PIONEER HIGH INCOME TRUST
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AUCTION AGENCY AGREEMENT
dated as of July 12, 2002
Relating to
Auction Market Preferred Shares
Series M and Series W
of
PIONEER HIGH INCOME TRUST
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DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of July 12,
2002, is by and between Pioneer High Income Trust, a Delaware business trust
(the "Trust") and Deutsche Bank Trust Company Americas, a New York banking
corporation.
The Trust proposes to issue an aggregate of [ ] preferred shares, no
par value per share, liquidation preference $25,000 per share, designated as
Auction Market Preferred Shares, Series M and Series W (collectively, the
"AMPS"), pursuant to the Statement (as defined below).
The Trust desires that Deutsche Bank Trust Company Americas perform
certain duties as agent in connection with each Auction (as defined below) (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 Trust hereby appoints Deutsche Bank Trust Company Americas as said
Auction Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Trust and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined By Reference to Statement.
Capitalized terms not defined herein shall have the respective meanings
specified in the Statement.
1.2 Terms Defined Herein.
As used herein and in the Settlement Procedures, the following terms
shall have the following meanings, unless the context otherwise requires:
(a) "Agent Member" of any Person shall mean the member of, or participant in,
the Securities Depository that will act on behalf of a Bidder.
(b) "Agreement" shall mean the Agreement relating to one or more series of AMPS.
(c) "AMPS" shall mean the preferred shares, $0.001 par value per share, of the
Trust designated as its "Auction Market Preferred Shares" and bearing such
further designation as to series as the Board of Trustees of the Trust or any
committee thereof shall specify.
(d) "Auction" shall have the meaning specified in Section 2.1 hereof.
(e) "Auction Procedures" shall mean the auction procedures constituting Part II
of the form of Statement.
(f) "Authorized Officer" of the Auction Agent shall mean each Vice President,
Assistant Vice President, and Associate of the Auction Agent assigned to its
Corporate Trust and Agency Group and every other officer or employee of the
Auction Agent designated as an "Authorized Officer" for purposes hereof in a
communication to the Trust.
(g) "Broker-Dealer Agreement" shall mean each agreement between the Auction
Agent and a Broker-Dealer substantially in the form attached hereto as Exhibit
A.
(h) "Settlement Procedures" shall mean the Settlement Procedures attached hereto
as Exhibit B.
(i) "Statement" shall mean the Statement of Preferences of Auction Market
Preferred Shares, as the same may be amended, supplemented or modified from time
to time.
(j) "Trust 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 Vice
President, each Assistant Secretary and each Assistant Treasurer of the Trust
and every other officer or employee of the Trust designated as a "Trust Officer"
for purposes hereof in a notice to the Auction Agent.
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 the 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 the Agreement nor shall they affect its meaning,
construction or effect.
(c) the words "hereof", "herein", "hereto" and other words of similar import
refer to the Agreement as a whole.
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(d) all references herein to a particular time of day shall be to New York City
time.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Board of Trustees of the Trust 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 any Subsequent Rate Period of any series of AMPS for which
the Applicable Rate is to be determined by auction. Each periodic operation of
such procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and 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 fully
set forth herein.
2.2 Preparation for Each Auction; Maintenance of Registry of Beneficial
Owners.
(a) Not later than seven days prior to the first Auction Date for the first
series of AMPS subject to an Auction, the Trust shall provide the Auction Agent
with a list of the Broker-Dealers. Not later than seven days prior to any
Auction Date for any series of AMPS for which any change in such list of
Broker-Dealers is to be effective, the Trust will notify the Auction Agent in
writing of such change and, if any such change involves the addition of a
Broker-Dealer to such list, shall cause to be delivered to the Auction Agent for
execution by the Auction Agent a Broker-Dealer Agreement signed by such
Broker-Dealer; provided, however, that if the Trust proposes to designate any
Special Rate Period of any series of AMPS pursuant to Section 3 of Part I of the
Statement, not later than 11:00 A.M. on the Business Day next preceding the
Auction next preceding the first day of such Rate Period or by such later time
or date, or both, as may be agreed to by the Auction Agent, the Trust shall
provide the Auction Agent with a list of the Broker-Dealers for such series and
a manually signed copy of each Broker-Dealer Agreement or a new Schedule A to a
Broker-Dealer Agreement (which Schedule A shall replace and supersede any
previous Schedule A to such Broker-Dealer Agreement) with each Broker-Dealer for
such series. 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 any Auction Date for any series of AMPS shall be changed
after the Auction Agent shall have given the notice referred to in paragraph (a)
of the Settlement Procedures, or after the notice referred to in Section 2.3
hereof, if applicable, the Auction Agent, by such means as the Auction Agent
deems practicable, shall give notice of such change to the Broker-Dealers for
such series 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) (i) The Auction Agent shall maintain a registry of the beneficial owners of
the AMPS of each series who shall constitute Existing Holders of AMPS of such
series for purposes of Auctions. The Auction Agent shall indicate thereon the
identity of the respective Broker-Dealer of each Existing Holder on whose behalf
such Broker-Dealer submitted the most recent Order in any Auction which resulted
in such Existing Holder continuing to hold or purchasing AMPS of such series.
The Auction Agent shall keep such registry current and accurate based on the
information provided to it from time to time by the Broker-Dealer. The Trust
shall provide or cause to be provided to the Auction Agent at or prior to the
Date of Original Issue of the AMPS of each series a list of the initial Existing
Holders of the shares of each such series of AMPS, the number of shares
purchased by each such Existing Holder
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and the respective Broker-Dealer of each such Existing Holder or the
affiliate thereof through which each such Existing Holder purchased such shares.
The Auction Agent may rely upon, as conclusive evidence of the identities of the
Existing Holders of AMPS of any series (A) such list, (B) the results of
Auctions, (C) notices from any Broker-Dealer as described in the first sentence
of Section 2.2(c)(iii) hereof and (D) the results of any procedures approved by
the Trust that have been devised for the purpose of determining the identities
of Existing Holders in situations where AMPS may have been transferred without
compliance with any restriction on the transfer thereof set forth in the Auction
Procedures.
(ii) In the event of any partial redemption of any series of AMPS, the Auction
Agent shall, at least two Business Days prior to the next Auction for such
series, request each Broker-Dealer to provide the Auction Agent with a list of
Persons who such Broker-Dealer believes are Existing Holders after giving effect
to such redemption based upon inquiries of the Persons reflected in such
Broker-Dealer's records as Beneficial Owners as a result of the most recent
Auction and with respect to each such Person, the number of AMPS of such series
such Broker-Dealer believes are owned by such Person after giving effect to such
redemption. In the absence of receiving any such information from any
Broker-Dealer, the Auction Agent may continue to treat the Persons listed in its
registry of Existing Holders as the beneficial owner of the number of AMPS of
such series shown in such registry.
(iii) The Auction Agent shall be required to register a transfer of AMPS of any
series from an Existing Holder of such AMPS only if such transfer is to another
Existing Holder, or other Person if permitted by the Trust, and only if such
transfer is made (A) pursuant to an Auction, or (B) the Auction Agent has been
notified in writing (I) in a notice substantially in the form of Exhibit B to
the Broker-Dealer Agreements by a Broker-Dealer of such transfer or (II) in a
notice substantially in the form of Exhibit C to the Broker-Dealer Agreements by
the Broker-Dealer of any Existing Holder, or other Person if permitted by the
Trust, that purchased or sold such AMPS in an Auction of the failure of such
AMPS to be transferred as a result of such Auction. The Auction Agent is not
required to accept any notice described in clause (B) of the preceding sentence
for an Auction unless the Auction Agent receives it by 3:30 P.M. on the Business
Day preceding such Auction.
