Exhibit (k)(2)
SUB-ADMINISTRATION AGREEMENT
This SUB-ADMINISTRATION AGREEMENT, made as of the ___ day of ______,
2007 between PIONEER INVESTMENT MANAGEMENT, INC., a Delaware corporation and a
member of the UniCredito Italiano banking group, register of banking groups
("PIM"), and PRINCETON ADMINISTRATORS, LLC, a Delaware limited liability company
(the "Sub-Administrator").
WITNESSETH:
WHEREAS, PIM has been appointed as administrator of Pioneer Diversified
High Income Trust, a Delaware statutory trust (the "Trust") pursuant to an
administration agreement dated the date hereof (the "Administration Agreement");
WHEREAS, the Trust is a non-diversified closed-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, PIM wishes to retain the Sub-Administrator to perform PIM's
administrative services to the Trust contemplated by the Administration
Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Sub-Administrator. PIM hereby retains the Sub-Administrator
to act as sub-administrator of the Trust, subject to the supervision and
directions of PIM and the Board of Trustees of the Trust as herein set
forth. Subject to the supervision and direction of PIM, the
Sub-Administrator shall perform or arrange for the performance of the
following administrative and clerical services:
(a) Calculate or arrange for the calculation and publication of the
Trust's net asset value in accordance with the Trust's policy as
adopted from time to time by the Board of Trustees;
(b) Maintain, or arrange for the maintenance of, certain books and records
of the Trust, as mutually agreed upon between the parties hereto, that
are required under the Investment Company Act;
(c) Provide the Trust with administrative offices and data processing
facilities as well as the services of persons competent to perform
such administrative and clerical functions as are necessary to provide
effective operation of the Trust;
(d) Maintain the Trust's expense budget and monitor expense accruals;
(e) Arrange for payment of the Trusts' expenses, as PIM directs, which may
include calculation of various contractual expenses of the Trust's
service providers, and the review and approval of invoices for the
Trust's account and submission to a Trust officer for authorization of
payment in a manner to be agreed upon;
(f) Oversee and review calculations of fees paid to the Sub-Administrator,
PIM, the transfer agent and the custodian;
(g) Compute the Trust's yield, total return, expense ratios and portfolio
turnover rate as well as various Trust statistical data as reasonably
requested;
(h) Prepare, for review and approval by officers of the Trust, financial
information for the Trust's quarterly, semi-annual and annual reports,
proxy statements and other communications with shareholders required
or otherwise to be sent to Trust shareholders, and arrange for the
printing and dissemination of such reports and communications to
shareholders;
(i) Prepare reports relating to the business and affairs of the Trust as
may be mutually agreed upon and not otherwise appropriately prepared
by PIM or the Trust's custodian, counsel or auditors;
(j) Prepare, or arrange for preparation for review, approval and execution
by officers of the Trust, the Trust's federal, state and local income
tax returns, and any other required tax returns, as may be mutually
agreed upon;
(k) Calculate the Trust's annual net investment income (including net
realized short-term capital gain) and net realized long-term capital
gain to determine the Trust's minimum
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annual distributions to shareholders and the tax and accounting
treatment of such distributions on a per share basis, to be reviewed
by the Trust's independent public accountants;
(l) Prepare for review by an officer of the Trust the Trust's periodic
financial reports required to be filed with the Securities and
Exchange Commission (the "SEC") on Form NQ, Form N-CSR, Form N-SAR and
Form N-2 and such other reports, forms or filings, as may be mutually
agreed upon;
(m) Prepare such financial information and reports as may be required by
any stock exchange or exchanges on which the Trust's shares are
listed, and such other information and reports required by such stock
exchanges as may be mutually agreed upon;
(n) Prepare such financial information and reports as may be required by
any banks from which the Trust borrows funds;
(o) Prepare reports related to the Trust's preferred stock, if any, as
required by rating agencies;
(p) Assist in the preparation and filing of Forms 3, 4 and 5 pursuant to
Section 16 of the Securities Exchange Act of 1934 and Section 30(f) of
the Investment Company Act for the officers and trustees of the Trust,
such filings to be based on information provided by those persons and
PIM;
(q) Coordinate the performance of administrative and professional services
rendered to the Trust by others, including its custodian, registrar,
transfer agent, dividend disbursing agent and dividend reinvestment
plan agent, as well as auditing and such other services as may from
time to time be mutually agreed;
(r) Consult as necessary with the Trust's officers, independent
accountants, legal counsel, custodian and transfer and dividend
disbursing agent in establishing the accounting policies of the Trust;
(s) Review implementation of any stock purchase or dividend reinvestment
programs authorized by the Board of Trustees;
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(t) Provide such assistance to PIM, the custodian and the Trust's counsel
and auditors as generally may reasonably be required to properly carry
on the business and operations of the Trust;
(u) Respond to, or refer to PIM, the Trust's officers or transfer agent,
shareholder inquiries relating to the Trust; and
(v) Provide such certifications as the Trust shall reasonably require in
connection with the contract required under Section 302 and 901 of the
Xxxxxxxx-Xxxxx Act and the implemented regulations of the SEC.
PIM agrees to deliver and to use its reasonable commercial efforts to cause the
custodian to deliver, on a timely basis, such information to the
Sub-Administrator as may be necessary or appropriate for the Sub-Administrator's
performance of its duties and responsibilities hereunder, including but not
limited to, daily records of transactions, valuation of investments in United
States dollars (which may be based on information provided by a pricing service)
and expenses borne by the Trust, the Trust's management letter to stockholders
and such other information necessary for the Sub-Administrator to prepare the
above referenced reports and filings, and the Sub-Administrator shall be
entitled to rely on the accuracy and completeness of such information in
performing its duties hereunder.
All services are to be furnished through the medium of any officer or employee
of the Sub-Administrator as the Sub-Administrator deems appropriate in order to
fulfill its obligations hereunder.
Each party shall bear all its own expenses incurred in connection with this
Agreement. Printing and dissemination expenses, such as those for reports to
shareholders and proxy statements, shall be expenses of the Trust.
2. Compensation of the Sub-Administrator. PIM will pay the Sub-Administrator a
fee on the first business day of each calendar month for the previous month
equal to the greater of (i) of $[_________] per annum ($[______] per
month), or (ii) at an annual rate equal to [_____]% of the Trust's average
daily Managed Assets (as hereinafter defined) up to $[_____] and [_____]%
of average daily Managed Assets in excess of $[_____]. For the purposes of
determining fees payable to the Sub-Administrator, the value of the Trust's
assets shall be computed at the times and in the manner specified in the
Trust's Registration Statement on Form N-2, as amended from
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time to time (the "Registration Statement"). Compensation by PIM to the
Sub-Administrator shall commence on the date of the first receipt by the
Trust of the proceeds of the sale of its shares to the underwriters as
described in the Registration Statement, and the fee for the period from
the date the Trust shall receive the proceeds of the sale of its shares to
the underwriters as aforesaid to the end of the month during which such
proceeds are so received, shall be pro-rated according to the proportion
that such period bears to the full monthly period. Upon termination of this
Agreement before the end of a month, the fee for such part of that month
shall be pro-rated according to the proportion that such periods bear to
the full monthly period and shall be payable within seven days after the
date of termination of this Agreement. "Managed assets" means the total
assets of the Trust (including any assets attributable to any leverage that
may be outstanding) minus the sum of accrued liabilities (other than
liabilities representing financial leverage). The liquidation preference on
any preferred shares is not a liability.
3. Limitation of Liability, Indemnification.
(a) The Sub-Administrator may, with respect to questions of law, apply for
and obtain the advice and opinion of legal counsel, and with respect
to the application of generally accepted accounting principles or
Federal Tax accounting principles, apply for and obtain the advice and
opinion of accounting experts, at the reasonable expense of the Trust.
The Sub-Administrator shall obtain prior permission of the Trust or
PIM before obtaining the advice and opinion of legal or accounting
experts at the expense of the Trust, and shall not use any counsel or
accounting experts to which the Trust or PIM shall reasonably object.
The Sub-Administrator shall be fully protected with respect to any
action taken or omitted by it in good faith in conformity with this
paragraph.
