Exhibit k.3
PIMCO FLOATING RATE INCOME FUND
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AUCTION AGENCY AGREEMENT
dated as of , 2003
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Relating to
Auction Market Preferred Shares
Series T, Series W and
Series TH
of
PIMCO FLOATING RATE INCOME FUND
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DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
Exhibit k.3
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of , 2003,
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is between PIMCO Floating Rate Income Fund (the "Fund") and Deutsche Bank Trust
Company Americas, a New York banking corporation.
The Fund proposes to issue an aggregate of preferred shares, par value
$0.00001 per share, liquidation preference $25,000 per share, designated as
Auction Market Preferred Shares, Series T, Auction Market Preferred Shares,
Series W, and Auction Market Preferred Shares, Series TH (the "AMPS"), pursuant
to the Fund's Second Amended and Restated Bylaws (as defined below).
The Fund desires that Deutsche Bank Trust Company Americas perform certain
duties as agent in connection with each Auction (as defined below) of AMPS (in
such capacity, the "Auction Agent"), and as the transfer agent, registrar,
dividend paying agent and redemption agent with respect to the AMPS (in such
capacity, the "Paying Agent"), upon the terms and conditions of this Agreement,
and the Fund hereby appoints Deutsche Bank Trust Company Americas as said
Auction Agent and Paying Agent in accordance with those terms and conditions
(hereinafter generally referred to as the "Auction Agent," except in Sections 3
and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Fund and the Auction Agent agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 Terms Defined by Reference to the Second Amended and Restated Bylaws.
Capitalized terms used herein but not defined herein shall have the
respective meanings specified in the Second Amended and Restated Bylaws.
1.2 Certain Defined Terms.
As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Agent Member" shall mean a member of the Securities Depository
that will act on behalf of a Beneficial Owner of one or more AMPS or on behalf
of a Potential Beneficial Owner.
(b) "Auction" shall have the meaning specified in Section 2.1 hereof.
(c) "Auction Procedures" shall mean the procedures as from time to
time in effect for conducting Auctions that are set forth in Section 11.10 of
the Second Amended and Restated Bylaws.
(d) "Authorized Officer" shall mean each Managing Director, Vice
President, Assistant Vice President and Associate of the Auction Agent and every
other officer or employee of the Auction Agent designated as an "Authorized
Officer" for purposes hereof in a written communication from the Auction Agent
to the Fund.
(e) "Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent and a Broker-Dealer substantially in the form attached hereto as
Exhibit A.
(f) "Closing" shall mean the date the Fund consummates the
transactions for the issuance and sale of the AMPS.
(g) "Fund Officer" shall mean the Chairman, the President, each Vice
President (whether or not designated by a number or word or words added before
or after the title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant Treasurer of the Fund and every other
officer or employee of the Fund designated as a "Fund Officer" for purposes
hereof in a notice from the Fund to the Auction Agent.
(h) "Holder" shall be a holder of record of one or more AMPS, listed
as such in the Share Register.
(i) "Second Amended and Restated Bylaws" shall mean the Second Amended
and Restated Bylaws of the Fund in effect at the time the Registration Statement
relating to the AMPS is declared effective by the Securities and Exchange
Commission, specifying the powers, preferences and rights of the AMPS.
(j) "Settlement Procedures" shall mean the Settlement Procedures
attached as Exhibit A to the Broker-Dealer Agreement.
1.3 Rules of Construction.
Unless the context or use indicates another or different meaning or intent,
the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto" and other words of similar
import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to New
York City time.
II. THE AUCTION.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
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(a) The Board of Trustees of the Fund has adopted a resolution
appointing Deutsche Bank Trust Company Americas as Auction Agent for purposes of
the Auction Procedures. The Auction Agent hereby accepts such appointment and
agrees that, on each Auction Date, it shall follow the procedures set forth in
this Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate for the AMPS for the next Dividend Period. Each periodic
operation of such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and in
the Settlement Procedures are incorporated herein by reference in their entirety
and shall be deemed to be a part hereof to the same extent as if such provisions
were set forth fully herein.
2.2 Preparation for Each Auction; Maintenance of Registry of Existing
Holders.