(d) The Auction Agent may, but shall have no obligation to, request the
Broker-Dealers, as set forth in the Broker-Dealer Agreements, to provide the
Auction Agent with a list of Persons who such Broker-Dealer believes are
Existing Holders based upon inquiries of those Persons such Broker-Dealer's
records indicate are Beneficial Owners as a result of the most recent Auction
and with respect to each such Person, the number of shares of such series of
AMPS such Broker-Dealer believes to be owned by such Person. The Auction Agent
shall keep confidential such registry of Existing Holders and shall not disclose
the identities of the Existing Holders of such AMPS to any Person other than the
Trust and the Broker-Dealer that provided such information; provided, however,
that the Auction Agent reserves the right and is authorized to disclose any such
information if (a) it is ordered to do so by a court of competent jurisdiction
or a regulatory body, judicial or quasi-judicial agency or authority having the
authority to compel such disclosure, (b) it is advised by its counsel that its
failure to do so would be unlawful or (c) failure to do so would expose the
Auction Agent to loss, liability, claim, damage or expense for which it has not
received indemnity or security satisfactory to it.
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2.3 Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent with
the consent of the Trust, which consent shall not be unreasonably withheld. The
Auction Agent shall give written notice of any such change to each
Broker-Dealer. Such notice shall be given prior to the close of business on the
Business Day next preceding the first Auction Date on which any such change
shall be effective.
TIME EVENT
By 9:30 A.M. Auction Agent advises the
Trust and Broker-Dealers of the
applicable Maximum Rate and the
Reference Rate(s) and Treasury Index
Rate(s), as the case may be, used in
determining such Maximum Rate as set
forth in Section 2.7 hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Section 1(a) of the Auction
Procedures. Submission Deadline is 1:30
P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations
pursuant to Section 3(a) of the Auction
Procedures.
By approximately 3:30 P.M. Auction Agent advises Trust of results
of Auction as provided in Section 3(b)
of the Auction Procedures.
Submitted Bids and Submitted Sell Orders
are accepted and rejected and AMPS
allocated as provided in Section 4 of
the Auction Procedures. Auction Agent
gives notice of Auction results as set
forth Section 2.4 hereof.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
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 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 12:00 Noon on each Auction Date for any series of AMPS, the
Trust shall pay to the Auction Agent an amount in cash equal to the aggregate
fees payable to the Broker-Dealers for such series pursuant to Section 2.6 of
the Broker-Dealer Agreements for such series. The Auction Agent shall apply such
moneys as set forth in Section 2.6 of each such Broker-Dealer Agreement.
(b) The Trust shall obtain the consent of the Auction Agent prior to selecting
any Person to act as a Broker-Dealer, which consent shall not be unreasonably
withheld.
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(c) The Auction Agent shall terminate any Broker-Dealer Agreement as set forth
therein if so directed by the Trust, provided that at least one Broker-Dealer
Agreement would be in effect for each series of AMPS after such termination.
(d) Subject to the Auction Agent's having consented to the selection of the
relevant Broker-Dealer pursuant to Section 2.5(b) hereof, the Auction Agent
shall from time to time enter into such Broker-Dealer Agreements with one or
more Broker-Dealers as the Trust shall request, and shall enter into such
schedules to any such Broker-Dealer Agreements as the Trust shall request, which
schedules, among other things, shall set forth the series of AMPS to which such
Broker-Dealer Agreement relates.
2.6 Special Rate Periods.
The provisions contained in Section 3 of Part I of the Statement
concerning Special Rate Periods and the notification of a Special Rate Period
will be followed by the Trust 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.
2.7 Determination of Maximum Rate.
(a) (i) On each Auction Date, the Auction Agent shall determine the Maximum
Rate. If any "AA" Financial Composite Commercial Paper Rate, Treasury Index Rate
or Reference Rate, as the case may be, is not quoted on an interest or bond
equivalent, as the case may be, basis, the Auction Agent shall convert the
quoted rate to the interest or bond equivalent thereof as set forth in the
definition of such rate in the Statement if the rate obtained by the Auction
Agent is quoted on a discount basis, or if such rate is quoted on a basis other
than an interest or bond equivalent or discount basis the Auction Agent shall
convert the quoted rate to an interest or bond equivalent rate after
consultation with the Fund as to the method of such conversion.
(ii) If any "AA" Financial Composite Commercial Paper Rate is to be based on
rates supplied by Commercial Paper Dealers and one or more of the Commercial
Paper Dealers shall not provide a quotation for the determination of such "AA"
Financial Composite Commercial Paper Rate, the Auction Agent shall immediately
notify the Trust so that the Trust can determine whether to select a substitute
Commercial Paper Dealer or substitute Commercial Paper Dealers to provide the
quotation or quotations not being supplied by any Commercial Paper Dealer or
Commercial Paper Dealers. The Trust shall promptly advise the Auction Agent of
any such selection.
(iii) If any Treasury Index Rate is to be based on rates supplied by U.S.
Government Securities Dealers and one or more of the U.S. Government Securities
Dealers shall not provide a quotation for the determination of such Treasury
Index Rate, the Auction Agent shall immediately notify the Trust so that the
Trust can determine whether to select a substitute U.S. Government Securities
Dealer or substitute U.S. Government Securities Dealers to provide the quotation
or quotations not being supplied by any U.S. Government Securities Dealer or
U.S. Government Securities Dealers. The Trust shall promptly advise the Auction
Agent of any such selection.
2.8 Ownership of Shares of AMPS.
The Trust shall notify the Auction Agent if the Trust or any affiliate
of the Trust acquires any AMPS of any series. Neither the Trust nor any
affiliate of the Trust shall submit any Order in any Auction for AMPS, except as
set forth in the next sentence. Any Broker-Dealer that is an affiliate of the
Trust
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may submit Orders in Auctions, but only if such Orders are not for its own
account. For purposes of this Section 2.8, a Broker-Dealer shall not be deemed
to be an affiliate of the Trust solely because one or more of the directors or
executive officers of such Broker-Dealer or of any Person controlled by, in
control of or under common control with such Broker-Dealer is also a director of
the Trust. The Auction Agent shall have no duty or liability with respect to
enforcement of this Section 2.8.
2.9 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Trust, its agents, independent
public accountants and counsel and the Broker-Dealers, access at reasonable
times during normal business hours to review and make extracts or copies of all
books, records, documents and other information concerning the conduct and
results of Auctions (at no cost to the Auction Agent), provided that any such
agent, accountant, counsel or Broker-Dealer shall furnish the Auction Agent with
a letter from the Trust requesting that the Auction Agent afford such person
access. The Auction Agent shall maintain records relating to any Auction for a
period of six years after such Auction, and such records shall, in reasonable
detail, accurately and fairly reflect the actions taken by the Auction Agent
hereunder.
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent.
