statement, we are relying solely on the oral
representations of the Commission staff.
We express no opinion as to the laws of any jurisdiction other than The
Commonwealth of Massachusetts and the United States of America. We call your
attention to the fact that the Purchase Agreement provides that it is to be
governed by and construed in accordance with the laws of the State of New York
and the Transfer Agency Agreement provides that it is to be governed by and
construed in accordance with the laws of the State of Delaware, and to the fact
that the Investment Management Agreement does not provide that it is to be
governed by the laws of any particular jurisdiction. In rendering the opinion as
to enforceability expressed in paragraph 5 below, we have limited the scope of
our opinion to the conclusions that would be reached by a Massachusetts court
that had determined that each of the Fund Agreements and the Investment
Management Agreement would be governed by, and construed in accordance with, the
internal laws of The Commonwealth of Massachusetts. Further, we express no
opinion as to the state securities or Blue Sky laws of any jurisdiction,
including The Commonwealth of Massachusetts.
A-2
For purposes of our opinion set forth in paragraph 2 below with respect
to the power and authority of the Fund to own, lease and operate its properties
and conduct its business, we have relied upon certificates of officers of the
Fund as to the states in which the Fund leases or owns real property or in which
it conducts material operations.
Insofar as this opinion relates to factual matters, we have made
inquiries to officers of the Fund, the Investment Manager and the Portfolio
Manager to the extent we believe reasonable with respect to such matters and
have relied inter alia upon representations made by the Fund and the Investment
Manager in the Purchase Agreement, representations made by the Portfolio Manager
to the Investment Manager and representations made to us by one or more officers
of the Fund, the Investment Manager or the Portfolio Manager. We have not
independently verified the accuracy of such representations. Where our opinion
relates to our "knowledge," that term means the conscious awareness of facts or
other information by any lawyer in our firm giving substantive attention to the
representation of the Fund with respect to the transactions contemplated by the
Purchase Agreement, and does not require or imply (i) any examination of this
firm's, any such lawyer's or any other person's or entity's files, or (ii) that
any inquiry was made of any lawyer (other than the lawyers described above). In
respect of our opinions set forth in paragraphs 4, 7, 9 and 11 below, we have
not searched the dockets of any court, administrative body or other filing
office in any jurisdiction.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Registration Statement and all post-effective amendments on or
before the Closing Time, if any, are effective under the Securities Act; the
filing of the Prospectus pursuant to Rule 497 under the Securities Act has been
made in the manner and within the time period required by Rule 497; and based
upon oral inquiries to the Commission staff on the date hereof, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceeding for any such purpose is pending or threatened by the Commission.
2. The Fund has been duly organized and is validly existing and in good
standing as an unincorporated voluntary association under and by virtue of the
laws of The Commonwealth of Massachusetts and has full power and authority to
own or lease its properties and to conduct its business as described in the
Registration Statement and the Prospectus. The Certificate of Designation
relating to the Fund's conduct of business in the State of New York is on file
with the Department of State of the State of New York, and the Fund is entitled
to transact intrastate business in the State of California.
3. The Fund's authorized capitalization is as set forth in the
Registration Statement and the Prospectus. The Fund has an indefinite number of
authorized common shares of beneficial interest, par value $0.00001 per share.
The Shares conform in all material respects as to legal matters to the
description of them under the section entitled "Description of Shares" in the
Prospectus. 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 penultimate paragraph of this opinion letter, non-assessable, and
the 6,981 common shares of beneficial interest issued to the Investment Adviser
on November 19, 2002 have been issued in one or more transactions exempt from
the registration requirements of the Securities Act. The Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms of the Purchase Agreement, will be validly
issued, fully paid and, subject to the penultimate paragraph of this opinion
letter, non-assessable. Except as contemplated by the Purchase Agreement, no
person is entitled to any preemptive or other similar rights with respect to the
Shares.
