SUBADVISORY CONTRACT
THIS AGREEMENT made as of the 24th day of October, 2000 by and between
Pioneer Investment Management, Inc., a Delaware corporation (the "Manager"), and
Kothari Pioneer AMC Ltd., a corporation organized under the laws of India
("Kothari Pioneer").
W I T N E S S E T H
WHEREAS, the Manager desires to utilize the technical services of
Kothari Pioneer as financial counsel with respect to the portfolio investments
of Pioneer Indo-Asia Fund, a Delaware business trust and a registered open-end
investment company and formerly known as Pioneer India Fund (the "Fund"); and
WHEREAS, Kothari Pioneer is willing to perform such services on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:
1. KOTHARI PIONEER'S SERVICES. Kothari Pioneer will provide the
following technical services, including investment advisory services, to the
Manager, which is located outside India:
(a) Subject to the directions of the Manager and the limitations set forth below
and elsewhere herein, Kothari Pioneer will act as investment adviser with
respect to such portion of the Fund's assets as the Manager designates from time
to time. In such capacity, Kothari Pioneer will purchase, hold and sell
portfolio securities and monitor on a continuing basis the performance of such
portfolio securities; PROVIDED, HOWEVER, that, before investing any such assets
in a particular initial public offering, Kothari Pioneer will obtain the
Manager's written authorization to make such investment. Kothari Pioneer will
make investments hereunder only in securities markets located in India.
(b) Kothari Pioneer will advise the Manager on a prompt basis each day by
electronic telecommunication of each confirmed purchase and sale of a portfolio
security that it effects hereunder, and will provide the Manager with a separate
confirmation for each lot involved in the trade. Each such communication will
specify the name of the issuer, the full description of the security including
its class, the amount or number of shares or units of the security purchased or
sold, the market price, commission, government charges and gross or net price,
trade date, settlement date and identity of the effecting broker or dealer and,
if different, the identity of the clearing broker. Each such communication will
also contain settlement instructions for the transaction (unless standing
instructions previously provided by Kothari Pioneer apply to the transaction)
and specify the exchange on which the trade was executed, the nature of the
settlement arrangements and the lot-level of the trade. With respect to any
security purchased hereunder, Kothari Pioneer will also provide the Manager with
the local identification number of the security, the industry sector of the
issuer and the total amount of the issuer's issued and outstanding voting
securities. Kothari Pioneer will not have any authority to instruct the Fund's
custodian or any of the Fund's subcustodians concerning the Fund's portfolio
securities.
(c) Kothari Pioneer will arrange for the placing of orders for the purchase and
sale of securities hereunder with brokers or dealers selected by Kothari
Pioneer, and will provide the Manager at all times with a current master list of
brokers and dealers in India with which such orders may be placed. In the
selection of such brokers or dealers and the placing of such orders, Kothari
Pioneer is directed at all times to seek the most favorable price and execution
available (from the Fund's perspective). In seeking the most favorable price and
execution, Kothari Pioneer will consider all factors it deems relevant,
including by way of illustration, the size and type of the transaction; the
nature of the market for the security to be purchased or sold; the execution
efficiency, settlement capability and financial condition of the dealer; the
dealer's execution services rendered on a continuing basis; and the
reasonableness of any dealer spreads.
(d) Kothari Pioneer will assure that at least two representatives of the
Manager, as specified by the Manager, are authorized at all times to give
directions (without restriction of any kind) to brokers and dealers employed by
Kothari Pioneer to execute portfolio transactions for the Fund; PROVIDED that,
notwithstanding anything herein to the contrary, Kothari Pioneer will have no
responsibility for knowing of any such direction given unless the Manager has
given Kothari Pioneer written notice of the giving of such direction.
(e) Kothari Pioneer's portfolio management personnel will make themselves
available on a regular basis to discuss (via telephone) the Fund's investments
and prospective investments and other matters relevant to the Fund with a
representative of the Manager.
