PIONEER MUNICIPAL HIGH INCOME TRUST
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AUCTION AGENCY AGREEMENT
dated as of
Relating to
Auction Preferred Shares
Series A and Series B
Of
PIONEER MUNICIPAL HIGH INCOME TRUST
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DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of ,
2003 is between Pioneer Municipal High Income Trust (the "Fund") and Deutsche
Bank Trust Company Americas, a New York banking corporation.
The Fund proposes to issue an aggregate of preferred shares, par
value $0.00001 per share, liquidation preference $25,000 per share, designated
as Auction Preferred Shares, Series A and Auction Preferred Shares, Series B
(the "Preferred Shares"), pursuant to the Fund's Statement of Preferences (as
defined below).
The Fund desires that Deutsche Bank Trust Company Americas perform
certain duties as agent in connection with each Auction (as defined below) of
Preferred Shares (in such capacity, the "Auction Agent"), and as the transfer
agent, registrar, dividend paying agent and redemption agent with respect to the
Preferred Shares (in such capacity, the "Paying Agent"), upon the terms and
conditions of this Agreement, and the Fund hereby appoints Deutsche Bank Trust
Company Americas as said Auction Agent and Paying Agent in accordance with those
terms and conditions (hereinafter generally referred to as the "Auction Agent,"
except in Sections 3 and 4 below).
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Fund and the Auction Agent agree as follows:
I. DEFINITIONS AND RULES OF CONSTRUCTION.
1.1 TERMS DEFINED BY REFERENCE TO THE STATEMENT OF PREFERENCES.
Capitalized terms used herein but not defined herein shall have the
respective meanings specified in the Statement of Preferences.
1.2 CERTAIN DEFINED TERMS.
As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Agent Member" shall mean a member of the Securities
Depository that will act on behalf of a Beneficial Owner of one or more
Preferred Shares or on behalf of a Potential Beneficial Owner.
(b) "Auction" shall have the meaning specified in Section 2.1
hereof.
(c) "Auction Procedures" shall mean the procedures as from time to
time in effect for conducting Auctions that are set forth in Part II of the
Statement of Preferences.
(d) "Authorized Officer" shall mean each Managing Director, Vice
President, Assistant Vice President and Associate of the Auction Agent and every
other officer or employee of the Auction Agent assigned to its Corporate Trust &
Agency Services and designated as an
"Authorized Officer" for purposes hereof in a written communication from the
Auction Agent to the Fund.
(e) "Broker-Dealer Agreement" shall mean each agreement between
the Auction Agent and a Broker-Dealer substantially in the form attached hereto
as EXHIBIT A.
(f) "Closing" shall mean the date the Fund consummates the
transactions for the issuance and sale of the Preferred Shares.
(g) "Fund Officer" shall mean the Chairman, the President, each
Vice President (whether or not designated by a number or word or words added
before or after the title "Vice President"), the Secretary, the Treasurer, each
Assistant Secretary and each Assistant Treasurer of the Fund and every other
officer or employee of the Fund designated as a "Fund Officer" for purposes
hereof in a notice from the Fund to the Auction Agent.
(h) "Holder" shall be a holder of record of one or more Preferred
Shares, listed as such in the Share Register.
(i) "Settlement Procedures" shall mean the Settlement Procedures
attached as Exhibit A to the Broker-Dealer Agreement.
(j) "Statement of Preferences" shall mean the Statement of
Preferences of the Fund in effect at the time the Registration Statement
relating to the Preferred Shares is declared effective by the U.S. Securities
and Exchange Commission (the "Commission"), specifying the powers, preferences
and rights of the Preferred Shares.
1.3 RULES OF CONSTRUCTION.
Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto" and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to
New York City time.
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II. THE AUCTION.
2.1 PURPOSE; INCORPORATION BY REFERENCE OF AUCTION PROCEDURES AND
SETTLEMENT PROCEDURES.
(a) The Board of Trustees of the Fund has adopted a resolution
appointing Deutsche Bank Trust Company Americas as Auction Agent for purposes of
the Auction Procedures. The Auction Agent hereby accepts such appointment and
agrees that, on each Auction Date, it shall follow the procedures set forth in
this Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate for the Preferred Shares for the next Dividend Period. Each
periodic operation of such procedures is hereinafter referred to as an
"Auction."
(b) All of the provisions contained in the Auction Procedures and
in the Settlement Procedures are incorporated herein by reference in their
entirety and shall be deemed to be a part hereof to the same extent as if such
provisions were set forth fully herein.
2.2 PREPARATION FOR EACH AUCTION; MAINTENANCE OF REGISTRY OF EXISTING
HOLDERS.
(a) As of the date hereof, the Fund shall provide the Auction
Agent with a list of the Broker-Dealers previously approved by the Auction Agent
and shall cause to be delivered to the Auction Agent for execution by the
Auction Agent a Broker-Dealer Agreement signed by each such Broker-Dealer. The
Auction Agent shall keep such list current and accurate and shall indicate
thereon, or on a separate list, the identity of each Existing Holder, if any,
whose most recent Order was submitted by a Broker-Dealer on such list and
resulted in such Existing Holder continuing to hold or purchase Preferred
Shares. Not later than five Business Days prior to any Auction Date for which
any change in such list of Broker-Dealers is to be effective, the Fund shall
notify the Auction Agent in writing of such change and, if any such change is
the addition of a Broker-Dealer to such list, the Fund shall cause to be
delivered to the Auction Agent for execution by the Auction Agent a
Broker-Dealer Agreement signed by such Broker-Dealer. The Auction Agent shall
have entered into a Broker-Dealer Agreement with each Broker-Dealer prior to the
participation of any such Broker-Dealer in any Auction.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent shall have given the notice referred to in
clause (vii) of paragraph (a) of the Settlement Procedures, the Auction Agent,
by such means as the Auction Agent reasonably deems practicable, shall give
notice of such change to the Broker-Dealers not later than the earlier of 9:15
a.m. on the new Auction Date or 9:15 a.m. on the old Auction Date.
(c) The provisions contained in Section 3 of Part I of the
Statement of Preference concerning Special Dividend Periods and the notification
of a Special Dividend Period will be followed by the Fund and, to the extent
applicable, the Auction Agent, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
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(d) (i) On each Auction Date, the Auction Agent shall determine
the Maximum Applicable Rate. Not later than 9:30 a.m. on each Auction Date, the
Auction Agent shall notify the Fund and the Broker-Dealers of the Maximum
Applicable Rate.
(ii) If the Reference Rate is the applicable "AA" Financial
Composite Commercial Paper Rate and such rate is to be based on rates supplied
by Commercial Paper Dealers and one or more of the Commercial Paper Dealers
shall not provide a quotation for the determination of the applicable "AA"
Financial Composite Commercial Paper Rate, the Auction Agent immediately shall
notify the Fund so that the Fund can determine whether to select a substitute
Commercial Paper Dealer or substitute Commercial Paper Dealers to provide the
quotation or quotations not being supplied by any Commercial Paper Dealer or
Commercial Paper Dealers. The Fund promptly shall advise the Auction Agent of
any such selection. If the Fund does not select any such substitute Commercial
Paper Dealer or substitute Commercial Paper Dealers, then the rates shall be
supplied by the remaining Commercial Paper Dealer or Commercial Paper Dealers.
(e) (i) The Auction Agent shall maintain a current registry of
the Existing Holders of the Preferred Shares for purposes of each individual
Auction. The Fund shall use commercially reasonable efforts to provide or cause
to be provided to the Auction Agent within ten Business Days following the date
of the Closing a list of the initial Existing Holders of Preferred Shares, and
the Broker-Dealer of each such Existing Holder through which such Existing
Holder purchased such shares. The Auction Agent may rely upon, as evidence of
the identities of the Existing Holders, such list, the results of each Auction
and notices from any Existing Holder, the Agent Member of any Existing Holder or
the Broker-Dealer of any Existing Holder with respect to such Existing Holder's
transfer of any Preferred Shares to another Person.