4. The Fund was deemed to be registered under Section 8(a) of the
Investment Company Act upon receipt by the Commission of the Notification of
Registration. To our knowledge, the
A-3
Commission has not issued to the Fund notice of any hearing or other proceeding
to consider suspension or revocation of any such registration statement. All
required action has been taken by the Fund under the Securities Act, the
Investment Company Act and the rules and regulations thereunder in connection
with the issuance and sale of the Shares to make the public offering and
consummate the sale of the Shares pursuant to the Purchase Agreement.
5. 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 of the Fund Agreements has been duly and validly authorized,
executed and delivered by the Fund. Each of the Fund Agreements, the Investment
Management Agreement and the Portfolio Management Agreement complies in all
material respects with all applicable provisions of the Investment Company Act
and the Investment Advisers Act of 1940, as amended, as the case may be, 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 in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles (regardless of whether enforceability is considered in a proceeding
in equity or at law).
6. The Fund has full power and authority to enter into each of the
Investment Management Agreement and the Purchase Agreement and to perform all of
the terms and provisions thereof to be carried out by it. The Investment
Management Agreement and the Purchase Agreement have been duly and validly
authorized, executed and delivered by the Fund. Assuming due authorization,
execution and delivery by the other party thereto, the Investment Management
Agreement constitutes the legal, valid and binding obligation of the Fund
enforceable 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).
7. None of (a) the execution and delivery by the Fund of the Investment
Management Agreement, the Purchase Agreement or any of the Fund Agreements, (b)
the issue and sale by the Fund of the Shares as contemplated by the Purchase
Agreement and (c) the performance by the Fund of its obligations under the
Investment Management Agreement, the Purchase Agreement or any of the Fund
Agreements or consummation by the Fund of the other transactions contemplated by
the Investment Management Agreement, the Purchase Agreement or any of the Fund
Agreements conflicts or will conflict with, or results or will result in a
breach of, or the creation or imposition of any lien, charge or encumbrance upon
any assets or property of the Fund pursuant to, the Declaration of Trust or the
By-laws or, to our knowledge, any agreement or instrument to which the Fund is a
party or by which the Fund is bound or to which its property is subject, 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 that is applicable to the Fund and that is known to
us, which violation would have a material adverse effect on the condition or
business of the Fund.
8. To our knowledge, the Fund is not in breach of, or in default under,
its Declaration of Trust or By-laws, or any material written agreement or
instrument to which it is a party or by which it or its property is bound or
affected.
9. No consent, approval, authorization or order of 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 the Investment Management
A-4
Agreement, the Purchase Agreement and the Fund Agreements, except such as (a)
have been obtained under the Securities Act, the Investment Company Act or the
Exchange Act and (b) may be required by the New York Stock Exchange or the
National Association of Securities Dealers, Inc. or under state securities or
Blue Sky laws in connection with the purchase and distribution of the Shares by
the Underwriters pursuant to the Purchase Agreement.
10. To our knowledge, based upon a letter dated November 27, 2002, from
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President, Corporate Listings and Compliance
of the New York Stock Exchange, authorizing the Shares for listing on such
Exchange, the Shares have been authorized for listing on the New York Stock
Exchange, subject to official notice of issuance, and to our knowledge after due
inquiry, including oral inquiries of the Commission staff on December __, 2002,
the Exchange Act Registration Statement has become effective.
11. To our knowledge, there are no legal, governmental or court
proceedings pending or threatened against the Fund, or to which the Fund or any
of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus but are not described therein as
required.
12. To our knowledge, there are no agreements, contracts, indentures,
leases or other instruments that are required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit to the
Registration Statement which have not been so described or filed as an exhibit
or incorporated therein by reference.
13. Each of the sections in the Prospectus entitled "Tax Matters," to
the extent that it states matters of United States law or legal conclusions with
respect thereto, presents a fair and accurate summary of the principal federal
income tax rules currently in effect applicable to the Fund and to the purchase,
ownership and disposition of the Shares.
14. The Registration Statement (except for the financial statements and
schedules, the notes thereto and any schedules and other financial data
contained or incorporated by reference therein or omitted therefrom, as to which
we express no opinion), at the effective time set forth above, and the
Prospectus (except as aforesaid), as of the date thereof, complied as to form in
all material respects with the applicable requirements of the Securities Act and
the Investment Company Act and the rules and regulations thereunder, and the
Notification of Registration, when filed with the Commission, complied as to
form in all material respects with the applicable requirements of the Investment
Company Act and the rules and regulations thereunder.
