APPENDIX A
SUBADVISORY AGREEMENT
SUBADVISORY AGREEMENT made as of the ____ day of March, 1996, by and
among PIONEER REAL ESTATE SHARES, a Delaware business trust (the "Fund"),
PIONEERING MANAGEMENT CORPORATION, a Delaware corporation (the "Manager") and
BOSTON FINANCIAL SECURITIES, INC., a Massachusetts corporation (the
"Subadviser").
W I T N E S S E T H
WHEREAS, the Fund is an open-end, management investment company,
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and the Manager and the Subadviser are investment advisers registered
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, pursuant to authority granted to the Manager by the Fund's
Board of Trustees and pursuant to the provisions of the Management Contract
dated as of September 26, 1995 between the Manager and the Fund (the "Management
Contract"), the Manager has selected the Subadviser to act as a sub-investment
adviser of the Fund and to provide certain other 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 agreements herein
contained, it is agreed as follow:
1. The Subadviser's Services.
(a) The Subadviser shall, to the extent reasonably required in the
conduct of the business of the Fund and upon request by the Fund or the Manager,
(i) identify, analyze and make investment recommendations regarding real estate
industry companies, including the real estate properties and other permissible
investments of the Fund, (ii) analyze market conditions affecting the real
estate industry generally and specific geographical and securities markets in
which the Fund may invest or is invested, (iii) continuously review and analyze
the investments in the Fund's portfolio, and (iv) furnish to the Manager and the
Fund advisory reports based on such analysis. The Subadviser shall use its best
efforts in the preparation of such reports and will endeavor to consult the
persons and sources believed by it to have information available with respect to
the contents of such reports.
The Subadviser shall use its best efforts to ensure that any
recommendations it makes to the Manager regarding the purchase and sale of
portfolio securities are in compliance with the provisions of the Fund's
Declaration of Trust and By-laws and the 1940 Act, and with the investment
objectives, policies and restrictions (including, without limitation, the
requirements of Subchapter M of the Internal Revenue Code of 1986, as amended,
for qualification as a regulated investment company) of the Fund, as each of the
same shall be from time to time in effect as set forth in the Fund's Prospectus
and Statement of Additional Information, or any investment guidelines or other
instructions received in writing from the Manager, and subject, further, to such
policies and instructions as the Manager may from time to time establish and
deliver to the Subadviser. Notwithstanding the foregoing, pursuant to the terms
of the Management Contract, the Manager is solely responsible for the day-to-day
management of the Fund's investment portfolio and for ensuring that the Fund's
investments comply with the Fund's Declaration of Trust and By-laws and the 1940
Act, and with the investment objectives, policies and restrictions of the Fund.
(b) The Subadviser 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 Subadviser to supply to
the Manager, the Fund or its Trustees the information required to be supplied
under this Agreement.
(c) The Subadviser shall maintain separate books and detailed records
of all matters pertaining to the Fund (the "Fund's Books and Records"). The
Fund's Books and Records shall be available to the Manager at any time upon
request and shall be available for telecopying without delay to the Manager
during any day that the Fund is open for business.
(d) The Subadviser shall also ensure that its Access Persons (as
defined in the Fund's Code of Ethics) comply in all respects with the Fund's
Code of Ethics, as in effect from time to time.
(e) The Subadviser shall inform the Manager and the Fund's Trustees on
a current basis of changes in investment strategy or tactics or in key
personnel. The Subadviser will make its officers and employees available to meet
with the Fund's Trustees at least annually on due notice to review the
investments of the Fund in light of current and prospective economic and market
conditions.
(f) From time to time as the Manager or the Trustees of the Fund may
reasonably request, the Subadviser shall furnish to the Manager and to each of
the Fund's Trustees reports on securities held by the Fund, all in such detail
as the Manager or the Trustees may reasonably request.
(g) It shall be the duty of the Subadviser to furnish to the Trustees
of the Fund such information as may reasonably be necessary in order for the
Trustees to evaluate this Agreement or any proposed amendments thereto for the
purposes of casting a vote pursuant to Section 8 hereof.