(a) As of the date hereof, the Fund shall provide the Auction Agent
with a list of the Broker-Dealers previously approved by the Auction Agent and
shall cause to be delivered to the Auction Agent for execution by the Auction
Agent a Broker-Dealer Agreement signed by each such Broker-Dealer. The Auction
Agent shall keep such list current and accurate and shall indicate thereon, or
on a separate list, the identity of each Existing Holder, if any, whose most
recent Order was submitted by a Broker-Dealer on such list and resulted in such
Existing Holder continuing to hold or purchase AMPS. Not later than five
Business Days prior to any Auction Date for which any change in such list of
Broker-Dealers is to be effective, the Fund shall notify the Auction Agent in
writing of such change and, if any such change is the addition of a
Broker-Dealer to such list, the Fund shall cause to be delivered to the Auction
Agent for execution by the Auction Agent a Broker-Dealer Agreement signed by
such Broker-Dealer. The Auction Agent shall have entered into a Broker-Dealer
Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent shall have given the notice referred to in
clause (vii) of paragraph (a) of the Settlement Procedures, the Auction Agent,
by such means as the Auction Agent reasonably deems practicable, shall give
notice of such change to the Broker-Dealers not later than the earlier of 9:15
a.m. on the new Auction Date or 9:15 a.m. on the old Auction Date.
(c) The provisions contained in Section 11.2 of the Second Amended and
Restated Bylaws concerning Special Dividend Periods and the notification of a
Special Dividend Period will be followed by the Fund and, to the extent
applicable, the Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
(d) (i) On each Auction Date, the Auction Agent shall determine the
Maximum Applicable Rate. Not later than 9:30 a.m. on each Auction Date, the
Auction Agent shall notify the Fund and the Broker-Dealers of the Maximum
Applicable Rate.
(ii) If the Reference Rate is the applicable LIBOR Rate and such
rate is to be based on rates supplied by LIBOR Dealers and one or more of the
LIBOR Dealers shall not provide a quotation for the determination of the
applicable LIBOR rate, the Auction Agent immediately shall notify the Fund so
that the Fund can determine whether to select a substitute LIBOR Dealer or
substitute LIBOR Dealers to provide the quotation or quotations not being
supplied by any LIBOR Dealer or LIBOR Dealers. The Fund promptly shall advise
the Auction Agent of any such selection. If the Fund does not select any such
substitute LIBOR Dealer or substitute LIBOR Dealers, then the rates shall be
supplied by the remaining LIBOR Dealer or LIBOR Dealers.
(e) (i) The Auction Agent shall maintain a current registry of the
Existing Holders of the AMPS for purposes of each individual Auction. The Fund
shall use commercially reasonable efforts to provide or cause to be provided to
the Auction Agent within ten Business Days following the date of the Closing a
list of the initial Existing Holders of AMPS, and the Broker-Dealer of each such
Existing Holder through which such Existing Holder purchased such shares. The
Auction Agent may rely upon, as evidence of the identities of the Existing
Holders, such list, the results of each Auction and notices from any Existing
Holder, the Agent Member of any Existing Holder or the Broker-Dealer of any
Existing Holder with respect to such Existing Holder's transfer of any AMPS to
another Person.
(ii) In the event of any partial redemption of AMPS, upon notice
by the Fund to the Auction Agent of such partial redemption, the Auction Agent
promptly shall request the Securities Depository to notify the Auction Agent of
the identities of the Agent Members (and the respective numbers of shares) from
the accounts of which shares have been called for redemption and the person or
department at such Agent Member to contact regarding such redemption. At least
two Business Days prior to the Auction preceding the date of redemption, the
Auction Agent shall request each Agent Member so identified to disclose to the
Auction Agent (upon selection by such Agent Member of the Existing Holders whose
shares are to be redeemed) the number of
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AMPS of each such Existing Holder, if any, to be redeemed by the Fund, provided
that the Auction Agent has been furnished with the name and telephone number of
a person or department at such Agent Member from which it is to request such
information. In the absence of receiving any such information with respect to an
Existing Holder, from such Existing Holder's Agent Member or otherwise, the
Auction Agent may continue to treat such Existing Holder as having ownership of
the number of AMPS shown in the Auction Agent's registry of Existing Holders.
(iii) The Auction Agent shall register a transfer of the
ownership of AMPS from an Existing Holder to another Existing Holder, or to
another Person if permitted by the Fund, only if (A) such transfer is made
pursuant to an Auction or (B) if such transfer is made other than pursuant to an
Auction, the Auction Agent has been notified of such transfer in writing, in a
notice substantially in the form of Exhibit C to the Broker-Dealer Agreement, by
such Existing Holder or by the Agent Member of such Existing Holder. The Auction
Agent is not required to accept any notice of transfer delivered for an Auction
unless it is received by the Auction Agent by 12:00 noon of the Auction Date.
