[EXECUTION COPY]
FINANCIAL WARRANTY AGREEMENT
among
PIONEER INVESTMENT MANAGEMENT, INC.
PIONEER PROTECTED PRINCIPAL PLUS FUND on behalf of its series,
PIONEER PROTECTED PRINCIPAL PLUS FUND
and
MAIN PLACE FUNDING, LLC
Dated as of October 29, 2002
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS.........................................................1
Section 1.1 General Definitions.........................................1
Section 1.2 Generic Terms..............................................10
ARTICLE II AMOUNT AND TERMS OF THE FINANCIAL WARRANTY........................10
Section 2.1 The Financial Warranty.....................................10
Section 2.2 Procedure for Issuance.....................................10
Section 2.3 Conditions Precedent to Effectiveness......................11
Section 2.4 Warranty Fee...............................................14
Section 2.5 Aggregate Shortfall Amount; Adjustment to
Protected Amount Per Share.................................14
Section 2.6 Certain Defined Terms......................................15
ARTICLE III MANAGEMENT OF THE FUND...........................................16
Section 3.1 General....................................................16
Section 3.2 Restrictions on Investments................................16
Section 3.3 Allocation and Reallocation of Fund's Assets...............18
Section 3.4 Reports; Access to Information.............................20
Section 3.5 Intent.....................................................21
ARTICLE IV TRIGGER EVENTS....................................................21
Section 4.1 Trigger Events.............................................21
Section 4.2 Defeasance Portfolio.......................................25
ARTICLE V INDEMNIFICATION....................................................26
Section 5.1 Survival...................................................26
Section 5.2 Indemnification............................................26
Section 5.3 Indemnification Procedure..................................28
ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................29
Section 6.1 Representations and Warranties of the Adviser..............29
Section 6.2 Representations and Warranties of the Fund.................30
Section 6.3 Representations and Warranties of the Warranty Provider....32
ARTICLE VII COVENANTS........................................................33
Section 7.1 Covenants of the Adviser...................................33
Section 7.2 Covenants of the Fund......................................35
Section 7.3 Covenants of the Warranty Provider.........................37
ARTICLE VIII FURTHER AGREEMENTS..............................................38
Section 8.1 Obligations Absolute.......................................38
Section 8.2 Participations and Assignments.............................38
Section 8.3 Fund Liability.............................................39
Section 8.4 Limitation of Liability of the Warranty Provider...........39
Section 8.5 Adviser Liability for Actions of Subadviser................39
Section 8.6 Fees and Expenses..........................................39
Section 8.7 Information................................................39
ARTICLE IX CONFIDENTIALITY...................................................40
Section 9.1 Confidentiality Obligations of the Warranty Provider.......40
Section 9.2 Trading Information and Other Information..................40
Section 9.3 Confidentiality Obligations of the Adviser and the Fund....41
ARTICLE X TERMINATION........................................................41
Section 10.1 Termination................................................41
ARTICLE XI MISCELLANEOUS.....................................................43
Section 11.1 Amendments and Waivers.....................................43
Section 11.2 Notices 43
Section 11.3 No Waiver, Remedies and Severability.......................44
Section 11.4 Payments 44
Section 11.5 Governing Law..............................................44
Section 11.6 Submission to Jurisdiction, Waiver of Jury Trial...........44
Section 11.7 Counterparts...............................................45
Section 11.8 Paragraph Headings.........................................45
Section 11.9 Reliance on Information....................................45
Section 11.10 Time of the Essence........................................45
Section 11.11 No Third-Party Rights......................................46
Section 11.12 Further Assurances.........................................46
Exhibit A Form of Financial Warranty
Exhibit B Form of Bank of America Corporation Guarantee
Schedule 1 Form of Daily Report
Annex A Form of opinion of Xxxx and Xxxx LLP
Annex B Form of opinion of Shearman & Sterling
Annex C Form of Irrevocable Instructions
FINANCIAL WARRANTY AGREEMENT
FINANCIAL WARRANTY AGREEMENT, dated as of October 29, 2002
(this "AGREEMENT"), among PIONEER INVESTMENT MANAGEMENT, INC., a corporation
organized under the laws of the State of Delaware (the "ADVISER"), PIONEER
PROTECTED PRINCIPAL PLUS FUND, a trust organized under the laws of the State of
Delaware (the "TRUST"), on behalf of its series, PIONEER PROTECTED PRINCIPAL
PLUS FUND, an open-end management investment company (the "FUND"), and MAIN
PLACE FUNDING, LLC (the "WARRANTY PROVIDER"), a limited liability company
organized under the laws of the State of Delaware and an indirect wholly owned
subsidiary of Bank of America Corporation (the "GUARANTOR").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Fund is an open-end diversified, management
investment company registered under the Investment Company Act of 1940, as
amended (the "INVESTMENT COMPANY ACT");
WHEREAS, the Fund has requested the Warranty Provider, and the
Warranty Provider has agreed, to issue a financial warranty in substantially the
form of EXHIBIT A (such financial warranty being the "FINANCIAL WARRANTY") in
the amount of up to $900 million in order to ensure that the Fund is able to
redeem all of its outstanding shares on the Maturity Date (as defined herein)
for an amount equal to the Aggregate Protected Amount (as defined herein);
WHEREAS, the Guarantor will guarantee the obligations of the
Warranty Provider under the Financial Warranty subject to the terms set forth in
this Agreement pursuant to a guarantee in substantially the form of EXHIBIT B
(the "BAC GUARANTEE"); and
WHEREAS, the parties hereto, among other things, desire to
specify the conditions precedent to the issuance by the Warranty Provider of the
Financial Warranty and the drawdown of the Aggregate Shortfall Amount (as
defined herein), the payment of the Warranty Fee (as defined herein) in respect
of the Financial Warranty, and to provide for certain other matters related
thereto.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 GENERAL DEFINITIONS. The terms defined in this Article I shall have
the meanings provided herein for all purposes of this Agreement, in both
singular and plural form, as appropriate.
"ACT OF INSOLVENCY" means, with respect to any party, (i) the
commencement by such party as debtor of any case or proceeding under any
bankruptcy, insolvency, reorganization, liquidation, dissolution or similar law,
or such party seeking the appointment of a receiver, trustee, custodian or
similar official for such party or any substantial part of its property; (ii)
the appointment of a receiver, conservator, or manager for such party by any
government agency or authority having the jurisdiction to do so; (iii) the
commencement of any such case or proceeding against such party, which (a) is
consented to or not timely contested by such party, (b) results in the entry of
an order for relief, such an appointment, the issuance of such a protective
decree or the entry of an order having a similar effect, or (c) is not dismissed
within 72 hours; (iv) the making or offering by such party of a composition with
its creditors or a general assignment for the benefit of creditors; (v) the
admission by such party of such party's inability to pay its debts or discharge
its obligations as they become due or mature; or (vi) any governmental authority
or agency or any person, agency or entity acting under governmental authority
shall have taken any action to condemn, seize or appropriate, or to assume
custody or control of, all or any substantial part of the property of such
party.
"ACTS" means the Investment Company Act and the Securities
Act.
"ADDITIONAL PV SHORTFALL" has the meaning provided in SECTION
4.1(D).
"ADJUSTED DISCOUNT FACTOR" has the meaning provided in SECTION
3.3(A).
"ADVERSE EFFECT" means, (i) in respect of the Adviser, a
material adverse effect upon (a) the ability of the Adviser to perform its
obligations under this Agreement or any other Transaction Document to which it
is a party, or (b) the rights of the Warranty Provider under the Transaction
Documents, (ii) in respect of the Trust or the Fund, a material adverse effect
upon (a) the ability of the Trust or the Fund to perform its obligations under
this Agreement or any other Transaction Document to which it is a party or (b)
the rights of the Warranty Provider under the Transaction Documents and (iii) in
respect of the Warranty Provider or the Guarantor, a material adverse effect
upon the ability of the Warranty Provider to perform its obligations under this
Agreement, the Guarantor to perform its obligations under the BAC Guarantee or
any other Transaction Document to which the Warranty Provider or the Guarantor
is a party. An adverse effect on the binding nature, validity or enforceability
of this Agreement or any other Transaction Documents shall constitute an Adverse
Effect. The determination of whether a particular set of circumstances would
reasonably be expected to have an Adverse Effect includes a determination of
both the likelihood of the occurrence of such set of circumstances and the
likelihood that such set of circumstances, if it were to occur, would result in
an Adverse Effect.
"ADVISER" has the meaning provided in the preamble.
"ADVISER CONDUCT" has the meaning provided in SECTION 4.1(D).
"AFFILIATE" means any Person directly or indirectly
controlling or controlled by or under common control with such Person or any
Subsidiary; PROVIDED, that for purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"AGGREGATE MARKET VALUE OF THE EQUITY PORTFOLIO" means at any
time of determination the sum of the Market Value at such time of all securities
that were reported to the Warranty Provider (or Calculation Agent) by the
Custodian in accordance with SECTIONS 3.4(C) and 8.7 to be included in the
Equity Portfolio as of the close of business on the immediately preceding
Exchange Business Day.
"AGGREGATE PROTECTED AMOUNT" has the meaning provided in
SECTION 2.6(A).
"AGGREGATE SHORTFALL AMOUNT" has the meaning provided in
SECTION 2.6(B).
"AGREEMENT" has the meaning provided in the preamble.
"BAC GUARANTEE" has the meaning provided in the recitals.
"BANK DEPOSITS" means any of the following having a maturity
of not more than 180 days: demand and time deposits in, certificates of deposit
of, and bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States of America or any state
thereof and subject to supervision and examination by federal and/or state
banking authorities so long as the commercial paper or debt obligations of such
depository institution or trust company (or, in the case of the principal
depository institution in a holding company system, the commercial paper or debt
obligations of such holding company) have a credit rating of at least "P-1" by
Moody's and at least "A-1" by S&P (or equivalent credit ratings if different
rating categories are used), in the case of commercial paper and short-term
obligations; PROVIDED, that the issuer thereof must also have at the time of
such investment a long-term credit rating of at least "Aa3" by Moody's or at
least "AA" by S&P (or equivalent credit ratings if different rating categories
are used).
"BBID SYSTEM" means the Xxxxx Brothers Information Display
System or any equivalent successor system acceptable to the Warranty Provider in
its reasonable discretion.
"BUSINESS DAY" means any day other than a day on which banks
located in the City of New York, New York are required or authorized by law to
close or on which the New York Stock Exchange and Nasdaq National Market are
closed for business.
"CALCULATION AGENT" means Banc of America Securities LLC.
"CASH" means legal tender of the United States.
"CASH EQUIVALENTS" means Bank Deposits, Commercial Paper,
Repurchase Agreements, and U.S. Government Securities (excluding U.S. Zeroes),
having a remaining maturity of 180 days or less.
"CLASS OF SHARES" means each class of shares of beneficial
interest of the Fund designated pursuant to the Declaration of Trust.
"COMMERCIAL PAPER" means commercial paper having a credit
rating of at least "P-1" by Moody's and at least "A-1" by S&P (or equivalent
credit ratings if different rating categories are used), either bearing interest
or sold at a discount from the face amount thereof, having a maturity of not
more than 180 days from the date of issuance, and issued by either (x) a
corporation incorporated under the laws of the United States of America or any
state thereof, or (y) any depository institution or trust company incorporated
under the laws of the United States of America or any state thereof and subject
to supervision and examination by federal and/or state banking authorities;
PROVIDED, that the issuer thereof must also have at the time of such investment
a long-term credit rating of at least "Aa3" by Moody's or at least "AA-" by S&P
(or equivalent credit ratings if different rating categories are used).
"COMMISSION" means the United States Securities and Exchange
Commission.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or any agreement, instrument or
other undertaking to which such Person is a party or by which it or any of its
property is bound.
"CORPORATE BONDS" means non-callable debt obligations of a
corporation having a rating of at least A- by S&P or A3 by Moody's (or
equivalent credit ratings if different rating categories are used); provided,
that if both Moody's and S&P have issued a rating thereon, such rating shall be
no less than A-/A3 (or equivalent credit ratings if different rating categories
are used).
"CURATIVE STEPS" has the meaning provided in SECTION 4.1(B).
"CUSHION" has the meaning provided in SECTION 3.3(A).
"CUSTODIAN" means Xxxxx Brothers Xxxxxxxx & Co., as Custodian
pursuant to the Custodian Agreement or any successor custodian of the Fund's
assets appointed by the Fund's Board of Trustees.
"CUSTODIAN AGREEMENT" means the Custodian Contract, dated as
of July 1, 2001, between the Custodian and the Pioneer Funds, as supplemented as
of September 3, 2002, to add the Fund as a party, as such contract may be
amended from time to time or any agreement providing for the custody of the
Fund's assets.
"DAILY REPORT" means a report in the form of the sample
attached as SCHEDULE 1 hereto.
"DECLARATION OF TRUST" means the Trust's Declaration of Trust,
dated as of October 2, 2001, as amended and in effect from time to time.
"DEFEASANCE PORTFOLIO" has the meaning provided in SECTION
4.2(A).
"DETERMINATION NOTICE" has the meaning provided in SECTION
4.1(D).
"EARLY CLOSE EXCHANGE BUSINESS DAY" has the meaning provided
in SECTION 4.1(A).
"EFFECTIVE DATE" means the date on which the conditions set
forth in SECTION 2.3(B) are satisfied.
"ELIGIBLE EQUITY INVESTMENTS" means common shares, preferred
shares, convertible debt securities, depository receipts, rights and warrants of
U.S. and non-U.S. issuers.
"ELIGIBLE FIXED-INCOME INVESTMENTS" means U.S. Government
Securities, Cash, Cash Equivalents and Corporate Bonds.
"EQUITY PORTFOLIO" means the portion of the Fund's assets
invested in Eligible Equity Investments at any time during the Protected Period,
including Cash and Cash Equivalents deemed allocated to the Equity Portfolio
pursuant to SECTION 3.2(A)(III).
"EQUITY PORTFOLIO VALUE" has the meaning provided in SECTION
3.3(B).
"EXCESS FEES" has the meaning provided in SECTION 2.6(C).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE BUSINESS DAY" means any day other than a day on
which the New York Stock Exchange and Nasdaq National Market are closed for
business.
"EXPENSE LIMITATION AGREEMENT" means the Expense Limitation
Agreement, dated as of the date hereof, between the Adviser and the Fund,
pursuant to which the Adviser has agreed to limit Fund Fees and Expenses until
the Maturity Date.
"EXTENDED CURE TIME" has the meaning provided in SECTION
4.1(A).
"EXTRAORDINARY EXPENSES" means all Fund Fees and Expenses that
are incurred or accrued by the Fund other than in its ordinary course of
business.
"FEE PAYMENT DATE" has the meaning provided in SECTION 2.4.
"FINANCIAL WARRANTY" has the meaning provided in the recitals.
"FINANCIAL WARRANTY AMOUNT LIMIT" has the meaning provided in
SECTION 2.1.
