EXHIBIT 99.(2)(h)
FORM OF PURCHASE AGREEMENT
Boulder Growth & Income Fund, Inc.
(a Maryland corporation)
Auction Market Preferred Shares ("AMPS") of Beneficial Interest
[1,000] Shares [ ]% AMPS
Liquidation Preference $25,000 per Share
PURCHASE AGREEMENT
September [ ], 2005
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
[co-managers]
c/o Merrill Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Boulder Growth & Income Fund, Inc., a Maryland corporation (the "Fund"),
proposes, upon the terms and conditions set forth herein, to issue and sell
[1,000] shares of its Auction Market Preferred Shares, with a liquidation
preference of $25,000 per share (the "AMPS"). The AMPS will be authorized by,
and subject to the terms and conditions of, the Articles Supplementary of the
Fund dated September [ ], 2005 (the "Articles Supplementary") and the Articles
of Incorporation of the Fund, dated as of [ ] (the "Articles"), in the forms
filed as exhibits to the Registration Statement referred to in the third
paragraph of this Agreement, as the same may be amended from time to time. The
Fund and the Fund's investment advisers, Boulder Investment Advisers, LLC, a
Colorado limited liability company ("BIA"), and Xxxxxxx Xxxx Indies Trading
Company, Ltd. d/b/a Xxxxxxx Investment Advisers, a Barbados international
business company ("SIA" and together with BIA, each an "Adviser" and
collectively, the "Advisers"), each confirms its agreement with Xxxxxxx Xxxxx &
Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated ("Xxxxxxx Xxxxx") and
each of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Xxxxxxx Xxxxx is acting as
representative (in such capacity, the "Representative"), with respect to the
issue and sale by the Fund and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of AMPS set forth in said
Schedule A.
The Fund understands that the Underwriters propose to make a public
offering of the AMPS as soon as the Representative deems advisable after this
Agreement has been executed and delivered.
The Fund has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form N-2 (No. 333-126503 and No.
811-7390) covering the registration of the AMPS under the Securities Act of
1933, as amended (the "1933 Act"), including the related preliminary prospectus
or prospectuses, and a notification on Form N-8A of registration of the Fund as
an investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"). Promptly after execution and delivery of this Agreement, the Fund
will either (i) prepare and file a prospectus in accordance with the provisions
of Rule 430A ("Rule 430A") of the rules and regulations of the Commission under
the 1933 Act and the 1940 Act (the "Rules and Regulations") and paragraph (c) or
(h) of Rule 497 ("Rule 497") of the Rules and Regulations or (ii) if the Fund
has elected to rely upon Rule 434 ("Rule 434") of the Rules and Regulations,
prepare and file a term sheet (a "Term Sheet") in accordance with the provisions
of Rule 434 and Rule 497. The information included in any such prospectus or in
any such Term Sheet, as the case may be, that was omitted from such registration
statement at the time it became effective but that is deemed to be part of such
registration statement at the time it became effective, if applicable, (a)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (b) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, including in each
case any statement of additional information incorporated therein by reference,
is herein called a "preliminary prospectus." Such registration statement,
including the exhibits thereto and schedules thereto at the time it became
effective and including the Rule 430A Information and the Rule 434 Information,
as applicable, is herein called the "Registration Statement." Any registration
statement filed pursuant to Rule 462(b) of the Rules and Regulations is herein
referred to as the "Rule 462(b) Registration Statement," and after such filing
the term "Registration Statement" shall include the Rule 462(b) Registration
Statement. The final prospectus in the form first furnished to the Underwriters
for use in connection with the offering of the AMPS, including the statement of
additional information incorporated therein by reference, is herein called the
"Prospectus." If Rule 434 is relied on, the term "Prospectus" shall refer to the
preliminary prospectus dated September [ ], 2005, together with the Term Sheet
and all references in this Agreement to the date of the Prospectus shall mean
the date of the Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("XXXXX").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Fund and the Advisers. The Fund
and the Advisers jointly and severally represent and warrant to each Underwriter
as of the date hereof and as of the Closing Time referred to in Section 2(c)
hereof, and agree with each Underwriter, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act, or order of suspension or
revocation of registration pursuant to Section 8(e) of the 1940 Act, and no
proceedings for any such purpose have been instituted or are pending or, to
the knowledge of the Fund or an Adviser, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with in all material respects.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule
462(b) Registration Statement, the notification on Form N-8A and any
amendments and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act, the 1940 Act and the Rules
and Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. Neither
the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time, included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading. If Rule 434 is used, the Fund will comply
with the requirements of Rule 434 and the Prospectus shall not be
"materially different," as such term is used in Rule 434, from the
prospectus included in the Registration Statement at the time it became
effective.
Each preliminary prospectus and the prospectus filed as part of the
effective Registration Statement or as part of any amendment thereto, or
filed pursuant to Rule 497 under the 1933 Act, complied when so filed in
all material respects with the Rules and Regulations and each preliminary
prospectus and the Prospectus delivered to the Underwriters for use in
connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to XXXXX,
except to the extent permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection with
the offering and sale of the AMPS, the Fund has complied or will comply
with the requirements of Rule 111 under the 1933 Act Regulations relating
to the payment of filing fees thereof.
The foregoing representations in this Section 1(a)(i) do not apply to
statements or omissions relating to the Underwriters made in reliance on
and in conformity with information furnished in writing to the Fund by or
on behalf of the Underwriters or their agents expressly for use in the
Registration Statement, the 462(b) Registration Statement, the Prospectus
or the preliminary prospectus (or any supplement to any of the foregoing).
(ii) Independent Registered Public Accounting Firm. As of the date of
the report of the independent registered public accounting firm contained
in the Registration Statement, the independent registered public accounting
firm who certified the statement of assets and liabilities included in the
Registration Statement are independent registered public accountants as
required by the 1933 Act and the Rules and Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related notes,
present fairly in all material respects the financial position of the Fund
at the date indicated, and said statements have been prepared in conformity
with generally accepted accounting principles ("GAAP").
(iv) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1933 Act and the Rules and Regulations and, when read
together with the other information in the Prospectus, at the date the
Registration Statement became effective, at the date the Prospectus was
issued and at the Closing Time, did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were filed, not misleading.
(v) No Material Adverse Change. Since the respective dates as of which
information with respect to the Fund is given in the Registration Statement
and the Prospectus, except as otherwise stated therein and except for
changes in the net asset value of the Fund arising out of normal investment
operations, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Fund, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Fund, other than those in the ordinary course of
business, which are material with respect to the Fund, and (C) there has
been no dividend or distribution of any kind declared, paid or made by the
Fund on any class of its capital shares, other than those declared on
[insert dates] and paid on [insert dates].
(vi) Good Standing of the Fund. The Fund has been organized and is
validly existing as a corporation in good standing under the laws of the
state of Maryland and has power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and
to enter into and perform its obligations under this Agreement; and the
Fund is duly qualified to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect.