We have not independently verified the accuracy, completeness or
fairness of the statements made or the information contained in the Registration
Statement or the Prospectus and, except in the respects and to the extent set
forth in paragraphs 3, 13 and 14 above, we are not passing upon and do not
assume any responsibility therefor. In the course of the preparation by the Fund
of the Registration Statement and the Prospectus, we have participated in
discussions with your representatives and employees and officers of the Fund,
the Investment Manager and the Portfolio Manager and in discussions with the
Fund's independent accountants, in which the business and the affairs of the
Fund, the Investment Manager and the Portfolio Manager and the contents of the
Registration Statement and the Prospectus were discussed. There is no assurance
that all material facts as to the Fund, the Investment Manager, the Portfolio
Manager and their affairs were disclosed to us or that our familiarity with the
Fund and the Investment Manager or any familiarity with the Portfolio Manager is
such that we would have necessarily recognized the materiality of such facts as
were disclosed to us, and we have to a large extent relied upon statements of
representatives of the Fund, the Investment Manager and the Portfolio Manager as
to the materiality of the facts disclosed to us. On the basis of information
that we have gained in the course of our representation of the Fund in
connection with its preparation of the Registration Statement
A-5
and the Prospectus and our participation in the discussions referred to above,
no facts have come to our attention that would lead us to believe that, as of
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, or that as of the date of the Prospectus and
the date hereof the Prospectus contained an untrue statement of material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light, in each case, of the circumstances under
which they were made, not misleading (in each case, other than the financial
statements and schedules, the notes thereto and any schedules and other
financial data contained or incorporated by reference therein or omitted
therefrom, as to which we express no opinion).
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Fund's Declaration of Trust disclaims shareholder liability for
acts or obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation, and instrument entered into or executed by
the Fund or the Trustees. The Declaration of Trust provides for indemnification
out of the property of the Fund for all loss and expense of any shareholder held
personally liable solely by reason of being or having been a shareholder of the
Fund. Thus, the risk of a shareholder's incurring financial loss on account of
being a shareholder is limited to circumstances in which the Fund itself would
be unable to meet its obligations.
This letter and the opinions expressed herein are furnished by us to
you and are solely for benefit of the Underwriters, except that ▇▇▇▇▇▇▇▇ Chance
US LLP may rely on this letter as to all matters governed by the laws of The
Commonwealth of Massachusetts in delivering its opinion to you on the date
hereof.
Very truly yours,
Ropes & ▇▇▇▇
* * * * *
A-6
December __, 2002
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
As Representatives of the Several Underwriters listed on
Schedule A to the Purchase Agreement
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel to PIMCO Corporate Opportunity Fund (the
"Fund") in connection with the proposed issuance of _______ common shares of
beneficial interest, with a par value of $0.00001 per share (the "Shares"). As
an accommodation to the Fund, we are also rendering this opinion on behalf of
PIMCO Advisors Fund Management LLC (the "Investment Manager") solely with
respect to the regulatory matters referred to below. This opinion is furnished
to you pursuant to Section 5(b) of the Purchase Agreement dated as of December
__, 2002 (the "Purchase Agreement") among the Fund, the Investment Manager and
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated and ________, as
representatives of the underwriters listed on Schedule A thereto (the
"Underwriters"). Capitalized terms used in this opinion, unless otherwise
defined, have the meanings specified in our opinion of even date rendered on
behalf of the Fund (the "Fund Opinion").
Solely for purposes of this opinion, we have assumed that each of the
Investment Management Agreement and the Portfolio Management Agreement has been
duly authorized, executed and delivered and constitutes a legal, valid and
binding obligation of the parties thereto in accordance with its respective
terms, and that the descriptions of the Investment Management Agreement and the
Portfolio Management Agreement in the Registration Statement are accurate and
complete in all respects. We have also, with your permission and without
independent investigation of the matters set forth therein, relied on the
opinions of even date herewith of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq., Chief Legal
Officer of the Investment Manager.