(f) Kothari Pioneer will provide the Manager with the following information on a
regular basis (unless a different frequency is specified):
(i) advice concerning the Fund's investments that are not direct
investments in securities markets located in India, including
recommendations to purchase, sell or hold securities;
(ii) immediate comment by telex or facsimile on earnings reports,
creditworthiness changes and other public announcements or developments
concerning Indian issuers of securities held, or being considered for purchase,
by the Fund (including American, global or other types of depositary receipts
for such securities), followed by more detailed comment and analysis;
(iii) comments by telex or facsimile, at the end of each day on which
one or more Indian securities markets are open for business, describing
major relevant news items and reasons for price fluctuations in India's
securities markets on such day;
(iv) research reports on industries and individual issuers of Indian
securities;
(v) macro-economic analyses, including analyses of economic and
political trends and developments and their potential effect on India's
securities markets and the Fund's investments;
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(vi) information concerning regulatory and procedural developments
with respect to India's securities markets (E.G., changes in settlement or
registration procedures, changes in the laws/guidelines governing foreign
investment in India);
(vii) the current market price of each portfolio security of the Fund
that is under Kothari Pioneer's management and identification of the source
for such price (E.G., price at which last reported sale of security was effected
on the principal exchange for such security) on a daily basis so that such
information can be used in calculating the Fund's net asset value on such day;
(viii) information that the Manager considers necessary to determine
whether the portfolio securities of the Fund that are under Kothari
Pioneer's management are liquid; and
(ix) other information upon which the Manager and Kothari Pioneer agree
in writing from time to time and which is described on Schedule A hereto.
2. INFORMATION TO BE PROVIDED BY THE MANAGER. The Manager will provide
Kothari Pioneer with the following information at the specified frequencies:
(i) a daily report of the Fund's cash balance;
(ii) a weekly list of all portfolio assets of the Fund, showing the cost
and market value of each such asset, the net asset value of the Fund and the
percentage of the Fund's assets represented by each holding;
(iii) a weekly status report on the registration of the Fund's portfolio
securities and the liquidity of the Fund's portfolio;
(iv) a weekly report on unsettled portfolio trades of the Fund;
(v) a weekly report of variances between contracted and actual
settlement amounts;
(vi) upon reasonable request by Kothari Pioneer, a report on foreign
ownership levels for particular Indian issuers;
(vii) upon reasonable request by Kothari Pioneer, a report showing the
amount of a particular Indian issuer's total issued capital owned by the Fund
and any other investor whose securities holdings in such issuer, together with
the Fund's, are subject to a percentage limitation imposed by Indian law; and
(viii) other information upon which the Manager and Kothari Pioneer
agree in writing from time to time and which is described on Schedule A hereto.
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3. ADDITIONAL SERVICES.
(a) Kothari Pioneer will be responsible for monitoring corporate actions,
including without limitation dividends, stock splits and rights offerings
(collectively, "Corporate Actions"), of Indian issuers of securities held by the
Fund, which securities are not registered in the Fund's name, and for giving the
Manager timely notice of each such Corporate Action. Kothari Pioneer will also
be responsible for (i) assisting the Manager in monitoring Corporate Actions of
Indian issuers of securities held by the Fund, which securities are registered
in the Fund's name, and (ii) providing the Manager with book closure dates for
all portfolio securities of the Fund under Kothari Pioneer's management.
(b) Kothari Pioneer will maintain an investment ledger showing the details of
all portfolio transactions effected by Kothari Pioneer hereunder. In addition,
Kothari Pioneer will require that its Access Persons (as defined in the Fund's
Code of Ethics) provide Kothari Pioneer with monthly reports of their personal
securities transactions. These books, records and reports will be available to
the Manager at any time upon request and, upon request by the Manager, will be
made available (by facsimile and express mail) without delay to the Manager
during any day that the Fund is open for business.
(c) From time to time as the Manager may reasonably request, Kothari Pioneer
will furnish to the Manager reports on securities held in the Fund's portfolio,
all in such detail as the Manager may reasonably request. Kothari Pioneer will
also inform the Manager on a current basis of changes in its investment strategy
or key personnel. Kothari Pioneer will make its key personnel available to meet
with representatives of the Manager in the United States, or at such other
location on which Kothari Pioneer and the Manager agree, at least annually on
due notice to review the investments made hereunder in light of current and
prospective political, economic and market conditions in India.
(d) Kothari Pioneer will be responsible for ensuring compliance with any
transaction volume limit with respect to the Fund's investments in India's
securities markets, imposed by the Fund's subcustodian in India or otherwise,
except that, with respect to any such limit that is not imposed by Indian law,
Kothari Pioneer will have no responsibility hereunder unless the Manager has
informed Kothari Pioneer in writing of such limit.