(vii) No Subsidiaries. The Fund has no subsidiaries.
(viii) Investment Company Status. The Fund is registered with the
Commission under the 1940 Act as a closed-end non-diversified management
investment company, and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Fund or any Adviser, threatened by the Commission.
(ix) Officers and Directors. No person is serving or acting as an
officer, director or investment adviser of the Fund except in accordance
with the provisions of the 1940 Act and the Rules and Regulations and the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission promulgated under the Advisers Act
(the "Advisers Act Rules and Regulations"). Except as disclosed in the
Registration Statement and the Prospectus (or any amendment or supplement
to either of them), no director of the Fund is (A) an "interested person"
(as defined in the 0000 Xxx) of the Fund or (B) an "affiliated person" (as
defined in the 0000 Xxx) of any Underwriter. For purposes of this Section
1(a)(ix), the Fund and the Advisers shall be entitled to rely on written
representations of such officers and trustees.
(x) Capitalization. The authorized, issued and outstanding shares of
common stock of the Fund as of the date of the Prospectus are as set forth
in the Prospectus as of the date thereof under the heading
"Capitalization." All issued and outstanding shares of common stock of the
Fund have been duly authorized and validly issued and are fully paid and
non-assessable and have been offered and sold or exchanged by the Fund in
compliance with all applicable laws (including, without limitation, federal
and state securities laws); none of the outstanding shares of common stock
of the Fund were issued in violation of the preemptive or other similar
rights of any securityholder of the Fund.
(xi) Authorization and Description of AMPS. The AMPS to be purchased
by the Underwriters from the Fund have been duly authorized for issuance
and sale to the Underwriters pursuant to this Agreement and, when issued
and delivered by the Fund pursuant to this Agreement against payment of the
consideration set forth herein, will be validly issued and fully paid and
non-assessable. The AMPS conform, in all material respects, to all
statements relating thereto contained in the Prospectus and such
description conforms, in all material respects, to the rights set forth in
the instruments defining the same; no holder of the AMPS will be subject to
personal liability by reason of being such a holder; and the issuance of
the AMPS is not subject to the preemptive or other similar rights of any
securityholder of the Fund.
(xii) Absence of Defaults and Conflicts. The Fund is not in violation
of the Articles or the Fund's by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which it is a party or by
which it may be bound, or to which any of the property or assets of the
Fund is subject (collectively, "Agreements and Instruments") except for
such violations or defaults that would not result in a Material Adverse
Effect; and the execution, delivery and performance of this Agreement, each
Investment Co-Advisory Agreement with BIA and with SIA, the Administration
Agreement, the Custodian Agreement, the Investment Company Service
Agreement and the Auction Agency Agreement referred to in the Registration
Statement (as used herein, the "Advisory Agreements," the "Administration
Agreement," the "Custodian Agreement," the "Transfer Agency Agreement" and
the "Auction Agency Agreement," respectively) and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the AMPS and the use of the proceeds
from the sale of the AMPS as described in the Prospectus under the caption
"Use of Proceeds") and compliance by the Fund with its obligations
hereunder have been duly authorized by all necessary action and do not and
will not, whether with or without the giving of notice or passage of time
or both, conflict with or constitute a breach of, or default or Repayment
Event (as defined below) under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Fund
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the Articles or the Fund's by-laws, or any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Fund or any of its assets, properties
or operations, except for such violations that would not have a Material
Adverse Effect. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Fund.
(xiii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Fund or an Adviser, threatened, against or affecting the Fund, which is
required to be disclosed in the Registration Statement (other than as
disclosed therein), or which would reasonably be expected to result in a
Material Adverse Effect, or which would reasonably be expected to
materially and adversely affect the properties or assets of the Fund or the
consummation of the transactions contemplated in this Agreement or the
performance by the Fund of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Fund is a party or
of which any of its property or assets is the subject which are not
described in the Registration Statement, including ordinary routine
litigation incidental to the business, could not reasonably be expected to
result in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto by the 1933 Act, the 1940 Act
or by the Rules and Regulations which have not been so described and filed
as required.
(xv) Possession of Intellectual Property. The Fund owns or possesses,
or can acquire on reasonable terms, or otherwise has rights to, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by the Fund, and the Fund has not received any notice or is
not otherwise aware of any infringement of or conflict with asserted rights
of others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property that has, or
could reasonably be expected to have, a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Fund of its obligations
hereunder, in connection with the offering, issuance or sale of the AMPS
hereunder or the consummation of the transactions contemplated by this
Agreement, except such as have been already obtained, or with respect to
which the failure to so obtain would not have a Material Adverse Effect, or
as may be required under the 1933 Act, the 1940 Act, the Securities
Exchange Act of 1934, as amended (the "1934 Act") or state securities laws.
(xvii) Possession of Licenses and Permits. The Fund possesses such
permits, licenses, approvals, consents and other authorizations
(collectively, "Governmental Licenses") issued by the appropriate federal,
state, local or foreign regulatory agencies or bodies necessary to operate
its properties and to conduct the business as contemplated in the
Prospectus. The Fund is in compliance with the terms and conditions of all
such Governmental Licenses, except where the failure so to comply would
not, singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and the Fund has not received any notice of
proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xviii) Advertisements. Any advertising, sales literature or other
promotional material (including "prospectus wrappers," "broker kits," "road
show slides" and "road show scripts") authorized in writing by or prepared
by the Fund or the Advisers and used in connection with the public offering
of the AMPS (collectively, "sales material") does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading. Moreover, all
sales material complied and will comply in all material respects with the
applicable requirements of the 1933 Act, the 1940 Act and the Rules and
Regulations and the rules and interpretations of the NASD, Inc. ("NASD").
(xix) Subchapter M. The Fund intends to direct the investment of the
proceeds of the offering described in the Registration Statement in such a
manner as to comply with the requirements of Subchapter M of the Internal
Revenue Code of 1986, as amended ("Subchapter M of the Code" and the
"Code," respectively), and as of the date of this Agreement qualifies as a
regulated investment company under Subchapter M of the Code.
(xx) Distribution of Offering Materials. The Fund has not distributed
and, prior to the later to occur of (A) the Closing Time and (B) completion
of the distribution of the AMPS, will not distribute any offering material
in connection with the offering and sale of the AMPS other than the
Registration Statement, preliminary prospectuses, the Prospectus or the
sales materials.
(xxi) Accounting Controls. The Fund maintains a system of internal
accounting controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization and with the applicable requirements of the 1940
Act, the Rules and Regulations and the Code; (B) transactions are recorded
as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain accountability for assets and to maintain
compliance with the books and records requirements under the 1940 Act and
the Rules and Regulations; (C) access to assets is permitted only in
accordance with the management's general or specific authorization; and (D)
the recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(xxii) Absence of Undisclosed Payments. To the Fund's knowledge,
neither the Fund nor any employee or agent of the Fund has made any payment
of funds of the Fund or received or retained any funds, which payment,
receipt or retention of funds is of a character required to be disclosed in
the Prospectus.