We express no opinion as to the laws of any jurisdiction other than the
United States of America.
Based upon and subject to the foregoing, we are of the opinion that:
1. Assuming the Investment Manager is duly registered as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and is not prohibited by the Advisers Act or the Investment Company Act
of 1940, as amended (the "Investment Company Act"), from acting as investment
adviser for the Fund as contemplated by the Investment Management Agreement, the
Registration Statement and the Prospectus, neither the execution and delivery of
the Purchase Agreement, the Investment Management Agreement or the Portfolio
Management Agreement by the Investment Manager, nor the consummation by the
Investment Manager of the transactions contemplated thereby, nor compliance by
the Investment Manager with any of the terms and provisions thereof will violate
the
A-7
provisions of the Investment Company Act, the Advisers Act, or the rules and
regulations thereunder; provided, however, that the foregoing does not represent
an opinion as to (a) the reasonableness of the fees to be paid to the Investment
Manager under the Investment Management Agreement or (b) the compliance by the
Investment Manager with its indemnification and contribution obligations set
forth in the Purchase Agreement.
2. Assuming the Portfolio Manager is duly registered as an investment
adviser under the Advisers Act, and is not prohibited by the Advisers Act or the
Investment Company Act from acting as portfolio manager for the Fund as
contemplated by the Portfolio Management Agreement, the Registration Statement
and the Prospectus, neither the execution and delivery of the Portfolio
Management Agreement by the Portfolio Manager, nor the consummation by the
Portfolio Manager of the transactions contemplated thereby, nor compliance by
the Portfolio Manager with any of the terms and provisions thereof will violate
the provisions of the Investment Company Act, the Advisers Act or the rules and
regulations thereunder; provided, however, that the foregoing does not represent
an opinion as to the reasonableness of the fees to be paid to the Portfolio
Manager under the Portfolio Management Agreement.
This letter and the opinions expressed herein are furnished by us to
you and are solely for benefit of the Underwriters.
Very truly yours,
Ropes & ▇▇▇▇
▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF OPINION OF ADVISER'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
As Representatives of the Several Underwriters listed on
Schedule A to the Purchase Agreement
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: PIMCO Advisors Fund Management LLC
Ladies and Gentlemen:
I am the Chief Legal Officer of PIMCO Advisors Fund Management LLC, a
Delaware limited liability company ("PAFM"), and have counseled PAFM in such
capacity in connection with the sale to you by PIMCO Corporate Opportunity Fund,
a voluntary association with transferable shares organized and existing under
and by virtue of the laws of The Commonwealth of Massachusetts (commonly
referred to as a Massachusetts business trust) (the "Fund"), of an aggregate of
______________ common shares of beneficial interest, par value $0.00001 per
share, of the Fund, pursuant to a registration statement on Form N-2 under the
Securities Act of 1933, as amended (the "Act") and the Investment Company Act of
1940, as amended (the "Investment Company Act"), filed with the Securities and
Exchange Commission (the "Commission") on October 23, 2002 (Act File No.
333-100699, and Investment Company Act File No. 811-21238), as amended by
Pre-Effective Amendment No. 1 filed with the Commission on November 22, 2002 and
Pre-Effective Amendment No. 2 filed with the Commission on December ___, 2002
(such registration statements collectively referred to herein as the
"Registration Statement"), and a purchase agreement dated December __, 2002 by
and among you, the Fund and PAFM (the "Purchase Agreement").
This opinion is rendered to you pursuant to Section 5(b) of the
Purchase Agreement. Capitalized terms used herein without definition have the
meanings assigned to them in the Purchase Agreement.
A-9
As such legal officer, I have examined such matters of fact and
questions of law as I have considered appropriate for purposes of rendering the
opinions expressed below, except where a statement is qualified as to knowledge
or awareness, in which case I have made no or limited inquiry as specified
below. I have examined, among other things, the following:
(a) the Purchase Agreement;
(b) that certain Investment Management Agreement by and between
the Fund and PAFM, dated as of November 19, 2002;
(c) that certain Portfolio Management Agreement by and between
Pacific Investment Management Company LLC and PAFM, as
accepted and agreed to by the Fund, dated as of November 19,
2002; and
(d) that certain Additional Compensation Agreement with respect to
the Fund by and between PAFM and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated, dated as of December __, 2002.
