1 |
NAMES
OF REPORTING PERSONS
| ||||
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
| |||||
BANK OF AMERICA CORP /DE/ 56-0906609 | |||||
2 |
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
| (a) | o | ||
(b) | x | ||||
3 |
SEC
USE ONLY
| ||||
4 |
SOURCE
OF FUNDS
| ||||
WC | |||||
5 |
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(e)
or 2(f)
| x | |||
6 |
CITIZENSHIP
OR PLACE OF ORGANIZATION
| ||||
Delaware | |||||
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
| 7 |
SOLE
VOTING POWER
| |||
0 | |||||
8 |
SHARED
VOTING POWER
| ||||
750 | |||||
9 |
SOLE
DISPOSITIVE POWER
| ||||
0 | |||||
10 |
SHARED
DISPOSITIVE POWER
| ||||
750 | |||||
11 |
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| ||||
750 | |||||
12 |
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
| o | |||
13 |
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| ||||
100%
| |||||
14 |
TYPE
OF REPORTING PERSON
| ||||
HC | |||||
1 |
NAMES
OF REPORTING PERSONS
| ||||
I.R.S.
IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
| |||||
Banc of America Preferred Funding Corporation 75-2939570 | |||||
2 |
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
| (a) | o | ||
(b) | x | ||||
3 |
SEC
USE ONLY
| ||||
4 |
SOURCE
OF FUNDS
| ||||
WC | |||||
5 |
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(e)
or 2(f)
| o | |||
6 |
CITIZENSHIP
OR PLACE OF ORGANIZATION
| ||||
Delaware | |||||
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
| 7 |
SOLE
VOTING POWER
| |||
0 | |||||
8 |
SHARED
VOTING POWER
| ||||
750 | |||||
9 |
SOLE
DISPOSITIVE POWER
| ||||
0 | |||||
10 |
SHARED
DISPOSITIVE POWER
| ||||
750 | |||||
11 |
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
| ||||
750 | |||||
12 |
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
| o | |||
13 |
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
| ||||
100%
| |||||
14 |
TYPE
OF REPORTING PERSON
| ||||
CO | |||||
Item 1. | Security and Issuer |
This Amendment No. 2 (this "Amendment") amends, as set forth below, the statement on Schedule 13D, dated June 17, 2019 and filed with the SEC on June 27, 2019 (the "Original Schedule 13D"), as amended by Amendment No. 1 dated November 18, 2019 and filed with the SEC on November 20, 2019 ("Amendment No. 1"), for Bank of America Corporation ("BAC") and Banc of America Preferred Funding Corporation ("BAPFC") (collectively, the "Reporting Persons") with respect to the variable rate munifund term preferred shares ("VMTP Shares") of PIMCO Flexible Municipal Income Fund (the "Issuer").
This Amendment is being filed as a result of the purchase of VMTP Shares described as the Remarketable Variable Rate MuniFund Term Preferred Shares, Series 2050-A (the “2050-A RVMTP Shares”) of the Issuer (CUSIP No. 72203E707) in the amount of 250 shares purchased by BAPFC. In addition to the 2050-A RVMTP Shares, BAPFC holds 250 VMTP Shares, Series 2022 (CUSIP No. 72203E400) and 250 2049-A RVMTP Shares (CUSIP No. 72203E509). |
Item 2. | Identity and Background |
(a) | Item 2 of the Original Schedule 13D is hereby amended by:
deleting Schedule I and Schedule II referenced therein and replacing them with Schedule I and Schedule II included with this Amendment. |
(b) |
(c) |
(d) |
(e) |
(f) |
Item 3. |
Source
and Amount of Funds or Other Consideration
|
Item 3 of the Original Schedule 13D is hereby amended by adding the following paragraph at the end thereof:
"The Reporting Persons purchased 250 2050-A RVMTP Shares (CUSIP No. 72203E707) from the Issuer (the "Series 2050-A Purchase"). The aggregate amount of funds used by the Reporting Persons for the Series 2050-A Purchase was approximately $25,000,000. The source of funds was the working capital of the Reporting Persons." |
Item 4. |
Purpose
of Transaction
|
Item 4 of the Original Schedule 13D is hereby amended by adding the following paragraph at the end thereof:
"BAPFC made the Series 2050-A Purchase for investment purposes. BAPFC acquired the 2050-A RVMTP Shares (CUSIP No. 72203E707) pursuant to a RVMTP Purchase Agreement, dated April 20, 2020, between the Issuer, BAPFC, and BofA Securities, Inc., as DTC Agent, on their initial issuance for a purchase price of $25,000,000. The Reporting Persons have not acquired the subject securities with any purpose, or with the effect of, changing or influencing control of the Issuer, or in connection with or as a participant in any transaction having that purpose or effect." |
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
(j) |
Item 5. |
Interest
in Securities of the Issuer
|
(a) |
(b) |
(c) |
Transaction Date | Shares or Units Purchased (Sold) | Price Per Share or Unit |
(d) |
(e) |
Item 6. |
Contracts,
Arrangements, Understandings or Relationships with Respect to Securities
of the Issuer
|
Item 6 of the Original Schedule 13D is hereby amended by adding the following at the end of the first paragraph thereof:
"The voting and consent rights on of the 250 2050-A RVMTP Shares acquired in the Series 2050-A Purchase by BAPFC will be treated in the same manner as previously described in this Item 6." |
Item 7. |
Material
to Be Filed as Exhibits
|
Item 7 of the Original Schedule 13D is hereby amended by deleting Exhibit 99.1 and Exhibit 99.2 thereto and the insertion of the following exhibits:
"Exhibit Description of Exhibit 99.1 Joint Filing Agreement 99.2 Power of Attorney 99.8 Registration Rights Agreement, dated April 20, 2020 99.9 RVMTP Purchase Agreement, dated April 20, 2020" |
BANK OF AMERICA CORPORATION | |||
April 22, 2020 | By: |
/s/
Ally Pecarro | |
Attorney-in-fact | |||
BANC OF AMERICA PREFERRED FUNDING CORPORATION | |||
April 22, 2020 | By: |
/s/
Michael Jentis | |
Authorized Signatory | |||
Name
|
Position with Bank of America Corporation
|
Principal Occupation
|
||
Brian T. Moynihan
|
Chairman of the Board, Chief Executive Officer, President and Director
|
Chairman of the Board, Chief Executive Officer, and President of Bank of America Corporation
|
||
Dean C. Athanasia
|
President, Retail and Preferred & Small Business Banking
|
President, Retail and Preferred & Small Business Banking of Bank of America Corporation
|
||
Catherine P. Bessant
|
Chief Operations and Technology Officer
|
Chief Operations and Technology Officer of Bank of America Corporation
|
||
Sheri Bronstein
|
Chief Human Resources Officer
|
Chief Human Resources Officer of Bank of America Corporation
|
||
Paul M. Donofrio
|
Chief Financial Officer
|
Chief Financial Officer of Bank of America Corporation
|
||
Geoffrey Greener
|
Chief Risk Officer
|
Chief Risk Officer of Bank of America Corporation
|
||
Kathleen A. Knox
|
President, Private Bank
|
President, Private Bank of Bank of America Corporation
|
||
David Leitch
|
Global General Counsel
|
Global General Counsel of Bank of America Corporation
|
||
Thomas K. Montag
|
Chief Operating Officer
|
Chief Operating Officer of Bank of America Corporation
|
||
Thong M. Nguyen
|
Vice Chairman
|
Vice Chairman of Bank of America Corporation
|
||
Andrew M. Sieg
|
President, Merrill Lynch Wealth Management
|
President, Merrill Lynch Wealth Management
|
||
Andrea B. Smith
|
Chief Administrative Officer
|
Chief Administrative Officer of Bank of America Corporation
|
||
Sharon L. Allen
|
Director
|
Former Chairman of Deloitte LLP
|
||
Susan S. Bies
|
Director
|
Former Member, Board of Governors of the Federal Reserve System
|
||
Jack O. Bovender, Jr.
|
Lead Independent Director
|
Former Chairman and Chief Executive Officer of HCA Inc.
|
||
Frank P. Bramble, Sr.
|
Director
|
Former Executive Vice Chairman, MBNA Corporation
|
||
Pierre de Weck1
|
Director
|
Former Chairman and Global Head of Private Wealth Management, Deutsche Bank AG
|
||
Arnold W. Donald
|
Director
|
President and Chief Executive Officer, Carnival Corporation & Carnival plc
|
||
Linda P. Hudson
|
Director
|
Former Executive Officer, The Cardea Group, LLC and Former President and Chief Executive Officer of BAE Systems, Inc.
