Exhibit (g)(B)
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INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
PIMCO Advisors L.P.
c/o PIMCO Funds Distributors LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
May 5, 2000
Salomon Brothers Asset Management Inc
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
This will confirm the agreement among the undersigned (the "Investment
Manager"), you (the "Investment Adviser") and the Fund (but only with respect to
subparagraph 3(b) and paragraphs 6, 7, 10 and 11 of this agreement) as follows:
I. The Investment Manager has been employed by The Emerging
Markets Income Fund II Inc (the "Fund") pursuant to a management agreement dated
May 5, 2000 between the Fund and the Investment Manager (the "Management
Agreement"). The Fund is a closed-end, non-diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"). The Fund engages in the business of investing and reinvesting its
assets in the manner and in accordance with the investment objectives and
limitations specified in the Fund's Articles of Incorporation, as amended from
time to time (the "Articles"), in the Registration Statement on Form N-2, as in
effect from time to time (the "Registration Statement"), filed with the
Securities and Exchange Commission (the "SEC") by the Fund under the 1940 Act
and the Securities Act of 1933, as amended, and in such manner and to such
extent as may from time to time be authorized by the Board of Directors of the
Fund. Copies of the documents referred to in the preceding sentence have been
furnished to the Investment Adviser. Any amendments to these documents shall be
furnished to the Investment Adviser.
1. The Investment Manager employs the Investment Adviser,
subject to the direction and control of the directors of the Fund, including
without limitation any approval of the directors of the Fund required by the
1940 Act, to (a) make, in consultation with the Investment Manager and the
Fund's Board of Directors, investment strategy decisions for the
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Fund, (b) manage the investing and reinvesting of the Fund's assets as specified
in paragraph 1, (c) place purchase and sale orders on behalf of the Fund, (d)
provide research and statistical data to the Fund in relation to investing and
other matters within the scope of the investment objectives and limitations of
the Fund, and (e) provide the following services for the Fund: (i) compliance
with the rules and regulations of the SEC, including record keeping, reporting
requirements and preparation of registration statements and proxies; (ii)
supervision of Fund operations, including coordination of functions of the
transfer agent, custodian, accountants, counsel and other parties performing
services or operational functions for the Fund, (iii) administrative and
clerical services, including accounting services and maintenance of books and
records; and (iv) services to Fund shareholders, including responding to
shareholder inquiries and maintaining a flow of information to shareholders. The
Investment Adviser shall have the sole ultimate discretion over investment
decisions for the Fund.
(a) The Investment Adviser shall, at its expense, provide the
Fund with office space, office facilities and personnel reasonably necessary for
performance of the services to be provided by the Investment Adviser pursuant to
this Agreement.
(a) Except as provided in subparagraph 3(a) hereof and
Section 1 of the Management Agreement, the Fund shall be responsible for all of
the Fund's expenses and liabilities, including organizational and offering
expenses (which include out-of-pocket expenses, but not overhead or employee
costs of the Investment Adviser); expenses for legal, accounting and auditing
services; taxes and governmental fees; dues and expenses incurred in connection
with membership in investment company organizations; fees and expenses incurred
in connection with listing the Fund's shares on any stock exchange; expenses of
leverage; costs of printing and distributing shareholder reports, proxy
materials, prospectuses, stock certificates and distribution of dividends;
charges of the Fund's custodians and sub-custodians, administrators and
sub-administrators, registrars, transfer agents, dividend disbursing agents and
dividend reinvestment plan agents; payment for portfolio pricing services to a
pricing agent, if any; registration and filing fees of the SEC; expenses of
registering or qualifying securities of the Fund for sale in the various states;
freight and other charges in connection with the shipment of the Fund's
portfolio securities; fees and expenses of non-interested directors; travel
expenses or an appropriate portion thereof of directors and officers of the Fund
who are directors, officers or employees of the Investment Adviser or the
Investment Manager to the extent that such expenses relate to attendance at
meetings of the Board of Directors or any committee thereof; salaries of
shareholder relations personnel; costs of shareholders meetings; the fees of any
rating agencies retained to rate any preferred stock or debt securities issued
by the Fund; insurance; interest; brokerage costs; and litigation and other
extraordinary or non-recurring expenses.