The documents described in subsections (a)-(d) above are referred to
herein collectively as the "Transaction Documents."
In my examination, I have assumed the genuineness of all signatures
(other than those of officers of PAFM on the Transaction Documents), the
authenticity of all documents submitted to me as originals, and the conformity
to authentic original documents of all documents submitted to me as copies.
I have been furnished with, and with your consent have relied upon,
certificates of officers of PAFM with respect to certain factual matters. In
addition, I have obtained and relied upon such certificates and assurances from
public officials as I have deemed necessary.
I am opining herein as to the effect of the federal laws of the United
States, the internal laws of the State of New York and the internal laws of the
State of Delaware, and I express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other jurisdiction or country
or as to any matters of municipal law or the laws of any other local agencies
within any state or country. My opinions set forth in paragraph 4 below are
based upon my consideration of only those statutes, rules and regulations which,
in my experience, are normally applicable to transactions similar to those
contemplated by the Transaction Documents, generally.
Whenever a statement herein is qualified by "to my knowledge" or a
similar phrase, it is intended to indicate that I do not have current actual
knowledge of the inaccuracy of such statement. However, except as otherwise
expressly indicated, I have not undertaken any independent investigation to
determine the accuracy of any such statement, and no inference that I have any
knowledge of any matters pertaining to such statement should be drawn from my
position as Chief Legal Officer of PAFM.
Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:
1. PAFM is a limited liability company and is validly existing and in
good standing under the Delaware Limited Liability Company Act (6 Del. C ss..
18-101, et seq.) with all necessary limited liability company power and
authority to enter into and deliver the Transaction Documents and perform its
obligations thereunder and to carry on its business as it is now being conducted
and as described in the Registration Statement. Based on certificates from
public officials, I confirm that PAFM is qualified to
A-10
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 would have a material adverse effect on the ability of PAFM to perform
its obligations under the Investment Management Agreement and the Portfolio
Management Agreement.
2. The execution, delivery and performance of the Transaction Documents
by PAFM have been duly authorized by all necessary limited liability company
action of PAFM and no other actions on the part of PAFM or its unitholders or
any subsidiary of PAFM or its unitholders is necessary to authorize and
consummate the transactions contemplated thereby, and the Transaction Documents
have been duly executed and delivered by PAFM.
3. Each of the Investment Management Agreement, the Portfolio
Management Agreement and the Additional Compensation Agreement constitutes a
legally valid and binding agreement of PAFM, enforceable against PAFM in
accordance with its terms.
4. Neither the execution and delivery of the Transaction Documents by
PAFM, nor the consummation by PAFM of transactions contemplated thereby, nor
compliance by PAFM with any of the terms and provisions thereof will:
(i) violate any provision of the Limited Liability Company
Agreement of PAFM, effective May 23, 2000, as amended on July 1, 2001,
December 12, 2001, and October 31, 2002, which is still in full force
and effect and which has not been further amended or supplemented
through the date hereof,
(ii) violate any federal, Delaware or New York statute, rule
or regulation applicable to PAFM (other than federal and state
securities or blue sky laws, the Investment Company Act and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), as to
which I express no opinion),
(iii) violate any agreement to which PAFM is a party or by
which it is bound and which is material to PAFM's businesses taken as a
whole (the "Material Agreements"),
(iv) violate any order, writ, injunction or decree, known to
me and applicable to PAFM, or
(v) to the best of my knowledge, require any consents,
approvals, authorizations, registrations, declarations or filings by
PAFM under any federal or Delaware statute, rule or regulation
applicable to PAFM, except as have been obtained under the Act, the
Investment Company Act or the Advisers Act.