|
||
Monica C. Lozano
|
Director
|
Chief Executive Officer, College Futures Foundation and Former Chairman, US Hispanic Media Inc.
|
||
Thomas J. May
|
Director
|
Former Chairman, President, and Chief Executive Officer of Eversource Energy
|
||
Lionel L. Nowell, III
|
Director
|
Former Senior Vice President and Treasurer, PepsiCo Inc.
|
||
Denise L. Ramos
|
Director
|
Former Chief Executive Officer and President of ITT Inc.
|
||
Clayton S. Rose
|
Director
|
President of Bowdoin College
|
||
Michael D. White
|
Director
|
Former Chairman, President and Chief Executive Officer of DIRECTV
|
||
Thomas D. Woods2
|
Director
|
Former Vice Chairman and Senior Executive Vice President of Canadian Imperial Bank of Commerce
|
||
R. David Yost
|
Director
|
Former Chief Executive Officer of AmerisourceBergen Corp.
|
||
Maria T. Zuber
|
Director
|
Vice President for Research and E.A., Griswold Professor of Geophysics, MIT
|
Name
|
Position with Banc of America Preferred Funding Corporation
|
Principal Occupation
|
||
John J. Lawlor
|
Director and President
|
Managing Director, Municipal Markets and Public Sector Banking Executive of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of
America, National Association
|
||
Edward H. Curland
|
Director and Managing Director
|
Managing Director, Municipal Markets Executive for Trading of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, National
Association
|
||
Michael I. Jentis
|
Managing Director
|
Managing Director, Head of Sales – Public Finance of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, National
Association
|
||
Mona Payton
|
Managing Director
|
Managing Director, Municipal Markets Executive for Short-Term Trading of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of
America, National Association
|
||
Edward J. Sisk
|
Director and Managing Director
|
Managing Director, Public Finance Executive of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Bank of America, National Association
|
||
John B. Sprung
|
Director
|
Corporate Director
|
||
David A. Stephens
|
Director and Managing Director
|
Managing Director, Executive for Public Finance and Public Sector Credit Products of Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Bank of America, National Association
|
(a)
|
Notice
of Underwriting. If the Initiating Holder(s) intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Fund as a part of their request made pursuant to this
Section 3, and the Fund shall include that information in the written notice referred to in Section 3.1 of this Agreement. The right of any Holder to have their Registrable Securities included in a Registration pursuant to this Section 3
shall be conditioned upon such Holder's agreement to participate in the underwriting and the inclusion of that Holder's Registrable Securities in the underwriting to the extent provided herein.
|
(b)
|
Selection
of Underwriter in Demand Registration. The Fund shall (together with all Holders proposing to distribute their securities through the underwriting) enter into an underwriting agreement in customary form for an underwritten
offering made solely by selling shareholders with the underwriter or, if more than one, the lead underwriter acting as the representative of the underwriters (the "Underwriters' Representative") selected for the underwriting by the Initiating Holder and with the consent of the Fund, not to be unreasonably withheld.
|
(c)
|
Marketing
Limitation in Demand Registration. Notwithstanding any other provision of this Section 3, in the event the Underwriters' Representative advises the Fund in writing that market factors (including, without limitation, the aggregate
number of RVMTP Shares requested to be Registered, the general condition of the market, and/or the status of the Persons proposing to sell securities pursuant to the Registration) require a limitation of the number of shares to be
underwritten, then the Fund shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the Registration and
underwriting shall be allocated among all Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities requested to be included in the Registration by all such selling Holders (including the
Initiating Holder(s)); provided, however, that the number of Registrable Securities to be included in any such underwriting held by
Holders shall not be reduced unless all other securities of the Fund, its Affiliates and PIMCO Persons are first entirely excluded from the underwriting. Unless the prior written consent of the Majority Holders has been obtained, the
number of the Registrable Securities included in any such underwriting shall not be reduced to less than 90% of the number of the Registrable Securities requested to be included. Any Registrable Securities or other securities excluded from
the underwriting by reason of this Section 3.3(c) shall be withdrawn from the Registration. To facilitate the allocation of shares in accordance with the foregoing, the Fund or the underwriters may round the number of shares allocated to
any Holder to the nearest one share.
|
(d)
|
Right of
Withdrawal in Demand Registration. If any Holder of Registrable Securities (other than the Initiating Holder(s)) disapproves of the terms of the underwriting, such Holder may elect to withdraw therefrom by written notice to the
Fund and the Underwriters' Representative proposing to distribute their securities through the underwriting, delivered at least twenty (20) days prior to the effective date of the Registration Statement. If any Initiating Holder elects to
withdraw, such withdrawal shall be conditioned on the payment by such withdrawing Initiating Holder to the Fund of the Registration Expenses incurred in connection with such withdrawal (which Registration Expenses are to be calculated on a
per share basis according to the total Registration Expenses then incurred and the total number of Registrable Securities and, once calculated, such allocation of the Registration Expenses to the withdrawal to be made proportionally based
on the number of withdrawn securities to the total number of Registrable Securities). Such payment obligation shall be allocated severally among the withdrawing Initiating Holders (such allocation to be made proportionally among the
withdrawing Initiating Holders based on the number of withdrawn securities held by each of such holders and the total number of withdrawn securities held by all withdrawing Initiating Holders), and the payment shall be made within thirty
(30) days after the delivery to the withdrawing Initiating Holders of an invoice stating such Registration Expense in reasonable detail. The securities so withdrawn shall also be withdrawn from the Registration Statement.
|
(a)
|
(i) prepare and file a Registration Statement with the Commission which (x) shall be on Form N-2, if
available, (y) shall be available for the sale or exchange of the Registrable Securities in accordance with the intended method or methods of distribution by the selling Holders thereof, and (z) shall comply as to form with the requirements
of the applicable form and include all financial statements required by the Commission to be filed therewith and all other information reasonably requested by the Underwriters' Representative to be included therein relating to the
underwriters and plan of distribution for the Registrable Securities, (ii) cause such Registration Statement to become effective and remain effective for up to 90 days or, if earlier, until the Holder or Holders have completed the
distribution thereto or withdrawn from such plan of distribution, (iii) cause each Registration Statement, as of the effective date of such Registration Statement, (x) to comply in all material respects with any requirements of the
Securities Act and (y) not to contain any 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 and (iv) cause each Prospectus, as of
the date thereof, (x) to comply in all material respects with any requirements of the Securities Act and (y) not to contain any 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, in light of the circumstances under which they were made, not misleading;
|
(b)
|
subject to Section 6(a), prepare and file with the Commission such amendments and post-effective
amendments to such Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth in Section 6(a)(ii); cause each such Prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to applicable rules under the Securities Act; and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such
Registration Statement during the applicable period set forth in Section 6(a)(ii) in accordance with the intended method or methods of distribution by the selling Holders thereof, as set forth in such registration statement;
|
(c)
|
furnish to each Holder for which the Registrable Securities are being registered and to each underwriter
of an underwritten offering of the Registrable Securities, if any, without charge, as many copies of each Prospectus, including, without limitation, each preliminary Prospectus, and any amendments or supplements thereto and such other
documents as such Holder or underwriter may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities; the Fund hereby consents to the use of the Prospectus, including, without limitation,
each preliminary Prospectus, by each Holder for which the Registrable Securities are being registered and each underwriter of an underwritten Public Offering of the Registrable Securities, if any, in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or the preliminary Prospectus, as applicable;
|
(d)
|
(i) use its commercially reasonable best efforts to register or qualify the Registrable Securities, no
later than the time the applicable Registration Statement is declared effective by the Commission, under all applicable state securities or Blue Sky laws of such United States jurisdictions as the Underwriters' Representative, if any, or
any Holder having Registrable Securities covered by a Registration Statement, shall reasonably request; (ii) use its commercially reasonable best efforts to keep each such registration or qualification effective during the period such
Registration Statement is required to be kept effective; and (iii) do any and all other acts and things which may be reasonably necessary or advisable to enable each underwriter, if any, and any such Holder to consummate the disposition in
each such jurisdiction of such Registrable Securities the registration of which such Holder is requesting; provided, however, that the Fund shall not be obligated to qualify to do business or to a file a general consent to service of process in any such
state or jurisdiction, unless the Fund is already subject to service in such jurisdiction and except as may be required by the Securities Act;
|
(e)
|