The Auction Agent, as dividend and redemption price disbursing agent,
shall pay to the Holders of AMPS of any series (i) on each Dividend Payment Date
for such series, dividends on the AMPS of such series, (ii) on any date fixed
for redemption of AMPS of any series, the Redemption Price of any shares of such
series called for redemption and (iii) any Late Charge related to any payment of
dividends or Redemption Price, in each case after receipt of the necessary funds
from the Trust with which to pay such dividends, Redemption Price or Late
Charge. The amount of dividends for any Rate Period for any series of AMPS to be
paid by the Auction Agent to the Holders of such shares of such series will be
determined by the Trust as set forth in Section 2 of Part I of the Statement
with respect to such series. The Redemption Price of any shares to be paid by
the Auction Agent to the Holders will be determined by the Trust as set forth in
Section 9 of Part I of the Statement with respect to such series. The Trust
shall notify the Auction Agent in writing of a decision to redeem shares of any
series of AMPS at least five days prior to the date a notice of redemption is
required to be mailed to the Holders of the shares to be redeemed by paragraph
(c) of Section 9 of Part I of the Statement. Such notice by the Trust to the
Auction Agent shall contain the information required by paragraph (c) of Section
9 of Part I of the Statement to be stated in the notice of redemption required
to be mailed by the Trust to such Holders.
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Stock or Shares Certificates.
Upon the Date of Original Issue of each series of AMPS, one or more
certificates representing all of the shares of such series issued on such date
shall be issued by the Trust and, at the request of the Trust, registered in the
name of Cede & Co. and countersigned by the Auction Agent.
4.2 Registration of Transfer of Shares.
Shares of each series of AMPS shall be registered solely in the name of
the Securities Depository or its nominee.
4.3 Removal of Legend on Restricted Shares.
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All requests for removal of legends on AMPS of any series indicating
restrictions on transfer shall be accompanied by an opinion of counsel stating
that such legends may be removed and such shares freely transferred, such
opinion to be delivered under cover of a letter from a Trust Officer authorizing
the Auction Agent to remove the legend on the basis of said opinion.
4.4 Lost Stock or Share Certificates.
The Auction 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 Trust and
the Auction Agent, subject at all times to provisions of law, the Declaration
and By-Laws of the Trust governing such matters and resolutions adopted by the
Trust with respect to lost securities. The Auction Agent may issue new
certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Trust to the Auction 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 Trust to the Auction Agent that such
issuance will comply with such provisions of law and the By-Laws and resolutions
of the Trust.
4.5 Disposition of Cancelled Certificates; Record Retention.
The Auction Agent shall retain all stock or share certificates which
have been cancelled in transfer or exchange and all accompanying documentation
in accordance with applicable rules and regulations of the Securities and
Exchange Commission for two calendar years. The Trust shall also undertake to
furnish to the Securities and Exchange Commission and to the Board of Governors
of the Federal Reserve System, upon demand, at either the principal office or at
any regional office, complete, correct and current hard copies of any and all
such records.
4.6 Stock or Record Books.
For so long as the Auction Agent is acting as the transfer agent for
any series of AMPS pursuant to the Agreement, it shall maintain a stock or
record book containing a list of the Holders of the AMPS of each such series. In
case of any request or demand for the inspection of the stock or record books of
the Trust or any other books in the possession of the Auction Agent, the Auction
Agent will notify the Trust and secure instructions as to permitting or refusing
such inspection. The Auction Agent reserves the right, however, to exhibit the
stock or record books or other books to any Person if (a) it is ordered to do so
by a court of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the authority to compel such
disclosure, (b) it is advised by its counsel that its failure to do so would be
unlawful or (c) failure to do so would expose the Auction Agent to loss,
liability, claim, damage or expense for which it has not received indemnity or
security satisfactory to it.
4.7 Return of Funds.
Any funds deposited with the Auction Agent hereunder by the Trust for
any reason, including but not limited to redemption of AMPS of any series, that
remain unpaid after sixty days shall be repaid to the Trust upon the written
request of the Trust.
5. Representations and Warranties.
5.1 Representations and Warranties of the Trust.
The Trust represents and warrants to the Auction Agent that:
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(a) the Trust is duly organized and existing business trust in good standing
under the laws of the State of its organization and has full trust power or all
requisite power to execute and deliver the Agreement and to authorize, create
and issue the AMPS of each series, and the AMPS of each series when issued, will
be duly authorized, validly issued, fully paid and nonassessable;
(b) the Agreement has been duly and validly authorized, executed and
delivered by the Trust and constitutes the legal, valid and binding obligation
of the Trust;
(c) the form of the certificate evidencing the AMPS of each series complies
or will comply with all applicable laws of the State of its organization;
(d) when issued, the AMPS of each series will have been duly registered under
the Securities Act of 1933, as amended, 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 the Agreement or will
have been required in connection with the issuance of AMPS of each series;
(e) the execution and delivery of the Agreement and the issuance and delivery of
the AMPS of each series 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 Declaration or the By-Laws of the Trust, any law or regulation, any
order or decree of any court or public authority having jurisdiction, or any
mortgage, indenture, contract, agreement or undertaking to which the Trust is a
party or by which it is bound the effect of which conflict, violation, default
or breach would be material to the Trust or the Trust and its subsidiaries taken
as a whole; and
(f) no taxes are payable upon or in respect of the execution of the
Agreement or the issuance of the AMPS of any series.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Trust that:
(i) the Auction Agent is duly organized and is validly existing as
a banking corporation in good standing under the laws 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 to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting
creditors' rights and to general equitable principles.
6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the Trust hereunder and owes
no fiduciary duties to any Person, other than the Trust, by reason of the
Agreement.
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(b) The Auction Agent undertakes to perform such duties and only such duties as
are specifically set forth in the Agreement, and no implied covenants or
obligations shall be read into the 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 or for any error
of judgment made by it in the performance of its duties under the Agreement. The
Auction Agent shall not be liable for any error of judgment made in good faith
unless the Auction Agent shall have been negligent in ascertaining the pertinent
facts.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely and shall be protected in acting or
refraining from acting upon any communication authorized hereby and upon any
written instruction, notice, request, direction, consent, report, certificate,
share certificate or other instrument, paper or document believed in good faith
by it to be genuine. The Auction Agent shall not be liable for acting upon any
telephone communication authorized hereby which the Auction Agent believes in
good faith to have been given by the Trust or by a Broker-Dealer. The Auction
Agent may record telephone communications with the Trust or with the
Broker-Dealers or both.
(b) The Auction Agent may consult with counsel of its choice and the advice of
such counsel 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
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 and shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
(e) The Auction Agent shall not be responsible or liable for any failure or
delay in the performance of its obligations under this agreement arising out of
or caused, directly or indirectly, by circumstances beyond its reasonable
control, it being understood that the Auction Agent shall use reasonable efforts
which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.
6.3 Compensation, Expenses and Indemnification.
(a) The Trust shall pay the Auction Agent an annual fee as compensation for all
services rendered by it under the Agreement and the Broker-Dealer Agreements as
the Trust and the Auction Agent have agreed to from time to time.
(b) The Trust shall reimburse the Auction Agent upon its request for all
reasonable out-of-pocket expenses, disbursements and advances incurred or made
by the Auction Agent in accordance with any provision of the Agreement and the
Broker-Dealer Agreements (including the compensation and the reasonable expenses
and disbursements of its agents (unless such agent is providing a service for
which the Auction Agent is already being compensated by the Trust) and counsel),
except any expense or disbursement attributable to its negligence or bad faith.