"FIXED-INCOME PORTFOLIO" means the portion of the Fund's
assets invested in Eligible Fixed-Income Investments at any time during the
Protected Period, but excluding any Cash and Cash Equivalents deemed allocated
to the Equity Portfolio pursuant to SECTION 3.2(A)(III).
"FUND" has the meaning provided in the preamble.
"FUND CONFIDENTIAL INFORMATION" has the meaning provided in
SECTION 9.1(A).
"FUND/ADVISER PARTIES" has the meaning provided in SECTION
5.2(C).
"FUND FEES AND EXPENSES" means all fees, costs, charges and
expenses incurred or accrued by the Fund, including, without limitation,
management fees, distribution fees, service fees, the Warranty Fee, Income
Taxes, and any other expense whether or not incurred in the ordinary course of
the Fund's business (including, without limitation, the cost of defending or
prosecuting any claim or litigation to which the Fund is a party, together with
any amount in judgment or settlement or indemnification expense incurred by the
Fund and any other non-recurring or non-operating expenses), but in all cases
excluding any Investment Related Expenses.
"FUND PORTFOLIO" has the meaning provided in SECTION 3.1.
"GOVERNMENT AUTHORITY" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions or
pertaining to government, including any self-regulatory organization.
"GUARANTOR" has the meaning provided in the preamble.
"INCEPTION DATE" means the second Business Day after the end
of the Offering Period.
"INCOME TAXES" means U.S. income or excise taxes that are
calculated on the net income or undistributed net income of the Fund.
"INDEMNIFIED PARTY" has the meaning provided in SECTION
5.3(A).
"INDEMNIFYING PARTY" has the meaning provided in SECTION
5.3(A).
"INVESTMENT ADVISERS ACT" means the Investment Advisers Act of
1940, as amended.
"INVESTMENT COMPANY ACT" has the meaning provided in the
recitals.
"INVESTMENT MANAGEMENT AGREEMENT" means the Management
Agreement, dated as of the date hereof, between the Fund and the Adviser.
"INVESTMENT RELATED EXPENSES" means interest, stamp, transfer
or other similar taxes, brokerage commissions, transaction fees and other
investment related costs.
"ISSUED FINANCIAL WARRANTY AMOUNT" has the meaning provided in
SECTION 2.2.
"LIEN" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, charge, lien or security interest (statutory
or other) of any kind or nature whatsoever.
"LITIGATION EVENT" means, with respect to the Adviser or the
Fund, as applicable, the submission of any claim or the commencement of any
proceedings by or against such party in any Federal, state or local court or
before any governmental body or agency, or before any arbitrator, or the
explicit threat of any such proceedings, which, if adversely determined, would
reasonably be expected to have an Adverse Effect with respect to such party.
"LOANS FOR TEMPORARY OR EMERGENCY PURPOSES" means loans that
are outstanding for not more than 60 days (and are not extended or renewed) in
an aggregate amount not exceeding five percent of the value of the total assets
of the Fund at the time the loans are borrowed, in conformity with Section 18(g)
of the Investment Company Act.
"LOSSES" has the meaning provided in SECTION 5.2(A).
"MARKET VALUE" means the value of any security determined in
accordance with the Fund's valuation procedures used to determine the value of
its Net Assets; PROVIDED, HOWEVER, that in the case of intraday valuation,
Market Value shall be determined by the Calculation Agent based on current
market prices, to the extent available (or if not available, based on the last
quoted market price).
"MATURITY DATE" means the date that is seven years after the
Inception Date, but if that date is not an Exchange Business Day or is an Early
Close Exchange Business Day, the Maturity Date shall be the first Exchange
Business Day thereafter that is not an Early Close Exchange Business Day.
"MAXIMUM EQUITY COMPONENT" has the meaning given in SECTION
3.3(A).
"MINIMUM RETURN FACTOR" has the meaning provided in SECTION
2.6(D).
"MODIFIED DURATION" means, with respect to any Corporate Bond
or U.S. Government Security, the quotient of (a) the weighted average term to
maturity of the cash flows generated by such security divided by (b) the sum of
(i) one plus (ii) the quotient of (A) the yield to maturity of such security
divided by (B) the number of interest payments on such security per year. For
the purposes of this calculation, the number of interest payments on any
non-interest bearing Corporate Bonds or U.S. Zeroes is assumed to be two per
year. With respect to a portfolio of Eligible Fixed-Income Investments, Modified
Duration means an amount equal to the average of the Modified Duration of each
such Eligible Fixed-Income Investment, weighted on the basis of the Market
Values thereof.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"NAV PER SHARE" has the meaning provided in SECTION 2.6(E).
"NET ASSETS" means the total assets of the Fund minus its
liabilities at the time of determination.
"NOTICE" has the meaning provided in SECTION 5.3(A).
"NYSE" means the New York Stock Exchange, Inc.
"OBJECTION NOTICE" has the meaning provided in SECTION 4.1(D).
"OFFERING PERIOD" means the initial period during which the
Shares of the Fund will be offered for sale to investors as described in the
Prospectus. The Offering Period may not be extended beyond December 31, 2002
without the prior written consent of the Warranty Provider.
"OTHER INFORMATION" has the meaning provided in SECTION 9.1.
"PERMANENT DEFEASANCE DATE" is the date on which a Permanent
Defeasance Event occurs in accordance with SECTION 4.1(C).
"PERMANENT DEFEASANCE EVENT" has the meaning provided in
SECTION 4.1(C).
"PERMITTED RECIPIENTS" has the meaning provided in SECTION
9.2(A).
"PERSON" means a natural person, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, limited
liability company, joint venture, Government Authority or other entity of
whatever nature.
"PORTFOLIO REQUIREMENTS" has the meaning provided in SECTION
3.1.
"PROSPECTUS" means for any Class of Shares, the prospectus and
statement of additional information pursuant to which the shares of such Class
of Shares were offered for sale, as the same may be updated and in effect from
time to time.
"PROTECTED AMOUNT PER SHARE" has the meaning provided in
SECTION 2.6(F).
"PROTECTED PERIOD" means the period commencing on and
including the Inception Date to and including the Maturity Date.
"PV" has the meaning provided in SECTION 3.3(A).
"PV SHORTFALL," with respect to each Class of Shares, means
the Shares Outstanding for such Class of Shares multiplied by the difference of
the NAV Per Share minus PV, if a negative number.
"REGISTRATION STATEMENT" has the meaning provided in SECTION
2.3(B)(V).
"REGULATORY CHANGE" means with respect to the Adviser or the
Fund, as the case may be, any change in any law, regulation or rule, or
interpretation thereof, by a Governmental Authority with respect to any statute
to which such party is subject (including, as applicable, the Investment Company
Act and the Investment Advisers Act and federal banking laws) which has resulted
in or would be reasonably expected to result in an Adverse Effect with respect
to such party.
"REGULATORY EVENT" means with respect to the Adviser or the
Fund, as the case may be, any governmental or regulatory action that limits,
suspends, or terminates the rights, privileges or operation of such party, which
has resulted in or would be reasonably expected to result in an Adverse Effect
with respect to such party.
"REPURCHASE AGREEMENTS" means unleveraged repurchase
obligations, with maturities of not more than seven (7) days, with respect to
any U.S. Government Security entered into with a depository institution or trust
company (acting as principal) that satisfies the criteria set forth in the
definition of Bank Deposits or entered into with a broker-dealer (acting as
principal) incorporated under the laws of the United States of America or any
state thereof whose obligations are rated at least "P-1" by Moody's and at least
"A-1" by S&P (or equivalent credit ratings if different rating categories are
used), in the case of short-term obligations or, in the case of long-term
obligations, at least "Aa2" by Moody's and at least "AA" by S&P (or equivalent
credit ratings if different rating categories are used).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and
by-laws or other organizational or governing document of such Person, and any
law, treaty, rule, or regulation or determination of an arbitrator or a court or
other Government Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERVICE AGREEMENT" means the Service Agreement, dated as of
October 29, 2002, among the Custodian, the Adviser, the Fund and the Warranty
Provider, as such agreement may be amended from time to time.
"SHAREHOLDERS" means the shareholders of the Fund.
"SHARES" means shares of beneficial interest of any class of
the Fund.
"SHARES OUTSTANDING" means on any day of determination, the
number of issued and outstanding shares with respect to a Class of Shares,
excluding any Shares issued in violation of SECTION 3.1.
"SHORTFALL AMOUNT" has the meaning provided in SECTION 2.6(G).
"S&P" means Standard & Poor's Ratings Services, a Division of
The XxXxxx-Xxxx Companies, Inc.
"SPX" means the S&P 500 Index or other successor Index as
determined by the Calculation Agent.
"SUBSIDIARY" means with respect to any Person, any
corporation, association or other business entity of which securities
representing 50% or more of the combined voting power of the total capital stock
(or in the case of an association or other business entity which is not a
corporation, 50% or more of the equity interest) is at the time owned or
controlled, directly or indirectly, by that Person or one or more Subsidiaries
of that Person or a combination thereof.
"TERMINATION DATE" has the meaning provided in SECTION
10.1(A).
"TOTAL NAV" has the meaning provided in SECTION 2.6(H).
"TRADE DATE" has the meaning provided in SECTION 3.4(C).
"TRADING INFORMATION" has the meaning provided in SECTION 9.1.
"TRANSACTION DOCUMENTS" means this Agreement, the Financial
Warranty, the BAC Guarantee, the Investment Management Agreement, the Custodian
Agreement, the Service Agreement, the Expense Limitation Agreement and the
Prospectus relating to each Class of Shares, as each may be amended,
supplemented or otherwise modified from time to time.
"TRANSITION DATE" means the Business Day after the end of the
Offering Period.
"TRIGGER EVENT" means each event set forth in SECTION 4.1(A).
"TRUST" has the meaning provided in the preamble.
"U.S. GOVERNMENT SECURITIES" means non-callable general
obligations of (i) the United States Treasury backed by the full faith and
credit of the United States of America or (ii) of any one of the following
agencies of the Federal Government of the United States of America: Federal
National Mortgage Association, Federal Home Loan Mortgage Corporation, Federal
Home Loan Bank, Resolution Funding Corporation, Financing Corporation and
Tennessee Valley Authority, excluding in the case of clause (ii) any such
obligations that are rated less than AAA by S&P or less than Aaa by Moody's.
U.S. Government Securities shall include Separate Trading of Registered Interest
and Principal of Securities (STRIPS), Certificates of Accrual on Treasury
Securities (CATS), Treasury Investment Growth Receipts (TIGRs), and Generic
Treasury Receipts (TRs).
"U.S. ZEROES" means U.S. Government Securities that are
non-interest bearing.
"WARRANTY FEE" has the meaning provided in SECTION 2.4.
"WARRANTY PROVIDER" has the meaning provided in the preamble.
"WARRANTY PROVIDER CONFIDENTIAL INFORMATION" has the meaning
provided in SECTION 9.3(A).
"WARRANTY PROVIDER PARTIES" has the meaning provided in
SECTION 5.2(A).
Section 1.2 GENERIC TERMS. All words used herein shall be construed to be of
such gender or number as the circumstances require. The words "herein,"
"hereby," "hereof" and "hereto," and words of similar import, refer to this
Agreement in its entirety and not to any particular paragraph, clause or other
subdivision, unless otherwise specified, and Section and Exhibit references are
to this Agreement unless otherwise specified.
ARTICLE II
AMOUNT AND TERMS OF THE FINANCIAL WARRANTY
Section 2.1 THE FINANCIAL WARRANTY. The Warranty Provider agrees to issue the
Financial Warranty, subject to the conditions set forth herein, on the Inception
Date, in an amount not to exceed $900 million (the "FINANCIAL WARRANTY AMOUNT
LIMIT").
Section 2.2 PROCEDURE FOR ISSUANCE. Not later than three Business Days prior to
the last day of the Offering Period, the Fund shall deliver to the Warranty
Provider a notice specifying the expected Inception Date and the projected
amount of the Financial Warranty (which shall be in the amount of the Aggregate
Protected Amount as of the close of business on the Transition Date and shall
not exceed the Financial Warranty Amount Limit). Prior to 11:00 a.m. (Eastern
time) on the Inception Date, the Fund shall deliver to the Warranty Provider a
notice showing the following, in each case as of the close of business on the
Transition Date: (i) the NAV Per Share for each Class of Shares, and (ii) the
Shares Outstanding of each Class of Shares. The notice also shall certify that
the conditions precedent in SECTIONS 2.3(B)(I) through and including (VI) and
2.3(C) have been satisfied. Upon receipt of such notice and the fulfillment of
the applicable conditions set forth in SECTION 2.3 hereof, the Warranty Provider
will issue the Financial Warranty to the Fund in the amount specified in the
parenthetical in the first sentence of this SECTION 2.2 (the "ISSUED FINANCIAL
WARRANTY AMOUNT"). The Warranty Provider shall not incur any obligation or
liability hereunder or under any transaction contemplated by any other
Transaction Document during the Offering Period.
Section 2.3 CONDITIONS PRECEDENT TO EFFECTIVENESS
(a) ARTICLE V and SECTION 8.6 shall be effective immediately
upon the execution of this Agreement unless (i) the Warranty Provider does not
agree to execute the Service Agreement, (ii) the Registration Statement is not
declared effective by the Commission by November 15, 2002 or (iii) the Guarantor
has not executed the BAC Guarantee.
(b) Subject to SECTION 2.3(C), the effectiveness of all other provisions of this
Agreement (other than ARTICLE V and SECTION 8.6) is subject to the satisfaction
of the following conditions:
(i) Each Transaction Document (other than the Prospectus) shall be duly
authorized, executed and delivered by each of the parties thereto and
be in full force and effect and executed counterparts of each such
Transaction Document shall have been delivered to the Warranty
Provider.
(ii) The Service Agreement shall provide that the Custodian will agree to
(A) receive and comply with instructions from the Warranty Provider in
accordance with SECTIONS 4.1(C) and 4.2(A) and (B) provide to the
Warranty Provider electronically in a format acceptable to the Warranty
Provider the records and access to the BBID System required by SECTIONS
3.4(C) and (D), respectively.
(iii) The Warranty Provider shall have received (A) a certificate of the
Secretary or Assistant Secretary of the Adviser, dated as of the
Effective Date, as to the incumbency and signature of the officers or
other employees of the Adviser authorized to sign this Agreement and
all other Transaction Documents to which the Adviser is a party, in
each case on behalf of the Adviser and certifying that attached thereto
are true, complete and correct copies of its constituent documents and
resolutions duly adopted by the Adviser authorizing the execution and
delivery of this Agreement and such other Transaction Documents, which
resolutions have not been modified, amended or rescinded in any
respect, are in full force and effect on the Effective Date and
constitute the most recent resolutions of the Board of Directors of the
Adviser relating to the transactions contemplated hereby and thereby,
and (B) a good standing certificate from the Secretary of State of the
State of Delaware regarding the Adviser.