(ii) In the event of any partial redemption of Preferred
Shares, upon notice by the Fund to the Auction Agent of such partial redemption,
the Auction Agent promptly shall request the Securities Depository to notify the
Auction Agent of the identities of the Agent Members (and the respective numbers
of shares) from the accounts of which shares have been called for redemption and
the person or department at such Agent Member to contact regarding such
redemption. At least two Business Days prior to the Auction preceding the date
of redemption, the Auction Agent shall request each Agent Member so identified
to disclose to the Auction Agent (upon selection by such Agent Member of the
Existing Holders whose shares are to be redeemed) the number of Preferred Shares
of each such Existing Holder, if any, to be redeemed by the Fund, provided that
the Auction Agent has been furnished with the name and telephone number of a
person or department at such Agent Member from which it is to request such
information. In the absence of receiving any such information with respect to an
Existing Holder, from such Existing Holder's Agent Member or otherwise, the
Auction Agent may continue to treat such Existing Holder as having ownership of
the number of Preferred Shares shown in the Auction Agent's registry of Existing
Holders.
(iii) The Auction Agent shall register a transfer of the
ownership of Preferred Shares from an Existing Holder to another Existing
Holder, or to another Person if permitted by the Fund, only if (A) such transfer
is made pursuant to an Auction or (B) if such transfer is made other than
pursuant to an Auction, the Auction Agent has been notified of such
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transfer in writing, in a notice substantially in the form of Exhibit C to the
Broker-Dealer Agreement, by such Existing Holder or by the Agent Member of such
Existing Holder. The Auction Agent is not required to accept any notice of
transfer delivered for an Auction unless it is received by the Auction Agent by
3:00 p.m. on the Business Day preceding the applicable Auction Date. The Auction
Agent shall rescind a transfer made on the registry of the Existing Holders of
any Preferred Shares if the Auction Agent has been notified in writing, in a
notice substantially in the form of Exhibit D to the Broker-Dealer Agreement, by
the Agent Member or the Broker-Dealer of any Person that (i) purchased any
Preferred Shares and the seller failed to deliver such shares or (ii) sold any
Preferred Shares and the purchaser failed to make payment to such Person upon
delivery to the purchaser of such shares.
(f) The Auction Agent may request that the Broker-Dealers, as set
forth in Section 3.2(c) of the Broker-Dealer Agreements, provide the Auction
Agent with a list of their respective customers that such Broker-Dealers believe
are Beneficial Owners of Preferred Shares. The Auction Agent shall keep
confidential any such information and shall not disclose any such information so
provided to any Person other than the relevant Broker-Dealer and the Fund,
provided that the Auction Agent reserves the right to disclose any such
information if it is advised by its counsel that its failure to do so would be
unlawful.
2.3 AUCTION SCHEDULE.
Subject to Article 11 of the Statement of Preferences, the Auction Agent
shall normally conduct Auctions weekly (usually Tuesday for Series A and
Wednesday for Series B) in accordance with the schedule set forth below. Such
schedule may be changed by the Auction Agent with the consent of the Fund, which
consent shall not be withheld unreasonably. The Auction Agent shall give notice
of any such change to each Broker-Dealer. Such notice shall be received prior to
the first Auction Date on which any such change shall be effective.
TIME EVENT
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By 9:30 a.m. Auction Agent shall advise the Fund and
the Broker-Dealers of the Reference Rate
and the Maximum Applicable Rate as set
forth in Section 2.2(d)(i) hereof.
9:30 a.m. - 1:00 p.m. Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Section 2 of the Auction
Procedures. Submission deadline is
1:00 p.m.
Not earlier than 1:00 p.m. Auction Agent shall make determinations
pursuant to Section 3(a) of the Auction
Procedures.
By approximately 3:00 p.m. Auction Agent shall advise the Fund of
the results of the Auction as provided
in Section 3(b) of the Auction
Procedures.
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Submitted Bid Orders and Submitted Sell
Orders will be accepted and rejected in
whole or in part and Preferred Shares
will be allocated as provided in Section
4 of the Auction Procedures.
Auction Agent shall give notice of the
Auction results as set forth in Section
2.4 hereof.
2.4 NOTICE OF AUCTION RESULTS.
The Auction Agent will advise each Broker-Dealer who submitted a Bid or
Sell Order in an Auction whether such Bid or Sell Order was accepted or rejected
in whole or in part and of the Applicable Rate for the next Dividend Period for
the related Preferred Shares by telephone or through its Auction Processing
System as set forth in paragraph (a) of the Settlement Procedures.
2.5 BROKER-DEALERS.
(a) Not later than 3:00 p.m. on each Dividend Payment Date, the
Auction Agent after each Auction will pay a service charge from funds provided
by the Fund to each Broker-Dealer on the basis of the purchase price of
Preferred Shares placed by such Broker-Dealer at such Auction. The service
charge shall be (i) in the case of any Auction Date immediately preceding a 7
day Dividend Period, the product of (A) a fraction the numerator of which is the
number of days in such Dividend Period (calculated by counting the first day of
such Dividend Period but excluding the last day thereof) and the denominator of
which is 365, times (B) 1/4 of 1%, times (C) $25,000 times (D) the sum of (I)
the aggregate number of Preferred Shares placed by the Broker-Dealer in the
applicable Auction that were either (x) the subject of a Submitted Bid of a
Beneficial Owner submitted by the Broker-Dealer and continued to be held as a
result of such submission or (y) the subject of a Submitted Bid of a Potential
Beneficial Owner submitted by the Broker-Dealer and were purchased as a result
of such submission plus (II) the aggregate number of Preferred Shares subject to
valid Hold Orders (determined in accordance with Section 1 of the Auction
Procedures) submitted to the Auction Agent by the Broker-Dealer plus (III) the
number of Preferred Shares deemed to be subject to Hold Orders by Beneficial
Owners pursuant to Section 1 of the Auction Procedures that were acquired by the
Broker-Dealer for its own account or were acquired by such Beneficial Owners
through the Broker-Dealer; and (ii) in the case of any Special Dividend Period,
the amount determined by mutual consent of the Fund and any such Broker-Dealer
or Broker-Dealers, based upon a selling concession that would be applicable to
an underwriting of fixed or variable rate preferred shares with a similar final
maturity or variable rate dividend period, respectively, at the commencement of
such Special Dividend Period. For the avoidance of doubt, only one Broker-Dealer
shall be considered to have placed a particular Preferred Share at any
particular Auction for purposes of this Section 2.5(a).
(b) The Fund shall not designate any Person to act as a
Broker-Dealer, or permit an Existing Holder or a Potential Beneficial Owner to
participate in Auctions through any Person other than a Broker-Dealer, without
the prior written approval of the Auction Agent, which approval shall not be
withheld unreasonably. Notwithstanding the foregoing, the Fund may designate an
Affiliate or UBS Securities LLC to act as a Broker-Dealer.
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(c) The Auction Agent shall terminate any Broker-Dealer Agreement
as set forth therein if so directed by the Fund in writing, provided that at
least one Broker-Dealer Agreement would be in effect for the APS after such
termination.
(d) Subject to Section 2.5(b) hereof, the Auction Agent from time
to time shall enter into such Broker-Dealer Agreements as the Fund shall request
in writing.
(e) The Auction Agent shall maintain a list of Broker-Dealers.
2.6 OWNERSHIP OF PREFERRED SHARES AND SUBMISSION OF BIDS BY THE FUND
AND ITS AFFILIATES.