In no event shall the Auction Agent be responsible or liable for special,
indirect or consequential loss or damage of any kind whatsoever (including, but
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not limited to, loss of profit), even if the Auction Agent has been advised of
the likelihood of such loss or damage and regardless of the form of action.
(c) The Trust shall indemnify the Auction Agent for and hold it harmless against
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with its agency under the Agreement and
the Broker-Dealer Agreements, including the costs and expenses of defending
itself against any such claim or liability in connection with its exercise or
performance of any of its duties hereunder and thereunder.
6.4 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or
adequacy of the Agreement, the Broker-Dealer Agreements or the AMPS of any
series except that the Auction Agent hereby represents that the Agreement has
been duly authorized, executed and delivered by the Auction Agent and
constitutes a legal and binding obligation of the Auction Agent.
7. Miscellaneous.
7.1 Term of Agreement.
(a) The term of the Agreement is unlimited unless it shall be terminated as
provided in this Section 7.1. The Trust may terminate the Agreement at any time
by so notifying the Auction Agent, provided that the Trust has entered into an
agreement in substantially the form of the Agreement with a successor Auction
Agent. The Auction Agent may terminate the Agreement upon written notice to the
Trust on the date specified in such notice, which date shall be no earlier than
45 days after the date of delivery of such notice.
(b) Except as otherwise provided in this paragraph (b), the respective rights
and duties of the Trust and the Auction Agent under the Agreement with respect
to any series of AMPS shall cease upon termination of the Agreement with respect
to such series. The Trust's representations, warranties, covenants and
obligations to the Auction Agent under Sections 5 and 6.4 hereof shall survive
the termination of the Agreement with respect to any series of AMPS. Upon
termination of the Agreement with respect to any series of AMPS, the Auction
Agent shall, at the Trust's request, promptly deliver to the Trust copies of all
books and records maintained by it with respect to AMPS in connection with its
duties hereunder and to any successor Auction Agent any funds then held by the
Auction Agent for the benefit of the Holders of AMPS or the Trust.
7.2 Communications.
Except for (i) communications authorized to be by telephone pursuant to
the 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, addressed to it, at its address or telecopy number set forth below:
If to the Trust: Pioneer High Income Trust
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Assistant Secretary
c/o Pioneer Investment Management, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
11
If to the Auction Agent: Deutsche Bank Trust Company Americas
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Each such notice, request or communication shall be effective when
delivered at the address specified herein. Communications shall be given on
behalf of the Trust by a Trust Officer and on behalf of the Auction Agent by
telephone (confirmed by telecopy or in writing) by an Authorized Officer.
7.3 Entire Agreement.
The Agreement (including the Auction and Settlement Procedures
incorporated herein) contains the entire agreement between the parties relating
to, and superseding any prior 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 Trust, the Auction Agent and their respective successors and assigns,
any benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment; Waiver.
(a) The Agreement shall not be deemed or construed to be modified, amended,
rescinded, cancelled 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.
The Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the respective successors and assigns of each of the Trust and
the Auction Agent.
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.
12
7.8 Disclosure of Information.
The Auction Agent agrees that it will not disclose or use any
"non-public personal information" about the Fund's shareholders other than such
uses or disclosures as are permitted by Regulation S-P under Section 504 of the
▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇ Act ("Regulation S-P"). "Nonpublic personal information" about
a shareholder shall mean: (i) personally identifiable financial information;
(ii) any list, description, or other grouping of consumers that is derived from
using any personally identifiable information that is not publicly available;
and (iii) any other information that a Customer or the Transfer Agent is
prohibited from using or disclosing pursuant to Regulation S-P.
7.9 Governing Law.
The Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
PIONEER HIGH INCOME TRUST
By: __________________________________
Name
Title
DEUTSCHE BANK TRUST COMPANY AMERICAS
By: __________________________________
Name
Title
13
EXHIBIT A
================================================================================
FORM OF BROKER-DEALER AGREEMENT
AMONG
DEUTSCHE BANK TRUST COMPANY AMERICAS
AS AUCTION AGENT
[ ]
AS BROKER-DEALER
DATED AS OF [ ], 2002
RELATING TO
AUCTION MARKET PREFERRED SHARES
SERIES M AND SERIES W
OF
PIONEER HIGH INCOME TRUST
================================================================================
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BROKER-DEALER AGREEMENT dated as of [ ], 2002 (this "Agreement"), among
(i) Deutsche Bank Trust Company Americas, a New York banking corporation, as
auction agent (the "Auction Agent") (not in its individual capacity but solely
as agent of Pioneer High Income Trust, a Delaware business trust (the "Trust"))
pursuant to authority granted to it in the Auction Agency Agreement and (ii)
each broker-dealer whose name appears on the signature page hereof, as
broker-dealer (together with its successors and assigns as such hereinafter
referred to as "BD").
The Trust intends to issue two series of Auction Market Preferred
Shares, no par value per share, liquidation preference $25,000 per share,
designated Series M and Series W (collectively, the "AMPS"). The shares of each
series of AMPS shall be issued in book-entry form through the facilities of the
Securities Depository. References to "Shares of AMPS" or "AMPS" in this
Agreement shall refer only to the beneficial interests in the AMPS unless the
context otherwise requires.
The Auction Procedures require the participation of a Broker-Dealer.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Auction Agent, the Trust and BD
agree as follows:
1. DEFINITIONS AND RULES OF CONSTRUCTION
1.1 TERMS DEFINED BY STATEMENT OF PREFERENCES. Capitalized terms not
defined herein shall have the respective meanings specified in the Statement.
1.2 TERMS DEFINED HEREIN. As used herein and in the Settlement
Procedures, the following terms shall have the following meanings, unless the
context otherwise requires:
(a) "Agent Member" of any Person shall mean the member of, or participant in,
the Securities Depositary that will act on behalf of a Bidder.
(b) "Agreement" with respect to the Trust shall mean this Agreement as may be
amended in writing with written consent of the Trust.
(c) "AMPS" shall mean the preferred shares, $0.001 par value per share, of the
Trust designated as its "Auction Market Preferred Shares" and bearing such
further designation as to series as the Board of Trustees, as the case may be,
of the Trust or any committee thereof shall specify.
(d) "Auction" shall have the meaning specified in Section 2.1 hereof.
(e) "Auction Procedures" shall mean the auction procedures constituting Part II
of the form of Statement.
(f) "Authorized Officer" of the Auction Agent shall mean each Senior Vice
President, Vice President, Assistant Vice President, and Associate of the
Auction Agent assigned to its Corporate Trust and Agency Group and every other
officer or employee of the Auction Agent designated as an "Authorized Officer"
for purposes hereof in a communication to the Trust.
(g) "Settlement Procedures" shall mean the Settlement Procedures attached to
the Auction Agency Agreement as Exhibit B.
A-2
(h) "Statement" shall mean the Statement of Preferences of Auction Market
Preferred Shares, as the same may be amended, supplemented or modified from time
to time.
(i) "Trust 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 Vice
President, each Assistant Secretary and each Assistant Treasurer of the Trust
and every other officer or employee of the Trust designated as a "Trust Officer"
for purposes hereof in a notice to the Auction Agent.