notify each Holder for which the Registrable Securities are being registered promptly, and, if requested
by such Holder, confirm such advice in writing, (i) when such Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of the issuance by the Commission or any state
securities authority of any stop order, injunction or other order or requirement suspending the effectiveness of such Registration Statement or the initiation of any proceedings for that purpose, (iii) if, between the effective date of such
Registration Statement and the closing of any sale of Registrable Securities covered thereby pursuant to any agreement to which the Fund is a party relating to such sale, the representations and warranties of the Fund contained in such
agreement cease to be true and correct in all material respects or if the Fund receives any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and (iv) of the happening of any event during the period such Registration Statement is effective as a result of which such Registration Statement or the related Prospectus contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
|
(f)
|
furnish to a designated single counsel representing all of the underwriters, if any, and for the Holders
for which the Registrable Securities are being registered, copies of any request by the Commission or any state securities authority for amendments or supplements to a Registration Statement and Prospectus or for additional information;
|
(g)
|
use its commercially reasonable best efforts to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible time;
|
(h)
|
upon the occurrence of any event contemplated by paragraph (e)(iv) of this Section, use commercially
reasonable best efforts to prepare a supplement or post-effective amendment to such Registration Statement or the related Prospectus, or any document incorporated therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will not contain any 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, in the light of the circumstances under which they were made, not misleading;
|
(i)
|
with respect to each requirement in this Section 6(i), in a form reasonably satisfactory to the Fund's
legal counsel, enter into customary agreements (including, in the case of an underwritten Public Offering, underwriting agreements in customary form for sales only by selling shareholders, and including provisions with respect to
indemnification and contribution in customary form and consistent with the provisions relating to indemnification and contribution contained herein) and take all other customary and appropriate actions that are commercially reasonable in
order to expedite or facilitate the disposition of such Registrable Securities in accordance with the plan of distribution set forth in the Registration Statement and the Prospectus, and in connection therewith:
|
(i)
|
in the case of any underwritten Public Offering, make such representations and warranties to (x) the
underwriters and (y) insofar as they relate to the nature and the validity of the offering, the selling Holders of such Registrable Securities, in form, substance and scope as are customarily made by issuers to underwriters in similar
underwritten offerings;
|
(ii)
|
in the case of any underwritten Public Offering, obtain opinions of counsel to the Fund and updates
thereof addressed to (x) the underwriters and (y) insofar as they relate to the nature and the validity of the offering, each selling Holder, covering the matters customarily covered in opinions requested in similar underwritten offerings
and such other matters as may be reasonably requested by underwriters and such Holders (and which opinions (in form, scope and substance) shall be reasonably satisfactory to the Underwriters' Representative, and, if addressed to the selling
Holders pursuant to clause (y), the Majority Holders of the Registrable Securities being sold);
|
(iii)
|
in the case of any underwritten Public Offering, obtain "comfort" letters or "agreed-upon procedures"
letters and updates thereof from the Fund's independent certified public accountants addressed to the selling Holders of the Registrable Securities, if permissible, and underwriters, which letters shall be customary in form and shall cover
matters of the type customarily covered in such letters to underwriters and such Holders in connection with firm commitment underwritten offerings;
|
(iv)
|
to the extent requested and customary for the relevant transaction, enter into a securities sales
agreement with the selling Holders providing for, among other things, the appointment of such representative as agent for the selling Holders for the purpose of soliciting purchases of the Registrable Securities, which agreement shall be
customary in form, substance and scope and shall contain customary representations, warranties and covenants relating to the nature and validity of the offering; and
|
(v)
|
deliver such customary documents and certificates as may be reasonably requested by a designated
representative of the Majority Holders of the Registrable Securities being sold (the "Designated Representative") or by the Underwriters'
Representative, if any;
|
(j)
|
make available for inspection by the Designated Representative and by any underwriters participating in
any disposition pursuant to such Registration Statement and a single counsel or accountant retained by such Holders or by counsel to such underwriters, all relevant financial and other records, pertinent corporate documents and properties
of the Fund that are customarily requested and cause the respective officers, trustees and employees of the Fund to supply all information reasonably requested by such Designated Representative, underwriter, counsel or accountant in
connection with such Registration Statement;
|
(k)
|
within a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment
to a Registration Statement or amendment or supplement to a Prospectus, provide copies of such document to the selling Holders of the Registrable Securities and to counsel to such Holders and to the underwriter or underwriters of a
underwritten Public Offering of the Registrable Securities, if any; fairly consider such reasonable changes in any such document prior to or after the filing thereof as the counsel to the Holders or the underwriter or the underwriters may
request and not file any such document in a form to which the Majority Holders of the Registrable Securities being registered or any Underwriters' Representative shall reasonably object unless required by law; and make such of the
representatives of the Fund as shall be reasonably requested by the Designated Representative or the Underwriters' Representative available for discussion of such document;
|
(l)
|
otherwise use its commercially reasonable best efforts to comply with all applicable rules and
regulations of the Commission, including making available to its security holders an earnings statement covering at least 12 months which shall satisfy the provisions of the Securities Act and the rules thereunder;
|
(m)
|
cooperate and assist in any filings required to be made with FINRA and in the performance of any due
diligence investigation by any underwriter in an underwritten offering; and
|
(n)
|
use its commercially reasonable best efforts to facilitate the distribution and sale of any Registrable
Securities to be offered pursuant to this Agreement, including without limitation by participating in domestic road show presentations, holding meetings with potential investors and taking such other actions as shall be reasonably requested
by the Designated Representative or the lead managing underwriter of an underwritten offering.
|
(a)
|
The obligations of the Fund and the Shareholder and its Permitted Transferees hereunder shall not in any way be modified or
limited by reference to any other document, instrument or agreement (including, without limitation, the RVMTP Shares). The rights of the Shareholder hereunder are separate from and in addition to any rights that any Holder of any RVMTP
Share may have under the terms of such RVMTP Share or otherwise.
|
(b)
|
No failure or delay by the Fund or the Shareholder in exercising any right, power or privilege hereunder or under the RVMTP
Shares or any other agreement shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No failure or delay by
the Fund or the Shareholder in exercising any right, power or privilege under or in respect of the RVMTP Shares or any other agreement shall affect the rights, powers or privileges of the Fund or the Shareholder hereunder or shall operate
as a limitation or waiver thereof. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
|
THE FUND:
PIMCO FLEXIBLE MUNICIPAL INCOME FUND
By: _/s/ Eric D. Johnson___________
Name: Eric D. Johnson
Title: President
|
THE SHAREHOLDER:
Banc of America Preferred Funding Corporation
By: _/s/ Michael Jentis ____________
Name: Michael Jentis
Title: Authorized Signatory
|
CONTENTS
|
||
SECTION
|
|
PAGE
|
ARTICLE I DEFINITIONS
|
1
|
|
1.1
|
Incorporation of Certain Definitions by Reference
|
7
|
ARTICLE II PURCHASE AND TRANSFERS, COSTS AND EXPENSES; ADDITIONAL FEE; SETTLEMENT
|
7
|
|
2.1
|
Purchase and Transfer of the RVMTP Shares
|
7
|
2.2
|
Fees
|
8
|
2.3
|
Operating Expenses
|
9
|
2.4
|
Additional Fee for Failure to Comply with Reporting Requirement or Registration Rights Failure
|
9
|
2.5
|
DTC Eligibility and Settlement of RVMTP Shares
|
10
|
ARTICLE III CONDITIONS TO EFFECTIVE DATE
|
11
|
|
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE ISSUER
|
12
|
|
4.1
|
Existence
|
12
|
4.2
|
Authorization; Contravention
|
13
|
4.3
|
Binding Effect
|
13
|
4.4
|
Financial Information
|
13
|
4.5
|
Litigation
|
14
|
4.6
|
Consents
|
14
|
4.7
|
Additional Representations and Warranties
|
14
|
4.8
|
Complete and Correct Information
|
19
|
4.9
|
Offering Memorandum
|
19
|
4.1
|
1940 Act Registration
|
20
|
4.11
|
Effective Leverage Ratio; 1940 Act Asset Coverage
|
20
|
4.12
|
Investments
|
20
|
4.13
|
Due Diligence
|
20
|
4.14
|
Certain Fees
|
21
|
4.15
|
Eligible Assets
|
21
|
4.16
|
Capital Structure
|
21
|
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
|
21
|
|
5.1
|
Existence
|
21
|
5.2
|
Authorization; Contravention
|
21
|
5.3
|
Binding Effect
|
22
|
5.4
|
Own Account
|
22
|
5.5
|
Litigation
|
22
|
5.6
|
Consents
|
22
|
5.7
|
Purchaser Status
|
23
|
5.8
|
Experience of The Purchaser
|
23
|
5.9
|
General Solicitation
|
23
|
5.1
|
Certain Transactions
|
23
|
5.11
|
Certain Fees
|
23
|
ARTICLE VI COVENANTS OF THE ISSUER
|
24
|
|
6.1
|
Information
|
24
|
6.2
|
No Amendment or Certain Other Actions Without Consent of the Purchaser
|
26
|
6.3
|
Maintenance of Existence
|
27
|
6.4
|
Tax Status of the Issuer
|
27
|
6.5
|
Payment Obligations
|
27
|
6.6
|
Compliance With Law
|
27
|
6.7
|
Maintenance of Approvals: Filings, Etc.