No opinion is expressed in this paragraph 4 as to the
application of Section 548 of the federal Bankruptcy Code and comparable
provisions of state or foreign law or of any antifraud laws, antitrust or trade
regulation laws. No opinion is expressed in this paragraph 4 with respect to the
operating licenses necessary for PAFM's businesses.
5. PAFM is duly registered as an investment adviser under the Advisers
Act and is not prohibited by the Advisers Act or the Investment Company Act from
acting as investment adviser for the Fund as contemplated by the Investment
Management Agreement, the Registration Statement and the Prospectus.
A-11
6. The description of PAFM and its business, and the statements
attributable to PAFM, set forth in the Registration Statement or the Prospectus
under the headings "Prospectus Summary--Investment Manager," "Management of the
Fund" and "Investment Manager and Portfolio Manager" 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 (with
respect to the Prospectus, in light of the circumstances under which they were
made) not misleading
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to my knowledge, threatened
against PAFM of a nature required to be disclosed in the Registration Statement
or Prospectus or that might reasonably result in any material adverse change in
the ability of PAFM to fulfill its obligations under any of the Transaction
Documents.
The opinions expressed in paragraph 3 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the rights or remedies of creditors generally;
(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought;
(c) the unenforceability under certain circumstances under law
or court decisions of provisions providing for the indemnification of
or contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy; and
(d) the unenforceability of any provision requiring the
payment of attorney's fees, except to the extent that a court
determines such fees to be reasonable.
In rendering the opinions expressed in paragraph 4 insofar as they
require interpretation of the Material Agreements (i) I have assumed with your
permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the internal laws
of any other state and (ii) to the extent that any questions of legality or
legal construction have arisen in connection with my review, I have applied the
laws of the State of New York in resolving such questions. I advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.
To the extent that the obligations of PAFM may be dependent upon such
matters, I assume for purposes of this opinion that: (i) all parties to the
Transaction Documents other than PAFM are duly incorporated or organized,
validly existing and in good standing under the laws of their respective
jurisdictions of incorporation or organization; (ii) all parties to the
Transaction Documents other than PAFM have the requisite power and authority
and, in the case of natural persons, legal capacity to execute and deliver the
Transaction Documents and to perform their respective obligations under the
Transaction Documents to which they are a party; and (iii) the Transaction
Documents to which such parties other than PAFM are a party have been duly
authorized, executed and delivered by such parties and, other than PAFM,
constitute their legally valid and binding obligations, enforceable against them
in accordance with
A-12
their terms. I express no opinion as to compliance by any parties to the
Transaction Documents with any state or federal laws or regulations applicable
to the subject transactions because of the nature of their business and I
express no opinion as to compliance by any parties to the Transaction Documents
with any foreign laws or regulations applicable to the transactions contemplated
by the Transaction Documents or which may affect the Transaction Documents'
enforceability.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
* * * * *
▇-▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
As Representatives of the Several Underwriters listed on
Schedule A to the Purchase Agreement
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Pacific Investment Management Company LLC
Ladies and Gentlemen:
I am the Chief Legal Officer of PIMCO Advisors Fund Management LLC, a
Delaware limited liability company ("PAFM"). PAFM is an affiliate of and under
common control with Pacific Investment Management Company LLC, a Delaware
limited liability company ("PIMCO"). I have discussed the matters covered by
this opinion with internal counsel at PIMCO. In my capacity as Chief Legal
Officer of PAFM, I am rendering this opinion on behalf of PIMCO in connection
with the sale to you by PIMCO Corporate Opportunity Fund, a voluntary
association with transferable shares organized and existing under and by virtue
of the laws of The Commonwealth of Massachusetts (commonly referred to as a
Massachusetts business trust) (the "Fund"), of an aggregate of ______________
common shares of beneficial interest, par value $0.00001 per share, of the Fund,
pursuant to a registration statement on Form N-2 under the Securities Act of
1933, as amended (the "Act") and the Investment Company Act of 1940, as amended
(the "Investment Company Act"), filed with the Securities and Exchange
Commission (the "Commission") on October 23, 2002 (Act File No. 333-100699, and
Investment Company Act File No. 811-21238), as amended by Pre-Effective
Amendment No. 1 filed with the Commission on November 22, 2002 and Pre-Effective
Amendment No. 2 filed with the Commission on December __, 2002 (such
registration statements collectively referred to herein as the "Registration
Statement"), and a purchase agreement dated December __, 2002 by and among you,
the Fund and PAFM (the "Purchase Agreement").