(xxiii) Material Agreements. This Agreement, the Advisory Agreements,
the Administration Agreement, the Custodian Agreement, the Transfer Agency
Agreement and the Auction Agency Agreement have each been duly authorized
by all requisite action on the part of the Fund, executed and delivered by
the Fund, as of the dates noted therein and each complies with all
applicable provisions of the 1940 Act. Assuming due authorization,
execution and delivery by the other parties thereto, each such agreement
constitutes a valid and binding agreement of the Fund, enforceable against
the Fund in accordance with its terms, except as rights to indemnity and
contribution hereunder may be limited by federal or state securities laws
and public policy and except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafter in
effect, relating to or affecting creditors' rights and remedies generally,
general equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing.
(xxiv) Registration Rights. There are no persons with registration
rights or other similar rights to have any securities of the Fund
registered pursuant to the Registration Statement or otherwise registered
by the Fund under the 1933 Act.
(xxv) Ratings. The AMPS have been, or prior to the Closing Time will
be, assigned a rating of 'Aaa' by Xxxxx'x Investors Service, Inc.
("Moody's") and 'AAA' by Fitch, Inc. ("Fitch").
(xxvi) Leverage. Except as otherwise disclosed in the Prospectus, the
Fund has no liability for borrowed money, including under any reverse
repurchase agreement.
(b) Representations and Warranties by the Advisers. Each of the Advisers
represents and warrants to each Underwriter, as of the date hereof and as of the
Closing Time referred to in Section 2(c) hereof, as follows:
(i) Good Standing of the Advisers. Such Adviser has been duly
organized and is validly existing and in good standing as a limited
liability company under the laws of the state of Colorado, in the case of
BIA, or as an international business company under the laws of Barbados, in
the case of SIA, with full power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus
and each is duly qualified as a foreign corporation or a limited liability
company, as the case may be, to transact business and is in good standing
in each other jurisdiction in which such qualification is required, except
where failure to qualify or to be in good standing would not result in a
material adverse effect..
(ii) Investment Adviser Status. Such Adviser is duly registered with
the Commission as an investment adviser under the Advisers Act, and is not
prohibited by the Advisers Act or the 1940 Act, or the rules and
regulations under such acts, from acting under the Advisory Agreement to
which it is a party for the Fund as contemplated by the Prospectus.
(iii) Description of the Advisers. The description of such Adviser in
the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) complied and complies in all material
respects with the provisions of the 1933 Act, the 1940 Act, the Advisers
Act, the Rules and Regulations and the Advisers Act Rules and Regulations
and is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(iv) Capitalization. Such Adviser has the financial resources
available to it necessary for the performance of its services and
obligations as contemplated in the Prospectus, this Agreement and under the
Advisory Agreement to which it is a party.
(v) Authorization of Agreements; Absence of Defaults and Conflicts.
This Agreement and the Advisory Agreement to which it is a party have each
been duly authorized, executed and delivered by the Adviser and, assuming
due authorization, execution and delivery by the other parties thereto,
each such agreement constitutes a valid and binding obligation of such
Adviser, enforceable in accordance with its terms, except as rights to
indemnity and contribution may be limited by federal or state securities
laws and public policy and except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws now or hereafer in
effect, relating to or affecting creditors' rights and remedies generally
and general equitable principles (whether considered in a proceeding in
equity or at law); and neither the execution and delivery of this
Agreement, or the Advisory Agreement to which such Adviser is a party nor
the performance by such Adviser of its obligations hereunder or thereunder
will conflict with, or result in a breach of any of the terms and
provisions of, or constitute, with or without the giving of notice or lapse
of time or both, a default under, any agreement or instrument to which such
Adviser is a party or by which it is bound, and which is material to the
conduct of such Adviser's services under the Advisory Agreement, the
organizational documents of the Adviser, or to the Adviser's knowledge, by
any law, order, decree, rule or regulation applicable to it of any
jurisdiction, court, federal or state regulatory body, administrative
agency or other governmental body, stock exchange or securities association
having jurisdiction over the Adviser or its properties or operations; and
no consent, approval, authorization or order of any court or governmental
authority or agency is required for the consummation by the Adviser of the
transactions contemplated by this Agreement, the Advisory Agreement to
which it is a party, except as have been obtained or may be required under
the 1933 Act, the 1940 Act, the 1934 Act or state securities laws.
(vi) No Material Adverse Change. Since the respective dates as of
which information with respect to each of the Advisers is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, there has not occurred any event which would reasonably be
expected to have a material adverse effect on the ability of such Adviser
to perform its obligations under any of this Agreement, the Advisory
Agreement to which it is a party.
(vii) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
such Adviser, threatened against or affecting such Adviser or any
"affiliated person" of such Adviser (as such term is defined in the 0000
Xxx) or any partners, directors, officers or employees of the foregoing,
whether or not arising in the ordinary course of business, which would
reasonably be expected to result in any material adverse change in the
condition, financial or otherwise, or earnings, business affairs or
business prospects of such Adviser, materially and adversely affect the
properties or assets of such Adviser or to materially impair or adversely
affect the ability of such Adviser to function as an investment adviser or
perform its obligations under the Advisory Agreement to which it is a
party, or which is required to be disclosed in the Registration Statement
and the Prospectus (and has not been so disclosed).
(viii) Absence of Violation or Default. Such Adviser is not in
violation of its organizational documents or in default under any
agreement, indenture or instrument, where such violation or default should
reasonably be expected to have a material adverse effect on the ability of
such Adviser to perform its obligations under either of the Advisory
Agreement to which it is a party.
(c) Officer's Certificates. Any certificate signed by any officer of the
Fund or either Adviser delivered to the Representative or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or such
Adviser, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) AMPS. On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Fund
agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Fund, at the
price per share set forth in Schedule B, the number of AMPS set forth in
Schedule A opposite the name of such Underwriter, plus any additional number of
AMPS which such Underwriter may become obligated to purchase pursuant to the
provisions of Section 10 hereof.
(b) Commission. The Fund agrees to pay to the Underwriters a commission as
set forth in Schedule B as compensation to the Underwriters for their
performance under this Agreement.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the AMPS shall be made at the offices of Xxxxxxxx Chance US
LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or through the facilities of
The Depository Trust Company ("DTC"), or at such other place as shall be agreed
upon by the Representative and the Fund, at 10:00 A.M. (Eastern time) on the
second (third, if the pricing occurs after 4:30 P.M. (Eastern Time) on any given
day) business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the Representative and the Fund (such
time and date of payment and delivery being herein called "Closing Time").
