QUALIFYING UNDERWRITER
ADDITIONAL COMPENSATION AGREEMENT
July, 2003
Pioneer Investment Management, Inc.
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement dated the date
hereof (the "Underwriting Agreement"), by and among Pioneer Municipal High
Income Trust, a closed-end management investment company (the "Trust"), Pioneer
Investment Management, Inc. ("Pioneer Investment Management" or the "Investment
Adviser") and each of the respective Underwriters named therein, with respect to
the issue and sale of the Trust's common shares of beneficial interest, no par
value (the "Common Shares"), as described therein. Reference is also made to (i)
the Investment Advisory Agreement (the "Investment Advisory Agreement") to be
entered into between the Investment Adviser and the Trust and (ii) the
registration statement on Form N-2 regarding the Common Shares of the Trust (the
"Registration Statement"). Capitalized terms used herein and not otherwise
defined shall have the meanings given to them in the Underwriting Agreement.
The Investment Adviser hereby confirms its agreement with each
Qualifying Underwriter (as defined in Section 1 hereof) with respect to the
additional compensation referred to in the "Underwriting" section of the
Registration Statement, payable by the Investment Adviser to each of the
Qualifying Underwriters. The Investment Adviser agrees to pay to each Qualifying
Underwriter additional compensation (collectively, the "Additional
Compensation") as provided for in Section 3 hereof; provided, however, that such
Additional Compensation shall not exceed an amount equal to 0.15% per annum of
the aggregate average daily managed assets of the Trust (including assets
attributable to any preferred shares or other financial leverage of the Trust
that may be outstanding); and provided, further, that such payments shall not,
in the aggregate, exceed the "Maximum Additional Compensation Amount" (as
defined in Section 4 hereof). The Additional Compensation shall be payable as
set forth in Section 3 hereof.
SECTION 1. Qualifying Underwriters. For the purposes of this
Qualifying Underwriter Additional Compensation Agreement (the "Additional
Compensation Agreement"), UBS Securities LLC (as lead manager of the
Underwriters) and each Underwriter which sells Common Shares of the Trust with
an aggregate purchase price to the public of at least $50,000,000 shall be a
"Class I Qualifying Underwriter" and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated shall be a "Class II Qualifying Underwriter;" provided, however,
that the amount required to qualify as a Class I Qualifying Underwriter may be
reduced with respect to any Underwriter in the sole discretion of the Investment
Adviser (upon
consultation with the lead manager of the Underwriters), and that the Investment
Adviser in its sole discretion (upon consultation with the lead manager of the
Underwriters) may classify any Underwriter as a Class II Qualifying Underwriter.
Class I Qualifying Underwriters and Class II Qualifying Underwriters are
referred to collectively herein as "Qualifying Underwriters." A Qualifying
Underwriter which qualifies as a Class II Qualifying Underwriter shall not also
be a Class I Qualifying Underwriter. Within 60 days following the Closing Date,
the Qualifying Underwriters shall prepare or cause to be prepared and provide to
the Investment Adviser a chart listing each of the Qualifying Underwriters,
which chart shall indicate the aggregate purchase price to the public of the
Common Shares sold by each Qualifying Underwriter and the Pro Rata Percentage
(as defined in Section 2 hereof) of each Qualifying Underwriter and shall be
appended as Schedule A to this Additional Compensation Agreement. Such Schedule
A shall be prepared in good faith by the Qualifying Underwriters and subject to
verification by the Investment Adviser.
SECTION 2. Pro Rata Percentage. Each Qualifying Underwriter shall be
assigned a "Pro Rata Percentage," the numerator of which shall equal the
aggregate purchase price to the public of the Common Shares sold by such
Underwriter as set forth on Schedule A hereto and the denominator of which shall
equal the aggregate purchase price to the public of all of the Common Shares
purchased by the Underwriters pursuant to the Underwriting Agreement.
SECTION 3. Payment of Additional Compensation.
(a) The Investment Adviser shall pay the Additional Compensation,
quarterly in arrears, to each Class I Qualifying Underwriter in an amount equal
to the product of such Qualifying Underwriter's Pro Rata Percentage multiplied
by 0.0250% of the aggregate average daily total managed assets of the Trust for
such quarter (including assets attributable to any preferred shares or other
financial leverage of the Trust that may be outstanding); provided, however,
that in the event that the contractual advisory fee rate payable by the Trust to
the Investment Adviser or such successor or affiliate under the Investment
Advisory Agreement is reduced below 0.60%, the fee payable by the Investment
Adviser to such Qualifying Underwriter shall be reduced in proportion to, and
for the period of, such reduction of the advisory fee, and this agreement shall
be deemed to be amended automatically to reflect the same.
(b) The Investment Adviser shall pay the Additional Compensation,
quarterly in arrears, to each Class II Qualifying Underwriter in an amount equal
to the product of such Qualifying Underwriter's Pro Rata Percentage multiplied
by 0.0375% of the aggregate average daily total managed assets of the Trust for
such quarter (including assets attributable to any preferred shares or other
financial leverage of the Trust that may be outstanding); provided, however,
that in the event that the contractual advisory fee rate payable by the Trust to
the Investment Adviser or such successor or affiliate under the Investment
Advisory Agreement is reduced below 0.60%, the fee payable by the Investment
Adviser to such Qualifying Underwriter shall be reduced in proportion to, and
for the period of, such reduction of the advisory fee, and this agreement shall
be deemed to be amended automatically to reflect the same.