Neither the Fund nor any Affiliate may submit an Order in any Auction,
except that an Affiliate that is a Broker-Dealer may submit an Order. The Fund
shall notify the Auction Agent if the Fund or, to the best of the Fund's
knowledge, any Affiliate becomes a Beneficial Owner of any Preferred Shares.
Pursuant to the Statement of Preferences of the Fund, the Fund and its
Affiliates shall be prohibited from reissuing and its Affiliates (other than an
Underwriter) will be prohibited from transferring (other than to the Fund or
pursuant to an Auction) any Preferred Shares they may acquire. The restrictions
in this Section 2.6 shall in no way limit the activities of the Auction Agent.
The Auction Agent shall have no duty or liability with respect to enforcement of
this Section 2.6.
2.7 ACCESS TO AND MAINTENANCE OF AUCTION RECORDS.
The Auction Agent shall afford to the Fund and its agents, independent
public accountants and counsel, access at reasonable times during normal
business hours to review and make extracts or copies (at the Fund's sole cost
and expense) of all books, records, documents and other information concerning
the conduct and results of Auctions, provided that any such agent, accountant or
counsel shall furnish the Auction Agent with a letter from the Fund requesting
that the Auction Agent afford such person access. The Auction Agent shall
maintain records relating to any Auction in accordance with applicable rules and
regulations of the Commission for a period of at least six years after such
Auction, and such records, in reasonable detail, shall accurately and fairly
reflect the actions taken by the Auction Agent hereunder. The Fund agrees to
keep confidential any information regarding the customers of any Broker-Dealer
received from the Auction Agent in connection with this Agreement or any
Auction, and shall not disclose such information or permit the disclosure of
such information without the prior written consent of the applicable
Broker-Dealer to anyone except such agent, accountant or counsel engaged to
audit or review the results of Auctions as permitted by this Section 2.7. The
Fund reserves the right to disclose any such information if it is advised by its
counsel that its failure to do so would (i) be unlawful or (ii) expose it to
liability, unless the Broker-Dealer shall have offered indemnification
satisfactory to the Fund. Any such agent, accountant or counsel, before having
access to such information, shall agree to keep such information confidential
and not to disclose such information or permit disclosure of such information
without the prior written consent of the applicable Broker-Dealer, provided that
such agent, accountant or counsel may reserve the right to disclose any such
information if it is advised by its counsel that its failure to do so would (i)
be unlawful or (ii) expose it to liability, unless the Broker-Dealer shall have
offered indemnification satisfactory to such agent, accountant or counsel.
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2.8 AUCTION PROCEDURES.
The provisions contained in the Auction Procedures will be followed by
the Fund and, to the extent applicable, the Auction Agent, and the provisions
contained therein are incorporated herein by reference in their entirety and
shall be deemed to be a part of this Agreement to the same extent as if such
provisions were set forth fully herein.
III. THE AUCTION AGENT AS PAYING AGENT.
3.1 THE PAYING AGENT.
The Board of Trustees of the Fund has adopted resolutions appointing
Deutsche Bank Trust Company Americas as Auction Agent and dividend paying agent
(in such capacity, the "Paying Agent"). The Paying Agent hereby accepts such
appointment and agrees to act in accordance with its standard procedures and the
provisions of the Statement of Preferences which are specified herein with
respect to the Preferred Shares and as set forth in this Section 3.
3.2 THE FUND'S NOTICES TO THE PAYING AGENT.
Whenever any Preferred Shares are to be redeemed, the Fund shall mail a
Notice of Redemption by first-class mail, postage prepaid, to each Holder of
Preferred Shares being redeemed and to the Paying Agent pursuant to the
Statement of Preferences.
3.3 THE FUND TO PROVIDE FUNDS FOR DIVIDENDS AND REDEMPTIONS.
(a) Not later than 12:00 noon on each Dividend Payment Date, the
Fund shall deposit with the Paying Agent an aggregate amount of Federal Funds or
similar same-day funds equal to the declared dividends to be paid to Holders on
such Dividend Payment Date and shall give the Paying Agent irrevocable
instructions to apply such funds to the payment of such dividends on such
Dividend Payment Date.
(b) If the Fund shall give a Notice of Redemption, then by 12:00
noon on the date fixed for redemption, the Fund shall deposit in trust with the
Paying Agent an aggregate amount of Federal Funds or similar same-day funds
sufficient to redeem such Preferred Shares called for redemption and shall give
the Paying Agent irrevocable instructions and authority to pay the redemption
price to the Holders of Preferred Shares called for redemption upon surrender of
the certificate or certificates therefor.
3.4 DISBURSING DIVIDENDS AND REDEMPTION PRICE.
After receipt of the Federal Funds or similar same-day funds and
instructions from the Fund described in Section 3.3 above, the Paying Agent
shall pay to the Holders (or former Holders) entitled thereto (i) on each
corresponding Dividend Payment Date, dividends on the Preferred Shares, and (ii)
on any date fixed for redemption, the redemption price of any Preferred Shares
called for redemption. The amount of dividends for any Dividend Period to be
paid by the Paying Agent to Holders will be determined by the Fund as set forth
in Section 2 of Part I of the Statement of Preferences. The redemption price to
be paid by the Paying Agent to the
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Holders of any Preferred Shares called for redemption will be determined as set
forth in Section 9 of Patt I of the Statement of Preferences.
IV. THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.
4.1 ORIGINAL ISSUE OF SHARE CERTIFICATES.
On the Date of Original Issue for any Preferred Share, one certificate
for each series of Preferred Shares shall be issued by the Fund and registered
in the name of Cede & Co., as nominee of the Securities Depository, and
countersigned by the Paying Agent.
4.2 REGISTRATION OF TRANSFER OR EXCHANGE OF SHARES.
Except as provided in this Section 4.2, the shares of each series of
Preferred Shares shall be registered solely in the name of the Securities
Depository or its nominee. If there is no Securities Depository, at the Fund's
option and upon its receipt of such documents as it deems appropriate, any
Preferred Shares may be registered in the Share Register in the name of the
Beneficial Owner thereof, and such Beneficial Owner thereupon will be entitled
to receive certificates therefor and required to deliver certificates thereof or
upon transfer or exchange thereof. If the certificate or certificates for
Preferred Shares are not held by the Securities Depository or its nominee,
payment will be made in same-day funds to the Auction Agent against delivery of
such certificates.
4.3 REMOVAL OF LEGEND.
Any request for removal of a legend indicating a restriction on transfer
from a certificate evidencing Preferred Shares shall be accompanied by an
opinion of counsel stating that such legend may be removed and such shares may
be transferred free of the restriction described in such legend, said opinion to
be delivered under cover of a letter from a Fund Officer authorizing the Paying
Agent to remove the legend on the basis of said opinion.
4.4 LOST, STOLEN OR DESTROYED SHARE CERTIFICATES.
The Paying Agent shall, at the sole expense of the Fund, issue and
register replacement certificates for certificates represented to have been
lost, stolen or destroyed, upon the fulfillment of such requirements as shall be
deemed appropriate by the Fund and by the Paying Agent, subject at all times to
provisions of law, the Statement of Preferences governing such matters and
resolutions adopted by the Fund with respect to lost, stolen or destroyed
securities. The Paying Agent may, at the sole expense of the Fund, issue new
certificates in exchange for and upon the cancellation of mutilated
certificates. Any request by the Fund to the Paying Agent to issue a replacement
or new certificate pursuant to this Section 4.4 shall be deemed to be a
representation and warranty by the Fund to the Paying Agent that such issuance
will comply with provisions of applicable law and the Statement of Preferences
and resolutions of the Fund.
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4.5 DISPOSITION OF CANCELED CERTIFICATES; RECORD RETENTION.