Payment shall be made to the Fund by wire transfer of immediately available
funds to a bank account designated by the Fund, against delivery to the
Representative through DTC for the respective accounts of the Underwriters of
the AMPS to be purchased by them. It is understood that each Underwriter has
authorized the Representative, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the AMPS which it has agreed to
purchase. Xxxxxxx Xxxxx, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the AMPS to be purchased by any Underwriter whose funds have not been
received by the Closing Time but such payment shall not relieve such Underwriter
from its obligations hereunder.
(d) Denominations; Registration. Certificates for the AMPS, each
representing one series of the preferred shares, shall be registered in the name
of Cede & Co., as nominee for DTC. The certificates for the AMPS will be made
available for examination and packaging by the Representative in the City of New
York not later than 10:00 A.M. (Eastern time) on the business day prior to the
Closing Time.
SECTION 3. Covenants.
(a) The Fund and the Advisers, jointly and severally, covenant with each
Underwriter as follows:
(i) Compliance with Securities Regulations and Commission Requests.
The Fund, subject to Section 3(a)(ii), will comply with the
---------------------------------------------------------------
requirements of Rule 430A or Rule 434, as applicable, and will notify the
Representative immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus
shall have been filed, (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the AMPS for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Fund will promptly effect
the filings necessary pursuant to Rule 497 and will take such steps as it
deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 497 was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Fund will make every reasonable commercial effort to
prevent the issuance of any stop order, or order of suspension or
revocation of registration pursuant to Section 8(e) of the 1940 Act, and,
if any such stop order or order of suspension or revocation of registration
is issued, to obtain the lifting thereof at the earliest possible moment.
(ii) Filing of Amendments. The Fund will give the Representative
notice of its intention to file or prepare any amendment to the
Registration Statement (including any filing under Rule 462(b)), any Term
Sheet or any amendment, supplement or revision to either the prospectus
included in the Registration Statement at the time it became effective or
to the Prospectus, will furnish the Representative with copies of any such
documents a reasonable amount of time prior to such proposed filing or use,
as the case may be, and will not file or use any such document to which the
Representative or counsel for the Underwriters shall object.
(iii) Delivery of Registration Statements. The Fund has furnished or
will deliver to the Representative and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representative,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(iv) Delivery of Prospectuses. The Fund has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Fund hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Fund
will furnish to each Underwriter, without charge, during the period when
the Prospectus is required to be delivered under the 1933 Act or the 1934
Act, such number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(v) Continued Compliance with Securities Laws. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with
sales of the AMPS, any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of counsel for
the Underwriters or for the Fund, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will not
include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of
such counsel, at any such time to amend the Registration Statement or amend
or supplement the Prospectus in order to comply with the requirements of
the 1933 Act or the Rules and Regulations, the Fund will promptly prepare
and file with the Commission, subject to Section 3(a)(ii), such amendment
or supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Fund will furnish to the Underwriters such number of
copies of such amendment or supplement as the Underwriters may reasonably
request.
(vi) Blue Sky Qualifications. The Fund will use its reasonable best
efforts, subject to the reasonable cooperation with the Underwriters, to
qualify the AMPS for offering and sale under the applicable securities laws
of such states and other jurisdictions of the United States as the
Representative may designate and to maintain such qualifications in effect
for a period of not less than one year from the later of the effective date
of the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Fund shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as
a dealer in securities in any jurisdiction in which it is not so qualified
or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. In each jurisdiction
in which the AMPS have been so qualified, the Fund will file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for a period of not less than one
year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(vii) Rule 158. The Fund will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement, if
applicable, for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(viii) Use of Proceeds. The Fund will use the net proceeds received by
it from the sale of the AMPS in the manner specified in the Prospectus
under "Use of Proceeds."
(ix) Reporting Requirements. The Fund, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant
to the 1940 Act and the 1934 Act within the time periods required by the
1940 Act and the Rules and Regulations and the 1934 Act and the rules and
regulations of the Commission thereunder, respectively.
(x) Subchapter M. The Fund intends to comply with the requirements of
Subchapter M of the Code to qualify as a regulated investment company under
the Code.
(xi) No Manipulation of Market for AMPS. The Fund will not (a) take,
directly or indirectly, any action designed to cause or to result in, or
that might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Fund to facilitate the
sale or resale of the AMPS in violation of federal or state securities
laws, and (b) until the Closing Time (i) sell, bid for or purchase the AMPS
or pay any person any compensation for soliciting purchases of the AMPS or
(ii) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Fund .
(xii) Rule 462(b) Registration Statement. If the Fund elects to rely
upon Rule 462(b), the Fund shall file a Rule 462(b) Registration Statement
with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Fund shall at
the time of filing either pay to the Commission the filing fee for the Rule
462(b) Registration Statement or give irrevocable instructions for the
payment of such fee pursuant to Rule 111(b) under the 1933 Act.
(xiii) Accountant's Certificate. The Fund will furnish to the
Underwriters, on the date on which delivery is made to the Rating Agencies,
the report and the confirmation of the Independent Accountant (as defined
in the Articles Supplementary) required to be delivered pursuant to
paragraph 6(c) of Part I of the Articles Supplementary.
(b) Except as provided in this Agreement, the Fund will not sell, contract
to sell or otherwise dispose of any of its preferred shares of common stock of
the same series as the AMPS or any securities convertible into or exercisable or
exchangeable for its preferred shares of common stock of the same series as the
AMPS, or grant any options or warrants to purchase its preferred shares of
common stock of the same series as the AMPS, for a period of 180 days after the
date of this Prospectus, without the prior written consent of Xxxxxxx Xxxxx.
SECTION 4. Payment of Expenses.
(a) Expenses. The Fund will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the AMPS,
(iii) the preparation, issuance and delivery of the certificates for the AMPS to
the Underwriters, including any stock or other transfer taxes and any stamp or
other duties payable upon the sale, issuance or delivery of the AMPS to the
Underwriters, (iv) the fees and disbursements of the Fund's counsel, accountants
and other advisers, (v) the qualification of the AMPS under securities laws in
accordance with the provisions of Section 3(a)(vi) hereof, including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, Prospectus and any
amendments or supplements thereto, (vii) the preparation, printing and delivery
to the Underwriters of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the AMPS,
(ix) the fees and expenses incurred in connection with the rating of the AMPS,
and (x) the printing of any sales material. The Advisers will pay the amount by
which the fees and disbursements of the Underwriters' counsel exceed $100,000.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)
hereof, the Fund and each of the Advisers, jointly and severally, agree that
they shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters hereunder are subject to the
accuracy of the representations and warranties of the Fund and the Advisers
contained in Section 1 hereof or in certificates of any officer of the Fund or
either Adviser delivered pursuant to the provisions hereof, to the performance
by the Fund and each Adviser of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective or will
have become effective by 5:30 p.m., New York City time on the date hereof, and
at Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act, no notice or order pursuant
to Section 8(e) of the 1940 Act shall have been issued, and no proceedings with
respect to either shall have been initiated or, threatened by the Commission,
and any request on the part of the Commission for additional information shall
have been complied with or waived to the reasonable satisfaction of counsel to
the Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 497 (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the Fund has
elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 497.