(c) All fees payable hereunder shall be paid to each Qualifying
Underwriter by wire transfer of immediately available Trusts within 15 days
following the end of each calendar quarter to a bank account designated by such
Qualifying Underwriter. At the time of each
payment of Additional Compensation hereunder, the Investment Adviser shall
deliver to each Qualifying Underwriter receiving an installment of Additional
Compensation a statement indicating the amount of the average
daily managed assets of the Trust for such quarter (including assets
attributable to any preferred shares or other financial leverage of the Trust
that may be outstanding) on which such payment was based.
(d) The initial payments of Additional Compensation hereunder shall be
paid with respect to the calendar quarter ending September 30, 2003. In the
event that this Additional Compensation Agreement terminates prior to the end of
a calendar quarter, the Additional Compensation required to be paid hereunder
shall be due and payable within 15 days following the termination hereof and
shall be pro-rated in respect of the period prior to such termination.
Notwithstanding the foregoing, if any payment hereunder would otherwise fall on
a day which is not a business day, it shall be due on the next day which is a
business day. All fees payable hereunder shall be in addition to any fees paid
by the Investment Adviser pursuant to the Underwriting Agreement.
SECTION 4. Maximum Additional Compensation Amount. The "Maximum
Additional Compensation Amount" payable by the Investment Adviser hereunder
shall be, with respect to each Qualifying Underwriter, such amount as, when
taken together with the amount of all underwriting compensation other than the
Additional Compensation received by such Underwriter in connection with the
offering of the Common Shares of the Trust, equals the maximum compensation
allowed under the conduct rules of the National Association of Securities
Dealers, Inc. (which we currently understand is 9.00%), as such rules are then
in effect; provided, that in determining when the maximum amount has been paid,
the value of each of the quarterly payments shall be discounted at the annual
rate of 10% to the closing date of the initial offering of the Common Shares.
SECTION 5. Term. This Additional Compensation Agreement shall
continue coterminously with and so long as the Investment Advisory Agreement,
dated July , 2003, remains in effect between the Trust and Pioneer Investment
Management, or any similar investment advisory agreement with a successor in
interest or affiliate of Pioneer Investment Management remains in effect, as,
and to the extent, that such investment advisory agreement is renewed
periodically in accordance with the Investment Company Act of 1940, as amended.
This Additional Compensation Agreement shall terminate on the earliest to occur
of (a) with respect to any Qualifying Underwriter, the payment by the Investment
Adviser to such Qualifying Underwriter of the Maximum Additional Compensation
Amount, (b) with respect to the Trust, the dissolution and winding up of the
Trust and (c) with respect to the Trust, the date on which the Investment
Advisory Agreement or other investment advisory agreement between the Trust and
the Investment Adviser or any successor in interest to the Investment Adviser,
including but not limited to an affiliate of the Investment Adviser, shall
terminate.
SECTION 6. Not an Investment Adviser. The Investment Adviser
acknowledges that the Underwriters are not providing any advice hereunder as to
the value of securities or regarding the advisability of purchasing or selling
any securities for the Trust. No provision of this Additional Compensation
Agreement shall be considered as creating, nor shall any provision create, any
obligation on the part of any Underwriter, and the Underwriters are 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.
SECTION 7. Not Exclusive. Nothing herein shall be construed as
prohibiting any Underwriter or its respective affiliates from acting as such for
any other clients (including other registered investment companies or other
investment advisers).
SECTION 8. No Liability. The Investment Adviser agrees that no
Underwriter shall have liability to the Investment Adviser or the Trust for any
act or omission to act by such Underwriter in the course of its performance
under this Additional Compensation Agreement, in the absence of gross negligence
or willful misconduct on the part of such Underwriter. The Investment Adviser
agrees to indemnify and hold harmless each Underwriter and its respective
officers, directors, agents and employees against any loss or expense arising
out of or in connection with such Underwriter's performance under this
Additional Compensation Agreement. This provision shall survive the termination,
expiration or supersession of this Additional Compensation Agreement.
SECTION 9. Assignment. This Additional Compensation Agreement may
not be assigned by any party without the prior written consent of each other
party.
SECTION 10. Amendment; Waiver. No provision of this Additional
Compensation Agreement may be amended or waived except by an instrument in
writing signed by the parties hereto.
SECTION 11. Governing Law. This Additional Compensation Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York.
SECTION 12. Counterparts. This Additional Compensation Agreement may
be executed in any number of counterparts, each of which shall be an original,
and all of which, when taken together, shall constitute one agreement. Delivery
of an executed signature page of this Additional Compensation Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
Pioneer Investment Management and the Qualifying Underwriters in accordance with
its terms.
Very truly yours,
UBS SECURITIES LLC
By:
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Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
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Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
PIONEER INVESTMENT MANAGEMENT, INC.
By:
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Name:
Title:
SCHEDULE A
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Aggregate
Name of Qualifying Purchase Price to Public Pro Rata
Underwriter Class of Common Shares Sold Percentage
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UBS Securities LLC I
Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated II
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