The Auction Agent shall rescind a transfer made on the registry of the Existing
Holders of any AMPS if the Auction Agent has been notified in writing, in a
notice substantially in the form of Exhibit D to the Broker-Dealer Agreement, by
the Agent Member or the Broker-Dealer of any Person that (i) purchased any AMPS
and the seller failed to deliver such shares or (ii) sold any AMPS and the
purchaser failed to make payment to such Person upon delivery to the purchaser
of such shares.
(f) The Auction Agent may request that the Broker-Dealers, as set
forth in Section 3.2(b) of the Broker-Dealer Agreements, provide the Auction
Agent with a list of their respective customers that such Broker-Dealers believe
are Beneficial Owners of AMPS. The Auction Agent shall keep confidential any
such information and shall not disclose any such information so provided to any
Person other than the relevant Broker-Dealer and the Fund, provided that the
Auction Agent reserves the right to disclose any such information if it is
advised by its counsel that its failure to do so would be unlawful.
2.3 Auction Schedule.
Subject to Article 11 of the Second Amended and Restated Bylaws, the
Auction Agent shall normally conduct Auctions weekly (usually Tuesday for Series
T, Wednesday for Series W and Thursday for Series TH) in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent with
the consent of the Fund, which consent shall not be withheld unreasonably. The
Auction Agent shall give notice of any such change to each Broker-Dealer. Such
notice shall be received prior to the first Auction Date on which any such
change shall be effective.
Time Event
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By 9:30 a.m. Auction Agent shall advise the Fund and the
Broker-Dealers of the Reference Rate and the
Maximum Applicable Rate as set forth in Section
2.2(d)(i) hereof.
9:30 a.m. - 1:00 p.m. Auction Agent shall assemble information
communicated to it by Broker-Dealers as provided
in Section 11.10(c) of the Second Amended and
Restated Bylaws. Submission deadline is 1:00 p.m.
Not earlier than 1:00 p.m. Auction Agent shall make determinations pursuant
to Section 11.10(d)(i) of the Second Amended and
Restated Bylaws.
By approximately 3:00 p.m. Auction Agent shall advise the Fund of the results
of the Auction as provided in Section 11.10(d)(ii)
of the Second Amended and Restated Bylaws.
Submitted Bid Orders and Submitted Sell Orders
will be accepted and rejected in whole or in part
and AMPS will be allocated as provided in Section
11.10(e) of the Second Amended and Restated
Bylaws.
Auction Agent shall give notice of the Auction
results as set forth in Section 2.4 hereof.
2.4 Notice of Auction Results.
The Auction Agent will advise each Broker-Dealer who submitted a Bid or
Sell Order in an Auction whether such Bid or Sell Order was accepted or rejected
in whole or in part and of the Applicable Rate for the next Dividend
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Period for the related AMPS by telephone or through its Auction Processing
System as set forth in paragraph (a) of the Settlement Procedures.
2.5 Broker-Dealers.
(a) Not later than 3:00 p.m. on each Dividend Payment Date, the
Auction Agent after each Auction will pay a service charge from funds provided
by the Fund to each Broker-Dealer on the basis of the purchase price of AMPS
placed by such Broker-Dealer at such Auction. The service charge shall be (i) in
the case of any Auction Date immediately preceding a 7-day Dividend Period, the
product of (A) a fraction the numerator of which is the number of days in such
Dividend Period (calculated by counting the first day of such Dividend Period
but excluding the last day thereof) and the denominator of which is 365, times
(B) 1/4 of 1%, times (C) $25,000 times (D) the sum of (I) the aggregate number
of AMPS placed by the Broker-Dealer in the applicable Auction that were either
(x) the subject of a Submitted Bid of a Beneficial Owner submitted by the
Broker-Dealer and continued to be held as a result of such submission or (y) the
subject of a Submitted Bid of a Potential Beneficial Owner submitted by the
Broker-Dealer and were purchased as a result of such submission plus (II) the
aggregate number of AMPS subject to valid Hold Orders (determined in accordance
with Section 11.10(b) of the Second Amended and Restated Bylaws) submitted to
the Auction Agent by the Broker-Dealer plus (III) the number of AMPS deemed to
be subject to Hold Orders by Beneficial Owners pursuant to Section 11.10(b) of
the Second Amended and Restated Bylaws that were acquired by the Broker-Dealer
for its own account or were acquired by such Beneficial Owners through the
Broker-Dealer; and (ii) in the case of any Special Dividend Period, the amount
determined by mutual consent of the Fund and any such Broker-Dealer or
Broker-Dealers, based upon a selling concession that would be applicable to an
underwriting of fixed or variable rate preferred shares with a similar final
maturity or variable rate dividend period, respectively, at the commencement of
such Special Dividend Period. For the avoidance of doubt, only one Broker-Dealer
shall be considered to have placed a particular share of AMPS at any particular
Auction for purposes of this Section 2.5(a).