(b) Opinion of Counsel for Fund and the Advisers. At Closing Time, the
Representative shall have received the favorable opinions, dated as of Closing
Time, of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, counsel for the Fund, and of
Xxxxxxx X. Xxxxxx, P.C., counsel for BIA and SIA, in form and substance
satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth
in Exhibit A and Exhibit B, respectively, hereto and to such further effect as
counsel to the Underwriters may reasonably request. In giving such opinion, such
counsel may rely, as to matters governed by the laws of jurisdictions other than
law of the State of New York[, the State of Colorado] and the federal law of the
United States, upon the opinions of counsel satisfactory to the Representative.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certifications
of officers of the Fund and the Advisers and certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative shall have received the favorable opinion, dated as of Closing
Time, of Xxxxxxxx Chance US LLP, counsel for the Underwriters, together with
signed or reproduced copies of such letter for each of the other Underwriters
with respect to the matters set forth in paragraphs 1, 3 through 6, inclusive, 8
(only as to the information in the Prospectus under "Description of AMPS" and
"The Auction"), 13, 14 and the second to last paragraph of Exhibit A hereto. In
giving such opinion such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of the State of New York and the
federal law of the United States, upon the opinions of counsel satisfactory to
the Representative. Such counsel may also state that, insofar as such opinion
involves factual matters, they have relied, to the extent they deem proper, upon
certificates of officers of the Fund and the Advisers and certificates of public
officials.
(d) Officers' Certificates. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Fund, whether or not arising in the ordinary course of business, except for
changes in the net asset value of the Fund arising out of normal investment
operations, and the Representative shall have received a certificate of a duly
authorized officer of the Fund and of the chief financial or chief accounting
officer of the Fund and of the President or a Vice President (or similar
officials with comparable responsibilities) of each of the Advisers, dated as of
Closing Time, to the effect that (i) there has been no such material adverse
change, (ii) the representations and warranties in Sections 1(a) and (b) hereof,
as applicable, are true and correct with the same force and effect as though
expressly made at and as of Closing Time, (iii) each of the Fund and the
Advisers, respectively, has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time,
(iv) with respect to each Adviser, there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of such Adviser, whether or not arising in the ordinary
course of business and (v) with respect to the Fund only, no stop order
suspending the effectiveness of the Registration Statement, or order of
suspension or revocation of registration pursuant to Section 8(e) of the 1940
Act, has been issued and no proceedings for any such purpose have been
instituted or are pending or are contemplated by the Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from KPMG LLP a letter dated
such date, in form and substance satisfactory to the Representative, together
with signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representative shall
have received from KPMG LLP a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to shall
be a date not more than three business days prior to Closing Time.
(g) Rating. The Fund shall have delivered and the Representatives shall
have received evidence satisfactory to the Representatives that the AMPS are
rated 'Aaa' by Xxxxx'x and 'AAA' by Fitch as of the Closing Time, and there
shall not have been given any notice of any intended or potential downgrading,
or of any review for a potential downgrading, in the rating accorded to the AMPS
or any other securities issued by the Fund, by Xxxxx'x or by Fitch.
(h) Asset Coverage. As of the Closing Time and assuming the receipt of the
net proceeds from the sale of the AMPS, the 1940 Act Preferred Shares Asset
Coverage and the Preferred Shares Basic Maintenance Amount (each as defined in
the Articles Supplementary) each will be met.
(i) Termination of Bank Debt. As of the Closing Time, the counsel for the
Underwriters shall have been furnished with such documents which will show that
the Bank Debt (as defined in the Prospectus) will be repaid immediately in its
entirety from the proceeds of the Offering, and the bank line of credit for such
Bank Debt is terminated.
(j) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the issuance
and sale of the AMPS as herein contemplated, or in order to evidence the
accuracy of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the Fund and
the Advisers in connection with the organization and registration of the Fund
under the 1940 Act and the issuance and sale of the AMPS as herein contemplated
shall be satisfactory in form and substance to the Representative and counsel
for the Underwriters.
(k) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled by the Fund or the Advisers when and as required
to be fulfilled, this Agreement may be terminated by the Representative by
notice to the Fund at any time at or prior to Closing Time and such termination
shall be without liability of any party to any other party except as provided in
Section 4 and except that Sections 1, 6, 7, 8 and 13 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Fund and the Advisers, jointly and
severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(e) below) any such settlement is effected with the written consent of the
Fund; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Xxxxxxx Xxxxx), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or the
Advisers by any Underwriter through Xxxxxxx Xxxxx expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); and
provided further that neither the Fund nor either Adviser will be liable to any
Underwriter with respect to any indemnification contained in this paragraph (a)
to the extent that the Fund or such Adviser shall sustain the burden of proving
that any such loss, liability, claim, damage or expense resulted from the fact
that such Underwriter, in contravention of a requirement of this Agreement or
applicable law, sold AMPS to a person to whom such Underwriter failed to send or
give, at or prior to the Closing Time, a copy of the Prospectus, as then amended
or supplemented if: (i) the Fund has previously furnished copies thereof
(sufficiently in advance of the Closing Time to allow for distribution by the
Closing Time) to the Underwriter and the loss, liability, claim, damage or
expense of such Underwriter resulted from an untrue statement or omission of a
material fact contained in or omitted from the preliminary prospectus which was
corrected in the Prospectus as, if applicable, amended or supplemented prior to
the Closing Time and such Prospectus was required by law to be delivered at or
prior to the written confirmation of sale to such person and (ii) the failure to
give or send such Prospectus by the Closing Time to such person would have
constituted the sole basis for the claim asserted by such person against the
party or parties asserting such loss, liability, claim, damage or expense as to
which indemnification is sought pursuant to this paragraph (a).
(b) Indemnification of the Fund, Advisers, Trustees, Directors and
Officers. Each Underwriter severally agrees to indemnify and hold harmless the
Fund and the Advisers, their respective directors, each of the Fund's officers
who signed the Registration Statement, and each person, if any, who controls the
Fund or either Adviser within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Fund or the Advisers by such Underwriter
through Xxxxxxx Xxxxx expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, or such preliminary prospectus or the Prospectus (or any amendment
or supplement thereto).
(c) Indemnification for Marketing Materials. In addition to the foregoing
indemnification, the Fund and the Advisers also, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in Section 6(a), as limited by
the proviso set forth therein, with respect to any sales material.
(d) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement of such
action, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, to assume the defense thereof with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to the indemnified party of its election to assume the defense thereof,
the indemnifying party shall not be liable to the indemnified party for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation. In any such action where the
indemnifying party does not assume the defense thereof, counsel to the
indemnified parties shall be selected by Xxxxxxx Xxxxx in the case of parties
indemnified pursuant to Section 6(a) above, and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the indemnified parties
shall be selected by the Fund and the Advisers, and in each case, an
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(e) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 60 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Fund or the Advisers on the one hand and the
Underwriters on the other hand from the offering of the AMPS pursuant to this
Agreement or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Fund and the Advisers on the one hand and of the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Fund and the Advisers on the one hand
and the Underwriters on the other hand in connection with the offering of the
AMPS pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the AMPS pursuant to
this Agreement (before deducting expenses) received by the Fund and the total
underwriting discount received by the Underwriters (whether from the Fund or
otherwise), in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the AMPS as set forth on such cover.