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.
(e) This Agreement shall apply separately but equally to all series of AMPS that
may be issued. Section 1 and 2 hereof shall be read in conjunction with the
Statement and in the event of any conflict with the Statement, the Statement
shall take precedence.
1.4 WARRANTIES OF BD. BD hereby represents and warrants that this Broker-Dealer
Agreement has been duly authorized, executed and delivered by BD and that,
assuming the due authorization, execution and delivery hereof by the Auction
Agent, this Broker-Dealer Agreement constitutes a valid and binding agreement of
BD, enforceable against it in accordance with its terms. BD's representations
and warranties in this Section 1.4 shall survive the termination of this
Agreement.
2. THE AUCTIONS.
2.1 PURPOSE; INCORPORATION BY REFERENCE OF AUCTION PROCEDURES AND
SETTLEMENT PROCEDURES.
(a) On each Auction Date, the provisions of the Auction Procedures will be
followed by the Auction Agent for the purpose of determining the Applicable Rate
for the AMPS for the next Dividend Period. Each periodic implementation of such
procedures is hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures and the Settlement
Procedures 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 fully set forth herein.
(c) BD agrees to act as, and assumes the obligations of and limitations and
restrictions placed upon, a Broker-Dealer under this Agreement.
(d) BD acknowledges and agrees that each provision of the Auction Procedures
that requires BD to perform an obligation or procedure is hereby incorporated
herein by reference and that this
A-3
Agreement shall constitute the Trust's instruction, and BD hereby agrees,
to perform such obligations and procedures without further request by or
instructions from the Trust.
(e) BD may participate in Auctions for its own account.
2.2 PREPARATION FOR EACH AUCTION.
(a) Not later than 9:30 a.m. on each Auction Date, the Auction Agent shall
advise BD by telephone or other electronic means, to be confirmed in writing by
the Auction Agent, of the Maximum Rate, Reference Rate(s) and Treasury Index
Rate(s).
(b) BD shall cause the Maximum Rate to be communicated as promptly as
practicable to its customers who hold or may be interested in acquiring AMPS.
(c) If required by applicable law, or requested by the Auction Agent, BD shall
provide a list of Existing Holders based upon inquiries of those Persons such
Broker-Dealer believes are Beneficial Owners as a result of the most recent
Auction to the Auction Agent promptly after any date so requested by the Auction
Agent. The Auction Agent shall keep confidential any such information, including
information received as to the identity of Bidders in any Auction, and shall not
disclose any such information so provided to any Person other than the other
parties hereto, PROVIDED that the Auction Agent each reserves the right to
disclose any such information if (a) it is ordered to do so by a court of
competent jurisdiction or a regulatory, judicial or quasi-judicial agency, (b)
it is advised by its counsel that its failure to do so would be unlawful or (c)
failure to do so would expose the Auction Agent to loss, liability, claim,
damage or expense for which it has not received indemnity satisfactory to it.
(d) BD agrees to maintain a list of customers relating to a series of AMPS and
to use its best efforts, subject to existing laws and regulations, to contact
the customers on such list whom BD believes may be interested in participating
in the Auction on each Auction Date, as a Potential Holder or a Potential
Beneficial Owner, for the purposes set forth in the Auction Procedures. Nothing
herein shall require BD to submit an Order for any customer in any Auction.
(e) The Auction Agent's registry of Existing Holders of shares of a series of
AMPS shall be conclusive and binding on BD. BD may inquire of the Auction Agent
between 3:00 P.M. on the Business Day preceding an Auction for shares of a
series of AMPS and 9:30 A.M. on the Auction Date for such Auction to ascertain
the number of shares of such series in respect of which the Auction Agent has
determined BD to be an Existing Holder. If BD believes it is the Existing Holder
of fewer shares of such series than specified by the Auction Agent in response
to BD's inquiry, BD may so inform the Auction Agent of that belief. BD shall
not, in its capacity as Existing Holder of shares of such series, submit Orders
in such Auction in respect of shares of such series covering in the aggregate
more than the number of shares of such series specified by the Auction Agent in
response to BD's inquiry.
2.3 AUCTION SCHEDULE; METHOD OF SUBMISSION OF ORDERS.
(a) The Auction Agent shall conduct Auctions in accordance with the schedule set
forth below. Such schedule may be changed at any time by the Auction Agent with
the consent of the Trust, which consent shall not be unreasonably withheld. The
Auction Agent shall give written notice of any such change to BD which shall
have the right to review such change. Such notice shall be received one Business
Day prior to the first Auction Date on which any such change shall be effective.
A-4
TIME EVENT
By 9:30 a.m. Auction Agent advises the Trust and the Broker-
Dealer of the applicable Maximum Rate and the
Reference Rate(s) and Treasury Index Rate(s) as
set forth in Section 2.2(a) hereof.
9:30 a.m. - 1:30 p.m. Auction Agent assembles information communicated
to it by Broker-Dealer as provided in
Section 1(a) of the Auction Procedures.
Submission Deadline is 1:30 p.m.
Not earlier than 1:30 p.m. Auction Agent makes determinations pursuant to
3(a) of the Auction Procedures.
By approximately 3:30 p.m. Auction Agent advises the Trust of results of
Auction as provided in Section 3(b) of the
Auction Procedures. Submitted Bids and Submitted
Sell Orders are accepted and rejected in whole
or in part and AMPS are allocated as provided
in Section 4 of the Auction Procedures. Auction
Agent gives notice of Auction results as set
forth in Section 2.4(a) hereof.
(b) BD may designate one or more individuals in its organization who will
coordinate its procedures in connection with Auctions and purchases and sales of
shares of any series of AMPS.
(c) BD agrees to handle its customers' order in accordance with its duties under
applicable securities laws and rules.
(d) To the extent that pursuant to Section 4 of the Auction Procedures of the
Trust, BD continues to hold, sells or purchases a number of shares that is fewer
than the number of shares in an Order submitted by BD to the Auction Agent in
which BD designated itself as an Existing Holder or Potential Holder in respect
of customer Orders, BD shall make appropriate pro rata allocations among its
customers for which it submitted Orders of similar tenor. If as a result of such
allocations, any Beneficial Owner would be entitled or required to sell, or any
Beneficial Owner would be entitled or required to purchase, a fraction of a
Share of AMPS on any Auction Date, BD shall, in such manner as it shall
determine in its sole discretion, round up or down the number of AMPS to be
purchased or sold on such Auction Date by any Beneficial Owner or Potential
Beneficial Owner on whose behalf BD submitted an Order so that the number of
shares so purchased or sold by each such Beneficial Owner or Potential
Beneficial Owner on such Auction Date shall be whole shares.
(e) BD shall submit Orders to the Auction Agent in writing in substantially the
form attached hereto as Exhibit A. BD shall submit separate Orders to the
Auction Agent for each Potential Holder or Existing Holder on whose behalf BD is
submitting an Order and shall not net or aggregate the Orders of Potential
Holders or Existing Holders on whose behalf BD is submitting Orders.
(f) BD shall deliver to the Auction Agent (i) a written notice, substantially in
the form attached hereto as Exhibit B, of transfers of AMPS made through BD by
an Existing Holder to another Person other than pursuant to an Auction and (ii)
a written notice, substantially in the form
A-5
attached hereto as Exhibit C, of the failure of any AMPS to be transferred
to or by any Person that purchased or sold AMPS through BD pursuant to an
Auction. The Auction Agent is not required to accept any notice delivered
pursuant to the terms of the foregoing sentence with respect to an Auction
unless the Auction Agent receives it by 3:30 p.m. on the Business Day preceding
such Auction.