1. The Investment Adviser shall make investments for the
Fund's account in accordance with the investment objectives and limitations set
forth in the Articles, the Registration Statement, the 1940 Act, the provisions
of the Internal Revenue Code of 1986, as amended relating to regulated
investment companies, and policy decisions adopted by the Fund's Board of
Directors from time to time. The Investment Adviser shall advise the Fund's
officers and Board of Directors, at such times as the Fund's Board of Directors
may specify, of investments made for the Fund's account and shall, when
requested by the Fund's officers or Board of Directors, supply the reasons for
making such investments.
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2. The Investment Adviser may contract with or consult with
such banks, other securities firms, brokers or other parties, without additional
expense to the Fund, as it may deem appropriate regarding investment advice,
research and statistical data, clerical assistance or otherwise.
1. The Investment Adviser is authorized on behalf of the
Fund, from time to time when deemed to be in the best interests of the Fund and
to the extent permitted by applicable law, to purchase and/or sell securities in
which the Investment Adviser or the Investment Manager or any of their
affiliates underwrites, deals in and/or makes a market and/or may perform or
seek to perform investment banking services for issuers of such securities. The
Investment Adviser is further authorized, to the extent permitted by applicable
law, to select brokers (including brokers affiliated with the Investment Adviser
or the Investment Manager) for the execution of trades for the Fund.
1. The Investment Adviser is authorized, for the purchase and
sale of the Fund's portfolio securities, to employ such dealers and brokers as
may, in the judgment of the Investment Adviser, implement the policy of the Fund
to obtain the best net results taking into account such factors as price,
including dealer spread, the size, type and difficulty of the transaction
involved, the firm's general execution and operational facilities and the firm's
risk in positioning the securities involved. Consistent with this policy, the
Investment Adviser is authorized to direct the execution of the Fund's portfolio
transactions to dealers and brokers furnishing statistical information or
research deemed by the Investment Adviser to be useful or valuable to the
performance of its investment advisory functions for the Fund. Information so
received will be in addition to and not in lieu of the services required to be
performed by the Investment Adviser. It is understood that the expenses of the
Investment Adviser will not necessarily be reduced as a result of the receipt of
such information or research.
1. In consideration of the services to be rendered by the
Investment Adviser under this agreement, the Investment Manager shall pay the
Investment Adviser a monthly fee in United States dollars on the fifth business
day of each month for the previous month at an annual rate of 0.70% of the
Fund's average weekly net assets. If the fee payable to the Investment Adviser
pursuant to this paragraph 8 begins to accrue before the end of any month or if
this agreement terminates before the end of any month, the fee for the period
from such date to the end of such month or from the beginning of such month to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full month in which such effectiveness
or termination occurs. For purposes of calculating each such monthly fee, the
value of the Fund's net assets shall be computed at the time and in the manner
specified in the Registration Statement.
1. The Investment Adviser represents and warrants that it is
duly registered and authorized as an investment adviser under the Investment
Advisers Act of 1940, as amended, and the Investment Adviser agrees to maintain
effective all requisite registrations, authorizations and licenses, as the case
may be, until termination of this Agreement.
1. The Investment Adviser shall exercise its best judgment in
rendering the services in accordance with the terms of this agreement. The
Investment Adviser shall not be liable for any error of judgment or mistake of
law or for any act or omission or any
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loss suffered by the Fund in connection with the matters to which this agreement
relates, provided that nothing herein shall be deemed to protect or purport to
protect the Investment Adviser against any liability to the Fund or its
shareholders to which the Investment Adviser would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this agreement ("disabling conduct"). The Fund will indemnify
the Investment Adviser against, and hold it harmless from, any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses), including any amounts paid in satisfaction of judgments, in
compromise or as fines or penalties, not resulting from disabling conduct by the
Investment Adviser. Indemnification shall be made only following: (i) a final
decision on the merits by a court or other body before whom the proceeding was
brought that the Investment Adviser was not liable by reason of disabling
conduct, or (ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the Investment Adviser was not liable by
reason of disabling conduct by (a) the vote of a majority of a quorum of
directors of the Fund who are neither "interested persons" of the Fund nor
parties to the proceeding ("disinterested non-party directors"), or (b) an
independent legal counsel in a written opinion. The Investment Adviser shall be
entitled to advances from the Fund for payment of the reasonable expenses
incurred by it in connection with the matter as to which it is seeking
indemnification in the manner and to the fullest extent permissible under law.