The relative fault of the Fund and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund or the Advisers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Fund, the Advisers and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the AMPS underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such Underwriter
has otherwise been required to pay by reason of any such untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Fund and each member or director of the Advisers,
respectively, each officer of the Fund who signed the Registration Statement,
and each person, if any, who controls the Fund or each of Advisers, within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Fund and the Advisers. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of AMPS set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement
or in certificates of officers of the Fund or either of the Advisers submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Fund or the Advisers, and shall survive
delivery of the AMPS to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative may terminate this Agreement,
by notice to the Fund, at any time at or prior to Closing Time (i) if there has
been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Fund or any Adviser, whether or not arising
in the ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representative, impracticable or inadvisable to market the AMPS
or to enforce contracts for the sale of the AMPS, or (iii) if trading in the
shares of common stock of the Fund has been suspended or materially limited by
the Commission or the New York Stock Exchange ("NYSE"), or if trading generally
on the American Stock Exchange or the NYSE or in the NASDAQ National Market has
been suspended or materially limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority, or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States or
(iv) if a banking moratorium has been declared by either Federal or New York
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7, 8 and 13 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at Closing Time to purchase
the AMPS which it or they are obligated to purchase under this Agreement (the
"Defaulted AMPS"), the Representative shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted AMPS in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representative shall not have completed such
arrangements within such 24-hour period, then:
(a) if the number of Defaulted AMPS does not exceed 10% of the number of
AMPS to be purchased on such date, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount thereof in
the proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted AMPS exceeds 10% of the number of AMPS to be
purchased on such date, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement either the Representative or the Fund shall have the right to
postpone Closing Time for a period not exceeding seven days in order to effect
any required changes in the Registration Statement or Prospectus or in any other
documents or arrangements. As used herein, the term "Underwriter" includes any
person substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure.
Notwithstanding any other provision of this Agreement, from the
commencement of discussions with respect to the transactions contemplated
hereby, the Fund and each of the Advisers (and each employee, representative or
other agent of the Fund) may disclose to any and all persons, without limitation
of any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 12. Notices.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Underwriters shall be directed to the
Representative, Xxxxxxx Xxxxx & Co., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, attention of Equity Capital Markets; and notices to the Fund or BIA
shall be directed to the office of Boulder Investment Advisers, LLC at 0000 00xx
Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, Attention: General Counsel and to
SIA to the office of Xxxxxxx Xxxx Indies Trading Company, Ltd. at Bellerive,
Queen Street, St. Xxxxx, Barbados, Attention: General Counsel.
SECTION 13. Parties.
This Agreement shall inure to the benefit of and be binding upon the
Underwriters, the Fund, each of the Advisers and their respective partners and
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund, the Advisers and their respective successors and the
controlling persons and officers, trustees, directors and partners referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Fund, the Advisers and their respective partners and
successors, and said controlling persons and officers, trustees, directors and
partners and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of AMPS from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. Governing Law and Time.
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. UNLESS OTHERWISE EXPLICITLY PROVIDED, SPECIFIED TIMES OF DAY
REFER TO NEW YORK CITY TIME.
SECTION 15. Agent for Service of Process; Submission to Jurisdiction.
SIA agrees that any legal action or proceeding arising out of or relating
to this Agreement any other document executed in connection herewith, or any
legal action or proceeding to execute or otherwise enforce any judgment obtained
against SIA for breach hereof or thereof, or against any of its properties, may
be brought in the courts of the State of New York or the United States District
Court for the Southern District of New York by any Underwriter or on any
Underwriter's behalf, as any Underwriter may elect and SIA hereby irrevocably
and unconditionally submits to the non-exclusive jurisdiction of such courts for
purposes of any such legal action or proceeding and hereby agrees that it shall
at all times maintain a duly authorized agent for acceptance of service of legal
process of SIA located in the United States. SIA hereby irrevocably appoints and
designates Xxxxxxxxx Xxxxxx (and she has accepted such appointment and
designation), or any other person having and maintaining a place of business in
the State of New York whom SIA may from time to time hereafter designate (having
given 30 days' notice thereof to Xxxxxxx Xxxxx), as the true and lawful attorney
and duly authorized agent for acceptance of service of legal process of SIA. SIA
hereby agrees that service of process in any such proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to it at its address specified in
Section 12 or at such other address of which Xxxxxxx Xxxxx shall have been
notified pursuant thereto. In addition, SIA hereby irrevocably waives to the
fullest extent permitted by law, any objection which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or any other document executed in connection herewith
brought in the courts of the State of New York or the United States District
Court for the Southern District of New York, and any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum.
SECTION 16. No Fiduciary Relationship.
The Fund acknowledges and agrees that (i) the purchase and sale of the AMPS
pursuant to this Agreement, including the determination of the public offering
price of the AMPS and any related discounts and commissions, is an arm's-length
commercial transaction between the Fund on the one hand, and the several
Underwriters, on the other hand, (ii) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as a principal and is not the agent or fiduciary
of the Fund, or its stockholders, creditors, employees or any other party, (iii)
no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Fund with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Fund on other matters) and no
Underwriter has any obligation to the Fund with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement, (iv) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of the Fund, and (v) the Underwriters have not provided any legal, accounting,
regulatory or tax advice with respect to the offering contemplated hereby and
the Fund has consulted its own legal, accounting, regulatory and tax advisors to
the extent it deemed appropriate.
SECTION 17. Effect of Headings.
The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
[signatures on following page]
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 the
Underwriters, the Fund, and each of the Advisers in accordance with its terms.
Very truly yours,
BOULDER GROWTH & INCOME FUND, INC.
By:---------------------------------------------
Name:
Title:
BOULDER INVESTMENT ADVISERS, LLC
By:---------------------------------------------
Name:
Title:
XXXXXXX XXXX INDIES TRADING COMPANY, LTD.
By:---------------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXXX XXXXX & CO.
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
[co-managers]
By: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
------------------------------------------------
Authorized Signatory
For itself and as
Representative of the
other Underwriters named
in Schedule A hereto.
SCHEDULE A
Name of Underwriter Number of AMPS
------------------- --------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated...........................
Total.................................................. [1,000]
SCHEDULE B
BOULDER GROWTH & INCOME FUND, INC.
Auction Market Preferred Shares of Beneficial Interest
[1,000] Shares [ ]% AMPS
Liquidation Preference $25,000 per share
1. The initial public offering price per share for the AMPS, determined as
provided in said Section 2, shall be $25,000.
