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<SEC-DOCUMENT>0000927016-02-003367.txt : 20020625
<SEC-HEADER>0000927016-02-003367.hdr.sgml : 20020625
<ACCEPTANCE-DATETIME>20020625083541
ACCESSION NUMBER:		0000927016-02-003367
CONFORMED SUBMISSION TYPE:	N-2/A
PUBLIC DOCUMENT COUNT:		23
FILED AS OF DATE:		20020625

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PIMCO NEW YORK MUNICIPAL INCOME FUND II
		CENTRAL INDEX KEY:			0001170311
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		N-2/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-86284
		FILM NUMBER:		02685928

	BUSINESS ADDRESS:	
		STREET 1:		1345 AVENUE OF THE AMERICAS, 47TH FL
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10105

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PIMCO NEW YORK MUNICIPAL INCOME FUND II
		CENTRAL INDEX KEY:			0001170311
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		N-2/A
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21078
		FILM NUMBER:		02685929

	BUSINESS ADDRESS:	
		STREET 1:		1345 AVENUE OF THE AMERICAS, 47TH FL
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10105
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2/A
<SEQUENCE>1
<FILENAME>dn2a.txt
<DESCRIPTION>PIMCO NY MUNI INCOME II AMENDMENT #2 TO FORM N-2
<TEXT>
<PAGE>



    As filed with the Securities and Exchange Commission on June 25, 2002


================================================================================

                                                     1933 Act File No. 333-86284
                                                     1940 Act File No. 811-21078


                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    Form N-2

[X]      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X]      Pre-Effective Amendment No. 2
[_]      Post-Effective Amendment No.
                  and
[X]      REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]      Amendment No. 2



                     PIMCO New York Municipal Income Fund II
         (Exact Name of Registrant as Specified in Declaration of Trust)

                          c/o PIMCO Funds Advisors LLC
                          1345 Avenue of the Americas
                           New York, New York 10105
                   (Address of Principal Executive Offices)
                    (Number, Street, City, State, Zip Code)

                                (212) 739-3502
             (Registrant's Telephone Number, including Area Code)

                              Stephen J. Treadway
                       c/o PIMCO Funds Distributors LLC
                             2187 Atlantic Street
                          Stamford, Connecticut 06902
(Name and Address (Number, Street, City, State, Zip Code) of Agent for Service)

                         Copies of Communications to:
Joseph B. Kittredge, Jr., Esq.                     Thomas A. Hale
        Ropes & Gray                  Skadden, Arps, Slate, Meagher & Flom LLP
  One International Place                 333 West Wacker Drive, Suite 2100
Boston, Massachusetts 02110                       Chicago, IL 60606


                  Approximate Date of Proposed Public Offering:

As soon as practicable after the effective date of this Registration Statement
                           ---------------------------

<PAGE>

     If any of the securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. [_]

     It is proposed that this filing will become effective (check appropriate
box)

     [X]  when declared effective pursuant to section 8(c)

                           ---------------------------

<TABLE>
<CAPTION>

                           CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
- --------------------------------------------------------------------------------------------------------------------------
                                                              Proposed Maximum     Proposed Maximum
                                         Amount Being        Offering Price Per       Aggregate             Amount of
Title of Securities Being Registered      Registered                Unit           Offering Price/1/   Registration Fee/2/
- ------------------------------------     ------------        ------------------    ----------------    -------------------
<S>                                   <C>                 <C>                   <C>                 <C>
Common Shares, par value $0.00001      9,000,000 Shares        $ 15.00              $ 135,000,000           $ 12,420
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>


/1/ Estimated solely for the purpose of calculating the registration fee.
/2/ $1.38 of which has previously been paid.

    The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such dates as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================


<PAGE>

The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an
offer to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.


   PRELIMINARY PROSPECTUS                 Subject to Completion June 25, 2002
   --------------------------------------------------------------------------


        Shares

[LOGO] PIMCO
FUNDS
[LOGO] PIMCO New York Municipal Income Fund II
Common Shares

- --------------------------------------------------------------------------------

Investment Objective.  The Fund is a newly organized, non-diversified,
closed-end management investment company. The Fund's investment objective is to
provide current income exempt from federal, New York State and New York City
income tax. In pursuing this objective, the portfolio manager also seeks to
preserve and enhance the value of the Fund's holdings relative to the municipal
bond market generally, using proprietary analytical models that test and
evaluate the sensitivity of those holdings to changes in interest rates and
yield relationships.

Portfolio Contents.  Under normal market conditions, the Fund will invest
substantially all (at least 90%) of its total assets in municipal bonds which
pay interest that, in the opinion of bond counsel to the issuer (or on the
basis of other authority believed by the Fund's portfolio manager to be
reliable), is exempt from federal, New York State and New York City income
taxes. The Fund will at all times seek to avoid bonds generating interest
potentially subjecting individuals to the alternative minimum tax. The Fund
will invest at least 80% of its net assets in investment grade quality
municipal bonds, including bonds that are unrated but judged to be of
investment grade quality by the Fund's portfolio manager. The Fund may invest
up to 20% of its net assets in municipal bonds that are rated Ba/BB or B or
that are unrated but judged to be of comparable quality by the Fund's portfolio
manager. The Fund cannot assure you that it will achieve its investment
objective.

No Prior History.  Because the Fund is newly organized, its common shares have
no history of public trading. Shares of closed-end investment companies
frequently trade at a discount from their net asset value and investors may
lose money by purchasing common shares in the initial public offering. The
common shares have been authorized for listing on the New York Stock Exchange,
subject to notice of issuance. The trading or "ticker" symbol of the common
shares is expected to be "PNI."

Before buying any common shares you should read the discussion of the material
risks of investing in the Fund in "Risks" beginning on page 16. Certain of
these risks are summarized in "Prospectus Summary--Special Risk Considerations"
beginning on page 4.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this Prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.

<TABLE>
<CAPTION>
                                                   Price to            Proceeds
                                                     Public Sales Load  to Fund
- -------------------------------------------------------------------------------
<S>                                                <C>      <C>        <C>
Per Share                                           $15.000     $0.675  $14.325
- -------------------------------------------------------------------------------
Total                                               $           $       $
- -------------------------------------------------------------------------------
</TABLE>

In addition to the sales load, the Fund will pay organizational and offering
expenses of up to $0.03 per share, estimated to total $    , which will reduce
the "Proceeds to Fund" (above). PIMCO Funds Advisors LLC has agreed to pay the
amount by which the aggregate of all of the Fund's organizational expenses and
all offering costs (other than the sales load) exceeds $0.03 per share.

The underwriters expect to deliver the common shares to purchasers on or
about          , 2002.

     UBS Warburg                                         Merrill Lynch & Co.
A.G. Edwards & Sons, Inc.  Prudential Securities        Quick & Reilly, Inc.
Raymond James               RBC Capital Markets          Wachovia Securities
Advest, Inc.                                           Fahnestock & Co. Inc.

<PAGE>

- --------------------------------------------------------------------------------

(continued from previous page)

The Fund intends to use leverage by issuing shares of preferred stock
representing approximately 38% of the Fund's capital immediately after their
issuance. The Fund also may add leverage to the portfolio by utilizing residual
interest municipal bonds and other derivative instruments. By using leverage,
the Fund will seek to obtain a higher return for holders of common shares than
if the Fund did not use leverage. Leveraging is a speculative technique and
there are special risks involved. There can be no assurance that a leveraging
strategy will be used or that it will be successful during any period in which
it is employed. See "Preferred shares and related leverage," "Risks--Leverage
Risk" and "Risks--Derivatives Risk."


You should read this Prospectus, which contains important information about the
Fund, before deciding whether to invest, and retain it for future reference. A
Statement of Additional Information, dated June 25, 2002, containing additional
information about the Fund, has been filed with the Securities and Exchange
Commission and is incorporated by reference in its entirety into this
Prospectus, which means that it is part of the Prospectus for legal purposes.
You can review the table of contents of the Statement of Additional Information
on page 39 of this Prospectus. You may request a free copy of the Statement of
Additional Information by calling (877) 819-2224 or by writing to the Fund, or
obtain a copy (and other information regarding the Fund) from the Securities
and Exchange Commission's web site (http://www.sec.gov).


The Fund's common shares do not represent a deposit or obligation of, and are
not guaranteed or endorsed by, any bank or other insured depository
institution, and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.

The underwriters named in this Prospectus may purchase up to        additional
common shares from the Fund under certain circumstances.

You should rely only on the information contained or incorporated by reference
in this Prospectus. The Fund has not, and the underwriters have not, authorized
anyone to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. The Fund is
not, and the underwriters are not, making an offer of these securities in any
state where the offer is not permitted. You should not assume that the
information contained in this Prospectus is accurate as of any date other than
the date on the front of this Prospectus. The Fund's business, financial
condition, results of operations and prospects may have changed since that date.


Until July 20, 2002 (25 days after the date of this Prospectus), all dealers
that buy, sell or trade the common shares, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.


TABLE OF CONTENTS
- --------------------------------------------------------------------------------

<TABLE>
<S>                                                          <C>
Prospectus Summary..........................................  1
Summary of Fund expenses....................................  7
The Fund....................................................  9
Use of proceeds.............................................  9
The Fund's investments......................................  9
Preferred shares and related leverage....................... 14
Risks....................................................... 16
How the Fund manages risk................................... 23
Management of the Fund...................................... 24
Net asset value............................................. 27
Distributions............................................... 27
Dividend reinvestment plan.................................. 28
</TABLE>


<TABLE>
<S>                                                          <C>
Description of shares....................................... 29
Anti-takeover and other provisions in the Declaration of
  Trust..................................................... 31
Repurchase of Common Shares; conversion to open-end fund.... 33
Tax matters................................................. 33
Underwriting................................................ 36
Shareholder servicing agent, custodian and transfer agent... 38
Legal matters............................................... 39
Table of contents for the statement of additional
  information............................................... 40
</TABLE>


- --------------------------------------------------------------------------------

<PAGE>

Prospectus Summary

This is only a summary. You should review the more detailed information
contained in this Prospectus and in the Statement of Additional Information.

THE FUND

PIMCO New York Municipal Income Fund II (the "Fund") is a newly organized,
non-diversified, closed-end management investment company. The Fund is designed
to provide tax benefits to investors who are residents of New York. See "The
Fund."

THE OFFERING

The Fund is offering       common shares of beneficial interest, with a par
value of $0.00001 per share, at $15.00 per share through a group of
underwriters (the "Underwriters") led by UBS Warburg LLC and Merrill Lynch,
Pierce, Fenner & Smith Incorporated. The common shares of beneficial interest
are called "Common Shares" in the rest of this Prospectus. You must purchase at
least 100 Common Shares. The Fund has given the Underwriters an option to
purchase up to       additional Common Shares to cover orders in excess of
      Common Shares. See "Underwriting." PIMCO Funds Advisors LLC (the
"Manager"), the Fund's investment manager, has agreed to pay the amount by
which the aggregate of all of the Fund's organizational expenses and all
offering costs (other than the sales load) exceeds $0.03 per Common Share.

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to provide current income exempt from
federal, New York State and New York City income tax. In pursuing this
objective, the portfolio manager also seeks to preserve and enhance the value
of the Fund's holdings relative to the municipal bond market generally, using
proprietary analytical models that test and evaluate the sensitivity of those
holdings to changes in interest rates and yield relationships. Under normal
market conditions, the Fund will invest substantially all (at least 90%) of its
total assets in municipal bonds which pay interest that, in the opinion of bond
counsel to the issuer (or on the basis of other authority believed by the
Fund's portfolio manager to be reliable), is exempt from federal, New York
State and New York City income taxes ("New York Municipal Bonds"). The Fund
will invest at least 80% of its net assets in municipal bonds that at the time
of investment are investment grade quality. Investment grade quality bonds are
bonds rated, at the time of investment, within the four highest grades (Baa or
BBB or better by Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
("S&P") or Fitch, Inc. ("Fitch")), or bonds that are unrated but judged to be
of comparable quality by the Fund's portfolio manager. The Fund may invest up
to 20% of its net assets in municipal bonds that, at the time of investment,
are rated Ba/BB or B by Moody's, S&P or Fitch or that are unrated but judged to
be of comparable quality by the Fund's portfolio manager. Bonds of below
investment grade quality are regarded as having predominantly speculative
characteristics with respect to capacity to pay interest and repay principal,
and are commonly referred to as "junk bonds." Bonds in the lowest investment
grade category may also be considered to possess some speculative
characteristics by certain rating agencies. The Fund will at all times seek to
avoid bonds generating interest potentially subjecting individuals to the
alternative minimum tax.

The Fund may invest in "structured" notes, which are privately negotiated debt
obligations where the principal and/or interest is determined by reference to
the performance of a benchmark asset, market or interest rate, such as selected
securities, an index of securities or specified interest rates, or the
differential performance of two assets or markets, such as indices reflecting
taxable and tax-exempt bonds. The Fund currently intends that any use of
structured notes will be for the purpose of reducing the interest rate

                                                                             1

<PAGE>

sensitivity of the Fund's portfolio (and thereby decreasing the Fund's exposure
to interest rate risk) and, in any event, that the interest income on the notes
will normally be exempt from federal, New York State and New York City income
tax. The Fund may utilize a variety of derivative instruments, including
residual interest municipal bonds ("RIBS"), to add leverage to the portfolio or
for investment or risk management purposes. See "Risks--Leverage Risk" and
"Risks--Derivatives Risk."

The Fund will invest primarily in municipal bonds with long-term maturities in
order to maintain a weighted average maturity of 15-30 years, but the weighted
average maturity of obligations held by the Fund may be shortened, depending on
market conditions.

The Fund cannot assure you that it will attain its investment objective. See
"The Fund's investments."

PROPOSED OFFERING OF PREFERRED SHARES AND OTHER FORMS OF LEVERAGE

Subject to market conditions, approximately one to three months after
completion of this offering, the Fund intends to offer preferred shares of
beneficial interest ("Preferred Shares") representing approximately 38% of the
Fund's capital after their issuance. The issuance of Preferred Shares will
leverage your investment in Common Shares. Leverage involves special risks.
There is no assurance that the Fund will issue Preferred Shares or that, if
issued, the Fund's leveraging strategy will be successful. The net proceeds the
Fund obtains from selling the Preferred Shares will be invested, in accordance
with the Fund's investment objective and policies, principally in long-term
municipal bonds, which generally will pay fixed rates of interest over the life
of the bond. The Preferred Shares will pay dividends based on short-term
interest rates, which will be reset frequently. So long as the rate of return,
net of applicable Fund expenses, on the long-term bonds and other instruments
purchased by the Fund exceeds Preferred Share dividend rates as reset
periodically, the investment of the proceeds of the Preferred Shares will
generate more income than will be needed to pay dividends on the Preferred
Shares. If so, the excess will be used to pay higher dividends to holders of
Common Shares ("Common Shareholders") than if the Fund were not so leveraged
through the issuance of Preferred Shares. The Fund also may add leverage to the
portfolio by utilizing RIBS and other derivative instruments. See
"Risks--Leverage Risk." The Fund cannot assure you that the issuance of
Preferred Shares or the use of other forms of leverage will result in a higher
yield on your Common Shares. Once Preferred Shares are issued and/or other
forms of leverage are used, the net asset value and market price of the Common
Shares and the yield to Common Shareholders will be more volatile. See
"Preferred shares and related leverage," "Description of shares--Preferred
Shares" and "Risks--Leverage Risk."

INVESTMENT MANAGER

The Manager serves as the investment manager of the Fund. Subject to the
supervision of the Board of Trustees, the Manager is responsible for managing,
either directly or through others selected by it, the investment activities of
the Fund and the Fund's business affairs and other administrative matters. The
Manager will receive an annual fee, payable monthly, in a maximum amount equal
to 0.65% of the Fund's average daily net assets (including assets attributable
to any Preferred Shares that may be outstanding). The Manager has contractually
agreed to waive a portion of the management fees it is entitled to receive from
the Fund at the annual rate of 0.15% of the Fund's average daily net assets
from the commencement of operations through June 30, 2007 (i.e., roughly the
first five years of operations), and for a declining amount for an additional
two years of operations (through June 30, 2009). The Manager is located at 1345
Avenue of the Americas, New York, New York 10105. Organized in 2000, the
Manager provides investment management and advisory services to several
closed-end and open-end investment company clients. As of December 31, 2001,
the Manager had approximately $80 billion in assets under management. Allianz
Dresdner Asset Management of America L.P. is the direct parent

2

<PAGE>

company of PIMCO Advisory Services Holdings LLC, of which the Manager is a
wholly-owned subsidiary. As of March 31, 2002, Allianz Dresdner Asset
Management of America L.P. and its subsidiary partnerships, including Pacific
Investment Management Company LLC ("PIMCO"), had approximately $336 billion in
assets under management.

The Manager has retained its affiliate, PIMCO, as a sub-adviser to manage the
Fund's portfolio investments. See "--Portfolio Manager" below.

PORTFOLIO MANAGER

PIMCO will serve as the Fund's sub-adviser responsible for managing the Fund's
portfolio investments, and is sometimes referred to herein as the "portfolio
manager." Subject to the supervision of the Manager, PIMCO has full investment
discretion and makes all determinations with respect to the investment of the
Fund's assets.

PIMCO is located at 840 Newport Center Drive, Newport Beach, California 92660.
Organized in 1971, PIMCO provides investment management and advisory services
to private accounts of institutional and individual clients and to mutual
funds. As of March 31, 2002, PIMCO had approximately $254 billion in assets
under management.

The Manager (and not the Fund) will pay a portion of the fees it receives to
PIMCO in return for PIMCO's services.

DISTRIBUTIONS

Commencing with the Fund's first dividend, the Fund intends to make regular
monthly cash distributions to you at a rate based on the projected performance
of the Fund. The dividend rate that the Fund pays on its Common Shares will
depend on a number of factors, including dividends payable on the Preferred
Shares. As portfolio and market conditions change, the rate of dividends on the
Common Shares and the Fund's dividend policy could change. Over time, the Fund
will distribute substantially all of its net investment income (after it pays
accrued dividends on any outstanding Preferred Shares). In addition, at least
annually, the Fund intends to distribute to you your pro rata share of any
available net capital gain. Your initial distribution is expected to be
declared approximately 45 days, and paid approximately 60 to 90 days, from the
completion of this offering, depending on market conditions. Unless you elect
to receive distributions in cash, all of your distributions will be
automatically reinvested in additional Common Shares under the Fund's Dividend
Reinvestment Plan. See "Distributions" and "Dividend reinvestment plan."

LISTING

The Common Shares have been authorized for listing on the New York Stock
Exchange, subject to notice of issuance. The trading or "ticker" symbol of the
Common Shares is expected to be "PNI." See "Description of shares--Common
Shares."

SHAREHOLDER SERVICING AGENT, CUSTODIAN AND TRANSFER AGENT

UBS Warburg LLC will serve as a shareholder servicing agent for the Fund. State
Street Bank and Trust Co. will serve as custodian of the Fund's assets. PFPC
Inc. will serve as the Fund's transfer and dividend disbursement agent. See
"Shareholder servicing agent, custodian and transfer agent."

                                                                             3

<PAGE>

MARKET PRICE OF SHARES

Shares of closed-end investment companies frequently trade at prices lower than
net asset value. Shares of closed-end investment companies like the Fund that
invest predominantly in investment grade municipal bonds have during some
periods traded at prices higher than net asset value and during other periods
traded at prices lower than net asset value. The Fund cannot assure you that
Common Shares will trade at a price higher than net asset value in the future.
Net asset value will be reduced immediately following the offering by the sales
load and the amount of organization and offering expenses paid by the Fund. See
"Use of proceeds." In addition to net asset value, market price may be affected
by such factors relating to the Fund and its portfolio holdings as dividend
levels (which are in turn affected by expenses), dividend stability, portfolio
credit quality and liquidity and call protection and market supply and demand.
See "Preferred shares and related leverage," "Risks," "Description of shares,"
and "Repurchase of Common Shares; conversion to open-end fund" in this
Prospectus, and the Statement of Additional Information under "Repurchase of
Common Shares; Conversion to Open-End Fund." The Common Shares are designed
primarily for long-term investors, and you should not view the Fund as a
vehicle for trading purposes.

SPECIAL RISK CONSIDERATIONS

No Operating History
The Fund is a newly organized, non-diversified, closed-end management
investment company with no history of operations.

Market Discount Risk
Shares of closed-end management investment companies like the Fund frequently
trade at a discount from their net asset value.

Interest Rate Risk
Generally, when market interest rates fall, bond prices rise, and vice versa.
Interest rate risk is the risk that the municipal bonds in the Fund's portfolio
will decline in value because of increases in market interest rates. The prices
of longer-term bonds generally fluctuate more than prices of shorter-term bonds
as interest rates change. Because the Fund will invest primarily in long-term
bonds, the Common Share net asset value and market price per share will
fluctuate more in response to changes in market interest rates than if the Fund
invested primarily in short-term bonds. The Fund may utilize certain
strategies, including investments in "structured" notes, for the purpose of
reducing the interest rate sensitivity of the portfolio and decreasing the
Fund's exposure to interest rate risk, although there is no assurance that it
will do so or that such strategies will be successful. The Fund's use of
leverage, as described below, will tend to increase Common Share interest rate
risk. See "Risks--Interest Rate Risk" for additional information.

Credit Risk
Credit risk is the risk that one or more debt obligations in the Fund's
portfolio will decline in price, or fail to pay interest or principal when due,
because the issuer of the obligation experiences a decline in its financial
status. The Fund may invest up to 20% (measured at the time of investment) of
its net assets in municipal bonds that are rated Ba/BB or B or that are unrated
but judged to be of comparable quality by PIMCO. The prices of these lower
grade bonds are more sensitive to negative developments, such as a decline in
the issuer's revenues or a general economic downturn, than are the prices of
higher grade securities. Municipal bonds of below investment grade quality
(commonly referred to as "junk bonds") are predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal when due,
and therefore involve a greater risk of default. Municipal bonds in the lowest
investment

4

<PAGE>

grade category may also be considered to possess some speculative
characteristics by certain rating agencies.

State-Specific Risk
The Fund's policy of investing substantially all of its assets in New York
Municipal Bonds makes the Fund more susceptible to adverse economic, political
or regulatory occurrences affecting the issuers of such bonds.

Municipal Bond Market Risk
The amount of public information available about the municipal bonds in the
Fund's portfolio is generally less than that for corporate equities or bonds,
and the investment performance of the Fund may therefore be more dependent on
the analytical abilities of PIMCO than would be a stock fund or taxable bond
fund. The secondary market for municipal bonds, particularly below investment
grade bonds in which the Fund may invest, also tends to be less well-developed
and less liquid than many other securities markets, which may adversely affect
the Fund's ability to sell its bonds at attractive prices.

Reinvestment Risk
Income from the Fund's municipal bond portfolio will decline if and when the
Fund invests the proceeds from matured, traded or called bonds at market
interest rates that are below the portfolio's current earnings rate. A decline
in income could affect the Common Shares' market price or their overall return.

Leverage Risk
The Fund's use of leverage through the issuance of Preferred Shares creates an
opportunity for increased Common Share net income, but also creates special
risks for Common Shareholders. There is no assurance that the Fund's leveraging
strategy will be successful. It is anticipated that dividends on Preferred
Shares will be based on short-term municipal bond rates of return (which would
be redetermined periodically, pursuant to an auction process), and that the
Fund will invest the net proceeds of the Preferred Shares offering principally
in long-term, typically fixed rate, municipal bonds. So long as the Fund's
municipal bond portfolio provides a higher rate of return (net of Fund
expenses) than the Preferred Share dividend rate, as reset periodically, the
leverage will allow Common Shareholders to receive a higher current rate of
return than if the Fund were not leveraged. If, however, short-term tax-exempt
interest rates rise substantially after the issuance of the Preferred Shares,
the Preferred Shares dividend rate could approach or exceed the acquisition
yield on long-term bonds and other investments held by the Fund that were
acquired during periods of generally lower interest rates, reducing
distribution yields and returns to Common Shareholders. Investment by the Fund
in RIBS and other derivative instruments may increase the Fund's leverage and,
during periods of rising interest rates, may adversely affect the Fund's
income, distributions and total returns to Common Shareholders. See "The Fund's
investments" for a discussion of these instruments. Preferred Shares are
expected to pay cumulative dividends, which may tend to increase leverage risk.
Leverage creates two major types of risks for Common Shareholders:

...  the likelihood of greater volatility of net asset value and market price of
   Common Shares, because changes in the value of the Fund's municipal bond
   portfolio (including securities bought with the proceeds of the Preferred
   Shares offering) are borne entirely by the Common Shareholders; and

...  the possibility either that Common Share income will fall if the Preferred
   Share dividend rate rises, or that Common Share income will fluctuate
   because the Preferred Share dividend rate varies.

Because the fees received by the Manager are based on the total net assets of
the Fund (including assets represented by Preferred Shares and any leverage
created thereby), the Manager has a financial incentive for the Fund to issue
Preferred Shares, which may create a conflict of interest between the Manager
and the holders of the Common Shares.

                                                                             5

<PAGE>

Inflation Risk
Inflation risk is the risk that the value of assets or income from the Fund's
investments will be worth less in the future as inflation decreases the present
value of payments at future dates.

Liquidity Risk
The Fund may invest up to 20% of its net assets in securities which are
illiquid at the time of investment, which means a security that cannot be sold
within seven days at a price which approximates fair value. Illiquid securities
may trade at a discount from comparable, more liquid investments, and may be
subject to wide fluctuations in market value. Also, the Fund may not be able to
dispose of illiquid securities when that would be beneficial at a favorable
time or price.

Derivatives Risk
The Fund may utilize a variety of derivative instruments for investment or risk
management purposes, such as RIBS, structured notes, options contracts, futures
contracts, options on futures contracts, swap agreements, short sales and
delayed delivery and forward commitment transactions. Derivatives are subject
to a number of risks described elsewhere in this Prospectus, such as liquidity
risk, interest rate risk, credit risk and management risk. In addition,
investment by the Fund in RIBS and other derivative instruments may increase
the Fund's leverage and, during periods of rising interest rates, may adversely
affect the Fund's income, distributions and total returns to Common
Shareholders. Derivatives also involve the risk of mispricing or improper
valuation, the risk of ambiguous documentation, and the risk that changes in
the value of a derivative may not correlate perfectly with an underlying asset,
interest rate or index. Suitable derivative transactions may not be available
in all circumstances and there can be no assurance that the Fund will engage in
these transactions to reduce exposure to other risks when that would be
beneficial.

Management Risk
The Fund is subject to management risk because it is an actively managed
investment portfolio. PIMCO and the individual portfolio manager will apply
investment techniques and risk analyses in making investment decisions for the
Fund, but there can be no guarantee that these will produce the desired results.

Non-Diversification Risk
Because the Fund is classified as "non-diversified" under the Investment
Company Act of 1940, as amended, and the rules and regulations thereunder (the
"1940 Act"), it can invest a greater portion of its assets in obligations of a
single issuer. As a result, the Fund will be more susceptible than a more
widely diversified fund to any single corporate, economic, political or
regulatory occurrence.

Anti-Takeover Provisions
The Fund's Amended and Restated Agreement and Declaration of Trust (the
"Declaration") includes provisions that could limit the ability of other
entities or persons to acquire control of the Fund or convert the Fund to
open-end status. See "Anti-takeover and other provisions in the Declaration of
Trust." These provisions in the Declaration could have the effect of depriving
the Common Shareholders of opportunities to sell their Common Shares at a
premium over the then current market price of the Common Shares.

Tax Considerations
The Fund's distributions of ordinary taxable income (including any net
short-term capital gain) will be taxable to shareholders as ordinary income,
and capital gain dividends will be subject to capital gains taxes. See "Tax
matters."

6

<PAGE>

Summary of Fund expenses

The following table assumes the issuance of Preferred Shares in an amount equal
to 38% of the Fund's capital (after their issuance), and shows Fund expenses as
a percentage of net assets attributable to Common Shares. Footnote 2 to the
table also shows Fund expenses as a percentage of net assets attributable to
Common Shares, but assumes that no Preferred Shares are issued or outstanding
(such as will be the case prior to the Fund's expected issuance of Preferred
Shares).

<TABLE>
    <S>                                                            <C>
    Shareholder Transaction Expenses
       Sales Load Paid by You (as a percentage of offering price). 4.50%
       Dividend Reinvestment Plan Fees............................  None(1)
</TABLE>

<TABLE>
<CAPTION>
                                                    Percentage of
                                                       Net Assets
                                                  Attributable to
                                                    Common Shares
                                                    (assuming the
                                                      issuance of
                                                        Preferred
                                                       Shares)(2)
              <S>                                 <C>
              --------------------------------------------------

              Annual Expenses
                 Management Fees.................       1.05%
                 Other Expenses..................       0.32%
                 Total Annual Expenses...........       1.37%
                 Fee Waiver (Years 1-5)..........     (0.24)%(3)
                 Net Annual Expenses (Years 1-5).       1.13%(3)
</TABLE>

(1) You will pay brokerage charges if you direct the plan agent to sell your
    Common Shares held in a dividend reinvestment account.

(2) The table presented in this footnote estimates what the Fund's annual
    expenses would be stated as percentages of the Fund's net assets
    attributable to Common Shares but, unlike the table above, assumes that no
    Preferred Shares are issued or outstanding. This will be the case, for
    instance, prior to the Fund's expected issuance of Preferred Shares. In
    accordance with these assumptions, the Fund's expenses would be estimated
    to be as follows:

<TABLE>
<CAPTION>
                                                            Percentage of
                                                               Net Assets
                                                          Attributable to
                                                            Common Shares
                                                             (assuming no
                                                         Preferred Shares
                                                            are issued or
                                                             outstanding)
         <S>                                             <C>
         -------------------------------------------------------
            Annual Expenses
                Management Fees.........................       0.65%
                Other Expenses..........................       0.15%
                Total Annual Expenses...................       0.80%
                Fees Waiver (Years 1-5).................     (0.15)%(3)
                Net Annual Expenses (Years 1-5).........       0.65%(3)
</TABLE>

(3) The Manager has contractually agreed to waive a portion of the management
    fees it is entitled to receive from the Fund at the annual rate of 0.15% of
    the Fund's average daily net assets from the commencement of operations
    through June 30, 2007 (i.e., roughly the first 5 years of Fund operations),
    0.10% of average daily net

                                                                             7

<PAGE>

   assets in year 6 and 0.05% in year 7. The Manager has not agreed to waive
   any portion of its fees and expenses beyond June 30, 2009. Without the fee
   waiver, "Net Annual Expenses" would be estimated to be 1.37% of average
   daily net assets attributable to Common Shares (assuming the issuance of
   Preferred Shares) and 0.80% of average daily net assets attributable to
   Common Shares (assuming no Preferred Shares are issued or outstanding). The
   Manager has agreed to pay the amount by which the aggregate of all of the
   Fund's organizational expenses and all offering costs (other than the sales
   load) exceeds $0.03 per Common Share.

The purpose of the table above is to help you understand all fees and expenses
that you, as a Common Shareholder, would bear directly or indirectly. The Other
Expenses shown in the table and related footnotes are based on estimated
amounts for the Fund's first year of operations and assume that the Fund issues
approximately 6.7 million Common Shares. See "Management of the Fund" and
"Dividend reinvestment plan."

As required by relevant Securities and Exchange Commission regulations, the
following example illustrates the expenses (including the sales load of $45)
that you would pay on a $1,000 investment in Common Shares, assuming (a) total
net annual expenses of 1.13% of net assets attributable to Common Shares
(assuming the issuance of Preferred Shares) in years 1 through 5, increasing to
1.37% in years 8, 9 and 10, and (b) a 5% annual return (1):

<TABLE>
<CAPTION>
                      1 Year 3 Years 5 Years 10 Years (2)
                      -----------------------------------
                      <S>    <C>     <C>     <C>
                       $56     $79    $104       $188
</TABLE>

The example above should not be considered a representation of future expenses.
Actual expenses may be higher or lower than those shown.

(1) The example assumes that the estimated Other Expenses set forth in the
    Annual Expenses table are accurate, that fees and expenses increase as
    described in note 2 below, and that all dividends and distributions are
    reinvested at net asset value. Actual expenses may be greater or less than
    those assumed. Moreover, the Fund's actual rate of return may be greater or
    less than the hypothetical 5% annual return shown in the example.

(2) Assumes waiver of management fees at the annual rate of 0.10% of the Fund's
    average daily net assets in year 6, 0.05% in year 7 and no waiver in years
    8, 9 and 10. The Manager has not agreed to waive any portion of the
    management fees it is entitled to receive from the Fund beyond June 30,
    2009. See "Management of the Fund--Investment Management Agreement."

8

<PAGE>

- --------------------------------------------------------------------------------

The Fund

The Fund is a recently organized, non-diversified, closed-end management
investment company registered under the 1940 Act. The Fund was organized as a
Massachusetts business trust on March 29, 2002 pursuant to the Declaration,
which is governed by the laws of The Commonwealth of Massachusetts. As a newly
organized entity, the Fund has no operating history. The Fund's principal
office is located at 1345 Avenue of the Americas, New York, New York 10105, and
its telephone number is (212) 739-3369. The Fund is designed to provide tax
benefits to investors who are residents of New York.

Use of proceeds

The net proceeds of the offering of Common Shares will be approximately
$      (or $      if the Underwriters exercise the over-allotment option in
full) after payment of the estimated organizational and offering costs. The
Manager has agreed to pay the amount by which the aggregate of all of the
Fund's organizational expenses and all offering costs (other than the sales
load) exceeds $0.03 per Common Share. The Fund will invest the net proceeds of
the offering in accordance with the Fund's investment objective and policies as
stated below. It is presently anticipated that the Fund will be able to invest
substantially all of the net proceeds in municipal bonds that meet its
investment objective and policies within three months after the completion of
the offering. Pending such investment, it is anticipated that the proceeds will
be invested in high quality, short-term, tax-exempt securities, although the
Fund may, if necessary, also invest in other high quality, short-term
securities, including mortgage-backed and corporate debt securities, that may
be either tax-exempt or taxable.

The Fund's investments

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to provide current income exempt from
federal, New York State and New York City income tax. In pursuing this
objective, PIMCO also seeks to preserve and enhance the value of the Fund's
holdings relative to the municipal bond market generally, using proprietary
analytical models that test and evaluate the sensitivity of those holdings to
changes in interest rates and yield relationships.

PIMCO may at times believe that bonds associated with a particular municipal
market sector (for example, electric utilities), issued by a particular
municipal issuer, or having particular structural characteristics, are
undervalued. PIMCO may purchase such a bond for the Fund's portfolio because it
represents a market sector or issuer that PIMCO considers undervalued, even if
the value of the particular bond appears to be consistent with the value of
similar bonds. Municipal bonds of particular types (e.g., hospital bonds,
industrial revenue bonds or bonds issued by a particular municipal issuer) may
be undervalued because there is a temporary excess of supply in that market
sector, or because of a general decline in the market price of municipal bonds
of the market sector for reasons that do not apply to the particular municipal
bonds that are considered undervalued. The Fund's investment in municipal bonds
may be based on PIMCO's belief that their yield and/or total return potential
is higher than that available on bonds bearing similar levels of interest rate
risk, credit risk and other forms of risk, or that their value relative to the
municipal bond market is less sensitive to these risks. The Fund attempts to
increase its portfolio value relative to the municipal bond market generally by
prudent selection of

- --------------------------------------------------------------------------------

                                                                             9

<PAGE>

The Fund's investments
- --------------------------------------------------------------------------------

municipal bonds regardless of the direction the market may move. Any capital
appreciation realized by the Fund will generally result in the distribution of
taxable capital gains to Common Shareholders.

Under normal market conditions, the Fund will invest substantially all (at
least 90%) of its total assets in New York Municipal Bonds.

Under normal market conditions, the Fund will invest at least 80% of its net
assets in municipal bonds which are of investment grade quality at the time of
investment, including bonds that are unrated but judged to be of investment
grade quality by PIMCO. Investment grade quality means that such bonds are
rated, at the time of investment, within the four highest grades (Baa or BBB or
better by Moody's, S&P or Fitch) or are unrated but judged to be of comparable
quality by PIMCO. The Fund may invest up to 20% of its net assets in municipal
bonds that are rated, at the time of investment, Ba/BB or B by Moody's, S&P or
Fitch or that are unrated but judged to be of comparable quality by PIMCO.
Bonds of below investment grade quality (Ba/BB or below) are commonly referred
to as "junk bonds." Bonds of below investment grade quality are regarded as
having predominantly speculative characteristics with respect to capacity to
pay interest and repay principal. Bonds in the lowest investment grade category
may also be considered to possess some speculative characteristics by certain
rating agencies. The foregoing credit quality policies apply only at the time a
security is purchased, and the Fund is not required to dispose of a security in
the event that a rating agency or PIMCO downgrades its assessment of the credit
characteristics of a particular issue. In determining whether to retain or sell
such a security, PIMCO may consider such factors as PIMCO's assessment of the
credit quality of the issuer of such security, the price at which such security
could be sold and the rating, if any, assigned to such security by other rating
agencies. A general description of Moody's, S&P's and Fitch's ratings of
municipal bonds is set forth in Appendix A to the Statement of Additional
Information. See "Municipal Bonds" below for a general description of the
economic and credit characteristics of municipal issuers in New York. The Fund
may also invest up to 10% of its net assets in securities of other open- or
closed-end investment companies that invest primarily in municipal bonds of the
types in which the Fund may invest directly. As a stockholder in an investment
company, the Fund would bear its ratable share of that investment company's
expenses in addition to the Fund's own expenses. See "--Other Investment
Companies" below.

The Fund may purchase municipal bonds that are additionally secured by
insurance, bank credit agreements, or escrow accounts. The credit quality of
companies which provide such credit enhancements will affect the value of those
securities. Although the insurance feature reduces certain financial risks, the
premiums for insurance and the higher market price paid for insured obligations
may reduce the Fund's income. Insurance generally will be obtained from
insurers with a claims-paying ability rated Aaa by Moody's or AAA by S&P or
Fitch. The insurance feature does not guarantee the market value of the insured
obligations or the net asset value of the Common Shares.

Upon PIMCO's recommendation, for temporary defensive purposes, the Fund may
invest up to 100% of its net assets in high quality, short-term investments,
including mortgage-backed and corporate debt securities, that may be either
tax-exempt or taxable. The Fund may also invest without limit in these
securities temporarily in order to keep the Fund's cash fully invested,
including during the period in which the net proceeds of this offering are
being invested. The Fund intends to invest in taxable short-term investments
only in the event that suitable tax-exempt short-term investments are not
available at reasonable prices and yields. Investment in taxable short-term
investments would result in a portion of your dividends being subject to
federal, New York State and New York City income taxes. For more information,
see the Statement of Additional Information.

The Fund cannot change its investment objective without the approval of the
holders of a "majority of the outstanding" Common Shares and Preferred Shares
voting together as a single class, and of the

- --------------------------------------------------------------------------------

10

<PAGE>

The Fund's investments
- --------------------------------------------------------------------------------

holders of a "majority of the outstanding" Preferred Shares voting as a
separate class. A "majority of the outstanding" shares (whether voting together
as a single class or voting as a separate class) means (i) 67% or more of such
shares present at a meeting, if the holders of more than 50% of those shares
are present or represented by proxy, or (ii) more than 50% of such shares,
whichever is less. See "Description of shares--Preferred Shares--Voting Rights"
in this Prospectus and in the Statement of Additional Information under
"Description of Shares--Preferred Shares--Voting Rights" for additional
information with respect to the voting rights of holders of Preferred Shares.

The Fund will at all times seek to avoid bonds generating interest potentially
subjecting individuals to the federal alternative minimum tax. Nonetheless, the
Fund may not be successful in this regard and if you are, or as a result of an
investment in the Fund would become, subject to the federal alternative minimum
tax, the Fund may not be a suitable investment for you. Special alternative
minimum tax rules apply to corporate holders. In addition, capital gain
dividends will be subject to capital gains taxes. See "Tax matters."

The following provides additional information regarding the types of securities
and other instruments in which the Fund will ordinarily invest. A more detailed
discussion of these and other instruments and investment techniques that may be
used by the Fund is provided under "Investment Objective and Policies" in the
Statement of Additional Information.

MUNICIPAL BONDS

Municipal bonds are either general obligation or revenue bonds and typically
are issued to finance public projects (such as roads or public buildings), to
pay general operating expenses, or to refinance outstanding debt. General
obligation bonds are backed by the full faith and credit, or taxing authority,
of the issuer and may be repaid from any revenue source; revenue bonds may be
repaid only from the revenues of a specific facility or source. The Fund also
may purchase municipal bonds that represent lease obligations. These carry
special risks because the issuer of the bonds may not be obligated to
appropriate money annually to make payments under the lease. In order to reduce
this risk, the Fund will only purchase municipal bonds representing lease
obligations where PIMCO believes the issuer has a strong incentive to continue
making appropriations until maturity.

The New York Municipal Bonds in which the Fund will invest are generally issued
by the State of New York, a city in New York, or a political subdivision,
agency, authority or instrumentality of such state or city.

The yields on municipal bonds depend on a variety of factors, including
prevailing interest rates and the condition of the general money market and the
municipal bond market, the size of a particular offering, the maturity of the
obligation and the rating of the issue. The market value of municipal bonds
will vary with changes in interest rate levels and as a result of changing
evaluations of the ability of their issuers to meet interest and principal
payments.

The Fund will invest primarily in municipal bonds with long-term maturities in
order to maintain a weighted average maturity of 15-30 years, but the weighted
average maturity of obligations held by the Fund may be shortened, depending on
market conditions.

WHEN ISSUED, DELAYED DELIVERY AND FORWARD COMMITMENT TRANSACTIONS

The Fund may purchase securities which it is eligible to purchase on a
when-issued basis, may purchase and sell such securities for delayed delivery
and may make contracts to purchase such securities for a

- --------------------------------------------------------------------------------

                                                                             11

<PAGE>

The Fund's investments
- --------------------------------------------------------------------------------

fixed price at a future date beyond normal settlement time (forward
commitments). When-issued transactions, delayed delivery purchases and forward
commitments involve a risk of loss if the value of the securities declines
prior to the settlement date. The risk is in addition to the risk that the
Fund's other assets will decline in value. Therefore, these transactions may
result in a form of leverage and increase the Fund's overall investment
exposure. Typically, no income accrues on securities the Fund has committed to
purchase prior to the time delivery of the securities is made, although the
Fund may earn income on securities it has segregated to cover these positions.

STRUCTURED NOTES

The Fund may invest in "structured" notes, which are privately negotiated debt
obligations where the principal and/or interest is determined by reference to
the performance of a benchmark asset, market or interest rate, such as selected
securities, an index of securities or specified interest rates, or the
differential performance of two assets or markets, such as indices reflecting
taxable and tax-exempt bonds. Depending on the terms of the note, the Fund may
forgo all or part of the interest and principal that would be payable on a
comparable conventional note. The rate of return on structured notes may be
determined by applying a multiplier to the performance or differential
performance of the referenced index(es) or other asset(s). Application of a
multiplier involves leverage that will serve to magnify the potential for gain
and the risk of loss.

The Fund currently intends that any use of structured notes will be for the
purpose of reducing the interest rate sensitivity of the Fund's portfolio (and
thereby decreasing the Fund's exposure to interest rate risk) and, in any
event, that the interest income on the notes will normally be exempt from
federal, New York State and New York City income tax. The Fund will only invest
in structured notes if it has received an opinion of counsel for the issuer (or
the advice of another authority believed by PIMCO to be reliable) that the
interest income on the notes will be exempt from federal income tax. Like other
sophisticated strategies, the Fund's use of structured notes may not work as
intended; for example, the change in value of the structured notes may not
match very closely the change in the value of bonds that the structured notes
were purchased to hedge.

VARIABLE AND FLOATING RATE SECURITIES

Variable and floating rate securities provide for a periodic adjustment in the
interest rate paid on the obligations. The Fund may invest in floating rate
debt instruments ("floaters") and engage in credit spread trades. While
floaters provide a certain degree of protection against rising interest rates,
the Fund will participate in any decline in interest rates as well. A credit
spread trade is an investment position relating to a difference in the prices
or interest rates of two bonds or other securities, where the value of the
investment position is determined by changes in the difference between such
prices or interest rates, as the case may be, of the respective securities.

RESIDUAL INTEREST MUNICIPAL BONDS (RIBS)

The Fund may also invest up to 10% of its total assets in RIBS, whose interest
rates bear an inverse relationship to the interest rate on another security or
the value of an index. An investment in RIBS typically will involve greater
risk than an investment in a fixed rate bond. Because increases in the interest
rate on the other security or index reduce the residual interest paid on a RIB,
the value of a RIB is generally more volatile than that of a fixed rate bond.
RIBS have interest rate adjustment formulas that generally reduce or, in the
extreme, eliminate the interest paid to the Fund when short-term interest rates
rise, and increase the interest paid to the Fund when short-term interest rates
fall. RIBS have varying degrees of liquidity that approximate the liquidity of
the underlying bond(s), and the market price for these securities is volatile.
These securities generally will underperform the market of fixed rate bonds in
a rising interest rate environment, but tend to outperform the market of fixed
rate bonds when interest

- --------------------------------------------------------------------------------

12

<PAGE>

The Fund's investments
- --------------------------------------------------------------------------------

rates decline or remain relatively stable. Although volatile, RIBS typically
offer the potential for yields exceeding the yields available on fixed rate
bonds with comparable credit quality, coupon, call provisions and maturity. The
Fund may also invest in RIBS for the purpose of increasing the Fund's leverage
as a more flexible alternative to the issuance of Preferred Shares. Should
short-term and long-term interest rates rise, the combination of the Fund's
investment in RIBS and its use of other forms of leverage (including through
the issuance of Preferred Shares or the use of other derivative instruments)
likely will adversely affect the Fund's net asset value per share and income
and distributions to shareholders. Trusts in which RIBS may be held could be
terminated, in which case the residual bond holder would take possession of the
underlying bond(s) on an unleveraged basis.

OTHER INVESTMENT COMPANIES

The Fund may invest up to 10% of its net assets in securities of other open- or
closed-end investment companies that invest primarily in municipal bonds of the
types in which the Fund may invest directly. The Fund may invest in other
investment companies either during periods when it has large amounts of
uninvested cash, such as the period shortly after the Fund receives the
proceeds of the offering of its Common Shares or Preferred Shares, during
periods when there is a shortage of attractive, high-yielding municipal bonds
available in the market, or when PIMCO believes share prices of other
investment companies offer attractive values. The Fund may invest in investment
companies that are advised by PIMCO or its affiliates to the extent permitted
by applicable law and/or pursuant to exemptive relief from the Securities and
Exchange Commission. As a stockholder in an investment company, the Fund will
bear its ratable share of that investment company's expenses, and would remain
subject to payment of the Fund's management fees and other expenses with
respect to assets so invested. Common Shareholders would therefore be subject
to duplicative expenses to the extent the Fund invests in other investment
companies. PIMCO will take expenses into account when evaluating the investment
merits of an investment in an investment company relative to available
municipal bond investments. In addition, the securities of other investment
companies may also be leveraged and will therefore be subject to the same
leverage risks described herein. As described in the section entitled "Risks,"
the net asset value and market value of leveraged shares will be more volatile
and the yield to shareholders will tend to fluctuate more than the yield
generated by unleveraged shares.

DERIVATIVES

The Fund may, but is not required to, use a variety of derivative instruments
to add leverage to the portfolio, for risk management purposes or as part of
its investment strategies. Generally, derivatives are financial contracts whose
value depends upon, or is derived from, the value of an underlying asset,
reference rate or index, and may relate to individual debt instruments,
interest rates and related indexes. Examples of derivative instruments that the
Fund may use include RIBS, structured notes, options contracts, futures
contracts, options on futures contracts, swap agreements, short sales and
delayed delivery and forward commitment transactions. The Fund's use of
derivative instruments involves risks different from, or possibly greater than,
the risks associated with investment directly in securities and other more
traditional investments. See "Risks--Derivatives Risk." Certain types of
derivative instruments that the Fund may utilize with some frequency are
described elsewhere in this section, including those described under
"--Structured Notes" and "--Residual Interest Municipal Bonds (RIBS)" above.
Please see "Investment Objective and Policies--Derivative Instruments" in the
Statement of Additional Information for additional information about these and
other derivative instruments that the Fund may use and the risks associated
with such instruments. Income earned by the Fund from many derivatives
transactions will be treated as capital gain and, if not offset by net realized
capital loss, will be distributed to shareholders in taxable distributions.

Please see "Investment Objective and Policies" in the Statement of Additional
Information for additional information regarding the investments of the Fund
and their related risks.

- --------------------------------------------------------------------------------

                                                                             13

<PAGE>

- --------------------------------------------------------------------------------


Preferred shares and related leverage

Subject to market conditions, approximately one to three months after the
completion of the offering of the Common Shares, the Fund intends to offer
Preferred Shares representing approximately 38% of the Fund's capital
immediately after the issuance of the Preferred Shares. The Preferred Shares
will have complete priority upon distribution of assets over the Common Shares.
The issuance of Preferred Shares will leverage the Common Shares. Leverage
involves special risks and there is no assurance that the Fund's leveraging
strategies will be successful. Although the timing and other terms of the
offering of the Preferred Shares will be determined by the Fund's Board of
Trustees, the Fund expects to invest the net proceeds of the Preferred Shares
principally in long-term municipal bonds. The Preferred Shares will pay
dividends based on short-term rates (which would be redetermined periodically
by an auction process). So long as the Fund's portfolio is invested in
securities that provide a higher rate of return than the dividend rate of the
Preferred Shares (after taking expenses into consideration), the leverage will
allow Common Shareholders to receive a higher current rate of return than if
the Fund were not leveraged.
Changes in the value of the Fund's municipal bond portfolio (including
investments bought with the proceeds of the Preferred Shares offering) will be
borne entirely by the Common Shareholders. If there is a net decrease (or
increase) in the value of the Fund's investment portfolio, the leverage will
decrease (or increase) the net asset value per Common Share to a greater extent
than if the Fund were not leveraged. During periods in which the Fund is using
leverage, the fees paid to the Manager will be higher than if the Fund did not
use leverage because the fees paid will be calculated on the basis of the
Fund's total net assets, including the proceeds from the issuance of Preferred
Shares.

For tax purposes, the Fund is currently required to allocate net capital gain
and other taxable income, if any, between and among the Common Shares and any
series of Preferred Shares in proportion to total distributions paid to each
class for the taxable year in which the net capital gain or other taxable
income is realized. If net capital gain or other taxable income is allocated to
Preferred Shares (instead of solely tax-exempt income), the Fund will have to
pay higher total dividends to Preferred Shareholders or make dividend payments
intended to compensate Preferred Shareholders for the unanticipated
characterization of a portion of their dividends as taxable ("Gross-up
Dividends"). This would reduce any advantage of the Fund's leveraged structure
to Common Shareholders.

Under the 1940 Act, the Fund is not permitted to issue Preferred Shares unless
immediately after such issuance the value of the Fund's total net assets is at
least 200% of the liquidation value of the outstanding Preferred Shares plus
the aggregate amount of any senior securities of the Fund representing
indebtedness (i.e., such liquidation value plus the aggregate amount of senior
securities representing indebtedness may not exceed 50% of the Fund's total net
assets). In addition, the Fund is not permitted to declare any cash dividend or
other distribution on its Common Shares unless, at the time of such
declaration, the value of the Fund's total net assets satisfies the
above-referenced 200% coverage requirement. If Preferred Shares are issued, the
Fund intends, to the extent possible, to purchase or redeem Preferred Shares
from time to time to the extent necessary in order to maintain coverage of at
least 200%. If the Fund has Preferred Shares outstanding, two of the Fund's
Trustees will be elected by the holders of Preferred Shares, voting separately
as a class. The remaining Trustees of the Fund will be elected by holders of
Common Shares and Preferred Shares voting together as a single class. In the
event the Fund failed to pay dividends on Preferred Shares for two years,
Preferred Shareholders would be entitled to elect a majority of the Trustees of
the Fund.

The Fund may be subject to certain restrictions imposed by guidelines of one or
more rating agencies that may issue ratings for Preferred Shares issued by the
Fund. These guidelines may impose asset coverage or

- --------------------------------------------------------------------------------

14

<PAGE>

Preferred shares and related leverage
- --------------------------------------------------------------------------------

portfolio composition requirements that are more stringent than those imposed
on the Fund by the 1940 Act. It is not anticipated that these covenants or
guidelines will impede PIMCO from managing the Fund's portfolio in accordance
with the Fund's investment objective and policies.

Assuming that the Preferred Shares will represent approximately 38% of the
Fund's capital and pay dividends at an annual average rate of 2.00%, the income
generated by the Fund's portfolio (net of expenses) would have to exceed 0.76%
in order to cover such dividend payments. Of course, these numbers are merely
estimates, used for illustration. Actual Preferred Share dividend rates will
vary frequently and may be significantly higher than the rate identified above.

The following table is furnished in response to requirements of the Securities
and Exchange Commission. It is designed to illustrate the effect of leverage on
Common Share total return, assuming investment portfolio total returns
(consisting of income and changes in the value of investments held in the
Fund's portfolio) of -10%, -5%, 0%, 5% and 10%. These assumed investment
portfolio returns are hypothetical figures and are not necessarily indicative
of the investment portfolio returns expected to be experienced by the Fund. The
table further assumes the issuance of Preferred Shares representing
approximately 38% of the Fund's total capital, a 5.75% yield on the Fund's
investment portfolio, net of expenses, and the Fund's currently projected
annual Preferred Share dividend rate of 2.00%. See "Risks."

<TABLE>
      <S>                            <C>      <C>     <C>     <C>   <C>
      Assumed Portfolio Total Return (10.00)% (5.00)%   0.00% 5.00% 10.00%
      Common Share Total Return..... (17.20)% (9.20)% (1.20)% 6.80% 14.80%
</TABLE>

Common Share total return is composed of two elements--the Common Share
dividends paid by the Fund (the amount of which is largely determined by the
net investment income of the Fund after paying dividends on Preferred Shares)
and gains or losses on the value of the securities the Fund owns. As required
by Securities and Exchange Commission rules, the table assumes that the Fund is
more likely to suffer capital losses than to enjoy capital appreciation. For
example, to assume a total return of 0%, the Fund must assume that the
tax-exempt interest it receives on its municipal bond investments is entirely
offset by losses in the value of those investments.

Other Forms of Leverage and Borrowings
In addition to the issuance of Preferred Shares, the Fund may use a variety of
additional strategies to add leverage to the portfolio. These include the use
of RIBS and other derivative instruments. By adding additional leverage, these
strategies have the potential to increase returns to Common Shareholders, but
also involve additional risks. Additional leverage will increase the volatility
of the Fund's investment portfolio and could result in larger losses than if
the strategies were not used.

Under the 1940 Act, the Fund generally is not permitted to engage in borrowings
(including through the use of derivatives to the extent that these instruments
constitute senior securities) unless immediately after a borrowing the value of
the Fund's total assets less liabilities (other than the borrowing) is at least
300% of the principal amount of such borrowing (i.e., such principal amount may
not exceed 33 1/3% of the Fund's total assets). In addition, the Fund is not
permitted to declare any cash dividend or other distribution on Common Shares
unless, at the time of such declaration, the value of the Fund's total assets,
less liabilities other than borrowing, is at least 300% of such principal
amount. If the Fund borrows, it intends, to the extent possible, to prepay all
or a portion of the principal amount of the borrowing to the extent necessary
in order to maintain the required asset coverage. Failure to maintain

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                                                                             15

<PAGE>

Preferred shares and related leverage
- --------------------------------------------------------------------------------

certain asset coverage requirements could result in an event of default and
entitle Preferred Shareholders to elect a majority of the Trustees of the Fund.
Derivative instruments used by the Fund will not constitute senior securities
(and will not be subject to the Fund's limitations on borrowings) to the extent
that the Fund segregates liquid assets at least equal in amount to its
obligations under the instruments, or enters into offsetting transactions or
owns positions covering its obligations. For instance, the Fund may cover its
position in a forward purchase commitment by segregating liquid assets in an
amount sufficient to meet the purchase price.

The Fund also may borrow money in order to repurchase its shares or as a
temporary measure for extraordinary or emergency purposes, including for the
payment of dividends or the settlement of securities transactions which
otherwise might require untimely dispositions of Fund securities.

Risks

The net asset value of the Common Shares will fluctuate with and be affected
by, among other things, market discount risk, interest rate risk, credit risk,
state-specific risk, municipal bond market risk, reinvestment risk, leverage
risk, inflation risk, liquidity risk, derivatives risk, management risk and
non-diversification risk. An investment in Common Shares will also be subject
to the risk associated with the fact that the Fund is newly organized. These
risks are summarized below.

NEWLY ORGANIZED

The Fund is a newly organized, non-diversified, closed-end management
investment company and has no operating history.

MARKET DISCOUNT RISK

Shares of closed-end management investment companies frequently trade at a
discount from their net asset value.

INTEREST RATE RISK

Interest rate risk is the risk that bonds (and the Fund's net assets) will
decline in value because of changes in interest rates. Generally, municipal
bonds will decrease in value when interest rates rise and increase in value
when interest rates decline. This means that the net asset value of the Common
Shares will fluctuate with interest rate changes and the corresponding changes
in the value of the Fund's municipal bond holdings. The value of the
longer-term bonds in which the Fund generally invests normally fluctuates more
in response to changes in interest rates than does the value of shorter-term
bonds. Because the Fund will invest primarily in long-term bonds, the Common
Share net asset value and market price per share will fluctuate more in
response to changes in market interest rates than if the Fund invested
primarily in shorter-term bonds. The Fund's use of leverage, as described
below, will tend to increase Common Share interest rate risk. The Fund may
invest up to 10% of its total assets in RIBS. Compared to similar fixed rate
municipal obligations, the value of RIBS will fluctuate to a greater extent in
response to changes in prevailing long-term interest rates. Moreover, the
income earned on RIBS will fluctuate in response to changes in prevailing
short-term interest rates. Thus, when RIBS are held by the Fund, an increase in
short- or long-term market interest rates will adversely affect the income
received from such bonds or the net asset value of the Fund's shares. The Fund
may utilize certain strategies, including investments in structured notes, for
the purpose of reducing the interest rate sensitivity of the portfolio and
decreasing the Fund's exposure to interest rate risk, although there is no
assurance that it will do so or that such strategies will be successful. See
"How the Fund manages risk--Hedging and Related Strategies."

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16

<PAGE>

Risks
- --------------------------------------------------------------------------------


CREDIT RISK

The Fund could lose money if the issuer of a municipal bond, or the
counterparty to a derivatives contract or other obligation, is unable or
unwilling to make timely principal and/or interest payments, or to otherwise
honor its obligations. In general, lower rated municipal bonds carry a greater
degree of risk that the issuer will lose its ability to make interest and
principal payments, which could have a negative impact on the Fund's net asset
value or dividends. The Fund may invest up to 20% of its net assets in
municipal bonds that are rated Ba/BB or B by Moody's, S&P or Fitch or that are
unrated but judged to be of comparable quality by PIMCO. Bonds rated Ba/BB or B
are regarded as having predominantly speculative characteristics with respect
to capacity to pay interest and repay principal, and these bonds are commonly
referred to as "junk bonds." The prices of these lower grade bonds are more
sensitive to negative developments, such as a decline in the issuer's revenues
or a general economic downturn, than are the prices of higher grade securities.
Municipal bonds in the lowest investment grade category may also be considered
to possess some speculative characteristics by certain rating agencies.

STATE-SPECIFIC RISK


As described above, under normal market conditions, the Fund will invest
substantially all of its net assets in New York Municipal Bonds. The Fund is
therefore susceptible to political, economic or regulatory factors affecting
issuers of New York State (the "State") and New York City (the "City")
municipal bonds. The following information provides only a brief summary of the
complex factors affecting the financial situation in the State and is derived
from sources that are generally available to investors. The information is
intended to give a recent historical description and is not intended to
indicate future or continuing trends in the financial or other positions of the
State and the City. It should be noted that the creditworthiness of obligations
issued by local New York issuers may be unrelated to the creditworthiness of
obligations issued by the State and the City, and that there is no obligation
on the part of the State to make payment on such local obligations in the event
of default.



The events of September 11, 2001 had a significant impact upon the State
economy generally and more directly on that of the City. The City and State
expect, based on actions of the U.S. Congress and the President, that they will
be fully reimbursed for the cost to recover from, clean up and repair the
consequences of the World Trade Center attack. However, prior to September 11,
the nation's and the State's economies had been weakening and the loss of over
seventy thousand jobs in the City as a direct result of September 11 has
produced material budgetary pressures including increases to later year budget
gaps for the City and reductions to State surpluses. The City of New York
Executive Budget Fiscal Year 2003 released by the Mayor of the City on April
17, 2002 (the "City Executive Budget"), projects total revenue lost to the City
as a result of September 11 during the 2002-2006 fiscal years will be $3.9
billion and that expenses over the same period have increased by $6.1 billion
from projections prepared prior to September 11. On June 19, 2002, the Mayor
and the City Council announced a budget agreement which, while it restored some
of the Funds cut in the City Executive Budget adopted the City Executive Budget
with no material changes.


New York State has historically been one of the wealthiest states in the
nation. For decades, however, the State's economy grew more slowly than that of
the nation as a whole, gradually eroding the State's relative economic
affluence, as urban centers lost the more affluent to the suburbs and people
and business migrated to the South and West. However, since 1999, prior to the
impacts of September 11, the growth of the State's economy has equaled or
exceeded national trends. The State has for many years had a very high state
and local tax burden relative to other states. The burden of state and local
taxation, in combination with the many other causes of regional economic
dislocation, has contributed to the decisions of some businesses and
individuals to relocate outside, or not locate within, the State and

- --------------------------------------------------------------------------------

                                                                             17

<PAGE>

Risks
- --------------------------------------------------------------------------------

remains an impediment to growth and job creation. The State's and the City's
economies remain more reliant on the securities industry than is the national
economy. As a result, the downturn in that industry prior to September 11,
resulted in adverse changes in wage and employment levels.


The State ended its 2000-2001 fiscal year with a cash surplus of approximately
$1.1 billion. In its January 22, 2002 quarterly update, in part as a result of
September 11, the State projected a decline in economic growth and lower
employment levels in 2002. As a result of declines in State employment, Wall
Street bonuses, and non-wage income levels, personal income is expected to
decline in 2001-2002 and increase minimally in 2002-2003. In the quarterly
update, the State Division of the Budget projected a closing balance in the
General Fund of $2.1 billion in 2001-2002. The State noted that there are
significant risk factors that could result in a reduction in economic activity
statewide such as greater job losses, weaker financial markets and smaller
bonus payments by Wall Street firms.



The Governor presented his 2002-03 Executive Budget (the "State Executive
Budget") to the Legislature on January 22, 2002 which contained financial
projections for the State's 2001-02 through 2004-05 fiscal years. The State
Executive Budget projected a total budget gap of $6.8 billion in the 2001-02
and 2002-03 Fiscal years.



On May 15, 2002, the Governor and legislative leaders announced that they had
come to an agreement on a final balance 2002-03 State Budget (the "State
Budget"). The agreement includes actions to close the budget gap previously
identified in the State Executive Budget plus an additional $1.4 billion gap
identified in March and April 2002. Under the State Budget, taxpayer-supported
General Fund spending falls by nearly $1 billion, or 2.6 percent. General Fund
spending will total $40.2 billion. All Funds spending will increase by less
than 1 percent (0.8%) from that proposed in the State Executive Budget and will
total $89.6 billion.



The State Budget includes a series of one-time actions to close this budget
gap. These actions included using $1.2 billion of available cash reserves and
other fund balances; implementing a tax amnesty program; offering early
retirement to state workers; and converting hard dollar capital financing to
bonding while reducing overall capital authorizations. The State's Tax
Stabilization Reserve Fund, a fund to address unforeseen budget needs, will be
maintained at $710 million.



On April 17, 2002, the Mayor of the City released the City Executive Budget for
fiscal year 2003 (July 1, 2002 to June 30, 2003), which includes a financial
plan for fiscal years 2003 through 2006. The City Executive Budget incorporates
a number of steps to close a projected $5.0 billion budget gap, including city
agency cuts ranging up to 36%, staffing changes requiring union consent,
stretching out some elements of the City's four year construction plan to five
years, debt restructuring and asset sales and proposed State and federal
initiatives to generate up to $2.2 billion of gap closing actions in fiscal
year 2003 and an aggregate of $5.5 billion in fiscal years 2004 through 2006.
The Mayor has also proposed that the City issue $1.5 billion of its general
obligation bonds in fiscal year 2003 to help close the budget gap. As a result
of extraordinary actions to address the impact of September 11, the City
Executive Budget projects a budget surplus of $322 million in the 2002 fiscal
year and budget gaps of $5.2 billion, $5.6 billion and $6.0 billion,
respectively, for the 2004, 2005 and 2006 fiscal years prior to any gap closing
actions. Some of the gap closing measures proposed in the City Executive Budget
for fiscal year 2003 have recurring effects and are projected to reduce the
fiscal year 2004, 2005 and 2006 budget gaps to $2.7 billion, $3.1 billion and
$3.6 billion, respectively. The Mayor proposed to close these outyear gaps
through unspecified additional City agency cuts, federal and State initiatives
and other actions. As noted above, the City Council and the Mayor have reached
a budget agreement which adopts the City Executive Budget with no material
changes.


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18

<PAGE>

Risks
- --------------------------------------------------------------------------------


The City depends on aid from the State and federal government to both enable
the City to balance its budget and to meet its cash requirements. The City
Financial Plan provides for an additional $800 million in State and federal aid
in fiscal year 2003 alone. If State or federal aid for fiscal year 2003 or
thereafter is less than the level projected in the Mayor's proposal, projected
savings may be negatively impacted and the Mayor may be required to propose
significant additional spending reductions or tax increases to balance the
City's budget. If the State, the State agencies, the City, other municipalities
or school districts were to suffer serious financial difficulties jeopardizing
their respective access to the public credit markets, or increasing the risk of
a default, the market price of municipal bonds issued by such entities could be
adversely affected.


As of May 23, 2002, Moody's rated the City's outstanding general obligation
bonds A2, S&P rated such bonds A and Fitch rated such bonds A+. There can be no
assurance that, after review of the State Budget and the agreement between the
Mayor and the City Council regarding the City Executive Budget, their ratings
of the City's general obligation bonds will remain unchanged. Such ratings
reflect only the view of Moody's, S&P's and Fitch, from which an explanation of
the significance of such ratings may be obtained. There is no assurance that
such ratings will continue for any given period of time or that they will not
be revised downward or withdrawn entirely. Any such downward revision or
withdrawal could have an adverse effect on the market prices of City bonds and
could increase the City's borrowing costs. See "Factors Pertaining to New York"
in the Statement of Additional Information for more information about New York.
Moody's has given the State's general obligation bonds a rating of A2, S&P had
given the bonds a rating of AA and Fitch had given the bonds a rating of AA.
These ratings reflect the City's and the State's credit quality only, and do
not indicate the creditworthiness of tax-exempt securities of other issuers in
which the Fund may invest. Furthermore, it cannot be assumed that the City or
the State will maintain their current credit ratings.


The foregoing information constitutes only a brief summary of some of the
general factors that may impact certain issuers of New York Municipal Bonds and
does not purport to be a complete or exhaustive description of all adverse
conditions to which the issuers of such bonds held by the Fund are subject.
Additionally, many factors including national economic, social and
environmental policies and conditions, which are not within the control of the
issuers of New York Municipal Bonds, could affect or could have an adverse
impact on the financial condition of the issuers. The Fund is unable to predict
whether or to what extent such factors or other factors may affect the issuers
of New York Municipal Bonds, the market value or marketability of such bonds or
the ability of the respective issuers of the bonds acquired by the Fund to pay
interest on or principal of such bonds.

For a more detailed description of these and other risks affecting investment
in New York Municipal Bonds, see "Appendix B--Factors Pertaining to New York"
in the Statement of Additional Information.

MUNICIPAL BOND MARKET RISK

Investing in the municipal bond market involves certain risks. The amount of
public information available about the municipal bonds in the Fund's portfolio
is generally less than that for corporate equities or bonds, and the investment
performance of the Fund may therefore be more dependent on the analytical
abilities of PIMCO than would be a stock fund or taxable bond fund. The
secondary market for municipal bonds, particularly the below investment grade
bonds in which the Fund may invest, also tends to be less well-developed or
liquid than many other securities markets, which may adversely affect the
Fund's ability to sell its bonds at attractive prices.

The ability of municipal issuers to make timely payments of interest and
principal may be diminished during general economic downturns and as
governmental cost burdens are reallocated among federal,

- --------------------------------------------------------------------------------

                                                                             19

<PAGE>

Risks
- --------------------------------------------------------------------------------

state and local governments. In addition, laws enacted in the future by
Congress or state legislatures or referenda could extend the time for payment
of principal and/or interest, or impose other constraints on enforcement of
such obligations, or on the ability of municipal issuers to levy taxes. Issuers
of municipal securities might seek protection under the bankruptcy laws. In the
event of bankruptcy of such an issuer, the Fund could experience delays in
collecting principal and interest and the Fund may not, in all circumstances,
be able to collect all principal and interest to which it is entitled. To
enforce its rights in the event of a default in the payment of interest or
repayment of principal, or both, the Fund may take possession of, and manage,
the assets securing the issuer's obligations on such securities, which may
increase the Fund's operating expenses. Any income derived from the Fund's
ownership or operation of such assets may not be tax-exempt.

REINVESTMENT RISK

Reinvestment risk is the risk that income from the Fund's municipal bond
portfolio will decline if and when the Fund invests the proceeds from matured,
traded or called bonds at market interest rates that are below the portfolio's
current earnings rate. A decline in income could affect the Common Shares'
market price or their overall return.

LEVERAGE RISK

Leverage risk includes the risk associated with the issuance of the Preferred
Shares, if any, or the use of RIBS and other derivative instruments in order to
leverage the Fund's portfolio. There can be no assurance that the Fund's
leveraging strategies involving Preferred Shares or derivatives will be
successful. Once the Preferred Shares are issued or other forms of leverage are
used, the net asset value and market value of Common Shares will be more
volatile, and the yield and total return to Common Shareholders will tend to
fluctuate more in response to changes in interest rates and with changes in the
short-term dividend rates on the Preferred Shares. The Fund anticipates that
the Preferred Shares, at least initially, would likely pay cumulative dividends
at rates determined over relatively short-term periods (such as seven days), by
providing for the periodic redetermination of the dividend rate through an
auction or remarketing procedures. See "Description of shares--Preferred
Shares." The rates of return on long-term municipal bonds are typically,
although not always, higher than the rates of return on short-term municipal
bonds. If the dividend rate on the Preferred Shares approaches the net rate of
return on the Fund's investment portfolio, the benefit of leverage to Common
Shareholders would be reduced. If the dividend rate on the Preferred Shares
exceeds the net rate of return on the Fund's portfolio, the leverage will
result in a lower rate of return to Common Shareholders than if the Fund were
not leveraged. Because the longer-term bonds included in the Fund's portfolio
will typically pay fixed rates of interest while the dividend rate on the
Preferred Shares will be adjusted periodically, this could occur even when both
long-term and short-term interest rates rise. In addition, the Fund will pay
(and Common Shareholders will bear) any costs and expenses relating to the
issuance and ongoing maintenance of the Preferred Shares. Furthermore, if the
Fund has net capital gain or other taxable income that is allocated to
Preferred Shares (instead of solely tax-exempt income), the Fund may have to
pay higher total dividends or Gross-up Dividends to Preferred Shareholders,
which would reduce any advantage of the Fund's leveraged structure to Common
Shareholders without reducing the associated risk. See "Preferred shares and
related leverage." The Fund cannot assure you that it will issue Preferred
Shares or use other forms of leverage or, if used, that these strategies will
result in a higher yield or return to Common Shareholders.

Similarly, any decline in the net asset value of the Fund's investments will be
borne entirely by Common Shareholders. Therefore, if the market value of the
Fund's portfolio declines, any leverage will result in a greater decrease in
net asset value to Common Shareholders than if the Fund were not leveraged.
Such greater net asset value decrease will also tend to cause a greater decline
in the market price for the

- --------------------------------------------------------------------------------

20

<PAGE>

Risks
- --------------------------------------------------------------------------------

Common Shares. The Fund might be in danger of failing to maintain the required
200% asset coverage or of losing its expected AAA/Aaa ratings on the Preferred
Shares or, in an extreme case, the Fund's current investment income might not
be sufficient to meet the dividend requirements on the Preferred Shares. In
order to counteract such an event, the Fund might need to liquidate investments
in order to fund a redemption of some or all of the Preferred Shares.
Liquidation at times of low municipal bond prices may result in capital loss
and may reduce returns to Common Shareholders.

While the Fund may from time to time consider reducing leverage in response to
actual or anticipated changes in interest rates in an effort to mitigate the
increased volatility of current income and net asset value associated with
leverage, there can be no assurance that the Fund will actually reduce leverage
in the future or that any reduction, if undertaken, will benefit the Common
Shareholders. Changes in the future direction of interest rates are very
difficult to predict accurately. If the Fund were to reduce leverage based on a
prediction about future changes to interest rates, and that prediction turned
out to be incorrect, the reduction in leverage would likely operate to reduce
the income and/or total returns to Common Shareholders relative to the
circumstance if the Fund had not reduced leverage. The Fund may decide that
this risk outweighs the likelihood of achieving the desired reduction to
volatility in income and Common Share price if the prediction were to turn out
to be correct, and determine not to reduce leverage as described above.

The Fund may invest in the securities of other investment companies. Such
securities may also be leveraged and will therefore be subject to the leverage
risks described above. Such additional leverage may in certain market
conditions serve to reduce the net asset value of the Fund's Common Shares and
the returns to Common Shareholders.

The Fund may also invest up to 10% of its total assets in RIBS and may also
invest in other derivative instruments, which may increase the Fund's leverage
and, during periods of rising short-term interest rates, may adversely affect
the Fund's net asset value per share and income and distributions to Common
Shareholders. See "Residual Interest Municipal Bonds (RIBS)" and "Derivatives"
under "The Fund's investments" and the Statement of Additional Information
under "Investment Objective and Policies--Derivative Instruments."

INFLATION RISK

Inflation risk is the risk that the value of assets or income from the Fund's
investments will be worth less in the future as inflation decreases the value
of money. As inflation increases, the real, or inflation-adjusted, value of the
Common Shares and distributions can decline, and the dividend payments on the
Fund's Preferred Shares, if any, or interest payments on Fund borrowings, if
any, may increase.

LIQUIDITY RISK

The Fund may invest up to 20% of its net assets in securities which are
illiquid at the time of investment. The term "illiquid securities" for this
purpose means securities that cannot be disposed of within seven days in the
ordinary course of business at approximately the value at which the Fund has
valued the securities. Illiquid securities may be subject to wide fluctuations
in market value. The Fund may be subject to significant delays in disposing of
illiquid securities. Accordingly, the Fund may be forced to sell these
securities at less than fair market value or may not be able to sell them when
PIMCO believes it is desirable to do so. Illiquid securities also may entail
registration expenses and other transaction costs that are higher than those
for liquid securities. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However, some
restricted securities (such as securities issued pursuant to Rule 144A under
the Securities Act of 1933 and certain commercial paper) may be treated as
liquid for these purposes.

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                                                                             21

<PAGE>

Risks
- --------------------------------------------------------------------------------


DERIVATIVES RISK

Derivatives are financial contracts whose value depends on, or is derived from,
the value of an underlying asset, reference rate or index (or relationship
between two indices). The Fund may invest in a variety of derivative
instruments, such as RIBS, structured notes, options contracts, futures
contracts, options on futures contracts, swap agreements, short sales and
delayed delivery and forward commitment transactions. The Fund may use
derivatives as a substitute for taking a position in an underlying portfolio
security or other asset and/or as part of a strategy designed to reduce
exposure to other risks, such as interest rate risk. The Fund also may use
derivatives to add leverage to the portfolio. The Fund's use of derivative
instruments involves risks different from, and possibly greater than, the risks
associated with investing directly in securities and other traditional
investments. Derivatives are subject to a number of risks described elsewhere
in this Prospectus, such as liquidity risk, interest rate risk, credit risk,
leveraging risk and management risk, and are also subject to the risk of
ambiguous documentation. They also involve the risk of mispricing or improper
valuation and the risk that changes in the value of the derivative may not
correlate perfectly with the underlying asset, rate or index. If the Fund
invests in a derivative instrument, it could lose more than the principal
amount invested. Also, suitable derivative transactions may not be available in
all circumstances and there can be no assurance that the Fund will engage in
these transactions to reduce exposure to other risks when that would be
beneficial. Income earned by the Fund from many derivatives transactions will
be treated as capital gain and, if not offset by net realized capital loss,
will be distributed to shareholders in taxable distributions.

MANAGEMENT RISK

The Fund is subject to management risk because it is an actively managed
investment portfolio. PIMCO and the individual portfolio manager will apply
investment techniques and risk analyses in making investment decisions for the
Fund, but there can be no guarantee that these will produce the desired results.

NON-DIVERSIFICATION RISK

Because the Fund is classified as "non-diversified" under the 1940 Act, it can
invest a greater portion of its assets in obligations of a single issuer. As a
result, to the extent the Fund invests a relatively high percentage of its
assets in obligations of a limited number of issuers, the Fund will be more
susceptible than a more widely diversified fund to any single corporate,
economic, political or regulatory occurrence. See "The Fund's investments." The
Fund must satisfy certain asset diversification rules in order to qualify as a
regulated investment company for federal income tax purposes.

CERTAIN AFFILIATIONS

Certain broker-dealers may be considered to be affiliated persons of the Fund,
the Manager and/or PIMCO due to their possible affiliations with Allianz AG,
the ultimate parent of the Manager and PIMCO. Absent an exemption from the
Securities and Exchange Commission or other regulatory relief, the Fund is
generally precluded from effecting certain principal transactions with
affiliated brokers, and its ability to purchase securities being underwritten
by an affiliated broker or a syndicate including an affiliated broker, or to
utilize affiliated brokers for agency transactions, is subject to restrictions.
This could limit the Fund's ability to engage in securities transactions and
take advantage of market opportunities. In addition, unless and until the
underwriting syndicate is broken in connection with the initial public offering
of the Common Shares, the Fund will be precluded from effecting principal
transactions with brokers who are members of the syndicate.

- --------------------------------------------------------------------------------

22

<PAGE>

How the Fund manages risk
- --------------------------------------------------------------------------------


How the Fund manages risk

INVESTMENT LIMITATIONS

The Fund has adopted certain investment limitations designed to limit
investment risk. These limitations (one of which is listed below) are
fundamental and may not be changed without the approval of the holders of a
majority of the outstanding Common Shares and, if issued, Preferred Shares
voting together as a single class, and the approval of the holders of a
majority of the Preferred Shares voting as a separate class. Among other
restrictions, the Fund may not concentrate its investments in a particular
"industry", as that term is used in the 1940 Act and as interpreted, modified,
or otherwise permitted by regulatory authority having jurisdiction, from time
to time.

The Fund would be deemed to "concentrate" its investments in a particular
industry if it invested 25% or more of its net assets in that industry. The
Fund's industry concentration policy does not preclude it from focusing
investments in issuers in a group of related industrial sectors (such as
different types of utilities).

The Fund may become subject to guidelines that are more limiting than the
investment restriction set forth above and other restrictions set forth in the
Statement of Additional Information in order to obtain and maintain ratings
from Moody's, S&P and/or Fitch on the Preferred Shares that it intends to
issue. The Fund does not anticipate that such guidelines would have a material
adverse effect on the Fund's Common Shareholders or the Fund's ability to
achieve its investment objective. See "Investment Objective and Policies" and
"Investment Restrictions" in the Statement of Additional Information for
information about these guidelines and a complete list of the fundamental
investment policies of the Fund.

QUALITY OF INVESTMENTS

The Fund will invest at least 80% of its net assets in bonds of investment
grade quality at the time of investment. Investment grade quality means that
such bonds are rated by national rating agencies within the four highest grades
(Baa or BBB or better by Moody's, S&P or Fitch) or are unrated but judged to be
of comparable quality by PIMCO. Bonds in the lowest investment grade category
may be considered to possess some speculative characteristics by certain rating
agencies.

LIMITED ISSUANCE OF PREFERRED SHARES

Under the 1940 Act, the Fund could issue Preferred Shares having a total
liquidation value (original purchase price of the shares being liquidated plus
any accrued and unpaid dividends) of up to one-half of the value of the total
net assets of the Fund. To the extent that the Fund has outstanding any senior
securities representing indebtedness (such as through the use of derivative
instruments that constitute senior securities), the aggregate amount of such
senior securities will be added to the total liquidation value of any
outstanding Preferred Shares for purposes of this asset coverage requirement.
If the total liquidation value of the Preferred Shares plus the aggregate
amount of such other senior securities were ever more than one-half of the
value of the Fund's total net assets, the Fund would not be able to declare
dividends on the Common Shares until such liquidation value and/or aggregate
amount of other senior securities, as a percentage of the Fund's total assets,
were reduced. The Fund intends to issue Preferred Shares representing
approximately 38% of the Fund's total capital immediately after their issuance
approximately one to three months after the completion of the offering of the
Common Shares. This higher than required margin of net asset value provides a
cushion against later fluctuations in the value of the Fund's portfolio and
will subject Common Shareholders to less income and net asset value volatility
than if the Fund were more highly leveraged through Preferred Shares. It also
gives the Fund

- --------------------------------------------------------------------------------

                                                                             23

<PAGE>

How the Fund manages risk
- --------------------------------------------------------------------------------

flexibility to utilize other forms of leverage in addition to Preferred Shares
from time to time in accordance with the 1940 Act asset coverage requirements
(such as RIBS and other derivatives) that may be more efficient or cost
effective sources of leverage than Preferred Shares under the circumstances.
The Fund intends to purchase or redeem Preferred Shares, if necessary, to keep
the liquidation value of the Preferred Shares plus the aggregate amount of
other senior securities representing indebtedness below one-half of the value
of the Fund's total net assets.

MANAGEMENT OF INVESTMENT PORTFOLIO AND CAPITAL STRUCTURE TO LIMIT LEVERAGE RISK

The Fund may take certain actions if short-term interest rates increase or
market conditions otherwise change (or the Fund anticipates such an increase or
change) and the Fund's leverage begins (or is expected) to adversely affect
Common Shareholders. In order to attempt to offset such a negative impact of
leverage on Common Shareholders, the Fund may shorten the average maturity or
duration of its investment portfolio (by investing in short-term, high quality
securities or implementing certain hedging strategies) or may extend the
maturity of outstanding Preferred Shares. The Fund also may attempt to reduce
leverage by redeeming or otherwise purchasing Preferred Shares or by reducing
any holdings in RIBS or other instruments that create leverage. As explained
above under "Risks--Leverage Risk," the success of any such attempt to limit
leverage risk depends on PIMCO's ability to accurately predict interest rate or
other market changes. Because of the difficulty of making such predictions, the
Fund may not be successful in managing its interest rate exposure in the manner
described above.

If market conditions suggest that additional leverage would be beneficial, the
Fund may sell previously unissued Preferred Shares or Preferred Shares that the
Fund previously issued but later repurchased, or utilize other forms of
leverage, such as RIBS and other derivative instruments.

HEDGING AND RELATED STRATEGIES

The Fund may use various investment strategies designed to limit the risk of
price fluctuations of its portfolio securities and to preserve capital. For
instance, the Fund may invest in structured notes for the purpose of reducing
the interest rate sensitivity of the Fund's portfolio and, thereby, decreasing
the Fund's exposure to interest rate risk. The Fund currently intends that the
income from structured notes will normally be exempt from federal, New York
State and New York City income tax. See "The Fund's investments--Structured
Notes" in this Prospectus. Other hedging strategies that the Fund may use
include: financial futures contracts; short sales; swap agreements or options
thereon; options on financial futures; and options based on either an index of
municipal securities or taxable debt securities whose prices, PIMCO believes,
correlate with the prices of the Fund's investments. Income earned by the Fund
from many hedging activities will be treated as capital gain and, if not offset
by net realized capital loss, will be distributed to shareholders in taxable
distributions. If effectively used, hedging strategies will offset in varying
percentages losses incurred on the Fund's investments due to adverse interest
rate changes. There is no assurance that these hedging strategies will be
available at any time or that PIMCO will determine to use them for the Fund or,
if used, that the strategies will be successful.

Management of the Fund

TRUSTEES AND OFFICERS


The Board of Trustees is responsible for the management of the Fund, including
supervision of the duties performed by the Manager and PIMCO. There are
currently five Trustees of the Fund, three of whom are currently treated by the
Fund as "interested persons" (as defined in the 1940 Act) and two of whom are


- --------------------------------------------------------------------------------

24

<PAGE>

Management of the Fund
- --------------------------------------------------------------------------------


currently treated by the Fund as not "interested persons," although two of the
"interested person" Trustees are expected to cease to be "interested persons"
after certain underwriters cease to be "principal underwriters" (as defined in
the 1940 Act) of the Fund. The names and business addresses of the Trustees and
officers of the Fund and their principal occupations and other affiliations
during the past five years are set forth under "Management of the Fund" in the
Statement of Additional Information.


INVESTMENT MANAGER

The Manager serves as the investment manager of the Fund. Subject to the
supervision of the Board of Trustees, the Manager is responsible for managing,
either directly or through others selected by it, the investment activities of
the Fund and the Fund's business affairs and other administrative matters. The
Manager is located at 1345 Avenue of the Americas, New York, New York 10105.

Organized in 2000, the Manager provides investment management and advisory
services to several closed-end and open-end investment company clients. As of
December 31, 2001, the Manager had approximately $80 billion in assets under
management. Allianz Dresdner Asset Management of America L.P. is the direct
parent company of PIMCO Advisory Services Holdings LLC, of which the Manager is
a wholly-owned subsidiary. As of March 31, 2002, Allianz Dresdner Asset
Management of America, L.P. and its subsidiary partnerships, including PIMCO,
had approximately $336 billion in assets under management.

The Manager has retained its affiliate, PIMCO, to manage the Fund's
investments. See "--Portfolio Manager" below. The Manager and PIMCO are each
majority-owned indirect subsidiaries of Allianz AG, a publicly traded German
insurance and financial services company.

PORTFOLIO MANAGER

PIMCO serves as the portfolio manager for the Fund. Subject to the supervision
of the Manager. PIMCO has full investment discretion and makes all
determinations with respect to the investment of the Fund's assets.

PIMCO is located at 840 Newport Center Drive, Newport Beach, California 92660.
Organized in 1971, PIMCO provides investment management and advisory services
to private accounts of institutional and individual clients and to mutual
funds. As of March 31, 2002, PIMCO had approximately $254 billion in assets
under management.

The Manager (and not the Fund) pays a portion of the fees it receives to PIMCO
in return for its services, at the maximum annual rate of 0.50% of the Fund's
average daily net assets (including assets attributable to any Preferred Shares
that may be outstanding). PIMCO has contractually agreed to waive a portion of
the advisory fee it is entitled to receive from the Manager such that PIMCO
will receive 0.26% of the Fund's average daily net assets from the commencement
of Fund operations through June 30, 2007 (i.e., roughly the first 5 years of
Fund operations), 0.40% of average daily net assets in year 6, 0.45% in year 7
and 0.50% in each year thereafter.

Bill Gross, a founder of PIMCO, serves as Managing Director and Chief
Investment Officer of PIMCO. In his role as Chief Investment Officer, he serves
as the head of the Investment Committee, which oversees setting investment
policy decisions, including duration positioning, yield curve management,
sector rotation, credit quality and overall portfolio composition, for all
PIMCO portfolios and strategies, including the Fund. The following individual
at PIMCO has primary responsibility for the day-to-day portfolio management of
the Fund:

- --------------------------------------------------------------------------------

                                                                             25

<PAGE>

Management of the Fund
- --------------------------------------------------------------------------------


<TABLE>
<CAPTION>
                    Since                  Recent Professional Experience
- ------------------------------------------------------------------------------------
<S>            <C>              <C>
Mark V. McCray 2002 (Inception) Executive Vice President, PIMCO. Mr. McCray joined
                                PIMCO as a Portfolio Manager in 2000. Prior to that,
                                he was a bond trader from 1992-1999 at Goldman
                                Sachs & Co. where he was appointed Vice President
                                in 1996 and named co-head of municipal bond
                                trading in 1997 with responsibility for the firm's
                                proprietary account and supervised municipal bond
                                traders.
</TABLE>

Chris Dialynas, a Managing Director and senior member of PIMCO's investment
strategy group, oversees Mr. McCray regarding the management of the Fund.

INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an investment management agreement between the Manager and the Fund
(the "Investment Management Agreement"), the Fund has agreed to pay the Manager
an annual management fee payable on a monthly basis at the annual rate of 0.65%
of the Fund's average daily net assets (including net assets attributable to
Preferred Shares) for the services and facilities it provides.

In addition to the fees of the Manager, the Fund pays all other costs and
expenses of its operations, including compensation of its Trustees (other than
those affiliated with the Manager), custodial expenses, shareholder servicing
expenses, transfer agency and dividend disbursing expenses, legal fees,
expenses of independent auditors, expenses of repurchasing shares, expenses of
issuing any Preferred Shares, expenses of preparing, printing and distributing
prospectuses, shareholder reports, notices, proxy statements and reports to
governmental agencies, and taxes, if any.

The Manager has contractually agreed to waive a portion of the management fees
it is entitled to receive from the Fund in the amounts, and for the time
periods, set forth below (covering commencement of Fund operations through June
30, 2009):

<TABLE>
<CAPTION>
                                           Percentage Waived              Percentage Waived
                                         (contractual annual   (annual rate as a percentage
                       rate as a percentage of average daily    of average daily net assets
                           net assets attributable to Common  attributable to Common Shares
                        Shares--assuming no Preferred Shares    -- assuming the issuance of
Period Ending June 30,            are issued or outstanding)           Preferred Shares)(2)
- --------------------------------------------------------------------------------------------
<S>                    <C>                                    <C>
2003(1)...............                                  0.15%                          0.24%
2004..................                                  0.15%                          0.24%
2005..................                                  0.15%                          0.24%
2006..................                                  0.15%                          0.24%
2007..................                                  0.15%                          0.24%
2008..................                                  0.10%                          0.16%
2009..................                                  0.05%                          0.08%
</TABLE>
- --------
(1) From the commencement of the Fund's operations.
(2) Assumes the issuance of Preferred Shares in an amount equal to 38% of the
    Fund's capital (after their issuance).

The Manager has not agreed to waive any portion of its fees beyond June 30,
2009.

Because the fees received by the Manager are based on the total net assets of
the Fund (including assets represented by Preferred Shares and any leverage
created thereby), the Manager has a financial incentive

- --------------------------------------------------------------------------------

26

<PAGE>

Net asset value
- --------------------------------------------------------------------------------

for the Fund to issue Preferred Shares, which may create a conflict of interest
between the Manager and the holders of the Fund's Common Shares.

Net asset value

The net asset value ("NAV") of the Fund equals the total value of the Fund's
portfolio investments and other assets, less any liabilities. For purposes of
calculating NAV, portfolio securities and other assets for which market quotes
are available are stated at market value. Market value is generally determined
on the basis of the last reported sales price, or if no sales are reported,
based on quotes obtained from a quotation reporting system, established market
makers, or pricing services. Certain securities or investments for which market
quotations are not readily available may be valued, pursuant to guidelines
established by the Board of Trustees, with reference to other securities or
indices. For instance, a pricing service may recommend a fair market value
based on prices of comparable municipal bonds. Short-term investments having a
maturity of 60 days or less are generally valued at amortized cost. Exchange
traded options, futures and options on futures are valued at the settlement
price determined by the exchange. Other securities for which market quotes are
not readily available are valued at fair value as determined in good faith by
the Board of Trustees or persons acting at their direction.

The NAV of the Fund will be determined as of the close of regular trading on
the New York Stock Exchange (normally 4:00 p.m., Eastern time) (the "NYSE
Close") on each day the New York Stock Exchange is open. Domestic debt
securities are normally priced using data reflecting the earlier closing of the
principal markets for those securities. Information that becomes known to the
Fund or its agent after the Fund's NAV has been calculated on a particular day
will not be used to retroactively adjust the price of a security or the Fund's
NAV determined earlier that day.

In unusual circumstances, instead of valuing securities in the usual manner,
the Fund may value securities at fair value as determined in good faith by the
Board of Trustees, generally based upon recommendations provided by PIMCO. Fair
valuation also may be required due to material events that occur after the
close of the relevant market but prior to the NYSE Close.

Distributions

Commencing with the first dividend, the Fund intends to make regular monthly
cash distributions to Common Shareholders at a rate based upon the projected
performance of the Fund. Distributions can only be made from net investment
income after paying any accrued dividends to Preferred Shareholders. The
dividend rate that the Fund pays will depend on a number of factors, including
dividends payable on the Preferred Shares. The net income of the Fund consists
of all interest income accrued on portfolio assets less all expenses of the
Fund. Expenses of the Fund are accrued each day. Over time, substantially all
the net investment income of the Fund will be distributed. At least annually,
the Fund also intends to distribute to you your pro rata share of any available
net capital gain. Initial distributions to Common Shareholders are expected to
be declared approximately 45 days, and paid approximately 60 to 90 days, from
the completion of this offering, depending on market conditions. Although it
does not now intend to do so, the Board of Trustees may change the Fund's
dividend policy and the amount or timing of the distributions, based on a
number of factors, including the amount of the Fund's undistributed net
investment income and historical and projected investment income and the amount
of the expenses and dividend rates on any outstanding Preferred Shares.

To permit the Fund to maintain a more stable monthly distribution, the Fund
will initially distribute less than the entire amount of net investment income
earned in a particular period. The undistributed net

- --------------------------------------------------------------------------------

                                                                             27

<PAGE>

Dividend reinvestment plan
- --------------------------------------------------------------------------------

investment income would be available to supplement future distributions. As a
result, the distributions paid by the Fund for any particular monthly period
may be more or less than the amount of net investment income actually earned by
the Fund during the period. Undistributed net investment income will be added
to the Fund's net asset value and, correspondingly, distributions from
undistributed net investment income will be deducted from the Fund's net asset
value.

Dividend reinvestment plan

Pursuant to the Fund's Dividend Reinvestment Plan (the "Plan"), all Common
Shareholders whose shares are registered in their own names will have all
dividends, including any capital gain dividends, reinvested automatically in
additional Common Shares by PFPC Inc., as agent for the Common Shareholders
(the "Plan Agent"), unless the shareholder elects to receive cash. An election
to receive cash may be revoked or reinstated at the option of the shareholder.
In the case of record shareholders such as banks, brokers or other nominees
that hold Common Shares for others who are the beneficial owners, the Plan
Agent will administer the Plan on the basis of the number of Common Shares
certified from time to time by the record shareholder as representing the total
amount registered in such shareholder's name and held for the account of
beneficial owners who are to participate in the Plan. Shareholders whose shares
are held in the name of a bank, broker or nominee should contact the bank,
broker or nominee for details. Such shareholders may not be able to transfer
their shares to another bank or broker and continue to participate in the Plan.
All distributions to investors who elect not to participate in the Plan (or
whose broker or nominee elects not to participate on the investor's behalf),
will be paid in cash by check mailed, in the case of direct shareholders, to
the record holder by PFPC Inc., as the Fund's dividend disbursement agent.

Unless you (or your broker or nominee) elects not to participate in the Plan,
the number of Common Shares you will receive will be determined as follows:

(1) If Common Shares are trading at or above net asset value on the payment
    date, the Fund will issue new shares at the greater of (i) the net asset
    value per Common Share on the payment date or (ii) 95% of the market price
    per Common Share on the payment date; or

(2) If Common Shares are trading below net asset value (minus estimated
    brokerage commissions that would be incurred upon the purchase of Common
    Shares on the open market) on the payment date, the Plan Agent will receive
    the dividend or distribution in cash and will purchase Common Shares in the
    open market, on the New York Stock Exchange or elsewhere, for the
    participants' accounts. It is possible that the market price for the Common
    Shares may increase before the Plan Agent has completed its purchases.
    Therefore, the average purchase price per share paid by the Plan Agent may
    exceed the market price on the payment date, resulting in the purchase of
    fewer shares than if the dividend or distribution had been paid in Common
    Shares issued by the Fund. The Plan Agent will use all dividends and
    distributions received in cash to purchase Common Shares in the open market
    on or shortly after the payment date, but in no event later than the
    ex-dividend date for the next distribution. Interest will not be paid on
    any uninvested cash payments.

You may withdraw from the Plan at any time by giving written notice to the Plan
Agent. If you withdraw or the Plan is terminated, you will receive a
certificate for each whole share in your account under the Plan and you will
receive a cash payment for any fraction of a share in your account. If you
wish, the Plan Agent will sell your shares and send you the proceeds, minus
brokerage commissions.

The Plan Agent maintains all shareholders' accounts in the Plan and gives
written confirmation of all transactions in the accounts, including information
you may need for tax records. The Plan Agent will

- --------------------------------------------------------------------------------

28

<PAGE>

- --------------------------------------------------------------------------------

also furnish each person who buys Common Shares with written instructions
detailing the procedures for electing not to participate in the Plan and to
instead receive distributions in cash. Common Shares in your account will be
held by the Plan Agent in non-certificated form. Any proxy you receive will
include all Common Shares you have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or
distributions in Common Shares. However, all participants will pay a pro rata
share of brokerage commissions incurred by the Plan Agent when it makes open
market purchases.

Automatically reinvested dividends and distributions are taxed in the same
manner as cash dividends and distributions.

The Fund and the Plan Agent reserve the right to amend or terminate the Plan.
There is no direct service charge to participants in the Plan; however, the
Fund reserves the right to amend the Plan to include a service charge payable
by the participants. Additional information about the Plan may be obtained from
PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809, telephone number
1-800-331-1710.

Description of shares

COMMON SHARES

The Declaration authorizes the issuance of an unlimited number of Common
Shares. The Common Shares will be issued with a par value of $0.00001 per
share. All Common Shares have equal rights to the payment of dividends and the
distribution of assets upon liquidation. Common Shares will, when issued, be
fully paid and, subject to matters discussed in "Anti-takeover and other
provisions in the Declaration of Trust," non-assessable, and will have no
pre-emptive or conversion rights or rights to cumulative voting. Whenever
Preferred Shares are outstanding, Common Shareholders will not be entitled to
receive any distributions from the Fund unless all accrued dividends on
Preferred Shares have been paid, and unless asset coverage (as defined in the
1940 Act) with respect to Preferred Shares would be at least 200% after giving
effect to the distributions. See "--Preferred Shares" below.

The Common Shares have been authorized for listing on the New York Stock
Exchange, subject to notice of issuance. The Fund intends to hold annual
meetings of shareholders so long as the Common Shares are listed on a national
securities exchange and such meetings are required as a condition to such
listing.

The Fund's net asset value per share generally increases when interest rates
decline, and decreases when interest rates rise, and these changes are likely
to be greater because the Fund intends to have a leveraged capital structure.
Net asset value will be reduced immediately following the offering by the
amount of the sales load and organization and offering expenses paid by the
Fund. The Manager has agreed to pay the amount by which the aggregate of all of
the Fund's organizational expenses and all offering costs (other than the sales
load) exceeds $0.03 per Common Share.

Unlike open-end funds, closed-end funds like the Fund do not continuously offer
shares and do not provide daily redemptions. Rather, if a shareholder
determines to buy additional Common Shares or sell shares already held, the
shareholder may do so by trading on the exchange through a broker or otherwise.
Shares of closed-end investment companies may frequently trade on an exchange
at prices lower than net asset value. Shares of closed-end investment companies
like the Fund that invest principally in investment grade municipal bonds have
during some periods traded at prices higher than net asset value and during
other periods have traded at prices lower than net asset value. The Fund's

- --------------------------------------------------------------------------------

                                                                             29

<PAGE>

Description of shares
- --------------------------------------------------------------------------------

Declaration limits the ability of the Fund to convert to open-end status. See
"Anti-takeover and other provisions in the Declaration of Trust."

Because the market value of the Common Shares may be influenced by such factors
as dividend levels (which are in turn affected by expenses), call protection,
dividend stability, portfolio credit quality, net asset value, relative demand
for and supply of such shares in the market, general market and economic
conditions, and other factors beyond the control of the Fund, the Fund cannot
assure you that the Common Shares will trade at a price equal to or higher than
net asset value in the future. The Common Shares are designed primarily for
long-term investors, and investors in the Common Shares should not view the
Fund as a vehicle for trading purposes. See "Preferred shares and related
leverage" and the Statement of Additional Information under "Repurchase of
Common Shares; Conversion to Open-End Fund."

PREFERRED SHARES

The Declaration authorizes the issuance of an unlimited number of Preferred
Shares. The Preferred Shares may be issued in one or more classes or series,
with such par value and rights as determined by the Board of Trustees, by
action of the Board of Trustees without the approval of the Common Shareholders.

The Fund's Board of Trustees has indicated its intention to authorize an
offering of Preferred Shares (representing approximately 38% of the Fund's
capital immediately after the time the Preferred Shares are issued)
approximately one to three months after completion of the offering of Common
Shares. Any such decision is subject to market conditions and to the Board's
continuing belief that leveraging the Fund's capital structure through the
issuance of Preferred Shares is likely to achieve the benefits to the Common
Shareholders described in this Prospectus. Although the terms of the Preferred
Shares will be determined by the Board of Trustees (subject to applicable law
and the Fund's Declaration) if and when it authorizes a Preferred Shares
offering, the Board has determined that the Preferred Shares, at least
initially, would likely pay cumulative dividends at rates determined over
relatively short-term periods (such as seven days), by providing for the
periodic redetermination of the dividend rate through an auction or remarketing
procedure. The Board of Trustees has indicated that the preference on
distribution, liquidation preference, voting rights and redemption provisions
of the Preferred Shares will likely be as stated below.

As used in this Prospectus, unless otherwise noted, the Fund's "net assets"
include assets of the Fund attributable to any outstanding Preferred Shares,
with no deduction for the liquidation preference of the Preferred Shares.
Solely for financial reporting purposes, however, the Fund is required to
exclude the liquidation preference of Preferred Shares from "net assets," so
long as the Preferred Shares have redemption features that are not solely
within the control of the Fund. For all regulatory and tax purposes, the Fund's
Preferred Shares will be treated as stock (rather than indebtedness).

Limited Issuance of Preferred Shares
Under the 1940 Act, the Fund could issue Preferred Shares with an aggregate
liquidation value of up to one-half of the value of the Fund's total net
assets, measured immediately after issuance of the Preferred Shares.
"Liquidation value" means the original purchase price of the shares being
liquidated plus any accrued and unpaid dividends. In addition, the Fund is not
permitted to declare any cash dividend or other distribution on its Common
Shares unless the liquidation value of the Preferred Shares is less than
one-half of the value of the Fund's total net assets (determined after
deducting the amount of such dividend or distribution) immediately after the
distribution. The liquidation value of the Preferred Shares

- --------------------------------------------------------------------------------

30

<PAGE>

Description of shares
- --------------------------------------------------------------------------------

is expected to be approximately 38% of the value of the Fund's total net
assets. The Fund intends to purchase or redeem Preferred Shares, if necessary,
to keep that fraction below one-half.

Distribution Preference
The Preferred Shares have complete priority over the Common Shares as to
distribution of assets.

Liquidation Preference
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Fund, holders of Preferred Shares will be
entitled to receive a preferential liquidating distribution (expected to equal
the original purchase price per share plus accumulated and unpaid dividends
thereon, whether or not earned or declared) before any distribution of assets
is made to holders of Common Shares.

Voting Rights
Preferred Shares are required to be voting shares. Except as otherwise provided
in the Declaration or the Fund's Bylaws or otherwise required by applicable
law, holders of Preferred Shares will vote together with Common Shareholders as
a single class.

Holders of Preferred Shares, voting as a separate class, will also be entitled
to elect two of the Fund's Trustees. The remaining Trustees will be elected by
Common Shareholders and holders of Preferred Shares, voting together as a
single class. In the unlikely event that two full years of accrued dividends
are unpaid on the Preferred Shares, the holders of all outstanding Preferred
Shares, voting as a separate class, will be entitled to elect a majority of the
Fund's Trustees until all dividends in arrears have been paid or declared and
set apart for payment.

Redemption, Purchase and Sale of Preferred Shares

The terms of the Preferred Shares may provide that they are redeemable at
certain times, in whole or in part, at the original purchase price per share
plus accumulated dividends. The terms also may state that the Fund may tender
for or purchase Preferred Shares and resell any shares so tendered. Any
redemption or purchase of Preferred Shares by the Fund will reduce the leverage
applicable to Common Shares, while any resale of Preferred Shares by the Fund
will increase such leverage. See "Preferred shares and related leverage."

The discussion above describes the Board of Trustees' present intention with
respect to a possible offering of Preferred Shares. If the Board of Trustees
determines to authorize such an offering, the terms of the Preferred Shares may
be the same as, or different from, the terms described above, subject to
applicable law and the Fund's Declaration and Bylaws.

Anti-takeover and other provisions in the Declaration of Trust

The Declaration includes provisions that could limit the ability of other
entities or persons to acquire control of the Fund or to convert the Fund to
open-end status. The Fund's Trustees are divided into three classes. At each
annual meeting of shareholders, the term of one class will expire and each
Trustee elected to that class will hold office for a term of three years. The
classification of the Board of Trustees in this manner could delay for an
additional year the replacement of a majority of the Board of Trustees. In
addition, the Declaration provides that a Trustee may be removed only for cause
and only (i) by action of at least seventy-five percent (75%) of the
outstanding shares of the classes or series of shares entitled

- --------------------------------------------------------------------------------

                                                                             31

<PAGE>

Anti-takeover and other provisions in the Declaration of Trust
- --------------------------------------------------------------------------------

to vote for the election of such Trustee, or (ii) by at least seventy-five
percent (75%) of the remaining Trustees.

As described below, the Declaration grants special approval rights with respect
to certain matters to members of the Board who qualify as "Continuing
Trustees," which term means a Trustee who either (i) has been a member of the
Board for a period of at least thirty-six months (or since the commencement of
the Fund's operations, if less than thirty-six months) or (ii) was nominated to
serve as a member of the Board of Trustees by a majority of the Continuing
Trustees then members of the Board.

The Declaration requires the affirmative vote or consent of at least
seventy-five percent (75%) of the Board of Trustees and holders of at least
seventy-five percent (75%) of the Fund's shares (including Common and Preferred
Shares) to authorize certain Fund transactions not in the ordinary course of
business, including a merger or consolidation, or a sale or transfer of Fund
assets, unless the transaction is authorized by both a majority of the Trustees
and seventy-five percent (75%) of the Continuing Trustees (in which case no
shareholder authorization would be required by the Declaration, but may be
required in certain cases under the 1940 Act). The Declaration also requires
the affirmative vote or consent of holders of at least seventy-five percent
(75%) of each class of the Fund's shares entitled to vote on the matter to
authorize a conversion of the Fund from a closed-end to an open-end investment
company, unless the conversion is authorized by both a majority of the Trustees
and seventy-five percent (75%) of the Continuing Trustees (in which case
shareholders would have only the minimum voting rights required by the 1940 Act
with respect to the conversion). Also, the Declaration provides that the Fund
may be terminated at any time by vote or consent of at least seventy-five
percent (75%) of the Fund's shares or, alternatively, by vote or consent of
both a majority of the Trustees and seventy-five percent (75%) of the
Continuing Trustees. See "Anti-Takeover and Other Provisions in the Declaration
of Trust" in the Statement of Additional Information for a more detailed
summary of these provisions.

The Trustees may from time to time grant other voting rights to shareholders
with respect to these and other matters in the Fund's Bylaws.

The overall effect of these provisions is to render more difficult the
accomplishment of a merger or the assumption of control by a third party. They
provide, however, the advantage of potentially requiring persons seeking
control of the Fund to negotiate with its management regarding the price to be
paid and facilitating the continuity of the Fund's investment objective and
policies. The provisions of the Declaration described above could have the
effect of depriving the Common Shareholders of opportunities to sell their
Common Shares at a premium over the then current market price of the Common
Shares by discouraging a third party from seeking to obtain control of the Fund
in a tender offer or similar transaction. The Board of Trustees of the Fund has
considered the foregoing anti-takeover provisions and concluded that they are
in the best interests of the Fund and its Common Shareholders.

The foregoing is intended only as a summary and is qualified in its entirety by
reference to the full text of the Declaration and the Fund's Bylaws, both of
which are on file with the Securities and Exchange Commission.

Under Massachusetts law, shareholders could, in certain circumstances, be held
personally liable for the obligations of the Fund. However, the Declaration
contains an express disclaimer of shareholder liability for debts or
obligations of the Fund and requires that notice of such limited liability be
given in each agreement, obligation or instrument entered into or executed by
the Fund or the Trustees. The Declaration further provides for indemnification
out of the assets and property of the Fund for all loss and expense of any
shareholder held personally liable for the obligations of the Fund. Thus, the
risk of a

- --------------------------------------------------------------------------------

32

<PAGE>

Repurchase of Common Shares; conversion to open-end fund
- --------------------------------------------------------------------------------

shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which the Fund would be unable to meet its
obligations. The Fund believes that the likelihood of such circumstances is
remote.

Repurchase of Common Shares; conversion to open-end fund

The Fund is a closed-end investment company and as such its shareholders will
not have the right to cause the Fund to redeem their shares. Instead, the
Common Shares will trade in the open market at a price that will be a function
of several factors, including dividend levels (which are in turn affected by
expenses), net asset value, call protection, dividend stability, portfolio
credit quality, relative demand for and supply of such shares in the market,
general market and economic conditions and other factors. Shares of a
closed-end investment company may frequently trade at prices lower than net
asset value. The Fund's Board of Trustees regularly monitors the relationship
between the market price and net asset value of the Common Shares. If the
Common Shares were to trade at a substantial discount to net asset value for an
extended period of time, the Board may consider the repurchase of its Common
Shares on the open market or in private transactions, the making of a tender
offer for such shares, or the conversion of the Fund to an open-end investment
company. The Fund cannot assure you that its Board of Trustees will decide to
take or propose any of these actions, or that share repurchases or tender
offers will actually reduce market discount.

If the Fund converted to an open-end company, it would be required to redeem
all Preferred Shares then outstanding (requiring in turn that it liquidate a
portion of its investment portfolio), and the Common Shares would no longer be
listed on the New York Stock Exchange. In contrast to a closed-end investment
company, shareholders of an open-end investment company may require the company
to redeem their shares at any time (except in certain circumstances as
authorized by or under the 1940 Act) at their net asset value, less any
redemption charge that is in effect at the time of redemption.

Before deciding whether to take any action to convert the Fund to an open-end
investment company, the Board would consider all relevant factors, including
the extent and duration of the discount, the liquidity of the Fund's portfolio,
the impact of any action that might be taken on the Fund or its shareholders,
and market considerations. Based on these considerations, even if the Fund's
shares should trade at a discount, the Board of Trustees may determine that, in
the interest of the Fund and its shareholders, no action should be taken. See
the Statement of Additional Information under "Repurchase of Common Shares;
Conversion to Open-End Fund" for a further discussion of possible action to
reduce or eliminate such discount to net asset value.

Tax matters

FEDERAL INCOME TAX MATTERS

The following federal income tax discussion is based on the advice of Ropes &
Gray, counsel to the Fund, and reflects provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), existing Treasury regulations, rulings
published by the Internal Revenue Service (the "Service"), and other applicable
authority, as of the date of this Prospectus. These authorities are subject to
change by legislative or administrative action, possibly with retroactive
effect. The following discussion is only a summary of some of the important tax
considerations generally applicable to investments in the Fund. For more
detailed information regarding tax considerations, see the Statement of
Additional Information.

- --------------------------------------------------------------------------------

                                                                             33

<PAGE>

Tax matters
- --------------------------------------------------------------------------------

There may be other tax considerations applicable to particular investors. In
addition, income earned through an investment in the Fund may be subject to
state and local taxes. See "New York Tax Matters."

The Fund intends to qualify each year for taxation as a regulated investment
company eligible for treatment under the provisions of Subchapter M of the
Code. If the Fund so qualifies and satisfies certain distribution requirements,
the Fund will not be subject to federal income tax on income distributed in a
timely manner to its shareholders in the form of dividends or capital gain
distributions.

To satisfy the distribution requirement applicable to regulated investment
companies, amounts paid as dividends by the Fund to its shareholders, including
holders of its Preferred Shares, must qualify for the dividends-paid deduction.
In certain circumstances, the Service could take the position that dividends
paid on the Preferred Shares constitute preferential dividends under Section
562(c) of the Code, and thus do not qualify for the dividends-paid deduction.

If at any time when Preferred Shares are outstanding the Fund does not meet
applicable asset coverage requirements, it will be required to suspend
distributions to Common Shareholders until the requisite asset coverage is
restored. Any such suspension may cause the Fund to pay a 4% federal excise tax
(imposed on regulated investment companies that fail to distribute for a given
calendar year, generally, at least 98% of their net investment income and
capital gain net income) and income tax on undistributed income or gains, and
may, in certain circumstances, prevent the Fund from qualifying for treatment
as a regulated investment company. The Fund may redeem Preferred Shares in an
effort to comply with the distribution requirement applicable to regulated
investment companies and to avoid income and excise taxes.

The New York Municipal Bonds in which the Fund will invest are generally issued
by the State of New York, a city in New York, or a political subdivision,
agency, authority or instrumentality of such state or city. Thus, substantially
all of the Fund's dividends to you will qualify as "exempt-interest dividends,"
which are not generally subject to federal income tax. An investment in the
Fund may result in liability for federal alternative minimum tax for both
individual and corporate shareholders. The Fund will seek to avoid portfolio
investments that pay interest that is taxable to individuals under the federal
alternative minimum tax. Nonetheless, the Fund may not be successful in this
regard and if you are, or as a result of an investment in the Fund would
become, subject to the federal alternative minimum tax, the Fund may not be a
suitable investment for you.

As described above in the section entitled "Preferred shares and related
leverage," the terms of the Preferred Shares require, in certain circumstances,
that the Fund distribute Gross-up Dividends to holders of the Preferred Shares.
It is anticipated that the allocation rules described in the noted section
will, in a number of circumstances, require the Fund to distribute such
Gross-up Dividends. Such Gross-up Dividends would reduce the amount available
for distribution to Common Shareholders.

The Fund may at times buy tax-exempt investments at a discount from the price
at which they were originally issued, especially during periods of rising
interest rates. For federal income tax purposes, some or all of any market
discount that is other than de minimis will be included in the Fund's ordinary
income and will be taxable to shareholders as such when it is distributed.

The Fund's investments in certain debt obligations may cause the Fund to
recognize taxable income in excess of the cash generated by such obligations.
Thus, the Fund could be required at times to liquidate other investments in
order to satisfy its distribution requirements.

- --------------------------------------------------------------------------------

34

<PAGE>

Tax matters
- --------------------------------------------------------------------------------


For federal income tax purposes, distributions of investment income other than
exempt interest dividends are taxable as ordinary income. Generally, gains
realized by the Fund on the sale or exchange of investments will be taxable to
its shareholders, even though the income from such investments generally will
be tax-exempt. Whether distributions of capital gains are taxed as ordinary
income or capital gains is determined by how long the Fund owned the
investments that generated such capital gains, rather than how long a
shareholder has owned his or her shares. Distributions are taxable to
shareholders even if they are paid from income or gains earned by the Fund
before a shareholder's investment (and thus were included in the price the
shareholder paid). Distributions of gains from the sale of investments that the
Fund owned for more than one year will be taxable as capital gains.
Distributions of gains from the sale of investments that the Fund owned for one
year or less will be taxable as ordinary income. Distributions are taxable
whether shareholders receive them in cash or reinvest them in additional shares
through the Dividend Reinvestment Plan.

Any gain resulting from the sale or exchange of Fund shares will generally also
be subject to tax. In addition, the exemption from federal income tax for
exempt-interest dividends does not necessarily result in exemption for such
dividends under the income or other tax laws of any state or local taxing
authority. See "New York Tax Matters."

The backup withholding tax rate is 30% for amounts paid during 2002 and 2003 if
the Fund is required to apply backup withholding to taxable distributions
payable to a shareholder. Please see "Tax Matters" in the Statement of
Additional Information for additional information about the backup withholding
tax rates for subsequent years.

NEW YORK TAX MATTERS

The following is a general, abbreviated summary of certain provisions of the
applicable New York tax law as presently in effect as it directly governs the
taxation of New York resident individual, corporate and unincorporated business
holders of Common Shares of the Fund, based upon the advice of Edwards &
Angell, LLP, special counsel to the Fund. This summary does not address the
taxation of other shareholders nor does it discuss any local taxes, other than
New York City taxes, that may be applicable. These provisions are subject to
change by legislative or administrative action, and any such change may be
retroactive with respect to Fund transactions. The following is based on the
assumptions that the Fund will qualify under Subchapter M of the Code as a
regulated investment company, that it will satisfy the conditions which will
cause the Fund's distributions to qualify as exempt-interest dividends to
shareholders, and that it will distribute all interest and dividends received
to the Fund's shareholders. The Fund will be subject to the New York Business
Corporation franchise tax and the New York City general corporation tax only if
it has a sufficient nexus with New York State or New York City. If it is
subject to such taxes, it does not expect to pay a material amount of either
tax. Distributions by the Fund that are attributable to interest on any
obligation of New York and its political subdivisions or to interest on
obligations of U.S. territories and possessions that are exempt from state
taxation under federal law will not be subject to the New York State personal
income tax or the New York City personal income or unincorporated business
taxes. All other distributions, including distributions attributable to
interest on obligations of the United States or its instrumentalities and
distributions attributable to capital gains, will be subject to the New York
State personal income tax and the New York City personal income and
unincorporated business taxes.

All distributions from the Fund, regardless of source, will increase the
taxable base of shareholders subject to the New York Business Corporation
franchise tax or the New York City general corporation tax. Gain from the sale,
exchange, or other disposition of Common Shares of the Fund will be subject to

- --------------------------------------------------------------------------------

                                                                             35

<PAGE>

- --------------------------------------------------------------------------------

the New York State personal income and franchise taxes and the New York City
personal income, unincorporated business, and general corporation taxes. Common
Shares of the Fund may be subject to New York State estate tax if owned by a
New York decedent at the time of death. Common Shares of the Fund will not be
subject to property taxes imposed by New York State or City. Interest on
indebtedness incurred to purchase, or continued to carry, Common Shares of the
Fund generally will not be deductible for New York State or New York City
personal income tax purposes.

This section relates only to the federal and New York income tax consequences
of investing in the Fund; the consequences under other tax laws may differ. You
should consult your tax advisor for more detailed information concerning New
York State and New York City tax matters and as to the possible application of
additional state and local income tax laws to Fund dividends and capital
distributions. Please see "Tax Matters" in the Statement of Additional
Information for additional information regarding the tax aspects of investing
in the Fund.

Underwriting

The underwriters named below (the "Underwriters"), acting through UBS Warburg
LLC, 299 Park Avenue, New York, New York and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, 4 World Financial Center, New York, New York, as lead
managers, and A.G. Edwards & Sons, Inc., First Union Securities, Inc.,
Prudential Securities Incorporated, Quick & Reilly, Inc. A FleetBoston
Financial Company, Raymond James & Associates, Inc., RBC Dain Rauscher
Incorporated, Advest, Inc. and Fahnestock & Co. Inc. as their representatives
(together with the lead managers, the "Representatives"), have severally
agreed, subject to the terms and conditions of the Underwriting Agreement with
the Fund and the Manager, to purchase from the Fund the number of Common Shares
set forth opposite their respective names. The Underwriters are committed to
purchase and pay for all of such Common Shares (other than those covered by the
over-allotment option described below) if any are purchased.

<TABLE>
<CAPTION>
                                                                Number of
       Underwriter                                          Common Shares
       ------------------------------------------------------------------
       <S>                                                  <C>
       UBS Warburg LLC.....................................
       Merrill Lynch, Pierce, Fenner & Smith
                Incorporated...............................
       A.G. Edwards & Sons, Inc............................
       First Union Securities, Inc.........................
       Prudential Securities Incorporated..................
       Quick & Reilly, Inc. A FleetBoston Financial Company
       Raymond James & Associates, Inc.....................
       RBC Dain Rauscher Incorporated......................
       Advest, Inc.........................................
       Fahnestock & Co. Inc................................
                                                              --------
          Total............................................
                                                              ========
</TABLE>

The Fund has granted to the Underwriters an option, exercisable for 45 days
from the date of this Prospectus, to purchase up to an additional        Common
Shares to cover over-allotments, if any, at the initial offering price. The
Underwriters may exercise such option solely for the purpose of covering
Underwriting over-allotments incurred in the sale of the Common Shares offered
hereby. To the extent that the Underwriters exercise this option, each of the
Underwriters will have a firm commitment, subject
to certain conditions, to purchase an additional number of Common Shares
proportionate to such Underwriter's initial commitment.

- --------------------------------------------------------------------------------

36

<PAGE>

Underwriting
- --------------------------------------------------------------------------------


The Fund has agreed to pay a commission to the Underwriters in the amount of up
to $     per Common Share (      % of the public offering price per Common
Share). The Representatives have advised the Fund that the Underwriters may pay
up to $     per Common Share from such commission to selected dealers who sell
the Common Shares and that such dealers may reallow a concession of up to $
per Common Share to certain other dealers who sell shares. Investors must pay
for any Common Shares purchased on or before         , 2002.

Prior to this offering, there has been no public or private market for the
Common Shares or any other securities of the Fund. Consequently, the offering
price for the Common Shares was determined by negotiation among the Fund, the
Manager and the Representatives. There can be no assurance, however, that the
price at which Common Shares sell after this offering will not be lower than
the price at which they are sold by the Underwriters or that an active trading
market in the Common Shares will develop and continue after this offering. The
minimum investment requirement is 100 Common Shares.

The Fund and the Manager have agreed to indemnify the several Underwriters for
or to contribute to the losses arising out of certain liabilities, including
liabilities under the Securities Act of 1933, as amended.

The Fund has agreed not to offer, sell or register with the Securities and
Exchange Commission any equity securities of the Fund, other than issuances of
Common Shares, including pursuant to the Fund's Dividend Reinvestment Plan, and
issuances in connection with any offering of Preferred Shares, each as
contemplated in this Prospectus, for a period of 180 days after the date of the
Underwriting Agreement without the prior written consent of the Representatives.

The Representatives have informed the Fund that the Underwriters do not intend
to confirm any sales to any accounts over which they exercise discretionary
authority.

In connection with this offering, the Underwriters may purchase and sell Common
Shares in the open market. These transactions may include over-allotment and
stabilizing transactions and purchases to cover syndicate short positions
created in connection with this offering. Stabilizing transactions consist of
certain bids or purchases for the purpose of preventing or retarding a decline
in the market price of the Common Shares and syndicate short positions involve
the sale by the Underwriters of a greater number of Common Shares than they are
required to purchase from the Fund in this offering. The Underwriters also may
impose a penalty bid, whereby selling concessions allowed to syndicate members
or other broker-dealers in respect of the Common Shares sold in this offering
for their account, may be reclaimed by the syndicate if such Common Shares are
repurchased by the syndicate in stabilizing or covering transactions. These
activities may stabilize, maintain or otherwise affect the market price of the
Common Shares, which may be higher than the price that might otherwise prevail
in the open market; and these activities, if commenced, may be discontinued at
any time without notice. These transactions may be effected on the New York
Stock Exchange or otherwise.

The Fund anticipates that the Representatives and certain other Underwriters
may from time to time act as brokers and dealers in connection with the
execution of its portfolio transactions after they have ceased to be
Underwriters and, subject to certain restrictions, may act as such brokers
while they are Underwriters.

First Union Securities, Inc., a subsidiary of Wachovia Corporation, conducts
its investment banking, institutional, and capital markets business under the
trade name of Wachovia Securities. Any references to "Wachovia Securities" in
this Prospectus, however, do not include Wachovia Securities, Inc., a separate
broker-dealer subsidiary of Wachovia Corporation and sister affiliate of First
Union Securities,

- --------------------------------------------------------------------------------

                                                                             37

<PAGE>

- --------------------------------------------------------------------------------

Inc., which may or may not be participating as a separate selling dealer in the
distribution of the securities.


UBS Warburg LLC will pay to Underwriters that meet certain minimum sales
thresholds during this offering or in combination with other contemporaneous
offerings an annual fee equal to 0.10% of the average daily net asset value of
the Fund (including assets attributable to any preferred shares of the Fund
that may be outstanding) multiplied by the percentage of the Common Shares sold
by the qualifying Underwriter. Such minimum sales thresholds may be waived in
the sole discretion of UBS Warburg LLC. These fee payments will remain in
effect only so long as the Investment Management Agreement remains in effect
between the Fund and the Manager or any successor in interest or affiliate of
the Manager, as and to the extent that such Investment Management Agreement is
renewed periodically in accordance with the 1940 Act. UBS Warburg LLC will
limit the amount of such fee payments such that the total amount of such fee
payments and the sales loads paid to such qualifying Underwriters will not
exceed any sales charge limits under the rules of the National Association of
Securities Dealers, Inc.


As described below under "Shareholder servicing agent, custodian and transfer
agent," UBS Warburg LLC will provide shareholder services to the Fund pursuant
to a shareholder servicing agreement with the Manager.

Shareholder servicing agent, custodian and transfer agent


The Manager (and not the Fund) has agreed to pay from its own assets to UBS
Warburg LLC a shareholder servicing fee (the "Shareholder Servicing Fee") at an
annual rate of 0.10% of the average daily net asset value of the Fund
(including assets attributable to any preferred shares of the Fund that may be
outstanding) pursuant to a shareholder servicing agreement between the Manager
and UBS Warburg LLC (the "Shareholder Servicing Agreement"). Pursuant to the
Shareholder Servicing Agreement, UBS Warburg LLC will: (i) undertake to make
public information pertaining to the Fund on an ongoing basis and to
communicate to investors and prospective investors the Fund's features and
benefits (including periodic seminars or conference calls, responses to
questions from current or prospective shareholders and specific shareholder
contact where appropriate); (ii) make available to investors and prospective
investors market price, net asset value, yield and other information regarding
the Fund, if reasonably obtainable, for the purpose of maintaining the
visibility of the Fund in the investor community; (iii) at the request of the
Manager, provide certain economic research and statistical information and
reports, if reasonably obtainable, on behalf of the Fund, and consult with
representatives and Trustees of the Fund in connection therewith, which
information and reports shall include: (a) statistical and financial market
information with respect to the Fund's market performance and (b) comparative
information regarding the Fund and other closed-end management investment
companies with respect to (1) the net asset value of their respective shares,
(2) the respective market performance of the Fund and such other companies, (3)
other relevant performance indicators; and (iv) at the request of the Manager,
provide information to and consult with the Board of Trustees with respect to
applicable modifications to dividend policies or capital structure,
repositioning or restructuring of the Fund, conversion of the Fund to an
open-end investment company, or a Fund liquidation or merger; provided,
however, that under the terms of the Shareholder Servicing Agreement, UBS
Warburg LLC is not obligated to render any opinions, valuations or
recommendations of any kind or to perform any such similar services. Under the
terms of the Shareholder Servicing Agreement, UBS Warburg LLC is relieved from
liability to the Manager for any act or omission in the course of its
performances under the Shareholder Servicing Agreement in the absence of gross
negligence or willful misconduct. The Shareholder Servicing Agreement will
remain in effect so long as the Investment Management Agreement remains in
effect between the Fund and the Manager or any successor in interest or
affiliate of the Manager, as and to the extent that such Investment Management
Agreement is renewed periodically in accordance with the 1940 Act.


- --------------------------------------------------------------------------------

38

<PAGE>



The custodian of the assets of the Fund is State Street Bank and Trust Co., 225
Franklin Street, Boston, Massachusetts 02110. The Custodian performs custodial
and fund accounting services.

PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809, serves as the
Fund's transfer agent, registrar and dividend disbursement agent, as well as
agent for the Fund's Dividend Reinvestment Plan.

Legal matters

Certain legal matters in connection with the Common Shares will be passed upon
for the Fund by Ropes & Gray, Boston, Massachusetts, and for the Underwriters
by Skadden, Arps, Slate, Meagher & Flom (Illinois), Chicago, Illinois, and its
affiliated entities.


                                                                             39

<PAGE>

- --------------------------------------------------------------------------------

Table of contents for the
statement of additional information

<TABLE>
   <S>                                                                   <C>
   Use of Proceeds......................................................   3
   Investment Objective and Policies....................................   3
   Investment Restrictions..............................................  27
   Management of the Fund...............................................  29
   Investment Manager and Portfolio Manager.............................  39
   Portfolio Transactions...............................................  44
   Distributions........................................................  46
   Description of Shares................................................  46
   Anti-Takeover and Other Provisions in the Declaration of Trust.......  50
   Repurchase of Common Shares; Conversion to Open-End Fund.............  52
   Tax Matters..........................................................  54
   Performance Related and Comparative Information......................  60
   Custodian, Transfer Agent and Dividend Disbursement Agent............  60
   Independent Accountants..............................................  61
   Counsel..............................................................  61
   Registration Statement...............................................  61
   Report of Independent Accountants....................................  62
   Financial Statements.................................................  63
   Appendix A--Description of Securities Ratings........................ A-1
   Appendix B--Factors Pertaining to New York........................... B-1
   Appendix C--Performance Related and Comparative and Other Information C-1
</TABLE>

- --------------------------------------------------------------------------------

40

<PAGE>

  -----------------------------------------------------------------------------




[LOGO] PIMCO
FUNDS

  -----------------------------------------------------------------------------

<PAGE>

     The information in this Statement of Additional Information is not complete
and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This
Statement of Additional Information is not an offer to sell these securities and
it is not soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.

                    SUBJECT TO COMPLETION--DATED June 25, 2002

                      PIMCO NEW YORK MUNICIPAL INCOME FUND II

                       STATEMENT OF ADDITIONAL INFORMATION

                                  June 25, 2002

     PIMCO New York Municipal Income Fund II (the "Fund") is a newly organized,
non-diversified, closed-end management investment company.

     This Statement of Additional Information relating to common shares of the
Fund ("Common Shares") is not a prospectus, and should be read in conjunction
with the Fund's prospectus relating thereto dated June 25, 2002 (the
"Prospectus"). This Statement of Additional Information does not include all
information that a prospective investor should consider before purchasing Common
Shares, and investors should obtain and read the Prospectus prior to purchasing
such shares. A copy of the Prospectus may be obtained without charge by calling
(877) 819-2224. You may also obtain a copy of the Prospectus on the web site
(http://www.sec.gov) of the Securities and Exchange Commission ("SEC").
- ------------------ Capitalized terms used but not defined in this Statement of
Additional Information have the meanings ascribed to them in the Prospectus.


                                       1

<PAGE>

                                TABLE OF CONTENTS

USE OF PROCEEDS................................................................3
INVESTMENT OBJECTIVE AND POLICIES..............................................3
INVESTMENT RESTRICTIONS.......................................................27
MANAGEMENT OF THE FUND........................................................29
INVESTMENT MANAGER AND PORTFOLIO MANAGER......................................39
PORTFOLIO TRANSACTIONS........................................................44
DISTRIBUTIONS.................................................................46
DESCRIPTION OF SHARES.........................................................46
ANTI-TAKEOVER AND OTHER PROVISIONS IN THE DECLARATION OF TRUST................50
REPURCHASE OF COMMON SHARES; CONVERSION TO OPEN-END FUND......................52
TAX MATTERS...................................................................54
PERFORMANCE RELATED AND COMPARATIVE INFORMATION...............................60
CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSEMENT AGENT.....................60
INDEPENDENT ACCOUNTANTS.......................................................61
COUNSEL.......................................................................61
REGISTRATION STATEMENT........................................................61
REPORT OF INDEPENDENT ACCOUNTANTS.............................................62
FINANCIAL STATEMENTS..........................................................63
APPENDIX A - Description of Securities Ratings...............................A-1
APPENDIX B - Factors Pertaining to New York..................................B-1
APPENDIX C - Performance Related and Comparative and Other Information.......C-1

      This Statement of Additional Information is dated June 25, 2002.


                                       2

<PAGE>

                                 USE OF PROCEEDS

     The net proceeds of the offering of Common Shares of the Fund will be
approximately $[__________] (or $[__________] if the Underwriters exercise the
over-allotment option in full) after payment of organization and offering costs.

     On behalf of the Fund, PIMCO Funds Advisors LLC (the "Manager"), the Fund's
investment manager, has agreed to pay the amount by which the aggregate of all
of the Fund's organizational expenses and all offering costs (other than the
sales load) exceeds $0.03 per Common Share.

     Pending investment in Municipal Bonds (as hereinafter defined) that meet
the Fund's investment objective and policies, it is anticipated that the net
proceeds of the offering will be invested in high quality, short-term,
tax-exempt securities. If necessary to invest fully the net proceeds of the
offering immediately, the Fund may also purchase high quality, short-term
securities, including mortgage-backed and corporate debt securities, the income
on which is subject to regular federal, New York State and New York City income
tax.

                        INVESTMENT OBJECTIVE AND POLICIES

     The investment objective and general investment policies of the Fund are
described in the Prospectus. Additional information concerning the
characteristics of certain of the Fund's investments is set forth below.

Municipal Bonds

     Under normal market conditions, the Fund will invest substantially all (at
least 90%) of its total assets in municipal bonds which pay interest that, in
the opinion of bond counsel to the issuer (or on the basis of other authority
believed by the Fund's portfolio manager to be reliable), is exempt from
federal, New York State and New York City income taxes. The Fund will at all
times seek to avoid bonds generating interest potentially subjecting individuals
to the alternative minimum tax. "Municipal Bonds" as used in this Statement of
Additional Information refers generally to municipal bonds which pay interest
that is exempt from federal income tax.

     Municipal Bonds share the attributes of debt/fixed income securities in
general, but are generally issued by states, municipalities and other political
subdivisions, agencies, authorities and instrumentalities of states and
multi-state agencies or authorities. The Municipal Bonds that the Fund may
purchase include general obligation bonds and limited obligation bonds (or
revenue bonds), including industrial development bonds issued pursuant to former
federal tax law. General obligation bonds are obligations involving the credit
of an issuer possessing taxing power and are payable from such issuer's general
revenues and not from any particular source. Limited obligation bonds are
payable only from the revenues derived from a particular facility or class of
facilities or, in some cases, from the proceeds of a special excise or other
specific

                                       3

<PAGE>

revenue source. Tax-exempt private activity bonds and industrial development
bonds generally are also revenue bonds and thus are not payable from the
issuer's general revenues. The credit and quality of private activity bonds and
industrial development bonds are usually related to the credit of the corporate
user of the facilities. Payment of interest on and repayment of principal of
such bonds is the responsibility of the corporate user (and/or any guarantor).

     The Fund will invest at least 80% of its net assets in Municipal Bonds that
at the time of investment are investment grade quality. Investment grade quality
bonds are bonds rated within the four highest grades (Baa or BBB or better by
Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's ("S&P") or Fitch,
Inc. ("Fitch")) or bonds that are unrated but judged to be of comparable quality
by the Fund's portfolio manager, Pacific Investment Management Company LLC
("PIMCO"). The Fund may invest up to 20% of its net assets in Municipal Bonds
that, at the time of investment, are rated Ba/BB or B by Moody's, S&P or Fitch
or unrated but judged to be of comparable quality by PIMCO. Bonds of below
investment grade quality (Ba/BB or below) are commonly referred to as "junk
bonds." For a description of the risks associated with lower quality securities,
see "High Yield Securities (`Junk Bonds')" below.

     The Fund will primarily invest in Municipal Bonds with long-term maturities
in order to maintain a weighted average maturity of 15-30 years, but the average
weighted maturity of obligations held by the Fund may be shortened, depending on
market conditions. As a result, the Fund's portfolio at any given time may
include both long-term and intermediate-term Municipal Bonds. Moreover, for
temporary defensive purposes (e.g., during times when PIMCO believes that
temporary imbalances of supply and demand or other temporary dislocations in the
tax-exempt bond market adversely affect the price at which long-term or
intermediate-term Municipal Bonds are available), the Fund may invest any
percentage of its net assets in high quality, short-term investments, including
mortgage-backed and corporate debt securities, that may be either tax-exempt or
taxable, and up to 10% of its net assets in securities of open- or closed-end
investment companies that invest primarily in Municipal Bonds of the type in
which the Fund may invest directly. The Fund may also invest without limit in
these securities temporarily in order to keep the Fund's cash fully invested,
including periods during which the net proceeds of the offering are being
invested. The Fund intends to invest in taxable short-term investments only in
the event that suitable tax-exempt short-term investments are not available at
reasonable prices and yields. See "Tax Matters" for information relating to the
allocation of taxable income between and among Common Shares and any series of
the Fund's preferred shares (called "Preferred Shares" herein), if any.
Tax-exempt short-term investments include various obligations issued by state
and local governmental issuers, such as tax-exempt notes (bond anticipation
notes, tax anticipation notes and revenue anticipation notes or other such
Municipal Bonds maturing in three years or less from the date of issuance) and
municipal commercial paper. The Fund will invest only in taxable short-term
investments that are U.S. government securities or securities rated within the
four highest grade by Moody's, S&P or Fitch, and which mature within one year
from the date of purchase or carry a variable or floating rate of interest. See
Appendix A for a general description of Moody's, S&P's and Fitch's ratings of
securities in such categories. Taxable short-term investments of the Fund may
include certificates of deposit issued by U.S. banks with assets of at least $1
billion, or commercial paper or corporate notes, bonds or debentures with a
remaining maturity of one year or less, or repurchase agreements. See
"--Short-Term Investments/Temporary Defensive Strategies." To the extent the
Fund invests in taxable investments, the Fund will not at such times be in a
position to achieve its investment objective.

                                       4

<PAGE>

     Also included within the general category of Municipal Bonds in which the
Fund may invest are participations in lease obligations or installment purchase
contract obligations of municipal authorities or entities ("Municipal Lease
Obligations"). Although a Municipal Lease Obligation does not constitute a
general obligation of the municipality for which the municipality's taxing power
is pledged, a Municipal Lease Obligation is ordinarily backed by the
municipality's covenant to budget for, appropriate and make the payments due
under the Municipal Lease Obligation. However, certain Municipal Lease
Obligations contain "non-appropriation" clauses that provide that the
municipality has no obligation to make lease or installment purchase payments in
future years unless money is appropriated for such purpose on a yearly basis. In
the case of a "non-appropriation" lease, the Fund's ability to recover under the
lease in the event of non-appropriation or default will be limited solely to the
repossession of the leased property, without recourse to the general credit of
the lessee, and disposition or releasing of the property might prove difficult.
There have been challenges to the legality of lease financing in numerous
states, and, from time to time, certain municipalities have considered not
appropriating money for lease payments. In deciding whether to purchase a
Municipal Lease Obligation, PIMCO will assess the financial condition of the
borrower, the merits of the project, the level of public support for the
project, and the legislative history of lease financing in the state. These
securities may be less readily marketable than other Municipal Bonds. The Fund
may also purchase unrated lease obligations if determined by PIMCO to be of
comparable quality to rated securities in which the Fund is permitted to invest.

     The Fund may seek to enhance its yield through the purchase of private
placements. These securities are sold through private negotiations, usually to
institutions or mutual funds, and may have resale restrictions. Their yields are
usually higher than comparable public securities to compensate the investor for
their limited marketability. The Fund may invest up to 20% of its net assets
in securities which are illiquid at the time of investment, including
unmarketable private placements.

     Some longer-term Municipal Bonds give the investor the right to "put" or
sell the security at par (face value) within a specified number of days
following the investor's request--usually one to seven days. This demand feature
enhances a security's liquidity by shortening its effective maturity and enables
it to trade at a price equal to or very close to par. If a demand feature
terminates prior to being exercised, the Fund would hold the longer-term
security, which could experience substantially more volatility.

     The Fund may invest in Municipal Bonds with credit enhancements such as
letters of credit, municipal bond insurance and Standby Bond Purchase Agreements
("SBPAs"). Letters of credit are issued by a third party, usually a bank, to
enhance liquidity and ensure repayment of principal and any accrued interest if
the underlying Municipal Bond should default. Municipal bond insurance, which is
usually purchased by the bond issuer from a private, non-governmental insurance
company, provides an unconditional and irrevocable guarantee that the insured
bond's principal and interest will be paid when due. Insurance does not
guarantee the price of the bond or the share price of the Fund. The credit
rating of an insured bond reflects the credit rating of the insurer, based on
its claims-paying ability. The obligation of a municipal bond insurance company
to pay a claim extends over the life of each insured bond. Although defaults on
insured Municipal Bonds have been low to date and municipal bond insurers have
ordinarily met their claims, there is no assurance this will continue. A
higher-than-expected default rate could strain

                                       5

<PAGE>

the insurer's loss reserves and adversely affect its ability to pay claims to
bondholders. The number of municipal bond insurers is relatively small, and not
all of them have the highest rating. An SBPA is a liquidity facility provided to
pay the purchase price of bonds that cannot be re-marketed. The obligation of
the liquidity provider (usually a bank) is only to advance funds to purchase
tendered bonds that cannot be remarketed and does not cover principal or
interest under any other circumstances. The liquidity provider's obligations
under the SBPA are usually subject to numerous conditions, including the
continued creditworthiness of the underlying borrower.

     The Fund also may invest in participation interests. Participation
interests are various types of securities created by converting fixed rate bonds
into short-term, variable rate certificates. These securities have been
developed in the secondary market to meet the demand for short-term, tax-exempt
securities. The Fund will invest in such securities only if they are deemed
tax-exempt by a nationally recognized bond counsel, but there is no guarantee
the interest will be exempt.

     The Fund may also invest up to 10% of its total assets in residual interest
municipal bonds, which may involve leverage and related risks. See "--Residual
Interest Municipal Bonds (RIBS)" below.

     The Fund may purchase custodial receipts representing the right to receive
either the principal amount or the periodic interest payments or both with
respect to specific underlying Municipal Bonds. In a typical custodial receipt
arrangement, an issuer or third party owner of Municipal Bonds deposits the
bonds with a custodian in exchange for two classes of custodial receipts. The
two classes have different characteristics, but, in each case, payments on the
two classes are based on payments received on the underlying Municipal Bonds. In
no event will the aggregate interest paid with respect to the two classes exceed
the interest paid by the underlying Municipal Bond. Custodial receipts are sold
in private placements. The value of a custodial receipt may fluctuate more than
the value of a Municipal Bond of comparable quality and maturity.

     Municipal Bonds are subject to credit and market risk. Generally, prices of
higher quality issues tend to fluctuate less with changes in market interest
rates than prices of lower quality issues and prices of longer maturity issues
tend to fluctuate more than prices of shorter maturity issues.

     The Fund may purchase and sell portfolio investments to take advantage of
changes or anticipated changes in yield relationships, markets or economic
conditions. The Fund may also sell Municipal Bonds due to changes in PIMCO's
evaluation of the issuer. The secondary market for Municipal Bonds typically has
been less liquid than that for taxable debt/fixed income securities, and this
may affect the Fund's ability to sell particular Municipal Bonds at then-current
market prices, especially in periods when other investors are attempting to sell
the same securities.

     Prices and yields on Municipal Bonds are dependent on a variety of factors,
including general money-market conditions, the financial condition of the
issuer, general conditions of the Municipal Bond market, the size of a
particular offering, the maturity of the obligation and the rating of the issue.
A number of these factors, including the ratings of particular issues, are

                                       6

<PAGE>

subject to change from time to time. Information about the financial condition
of an issuer of Municipal Bonds may not be as extensive as that made available
by corporations whose securities are publicly traded.

     Obligations of issuers of Municipal Bonds are subject to the provisions of
bankruptcy, insolvency and other laws, such as the Federal Bankruptcy Reform Act
of 1978, affecting the rights and remedies of creditors. Congress or state
legislatures may seek to extend the time for payment of principal or interest,
or both, or to impose other constraints upon enforcement of such obligations.
There is also the possibility that as a result of litigation or other
conditions, the power or ability of issuers to meet their obligations for the
payment of interest and principal on their Municipal Bonds may be materially
affected or their obligations may be found to be invalid or unenforceable. Such
litigation or conditions may from time to time have the effect of introducing
uncertainties in the market for Municipal Bonds or certain segments thereof, or
of materially affecting the credit risk with respect to particular bonds.
Adverse economic, business, legal or political developments might affect all or
a substantial portion of the Fund's Municipal Bonds in the same manner. The Fund
will be particularly subject to these risks because it focuses its investments
in a particular state.

Factors Pertaining to New York

     Factors pertaining to New York are set forth in Appendix B.

Residual Interest Municipal Bonds (RIBS)

     The Fund may also invest up to 10% of its total assets in residual interest
Municipal Bonds ("RIBS") whose interest rates bear an inverse relationship to
the interest rate on another security or the value of an index. RIBS are created
by dividing the income stream provided by the underlying bonds to create two
securities, one short-term and one long-term. The interest rate on the
short-term component is reset by an index or auction process normally every
seven to 35 days. After income is paid on the short-term securities at current
rates, the residual income from the underlying bond(s) goes to the long-term
securities. Therefore, rising short-term interest rates result in lower income
for the longer-term portion, and vice versa. The longer-term bonds can be very
volatile and may be less liquid than other Municipal Bonds of comparable
maturity. An investment in RIBS typically will involve greater risk than an
investment in a fixed rate bond. Because increases in the interest rate on the
other security or index reduce the residual interest paid on a RIB, the value of
a RIB is generally more volatile than that of a fixed rate bond. RIBS have
interest rate adjustment formulas that generally reduce or, in the extreme,
eliminate the interest paid to the Fund when short-term interest rates rise, and
increase the interest paid to the Fund when short-term interest rates fall. RIBS
have varying degrees of liquidity that approximate the liquidity of the
underlying bond(s), and the market price for these securities is volatile. These
securities generally will underperform the market of fixed rate bonds in a
rising interest rate environment, but tend to outperform the market of fixed
rate bonds when interest rates decline or remain relatively stable. Although
volatile, RIBS typically offer the potential for yields exceeding the yields
available on fixed rate bonds with comparable credit quality, coupon, call
provisions and maturity. The Fund may also invest in RIBS for the purpose of
increasing the Fund's leverage as a more flexible alternative to the issuance of
Preferred Shares. Should short-term and long-term interest rates rise, the
combination of the Fund's

                                       7

<PAGE>

investment in RIBS and its use of other forms of leverage (including through the
issuance of Preferred Shares or the use of other derivative instruments) likely
will adversely affect the Fund's net asset value per share and income,
distributions and total returns to shareholders. Trusts in which RIBS may be
held could be terminated, in which case the residual bond holder would take
possession of the underlying bond(s) on an unleveraged basis.

Short-Term Investments / Temporary Defensive Strategies

     Upon PIMCO's recommendation, for temporary defensive purposes, the Fund may
invest up to 100% of its net assets in high quality, short-term investments,
including mortgage-backed and corporate debt securities, that may be either tax-
exempt or taxable. The Fund may also invest without limit in these securities
temporarily in order to keep the Fund's cash fully invested, including during
the period in which the net proceeds of the offering are being invested. The
Fund intends to invest in taxable short-term investments only in the event that
suitable tax-exempt short-term investments are not available at reasonable
prices and yields. To the extent the Fund invests in taxable short-term
investments, the Fund will not at such times be in a position to achieve its
investment objective of providing current income exempt from federal income tax.

     Short-Term Taxable Fixed Income Securities
     ------------------------------------------

     Short-term taxable fixed income investments are defined to include, without
limitation, the following:

          (1) U.S. government securities, including bills, notes and bonds
     differing as to maturity and rates of interest that are either issued or
     guaranteed by the U.S. Treasury or by U.S. government agencies or
     instrumentalities. U.S. government agency securities include, without
     limitation, securities issued by (a) the Federal Housing Administration,
     Farmers Home Administration, Export-Import Bank of the United States, Small
     Business Administration, and the Government National Mortgage Association,
     whose securities are supported by the full faith and credit of the United
     States; (b) the Federal Home Loan Banks, Federal Intermediate Credit Banks,
     and the Tennessee Valley Authority, whose securities are supported by the
     right of the agency to borrow from the U.S. Treasury; (c) the Federal
     National Mortgage Association, whose securities are supported by the
     discretionary authority of the U.S. government to purchase certain
     obligations of the agency or instrumentality; and (d) the Student Loan
     Marketing Association, whose securities are supported only by its credit.
     While the U.S. government provides financial support to such U.S.
     government-sponsored agencies or instrumentalities, no assurance can be
     given that it always will do so since it is not so obligated by law. The
     U.S. government, its agencies, and instrumentalities do not guarantee the
     market value of their securities. Consequently, the value of such
     securities may fluctuate.

          (2) Certificates of deposit issued against funds deposited in a bank
     or a savings and loan association. Such certificates are for a definite
     period of time, earn a specified rate of return, and are normally
     negotiable. The issuer of a certificate of deposit agrees to pay the amount
     deposited plus interest to the bearer of the certificate on the date
     specified thereon. Certificates of deposit purchased by the Fund may not be
     fully insured.

                                       8

<PAGE>

          (3) Repurchase agreements, which involve purchases of debt securities.
     A repurchase agreement is a contractual agreement whereby the seller of
     securities (e.g., U.S. government securities) agrees to repurchase the same
     security at a specified price on a future date agreed upon by the parties.
     The agreed-upon repurchase price determines the yield during the Fund's
     holding period. Repurchase agreements are considered to be loans
     collateralized by the underlying security that is the subject of the
     repurchase contract. Income generated from transactions in repurchase
     agreements will be taxable. The Fund will only enter into repurchase
     agreements with registered securities dealers or domestic banks that PIMCO
     believes present minimal credit risk. The risk to the Fund is limited to
     the ability of the issuer to pay the agreed-upon repurchase price on the
     delivery date; however, although the value of the underlying collateral at
     the time the transaction is entered into always equals or exceeds the
     agreed-upon repurchase price, if the value of the collateral declines there
     is a risk of loss of both principal and interest. In the event of default,
     the collateral may be sold but the Fund might incur a loss if the value of
     the collateral declines, and might incur disposition costs or experience
     delays in connection with liquidating the collateral. In addition, if
     bankruptcy proceedings are commenced with respect to the seller of the
     security, realization upon the collateral by the Fund may be delayed or
     limited. PIMCO will monitor the value of the collateral at the time the
     transaction is entered into and at all times subsequent during the term of
     the repurchase agreement in an effort to determine that such value always
     equals or exceeds the agreed-upon repurchase price.

          (4) Commercial paper, which consists of short-term unsecured
     promissory notes, including variable rate master demand notes issued by
     corporations to finance their current operations. Master demand notes are
     direct lending arrangements between the Fund and a corporation. There is no
     secondary market for such notes. However, they are redeemable by the Fund
     at any time. PIMCO will consider the financial condition of the corporation
     (e.g., earning power, cash flow, and other liquidity ratios) and will
     continuously monitor the corporation's ability to meet all of its financial
     obligations, because the Fund's liquidity might be impaired if the
     corporation were unable to pay principal and interest on demand.
     Investments in commercial paper will be limited to commercial paper rated
     investment grade by a major rating agency, or unrated but determined by
     PIMCO to be of comparable quality, and which mature within one year of the
     date of purchase or carry a variable or floating rate of interest.

     Short-Term Tax-Exempt Fixed Income Securities
     ---------------------------------------------

     Short-term tax-exempt fixed-income securities are securities that are
exempt from regular federal income tax and mature within three years or less
from the date of issuance. Short-term tax-exempt fixed income securities are
defined to include, without limitation, the following:

     Bond Anticipation Notes ("BANs") are usually general obligations of state
and local governmental issuers that are sold to obtain interim financing for
projects that will eventually be funded through the sale of long-term debt
obligations or bonds. The ability of an issuer to meet its obligations on its
BANs is primarily dependent on the issuer's access to the long-term Municipal
Bond market and the likelihood that the proceeds of such bond sales will be used
to pay the principal and interest on the BANs.

                                       9

<PAGE>

     Tax Anticipation Notes ("TANs") are issued by state and local governments
to finance the current operations of such governments. Repayment is generally to
be derived from specific future tax revenues. TANs are usually general
obligations of the issuer. A weakness in an issuer's capacity to raise taxes due
to, among other things, a decline in its tax base or a rise in delinquencies,
could adversely affect the issuer's ability to meet its obligations on
outstanding TANs.

     Revenue Anticipation Notes ("RANs") are issued by governments or
governmental bodies with the expectation that future revenues from a designated
source will be used to repay the notes. In general, they also constitute general
obligations of the issuer. A decline in the receipt of projected revenues, such
as anticipated revenues from another level of government, could adversely affect
an issuer's ability to meet its obligations on outstanding RANs. In addition,
the possibility that the revenues would, when received, be used to meet other
obligations could affect the ability of the issuer to pay the principal and
interest on RANs.

     Construction Loan Notes are issued to provide construction financing for
specific projects. Frequently, these notes are redeemed with funds obtained from
the Federal Housing Administration.

     Bank Notes are notes issued by local government bodies and agencies, such
as those described above to commercial banks as evidence of borrowings. The
purposes for which the notes are issued are varied but they are frequently
issued to meet short-term working capital or capital-project needs. These notes
may have risks similar to the risks associated with TANs and RANs.

     Tax-Exempt Commercial Paper ("Municipal Paper") represents very short-term
unsecured, negotiable promissory notes issued by states, municipalities and
their agencies. Payment of principal and interest on issues of Municipal Paper
may be made from various sources, to the extent the funds are available
therefrom. Maturities of Municipal Paper generally will be shorter than the
maturities of TANs, BANs or RANs. There is a limited secondary market for issues
of Municipal Paper.

     Certain Municipal Bonds may carry variable or floating rates of interest
whereby the rate of interest is not fixed but varies with changes in specified
market rates or indices, such as a bank prime rate or a tax-exempt money market
index.

     While the various types of notes described above as a group currently
represent the major portion of the tax-exempt note market, other types of notes
are or may become available in the marketplace and the Fund may invest in such
other types of notes to the extent permitted under its investment objective,
policies and limitations. Such notes may be issued for different purposes and
may be secured differently from those mentioned above.

     High Yield Securities ("Junk Bonds")

     The Fund may invest up to 20% of its net assets in Municipal Bonds that, at
the time of investment, are rated Ba/BB or B by Moody's, S&P or Fitch or unrated
but judged to be of comparable quality by PIMCO. Bonds of below investment grade
quality (Ba/BB or below) are commonly referred to as "high yield securities" or
"junk bonds." Issuers of bonds rated Ba/BB

                                       10

<PAGE>

or B are regarded as having current capacity to make principal and interest
payments but are subject to business, financial or economic conditions which
could adversely affect such payment capacity. Municipal bonds rated Baa or BBB
are considered "investment grade" securities, although such bonds may be
considered to possess some speculative characteristics. Municipal Bonds rated
AAA in which the Fund may invest may have been so rated on the basis of the
existence of insurance guaranteeing the timely payment, when due, of all
principal and interest.

     High yield securities are regarded as predominantly speculative with
respect to the issuer's continuing ability to meet principal and interest
payments and, therefore, carry greater price volatility and principal and income
risk, including the possibility of issuer default and bankruptcy and increased
market price volatility.

     High yield securities may be more susceptible to real or perceived adverse
economic and competitive industry conditions than investment grade securities. A
projection of an economic downturn or of a period of rising interest rates, for
example, could cause a decline in high yield security prices because the advent
of a recession could lessen the ability of an issuer to make principal and
interest payments on its debt securities. If an issuer of high yield securities
defaults, in addition to risking payment of all or a portion of interest and
principal, the Fund may incur additional expenses to seek recovery. In the case
of high yield securities structured as zero-coupon, their market prices are
affected to a greater extent by interest rate changes, and therefore tend to be
more volatile than securities which pay interest periodically and in cash. PIMCO
seeks to reduce these risks through diversification, credit analysis and
attention to current developments and trends in both the economy and financial
markets.

     The secondary market on which high yield securities are traded may be less
liquid than the market for higher grade securities. Less liquidity in the
secondary trading market could adversely affect the price at which the Fund
could sell a high yield security, and could adversely affect the daily net asset
value of the shares. Adverse publicity and investor perceptions, whether or not
based on fundamental analysis, may decrease the values and liquidity of high
yield securities, especially in a thinly traded market. When secondary markets
for high yield securities are less liquid than the market for higher grade
securities, it may be more difficult to value the securities because such
valuation may require more research, and elements of judgment may play a greater
role in the valuation because there is less reliable, objective data available.
During periods of thin trading in these markets, the spread between bid and
asked prices is likely to increase significantly and the Fund may have greater
difficulty selling its portfolio securities. The Fund will be more dependent on
PIMCO's research and analysis when investing in high yield securities. PIMCO
seeks to minimize the risks of investing in all securities through
diversification, in-depth credit analysis and attention to current developments
in interest rates and market conditions.

     A general description of Moody's, S&P's and Fitch's ratings of Municipal
Bonds is set forth in Appendix A hereto. The ratings of Moody's, S&P and Fitch
represent their opinions as to the quality of the Municipal Bonds they rate. It
should be emphasized, however, that ratings are general and are not absolute
standards of quality. Consequently, Municipal Bonds with the same maturity,
coupon and rating may have different yields while obligations with the same
maturity and coupon with different ratings may have the same yield. For these
reasons, the use of credit ratings as the sole method of evaluating high yield
securities can involve certain risks.

                                       11

<PAGE>

For example, credit ratings evaluate the safety of principal and interest
payments, not the market value risk of high yield securities. Also, credit
rating agencies may fail to change credit ratings in a timely fashion to reflect
events since the security was last rated. PIMCO does not rely solely on credit
ratings when selecting securities for the Fund, and develops its own independent
analysis of issuer credit quality.

     The Fund's credit quality policies apply only at the time a security is
purchased, and the Fund is not required to dispose of a security in the event
that a rating agency or PIMCO downgrades its assessment of the credit
characteristics of a particular issue. In determining whether to retain or sell
such a security, PIMCO may consider such factors as PIMCO's assessment of the
credit quality of the issuer of such security, the price at which such security
could be sold and the rating, if any, assigned to such security by other rating
agencies. However, analysis of the creditworthiness of issuers of high yield
securities may be more complex than for issuers of higher quality debt
securities.

Municipal Warrants

     The Fund may invest in municipal warrants, which are essentially call
options on Municipal Bonds. In exchange for a premium, they give the purchaser
the right, but not the obligation, to purchase a Municipal Bond in the future.
The Fund might purchase a warrant to lock in forward supply in an environment
where the current issuance of bonds is sharply reduced. Like options, warrants
may expire worthless and they may have reduced liquidity.

Mortgage-Backed Securities

     The Fund may invest in mortgage-backed securities. Mortgage-backed
securities in which the Fund may invest include fixed and adjustable rate
mortgage pass-through securities and other securities that directly or
indirectly represent a participation in, or are secured by and payable from,
mortgage loans on real property.

     The value of mortgage-backed securities may be particularly sensitive to
changes in prevailing interest rates. Early repayment of principal on some
mortgage-backed securities may expose the Fund to a lower rate of return upon
reinvestment of principal. When interest rates rise, the value of a
mortgage-backed security generally will decline; however, when interest rates
are declining, the value of mortgage-backed securities with prepayment features
may not increase as much as other fixed income securities without such
prepayment features. The rate of prepayments on underlying mortgages will affect
the price and volatility of a mortgage-backed security, and may shorten or
extend the effective maturity of the security beyond what was anticipated at the
time of purchase. If unanticipated rates of prepayment on underlying mortgages
increase the effective maturity of a mortgage-related security, the volatility
of the security can be expected to increase. The value of these securities may
fluctuate in response to the market's perception of the creditworthiness of the
issuers. Additionally, although mortgages and mortgage-backed securities are
generally supported by some form of government or private guarantee and/or
insurance, there is no assurance that private guarantors or insurers will meet
their obligations.

                                       12

<PAGE>

Variable and Floating Rate Securities

     Variable and floating rate securities provide for a periodic adjustment in
the interest rate paid on the obligations. The terms of such obligations must
provide that interest rates are adjusted periodically based upon an interest
rate adjustment index as provided in the respective obligations. The adjustment
intervals may be regular, and range from daily up to annually, or may be event
based, such as based on a change in the prime rate.

     The Fund may invest in floating rate debt instruments ("floaters") and
engage in credit spread trades. The interest rate on a floater is a variable
rate that is tied to another interest rate, such as a municipal bond index or
Treasury bill rate. The interest rate on a floater resets periodically,
typically every six months. While, because of the interest rate reset feature,
floaters provide the Fund with a certain degree of protection against rising
interest rates, the Fund will participate in any declines in interest rates as
well. A credit spread trade is an investment position relating to a difference
in the prices or interest rates of two bonds or other securities, where the
value of the investment position is determined by movements in the difference
between the prices or interest rates, as the case may be, of the respective
securities or currencies.

     The Fund may also invest in inverse floating rate debt instruments
("inverse floaters"). The interest rate on an inverse floater resets in the
opposite direction from the market rate of interest to which the inverse floater
is indexed. An inverse floating rate security may exhibit greater price
volatility than a fixed rate obligation of similar credit quality.

Structured Notes and Other Hybrid Instruments

     The Fund may invest in "structured" notes, which are privately negotiated
debt obligations where the principal and/or interest is determined by reference
to the performance of a benchmark asset, market or interest rate, such as
selected securities, an index of securities or specified interest rates, or the
differential performance of two assets or markets, such as indices reflecting
taxable and tax-exempt bonds. Depending on the terms of the note, the Fund may
forgo all or part of the interest and principal that would be payable on a
comparable conventional note. The rate of return on structured notes may be
determined by applying a multiplier to the performance or differential
performance of the referenced index(es) or other asset(s). Application of a
multiplier involves leverage that will serve to magnify the potential for gain
and the risk of loss. The Fund currently intends that any use of structured
notes will be for the purpose of reducing the interest rate sensitivity of the
Fund's portfolio (and, thereby, decreasing the Fund's exposure to interest rate
risk) and, in any event, that the interest income on the notes will normally be
exempt from federal, New York State and New York City income tax. Like other
sophisticated strategies, the Fund's use of structured notes may not work as
intended; for example, the change in the value of the structured notes may not
match very closely the change in the value of bonds that the structured notes
were purchased to hedge.

     The Fund may invest in other types of "hybrid" instruments that combine the
characteristics of securities, futures, and options. For example, the principal
amount or interest rate of a hybrid could be tied (positively or negatively) to
the price of some securities index or another interest rate (each a
"benchmark"). The interest rate or (unlike most debt obligations) the principal
amount payable at maturity of a hybrid security may be increased or decreased,

                                       13

<PAGE>

depending on changes in the value of the benchmark. Hybrids can be used as an
efficient means of pursuing a variety of investment goals, including duration
management and increased total return. Hybrids may not bear interest or pay
dividends. The value of a hybrid or its interest rate may be a multiple of a
benchmark and, as a result, may be leveraged and move (up or down) more steeply
and rapidly than the benchmark. These benchmarks may be sensitive to economic
and political events that cannot be readily foreseen by the purchaser of a
hybrid. Under certain conditions, the redemption value of a hybrid could be
zero. Thus, an investment in a hybrid may entail significant market risks that
are not associated with a similar investment in a traditional, U.S.
dollar-denominated bond that has a fixed principal amount and pays a fixed rate
or floating rate of interest. The purchase of hybrids also exposes the Fund to
the credit risk of the issuer of the hybrids. These risks may cause significant
fluctuations in the net asset value of the Fund.

     Certain issuers of structured products, such as hybrid instruments, may be
deemed to be investment companies as defined in the 1940 Act. As a result, the
Fund's investments in these products may be subject to limits applicable to
investments in investment companies and may be subject to restrictions contained
in the 1940 Act.

Municipal Market Data Rate Locks

     The Fund may purchase and sell Municipal Market Data Rate Locks ("MMD Rate
Locks"). An MMD Rate Lock permits the Fund to lock in a specified municipal
interest rate for a portion of its portfolio to preserve a return on a
particular investment or a portion of its portfolio as a duration management
technique or to protect against any increase in the price of securities to be
purchased at a later date. The Fund will ordinarily use these transactions as a
hedge or for duration or risk management although it is permitted to enter into
them to enhance income or gain. An MMD Rate Lock is a contract between the Fund
and an MMD Rate Lock provider pursuant to which the parties agree to make
payments to each other on a notional amount, contingent upon whether the
Municipal Market Data AAA General Obligation Scale is above or below a specified
level on the expiration date of the contract. For example, if the Fund buys an
MMD Rate Lock and the Municipal Market Data AAA General Obligation Scale is
below the specified level on the expiration date, the counterparty to the
contract will make a payment to the Fund equal to the specified level minus the
actual level, multiplied by the notional amount of the contract. If the
Municipal Market Data AAA General Obligation Scale is above the specified level
on the expiration date, the Fund will make a payment to the counterparty equal
to the actual level minus the specified level, multiplied by the notional amount
of the contract. In entering into MMD Rate Locks, there is a risk that municipal
yields will move in the direction opposite of the direction anticipated by the
Fund.

Borrowing

     The Fund may borrow money to the extent permitted under the 1940 Act, as
interpreted, modified or otherwise permitted by regulatory authority having
jurisdiction from time to time. The Fund may from time to time borrow money to
add leverage to the portfolio. The Fund may also borrow money for temporary
administrative purposes.

     Under the 1940 Act, the Fund generally is not permitted to engage in
borrowings unless immediately after a borrowing the value of the Fund's total
assets less liabilities (other than the

                                       14

<PAGE>

borrowing) is at least 300% of the principal amount of such borrowing (i.e.,
such principal amount may not exceed 33 1/3% of the Fund's total assets). In
addition, the Fund is not permitted to declare any cash dividend or other
distribution on Common Shares unless, at the time of such declaration, the value
of the Fund's total assets, less liabilities other than borrowing, is at least
300% of such principal amount. If the Fund borrows, it intends, to the extent
possible, to prepay all or a portion of the principal amount of the borrowing to
the extent necessary in order to maintain the required asset coverage. Failure
to maintain certain asset coverage requirements could result in an event of
default and entitle holders of Preferred Shares ("Preferred Shareholders") to
elect a majority of the Trustees of the Fund.

     As described elsewhere in this section, the Fund also may enter into
certain transactions, including RIBS and other derivative instruments that can
constitute a form of borrowing or financing transaction by the Fund. The Fund
may enter into these transactions in order to add leverage to the portfolio. The
Fund may (but is not required to) cover its commitment under these instruments
by the segregation of assets determined to be liquid by PIMCO in accordance with
procedures adopted by the Trustees, equal in value to the amount of the Fund's
commitment, or by entering into offsetting transactions or owning positions
covering its obligations. In that case, the instruments will not be considered
"senior securities" under the 1940 Act for purposes of the asset coverage
requirements otherwise applicable to borrowings by the Fund or the Fund's
issuance of Preferred Shares. Borrowing will tend to exaggerate the effect on
net asset value of any increase or decrease in the market value of the Fund's
portfolio. Money borrowed will be subject to interest costs that may or may not
be recovered by appreciation of the securities purchased. The Fund also may be
required to maintain minimum average balances in connection with such borrowing
or to pay a commitment or other fee to maintain a line of credit; either of
these requirements would increase the cost of borrowing over the stated interest
rate.

Derivative Instruments

     In pursuing its investment objective, the Fund may purchase and sell
(write) both put options and call options on securities, swap agreements, and
securities indexes, and enter into interest rate and index futures contracts and
purchase and sell options on such futures contracts ("futures options") to add
leverage to the portfolio, for hedging purposes or as part of its overall
investment strategy. The Fund also may enter into swap agreements with respect
to interest rates, securities indexes and other assets and measures of risk or
return. If other types of financial instruments, including other types of
options, futures contracts, or futures options are traded in the future, the
Fund may also use those instruments, provided that the Trustees determine that
their use is consistent with the Fund's investment objective.

     The value of some derivative instruments in which the Fund may invest may
be particularly sensitive to changes in prevailing interest rates, and, like the
other investments of the Fund, the ability of the Fund to successfully utilize
these instruments may depend in part upon the ability of PIMCO to forecast
interest rates and other economic factors correctly. If PIMCO incorrectly
forecasts such factors and has taken positions in derivative instruments
contrary to prevailing market trends, the Fund could be exposed to the risk of
loss.

                                       15

<PAGE>

     The Fund might not employ any of the strategies described below, and no
assurance can be given that any strategy used will succeed. If PIMCO incorrectly
forecasts interest rates, market values or other economic factors in utilizing a
derivatives strategy for the Fund, the Fund might have been in a better position
if it had not entered into the transaction at all. Also, suitable derivative
transactions may not be available in all circumstances. The use of these
strategies involves certain special risks, including a possible imperfect
correlation, or even no correlation, between price movements of derivative
instruments and price movements of related investments. While some strategies
involving derivative instruments can reduce the risk of loss, they can also
reduce the opportunity for gain or even result in losses by offsetting favorable
price movements in related investments or otherwise, due to the possible
inability of the Fund to purchase or sell a portfolio security at a time that
otherwise would be favorable or the possible need to sell a portfolio security
at a disadvantageous time because the Fund is required to maintain asset
coverage or offsetting positions in connection with transactions in derivative
instruments, and the possible inability of the Fund to close out or to liquidate
its derivatives positions. Income earned by the Fund from many derivative
strategies will be treated as capital gain and, if not offset by net realized
capital loss, will be distributed to shareholders in taxable distributions.

     Options on Securities, Swap Agreements and Indexes. The Fund may purchase
and sell both put and call options on securities, swap agreements or indexes in
standardized contracts traded on domestic or other securities exchanges, boards
of trade, or similar entities, or quoted on NASDAQ or on an over-the-counter
market, and agreements, sometimes called cash puts, which may accompany the
purchase of a new issue of debt obligations from a dealer.

     An option on a security (or an index) is a contract that gives the holder
of the option, in return for a premium, the right to buy from (in the case of a
call) or sell to (in the case of a put) the writer of the option the security
underlying the option (or the cash value of the index) at a specified exercise
price at any time during the term of the option. The writer of an option on a
security has the obligation upon exercise of the option to deliver the
underlying security upon payment of the exercise price or to pay the exercise
price upon delivery of the underlying security. Upon exercise, the writer of an
option on an index is obligated to pay the difference between the cash value of
the index and the exercise price multiplied by the specified multiplier for the
index option. (An index is designed to reflect features of a particular
securities market, a specific group of financial instruments or securities, or
certain economic indicators.)

     The Fund will write call options and put options only if they are
"covered." In the case of a call option on a security, the option is "covered"
if the Fund owns the security underlying the call or has an absolute and
immediate right to acquire that security without additional cash consideration
(or, if additional cash consideration is required, cash or other assets
determined to be liquid by PIMCO in accordance with procedures established by
the Board of Trustees, in such amount are segregated by its custodian) upon
conversion or exchange of other securities held by the Fund. For a call option
on an index, the option is covered if the Fund maintains with its custodian
assets determined to be liquid by PIMCO in accordance with procedures
established by the Board of Trustees, in an amount equal to the contract value
of the index. A call option is also covered if the Fund holds a call on the same
security or index as the call written where the exercise price of the call held
is (i) equal to or less than the exercise price of the call written, or (ii)
greater than the exercise price of the call written, provided the difference is
maintained by the

                                       16

<PAGE>

Fund in segregated assets determined to be liquid by PIMCO in accordance with
procedures established by the Board of Trustees. A put option on a security or
an index is "covered" if the Fund segregates assets determined to be liquid by
PIMCO in accordance with procedures established by the Board of Trustees equal
to the exercise price. A put option is also covered if the Fund holds a put on
the same security or index as the put written where the exercise price of the
put held is (i) equal to or greater than the exercise price of the put written,
or (ii) less than the exercise price of the put written, provided the difference
is maintained by the Fund in segregated assets determined to be liquid by PIMCO
in accordance with procedures established by the Board of Trustees.

     If an option written by the Fund expires unexercised, the Fund realizes a
capital gain equal to the premium received at the time the option was written.
If an option purchased by the Fund expires unexercised, the Fund realizes a
capital loss equal to the premium paid. Prior to the earlier of exercise or
expiration, an exchange-traded option may be closed out by an offsetting
purchase or sale of an option of the same series (type, exchange, underlying
security or index, exercise price, and expiration). There can be no assurance,
however, that a closing purchase or sale transaction can be effected when the
Fund desires.

     The Fund may sell put or call options it has previously purchased, which
could result in a net gain or loss depending on whether the amount realized on
the sale is more or less than the premium and other transaction costs paid on
the put or call option which is sold. Prior to exercise or expiration, an option
may be closed out by an offsetting purchase or sale of an option of the same
series. The Fund will realize a capital gain from a closing purchase transaction
if the cost of the closing option is less than the premium received from writing
the option, or, if it is more, the Fund will realize a capital loss. If the
premium received from a closing sale transaction is more than the premium paid
to purchase the option, the Fund will realize a capital gain or, if it is less,
the Fund will realize a capital loss. The principal factors affecting the market
value of a put or a call option include supply and demand, interest rates, the
current market price of the underlying security or index in relation to the
exercise price of the option, the volatility of the underlying security or
index, and the time remaining until the expiration date.

     The premium paid for a put or call option purchased by the Fund is an asset
of the Fund. The premium received for an option written by the Fund is recorded
as a deferred credit. The value of an option purchased or written is marked to
market daily and is valued at the closing price on the exchange on which it is
traded or, if not traded on an exchange or no closing price is available, at the
mean between the last bid and asked prices.

     The Fund may write covered straddles consisting of a combination of a call
and a put written on the same underlying security. A straddle will be covered
when sufficient assets are deposited to meet the Fund's immediate obligations.
The Fund may use the same liquid assets to cover both the call and put options
where the exercise price of the call and put are the same, or the exercise price
of the call is higher than that of the put. In such cases, the Fund will also
segregate liquid assets equivalent to the amount, if any, by which the put is
"in the money."

     Risks Associated with Options on Securities and Indexes. There are several
risks associated with transactions in options on securities and on indexes. For
example, there are

                                       17

<PAGE>

significant differences between the securities and options markets that could
result in an imperfect correlation between these markets, causing a given
transaction not to achieve its objectives. A decision as to whether, when and
how to use options involves the exercise of skill and judgment, and even a
well-conceived transaction may be unsuccessful to some degree because of market
behavior or unexpected events.

     During the option period, the covered call writer has, in return for the
premium on the option, given up the opportunity to profit from a price increase
in the underlying security above the exercise price, but, as long as its
obligation as a writer continues, has retained the risk of loss should the price
of the underlying security decline. The writer of an option has no control over
the time when it may be required to fulfill its obligation as a writer of the
option. Once an option writer has received an exercise notice, it cannot effect
a closing purchase transaction in order to terminate its obligation under the
option and must deliver the underlying security at the exercise price. If a put
or call option purchased by the Fund is not sold when it has remaining value,
and if the market price of the underlying security remains equal to or greater
than the exercise price (in the case of a put), or remains less than or equal to
the exercise price (in the case of a call), the Fund will lose its entire
investment in the option. Also, where a put or call option on a particular
security is purchased to hedge against price movements in a related security,
the price of the put or call option may move more or less than the price of the
related security.

     There can be no assurance that a liquid market will exist when the Fund
seeks to close out an option position. If the Fund were unable to close out an
option that it had purchased on a security, it would have to exercise the option
in order to realize any profit or the option may expire worthless. If the Fund
were unable to close out a covered call option that it had written on a
security, it would not be able to sell the underlying security unless the option
expired without exercise. As the writer of a covered call option, the Fund
forgoes, during the option's life, the opportunity to profit from increases in
the market value of the security covering the call option above the sum of the
premium and the exercise price of the call.

     If trading were suspended in an option purchased by the Fund, the Fund
would not be able to close out the option. If restrictions on exercise were
imposed, the Fund might be unable to exercise an option it has purchased. Except
to the extent that a call option on an index written by the Fund is covered by
an option on the same index purchased by the Fund, movements in the index may
result in a loss to the Fund; however, such losses may be mitigated by changes
in the value of the Fund's securities during the period the option was
outstanding.

     Futures Contracts and Options on Futures Contracts. The Fund may invest in
interest rate futures contracts and options thereon ("futures options"). The
Fund may also purchase and sell futures contracts on Municipal Bonds and U.S.
government and agency securities, as well as purchase put and call options on
such futures contracts.

     A securities or interest rate futures contract provides for the future sale
by one party and purchase by another party of a specified quantity of the
security or financial instrument representative of interest rate fluctuations at
a specified price and time. A futures contract on an index is an agreement
pursuant to which two parties agree to take or make delivery of an amount of
cash equal to the difference between the value of the index at the close of the
last trading day

                                       18

<PAGE>

of the contract and the price at which the index contract was originally
written. Although the value of an index might be a function of the value of
certain specified securities, physical delivery of these securities is not
always made. A public market exists in futures contracts covering a number of
indexes as well as financial instruments, including, without limitation: U.S.
Treasury bonds; U.S. Treasury notes; three-month U.S. Treasury bills; 90-day
commercial paper; bank certificates of deposit; and the Bond Buyer 40 Bond
Index. It is expected that other futures contracts will be developed and traded
in the future.

     The Fund may purchase and write call and put futures options. Futures
options possess many of the same characteristics as options on securities and
indexes (discussed above). A futures option gives the holder the right, in
return for the premium paid, to assume a long position (call) or short position
(put) in a futures contract at a specified exercise price at any time during the
period of the option. Upon exercise of a call option, the holder acquires a long
position in the futures contract and the writer is assigned the opposite short
position. In the case of a put option, the opposite is true.

     To comply with applicable rules of the Commodity Futures Trading Commission
("CFTC") under which the Fund avoids being deemed a "commodity pool" or a
"commodity pool operator," the Fund intends generally to limit its use of
futures contracts and futures options to "bona fide hedging" transactions, as
such term is defined in applicable regulations, interpretations and practice.
For example, the Fund might use futures contracts to hedge against anticipated
changes in interest rates that might adversely affect either the value of the
Fund's Municipal Bonds or the price of the bonds that the Fund intends to
purchase. The Fund's hedging activities may include sales of futures contracts
as an offset against the effect of expected increases in interest rates, and
purchases of futures contracts as an offset against the effect of expected
declines in interest rates. Although other techniques could be used to reduce
the Fund's exposure to interest rate fluctuations, the Fund may be able to hedge
its exposure more effectively and perhaps at a lower cost by using futures
contracts and futures options.

     The Fund will only enter into futures contracts and futures options that
are standardized and traded on a U.S. or other exchange, board of trade, or
similar entity, or quoted on an automated quotation system. The Fund may also
enter into OTC options on futures contracts.

     When a purchase or sale of a futures contract is made by the Fund, the Fund
is required to deposit with its custodian (or broker, if legally permitted) a
specified amount of assets determined to be liquid by PIMCO in accordance with
procedures established by the Board of Trustees ("initial margin"). The margin
required for a futures contract is set by the exchange on which the contract is
traded and may be modified during the term of the contract. The initial margin
is in the nature of a performance bond or good faith deposit on the futures
contract that is returned to the Fund upon termination of the contract, assuming
all contractual obligations have been satisfied. The Fund expects to earn
taxable interest income on its initial margin deposits. A futures contract held
by the Fund is valued daily at the official settlement price of the exchange on
which it is traded. Each day the Fund pays or receives cash, called "variation
margin," equal to the daily change in value of the futures contract. This
process is known as "marking to market." Variation margin does not represent a
borrowing or loan by the Fund but is instead a settlement between the Fund and
the broker of the amount one would owe the other if the futures

                                       19

<PAGE>

contract expired. In computing daily net asset value, the Fund will mark to
market its open futures positions.

     The Fund is also required to deposit and maintain margin with respect to
put and call options on futures contracts written by it. Such margin deposits
will vary depending on the nature of the underlying futures contract (and the
related initial margin requirements), the current market value of the option,
and other futures positions held by the Fund.

     Although some futures contracts call for making or taking delivery of the
underlying securities, generally these obligations are closed out prior to
delivery by offsetting purchases or sales of matching futures contracts
(involving the same exchange, underlying security or index, and delivery month).
If an offsetting purchase price is less than the original sale price, the Fund
realizes a capital gain, or if it is more, the Fund realizes a capital loss.
Conversely, if an offsetting sale price is more than the original purchase
price, the Fund realizes a capital gain, or if it is less, the Fund realizes a
capital loss. The transaction costs must also be included in these calculations.

     The Fund may write covered straddles consisting of a call and a put written
on the same underlying futures contract. A straddle will be covered when
sufficient assets are deposited to meet the Fund's immediate obligations. The
Fund may use the same liquid assets to cover both the call and put options where
the exercise price of the call and put are the same, or the exercise price of
the call is higher than that of the put. In such cases, the Fund will also
segregate liquid assets equivalent to the amount, if any, by which the put is
"in the money."

     Limitations on Use of Futures and Futures Options. As noted above, the Fund
generally intends to enter into positions in futures contracts and related
options only for "bona fide hedging" purposes. With respect to positions in
futures and related options that do not constitute bona fide hedging positions,
the Fund will not enter into a futures contract or futures option contract if,
immediately thereafter, the aggregate initial margin deposits relating to such
positions plus premiums paid by it for open futures option positions, less the
amount by which any such options are "in-the-money," would exceed 5% of the
Fund's liquidation value, after taking into account unrealized profits and
unrealized losses on any such contracts into which the Fund has entered. A call
option is "in-the-money" if the value of the futures contract that is the
subject of the option exceeds the exercise price. A put option is "in-the-money"
if the exercise price exceeds the value of the futures contract that is the
subject of the option.

     When purchasing a futures contract, the Fund will maintain with its
custodian (and mark-to-market on a daily basis) assets determined to be liquid
by PIMCO in accordance with procedures established by the Board of Trustees,
that, when added to the amounts deposited with a futures commission merchant as
margin, are equal to the market value of the futures contract. Alternatively,
the Fund may "cover" its position by purchasing a put option on the same futures
contract with a strike price as high or higher than the price of the contract
held by the Fund.

     When selling a futures contract, the Fund will maintain with its custodian
(and mark-to-market on a daily basis) assets determined to be liquid by PIMCO in
accordance with procedures established by the Board of Trustees, that are equal
to the market value of the instruments

                                       20

<PAGE>

underlying the contract. Alternatively, the Fund may "cover" its position by
owning the instruments underlying the contract (or, in the case of an index
futures contract, a portfolio with a volatility substantially similar to that of
the index on which the futures contract is based), or by holding a call option
permitting the Fund to purchase the same futures contract at a price no higher
than the price of the contract written by the Fund (or at a higher price if the
difference is maintained in liquid assets with the Fund's custodian).

     When selling a call option on a futures contract, the Fund will maintain
with its custodian (and mark-to-market on a daily basis) assets determined to be
liquid by PIMCO in accordance with procedures established by the Board of
Trustees, that, when added to the amounts deposited with a futures commission
merchant as margin, equal the total market value of the futures contract
underlying the call option. Alternatively, the Fund may cover its position by
entering into a long position in the same futures contract at a price no higher
than the strike price of the call option, by owning the instruments underlying
the futures contract, or by holding a separate call option permitting the Fund
to purchase the same futures contract at a price not higher than the strike
price of the call option sold by the Fund.

     When selling a put option on a futures contract, the Fund will maintain
with its custodian (and mark-to-market on a daily basis) assets determined to be
liquid by PIMCO in accordance with procedures established by the Board of
Trustees, that equal the purchase price of the futures contract, less any margin
on deposit. Alternatively, the Fund may cover the position either by entering
into a short position in the same futures contract, or by owning a separate put
option permitting it to sell the same futures contract so long as the strike
price of the purchased put option is the same or higher than the strike price of
the put option sold by the Fund.

     To the extent that securities with maturities greater than one year are
used to segregate assets to cover the Fund's obligations under futures contracts
and related options, such use will not eliminate the leverage risk arising from
such use, which may tend to exaggerate the effect on net asset value of any
increase or decrease in the market value of the Fund's portfolio, and may
require liquidation of portfolio positions when it is not advantageous to do so.

     The requirements for qualification as a regulated investment company also
may limit the extent to which the Fund may enter into futures, futures options
or forward contracts. See "Tax Matters."

     Risks Associated with Futures and Futures Options. There are several risks
associated with the use of futures contracts and futures options as hedging
techniques. A purchase or sale of a futures contract may result in losses in
excess of the amount invested in the futures contract. There can be no guarantee
that there will be a correlation between price movements in the hedging vehicle
and in the Fund securities being hedged. In addition, there are significant
differences between the securities and futures markets that could result in an
imperfect correlation between the markets, causing a given hedge not to achieve
its objectives. The degree of imperfection of correlation depends on
circumstances such as variations in speculative market demand for futures and
futures options on securities, including technical influences in futures trading
and futures options, and differences between the financial instruments being
hedged and the instruments underlying the standard contracts available for
trading in such respects as interest

                                       21

<PAGE>

rate levels, maturities, and creditworthiness of issuers. A decision as to
whether, when and how to hedge involves the exercise of skill and judgment, and
even a well-conceived hedge may be unsuccessful to some degree because of market
behavior or unexpected interest rate trends.

     Futures contracts on U.S. government securities historically have reacted
to an increase or decrease in interest rates in a manner similar to that in
which the underlying U.S. government securities reacted. To the extent, however,
that the Fund enters into such futures contracts, the value of such futures will
not vary in direct proportion to the value of the Fund's holdings of Municipal
Bonds. Thus, the anticipated spread between the price of the futures contract
and the hedged security may be distorted due to differences in the nature of the
markets. The spread also may be distorted by differences in initial and
variation margin requirements, the liquidity of such markets and the
participation of speculators in such markets.

     Futures exchanges may limit the amount of fluctuation permitted in certain
futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or
down from the previous day's settlement price at the end of the current trading
session. Once the daily limit has been reached in a futures contract subject to
the limit, no more trades may be made on that day at a price beyond that limit.
The daily limit governs only price movements during a particular trading day and
therefore does not limit potential losses because the limit may work to prevent
the liquidation of unfavorable positions. For example, futures prices have
occasionally moved to the daily limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of positions and
subjecting some holders of futures contracts to substantial losses.

     There can be no assurance that a liquid market will exist at a time when
the Fund seeks to close out a futures contract or a futures option position, and
the Fund would remain obligated to meet margin requirements until the position
is closed. In addition, many of the contracts discussed above are relatively new
instruments without a significant trading history. As a result, there can be no
assurance that an active secondary market will develop or continue to exist.

     Swap Agreements. The Fund may enter into swap agreements with respect to
interest rates, indexes of securities and other assets or measures of risk or
return. The Fund may also enter into options on swap agreements ("swaptions").
These transactions are entered into in an attempt to obtain a particular return
when it is considered desirable to do so, possibly at a lower cost to the Fund
than if the Fund had invested directly in an instrument that yielded that
desired return. Swap agreements are two-party contracts entered into primarily
by institutional investors for periods ranging from a few weeks to more than one
year. In a standard "swap" transaction, two parties agree to exchange the
returns (or differentials in rates of return) earned or realized on particular
predetermined investments or instruments, which may be adjusted for an interest
factor. The gross returns to be exchanged or "swapped" between the parties are
generally calculated with respect to a "notional amount," i.e., the return on or
increase in value of a particular dollar amount invested at a particular
interest rate or in a "basket" of securities representing a particular index.
Forms of swap agreements include interest rate caps, under which, in return for
a premium, one party agrees to make payments to the other to the extent that
interest rates exceed a specified rate, or "cap"; interest rate floors, under
which, in return for a premium, one party agrees to make payments to the other
to the extent that interest rates fall

                                       22

<PAGE>

below a specified rate, or "floor"; and interest rate collars, under which a
party sells a cap and purchases a floor or vice versa in an attempt to protect
itself against interest rate movements exceeding given minimum or maximum
levels. A swaption is a contract that gives a counterparty the right (but not
the obligation) to enter into a new swap agreement or to shorten, extend, cancel
or otherwise modify an existing swap agreement, at some designated future time
on specified terms. The Fund may write (sell) and purchase put and call
swaptions.

     Most swap agreements entered into by the Fund would calculate the
obligations of the parties to the agreement on a "net basis." Consequently, the
Fund's current obligations (or rights) under a swap agreement will generally be
equal only to the net amount to be paid or received under the agreement based on
the relative values of the positions held by each party to the agreement (the
"net amount"). The Fund's current obligations under a swap agreement will be
accrued daily (offset against any amounts owed to the Fund). The Fund may use
swap agreements to add leverage to the portfolio. The Fund may (but is not
required to) cover any accrued but unpaid net amounts owed to a swap
counterparty through the segregation of assets determined to be liquid by PIMCO
in accordance with procedures established by the Board of Trustees. Obligations
under swap agreements so covered will not be construed to be "senior securities"
for purposes of the Fund's investment restriction concerning senior securities
and borrowings.

     Whether the Fund's use of swap agreements or swaptions will be successful
in furthering its investment objective will depend on PIMCO's ability to predict
correctly whether certain types of investments are likely to produce greater
returns than other investments. Because they are two-party contracts and because
they may have terms of greater than seven days, swap agreements may be
considered to be illiquid. Moreover, the Fund bears the risk of loss of the
amount expected to be received under a swap agreement in the event of the
default or bankruptcy of a swap agreement counterparty. The Fund will enter into
swap agreements only with counterparties that meet certain standards of
creditworthiness. The swaps market is a relatively new market and is largely
unregulated. It is possible that developments in the swaps market, including
potential government regulation, could adversely affect the Fund's ability to
terminate existing swap agreements or to realize amounts to be received under
such agreements.

     Depending on the terms of the particular option agreement, the Fund will
generally incur a greater degree of risk when it writes a swaption than it will
incur when it purchases a swaption. When the Fund purchases a swaption, it risks
losing only the amount of the premium it has paid should it decide to let the
option expire unexercised. However, when the Fund writes a swaption, upon
exercise of the option the Fund will become obligated according to the terms of
the underlying agreement.

     Certain swap agreements are exempt from most provisions of the Commodity
Exchange Act ("CEA") and, therefore, are not regulated as futures or commodity
option transactions under the CEA.

                                       23

<PAGE>

Short Sales

     The Fund may make short sales of securities as part of its overall
portfolio management strategy and to offset potential declines in long positions
in securities in the Fund's portfolio. A short sale is a transaction in which
the Fund sells a security it does not own in anticipation that the market price
of that security will decline. Although short sale transactions are not
currently available with respect to Municipal Bonds, the Fund may engage in
short sales on taxable bonds and on futures contracts with respect to Municipal
Bonds and taxable bonds.

     When the Fund makes a short sale on a security, it must borrow the security
sold short and deliver it to the broker-dealer through which it made the short
sale as collateral for its obligation to deliver the security upon conclusion of
the sale. The Fund may have to pay a fee to borrow particular securities and is
often obligated to pay over any accrued interest and dividends on such borrowed
securities.

     If the price of the security sold short increases between the time of the
short sale and the time the Fund replaces the borrowed security, the Fund will
incur a loss; conversely, if the price declines, the Fund will realize a capital
gain. Any gain will be decreased, and any loss increased, by the transaction
costs described above. The successful use of short selling may be adversely
affected by imperfect correlation between movements in the price of the security
sold short and the securities being hedged.

     To the extent that the Fund engages in short sales, it will provide
collateral to the broker-dealer. A short sale is "against the box" to the extent
that the Fund contemporaneously owns, or has the right to obtain at no added
cost, securities identical to those sold short. The Fund may also engage in
so-called "naked" short sales (i.e., short sales that are not "against the
box"), in which case the Fund's losses could theoretically be unlimited, in
cases where the Fund is unable for whatever reason to close out its short
position. The Fund has the flexibility to engage in short selling to the extent
permitted by the 1940 Act and rules and interpretations thereunder.

Illiquid Securities

     The Fund may invest up to 20% of its net assets in securities which are
illiquid at the time of investment. The term "illiquid securities" for this
purpose means securities that cannot be disposed of within seven days in the
ordinary course of business at approximately the amount at which the Fund has
valued the securities. Illiquid securities are considered to include, among
other things, written over-the-counter options, securities or other liquid
assets being used as cover for such options, repurchase agreements with
maturities in excess of seven days, certain loan participation interests, fixed
time deposits which are not subject to prepayment or provide for withdrawal
penalties upon prepayment (other than overnight deposits), and other securities
whose disposition is restricted under the federal securities laws (other than
securities issued pursuant to Rule 144A under the 1933 Act and certain
commercial paper that PIMCO has determined to be liquid under procedures
approved by the Board of Trustees).

     Illiquid securities may include privately placed securities, which are sold
directly to a small number of investors, usually institutions. Unlike public
offerings, such securities are not

                                       24

<PAGE>

registered under the federal securities laws. Although certain of these
securities may be readily sold, others may be illiquid, and their sale may
involve substantial delays and additional costs.

Portfolio Trading and Turnover Rate

     Portfolio trading may be undertaken to accomplish the investment objective
of the Fund in relation to actual and anticipated movements in interest rates.
In addition, a security may be sold and another of comparable quality purchased
at approximately the same time to take advantage of what PIMCO believes to be a
temporary price disparity between the two securities. Temporary price
disparities between two comparable securities may result from supply and demand
imbalances where, for example, a temporary oversupply of certain bonds may cause
a temporarily low price for such bonds, as compared with other bonds of like
quality and characteristics. The Fund may also engage in short-term trading
consistent with its investment objective. Securities may be sold in anticipation
of a market decline (a rise in interest rates) or purchased in anticipation of a
market rise (a decline in interest rates) and later sold, or to recognize a
gain.

     A change in the securities held by the Fund is known as "portfolio
turnover." PIMCO manages the Fund without regard generally to restrictions on
portfolio turnover. The use of certain derivative instruments with relatively
short maturities may tend to exaggerate the portfolio turnover rate for the
Fund. Trading in debt obligations does not generally involve the payment of
brokerage commissions, but does involve indirect transaction costs. The use of
futures contracts may involve the payment of commissions to futures commission
merchants. High portfolio turnover (e.g., greater than 100%) involves
correspondingly greater expenses to the Fund, including brokerage commissions or
dealer mark-ups and other transaction costs on the sale of securities and
reinvestments in other securities. The higher the rate of portfolio turnover of
the Fund, the higher these transaction costs borne by the Fund generally will
be. Transactions in the Fund's portfolio securities may result in realization of
taxable capital gains (including short-term capital gains which are generally
taxed to shareholders at ordinary income tax rates). The trading costs and tax
effects associated with portfolio turnover may adversely affect the Fund's
performance.

     The portfolio turnover rate of the Fund is calculated by dividing (a) the
lesser of purchases or sales of portfolio securities for the particular fiscal
year by (b) the monthly average of the value of the portfolio securities owned
by the Fund during the particular fiscal year. In calculating the rate of
portfolio turnover, there is excluded from both (a) and (b) all securities,
including options, whose maturities or expiration dates at the time of
acquisition were one year or less.

Other Investment Companies

     The Fund may invest up to 10% of its net assets in securities of open- or
closed-end investment companies that invest primarily in Municipal Bonds of the
types in which the Fund may invest directly. The Fund may invest in other
investment companies either during periods when it has large amounts of
uninvested cash, such as the period shortly after the Fund receives the proceeds
of the offering of its Common Shares or Preferred Shares, during periods when
there is a shortage of attractive, high-yielding Municipal Bonds available in
the market, or when

                                       25

<PAGE>

PIMCO believes share prices of other investment companies offer attractive
values. The Fund may invest in investment companies that are advised by PIMCO or
its affiliates to the extent permitted by applicable law and/or pursuant to
exemptive relief from the SEC. As a stockholder in an investment company, the
Fund will bear its ratable share of that investment company's expenses and would
remain subject to payment of the Fund's management fees with respect to assets
so invested. Holders of Common Shares ("Common Shareholders") would therefore be
subject to duplicative expenses to the extent the Fund invests in other
investment companies. PIMCO will take expenses into account when evaluating the
investment merits of an investment in an investment company relative to
available Municipal Bond investments. In addition, the securities of other
investment companies may also be leveraged and will therefore be subject to the
same leverage risks described in the Prospectus and herein. As described in the
Fund's Prospectus in the section entitled "Risks--Leverage Risk," the net asset
value and market value of leveraged shares will be more volatile and the yield
to shareholders will tend to fluctuate more than the yield generated by
unleveraged shares.

When-Issued, Delayed Delivery and Forward Commitment Transactions

     The Fund may purchase or sell securities on a when-issued, delayed
delivery, or forward commitment basis. Typically, no income accrues on
securities the Fund has committed to purchase prior to the time delivery of the
securities is made, although the Fund may earn income on securities it has
segregated.

     When purchasing a security on a when-issued, delayed delivery, or forward
commitment basis, the Fund assumes the rights and risks of ownership of the
security, including the risk of price and yield fluctuations, and takes such
fluctuations into account when determining its net asset value. Because the Fund
is not required to pay for the security until the delivery date, these risks are
in addition to the risks associated with the Fund's other investments. If the
Fund remains substantially fully invested at a time when when-issued, delayed
delivery, or forward commitment purchases are outstanding, the purchases may
result in a form of leverage.

     When the Fund has sold a security on a when-issued, delayed delivery, or
forward commitment basis, the Fund does not participate in future gains or
losses with respect to the security. If the other party to a transaction fails
to deliver or pay for the securities, the Fund could miss a favorable price or
yield opportunity or could suffer a loss. The Fund may dispose of or renegotiate
a transaction after it is entered into, and may sell when-issued, delayed
delivery or forward commitment securities before they are delivered, which may
result in a capital gain or loss. There is no percentage limitation on the
extent to which the Fund may purchase or sell securities on a when-issued,
delayed delivery, or forward commitment basis.

Zero-Coupon Bonds and Step-Ups

     Zero-coupon securities are debt obligations that do not entitle the holder
to any periodic payments of interest either for the entire life of the
obligation or for an initial period after the issuance of the obligations. Like
zero-coupon bonds, "step-up" bonds pay no interest initially but eventually
begin to pay a coupon rate prior to maturity, which rate may increase at stated
intervals during the life of the security. Each of these instruments is
typically issued and traded at a deep discount from its face amount. The amount
of the discount varies depending on such

                                       26

<PAGE>

factors as the time remaining until maturity of the securities, prevailing
interest rates, the liquidity of the security and the perceived credit quality
of the issuer. The market prices of zero-coupon bonds and step-ups generally are
more volatile than the market prices of debt instruments that pay interest
currently and in cash and are likely to respond to changes in interest rates to
a greater degree than do other types of securities having similar maturities and
credit quality. In order to satisfy a requirement for qualification as a
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"), an investment company, such as the Fund, must distribute
each year at least 90% of its net investment income, including the original
issue discount accrued on zero-coupon bonds and step-ups. Because the Fund will
not on a current basis receive cash payments from the issuer of these securities
in respect of any accrued original issue discount, in some years the Fund may
have to distribute cash obtained from selling other portfolio holdings of the
Fund. In some circumstances, such sales might be necessary in order to satisfy
cash distribution requirements even though investment considerations might
otherwise make it undesirable for the Fund to sell securities at such time.
Under many market conditions, investments in zero-coupon bonds and step-ups may
be illiquid, making it difficult for the Fund to dispose of them or determine
their current value.

                             INVESTMENT RESTRICTIONS

Fundamental Investment Restrictions

     Except as described below, the Fund, as a fundamental policy, may not,
without the approval of the holders of a majority of the outstanding Common
Shares and, if issued, Preferred Shares voting together as a single class, and
of the holders of a majority of the outstanding Preferred Shares voting as a
separate class:

          (1) Concentrate its investments in a particular "industry," as that
     term is used in the Investment Company Act of 1940, as amended, and as
     interpreted, modified, or otherwise permitted by regulatory authority
     having jurisdiction, from time to time.

          (2) Purchase or sell real estate, although it may purchase securities
     (including Municipal Bonds) secured by real estate or interests therein, or
     securities issued by companies which invest in real estate, or interests
     therein.

          (3) Purchase or sell commodities or commodities contracts or oil, gas
     or mineral programs. This restriction shall not prohibit the Fund, subject
     to restrictions described in the Prospectus and elsewhere in this Statement
     of Additional Information, from purchasing, selling or entering into
     futures contracts, options on futures contracts, forward contracts, or any
     interest rate, securities-related or other hedging instrument, including
     swap agreements and other derivative instruments, subject to compliance
     with any applicable provisions of the federal securities or commodities
     laws.

          (4) Borrow money or issue any senior security, except to the extent
     permitted under the Investment Company Act of 1940, as amended, and as
     interpreted, modified, or otherwise permitted by regulatory authority
     having jurisdiction, from time to time.

                                       27

<PAGE>

          (5) Make loans, except to the extent permitted under the Investment
     Company Act of 1940, as amended, and as interpreted, modified, or otherwise
     permitted by regulatory authority having jurisdiction, from time to time.

          (6) Act as an underwriter of securities of other issuers, except to
     the extent that in connection with the disposition of portfolio securities,
     it may be deemed to be an underwriter under the federal securities laws.


     In addition, as a fundamental policy the Fund must, under normal
circumstances, invest at least 80% of its Assets (as that term is defined in
Rule 35d-1 under the Investment Company Act of 1940, as amended) measured at the
time of investment, in investments the income from which is, in the opinion of
bond counsel to the issuer (or on the basis of other authority believed by the
Fund's portfolio manager to be reliable), exempt from federal and New York state
income taxes. For purposes of this policy, the Fund may count investments that
generate income subject to the alternative minimum tax toward the 80% investment
requirement.


     For purposes of the foregoing and "Description of Shares--Preferred
Shares--Voting Rights" below, "majority of the outstanding," when used with
respect to particular shares of the Fund (whether voting together as a single
class or voting as separate classes), means (i) 67% or more of such shares
present at a meeting, if the holders of more than 50% of such shares are present
or represented by proxy, or (ii) more than 50% of such shares, whichever is
less.

     Unless otherwise indicated, all limitations applicable to the Fund's
investments (as stated above and elsewhere in this Statement of Additional
Information) apply only at the time a transaction is entered into. Any
subsequent change in a rating assigned by any rating service to a security (or,
if unrated, deemed by PIMCO to be of comparable quality), or change in the
percentage of the Fund's total assets invested in certain securities or other
instruments, or change in the average maturity or duration of the Fund's
investment portfolio, resulting from market fluctuations or other changes in the
Fund's total assets, will not require the Fund to dispose of an investment until
PIMCO determines that it is practicable to sell or close out the investment
without undue market or tax consequences to the Fund. In the event that rating
agencies assign different ratings to the same security, PIMCO will determine
which rating it believes best reflects the security's quality and risk at that
time, which may be the higher of the several assigned ratings.

     Under the 1940 Act, a "senior security" does not include any promissory
note or evidence of indebtedness where such loan is for temporary purposes only
and in an amount not exceeding 5% of the value of the total assets of the issuer
at the time the loan is made. A loan is presumed to be for temporary purposes if
it is repaid within sixty days and is not extended or renewed.


     The Fund would be deemed to "concentrate" in a particular industry if it
invested 25% or more of its net assets in that industry. The Fund's industry
concentration policy does not preclude it from focusing investments in issuers
in a group of related industrial sectors (such as different types of utilities).


     To the extent the Fund covers its commitment under a derivative instrument
by the segregation of assets determined by PIMCO to be liquid in accordance with
procedures adopted by the Trustees, equal in value to the amount of the Fund's
commitment, such instrument will

                                       28

<PAGE>

not be considered a "senior security" for purposes of the asset coverage
requirements otherwise applicable to borrowings by the Fund or the Fund's
issuance of Preferred Shares.

     The Fund interprets its policies with respect to borrowing and lending to
permit such activities as may be lawful for the Fund, to the full extent
permitted by the 1940 Act or by exemption from the provisions therefrom pursuant
to exemptive order of the SEC.

     The Fund intends to apply for ratings for its Preferred Shares from
Moody's, S&P and/or Fitch. In order to obtain and maintain the required ratings,
the Fund may be required to comply with investment quality, diversification and
other guidelines established by Moody's, S&P and/or Fitch. Such guidelines will
likely be more restrictive than the restrictions set forth above. The Fund does
not anticipate that such guidelines would have a material adverse effect on
Common Shareholders or its ability to achieve its investment objective. The Fund
presently anticipates that any Preferred Shares that it intends to issue would
be initially given the highest ratings by Moody's ("Aaa"), S&P ("AAA") and/or
Fitch ("AAA"), but no assurance can be given that such ratings will be obtained.
No minimum rating is required for the issuance of Preferred Shares by the Fund.
Moody's, S&P and Fitch receive fees in connection with their ratings issuances.

                             MANAGEMENT OF THE FUND

Trustees and Officers

     The business of the Fund is managed under the direction of the Fund's Board
of Trustees. Subject to the provisions of the Fund's Amended and Restated
Agreement and Declaration of Trust (the "Declaration"), its Bylaws and
Massachusetts law, the Trustees have all powers necessary and convenient to
carry out this responsibility, including the election and removal of the Fund's
officers.

     The Trustees and officers of the Fund, their ages, the position they hold
with the Fund, their term of office and length of time served, a description of
their principal occupations during the past five years, the number of portfolios
in the fund complex that the Trustee oversees and any other directorships held
by the Trustee are listed in the two tables immediately following. Except as
shown, each Trustee's and officer's principal occupation and business experience
for the last five years has been with the employer(s) indicated, although in
some cases the Trustee may have held different positions with such employer(s).
Unless otherwise indicated, the business address of the persons listed below is
c/o PIMCO Funds Advisors LLC, 1345 Avenue of the Americas, New York, New York
10105.

                                       29

<PAGE>


                              Independent Trustees*
                              --------------------




<TABLE>
<CAPTION>
     (1)                    (2)           (3)                (4)                 (5)            (6)
                                                                             Number of
                                        Term of                              Portfolios
                                      Office and                              in Fund          Other
                        Position(s)    Length of                              Complex      Directorships
 Name, Address             Held          Time      Principal Occupation(s)   Overseen by      Held by
    and Age              with Fund      Served     During the Past 5 Years     Trustee        Trustee
 <S>                    <C>           <C>          <C>                       <C>           <C>
Paul Belica             Trustee       Since        Trustee, Fixed                 8        None.
Age 80                                inception    Income SHares, PIMCO
                                       (June,      Corporate Income
                                        2002).     Fund, PIMCO
                                                   Municipal Income
                                                   Fund, PIMCO
                                                   California Municipal
                                                   Income Fund and
                                                   PIMCO New York
                                                   Municipal Income
                                                   Fund; Manager,
                                                   Stratigos Fund, LLC,
                                                   Whistler Fund, LLC,
                                                   Xanthus Fund, LLC
                                                   and Wynstone Fund,
                                                   LLC; Director,
                                                   Student Loan Finance
                                                   Corp., Education
                                                   Loans, Inc., Goal
                                                   Funding, Inc., Surety
                                                   Loan Funding, Inc.
                                                   Formerly, Advisor,
                                                   Salomon Smith
                                                   Barney Inc.; Director,
                                                   Central European Value
                                                   Fund, Inc., Deck House
                                                   Inc., The Czech
                                                   Republic Fund, Inc.

Robert E.Connor         Trustee       Since        Trustee, Fixed Income          9        None.
Age 68                                inception    SHares, PIMCO Corporate
                                      (June,       Income Fund, PIMCO
                                      2002).       Municipal Income Fund,
                                                   PIMCO California
                                                   Municipal Income Fund
                                                   and PIMCO New York
                                                   Municipal Income Fund;
                                                   Director, Municipal
                                                   Advantage Fund, Inc.;
                                                   Corporate Affairs
                                                   Consultant. Formerly,
                                                   Senior Vice President,
                                                   Corporate Office,
                                                   Salomon Smith Barney
                                                   Inc.

Hans W. Kertess         Trustee       Since         Consultant                    7        None.
Age 62                                inception     Dain Rauscher
                                      (June,        Inc., Trustee, PIMCO
                                      2002).        Corporate Income
                                                    Fund, PIMCO
                                                    Municipal Income
                                                    Fund, PIMCO
                                                    California Municipal
                                                    Income Fund and
                                                    PIMCO New York
                                                    Municipal Income
                                                    Fund. Formerly,
                                                    Managing Director,
                                                    Salomon Brothers;
                                                    Managing Director,
                                                    Dain Rauscher Inc.
</TABLE>


                                       30

<PAGE>


<TABLE>
<CAPTION>
     (1)                    (2)           (3)                (4)                 (5)            (6)
                                                                             Number of
                                        Term of                              Portfolios
                                      Office and                              in Fund          Other
                        Position(s)    Length of                              Complex      Directorships
 Name, Address             Held          Time      Principal Occupation(s)   Overseen by      Held by
    and Age              with Fund      Served     During the Past 5 Years     Trustee        Trustee
<S>                     <C>           <C>          <C>                       <C>           <C>
R. Peter Sullivan III   Trustee       Since        Trustee, PIMCO                 7        None.
Age 60                                inception    Corporate Income Fund,
                                      (June,       PIMCO Municipal
                                      2002)        Income Fund, PIMCO
                                                   California Municipal
                                                   Income Fund and PIMCO
                                                   New York Municipal
                                                   Income Fund. Formerly,
                                                   Managing Partner,
                                                   Bear Wagner Specialists LLC.

</TABLE>



                              Interested Trustees**
                              -------------------



<TABLE>
<CAPTION>
         (1)                (2)            (3)                (4)                 (5)             (6)

                                                                               Number of
                                        Term of                                Portfolios
                                      Office and                                in Fund          Other
                        Position(s)    Length of                                Complex      Directorships
    Name, Address           Held      Time Served   Principal Occupation(s)   Overseen by   Held by Trustee
       and Age           with Fund                  During the Past 5 Years     Trustee
<S>                     <C>           <C>           <C>                       <C>           <C>
</TABLE>


                                       31

<PAGE>


<TABLE>
<CAPTION>
         (1)                (2)            (3)                (4)                 (5)             (6)

                                                                               Number of
                                        Term of                                Portfolios
                                      Office and                                in Fund          Other
                        Position(s)    Length of                                Complex      Directorships
    Name, Address           Held      Time Served   Principal Occupation(s)   Overseen by   Held by Trustee
       and Age           with Fund                  During the Past 5 Years     Trustee
<S>                     <C>           <C>           <C>                       <C>           <C>

John J.Dalessandro II   Trustee       Since         President and              7             None.
                                      inception     Director, J.J.
Age 65                                (June,        Dalessandro II Ltd.,
                                      2002).        registered
                                                    broker-dealer and
                                                    member of the New
                                                    York Stock Exchange;
                                                    Trustee, PIMCO
                                                    funds] Corporate
                                                    Income Fund, PIMCO
                                                    Municipal Income
                                                    Fund, PIMCO
                                                    California Municipal
                                                    Income Fund and
                                                    PIMCO New York
                                                    Municipal Income
                                                    Fund.
</TABLE>


- ----------

      * Mr. Kertess retired from Dain Rauscher Inc. (a broker-dealer that has
within the last 6 months executed portfolio transactions for the PIMCO Funds)
effective January 1, 2002. He currently serves as a consultant and independent
contractor to Dain Rauscher Inc. and is no longer treated as an "interested
person" of the Fund as a result of his position with Dain Rauscher Inc. However,
Mr. Kertess owns shares of Royal Bank of Canada, the ultimate parent company of
Dain Rauscher Inc., one of the underwriters of the Fund's Common Share offering.
Mr. Kertess will be deemed to be an "interested person" of the Fund through his
ownership of shares of Royal Bank of Canada until such time as Dain Rauscher
Inc., as applicable, ceases to be a "principal underwriter" (as defined in the
1940 Act) of the Fund. Mr. Sullivan owns shares of Merrill Lynch and Morgan
Stanley, two of the underwriters of the Fund's Common Share offering, and of
Citigroup Inc., a company which may control Salomon Smith Barney Inc., one of
the underwriters of the Fund's Common Share offering. Mr. Sullivan will be
deemed to be an "interested person" of the Fund through his ownership of shares
of Merrill Lynch, Morgan Stanley and Citigroup Inc. until such time as Merrill
Lynch, Morgan Stanley and Citigroup, Inc. each cease to be a "principal
underwriter" (as defined in the 1940 Act) of the Fund.

     ** These Trustees are treated by the Fund as "interested persons" (as
defined in Section 2(a)(19) of the 1940 Act) of the Fund, the Manager, PIMCO or
one or more of the Underwriters. Mr. Dalessandro is treated as an "interested
person" because of his affiliation with J.J. Dalessandro II Ltd. The Fund does
not, however, concede that Mr. Dalessandro is in fact an "interested person"
because it is not clear whether his firm has executed portfolio transactions for
the PIMCO Funds.


     In accordance with the Fund's staggered board (see "Anti-Takeover and Other
Provisions in the Declaration of Trust"), the Common Shareholders of the Fund
will elect Trustees to fill the vacancies of Trustees whose terms expire at each
annual meeting of Common Shareholders, unless any Preferred Shares are
outstanding, in which event Preferred Shareholders, voting as a separate class,
will elect two Trustees and the remaining Trustee shall be elected by Common
Shareholders and Preferred Shareholders, voting together as a single class.
Preferred Shareholders will be entitled to elect a majority of the Fund's
Trustees under certain circumstances.

                                       32

<PAGE>

                                    Officers
                                    --------


<TABLE>
<CAPTION>
         (1)                (2)            (3)                  (4)                 (5)                (6)

                                                                                 Number of
                                         Term of                                Portfolios
                                       Office and                                in Fund           Other
                        Position(s)     Length of                                 Complex       Directorships
    Name, Address           Held          Time        Principal Occupation(s)   Overseen by    Held by Trustee
       and Age           with Fund       Served       During the Past 5 Years     Trustee
<S>                     <C>            <C>            <C>                       <C>            <C>
Stephen J. Treadway     President     Since           Managing Director,            N/A             N/A
2187 Atlantic Street                  inception       Allianz Dresdner Asset
Stamford, CT 06902                    (June,          Management of America
Age 54                                2002).          L.P.; Managing Director
                                                      and Chief Executive
                                                      Officer, PIMCO Funds
                                                      Advisors LLC; Managing
                                                      Director and Chief
                                                      Executive Officer, PIMCO
                                                      Funds Distributors LLC
                                                      ("PFD"); Trustee,
                                                      President and Chief
                                                      Executive Officer, PIMCO
                                                      Funds: Multi-Manager
                                                      Series; Chairman, Fixed
                                                      Income SHares; Trustee,
                                                      Chairman and President,
                                                      OCC Cash Reserves, Inc.,
                                                      OCC Accumulation Trust,
                                                      PIMCO Corporate Income
                                                      Fund, PIMCO Municipal
                                                      Income Fund, PIMCO
                                                      California Municipal
                                                      Income Fund and PIMCO
                                                      New York Municipal
                                                      Income Fund; Chairman
                                                      and Trustee, Municipal
                                                      Advantage Fund, Inc.;
                                                      President, The Emerging
                                                      Markets Income Fund,
                                                      Inc., The Emerging
                                                      Markets Income Fund II,
                                                      Inc., The Emerging
                                                      Markets Floating Rate
                                                      Fund, Inc., Global
                                                      Partners Income Fund,
                                                      Inc., Municipal Partners
                                                      Fund, Inc. and Municipal
                                                      Partners Fund II, Inc.
                                                      Formerly, Executive Vice
                                                      President, Smith Barney
                                                      Inc.

Newton B. Schott, Jr.   Vice           Since          Managing                  N/A            N/A
2187 Atlantic Street    President,     inception      Director,Chief
Stamford, CT  06902     Secretary      (June,         Administrative
Age 59                                 2002).         Officer, Secretary
                                                      and General Counsel,
                                                      PFD; Managing
                                                      Dirrector, Chief
                                                      Legal Officer and
                                                      Secretary, PIMCO
                                                      Funds Advisors LLC;
                                                      President, Municipal
                                                      Advantage Fund,
                                                      Inc.; Vice President
                                                      and Secretary, PIMCO
                                                      Funds: Multi-Manager
                                                      Series, PIMCO
                                                      Corporate Income
                                                      Fund, PIMCO Municipa
                                                      Income Fund, PIMCO
                                                      California Municipal
                                                      Income Fund, PIMCO
                                                      New York Municipal
                                                      Income Fund;
                                                      Executive Vice
                                                      President, The
                                                      Emerging Markets
                                                      Income Fund, Inc.,
                                                      The Emerging Markets
                                                      Income Fund II,
                                                      Inc., The Emerging
                                                      Markets Floating
                                                      Rate Fund, Inc.,
                                                      Global Partners
                                                      Income Fund Inc.,
                                                      Municipal Partners
                                                      Fund, Inc. and
                                                      Municipal Partners
                                                      Fund II, Inc.;
                                                      Secretary, Fixed
                                                      Income SHares.
                                                      Formerly, Vice
                                                      President and Clerk,
                                                      PIMCO Advisors Funds.

Brian S. Shlissel       Treasurer;     Since          Senior Vice               N/A            N/A
Age 37                  Principal      inception      President, PIMCO
                        Financial      (June,         Funds Advisors LLC;
                        and            2002).         Executive Vice
                        Accounting                    President and
                        Officer                       Treasurer, OCC Cash
                                                      Reserves, Inc. and OCC
                                                      Accumulation Trust;
                                                      President, Chief
                                                      Executive Officer and
                                                      Treasurer, Fixed
                                                      Income SHares;
                                                      Treasurer, Municipal
                                                      Advantage Fund Inc.;
                                                      Treasurer and
                                                      Principal Financial
                                                      and Accounting
                                                      Officer, PIMCO
                                                      Corporate Income Fund,
                                                      PIMCO Municipal Income
                                                      Fund, PIMCO California
                                                      Municipal Income Fund
                                                      and PIMCO New York
                                                      Municipal Income Fund;
</TABLE>



                                       33

<PAGE>


<TABLE>
<CAPTION>
         (1)                (2)            (3)                   (4)                (5)             (6)
                                                                                 Number of
                                         Term of                                Portfolios
                                       Office and                                in Fund           Other
                        Position(s)     Length of                                 Complex       Directorships
    Name, Address           Held          Time        Principal Occupation(s)   Overseen by    Held by Trustee
       and Age           with Fund       Served       During the Past 5 Years     Trustee
<S>                     <C>            <C>            <C>                       <C>            <C>
                                                      Vice President,
                                                      Emerging Markets
                                                      Income Fund, Inc.,
                                                      Emerging Markets
                                                      Income Fund II, Inc.,
                                                      Emerging Markets
                                                      Floating Rate Fund,
                                                      Inc., Global Partners
                                                      Income Fund, Inc.,
                                                      Municipal Partners
                                                      Fund, Inc., and
                                                      Municipal Partners
                                                      Fund II, Inc.
                                                      Formerly, Vice
                                                      President, Mitchell
                                                      Hutchins Asset
                                                      Management Inc.

Mark V. McCray          Vice           Since          Executive Vice            N/A            N/A
840 Newport Center      President      inception      President, PIMCO;
Drive Newport Beach,                   (June,         Vice President,
CA  92660                              2002).         PIMCO Municipal
Age 34                                                Income Fund,
                                                      PIMCO California
                                                      Municipal Income
                                                      Fund and PIMCO New
                                                      York Municipal
                                                      Income Fund.
                                                      Formerly, Vice
                                                      President and
                                                      co-head of municipal
                                                      bond trading,
                                                      Goldman Sachs & Co.

Michael B. Zuckerman    Assistant      Since          Vice President,           N/A            N/A
Age 36                  Secretary      inception      PIMCO Funds
                                       (June,         Advisors LLC;
                                       2002).         Secretary, Municipal
                                                      Advantage Fund,
                                                      Inc., OCC
                                                      Accumulation Trust
                                                      and OCC Cash
                                                      Reserves, Inc.;
                                                      Assistant Secretary,
                                                      Fixed Income SHares,
                                                      PIMCO Corporate
                                                      Income Fund, PIMCO
                                                      Municipal Income
                                                      Fund, PIMCO
                                                      California Municipal
                                                      Income Fund and
                                                      PIMCO New York
                                                      Municipal Income
                                                      Fund. Formerly,
                                                      Associate, Dechert
                                                      Price and Rhoads;
                                                      Associate Counsel,
                                                      Metropolitan Life
                                                      Insurance Company.

</TABLE>


     For interested Trustees and officers, positions held with affiliated
persons or principal underwriters of the Fund are listed in the following table:


<TABLE>
<CAPTION>
         (1)                                                  (2)

         Name            Positions Held with Affiliated Persons or Principal Underwriters of the Fund
<S>                                                     <C>
John J. Dalessandro II                                  See above.

Newton B. Schott, Jr.                                   See above.

Brian S. Shlissel                                       See above.

Mark V. McCray                                          See above.

</TABLE>


                                       34

<PAGE>


Michael B. Zuckerman                                    See above.


Committees of the Board of Trustees

     Audit Oversight Committee
     -------------------------

     Provides oversight with respect to the internal and external accounting and
auditing procedures of the Fund and, among other things, considers the selection
of independent public accountants for the Fund and the scope of the audit,
approves all significant services proposed to be performed by those accountants
on behalf of the Fund, and considers other services provided by those
accountants to the Fund, the Manager and PIMCO and the possible effect of those
services on the independence of those accountants. Messrs. Belica, Connor,
Kertess and Sullivan serve on this committee.

     Nominating Committee
     --------------------

     Responsible for reviewing and recommending qualified candidates to the
Board in the event that a position is vacated or created. Messrs. Belica,
Connor, Kertess and Sullivan serve on this committee. The Nominating Committee
will review and consider nominees recommended by shareholders to serve as
Trustee, provided any such recommendation is submitted in writing to the Fund,
c/o Newton B. Schott, Jr., Secretary, at the address of the principal executive
offices of the Fund. The Nominating Committee has full discretion to reject
nominees recommended by the shareholders, and there is no assurance that any
such person so recommended and considered by a committee will be nominated for
election to the Board.


     Valuation Committee
     -------------------


     Reviews procedures for the valuation of securities and periodically reviews
information from the Manager and PIMCO regarding fair value and liquidity
determination made pursuant to the Board-approved procedures, and makes related
recommendations to the full Board and assists the full Board in resolving
particular valuation matters. Messrs. Belica, Connor and Sullivan serve on this
committee.



Securities Ownership

     For each Trustee, the following table discloses the dollar range of equity
securities beneficially owned by the Trustee in the Fund and, on an aggregate
basis, in any registered investment companies overseen by the Trustee within the
Fund's family of investment companies as of December 31, 2001:

         (1)                    (2)                       (3)

                                             Aggregate Dollar Range of Equity
                                              Securities in All Registered
                          Dollar Range of    Investment Companies Overseen by
                         Equity Securities       Trustee in Family of
    Name of Trustee         in the Fund          Investment Companies

Hans W. Kertess                None.                      None.


                                       35


<PAGE>

John J. Dalessandro II         None.                   None.

Paul Belica                    None.                   (greater than) $100,000

Robert E. Connor               None.                   None.

R. Peter Sullivan III          None.                   None.

     For independent Trustees and their immediate family members, the following
table provides information regarding each class of securities owned beneficially
in an investment adviser or principal underwriter of the Fund, or a person
(other than a registered investment company) directly or indirectly controlling,
controlled by, or under common control with an investment adviser or principal
underwriter of the Fund as of December 31, 2001:


<TABLE>
<CAPTION>
          (1)                (2)        (3)                (4)             (5)            (6)

                           Name of
                         Owners and
                        Relationships                                   Value of
    Name of Trustee      to Trustee   Company         Title of Class   Securities   Percent of Class
<S>                     <C>           <C>             <C>              <C>          <C>
Paul Belica             None

Robert E. Connor        None

Hans W. Kertess*        Self          Royal Bank       Common Stock   $ 30,000       (less than) 1%
                                       of Canada

R. Peter Sullivan III*  Self          Citigroup, Inc.  Common Stock   $ 56,790       (less than) 1%
                                      Merrill Lynch    Common Stock   $ 50,817       (less than) 1%
                                      Morgan Stanley   Common Stock   $111,880       (less than) 1%
</TABLE>


     * Mr. Kertess owns shares of Royal Bank of Canada, the ultimate parent
company of Dain Rauscher Inc., one of the underwriters of the Fund's Common
Share offering. Mr. Kertess will be deemed to be an "interested person" of the
Fund through his ownership of shares of Royal Bank of Canada until such time as
Dain Rauscher Inc., as applicable, ceases to be a "principal underwriter" (as
defined in the 1940 Act) of the Fund. Mr. Sullivan owns shares of Merrill Lynch
and Morgan Stanley, two of the underwriters of the Fund's Common Share offering,
and of Citigroup Inc., a company which may control Salomon Smith Barney Inc.,
one of the underwriters of the Fund's Common Share offering. Mr. Sullivan will
be deemed to be an "interested person" of the Fund through his ownership of
shares of Merrill Lynch, Morgan Stanley and Citigroup Inc. until such time as
Merrill Lynch, Morgan Stanley and Citigroup, Inc. each cease to be a "principal
underwiter" (as defined in the 1940 Act) of the Fund.


     As of June 19, 2002, the Fund's officers and Trustees as a group owned
less than 1% of the outstanding Common Shares.

     As of June 19, 2002, the following persons owned of record the number
of Common Shares noted below, representing the indicated percentage of the
Fund's outstanding shares as of such date.

                                              Percentage of the Fund's
                                                 outstanding shares
                                Number of     as of June 19, 2002
                              Common Shares                  ----
                                     ------

Shareholder
- -----------

PIMCO Funds Advisors LLC           6,981               100%
1345 Avenue of the Americas
New York, New York  10105

* means less than

                                       36

<PAGE>

Compensation


     Messrs. Belica, Connor, Dalessandro, Kertess and Sullivan also serve as
Trustees of PIMCO California Municipal Income Fund, PIMCO New York Municipal
Income Fund, PIMCO Municipal Income Fund, PIMCO California Municipal Income Fund
II and PIMCO Municipal Income Fund II (together with the Fund, the "Municipal
Funds") and PIMCO Corporate Income Fund, six closed-end funds for which the
Manager serves as investment manager and PIMCO serves as portfolio manager. In
addition to the Municipal Funds and PIMCO Corporate Income Fund, Mr. Belica is a
director or trustee, as the case may be, of one open-end investment company
(comprising two separate investment portfolios) advised by the Manager; and Mr.
Connor is a director or trustee, as the case may be, of one open-end investment
company (comprising two separate investment portfolios) and one closed-end
investment company advised by the Manager. To the best of the Fund's knowledge,
none of the "independent" Trustees has ever been a director, officer, or
employee of, or a consultant to, the Manager, PIMCO, any one or more of the
Underwriters or any one or more affiliates of any of the foregoing, except that
Mr. Connor provides occasional editorial consulting services as an independent
contractor to an administrative unit of Salomon Smith Barney Inc. As indicated
above, certain of the officers and Trustees of the Fund are affiliated with the
Manager and/or PIMCO.

     The Municipal Funds and PIMCO Corporate Income Fund (together, the "PIMCO
Closed-End Funds") are expected to hold joint meetings of their Boards of
Trustees whenever possible. Each Trustee, other than any Trustee who is a
director, officer, partner or employee of the Manager, PIMCO or any entity
controlling, controlled by or under common control with the Manager or PIMCO,
receives $14,000 for each joint meeting for the first four joint meetings in
each year and $7,000 for each additional joint meeting in such year if the
meetings are attended in person. Trustees receive $3,500 per joint meeting if
the meetings are attended telephonically. Members of the Audit Oversight
Committee will receive $3,500 per joint meeting of the PIMCO Closed-End Funds'
Audit Oversight Committees if the meeting takes place on a day other than the
day of a regularly scheduled Board meeting. Trustees will also be reimbursed for
meeting-related expenses.


     The PIMCO Closed-End Funds will allocate the Trustees' compensation and
other costs of their joint meetings pro rata based on each PIMCO Closed-End
Fund's net assets, including assets attributable to any preferred shares.

     It is estimated that the Trustees will receive the amounts set forth in the
following table from the Fund for its initial fiscal year ending March 31, 2003.
For the calendar year ended December 31, 2001, the Trustees received the
compensation set forth in the following table for serving as trustees of other
funds in the "Fund Complex." Each officer and Trustee who is a director,
officer, partner or employee of the Manager, PIMCO or any entity controlling,
controlled by or under common control with the Manager or PIMCO serves without
any compensation from the Fund.

                                       37

<PAGE>


<TABLE>
<CAPTION>
          (1)                          (2)                                  (3)


                            Aggregate Compensation from   Total Compensation from Fund and Fund
                             Fund for the Fiscal Year     Complex Paid to Trustees for the Calendar
 Name of Person, Position     Ending March 31, 2003*          Year Ending December 31, 2001**
<S>                                     <C>                                 <C>
Paul Belica                          $10,000                                  $26,000

Robert E. Connor                     $10,000                                  $36,500

Hans W. Kertess                      $10,000                                  $ 6,000

John J. Dalessandro II               $10,000                                  $13,500

R. Peter Sullivan III                $10,000                                  $     0
</TABLE>

- ----------
     * Since the Fund has not completed its first full fiscal year, compensation
is estimated based upon future payments to be made by the Fund during the
current fiscal year and upon estimated relative net assets of the PIMCO
Closed-End Funds. The estimate is for the fiscal year ending March 31, 2003.

     ** In addition to the PIMCO Closed-End Funds, during the year ended
December 31, 2001, Mr. Belica served as a Trustee of one open-end investment
company (comprising two separate investment portfolios) advised by the Manager,
and Mr. Connor served as a director or Trustee of one open-end investment
company (comprising two separate investment portfolios) and one closed-end
investment company advised by the Manager. These investment companies are
considered to be in the same "Fund Complex" as the Fund.

     The Fund has no employees. Its officers are compensated by the Manager
and/or PIMCO.

Codes of Ethics

     The Fund, the Manager and PIMCO have each adopted a separate code of ethics
governing personal trading activities of, as applicable, all Trustees and
officers of the Fund, and directors, officers and employees of the Manager and
PIMCO, who, in connection with their regular functions, play a role in the
recommendation of any purchase or sale of a security by the Fund or obtain
information pertaining to such purchase or sale or who have the power to
influence the management or policies of the Fund, the Manager or PIMCO, as
applicable. Such persons are prohibited from effecting certain transactions,
allowed to effect certain exempt transactions (including with respect to
securities that may be purchased or held by the Fund), and are required to
preclear certain security transactions with the applicable compliance officer or
his designee and to report certain transactions on a regular basis. The Fund,
the Manager and PIMCO have each developed procedures for administration of their
respective codes. Text-only versions of the codes of ethics can be viewed online
or downloaded from the EDGAR Database on the SEC's internet web site at
www.sec.gov. You may also review and copy those documents by visiting the SEC's
Public Reference Room in Washington, DC. Information on the operation of the
Public Reference Room may be obtained by calling the SEC at 202-942-8090. In
addition, copies of the codes of ethics may be obtained, after mailing the
appropriate duplicating fee, by writing to the SEC's Public Reference Section,
450 5th Street, N.W., Washington, DC 20549-0102 or by e-mail request at
publicinfo@sec.gov.
- ------------------

                                       38

<PAGE>

                    INVESTMENT MANAGER AND PORTFOLIO MANAGER

Investment Manager


     The Manager serves as investment manager to the Fund pursuant to an
investment management agreement (the "Investment Management Agreement") between
it and the Fund. The Manager, a Delaware limited liability company organized in
2000, is wholly-owned by PIMCO Advisory Services Holdings LLC, a wholly-owned
subsidiary of Allianz Dresdner Asset Management of America L.P. ("ADAM of
America", formerly PIMCO Advisors, L.P.). ADAM of America was organized as a
limited partnership under Delaware law in 1987. ADAM of America's sole general
partner is Allianz Paclife Partners LLC. Allianz Paclife Partners LLC is a
Delaware limited liability company with two members, ADAM U.S. Holding LLC, a
Delaware limited liability company, and Pacific Asset Management LLC, a Delaware
limited liability company. ADAM U.S. Holdings LLC is a wholly-owned subsidiary
of Allianz Dresdner Asset Management of America LLC, a wholly-owned subsidiary
of Allianz of America, Inc., which is a wholly-owned subsidiary of Allianz AG.
Pacific Asset Management LLC is a wholly-owned subsidiary of Pacific Life
Insurance Company ("Pacific Life"), which is a wholly-owned subsidiary of
Pacific Mutual Holding Company. Pacific Mutual Holding Company is a Newport
Beach, California-based insurance holding company. Pacific Life Insurance
Company's address is 700 Newport Center Drive, Newport Beach, California.


     The general partner of ADAM of America has substantially delegated its
management and control of ADAM of America to an Executive Committee. The
Executive Committee of ADAM of America is comprised of Udo Frank, William S.
Thompson, Jr. and Marcus Riess.


     The Manager is located at 1345 Avenue of the Americas, New York, New York
10105. As of December 31, 2001, the Manager had approximately $80 billion in
assets under management. As of March 31, 2002, ADAM of America and its
subsidiary partnerships had approximately $336 billion in assets under
management.


     Allianz of America has entered into a put/call arrangement for the possible
disposition of Pacific Life's indirect interest in the Manager. The put option
held by Pacific Life will allow it to require Allianz of America, on the last
business day of each calendar quarter following May 5, 2000, to purchase at a
formula-based price all units of the Manager owned directly or indirectly by
Pacific Life. The call option held by Allianz of America will allow it,
beginning January 31, 2003 or upon a change in control of Pacific Life, to
require Pacific Life to sell or cause to be sold to Allianz of America, at the
same formula-based price, all units of the Manager owned directly or indirectly
by Pacific Life.

