EXHIBIT (g)(2)
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT made as of this __ day of December, 2004 by and
between PIONEER INVESTMENT MANAGEMENT, INC., a Delaware corporation and a member
of the UniCredito Italiano banking group, register of banking groups with its
principal place of business at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (the
"Adviser"), and HIGHLAND CAPITAL MANAGEMENT, L.P., a Delaware limited
partnership with its principal place of business at 00000 Xxxx Xxxx, Xxx. 0000,
Xxxxxx, Xxxxx 00000 ("Sub-Adviser").
W I T N E S S E T H
WHEREAS, pursuant to authority granted to the Adviser by the Board of
Trustees (the "Board") of the PIONEER HIGHLAND FUND (the "Fund") and pursuant to
the provisions of the Management Agreement dated as of December [DATE], 2004
between the Adviser and the Fund (the "Management Agreement"), the Adviser has
selected the Sub-Adviser to act as a sub-investment adviser of the Fund and to
provide certain advisory services, as more fully set forth below, and to perform
such services under the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and benefits set
forth herein, the Adviser and the Sub-Adviser do hereby agree as follows:
1. THE SUB-ADVISER'S SERVICES.
(a) Investment Services. The Sub-Adviser shall act as sub-investment
adviser with respect to the Fund. In such capacity, the Sub-Adviser shall,
subject to the supervision of the Adviser and the Board, regularly provide
the Fund with investment research, advice and supervision and shall
furnish continuously an investment program for the Fund, consistent with
the investment objectives and policies of the Fund. The Sub-Adviser shall
determine from time to time what securities shall be purchased for the
Fund, what securities shall be held or sold by the Fund and what portion
of the Fund's assets shall be held uninvested in cash, subject always to
the provisions of the Fund's Certificate of Trust, Agreement and
Declaration of Trust, By-Laws and its registration statement on Form N-2
(the "Registration Statement") under the Investment Company Act of 1940,
as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), covering the Fund's shares, as filed with the
Securities and Exchange Commission (the "Commission"), and to the
investment objectives, policies and restrictions of the Fund, as each of
the same shall be from time to time in effect. To carry out such
obligations, the Sub-Adviser shall exercise full discretion and act for
the Fund in the same manner and with the same force and effect as the Fund
itself might or could do with respect to purchases, sales or other
transactions, as well as with respect to all other such things necessary
or incidental to the furtherance or conduct of such purchases, sales or
other transactions. No reference in this Agreement to the Sub-Adviser
having full discretionary authority over the Fund's investments shall in
any way limit the right of the Adviser, in its sole discretion, to
establish or revise policies in connection with the management of the
Fund's assets or to otherwise exercise its right to control the overall
management of this Fund's assets.
(b) Compliance. Each of the Adviser and the Sub-Adviser agrees to
comply with the requirements of the 1940 Act, the Investment Advisers Act
of 1940, as amended (the "Advisers Act"), the 1933 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the Commodity Exchange
Act, as amended, and the respective rules and regulations thereunder, as
applicable, as well as with all other applicable federal and state laws,
rules, regulations and case law that relate to the services and
relationships described hereunder and to the conduct of its business as a
registered investment adviser. The Sub-Adviser also agrees to comply with
the objectives, policies and restrictions set forth in the Registration
Statement, as amended or supplemented, of the Fund, and with any policies,
guidelines, instructions and procedures approved by the Board or the
Adviser and provided to the Sub-Adviser. In selecting the Fund's portfolio
securities and performing the Sub-Adviser's obligations hereunder, the
Sub-Adviser shall not take any action which would cause the Fund to fail
to comply with the requirements of Subchapter M of the Internal Revenue
Code of 1986, as amended (the "Code"), for qualification as a regulated
investment company. The Sub-Adviser shall maintain compliance procedures
that it reasonably believes are adequate to ensure the Sub-Adviser's
compliance with the federal securities laws. The Sub-Adviser shall also
maintain compliance procedures that it reasonably believes are adequate to
ensure its compliance with the Advisers Act. No supervisory activity
undertaken by the Adviser shall limit the Sub-Adviser's responsibility for
its obligations under this Agreement. The Adviser shall provide at least
10 business days notice (or such lesser notice as the Board shall provide
the Adviser) before the effectiveness of any amendments or supplements to
the Fund's objectives, policies or restrictions or any policies,
guidelines, instructions or procedures approved by the Board.
