EXHIBIT h.4
ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of August ,
2003, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and PIMCO Advisors Fund Management LLC ("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 manager of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering of the
Fund's common shares;
WHEREAS, PIMCO Advisors desires to provide additional compensation to
Xxxxxxx Xxxxx for acting as lead underwriter in an offering of the Fund's common
shares; and
WHEREAS, PIMCO Advisors desires to retain Xxxxxxx Xxxxx to provide
after-market support services designed to maintain the visibility of the Fund on
an ongoing basis, and Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx, for the period and on the
terms and conditions set forth herein, to provide the following services 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, Xxxxxxx Xxxxx 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) Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx to PIMCO Advisors in connection with the
performance of services by Xxxxxxx Xxxxx under this Agreement.
2. PIMCO Advisors shall pay Xxxxxxx Xxxxx a fee computed weekly and payable
quarterly in arrears commencing , 2003 at an annualized rate of
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0.15% of the Fund's average weekly total managed assets (as such term is
defined in the Prospectus dated August [__], 2003) (including any assets
attributable to any preferred shares that may be outstanding) for a term as
described in Section 5 hereof; provided that the sum total amount of the
fee hereunder, any fees payable to Qualifying Underwriters (as such term is
defined in the 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 August , 2003, by and among the
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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 offered
by the prospectus dated August , 2003. All quarterly fees payable
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hereunder shall be paid to Xxxxxxx Xxxxx within 15 days following the end
of each calendar quarter.
3. PIMCO Advisors acknowledges that the services of Xxxxxxx Xxxxx 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
Xxxxxxx Xxxxx, and Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx'x 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 xxxxxxx Xxxxxxx Xxxxx with such information as Xxxxxxx
Xxxxx believes appropriate to its assignment hereunder (all such
information so furnished being the "Information"). PIMCO Advisors
recognizes and confirms that Xxxxxxx Xxxxx (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 Xxxxxxx Xxxxx if it learns of any material inaccuracy or
misstatement in, or material omission from, any Information delivered to
Xxxxxxx Xxxxx.
7. It is understood that Xxxxxxx Xxxxx is being engaged hereunder solely to
provide the services described above to PIMCO Advisors and that Xxxxxxx
Xxxxx 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.
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8. PIMCO Advisors agrees that Xxxxxxx Xxxxx shall have no liability to PIMCO
Advisors or the Fund for any act or omission to act by Xxxxxxx Xxxxx in the
course of its performance under this Agreement, in the absence of gross
negligence or willful misconduct on the part of Xxxxxxx Xxxxx. 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 Xxxxxxx Xxxxx consent
to the jurisdiction of such courts and personal service with respect
thereto. Each of Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx 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
With a copy to:
PIMCO Advisors Fund Management LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
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or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx
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 XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: By:
-------------------------------- ------------------------------------
Name: Name:
Title: Title:
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Xxxxxxx Xxxxx & Co. Indemnification Agreement
August , 2003
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Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") 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 Xxxxxxx Xxxxx (the "Agreement"), in the event that
Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx
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 Xxxxxxx Xxxxx. In addition, in the
event that Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx for its legal and
other expenses (including the cost of any investigation and preparation) as such
expenses are reasonably incurred by Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx, 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 Xxxxxxx Xxxxx has been
retained to perform financial services bears to the fees paid to Xxxxxxx Xxxxx
under the Agreement; provided, that in no event shall the Company contribute
less than the amount
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necessary to assure that Xxxxxxx Xxxxx is not liable for losses, claims,
damages, liabilities and expenses in excess of the amount of fees actually
received by Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx, on the other hand. The
Company will not settle any Proceeding in respect of which indemnity may be
sought hereunder, whether or not Xxxxxxx Xxxxx is an actual or potential party
to such Proceeding, without Xxxxxxx Xxxxx'x prior written consent. For purposes
of this Indemnification Agreement, Xxxxxxx Xxxxx shall include Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, any of its affiliates,
each other person, if any, controlling Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx 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 Xxxxxxx Xxxxx'x 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 Xxxxxxx Xxxxx in performing the services
that are the subject of the Agreement.
Notwithstanding any provision contained herein, in no event shall Xxxxxxx
Xxxxx 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 XXXXXXX XXXXX 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
XXXXXXX XXXXX OR ANY INDEMNIFIED PARTY. EACH OF XXXXXXX XXXXX 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 Xxxxxxx Xxxxx'x 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:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By
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Name:
Title:
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