EXHIBIT (k)(5)
ADDITIONAL COMPENSATION AGREEMENT
ADDITIONAL COMPENSATION AGREEMENT (the "Agreement"), dated as of December
[ ], 2004, among Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), Pioneer Investment Management, Inc. ("Pioneer")
and Highland Capital Management, L.P. ("Highland," and together with Pioneer,
the "Advisers" and individually each an "Adviser").
WHEREAS, Pioneer Floating Rate Trust (including any successor by merger or
otherwise, the "Fund") is a diversified, closed-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), and its common shares are registered under the Securities Act of
1933, as amended; and
WHEREAS, Pioneer is the investment manager and the administrator of the
Fund;
WHEREAS, Highland is the investment subadviser of the Fund;
WHEREAS, Xxxxxxx Xxxxx is acting as lead underwriter in an offering of the
Fund's common shares;
WHEREAS, the Advisers desire to provide additional compensation to Xxxxxxx
Xxxxx for acting as lead underwriter in an offering of the Fund's common shares;
and
WHEREAS, the Advisers desire to retain Xxxxxxx Xxxxx to provide
after-market support services designed to maintain the visibility of the Fund on
an ongoing basis, and Xxxxxxx Xxxxx is willing to render such services;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
1. (a) The Advisers hereby employ Xxxxxxx Xxxxx, for the period and on the
terms and conditions set forth herein, to provide the following
services at the reasonable request of Pioneer:
(1) after-market support services designed to maintain the
visibility of the Fund on an ongoing basis.
(2) relevant information, studies or reports regarding
general trends in the closed-end investment company and
asset management industries, if reasonably obtainable,
and consult with representatives of Pioneer in
connection therewith; and
(3) information to and consult with Pioneer with respect to
applicable strategies designed to address market value
discounts, if any.
(b) At the request of Pioneer, Xxxxxxx Xxxxx shall limit or cease any
action or service provided hereunder to the extent and for the time
period requested by Pioneer; provided, however, that pending
termination of this Agreement as provided for in Section 7 hereof,
any such limitation or cessation shall not relieve the Advisers of
their payment obligations pursuant to Section 2 hereof.
(c) Xxxxxxx Xxxxx will promptly notify Pioneer if it learns of any
material inaccuracy or misstatement in, or material omission from,
any written information, as of the date such information was
published, provided by Xxxxxxx Xxxxx to the Advisers in connection
with the performance of services by Xxxxxxx Xxxxx under this
Agreement.
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2. The Advisers shall pay Xxxxxxx Xxxxx an aggregate fee computed weekly and
payable quarterly in arrears commencing [ ], 2005 at an annualized rate of
0.15% of the Fund's Managed Assets (as defined below) for a term as
described in Section 7 hereof; provided that the total amount of the fee
hereunder shall not exceed [ ]% of the total price to the public of the
Fund's common shares offered by the prospectus dated December [ ], 2004
(including all Initial Securities and Option Securities as such terms are
described in the Purchase Agreement, dated December [ ], 2004, by and
among the Fund, Pioneer and each of the Underwriters named therein (the
"Purchase Agreement"). The sum total of this fee, [any additional
compensation fees payable to [ ],] plus the amount of the expense
reimbursement of $[ ] per common share payable by the Fund to the
underwriters pursuant to the Purchase Agreement shall not exceed 4.5% of
the total price of the Fund's common shares offered by the Prospectus.
"Managed Assets" is defined as the total assets of the Fund (including any
assets attributable to any Preferred Shares that may be outstanding or
otherwise attributable to the use of leverage) minus the sum of accrued
liabilities (other than debt representing financial leverage). All
quarterly fees payable hereunder shall be paid to Xxxxxxx Xxxxx within 15
days following the end of each calendar quarter.
3. The amount of the fee payable hereunder to Xxxxxxx Xxxxx by each Adviser
shall be determined by agreement of the Advisers; provided, however, that
if the full amount of the fee for a quarter is not paid to Xxxxxxx Xxxxx
within 15 days of the end of such quarter, Pioneer shall be solely
responsible for paying any deficiency to Xxxxxxx Xxxxx.
4. The Advisers shall be permitted to discharge all or a portion of their
payment obligations hereunder upon prepayment in full or in part of the
remaining balance due of the maximum additional commission amount
described in paragraph 2 above.
5. Each Adviser acknowledges that the services of Xxxxxxx Xxxxx provided for
hereunder do not include any advice as to the value of securities or
regarding the advisability of purchasing or selling any securities for the
Fund's portfolio. No provision of this Agreement shall be considered as
creating, nor shall any provision create, any obligation on the part of
Xxxxxxx Xxxxx, and Xxxxxxx Xxxxx is not hereby agreeing, to: (i) furnish
any advice or make any recommendations regarding the purchase or sale of
portfolio securities or (ii) render any opinions, valuations or
recommendations of any kind or to perform any such similar services in
connection with providing the services described in Section 1 hereof.
6. Nothing herein shall be construed as prohibiting Xxxxxxx Xxxxx or its
affiliates from providing similar or other services to any other clients
(including other registered investment companies or other investment
managers), so long as Xxxxxxx Xxxxx'x services to the Advisers are not
impaired thereby.
7. The term of this Agreement shall commence upon the date referred to above
and shall be in effect so long as Pioneer acts as the investment manager
to the Fund pursuant to the Investment Management Agreement (as such term
is defined in the Purchase Agreement) or other subsequent advisory
agreement.
8. Each Adviser will xxxxxxx Xxxxxxx Xxxxx with such non-confidential
information as Xxxxxxx Xxxxx reasonably requests to perform its assignment
hereunder (all such information so furnished being the "Information").
Each Adviser recognizes and confirms that Xxxxxxx Xxxxx (a) will use and
rely primarily on the Information and on information available from
generally recognized public sources in performing the services
contemplated by this Agreement without having independently verified the
same and (b) does not assume responsibility for the accuracy or
completeness of the Information and such other information. To the best of
each Adviser's knowledge, the
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Information to be furnished by it, when delivered, will be true and
correct in all material respects and will not contain any material
misstatement of fact or omit to state any material fact necessary to make
the statements contained therein not misleading. An Adviser will promptly
notify Xxxxxxx Xxxxx if it learns of any material inaccuracy or
misstatement in, or material omission from, any Information delivered to
Xxxxxxx Xxxxx.
9. Each Adviser agrees that Xxxxxxx Xxxxx shall have no liability to the
Advisers or the Fund for any act or omission to act by Xxxxxxx Xxxxx in
the course of its performance under this Agreement, in the absence of
gross negligence or willful misconduct on the part of Xxxxxxx Xxxxx. Each
Adviser agrees to the indemnification and other agreements set forth in
the Indemnification Agreement attached hereto, the provisions of which are
incorporated herein by reference and shall survive the termination,
expiration or supersession of this Agreement.
10. This Agreement and any claim, counterclaim or dispute of any kind or
nature whatsoever arising out of or in any way relating to this Agreement
("Claim") shall be governed by and construed in accordance with the laws
of the State of New York.
11. No Claim may be commenced, prosecuted or continued in any court other than
the courts of the State of New York located in the City and County of New
York or in the United States District Court for the Southern District of
New York, which courts shall have exclusive jurisdiction over the
adjudication of such matters, and the Advisers and Xxxxxxx Xxxxx consent
to the jurisdiction of such courts and personal service with respect
thereto. Each of Xxxxxxx Xxxxx and the Advisers waives all right to trial
by jury in any proceeding (whether based upon contract, tort or otherwise)
in any way arising out of or relating to this Agreement. Each Adviser
agrees that a final judgment in any proceeding or counterclaim brought in
any such court shall be conclusive and binding upon it and may be enforced
in any other courts to the jurisdiction of which such Adviser is or may be
subject, by suit upon such judgment.
12. This Agreement may not be assigned by either party without the prior
written consent of the other party.
13. This Agreement (including the attached Indemnification Agreement) embodies
the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof. If any provision of this Agreement is determined to be
invalid or unenforceable in any respect, such determination will not
affect such provision in any other respect or any other provision of this
Agreement, which will remain in full force and effect. This Agreement may
not be amended or otherwise modified or waived except by an instrument in
writing signed by Xxxxxxx Xxxxx, Pioneer and Highland.
14. All notices required or permitted to be sent under this Agreement shall be
sent, if to Pioneer:
Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
or if to Highland:
[_________]
or if to Xxxxxxx Xxxxx:
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Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center
New York, New York 10080
Attention: Xxx Xxx
or such other name or address as may be given in writing to the other
parties. Any notice shall be deemed to be given or received on the third
day after deposit in the US mail with certified postage prepaid or when
actually received, whether by hand, express delivery service or facsimile
transmission, whichever is earlier.
15. This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and all of which taken together constitute one
and the same agreement.
[signatures on following page]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Additional
Compensation Agreement as of the date first above written.
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: _____________________________
Name:
Title:
PIONEER INVESTMENT MANAGEMENT, INC.
By: _____________________________
Name:
Title:
HIGHLAND CAPITAL MANAGEMENT, L.P.
By: _____________________________
Name:
Title:
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XXXXXXX XXXXX & CO. INDEMNIFICATION AGREEMENT
December [ ], 2004
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the engagement of Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") to provide the undersigned
(together with their respective affiliates and subsidiaries, referred to as the
"Companies") with the services set forth in the Additional Compensation
Agreement dated December [ ], 2004 among the Companies and Xxxxxxx Xxxxx (the
"Agreement"), in the event that Xxxxxxx Xxxxx becomes involved in any capacity
in any claim, suit, action, proceeding, investigation or inquiry (including,
without limitation, any shareholder or derivative action or arbitration
proceeding) (collectively, a "Proceeding") in connection with or in any way
relating to the services referred to in the Agreement or arising out of the
services contemplated by the Agreement, the Companies jointly and severally
agree to indemnify, defend and hold Xxxxxxx Xxxxx harmless to the fullest extent
permitted by law, from and against any losses, claims, damages, liabilities and
expenses in connection with or in any way relating to the services referred to
in the Agreement or arising out of the services contemplated by the Agreement,
except to the extent that it shall be determined by a court of competent
jurisdiction in a judgment that has become final in that it is no longer subject
to appeal or other review, that such losses, claims, damages, liabilities and
expenses resulted solely from the gross negligence or willful misconduct of
Xxxxxxx Xxxxx. In addition, in the event that Xxxxxxx Xxxxx becomes involved in
any capacity in any Proceeding in connection with or in any way relating to the
services referred to in the Agreement or arising out of the services
contemplated by the Agreement, the Companies will jointly and severally
reimburse Xxxxxxx Xxxxx for its legal and other expenses (including the cost of
any investigation and preparation) as such expenses are incurred by Xxxxxxx
Xxxxx in connection therewith. If such indemnification were not to be available
for any reason, the Companies agree to contribute to the losses, claims,
damages, liabilities and expenses involved (i) in the proportion appropriate to
reflect the relative benefits received or sought to be received by the Companies
and their respective stockholders and affiliates and other constituencies, on
the one hand, and Xxxxxxx Xxxxx, on the other hand, in the services contemplated
by the Agreement or (ii) if (but only if and to the extent) the allocation
provided for in clause (i) is for any reason held unenforceable, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Companies and their
respective stockholders and affiliates and other constituencies, on the one
hand, and the party entitled to contribution, on the other hand, as well as any
other relevant equitable considerations. The Companies agree that for the
purposes of this paragraph the relative benefits received, or sought to be
received, by the Companies and their respective stockholders and affiliates, on
the one hand, and the party entitled to contribution, on the other hand, for
services as contemplated shall be deemed to be in the same proportion that the
total value received or paid or contemplated to be received or paid by the
Companies or their respective stockholders or affiliates and other
constituencies, as the case may be, as a result of or in connection with the
services (whether or not consummated) for which Xxxxxxx Xxxxx has been retained
bear to the fees paid to Xxxxxxx Xxxxx under the Agreement; provided, that in no
event shall the
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Companies contribute less than the amount necessary to assure that Xxxxxxx Xxxxx
is not liable for losses, claims, damages, liabilities and expenses in excess of
the amount of fees actually received by Xxxxxxx Xxxxx pursuant to the Agreement.
Relative fault shall be determined by reference to, among other things, whether
any alleged untrue statement or omission or any other alleged conduct relates to
information provided by the Companies or other conduct by the Companies (or
their respective employees or other agents), on the one hand, or by Xxxxxxx
Xxxxx, on the other hand. The Companies will not settle any Proceeding in
respect of which indemnity may be sought hereunder, whether or not Xxxxxxx Xxxxx
is an actual or potential party to such Proceeding, without Xxxxxxx Xxxxx'x
prior written consent. For purposes of this Indemnification Agreement, Xxxxxxx
Xxxxx shall include Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, any of its affiliates, each other person, if any, controlling
Xxxxxxx Xxxxx or any of its affiliates, their respective officers, current and
former directors, employees and agents, and the successors and assigns of all of
the foregoing persons. The foregoing indemnity and contribution agreement shall
be in addition to any rights that any indemnified party may have at common law
or otherwise.
The Companies agree that neither Xxxxxxx Xxxxx nor any of its affiliates,
directors, agents, employees or controlling persons shall have any liability to
the Companies or any person asserting claims on behalf of or in right of the
Companies in connection with or as a result of either Xxxxxxx Xxxxx'x engagement
under the Agreement or any services referred to in the Agreement, including,
without limitation, related services and activities prior to the date of the
Agreement, except to the extent that it shall be determined by a court of
competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review that any losses, claims, damages,
liabilities or expenses incurred by the Companies resulted solely from the gross
negligence or willful misconduct of Xxxxxxx Xxxxx in performing the services
that are the subject of the Agreement.
THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF
ANY KIND OR NATURE WHATSOEVER ARISING OUT OF OR IN ANY WAY RELATING TO THIS
AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS SET FORTH BELOW,
NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN ANY COURT OTHER THAN THE
COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WHICH
COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE ADJUDICATION OF SUCH MATTERS,
AND THE COMPANIES AND XXXXXXX XXXXX CONSENT TO THE JURISDICTION OF SUCH COURTS
AND PERSONAL SERVICE WITH RESPECT THERETO. THE COMPANIES HEREBY CONSENT TO
PERSONAL JURISDICTION, SERVICE AND VENUE IN ANY COURT IN WHICH ANY CLAIM ARISING
OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT IS BROUGHT BY ANY THIRD PARTY
AGAINST XXXXXXX XXXXX OR ANY INDEMNIFIED PARTY. EACH OF XXXXXXX XXXXX AND THE
COMPANIES WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR CLAIM (WHETHER
BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY WAY RELATING TO
THIS AGREEMENT. THE COMPANIES AGREE THAT A FINAL JUDGMENT IN ANY PROCEEDING OR
CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT BROUGHT IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANIES AND MAY BE
ENFORCED IN ANY OTHER COURTS TO THE JURISDICTION OF WHICH THE COMPANIES ARE OR
MAY BE SUBJECT, BY SUIT UPON SUCH JUDGMENT.
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The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of Xxxxxxx Xxxxx'x engagement. This
Indemnification Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same agreement.
Very truly yours,
PIONEER INVESTMENT MANAGEMENT, INC.
By: ___________________________________
Name:
Title:
HIGHLAND CAPITAL MANAGEMENT, L.P.
By: ___________________________________
Name:
Title:
Accepted and agreed to as of
the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By __________________________________
Name:
Title:
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