     As of the date of this Statement of Additional Information, significant
institutional shareholders of Allianz AG currently include Munchener
Ruckversicherungs-Gesellschaft AG ("Munich Re") and HypoVereinsbank. Allianz AG
in turn owns more than 95% of Dresdner Bank AG. Credit Lyonnais, Munich Re and
HypoVereinsbank, as well as certain broker-dealers that might be controlled by
or affiliated with these entities or Dresdner Bank AG, such as DB Alex. Brown
LLC and Dresdner Klienwort Benson North America LLC (collectively, the

                                       39

<PAGE>

"Affiliated Brokers"), may be considered to be affiliated persons of the Manager
and PIMCO. Absent an SEC exemption or other relief, the Fund generally is
precluded from effecting principal transactions with the Affiliated Brokers, and
its ability to purchase securities being underwritten by an Affiliated Broker or
a syndicate including an Affiliated Broker is subject to restrictions.
Similarly, the Fund's ability to utilize the Affiliated Brokers for agency
transactions is subject to the restrictions of Rule 17e-1 under the 1940 Act.
PIMCO does not believe that the restrictions on transactions with the Affiliated
Brokers described above will materially adversely affect its ability to provide
services to the Fund, the Fund's ability to take advantage of market
opportunities, or the Fund's overall performance.

     Allianz AG's address is Koniginstrasse 28, D-80802, Munich, Germany.
Pacific Life's address is 700 Newport Center Drive, Newport Beach, CA 92660.

     The Manager, subject to the supervision of the Board of Trustees, is
responsible for managing, either directly or through others selected by the
Manager, the investments of the Fund. The Manager also furnishes to the Board of
Trustees periodic reports on the investment performance of the Fund. As more
fully discussed below, the Manager has retained PIMCO, its affiliate, to serve
as the Fund's portfolio manager.

     Under the terms of the Investment Management Agreement, subject to such
policies as the Trustees of the Fund may determine, the Manager, at its expense,
will furnish continuously an investment program for the Fund and will make
investment decisions on behalf of the Fund and place all orders for the purchase
and sale of portfolio securities subject always to the Fund's investment
objective, policies and restrictions; provided that, so long as PIMCO serves as
the portfolio manager for the Fund, the Manager's obligation under the
Investment Management Agreement with respect to the Fund is, subject always to
the control of the Trustees, to determine and review with PIMCO the investment
policies of the Fund.

     Subject to the control of the Trustees, the Manager also manages,
supervises and conducts the other affairs and business of the Fund, furnishes
office space and equipment, provides bookkeeping and certain clerical services
(excluding determination of the net asset value of the Fund, shareholder
accounting services and the accounting services for the Fund) and pays all
salaries, fees and expenses of officers and Trustees of the Fund who are
affiliated with the Manager. As indicated under "Portfolio
Transactions--Brokerage and Research Services," the Fund's portfolio
transactions may be placed with broker-dealers which furnish the Manager and
PIMCO, without cost, certain research, statistical and quotation services of
value to them or their respective affiliates in advising the Fund or their other
clients. In so doing, the Fund may incur greater brokerage commissions and other
transactions costs than it might otherwise pay.

     Pursuant to the Investment Management Agreement, the Fund has agreed to pay
the Manager an annual management fee, payable on a monthly basis, at the annual
rate of 0.65% of the Fund's average daily net assets (including net assets
attributable to Preferred Shares) for the services and facilities it provides.
All fees and expenses are accrued daily and deducted before payment of dividends
to investors.

                                       40

<PAGE>

     From the commencement of the Fund's operations through June 30, 2009, the
Manager has contractually agreed to waive a portion of the management fees it is
entitled to receive from the Fund in the amounts, and for the time periods, set
forth below:


<TABLE>
<CAPTION>
                  Percentage Waived
                  (contractual annual              Percentage Waived
                 rate as a percentage              (annual rate as a
                 of average daily net            percentage of average
                  assets attributable               daily net assets
                  to Common Shares --            attributable to Common
                assuming no Preferred            Shares -- assuming the
Period Ending    Shares are issued or            issuance of Preferred
June 30,             outstanding)                      Shares)(2)
- -------------   ----------------------           ----------------------
<S>             <C>                              <C>
2003 /1/.....           0.15%                            0.24%
2004.........           0.15%                            0.24%
2005.........           0.15%                            0.24%
2006.........           0.15%                            0.24%
2007.........           0.15%                            0.24%
2008.........           0.10%                            0.16%
2009.........           0.05%                            0.08%
</TABLE>


     ----------

     /1/  From the commencement of the Fund's operations.

     /2/  Assumes the issuance of Preferred Shares in an amount equal to 38%
          of the Fund's capital (after their issuance).


     The Manager has not agreed to waive any portion of its fees beyond June 30,
2009.

     Except as otherwise described in the Prospectus, the Fund pays, in addition
to the investment management fee described above, all expenses not assumed by
the Manager, including, without limitation, fees and expenses of Trustees who
are not "interested persons" of the Manager or the Fund, interest charges,
taxes, brokerage commissions, expenses of issue of shares, fees and expenses of
registering and qualifying the Fund and its classes of shares for distribution
under federal and state laws and regulations, charges of custodians, auditing
and legal expenses, expenses of determining net asset value of the Fund, reports
to shareholders, expenses of meetings of shareholders, expenses of printing and
mailing prospectuses, proxy statements and proxies to existing shareholders, and
its proportionate share of insurance premiums and professional association dues
or assessments. The Fund is also responsible for such nonrecurring expenses as
may arise, including litigation in which the Fund may be a party, and other
expenses as determined by the Trustees. The Fund may have an obligation to
indemnify its officers and Trustees with respect to such litigation.

Portfolio Manager

     PIMCO serves as portfolio manager for the Fund pursuant to a portfolio
management agreement (the "Portfolio Management Agreement") between PIMCO and
the Manager. Under the Portfolio Management Agreement, subject always to the
control of the Trustees and the supervision of the Manager, PIMCO's obligation
is to furnish continuously an investment program for the Fund, to make
investment decisions on behalf of the Fund and to place all orders for the
purchase and sale of portfolio securities and all other investments for the
Fund.

     Under the Portfolio Management Agreement, the Manager pays a portion of the
fees it receives from the Fund to PIMCO in return for PIMCO's services, at the
maximum annual rate of 0.50% of the Fund's average daily net assets (including
assets attributable to any Preferred Shares that may be outstanding). PIMCO has
contractually agreed to waive a portion of the fee it is entitled to receive
from the Manager such that PIMCO will receive 0.26% of the Fund's average daily
net assets from the commencement of Fund operations through June 30, 2007 (i.e.,

                                       41

<PAGE>

roughly the first 5 years of Fund operations), 0.40% of average daily net assets
in year 6, 0.45% in year 7 and 0.50% in each year thereafter.


     Originally organized in 1971, reorganized as a Delaware general partnership
in 1994 and reorganized as a Delaware limited liability company in 2000, PIMCO
provides investment management and advisory services to private accounts of
institutional and individual clients and to mutual funds. The membership
interests of PIMCO as of January 10, 2002, were held 94% by ADAM of America and
6% by the managing directors of PIMCO. As of March 31, 2002, PIMCO had
approximately $254 billion in assets under management. PIMCO is located at 840
Newport Center Drive, Newport Beach, California 92660.


     Certain Terms of the Investment Management Agreement and Portfolio
Management Agreement. The Investment Management Agreement and the Portfolio
Management Agreement were each approved by the Trustees of the Fund (including
all of the Trustees who are not "interested persons" of the Manager or PIMCO).
The Investment Management Agreement and Portfolio Management Agreement will each
continue in force with respect to the Fund for two years from their respective
dates, and from year to year thereafter, but only so long as their continuance
is approved at least annually by (i) vote, cast in person at a meeting called
for that purpose, of a majority of those Trustees who are not "interested
persons" of the Manager, PIMCO or the Fund, and by (ii) the majority vote of
either the full Board of Trustees or the vote of a majority of the outstanding
shares of all classes of the Fund. Each of the Investment Management Agreement
and Portfolio Management Agreement automatically terminates on assignment. The
Investment Management Agreement may be terminated on not less than 60 days'
notice by the Manager to the Fund or by the Fund to the Manager. The Portfolio
Management Agreement may be terminated on not less than 60 days' notice by the
Manager to PIMCO or by PIMCO to the Manager, or by the Fund at any time by
notice to the Manager and PIMCO.

     The Investment Management Agreement and the Portfolio Management Agreement
each provide that the Manager or PIMCO, as applicable, shall not be subject to
any liability in connection with the performance of its services thereunder in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties.


     Basis for Approval of the Investment Management Agreement and Portfolio
Management Agreement. In determining to approve the Investment Management
Agreement and the Portfolio Management Agreement, the Trustees met with the
relevant investment advisory personnel from the Manager and PIMCO and considered
information relating to the education, experience and number of investment
professionals and other personnel who would provide services under the
applicable agreement. See "Management of the Fund" in the Prospectus and this
Statement of Additional Information. The Trustees also took into account the
time and attention to be devoted by senior management to the Fund and the other
funds in the complex. The Trustees evaluated the level of skill required to
manage the Fund and concluded that the human resources to be available at the
Manager and PIMCO were appropriate to fulfill effectively the duties of the
Manager and PIMCO on behalf of the Fund under the applicable agreement. The
Trustees also considered the business reputation of the Manager and PIMCO, their
financial resources and professional liability insurance coverage and concluded
that they would be able to meet any reasonably foreseeable obligations under the
applicable agreement.

     The Trustees received information concerning the investment philosophy and
investment process to be applied by PIMCO in managing the Fund. In this
connection, the Trustees considered PIMCO's in-house research capabilities as
well as other resources available to PIMCO's personnel, including research
services available to PIMCO as a result of securities transactions effected for
the Fund and other investment advisory clients. The Trustees concluded that
PIMCO's investment process, research capabilities and philosophy were well
suited to the Fund, given the Fund's investment objective and policies.

     The Trustees considered the scope of the services provided by the Manager
and PIMCO to the Fund under the Investment Management Agreement and Portfolio
Management Agreement, respectively, relative to services provided by third
parties to other mutual funds. The Trustees noted that the Manager's and PIMCO's
standard of care was comparable to that found in most investment company
advisory agreements. See "--Certain Terms of the Investment Management Agreement
and the Portfolio Management Agreement" above. The Trustees concluded that the
scope of the Manager's and PIMCO's services to be provided to the Fund was
consistent with the Fund's operational requirements, including, in addition to
its investment objective, compliance with the Fund's investment restrictions,
tax and reporting requirements and related shareholder services.

         The Trustees considered the quality of the services to be provided by
the Manager and PIMCO to the Fund. The Trustees also evaluated the procedures of
the Manager and PIMCO designed to fulfill the their fiduciary duty to the Fund
with respect to possible conflicts of interest, including their codes of ethics
(regulating the personal trading of their officers and employees) (see
"Management of the Fund--Code of Ethics" above), the procedures by which PIMCO
allocates trades among its various investment advisory clients, the integrity of
the systems in place to ensure compliance with the foregoing and the record of
PIMCO in these matters. The Trustees also received information concerning
standards of the Manager and PIMCO with respect to the execution of portfolio
transactions. See "Portfolio Transactions" below.

     In approving the agreements, the Trustees also gave substantial
consideration to the fees payable under the agreements. The Trustees reviewed
information concerning fees paid to investment advisers of similar municipal
bond funds. The Trustees also considered the fees of the Fund as a percentage of
assets at different asset levels and possible economies of scale to the Manager.
The Trustees evaluated the Manager's profitability with respect to the Fund,
concluding that such profitability was not inconsistent with levels of
profitability that had been determined by courts not to be "excessive." In
evaluating the Fund's advisory fees, the Trustees also took into account the
complexity of investment management for the Fund relative to other types of
funds. The Trustees concluded that, generally, municipal bond funds require
greater intensity of research and trading acumen than more diversified funds.


                                       42

<PAGE>

concerning standards of the Manager and PIMCO with respect to the execution of
portfolio transactions. See "Portfolio Transactions" below.

         In approving the agreements, the Trustees also gave substantial
consideration to the fees payable under the agreements. The Trustees reviewed
information concerning fees paid to investment advisers of similar municipal
bond funds. The Trustees also considered the fees of the Fund as a percentage of
assets at different asset levels and possible economies of scale to the Manager.
The Trustees evaluated the Manager's profitability with respect to the Fund,
concluding that such profitability was not inconsistent with levels of
profitability that had been determined by courts not to be "excessive." In
evaluating the Fund's advisory fees, the Trustees also took into account the
complexity of investment management for the Fund relative to other types of
funds. The Trustees concluded that, generally, municipal bond funds require
greater intensity of research and trading acumen than more diversified funds.

<PAGE>

                             PORTFOLIO TRANSACTIONS

Investment Decisions and Portfolio Transactions


     Investment decisions for the Fund and for the other investment advisory
clients of the Manager and PIMCO are made with a view to achieving their
respective investment objectives. Investment decisions are the product of many
factors in addition to basic suitability for the particular client involved
(including the Fund. Some securities considered for investments by the Fund may
also be appropriate for other clients served by the Manager and PIMCO. Thus, a
particular security may be bought or sold for certain clients even though it
could have been bought or sold for other clients at the same time. If a purchase
or sale of securities consistent with the investment policies of the Fund and
one or more of these clients served by the Manager or PIMCO is considered at or
about the same time, transactions in such securities will be allocated among the
Fund and clients in a manner deemed fair and reasonable by the Manager or PIMCO,
as applicable. The Manager or PIMCO may aggregate orders for the Fund with
simultaneous transactions entered into on behalf of its other clients so long as
price and transaction expenses are averaged either for that transaction or for
the day. Likewise, a particular security may be bought for one or more clients
when one or more clients are selling the security. In some instances, one client
may sell a particular security to another client. It also sometimes happens that
two or more clients simultaneously purchase or sell the same security, in which
event each day's transactions in such security are, insofar as possible,
averaged as to price and allocated between such clients in a manner which the
Manager or PIMCO believes is equitable to each and in accordance with the amount
being purchased or sold by each. There may be circumstances when purchases or
sales of portfolio securities for one or more clients will have an adverse
effect on other clients.


Brokerage and Research Services

     There is generally no stated commission in the case of debt securities,
which are traded in the over-the-counter markets, but the price paid by the Fund
usually includes an undisclosed dealer commission or mark-up. In underwritten
offerings, the price paid by the Fund includes a disclosed, fixed commission or
discount retained by the underwriter or dealer. Transactions on U.S. stock
exchanges and other agency transactions involve the payment by the Fund of
negotiated brokerage commissions. Such commissions vary among different brokers.
Also, a particular broker may charge different commissions according to such
factors as the difficulty and size of the transaction.

     Subject to the supervision of the Manager, PIMCO places all orders for the
purchase and sale of portfolio securities, options, futures contracts and other
instruments for the Fund and buys and sells such securities, options, futures
and other instruments for the Fund through a substantial number of brokers and
dealers. In so doing, PIMCO uses its best efforts to obtain for the Fund the
most favorable price and execution available, except to the extent it may be
permitted to pay higher brokerage commissions as described below. In seeking the
most favorable price and execution, PIMCO, having in mind the Fund's best
interests, considers all factors it deems relevant, including, by way of
illustration, price, the size of the transaction, the nature of the market for
the security, the amount of the commission, the timing of the transaction taking
into

                                       43

<PAGE>

account market prices and trends, the reputation, experience and financial
stability of the broker-dealer involved and the quality of service rendered by
the broker-dealer in other transactions.

     Subject to the supervision of the Manager, PIMCO places orders for the
purchase and sale of portfolio investments for the Fund's account with brokers
or dealers selected by it in its discretion. In effecting purchases and sales of
portfolio securities for the account of the Fund, PIMCO will seek the best price
and execution of the Fund's orders. In doing so, the Fund may pay higher
commission rates than the lowest available when PIMCO believes it is reasonable
to do so in light of the value of the brokerage and research services provided
by the broker effecting the transaction, as discussed below.

     It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive research services from broker-dealers which execute portfolio
transactions for the clients of such advisers. Consistent with this practice,
PIMCO may receive research services from many broker-dealers with which PIMCO
places the Fund's portfolio transactions. PIMCO may also receive research or
research credits from brokers which are generated from underwriting commissions
when purchasing new issues of debt securities or other assets for the Fund.
These services, which in some cases may also be purchased for cash, include such
matters as general economic and security market reviews, industry and company
reviews, evaluations of securities and recommendations as to the purchase and
sale of securities. Some of these services are of value to PIMCO in advising
various of its clients (including the Fund), although not all of these services
are necessarily useful and of value in managing the Fund. Neither the management
fee paid by the Fund to the Manager nor the portfolio management fee paid by the
Manager to PIMCO is reduced because PIMCO and its affiliates receive such
services.

     As permitted by Section 28(e) of the Securities Exchange Act of 1934, PIMCO
may cause the Fund to pay a broker-dealer which provides "brokerage and research
services" (as defined in such Act) to PIMCO an amount of disclosed commission
for effecting a securities transaction for the Fund in excess of the commission
which another broker-dealer would have charged for effecting that transaction.

     The Fund may use broker-dealers that are affiliates (or affiliates of
affiliates) of the Fund, the Manager and/or PIMCO, subject to certain
restrictions discussed above under "Investment Manager and Portfolio
Manager--Investment Advisor."

     References to PIMCO in this section would apply equally to the Manager if
the Manager were to assume portfolio management responsibilities for the Fund
and place orders for the purchase and sale of the Fund's portfolio investments.

                                  DISTRIBUTIONS

     As described in the Fund's Prospectus, initial distributions to Common
Shareholders are expected to be declared approximately 45 days, and paid
approximately 60 to 90 days, from the completion of the offering of the Common
Shares, depending on market conditions. To permit the Fund to maintain a more
stable monthly distribution, the Fund will initially (prior to its first
distribution), and may from time to time thereafter, distribute less than the
entire amount of net

                                       44

<PAGE>

investment income earned in a particular period. Such undistributed net
investment income would be available to supplement future distributions,
including distributions that might otherwise have been reduced by a decrease in
the Fund's monthly net income due to fluctuations in investment income or
expenses, or due to an increase in the dividend rate on the Fund's outstanding
Preferred Shares. As a result, the distributions paid by the Fund for any
particular period may be more or less than the amount of net investment income
actually earned by the Fund during such period. Undistributed net investment
income will be added to the Fund's net asset value and, correspondingly,
distributions from undistributed net investment income will be deducted from the
Fund's net asset value.

     For tax purposes, the Fund is currently required to allocate net capital
gain and other taxable income, if any, between and among Common Shares and any
series of Preferred Shares in proportion to total distributions paid to each
class for the year in which such net capital gain or other taxable income is
realized. For information relating to the impact of the issuance of Preferred
Shares on the distributions made by the Fund to Common Shareholders, see the
Fund's Prospectus under "Preferred Shares and Related Leverage."

     While any Preferred Shares are outstanding, the Fund may not declare any
cash dividend or other distribution on its Common Shares unless at the time of
such declaration (1) all accumulated dividends on the Preferred Shares have been
paid and (2) the net asset value of the Fund's portfolio (determined after
deducting the amount of such dividend or other distribution) is at least 200% of
the liquidation value of any outstanding Preferred Shares. This latter
limitation on the Fund's ability to make distributions on its Common Shares
could cause the Fund to incur income and excise tax and, under certain
circumstances, impair the ability of the Fund to maintain its qualification for
taxation as a regulated investment company. See "Tax Matters."

                              DESCRIPTION OF SHARES

Common Shares

     The Fund's Declaration authorizes the issuance of an unlimited number of
Common Shares. The Common Shares will be issued with a par value of $0.00001 per
share. All Common Shares of the Fund have equal rights as to the payment of
dividends and the distribution of assets upon liquidation of the Fund. Common
Shares will, when issued, be fully paid and, subject to matters discussed in
"Anti-Takeover and Other Provisions in the Declaration of Trust--Shareholder
Liability" below, non-assessable, and will have no pre-emptive or conversion
rights or rights to cumulative voting. At any time when the Fund's Preferred
Shares are outstanding, Common Shareholders will not be entitled to receive any
distributions from the Fund unless all accrued dividends on Preferred Shares
have been paid, and unless asset coverage (as defined in the 1940 Act) with
respect to Preferred Shares would be at least 200% after giving effect to such
distributions. See "--Preferred Shares" below.

     The Common Shares have been authorized for listing on the New York Stock
Exchange, subject to notice of issuance. The Fund intends to hold annual
meetings of shareholders so long

                                       45

<PAGE>

as the Common Shares are listed on a national securities exchange and such
meetings are required as a condition to such listing.

     Shares of closed-end investment companies may frequently trade at prices
lower than net asset value. Shares of closed-end investment companies like the
Fund that invest predominantly in investment grade Municipal Bonds have during
some periods traded at prices higher than net asset value and during other
periods traded at prices lower than net asset value. There can be no assurance
that Common Shares or shares of other municipal funds will trade at a price
higher than net asset value in the future. Net asset value will be reduced
immediately following the offering of Common Shares after payment of the sales
load and organization and offering expenses. Net asset value generally increases
when interest rates decline, and decreases when interest rates rise, and these
changes are likely to be greater in the case of a fund, such as the Fund, having
a leveraged capital structure. Whether investors will realize gains or losses
upon the sale of Common Shares will not depend upon the Fund's net asset value
but will depend entirely upon whether the market price of the Common Shares at
the time of sale is above or below the original purchase price for the shares.
Since the market price of the Fund's Common Shares will be determined by factors
beyond the control of the Fund, the Fund cannot predict whether the Common
Shares will trade at, below, or above net asset value or at, below or above the
initial public offering price. Accordingly, the Common Shares are designed
primarily for long-term investors, and investors in the Common Shares should not
view the Fund as a vehicle for trading purposes. See "Repurchase of Common
Shares; Conversion to Open-End Fund" and the Fund's Prospectus under "Preferred
Shares and Related Leverage" and "The Fund's Investments--Municipal Bonds."

Preferred Shares

     The Declaration authorizes the issuance of an unlimited number of Preferred
Shares. The Preferred Shares may be issued in one or more classes or series,
with such par value and rights as determined by the Board of Trustees of the
Fund, by action of the Board of Trustees without the approval of the Common
Shareholders.

     The Fund's Board of Trustees has indicated its intention to authorize an
offering of Preferred Shares (representing approximately 38% of the Fund's
capital immediately after the time the Preferred Shares are issued) within
approximately one to three months after completion of the offering of Common
Shares, subject to market conditions and to the Board's continuing belief that
leveraging the Fund's capital structure through the issuance of Preferred Shares
is likely to achieve the benefits to the Common Shareholders described in the
Prospectus and this Statement of Additional Information. Although the terms of
the Preferred Shares, including their dividend rate, voting rights, liquidation
preference and redemption provisions, will be determined by the Board of
Trustees (subject to applicable law and the Declaration) if and when it
authorizes a Preferred Shares offering, the Board has stated that the initial
series of Preferred Shares would likely pay cumulative dividends at relatively
short-term periods (such as 7 days); by providing for the periodic
redetermination of the dividend rate through an auction or remarketing
procedure. The liquidation preference, preference on distribution, voting rights
and redemption provisions of the Preferred Shares are expected to be as stated
below.

                                       46

<PAGE>


     As used in this Statement of Additional Information, unless otherwise
noted, the Fund's "net assets" include assets of the Fund attributable to any
outstanding Preferred Shares, with no deduction for the liquidation preference
of the Preferred Shares. Solely for financial reporting purposes, however, the
Fund is required to exclude the liquidation preference of Preferred Shares from
"net assets," so long as the Preferred Shares have redemption features that are
not solely within the control of the Fund. For all regulatory and tax purposes,
the Fund's Preferred Shares will be treated as stock (rather than indebtedness).

     Limited Issuance of Preferred Shares. Under the 1940 Act, the Fund could
issue Preferred Shares with an aggregate liquidation value of up to one-half of
the value of the Fund's total net assets, measured immediately after issuance of
the Preferred Shares. "Liquidation value" means the original purchase price of
the shares being liquidated plus any accrued and unpaid dividends. In addition,
the Fund is not permitted to declare any cash dividend or other distribution on
its Common Shares unless the liquidation value of the Preferred Shares is less
than one-half of the value of the Fund's total net assets (determined after
deducting the amount of such dividend or distribution) immediately after the
distribution. To the extent that the Fund has outstanding any senior securities
representing indebtedness (such as through the use of derivative instruments
that constitute senior securities), the aggregate amount of such senior
securities will be added to the total liquidation value of any outstanding
Preferred Shares for purposes of these asset coverage requirements. The
liquidation value of the Preferred Shares is expected to be approximately 38% of
the value of the Fund's total net assets. The Fund intends to purchase or redeem
Preferred Shares, if necessary, to keep the liquidation value of the Preferred
Shares plus the aggregate amount of other senior securities representing
indebtedness at or below one-half of the value of the Fund's total net assets.

     Distribution Preference. The Preferred Shares will have complete priority
over the Common Shares as to distribution of assets.

     Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Fund, Preferred
Shareholders will be entitled to receive a preferential liquidating distribution
(expected to equal the original purchase price per share plus accumulated and
unpaid dividends thereon, whether or not earned or declared) before any
distribution of assets is made to holders of Common Shares. After payment of the
full amount of the liquidating distribution to which they are entitled,
Preferred Shareholders will not be entitled to any further participation in any
distribution of assets by the Fund. A consolidation or merger of the Fund with
or into any Massachusetts business trust or corporation or a sale of all or
substantially all of the assets of the Fund shall not be deemed to be a
liquidation, dissolution or winding up of the Fund.

     Voting Rights. In connection with any issuance of Preferred Shares, the
Fund must comply with Section 18(i) of the 1940 Act which requires, among other
things, that Preferred Shares be voting shares. Except as otherwise provided in
the Declaration or the Fund's Bylaws or otherwise required by applicable law,
Preferred Shareholders will vote together with Common Shareholders as a single
class.

     In connection with the election of the Fund's Trustees, Preferred
Shareholders, voting as a separate class, will also be entitled to elect two of
the Fund's Trustees, and the remaining Trustees shall be elected by Common
Shareholders and Preferred Shareholders, voting together as a single class. In
addition, if at any time dividends on the Fund's outstanding Preferred Shares
shall be unpaid in an amount equal to two full years' dividends thereon, the
holders of all outstanding Preferred Shares, voting as a separate class, will be
entitled to elect a majority of the Fund's Trustees until all dividends in
arrears have been paid or declared and set apart for payment.

                                       47

<PAGE>

     The affirmative vote of the holders of a majority of the outstanding
Preferred Shares, voting as a separate class, shall be required to approve any
action requiring a vote of security holders under Section 13(a) of the 1940 Act
including, among other things, changes in the Fund's investment objective, the
conversion of the Fund from a closed-end to an open-end company, or changes in
the investment restrictions described as fundamental policies under "Investment
Restrictions." The class or series vote of Preferred Shareholders described
above shall in each case be in addition to any separate vote of the requisite
percentage of Common Shares and Preferred Shares necessary to authorize the
action in question.

     The foregoing voting provisions will not apply with respect to the Fund's
Preferred Shares if, at or prior to the time when a vote is required, such
shares shall have been (1) redeemed or (2) called for redemption and sufficient
funds shall have been deposited in trust to effect such redemption.

     Redemption, Purchase and Sale of Preferred Shares by the Fund. The terms of
the Preferred Shares may provide that they are redeemable at certain times, in
whole or in part, at the original purchase price per share plus accumulated
dividends, that the Fund may tender for or purchase Preferred Shares and that
the Fund may subsequently resell any shares so tendered for or purchased. Any
redemption or purchase of Preferred Shares by the Fund will reduce the leverage
applicable to Common Shares, while any resale of shares by the Fund will
increase such leverage.

     The discussion above describes the Fund's Board of Trustees' present
intention with respect to a possible offering of Preferred Shares. If the Board
of Trustees determines to authorize such an offering, the terms of the Preferred
Shares may be the same as, or different from, the terms described above, subject
to applicable law and the Declaration.

         ANTI-TAKEOVER AND OTHER PROVISIONS IN THE DECLARATION OF TRUST

Shareholder Liability

     Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Fund. However, the
Declaration contains an express disclaimer of shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be given in
each agreement, obligation or instrument entered into or executed by the Fund or
the Trustees. The Declaration also provides for indemnification out of the
Fund's property for all loss and expense of any shareholder held personally
liable on account of being or having been a shareholder. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which such disclaimer is inoperative or the Fund is
unable to meet its obligations, and thus should be considered remote.

Anti-Takeover Provisions

     As described below, the Declaration includes provisions that could have the
effect of limiting the ability of other entities or persons to acquire control
of the Fund or to change the composition of its Board of Trustees, and could
have the effect of depriving shareholders of

                                       48

<PAGE>

opportunities to sell their shares at a premium over prevailing market prices by
discouraging a third party from seeking to obtain control of the Fund.

     The Fund's Trustees are divided into three classes (Class I, Class II and
Class III), having initial terms of one, two and three years, respectively. At
each annual meeting of shareholders, the term of one class will expire and each
Trustee elected to that class will hold office for a term of three years. The
classification of the Board of Trustees in this manner could delay for an
additional year the replacement of a majority of the Board of Trustees. In
addition, the Declaration provides that a Trustee may be removed only for cause
and only (i) by action of at least seventy-five percent (75%) of the outstanding
shares of the classes or series of shares entitled to vote for the election of
such Trustee, or (ii) by at least seventy-five percent (75%) of the remaining
Trustees.

     Except as provided in the next paragraph, the affirmative vote or consent
of at least seventy-five percent (75%) of the Board of Trustees and at least
seventy-five percent (75%) of the shares of the Fund outstanding and entitled to
vote thereon are required to authorize any of the following transactions (each a
"Material Transaction"): (1) a merger, consolidation or share exchange of the
Fund or any series or class of shares of the Fund with or into any other person
or company, or of any such person or company with or into the Fund or any such
series or class of shares; (2) the issuance or transfer by the Fund or any
series or class of shares (in one or a series of transactions in any
twelve-month period) of any securities of the Fund or such series or class to
any other person or entity for cash, securities or other property (or
combination thereof) having an aggregate fair market value of $1,000,000 or
more, excluding sales of securities of the Fund or such series or class in
connection with a public offering, issuances of securities of the Fund or such
series or class pursuant to a dividend reinvestment plan adopted by the Fund and
issuances of securities of the Fund or such series or class upon the exercise of
any stock subscription rights distributed by the Fund; or (3) a sale, lease,
exchange, mortgage, pledge, transfer or other disposition by the Fund or any
series or class of shares (in one or a series of transactions in any
twelve-month period) to or with any person of any assets of the Fund or such
series or class having an aggregate fair market value of $1,000,000 or more,
except for transactions in securities effected by the Fund or such series or
class in the ordinary course of its business. The same affirmative votes are
required with respect to any shareholder proposal as to specific investment
decisions made or to be made with respect to the Fund's assets or the assets of
any series or class of shares of the Fund.

     Notwithstanding the approval requirements specified in the preceding
paragraph, the Declaration requires no vote or consent of the Fund's
shareholders to authorize a Material Transaction if the transaction is approved
by a vote of both a majority of the Board of Trustees and seventy-five percent
(75%) of the Continuing Trustees (as defined below), so long as all other
conditions and requirements, if any, provided for in the Fund's Bylaws and
applicable law (including any shareholder voting rights under the 1940 Act) have
been satisfied.

     In addition, the Declaration provides that the Fund may be terminated at
any time by vote or consent of at least seventy-five percent (75%) of the Fund's
shares or, alternatively, by vote or consent of both a majority of the Board of
Trustees and seventy-five percent (75%) of the Continuing Trustees (as defined
below).

                                       49

<PAGE>

     In certain circumstances, the Declaration also imposes shareholder voting
requirements that are more demanding than those required under the 1940 Act in
order to authorize a conversion of the Fund from a closed-end to an open-end
investment company. See "Repurchase of Common Shares; Conversion to Open-End
Fund" below.

     As noted, the voting provisions described above could have the effect of
depriving Common Shareholders of an opportunity to sell their Common Shares at a
premium over prevailing market prices by discouraging a third party from seeking
to obtain control of the Fund in a tender offer or similar transaction. In the
view of the Fund's Board of Trustees, however, these provisions offer several
possible advantages, including: (1) requiring persons seeking control of the
Fund to negotiate with its management regarding the price to be paid for the
amount of Common Shares required to obtain control; (2) promoting continuity and
stability; and (3) enhancing the Fund's ability to pursue long-term strategies
that are consistent with its investment objective and management policies. The
Board of Trustees has determined that the voting requirements described above,
which are generally greater than the minimum requirements under the 1940 Act,
are in the best interests of the Fund's Common Shareholders generally.

     A "Continuing Trustee," as used in the discussion above, is any member of
the Fund's Board of Trustees who either (i) has been a member of the Board for a
period of at least thirty-six months (or since the commencement of the Fund's
operations, if less than thirty-six months) or (ii) was nominated to serve as a
member of the Board of Trustees by a majority of the Continuing Trustees then
members of the Board.

     The foregoing is intended only as a summary and is qualified in its
entirety by reference to the full text of the Declaration and the Fund's Bylaws,
both of which have been filed as exhibits to the Fund's registration statement
on file with the SEC.

Liability of Trustees

     The Declaration provides that the obligations of the Fund are not binding
upon the Trustees of the Fund individually, but only upon the assets and
property of the Fund, and that the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. Nothing in the Declaration, however,
protects a Trustee against any liability to which he would otherwise be subject
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office.

            REPURCHASE OF COMMON SHARES; CONVERSION TO OPEN-END FUND

     The Fund is a closed-end investment company and as such its shareholders
will not have the right to cause the Fund to redeem their shares. Instead, the
Fund's Common Shares will trade in the open market at a price that will be a
function of several factors, including dividend levels (which are in turn
affected by expenses), net asset value, call protection, price, dividend
stability, relative demand for and supply of such shares in the market, general
market and economic conditions and other factors. Shares of a closed-end
investment company may

                                       50

<PAGE>

frequently trade at prices lower than net asset value. The Fund's Board of
Trustees regularly monitors the relationship between the market price and net
asset value of the Common Shares. If the Common Shares were to trade at a
substantial discount to net asset value for an extended period of time, the
Board may consider the repurchase of its Common Shares on the open market or in
private transactions, or the making of a tender offer for such shares. There can
be no assurance, however, that the Board of Trustees will decide to take or
propose any of these actions, or that share repurchases or tender offers, if
undertaken, will reduce market discount. The Fund has no present intention to
repurchase its Common Shares and would do so only in the circumstances described
in this section.

     Notwithstanding the foregoing, at any time when the Fund's Preferred Shares
are outstanding, the Fund may not purchase, redeem or otherwise acquire any of
its Common Shares unless (1) all accrued dividends on Preferred Shares have been
paid and (2) at the time of such purchase, redemption or acquisition, the net
asset value of the Fund's portfolio (determined after deducting the acquisition
price of the Common Shares) is at least 200% of the liquidation value of the
outstanding Preferred Shares (expected to equal the original purchase price per
share plus any accrued and unpaid dividends thereon).

     Subject to its investment limitations, the Fund may borrow to finance the
repurchase of shares or to make a tender offer. Interest on any borrowings to
finance share repurchase transactions or the accumulation of cash by the Fund in
anticipation of share repurchases or tenders will reduce the Fund's net income.
Any share repurchase, tender offer or borrowing that might be approved by the
Board of Trustees would have to comply with the Securities Exchange Act of 1934,
as amended, and the 1940 Act and the rules and regulations thereunder.

     The Fund's Board of Trustees may also from time to time consider submitting
to the holders of the shares of beneficial interest of the Fund a proposal to
convert the Fund to an open-end investment company. In determining whether to
exercise its sole discretion to submit this issue to shareholders, the Board of
Trustees would consider all factors then relevant, including the relationship of
the market price of the Common Shares to net asset value, the extent to which
the Fund's capital structure is leveraged and the possibility of re-leveraging,
the spread, if any, between the yields on securities in the Fund's portfolio and
interest and dividend charges on Preferred Shares issued by the Fund and general
market and economic conditions.

     The Declaration requires the affirmative vote or consent of holders of at
least seventy-five percent (75%) of each class of the Fund's shares entitled to
vote on the matter to authorize a conversion of the Fund from a closed-end to an
open-end investment company, unless the conversion is authorized by both a
majority of the Board of Trustees and seventy-five percent (75%) of the
Continuing Trustees (as defined above under "Anti-Takeover and Other Provisions
in the Declaration of Trust--Anti-Takeover Provisions"). This seventy-five
percent (75%) shareholder approval requirement is higher than is required under
the 1940 Act. In the event that a conversion is approved by the Trustees and the
Continuing Trustees as described above, the minimum shareholder vote required
under the 1940 Act would be necessary to authorize the conversion. Currently,
the 1940 Act would require approval of the holders of a "majority of the
outstanding" Common Shares and, if issued, Preferred Shares voting together as a
single class, and the holders of a "majority of the outstanding" Preferred
Shares voting as a separate class, in order to authorize a conversion.

                                       51

<PAGE>

     If the Fund converted to an open-end company, it would be required to
redeem all Preferred Shares then outstanding (requiring in turn that it
liquidate a portion of its investment portfolio), and the Fund's Common Shares
likely would no longer be listed on the New York Stock Exchange. Shareholders of
an open-end investment company may require the company to redeem their shares on
any business day (except in certain circumstances as authorized by or under the
1940 Act) at their net asset value, less such redemption charge, if any, as
might be in effect at the time of redemption. In order to avoid maintaining
large cash positions or liquidating favorable investments to meet redemptions,
open-end companies typically engage in a continuous offering of their shares.
Open-end companies are thus subject to periodic asset in-flows and out-flows
that can complicate portfolio management.

     The repurchase by the Fund of its shares at prices below net asset value
will result in an increase in the net asset value of those shares that remain
outstanding. However, there can be no assurance that share repurchases or
tenders at or below net asset value will result in the Fund's shares trading at
a price equal to their net asset value. Nevertheless, the fact that the Fund's
shares may be the subject of repurchase or tender offers at net asset value from
time to time, or that the Fund may be converted to an open-end company, may
reduce any spread between market price and net asset value that might otherwise
exist.

     In addition, a purchase by the Fund of its Common Shares will decrease the
Fund's total assets. This would likely have the effect of increasing the Fund's
expense ratio. Any purchase by the Fund of its Common Shares at a time when
Preferred Shares are outstanding will increase the leverage applicable to the
outstanding Common Shares then remaining. See the Fund's Prospectus under
"Risks--Leverage Risk."

     Before deciding whether to take any action if the Fund's Common Shares
trade below net asset value, the Board of Trustees would consider all relevant
factors, including the extent and duration of the discount, the liquidity of the
Fund's portfolio, the impact of any action that might be taken on the Fund or
its shareholders and market considerations. Based on these considerations, even
if the Fund's shares should trade at a discount, the Board of Trustees may
determine that, in the interest of the Fund and its shareholders, no action
should be taken.

                                   TAX MATTERS

     Taxation of the Fund. The Fund intends to qualify each year as a regulated
investment company under Subchapter M of the Code. In order to qualify for the
special tax treatment accorded regulated investment companies and their
shareholders, the Fund must, among other things:

     (a) derive at least 90% of its gross income from dividends, interest,
     payments with respect to certain securities loans, and gains from the sale
     of stock, securities or foreign currencies, or other income (including but
     not limited to gains from options, futures, or forward contracts) derived
     with respect to its business of investing in such stock, securities, or
     currencies;

                                       52

<PAGE>


     (b) distribute with respect to each taxable year at least 90% of the sum of
     its net tax-exempt income, taxable ordinary income and the excess, if any,
     of net short-term capital gains over net long-term capital losses for such
     year; and


     (c) diversify its holdings so that, at the end of each quarter of the
     Fund's taxable year, (i) at least 50% of the market value of the Fund's
     total assets is represented by cash and cash items, U.S. government
     securities, securities of other regulated investment companies, and other
     securities limited in respect of any one issuer to a value not greater than
     5% of the value of the Fund's total assets and not more than 10% of the
     outstanding voting securities of such issuer, and (ii) not more than 25% of
     the value of the Fund's total assets is invested in the securities (other
     than those of the U.S. government or other regulated investment companies)
     of any one issuer or of two or more issuers which the Fund controls and
     which are engaged in the same, similar, or related trades or businesses.

If the Fund qualifies as a regulated investment company that is accorded special
tax treatment, the Fund will not be subject to federal income tax on income
distributed in a timely manner to its shareholders in the form of dividends
(including Capital Gain Dividends, as defined below).

     If the Fund failed to qualify as a regulated investment company accorded
special tax treatment in any taxable year, the Fund would be subject to tax on
its taxable income at corporate rates, and all distributions from earnings and
profits, including any distributions of net tax-exempt income and net long-term
capital gains, would be taxable to shareholders as ordinary income. Such
distributions generally would be eligible for the dividends received deduction
in the case of corporate shareholders. In addition, the Fund could be required
to recognize unrealized gains, pay substantial taxes and interest and make
substantial distributions before requalifying as a regulated investment company
that is accorded special tax treatment.


     The Fund intends to distribute at least annually to its shareholders all or
substantially all of its net tax-exempt interest and any investment company
taxable income, and may distribute its net capital gain. The Fund may also
retain for investment its net capital gain. If the Fund does retain any net
capital gain or any investment company taxable income, it will be subject to tax
at regular corporate rates on the amount retained. If the Fund retains any net
capital gain, it may designate the retained amount as undistributed capital
gains in a notice to its shareholders who, if subject to federal income tax on
long-term capital gains, (i) will be required to include in income for federal
income tax purposes, as long-term capital gain, their shares of such
undistributed amount, and (ii) will be entitled to credit their proportionate
shares of the tax paid by the Fund on such undistributed amount against their
federal income tax liabilities, if any, and to claim refunds to the extent the
credit exceeds such liabilities. For federal income tax purposes, the tax basis
of shares owned by a shareholder of the Fund will be increased by an amount
equal under current law to the difference between the amount of undistributed
capital gains included in the shareholder's gross income and the tax deemed paid
by the shareholder under clause (ii) of the preceding sentence.


     Treasury regulations permit a regulated investment company, in determining
its investment company taxable income and net capital gain, to elect to treat
all or part of any net capital loss, any net long-term capital loss or any net
foreign currency loss incurred after October 31 as if it had been incurred in
the succeeding year.

                                       53

<PAGE>

     If the Fund fails to distribute in a calendar year at least an amount equal
to the sum of 98% of its ordinary income for such year and 98% of its capital
gain net income for the one-year period ending October 31 of such year, plus any
retained amount from the prior year, the Fund will be subject to a 4% excise tax
on the undistributed amounts. For these purposes, the Fund will be treated as
having distributed any amount for which it is subject to income tax. A dividend
paid to shareholders in January of a year generally is deemed to have been paid
by the Fund on December 31 of the preceding year, if the dividend was declared
and payable to shareholders of record on a date in October, November or December
of that preceding year. The Fund intends generally to make distributions
sufficient to avoid imposition of the 4% excise tax.

     Fund Distributions. Distributions from the Fund (other than exempt-interest
dividends, as discussed below) will be taxable to shareholders as ordinary
income to the extent derived from investment income and net short-term capital
gains. Distributions of net capital gains (that is, the excess of net gains from
the sale of capital assets held more than one year over net losses from the sale
of capital assets held for not more than one year) properly designated as
capital gain dividends ("Capital Gain Dividends") will be taxable to
shareholders as long-term gain, regardless of how long a shareholder has held
the shares in the Fund.

     The Fund's expenses attributable to earning tax-exempt income do not reduce
its current earnings and profits; therefore, distributions in excess of the sum
of the Fund's net tax-exempt and taxable income may be treated as taxable
dividends to the extent of the Fund's remaining earnings and profits (which
provides the measure of the Fund's dividend-paying capacity for tax purposes).
Distributions in excess of the sum of the Fund's net tax-exempt and taxable
income could occur, for example, if the Fund's book income exceeded the sum of
its net tax-exempt and taxable income. Differences in the Fund's book income and
its net tax-exempt and taxable income may arise from certain of the Fund's
hedging and investment activities. See "--Hedging Transactions" below.


     Exempt-interest dividends. The Fund will be qualified to pay
exempt-interest dividends to its shareholders only if, at the close of each
quarter of the Fund's taxable year, at least 50% of the total value of the
Fund's assets consists of obligations the interest on which is exempt from
federal income tax under Code Section 103(a). Distributions that the Fund
properly designates as exempt-interest dividends are treated as interest
excludable from shareholders' gross income for federal income tax purposes but
may be taxable for federal alternative minimum tax purposes and for state and
local purposes. See "New York Tax Matters." Because the Fund intends to qualify
to pay exempt-interest dividends, the Fund may be limited in its ability to
enter into taxable transactions involving forward commitments, repurchase
agreements, financial futures and options contracts on financial futures,
tax-exempt bond indices and other assets.


     The receipt of exempt-interest dividends may affect the portion, if any, of
a person's Social Security and Railroad Retirement benefits that will be
includable in gross income subject to federal income tax. Up to 85% of Social
Security and Railroad Retirement benefits may be included in gross income in
cases where the recipient's combined income, consisting of adjusted gross income
(with certain adjustments), tax-exempt interest income and one-half of any
Social Security and Railroad Retirement benefits, exceeds an adjusted base
amount ($34,000 for a single individual and $44,000 for individuals filing a
joint return). Shareholders receiving Social Security or Railroad Retirement
benefits should consult their tax advisers.

                                       54

<PAGE>

     Under the Code, the interest on certain "private activity bonds" issued
after August 7, 1986 is treated as a preference item and is (after reduction by
applicable expenses) included in federal alternative minimum taxable income. The
Fund will furnish to shareholders annually a report indicating the percentage of
Fund income treated as a preference item for federal alternative minimum tax
("AMT") purposes. In addition, for corporations, alternative minimum taxable
income is increased by a percentage of the excess of an alternative measure of
income that includes interest on all tax-exempt securities over the amount
otherwise determined to be alternative minimum taxable income. Accordingly, the
portion of the Fund's dividends that would otherwise be tax-exempt to the
shareholders may cause an investor to be subject to the AMT or may increase the
tax liability of an investor who is subject to such tax. As described above, the
portfolio manager will normally avoid investments in bonds potentially
subjecting individuals to the AMT, which generally includes private activity
bonds.

     Legislation has been introduced in recent years that would reinstate a
deductible tax (the "Environmental Tax") imposed through tax years beginning
before 1996 at a rate of 0.12% on a corporation's alternative minimum taxable
income (computed without regard to the AMT net operating loss deduction) in
excess of $2 million. If the Environmental Tax is reinstated, exempt-interest
dividends that are included in a corporate shareholder's alternative minimum
taxable income may subject corporate shareholders of the Fund to the
Environmental Tax.


     The Fund designates distributions made to the share classes as consisting
of a portion of each type of income distributed by the Fund. The portion of each
type of income deemed received by each class of shareholders is equal to the
portion of total Fund distributions received by such class. Thus, the Fund will
designate dividends paid as exempt-interest dividends in a manner that allocates
such dividends between and among the holders of Common Shares and any series of
the Preferred Shares in proportion to the total dividends paid to each class
during or with respect to the taxable year or otherwise as required by
applicable law. Long-term capital gain distributions and other income subject to
regular federal income tax will similarly be allocated between and among the two
(or more) classes.

     Dividends (including Capital Gain Dividends) will be taxable as described
above whether received in cash or in shares. A shareholder whose distributions
are reinvested in shares will be treated as having received a dividend equal to
either (i) the fair market value of the new shares issued to the shareholder, or
(ii) if the shares are trading below net asset value, the amount of cash
allocated to the shareholder for the purchase of shares on its behalf in the
open market.


     Part or all of the interest on indebtedness, if any, incurred or continued
by a shareholder to purchase or carry shares of the Fund paying exempt-interest
dividends is not deductible. The portion of interest that is not deductible is
equal to the total interest paid or accrued on the indebtedness, multiplied by
the percentage of the Fund's total distributions (not including distributions
from net long-term capital gains) paid to the shareholder that are
exempt-interest dividends. Under rules used by the Internal Revenue Service (the
"Service") to determine when borrowed funds are considered used for the purpose
of purchasing or carrying particular assets, the purchase of shares may be
considered to have been made with borrowed funds even though such funds are not
directly traceable to the purchase of shares.

                                       55

<PAGE>

     Under a published position of the Service, a shareholder's interest
deduction generally will not be disallowed if the average adjusted basis of the
shareholder's tax-exempt obligations (including shares of preferred stock) does
not exceed two percent of the average adjusted basis of the shareholder's trade
or business assets (in the case of most corporations) or portfolio investments
(in the case of individuals). Legislation has been introduced in recent years
that would further limit or repeal this two-percent de minimis exception, thus
reducing the total after-tax yield of a shareholder.

In general, exempt-interest dividends, if any, attributable to interest
received on certain private activity obligations and certain industrial
development bonds will not be tax-exempt to any shareholders who are
"substantial users," within the meaning of Section 147(a) of the Code, of the
facilities financed by such obligations or bonds or who are "related persons" of
such substantial users.

     The Fund will inform investors within 60 days of the Fund's fiscal year-end
of the percentage of its income distributions designated as tax-exempt. The
percentage is applied uniformly to all distributions made during the year. The
percentage of income designated as tax-exempt for any particular distribution
may be substantially different from the percentage of the Fund's income that was
tax-exempt during the period covered by the distribution.

     Hedging Transactions. If the Fund engages in hedging transactions,
including hedging transactions in options, futures contracts, and straddles, or
other similar transactions, it will be subject to special tax rules (including
constructive sale, mark-to-market, straddle, wash sale, and short sale rules),
the effect of which may be to accelerate income to the Fund, defer losses to the
Fund, cause adjustments in the holding periods of the Fund's securities, convert
long-term capital gains into short-term capital gains or convert short-term
capital losses into long-term capital losses. These rules could therefore affect
the amount, timing and character of distributions to shareholders. Income earned
as a result of the Fund's hedging activities will not be eligible to be treated
as exempt-interest dividends when distributed to shareholders. The Fund will
endeavor to make any available elections pertaining to such transactions in a
manner believed to be in the best interests of the Fund.


     Certain of the Fund's hedging activities are likely to produce a difference
between its book income and the sum of its net tax-exempt and taxable income. If
the Fund's book income exceeds its net tax-exempt and taxable income, the
distribution (if any) of such excess will be treated as (i) a taxable dividend
to the extent of the Fund's remaining earnings and profits (including earnings
and profits arising from tax-exempt income), (ii) thereafter as a return of
capital to the extent of the recipient's basis in the shares, and (iii)
thereafter as gain from the sale or exchange of a capital asset. If the Fund's
book income is less than its taxable income, the Fund could be required to make
distributions exceeding book income to qualify as a regulated investment company
that is accorded special tax treatment.

     Return of Capital Distributions. If the Fund makes a distribution to a
shareholder in excess of the Fund's current and accumulated earnings and profits
in any taxable year, the excess distribution will be treated as a return of
capital to the extent of such shareholder's tax basis in its shares, and
thereafter as capital gain. A return of capital is not taxable, but it reduces a
shareholder's tax


                                       56

<PAGE>


basis in its shares, thus reducing any loss or increasing any gain on a
subsequent taxable disposition by the shareholder of its shares. Where one or
more such distributions occur in any taxable year of the Fund, the available
earnings and profits will be allocated, first, to the distributions made to the
holders of Preferred Shares, and only thereafter to distributions made to
holders of Common Shares. As a result, the holders of Preferred Shares will
receive a disproportionate share of the distributions treated as dividends, and
the holders of the Common Shares will receive a disproportionate share of the
distributions treated as a return of capital.

     Dividends and distributions on the Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when the Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be required to be
distributed even when the Fund's net asset value also reflects unrealized
losses. Distributions are taxable to a shareholder even if they are paid from
income or gains earned by the Fund prior to the shareholder's investment (and
thus included in the price paid by the shareholders).

     Securities Issued or Purchased at a Discount. The Fund's investment in
securities issued at a discount and certain other obligations will (and
investments in securities purchased at a market discount may) require the Fund
to accrue and distribute income not yet received. In order to generate
sufficient cash to make the requisite distributions, the Fund may be required to
sell securities in its portfolio that it otherwise would have continued to hold.

     Capital Loss Carryover. Distributions from capital gains are generally made
after applying any available capital loss carryovers.

     Sale or Redemption of Shares. The sale, exchange or redemption of Fund
shares may give rise to a gain or loss. In general, any gain or loss realized
upon a taxable disposition of shares will be treated as long-term capital gain
or loss if the shares have been held for more than 12 months. Otherwise the gain
or loss on the taxable disposition of Fund shares will be treated as short-term
capital gain or loss. However, if a shareholder sells shares at a loss within
six months of purchase, any loss will be disallowed for federal income tax
purposes to the extent of any exempt-interest dividends received on such shares.
In addition, any loss realized upon a taxable disposition of shares held for six
months or less but not disallowed as provided in the preceding sentence will be
treated as long-term, rather than short-term, to the extent of any long-term
capital gain distributions received by the shareholder with respect to the
shares. All or a portion of any loss realized upon a taxable disposition of Fund
shares will be disallowed if other shares of the Fund are purchased within 30
days before or after the disposition. In such a case, the basis of the newly
purchased shares will be adjusted to reflect the disallowed loss.

     From time to time the Fund may make a tender offer for its Common Shares.
It is expected that the terms of any such offer will require a tendering
shareholder to tender all Common Shares and dispose of all Preferred Shares,
held, or considered under certain attribution rules of the Code to be held, by
such shareholder. Shareholders who tender all Common Shares and dispose of all
Preferred Shares held, or considered to be held, by them will be treated as
having sold their shares and generally will realize a capital gain or loss. If a
shareholder tenders fewer than all of its Common Shares, or retains a
substantial portion of its Preferred Shares, such shareholder may be treated as
having received a taxable dividend upon the tender of its Common Shares. In such
a case, there is a remote risk that non-tendering shareholders will be treated
as having received taxable distributions from the Fund. Likewise, if the Fund
redeems some but not all of the Preferred Shares held by a Preferred Shareholder
and such shareholder is treated

                                       57

<PAGE>

as having received a taxable dividend upon such redemption, there is a remote
risk that Common Shareholders and non-redeeming Preferred Shareholders will be
treated as having received taxable distributions from the Fund. To the extent
that the Fund recognizes net gains on the liquidation of portfolio securities to
meet such tenders of Common Shares, the Fund will be required to make taxable
distributions to its shareholders, which may in turn require the Fund to make
additional distributions to its Preferred Shareholders, if any.

     Backup Withholding. The Fund generally is required to withhold and remit to
the U.S. Treasury a percentage of the taxable dividends and other distributions
paid to any individual shareholder who fails to properly furnish the Fund with a
correct taxpayer identification number (TIN), who has under-reported dividend or
interest income, or who fails to certify to the Fund that he or she is not
subject to such withholding. The backup withholding tax rate is (i) 30% for
amounts paid during 2002 and 2003, (ii) 29% for amounts paid during 2004 and
2005, and (iii) 28% for amounts paid during 2006 through 2010. The backup
withholding rate will be 31% for amounts paid after December 31, 2010, unless
Congress enacts tax legislation providing otherwise.

     In order for a foreign investor to qualify for exemption from the back-up
withholding tax rates under income tax treaties, the foreign investor must
comply with special certification and filing requirements. Foreign investors in
the Fund should consult their tax advisers in this regard.

     General. The federal income tax discussion set forth above is for general
information only. Prospective investors should consult their tax advisers
regarding the specific federal tax consequences of purchasing, holding, and
disposing of shares of the Fund, as well as the effects of state, local and
foreign tax law and any proposed tax law changes.

     State and City Tax Matters. Tax matters pertaining to New York are set
forth in Appendix B.

                 PERFORMANCE RELATED AND COMPARATIVE INFORMATION

     The Fund may be a suitable investment for a shareholder who is a resident
of New York and thinking of adding bond investments to his portfolio to balance
the appreciated stocks that the shareholder is holding. Although the Fund
currently intends at all times to avoid investments generating income
potentially subjecting individuals to the federal alternative minimum tax, it
may not be successful in doing so. Therefore, Common Shares may not be a
suitable investment for investors who are subject to the federal alternative
minimum tax or who would become subject to such tax by purchasing Common Shares.
The suitability of an investment in Common Shares will depend upon a comparison
of the after-tax yield likely to be provided from the Fund with that from
comparable tax-exempt investments (including those not subject to the
alternative minimum tax), and from comparable fully taxable investments, in
light of each such investor's tax position.

     The Fund may quote certain performance-related information and may compare
certain aspects of its portfolio and structure to other substantially similar
closed-end funds as

                                       58

<PAGE>

categorized by Lipper, Inc. ("Lipper"), Morningstar Inc. or other independent
services. Comparison of the Fund to an alternative investment should be made
with consideration of differences in features and expected performance. The Fund
may obtain data from sources or reporting services, such as Bloomberg Financial
("Bloomberg") and Lipper, that the Fund believes to be generally accurate.

     The Fund, in its advertisements, may refer to pending legislation from time
to time and the possible impact of such legislation on investors, investment
strategy and related matters. This would include any tax proposals and their
effect on marginal tax rates and tax-equivalent yields. At any time in the
future, yields and total return may be higher or lower than past yields and
there can be no assurance that any historical results will continue.

     Past performance is not indicative of future results. At the time Common
Shareholders sell their shares, they may be worth more or less than their
original investment.

     See Appendix C for additional performance related and comparative and other
information.

            CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSEMENT AGENT

     State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, serves as custodian for assets of the Fund. The custodian
performs custodial and fund accounting services.


     PFPC Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809, serves as the
transfer agent, registrar and dividend disbursement agent for the Common Shares,
as well as agent for the Dividend Reinvestment Plan relating to the Common
Shares.


                             INDEPENDENT ACCOUNTANTS

     PricewaterhouseCoopers LLP, 1177 Avenue of the Americas, New York, New York
10036, serves as independent accountants for the Fund. PricewaterhouseCoopers
LLP provides audit services, tax return preparation and assistance and
consultation in connection with review of SEC filings to the Fund.

                                     COUNSEL

     Ropes & Gray, One International Place, Boston, MA 02110, passes upon
certain legal matters in connection with shares offered by the Fund, and also
acts as counsel to the Fund.

                                       59

<PAGE>

                             REGISTRATION STATEMENT

     A Registration Statement on Form N-2, including any amendments thereto,
relating to the shares of the Fund offered hereby, has been filed by the Fund
with the Securities and Exchange Commission (the "SEC"), Washington, D.C. The
Fund's Prospectus and this Statement of Additional Information do not contain
all of the information set forth in the Registration Statement, including any
exhibits and schedules thereto. For further information with respect to the Fund
and the shares offered or to be offered hereby, reference is made to the Fund's
Registration Statement. Statements contained in the Fund's Prospectus and this
Statement of Additional Information as to the contents of any contract or other
document referred to are not necessarily complete and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. Copies of the Registration Statement may be inspected without
charge at the SEC's principal office in Washington, D.C., and copies of all or
any part thereof may be obtained from the SEC upon the payment of certain fees
prescribed by the SEC.

                                       60

<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS



To the Shareholder and Board of Trustees of
PIMCO New York Municipal Income Fund II


        In our opinion, the accompanying statement of assets and liabilities and
related statement of operations present fairly, in all material respects, the
financial position of PIMCO New York Municipal Income Fund II (the "Fund") at
June 19, 2002 and the results of its operations for the one day then ended in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these financial
statements in accordance with auditing standards generally accepted in the
United States of America, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.





PricewaterhouseCoopers LLP
New York, New York
June 20, 2002






<PAGE>




                              FINANCIAL STATEMENTS

                     PIMCO New York Municipal Income Fund II

                       STATEMENT OF ASSETS AND LIABILITIES
                                  June 19, 2002



<TABLE>
<S>                                                                              <C>
Assets:
            Cash                                                                 $100,003
            Receivable from Investment Manager                                     25,000

                  Total Assets                                                    125,003

Liabilities:
            Accrued Organizational Expenses                                        25,000

                  Total Liabilities                                                25,000

Net Assets (6,981 shares of $0.00001 par value shares of beneficial
          interest issued and outstanding; unlimited shares authorized)           100,003


Net asset value per share                                                        $  14.33



                             STATEMENT OF OPERATIONS
                           ONE DAY ENDED JUNE 19, 2002


Investment Income                                                                $      0

Organizational Expenses                                                            25,000
Less: Reimbursement from Investment Manager                                       (25,000)
Net Expenses                                                                            0

Net Investment Income                                                            $      0
</TABLE>


<PAGE>

NOTES TO FINANCIAL STATEMENTS:

1. Organization

PIMCO New York Municipal Income Fund II (the "Fund") was organized as a
Massachusetts business trust on March 29, 2002. The Fund has had no operations
to date other than matters relating to its organization and registration as a
non-diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended, and the sale and issuance to PIMCO Funds
Advisors LLC (the "Investment Manager"), an indirect, wholly-owned subsidiary of
Allianz AG, of 6,981 shares of beneficial interest at an aggregate purchase
price of $100,003. The Investment Manager has agreed to reimburse the amount by
which the aggregate of all of the Fund's organizational expenses and all
offering costs (other than the sales load) exceeds $0.03 per share.

2. Accounting Policies

The preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual results could
differ from these estimates.

3. Investment Manager and Related Parties

The Fund has entered into an Investment Management Agreement (the "Agreement")
with the Investment Manager to serve as investment manager to the Fund. Pursuant
to the Agreement, the Fund pays the Investment Manager an annual management fee,
payable monthly, at the annual rate of 0.65% of the Fund's average daily net
assets, inclusive of net assets attributable to any preferred shares that may be
issued. The Investment Manager has retained its affiliate, Pacific Investment
Management Company LLC ("PIMCO"), to manage the Fund's investments. The
Investment Manager (not the Fund) will pay a portion of the fees it receives as
Investment Manager to PIMCO in return for its services, at the maximum annual
rate of 0.45% of the Fund's average daily net assets, inclusive of any net
assets attributable to any preferred shares issued.

In order to reduce Fund expenses, the Investment Manager has contractually
agreed to waive a portion of its management fees at the annual rate of 0.15% of
the Fund's average daily net assets, inclusive of net assets attributable to any
preferred shares that may be issued, from the commencement of operations through
June 30, 2007, and for a declining amount thereafter through June 30, 2009.

4. Federal Income Taxes

The Fund intends to comply with the requirements of the Internal Revenue Code of
1986, as amended, applicable to regulated investment companies. Accordingly, no
provision for U.S. federal income taxes is required. In addition, by
distributing substantially all of its ordinary income and long-term capital
gains, if any, during each calendar year, the Fund intends not to be subject to
U.S. federal excise tax.

5. Contingent Receivable from Investment Manager

In the event that the public offering of the Fund does not occur, the Investment
Manager has agreed to reimburse the Fund for all organizational expenses.

                                       63

<PAGE>

                                   APPENDIX A

                        DESCRIPTION OF SECURITIES RATINGS

     The Fund's investments may range in quality from securities rated in the
lowest category to securities rated in the highest category (as rated by
Moody's, S&P or Fitch or, if unrated, determined by PIMCO to be of comparable
quality). The percentage of the Fund's assets invested in securities in a
particular rating category will vary. The following terms are generally used to
describe the credit quality of debt securities:

     High Quality Debt Securities are those rated in one of the two highest
rating categories (the highest category for commercial paper) or, if unrated,
deemed comparable by PIMCO.

     Investment Grade Debt Securities are those rated in one of the four highest
rating categories or, if unrated, deemed comparable by PIMCO.

     Below Investment Grade, High Yield Securities (the "Junk Bonds") are those
rated lower than Baa by Moody's, BBB by S&P and BBB by Fitch and comparable
securities. They are deemed predominately speculative with respect to the
issuer's ability to repay principal and interest.

     Following is a description of Moody's, S&P's and Fitch's rating categories
applicable to debt securities.

Moody's Investors Service, Inc.

     Corporate and Municipal Bond Ratings

     Aaa: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

     Aa: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present that
make the long-term risks appear somewhat larger than with Aaa securities.

     A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate, but elements may be present
that suggest a susceptibility to impairment sometime in the future.

                                      A-1

<PAGE>

     Baa: Bonds which are rated Baa are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

     Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

     B: Bonds which are rated B generally lack characteristics of a desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

     Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

     Ca: Bonds which are rated Ca represent obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.

     C: Bonds which are rated C are the lowest rated class of bonds and issues
so rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

     Moody's bond ratings, where specified, are applicable to financial
contracts, senior bank obligations and insurance company senior policyholder and
claims obligations with an original maturity in excess of one year. Obligations
relying upon support mechanisms such as letter-of-credit and bonds of indemnity
are excluded unless explicitly rated. Obligations of a branch of a bank are
considered to be domiciled in the country in which the branch is located.

     Unless noted as an exception, Moody's rating on a bank's ability to repay
senior obligations extends only to branches located in countries which carry a
Moody's Sovereign Rating for Bank Deposits. Such branch obligations are rated at
the lower of the bank's rating or Moody's Sovereign Rating for the Bank Deposits
for the country in which the branch is located. When the currency in which an
obligation is denominated is not the same as the currency of the country in
which the obligation is domiciled, Moody's ratings do not incorporate an opinion
as to whether payment of the obligation will be affected by the actions of the
government controlling the currency of denomination. In addition, risk
associated with bilateral conflicts between an investor's home country and
either the issuer's home country or the country where an issuer branch is
located are not incorporated into Moody's ratings.

     Moody's makes no representation that rated bank obligations or insurance
company obligations are exempt from registration under the U.S. Securities Act
of 1933 or issued in conformity with any other applicable law or regulation. Nor
does Moody's represent any specific bank or insurance company obligation is
legally enforceable or a valid senior obligation of a rated issuer.

                                      A-2

<PAGE>

     Moody's applies numerical modifiers, 1, 2, and 3 in each generic rating
classified from Aa through Caa in its corporate bond rating system. The modifier
1 indicates that the security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and the modifier 3
indicates that the issue ranks in the lower end of its generic rating category.

     Corporate Short-Term Debt Ratings

     Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year, unless explicitly noted.

     Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment ability of rated issuers:

     PRIME-1: Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
leading market positions in well-established industries; high rates of return on
funds employed; conservative capitalization structure with moderate reliance on
debt and ample asset protection; broad margins in earnings coverage of fixed
financial charges and high internal cash generation; and well-established access
to a range of financial markets and assured sources of alternate liquidity.

     PRIME-2: Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.

     PRIME-3: Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

     NOT PRIME: Issuers rated Not Prime do not fall within any of the Prime
rating categories.

Standard & Poor's Ratings Services

     Issue Credit Rating Definitions

     A Standard & Poor's issue credit rating is a current opinion of the
creditworthiness of an obligor with respect to a specific financial obligation,
a specific class of financial obligations, or a specific financial program
(including ratings on medium term note programs and commercial

                                      A-3

<PAGE>

paper programs). It takes into consideration the creditworthiness of guarantors,
insurers, or other forms of credit enhancement on the obligation and takes into
account the currency in which the obligation is denominated. The issue credit
rating is not a recommendation to purchase, sell, or hold a financial
obligation, inasmuch as it does not comment as to market price or suitability
for a particular investor.

     Issue credit ratings are based on current information furnished by the
obligors or obtained by Standard & Poor's from other sources it considers
reliable. Standard & Poor's does not perform an audit in connection with any
credit rating and may, on occasion, rely on unaudited financial information.
Credit ratings may be changed, suspended, or withdrawn as a result of changes
in, or unavailability of, such information, or based on other circumstances.

     Issue credit ratings can be either long-term or short-term. Short-term
ratings are generally assigned to those obligations considered short term in the
relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days -- including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. The result is a dual
rating, in which the short-term rating addresses the put feature, in addition to
the usual long-term rating. Medium-term notes are assigned long-term ratings.

     Issue credit ratings are based, in varying degrees, on the following
considerations: likelihood of payment -- capacity and willingness of the obligor
to meet its financial commitment on an obligation in accordance with the terms
of the obligation; nature of and provisions of the obligation; protection
afforded by, and relative position of, the obligation in the event of
bankruptcy, reorganization, or other arrangement under the laws of bankruptcy
and other laws affecting creditors' rights.

     The issue rating definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.

     Corporate and Municipal Bond Ratings

     Investment Grade

     AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.

     AA: An obligation rated AA differs from the highest rated obligations only
in small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

                                      A-4

<PAGE>

     A: An obligation rated A is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

     BBB: An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

     Speculative Grade

     Obligations rated BB, B, CCC, CC, and C are regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal. BB indicates the least degree of speculation and C
the highest. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major exposures
to adverse conditions.

     BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

     B: An obligation rated B is more vulnerable to nonpayment than obligations
rated BB, but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

     CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

     CC: An obligation rated CC is currently highly vulnerable to nonpayment.

     C: A subordinated debt or preferred stock obligation rated C is CURRENTLY
HIGHLY VULNERABLE to nonpayment. The C rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action taken, but payments
on this obligation are being continued. A C also will be assigned to a preferred
stock issue in arrears on dividends or sinking fund payments, but that is
currently paying.

     CI: The rating CI is reserved for income bonds on which no interest is
being paid.

     D: An obligation rated D is in payment default. The D rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such

                                      A-5

<PAGE>

grace period. The D rating also will be used upon the filing of a bankruptcy
petition or the taking of a similar action if payments on an obligation are
jeopardized.

     Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

     Provisional ratings: The letter "p" indicates that the rating is
provisional. A provisional rating assumes the successful completion of the
project being financed by the debt being rated and indicates that payment of
debt service requirements is largely or entirely dependent upon the successful
and timely completion of the project. This rating, however, while addressing
credit quality subsequent to completion of the project, makes no comment on the
likelihood of, or the risk of default upon failure of, such completion. The
investor should exercise his own judgment with respect to such likelihood and
risk.

     r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk -- such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.

     The absence of an "r" symbol should not be taken as an indication that an
obligation will exhibit no volatility or variability in total return.

     N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.

     Debt obligations of issuers outside the United States and its territories
are rated on the same basis as domestic corporate and municipal issues. The
ratings measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

     Commercial Paper Rating Definitions

     A Standard & Poor's commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Ratings are graded into several categories, ranging from A for the
highest quality obligations to D for the lowest. These categories are as
follows:

     A-1: A short-term obligation rated A-1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.

                                      A-6

<PAGE>

     A-2: A short-term obligation rated A-2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

     A-3: A short-term obligation rated A-3 exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

     B: A short-term obligation rated B is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet its
financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation.

     C: A short-term obligation rated C is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation.

     D: A short-term obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.

     A commercial paper rating is not a recommendation to purchase, sell or hold
a security inasmuch as it does not comment as to market price or suitability for
a particular investor. The ratings are based on current information furnished to
Standard & Poor's by the issuer or obtained from other sources it considers
reliable. Standard & Poor's does not perform an audit in connection with any
rating and may, on occasion, rely on unaudited financial information. The
ratings may be changed, suspended, or withdrawn as a result of changes in or
unavailability of such information.

Fitch, Inc.

     A brief description of the applicable Fitch, Inc. ("Fitch") ratings symbols
and meanings (as published by Fitch) follows:

     Long-Term Credit Ratings

     Investment Grade

     AAA: Highest credit quality. 'AAA' ratings denote the lowest expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

                                      A-7

<PAGE>

     AA: Very high credit quality. 'AA' ratings denote a very low expectation of
credit risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

     A: High credit quality. 'A' ratings denote a low expectation of credit
risk. The capacity for timely payment of financial commitments is considered
strong. This capacity may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case for higher ratings.

     BBB: Good credit quality. 'BBB' ratings indicate that there is currently a
low expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

     Speculative Grade

     BB: Speculative. 'BB' ratings indicate that there is a possibility of
credit risk developing, particularly as the result of adverse economic change
over time; however, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

     B: Highly speculative. 'B' ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

     CCC, CC, C: High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A 'CC' rating indicates that default of some
kind appears probable. 'C' ratings signal imminent default.

     DDD, DD, D: Default. The ratings of obligations in this category are based
on their prospects for achieving partial or full recovery in a reorganization or
liquidation of the obligor. While expected recovery values are highly
speculative and cannot be estimated with any precision, the following serve as
general guidelines. 'DDD' obligations have the highest potential for recovery,
around 90%-100% of outstanding amounts and accrued interest. 'DD' indicates
potential recoveries in the range of 50%-90%, and 'D' the lowest recovery
potential, i.e., below 50%. Entities rated in this category have defaulted on
some or all of their obligations. Entities rated 'DDD' have the highest prospect
for resumption of performance or continued operation with or without a formal
reorganization process. Entities rated 'DD' and 'D' are generally undergoing a
formal reorganization or liquidation process; those rated 'DD' are likely to
satisfy a higher portion of their outstanding obligations, while entities rated
'D' have a poor prospect for repaying all obligations.

                                       A-8

<PAGE>

     Short-Term Credit Ratings

     A short-term rating has a time horizon of less than 12 months for most
obligations, or up to three years for U.S. public finance securities, and thus
places greater emphasis on the liquidity necessary to meet financial commitments
in a timely manner.

     F1: Highest credit quality. Indicates the strongest capacity for timely
payment of financial commitments; may have an added "+" to denote any
exceptionally strong credit feature.

     F2: Good credit quality. A satisfactory capacity for timely payment of
financial commitments, but the margin of safety is not as great as in the case
of the higher ratings.

     F3: Fair credit quality. The capacity for timely payment of financial
commitments is adequate; however, near-term adverse changes could result in a
reduction to non-investment grade.

     B: Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.

     C: High default risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

     D: Default. Denotes actual or imminent payment default.

     "+" or "-" may be appended to a rating to denote relative status within
major rating categories. Such suffixes are not added to the 'AAA' long-term
rating category, to categories below 'CCC', or to short-term ratings other than
'F1'.

     'NR' indicates that Fitch does not rate the issuer or issue in question.

     'Withdrawn': A rating is withdrawn when Fitch deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.

     'Rating Watch': Ratings are placed on RatingWatch to notify investors that
there is a reasonable probability of a rating change and the likely direction of
such change. These are designated as "Positive", indicating a potential upgrade,
"Negative", for a potential downgrade, or "Evolving", if ratings may be raised,
lowered or maintained. Rating Watch is typically resolved over a relatively
short period.

     A Rating Outlook indicates the direction a rating is likely to move over a
one to two year period. Outlooks may be positive, stable, or negative. A
positive or negative Rating Outlook does not imply a rating change is
inevitable. Similarly, companies whose outlooks are 'stable' could be downgraded
before an outlook moves to positive or negative if circumstances warrant such an
action. Occasionally, Fitch may be unable to identify the fundamental trend. In
these cases, the Rating Outlook may be described as evolving.

                                      A-9

<PAGE>

                                   APPENDIX B

                         FACTORS PERTAINING TO NEW YORK

FACTORS PERTAINING TO NEW YORK




       The following information is a brief summary of factors affecting the
economy of New York City (the "City") or New York State (the "State" or "New
York"). Other factors will affect other issuers. The summary is based primarily
upon information in the State's Annual Information Statement, as updated, and
the most recently publicly available offering statement relating to debt
offerings of the City and the City's 2002-2006 Financial Plan, however, such
information has not been updated. The Fund has not independently verified this
information.

       The State, some of its agencies, instrumentalities and public authorities
and certain of its municipalities and the City have sometimes faced serious
financial difficulties that could have an adverse effect on the sources of
payment for or the market value of the New York Municipal Bonds in which the
Fund invests.

NEW YORK CITY


       General. The events of September 11, 2001 had a significant impact upon
the City economy. The City expects, based on actions and statements of the U.S.
Congress and the President and measures taken by the State, that it will be
fully reimbursed for the cost to recover from, clean up and repair the
consequences of the World Trade Center attack. However, prior to September 11,
the City's economy had been weakening primarily as the result of the downturn in
the securities and financial services industries. The loss of over seventy
thousand jobs in the City due to September 11, which are not expected to be
recovered until 2005, will produce additional adverse budgetary pressures
including increases to later year budget gaps and reductions to State surpluses
that decrease the ability of the State to provide financial support to the City.
The City of New York Executive Budget Fiscal Year 2003 released by the Mayor of
the City on April 17, 2002 (the "City Executive Budget"), projects total revenue
to be lost to the City as a result of September 11 during those fiscal years
will be $3.9 billion and that expenses over the same period have increased by
$6.1 billion from projections made prior to September 11. On June 19, 2002, the
Mayor and the City Council announced a budget agreement which, while it restored
some of the Funds cut in the City Executive Budget, adopted the City Executive
Budget with no material changes.


                                      B-1

<PAGE>


         More than any other New York municipality, the fiscal health of the
City depends upon the fiscal health of the State, which has projected slower
growth and warned of the risk of a downturn. As a result of September 11, the
City Executive Budget assumes reduced economic activity in the second half of
calendar year 2001, job and income losses through the first half of 2002 and a
moderate recovery thereafter. The City Executive Budget also projects declines
in revenues from forecasts made prior to September 11 for fiscal years 2002
through 2006 as a result of reduced economic activity.


         For each of the 1981 through 2001 fiscal years, the City had an
operating surplus, before discretionary transfers, and achieved balanced
operating results as reported in accordance with generally accepted accounting
principles ("GAAP") after discretionary transfers. Historically, the City has
been required to close substantial gaps between forecast revenues and forecast
expenditures in order to maintain balanced operating results. Particularly given
the uncertain impact of September 11 and the expected reduction in economic
activity in the City, there can be no assurance that the City will continue to
maintain balanced operating results as required by State law without reductions
in City services or entitlement programs to tax or other revenue increases that
could adversely affect the City's economic base.


         For fiscal year 2001 the City had an operating surplus of $3.0 billion.
On April 17, 2002, the Mayor of the City released the City Executive Budget for
fiscal year 2003 (July 1, 2002 to June 30, 2003). The City Executive Budget is
$41.9 billion and incorporates a number of steps to close a projected $5.0
billion budget gap, including City agency cuts ranging up to 36%, staffing
changes requiring union consent, stretching out some elements of the City's four
year construction plan to five years, debt restructuring and asset sales and
proposed State and federal initiatives to generate $2.2 billion of gap closing
actions in fiscal year 2003 and an aggregate of $5.5 billion in fiscal years
2004 through 2006. The Mayor has also proposed that the City issue $1.5 billion
of its general obligation bonds in fiscal year 2003 to help close the budget
gap. While the City Executive Budget does not project any need for deficit
financing in later fiscal years, the inability of the City to close significant
outyear budget gaps could require such financing, which might affect the rating
of the City's general obligation bonds.

         City's Financing Program. Implementation of the City Executive Budget
is in part dependent upon the City's ability to market its securities
successfully in the public credit markets. The City's financing program for
fiscal years 2002 through 2006 contemplates the issuance of $13.7 billion of
general obligation bonds, $5.9 billion of bonds and Recovery Bonds described
below to be issued by the New York City Transitional Finance Authority (the
"Transitional Finance Authority"), $2.0 billion of bonds to be issued by TSASC,
Inc., a not-for-profit corporation empowered to issue tax-exempt debt backed by
tobacco settlement revenues, and $10.0 billion of bonds and notes to be issued
by New York City Municipal Water Finance Authority (the "Water Authority"). In
1997, the State created the Transitional Finance Authority, to assist the City
in keeping the City's indebtedness within the forecast level of the
constitutional restrictions on the amount of debt the City is authorized to
incur. The City had faced limitations on its borrowing capacity after 1998 under
the State's constitution that would have prevented it from borrowing additional
funds, as a result of the decrease in real estate values within the City. The
Transitional Finance Authority is authorized to issue up to $11.5 billion of
bonds. In addition, the City issues revenue notes and tax anticipation notes to
finance seasonal working capital requirements. The success of projected public
sales of these bonds and notes will be subject to prevailing market


                                       B-2

<PAGE>

conditions. The City's planned capital and operating expenditures are dependent
upon the sale of its general obligation bonds and notes, and the Water Authority
and Transitional Finance Authority bonds. In September 2001, the state
legislature granted the City an additional $2.5 billion in debt-incurring
capacity to pay costs related to September 11 through bonds issued by the
Transitional Finance Authority ("Recovery Bonds"), $1.0 billion of which were
issued on October 4, 2001 and the balance of which will be issued in fiscal year
2002-2003.

         2001 Fiscal Year. For the 2001 fiscal year (July 1, 2000 - June 30,
2001) the City had an operating surplus of $3.0 billion, before discretionary
and other transfers, and achieved balanced operating results, after
discretionary and other transfers, in accordance with GAAP. The 2001 fiscal year
was the twenty-first year that the City has achieved an operating surplus,
before discretionary and other transfers, and balanced operating results, after
discretionary and other transfers.


         2003-2006 Financial Plan. Pursuant to the laws of the State, the Mayor
is responsible for preparing the City's financial plan, including the City's
current financial plan for the 2003 through 2006 fiscal years, which is included
in the City Executive Budget (the "City Financial Plan"). The projections set
forth in the City Financial Plan are based on various assumptions and
contingencies that are uncertain and may not materialize. Changes in major
assumptions could significantly affect the City's ability to balance its budget
as required by State law and to meet annual cash flow and financing
requirements.

         The City Financial Plan reflects certain extraordinary actions
necessitated by September 11 and projects a budget surplus of $322 million for
the 2002 fiscal year and budget gaps of $5.2 billion, $5.7 billion and $6.0
billion, respectively, for the 2004, 2005 and 2006 fiscal years prior to any gap
closing actions. Some of the gap closing measures proposed in the City Financial
Plan for fiscal year 2003 have recurring effects and are projected to reduce the
fiscal year 2004, 2005 and 2006 budget gaps to $2.7 billion, $3.1 billion and
$3.6 billion, respectively. The Mayor proposes to close these outyear gaps
through unspecified additional City agency cuts, federal and State initiatives
and other actions. As noted above, the City Council and the Mayor have reached a
budget agreement which adopts the City Executive Budget with no material
changes.


         The City Financial Plan includes a proposed discretionary transfer in
the 2002 fiscal year of $322 million to pay debt service due in the fiscal year
2003. In addition, the City Financial Plan reflects a proposed cigarette tax
increase resulting in increased revenues totaling $249 million in fiscal year
2003 and declining yearly to a total increase of $241 million in fiscal year
2006 which is subject to State legislative approval. The Mayor has proposed
restoring the City's stock transfer tax, which in the past generated $114
million annually which also must be approved by the State legislature.


         In order to address the possibility that some of the gap closing
actions specified in the City Executive Budget may not be effected or that the
projected 2003 gap will widen, the City Executive Budget includes a Contingency
Cut Plan of $500 million of expense reductions in uniformed agencies, education
and other services.


                                       B-3

<PAGE>


         Assumptions. The City Financial Plan is based on numerous assumptions,
including the impact of September 11 on the City's economy, the general
condition of the City's and the region's economies and the receipt of
economically sensitive tax revenues in the amounts projected and reimbursement
by the federal government and State of expenditures necessitated by September
11. The City Financial Plan is subject to various other uncertainties and
contingencies relating to, among other factors: (i) the extent, if any, to which
wage increases for City employees exceed the annual wage costs assumed for the
2002 through 2006 fiscal years; (ii) interest earnings and wage projections
underlying projections of the City's required pension fund contributions; (iii)
the willingness and ability of the State and Federal governments to provide the
aid and enact the revenue enhancing or expenditure relief initiatives
contemplated by the City Financial Plan and to take various other actions to
assist the City in its gap closing actions; (iv) the ability of Health and
Hospitals Corporation, the Board of Education and other agencies to maintain
balanced budgets; (v) the impact on City revenues and expenditures of Federal
and State welfare reform and any future legislation affecting Medicare or other
entitlement programs; (vi) the ability of the City to control expenditures and
implement cost reduction and gap closing initiatives identified in the City
Financial Plan for the 2003 fiscal year and proposed but unspecified for later
years; (vii) the City's ability to market its securities successfully in the
public credit markets; (viii) the impact of conditions in the real estate market
on real estate tax revenues; (ix) the sale of OTB in fiscal year 2004, which
requires State legislative approval; and (x) unanticipated expenditures that may
be incurred as a result of the need to maintain the City's infrastructure or
future terrorist acts.

         The City Financial Plan reflects the sudden economic downturn as the
result of September 11 in the last half of 2001 and assumes job and income
losses in the first half of 2002 but moderate growth in the balance of 2002
resulting in a flat City economy for calendar year 2002. The City Financial Plan
forecasts a steady recovery thereafter. The City does not expect to recover all
of the jobs lost as a result of September 11 until 2005. Given the uncertain
impact of September 11 on the City's economy, including the loss of jobs and
business, impact on tourism in the City and the slowdown in the securities
industry, there can be no assurance that the economic projections included in
the City Financial Plan are accurate or that the tax revenues projected in the
Financial Plan to be received will be received in the amounts anticipated.

         Municipal Unions. The Mayor's gap closing proposals in fiscal year 2003
include a slight reduction of the City's workforce through attrition, severance
and early retirement, including a reduction of 1,000 in uniformed police
officers that will be offset by hiring of civilians by the Police Department.
These police department and other staff reduction proposals may require union
consents. While the City has established a Reserve for Collective Bargaining,
the terms of wage settlements could be determined through the impasse procedure
in the New York City Collective Bargaining Law, which can impose a binding
settlement that substantially increases reserves established by the City.

         Intergovernmental Aid. The City depends on the State for aid both to
enable the City to balance its budget and to meet its cash requirements. There
can be no assurance that State aid to the City will be maintained at amounts
currently projected or interim appropriations enacted; or that the State will
not reduce or delay aid any of which could have adverse effects on the City's
cash flow or expenditures. In addition, the Federal budget negotiation process
could result in reductions or delays in the receipt of Federal grants which
would have additional adverse effects on the City's cash flow or revenues. The
City is particularly dependent upon the federal


                                       B-4

<PAGE>

government and the State to reimburse it for expenditures relating to September
11. While both the federal government and the State have publicly supported the
City and promised to make funds available to fund recovery, clean-up and repairs
relating to September 11, there can be no assurance that budget constraints or
the other priorities, including future terrorist attacks will not interfere or
prevent delivery of such aid.

         Outstanding Indebtedness. As of December 31, 2001, the City and the
Municipal Assistance Corporation for the City of New York had respectively
approximately $27.3 and $2.2 billion of net outstanding long-term debt.

         Litigation. The City is currently a defendant in a significant number
of lawsuits. While the ultimate outcome and fiscal impact, if any, on the
proceedings and claims are not currently predictable, adverse determination in
certain of them might have a material adverse effect upon the City's ability to
carry out the City Financial Plan. As of June 30, 2001 claims were pending
against the City, for which the City has estimated it may potentially incur
liability of $4.2 billion. The City currently is a defendant in a proceeding
relating to the New York City Teachers' Retirement System in which damages in
excess of $250 million are sought. In fiscal year 2000-2001 the City paid $594.8
million with respect to judgments and claims and projects such payments will
total $409.6 million and $418.7 million in fiscal years 2001-2002 and 2002-2003,
respectively.


         Ratings. As of May 23, 2002, Moody's rated the City's outstanding
general obligation bonds A2, Standard and Poor's rated such bonds A and Fitch
rated such bonds A+. There can be no assurance that, after the review of the
State Budget and the agreement between the Mayor and the City Council regarding
the City Executive Budget, their ratings of the City's general obligations bonds
will be maintained. Such ratings reflect only the view of Moody's, Standard and
Poor's and Fitch, from which an explanation of the significance of such ratings
may be obtained. There is no assurance that such ratings will continue for any
given period of time or that they will not be revised downward or withdrawn
entirely. Any such downward revision or withdrawal could have an adverse effect
on the market prices of City bonds and could increase the City's borrowing
costs.


NEW YORK STATE

         2000-2001 Fiscal Year. The State finished its 2000-2001 fiscal year
with a surplus of $2.7 billion.

         2001-2002 Fiscal Year. The revised cash-basis 2001-2002 State Financial
Plan issued by the Division of the Budget on January 22, 2002 projects that the
State will end its 2001-2002 fiscal year with a surplus of $2.1 billion.


         2002-2003 Fiscal Year. The Governor released his 2002-2003 Executive
Budget (the "State Executive Budget") on January 22, 2002, which contained
financial projections for the State's 2001-2002 through 2004-2005 fiscal years,
and a proposed Capital Program and Financing Plan for the 2002-2003 through
2006-2007 fiscal years. The State Executive Budget projected a total budget



                                       B-5

<PAGE>


gap of $6.8 billion in the 2001-2002 and 2002-2003 fiscal years.

         On May 15, 2002, the Governor and legislative leaders announced that
they had come to an agreement on a final balanced 2002-2003 State Budget (the
"State Budget"). The agreement includes actions to close the budget gap
previously identified in the State Executive Budget plus an additional $1.4
billion gap identified in March and April 2002. Under the State Budget,
taxpayer- supported General Fund spending falls by nearly $1.0 billion, or 2.6
percent. General Fund spending will total $40.2 billion. All Funds spending will
increase by less than 1 percent (0.8%) from that proposed in the State Executive
Budget and will total $89.6 billion. This represents a 6 percent annual increase
reflecting $2.5 billion in increased Federal aid. State Funds will total $59.5
billion, a 4.4 percent annual increase.

         The State Budget includes a series of one-time actions to close this
budget gap. These actions included using $1.2 billion of available cash reserves
and other fund balances; implementing a tax amnesty program; offering early
retirement to state workers; and converting hard dollar capital financing to
bonding while reducing overall capital authorizations. The State's Tax
Stabilization Reserve Fund, a fund to address unforeseen budget needs, will be
maintained at $710 million. A $1.0 billion tax cut is included in the State
Budget targeted to job creation, victims of September 11, economic incentives to
lower Manhattan and senior citizens. The State proposes to eliminate 5,000
positions through the early retirement initiative.

         The State Executive Budget, however, projected potential budget gaps of
$2.8 billion and $3.3 billion, in fiscal years 2003-2004 and 2004-2005,
respectively.

          The most significant risks to the State's financial plan set forth in
the State Executive Budget are the rate of layoffs related to September 11, and
the impact of the event upon the City and the personal income statewide. In
addition, the occurrence of other terrorist attacks whether within or outside of
New York could have a significant adverse effect on the State's economy. The
volatility of the financial markets even before September 11 and its impact upon
financial sector compensation and capital gains recognition by investors also
represent a significant risk to the State's financial plan, as set forth in the
State Executive Budget.


         Owing to these and other factors, the State may face substantial
potential budget gaps in future years resulting from a significant disparity
between tax revenues from lower receipts and the spending required to maintain
State programs at mandated levels. Any such recurring imbalance would be
exacerbated by the use by the State of nonrecurring resources to achieve
budgetary balance in a particular fiscal year. To correct any recurring
budgetary imbalance, the State would need to take significant actions to align
recurring receipts and disbursements in future fiscal years.


         Capital Spending and Financing. Under the State law, the Governor is
required to submit a Five-Year Capital Program and Financing Plan ("Capital
Plan") annually. The proposed 2002-2003 through 2006-2007 fiscal year Capital
Plan provides for capital spending of $5.0 billion in the 2002-2003 fiscal year
to be financed through general obligation, authority and state bonds and
available resources. General obligation bonds are backed by the full faith and
credit of the State. As of March 31, 2001, $4.4 billion of State general
obligation bonds were outstanding. Also as of such date, $4.7 billion of bonds
issued by the Local Governmental Assistance Corporation, an entity established
to fund assistance to localities in earlier years when


                                       B-6

<PAGE>

the State was running budget deficits, were outstanding. Various state
authorities had $27.9 billion of indebtedness outstanding in the form of bonds,
lease financings and other financing arrangements. This state authority
indebtedness is not backed by the full faith and credit of the State.

         Litigation. The State is currently a defendant in a significant number
of lawsuits. Such litigation includes, but is not limited to, claims asserted
against the State arising from alleged torts, alleged breaches of contracts,
condemnation proceedings and other alleged violations of State and Federal laws.
State programs, primarily Medicaid and mental health programs are frequently
challenged on State and Federal constitutional grounds. Several Native American
groups have commenced litigation against New York claiming the rights to
thousands of acres of land seized in the eighteenth and nineteenth centuries.
Adverse developments in legal proceedings or the initiation of new proceedings
could affect the ability of the State to maintain a balanced State Financial
Plan in any given fiscal year. There can be no assurance that an adverse
decision in one or more legal proceedings would not exceed the amount the State
reserves for the payment of judgments or materially impair the State's financial
operations. With respect to pending and threatened litigation, the State
reported in its Annual Information Statement dated October 2, 2001 its estimate
of $730 million for awarded and anticipated unfavorable judgments, of which $242
million was expected to be paid within the 2001-2002 fiscal year.


         Other Localities. Certain localities in addition to the City could have
financial problems leading to requests for additional State assistance during
the State's 2002-2003 fiscal year and thereafter. The potential impact on the
State of such actions by localities is not included in the State Budget.


         Fiscal difficulties experienced in Nassau County resulted in the
creation of the Nassau County Interim Finance Authority (the "Authority") in
2000. The Authority is charged with oversight of the fiscal affairs of Nassau
County. The State paid $25 million in assistance to Nassau County for the
2001-2002 fiscal year and the Governor has proposed assistance of $50 million in
the Executive Budget. The Authority as of January 22, 2002 had issued $436
million in bonds and $690 million in bond anticipation notes.

         Ratings. Moody's has given the State's general obligation bonds a
rating of A2, Standard and Poor's had given the bonds a rating of AA, and Fitch
had given the bonds a rating of AA. Such ratings reflect only the view of
Moody's and Standard and Poor's from which an explanation of the significance of
such ratings may be obtained. There is no assurance that such ratings will
continue for any given period of time or that they will not be revised downward
or withdrawn entirely. Any such downward revision or withdrawal could have an
adverse effect on the market prices of State bonds and could increase the
State's borrowing costs.

NEW YORK TAX MATTERS

     The following discussion of New York income tax matters is based upon the
advice of Edwards & Angell, LLP, special counsel to the Fund.

     The following is a general, abbreviated summary of certain provisions of
the applicable New York tax law as presently in effect as it directly governs
the taxation of New York resident individual, corporate and unincorporated
business holders of Common Shares of the Fund. This summary does not address the
taxation of other shareholders nor does it discuss any local taxes, other than
New York City taxes, that may be applicable. These provisions are subject to
change by legislative or administrative action, and any such change may be
retroactive with respect to Fund transactions. The following is based on the
assumptions that the Fund will qualify under Subchapter M of the Code as a
regulated investment company, that it will satisfy the conditions which will
cause the Fund's distributions to qualify as exempt-interest dividends to
shareholders, and that it will distribute all interest and dividends received to
the Fund's shareholders. The Fund will be subject to the New York Business
Corporation franchise tax and the New York City general corporation tax only if
it has a sufficient nexus with New York State or New York City. If it is subject
to such taxes, it does not expect to pay a material amount of either tax.
Distributions by the Fund that are attributable to interest on any obligation of
New York and its political subdivisions or to interest on obligations of U.S.
territories and possessions that are exempt from state taxation under federal
law will not be subject to the New York State personal income tax or the New
York City personal income or unincorporated business taxes. All other
distributions, including distributions attributable to interest on obligations
of the United States or its instrumentalities and distributions attributable to
capital gains, will be subject to the New York State personal income tax and the
New York City personal income and unincorporated business taxes.

     All distributions from the Fund, regardless of source, will increase the
taxable base of shareholders subject to the New York Business Corporation
franchise tax or the New York City

                                       B-7

<PAGE>

general corporation tax. Gain from the sale, exchange, or other disposition of
Common Shares of the Fund will be subject to the New York State personal income
and franchise taxes and the New York City personal income, unincorporated
business, and general corporation taxes. Common Shares of the Fund may be
subject to New York State estate tax if owned by a New York decedent at the time
of death. Common Shares of the Fund will not be subject to property taxes
imposed by New York State or City. Interest on indebtedness incurred to
purchase, or continued to carry, Common Shares of the Fund generally will not be
deductible for New York State or New York City personal income tax purposes.

                                       B-8

<PAGE>

                                   APPENDIX C

            PERFORMANCE RELATED AND COMPARATIVE AND OTHER INFORMATION

     From time to time, the Fund, the Manager and/or PIMCO may report to
shareholders or to the public in advertisements concerning the performance of
the Manager and/or PIMCO as adviser to clients other than the Fund, or on the
comparative performance or standing of the Manager and/or PIMCO in relation to
other money managers. The Manager and/or PIMCO also may provide current or
prospective private account clients, in connection with standardized performance
information for the Fund, performance information for the Fund gross of fees and
expenses for the purpose of assisting such clients in evaluating similar
performance information provided by other investment managers or institutions.
Comparative information may be complied or provided by independent ratings
services or by news organizations. Any performance information, whether related
to the Fund, the Manager or PIMCO, should be considered in light of the Fund's
investment objective and policies, characteristics and quality of the Fund, and
the market conditions during the time period indicated, and should not be
considered to be representative of what may be achieved in the future.
Performance information for the Fund may be compared to various unmanaged
indexes.

     Organized in 1971, PIMCO is one of the nation's premier bond managers and
investment management leaders, providing investment management and advisory
services to private accounts of institutional and individual clients and to
mutual funds. As of the date of this Statement of Additional Information, PIMCO
is one of America's largest active money managers, with over $254 billion in
assets under management and a client list that includes 61 of the 200 largest
corporations in America. PIMCO's bond team of 152 bond professionals is headed
by PIMCO founder and Chief Investment Officer Bill Gross.

     Mr. Gross and the PIMCO bond team were named Morningstar's "Fixed Income
Manager of the Year" for 1998 and 2000. Each year beginning in 1988,
Morningstar, Inc. has named a "Manager of the Year" in the following three
categories: domestic stock, fixed-income and international stock. According to
Morningstar, the award winners are chosen based upon Morningstar's own research
and in-depth evaluation by its senior editorial staff. Morningstar states that
"the award recognizes portfolio managers who demonstrate excellent investment
skill and the courage to differ from consensus. Not only should they have a
great year, but they must also have the commitment to deliver outstanding
long-term performance to shareholders." With respect to PIMCO's award in 2000,
Morningstar cited, among other things, the decision made by Bill Gross and the
bond team to increase exposure to long-term U.S. Treasury bonds and
mortgage-related securities, and to decrease exposure to corporate bonds.

Proven Investment Approach/Time-Tested Process

     PIMCO has developed a distinctive approach to managing bonds, not only
focusing on income but also seeking to preserve and enhance the value of its
portfolios. PIMCO has extensive proprietary analytical and research
capabilities. PIMCO's approach was first applied to taxable bond investments in
1971 and has been applied since 1998 to dedicated municipal bond portfolios. A
fundamental aspect of this approach is the use of multiple strategies that seek
to enhance value and reduce portfolio risk, rather than relying on a limited set
of strategies for success. The Fund will also be able to draw on PIMCO's
broad-ranging, fixed-income expertise and extensive resources.

At the heart of this process is the firm's annual Secular Forum--a three-day
event bringing PIMCO's team of bond experts, led by Bill Gross, together with
some of the country's top thinkers in economics, demographics and other key
disciplines. The result is PIMCO's long-term ("secular") outlook, which helps
guide the firm's investment decisions over the years to come. In addition, the
PIMCO team meets quarterly to discuss how this long-range outlook applies to the
shorter term (3-12 months).

Municipal Bond Expertise

     The individual portfolio manager of the Fund will be Mark McCray, Executive
Vice President and head of municipal bond management at PIMCO. He joined the
firm in 2000 from Goldman Sachs, where he was co-head of municipal bond trading.
Working closely with Mr. McCray will be PIMCO's municipal bond team. The team
includes 12 investment professionals with a combined 154 years of investment
experience.

The Benefits of Investing in a Closed-End, Exchange-Traded Fund/Convenience and
Flexibility

     Investing in a closed-end municipal bond fund offers the potential for
higher tax-exempt yield, and the stock exchange listing is designed to provide
flexibility and promote potential liquidity, and to give shareholders convenient
access to daily share prices through electronic services and/or in newspaper
stock tables. And, since closed-end portfolios are not subject to the daily cash
flow swings of open-end funds, their structure may present a more favorable
platform for the manager to achieve greater tax-exempt income and enhanced
portfolio value.

     The Fund's expected issuance of Preferred Shares and related leverage
offers the potential for enhanced yield and higher tax-free income.

In-House Credit Research

     PIMCO conducts its own independent credit analysis, rather than relying
exclusively on the findings of rating agencies. The firm focuses its research on
individual issues and sectors it expects to exhibit improving credit profiles
that are not fully reflected in the current credit premiums or where it
estimates the credit spreads more than compensate for the estimated credit and
liquidity risks.


                                      C-1

<PAGE>

An Opportune Time to Invest

Municipal Bond Yields at High Levels/Higher After-Tax Income Potential


     Certain municipal bonds currently offer attractive tax-equivalent yields
relative to the yields of U.S. Treasury bonds of the same maturity, especially
in the intermediate- and long-term segments of the market. The following chart
provides a comparison of the tax-equivalent yields of tax-exempt AAA-rated
General Obligation (G.O.) bonds of varying maturities vs. the yields of U.S.
Treasury bonds, indicating that the G.O. bonds offered higher after-tax income
to certain investors. Tax equivalent yields are based on the highest federal tax
rate of 38.6%. Data as of 4/30/02.

Fully Tax Equivalent Basis
     ASSUMPTIONS:
     Federal income tax                                38.6%

- ---------------------------------------------------------------------------
                          Tax-equivalent yields        Taxable yields of
    Maturity (Years)     of AAA-rated G.O. bonds      U.S. Treasury Bonds
===========================================================================
           1                        3.09                     2.26
           2                        4.02                     3.23
           3                        4.69                     3.68
           4                        5.11                     4.15
           5                        5.55                     4.41
           6                        5.94                     4.67
           7                        6.24                     4.88
           8                        6.48                     4.99
           9                        6.64                     5.08
          10                        6.81                     5.09
          11                        7.00                     5.19
          12                        7.21                     5.29
          13                        7.39                     5.40
          14                        7.61                     5.50
          15                        7.74                     5.60
          16                        7.85                     5.62
          17                        7.98                     5.65
          18                        8.08                     5.67
          19                        8.16                     5.69
          20                        8.22                     5.71
          21                        8.27                     5.70
          22                        8.32                     5.69
          23                        8.36                     5.68
          24                        8.37                     5.66
          25                        8.39                     5.65
          26                        8.40                     5.64
          27                        8.42                     5.63
          28                        8.44                     5.62
          29                        8.45                     5.61
          30                        8.45                     5.59

     Source: Thomson Municipal Market Data. The chart above shows yield curves
plotting the (i) "tax-equivalent" yields of AAA-rated National General
Obligation (G.O.) bonds and (ii) the taxable yields of U.S. Treasury bonds, over
a range of maturities for each issue of 1 to 30 years. Yield information is
provided as of April 30, 2002. The "tax-equivalent" yields shown for the G.O.
bonds, which are tax-exempt investments, reflect their actual tax-exempt yields,
adjusted upward to reflect the yields that a taxable investment would have to
provide in order to generate the same income (on an after-tax basis) as the
tax-exempt investment. The tax-equivalent yields are calculated assuming the
highest federal tax rate of 38.6%, and do not take into account applicable state
taxes. Investors in the Fund are likely to pay taxes at rates different from
those used to determine the tax-equivalent yields. The lower your combined
federal and state tax rate, the less advantage you gain from investing in a
tax-free investment vehicle. The yields shown do not take into account, among
other things, the effects of capital gains taxes. U.S. Treasury bonds offer a
government guarantee as to timely payment of interest and repayment of principal
on maturity; G.O. bonds and other municipal securities are not guaranteed by the
U.S. Government and are subject to default. Only a small percentage, if any, of
the Fund's portfolios may consist of G.O. bonds of the type represented in the
chart. The Fund will invest in other kinds of municipal securities, and may
invest in securities that are not exempt from federal or state income tax
(although they do not intend to do so under normal circumstances). Accordingly,
the graph is not intended to indicate or predict a Fund's yield or performance.
The information provided does not predict what the tax-equivalent yields of G.O.
bonds or the yields of U.S. Treasury bonds will be in the future; the yield
curves are likely to change in future periods. For example, changes in interest
rates and future federal tax legislation could adversely affect the yields of
G.O. and other municipal securities relative to U.S. Treasury bonds and other
fixed income securities. The yields reflected in the graph do not reflect the
deduction of any management fees, account charges or other fee and expenses that
will apply to the Fund. Past performance is no guarantee of future results.

     To equal an investor's tax free yield of 5.50%, a person in the 35.0%
federal tax bracket would need to find a taxable investment yielding 8.46% to
provide the same amount of after-tax income. To equal a New York investor's tax
free yield of 5.50%, a person in the 39.45% combined federal and state tax
bracket would need to find a taxable investment yielding 9.08% to provide the
same amount of after-tax income, and a person in the 41.53% combined federal,
state and city tax bracket would need to find a taxable investment yielding
9.41% to provide the same amount of after-tax income. To equal a California
investor's tax free yield of 5.50%, a person in the 41.05% combined federal and
state tax bracket would need to find a taxable investment yielding 9.33% to
provide the same amount of after-tax income.


                                      C-2

<PAGE>


Positive Environment for Leveraged Funds

     In 2001, with the U.S. economy officially in recession, the Federal Reserve
drove short-term interest rates to their lowest level in forty years. Although
the Fed may raise interest rates in future periods, these cuts have generally
created a steeper yield curve, which currently provides a favorable environment
for leveraged funds.

What Tax-Free Income Could Mean to You

     The chart below will assist you in more easily comparing municipal
investments, such as the Fund, with taxable investments. It is designed to show
you how much income you would have to receive from a taxable investment to earn
as much as you would by investing in a tax-free municipal bonds.

     Funds investing in bonds issued by a single state attempt to provide income
that is free from both federal and state income taxes for residents in that
state. This may be especially attractive for residents of high income tax states
like California and New York. For example, to equal a California investor's
tax-free yield of 7.00%, a person in the 36.51% combined federal and state tax
bracket would need to find a taxable investment yielding 11.03% to provide the
same amount of after-tax income.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
    A tax-exempt yield of
                                  6.00%            6.50%           7.00%           7.50%           8.00%
- -----------------------------------------------------------------------------------------------------------------
<S>                               <C>              <C>             <C>             <C>             <C>
 Combined Tax Brackets            Equals a taxable investment yield of
- -----------------------------------------------------------------------------------------------------------------
 Federal Only                     Tax Free
- -----------------------------------------------------------------------------------------------------------------
 30.00%                            8.57%            9.29%          10.00%          10.71%          11.43%
- -----------------------------------------------------------------------------------------------------------------
 35.00%                            9.23%           10.00%          10.77%          11.54%          12.31%
- -----------------------------------------------------------------------------------------------------------------
 38.60%                            9.77%           10.59%          11.40%          12.21%          13.03%
- -----------------------------------------------------------------------------------------------------------------

 Federal & California Double Tax-Free
- -----------------------------------------------------------------------------------------------------------------
 36.51%                            9.45%           10.24%          11.03%          11.81%          12.60%
- -----------------------------------------------------------------------------------------------------------------
 41.05%                           10.18%           11.03%          11.87%          12.72%          13.57%
- -----------------------------------------------------------------------------------------------------------------
 44.31%                           10.77%           11.67%          12.57%          13.47%          14.37%
- -----------------------------------------------------------------------------------------------------------------

 Federal & New York (State) Double Tax-Free
- -----------------------------------------------------------------------------------------------------------------
 34.80%                            9.20%            9.97%          10.74%          11.50%          12.27%
- -----------------------------------------------------------------------------------------------------------------
 39.45%                            9.91%           10.73%          11.56%          12.39%          13.21%
- -----------------------------------------------------------------------------------------------------------------
 42.81%                           10.49%           11.37%          12.24%          13.11%          13.99%
- -----------------------------------------------------------------------------------------------------------------

 Federal & New York (State & City)

- -----------------------------------------------------------------------------------------------------------------
 37.04%                            9.53%           10.32%          11.12%          11.91%          12.71%
- -----------------------------------------------------------------------------------------------------------------
 41.53%                           10.26%           11.12%          11.97%          12.83%          13.68%
- -----------------------------------------------------------------------------------------------------------------
 44.77%                           10.86%           11.77%          12.67%          13.58%          14.48%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>

     The tax-free yields used in this table are for illustration only, and do
not represent or predict the tax-free yield of the Fund. The table reflects 2002
marginal federal and state tax rates. The combined federal and state tax rates
shown here are among the highest possible for each state. There are lower
combined rates. Residents of states other than California and New York pay taxes
to their states at different rates than those shown above. The lower your
combined federal and state tax rate, the less advantage you gain from investing
in tax-free investment vehicles. A federal tax benefit is provided for the state
income tax paid. The tables do not take into account, among other things, the
effects of the capital gains taxes or possible federal alternative minimum
taxes. In addition, the Fund may invest in securities that are not exempt from
federal or state income taxes, although they do not intend to do so under normal
circumstances. Consult your financial advisor for more information.


                                      C-3

<PAGE>

                           PART C - OTHER INFORMATION

Item 24: Financial Statements and Exhibits

      1. Financial Statements:


            Registrant has not conducted any business as of the date of this
      filing, other than in connection with its organization. Financial
      Statements indicating that the Registrant has met the net worth
      requirements of Section 14(a) of the 1940 Act are filed herewith as part
      of the Statement of Additional Information.


               2. Exhibits:

a.1   Agreement and Declaration of Trust dated March 29, 2002.(1)



a.2   Amended and Restated Agreement and Declaration Trust dated June 18, 2002,
      filed herewith.



b.1   Bylaws of Registrant dated March 29, 2002.(1)



b.2   Amended and Restated Bylaws of Registrant dated June 18, 2002, filed
      herewith.


c.    None.

d.1   Article III (Shares) and Article V (Shareholders' Voting Powers and
      Meetings) of the Amended and Restated Agreement and Declaration of Trust,
      filed herewith.



d.2   Article 10 (Shareholders' Voting Powers and Meetings) of the Amended and
      Restated Bylaws of Registrant, filed herewith.



d.3   Form of Share Certificate of the Common Shares, filed herewith.



e.    Terms and Conditions of Dividend Reinvestment Plan, filed herewith.


f.    None.

g.1   Investment Management Agreement between Registrant and PIMCO Funds
      Advisors LLC dated June 18, 2002, filed herewith.



g.2   Portfolio Management Agreement between PIMCO Funds Advisors LLC and
      Pacific Investment Management Company LLC dated June 18, 2002, filed
      herewith.



h.1   Form of Underwriting Agreement, filed herewith.



h.2   Form of Master Selected Dealer Agreement, filed herewith.



h.3   Form of Master Agreement Among Underwriters, filed herewith.


h.4   Form of Additional Compensation Agreement, filed herewith.

i.    None.


j.    Form of Custodian Agreement between Registrant and State Street Bank &
      Trust Co., filed herewith.



k.1   Form of Transfer Agency Services Agreement between Registrant and
      PFPC Inc., filed herewith.


                                       C-1

<PAGE>


k.2    Organizational and Offering Expenses Reimbursement Agreement between
       Registrant and PIMCO Funds Advisors LLC dated June 18, 2002, filed
       herewith.



k.3    Fee Waiver Agreement between Registrant and PIMCO Funds Advisors LLC
       dated June 18, 2002, filed herewith.



k.4    Fee Waiver Agreement between PIMCO Funds Advisors LLC and Pacific
       Investment Management Company LLC dated June 18, 2002, filed herewith.



l.     Opinion and consent of Ropes & Gray, filed herewith.


m.     None.


n.     Consent of PricewaterhouseCoopers LLP, filed herewith.


o.     None.

p.     Subscription Agreement of PIMCO Funds Advisors LLC dated June 18, 2002,
       filed herewith.


q.     None.

r.1    Code of Ethics of Registrant dated June 18, 2002, filed herewith.



r.2    Code of Ethics of PIMCO Funds Advisors LLC dated January 1, 2002, filed
       herewith.



r.3    Code of Ethics of Pacific Investment Management Company LLC dated
       December 31, 2002, filed herewith.



s.     Power of Attorney for each of Messrs. Belica, Connor, Dalessandro,
       Kertess, and Sullivan, filed herewith.

- --------------------------



       (1)  Incorporated by reference to the Registrant's Initial Registration
            Statement on Form N-2, File No. 333-86284, filed on April 15, 2002.

                                       C-2

<PAGE>

Item 25: Marketing Arrangements


     See Sections 3(p), 4(h), 5(i), 8 and 9 of Exhibit h.1 of Item 24 of this
Registration Statement and Sections 8, 9 and 15 of Exhibit h.3 of Item 24 of
this Registration Statement.


Item 26: Other Expenses of Issuance and Distribution

         Securities and Exchange Commission Fees               $ 12,420*
         National Association of Securities Dealers, Inc. Fees   14,500*
         Printing and engraving expenses                        115,000*
         Legal fees                                              46,500*
         New York Stock Exchange listing fees                    61,800*
         Accounting expenses                                     12,000*
         Transfer agent fees                                      3,000*
         Marketing expenses                                       7,500*
         Miscellaneous expenses                                   2,780*
                                                               --------

             Total                                              275,000*

         PIMCO Funds Advisors LLC has agreed to pay the amount by which the
         aggregate of all the Fund's organizational expenses and all offering
         costs (other than the sales load) exceed $0.03 per share.

         *Estimated expense.



Item 27: Persons Controlled by or under Common Control with Registrant

      Not applicable.

Item 28: Number of Holders of Securities

      At June 25, 2002



                                               Number of
               Title of Class               Record Holders
               --------------               --------------

         Common Shares, par value $0.00001       1


Item 29: Indemnification

     Reference is made to Article VIII, Sections 1 through 4, of the
Registrant's Amended and Restated Agreement and Declaration of Trust, which is
incorporated by reference herein.



     Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act"), may be permitted to trustees, officers and
controlling persons of the Registrant by the Registrant pursuant to the Trust's
Amended and Restated Agreement and Declaration of Trust, its Amended and
Restated Bylaws or otherwise, the Registrant is aware that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and, therefore, is unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by trustees, officers or
controlling persons of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustees, officers or controlling
persons in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.


                                       C-3

<PAGE>

Item 30: Business and Other Connections of Investment Adviser

     Descriptions of the business of PIMCO Funds Advisors LLC, the Registrant's
investment manager, and Pacific Investment Management Company LLC, the
Registrant's portfolio manager, are set forth under the captions "Investment
Manager" and "Portfolio Manager" under "Management of the Fund" in both the
prospectus and Statement of Additional Information forming part of this
Registration Statement. The following sets forth business and other connections
of each director and executive officer (and persons performing similar
functions) of PIMCO Funds Advisors LLC and Pacific Investment Management Company
LLC.

                            PIMCO Funds Advisors LLC
                           1345 Avenue of the Americas
                               New York, NY 10105

Name                   Position with Advisor      Other Connections
- ---------------------- -------------------------- ------------------------------

Larry A. Altadonna     Vice President


Andrew Bocko           Senior Vice President and  Senior Vice President,
                       Director of IT             PIMCO Funds Advisors LLC,
                                                  Allianz Dresdner Asset
                                                  Management U.S. Equities LLC,
                                                  PIMCO Funds Advisors LLC,
                                                  Allianz Dresdner Asset
                                                  Management of America L.P.


