QUALIFYING UNDERWRITER
ADDITIONAL COMPENSATION AGREEMENT
July 17, 2003
Pioneer Investment Management, Inc.
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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 ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ 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 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 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
17, 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: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
By: /S/ ▇▇▇▇ ▇. REIT
Name: ▇▇▇▇ ▇. Reit
Title: Executive Director
WACHOVIA CAPITAL MARKETS, LLC
By: /S/ J. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: J. ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: First Vice President
CONFIRMED AND ACCEPTED, as of the date first above written:
PIONEER INVESTMENT MANAGEMENT, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
SCHEDULE A
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AGGREGATE
PURCHASE PRICE TO PUBLIC PRO RATA
NAME OF QUALIFYING UNDERWRITER CLASS OF COMMON SHARES SOLD PERCENTAGE
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UBS Securities LLC I $150,000,000
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Wachovia Capital Markets, LLC I $93,000,000
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▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated II $40,500,000
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