SUPPLEMENT TO
                          INVESTMENT ADVISORY CONTRACT

                PIMCO Funds: Pacific Investment Management Series
                            840 Newport Center Drive
                         Newport Beach, California 92660

                           _____________________, 2001

Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, California 92660

RE:      PIMCO Liquid Assets Fund

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 Liquid Assets
Fund (the "Fund") is a separate investment portfolio 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 the Fund,
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 the Fund 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 for  determining  net asset value per share) of the net
assets of the Fund during the preceding month, at an annual rate of 0.10%.

          5. This  Supplement  and the  Contract  shall  become  effective  with
respect to the Fund on  _____________,  2001and  shall  continue  in effect with
respect  to the Fund 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 the Fund 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 the Fund 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 the Fund 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).



          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