Tim Clark              Managing Director

Cindy Columbo          Vice President

Patrick Coyne          Vice President

David C. Flattum       Managing Director,         Managing Director, General
                       General Counsel            Counsel and Head of Corporate
                                                  Functions, Allianz Dresdner
                                                  Asset Management of America
                                                  L.P., Managing Director,
                                                  Allianz Dresdner Asset
                                                  Management U.S. Equities LLC,
                                                  Allianz Hedge Fund Partners
                                                  Holding L.P., Nicholas
                                                  Applegate Capital Management
                                                  Holdings, PIMCO Advisory
                                                  Services Holdings LLC





Derek Hayes            Senior Vice President

Steve Jobe             Senior Vice President

Alan Kwan              Vice President

John C. Maney          Executive Vice President   Executive Vice President and
                       and Chief Financial        Chief Financial Officer,
                       Officer                    Allianz Dresdner Asset
                                                  Management of America L.P.,
                                                  Chief Financial Officer,
                                                  PIMCO Funds Advisors LLC,
                                                  Allianz Dresdner Asset
                                                  Management U.S. Equities LLC,
                                                  Cadence Capital Management
                                                  LLC, NFJ Investment Group
                                                  L.P., OCE Distributors LLC,
                                                  OpCap Advisors LLC,
                                                  Oppenheimer Capital LLC,
                                                  Pacific Investment Management
                                                  Company LLC, PIMCO Allianz
                                                  Advisors LLC, PIMCO CD
                                                  Distributors LLC, PIMCO Equity
                                                  Advisors LLC, PIMCO Equity
                                                  Partners LLC, PIMCO Funds
                                                  Advertising Agency Inc., PIMCO
                                                  Funds Distributors LLC,
                                                  Allianz Private Client
                                                  Services LLC, StocksPLUS
                                                  Management Inc. and Value
                                                  Advisors LLC



Vinh T. Nguyen         Vice President and         Vice President and Controller,
                       Controller                 PIMCO Funds Advisors LLC,
                                                  Allianz Dresdner Asset
                                                  Management of America L.P.,
                                                  Allianz Dresdner Asset
                                                  Management U.S. Equities LLC,
                                                  Cadence Capital Management
                                                  LLC, NFJ Investment Group
                                                  L.P., OCE Distributors LLC,
                                                  OpCap Advisors LLC,
                                                  Oppenheimer Capital LLC,
                                                  Pacific Investment Management
                                                  Company LLC, PIMCO Allianz
                                                  Advisors LLC, PIMCO CD
                                                  Distributors LLC, PIMCO Equity
                                                  Advisors LLC,


                                       C-4

<PAGE>
                                                  PIMCO Equity Partners LLC,
                                                  PIMCO Funds Advertising Agency
                                                  Inc., PIMCO Funds Distributors
                                                  LLC, Allianz Private Client
                                                  Services LLC, StocksPLUS
                                                  Management Inc. and Value
                                                  Advisors LLC

Francis C. Poli        Executive Vice President,  Chief Legal and Compliance
                       Director of Compliance     Officer, PIMCO Funds Advisors
                       and Assistant Secretary    LLC, Allianz Dresdner Asset
                                                  Management of America L.P.,
                                                  Allianz Dresdner Asset
                                                  Management U.S. Equities LLC,
                                                  Allianz Hedge Fund Partners
                                                  L.P., Allianz Private Client
                                                  Services LLC, Cadence Capital
                                                  Management LLC, NFJ Investment
                                                  Group L.P., OCC Distributors
                                                  LLC, OpCap Advisors LLC,
                                                  Oppenheimer Capital LLC, PIMCO
                                                  Advisory Services Holdings
                                                  LLC, PIMCO Allianz Advisors
                                                  LLC, PIMCO CD Distributors
                                                  LLC, PIMCO Equity Advisors LLC


Bob Rokose             Vice President and
                       Assistant Controller


Newton B. Schott, Jr.  Managing Director,         Vice President, PIMCO Allianz
                       Chief Legal Officer        Advisors LLC, Executive Vice
                       and Secretary              President, Chief Legal Officer
                                                  and Secretary, PIMCO Funds
                                                  Advertising Agency Inc., PIMCO
                                                  Funds Distributors LLC


Brian S. Shlissel     Senior Vice President


Stewart A. Smith       Vice President and         Secretary, PIMCO Funds
                       Assistant Secretary        Advisors LLC, Allianz Dresdner
                                                  Asset Management of America
                                                  L.P., Allianz Dresdner Asset
                                                  Management U.S. Equities LLC,
                                                  Alianz Hedge Fund Partners
                                                  L.P., Allianz Private Client
                                                  Services LLC, Cadence Capital
                                                  Management LLC, NFJ Investment
                                                  Group L.P., PIMCO Advisory
                                                  Services Holding LLC, PIMCO
                                                  Allianz Advisors, PIMCO CD
                                                  Distributors and PIMCO Equity
                                                  Advisors LLC, Assistant
                                                  Secretary, Oppenheimer Capital
                                                  LLC, OpCap Advisors and OCC
                                                  Distributors LLC

Stephen J. Treadway    Managing Director and      Chairman, President and Chief
                       Chief Executive Officer    Executive Officer, PIMCO
                                                  Funds Advertising Agency
                                                  Inc.; Managing Director and
                                                  Chief Executive Officer,
                                                  PIMCO Funds Distributors LLC,
                                                  Managing Director, PIMCO
                                                  Allianz Advisors LLC, Allianz
                                                  Private Client Services LLC,
                                                  Allianz Dresdner Asset
                                                  Management of America L.P.


James G. Ward          Executive Vice President   Executive Vice President
                       and Director of Human      Allianz Asset Management of
                       Resources                  America L.P., Director of
                                                  Human Resources, Allianz Asset
                                                  Management U.S. Equities LLC,
                                                  PIMCO Funds Distributors LLC


Michael B. Zuckerman   Vice President

                                       C-5

<PAGE>

                    Pacific Investment Management Company LLC
                                    ("PIMCO")
                       840 Newport Center Drive, Suite 300
                             Newport Beach, CA 92660

Name                          Business and Other Connections
- ----------------------------- --------------------------------------------------

Arnold, Tammie J.             Executive Vice President, PIMCO

Benz, William R. II           Managing Director, Executive Committee Member,
                              PIMCO

Bhansali, Vineer              Executive Vice President, PIMCO

Brynjolfsson, John B.         Executive Vice President, PIMCO

Burns, R. Wesley              Managing Director, PIMCO; President and Trustee of
                              PIMCO Funds and PIMCO Variable Insurance Trust;
                              President and Director of PIMCO Commercial
                              Mortgage Securities Trust, Inc.; Director, PIMCO
                              Funds: Global Investors Series plc and PIMCO
                              Global Advisors (Ireland) Limited

Cupps, Wendy W.               Executive Vice President, PIMCO

Dialynas, Chris P.            Managing Director, PIMCO

El-Erian, Mohamed A.          Managing Director, PIMCO

Gross, William H.             Managing Director and Executive Committee Member,
                              PIMCO; Director and Vice President, StocksPLUS
                              Management, Inc.; Senior Vice President of PIMCO
                              Funds and PIMCO Variable Insurance Trust

Hague, John L.                Managing Director, PIMCO

Hally, Gordon C.              Executive Vice President, PIMCO

Hamalainen, Pasi M.           Managing Director, PIMCO

Harris, Brent R.              Managing Director and Executive Committee Member,
                              PIMCO; Director and Vice President, StocksPLUS
                              Management, Inc.; Trustee and Chairman of PIMCO
                              Funds and PIMCO Variable Insurance Trust; Director
                              and Chairman, PIMCO Commercial Mortgage Securities
                              Trust, Inc.; Managing Director, PIMCO Specialty
                              Markets LLC

Hinman, David C.              Executive Vice President, PIMCO

Hodge, Douglas M.             Executive Vice President, PIMCO; Director,
                              PIMCO JAPAN LTD

Holden, Brent L.              Managing Director, PIMCO

Isberg, Margaret E.           Managing Director, PIMCO; Senior Vice President of
                              PIMCO Funds


Keller, James M.              Managing Director, PIMCO

Kennedy, Raymond G.           Managing Director, PIMCO


Loftus, John S.               Managing Director, PIMCO; Senior Vice President of
                              PIMCO Funds; Vice President and Assistant
                              Secretary, StocksPLUS Management, Inc.

Mariappa, Sudesh N.           Executive Vice President, PIMCO


                                       C-6

<PAGE>

Mather, Scott A.              Executive Vice President, PIMCO; Senior Vice
                              President, PIMCO Commercial Mortgage Securities
                              Trust, Inc.

McCray, Mark V.               Executive Vice President, PIMCO

McCulley, Paul A.             Managing Director, PIMCO

McDevitt, Joseph E.           Executive Vice President, PIMCO; Director and
                              Chief Executive Officer, PIMCO Europe Ltd

Meiling, Dean S.              Managing Director, PIMCO

Monsan, Kristen S.            Executive Vice President, PIMCO

Muzzy, James F.               Managing Director, PIMCO; Director and Vice
                              President, StocksPLUS Management, Inc.; Senior
                              Vice President, PIMCO Variable Insurance Trust;
                              Vice President of PIMCO Funds; Director, PIMCO
                              Europe Ltd., PIMCO JAPAN LTD., PIMCO Asia Pte
                              Ltd., PIMCO Australia Pty Ltd.

Otterbein, Thomas J.          Executive Vice President, PIMCO

Phansalkar, Mohan V.          Executive Vice President, Secretary and Chief
                              Legal Officer, PIMCO; Vice President and
                              Secretary, StocksPLUS Management, Inc.

Podlich, William F.           Managing Director, PIMCO

Powers, William C.            Managing Director and Executive Committee Member,
                              PIMCO; Senior Vice President, PIMCO Commercial
                              Mortgage Securities Trust, Inc.

Schmider, Ernest L.           Managing Director, PIMCO

Simon, W. Scott               Executive Vice President, PIMCO

Thomas, Lee R.                Managing Director, PIMCO

Thompson, William S.          Managing Director and Executive Committee Member,
                              PIMCO; Director and President, StocksPLUS
                              Management, Inc.; Senior Vice President of PIMCO
                              Variable Insurance Trust; Vice President of PIMCO
                              Funds and PIMCO Commercial Mortgage Securities
                              Trust, Inc.

Trosky, Benjamin L.           Managing Director, PIMCO; Senior Vice President,
                              PIMCO Commercial Mortgage Securities Trust, Inc.

Weil, Richard M.              Managing Director, Chief Operating Officer and
                              Executive Committee Member, PIMCO

Wood, George H.               Executive Vice President, PIMCO

Wyman, Charles C.             Executive Vice President, PIMCO

                                       C-7

<PAGE>

Item 31: Location of Accounts and Records

      The account books and other documents required to be maintained by the
Registrant pursuant to Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder will be maintained at the offices of State Street Bank &
Trust Co., 225 Franklin Street, Boston, MA 02110 and/or PFPC Inc., 400 Bellevue
Parkway, Wilmington, Delaware 19809.

Item 32: Management Services

      Not applicable.

Item 33: Undertakings

      1. Registrant undertakes to suspend the offering of its Common Shares
until it amends the prospectus filed herewith if (1) subsequent to the effective
date of its registration statement, the net asset value declines more than 10
percent from its net asset value as of the effective date of the registration
statement, or (2) the net asset value increases to an amount greater than its
net proceeds as stated in the prospectus.

      2. Not applicable.

      3. Not applicable.

      4. Not applicable.

      5. The Registrant undertakes that:

            a. For purposes of determining any liability under the Securities
      Act of 1933, the information omitted from the form of prospectus filed as
      part of this registration statement in reliance upon Rule 430A and
      contained in the form of prospectus filed by the Registrant under Rule
      497(h) under the Securities Act of 1933 shall be deemed to be part of this
      registration statement as of the time it was declared effective; and

            b. For the purpose of determining any liability under the Securities
      Act of 1933, each post-effective amendment that contains a form of
      prospectus shall be deemed to be a new registration statement relating to
      the securities offered therein, and the offering of the securities at that
      time shall be deemed to be the initial bona fide offering thereof.

      6. The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days of receipt
of a written or oral request, any Statement of Additional Information.

                                     Notice

      A copy of the Agreement and Declaration of Trust of PIMCO New York
Municipal Income Fund II (the "Fund"), together with all amendments thereto, is
on file with the Secretary of State of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the Fund by
any officer of the Fund as an officer and not individually and that the
obligations of or arising out of this instrument are not binding upon any of the
Trustees of the Fund or shareholders of the Fund individually, but are binding
only upon the assets and property of the Fund.


                                      C-8

<PAGE>

                                   SIGNATURES

   Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of New York, and the State of New York on the
25th day of June, 2002.

                                         PIMCO New York Municipal Income Fund II

                                             /s/ Stephen J. Treadway
                                         By: _________________________________
                                             Stephen J. Treadway,
                                             President

   Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
                 Name                           Capacity                 Date
                 ----                           --------                 ----

<S>                                    <C>                        <C>
/s/ Stephen J. Treadway                 President                 June 25, 2002
_________________________________
Stephen J. Treadway

Paul Belica*                            Trustee                   June 25, 2002
- ---------------------------------
Paul Belica*

Robert E. Connor*                       Trustee                   June 25, 2002
- ---------------------------------
Robert E. Connor*

John J. Dalessandro II*                 Trustee                   June 25, 2002
- ---------------------------------
John J. Dalessandro II

Hans W. Kertess*                        Trustee                   June 25, 2002
- ---------------------------------
Hans W. Kertess

R. Peter Sullivan III*                  Trustee                   June 25, 2002
- ---------------------------------
R. Peter Sullivan III

/s/ Brian S. Shlissel                   Treasurer and Principal   June 25, 2002
_________________________________       Financial and Accounting
Brian S. Shlissel                       Officer

                                        *By: /s/ Stephen P. Treadway
                                             -----------------------------
                                             Stephen P. Treadway,
                                             Attorney-In-Fact
                                             Date: June 25, 2002
</TABLE>


<PAGE>

                               INDEX TO EXHIBITS

Exhibit      Exhibit Name
- -------      ------------

   a.2       Amended and Restated Agreement and Declaration of Trust dated June
             18, 2002.

   b.2       Amended and Restated Bylaws of Registrant dated June 18, 2002.

   d.3       Form of Share Certificate of the Common Shares.

   e.        Terms and Conditions of Dividend Reinvestment Plan.

   g.1       Investment Management Agreement between Registrant and PIMCO Funds
             Advisors LLC dated June 18, 2002.

   g.2       Portfolio Management Agreement between PIMCO Funds Advisors LLC and
             Pacific Investment Management Company LLC dated June 18, 2002

   h.1       Form of Underwriting Agreement.

   h.2       Form of Master Selected Dealer Agreement.

   h.3       Form of Master Agreement Among Underwriters.

   h.4       Form of Additional Compensation Agreement.

   j.        Form of Custodian Agreement between Registrant and State Street
             Bank & Trust Co.

   k.1       Form of Transfer Agency Services Agreement between Registrant and
             PFPC Inc.

   k.2       Organizational and Offering Expenses Reimbursement Agreement
             between Registrant and PIMCO Funds Advisors LLC dated June 18,
             2002.

   k.3       Fee Waiver Agreement between Registrant and PIMCO Funds Advisors
             LLC dated June 18, 2002.

   k.4       Fee Waiver Agreement between PIMCO Funds Advisors LLC and Pacific
             Investment Management Company LLC dated June 18, 2002.

   l.        Opinion and consent of Ropes and Gray.

   n.        Consent of PricewaterhouseCoopers LLP.

   p.        Subscription Agreement of PIMCO Funds Advisors LLC dated June 18,
             2002.

   r.1       Code of Ethics of Registrant dated June 18, 2002.

   r.2       Code of Ethics of PIMCO Funds Advisors LLC dated January 1, 2002.

   r.3       Code of Ethics of Pacific Investment Management Company LLC dated
             December 31, 2001.

   s.        Power of Attorney for each of Messrs. Belica, Connor, Dalessandro,
             Kertess, and Sullivan.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(A)(2)
<SEQUENCE>3
<FILENAME>dex99a2.txt
<DESCRIPTION>AMENDED AND RESTATED DECLARATION OF TRUST
<TEXT>
<PAGE>

                                                                     Exhibit a.2

                     PIMCO NEW YORK MUNICIPAL INCOME FUND II

                              AMENDED AND RESTATED
                       AGREEMENT AND DECLARATION OF TRUST


                                  June 18, 2002

<PAGE>

                     PIMCO NEW YORK MUNICIPAL INCOME FUND II


                            ------------------------

                              AMENDED AND RESTATED
                       AGREEMENT AND DECLARATION OF TRUST


                            ------------------------

     AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST made this 18/th/
day of June, 2002, by the Trustees hereunder, and by the holders of shares of
beneficial interest to be issued hereunder as hereinafter provided, amending and
restating the Agreement and Declaration of Trust made at Boston, Massachusetts
the 29/th/ day of March, 2002, for purposes of eliminating references to the
sole initial trustee and adding additional trustees as signatories hereto.

     WHEREAS, pursuant to Article IX, Section 7 of the Agreement and Declaration
of Trust, the Trustees of the Trust and the holders of all of the beneficial
interest of the Trust have determined that the Agreement and Declaration of
Trust should be amended and restated in its entirety as hereinafter set forth.

     NOW, THEREFORE, this Amended and Restated Agreement and Declaration of
Trust shall take effect as of the time of execution by a majority of the
Trustees of the Trust and shall be filed with the Secretary of State of The
Commonwealth of Massachusetts.

     WITNESSETH that

     WHEREAS, this Trust has been formed to carry on the business of an
investment company; and

     WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts business trust in accordance with the
provisions hereinafter set forth.

     NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon the
following terms and conditions for the pro rata benefit of the holders from time
to time of Shares in this Trust as hereinafter set forth.

                                       -2-

<PAGE>

                                   ARTICLE I

                              NAME AND DEFINITIONS

Name

     Section 1.   This Trust shall be known as "PIMCO New York Municipal Income
Fund II" and the Trustees shall conduct the business of the Trust under that
name or any other name as they may from time to time determine.

Definitions

     Section 2.   Whenever used herein, unless otherwise required by the context
or specifically provided:

           (a)    The "Trust" refers to the Massachusetts business trust
     established by this Declaration, as amended or restated from time to time;

           (b)    "Trustees" refers to the Trustees of the Trust named herein or
     elected in accordance with Article IV;

           (c)    "Shares" means the equal proportionate transferable units of
     interest into which the beneficial interest in the Trust shall be divided
     from time to time or, if more than one class or series of Shares is
     authorized by the Trustees, the equal proportionate transferable units into
     which each class or series of shares shall be divided from time to time;

           (d)    "Shareholder" means a record owner of Shares;

           (e)    The "1940 Act" refers to the Investment Company Act of 1940
     and the rules and regulations thereunder, all as amended from time to time;

           (f)    The terms "Affiliated Person", "Interested Person", and
     "Principal Underwriter" shall have the applicable meanings given them in
     the 1940 Act;

           (g)    "Declaration" shall mean this Agreement and Declaration of
     Trust, as amended or restated from time to time;

           (h)    "Bylaws" shall mean the Bylaws of the Trust as amended or
     restated from time to time;

           (i)    The term "class" or "class of Shares" refers to the division
     of Shares into two or more classes as provided in Article III, Section 1
     hereof;

                                       -3-

<PAGE>

           (j)    The term "series" or "series of Shares" refers to the division
     of Shares representing any class into two or more series as provided in
     Article III, Section 1 hereof; and

           (k)    The term "Continuing Trustee" shall have the meaning given to
     such term in Article IV, Section 2 hereof.

                                   ARTICLE II

                                     PURPOSE

     The purpose of the Trust is to provide investors a managed investment
primarily in securities, debt instruments and other instruments and rights of a
financial character and to carry on such other business as the Trustees may from
time to time determine pursuant to their authority under this Declaration.

                                   ARTICLE III

                                     SHARES

Division of Beneficial Interest

     Section 1.   The Trustees may, without Shareholder approval, authorize one
or more classes of Shares (which classes may be divided into two or more
series), Shares of each such class or series having such par value and such
preferences, voting powers, terms of redemption, if any, and special or relative
rights or privileges (including conversion rights, if any) as the Trustees may
determine. Subject to applicable law, the Trustees may, without Shareholder
approval, authorize the Trust to issue subscription or other rights representing
interests in Shares to existing Shareholders or other persons subject to such
terms and conditions as the Trustees may determine. The number of Shares of each
class or series authorized shall be unlimited, except as the Bylaws may
otherwise provide, and the Shares so authorized may be represented in part by
fractional shares. The Trustees may from time to time divide or combine the
Shares of any class or series into a greater or lesser number without thereby
changing the proportionate beneficial interest in the class or series.

Ownership of Shares

     Section 2.   The ownership of Shares shall be recorded on the books of the
Trust or a transfer or similar agent. Except as provided in the Bylaws or as the
Trustees may otherwise determine from time to time, no certificates certifying
the ownership of Shares shall be issued. The Trustees may make such rules as
they consider appropriate for the issuance of Share certificates, the transfer
of Shares and similar matters. The record books of the Trust as kept by the
Trust or any transfer or similar agent, as the case may be, shall be conclusive
as to who are the Shareholders of each class and series and as to the number of
Shares of each class and series held from time to time by each Shareholder.

                                       -4-

<PAGE>

Investments in the Trust

     Section 3.   The Trustees shall accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, as the Trustees or the Bylaws from time to time authorize.

No Preemptive Rights

     Section 4.   Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.

Derivative Claims

     Section 5.   No Shareholder shall have the right to bring or maintain any
court action, proceeding or claim on behalf of the Trust or any series or class
of Shares without first making demand on the Trustees requesting the Trustees to
bring or maintain such action, proceeding or claim. Such demand shall not be
excused under any circumstances, including claims of alleged interest on the
part of the Trustees, unless the plaintiff makes a specific showing that
irreparable nonmonetary injury to the Trust or series or class of Shares would
otherwise result. Such demand shall be mailed to the Secretary of the Trust at
the Trust's principal office and shall set forth with particularity the nature
of the proposed court action, proceeding or claim and the essential facts relied
upon by the Shareholder to support the allegations made in the demand. The
Trustees shall consider such demand within 45 days of its receipt by the Trust.
In their sole discretion, the Trustees may submit the matter to a vote of
Shareholders of the Trust or a series or class of Shares, as appropriate. Any
decision by the Trustees to bring, maintain or settle (or not to bring, maintain
or settle) such court action, proceeding or claim, or to submit the matter to a
vote of Shareholders, shall be binding upon the Shareholders. Any decision by
the Trustees to bring or maintain a court action, proceeding or suit on behalf
of the Trust or a series or class of Shares shall be subject to the right of the
Shareholders under Article V hereof to vote on whether or not such court action,
proceeding or suit should or should not be brought or maintained.

Direct Claims

     Section 6.   No class of Shareholders shall have the right to bring or
maintain a direct action or claim for monetary damages against the Trust or the
Trustees predicated upon an express or implied right of action under this
Declaration or the 1940 Act (excepting rights of action permitted under section
36(b) of the 1940 Act), nor shall any single Shareholder, who is similarly
situated to one or more other Shareholders with respect to the alleged injury,
have the right to bring such an action, unless the class of Shareholders or
Shareholder has obtained authorization from the Trustees to bring the action.
The requirement of authorization shall not be excused under any circumstances,
including claims of alleged interest on the part of the Trustees. A request for
authorization shall be mailed to the Secretary of the Trust at the Trust's
principal office and shall set forth with particularity the nature of the
proposed court action, proceeding or claim and the essential facts relied upon
by the class of Shareholders or Shareholder to support

                                       -5-

<PAGE>

the allegations made in the request. The Trustees shall consider such request
within 45 days of its receipt by the Trust. In their sole discretion, the
Trustees may submit the matter to a vote of Shareholders of the Trust or series
or class of Shares, as appropriate. Any decision by the Trustees to settle or to
authorize (or not to settle or to authorize) such court action, proceeding or
claim, or to submit the matter to a vote of Shareholders, shall be binding upon
the class of Shareholders or Shareholder seeking authorization. Any decision by
the Trustees to authorize a court action, proceeding or suit by a class of
Shareholders shall be subject to the right of the Shareholders under Article V
hereof to vote on whether or not such court action, proceeding or suit should or
should not be brought or maintained.

Status of Shares and Limitation of Personal Liability

     Section 7.   Shares shall be deemed to be personal property giving only the
rights provided in this Declaration or the Bylaws. Every Shareholder by virtue
of having become a Shareholder shall be held to have expressly assented and
agreed to the terms of this Declaration and the Bylaws and to have become a
party hereto and thereto. The death of a Shareholder during the continuance of
the Trust shall not operate to terminate the same nor entitle the representative
of any deceased Shareholder to an accounting or to take any action in court or
elsewhere against the Trust or the Trustees, but only to the rights of said
decedent under this Trust. Ownership of Shares shall not entitle the Shareholder
to any title in or to the whole or any part of the Trust property or right to
call for a partition or division of the same or for an accounting, nor shall the
ownership of Shares constitute the Shareholders partners. Neither the Trust nor
the Trustees, nor any officer, employee or agent of the Trust, shall have any
power to bind personally any Shareholder, nor except as specifically provided
herein to call upon any Shareholder for the payment of any sum of money or
assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay.

                                   ARTICLE IV

                                  THE TRUSTEES

Number and Classes of Trustees and Term of Office

     Section 1.   Subject to the voting powers of one or more classes or series
of Shares as set forth in the Bylaws, the number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees; provided, however, that the number of Trustees shall
in no event be less than three (3) from and after the date when Shares are first
sold pursuant to a public offering. The Trustees who are signatories to this
Declaration on the date hereof and such other persons as the Trustee or Trustees
then in office shall appoint (to fill a vacancy or otherwise) prior to any sale
of Shares pursuant to a public offering, shall each serve until the first
meeting of Shareholders at which Trustees are elected (or, if later, until the
first meeting of Shareholders at which Trustees of the Class to which such
Trustee has been assigned are elected) and until his or her successor is elected
and qualified, or until he or she sooner dies, resigns or is removed, subject in
each case to the Classes of Trustees and terms created pursuant to this Article
IV.

                                       -6-

<PAGE>

     An initial annual meeting of Shareholders or special meeting in lieu
thereof shall be called to be held not more than fifteen months after Shares are
first sold pursuant to a public offering; subsequent annual meetings of
Shareholders or special meetings in lieu thereof (each an "annual meeting")
shall be held as specified in the Bylaws. Prior to any sale of Shares pursuant
to a public offering, the Trustees shall classify themselves, with respect to
the time for which they severally hold office, into the following three classes:
Class I, whose term expires at the initial annual meeting; Class II, whose term
expires at the next succeeding annual meeting after the initial annual meeting
(the "second annual meeting"); and Class III, whose term expires at the next
succeeding annual meeting after the second annual meeting. Each Class shall
consist, as nearly as may be possible, of one-third of the total number of
Trustees constituting the entire Board of Trustees. At each annual meeting
beginning with the initial annual meeting, the successors of the Class of
Trustees whose term expires at that meeting shall be elected to hold office for
a term expiring at the annual meeting held in the third year following the year
of their election, with each Trustee holding office until the expiration of the
term of the relevant Class and the election and qualification of his or her
successor, or until he or she sooner dies, resigns, retires, or is disqualified
or removed from office. The Trustees may also determine by resolution those
Trustees in each Class that shall be elected by Shareholders of a particular
class of Shares (e.g., by a class of preferred Shares issued by the Fund) prior
to the initial public offering of such class of Shares.

     If the number of Trustees is changed, any increase or decrease shall be
apportioned among the Classes, as of the annual meeting of Shareholders next
succeeding any such change, so as to maintain a number of Trustees in each Class
as nearly equal as possible. No reduction in the number of Trustees shall have
the effect of removing any Trustee from office prior to the expiration of his or
her term unless the Trustee is specifically removed pursuant to Section 3 of
this Article at the time of the decrease. Except as provided in this Section 1
or Section 3 of this Article, Trustees shall be elected only at an annual
meeting of Shareholders.

Continuing Trustee; Definition

     Section 2.   For purposes of this Declaration and the Bylaws, the term
"Continuing Trustee" shall mean any member of the Board of Trustees who either
(a) has been a member of the Board of Trustees for a period of at least
thirty-six months (or since the commencement of the Trust's operations, if less
than thirty-six months) or (b) was nominated to serve as a member of the Board
of Trustees by a majority of the Continuing Trustees then members of the Board
of Trustees.

Vacancies; Resignation; Removal

     Section 3.   From and after the date when Shares are first sold pursuant to
a public offering and subject to any voting powers of one or more classes or
series of Shares as set forth in this Declaration or in the Bylaws or by
resolution of the Board of Trustees, any vacancies occurring in the Board of
Trustees may be filled by the Trustees as set forth below. Prior to the date
when Shares are first sold pursuant to a public offering, subject to any
limitations imposed

                                       -7-

<PAGE>

by the 1940 Act or other applicable law, any vacancies occurring in the Board of
Trustees may be filled by the Trustees without any action by or meeting of
Shareholders.

     Subject to any limitations imposed by the 1940 Act or other applicable law,
any vacancy occurring in the Board of Trustees that results from an increase in
the number of Trustees may be filled by a majority of the entire Board of
Trustees, and any other vacancy occurring in the Board of Trustees may be filled
by a majority of the Trustees then in office, whether or not sufficient to
constitute a quorum, or by a sole remaining Trustee; provided, however, that if
the Shareholders of any class or series of Shares are entitled separately to
elect one or more Trustees, a majority of the remaining Trustees elected by that
class or series or the sole remaining Trustee elected by that class or series
may fill any vacancy among the number of Trustees elected by that class or
series. A Trustee elected by the Board of Trustees to fill any vacancy occurring
in the Board of Trustees shall serve until the next annual meeting of
Shareholders and until his successor shall be elected and shall qualify,
subject, however, to prior death, resignation, retirement, disqualification or
removal from office. At any annual meeting of Shareholders, any Trustee elected
to fill any vacancy occurring in the Board of Trustees that has arisen since the
preceding annual meeting of Shareholders (whether or not any such vacancy has
been filled by election of a new Trustee by the Board of Trustees) shall hold
office for a term which coincides with the remaining term of the Class of
Trustee to which such office was previously assigned, if such vacancy arose
other than by an increase in the number of Trustees, and until his successor
shall be elected and shall qualify. In the event such vacancy arose due to an
increase in the number of Trustees, any Trustee so elected to fill such vacancy
at an annual meeting shall hold office for a term which coincides with that of
the Class of Trustee to which such office has been apportioned as heretofore
provided, and until his successor shall be elected and shall qualify.

     Any Trustee may resign his trust or retire as a Trustee (without need for
prior or subsequent accounting except in the event of removal) by an instrument
in writing signed by him and delivered to the President or Secretary or a
Trustee of the Trust, and such resignation or retirement shall be effective upon
such delivery, or at a later date according to the terms of the instrument. Any
Trustee may be removed from office only for "Cause" (as hereinafter defined) and
only (i) by action of at least seventy-five percent (75%) of the outstanding
Shares of the classes or series of Shares entitled to vote for the election of
such Trustee, or (ii) by written instrument, signed by at least seventy-five
percent (75%) of the remaining Trustees, specifying the date when such removal
shall become effective. "Cause" for these purposes shall require willful
misconduct, dishonesty or fraud on the part of the Trustee in the conduct of his
office or such Trustee being convicted of a felony.

Effect of Death, Resignation, etc. of a Trustee

     Section 4.   The death, declination, resignation, retirement, removal,
disqualification or incapacity of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created pursuant to
the terms of this Declaration.

                                       -8-

<PAGE>

Powers

     Section 5.   Subject to the provisions of this Declaration, the business of
the Trust shall be managed by the Trustees, and they shall have all powers
necessary or convenient to carry out that responsibility. Without limiting the
foregoing, the Trustees may adopt Bylaws not inconsistent with this Declaration
providing for the conduct of the business of the Trust and may amend and repeal
them to the extent and as provided in Article IX, Section 7(c) of this
Declaration. Subject to the voting power of one or more classes or series of
Shares as set forth in this Declaration or in the Bylaws or by resolution of the
Board of Trustees, the Trustees may fill vacancies in or add to their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of one or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the power and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more custodians of the assets
of the Trust and may authorize such custodians to employ subcustodians and to
deposit all or any part of such assets in a system or systems for the central
handling of securities, retain a transfer agent or a shareholder servicing
agent, or both, provide for the distribution of Shares by the Trust, through one
or more principal underwriters or otherwise, set record dates for the
determination of Shareholders with respect to various matters, and in general
delegate such authority as they consider desirable to any officer of the Trust,
to any committee of the Trustees and to any agent or employee of the Trust or to
any such custodian or underwriter.

     Without limiting the foregoing, the Trustees shall have power and
authority:

         (a)   To invest and reinvest cash, and to hold cash uninvested;

         (b)   To sell, exchange, lend, pledge, mortgage, hypothecate, write
     options on and lease any or all of the assets of the Trust;

         (c)   To vote or give assent, or exercise any rights of ownership, with
     respect to stock or other securities or property; and to execute and
     deliver proxies or powers of attorney to such person or persons as the
     Trustees shall deem proper, granting to such person or persons such power
     and discretion with relation to securities or property as the Trustees
     shall deem proper;

         (d)   To exercise powers and rights of subscription or otherwise which
     in any manner arise out of ownership of securities;

         (e)   To hold any security or property in a form not indicating any
     trust, whether in bearer, unregistered or other negotiable form, or in the
     name of the Trustees or of the Trust or in the name of a custodian,
     subcustodian or other depository or a nominee or nominees or otherwise;

                                       -9-

<PAGE>

         (f)   To the extent necessary or appropriate to give effect to the
     preferences, special or relative rights and privileges of any classes or
     series of Shares, to allocate assets, liabilities, income and expenses of
     the Trust to a particular class or classes or series of Shares or to
     apportion the same among two or more classes or series;

         (g)   To consent to or participate in any plan for the reorganization,
     consolidation or merger of any corporation or issuer, any security of which
     is or was held in the Trust; to consent to any contract, lease, mortgage,
     purchase or sale of property by such corporation or issuer, and to pay
     calls or subscriptions with respect to any security held in the Trust;

         (h)   To join with other security holders in acting through a
     committee, depositary, voting trustee or otherwise, and in that connection
     to deposit any security with, or transfer any security to, any such
     committee, depositary or trustee, and to delegate to them such power and
     authority with relation to any security (whether or not so deposited or
     transferred) as the Trustees shall deem proper, and to agree to pay, and to
     pay, such portion of the expenses and compensation of such committee,
     depositary or trustee as the Trustees shall deem proper;

         (i)   To compromise, arbitrate or otherwise adjust claims in favor of
     or against the Trust on any matter in controversy, including but not
     limited to claims for taxes;

         (j)   To enter into joint ventures, general or limited partnerships,
     limited liability companies, and any other combinations or associations;

         (k)   To borrow funds;

         (l)   To endorse or guarantee the payment of any notes or other
     obligations of any person; to make contracts of guaranty or suretyship, or
     otherwise assume liability for payment thereof; and to mortgage and pledge
     the Trust property or any part thereof to secure any of or all of such
     obligations;

         (m)   To purchase and pay for entirely out of Trust property such
     insurance as they may deem necessary or appropriate for the conduct of the
     business of the Trust, including, without limitation, insurance policies
     insuring the assets of the Trust and payment of distributions and principal
     on its portfolio investments, and insurance policies insuring the
     Shareholders, Trustees, officers, employees, agents, investment advisers,
     sub-advisers or managers, principal underwriters or independent contractors
     of the Trust individually against all claims and liabilities of every
     nature arising by reason of holding, being or having held any such office
     or position, or by reason of any action alleged to have been taken or
     omitted by any such person as Shareholder, Trustee, officer, employee,
     agent, investment adviser, sub-adviser or manager, principal underwriter or
     independent contractor, including any action taken or omitted that may be
     determined to constitute negligence, whether or not the Trust would have
     the power to indemnify such person against such liability;

                                      -10-

<PAGE>

          (n)   To pay pensions for faithful service, as deemed appropriate by
     the Trustees, and to adopt, establish and carry out pension,
     profit-sharing, share bonus, share purchase, savings, thrift and other
     retirement, incentive and benefit plans, trusts and provisions, including
     the purchasing of life insurance and annuity contracts as a means of
     providing such retirement and other benefits, for any or all of the
     Trustees, officers, employees and agents of the Trust;

          (o)   To purchase or otherwise acquire Shares; and

          (p)   To engage in any other lawful act or activity in which business
     corporations organized under the laws of The Commonwealth of Massachusetts
     may engage.

     The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees. Except as otherwise
provided herein or from time to time in the Bylaws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
the Trustees (a quorum being present), within or without Massachusetts. Except
as otherwise provided herein or from time to time in the Bylaws, any action to
be taken by the Trustees may be taken at a meeting held by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting, or
by written consents of a majority of the Trustees then in office (or such
greater number as may be required by this Declaration, the Bylaws or applicable
law).

Payment of Expenses by the Trust

     Section 6. The Trustees are authorized to pay, or to cause to be paid out
of the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser, sub-adviser or manager, principal
underwriter, auditor, counsel, custodian, transfer agent, shareholder servicing
agent, and such other agents or independent contractors and such other expenses
and charges as the Trustees may deem necessary or proper to incur.

Ownership of Assets of the Trust

     Section 7. Title to all of the assets of the Trust and each series and
class of Shares shall at all times be considered as vested in the Trustees.

Advisory, Management and Distribution

     Section 8. The Trustees may, at any time and from time to time, contract
for exclusive or nonexclusive advisory and/or management services with any
corporation, trust,

                                      -11-

<PAGE>

association or other organization (the "Manager"), every such contract to comply
with such requirements and restrictions as may be set forth in the Bylaws; and
any such contract may provide for one or more sub-advisers or other agents who
shall perform all or part of the obligations of the Manager under such contract
and contain such other terms interpretive of or in addition to said requirements
and restrictions as the Trustees may determine, including, without limitation,
authority to determine from time to time what investments shall be purchased,
held, sold, or exchanged and what portion, if any, of the assets of the Trust
shall be held uninvested and to make changes in the Trust's investments. The
Trustees may also, at any time and from time to time, contract with the Manager
or any other corporation, trust, association or other organization, appointing
it exclusive or nonexclusive distributor or principal underwriter for the
Shares, every such contract to comply with such requirements and restrictions as
may be set forth in the Bylaws; and any such contract may contain such other
terms interpretive of or in addition to said requirements and restrictions as
the Trustees may determine.

     The fact that:

                 (i)  any of the Shareholders, Trustees or officers of the Trust
          is a shareholder, director, officer, partner, trustee, employee,
          manager, adviser, sub-adviser, principal underwriter or distributor or
          agent of or for any corporation, trust, association or other
          organization, or of or for any parent or affiliate of any
          organization, with which an advisory, sub-advisory or management
          contract, or principal underwriter's or distributor's contract, or
          transfer, shareholder servicing or other agency contract may have been
          or may hereafter be made or that any such organization, or any parent
          or affiliate thereof, is a Shareholder or has an interest in the
          Trust, or that

                 (ii) any corporation, trust, association or other organization
          with which an advisory, sub-advisory or management contract or
          principal underwriter's or distributor's contract or transfer,
          shareholder servicing or other agency contract may have been or may
          hereafter be made also has an advisory, sub-advisory or management
          contract, or principal underwriter's or distributor's contract or
          transfer, shareholder servicing or other agency contract with one or
          more other corporations, trusts, associations or other organizations,
          or has other business or interests,

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

Address of the Trustees and Agent for Service of Process

     Section 9. The principal address of the Trustees on the date hereof is c/o
PIMCO Funds Distributors LLC, 2187 Atlantic Street, Stamford, CT 06902. The name
and address of the resident agent of the Trust on the date hereof in the
Commonwealth of Massachusetts is Corporation Service Company, 84 State Street,
Boston, Massachusetts 02109. Each Trustee may


                                      -12-

<PAGE>

change his principal address and the Trustees may appoint a new or successor
resident agent of the Trust at any time in his or their sole discretion.


                                   ARTICLE V

                    SHAREHOLDERS' VOTING POWERS AND MEETINGS

General

     Section 1.   Except as otherwise provided in this Article V or elsewhere in
this Declaration, Shareholders shall have such power to vote as is provided for
in, and shall and may hold meetings and take actions pursuant to, the provisions
of the Bylaws.

Voting Powers as to Certain Transactions

     Section 2.

     (a)   Except as otherwise provided in paragraph (b) of this Section 2, the
affirmative vote or consent of at least seventy-five percent (75%) of the
Trustees of the Trust and at least seventy-five percent (75%) of the Shares
outstanding and entitled to vote thereon shall be necessary to authorize any of
the following actions:

           (i)    the merger or consolidation or share exchange of the Trust or
           any series or class of Shares with or into any other person or
           company (including, without limitation, a partnership, corporation,
           joint venture, business trust, common law trust or any other business
           organization) or of any such person or company with or into the Trust
           or any series or class of Shares;

           (ii)   the issuance or transfer by the Trust or any series or class
           of Shares (in one or more series of transactions in any twelve-month
           period) of any securities of the Trust or such series or class to any
           other person or entity for cash, securities or other property (or
           combination thereof) having an aggregate fair market value of
           $1,000,000 or more, excluding (i) sales of any securities of the
           Trust or a series or class in connection with a public offering
           thereof, (ii) issuance of securities of the Trust or a series or
           class pursuant to a dividend reinvestment plan adopted by the
           Trustees and (iii) issuances of securities of the Trust or a series
           or class upon the exercise of any stock subscription rights
           distributed by the Trust or a series or class;

           (iii)  a sale, lease, exchange, mortgage, pledge, transfer or other
           disposition by the Trust or any series or class of Shares (in one or
           a series of transactions in any twelve-month period) to or with any
           person of any assets of the Trust or such series or class having an
           aggregate fair market value of $1,000,000 or more,

                                      -13-

<PAGE>

           except for transactions in securities effected by the Trust or a
           series or class in the ordinary course of business;

           (iv)   any Shareholder proposal as to specific investment decisions
           made or to be made with respect to the assets of the Trust or a
           series or class of Shares.

     (b)   Notwithstanding anything to the contrary in paragraph (a) of this
Section 2, so long as each action is approved by both a majority of the entire
Board of Trustees and seventy-five percent (75%) of the Continuing Trustees, and
so long as all other conditions and requirements, if any, provided for in the
Bylaws and applicable law have been satisfied, then no Shareholder vote or
consent shall be necessary or required to approve any of the actions listed in
paragraphs (a)(i), (a)(ii), (a)(iii) or (a)(iv) of this Section 2, except to the
extent such Shareholder vote or consent is required by the 1940 Act or other
applicable law.

Conversion to Open-End Company

     Section 3.   Notwithstanding any other provisions in this Declaration or
the Bylaws, the conversion of the Trust or any series of Shares from a
"closed-end company" to an "open-end company", as those terms are defined in
Sections 5(a)(2) and 5(a)(1), respectively, of the 1940 Act (as in effect on the
date of this Declaration), together with any necessary amendments to this
Declaration to permit such a conversion, shall require the affirmative vote or
consent of at least seventy-five percent (75%) of each class of Shares
outstanding and entitled to vote on the matter, unless a majority of the
Trustees and seventy-five percent (75%) of the Continuing Trustees entitled to
vote on the matter approve such conversion and related actions. In the event of
such approval by the Trustees and the Continuing Trustees as referred to in the
preceding sentence, the 1940 Act shall govern whether and to what extent a vote
or consent of Shares shall be required to approve such conversion and related
actions. Any affirmative vote or consent required under this Section 3 shall be
in addition to the vote or consent of the Shareholders otherwise required by law
or by any agreement between the Trust and any national securities exchange.

                                   ARTICLE VI

               DISTRIBUTIONS AND DETERMINATION OF NET ASSET VALUE

Distributions

     Section 1.   The Trustees may each year, or more frequently if they so
desire, but need not, distribute to the Shareholders of any or all classes or
series of Shares such income and gains, accrued or realized, as the Trustees may
determine, after providing for actual and accrued expenses and liabilities
(including such reserves as the Trustees may establish) determined in accordance
with good accounting practices and subject to the preferences, special or
relative rights and privileges of the various classes or series of Shares. The
Trustees shall have full discretion to determine which items shall be treated as
income and which items as capital and their determination shall be binding upon
the Shareholders. Distributions of income for each

                                      -14-

<PAGE>

year or other period, if any be made, may be made in one or more payments, which
shall be in Shares, in cash or otherwise and on a date or dates and as of a
record date or dates determined by the Trustees. At any time and from time to
time in their discretion, the Trustees may distribute to the Shareholders as of
a record date or dates determined by the Trustees, in Shares, in cash or
otherwise, all or part of any gains realized on the sale or disposition of
property or otherwise, or all or part of any other principal of the Trust. Each
distribution pursuant to this Section 1 to the Shareholders of a particular
class or series shall be made ratably according to the number of Shares of such
class or series held by the several Shareholders on the applicable record date
thereof, provided that no distribution need be made on Shares purchased pursuant
to orders received, or for which payment is made, after such time or times as
the Trustees may determine. Any such distribution paid in Shares will be paid at
the net asset value thereof as determined in accordance with Section 2 of this
Article VI, or at such other value as may be specified by the Bylaws or as the
Trustees may from time to time determine, subject to applicable laws and
regulations then in effect.

Determination of Net Asset Value

     Section 2.   The net asset value per share of each class and each series of
Shares of the Trust shall be determined in accordance with the 1940 Act and any
related procedures adopted by the Trustees from time to time. Determinations
made under and pursuant to this Section 2 in good faith and in accordance with
the provisions of the 1940 Act shall be binding on all parties concerned.


                                   ARTICLE VII

                           COMPENSATION AND LIMITATION
                            OF LIABILITY OF TRUSTEES

Compensation

     Section 1.   The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking, underwriting,
brokerage or other services and payment for the same by the Trust.

Limitation of Liability

     Section 2.   The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, adviser,
sub-adviser, manager or principal underwriter of the Trust, nor shall any
Trustee be responsible for the act or omission of any other Trustee, but nothing
herein contained shall protect any Trustee against any liability to which he or
she would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his or her office.

                                      -15-

<PAGE>

     Every note, bond, contract, instrument, certificate, Share or undertaking
and every other act or thing whatsoever executed or done by or on behalf of the
Trust or the Trustees or any of them in connection with the Trust shall be
conclusively deemed to have been executed or done only in or with respect to
their or his or her capacity as Trustees or Trustee, and such Trustees or
Trustee shall not be personally liable thereon.

                                  ARTICLE VIII

                                 INDEMNIFICATION

Trustees, Officers etc.

     Section 1.   The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been involved
as a party or otherwise or with which such person may be or may have been
threatened, while in office or thereafter, by reason of being or having been
such a Covered Person, except with respect to any matter as to which such
Covered Person shall have been finally adjudicated in a decision on the merits
in any such action, suit or other proceeding not to have acted in good faith in
the reasonable belief that such Covered Person's action was in the best
interests of the Trust and except that no Covered Person shall be indemnified
against any liability to the Trust or its Shareholders to which such Covered
Person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such Covered Person's office. Expenses, including counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from time to
time by the Trust in advance of the final disposition of any such action, suit
or proceeding upon receipt of an undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined that
indemnification of such expenses is not authorized under this Article, provided,
that (a) such Covered Person shall provide security for his or her undertaking,
(b) the Trust shall be insured against losses arising by reason of such Covered
Person's failure to fulfill his or her undertaking, or (c) a majority of the
Trustees who are disinterested persons and who are not Interested Persons of the
Trust (provided that a majority of such Trustees then in office act on the
matter), or independent legal counsel in a written opinion shall determine,
based on a review of readily available facts (but not a full trial-type
inquiry), that there is reason to believe such Covered Person ultimately will be
entitled to indemnification.

                                      -16-

<PAGE>

Compromise Payment

     Section 2.   As to any matter disposed of (whether by a compromise payment,
pursuant to a consent decree or otherwise) without an adjudication in a decision
on the merits by a court, or by any other body before which the proceeding was
brought, that such Covered Person either (a) did not act in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust or (b) is liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Covered Person's office, indemnification shall
be provided if (x) approved as in the best interest of the Trust, after notice
that it involves such indemnification, by at least a majority of the Trustees
who are disinterested persons and are not Interested Persons of the Trust
(provided that a majority of such Trustees then in office act on the matter),
upon a determination, based upon a review of readily available facts (but not a
full trial-type inquiry) that such Covered Person acted in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust and is not liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office, or (y) there has
been obtained an opinion in writing of independent legal counsel, based upon a
review of readily available facts (but not a full trial-type inquiry), to the
effect that such Covered Person appears to have acted in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust and that such indemnification would not protect such Covered Person
against any liability to the Trust to which such Covered Person would otherwise
be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office.
Any approval pursuant to this Section 2 shall not prevent the recovery from any
Covered Person of any amount paid to such Covered Person in accordance with this
Section 2 as indemnification if such Covered Person is subsequently adjudicated
by a court of competent jurisdiction not to have acted in good faith in the
reasonable belief that such Covered Person's action was in the best interests of
the Trust or to have been liable to the Trust or its Shareholders by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.

Rebuttable Presumption

     Section 3.   For purposes of the determination or opinion referred to in
clause (c) of Section 1 of this Article VIII or clauses (x) or (y) of Section 2
of this Article VIII, the majority of disinterested Trustees acting on the
matter or independent legal counsel, as the case may be, shall be entitled to
rely upon a rebuttable presumption that the Covered Person has not engaged in
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Covered Person's office.

Indemnification Not Exclusive

     Section 4.   The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which any such Covered Person may be
entitled. As used in this Article VIII, the term "Covered Person" shall include
such person's heirs, executors and

                                      -17-

<PAGE>

administrators, and a "disinterested person" is a person against whom none of
the actions, suits or other proceedings in question or another action, suit or
other proceeding on the same or similar grounds is then or has been pending.
Nothing contained in this Article VIII shall affect any rights to
indemnification to which personnel of the Trust, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law,
nor the power of the Trust to purchase and maintain liability insurance on
behalf of such person; provided, however, that the Trust shall not purchase or
maintain any such liability insurance in contravention of the 1940 Act or other
applicable law.

Shareholders

     Section 5.   In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled to
be held harmless from and indemnified against all loss and expense arising from
such liability.

                                   ARTICLE IX

                                  MISCELLANEOUS

Trustees, Shareholders etc. Not Personally Liable; Notice

     Section 1.   All persons extending credit to, contracting with or having
any claim against the Trust or a particular series or class of Shares shall look
only to the assets of the Trust or the assets of that particular series or class
of Shares for payment under such credit, contract or claim; and neither the
Shareholders nor the Trustees, nor any of the Trust's officers, employees or
agents, whether past, present or future, shall be personally liable therefor.
Nothing in this Declaration shall protect any Trustee against any liability to
which such Trustee would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.

     Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officer or officers shall give notice that this
Declaration is on file with the Secretary of State of The Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustee or Trustees or as officer or officers
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustee or Trustees or officer or officers or Shareholder or
Shareholders individually.

                                      -18-

<PAGE>

Trustees and Officers Good Faith Action, Expert Advice, No Bond or Surety

     Section 2.  The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee or officer shall
be liable for his or her own willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of the office of
Trustee or officer, and for nothing else, and shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees or officers may take advice of
counsel or other experts with respect to the meaning and operation of this
Declaration, and shall be under no liability for any act or omission in
accordance with such advice or for failing to follow such advice. The Trustees
and officers shall not be required to give any bond as such, nor any surety if a
bond is required.

Liability of Third Persons Dealing with Trustees

     Section 3.   No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.

Duration and Termination of Trust

     Section 4.   Unless terminated as provided herein, the Trust shall continue
without limitation of time. Subject to the voting powers of one or more classes
or series of Shares as set forth in the Bylaws, the Trust may be terminated at
any time (i) by vote or consent of Shareholders holding at least seventy-five
percent (75%) of the Shares entitled to vote or (ii) by vote or consent of
majority of the entire Board of Trustees and seventy-five percent (75%) of the
Continuing Trustees upon written notice to the Shareholders. Any series or class
of Shares may be terminated at any time (x) by vote or consent of Shareholders
holding at least seventy-five percent (75%) of the Shares of such series of
class entitled to vote or (y) by vote or consent of majority of the entire Board
of Trustees and seventy-five percent (75%) of the Continuing Trustees upon
written notice to the Shareholders of such series or class. For the avoidance of
any doubt and notwithstanding anything to the contrary in this Declaration,
Shareholders shall have no separate right to vote with respect to the
termination of the Trust or a series of class of Shares if the Trustees
(including the Continuing Trustees) exercise their right to terminate the Trust
or such series or class pursuant to clauses (ii) and (y) of this Section 4.

     Upon termination of the Trust or of any one or more series or classes of
Shares, after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular series or class, as may be determined by the Trustees, the Trust
shall in accordance with such procedures as the Trustees consider appropriate
reduce the remaining assets to distributable form in cash or shares or other
property, or any combination thereof, and distribute the proceeds to the
Shareholders of the series or class(es) involved, ratably according to the
number of Shares of such series or class held by the several Shareholders on the
date of termination, except to the extent otherwise required or permitted by the
preferences and special or relative rights and privileges of any classes or
series of Shares.

                                      -19-

<PAGE>

Filing of Copies, References, Headings

     Section 5.  The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust, where it may be inspected by
any Shareholder. A copy of this instrument and of each amendment hereto shall be
filed by the Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any other governmental
office where such filing may from time to time be required. Anyone dealing with
the Trust may rely on a certificate by an officer of the Trust as to whether or
not any such amendments have been made and as to any matters in connection with
the Trust hereunder; and, with the same effect as if it were the original, may
rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in any such
amendment, references to this instrument, and all expressions like "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such amendments. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. This
instrument may be executed in any number of counterparts, each of which shall be
deemed an original.

Applicable Law

     Section 6.  This Declaration is made in The Commonwealth of Massachusetts,
and it is created under and is to be governed by and construed and administered
according to the laws of said Commonwealth. The Trust shall be of the type
commonly called a Massachusetts business trust, and without limiting the
provisions hereof, the Trust may exercise all powers which are ordinarily
exercised by such a trust.

Amendments

     Section 7.  (a) Except to the extent that the Bylaws or applicable law may
require a higher vote or the separate vote of one or more classes or series of
Shares, and except as provided in paragraph (b) of this Section 7, this
Declaration may be amended at any time by an instrument in writing signed by a
majority of the then Trustees (1) when authorized so to do by a vote of
Shareholders holding a majority of the Shares entitled to vote or (2) without
Shareholder approval as may be necessary or desirable in order to authorize one
or more classes or series of Shares as in Section 1 of Article III. Amendments
having the purpose of changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.

     (b) Except to the extent that the Bylaws or applicable law may require a
higher vote or the separate vote of one or more classes or series of Shares, no
amendment may be made under this Section 7 which shall amend, alter, change or
repeal any of the provisions of Article III, Sections 4, 5, 6 or 7; Article IV,
Sections 1, 2 and 3; each Section of Article V; Article VII, Section 2; each
Section of Article VIII; or this Article IX, Sections 1, 2, 3, 4, 7(b) or 7(c)
unless, in each case, the amendment effecting such amendment, alteration, change
or repeal shall be

                                      -20-

<PAGE>

effected by an instrument in writing signed by a majority of the then Trustees
and seventy-five percent (75%) of the Continuing Trustees and shall receive the
affirmative vote or consent of at least seventy-five percent (75%) of the Shares
entitled to vote; provided, however, that such affirmative vote or consent shall
be in addition to the vote or consent of the Shareholders otherwise required by
applicable law or by the terms of any agreement between the Trust and any
national securities exchange.

     (c) Except to the extent that the Bylaws or applicable law requires a vote
or consent of Shareholders, the Board of Trustees shall have the sole power and
authority to adopt, amend, alter, change or repeal any Bylaw of the Trust, if
the resolution or writing adopting, amending, altering, changing or repealing
any such Bylaw is approved or signed by a majority of the Board of Trustees;
provided, however, that the approval of a majority of the Board of Trustees and
seventy-five percent (75%) of the Continuing Trustees shall be required for (i)
any amendment, alteration, change or repeal of Section 10 of the Bylaws and (ii)
any amendment, alteration, change or repeal of any other Section or provision of
the Bylaws designated from time to time by resolution of a majority of the Board
of Trustees and seventy-five percent (75%) of the Continuing Trustees to require
such approval.

Address of the Trust

     Section 8.  As of the date hereof, the principal address of the Trust is
1345 Avenue of the Americas, 47/th/ Floor, New York, NY 10105. The Trustees may
change the principal address of the Trust to any location within or without The
Commonwealth of Massachusetts as they shall determine in their sole discretion.

                                      -21-

<PAGE>

     IN WITNESS HEREOF, all of the Trustees as aforesaid do hereto set their
hands this 18th day of June, 2002.


                                           /s/ Stephen J. Treadway
                                           -----------------------------
                                           Stephen J. Treadway


                                           /s/ Paul Belica
                                           -----------------------------
                                           Paul Belica


                                           /s/ Robert E. Connor
                                           -----------------------------
                                           Robert E. Connor


                                           /s/ John J. Dalessandro II
                                           -----------------------------
                                           John J. Dalessandro II


                                           /s/ Hans W. Kertess
                                           -----------------------------
                                           Hans W. Kertess


                                           /s/ R. Peter Sullivan III
                                           -----------------------------
                                           R. Peter Sullivan III

                                      -22-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(B)(2)
<SEQUENCE>4
<FILENAME>dex99b2.txt
<DESCRIPTION>AMENDED AND RESTATED BYLAWS OF REGISTRANT
<TEXT>
<PAGE>

                                                                     Exhibit b.2

                              AMENDED AND RESTATED
                                     BYLAWS
                                       of
                     PIMCO NEW YORK MUNICIPAL INCOME FUND II

                           (Dated as of June 18, 2002)


                                   ARTICLE 1
             Agreement and Declaration of Trust and Principal Office

       1.1    Principal Office of the Trust. A principal office of the Trust
shall be located in New York, New York. The Trust may have other principal
offices within or without Massachusetts as the Trustees may determine or as they
may authorize.

       1.2    Agreement and Declaration of Trust. These Bylaws shall be subject
to the Agreement and Declaration of Trust, as amended or restated from time to
time (the "Declaration of Trust"), of PIMCO New York Municipal Income Fund II,
the Massachusetts business trust established by the Declaration of Trust (the
"Trust"). Capitalized terms used in these Bylaws and not otherwise defined
herein shall have the meanings given to such terms in the Declaration of Trust.

                                   ARTICLE 2
                              Meetings of Trustees

       2.1    Regular Meetings. Regular meetings of the Trustees may be held
without call or notice at such places and at such times as the Trustees may from
time to time determine, provided that notice of the first regular meeting
following any such determination shall be given to absent Trustees. A regular
meeting of the Trustees may be held without call or notice immediately after and
at the same place as the annual meeting of the Shareholders.

       2.2    Special Meetings. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Trustees, the President or the Treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the Secretary
or an Assistant Secretary or by the officer or the Trustees calling the meeting.

       2.3    Notice. It shall be sufficient notice to a Trustee of a special
meeting to send notice by mail at least forty-eight hours, or by telegram, telex
or telecopy or other electronic

<PAGE>

facsimile transmission method at least twenty-four hours, before the meeting
addressed to the Trustee at his or her usual or last known business or residence
address or to give notice to him or her in person or by telephone at least
twenty-four hours before the meeting. Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him or her, before or
after the meeting, is filed with the records of the meeting, or to any Trustee
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him or her. Neither notice of a meeting nor a waiver of a
notice need specify the purposes of the meeting.

       2.4    Quorum. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting may be adjourned from time
to time by a majority of the votes cast upon the question, whether or not a
quorum is present, and the meeting may be held as adjourned without further
notice.

                                    ARTICLE 3
                                    Officers

       3.1    Enumeration; Qualification. The officers of the Trust shall be a
President, a Treasurer, a Secretary, and such other officers including a
Chairman of the Trustees, if any, as the Trustees from time to time may in their
discretion elect. The Trust may also have such agents as the Trustees from time
to time may in their discretion appoint. The Chairman of the Trustees, if one is
elected, shall be a Trustee and may but need not be a Shareholder; and any other
officer may but need not be a Trustee or a Shareholder. Any two or more offices
may be held by the same person.

       3.2    Election. The President, the Treasurer, and the Secretary shall be
elected annually by the Trustees. Other officers, if any, may be elected or
appointed by the Trustees at the same meeting at which the President, Treasurer
and Secretary are elected, or at any other time. Vacancies in any office may be
filled at any time.

       3.3    Tenure. The Chairman of the Trustees, if one is elected, the
President, the Treasurer and the Secretary shall hold office until their
respective successors are chosen and qualified, or in each case until he or she
sooner dies, resigns, is removed with or without cause or becomes disqualified.
Each other officer shall hold office and each agent of the Trust shall retain
authority at the pleasure of the Trustees.

       3.4    Powers. Subject to the other provisions of these Bylaws, each
officer shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
Trustees may from time to time designate.

       3.5    Chairman; President; Vice President. Unless the Trustees otherwise
provide, the Chairman of the Trustees or, if there is none or in the absence of
the Chairman, the President shall preside at all meetings of the Shareholders
and of the Trustees. The President shall be the

                                       -2-

<PAGE>

chief executive officer. Any Vice President shall have such duties and powers as
may be designated from time to time by the Trustees or the President.

       3.6    Treasurer; Assistant Treasurer. The Treasurer shall be the chief
financial and accounting officer of the Trust, and shall, subject to the
provisions of the Declaration of Trust and to any arrangement made by the
Trustees with a custodian, investment adviser, sub-adviser or manager, or
transfer, shareholder servicing or similar agent, be in charge of the valuable
papers, books of account and accounting records of the Trust, and shall have
such other duties and powers as may be designated from time to time by the
Trustees or by the President. Any Assistant Treasurer shall have such duties and
powers as may be designated from time to time by the Trustees or the President.

       3.7    Secretary; Assistant Secretary. The Secretary shall record all
proceedings of the Shareholders and the Trustees in books to be kept therefor,
which books or a copy thereof shall be kept at the principal office of the
Trust. In the absence of the Secretary from any meeting of the Shareholders or
Trustees, an Assistant Secretary, or if there be none or if he or she is absent,
a temporary secretary chosen at such meeting shall record the proceedings
thereof in the aforesaid books. Any Assistant Secretary shall have such duties
and powers as may be designated from time to time by the Trustees or the
President.

       3.8    Resignations. Any officer may resign at any time by written
instrument signed by him or her and delivered to the Chairman, if any, the
President or the Secretary, or to a meeting of the Trustees. Such resignation
shall be effective upon receipt unless specified to be effective at some other
time. Except to the extent expressly provided in a written agreement with the
Trust, no officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.

                                    ARTICLE 4
                                   Committees

       4.1    Quorum; Voting. Except as provided below or as otherwise
specifically provided in the resolutions constituting a Committee of the
Trustees and providing for the conduct of its meetings, a majority of the
members of any Committee of the Trustees shall constitute a quorum for the
transaction of business, and any action of such a Committee may be taken at a
meeting by a vote of a majority of the members present (a quorum being present)
or evidenced by one or more writings signed by such a majority. Members of a
Committee may participate in a meeting of such Committee by means of a
conference telephone or other communications equipment by means of which all
persons participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting.

       With respect to a Valuation Committee of the Trustees, one or more of the
Committee members shall constitute a quorum for the transaction of business.

                                       -3-

<PAGE>

       Except as specifically provided in the resolutions constituting a
Committee of the Trustees and providing for the conduct of its meetings, Article
2, Section 2.3 of these Bylaws relating to special meetings shall govern the
notice requirements for Committee meetings, except that it shall be sufficient
notice to a Valuation Committee of the Trustees to send notice by telegram,
telex or telecopy or other electronic means (including by telephone
voice-message or e-mail) at least fifteen minutes before the meeting.

                                    ARTICLE 5
                                     Reports

       5.1    General. The Trustees and officers shall render reports at the
time and in the manner required by the Declaration of Trust or any applicable
law. Officers and Committees shall render such additional reports as they may
deem desirable or as may from time to time be required by the Trustees.

                                    ARTICLE 6
                                   Fiscal Year

       6.1    General. Except as from time to time otherwise provided by the
Trustees, the initial fiscal year of the Trust shall end on such date as is
determined in advance or in arrears by the Treasurer, and the subsequent fiscal
years shall end on such date in subsequent years.

                                    ARTICLE 7
                                      Seal

       7.1    General. The seal of the Trust shall, subject to alteration by the
Trustees, consist of a flat-faced die with the word "Massachusetts", together
with the name of the Trust and the year of its organization cut or engraved
thereon; provided, however, that unless otherwise required by the Trustees, the
seal shall not be necessary to be placed on, and its absence shall not impair
the validity of, any document, instrument or other paper executed and delivered
by or on behalf of the Trust.

                                    ARTICLE 8
                               Execution of Papers

       8.1    General. Except as the Trustees may generally or in particular
cases authorize the execution thereof in some other manner, all deeds, leases,
transfers, contracts, bonds, notes, checks, drafts and other obligations made,
accepted or endorsed by the Trust shall be executed by the President, any Vice
President, the Treasurer or by whomever else shall be designated for that
purpose by vote of the Trustees, and need not bear the seal of the Trust.

                                    ARTICLE 9
                         Issuance of Share Certificates

                                       -4-

<PAGE>

       9.1    Share Certificates. Each Shareholder shall be entitled to a
certificate stating the number of Shares owned by him or her, in such form as
shall be prescribed from time to time by the Trustees. Such certificates shall
be signed by the President or any Vice President and by the Treasurer or any
Assistant Treasurer. Such signatures may be by facsimile if the certificate is
signed by a transfer agent, or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall cease to be such officer
before such certificate is issued, it may be issued by the Trust with the same
effect as if he or she were such officer at the time of its issuance.

       Notwithstanding the foregoing, in lieu of issuing certificates for
Shares, the Trustees or the transfer agent may either issue receipts therefor or
may keep accounts upon the books of the Trust for the record holders of such
Shares, who shall in either case be deemed, for all purposes hereunder, to be
the holders of certificates for such Shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.

       9.2    Loss of Certificates. In case of the alleged loss or destruction
or the mutilation of a share certificate, a duplicate certificate may be issued
in place thereof, upon such terms as the Trustees shall prescribe.

       9.3    Issuance of New Certificates to Pledgee. A pledgee of Shares
transferred as collateral security shall be entitled to a new certificate if the
instrument of transfer substantially describes the debt or duty that is intended
to be secured thereby. Such new certificate shall express on its face that it is
held as collateral security, and the name of pledgor shall be stated thereon,
who alone shall be liable as a Shareholder and entitled to vote thereon.

       9.4    Discontinuance of Issuance of Certificates. Notwithstanding
anything to the contrary in this Article 9, the Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each Shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not effect the ownership of
Shares in the Trust.

                                   ARTICLE 10
                    Shareholders' Voting Powers and Meetings

       10.1   Voting Powers. The Shareholders shall have power to vote only (i)
for the election or removal of Trustees as provided in Article IV, Sections 1
and 3 of the Declaration of Trust, (ii) with respect to any Manager or
sub-adviser as provided in Article IV, Section 8 of the Declaration of Trust to
the extent required by the 1940 Act, (iii) with respect to certain transactions
and other matters to the extent and as provided in Article V, Sections 2 and 3
of the Declaration of Trust, (iv) with respect to any termination of this Trust
to the extent and as provided in Article IX, Section 4 of the Declaration of
Trust (for the avoidance of any doubt, Shareholders shall have no separate right
to vote with respect to the termination of the Trust or a series or class of
Shares if the Trustees (including the Continuing Trustees) exercise their right
to terminate the Trust or such series or class pursuant to clauses (ii) or (y)
of Article IX, Section 4

                                       -5-

<PAGE>

of the Declaration of Trust), (v) with respect to any amendment of the
Declaration of Trust to the extent and as provided in Article IX, Section 7 of
the Declaration of Trust, (vi) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, and (vii) with
respect to such additional matters relating to the Trust as may be required by
law, the Declaration of Trust, these Bylaws or any registration of the Trust
with the Securities and Exchange Commission (or any successor agency) or any
state, or as the Trustees may consider necessary or desirable. Each whole Share
shall be entitled to one vote as to any matter on which it is entitled to vote
and each fractional Share shall be entitled to a proportionate fractional vote,
except as otherwise provided in the Declaration of Trust, these Bylaws, or
required by applicable law. Except as otherwise provided in the Declaration of
Trust or in respect of the terms of a class of preferred shares of beneficial
interest of the Trust as reflected in these Bylaws or required by applicable
law, all Shares of the Trust then entitled to vote shall be voted in the
aggregate as a single class without regard to classes or series of Shares. There
shall be no cumulative voting in the election of Trustees. Shares may be voted
in person or by proxy. A proxy with respect to Shares held in the name of two or
more persons shall be valid if executed by any one of them unless at or prior to
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. The placing of a Shareholder's name on a proxy
pursuant to telephonic or electronically transmitted instructions obtained
pursuant to procedures reasonably designed to verify that such instructions have
been authorized by such Shareholder shall constitute execution of such proxy by
or on behalf of such Shareholder. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
Until Shares of a particular class or series are issued, the Trustees may
exercise all rights of Shareholders and may take any action required by law, the
Declaration of Trust or these Bylaws to be taken by Shareholders as to such
class or series.

      10.2   Voting Power and Meetings. Except as provided in the next sentence,
regular meetings of the Shareholders for the election of Trustees and the
transaction of such other business as may properly come before the meeting shall
be held, so long as Shares are listed for trading on the New York Stock
Exchange, on at least an annual basis, on such day and at such place as shall be
designated by the Trustees. In the event that such a meeting is not held in any
annual period if so required, whether the omission be by oversight or otherwise,
a subsequent special meeting may be called by the Trustees and held in lieu of
such meeting with the same effect as if held within such annual period. Special
meetings of the Shareholders or any or all classes or series of Shares may also
be called by the Trustees from time to time for such other purposes as may be
prescribed by law, by the Declaration of Trust or by these Bylaws, or for the
purpose of taking action upon any other matter deemed by a majority of the
Trustees and a majority of the Continuing Trustees to be necessary or desirable.
A special meeting of Shareholders may be held at any such time, day and place as
is designated by the Trustees. Written notice of any meeting of Shareholders,
stating the date, time, place and purpose of the meeting, shall be given or
caused to be given by a majority of the Trustees and a majority of the
Continuing Trustees at least seven days before such meeting to each Shareholder
entitled to vote thereat by leaving such notice with the Shareholder at his or
her residence or usual place of business or by mailing such notice, postage
prepaid, to the Shareholder's address as it appears on

                                       -6-

<PAGE>

the records of the Trust. Such notice may be given by the Secretary or an
Assistant Secretary or by any other officer or agent designated for such purpose
by the Trustees. Whenever notice of a meeting is required to be given to a
Shareholder under the Declaration of Trust or these Bylaws, a written waiver
thereof, executed before or after the meeting by such Shareholder or his or her
attorney thereunto authorized and filed with the records of the meeting, shall
be deemed equivalent to such notice. Notice of a meeting need not be given to
any Shareholder who attends the meeting without protesting prior thereto or at
its commencement the lack of notice to such Shareholder. No ballot shall be
required for any election unless required by a Shareholder present or
represented at the meeting and entitled to vote in such election.
Notwithstanding anything to the contrary in this Section 10.2, no matter shall
be properly before any annual or special meeting of Shareholders and no business
shall be transacted thereat unless in accordance with Section 10.6 of these
Bylaws.

      10.3   Quorum and Required Vote. Except when a larger quorum is required
by any provision of law or the Declaration of Trust or these Bylaws, thirty
percent (30%) of the Shares entitled to vote on a particular matter shall
constitute a quorum for the transaction of business at a Shareholders' meeting,
except that where any provision of law or the Declaration of Trust or these
Bylaws permits or requires that holders of any class or series of Shares shall
vote as an individual class or series, then thirty percent (30%) (unless a
larger quorum is required as specified above) of Shares of that class or series
entitled to vote shall be necessary to constitute a quorum for the transaction
of business by that class or series. Any lesser number shall be sufficient for
adjournments. Any adjourned session or sessions may be held, within a reasonable
time after the date set for the original meeting, without the necessity of
further notice. Except when a different vote is required by any provision of law
or the Declaration of Trust or these Bylaws, a plurality of the quorum of Shares
necessary for the transaction of business at a Shareholders' meeting shall
decide any questions and a plurality of Shares voted shall elect a Trustee,
provided that where any provision of law or of the Declaration of Trust or these
Bylaws permits or requires that the holders of any class or series of Shares
shall vote as an individual class or series, then a plurality of the quorum of
Shares of that class or series necessary for the transaction of business by that
class or series at a Shareholders' meeting shall decide that matter insofar as
that class or series is concerned.

      10.4   Action by Written Consent. Any action taken by Shareholders may be
taken without a meeting if a majority of Shareholders entitled to vote on the
matter (or such larger proportion thereof as shall be required by any express
provision of law or the Declaration of Trust or these Bylaws) consent to the
action in writing and such written consents are filed with the records of the
meetings of Shareholders. Such consent shall be treated for all purposes as a
vote taken at a meeting of Shareholders.

      10.5   Record Dates. For the purpose of determining the Shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, or who
are entitled to receive payment of any dividend or of any other distribution,
the Trustees may from time to time fix a time, which shall be not more than 90
days before the date of any meeting of Shareholders or the date for the payment
of any dividend or of any other distribution, as the record date for determining
the Shareholders having the right to notice of and to vote at such meeting and
any adjournment

                                       -7-

<PAGE>

thereof or the right to receive such dividend or distribution, and in such case
only Shareholders of record on such record date shall have the right
notwithstanding any transfer of Shares on the books of the Trust after the
record date; or without fixing such record date the Trustees may for any of such
purposes close the register or transfer books for all or any part of such
period.

      10.6   Advance Notice of Shareholder Nominees for Trustees and Other
Shareholder Proposals.

             (a)  As used in this Section 10.6, the term "annual meeting" refers
      to any annual meeting of Shareholders as well as any special meeting held
      in lieu of an annual meeting as described in the first two sentences of
      Section 10.2 of these Bylaws, and the term "special meeting" refers to all
      meetings of Shareholders other than an annual meeting or a special meeting
      in lieu of an annual meeting.

             (b)  The matters to be considered and brought before any annual or
      special meeting of Shareholders shall be limited to only such matters,
      including the nomination and election of Trustees, as shall be brought
      properly before such meeting in compliance with the procedures set forth
      in this Section 10.6. Only persons who are nominated in accordance with
      the procedures set forth in this Section 10.6 shall be eligible for
      election as Trustees, and no proposal to fix the number of Trustees shall
      be brought before an annual or special meeting of Shareholders or
      otherwise transacted unless in accordance with the procedures set forth in
      this Section 10.6, except as may be otherwise provided in these Bylaws
      with respect to the right of holders of preferred shares of beneficial
      interest, if any, of the Trust to nominate and elect a specified number of
      Trustees in certain circumstances.

             (c)  For any matter to be properly before any annual meeting, the
      matter must be (i) specified in the notice of meeting given by or at the
      direction of a majority of the Trustees and a majority of the Continuing
      Trustees pursuant to Section 10.2 of these Bylaws, (ii) otherwise brought
      before the meeting by or at the direction of a majority of the Continuing
      Trustees (or any duly authorized committee thereof), or (iii) brought
      before the meeting in the manner specified in this Section 10.6(c) by a
      Shareholder of record entitled to vote at the meeting or by a Shareholder
      (a "Beneficial Owner") that holds Shares entitled to vote at the meeting
      through a nominee or "street name" holder of record and that can
      demonstrate to the Trust such indirect ownership and such Beneficial
      Owner's entitlement to vote such Shares, provided that the Shareholder was
      the Shareholder of record or the Beneficial Owner held such Shares at the
      time the notice provided for in this Section 10.6(c) is delivered to the
      Secretary.

             In addition to any other requirements under applicable law and the
      Declaration of Trust and these Bylaws, persons nominated by Shareholders
      for election as Trustees and any other proposals by Shareholders may be
      properly brought before an annual meeting only pursuant to timely notice
      (the "Shareholder Notice") in writing to the Secretary. To be timely, the
      Shareholder Notice must be delivered to or mailed and received at the

                                       -8-

<PAGE>

          principal executive offices of the Trust not less than forty-five (45)
          nor more than sixty (60) days prior to the first anniversary date of
          the date on which the Trust first mailed its proxy materials for the
          prior year's annual meeting; provided, however, with respect to the
          annual meeting to be held in the calendar year 2003, the Shareholder
          Notice must be so delivered or mailed and so received on or before May
          1, 2003; provided further, however, if and only if the annual meeting
          is not scheduled to be held within a period that commences thirty (30)
          days before the first anniversary date of the annual meeting for the
          preceding year and ends thirty (30) days after such anniversary date
          (an annual meeting date outside such period being referred to herein
          as an "Other Annual Meeting Date"), such Shareholder Notice must be
          given in the manner provided herein by the later of the close of
          business on (i) the date forty-five (45) days prior to such Other
          Annual Meeting Date or (ii) the tenth (10/th/) business day following
          the date such Other Annual Meeting Date is first publicly announced or
          disclosed.

                  Any Shareholder desiring to nominate any person or persons (as
         the case may be) for election as a Trustee or Trustees of the Trust
         shall deliver, as part of such Shareholder Notice: (i) a statement in
         writing setting forth (A) the name, age, date of birth, business
         address, residence address and nationality of the person or persons to
         be nominated; (B) the class or series and number of all Shares of the
         Trust owned of record or beneficially by each such person or persons,
         as reported to such Shareholder by such nominee(s); (C) any other
         information regarding each such person required by paragraphs (a), (d),
         (e) and (f) of Item 401 of Regulation S-K or paragraph (b) of Item 22
         of Rule 14a-101 (Schedule 14A) under the Securities Exchange Act of
         1934, as amended (the "Exchange Act"), adopted by the Securities and
         Exchange Commission (or the corresponding provisions of any regulation
         or rule subsequently adopted by the Securities and Exchange Commission
         or any successor agency applicable to the Trust); (D) any other
         information regarding the person or persons to be nominated that would
         be required to be disclosed in a proxy statement or other filings
         required to be made in connection with solicitation of proxies for
         election of Trustees or directors pursuant to Section 14 of the
         Exchange Act and the rules and regulations promulgated thereunder; and
         (E) whether such Shareholder believes any nominee is or will be an
         "interested person" of the Trust (as defined in the Investment Company
         Act of 1940, as amended) and, if not an "interested person,"
         information regarding each nominee that will be sufficient for the
         Trust to make such determination; and (ii) the written and signed
         consent of the person or persons to be nominated to be named as
         nominees and to serve as Trustees if elected. In addition, the Trustees
         may require any proposed nominee to furnish such other information as
         they may reasonably require or deem necessary to determine the
         eligibility of such proposed nominee to serve as a Trustee. Any
         Shareholder Notice required by this Section 10.6(c) in respect of a
         proposal to fix the number of Trustees shall also set forth a
         description of and the text of the proposal, which description and text
         shall state a fixed number of Trustees that otherwise complies with
         applicable law, these Bylaws and the Declaration of Trust.

                  Without limiting the foregoing, any Shareholder who gives a
         Shareholder Notice of any matter proposed to be brought before a
         Shareholder meeting (whether or not

                                       -9-

<PAGE>

          involving nominees for Trustees) shall deliver, as part of such
          Shareholder Notice: (i) the description of and text of the proposal to
          be presented; (ii) a brief written statement of the reasons why such
          Shareholder favors the proposal; (iii) such Shareholder's name and
          address as they appear on the Trust's books; (iv) any other
          information relating to the Shareholder that would be required to be
          disclosed in a proxy statement or other filings required to be made in
          connection with the solicitation of proxies with respect to the
          matter(s) proposed pursuant to Section 14 of the Exchange Act and the
          rules and regulations promulgated thereunder; (v) the class or series
          and number of all Shares of the Trust owned beneficially and of record
          by such Shareholder; (vi) any material interest of such Shareholder in
          the matter proposed (other than as a Shareholder); (vii) a
          representation that the Shareholder intends to appear in person or by
          proxy at the Shareholder meeting to act on the matter(s) proposed;
          (viii) if the proposal involves nominee(s) for Trustees, a description
          of all arrangements or understandings between the Shareholder and each
          proposed nominee and any other person or persons (including their
          names) pursuant to which the nomination(s) are to be made by the
          Shareholder; and (ix) in the case of a Beneficial Owner, evidence
          establishing such Beneficial Owner's indirect ownership of, and
          entitlement to vote, Shares at the meeting of Shareholders. As used in
          this Section 10.6, Shares "beneficially owned" shall mean all Shares
          which such person is deemed to beneficially own pursuant to Rules
          13d-3 and 13d-5 under the Exchange Act.

               (d)   For any matter to be properly before any special meeting,
          the matter must be specified in the notice of meeting given by or at
          the direction of a majority of the Trustees and a majority of the
          Continuing Trustees pursuant to Section 10.2 of these Bylaws. In the
          event the Trust calls a special meeting for the purpose of electing
          one or more Trustees, any Shareholder may nominate a person or persons
          (as the case may be) for election to such position(s) as specified in
          the Trust's notice of meeting if and only if the Shareholder provides
          a notice containing the information required in the Shareholder Notice
          to the Secretary required with respect to annual meetings by Section
          10.6(c) hereof, and such notice is delivered to or mailed and received
          at the principal executive office of the Trust not later than the
          close of business on the tenth (10/th/) day following the day on which
          the date of the special meeting and of the nominees proposed by the
          Trustees to be elected at such meeting are publicly announced or
          disclosed.

               (e)   For purposes of this Section 10.6, a matter shall be deemed
          to have been "publicly announced or disclosed" if such matter is
          disclosed in a press release reported by the Dow Jones News Service,
          Associated Press or comparable national news service, in a document
          publicly filed by the Trust with the Securities and Exchange
          Commission, or in a Web site accessible to the public maintained by
          the Trust or by its investment adviser or an affiliate of such
          investment adviser with respect to the Trust.

               (f)   In no event shall an adjournment or postponement (or a
          public announcement thereof) of a meeting of Shareholders commence a
          new time period (or extend any time period) for the giving of notice
          as provided in this Section 10.6.

                                      -10-

<PAGE>

          (g) The person presiding at any meeting of Shareholders, in addition
     to making any other determinations that may be appropriate to the conduct
     of the meeting, shall have the power and duty to (i) determine whether a
     nomination or proposal of other matters to be brought before a meeting and
     notice thereof have been duly made and given in the manner provided in this
     Section 10.6 and elsewhere in these Bylaws and the Declaration of Trust and
     (ii) if not so made or given, to direct and declare at the meeting that
     such nomination and/or such other matters shall be disregarded and shall
     not be considered. Any determination by the person presiding shall be
     binding on all parties absent manifest error.

          (h) Notwithstanding anything to the contrary in this Section 10.6 or
     otherwise in these Bylaws, unless required by federal law, no matter shall
     be considered at or brought before any annual or special meeting unless
     such matter has been approved for these purposes by a majority of the
     Continuing Trustees and, in particular, no Beneficial Owner shall have any
     rights as a Shareholder except as may be required by federal law.
     Furthermore, nothing in this Section 10.6 shall be construed as creating
     any implication or presumption as to the requirements of federal law.


                             Amendment to the Bylaws

     11.1 General. Except to the extent that the Declaration of Trust or
applicable law requires a vote or consent of Shareholders or a higher vote or
consent by the Trustees and/or the Continuing Trustees, these Bylaws may be
amended, changed, altered or repealed, in whole or part, only by resolution of a
majority of the Trustees and a majority of the Continuing Trustees then in
office at any meeting of the Trustees, or by one or more writings signed by such
Trustees and Continuing Trustees.

                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(D)(3)
<SEQUENCE>5
<FILENAME>dex99d3.txt
<DESCRIPTION>FORM OF SHARE CERTIFICATE OF THE COMMON SHARES
<TEXT>
<PAGE>
                                                                     Exhibit d.3


   TEMPORARY CERTIFICATE - Exchangeable for Definitive Engraved Certificate
                            When Ready for Delivery.

                 ORGANIZED AND EXISTING UNDER AND BY VIRTUE OF
                 THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS

                     PIMCO NEW YORK MUNICIPAL INCOME FUND II

<TABLE>
<S>                                 <C>                                                          <C>
           NUMBER                                                                                   SHARES
            TII                            THIS CERTIFICATE IS TRANSFERABLE IN
     COMMON SHARE(S) OF             THE CITY OF WILMINGTON, DELAWARE OR NEW YORK, NEW YORK           CUSIP 72200Y 10 2
     BENEFICIAL INTEREST                                                                         SEE REVERSE FOR CERTAIN DEFINITIONS
$0.00001 PAR VALUE PER SHARE
</TABLE>

THIS CERTIFIES THAT






is the owner of

     FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF BENEFICIAL INTEREST OF

PIMCO New York Municipal Income Fund II, the said shares being issued, received
and held under and subject to the terms and provisions of the Agreement and
Declaration of Trust dated as of March 29, 2002, establishing the Fund, and
all amendments thereto, copies of which are on file with the Secretary of State
of The Commonwealth of Massachusetts, and the Fund's Bylaws, and all amendments
thereto. The said owner by accepting this certificate agrees to and is bound by
all of the said terms and provisions. The common shares represented hereby are
transferable in writing by the owner thereof in person or by attorney upon
surrender of this certificate to the Fund, properly endorsed for transfer. This
certificate is executed on behalf of the Trustees of the Fund as Trustees and
not individually and the obligations hereof are not binding upon any of the
Trustees, officers or shareholders of the Fund individually but are binding only
upon the assets and property of the Fund. This certificate is not valid until
countersigned and registered by the Transfer Agent and Registrar. WITNESS the
facsimile seal of the Fund and the facsimile signatures of its duly authorized
officers.

     DATED:

[SEAL]

                        /s/ Brian S. Shlissel           /s/ Stephen J. Treadway

                               TREASURER.                       PRESIDENT.


COUNTERSIGNED AND REGISTERED:
                    PFPC Inc.
                    (Wilmington, DE)                        TRANSFER AGENT
                                                            AND REGISTRAR,
BY

                                                         AUTHORIZED SIGNATURE

<TABLE>
<S>                                                        <C>
- ---------------------------------------------------------  --------------------------------------------------------------
               AMERICAN BANK NOTE COMPANY                    PRODUCTION COORDINATOR: JOCELYN WHITAKER: 215-764-8623,8661
              55TH STREET AT SANSOM STREET                               PROOF OF JUNE 7, 2002
                 PHILADELPHIA, PA 19139                                      PIMCO ADVISORY SERVICES
                     (215) 764-8600                                               H 73630 face 1
- ---------------------------------------------------------  --------------------------------------------------------------
SALES: D. BURNS: 617-786-7600                                      OPERATOR:                          eg/HJ
- ---------------------------------------------------------  --------------------------------------------------------------
          HOME 12 / LIVE JOBS / P / PIMCO / 73630                                    Rev 1
- ---------------------------------------------------------  --------------------------------------------------------------
</TABLE>

<PAGE>


     The Fund will furnish a copy of the Agreement and Declaration of Trust and
Bylaws to the holder of this certificate without charge upon written request.

EXPLANATION OF ABBREVIATIONS

The following abbreviations when used in the form of ownership on the face of
this certificate shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.

<TABLE>
<CAPTION>
Abbreviation        Equivalent                              Abbreviation             Equivalent
- ------------        ----------                              ------------             ----------
<S>                 <C>                                     <C>                      <C>
JT TEN              As joint tenants, with right of         TEN IN COM               As tenants in common
                    survivorship and not as tenants         TEN BY ENT               As tenants by the entireties
                    in common                               UNIF TRANSFERS MIN ACT   Uniform Transfers to Minors Act

Abbreviation        Equivalent                              Abbreviation             Equivalent
- ------------        ----------                              ------------             ----------
ADM                 Administrator(s)                        FDN                      Foundation
                    Administratrix                          PL                       Public Law
AGMT                Agreement                               TR                       (As) trustee(s), for, of
CUST                Custodian for                           UA                       Under Agreement
EST                 Estate, Of estate of                    UW                       Under will of, Or will, of
EX                  Executors(s), Executrix                                          Under last will & Testament
FBO                 For the benefit of

                              Additional abbreviations may also be used though not in the above list.

- ------------------------------------------------------------------------------------------------------------------------------------

                                                           TRANSFER FORM

     FOR VALUE RECEIVED, _____________________________________________________________________ hereby sell, assign and transfer unto
                                                          (I/We)

 PLEASE INSERT SOCIAL SECURITY OR OTHER
    IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________
                        Please print or typewrite name and address (including postal zip code of assignee)
____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

_______________________________________________________________________________________________ Common Shares of Beneficial Interest
represented by this Certificate and do hereby irrevocably constitute and appoint

__________________________________________________________________________________________________________________________ Attorney,
to transfer said shares on the books of the Fund with full power of substitution in the premises.

Dated:                                                         _____________________________________________________________________

                                                                 Signature(s) ______________________________________________________
                                                               (The signature to this assignment must correspond with the name as
                                                               written upon the face of this Certificate in every particular,
                                                               without alteration or enlargement or any change whatsoever. If more
                                                               than one owner, all must sign).

                                                               SIGNATURE(S) GUARANTEED: _____________________________________
                                                               THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
                                                               GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN
                                                               ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
                                                               SIGNATURE GUARANTEE MEDALLION PROGRAM). PURSUANT TO S.E.C.
</TABLE>

                               IMPORTANT NOTICE:

     When you sign your name to the Transfer Form without filling in the name of
your "Assignee" this certificate becomes fully negotiable, similar to a check
endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the "Assignee" space.
     Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the unsigned certificate and the signed "stock
power" in separate envelopes. For added protection, use registered mail for a
certificate.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(E)
<SEQUENCE>6
<FILENAME>dex99e.txt
<DESCRIPTION>TERMS AND COND OF DIVIDEND REINVEST PLAN
<TEXT>
<PAGE>

                                                                      Exhibit e.

                     PIMCO NEW YORK MUNICIPAL INCOME FUND II

             TERMS AND CONDITIONS OF THE DIVIDEND REINVESTMENT PLAN

     Registered holders ("Common Shareholders") of common shares of beneficial
interest (the "Common Shares") of PIMCO New York Municipal Income Fund II (the
"Fund") will automatically be enrolled (the "Participants") in its Dividend
Reinvestment Plan (the "Plan") and are advised as follows:

     1. THE PLAN AGENT. PFPC Inc. (the "Agent") will act as Agent for each
Participant. The Agent will open an account for each Participant under the Plan
in the same name in which his or her outstanding Common Shares are registered.

     2. CASH OPTION. The Fund will declare its income dividends and capital
gains distributions ("Distributions") payable in Common Shares, or, at the
option of Common Shareholders, in cash. Therefore, each Participant will have
all Distributions on his or her Common Shares automatically reinvested in
additional Common Shares, unless such Participant elects to receive such
Distributions in cash by contacting the Agent.

     3. MARKET PREMIUM ISSUANCES. If on the payment date for a Distribution, the
net asset value per Common Share is equal to or less than the market price per
Common Share plus estimated brokerage commissions, the Agent shall receive newly
issued Common Shares ("Additional Common Shares"), including fractions, from the
Fund for each Participant's account. The number of Additional Common Shares to
be credited shall be determined by dividing the dollar amount of the
Distribution by the greater of (i) the net asset value per Common Share on the
payment date, or (ii) 95% of the market price per Common Share on the payment
date.

     4. MARKET DISCOUNT PURCHASES. If the net asset value per Common Share
exceeds the market price plus estimated brokerage commissions on the payment
date for a Distribution, the Agent (or a broker-dealer selected by the Agent)
shall endeavor to apply the amount of such Distribution on each Participant's
Common Shares to purchase Common Shares on the open market. Such purchases will
be made on or shortly after the payment date for such Distribution but in no
event will purchases be made on or after the ex-dividend date for the next
Distribution. The weighted average price (including brokerage commissions) of
all Common Shares purchased by the Agent as Agent shall be the price per Common
Share allocable to each Participant. If, before the Agent has completed its
purchases, the market price plus estimated brokerage commissions exceeds the net
asset value of the Common Shares as of the payment date, the purchase price paid
by the Agent may exceed the net asset value of the Common Shares, resulting in
the acquisition of fewer Common Shares than if such Distribution had been paid
in Common Shares issued by the Fund. Participants should note that they will not
be able to instruct the Agent to purchase Common Shares at a specific time or at
a specific price. Open-market purchases may be made on any securities exchange
where Common Shares are traded, in the over-the-counter market or in negotiated
transactions, and may be on such terms as to price, delivery and otherwise as
the Agent shall determine.

<PAGE>

     5. VALUATION. The market price of Common Shares on a particular date shall
be the last sales price on the securities exchange where the Common Shares are
listed on that date (the "Exchange"), or, if there is no sale on such Exchange
on that date, then the mean between the closing bid and asked quotations on such
Exchange on such date will be used. The net asset value per Common Share on a
particular date shall be the amount calculated on that date (or if not
calculated on such date, the amount most recently calculated) by or on behalf of
the Fund in accordance with the Fund's current prospectus.

     6. SAFEKEEPING. In order to protect against loss, theft or destruction,
Participants may deposit Common Shares registered in their own names and held in
certificate form into their Plan accounts. Certificates, along with a letter of
instruction, should be sent to the Agent by registered mail, insured for 2% of
their market value. Participants should not endorse their certificates. There
are no fees for this service.

     7. TAXATION. The automatic reinvestment of Distributions does not relieve
Participants of any taxes which may be payable on Distributions. Participants
will receive tax information annually for their personal records and to help
them prepare their federal income tax return. For further information as to tax
consequences of participation in the Plan, Participants should consult with
their own tax advisors.

     8. LIABILITY OF AGENT. The Agent shall at all times act in good faith and
agrees to use its best efforts within reasonable limits to ensure the accuracy
of all services performed under this Agreement and to comply with applicable
law, but assumes no responsibility and shall not be liable for loss or damage
due to errors unless such error is caused by the Agent's negligence, bad faith,
or willful misconduct or that of its employees. Each Participant's uninvested
funds held by the Agent will not bear interest. The Agent shall have no
liability in connection with any inability to purchase Common Shares within the
time provided, or with the timing of any purchases effected. The Agent shall
have no responsibility for the value of Common Shares acquired. The Agent may
commingle Participants' funds.

     9. RECORDKEEPING. The Agent may hold each Participant's Common Shares
acquired pursuant to the Plan together with the Common Shares of other Common
Shareholders of the Fund acquired pursuant to the Plan in non-certificated form
in the Agent's name or that of the Agent's nominee. Distributions on fractional
shares will be credited to each Participant's account. Each Participant will be
sent a confirmation by the Agent of each acquisition made for his or her account
as soon as practicable, but in no event later than 60 days, after the date
thereof. Upon a Participant's request, the Agent will deliver to the
Participant, without charge, a certificate or certificates for the full Common
Shares. Although each Participant may from time to time have an undivided
fractional interest (computed to four decimal places) in a Common Share of the
Fund, no certificates for a fractional share will be issued. Participants may
request a certificate by calling the Agent at (800) 331-1710, writing to the
Agent at P.O. Box 43027, Providence RI 02940-3027, or completing and returning
the transaction form attached to each Plan statement. The Agent will issue
certificates as soon as possible but in no event more than 5 business days after
receipt of a Participant's request. Similarly, Participants may request to sell
a portion of the Common Shares held by the Agent in their Plan accounts by
calling the Agent, writing to the Agent, or completing and returning the
transaction form attached to each Plan

                                       -2-

<PAGE>

statement. The Agent will sell such Common Shares through a broker-dealer
selected by the Agent within 5 business days of receipt of the request. The sale
price will equal the weighted average price of all Common Shares sold through
the Plan on the day of the sale, less brokerage commissions. Participants should
note that the Agent is unable to accept instructions to sell on a specific date
or at a specific price. Any share dividends or split shares distributed by the
Fund on Common Shares held by the Agent for Participants will be credited to
their accounts. In the event that the Fund makes available to its Common
Shareholders rights to purchase additional Common Shares, the Common Shares held
for each Participant under the Plan will be added to other Common Shares held by
the Participant in calculating the number of rights to be issued to each
Participant.

     10. PROXY MATERIALS. The Agent will forward to each Participant any proxy
solicitation material. The Agent will vote any Common Shares held for a
Participant first in accordance with the instructions set forth on proxies
returned by such Participant to the Fund, and then with respect to any proxies
not returned by such Participant to the Fund, in the same proportion as the
Agent votes the proxies returned by the Participants to the Fund.

     11. BROKERS, NOMINEE HOLDERS, ETC. In the case of shareholders such as
banks, brokers or nominees that hold Common Shares for others who are the
beneficial owners, the Agent will administer the Plan on the basis of the number
of Common Shares certified by the record shareholder as representing the total
amount registered in such shareholder's name and held for the account of
beneficial owners who are to participate in the Plan.

     12. FEES. The Agent's service fee for handling Distributions will be paid
by the Fund. Each Participant will be charged his or her pro rata share of
brokerage commissions on all open-market purchases. If a Participant elects to
have the Agent sell part or all of his or her Common Shares and remit the
proceeds, such Participant will be charged his or her pro rata share of
brokerage commissions on the shares sold. The Participant will not be charged
any other fees for this service.

     13. TERMINATION IN THE PLAN. Each registered Participant may terminate his
or her account under the Plan by notifying the Agent in writing at P.O. Box
43027, Providence, RI 02940-3027, by calling the Agent at (800) 331-1710 or by
completing and returning the transaction form attached to each Plan statement.
Such termination will be effective with respect to a particular Distribution if
the Participant's notice is received by the Agent at least ten days prior to
such Distribution record date. The Plan may be terminated by the Agent or the
Fund upon notice in writing mailed to each Participant at least 60 days prior to
the effective date of the termination. Upon any termination, the Agent will
cause a certificate or certificates to be issued for the full shares held for
each Participant under the Plan and cash adjustment for any fraction of a Common
Share at the then current market value of the Common Shares to be delivered to
him or her without charge. If preferred, a Participant may request the sale of
all of the Common Shares held by the Agent in his or her Plan account in order
to terminate participation in the Plan. If a Participant has terminated his or
her participation in the Plan but continues to have Common Shares registered in
his or her name, he or she may re-enroll in the Plan at any time by calling the
Agent at (800) 331-1710.

                                       -3-


<PAGE>

     14. AMENDMENT OF THE PLAN. These terms and conditions may be amended by the
Agent or the Fund at any time but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 30 days prior to the effective
date thereof. The amendment shall be deemed to be accepted by each Participant
unless, prior to the effective date thereof, the Agent receives notice of the
termination of the Participant's account under the Plan. Any such amendment may
include an appointment by the Agent of a successor Agent, subject to the prior
written approval of the successor Agent by the Fund.

     15. APPLICABLE LAW. These terms and conditions shall be governed by the
laws of The Commonwealth of Massachusetts.

                                       -4-



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(G)(1)
<SEQUENCE>7
<FILENAME>dex99g1.txt
<DESCRIPTION>INVESTMENT MANAGEMENT AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit g.1

                         INVESTMENT MANAGEMENT AGREEMENT

                     PIMCO New York Municipal Income Fund II

     This Investment Management Agreement is executed as of June 18, 2002 by and
between PIMCO NEW YORK MUNICIPAL INCOME FUND II, a Massachusetts business trust
(the "Fund"), and PIMCO FUNDS ADVISORS LLC, a Delaware limited liability company
(the "Manager").

                                   WITNESSETH:

     That in consideration of the mutual covenants herein contained, it is
agreed as follows:

1.   SERVICES TO BE RENDERED BY THE MANAGER TO THE FUND.

     (a) Subject always to the control of the Trustees of the Fund and to such
policies as the Trustees may determine, the Manager will, at its expense, (i)
furnish continuously an investment program for the Fund and will make investment
decisions on behalf of the Fund and place all orders for the purchase and sale
of portfolio securities and (ii) furnish office space and equipment, provide
bookkeeping and clerical services (excluding determination of net asset value
and shareholder accounting services) and pay all salaries, fees and expenses of
officers and Trustees of the Fund who are affiliated with the Manager. In the
performance of its duties, the Manager will comply with the provisions of the
Agreement and Declaration of Trust and By-laws of the Fund, each as amended from
time to time, and the Fund's stated investment objectives, policies and
restrictions.

     (b) In the selection of brokers or dealers and the placing of orders for
the purchase and sale of portfolio investments for the Fund, the Manager shall
seek to obtain for the Fund the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. In using its best efforts to
obtain for the Fund the most favorable price and execution available, the
Manager, bearing in mind the Fund's best interests at all times, shall consider
all factors it deems relevant, including by way of illustration, price, the size
of the transaction, the nature of the market for the security, the amount of the
commission, the timing of the transaction taking into account market prices and
trends, the reputation, experience and financial stability of the broker or
dealer involved and the quality of service rendered by the broker or dealer in
other transactions. Subject to such policies as the Trustees may determine, the
Manager shall not be deemed to have



<PAGE>

acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage and research services to the Manager an amount of
commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Manager determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Manager's overall responsibilities with respect to
the Fund and to other clients of the Manager as to which the Manager exercises
investment discretion. The Fund hereby agrees with the Manager and with any
Portfolio Manager selected by the Manager as provided in Section 1(c) hereof
that any entity or person associated with the Manager which is a member of a
national securities exchange is authorized to effect any transaction on such
exchange for the account of the Fund which is permitted by Section 11(a) of the
Securities Exchange Act of 1934 (the "1934 Act").

     (c) Subject to the provisions of the Agreement and Declaration of Trust of
the Fund and the Investment Company Act of 1940 and the rules and regulations
thereunder, as amended from time to time (the "1940 Act"), the Manager, at its
expense, may select and contract with investment advisers (the "Portfolio
Managers") for the Fund. The Manager shall retain any Portfolio Manager pursuant
to a portfolio management agreement the terms and conditions of which are
acceptable to the Fund. If the Manager retains a Portfolio Manager hereunder,
then unless otherwise provided in the applicable portfolio management agreement,
the obligation of the Manager under this Agreement with respect to the Fund
shall be, subject in any event to the control of the Trustees of the Fund, to
determine and review with the Portfolio Manager the investment policies of the
Fund, and the Portfolio Manager shall have the obligation of furnishing
continuously an investment program and making investment decisions for the Fund,
adhering to applicable investment objectives, policies and restrictions, and
placing all orders for the purchase and sale of portfolio securities for the
Fund. The Manager (and not the Fund) will compensate any Portfolio Manager for
its services to the Fund. Subject to the provisions of the applicable portfolio
management agreement with the Portfolio Manager, the Manager may terminate the
services of any Portfolio Manager at any time in its sole discretion, and shall
at such time assume the responsibilities of such Portfolio Manager unless and
until a successor Portfolio Manager is selected.

     (d) The Manager shall not be obligated to pay any expenses of or for the
Fund not expressly assumed by the Manager pursuant to this Section 1 other than
as provided in Section 3.

                                       -2-

<PAGE>

2.   OTHER AGREEMENTS, ETC.

     It is understood that any of the shareholders, Trustees, officers and
employees of the Fund may be a shareholder, partner, director, officer or
employee of, or be otherwise interested in, the Manager, and in any person
controlled by or under common control with the Manager, and that the Manager and
any person controlled by or under common control with the Manager may have an
interest in the Fund. It is also understood that the Manager and persons
controlled by or under common control with the Manager have and may have
advisory, management service, distribution or other contracts with other
organizations and persons, and may have other interests and businesses.

3.   COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.

     The Fund will pay to the Manager as compensation for the Manager's services
rendered, for the facilities furnished and for the expenses borne by the Manager
pursuant to Section 1, a fee, computed and paid monthly at the annual rate of
0.650% of the average daily net asset value of the Fund (including daily net
assets attributable to any preferred shares of the Fund that may be
outstanding). The average daily net asset value of the Fund shall be determined
by taking an average of all of the determinations of such net asset value during
such month at the close of business on each business day during such month while
this Agreement is in effect. Such fee shall be payable for each month within
five (5) business days after the end of such month.

     In the event that the Manager has agreed to a fee waiver or an expense
limitation or reimbursement arrangement with the Fund, subject to such terms and
conditions as the Manager and the Fund may set forth in such agreement, the
compensation due the Manager hereunder shall be reduced, and, if necessary, the
Manager shall bear expenses with respect to the Fund, to the extent required by
such fee waiver or expense limitation or reimbursement arrangement.

     If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.

4.   ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.

     This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Agreement shall not be amended
as to the Fund unless such amendment is approved at a meeting by the affirmative
vote of a majority of the outstanding shares of the Fund, and by the vote, cast
in person at a meeting called for the purpose of voting

                                       -3-

<PAGE>

on such approval, of a majority of the Trustees of the Fund who are not
interested persons of the Fund or of the Manager or of any Portfolio Manager of
the Fund.

5.   EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.

     This Agreement shall become effective upon its execution, and shall remain
in full force and effect as to the Fund continuously thereafter (unless
terminated automatically as set forth in Section 4) until terminated as follows:

          (a) Either party hereto may at any time terminate this Agreement by
     not more than sixty days' written notice delivered or mailed by registered
     mail, postage prepaid, to the other party, or

          (b) If (i) the Trustees of the Fund or the shareholders by the
     affirmative vote of a majority of the outstanding shares of the Fund, and
     (ii) a majority of the Trustees of the Fund who are not interested persons
     of the Fund or of the Manager or any Portfolio Manager, by vote cast in
     person at a meeting called for the purpose of voting on such approval, do
     not specifically approve at least annually the continuance of this
     Agreement, then this Agreement shall automatically terminate at the close
     of business on the second anniversary of its execution, or upon the
     expiration of one year from the effective date of the last such
     continuance, whichever is later; provided, however, that if the continuance
     of this Agreement is submitted to the shareholders of the Fund for their
     approval and such shareholders fail to approve such continuance of this
     Agreement as provided herein, the Manager may continue to serve hereunder
     in a manner consistent with the 1940 Act.

     Action by the Fund under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.

     Termination of this Agreement pursuant to this Section 5 shall be without
the payment of any penalty.

6.   CERTAIN DEFINITIONS.

     For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more

                                       -4-

<PAGE>

than 50% of the outstanding shares of the Fund entitled to vote at such meeting,
whichever is less.

     For the purposes of this Agreement, the terms "affiliated person",
"control", "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the 1940 Act; and the term "brokerage and research services"
shall have the meaning given in the 1934 Act and the rules and regulations
thereunder.

7.   NONLIABILITY OF MANAGER.

     Notwithstanding any other provisions of this Agreement, in the absence of
willful misfeasance, bad faith or gross negligence on the part of the Manager,
or reckless disregard of its obligations and duties hereunder, the Manager,
including its officers, directors and partners, shall not be subject to any
liability to the Fund, or to any shareholder, officer, director, partner or
Trustee thereof, for any act or omission in the course of, or connected with,
rendering services hereunder.

8.   LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.

     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 instrument is executed on behalf of the Trustees of the
Fund as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund.

9.   USE OF NAMES AND LOGOS.

     It is expressly understood that the names "PIMCO Funds Advisors," "PIMCO
Advisors," "Pacific Investment Management Company," "PIMCO" and "PIMCO Funds",
or any derivation thereof, or any logo associated with those names, are the
valuable property of the Manager and its affiliates, and that the Fund shall
have the limited right to use such names (or derivations thereof or associated
logos) only so long as the Manager shall consent and this Agreement shall remain
in effect. Upon reasonable notice from the Manager to the Fund or upon
termination of this Agreement, the Fund shall forthwith cease to use such names
(or derivations thereof or associated logos) and shall promptly amend its
Declaration of Trust and other public documents to change its name accordingly.
The covenants on the part of the Fund in this Section 9 shall be

                                       -5-

<PAGE>

binding upon it, its trustees, officers, stockholders, creditors and all other
persons claiming under or through it, and shall survive the termination of this
Agreement.

10.  COUNTERPARTS.

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original.

                                       -6-

<PAGE>

     IN WITNESS WHEREOF, PIMCO NEW YORK MUNICIPAL INCOME FUND II and PIMCO FUNDS
ADVISORS LLC have each caused this instrument to be signed in its behalf by its
duly authorized representative, all as of the day and year first above written.


                                         PIMCO NEW YORK MUNICIPAL INCOME FUND II


                                         By: /s/ Newton B. Schott, Jr.
                                            ------------------------------------
                                         Name:  Newton B. Schott, Jr.
                                         Title: Vice President and Secretary



                                         PIMCO FUNDS ADVISORS LLC


                                         By: /s/ Stephen J. Treadway
                                            ------------------------------------
                                         Name:  Stephen J. Treadway
                                         Title: Managing Director

                                       -7-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(G)(2)
<SEQUENCE>8
<FILENAME>dex99g2.txt
<DESCRIPTION>PORTFOLIO MANAGEMENT AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit g.2


                         PORTFOLIO MANAGEMENT AGREEMENT

                     PIMCO New York Municipal Income Fund II

       This Portfolio Management Agreement is executed as of June 18, 2002 by
and between PIMCO FUNDS ADVISORS LLC, a Delaware limited liability company (the
"Manager"), and PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, a Delaware limited
liability company (the "Portfolio Manager").

                                   WITNESSETH:

       That in consideration of the mutual covenants herein contained, it is
       agreed as follows:

1.     SERVICES TO BE RENDERED BY THE PORTFOLIO MANAGER TO THE FUND.

       (a)    Subject always to the direction and oversight of the Trustees of
              PIMCO New York Municipal Income Fund II (the "Fund"), a
              Massachusetts business trust, the Portfolio Manager, at its
              expense, will furnish continuously an investment program for the
              Fund and will make investment decisions on behalf of the Fund and
              place all orders for the purchase and sale of portfolio securities
              and all other investments. In the performance of its duties, the
              Portfolio Manager (1) will comply with the provisions of the
              Fund's Agreement and Declaration of Trust and Bylaws, including
              any amendments thereto (upon receipt of such amendments by the
              Portfolio Manager), and the investment objectives, policies and
              restrictions of the Fund as set forth in its current Prospectus
              and Statement of Additional Information (copies of which will be
              supplied to the Portfolio Manager upon filing with the Securities
              and Exchange Commission (the "SEC")), (2) will use its best
              efforts to safeguard and promote the welfare of the Fund and (3)
              will comply with other policies which the Trustees or the Manager,
              as the case may be, may from time to time determine as promptly as
              practicable after such policies have been communicated to the
              Portfolio Manager in writing. The Portfolio Manager and the
              Manager shall each make its officers and employees available to
              the other from time to time at reasonable times to review
              investment policies of the Fund and to consult with each other
              regarding investment affairs of the Fund.

       (b)    The Portfolio Manager, at its expense, will furnish (i) all
              necessary investment and management facilities, including salaries
              of personnel, required for it to execute its duties hereunder
              faithfully and (ii) administrative facilities, including
              bookkeeping, clerical personnel and equipment necessary for the
              efficient conduct of the investment affairs of the Fund, including
              verification and oversight of the pricing of the Fund's portfolio
              (but excluding determination of net asset value and shareholder
              accounting services).

<PAGE>

       (c)    In the selection of brokers or dealers and the placing of orders
              for the purchase and sale of portfolio investments for the Fund,
              the Portfolio Manager shall use its best efforts to obtain for the
              Fund the most favorable price and execution available, except to
              the extent it may be permitted to pay higher brokerage commissions
              for brokerage and research services as described below. In using
              its best efforts to obtain for the Fund the most favorable price
              and execution available, the Portfolio Manager, bearing in mind
              the Fund's best interests at all times, shall consider all factors
              it deems relevant, including, by way of illustration, price, the
              size of the transaction, the nature of the market for the
              security, the amount of the commission, the timing of the
              transaction taking into account market prices and trends, the
              reputation, experience and financial stability of the broker or
              dealer involved and the quality of service rendered by the broker
              or dealer in other transactions. Subject to such policies as the
              Trustees of the Fund may determine and communicate to the
              Portfolio Manager in writing, the Portfolio Manager shall not be
              deemed to have acted unlawfully or to have breached any duty
              created by this Agreement or otherwise solely by reason of its
              having caused the Fund to pay a broker or dealer that provides
              brokerage and research services to the Portfolio Manager or its
              affiliates an amount of commission for effecting a portfolio
              investment transaction in excess of the amount of commission
              another broker or dealer would have charged for effecting that
              transaction, if the Portfolio Manager determines in good faith
              that such amount of commission was reasonable in relation to the
              value of the brokerage and research services provided by such
              broker or dealer, viewed in terms of either that particular
              transaction or the Portfolio Manager's overall responsibilities
              with respect to the Fund and to other clients of the Portfolio
              Manager and its affiliates as to which the Portfolio Manager and
              its affiliates exercise investment discretion. The Fund agrees
              that any entity or person associated with the Portfolio Manager or
              its affiliates which is a member of a national securities exchange
              is expressly authorized to effect any transaction on such exchange
              for the account of the Fund which is permitted by Section 11(a) of
              the Securities Exchange Act of 1934 (the "1934 Act").


       (d)    The Portfolio Manager shall not be obligated to pay any expenses
              of or for the Fund not expressly assumed by the Portfolio Manager
              pursuant to this Section 1.

2.     OTHER AGREEMENTS, ETC.

       It is understood that any of the shareholders, Trustees, officers and
       employees of the Fund may be a shareholder, member, director, officer or
       employee of, or be otherwise interested in, the Portfolio Manager, and in
       any person controlled by or under common control with the Portfolio
       Manager, and that the Portfolio Manager and any person controlled by or
       under common control with the Portfolio Manager may have an interest in
       the Fund. It is also understood that the Portfolio Manager and persons
       controlled by or under common control with the Portfolio Manager have and
       may have advisory,

                                       -2-

<PAGE>

       management service or other contracts with other organizations and
       persons, and may have other interests and businesses.

3.     COMPENSATION TO BE PAID BY THE MANAGER TO THE PORTFOLIO MANAGER.

       The Manager will pay the Portfolio Manager as compensation for the
       Portfolio Manager's services rendered and for the expenses borne by the
       Portfolio Manager pursuant to Section 1, a fee computed and paid monthly
       at the annual rate of 0.50% of the average daily net asset value of the
       Fund (including daily net assets attributable to any preferred shares of
       the Fund that may be outstanding). Such fee shall be payable for each
       month within 10 business days after the end of such month.

       In the event that the Portfolio Manager has agreed to a fee waiver
       arrangement with the Manager, subject to such terms and conditions as the
       Manager and the Portfolio Manager may set forth in such agreement, the
       compensation due the Portfolio Manager hereunder shall be reduced to the
       extent required by such fee waiver arrangement.

       If the Portfolio Manager shall serve for less than the whole of a month,
       the foregoing compensation shall be prorated.

4.     ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.

       This Agreement shall automatically terminate, without the payment of any
       penalty, in the event of its assignment or in the event that the
       Investment Management Agreement between the Manager and the Fund shall
       have terminated for any reason; and this Agreement shall not be amended
       unless such amendment is approved at a meeting by the affirmative vote of
       a majority of the outstanding shares of the Fund, and by the vote, cast
       in person at a meeting called for the purpose of voting on such approval,
       of a majority of the Trustees of the Fund who are not interested persons
       of the Fund or of the Manager or the Portfolio Manager.

5.     EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.

       This Agreement shall become effective upon its execution, and shall
       remain in full force and effect as to the Fund continuously thereafter
       (unless terminated automatically as set forth in Section 4) until
       terminated as follows:

       (a)    The Fund may at any time terminate this Agreement by written
              notice delivered or mailed by registered mail, postage prepaid, to
              the Manager and the Portfolio Manager, or

                                       -3-

<PAGE>

       (b)    If (i) the Trustees of the Fund or the shareholders by the
              affirmative vote of a majority of the outstanding shares of the
              Fund, and (ii) a majority of the Trustees of the Fund who are not
              interested persons of the Fund or of the Manager or of the
              Portfolio Manager, by vote cast in person at a meeting called for
              the purpose of voting on such approval, do not specifically
              approve at least annually the continuance of this Agreement, then
              this Agreement shall automatically terminate at the close of
              business on the second anniversary of its execution, or upon the
              expiration of one year from the effective date of the last such
              continuance, whichever is later; provided, however, that if the
              continuance of this Agreement is submitted to the shareholders of
              the Fund for their approval and such shareholders fail to approve
              such continuance of this Agreement as provided herein, the
              Portfolio Manager may continue to serve hereunder in a manner
              consistent with the Investment Company Act of 1940, as amended
              from time to time, and the rules and regulations thereunder (the
              "1940 Act"), or

       (c)    The Manager may at any time terminate this Agreement by not less
              than 60 days' written notice delivered or mailed by registered
              mail, postage prepaid, to the Portfolio Manager, and the Portfolio
              Manager may at any time terminate this Agreement by not less than
              60 days' written notice delivered or mailed by registered mail,
              postage prepaid, to the Manager.

              Action by the Fund under (a) above may be taken either (i) by vote
              of a majority of the Trustees, or (ii) by the affirmative vote of
              a majority of the outstanding shares of the Fund.

              Termination of this Agreement pursuant to this Section 5 shall be
              without the payment of any penalty.

6.     CERTAIN INFORMATION.

       The Portfolio Manager shall promptly notify the Manager in writing of the
       occurrence of any of the following events: (a) the Portfolio Manager
       shall fail to be registered as an investment adviser under the Investment
       Advisers Act of 1940, as amended from time to time, (b) the Portfolio
       Manager shall have been served or otherwise have notice of any action,
       suit, proceeding, inquiry or investigation, at law or in equity, before
       or by any court, public board or body, involving the affairs of the Fund,
       (c) there is a change in control of the Portfolio Manager or any parent
       of the Portfolio Manager within the meaning of the 1940 Act, or (d) there
       is a material adverse change in the business or financial position of the
       Portfolio Manager.