2. Allocation of Charges and Expenses. The Subadviser will bear its own
costs of providing services hereunder. Other than as herein specifically
indicated, the Subadviser shall not be responsible for the Fund's or the
Manager's expenses, including brokerage and other expenses incurred in placing
orders for the purchase and sale of securities. Specifically, the Subadviser
will not be responsible for expenses of the Fund or the Manager, as the case may
be, including, but not limited to, the following: (i) charges and expenses for
determining from time to time the value of the Fund's net assets and the keeping
of its books and records and related overhead; (ii) the charges and expenses of
auditors; (iii) the charges and expenses of any custodian, transfer agent, plan
agent, dividend disbursing agent and registrar appointed by the Fund; (iv)
brokers' 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, 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 and/or its shares with the
Securities and Exchange Commission (the "Commission"), state or blue sky
securities agencies and foreign countries, including the preparation of
Prospectuses and Statements of Additional Information for filing with the
Commission; (vii) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and distributing prospectuses, notices, proxy statements and
all reports to shareholders and to governmental agencies; (viii) charges and
expenses of legal counsel to the Fund and the Trustees; (ix) distribution fees
paid by the Fund in accordance with Rule 12b-1 promulgated by the Commission
pursuant to the 1940 Act; (x) compensation and expenses of Trustees of the Fund.
The
Fund or the Manager, as the case may be, shall reimburse the Subadviser for any
such expenses or other expenses of the Fund or the Manager, as may be reasonably
incurred by such Subadviser on behalf of the Fund or the Manager. The Subadviser
shall keep and supply to the Fund and the Manager adequate records of all such
expenses.
3. Information supplied by the Manager. The Manager shall provide the
Subadviser with the Fund's Declaration of Trust, By-laws, Prospectus and
Statement of Additional Information, and instructions, as in effect from time to
time; and the Subadviser shall have no responsibility for actions taken in
reliance on any such documents.
4. Representations, Warranties and Covenants. The Subadviser represents
and warrants to each of the Fund and the Manager that it is registered as an
"investment adviser" under the Subadvisers Act and covenants that it will remain
so registered for the duration of this Agreement.
The Subadviser has reviewed the Registration Statement of the Fund as
filed with the Commission and represents and warrants that with respect to
disclosure about the Subadviser or information relating directly or indirectly
to the Subadviser, such Registration Statement contains, as of the date hereof,
no untrue statement of any material fact and does not omit any statement of
material fact which was required to be stated therein or necessary to make the
statements contained therein not misleading.
Except as otherwise provided in Section 1(a) hereof, the Subadviser
agrees to comply with the requirements of the 1940 Act and the Advisers Act 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 with the
provisions of the Registration Statement, as amended or supplemented, of the
Fund.
5. Subadviser's Compensation. The Manager shall pay to the Subadviser,
as compensation for the Subadviser's services hereunder, a fee equal to 0.25%
per annum of the Fund's average daily net assets up to $27 million of such
assets and 0.50% per annum of average daily net assets in excess of $27 million.
Such fee shall be computed daily and paid monthly. The Fund shall have no
responsibility for any fee payable to the Subadviser.
The method of determining net assets of the Fund for purposes hereof
shall be the same as the method of determining net assets for purposes of
establishing the offering and redemption price of Fund shares as described in
the Fund's Prospectus. If this Agreement shall be effective for only a portion
of a month, the aforesaid fee shall be prorated for that portion of such month
during which this Agreement is in effect.
In the event that the advisory fee payable by the Fund to the Manager
shall be reduced or the Manager agrees, after written notice to the Subadviser,
to utilize a portion of the advisory fee to make payments to a third party, the
amount payable to the Subadviser shall be likewise reduced by a proportionate
amount. The Subadviser may from time to time agree not to impose all or a
portion of its fee otherwise payable hereunder (in advance of the time such fee
or portion thereof would otherwise accrue). Any such fee reduction may be
discontinued or modified by the Subadviser at any time.
6. Independent Contractor. In the performance of its duties hereunder,
the Subadviser 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 in any way or otherwise be deemed to
be an agent of the Fund or of the Manager.
7. Assignment and Amendments. This Agreement shall automatically
terminate, without the payment of any penalty, in the event of (i) its
assignment, including any change of control of the Manager or the Subadviser, or
(ii) in the event of the termination of the Management Contract; provided that
such termination shall not relieve the Manager or the Subadviser of any
liability incurred hereunder.