The Paying Agent shall retain share certificates which have been canceled
in transfer or in exchange and accompanying documentation in accordance with
applicable rules and regulations of the Commission for at least six calendar
years from the date of such cancellation. The Paying Agent, upon written request
by the Fund, shall afford to the Fund, its agents and counsel access at
reasonable times during normal business hours to review and make extracts or
copies (at the Fund's sole cost and expense) of such certificates and
accompanying documentation. Upon the expiration of this six-year period, the
Paying Agent, upon written request by the Fund, shall deliver to the Fund the
canceled certificates and accompanying documentation. The Paying Agent also
shall undertake to furnish to the Commission at the sole expense of the Fund,
upon demand and after notice to and authorization by the Fund of such demand,
either at its principal office or at any regional office, complete, correct and
current hard copies of any and all such records. Thereafter, such records shall
not be destroyed by the Fund without the approval of the Paying Agent, which
approval shall not be withheld unreasonably, but will be safely stored for
possible future reference.
4.6 SHARE REGISTER.
The Paying Agent shall maintain the share register, which shall contain a
list of the Holders, the number of shares held by each Holder and the address of
each Holder. The Paying Agent shall record in the share register any change of
address of a Holder upon notice by such Holder. In case of any written request
or demand for the inspection of the share register or any other books of the
Fund in the possession of the Paying Agent, the Paying Agent will notify the
Fund and secure written instructions as to permitting or refusing such
inspection. The Paying Agent reserves the right, however, to exhibit the share
register or other records to any person in case it is advised by its counsel
that its failure to do so would be unlawful.
4.7 RETURN OF FUNDS.
Any funds deposited with the Paying Agent by the Fund for any reason
under this Agreement, including for the payment of dividends or the redemption
of Preferred Shares, that remain with the Paying Agent after 90 days shall be
repaid to the Fund upon written request by the Fund. Such funds, while deposited
with the Auction Agent, will be held in trust for the payment of the applicable
dividend, redemption price or, as may be applicable under the Statement of
Preferences, other charges.
V. REPRESENTATIONS AND WARRANTIES.
5.1 REPRESENTATIONS AND WARRANTIES OF THE FUND.
The Fund represents and warrants to the Auction Agent that:
(i) the Fund has been duly organized and is validly
existing as an statutory business trust under and by virtue of the laws of the
State of Delaware and has full power to execute and deliver this Agreement and
to authorize, create and issue the Preferred Shares;
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(ii) the Fund is registered with the Commission under the
1940 Act as a closed-end, diversified, management investment company;
(iii) this Agreement has been duly and validly authorized,
executed and delivered by the Fund and constitutes the legal, valid and binding
obligation of the Fund, enforceable against the Fund in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to general
equitable principles;
(iv) the form of the certificates evidencing the Preferred
Shares complies with all applicable laws of the State of Delaware;
(v) the Preferred Shares have been duly and validly
authorized by the Fund and, upon completion of the initial sale of the Preferred
Shares and receipt of payment therefor, will be validly issued by the Fund,
fully paid and nonassessable;
(vi) at the time of the offering of the Preferred Shares,
the shares offered will be registered under the Securities Act of 1933, as
amended, and no further action by or before any governmental body or authority
of the United States or of any state thereof is required in connection with the
execution and delivery of this Agreement or will be required in connection with
the issuance of the Preferred Shares, except such action as required by
applicable state securities laws;
(vii) the execution and delivery of this Agreement and the
issuance and delivery of the Preferred Shares do not and will not conflict with,
violate or result in a breach of the terms, conditions or provisions of, or
constitute a default under, the Declaration of Trust, any order or decree of any
court or public authority having jurisdiction over the Fund or any mortgage,
indenture, contract, agreement or undertaking to which the Fund is a party or by
which it is bound the effect of which conflict, violation, default or breach
would be material to the Fund; and
(viii) no taxes are payable upon or in respect of the
execution of this Agreement or will be payable upon or in respect of the
issuance of the Preferred Shares.
5.2 REPRESENTATIONS AND WARRANTIES OF THE AUCTION AGENT.
The Auction Agent represents and warrants to the Fund that:
(i) The Auction Agent is duly organized and is validly
existing as a banking corporation in good standing under the laws of the State
of
New York and has the corporate power to enter into and perform its
obligations under this Agreement; and
(ii) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the legal, valid and
binding obligation of the Auction Agent, enforceable against the Auction Agent
in accordance with its terms, subject only to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors' rights and to general equitable principles.
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VI. THE AUCTION AGENT.
6.1 DUTIES AND RESPONSIBILITIES.
(a) The Auction Agent is acting solely as agent for the Fund
hereunder and owes no fiduciary duties to any Person except as provided by this
Agreement.
(b) The Auction Agent undertakes to perform such duties and only
such duties as are set forth specifically in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Auction
Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered or omitted by
it, or for any error of judgment made by it in the performance of its duties
under this Agreement.
6.2 RIGHTS OF THE AUCTION AGENT.
(a) The Auction Agent may rely upon, and shall be protected in
acting or refraining from acting in accordance with, any communication
authorized by this Agreement and any proper written instruction, notice,
request, direction, consent, report, certificate, share certificate or other
instrument, paper or document reasonably believed by it to be genuine and
appropriately authorized. The Auction Agent shall not be liable for acting upon
any telephone communication authorized by this Agreement which the Auction Agent
reasonably believes in good faith to have been given by the Fund or by a
Broker-Dealer. The Auction Agent may record telephone communications with the
Fund or with the Broker-Dealers or with both, but agrees not to destroy any such
recordings except in accordance with its usual and customary practices and
further to provide the Fund with a copy of any such recording upon request.
(b) The Auction Agent may consult with outside independent counsel
of its choice, and the written advice of such outside independent counsel, if
addressed to both the Auction Agent and the Fund, shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reasonable reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys.
6.3 COMPENSATION, EXPENSES AND INDEMNIFICATION.
(a) The Fund shall pay to the Auction Agent from time to time
reasonable compensation for all services rendered by it under this Agreement and
under the Broker-Dealer Agreements as shall be set forth in a separate writing
signed by the Fund and the Auction Agent, subject to adjustments if the
Preferred Shares no longer are held of record by the Securities
12
Depository or its nominee or if there shall be such other change as shall
increase or decrease materially the Auction Agent's obligations hereunder or
under the Broker-Dealer Agreements.
(b) The Fund shall reimburse the Auction Agent upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Auction Agent in accordance with any provision of this Agreement and of the
Broker-Dealer Agreements (including the reasonable compensation, expenses and
disbursements of its agents and counsel), except any expense, disbursement or
advance attributable to the Auction Agent's negligence or bad faith, upon
submission to the Fund of reasonable documentation thereof.
(c) The Fund shall indemnify the Auction Agent for, and hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Auction Agent arising out of or in connection with
its agency under this Agreement and under the Broker-Dealer Agreements,
including the costs and expenses of defending itself against any claim of
liability in connection with its exercise or performance of any of its duties
hereunder and thereunder, except such as may result from its negligence or bad
faith.
VII. MISCELLANEOUS.
7.1 TERM OF AGREEMENT.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Fund may terminate this
Agreement at any time by so notifying the Auction Agent, provided that, if any
Preferred Shares remain outstanding, the Fund shall have entered into an
agreement with a successor auction agent. The Auction Agent may terminate this
Agreement upon prior notice to the Fund on the date specified in such notice,
which date shall be no earlier than 60 days after delivery of such notice. If
the Auction Agent terminates this Agreement while any Preferred Shares remain
outstanding, the Fund shall use its best efforts to enter into an agreement with
a successor auction agent containing substantially the same terms and conditions
as this Agreement.