|
27
|
6.8
|
Inspection Rights
|
27
|
6.9
|
Status of Information
|
28
|
6.1
|
1940 Act Registration
|
28
|
6.11
|
Investments
|
28
|
6.12
|
Maintenance of Effective Leverage Ratio
|
28
|
6.13
|
Calculation and Paying Agent
|
29
|
6.14
|
Cooperation in the Sale of the RVMTP Shares
|
29
|
6.15
|
Use of Proceeds
|
29
|
6.16
|
Securities Depository
|
30
|
6.17
|
Future Agreements
|
30
|
6.18
|
Eligible Assets
|
30
|
ARTICLE VII MISCELLANEOUS
|
30
|
|
7.1
|
Notices
|
30
|
7.2
|
No Waivers
|
31
|
7.3
|
Expenses and Indemnification
|
32
|
7.4
|
Amendments and Waivers
|
34
|
7.5
|
Successors and Assigns
|
34
|
7.6
|
Term of this Agreement
|
35
|
7.7
|
Governing Law
|
35
|
7.8
|
Waiver of Jury Trial
|
36
|
7.9
|
Counterparts
|
36
|
7.1
|
Beneficiaries
|
36
|
7.11
|
Entire Agreement
|
36
|
7.12
|
Relationship to the Statement
|
36
|
7.13
|
Confidentiality
|
36
|
7.14
|
Severability
|
38
|
7.15
|
Consent Rights of the Majority Participants to Certain Actions.
|
38
|
7.16
|
No Individual Liability
|
40
|
SCHEDULE 1
|
Schedule 1
|
|
SCHEDULE 2
|
Schedule 2
|
|
ANNEX A
|
Annex A
|
|
EXHIBIT A
|
FORMS OF OPINIONS OF COUNSEL FOR THE ISSUER
|
A-1
|
EXHIBIT A-1
|
FORM OF CORPORATE AND 1940 ACT OPINION
|
A-1-1
|
EXHIBIT A-2
|
FORM OF TAX OPINION
|
A-2-1
|
EXHIBIT B
|
ELIGIBLE ASSETS
|
B-1
|
EXHIBIT C
|
TRANSFEREE CERTIFICATE
|
C-1
|
EXHIBIT D
|
INFORMATION TO BE PROVIDED BY THE ISSUER
|
D-1
|
1.1
|
Incorporation of Certain Definitions by Reference
|
2.1
|
Purchase and Transfer of the RVMTP Shares
|
(a)
|
On the Effective Date, the Purchaser will acquire 250 RVMTP Shares sold on initial issuance in a transaction (which, based upon the representations of the Issuer and the
Purchaser herein, is exempt from registration under the Securities Act), by payment of the Purchase Price in immediately available funds to the Issuer, with such issuance effected through the Securities Depository.
|
(b)
|
The Purchaser agrees that it may make offers and sales of the RVMTP Shares in compliance with the Securities Act and applicable state securities laws only to Persons that
are (1)(i) QIBs that are registered closed-end management investment companies, the common shares of which are traded on a national securities exchange ("Closed-End Funds"), banks or entities that
are 100% direct or indirect subsidiaries of banks' publicly traded holding company (collectively, "Banks"), insurance companies or registered open-end management investment companies, (ii) tender
option bond trusts (or similar vehicles used for providing financing for municipal obligations and municipal closed-end fund preferred shares) in which all investors are QIBs that are Closed-End Funds, Banks, insurance companies or
registered open-end management investment companies, in each case with respect to clauses (i) and (ii), in accordance with Rule 144A under the Securities Act or pursuant to another available exemption from registration under the Securities
Act, in a manner not involving a public offering within the meaning of Section 4(a)(2) of the Securities Act, or (iii) other investors with the prior written consent of the Issuer and (2) unless the prior written consent of the Issuer has
been obtained, not PIMCO Persons if such PIMCO Persons would, after such sale and transfer, own more than 20% of the Outstanding RVMTP Shares. Any transfer in violation of the foregoing restrictions shall be void ab initio. In connection with any transfer of the RVMTP Shares, each transferee (including, in the case of a tender option bond trust (or similar vehicle used for providing financing for municipal obligations and
municipal closed-end fund preferred shares), the depositor or trustee or other Person thereunder acting on behalf of such transferee) will be required to deliver to the Issuer a transferee certificate set forth as Exhibit C to this
Agreement. The foregoing restrictions on transfer shall not apply to any RVMTP Shares registered under the Securities Act pursuant to the Registration Rights Agreement or any subsequent transfer of such RVMTP Shares thereafter.
|
2.2
|
Fees
|
2.3
|
Operating Expenses
|
2.4
|
Additional Fee for Failure to Comply with Reporting Requirement or Registration Rights Failure
|
2.5
|
DTC Eligibility and Settlement of RVMTP Shares
|
(a)
|
The Issuer hereby appoints and directs BofA Securities, Inc. to act as the DTC Agent hereunder in accordance with the terms of this Section 2.5, and BofA Securities, Inc.
hereby accepts such appointment.
|
(b)
|
On the Effective Date, the Purchaser shall cause an amount equal to the Purchase Price, to be deposited to the Issuer's account by wire transfer in accordance with the
wire transfer instructions set forth on Annex A attached hereto. Upon confirmation of receipt of the Purchase Price by the Issuer in accordance with the preceding sentence, the Issuer shall grant authorization to proceed with the closing.
Upon closing, the Global RVMTP Shares will be credited directly to the Purchaser’s account detailed in Schedule 2 hereto (the "Global RVMTP Shares Account") via free delivery by DTC. Such delivery
shall be accepted by the DTC Participants through DTC no later than 3:30p.m. New York City time on the Effective Date. Acceptance of such delivery may be deemed to occur upon receipt by the Issuer of a notice of settlement from DTC through
the systems of DTC.
|
(c)
|
The DTC Agent has taken the following actions in accordance with the terms hereof at the request of the Issuer in order to facilitate the delivery of the Global RVMTP
Shares via the DTC book entry system: obtained CUSIP in respect of the RVMTP Shares; coordinated setup of CUSIP on relevant Bloomberg systems; completed DTC eligibility application for Global RVMTP Shares for DTC’s book entry system;
delivered DTC blanket letter of representations to DTC on behalf of Issuer with respect to the Global RVMTP Shares; and coordinated with DTC to confirm DTC has received relevant materials from the Issuer for the transaction and that DTC has
approved settlement of the transaction via DTC’s book entry system. The Issuer has cooperated with the DTC Agent in performance of these actions and agrees to reasonably cooperate with the DTC Agent in all other actions necessary in
connection with the performance of the DTC Agent’s duties under this Agreement.
|
(d)
|
On the Effective Date the DTC Agent will coordinate with DTC in connection with the delivery of the Global RVMTP Shares as contemplated in this Agreement, including,
liaising with DTC on a closing call to be held on the Effective Date.
|
(e)
|
(i) The Issuer and the DTC Agent agree that the DTC Agent has undertaken the duties described above solely as a "Clearing DTC Participant" and not as an "underwriter" (as
defined in Section 2(a)(11) of the Securities Act) or placement agent.
|
(f)
|
The DTC Agent represents and warrants with respect to itself, as of the date hereof and as of the Effective Date, to the Issuer as follows: the DTC Agent has confirmed
that CUSIP has established a "fixed field" attached to the CUSIP number for the Series 2050-A RVMTP Shares containing the "144A" indicator.