7.     CERTAIN DEFINITIONS.

       For the purposes of this Agreement, the "affirmative vote of a majority
       of the outstanding shares" means the affirmative vote, at a duly called
       and held meeting of shareholders,

                                       -4-

<PAGE>

       (a) of the holders of 67% or more of the shares of the Fund, as the case
       may be, present (in person or by proxy) and entitled to vote at such
       meeting, if the holders of more than 50% of the outstanding shares of the
       Fund, as the case may be, entitled to vote at such meeting are present in
       person or by proxy, or (b) of the holders of more than 50% of the
       outstanding shares of the Fund, as the case may be, entitled to vote at
       such meeting, whichever is less.

       For the purposes of this Agreement, the terms "affiliated person,"
       "control," "interested person" and "assignment" shall have their
       respective meanings defined in the 1940 Act; the term "specifically
       approve at least annually" shall be construed in a manner consistent with
       the 1940 Act and the rules and regulations thereunder, subject, however,
       to such exemptions as may be granted by the SEC under the 1940 Act and
       the rules and regulations thereunder; and the term "brokerage and
       research services" shall have the meaning given in the 1934 Act and the
       rules and regulations thereunder.

8.     NONLIABILITY OF PORTFOLIO MANAGER.

       Notwithstanding any other provisions of this Agreement, in the absence of
       willful misfeasance, bad faith or gross negligence on the part of the
       Portfolio Manager, or reckless disregard of its obligations and duties
       hereunder, the Portfolio Manager, including its officers, directors and
       members, shall not be subject to any liability to the Manager, to the
       Fund, or to any shareholder, officer, director, partner or Trustee
       thereof, for any act or omission in the course of, or connected with,
       rendering services hereunder.

9.     LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.

       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 instrument is executed on behalf of the
       Trustees of the Fund as Trustees and not individually and that the
       obligations of this instrument are not binding upon any of the Trustees
       or shareholders individually but are binding only upon the assets and
       property of the Fund.

10.    EXERCISE OF VOTING RIGHTS.

       Except with the agreement or on the specific instructions of the Trustees
       of the Fund or the Manager, the Portfolio Manager shall not exercise or
       procure the exercise of any voting right attaching to investments of the
       Fund.

11.    COUNTERPARTS.

       This Agreement may be signed in one or more counterparts, each of which
       shall be deemed to be an original.

                                       -5-

<PAGE>

       IN WITNESS WHEREOF, PIMCO FUNDS ADVISORS LLC and PACIFIC INVESTMENT
MANAGEMENT COMPANY LLC have each caused this instrument to be signed on its
behalf by its duly authorized representative, all as of the day and year first
above written.


PIMCO FUNDS ADVISORS LLC                  PACIFIC INVESTMENT MANAGEMENT
                                                COMPANY LLC



By:    /s/ Stephen J. Treadway            By:   /s/ Chris P. Dialynas
       ------------------------                 ----------------------
Name:  Stephen J. Treadway                Name: Chris P. Dialynas
Title: Managing Director                  Title: Managing Director



Accepted and agreed to as of the
day and year first above written:

PIMCO NEW YORK MUNICIPAL INCOME FUND II


By:    /s/ Newton B. Schott, Jr.
       -------------------------------
Name:  Newton B. Schott, Jr.
Title: Vice President and Secretary

                                       -6-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(H)(1)
<SEQUENCE>9
<FILENAME>dex99h1.txt
<DESCRIPTION>FORM OF UNDERWRITING AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit h.1

                     PIMCO New York Municipal Income Fund II


                [_________] Common Shares of Beneficial Interest

                          Par Value $0.00001 per Share

                             UNDERWRITING AGREEMENT

June [___], 2002

<PAGE>

                             UNDERWRITING AGREEMENT

                                                                June [___], 2002



UBS Warburg LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
A.G. Edwards & Sons, Inc.
First Union Securities, Inc.
Prudential Securities Incorporated
Quick & Reilly, Inc. A FleetBoston Financial Company
Raymond James & Associates, Inc.
RBC Dain Rauscher Incorporated
Advest, Inc.
Fahnestock & Co. Inc.
   as Managing Underwriters
299 Park Avenue
New York, New York 10171-0026

Ladies and Gentlemen:


     PIMCO New York Municipal Income Fund II, 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"), proposes to issue and sell to the underwriters
named in Schedule A annexed hereto (the "Underwriters") an aggregate of
[_________] common shares of beneficial interest (the "Firm Shares"), par value
$0.00001 per share (the "Common Shares"), of the Fund. In addition, solely for
the purpose of covering over-allotments, the Fund proposes to grant to the
Underwriters the option to purchase from the Fund up to an additional [_______]
Common Shares (the "Additional Shares"). The Firm Shares and the Additional
Shares are hereinafter collectively sometimes referred to as the Shares. The
Shares are described in the Prospectus which is referred to below.

     The Fund has filed, in accordance with the provisions of the Securities Act
of 1933, as amended, and the rules and regulations thereunder (collectively
called the "Act"), and with the provisions of the Investment Company Act of
1940, as amended, and the rules and regulations thereunder (collectively called
the "Investment Company Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (File Nos. 333-86284 and
811-21078), including a prospectus and a statement of additional information,
relating to the Shares. The Fund has furnished to you, for use by the
Underwriters and by dealers, copies of one or more preliminary prospectuses
(including a preliminary statement of additional information) (each thereof,
including such preliminary statement of additional information, being herein
called a "Preliminary Prospectus") relating to the Shares. Except where the
context otherwise

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requires, the registration statement, as amended when it becomes effective (the
"Effective Date"), including all documents filed as a part thereof or
incorporated by reference therein, and including any information contained in a
prospectus subsequently filed with the Commission pursuant to Rule 497 under the
Act and deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act is herein called the
Registration Statement, and the prospectus (including the statement of
additional information), in the form filed by the Fund with the Commission
pursuant to Rule 497 under the Act or, if no such filing is required, the form
of final prospectus (including the form of final statement of additional
information) included in the Registration Statement at the time it became
effective, is herein called the Prospectus. In addition, the Fund has filed a
Notification of Registration on Form N-8A (the "Notification") pursuant to
Section 8 of the Investment Company Act.

     PIMCO Funds Advisors LLC ("PIMCO Funds Advisors," or the "Investment
Manager") will act as the Fund's investment manager pursuant to an Investment
Management Agreement by and between the Fund and the Investment Manager, dated
as of June [___], 2002 (the "Investment Management Agreement"). Pacific
Investment Management Company LLC ("PIMCO," or the "Portfolio Manager") will act
as the Fund's portfolio manager pursuant to a Portfolio Management Agreement by
and between the Investment Manager and PIMCO, as accepted and agreed to by the
Fund, dated as of June [___], 2002. State Street Bank & Trust Co. will act as
the custodian (the "Custodian") of the Fund's cash and portfolio assets pursuant
to a Custodian Agreement, dated as of June [___], 2002 (the "Custodian
Agreement"). PFPC Inc. will act as the Fund's transfer agent, registrar,
shareholder servicing agent and dividend disbursing agent (the "Transfer Agent")
pursuant to a Transfer Agency Services Agreement, dated as of June [___], 2002
(the "Transfer Agency Agreement"). In addition, the Fund has adopted a dividend
reinvestment plan (the "Dividend Reinvestment Plan") pursuant to which holders
of Shares shall have their dividends automatically reinvested in additional
Common Shares of the Fund unless they elect to receive such dividends in cash.
UBS Warburg LLC (the "Managing Representative") will act as managing
representative for the Underwriters.

     The Fund, the Investment Manager and the Underwriters agree as follows:

1.   Sale and Purchase. Upon the basis of the warranties and representations and
     subject to the terms and conditions herein set forth, the Fund agrees to
     sell to the respective Underwriters and each of the Underwriters, severally
     and not jointly, agrees to purchase from the Fund the aggregate number of
     Firm Shares set forth opposite the name of such Underwriter in Schedule A
     attached hereto in each case at a purchase price of $14.325 per Share. The
     Fund is advised that the Underwriters intend (i) to make a public offering
     of their respective portions of the Firm Shares as soon after the effective
     date of the Registration Statement as is advisable and (ii) initially to
     offer the Firm Shares upon the terms set forth in the Prospectus. The
     Underwriters may from time to time increase or decrease the public offering
     price after the initial public offering to such extent as they may
     determine.

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          In addition, the Fund hereby grants to the several Underwriters the
     option to purchase, and upon the basis of the warranties and
     representations and subject to the terms and conditions herein set forth,
     the Underwriters shall have the right to purchase, severally and not
     jointly, from the Fund, ratably in accordance with the number of Firm
     Shares to be purchased by each of them, all or a portion of the Additional
     Shares as may be necessary to cover over-allotments made in connection with
     the offering of the Firm Shares, at the same purchase price per share to be
     paid by the Underwriters to the Fund for the Firm Shares. This option may
     be exercised by you on behalf of the several Underwriters at any time and
     from time to time on or before the forty-fifth day following the date
     hereof, by written notice to the Fund. Such notice shall set forth the
     aggregate number of Additional Shares as to which the option is being
     exercised, and the date and time when the Additional Shares are to be
     delivered (such date and time being herein referred to as the "Additional
     Time of Purchase"); provided, however, that the Additional Time of Purchase
     shall not be earlier than the Time of Purchase (as defined below) nor
     earlier than the second business day after the date on which the option
     shall have been exercised nor later than the tenth business day after the
     date on which the option shall have been exercised. The number of
     Additional Shares to be sold to each Underwriter shall be the number which
     bears the same proportion to the aggregate number of Additional Shares
     being purchased as the number of Firm Shares set forth opposite the name of
     such Underwriter on Schedule A hereto bears to the total number of Firm
     Shares (subject, in each case, to such adjustment as you may determine to
     eliminate fractional shares).

          The Fund also agrees, subject to the terms and conditions set forth
     herein, to sell to the Investment Manager, and, upon the basis of the
     representations, warranties and agreements of the Fund contained herein,
     the Investment Manager shall have the right to purchase from the Fund, at
     the same purchase price per share as the Underwriters shall pay for the
     Additional Shares, up to an aggregate of 1,000 Shares (the "Investment
     Manager Shares").

2.   Payment and Delivery. Payment of the purchase price for the Firm Shares
     shall be made by the Underwriters to the Fund by Federal Funds wire
     transfer, against delivery of the certificates for the Firm Shares to you
     through the facilities of the Depository Trust Company ("DTC") for the
     respective accounts of the Underwriters. Such payment and delivery shall be
     made at 10:00 A.M., New York City time on the third business day following
     the date of this Underwriting Agreement (unless another date or time shall
     be agreed to by you and the Fund). The time at which such payment and
     delivery are actually made is hereinafter sometimes called the Time of
     Purchase. Certificates for the Firm Shares shall be delivered to you in
     definitive form in such names and in such denominations as you shall
     specify on the second business day preceding the Time of Purchase. For the
     purpose of expediting the checking of the certificates for the Firm Shares
     by you, the Fund agrees to make such certificates available to you for such
     purpose at least one full business day preceding the Time of Purchase.

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<PAGE>

          Payment of the purchase price for the Additional Shares shall be made
     at the Additional Time of Purchase in the same manner and at the same
     office as the payment for the Firm Shares. Certificates for the Additional
     Shares shall be delivered to you in definitive form in such names and in
     such denominations as you shall specify no later than the second business
     day preceding the Additional Time of Purchase. For the purpose of
     expediting the checking of the certificates for the Additional Shares by
     you, the Fund agrees to make such certificates available to you for such
     purpose at least one full business day preceding the Additional Time of
     Purchase. The Time of Purchase and the Additional Time of Purchase are
     sometimes referred to herein as the Closing Dates.

          The place and time of the closing for the Investment Manager Shares
     shall be as agreed upon by the Investment Manager and the Fund; provided,
     however, that the date of such closing for the Investment Manager Shares
     shall in no event be earlier than the Time of Purchase.

3.   Representations and Warranties of the Fund and the Investment Manager. Each
     of the Fund and the Investment Manager jointly and severally represents and
     warrants to each Underwriter as follows:

     (a)  On (A) the Effective Date and the date on which the Prospectus is
          first filed with the Commission pursuant to Rule 497(b), (h) or (j)
          under the Act, as the case may be, (B) the date on which any
          post-effective amendment to the Registration Statement (except any
          post-effective amendment which is filed with the Commission after the
          later of (x) one year from the date of this Underwriting Agreement or
          (y) the date on which the distribution of the Shares is completed)
          became or becomes effective or any amendment or supplement to the
          Prospectus was or is filed with the Commission and (C) the Closing
          Dates, the Registration Statement, the Prospectus and any such
          amendment or supplement thereto and the Notification complied or will
          comply in all material respects with the requirements of the Act and
          the Investment Company Act, as the case may be. On the Effective Date
          and on the date that any post-effective amendment to the Registration
          Statement (except any post-effective amendment which is filed with the
          Commission after the later of (x) one year from the date of this
          Underwriting Agreement or (y) the date on which the distribution of
          the Shares is completed) became or becomes effective, neither the
          Registration Statement nor any such amendment did or will contain any
          untrue statement of a material fact or omit to state a material fact
          required to be stated in it or necessary to make the statements in it
          not misleading. At the Effective Date and, if applicable, the date the
          Prospectus or any amendment or supplement to the Prospectus was or is
          filed with the Commission and at the Closing Dates, the Prospectus did
          not or will not, as the case may be, contain any untrue statement of a
          material fact or omit to state a material fact required to be stated
          in it or necessary to make the statements in it, in light of the
          circumstances under which they were made, not misleading. The
          foregoing representations in

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<PAGE>

          this Section 3(a) 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
          expressly for use in the Registration Statement, the Prospectus, or
          any amendments or supplements thereto, as described in Section 9(f)
          hereof.

     (b)  The Fund has been duly formed, is validly existing as an
          unincorporated voluntary association under the laws of The
          Commonwealth of Massachusetts (commonly known as a "Massachusetts
          business trust"), with full power and authority to conduct all the
          activities conducted by it, to own or lease all assets owned or leased
          by it and to conduct its business as described in the Registration
          Statement and Prospectus, and the Fund is duly licensed and qualified
          to do business and in good standing in each jurisdiction in which its
          ownership or leasing of property or its conducting of business
          requires such qualification, except where the failure to be so
          qualified or be in good standing would not have a material adverse
          effect on the Fund, and the Fund owns, possesses or has obtained and
          currently maintains all governmental licenses, permits, consents,
          orders, approvals and other authorizations, whether foreign or
          domestic, necessary to carry on its business as contemplated in the
          Prospectus. The Fund has no subsidiaries.

     (c)  The capitalization of the Fund is as set forth in the Registration
          Statement and the Prospectus. The Common Shares conform in all
          material respects to the description of them in the Prospectus. All
          the outstanding Common Shares have been duly authorized and are
          validly issued, fully paid and nonassessable (except as described in
          the Registration Statement). The Shares to be issued and delivered to
          and paid for by the Underwriters in accordance with this Underwriting
          Agreement against payment therefor as provided by this Underwriting
          Agreement have been duly authorized and when issued and delivered to
          the Underwriters will have been validly issued and will be fully paid
          and nonassessable (except as described in the Registration Statement).
          Other than the right of the Investment Manager to purchase Shares as
          set forth in Section 1 hereof, no person is entitled to any preemptive
          or other similar rights with respect to the Shares.

     (d)  The Fund is duly registered with the Commission under the Investment
          Company Act as a non-diversified, closed-end management investment
          company, and, subject to the filing of any final amendment to the
          Registration Statement (a "Final Amendment"), if not already filed,
          all action under the Act and the Investment Company Act, as the case
          may be, necessary to make the public offering and consummate the sale
          of the Shares as provided in this Underwriting Agreement has or will
          have been taken by the Fund.

     (e)  The Fund has full power and authority to enter into each of this
          Underwriting Agreement, the Investment Management Agreement, the

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<PAGE>

          Custodian Agreement, the Transfer Agency Agreement and the Dividend
          Reinvestment Plan (collectively, the "Fund Agreements") and to perform
          all of the terms and provisions hereof and thereof to be carried out
          by it and (i) each Fund Agreement has been duly and validly
          authorized, executed and delivered by or on behalf of the Fund, (ii)
          each Fund Agreement does not violate in any material respect any of
          the applicable provisions of the Investment Company Act or the
          Investment Advisers Act of 1940, as amended, and the rules and
          regulations thereunder (collectively called the "Advisers Act"), as
          the case may be, and (iii) 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, (A) subject, as to enforcement, to
          applicable bankruptcy, insolvency and similar laws affecting
          creditors' rights generally and to general equitable principles
          (regardless of whether enforcement is sought in a proceeding in equity
          or at law) and (B) except as rights to indemnity thereunder may be
          limited by federal or state securities laws.

     (f)  None of (i) the execution and delivery by the Fund of the Fund
          Agreements, (ii) the issue and sale by the Fund of the Shares as
          contemplated by this Underwriting Agreement and (iii) the performance
          by the Fund of its obligations under any of the Fund Agreements or
          consummation by the Fund of the other transactions contemplated by the
          Fund Agreements conflicts with or will conflict with, or results or
          will result in a breach of, the Agreement and Declaration of Trust or
          the Bylaws of the Fund, each as amended from time to time, or any
          agreement or instrument to which the Fund is a party or by which the
          Fund is bound, except where such violation does not have a material
          adverse effect on the condition (financial or other), business
          prospects, properties, net assets or results of operations of the
          Fund, or any law, rule or regulation, or order of any court,
          governmental instrumentality, securities exchange or association or
          arbitrator, whether foreign or domestic, applicable to the Fund, other
          than state securities or "blue sky" laws applicable in connection with
          the purchase and distribution of the Shares by the Underwriters
          pursuant to this Underwriting Agreement.

     (g)  The Fund is not currently in breach of, or in default under, any
          written agreement or instrument to which it is a party or by which it
          or its property is bound or affected, except where such violation does
          not have a material adverse effect on the condition (financial or
          other), business prospects, properties, net assets or results of
          operations of the Fund.

     (h)  No person has any right to the registration of any securities of the
          Fund because of the filing of the Registration Statement.

     (i)  No consent, approval, authorization or order of any court or
          governmental agency or body or securities exchange or association,
          whether foreign or

                                       7

<PAGE>

          domestic, is required by the Fund for the consummation by the Fund of
          the transactions to be performed by the Fund or the performance by the
          Fund of all the terms and provisions to be performed by or on behalf
          of it in each case as contemplated in the Fund Agreements, except such
          as (i) have been obtained under the Act, the Investment Company Act or
          the Advisers Act, and (ii) may be required by the New York Stock
          Exchange or under state securities or "blue sky" laws, in connection
          with the purchase and distribution of the Shares by the Underwriters
          pursuant to this Underwriting Agreement.

     (j)  The Shares are duly authorized for listing, subject to official notice
          of issuance, on the New York Stock Exchange and the Fund's
          Registration Statement on Form 8-A, under the Securities Exchange Act
          of 1934, as amended, and the rules and regulations thereunder
          (collectively called the "Exchange Act"), has become effective.

     (k)  To the knowledge of the Fund and the Investment Manager after due
          inquiry, based on representations from PricewaterhouseCoopers LLP,
          whose report appears in the Prospectus, are independent public
          accountants with respect to the Fund as required by the Act and the
          Investment Company Act.

     (l)  The statement of assets and liabilities included in the Registration
          Statement and the Prospectus presents fairly in all material respects,
          in accordance with generally accepted accounting principles in the
          United States applied on a consistent basis, the financial position of
          the Fund as of the date indicated.

     (m)  The Fund 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; (ii) transactions are recorded as necessary to permit
          preparation of financial statements in conformity with generally
          accepted accounting principles and to maintain accountability for
          assets; (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 through an
          asset reconciliation procedure or otherwise at reasonable intervals
          and appropriate action is taken with respect to any differences.

     (n)  Since the date as of which information is given in the Registration
          Statement and the Prospectus, except as otherwise stated therein, (i)
          there has been no material adverse change in the condition, financial
          or otherwise, business affairs or business of the Fund, whether or not
          arising in the ordinary course of business, (ii) there have been no
          transactions entered into by the Fund other than those in the ordinary
          course of its business and (iii) there has been no dividend or
          distribution of any kind declared, paid or made on any class of its
          capital shares.

                                       8


<PAGE>

     (o)  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
          the knowledge of the Fund, threatened against or affecting the Fund,
          which (i) might result in any material adverse change in the
          condition, financial or otherwise, business affairs or business
          prospects of the Fund or might materially adversely affect the
          properties or assets of the Fund or (ii) is of a character required to
          be described in the Registration Statement or the Prospectus; and
          there are no contracts, franchises or other documents that are of a
          character required to be described in, or that are required to be
          filed as exhibits to, the Registration Statement that have not been
          described or filed as required.

     (p)  Except for stabilization transactions conducted by the Managing
          Representative, and except for tender offers, Share repurchases and
          the issuance or purchase of Shares pursuant to the Dividend
          Reinvestment Plan effected following the date on which the
          distribution of the Shares is completed in accordance with the
          policies of the Fund as set forth in the Prospectus, the Fund has not
          taken and will not take, directly or indirectly, any action designed
          or which might be reasonably expected to cause or result in, or which
          will constitute, stabilization or manipulation of the price of the
          Common Shares in violation of applicable federal securities laws,
          provided that, for the sake of clarity, no action taken by an
          Underwriter that is an affiliate of the Fund shall be deemed to be
          action taken, directly or indirectly, by the Fund for purposes of this
          Section 3(p).

     (q)  The Fund intends to direct the investment of the proceeds of the
          offering of the Shares in such a manner as to comply with the
          requirements of Subchapter M of the Internal Revenue Code of 1986, as
          amended (the "Code").

     (r)  No advertising, sales literature or other promotional materials
          (excluding road show slides or road show tapes) were authorized or
          prepared by or on behalf of the Fund, the Investment Manager or the
          Portfolio Manager or any representative thereof for use in connection
          with the public offering or sale of the Shares other than the
          definitive client brochure and the broker selling memo which were
          filed with the National Association of Securities Dealers, Inc. (the
          "NASD") on May 20, 2002 and the prospecting letter filed with the NASD
          on May 31, 2002 (collectively referred to as the "sales materials");
          the sales materials and any road show slides or road show tapes
          complied and comply in all material respects with the applicable
          requirements of the Act and the rules and interpretations of the NASD;
          and no broker kits, road show slides, road show tapes or sales
          materials authorized or prepared by the Fund or authorized or prepared
          on behalf of the Fund by the Investment Manager, the Portfolio Manager
          or any representative thereof for use in connection with the public
          offering or sale of the Shares contained or contains any untrue
          statement of a material

                                       9

<PAGE>

          fact or omitted or omits to state any material fact required to be
          stated therein or necessary in order to make the statements therein
          not misleading.

4.   Representations and Warranties of the Investment Manager. The Investment
     Manager represents to each Underwriter and, in the case of paragraph (f)
     also to the Fund, as follows:

     (a)  The Investment Manager has been duly formed, is validly existing as a
          limited liability company under the laws of the State of Delaware with
          full power and authority to conduct all of the activities conducted by
          it, to own or lease all of the assets owned or leased by it and to
          conduct its business as described in the Registration Statement and
          Prospectus, and the Investment Manager is duly licensed and qualified
          to do business and in good standing in each jurisdiction in which it
          is required to be so qualified, except to the extent that failure to
          be so qualified or be in good standing would not have a material
          adverse effect on the Investment Manager's ability to provide services
          to the Fund; and the Investment Manager owns, possesses or has
          obtained and currently maintains all governmental licenses, permits,
          consents, orders, approvals and other authorizations, whether foreign
          or domestic, necessary to carry on its business as contemplated in the
          Registration Statement and the Prospectus.

     (b)  The Investment Manager is (i) duly registered as an investment adviser
          under the Advisers Act and (ii) not prohibited by the Advisers Act or
          the Investment Company Act from acting as the investment adviser for
          the Fund as contemplated by the Investment Advisory Agreement, the
          Registration Statement and the Prospectus.

     (c)  The Investment Manager has full power and authority to enter into each
          of this Underwriting Agreement, the Investment Management Agreement
          and the Portfolio Management Agreement (collectively, this
          Underwriting Agreement, the Investment Management Agreement and the
          Portfolio Management Agreement being referred to as the "Investment
          Manager Agreements") and to carry out all the terms and provisions
          hereof and thereof to be carried out by it; and each Investment
          Manager Agreement has been duly and validly authorized, executed and
          delivered by the Investment Manager; none of the Investment Manager
          Agreements violate in any material respect any of the applicable
          provisions of the Investment Company Act or the Advisers Act; and
          assuming due authorization, execution and delivery by the other
          parties thereto, each Investment Manager Agreement constitutes a
          legal, valid and binding obligation of the Investment Manager,
          enforceable in accordance with its terms, (i) subject, as to
          enforcement, to applicable bankruptcy, insolvency and similar laws
          affecting creditors' rights generally and to general equitable
          principles (regardless of whether enforcement is sought in a
          proceeding in

                                       10

<PAGE>

          equity or at law) and (ii) except as rights to indemnity thereunder
          may be limited by federal or state securities laws.

     (d)  Neither (i) the execution and delivery by the Investment Manager of
          any Investment Manager Agreement nor (ii) the consummation by the
          Investment Manager of the transactions contemplated by, or the
          performance of its obligations under, any Investment Manager Agreement
          conflicts or will conflict with, or results or will result in a breach
          of, the limited liability company agreement or other organizational
          documents of the Investment Manager or any agreement or instrument to
          which the Investment Manager is a party or by which the Investment
          Manager is bound, or any law, rule or regulation, or order of any
          court, governmental instrumentality, securities exchange or
          association or arbitrator, whether foreign or domestic, applicable to
          the Investment Manager.

     (e)  No consent, approval, authorization or order of any court,
          governmental agency or body or securities exchange or association,
          whether foreign or domestic, is required for the consummation of the
          transactions contemplated in, or the performance by the Investment
          Manager of its obligations under, any Investment Manager Agreement, as
          the case may be, except such as (i) have been obtained under the Act,
          the Investment Company Act or the Advisers Act, and (ii) may be
          required by the New York Stock Exchange or under state securities or
          "blue sky" laws, in connection with the purchase and distribution of
          the Shares by the Underwriters pursuant to this Underwriting
          Agreement.

     (f)  The description of the Investment Manager and its business, and the
          statements attributable to the Investment Manager, in the Registration
          Statement and the Prospectus comply with the requirements of the Act
          and the Investment Company Act 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
          not misleading.

     (g)  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
          the knowledge of the Investment Manager, threatened against or
          affecting the Investment Manager of a nature required to be disclosed
          in the Registration Statement or Prospectus or that might reasonably
          be expected to result in any material adverse change in the ability of
          the Investment Manager to fulfill its respective obligations under any
          Investment Manager Agreement.

     (h)  Except for stabilization activities conducted by the Managing
          Representative and except for tender offers, Share repurchases and the
          issuance or purchase of Shares pursuant to the Dividend Reinvestment
          Plan effected following the date on which the distribution of the
          Shares is completed in accordance with the policies of the Fund as set
          forth in the

                                       11

<PAGE>

          Prospectus, the Investment Manager has not taken and will not take,
          directly or indirectly, any action designed, or which might reasonably
          be expected to cause or result in, or which will constitute,
          stabilization or manipulation of the price of the Common Shares in
          violation of applicable federal securities laws, provided that, for
          the sake of clarity, no action taken by an Underwriter that is an
          affiliate of the Investment Manager shall be deemed to be action
          taken, directly or indirectly, by the Investment Manager for purposes
          of this Section 4(h).

     (i)  None of the Fund, the Investment Manager or the Portfolio Manager has
          made available any promotional materials intended for use only by
          qualified broker-dealers and registered representatives thereof by
          means of an Internet web site or similar electronic means.

     (j)  The Portfolio Manager has been duly formed, is validly existing as a
          limited liability company under the laws of Delaware with full power
          and authority to conduct all of the activities conducted by it, to own
          or lease all of the assets owned or leased by it and to conduct its
          business as described in the Registration Statement and Prospectus,
          and the Portfolio Manager is duly licensed and qualified to do
          business and in good standing in each jurisdiction in which it is
          required to be so qualified, except to the extent that failure to be
          so qualified or be in good standing would not have a material adverse
          affect on the Portfolio Manager's ability to provide services to the
          Fund; and the Portfolio Manager owns, possesses or has obtained and
          currently maintains all governmental licenses, permits, consents,
          orders, approvals and other authorizations, whether foreign or
          domestic, necessary to carry on its business as contemplated in the
          Registration Statement and the Prospectus.

     (k)  The Portfolio Manager is (i) duly registered as an investment adviser
          under the Advisers Act and (ii) not prohibited by the Advisers Act or
          the Investment Company Act from acting as the investment sub-adviser
          for the Fund as contemplated by the Portfolio Management Agreement,
          the Registration Statement and the Prospectus.

     (l)  The Portfolio Manager has full power and authority to enter into each
          of this Underwriting Agreement and the Portfolio Management Agreement
          (collectively, this Underwriting Agreement and the Portfolio
          Management Agreement being referred to as the "Portfolio Manager
          Agreements") and to carry out all the terms and provisions hereof and
          thereof to be carried out by it; and each Portfolio Manager Agreement
          has been duly and validly authorized, executed and delivered by the
          Portfolio Manager; none of the Portfolio Manager Agreements violate in
          any material respect any of the applicable provisions of the
          Investment Company Act or the Advisers Act; and assuming due
          authorization, execution and delivery by the other parties thereto,
          each Portfolio Manager Agreement constitutes a legal, valid and
          binding obligation of the Portfolio Manager, enforceable

                                       12

<PAGE>

          in accordance with its terms, (i) subject, as to enforcement, to
          applicable bankruptcy, insolvency and similar laws affecting
          creditors' rights generally and to general equitable principles
          (regardless of whether enforcement is sought in a proceeding in equity
          or at law) and (ii) except as rights to indemnity thereunder may be
          limited by federal or state securities laws.

     (m)  Neither (i) the execution and delivery by the Portfolio Manager of any
          Portfolio Manager Agreement nor (ii) the consummation by the Portfolio
          Manager of the transactions contemplated by, or the performance of its
          obligations under, any Portfolio Manager Agreement conflicts or will
          conflict with, or results or will result in a breach of, the limited
          liability company agreement or other organizational documents of the
          Portfolio Manager or any agreement or instrument to which the
          Portfolio Manager is a party or by which the Portfolio Manager is
          bound, or any law, rule or regulation, or order of any court,
          governmental instrumentality, securities exchange or association or
          arbitrator, whether foreign or domestic, applicable to the Portfolio
          Manager.

     (n)  No consent, approval, authorization or order of any court,
          governmental agency or body or securities exchange or association,
          whether foreign or domestic, is required for the consummation of the
          transactions contemplated in, or the performance by the Portfolio
          Manager of its obligations under, any Portfolio Manager Agreement, as
          the case may be, except such as (i) have been obtained under the Act,
          the Investment Company Act or the Advisers Act, and (ii) may be
          required by the New York Stock Exchange or under state securities or
          "blue sky" laws, in connection with the purchase and distribution of
          the Shares by the Underwriters pursuant to this Underwriting
          Agreement.

     (o)  The description of the Portfolio Manager and its business, and the
          statements attributable to the Portfolio Manager, in the Registration
          Statement and the Prospectus comply with the requirements of the Act
          and the Investment Company Act 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
          not misleading.

     (p)  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
          the knowledge of the Portfolio Manager, threatened against or
          affecting the Portfolio Manager of a nature required to be disclosed
          in the Registration Statement or Prospectus or that might reasonably
          be expected to result in any material adverse change in the ability of
          the Portfolio Manager to fulfill its respective obligations under any
          Portfolio Manager Agreement.

                                       13

<PAGE>

         (q)   Except for stabilization activities conducted by the Managing
               Representative and except for tender offers, Share repurchases
               and the issuance or purchase of Shares pursuant to the Dividend
               Reinvestment Plan effected following the date on which the
               distribution of the Shares is completed in accordance with the
               policies of the Fund as set forth in the Prospectus, the
               Portfolio Manager has not taken and will not take, directly or
               indirectly, any action designed, or which might reasonably be
               expected to cause or result in, or which will constitute,
               stabilization or manipulation of the price of the Common Shares
               in violation of applicable federal securities laws.

5.       Agreements of the Parties.

         (a)   If the registration statement relating to the Shares has not yet
               become effective, the Fund will promptly file any Final
               Amendment, if not previously filed, with the Commission, and will
               use its best efforts to cause such registration statement to
               become effective and, as soon as the Fund is advised, will advise
               the Managing Representative when the Registration Statement or
               any amendment thereto has become effective. If the Registration
               Statement has become effective and the Prospectus contained
               therein omits certain information at the time of effectiveness
               pursuant to Rule 430A under the Act, the Fund will file a 430A
               Prospectus pursuant to Rule 497(h) under the Act as promptly as
               practicable, but no later than the second business day following
               the earlier of the date of the determination of the offering
               price of the Shares or the date the Prospectus is first used
               after the Effective Date. If the Registration Statement has
               become effective and the Prospectus contained therein does not so
               omit such information, the Fund will file a Prospectus pursuant
               to Rule 497(b) or a certification pursuant to Rule 497(j) under
               the Act as promptly as practicable, but no later than the fifth
               business day following the date of the later of the Effective
               Date or the commencement of the public offering of the Shares
               after the Effective Date. In either case, the Fund will provide
               you satisfactory evidence of the filing. The Fund will not file
               with the Commission any Prospectus or any other amendment (except
               any post-effective amendment which is filed with the Commission
               after the later of (x) one year from the date of this
               Underwriting Agreement or (y) the date on which distribution of
               the Shares is completed) or supplement to the Registration
               Statement or the Prospectus unless a copy has first been
               submitted to the Managing Representative a reasonable time before
               its filing and the Managing Representative has not objected to it
               in writing within a reasonable time after receiving the copy.

         (b)   For the period of three years from the date hereof, the Fund will
               advise the Managing Representative promptly (1) of the issuance
               by the Commission of any order in respect of the Fund, the
               Investment Manager or the Portfolio Manager which relates to the
               Fund, or which relates to any material arrangements or proposed
               material arrangements involving the

                                       14

<PAGE>

               Fund, the Investment Manager or the Portfolio Manager, (2) of the
               initiation or threatening of any proceedings for, or receipt by
               the Fund of any notice with respect to, any suspension of the
               qualification of the Shares for sale in any jurisdiction or the
               issuance of any order by the Commission suspending the
               effectiveness of the Registration Statement, (3) of receipt by
               the Fund, or any representative or attorney of the Fund, of any
               other communication from the Commission relating in any material
               way to the Fund, the Registration Statement, the Notification,
               any Preliminary Prospectus, the Prospectus or to the transactions
               contemplated by this Underwriting Agreement and (4) the issuance
               by any court, regulatory body, administrative agency or other
               governmental agency or body, whether foreign or domestic, of any
               order, ruling or decree, or the threat to initiate any
               proceedings with respect thereto, regarding the Fund, which
               relates in any material way to the Fund or any material
               arrangements or proposed material arrangements involving the
               Fund. The Fund will make every reasonable effort to prevent the
               issuance of any order suspending the effectiveness of the
               Registration Statement and, if any such order is issued, to
               obtain its lifting as soon as possible.

         (c)   If not delivered prior to the date of this Underwriting
               Agreement, the Fund will deliver to the Managing Representative,
               without charge, a signed copy of the Registration Statement and
               the Notification and of any amendments (except any post-effective
               amendment which is filed with the Commission after the later of
               (x) one year from the date of this Underwriting Agreement or (y)
               the date on which the distribution of the Shares is completed) to
               either the Registration Statement or the Notification (including
               all exhibits filed with any such document) and as many conformed
               copies of the Registration Statement and any amendments thereto
               (except any post-effective amendment which is filed with the
               Commission after the later of (x) one year from the date of this
               Underwriting Agreement or (y) the date on which the distribution
               of the Shares is completed) (excluding exhibits) as the Managing
               Representative may reasonably request.

         (d)   During such period as a prospectus is required by law to be
               delivered by an underwriter or a dealer, the Fund will deliver,
               without charge, to you, the Underwriters and any dealers, at such
               office or offices as you may designate, as many copies of the
               Prospectus as you may reasonably request, and, if any event
               occurs during such period as a result of which it is necessary to
               amend or supplement the Prospectus, in order to make the
               statements therein, in light of the circumstances under which
               they were made, not misleading in any material respect, or if
               during such period it is necessary to amend or supplement the
               Prospectus to comply with the Act or the Investment Company Act,
               the Fund promptly will prepare, submit to the Managing
               Representative, file with the Commission and deliver, without
               charge, to the Underwriters and to dealers (whose names and
               addresses the Managing Representative will furnish to the Fund)
               to whom

                                       15

<PAGE>

               Shares may have been sold by the Underwriters, and to other
               dealers on request, amendments or supplements to the Prospectus
               so that the statements in such Prospectus, as so amended or
               supplemented, will not, in light of the circumstances under which
               they were made, be misleading in any material respect and will
               comply with the Act and the Investment Company Act; provided that
               if the amendment or supplement 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 amendment or
               supplement to the Underwriters and dealers at a reasonable charge
               not to exceed the actual cost thereof to the Fund. Delivery by
               the Underwriters of any such amendments or supplements to the
               Prospectus will not constitute a waiver of any of the conditions
               in Section 6 hereof.

         (e)   The Fund will make generally available to holders of the Fund's
               securities, as soon as practicable but in no event later than the
               last day of the 18th full calendar month following the calendar
               quarter in which the Effective Date falls, an earnings statement,
               if applicable, satisfying the provisions of the last paragraph of
               Section 11(a) of the Act and, at the option of the Fund, Rule 158
               under the Act.

         (f)   If the transactions contemplated by this Underwriting Agreement
               are consummated, the Fund shall pay all costs and expenses
               incident to the performance of the obligations of the Fund under
               this Underwriting Agreement (to the extent such expenses do not,
               in the aggregate, exceed $0.03 per Share), including but not
               limited to costs and expenses of or relating to (1) the
               preparation, printing and filing of the Registration Statement
               and exhibits to it, each Preliminary Prospectus, the Prospectus
               and all amendments and supplements thereto, (2) the issuance of
               the Shares and the preparation and delivery of certificates for
               the Shares, (3) the registration or qualification of the Shares
               for offer and sale under the securities or "blue sky" laws of the
               jurisdictions referred to in the foregoing paragraph, including
               the fees and disbursements of counsel for the Underwriters in
               that connection, and the preparation and printing of any
               preliminary and supplemental "blue sky" memoranda, (4) the
               furnishing (including costs of design, production, shipping and
               mailing) to the Underwriters and dealers of copies of each
               Preliminary Prospectus relating to the Shares, the sales
               materials, the Prospectus, and all amendments or supplements to
               the Prospectus, and of the other documents required by this
               Section to be so furnished, (5) the filing requirements of the
               NASD, in connection with its review of the financing, including
               filing fees and the disbursements of counsel for the Underwriters
               in that connection, (6) all transfer taxes, if any, with respect
               to the sale and delivery of the Shares to the Underwriters, (7)
               the listing of the Shares on the New York Stock Exchange, and (8)
               the transfer agent for the Shares. To the extent the foregoing
               costs and expenses incident to the performance of the obligations
               of the Fund under this Underwriting Agreement exceed,

                                       16

<PAGE>

               in the aggregate, $0.03 per Share, PIMCO Funds Advisors or an
               affiliate will pay all such excess costs and expenses.

         (g)   If the transactions contemplated by this Underwriting Agreement
               are not consummated, except as otherwise provided herein, no
               party will be under any liability to any other party, except that
               (i) if this Underwriting Agreement is terminated by (A) the Fund
               or the Investment Manager pursuant to any of the provisions
               hereof or (B) by you or the Underwriters because of any
               inability, failure or refusal on the part of the Fund or the
               Investment Manager to comply with any material terms or because
               any of the conditions in Section 6 are not satisfied, the
               Investment Manager or an affiliate and the Fund, jointly and
               severally, will reimburse the Underwriters for all out-of-pocket
               expenses (including the reasonable fees, disbursements and other
               charges of their counsel) reasonably incurred by them in
               connection with the proposed purchase and sale of the Shares and
               (ii) no Underwriter who has failed or refused to purchase the
               Shares agreed to be purchased by it under this Underwriting
               Agreement, in breach of its obligations pursuant to this
               Underwriting Agreement, will be relieved of liability to the
               Fund, the Investment Manager and the other Underwriters for
               damages occasioned by its default.

         (h)   Without the prior written consent of the Managing Representative,
               the Fund will not offer, sell or register with the Commission, or
               announce an offering of, any equity securities of the Fund,
               within 180 days after the Effective Date, except for the Shares
               as described in the Prospectus and any issuances of Common Shares
               pursuant to the Dividend Reinvestment Plan and except in
               connection with any offering of preferred shares of beneficial
               interest as contemplated by the Prospectus.

         (i)   The Fund will use its best efforts to cause the Shares to be duly
               authorized for listing by the New York Stock Exchange prior to
               the date the shares are issued.

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

6.       Conditions of the Underwriters' Obligations. The obligations of the
         Underwriters to purchase the Shares are subject to the accuracy on the
         date of this Underwriting Agreement, and on each of the Closing Dates,
         of the representations of the Fund and the Investment Manager in this
         Underwriting Agreement, to the accuracy and completeness of all
         material statements made by the Fund and the Investment Manager or any
         of their respective officers in any certificate delivered to the
         Managing Representative or its counsel pursuant to this Underwriting
         Agreement, to performance by the Fund and the Investment Manager of
         their respective obligations under this Underwriting Agreement and to
         each of the following additional conditions:

                                       17

<PAGE>

         (a)   The Registration Statement must have become effective by 5:30
               p.m., New York City time, on the date of this Underwriting
               Agreement or such later date and time as the Managing
               Representative consents to in writing. The Prospectus must have
               been filed in accordance with Rule 497(b) or (h) or a certificate
               must have been filed in accordance with Rule 497(j), as the case
               may be, under the Act.

         (b)   No order suspending the effectiveness of the Registration
               Statement may be in effect and no proceedings for such purpose
               may be pending before or, to the knowledge of counsel to the
               Underwriters, threatened by the Commission, and any requests for
               additional information on the part of the Commission (to be
               included in the Registration Statement or the Prospectus or
               otherwise) must be complied with or waived to the reasonable
               satisfaction of the Managing Representative.

         (c)   Since the dates as of which information is given in the
               Registration Statement and the Prospectus, (i) there must not
               have been any material change in the Common Shares or liabilities
               of the Fund except as set forth in or contemplated by the
               Prospectus; (ii) there must not have been any material adverse
               change in the general affairs, prospects, management, business,
               financial condition or results of operations of the Fund, the
               Investment Manager or the Portfolio Manager whether or not
               arising from transactions in the ordinary course of business as
               set forth in or contemplated by the Prospectus which in the
               opinion of the Managing Representative would materially adversely
               affect the market for the Shares; (iii) the Fund must not have
               sustained any material loss or interference with its business
               from any court or from legislative or other governmental action,
               order or decree, whether foreign or domestic, or from any other
               occurrence not described in the Registration Statement and
               Prospectus; and (iv) there must not have occurred any event that
               makes untrue or incorrect in any material respect any statement
               or information contained in the Registration Statement or
               Prospectus or that is not reflected in the Registration Statement
               or Prospectus but should be reflected therein in order to make
               the statements or information therein (in the case of the
               Prospectus, in light of the circumstances in which they were
               made) not misleading in any material respect.

         (d)   The Managing Representative must have received on each Closing
               Date a certificate, dated such date, of the President, a
               Vice-President or Managing Director and the chief financial or
               accounting officer of each of the Fund and the Investment Manager
               certifying that (i) the signers have carefully examined the
               Registration Statement, the Prospectus, and this Underwriting
               Agreement, (ii) the representations of the Fund (with respect to
               the certificates from such Fund officers) and the representations
               of the Investment Manager (with respect to the certificates from
               such officers of the Investment Manager) in this Underwriting
               Agreement are accurate on and as of the date of the certificate,
               (iii) there has not been any material

                                       18

<PAGE>

          adverse change in the general affairs, prospects, management,
          business, financial condition or results of operations of the Fund
          (with respect to the certificates from such Fund officers) or the
          Investment Manager (with respect to the certificates from such
          officers of the Investment Manager), which change would materially and
          adversely affect the ability of the Fund or the Investment Manager, as
          the case may be, to fulfill its obligations under this Underwriting
          Agreement or the Investment Management Agreement, whether or not
          arising from transactions in the ordinary course of business, (iv)
          with respect to the Fund only, to the knowledge of such officers after
          reasonable investigation, no order suspending the effectiveness of the
          Registration Statement, prohibiting the sale of any of the Shares or
          otherwise having a material adverse effect on the Fund has been issued
          and no proceedings for any such purpose are pending before or
          threatened by the Commission or any other regulatory body, whether
          foreign or domestic, (v) to the knowledge of the officers of the
          Investment Manager, after reasonable investigation, no order having a
          material adverse effect on the ability of the Investment Manager to
          fulfill its obligations under this Underwriting Agreement or the
          Investment Advisory Agreement, as the case may be, has been issued and
          no proceedings for any such purpose are pending before or threatened
          by the Commission or any other regulatory body, whether foreign or
          domestic, and (vi) each of the Fund (with respect to the certificates
          from such Fund officers) and the Investment Manager (with respect to
          the certificates from such officers of the Investment Manager) has
          performed all of its respective agreements that this Underwriting
          Agreement requires it to perform by such Closing Date (to the extent
          not waived in writing by the Managing Representative).

     (e)  You must have received on each Closing Date the opinions dated such
          Closing Date substantially in the form of Schedules B, C, D and E and
          to this Underwriting Agreement from the counsel identified in each
          such Schedules, or in such other form as is acceptable to counsel for
          the Underwriters.

     (f)  You must have received on each Closing Date from Skadden, Arps, Slate,
          Meagher & Flom LLP and its affiliated entities an opinion dated such
          Closing Date with respect to the Fund, the Shares, the Registration
          Statement and the Prospectus, this Underwriting Agreement and the form
          and sufficiency of all proceedings taken in connection with the sale
          and delivery of the Shares. Such opinion and proceedings shall fulfill
          the requirements of this Section 6(f) only if such opinion and
          proceedings are satisfactory in all respects to the Managing
          Representative. The Fund, the Investment Manager and the Portfolio
          Manager must have furnished to such counsel such documents as counsel
          may reasonably request for the purpose of enabling them to render such
          opinion.

                                       19

<PAGE>

     (g)  The Managing Representative must have received on the date this
          Underwriting Agreement is signed and delivered by you a signed letter,
          dated such date, substantially in the form of Schedule F to this
          Underwriting Agreement from the firm of accountants designated in such
          Schedule. The Managing Representative also must have received on each
          Closing Date a signed letter from such accountants, dated as of such
          Closing Date, confirming on the basis of a review in accordance with
          the procedures set forth in their earlier letter that nothing has come
          to their attention during the period from a date not more than five
          business days before the date of this Underwriting Agreement,
          specified in the letter, to a date not more than five business days
          before such Closing Date, that would require any change in their
          letter referred to in the foregoing sentence.

          All opinions, letters, evidence and certificates mentioned above or
     elsewhere in this Underwriting Agreement will comply only if they are in
     form and scope reasonably satisfactory to counsel for the Underwriters,
     provided that any such documents, forms of which are annexed hereto, shall
     be deemed satisfactory to such counsel if substantially in such form.

7.   Termination. This Underwriting Agreement may be terminated by the Managing
     Representative by notifying the Fund at any time:

     (a)  before the later of the effectiveness of the Registration Statement
          and the time when any of the Shares are first generally offered
          pursuant to this Underwriting Agreement by the Managing Representative
          to dealers by letter or telegram;

     (b)  at or before any Closing Date if, in the sole judgment of the Managing
          Representative, payment for and delivery of any Shares is rendered
          impracticable or inadvisable because (i) trading in the equity
          securities of the Fund is suspended by the Commission or by the
          principal exchange that lists the Shares, (ii) trading in securities
          generally on the New York Stock Exchange or the Nasdaq Stock Market
          shall have been suspended or limited or minimum or maximum prices
          shall have been generally established on such exchange or
          over-the-counter market, (iii) additional material governmental
          restrictions, not in force on the date of this Underwriting Agreement,
          have been imposed upon trading in securities or trading has been
          suspended on any U.S. securities exchange, (iv) a general banking
          moratorium has been established by U.S. federal or New York
          authorities or (v) any material adverse change in the financial or
          securities markets in the United States or in political, financial or
          economic conditions in the United States or any outbreak or material
          escalation of hostilities or declaration by the United States of a
          national emergency or war or other calamity or crisis shall have
          occurred the effect of any of which is such as to make it, in the sole
          judgment of the Managing

                                       20

<PAGE>

          Representative, impracticable or inadvisable to market the Shares on
          the terms and in the manner contemplated by the Prospectus; or

     (c)  at or before any Closing Date, if any of the conditions specified in
          Section 6 have not been fulfilled when and as required by this
          Underwriting Agreement.

8.   Substitution of Underwriters. If one or more of the Underwriters fails
     (other than for a reason sufficient to justify the termination of this
     Underwriting Agreement) to purchase on any Closing Date the Shares agreed
     to be purchased on such Closing Date by such Underwriter or Underwriters,
     the Managing Representative may find one or more substitute underwriters to
     purchase such Shares or make such other arrangements as the Managing
     Representative deems advisable, or one or more of the remaining
     Underwriters may agree to purchase such Shares in such proportions as may
     be approved by the Managing Representative, in each case upon the terms set
     forth in this Underwriting Agreement. If no such arrangements have been
     made within 36 hours after such Closing Date, and

     (a)  the number of Shares to be purchased by the defaulting Underwriters on
          such Closing Date does not exceed 10% of the Shares that the
          Underwriters are obligated to purchase on such Closing Date, each of
          the nondefaulting Underwriters will be obligated to purchase such
          Shares on the terms set forth in this Underwriting Agreement in
          proportion to their respective obligations under this Underwriting
          Agreement, or

     (b)  the number of Shares to be purchased by the defaulting Underwriters on
          such Closing Date exceeds 10% of the Shares to be purchased by all the
          Underwriters on such Closing Date, the Fund will be entitled to an
          additional period of 24 hours within which to find one or more
          substitute underwriters reasonably satisfactory to the Managing
          Representative to purchase such Shares on the terms set forth in this
          Underwriting Agreement.

          Upon the occurrence of the circumstances described in the foregoing
     paragraph (b), either the Managing Representative or the Fund will have the
     right to postpone the applicable Closing Date for not more than five
     business days in order that necessary changes and arrangements (including
     any necessary amendments or supplements to the Registration Statement or
     the Prospectus) may be effected by the Managing Representative and the
     Fund. If the number of Shares to be purchased on such Closing Date by such
     defaulting Underwriter or Underwriters exceeds 10% of the Shares that the
     Underwriters are obligated to purchase on such Closing Date, and none of
     the nondefaulting Underwriters or the Fund makes arrangements pursuant to
     this Section within the period stated for the purchase of the Shares that
     the defaulting Underwriters agreed to purchase, this Underwriting Agreement
     will terminate without liability on the part of any nondefaulting
     Underwriter, the Fund, the Investment Manager or the Portfolio

                                       21

<PAGE>

     Manager, except as provided in Sections 5(g) and 9 hereof. Any action taken
     under this Section will not affect the liability of any defaulting
     Underwriter to the Fund or to the nondefaulting Underwriters arising out of
     such default. A substitute underwriter will become an Underwriter for all
     purposes of this Underwriting Agreement.

9.   Indemnity and Contribution.

     (a)  Each of the Fund and the Investment Manager, jointly and severally,
          agrees to indemnify, defend and hold harmless each Underwriter, its
          partners, directors and officers, and any person who controls any
          Underwriter within the meaning of Section 15 of the Act or Section 20
          of the Exchange Act, and the successors and assigns of all of the
          foregoing persons from and against any loss, damage, expense,
          liability or claim (including the reasonable cost of investigation)
          which, jointly or severally, any such Underwriter or any such person
          may incur under the Act, the Exchange Act, the Investment Company Act,
          the Advisers Act, the common law or otherwise, insofar as such loss,
          damage, expense, liability or claim arises out of or is based upon any
          untrue statement or alleged untrue statement of a material fact
          contained in the Registration Statement (or in the Registration
          Statement as amended by any post-effective amendment thereof by the
          Fund) or in a Prospectus (the term "Prospectus" for the purpose of
          this Section 9 being deemed to include any Preliminary Prospectus, the
          sales materials, the Prospectus and the Prospectus as amended or
          supplemented by the Fund), or arises out of or is based upon any
          omission or alleged omission to state a material fact required to be
          stated in either such Registration Statement or Prospectus or
          necessary to make the statements made therein (with respect to the
          Prospectus, in light of the circumstances under which they were made)
          not misleading, except insofar as any such loss, damage, expense,
          liability or claim arises out of or is based upon any untrue statement
          or alleged untrue statement of a material fact contained in and in
          conformity with information furnished in writing by or on behalf of
          any Underwriter to the Fund, the Investment Manager or the Portfolio
          Manager expressly for use with reference to any Underwriter in such
          Registration Statement or such Prospectus or arises out of or is based
          upon any omission or alleged omission to state a material fact in
          connection with such information required to be stated in such
          Registration Statement or such Prospectus or necessary to make such
          information (with respect to the Prospectus, in light of the
          circumstances under which they were made) not misleading, provided,
          however, that the indemnity agreement contained in this subsection (a)
          with respect to any Preliminary Prospectus or amended Preliminary
          Prospectus 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, damage, expense, liability or claim
          purchased the Shares which is the subject thereof if the Prospectus
          corrected any such alleged untrue statement or omission and if such
          Underwriter failed to send or give a

                                       22

<PAGE>

          copy of the Prospectus to such person at or prior to the written
          confirmation of the sale of such Shares to such person, unless the
          failure is the result of noncompliance by the Fund with Section 5(d)
          hereof.

                If any action, suit or proceeding (together, a "Proceeding") is
          brought against an Underwriter or any such person in respect of which
          indemnity may be sought against the Fund or the Investment Manager
          pursuant to the foregoing paragraph, such Underwriter or such person
          shall promptly notify the Fund and the Investment Manager in writing
          of the institution of such Proceeding and the Fund or the Investment
          Manager shall assume the defense of such Proceeding, including the
          employment of counsel reasonably satisfactory to such indemnified
          party and payment of all fees and expenses; provided, however, that
          the omission to so notify the Fund or the Investment Manager shall not
          relieve the Fund or the Investment Manager from any liability which
          the Fund or the Investment Manager may have to any Underwriter or any
          such person or otherwise. Such Underwriter or such person shall have
          the right to employ its or their own counsel in any such case, but the
          reasonable fees and expenses of such counsel shall be at the expense
          of such Underwriter or of such person unless the employment of such
          counsel shall have been authorized in writing by the Fund or the
          Investment Manager, as the case may be, in connection with the defense
          of such Proceeding or the Fund or the Investment Manager shall not
          have, within a reasonable period of time in light of the
          circumstances, employed counsel to have charge of the defense of such
          Proceeding or such indemnified party or parties shall have reasonably
          concluded that there may be defenses available to it or them which are
          different from, additional to or in conflict with those available to
          the Fund or the Investment Manager (in which case the Fund, the
          Investment Manager shall not have the right to direct the defense of
          such Proceeding on behalf of the indemnified party or parties), in any
          of which events such reasonable fees and expenses shall be borne by
          the Fund or the Investment Manager and paid as incurred (it being
          understood, however, that the Fund or the Investment Manager shall not
          be liable for the expenses of more than one separate counsel (in
          addition to any local counsel) in any one Proceeding or series of
          related Proceedings in the same jurisdiction representing the
          indemnified parties who are parties to such Proceeding). Neither the
          Fund nor the Investment Manager shall be liable for any settlement of
          any Proceeding effected without its written consent but if settled
          with the written consent of the Fund or the Investment Manager, the
          Fund or the Investment Manager, as the case may be, agrees to
          indemnify and hold harmless any Underwriter and any such person from
          and against any loss or liability by reason of such settlement.
          Notwithstanding the foregoing sentence, 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 as
          contemplated by the second sentence of this paragraph, then the
          indemnifying party agrees that it shall be liable for any settlement
          of any

                                       23

<PAGE>

               Proceeding effected without its written consent if (i) such
               settlement is entered into more than 60 business days after
               receipt by such indemnifying party of the aforesaid request, (ii)
               such indemnifying party shall not have reimbursed the indemnified
               party in accordance with such request prior to the date of such
               settlement and (iii) such indemnified party shall have given the
               indemnifying party at least 30 days' prior notice of its
               intention to settle. No indemnifying party shall, without the
               prior written consent of the indemnified party, effect any
               settlement of any pending or threatened Proceeding in respect of
               which any indemnified party is or could have been a party and
               indemnity could have been sought hereunder by such indemnified
               party, unless such settlement includes an unconditional release
               of such indemnified party from all liability on claims that are
               the subject matter of such Proceeding and does not include an
               admission of fault, culpability or a failure to act, by or on
               behalf of such indemnified party.

         (b)   Each Underwriter severally agrees to indemnify, defend and hold
               harmless the Fund and the Investment Manager, and each of their
               respective shareholders, partners, managers, members, trustees,
               directors and officers, and any person who controls the Fund or
               the Investment Manager within the meaning of Section 15 of the
               Act or Section 20 of the Exchange Act, and the successors and
               assigns of all of the foregoing persons from and against any
               loss, damage, expense, liability or claim (including the
               reasonable cost of investigation) which, jointly or severally,
               the Fund or the Investment Manager or any such person may incur
               under the Act, the Exchange Act, the Investment Company Act, the
               Advisers Act, the common law or otherwise, insofar as such loss,
               damage, expense, liability or claim arises out of or is based
               upon any untrue statement or alleged untrue statement of a
               material fact contained in and in conformity with information
               furnished in writing by or on behalf of such Underwriter to the
               Fund or the Investment Manager expressly for use with reference
               to such Underwriter in the Registration Statement (or in the
               Registration Statement as amended by any post-effective amendment
               thereof by the Fund) or in a Prospectus, or arises out of or is
               based upon any omission or alleged omission to state a material
               fact in connection with such information required to be stated in
               such Registration Statement or such Prospectus or necessary to
               make such information not misleading (with respect to the
               Prospectus, in light of the circumstances under which they were
               made).

                   If any Proceeding is brought against the Fund, the Investment
               Manager or any such person in respect of which indemnity may be
               sought against any Underwriter pursuant to the foregoing
               paragraph, the Fund, the Investment Manager or such person shall
               promptly notify such Underwriter in writing of the institution of
               such Proceeding and such Underwriter shall assume the defense of
               such Proceeding, including the employment of counsel reasonably
               satisfactory to such indemnified party

                                       24

<PAGE>

               and payment of all fees and expenses; provided, however, that the
               omission to so notify such Underwriter shall not relieve such
               Underwriter from any liability which such Underwriter may have to
               the Fund, the Investment Manager or any such person or otherwise.
               The Fund, the Investment Manager or such person shall have the
               right to employ its own counsel in any such case, but the fees
               and expenses of such counsel shall be at the expense of the Fund,
               the Investment Manager or such person, as the case may be, unless
               the employment of such counsel shall have been authorized in
               writing by such Underwriter in connection with the defense of
               such Proceeding or such Underwriter shall not have, within a
               reasonable period of time in light of the circumstances, employed
               counsel to have charge of the defense of such Proceeding or such
               indemnified party or parties shall have reasonably concluded that
               there may be defenses available to it or them which are different
               from or additional to or in conflict with those available to such
               Underwriter (in which case such Underwriter shall not have the
               right to direct the defense of such Proceeding on behalf of the
               indemnified party or parties, but such Underwriter may employ
               counsel and participate in the defense thereof but the fees and
               expenses of such counsel shall be at the expense of such
               Underwriter), in any of which events such fees and expenses shall
               be borne by such Underwriter and paid as incurred (it being
               understood, however, that such Underwriter shall not be liable
               for the expenses of more than one separate counsel (in addition
               to any local counsel) in any one Proceeding or series of related
               Proceedings in the same jurisdiction representing the indemnified
               parties who are parties to such Proceeding). No Underwriter shall
               be liable for any settlement of any such Proceeding effected
               without the written consent of such Underwriter but if settled
               with the written consent of such Underwriter, such Underwriter
               agrees to indemnify and hold harmless the Fund, the Investment
               Manager and any such person from and against any loss or
               liability by reason of such settlement. Notwithstanding the
               foregoing sentence, if at any time an indemnified party shall
               have requested an indemnifying party to reimburse the indemnified
               party for fees and expenses of counsel as contemplated by the
               second sentence of this paragraph, then the indemnifying party
               agrees that it shall be liable for any settlement of any
               Proceeding effected without its written consent if (i) such
               settlement is entered into more than 60 business days after
               receipt by such indemnifying party of the aforesaid request, (ii)
               such indemnifying party shall not have reimbursed the indemnified
               party in accordance with such request prior to the date of such
               settlement and (iii) such indemnified party shall have given the
               indemnifying party at least 30 days' prior notice of its
               intention to settle. No indemnifying party shall, without the
               prior written consent of the indemnified party, effect any
               settlement of any pending or threatened Proceeding in respect of
               which any indemnified party is or could have been a party and
               indemnity could have been sought hereunder by such indemnified
               party, unless such settlement includes an unconditional

                                       25

<PAGE>

               release of such indemnified party from all liability on claims
               that are the subject matter of such Proceeding and does not
               include an admission of fault, culpability or a failure to act,
               by or on behalf of such indemnified party.

         (c)   If the indemnification provided for in this Section 9 is
               unavailable to an indemnified party under subsections (a) and (b)
               of this Section 9 in respect of any losses, damages, expenses,
               liabilities or claims referred to therein, then each applicable
               indemnifying party, in lieu of indemnifying such indemnified
               party, shall contribute to the amount paid or payable by such
               indemnified party as a result of such losses, damages, expenses,
               liabilities or claims (i) in such proportion as is appropriate to
               reflect the relative benefits received by the Fund and the
               Investment Manager on the one hand and the Underwriters on the
               other hand from the offering of the Shares or (ii) if the
               allocation provided by clause (i) above 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
               Manager on the one hand and of the Underwriters on the other in
               connection with the statements or omissions which resulted in
               such losses, damages, expenses, liabilities or claims, as well as
               any other relevant equitable considerations. The relative
               benefits received by the Fund and the Investment Manager on the
               one hand and the Underwriters on the other shall be deemed to be
               in the same respective proportions as the total proceeds from the
               offering (net of underwriting discounts and commissions but
               before deducting expenses) received by the Fund and the total
               underwriting discounts and commissions received by the
               Underwriters, bear to the aggregate public offering price of the
               Shares. The relative fault of the Fund and the Investment Manager
               on the one hand and of the Underwriters on the other shall be
               determined by reference to, among other things, whether the
               untrue statement or alleged untrue statement of a material fact
               or omission or alleged omission relates to information supplied
               by the Fund or the Investment Manager or by the Underwriters and
               the parties' relative intent, knowledge, access to information
               and opportunity to correct or prevent such statement or omission.
               The amount paid or payable by a party as a result of the losses,
               damages, expenses, liabilities and claims referred to in this
               subsection shall be deemed to include any legal or other fees or
               expenses reasonably incurred by such party in connection with
               investigating, preparing to defend or defending any Proceeding.

         (d)   The Fund, the Investment Manager and the Underwriters agree that
               it would not be just and equitable if contribution pursuant to
               this Section 9 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 that does not take account of
               the equitable considerations referred to in subsection (c) above.
               Notwithstanding the provisions of this Section 9, no Underwriter
               shall be required to contribute any amount in

                                       26

<PAGE>

               excess of the fees and commissions received by such Underwriter.
               No person guilty of fraudulent misrepresentation (within the
               meaning of Section 11(f) of the Act) shall be entitled to
               contribution from any person who was not guilty of such
               fraudulent misrepresentation. The Underwriters' obligations to
               contribute pursuant to this Section 9 are several in proportion
               to their respective underwriting commitments and not joint.

         (e)   The indemnity and contribution agreements contained in this
               Section 9 and the covenants, warranties and representations of
               the Fund contained in this Agreement shall remain in full force
               and effect regardless of any investigation made by or on behalf
               of any Underwriter, its partners, directors or officers or any
               person (including each partner, officer or director of such
               person) who controls any Underwriter within the meaning of
               Section 15 of the Act or Section 20 of the Exchange Act, or by or
               on behalf of the Fund or the Investment Manager, its
               shareholders, partners, managers, members, trustees, directors or
               officers or any person who controls the Fund or the Investment
               Manager within the meaning of Section 15 of the Act or Section 20
               of the Exchange Act, and shall survive any termination of this
               Agreement or the issuance and delivery of the Shares. The Fund
               and the Investment Manager and each Underwriter agree promptly to
               notify each other of the commencement of any Proceeding against
               it and, in the case of the Fund or the Investment Manager,
               against any of the Fund's or the Investment Manager's
               shareholders, partners, managers, members, trustees, directors or
               officers in connection with the issuance and sale of the Shares,
               or in connection with the Registration Statement or Prospectus.

         (f)   The Fund and the Investment Manager each acknowledge that the
               statements with respect to (1) the public offering of the Shares
               as set forth on the cover page of and (2) stabilization and
               selling concessions and reallowances of selling concessions under
               the caption "Underwriting" in the Prospectus constitute the only
               information furnished in writing to the Fund by the Underwriters
               expressly for use in such document. The Underwriters severally
               confirm that these statements are correct in all material
               respects and were so furnished by or on behalf of the
               Underwriters severally for use in the Prospectus.

         (g)   Notwithstanding any other provisions in this Section 9, no party
               shall be entitled to indemnification or contribution under this
               Underwriting Agreement against any loss, claim, liability,
               expense or damage arising by reason of such person's willful
               misfeasance, bad faith, gross negligence or reckless disregard of
               its duties in the performance of its duties hereunder.

10.      Notices. Except as otherwise herein provided, all statements, requests,
         notices and agreements shall be in writing or by telegram and, if to
         the Underwriters, shall be sufficient in all respects if delivered or
         sent to UBS Warburg LLC, 299

                                       27

<PAGE>

         Park Avenue, New York, NY 10171-0026, Attention: Syndicate Department
         and, if to the Fund or the Investment Manager, shall be sufficient in
         all respects if delivered or sent to the Fund or the Investment
         Manager, as the case may be, at the offices of the Fund or the
         Investment Manager at 1345 Avenue of the Americas, New York, New York
         10105.

11.      Governing Law; Construction. This Agreement and any claim, counterclaim
         or dispute of any kind or nature whatsoever arising out of or in any
         way relating to this Agreement ("Claim"), directly or indirectly, shall
         be governed by, and construed in accordance with, the laws of the State
         of New York. The Section headings in this Agreement have been inserted
         as a matter of convenience of reference and are not a part of this
         Agreement.

12.      Submission to Jurisdiction. Except as set forth below, no Claim may be
         commenced, prosecuted or continued in any court other than the courts
         of the State of New York located in the City and County of New York or
         in the United States District Court for the Southern District of New
         York, which courts shall have jurisdiction over the adjudication of
         such matters, and the Fund and UBS Warburg LLC each consent to the
         jurisdiction of such courts and personal service with respect thereto.
         The Fund and UBS Warburg hereby consent to personal jurisdiction,
         service and venue in any court in which any Claim arising out of or in
         any way relating to this Agreement is brought by any third party
         against UBS Warburg LLC or any indemnified party. Each of UBS Warburg
         LLC, the Fund (on its behalf and, to the extent permitted by applicable
         law, on behalf of its stockholders and affiliates) and the Investment
         Manager (on its behalf and, to the extent permitted by applicable law,
         on behalf of its unitholders and affiliates) waives all right to trial
         by jury in any action, proceeding or counterclaim (whether based upon
         contract, tort or otherwise) in any way arising out of or relating to
         this Agreement. Each of the Fund and the Investment Manager agrees that
         a final judgment in any such action, proceeding or counterclaim brought
         in any such court shall be conclusive and binding upon the Fund and the
         Investment Manager, as the case may be, and may be enforced in any
         other courts in the jurisdiction of which the Fund or the Investment
         Manager, as the case may be, is or may be subject, by suit upon such
         judgment.

13.      Parties at Interest. The Agreement herein set forth has been and is
         made solely for the benefit of the Underwriters, the Fund and the
         Investment Manager and to the extent provided in Section 9 hereof the
         controlling persons, shareholders, partners, members, trustees,
         managers, directors and officers referred to in such section, and their
         respective successors, assigns, heirs, personal representatives and
         executors and administrators. No other person, partnership, association
         or corporation (including a purchaser, as such purchaser, from any of
         the Underwriters) shall acquire or have any right under or by virtue of
         this Agreement.

                                       28

<PAGE>

14.      Counterparts. This Agreement may be signed by the parties in one or
         more counterparts which together shall constitute one and the same
         agreement among the parties.

15.      Successors and Assigns. This Agreement shall be binding upon the
         Underwriters, the Fund and the Investment Manager, and any successor or
         assign of any substantial portion of the Fund's, the Investment
         Manager's, or any of the Underwriters' respective businesses and/or
         assets.

16.      Disclaimer of Liability of Trustees and Beneficiaries. 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
         hereby is given that this Underwriting 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 under or arising out of this Underwriting Agreement are not
         binding upon any of the Trustees, officers or shareholders individually
         but are binding only upon the assets and properties of the Fund.

                                       29

<PAGE>

If the foregoing correctly sets forth the understanding among the Fund, the
Investment Manager and the Underwriters, please so indicate in the space
provided below, whereupon this letter and your acceptance shall constitute a
binding agreement among the Fund, the Investment Manager and the Underwriters,
severally.

                                               Very truly yours,

                                               PIMCO NEW YORK MUNICIPAL
                                               INCOME FUND II


                                               __________________________
                                               By:
                                               Title:

                                               PIMCO FUNDS ADVISORS LLC


                                               __________________________
                                               By:
                                               Title:



Accepted and agreed to as of the
date first above written, on
behalf of themselves and
the other several Underwriters
named in Schedule A


UBS WARBURG LLC
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
A.G. EDWARDS & SONS, INC.
FIRST UNION SECURITIES, INC.
PRUDENTIAL SECURITIES INCORPORATED
QUICK & REILLY, INC. A FLEETBOSTON FINANCIAL COMPANY
RAYMOND JAMES & ASSOCIATES, INC.
RBC DAIN RAUSCHER INCORPORATED
ADVEST, INC.
FAHNESTOCK & CO. INC.

By: UBS WARBURG LLC

                                       30

<PAGE>

____________________________
By: Oscar Junquera
Title: Managing Director

____________________________
By: Todd A. Reit
Title: Executive Director

                                       31

<PAGE>

                                   SCHEDULE A

                                                               Number of Shares
Name                                                            to be Purchased
- ----                                                            ---------------

UBS Warburg                                                       [_______]
Merrill Lynch, Pierce, Fenner & Smith Incorporated                [_______]
A.G. Edwards & Sons, Inc.                                         [_______]
First Union Securities                                            [_______]
Prudential Securities Incorporated                                [_______]
Quick & Reilly, Inc. A FleetBoston Financial Company              [_______]
Raymond James & Associates, Inc.                                  [_______]
RBC Dain Rauscher Incorporated                                    [_______]
Advest, Inc.                                                      [_______]
Fahnestock & Co., Inc.                                            [_______]


Total                                                             [_______]

<PAGE>

                                   SCHEDULE B

                               FORM OF OPINION OF
                         ROPES & GRAY REGARDING THE FUND

                                                                June [___], 2002



UBS Warburg LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
A.G. Edwards & Sons, Inc.
First Union Securities, Inc.
Prudential Securities Incorporated
Quick & Reilly, Inc. A FleetBoston Financial Company
Raymond James & Associates, Inc.
RBC Dain Rauscher Incorporated
Advest, Inc.
Fahnestock & Co. Inc.
     c/o UBS Warburg LLC
     299 Park Avenue
     New York, New York 10171-0026

Ladies and Gentlemen:

         We have acted as counsel to PIMCO New York Municipal Income Fund II
(the "Fund") in connection with the proposed issuance of [    ] common shares of
beneficial interest (the "Shares"). This opinion is furnished to you pursuant to
Section 7(e) of the Underwriting Agreement dated as of June [___], 2002 (the
"Underwriting Agreement") among the Fund, PIMCO Funds Advisors LLC (the
"Investment Manager") and UBS Warburg LLC, CIBC World Markets Corp., A.G.
Edwards & Sons, Inc., and Advest, Inc. 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
Underwriting Agreement.

         We have examined signed copies of the Registration Statement of the
Fund on Form N-2 (File No. 333-86284) under the Securities Act of 1933, as
amended (the "Securities Act") (which also constitutes the Fund's Registration
Statement on Form N-2 (File No. 811-21078) 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 April 15, 2002 (the "Original Registration Statement"), Pre-Effective
Amendment No. 1 to the Original Registration

                                      A-2

<PAGE>

Statement, including all exhibits thereto, as filed with the Commission on May
29, 2002 ("Pre-Effective Amendment No. 1"), Pre-Effective Amendment No. 2 to the
Original Registration Statement, including all exhibits thereto, as filed with
the Commission on June [___], 2002 ("Pre-Effective Amendment No. 2") and
Pre-Effective Amendment No. 3 to the Original Registration Statement, including
all exhibits thereto, as filed with the Commission on June [___], 2002
("Pre-Effective Amendment No. 3," and together with Pre-Effective Amendment No.
1, Pre-Effective Amendment No. 2 and the Original Registration Statement, the
"Registration Statement"); the Fund's Notification of Registration on Form N-8A
under the Investment Company Act, as filed with the Commission on April 15, 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 June [___], 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 June [___], 2002, relating to the
Shares and the Statement of Additional Information of the Fund dated June [___],
2002, each as filed with the Commission pursuant to Rule 497 under the
Securities Act on June [___], 2002 (together, the "Prospectus"); the Investment
Management Agreement dated as of June [___], 2002, between the Fund and the
Investment Manager (the "Investment Management Agreement"); the Portfolio
Management Agreement dated as of June [___], 2002, between Pacific Investment
Management Company LLC (the "Portfolio Manager") and the Investment Manager (the
"Portfolio Management Agreement"); the Custodian Agreement dated as of June
[___], 2002, between the Fund and State Street Bank and Trust Company (the
"Custodian Agreement") and the Transfer Agency Services Agreement dated as of
June [___], 2002, between the Fund and PFPC Inc. (the "Transfer Agency
Agreement," and together with the Custodian Agreement, the "Fund Agreements");
the Terms and Conditions of the Fund's Dividend Reinvestment Plan; and the
Underwriting Agreement. Additionally, we have relied upon the oral
representation of Mr. James O'Connor of the Commission staff to the effect that
the Registration Statement and the Exchange Act Registration Statement became
effective as of [___ a.m./p.m.] on June [___], 2002; a letter dated June [___],
2002, from Ms. Catherine Kinney, Executive Vice President of the New York Stock
Exchange, authorizing the Shares for listing on such Exchange; and the oral
representation by the [_________] of the Commission [staff] that as of [    ]
[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 minutes
of the meetings or written consents of the sole shareholder and the Board of
Trustees of the Fund, the documents delivered to the Underwriters by the Fund
and the Investment Manager dated as of the date hereof pursuant to the
Underwriting Agreement and such other documents, including certificates of
officers of the Fund and certificates of the Secretary of State of the State of
New York as to the qualification and good standing of

                                       A-3

<PAGE>

the Fund as a foreign entity in New York and the Secretary of State of the State
of California as to the qualification and good standing of the Fund as a foreign
entity in California, as we have deemed necessary for purposes of rendering our
opinions below. 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.

         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 Underwriting 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 Underwriting Agreement, the Investment
Management Agreement and the Fund Agreements 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.

         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 upon representations made by the Fund and the Investment Manager in
the Underwriting 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. In respect of our opinions set
forth in paragraphs [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 Date, 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 June [___], 2002, and on this
date, no stop order suspending the

                                      A-4

<PAGE>

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 Fund is duly qualified to do
business and is in good standing as a foreign [entity] in New York and
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 captions "Description of shares" in the
Prospectus. All 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 below, non-assessable. The Shares have been duly
authorized and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms of the Underwriting Agreement, will be
validly issued, fully paid and, subject to the penultimate paragraph below,
non-assessable. Except as contemplated by the Underwriting Agreement, no person
is entitled to any preemptive or other similar rights with respect to the
Shares.

         4. To the best of our knowledge after due inquiry, including oral
inquiries of the Commission staff on June [___], 2002, the Fund is duly
registered with the Commission under the Investment Company Act as a closed-end
management investment company, and 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
Underwriting 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 Fund Agreement has been duly and validly authorized, executed
and delivered by the Fund. Each Fund 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. 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 Underwriting Agreement and to perform
all of the terms and provisions thereof to be carried out by it. The Investment
Management Agreement

                                      A-5

<PAGE>

and the Underwriting Agreement have been duly and validly authorized, executed
and delivered by the Fund.

         7.  None of (a) the execution and delivery by the Fund of the
Investment Management Agreement, the Underwriting Agreement or any of the Fund
Agreements, (b) the issue and sale by the Fund of the Shares as contemplated by
the Underwriting Agreement and (c) the performance by the Fund of its
obligations under the Investment Management Agreement, the Underwriting
Agreement or any of the Fund Agreements or consummation by the Fund of the other
transactions contemplated by the Investment Management Agreement, the
Underwriting Agreement or any of the Fund Agreements conflicts or will conflict
with, or results or will result in a breach of, the Declaration of Trust or the
By-laws or, to our knowledge, any agreement or instrument to which the Fund is a
party or by which the Fund is bound, or violates or will violate any federal
statute, law or regulation or any judgment, injunction, order or decree of any
federal 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 the best of our knowledge, the Fund is not currently in breach
of, or in default under, 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 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 Agreement, the Underwriting 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 Underwriting Agreement.

         10. To the best of our knowledge after due inquiry, including oral
inquiries of an employee of the New York Stock Exchange on June [___], 2002, the
Shares have been authorized for listing on the New York Stock Exchange, subject
to official notice of issuance, and to the best of our knowledge after due
inquiry, including oral inquiries of the Commission staff on June [___], 2002,
the Exchange Act Registration Statement has become effective.

         11. To our knowledge, there are no legal or governmental proceedings
pending or threatened against the Fund, or to which the Fund or any of its
properties is subject, that are required to be described in the Registration
Statement or the Prospectus but are not described therein as required.

         12. To the best of our knowledge after due inquiry, 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

                                      A-6

<PAGE>

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 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 time it became effective, and the Prospectus
(except as aforesaid), as of the date thereof, complied as to form in all
material respects to the applicable requirements of the Securities Act and the
Investment Company Act.

         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] 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 have necessarily recognized the materiality of such facts as were
disclosed to us, and we have to a large extent relied upon statement 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
connections with its preparation of the Registration Statement 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 June [___],
2002, 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).

                                      A-7

<PAGE>

     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 Skadden, Arps,
Slate, Meagher & Flom (Illinois) 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 & Gray

                                      A-8

<PAGE>

                                   SCHEDULE C

                       FORM OF OPINION OF INTERNAL COUNSEL
                       REGARDING PIMCO FUNDS ADVISORS LLC

                                June [___], 2002

UBS Warburg LLC
Merrill Lynch, Pierce, Fenner & Smith Incorporated
A.G. Edwards & Sons, Inc.
First Union Securities, Inc.
Prudential Securities Incorporated
Quick & Reilly, Inc. A FleetBoston Financial Company
Raymond James & Associates, Inc.
RBC Dain Rauscher Incorporated
Advest, Inc.
Fahnestock & Co. Inc.
   as Managing Underwriters
299 Park Avenue
New York, New York  10171-0026

     Re:  PIMCO Funds Advisors LLC

Ladies and Gentlemen:

     I am the General Counsel of PIMCO Funds Advisors LLC, a Delaware limited
liability company ("PIMCO Funds Advisors"), and have counseled PIMCO Funds
Advisors in such capacity in connection with the sale to you by PIMCO
[California] [New York] Municipal Income Fund II, 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, 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 April 15, 2002 (Act
File No. 333-86284, and Investment Company Act File No. 811-21078), as amended
by Amendment No. 1 filed with the Commission on May 29, 2002, Amendment No. 2
filed with the Commission on June [___], 2002 and Amendment No. 3 filed with the
Commission on June [___], 2002 [, and a registration statement on Form N-2 under
the Act and the Investment Company Act, filed with the Commission on June [___],
2002 pursuant to Rule 462(b) under the Act ([such registration statements
collectively referred to herein as] the "Registration Statement"), and an
underwriting agreement dated June [___], 2002 by and among you, the Fund and
PIMCO Funds Advisors (the "Underwriting Agreement").




<PAGE>

     This opinion is rendered to you pursuant to Section 6(e) of the
Underwriting Agreement. Capitalized terms used herein without definition have
the meanings assigned to them in the Underwriting Agreement.

     As such counsel, 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 Underwriting Agreement;

     (b)  that certain Investment Management Agreement by and between the Fund
          and the PIMCO Funds Advisors, dated as of June [___], 2002, and;

     (c)  that certain Portfolio Management Agreement by and among Pacific
          Investment Management Company LLC and PIMCO Funds Advisors, as
          accepted and agreed to by the Fund, dated as of June [___], 2002.

     The documents described in subsection (a)-(c) 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 PIMCO Funds Advisors 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 PIMCO Funds Advisors 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 3 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

                                      B-2

<PAGE>

statement should be drawn from my position as General Counsel of PIMCO Funds
Advisors.

          Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:

          1. PIMCO Funds Advisors is a limited liability company and is validly
existing and in good standing under the Delaware Limited Liability Company Act
(6 Del. C (S). 18-101, et seq.) with all necessary 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 solely on certificates from
public officials, I confirm that PIMCO Funds Advisors is qualified to do
business in the following States: California, New York, Connecticut, Texas and
Washington, such States being those jurisdictions in which its ownership or
leasing of property or its conducting of business requires such qualification
and where failure to so qualify would have a material adverse effect on the
ability of the Investment Manager 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 PIMCO Funds Advisors have been duly authorized by all necessary
action of PIMCO Funds Advisors and no other actions on the part of PIMCO Funds
Advisors or its unitholders or any subsidiary of PIMCO Funds Advisors or its
unitholders is necessary to authorize and consummate the transactions
contemplated thereby, and the Transaction Documents have been duly executed and
delivered by PIMCO Funds Advisors.

          3. Each of the Investment Management Agreement and the Portfolio
Management Agreement constitutes a legally valid and binding agreement of PIMCO
Funds Advisors, enforceable against PIMCO Funds Advisors in accordance with its
terms.

          4. Neither the execution and delivery of the Transaction Documents by
PIMCO Funds Advisors, nor the consummation by PIMCO Funds Advisors of
transactions contemplated thereby, nor compliance by PIMCO Funds Advisors with
any of the terms and provisions thereof will:

             (i)    violate any provision of the Limited Liability Company
     Agreement of PIMCO Funds Advisors LLC, effective [        ],

             (ii)   violate any federal, California or New York statute, rule or

     regulation applicable to PIMCO Funds Advisors (other than federal and state
     securities or blue sky laws, the Investment Company Act of 1940, as
     amended, and the Investment Advisers Act of 1940, as amended, as to which I
     express no opinion),

             (iii)  violate any agreement to which PIMCO Funds Advisors is a
     party or by which it is bound and which is material to PIMCO Funds
     Advisors' businesses taken as a whole (the "Material Agreements"),

                                      B-3

<PAGE>

                          (iv) violate any order, writ, injunction or decree,
         known to me and applicable to PIMCO Funds Advisors, or

                          (v)  to the best of my knowledge, require any
         consents, approvals, authorizations, registrations, declarations or
         filings by PIMCO Funds Advisors under any federal statute, rule or
         regulation applicable to PIMCO Funds Advisors, except as have been
         obtained under the Act, the Investment Company Act or the Investment
         Advisers Act of 1940.

                  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 Funds Advisors' businesses.

                  5.      PIMCO Funds Advisors 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 Advisory Agreement, the Registration Statement
and the Prospectus.

                  6.      The description of PIMCO Funds Advisors and its
business, and the statements attributable to PIMCO Funds Advisors, set forth in
the Registration Statement and the Prospectus under the headings "Prospectus
Summary - Investment Manager" and "Management of the Fund" do not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.

                  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 Funds Advisors of a nature required to be
disclosed in the Registration Statement or Prospectus or the ability of PIMCO
Funds Advisors to fulfill its obligations under the Investment Management
Agreement or 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;

                  (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

                                       B-4

<PAGE>

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 Funds Advisors may be
dependent upon such matters, I assume for purposes of this opinion that: (i) all
parties to the Transaction Documents other than PIMCO Funds Advisors 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 PIMCO Funds Advisors 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
PIMCO Funds Advisors are a party have been duly authorized, executed and
delivered by such parties and, other than PIMCO Funds Advisors, constitute 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
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.

                                      B-5

<PAGE>

                                                    Very truly yours,

                                      * * *

Special Counsel for the Investment Adviser shall separately opine that, assuming
the Investment 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 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 Underwriting 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 provisions of the Investment
Company Act or the Advisers Act; provided, however, that such opinion may
specifically disclaim any opinion as to (a) the reasonableness of the fees to be
paid to the Investment Manager under the Investment Management Agreement and (b)
the compliance by the Investment Manager with its indemnification and
contribution obligations set forth in the Underwriting Agreement.

                                      B-6

<PAGE>

                                   SCHEDULE D

                       FORM OF OPINION OF INTERNAL COUNSEL
                               REGARDING PIMCO LLC

                                June [___], 2002

UBS Warburg LLC

Merrill Lynch, Pierce, Fenner & Smith Incorporated
A.G. Edwards & Sons, Inc.
First Union Securities, Inc.
Prudential Securities Incorporated
Quick & Reilly, Inc. A FleetBoston Financial Company
Raymond James & Associates, Inc.
RBC Dain Rauscher Incorporated
Advest, Inc.
Fahnestock & Co. Inc.
   as Managing Underwriters
299 Park Avenue
New York, New York  10171-0026

          Re:  Pacific Investment Management Company LLC

Ladies and Gentlemen:

          I am the General Counsel of PIMCO Funds Advisors LLC, a Delaware
limited liability company ("PIMCO Funds Advisors"), managing member of Pacific
Investment Management Company LLC, a Delaware limited liability company
("PIMCO"), and have counseled PIMCO in such capacity in connection with the sale
to you by PIMCO [California] [New York] Municipal Income Fund II, 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, 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 April 15, 2002
(Act File No. 333-86284, and Investment Company Act File No. 811-21078), as
amended by Amendment No. 1 filed with the Commission on May 29, 2002, Amendment
No. 2 filed with the Commission on June [___], 2002 and Amendment No. 3 filed
with the Commission on June [___], 2002 [, and a registration statement on Form
N-2 under the Act and the Investment Company Act, filed with the Commission on
June [___], 2002 pursuant to Rule 462(b) under the Act ([such registration
statements collectively referred to herein as] the "Registration Statement"),
and an underwriting agreement dated June [___], 2002

                                      B-7

<PAGE>

by and among you, the Fund and PIMCO Funds Advisors (the "Underwriting
Agreement").

          This opinion is rendered to you pursuant to Section 6(e) of the
Underwriting Agreement. Capitalized terms used herein without definition have
the meanings assigned to them in the Underwriting Agreement.

          As such counsel, 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 and between PIMCO and the PIMCO Funds Advisors LLC, as accepted and agreed to
by the Fund, dated as of June [ ], 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 3 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 General Counsel of PIMCO Funds Advisors.

          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(S).
18-101, et seq.) with all necessary partnership power and authority to enter
into and deliver the

                                      B-8

<PAGE>

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 solely on certificates from public officials, I
confirm that PIMCO is qualified to do business in the following States:
______________, such States being those jurisdictions in which its ownership or
leasing of property or its conducting of business requires such qualification
and where failure to so qualify would have a material adverse effect on the
ability of the Investment Manager to perform its obligations under the
Investment Management Agreement and the Portfolio Management Agreement.

          2.   The execution, delivery and performance of the Portfolio
Management Agreement by PIMCO have been duly authorized by all necessary
partnership 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:

               (i)   violate any provision of the [Limited Liability Company
     Agreement] of PIMCO, effective [       ],

               (ii)  violate any federal, California or New York statute, rule
     or regulation applicable to PIMCO (other than federal and state securities
     or blue sky laws, the Investment Company Act of 1940, as amended, and the
     Investment Advisers Act of 1940, as amended, 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
      Investment Advisers Act of 1940.

          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

                                      B-9

<PAGE>

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" and
"Management of the Fund" do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.

      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 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;

      (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

                                      B-10

<PAGE>

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 to which they are a party;
and (iii) the Portfolio Management Agreement has been duly authorized, executed
and delivered by such parties other than PIMCO and, other than PIMCO, constitute
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,

                                      B-11

<PAGE>

                                   SCHEDULE E

                       FORM OF OPINION OF EDWARDS & ANGELL

      We have reviewed the statements set forth in the Prospectus under the
heading "Tax Matters - New York Tax Matters" and in Appendix B to the Statement
of Additional Information under the heading "Factors Pertaining to New York".
Based upon the foregoing, we are of the opinion that the statements contained in
the Prospectus under the heading "Tax Matters - New York Tax Matters" and in
Appendix B to the Statement of Additional Information under the heading "Factors
Pertaining to New York", to the extent that such statements purport to
constitute summaries of matters of law or legal conclusions, constitute accurate
summaries of such law or legal conclusions in all material respects. Such
statements are based on current New York tax laws and our understanding of the
Fund's proposed operations, as disclosed in the Prospectus.

      We have not independently verified the accuracy, completeness or fairness
of the statements made in the Prospectus under the heading "Tax Matters - New
York Tax Matters" and in Appendix B to the Statement of Additional Information
under the heading "Factors Pertaining to New York" and take no responsibility
therefor, except as and to the extent set forth above. In the course of the
preparation by the Fund of the Prospectus and Statement of Additional
Information, we participated in conferences with counsel to the Fund concerning
the information contained in the Prospectus and in Appendix B to the Statement
of Additional Information under such headings. Based upon our examination of the
Prospectus and Statement of Additional Information and our participation in the
conferences referred to above, we have no reason to believe that the statements
made in the Prospectus under the heading "Tax Matters - New York Tax Matters"
and in Appendix B to the Statement of Additional Information under the heading
"Factors Pertaining to New York" contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

<PAGE>

                                   SCHEDULE F

                           FORM OF ACCOUNTANT'S LETTER

June [___], 2002

The Board of Trustees of
PIMCO New York Municipal Income Fund II
840 Newport Center Drive
Suite 300
Newport Beach, California 92660

UBS Warburg LLC
299 Park Avenue
New York, New York 10171
 as Managing Representative of the Underwriters

Ladies and Gentlemen:

             We have audited the statement of assets and liabilities of PIMCO
New York Municipal Income Fund II (the "Fund") as of June [___], 2002 included
in the Registration Statement on Form N-2 filed by the Fund under the Securities
Act of 1933 (the "Act") (File No. 333-86284) and under the Investment Company
Act of 1940 (the "1940 Act") (File No. 811-21078); such statement and our report
with respect to such statement are included in the Registration Statement.

In connection with the Registration Statement:

             1. We are independent public accountants with respect to the Fund
         within the meaning of the Act and the applicable rules and regulations
         thereunder.

             2. In our opinion, the statement of assets and liabilities included
         in the Registration Statement and audited by us complies as to form in
         all respects with the applicable accounting requirements of the Act,
         the 1940 Act and the respective rules and regulations thereunder.

             3. For purposes of this letter we have read the minutes of all
         meetings of the Shareholders, the Board of Trustees and all Committees
         of the Board of Trustees of the Fund as set forth in the minute books
         at the offices of the Fund, officials of the Fund having advised us
         that the minutes of all such meetings through June [___], 2002, were
         set forth therein.

             4. Fund officials have advised us that no financial statements as
         of any date subsequent to June [___], 2002, are available. We have
         made inquiries of certain officials of the Fund who have responsibility
         for financial and accounting

<PAGE>

             matters regarding whether there was any change at June [___], 2002,
             in the capital shares or net assets of the Fund as compared with
             amounts shown in the June [___], 2002, statement of assets and
             liabilities included in the Registration Statement, except for
             changes that the Registration Statement discloses have occurred or
             may occur. On the basis of our inquiries and our reading of the
             minutes as described in Paragraph 3, nothing came to our attention
             that caused us to believe that there were any such changes.

             The foregoing procedures do not constitute an audit made in
accordance with generally accepted auditing standards. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures for your
purposes.

             This letter is solely for the information of the addressees and to
assist the underwriters in conducting and documenting their investigation of the
affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.

                                             Very Truly Yours,




                                             PRICEWATERHOUSECOOPERS LLP

                                        2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(H)(2)
<SEQUENCE>10
<FILENAME>dex99h2.txt
<DESCRIPTION>FORM OF MASTER SELECTED DEALER AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit h.2

                        MASTER SELECTED DEALER AGREEMENT

                                            , 2002

UBS Warburg LLC
299 Park Avenue
New York, New York  10171


Gentlemen:

     1.   General. We understand that UBS Warburg LLC ("UBS Warburg") is
entering into this Agreement with us and other firms who may be offered the
right to purchase as principal a portion of securities being distributed to the
public. The terms and conditions of this Agreement shall be applicable to any
public offering of securities ("Securities") wherein UBS Warburg (acting for its
own account or for the account of any underwriting or similar group or
syndicate) is responsible for managing or other wise implementing the sale of
the Securities to selected dealers ("Selected Dealers") and has expressly
informed us that such terms and conditions shall be applicable. Any such
offering of Securities to us as a Selected Dealer is hereinafter called an
"Offering." In the case of any Offering in which you are acting for the account
of any underwriting or similar group or syndicate ("Underwriters"), the terms
and conditions of this Agreement shall be for the benefit of, and binding upon,
such Underwriters, including, in the case of any Offering in which you are
acting with others as representatives of Underwriters, such other
representatives. The term "preliminary prospectus" means, in the case of an
Offering registered under the Securities Act of 1933 (the "Securities Act"), any
preliminary prospectus relating to an Offering of Securities or any preliminary
prospectus supplement together with a prospectus relating to an Offering of
Securities and, in the case of an Offering not registered under the Securities
Act, any preliminary offering circular relating to an Offering of Securities or
any preliminary offering circular supplement together with an offering circular
relating to an Offering of Securities; the term "Prospectus" means, in the case
of an Offering registered under the Securities Act of 1933 (the "Securities
Act"), the prospectus, together with the final prospectus supplement, if any,
relating to such Offering of Securities, filed pursuant to Rule 424(b) or Rule
424(c) under the Securities Act and, in the case of an Offering not registered
under the Securities Act, the final offering circular, including any
supplements, relating to such Offering of Securities.

     2.   Conditions of Offering; Acceptance and Purchase. Any Offering will

<PAGE>

be subject to delivery of the Securities and their acceptance by you and any
other Underwriters, may be subject to the approval of all legal matters by
counsel and the satisfaction of other conditions, and may be made on the basis
of reservation of Securities or an allotment against subscription. You will
advise us by telegram, telex or other form of writ ten communication ("Written
Communication") of the particular method and supplementary terms and conditions
(including, without limitation, the information as to prices and offering date
referred to in Section 3(b)) of any Offering in which we are invited to
participate. To the extent such supplementary terms and conditions are
inconsistent with any provision herein, such terms and conditions shall
supersede any such provision. Unless otherwise indicated in any such Written
Communication, acceptances and other communications by us with respect to any
Offering should be sent to UBS Warbrug LLC, 299 Park Avenue, New York, New York
10171. You reserve the right to reject any acceptance in whole or in part.
Payment for Securities purchased by us is to be made at such office as you may
designate, at the public offering price, or, if you shall so advise us, at such
price less the concession to dealers or at the price set forth or indicated in a
Written Communication, on such date as you shall determine, on one day's prior
notice to us, by certified or official bank check in New York Clearing House
funds payable to the order of PaineWebber Incorporated, against delivery of
certificates evidencing such Securities. If payment is made for Securities
purchased by us at the public offering price, the concession to which we shall
be entitled will be paid to us upon termination of the provisions of Section
3(b) with respect to such Securities.

       Unless we promptly give you written instructions otherwise, if
transactions in the Securities may be settled through the facilities of The
Depository Trust Company, payment for and delivery of Securities purchased by us
will be made through such facilities if we are a member, or if we are not a
member, settlement may be made through our ordinary correspondent who is a
member.

       3.  Representations, Warranties and Agreements. (a) Prospectuses. You
shall provide us with such number of copies of each preliminary prospectus, the
Prospectus and any supplement thereto relating to each Offering as we may
reasonably request. If the Securities will be registered under the Securities
Act, we represent that we are familiar with Rule 15c2-8 under the Exchange Act
relating to the distribution of preliminary and final prospectuses and agree
that we will comply therewith; we agree to keep an accurate record of our
distribution (including dates, number of copies and persons to whom sent) of
copies of the Prospectus or any preliminary prospectus (or any amendment or
supplement to any thereof), and promptly upon request by you, to bring all
subsequent changes to the attention of anyone to whom such material shall have
been furnished, and we agree to furnish to persons who receive a confirmation of
sale a copy

                                       2

<PAGE>

of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under the
Securities Act. If the Securities will not be registered under the Securities
Act, we agree that we will deliver all preliminary and final offering circulars
required for compliance with the applicable laws and regulations governing the
use and distribution of offering circulars by underwriters, and, to the extent
consistent with such laws and regulations, we confirm that we have delivered and
agree that we will deliver all preliminary and final offering circulars which
would be required if the provisions of Rule 15c2-8 under the Exchange Act
applied to this offering. We agree that in purchasing Securities in an Offering
we will rely upon no statements whatsoever, written or oral, other than the
statements in the Prospectus delivered to us by you. We will not be authorized
by the issuer or other seller of Securities offered pursuant to a Prospectus or
by any Underwriters to give any information or to make any representation not
contained in the Prospectus in connection with the sale of such Securities.

        (b)  Offer and Sale to the Public. With respect to any Offering of
Securities, you will inform us by a Written Communication of the public offering
price, the selling concession, the relaunch (if any) to dealers and the time
when we may commence selling Securities to the public. After such public
offering has commenced, you may change the public offering price, the selling
concession and the relaunch to dealers. With respect to each Offering of
Securities, until the provisions of this Section 3(b) shall be terminated
pursuant to Section 4, we agree to offer Securities to the public only at the
public offering price, except that if a relaunch is in effect, a relaunch from
the public offering price not in excess of such relaunch may be allowed as
consideration for services rendered in distribution to dealers who are actually
engaged in the investment banking or securities business, who execute the
written agreement prescribed by Section 24(c) of Article III of the Rules of
Fair Practice of the National Association of Securities Dealers, Inc. (the
"NASD"), and who are either members in good standing of the NASD or foreign
brokers or dealers not eligible for membership in the NASD who represent to us
that they will promptly rafter such Securities at the public offering price and
will abide by the conditions with respect to foreign brokers and dealers set
forth in Section 3(e).

        (c)  Stabilization and Over-Allotment. You may, with respect to any
Offering, be authorized to over-allot in arranging sales to Selected Dealers, to
purchase and sell Securities, any other securities of the issuer of the
Securities of the same class and series and any other securities of such issuer
that you may designate for long or short account and to stabilize or maintain
the market price of the Securities. We agree to advise you from time to time
upon request, prior to the termination of the provisions of Section 3(b) with
respect to any Offering, of the amount of Securities purchased by us hereunder
remaining unsold and we will, upon your re quest, sell to you, for the accounts
of the Underwriters, such amount of Securities as you may designate, at the
public offering

                                       3

<PAGE>

price thereof less an amount to be deter mined by you not in excess of the
concession to dealers. In the event that prior to the later of (i) the
termination of the provisions of Section 3(b) with respect to any Offering, or
(ii) the covering by you of any short position created by you in connection with
such Offering for your account or the account of one or more Underwriters, you
purchase or contract to purchase for the account of any of the Underwriters, in
the open market or other wise, any Securities theretofore delivered to us, you
reserve the right to withhold the above-mentioned concession to dealers on such
Securities if sold to us at the public offering price, or if such concession has
been allowed to us through our purchase at a net price, we agree to repay such
concession upon your demand, plus in each case any taxes on redeliver,
commissions, accrued interest and dividends paid in connection with such
purchase or contract to purchase.

        (d)  Open Market Transactions. We agree not to bid for, purchase,
attempt to purchase, or sell, directly or indirectly, any Securities, any other
securities of the issuer of the Securities of the same class and series or any
other securities of such issuer as you may designate, except as brokers pursuant
to unsolicited orders and as otherwise provided in this Agreement. If the
Securities are common stock or securities convertible into common stock, we
agree not to effect, or attempt to induce others to effect, directly or
indirectly, any transactions in or relating to put or call options on any stock
of such issuer, except to the extent permitted by Rule 10b-6 under the Exchange
Act as interpreted by the Securities and Exchange Commission. An opening
uncovered writing transaction in options to acquire Securities for our account
or for the account of any customer shall be deemed, for purposes of the
preceding sentence, to be a transaction effected by us in or relating to put or
call options on stock of the Company not permitted by Rule 10b-6. The term
"opening uncovered writing transaction" means an opening sale transaction where
the seller in tends to become a writer of an option to purchase stock which it
does not own or have the right to acquire upon exercise of conversion or option
rights.

        (e)  NASD. We represent that we are actually engaged in the investment
banking or securities business and we are either a member in good standing of
the NASD, or, if not such a member, a foreign dealer not eligible for
membership. If we are such a member we agreed that in making sales of the
Securities we will comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation with Respect to Free-Riding and
Withholding and Section 24 of Article III of the Rules of Fair Practice. If we
are such a foreign dealer, we agree not to offer or sell any Securities in the
United States of America except through you and in making sales of Securities
outside the United States of America, we agree to comply, as though we were a
member with such Interpretation and Sections 8, 24 and 36 of Article III of the

                                       4

<PAGE>

NASD's Rules of Fair Practice and to comply with Section 23 of such Article III
as it applies to a nonmember broker or dealer in a foreign country.

        (f)  Relationship among Underwriters and Selected Dealers. You may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with your consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the public
offering price less all or any part of the concession. We are not authorized to
act as agent for you or any Underwriter or the issuer or other seller of any
Securities in offering Securities to the public or otherwise. Nothing contained
herein or in any Written Communication from you shall constitute the Selected
Dealers partners with you or any Underwriter or with one another. Neither you
nor any Underwriter shall be under any obligation to us except for obligations
assumed hereby or in any Written Communication from you in connection with any
Offering. In connection with any Offering, we agree to pay our proportionate
share of any claim, demand or liability asserted against us, and the other
Selected Dealers or any of them, or against you or the Underwriters, if any,
based on any claim that such Selected Dealers or any of them constitute an
association, unincorporated business or other separate entity, including in each
case our proportionate share of any expense incurred in defending against any
such claim, demand or liability.

        (g)  Blue Sky Laws. Upon application to you, you will inform us as to
the jurisdictions in which you believe the Securities have been qualified for
sale under the respective securities of "blue sky" laws of such jurisdictions.
We understand and agree that compliance with the securities or "blue sky" laws
in each jurisdiction in which we shall offer or sell any of the Securities shall
be our sole responsibility and that you assume no responsibility or obligations
as to the eligibility of the Securities for sale or our right to sell the
Securities in any jurisdiction.

        (h)  Compliance with Law. We agree that in selling Securities pursuant
to any Offering (which agreement shall also be for the benefit of the issuer or
other seller of such Securities) we will comply with the applicable provisions
of the Securities Act and the Exchange Act, the applicable rules and regulations
of the Securities and Exchange Commission thereunder, the applicable rules and
regulations of the NASD and the applicable rules and regulations of any
securities exchange having jurisdiction over the Offering. You shall have full
authority to take such action as you may deem advisable in respect of all
matters pertaining to any Offering. Neither you nor any Underwriter shall be
under any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; provided, however, that nothing in
this sentence shall be deemed to relieve you from any liability imposed by the
Securities Act.

                                       5

<PAGE>


       4.  Termination; Supplements and Amendments. This agreement may be
terminated by either party herein upon five business days' written notice to the
other party; provided that with respect to any Offering for which a Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d) with
regard to any Offering will terminate at the close of business on the thirtieth
day after the date of the initial public offering of the Securities to which
such Offering relates, but such terms and conditions, upon notice to us, may be
terminated by you at any time.

       5.  Successors and Assigns. This Agreement shall be binding on, and inure
to the benefit of, the parties hereto and other persons specified or indicated
in Section 1, and the respective successors and assigns of each of them.

       6.  Governing Law. This Agreement and the terms and conditions set forth
herein with respect to any Offering together with such supplementary terms and
conditions with respect to such Offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.

       By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to other terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with the
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of which shall
constitute a binding agreement between us and you, individually or as
representative of any Underwriters, (ii) confirmation that our representations
and warranties set forth in Section 3 are true and correct at that time and
(iii) confirmation that our agreements set forth in Sections 2 and 3 have been
and will be fully performed by us to the extent and at the times required
thereby.

                                Very truly yours,

                                       6

<PAGE>


                                    ---------------------------
                                    (Name of Firm)

                                    By_________________________
                                    Title______________________


Confirmed, as of the date
first above written.

UBS Warburg LLC



By_______________________
Title:  Vice President

                                       7

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(H)(3)
<SEQUENCE>11
<FILENAME>dex99h3.txt
<DESCRIPTION>FORM OF MASTER AGREEMENT AMONG UNDERWRITERS
<TEXT>
<PAGE>

                                                                     Exhibit h.3

                       Master Agreement Among Underwriters

UBS Warburg LLC
299 Park Avenue
New York, New York 10171-0026


Ladies and Gentlemen:

We hereby agree that this Master Agreement Among Underwriters (this "Agreement")
will apply to our participation in offerings of securities where you act as
Manager or one of the Managers of the underwriting syndicate (including
offerings subject to competitive bidding where you act as Representative of a
group of bidders or purchasers). The issuer of the securities is referred to as
the "Company", the seller of any such securities other than the Company is
referred to as the "Seller" and such securities are referred to as the
"Securities".

1.   Applicability

This Agreement as amended or supplemented by the Terms Communication (as defined
below) will apply to any offering of Securities, pursuant to a registration
statement filed under the Securities Act of 1933, as amended, and the rules and
regulations thereunder (collectively, the "Securities Act"), or exempt from such
registration, where you have informed us that this Agreement applies. Any such
offering in which we participate as an Underwriter is referred to as an
"Offering".

You may, from time to time, invite us to participate in an Offering by sending a
wire, telex, facsimile or other means of invitation relating to that Offering
(an "Invitation"). As to any such Offering, you will promptly advise us of the
following as applicable: the amount of Securities to be underwritten by us, the
expected offering and closing dates, the offering price and the purchase price,
the interest or dividend rate (or the method by which such rate is to be
determined), the conversion price, the underwriting discount, the management
fee, the concession and the reallowance. If the offering price is to be
determined by a formula based upon the market price of certain securities
("Formula Pricing"), you will so indicate and specify the maximum underwriting
discount, management fee and concession. You will also advise us if the Offering
includes Delayed Delivery Contracts or if the Underwriting Agreement (as defined
below) grants the Underwriters an option to purchase additional Securi-

<PAGE>

ties (the "Option Securities"). The foregoing information may be conveyed in the
Invitation or in a Terms Wire substantially in the forms of Exhibits A and B
hereto, respectively (collectively, the "Terms Communication"). The Terms
Communication may also supplement or amend the terms of this Agreement
applicable to an Offering.

Receipt of our acceptance substantially in the form set forth in Exhibit A
without receipt of our written revocation before the time specified in the Terms
Communication constitutes our "Final Acceptance". By our Final Acceptance, we
agree that this Agreement will be incorporated by reference in such Terms
Communication as though set forth in its entirety and will govern our
participation in such Offering.

2.   Underwriting Agreement and Master Underwriters' Questionnaire

For each Offering, the Company, any Seller and/or any guarantor of such
Securities will enter into an underwriting or purchase agreement or similar
agreement (the "Underwriting Agreement"), which will be sent to us, available
for review in your office or in publicly available form with the Securities and
Exchange Commission (the "Commission"). By our Final Acceptance, we authorize
you to purchase on our behalf the amount of the Securities set forth in the
Terms Communication (our "Initial Commitment") plus our share of any Option
Securities less any amount of our Securities to be sold pursuant to Delayed
Delivery Contracts under Section 7 below. The Securities we are obligated to
purchase after any such adjustment are referred to as "Our Securities." If the
Securities are debt obligations maturing serially, our allocation of the
maturities will be proportionate to our underwriting obligation.

Our Final Acceptance will also constitute (i) our representation that our
commitment with respect to the Offering will not violate any applicable capital
requirements of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder (collectively, the "Exchange Act"), the National
Association of Securities Dealers, Inc. ("NASD") or any securities exchange and
(ii) our confirmation that the information given or deemed given in response to
the Master Underwriters' Questionnaire attached as Exhibit C is correct. We will
notify you immediately whenever such information becomes inaccurate or
incomplete during an Offering.

3.   Offering Documents

Registered Offerings. For an Offering of Securities registered under the
Securities Act ("Registered Offering"), you will provide the file number(s) of
the Registration Statement (as defined below) filed with the Commission or, to
the extent made

                                       2

<PAGE>

available by the Company, send us or make available for our review in your
office a copy of such Registration Statement except for any exhibits and
documents incorporated therein by reference. As soon as practicable after
sufficient quantities of the final prospectus (excluding documents incorporated
by reference therein) are made available to you by the Company to be used in
connection with the Offering of the Securities, you will furnish to us
sufficient copies thereof or arrange to have such copies furnished to us. We
understand that we are not authorized to give any information or make any
representation not contained in the Prospectus (including documents incorporated
by reference therein), as amended or supplemented, in connection with the
Offering.

Our Final Acceptance will constitute (i) our acknowledgment that we are familiar
with such Registration Statement, as amended to the date of the Offering,
including any exhibits or documents incorporated therein by reference (the
"Registration Statement"), and with any preliminary prospectus, final
prospectus, or prospectus supplement filed with the Commission (collectively,
the "Prospectus") and the forms of Underwriting Agreement and indenture or other
document describing the terms of the Securities filed as exhibits thereto or
otherwise made available to us, (ii) our representation that the information
relating to us in such Registration Statement and Prospectus is correct and not
misleading, (iii) our consent to be named as an Underwriter therein, and (iv)
our representation that we will furnish a Prospectus to each person to whom we
sell Securities or to whom we furnished a previous Prospectus as required by
applicable regulation or as requested by you. We will maintain accurate records
of our distribution of the Registration Statement and the Prospectus.

Where specified in the Terms Communication, we will not without your consent
sell any of the Securities to an account over which we have investment
discretion.

Offerings Pursuant to Offering Circular. For other than a Registered Offering,
you will provide or make available to us for our review in your office, to the
extent made available by the Company, copies of any preliminary and final
offering circulars or other offering materials and any amendments thereto (the
"Offering Circular"). As soon as practicable after sufficient quantities of the
final offering circular (excluding documents incorporated by reference therein)
are made available to you by the Company to be used in connection with the
Offering of the Securities, you will furnish to us sufficient copies thereof or
arrange to have such copies furnished to us. We understand that we are not
authorized to give any information or make any representation not contained in
the Offering Circular (including documents incorporated by reference therein),
as amended or supplemented, in connection with the Offering.

                                       3

<PAGE>

Our Final Acceptance will also constitute (i) our acknowledgment that we are
familiar with the Offering Circular, and the forms of Underwriting Agreement and
indenture or other document describing the terms of the Securities made
available to us (ii) our representation that the information relating to us in
the Offering Circular is correct and not misleading, (iii) our consent to being
named as an Underwriter therein, and (iv) our representation that we will
furnish an Offering Circular to each person to whom we sell Securities or to
whom we furnish a previous Offering Circular as required by any regulation or as
requested by you. We will maintain accurate records of our distribution of the
Offering Circular.

4.   Manager's Authority

We authorize you, acting as Manager, to (i) negotiate, execute and deliver the
Underwriting Agreement, (ii) exercise all authority and discretion granted by
the Underwriting Agreement and take all action you deem desirable in connection
with this Agreement and the Underwriting Agreement including, but not limited
to, waiving performance or satisfaction by the Company, any selling security
holder or any other party to the Underwriting Agreement of its or their
obligations or conditions included in the Underwriting Agreement or the Terms
Communication (including this Agreement), if in your judgment such waiver will
not have a material adverse effect upon the interests of the Underwriters and
exercising any right of cancellation or termination, (iii) modify, vary or waive
any provision in the Underwriting Agreement except the amount of Our Securities
or the purchase price (except you may determine the price by Formula Pricing
where applicable), (iv) determine the timing and the terms of the Offering
(including varying the offering terms and the concessions and discounts to
dealers), (v) exercise any option relating to the purchase of Option Securities,
and (vi) take all action you deem desirable in connection with the Offering and
the purchase, carrying, sale and distribution of the Securities. If there are
other Managers with respect to an Offering, you may take any action hereunder
alone on behalf of the Managers, and our representations, agreements and
authorizations given herein shall also be for the benefit of such other Manager
to whom you may grant any of your authority to act hereunder.

You may arrange for the purchase by others, who may include your or other
Underwriters, of any Securities not taken up by an Underwriter in respect of its
obligations hereunder who defaults under this Agreement and/or the Underwriting
Agreement. We will assume our proportionate share of all defaulted obligations
not assumed by others and any Securities so assumed shall be included in Our
Securities. However, nothing in this paragraph will affect our liability or
obligations in the event of a default by us or any other Underwriter(s).

                                       4

<PAGE>

You may advertise the Offering as you determine and determine all matters
relating to communications with dealers or others. We will not advertise the
Offering without your consent, and we assume all expense and risk with respect
to any advertising by us.

Notwithstanding any information you furnish as to jurisdictions where you
believe the Securities may be sold, you have no obligation for qualification of
the Securities for sale under the laws of any jurisdiction. You may file a New
York Further State Notice. You have no liability to us except for your own lack
of good faith in meeting obligations expressly assumed by you hereunder.

5.   Management Fee

We will pay and authorize you to charge our account with our share of the
Management Fee set forth in the Terms Communication and calculated without
deduction in respect of any Delayed Delivery Securities. Such compensation may
be divided among the Managers as you decide.

6.   Offering

We will comply with any applicable requirement of the Securities Act, the
Exchange Act and any other applicable Federal or state statute and the rules and
regulations thereunder. We will make no sales of Securities until you release us
to do so. Any Securities released to us for public offering will be promptly
offered in conformity with the Prospectus or Offering Circular and we will not
allow any discount except as permitted by this Agreement. If we offer Securities
outside the United States, its territories or possessions, we will take all
action necessary to comply with all applicable laws at our own expense and risk.
You may reserve for sale, sell and deliver for our account any of Our Securities
(i) to customers, (ii) to dealers (including Underwriters) who are members of
the NASD and agree to comply with the terms of Section 16 below and (iii) to
foreign dealers or other institutions (including Underwriters) not eligible for
NASD membership who agree to comply with the terms of Section 16 below. Sales of
Securities to customers for the account of Underwriters will be as nearly as
practicable in proportion to their respective Initial Commitments, and sales of
Securities to dealers for the account of Underwriters will be as nearly as
practicable in proportion to each Underwriter's pro rata share of Securities
reserved for such sales. You will advise us of the amount of Our Securities
which we will retain for direct sale. Any Securities reserved by you for sale
for our account but not sold may be released by you to us for direct sale, in
which event the amount of Securities so reserved shall be correspondingly
reduced. We will obtain an

                                       5

<PAGE>

agreement containing the representations in Section 16 below from dealers to
whom we sell Securities.

In connection with any Offering of Securities that are registered under the Act
and issued by a company that was not, immediately prior to the filing of the
Registration Statement, subject to the requirements of Section 13(a) or 15(d) of
the Exchange Act, we agree that unless otherwise advised by you and disclosed in
the Prospectus we will not make sales to any account over which we exercise
discretionary authority with respect to that sale (discretionary accounts). We
will advise you on request of the unsold amount of Our Securities. You may at
any time (i) reserve such Securities for sale by you for our account, (ii)
purchase any such Securities to make deliveries for the Underwriters (at the
public offering price or at such price less all or part of the concession) or
(iii) reserve such Securities for sale by the Company pursuant to Delayed
Delivery Contracts. If the total of the unsold Securities does not exceed 15% of
all Securities, you may sell the unsold Securities for the Underwriters as you
determine.

If prior to the termination of this Agreement with respect to the offering of
the Securities, you shall purchase or contract to purchase any of Our Securities
sold or loaned directly by us, in your discretion you may (i) sell for our
account the Securities so purchased and debit or credit our account for the loss
or profit resulting from such sale, (ii) charge our account with an amount not
in excess of the concession to dealers with respect thereto and credit such
amount against the cost thereof or (iii) require us to purchase such Securities
at a price equal to the total cost of such purchase, including commissions,
accrued interest, amortization of original issue discount or dividends and
transfer taxes on redelivery.