(iv) The Warranty Provider shall have received (A) a certificate of the
Secretary or Assistant Secretary of the Fund, dated as of the Effective
Date, as to the incumbency and signature of the officers or other
employees of the Fund authorized to sign this Agreement and the other
Transaction Documents to which the Fund is a party, in each case on
behalf of the Fund, and certifying that attached thereto are true,
complete and correct copies of its resolutions duly adopted by the
Board of Trustees of the Fund authorizing the execution and delivery of
this Agreement and such other Transaction Documents, which resolutions
have not been modified, amended or rescinded in any respect, are in
full force and effect on the Effective Date and constitute the most
recent resolutions of the Board of Trustees of the Fund relating to the
transactions contemplated hereby and thereby, (B) a copy of the
Declaration of Trust as amended and in effect on the Effective Date
certified as of a recent date by the Secretary or Assistant Secretary
of the Fund, and (C) a copy of the Certificate of Trust (including all
amendments thereto) certified as of a recent date by the Secretary of
State of the State of Delaware.
(v) The Warranty Provider shall have received a certificate of the
Secretary, Assistant Secretary, Treasurer or Assistant Treasurer of the
Fund, dated as of the Effective Date, certifying that (A) the Fund's
registration statement on Form N-1A with respect to each Class of
Shares of the Fund (1) has been prepared by the Fund in conformity with
the requirements of the Acts and the rules and regulations of the
Commission thereunder, and (2) has been filed with the Commission under
the Acts, (B) the registration statement (or the most recent amendment
thereto) has been declared effective by the Commission, (C) true and
complete copies of such registration statement on Form N-1A as
amended and in effect on the Effective Date are attached thereto (such
registration statement, as it may be amended from time to time, the
"REGISTRATION STATEMENT"), excluding any exhibits thereto, (D) the
Commission has not issued any order preventing or suspending the use
of any prospectus relating to any Class of Shares and the Fund has not
received any notice from the Commission pursuant to Section 8(e) of the
Investment Company Act with respect to the Registration Statement, (E)
the Registration Statement and the Prospectus with respect to each
Class of Shares of the Fund contain all statements which are required
by the Acts and the rules and regulations thereunder, (F) the
Registration Statement and the Prospectus with respect to each Class of
Shares of the Fund do not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (PROVIDED,
that such certification shall not be required to address any
information regarding the Warranty Provider that has been provided by
the Warranty Provider in writing for inclusion in or to be incorporated
by reference into the Registration Statement), and (G) the shares of
each Class of Shares of the Fund conform in all material respects to
the description thereof contained in the Registration Statement and
Prospectus with respect to such Class of Shares.
(vi) The Warranty Provider shall have received the opinion of Xxxx and Xxxx
LLP, counsel to the Fund and the Adviser, in the form attached hereto
as ANNEX A.
(vii) All Transaction Documents and proceedings, documents, instruments and
other legal matters in connection with the transactions contemplated by
this Agreement and the other Transaction Documents shall be
satisfactory in form and substance to the Warranty Provider, and the
Warranty Provider shall have received such other documents in respect
of any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
(viii) The Adviser and the Fund shall have received the opinion of Shearman &
Sterling, counsel to the Warranty Provider, in the form attached hereto
as ANNEX B.
(ix) The Adviser and the Fund shall have received a certificate of the
Secretary or Assistant Secretary of the Warranty Provider, dated as of
the Effective Date, as to the incumbency and signature of the officers
or employees of the Warranty Provider authorized to sign this Agreement
on behalf of the Warranty Provider.
(x) The Registration Statement shall have been declared effective by the
Commission.
(xi) The Warranty Provider shall have delivered the BAC Guarantee.
(c) The obligation of the Warranty Provider to issue the Financial Warranty is
subject to the satisfaction of the following conditions on the Inception Date:
(i) Each of the representations and warranties made by the Adviser and the
Fund in this Agreement shall be true and correct in all material
respects on and as of such date, and the Warranty Provider shall have
received a certification from each of the Adviser and the Fund to such
effect as to the representations and warranties made by it.
(ii) The Warranty Provider shall have received "bringdowns" of the
certificates and other matters referenced in SECTIONS 2.3(B)(III), (IV)
and (V) and of the opinion referenced in SECTION 2.3(B)(VI) through the
Inception Date.
(iii) No Trigger Event shall have occurred.
(iv) No statute, rule, regulation or order shall have been enacted, entered
or deemed applicable by any Government Authority which would make the
transactions contemplated by any of the Transaction Documents illegal
or otherwise prevent the consummation thereof.
(v) No suit, action or other proceeding, investigation, or injunction or
final judgment relating thereto, shall be pending or threatened before
any court or governmental agency in which it is sought to restrain or
prohibit or to obtain damages or other relief in connection with any of
the Transaction Documents.
(vi) There shall not have been an Adverse Effect with respect to the Adviser
or the Fund since the date of this Agreement.
(vii) On the Inception Date, the Aggregate Protected Amount shall not exceed
the Financial Warranty Amount Limit. If, during the Offering Period,
the Fund expects to receive subscriptions for its Shares, which could
result in the Aggregate Protected Amount exceeding the Financial
Warranty Amount Limit as of the close of business on the Transition
Date, then the Fund shall consult with the Warranty Provider. If the
Warranty Provider agrees to increase the Financial Warranty Amount
Limit in its sole discretion, this Agreement will be amended
accordingly.
(viii) A copy of the Prospectus with respect to each Class of Shares of the
Fund shall have been delivered to the Warranty Provider.
(ix) The parties shall have provided the notice procedures contemplated by
SECTION 11.2(B), if applicable.
(x) This Agreement shall not have been terminated in accordance with
ARTICLE X.
Section 2.4 WARRANTY FEE. In consideration of the issuance by the Warranty
Provider of the Financial Warranty, the Fund shall pay to the Warranty Provider
a fee in an amount equal to 0.85% per annum of the average daily net assets of
the Fund during each calendar month in the Protected Period (the "WARRANTY
FEE"), payable monthly in arrears on the fifth Business Day of the following
calendar month (each a "FEE PAYMENT DATE"). The Warranty Fee payable on each Fee
Payment Date will be calculated based on a 365 or 366 day year for the actual
number of days elapsed. The obligation to pay the Warranty Fee that has accrued
hereunder shall survive termination of this Agreement to the extent not paid in
full prior to such termination.
Section 2.5 AGGREGATE SHORTFALL AMOUNT; ADJUSTMENT TO PROTECTED AMOUNT PER
SHARE
(a) Unless this Agreement shall have been terminated in accordance with ARTICLE
X prior to such time, for ten Business Days commencing on the second Business
Day after the Maturity Date, the Fund shall be entitled to draw upon the
Financial Warranty in an amount equal to the Aggregate Shortfall Amount, if any.
The calculation and accuracy of the Aggregate Shortfall Amount determined
hereunder shall be certified by the Calculation Agent on the first Business Day
following the Maturity Date. The Calculation Agent shall determine such
Aggregate Shortfall Amount in a good faith commercially reasonable manner and
provide such certification within three Business Days following the Maturity
Date.
(b) The Protected Amount Per Share with respect to each Class of Shares shall be
reduced as follows:
(i) Dividends and distributions attributable to each Share of a Class of
Shares will reduce the Protected Amount Per Share of such Class on a
pro rata basis to an amount equal to the product of (a) the Protected
Amount Per Share for such Class immediately prior to such dividend or
distribution and (b) a fraction, the numerator of which shall be the
NAV Per Share for such Class immediately after such dividend or
distribution and the denominator of which shall be the NAV Per Share
for such Class immediately prior to such dividend or distribution;
(ii) Excess Fees attributable to each Share of a Class of Shares shall
reduce the Protected Amount Per Share to an amount equal to the product
of (a) the Protected Amount Per Share for such Class immediately prior
to the time that such Excess Fees are accrued with respect to such
Class and (b) a fraction, the numerator of which shall be the NAV Per
Share for such Class immediately after such Excess Fees are accrued and
the denominator of which shall be the NAV Per Share for such Class
immediately prior to the time that such Excess Fees are accrued;
(iii) Shares of a Class that are issued during the Protected Period in
violation of SECTION 3.1 shall not be included in the Shares
Outstanding of such Class; and
(iv) In the event of changes in accounting practices for the Fund from those
used on the Transition Date, corporate actions or other events that
otherwise would result in an increase in the Protected Amount Per Share
with respect to a Class of Shares, appropriate adjustments shall be
made by the Warranty Provider (or Calculation Agent) to the Protected
Amount Per Share for such Class or the way such Protected Amount Per
Share is calculated to the extent necessary to preserve the economic
equivalent of this Agreement and the Financial Warranty. The Fund
agrees that no such changes, actions or events may be made or taken by
the Fund or Adviser without the prior written consent of the Warranty
Provider.
Section 2.6 CERTAIN DEFINED TERMS
(a) "AGGREGATE PROTECTED AMOUNT" means the sum of the products, for each of
Class A, Class B and Class C Shares, of the Protected Amount Per Share for each
such Class of Shares and the Shares Outstanding of such Class.
(b) "AGGREGATE SHORTFALL AMOUNT" means the sum of the Shortfall Amount, if any,
of each of Class A, Class B and Class C Shares, which shall never exceed the
Aggregate Protected Amount as of the close of business on the Transition Date.
(c) "EXCESS FEES" means (i) on or prior to the occurrence of a Permanent
Defeasance Event, any Extraordinary Expense incurred or accrued by the Fund
which would give rise, directly or indirectly, to a PV Shortfall or increase,
directly or indirectly, an existing PV Shortfall, but for the adjustment
required under Section 2.5(b)(ii), and (ii) following the occurrence of a
Permanent Defeasance Event, any Fund Fees and Expenses incurred or accrued by
the Fund that exceed 1.65% per annum of the average daily Net Assets of the Fund
for the Class A Shares, 2.40% per annum of the average daily Net Assets of the
Fund for the Class B Shares and 2.40% per annum of the average daily Net Assets
of the Fund for the Class C Shares.
(d) "MINIMUM RETURN FACTOR" means 1.1487 with respect to Class A Shares of the
Fund and 1.0909 with respect to each of Class B and Class C Shares of the Fund.
(e) "NAV PER SHARE" means with respect to each Class of Shares on a per share
basis at the time of determination, the published net asset value per Share for
such Class.
(f) "PROTECTED AMOUNT PER SHARE" at any time on any day and with respect to each
Class of Shares on a per share basis means the product of (i) the NAV Per Share
of such Class of Shares as of the close of business on the Transition Date and
(ii) the Minimum Return Factor for such Class, as such product is adjusted
pursuant to SECTION 2.5 as of such time.
(g) "SHORTFALL AMOUNT" with respect to each Class of Shares is deemed to be the
Shares Outstanding of such Class of Shares multiplied by the difference, if
positive, between the Protected Amount Per Share as determined as of the close
of business on the Maturity Date for such Class in accordance with SECTION
2.6(F) and the NAV Per Share as of the close of business on the Maturity Date
for such Class.
(h) "TOTAL NAV" means the sum of the products, for each of Class A, Class B and
Class C Shares at the time of determination, of the NAV Per Share for each such
Class of Shares and the Shares Outstanding of such Class at such time.
ARTICLE III
MANAGEMENT OF THE FUND
Section 3.1 GENERAL. During the Protected Period, the Fund shall not issue
additional Shares (including through an exchange of Shares or in connection with
any merger, reorganization, acquisition or other similar transaction), except in
connection with the reinvestment of dividends and distributions by the Fund to
its Shareholders in respect of the Shares or the transfer of Shares that does
not result in an increase in the Shares that are issued and outstanding.
Commencing on the Inception Date, all of the Fund's assets shall be allocated
between the Equity Portfolio and Fixed-Income Portfolio (collectively, the "FUND
PORTFOLIO") and such assets shall be invested and reinvested in accordance with
the provisions set forth in this ARTICLE III (collectively, the "PORTFOLIO
REQUIREMENTS"). The Adviser shall fairly and objectively interpret the Portfolio
Requirements, consistent with the intent thereof. The Adviser shall consult with
the Warranty Provider as to any requirement contained herein which, in the
Adviser's reasonable opinion is not clear, including without limitation the
permissibility or classification of any investment (including any types of
investment that may be used in the market during the term of this Agreement that
were not widely used as of the date hereof), the valuation methodology
applicable thereto, and the methodology used to calculate and report to the
Warranty Provider compliance with the Portfolio Requirements.
Section 3.2 RESTRICTIONS ON INVESTMENTS
(a) During the Protected Period, the Fund Portfolio shall be subject to the
following Portfolio Requirements, as determined as of the close of business on
each Exchange Business Day and with respect to subsection (i) below, as
determined as of any time on any Exchange Business Day:
(i) subject to this ARTICLE III, the Fund's assets may be invested only in
Eligible Equity Investments and Eligible Fixed-Income Investments;
(ii) the portion of the Fund's assets allocated to the Equity Portfolio,
calculated as a percentage, shall not exceed the Maximum Equity
Component as of the close of business on any Exchange Business Day and
shall be zero in the event of a Permanent Defeasance Event;
(iii) any Cash and Cash Equivalents held by the Fund during the Protected
Period (in the absence of a Permanent Defeasance Event), shall be
considered allocated to the Fixed-Income Portfolio to the extent that
such investments constitute up to 5% of the Fund's assets on any
Exchange Business Day and any portion, if any, in excess of such 5%
shall be considered allocated to the Equity Portfolio;
(iv) the portion of the Fixed-Income Portfolio invested in U.S. Government
Securities, calculated as a percentage, shall be 100% (exclusive of any
Cash and Cash Equivalents); PROVIDED, that the Warranty Provider may in
its sole discretion at any time, and upon notice to the Adviser, impose
a different percentage or percentage range limitation on the investment
in U.S. Government Securities under this SECTION 3.2(A)(IV);
(v) the portion of U.S. Government Securities included as part of the
Fixed-Income Portfolio that is invested in U.S. Zeroes, calculated as a
percentage, shall be 100%; PROVIDED, that the Warranty Provider may in
its sole discretion at any time, and upon notice to the Adviser, impose
a different percentage or percentage range limitation on the investment
in U.S. Zeroes under this SECTION 3.2(A)(V);
(vi) the Equity Portfolio will be managed in a manner substantially similar
to the manner in which the equity securities of Pioneer Fund are
managed at the time the Registration Statement is declared effective;
no more than 5% of the Equity Portfolio will be invested in the
securities of a single issuer and no more than 25% of the Equity
Portfolio will be invested in equity securities of issuers in the same
industry (using a mutually agreed upon independent third party source
for identifying industries).