|
(a)
|
this Agreement shall have been duly executed and delivered by the parties hereto;
|
(b)
|
the RVMTP Shares shall have a long-term issue credit rating of at least AA- (or its equivalent) from at least one Rating Agency on the Effective Date;
|
(c)
|
receipt by the Purchaser of executed originals, or copies certified by a duly authorized officer of the Issuer to be in full force and effect and not otherwise amended,
of all Related Documents (other than the global shares representing the RVMTP Shares), as in effect on the Effective Date, and an incumbency certificate with respect to the authorized signatories thereto;
|
(d)
|
receipt by the Purchaser of opinions of counsel for the Issuer, substantially to the effect of Exhibit A;
|
(e)
|
except as disclosed in the Offering Memorandum, there shall not be any pending or threatened material litigation of the nature described in Section 4.5 (unless such
pending or threatened litigation has been determined by the Purchaser to be acceptable);
|
(f)
|
the fees and expenses payable no later than the Effective Date pursuant to clause (i) of Section 2.2 hereof shall have been paid;
|
(g)
|
the Purchaser, in its reasonable discretion, shall be satisfied that no change in law, rule or regulation (or their interpretation or administration), in each case, shall
have occurred which will adversely affect the consummation of the transaction contemplated by this Agreement;
|
(h)
|
there shall have been delivered to the Purchaser any additional documentation and financial information, including satisfactory responses to its due diligence inquiries,
as it reasonably deems relevant; and
|
(i)
|
there shall have been delivered to the Purchaser such information and copies of documents, approvals (if any) and records certified, where appropriate, of trust
proceedings as the Purchaser may have reasonably requested relating to the Issuer's entering into and performing this Agreement and the other Related Documents to which it is a party, and the transactions contemplated hereby and thereby.
|
4.1
|
Existence
|
4.2
|
Authorization; Contravention
|
4.3
|
Binding Effect
|
4.4
|
Financial Information
|
4.5
|
Litigation
|
4.6
|
Consents
|
4.7
|
Additional Representations and Warranties
|
(a)
|
The Series 2050-A RVMTP Shares conform in all material respects to those set forth in the Statement attached to the Offering Memorandum.
|
(b)
|
As of the Date of Original Issue, the Series 2050-A RVMTP Shares will satisfy the eligibility requirements of Rule 144A(d)(3) under the Securities Act, and no securities
of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the Series 2050-A RVMTP Shares are listed on any national securities exchange registered under Section 6 of the Securities Exchange Act of 1934, as
amended, or quoted in a U.S. automated inter-dealer quotation system.
|
(c)
|
Assuming the accuracy of the representations and warranties of the Purchaser set forth herein, neither the Issuer, nor, to the Issuer's knowledge, any Person acting on
its behalf, has, directly or indirectly, made offers or sales of any security (as defined in the Securities Act), or solicited offers to buy any security, under circumstances that would require the registration of the Series 2050-A RVMTP
Shares under the Securities Act.
|
(d)
|
If the Issuer establishes a Bloomberg screen for the RVMTP Shares, the Issuer will request that Bloomberg, L.P. include the following (or similar) language on each
Bloomberg screen containing information about the Series 2050-A RVMTP Shares:
|
(i)
|
the "Note Box" on the bottom of the "Security Display" page describing the Series 2050-A RVMTP Shares will state: "Iss'd Under 144A."
|
(ii)
|
the "Security Display" page will have flashing a red indicator "See Other Available Information."
|
(iii)
|
the indicator will link to the "Additional Security Information" page, which will state that the securities are being offered in reliance on the exemption from
registration under Rule 144A of the Securities Act to persons who are qualified institutional buyers (as defined in Rule 144A under the Securities Act).
|
(e)
|
The Issuer's authorized equity capitalization is as set forth, or incorporated by reference, in the Offering Memorandum; the equity capital of the Issuer conforms in all
material respects to the description thereof contained, or incorporated by reference, in the Offering Memorandum; all outstanding Common Shares have been duly authorized and validly issued and are fully paid and, except as set forth in the
Offering Memorandum, nonassessable; and, except as set forth in the Offering Memorandum, no options, warrants or other rights to purchase, agreements or other obligations to issue, or rights to convert any obligations into or exchange any
securities for, shares of capital stock of or ownership interests in the Issuer are outstanding.
|
(f)
|
The statements in the Offering Memorandum under the headings "Anti-Takeover and Other Provisions of the Declaration of Trust", "Description of Capital Structure", and
"Tax Matters" insofar as such statements summarize matters of United States federal law, agreements, documents or proceedings discussed therein, are accurate and fair summaries in all material respects of such matters, agreements, documents
or proceedings.
|
(g)
|
Each of the filings with the Securities and Exchange Commission that it is required to make under the 1940 Act (each such filing, a "1940
Act Document") complies in all material respects with the requirements of the 1940 Act, and each 1940 Act Document did not at the time of filing with the Securities and Exchange Commission include an untrue statement of a material
fact or omit to state a 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.
|
(h)
|
No consent, approval, authorization, filing with or order of any court or governmental agency or body is required by the Issuer in connection with the transactions
contemplated in this Agreement, the Calculation and Paying Agent Agreement, the Statement and the Offering Memorandum (collectively, the "Issuer Agreements"), except such as have been made or obtained
under Blue Sky laws of the various states and foreign jurisdictions, the Securities Act, the 1940 Act and the rules and regulations of the Financial Industry Regulatory Authority, Inc., and except where the failure to obtain such consent,
approval, authorization, order, permit or qualification would not have an Issuer Material Adverse Effect.
|
(i)
|
None of the execution, delivery or performance of any of the Issuer Agreements, nor the consummation of the transactions herein or therein contemplated, nor the
fulfillment of the terms hereof or thereof, conflict with, result in a breach or violation of, or require or result in imposition of any material lien, charge or encumbrance upon any property or assets of the Issuer pursuant to, (i) the
Declaration or the Statement, or (ii) the terms of any material indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which the Issuer is a
party or by which it is bound or to which its property is subject, or materially violates or will materially violate any material statute, law, rule, regulation, judgment, order or decree applicable to the Issuer of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Issuer or any of its properties.
|
(j)
|
The Issuer is not in violation or default of any provision of its Declaration or the Statement, or in material violation of (i) the terms of any material indenture,
contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject or (ii) any material statute,
law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Issuer or any of its properties, except in the case of
clause (i) where such violation or default would not have an Issuer Material Adverse Effect.
|
(k)
|
Since the date as of which information is given in the Offering Memorandum, except as otherwise stated therein, (i) no transaction or event has occurred and no change has
occurred in the condition (financial or otherwise) or operations of the Issuer that would materially and adversely affect its ability to perform its obligations under this Agreement and the other Related Documents to which it is a party or
by which it is bound and (ii) there have been no transactions entered into by the Issuer which are material to the Issuer other than those in the ordinary course of its business or as described or contemplated in the Offering Memorandum
(and any amendment or supplement thereto).
|
(l)
|
Pricewaterhouse Coopers LLP, an independent registered public accounting firm, previously audited the Issuer's financial statements dated December 31, 2019.
Pricewaterhouse Coopers LLP has delivered its reports with respect to the audited initial financial statements included or incorporated by reference in the Offering Memorandum.
|
(m)
|
The Issuer's trustees and officers errors and omissions insurance policy and its fidelity bond required by Rule 17g-1 under the 1940 Act are in full force and effect; the
Issuer is in compliance with the terms of such policy and fidelity bond in all material respects; and there are no claims by the Issuer under any such policy or fidelity bond as to which any insurance company is denying liability or
defending under a reservation of rights clause; the Issuer has not been refused any insurance coverage sought or applied for; and the Issuer has no reason to believe that it will not be able to renew its existing insurance coverage and
fidelity bond as and when such coverage and fidelity bond expires or to obtain similar coverage and fidelity bond from similar insurers as may be necessary to continue its business at a cost that would not have a material adverse effect on
the condition (financial or otherwise), business prospects, earnings, business, properties, net assets or results of operations of the Issuer (other than as a result of a change in the financial markets generally), whether or not arising
from transactions in the ordinary course of business, except as set forth in or contemplated in the Offering Memorandum.
|
(n)
|
The Issuer possesses all licenses, certificates, permits and other authorizations issued by the appropriate federal, state or foreign regulatory authorities necessary to
conduct its business, and the Issuer has not received any notice of proceedings relating to the revocation or modification of any such license, certificate, permit or authorization which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a material adverse effect on the condition (financial or otherwise), business prospects, earnings, business or properties of the Issuer (other than as a result of a change in the financial
markets generally), whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Offering Memorandum.
