Exhibit h.5
Form of
ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of August __,
2003, between ______ ("Qualifying Underwriter") and PIMCO Advisors Fund
Management LLC (including any successor by merger or otherwise, "PIMCO
Advisors").
WHEREAS, PIMCO Floating Rate Income Fund (including any successor by merger
or otherwise, the "Fund") is a newly organized, diversified, closed-end
management investment company registered under the Investment Company Act of
1940, as amended (the "1940 Act"), and its common shares are registered under
the Securities Act of 1933, as amended; and
WHEREAS, PIMCO Advisors is the investment advisor of the Fund;
WHEREAS, Qualifying Underwriter is acting as an underwriter in an offering
of the Fund's common shares;
WHEREAS, PIMCO Advisors desires to provide additional compensation to
Qualifying Underwriter for acting as underwriter in an offering of the Fund's
common shares; and
WHEREAS, PIMCO Advisors desires to retain Qualifying Underwriter to provide
after-market support services designed to maintain the visibility of the Fund on
an ongoing basis, and Qualifying Underwriter is willing to render such services;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
1. (a) PIMCO Advisors hereby employs Qualifying Underwriter, for the period and
on the terms and conditions set forth herein, to provide the following
services from time to time at the reasonable request of PIMCO Advisors:
(1) after-market support services designed to maintain the visibility
of the Fund on an ongoing basis;
(2) relevant information, studies or reports regarding general trends
in the closed-end investment company and asset management
industries, if reasonably obtainable, and consult with
representatives of PIMCO Advisors in connection therewith; and
(3) information to and consult with PIMCO Advisors with respect to
applicable strategies designed to address market value discounts,
if any.
(b) At the request of PIMCO Advisors, Qualifying Underwriter shall limit
or cease any action or service provided hereunder to the extent and
for the time period requested by PIMCO Advisors; provided, however,
that pending termination of this Agreement as provided for in Section
5 hereof, any such limitation or cessation shall not relieve PIMCO
Advisors of its payment obligations pursuant to Section 2 hereof.
(c) Qualifying Underwriter will promptly notify PIMCO Advisors if it
learns of any material inaccuracy or misstatement in, or material
omission from, any written information, as of the
date such information was published, provided by Qualifying
Underwriter to PIMCO Advisors in connection with the performance of
services by Qualifying Underwriter under this Agreement.
2. PIMCO Advisors shall pay Qualifying Underwriter a fee computed weekly
and payable quarterly in arrears commencing _______, 2003 at an
annualized rate of 0.10% of the Fund's average weekly total managed
assets (including any assets attributable to any preferred shares that
may be outstanding) multiplied by ____%, which corresponds to the
percentage of common shares sold by such underwriter, for a term as
described in Section 5 hereof; provided that the sum total amount of
the fees hereunder, any fees payable by PIMCO Advisors to Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated as described under
"Underwriting" in the Fund's definitive Prospectus, plus the amount of
the expense reimbursement of $0.00667 per Common Share payable by the
Fund to the Underwriters pursuant to the Purchase Agreement, dated
December 23, 2002, by and among the Fund, PIMCO Advisors and each of
the Underwriters named therein, the "Purchase Agreement"), shall not
exceed 4.5% of the total price (including all Initial Securities and
Option Securities as such terms are described in the Purchase
Agreement), to the public of the Fund's common shares sold under the
Purchase Agreement. All quarterly fees payable hereunder shall be paid
to Qualifying Underwriter within 15 days following the end of each
calendar quarter.
3. PIMCO Advisors acknowledges that the services of Qualifying Underwriter
provided for hereunder do not include any advice as to the value of
securities or regarding the advisability of purchasing or selling any
securities for the Fund's portfolio. No provision of this Agreement
shall be considered as creating, nor shall any provision create, any
obligation on the part of Qualifying Underwriter, and Qualifying
Underwriter is not hereby agreeing, to: (i) furnish any advice or make
any recommendations regarding the purchase or sale of portfolio
securities or (ii) render any opinions, valuations or recommendations
of any kind or to perform any such similar services in connection with
providing the services described in Section 1 hereof.
4. Nothing herein shall be construed as prohibiting Qualifying Underwriter
or its affiliates from providing similar or other services to any other
clients (including other registered investment companies or other
investment managers), so long as Qualifying Underwriter's services to
PIMCO Advisors are not impaired thereby.
5. The term of this Agreement shall commence upon the date referred to
above and shall be in effect so long as PIMCO Advisors acts as the
investment manager to the Fund pursuant to the Investment Management
Agreement (as such term is defined in the Purchase Agreement) or other
subsequent advisory agreement.