2.4 NOTICES.
(a) On each Auction Date, the Auction Agent shall notify BD by telephone or
facsimile (or other electronic means acceptable to both parties) of the results
of the Auction as set forth in paragraph (a) of the Settlement Procedures. By
approximately 11:30 A.M. on the Business Day next succeeding such Auction Date,
the Auction Agent shall notify BD in writing of the disposition of all Orders
submitted by BD in the Auction held on such Auction Date.
(b) BD shall notify each Existing Holder or Potential Holder on whose behalf BD
has submitted an Order as set forth in paragraph (b) of the Settlement
Procedures and take such other action as is required of BD pursuant to the
Settlement Procedures.
2.5 NOTIFICATION OF DIVIDEND.
The provisions contained in Section 3 of Part I of the
Statement concerning the notification of a Special Rate Period will be followed
by the Auction Agent and BD, 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.
2.6 SERVICE CHARGE TO BE PAID TO BD.
(a) No later than 12:00 noon on each Dividend Payment Date, the Auction Agent
after each Auction will pay a service charge from funds provided by the Trust 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 Dividend Period other than a Special
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 date of
original issue of such shares to but excluding the next succeeding dividend
payment date of such shares) and the denominator of which is 360, times (B) 1/4
of 1%, times (C) $25,000 times (D) the sum of the aggregate number of shares of
outstanding AMPS for which the Auction is conducted and (ii) in the case of any
Special Dividend Period the amount determined by mutual consent of the Trust and
any such Broker-Dealers and shall be based upon a selling concession that would
be applicable to an underwriting of fixed or variable rate AMPS with a similar
final maturity or variable rate dividend period, respectively, at the
commencement of the Dividend Period with respect to such Auction.
(b) If the Trust determines to change the rate at which the Broker-Dealer Fee
accrues, the Trust shall mail to the Auction Agent a notice thereof within two
Business Days of such change. Any change in the Broker-Dealer Fee Rate shall be
effective on the Auction Date next succeeding the Auction Agent's receipt of
notice of such change.
2.7 SETTLEMENT.
(a) If any Existing Holder selling AMPS in an Auction fails to deliver such AMPS
(by authorized book-entry), the BD of any Person that was to have purchased AMPS
in such Auction may deliver to such Person a number of Shares of AMPS that is
less than the number of Shares of AMPS that otherwise were to be purchased by
such Person. In such event, the number of Shares of AMPS to be so delivered
A-6
shall be determined by BD. Delivery of such lesser number of Shares of AMPS
shall constitute good delivery. Upon the occurrence of any such failure to
deliver Shares of AMPS, BD shall deliver to the Auction Agent the notice
required by Section 2.3(f)(ii) hereof. Notwithstanding the foregoing provisions
of this Section 2.7(a), any delivery or non-delivery of AMPS which represents
any departure from the results of an Auction, as determined by the Auction
Agent, shall be of no effect unless and until the Auction Agent shall have been
notified of such delivery or non-delivery in accordance with the terms of
Section 2.3(f) hereof. The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 2.7(a).
(b) Neither the Auction Agent nor the Trust shall have any responsibility or
liability with respect to the failure of an Existing Holder, a Potential Holder
or an Agent Member or any of them to deliver AMPS or to pay for AMPS sold or
purchased pursuant to the Auction Procedures or otherwise.
(c) Notwithstanding any provision of the Auction Procedures or the Settlement
Procedures to the contrary, in the event BD is an Existing Holder with respect
to shares of a series of AMPS and the Auction procedures provide that BD shall
be deemed to have submitted a Sell Order in an Auction with respect to such
shares if BD fails to submit an Order in that Auction with respect to such
shares, BD shall have no liability to any Person for failing to sell such shares
pursuant to such a deemed Sell Order if (i) such shares were transferred by the
beneficial owner thereof without notification of such transfer in compliance
with the Auction Procedures or (ii) BD has indicated to the Auction Agent
pursuant to Section 2.2(e) of this Agreement that, according to BD's records, BD
is not the Existing Holder of such shares.
(d) Notwithstanding any provision of the Auction Procedures or the Settlement
Procedures to the contrary, in the event an Existing Holder or Beneficial Owner
of shares of a series of AMPS with respect to whom a Broker-Dealer submitted a
Bid to the Auction Agent for such shares that was accepted in whole or in part,
or submitted or is deemed to have submitted a Sell Order for such shares that
was accepted in whole or in part, fails to instruct its Agent Member to deliver
such shares against payment therefore, partial deliveries of AMPS that have been
made in respect of Potential Holders' or Potential Beneficial Owners' Submitted
Bids for shares of such series that have been accepted in whole or in part shall
constitute good delivery to such Potential Holders and Potential Beneficial
Owners.
3. THE AUCTION AGENT
3.1 DUTIES AND RESPONSIBILITIES.
(a) The Auction Agent is acting solely as agent for the Trust hereunder and owes
no duties, fiduciary or otherwise, to any other Person.
(b) The Auction Agent undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement, the Auction Agencygreement,
Auction Procedures or the Settlement Procedures 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 or for any error
of judgment made by it in the performance of its duties under this Agreement.
The Auction Agent shall not be liable for any error resulting from the use or
reliance on a source of information used in good faith and without negligence to
make any determination, calculation or declaration hereunder. The Auction Agent
shall not be liable for any error of judgment made in good faith unless the
Auction Agent shall have been negligent in ascertaining or failing to ascertain
the pertinent facts. In no event shall the Auction Agent be liable for special,
A-7
punitive, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Auction Agent has been
advised of the likelihood of such loss or damage and regardless of the form of
action.
(d) The Auction Agent shall not be: (i) required to, and does not, make any
representations or have any responsibilities as to the validity, accuracy, value
or genuineness of any signatures or endorsements, other than its own; (ii)
obligated to take any legal action hereunder that might, in its judgment,
involve any expense or liability, unless it has been furnished with indemnity
satisfactory to the Auction Agent; and (iii) responsible for or liable in any
respect on account of the identity, Trust or rights of any Person (other than
itself and its agents and attorneys) executing or delivering or purporting to
execute or deliver any document under this Agreement or any Broker-Dealer
Agreement.
(e) The Auction Agent shall not be responsible or liable for any failure or
delay in the performance of its obligations under this Agreement arising out of
or caused, directly or indirectly, by circumstances beyond its reasonable
control; it being understood that the Auction Agent shall use reasonable efforts
which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.
3.2 RIGHTS OF THE AUCTION AGENT.
(a) The Auction Agent may conclusively rely and shall be fully protected in
acting or refraining from acting upon any communication authorized by this
Agreement and upon any written instruction, notice, request, direction, consent,
report, certificate, share certificate or other instrument, paper or document
believed by it to be genuine. The Auction Agent shall not be liable for acting
upon any communication authorized by this Agreement (including, but not limited
to, any made by telephone, telecopier or other means of electronic communication
acceptable to the parties hereto) which the Auction Agent believes in good faith
to have been given by the Trust or by BD. The Auction Agent may record telephone
communications with BD.