|
(o)
|
The Issuer maintains and will maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization and with the investment objectives, policies and restrictions of the Issuer and the applicable requirements of the 1940 Act and the Code; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity with accounting principles generally accepted in the United States, to calculate net asset value, to maintain accountability for assets and to maintain material
compliance with the books and records requirements under the 1940 Act; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared
with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Issuer employs "internal controls over financial reporting" (as such term is defined in Rule 30a-3 under the 1940 Act) and
such internal controls over financial reporting are effective as required the 1940 Act. The Issuer is not aware of any material weakness in its internal controls over financial reporting.
|
(p)
|
The Issuer maintains "disclosure controls and procedures" (as such term is defined in Rule 30a-3 under the 1940 Act); such disclosure controls and procedures provide
reasonable assurance that the material information required to be disclosed by the registrant is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
|
(q)
|
Except as described in the Offering Memorandum, the Issuer has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably
be expected to cause or result in a violation of federal securities laws or in stabilization or manipulation of the price of any security of the Issuer to facilitate the resale of the Series 2050-A RVMTP Shares, and the Issuer is not aware
of any such action taken or to be taken by any affiliates of the Issuer.
|
(r)
|
Each of the Custody and Investment Accounting Agreement among the Issuer, the Investment Manager, the other registered investment companies listed on Schedule A thereto,
and State Street Bank and Trust Company, dated as of January 1, 2000, as amended from time to time, the Amended and Restated Investment Management Agreement between the Issuer and the Investment Manager, dated as of December 14, 2016, as
amended and restated on March 21, 2018 (the "Investment Management Agreement"), and the Calculation and Paying Agent Agreement between the Issuer and the Calculation and Paying Agent, dated as of
November 18, 2019, complies in all material respects with all applicable provisions of the 1940 Act, the Advisers Act, and the Issuer's trustees and the Issuer's shareholders have approved the Investment Management Agreement in accordance
with Sections 15(a) and (c) of the 1940 Act.
|
(s)
|
Except as set forth or incorporated by reference in the Offering Memorandum, no trustee of the Issuer is an "interested person" (as defined in the 1940 Act) of the
Issuer.
|
(t)
|
The Issuer has filed all foreign, federal, state and local tax returns required to be filed or has properly requested extensions thereof (except in any case in which the
failure so to file would not have an Issuer Material Adverse Effect (other than as a result of a change in the financial markets generally), whether or not arising from transactions in the ordinary course of business, except as set forth or
incorporated by reference in or contemplated in the Offering Memorandum) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and
payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not have an Issuer Material Adverse Effect (other than as a result of a change in the financial markets generally), whether
or not arising from transactions in the ordinary course of business, except as set forth or incorporated by reference in or contemplated in the Offering Memorandum; and the Issuer has been and is currently in compliance with the
requirements of Subchapter M of the Code to qualify as a regulated investment company under the Code.
|
(u)
|
There are no transfer taxes or other similar fees or charges under federal law or the laws of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement.
|
(v)
|
The Issuer has adopted and implemented written policies and procedures reasonably designed to prevent violation of the Federal Securities Laws (as that term is defined in
Rule 38a-1 under the 1940 Act) by the Issuer, including policies and procedures that provide oversight of compliance by each investment adviser and transfer agent of the Issuer.
|
(w)
|
The offering of the Series 2050-A RVMTP Shares in the manner contemplated by the Offering Memorandum has been conducted in a manner by the Issuer and its agents so as not
to violate any applicable federal securities laws, including the 1940 Act, the Advisers Act, or any applicable state laws.
|
4.8
|
Complete and Correct Information
|
4.9
|
Offering Memorandum
|
4.10
|
1940 Act Registration
|
4.11
|
Effective Leverage Ratio; 1940 Act Asset Coverage
|
4.12
|
Investments
|
4.13
|
Due Diligence
|
4.14
|
Certain Fees
|
4.15
|
Eligible Assets
|
4.16
|
Capital Structure
|
5.1
|
Existence
|
5.2
|
Authorization; Contravention
|
5.3
|
Binding Effect
|
5.4
|
Own Account
|
5.5
|
Litigation
|
5.6
|
Consents
|
5.7
|
Purchaser Status
|
5.8
|
Experience of The Purchaser
|
5.9
|
General Solicitation
|
5.10
|
Certain Transactions
|
5.11
|
Certain Fees
|
5.12
|
Access to Information
|
5.13
|
Due Diligence
|
6.1
|
Information
|
(a)
|
notice of any change in, or suspension or termination of, the ratings on the RVMTP Shares by any Rating Agency (and any corresponding change in the Rating Agency
Guidelines applicable to the RVMTP Shares associated with any such change in the rating from any Rating Agency) or any change of a Rating Agency rating the RVMTP Shares as promptly as practicable upon the Issuer having knowledge of the
occurrence thereof;
|
(b)
|
notice of any redemption or other repurchase by the Issuer of any or all of the RVMTP Shares as provided in the Statement;
|
(c)
|
subject to Section 6.2, notice of any proposed amendments to any of the Related Documents at such time as the amendments are sent to other third parties (other than the
Board of Trustees) whose approval is required for such amendment and in any event not less than ten (10) Business Days prior to the effectiveness of any proposed amendment and copies of all actual amendments thereto within ten (10) Business
Days of being signed or, in each case, as provided in the relevant document;
|
(d)
|
notice of any missed, reduced or deferred dividend payment on the RVMTP Shares that remains uncured for more than three (3) Business Days as soon as reasonably
practicable, but in no event later than one (1) Business Day after expiration of the foregoing grace period;
|
(e)
|
notice of the failure to make any deposit provided for under Section 2.6(e) of the Statement in respect of a properly noticed redemption as soon as reasonably
practicable, but in no event later than two (2) Business Days after discovery of such failure to make any such deposit;
|
(f)
|
notice of non-compliance with the Rating Agency Guidelines (if applicable) for more than five (5) Business Days as soon as reasonably practicable upon the Issuer having
actual knowledge of such non-compliance, but in no event later than two (2) Business Days after expiration of the foregoing grace period;
|
(g)
|
if the Issuer provides a Notice of Taxable Allocation to the Calculation and Paying and Paying Agent pursuant to Section 2.11(a) of the Statement, the Notice of Taxable
Allocation prior to the Dividend Period with respect to which the Notice of Taxable Allocation relates;
|
(h)
|
notice of any replacement of any investment adviser or sub-adviser, if any, of the Issuer within two (2) Business Days after a resignation or a notice of removal has been
sent by or to any investment adviser or sub-adviser;
|
(i)
|
notice no later than two (2) Business Days after the occurrence thereof of (i) the failure of the Issuer to pay the amount due on any "senior securities" (as defined
under the 1940 Act) or other debt at the time outstanding (other than the RVMTP Shares), and any period of grace or cure with respect thereto shall have expired; (ii) the failure of the Issuer to pay, or the Issuer admitting in writing its
inability to pay, its debts generally as they become due; or (iii) the failure of the Issuer to pay accumulated dividends on any Preferred Shares (other than the RVMTP Shares) ranking pari passu
with the RVMTP Shares, and any period of grace or cure with respect thereto shall have expired;
|
(j)
|
notice of a material breach of any representation, warranty or covenant of the Issuer contained in this Agreement, the Registration Rights Agreement or the Statement, in
each case, only if any officer of the Issuer has actual knowledge of such breach as soon as reasonably practicable, but in no event later than five (5) Business Days, after knowledge of any officer of the Issuer or the Investment Manager;
|
(k)
|
notice of any litigation, administrative proceeding or business development which may reasonably be expected to materially adversely affect the Issuer's business,
properties or affairs or the ability of the Issuer to perform its obligations as set forth hereunder or under any of the Related Documents to which it is a party as soon as reasonably practicable, but in no event later than ten (10) days
after knowledge of any officer of the Issuer thereof;
|
(l)
|
upon request of the Purchaser, copies of all certificates that the Issuer has delivered to any Rating Agency pursuant to the respective Rating Agency Guidelines (if
applicable) regarding the 1940 Act Asset Coverage and all related calculations at such times and containing such information as set forth in the respective Rating Agency Guidelines (if applicable) as soon as reasonably practicable after
such certificates have been sent;
|
(m)
|
within seven (7) Business Days after the last day of each month, a report of portfolio holdings of the Issuer as of the close of business of the last Business Day of such
month, prepared on a basis substantially consistent with the periodic reports of portfolio holdings of the Issuer prepared for financial reporting purposes;
|
(n)
|
within seven (7) Business Days after the last day of each month, the information set forth in Exhibit D to this Agreement and a calculation of the Effective Leverage
Ratio and the 1940 Act Asset Coverage of the Issuer as of the close of business of the last Business Day of such month; and upon the failure of the Issuer to maintain 1940 Act Asset Coverage as provided in Section 2.4(a) of the Statement or
the Effective Leverage Ratio as required by Section 2.4(c) of the Statement, notice of such failure within two (2) Business Days of the occurrence thereof; and
|
(o)
|
from time to time such additional information regarding the financial position, results of operations or prospects of the Issuer as the Purchaser may reasonably request
including, without limitation, copies of all offering memoranda or other offering material with respect to the sale of any securities of the Issuer as soon as reasonably practicable, but in no event later than twenty (20) calendar days
after a request.