6. PIMCO Advisors will furnish Qualifying Underwriter with such
information as Qualifying Underwriter believes appropriate to its
assignment hereunder (all such information so furnished being the
"Information"). PIMCO Advisors recognizes and confirms that Qualifying
Underwriter (a) will use and rely primarily on the Information and on
information available from generally recognized public sources in
performing the services contemplated by this Agreement without having
independently verified the same and (b) does not assume responsibility
for the accuracy or completeness of the Information and such other
information. To the best of PIMCO Advisors' knowledge, the Information
to be furnished by PIMCO Advisors when delivered, will be true and
correct in all material respects and will not contain any material
misstatement of fact or omit to state any material fact necessary to
make the statements contained therein not misleading. PIMCO Advisors
will promptly notify Qualifying Underwriter if it learns of any
material
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inaccuracy or misstatement in, or material omission from, any
Information delivered to Qualifying Underwriter.
7. It is understood that Qualifying Underwriter is being engaged hereunder
solely to provide the services described above to PIMCO Advisors and
that Qualifying Underwriter is not acting as an agent or fiduciary of,
and shall have no duties or liability to the current or future
shareholders of the Fund or any other third party in connection with
its engagement hereunder, all of which are hereby expressly waived.
8. PIMCO Advisors agrees that Qualifying Underwriter shall have no
liability to PIMCO Advisors or the Fund for any act or omission to act
by Qualifying Underwriter in the course of its performance under this
Agreement, in the absence of gross negligence or willful misconduct on
the part of Qualifying Underwriter. PIMCO Advisors agrees to the
indemnification and other agreement set forth in the Indemnification
Agreement attached hereto, the provisions of which are incorporated
herein by reference and shall survive the termination, expiration or
supersession of this Agreement.
9. 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") shall be governed by and construed in accordance
with the laws of the State of New York.
10. 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 exclusive jurisdiction
over the adjudication of such matters, and PIMCO Advisors and
Qualifying Underwriter consent to the jurisdiction of such courts and
personal service with respect thereto. Each of Qualifying Underwriter
and PIMCO Advisors waives all right to trial by jury in any proceeding
(whether based upon contract, tort or otherwise) in any way arising out
of or relating to this Agreement. PIMCO Advisors agrees that a final
judgment in any proceeding or counterclaim brought in any such court
shall be conclusive and binding upon PIMCO Advisors and may be enforced
in any other courts to the jurisdiction of which PIMCO Advisors is or
may be subject, by suit upon such judgment.
11. This Agreement may not be assigned by either party without the prior
written consent of the other party.
12. This Agreement (including the attached Indemnification Agreement)
embodies the entire agreement and understanding between the parties
hereto and supersedes all prior agreements and understandings relating
to the subject matter hereof. If any provision of this Agreement is
determined to be invalid or unenforceable in any respect, such
determination will not affect such provision in any other respect or
any other provision of this Agreement, which will remain in full force
and effect. This Agreement may not be amended or otherwise modified or
waived except by an instrument in writing signed by both Qualifying
Underwriter and PIMCO Advisors.
13. All notices required or permitted to be sent under this Agreement shall
be sent, if to PIMCO Advisors:
PIMCO Advisors Fund Management LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
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With a copy to:
PIMCO Advisors Fund Management LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
or if to Qualifying Underwriter:
Qualifying Underwriter
[ ]
Attention:
or such other name or address as may be given in writing to the other
parties. Any notice shall be deemed to be given or received on the
third day after deposit in the US mail with certified postage prepaid
or when actually received, whether by hand, express delivery service or
facsimile transmission, whichever is earlier.
14. This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute
one and the same agreement.
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IN WITHESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
PIMCO ADVISORS FUND MANAGEMENT LLC [Qualifying Underwriter]
By: By:
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Name: Name:
Title: Title:
By:
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Name:
Title:
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Indemnification Agreement
August __, 2003
Qualifying Underwriter
[ ]
Ladies and Gentlemen:
In connection with the engagement of _____________ ("Qualifying
Underwriter") to advise and assist the undersigned (together with its affiliates
and subsidiaries, referred to as the "Company") with the matters set forth in
the Agreement dated August __, 2003 between the Company and Qualifying
Underwriter (the "Agreement"), in the event that Qualifying Underwriter becomes
involved in any capacity in any claim, suit, action, proceeding, investigation
or inquiry (including, without limitation, any shareholder or derivative action
or arbitration proceeding) (collectively, a "Proceeding") in connection with any
matter in any way relating to or referred to in the Agreement or arising out of
the matters contemplated by the Agreement, including, without limitation,
related services and activities prior to the date of the Agreement, the Company
agrees to indemnify, defend and hold Qualifying Underwriter harmless to the
fullest extent permitted by law, from and against any losses, claims, damages,
liabilities and expenses in connection with any matter in any way relating to or
referred to in the Agreement or arising out of the matters contemplated by the
Agreement, including, without limitation, related services and activities prior
to the date of the Agreement, except to the extent that it shall be determined
by a court of competent jurisdiction in a judgment that has become final in that