(e) Kothari Pioneer will furnish to the Manager such information as may
reasonably be necessary in order for the Trustees of the Fund to evaluate this
Agreement or any proposed amendments hereto for the purpose of casting a vote
pursuant to Section 8 or 12 hereof.
(f) Kothari Pioneer will be responsible for providing such other services with
respect to the Fund as the Manager may reasonably request.
4. COMPLIANCE.
(a) Kothari Pioneer will not effect portfolio transactions or provide advice
hereunder that is contrary to the Fund's investment policies and restrictions as
stated in the Fund's prospectus and statement of additional information, as such
prospectus and statement of additional information are revised and updated from
time to time. The Manager will forward promptly prospectuses and statements of
additional information, as so revised and updated, to
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Kothari Pioneer. Kothari Pioneer will not effect portfolio transactions or
provide advice hereunder that conflicts with applicable requirements imposed by
the U.S. Investment Company Act of 1940, as amended (the "1940 Act"), the U.S.
Investment Advisers Act of 1940, as amended (the "Advisers Act"), or the laws,
rules or guidelines of the Government of India, any agency or instrumentality
thereof, or any Indian stock exchange, including without limitation percentage
limitations that apply to the Fund's investments in Indian issuers
(collectively, "Applicable Law"). As used herein, the term "Applicable Law" will
include without limitation the investment restrictions and compliance matters
listed in Kothari Pioneer's compliance manual as provided by the Manager to
Kothari Pioneer, as the same may be revised and updated from time to time.
(b) Without limiting the foregoing, under no circumstances may Kothari Pioneer
or any other "affiliated person" (as defined in the 0000 Xxx) of the Fund, or
any affiliated person of Kothari Pioneer or of any such other affiliated person,
act as a principal in a portfolio transaction with the Fund or any other
investment company managed by the Manager. In addition, no portfolio transaction
on behalf of the Fund may be executed by or through Kothari Pioneer or any such
affiliated person as a broker, except on terms expressly approved in advance by
the Manager, which terms are in compliance with Section 17(e) of the 1940 Act.
5. KOTHARI PIONEER'S REGISTRATION AND OTHER AGREEMENTS. Kothari Pioneer
represents and warrants to the Manager that it is registered as an investment
adviser under the Advisers Act and will remain so registered for the duration of
this Agreement. It is understood that Kothari Pioneer and the Manager may have
advisory, management, service or other contracts with other individuals or
entities and may have other interests and businesses. When recommending a
portfolio transaction hereunder in which Kothari Pioneer, any affiliated person
of Kothari Pioneer (other than the Manager), or any other advisory client of
Kothari Pioneer has a direct or indirect interest, Kothari Pioneer will notify
the Manager of such interest.
6. COMPENSATION. The Manager will pay to Kothari Pioneer for its
technical services hereunder a fee at the annual rate of:
0.10% of the Fund's average gross assets invested in India's securities
markets, including assets invested in American, global or other types
of depositary receipts for securities traded in India's securities
markets if such gross assets are no greater than $15,000,000;
0.20% of such gross assets if such gross assets are greater than
$15,000,000 but no greater than $45,000,000;
0.40% of such gross assets if such gross assets are greater than
$45,000,000 but no greater than $60,000,000; and
0.60% of such gross assets if such gross assets are greater than
$60,000,000.
To illustrate the application of the foregoing, if such gross assets equal
$50,000,000 for any particular year, then Kothari Pioneer's annual fee hereunder
will be $200,000 (0.40% X $50,000,000). Kothari Pioneer's fees hereunder will be
calculated and accrued monthly based on the average of the Fund's gross assets
invested in India's securities markets and in such depositary receipts on the
first and last day (on which this Agreement is effective) of each calendar
month, and such fee will be payable quarterly) after the end of each calendar
quarter on
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the 15th day of January, April, July and October of each year with respect
to the preceding quarter. If this Agreement is effective for only a portion of a
quarter, the aforesaid fee will be prorated for that portion of such quarter
during which this Agreement is in effect.
7. LIABILITY AND INDEMNIFICATION. Kothari Pioneer will not be liable
for any error of judgment or for any loss sustained by reason of the
adoption of any investment policy or the purchase, sale, or retention of any
security, except that nothing contained herein will be construed to protect
Kothari Pioneer against any liability to the Manager by reason of (a) willful
misfeasance, bad faith or gross negligence in the performance of its duties, (b)
its reckless disregard of its obligations and duties under this Agreement or (c)
any mistake or negligence of Kothari Pioneer with respect to (i) Applicable Law,
(ii) the direction of portfolio transactions to a broker or dealer that is an
affiliated person of the Fund or an affiliated person of such an affiliated
person (including affiliated persons of Kothari Pioneer) in violation of the
terms and provisions hereof, (iii) Kothari Pioneer's responsibilities with
respect to Corporate Actions of issuers of securities held by the Fund, but not
registered in the Fund's name, or (iv) Kothari Pioneer's responsibilities under
Section 3(d) hereof (collectively, "Malfeasance").
The Manager will indemnify Kothari Pioneer for all liabilities
and related costs, including reasonable attorney's fees, which Kothari Pioneer
may sustain in the discharge of its obligations hereunder without Malfeasance
and in accordance with Applicable Law; PROVIDED that indemnifiable liabilities
and costs will not include the costs of performing the services that Kothari
Pioneer is obligated to perform pursuant to this Agreement. The amounts
specified in Section 6 hereof will be Kothari Pioneer's sole compensation with
respect to the performance of such services. Kothari Pioneer will indemnify the
Manager for all liabilities and related costs, including reasonable attorney's
fees, which the Manager may sustain as a result of Kothari Pioneer's Malfeasance
or violation of Applicable Law, including without limitation the amount of any
payment made by the Manager to the Fund for the purpose of reimbursing the Fund
for a loss caused by Kothari Pioneer's Malfeasance or violation of Applicable
Law, regardless of whether or not the Manager was legally required to make such
payment to the Fund.
8. TERM AND RENEWAL. This Agreement shall become effective on the date
hereof and shall remain in force until December 31, 2001 and from year to
year thereafter, but only so long as its continuance is approved in accordance
with the requirements of the 1940 Act or an exemption therefrom, subject to the
right of the Fund, Kothari Pioneer and the Manager to terminate this Agreement
as provided in Section 9 hereof.
9. TERMINATION. Either party hereto may, without penalty, terminate this
Agreement by vote of its Board of Directors. In addition, the Fund may cause
this Agreement to terminate, without penalty, by vote of its Board of Trustees
or by vote of a "majority of its outstanding voting securities" (as defined in
the 0000 Xxx) and the giving of 60 days' written notice to the Manager and
Kothari Pioneer.
10. ASSIGNMENT. This Agreement will terminate automatically in the event
of its "assignment" (as defined in the 1940 Act).
11. INDEPENDENT CONTRACTOR STATUS. Kothari Pioneer is an independent
contractor and not an employee of the Manager or of the Fund for any
purpose. Unless otherwise expressly
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provided herein or otherwise authorized in writing, Kothari Pioneer will
have no authority to act for or represent the Fund or the Manager in any way or
otherwise be deemed to be an agent of the Fund or of the Manager. If any
occasion should arise in which Kothari Pioneer gives any advice to its clients
concerning the shares of the Fund, Kothari Pioneer will act solely as investment
counsel for such clients and not in any way on behalf of the Manager, the Fund
or any series thereof.
12. ENTIRE AGREEMENT. This Agreement states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
13. APPLICABLE LAW. This Agreement and all performance hereunder will be
governed by and construed in accordance with the laws of The Commonwealth of
Massachusetts. Kothari Pioneer consents to the jurisdiction of courts, both
state and federal, in Boston, Massachusetts with respect to any dispute under
this Agreement.
14. SAVINGS CLAUSE. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction will be ineffective, as to
such jurisdiction, to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
15. COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
16. CAPTIONS. Captions of sections have been added only for convenience
and will not be deemed to be a part of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and their seal to be hereto affixed
as of the day and year first above written.
ATTEST: PIONEER INVESTMENT MANAGEMENT, INC.
/s/ Xxxxxx X. Xxxxx, Sec. /s/ Xxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx Xxxxx X. Xxxxxxx
Secretary President
ATTEST: KOTHARI PIONEER AMC LTD.
/s/ X. Xxxxxx /s/ Xxxxx Xxxxx
Name: X. Xxxxxx Chief Executive
Title: Company Secretary
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