(b) The Fund shall not designate any Person to act as a Broker-Dealer,
or permit an Existing Holder or a Potential Beneficial Owner to participate in
Auctions through any Person other than a Broker-Dealer, without the prior
written approval of the Auction Agent, which approval shall not be withheld
unreasonably. Notwithstanding the foregoing, the Fund may designate an Affiliate
or ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇, Incorporated to act as a
Broker-Dealer.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Fund.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from time to
time shall enter into such Broker-Dealer Agreements as the Fund shall request.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
2.6 Ownership of AMPS and Submission of Bids by the Fund and Its
Affiliates.
Neither the Fund nor any Affiliate may submit an Order in any Auction,
except that an Affiliate that is a Broker-Dealer may submit an Order. The Fund
shall notify the Auction Agent if the Fund or, to the best of the Fund's
knowledge, any Affiliate becomes a Beneficial Owner of any AMPS. Pursuant to the
Second Amended and Restated Bylaws of the Fund, the Fund and its Affiliates
shall be prohibited from reissuing and its Affiliates (other than an
Underwriter) will be prohibited from transferring (other than to the Fund or
pursuant to an Auction) any AMPS they may acquire. The restrictions in this
Section 2.6 shall in no way limit the activities of the Auction Agent. The
Auction Agent shall have no duty or liability with respect to enforcement of
this Section 2.6.
2.7 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Fund, and its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Fund's sole cost
and expense) of all books, records, documents and other information concerning
the conduct and results of Auctions, provided that any such agent, accountant or
counsel shall furnish the Auction Agent with a letter from the Fund requesting
that the Auction Agent afford such person access. The Auction Agent shall
maintain records relating to any Auction for a period of at least six years
after such Auction, and such records, in reasonable detail, shall accurately and
fairly reflect the actions taken by the Auction Agent hereunder. The Fund agrees
to keep confidential any information regarding the customers of any
Broker-Dealer received from the Auction Agent in connection with this Agreement
or any Auction, and shall not disclose such information or permit the disclosure
of such information without the prior written consent of the applicable
Broker-Dealer to anyone except such agent, accountant or counsel engaged to
audit or review the results of Auctions as permitted by this Section 2.7. The
Fund reserves the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to the Fund. Any such agent, accountant or counsel, before having
access to such information, shall agree to keep such
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information confidential and not to disclose such information or permit
disclosure of such information without the prior written consent of the
applicable Broker-Dealer, provided that such agent, accountant or counsel may
reserve the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to such agent, accountant or counsel.
2.8 Auction Procedures.
The provisions contained in Section 11.10 of the Second Amended and
Restated Bylaws concerning Auction Procedures will be followed by the Fund and,
to the extent applicable, the Auction Agent, and the provisions contained
therein are incorporated herein by reference in their entirety and shall be
deemed to be a part of this Agreement to the same extent as if such provisions
were set forth fully herein.
III. THE AUCTION AGENT AS PAYING AGENT.
3.1 The Paying Agent.
The Board of Trustees of the Fund has adopted resolutions appointing
Deutsche Bank Trust Company Americas as Auction Agent and dividend paying agent
(in such capacity, the "Paying Agent"). The Paying Agent hereby accepts such
appointment and agrees to act in accordance with its standard procedures and the
provisions of the Second Amended and Restated Bylaws which are specified herein
with respect to the AMPS and as set forth in this Section 3.
3.2 The Fund's Notices to the Paying Agent.
Whenever any AMPS are to be redeemed, the Fund shall mail a Notice of
Redemption by first-class mail, postage prepaid, to each Holder of AMPS being
redeemed and to the Paying Agent pursuant to the Second Amended and Restated
Bylaws.