7.   Arrangements for Delayed Delivery

Arrangements for Delayed Delivery Securities will be made only through you
directly, or through dealers (which may be Underwriters) to whom you may pay a
commission. Our Initial Commitment will be reduced by the Delayed Delivery
Securities attributed to us. Delayed Delivery Securities will be attributed in
the same manner and proportions as provided in Section 6 above.

The fee payable to us will be credited to our account based on the amount by
which our Initial Commitment is reduced in accordance with the above paragraph,
less the commission paid on Delayed Delivery Securities that are sold through
dealers and attributed to us. We will be treated as only a dealer and receive
only the concession

                                       6

<PAGE>

with respect to the Securities, if any, by which the aggregate of the Delayed
Delivery Securities attributable to us exceeds our Initial Commitment.

8.   Stabilization and Over-Allotment

During an Offering, and longer if necessary to cover any short position, you may
buy and sell for either long or short account in the open market or otherwise
(i) the Securities, (ii) if the Securities are common stock or a security
convertible into or exchangeable or exercisable for common stock (including any
option on common stock), the common stock of the Company and any security
convertible into or exchangeable or exercisable for common stock including any
option on such common stock (referred to as "Equivalent Securities"), and (iii)
any other securities that you may designate in the Terms Communication. In
arranging for sales of Securities, you may also over-allot and cover such
over-allotment on such terms as you deem advisable. At no time (except for
over-allotments which may be covered by an over-allotment option and except as a
result of a default by an Underwriter) shall our net commitment pursuant to this
Section exceed 20% of our Initial Commitment. All transactions pursuant to this
Section shall be made for the respective accounts of the Underwriters as nearly
as practicable in proportion to their Initial Commitments. Any securities
purchased by you for stabilizing purposes prior to our Final Acceptance will
also be subject to this Section. On demand, we will (x) pay for any Securities
purchased, deliver any Securities sold or over-allotted, or pay any losses or
expenses incurred for our account pursuant to this Section and (y) advise you of
the Securities retained by us and unsold and will sell to you for the account of
one or more of the Underwriters such of our unsold Securities at such price, not
less than the net price to selected dealers nor more than the public offering
price, as you determine.

You will notify us promptly of any transaction which in your judgment may be a
"stabilizing purchase" within the meaning of the applicable rules of the
Commission and will also notify us of the date and time when any such
stabilizing was terminated. If stabilization is effected we will provide you not
later than the fifth full business day following the termination of
stabilization, with such information and reports as are required in relation to
such stabilization pursuant to the rules and regulations of the Commission under
the Exchange Act.

9.   Open Market Transactions

Until notified by you to the contrary, we will not buy, sell, deal or trade in
Securities, any Equivalent Securities, or any other securities designated in the
Terms Communication. However, such restrictions will not apply to unsolicited
brokerage orders

                                       7

<PAGE>

received in the ordinary course of business. We may, with your prior consent,
make purchases of the Securities from and sales to other Underwriters at the
public offering price, less all or any part of the concession to dealers. We
will also comply with the provisions of Regulation M under the Exchange Act if
applicable to us.

10.   Payment, Delivery and Settlement

In payment for the Securities we are obligated to purchase, we will deliver a
federal funds wire transfer to your order in accordance with your instructions
as to time and place of delivery and amount of funds. As our agent you may pay
the Company and any Seller the amount due against delivery of the Securities.
Unless we promptly provide contrary instructions, transactions may be settled
through The Depository Trust Company if we or our correspondent is a member. If
you do not receive our payment as instructed, you may make payment for our
account without relieving us of our obligations under this Agreement and, we
will repay promptly on demand the amount advanced plus interest at current
rates.

You may deliver to us from time to time against payment, for carrying purposes
only, the unsold amount of Our Securities except that if the aggregate amount of
reserved but unsold Securities upon termination in accordance with the second
paragraph of Section 13 below does not exceed 10% of the total amount of
Securities, you may in your discretion sell such Securities for the accounts of
the Underwriters, at such prices and in such manner as you determine. On demand,
we will redeliver against payment any Securities so delivered.

As soon as practicable after any Offering, the net credit or debit balance in
our account shall be paid to or collected from us; provided, however, that you
may reserve any amount for possible additional expenses chargeable to the
Underwriters. No statement by you regarding a balance in our account or the
establishment of any reserve shall constitute a representation as to the
existence or nonexistence of amounts chargeable to us. Notwithstanding any
distribution to us, we will remain liable for and pay on demand (i) any transfer
taxes paid after settlement of our account, and (ii) our proportionate share
based on our Initial Commitment of all expenses and liability incurred for the
Underwriters, including any liability based on the claim that the Underwriters
constitute an association, unincorporated business, partnership or any separate
entity. You may at any time make partial distribution of credit balances or
require partial payment of debit balances.

11.   Authority to Borrow

                                       8

<PAGE>

In carrying out this Agreement, you may arrange loans from yourself or others
for our account. In connection with any such loan, you may hold or pledge the
Securities or any other securities and execute and deliver any notes, agreements
or other instruments you deem appropriate. Any lender is authorized to accept
your instructions as Manager in all matters relating to such loans. Any
Securities or such other securities held by you for our account may be delivered
to us for carrying purposes, and if so delivered will be redelivered to you upon
demand.

12.   Expenses

All expenses incurred by you in connection with an Offering and with this
Agreement are to be charged to the Underwriters' accounts in proportion to their
respective Initial Commitments except that any transfer taxes on sales made by
you to dealers are to be charged to the Underwriter for whose account such sales
were made. Any of our funds may be held with your general funds without
interest. Your determination, apportionment and distribution of profits, losses
and expenses will be final and conclusive.

13.   Termination

This Agreement may be terminated by either party on five business days' prior
written notice except that our notice is not effective as to any Offering where
such notice is received by you after our Final Acceptance. Further, the third
paragraph of Section 10 and Sections 12, 14, 15, and 17 and your representations
hereunder will in all circumstances survive as to all Offerings.

Except as otherwise provided in the foregoing paragraph, with respect to any
Offering this Agreement will terminate at the close of business on the thirtieth
day after the Securities are released for public sale, unless you either
terminate this Agreement earlier or extend it for up to thirty additional days.

This Agreement will continue in full force and effect regardless of (i) any
termination of any Underwriting Agreement, (ii) any investigation relating to
any Securities or any Offering and (iii) the delivery of and payment for any
Securities. No termination pursuant to this Section will affect your authority
or our obligations under Sections 8 and 10. No termination will relieve any
defaulting Underwriter.

14.   Underwriters' Status

                                        9

<PAGE>

Nothing herein is to constitute any of the Underwriters a partnership,
association, unincorporated business or other separate entity or is to render
you or us liable (except as provided herein or in the Underwriting Agreement)
for any obligation of any other Underwriters; and the obligations and
liabilities of each of the Underwriters are several and not joint. In no event
will the Underwriters elect to be treated as a partnership for Federal income
tax purposes, and will not take any position inconsistent with this sentence. If
for Federal income tax purposes the Underwriters should be deemed to constitute
a partnership, then each Underwriter elects to be excluded from the application
of Subchapter K, Chapter 1, Subtitle A of the Internal Revenue Code and
authorizes UBS Warburg LLC, in its discretion, on behalf of such Underwriter, to
execute such evidence of such election as may be required by the Internal
Revenue Services.

15.   Default by Underwriters

Default by one or more Underwriters hereunder or under the Underwriting
Agreement will not release the other Underwriters from their respective
obligations or affect the liability of any defaulting Underwriters to the other
Underwriters for damages resulting from such default.

16.   Indemnity and Contribution

We will indemnify, hold harmless and reimburse you and each other Underwriter
(and your respective controlling persons within the meaning of the Securities
Act or the Exchange Act) and the successors and assigns of all of the foregoing
persons to the extent and on the terms that each Underwriter agrees to indemnify
any person in the Underwriting Agreement.

If any inquiry or investigation is initiated or if any claim is asserted against
you as Manager or otherwise involves the Underwriters generally, or relates to
any Prospectus, Registration Statement, Offering Circular, the offering of the
Securities, or any transaction contemplated by this Agreement or any
Underwriting Agreement, you may make such investigation, retain such counsel and
take any other action you deem desirable, including settlement of any claim if
recommended by counsel retained by you. Upon your request, we will pay our
proportionate share of all expenses incurred by you or with your consent
(including, but not limited to, fees and disbursements of counsel) in
investigating and defending against such inquiry, investigation, claim or
otherwise, and, as contributions, our proportionate share of any related
liability incurred whether such liability results from a judgment, settlement or
otherwise. A claim against or liability incurred by a person who controls an
Underwriter within the

                                       10

<PAGE>

meaning of the Securities Act or Exchange Act shall be deemed incurred by such
Underwriter. You may consent to being named as the representative of a defendant
class of Underwriters. If any Underwriter or Underwriters default in their
obligation to make any payments under Section 15, each nondefaulting Underwriter
shall be obligated to pay its proportionate share of all defaulted payments,
based upon such Underwriter's underwriting obligation as related to the
underwriting obligations of all nondefaulting Underwriters, without relieving
the defaulting Underwriter or Underwriters of liability therefor. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.

17.   NASD

We understand that you are a member in good standing of the NASD. We represent
that (i) we are a member in good standing of the NASD and will comply with all
applicable rules of the NASD, including the NASD's Interpretation with respect
to Free Riding and Withholding and Rule 2740 of the Conduct Rules, or (ii) we
are a foreign bank, broker, dealer or other institutions not eligible for such
membership and will not make sales within the United States, its territories or
possessions or to persons who are citizens or residents thereof except through
you (except that we may participate in group sales pursuant to Section 6 above)
and that in making sales outside the United States, we will comply with the
requirements of the NASD's Interpretation with respect to Free Riding and
Withholding and comply as though a member with Rules 2420, 2730, 2740 and 2750
of the Conduct Rules of the NASD.

18.   Miscellaneous

This Agreement and any claim, counterclaim or dispute of any kind or nature
whatsoever arising out of or in any way relating to this Agreement ("Claim"),
directly or indirectly, shall be governed by, and construed in accordance with,
the laws of the State of New York without regard to the conflicts of law
provisions thereof. Except as set forth below, no Claim may be commenced,
prosecuted or continued in any court other than the courts of the State of New
York located in the City and County of New York or in the United States District
Court for the Southern District of New York, which courts shall have
jurisdiction over the adjudication of such matters, and we and you consent to
the jurisdiction of such courts and personal service with respect thereto. We
and you waive all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. We agree that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and

                                       11

<PAGE>

binding upon us and may be enforced in any other courts to the jurisdiction of
which we are, or may be subject, by suit upon such judgment. The Section
headings in this Agreement have been inserted as a matter of convenience of
reference and are not a part of this Agreement. This Agreement may be
supplemented or amended by you by written notice to us and, except for
supplements or amendments set forth in a Terms Communication, any such
supplement or amendment to this Agreement shall be effective with respect to any
Offering to which this Agreement applies after the date of such supplement or
amendment. Each reference to "Agreement" herein shall, as appropriate, be to
this Agreement as so amended and supplemented. This Agreement may be signed by
the parties in one or more counterparts which together shall constitute one and
the same agreement among the parties.

19.   Notices

Any notice hereunder is duly given if sent from you by registered mail, telegram
or telex, to us as set forth below or if sent to you at UBS Warburg LLC, 299
Park Avenue, New York, New York 10171-0026, Attention: Corporate Syndicate
Department.

Very truly yours,

__________________________________
(Name of Firm)

__________________________________
(Address of Firm)

__________________________________
(Name and Title of Signatory)


By:_______________________________


(Signature)


Facsimile No.:____________


Confirmed as of the date first above written.

UBS Warburg LLC

                                       12

<PAGE>

By: ______________________________

Executive Director

By: ______________________________

Managing Director

                                       13

<PAGE>

UBS Warburg LLC

FORM OF INVITATION TO BE USED WITH MASTER AGREEMENT AMONG UNDERWRITERS

(The following form of Invitation, adapted as appropriate for debt securities,
convertible securities, stock or units, is designed for use in all offerings to
which UBS Warburg LLC Master Agreement Among Underwriters (the "Master AAU")
will apply. In certain cases, all or a part of the following form will be
combined with the form of Terms Wire.)

(Date)

(Name and address of prospective Underwriter)

Attention:     Corporate Syndicate Department

               Invitation Wire

(Name of Issuer)

(Title of Securities) (principal amount or number shares)

(Name of Guarantor, if any)

Registration form or application filed with (name of regulatory authority)

Seller(s): (Insert if other than or in addition to Company)

The anticipated terms are as follows:

- --------------------------------------------------------------------------------

Call Protection:                    (insert if applicable)
Sinking Fund:                       (insert if applicable) Starts in     and
                                    retires $     per annum through
Optional Redemption Schedule:       Redeemable at   %, beginning      declining
                                    (straight-line) to 100%, beginning
Over-allotment Option:              (insert amount, if applicable)
Ratings:                            (expected-confirmed)

                                       14

<PAGE>


Listing:                        (insert if applicable) Application has been made
                                to list (insert name(s) of exchange(s))
Delayed Delivery:               (insert if applicable)
Name of Trustee:                (insert if applicable)
Name of Parent of Trustee:      (insert if applicable)
Name of Parent of Company: (insert if applicable)
Equivalent Securities and other securities subject
to stabilization pursuant to Section 8 of Master
AAU and restricted pursuant to Section 9 of Master
AAU:
                                (insert if applicable)

Other terms of the Offering or the Securities: (insert if applicable)

[The issuer is not subject to the requirements of Section 13(a) or 15(d) of the
Securities Exchange Act of 1934. We call your attention to the final paragraph
of Section 3(a) of our Master Agreement Among Underwriters and advise you that,
without our consent, Securities should not be sold to an account over which you
have investment discretion.] (insert if applicable)

You are hereby invited to participate as one of the several Underwriters in the
above-referenced Offering for (amount). Your participation as an Underwriter
shall be subject to the provisions of the Master Agreement Among Underwriters
between you and UBS Warburg LLC, as amended.

If you wish to accept this Invitation and thereby agree to its terms, the
Corporate Syndicate Department of UBS Warburg LLC : must receive a telegram,
telex or Graphic Scanning communication from you not later than _____________
M., New York City time, on ____________, ___, in substantially the following
form:

"We accept the Invitation dated _____________, ____, to participate as an
Underwriter in the Offering of Securities of (insert name of issuer). We confirm
that we agree to be bound by the Master Agreement Among Underwriters as it
relates to this Offering and that there are no exceptions to your Master
Underwriters' Questionnaire (or state exceptions)."

(Signature of firm)

UBS Warburg LLC

                                       15

<PAGE>


[Name of Co-Manager(s), if any]

By: UBS Warburg LLC

                                       16

<PAGE>

UBS Warburg LLC

FORM OF TERMS WIRE TO BE USED WITH UBS WARBURG LLC MASTER AGREEMENT AMONG
UNDERWRITERS

(The following form, adapted as appropriate for debt securities, convertible
securities, stock or units, will be used in connection with offerings to which
the UBS Warburg LLC Master Agreement Among Underwriters will apply. In certain
cases all or part of the following form will be combined with the form of
Invitation.)

(Date)

(Name and address of prospective Underwriter)

Attention:        Corporate Syndicate Department
                  Terms Wire

(Name of Issuer)

(Title of Securities) (principal amount or number of shares)

(Name of Guarantor, if any)

Your underwriting commitment shall be ____________________

Coupon [dividend rate]                (insert if applicable)
Initial offering price[s] (1)         (or specify formula pricing is being used)
Yield to Maturity:
Conversion price and other terms:     (insert if applicable)
Expected Offering Date:
Expected Closing Date:
Delivery of Securities:
Type of Funds:
Gross spread:                         (unless formula pricing is being used)
Management fee:                       (or maximum amount thereof)
Underwriting:                         (unless formula pricing is being used)
Selling concession:                   (unless formula pricing is being used)
Reallowance:                          (unless formula pricing is being used)
Other terms of the Offering or the
Securities:                           (insert if applicable)

                                       17

<PAGE>


NOTE: Plus accrued interest/dividends from (insert date for fixed income
securities).

Unless a telex from you revoking your previous Acceptance of our Invitation with
respect to this offering is received by the UBS Warburg LLC Corporate Syndicate
Department, prior to New York City time on ___________, your Acceptance will
become final and our Master Agreement Among Underwriters will become effective
as to you with respect to this Offering.

UBS Warburg LLC

[Name of Co-Manager(s), if any]

By: UBS Warburg LLC

                                       18

<PAGE>

UBS Warburg LLC

MASTER UNDERWRITERS' QUESTIONNAIRE

Unless otherwise defined herein, capitalized terms used herein shall have the
meaning assigned thereto in the Master Agreement Among Underwriters between UBS
Warburg LLC and us (such agreement as amended or supplemented from time to time
being hereinafter referred to as the "Agreement"). Reference will be made to
this Master Underwriters' Questionnaire in the Terms Communication described in
Section 1 of the Agreement received by us in connection with the offerings of
securities in which UBS Warburg LLC is acting as manager of the several
underwriters. Our acceptance of any Terms Communication should respond to this
Master Underwriters' Questionnaire, and state that there are "no exceptions" or,
if there are exceptions, provide details thereof. We authorize you to furnish
such information and make such representations to appropriate authorities based
on the information provided by us pursuant to this Questionnaire.

In connection with the Offering, we advise you and the Company that, except as
indicated in our acceptance of the Terms Communication:

neither we nor any of our directors, officers or partners has, nor have we or
they had within the last three years, a "material" relationship (as the term
"material" is defined in Regulation C promulgated under the Securities Act) with
the Company, its parent, if any, any Seller or Guarantor;

neither we nor any of our officers, directors or partners, separately or as a
"group" (as that term is used in Section 13(d)(3) of the Exchange Act), owns of
record or beneficially (determined in accordance with Rule 13d-3 under the
Exchange Act) more than 5% of any class of voting securities of the Company, its
parent or any Seller or Guarantor or is affiliated (as that term is defined in
the Rules and Regulations under the Exchange Act) with any person who owns of
record or beneficially more than 5% of any such class of securities or has
knowledge that more than 5% of any such class is or is to be held subject to any
voting trust or similar arrangement;

other than as may be stated in the Agreement, the Terms Communication or the
Underwriting Agreement relating to the proposed offering or the UBS Warburg LLC
Master Dealer Agreement, we do not know of, or have any reason to believe that
there are, any arrangements (i) for any discounts or commissions to be allowed
or paid to underwriters or any other items that would be deemed by the NASD to
constitute underwriting compensation for purposes of Rule 2710 of the NASD's

                                       19

<PAGE>

Conduct Rules; (ii) for any discounts or commissions to be allowed or paid to
dealers or any cash, securities, contracts or other consideration to be received
by any dealer in connection with the sale of the Securities; (iii) for limiting
or restricting the sale of any securities of the Company or the Guarantor for
the period of distribution; (iv) for stabilizing the market for any securities
of the Company or the Guarantor; or (v) for withholding commissions or otherwise
holding each underwriter or dealer responsible for the distribution of his
participation;

neither we nor any of our directors, officers, partners or "persons associated
with" us (as defined in the By-laws of the NASD) within the last 12 months have
purchased (or intends within six months after the commencement of the offering
of the Securities to purchase) in private transactions any securities of the
Company or the Guarantor or any parent or subsidiary thereof or have had any
dealings with the Company or the Guarantor or any parent or controlling
stockholder thereof (other than relating to the proposed Underwriting
Agreement), as to which documents or information are required to be filed with
the NASD pursuant to its Conduct Rules;

no report or memorandum has been prepared by or for us for external use in
connection with the Offering, and if the Registration Statement is on Form S-1,
no engineering, management or similar report or memorandum relating to broad
aspects of the business, operations or products of the Company, the Guarantor or
any parent thereof has been prepared for or by you within the past twelve months
(except for reports solely comprised of recommendations to buy, sell or hold the
securities of the Company, the Guarantor or any parent thereof, unless such
recommendations have changed within the last six months)/1/

if the Securities are to be issued under an Indenture qualified under the Trust
Indenture Act of 1939:

we (if a corporation) do not have outstanding nor have we assumed or guaranteed
any securities issued otherwise than in our present corporate name and neither
the Trustee nor its parent is a holder of any of our securities;

neither we nor any of our directors, officers or partners is an "affiliate," as
defined in Rule 0-2 under the Trust Indenture Act of 1939, of the Trustee or its
parent, and neither the Trustee nor its parent, nor any of their directors or
executive officers is a director, officer, partner, employee, appointee or
representative of us as those terms are defined in said Act or in the relevant
instructions to the Trustee's Statement of Eligibility and Qualification on Form
T-1; and

____________

                                       20

<PAGE>

/1/  In the event of an exception to the type of materials referred to, three
     complies of each item of such material, together with a statement
     describing the actual or proposed use, the distribution thereof, and
     identifying the classes of recipients, the number of copies of such
     materials distributed to each such class and the period of distribution
     must be sent to UBS Warburg LLC, 299 Park Avenue, New York, New York
     10171-0026, Attention: Corporate Syndicate Department.

neither we nor any of our directors, executive officers, partners or parents,
separately or as a group, owns beneficially 1% or more of any class of voting
securities of the Trustee or its parent; and

if the issuer is a public utility, we are not a "holding company" or a
"subsidiary company" or an "affiliate" of a "holding company" or of a "public
utility company," each as defined in the Public Utility Holding Company Act of
1935.

                                       21

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(H)(4)
<SEQUENCE>12
<FILENAME>dex99h4.txt
<DESCRIPTION>FORM OF ADDITIONAL COMPENSATION AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit h.4

                        ADDITIONAL COMPENSATION AGREEMENT

                                                                     June , 2002

Qualifying Underwriters
 Listed on Schedule B hereto

Ladies and Gentlemen:

     Reference is made to each Underwriting Agreement dated the date hereof
(each, an "Underwriting Agreement"), by and among each respective closed-end
management investment company listed on Schedule A hereto (each a "Trust" and
collectively, the "Trusts"), PIMCO Funds Advisors LLC (the "Manager") and each
of the respective Underwriters named therein, with respect to the issue and sale
of each Trust's common shares of beneficial interest, par value $0.0001 per
share (the "Common Shares"), as described therein. Reference is also made to
(i) the Investment Management Agreements (the "Investment Management
Agreements") to be entered into between the Manager and each Trust and (ii) the
registration statements on Form N-2 regarding the Common Shares of each Trust
(the "Registration Statements"). Capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the respective Underwriting
Agreements.

     UBS Warburg LLC ("UBS Warburg") hereby confirms its agreement with each
Qualifying Underwriter (as defined in Section 1 hereof) with respect to the
additional compensation referred to in the "Underwriting" section of the
Registration Statements, payable by UBS Warburg to each of the Qualifying
Underwriters. UBS Warburg agrees to pay to each Qualifying Underwriter
additional compensation (collectively, the "Additional Compensation") as
provided for in Section 3 hereof, provided, however, that such Additional
Compensation shall not exceed an amount equal to 0.10% per annum of the
aggregate average daily net asset values of the Funds (including assets
attributable to any preferred shares of the Funds that may be outstanding)
multiplied by the aggregate Pro Rata Percentages (as defined in Section 2
hereof) applicable to the Qualifying Underwriters (as defined in Section 1); and
provided, further, that such payments shall not, in the aggregate, exceed the
"Maximum Additional Compensation Amount" (as defined in Section 4 hereof). The
Additional Compensation shall be payable as set forth in Section 3 hereof.

     SECTION 1. Qualifying Underwriters. For the purposes of this Additional
Compensation Agreement, each Underwriter which sells Common Shares of the Trusts
with an aggregate purchase price to the public of at least $50,000,000 (which
amount shall equal the aggregate purchase price to the public of any Firm Shares
and Option Shares sold by such Underwriter, as determined in the sole discretion
of UBS Warburg and set forth in Schedule B hereto) shall be a "Qualifying
Underwriter"; provided, however, that UBS Warburg shall not be included in the
term "Qualifying Underwriter." UBS Warburg may, in its sole and absolute
discretion, waive such $50,000,000 sales requirement with respect to any
Underwriter and determine such Underwriter to be a Qualifying Underwriter

<PAGE>

                                                                               2


     SECTION 2. Pro Rata Percentage. Each Qualifying Underwriter shall be
assigned a "Pro Rata Percentage," the numerator of which shall be the aggregate
purchase price to the public of the Common Shares sold by such Underwriter as
set forth on Schedule B hereto and the denominator of which shall equal the
aggregate purchase price to the public of all of the Common Shares purchased by
the Underwriters pursuant to the Underwriting Agreements.

     SECTION 3. Payment of Additional Compensation.

     (a) UBS Warburg shall pay the Additional Compensation, quarterly in
arrears, to each Qualifying Underwriter in an amount equal to the product of
such Underwriter's Pro Rata Percentage multiplied by 0.025% of the Trusts'
aggregate average daily net asset values (including assets attributable to any
preferred shares of the Trusts that may be outstanding) for such quarter. For
the purposes of determining amounts due to each Qualifying Underwriter, the
average daily net asset value for each Trust shall be the average net asset
value as calculated by the Manager for the applicable quarter. Nothing herein
shall in any way obligate UBS Warburg to calculate the average daily net asset
values of the Funds for any quarter and UBS Warburg shall be entitled to rely
exclusively on the Manager's calculations. No Qualifying Underwriter shall have
the right to challenge the calculation of the average daily net asset values of
the Funds nor shall any Qualifying Underwriter have the right to obligate UBS
Warburg to calculate the average daily net asset values for the Funds.

     (b) All fees payable hereunder shall be paid by wire transfer of
immediately available funds within 15 days following the end of each calendar
quarter to a bank account designated by the payee.

     (c) The initial payments of Additional Compensation hereunder shall be with
respect to the calendar quarter ending [September 30], 2002. In the event that
this Additional Compensation Agreement terminates prior to the end of a calendar
quarter, the Additional Compensation required to be paid hereunder shall be due
and payable within 15 days following the termination hereof and shall be
pro-rated in respect of the period prior to such termination. Notwithstanding
the foregoing, if any payment hereunder would otherwise fall on a day which is
not a business day, it shall be due on the next day which is a business day.

     SECTION 4. Maximum Additional Compensation Amount. The "Maximum Additional
Compensation Amount" payable by UBS Warburg hereunder shall be, with respect to
each Qualifying Underwriter, such amount as, when taken together with the amount
of all underwriting compensation other than the Additional Compensation received
by such Underwriter in connection with the offerings of the Common Shares of the
Trusts, equals the maximum compensation allowed under the conduct rules of the
National Association of Securities Dealers, Inc., as such rules are then in
effect.

     SECTION 5. Term. This Additional Compensation Agreement shall continue
coterminously with and so long as the Investment Management Agreement, dated
June 2002, remains in effect between the Fund and PIMCO Funds Advisors or any
successor in interest or affiliate of PIMCO Funds Advisors, as, and to the
extent, that such Investment Management Agreement is renewed periodically in
accordance with the 1940 Act. This


<PAGE>


                                                                               3

Additional Compensation Agreement shall terminate on the earliest to occur of
(a) with respect to any Qualifying Underwriter, the payment by UBS Warburg to
such Qualifying Underwriter of the Maximum Additional Compensation Amount, (b)
with respect to any Trust, the dissolution and winding up of that Trust and (c)
with respect to any Trust, the date on which the Investment Management Agreement
or other advisory agreement between that Trust and the Manager or any successor
in interest to the Manager, including but not limited to an affiliate of the
Manager.

     SECTION 6. Not Exclusive. Nothing herein shall be construed as prohibiting
any Underwriter or its respective affiliates from acting as such for any other
clients (including other registered investment companies or other investment
managers).

     SECTION 7. Assignment. This Additional Compensation Agreement may not be
assigned by any party without the prior written consent of each other party.

     SECTION 8. Amendment; Waiver. No provision of this Additional Compensation
Agreement may be amended or waived except by an instrument in writing signed by
the parties hereto.

     SECTION 9. Governing Law. This Additional Compensation Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.

     SECTION 10. Counterparts. This Additional Compensation Agreement may be
executed in any number of counterparts, each of which shall be an original, and
all of which, when taken together, shall constitute one agreement. Delivery of
an executed signature page of this Additional Compensation Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.

     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 UBS Warburg
and the Qualifying Underwriters in accordance with its terms.

                                            Very truly yours,

                                            UBS WARBURG LLC


                                            By:
                                                --------------------------------
                                                Name:  Oscar Junquera
                                                Title:  Managing Director

<PAGE>

CONFIRMED AND ACCEPTED,
as of the date first above written:


MERRILL LYNCH, PIERCE, FENNER
  & SMITH INCORPORATED

By:
    --------------------------------------------
    Name:
    Title:

[List of other Qualifying Underwriters to come]

<PAGE>

                                   SCHEDULE A


Name of Trust
- -------------

PIMCO Municipal Income Fund II

PIMCO California Municipal Income Fund II

PIMCO New York Municipal Income Fund II

<PAGE>

                                   SCHEDULE B

                                            Aggregate
                                    Purchase Price to Public           Pro Rata
Name of Qualifying Underwriter       of Common Shares Sold            Percentage
- ------------------------------       ---------------------            ----------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(J)
<SEQUENCE>13
<FILENAME>dex99j.txt
<DESCRIPTION>FORM OF CUSTODIAN AGREEMENT
<TEXT>
<PAGE>
                                                                      Exhibit j.

                               Custodian Agreement

         This Agreement between PIMCO New York Municipal Income Fund II, a
business trust organized and existing under the laws of Massachusetts (the
"Fund"), and STATE STREET BANK and TRUST COMPANY, a Massachusetts trust company
(the "Custodian"),

         Witnesseth: that in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:

Section 1.    Employment of Custodian and Property to be Held by It

The Fund hereby employs the Custodian as the custodian of its assets consisting
of securities that the Fund desires to be held in places within the United
States ("domestic securities"). The Fund agrees to deliver to the Custodian all
securities and cash owned by it, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by it from time to time, and the cash consideration received by it for
such new or treasury shares of beneficial interest of the Fund ("Shares") as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund which is not received by it or which is delivered out
in accordance with Proper Instructions (as such term is defined in Section 5
hereof) including, without limitation, Fund property (i) held by brokers,
private bankers or other entities on behalf of the Fund (each a "Local Agent"),
(ii) held by Special Sub-Custodians (as such term is defined in Section 3
hereof), (iii) held by entities which have advanced monies to or on behalf of
the Fund and which have received Fund property as security for such advance(s)
(each a "Pledgee"), or (iv) delivered or otherwise removed from the custody of
the Custodian pursuant to Special Instructions (as such term is defined in
Section 3 hereof). With respect to uncertificated shares (the "Underlying
Shares") of registered "investment companies" (as defined in Section 3(a)(1) of
the Investment Company Act of 1940, as amended (the "1940 Act")), whether in the
same "group of investment companies" (as defined in Section 12(d)(1)(G)(ii) of
the 1940 Act) or otherwise, including pursuant to Section 12(d)(1)(F) of the
1940 Act (hereinafter sometimes referred to as the "Underlying Portfolios") the
holding of confirmation statements that identify the shares as being recorded in
the Custodian's name on behalf of the Fund will be deemed custody for purposes
hereof.

Upon receipt of Proper Instructions, the Custodian shall on behalf of the Fund
from time to time employ one or more sub-custodians located in the United
States, but only in accordance with an applicable vote by the Board of Trustees
of the Fund (the "Board") and provided that the Custodian shall have no more or
less responsibility or liability to any Fund on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian.

Section 2.    Duties of the Custodian with Respect to Property of the Fund Held
              By the Custodian

         Section 2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Fund all non-cash property, to be held by it in
the United States, including all domestic securities owned by the Fund other
than (a) securities which are maintained pursuant to Section 2.8 in a clearing
agency which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury (each, a "U.S. Securities
System") and (b)

<PAGE>


Underlying Shares owned by each Fund which are maintained pursuant to Section
2.10 hereof in an account with State Street Bank and Trust Company or such other
entity which may from time to time act as a transfer agent for the Underlying
Portfolios and with respect to which the Custodian is provided with Proper
Instructions (the "Underlying Transfer Agent").

         Section 2.2 Delivery of Securities. The Custodian shall release and
deliver domestic securities owned by the Fund held by the Custodian or in a U.S.
Securities System account of the Custodian or in an account at the Underlying
Transfer Agent, only upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, and only in the
following cases:

         1)       Upon sale of such securities for the account of the Fund and
                  receipt of payment therefor;

         2)       Upon the receipt of payment in connection with any repurchase
                  agreement related to such securities entered into by the Fund;

         3)       In the case of a sale effected through a U.S. Securities
                  System, in accordance with the provisions of Section 2.8
                  hereof;

         4)       To the depository agent in connection with tender or other
                  similar offers for securities of the Fund;

         5)       To the issuer thereof or its agent when such securities are
                  called, redeemed, retired or otherwise become payable;
                  provided that, in any such case, the cash or other
                  consideration is to be delivered to the Custodian;

         6)       To the issuer thereof, or its agent, for transfer into the
                  name of the Fund or into the name of any nominee or nominees
                  of the Custodian or into the name or nominee name of any agent
                  appointed pursuant to Section 2.7 or into the name or nominee
                  name of any sub-custodian appointed pursuant to Section 1; or
                  for exchange for a different number of bonds, certificates or
                  other evidence representing the same aggregate face amount or
                  number of units; provided that, in any such case, the new
                  securities are to be delivered to the Custodian;

         7)       Upon the sale of such securities for the account of the Fund,
                  to the broker or its clearing agent, against a receipt, for
                  examination in accordance with "street delivery" custom;
                  provided that in any such case, the Custodian shall have no
                  responsibility or liability for any loss arising from the
                  delivery of such securities prior to receiving payment for
                  such securities except as may arise from the Custodian's own
                  negligence or willful misconduct;

         8)       For exchange or conversion pursuant to any plan of merger,
                  consolidation, recapitalization, reorganization or
                  readjustment of the securities of the issuer of such

                                       2

<PAGE>


                  securities, or pursuant to provisions for conversion contained
                  in such securities, or pursuant to any deposit agreement;
                  provided that, in any such case, the new securities and cash,
                  if any, are to be delivered to the Custodian;

         9)       In the case of warrants, rights or similar securities, the
                  surrender thereof in the exercise of such warrants, rights or
                  similar securities or the surrender of interim receipts or
                  temporary securities for definitive securities; provided that,
                  in any such case, the new securities and cash, if any, are to
                  be delivered to the Custodian;

         10)      For delivery in connection with any loans of securities made
                  by the Fund (a) against receipt of collateral, except that in
                  connection with any loans for which collateral is to be
                  credited to the Custodian's account in the book-entry system
                  authorized by the U.S. Department of the Treasury, the
                  Custodian will not be held liable or responsible for the
                  delivery of securities owned by the Fund prior to the receipt
                  of such collateral or (b) to the lending agent, or the lending
                  agent's custodian, in accordance with written Proper
                  Instructions (which may not provide for the receipt by the
                  Custodian of collateral therefor) agreed upon from time to
                  time by the Custodian and the Fund;

         11)      For delivery as security in connection  with any borrowing by
                  the Fund requiring a pledge of assets by the Fund, but only
                  against receipt of amounts borrowed;

         12)      For delivery in accordance with the provisions of any
                  agreement among the Fund, the Custodian and a broker-dealer
                  registered under the Securities Exchange Act of 1934 (the
                  "Exchange Act") and a member of The National Association of
                  Securities Dealers, Inc. ("NASD"), relating to compliance with
                  the rules of The Options Clearing Corporation and of any
                  registered national securities exchange, or of any similar
                  organization or organizations, regarding escrow or other
                  arrangements in connection with transactions by the Fund;

         13)      For delivery in accordance with the provisions of any
                  agreement among the Fund, the Custodian, and a futures
                  commission merchant registered under the Commodity Exchange
                  Act, relating to compliance with the rules of the Commodity
                  Futures Trading Commission ("CFTC") and/or any contract
                  market, or any similar organization or organizations,
                  regarding account deposits in connection with transactions by
                  the Fund;

          14)     Upon the sale or other delivery of such investments
                  (including, without limitation, to one or more (a) Special
                  Sub-Custodians or (b) additional custodians appointed by a
                  Fund, and communicated to the Custodian from time to time via
                  a writing duly executed by an authorized officer of such Fund,
                  for the purpose of engaging in repurchase agreement
                  transaction(s), each a "Repo Custodian"), and prior to receipt
                  of payment therefor, only as set forth in written Proper
                  Instructions (such delivery in advance of payment, along with
                  payment in advance of delivery made in accordance with Section
                  2.6(7), as applicable, shall each be referred to herein as a
                  "Free

                                       3

<PAGE>


                  Trade"), provided that such Proper Instructions shall set
                  forth (a) the securities of the Fund to be delivered and (b)
                  the person(s) to whom delivery of such securities shall be
                  made;

         15)      Upon receipt of instructions from the transfer agent for the
                  Fund (the "Transfer Agent") for delivery to such Transfer
                  Agent or to the holders of Shares in connection with
                  distributions in kind, as may be described from time to time
                  in the Fund's currently effective prospectus and statement of
                  additional information (the "Prospectus"), in satisfaction of
                  requests by holders of Shares for repurchase or redemption;
                  and

         16)      In the case of a sale processed through the Underlying
                  Transfer Agent or Underlying Shares, in accordance with
                  Section 2.10 hereof;

         17)      For any other purpose, but only upon receipt of Proper
                  Instructions specifying the securities of the Fund to be
                  delivered and naming the person or persons to whom delivery of
                  such securities shall be made.

         Section 2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Fund or in the name of any nominee of the Fund or of any nominee of the
Custodian which nominee shall be assigned exclusively to the Fund, unless the
Fund has authorized in writing the appointment of a nominee to be used in common
with other registered investment companies having the same investment advisor as
the Fund, or in the name or nominee name of any agent appointed pursuant to
Section 2.7 or in the name or nominee name of any sub-custodian appointed
pursuant to Section 1. All securities accepted by the Custodian on behalf of the
Fund under the terms of this Agreement shall be in "street name" or other good
delivery form, provided that the Custodian will hold all such assets in an
account of Custodian as custodian containing only assets of the Fund or only
assets held by the Custodian as fiduciary or custodian for its customers;
provided, further that Custodian's records will at all times indicate the Fund
or the customer for which such assets are held and their respective interest
therein. If, however, the Fund directs the Custodian to maintain securities in
"street name", the Custodian shall utilize its best efforts only to timely
collect income due the Fund on such securities and to notify the Fund on a best
efforts basis only of relevant corporate actions including, without limitation,
pendency of calls, maturities, tender or exchange offers and declaration, record
and payment dates of any dividend.

         Section 2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of the Fund,
subject only to draft or order by the Custodian acting pursuant to the terms of
this Agreement, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established and used in
accordance with Rule 17f-3 under the 1940 Act. Monies held by the Custodian for
the Fund may be deposited by it to its credit as Custodian in the banking
department of the Custodian or in such other banks or trust companies as it may
in its discretion deem necessary or desirable; provided, however, that every

                                       4

<PAGE>


such bank or trust company shall be qualified to act as a custodian under the
1940 Act and that each such bank or trust company and the monies to be deposited
with each such bank or trust company shall be approved by vote of a majority of
the Board. Such monies shall be deposited by the Custodian in its capacity as
Custodian and shall be withdrawable by the Custodian only in that capacity.

         Section 2.5 collection of Income. Except with respect to Fund property
released and delivered pursuant to Section 2.2(14) or purchased pursuant to
Section 2.6(7), and subject to the provisions of Section 2.3, the Custodian
shall collect on a timely basis all income and other payments with respect to
registered domestic securities held hereunder to which the Fund shall be
entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
bearer domestic securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and shall credit such
income, as collected, to the Fund's custodian account. Without limiting the
generality of the foregoing, the Custodian shall detach and present for payment
all coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held hereunder.
Income due the Fund on securities loaned pursuant to the provisions of Section
2.2 (10) shall be the responsibility of the Fund. The Custodian will have no
duty or responsibility in connection therewith, other than to provide the Fund
with such information or data as may be necessary to assist the Fund in
arranging for the timely delivery to the Custodian of the income to which the
Fund is properly entitled.

         Section 2.6 Payment of fund Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out monies of the Fund in the following
cases only:

         1)       Upon the purchase of domestic securities, options, futures
                  contracts or options on futures contracts for the account of
                  the Fund but only (a) against the delivery of such securities
                  or evidence of title to such options, futures contracts or
                  options on futures contracts to the Custodian (or any bank,
                  banking firm or trust company doing business in the United
                  States or abroad which is qualified under the 1940 Act to act
                  as a custodian and has been designated by the Custodian as its
                  agent for this purpose) registered in the name of the Fund or
                  in the name of a nominee of the Custodian referred to in
                  Section 2.3 hereof or in proper form for transfer; (b) in the
                  case of a purchase effected through a U.S. Securities System,
                  in accordance with the conditions set forth in Section 2.8
                  hereof; (c) in the case of repurchase agreements entered into
                  between the Fund and the Custodian, or another bank, or a
                  broker-dealer which is a member of NASD, (i) against delivery
                  of the securities either in certificate form or through an
                  entry crediting the Custodian's account at the Federal Reserve
                  Bank with such securities or (ii) against delivery of the
                  receipt evidencing purchase by the Fund of securities owned by
                  the Custodian along with written evidence of the agreement by
                  the Custodian to repurchase such securities from the Fund; or
                  (d) for transfer to a time deposit account of the Fund in any
                  bank, whether domestic or foreign; such transfer may be
                  effected prior to receipt of a confirmation from a

                                       5

<PAGE>

                  broker and/or the applicable bank pursuant to Proper
                  Instructions from the Fund as defined herein;

         2)       In connection with conversion, exchange or surrender of
                  securities owned by the Fund as set forth in Section 2.2
                  hereof;

         3)       For the redemption or repurchase of Shares issued as set forth
                  in Section 4 hereof;

         4)       For the payment of any expense or liability incurred by the
                  Fund, including but not limited to the following payments for
                  the account of the Fund: interest, taxes, management,
                  accounting, transfer agent and legal fees, and operating
                  expenses of the Fund whether or not such expenses are to be in
                  whole or part capitalized or treated as deferred expenses;

         5)       For the payment of any dividends on Shares declared pursuant
                  to the governing documents of the Fund;

         6)       For payment of the amount of dividends received in respect of
                  securities sold short;

         7)       Upon the purchase of domestic investments and prior to receipt
                  of such investments, as set forth in written Proper
                  Instructions (such payment in advance of delivery, along with
                  delivery in advance of payment made in accordance with Section
                  2.2(14), as applicable, shall each be referred to herein as a
                  "Free Trade"), provided that such Proper Instructions shall
                  also set forth (a) the amount of such payment and (b) the
                  person(s) to whom such payment is made; and

         8)       For any other  purpose, but only upon receipt of Proper
                  Instructions specifying the amount of such payment and naming
                  the person or persons to whom such payment is to be made.

Except as specifically stated otherwise in this Agreement, in any and every case
where the payment for purchase of domestic securities for the account of the
Fund is made by the Custodian in advance of receipt of the securities purchased
in the absence of specific Proper Instructions from the Fund to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by the
Custodian.

         Section 2.7 Appointment of Agents. The Custodian may at any time or
times in its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act to act as a
custodian, as its agent to carry out such of the provisions of this Section 2 as
the Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its responsibilities
or liabilities hereunder. The Underlying Transfer Agent shall not be deemed an
agent or subcustodian of the Custodian for purposes of this Section 2.7 or any
other provision of this Agreement.

                                       6

<PAGE>


         Section 2.8 Deposit of Fund Assets in U.S. Securities Systems. The
Custodian may deposit and/or maintain securities owned by the Fund in a U.S.
Securities System in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and subject to
the following provisions:

         1)       The Custodian may keep securities of the Fund in a U.S.
                  Securities System provided that such securities are
                  represented in an account of the Custodian in the U.S.
                  Securities System (the "U.S. Securities System Account") which
                  account shall not include any assets of the Custodian other
                  than assets held as a fiduciary, custodian or otherwise for
                  customers;

         2)       The records of the Custodian with respect to securities of the
                  Fund which are maintained in a U.S. Securities System shall
                  identify by book-entry those securities belonging to the Fund;

         3)       The Custodian shall pay for securities purchased for the
                  account of the Fund upon (i) receipt of advice from the U.S.
                  Securities System that such securities have been transferred
                  to the U.S. Securities System Account, and (ii) the making of
                  an entry on the records of the Custodian to reflect such
                  payment and transfer for the account of the Fund. The
                  Custodian shall transfer securities sold for the account of
                  the Fund upon (i) receipt of advice from the U.S. Securities
                  System that payment for such securities has been transferred
                  to the U.S. Securities System Account, and (ii) the making of
                  an entry on the records of the Custodian to reflect such
                  transfer and payment for the account of the Fund. Copies of
                  all advices from the U.S. Securities System of transfers of
                  securities for the account of the Fund shall identify the
                  Fund, be maintained for the Fund by the Custodian and be
                  provided to the Fund at its request. Upon request, the
                  Custodian shall furnish the Fund confirmation of each transfer
                  to or from the account of the Fund in the form of a written
                  advice or notice and shall furnish to the Fund copies of daily
                  transaction sheets reflecting each day's transactions in the
                  U.S. Securities System for the account of the Fund;

         4)       The Custodian shall provide the Fund with any report obtained
                  by the Custodian on the U.S. Securities System's accounting
                  system, internal accounting control and procedures for
                  safeguarding securities deposited in the U.S. Securities
                  System;

         5)       Anything to the contrary in this Agreement notwithstanding,
                  the Custodian shall be liable to the Fund for any loss or
                  damage to the Fund resulting from use of the U.S. Securities
                  System by reason of any negligence, misfeasance or misconduct
                  of the Custodian or any of its agents or of any of its or
                  their employees or from failure of the Custodian or any such
                  agent to enforce effectively such rights as it may have
                  against the U.S. Securities System; at the election of the
                  Fund, it shall be entitled to be subrogated to the rights of
                  the Custodian with respect to any claim against the U.S.
                  Securities System or any other person which the Custodian may
                  have as a

                                       7

<PAGE>

              consequence of any such loss or damage if and to the extent that
              the Fund has not been made whole for any such loss or damage.

         Section 2.9 Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated account or accounts for
and on behalf of the Fund, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.8 hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange (or the CFTC or any registered contract market), or
of any similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Fund, (ii) for purposes of
segregating cash or government securities in connection with options purchased,
sold or written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release No. 10666, or any
subsequent release of the U.S. Securities and Exchange Commission (the "SEC"),
or interpretative opinion of the staff of the SEC, relating to the maintenance
of segregated accounts by registered investment companies, and (iv) for any
other purpose upon receipt of Proper Instructions.

         Section 2.10 Deposit of Fund Assets with the Underlying Transfer Agent.

Underlying Shares shall be deposited and/or maintained in an account or accounts
maintained with the Underlying Transfer Agent. The Underlying Transfer Agent
shall be deemed to be acting as if it is a "securities depository" for purposes
of Rule 17f-4 under the 1940 Act. The Fund hereby directs the Custodian to
deposit and/or maintain such securities with the Underlying Transfer Agent,
subject to the following provisions:

         1)       The Custodian shall keep Underlying Shares owned by the
                  Fund with the Underlying Transfer Agent provided that such
                  securities are maintained in an account or accounts on the
                  books and records of the Underlying Transfer Agent in the name
                  of the Custodian as custodian for the Fund.

         2)       The records of the Custodian with respect to Underlying
                  Shares which are maintained with the Underlying Transfer Agent
                  shall identify by book-entry those Underlying Shares belonging
                  to the Fund;

         3)       The Custodian shall pay for Underlying Shares purchased for
                  the account of the Fund upon (a) receipt of advice from the
                  Fund's investment adviser that such Underlying Shares have
                  been purchased and will be transferred to the account of the
                  Custodian, on behalf of the Fund, on the books and records of
                  the Underlying Transfer Agent and (b) the making of an entry
                  on the records of the Custodian to reflect such payment and
                  transfer for the account of the Fund. The Custodian shall
                  receive confirmation from the Underlying Transfer Agent of the
                  purchase of such securities and the transfer of such
                  securities to the Custodian's account with the Underlying

                                       8

<PAGE>


                  Transfer Agent only after such payment is made. The Custodian
                  shall transfer Underlying Shares redeemed for the account of
                  the Fund (i) upon receipt of an advice from the Fund's
                  investment adviser that such securities have been redeemed and
                  that payment for such securities will be transferred to the
                  Custodian and (ii) the making of an entry on the records of
                  the Custodian to reflect such transfer and payment for the
                  account of the Fund. The Custodian will receive confirmation
                  from the Underlying Transfer Agent of the redemption of such
                  securities and payment therefor only after such securities are
                  redeemed. Copies of all advices from the Fund's investment
                  adviser of purchases and sales of Underlying Shares for the
                  account of the Fund shall identify the Fund, be maintained for
                  the Fund by the Custodian, and be provided to the Fund's
                  investment adviser at its request; and

                  4)   The Custodian shall be not be liable to the Fund for any
                  loss or damage to the Fund resulting from maintenance of
                  Underlying Shares with Underlying Transfer Agent except for
                  losses resulting directly from the negligence, misfeasance or
                  misconduct of the Custodian or any of its agents or of any of
                  its or their employees.

         Section 2.11 Ownership Certificates for Tax Purposes. The Custodian
shall execute ownership and other certificates and affidavits for all federal,
state and local tax purposes in connection with receipt and/or collection of
income or other payments with respect to domestic securities of the Fund held by
it and in connection with transfers of securities.

         Section 2.12 Proxies. Except with respect to Fund property released and
delivered pursuant to Section 2.2(14), or purchased pursuant to Section 2.6(7),
the Custodian shall, with respect to the domestic securities held hereunder,
cause to be promptly executed by the registered holder of such securities, if
the securities are registered otherwise than in the name of the Fund or a
nominee of the Fund, all proxies, without indication of the manner in which such
proxies are to be voted, and shall promptly deliver to the Fund such proxies,
all proxy soliciting materials and all notices relating to such securities.

         Section 2.13 Communications Relating to Fund Securities. Except with
respect to Fund property released and delivered pursuant to Section 2.2(14), or
purchased pursuant to Section 2.6(7), and subject to the provisions of Section
2.3, the Custodian shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of domestic
securities and expirations of rights in connection therewith) received by the
Custodian from issuers of the securities being held for the Fund. With respect
to tender or exchange offers, the Custodian shall transmit promptly to the Fund
all written information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or its agents) making the
tender or exchange offer. If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the Fund shall
notify the Custodian at least three business days prior to the date on which the
Custodian is to take such action.

                                       9

<PAGE>


Section 3.    Special Sub-Custodians

Upon receipt of Special Instructions (as such term is defined in Section 5
hereof), the Custodian shall appoint one or more banks, trust companies or other
entities designated in such Special Instructions to act as a sub-custodian for
the purposes of effecting such transactions as may be designated by a Fund in
Special Instructions. Each such designated sub-custodian is referred to herein
as a "Special Sub-Custodian." Each such duly appointed Special Sub-Custodian
shall be listed on Schedule D hereto, as it may be amended from time to time by
a Fund, with the acknowledgment of the Custodian. In connection with the
appointment of any Special Sub-Custodian, and in accordance with Special
Instructions, the Custodian shall enter into a sub-custodian agreement with the
Fund and the Special Sub-Custodian in form and substance approved by such Fund,
provided that such agreement shall in all events comply with the provisions of
the 1940 Act and the rules and regulations thereunder and the terms and
provisions of this Agreement.

Section 4.    Payments for Sales or Repurchases or Redemptions of Shares


The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent and deposit into the Fund's such payments as are received for
Shares thereof issued or sold from time to time by the Fund. The Custodian will
provide timely notification to the Fund and the Transfer Agent of any receipt by
it of payments for Shares of the Fund.

From such funds as may be available for the purpose, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders.

Section 5.    Proper Instructions

"Proper Instructions" as used throughout this Agreement means a writing signed
or initialed by one or more person or persons as the Board shall have from time
to time authorized. Each such writing shall set forth the specific transaction
or type of transaction involved. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Fund and the
Custodian agree to security procedures, including but not limited to, the
security procedures selected by the Fund in the form of Funds Transfer Addendum
attached hereto. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three-party agreement
which requires a segregated asset account in accordance with Section 2.9.

                                       10

<PAGE>


"Special Instructions" as used throughout this Agreement, means Proper
Instructions countersigned or confirmed in writing by the Treasurer or any
Assistant Treasurer of the Fund or any other person designated in writing by the
Treasurer of the Fund, which countersignature or confirmation shall be (a)
included on the same instrument containing the Proper Instructions or on a
separate instrument clearly relating thereto and (b) delivered by hand, by
facsimile transmission, or in such other manner as the Fund and the Custodian
agree in writing.

Concurrently with the execution of this Agreement, and from time to time
thereafter, as appropriate, the Fund shall deliver to the Custodian, duly
certified by the Fund's Treasurer or Assistant Treasurer, a certificate setting
forth: (i) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of the Fund and (ii) the names,
titles and signatures of those persons authorized to give Special Instructions.
Such certificate may be accepted and relied upon by the Custodian as conclusive
evidence of the facts set forth therein and shall be considered to be in full
force and effect until receipt by the Custodian of a similar certificate to the
contrary.

Section 6.    Actions Permitted without Express Authority

The Custodian may in its discretion, without express authority from the Fund:

         1)   make payments to itself or others for minor expenses of
              handling securities or other similar items relating to its
              duties under this Agreement, provided that all such payments
              shall be accounted for to the Fund;

         2)   surrender securities in temporary form for securities in
              definitive form;

         3)   endorse for collection, in the name of the Fund, checks, drafts
              and other negotiable instruments; and

         4)   in general, attend to all non-discretionary details in
              connection with the sale, exchange, substitution, purchase,
              transfer and other dealings with the securities and property
              of the Fund except as otherwise directed by the Board.

Section 7.    Evidence of Authority

The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper reasonably believed
by it to be genuine and to have been properly executed by or on behalf of the
Fund. The Custodian may receive and accept a copy of a resolution of the Board,
certified by the Secretary or an Assistant Secretary of the Fund ("Certified
Resolution"), as conclusive evidence (a) of the authority of any person to act
in accordance with such resolution or (b) of any determination or of any action
by the Board as described in such

                                       11

<PAGE>


resolution, and such resolution may be considered as in full force and effect
until receipt by the Custodian of written notice to the contrary.

Section 8.    Duties of Custodian with Respect to the Books of Account and
              Calculation of Net Asset Value and Net Income


The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board to keep the books of account of the
Fund and/or compute the net asset value per Share of the outstanding Shares or,
if directed in writing to do so by the Fund, shall itself keep such books of
account and/or compute such net asset value per Share. If so directed, the
Custodian shall also calculate daily the net income of the Fund as described in
the Prospectus and shall advise the Fund and the Transfer Agent daily of the
total amounts of such net income and, if instructed in writing by an officer of
the Fund to do so, shall advise the Transfer Agent periodically of the division
of such net income among its various components. The calculations of the net
asset value per Share and the daily income of the Fund shall be made at the time
or times described from time to time in the Prospectus.

Section 9.    Records

The Custodian shall create and maintain all records relating to its activities
and obligations under this Agreement in such manner as will meet the obligations
of the Fund under the 1940 Act, with particular attention to Section 31 thereof
and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the SEC. The Custodian shall, at
the Fund's request, supply the Fund with a tabulation of securities owned by the
Fund and held by the Custodian and shall, when requested to do so by the Fund
and for such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations. The Fund
acknowledges that, in creating and maintaining the records as set forth herein
with respect to Fund property released and delivered pursuant to Section
2.2(14), or purchased pursuant to Section 2.6(7) hereof, the Custodian is
authorized and instructed to rely upon information provided to it by the Fund,
the Fund's counterparty(ies), or the agents of either of them.

The Fund acknowledges and agrees that, with respect to investments maintained
with the Underlying Transfer Agent, the Underlying Transfer Agent is the sole
source of information on the number of shares of a fund held by it on behalf of
the Fund and that the Custodian has the right to rely on holdings information
furnished by the Underlying Transfer Agent to the Custodian in performing its
duties under this Agreement, including without limitation, the duties set forth
in this Section 9; provided, however, that the Custodian shall be obligated to
reconcile information as to purchases and sales of Underlying Shares contained
in trade instructions and confirmations received by the Custodian and to report
promptly any discrepancies to the Underlying Transfer Agent and the Fund.

                                       12

<PAGE>


Section 10.  Opinion of Fund's Independent Accountant

The Custodian shall take all reasonable action, as the Fund may from time to
time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-2, and Form N-SAR or other periodic
reports to the SEC and with respect to any other requirements thereof.

Section 11.  Reports to Fund by Independent Public Accountants

The Custodian shall provide the Fund, at such times as the Fund may reasonably
require, with reports by independent public accountants on the accounting
system, internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including securities
deposited and/or maintained in a U.S. Securities System, relating to the
services provided by the Custodian under this Agreement; such reports, shall be
of sufficient scope and in sufficient detail, as may reasonably be required by
the Fund to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.

Section 12.  Compensation of Custodian

The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between the Fund and the
Custodian.

Section 13.  Responsibility of Custodian

So long as and to the extent that it is in the exercise of reasonable care and
good faith, the Custodian shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, consent, certificate or other instrument reasonably
believed by it to be genuine and to be signed by the proper party or parties,
including any futures commission merchant acting pursuant to the terms of a
three-party futures or options agreement. The Custodian shall be held to the
exercise of reasonable care and good faith in carrying out the provisions of
this Agreement, but shall be kept indemnified by and shall be without liability
to the Fund for any action taken or omitted by it in good faith without
negligence, including, without limitation, acting in accordance with any Proper
Instruction or Special Instruction. It shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted in good
faith pursuant to such advice.

Except as may arise from the Custodian's own negligence, willful misconduct or
bad faith or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or

                                       13

<PAGE>


circumstances beyond the reasonable control of the Custodian or any
sub-custodian or Securities System or any agent or nominee of any of the
foregoing, including, without limitation, the interruption, suspension or
restriction of trading on or the closure of any securities market, power or
other mechanical or technological failures or interruptions, computer viruses or
communications disruptions, work stoppages, natural disasters, or other similar
events or acts; (ii) errors by the Fund or its duly-authorized investment
manager or investment advisor in their instructions to the Custodian provided
such instructions, and Custodian's reliance upon them, have been in accordance
with this Agreement; (iii) the insolvency of or acts or omissions by a
Securities System; (iv) any act or omission of a Special Sub-Custodian
including, without limitation, reliance on reports prepared by a Special
Sub-Custodian; (v) any delay or failure of any broker, agent or intermediary,
central bank or other commercially prevalent payment or clearing system to
deliver to the Custodian's sub-custodian or agent securities purchased or in the
remittance or payment made in connection with securities sold; (vi) any delay or
failure of any company, corporation, or other body (other than an affiliate of
Custodian) in charge of registering or transferring securities in the name of
the Custodian, the Fund, the Custodian's sub-custodians, nominees or agents or
any consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vii) delays or inability to perform its duties due to
any disorder in market infrastructure with respect to any particular security or
Securities System; and (viii) any provision of any present or future law or
regulation or order of the United States of America, or any state thereof, or
any other country, or political subdivision thereof or of any court of competent
jurisdiction.

If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.

If the Fund requires the Custodian, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of the Fund's assets
to the extent necessary to obtain reimbursement.

Except as may arise from the Custodian's own negligence, willful misconduct or
bad faith, the Fund shall indemnify and hold the Custodian harmless from and
against any and all costs, expenses, losses, damages, charges, counsel fees,
payments and liabilities which may be asserted against the Custodian (a) acting
in accordance with any Proper Instruction or Special Instruction including,
without limitation, any Proper Instruction with respect to Free Trades
including, but not limited to, cost, expense, loss, damage, liability, tax,
charge, assessment or claim resulting from (i) the failure

                                       14

<PAGE>

of the Fund to receive income with respect to purchased investments, (ii) the
failure of the Fund to recover amounts invested on maturity of purchased
investments, (iii) the failure of the Custodian to respond to or be aware of
notices or other corporate communications with respect to purchased investments,
or (iv) the Custodian's reliance upon information provided by the Fund, the
Fund's counterparty(ies) or the agents of either of them with respect to Fund
property released, delivered or purchased pursuant to either of Section 2.2(14)
or Section 2.6(7) hereof; (b) for the acts or omissions of any Special
Sub-Custodian; or (c) for the acts or omissions of any Local Agent or Pledgee.

In no event shall either party be liable for indirect, special or consequential
damages.

Section 14.  Effective Period, Termination and Amendment

This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; provided, however, that neither
party shall amend or terminate this Agreement in contravention of any applicable
federal or state regulations, or any provision of the Fund's Declaration of
Trust and further provided, that the Fund may at any time by action of its Board
(i) substitute another bank or trust company for the Custodian by giving notice
as described above to the Custodian, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.

Upon termination of the Agreement, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.

Section 15.  Successor Custodian

If a successor custodian for the Fund shall be appointed by the Board, the
Custodian shall, upon termination and receipt of Proper Instructions, deliver to
such successor custodian at the office of the Custodian, duly endorsed and in
the form for transfer, all securities of the Fund then held by it hereunder and
shall transfer to an account of the successor custodian all of the securities of
the Fund held in a Securities System or at the Underlying Transfer Agent.

If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of Proper Instructions, deliver at the office of the
Custodian and transfer such securities, funds and other properties in accordance
with such Proper Instructions. In the event that no Proper Instructions
designating a successor custodian or alternative arrangements shall have been
delivered to the Custodian on or before the date when such termination shall
become effective, then the Custodian

                                       15

<PAGE>


shall have the right to deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, doing business in Boston, Massachusetts, or New York,
New York, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian
hereunder and all instruments held by the Custodian relative thereto and all
other property held by it under this Agreement on behalf of the Fund, and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System or at the Underlying Transfer Agent. Thereafter,
such bank or trust company shall be the successor of the Custodian under this
Agreement.

In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to provide Proper Instructions as aforesaid, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other properties
and the provisions of this Agreement relating to the duties and obligations of
the Custodian shall remain in full force and effect.

Section 16.  Interpretive and Additional Provisions

In connection with the operation of this Agreement, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition to
the provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
Fund's Declaration of Trust. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.

Section 17.  Massachusetts Law to Apply

This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with laws of The Commonwealth of Massachusetts.

Section 18.  Prior Agreements

This Agreement supersedes and terminates, as of the date hereof, all prior
Agreements between the Fund and the Custodian relating to the custody of the
Fund's assets.

Section 19.  Notices.

                                       16

<PAGE>

Any notice, instruction or other instrument required to be given hereunder may
be delivered in person to the offices of the parties as set forth herein during
normal business hours or delivered prepaid registered mail or by telex, cable or
telecopy to the parties at the following addresses or such other addresses as
may be notified by any party from time to time.

To the Fund:           PIMCO New York Municipal Income Fund II
                       [*address]


                       Attention: [*contact name]

                       Telephone:
                       Telecopy:


To the Custodian:      State Street Bank and Trust Company
                       Joseph Palmer Building, 2 South
                       1 Heritage Drive
                       North Quincy, MA  02171
                       Attention: James Curran

                       Telephone: 617-985-1090
                       Telecopy: 617-537-5152

Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.

Section 20.  Reproduction of Documents

This Agreement and all schedules, addenda, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.

                                       17

<PAGE>

Section 21.  Counterparts.

This Agreement may be executed in several counterparts, each of which shall be
deemed to be an original, and all such counterparts taken together shall
constitute one and the same Agreement.

Section 22.  Severability.

If any provision or provisions of this Agreement shall be held to be invalid,
unlawful or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.

Section 23.  Remote Access Services Addendum.

The Custodian and the Fund agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.

Section 24.  Shareholder Communications Election

SEC Rule 14b-2 requires banks which hold securities for the account of customers
to respond to requests by issuers of securities for the names, addresses and
holdings of beneficial owners of securities of that issuer held by the bank
unless the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, the Custodian needs the Fund to
indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by the rule
to treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.

YES [_]      The Custodian is authorized to release the Fund's name, address,
             and share positions.

NO  [X]      The Custodian is not authorized to release the Fund's name,
             address, and share positions.

                  [Remainder of page intentionally left blank]

                                       18

<PAGE>

IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of June 28, 2002.

PIMCO New York Municipal Income Fund II     Fund Signature Attested to By:




By:    _________________________          By:     ____________________

Name:  _________________________          Name:   ____________________

Title: _________________________          Title:  ____________________




State Street Bank and Trust Company         Signature Attested to By:




By:    _________________________          By:     ____________________

Name:  Joseph L. Hooley                   Name:   Raelene S. LaPlante
       -------------------------                  --------------------

Title: Executive Vice President            Title: V.P. and Counsel
       -------------------------                  --------------------

                                       19

<PAGE>

                            FUNDS TRANSFER ADDENDUM

                                                          [LOGO OF STATE STREET]
OPERATING GUIDELINES

1. Obligation of the Sender: State Street is authorized to promptly debit
Client's account(s) upon the receipt of a payment order in compliance with the
selected Security Procedure chosen for funds transfer and in the amount of money
that State Street has been instructed to transfer. State Street shall execute
payment orders in compliance with the Security Procedure and with the Client's
instructions on the execution date provided that such payment order is received
by the customary deadline for processing such a request, unless the payment
order specifies a later time. All payment orders and communications received
after this time will be deemed to have been received on the next business day.

2. Security Procedure: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. The Client agrees that the Security
Procedures are reasonable and adequate for its wire transfer transactions and
agrees to be bound by any payment orders, amendments and cancellations, whether
or not authorized, issued in its name and accepted by State Street after being
confirmed by any of the selected Security Procedures. The Client also agrees to
be bound by any other valid and authorized payment order accepted by State
Street. The Client shall restrict access to confidential information relating to
the Security Procedure to authorized persons as communicated in writing to State
Street. The Client must notify State Street immediately if it has reason to
believe unauthorized persons may have obtained access to such information or of
any change in the Client's authorized personnel. State Street shall verify the
authenticity of all instructions according to the Security Procedure.

3. Account Numbers: State Street shall process all payment orders on the basis
of the account number contained in the payment order. In the event of a
discrepancy between any name indicated on the payment order and the account
number, the account number shall take precedence and govern. Financial
institutions that receive payment orders initiated by State Street at the
instruction of the Client may also process payment orders on the basis of
account numbers, regardless of any name included in the payment order. State
Street will also rely on any financial institution identification numbers
included in any payment order, regardless of any financial institution name
included in the payment order.

4. Rejection: State Street reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of State Street's receipt of such payment
order; (b) if initiating such payment order would cause State Street, in State
Street's sole judgment, to exceed any volume, aggregate dollar, network, time,
credit or similar limits upon wire transfers which are applicable to State
Street; or (c) if State Street, in good faith, is unable to satisfy itself that
the transaction has been properly authorized.

5. Cancellation or Amendment: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.

6. Errors: State Street shall assume no responsibility for failure to detect any
erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.

7. Interest and Liability Limits: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.

8. Automated Clearing House ("ACH") Credit Entries/Provisional Payments: When a
Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the New England Clearing House Association, State Street will act as an
Originating Depository Financial Institution and/or Receiving Depository
Institution, as the case may be, with respect to such entries. Credits given by
State Street with respect to an ACH credit entry are provisional until State
Street receives final settlement for such entry from the Federal Reserve Bank.
If State Street does not receive such final settlement, the Client agrees that
State Street shall receive a refund of the amount credited to the Client in
connection with such entry, and the party making payment to the Client via such
entry shall not be deemed to have paid the amount of the entry.

9. Confirmation Statements: Confirmation of State Street's execution of payment
orders shall ordinarily be provided within 24 hours. Notice may be delivered
through State Street's proprietary information systems, such as, but not limited
to Horizon and GlobalQuest(R), account statements, advices, or by facsimile or
callback. The Client must report any objections to the execution of a payment
order within 30 days.

<PAGE>

                            FUNDS TRANSFER ADDENDUM

                                                          [LOGO OF STATE STREET]

10. Liability on Foreign Accounts: State Street shall not be required to repay
any deposit made at a non-U.S. branch of State Street, or any deposit made with
State Street and denominated in a non-U.S. dollar currency, if repayment of such
deposit or the use of assets denominated in the non-U.S. dollar currency is
prevented, prohibited or otherwise blocked due to: (a) an act of war,
insurrection or civil strife; (b) any action by a non-U.S. government or
instrumentality or authority asserting governmental, military or police power of
any kind, whether such authority be recognized as a defacto or a dejure
government, or by any entity, political or revolutionary movement or otherwise
that usurps, supervenes or otherwise materially impairs the normal operation of
civil authority; or(c) the closure of a non-U.S. branch of State Street in order
to prevent, in the reasonable judgment of State Street, harm to the employees or
property of State Street. The obligation to repay any such deposit shall not be
transferred to and may not be enforced against any other branch of State Street.

The foregoing provisions constitute the disclosure required by Massachusetts
General Laws, Chapter 167D, Section 36.

While State Street is not obligated to repay any deposit made at a non-U.S.
branch or any deposit denominated in a non-U.S. currency during the period in
which its repayment has been prevented, prohibited or otherwise blocked, State
Street will repay such deposit when and if all circumstances preventing,
prohibiting or otherwise blocking repayment cease to exist.

11. Miscellaneous: State Street and the Client agree to cooperate to attempt to
recover any funds erroneously paid to the wrong party or parties, regardless of
any fault of State Street or the Client, but the party responsible for the
erroneous payment shall bear all costs and expenses incurred in trying to effect
such recovery. These Guidelines may not be amended except by a written agreement
signed by the parties.

<PAGE>

                            FUNDS TRANSFER ADDENDUM

                                                          [LOGO OF STATE STREET]

Security Procedure(s) Selection Form

Please select one or more of the funds transfer security procedures indicated
below.

[_]SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions that
provides telecommunication services for its membership. Participation is limited
to securities brokers and dealers, clearing and depository institutions,
recognized exchanges for securities, and investment management institutions.
SWIFT provides a number of security features through encryption and
authentication to protect against unauthorized access, loss or wrong delivery of
messages, transmission errors, loss of confidentiality and fraudulent changes to
messages. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions.
Selection of this security procedure would be most appropriate for existing
SWIFT members.

[_]Standing Instructions
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client. The
Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.

[_]Remote Batch Transmission
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers.
Clients selecting this option should have an existing facility for completing
CPU-CPU transmissions. This delivery mechanism is typically used for high-volume
business.

[_]Global Horizon Interchangesm Funds Transfer Service
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street.
This delivery mechanism is most appropriate for Clients with a low-to-medium
number of transactions (5-75 per day), allowing Clients to enter, batch, and
review wire transfer instructions on their PC prior to release to State Street.

[_]Telephone Confirmation (Callback)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, will contact someone other than
the originator at the Client's location to authenticate the instruction.
Selection of this alternative is appropriate for Clients who do not have the
capability to use other security procedures.

[_]Repetitive Wires
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) from an existing authorized account to the
same payee (destination bank and account number) and only the date and currency
amount are variable, a repetitive wire may be implemented. Repetitive wires will
be subject to a mutually agreed upon limit. If the payment order exceeds the
established limit, the instruction will be confirmed by telephone prior to
execution. Telephone confirmation is used to establish this process. Repetitive
wire instructions must be reconfirmed annually.
This alternative is recommended whenever funds are frequently transferred
between the same two accounts.

[_]Transfers Initiated by Facsimile
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key logs from
State Street. The test key contains alpha-numeric characters, which the Client
puts on each document faxed to State Street. This procedure ensures all wire
instructions received via fax are authorized by the Client.
We provide this option for Clients who wish to batch wire instructions and
transmit these as a group to State Street Mutual Fund Services once or several
times a day.

<PAGE>

                            FUNDS TRANSFER ADDENDUM

                                                          [LOGO OF STATE STREET]

[_]Automated Clearing House (ACH)
State Street receives an automated transmission or a magnetic tape from a Client
for the initiation of payment (credit) or collection (debit) transactions
through the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. Clients using ACH must select one or more
of the following delivery options:

[_]Global Horizon Interchange Automated Clearing House Service
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic transmissions in
standard NACHA formats.

[_]Transmission from Client PC to State Street Mainframe with Telephone Callback

[_]Transmission from Client Mainframe to State Street Mainframe with Telephone
  Callback

[_]Transmission from DST Systems to State Street Mainframe with Encryption

[_]Magnetic Tape Delivered to State Street with Telephone Callback

State Street is hereby instructed to accept funds transfer instructions only via
the delivery methods and security procedures indicated. The selected delivery
methods and security procedure(s) will be effective ________________________ for
payment orders initiated by our organization.



Key Contact Information

Whom shall we contact to implement your selection(s)?

CLIENT OPERATIONS CONTACT                           ALTERNATE CONTACT

_______________________________________    _____________________________________
             Name                                    Name

_______________________________________    _____________________________________
             Address                                 Address

_______________________________________    _____________________________________
             City/State/Zip Code                     City/State/Zip Code

_______________________________________    _____________________________________
             Telephone Number                        Telephone Number

_______________________________________    _____________________________________
             Facsimile Number                        Facsimile Number

_______________________________________
             SWIFT Number

_______________________________________
             Telex Number

<PAGE>

                            FUNDS TRANSFER ADDENDUM

                                                          [LOGO OF STATE STREET]

INSTRUCTION(S)

TELEPHONE CONFIRMATION

Fund PIMCO New York Municipal Income Fund II
     ---------------------------------------------------------

Investment Adviser____________________________________________

Authorized Initiators
 Please Type or Print

Please provide a listing of Fund officers or other individuals who are currently
authorized to initiate wire transfer instructions to State Street:

NAME                   TITLE (Specify whether position   SPECIMEN SIGNATURE
                       is with Fund or Investment
                       Adviser)

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________



Authorized Verifiers
    Please Type or Print

Please provide a listing of Fund officers or other individuals who will be
CALLED BACK to verify the initiation of repetitive wires of $10 million or more
and all non-repetitive wire instructions:

NAME                   CALLBACK PHONE NUMBER             DOLLAR LIMITATION (IF
                                                         ANY)

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________

_____________________  _____________________________     _______________________













<PAGE>

             REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT

         ADDENDUM to that certain Custodian Agreement dated as of June 28, 2002
(the "Custodian Agreement") between PIMCO New York Municipal Income Fund II (the
"Customer") and State Street Bank and Trust Company, including its subsidiaries
and affiliates ("State Street").

         State Street has developed and utilizes proprietary accounting and
other systems in conjunction with the custodian services which State Street
provides to the Customer. In this regard, State Street maintains certain
information in databases under its control and ownership which it makes
available to its customers (the "Remote Access Services").

The Services

State Street agrees to provide the Customer, and its designated investment
advisors, consultants or other third parties authorized by State Street
("Authorized Designees") with access to In~Sight(SM) as described in Exhibit A
or such other systems as may be offered from time to time (the "System") on a
remote basis.

Security Procedures

The Customer agrees to comply, and to cause its Authorized Designees to comply,
with remote access operating standards and procedures and with user
identification or other password control requirements and other security
procedures as may be issued from time to time by State Street for use of the
System and access to the Remote Access Services. The Customer agrees to advise
State Street immediately in the event that it learns or has reason to believe
that any person to whom it has given access to the System or the Remote Access
Services has violated or intends to violate the terms of this Addendum and the
Customer will cooperate with State Street in seeking injunctive or other
equitable relief. The Customer agrees to discontinue use of the System and
Remote Access Services, if requested, for any security reasons cited by State
Street.

Fees

Fees and charges for the use of the System and the Remote Access Services and
related payment terms shall be as set forth in the Custody Fee Schedule in
effect from time to time between the parties (the "Fee Schedule"). The Customer
shall be responsible for any tariffs, duties or taxes imposed or levied by any
government or governmental agency by reason of the transactions contemplated by
this Addendum, including, without limitation, federal, state and local taxes,
use, value added and personal property taxes (other than income, franchise or
similar taxes which may be imposed or assessed against State Street). Any
claimed exemption from such tariffs, duties or taxes shall be supported by
proper documentary evidence delivered to State Street.

Proprietary Information/Injunctive Relief

The System and Remote Access Services described herein and the databases,
computer programs, screen formats, report formats, interactive design
techniques, formulae, processes, systems, software, knowhow, algorithms,
programs, training aids, printed materials, methods, books, records, files,
documentation and other information made available to the Customer by State
Street as part of the Remote Access Services and through the use of the System
and all copyrights, patents, trade secrets and other proprietary rights of State
Street related thereto are the exclusive, valuable and confidential property of
State Street and its relevant licensors (the "Proprietary Information"). The
Customer agrees on behalf of itself and its

                                       i

<PAGE>

Authorized Designees to keep the Proprietary Information confidential and to
limit access to its employees and Authorized Designees (under a similar duty of
confidentiality) who require access to the System for the purposes intended. The
foregoing shall not apply to Proprietary Information in the public domain or
required by law to be made public.

The Customer agrees to use the Remote Access Services only in connection with
the proper purposes of this Addendum. The Customer will not, and will cause its
employees and Authorized Designees not to, (i) permit any third party to use the
System or the Remote Access Services, (ii) sell, rent, license or otherwise use
the System or the Remote Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, or (iv)
allow or cause any information transmitted from State Street's databases,
including data from third party sources, available through use of the System or
the Remote Access Services, to be published, redistributed or retransmitted for
other than use for or on behalf of the Customer, as State Street's customer.

The Customer agrees that neither it nor its Authorized Designees will modify the
System in any way; enhance or otherwise create derivative works based upon the
System; nor will the Customer or Customer's Authorized Designees reverse
engineer, decompile or otherwise attempt to secure the source code for all or
any part of the System.

The Customer acknowledges that the disclosure of any Proprietary Information, or
of any information which at law or equity ought to remain confidential, will
immediately give rise to continuing irreparable injury to State Street
inadequately compensable in damages at law and that State Street shall be
entitled to obtain immediate injunctive relief against the breach or threatened
breach of any of the foregoing undertakings, in addition to any other legal
remedies which may be available.

Limited Warranties

State Street represents and warrants that it is the owner of and has the right
to grant access to the System and to provide the Remote Access Services
contemplated herein. Because of the nature of computer information technology,
including but not limited to the use of the Internet, and the necessity of
relying upon third party sources, and data and pricing information obtained from
third parties, the System and Remote Access Services are provided "AS IS", and
the Customer and its Authorized Designees shall be solely responsible for the
investment decisions, results obtained, regulatory reports and statements
produced using the Remote Access Services. State Street and its relevant
licensors will not be liable to the Customer or its Authorized Designees for any
direct or indirect, special, incidental, punitive or consequential damages
arising out of or in any way connected with the System or the Remote Access
Services, nor shall either party be responsible for delays or nonperformance
under this Addendum arising out of any cause or event beyond such party's
control.

State Street will take reasonable steps to ensure that its products (and those
of its third-party suppliers) reflect the available state of the art technology
to offer products that are Year 2000 compliant, including, but not limited to,
century recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that reflect
the date issues arising between now and the next one-hundred years, and if any
changes are required, State Street will make the changes to its products at no
cost to you and in a commercially reasonable time frame and will require
third-party suppliers to do likewise. The Customer will do likewise for its
systems.

                                       ii

<PAGE>

EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR ITSELF AND ITS
RELEVANT LICENSORS, EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE
SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.

Infringement

State Street will defend or, at our option, settle any claim or action brought
against the Customer to the extent that it is based upon an assertion that
access to the System or use of the Remote Access Services by the Customer under
this Addendum constitutes direct infringement of any patent or copyright or
misappropriation of a trade secret, provided that the Customer notifies State
Street promptly in writing of any such claim or proceeding and cooperates with
State Street in the defense of such claim or proceeding. Should the System or
the Remote Access Services or any part thereof become, or in State Street's
opinion be likely to become, the subject of a claim of infringement or the like
under any applicable patent or copyright or trade secret laws, State Street
shall have the right, at State Street's sole option, to (i) procure for the
Customer the right to continue using the System or the Remote Access Services,
(ii) replace or modify the System or the Remote Access Services so that the
System or the Remote Access Services becomes noninfringing, or (iii) terminate
this Addendum without further obligation.

Termination

Either party to the Custodian Agreement may terminate this Addendum (i) for any
reason by giving the other party at least one-hundred and eighty (180) days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty (30) days' notice in the case of notice from the Customer to
State Street of termination, or (ii) immediately for failure of the other party
to comply with any material term and condition of the Addendum by giving the
other party written notice of termination. This Addendum shall in any event
terminate within ninety (90) days after the termination of the Custodian
Agreement. In the event of termination, the Customer will return to State Street
all copies of documentation and other confidential information in its possession
or in the possession of its Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive termination for a
period of three (3) years.

Miscellaneous

This Addendum and the exhibits hereto constitute the entire understanding of the
parties to the Custodian Agreement with respect to access to the System and the
Remote Access Services. This Addendum cannot be modified or altered except in a
writing duly executed by each of State Street and the Customer and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.

By its execution of the Custodian Agreement, the Customer accepts responsibility
for its and its Authorized Designees' compliance with the terms of this
Addendum.

                                      iii

<PAGE>

                                    EXHIBIT A
                                       to
             REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT


                                   IN~SIGHT(SM)
                           System Product Description

In~Sight(SM) provides bilateral information delivery, interoperability, and
on-line access to State Street. In~Sight(SM) allows users a single point of
entry into State Street's diverse systems and applications. Reports and data
from systems such as Investment Policy Monitor(SM), Multicurrency Horizon(SM),
Securities Lending, Performance & Analytics, and Electronic Trade Delivery can
be accessed through In~Sight(SM). This Internet-enabled application is designed
to run from a Web browser and perform across low-speed data lines or corporate
high-speed backbones. In~Sight(SM) also offers users a flexible toolset,
including an ad-hoc query function, a custom graphics package, a report
designer, and a scheduling capability. Data and reports offered through
In~Sight(SM) will continue to increase in direct proportion with the customer
roll out, as it is viewed as the information delivery system will grow with
State Street's customers.

                                       iv

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(K)(1)
<SEQUENCE>14
<FILENAME>dex99k1.txt
<DESCRIPTION>FORM OF TRANSFER AGENCY SERVICES AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit k.1

                       TRANSFER AGENCY SERVICES AGREEMENT

         THIS AGREEMENT is made as of ____________, 2002 by and between PFPC
INC., a Massachusetts corporation ("PFPC"), and PIMCO NEW YORK MUNICIPAL INCOME
FUND II, a Massachusetts business trust (the "Fund").

                              W I T N E S S E T H:

         WHEREAS, the Fund is registered as a closed-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and

         WHEREAS, the Fund wishes to retain PFPC to serve as transfer agent,
registrar, dividend disbursing agent and shareholder servicing agent and PFPC
wishes to furnish such services.

         NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, the parties hereto
agree as follows:

1.       Definitions.  As Used in this Agreement:

         (a) "1933 Act" means the Securities Act of 1933, as amended.

         (b) "1934 Act" means the Securities Exchange Act of 1934, as amended.

         (c) "Authorized Person" means any officer of the Fund and any other
             person duly authorized by the Fund's Board of Trustees to give Oral
             Instructions and Written Instructions on behalf of the Fund. An
             Authorized Person's scope of authority may be limited by setting
             forth such limitation in a written document signed by both parties
             hereto.

         (d) "CEA" means the Commodities Exchange Act, as amended.

         (e) "Oral Instructions" mean oral instructions received by PFPC from an
             Authorized Person or from a person reasonably believed by PFPC to
             be an Authorized Person.

                                       -1-

<PAGE>

             PFPC may, in its sole discretion in each separate instance,
             consider and rely upon instructions it receives from an Authorized
             Person via electronic mail as Oral Instructions.

         (f) "SEC" means the Securities and Exchange Commission.

         (g) "Securities Laws" mean the 1933 Act, the 1934 Act, the 1940 Act and
             the CEA.

         (h) "Shares" mean the shares of beneficial interest of any series or
             class of the Fund.

         (i) "Written Instructions" mean (i) written instructions signed by an
             Authorized Person and received by PFPC or (ii) trade instructions
             transmitted (and received by PFPC) by means of an electronic
             transaction reporting system access to which requires use of a
             password or other authorized identifier. The instructions may be
             delivered by hand, mail, tested telegram, cable, telex or facsimile
             sending device.

2.       Appointment. The Fund hereby appoints PFPC to serve as transfer agent,
         registrar, dividend disbursing agent and shareholder servicing agent to
         the Fund in accordance with the terms set forth in this Agreement. PFPC
         accepts such appointment and agrees to furnish such services.

3.       Delivery of Documents. The Fund has provided or, where applicable, will
         provide PFPC with the following:

         (a) At PFPC's request, certified or authenticated copies of the
             resolutions of the Fund's Board of Trustees, approving the
             appointment of PFPC or its affiliates to provide services to the
             Fund and approving this Agreement;

         (b) A copy of the Fund's most recent effective registration statement;

         (c) A copy of the advisory agreement with respect to the Fund;

         (d) A copy of the distribution/underwriting agreement with respect to
             each class of Shares of the Fund;

         (e) A copy of the Fund's administration agreements if PFPC is not
             providing the

                                                                               2

<PAGE>

              Fund with such services;

         (f)  Copies of any distribution and/or shareholder servicing plans and
              agreements made in respect of the Fund;

         (g)  A copy of the Fund's organizational documents, as filed with the
              state in which the Fund is organized; and

         (h)  Copies (certified or authenticated where applicable) of any and
              all amendments or supplements to the foregoing.

4.       Compliance with Rules and Regulations. PFPC undertakes to comply with
         all applicable requirements of the Securities Laws and any laws, rules
         and regulations of governmental authorities having jurisdiction with
         respect to the duties to be performed by PFPC hereunder. Except as
         specifically set forth herein, PFPC assumes no responsibility for such
         compliance by the Fund or any other entity.

5.       Instructions.

         (a)  Unless otherwise provided in this Agreement, PFPC shall act only
              upon Oral Instructions or Written Instructions.

         (b)  PFPC shall be entitled to rely upon any Oral Instruction or
              Written Instruction it receives from an Authorized Person (or from
              a person reasonably believed by PFPC to be an Authorized Person)
              pursuant to this Agreement. PFPC may assume that any Oral
              Instruction or Written Instruction received hereunder is not in
              any way inconsistent with the provisions of organizational
              documents or this Agreement or of any vote, resolution or
              proceeding of the Fund's Board of Trustees or of the Fund's
              shareholders, unless and until PFPC receives Written Instructions
              to the contrary.

         (c)  The Fund agrees to forward to PFPC Written Instructions confirming
              Oral Instructions so that PFPC receives the Written Instructions
              by the close of

                                                                               3

<PAGE>

              business on the same day that such Oral Instructions are received.
              The fact that such confirming Written Instructions are not
              received by PFPC or differ from the Oral Instructions shall in no
              way invalidate the transactions or enforceability of the
              transactions authorized by the Oral Instructions or PFPC's ability
              to rely upon such Oral Instructions. Where Oral Instructions or
              Written Instructions reasonably appear to have been received from
              an Authorized Person, PFPC shall incur no liability to the Fund in
              acting in conformance with such Oral Instructions or Written
              Instructions provided that PFPC's actions comply with the other
              provisions of this Agreement.

6.       Right to Receive Advice.

         (a)  Advice of the Fund. If PFPC is in doubt as to any action it should
              or should not take, PFPC may request directions or advice,
              including Oral Instructions or Written Instructions, from the
              Fund.

         (b)  Advice of Counsel. If PFPC shall be in doubt as to any question of
              law pertaining to any action it should or should not take, PFPC
              may request advice from counsel of its own choosing (who may be
              counsel for the Fund, the Fund's investment adviser or PFPC, at
              the option of PFPC).

         (c)  Conflicting Advice. In the event of a conflict between directions
              or advice or Oral Instructions or Written Instructions PFPC
              receives from the Fund, and the advice it receives from counsel,
              PFPC may rely upon and follow the advice of counsel. Reliance on
              such advice, however, does not excuse PFPC from its duties under
              this Agreement.

         (d)  Protection of PFPC. PFPC shall be protected in any action it takes
              or does not

                                                                               4

<PAGE>

              take in reliance upon directions or advice or Oral Instructions or
              Written Instructions it receives from the Fund or from counsel and
              which PFPC believes, in good faith, to be consistent with those
              directions or advice or Oral Instructions or Written Instructions.
              Nothing in this section shall be construed so as to impose an
              obligation upon PFPC (i) to seek such directions or advice or Oral
              Instructions or Written Instructions, or (ii) to act in accordance
              with such directions or advice or Oral Instructions or Written
              Instructions unless, under the terms of other provisions of this
              Agreement, the same is a condition of PFPC's properly taking or
              not taking such action.

7.       Records; Visits. The books and records pertaining to the Fund, which
         are in the possession or under the control of PFPC, shall be the
         property of the Fund. Such books and records shall be prepared and
         maintained as required by the 1940 Act and other applicable securities
         laws, rules and regulations. The Fund and Authorized Persons shall have
         access to such books and records at all times during PFPC's normal
         business hours. Upon the reasonable request of the Fund, copies of any
         such books and records shall be provided by PFPC to the Fund or to an
         Authorized Person, at the Fund's expense.

8.       Confidentiality. Each party shall keep confidential any information
         relating to the other party's business ("Confidential Information").
         Confidential Information shall include (a) any data or information that
         is competitively sensitive material, and not generally known to the
         public, including, but not limited to, information about product plans,
         marketing strategies, finances, operations, customer relationships,
         customer profiles, customer lists, sales estimates, business plans, and
         internal performance results relating to the past, present or future
         business activities of the Fund or PFPC, their respective subsidiaries
         and

                                                                               5

<PAGE>

         affiliated companies and the customers, clients and suppliers of any of
         them; (b) any scientific or technical information, design, process,
         procedure, formula, or improvement that is commercially valuable and
         secret in the sense that its confidentiality affords the Fund or PFPC a
         competitive advantage over its competitors; (c) all confidential or
         proprietary concepts, documentation, reports, data, specifications,
         computer software, source code, object code, flow charts, databases,
         inventions, know-how, and trade secrets, whether or not patentable or
         copyrightable; and (d) anything designated as confidential.
         Notwithstanding the foregoing, information shall not be subject to such
         confidentiality obligations if it: (a) is already known to the
         receiving party at the time it is obtained and was obtained through
         some means other than through the performance of an agreement between
         PFPC and an affiliate of the Fund; (b) is or becomes publicly known or
         available through no wrongful act of the receiving party; (c) is
         rightfully received from a third party who, to the best of the
         receiving party's knowledge, is not under a duty of confidentiality;
         (d) is released by the protected party to a third party without
         restriction; (e) is required to be disclosed by the receiving party
         pursuant to a requirement of a court order, subpoena, governmental or
         regulatory agency or law (provided the receiving party will provide the
         other party written notice of such requirement, to the extent such
         notice is permitted); (f) is relevant to the defense of any claim or
         cause of action asserted against the receiving party; or (g) has been
         or is independently developed or obtained by the receiving party. In
         addition, PFPC agrees that it will not, at any time during the term of
         this Agreement or after its termination, reveal, divulge, or make known
         to any person or entity, unless required by law, any list of
         shareholders of the Fund or any personal information relating to such
         shareholders.

                                                                               6

<PAGE>

9.   Cooperation with Accountants. PFPC shall cooperate with the Fund's
     independent public accountants and shall take all reasonable actions in the
     performance of its obligations under this Agreement to ensure that the
     necessary information is made available to such accountants for the
     expression of their opinion, as required by the Fund.

10.  PFPC System. PFPC shall retain title to and ownership of any and all data
     bases, computer programs, screen formats, report formats, interactive
     design techniques, derivative works, inventions, discoveries, patentable or
     copyrightable matters, concepts, expertise, patents, copyrights, trade
     secrets, and other related legal rights utilized by PFPC in connection with
     the services provided by PFPC to the Fund.

11.  Disaster Recovery. PFPC shall enter into and shall maintain in effect with
     appropriate parties one or more agreements making reasonable provisions for
     emergency use of electronic data processing equipment to the extent
     appropriate equipment is available. In the event of equipment failures,
     PFPC shall, at no additional expense to the Fund, take reasonable steps to
     minimize service interruptions. PFPC shall have no liability with respect
     to the loss of data or service interruptions caused by equipment failure,
     provided such loss or interruption is not caused by PFPC's own willful
     misfeasance, bad faith, negligence or reckless disregard of its duties or
     obligations under this Agreement.

12.  Compensation. As compensation for services rendered by PFPC during the term
     of this Agreement, the Fund will pay to PFPC a fee or fees as may be agreed
     to from time to time in writing by the Fund and PFPC. The Fund acknowledges
     that PFPC may receive float benefits and/or investment earnings in
     connection with maintaining certain accounts required to provide services
     under this Agreement.

                                                                               7

<PAGE>

13.  Indemnification. The Fund agrees to indemnify, defend and hold harmless
     PFPC and its affiliates, including their respective officers, directors,
     agents and employees, from all taxes, charges, expenses, assessments,
     claims and liabilities (including, without limitation, attorneys' fees and
     disbursements and liabilities arising under the Securities Laws and any
     state and foreign securities and blue sky laws) arising directly or
     indirectly from any action or omission to act which PFPC takes in
     connection with the provision of services to the Fund. Neither PFPC, nor
     any of its affiliates, shall be indemnified against any liability (or any
     expenses incident to such liability) caused by PFPC's or its affiliates'
     own willful misfeasance, bad faith, gross negligence or reckless disregard
     of its duties and obligations under this Agreement, provided that in the
     absence of a finding to the contrary the acceptance, processing and/or
     negotiation of a fraudulent payment for the purchase of Shares shall be
     presumed not to have been the result of PFPC's or its affiliates own
     willful misfeasance, bad faith, gross negligence or reckless disregard of
     such duties and obligations. The provisions of this Section 13 shall
     survive termination of this Agreement.

14.  Responsibility of PFPC.

     (a) PFPC shall be under no duty to take any action hereunder on behalf of
         the Fund except as specifically set forth herein or as may be
         specifically agreed to by PFPC and the Fund in a written amendment
         hereto. PFPC shall be obligated to exercise customary care and
         diligence in the performance of its duties hereunder and to act in good
         faith in performing services provided for under this Agreement. PFPC
         shall be liable only for any damages arising out of PFPC's failure to
         perform its duties under this Agreement to the extent such damages
         arise out of PFPC's

                                                                               8

<PAGE>

              willful misfeasance, bad faith, negligence or reckless disregard
              of such duties.

         (b)  Without limiting the generality of the foregoing or of any other
              provision of this Agreement, (i) PFPC shall not be liable for
              losses beyond its control, including without limitation (subject
              to Section 11), delays or errors or loss of data occurring by
              reason of circumstances beyond PFPC's control, provided that PFPC
              has acted in accordance with the standard set forth in Section
              14(a) above and has otherwise fulfilled its obligation under this
              Agreement; and (ii) PFPC shall not be under any duty or obligation
              to inquire into and shall not be liable for the validity or
              invalidity or authority or lack thereof of any Oral Instruction or
              Written Instruction, notice or other instrument which conforms to
              the applicable requirements of this Agreement, and which PFPC
              reasonably believes to be genuine.

         (c)  Notwithstanding anything in this Agreement to the contrary, (i)
              neither party nor its affiliates shall be liable for any
              consequential, special or indirect losses or damages, whether or
              not the likelihood of such losses or damages was known by the
              party or its affiliates and (ii) excluding fees owed by the Fund
              under this Agreement for services rendered by PFPC, a party's
              cumulative liability for all losses, claims, suits, controversies,
              breaches or damages for any cause whatsoever (including but not
              limited to those arising out of or related to this Agreement) and
              regardless of the form of action or legal theory shall not exceed
              $100,000 plus reasonable attorney's fees.

         (d)  Each party shall have a duty to mitigate damages for which the
              other party may become responsible.

                                                                               9

<PAGE>

     (e) The provisions of this Section 14 shall survive termination of this
         Agreement.

15.  Description of Services.

     (a) Services Provided on an Ongoing Basis, If Applicable.

         (i)   Maintain shareholder registrations;

         (ii)  Provide toll-free lines for shareholder and broker-dealer use;

         (iii) Provide periodic shareholder lists and statistics;

         (iv)  Mailing of year-end tax information; and

         (v)   Periodic mailing of shareholder dividend reinvestment plan
               account information and Fund financial reports.

     (b) Dividends and Distributions. PFPC must receive Written Instructions
         authorizing the declaration and payment of dividends and distributions.
         Upon receipt of the resolution, PFPC shall issue the dividends and
         distributions in cash, or, if the resolution so provides, pay such
         dividends and distributions in Shares. Such issuance or payment shall
         be made after deduction and payment of the required amount of funds to
         be withheld in accordance with any applicable tax laws or other laws,
         rules or regulations. PFPC shall timely send to the Fund's shareholders
         tax forms and other information, or permissible substitute notice,
         relating to dividends and distributions, paid by the Fund as are
         required to be filed and mailed by applicable law, rule or regulation.

         PFPC shall maintain and file with the United States Internal Revenue
         Service and other appropriate taxing authorities reports relating to
         all dividends above a stipulated amount (currently $10.00 accumulated
         yearly dividends) paid by the Fund to its shareholders as required by
         tax or other law, rule or regulation.

                                                                              10

<PAGE>

                In accordance with the Prospectus and such procedures and
                controls as are mutually agreed upon from time to time by and
                among the Fund, PFPC and the Fund's Custodian, PFPC shall
                process applications from Shareholders relating to the Fund's
                Dividend Reinvestment Plan ("Dividend Reinvestment Plan") and
                will effect purchases of Shares in connection with the Dividend
                Reinvestment Plan. As the dividend disbursing agent, PFPC shall,
                on or before the payment date of any such dividend or
                distribution, notify the fund accounting agent of the estimated
                amount required to pay any portion of said dividend or
                distribution which is payable in cash, and on or before the
                payment date of such distribution, the Fund shall instruct the
                custodian to make available to the dividend disbursing agent
                sufficient funds for the cash amount to be paid out. If a
                shareholder is entitled to receive additional Shares, by virtue
                of any distribution or dividend, appropriate credits will be
                made to his or her account and/or certificates delivered where
                requested, all in accordance with the Dividend Reinvestment
                Plan.

         (c)    Communications to Shareholders. Upon timely written
                instructions, PFPC shall mail all communications by the Fund to
                its shareholders, including:

                    (i)    Reports to shareholders;

                    (ii)   Monthly or quarterly dividend reinvestment plan
                           statements;

                    (iii)  Dividend and distribution notices;

                    (iv)   Proxy material; and

                    (v)    Tax form information.

                PFPC will receive and tabulate the proxy cards for the meetings
                of the Fund's shareholders.

                                                                              11

<PAGE>

     (d)  Records. PFPC shall maintain records of the accounts for each
          shareholder showing the following information:

          (i)    Name, address and United States Tax Identification or Social
                 Security number;

          (ii)   Number and class of shares held and number and class of shares
                 for which certificates, if any, have been issued, including
                 certificate numbers and denominations;

          (iii)  Historical information regarding the account of each
                 shareholder, including dividends and distributions paid and the
                 date and price for all transactions on a shareholder's account;

          (iv)   Any stop or restraining order placed against a shareholder's
                 account;

          (v)    Any correspondence relating to the current maintenance of a
                 shareholder's account;

          (vi)   Information with respect to withholdings; and

          (vii)  Any information required in order for the transfer agent to
                 perform any calculations contemplated or required by this
                 Agreement.

     (e)  Shareholder Inspection of Stock Records. Upon requests from Fund
          shareholders to inspect stock records, PFPC will notify the Fund and
          require instructions granting or denying each such request. Unless
          PFPC has acted contrary to the Fund's instructions, the Fund agrees to
          release PFPC from any liability for refusal of permission for a
          particular shareholder to inspect the Fund's shareholder records.

16.  Duration and Termination. This Agreement shall continue until terminated by
     the Fund or by PFPC on sixty (60) days' prior written notice to the other
     party. In the event the Fund gives notice of termination, all expenses
     associated with movement (or duplication) of records and materials and
     conversion thereof to a successor transfer agent

                                                                              12


<PAGE>

     or other service provider, and all trailing expenses incurred by PFPC
     directly attributable to termination, will be borne by the Fund.

17.  Notices. Notices shall be addressed (a) if to PFPC, at 400 Bellevue
     Parkway, Wilmington, Delaware 19809, Attention: President; (b) if to the
     Fund, at _________, Attention: __________ or (c) if to neither of the
     foregoing, at such other address as shall have been given by like notice to
     the sender of any such notice or other communication by the other party. If
     notice is sent by confirming telegram, cable, telex or facsimile sending
     device, it shall be deemed to have been given immediately. If notice is
     sent by first-class mail, it shall be deemed to have been given three days
     after it has been mailed. If notice is sent by messenger, it shall be
     deemed to have been given on the day it is delivered.

18.  Amendments. This Agreement, or any term thereof, may be changed or waived
     only by a written amendment, signed by the party against whom enforcement
     of such change or waiver is sought.

19.  Delegation; Assignment. PFPC may assign its rights and delegate its duties
     hereunder to any majority-owned direct or indirect subsidiary of PFPC or of
     The PNC Financial Services Group, Inc., provided that PFPC gives the Fund
     30 days prior written notice of such assignment or delegation. In addition,
     PFPC may, in its sole discretion, engage subcontractors to perform any of
     the obligations contained in this Agreement to be performed by PFPC,
     provided, however, PFPC shall remain responsible for the acts or omissions
     of any such sub-contractors.

20.  Counterparts. This Agreement may be executed in two or more counterparts,
     each of which shall be deemed an original, but all of which together shall
     constitute one and the

                                                                              13


<PAGE>

     same instrument.

21.  Further Actions. Each party agrees to perform such further acts and execute
     such further documents as are necessary to effectuate the purposes hereof.

22.  Miscellaneous.

     (a)  Entire Agreement. This Agreement embodies the entire agreement and
          understanding between the parties and supersedes all prior agreements
          and understandings relating to the subject matter hereof, provided
          that the parties may embody in one or more separate documents their
          agreement, if any, with respect to delegated duties.

     (b)  No Changes that Materially Affect Obligations. Notwithstanding
          anything in this Agreement to the contrary, the Fund agrees not to
          make any modifications to its registration statement or adopt any
          policies which would affect materially the obligations or
          responsibilities of PFPC hereunder without the prior written approval
          of PFPC, which approval shall not be unreasonably withheld or delayed.

     (c)  Captions. The captions in this Agreement are included for convenience
          of reference only and in no way define or delimit any of the
          provisions hereof or otherwise affect their construction or effect.

     (d)  Governing Law. This Agreement shall be deemed to be a contract made in
          Delaware and governed by Delaware law, without regard to principles of
          conflicts of law.

     (e)  Partial Invalidity. If any provision of this Agreement shall be held
          or made invalid by a court decision, statute, rule or otherwise, the
          remainder of this Agreement shall not be affected thereby.

                                                                              14


<PAGE>

     (f)  Successors and Assigns. This Agreement shall be binding upon and shall
          inure to the benefit of the parties hereto and their respective
          successors and permitted assigns.

     (g)  No Representations or Warranties. Except as expressly provided in this
          Agreement, each party hereby disclaims all representations and
          warranties, express or implied, made to the other party or any other
          person, including, without limitation, any warranties regarding
          quality, suitability, merchantability, fitness for a particular
          purpose or otherwise (irrespective of any course of dealing, custom or
          usage of trade), of any services or any goods provided incidental to
          services provided under this Agreement. Each party disclaims any
          warranty of title or non-infringement except as otherwise set forth in
          this Agreement.

     (h)  Facsimile Signatures. The facsimile signature of any party to this
          Agreement shall constitute the valid and binding execution hereof by
          such party.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
     executed as of the day and year first above written.


                                        PFPC INC.

                                        By:

                                        Title:



                                        PIMCO NEW YORK MUNICIPAL INCOME FUND II

                                        By:

                                        Title:


                                                                              15


<PAGE>





                                                                              16


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(K)(2)
<SEQUENCE>15
<FILENAME>dex99k2.txt
<DESCRIPTION>ORG AND OFFERING EXPENSE REIMBURSE AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit k.2

                               ORGANIZATIONAL AND
                    OFFERING EXPENSES REIMBURSEMENT AGREEMENT

     AGREEMENT made this 18th day of June, 2002, by and between PIMCO NEW YORK
MUNICIPAL INCOME FUND II, a Massachusetts business trust (the "Fund"), and PIMCO
FUNDS ADVISORS LLC, a Delaware limited liability company (the "Adviser").

     WHEREAS, the Fund and the Adviser have separately entered into an
Investment Management Agreement dated June 18, 2002 (the "Management Agreement")
and a Fee Waiver Agreement dated June 18, 2002 (the "Waiver Agreement");

     NOW THEREFORE, in consideration of the mutual covenants hereinafter
contained, and in connection with the establishment and commencement of
operations of the Fund, it is hereby agreed by and between the parties hereto as
follows:

1. The Adviser agrees to reimburse the Fund for expenses incurred by the Fund
   in connection with the organization of the Fund if the initial public
   offering is not completed. The Adviser also agrees that if the initial
   public offering occurs, the Adviser will bear the organizational expenses
   and the costs of the initial offering of common shares of beneficial
   interest of the Fund ("shares") to the extent such organizational and
   offering expenses exceed $0.03 per share. The expenses for which the Fund
   is being reimbursed pursuant to this Agreement do not include (i)
   Management Fees payable by the Fund pursuant to the terms of the Management
   Agreement, as such may be modified by the Waiver Agreement, and (ii) any
   sales load or underwriting discount paid by shareholders.

2. This Agreement may be terminated only by the vote of (a) the Board of
   Trustees of the Fund, including the vote of the members of the Board who
   are not "interested persons" of the Fund within the meaning of the
   Investment Company Act of 1940, and (b) a majority of the outstanding
   voting securities of the Fund.

3. If any provision of this Agreement shall be held or made invalid by a court
   decision, statute, rule, or otherwise, the remainder shall not be thereby
   affected.

4. The Fund's Amended and Restated Agreement and Declaration of Trust is on
   file with the Secretary of State of the Commonwealth of Massachusetts. This
   Agreement is executed on behalf of the Fund by the Fund's officers as
   officers and not individually and the obligations imposed upon the Fund by
   this Agreement are not binding upon any of the Fund's Trustees, officers or
   shareholders individually but are binding only upon the assets and property
   of the Fund.

                                                                     Page 1 of 2

<PAGE>

         IN WITNESS WHEREOF, the Fund and the Adviser have caused this Agreement
to be executed on the day and year above written.

                                         PIMCO NEW YORK MUNICIPAL INCOME FUND II


                                         By:    /s/ Newton B. Schott, Jr.
                                                ------------------------------
                                         Name:  Newton B. Schott, Jr.
                                         Title: Vice President and Secretary




                                         PIMCO FUNDS ADVISORS LLC


                                         By:    /s/ Stephen J. Treadway
                                                ------------------------------
                                         Name:  Stephen J. Treadway
                                         Title: Managing Director

                                                                     Page 2 of 2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(K)(3)
<SEQUENCE>16
<FILENAME>dex99k3.txt
<DESCRIPTION>FEE WAIVER AGREEMENT NY MUNI INCOME II
<TEXT>
<PAGE>

                                                                     Exhibit k.3

                              FEE WAIVER AGREEMENT

                     PIMCO New York Municipal Income Fund II

     This Fee Waiver Agreement is executed as of June 18, 2002 by and between
PIMCO NEW YORK MUNICIPAL INCOME FUND II, a Massachusetts business trust (the
"Fund"), and PIMCO FUNDS ADVISORS LLC, a Delaware limited liability company(the
"Manager").

     WHEREAS, the Fund and the Manager have separately entered into an
Investment Management Agreement of even date herewith (the "Management
Agreement").

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, and in connection with the establishment and commencement of
operations of the Fund, it is hereby agreed by and between the parties hereto as
follows:

     1. Except as provided in paragraph 2, from the commencement of the Fund's
operations through June 30, 2002, and for each successive twelve-month period
ending on June 30th in each other calendar year set forth below, the Manager
agrees to waive a portion of the fees otherwise payable to it by the Fund under
the Management Agreement in the amounts determined by applying the following
annual rates to the average daily net assets of the Fund:

                                           Fee Waiver
                                           (at the following annual rates stated
                                           as a percentage of the Fund's average
        Period Ending June 30,             daily net assets)*:
        ----------------------             -------------------------------------
        2002**                             0.15%
        2003                               0.15%
        2004                               0.15%
        2005                               0.15%
        2006                               0.15%
        2007                               0.15%
        2008                               0.10%
        2009                               0.05%

        * Including net assets of the Fund attributable to any
        outstanding preferred shares.

        ** From the commencement of Fund operations through June 30,
        2002.

     2. Unless terminated sooner pursuant to paragraph 3, this Agreement shall
terminate on the earlier of (a) June 30, 2009 or (b) any termination of the
Management Agreement. The Manager's obligation to waive fees hereunder shall
apply only while this Agreement remains in effect. If this Agreement remains in
effect for less than a full period specified in paragraph 1, the amount to be
waived by the Manager shall be prorated for the partial period.

<PAGE>

     3. Except as provided in paragraph 2, this Agreement may be terminated only
by the affirmative vote of (a) the Board of Trustees of the Fund, including the
vote of the members of the Board who are not "interested persons" of the Fund
within the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations thereunder (the "1940 Act"), and (b) a "majority of the
outstanding voting securities" (as defined in the 1940 Act) of the Fund.

     4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder shall not be thereby
affected.

     5. 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 instrument is executed on behalf of the
Trustees of the Fund as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Fund.

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original.

             [The remainder of this page intentionally left blank.]

                                       -2-

<PAGE>

     IN WITNESS WHEREOF, PIMCO NEW YORK MUNICIPAL INCOME FUND II and PIMCO FUNDS
ADVISORS LLC have each caused this instrument to be signed in its behalf by its
duly authorized representative, all as of the day and year first above written.

                                         PIMCO NEW YORK MUNICIPAL INCOME FUND II


                                         By:    /s/ Newton B. Schott, Jr.
                                                --------------------------------
                                         Name:  Newton B. Schott, Jr.
                                         Title: Vice President and Secretary



                                         PIMCO FUNDS ADVISORS LLC


                                         By:    /s/ Stephen J. Treadway
                                                --------------------------------
                                         Name:  Stephen J. Treadway
                                         Title: Managing Director

                                       -3-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(K)(4)
<SEQUENCE>17
<FILENAME>dex99k4.txt
<DESCRIPTION>FEE WAIVER AGREEMENT PACIFIC INVEST MGMT CO
<TEXT>
<PAGE>

                                                                     Exhibit k.4

                              FEE WAIVER AGREEMENT

                     PIMCO New York Municipal Income Fund II

     This Fee Waiver Agreement is executed as of June 18, 2002 by and between
PIMCO FUNDS ADVISORS LLC, a Delaware limited liability company (the "Manager"),
and PACIFIC INVESTMENT MANAGEMENT COMPANY LLC, a Delaware limited liability
company (the "Portfolio Manager").

     WHEREAS, the Manager and the Portfolio Manager have separately entered into
a Portfolio Management Agreement of even date herewith (the "Portfolio
Management Agreement") pursuant to which the Manager has retained the Portfolio
Manager to provide investment advisory services on behalf of PIMCO New York
Municipal Income Fund II (the "Fund").

     NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, and in connection with the establishment and commencement of
operations of the Fund, it is hereby agreed by and between the parties hereto as
follows:

     1. Except as provided in paragraph 2, from the commencement of the Fund's
operations through June 30, 2002, and for each successive twelve-month period
ending on June 30th in each other calendar year set forth below, the Portfolio
Manager agrees to waive a portion of the fees otherwise payable to it by the
Manager under the Portfolio Management Agreement in the amounts determined by
applying the following annual rates to the average daily net assets of the Fund:

                                        Fee Waiver
                                        (at the following annual rates stated
                                        as a percentage of the Fund's average
        Period Ending June 30,          daily net assets)*:
        ----------------------          --------------------------------------
        2002**                          0.24%
        2003                            0.24%
        2004                            0.24%
        2005                            0.24%
        2006                            0.24%
        2007                            0.24%
        2008                            0.10%
        2009                            0.05%

        * Including net assets of the Fund attributable to any
        outstanding preferred shares.

        ** From the commencement of Fund operations through June 30,
        2002.

     2. Unless terminated sooner pursuant to paragraph 3, this Agreement shall
terminate on the earlier of (a) June 30, 2009, (b) any termination of the
Portfolio Management Agreement

<PAGE>

or (c) any termination of the Fee Waiver Agreement, of even date herewith,
between the Manager and the Fund. The Portfolio Manager's obligation to waive
fees hereunder shall apply only while this Agreement remains in effect. If this
Agreement remains in effect for less than a full period specified in paragraph
1, the amount to be waived by the Portfolio Manager shall be prorated for the
partial period.

     3. Except as provided in paragraph 2, this Agreement may be terminated or
amended only by written agreement between the Manager and the Portfolio Manager.

     4. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder shall not be thereby
affected.

     This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original.

             [The remainder of this page intentionally left blank.]

                                       -2-

<PAGE>

     IN WITNESS WHEREOF, PIMCO FUNDS ADVISORS LLC and PACIFIC INVESTMENT
MANAGEMENT COMPANY LLC have each caused this instrument to be signed in its
behalf by its duly authorized representative, all as of the day and year first
above written.

                                            PIMCO FUNDS ADVISORS LLC


                                            By:    /s/ Stephen J. Treadway
                                                   -----------------------------
                                            Name:  Stephen J. Treadway
                                            Title: Managing Director



                                            PACIFIC INVESTMENT MANAGEMENT
                                                  COMPANY LLC


                                            By:    /s/ Chris P. Dialynas
                                                   -----------------------------
                                            Name:  Chris P. Dialynas
                                            Title: Managing Director

                                        3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(L)
<SEQUENCE>18
<FILENAME>dex99l.txt
<DESCRIPTION>OPINION AND CONSENT OF ROPES & GRAY
<TEXT>
<PAGE>

                                                                      Exhibit l.

                                  Ropes & Gray
                            ONE INTERNATIONAL PLACE
                             BOSTON, MA 02110-2624
                             PHONE: (617) 951-7000
                              FAX: (617) 951-7050



                                  June 24, 2002


PIMCO New York Municipal Income Fund II
c/o PIMCO Funds Advisors LLC
1345 Avenue of the Americas
New York, New York 10105

Ladies and Gentlemen:

        We have acted as counsel to PIMCO New York Municipal Income Fund II (the
"Fund") in connection with the Registration Statement of the Fund on Form N-2
(File No. 333-86284) under the Securities Act of 1933 and the Investment Company
Act of 1940 (File No. 811-21078) (the "Registration Statement") as amended (the
"Acts"), with respect to certain of its common shares of beneficial interest
(the "Common Shares"). The Common Shares are to be sold pursuant to an
Underwriting Agreement substantially in the form filed as an exhibit to the
Registration Statement (the "Underwriting Agreement") among the Fund, PIMCO
Funds Advisors LLC, UBS Warburg LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, A.G. Edwards & Sons, Inc., First Union Securities, Inc.,
Prudential Securities Incorporated, Quick & Reilly, Inc. A FleetBoston Financial
Company, Raymond James & Associates, Inc., RBC Dain Rauscher Incorporated,
Advest, Inc. and Fahnestock & Co. Inc.

        We have examined the Fund's Agreement and Declaration of Trust on file
in the office of the Secretary of State of The Commonwealth of Massachusetts, as
amended (the "Declaration of Trust"), and the Fund's Bylaws, and are familiar
with the actions taken by the Fund in connection with the issuance and sale of
the Common Shares. We have also examined such other documents and records as we
have deemed necessary for the purposes of this opinion.

<PAGE>

PIMCO New York Municipal Income Fund II -2-                        June 24, 2002

       Based upon the foregoing, we are of the opinion that:

       1.   The Fund is a duly organized and validly existing unincorporated
            voluntary association with transferable shares under and by
            virtue of the laws of The Commonwealth of Massachusetts.

       2.   The Common Shares have been duly authorized and, when issued and
            paid for in accordance with the Underwriting Agreement, will be
            validly issued, fully paid and, except as described in the following
            paragraph, nonassessable by the Fund.

       The Fund is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Declaration of Trust disclaims shareholder liability for acts or
obligations of the Fund and requires that a notice of such disclaimer be given
in each note, bond, contract, instrument, certificate or undertaking entered
into or executed by the Fund or its Trustees. The Declaration of Trust provides
for indemnification out of the property of the Fund for all loss and expense of
any shareholder of the Fund held personally liable solely by reason of his being
or having been a shareholder. 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.