|
6.2
|
No Amendment or Certain Other Actions Without Consent of the Purchaser
|
6.3
|
Maintenance of Existence
|
6.4
|
Tax Status of the Issuer
|
6.5
|
Payment Obligations
|
6.6
|
Compliance With Law
|
6.7
|
Maintenance of Approvals: Filings, Etc.
|
6.8
|
Inspection Rights
|
6.9
|
Status of Information
|
6.10
|
1940 Act Registration
|
6.11
|
Investments
|
6.12
|
Maintenance of Effective Leverage Ratio
|
6.13
|
Calculation and Paying Agent
|
6.14
|
Cooperation in the Sale of the RVMTP Shares
|
6.15
|
Use of Proceeds
|
6.16
|
Securities Depository
|
6.17
|
Future Agreements
|
6.18
|
Eligible Assets
|
7.1
|
Notices
|
(a)
|
if to the Issuer:
|
(b)
|
if to the Purchaser or to the DTC Agent, care of the Purchaser:
|
7.2
|
No Waivers
|
(a)
|
The obligations of the Issuer hereunder shall not in any way be modified or limited by reference to any other document, instrument or agreement (including, without
limitation, the RVMTP Shares or any other Related Document). The rights of the Purchaser hereunder are separate from and in addition to any rights that any Holder or Designated Owner of any RVMTP Share may have under the terms of such
RVMTP Share or any Related Document or otherwise.
|
(b)
|
No failure or delay by the Issuer or the Purchaser in exercising any right, power or privilege hereunder or under the RVMTP Shares shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No failure or delay by the Issuer or the Purchaser in exercising any right, power or
privilege under or in respect of the RVMTP Shares or any other Related Document shall affect the rights, powers or privileges of the Issuer or the Purchaser hereunder or shall operate as a limitation or waiver thereof. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
|
7.3
|
Expenses and Indemnification
|
(a)
|
The Issuer shall upon demand reimburse the Purchaser (to the extent that payments for the following items are not made under the other provisions hereof) for all
reasonable out-of-pocket expenses (including reasonable fees and costs of outside counsel, and reasonable consulting, accounting, appraisal, investment banking, and similar professional fees and charges) incurred by the Purchaser in
connection with the enforcement of or preservation of rights under this Agreement, provided, however, that the Issuer shall not be responsible for the Purchaser's costs in connection with any subsequent offer and sale of the RVMTP Shares
made by the Purchaser pursuant to Rule 144A under the Securities Act or another available exemption from registration under the Securities Act, in a manner not involving any public offering within the meaning of Section 4(a)(2) of the
Securities Act. The Issuer shall not be responsible under this Section 7.3(a) for the fees and costs of more than one law firm in any one jurisdiction with respect to any one proceeding or set of related proceedings for the Purchaser,
unless the Purchaser shall have reasonably concluded that there are legal defenses available to it that are different from or additional to those available to the Issuer.
|
(b)
|
The Issuer agrees to indemnify and hold harmless the Purchaser and each other Indemnified Person of the Purchaser from and against any losses, claims, damages,
liabilities and reasonable out-of-pocket expenses incurred by them (including reasonable fees and disbursements of outside counsel) which are related to or arise out of (A) any material misstatements or any material statements omitted to be
made in the Offering Memorandum (including any documents incorporated by reference therein) or (B) any claim by any third party relating to the offering or sale of the RVMTP Shares by the Issuer or the holding of the RVMTP Shares by the
Purchaser (x) that the Purchaser aided and abetted a breach of a fiduciary duty by the Issuer or any director or officer of the Issuer or (y) arising from any act by the Issuer or any director or officer of the Issuer (excluding in any such
case of either clauses (A) or (B), claims, losses, liabilities or expenses arising out of or resulting from the gross negligence or willful misconduct of any Indemnified Person as determined by a court of competent jurisdiction).
|
(c)
|
The indemnifying party also agrees that if any indemnification sought by an Indemnified Person pursuant to this Agreement is unavailable or insufficient, for any reason,
to hold harmless the Indemnified Persons of such other party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), then the indemnifying party, in order to provide for just and equitable contribution,
shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages and liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits
received by the Issuer on the one hand and the Purchaser on the other hand from the actual or proposed transactions giving rise to or contemplated by this Agreement or (ii) if the allocation provided by the foregoing clause (i) is not
permitted by applicable law, not only such relative benefits but also the relative fault of the Issuer on the one hand and the Purchaser on the other, in connection with the statements or omissions or alleged statements or omissions that
resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equitable considerations; provided that in any event the aggregate contribution of the Purchaser and its
Indemnified Persons to all losses, claims, damages, liabilities and expenses with respect to which contributions are available hereunder will not exceed the amount of dividends actually received by the Purchaser from the Issuer pursuant to
the proposed transactions giving rise to this Agreement. For purposes of determining the relative benefits to the Issuer on the one hand, and the Purchaser on the other, under the proposed transactions giving rise to or contemplated by
this Agreement, such benefits shall be deemed to be in the same proportion as (i) the net proceeds received or proposed to be received by the Issuer pursuant to the transactions, whether or not consummated bears to (ii) the dividends and
Optional Redemption Premium paid by the Issuer to the Purchaser in connection with the proposed transactions giving rise to or contemplated by this Agreement. The relative fault of the parties shall be determined by reference to, among
other things, whether the actions taken or omitted to be taken in connection with the proposed transactions contemplated by this Agreement (including any misstatement of a material fact or the omission to state a material fact) relates to
information supplied by the Issuer on the one hand, or the Purchaser on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, misstatement or alleged omission, and any
other equitable considerations appropriate in the circumstances. No Person found liable for a fraudulent misrepresentation shall be entitled to contribution from any Person who is not also found liable for such fraudulent
misrepresentation. The indemnity, reimbursement and contribution obligations under this Agreement shall be in addition to any rights that any Indemnified Person may have at common law or otherwise.
|
(d)
|
If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Person proposes to demand indemnification, it shall notify the indemnifying
party with reasonable promptness; provided, however, that any failure by such Indemnified Person to notify the indemnifying party shall not relieve the indemnifying party from its obligations hereunder (except to the extent that the
indemnifying party is materially prejudiced by such failure to promptly notify). The indemnifying party shall be entitled to assume the defense of any such action, suit, proceeding or investigation, including the employment of counsel
reasonably satisfactory to the Indemnified Person. The Indemnified Person shall have the right to counsel of its own choice to represent it, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the indemnifying party has failed promptly to assume the defense and employ counsel reasonably satisfactory to the Indemnified Person in accordance with the preceding sentence or (ii) the Indemnified Person shall have been
advised by counsel that there exist actual or potential conflicting interests between the indemnifying party and such Indemnified Person, including situations in which one or more legal defenses may be available to such Indemnified Person
that are different from or additional to those available to the indemnifying party; provided, however, that the indemnifying party shall not, in connection with any one such action or proceeding or separate but substantially similar actions
or proceedings arising out of the same general allegations be liable for fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Persons of such other party; and such counsel shall, to the extent
consistent with its professional responsibilities, cooperate with the indemnifying party and any counsel designated by the indemnifying party.
|
(e)
|
Nothing in this Section 7.3 is intended to limit any party's obligations contained in other parts of this Agreement or the RVMTP Shares.