(b) The Auction Agent may consult with counsel of its own choice, and the advice
of such counsel 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 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 and shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care.
3.3 AUCTION AGENT'S DISCLAIMER. The Auction Agent makes no representation as to,
and shall have no liability with respect to, the correctness of the recitals in,
or the validity, adequacy or accuracy of, this Agreement, the Auction Agency
Agreement, the Auction Procedures, the offering material used in connection with
the offer and sale of the AMPS or any other agreement or instrument executed in
connection with the transactions contemplated herein or in any thereof.
4. MISCELLANEOUS
4.1 TERMINATION. (a) Any party may terminate this Agreement at any time upon
five (5) days written notice to the other parties, which notice may be given by
facsimile as provided in Section 4.3
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hereof. This Agreement shall automatically terminate upon the redemption of
all outstanding AMPS or upon termination of the Auction Agency Agreement.
(b) BD represents that it (or if BD does not act as Agent Member, one of its
affiliates) shall make all dividend payments on the AMPS available in same-day
funds on each Dividend Payment Date to customers that use BD or affiliate as
Agent Member.
4.2 AGENT MEMBER. BD is, and shall remain for the term of this Agreement,
a member of, or participant in, the Securities Depository (or an affiliate of
such a member or participant).
4.3 COMMUNICATIONS. Except for (i) communications authorized to be by telephone
pursuant to this Agreement or the Auction Procedures and (ii) communications in
connection with the Auctions (other than those expressly required to be in
writing), all notices, requests and other communications to any party hereunder
shall be in writing (for the purposes of this Agreement, telecopy or other means
of electronic communication acceptable to the parties shall be deemed to be in
writing) and shall be given to such party, addressed to it, at its address,
telecopy number set forth below and, where appropriate reference the particular
Auction to which such notice relates:
If to BD,
addressed:
Attention: ________________
Telephone No.: ____________
Facsimile No.: _____________
If to the Auction
Agent, addressed: Deutsche Bank Trust Company Americas
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trust,
addressed: Pioneer High Income Trust
c/o Pioneer Investment Management, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Assistant Secretary
Telephone No.: (617) ▇▇▇- ▇▇▇▇
Facsimile No.: (617) 422- 4223
or such other address or facsimile number as such party may hereafter specify
for such purpose by notice to the other parties. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of BD by a BD Officer, on behalf of the
Auction Agent by an Authorized Officer and on behalf of the Trust by an
Authorized Trust Officer. Telephone communications may be recorded.
A-9
4.4 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 inferred, between the parties relating to the subject matter hereof.
4.5 BENEFITS. Nothing in this Agreement, express or implied, shall give to any
person, other than the Auction Agent, the Trust and BD and their respective
successors and permitted assigns, any benefit of any legal or equitable right,
remedy or claim under this Agreement.
4.6 AMENDMENT; WAIVER.
(a) This Agreement shall not be deemed or construed to be modified, amended,
rescinded, cancelled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of each of the parties
hereto.
(b) Failure of any party to this Agreement to exercise any right or remedy
hereunder in the event of a breach of this Agreement by any other party shall
not constitute a waiver of any such right or remedy with respect to any
subsequent breach.
4.7 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 parties hereto. This Agreement may not be assigned by any
party hereto absent the prior written consent of the other parties.
4.8 SEVERABILITY. If any clause, provision or section of this Agreement 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 remaining clause, provision or section hereof.
4.9 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.
4.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW, OTHER THAN SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW OF NEW YORK).
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.
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Auction Agent
By:
Name:
Title:
[ ]
as Broker-Dealer
By:
Name:
Title:
A-10
Exhibit A
To BROKER-DEALER
AGREEMENT
AUCTION BID FORM
(Submit only one Order on this Order Form)
PIONEER HIGH INCOME TRUST
Auction Market Preferred Shares ("AMPS")
To: [______________] Date of Auction ____________
Series of AMPS (indicate by
Number Designation)
-------
The undersigned Broker-Dealer submits the following Order on behalf of the
Bidder listed below:
Name of Bidder: __________________________________
Bidder placed the Order listed below covering the number of shares
indicated
(complete only one blank):
_________________ number of Shares of AMPS now held by
Bidder (an Existing Holder), and the Order is a (check one):
|_| Hold Order; or
|_| Bid at a rate of ____%; or
|_| Sell Order;
- or -
_________________ number of Shares of AMPS not now held
by Bidder (a Potential Holder), and the Order is
a Bid at a rate of ______%
Notes:
(1) If submitting more than one Bid for one Bidder, use additional Order Forms.
(2) If one or more Bids covering in the aggregate more than the outstanding
number of Shares of AMPS held by any Existing Holder are submitted,
such Bids shall be considered valid in the order of priority set forth
in the Auction Procedures.
(3) A Hold or Sell Order may be placed only by an Existing Holder covering
a number of Shares of AMPS not greater than the number of Shares of
AMPS currently held by such Existing Holder.
(4) Potential Holders may make Bids only, each of which must specify a
rate. If more than one Bid is submitted on behalf of any Potential
Holder, each Bid submitted shall be a separate Bid with the rate
specified.
(5) Bids may contain no more than three figures to the right of the decimal
point (.001 of 1%).
(6) An Order must be submitted in whole Shares of AMPS with an aggregate
liquidation preference of $25,000.
Name of Broker-Dealer:
By:
A-1
Exhibit B
To BROKER-DEALER
AGREEMENT
(To be used only for transfers made other than
pursuant to an Auction)
TRANSFER FORM
PIONEER HIGH INCOME TRUST
Auction Market Preferred Shares ("AMPS")
Series _____ AMPS
(indicate by Number Designation)
We are (check one):
|_| the Existing Holder named below; or
|_| the Broker-Dealer for such Existing Holder; or
|_| the Agent Member for such Existing Holder.
We hereby notify you that such Existing Holder will transfer ___ Shares
of AMPS to ____________________ and represent that such transfer complies with
the requirements of the Agreement and Declaration of Trust of Pioneer High
Income Trust, the Statement of Preferences of Auction Market Preferred Shares
and applicable federal and state law. Upon the request of the Trust or the
Auction Agent the undersigned will provide such documentation as shall be
reasonably requested to demonstrate such compliance as a condition of the
registration of such transfer.
PIONEER HIGH INCOME TRUST
By: _______________________________
Name:
Title:
(Name of Existing Holder)
(Name of Broker-Dealer)
(Name of Agent Member)
By: _______________________________
Name:
Title:
B-1
Exhibit C
To BROKER-DEALER
AGREEMENT
(To be used only for failures to deliver
AMPS sold pursuant to an Auction)
NOTICE OF A FAILURE TO DELIVER
PIONEER HIGH INCOME TRUST
Auction Market Preferred Shares ("AMPS")
Series _____ AMPS
(indicate by Number Designation)
Complete either I. or II.
I. We are a Broker-Dealer for ______________ (the "Purchaser"), which
purchased ____ Shares of AMPS in the Auction held on __________________ from
the seller of such AMPS.
II. We are a Broker-Dealer for _____________ (the "Seller"), which sold
____ Shares of AMPS in the Auction held on ____________________ to the
purchaser of such AMPS.
We hereby notify you that (check one):
__________ the Seller failed to deliver such AMPS to the Purchaser; or
__________ the Purchaser failed to make payment to the Seller upon delivery of
such AMPS.
