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77E                          Legal Proceedings


PIMCO Commercial Mortgage Securities Trust, Inc.

Regulatory and Litigation Matters

On June 1, 2004, the Attorney General of the State of New Jersey announced
that it had dismissed PIMCO from acomplaint filed by the New Jersey
Attorney General on February 17, 2004, and that it had entered into
a settlement agreement (the "New Jersey Settlement") with PIMCO's parent
company, Allianz Global Investors of America L.P. ("AGI", formerly
known as Allianz Dresdner Asset Management of America L.P.), PEA
Capital LLC (an entity affiliated with PIMCO through common ownership)
("PEA") and PAD, in connection with the same matter. In the New Jersey
Settlement, AGI, PEA and PAD neither admitted nor denied the allegations
or conclusions of law, but did agree to pay New Jersey a civil fine of
$15 million and $3 million for investigative costs and further potential
enforcement initiatives against unrelated parties. They also undertook
to implement certain governance changes. The complaint relating to the
New Jersey Settlement alleged, among other things, that AGI, PEA and PAD
had failed to disclose that they improperly allowed certain hedge funds
to engage in "market timing" in certain funds. The complaint sought
injunctive relief, civil monetary penalties, restitution and disgorgement
of profits.

Since February 2004, PIMCO, AGI, PEA, PAD, and certain of their affiliates,
PIMCO Funds: Pacific Investment Management Series (the "PIMS Funds"),
PIMCO: Multi-Manager Series (the "MMS Funds"), and the directors of the
Fund (in their capacity as Trustees of the PIMS or MMS Funds), have been
named as defendants in 14 lawsuits filed in U.S. District Court in the
Southern District of New York, the Central District of California and the
Districts of New Jersey and Connecticut. Ten of those lawsuits concern
"market timing," and they have been transferred to and consolidated for
pre-trial proceedings in the U.S. District Court for the District of
Maryland; four of those lawsuits concern "revenue sharing" and have been
consolidated into a single action in the U.S. District Court for the
District of Connecticut. The lawsuits have been commenced as putative
class actions on behalf of investors who purchased, held or redeemed
shares of the various series of the PIMS Funds and the MMS Funds during
specified periods, or as derivative actions on behalf of the PIMS and
MMS Funds.

The market timing actions in the District of Maryland generally allege
that certain hedge funds were allowed to engage in "market timing" in
certain of the MMS and PIMS Funds and this alleged activity was not
disclosed. Pursuant to tolling agreements entered into with the
derivative and class action plaintiffs, PIMCO, the PIMS Funds' trustees,
and certain employees of PIMCO who were previously named as defendants
have all been dropped as defendants in the market timing actions; the
plaintiffs continue to assert claims on behalf of the shareholders of
the PIMS Funds or on behalf of the PIMS Funds themselves against other
defendants. The revenue sharing action in the District of Connecticut
generally alleges that fund assets were inappropriately used to pay
brokers to promote the MMS and PIMS Funds, including directing fund
brokerage transactions to such brokers, and that such alleged
arrangements were not fully disclosed to shareholders. The market
timing and revenue sharing lawsuits seek, among other things,
unspecified compensatory damages plus interest and, in some cases,
punitive damages, the rescission of investment advisory contracts,
the return of fees paid under those contracts and restitution.

Under Section 9(a) of the Investment Company Act of 1940, as amended
("1940 Act"), if the New Jersey Settlement or any of the lawsuits
described above were to result in a court injunction against AGI,
PEA, PAD and/or their affiliates, PIMCO could, in the absence of
exemptive relief granted by the Securities and Exchange Commission
("SEC"), be barred from serving as an investment adviser, and PAD
could be barred from serving as principal underwriter, to any
registered investment company, including the Fund. In connection with
an inquiry from the SEC concerning the status of the New Jersey
Settlement under Section 9(a), PEA, PAD, AGI and certain of their
affiliates (including PIMCO) (together, the "Applicants") have
sought exemptive relief from the SEC under Section 9(c) of the 1940
Act. The SEC has granted the Applicants a temporary exemption from
the provisions of Section 9(a) with respect to the New Jersey
Settlement until the earlier of (i) September 13, 2006 and (ii)
the date on which the SEC takes final action on their application
for a permanent order. There is no assurance that the SEC will
issue a permanent order.

None of the aforementioned complaints alleges that any improper activity
took place in the Fund. PIMCO believes that these developments will
not have a material adverse effect on the Fund or on PIMCO's ability
to perform its investment advisory services on behalf of the Fund.


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