3.3 The Fund to Provide Funds for Dividends and Redemptions.
(a) Not later than 12:00 noon on each Dividend Payment Date, the Fund
shall deposit with the Paying Agent an aggregate amount of Federal Funds or
similar same-day funds equal to the declared dividends to be paid to Holders on
such Dividend Payment Date and shall give the Paying Agent irrevocable
instructions to apply such funds to the payment of such dividends on such
Dividend Payment Date.
(b) If the Fund shall give a Notice of Redemption, then by 12:00 noon
on the date fixed for redemption, the Fund shall deposit in trust with the
Paying Agent an aggregate amount of Federal Funds or similar same-day funds
sufficient to redeem such AMPS called for redemption and shall give the Paying
Agent irrevocable instructions and authority to pay the redemption price to the
Holders of AMPS called for redemption upon surrender of the certificate or
certificates therefor.
3.4 Disbursing Dividends and Redemption Price.
After receipt of the Federal Funds or similar same-day funds and
instructions from the Fund described in Section 3.3 above, the Paying Agent
shall pay to the Holders (or former Holders) entitled thereto (i) on each
corresponding Dividend Payment Date, dividends on the AMPS, and (ii) on any date
fixed for redemption, the redemption price of any AMPS called for redemption.
The amount of dividends for any Dividend Period to be paid by the Paying Agent
to Holders will be determined by the Fund as set forth in Section 11.2 of the
Second Amended and Restated Bylaws. The redemption price to be paid by the
Paying Agent to the Holders of any AMPS called for redemption will be determined
as set forth in Section 11.4 of the Second Amended and Restated Bylaws.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1 Original Issue of Share Certificates.
On the Date of Original Issue for any series of AMPS, one certificate for
each series of AMPS shall be issued by the Fund and registered in the name of
Cede & Co., as nominee of the Securities Depository, and countersigned by the
Paying Agent.
4.2 Registration of Transfer or Exchange of Shares.
Except as provided in this Section 4.2, the shares of each series of AMPS
shall be registered solely in the name of the Securities Depository or its
nominee. If there is no Securities Depository, at the Fund's option and upon its
receipt of such documents as it deems appropriate, any AMPS may be registered in
the Stock Register in the name of the Beneficial Owner thereof, and such
Beneficial Owner thereupon will be entitled to receive certificates therefor and
required to deliver certificates thereof upon transfer or exchange thereof. If
the certificate or certificates for AMPS are not held by the Securities
Depository or its nominee, payment will be made in same-day funds to the Auction
Agent against delivery of such certificates.
4.3 Removal of Legend.
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing AMPS shall be
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accompanied by an opinion of counsel stating that such legend may be removed and
such shares may be transferred free of the restriction described in such legend,
said opinion to be delivered under cover of a letter from a Fund Officer
authorizing the Paying Agent to remove the legend on the basis of said opinion.
4.4 Lost, Stolen or Destroyed Share Certificates.
The Paying Agent shall issue and register replacement certificates for
certificates represented to have been lost, stolen or destroyed, upon the
fulfillment of such requirements as shall be deemed appropriate by the Fund and
by the Paying Agent, subject at all times to provisions of law, the Second
Amended and Restated Bylaws governing such matters and resolutions adopted by
the Fund with respect to lost, stolen or destroyed securities. The Paying Agent
may issue new certificates in exchange for and upon the cancellation of
mutilated certificates. Any request by the Fund to the Paying Agent to issue a
replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Fund to the Paying Agent that such
issuance will comply with provisions of applicable law and the Second Amended
and Restated Bylaws and resolutions of the Fund.
4.5 Disposition of Canceled Certificates; Record Retention.
The Paying Agent shall retain share certificates which have been canceled
in transfer or in exchange and accompanying documentation in accordance with
applicable rules and regulations of the Securities and Exchange Commission (the
"Commission") for at least six calendar years from the date of such
cancellation. The Paying Agent, upon written request by the Fund, shall afford
to the Fund, its agents and counsel access at reasonable times during normal
business hours to review and make extracts or copies (at the Fund's sole cost
and expense) of such certificates and accompanying documentation. Upon the
expiration of this six-year period, the Paying Agent, upon written request by
the Fund, shall deliver to the Fund the canceled certificates and accompanying
documentation. The Paying Agent also shall undertake to furnish to the
Commission, upon demand and after notice to and authorization by the Fund of
such demand, either at its principal office or at any regional office, complete,
correct and current hard copies of any and all such records. Thereafter, such
records shall not be destroyed by the Fund without the approval of the Paying
Agent, which approval shall not be withheld unreasonably, but will be safely
stored for possible future reference.