2. The purchase price per share for the AMPS to be paid by the several
Underwriters shall be $24,750, such discount from the initial public offering
price representing the commission to be paid to the Underwriters for their
commitment hereunder of $250.
3. The initial dividend rate on the AMPS shall be [ ]% per annum.
Exhibit A
FORM OF OPINION OF FUND'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
________, 2005
1. The Fund is validly existing as a corporation in good standing under the
laws of the State of Maryland and has corporate power and authority to carry on
its business and own, lease and operate its properties as such business and
properties are described in the Prospectus and to enter into and perform its
obligations under the Purchase Agreement. No franchise taxes that are currently
due with respect to the Fund have not been paid.
2. The authorized, issued and outstanding shares of common stock of the
Fund as of the date of the Prospectus are as set forth in the Prospectus under
the caption "Capitalization" (except for subsequent issuances, if any, pursuant
to the Purchase Agreement); all issued and outstanding shares of common stock as
of the date hereof have been duly authorized, validly issued, are fully paid and
non-assessable and have been sold either to the Adviser pursuant to an exemption
from registration under the Securities Act, pursuant to an offering of the
Fund's common stock registered under the Securities Act or issued in accordance
with the Fund's Dividend Reinvestment Plan; and the Fund's shares of common
stock are not and will not be subject to any preemptive or similar statutory
rights under the Maryland General Corporation Law statute or, to our knowledge,
similar contractual rights granted by the Fund.
3. The Shares have been duly authorized and, when issued and delivered to
the Underwriters against payment therefor as provided by the Purchase Agreement,
will be validly issued and fully paid and non-assessable and no holder of the
Shares is or will be subject to personal liability under the Articles of
Incorporation or the Maryland General Corporation Law by reason of being such a
holder.
4. The issuance of Shares will not be subject to any preemptive or similar
statutory rights under the Maryland General Corporation Law statute or under the
[Articles of Incorporation] or, to our knowledge, similar contractual rights
granted by the Fund.
5. The Purchase Agreement has been duly authorized, executed and delivered
by the Fund.
6. The Registration Statement has become effective under the Securities
Act. Any required filing of the Prospectus pursuant to Rule 497(c) or Rule
497(h) has been made in the manner and within the time period required by Rule
497. To our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued under the Securities Act. To our
knowledge, (i) no order of suspension or revocation of registration pursuant to
Section 8(e) of the Investment Company Act of 1940, as amended, and the rules
and regulations thereunder (the "1940 Act") has been issued, and (ii) no
proceedings for any such purpose have been instituted or are pending or
threatened by the Commission.
7. To our knowledge, there are no legal or governmental proceedings pending
or threatened against the Fund.
8. The statements in the Prospectus under the captions "Description of
AMPS," "The Auction" and "Federal Income Tax Matters," in Item 29 of Part C of
the Registration Statement, and the section of the Statement of Additional
Information entitled "Federal Income Tax Matters," insofar as such statements
constitute matters of law or legal conclusions or are descriptions of the rights
set forth in the [Articles of Incorporation], the By-laws or the Statement, are
correct in all material respects.
9. Each of the Co-Advisory Agreement between the Fund and BIA, dated _____,
200__ (the "BIA Advisory Agreement"), the Co-Advisory Agreement between the Fund
and SIA, dated _____, 200__ (the "SIA Advisory Agreement"), the Administration
Agreement among the Fund and the Adviser, dated as of [ ] (the "Administration
Agreement"), the Custodian Agreement, dated as of [ ], among Investors Bank &
Trust Company and the funds named therein (the "Custodian Agreement"), the
Transfer Agency Agreement, dated [ ], between the Fund and Deutsche Bank Trust
Company Americas (the "Transfer Agency Agreement"), the Auction Agency Agreement
between the Fund and Deutsche Bank Trust Company Americas, dated as of ________,
2005 (the "Auction Agency Agreement") and the Purchase Agreement do not violate
the 1940 Act, the Investment Advisers Act of 1940, as amended, and the rules and
regulations thereunder (the "Advisers Act").
10. The Fund is registered with the Commission under the 1940 Act as a
closed-end non-diversified management investment company. To our knowledge, no
order of suspension or revocation of such registration has been issued or
proceedings therefor initiated or, to our knowledge, threatened by the
Commission.
11. To our knowledge, no person affiliated with the Adviser is serving as
an officer, director or investment adviser of the Fund except in accordance with
the 1940 Act and the Advisers Act. Except as disclosed in the Registration
Statement and Prospectus (or any amendment or supplement to either of them), to
our knowledge, no director of the Fund is an "interested person" (as defined in
the 0000 Xxx) of the Fund or an "affiliated person" (as defined in the 0000 Xxx)
of an Underwriter.
12. The execution and delivery of the Purchase Agreement by the Fund, the
compliance by the Fund with all the provisions thereof and the consummation by
the Fund of the transactions contemplated thereby (including the issuance and
sale of the Shares and the use of the proceeds from the sale of the Shares as
described in the Prospectus under the caption "Use of Proceeds") do not and will
not (A) require any consent, approval, authorization or other order of, or
qualification with, any Colorado state or U.S. federal court or governmental
body or agency (except such as may be required under the securities or Blue Sky
laws of the various states or the National Association of Securities Dealers,
Inc. or as have been obtained under the federal securities laws), (B) conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, or result in the imposition of a lien, charge or encumbrance upon the
assets of the Fund pursuant to any indenture, loan agreement, mortgage, lease or
other agreement or instrument listed in the certificate attached hereto as Annex
A, (C) violate or conflict with the Articles of Incorporation, the By-laws or
the Statement, (D) violate or conflict with the Maryland General Corporation Law
statute or any applicable U.S. federal or Colorado state law, rule or regulation
which in our experience is normally applicable in transactions of the type
contemplated by the Purchase Agreement, or (E) violate or conflict with any
judgment, order or decree specifically naming the Fund or specifically
applicable to the Fund's property and of which we are aware.
13. Each of the BIA Advisory Agreement, the SIA Advisory Agreement, the
Administration Agreement, the Custodian Agreement, the Transfer Agency Agreement
and the Auction Agency Agreement has been duly authorized by all requisite
action on the part of the Fund and executed and delivered by the Fund, as of the
dates noted therein. Assuming due authorization, execution and delivery by the
other parties thereto with respect to the Administration Agreement, Custodian
Agreement, the Transfer Agency Agreement and the Auction Agency Agreement, each
of the BIA Advisory Agreement, the SIA Advisory Agreement, the Administration
Agreement, the Custodian Agreement, the Transfer Agency Agreement and the
Auction Agency Agreement constitutes a valid and binding agreement of the Fund,
enforceable against the Fund in accordance with their respective terms.
14. The form of certificate used to evidence the Shares complies in all
material respects with all applicable requirements of the Maryland General
Corporation Law statute, with any applicable requirements of the Articles of
Incorporation and Fund By-Laws.