(c) Proxy Voting. The Board has the authority to determine how
proxies with respect to securities that are held by the Fund shall be
voted, and the Board has initially determined to delegate the authority
and responsibility to vote proxies for the Fund's securities to the
Adviser. So long as proxy voting authority for the Fund has been delegated
to the Adviser, the Sub-Adviser shall provide such assistance to the
Adviser with respect to the voting of proxies for the Fund as the Adviser
may from time to time reasonably request, and the Sub-Adviser shall
promptly forward to the Adviser any information or documents necessary for
the Adviser to exercise its proxy voting responsibilities. The Sub-Adviser
shall not vote proxies with respect to the securities held by the Fund
unless and until the Board or the Adviser delegates such authority and
responsibility to the Sub-Adviser or otherwise instructs the Sub-Adviser
to do so in writing, whereupon the Sub-Adviser shall carry out such
responsibility in accordance with the Fund's Proxy Voting Policies and any
instructions that the Board or the Adviser shall provide from time to time
and shall provide such reports and keep such records relating to proxy
voting as the Board or the Adviser may reasonably request or as may be
necessary for the Fund to comply with the 1940 Act and other applicable
law. Any such delegation of proxy voting responsibility to the Sub-Adviser
may be revoked or modified by the Board or the Adviser at any time.
(d) Recordkeeping. The Sub-Adviser shall not be responsible for the
provision of administrative, bookkeeping or accounting services to the
Fund, except as otherwise provided herein or as may be necessary for the
Sub-Adviser to supply to the
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Adviser, the Fund or its Board the information required to be supplied
under this Agreement.
The Sub-Adviser shall maintain separate books and detailed records
of all matters pertaining to the Fund's assets advised by the Sub-Adviser
required by Rule 31a-1 under the 1940 Act (other than those records being
maintained by the Adviser, custodian or transfer agent appointed by the
Fund) relating to its responsibilities provided hereunder with respect to
the Fund, and shall preserve such records for the periods and in a manner
prescribed therefor by Rule 31a-2 under the 1940 Act (the "Fund's Books
and Records"). The Fund's Books and Records shall be available to the
Adviser and the Board at any time upon reasonable request, shall be
delivered to the Fund upon the termination of this Agreement and shall, at
the Fund's expense, be available for photocopying by the Fund or the
Adviser without unreasonable delay during any day other than a Saturday,
Sunday or a federal or local holiday.
(e) Holdings Information and Pricing. The Sub-Adviser shall keep the
Fund and the Adviser informed of developments which the Sub-Adviser
reasonably believes materially affect the Fund's holdings, and shall
furnish the Fund and the Adviser from time to time with whatever
information the Sub-Adviser believes is appropriate for this purpose. The
Sub-Adviser agrees to promptly notify the Adviser if the Sub-Adviser
believes that the market value of any security held by the Fund is not an
appropriate fair value. The Sub-Adviser agrees to provide pricing
information to the Adviser and/or the Fund's pricing agent, at their
request, to assist the Board or its designee in its duty to make
determinations of the fair value of certain portfolio securities when
market quotations are not readily available or such information is
otherwise required in accordance with the 1940 Act and the Fund's
valuation procedures for the purpose of calculating the Fund's net asset
value in accordance with procedures and methods established by the Board.
(f) Cooperation with Agents of the Adviser and the Fund. The
Sub-Adviser agrees to cooperate with and provide reasonable assistance to
the Adviser, the Fund, the Fund's custodian and foreign sub-custodians,
the Fund's pricing agents and all other agents and representatives of the
Fund and the Adviser, provide such information with respect to the Fund as
they may reasonably request from time to time in the performance of their
obligations, provide prompt responses to reasonable requests made by such
persons and establish appropriate interfaces with each so as to promote
the efficient exchange of information and compliance with applicable laws
and regulations.
2. CODE OF ETHICS. The Sub-Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of Rule 17j-1 under
the 1940 Act, which it will provide to the Adviser and the Fund. The Sub-Adviser
shall require that its Access Persons (as defined in the Sub-Adviser's Code of
Ethics) comply in all respects with the Sub-Adviser's Code of Ethics, as in
effect from time to time. Upon request, the Sub-Adviser shall provide the Fund
with a (i) a copy of the Sub-Adviser's Code of Ethics, as in effect from time to
time, and (ii) certification that it has adopted procedures reasonably necessary
to prevent Access Persons from engaging in any conduct prohibited by the
Sub-Adviser's Code of Ethics. Annually, the Sub-Adviser shall furnish a written
report, which complies with the requirements of Rule 17j-1,
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concerning the Sub-Adviser's Code of Ethics to the Fund and the Adviser. The
Sub-Adviser shall respond to requests for information from the Adviser as to
violations of the Code by Access Persons and the sanctions imposed by the
Sub-Adviser. The Sub-Adviser shall promptly notify the Adviser of any material
violation of the Code, whether or not such violation relates to any security
held by the Fund.
3. INFORMATION AND REPORTING. The Sub-Adviser shall keep the Fund and the
Adviser informed of developments relating to its duties as Sub-Adviser which the
Sub-Adviser reasonably believes materially and adversely affect the Fund. In
this regard, the Sub-Adviser shall provide the Fund, the Adviser, and their
respective officers with such periodic reports concerning the obligations the
Sub-Adviser has assumed under this Agreement as the Fund and the Adviser may
from time to time reasonably request.
(a) Notification of Breach / Compliance Reports. The Sub-Adviser
shall notify the Adviser immediately upon detection of (i) any failure to
manage the Fund in accordance with its investment objectives and policies
or any applicable law; or (ii) any breach of any of the Fund's objectives,
policies or restrictions or any of the Adviser's or the Board's policies,
guidelines or procedures supplemental thereto. In addition, the
Sub-Adviser shall provide a monthly certification that the Fund is in
compliance with its investment objectives and policies, the Fund's and the
Adviser's policies, guidelines or procedures and applicable law,
including, but not limited to those aspects of compliance with the 1940
Act and Subchapter M of the Code that are within the scope of the
Sub-Adviser's service hereunder. The Sub-Adviser acknowledges and agrees
that the Adviser may, in its discretion, provide such monthly compliance
certifications to the Board. The Sub-Adviser agrees to correct any
compliance breach promptly and to take any action that the Adviser may
reasonably request in connection with any such breach. The Sub-Adviser
shall also provide the officers of the Fund with supporting certifications
in connection with the certifications of the Fund's financial statements
and disclosure controls by the Fund's officers pursuant to the
Xxxxxxxx-Xxxxx Act. The Sub-Adviser will promptly notify the Adviser if
(i) the Sub-Adviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity, before or
by any court, public board, or body, involving the affairs of the Fund
(excluding class action suits in which the Fund is a member of the
plaintiff class by reason of the Fund's ownership of shares in the
defendant) or the compliance by the Sub-Adviser with the federal or state
securities laws or (ii) the controlling stockholder or executive committee
of the Sub-Adviser changes, there is otherwise an actual change in control
(whether through sale of all or substantially all of the assets of the
Sub-Adviser or a material change in management of the Sub-Adviser) or an
"assignment" (as defined in the 0000 Xxx) has or is proposed to occur.
(b) Inspection. Upon written request, with at least 72 hours advance
notice, the Sub-Adviser agrees to make its records and premises (including
the availability of the Sub-Adviser's employees for interviews), to the
extent that they relate to or may have an impact upon the conduct of
services provided to the Fund, available for compliance audits by the
Adviser or the Fund's employees, accountants or counsel; in this regard,
the Fund and the Adviser acknowledge that the Sub-Adviser shall have no
obligations to make available proprietary information unrelated to the
services provided to the Fund or
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any information related to other clients of the Sub-Adviser, except to the
extent necessary for the Adviser to confirm the absence of any conflict of
interest and compliance with any laws, rules or regulations in the
Sub-Adviser's service to the Fund. The Adviser agrees that, except for
communication to the Trustees of the Fund and to the extent required by
law or regulatory inquiry, it shall, and shall instruct its employees to,
maintain the confidentiality of the Sub-Adviser's records.
(c) Board and Filings Information. The Sub-Adviser will also provide
the Adviser with any information reasonably requested regarding the
Sub-Adviser's services to the Fund required for any meeting of the Board,
or for any shareholder report, amended registration statement, proxy
statement, or prospectus supplement to be filed by the Fund with the
Commission. The Sub-Adviser will make its officers and employees available
to meet with the Board from time to time on due notice to review the
investments of the Fund in light of current and prospective economic and
market conditions and shall furnish to the Board such information as may
reasonably be necessary in order for the Board to evaluate the approval of
the continuation of this Agreement or any proposed amendments hereto.
(d) Transaction Information. The Sub-Adviser shall furnish to the
Adviser such information concerning portfolio transactions as may be
necessary to enable the Adviser to perform such compliance testing on the
Fund and the Sub-Adviser's services as the Adviser may, in its sole
discretion, determine to be appropriate. The provision of such information
by the Sub-Adviser in no way relieves the Sub-Adviser of its own
responsibilities under this Agreement.
4. BROKERAGE.
(a) Principal and Agency Transactions. In connection with purchases
or sales of securities for the account of the Fund, neither the
Sub-Adviser nor any of its directors, officers, employees or affiliated
persons will act as a principal or agent or receive any commission except
as permitted by the 1940 Act.
(b) Placement of Orders. The Sub-Adviser shall arrange for the
placing of all orders for the purchase and sale of securities for the
Fund's account with brokers or dealers selected by the Sub-Adviser. In the
selection of such brokers or dealers and the placing of such orders, the
Sub-Adviser is directed at all times to seek for the Fund the most
favorable execution and net price available except as described herein. It
is also understood that it is desirable for the Fund that the Sub-Adviser
have access to supplemental investment and market research and security
and economic analyses provided by brokers who may execute brokerage
transactions at a higher cost to the Fund than may result when allocating
brokerage to other brokers, as consistent with Section 28(e) of the 1934
Act and any Commission staff interpretations thereof. Therefore, the
Sub-Adviser is authorized to place orders for the purchase and sale of
securities for the Fund with such brokers, subject to review by the
Adviser and the Board from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided
by such brokers may be useful to the Sub-Adviser in connection with its or
its affiliates' services to other clients.
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(c) Aggregated Transactions. On occasions when the Sub-Adviser
deems the purchase or sale of a security to be in the best interest of
the Fund as well as other clients of the Sub-Adviser, the Sub-Adviser
may, to the extent permitted by applicable law and regulations,
aggregate the order for securities to be sold or purchased in order to
obtain the best execution and lower brokerage commissions, if any. In
such event, allocation of the securities so purchased or sold, as well
as the expenses incurred in the transaction, will be made by the
Sub-Adviser in the manner the Sub-Adviser considers to be the most
equitable and consistent with its fiduciary obligations to the Fund and
to such other clients.
(d) Affiliated Brokers. The Sub-Adviser or any of its
affiliates may act as broker in connection with the purchase or sale of
securities or other investments for the Fund, subject to: (a) the
requirement that the Sub-Adviser seek to obtain the most favorable
execution and net price available within the policy guidelines
determined by the Board and set forth in the Fund's current prospectus
and statement of additional information; (b) the provisions of the
Investment Company Act, the Advisers Act and the rules of the
Commission under such Acts; (c) the provisions of the 1934 Act; and (d)
other provisions of applicable law. These brokerage services are not
within the scope of the duties of the Sub-Adviser under this Agreement.
Subject to the requirements of applicable law and any procedures
adopted by the Board, the Sub-Adviser or its affiliates may receive
brokerage commissions, fees or other remuneration from the Fund for
these services in addition to the Sub-Adviser's fees for services under
this Agreement.
(e) Alternative Trading Arrangements. From time to time the
Sub-Adviser and the Adviser may agree that the Sub-Adviser will place
some or all of the trades for the Fund through the Adviser's trading
desk. In such event, the Adviser shall have complete authority to
determine the brokers or dealers through which any trade by the Fund is
placed through the Adviser's trading desk and as to the timing and
manner of the execution of any such trade, although the Sub-Adviser may
give guidance. In such event, the Adviser shall be responsible for
obtaining best execution on behalf of the Fund on trades placed by the
Adviser, and the Sub-Adviser shall remain responsible for all other
compliance issues in connection with the Fund's portfolio transactions,
including the appropriate and accurate placement of orders on behalf of
the Fund into the Adviser's trading system and confirming the
appropriate settlement of the transactions.
5. CUSTODY. Nothing in this Agreement shall permit the Sub-Adviser to
take or receive physical possession of cash, securities or other investments of
the Fund.
6. ALLOCATION OF CHARGES AND EXPENSES. The Sub-Adviser will bear its
own costs of providing services hereunder. Other than as herein specifically
indicated, the Sub-Adviser shall not be responsible for the Fund's or the
Adviser's expenses, including brokerage and other expenses incurred in placing
orders for the purchase and sale of securities and other investment instruments.
Specifically, the Sub-Adviser will not be responsible for expenses of the Fund
or the Adviser, as the case may be, including, but not limited to, the
following: (i) charges and expenses for accounting, pricing and appraisal
services and related overhead, including, to the extent such services are
performed by personnel of the Sub-Adviser or its affiliates, office space and
facilities, and personnel compensation, training and benefits; (ii) the charges
and expenses of
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auditors; (iii) the charges and expenses of any custodian, transfer agent, plan
agent, dividend disbursing agent and registrar appointed by the Fund; (iv)
underwriting commissions and issue and transfer taxes chargeable to the Fund in
connection with securities transactions to which the Fund is a party; (v)
insurance premiums, interest charges, expenses in connection with any preferred
shares, dues and fees for membership in trade associations and all taxes and
corporate fees payable by the Fund to federal, state or other governmental
agencies; (vi) fees and expenses involved in registering and maintaining
registrations of the Fund's shares with federal regulatory agencies, state or
blue sky securities agencies and foreign jurisdictions, including the
preparation of prospectuses and statements of additional information for filing
with such regulatory authorities; (vii) all expenses of shareholders' and Board
meetings and of preparing, printing and distributing prospectuses, statements of
additional information, notices, proxy statements and all reports to
shareholders and to governmental agencies; (viii) charges and expenses of legal
counsel to the Fund and the Board; (ix) compensation and expenses of the Board;
(x) the cost of preparing and printing share certificates; (xi) interest on
borrowed money, if any; (xii) the fees and other expenses of listing the Fund's
shares on the New York Stock Exchange or any other securities exchange; and
(xiii) any other expense that the Fund, the Adviser or any other agent of the
Fund may incur (A) as a result of a change in the law or regulations, (B) as a
result of a mandate from the Board with associated costs of a character
generally assumed by similarly structured investment companies or (C) that is
similar to the expenses listed above, and that is approved by the Board
(including a majority of the Independent Trustees) as being an appropriate
expense of the Fund. The Fund or the Adviser, as the case may be, shall
reimburse the Sub-Adviser for any such expenses or other expenses of the Fund or
the Adviser, as may be reasonably incurred by such Sub-Adviser on behalf of the
Fund or the Adviser. The Sub-Adviser shall keep and supply to the Fund and the
Adviser adequate records of all such expenses.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Representations of the Sub-Adviser:
(i) Properly Licensed. The Sub-Adviser is registered as an
investment adviser under the Advisers Act, will remain so registered for
the duration of this Agreement and is not prohibited by the Advisers Act
or the 1940 Act from performing the services contemplated by this
Agreement. The Sub-Adviser agrees to promptly notify the Adviser of the
occurrence of any event that would disqualify the Sub-Adviser from serving
as an investment adviser to a registered investment company. The
Sub-Adviser is in compliance in all material respects with all applicable
federal and state law in connection with its investment management
operations. To the best knowledge of the Sub-Adviser, there is no
proceeding or investigation that is reasonably likely to result in the
Sub-Adviser being prohibited from performing the services contemplated by
this Agreement.
(ii) ADV Disclosure. The Sub-Adviser has provided the Adviser
with a copy of Part II of its Form ADV and will promptly furnish to the
Adviser any amendment to Part II of its Form ADV. The Sub-Adviser shall
promptly notify the Adviser of any amendment to Part I of its Form ADV.
The information contained in the Sub-Adviser's Form ADV is accurate and
complete in all material respects and does not
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omit to state any material fact necessary in order to make the statements
made, in light of the circumstances under which they were made, not
misleading.
(iii) Insurance. The Sub-Adviser shall maintain errors and
omissions and fidelity insurance coverage in an amount agreed upon from
time to time by the Adviser and the Sub-Adviser and from an insurance
provider that is in the business of regularly providing insurance coverage
to investment advisers. The Sub-Adviser shall provide prior written notice
to the Adviser (A) of any material changes in its insurance policies or
insurance coverage; or (B) if any material claims have been be made under
its insurance policies. Furthermore, it shall upon request provide to the
Adviser any information it may reasonably require concerning the amount of
or scope of such insurance. The Sub-Adviser's insurance shall, at a
minimum, cover errors and omissions of the Sub-Adviser.
(iv) Competent Staff. The Sub-Adviser shall ensure that
sufficient and competent investment management, administrative and
compliance staff experienced in managing accounts similar to the Fund
shall have charge at all times of the conduct of, and shall maintain close
supervision of, the investments of the Fund. For the avoidance of doubt,
the Sub-Adviser shall ensure that, if the Trustees of the Fund authorize
the Sub-Adviser to delegate any of its obligations under the Agreement,
any affiliate or third party to whom its duties have been delegated shall
comply with the foregoing.
(v) No Detrimental Agreement. The Sub-Adviser represents and
warrants that it has no arrangement or understanding with any party, other
than the Fund, that would influence the decision of the Sub-Adviser with
respect to its selection of securities for the Fund, and that all
selections shall be done in accordance with what is in the best interest
of the Fund.
(vi) Conflicts. The Sub-Adviser shall act honestly, in good
faith and in the best interests of the Fund including requiring any of its
personnel with knowledge of the Fund's activities to place the interest of
the Fund first, ahead of their own interests, in all personal trading
scenarios that may involve a conflict of interest with the Fund.
(vii) Representations. The representations and warranties in
this Section 7 shall be deemed to be made on the date this Agreement is
executed and at the time of delivery of the monthly compliance report
required by Section 3(a), whether or not specifically referenced in such
certificate.
(b) Representations of the Adviser:
(i) Properly Licensed. The Adviser is registered as an
investment adviser under the Advisers Act, and will remain so registered
for the duration of this Agreement. The Adviser agrees to promptly notify
the Sub-Adviser of the occurrence of any event that would disqualify the
Adviser from serving as an investment adviser to a registered investment
company. The Adviser is in compliance in all material respects with all
applicable federal and state law in connection with its investment
management operations.
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(ii) ADV Disclosure. The Adviser has provided the Sub-Adviser
with a copy of Part II of its FORM ADV and will promptly furnish any
amendment to Part II of its Form ADV to the Sub-Adviser. The information
contained in the Adviser's Form ADV is accurate and complete in all
material respects and does not omit to state any material fact necessary
in order to make the statements contained therein not misleading.
(iii) Fund Authorization. The Adviser has been duly authorized
by the Fund to execute and deliver this Agreement.
8. SUB-ADVISER'S COMPENSATION. The Adviser shall pay to the Sub-Adviser,
as compensation for the Sub-Adviser's services hereunder, a fee, determined as
described in Schedule A that is attached hereto and made a part hereof. Such fee
shall be computed daily and paid monthly in arrears by the Adviser. The Fund
shall have no responsibility for any fee payable to the Sub-Adviser. In the
event that the fee paid to the Adviser for advising the Fund is reduced by
regulatory authorities or the Board for any reason whatsoever, the fee hereunder
shall be subject to the same percentage reduction.
The method for determining net assets of the Fund for purposes hereof
shall be the same as the method for determining net assets for purposes of
establishing the offering and redemption prices of Fund shares as described in
the Fund's prospectus. In the event of termination of this Agreement, the fee
provided in this Section shall be computed on the basis of the period ending on
the last business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current month as a
percentage of the total number of days in such month.
9. INDEPENDENT CONTRACTOR. In the performance of its duties hereunder, the
Sub-Adviser is and shall be an independent contractor and, unless otherwise
expressly provided herein or otherwise authorized in writing, shall have no
authority to act for or represent the Fund or the Adviser in any way or
otherwise be deemed to be an agent of the Fund or the Adviser. If any occasion
should arise in which the Sub-Adviser gives any advice to its clients concerning
the shares of the Fund, the Sub-Adviser will act solely as investment counsel
for such clients and not in any way on behalf of the Fund.
10. ASSIGNMENT AND AMENDMENTS. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of (i) its
assignment, including any change in control of the Adviser or the Sub-Adviser,
as defined in the 1940 Act, or (ii) in the event of the termination of the
Management Agreement; provided that such termination shall not relieve the
Adviser or the Sub-Adviser of any liability incurred hereunder.
This Agreement may not be added to or changed orally and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act, when applicable.