(b) Except as otherwise provided in this Section 7.1(b), the
respective rights and duties of the Fund and the Auction Agent under this
Agreement shall cease upon termination of this Agreement. The Fund's
representations, warranties, covenants and obligations to the Auction Agent
under Sections 5.1 and 6.3 hereof shall survive the termination hereof. The
Auction Agent's representations, warranties, covenants and obligations under
Section 6.1 shall survive the termination hereof. Upon termination of this
Agreement, the Auction Agent shall (i) resign as Auction Agent under the
Broker-Dealer Agreements, (ii) at the Fund's request, deliver promptly to the
Fund or to another authorized party copies of all books and records maintained
by it in connection with its duties hereunder, and (iii) at the request of the
Fund, transfer promptly to the Fund or to any successor auction agent any funds
deposited by the Fund with the Auction Agent (whether in its capacity as Auction
Agent or as Paying Agent) pursuant to this Agreement which have not been
distributed previously by the Auction Agent in accordance with this Agreement.
13
7.2 COMMUNICATIONS.
Except for (i) communications authorized to be made by telephone pursuant
to this Agreement or the Auction Procedures and (ii) communications in
connection with Auctions (other than those expressly required to be in writing),
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) and shall be given to such
party at its address or telecopier number set forth below:
If to the Fund,
Pioneer Municipal High Income Trust
addressed to: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
If to the Auction Agent, Deutsche Bank Trust Company Americas
addressed to: Corporate Trust & Agency Services
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ -- 27th Floor
Mail Stop NYC60-2715
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or telecopier number as such party hereafter may specify
for such purpose by notice to the other party. Each such notice, request or
communication shall be effective when delivered at the address specified herein.
Communications shall be given on behalf of the Fund by a Fund Officer and on
behalf of the Auction Agent by an Authorized Officer.
7.3 ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof, except for agreements
relating to the compensation of the Auction Agent.
7.4 BENEFITS.
Nothing herein, express or implied, shall give to any Person, other than
the Fund, the Auction Agent and their respective successors and assigns, any
benefit of any legal or equitable right, remedy or claim hereunder.
7.5 AMENDMENT; WAIVER.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized representative of the party to
be charged.
14
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
7.6 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon, inure to the benefit of and be
enforceable by, the respective successors and permitted assigns of each of the
Fund and the Auction Agent. This Agreement may not be assigned by either party
hereto absent the prior written consent of the other party, which consent shall
not be withheld unreasonably.
7.7 SEVERABILITY.
If any clause, provision or section hereof shall be ruled invalid or
unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
7.9 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of
New York applicable to agreements made and to be
performed in said state.
[Signature pages follow.]
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
PIONEER MUNICIPAL HIGH INCOME
TRUST
By:
-----------------------------
Name:
Title:
DEUTSCHE BANK TRUST
COMPANY AMERICAS
By:
-----------------------------
Name:
Title:
EXHIBIT A
FORM OF BROKER-DEALER AGREEMENT
PIONEER MUNICIPAL HIGH INCOME TRUST
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Auction Agent
----------
BROKER-DEALER AGREEMENT
dated as of , 2003
Relating to
Auction Preferred Shares
Series A and B
of
PIONEER MUNICIPAL HIGH INCOME TRUST
----------
[BROKER-DEALER]
BROKER-DEALER AGREEMENT
This Broker-Dealer Agreement dated as of , 2003 is between Deutsche
Bank Trust Company Americas, a
New York banking corporation (the "Auction
Agent") (not in its individual capacity, but solely as agent of
Pioneer
Municipal High Income Trust (the "Fund"), pursuant to authority granted to it in
the
Auction Agency Agreement dated as of , 2003 between the
Fund and the Auction Agent (the "
Auction Agency Agreement")) and (together with
its successors and assigns, "BD").
The Fund proposes to issue an aggregate of preferred shares, par
value $0.0001 per share, liquidation preference $25,000 per share, designated
as Auction Preferred Shares, Series A and Auction Preferred Shares and Series B
(the "Preferred Shares"), pursuant to the Fund's Statement of Preferences (as
defined below).
As provided in and subject to the Fund's Statement of Preferences, for
each series of Preferred Shares then outstanding, the Applicable Rate for
Preferred Shares for each subsequent Dividend Period shall be equal to the rate
per annum that results from an Auction for Outstanding Preferred Shares on the
respective Auction Date therefor next preceding the period from and after the
Date of Original Issue to and including the last day of the initial Dividend
Period. The Board of Trustees of the Fund has adopted a resolution appointing
Deutsche Bank Trust Company Americas as Auction Agent for purposes of the
Auction Procedures, and pursuant to Section 2.5 of the
Auction Agency Agreement,
the Fund has requested and directed the Auction Agent to execute and deliver
this Agreement.
The Auction Procedures require the participation of one or more
Broker-Dealers.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Auction Agent and BD agree as follows:
VIII. DEFINITIONS AND RULES OF CONSTRUCTION.
8.1 TERMS DEFINED BY REFERENCE TO THE THIRD AMENDED AND RESTATED
BYLAWS.
Capitalized terms used herein but not defined herein shall have the
respective meanings specified in the Statement of Preferences.
8.2 TERMS DEFINED HEREIN.
As used herein and in the Settlement Procedures (as defined below), the
following terms shall have the following meanings, unless the context otherwise
requires:
(a) "Auction" shall have the meaning specified in Section 2.1 of
the
Auction Agency Agreement.
(b) "Auction Procedures" shall mean the procedures for conducting
Auctions that are set forth in Section 11.10 of the Third Amended and Restated
Bylaws.
(c) "Authorized Officer" shall mean each Managing Director, Vice
President, Assistant Vice President and Associate of the Auction Agent and every
other officer or employee of the Auction Agent assigned to its Corporate Trust &
Agency Services and designated as an "Authorized Officer" for purposes of this
Agreement in a communication to BD.
(d) "BD Officer" shall mean each officer or employee of BD
designated as a "BD Officer" for purposes of this Agreement in a communication
to the Auction Agent.
(e) "Broker-Dealer Agreement" shall mean this Agreement and any
substantially similar agreement between the Auction Agent and a Broker-Dealer.
(f) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit A.
(g) "Statement of Preferences" shall mean the Statement of
Preferences of the Fund in effect at the time the Registration Statement
relating to the Preferred Shares is declared effective by the Securities and
Exchange Commission, specifying the powers, preferences and rights of the
Preferred Shares.
8.3 RULES OF CONSTRUCTION.
Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
(c) The words "hereof," "herein," "hereto" and other words of
similar import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to
New York City time.
(e) Sections I and III hereof shall be read in conjunction with
Part II of the Statement of Preferences and in the event of any conflict with
the Statement of Preferences, then the Statement of Preferences shall take
precedence.
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IX. NOTIFICATION OF DIVIDEND.
The provisions contained in Section 3 of Part I of the Statement of
Preferences concerning the notification of a Special Dividend Period will be
followed by the Auction Agent and BD, and the provisions contained therein are
incorporated herein by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions were set forth
fully herein.
X. THE AUCTION.
10.1 PURPOSE; INCORPORATION BY REFERENCE OF AUCTION PROCEDURES AND
SETTLEMENT PROCEDURES.
(a) On each Auction Date, the provisions of the Auction Procedures
will be followed by the Auction Agent for the purpose of determining the
Applicable Rate for the Preferred Shares, for each Dividend Period. Each
periodic operation of such procedures is hereinafter referred to as an
"Auction."
(b) All of the provisions contained in the Auction Procedures and
the Settlement Procedures are incorporated herein by reference in their entirety
and shall be deemed to be a part of this Agreement to the same extent as if such
provisions were set forth fully herein.
(c) BD agrees to act as, and assumes the obligations of and
limitations and restrictions placed upon, a Broker-Dealer under this Agreement.