(vii) all Cash Equivalents and U.S. Zeroes shall mature no later than one
month after the Maturity Date;
(viii) all U.S. Government Securities shall mature no earlier than six months
prior to the Maturity Date;
(ix) the Fixed-Income Portfolio (excluding Cash and Cash Equivalents), in
the aggregate, shall have a Modified Duration equal to the period from
the date of determination to the Maturity Date plus or minus three
months;
(x) the weighted average rating by S&P (determined at the time of
acquisition) of any portion of the Fixed-Income Portfolio allocated to
Corporate Bonds, if any, shall be at least A+ (or equivalent credit
rating if different rating categories are used); and
(xi) to the extent that any portion of the Fixed-Income Portfolio is
allocated to Corporate Bonds, such investments shall be limited so that
the Corporate Bonds of a single issuer do not represent more than 5% of
the assets of the Fund allocated to the Fixed-Income Portfolio.
Section 3.3 ALLOCATION AND REALLOCATION OF FUND'S ASSETS
(a) The "Maximum Equity Component" on any Exchange Business Day, as a percentage
of the Fund's Total NAV, means the smallest Equity Limit for a Class of Shares,
determined in accordance with the formula set forth below:
Equity Limit
for a Class
of Shares = ((NAV Per Share - PV)/NAV Per Share)/Cushion, in each case
with respect to that Class (or zero in the event that the
Equity Limit for a Class of Shares is less than 0.05;
PROVIDED, that the Equity Limit for a Class of Shares shall
not exceed 100% at any time);
where,
NAV Per Share has the meaning set forth in SECTION 2.6(E);
PV = the product of (i) the Adjusted Discount Factor and (ii)
the Protected Amount Per Share, in each case with respect to
the relevant Class;
where,
Adjusted
Discount
Factor = with respect to each Class of Shares, means the following
quotient as determined by the Calculation Agent in a
commercially reasonable manner and communicated to the Adviser
prior to 4:00 p.m. (Eastern time) on each Exchange Business
Day (and if not so communicated, the Adjusted Discount Factor
last communicated to the Adviser by the Calculation Agent):
(i) the present value discount factor representing the
theoretical price, expressed as a percentage of par, of a
theoretical zero coupon bond maturing on the Maturity Date,
the yield of which is consistent with USD LIBOR and USD swap
rates as of the date of determination and (ii) an amount,
based on the Fee Factor of the relevant Class and the time (in
years) remaining to the Maturity Date, determined by the
Calculation Agent as follows:
( Fee Factor)^365 x 1
(1 - ----------)
( 365 )
Fee Factor = 0.0165 for the Class A Shares, 0.024 for the Class B Shares
and 0.024 for the Class C Shares;
Cushion = 0.225, as adjusted pursuant to SECTIONS 3.3(C), 3.4(D) AND
4.1(C);
t = the time, in years, remaining until the Maturity Date.
(b) The Adviser shall calculate the net asset value attributable to the Equity
Portfolio as of the close of business on each Exchange Business Day in the
manner described in the Prospectus and in accordance with the Investment Company
Act (the "EQUITY PORTFOLIO VALUE") and the Maximum Equity Component as of the
close of business on each Exchange Business Day; PROVIDED, that such
determination of the Maximum Equity Component shall be subject to review and
confirmation by the Warranty Provider in its sole discretion. If the Equity
Portfolio, as a percentage of Total NAV, exceeds the Maximum Equity Component
determined in accordance with SECTION 3.3(A) as of the close of business on any
Exchange Business Day, then during the immediately succeeding Exchange Business
Day the Adviser must sell assets and reallocate a portion of the Fund's assets
from the Equity Portfolio to the Fixed-Income Portfolio such that the allocation
to the Equity Portfolio is less than or equal to the Maximum Equity Component.
In the event of a violation of SECTION 3.2(A)(I), then within the cure period
provided in SECTION 4.1(A)(II), the Adviser must sell assets and reallocate the
Fund's assets to the extent necessary so that the Fund Portfolio does not
include investments other than Eligible Equity Investments and Eligible
Fixed-Income Investments and the Equity Portfolio is less than or equal to the
Maximum Equity Component. It is the intention of the parties that the formula in
SECTION 3.3(A) results in the Fund's Net Assets being allocated such that the
Equity Portfolio may withstand a percentage decline equal to the Cushion and
still provide for payment in full of the Aggregate Protected Amount on the
Maturity Date; PROVIDED, HOWEVER, that the obligation of the Fund and the
Adviser shall be to manage the Fund Portfolio in accordance with the terms of
this Agreement.
(c) Notwithstanding any of the foregoing, if as determined by the Calculation
Agent in its sole discretion at any time on any Exchange Business Day either the
SPX or the Aggregate Market Value of the Equity Portfolio declines 10% or more
from the level or value thereof as of the close of business on the prior
Exchange Business Day, then the Warranty Provider may, upon notice to the
Adviser and in its sole discretion, adjust the Cushion. Such notification shall
be provided by either the Warranty Provider or the Calculation Agent and shall
specify the adjusted Cushion and the Maximum Equity Component recalculated using
such adjusted Cushion as determined by the Calculation Agent in its sole
discretion. The Adviser shall upon receipt of such notification and as soon as
practicable sell assets and reallocate the Fund Portfolio to the extent
necessary so that the Equity Portfolio, as a percentage of the Total NAV, is
less than or equal to the Maximum Equity Component provided by the Calculation
Agent in such notification, it being agreed that such rebalancing shall be
completed by the close of business on the Exchange Business Day on which such
notification is given if the notification is received by the Adviser at or
before 1:00 p.m. (Eastern time) (PROVIDED, that should the Adviser fail to
complete such rebalancing within such time, it shall have taken steps, including
being actively engaged in the sale of portfolio securities, to achieve such
rebalancing within such time) or by the end of the next succeeding Exchange
Business Day if the Adviser receives such notification after 1:00 p.m. (Eastern
time). The Cushion shall remain as so adjusted until there have been ten
consecutive Exchange Business Days without an intraday increase or decrease of
4% or more of the SPX, after which the Cushion shall be adjusted to 0.30, or
such lower number as determined by the Warranty Provider in its sole discretion.
(d) If at any time during the Protected Period the allocation to the Equity
Portfolio exceeds the Maximum Equity Component, the Adviser shall cause the Fund
to not acquire any additional Eligible Equity Investments until after the
allocation to the Equity Portfolio has been reduced to below the Maximum Equity
Component.
(e) Notwithstanding any other provision hereof, if the Warranty Provider
determines in its sole discretion that the Fund is not complying with any
Portfolio Requirement, the Warranty Provider shall have the right to notify the
Adviser of such violation and direct the Adviser to promptly take such action as
the Warranty Provider shall determine in its sole discretion to be necessary to
cause the Fund to comply with the Portfolio Requirements (it being understood
that the Warranty Provider shall not be entitled to direct the Adviser to sell
any specific equity security unless such equity security is not an Eligible
Equity Investment).
Section 3.4 REPORTS; ACCESS TO INFORMATION
(a) No later than 9:00 a.m. (Eastern time) on each Exchange Business Day, the
Adviser shall transmit to the Warranty Provider the Daily Report for such date
reflecting the calculations performed by the Adviser for the prior Exchange
Business Day in accordance with SECTION 3.3(B). Such Daily Report shall specify
whether any portion of the Total NAV has been determined pursuant to fair value
pricing, identifying the particular portfolio security or securities that were
valued using fair value pricing and the procedures used to make such
determination.
(b) If on any Exchange Business Day the Adviser shall fail to reallocate the
Fund Portfolio in accordance with SECTION 3.3(B), the Adviser shall provide the
Warranty Provider with written notice of such failure prior to 9:00 a.m.
(Eastern time) on the following Exchange Business Day and, if applicable,
written notice of the cure of such failure.
(c) The Adviser shall cause the Custodian to provide to the Warranty Provider
electronically in a format reasonably acceptable to the Warranty Provider not
later than 9:00 a.m. (Eastern time) on each Exchange Business Day (i) a copy of
the records it maintains with respect to the assets of the Fund as of the close
of business on the prior Exchange Business Day and (ii) a list of all of the
Fund's trades during such prior Exchange Business Day (such Exchange Business
Day, a "TRADE DATE").
(d) The Adviser shall arrange for the Warranty Provider to be able to
continuously view and monitor the Fund Portfolio by causing the Custodian to
give the Warranty Provider access to the BBID System. If the Warranty Provider
is denied such access at any time, the Warranty Provider may, in its sole
discretion, adjust the Cushion until such time as such access is restored;
PROVIDED, that the Cushion shall not be reduced if the Adviser provides the
Warranty Provider with an alternative source of the information provided by the
BBID System that is acceptable to the Warranty Provider in its sole discretion.
The Warranty Provider shall notify the Adviser and the Fund of the Warranty
Provider's exercise of remedies pursuant to this SECTION 3.4(D).
Section 3.5 INTENT. The economic intent of the Portfolio Requirements is to
ensure that the Fund's Net Assets are at least equal to the Aggregate Protected
Amount on the Maturity Date. The Fund will not use leverage (excepting from the
scope of the term "leverage," Loans for Temporary or Emergency Purposes). To the
extent that the instruments which the Fund is permitted to invest in have
implicit, embedded or synthetic leverage, the Portfolio Requirements are
intended to prevent the Adviser from using such implicit, embedded or synthetic
leverage to materially increase the loss that the Fund would experience in the
event of a decline in the Fund's Net Assets, compared to a fully invested
portfolio that did not include such investments.
ARTICLE IV
TRIGGER EVENTS
Section 4.1 TRIGGER EVENTS
(a) The following events shall constitute Trigger Events hereunder; PROVIDED,
HOWEVER, that in the event the New York Stock Exchange closes early on any
Exchange Business Day due to extraordinary circumstances (an "EARLY CLOSE
EXCHANGE BUSINESS DAY"), the cure periods specified in this SECTION 4.1(A) will
be automatically extended such that on the next Exchange Business Day following
the Early Close Exchange Business Day, the cure periods will continue for the
amount of time lost on such Early Close Exchange Business Day due to such early
close (the "EXTENDED CURE TIME") (for the avoidance of doubt, should the next
Exchange Business Day following the Early Close Exchange Business Day also be an
Early Close Exchange Business Day, the cure period will continue for as long as
Extended Cure Time remains):
(i) Any failure at any time to comply with the first sentence of
SECTION 3.1;
(ii) Any failure at any time to comply with the provisions of SECTION
3.2(A)(I), if such violation is not cured on the Exchange Business Day
on which the Adviser becomes aware of such violation; PROVIDED, that
the Adviser shall be deemed to be aware of such violation if such
violation has been in existence for three Exchange Business Days;
(iii) Any failure at any time to comply with SECTION 3.3(C);
(iv) Any failure at any time to comply with SECTION 3.2(A)(II) or SECTION
3.3 (other than SECTION 3.3(C)), unless cured by the end of the
Exchange Business Day following the Exchange Business Day on which such
violation occurred;
(v) The termination of, or failure to comply with, the Expense Limitation
Agreement;
(vi) Any violation of ARTICLE III (other than SECTIONS 3.2(A)(VI) and (XI))
that is not provided for in clause (i), (ii), (iii) or (iv) above,
unless cured by the end of the Exchange Business Day following the
Exchange Business Day on which the Adviser becomes aware of such
violation; PROVIDED, that the Adviser shall be deemed to be aware of
such violation if such violation has been in existence for three
Exchange Business Days;
(vii) Any violation of SECTION 3.2(A)(VI) or (XI) above, unless cured by the
end of the Exchange Business Day following the Exchange Business Day on
which the Adviser becomes aware of such violation;
(viii) The Fund shall fail to pay the Warranty Fee when due as provided in
SECTION 2.4 and such failure shall continue unremedied for a period of
two Business Days after notice of such failure from the Warranty
Provider;
(ix) The Adviser resigns, the Fund elects to terminate the Investment
Management Agreement with the Adviser or the Investment Management
Agreement terminates in accordance with its terms and any successor
adviser (including the Adviser) that agrees to be bound by the terms of
this Agreement is not acceptable to the Warranty Provider in its
reasonable discretion after considering the reputation of the successor
adviser, its experience in managing large cap equity and fixed income
portfolios, its size, its financial condition, its ability to manage
the Fund Portfolio in accordance with the Registration Statement and
its ability to comply with the Adviser's obligations under this
Agreement and the Transaction Documents to which it is a party;
(x) The Adviser resigns, the Fund elects to terminate the Investment
Management Agreement with the Adviser or the Investment Management
Agreement terminates in accordance with its terms and either (i) the
Adviser is no longer obligated to manage the Fund pursuant to the terms
of the Investment Management Agreement and a successor investment
adviser acceptable to the Warranty Provider has not entered into an
investment management agreement with the Fund or (ii) the termination
of the Investment Management Agreement is not yet effective but the
Board of Trustees of the Fund has indicated its intention to the
Warranty Provider, or taken any further action, to appoint a successor
investment adviser notwithstanding the fact that the Warranty Provider
has advised the Board of Trustees that such successor investment
adviser would not be acceptable to the Warranty Provider based upon the
standards included in SECTION 4.1(A)(IX), then in either such case a
Trigger Event shall be deemed to have occurred notwithstanding the fact
that a successor investment adviser has not yet been appointed;
(xi) The Adviser does not, in all material respects, manage the assets of
the Fund in accordance with the investment objective, policies and
strategies currently set forth in the Registration Statement;
(xii) Any representation or warranty made by the Adviser or the Fund, in any
Transaction Document or in any document or certification provided in
connection with any Transaction Document, shall have been incorrect or
misleading in any material respect when made or when deemed made;
(xiii) The Equity Limit for a Class of Shares is less than 0.05;
(xiv) The Adviser or the Fund shall fail to perform any obligation, or shall
breach any covenant, under this Agreement or the Transaction Documents
that is not expressly provided for in clauses (i), (ii), (iii), (iv),
(v), (vi), (vii), (viii), (ix), (x) or (xi) above, which failure could
reasonably be expected to have an Adverse Effect and such violation, if
capable of being remedied, shall continue unremedied for a period of
three Exchange Business Days after the Adviser becomes aware of the
occurrence of such failure; provided, that the Adviser shall be deemed
to be aware of such violation if such violation has been in existence
for three Exchange Business Days; or
(xv) The occurrence of any of the following: (A) a Regulatory Event or
Litigation Event or (B) an Act of Insolvency occurs with respect to the
Adviser.
(b) Notwithstanding any other provision hereof, if an event has occurred and is
continuing, which, if not cured or waived would give rise to a Trigger Event,
then the Adviser may not cause the Fund to acquire any additional Eligible
Equity Investments until such event is cured and shall upon becoming aware of
such event immediately notify the Warranty Provider of such event, which notice
shall include a description of the manner in which the Adviser intends to cure
such event ("CURATIVE STEPS"), the Adviser's assessment of the likelihood of
success, the time the Adviser expects to elapse before such event is cured, and
such other information as the Warranty Provider may reasonably request. Upon
sending such notice to the Warranty Provider, the Adviser shall immediately take
the Curative Steps set forth in such notice unless and until such time as the
Warranty Provider notifies the Adviser that it objects to such Curative Steps,
in which case the Adviser shall immediately cease the implementation of such
Curative Steps. The Warranty Provider shall only object to such Curative Steps
if in the Warranty Provider's reasonable discretion, they are not consistent
with this Agreement or are not likely to be an effective cure of the potential
Trigger Event within the cure period set forth in SECTION 4.1(A), if any. If the
Adviser violates this SECTION 4.1(B), then a Trigger Event shall be deemed to
have occurred.