it is no longer subject to appeal or other review, that such losses, claims,
damages, liabilities and expenses resulted solely from the gross negligence or
willful misconduct of Qualifying Underwriter. In addition, in the event that
Qualifying Underwriter becomes involved in any capacity in any Proceeding in
connection with any matter in any way relating to or referred to in the
Agreement or arising out of the matters contemplated by the Agreement,
including, without limitation, related services and activities prior to the date
of the Agreement, the Company will reimburse Qualifying Underwriter for its
legal and other expenses (including the cost of any investigation and
preparation) as such expenses are reasonably incurred by Qualifying Underwriter
in connection therewith. If such indemnification were not to be available for
any reason, the Company agrees to contribute to the losses, claims, damages,
liabilities and expenses involved (i) in the proportion appropriate to reflect
the relative benefits received or sought to be received by the Company and its
stockholders and affiliates and other constituencies, on the one hand, and
Qualifying Underwriter, on the other hand, in the matters contemplated by the
Agreement or (ii) if (but only if and to the extent) the allocation provided for
in clause (i) is for any reason held unenforceable, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company and its stockholders and affiliates
and other constituencies, on the one hand, and the party entitled to
contribution, on the other hand, as well as any other relevant equitable
considerations. The Company agrees that for the purposes of this paragraph the
relative benefits received, or sought to be received, by the Company and its
stockholders and affiliates, on the one hand, and the party entitled to
contribution, on the other hand, of a transaction as contemplated shall be
deemed to be in the same proportion that the total value received or paid by the
Company or its stockholders or affiliates and other constituencies, as the case
may be, as a result of or in connection with the transaction (whether or not
consummated) for which Qualifying Underwriter has been retained to perform
financial services bears to the fees paid to Qualifying Underwriter under the
Agreement; provided, that in no event shall the Company contribute less than the
amount necessary to assure that Qualifying Underwriter is not liable for
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losses, claims, damages, liabilities and expenses in excess of the amount of
fees actually received by Qualifying Underwriter pursuant to the Agreement.
Relative fault shall be determined by reference to, among other things, whether
any alleged untrue statement or omission or any other alleged conduct relates to
information provided by the Company or other conduct by the Company (or its
employees or other agents), on the one hand, or by Qualifying Underwriter, on
the other hand. The Company will not settle any Proceeding in respect of which
indemnity may be sought hereunder, whether or not Qualifying Underwriter is an
actual or potential party to such Proceeding, without Qualifying Underwriter's
prior written consent. For purposes of this Indemnification Agreement,
Qualifying Underwriter shall include Qualifying Underwriter, any of its
affiliates, each other person, if any, controlling Qualifying Underwriter or any
of its affiliates, their respective officers, current and former directors,
employees and agents, and the successors and assigns of all of the foregoing
persons. The foregoing indemnity and contribution agreement shall be in addition
to any rights that any indemnified party may have at common law or otherwise.
The Company agrees that neither Qualifying Underwriter nor any of its
affiliates, directors, agents, employees or controlling persons shall have any
liability to the Company or any person asserting claims on behalf of or in right
of the Company in connection with or as a result of either Qualifying
Underwriter's engagement under the Agreement or any matter referred to in the
Agreement, including, without limitation, related services and activities prior
to the date of the Agreement, except to the extent that it shall be determined
by a court of competent jurisdiction in a judgment that has become final in that
it is no longer subject to appeal or other review that any losses, claims,
damages, liabilities or expenses incurred by the Company resulted solely from
the gross negligence or willful misconduct of Qualifying Underwriter in
performing the services that are the subject of the Agreement.
Notwithstanding any provision contained herein, in no event shall
Qualifying Underwriter be entitled to indemnification by the Company hereunder
from and against any losses, claims, damages, liabilities or expenses in respect
of which indemnity may be sought under the Purchase Agreement.
THIS INDEMNIFICATION 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. 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 EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS,
AND THE COMPANY AND QUALIFYING UNDERWRITER CONSENT TO THE JURISDICTION OF SUCH
COURTS AND PERSONAL SERVICE WITH RESPECT THERETO. THE COMPANY HEREBY CONSENTS 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 QUALIFYING UNDERWRITER OR ANY INDEMNIFIED PARTY. EACH OF QUALIFYING
UNDERWRITER AND THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING
OR CLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN
ANY WAY RELATING TO THIS AGREEMENT. THE COMPANY AGREES THAT A FINAL JUDGMENT IN
ANY PROCEEDING OR CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT
BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY AND
MAY BE ENFORCED IN ANY OTHER COURTS TO THE JURISDICTION OF WHICH THE COMPANY IS
OR MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
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The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of Qualifying Underwriter's engagement.
This Indemnification Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one and
the same agreement.
Very truly yours,
PIMCO ADVISORS FUND MANAGEMENT LLC
By:
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Name:
Title:
Accepted and agreed to as of the date first above written:
[Qualifying Underwriter]
By
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Name:
Title:
By:
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Name:
Title:
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