In addition to the opinions provided above, we wish to confirm to you:
In connection with the preparation of the Registration Statement, the
Prospectus and the Statement of Additional Information, we have participated in
conferences with officers and representatives of the Fund, BIA and SIA,
representatives of and counsel for the Underwriters, and representatives of the
independent accountants of the Fund, during which the contents of the
Registration Statement, the Prospectus and the Statement of Additional
Information were discussed. While the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process are such that we are not passing upon and do not assume
any responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement, the Prospectus or the Statement of
Additional Information (except to the extent expressly set forth in paragraph 8
above), subject to the foregoing and based on such participation, we advise you
that (a) the Registration Statement, including any Rule 430A Information, the
Prospectus and each amendment or supplement to the Registration Statement and
Prospectus as of their respective effective or issue dates (except for the
financial statements, including the notes and schedules thereto, and other
financial and accounting data and information included therein or omitted
therefrom, as to which we express no view), and the notification on Form N-8A,
as amended, appear on their face to be appropriately responsive in all material
respects to the requirements of the Securities Act, the 1940 Act and the
applicable rules and regulations of the Commission thereunder, (b) no facts have
come to our attention which have caused us to believe that (i) the Registration
Statement, as of the Effective Date, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading
(except as set forth in the parenthetical in clause (a) above), or (ii) the
Prospectus and the Statement of Additional Information, as of the date filed
with the Commission pursuant to Rule 497 under the Securities Act or as of the
date hereof, contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading (except as
set forth in the parenthetical in clause (a) above).
Exhibit B
FORM OF OPINION OF BIA'S and SIA'S
COUNSEL TO BE DELIVERED PURSUANT TO
SECTION 5(b)
________, 2005
1. Xxxxxxx Xxxx Indies Trading Company, Ltd. (the "Adviser") has been
duly organized and is a validly existing international business
company in good standing under the laws of Barbados.
2. The Adviser is duly qualified to do business in each jurisdiction in
which the ownership of its properties, or the conduct of its business
requires it to be so qualified, except where the failure to so qualify
would not result in a material adverse effect with respect to the
Adviser.
3. The Adviser has the corporate power and authority to own, lease and
operate its properties and assets and to conduct the business in which
it currently engages as described in the Prospectus and to execute,
deliver and perform its obligations under the Purchase Agreement.
4. The Adviser is duly registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
is not prohibited by the Advisers Act, the Investment Company Act of
1940, as amended (the "Investment Company Act"), or the rules and
regulations of the Securities and Exchange Commission thereunder from
acting under the SIA Advisory Agreement for the Fund as contemplated
by the Prospectus.
5. The Adviser (i) has taken all necessary action to authorize the
execution, delivery and performance of the Purchase Agreement and the
SIA Advisory Agreement, and (ii) has duly executed and delivered the
Purchase Agreement and the SIA Advisory Agreement.
6. The SIA Advisory Agreement is a legal, valid and binding obligation of
the Adviser, enforceable against the Adviser in accordance with its
terms.
7. To our knowledge, there is no legal or governmental proceeding pending
or threatened against the Adviser that is required to be disclosed in
the Registration Statement or the Prospectus that is not already
disclosed or which would make the Adviser ineligible to act as the
Fund's investment adviser.
8. No consent, authorization, license, exemption or approval by, or
filing with, any Barbados governmental authority is required to be
obtained or made by the Adviser in connection with the execution,
delivery or performance of its obligations under the Purchase
Agreement other than any approvals or filings that have been
previously obtained or made or that are in full force and effect.
9. The execution and delivery of the Purchase Agreement by the Adviser
does not, and the consummation by the Adviser of the transactions
contemplated thereby will not: (i) violate the Articles of
Incorporation of the Adviser; (ii) conflict with, or result in any
breach of any terms, conditions or provisions of, or constitute a
default under or result in or permit the creation or imposition of any
lien, charge or encumbrance upon any of the properties of the Adviser
pursuant to any contract, indenture, mortgage, loan or credit
agreement, lease or other agreement to which the Adviser is a party of
which we have knowledge; or (iii) contravene or violate any provision
of law, statute, rules or regulations, or, to our knowledge, any
applicable order, writ, injunction, judgment or decree binding on the
Adviser.
10. Nothing has come to our attention that would lead us to believe that
the Adviser information contained in the Registration Statement or any
amendment thereto (except for financial statements and schedules and
other financial data included therein or omitted therefrom, as to
which we do not make any statement), at the time the Registration
Statement or any such amendment became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Adviser information contained in
the Prospectus or any amendment or supplement thereto (except for
financial statements and schedules and other financial data included
therein or omitted therefrom, as to which we do not make any
statement), at the time the Prospectus was issued or at the Closing
Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
11. BIA is validly existing as a limited liability company in good
standing under the laws of the State of Colorado. No franchise taxes
that are currently due with respect to the Adviser have not been paid.
12. BIA has limited liability company power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under the
Purchase Agreement.
13. BIA is registered with the Commission as an investment adviser under
the Advisers Act and is not prohibited by the Advisers Act or the 1940
Act from acting under the Advisory Agreement for the Fund as
contemplated by the Prospectus.
14. The Purchase Agreement, the BIA Advisory Agreement and the
Administration Agreement have been duly authorized, executed and
delivered by BIA, and each of the BIA Advisory Agreement and the
Administration Agreement constitutes a valid and binding obligation of
BIA, enforceable in accordance with their respective terms.
15. To our knowledge, there is no legal or governmental proceeding pending
or threatened against BIA that is: (1) required by the Securities Act
or the 1940 Act and their rules and regulations to be described in the
Registration Statement in the Prospectus that is not already
described, or (2) which would, under Section 9 of the 1940 Act, make
BIA ineligible to act as the Fund's investment adviser.
16. The execution and delivery of each of the Purchase Agreement and the
BIA Advisory Agreement by BIA, and the consummation by BIA of the
transactions contemplated thereby, do not and will not (A) require any
consent, approval, authorization or other order of, or qualification
with, any Colorado state or U.S. federal court or governmental body or
agency (except such as may be required under the securities or Blue
Sky laws of the various states of the National Association of
Securities Dealers, Inc. or as have been obtain under the federal
securities laws), (B) conflict with or constitute a breach of any of
the terms or provisions of, or a default under, or result in the
imposition of a lien, charge or encumbrance upon the assets of BIA
pursuant to any indenture, loan agreement, mortgage, lease or other
agreement or instrument listed in the certificate attached as Annex B
hereto, (C) violate or conflict with the Certificate of Formation or
Operating Agreement of BIA, or (D) violate or conflict with the
Colorado Corporation Code statute or any applicable U.S. federal and
Colorado state law, rule or regulation, or (E) violate or conflict
with any judgment, order or decree specifically naming BIA or
specifically applicable to BIA's property of which we are aware.