(c) If a Trigger Event occurs and is continuing past the cure period specified
therein (if applicable), then, at the election of the Warranty Provider in its
sole discretion, the Warranty Provider shall have the right to (i) direct the
Adviser or the Custodian, as selected by the Warranty Provider, to invest all of
the Fund's assets in accordance with SECTION 4.2(A) (a "PERMANENT DEFEASANCE
EVENT") or (ii) adjust the Cushion. Any such adjustment shall be permanent,
unless and until further adjusted by the Warranty Provider in its sole
discretion. The Warranty Provider shall notify the Adviser and the Fund of the
Warranty Provider's exercise of remedies pursuant to this SECTION 4.1(C).
(d) In the event of (i) an act or omission on the part of the Adviser which
constitutes gross negligence, recklessness, bad faith or willful misconduct
(such conduct referenced in subsection (I) of this SECTION 4.1(D), the "ADVISER
CONDUCT"), and (ii) the existence of a PV Shortfall, the Adviser agrees to pay
to the Warranty Provider an amount equal to the amount of such PV Shortfall
determined as provided in this SECTION 4.1(D) to have been directly or
indirectly attributable to such Adviser Conduct. The amount of such PV Shortfall
directly or indirectly attributable to the Adviser Conduct shall be equal to the
difference, if negative, between (a) the actual Total NAV as of the date of
determination and (b) the hypothetical Total NAV of a hypothetical portfolio
comprised of the actual portfolio assets as of the date of determination
adjusted to eliminate the effect of the Adviser Conduct. In making the
determination of the PV Shortfall, the hypothetical portfolio will be based on
the actual portfolio of assets as of the date of determination adjusted to
eliminate the effect of the Adviser Conduct by decreasing and increasing
positions in asset classes or sectors, as the case may be, on a pro rata basis.
In addition, if the Warranty Provider has directed the Adviser to invest all of
the Fund's assets in a Defeasance Portfolio pursuant to SECTIONS 4.1(C) and 4.2
and the Fund's assets are not so invested on the Second Exchange Business Day
following the Permanent Defeasance Date and for the remainder of the Protected
Period, then if (and only if) a PV Shortfall or an additional PV Shortfall
(collectively "ADDITIONAL PV SHORTFALL") that arises due to the Fund's assets
not being so invested within such period and/or for the remainder of the
Protected Period, then the Adviser agrees to pay to the Warranty Provider such
Additional PV Shortfall (if any). The Warranty Provider shall notify (the
"DETERMINATION NOTICE") the Adviser in writing of its determination of any PV
Shortfall directly or indirectly attributable to the Adviser Conduct and any
Additional PV Shortfall; PROVIDED, that the Warranty Provider shall not be
entitled to any payment under this SECTION 4.1(D) unless the Determination
Notice is delivered within 30 days of the Warranty Provider becoming aware of
such PV Shortfall attributable directly or indirectly to such Adviser Conduct or
Additional PV Shortfall, as applicable. If the Adviser disagrees with the
Warranty Provider's determination of the PV Shortfall directly or indirectly
attributable to the Adviser Conduct and/or the Additional PV Shortfall contained
in the Determination Notice, then (i) the Adviser shall notify (the "OBJECTION
NOTICE") the Warranty Provider in writing of such disagreement within three
Business Days after the delivery by the Warranty Provider of the Determination
Notice and (ii) unless the Adviser and the Warranty Provider otherwise agree on
the amount of such PV Shortfall directly or indirectly attributable to the
Adviser Conduct or Additional PV Shortfall, the amount thereof shall be
determined by arbitration in accordance with the procedures set forth in SECTION
4.1(E). If the Adviser does not provide the Warranty Provider with the Objection
Notice within such three Business Day period, then the Adviser shall be deemed
to have agreed to the Warranty Provider's determination of the PV Shortfall
directly or indirectly attributable to the Adviser Conduct and the Additional PV
Shortfall contained in the Determination Notice. Any amount payable by the
Adviser under this SECTION 4.1(D) (i) shall be paid to the Warranty Provider
within three Business Days of the delivery of the Determination Notice or if
such PV Shortfall or Additional PV Shortfall is determined pursuant to an
arbitration proceeding, within three Business Days after such final arbitration
decision; PROVIDED, that should the parties otherwise agree on such PV Shortfall
or Additional PV Shortfall, such PV Shortfall or Additional PV Shortfall shall
be paid to the Warranty Provider within three Business Days of such agreement;
(ii) with respect to certain Adviser Conduct, shall be reduced on a dollar for
dollar basis by any amounts paid by the Adviser to the Fund under the Investment
Management Agreement as a result of the same Adviser Conduct to the extent that
the Total NAV is increased and the PV Shortfall is in fact decreased by such
amount, in each case on a dollar for dollar basis; and (iii) shall be reduced on
a dollar for dollar basis by any amounts paid by the Adviser to the Fund under
the Investment Management Agreement as a result of the Fund's assets not being
invested in a Defeasance Portfolio on the Second Exchange Business Day following
the Permanent Defeasance Date to the extent that the Total NAV is increased and
the Additional PV Shortfall is in fact decreased by such amount, in each case on
a dollar for dollar basis. In the event that the Adviser fails to pay to the
Warranty Provider any amounts payable under this SECTION 4.1(D) within the time
period specified herein, the Shortfall Amount shall be decreased (i) in the case
of a PV Shortfall, on a pro rata basis by the percentage of the PV Shortfall
directly or indirectly attributable to the Adviser Conduct, and (ii) in the case
of Additional PV Shortfall, by the amount of such Additional PV Shortfall on a
dollar for dollar basis. Notwithstanding anything contained in this SECTION
4.1(D) to the contrary, solely for purposes of this SECTION 4.1(D), the Adviser
shall not be deemed to have committed Adviser Conduct and consequently shall not
be liable for any payment under this SECTION 4.1(D) if an event occurs which if
not cured or waived would give rise to a Trigger Event; PROVIDED, that such
event is cured or waived within the time period specified in SECTION 4.1(A), if
any.
(e) In the event that the terms of SECTION 4.1(D) provide for arbitration, each
of the Warranty Provider and the Adviser shall select one arbitrator within
seven Business Days after the delivery by the Adviser of the Objection Notice;
PROVIDED, HOWEVER, that if either of such parties shall fail to select an
arbitrator within such period, such arbitrator shall be appointed by the
American Arbitration Association. The two arbitrators selected shall select a
third arbitrator within five Business Days after each of such arbitrators have
been selected or, if they shall be unable to agree on a third arbitrator within
such time, such third arbitrator shall be appointed by the American Arbitration
Association. Each arbitrator shall be of exemplary qualifications and stature,
and no person affiliated with any party hereto shall be eligible to be an
arbitrator. The arbitration shall be held in New York, New York and be governed
by the Commercial Arbitration Rules of the American Arbitration Association and
the decision of a majority of the arbitrators shall be final, binding and
subject to judicial enforcement and with respect to the specific Adviser Conduct
that is the subject of such arbitration decision, shall be the exclusive remedy
of the Warranty Provider; PROVIDED, HOWEVER, that, notwithstanding the
foregoing, the Warranty Provider shall not be limited from seeking
indemnification under SECTION 5.2(A)(III) and (A)(V) hereof. Fees and expenses
of the arbitration (including fees and expenses of the arbitrators) shall be
shared by the parties to the arbitration equally.
Section 4.2 DEFEASANCE PORTFOLIO
(a) If the Warranty Provider exercises the remedy provided by SECTION 4.1(C)(I)
following a Permanent Defeasance Event, the Warranty Provider shall have the
right to cause the Adviser to immediately allocate all of the assets of the Fund
to the Fixed-Income Portfolio (the "DEFEASANCE PORTFOLIO"). In addition to or in
lieu of the remedy provided in the immediately preceding sentence, at any time
after the occurrence of a Permanent Defeasance Event, the Warranty Provider may,
at its election in its sole discretion, cause the Custodian to invest all of the
assets of the Fund in U.S. Zeroes (other than in connection with sales of
portfolio investments for Cash and/or Cash Equivalents after receipt by the Fund
of redemption requests in order to meet such requests or in connection with the
payment of Fund fees). The Warranty Fee shall remain due and payable in
accordance with SECTION 2.4 notwithstanding the occurrence of a Permanent
Defeasance Event. The Adviser shall provide the Warranty Provider upon the
issuance of the Financial Warranty with an irrevocable instruction, in the form
attached hereto as ANNEX C, executed by the Adviser which shall constitute the
Warranty Provider's direction to the Custodian pursuant to this SECTION 4.2(A)
and the Service Agreement. The irrevocable instruction shall also constitute a
limitation of the further authority of the Adviser (including any subadviser of
the Fund) to manage the Fund's assets other than in accordance with the
irrevocable instruction. If the Warranty Provider elects to provide instructions
to the Custodian pursuant to this SECTION 4.2(A) following a Permanent
Defeasance Event, the Warranty Provider shall do so by delivering the
irrevocable instruction to the Custodian. The Warranty Provider shall only
deliver such instruction to the Custodian following a Permanent Defeasance Event
and after notice thereof to the Adviser.
(b) If a Permanent Defeasance Event shall have occurred, the Adviser shall
immediately cause maximum Fund Fees and Expenses (including Extraordinary
Expenses) to be reduced to 1.65% per annum of the average daily Net Assets of
the Fund for the Class A Shares, 2.40% per annum of the average daily Net Assets
of the Fund for the Class B Shares and 2.40% per annum of the average daily Net
Assets of the Fund for the Class C Shares.
ARTICLE V
INDEMNIFICATION
Section 5.1 SURVIVAL. Except as otherwise specifically provided in this
Agreement, all representations, warranties, covenants and other agreements
contained herein, including, without limitation, the indemnification obligations
in SECTION 5.2 and the payment of legal fees and expenses in SECTION 8.6, shall
survive the execution and delivery of this Agreement and the Financial Warranty,
and the Termination Date.
Section 5.2 INDEMNIFICATION
(a) The Adviser agrees to indemnify and hold harmless the Warranty Provider, its
Affiliates, and their respective employees, officers, directors and agents
(collectively, the "WARRANTY PROVIDER PARTIES") from and against any and all
losses, claims, damages, liabilities, judgments, costs (including reasonable
attorneys' fees), expenses (including expenses of investigation and enforcement)
and disbursements (collectively, "LOSSES") incurred or suffered by any of them
in connection with or arising out of (i) any material breach of any warranty, or
the inaccuracy of any representation, as the case may be, made by either of the
Adviser or the Fund under this Agreement or any of the other Transaction
Documents to which it is a party, (ii) the failure of either of the Adviser
(including any subadviser of the Fund) or the Fund to fulfill any agreement or
covenant contained in this Agreement or any of the other Transaction Documents
to which it is a party, including the failure to pay to the Warranty Provider
any amounts pursuant to SECTION 4.1(D) but excluding any Portfolio Requirement
as to which a cure period is provided in SECTION 4.1(A) if such Portfolio
Requirement is satisfied within such cure period, (iii) the enforcement or
preservation of any of the Warranty Provider's rights under this Agreement and
the other Transaction Documents, (iv) the improper payment of the Aggregate
Shortfall Amount, including by reason of mistake, fraud or error in calculation,
and (v) any claim, suit or demand involving (A) the transactions contemplated by
the Transaction Documents, (B) any investigation or defense of, or participation
in, any legal proceeding relating to the execution, delivery, enforcement,
performance or administration of the Transaction Documents, or (C) an allegation
or other claim that the Registration Statement or any Prospectus included any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading other than
with respect to any information relating to the Warranty Provider included in
the Registration Statement, which has been provided by the Warranty Provider in
writing for inclusion therein; PROVIDED, HOWEVER, that the Adviser shall not be
liable for any Losses resulting directly or indirectly from any action or
omission on the part of any of the Warranty Provider Parties prior to the
occurrence of a Permanent Defeasance Event which constitutes gross negligence,
recklessness, bad faith or willful misconduct by such Warranty Provider Party;
PROVIDED, FURTHER, that in the case of subsections (v)(A) and (B), the Adviser
shall not be liable for any Losses incurred by the Warranty Provider in
connection with any claim, suit or demand initiated by the Warranty Provider or
any of its Affiliates to the extent such claim, suit or demand is finally
adjudicated or settled in the Adviser's favor. The Adviser agrees to promptly
reimburse any of the Warranty Provider Parties for all Losses in respect of
which indemnification may be sought by such Warranty Provider Party hereunder as
they are incurred or suffered by such Warranty Provider Party.
(b) The Fund agrees to indemnify and hold harmless the Warranty Provider Parties
from and against any and all Losses incurred or suffered by any of them in
connection with or arising out of (i) any material breach of any warranty, or
the inaccuracy of any representation, as the case may be, made by the Fund under
this Agreement or any of the other Transaction Documents to which it is a party,
(ii) the failure of the Fund to fulfill any agreement or covenant contained in
this Agreement or any of the other Transaction Documents to which it is a party,
excluding any Portfolio Requirement as to which a cure period is provided in
SECTION 4.1(A) if such Portfolio Requirement is satisfied within such cure
period, (iii) the enforcement or preservation of any of the Warranty Provider's
rights under this Agreement and the other Transaction Documents, (iv) the
improper payment of the Aggregate Shortfall Amount, including by reason of
mistake, fraud or error in calculation, and (v) any claim, suit or demand
involving (A) the transactions contemplated by the Transaction Documents, (B)
any investigation or defense of, or participation in, any legal proceeding
relating to the execution, delivery, enforcement, performance or administration
of the Transaction Documents, or (C) an allegation or other claim that the
Registration Statement or any Prospectus included any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading other than with respect
to any information relating to the Warranty Provider included in the
Registration Statement, which has been provided by the Warranty Provider in
writing for inclusion therein; PROVIDED, HOWEVER, that the Fund shall not be
liable for any Losses resulting directly or indirectly from any action or
omission on the part of any of the Warranty Provider Parties prior to the
occurrence of a Permanent Defeasance Event which constitutes gross negligence,
recklessness, bad faith or willful misconduct by such Warranty Provider Party;
PROVIDED, FURTHER, that in the case of subsections (v)(A) and (B), the Fund
shall not be liable for any Losses incurred by the Warranty Provider in
connection with any claim, suit or demand initiated by the Warranty Provider or
any of its Affiliates to the extent such claim, suit or demand is finally
adjudicated or settled in the Fund's favor. The Fund agrees to promptly
reimburse any of the Warranty Provider Parties for all Losses in respect of
which indemnification may be sought by such Warranty Provider Party hereunder as
they are incurred or suffered by such Warranty Provider Party.