       We understand that this opinion is to be used in connection with the
registration of the Common Shares for offering and sale pursuant to the
Securities Act of 1933, as amended. We consent to the filing of this opinion
with and as part of the Registration Statement and to the references to our firm
in the related prospectus under the captions "Tax matters" and "Legal matters"
in the Prospectus contained in the Registration Statement.

                                           Very truly yours

                                           /s/ Ropes & Gray


                                           Ropes & Gray

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(N)
<SEQUENCE>19
<FILENAME>dex99n.txt
<DESCRIPTION>CONSENT OF PRICEWATERHOUSECOOPERS LLP
<TEXT>
<PAGE>

                                                                      Exhibit n.

                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in this Registration Statement on Form N-2 of our
report dated June 20, 2002, relating to the statement of assets and liabilities
of PIMCO New York Municipal Income Fund II as of June 19, 2002 and the related
statement of operations for the one day then ended. We also consent to the
reference to us under the heading "Independent Accountants" in such Registration
Statement.

PricewaterhouseCoopers LLP
New York, New York
June 24, 2002

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(P)
<SEQUENCE>20
<FILENAME>dex99p.txt
<DESCRIPTION>NY MUNI INCOME FUND II SUBSCRIPTION AGREEMNT
<TEXT>
<PAGE>

                                                                      Exhibit p.

                     PIMCO NEW YORK MUNICIPAL INCOME FUND II

                             Subscription Agreement

         This Agreement made this 18th day of June, 2002, by and between PIMCO
New York Municipal Income Fund II, a Massachusetts business trust (the "Fund"),
and PIMCO Funds Advisors LLC, a Delaware limited liability company (the
"Subscriber");

         WITNESSETH:

         WHEREAS, the Fund has been formed for the purposes of carrying on
business as a closed-end management investment company; and

         WHEREAS, the Subscriber has been selected by the Fund's Board of
Trustees to serve as investment manager to the Fund; and

         WHEREAS, the Subscriber wishes to subscribe for and purchase, and the
Fund wishes to sell to the Subscriber, 6,981 common shares of beneficial
interest, par value $0.00001 (the "Shares"), for a purchase price of $14.325 per
share;

         NOW THEREFORE, IT IS AGREED:

         1. The Subscriber subscribes for and agrees to purchase from the Fund
the Shares for a purchase price of $14.325 per Share and an aggregate purchase
price of $100,002.83. Subscriber agrees to make payment for the Shares at such
time as demand for payment may be made by an officer of the Fund.

         2. The Fund agrees to issue and sell said Shares to Subscriber promptly
upon its receipt of the aggregate purchase price.

         3. To induce the Fund to accept its subscription and issue the Shares
subscribed for, the Subscriber represents that it is informed as follows:

            (a) That the Shares being subscribed for have not been and will not
be registered under the Securities Act of 1933 (the "Securities Act"), or
registered or qualified under the securities laws of any state;

            (b) That the Shares will be sold by the Fund in reliance on an
exemption from the registration requirements of the Securities Act;

            (c) That the Fund's reliance upon an exemption from the registration
requirements of the Securities Act is predicated in part on the representations
and agreements contained in this Subscription Agreement;

<PAGE>

            (d) That when issued, the Shares will be "restricted securities" as
defined in paragraph (a)(3) of Rule 144 of the General Rules and Regulations
under the Securities Act ("Rule 144") and cannot be sold or transferred by
Subscriber unless they are subsequently registered under the Securities Act or
unless an exemption from such registration is available; and

            (e) That there do not appear to be any exemptions from the
registration provisions of the Securities Act available to the Subscriber for
resale of the Shares. In the future, certain exemptions may possibly become
available, including an exemption for limited sales in accordance with the
conditions of Rule 144.

         The Subscriber understands that a primary purpose of the information
acknowledged in subparagraphs (a) through (e) above is to put the Subscriber on
notice as to restrictions on the transferability of the Shares.

         4. To further induce the Fund to accept its subscription and issue the
Shares subscribed for, the Subscriber:

            (a) Represents and warrants that the Shares subscribed for are being
and will be acquired for investment for its own account and not on behalf of any
other person or persons and not with a view to, or for sale in connection with,
any public distribution thereof; and

            (b) Agrees that any certificates representing the Shares subscribed
for may bear a legend substantially in the following form:

            The shares represented by this certificate have been acquired for
            investment and have not been registered under the Securities Act of
            1933 or any other federal or state securities law. These shares may
            not be offered for sale, sold or otherwise transferred unless
            registered under said securities laws or unless some exemption from
            registration is available.

            (c) Consents, as the sole holder of the Fund's common shares of
beneficial interest and pursuant to Section 23(b)(2) of the Investment Company
Act of 1940, to the issuance by the Fund of common shares of beneficial interest
at a price per share as set forth in the Underwriting Agreement relating to the
public offering of the common shares of beneficial interest of the Fund.

         5. This Subscription Agreement and all of its provisions shall be
binding upon the legal representatives, heirs, successors and assigns of the
parties hereto. This Subscription Agreement may be signed in one or more
counterparts, each of which shall be deemed to be an original.

                                       -2-

<PAGE>

     6. The Fund's Agreement and Declaration of Trust, as amended, is on file
with the Secretary of State of The Commonwealth of Massachusetts. This Agreement
is executed on behalf of the Fund by an officer or Trustee of the Fund as an
officer or Trustee, as the case may be, and not individually, and the
obligations imposed upon the Fund by this Subscription Agreement are not binding
upon any of the Fund's Trustees, officers or shareholders individually but are
binding only upon the assets and property of the Fund.

     IN WITNESS WHEREOF, this Subscription Agreement has been executed by the
parties hereto as of the day and date first above written.

                                      PIMCO NEW YORK MUNICIPAL INCOME FUND II


                                      By: /s/ Newton B. Schott, Jr.
                                          --------------------------------------
                                      Name:  Newton B. Schott, Jr.
                                      Title: Vice President and Secretary


                                      PIMCO FUNDS ADVISORS LLC


                                      By: /s/ Stephen J. Treadway
                                          --------------------------------------
                                      Name:  Stephen J. Treadway
                                      Title: Managing Director

                                       -3-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(R)(1)
<SEQUENCE>21
<FILENAME>dex99r1.txt
<DESCRIPTION>CODE OF ETHICS OF REGISTRANT
<TEXT>
<PAGE>

                                                                     Exhibit r.1

                         PIMCO MUNICIPAL INCOME FUND II
                    PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
                     PIMCO NEW YORK MUNICIPAL INCOME FUND II


                                 CODE OF ETHICS

                             Effective June 18, 2002

==============================================================================

                                  INTRODUCTION

                                 Fiduciary Duty

         This Code of Ethics is based on the principle that you, as a trustee or
officer of PIMCO Municipal Income Fund II, PIMCO California Municipal Income
Fund II and/or PIMCO New York Municipal Income Fund II (each a Fund), owe a
fiduciary duty to the shareholders (the Shareholders) of the relevant Fund.
Accordingly, you must avoid activities, interests and relationships that might
interfere or appear to interfere with making decisions in the best interests of
our Shareholders.

         At all times, you must:

         1.       Place the interests of our Shareholders first. In other words,
                  as a fiduciary you must scrupulously avoid serving your own
                  personal interests ahead of the interests of our Shareholders.
                  You may not cause the Fund to take action, or not to take
                  action, for your personal benefit rather than the benefit of
                  the Shareholders. For example, you would violate this Code if
                  you caused the Fund to purchase a Security you owned for the
                  purpose of increasing the price of that Security. You would
                  also violate this Code if you made a personal investment in a
                  Security that might be an appropriate investment for the Fund
                  without first considering the Security as an investment for
                  the Fund.

         2.       Conduct all of your personal Securities transactions in full
                  compliance with this Code. The Fund encourages you and your
                  family to develop personal investment programs. However, you
                  must not take any action in connection with your personal
                  investments that could cause even the appearance of unfairness
                  or impropriety. Accordingly, you must comply with the policies
                  and procedures set forth in this Code under the heading
                  Personal Securities Transactions. In addition, you must comply
                  with all other applicable laws and regulations including those
                  concerning insider trading. Doubtful situations should be
                  resolved against your personal trading.

         3.       Avoid taking inappropriate  advantage of your position. The
                  receipt of investment opportunities, gifts or gratuities from
                  persons seeking business with the Fund, Shareholder or
                  affiliate could call into question the independence of your
                  business judgment. Accordingly, you must comply



<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 2

                  with the policies and procedures set forth in this Code under
                  the heading Fiduciary Duties. Doubtful situations should be
                  resolved against your personal interest.

                                   Application

     Certain of the officers and Trustees of the Fund are officers of PIMCO
Funds Advisors LLC (PFA), the Fund's investment adviser, Pacific Investment
Management Company LLC (PIMCO), the Fund's portfolio manager, and/or PIMCO Funds
Distributors LLC (PFD), a broker-dealer that is a wholly-owned subsidiary of
PFA. Subject to the oversight of PFA, PIMCO reviews and determines investment
policies for the Fund and manages the day-to-day investment affairs of the Fund,
including selecting securities to be purchased, held and sold, and placing
orders for portfolio transactions. PFA, PIMCO and PFD each has its own Code of
Ethics pursuant to Rule 17j-1 under the Investment Company Act of 1940, as
amended (the Act). The Codes of Ethics of PFA and PIMCO have been or will be
approved by the Trustees of the Fund, including a majority of the independent
Trustees (as defined in Appendix VI). Any Trustee or officer of the Fund or any
person who would otherwise be subject to this Code, who is subject to the Code
of Ethics of PFA or PIMCO, and who complies with such Code, shall not be subject
to the provisions of this Code. The Code of Ethics of PFD is attached to this
Code as Appendix VII and its provisions are incorporated herein. Any Trustee or
officer of the Fund or any person who would otherwise be subject to this Code,
who is subject to the Code of Ethics of PFD, and who complies with such Code,
shall be subject to the provisions of the Code of Ethics of PFD incorporated
herein, and not to any other provisions of this Code.

                                   Appendices

     The following appendices are attached to this Code and are a part of this
Code:

            I.    Form for Preclearance of Securities transactions.

           II.    Form for Initial and Annual Report of Personal Securities
                  holdings.

          III.    Form for report of Personal Securities Transactions/Brokerage
                  Accounts Report.

           IV.    Form for Acknowledgment of Receipt of this Code.

            V.    Form for Annual Certification of Compliance with this Code.

           VI.    Definitions.

          VII.    Code of Ethics of PIMCO Funds Distributors LLC.

                                       -2-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 3

                                    Questions

         Questions regarding this Code should be addressed to a Compliance
Officer. As of the effective date of this Code, the Compliance Officers are
Newton B. Schott, Jr., Frank Poli and Deborah Brennan. The Compliance Committee
is comprised of the Compliance Officers and Stephen J. Treadway.


                        PERSONAL SECURITIES TRANSACTIONS

                               Trading in General

         You may not engage, and you may not permit any other person or entity
to engage, in any purchase or sale of a Security (other than an Exempt Security)
in which you have, or by reason of the transaction will acquire, Beneficial
Ownership, unless (i) the transaction is an Exempt Transaction or (ii) you have
complied with the procedures set forth under Preclearance Procedures.

         Securities

         The following are Securities:

         Any note, stock, treasury stock, bond, debenture, evidence of
indebtedness, certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting-trust certificate,
certificate of deposit for a security, fractional undivided interest in oil,
gas, or other mineral rights, any put, call, straddle, option or privilege on
any security (including a certificate of deposit) or on any group or index of
securities (including any interest therein or based on the value thereof), or
any put, call, straddle, option or privilege entered into on a national
securities exchange relating to foreign currency, or, in general, any interest
or instrument commonly known as a security, or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any security.

         The following are not Securities:

         Commodities, futures and options traded on a commodities exchange,
including currency futures. However, securities futures1 and futures and options
on any group or index of Securities (as defined in the Act) are Securities.

         Purchase or Sale of a Security

         The purchase or sale of a Security includes, among other things, the
writing of an option to purchase or sell a Security.

         Exempt Securities

         The following are Exempt Securities:

- ---------------------
/(1)/  A security future is a contract of sale for future delivery of a single
       security or a narrow-based security index.

                                       -3-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 4


         1.       Direct obligations of the Government of the United States.

         2.       Bankers' acceptances, bank certificates of deposit, commercial
                  paper, and high quality short-term debt instruments (defined
                  as any instrument that has a maturity at issuance of less than
                  366 days and that is rated in one of the two highest rating
                  categories by a Nationally Recognized Statistical Rating
                  Organization), including repurchase agreements.

         3.       Shares of registered open-end investment companies.

         Beneficial Ownership

         The following section is designed to give you a practical guide with
respect to Beneficial Ownership. However, for purposes of this Code, Beneficial
Ownership shall be interpreted in the same manner as it would be under Rule
16a-1(a)(2) under the Securities Exchange Act of 1934 (the "Exchange Act") in
determining whether a person is the beneficial owner of a security for purposes
of Section 16 of the Exchange Act and the rules and regulations thereunder.

         You are considered to have Beneficial Ownership of Securities if you
have or share a direct or indirect Pecuniary Interest in the Securities.

         You have a Pecuniary Interest in Securities if you have the
opportunity, directly or indirectly, to profit or share in any profit derived
from a transaction in the Securities.

         The following are examples of an indirect Pecuniary Interest in
Securities:

         1.       Securities held by members of your immediate family sharing
                  the same household; however, this presumption may be rebutted
                  by convincing evidence that profits derived from transactions
                  in these Securities will not provide you with any economic
                  benefit.

                  Immediate family means any child, stepchild, grandchild,
                  parent, stepparent, grandparent, spouse, sibling,
                  mother-in-law, father-in-law, son-in-law, daughter-in-law,
                  brother-in-law, or sister-in-law, and includes any adoptive
                  relationship.

         2.       Your interest as a general partner in Securities held by a
                  general or limited partnership.

         3.       Your interest as a manager-member in the Securities held by a
                  limited liability company.

         You do not have an indirect Pecuniary Interest in Securities held by a
corporation, partnership, limited liability company or other entity in which you
hold an equity interest, unless you are a controlling equityholder or you have
or share investment control over the Securities held by the entity.

                                       -4-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 5


         The following circumstances constitute Beneficial Ownership by you of
Securities held by a trust:

         1.       Your ownership of Securities as a trustee where either you or
                  members of your immediate family have a vested interest in the
                  principal or income of the trust.

         2.       Your ownership of a vested beneficial interest in a trust.

         3.       Your status as a settlor of a trust, unless the consent of
                  all of the  beneficiaries  is  required in
                  order for you to revoke the trust.

         Exempt Transactions

         The following are Exempt Transactions:

         1.       Any transaction in Securities in an account over which you do
                  not have any direct or indirect influence or control. There is
                  a presumption that you can exert some measure of influence or
                  control over accounts held by members of your immediate family
                  sharing the same household, but this presumption may be
                  rebutted by convincing evidence.

         2.       Purchases of Securities under dividend reinvestment plans.

         3.       Purchases of Securities by exercise of rights issued to the
                  holders of a class of Securities pro rata, to the extent they
                  are issued with respect to Securities of which you have
                  Beneficial Ownership.

         4.       Acquisitions or dispositions of Securities as the result of a
                  stock dividend, stock split, reverse stock split, merger,
                  consolidation, spin-off or other similar corporate
                  distribution or reorganization applicable to all holders of a
                  class of Securities of which you have Beneficial Ownership.

         5.       Subject to the restrictions on participation in private
                  placements set forth below under Private Placements,
                  acquisitions or dispositions of Securities of a private
                  issuer. A private issuer is an issuer which has no outstanding
                  publicly traded Securities, and no outstanding Securities
                  which are convertible into or exchangeable for, or represent
                  the right to purchase or otherwise acquire, publicly traded
                  Securities. However, you will have Beneficial Ownership of
                  Securities held by a private issuer whose equity Securities
                  you hold, unless you are not a controlling equityholder and do
                  not have or share investment control over the Securities held
                  by the entity.

         6.       Any transaction in Securities (other than Exempt Securities)
                  by a Trustee of the Fund who is not an interested person (as
                  defined in Appendix VI) of the Fund within the meaning of
                  Section 2(a)19 of the Act, so long as the Trustee did not know
                  and, in the ordinary course of fulfilling his or her official

                                       -5-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 6


                  duties as a Trustee, should not have known, that during the
                  15-day period immediately preceding or after the date of the
                  transaction, such Securities were purchased or sold, or
                  considered for purchase or sale, on behalf of the Fund.

         7.       Transactions in Securities traded within the preceding fifteen
                  days for the Fund provided that (i) the trading for the Fund
                  has been completed and (ii) the trade in which the Trustee or
                  officer has or acquires Beneficial Ownership is not contrary
                  to the trade done for the Fund.

         8.       Such other classes of transactions as may be exempted from
                  time to time by the Compliance Committee based upon a
                  determination that the transactions do not involve any
                  realistic possibility of a violation of Rule 17j-1 under the
                  Investment Company Act of 1940, as amended. The Compliance
                  Committee may exempt designated classes of transactions from
                  any of the provisions of this Code except the provisions set
                  forth below under Reporting.

         9.       Such other specific transactions as may be exempted from time
                  to time by a Compliance Officer. On a case-by-case basis when
                  no abuse is involved, a Compliance Officer may exempt a
                  specific transaction from any of the provisions of this Code
                  except the provisions set forth below under Reporting.

         Additional Exempt Transactions

         The following classes of transactions have been designated as Exempt
Transactions by the Compliance Committee:

         10.      Purchases or sales of Securities which are not eligible for
                  purchase or sale by the Fund.

         11.      Except for Designated Equity Securities, all equity Securities
                  or options, warrants or other rights to equity Securities.

                  A Designated Equity Security means any equity Security,
                  option, warrant or other right to an equity Security
                  designated as such by a Compliance Officer, after receiving
                  notification that said Security is being considered for
                  purchase or sale by or on behalf of the Fund.

         12.      If you are not an Investment Person (as defined in Appendix
                  VI), short sales of any Securities otherwise permitted
                  hereunder or puts, calls, or options where the underlying
                  amount of Securities controlled is an amount otherwise
                  permitted hereunder.

                                       -6-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 7

                                     CAUTION

         The transactions that are classified as exempt may change from time to
time. Accordingly, you may purchase Securities in an Exempt Transaction, only to
find that you cannot sell them later in an Exempt Transaction. In that case, you
will be able to sell them only if you preclear the sale in compliance with the
procedures set forth in the Code.

         Circumstances Requiring Preclearance

         If you have (or wish to acquire) Beneficial Ownership of Securities
which are not Exempt Securities and which cannot be sold in Exempt Transactions,
such Securities may be sold (or acquired) in compliance with the procedures set
forth below under Preclearance Procedures.

         The Compliance Committee may designate as Exempt Transactions purchases
and sales of Securities which are purchased or sold in compliance with the
procedures set forth below under Preclearance Procedures.

         Preclearance Procedures

         If a Securities transaction requires preclearance:

         1.    The Securities may not be purchased or sold if at the time of
               preclearance there is a pending buy or sell order on behalf of
               the Fund in the same Security or an equivalent Security or if you
               knew or should have known that the Fund would be trading in that
               security or an equivalent Security on the same day.

               An equivalent Security of a given Security is: (i) a Security
               issuable upon exercise, conversion or exchange of the given
               Security, or (ii) a Security exercisable to purchase, convertible
               into or exchangeable for the given Security, or (iii) a Security
               otherwise representing an interest in or based on the value of
               the given Security.

         2.    The Securities may not be purchased or sold during the period
               which begins seven days before and ends seven days after the day
               on which the Fund trades in the same Security, or an equivalent
               Security; except that you may, if you preclear the transaction,
               (i) trade same way to the Fund after its trading is completed or
               (ii) trade opposite way to the Fund before its trading is
               commenced.

               If you preclear a Securities transaction and trade same way to
               the Fund before its trading is commenced, the transaction is not
               a violation of this Code unless you knew or should have known
               that the Fund would be trading in that Security or an equivalent
               Security within seven days after your trade.

                                       -7-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 8

         3.    The Securities may be purchased or sold only if you have asked a
               Compliance Officer to preclear the purchase or sale, the
               Compliance Officer has given you preclearance in writing, and the
               purchase or sale is executed by the close of business on the day
               preclearance is given. Preclearance will not be given unless a
               determination is made that the purchase or sale complies with
               this Code and the foregoing restrictions. The form for requesting
               preclearance is attached to this Code as Appendix I.

                            Initial Public Offerings

         If you are an Investment Person of the Fund, its investment adviser or
any sub-adviser, you may not acquire Beneficial Ownership of any Securities in
an Initial Public Offering, unless you have received the prior written approval
of a Compliance Officer.

         For the purposes hereof, Initial Public Offering means an offering of
securities registered under the Securities Act of 1933 (the "Securities Act"),
the issuer of which, immediately before the registration, was not subject to the
reporting requirements of Sections 13 or 15(d) of the Exchange Act.

                               Private Placements

         If you are an Investment Person of the Fund, you may not acquire
Beneficial Ownership of any Securities in a Private Placement, unless you have
received the prior written approval of the Compliance Committee. Approval will
be not be given unless a determination is made that the investment opportunity
should not be reserved for the Fund, and that the opportunity to invest has not
been offered to you by virtue of your position.

         For the purposes hereof, Private Placement means an offering that is
exempted from registration under the Securities Act pursuant to Section 4(2) or
Section 4(6) or pursuant to Rule 504, 505 or 506 under the Securities Act.

         If you have acquired Beneficial Ownership of Securities in a Private
Placement, you must disclose your investment when you play a part in any
consideration of an investment by the Fund in the issuer of the Securities, and
any decision to make such an investment must be independently reviewed by a
portfolio manager who does not have Beneficial Ownership of any Securities of
the issuer.

                           Short-Term Trading Profits

         If you are an Investment Person of the Fund, you may not profit from
the purchase and sale, or sale and purchase, within 60 calendar days, of the
same (or equivalent) Securities (other than Exempt Securities) of which you have
Beneficial Ownership. You are prohibited from transactions involving puts,
calls, straddles, options and/or short sales except for Exempt Transactions,
transactions in Exempt

                                       -8-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 9

Securities or transactions approved by a Compliance Officer. Any such short-term
trade must be unwound, or, if that is not practical, the profits must be
contributed to a charitable organization.

         You are considered to profit from a short-term trade if Securities of
which you have Beneficial Ownership are sold for more than their purchase price,
even though the Securities purchased and the Securities sold are held of record
or beneficially by different persons or entities.

                                    Reporting

         Use of Broker-Dealers

         Unless you are an independent Trustee, you may not engage, and you may
not permit any other person or entity to engage, in any purchase or sale of
publicly traded Securities (other than Exempt Securities) of which you have, or
by reason of the transaction will acquire, Beneficial Ownership, except through
a registered broker-dealer.

         Reporting of Transactions and Brokerage Accounts

         Unless you are an independent Trustee, you must report your brokerage
accounts and all Securities transactions that are not Exempt Transactions or
transactions in Exempt Securities. To satisfy these requirements, (i) you must
cause each registered broker-dealer who maintains an account for Securities of
which you have Beneficial Ownership to provide to a Compliance Officer
hereunder, within 10 days of the end of each calendar quarter, duplicate copies
of: (a) confirmations of all transactions in the account and (b) periodic
statements for the account and (ii) you must report (on the form attached as
Appendix III) to a Compliance Officer hereunder, within 10 days of the
occurrence, the opening of any brokerage account and all transactions effected
without the use of a registered broker-dealer in Securities (other than Exempt
Securities) of which you have Beneficial Ownership.

         The confirmations and statements required by (i)(a) and (i)(b) above
must in the aggregate provide all of the information required by the Personal
Securities Transactions/Brokerage Account Report attached to this Code as
Appendix III. If they do not, you must complete and submit a Personal Securities
Transactions/Brokerage Accounts Report within 10 days of the end of each
calendar quarter.

         Initial and Annual Reports

         Unless you are an independent Trustee of the Fund, the investment
adviser, any sub-adviser or the principal underwriter of the Fund, you must
disclose your holdings of all Securities (other than Exempt Securities) of which
you have Beneficial Ownership no later than 10 days after becoming an Access
Person, and annually thereafter. The form for this purpose is attached to this
Code as Appendix II.

         Independent Trustees

         If you are an independent Trustee, you do not need to provide the
initial, periodic and annual reports described above but you must provide a
quarterly report of any transaction in Securities (other

                                       -9-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 10

than Exempt Securities) of which you had, or by reason of the transaction
acquired, Beneficial Ownership, and as to which you knew, or in the ordinary
course of fulfilling your official duties as a Trustee should have known, that
during the 15-day period immediately preceding or after the date of the
transaction, such Securities were purchased or sold, or considered for purchase
or sale, on behalf of the Fund. The report must be provided to a Compliance
Officer hereunder within 10 days after the end of each calendar quarter. The
form for this purpose is attached to this Code as Appendix III.

         Disclaimer

         Anyone filing a report required hereunder may disclaim Beneficial
Ownership of any Security listed thereon.

                                FIDUCIARY DUTIES

                                      Gifts

         You may not accept any investment opportunity, gift, gratuity or other
thing of more than nominal value, from any person or entity that does business,
or desires to do business, with the Fund or any affiliate thereof. You may
accept gifts from a single giver so long as their aggregate annual value does
not exceed $100, and you may attend business meals, sporting events and other
entertainment events at the expense of a giver, so long as the expense is
reasonable and both you and the giver are present.

                              Service as a Director

         Unless you are an independent Trustee, you may not serve on the board
of directors or other governing board of a publicly traded company, unless you
have received the prior written approval of the Compliance Committee. Approval
will be not be given unless a determination is made that your service on the
board would be consistent with the interests of the Fund. If you are permitted
to serve on the board of a publicly traded entity, you will be isolated from
those portfolio employees who make investment decisions with respect to the
securities of that entity, through a "Chinese Wall" or other procedures.

                                   COMPLIANCE

                             Certificate of Receipt

         You are required to acknowledge receipt of your copy of this Code. A
form for this purpose is attached to this Code as Appendix IV.

                            Certificate of Compliance

         Unless you are an independent Trustee, you are required to certify upon
commencement of your election as an officer and/or Trustee or the effective date
of this Code, whichever occurs later, and annually thereafter, that you have
read and understand this Code and recognize that you are subject to this Code.
Each annual certificate will also state that you have complied with the
requirements of this

                                      -10-

<PAGE>

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II Code of Ethics
Page 11

Code during the prior year, and that you have disclosed, reported, or caused to
be reported all holdings required hereunder and all transactions during the
prior year in Securities of which you had or acquired Beneficial Ownership. A
form for this purpose is attached to this Code as Appendix V.

                                Remedial Actions

         If you violate this Code, you are subject to remedial actions, which
may include, but are not limited to, disgorgement of profits, imposition of a
substantial fine, demotion, suspension or termination.

                               Reports to Trustees

         Reports of Material Remedial Action

         The Trustees of the Funds will be informed on a timely basis of each
material remedial action taken in response to a violation of this Code. For this
purpose, a material remedial action will include any action that has a
significant financial effect on the violator, such as disgorgement of profits,
imposition of a substantial fine, demotion, suspension or termination.

         Annual Reports

         Management of the Fund, the investment adviser, each sub-adviser, and
the principal underwriter (if any) of the Fund will report in writing annually
to the Trustees of the Fund with regard to efforts to ensure compliance by the
officers and employees of PFA and PIMCO with their fiduciary obligations to
their advisory clients.

         The annual report will, at a minimum:

         1.    Describe any issues arising under the Code of Ethics or
               procedures since the last report to the Board, including, but not
               limited to, information about material violations of the Code or
               procedures and sanctions imposed in response to the material
               violations; and

         2.    Certify that the Fund, investment adviser, each sub-adviser, or
               principal underwriter, as the case may be, has adopted procedures
               reasonably necessary to prevent Access Persons from violating the
               Code.

                                      -11-

<PAGE>

                                                                      Appendix I

                         PIMCO MUNICIPAL INCOME FUND II
                    PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
                     PIMCO NEW YORK MUNICIPAL INCOME FUND II

                   PRECLEARANCE OF SECURITIES TRANSACTION FORM

================================================================================

(1)      Name of employee requesting authorization:    _________________________

(2)      If different from #1, name of the account
         where the trade will occur:                   _________________________

(3)      Relationship of (2) to (1):                   _________________________

(4)      Name of firm at which the account is held:    _________________________

(5)      Name of Security and call symbol:             _________________________

(6)      Maximum number of shares or units to be
         purchased or sold or amount of bond:          _________________________

(7)      Check those that are applicable:

         ___ Purchase   ___ Sale   ___ Market Order   ___ Limit Order (Price of
                                                          Limit Order: _____)


If the answer to any of the following questions is made by checking the answer
in Column I, the Compliance Officer may have to reject the proposed transaction:

                                                             Column I  Column II

(8)      Do you possess material nonpublic
         information regarding the security or the
         issuer of the security?/1/                           ___ Yes    ___ No

(9)      To your knowledge, are the securities or
         "equivalent securities" subject to a pending buy
         or sell order by the Fund?                           ___ Yes    ___ No


(10)     To your knowledge, are there any
         outstanding purchase or sell orders for
         this security or any equivalent security by the
         Fund?                                                ___ Yes    ___ No

(11)     To your knowledge, are the securities or

_______________________
/1/ Please note that employees and Trustees generally are not permitted to
acquire or sell securities when they possess material nonpublic information
regarding the security or the issuers of the security.

<PAGE>

PCIF
Preclearance Securities
   Transaction Form
Page 2

         equivalent securities being considered for
         purchase or sale by the Fund?                      ___ Yes     ___ No


                                                           Column I   Column II

(12)     If you are an investment person, are the
         securities being acquired in an initial
         public offering?/2/                                ___ Yes     ___ No

(13)     If you are an investment person, are the
         securities being acquired in a private
         placement?/2/                                      ___ Yes     ___ No

(14)     Has the Fund purchased or sold these
         securities or equivalent securities within
         the past seven calendar days or do you expect
         the Fund to purchase or sell these securities
         or equivalent securities within seven
         calendar days of your purchase or sale?            ___ Yes     ___ No

I have read the Code of Ethics for the Fund dated June 18, 2002, within the
prior 12 months and believe that the proposed trade fully complies with the
requirements of the Code.


                                               _________________________________
                                                      Employee Signature


                                               _________________________________
                                                      Print Name


                                               _________________________________
                                                      Date Submitted


Authorized by:    ___________________

Date:             ___________________

__________________
/2/ Please see a Compliance Officer if you are not sure whether you are an
Investment Person.

                                       -2-

<PAGE>

                                                                     Appendix II

                         PIMCO MUNICIPAL INCOME FUND II
                    PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
                     PIMCO NEW YORK MUNICIPAL INCOME FUND II


                          INITIAL AND ANNUAL REPORT OF
                          PERSONAL SECURITIES HOLDINGS

     In accordance with the Code of Ethics, please provide a list of all
Securities (other than Exempt Securities) of which you or any account in which
you have a Pecuniary Interest has Beneficial Ownership and all Securities (other
than Exempt Securities) in non-client accounts for which you make investment
decisions. This includes not only securities held by brokers, but also
Securities held at home, in safe deposit boxes, or by an issuer.

(1)  Name of employee:                             ____________________________

(2)  If different than #1, name of the person
     in whose name the account is held:            ____________________________

(3)  Relationship of (2) to (1):                   ____________________________

(4)  Broker(s) at which Account is Maintained:     ____________________________

                                                   ____________________________

                                                   ____________________________

                                                   ____________________________

(5)  Account Number(s):                            ____________________________

                                                   ____________________________

                                                   ____________________________

                                                   ____________________________

(6)  Telephone number(s) of Broker:                ____________________________

                                                   ____________________________

                                                   ____________________________

                                                   ____________________________




<PAGE>

PCIF
Initial and Annual Report
Personal Securities Holdings
Page  2




(7)  For each account, attach your most recent account statement listing
     Securities in that account. This information must be current as of a
     date no more than 30 days before this report is submitted. If you own
     Securities that are not listed in an attached account statement, list
     them below:

      Name of Security       Quantity         Value             Custodian

1.   __________________     ___________     ___________     ___________________

2.   __________________     ___________     ___________     ___________________

3.   __________________     ___________     ___________     ___________________

4.   __________________     ___________     ___________     ___________________

5.   __________________     ___________     ___________     ___________________

(Attach separate sheet if necessary.)

     I certify that this form and the attached statements (if any) constitute
all of the Securities of which I have Beneficial Ownership as defined in the
Code.

                                                _______________________________
                                                Employee Signature


                                                ________________________________
                                                Print Name


Dated:   _________________

                                       -2-

<PAGE>

PIMCO MUNICIPAL INCOME FUND II                                      Appendix III
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
PIMCO NEW YORK MUNICIPAL INCOME FUND II

Personal Securities Transactions/Brokerage Account Report   Quarter Ended:______

You must cause each broker-dealer who maintains an account for Securities of
which you have Beneficial Ownership to provide to a Compliance Officer, within
10 days of the end of each calendar quarter, duplicate copies of confirmations
of all transactions in the account and duplicate statements for the account and
you must report to the Compliance Officer, within 10 days of the occurrence, all
transactions effected without the use of a registered broker-dealer in
Securities (other than transactions in Exempt Securities).

If you have opened a new account with a broker-dealer since your last report,
please complete the following information for each such account:

<TABLE>
<CAPTION>
       ---------------------------------------------------------------------------------------------------------
                 Name                    Broker                 Account Number             Date Account Opened
       ---------------------------------------------------------------------------------------------------------
       <S>                               <C>                    <C>                        <C>
       ---------------------------------------------------------------------------------------------------------

       ---------------------------------------------------------------------------------------------------------

       ---------------------------------------------------------------------------------------------------------

       ---------------------------------------------------------------------------------------------------------
</TABLE>

Please provide information concerning non-Exempt Transactions not effected
through a registered broker-dealer (e.g., direct purchases of private placements
or limited partnerships).

<TABLE>
<CAPTION>
   -------------------------------------------------------------------------------------------------------------------------------
      Security's Name*       Transaction Date        Buy or Sell?    No. of Shares     Price Per Share       Broker's Name
   -------------------------------------------------------------------------------------------------------------------------------
   <S>                       <C>                     <C>             <C>               <C>                   <C>
   -------------------------------------------------------------------------------------------------------------------------------

   -------------------------------------------------------------------------------------------------------------------------------

   -------------------------------------------------------------------------------------------------------------------------------

   -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* Including interest rate, principal amount and maturity date, if applicable.

By signing this document, I am certifying that I have caused duplicate
confirmations and duplicate statements to be sent to the Compliance Officer for
every brokerage account that trades in Securities other than Exempt Securities
(as defined in the Fund's Code of Ethics).

<TABLE>
<S>                                    <C>                                      <C>
Print Name: _______________________    Signature: _________________________     Date:_________________
</TABLE>

Return to: N.B. Schott, Jr. - PIMCO Funds Distributors LLC, 2187 Atlantic
Street, Stamford, CT 06902

<PAGE>

                                                          Appendix III (cont'd.)

Exempt Securities include:

1.   Direct obligations issued by the Government of the United States.

2.   Bankers' acceptances, bank certificates of deposit, commercial paper, and
     high quality short-term debt instruments, including repurchase agreements.

3.   Shares of registered open-end investment companies.

Exempt Transactions include:

1.   Any transaction in Securities in an account over which you do not have any
     direct or indirect influence or control.

2.   Purchases of Securities under dividend reinvestment plans.

3.   Purchases of Securities by exercise of rights issued to the holders of a
     class of Securities pro rata.

4.   Acquisition or dispositions of Securities as the result of a stock
     dividend, stock split, reverse stock split, merger, consolidation or
     spin-off.

5.   Subject to the restrictions on participation in private placements set
     forth in the Code of Ethics under Private Placements, acquisitions or
     disposition of Securities of a private issuer.

6.   Subject to the provisions set forth in the Code of Ethics under Exempt
     Transactions, any transaction in Securities (other than Exempt Securities)
     by a Trustee of a Fund who is not an "interested person" of a Fund.

7.   Classes of transactions as may be exempted from time to time by the
     Compliance Committee.

Please review the Fund's Code of Ethics for further details on Beneficial
Ownership of Securities and other exemptions. If you have additional questions,
please contact your Compliance Officer.

<PAGE>

                                                                     Appendix IV

                         PIMCO MUNICIPAL INCOME FUND II
                    PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
                     PIMCO NEW YORK MUNICIPAL INCOME FUND II


                          ACKNOWLEDGMENT CERTIFICATION


         I hereby certify that I have read and understand the Code of Ethics of
PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II dated June 18, 2002. Pursuant to such
Code, I recognize that I must disclose or report all personal securities
holdings and transactions required to be disclosed or reported thereunder and
comply in all other respects with the requirements of such Code. I also agree to
cooperate fully with any investigation or inquiry as to whether a possible
violation of the foregoing Code has occurred.


Date:  __________________________         ______________________________
                                          Signature

                                          ______________________________
                                          Print Name

<PAGE>

                                                                      Appendix V

                         PIMCO MUNICIPAL INCOME FUND II
                    PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
                     PIMCO NEW YORK MUNICIPAL INCOME FUND II

                       ANNUAL CERTIFICATION OF COMPLIANCE

         I hereby certify that I have complied with the requirements of the Code
of Ethics for the year ended December 31, 200_. Pursuant to such Code, I have
disclosed or reported all holdings and personal securities transactions required
to be disclosed or reported thereunder and complied in all other respects with
the requirements of such Code. I also agree to cooperate fully with any
investigation or inquiry as to whether a possible violation of the foregoing
Code has occurred.

Date: _________________________           ________________________________
                                          Signature

                                          ________________________________
                                          Print Name

<PAGE>

                                                                     Appendix VI

                                   DEFINITIONS

     1.  For the purposes hereof, "Investment Person" with respect to the Fund
means:

            (i)   any employee of such Fund or an investment adviser or
                  sub-adviser (or of any company in a control (as defined in
                  Section 2(a)(9) of the Act) relationship to such Fund or
                  investment adviser or sub-adviser) who, in connection with his
                  or her regular functions or duties, makes or participates in
                  making recommendations regarding the purchase or sale of
                  securities by such Fund, including any portfolio manager and
                  any employee who helps execute decisions of any portfolio
                  manager; or

            (ii)  any natural person who controls (as defined in Section 2(a)(9)
                  of the Act) such Fund or investment adviser or sub-adviser and
                  who obtains information concerning recommendations made to
                  such Fund regarding the purchase or sale of securities by such
                  Fund.

                                      *   *   *

     2.  For the purposes hereof, "Disinterested Trustee" or "independent
Trustee" with respect to the Fund means a Trustee who is not an "interested
person" (as defined by Section 2(a)(19) of the Act, which definition is set
forth below) of such Fund and who would be required to provide the initial,
quarterly and annual reports described in the Code solely by reason of being a
Trustee of such Fund.

                                      *   *   *

     3.  "Interested person" of another person means--

         A. when used with respect to an investment company--

            i.    any affiliated person of such company,

            ii.   any member of the immediate family of any natural person who
                  is an affiliated person of such company,

            iii.  any interested person of any investment adviser of or
                  principal underwriter for such company,

            iv.   any person or partner or employee of any person who at any
                  time since the beginning of the last two completed fiscal
                  years of such company has acted as legal counsel for such
                  company,

            v.    any person or any affiliated person of a person (other than a
                  registered investment company) that, at any time during the
                  6-month period preceding the date of the determination of
                  whether that person or affiliated person is an

<PAGE>

Appendix VI
Definitions
Page 2

             interested person, has executed any portfolio transactions for,
             engaged in any principal transactions with, or distributed shares
             for--

             I.   the investment company;

             II.  any other investment company having the same investment
                  adviser as such investment company or holding itself out to
                  investors as a related company for purposes of investment or
                  investor services; or

             III. any account over which the investment company's investment
                  adviser has brokerage placement discretion,

        vi.  any person or any affiliated person of a person (other than a
             registered investment company) that, at any time during the 6-month
             period preceding the date of the determination of whether that
             person or affiliated person is an interested person, has loaned
             money or other property to--

             I.   the investment company;

             II.  any other investment company having the same investment
                  adviser as such investment company or holding itself out to
                  investors as a related company for purposes of investment or
                  investor services; or

             III. any account for which the investment company's investment
                  adviser has borrowing authority,

        vii. any natural person whom the Commission by order shall have
             determined to be an interested person by reason of having had, at
             any time since the beginning of the last two completed fiscal years
             of such company, a material business or professional relationship
             with such company or with the principal executive officer of such
             company or with any other investment company having the same
             investment adviser or principal underwriter or with the principal
             executive officer of such other investment company:

     Provided, That no person shall be deemed to be an interested person of an
investment company solely by reason of (aa) his being a member of its board of
directors or advisory board or an owner of its securities, or (bb) his
membership in the immediate family of any person specified in clause (aa) of
this proviso; and

     B. when used with respect to an investment adviser of or principal
        underwriter for any investment company--

        i.   any affiliated person of such investment adviser or principal
             underwriter,

                                       -2-

<PAGE>

Appendix VI
Definitions
Page  3

             ii.  any member of the immediate family of any natural person who
                  is an affiliated person of such investment adviser or
                  principal underwriter,

             iii. any person who knowingly has any direct or indirect beneficial
                  interest in, or who is designated as trustee, executor, or
                  guardian of any legal interest in, any security issued either
                  by such investment adviser or principal underwriter or by a
                  controlling person of such investment adviser or principal
                  underwriter,

             iv.  any person or partner or employee of any person who at any
                  time since the beginning of the last two completed fiscal
                  years of such investment company has acted as legal counsel
                  for such investment adviser or principal underwriter,

             v.   any person or any affiliated person of a person (other than a
                  registered investment company) that, at any time during the
                  6-month period preceding the date of the determination of
                  whether that person or affiliated person is an interested
                  person, has executed any portfolio transactions for, engaged
                  in any principal transactions with, or distributed shares
                  for--

                  I.   any investment company for which the investment adviser
                       or principal underwriter serves as such;

                  II.  any investment company holding itself out to investors,
                       for purposes of investment or investor services, as a
                       company related to any investment company for which the
                       investment adviser or principal underwriter serves as
                       such; or

                  III. any account over which the investment adviser has
                       brokerage placement discretion,

             vi.  any person or any affiliated person of a person (other than a
                  registered investment company) that, at any time during the
                  6-month period preceding the date of the determination of
                  whether that person or affiliated person is an interested
                  person, has loaned money or other property to--

                  I.   any investment company for which the investment adviser
                       or principal underwriter serves as such;

                  II.  any investment company holding itself out to investors,
                       for purposes of investment or investor services, as a
                       company related to any investment company for which the
                       investment adviser or principal underwriter serves as
                       such; or

                  III. any account for which the investment adviser has
                       borrowing authority,

                                       -3-

<PAGE>

Appendix VI
Definitions
Page  4

             vii. any natural person whom the Commission by order shall have
                  determined to be an interested person by reason of having had
                  at any time since the beginning of the last two completed
                  fiscal years of such investment company a material business or
                  professional relationship with such investment adviser or
                  principal underwriter or with the principal executive officer
                  or any controlling person of such investment adviser or
                  principal underwriter.

         For the purposes of this paragraph (19), "member of the immediate
family" means any parent, spouse of a parent, child, spouse of a child, spouse,
brother, or sister, and includes step and adoptive relationships. The Commission
may modify or revoke any order issued under clause (vi) of subparagraph (A) or
(B) of this paragraph whenever it finds that such order is no longer consistent
with the facts. No order issued pursuant to clause (vi) of subparagraph (A) or
(B) of this paragraph shall become effective until at least sixty days after the
entry thereof, and no such order shall affect the status of any person for the
purposes of this title or for any other purpose for any period prior to the
effective date of such order.

                                       -4-

<PAGE>

                                                                    Appendix VII


                 Code of Ethics of PIMCO Funds Distributors LLC

<PAGE>

                          PIMCO FUNDS DISTRIBUTORS LLC

                              AMENDED AND RESTATED
                                 CODE OF ETHICS

                           Effective February 1, 2002

           ===========================================================

                                  INTRODUCTION

                                 Fiduciary Duty

     This Code of Ethics is based on the principle that you, as an officer or
employee of PIMCO Funds Distributors LLC ("PFD"), owe a fiduciary duty to the
shareholders of the registered investment companies (the "Funds") and other
clients (together with the Funds, the Advisory Clients) for which PFD serves as
an underwriter or fiduciary. Accordingly, you must avoid activities, interests
and relationships that might interfere or appear to interfere with making
decisions in the best interests of our Advisory Clients.

     At all times, you must:

     1.   Place the interests of our Advisory Clients first. In other words, as
          a fiduciary you must scrupulously avoid serving your own personal
          interests ahead of the interests of our Advisory Clients. You may not
          cause an Advisory Client to take action, or not to take action, for
          your personal benefit rather than the benefit of the Advisory Client.
          For example, you would violate this Code if you caused an Advisory
          Client to purchase a Security you owned for the purpose of increasing
          the price of that Security. If you are an Investment Person (as
          defined in Appendix VII hereto), you would also violate this Code if
          you made a personal investment in a Security that might be an
          appropriate investment for an Advisory Client without first
          considering the Security as an investment for the Advisory Client.

     2.   Conduct all of your personal Securities transactions in full
          compliance with this Code and the PIMCO Advisors Insider Trading
          Policy. PFD encourages you and your family to develop personal
          investment programs. However, you must not take any action in
          connection with your personal investments that could cause even the
          appearance of unfairness or impropriety. Accordingly, you must comply
          with the policies and procedures set forth in this Code under the
          heading Personal Securities Transactions. In addition, you must comply
          with the policies and procedures set forth in the PIMCO Advisors
          Insider Trading Policy, which is attached to this Code as Appendix I.
          Doubtful situations should be resolved against your personal trading.

<PAGE>

     3.   Avoid taking inappropriate advantage of your position. The receipt of
          investment opportunities, gifts or gratuities from persons seeking
          business with PFD directly or on behalf of an Advisory Client could
          call into question the independence of your business judgment.
          Accordingly, you must comply with the policies and procedures set
          forth in this Code under the heading Fiduciary Duties. Doubtful
          situations should be resolved against your personal interest.

     Appendices

     The following appendices are attached to this Code and are a part of this
Code:

     I.     The PIMCO Advisors Insider Trading Policy and Procedures.

     II.    Form for Preclearance of Securities Transactions.

     III.   Form for Initial and Annual Report of Personal Securities Holdings.

     IV.    Form for Personal Securities Transactions/Brokerage Account Reports.

     V.     Form for Acknowledgment of Receipt of this Code.

     VI.    Form for Annual Certification of Compliance with this Code.

     VII.   Definition.

     VIII.  Policy Regarding Special Trading Procedures for Securities of
            Certain Closed-End Funds:

                    Exhibit 1 - List of Closed-End Funds
                    Exhibit 2 - Preclearance Request Form for Closed-End Funds

     Questions

     Questions regarding this Code should be addressed to a Compliance Officer.
As of the effective date of this Code, the Compliance Officers are Newton B.
Schott, Jr. and Deborah P. Brennan. The Compliance Committee is comprised of the
Compliance Officers and Stephen J. Treadway.

                                       2

<PAGE>

                        PERSONAL SECURITIES TRANSACTIONS

                               Trading in General

     You may not engage, and you may not permit any other person or entity to
engage, in any purchase or sale of Securities (other than Exempt Securities) of
which you have, or by reason of the transaction will acquire, Beneficial
Ownership, unless (i) the transaction is an Exempt Transaction or (ii) you have
complied with the procedures set forth under Preclearance Procedures.

     Securities

     The following are Securities:

     Any note, stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate or subscription,
transferable share, investment contract, voting-trust certificate, certificate
of deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option or privilege on any security
(including a certificate of deposit) or on any group or index of securities
(including any interest therein or based on the value thereof), or any put,
call, straddle, option or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any interest or
instrument commonly known as a security, or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any security.

     The following are not Securities:

     Commodities, futures and options traded on a commodities exchange,
including currency futures. However, securities futures /1/ and futures and
options on any group or index of Securities (as defined in the Investment
Company Act of 1940) are Securities.

     Purchase or Sale of a Security

     The purchase or sale of a Security includes, among other things, the
writing of an option to purchase or sell a Security.

     Exempt Securities

     The following are Exempt Securities:

     1.   Direct obligations of the Government of the United States.

_________
/1/ A security future is a contract of sale for future delivery of a single
security or a narrow-based security index.

     2.   Bankers' acceptances, bank certificates of deposit, commercial paper,
          and high quality short-term debt instruments (defined as any
          instrument that has a maturity

                                       3

<PAGE>

          at issuance of less than 366 days and that is rated in one of the two
          highest rating categories by a Nationally Recognized Statistical
          Rating Organization), including repurchase agreements.

     3.   Shares of registered open-end investment companies.

     Beneficial Ownership

     The following section is designed to give you a practical guide with
respect to Beneficial Ownership. However, for purposes of this Code, Beneficial
Ownership shall be interpreted in the same manner as it would be under Rule
16a-1(a)(2) under the Securities Exchange Act of 1934 (the "Exchange Act") in
determining whether a person is the beneficial owner of a security for purposes
of Section 16 of the Exchange Act and the rules and regulations thereunder.

     You are considered to have Beneficial Ownership of Securities if you have
or share a direct or indirect Pecuniary Interest in the Securities.

     You have a Pecuniary Interest in Securities if you have the opportunity,
directly or indirectly, to profit or share in any profit derived from a
transaction in the Securities.

     The following are examples of an indirect Pecuniary Interest in Securities:

     1.   Securities held by members of your immediate family sharing the same
          household; however, this presumption may be rebutted by convincing
          evidence that profits derived from transactions in these Securities
          will not provide you with any economic benefit.

          Immediate family means any child, stepchild, grandchild, parent,
          stepparent, grandparent, spouse, sibling, mother-in-law,
          father-in-law, son-in-law, daughter-in-law, brother-in-law, or
          sister-in-law, and includes any adoptive relationship.

     2.   Your interest as a general partner in Securities held by a general or
          limited partnership.

     3.   Your interest as a manager-member in the Securities held by a limited
          liability company.

     You do not have an indirect Pecuniary Interest in Securities held by a
corporation, partnership, limited liability company or other entity in which you
hold an equity interest, unless you are a controlling equityholder or you have
or share investment control over the Securities held by the entity.

     The following circumstances constitute Beneficial Ownership by you of
Securities held by a trust:

     1.   Your ownership of Securities as a trustee where either you or members
          of your immediate family have a vested interest in the principal or
          income of the trust.

                                       4

<PAGE>

     2.   Your ownership of a vested beneficial interest in a trust.

     3.   Your status as a settlor of a trust, unless the consent of all of the
          beneficiaries is required in order for you to revoke the trust.

     Exempt Transactions

     The following are Exempt Transactions:

     1.   Any transaction in Securities in an account over which you do not have
          any direct or indirect influence or control. There is a presumption
          that you can exert some measure of influence or control over accounts
          held by members of your immediate family sharing the same household,
          but this presumption may be rebutted by convincing evidence.

     2.   Purchases of Securities under dividend reinvestment plans.

     3.   Purchases of Securities by exercise of rights issued to the holders of
          a class of Securities pro rata, to the extent they are issued with
          respect to Securities of which you have Beneficial Ownership.

     4.   Acquisitions or dispositions of Securities as the result of a stock
          dividend, stock split, reverse stock split, merger, consolidation,
          spin-off or other similar corporate distribution or reorganization
          applicable to all holders of a class of Securities of which you have
          Beneficial Ownership.

     5.   Subject to the restrictions on participation in private placements set
          forth below under Private Placements, acquisitions or dispositions of
          Securities of a private issuer. A private issuer is a corporation,
          partnership, limited liability company or other entity which has no
          outstanding publicly-traded Securities, and no outstanding Securities
          which are convertible into or exchangeable for, or represent the right
          to purchase or otherwise acquire, publicly-traded Securities. However,
          you will have Beneficial Ownership of Securities held by a private
          issuer whose equity Securities you hold, unless you are not a
          controlling equityholder and do not have or share investment control
          over the Securities held by the entity.

     6.   Such other classes of transactions as may be exempted from time to
          time by the Compliance Committee based upon a determination that the
          transactions do not involve any realistic possibility of a violation
          of Rule 17j-1 under the Investment Company Act of 1940, as amended.
          The Compliance Committee may exempt designated classes of transactions
          from any of the provisions of this Code except the provisions set
          forth below under Reporting.

     7.   Such other specific transactions as may be exempted from time to time
          by a Compliance Officer. On a case-by-case basis when no abuse is
          involved a

                                       5

<PAGE>


          Compliance Officer may exempt a specific transaction from any of the
          provisions of this Code except the provisions set forth below under
          Reporting.

     Additional Exempt Transactions

     The following classes of transactions have been designated as Exempt
Transactions by the Compliance Committee:

      8.  Purchases or sales of up to $100,000 per calendar month per issuer of
          fixed-income Securities.

      9.  Any purchase or sale of fixed-income Securities issued by agencies or
          instrumentalities of, or unconditionally guaranteed by, the Government
          of the United States.

     10.  Purchases or sales of up to $1,000,000 per calendar month per issuer
          of fixed-income Securities issued by qualified foreign governments.

          A qualified foreign government is a national government of a developed
          foreign country with outstanding fixed-income securities in excess of
          $50 billion.

     11.  Purchases or sales of up to 2,000 shares per day, per issuer, of
          large-cap issuers.

          A large-cap issuer is an issuer with a total market capitalization in
          excess of $1 billion and an average daily trading volume during the
          preceding three calendar months, on the principal securities exchange
          (including NASDAQ) on which its shares are traded, in excess of
          100,000 shares.

          Information concerning large-cap issuers is available on the Internet.
          If you are unsure whether a security was issued by a large-cap issuer,
          contact a Compliance Officer.

     12.  Purchases or sales of up to the lesser of 1,000 shares or $10,000 per
          calendar week, per issuer, of stock of issuers other than large-cap
          issuers.

     13.  Purchases or sales of exchange-traded options on broadly based indices
          and units and/or exchange-traded trusts representing a group, or a
          basket, of securities (e.g., HHH, QQQ, SPY).

     14.  Any purchase or sales of shares of registered closed-end investment
          companies other than as set forth in Appendix VIII hereto.

     15.  If you are not an Investment Person, short sales of any Securities
          otherwise permitted hereunder or puts, calls, straddles, or options
          where the underlying amount of Securities controlled is an amount
          otherwise permitted hereunder.

     16.  Any purchase or sale of a security or interest issued by or in
          connection with a "Qualified Tuition Program" under Section 529 of the
          Internal Revenue Code of 1986, as amended.

                                       6

<PAGE>

                                     CAUTION

     The qualified foreign governments, large-cap issuers and broadly-based
indices that are exempt may change from time to time. Accordingly, you may
purchase Securities in an Exempt Transaction, only to find that you cannot sell
them later in an Exempt Transaction. In that case, you will be able to sell them
only if you preclear the sale in compliance with the procedures set forth in the
Code.

     Circumstances Requiring Preclearance

     If you have (or wish to acquire) Beneficial Ownership of Securities which
are not Exempt Securities and which cannot be sold in Exempt Transactions, such
Securities may be sold (or acquired) only in compliance with the procedures set
forth below under Preclearance Procedures.

     The Compliance Committee may designate as Exempt Transactions purchases and
sales of Securities which are purchased or sold in compliance with the
procedures set forth below under Preclearance Procedures.

     Preclearance Procedures

     If a Securities transaction requires preclearance:

     1.   The Securities may not be purchased or sold if at the time of
          preclearance there is a pending buy or sell order on behalf of an
          Advisory Client in the same Security or an equivalent Security or if
          you knew or should have known that an Advisory Client would be trading
          in that security or an equivalent Security on the same day.

          An equivalent Security of a given Security is: (i) a Security issuable
          upon exercise, conversion or exchange of the given Security, or (ii) a
          Security exercisable to purchase, convertible into or exchangeable for
          the given Security, or (iii) a Security otherwise representing an
          interest in or based on the value of the given Security.

     2.   The Securities may be purchased or sold only if you have asked a
          Compliance Officer to preclear the purchase or sale, the Compliance
          Officer has given you preclearance in writing, and the purchase or
          sale is executed by the close of business on the day preclearance is
          given. Preclearance will not be given unless a determination is made
          that the purchase or sale complies with this Code and the foregoing
          restrictions. The form for requesting preclearance is attached to this
          Code as Appendix II.

                                       7

<PAGE>

     Initial Public Offerings

     If you are an Investment Person of any investment company that is an
Advisory Client (a "Trust"), you may not acquire Beneficial Ownership of any
Securities in an Initial Public Offering, unless you have received the prior
written approval of the Compliance Committee.

     For the purposes hereof, "Initial Public Offering" means an offering of
securities registered under the Securities Act of 1933 (the "Securities Act"),
the issuer of which, immediately before the registration, was not subject to the
reporting requirements of Sections 13 or 15(d) of the Exchange Act.

     Private Placements

     If you are an Investment Person of a Trust, you may not acquire Beneficial
Ownership of any Securities in a Private Placement, unless you have received the
prior written approval of the Compliance Committee. Approval will be not be
given unless a determination is made that the investment opportunity should not
be reserved for one or more Advisory Clients, and that the opportunity to invest
has not been offered to you by virtue of your position.

     For the purposes hereof, "Private Placement" means an offering that is
exempted from registration under the Securities Act pursuant to Section 4(2) or
Section 4(6) or pursuant to Rule 504, 505 or 506 under the Securities Act.

     If you have acquired Beneficial Ownership of Securities in a Private
Placement, you must disclose your investment when you play a part in any
consideration of an investment by an Advisory Client in the issuer of the
Securities, and any decision to make such an investment must be independently
reviewed by a portfolio manager who does not have Beneficial Ownership of any
Securities of the issuer.

     Short-Term Trading Profits

     If you are an Investment Person, you may not profit from the purchase and
sale, or sale and purchase, within 60 calendar days, of the same (or equivalent)
Securities (other than Exempt Securities) of which you have Beneficial
Ownership. You are prohibited from transactions involving puts, calls,
straddles, options and/or short sales except for: Exempt Transactions,
transactions in Exempt Securities or transactions approved by a Compliance
Officer. Any such short-term trade must be unwound, or if that is not practical,
the profits must be contributed to a charitable organization.

     You are considered to profit from a short-term trade if Securities of which
you have Beneficial Ownership are sold for more than their purchase price, even
though the Securities purchased and the Securities sold are held of record or
beneficially by different persons or entities.

                                       8

<PAGE>

                                    Reporting

     Use of Broker-Dealers

     You may not engage, and you may not permit any other person or entity to
engage, in any purchase or sale of publicly-traded Securities (other than Exempt
Securities) of which you have, or by reason of the transaction will acquire,
Beneficial Ownership, except through a registered broker-dealer.

     Reporting of Transactions and Brokerage Accounts

     Each employee must report the employee's brokerage accounts and all
Securities transactions that are not Exempt Transactions or transactions in
Exempt Securities. To satisfy these requirements, (i) you must cause each
registered broker-dealer, who maintains an account for Securities of which you
have Beneficial Ownership, to provide to a Compliance Officer of PFD, within 10
days of the end of each calendar quarter, duplicate copies of: (a) confirmations
of all transactions in the account and (b) periodic statements for the account
and (ii) you must report (on the form attached as Appendix IV hereto) to a
Compliance Officer of PFD, within 10 days of the occurrence, the opening of any
brokerage account and all transactions effected without the use of a registered
broker-dealer in Securities (other than Exempt Securities) of which you have
Beneficiary Ownership.

     The confirmations and statements required by (i)(a) and (i)(b) above must
in the aggregate provide all of the information required by the Personal
Securities Transactions/Brokerage Account Report attached to this Code as
Appendix IV. If they do not, you must complete and submit a Personal Securities
Transactions/Brokerage Account Report within 10 days of the end of each calendar
quarter.

     Initial and Annual Reports

     You must disclose your holdings of all Securities (other than Exempt
Securities) of which you have Beneficial Ownership no later than 10 days after
becoming an employee and annually thereafter. The form for this purpose is
attached to this Code as Appendix III.

     Disclaimer

     Anyone filing a report required hereunder may disclaim Beneficial Ownership
of any Security listed thereon.

                                FIDUCIARY DUTIES

     Gifts

     You may not accept any investment opportunity, gift, gratuity or other
thing of more than nominal value, from any person or entity that does business,
or desires to do business, with PFD directly or on behalf of an Advisory Client.
You may accept gifts from a single giver so long as their aggregate annual value
does not exceed $100, and you may attend business meals, sporting

                                       9

<PAGE>

events and other entertainment events at the expense of a giver, so long as the
expense is reasonable and both you and the giver are present.

     Service as a Director

     You may not serve on the board of directors or other governing board of a
publicly traded entity, unless you have received the prior written approval of
the Chief Executive Officer and the General Counsel of PFD. Approval will not be
given unless a determination is made that your service on the board would be
consistent with the interests of our Advisory Clients. If you are permitted to
serve on the board of a publicly traded entity, you will be isolated from those
employees who make investment decisions with respect to the securities of that
entity, through a "Chinese Wall" or other procedures.

                                   COMPLIANCE

     Certificate of Receipt

     You are required to acknowledge receipt of your copy of this Code. A form
for this purpose is attached to this Code as Appendix V.

     Certificate of Compliance

     You are required to certify upon commencement of your employment or the
effective date of this Code, whichever occurs later, and annually thereafter,
that you have read and understand this Code and recognize that you are subject
to this Code. Each annual certificate will also state that you have complied
with the requirements of this Code during the prior year, and that you have
disclosed, reported, or caused to be reported all holdings required hereunder
and all transactions during the prior year in Securities of which you had or
acquired Beneficial Ownership. A form for this purpose is attached to this Code
as Appendix VI.

     Remedial Actions

     If you violate this Code, you are subject to remedial actions, which may
include, but are not limited to, disgorgement of profits, imposition of a
substantial fine, demotion, suspension or termination.

                       Reports to Management and Trustees

     Reports of Material Remedial Action

     The members of PFD and the directors or trustees of each Fund which is an
Advisory Client will be informed on a timely basis of each material remedial
action taken in response to a violation of this Code. For this purpose, a
material remedial action will include any action that has a significant
financial effect on the violator, such as disgorgement of profits, imposition of
a substantial fine, demotion, suspension or termination.

                                       10

<PAGE>

     Annual Reports

     Management of PFD will report in writing annually to the members of PFD and
the directors or trustees of each Trust which is an Advisory Client with regard
to efforts to ensure compliance by the officers and employees of PFD with their
fiduciary obligations to our Advisory Clients.

     The annual report will, at a minimum:

     1.   Describe any issues arising under the Code of Ethics or procedures
          since the last report to the members or Board, as the case may be,
          including, but not limited to, information about material violations
          of the Code or procedures and sanctions imposed in response to the
          material violations; and

     2.   Certify that PFD has adopted procedures reasonably necessary to
          prevent Access Persons from violating the Code.

                                       11

<PAGE>

                                                                      APPENDIX I

                                 PIMCO ADVISORS

                      INSIDER TRADING POLICY AND PROCEDURES

SECTION I.  POLICY STATEMENT ON INSIDER TRADING

A.   Policy Statement on Insider Trading

PIMCO Advisors L.P. ("PIMCO Advisors"), its affiliates, PIMCO Partners, G.P.,
Cadence Capital Management, NFJ Investment Group, Oppenheimer Capital, and PIMCO
Equity Advisors (collectively the "Company" or "PIMCO Advisors") forbid any of
their officers, directors or employees from trading, either personally or on
behalf of others (such as, mutual funds and private accounts managed by PIMCO
Advisors), on the basis of material non-public information or communicating
material non-public information to others in violation of the law. This conduct
is frequently referred to as "insider trading". This is a group wide policy.

The term "insider trading" is not defined in the federal securities laws, but
generally is used to refer to the situation when a person trades while aware of
material non-public information or to communications of material non-public
information to others in breach of a duty of trust or confidence.

While the law concerning insider trading is not static, it is generally
understood that the law prohibits:

(1)  trading by an insider, while aware of material, non-public information; or

(2)  trading by a non-insider, while aware of material, non-public information,
     where the information was disclosed to the non-insider in violation of an
     insider's duty to keep it confidential; or

(3)  communicating material, non-public information to others in breach of a
     duty of trust or confidence.

This policy applies to every such officer, director and employee and extends to
activities within and outside their duties at the Company. Every officer,
director and employee must read and retain this policy statement. Any questions
regarding this policy statement and the related procedures set forth herein
should be referred to a Compliance Officer of PIMCO Advisors.

The remainder of this memorandum discusses in detail the elements of insider
trading, the penalties for such unlawful conduct and the procedures adopted by
the Company to implement its policy against insider trading.

                                       12

<PAGE>


1.     To Whom Does This Policy Apply?
       ------------------------------

  This Policy applies to all employees, officers and directors (direct or
  indirect) of the Company ("Covered Persons"), as well as to any transactions
  in any securities participated in by family members, trusts or corporations
  controlled by such persons. In particular, this Policy applies to securities
  transactions by:

       the Covered Person's spouse;
       the Covered Person's minor children;
       any other relatives living in the Covered Person's household;
       a trust in which the Covered Person has a beneficial interest, unless
       such person has no direct or indirect control over the trust;
       a trust as to which the Covered Person is a trustee;
       a revocable trust as to which the Covered Person is a settlor;
       a corporation of which the Covered Person is an officer, director or
       10% or greater stockholder; or
       a partnership of which the Covered Person is a partner (including
       most investment clubs) unless the Covered Person has no direct or
       indirect control over the partnership.

2.     What is Material Information?
       ----------------------------

  Trading on inside information is not a basis for liability unless the
  information is material. "Material information" generally is defined as
  information for which there is a substantial likelihood that a reasonable
  investor would consider it important in making his or her investment d
  ecisions, or information that is reasonably certain to have a substantial
  effect on the price of a company's securities.

  Although there is no precise, generally accepted definition of materiality,
  information is likely to be "material" if it relates to significant changes
  affecting such matters as:

       dividend or earnings expectations;
       write-downs or write-offs of assets;
       additions to reserves for bad debts or contingent liabilities;
       expansion or curtailment of company or major division operations;
       proposals or agreements involving a joint venture, merger, acquisition,
          divestiture, or leveraged buy-out;
       new products or services;
       exploratory, discovery or research developments;
       criminal indictments, civil litigation or government investigations;
       disputes with major suppliers or customers or significant changes in the
          relationships with such parties;
       labor disputes including strikes or lockouts;
       substantial changes in accounting methods;
       major litigation developments;
       major personnel changes;
       debt service or liquidity problems;
       bankruptcy or insolvency;
       extraordinary management developments;
       public offerings or private sales of debt or equity securities;

                                       13

<PAGE>

       calls, redemptions or purchases of a company's own stock;
       issuer tender offers; or
       recapitalizations.

  Information provided by a company could be material because of its expected
  effect on a particular class of the company's securities, all of the company's
  securities, the securities of another company, or the securities of several
  companies. Moreover, the resulting prohibition against the misuses of
  "material" information reaches all types of securities (whether stock or other
  equity interests, corporate debt, government or municipal obligations, or
  commercial paper) as well as any option related to that security (such as a
  put, call or index security).

  Material information does not have to relate to a company's business. For
  example, in Carpenter v. U.S., 108 U.S. 316 (1987), the Supreme Court
  considered as material certain information about the contents of a forthcoming
  newspaper column that was expected to affect the market price of a security.
  In that case, a reporter for The Wall Street Journal was found criminally
  liable for disclosing to others the dates that reports on various companies
  would appear in the Journal and whether those reports would be favorable or
  not.

3.     What is Non-Public Information?
       ------------------------------

  In order for issues concerning insider trading to arise, information must not
  only be "material", it must be "non-public". "Non-public" information is
  information which has not been made available to investors generally.
  Information received in circumstances indicating that it is not yet in general
  circulation or where the recipient knows or should know that the information
  could only have been provided by an "insider" is also deemed "non-public"
  information.

  At such time as material, non-public information has been effectively
  distributed to the investing public, it is no longer subject to insider
  trading restrictions. However, for "non-public" information to become public
  information, it must be disseminated through recognized channels of
  distribution designed to reach the securities marketplace.

  To show that "material" information is public, you should be able to point to
  some fact verifying that the information has become generally available, for
  example, disclosure in a national business and financial wire service (Dow
  Jones or Reuters), a national news service (AP or UPI), a national newspaper
  (The Wall Street Journal, The New York Times or Financial Times), or a
  publicly disseminated disclosure document (a proxy statement or prospectus).
  The circulation of rumors or "talk on the street", even if accurate,
  widespread and reported in the media, does not constitute the requisite public
  disclosure. The information must not only be publicly disclosed, there must
  also be adequate time for the market as a whole to digest the information.
  Although timing may vary depending upon the circumstances, a good rule of
  thumb is that information is considered non-public until the third business
  day after public disclosure.

  Material non-public information is not made public by selective dissemination.
  Material information improperly disclosed only to institutional investors or
  to a fund analyst or a favored group of analysts retains its status as
  "non-public" information which must not be disclosed or otherwise misused.
  Similarly, partial disclosure does not constitute public dissemination. So
  long as any material component of the "inside" information possessed by the
  Company has yet to be publicly disclosed, the information is deemed
  "non-public" and may not be misused.

                                       14

<PAGE>

  Information Provided in Confidence. It is possible that one or more directors,
  officers, or employees of PIMCO Advisors may become temporary "insiders"
  because of a duty of trust or confidence. A duty of trust or confidence can
  arise: (1) whenever a person agrees to maintain information in confidence; (2)
  when two people have a history, pattern, or practice of sharing confidences
  such that the recipient of the information knows or reasonably should know
  that the person communicating the material non-public information expects that
  the recipient will maintain its confidentiality; or (3) whenever a person
  receives or obtains material non-public information from certain close family
  members such as spouses, parents, children and siblings. For example,
  personnel at PIMCO Advisors may become insiders when an external source, such
  as a company whose securities are held by one or more of the accounts managed
  by PIMCO Advisors, discloses material, non-public information to PIMCO
  Advisors' portfolio managers or analysts with the expectation that the
  information will remain confidential.

  As an "insider", PIMCO Advisors has a duty not to breach the trust of the
  party that has communicated the "material, non-public" information by misusing
  that information. This duty may arise because PIMCO Advisors has entered or
  has been invited to enter into a conunercial relationship with the company,
  client or prospective client and has been given access to confidential
  information solely for the corporate purposes of that company, client or
  prospective client. This duty remains whether or not PIMCO Advisors ultimately
  participates in the transaction.

  Information Disclosed in Breach of a Duty. Analysts and portfolio managers at
  PIMCO Advisors must be especially wary of "material, non-public" information
  disclosed in breach of corporate insider's duty of trust or confidence that he
  or she owes the corporation and shareholders. Even where there is no
  expectation of confidentiality, a person may become an "insider" upon
  receiving material, non-public information in circumstances where a person
  knows, or should know, that a corporate insider is disclosing information in
  breach of a duty of trust and confidence that he or she owes the corporation
  and its shareholders. Whether the disclosure is an improper "tip" that renders
  the recipient a "tippee" depends on whether the corporate insider expects to
  benefit personally, either directly or indirectly, from the disclosure. In the
  context of an improper disclosure by a corporate insider, the requisite
  "personal benefit" may not be limited to a present or future monetary gain.
  Rather, a prohibited personal benefit could include a reputational benefit, an
  expectation of a "quid pro quo" from the recipient or the recipient's employer
  by a gift of the "inside" information.

  A person may, depending on the circumstances, also become an "insider" or
  "tippee" when he or she obtains apparently material, non-public information by
  happenstance, including information derived from social situations, business
  gatherings, overheard conversations, misplaced documents, and "tips" from
  insiders or other third parties.

4.       Identifying Material Information

  Before trading for yourself or others, including investment companies or
  private accounts managed by the Company, in the securities of a company about
  which you may have potential material, non-public information, ask yourself
  the following questions:

                                       15

<PAGE>

i.      Is this information that an investor could consider important in making
        his or her investment decisions? Is this information that could
        substantially affect the market price of the securities if generally
        disclosed?

ii.     To whom has this information been provided? Has the information been
        effectively communicated to the marketplace by being published in The
        Financial Times, Reuters, The Wall Street Journal or other publications
        of general circulation?

Given the potentially severe regulatory, civil and criminal sanctions to which
you the Company and its personnel could be subject, any director, officer and
employee uncertain as to whether the information he or she possesses is
"material non-public" information should immediately take the following steps:

i.      Report the matter immediately to a Compliance Officer or the General
        Counsel of PIMCO Advisors;

ii.     Do not purchase or sell the securities on behalf of yourself or others,
        including investment companies or private accounts managed by PIMCO
        Advisors; and

iii.    Do not communicate the information inside or outside the Company, other
        than to a Compliance Officer or the General Counsel of PIMCO Advisors.

After the Compliance Officer or General Counsel has reviewed the issue, you will
be instructed to continue the prohibitions against trading and communication or
will be allowed to trade and communicate the information.

5.      Penalties for Insider Trading.

Penalties for trading on or communicating material non-public information are
severe, both for individuals involved in such unlawful conduct and their
employers. A person can be subject to some or all of the penalties below even if
he or she does not personally benefit from the violation. Penalties include:

        civil injunctions
        treble damages
        disgorgement of profits
        jail sentences
        fines for the person who committed the violation of up to three times
           the profit gained or loss avoided, whether or not the person
           actually benefited, and
        fines for the employer or other controlling person of up to the greater
           of $1,000,000 or three times the amount of the profit gained or loss
           avoided.

In addition, any violation of this policy statement can be expected to result in
serious sanctions by the Company, including dismissal of the persons involved.

                                       16

<PAGE>

Section II:  Procedures to Implement the Policy Against Insider Trading

A.      Procedures to Implement the Policy Against Insider Trading

The following procedures have been established to aid the officers, directors
and employees of PIMCO Advisors in avoiding insider trading, and to aid PIMCO
Advisors in preventing, detecting and imposing sanctions against insider
trading. Every officer, director and employee of PIMCO Advisors must follow
these procedures or risk serious sanctions, including dismissal, substantial
personal liability and criminal penalties.

Trading Restrictions and Reporting Requirements

1.      No employee, officer or director of the Company who is aware of material
        non-public information relating to the Company or any of its affiliates
        or subsidiaries, including Allianz AG, may buy or sell any securities of
        the Company, including Allianz AG, or engage in any other action to take
        advantage of, or pass on to others, such material non-public
        information.

2.      No employee, officer or director of the Company who is aware of material
        non-public information which relates to any other company or entity in
        circumstances in which such person is deemed to be an insider or is
        otherwise subject to restrictions under the federal securities laws may
        buy or sell securities of that company or otherwise take advantage of,
        or pass on to others, such material non-public information.

3.      No employee, officer or director of PIMCO Advisors shall engage in a
        securities transaction with respect to the securities of Allianz AG,
        except in accordance with the specific procedures published from time to
        time by PIMCO Advisors.

4.      No employee shall engage in a securities transaction with respect to any
        securities of any other company, except in accordance with the specific
        procedures set forth in PIMCO Advisors' Code of Ethics.

5.      Employees shall submit reports concerning each securities transaction in
        accordance with the terms of the Code of Ethics and verify their
        personal ownership of securities in accordance with the procedures set
        forth in the Code of Ethics.

6.      Because even inadvertent disclosure of material non-public information
        to others can lead to significant legal difficulties, officers,
        directors and employees of PIMCO Advisors should not discuss any
        potentially material non-public information concerning PIMCO Advisors or
        other companies, including other officers, employees and directors,
        except as specifically required in the performance of their duties

                                       17

<PAGE>

B.      Chinese Wall Procedures

The Insider Trading and Securities Fraud Enforcement Act in the US requires the
establishment and strict enforcement of procedures reasonably designed to
prevent the misuse of "inside" information/1/. Accordingly, you should not
discuss material non-public information about PIMCO Advisors or other companies
with anyone, including other employees, except as required in the performance of
your regular duties. In addition, care should be taken so that such information
is secure. For example, files containing material non-public information should
be sealed; access to computer files containing material non-public information
should be restricted.

C.      Resolving Issues Concerning Insider Trading

The federal securities laws, including the US laws governing insider trading,
are complex. If you have any doubts or questions as to the materiality or
non-public nature of information in your possession or as to any of the
applicability or interpretation of any of the foregoing procedures or as to the
propriety of any action, you should contact your Compliance Officer. Until
advised to the contrary by a Compliance Officer, you should presume that the
information is material and non-public and you should not trade in the
securities or disclose this information to anyone.

______________________
/1/ The antifraud provisions of United States securities laws reach insider
trading or tipping activity worldwide which defrauds domestic securities
markets. In addition, the Insider Trading and Securities Fraud Enforcement Act
specifically authorizes the SEC to conduct investigations at the request of
foreign governments, without regard to whether the conduct violates United
States law.

                                       18

<PAGE>

                                                                     Appendix II

                          PIMCO FUNDS DISTRIBUTORS LLC

                   PRECLEARANCE OF SECURITIES TRANSACTION FORM

(1)    Name of employee requesting authorization:      _________________________

(2)    If different from #1, name of the account
       where the trade will occur:                     _________________________

(3)    Relationship of (2) to (1):                     _________________________

(4)    Name of the firm at which the account is held:  _________________________

(5)    Name of Security:                               _________________________

(6)    Maximum number of shares or units to be
       purchased or sold or amount of bond:            _________________________

(7)    Check those that are applicable:

       ___ Purchase ___ Sale  ___ Market Order ___ Limit Order (Price of Limit
                                                   Order: _______)

If the answer to any of the following questions is made by checking the answer
in Column I, the Compliance Officer may have to reject the proposed transaction:

<TABLE>
<CAPTION>
                                                                                   COLUMN I          COLUMN II
<S>                                                                           <C>                 <C>
(8)    Do you possess material nonpublic information regarding the security
       or the issuer of the security?/1/                                       ______  Yes         ______  No

(9)    To your knowledge, are the securities or "equivalent securities"
       subject to a pending buy or sell order on behalf of an Advisory
       Client of PFD?                                                          ______  Yes         ______  No

(10)   To your knowledge, are there any outstanding purchase or sell orders
       for this security or any equivalent security by any Advisory Client
       of PFD?                                                                 ______  Yes         ______  No

(11)   To your knowledge, are the securities or equivalent securities being
       considered for purchase or sale for any Advisory Client of PFD?         ______  Yes         ______  No
</TABLE>


__________________________
/1/ Please note that officers and employees of PFD generally are not permitted
to acquire or sell securities when they possess material nonpublic information
regarding the security or the issuers of the security.

                                       19

<PAGE>


                                                             Appendix II (cont.)
<TABLE>
<CAPTION>
                                                                                     COLUMN I        COLUMN II
<S>      <C>                                                                       <C>              <C>
(12)     Are the securities being acquired in an initial public offering?
                                                                                   ______  Yes      ______  No

(13)     If you are an Investment Person,/2/ are the securities being acquired
         in a private placement?                                                   ______  Yes      ______  No

(14)     If you are an Investment Person,/2/ has any account you manage purchased
         or sold these securities or equivalent securities within the past seven
         calendar days or do you expect the account to purchase or sell these
         securities or equivalent securities within seven
         calendar days of your purchase or sale?                                   ______  Yes      ______  No
</TABLE>


         I have read the PIMCO Funds Distributors LLC Amended and Restated Code
of Ethics dated February 1, 2002 within the prior 12 months and believe that the
proposed trade fully complies with the requirements of the Code.


                                                   _____________________________
                                                           Employee Signature


                                                   _____________________________
                                                           Print Name


                                                   _____________________________
                                                           Date Submitted

Authorized by:    ___________________


Date:             ___________________


__________________
/2/  Please see you Compliance Officer if you are not certain whether you are an
Investment Person.

                                       20

<PAGE>

                                                                    Appendix III

                          PIMCO FUNDS DISTRIBUTORS LLC

                          INITIAL AND ANNUAL REPORT OF
                          PERSONAL SECURITIES HOLDINGS

         In accordance with the Code of Ethics, please provide a list of all
Securities (other than Exempt Securities) in which you or any account, in which
you have a Pecuniary Interest, has a Beneficial Interest and all Securities
(other than Exempt Securities) in non-client accounts for which you make
investment decisions. This includes not only securities held by brokers, but
also Securities held at home, in safe deposit boxes, or by an issuer.

(1)  Name of employee:                              ____________________________

(2)  If different than #1, name of the person
     in whose name the account is held:             ____________________________

(3)  Relationship of (2) to (1):                    ____________________________

(4)  Broker(s) at which Account is maintained:      ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

(5)  Account Number(s):                             ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

(6)  Telephone number(s) of Broker:                 ____________________________

                                                    ____________________________

                                                    ____________________________

                                       21

<PAGE>

(7) For each account, attach your most recent account statement listing
Securities in that account. This information must be current as of a date no
more than 30 days before this report is submitted. If you own Securities that
are not listed in an attached account statement, list them below:

     Name of Security         Quantity         Value           Custodian

1.   __________________       ___________      ___________     _________________

2.   __________________       ___________      ___________     _________________

3.   __________________       ___________      ___________     _________________

4.   __________________       ___________      ___________     _________________

5.   __________________       ___________      ___________     _________________

(Attach separate sheet if necessary)

         I certify that this form and the attached statements (if any)
constitute all of the Securities of which I have Beneficial Ownership as defined
in the Code.

                                                ________________________________
                                                Employee Signature



                                                ________________________________
                                                Print Name

Dated:   _________________

                                       22

<PAGE>

PIMCO FUNDS DISTRIBUTORS LLC                                         Appendix IV

Personal Securities Transactions/Brokerage Account Report   Quarter Ended: _____

You must cause each broker-dealer who maintains an account for Securities of
which you have Beneficial Ownership to provide to a Compliance Officer, within
10 days of the end of each calendar quarter, duplicate copies of confirmations
of all transactions in the account and duplicate statements for the account and
you must report to the Compliance Officer, within 10 days of the occurrence, all
transactions effected without the use of a registered broker-dealer in
Securities (other than transactions in Exempt Securities).

If you have opened a new account with a broker-dealer since your last report,
please complete the following information for each such account:

<TABLE>
<CAPTION>
       -------------------------------------------------------------------------------------------------
                 Name                    Broker             Account Number        Date Account Opened
       -------------------------------------------------------------------------------------------------
       <S>                     <C>                   <C>                         <C>
       _________________________________________________________________________________________________

       _________________________________________________________________________________________________

       _________________________________________________________________________________________________

       _________________________________________________________________________________________________
</TABLE>

Please provide information concerning non-Exempt Transactions not effected
through a registered broker-dealer (e.g., direct purchases of private placements
or limited partnerships).

<TABLE>
<CAPTION>
   -----------------------------------------------------------------------------------------------------------------------------
      Security's Name*     Transaction Date       Buy or Sell?      No. of Shares       Price Per Share      Broker's Name
   -----------------------------------------------------------------------------------------------------------------------------
   <S>                    <C>                  <C>                <C>                 <C>                  <C>
   _____________________________________________________________________________________________________________________________

   _____________________________________________________________________________________________________________________________

   _____________________________________________________________________________________________________________________________

   _____________________________________________________________________________________________________________________________
</TABLE>
* Including interest rate, principal amount and maturity date, if applicable.

By signing this document, I am certifying that I have caused duplicate
confirmations and duplicate statements to be sent to the Compliance Officer for
every brokerage account that trades in Securities other than Exempt Securities
(as defined in the PFD Code of Ethics).

Print Name: ____________       Signature:  _______________      Date: __________


Return to: N.B. Schott, Jr. - PIMCO Funds Distributors LLC, 2187 Atlantic
Street, Stamford, CT 06902

                                       23

<PAGE>

                                                             Appendix IV (cont.)

1.   Transactions required to be reported. You should report every transaction
     in which you acquired or disposed of any beneficial ownership of any
     security during the calendar quarter. The term "beneficial ownership" is
     the subject of a long history of opinions and releases issued by the
     Securities and Exchange Commission and generally means that you would
     receive the benefits of owning a security. The term includes, but is not
     limited to the following cases and any other examples in the Code:

     (A)  Where the security is held for your benefit by others (brokers,
          custodians, banks and pledgees);

     (B)  Where the security is held for the benefit of members of your
          immediate family sharing the same household;

     (C)  Where securities are held by a corporation, partnership, limited
          liability company, investment club or other entity in which you have
          an equity interest if you are a controlling equityholder or you have
          or share investment control over the securities held by the entity;

     (D)  Where securities are held in a trust for which you are a trustee and
          under which either you or any member of your immediate family have a
          vested interest in the principal or income; and

     (E)  Where securities are held in a trust for which you are the settlor,
          unless the consent of all of the beneficiaries is required in order
          for you to revoke the trust.

     Notwithstanding the foregoing, none of the following transactions need be
     reported:

     (A)  Transactions in securities which are direct obligations of the United
          States;

     (B)  Transactions effected in any account over which you have no direct or
          indirect influence or control; or

     (C)  Shares of registered open-end investment companies.

2.   Security Name. State the name of the issuer and the class of the security
     (e.g., common stock, preferred stock or designated issue of debt
     securities), including the interest rate, principal amount and maturity
     date, if applicable. In the case of the acquisition or disposition of a
     futures contract, put, call option or other right (hereinafter referred to
     as "options"), state the title of the security subject to the option and
     the expiration date of the option.

3.   Futures Transactions. Please remember that duplicates of all Confirmations,
     Purchase and Sale Reports, and Month-end Statements must be send to
     the firm by your broker. Please double check to be sure this occurs if you
     report a futures transaction. You should use the address below.

4.   Transaction Date.  In the case of a market transaction, state the trade
     date (not the settlement date).

5.   Nature of Transaction (Buy or Sell). State the character of the transaction
     (e.g., purchase or sale of security, purchase or sale of option, or
     exercise of option).

6.   Amount of Security Involved (No. of Shares). State the number of shares of
     stock, the face amount of debt securities or other units of other
     securities. For options, state the amount of securities subject to the
     option. If your ownership interest was through a spouse, relative or other
     natural person or through a partnership, trust, other entity, state the
     entire amount of securities involved in the transaction. In such cases, you
     may also indicate, if you wish, the extent of your interest in the
     transaction.

7.   Purchase or Sale Price.  State the purchase or sale price per share or
     other unit, exclusive of brokerage commissions or other costs of execution.
     In the case of an option, state the price at which it is currently
     exercisable. No price need be reported for transactions not involving cash.

8.   Broker, Dealer or Bank Effecting Transaction.  State the name of the
     broker, dealer or bank with or through whom the transaction was effected.

9.   Signature.  Sign the form in the space provided.

10.  Filing of Report. A report should be filed NOT LATER THAN 10 CALENDAR DAYS
     after the end of each calendar quarter with:

                  PIMCO Funds Distributors LLC
                  ATTN:  Newton B. Schott, Jr.
                  2187 Atlantic Street - 7/th/ Floor
                  Stamford, CT  06902

                                       24

<PAGE>

                                                                      Appendix V

                          PIMCO FUNDS DISTRIBUTORS LLC

                          ACKNOWLEDGMENT CERTIFICATION
                                     for the
                                 Code of Ethics
                                     and the
                      Insider Trading Policy and Procedures

         I hereby certify that I have read and understand the PIMCO Funds
Distributors Amended and Restated Code of Ethics and the Insider Trading Policy
and Procedures (dated February 1, 2002) (together, the "Codes"). Pursuant to the
Codes, I recognize that I must disclose or report all personal holdings and
securities transactions required to be disclosed or reported thereunder and
comply in all other respects with the requirements of the Codes. I also agree to
cooperate fully with any investigation or inquiry as to whether a possible
violation of the foregoing Codes has occurred./1/ I understand that any failure
to comply in all aspects with the foregoing and these policies and procedures
may lead to sanctions, including dismissal.

Date:    __________________________         ______________________________
                                            Signature


                                            ______________________________
                                            Print Name

_______________
/1/ The antifraud provisions of United States securities laws reach insider
trading or tipping activity worldwide which defrauds domestic securities
markets. In addition, the Insider Trading and Securities Fraud Enforcement Act
specifically authorizes the SEC to conduct investigations at the request of
foreign governments, without regard to whether the conduct violates United
States law.

                                       25

<PAGE>

                                                                     Appendix VI

                          PIMCO FUNDS DISTRIBUTORS LLC

                       ANNUAL CERTIFICATION OF COMPLIANCE

         I hereby certify that I have complied with the requirements of the
PIMCO Funds Distributors LLC Amended and Restated Code of Ethics and the Insider
Trading Policy and Procedures (dated February 1, 2002) (together, the "Codes")
for the year ended December 31, 200__. Pursuant to the Codes, I have disclosed
or reported all personal securities holdings and transactions required to be
disclosed or reported thereunder and complied in all other respects with the
requirements of the Codes. I also agree to cooperate fully with any
investigation or inquiry as to whether a possible violation of the foregoing
Codes has occurred.

Date: _________________________
                                            ______________________________
                                            Signature


                                            ______________________________
                                            Print Name

                                       26

<PAGE>

                                                                    APPENDIX VII

                                   DEFINITION

For the purposes hereof, "Investment Person" means:

          (i)   any employee of a Trust or an investment adviser or sub-adviser
                (or of any company in a control (as defined in Section 2(a)(9)
                of the Act) relationship to such Trust or investment adviser or
                sub-adviser) who, in connection with his or her regular
                functions or duties, makes or participates in making
                recommendations regarding the purchase or sale of securities by
                any Fund of such Trust, including any portfolio manager and any
                employee who helps execute decisions of any portfolio manager;
                or

          (ii)  any natural person who controls (as defined in Section 2(a)(9)
                of the Act) a Trust or investment adviser or sub-adviser and who
                obtains information concerning recommendations made to any Fund
                of such Trust regarding the purchase or sale of securities by
                any Fund of such Trust.

                                       27

<PAGE>

                                                                   Appendix VIII

                          PIMCO FUNDS DISTRIBUTORS LLC

                   POLICY REGARDING SPECIAL TRADING PROCEDURES
                   FOR SECURITIES OF CERTAIN CLOSED-END FUNDS

                        Effective as of February 1, 2002

Introduction

         PIMCO Funds Distributors LLC (the "Company") has adopted Allianz
Dresdner Asset Management of America L.P.'s ("ADAMA") Insider Trading Policy and
Procedures (applicable to all personnel) which prohibits insider trading in any
securities, and prohibits all employees from improperly using or disclosing
material, non-public information, a copy of which has been supplied to you.
(ADAMA was formerly known as PIMCO Advisors L.P.) Any capitalized term not
otherwise defined in this Policy shall have the meaning set forth elsewhere in
the Company Code.

Persons to Whom this Special Trading Policy Applies

         This Special Trading Policy applies to all employees of the Company
("Covered Persons"), as well as to any transactions in securities participated
in by family members, trusts or corporations controlled by a Covered Person. In
particular, this Policy applies to securities transactions by:

         the Covered Person's spouse;
         the Covered Person's minor children;
         any other relatives living in the Covered Person's household;
         a trust in which the Covered Person has a beneficial interest, unless
         such Covered Person has no direct or indirect control over the trust;
         a trust as to which the Covered Person is a trustee;
         a revocable trust as to which the Covered Person is a settlor;
         a corporation of which the Covered Person is an officer, director or
         10% or greater stockholder; or
         a partnership of which the Covered Person is a partner (including
         most investment clubs),
         unless the Covered Person has no direct or indirect control over the
         partnership.

         The family members, trust and corporations listed above are hereinafter
referred to as "Related Persons."

Securities to which this special trading policy applies

         Unless stated otherwise, this Policy and the following Special Trading
Procedures apply to all transactions by Covered Persons and their Related
Persons involving any securities of the closed-end funds for which ADAMA or one
of its affiliates acts as an investment manager, investment advisor or
sub-advisor (the "Funds"). The current list of Funds is set forth listed on

                                       28

<PAGE>

Exhibit 1 hereto. For purposes hereof, the securities of the Funds are referred
to as the "Prohibited Securities." The Company may revise Exhibit 1 from time to
time; and, therefore, any Covered Person should contact his or her Compliance
Officer prior to executing a personal transaction involving any closed-end fund
that is managed, advised or sub-advised by ADAMA or any of its affiliates to
determine whether the securities involved in the proposed transaction are
Prohibited Securities.

Special Trading Procedures Relating to the Prohibited Securities

1.   Preclearance

     All investment transactions in Prohibited Securities in which a Covered
Person has or will acquire a Beneficial Ownership interest must be precleared by
a Compliance Officer.

     Preclearance shall be requested by completing and submitting a copy of the
applicable preclearance request form attached hereto as Exhibit 2 to a
Compliance Officer. No investment transaction subject to preclearance may be
effected prior to receipt of written or electronic authorization of the
transaction by a Compliance Officer. The authorization and the date of
authorization will be reflected on the preclearance request form. Unless
otherwise specified, that authorization shall be effective, unless revoked,
until the earlier of (a) the close of business on the day the authorization is
given, or (b) until you discover that the information on the preclearance
request form is no longer accurate.

     The Compliance Officer from whom authorization is sought may undertake such
investigation as he or she considers necessary to determine that the investment
transaction for which preclearance has been sought complies with the terms of
the Company's Code and this Policy and is consistent with the general principles
described at the beginning of the Company's Code.

2.   Post-Trade Reporting

     Each Covered Person shall submit to the Compliance Officer a report of
every securities transaction in Prohibited Securities in which he or she and any
of such Covered Person's Related Persons have participated as soon as
practicable following the transaction and in any event not later than the fifth
day after the end of the month in which the transaction occurred. The report
shall include: (1) the date of the transaction and the title and number of
shares or principal amount of each security involved; (2) the nature of the
transaction (i.e., purchase, sale or any other type of acquisition or
disposition); (3) the price at which the transaction was effected; and (4) the
name of the broker/dealer with or through whom the transaction was effected. In
addition, on an annual basis, each Covered Person must confirm the amount of
Prohibited Securities which such person and his/her Related Persons beneficially
own.

     Each Covered Person (and not the Company) is personally responsible for
insuring that his or her transactions comply fully with any and all applicable
securities laws, including, but not limited to, the restrictions imposed under
Sections 16(a) and 16(b) of the Securities Exchange Act of 1934 and Rule 144
under the Securities Act of 1933.

                                       29

<PAGE>

3.   Resolving Issues Concerning Insider Trading

     If you have any doubts or questions as to whether information is material
or non-public, or as to the applicability or interpretation of any of the
foregoing procedures, or as to the propriety of any action, you should contact a
Compliance Officer before trading or communicating the information to anyone.
Until these doubts or questions are satisfactorily resolved, you should presume
that the information is material and non-public and you should not trade in the
securities or communicate this information to anyone.

4.   Modifications and Waivers

     The Company reserves the right to amend or modify this Policy Statement at
any time. Waiver of any provision of this Policy Statement in a specific
instance may be authorized in writing by (i) the Compliance Officer or (ii) a
member of the Compliance Committee.

                                       30

<PAGE>

                                                                    Exhibit 1

                       List of Closed-End Funds

            PIMCO Commercial Mortgage Securities Trust

            Municipal Advantage Fund

            PIMCO Municipal Income Fund

            PIMCO California Municipal Income Fund

            PIMCO New York Municipal Income Fund

            PIMCO Corporate Income Fund

            The Emerging Markets Income Fund, Inc.

            The Emerging Markets Income Fund II, Inc.

            The Emerging Markets Floating Rate Fund, Inc.

            Global Partners Income Fund, Inc.

            Municipal Partners Fund, Inc.

            Municipal Partners Fund II, Inc.

                                       31

<PAGE>

                                                                       Exhibit 2

                      PIMCO FUNDS DISTRIBUTORS LLC ("PFD")

                            PRECLEARANCE REQUEST FORM

                                       for

                                CLOSED-END FUNDS

(1)   Name of employee requesting authorization:          ______________________

(2)   If different from #1, name of account where the
        trade will occur:                                 ______________________

(3)   Relationship of (2) to (1):                         ______________________

(4)   Name of Firm at which the account is held:          ______________________

(5)   Name of the Closed-End Fund:                        ______________________

(6)   Maximum number of shares to be purchased or sold:   ______________________

(7)   Check those that are applicable:

  ____Purchase  ____Sale  ____Market Order  ____Limit Order (Price of Limit
  Order: ______)



Prior to trading, you must consult with your Compliance Officer for authority to
trade.

(8)  Do you possess material nonpublic information regarding
     the Closed-End Fund/1/                                      ___ Yes  ___ No
                         -
(9)  Have you or any Related Account covered by the
     authorization provisions of the Code purchased or sold
     shares of the Closed-End Fund within the past 6 months?     ___ Yes  ___ No


_______
/1/  Please note that employees are not permitted to acquire or sell securities
     when they possess material nonpublic information regarding the security or
     the issuers of the security.

                                       32

<PAGE>

I have read the Amended and Restated Code of Ethics for PFD dated February 1,
2002, within the prior 12 months and believe that the proposed trade fully
complies with the requirements of the Code.

                                                ________________________________
                                                Employee Signature


                                                ________________________________
                                                Print Name


                                                ________________________________
                                                Date Submitted

Authorized By: ____________________

Authorization Date: _______________



                       THIS TRADE MUST BE EXECUTED BY THE
                   CLOSE OF BUSINESS ON THE AUTHORIZATION DATE

                                       33

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(R)(2)
<SEQUENCE>22
<FILENAME>dex99r2.txt
<DESCRIPTION>CODE OF ETHICS FOR ALLIANZ DRESDNER
<TEXT>
<PAGE>

                                                                     Exhibit r.2

                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA
                                 CODE OF ETHICS
                            Effective January 1, 2002

                                  INTRODUCTION

This Code of Ethics (the "Code") is based on the principle that you, as an
officer or employee of Allianz Dresdner Asset Management of America L.P.
("ADAM") and its divisions or its subsidiaries, including Cadence Capital
Management, NFJ Investment Group, PIMCO Equity Advisors LLC, OpCap Advisors LLC,
Oppenheimer Capital LLC, OCC Distributors LLC, Allianz Hedge Fund Partners L.P.,
PIMCO Allianz Advisors LLC, Allianz Private Client Services LLC, PIMCO CD
Distributors LLC, and PIMCO Funds Advisors LLC, (collectively, ADAM or ADAM
Advisors), owe a fiduciary duty to the shareholders of the registered investment
companies (the Funds) and other clients (together with the Funds, the Advisory
Clients) for which ADAM serves as an adviser or subadviser. Accordingly, you
must avoid activities, interests and relationships that might interfere or
appear to interfere with making decisions in the best interests of our Advisory
Clients. If you are covered by another code in the ADAM Advisors or Allianz
group of companies, this Code shall not apply to you.

         At all times, you must:

         1.    Place the interests of our Advisory Clients first. In other
               words, as a fiduciary you must scrupulously avoid serving your
               own personal interests ahead of the interests of our Advisory
               Clients. You may not cause an Advisory Client to take action,
               or not to take action, for your personal benefit rather than
               the benefit of the Advisory Client. For example, you would
               violate this Code if you caused an Advisory Client to purchase
               a security you owned for the purpose of increasing the price
               of that Security. Likewise, in connection with your regular
               functions and duties, you would violate this Code if you made
               a personal investment in a security that might be an
               appropriate investment for an Advisory Client without first
               considering the security as an investment for the Advisory
               Client.

               If you are an employee who, in connection with your regular
               functions and duties, makes (or participates in making)
               recommendations regarding the purchase or sale of securities
               by any Advisory Client, or provides information or advice to a
               Portfolio Manager or helps execute a Portfolio Manager's
               recommendations, you will be deemed a "Portfolio Employee".
               Generally, Portfolio Employees include, but is not limited to,
               Portfolio Managers, Research Analysts, Traders and certain
               personnel in operations.

               You will be deemed an "Access Person" if you are an employee
               of an ADAM Advisor who may have access to or obtains
               information regarding the day-to day investment activities of
               an Advisory Client.

         2.    Conduct all of your personal securities transactions in full
               compliance with this Code and the ADAM Insider Trading Policy.
               ADAM encourages you and your family to develop personal
               investment programs. However, you must not take any action in
               connection with your personal investments that could cause
               even the appearance of unfairness or impropriety. Accordingly,
               you must comply with the policies and procedures set forth in
               this Code. In addition, you must comply with the policies and
               procedures set forth in the ADAM Insider Trading Policy and
               Procedures, which is attached to this Code as Appendix I.
               Questions regarding these policies and procedures should be
               addressed with your local compliance officer.

         3.    Avoid taking inappropriate advantage of your position. The
               receipt of investment opportunities, gifts or gratuities from
               persons seeking business with ADAM directly or on behalf of an
               Advisory Client of an ADAM Advisor could call into question
               the independence of your business judgment. In addition, you
               may not use personal or account information of any client of
               ADAM except as permitted by ADAM's Privacy Policy (Appendix
               VIII to this Code). Accordingly, you must comply with the
               policies and procedures set forth in this Code under the
               heading Fiduciary Duties.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                 <C>
PERSONAL SECURITIES TRANSACTIONS ...............................................     3
     General Provisions ........................................................     3
     Securities ................................................................     3
     Beneficial Ownership ......................................................     4
     Exempt Securities .........................................................     5
     Exempt Transactions .......................................................     5
     Preclearance Procedures ...................................................     7
     Initial Public Offerings ..................................................     8
     Private Placements ........................................................     8
     Short-term Trading Profits ................................................     8
     Puts, Calls, Short Sales ..................................................     8
     Use of Broker-dealers .....................................................     9
REPORTING ......................................................................     9
     Initial and Annual Reports ................................................     9
     Reporting of Transactions and Brokerage Accounts ..........................     9
     Certificate of Compliance With Code .......................................    10
FIDUCIARY DUTIES ...............................................................    10
     Gifts .....................................................................    10
     Service as a Director .....................................................    10
     Privacy Policy ............................................................    11
     Remedial Actions ..........................................................    11
REPORTS TO MANAGEMENT AND TRUSTEES .............................................    11
     Reports of Significant Remedial Action ....................................    11
     Annual Reports ............................................................    11

THE FOLLOWING APPENDICES ARE ATTACHED TO THE CODE:

I.   Insider Trading Policy and Procedures .....................................    12

II.  Form for Acknowledgement of Receipt of this Code ..........................    19

III. Form for Initial and Annual Report of Personal Securities Holdings ........    20

IV.  Form for Reporting Brokerage Accounts and Non-Broker Transactions .........    22

V.   Form for Annual Certification of Compliance with this Code ................    24

VI.  Form for Preclearance of Personal Securities Transactions .................    25

VII. Form for Private Placements ...............................................    26

VII. Privacy Policy ............................................................    27
</TABLE>

                                    Questions

Questions regarding this Code should be addressed to your local Compliance
Officer. As of the effective date of this Code, the Compliance Officers are:
Anne-Marie Pitale (Allianz Dresdner Asset Management of America, PIMCO Equity
Advisors, Oppenheimer Capital, OCC Distributors, Allianz Hedge Fund Partners,
PIMCO Allianz Advisors, Allianz Private Client Services, PIMCO CD Distributors,
PIMCO Funds Advisors and OpCap Advisors), Virginia Camp (ADAM (West)), Dave
Breed and Mary Ellen Melendez (Cadence), and Betty Holcomb and John Johnson
(NFJ). The Compliance Committee members are Frank Poli, Anne-Marie Pitale,
Virginia Camp and Stewart Smith.

<PAGE>

                        PERSONAL SECURITIES TRANSACTIONS

I.   GENERAL PROVISIONS

You may not engage in, or permit any other person or entity to engage in, any
purchase or sale of any security of which you have, or by reason of the
transaction will acquire, Beneficial Ownership, unless (i) the transaction is in
an exempt security, (ii) the transaction is an Exempt Transaction or (iii) you
have complied with the procedures set forth in the Code.

Covered Securities

The following list identifies the "Securities" that are deemed subject to the
requirements of the Code:

Any note, stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate or subscription,
transferable share, investment contract, voting-trust certificate, certificate
of deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option or privilege on any security
(including a certificate of deposit) or on any group or index of securities
(including any interest therein or based on the value thereof), or any put,
call, straddle, option or privilege entered into on a national securities
exchange relating to foreign currency, or, in general, any interest or
instrument commonly known as a security, or any certificate of interest or
participation in, temporary or interim certificate for, receipt for, guarantee
of, or warrant or right to subscribe to or purchase, any security. The purchase
or sale of a Security includes, among other things, the writing of an option to
purchase or sell a Security. It also includes security futures/1/ and futures
and options on any group or index of Securities (as defined in the Investment
Company Act of 1940).

Transactions in the following securities are exempt from the procedures set
forth in the Code:

Commodities, futures and options traded on a commodity exchange, including
currency futures.

- --------------------------------------------------------------------------------
/1/ A security future is a contract of sale for future delivery of a single
security or a narrow-based security index.

                                        3

<PAGE>

Beneficial Ownership

For purposes of this Code, Beneficial Ownership shall be interpreted in the same
manner as the definition contained in the provision of Section 16 of the
Securities Exchange Act of 1934 under Rule 16a-1(a)(2).

Generally, you are considered to have Beneficial Ownership of Securities if you
have or share a direct or indirect Pecuniary Interest in the Securities.

You have a Pecuniary Interest in Securities if you have the opportunity to
directly benefit or or share in any profit derived from a transaction in the
Securities.

The following are examples of a person having Beneficial Ownership of
Securities:

     1.   Securities held in the name of the officer or employee of any ADAM
          Advisor.

     2.   Securities held by members of your immediate family sharing the same
          household.

          Immediate family includes any spouse, child, stepchild, grandchild,
          parent, stepparent, grandparent, spouse, sibling, mother-in-law,
          father-in-law, son-in-law, daughter-in-law, brother-in-law, or
          sister-in-law, and any adoptive relationship.

     3.   Your interest as a general partner in Securities held by a general or
          limited partnership.

     4.   Your interest as a manager-member in the Securities held by a limited
          liability company.

     5.   Your ownership of Securities as a trustee where either you or members
          of your immediate family have a vested interest in the principal or
          income of the trust.

     6.   Your ownership of a vested beneficial interest in a trust.

     7.   Your status as a settlor of a trust, unless the consent of all of the
          beneficiaries is required in order for you to revoke the trust.

You do not have an indirect Pecuniary Interest in Securities held by a
corporation, partnership, limited liability company or other entity in which you
hold an equity interest, unless you are a controlling equityholder or you have
or share investment control over the Securities held by the entity.

The final determination of Beneficial Ownership is a question to be determined
in light of facts for each particular case. If in doubt, employees should
consult with their local compliance officer.

                                       4

<PAGE>

Exempt Securities

The following are Securities that are exempt from the requirements under the
Code ("Exempt Securities"):

     1.   Direct obligations of the Government of the United States, including
          fixed income securities issued by agencies or instrumentalities of, or
          are unconditionally guaranteed by the Government of the U.S.

     2.   Bankers' acceptances, bank certificates of deposit, commercial paper
          and high quality short-term debt instruments/2/.

     3.   Shares of registered open-end investment companies.

     4.   Share of registered closed-end funds with the exception of Funds that
          are managed by ADAM. Closed-end Funds currently managed by ADAM are 1)
          Municipal Advantage Fund, 2) PIMCO Commercial Mortgage Trust, 3) PIMCO
          Municipal Income Fund, 4) PIMCO California Municipal Income Fund, and
          5) PIMCO New York Municipal Income Fund.

     5.   Exchange traded futures and options on broadly-based indices.

Exempt Transactions

The following are transactions that are exempt from the requirements of the
Code:

     1.   Purchases or sales of up to $100,000 per calendar month per issuer of
          fixed-income Securities issued by U.S. corporations.

     2.   Purchases or sales of up to $1,000,000 per calendar month per issuer
          of fixed-income Securities issued by qualified foreign governments/3/.

     3.   Purchases of Securities under dividend reinvestment plans.

     4.   Purchases of Securities by exercise of rights issued to the holders of
          a class of Securities pro rata, to the extent they are issued with
          respect to Securities of which you have Beneficial Ownership.

     5.   Acquisitions or dispositions of Securities as the result of a stock
          dividend, stock split, reverse stock split, merger, consolidation,
          spin-off or other similar corporate distribution or reorganization
          applicable to all holders of a class of Securities of which you have
          Beneficial Ownership.

- -------------------------------------------------------------------------------
     /2/ Defined as any instrument that has a maturity at issuance of less than
     366 days and that is rated by one of the two highest rating categories by a
     Nationally Recognized Statistical Rating Organization, including repurchase
     agreements.

     /3/ A qualified foreign government is a national government of a developed
     country with outstanding fixed-income securities in excess of fifty billion
     dollars.

                                       5

<PAGE>

     *6.  Purchases or sales of up to 2,000 shares per day per issuer, of
          large-cap issuers/4/.

     *7.  Purchases or sales of up to the lesser of 1000 shares or $10,000 per
          calendar week, per issuer, of stock of issuers other than large-cap
          issuers.

          *Employees that are permitted to effect transactions under exemption 6
          & 7 are hereby referred to as "Non-Access Persons". Exemptions 6 and 7
          do not apply to employees of PIMCO Equity Advisors and Allianz Private
          Client Services as well as to employees that have been identified as
          Access Persons or Portfolio Employees of other ADAM Advisors. Such
          Employees must preclear all transactions unless otherwise exempt under
          the Code.

     8.   For employees of NFJ, shares of any issuer not owned in NFJ's Advisory
          Client's accounts and not contemplated for purchase for any Advisory
          Clients, based upon the determination by NFJ that because of the
          investment objectives and policies of the Advisory Clients, such
          securities are not eligible for purchase by NFJ for the Advisory
          Clients.

     9.   Dispositions of Securities of a private issuer, subject to the
          restrictions on participation in private placements set forth in the
          Code under Private Placements.

     10.  Short sales, puts, calls, straddles, or options of any Security
          otherwise permitted pursuant to the provisions in the Code. If you are
          a Portfolio Employee of any ADAM Advisor or an Oppenheimer Capital
          employee, you are not permitted to effect such transactions. Please
          refer to the section "Puts, Call, Short Sales".

     11.  Other specific transactions as may be exempted by a Compliance Officer
          or the Compliance Committee based upon a determination that the
          transaction(s) do not interfere or appear to interfere with making
          decisions in the best interest of our advisory clients. On a
          case-by-case basis, a Compliance Officer or the Compliance Committee
          may exempt a specific transaction from any of the provisions of this
          Code except the provisions set forth below under Reporting. All
          requests to exempt a transaction must be in writing and forwarded to
          your local compliance officer for approval prior to your executing the
          transaction.

                                     CAUTION

Qualified foreign governments, large-cap issuers and broadly based indices may
change from time to time. Accordingly, you may purchase Securities deemed to be
an Exempt Transaction only to find that when you wish to sell them, you may not
do so without prior approval from your local Compliance Officer.

- --------------------------------------------------------------------------------

/4/ A large-cap issuer is an issuer with a total market capitalization in excess
of one billion dollars and an average daily trading volume during the preceding
calendar quarter, on the principal securities exchange (including NASDAQ) on

                                        6

<PAGE>

which its shares are traded, in excess of 100,000 shares. Information concerning
large-cap issuers is available on the Internet. If you are unsure whether a
security is a large-cap issue, contact a Compliance Officer.

Preclearance Requirements

     1.   All officers and employees of an ADAM Advisor, with the exception of
          Non-Access Persons, must preclear all personal securities transaction
          by submitting a completed PreClearance Request Form (Appendix VI) to
          designated preclearance personnel/5/. Exempt Securities and Exempt
          Transactions, as defined in the Code, are not subject to preclearance
          requirements.

     2.   Securities may not be purchased or sold by an employee if, at the time
          of preclearance, there is a pending buy or sell order on the relevant
          trading desk on behalf of an Advisory Client in the same Security or
          an equivalent Security/6/.

     3.   The Securities may not be purchased or sold if, at the time of
          preclearance, you knew or should have known that an Advisory Client
          would be trading in the same security or an equivalent Security on the
          same day or in the next seven days.

     4.   If you are a Portfolio Employee (or a person that has been identified
          as having access to the same information, i.e. Portfolio Manager,
          Research Analyst, Trader, Operations), you may not purchase or sell
          Securities during the period beginning seven days before and ending
          seven days after the day on which an Advisory Client trades in the
          same Security or an equivalent Security.

          NOTE; If you are a Portfolio Employee (or a person that has been
          identified as having access to the same information), and you preclear
          a Securities transaction prior to the commencement of an Advisory
          Client trading in the same Security or an equivalent Security, it may
          not be deemed a violation of this Code unless you knew or should have
          known that the Advisory Client would be trading in that Security or an
          equivalent Security within seven days after your trade.

     5.   If you are an officer or employee of Oppenheimer Capital, preclearance
          may be granted if, in comparing the net value of OpCap's trading in
          the Security to the total market volume of trading in the Security:
          (i) the net volume of OpCap's trading in the Security amounts to less
          than 1% of the total market volume of trading in the Security for the
          past five days; (ii) the net volume of OpCap's trading in the Security
          amounts to less than 1% of the total volume of trading in the Security
          for the previous day; and (iii) OpCap has not transacted in the
          Security on the day of preclearance and has no pending orders in the
          Security at the time of preclearance.

- --------------------------------------------------------------------------------

/5/ If you are an officer or employee of PIMCO Equity Advisors, Allianz Private
Client Services or have been identified as an Access Person or Portfolio
Employee of an ADAM Advisor, you are required to submit the PreClearance Request
Form to the relevant Trading Desk for approval, prior to your effecting the
purchase or sale. The Trading Department must preclear your trade in writing,
and the purchase or sale must be executed by the close of business on the day
preclearance is given. Preclearance forms must be submitted immediately upon
trade execution to the Compliance Department.

/6/ An equivalent Security of a given Security is (i) a Security issuable upon
exercise, conversion or exchange of the given Security, (ii) a Security
exercisable to purchase, convertible into or exchangeable for the given
Security, or (iii) a Security otherwise representing an interest in or based on
the value of the given Security.

                                        7

<PAGE>

                            Initial Public Offerings

If you are a Portfolio Employee, you may not acquire Beneficial Ownership of any
Securities in an initial public offering (as defined in Rule 17j-1).

                               Private Placements

If you are a Portfolio Employee, you may not acquire Beneficial Ownership of any
Securities in a private placement/7/, unless you have received prior written
approval from the local CIO and your local compliance officer. Approval will be
not be given unless a determination is made that the investment opportunity
should not be reserved for one or more Advisory Clients, and that the
opportunity to invest has not been offered to you solely by virtue of your
position. The form for requesting private placement approval is attached to this
Code (Appendix VII).

If you are a Portfolio Employee and you have acquired Beneficial Ownership of
Securities in a private placement, you must disclose your investment when you
play a part in any consideration of an investment by an Advisory Client in the
issuer of the Securities, and any decision to make such an investment must be
independently reviewed by a Portfolio Manager who does not have Beneficial
Ownership of any Securities of the issuer.

Due to the nature of their business, employees of the Allianz Hedge Fund
Partners are subject to separate procedures that are consistent with ADAM's
fiduciary obligations and policy set forth above.

                           Short-Term Trading Profits

If you are a Portfolio Employee, you may not profit from the purchase and sale,
or sale and purchase, within 60 calendar days, of the same Securities or
equivalent Securities (other than Exempt Securities) of which you have
Beneficial Ownership. Any such short-term trade must be unwound, or if that is
not practical, the profits must be contributed to a charitable organization.

You are considered to profit from a short-term trade if Securities of which you
have Beneficial Ownership are sold for more than the purchase price of the same
Securities or equivalent Securities, even though the Securities purchased and
the Securities sold are held of record or beneficially by different persons or
entities.

                            Puts, Calls, Short Sales

If you are a Portfolio Employee of any ADAM Advisor or an employee of
Oppenheimer Capital, you are prohibited from transactions involving puts, calls,
straddles, options and/or short sales except for Exempt Transactions,
transactions in Exempt Securities or transactions involving a program approved
by the local CIO and compliance officer.

- --------------------------------------------------------------------------------
/7/ A private issuer is a corporation, partnership, limited liability company or
other entity which has no outstanding publicly-traded Securities, and no
outstanding Securities which are exercisable to purchase, convertible into or
exchangeable for publicly-traded Securities. You will have Beneficial Ownership
of Securities held by a private issuer whose equity Securities you hold, unless
you are not a controlling equity holder and do not have or share investment
control over the Securities held by the entity.

                                        8

<PAGE>

                  Use of Broker-Dealers and Brokerage Accounts

To assist in the implementation of the Code and to aid in meeting regulatory
requirements, all employees of ADAM Advisors that are located in the New York
and certain employees in the Stamford offices, must, with limited exceptions,
maintain all brokerage and trading accounts in which they have an interest, with
a designated broker, currently Charles Schwab & Co.

