SUPPLEMENT TO
INVESTMENT ADVISORY CONTRACT
PIMCO Funds: Pacific Investment Management Series
840 Newport Center Drive
Newport Beach, California 92660
_____________________, 2000
Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, California 92660
RE: PIMCO European Convertible Fund
PIMCO Asset-Backed Securities Portfolio
PIMCO Asset-Backed Securities Portfolio II
Dear Sirs:
This will confirm the agreement between the undersigned (the "Trust")
and Pacific Investment Management Company LLC (the "Adviser") as follows:
1. The Trust is an open-end investment company organized as a
Massachusetts business trust, and consisting of such investment portfolios as
have been or may be established by the Trustees of the Trust from time to time.
A separate series of shares of beneficial interest of the Trust is offered to
investors with respect to each investment portfolio. The PIMCO European
Convertible Fund, PIMCO Asset-Backed Securities Portfolio, and PIMCO
Asset-Backed Securities Portfolio II (the "Portfolios") are separate investment
portfolios of the Trust.
2. The Trust and the Adviser have entered into an Investment Advisory
Contract ("Contract") dated May 5, 2000, pursuant to which the Trust has
employed the Adviser to provide investment advisory and other services specified
in the Contract, and the Adviser has accepted such employment.
3. As provided in paragraph 2 of the Contract, the Trust hereby
appoints the Adviser to serve as Investment Adviser with respect to each
Portfolio, and the Adviser accepts such appointment, the terms and conditions of
such employment to be governed by the Contract, which is hereby incorporated
herein by reference.
4. As provided in paragraph 6 of the Contract and subject to further
conditions as set forth therein, the Trust shall with respect to each Portfolio
pay the Adviser a monthly fee on the first business day of each month, based
upon the average daily value (as determined on each business day at the time set
forth in the Prospectus or Offering Memorandum for determining net asset value
per share) of the net assets of the Portfolio during the preceding month, at an
annual rate of 0.50% for the PIMCO European Convertible Fund, and at an annual
rate of 0.02% for the PIMCO Asset-Backed Securities Portfolio and PIMCO
Asset-Backed Securities Portfolio II.
5. This Supplement and the Contract shall become effective with respect
to each Portfolio on _____________, 2000 and shall continue in effect with
respect to each Portfolio for a period of more than two years from that date
only so long as the continuance is specifically approved at least annually (a)
by the vote of a majority of the outstanding voting securities (as defined in
the 1940 Act) of each Portfolio or by the Trust's Board of Trustees and (b) by
the vote, cast in person at a meeting called for the purpose, of a majority of
the Trust's trustees who are not parties to this Contract or "interested
persons" (as defined in the 1940 Act) of any such party. This Contract may be
terminated with respect to each Portfolio at any time, without the payment of
any penalty, by a vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of each Portfolio or by a vote of a majority of the
Trust's entire Board of Trustees on 60 days' written notice to the Adviser or by
the Adviser on 60 days' written notice to the Trust. This Contract shall
terminate automatically in the event of its assignment (as defined in the 1940
Act).
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If the foregoing correctly sets forth the agreement between the Trust
and the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
PIMCO FUNDS: PACIFIC INVESTMENT MANAGEMENT SERIES
By: ________________________________
Title: President
ACCEPTED:
PACIFIC INVESTMENT MANAGEMENT COMPANY LLC
By: _________________________________
Title: Managing Director