(c) The Warranty Provider agrees to indemnify and hold harmless the Adviser and
the Fund, their Affiliates, and their respective employees, officers, directors,
trustees and agents (collectively, the "FUND/ADVISER Parties") from and against
any and all Losses incurred or suffered by any of them in connection with or
arising out of (i) any material breach of any warranty, or the inaccuracy of any
representation made by the Warranty Provider under this Agreement, (ii) the
failure of the Warranty Provider to fulfill any covenant contained in this
Agreement, (iii) the Warranty Provider's failure to pay the Aggregate Shortfall
Amount, if any, required to be paid by it under the Financial Warranty in
accordance with the terms of this Agreement, including by reason of the
Calculation Agent failing to provide to the Adviser or the Fund a certificate
certifying the calculation of the Aggregate Shortfall Amount within three
Business Days following the Maturity Date or if the Aggregate Shortfall Amount
determined by the Calculation Agent and included in such certificate is wrong or
(iv) the Calculation Agent's willful misconduct in determining the Aggregate
Market Value of the Equity Portfolio in accordance with SECTION 3.3(C);
PROVIDED, that the Warranty Provider shall not be liable for any Losses
resulting, directly or indirectly, from any action or omission on the part of
any of the Fund/Adviser Parties or the Adviser which constitutes gross
negligence, recklessness, bad faith or willful misconduct by such Fund/Adviser
Party. The Warranty Provider agrees to promptly reimburse any of the
Fund/Adviser Parties for all Losses in respect of which indemnification may be
sought by such Fund/Adviser Party hereunder as they are incurred or suffered by
such Fund/Adviser Party.
Section 5.3 INDEMNIFICATION PROCEDURE
(a) The party or parties being indemnified are referred to herein as the
"INDEMNIFIED PARTY" and the indemnifying party is referred to herein as the
"INDEMNIFYING PARTY." In the event that any party shall incur or suffer any
Losses in respect of which indemnification may be sought by such party
hereunder, the Indemnified Party shall assert a claim for indemnification by
written notice ("NOTICE") to the Indemnifying Party stating the nature and basis
of such claim. In the case of Losses arising by reason of any third party claim,
the Notice shall be given within thirty (30) days of the filing or other written
assertion of any such claim against the Indemnified Party, but the failure of
the Indemnified Party to give the Notice within such time period shall not
relieve the Indemnifying Party of any liability that the Indemnifying Party may
have to the Indemnified Party, except to the extent that the Indemnifying Party
demonstrates that the defense of such action has been prejudiced by the
Indemnified Party's failure to give such notice.
(b) In the case of third party claims for which indemnification is sought, the
Indemnifying Party shall have the option (i) to conduct any proceedings or
negotiations in connection therewith, (ii) to take all other steps to settle or
defend any such claim (PROVIDED; that the Indemnifying Party shall not settle
any such claim without the consent of the Indemnified Party (which consent shall
not be unreasonably withheld or delayed)), and (iii) to employ counsel to
contest any such claim or liability in the name of the Indemnified Party or
otherwise. In any event, the Indemnified Party shall be entitled to participate
at its own expense and by its own counsel in any proceedings relating to any
third party claim. The Indemnifying Party shall, within twenty (20) days of
receipt of the Notice, notify the Indemnified Party of its intention to assume
the defense of such claim. If (i) the Indemnifying Party shall decline to assume
the defense of any such claim, (ii) the Indemnifying Party shall fail to notify
the Indemnified Party within twenty (20) days after receipt of the Notice of the
Indemnifying Party's election to defend such claim or (iii) the Indemnified
Party shall have reasonably concluded that there may be defenses available to it
which are different from or in addition to those available to the Indemnifying
Party or a conflict exists between the Indemnifying Party and the Indemnified
Party (in which case the Indemnifying Party shall not have the right to direct
the defense of such action on behalf of the Indemnified Party), the Indemnified
Party shall defend against such claim and the Indemnified Party may settle such
claim without the consent of the Indemnifying Party, and the Indemnifying Party
may not challenge the reasonableness of any such settlement. The expenses of all
proceedings, contests or lawsuits in respect of such claims shall be borne and
paid by the Indemnifying Party (up to a limit of one counsel in the case of
attorneys' fees) and the Indemnifying Party shall pay the Indemnified Party, in
immediately available funds, as such Losses are incurred upon receipt of
supporting documentation thereof. Regardless of which party shall assume the
defense of the claim, the parties agree to cooperate fully with one another in
connection therewith. In the event that any Losses incurred by the Indemnified
Party do not involve payment by the Indemnified Party of a third party claim,
then, the Indemnifying Party shall pay, within ten (10) days after agreement on
the amount of Losses or the occurrence of a final non-appealable determination
of such amount payable, to the Indemnified Party, in immediately available
funds, the amount of such Losses. Anything in this SECTION 5.3 to the contrary
notwithstanding, the Indemnifying Party shall not, without the Indemnified
Party's prior written consent, settle or compromise any claim or consent to
entry of any judgment in respect thereof which imposes any future obligation on
the Indemnified Party or which does not include, as an unconditional term
thereof, the giving by the claimant or plaintiff to the Indemnified Party, a
release from all liability in respect of such claim.
(c) The remedies provided for in this ARTICLE V shall not be exclusive of any
other rights or remedies available to one party against the other, either at law
or in equity.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 REPRESENTATIONS AND WARRANTIES OF THE ADVISER. To induce the
Warranty Provider to enter into this Agreement and to issue the Financial
Warranty, the Adviser hereby represents and warrants to the Warranty Provider as
follows, on and as of the effective date hereof:
(a) The Adviser (i) is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, (ii) has the power and
authority, and the legal right, to own its assets and to transact the business
in which it is engaged, (iii) is duly qualified to do business and is in good
standing under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to so qualify would not have an Adverse Effect and (iv) is in
compliance with all Requirements of Law, except where non-compliance would not
have an Adverse Effect.
(b) The Adviser has the power and authority, and the legal right, to execute,
deliver and perform the Transaction Documents to which it is a party and has
taken all necessary action required by applicable Requirements of Law to
authorize the execution, delivery and performance of the Transaction Documents
to which it is a party. Except as has been obtained, no consent or authorization
of, filing with, or other act by or in respect of, any Government Authority or
any other Person is required in connection with the execution, delivery,
performance, validity or enforceability by or against the Adviser of the
Transaction Documents to which it is a party. This Agreement has been, and each
other Transaction Document to which the Adviser is a party will be, duly
executed and delivered on behalf of the Adviser. This Agreement constitutes, and
each other Transaction Document to which the Adviser is a party, when executed
and delivered, will constitute, a legal, valid and binding obligation of the
Adviser enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) The execution, delivery and performance by the Adviser of the Transaction
Documents to which it is a party does not and will not violate any Requirement
of Law or Contractual Obligation of the Adviser and will not result in, or
require, the creation or imposition of any Lien on any of its property, assets
or revenues, except where such violation or Lien would not reasonably be
expected to have an Adverse Effect. The Adviser is not in violation of any
Contractual Obligation, except where such violation would not reasonably be
expected to have an Adverse Effect.
(d) No litigation, proceeding or investigation of or before any arbitrator or
Governmental Authority is pending or, to the Adviser's knowledge, threatened (i)
asserting the invalidity or unenforceability of any of the Transaction
Documents, (ii) seeking to prevent the consummation of any of the transactions
contemplated by the Transaction Documents or (iii) seeking any determination or
ruling that would reasonably be expected to have an Adverse Effect.
(e) The Adviser is duly registered with the Commission as an investment adviser
under the Investment Advisers Act; and there does not exist any proceeding or
any facts or circumstances the existence of which could adversely affect the
registration of the Adviser with the Commission; the Adviser is not prohibited
by any provision of the Investment Advisers Act or the Investment Company Act,
or the respective rules and regulations thereunder, from acting as an investment
adviser of the Fund as contemplated hereunder.
(f) All factual information prepared and furnished by or on behalf of the
Adviser to the Warranty Provider and/or the Calculation Agent (whether prepared
by the Adviser or any other Person) for purposes of or in connection with this
Agreement, any Transaction Document or any transaction contemplated hereby or
thereby is true and accurate in all material respects on the date as of which
such information is dated or certified and such information taken as a whole
does not omit to state any material fact necessary to make such information in
the context in which it is furnished not misleading.
(g) To the best of the Adviser's knowledge, no statute, rule, regulation or
order has been enacted or deemed applicable by any Government Authority which
would make the transactions contemplated by the Transaction Documents illegal or
otherwise prevent the consummation thereof.
Section 6.2 REPRESENTATIONS AND WARRANTIES OF THE FUND. The Fund hereby
represents and warrants to the Warranty Provider as follows, on and as of the
effective date hereof:
(a) The Trust (i) is a business trust duly formed, validly existing and in good
standing under the laws of the State of Delaware; (ii) has the power and
authority, and the legal right, to own its assets and to transact the business
in which it is engaged; (iii) is duly qualified to do business and is in good
standing under the laws of each jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to so qualify would not have an Adverse Effect; and (iv) is in
compliance with all Requirements of Law, except where non-compliance would not
have an Adverse Effect.
(b) The Trust has the power and authority, and the legal right, on behalf of the
Fund, to execute, deliver and perform the Transaction Documents to which the
Fund is a party and has taken all necessary action required by applicable
Requirements of Law to authorize the execution, delivery and performance of the
Transaction Documents to which the Fund is a party. No consent or authorization
of, filing with, or other act by or in respect of, any Government Authority or
any other Person is required in connection with the execution, delivery or
performance by the Trust on behalf of the Fund, or the validity or the
enforceability by or against the Fund, of the Transaction Documents to which the
Fund is a party, other than the filing under the Acts of the Registration
Statement and the Prospectus, filings in accordance with Blue Sky laws and the
requisite approval of the Trust's Board of Trustees. This Agreement has been,
and each other Transaction Document to which the Fund is a party will be, duly
executed and delivered on behalf of the Fund. This Agreement constitutes, and
each other Transaction Document to which the Adviser is a party, when executed
and delivered, will constitute, a legal, valid and binding obligation of the
Fund enforceable against the Fund in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(c) The execution, delivery and performance by the Trust on behalf of the Fund
of the Transaction Documents to which the Fund is a party does not and will not
violate any Requirement of Law or Contractual Obligation of the Fund and will
not result in, or require, the creation or imposition of any Lien on any of its
property, assets or revenues, except where such violation or Lien would not have
an Adverse Effect.
(d) No litigation, proceeding or investigation of, or before any arbitrator or
Governmental Authority is pending or, to the Fund's knowledge, threatened by or
against the Fund or against any of its properties or revenues (i) asserting the
invalidity or unenforceability of this Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by the Transaction
Documents to which it is a party or (iii) seeking any determination or ruling
that could reasonably be expected to have an Adverse Effect.
(e) The Fund is duly registered with the Commission as an open-end management
investment company under the Investment Company Act and has been operated in
compliance in all material respects with the Investment Company Act and the
rules and regulations thereunder.
(f) The Fund is a "diversified" fund within the meaning of the Investment
Company Act.
(g) All factual information prepared and furnished by or on behalf of the Fund
to the Warranty Provider and/or the Calculation Agent (whether prepared by the
Fund or any other Person) for purposes of or in connection with this Agreement,
any Transaction Document or any transaction contemplated hereby or thereby is
true and accurate in all material respects on the date as of which such
information is dated or certified and such information taken as a whole does not
omit to state any material fact necessary to make such information in the
context in which it is furnished not misleading.
Section 6.3 REPRESENTATIONS AND WARRANTIES OF THE WARRANTY PROVIDER. The
Warranty Provider hereby represents and warrants to the Adviser and the Fund as
follows, on and as of the effective date hereof:
(a) The Warranty Provider is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Delaware.
(b) The Warranty Provider has the power and authority, and the legal right, to
execute, deliver and perform its obligations under this Agreement and any other
Transaction Document to which it is a party and has taken all necessary action
required by applicable Requirements of Law to authorize the execution, delivery
and performance of this Agreement and any other Transaction Document to which it
is a party. Except as has been obtained, no consent or authorization of, filing
with, or other act by or in respect of, any Government Authority or any other
Person is required in connection with the execution, delivery, performance,
validity or enforceability by or against the Warranty Provider of this Agreement
or any other Transaction Document to which it is a party. This Agreement has
been, and each other Transaction Document to which it is a party will be, duly
executed and delivered on behalf of the Warranty Provider. This Agreement
constitutes, and each other Transaction Document to which the Warranty Provider
is a party, when executed and delivered, will constitute, a legal, valid and
binding obligation of the Warranty Provider enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(c) The execution, delivery and performance by the Warranty Provider of each of
this Agreement and any other Transaction Document to which it is a party does
not and will not violate any Requirement of Law or Contractual Obligation of the
Warranty Provider and will not result in, or require, the creation or imposition
of any Lien on any of its property, assets or revenues, except where such
violation or Lien would not reasonably be expected to have an Adverse Effect
with respect to the Warranty Provider.
(d) No litigation, proceeding or investigation of or before any arbitrator or
Governmental Authority is pending or, to the Warranty Provider's knowledge,
threatened by or against the Warranty Provider (i) asserting the invalidity or
unenforceability of any of this Agreement or any other Transaction Document to
which it is a party, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or any other Transaction Document to
which it is a party or (iii) seeking any determination or ruling that would
reasonably be expected to have an Adverse Effect with respect to the Warranty
Provider.
(e) To the best of the Warranty Provider's knowledge, no statute, rule,
regulation or order has been enacted or deemed applicable by any Government
Authority that would make the transactions contemplated by this Agreement or any
other Transaction Document to which it is a party illegal or otherwise prevent
the consummation thereof.
(f) The financial statements of the Guarantor and the Warranty Provider included
in or incorporated by reference into the Fund's Registration Statement when such
Registration Statement was declared effective and any financial statements
subsequently made available to the Fund pursuant to SECTION 7.3, fairly present
or will fairly present in all material respects the financial position of the
Guarantor and the Warranty Provider, respectively, as of the dates and for the
periods referred to therein and in conformity with generally accepted accounting
principles applied on a consistent basis.