The Investment Adviser shall provide to the Fund a written affirmation of its
good faith belief that the standard of conduct necessary for indemnification by
the Fund has been met and a written undertaking to repay any such advance if it
should ultimately be determined that the standard of conduct has not been met.
In addition, at least one of the following additional conditions shall be met:
(a) the Investment Adviser shall provide security in form and amount acceptable
to the Fund for its undertaking; (b) the Fund is insured against losses arising
by reason of the advance; or (c) a majority of a quorum of disinterested
non-party directors, or independent legal counsel, in a written opinion, shall
have determined, based on a review of facts readily available to the Fund at the
time the advance is proposed to be made, that there is reason to believe that
the Investment Adviser will ultimately be found to be entitled to
indemnification.
1. This agreement shall continue in effect until May 5, 2002
and thereafter for successive annual periods, provided that such continuance is
specifically approved at least annually (a) by the vote of a majority of the
Fund's outstanding voting securities (as defined in the 0000 Xxx) or by the
Fund's Board of Directors and (b) by the vote, cast in person at a meeting
called for the purpose, of a majority of the Fund's directors who are not
parties to this agreement or "interested persons" (as defined in the 0000 Xxx)
of any such party. This agreement may be terminated at any time, without the
payment of any penalty, by a vote of a majority of the Fund's outstanding voting
securities (as defined in the 0000 Xxx) or by a vote of a majority of the Fund's
entire Board of Directors on 60 days written notice to the Investment Adviser or
by the Investment Adviser on 60 days' written notice to the Investment Manager.
This agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act). This agreement may only be terminated in accordance
with the provisions of this paragraph 11; provided, however, that nothing
contained in this agreement shall prohibit the ability of the Investment
Manager, in the exercise of its fiduciary duty, to recommend to the Fund that
the Fund take action to terminate this agreement as provided in this paragraph
11.
2. Nothing herein shall be deemed to limit or restrict the
right of the Investment Adviser, or any affiliate of the Investment Adviser, or
any employee of the Investment
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Adviser, to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
firm, individual or association. Nothing herein shall be construed as
constituting the Investment Adviser an agent of the Investment Manager or the
Fund.
1. This Agreement shall be governed by the laws of the State
of New York; provided, however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.
1. Notices. Any notice hereunder shall be in writing and
shall be delivered in person or by telex or facsimile (followed by delivery in
person) to the parties at the addresses set forth below.
If to the Investment Adviser:
Salomon Brothers Asset Management Inc.
Seven Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Counsel
If to the Investment Manager:
PIMCO Advisors L.P.
c/o PIMCO Funds Distributors LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx
or to such other address as to which the recipient shall have informed the other
party in writing.
Unless specifically provided elsewhere, notice given as provided above
shall be deemed to have been given, if by personal delivery, on the day of such
delivery, and, if by telex or facsimile and mail, on the date on which such
telex or facsimile is sent.
1. Counterparts. This agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
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If the foregoing correctly sets forth the agreement between the
Investment Manager and the Investment Adviser, please so indicate by signing and
returning to the Investment Manager the enclosed copy hereof.
Very truly yours,
PIMCO ADVISORS L.P.
By:________________________
Name:
Title:
ACCEPTED:
SALOMON BROTHERS ASSET
MANAGEMENT INC
By:___________________________
Name:
Title:
The Emerging Markets Income
Fund II Inc hereby acknowledges
and agrees to the provisions of
subparagraph 3(b) and paragraphs
6, 7, 10 and 11 of this agreement.
THE EMERGING MARKETS INCOME FUND II INC
By:___________________________
Name:
Title:
