Exhibit (k)(1)
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT, made as of the ____ day of ______, 2007
between PIONEER DIVERSIFIED HIGH INCOME TRUST, a Delaware statutory trust (the
"Trust"), and PIONEER INVESTMENT MANAGEMENT, INC., a Delaware corporation and a
member of the UniCredito Italiano banking group, register of banking groups (the
"Administrator").
WITNESSETH:
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, the Trust and the Administrator are entering into an Advisory
Agreement pursuant to which the Administrator will provide investment advice to
the Trust and be responsible for the portfolio management of the Trust; and
WHEREAS, the Trust wishes to retain the Administrator to perform the
administrative services contemplated by this Agreement to the Trust.
NOW, THEREFORE, the parties hereto agree as follows:
1. Duties of the Administrator. The Trust hereby retains the Administrator to
act as administrator of the Trust, subject to the supervision and
directions of the Board of Trustees of the Trust as herein set forth. The
Administrator may retain a sub-administrator to perform any or all of its
obligations under this Agreement. The 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 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 Administrator, 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 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;
(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, 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 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.
All services are to be furnished through the medium of any officer or employee
of the Administrator as the 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. Additional Services to be provided by the Administrator. The Administrator
shall also provide the services set forth in Annex A.
3. Compensation of the Administrator. The Trust will pay the Administrator a
fee on the first business day of each calendar month for the previous month
at an annual rate equal to the greater of (i) of $[_______] per annum
($[_______]per month), or (ii) [_______]% 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 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 time to time
(the "Registration Statement"). Compensation by the Trust to the
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
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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.
4. Limitation of Liability, Indemnification.
(a) The 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
Administrator shall obtain prior permission of the Trust 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 shall reasonably object. The 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 Administrator shall not be liable to the Trust for any action
taken or omitted to be taken by the Administrator in connection with
the performance of any of their respective duties or obligations under
this Agreement, and Trust shall indemnify the Administrator and hold
the Administrator harmless from and against all damages, liabilities,
costs and expenses (including reasonable attorneys' fees and amounts
reasonably paid in settlement) incurred by the Administrator in or by
reason of any 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 Administrator in connection with the performance of
any of their respective duties or obligations under this Agreement;
provided, however, that nothing contained herein shall protect or be
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deemed to protect the Administrator against or entitle or be deemed to
entitle the Administrator to indemnification in respect of any
liability to the Administrator the Trust or its security holders to
which the 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 Administrator and receipt by the Trust of an
undertaking from the Administrator to repay such amounts if it shall
ultimately be established that the Administrator is not entitled to
payment of such expenses hereunder.
(c) As used in this Paragraph 4, the term "Administrator" shall include
any affiliates of the Administrator performing services for the Trust
contemplated hereby, and trustees, officers, agents and employees of
the Administrator or such affiliates.
5. Activities of the Administrator. The services of the Administrator
hereunder are not exclusive and nothing in this Agreement shall limit or
restrict the right of the Administrator to engage in any other business or
to render services of any kind to any other corporation, firm, individual
or association. The Administrator shall be deemed to be an independent
contractor, unless otherwise expressly provided or authorized by this
Agreement.
6. 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 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.
7. 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.
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8. 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.
9. 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.
10. 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 Administrator at 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 Attention: General Counsel or (2)
to the Trust at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 Attention:
General Counsel.
11. 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 the Administrator and the Trust. 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.
12. 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 DIVERSIFIED HIGH INCOME TRUST
By:
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Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary
PIONEER INVESTMENT MANAGEMENT, INC.
By:
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Name: Xxxxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
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ANNEX A - SERVICES TO BE PROVIDED BY THE ADMINISTRATOR
1) PROVISION OF OFFICERS TO THE TRUST
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