4.6 Share Register.
The Paying Agent shall maintain the share register, which shall contain a
list of the Holders, the number of shares held by each Holder and the address of
each Holder. The Paying Agent shall record in the share register any change of
address of a Holder upon notice by such Holder. In case of any written request
or demand for the inspection of the share register or any other books of the
Fund in the possession of the Paying Agent, the Paying Agent will notify the
Fund and secure instructions as to permitting or refusing such inspection. The
Paying Agent reserves the right, however, to exhibit the share register or other
records to any person in case it is advised by its counsel that its failure to
do so would be unlawful.
4.7 Return of Funds.
Any funds deposited with the Paying Agent by the Fund for any reason under
this Agreement, including for the payment of dividends or the redemption of
AMPS, that remain with the Paying Agent after 90 days shall be repaid to the
Fund upon written request by the Fund. Such funds, while deposited with the
Auction Agent, will be held in trust for the payment of the applicable dividend,
redemption price or, as may be applicable under the Second Amended and Restated
Bylaws, other charges.
V. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(i) the Fund has been duly organized and is validly existing as
an unincorporated voluntary association under and by virtue of the laws of The
Commonwealth of Massachusetts, and has full power to execute and deliver this
Agreement and to authorize, create and issue the AMPS;
(ii) the Fund is registered with the Commission under the 1940
Act as a closed-end, diversified, management investment company;
(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and constitutes the legal, valid and binding
obligation of the Fund, enforceable against the Fund in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equitable principles;
(iv) the form of the certificates evidencing the AMPS complies
with all applicable laws of The Commonwealth of Massachusetts;
(v) the AMPS have been duly and validly authorized by the Fund
and, upon completion of the initial sale of the AMPS and receipt of payment
therefor, will be validly issued by the Fund, fully paid and nonassessable;
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(vi) at the time of the offering of the AMPS, the shares offered
will be registered under the Securities Act and no further action by or before
any governmental body or authority of the United States or of any state thereof
is required in connection with the execution and delivery of this Agreement or
will be required in connection with the issuance of the AMPS, except such action
as required by applicable state securities laws;
(vii) the execution and delivery of this Agreement and the
issuance and delivery of the AMPS do not and will not conflict with, violate or
result in a breach of the terms, conditions or provisions of, or constitute a
default under, the Agreement and Declaration of Trust, any order or decree of
any court or public authority having jurisdiction over the Fund or any mortgage,
indenture, contract, agreement or undertaking to which the Fund is a party or by
which it is bound the effect of which conflict, violation, default or breach
would be material to the Fund; and
(viii) no taxes are payable upon or in respect of the execution
of this Agreement or will be payable upon or in respect of the issuance of the
AMPS.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Fund that:
(i) The Auction Agent is duly organized and is validly existing
as a banking corporation in good standing under the laws of the State of New
York and has the corporate power to enter into and perform its obligations under
this Agreement; and
(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the legal, valid and
binding obligation of the Auction Agent, enforceable against the Auction Agent
in accordance with its terms, subject only to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equitable principles.
VI. THE AUCTION AGENT.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Fund hereunder
and owes no fiduciary duties to any Person except as provided by this Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are set forth specifically in this Agreement, and no implied covenants
or obligations shall be read into this Agreement against the Auction Agent.
(c) In the absence of bad faith or negligence on its part, the Auction
Agent shall not be liable for any action taken, suffered or omitted by it, or
for any error of judgment made by it in the performance of its duties under this
Agreement.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may rely upon, and shall be protected in acting
or refraining from acting in accordance with, any communication authorized by
this Agreement and any proper written instruction, notice, request, direction,
consent, report, certificate, share certificate or other instrument, paper or
document reasonably believed by it to be genuine and appropriately authorized.
The Auction Agent shall not be liable for acting upon any telephone
communication authorized by this Agreement which the Auction Agent reasonably
believes in good faith to have been given by the Fund or by a Broker-Dealer. The
Auction Agent may record telephone communications with the Fund or with the
Broker-Dealers or with both, but agrees not to destroy any such recordings
except in accordance with its usual and customary practices and further to
provide the Fund with a copy of any such recording upon request.