BD understands that other Persons meeting the requirements specified in the
definition of "Broker-Dealer" contained in the Statement of Preferences may
execute a Broker-Dealer Agreement and participate as Broker-Dealers in Auctions.
(d) BD and other Broker-Dealers may participate in Auctions for
their own accounts. However, the Fund, by notice to BD and all other Broker
Dealers, may prohibit all Broker-Dealers from submitting Bids in Auctions for
their own accounts, provided that Broker-Dealers may continue to submit Hold
Orders and Sell Orders.
10.2 PREPARATION FOR EACH AUCTION.
(a) Not later than 9:30 a.m. on each Auction Date for the
Preferred Shares, the Auction Agent shall advise BD by telephone or other
electronic means of communication acceptable to the parties of the Reference
Rate and the Maximum Applicable Rate in effect on such Auction Date.
(b) In the event that the Auction Date for any Auction shall be
changed after the Auction Agent has given the notice referred to in paragraph
(a) of the Settlement Procedures, the Auction Agent, by such means as the
Auction Agent reasonably deems practicable, shall give notice of such change to
BD not later than the earlier of 9:15 a.m. on the new Auction Date or
3
9:15 a.m. on the old Auction Date. Thereafter, BD promptly shall notify
customers of BD that BD believes are Beneficial Owners of Preferred Shares of
such change in the Auction Date.
(c) The Auction Agent from time to time may, but shall not be
required to, request BD to provide it with a list of the respective customers BD
believes are Beneficial Owners of Preferred Shares. BD shall comply with any
such request, and the Auction Agent shall keep confidential any such
information, including information received as to the identity of Bidders in any
Auction, and shall not disclose any such information so provided to any Person
other than the Fund; and such information shall not be used by the Auction Agent
or its officers, employees, agents or representatives for any purpose other than
such purposes as are described herein. The Auction Agent shall transmit any list
of customers BD believes are Beneficial Owners of Preferred Shares and
information related thereto only to its officers, employees, agents or
representatives who need to know such information for the purposes of acting in
accordance with this Agreement, and the Auction Agent shall prevent the
transmission of such information to others and shall cause its officers,
employees, agents and representatives to abide by the foregoing confidentiality
restrictions.
10.3 AUCTION SCHEDULE; METHOD OF SUBMISSION OF ORDERS.
(a) The Fund and the Auction Agent shall normally conduct Auctions
weekly (usually Tuesday for Series A and Wednesday for Series B) in accordance
with the schedule set forth below.
TIME EVENT
---- -----
By 9:30 a.m. Auction Agent shall advise the Fund and
the Broker-Dealers of the Reference Rate
and the Maximum Rate as set forth in
Section 3.2(a) hereof.
9:30 a.m. - 1:00 p.m. Auction Agent shall assemble information
communicated to it by Broker-Dealers as
provided in Section 2 of the Auction
Procedures. Submission deadline is 1:00
p.m.
Not earlier than 1:00 p.m. Auction Agent shall make determinations
pursuant to Section 3(a) of the Auction
Procedures.
By approximately 3:00 p.m. Auction Agent shall advise the Fund of
the results of the Auction as provided
in Section
4
3(b) of the Auction Procedures.
Submitted Bid Orders and Submitted Sell
Orders will be accepted and rejected in
whole or in part and Preferred Shares
will be allocated as provided in Section
4 of the Auction Procedures.
Auction Agent shall give notice of the
Auction results as set forth in Section
2.4 hereof.
(b) BD agrees to maintain a list of Potential Beneficial Owners
and to contact the Potential Beneficial Owners on such list on or prior to each
Auction Date for the purposes set forth in Section 1 of Part II of the Statement
of Preferences.
(c) BD shall submit Orders to the Auction Agent in writing in
substantially the form attached hereto as Exhibit B. BD shall submit separate
Orders to the Auction Agent for each Potential Beneficial Owner or Beneficial
Owner on whose behalf BD is submitting an Order and shall not net or aggregate
the Orders of Potential Beneficial Owners or Beneficial Owners on whose behalf
BD is submitting Orders.
(d) BD shall deliver to the Auction Agent (i) a written notice,
substantially in the form attached hereto as Exhibit C, of transfers of
Preferred Shares, made through BD by an Existing Holder to another Person other
than pursuant to an Auction, and (ii) a written notice, substantially in the
form attached hereto as Exhibit D, of the failure of Preferred Shares to be
transferred to or by any Person that purchased or sold Preferred Shares through
BD pursuant to an Auction. The Auction Agent is not required to accept any
notice delivered pursuant to the terms of the foregoing sentence with respect to
an Auction unless it is received by the Auction Agent by 3:00 p.m. on (1) the
Business Day preceding the Auction Date (in connection with notice delivered
pursuant to clause (i) of the foregoing sentence) or (2) the Business preceding
the next Auction Date following the failure of Preferred Shares to be
transferred (in connection with notice delivered pursuant to clause (ii) of the
foregoing sentence).
10.4 NOTICE OF AUCTION RESULTS.
(a) On each Auction Date, the Auction Agent shall notify BD by
telephone, facsimile or other electronic means as acceptable to the parties of
the Auction results as set forth in paragraph (a) of the Settlement Procedures.
On the Business Day next succeeding such Auction Date, the Auction Agent shall
notify BD in writing of the disposition of all Orders submitted by BD in the
Auction held on such Auction Date.
5
(b) BD shall notify each Beneficial Owner, Potential Beneficial
Owner, Existing Holder or Potential Holder on whose behalf BD has submitted an
Order as set forth in paragraph (b) of the Settlement Procedures, and take such
other action as is required of BD pursuant to the Settlement Procedures.
If any Beneficial Owner or Existing Holder selling Preferred Shares in an
Auction fails to deliver such shares, the Broker-Dealer of any Person that was
to have purchased Preferred Shares in such Auction may deliver to such Person a
number of whole Preferred Shares that is less than the number of shares that
otherwise was to be purchased by such Person. In such event, the number of
Preferred Shares to be so delivered shall be determined by such Broker-Dealer.
Delivery of such lesser number of shares shall constitute good delivery. Upon
the occurrence of any such failure to deliver shares, such Broker-Dealer shall
deliver to the Auction Agent the notice required by Section 3.3(d)(ii) hereof.
Notwithstanding the foregoing terms of this Section 3.4(b), any delivery or
non-delivery of Preferred Shares which represents any departure from the results
of an Auction, as determined by the Auction Agent, shall be of no effect unless
and until the Auction Agent shall have been notified of such delivery or
non-delivery in accordance with the terms of Section 3.3(d) hereof.
10.5 SERVICE CHARGE TO BE PAID TO BD.
Not later than 3:00 p.m. on each Dividend Payment Date, the Auction Agent
after each Auction will pay a service charge from funds provided by the Fund to
BD on the basis of the purchase price of Preferred Shares placed by BD at such
Auction. The service charge shall be (i) in the case of any Auction Date
immediately preceding a 7 day Dividend Period, the product of (A) a fraction the
numerator of which is the number of days in such Dividend Period and the
denominator of which is 365, times (B) 1/4 of 1%, times (C) $25,000 times (D)
the sum of (I) the aggregate number of Preferred Shares placed by BD in the
applicable Auction that were (x) the subject of a Submitted Bid of a Beneficial
Owner submitted by BD and continued to be held as a result of such submission
and (y) the subject of a Submitted Bid of a Potential Beneficial Owner submitted
by BD and were purchased as a result of such submission plus (II) the aggregate
number of Preferred Shares subject to valid Hold Orders (determined in
accordance with Section 1 of Part II of the Statement of Preferences) submitted
to the Auction Agent by BD plus (III) the number of Preferred Shares deemed to
be subject to Hold Orders by Beneficial Owners pursuant to Section 1 of Part II
of the Statement of Preferences that were acquired by BD for its own account or
were acquired by such Beneficial Owners through BD; and (ii) in the case of any
Special Dividend Period, the amount determined by mutual consent of the Fund and
BD based upon a selling concession that would be applicable to an underwriting
of fixed or variable rate preferred shares with a similar final maturity or
variable rate dividend period, respectively, at the commencement of such
Dividend Period.