This opinion is rendered to you pursuant to Section 5(b) of the
Purchase Agreement. Capitalized terms used herein without definition have the
meanings assigned to them in the Purchase Agreement.
As Chief Legal Officer of PAFM, I have examined such matters of fact
and questions of law as I have considered appropriate for purposes of rendering
the opinions expressed below, except where a statement is qualified as to
knowledge or awareness, in which case I have made no or limited inquiry as
specified below. I have examined, among other things, that certain Portfolio
Management Agreement by
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and between PIMCO and PAFM, as accepted and agreed to by the Fund, dated as of
November 19, 2002 (the "Portfolio Management Agreement").
In my examination, I have assumed the genuineness of all signatures
(other than those of officers of PIMCO on the Portfolio Management Agreement),
the authenticity of all documents submitted to me as originals, and the
conformity to authentic original documents of all documents submitted to me as
copies.
I have been furnished with, and with your consent have relied upon,
certificates of officers of PIMCO with respect to certain factual matters. In
addition, I have obtained and relied upon such certificates and assurances from
public officials as I have deemed necessary.
I am opining herein as to the effect of the federal laws of the United
States, the internal laws of the State of New York and the internal laws of the
State of Delaware, and I express no opinion with respect to the applicability
thereto, or the effect thereon, of the laws of any other jurisdiction or country
or as to any matters of municipal law or the laws of any other local agencies
within any state or country. My opinions set forth in paragraph 4 below are
based upon my consideration of only those statutes, rules and regulations which,
in my experience, are normally applicable to transactions similar to those
contemplated by the Portfolio Management Agreement, generally.
Whenever a statement herein is qualified by "to my knowledge" or a
similar phrase, it is intended to indicate that I do not have current actual
knowledge of the inaccuracy of such statement. However, except as otherwise
expressly indicated, I have not undertaken any independent investigation to
determine the accuracy of any such statement, and no inference that I have any
knowledge of any matters pertaining to such statement should be drawn from my
position as Chief Legal Officer of PAFM.
Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:
1. PIMCO is a limited liability company and is validly existing and in
good standing under the Delaware Limited Liability Company Act (6 Del. C ss..
18-101, et seq.) with all necessary limited liability company power and
authority to enter into and deliver the Portfolio Management Agreement and
perform its obligations thereunder and to carry on its business as it is now
being conducted and as described in the Registration Statement. Based on
certificates from public officials, I confirm that PIMCO is qualified to do
business in the following States: California and New York, such States being
those in which its ownership or leasing of property or its conducting of
business may require such qualification and where failure to so qualify would
have a material adverse effect on the ability of PIMCO to perform its
obligations under the Portfolio Management Agreement.
2. The execution, delivery and performance of the Portfolio Management
Agreement by PIMCO have been duly authorized by all necessary limited liability
company action of PIMCO and no other actions on the part of PIMCO or its
unitholders or any subsidiary of PIMCO or its unitholders is necessary to
authorize and consummate the transactions contemplated thereby, and the
Portfolio Management Agreement has been duly executed and delivered by PIMCO.
3. The Portfolio Management Agreement constitutes a legally valid and
binding agreement of PIMCO, enforceable against PIMCO in accordance with its
terms.
4. Neither the execution and delivery of the Portfolio Management
Agreement by PIMCO, nor the consummation by PIMCO of transactions contemplated
thereby, nor compliance by PIMCO with any of the terms and provisions thereof
will:
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(i) violate any provision of the Limited Liability Company
Agreement of PIMCO, effective May 5, 2000,
(ii) violate any federal, Delaware or New York statute, rule
or regulation applicable to PIMCO (other than federal and state
securities or blue sky laws, the Investment Company Act and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), as to
which I express no opinion),
(iii) violate any agreement to which PIMCO is a party or by
which it is bound and which is material to PIMCO's businesses taken as
a whole (the "Material Agreements"),
(iv) violate any order, writ, injunction or decree, known to
me and applicable to PIMCO, or
(v) to the best of my knowledge, require any consents,
approvals, authorizations, registrations, declarations or filings by
PIMCO under any federal statute, rule or regulation applicable to
PIMCO, except as have been obtained under the Act, the Investment
Company Act or the Advisers Act.