(b) The Auction Agent may consult with outside independent counsel of
its choice, and the written advice of such outside independent counsel, if
addressed to both the Auction Agent and the Fund, shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reasonable reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk
its own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys.
6.3 Compensation, Expenses and Indemnification.
(a) The Fund shall pay to the Auction Agent from time to time
reasonable compensation for all services rendered by it under this Agreement and
under the Broker-Dealer Agreements as shall be set forth in a separate writing
signed by the Fund and the Auction Agent, subject to adjustments if the AMPS no
longer are held of record by the Securities Depository or its nominee or if
there shall be such other change as shall increase or decrease materially the
Auction Agent's obligations hereunder or under the Broker-Dealer Agreements.
(b) The Fund shall reimburse the Auction Agent upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Auction Agent in accordance with any provision of this Agreement and of the
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Broker-Dealer Agreements (including the reasonable compensation, expenses and
disbursements of its agents and counsel), except any expense, disbursement or
advance attributable to the Auction Agent's negligence or bad faith, upon
submission to the fund of reasonable documentation thereof.
(c) The Fund shall indemnify the Auction Agent for, and hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Auction Agent arising out of or in connection with
its agency under this Agreement and under the Broker-Dealer Agreements,
including the costs and expenses of defending itself against any claim of
liability in connection with its exercise or performance of any of its duties
hereunder and thereunder, except such as may result from its negligence or bad
faith.
VII. MISCELLANEOUS.
7.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Fund may terminate this
Agreement at any time by so notifying the Auction Agent, provided that, if any
AMPS remain outstanding, the Fund shall have entered into an agreement with a
successor auction agent. The Auction Agent may terminate this Agreement upon
prior notice to the Fund on the date specified in such notice, which date shall
be no earlier than 60 days after delivery of such notice.
(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Fund and the Auction Agent under this
Agreement shall cease upon termination of this Agreement. The Fund's
representations, warranties, covenants and obligations to the Auction Agent
under Sections 5.1 and 6.3 hereof shall survive the termination hereof. The
Auction Agent's representations, warranties, covenants and obligations under
Section 6.1 shall survive the termination hereof. Upon termination of this
Agreement, the Auction Agent shall (i) resign as Auction Agent under the
Broker-Dealer Agreements, (ii) at the Fund's request, deliver promptly to the
Fund or to another authorized party copies of all books and records maintained
by it in connection with its duties hereunder, and (iii) at the request of the
Fund, transfer promptly to the Fund or to any successor auction agent any funds
deposited by the Fund with the Auction Agent (whether in its capacity as Auction
Agent or as Paying Agent) pursuant to this Agreement which have not been
distributed previously by the Auction Agent in accordance with this Agreement.
7.2 Communications.
Except for (i) communications authorized to be made by telephone pursuant
to this Agreement or the Auction Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in writing),
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to such
party at its address or telecopier number set forth below:
If to the Fund, PIMCO Floating Rate Income Fund
addressed to: c/o PIMCO Advisors Fund Management LLC
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Auction Agent, Deutsche Bank Trust Company Americas
addressed to: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Auction Rate Securities
Telecopier No.: 212-797-8600
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
or such other address or telecopier number as such party hereafter may specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Fund by a Fund Officer and on
behalf of the Auction Agent by an Authorized Officer.
7.3 Entire Agreement.
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof, except for agreements
relating to the compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other than
the Fund, the Auction Agent and their
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respective successors and assigns, any benefit of any legal or equitable right,
remedy or claim hereunder.
7.5 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged.
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
7.6 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by, the respective successors and permitted assigns of each of the
Fund and the Auction Agent. This Agreement may not be assigned by either party
hereto absent the prior written consent of the other party, which consent shall
not be withheld unreasonably.
7.7 Severability.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8 Execution in Counterparts.
This Agreement may be executed in several counterparts, each of which shall
be an original and all of which shall constitute but one and the same
instrument.
7.9 Governing Law.
This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York applicable to agreements made and to be performed
in said state.
7.10 Limitation of Liability.
The Fund's 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.
[Signature pages follow]
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Exhibit k.3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
PIMCO FLOATING RATE INCOME FUND
By:
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Treasurer and Principal Financial and
Accounting Officer
DEUTSCHE BANK TRUST COMPANY AMERICAS
By:
----------------------------------------
Name:
Title:
Exhibit k.3
EXHIBIT A
FORM OF BROKER-DEALER AGREEMENT
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