Name: ________________________________
(Name of Broker-Dealer)
By: ____________________________________
Printed Name:
Title:
C-1
Capitalized terms used in this letter, unless otherwise defined herein,
shall have the meanings set forth in the Offering Documents.
(Name of Purchaser)
By:
Name:
Title:
Address:
Dated:
C-2
EXHIBIT B
SETTLEMENT PROCEDURES
The following summary of Settlement Procedures sets forth the
procedures expected to be followed in connection with the settlement of each
Auction and will be incorporated by reference in the Auction Agency Agreement
and each Broker-Dealer Agreement. Nothing contained in this Appendix constitutes
a representation by the Trust that in each Auction each party referred to herein
will actually perform the procedures described herein to be performed by such
party.
(a) On each Auction Date, the Auction Agent shall notify by telephone the
Broker-Dealers that participated in the Auction held on such Auction Date and
submitted an order on behalf of any Existing Holder or Potential Holder of:
(i) the Applicable Rate fixed for the next succeeding Dividend Period;
(ii) whether Sufficient Clearing Bids existed for the determination of the
Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker-Dealer") submitted a Bid or
Sell Order on behalf of an Existing Holder, the number of shares, if any,
of AMPs to be sold by such Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's Broker-Dealer") submitted a Bid on
behalf of a Potential Holder, the number of shares, if any, of AMPs to be
purchased by such Potential Holder;
(v) if the aggregate number of AMPs to be sold by all Existing Holders on
whose behalf such Broker-Dealer submitted a Bid or a Sell Order exceeds the
aggregate number of AMPs to be purchased by all potential Holders on whose
behalf such Broker-Dealer submitted a Bid, the name or names of one or more
Buyer's Broker-Dealers (and the name of the Agent Member, if any, of each such
Buyer's Broker-Dealer) acting for one or more purchasers of such excess number
of AMPs and the number of such shares to be purchased from one or more Existing
Holders on whose behalf such Broker-Dealer acted by one or more Potential
Holders on whose behalf each of such Buyer's Broker-Dealers acted;
(vi) if the aggregate number of AMPs to be purchased by all Potential
Holders on whose behalf such Broker-Dealer submitted a Bid exceeds the aggregate
number of AMPs to be sold by all Existing Holders on whose behalf such Broker-
Dealer submitted a Bid or a Sell Order, the name or names of one or more
Seller's Broker Dealers (and the name of the Agent Member, if any, of each such
Seller's Broker-Dealer) acting for one or more sellers of such excess number of
AMPs and the number of such shares to be sold to one or more Potential holders
on whose behalf such Broker-Dealer acted by one or more Existing Holders on
whose behalf each of such Seller's Broker-Dealers acted; and
(vii) the Auction Date of the next succeeding Auction with respect to the
AMPs.
B-1
(b) On each Auction Date, each Broker-Dealer that submitted an Order on behalf
of any Existing Holder or Potential Holder shall:
(i) in the case of a Broker-Dealer that is a Buyer's Broker-Dealer,
instruct each Potential Holder on whose behalf such Broker-Dealer submitted a
Bid that was accepted, in whole or in part, to instruct such Potential Holder's
Agent Member to pay to such Broker - Dealer (or its Agent Member) through the
Securities Depository the amount necessary to purchase the number of AMPs to be
purchased pursuant to such Bid against receipt of such shares and advise such
Potential Holder of the Applicable Rate for the next succeeding Dividend Period;
(ii) in the case of a Broker - Dealer that is a Seller's Broker-Dealer,
instruct each Existing Holder on whose behalf such Broker-Dealer submitted a
Sell Order that was accepted, in whole or in part, to instruct such
Existing Holder's Agent Member to deliver to such Broker-Dealer (or its Agent
Member) through the Securities Depository the number of AMPs to be sold pursuant
to such Order against payment therefor and advise any such Existing Holder that
will continue to hold AMPs of the Applicable Rate for the next succeeding
Dividend Period;
(iii) advise each Existing Holder on whose behalf such Broker-Dealer
submitted a Hold Order of the Applicable Rate for the next succeeding Dividend
Period;
(iv) advise each Existing Holder on whose behalf such Broker-Dealer
submitted an Order of the Auction Date for the next succeeding Auction; and
(v) advise each Potential Holder on whose behalf such Broker-Dealer
submitted a Bid that was accepted, in whole or in part, of the Auction Date for
the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to (a) above, each
Broker-Dealer that submitted a Bid or a Sell Order on behalf of a Potential
Holder or an Existing Holder shall, in such manner and at such time or times as
in its sole discretion it may determine, allocated any funds received by it
pursuant to (b)(i) above and any AMPs received by it pursuant to (b)(ii) above
among the Potential Holders, if any, on whose behalf such Broker-Dealer
submitted Bids, the Existing Holders, if any, on whose behalf such Broker-Dealer
submitted Bids that were accepted or Sell Orders, and any Broker-Dealer or
Broker-Dealers identified to it by the Auction Agent pursuant to (a)(v) or
(a)(vi) above.
(d) On each Auction Date:
(i) each Potential Holder and Existing Holder shall instruct its Agent
Member as provided in (b)(i) or (ii) above, as the case may be;
(ii) each Seller's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay through
the Securities Depository to the Agent Member of the Existing Holder delivering
shares to such Broker-Dealer pursuant to (b)(ii) above the amount necessary to
purchase such shares against receipt of such shares, and (B) deliver such shares
through the Securities Depository to a Buyer's Broker-Dealer (or its Agent
Member) identified to such Seller's Broker-Dealer pursuant to (a)(v) above
against payment therefor; and
B-2
(iii) each Buyer's Broker-Dealer which is not an Agent Member of the
Securities Depository shall instruct its Agent Member to (A) pay through
the Securities Depository to a Seller's Broker-Dealer (or its Agent Member)
identified pursuant to (a) (vi) above the amount necessary to purchase the
shares to be purchased pursuant to (b) (i) above against receipt of such shares,
and (B) deliver such shares through the Securities Depository to the Agent
Member of the purchaser thereof against payment therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d) (i) above shall instruct
the Securities Depository to execute the transactions described under (b) (i) or
(ii) above, and the Securities Depository shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall instruct the
Securities Depository to execute the transactions described in (d) (ii) above,
and the Securities Depository shall execute such transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall instruct the
Securities Depository to execute the transactions described in (d) (iii)
above, and the Securities Depository shall execute such transactions.
(f) If an Existing Holder selling AMPs in an Auction fails to deliver such
shares (by authorized book-entry), a Broker-Dealer may deliver to the Potential
Holder on behalf of which it submitted a Bid that was accepted a number of whole
AMPs that is less than the number of shares that otherwise was to be purchased
by such Potential Holder. In such event, the number of AMPs to be so delivered
shall be determined solely by such Broker-Dealer. Delivery of such lesser number
of shares shall constitute good delivery. Notwithstanding the foregoing terms of
this paragraph (f), any delivery or non-delivery of shares which shall represent
any departure from the results of an Auction, as determined by the Auction
Agent, shall be of no effect unless and until the Auction Agent shall have been
notified of such delivery or non-delivery in accordance with the provisions of
the Auction Agent Agreement and the Broker-Dealer Agreements.
B-3