No opinion is expressed in this paragraph 4 as to the
application of Section 548 of the federal Bankruptcy Code and comparable
provisions of state or foreign law or of any antifraud laws, antitrust or trade
regulation laws. No opinion is expressed in this paragraph 4 with respect to the
operating licenses necessary for PIMCO's businesses.
5. PIMCO is duly registered as an investment adviser under the Advisers
Act and is not prohibited by the Advisers Act or the Investment Company Act from
acting as investment sub-adviser for the Fund as contemplated by the Portfolio
Management Agreement, the Registration Statement and the Prospectus.
6. The description of PIMCO and its business, and the statements
attributable to PIMCO, set forth in the Registration Statement and the
Prospectus under the headings "Prospectus Summary--Portfolio Manager,"
"Management of the Fund" and "Investment Manager and Portfolio Manager" 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 (with respect to the Prospectus, in light of the circumstances under
which they were made) not misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to my knowledge, threatened
against PIMCO of a nature required to be disclosed in the Registration Statement
or Prospectus or that might reasonably result in any material adverse change in
the ability of PIMCO to fulfill its obligations under the Portfolio Management
Agreement.
The opinions expressed in paragraph 3 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the rights or remedies of creditors generally;
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(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought;
(c) the unenforceability under certain circumstances under law
or court decisions of provisions providing for the indemnification of
or contribution to a party with respect to a liability where such
indemnification or contribution is contrary to public policy; and
(d) the unenforceability of any provision requiring the
payment of attorney's fees, except to the extent that a court
determines such fees to be reasonable.
In rendering the opinions expressed in paragraph 4 insofar as they
require interpretation of the Material Agreements (i) I have assumed with your
permission that all courts of competent jurisdiction would enforce such
agreements as written but would apply the internal laws of the State of New York
without giving effect to any choice of law provisions contained therein or any
choice of law principles which would result in application of the internal laws
of any other state and (ii) to the extent that any questions of legality or
legal construction have arisen in connection with my review, I have applied the
laws of the State of New York in resolving such questions. I advise you that
certain of the Material Agreements may be governed by other laws, that such laws
may vary substantially from the law assumed to govern for purposes of this
opinion, and that this opinion may not be relied upon as to whether or not a
breach or default would occur under the law actually governing such Material
Agreements.
To the extent that the obligations of PIMCO may be dependent upon such
matters, I assume for purposes of this opinion that: (i) all parties to the
Portfolio Management Agreement other than PIMCO are duly incorporated or
organized, validly existing and in good standing under the laws of their
respective jurisdictions of incorporation or organization; (ii) all parties to
the Portfolio Management Agreement other than PIMCO have the requisite power and
authority and, in the case of natural persons, legal capacity to execute and
deliver the Portfolio Management Agreement and to perform their respective
obligations under the Portfolio Management Agreement; and (iii) the Portfolio
Management Agreement has been duly authorized, executed and delivered by such
parties other than PIMCO and, other than PIMCO, constitutes their legally valid
and binding obligations, enforceable against them in accordance with their
terms. I express no opinion as to compliance by any parties to the Portfolio
Management Agreement with any state or federal laws or regulations applicable to
the subject transactions because of the nature of their business and I express
no opinion as to compliance by any parties to the Portfolio Management Agreement
with any foreign laws or regulations applicable to the transactions contemplated
by the Portfolio Management Agreement or which may affect the Portfolio
Management Agreement's enforceability.
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not be relied
upon by you for any other purpose, or furnished to, quoted to or relied upon by
any other person, firm or corporation for any purpose, without my prior written
consent.
Very truly yours,
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