(b) The Sub-Administrator shall not be liable to the Trust or PIM for any
action taken or omitted to be taken by the Sub-Administrator in
connection with the performance of any of its duties or obligations
under this Agreement, and PIM shall indemnify the Sub-Administrator
and hold the Sub-Administrator harmless from and against all damages,
liabilities, costs and expenses (including reasonable attorneys' fees
and amounts reasonably paid in settlement) incurred by the
Sub-Administrator in or by reason of any
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pending, threatened or contemplated action, suit, investigation or
other proceeding (including an action or suit by or in the right of
the Trust or its security holders) arising out of or otherwise based
upon any action actually or allegedly taken or omitted to be taken by
the Sub-Administrator in connection with the performance of any of its
duties or obligations under this Agreement; provided, however, that
nothing contained herein shall protect or be deemed to protect the
Sub-Administrator against or entitle or be deemed to entitle the
Sub-Administrator to indemnification in respect of any liability to
the Sub-Administrator, the Trust or its security holders to which the
Sub-Administrator would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of its reckless disregard of its duties and
obligations under this Agreement. Such expenses shall be paid by the
Trust in advance of the final disposition of such matter upon invoice
by the Sub-Administrator and receipt by PIM of an undertaking from the
Sub-Administrator to repay such amounts if it shall ultimately be
established that the Sub-Administrator is not entitled to payment of
such expenses hereunder.
(c) As used in this Paragraph 3, the term "Sub-Administrator" shall
include any affiliates of the Sub-Administrator performing services
for the Trust contemplated hereby, and trustees, officers, agents and
employees of the Sub-Administrator or such affiliates. As used in this
Paragraph 3, the term "PIM" shall include any affiliates of PIM
performing services for the Trust contemplated hereby, and Trustees,
officers, agents and employees of PIM or such affiliate.
4. Activities of the Sub-Administrator. The services of the Sub-Administrator
hereunder are not exclusive and nothing in this Agreement shall limit or
restrict the right of the Sub-Administrator to engage in any other business
or to render services of any kind to any other corporation, firm,
individual or association. The Sub-Administrator shall be deemed to be an
independent contractor, unless otherwise expressly provided or authorized
by this Agreement.
5. Duration and termination of this Agreement. This Agreement shall become
effective as of the date on which the Trust's Registration Statement on
Form N-2 shall be declared effective by the SEC and shall thereafter
continue in effect unless terminated as herein provided. This
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Agreement may be terminated by either party hereto (without penalty) at any
time upon not less than 60 days prior written notice to the other party
hereto.
6. Amendments of this Agreement. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved by the Board of
Trustees of the Trust and such amendment is set forth in a written
instrument executed by each of the parties hereto.
7. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts without
reference to choice of law principles thereof and in accordance with the
Investment Company Act. In the case of any conflict, the Investment Company
Act shall control.
8. Counterparts. This Agreement may be executed by the parties hereto in
counterparts, and if executed in more than one counterpart, the separate
instruments shall constitute one agreement.
9. Notices. Any notice or other communication required to be given in writing
pursuant to this Agreement shall be deemed duly given if delivered or
mailed by registered mail, postage prepaid, (1) to the Sub-Administrator at
X.X. Xxx 0000, Xxxxxxxxx, Xxx Xxxxxx 00000-0000, Attention: Xxxxxx X.
Xxxxx, (2) to PIM at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel or (c) to the Trust x/x XXX xx 00 Xxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 Attention: General Counsel.
10. Entire Agreement. This Agreement sets forth the agreement and understanding
of the parties hereto solely with respect to the matters covered hereby and
the relationship between PIM and Princeton Administrators, LLC as
Sub-Administrator. Nothing in this Agreement shall govern, restrict or
limit in any respect any other business dealings between the parties hereto
unless otherwise expressly provided herein.
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11. No Assignment. This Agreement shall not be assigned by either party without
the prior written consent of the other, except that either party may assign
the agreement to another party if such assignment is to a party
controlling, controlled by or under common control with the assigning
party.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
PIONEER INVESTMENT MANAGEMENT, INC.
By:
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Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
PRINCETON ADMINISTRATORS, LLC
By:
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Name:
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Title:
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