A new employee is required to transfer his/her account to the designated broker
within a reasonable period of time from their initial commencement of employment
with an ADAM Advisor. Employees are responsible for all costs associated with
transferring accounts. When you begin your employment at an ADAM Advisor, and
annually thereafter on request, you must complete and submit the "Initial and
Annual Report of Personal Security Holdings" within 10 days following the
commencement of employment with an ADAM Advisor (Appendix III). If you are a new
employee and still maintain non-approved brokerage account(s) without
appropriate approval, you must disclose this to Compliance immediately.

All employees that, upon approval from Compliance, hold brokerage account(s)
other than with a designated broker, are responsible for instructing each
broker-dealer that holds an account, to send duplicate copies of all transaction
confirmations and statements directly to your local compliance department. This
requirement does not apply to accounts that 1) are fully managed by a third
party, 2) exclusively hold Exempt Securities, and 3) are held at a mutual fund
company.

Most brokers require that an ADAM Advisor provide a "Rule 407" letter which
acknowledges that your account is held by such broker and requests that the
broker provide the relevant compliance department duplicate statements and
confirms. Your local compliance officer will execute this letter for any account
that has been approved by Compliance.

Employees are permitted to maintain fully discretionary, managed account(s) at
any brokerage house/investment advisor. These accounts are not subject to the
Code but require approval by Compliance.

                           REPORTING AND CERTIFICATION

Initial and Annual Reports

When you begin your employment at an ADAM Advisor, and annually thereafter on
request, you must complete and submit the "Initial and Annual Report of Personal
Security Holdings" within 10 days following the commencement of employment as
well as 10 days following the annual request (Appendix III).

Reporting of Transactions and Brokerage Accounts

                                        9

<PAGE>

You are required to report all brokerage accounts and all Securities
Transactions that are not transactions in Exempt Securities. To satisfy these
requirements; (i) you must ensure that each registered broker-dealer, who
maintains a non-designated Schwab account for Securities that you have
Beneficial Ownership, to provide your local compliance officer with duplicate
copies of confirmations and statements within 10 days of the end of each
calendar quarter.
The confirmations and statements required above must, in the aggregate, provide
enough detail that would show the name of the broker, account number, date of
transaction, whether it was a buy/sell, security name, amount of transaction,
and the price. If the broker cannot provide duplicate confirmations and
statements,, you must then complete and submit a "Brokerage Account and
Non-Broker Transaction Report" within 10 days of the end of each calendar
quarter (Appendix IV).

Certificate of Compliance with the Code

As a newly hired employee of an ADAM Advisor, you must certify that you have
read, understand and will comply with the Code. A form for this purpose is
attached to this Code as Appendix II.

As a continuing employee of an ADAM Advisor, you must annually certify that you
have read, understand, have complied with and will continue to comply with the
Code. A form for this purpose is attached to the Code as Appendix V.

                                FIDUCIARY DUTIES

Gifts

You may not accept any investment opportunity, gift, gratuity or other thing of
more than nominal value, from any person or entity that does business, or
desires to do business, with an ADAM Advisor directly or on behalf of an
Advisory Client. You may accept gifts from a single giver so long as their
aggregate annual value does not exceed the equivalent of $100. You may attend
business meals, business related conferences, sporting events and other
entertainment events at the expense of a giver, so long as the expense is
reasonable and both you and the giver are present. You must obtain prior written
approval from your supervisor (the person to whom you report) for all air
travel, conferences, and business events that require overnight accommodations.
You must provide a copy of such written approval to your local compliance
officer.

Service as a Director

If you are a Portfolio Employee, you may not serve on the board of directors or
other governing board of a publicly traded entity, unless you have received the
prior written approval of the Chief Legal Officer of ADAM. Approval will not be
given unless a determination is made that your service on the board would be
consistent with the interests of the Advisory Clients. If you are permitted to
serve on the board of a publicly traded entity, you will be isolated from those
Portfolio Employees who make investment decisions with respect to the securities
of that entity, through a "Chinese Wall" or other procedures.

                                       10

<PAGE>

Privacy Policy

You must abide by the ADAM's Privacy Policy (the "Privacy Policy") which is
attached to this Code of Ethics as Appendix VIII. The Privacy Policy is designed
to protect personal and account information of clients from disclosure to any
non-affiliated third parties, except as required or permitted by law or certain
circumstances and when duly authorized by a compliance officer or director of
ADAM. You will be responsible for attesting to your compliance with the Privacy
Policy in your Annual Certification of Compliance.

Remedial Actions

The ADAM reserves the right to cancel any trade (without prior notice and at the
employee's expense) or to instruct the employee to cancel a trade at his/her
expense. Doubtful situations will be resolved by restricting the employee's
trading privileges or ADAM may suspend or revoke the employee's trading
privileges at any time. Employee trading violations can result in penalties
ranging from cancellation of an offending trade to termination of his/her
employment. Any loss from an impermissible trade will be charged to the employee
and any profits will be forfeited. Violations may also lead to civil or criminal
proceedings and penalties.

                       REPORTS TO MANAGEMENT AND TRUSTEES

Reports of Significant Remedial Action

The Chief Legal Officer of ADAM or his delegate will, on a timely basis inform
the management of ADAM and trustees of each Fund which is an Advisory Client an
ADAM Advisor, of each significant remedial action taken in response to a
violation of this Code. A significant remedial action means any action that has
a significant financial effect on the violator, such as disgorgement of profits,
imposition of a significant fine, demotion, suspension or termination.

Annual Reports

The Chief Legal Officer of ADAM or his delegate will report annually to the
management of ADAM and the trustees of each Fund which is an Advisory Client of
an ADAM Advisor, regarding efforts to ensure compliance by the directors,
officers and employees of ADAM and its affiliates that are subject to this Code.

The annual report will, at a minimum:

     1.   Describe any issues arising under the Code of Ethics or procedures
          since the last report to the trustees, as the case may be, including,
          but not limited to, information

                                       11

<PAGE>

          about material violations of the Code or procedures and sanctions
          imposed in response to the material violations; and;

     2.   Certify that ADAM, and its affiliates, have adopted procedures
          reasonably necessary to prevent all employees from violating the Code.


                                                                      Appendix I


                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA

                      Insider Trading Policy and Procedures

Section I. Policy Statement on Insider Trading

A.   Policy Statement on Insider Trading

Allianz Dresdner Asset Management of America L.P. ("ADAM") and its division or
its subsidiaries, including Cadence Capital Management, NFJ Investment Group,
PIMCO Equity Advisors LLC, OpCap Advisors LLC, Oppenheimer Capital LLC, OCC
Distributors LLC, Allianz Hedge Fund Partners L.P., PIMCO Allianz Advisors LLC,
Allianz Private Client Services LLC, PIMCO CD Distributors LLC, and PIMCO Funds
Advisors LLC, collectively, the Company, ADAM or ADAM Advisors) forbid any of
their officers, directors or employees from trading, either personally or on
behalf of others (such as, mutual funds and private accounts managed by an ADAM
Advisor), on the basis of material non-public information or communicating
material non-public information to others in violation of the law. This conduct
is frequently referred to as "insider trading". This is a group wide policy.

The term "insider trading" is not defined in the federal securities laws, but
generally is used to refer to the situation when a person trades while aware of
material non-public information or to communications of material non-public
information to others in breach of a duty of trust or confidence.

While the law concerning insider trading is not static, it is generally
understood that the law prohibits:

(1)       trading by an insider, while aware of material, non-public
          information; or

(2)       trading by a non-insider, while aware of material, non-public
          information, where the information was disclosed to the non-insider in
          violation of an insider's duty to keep it confidential; or

(3)       communicating material, non-public information to others in breach of
          a duty of trust or confidence.

This policy applies to every such officer, director and employee and extends to
activities within and outside their duties at the Company. Every officer,
director and employee must read and

                                       12

<PAGE>

retain this policy statement. Any questions regarding this policy statement and
the related procedures set forth herein should be referred to your local
compliance officer.

The remainder of this memorandum discusses in detail the elements of insider
trading, the penalties for such unlawful conduct and the procedures adopted by
the Company to implement its policy against insider trading.


1.   To Whom Does This Policy Apply?

This Policy applies to all employees, officers and directors (direct or
indirect) of the Company ("Covered Persons"), as well as to any transactions in
any securities participated in by family members, trusts or corporations
controlled by such persons. In particular, this Policy applies to securities
transactions by:

     the Covered Person's spouse;
     the Covered Person's minor children;
     any other relatives living in the Covered Person's household;
     a trust in which the Covered Person has a beneficial interest, unless such
     person has no direct or indirect control over the trust;
     a trust as to which the Covered Person is a trustee;
     a revocable trust as to which the Covered Person is a settlor;
     a corporation of which the Covered Person is an officer, director or 10% or
     greater stockholder; or
     a partnership of which the Covered Person is a partner (including most
     investment clubs) unless the Covered Person has no direct or indirect
     control over the partnership.

2.   What is Material Information?

Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment decisions,
or information that is reasonably certain to have a substantial effect on the
price of a company's securities.

Although there is no precise, generally accepted definition of materiality,
information is likely to be "material" if it relates to significant changes
affecting such matters as:

     dividend or earnings expectations;
     write-downs or write-offs of assets;
     additions to reserves for bad debts or contingent liabilities;
     expansion or curtailment of company or major division operations;
     proposals or agreements involving a joint venture, merger, acquisition,
       divestiture, or leveraged buy-out;
     new products or services;
     exploratory, discovery or research developments;
     criminal indictments, civil litigation or government investigations;
     disputes with major suppliers or customers or significant changes in

                                       13

<PAGE>

      the relationships with such parties;
     labor disputes including strikes or lockouts;
     substantial changes in accounting methods;
     major litigation developments;
     major personnel changes;
     debt service or liquidity problems;
     bankruptcy or insolvency;
     extraordinary management developments;
     public offerings or private sales of debt or equity securities;
     calls, redemptions or purchases of a company's own stock;
     issuer tender offers; or
     recapitalizations.

Information provided by a company could be material because of its expected
effect on a particular class of the company's securities, all of the company's
securities, the securities of another company, or the securities of several
companies. Moreover, the resulting prohibition against the misuses of "material"
information reaches all types of securities (whether stock or other equity
interests, corporate debt, government or municipal obligations, or commercial
paper) as well as any option related to that security (such as a put, call or
index security).

Material information does not have to relate to a company's business. For
example, in Carpenter v. U.S., 108 U.S. 316 (1987), the Supreme Court considered
as material certain information about the contents of a forthcoming newspaper
column that was expected to affect the market price of a security. In that case,
a reporter for The Wall Street Journal was found criminally liable for
disclosing to others the dates that reports on various companies would appear in
the Journal and whether those reports would be favorable or not.

3.   What is Non-public Information?

In order for issues concerning insider trading to arise, information must not
only be "material", it must be "non-public". "Non-public" information is
information which has not been made available to investors generally.
Information received in circumstances indicating that it is not yet in general
circulation or where the recipient knows or should know that the information
could only have been provided by an "insider" is also deemed "non-public"
information.

At such time as material, non-public information has been effectively
distributed to the investing public, it is no longer subject to insider trading
restrictions. However, for "non-public" information to become public
information, it must be disseminated through recognized channels of distribution
designed to reach the securities marketplace.

To show that "material" information is public, you should be able to point to
some fact verifying that the information has become generally available, for
example, disclosure in a national business and financial wire service (Dow Jones
or Reuters), a national news service (AP or UPI), a national newspaper (The Wall
Street Journal, The New York Times or Financial Times), or a publicly
disseminated disclosure document (a proxy statement or prospectus). The
circulation of rumors or "talk on the street", even if accurate, widespread and
reported in the media, does not constitute the requisite public disclosure. The
information must not only be publicly disclosed, there must also be adequate
time for the market as a whole to digest the information. Although timing may
vary depending upon the circumstances, a good rule of thumb is that information
is considered non-public until the third business day after public disclosure.

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<PAGE>

Material non-public information is not made public by selective dissemination.
Material information improperly disclosed only to institutional investors or to
a fund analyst or a favored group of analysts retains its status as "non-public"
information which must not be disclosed or otherwise misused. Similarly, partial
disclosure does not constitute public dissemination. So long as any material
component of the "inside" information possessed by the Company has yet to be
publicly disclosed, the information is deemed "non-public" and may not be
misused.

Information Provided in Confidence. It is possible that one or more directors,
officers, or employees of ADAM may become temporary "insiders" because of a duty
of trust or confidence. A duty of trust or confidence can arise: (1) whenever a
person agrees to maintain information in confidence; (2) when two people have a
history, pattern, or practice of sharing confidences such that the recipient of
the information knows or reasonably should know that the person communicating
the material non-public information expects that the recipient will maintain its
confidentiality; or (3) whenever a person receives or obtains material
non-public information from certain close family members such as spouses,
parents, children and siblings. For example, personnel at ADAM may become
insiders when an external source, such as a company whose securities are held by
one or more of the accounts managed by an ADAM Advisor, discloses material,
non-public information to ADAM Advisor's portfolio managers or analysts with the
expectation that the information will remain confidential.

As an "insider", ADAM has a duty not to breach the trust of the party that has
communicated the "material, non-public" information by misusing that
information. This duty may arise because an ADAM Advisor has entered or has been
invited to enter into a commercial relationship with the company, client or
prospective client and has been given access to confidential information solely
for the corporate purposes of that company, client or prospective client. This
duty remains whether or not an ADAM Advisor ultimately participates in the
transaction.

Information Disclosed in Breach of a Duty. Analysts and portfolio managers at an
ADAM Advisor must be especially wary of "material, non-public" information
disclosed in breach of corporate insider's duty of trust or confidence that he
or she owes the corporation and shareholders. Even where there is no expectation
of confidentiality, a person may become an "insider" upon receiving material,
non-public information in circumstances where a person knows, or should know,
that a corporate insider is disclosing information in breach of a duty of trust
and confidence that he or she owes the corporation and its shareholders. Whether
the disclosure is an improper "tip" that renders the recipient a "tippee"
depends on whether the corporate insider expects to benefit personally, either
directly or indirectly, from the disclosure. In the context of an improper
disclosure by a corporate insider, the requisite "personal benefit" may not be
limited to a present or future monetary gain. Rather, a prohibited personal
benefit could include a reputational benefit, an expectation of a "quid pro quo"
from the recipient or the recipient's employer by a gift of the "inside"
information.

A person may, depending on the circumstances, also become an "insider" or
"tippee" when he or she obtains apparently material, non-public information by
happenstance, including information derived from social situations, business
gatherings, overheard conversations, misplaced documents, and "tips" from
insiders or other third parties.

                                       15

<PAGE>

4.   Identifying Material Information

Before trading for yourself or others, including investment companies or private
accounts managed by the Company, in the securities of a company about which you
may have potential material, non-public information, ask yourself the following
questions:

i.   Is this information that an investor could consider important in making his
     or her investment decisions? Is this information that could substantially
     affect the market price of the securities if generally disclosed?

ii.  To whom has this information been provided? Has the information been
     effectively communicated to the marketplace by being published in The
     Financial Times, Reuters, The Wall Street Journal or other publications of
     general circulation?

Given the potentially severe regulatory, civil and criminal sanctions to which
you the Company and its personnel could be subject, any director, officer and
employee uncertain as to whether the information he or she possesses is
"material non-public" information should immediately take the following steps:

i.   Report the matter immediately to a Compliance Officer or the Chief Legal
     Officer of ADAM;

ii.  Do not purchase or sell the securities on behalf of yourself or others,
     including investment companies or private accounts managed by an ADAM
     Advisor; and

iii. Do not communicate the information inside or outside the Company, other
     than to a Compliance Officer or the Chief Legal Officer of ADAM.

After the Compliance Officer or Chief Legal Officer has reviewed the issue, you
will be instructed to continue the prohibitions against trading and
communication or will be allowed to trade and communicate the information.

5.   Penalties for Insider Trading

Penalties for trading on or communicating material non-public information are
severe, both for individuals involved in such unlawful conduct and their
employers. A person can be subject to some or all of the penalties below even if
he or she does not personally benefit from the violation. Penalties include:
civil injunctions, treble damages, disgorgement of profits, jail

                                       16

<PAGE>

sentences, fines for the person who committed the violation of up to three
times, the profit gained or loss avoided, whether or not the person actually
benefited, and fines for the employer or other controlling person of up to the
greater of $1,000,000 or three times the amount of the profit gained or loss
avoided.

In addition, any violation of this policy statement can be expected to result in
serious sanctions by the Company, including dismissal of the persons involved.

                                       17

<PAGE>

Section II. Procedures to Implement the Policy Against Insider Trading

A.   Procedures to Implement the Policy Against Insider Trading

The following procedures have been established to aid the officers, directors
and employees of an ADAM Advisor in avoiding insider trading, and to aid an ADAM
Advisor in preventing, detecting and imposing sanctions against insider trading.
Every officer, director and employee of an ADAM Advisor must follow these
procedures or risk serious sanctions, including dismissal, substantial personal
liability and criminal penalties.

Trading Restrictions and Reporting Requirements

1.   No employee, officer or director of the Company who is aware of material
     non-public information relating to the Company or any of its affiliates or
     subsidiaries, including Allianz AG, may buy or sell any securities of the
     Company, including Allianz AG, or engage in any other action to take
     advantage of, or pass on to others, such material non-public information.

2.   No employee, officer or director of the Company who is aware of material
     non-public information which relates to any other company or entity in
     circumstances in which such person is deemed to be an insider or is
     otherwise subject to restrictions under the federal securities laws may buy
     or sell securities of that company or otherwise take advantage of, or pass
     on to others, such material non-public information.

3.   No employee, officer or director of ADAM shall engage in a securities
     transaction with respect to the securities of Allianz AG, except in
     accordance with the specific procedures published from time to time by
     ADAM.

4.   No employee shall engage in a personal securities transaction with respect
     to any securities of any other company, except in accordance with the
     specific procedures set forth in ADAM's Code of Ethics.

5.   Employees shall submit reports concerning each securities transaction in
     accordance with the terms of the Code of Ethics and verify their personal
     ownership of securities in accordance with the procedures set forth in the
     Code of Ethics.

6.   Because even inadvertent disclosure of material non-public information to
     others can lead to significant legal difficulties, officers, directors and
     employees of ADAM should not discuss any potentially material non-public
     information concerning ADAM or other companies, including other officers,
     employees and directors, except as specifically required in the performance
     of their duties

                                       18

<PAGE>

B.   Chinese Wall Procedures

The Insider Trading and Securities Fraud Enforcement Act in the US requires the
establishment and strict enforcement of procedures reasonably designed to
prevent the misuse of "inside" information/1/. Accordingly, you should not
discuss material non-public information about ADAM or other companies with
anyone, including other employees, except as required in the performance of your
regular duties. In addition, care should be taken so that such information is
secure. For example, files containing material non-public information should be
sealed; access to computer files containing material non-public information
should be restricted.

C.   Resolving Issues Concerning Insider Trading

The federal securities laws, including the US laws governing insider trading,
are complex. If you have any doubts or questions as to the materiality or
non-public nature of information in your possession or as to any of the
applicability or interpretation of any of the foregoing procedures or as to the
propriety of any action, you should contact your Compliance Officer. Until
advised to the contrary by a Compliance Officer, you should presume that the
information is material and non-public and you should not trade in the
securities or disclose this information to anyone.

_________________
/1/ The antifraud provisions of United States securities laws reach insider
trading or tipping activity worldwide which defrauds domestic securities
markets. In addition, the Insider Trading and Securities Fraud Enforcement Act
specifically authorizes the SEC to conduct investigations at the request of
foreign governments, without regard to whether the conduct violates United
States law.

                                       19

<PAGE>

                                                                     APPENDIX II

                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA

                          ACKNOWLEDGMENT CERTIFICATION

                                 CODE OF ETHICS
                                       and
                      INSIDER TRADING POLICY AND PROCEDURES


I hereby certify that I have read and understand the attached Allianz Dresdner
Asset Management of America's Code of Ethics and Insider Trading Policy and
Procedures. Pursuant to such Code, I recognize that I must disclose or report
all personal securities holdings and transactions required to be disclosed or
reported thereunder and comply in all other respects with the requirements of
the Code. I also agree to cooperate fully with any investigation or inquiry as
to whether a possible violation of the foregoing Code has occurred/2/. I
understand that any failure to comply in all aspects with the foregoing and
these policies and procedures may lead to sanctions including dismissal.


Date: __________________________       ______________________________
                                       Signature



                                       ______________________________
                                       Print Name

_____________________
/2/ The antifraud provisions of United States securities laws reach insider
trading or tipping activity worldwide which defrauds domestic securities
markets. In addition, the Insider Trading and Securities Fraud Enforcement Act
specifically authorizes the SEC to conduct investigations at the request of
foreign governments, without regard to whether the conduct violates United
States law.

                                       20

<PAGE>

                                                                    Appendix III

                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA

                          INITIAL AND ANNUAL REPORT OF
                          PERSONAL SECURITIES HOLDINGS

In accordance with the Allianz Dresdner Asset Management of America's Code of
Ethics, please provide a list of all Securities (other than Exempt Securities)
in which you or any account, in which you have a Pecuniary Interest, has a
Beneficial Interest and all Securities (other than Exempt Securities) in
non-client accounts for which you make investment decisions. This includes not
only securities held by brokers, but also Securities held at home, in safe
deposit boxes, or by an issuer.

(1)  Name of employee:                              ____________________________

(2)  SSN:                                           __________-______-__________

(3)  If different than #1, name of the person
     in whose name the account is held:             ____________________________

(4)  Relationship of (3) to (1):                    ____________________________

(5)  Broker(s) at which Account is Maintained:      ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

(6)  Account Number(s):                             ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

(7)  Telephone number(s) of Broker:                 ____________________________

                                                    ____________________________

                                                    ____________________________

                                       21

<PAGE>

                                                         Appendix III - (cont'd)

(8)  For each account, attach your most recent account statement listing
     Securities in that account. This information must be current as of a
     date no more than 30 days before this report is submitted. If you own
     Securities that are not listed in an attached account statement, list
     them below:

     Name of Security*      Quantity         Value             Custodian

1.   __________________    ___________    ___________     ___________________

2.   __________________    ___________    ___________     ___________________

3.   __________________    ___________    ___________     ___________________

4.   __________________    ___________    ___________     ___________________

5.   __________________    ___________    ___________     ___________________

*Including principal amount, if applicable.

(Attached separate sheet if necessary)

I certify that this form and the attached statements (if any) constitute all of
the Securities of which I have Beneficial Ownership as defined in the Code.


                                                  _____________________________
                                                   Signature


                                                   _____________________________
                                                   Print Name

Dated:   _________________

                                       22

<PAGE>

                                                                     Appendix IV

                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA

               BROKERAGE ACCOUNT AND NON-BROKER TRANSACTION REPORT

You may not engage, and you may not permit any other person or entity to engage,
in any purchase or sale of publicly-traded securities (other than Exempt
Securities) of which you have, or by reason of the transaction will acquire,
Beneficial Ownership, except through a registered broker-dealer.

You must also cause each broker-dealer who maintains an account for Securities
of which you have beneficial ownership, to provide to a Compliance Officer, on a
timely basis, duplicate copies of confirmations of all transactions in the
account and duplicate statements for the account and you must report to the
Compliance Officer, within 10 days of the occurrence, all transactions effected
without the use of a registered broker-dealer in Securities (other than
transactions in Exempt Securities).

I have requested that you receive duplicate confirms on my behalf from the
following brokers:

- --------------------------------------------------------------------------------
     Name            Broker           Account Number      Date Account Opened
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

The following are securities transactions that have not been reported and/or
executed other than through a Broker-Dealer (i.e., direct purchase of a private
placement.)

- --------------------------------------------------------------------------------
    Date      Buy/Sell     Security Name      Amount      Price    Broker/Issuer
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------

By signing this document, I am certifying that I have caused duplicate confirms
and duplicate statements to be sent to the Compliance Officer for every
brokerage account that trades in Securities other than Exempt Securities (as
defined in the Allianz Dresdner Asset Management of America's Code of Ethics).

_________________                           ____________________________________
Date                                        Signature

                                       23

<PAGE>

                                                            Appendix IV (cont'd)

1.   Transactions required to be reported. You should report every transaction
     in which you acquired or disposed of any beneficial ownership of any
     security during the calendar quarter. The term "beneficial ownership" is
     the subject of a long history of opinions and releases issued by the
     Securities and Exchange Commission and generally means that you would
     receive the benefits of owning a security. The term includes, but is not
     limited to the following cases and any other examples in the Code:

     (A)  Where the security is held for your benefit by others (brokers,
          custodians, banks and pledgees);

     (B)  Where the security is held for the benefit of members of your
          immediate family sharing the same household;

     (C)  Where securities are held by a corporation, partnership, limited
          liability company, investment club or other entity in which you have
          an equity interest if you are a controlling equityholder or you have
          or share investment control over the securities held by the entity;

     (D)  Where securities are held in a trust for which you are a trustee and
          under which either you or any member of your immediate family have a
          vested interest in the principal or income; and

     (E)  Where securities are held in a trust for which you are the settlor,
          unless the consent of all of the beneficiaries is required in order
          for you to revoke the trust.

     Notwithstanding the foregoing, none of the following transactions need be
     reported:

     (A)  Transactions in securities which are direct obligations of the United
          States;

     (B)  Transactions effected in any account over which you have no direct or
          indirect influence or control; or

     (C)  Shares of registered open-end investment companies.

2.   Security Name. State the name of the issuer and the class of the security
     (e.g., common stock, preferred stock or designated issue of debt
     securities) including the interest rate, principal amount and maturity
     date, if applicable. In the case of the acquisition or disposition of a
     futures contract, put, call option or other right (hereinafter referred to
     as "options"), state the title of the security subject to the option and
     the expiration date of the option.

3.   Futures Transactions. Please remember that duplicates of all Confirmations,
     Purchase and Sale Reports, and Month-end Statements must be sent to the
     firm by your broker. Please double check to be sure this occurs if you
     report a futures transaction. You should use the address below.

4.   Transaction Date. In the case of a market transaction, state the trade date
     (not the settlement date).

5.   Nature of Transaction (Buy or Sale). State the character of the transaction
     (e.g., purchase or sale of security, purchase or sale of option, or
     exercise of option).

6.   Amount of Security Involved (No. of Shares). State the number of shares of
     stock, the face amount of debt securities or other units of other
     securities. For options, state the amount of securities subject to the
     option. If your ownership interest was through a spouse, relative or other
     natural person or through a partnership, trust, other entity, state the
     entire amount of securities involved in the transaction. In such cases, you
     may also indicate, if you wish, the extent of your interest in the
     transaction.

7.   Purchase or Sale Price. State the purchase or sale price per share or other
     unit, exclusive of brokerage commissions or other costs of execution. In
     the case of an option, state the price at which it is currently
     exercisable. No price need be reported for transactions not involving cash.

8.   Broker, Dealer or Bank Effecting Transaction. State the name of the broker,
     dealer or bank with or through whom the transaction was effected.

9.   Signature.  Sign the form in the space provided.

10.  Filing of Report. A report should be filed NO LATER THAN 10 CALENDAR DAYS
     after establishing a new brokerage account or effecting a non-reported
     securities transaction with your local Compliance Officer.

                                       24

<PAGE>

                                                                      Appendix V

                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA

                       ANNUAL CERTIFICATION OF COMPLIANCE

I hereby certify that I have complied with the requirements of the Allianz
Dresdner Asset Management of America's Code of Ethics and Insider Trading Policy
and Procedures, for the year ended December 31, ____. Pursuant to the Code, I
have disclosed or reported all personal securities holdings and transactions
required to be disclosed or reported thereunder, and complied in all other
respects with the requirements of the Code including the Privacy Policy. I also
agree to cooperate fully with any investigation or inquiry as to whether a
possible violation of the Code has occurred.

Date: __________                                     ___________________________
                                                     Signature



                                                     ___________________________
                                                     Print Name

                                       25

<PAGE>

                                                                     Appendix VI

                        EMPLOYEE TRADE PRECLEARANCE FORM
                  PLEASE USE A SEPARATE FORM FOR EACH SECURITY

<TABLE>
<S>                                                                                                    <C>
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Employee (please print)

- ------------------------------------------------------------------------------------------------------------------------------------
Department                          Supervisor                        Telephone                        Date

- ------------------------------------------------------------------------------------------------------------------------------------
Broker                              Account Number                    Telephone                        Sales Representative
                                                                      (     )
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------

         [_]  Buy          [_] Sell                           Ticker Symbol           Price:   Limit _______         Market     [_]
                                                              -------------
- ----------------------------------------------------                                  ----------------------------------------------

                                                    ----------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
Quantity                            Issue (Full Security Description)
- ------------------------------------------------------------------------------------------------------------------------------------


- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
                                          Private       Traded Security
Portfolio Employee        IPO            Placement      in Prior 60 days       Short Sale              Special Instructions
- -----------------------------------------------------------------------------------------------------------------------------------

 [_] Yes  [_] No     [_] Yes [_] No  [_] Yes  [_] No    [_] Yes  [_] No      [_] Yes  [_] No

- ------------------------------------------------------------------------------------------------------------------------------------

Approvals
- ------------------------------------------------------------------------------------------------------------------------------------
This area reserved for Trading Department use only
- ------------------------------------------------------------------------------------------------------------------------------------
Trade Has Been                                 Date Approved                                Approved By

[_] Approved         [_] Not Approved
- ------------------------------------------------------------------------------------------------------------------------------------

- ------------------------------------------------------------------------------------------------------------------------------------
Legal / Compliance (if required)


- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

    Approvals are valid until the close of business on the day approval has been
    granted. Accordingly, GTC (good till canceled) orders are prohibited. If a
    trade is not executed by the close of business resubmitting a new
    preclearance form is required. It is each employee's responsibility to
    comply with all provisions of the Code. Obtaining preclearance satisfies the
    preclearance requirements of the Code and does not imply compliance with the
    Code's other provisions.

    Preclearance procedures apply to all employees and their immediate family
    (as defined by the Code) including: a) all accounts in the name of the
    employee or the employee's spouse or minor children; b) all accounts in
    which any of such persons have a beneficial interest; and c) all other
    accounts over which any such person exercises any investment discretion.
    Please see the Code for the complete definition of immediate family.

    By signing below the employee certifies the following: The employee agrees
    that the above order is in compliance with the Code of Ethics and is not
    based on knowledge of an actual client order within the previous seven
    calendar days in the security that is being purchased or sold, or knowledge
    that the security is being considered for purchase or sale in one or more
    specific client accounts, or knowledge of a change or pendency of a change
    of an investment management recommendation. The employee also acknowledges
    that he/she is not in possession of material, inside information pertaining
    to the security or issuer of the security.

- --------------------------------------------------------------------------------
Employee Signature                                    Date

- --------------------------------------------------------------------------------


           PLEASE SEND A COPY OF THIS COMPLETED FORM TO THE COMPLIANCE
                       DEPARTMENT FOR ALL EXECUTED TRADES

                                       26

<PAGE>

                                                                    Appendix VII

                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA

                     PRIVATE PLACEMENT APPROVAL REQUEST FORM
            (Must attach the offering memo or subscription documents)

Date Submitted: ______________

     Employee Name: ___________________________________SSN____-___-_____

Entity/Employee Group: ______________________________________________________

Company Name: _______________________________________________________________

Business Operations Summary: ________________________________________________

Does this company have publicly traded securities?:    [_] Yes   [_] No

Who contacted you regarding this investment?: _______________________________

What is your relationship to the contact person?: ___________________________

What is the total dollar amount of the private placement?: __________________

What is the value of your proposed investment?:______________________________

Do you, or the entity you work for, have a relationship with the Company?
[_] Yes  [_] No
If yes, please explain: _____________________________________________________

Is this investment suitable for client accounts? [_] Yes [_] No
If no, please explain: ______________________________________________________

________________________________________________________________________________

_____________________________________________________________________

Employee signature: _______________________


Approved [_]   Disapproved [_] __________________________   Date:____________
                               Division Head Signature

Approved [_]   Disapproved [_] __________________________   Date:____________
                               Compliance Officer

                                       27

<PAGE>

                                                                   Appendix VIII

                  ALLIANZ DRESDNER ASSET MANAGEMENT OF AMERICA

                                 PRIVACY POLICY

We consider customer privacy to be a fundamental aspect of our relationship with
clients. We are committed to maintaining the confidentiality, integrity and
security of our current, prospective and former clients' personal information.
We have developed policies designed to protect this confidentiality, while
allowing client needs to be served.

In the course of providing you with products and services, we may obtain
non-public personal information about you. This information may come from
sources such as account applications and other forms, from other written,
electronic or verbal correspondence, from your transactions, from your brokerage
or financial advisory firm, financial adviser or consultant, and/or from
information captured on our internet web sites.

We do not disclose any personal or account information provided by you or
gathered by us to non-affiliated third parties, except as required or permitted
by law. As is common in the industry, non-affiliated companies may from time to
time be used to provide certain services, such as preparing and mailing
prospectuses, reports, account statements and other information, conducting
research on client satisfaction and gathering shareholder proxies. We may also
retain non-affiliated companies to market our products and enter in joint
marketing agreements with other companies. These companies may have access to
your personal and account information, but are permitted to use the information
solely to provide the specific service or as otherwise permitted by law. We may
also provide your personal and account information to your brokerage or
financial advisory firm and/or to your financial adviser or consultant.

We do reserve the right to disclose or report personal information to
non-affiliated third parties, in limited circumstances, where we believe in good
faith that disclosure is required under law to cooperate with regulators or law
enforcement authorities, to protect our rights or property or upon reasonable
request by any mutual fund in which you have chosen to invest. In addition, we
may disclose information about you or your accounts to a non-affiliated third
party at your request or if you consent in writing to the disclosure.

We may share client information with our affiliates in connection with servicing
your account or to provide you with information about products and services that
we believe may be of interest to you. The information we share may include, for
example, your participation in our mutual funds or other investment programs,
your ownership of certain types of accounts (such as IRAs), or other data about
your accounts. Our affiliates, in turn, are not permitted to share your
information with non-affiliated entities, except as required or permitted by
law.

We take seriously the obligation to safeguard your non-public personal
information. We have implemented procedures designed to restrict access to your
non-public personal information to our personnel who need to know that
information to provide products or services to you. To guard your non-public
personal information, physical, electronic and procedural safeguards are in
place.

*This privacy policy is applicable to the following entities: ADAM of America
L.P, Cadence Capital Management, NFJ Investment Group, PIMCO, PIMCO Equity
Advisors LLC, Oppenheimer Capital LLC, OCC Distributors LLC, Allianz Hedge Fund
Partners LP, PIMCO Allianz Advisors LLC, Allianz Private Client Services LLC,
PIMCO, CD Distributors LLC, PIMCO Funds Advisors LLC, OpCap Advisors LLC, PIMCO
Funds: Multi-Manager Series; PIMCO Funds: Pacific Investment Management Series;
PIMCO Specialty Markets; PIMCO Commercial Mortgage Securities Trust, Inc., and
the OCC Cash Reserves; Municipal Advantage Fund, Inc.

                                       28

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(R)(3)
<SEQUENCE>23
<FILENAME>dex99r3.txt
<DESCRIPTION>CODE OF ETHICS FOR PACIFIC INVESTMENT MGMT COMPANY
<TEXT>
<PAGE>

                                                                     Exhibit r.3

                              PIMCO CODE OF ETHICS

                        Effective as of December 31, 2001

                                  INTRODUCTION

                               General Principles

     This Code of Ethics is based on the principle that you, as a director,
officer or other Advisory Employee of Pacific Investment Management Company
("PIMCO"), owe a fiduciary duty to, among others, the shareholders of the Funds
and other clients (together with the Funds, the "Advisory Clients") for which
PIMCO serves as an advisor or subadvisor. Accordingly, you must avoid
activities, interests and relationships that might interfere or appear to
interfere with making decisions in the best interests of our Advisory Clients.

     At all times, you must observe the following general rules:

     1.    You must place the interests of our Advisory Clients first. In other
           words, as a fiduciary you must scrupulously avoid serving your own
           personal interests ahead of the interests of our Advisory Clients.
           You must adhere to this general fiduciary principle as well as comply
           with the Code's specific provisions. Technical compliance with the
           Code's procedures will not automatically insulate from scrutiny any
           trades that indicate an abuse of your fiduciary duties or that create
           an appearance of such abuse.

           Your fiduciary obligation applies not only to your personal trading
           activities but also to actions taken on behalf of Advisory Clients.
           In particular, you may not cause an Advisory Client to take action,
           or not to take action, for your personal benefit rather than the
           benefit of the Advisory Client. For example, you would violate this
           Code if you caused an Advisory Client to purchase a Security or
           Futures Contract you owned for the purpose of increasing the value of
           that Security or Futures Contract. If you are a portfolio manager or
           an employee who provides information or advice to a portfolio manager
           or helps execute a portfolio manager's decisions, you would also
           violate this Code if you made a personal investment in a Security or
           Futures Contract that might be an appropriate investment for an
           Advisory Client without first considering the Security or Futures
           Contract as an investment for the Advisory Client.

     2.    You must conduct all of your personal Investment Transactions in full
           compliance with this Code and the PIMCO Advisors L.P. Insider Trading
           Policy and Procedures (the "Insider Trading Policy"), and in such a
           manner as to avoid any actual or potential conflict of interest or
           any abuse of your position of trust and responsibility. PIMCO
           encourages you and your family to develop personal investment
           programs. However, those investment programs must remain within
           boundaries reasonably necessary to ensure that appropriate safeguards
           exist to protect the interests of our Advisory Clients and to avoid
           even

<PAGE>

                  the appearance of unfairness or impropriety. Accordingly, you
                  must comply with the policies and procedures set forth in this
                  Code under the heading PERSONAL INVESTMENT TRANSACTIONS. In
                  addition, you must comply with the policies and procedures set
                  forth in the Insider Trading Policy, which is attached to this
                  Code as Appendix II. Doubtful situations should be resolved in
                  favor of our Advisory Clients and against your personal
                  trading.

         3.       You must not take inappropriate advantage of your position.
                  The receipt of investment opportunities, perquisites, gifts or
                  gratuities from persons seeking business with PIMCO directly
                  or on behalf of an Advisory Client could call into question
                  the independence of your business judgment. Accordingly, you
                  must comply with the policies and procedures set forth in this
                  Code under the heading GIFTS AND SERVICE AS A DIRECTOR.
                  Doubtful situations should be resolved against your personal
                  interest.

                         The General Scope Of The Code's
                 Applications To Personal Investment Activities

         The Code reflects the fact that PIMCO specializes in the management of
fixed income portfolios. The vast majority of assets PIMCO purchases and sells
on behalf of its Advisory Clients consist of corporate debt Securities, U.S. and
foreign government obligations, asset-backed Securities, money market
instruments, foreign currencies, and futures contracts and options with respect
to those instruments. For its StocksPLUS Funds, PIMCO also purchases futures and
options on the S & P 500 index and, on rare occasions, may purchase or sell
baskets of the stocks represented in the S & P 500. For its Convertible Fund and
other Advisory Clients, PIMCO purchases convertible securities that may be
converted or exchanged into underlying shares of common stock. Other PIMCO Funds
may also invest in convertible securities. The Convertible Fund and other
Advisory Clients may also invest a portion of their assets in common stocks.

         Rule 17j-1 under the Investment Company Act of 1940 requires reporting
of all personal transactions in Securities (other than certain Exempt
Securities) by certain persons, whether or not they are Securities that might be
purchased or sold by PIMCO on behalf of its Advisory Clients. The Code
implements that reporting requirement.

         However, since the purpose of the Code is to avoid conflicts of
interest arising from personal trading activities in Securities and other
instruments that are held or might be acquired on behalf of our Advisory
Clients, this Code only places restrictions on personal trading activities in
such investments. As a result, this Code does not place restrictions (beyond
reporting) on personal trading in most individual equity Securities. Although
equities are Securities, they are not purchased or sold by PIMCO on behalf of
the vast majority of PIMCO's Advisory Clients and PIMCO has established special
procedures to avoid conflicts of interest that might otherwise arise from
personal trading in such equity securities. On the other hand, this Code does
require reporting and restrict trading in certain Futures Contracts which,
although they are not Securities, are instruments in which PIMCO frequently
trades for many of its Advisory Clients.

                                       2

<PAGE>

        This Code applies to PIMCO's officers and directors as well as to all of
its Advisory Employees. The Code recognizes that portfolio managers and the
investment personnel who provide them with advice and who execute their
decisions occupy more sensitive positions than other Advisory Employees and that
it is appropriate to subject their personal investment activities to greater
restrictions.

                          The Organization Of The Code

        The remainder of this Code is divided into three sections. The first
section concerns Personal Investment Transactions. The second section describes
the restrictions on Gifts And Service As A Director. The third section
summarizes the methods for ensuring Compliance under the Code. In addition, the
following Appendices are also a part of this Code:

I.      Definitions of Capitalized Terms
II.     The PIMCO Advisors L.P. Insider Trading Policy and Procedures
III.    Form for Acknowledgment of Receipt of this Code
IV.     Form for Annual Certification of Compliance with this Code
V.      Form for Initial Report of Accounts
VI.     Form for Quarterly Report of Investment Transactions
VII.    Form for Annual Holdings Report
VIII.   Preclearance Request Form
IX.     Preclearance Request Form - PIMCO Closed End Funds
X.      List of PIMCO Compliance Officers

                                    Questions

        Questions regarding this Code should be addressed to a Compliance
Officer listed on Appendix X. Those Compliance Officers compose the PIMCO
Compliance Committee.

                        PERSONAL INVESTMENT TRANSACTIONS

                                   In General

        Subject to the limited exceptions described below, you are required to
report all Investment Transactions in Securities and Futures Contracts made by
you, a member of your Immediate Family or a trust in which you have an interest,
or on behalf of any account in which you have an interest or which you direct.
In addition, you must preclear certain Investment Transactions in Securities and
Futures Contracts that PIMCO holds or may acquire on behalf of an Advisory
Client, including certain Investment Transactions in Related Securities.

        The details of these reporting and preclearance requirements are
described below. This Code uses a number of capitalized terms, e.g. Advisory
Employee, Beneficial Ownership, Designated Equity Security, Exempt Security,
Fixed Income Security, Fund, Futures Contract, Immediate Family, Initial Public
Offering, Investment Transaction, Personal Account, Portfolio

                                       3

<PAGE>

Employee, Private Placement, Qualified Foreign Government, Related Account,
Related Security, and Security. The definitions of these capitalized terms are
set forth in Appendix I. To understand your responsibilities under the Code, it
is important that you review and understand the definitions in Appendix I.

                              Reporting Obligations

        Notification Of Reporting Obligations

        As an Advisory Employee, you are required to report accounts and
Investment Transactions in accordance with the requirements of this Code.

        Use Of Broker-Dealers And Futures Commission Merchants

        Unless you are an independent director, you must use a registered
broker-dealer or registered futures commission merchant to engage in any
purchase or sale of a publicly-traded Security or Publicly-Traded Futures
Contract. This requirement also applies to any purchase or sale of a
publicly-traded Security or of a Publicly-Traded Futures Contract in which you
have, or by reason of the Investment Transaction will acquire, a Beneficial
Ownership interest. Thus, as a general matter, any Investment Transaction in
publicly-traded Securities or Publicly-Traded Futures Contracts by members of
your Immediate Family will need to be made through a registered broker-dealer or
futures commission merchant.

        Initial Report

        Within 10 days after commencing employment or within 10 days of any
event that causes you to become subject to this Code (e.g. promotion to a
position that makes you an Advisory Employee), you shall supply to a Compliance
Officer copies of the most recent statements for each and every Personal Account
and Related Account that holds or is likely to hold a Security or a Futures
Contract in which you have a Beneficial Ownership interest, as well as copies of
confirmations for any and all Investment Transactions subsequent to the
effective date of those statements. These documents shall be supplied to the
Compliance Officer by attaching them to the form appended hereto as Appendix V.

        On that same form you shall supply the name of any broker, dealer, bank
or futures commission merchant and the number for any Personal Account and
Related Account that holds or is likely to hold a Security or a Futures Contract
in which you have a Beneficial Ownership interest for which you cannot supply
the most recent account statement. You shall also certify, where indicated on
the form, that the contents of the form and the documents attached thereto
disclose all such Personal Accounts and Related Accounts.

        In addition, you shall also supply, where indicated on the form, the
following information for each Security or Futures Contract in which you have a
Beneficial Ownership interest, to the extent that this information is not
available from the statements attached to the form:

        1.    A description of the Security or Futures Contract, including its
              name or title;

                                       4

<PAGE>

        2.    The quantity (e.g. in terms of numbers of shares, units or
              contracts) and principal amount (in dollars) of the Security or
              Futures Contract; and

        3.    The name of any broker, dealer, bank or futures commission
              merchant with which you maintained an account in which the
              Security or Futures Contract was held.

        New Accounts

        Immediately upon the opening of a new Personal Account or a Related
Account that holds or is likely to hold a Security or a Futures Contract, you
shall supply a Compliance Officer with the name of the broker, dealer, bank or
futures commission merchant for that account, the identifying number for that
Personal Account or Related Account, and the date the account was established.

        Timely Reporting Of Investment Transactions

        You must cause each broker, dealer, bank or futures commission merchant
that maintains a Personal Account or a Related Account that holds a Security or
a Futures Contract in which you have a Beneficial Ownership interest to provide
to a Compliance Officer, on a timely basis, duplicate copies of trade
confirmations of all Investment Transactions in that account and of periodic
statements for that account ("duplicate broker reports").

        In addition, you must report to a Compliance Officer, on a timely
basis, any Investment Transaction in a Security or a Futures Contract in which
you have or acquired a Beneficial Ownership interest that was established
without the use of a broker, dealer, bank or futures commission merchant.

        Quarterly Certifications And Reporting

        At the end of the first, second and third calendar quarters, a
Compliance Officer will provide you with a list of all accounts that you have
previously identified to PIMCO as a Personal Account or a Related Account that
holds or is likely to hold a Security or Futures Contract. Within 10 days after
the end of that calendar quarter, you shall make any necessary additions,
corrections or deletions to that list and return it to a Compliance Officer with
a certification that: (a) the list, as modified (if necessary), represents a
complete list of the Personal Accounts and Related Accounts that hold Securities
or Futures Contracts in which you have or had a Beneficial Ownership interest
and for which PIMCO should have received or will receive timely duplicate broker
reports for the calendar quarter just ended, and (b) the broker, dealer, bank or
futures commission merchant for each account on the list has been instructed to
send a Compliance Officer timely duplicate broker reports for that account.

        You shall provide, on a copy of the form attached hereto as Appendix
VI, the following information for each Investment Transaction during the
calendar quarter just ended, to the extent that the duplicate broker reports for
that calendar quarter did not supply this information to PIMCO:

                                       5

<PAGE>

        1.    The date of the Investment Transaction, the title, the interest
              rate and maturity date (if applicable), the number of shares or
              contracts, and the principal amount of each Security or Futures
              Contract involved;

        2.    The nature of the Investment Transaction (i.e. purchase, sale or
              any other type of acquisition or disposition);

        3.    The price of the Security or Futures Contract at which the
              transaction was effected; and

        4.    The name of the broker, dealer, bank, or futures commission
              merchant with or through which the transaction was effected.

You shall provide similar information for the fourth calendar quarter on a copy
of the form attached hereto as Appendix VII, which form shall also be used for
the Annual Holdings Report described below.

        Annual Holdings Reports

        At the end of each calendar year, a Compliance Officer will provide to
you promptly a list of all accounts that you have previously identified to PIMCO
as a Personal Account or a Related Account that held or was likely to hold a
Security or Futures Contract during that calendar year. Within 10 days after the
end of that calendar year, you shall make any necessary additions, corrections
or deletions to that list and return it to a Compliance Officer with a
certification that: (a) the list, as modified (if necessary), represents a
complete list of the Personal Accounts and Related Accounts that held Securities
or Futures Contracts in which you had a Beneficial Ownership interest as of the
end of that calendar year and for which PIMCO should have received or will
receive an account statement of holdings as of the end of that calendar year,
and (b) the broker, dealer, bank or futures commission merchant for each account
on the list has been instructed to send a Compliance Officer such an account
statement.

        You shall provide, on a copy of the form attached hereto as Appendix
VII, the following information for each Security or Futures Contract in which
you had a Beneficial Ownership interest, as of the end of the previous calendar
year, to the extent that the previously referenced account statements have not
supplied or will not supply this information to PIMCO:

        1.    The title, quantity (e.g. in terms of numbers of shares, units or
              contracts) and principal amount of each Security or Futures
              Contract in which you had any Beneficial Ownership interest; and

        2.    The name of any broker, dealer, bank or futures commission
              merchant with which you maintain an account in which any such
              Securities or Futures Contracts have been held or are held for
              your benefit.

In addition, you shall also provide, on that same form, Investment Transaction
information for the fourth quarter of the calendar year just ended. This
information shall be of the type and in the form required for the quarterly
reports described above.

                                       6

<PAGE>

         Related Accounts

         The reporting and certification obligations described above also apply
to any Related Account (as defined in Appendix I) and to any Investment
Transaction in a Related Account.

         It is important for you to recognize that the definitions of "Related
Account" and "Beneficial Ownership" in Appendix I may require you to provide, or
to arrange for the broker, dealer, bank or futures commission merchant to
furnish, copies of reports for any account used by or for a member of your
Immediate Family or a trust in which you or a member of your Immediate Family
has any vested interest, as well as for any other accounts in which you may have
the opportunity, directly or indirectly, to profit or share in the profit
derived from any Investment Transaction in that account.

         Exemptions From Reporting

         You need not report Investment Transactions in any account over which
neither you nor an Immediate Family Member has or had any direct or indirect
influence or control.

         You also need not report Investment Transactions in Exempt Securities
(as defined in Appendix I) nor need you furnish, or require a broker, dealer,
bank or futures commission merchant to furnish, copies of confirmations or
periodic statements for accounts that hold only Exempt Securities. This includes
accounts that only hold U.S. Government Securities, money market interests, or
shares in open-end mutual funds. This exemption from reporting shall end
immediately, however, at such time as there is an Investment Transaction in that
account in a Futures Contract or in a Security that is not an Exempt Security.

                       Prohibited Investment Transactions

         Initial Public Offerings of Equity Securities

         If you are a Portfolio Employee (as defined in Appendix I), you may not
acquire Beneficial Ownership of any equity Security in an Initial Public
Offering.

         Private Placements and Initial Public Offering of Debt Securities

         If you are a Portfolio Employee, you may not acquire a Beneficial
Ownership interest in any Security through a Private Placement (or subsequently
sell it), or acquire a Beneficial Ownership interest in any debt Security in an
Initial Public Offering unless you have received the prior written approval of
the Chief Executive Officer of PIMCO or of a Compliance Officer listed on
Appendix X. Approval will not be given unless a determination is made that the
investment opportunity should not be reserved for one or more Advisory Clients,
and that the opportunity to invest has not been offered to you by virtue of your
position with PIMCO.

         If, after receiving the necessary approval, you have acquired a
Beneficial Ownership interest in Securities through a Private Placement, you
must disclose that investment when you play a part in any consideration of any
investment by an Advisory Client in the issuer of the

                                       7

<PAGE>

         Securities, and any decision to make such an investment must be
independently reviewed by a portfolio manager who does not have a Beneficial
Ownership interest in any Securities of the issuer.

         Allianz AG

         You may not engage in any Investment Transaction in securities of
Allianz AG, except during the trading windows applicable to such transactions.

                                  Preclearance

         All Investment Transactions in Securities and Futures Contracts in a
Personal Account or Related Account, or in which you otherwise have or will
acquire a Beneficial Ownership interest, must be precleared by a Compliance
Officer unless an Investment Transaction, Security or Futures Contract falls
into one of the following categories that are identified as "exempt from
preclearance."

         Preclearance Procedure

         Preclearance shall be requested by completing and submitting a copy of
the applicable preclearance request form attached hereto as Appendix VIII or IX
to a Compliance Officer. No Investment Transaction subject to preclearance may
be effected prior to receipt of written authorization of the transaction by a
Compliance Officer. The authorization and the date of authorization will be
reflected on the preclearance request form. Unless otherwise specified, that
authorization shall be effective, unless revoked, until the earlier of: (a) the
close of business on the day the authorization is given, or (b) until you
discover that the information on the preclearance request form is no longer
accurate.

         The Compliance Officer from whom authorization is sought may undertake
such investigation as he or she considers necessary to determine that the
Investment Transaction for which preclearance has been sought complies with the
terms of this Code and is consistent with the general principles described at
the beginning of the Code.

         Before deciding whether to authorize an Investment Transaction in a
particular Security or Futures Contract, the Compliance Officer shall determine
and consider, based upon the information reported or known to that Compliance
Officer, whether within the most recent 15 days: (a) the Security, the Futures
Contract or any Related Security is or has been held by an Advisory Client, or
(b) is being or has been considered for purchase by an Advisory Client. The
Compliance Officer shall also determine whether there is a pending buy or sell
order in the same Security or Futures Contract, or in a Related Security, on
behalf of an Advisory Client. If such an order exists, authorization of the
personal Investment Transaction shall not be given until the Advisory Client's
order is executed or withdrawn. This prohibition may be waived by a Compliance
Officer if he or she is convinced that: (a) your personal Investment Transaction
is necessary, (b) your personal Investment Transaction will not adversely affect
the pending order of the Advisory Client, and (c) provision can be made for the
Advisory Client trade to take precedence (in terms of price) over your personal
Investment Transaction.

                                       8

<PAGE>

         Exemptions From Preclearance

         Preclearance shall not be required for the following Investment
Transactions, Securities and Futures Contracts. They are exempt only from the
Code's preclearance requirement, and, unless otherwise indicated, remain subject
to the Code's other requirements, including its reporting requirements.

                Investment Transactions Exempt From Preclearance

         Preclearance shall not be required for any of the following Investment
Transactions:

         1.    Any transaction in a Security or Futures Contract in an account
               that is managed or held by a broker, dealer, bank, futures
               commission merchant, investment adviser, commodity trading
               advisor or trustee and over which you do not exercise investment
               discretion, have notice of transactions prior to execution, or
               otherwise have any direct or indirect influence or control. There
               is a presumption that you can influence or control accounts held
               by members of your Immediate Family sharing the same household.
               This presumption may be rebutted only by convincing evidence.

         2.    Purchases of Securities under dividend reinvestment plans.

         3.    Purchases of Securities by exercise of rights issued to the
               holders of a class of Securities pro rata, to the extent they are
               issued with respect to Securities in which you have a Beneficial
               Ownership interest.

         4.    Acquisitions or dispositions of Securities as the result of a
               stock dividend, stock split, reverse stock split, merger,
               consolidation, spin-off or other similar corporate distribution
               or reorganization applicable to all holders of a class of
               Securities in which you have a Beneficial Ownership interest.

               Securities Exempt From Preclearance
               Regardless Of Transaction Size

         Preclearance shall not be required for an Investment Transaction in the
following Securities or Related Securities, regardless of the size of that
transaction:

         1.    All "Exempt Securities" defined in Appendix I, i.e. U.S.
               Government Securities, shares in open-end mutual funds, and high
               quality short-term debt instruments.

         2.    All closed-end mutual funds (other than any fund for which PIMCO
               serves as the investment advisor or sub-advisor), and rights
               distributed to shareholders in closed-end mutual funds.

         3.    All options on any index of equity Securities.

                                       9

<PAGE>

         4.    All Fixed Income Securities issued by agencies or
               instrumentalities of, or unconditionally guaranteed by, the
               Government of the United States.

         5.    All options on foreign currencies or baskets of foreign
               currencies (whether or not traded on an exchange or board of
               trade).

         6.    Except for Designated Equity Securities (as defined in Appendix I
               and discussed below), all equity Securities or options, warrants
               or other rights to equity Securities.

               Securities Exempt from Preclearance
               Depending On Transaction Size

         Preclearance shall not be required for an Investment Transaction in the
following Securities or Related Securities if they do not exceed the specified
transaction size thresholds (which thresholds may be increased or decreased by
PIMCO upon written notification to employees in the future depending on the
depth and liquidity of Fixed Income Securities or Tax-Exempt Municipal Bonds
market):

         1.    Purchases or sales of up to $1,000,000 (in market value or face
               amount whichever is greater) per calendar month per issuer of
               Fixed Income Securities issued by a Qualified Foreign Government.

         2.    Purchases or sales of the following dollar values (measured in
               market value or face amount, whichever is greater) of corporate
               debt Securities, mortgage-backed and other asset-backed
               Securities, Tax-Exempt Municipal Bonds, taxable state, local and
               municipal Fixed Income Securities, structured notes and loan
               participations, and foreign government debt Securities issued by
               non-qualified foreign governments (hereinafter collectively
               referred to as "Relevant Debt Securities"):

               a.    Purchases or sales of up to $100,000 per calendar month per
                     issuer if the original issue size of any Relevant Debt
                     Security being purchased or sold was less than $50 million;

               b.    Purchases or sales of up to $500,000 per calendar month per
                     issuer if the original issue size of any Relevant Debt
                     Security being purchased or sold was at least $50 million
                     but less than $100 million; or

               c.    Purchases or sales of up to $1,000,000 per calendar month
                     per issuer if the original issue size of any Relevant Debt
                     Security being purchased or sold was at least $100 million.

                                       10

<PAGE>

         Preclearance of Designated Equity Securities

         If a Compliance Officer receives notification from a Portfolio Employee
that an equity Security or an option, warrant or other right to an equity
Security is being considered for purchase or sale by PIMCO on behalf of one of
its Advisory Clients, the Compliance Officer will send you an e-mail message or
similar transmission notifying you that this equity Security or option, warrant
or other right to an equity Security is now a "Designated Equity Security." A
current list of Designated Equity Securities (if any) will also be available on
the PIMCO intranet site. You must preclear any Investment Transaction in a
Designated Equity Security or a Related Security during the period when that
designation is in effect.

               Futures Contracts Exempt From Preclearance
               Regardless Of Transaction Size

         Preclearance shall not be required for an Investment Transaction in the
following Futures Contracts, regardless of the size of that transaction (as
indicated in Appendix I, for these purposes a "Futures Contract" includes a
futures option):

         1.    Currency Futures Contracts.

         2.    U.S. Treasury Futures Contracts.

         3.    Eurodollar Futures Contracts.

         4.    Futures Contracts an any index of equity Securities.

         5.    Futures Contracts on physical commodities or indices thereof
               (e.g. contracts for future delivery of grain, livestock, fiber
               or metals whether for physical delivery or cash).

         6.    Privately-Traded Contracts.

               Futures Contracts Exempt From Preclearance
               Depending On Transaction Size

         Preclearance shall not be required for an Investment Transaction in the
following Futures Contracts if the total number of contracts purchased or sold
during a calendar month does not exceed the specified limitations:

         1.    Purchases or sales of up to 50 Publicly-Traded Futures Contracts
               to acquire Fixed Income Securities issued by a particular
               Qualified Foreign Government.

         2.    Purchases or sales of up to 10 of each other individual
               Publicly-Traded Futures Contract if the open market interest for
               such Futures Contract as reported in The Wall Street Journal on
               the date of your Investment Transaction (for the previous trading
               day) is at least 1,000 contracts. Examples of Futures Contracts
               for which this exemption would be available include a Futures
               Contract

                                       11

<PAGE>

               on a foreign government debt Security issued by a non-qualified
               foreign government as well as a 30-day federal funds Futures
               Contract.

For purposes of these limitations, a Futures Contract is defined by its
expiration month. For example, you need not obtain preclearance to purchase 50
December Futures Contracts on German Government Bonds and 50 March Futures
Contracts on German Government Bonds. Similarly, you may roll over 10 September
Fed Funds Futures Contracts by selling those 10 contracts and purchasing 10
October Fed Funds Futures Contracts since the contracts being sold and those
being purchased have different expiration months. On the other hand, you could
not purchase 10 January Fed Funds Future Contracts if the open interest for
those contracts was less than 1,000 contracts, even if the total open interest
for all Fed Funds Futures Contracts was greater than 1,000 contracts.

               Additional Exemptions From Preclearance

         The Compliance Committee may exempt other classes of Investment
Transactions, Securities or Futures Contracts from the Code's preclearance
requirement upon a determination that they do not involve a realistic
possibility of violating the general principles described at the beginning of
the Code.

               Preclearance Required

         Given the exemptions described above, preclearance shall be required
for Investment Transactions in:

         1.    Designated Equity Securities.

         2.    Relevant Debt Securities (as defined under the section
               "Securities Exempt from Preclearance Depending on Transaction
               Size, paragraph 2") in excess of the per calendar month per
               issuer thresholds specified for purchases or sales of those
               Securities.

         3.    More than $1,000,000 per calendar month in debt Securities of a
               Qualified Foreign Government.

         4.    Related Securities that are exchangeable for or convertible into
               one of the Securities requiring preclearance under (1), (2), or
               (3) above.

         5.    More than 50 Publicly-Traded Futures Contracts per calendar
               month to acquire Fixed Income Securities issued by a particular
               Qualified Foreign Government.

         6.    More than 10 of any other individual Publicly-Traded Futures
               Contract or any Publicly-Traded Futures Contract for which the
               open market interest as reported in The Wall Street Journal on
               the date of your Investment Transaction (for the previous trading
               day) is less than 1,000 contracts, unless the Futures Contract is
               exempt from preclearance regardless of transaction size.

                                       12

<PAGE>

         7.     Any other Security or Publicly-Traded Futures Contract that is
                not within the "exempt" categories listed above.

         8.     Any closed end fund for which PIMCO serves as the investment
                advisor or sub-advisor (i.e. PIMCO Commercial Mortgage
                Securities Trust, Inc., PIMCO Municipal Income Fund, PIMCO
                California Municipal Income Fund, PIMCO New York Municipal
                Income Fund, PIMCO Corporate Income Fund or any other closed
                end fund which PIMCO may advise from time to time).

                           Short-Term Trading Profits

         You may not profit from the purchase and sale, or the sale and
purchase, within 60 calendar days, of Fixed Income Securities, Tax-Exempt
Municipal Bonds or Related Securities. You may not profit from the purchase and
sale, or sale and purchase, within 6 months, of any closed end fund for which
PIMCO serves as investment advisor or sub-advisor. Portfolio Employees may not
profit from the purchase and sale, or the sale and purchase, within 60 calendar
days, of Designated Equity Securities. Any such short-term trade must be
unwound, or if that is not practical, the profits must be contributed to a
charitable organization.

         This ban does not apply to Investment Transactions in U.S. Government
Securities, most equity Securities, mutual fund shares, index options or Futures
Contracts. This ban also does not apply to a purchase or sale in connection with
one of the four categories of Investment Transactions Exempt From Preclearance
described on pages 9-10, above.

         You are considered to profit from a short-term trade if Securities in
which you have a Beneficial Ownership interest are sold for more than their
purchase price, even though the Securities purchased and the Securities sold are
held of record or beneficially by different persons or entities.

                                Blackout Periods

         You may not purchase or sell a Security, a Related Security or a
Futures Contract at a time when you intend or know of another's intention to
purchase or sell that Security or Futures Contract on behalf of any Advisory
Client.

         As noted previously in the description of the Preclearance Process, a
Compliance Officer may not preclear an Investment Transaction in a Security or a
Futures Contract at a time when there is a pending buy or sell order in the same
Security or Futures Contract, or a Related Security, until that order is
executed or withdrawn.

         These prohibitions do not apply to Investment Transactions in any
Futures Contracts that are exempt from preclearance regardless of transaction
size.

                                       13

<PAGE>

                         GIFTS AND SERVICE AS A DIRECTOR

                                      Gifts

         You may not accept any investment opportunity, gift, gratuity or other
thing of more than nominal value from any person or entity that does business,
or desires to do business, with PIMCO directly or on behalf of an Advisory
Client (a "Giver"). You may, however, accept gifts from a single Giver so long
as their aggregate annual value does not exceed $500, and you may attend
business meals, sporting events and other entertainment events at the expense of
a Giver (without regard to their aggregate annual value), so long as the expense
is reasonable and both you and the Giver are present.

         If you are a registered representative of PIMCO Funds Distributors LLC
(PFD), the aggregate annual gift value from a single Giver shall not exceed
$100.00. As a PFD representative, you are required to maintain a record of each
gift, gratuity, investment opportunity or similar item, and make such record
available to the Compliance Department upon request.

                              Service As A Director

         If you are an Advisory Employee, you may not serve on the board of
directors or other governing board of a publicly traded entity, other than of a
Fund for which PIMCO is an advisor or subadvisor, unless you have received the
prior written approval of the Chief Executive Officer and the Chief Legal
Officer of PIMCO. Approval will not be given unless a determination is made that
your service on the board would be consistent with the interests of our Advisory
Clients. If you are permitted to serve on the board of a publicly traded entity,
you will be isolated from those Advisory Employees who make investment decisions
with respect to the Securities of that entity, through a "Chinese Wall" or other
procedures.

                                       14

<PAGE>

                                   COMPLIANCE

                                 Certifications

       Upon Receipt Of This Code

       Upon commencement of your employment or the effective date of this Code,
whichever occurs later, you shall be required to acknowledge receipt of your
copy of this Code by completing and returning a copy of the form attached hereto
as Appendix III. By that acknowledgment, you will also agree:

       1.     To read the Code, to make a reasonable effort to understand its
              provisions, and to ask questions about those provisions you find
              confusing or difficult to understand.

       2.     To comply with the Code, including its general principles, its
              reporting requirements, its preclearance requirements, and its
              provisions regarding gifts and service as a director.

       3.     To advise the members of your Immediate Family about the existence
              of the Code, its applicability to their personal trading activity,
              and your responsibility to assure that their personal trading
              activity complies with the Code.

       4.     To cooperate fully with any investigation or inquiry by or on
              behalf of a Compliance Officer to determine your compliance with
              the provisions of the Code.

In addition, your acknowledgment will recognize that any failure to comply with
the Code and to honor the commitments made by your acknowledgment may result in
disciplinary action, including dismissal.

       Annual Certificate Of Compliance

       You are required to certify on an annual basis, on a copy of the form
attached hereto as Appendix IV, that you have complied with each provision of
your initial acknowledgment (see above). In particular, your annual
certification will require that you certify that you have read and that you
understand the Code, that you recognize you are subject to its provisions, that
you complied with the requirements of the Code during the year just ended and
that you have disclosed, reported, or caused to be reported all Investment
Transactions required to be disclosed or reported pursuant to the requirements
of the Code.

                              Post-Trade Monitoring

       The Compliance Officers will review the duplicate broker reports and
other information supplied to them concerning your personal Investment
Transactions so that they can detect and prevent potential violations of the
Code. The Compliance Officers will perform such investigation and make such
inquiries as they consider necessary to perform this function. You agree to
cooperate with any such investigation and to respond to any such inquiry. You
should

                                       15

<PAGE>

expect that, as a matter of course, the Compliance Officers will make inquiries
regarding any personal Investment Transaction in a Security or Futures Contract
that occurs on the same day as a transaction in the same Security or Futures
Contract on behalf of an Advisory Client.

                                Remedial Actions

       If you violate this Code, you are subject to remedial actions, which may
include, but are not limited to, disgorgement of profits, imposition of a fine,
censure, demotion, suspension or dismissal. As part of any sanction, you may be
required to reverse an Investment Transaction and to forfeit any profit or to
absorb any loss from the transaction.

       The Compliance Committee shall have the ultimate authority to determine
whether you have violated the Code and, if so, the remedial actions it considers
appropriate. In making its determination, the Compliance Committee shall
consider, among other factors, the gravity of your violation, the frequency of
your violations, whether any violation caused harm or the potential of harm to
any Advisory Client, your efforts to cooperate with their investigation, and
your efforts to correct any conduct that led to a violation.

                        Reports To Directors And Trustees

       Reports Of Significant Remedial Actions

       The General Counsel of PIMCO Advisors L.P. and the directors or trustees
of any affected Fund that is an Advisory Client will be informed on a timely
basis of each significant remedial action taken in response to a violation of
this Code. For this purpose, a significant remedial action will include any
action that has a significant financial effect on the violator.

       Reports of Material Changes To The Code

       PIMCO will promptly advise the directors or trustees of any Fund that is
an Advisory Client if PIMCO makes any material change to this Code.

       Annual Reports

       PIMCO's management will furnish a written report annually to the General
Counsel of PIMCO Advisors L.P. and to the directors or trustees of each Fund
that is an Advisory Client. Each report, at a minimum, will:

       1.     Describe any significant issues arising under the Code, or under
              procedures implemented by PIMCO to prevent violations of the Code,
              since management's last report, including, but not limited to,
              information about material violations of the Code or those
              procedures and sanctions imposed in response to material
              violations; and

       2.     Certify that PIMCO has adopted procedures reasonably necessary to
              prevent Advisory Employees from violating the Code.

                                       16

<PAGE>

                                  Recordkeeping

       Beginning on the effective date of this Code, PIMCO will maintain, at its
principal place of business, the following records, which shall be available to
the Securities and Exchange Commission or any representative of the Commission
at any time and from time to time for reasonable periodic, special or other
examination:

       1.     PIMCO's Chief Compliance Officer shall maintain, in any easily
              accessible place:

              (a)    a copy of PIMCO's current Code and of each predecessor of
                     that Code that was in effect at any time within the
                     previous five (5) years;

              (b)    a record of any violation of the Code, and of any action
                     taken as a result of the violation, for at least five (5)
                     years after the end of the fiscal year in which the
                     violation occurred;

              (c)    a copy of each report made by an Advisory Employee pursuant
                     to this Code, including any duplicate broker report
                     submitted on behalf of that Advisory Employee, for at least
                     two (2) years after the end of the fiscal year in which
                     that report was made or that information was provided;

              (d)    a record of all persons, currently or within the past five
                     (5) years, who are or were required to make reports
                     pursuant to this Code or who are or were responsible for
                     reviewing such reports; and

              (e)    a copy of each report to the General Counsel of PIMCO
                     Advisors L.P. or to the directors or trustees of each Fund
                     that is an Advisory Client for at least two (2) years after
                     the end of the fiscal year in which that report was made.

       2.     PIMCO shall also maintain the following additional records:

              (a)    a copy of each report made by an Advisory Employee pursuant
                     to this Code, including any duplicate broker report
                     submitted on behalf of that Advisory Employee, for at least
                     five (5) years after the end of the fiscal year in which
                     that report was made or that information was provided;

              (b)    a copy of each report to the General Counsel of PIMCO
                     Advisors L.P. or to the directors or trustees of each Fund
                     that is an Advisory Client for at least five (5) years
                     after the end of the fiscal year in which that report was
                     made; and

              (c)    a record of any decision, and the reasons supporting the
                     decision, to approve the acquisition by a Portfolio
                     Employee of a Beneficial Ownership interest in any Security
                     in an Initial Public Offering or in a Private Placement for
                     at least five (5) years after the end of the fiscal year in
                     which such approval was granted.

                                       17

<PAGE>

                                   APPENDIX I

                        Definitions Of Capitalized Terms

       The following definitions apply to the capitalized terms used in the
Code:

Advisory Employee

       The term "Advisory Employee" means: (1) a director, officer, general
partner or employee of PIMCO who, in connection with his or her regular
functions or duties, makes, participates in, or obtains information regarding
the purchase or sale of a Security or Futures Contract by PIMCO on behalf of an
Advisory Client, or whose functions relate to the making of any recommendations
with respect to such purchases or sales, or (2) or a natural person in a control
relationship to PIMCO, or an employee of any company in a control relationship
to PIMCO, who: (a) makes, participates in, or obtains information regarding the
purchase or sale of a Security by a Fund that is an Advisory Client, or whose
functions relate to the making of any recommendations with respect to such
purchases or sales, or (b) obtains information concerning recommendations to a
Fund with regard to the purchase or sale of a Security by the Fund.

Beneficial Ownership

       As a general matter, you are considered to have a "Beneficial Ownership"
interest in a Security or a Futures Contract if you have the opportunity,
directly or indirectly, to profit or share in any profit derived from an
Investment Transaction in that Security or Futures Contract. You are presumed to
have a Beneficial Ownership interest in any Security or Futures Contract held,
individually or jointly, by you or a member of your Immediate Family (as defined
below). In addition, unless specifically excepted by a Compliance Officer based
on a showing that your interest in a Security or Futures Contract is
sufficiently attenuated to avoid the possibility of conflict, you will be
considered to have a Beneficial Ownership interest in a Security or Futures
Contract held by: (1) a joint account to which you are a party, (2) a
partnership in which you are a general partner, (3) a limited liability company
in which you are a manager-member, or (4) a trust in which you or a member of
your Immediate Family has a vested interest.

       As a technical matter, the term "Beneficial Ownership" for purposes of
this Code shall be interpreted in the same manner as it would be under SEC Rule
16a-1(a)(2) (17 C.F.R. (S)240.16a-1(a)(2)) in determining whether a person has a
beneficial ownership interest in a Security for purposes of Section 16 of the
Securities Exchange Act of 1934 and the rules and regulations thereunder.

Designated Equity Security

       The term "Designated Equity Security" shall mean any equity Security,
option, warrant or other right to an equity Security designated as such by a
Compliance Officer, after receiving notification from a Portfolio Employee that
said Security is being considered for purchase or sale by PIMCO on behalf of one
of its Advisory Clients.

                                      I-1

<PAGE>

Exempt Security

       The term "Exempt Security" shall mean any Security not included within
the definition of Covered Security in SEC Rule 17j-l(a)(4) (17 C.F.R. (S)
17j-1(a)(4)), including:

       1.     Direct obligations of the Government of the United States;

       2.     Shares issued by open-end Funds; and

       3.     Bankers' acceptances, bank certificates of deposit, commercial
              paper and high quality short-term debt instruments, including
              repurchase agreements. For these purposes, a "high quality
              short-term debt instrument" means any instrument having a maturity
              at issuance of less than 366 days and that is rated in one of the
              two highest rating categories by a Nationally Recognized
              Statistical Rating Organization.

Fixed Income Security

       For purposes of this Code, the term "Fixed Income Security" shall mean a
fixed income Security issued by an agency or instrumentality of, or
unconditionally guaranteed by, the Government of the United States, a corporate
debt Security, a mortgage-backed or other asset-backed Security, a taxable fixed
income Security issued by a state or local government or a political subdivision
thereof, a structured note or loan participation, a foreign government debt
Security, or a debt Security of an international agency or a supranational
agency. For purposes of this Code, the term "Fixed Income Security" shall not be
interpreted to include a U.S. Government Security or any other Exempt Security
(as defined above) nor shall it be interpreted to include a Tax-Exempt Municipal
Bond (as defined below).

Fund

       The term "Fund" means an investment company registered under the
Investment Company Act.

Futures Contract

       The term "Futures Contract" includes (a) a futures contract and an option
on a futures contract traded on a United States or foreign board of trade, such
as the Chicago Board of Trade, the Chicago Mercantile Exchange, the London
International Financial Futures Exchange or the New York Mercantile Exchange (a
"Publicly-Traded Futures Contract"), as well as (b) a forward contract, a swap,
a cap, a collar, a floor and an over-the-counter option (other than an option on
a foreign currency, an option on a basket of currencies, an option on a Security
or an option on an index of Securities) (a "Privately-Traded Contract"). Consult
with a Compliance Officer prior to entering into a transaction in case of any
doubt. For purposes of this definition, a Publicly-Traded Futures Contract is
defined by its expiration month, i.e. a Publicly-Traded Futures Contract on a
U.S. Treasury Bond that expires in June is treated as a separate Publicly-Traded
Futures Contract, when compared to a Publicly-Traded Futures Contract on a U.S.
Treasury Bond that expires in July.

                                      I-2

<PAGE>

Immediate Family

       The term "Immediate Family" means any of the following persons who reside
in your household or depend on you for basic living support: your spouse, any
child, stepchild, grandchild, parent, stepparent, grandparent, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including any adoptive relationships.

Initial Public Offering

       The term "Initial Public Offering" means an offering of securities
registered under the Securities Act of 1933 (15 U.S.C. (S) 77a), the issuer of
which, immediately before the registration, was not subject to the reporting
requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934 (15
U.S.C. (S) 78m or (S) 78o(d)).

Investment Transaction

       For purposes of this Code, the term "Investment Transaction" means any
transaction in a Security or Futures Contract in which you have, or by reason of
the transaction will acquire, a Beneficial Ownership interest, and includes,
among other things, the writing of an option to purchase or sell a Security.

Personal Account

       The term "Personal Account" means the following accounts that hold or are
likely to hold a Security (as defined below) or a Futures Contract (as defined
above) in which you have a Beneficial Ownership interest: any account in your
individual name; any joint or tenant-in-common account in which you have an
interest or are a participant; any account for which you act as trustee,
executor, or custodian; any account over which you have investment discretion or
otherwise can exercise control (other than non-related clients' accounts over
which you have investment discretion), including the accounts of entities
controlled directly or indirectly by you; and any other account in which you
have a Beneficial Ownership interest (other than such accounts over which you
have no investment discretion and cannot otherwise exercise control).

Portfolio Employee

       The term "Portfolio Employee" means: (1) a portfolio manager or any
employee of PIMCO (or of any company in a control relationship with PIMCO) who,
in connection with his or her regular functions or duties, makes or participates
in making recommendations regarding the purchase or sale of securities by a
Fund, or (2) any natural person who controls PIMCO and who obtains information
concerning recommendations made to a Fund that is an Advisory Client regarding
the purchase or sale of Securities by the Fund. For these purposes, "control"
has the same meaning as in Section 2(a)(9) of the Investment Company Act (15
U.S.C. (S) 80a-2(a)(9)).

                                      I-3

<PAGE>

Private Placement

     The term "Private Placement" means an offering that is exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) or
Section 4(6) (15 U.S.C. (S) 77d(2) or (S) 77d(6)) or pursuant to SEC Rules 504,
505 or 506 (17 C.F.R. (S)(S) 230.504, 230.505, or 230.506) under the Securities
Act of 1933.

Qualified Foreign Government

     The term "Qualified Foreign Government" means a national government of a
developed foreign country with outstanding Fixed Income Securities in excess of
fifty billion dollars. A list of Qualified Foreign Governments will be prepared
as of the last business day of each calendar quarter, will be available from the
Chief Compliance Officer, and will be effective for the following calendar
quarter.

Related Account

     The term "Related Account" means any account, other than a Personal
Account, that holds a Security or Futures Contract in which you have a
Beneficial Ownership interest.

Related Security

     The term "Related Security" shall mean any option to purchase or sell, and
any Security convertible into or exchangeable for, a Security that is or has
been held by PIMCO on behalf of one of its Advisory Clients or any Security that
is being or has been considered for purchase by PIMCO on behalf of one of its
Advisory Clients.

Security

     As a general matter, the term "Security" shall mean any stock, note, bond,
debenture or other evidence of indebtedness (including any loan participation or
assignment), limited partnership interest or investment contract other than an
Exempt Security (as defined above). The term "Security" includes an option on a
Security, on an index of Securities, on a currency or on a basket of currencies,
including such an option traded on the Chicago Board of Options Exchange or on
the New York, American, Pacific or Philadelphia Stock Exchanges, as well as such
an option traded in the over-the-counter market. The term "Security" shall not
include a Futures Contract or a physical commodity (such as foreign exchange or
a precious metal).

     As a technical matter, the term "Security" shall have the meaning set forth
in Section 2(a)(36) of the Investment Company Act of 1940 (15 U.S.C. (S)
80a-2(a)(36)), which defines a Security to mean:

     Any note, stock, treasury stock, bond debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing agreement,
collateral-trust certificate, preorganization certificate of subscription,
transferable share, investment contract, voting-trust certificate, certificate
of deposit for a security, fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or privilege on any security
(including a certificate


                                       I-4

<PAGE>

of deposit) or on any group or index of securities (including any interest
therein or based on the value thereof), or any put, call, straddle, option, or
privilege entered into on a national securities exchange relating to foreign
currency, or, in general, any interest or instrument commonly known as a
"security", or any certificate of interest or instrument commonly known as a
"security", or any certificate of interest or participation in, temporary or
interim certificate for, receipt for, guarantee of, warrant or right to
subscribe to or purchase, any of the foregoing, except that the term "Security"
shall not include any Security that is an Exempt Security (as defined above), a
Futures Contract or a physical commodity (such as foreign exchange or precious
metal).

Tax-Exempt Municipal Bond

     The term "Tax-Exempt Municipal Bond" shall mean any Fixed Income Security
exempt from federal income tax that is issued by a state or local government or
a political subdivision thereof.


                                       I-5

<PAGE>

                                   Appendix II

                                 PIMCO ADVISORS

                      Insider Trading Policy and Procedures

                             Effective July 1, 2001

Section I. Policy Statement on Insider Trading

A.   Policy Statement on Insider Trading

PIMCO Advisors L.P. ("PIMCO Advisors"), its affiliates, PIMCO Partners, G.P.,
Cadence Capital Management, NFJ Investment Group, Oppenheimer Capital, and PIMCO
Equity Advisors (collectively the "Company" or "PIMCO Advisors") forbid any of
their officers, directors or employees from trading, either personally or on
behalf of others (such as, mutual funds and private accounts managed by PIMCO
Advisors), on the basis of material non-public information or communicating
material non-public information to others in violation of the law. This conduct
is frequently referred to as "insider trading". This is a group wide policy.

The term "insider trading" is not defined in the federal securities laws, but
generally is used to refer to the situation when a person trades while aware of
material non-public information or to communications of material non-public
information to others in breach of a duty of trust or confidence.

While the law concerning insider trading is not static, it is generally
understood that the law prohibits:

(1)       trading by an insider, while aware of material, non-public
          information; or

(2)       trading by a non-insider, while aware of material, non-public
          information, where the information was disclosed to the non-insider in
          violation of an insider's duty to keep it confidential; or

(3)       communicating material, non-public information to others in breach of
          a duty of trust or confidence.

This policy applies to every such officer, director and employee and extends to
activities within and outside their duties at the Company. Every officer,
director and employee must read and retain this policy statement. Any questions
regarding this policy statement and the related procedures set forth herein
should be referred to a Compliance Officer of PIMCO Advisors.

                                      II-1

<PAGE>

The remainder of this memorandum discusses in detail the elements of insider
trading, the penalties for such unlawful conduct and the procedures adopted by
the Company to implement its policy against insider trading.

1.   To Whom Does This Policy Apply?

This Policy applies to all employees, officers and directors (direct or
indirect) of the Company ("Covered Persons"), as well as to any transactions in
any securities participated in by family members, trusts or corporations
controlled by such persons. In particular, this Policy applies to securities
transactions by:

     the Covered Person's spouse;
     the Covered Person's minor children;
     any other relatives living in the Covered Person's household;
     a trust in which the Covered Person has a beneficial interest, unless such
     person has no direct or indirect control over the trust;
     a trust as to which the Covered Person is a trustee;
     a revocable trust as to which the Covered Person is a settlor;
     a corporation of which the Covered Person is an officer, director or 10% or
     greater stockholder; or
     a partnership of which the Covered Person is a partner (including most
     investment clubs) unless the Covered Person has no direct or indirect
     control over the partnership.

2.   What is Material Information?

Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment decisions,
or information that is reasonably certain to have a substantial effect on the
price of a company's securities.

Although there is no precise, generally accepted definition of materiality,
information is likely to be "material" if it relates to significant changes
affecting such matters as:

     dividend or earnings expectations;
     write-downs or write-offs of assets;
     additions to reserves for bad debts or contingent liabilities;
     expansion or curtailment of company or major division operations;
     proposals or agreements involving a joint venture, merger, acquisition,
       divestiture, or leveraged buy-out;
     new products or services;
     exploratory, discovery or research developments;
     criminal indictments, civil litigation or government investigations;
     disputes with major suppliers or customers or significant changes in

                                      II-2

<PAGE>

        the relationships with such parties;
       labor disputes including strikes or lockouts;
       substantial changes in accounting methods;
       major litigation developments;
       major personnel changes;
       debt service or liquidity problems;
       bankruptcy or insolvency;
       extraordinary management developments;
       public offerings or private sales of debt or equity securities;
       calls, redemptions or purchases of a company's own stock;
       issuer tender offers; or
       recapitalizations.

Information provided by a company could be material because of its expected
effect on a particular class of the company's securities, all of the company's
securities, the securities of another company, or the securities of several
companies. Moreover, the resulting prohibition against the misuses of "material"
information reaches all types of securities (whether stock or other equity
interests, corporate debt, government or municipal obligations, or commercial
paper) as well as any option related to that security (such as a put, call or
index security).

Material information does not have to relate to a company's business. For
example, in Carpenter v. U.S., 108 U.S. 316 (1987), the Supreme Court considered
as material certain information about the contents of a forthcoming newspaper
column that was expected to affect the market price of a security. In that case,
a reporter for The Wall Street Journal was found criminally liable for
disclosing to others the dates that reports on various companies would appear in
the Journal and whether those reports would be favorable or not.

3.     What is Non-public Information?

In order for issues concerning insider trading to arise, information must not
only be "material", it must be "non-public". "Non-public" information is
information which has not been made available to investors generally.
Information received in circumstances indicating that it is not yet in general
circulation or where the recipient knows or should know that the information
could only have been provided by an "insider" is also deemed "non-public"
information.

At such time as material, non-public information has been effectively
distributed to the investing public, it is no longer subject to insider trading
restrictions. However, for "non-public" information to become public
information, it must be disseminated through recognized channels of distribution
designed to reach the securities marketplace.

To show that "material" information is public, you should be able to point to
some fact verifying that the information has become generally available, for
example, disclosure in a national business and financial wire service (Dow Jones
or Reuters), a national news service (AP or UPI), a national newspaper (The Wall
Street Journal, The New York Times or Financial Times), or a publicly
disseminated disclosure document (a proxy statement or prospectus). The
circulation of


                                      II-3

<PAGE>

rumors or "talk on the street", even if accurate, widespread and reported in the
media, does not constitute the requisite public disclosure. The information must
not only be publicly disclosed, there must also be adequate time for the market
as a whole to digest the information. Although timing may vary depending upon
the circumstances, a good rule of thumb is that information is considered
non-public until the third business day after public disclosure.

Material non-public information is not made public by selective dissemination.
Material information improperly disclosed only to institutional investors or to
a fund analyst or a favored group of analysts retains its status as "non-public"
information which must not be disclosed or otherwise misused. Similarly, partial
disclosure does not constitute public dissemination. So long as any material
component of the "inside" information possessed by the Company has yet to be
publicly disclosed, the information is deemed "non-public" and may not be
misused.

Information Provided in Confidence. It is possible that one or more directors,
officers, or employees of PIMCO Advisors may become temporary "insiders" because
of a duty of trust or confidence. A duty of trust or confidence can arise: (1)
whenever a person agrees to maintain information in confidence; (2) when two
people have a history, pattern, or practice of sharing confidences such that the
recipient of the information knows or reasonably should know that the person
communicating the material non-public information expects that the recipient
will maintain its confidentiality; or (3) whenever a person receives or obtains
material non-public information from certain close family members such as
spouses, parents, children and siblings. For example, personnel at PIMCO
Advisors may become insiders when an external source, such as a company whose
securities are held by one or more of the accounts managed by PIMCO Advisors,
discloses material, non-public information to PIMCO Advisors' portfolio managers
or analysts with the expectation that the information will remain confidential.

As an "insider", PIMCO Advisors has a duty not to breach the trust of the party
that has communicated the "material, non-public" information by misusing that
information. This duty may arise because PIMCO Advisors has entered or has been
invited to enter into a commercial relationship with the company, client or
prospective client and has been given access to confidential information solely
for the corporate purposes of that company, client or prospective client. This
duty remains whether or not PIMCO Advisors ultimately participates in the
transaction.

Information Disclosed in Breach of a Duty. Analysts and portfolio managers at
PIMCO Advisors must be especially wary of "material, non-public" information
disclosed in breach of corporate insider's duty of trust or confidence that he
or she owes the corporation and shareholders. Even where there is no expectation
of confidentiality, a person may become an "insider" upon receiving material,
non-public information in circumstances where a person knows, or should know,
that a corporate insider is disclosing information in breach of a duty of trust
and confidence that he or she owes the corporation and its shareholders. Whether
the disclosure is an improper "tip" that renders the recipient a "tippee"
depends on whether the corporate insider expects to benefit personally, either
directly or indirectly, from the disclosure. In the context of an improper
disclosure by a corporate insider, the requisite "personal benefit" may not be
limited to a present or future monetary gain. Rather, a prohibited personal
benefit

                                      II-4

<PAGE>

could include a reputational benefit, an expectation of a "quid pro quo" from
the recipient or the recipient's employer by a gift of the "inside" information.

A person may, depending on the circumstances, also become an "insider" or
"tippee" when he or she obtains apparently material, non-public information by
happenstance, including information derived from social situations, business
gatherings, overheard conversations, misplaced documents, and "tips" from
insiders or other third parties.

4.     Identifying Material Information

Before trading for yourself or others, including investment companies or private
accounts managed by the Company, in the securities of a company about which you
may have potential material, non-public information, ask yourself the following
questions:

i.     Is this information that an investor could consider important in making
       his or her investment decisions? Is this information that could
       substantially affect the market price of the securities if generally
       disclosed?

ii.    To whom has this information been provided? Has the information been
       effectively communicated to the marketplace by being published in The
       Financial Times, Reuters, The Wall Street Journal or other publications
       of general circulation?

Given the potentially severe regulatory, civil and criminal sanctions to which
you the Company and its personnel could be subject, any director, officer and
employee uncertain as to whether the information he or she possesses is
"material non-public" information should immediately take the following steps:

i.     Report the matter immediately to a Compliance Officer or the General
       Counsel of PIMCO Advisors;

ii.    Do not purchase or sell the securities on behalf of yourself or others,
       including investment companies or private accounts managed by PIMCO
       Advisors; and

iii.   Do not communicate the information inside or outside the Company, other
       than to a Compliance Officer or the General Counsel of PIMCO Advisors.

After the Compliance Officer or General Counsel has reviewed the issue, you will
be instructed to continue the prohibitions against trading and communication or
will be allowed to trade and communicate the information.

5.     Penalties for Insider Trading

Penalties for trading on or communicating material non-public information are
severe, both for individuals involved in such unlawful conduct and their
employers. A person can be subject to

                                      II-5

<PAGE>

some or all of the penalties below even if he or she does not personally benefit
from the violation. Penalties include:

       civil injunctions
       treble damages
       disgorgement of profits
       jail sentences
       fines for the person who committed the violation of up to three times
         the profit gained or loss avoided, whether or not the person actually
         benefited, and
       fines for the employer or other controlling person of up to the greater
         of $1,000,000 or three times the amount of the profit gained or loss
         avoided.

In addition, any violation of this policy statement can be expected to result in
serious sanctions by the Company, including dismissal of the persons involved.

Section II. Procedures to Implement the Policy Against Insider Trading

A.     Procedures to Implement the Policy Against Insider Trading

The following procedures have been established to aid the officers, directors
and employees of PIMCO Advisors in avoiding insider trading, and to aid PIMCO
Advisors in preventing, detecting and imposing sanctions against insider
trading. Every officer, director and employee of PIMCO Advisors must follow
these procedures or risk serious sanctions, including dismissal, substantial
personal liability and criminal penalties.

Trading Restrictions and Reporting Requirements

1.     No employee, officer or director of the Company who is aware of material
       non-public information relating to the Company or any of its affiliates
       or subsidiaries, including Allianz AG, may buy or sell any securities of
       the Company, including Allianz AG, or engage in any other action to take
       advantage of, or pass on to others, such material non-public information.

2.     No employee, officer or director of the Company who is aware of material
       non-public information which relates to any other company or entity in
       circumstances in which such person is deemed to be an insider or is
       otherwise subject to restrictions under the federal securities laws may
       buy or sell securities of that company or otherwise take advantage of, or
       pass on to others, such material non-public information.

3.     No employee, officer or director of PIMCO Advisors shall engage in a
       securities transaction with respect to the securities of Allianz AG,
       except in accordance with the specific procedures published from time to
       time by PIMCO Advisors.

                                      II-6

<PAGE>

4.     No employee shall engage in a securities transaction with respect to any
       securities of any other company, except in accordance with the specific
       procedures set forth in PIMCO Advisors' Code of Ethics.

5.     Employees shall submit reports concerning each securities transaction in
       accordance with the terms of the Code of Ethics and verify their personal
       ownership of securities in accordance with the procedures set forth in
       the Code of Ethics.

6.     Because even inadvertent disclosure of material non-public information to
       others can lead to significant legal difficulties, officers, directors
       and employees of PIMCO Advisors should not discuss any potentially
       material non-public information concerning PIMCO Advisors or other
       companies, including other officers, employees and directors, except as
       specifically required in the performance of their duties

B.     Chinese Wall Procedures

The Insider Trading and Securities Fraud Enforcement Act in the US requires the
establishment and strict enforcement of procedures reasonably designed to
prevent the misuse of "inside" information/1/. Accordingly, you should not
discuss material non-public information about PIMCO Advisors or other companies
with anyone, including other employees, except as required in the performance of
your regular duties. In addition, care should be taken so that such information
is secure. For example, files containing material non-public information should
be sealed; access to computer files containing material non-public information
should be restricted.

C.     Resolving Issues Concerning Insider Trading

The federal securities laws, including the US laws governing insider trading,
are complex. If you have any doubts or questions as to the materiality or
non-public nature of information in your possession or as to any of the
applicability or interpretation of any of the foregoing procedures or as to the
propriety of any action, you should contact your Compliance Officer. Until
advised to the contrary by a Compliance Officer, you should presume that the
information is material and non-public and you should not trade in the
securities or disclose this information to anyone.




- --------------
/1/ The antifraud provisions of United States securities laws reach insider
trading or tipping activity worldwide which defrauds domestic securities
markets. In addition, the Insider Trading and Securities Fraud Enforcement Act
specifically authorizes the SEC to conduct investigations at the request of
foreign governments, without regard to whether the conduct violates United
States law.

                                      II-7

<PAGE>

                                  Appendix III

                            ACKNOWLEDGMENT OF RECEIPT

                                     of the
                                 Code of Ethics
                                     and the
                    Insider Trading Policy and Procedures of

                      PACIFIC INVESTMENT MANAGEMENT COMPANY

       I hereby certify that I have received the attached Code of Ethics and
Insider Trading Policy and Procedures. I hereby agree to read the Code, to make
a reasonable effort to understand its provisions and to ask questions about
those provisions I find confusing or difficult to understand. I also agree to
comply with the Code, including its general principles, its reporting
requirements, its preclearance requirements, and its provisions regarding gifts
and service as a director. I also agree to advise members of my Immediate Family
about the existence of the Code of Ethics, its applicability to their personal
trading activity, and my responsibility to assure that their personal trading
activity complies with the Code of Ethics. Finally, I agree to cooperate fully
with any investigation or inquiry by or on behalf of a Compliance Officer to
determine my compliance with the provisions of the Code. I recognize that any
failure to comply in all aspects with the Code and to honor the commitments made
by this acknowledgment may result in disciplinary action, including dismissal.



Date:_____________________________             _________________________________
                                               Signature




                                               _________________________________
                                               Print Name

<PAGE>

                                   Appendix IV

                       ANNUAL CERTIFICATION OF COMPLIANCE

                                    with the
                                Code of Ethics of

                      PACIFIC INVESTMENT MANAGEMENT COMPANY



       I hereby certify that I have complied with the requirements of the Code
of Ethics and Insider Trading Policy and Procedures that have applied to me
during the year ended December 31, 200_. In addition, I hereby certify that I
have read the Code and understand its provisions. I also certify that I
recognize that I am subject to the provisions of the Code and that I have
disclosed, reported, or caused to be reported all transactions required to be
disclosed or reported pursuant to the requirements of the Code. I recognize that
any failure to comply in all aspects with the Code and that any false statement
in this certification may result in disciplinary action, including dismissal.



Date:______________________________            _________________________________
                                               Signature



                                               _________________________________
                                               Print Name

<PAGE>

                                   Appendix V

                           INITIAL REPORT OF ACCOUNTS

                                 Pursuant to the
                                Code of Ethics of

                      PACIFIC INVESTMENT MANAGEMENT COMPANY

     In accordance with the Code of Ethics, I have attached to this form copies
of the most recent statements for each and every Personal Account and Related
Account that holds or is likely to hold a Security or Futures Contract in which
I have a Beneficial Ownership interest, as well as copies of confirmations for
any and all Investment Transactions subsequent to the effective dates of those
statements./1/

     In addition, I hereby supply the following information for each and every
Personal Account and Related Account in which I have a Beneficial Ownership
interest for which I cannot supply the most recent account statement:

(1)  Name of employee:                              ____________________________

(2)  If different than #1, name of the person
     in whose name the account is held:             ____________________________

(3)  Relationship of (2) to (1):                    ____________________________

(4)  Firm(s) at which Account is maintained:        ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

(5)  Account Number(s):                             ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

(6)  Phone number(s) of Broker or Representative:   ____________________________

                                                    ____________________________

                                                    ____________________________

                                                    ____________________________

_____________________________
/1/  The Code of Ethics uses various capitalized terms that are defined in
Appendix I to the Code. The capitalized terms used in this Report have the same
definitions.

<PAGE>
(7)  Account holdings:

     Name of Security      Quantity        Principal Amount   Custodian
1.   ___________________   ______________  _______________    __________________

2.   ___________________   ______________  _______________    __________________

3.   ___________________   ______________  _______________    __________________

4.   ___________________   ______________  _______________    __________________

5.   ___________________   ______________  _______________    __________________

(Attach additional sheets if necessary)

     I also supply the following information for each and every Security or
Futures Contract in which I have a Beneficial Ownership interest, to the extent
this information is not available elsewhere on this form or from the statements
and confirmations attached to this form. This includes Securities or Futures
Contracts held at home, in safe deposit boxes, or by an issuer.

<TABLE>
<CAPTION>
         Person Who           Description
     Owns the Security      of the Security
    Or Futures Contract   Or Futures Contract       Quantity         Principal Amount       Custodian
    -------------------   -------------------       --------         ----------------       ---------
<S>                       <C>                  <C>                  <C>                 <C>
1.  ___________________    _________________   _________________    _________________   _________________

2.  ___________________    _________________   _________________    _________________   _________________

3.  ___________________    _________________   _________________    _________________   _________________

4.  ___________________    _________________   _________________    _________________   _________________

5   ___________________    _________________   _________________    _________________   _________________
</TABLE>


(Attach additional sheets if necessary.)

     I hereby certify that this form and the attachments (if any) identify all
of the Personal Accounts, Related Accounts, Securities and Futures Contracts in
which I have a Beneficial Ownership interest as of this date.


                                                ________________________________
                                                Signature


                                                ________________________________
                                                Print Name


Date:_________________

Attachments

<PAGE>

                                   Appendix VI

                    PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

                          PIMCO FUNDS DISTRIBUTORS LLC

                   QUARTERLY REPORT OF INVESTMENT TRANSACTIONS

                     FOR THE QUARTER ENDED DECEMBER 31, 2001

================================================================================

Please mark one of the following:

     [_] No reportable Investment Transactions have occurred.

     [_] Except as indicated below, all reportable Investment Transactions were
made through Personal Accounts and Related Accounts identified on the attached
list, which, except as indicated, represents a complete list of the Personal
Accounts and Related Accounts that hold Securities or Futures Contracts in which
I have or had a Beneficial Ownership interest and for which PIMCO should have
received or will receive timely duplicate broker reports for the calendar
quarter just ended./1/ I hereby certify that the broker, dealer, bank or futures
commission merchant for each such account has been instructed to send a
Compliance Officer timely duplicate broker reports for that account.

The following information for Investment Transactions during the calendar
quarter just ended does not appear on the duplicate broker reports referenced
above.

<TABLE>
<CAPTION>
Transaction  Title, Interest Rate and Maturity    Number of Shares or Contracts  Nature of Transaction  Transaction  Broker, Dealer,
   Date     Date of Security or Futures Contract      And Principal Amount        (i.e., Buy or Sell)      Price       Bank or FCM
<S>         <C>                                   <C>                            <C>                    <C>          <C>
____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________
</TABLE>

SPECIAL NOTE TO PIMCO FUNDS DISTRIBUTORS LLC REGISTERED REPS AND ACCESS PERSONS:
You will not have to fill out an extra form for each quarter for PIMCO Funds
Distributors LLC.

                                      SIGNED:     ______________________________

                                      PRINT NAME: ______________________________

                                      DATE:       ______________________________

_______________________
     1   The Code of Ethics uses various capitalized terms that are defined in
Appendix I to the Code. The capitalized terms used in this Report have the same
definitions.

<PAGE>

1.    Please see the Code of Ethics for a full description of the Investment
      Transactions that must be reported.

2.    Transaction Date. In the case of a market transaction, state the trade
      date (not the settlement date).

3.    Title of Security or Futures Contract. State the name of the issuer and
      the class of the Security (e.g., common stock, preferred stock or
      designated issue of debt securities). For Fixed Income Securities, please
      provide the Security's interest rate and maturity date. For a Futures
      Contract, state the title of any Security subject to the Futures Contract
      and the expiration date of the Futures Contract.

4.    Number of Shares or Contracts and Principal Amount. State the number of
      shares of Securities, the face amount of Fixed Income Securities or the
      units of other securities. For options, state the amount of securities
      subject to the option. Provide the principal amount of each Security or
      Futures Contract. If your ownership interest was through a spouse,
      relative or other natural person or through a partnership, trust, other
      entity, state the entire quantity of Securities or Futures Contracts
      involved in the transaction. You may indicate, if you wish, the extent of
      your interest in the transaction.

5.    Nature of Transaction. Identify the nature of the transaction (e.g.,
      purchase, sale or other type of acquisition or disposition).

6.    Transaction Price. State the purchase or sale price per share or other
      unit, exclusive of brokerage commissions or other costs of execution. In
      the case of an option, state the price at which it is currently
      exercisable. No price need be reported for transactions not involving
      cash.

7.    Broker, Dealer, Bank or FCM Effecting Transaction. State the name of the
      broker, dealer, bank or FCM with or through which the transaction was
      effected.

8.    Signature. Sign and date the report in the spaces provided.

9.    Filing of Report. A report should be filed NOT LATER THAN 10 CALENDAR DAYS
      after the end of each calendar quarter with:

            PIMCO
            ATTN: Compliance Officer
            840 Newport Center Drive
            Suite 300
            Newport Beach, CA 92660

10.   Duplicate Broker Reports. Please remember that duplicates of all trade
      confirmations, purchase and sale reports, and periodic statements must be
      sent to the firm by your broker. You should use the address above.

<PAGE>


                                  Appendix VII

                    PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

                          PIMCO FUNDS DISTRIBUTORS LLC

                           ANNUAL HOLDINGS REPORT AND
                FOURTH QUARTER REPORT OF INVESTMENT TRANSACTIONS

================================================================================


                FOR THE YEAR AND QUARTER ENDED DECEMBER 31, 2001

================================================================================

         I hereby certify that, except as indicated below, all Securities or
Futures Contracts in which I had a Beneficial Ownership interest at the end of
the 2001 calendar year were held in Personal Accounts or Related Accounts
identified on the attached list, for which PIMCO should have received or will
receive an account statement of holdings as of the end of that calendar year./1/
I hereby certify that the broker, dealer, bank or futures commission merchant
for each such account has been instructed to send a Compliance Officer timely
duplicate broker reports, including a statement of holdings in that account as
of the end of the calendar year.

The following information describes other Securities or Futures Contracts in
which I had a Beneficial Ownership interest as of the end of the 2001 calendar
year:

<TABLE>
<CAPTION>
     Title, Interest Rate and Maturity                Number of Shares or Contracts               Broker, Dealer,
    Date of Security or Futures Contract                   And Principal Amount                     Bank or FCM
<S>                                                   <C>                                         <C>
____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________

____________________________________________________________________________________________________________________________________
</TABLE>

- -----------------------
1 The Code of Ethics uses various capitalized terms that are defined in
Appendix I to the Code. The capitalized terms used in this Report have the same
definitions.

<PAGE>

     Except as indicated below, all reportable Investment Transactions during
the quarter ended December 31, 2001, were made through Personal Accounts and
Related Accounts identified on the attached list, which, except as indicated,
represents a complete list of the Personal Accounts and Related Accounts that
hold Securities or Futures Contracts in which I have or had a Beneficial
Ownership interest and for which PIMCO should have received or will receive
timely duplicate broker reports for the calendar quarter just ended.

The following information for Investment Transactions during the calendar
quarter just ended does not appear on the duplicate broker reports referenced
above.

<TABLE>
<CAPTION>
Transaction   Title, Interest Rate and Maturity   Number of Shares or Contracts  Nature of Transaction  Transaction  Broker, Dealer,
   Date     Date of Security or Futures Contract      And Principal Amount        (i.e., Buy or Sell)      Price       Bank or FCM
<S>         <C>                                   <C>                             <C>                    <C>          <C>
___________________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________

___________________________________________________________________________________________________________________________________
</TABLE>

SPECIAL NOTE TO PIMCO FUNDS DISTRIBUTORS LLC REGISTERED REPS AND ACCESS PERSONS:
You will not have to fill out an extra form for each year for PIMCO Funds
Distributors LLC.

                                                SIGNED:_________________________


                                                PRINT NAME:_____________________


                                                DATE:___________________________

<PAGE>

1.     Please see the Code of Ethics for a full description of the Investment
       Transactions that must be reported.

2.     Transaction Date. In the case of a market transaction, state the trade
       date (not the settlement date).

3.     Title of Security or Futures Contract. State the name of the issuer and
       the class of the Security (e.g., common stock, preferred stock or
       designated issue of debt securities). For Fixed Income Securities, please
       provide the Security's interest rate and maturity date. For a Futures
       Contract, state the title of any Security subject to the Futures Contract
       and the expiration date of the Futures Contract.

4.     Number of Shares or Contracts and Principal Amount. State the number of
       shares of Securities, the face amount of Fixed Income Securities or the
       units of other securities. For options, state the amount of securities
       subject to the option. Provide the principal amount of each Security or
       Futures Contract. If your ownership interest was through a spouse,
       relative or other natural person or through a partnership, trust, other
       entity, state the entire quantity of Securities or Futures Contracts
       involved in the transaction. You may indicate, if you wish, the extent
       of your interest in the transaction.

5.     Nature of Transaction. Identify the nature of the transaction (e.g.,
       purchase, sale or other type of acquisition or disposition).

6.     Transaction Price. State the purchase or sale price per share or other
       unit, exclusive of brokerage commissions or other costs of execution. In
       the case of an option, state the price at which it is currently
       exercisable. No price need be reported for transactions not involving
       cash.

7.     Broker, Dealer, Bank or FCM Effecting Transaction. State the name of the
       broker, dealer, bank or FCM with or through which the transaction was
       effected.

8.     Signature. Sign and date the report in the spaces provided.

9.     Filing of Report. A report should be filed NOT LATER THAN 10 CALENDAR
       DAYS after the end of each calendar quarter with:

                  PIMCO
                  ATTN: Compliance Officer
                  840 Newport Center Drive
                  Suite 300
                  Newport Beach, CA 92660

10.    Duplicate Broker Reports. Please remember that duplicates of all trade
       confirmations, purchase and sale reports, and periodic statements must be
       sent to the firm by your broker. You should use the address above.

<PAGE>

                                  Appendix VIII

                            PRECLEARANCE REQUEST FORM

       This form must be submitted to a Compliance Officer before executing
any Investment Transaction for which preclearance is required under the PIMCO
Code of Ethics. Before completing this form, you should review the PIMCO Code,
including the terms defined in that Code. The capitalized terms used in this
form are governed by those definitions. In addition, the Code provides
information regarding your preclearance obligations under the Code, and
information regarding the Transactions, Securities and Futures Contracts that
are exempt from the Code's preclearance requirement./1/

       No Investment Transaction subject to preclearance may be effected prior
to receipt of written authorization of that Investment Transaction by a
Compliance Officer. Unless otherwise specified, that authorization shall be
effective, unless revoked, until the earlier of (a) the close of business on the
date authorization is given, or (b) until you discover that information on this
preclearance request form is no longer accurate.

<TABLE>
<S>                                                                       <C>
(1)  Your Name:                                                           _____________________________________

(2)  If the Investment Transaction will be in someone else's name or
     in the name of a trust, the name of that person or trust:            _____________________________________

     The relationship of that person or trust to you:                     _____________________________________

(3)  Name of the firm (e.g., broker, dealer, bank, futures
     commission merchant) through which the Investment Transaction will
     be executed:                                                         ____________________________________

     The relevant account number at that firm:                            ____________________________________

(4)  Issuer of the Security or identity of the Futures Contract for
     which preclearance is requested:                                     ____________________________________

     The relevant CUSIP number or call symbol:                            ____________________________________

(5)  The maximum number of shares, units or contracts for which
     preclearance is requested, or the market value or face amount of
     the Fixed Income Securities for which preclearance is requested:     ____________________________________

(6)  The type of Investment Transaction for which preclearance is
     requested (check all that apply):                                    ____ Purchase       ___ Sale     ____ Market Order
                                                                          ____ Limit Order (Price Of Limit Order:_______)

                         Please answer the following questions TO THE BEST OF YOUR KNOWLEDGE AND BELIEF:

(a)  Do you possess material nonpublic information regarding the Security or
     Futures Contract identified above or regarding the issuer of that Security?                        ____ Yes   ____ No

(b)  Is the Security or Futures Contract identified above held by any PIMCO
     Advisory Client or is it a Related Security (as defined in the PIMCO Code)?                        ____ Yes   ____ No

(c)  Is there a pending buy or sell order on behalf of a PIMCO Advisory Client
</TABLE>

_________________________________
/1/      Preclearance is required for any Investment Transaction in Securities,
Related Securities or Futures Contracts in a Personal Account or a Related
Account in which you have or will acquire a Beneficial Ownership interest.

<PAGE>

<TABLE>
<S>                                                                                                <C>             <C>
     for the Security or Futures Contract identified above or for a Security for
     which the Security identified above is a Related Security?                                    ____ Yes        ____ No

(d)  Do you intend or do you know of another's intention to purchase or sell the
     Security or Futures Contract identified above, or a Security for which the
     Security identified above is a Related Security, on behalf of a PIMCO
     Advisory Client?                                                                              ____ Yes        ____ No

(e)  Has the Security or Futures Contract identified above or a Related
     Security been considered for purchase by a PIMCO Advisory Client within the
     most recent 15 days?  (Note: rejection of any opportunity to purchase the
     Security or Futures Contract for an Advisory Client would require an
     affirmative response to this question.)                                                       ____ Yes        ____ No

(f)  If you are a Portfolio Employee, is the Security being acquired in an
     Initial Public Offering?/2/                                                                   ____ Yes        ____ No

(g)  If you are a Portfolio Employee, are you acquiring or did you acquire
     Beneficial Ownership of the Security in a Private Placement?/3/                               ____ Yes        ____ No

(h)  If you are seeking preclearance of a purchase or sale of Securities, have
     you purchased or sold the same or similar Securities, or have you acquired
     or disposed of a Beneficial Ownership interest in the same or similar
     Securities, within the past 60 calendar days?/4/                                              ____ Yes        ____ No
</TABLE>

By executing this form, you hereby certify that you have reviewed the PIMCO Code
of Ethics and believe that the Investment Transaction for which you are
requesting preclearance complies with the General Principles and the specific
requirements of the PIMCO Code.

                                              __________________________________
                                                      Employee Signature


                                              __________________________________
                                                      Print or Type name


                                              __________________________________
                                                        Date Submitted

__________________________
/2/ Under the PIMCO Code, Portfolio Employees generally are not permitted to
acquire Securities in an Initial Public Offering.
/3/ The PIMCO Code applies special rules to the acquisition of Securities
through a Private Placement and to the disposition of Securities acquired
through a Private Placement.
/4/ Under the PIMCO Code, you may not profit from short-term trades in Fixed
Income Securities. A Portfolio Employee may not profit from short-term trades in
Designated Equities Securities and a Municipal Bond Portfolio Employee may not
profit from short-term trades in Tax-Exempt Municipal Bonds. This rule does not
apply to transactions in U.S. Government Securities, mutual fund shares, index
options or Futures Contracts.

<PAGE>

You are authorized to execute the Investment Transaction described above. Unless
indicated otherwise below, this authorization remains effective, unless revoked,
until: (a) the close of business today, or (b) until you discover that the
information on this request form is no longer accurate.

                        _________________________________________________
                                     Compliance Officer

                        _________________________________________________
                                     Date of Authorization

<PAGE>

                                   Appendix IX

                            PRECLEARANCE REQUEST FORM

                                       for

                            PIMCO'S CLOSED END FUNDS

<TABLE>
<S>                                                                       <C>
(1) Name of employee requesting authorization:                            ________________________

(2) If different from #1, name of account where the trade
    will occur:                                                           ________________________

(3) Relationship of (2) to (1):                                           ________________________

(4) Name of Firm at which the account is held:                            ________________________

(5) Name of the PIMCO Closed End Fund:                                    ________________________

(6) Maximum number of shares to be purchased or sold:                     ________________________

(7) Check those that are applicable:

    ____Purchase   ____ Sale   ____ Market Order  ____ Limit Order (Price of Limit Order: _______)

Prior to trading, you must consult with your Compliance Officer for authority to
trade.

(8) Do you possess material nonpublic information regarding
     the PIMCO Closed End Fund/5/                                              ____ Yes    ____ No

(9) Have you or any Related Account covered by the authorization
    provisions of the Code purchased or sold shares of the
    PIMCO Closed End Fund within the past 6 months?                            ____ Yes    ____ No
</TABLE>


__________________
/5/ Please note that employees are not permitted to acquire or sell securities
when they possess material nonpublic information regarding the security or the
issuers of the security.

<PAGE>

I have read the Code of Ethics for PIMCO dated December 31, 2001, within the
prior 12 months and believe that the proposed trade fully complies with the
requirements of the Code.


                               ______________________________
                               Employee Signature


                               ______________________________
                               Print Name


                               ______________________________
                               Date Submitted


Authorized By: _______________________

Authorization Date: ___________________

THIS TRADE MUST BE EXECUTED BY THE CLOSE OF BUSINESS ON THE AUTHORIZATION DATE.

<PAGE>

                                   Appendix X

                               COMPLIANCE OFFICERS

                    PACIFIC INVESTMENT MANAGEMENT COMPANY LLC




           PIMCO's Compliance Officers, as of December 31, 2001, are:


                                Denise C. Seliga
                           (Chief Compliance Officer)

                               Bradley W. Paulson

                               Mohan V. Phansalkar

                                 Richard M. Weil

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(S)
<SEQUENCE>24
<FILENAME>dex99s.txt
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
<PAGE>

                                                                      Exhibit s.

                                POWER OF ATTORNEY

     We, the undersigned Trustees and officers of PIMCO New York Municipal
Income Fund II (the "Trust"), hereby severally constitute and appoint each of
Stephen J. Treadway, Newton B. Schott, Jr., Brian S. Shlissel, Joseph B.
Kittredge, Jr. and David C. Sullivan, and each of them singly, with full powers
of substitution and resubstitution, our true and lawful attorney, with full
power to him to sign for us, and in our name and in the capacities indicated
below, any Registration Statement of the Trust on Form N-2, all Pre-Effective
Amendments to any such Registration Statement of the Trust, any and all
subsequent Post-Effective Amendments to said Registration Statement, any and all
supplements or other instruments in connection therewith, and any subsequent
Registration Statements for the same offering which may be filed under Rule
462(b), and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission and the
securities regulators of the appropriate states and territories, and generally
to do all such things in our name and on our behalf in connection therewith as
said attorney deems necessary or appropriate to comply with the Securities Act
of 1933, the Investment Company Act of 1940, all related requirements of the
Securities and Exchange Commission and of the appropriate state and territorial
regulators, granting unto said attorney full power and authority to do and
perform each and every act and thing requisite or necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorney lawfully
could do or cause to be done by virtue hereof.

<TABLE>
<CAPTION>
Name                               Capacity                        Date
- ----                               --------                        ----
<S>                            <C>                             <C>
/s/ Stephen J. Treadway        President, Trustee              June 18, 2002
- ---------------------------
Stephen J. Treadway

/s/ Paul Belica                Trustee                         June 18, 2002
- ---------------------------
Paul Belica

/s/ Robert E. Connor           Trustee                         June 18, 2002
- ---------------------------
Robert E. Connor

/s/ John J. Dalessandro II     Trustee                         June 18, 2002
- ---------------------------
John J. Dalessandro II

/s/ Hans Kertess               Trustee                         June 18, 2002
- ---------------------------
Hans Kertess

/s/ R. Peter Sullivan, III     Trustee                         June 18, 2002
- ---------------------------
R. Peter Sullivan, III

/s/ Newton B. Schott, Jr.      Vice President and              June 18, 2002
- ---------------------------
Newton B. Schott, Jr.          Secretary

/s/ Brian S. Shlissel          Treasurer and                   June 18, 2002
- ---------------------------
Brian S. Shlissel              Principal Financial and
                               Accounting Officer
</TABLE>

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