ARTICLE VII
COVENANTS
Section 7.1 COVENANTS OF THE ADVISER. The Adviser hereby covenants and agrees
that through the Termination Date and so long as a drawing is available under
the Financial Warranty:
(a) it shall not amend, supplement, modify, terminate, or agree to any waiver of
any rights with respect to, any of the Transaction Documents (other than
amendments to the Prospectus pursuant to Rule 485(b) under the Securities Act
that do not relate to portfolio investments), without the prior written consent
of the Warranty Provider;
(b) other than in connection with the reinvestment of dividends or other
distributions or the transfer of Shares that does not result in an increase in
the Shares that are issued and outstanding, it shall not allow the offering or
sale of the Shares of the Fund after the Offering Period;
(c) it shall notify the Warranty Provider promptly of (i) any request by the
Commission for an amendment to the Registration Statement with respect to any
Class of Shares of the Fund or a supplement to the Prospectus with respect to
any Class of Shares of the Fund, (ii) the issuance by the Commission of any
stop-order suspending the effectiveness of the Registration Statement with
respect to any Class of Shares of the Fund or the initiation or threat of any
such stop-order proceeding, or (iii) receipt by the Fund of a notice from or
order of the Commission pursuant to Section 8(e) of the Investment Company Act
with respect to any Registration Statement with respect to the Fund;
(d) it shall provide to the Warranty Provider such additional information with
respect to the Fund as the Warranty Provider may from time to time reasonably
request;
(e) prior to or simultaneously upon filing with the Commission any amendment to
the Registration Statement with respect to any Class of Shares of the Fund or
supplement to the Prospectus with respect to any Class of Shares of the Fund, it
shall furnish a copy thereof to the Warranty Provider; PROVIDED, HOWEVER, that
the Adviser shall obtain the prior written consent of the Warranty Provider
before filing any such amendment or supplement that modifies references to or
affects the Warranty Provider, this Agreement or the Financial Warranty;
(f) it shall comply in all material respects with the terms and conditions of
the Transaction Documents to which it is a party and shall provide the Warranty
Provider with written notice immediately upon becoming aware of any material
breach by it of the provisions of any such agreements;
(g) it shall not, without the prior written consent of the Warranty Provider,
elect to terminate any Transaction Document;
(h) it shall comply in all material respects with the terms and provisions of
all Requirements of Law, including the Acts and the Investment Advisers Act,
with respect to the Fund and it shall obtain and maintain all licenses, permits,
charters and registrations which are necessary to the conduct of its business or
where the failure to obtain and maintain the same would reasonably be expected
to have an Adverse Effect;
(i) it shall promptly inform the Warranty Provider in writing of any information
or event that, to the knowledge of the Adviser, would be reasonably likely to
result, through the passage of time or otherwise, in the occurrence of a Trigger
Event;
(j) it shall promptly inform the Warranty Provider in writing of the occurrence
of any of the following events of which it has knowledge: any Litigation Event,
Regulatory Change, Regulatory Event or other event that would reasonably be
expected to have an Adverse Effect;
(k) it shall promptly and fully perform all of its obligations (i) under each
Transaction Document to which it is a party, and (ii) under each other
agreement, instrument or contract by which it is bound, except to the extent
that such non-performance would not reasonably be expected to have an Adverse
Effect and shall provide the Warranty Provider with written notice promptly upon
becoming aware of any material breach by it of the provisions of any such
agreements. The Adviser shall take all action necessary to preserve its
existence and ensure that the Transaction Documents remain in full force and
effect; (l) it shall keep or cause to be kept in reasonable detail books and
records of account of its business in relation to the Fund, including without
limitation electronic information with respect thereto, in form and detail
customary in the industry and sufficient to satisfy the Adviser's obligation to
provide to the Warranty Provider and the Calculation Agent the information
referred to herein;
(m) it shall implement compliance procedures reasonably designed to monitor the
Fund Portfolio's compliance with the Portfolio Requirements on an ongoing basis;
(n) it shall not include any material relating to the Warranty Provider or the
Guarantor, or describing the terms of the Financial Warranty or this Agreement
in any marketing materials used by or on behalf of the Adviser or the Fund
unless such material has been approved in writing by the Warranty Provider prior
to its inclusion in such marketing materials, such approval not to be
unreasonably withheld or delayed;
(o) it shall promptly inform the Warranty Provider in writing if it delegates
any of its management responsibilities under the Investment Management Agreement
to a subadviser or subsequent thereto terminates such delegation to any
subadviser or materially modifies any then existing subadvisory agreement with
any subadviser to which it has delegated any of its management responsibilities
under the Investment Management Agreement;
(p) it shall provide to the Warranty Provider such additional information with
respect to the Fund as the Warranty Provider may from time to time reasonably
request and, after the occurrence of a Trigger Event, at the expense of the
Adviser, during normal business hours with reasonable prior notice allow the
Warranty Provider to inspect, audit and make copies of and abstracts from the
Fund's records and to visit the offices of the Adviser for the purpose of
examining such records, internal controls and procedures maintained by the
Adviser; and
(q) all factual information prepared and furnished by or on behalf of the
Adviser to the Warranty Provider and/or the Calculation Agent (whether prepared
by the Adviser or any other Person) for purposes of or in connection with this
Agreement, any Transaction Document or any transaction contemplated hereby or
thereby will be true and accurate in all material respects on the date as of
which such information is dated or certified and such information taken as a
whole will not omit to state any material fact necessary to make such
information in the context in which it is furnished not misleading.
Section 7.2 COVENANTS OF THE FUND. The Fund hereby covenants and agrees that
through the Termination Date and so long as a drawing is available under the
Financial Warranty:
(a) within 65 days after the end of each fiscal year, it shall provide the
Warranty Provider with accurate, correct and complete audited statements of
assets and liabilities of the Fund with values determined in accordance with the
procedures described in the Registration Statement and in accordance with the
Investment Company Act, and an audited schedule of investments of the Fund, each
as of such fiscal year end. Such audited financial statements will fairly
present in all material respects the financial position of the Fund as of the
dates and for the periods referred to therein and in conformity with generally
accepted accounting principles applied on a consistent basis;
(b) it shall provide the Warranty Provider with accurate, correct and complete
semi-annual unaudited statements of assets and liabilities of the Fund with
values determined in accordance with the procedures described in the
Registration Statement and in accordance with the Investment Company Act, and a
semi-annual unaudited schedule of investments of the Fund, in each case within
65 days after the end of such period. Such unaudited financial statements will
fairly present in all material respects the financial position of the Fund as of
the dates and for the periods referred to therein and in conformity with
generally accepted accounting principles applied on a consistent basis;
(c) after the Offering Period, other than in connection with the redemption of
Shares by a Shareholder, the reinvestment of dividends and distributions or the
transfer of Shares that does not result in an increase in the Shares that are
issued and outstanding, it shall not change the number of outstanding Shares of
the Fund;
(d) it shall promptly and fully perform all of its obligations (i) under each
Transaction Document to which it is a party, and (ii) under each other
agreement, instrument or contract by which it is bound, except to the extent
that such non-performance would not reasonably be expected to have an Adverse
Effect and shall provide the Warranty Provider with written notice promptly upon
becoming aware of any material breach by it of the provisions of any such
agreements;
(e) it shall not amend, supplement, modify, terminate, or agree to any waiver of
any rights with respect to, any of the Transaction Documents (other than
amendments to the Prospectus pursuant to Rule 485(b) under the Securities Act
that do not relate to portfolio investments) without the prior written consent
of the Warranty Provider, which consent shall not be unreasonably withheld or
delayed;
(f) it shall not amend, supplement, modify, terminate, or agree to any waiver
with respect to any provision of any agreement, obligation, undertaking or
filing with respect to the Fund, including the Declaration of Trust, if such
amendment, supplement or modification would be reasonably likely in the Warranty
Provider's reasonable discretion to have a material impact on the Warranty
Provider or any Shareholder, without the prior written consent of the Warranty
Provider;
(g) it shall not include any material relating to the Warranty Provider or the
Guarantor or describing the terms of the Financial Warranty or this Agreement in
any marketing materials used by or on behalf of the Fund unless such material
has been approved in writing by the Warranty Provider prior to its inclusion in
such marketing material, such approval not to be unreasonably withheld or
delayed;
(h) it shall not change in any material respect the manner in which the assets
or liabilities of the Fund are allocated to any Class of Shares of the Fund
without the prior written consent of the Warranty Provider, which consent shall
not be unreasonably withheld or delayed;
(i) prior to taking any action to terminate the Custodian, the Fund shall notify
the Warranty Provider and, in the event that the Custodian shall terminate the
Custodian Agreement with respect to the Fund, the Fund shall notify the Warranty
Provider and engage a successor Custodian; PROVIDED, HOWEVER, that the Fund
shall not engage as successor Custodian any Custodian who does not agree to be
bound by the Services Agreement and by the provisions of SECTIONS 3.4(C) and
(D), 4.1(C) and 4.2(A) to the extent they are relevant to duties of the
Custodian and who does not have a system in place that is equivalent to the BBID
System acceptable to the Warranty Provider in its sole discretion;
(j) in the event that the Adviser resigns, the Fund elects to terminate the
Investment Management Agreement with the Adviser or the Investment Management
Agreement terminates in accordance with its terms, the Fund shall immediately
notify the Warranty Provider and cause any successor adviser (including the
Adviser) to agree to be bound by the terms of this Agreement, subject to
applicable law, and the Service Agreement, in each case prior to the effective
date of such termination;
(k) it shall comply in all material respects with the terms and provisions of
the Acts with respect to the Fund;
(l) it promptly shall provide the Warranty Provider with a copy of any amendment
or waiver of any provision of the Investment Management Agreement or the filing
of any amendment to the Declaration of Trust;
(m) it shall provide to the Warranty Provider such additional information with
respect to the Fund as the Warranty Provider may from time to time reasonably
request and, after the occurrence of a Trigger Event, during normal business
hours with reasonable prior notice allow the Warranty Provider to inspect, audit
and make copies of and abstracts from the Fund's records;
(n) all factual information prepared and furnished by or on behalf of the Fund
to the Warranty Provider and/or the Calculation Agent (whether prepared by the
Fund or any other Person) for purposes of or in connection with this Agreement,
any Transaction Document or any transaction contemplated hereby or thereby will
be true and accurate in all material respects on the date as of which such
information is dated or certified and such information taken as a whole will not
omit to state any material fact necessary to make such information in the
context in which it is furnished not misleading;
(o) it shall not change the conversion period of Class B Shares or approve or
implement conversion rights for any other Class without the prior written
consent of the Warranty Provider; and
(p) it shall maintain insurance policies covering its liabilities to its
officers, trustees, employees and agents of the type and in the amounts as is
customary for funds similar to the Fund.
Section 7.3 COVENANTS OF THE WARRANTY PROVIDER. The Warranty Provider hereby
covenants and agrees that through the Termination Date it will make available to
the Fund for inclusion or incorporation by reference in the Registration
Statement: (i) on an annual basis audited annual financial statements of each of
the Guarantor and the Warranty Provider included in their respective Annual
Report on Form 10-K under the Exchange Act (or if the Guarantor or the Warranty
Provider is not subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, the audited financial statements that would otherwise be
required to be filed by the Guarantor or the Warranty Provider, respectively,
under such Form 10-K), together with the relevant auditor's consent, and (ii) on
a quarterly basis unaudited quarterly financial statements of each of the
Guarantor and the Warranty Provider included in their respective Quarterly
Report on Form 10-Q under the Exchange Act (or if the Guarantor or the Warranty
Provider is not subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act, the unaudited financial statements that would otherwise be
required to be filed by the Guarantor or the Warranty Provider, respectively,
under such Form 10-Q).
ARTICLE VIII
FURTHER AGREEMENTS
Section 8.1 OBLIGATIONS ABSOLUTE. The obligations of the Adviser and the Fund
pursuant to this Agreement are absolute and unconditional and will be paid or
performed strictly in accordance with the respective terms hereof, irrespective
of:
(a) Any lack of validity or enforceability of, or any amendment or other
modification of, or waiver with respect to, any of the Transaction Documents;
(b) Any amendment or waiver of, or consent to departure from any Transaction
Document;
(c) The existence of any claim, set-off, defense or other right either may have
at any time against the other, any beneficiary or any transferee of the
Financial Warranty (or any persons or entities for whom any such beneficiary or
any such transferee may be acting), the Warranty Provider or any other Person or
entity whether in connection with this Agreement, any of the Transaction
Documents or any unrelated transactions;
(d) Any statement or any other document presented in connection herewith proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(e) The inaccuracy or alleged inaccuracy upon which any drawing under the
Financial Warranty is based;
(f) Payment by the Warranty Provider under the Financial Warranty which does not
comply with the terms hereof; PROVIDED, that such payment shall not have
constituted willful misconduct on the part of the Warranty Provider;
(g) Any default or alleged default of the Warranty Provider under this
Agreement, other than a default with respect to payment of the Aggregate
Shortfall Amount; or
(h) Any other circumstance or happening whatsoever; PROVIDED, that the same
shall not have constituted willful misconduct of the Warranty Provider and to
the extent that such circumstance or happening does not result in a default by
the Warranty Provider with respect to the payment of the Aggregate Shortfall
Amount.
Section 8.2 PARTICIPATIONS AND ASSIGNMENTS. Subject to the prior written consent
of the Fund (which consent shall not be unreasonably withheld or delayed), the
Warranty Provider may assign its obligations under this Agreement to an
Affiliate; PROVIDED, that such Affiliate provides the Fund with audited
financial statements covering a period of at least three years; and PROVIDED,
FURTHER, that the Guarantor provides the Fund with an unconditional guarantee of
the assignee's obligations under this Agreement in substantially the form of the
BAC Guarantee. The Warranty Provider shall have the right to give participations
in its rights under this Agreement and to enter into hedging contracts with
respect to the Financial Warranty; PROVIDED, that the Warranty Provider agrees
that any such disposition will not alter or affect in any way whatsoever the
Warranty Provider's direct obligations hereunder and under the Financial
Warranty.
Section 8.3 FUND LIABILITY. Any other provision to the contrary notwithstanding,
any liability of the Fund under this Agreement or in connection with the
transactions contemplated herein shall be discharged only out of the assets of
the Fund.
Section 8.4 LIMITATION OF LIABILITY OF THE WARRANTY PROVIDER. The Adviser and
the Fund agree that neither the Warranty Provider, its Affiliates, nor any of
their respective officers, trustees/directors or employees shall be liable or
responsible for (a) the use which may be made of the Financial Warranty by any
Person or for any acts or omissions of another Person in connection therewith or
(b) the validity, sufficiency, accuracy or genuineness of any documents
delivered to the Warranty Provider, or of any endorsement(s) thereon, even if
such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged. In furtherance and not in limitation of the
foregoing, the Warranty Provider may accept documents that appear on their face
to be in order, without responsibility for further investigation.
Section 8.5 ADVISER LIABILITY FOR ACTIONS OF SUBADVISER. For the avoidance of
doubt, the parties hereby agree that (a) the Adviser shall be solely responsible
for the management of the Fund Portfolio regardless of whether the Adviser
delegates any of its management responsibilities under the Investment Management
Agreement to a subadviser, (b) the Adviser shall be liable under this Agreement
and the other Transaction Documents to which it is a party for any actions taken
by any subadviser with regard to the Fund Portfolio, and (c) for purposes of
this Agreement and any other Transaction Document to which it is a party, any
action or omission by a subadviser with respect to the Fund Portfolio shall be
deemed to be the action or omission of the Adviser.
