Exhibit (k)(7)
FORM OF ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of May [__],
2007, between Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx") and Pioneer Investment Management, Inc.
("Pioneer").
WHEREAS, Pioneer Diversified High Income Trust (including any successor by
merger or otherwise, the "Fund") is a 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;
WHEREAS, the Fund, Pioneer and Montpelier Capital Advisors, Ltd. have
entered into an underwriting agreement (the "Underwriting Agreement"), dated May
[__], 2007 with Xxxxxxx Xxxxx and the other underwriters named therein (the
"Underwriters");
WHEREAS, Pioneer is the investment adviser of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as an underwriter in an offering of the
Fund's common shares; and
WHEREAS, Pioneer desires to provide additional compensation to Xxxxxxx
Xxxxx for providing the advice and services described below;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
1. In consideration of Xxxxxxx Xxxxx'x providing advice relating to the
structure and design and the organization of the Fund as well as services
related to the sale and distribution of the Fund's common shares, Pioneer
shall pay Xxxxxxx Xxxxx a fee equal to 1.25% of the total price to the
public of the Fund's common shares sold by the Fund pursuant to the
prospectus dated May [__], 2007 (the "Prospectus") (including all Initial
Securities and Option Securities as such terms are described in the
Underwriting Agreement) (the "Fee"). The Fee shall be paid within 30 days
of the Closing Date (as defined in the Underwriting Agreement) and any Date
of Delivery (as defined in the Underwriting Agreement), if applicable, in
an amount equal to 1.25% of the total price to the public of the common
shares issued by the Fund on such Closing Date or Date of Delivery, as the
case may be, or as otherwise agreed to by the parties. The Fee hereunder
shall not exceed 1.25% of the total price to the public of the Fund's
common shares sold by the Fund pursuant to the Prospectus. The sum total of
this Fee, the shareholder servicing payments to UBS Securities LLC, plus
the underwriter's counsel fees, shall not exceed 4.5% of the aggregate
initial offering price of the Fund's common shares offered by the
Prospectus. The sum total of all compensation to or reimbursement of
underwriters in connection with the offering, including sales load and all
forms of additional compensation, shall not exceed 9% of the total price of
the Fund's common shares sold in the offering.
2. Nothing herein shall be construed as prohibiting Xxxxxxx Xxxxx or its
affiliates from acting as an underwriter to any other client (including
other registered investment companies).
3. Pioneer acknowledges that Xxxxxxx Xxxxx did not provide and is not
providing any advice hereunder 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 acting as lead underwriter in an offering of
the Fund's common shares.
4. This Agreement shall terminate upon the payment of the entire amount of the
Fee, as specified in Paragraph 1 hereof.
5. Pioneer will xxxxxxx Xxxxxxx Xxxxx with such information as Xxxxxxx Xxxxx
believes appropriate to its assignment hereunder (all such information so
furnished being the "Information"). Pioneer recognizes and confirms that
Xxxxxxx Xxxxx (a) has used and relied 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 Pioneer's knowledge, the Information furnished by Pioneer
when delivered, was true and correct in all material respects and did not
contain any material misstatement of fact or omit to state any material
fact necessary to make the statements contained therein, in light of the
circumstances in which they were made, not misleading. Pioneer 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.
6. Pioneer agrees that Xxxxxxx Xxxxx shall have no liability to Pioneer 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. Pioneer agrees to the
terms 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.
7. 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.
8. 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 Pioneer and Xxxxxxx Xxxxx consent to the
jurisdiction of such courts and personal service with respect thereto. Each
of Xxxxxxx Xxxxx and Pioneer 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. Pioneer agrees that a final
judgment in any proceeding or counterclaim brought in any such court shall
be conclusive and binding upon Pioneer and may be enforced in any other
courts to the jurisdiction of which Pioneer is or may be subject, by suit
upon such judgment.
9. This Agreement may not be assigned by either party without the prior
written consent of the other party.
10. 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
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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 Pioneer.
11. All notices required or permitted to be sent under this Agreement shall be
sent, if to Pioneer:
Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: [______________]
or if to Xxxxxxx Xxxxx:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Debt and Equity New Issues
4 World Financial Center, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxx
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 U.S. mail with certified postage prepaid or when
actually received, whether by hand, express delivery service or facsimile
transmission, whichever is earlier.
12. 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.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
PIONEER INVESTMENT MANAGEMENT, INC. XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: By:
--------------------------------- ------------------------------------
Name: Name:
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Title: Title:
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Xxxxxxx Xxxxx & Co. Indemnification Agreement
May [__], 2007
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 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 Additional Compensation Agreement
dated May [__], 2007 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, 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, 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, the Company will reimburse Xxxxxxx
Xxxxx for its legal and other expenses (including the cost of any investigation
and preparation) as such expenses are 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 or contemplated to be 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 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
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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.
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.
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,
PIONEER INVESTMENT MANAGEMENT, INC.
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By:
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Name:
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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:
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Title:
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