|
7.4
|
Amendments and Waivers
|
7.5
|
Successors and Assigns
|
7.6
|
Term of this Agreement
|
7.7
|
Governing Law
|
7.8
|
Waiver of Jury Trial
|
7.9
|
Counterparts
|
7.10
|
Beneficiaries
|
7.11
|
Entire Agreement
|
7.12
|
Relationship to the Statement
|
7.13
|
Confidentiality
|
7.14
|
Severability
|
7.15
|
Consent Rights of the Majority Participants to Certain Actions.
|
(a)
|
The termination by the Issuer of any Rating Agency or the selection of any Other Rating Agency, either in replacement for a Rating Agency or as an additional Rating
Agency with respect to the RVMTP Shares.
|
(b)
|
The Issuer issuing or permitting to exist any "senior security" (as defined in the 1940 Act as of the date hereof or, in the event such definition shall be amended, with
such changes to the definition thereof as consented to by the Majority Participants) other than the RVMTP Shares issued and sold pursuant to this Agreement or indebtedness for borrowed money of the Issuer, except (i) borrowings for
temporary purposes in an amount not to exceed 5% of the assets of the Issuer, which borrowings are repaid within sixty (60) days of the incurrence thereof, (ii) the issuance of senior securities or the incurrence of indebtedness for
borrowed money, the proceeds of which will be used for the exchange, retirement, redemption or repurchase of the RVMTP Shares, and costs incurred in connection therewith, (iii) the Issuer’s previously issued and outstanding Series 2022 VMTP
Shares, (iv) the Issuer’s previously issued and outstanding Series 2049-A RVMTP Shares, (v) the issuance of additional series of Remarketable Variable Rate MuniFund Term Preferred Shares (including, but not limited to, any additional Series
of RVMTP Shares) or other Preferred Shares and (vi) as may be otherwise approved or consented to by the Majority Participants, provided that if any such "senior security" is created or incurred by the Issuer it shall not require the
approval of the Majority Participants if the Issuer exchanges, redeems, retires or terminates such "senior security" or otherwise cures such non-compliance within ten (10) Business Days of receiving notice of the existence thereof.
|
(c)
|
The Issuer (i) creating or incurring or permitting to be incurred or to exist any lien on any other funds, accounts or other property held under the Declaration or the
Statement, except as permitted by the Declaration or the Statement or (ii) except for any lien for the benefit of the Custodian of the Issuer on the assets of the Issuer held by such Custodian, or any lien arising by operation of law,
pledging any portfolio security to secure any senior securities or other liabilities to be incurred by the Issuer (including under any tender option bond trust (or similar vehicle used for providing financing for municipal obligations and
municipal closed-end fund preferred shares) of which the residual floating rate trust certificates will be owned by the Issuer) unless the securities pledged pursuant to all such pledge or other security arrangements are valued for purposes
of such security arrangements in an aggregate amount not less than 70% of their aggregate Market Value for purposes of determining the value of the collateral required to be posted or otherwise provided under all such security arrangements;
provided, that the required collateral value under such security arrangements shall not exceed the Market Value of the exposure of each secured party to the credit of the Issuer; and provided further, that it shall not require the approval
of the Majority Participants if any pledge or security interest in violation of the preceding sentence is created or incurred by the Issuer and the Issuer cures such violation within ten (10) Business Days of receiving notice of the
existence thereof.
|
(d)
|
Approval of any amendment, alteration or repeal of any provision of the Declaration or the Statement, whether by merger, consolidation or otherwise, that would affect any
preference, right or power of the RVMTP Shares or the Holders thereof provided, however, that (i) a change in the capitalization of the Issuer in accordance with Section 2.9 of the Statement shall not be considered to affect the rights and
preferences of the RVMTP Shares, and (ii) a division of an RVMTP Share shall be deemed to affect such preferences, rights or powers only if the terms of such division materially and adversely affect
the Holders of the RVMTP Shares. For purposes of the foregoing, no matter shall be deemed to affect any preference, right or power of an RVMTP Share of any Series or the Holder thereof unless such matter (A) alters or abolishes any
preferential right of such RVMTP Share, or (B) creates, alters or abolishes any right in respect of redemption of such RVMTP Share (other than solely as a result of a division of an RVMTP Share).
|
(e)
|
Approval of any action to be taken pursuant to Sections 2.6(h) and 2.16 of the Statement other than the issuance of additional series of Remarketable Variable Rate
MuniFund Term Preferred Shares, including, but not limited to, any additional Series of RVMTP Shares, or other Preferred Shares.
|
7.16
|
No Individual Liability
|
By: |
___/s/ Michael Jentis___________________
Name: Michael Jentis Title: Authorized Signatory |
By: |
____/s/ Michael Jentis___________________
Name: Michael Jentis Title: Authorized Signatory |
Description of RVMTP Shares: |
250 PIMCO Flexible Municipal Income Fund Remarketable Variable Rate MuniFund Term Preferred Shares, Series 2050-A with a Liquidation Preference of $100,000 per share, issued in exchange for the Purchase Price.
|
Legal Name of Purchaser
|
Address of Purchaser
|
Purchaser’s Taxpayer Identification Number
|
DTC Participant Number
|
FFC Account Number Account Number at Bank/Broker
|
Principal Amount of Securities to be Credited
|
CUSIP Number of Securities to be Credited
|
Banc of America Preferred Funding Corporation
|
One Bryant Park
1111 Avenue of the Americas, 9th Floor New York, NY 10036 |
75-2939570
|
901
|
790946
|
$25,000,000
|
72203E707
|
Amount of Proceeds
|
Fund Federal Reserve Wire Information
|
$25,000,000
|
Bank Name: State Street Bank and Trust Company, Boston
ABA No.: 0110-0002-8 Beneficiary Acct.: PX4A DDA: 1145-924-5
|
1. |
"Eligible Assets" are hereby defined to consist only of the following as of the time of investment:
|
A. |
Debt obligations
|
•
|
it provides for repayment of principal and interest in any form including fixed and floating rate, zero interest, capital appreciation, discount, leases, and payment in
kind; or
|
•
|
it is for long-term or short-term financing purposes.
|
B. |
Derivatives
|
i. |
Interest rate derivatives;
|
ii. |
Swaps, futures, forwards, structured notes, options and swaptions related to Eligible Assets or on an index related to Eligible Assets; or
|
iii. |
Credit default swaps.
|
C. |
Other Assets
|
i. |
Shares of other investment companies (open- or closed-end funds and ETFs) the assets of which consist entirely of Eligible Assets based on the Investment Manager's assessment of the assets of each such
investment company taking into account the investment company's most recent publicly available schedule of investments and publicly disclosed investment policies;
|
ii. |
Cash;
|
iii. |
Repurchase agreements on assets described in A above; or
|
iv. |
Taxable fixed-income securities, for the purpose of acquiring control of an issuer whose municipal bonds (a) the Issuer already owns and (b) have deteriorated or are expected shortly to deteriorate that such
investment should enable the Issuer to better maximize its existing investment in such Issuer, provided that the Issuer may invest no more than 0.5% of its total assets in such securities.
|
D. |
Assets not otherwise covered in A, B or C above that the Investment Manager may determine are in the best interest of shareholders of the Issuer to acquire in pursuing a workout arrangement with issuers (of the
types described in A above) of defaulted obligations, including, but not limited to, loans to the defaulted issuer or another party pursuant to the workout arrangement, or a debt, equity or other interest in the defaulted issuer or other
party to the workout arrangement, provided that the Issuer may not invest more than 2% of its total assets in any such assets. The Issuer agrees that it will only acquire equity securities pursuant to this Section 1.D. that it reasonably
expects at the time of acquisition to hold for a period not to exceed five (5) years from the date of acquisition.
|
E. |
Other assets, upon written agreement of all Holders of the RVMTP Shares ("Holders") that such assets are eligible for purchase by the Holders.
|
2. |
The Investment Manager has instituted policies and procedures that it believes are sufficient to ensure that the Issuer and it comply with the representations, warranties and covenants contained in this Exhibit
B to the Agreement.
|
3. |
The Issuer will, upon request, provide the Holder(s) and their internal and external auditors and inspectors as the Holder(s) may from time to time designate, with all reasonable assistance and access to
information and records of the Issuer relevant to the Issuer's compliance with and performance of the representations, warranties and covenants contained in this Exhibit B to the Agreement, but only for the purposes of internal and
external audit.
|
CUSIP
|
Portfolio Name
|
Description
|
Market Value
|
Par Value
|
Rating
|
State
|
[●]
|
[●]
|
[●]
|
[●]
|
[●]
|
[●]
|
[●]
|