Section 8.6 FEES AND EXPENSES. In the event the Fund is liquidated or otherwise
does not commence operations prior to January 3, 2003, the Adviser hereby agrees
to pay all of the Warranty Provider's legal fees and expenses in connection with
the preparation and negotiation of this Agreement and any of the other
Transaction Documents.
Section 8.7 INFORMATION. The parties hereby agree that all information, or
access to all information, required to be provided by the Adviser, the Fund
and/or the Custodian to the Warranty Provider hereunder shall, in lieu thereof
or in addition thereto, be provided to the Calculation Agent upon notice to the
Adviser and/or the Fund by the Warranty Provider on the same terms and within
the same time period as such information (or access thereto) is required to be
provided to the Warranty Provider under the terms of this Agreement. In
addition, the parties further agree that all information required to be provided
by the Warranty Provider to the Adviser and/or the Fund may be provided by an
affiliate of the Warranty Provider, including the Calculation Agent, on the same
terms and within the same time period as such information is required to be
provided by the Warranty Provider under the terms of this Agreement.
ARTICLE IX
CONFIDENTIALITY
Section 9.1 CONFIDENTIALITY OBLIGATIONS OF THE Warranty Provider. Subject to
SECTION 9.2, the Warranty Provider agrees, on behalf of itself and its agents,
not to disclose or use for any purpose other than the administration of this
Agreement, the exercise of its rights hereunder or legitimate corporate purposes
relating to this Agreement (including any corporate purposes relating to the
characterization or treatment of the rights and obligations hereunder for
accounting, insurance, rating agency or other similar purposes) (x) any
information regarding the specific investments of the Fund whether provided to
the Warranty Provider by the Adviser, the Fund or the Custodian ("TRADING
INFORMATION") or (y) other confidential information (including without
limitation proprietary information as to systems, software and trading methods)
(collectively, "OTHER INFORMATION" and, together with Trading Information, "FUND
CONFIDENTIAL INFORMATION") provided by the Adviser or the Fund to the Warranty
Provider hereunder unless (i) such information was or becomes generally
available to the public other than as a result of the Warranty Provider's breach
of this ARTICLE IX; or (ii) such information is required to be disclosed
pursuant to applicable law or in connection with any legal proceedings or to the
extent required by a subpoena, order of any court or Government Authority.
Section 9.2 TRADING INFORMATION AND OTHER INFORMATION
(a) Notwithstanding SECTION 9.1, the Warranty Provider may disclose Fund
Confidential Information in connection with the Warranty Provider's hedging
arrangements to recipients ("PERMITTED RECIPIENTS") if such Permitted Recipients
represent and warrant to the Warranty Provider that such Permitted Recipients
will treat such information as Fund Confidential Information and comply with
SECTION 9.1 of this Agreement. The Adviser and the Fund agree that the Warranty
Provider and any Permitted Recipient will satisfy their obligation to treat such
information as Fund Confidential Information and comply with SECTION 9.1 of the
Agreement by (i) restricting access to such information to the investment
officers and compliance officers who require access to such information for
monitoring, hedging, administration and compliance purposes, (ii) obtaining the
agreement of such investment officers and compliance officers to keep such
information confidential on the terms of this Section 9.2, and (iii) complying
with the other requirements of an institutional compliance procedure in form and
detail customary in the industry and reasonably designed to be sufficient to
satisfy the Warranty Provider's obligation under this ARTICLE IX and to achieve
compliance with applicable law.
(b) Notwithstanding SECTION 9.1, the Warranty Provider may disclose Fund
Confidential Information to the respective officers, employees, directors,
representatives, agents, outside counsel, and independent auditors of the
Warranty Provider, the Calculation Agent, the Guarantor and their respective
Affiliates who need to see such information in connection with administration of
the Agreement, the exercise of the Warranty Provider's rights hereunder, or
legitimate corporate purposes so long as such persons agree to keep such
information confidential on the terms contained in SECTION 9.1.
Section 9.3 CONFIDENTIALITY OBLIGATIONS OF THE ADVISER AND THE FUND
(a) Subject to subsection (b) below, the Adviser and the Fund each agrees, on
behalf of itself and its agents, not to disclose or use for any purpose other
than the administration of this Agreement and the exercise of its rights and
obligations hereunder any confidential information (including, without
limitation, proprietary information as to systems, software and trading methods)
(collectively, "WARRANTY PROVIDER CONFIDENTIAL INFORMATION") provided by the
Warranty Provider to the Adviser or the Fund hereunder unless (i) such
information was or becomes generally available to the public other than as a
result of the Adviser's or the Fund's breach of this ARTICLE IX; or (ii) such
information is required to be disclosed pursuant to applicable law or in
connection with any legal proceedings or to the extent required by a subpoena,
order of any court or Government Authority.
(b) Notwithstanding subsection (a) above, each of the Adviser and the Fund may
disclose Warranty Provider Confidential Information to those of its officers,
employees, directors, representatives, agents, outside counsel, and independent
auditors who need to see such information in connection with administration of
the Agreement or the exercise of the Adviser's and Fund's rights or obligations
hereunder or thereunder, so long as such persons agree to keep such information
confidential on the terms contained in this SECTION 9.3.
ARTICLE X
TERMINATION
Section 10.1 TERMINATION
(a) Unless this Agreement and the Financial Warranty are sooner terminated
pursuant to SECTION 10.1(B) hereof, this Agreement and the Financial Warranty
shall terminate (i) on the Maturity Date if no amounts are payable under the
Financial Warranty, or (ii) thereafter, upon payment by the Warranty Provider
(or the Guarantor under the BAC Guarantee) of all amounts due by the Warranty
Provider under the Financial Warranty to the Custodian on behalf of the Fund
(any such date of termination pursuant to this ARTICLE X is referred to in this
Agreement as the "TERMINATION DATE").
(b) (i) This Agreement may be terminated by the Fund by written notice to the
Warranty Provider at any time (A) upon the occurrence of an Act of Insolvency
with respect to the Warranty Provider, or (B) if the credit rating of the
Guarantor is suspended, withdrawn or downgraded below BBB+ by S&P or Baa1 by
Xxxxx'x (or equivalent credit rating if different rating categories are used).
(ii) This Agreement may be terminated (and in the case of clause (B)
in this subparagraph the Financial Warranty may also be terminated) by
the Warranty Provider in its sole discretion by written notice to the
Fund and the Adviser (A) prior to the Inception Date and the issuance
of the Financial Warranty if the Fund's Total NAV on the last day of
the Offering Period is less than $70 million or (B) subsequent to the
Inception Date and the issuance of the Financial Warranty and prior to
the Maturity Date if (1) the Adviser resigns, the Fund elects to
terminate the Investment Management Agreement with the Adviser or the
Investment Management Agreement terminates in accordance with its
terms and a successor adviser (including the Adviser) is not elected by
the Board of Trustees prior to the date of such termination or the
Fund's Board of Trustees elects a successor adviser (including the
Adviser) which agrees to be bound by the terms of this Agreement
without first consulting with the Warranty Provider and, subject to its
fiduciary obligations and obligations under the Investment Company Act,
considering the reputation of the successor adviser, its experience in
managing large cap equity and fixed income portfolios, its size, its
financial condition, its ability to manage the Fund Portfolio in
accordance with the Registration Statement and its ability to comply
with the Adviser's obligations under this Agreement and the Transaction
Documents to which it is a party; PROVIDED, HOWEVER, that if such
successor adviser is a Person that is not an Affiliate of the Adviser
and such Person agrees to be bound by the terms of this Agreement prior
to such termination, the Adviser shall not be liable for any actions of
such unaffiliated successor adviser under this Agreement, or (2) the
Fund terminates the Custodian Agreement with Xxxxx Brothers Xxxxxxxx &
Co. and engages a successor custodian that does not agree to be bound
by the Service Agreement and by the provisions of SECTIONS 3.4(C) and
(D) and 4.1(C) and 4.2(A) to the extent they are relevant to duties of
the Custodian, or the Fund amends the Custodian Agreement so that the
Custodian is no longer bound by such provisions, in each case without
the prior written consent of the Warranty Provider. The Warranty
Provider shall not be entitled to terminate this Agreement pursuant to
this SECTION 10.1(B)(II) unless the written notice required to be
provided by the Warranty Provider under this SECTION 10.1(B)(II) shall
be delivered to the Fund and the Adviser within 30 days after the
occurrence of the relevant termination event.
(iii) Notwithstanding any of the foregoing, this Agreement shall
automatically terminate, and if such termination occurs after the
Inception Date the Financial Warranty shall automatically terminate,
(A) prior to the Inception Date if the Fund's Board has determined to
liquidate the Fund or subsequent to the Inception Date and prior to the
Maturity Date if the Fund is liquidated during that time, (B) on the
Inception Date if the Financial Warranty is not issued by January 3,
2003 because the conditions in SECTION 2.3(C) have not been satisfied,
(C) if the Adviser resigns, the Fund elects to terminate the Investment
Management Agreement with the Adviser or the Investment Management
Agreement terminates in accordance with its terms and any successor
adviser (including the Adviser) does not agree to be bound by the terms
of this Agreement prior to the effective date of such termination or
(D) if the Fund is involved in a merger, reorganization or sale of all
or substantially all of its assets.
(iv) If this Agreement is terminated in accordance with this
SECTION 10.1(B), the Fund shall notify its Shareholders of such
termination and such notice shall state that the Fund has released the
Warranty Provider and the Guarantor from all liability under the
Financial Warranty and BAC Guarantee, respectively. The Fund shall
provide a copy of such notice to the Warranty Provider. From and after
the effective date of such termination, the Fund shall have no
obligation to pay the Warranty Fee (except as to amounts thereof
accrued on a daily interpolated basis prior to such termination), and
the Warranty Provider and the Guarantor shall have no liability under
the Financial Warranty and BAC Guarantee, respectively.
ARTICLE XI
MISCELLANEOUS
Section 11.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement nor consent to any departure therefrom, shall in any event be
effective unless in writing and signed by all of the parties hereto; PROVIDED,
that any waiver so granted shall extend only to the specific event or occurrence
so waived and not to any other similar event or occurrence which occurs
subsequent to the date of such waiver.
Section 11.2 NOTICES
(a) Except to the extent otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (and if, sent by mail, certified or registered, return
receipt requested) or confirmed facsimile transmission and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or three Business Days after being deposited in the mail,
postage prepaid, or, in the case of facsimile transmission, when sent, addressed
as follows:
If to the Adviser:
Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Fund:
c/o Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Warranty Provider:
Main Place Funding, LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Calculation Agent:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx, Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or such other address and/or addresses (and with copies to such persons) as
shall be specified in writing by any such party to the others.
(b) Prior to the Inception Date, the parties shall provide to each other
detailed notice procedures with respect to the notifications contemplated herein
to the extent they are different from those set forth above.
Section 11.3 NO WAIVER, REMEDIES AND SEVERABILITY. No failure on the part of any
party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. Except as otherwise provided in SECTION 4.1(E), the remedies herein
provided are cumulative and not exclusive of any remedies provided by law. The
parties further agree that the holding by any court of competent jurisdiction
that any remedy pursued by any party hereunder is unavailable or unenforceable
shall not affect in any way the ability of such party to pursue any other remedy
available to it. In the event any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, the parties
hereto agree that such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 11.4 PAYMENTS. All payments to the Warranty Provider hereunder shall be
made in lawful currency of the United States in immediately available funds and
shall be made prior to 2:00 p.m. (New York City time) on the date such payment
is due by wire transfer to the account designated by the Warranty Provider by
notice to the Fund and the Adviser. Any payments to the Fund under the Financial
Warranty shall be made in accordance with the terms thereof in lawful currency
of the United States in immediately available funds by wire transfer to the
account designated by the Fund by notice to the Warranty Provider.
Whenever any payment under this Agreement shall be stated to
be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such cases be
included in computing interest or fees, if any, in connection with such payment.
Section 11.5 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (including Section 5-1401 of
the New York General Obligations Law but excluding all other choice of law and
conflicts of law rules).
Section 11.6 SUBMISSION TO JURISDICTION, WAIVER OF JURY TRIAL. EXCEPT AS
OTHERWISE SET FORTH IN SECTIONS 4.1(D) AND (E), THE WARRANTY PROVIDER, THE
ADVISER AND THE FUND HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION
OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT AND THE WARRANTY PROVIDER, THE ADVISER AND THE FUND HEREBY
IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE WARRANTY
PROVIDER, THE ADVISER AND THE FUND HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT THAT THEY MAY LEGALLY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING. THE WARRANTY PROVIDER, THE ADVISER AND
THE FUND AGREE THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.
THE WARRANTY PROVIDER, THE ADVISER AND THE FUND HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES HERETO.
EACH OF THE WARRANTY PROVIDER, THE ADVISER AND THE FUND ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR SUCH PARTIES ENTERING INTO THIS
AGREEMENT.
Section 11.7 COUNTERPARTS. This Agreement may be executed in counterparts of the
parties hereto, and each such counterpart shall be considered an original and
all such counterparts shall constitute one and the same instrument.
Section 11.8 PARAGRAPH HEADINGS. The headings of paragraphs contained in this
Agreement are provided for convenience only. They form no part of this
Agreement and shall not affect its construction or interpretation.
Section 11.9 RELIANCE ON INFORMATION. In making a determination as to whether a
Trigger Event has occurred, the Warranty Provider shall be entitled to rely on
reports published or broadcast by media sources believed by the Warranty
Provider to be generally reliable and on information provided to the Warranty
Provider by any other source believed by the Warranty Provider to be generally
reliable; PROVIDED, that the Warranty Provider reasonably and in good faith
believes such information to be accurate and has taken such steps as may be
reasonable in the circumstances to attempt to verify such information.
Section 11.10 TIME OF THE ESSENCE. Time is of the essence under this Agreement.
Section 11.11 NO THIRD-PARTY RIGHTS. Nothing in this Agreement, express or
implied, shall or is intended to confer any rights upon any Person other than
the parties hereto or their respective successors or assigns, including, without
limitation, any Shareholder.
Section 11.12 FURTHER ASSURANCES. The parties hereto shall, upon the request of
the Warranty Provider, the Adviser or the Fund, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
within a reasonable period following such request, such amendments or
supplements hereto and such further instruments and take such further action as
may be reasonably necessary to effectuate the intention, performance and
provisions of the Transaction Documents.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, all as of the day and year first above mentioned.
PIONEER INVESTMENT MANAGEMENT, INC., as
Adviser
By:/s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Treasurer
PIONEER PROTECTED PRINCIPAL PLUS FUND on
behalf of its series, PIONEER PROTECTED
PRINCIPAL PLUS FUND
By:/s/ Vindent Xxxx
Name: Xxxxxxx Xxxx
Title: Treasurer
MAIN PLACE FUNDING, LLC, as Warranty
Provider
By:/s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: President