11. DURATION AND TERMINATION.
(a) This Agreement shall become effective as of the date executed
and shall remain in full force and effect continually thereafter, subject
to renewal as provided in
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Section 11(d) and unless terminated automatically as set forth in Section
10 hereof or until terminated as follows:
(b) The Adviser may at any time terminate this Agreement by not more
than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the
Sub-Adviser. In addition, the Fund may cause this Agreement to terminate
either (i) by vote of its Board or (ii) upon the affirmative vote of a
majority of the outstanding voting securities of the Fund; or
(c) The Sub-Adviser may at any time terminate this Agreement by not
more than sixty (60) days' nor less than thirty (30) days' written notice
delivered or mailed by registered mail, postage prepaid, to the Adviser;
or
(d) This Agreement shall automatically terminate on December 31st of
any year, beginning on December 31, 2005, in which its terms and renewal
shall not have been approved by (A) (i) a majority vote of the Board or
(ii) the affirmative vote of a majority of the outstanding voting
securities of the Fund; provided, however, that if the continuance of this
Agreement is submitted to the shareholders of the Fund for their approval
and such shareholders fail to approve such continuance of this Agreement
as provided herein, the Sub-Adviser may continue to serve hereunder as to
the Fund in a manner consistent with the 1940 Act and the rules and
regulations thereunder; and (B) a majority vote of the Trustees who are
not "interested persons" (as set forth in the 1940 Act, subject, however,
to such exemptions as may be granted by the Commission under the 0000 Xxx)
of the Fund, the Adviser or the Sub-Adviser, at a meeting called for the
purpose of voting on such approval.
(e) For the purposes of this Agreement, "Affirmative vote of a
majority of the outstanding voting securities of the Fund" shall have the
meaning set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under the 1940 Act or any interpretations
of the staff of the Commission.
12. LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be liable to
the Adviser or the Fund for any losses, claims, damages, liabilities or
litigation (including legal and other expenses) incurred or suffered by the
Adviser or the Fund as a result of any error of judgment or mistake of law by
the Sub-Adviser with respect to the Fund, except that nothing in this Agreement
shall operate or purport to operate in any way to exculpate, waive or limit the
liability of the Sub-Adviser for, and the Sub-Adviser shall indemnify and hold
harmless the Adviser and the Fund against, any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses) by
reason of or arising out of: (a) the Fund's failure to satisfy the
diversification or source of income requirements of Subchapter M of the Code by
reason of any action or omission of the Sub-Adviser, unless acting at the
direction of the Adviser, (b) the Sub-Adviser's willful misfeasance, bad faith
or gross negligence generally in the performance of its duties hereunder or its
reckless disregard of its obligations and duties under this Agreement or (c) the
Fund or the Sub-Adviser being in violation in any material respect of any
applicable federal or state law, rule or regulation or any investment policy or
restriction set forth in the Fund's Registration Statement or any written
guidelines or instruction provided in
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writing by the Board or the Adviser, by reason of any action or omission of the
Sub-Adviser within the scope of the Sub-Adviser's services hereunder.
13. ENFORCEABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
14. LIMITATION OF LIABILITY. The parties to this Agreement acknowledge and
agree that all litigation arising hereunder, whether direct or indirect, and of
any and every nature whatsoever shall be satisfied solely out of the assets of
the Fund and that no Trustee, officer or holder of shares of beneficial interest
of the Fund shall be personally liable for any of the foregoing liabilities. The
Fund's Certificate of Trust, as amended from time to time, is on file in the
Office of the Secretary of State of the State of Delaware. Such Certificate of
Trust and the Fund's Agreement and Declaration of Trust describe in detail the
respective responsibilities and limitations on liability of the Trustees,
officers, and holders of shares of beneficial interest.
15. JURISDICTION. This Agreement shall be governed by and construed in
accordance with the substantive laws of The Commonwealth of Massachusetts and
the Sub-Adviser consents to the jurisdiction of courts, both state or federal,
in Boston, Massachusetts, with respect to any dispute under this Agreement.
16. 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.
17. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
signed on their behalf by their duly authorized officers as of the date first
above written.
PIONEER INVESTMENT MANAGEMENT, INC.
By:____________________________________
Name:
Title:
HIGHLAND CAPITAL MANAGEMENT, L.P.
By: Strand Advisors, Inc., as general
partner
By:____________________________________
Name:
Title:
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SCHEDULE A
0.35% of average daily net assets
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