6
XI. THE AUCTION AGENT.
11.1 DUTIES AND RESPONSIBILITIES.
(a) The Auction Agent is acting solely as agent for the Fund
hereunder and owes no fiduciary duties to any other Person by reason of this
Agreement.
(b) The Auction Agent undertakes to perform such duties and only
such duties as are set forth specifically in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Auction
Agent.
(c) In the absence of bad faith or negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered or omitted by
it, or for any error of judgment made by it in the performance of its duties
under this Agreement.
11.2 RIGHTS OF THE AUCTION AGENT.
(a) The Auction Agent may rely upon, and shall be protected in
acting or refraining from acting upon, any communication authorized by this
Agreement and any written instruction, notice, request, direction, consent,
report, certificate, share certificate or other instrument, paper or document
reasonably believed by it to be genuine. The Auction Agent shall not be liable
for acting upon any telephone communication authorized by this Agreement which
the Auction Agent reasonably believes in good faith to have been given by the
Fund or by BD. The Auction Agent may record telephone communications with the
Fund or with BD or with both.
(b) The Auction Agent may consult with counsel of its own choice,
and the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reasonable reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys.
11.3 AUCTION AGENT'S DISCLAIMER.
The Auction Agent makes no representation as to the validity or adequacy
of this Agreement or the Preferred Shares.
7
XII. MISCELLANEOUS.
12.1 TERMINATION.
Any party may terminate this Agreement at any time upon five days' prior
written notice to the other party; provided, however, that if the Broker-Dealer
is UBS Securities LLC, neither UBS Securities LLC nor the Auction Agent may
terminate this Agreement without first obtaining the prior written consent of
the Fund to such termination, which consent shall not be withheld unreasonably.
12.2 PARTICIPANT IN SECURITIES DEPOSITORY; PAYMENT OF DIVIDENDS IN
SAME-DAY FUNDS.
(a) BD is, and shall remain for the term of this Agreement, a
member of, or a participant in, the Securities Depository (or an affiliate of
such a member or participant).
(b) BD represents that it (or if BD does not act as Agent Member,
one of its affiliates) shall make all dividend payments on the Preferred Shares
available in same-day funds on each Dividend Payment Date to customers that use
BD (or its affiliate) as Agent Member.
12.3 AGENT MEMBER.
At the date hereof, BD is a participant of the Securities Depository.
12.4 COMMUNICATIONS.
Except for (i) communications authorized to be made by telephone pursuant
to this Agreement or the Auction Procedures and (ii) communications in
connection with the Auctions (other than those expressly required to be in
writing), all notices, requests and other communications to any party hereunder
shall be in writing (including telecopy or similar writing) and shall be given
to such party at its address or telecopier number set forth below:
If to the Auction Agent,
addressed to:
Deutsche Bank Trust Company Americas
Corporate Trust & Agency Services
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ -- 27th Floor
Mail Stop NYC60-2715
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
8
If to the BD,
addressed to:
_______________________________
_______________________________
_______________________________
_______________________________
Telecopier Number: ____________
Telephone Number: _____________
or such other address or telecopier number as such party hereafter may
specify for such purpose by notice to the other party. Each such notice, request
or communication shall be effective when delivered at the address specified
herein. Communications shall be given on behalf of BD by a BD Officer and on
behalf of the Auction Agent by an Authorized Officer. BD may record telephone
communications with the Auction Agent.
12.5 ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the parties relating
to the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof.
12.6 BENEFITS.
Nothing in this Agreement, express or implied, shall give to any person,
other than the Fund, which is a third-party beneficiary of this Agreement, the
Auction Agent and BD and their respective successors and assigns, any benefit of
any legal or equitable right, remedy or claim under this Agreement.
12.7 AMENDMENT; WAIVER.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized representative of the party to
be charged and by the Fund.
(b) Failure of either party to this Agreement to exercise any
right or remedy hereunder in the event of a breach of this Agreement by the
other party shall not constitute a waiver of any such right or remedy with
respect to any subsequent breach.
12.8 SUCCESSORS AND ASSIGNS.
(a) This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by, the respective successors and permitted assigns of each
of BD and the Auction
9
Agent. This Agreement may not be assigned by either party hereto absent the
prior written consent of the other party; PROVIDED, HOWEVER, that this Agreement
may be assigned by the Auction Agent to a successor Auction Agent selected by
the Fund without the consent of BD.
12.9 SEVERABILITY.
If any clause, provision or section of this Agreement shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity
or unenforceability of such clause, provision or section shall not affect any
remaining clause, provision or section hereof.
12.10 EXECUTION IN COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
12.11 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of
New York applicable to agreements made and to be
performed in said state.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the date first above written.
DEUTSCHE BANK TRUST
COMPANY AMERICAS
By:
-----------------------------
Name:
Title:
[BROKER-DEALER]
By:
-----------------------------
Name:
Title:
EXHIBIT A
SETTLEMENT PROCEDURES
Capitalized terms used herein shall have the respective meanings
specified in the Statement of Preferences.
(i) On each Auction Date, the Auction Agent shall notify by
telephone or through the Auction Agent's auction processing system the
Broker-Dealers that participated in the Auction held on such Auction Date and
submitted an Order on behalf of any Beneficial Owner or Potential Beneficial
Owner of:
(1) the Applicable Rate fixed for the next succeeding
Dividend Period;
(2) whether Sufficient Clearing Bids existed for the
determination of the Applicable Rate;
(3) if such Broker-Dealer (a "Seller's Broker-Dealer")
submitted a Bid or a Sell Order on behalf of a
Beneficial Owner, the number of Preferred Shares, if
any, to be sold by such Beneficial Owner;
(4) if such Broker-Dealer (a "Buyer's Broker-Dealer")
submitted a Bid on behalf of a Potential Beneficial
Owner, the number of Preferred Shares, if any, to be
purchased by such Potential Beneficial Owner;
(5) if the aggregate number of Preferred Shares to be
sold by all Beneficial Owners on whose behalf such
Broker-Dealer submitted a Bid or a Sell Order exceeds
the aggregate number of Preferred Shares to be
purchased by all Potential Beneficial Owners on whose
behalf such Broker-Dealer submitted a Bid, the name or
names of one or more Buyer's Broker-Dealers (and the
name of the Agent Member, if any, of each such Buyer's
Broker-Dealer) acting for one or more purchasers of
such excess number of Preferred Shares and the number
of such shares to be purchased from one or more
Beneficial Owners on whose behalf such Broker-Dealer
acted by one or more Potential Beneficial Owners on
whose behalf each of such Buyer's Broker-Dealers acted;
(6) if the aggregate number of Preferred Shares to be
purchased by all Potential Beneficial Owners on whose
behalf such Broker-Dealer submitted a Bid exceeds the
aggregate number of Preferred Shares to be sold by all
Beneficial Owners on whose behalf such Broker-Dealer
submitted a Bid or a Sell Order, the name or names
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of one or more Seller's Broker-Dealers (and the name of
the Agent Member, if any, of each such Seller's
Broker-Dealer) acting for one or more sellers of such
excess number of Preferred Shares and the number of
such shares to be sold to one or more Potential
Beneficial Owners on whose behalf such Broker-Dealer
acted by one or more Beneficial Owners on whose behalf
each of such Seller's Broker-Dealers acted; and
(7) the Auction Date of the next succeeding Auction
with respect to the Preferred Shares.