The terms of this Agreement shall not be changed unless such change is
approved at a meeting by the affirmative vote of a majority of the outstanding
voting securities of the Fund and unless also approved by the affirmative vote
of a majority of Trustees of the Fund voting in person, including a majority of
the Trustees who are not interested persons of the Fund, the Manager or the
Subadviser, at a meeting called for the purpose of voting on such change.
8. Duration and Termination. This Agreement shall become effective as
of the date first above written and shall remain in full force and effect
continually thereafter unless terminated automatically as set forth in Section 7
hereof or until terminated as follows:
(a) The Fund or the Manager 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 Subadviser.
Action of the Fund under this Subsection may be taken either (i) by vote of its
Trustees or (ii) by the affirmative vote of a majority of the outstanding voting
securities of the Fund;
(b) The Subadviser 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 Manager; or
(c) This Agreement shall automatically terminate on May 31 of any year
beginning on May 31, 1997, in which its terms and renewal shall not have been
approved by (i) a majority vote of the Trustees of the Fund voting in person,
including a majority of the Trustees who are not interested persons of the Fund,
the Manager or the Subadviser, at a meeting called for the purpose of voting on
such approval 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 Subadviser may continue to serve hereunder as to the Fund
in a manner consistent with the 1940 Act and the rules and regulations
thereunder.
Termination of this Agreement pursuant to this Section shall be without
payment of any penalty.
In the event of termination of this Agreement for any reason, the
Subadviser shall, immediately upon notice of termination or on such later date
as may be specified in such notice, cease all activity on behalf of the Fund and
with respect to any of its assets, except as expressly directed by the Manager.
In addition, the Subadviser shall deliver the Fund's Books and Records to the
Manager by such means and in accordance with such schedule as the Manager shall
direct and shall otherwise cooperate, as reasonably directed by the Manager, in
the transition of portfolio asset management to any successor of the Subadviser,
including the Manager.
9. Certain Definitions. For the purposes of this Agreement:
(a) "Affirmative vote of a majority of the outstanding voting
securities of the Fund" means the affirmative vote, at an annual or special
meeting of shareholders of the Fund, duly called and held, (a) of 67% or more of
the shares of the Fund present (in person or by proxy) and entitled to vote at
such meeting, if the holders of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present (in person or by proxy), or
(b) of more than 50% of the outstanding shares of the Fund entitled to vote at
such meeting, whichever is less.
(b) "Interested persons" and "Assignment" shall have their respective
meanings as set forth in the 1940 Act, subject, however, to such exemptions as
may be granted by the Commission under said Act.
10. Liability and Indemnification. In the absence of willful
misfeasance, bad faith or gross negligence on the part of the Subadviser, or of
reckless disregard of its obligations and duties hereunder (collectively,
"Malfeasance"), the Subadviser shall not be subject to any liability to the
Manager or the Fund, to any shareholder of the Fund, or to any person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder. Nothing herein, however, shall derogate from the
Subadviser's obligations under federal and state securities laws (collectively,
the "Securities Laws").
The Manager shall indemnify the Subadviser for all liabilities and
related costs, including reasonable attorney's fees, which the Subadviser may
sustain in connection with the discharge without Malfeasance or negligence of
its obligations hereunder and in accordance with the Securities Laws. The
Subadviser shall indemnify the Manager and the Fund for all liabilities and
related costs, including reasonable attorneys fees, which either of them may
sustain as a result of the Subadviser's Malfeasance or violation of the
Securities Laws.
11. 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 uneforceability 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.
12. 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 portfolio affected thereby 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 Declaration of Trust describe
in detail the respective responsibilities and limitations on liability of the
Trustees, officers, and holders of shares of beneficial interest.
13. Jurisdiction. This Agreement shall be governed by and construed in
accordance with the substantive laws of The Commonwealth of Massachusetts and
the Subadviser consents to the jurisdiction of courts, both state or federal, in
Boston, Massachusetts, with respect to any dispute under this Agreement.
14. 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.
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.
ATTEST: PIONEER REAL ESTATE SHARES
Name: Xxxxxx X. Xxxxx Name: Xxxx X. Xxxxx, Xx.
Title: Secretary Title: President
ATTEST: PIONEERING MANAGEMENT
CORPORATION
Name: Xxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: Secretary Title: President
ATTEST: BOSTON FINANCIAL SECURITIES, INC.
Name: Name:
Title: Title