(ii) On each Auction Date, each Broker-Dealer that submitted
an Order on behalf of any Beneficial Owner or Potential Beneficial Owner shall:
(1) in the case of a Broker-Dealer that is a Buyer's
Broker-Dealer, instruct each Potential Beneficial Owner
on whose behalf such Broker-Dealer submitted a Bid that
was accepted, in whole or in part, to instruct such
Potential Beneficial Owner's Agent Member to pay to
such Broker-Dealer (or its Agent Member) through the
Securities Depository the amount necessary to purchase
the number of Preferred Shares to be purchased pursuant
to such Bid against receipt of such shares and advise
such Potential Beneficial Owner of the Applicable Rate
for the next succeeding Dividend Period;
(2) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Beneficial Owner on whose
behalf such Broker-Dealer submitted a Sell Order that
was accepted, in whole or in part, or a Bid that was
accepted, in whole or in part, to instruct such
Beneficial Owner's Agent Member to deliver to such
Broker-Dealer (or its Agent Member) through the
Securities Depository the number of Preferred Shares to
be sold pursuant to such Order against payment therefor
and advise any such Beneficial Owner that will continue
to hold Preferred Shares of the Applicable Rate for the
next succeeding Dividend Period;
(3) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable
Rate for the next succeeding Dividend Period;
(4) advise each Beneficial Owner on whose behalf such
Broker-Dealer submitted an Order of the Auction Date
for the next succeeding Auction; and
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(5) advise each Potential Beneficial Owner on whose
behalf such Broker-Dealer submitted a Bid that was
accepted, in whole or in part, of the Auction Date for
the next succeeding Auction.
(iii) On the basis of the information provided to it pursuant
to (a) above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf
of a Potential Beneficial Owner or a Beneficial Owner shall, in such manner and
at such time or times as in its sole discretion it may determine, allocate any
funds received by it pursuant to (b)(i) above and any Preferred Shares received
by it pursuant to (b)(ii) above among the Potential Beneficial Owners, if any,
on whose behalf such Broker-Dealer submitted Bids, the Beneficial Owners, if
any, on whose behalf such Broker-Dealer submitted Bids that were accepted or
Sell Orders, and any Broker-Dealer or Broker-Dealers identified to it by the
Auction Agent pursuant to (a)(v) or (a)(vi) above.
(iv) On each Auction Date:
(1) each Potential Beneficial Owner and Beneficial
Owner shall instruct its Agent Member as provided in
(b)(i) or (ii) above, as the case may be;
(2) each Seller's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its
Agent Member to (A) pay through the Securities
Depository to the Agent Member of the Beneficial Owner
delivering shares to such Broker-Dealer pursuant to
(b)(ii) above the amount necessary to purchase such
shares against receipt of such shares, and (B) deliver
such shares through the Securities Depository to a
Buyer's Broker-Dealer (or its Agent Member) identified
to such Seller's Broker-Dealer pursuant to (a)(v) above
against payment therefor; and
(3) each Buyer's Broker-Dealer which is not an Agent
Member of the Securities Depository shall instruct its
Agent Member to (A) pay through the Securities
Depository to a Seller's Broker-Dealer (or its Agent
Member) identified pursuant to (a)(vi) above the amount
necessary to purchase the shares to be purchased
pursuant to (b)(i) above against receipt of such
shares, and (B) deliver such shares through the
Securities Depository to the Agent Member of the
purchaser thereof against payment therefor.
(v) On the day after the Auction Date:
(1) each Bidder's Agent Member referred to in (d)(i)
above shall instruct the Securities Depository to
execute the transactions described in (b)(i) or (ii)
above, and the Securities Depository shall execute such
transactions;
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(2) each Seller's Broker-Dealer or its Agent Member
shall instruct the Securities Depository to execute the
transactions described in (d)(ii) above, and the
Securities Depository shall execute such transactions;
and
(3) each Buyer's Broker-Dealer or its Agent Member
shall instruct the Securities Depository to execute the
transactions described in (d)(iii) above, and the
Securities Depository shall execute such transactions.
(vi) If a Beneficial Owner selling Preferred Shares in an
Auction fails to deliver such shares (by authorized book-entry), a Broker-Dealer
may deliver to the Potential Beneficial Owner on behalf of which it submitted a
Bid that was accepted a number of whole Preferred Shares that is less than the
number of shares that otherwise was to be purchased by such Potential Beneficial
Owner. In such event, the number of Preferred Shares to be so delivered shall be
determined solely by such Broker-Dealer. Delivery of such lesser number of
shares shall constitute good delivery. Notwithstanding the foregoing terms of
this paragraph (f), any delivery or non-delivery of shares which shall represent
any departure from the results of an Auction, as determined by the Auction
Agent, shall be of no effect unless and until the Auction Agent shall have been
notified of such delivery or non-delivery in accordance with the provisions of
the
Auction Agency Agreement and the Broker-Dealer Agreements.
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EXHIBIT B
DEUTSCHE BANK TRUST COMPANY AMERICAS
AUCTION BID FORM
SUBMIT TO: ISSUE:
Deutsche Bank Trust Company Americas
Pioneer Municipal High Income Trust
Corporate Trust and Agency Group Auction Preferred Shares, Series A and B
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Preferred Shares")
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Auction Rate Securities
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
The undersigned Broker-Dealer submits the following Order on behalf of
the Bidder listed below:
Name of Bidder: ______________________
BENEFICIAL OWNER
Shares now held ___________ HOLD ___________________________
BID at rate of _______________________
Series ______ SELL _____________________________
POTENTIAL BENEFICIAL OWNER
# of shares ___________
BID at rate of __________
Notes:
(a) If submitting more than one Bid for one Bidder, use
additional Auction Bid Forms.
If one or more Bids covering in the aggregate more than
the number of outstanding shares held by any Beneficial
Owner are submitted, such bid shall be considered valid
in the order of priority set forth in the Auction
Procedures on the above issue.
A Hold or Sell Order may be placed only by a Beneficial
Owner covering a number of shares not greater than the
number of shares currently held.
Potential Beneficial Owners may make only Bids, each of
which must specify a rate. If more than one Bid is
submitted on behalf of any Potential Beneficial Owner,
each Bid submitted shall be a separate Bid with the
rate specified.
Bids may contain no more than three figures to the
right of the decimal point (.001 of 1%). Fractions will
not be accepted.
NAME OF BROKER-DEALER ________________________________
Authorized Signature
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EXHIBIT C
(Note: To be used only for transfers made other than pursuant to an Auction)
TRANSFER FORM
Re: Pioneer Municipal High Income Fund
Auction Preferred Shares, Series A and B ("Preferred Shares")
We are (check one):
/ / the Existing Holder named below;
/ / the Broker-Dealer for such Existing Holder; or
/ / the Agent Member for such Existing Holder.
We hereby notify you that such Beneficial Owner has transferred ________
Series ____ Preferred Shares to _________________________________.
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(Name of Existing Holder)
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(Name of Broker-Dealer)
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(Name of Agent Member)
By:
-----------------------
Printed Name:
Title:
EXHIBIT D
(NOTE: TO BE USED ONLY FOR FAILURES TO DELIVER OR TO PAY FOR
PREFERRED SHARES SOLD PURSUANT TO AN AUCTION)
NOTICE OF A FAILURE TO DELIVER
We are a Broker-Dealer for ___________________ (the "Purchaser"), which
purchased ________ Series __ Preferred Shares of Pioneer Municipal High Income
Fund in the Auction held on ____________________ from the Seller of such shares.
We hereby notify you that (check one):
/ / the Seller failed to deliver such shares to the Purchaser.
/ / the Purchaser failed to make payment to the Seller upon delivery of
such shares.
Name:
----------------------------
(Name of Broker-Dealer)
By:
----------------------------
Printed Name:
Title: