NEWPORT GREATER CHINA FUND,
a portfolio of Colonial Trust II
Load-Waived Class A Shares
Issuable Upon Exercise of
Subscription Rights for such Shares
DEALER MANAGER AGREEMENT
New York, New York
June 23, 1997
PAINEWEBBER INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
X.X. XXXXXXX & SONS, INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Each of Colonial Trust II, a Massachusetts business trust (the
"Trust"), on behalf of its portfolio Newport Greater China Fund (the "Fund"),
Colonial Investment Services, Inc., a Massachusetts corporation ("Colonial"),
Colonial Management Associates, Inc., a Massachusetts corporation (the
"Administrator"), and Newport Fund Management, Inc., a Virginia corporation (the
"Portfolio Manager"), confirms its agreement with each of the Trust, on behalf
of the Fund and Colonial, pursuant to the authority granted by the Trust to
Colonial in the Distribution Agreement (as defined herein), appoints PaineWebber
Incorporated (the "Representative"), on its own behalf and on behalf of Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and X.X. Xxxxxxx & Sons, Inc., to act
as dealer managers (the Representative and such other dealer managers
collectively being referred to herein as the "Dealer Managers") in connection
with the offer to beneficial shareholders ("Holders") as of the close of
business on June 16, 1997 (the "Record Date") of (i) shares of common stock or
common shares of beneficial interest, as the case may be, (the "Colonial ETF
Shares") of the following exchange-traded, closed-end investment companies:
Colonial Investment Grade Municipal Trust; Colonial Municipal Income Fund;
Colonial High Income Municipal Trust; Colonial Intermediate High Income Fund;
Colonial Intermarket Income Trust I; Liberty All-Star Equity Fund; and Liberty
All-Star Growth Fund, Inc. (the "Colonial ETF Funds") and (ii) common shares of
beneficial interest, of any designated class (the "Colonial MF Shares"), of
Colonial Newport Tiger Fund; Colonial Newport Tiger Cub Fund ; and Colonial
Newport Japan Fund(the "Colonial Mutual Funds"), of non-transferable
subscription rights (the "Subscription Rights") to purchase shares of beneficial
interest of the Fund, no par value, designated Class A Shares (the "Shares") at
the Initial Subscription Price (as hereinafter defined) without payment of an
up-front sales charge (the "Load-Waived Class A Shares").
The Subscription Rights entitle Holders of Colonial ETF Shares
and Colonial MF Shares to subscribe, subject to availability, for Load-Waived
Class A Shares at the rate of one Load-Waived Class A Share for each Colonial
ETF Share or Colonial MF Share held on the Record Date (the "Primary
Subscription Privilege"), except that Holders owning fewer than 150 Colonial ETF
Shares or Colonial MF Shares are entitled to subscribe for 150 Load-Waived Class
A Shares. Holders of Colonial ETF Shares and Colonial MF Shares who fully
exercise all their Subscription Rights may be entitled to subscribe for
additional Load-Waived Class A Shares of the Fund, subject to availability (the
"Over-Subscription Privilege"). The opportunity for Holders of Colonial ETF
Shares and Colonial MF Shares to subscribe for Load-Waived Class A Shares
pursuant to the Subscription Rights expires at 5:00 p.m., New York City time, on
July 25, 1997 (the "Initial Expiration Date"). In the event that the Fund has
not achieved, as of the Initial Expiration Date, the Maximum Offer Amount (as
defined in the Fund's Prospectus Supplement (as hereinafter defined)), then the
Fund may offer Load-Waived Class A Shares to the general public for a period not
to exceed thirty calendar days from the Initial Settlement Date (as defined
herein), unless earlier terminated by the Fund (the last day of such period is
referred to as the "Secondary Expiration Date") as provided for in the Fund's
Prospectus Supplement. The offer of Subscription Rights to the Holders of
Colonial ETF Shares and Colonial MF Shares will commence on June 23, 1997 (the
"Commencement Date").
The Fund may also, from the Commencement Date through the
Initial Expiration Date, offer Load-Waived Class A Shares to clients of the
Dealer Managers (the "Dealer Manager Clients") and to employees of Colonial and
its affiliates ("Employees") who may not be holders of Colonial ETF Shares and
Colonial MF Shares, subject to the Maximum Offer Amount (as defined in the
Prospectus Supplement (as hereinafter defined)). Each of (i) subscriptions duly
received pursuant to the Primary Subscription Privilege, (ii) requests duly
received for additional shares pursuant to the Over-Subscription Privilege,
(iii) requests duly received from Dealer Manager Clients and Employees, and (iv)
requests from the general public for Secondary Load-Waived Class A Shares (as
defined below), will be accepted on a first come, first served basis and are
subject to the Maximum Offer Amount. Load-Waived Class A Shares will be issued
to Dealer Manager Clients and Employees only if subscriptions duly received
pursuant to the Primary Subscription Privilege and pursuant to the
Over-Subscription Privilege on or before the Expiration Date do not equal or
exceed the Maximum Offer Amount. Load-Waived Class A Shares issued to Holders of
Colonial ETF Shares and Colonial MF Shares pursuant to exercise of Subscription
Rights in the Primary Subscription Privilege, as well as pursuant to requests
for additional Load-Waived Class A Shares pursuant to the Over-Subscription
Privilege and requests received from or on behalf of Dealer Manager Clients and
Employees, duly received on or prior to the Initial Expiration Date, will be at
the initial subscription price (the "Initial Subscription Price") of $20.00 per
Load-Waived Class A Share. The aggregate number of Load-Waived Class A Shares
issued to Holders of Colonial ETF Shares and Colonial MF Shares in connection
with the exercise of Subscription Rights or pursuant to the Over-Subscription
Privilege, and those issued to Dealer Manager Clients and Employees, on or prior
to the Initial Expiration Date (the "Initial Load-Waived Class A Shares")
multiplied by the Initial Subscription Price shall be referred to as the
"Initial Subscription Amount." The settlement date for the issuance of the
Initial Load-Waived Class A Shares shall be July 30, 1997 (the "Initial
Settlement Date"). Purchase requests, if any, for Load-Waived Class A Shares by
members of the general public received after the Initial Settlement Date will
not be accepted until after the Initial Trade Date and, if accepted, will be
sold at the net asset value per Share next determined after receipt and
acceptance of the order (the "Secondary Subscription Price"). The aggregate
number of Load-Waived Class A Shares issued to members of the general public
after the Initial Expiration Date (the "Secondary Load-Waived Class A Shares")
multiplied by the applicable Secondary Subscription Price shall be referred to
as the "Secondary Subscription Amount." The Initial Subscription Amount and the
Secondary Subscription Amount are collectively referred to as the "Subscription
Amount." The Initial Subscription Price and the Secondary Subscription Price are
collectively referred to as the "Subscription Price." The aggregate number of
Initial Load-Waived Class A Shares that may be issued on the Initial Settlement
Date, and the aggregate number of Secondary Load-Waived Class A Shares that may
be issued until the Secondary Expiration Date, will be subject to the Maximum
Offer Amount (as defined in the Prospectus Supplement (as hereinafter defined)).
The Load-Waived Class A Shares will be subject to a Contingent
Deferred Sales Charge ("CDSC") of 2% of the lower of the purchase price or the
redemption proceeds if such Load-Waived Class A Shares are redeemed within
approximately twenty-four months from their purchase date. The CDSC may be
waived in certain circumstances as described or referred to in the Prospectus
Supplement. The offer of Load-Waived Class A Shares to Holders of Colonial ETF
Shares and Colonial MF Shares pursuant to Subscription Rights and pursuant to
the Over-Subscription Privilege, to Dealer Manager Clients and Employees and to
members of the general public in connection with the Secondary Expiration Date,
is referred to herein as the "Offer." The minimum purchase in the Offer is
$3,000 of Load-Waived Class A Shares (150 Load-Waived Class A Shares).
The Trust has filed with the Securities and Exchange
Commission (the "Commission") a post-effective amendment to its registration
statement on Form N-1A (File Nos. 2-66976 and 811-3009) including a prospectus
and statement of additional information relating to the Fund for the
registration of the Shares under the Securities Act of 1933, as amended (the
"Securities Act"), and the Trust under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and the rules and regulations of the
Commission under the Securities Act and the Investment Company Act (the "Rules
and Regulations"), and has filed such amendments to such registration statement
on Form N-1A, if any, and such amended prospectuses and statements of additional
information as may have been required to the date hereof. The term "Registration
Statement" means the post-effective amendment to the registration statement
declared effective by the Commission on May 16, 1997, including financial
statements and all exhibits and all documents, if any, incorporated therein by
reference and including any post-effective amendments that become effective
prior to the Secondary Expiration Date to the extent information set forth
therein relates to the Fund. The term "Prospectus" means the prospectus of the
Fund and statement of additional information in the forms filed with the
Commission pursuant to Rule 497(c), (e) or (j) of the Rules and Regulations, as
the case may be, as from time to time amended or supplemented pursuant to the
Securities Act and including, without limitation, the prospectus supplement
dated June 20, 1997 used by the Fund in connection with the June 23, 1997 Offer
(the "Prospectus Supplement"). The Prospectus, letters to Holders, subscription
certificates, brochures, wrappers and other materials preceded or accompanied by
the Prospectus, forms used to exercise Subscription Rights, any letters and
other informational material, in each case approved by the Fund or Colonial, to
securities dealers, commercial banks and other nominees and any newspaper
announcements, press releases and other offering materials and information that
the Fund or Colonial may use specifically in connection with the solicitation
contemplated by this Agreement, or approve, prepare or authorize for use in
connection with the Offer, are collectively referred to hereinafter as the
"Offering Materials."
1. Representations and Warranties.
(a) Each of the Trust, on behalf of the Fund, and Colonial
represents and warrants to, and agrees with, the Dealer Managers as of the
Commencement Date and the Initial Settlement Date (each, a "Representation
Date") that:
(i) The Trust meets the requirements for use of Form N-1A
under the Securities Act and the Investment Company Act and the Rules
and Regulations. The Registration Statement contains or will contain
all statements required to be stated therein in accordance with, and
complies or will comply in all material respects with, the requirements
of the Securities Act, the Investment Company Act and the Rules and
Regulations and does not or will not contain any 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. The
Prospectus and the other Offering Materials, together with the
Prospectus, do not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading.
(ii) The Trust has been duly organized and is validly existing
as a Massachusetts business trust in good standing under the laws of
the Commonwealth of Massachusetts, the Fund has been duly designated as
a series of the Trust, the Trust and the Fund have full power and
authority to conduct their respective business as described in the
Registration Statement and the Prospectus, currently maintain all
material governmental licenses, permits, consents, orders, approvals,
and other authorizations necessary to carry on their business as
contemplated in the Prospectus, and are duly qualified to do business
in each jurisdiction wherein they own or lease real property or in
which the conduct of their business requires such qualification, except
where the failure to be so qualified would not result in a material
adverse effect upon the business, properties, financial position or
results of operations of the Fund. Neither the Trust nor the Fund have
any subsidiaries.
(iii) The Trust is registered with the Commission under the
Investment Company Act as an open-end management investment company, no
order of suspension or revocation of such registration has been issued
or proceedings therefor initiated or threatened by the Commission; all
required action has been or will be taken under the Securities Act, the
Investment Company Act and state securities laws to make the public
offering and consummate the Offer and the issuance and sale of the
Shares by the Fund upon exercise of the Subscription Rights as
contemplated by the Prospectus; each of the waiver of front-end sales
charges in connection with the Offer, which sales charges generally are
applicable as described in the Prospectus, and the imposition of a
contingent deferred sales charge complies in all material respects with
all applicable provisions of the Investment Company Act, the Securities
Exchange Act of 1934, as amended (including the Rules and Regulations
thereunder, being referred to as the "Exchange Act"), and the Rules and
Regulations; the provisions of the Trust's organizational documents
comply as to form in all material respects with the requirements of the
Investment Company Act.
(iv) Price Waterhouse LLP, the accountants of the Fund set
forth in the Registration Statement and the Prospectus, are independent
public accountants as required by the Investment Company Act and the
Rules and Regulations.
(v) The Trust is authorized to issue an unlimited number of
shares of beneficial interest in one or more series, which may be
divided into classes of shares; the Load-Waived Class A Shares of the
Fund have been duly designated as Class A Shares in compliance with all
applicable provisions of the Investment Company Act and the Rules and
Regulations thereunder; the Fund's outstanding shares of beneficial
interest have been duly authorized and are validly issued, fully paid
and non-assessable by the Trust and conform in all material respects to
the description thereof in the Prospectus; the Subscription Rights have
been duly authorized by all requisite action on the part of the Trust;
the Load-Waived Class A Shares have been duly authorized by all
requisite action on the part of the Trust for issuance and sale
pursuant to the terms of the Offer and, when issued and delivered by
the Trust pursuant to the terms of the Offer against payment of the
consideration set forth in the Prospectus, will be validly issued,
fully paid and non-assessable by the Trust; the Shares and the
Subscription Rights conform in all material respects to all statements
relating thereto contained in the Registration Statement and the
Prospectus; and the issuance of each of the Subscription Rights and the
Shares is not subject to any preemptive rights.
(vi) Except as set forth in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, (A) the Fund has not incurred any
liabilities or obligations, direct or contingent, or entered into any
transactions, other than in the ordinary course of business, that are
material to the Fund, (B) there has not been any material decrease in
the shares of beneficial interest or material increase in long-term
debt of the Fund, or any material adverse change, or any development
involving a prospective material adverse change, in the condition
(financial or other), business, prospects, net worth or results of
operations of the Fund (other than the share split or recapitalization
contemplated by Section 4(a)(xiii) hereof) and (C) there has been no
dividend or distribution paid or declared in respect of the Fund's
shares of beneficial interest other than in the ordinary course of
business (other than the distribution contemplated by Section
4(a)(xiii) hereof).
(vii) Except as set forth in the Registration Statement and
Prospectus, there is no pending or, to the knowledge of the Trust or
Colonial, threatened action, suit or proceeding affecting the Trust or
the Fund or to which the Trust or the Fund is a party before or by any
court or governmental agency, authority or body or any arbitrator,
whether foreign or domestic, which might reasonably be expected to
result in any material adverse change in the condition (financial or
other), business, prospects, net worth or results of operations of the
Trust or the Fund, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof, of a character
required to be disclosed in the Registration Statement or the
Prospectus.
(viii) There are no franchises, contracts or other documents
of the Trust or the Fund required to be described in the Registration
Statement or the Prospectus, or to be filed (other than a
post-effective amendment to file this Agreement and other agreements
related to the Offer) or incorporated by reference as exhibits which
are not described or filed or incorporated by reference therein as
permitted by the Securities Act, the Investment Company Act or the
Rules and Regulations.
(ix) Each of this agreement (the "Agreement"), the Management
Agreement (the "Management Agreement") dated as of May 12, 1997 between
the Trust, on behalf of the Fund, and the Portfolio Manager, the
Distributor's Contract (the "Distribution Agreement") dated as of
December 30, 1996 between the Trust and Colonial, the Administration
Agreement (the "Administration Agreement") dated as of May 12, 1997
between the Trust, on behalf of the Fund, and the Administrator, the
Custodian Agreement (the "Custodian Agreement") dated as of May 18,
1993 between the Trust and Boston Safe Deposit & Trust Company, the
Transfer and Shareholder Services Agreement (the "Transfer Agency
Agreement") dated as of July 1, 1991, between the Trust and Colonial
Investors Service Center, Inc. (the "Transfer Agent") and the Pricing
and Bookkeeping Agreement dated as of November 1, 1991 between the
Trust, on behalf of the Fund, and the Administrator (the "Pricing
Agreement") (collectively, all the foregoing are referred to as the
"Fund Agreements") has been duly authorized, executed and delivered by
the Trust, on behalf of the Fund; each of the Fund Agreements complies
in all material respects with the applicable provisions of the Exchange
Act, the Investment Company Act and the Investment Advisers Act of
1940, as amended (the "Advisers Act"); and, assuming due authorization,
execution and delivery by the other parties thereto, each of the Fund
Agreements constitutes a legal, valid, binding and enforceable
obligation of the Trust, on behalf of the Fund, subject to the
qualification that the enforceability of the Trust's obligations
thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights, and to general principles of equity
(regardless of whether enforceability is considered in a proceeding in
equity or at law) and except to the extent that the enforceability of
the indemnification provisions contained herein may be limited under
U.S. federal and state securities laws.
(x) Neither the offering of the Subscription Rights, nor the
issuance and sale of the Shares, nor the performance and consummation
by the Trust of any other of the transactions contemplated in the Fund
Agreements, nor the consummation of the transactions contemplated in
the Prospectus Supplement, will conflict with, result in a breach or
violation of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any properties or
assets of the Fund under the charter or by-laws of the Trust, or the
terms and provisions of any agreement, indenture, mortgage, lease or
other instrument to which the Trust, on behalf of the Fund, is a party
or by which it may be bound or to which any of the property or assets
of the Fund is subject, nor will such action result in any violation of
any order, law, rule or regulation of any court or governmental agency
or body, whether foreign or domestic, having jurisdiction over the
Trust or any of its properties.
(xi) No consent, approval, authorization, notification or
order of, or filing with, any court or governmental agency or body,
whether foreign or domestic, is required for the consummation by the
Trust of the transactions contemplated by the Fund Agreements or the
Registration Statement, except such as have been obtained, or such as
may be required (and shall be obtained as provided in this Agreement)
under the Securities Act, the Investment Company Act, the Exchange Act,
the rules of the New York Stock Exchange and state securities laws,
except where the failure to obtain any of the foregoing would not,
either individually or in the aggregate, have a material adverse effect
on the Fund.
(xii) The Trust owns or possesses all governmental licenses,
permits, consents, orders, approvals or other authorizations, whether
foreign or domestic, to enable the Fund to invest in securities as
contemplated in the Prospectus, except where the failure to own or
possess any of the foregoing would not, either individually or in the
aggregate, have a material adverse effect on the Fund. Neither the
execution or delivery by the Trust, on behalf of the Fund, nor the
performance by the Trust, on behalf of the Fund, of any of its
obligations under the Fund Agreements materially contravene or
constitute a material default under any provision contained in any law,
rule or regulation of any governmental or regulatory authority or any
order or regulation of any court by which the Trust or the Fund or any
of their assets are bound or affected.
(xiii) The Fund intends to direct the investment of the
proceeds of the offering described in the Registration Statement and
the Prospectus 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 intends to continue to qualify as a
regulated investment company under Subchapter M of the Code.
(b) Colonial represents and warrants to, and agrees
with, the Dealer Managers as of each Representation Date that:
(i) Colonial has been duly organized and is validly existing
as a corporation in good standing under the laws of the Commonwealth of
Massachusetts, has full power and authority (corporate and other) to
own its properties and conduct its business as described in the
Registration Statement and the Prospectus, and is duly qualified to do
business as a foreign corporation in each jurisdiction wherein it owns
or leases real property or in which the conduct of its business
requires such qualification, except where the failure to be so
qualified does not involve a material adverse risk to its business,
properties, financial position or results of operations.
(ii) Colonial is duly registered as a broker-dealer under the
Exchange Act and is not prohibited by the Exchange Act or the
Investment Company Act, or the rules and regulations under such Acts,
from acting as principal underwriter of the Shares as contemplated in
the Prospectus and the Distribution Agreement.
(iii) Each of this Agreement, the Subscription Agency
Agreement (the "Subscription Agency Agreement") dated as of June 20,
1997 between Colonial and Colonial Investors Service Center, Inc. (the
"Subscription Agent"), the Distribution Agreement and any other Fund
Agreement to which Colonial is a party has been duly authorized,
executed and delivered by Colonial and complies in all material
respects with the applicable provisions of the Exchange Act, the
Investment Company Act and the Rules and Regulations (including the
Rules and Regulations under the Exchange Act), and is, assuming due
authorization, execution and delivery by the other parties thereto, a
legal, valid, binding and enforceable obligation of Colonial, subject
as to enforcement to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights, and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity or at
law) and except to the extent that the enforceability of the
indemnification provisions contained herein may be limited under U.S.
federal and state securities laws.
(iv) Neither the execution, delivery or performance by
Colonial of its obligations under this Agreement, the Distribution
Agreement or any other Fund Agreement to which Colonial is a party nor
the consummation of the transactions contemplated therein or in the
Prospectus Supplement nor the fulfillment of the terms thereof will
conflict in any material way with, result in a material breach or
violation of, or constitute a material default under, or result in the
creation or imposition of any material lien, charge or encumbrance upon
any properties or assets of Colonial under the charter or by-laws of
Colonial, or the terms and provisions of any agreement, indenture,
mortgage, lease or other instrument to which Colonial is a party or by
which it may be bound or to which any of the property or assets of
Colonial is subject, nor will such action result in any material
violation of any order, law, rule or regulation of any court or
governmental agency or body, whether foreign or domestic, having
jurisdiction over Colonial or any of its properties.
(v) Except as set forth in the Registration Statement and
Prospectus, there is no pending or, to the best knowledge of Colonial,
threatened action, suit or proceeding affecting Colonial or to which
Colonial is a party before or by any court or governmental agency,
authority or body or any arbitrator, whether foreign or domestic, which
may reasonably be expected to result in any material adverse change in
the condition (financial or other), business prospects, net worth or
results of operations of Colonial, or which may reasonably be expected
to materially and adversely affect the properties or assets thereof, of
a character required to be disclosed in the Registration Statement or
Prospectus.
(vi) Colonial owns or possesses any governmental licenses,
permits, consents, orders, approvals or other authorizations to enable
Colonial to distribute Shares as contemplated in the Prospectus.
(vii) No consent, approval, authorization, notification or
order of, or any filing with, any court or governmental agency or body
or securities exchange, whether foreign or domestic, is required for
the consummation by Colonial of the transactions contemplated by this
Agreement, the Distribution Agreement or any other Fund Agreement to
which Colonial is a party, except such as have been made or obtained
under the Securities Act, the Exchange Act, the Investment Company Act,
the Rules and Regulations and the rules of the New York Stock Exchange
and state securities laws.
(viii) The New York Stock Exchange has been duly notified of
the proposed offering of the Subscription Rights and the Record Date
and no other notice or action by the Trust is required to be delivered
to, or taken with respect to, the New York Stock Exchange in connection
with the issuance of the Subscription Rights or the issuance and sale
of the Shares pursuant thereto.
(c) The Administrator represents and warrants to,
and agrees with, the Dealer Managers as of each Representation Date that:
(i) The Administrator has been duly organized and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Massachusetts, has full power and authority (corporate
and other) to own its properties and conduct its business as described
in the Registration Statement and the Prospectus, and is duly qualified
to do business as a foreign corporation in each jurisdiction wherein it
owns or leases real property or in which the conduct of its business
requires such qualification, except where the failure to be so
qualified does not involve a material adverse risk to its business,
properties, financial position or results of operations.
(ii) Each of this Agreement, the Administration Agreement and
any other Fund Agreement to which the Administrator is a party has been
duly authorized, executed and delivered by the Administrator and
complies in all material respects with the applicable provisions of the
Investment Company Act and the rules and regulations thereunder, and
is, assuming due authorization, execution and delivery by the other
parties thereto, a legal, valid, binding and enforceable obligation of
the Administrator, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general applicability
relating to or affecting creditors' rights, and to general principles
of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law) and except to the extent that the
enforceability of the indemnification provisions contained herein may
be limited under U.S. federal and state securities laws.
(iii) Neither the execution, delivery or performance by the
Administrator of its obligations under this Agreement, the
Administration Agreement or any other Fund Agreement to which the
Administrator is a party nor the consummation of the transactions
contemplated therein or in the Prospectus Supplement nor the
fulfillment of the terms thereof will conflict in any material way
with, result in a material breach or violation of, or constitute a
material default under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any properties or assets of
the Administrator under the charter or by-laws of the Administrator, or
the terms and provisions of any agreement, indenture, mortgage, lease
or other instrument to which the Administrator is a party or by which
it may be bound or to which any of the property or assets of the
Administrator is subject, nor will such action result in any material
violation of any order, law, rule or regulation of any court or
governmental agency or body, whether foreign or domestic, having
jurisdiction over the Administrator or any of its properties.
(iv) Except as set forth in the Registration Statement and
Prospectus, there is no pending or, to the best knowledge of the
Administrator, threatened action, suit or proceeding affecting the
Administrator or to which the Administrator is a party before or by any
court or governmental agency, authority or body or any arbitrator,
whether foreign or domestic, which may reasonably be expected to result
in any material adverse change in the condition (financial or other),
business, prospects, net worth or results of operations of the
Administrator, or which may reasonably be expected to materially and
adversely affect the properties or assets thereof, of a character
required to be disclosed in the Registration Statement or Prospectus.
(v) The Administrator owns or possesses any governmental
licenses, permits, consents, orders, approvals or other authorizations
to enable the Administrator to perform the services for the Fund as
contemplated in the Prospectus.
(vi) No consent, approval, authorization, notification or
order of, or any filing with, any court or governmental agency or body,
whether foreign or domestic, for the consummation by the Administrator
of the transactions contemplated by this Agreement, the Administration
Agreement or any other Fund Agreement to which the Administrator is a
party, except such as have been made or obtained under the Securities
Act, the Exchange Act, the Investment Company Act, the Rules and
Regulations and the rules of the New York Stock Exchange or the
American Stock Exchange and state securities laws.
(d) The Portfolio Manager represents and warrants to, and
agrees with, the Dealer Managers as of each Representation Date that:
(i) The Portfolio Manager has been duly organized and is
validly existing as a corporation in good standing under the laws of
the Commonwealth of Virginia, has full power and authority (corporate
and other) to own its properties and conduct its business as described
in the Registration Statement and the Prospectus, and is duly qualified
to do business as a foreign corporation in each jurisdiction wherein it
owns or leases real property or in which the conduct of its business
requires such qualification, except where the failure to be so
qualified does not involve a material adverse risk to its business,
properties, financial position or results of operations.
(ii) The Portfolio Manager is duly registered as an investment
adviser under the Advisers Act and is not prohibited by the Advisers
Act or the Investment Company Act, or the rules and regulations under
such Acts, from acting as an investment adviser for the Fund as
contemplated in the Prospectus and the Management Agreement.
(iii) Each of this Agreement, the Management Agreement and any
other Fund Agreement to which the Portfolio Manager is a party has been
duly authorized, executed and delivered by the Portfolio Manager and
complies in all material respects with the applicable provisions of the
Advisers Act, the Investment Company Act and the rules and regulations
under such Acts, and is, assuming due authorization, execution and
delivery by the other parties thereto, a legal, valid, binding and
enforceable obligation of the Portfolio Manager, subject as to
enforcement to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights, and to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law) and
except to the extent that the enforceability of the indemnification
provisions contained herein may be limited under U.S.
federal and state securities laws.
(iv) Neither the execution, delivery or performance by the
Portfolio Manager of its obligations under this Agreement, the
Management Agreement or any other Fund Agreement to which the Portfolio
Manager is a party nor the consummation of the transactions
contemplated therein or in the Prospectus Supplement nor the
fulfillment of the terms thereof will conflict in any material way
with, result in a material breach or violation of, or constitute a
material default under, or result in the creation or imposition of any
material lien, charge or encumbrance upon any properties or assets of
the Portfolio Manager under the charter or by-laws of the Portfolio
Manager, or the terms and provisions of any agreement, indenture,
mortgage, lease or other instrument to which the Portfolio Manager is a
party or by which it may be bound or to which any of the property or
assets of the Portfolio Manager is subject, nor will such action result
in any material violation of any order, law, rule or regulation of any
court or governmental agency or body, whether foreign or domestic,
having jurisdiction over the Portfolio Manager or any of its
properties.
(v) Except as set forth in the Registration Statement and
Prospectus, there is no pending or, to the best knowledge of the
Portfolio Manager, threatened action, suit or proceeding affecting the
Portfolio Manager or to which the Portfolio Manager is a party before
or by any court or governmental agency, authority or body or any
arbitrator, whether foreign or domestic, which may reasonably be
expected to result in any material adverse change in the condition
(financial or other), business prospects, net worth or results of
operations of the Portfolio Manager, or which may reasonably be
expected to materially and adversely affect the properties or assets
thereof, of a character required to be disclosed in the Registration
Statement or Prospectus.
(vi) The Portfolio Manager owns or possesses any governmental
licenses, permits, consents, orders, approvals or other authorizations
necessary to enable the Portfolio Manager to continue to direct
investments in securities as contemplated in the Prospectus.
(vii) No consent, approval, authorization, notification or
order of, or any filing with, any court or governmental agency or body,
whether foreign or domestic, is necessary for the consummation by the
Portfolio Manager of the transactions contemplated by this Agreement,
the Management Agreement or any other Fund Agreement to which the
Portfolio Manager is a party, except such as have been made or obtained
under the Securities Act, the Exchange Act, the Investment Company Act,
the Rules and Regulations, the rules of the New York Stock Exchange and
state securities laws.
(e) Any certificate required by this Agreement
that is signed by any officer of the Trust, Colonial, the Administrator or
the Portfolio Manager and delivered to the Dealer Managers or counsel for the
Dealer Managers shall be deemed a representation and warranty by the Trust,
Colonial, the Administrator or the Portfolio Manager, as the case may be, to
the Dealer Managers, as to the matters covered thereby.
2. Agreement to Act as Dealer Managers.
(a) On the basis of the representations and
Warranties contained herein, and subject to the terms and conditions of the
Offer:
(i) Colonial hereby appoints the Dealer Managers and other
soliciting dealers entering into a Colonial Selling Agreement, as
amended to the date hereof in connection with the Offer, and soliciting
exercises by Holders of Subscription Rights (the "Soliciting Dealers"),
to solicit, in accordance with the Securities Act, the Exchange Act and
the Investment Company Act, and their customary practice, the exercise
of the Subscription Rights, subject to the terms and conditions of this
Agreement, the procedures described in the Registration Statement, the
Prospectus and, where applicable, the terms and conditions of the
Colonial Selling Agreement, as so amended; and
(ii) Colonial agrees to request the respective transfer agents
for the Colonial ETF Funds and the Colonial Mutual Funds to produce
lists showing the names and addresses of Holders of Colonial ETF Shares
and Colonial MF Shares as of the Record Date. Although Colonial shall
have no obligation to deliver such lists to the Dealer Managers, to the
extent any copies of or extracts from such lists are delivered to the
Dealer Managers, the Dealer Managers agree to use such information only
in connection with the Offer, and not to furnish the information to any
other person except for securities brokers and dealers that have been
requested by the Dealer Managers to solicit exercises of Subscription
Rights.
(b) The Dealer Managers agree to provide to the Trust and to
Colonial, in addition to the services described in paragraph (a) of this Section
2, financial advisory and marketing services in connection with the Offer.
(c) The Trust, Colonial and the Dealer Managers agree that the
Dealer Managers are independent contractors with respect to the solicitation of
the exercise of Subscription Rights and other purchases in connection with the
Offer, and the performance of financial advisory and marketing services
contemplated by this Agreement.
(d) In rendering the services contemplated by this Agreement,
the Dealer Managers will not be subject to any liability to the Trust, the Fund,
Colonial, the Administrator or the Portfolio Manager or any of their affiliates,
for any act or omission on the part of any soliciting broker or dealer (except
with respect to the Dealer Managers acting in such capacity) or any other
person, and the Dealer Managers will not be liable for acts or omissions in
performing their obligations under this Agreement, except, on a several basis
and not a joint basis, for any losses, claims, damages, liabilities and expenses
that are finally judicially determined to have resulted primarily from the bad
faith, willful misconduct or gross negligence of a respective Dealer Manager or
by reason of the reckless disregard of the obligations and duties of such
respective Dealer Manager under this Agreement.
(e) Each of the Dealer Managers severally agrees to (i)
solicit exercises of Subscription Rights relating to the Colonial ETF Shares and
to the Colonial MF Shares, (ii) solicit subscriptions for Load-Waived Class A
Shares pursuant to the Over-Subscription Privilege, (iii) solicit purchase
requests for Load-Waived Class A Shares by Dealer Manager Clients and Employees
and (iv) solicit purchase requests for Load-Waived Class A Shares, by members of
the general public in connection with any Supplemental Settlement Date, in each
case in a manner consistent with the terms of the Offer set forth in the
Prospectus. Each of the Dealer Managers severally acknowledges that the
respective boards of directors or trustees, as the case may be, of each Colonial
ETF Fund and each Colonial Mutual Fund has authorized and directed that the
Prospectus (including the Prospectus Supplement) be delivered to each beneficial
owner of shares of the Colonial ETF Funds and the Colonial Mutual Funds, and
each of the Dealer Managers severally agrees to use its best efforts to deliver
or cause to be delivered the Prospectus (including the Prospectus Supplement) to
each beneficial owner for which such Dealer Manager holds such shares of record
or as nominee, consistent with the applicable provisions of the Exchange Act and
the rules of the New York Stock Exchange.
3. Dealer Managers and Solicitation Fees. In payment for the
financial advisory and marketing services rendered and to be rendered hereunder
by the Dealer Managers, Colonial agrees to pay the Dealer Managers an aggregate
fee (the "Dealer Manager Fee") equal to 1.00% of the aggregate Subscription
Amount for all Load-Waived Class A Shares sold during the Offer. Colonial also
agrees to pay Soliciting Dealers and the Dealer Managers, in payment for their
soliciting efforts hereunder, fees (the "Solicitation Fees") (such Solicitation
Fees paid to the Dealer Managers are in addition to the Dealer Manager Fee) of
up to 2.00% of the applicable Subscription Price per Load-Waived Class A Share
issued in connection with the Offer, other than Shares which would not be
subject to a contingent deferred sales charge as described in the Prospectus.
Colonial agrees to pay the Solicitation Fees to the broker-dealer, if any,
appropriately designated in connection with any exercise, request or order for
Load-Waived Class A Shares in the Offer. Payment to the Dealer Managers of that
portion of the Dealer Manager Fee relating to the Initial Load-Waived Class A
Shares will be determined with respect to the Initial Subscription Amount and
shall be made on the Initial Settlement Date to the Dealer Managers by Colonial
in the form of a wire transfer of same-day funds to an account or accounts
identified by the Representative. Payment to the Dealer Managers of that portion
of the Dealer Manager Fee relating to any Secondary Load-Waived Class A Shares
will be determined with respect to the Secondary Subscription Amount on the
Secondary Expiration Date and will be made on the third business day after the
Secondary Expiration Date to the Dealer Managers by Colonial in the form of a
wire transfer of same-day funds to an account or accounts identified by the
Representative. Payment of Solicitation Fees to each Dealer Manager and
Soliciting Dealer will be made directly to such Dealer Manager and Soliciting
Dealer by check, wire or other means as may be agreed to by Colonial and such
Dealer Manager and Soliciting Dealer to an address identified by such Soliciting
Dealer by the third business day following the Initial Expiration Date or the
Secondary Expiration Date, as the case may be, unless otherwise agreed to by
Colonial and such Soliciting Dealer.
4. Other Agreements.
(a) The Trust covenants with the Dealer Managers as
follows:
(i) The Trust will use its best efforts to maintain the
effectiveness of the Registration Statement under the Securities Act
from the Commencement Date through the Secondary Expiration Date, and
will advise the Dealer Managers promptly as to the time at which any
amendments to the Registration Statement become effective.
(ii) The Trust (or Colonial on behalf of the Trust) will
notify the Dealer Managers immediately, and confirm the notice in
writing, (A) of the filing of any amendments to the Registration
Statement or any amendment or supplement to the Prospectus from the
Commencement Date through the Secondary Expiration Date and the
effectiveness of any amendment to the Registration Statement, (B) of
the receipt of any comments from the Commission with respect to the
Registration Statement or the Prospectus, (C) 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, (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose and (E) of the
suspension of the qualification of the Shares or the Subscription
Rights for offering or sale in any jurisdiction. The Trust will make
every reasonable effort to prevent the issuance of any stop order
described in subsection (D) hereunder and, if any such stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(iii) The Trust will give the Dealer Managers notice of its
intention to file any amendment to the Registration Statement or any
amendment or supplement to the Prospectus from the Commencement Date
through the Secondary Expiration Date, whether pursuant to the
Investment Company Act, the Securities Act, or otherwise, and will
furnish the Dealer Managers with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file any such amendment or
supplement to which the Dealer Managers or counsel for the Dealer
Managers shall reasonably object.
(iv) The Trust (or Colonial on behalf of the Trust) will,
without charge, deliver to the Dealer Managers, as soon as practicable,
the number of copies of the Registration Statement in effect as of the
Commencement Date and of each amendment thereto as it may reasonably
request through the Secondary Expiration Date, in each case with the
exhibits filed therewith.
(v) The Trust (or Colonial on behalf of the Trust) will,
without charge, furnish to the Dealer Managers, from time to time
during the period when the Prospectus is required to be delivered in
connection with the Offer under the Securities Act, such number of
copies of the Prospectus (as amended or supplemented) as the Dealer
Managers may reasonably request for the purposes contemplated by the
Securities Act or the Rules and Regulations.
(vi) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Dealer
Managers, to amend or supplement the Registration Statement or the
Prospectus in order to make the Prospectus not misleading in the light
of the circumstances existing at the time it is delivered to a Holder
or other prospective purchaser of Load-Waived Class A Shares, the Trust
will forthwith amend or supplement the Prospectus by preparing and
filing with the Commission (and furnishing to the Dealer Managers a
reasonable number of copies of) an amendment or amendments of the
Registration Statement or an amendment or amendments of or a supplement
or supplements to, the Prospectus (in form and substance reasonably
satisfactory to counsel for the Dealer Managers), at Colonial's or the
Fund's expense, which will amend or supplement the Registration
Statement or the Prospectus so that the Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances existing at the
time the Prospectus is delivered to a Holder or other prospective
purchaser of Load-Waived Class A Shares, not misleading.
(vii) The Trust (or Colonial on behalf of the Trust) will
endeavor, in cooperation with the Dealer Managers and their counsel, to
qualify the Shares for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United
States as the Dealer Managers may designate and maintain such
qualifications in effect for the duration of the Offer; provided,
however, that the Trust will 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 now
so qualified. Colonial, on behalf of the Trust, will file such
statements and reports as may be required by the laws of each
jurisdiction in which the Shares have been qualified as above provided.
(viii) During the 18 month period following the Commencement
Date, the Trust will (i) file a post-effective amendment to its
registration statement, using financial statements which need not be
certified, within four to six months from the initial effective date of
the Registration Statement, (ii) file a Form N-SAR with the Commission
within 60 days of its fiscal year end and within 60 days of the end of
its second fiscal quarter and (iii) transmit to shareholders annual and
semi-annual reports to shareholders within 60 days of the end of the
period for which it is prepared.
(ix) From the Commencement Date through 30 days after the
later of the Initial Expiration Date and the Secondary Expiration Date,
the Trust will not, without the prior consent of the Dealer Managers,
offer or sell, or enter into any agreement (other than the Distribution
Agreement) to sell, any equity or equity related securities of the
Fund, other than the Load-Waived Class A Shares pursuant to the Offer,
Shares issued in reinvestment of dividends or distributions or
exchanges from other mutual funds distributed by Colonial; and the
Trust will not, for a period of 180 days after the later of the
Expiration Date and the Secondary Expiration Date, if any, offer shares
of the Fund on a load-waived basis in a subscription offering
structured similarly to the Offer without the prior written consent of
the Dealer Managers.
(x) The Fund will use the net proceeds from the Offer
to acquire portfolio securities as set forth in the Prospectus.
(xi) The Fund will use its best efforts to maintain its
qualification as a regulated investment company under Subchapter M of
the Code.
(xii) If requested by a Dealer Manager, the Trust (or Colonial
on behalf of the Trust) will advise or cause the Subscription Agent to
advise the Dealer Managers from day to day during the period of the
Offer, on the Initial Expiration Date and the Secondary Expiration
Date, and promptly after the termination of the Offer, as to the total
number of Subscription Rights exercised and the number of Load-Waived
Class A Shares related thereto or other purchase requests of
Load-Waived Class A Shares during the immediately preceding day, for
the Dealer Managers and each Soliciting Dealer, the number of
Subscription Rights exercised and amount of other purchase requests and
the number of Load-Waived Class A Shares related thereto on
subscription certificates or other order forms indicating the Dealer
Managers or such Soliciting Dealer, as the case may be, as the
broker-dealer with respect thereto, and as to such other information as
the Dealer Managers may reasonably request; and will notify the Dealer
Managers and each Soliciting Dealer, not later than 5:00 P.M., New York
City time, on the third business day following the Initial Expiration
Date and the Secondary Expiration Date, if any, of the total number of
Load-Waived Class A Shares subscribed for during the respective
subscription periods related thereto, the total number of Subscription
Rights verified to be in proper form for exercise, rejected for
exercise and being processed and, for the Dealer Managers and each
Soliciting Dealer, the number of Subscription Rights exercised and the
number of Load-Waived Class A Shares, including Load-Waived Class A
Shares requested pursuant to the Over-Subscription Privilege and
pursuant to purchase orders for Initial Load-Waived Class A Shares by
Dealer Manager Clients and Employees and purchase orders for Secondary
Load-Waived Class A Shares, related thereto on subscription
certificates and other order forms indicating the Dealer Managers or
such Soliciting Dealer, as the case may be, as the broker-dealer with
respect thereto, and as to such other information as the Dealer
Managers may reasonably request.
(xiii) On or immediately prior to the Initial Trade Date, the
Trust will duly effectuate a stock split, reverse stock split or a
recapitalization of the Fund's Shares, if necessary, such that the
Fund's Shares as of the close of business on the Initial Expiration
Date will be duly and validly authorized, fully paid and nonassessable
and have a net asset value of $20.00 per Share; and in that connection
the Trust shall distribute, immediately prior to or in connection with
such stock split, reverse stock split or recapitalization,
substantially all of any previously undistributed net investment income
and realized net capital gains of the Fund.
(b) Colonial covenants with the Dealer Managers to deliver to
the Dealer Managers, from time to time and upon their request, a list of all
Soliciting Dealers from whom Colonial shall have received a Colonial Selling
Agreement, as amended to the date hereof in connection with the Offer and an
indication to solicit from Holders exercises of Subscription Rights.
5. Payment of Expenses.
(a) To the extent not paid by the Fund, Colonial will pay all
expenses incident to the performance of the Trust's, Colonial's, the
Administrator's and the Portfolio Manager's respective obligations under this
Agreement, including, but not limited to, expenses relating to (i) the printing
and filing of the Registration Statement as originally filed and of each
amendment thereto, (ii) the preparation, issuance and delivery of the
certificates for the Shares and subscription certificates relating to the
Subscription Rights, (iii) the fees and disbursements of the Fund's counsel
(including the fees and disbursements of local counsel, if any) and accountants,
(iv) the qualification of the Shares under securities laws in accordance with
the provisions of Section 4(a)(vii) of this Agreement, (v) the printing or other
production and delivery to the Dealer Managers of copies of the Registration
Statement as in effect on the Commencement Date and of each amendment thereto
and of the Prospectus and any amendments or supplements thereto, (vi) the
printing or other production, mailing and delivery expenses incurred in
connection with Offering Materials and (vii) the fees and expenses incurred with
respect to the Subscription Agent and the Information Agent.
(b) In addition to any fees that may be payable to the Dealer
Managers under this Agreement, Colonial agrees to reimburse the Representative
or the Dealer Managers, as directed by the Representative, upon request made
from time to time for the reasonable expenses incurred in connection with their
activities under this Agreement, including the reasonable fees and disbursements
of their legal counsel, in an amount up to $250,000.
(c) If this Agreement is terminated by the Dealer Managers in
accordance with the provisions of Section 6, Colonial agrees to reimburse the
Dealer Managers for their reasonable out-of-pocket expenses incurred in
connection with their performance hereunder, including the reasonable fees and
disbursements of counsel for the Dealer Managers. In the event the transactions
contemplated hereunder are not consummated, Colonial agrees to pay all of the
costs and expenses set forth in paragraphs (a) and (b) of this Section 5 which
the Fund or Colonial would have paid if such transactions had been consummated.
6. Conditions of the Dealer Managers' Obligations. The
obligations of the Dealer Managers hereunder are subject to the accuracy of the
respective representations and warranties of the Trust, Colonial, the
Administrator and the Portfolio Manager contained herein, to the performance by
such parties of their respective obligations hereunder, and to the following
further conditions:
(a) The Registration Statement shall be effective as of the
Commencement Date, or at such later time and date as may be approved by the
Dealer Managers; the Prospectus and any amendment or supplement thereto,
including the Prospectus Supplement, shall have been filed with the Commission
in the manner and within the time period required by Rule 497(c), (e) or (h), as
the case may be, under the Securities Act; prior to the Secondary Expiration
Date, no stop order suspending the effectiveness of the Registration Statement
or any amendment thereto shall have been issued, and no proceedings for that
purpose shall have been instituted or threatened or, to the knowledge of the
Trust, Colonial, the Administrator, the Portfolio Manager or the Dealer
Managers, shall be contemplated by the Commission; and the Trust shall have
complied with any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise).
(b) On each Representation Date, the Dealer Managers
shall have received:
(1) The favorable opinions, dated each Representation Date, of
Ropes & Xxxx, counsel for the Trust, in form and substance reasonably
satisfactory to counsel for the Dealer Managers, to the effect that:
(i) The Trust has been duly organized and is existing
under the Trust's Declaration of Trust and the laws of The
Commonwealth of Massachusetts as a voluntary association with
transferable shares commonly referred to as a "Massachusetts
business trust," is duly authorized to exercise in
Massachusetts the powers set forth in its Declaration of Trust
and to transact business in the Commonwealth of Massachusetts,
the Fund has been duly designated as a series of the Trust,
each of the Trust and the Fund has full power and authority to
conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to do
business in each jurisdiction wherein, to the best of such
counsel's knowledge, it owns or leases real property or in
which the conduct of its business requires such qualification,
except where the failure to be so qualified would not result
in a material adverse effect upon the business, properties,
financial position or results of operations of the Fund.
(ii) The Trust is registered with the Commission
under the Investment Company Act as an open-end, management
investment company; to the best knowledge of such counsel
after due inquiry, no order of suspension or revocation of
such registration has been issued or proceedings therefor
initiated or threatened by the Commission; the Registration
Statement (including any post-effective amendment thereto
through such Representation Date) has become effective under
the Securities Act and the Prospectus Supplement has been
filed with the Commission as required by Rule 497 under the
Securities Act; the Trust has been duly registered under the
Investment Company Act; each of the waiver of front-end sales
charges in connection with the Offer, which sales charges
generally are applicable as described in the Prospectus, and
the imposition of a contingent deferred sales charge complies
in all material respects with the applicable provisions of the
Investment Company Act and the Rules and Regulations
thereunder; the provisions of the Trust's declaration of trust
and by-laws comply as to form in all material respects with
the requirements of the Investment Company Act.
(iii) The Trust is authorized to issue an unlimited
number of shares of beneficial interest in one or more series,
which may be divided into classes of shares, the Shares of
beneficial interest of the Fund have been duly designated as
Class A Shares in compliance with all applicable provisions of
the Investment Company Act and the Rules and Regulations
thereunder; the Fund's outstanding shares of beneficial
interest have been duly authorized and are validly issued,
fully paid and (subject to the statements below)
non-assessable and conform in all material respects to the
description thereof in the Prospectus; the Shares have been
duly authorized by all requisite action on the part of the
Trust for issuance and sale pursuant to the terms of the Offer
and, when issued and delivered by the Trust pursuant to the
terms of the Offer against payment of the consideration set
forth in the Prospectus, will be validly issued, fully paid
and non-assessable except that under Massachusetts law,
shareholders of the Trust may under certain circumstances be
held personally liable for its obligations. However, Article
IX of the Declaration of Trust disclaims shareholder liability
for debts or obligations of the Trust and requires every note,
bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or any officer to recite that the
obligations of such instrument are not binding upon
shareholders individually, but are binding only upon the
assets and property of the Trust. Article VIII of the
Declaration of Trust also provides for indemnification out of
the Trust's property for all loss and expense of any
shareholder held personally liable solely by reason of his
being or having been a shareholder. Thus, the risk of a
shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust
itself would be unable to meet its obligations; the Shares
conform in all material respects to the statements relating
thereto contained in the Registration Statement and the
Prospectus; and the issuance of the Shares is not subject to
any statutory or other preemptive rights.
(iv) Except as set forth in the Registration
Statement and Prospectus, to the best knowledge of such
counsel after due inquiry there is no pending or threatened
action, suit or proceeding affecting the Trust or the Fund or
to which the Trust or the Fund is a party before or by any
court or governmental agency, authority or body or any
arbitrator which may reasonably be expected to result in any
material adverse change in the condition (financial or other),
business prospects, net worth or results of operations of the
Trust or the Fund, or which may reasonably be expected to
materially and adversely affect the properties or assets
thereof, of a character required to be disclosed in the
Registration Statement or the Prospectus.
(v) To the knowledge of such counsel after due
inquiry, there are no contracts or other documents of the
Trust or the Fund required to be described in the Registration
Statement or the Prospectus, or to be filed or incorporated by
reference as exhibits which are not described or filed or
incorporated by reference therein as permitted by the
Securities Act, the Investment Company Act or the Rules and
Regulations.
(vi) Each of the Fund Agreements has been duly
authorized, executed and delivered by the Trust, on behalf of
the Fund; each complies in all material respects with all
applicable provisions of the Exchange Act, Investment Company
Act and the Advisers Act; and, assuming due authorization,
execution and delivery by the other parties thereto, each of
the Fund Agreements (other than the Management Agreement and
this Agreement) constitutes a legal, valid, binding and
enforceable obligation of the Trust, subject to the
qualification that the enforceability of the Trust's
obligations thereunder may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors'
rights, and to general principles of equity (regardless of
whether enforceability is considered in a proceeding in equity
or at law).
(vii) Neither the issuance and sale of the Shares,
nor the performance and consummation by the Trust of any other
of the transactions contemplated in the Fund Agreements or any
sub-custodial arrangements entered into pursuant to the
Custodian Agreement, nor the consummation of the transactions
contemplated in the Prospectus Supplement will conflict with,
result in a breach or violation of, or constitute a default
under, or result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the
Fund under the declaration of trust or by-laws of the Trust,
or the terms and provisions of any agreement, indenture,
mortgage, lease or other instrument known to such counsel to
which the Trust, on behalf of the Fund, is a party or by which
it may be bound or to which any of the property or assets of
the Fund is subject, nor will such action result in any
violation of any order, law, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Trust or the Fund or any of their properties.
(viii) No consent, approval, authorization,
notification or order of, or filing with, any court or
governmental agency or body is required for the consummation
by the Trust of the transactions contemplated by the Fund
Agreements or the Registration Statement, except (A) such as
have been obtained and (B) such as may be required under the
blue sky laws of any jurisdiction in connection with the
transactions contemplated hereby.
(ix) The Registration Statement has become effective
under the Securities Act; any required filing of the
Prospectus or any supplement thereto pursuant to Rule 497(c),
(e) or (h) required to be made to the date hereof, including
the Prospectus Supplement, has been made in the manner and
within the time period required by Rule 497(c), (e) or (h), as
the case may be; to the best of such counsel's knowledge after
due inquiry no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for
that purpose have been instituted or threatened; and the
Registration Statement, the Prospectus and each amendment
thereof or supplement thereto (other than the financial
statements, the notes thereto and the schedules and other
financial and statistical data contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the applicable requirements of the
Securities Act and the Investment Company Act and the Rules
and Regulations.
(x) The statements in the Prospectus under the
heading "Distributions and Taxes" and "Taxes" fairly summarize
the matters therein described.
Such counsel also shall have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise verified,
and are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or
the Prospectus, in the course of their review and discussion of the
contents of the Registration Statement and Prospectus with certain officers
and employees of the Trust, no facts have come to their attention which
cause them to believe that the Registration Statement, on the respective
Representation Date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements contained therein not misleading or that
the Prospectus, as of its date and on the respective Representation Date
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such counsel need express no opinion or belief as to
any financial or statistical data set forth or referred to in the
Registration Statement or the Prospectus or as to any statements in or
omissions from the Registration Statement or Prospectus made in reliance
upon and in conformity with written information furnished to the Trust by
the Dealer Managers (which information is limited to that set forth in
Section 7(g) herein) specifically for use therein.
(2) The favorable opinions, dated the respective
Representation Date, of Xxxxxxx X. Xxxxxx, counsel for Colonial, in
form and substance reasonably satisfactory to counsel for the Dealer
Managers, to the effect that:
(i) Colonial has been duly organized and is validly
existing as a corporation in good standing under the laws of
the Commonwealth of Massachusetts, has full power and
authority (corporate and other) to own its properties and
conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to do
business as a foreign corporation in each jurisdiction wherein
it owns or leases real property or in which the conduct of its
business requires such qualification, except where the failure
to be so qualified does not involve a material adverse risk to
its business, properties, financial position or results of
operations of Colonial.
(ii) Colonial is duly registered as a broker-dealer
under the Exchange Act and is not prohibited by the Exchange
Act or the Investment Company Act, or the rules and
regulations under such Acts, from acting as principal
underwriter of the Shares as contemplated in the Prospectus
and the Distribution Agreement.
(iii) Each of this Agreement, the Distribution
Agreement and any other Fund Agreement to which Colonial is a
party has been duly authorized, executed and delivered by
Colonial and complies in all material respects with the
applicable provisions of the Exchange Act, the Investment
Company Act and the Rules and Regulations, and is, assuming
due authorization, execution and delivery by the other parties
thereto, a legal, valid, binding and enforceable obligation of
Colonial, subject as to enforcement to bankruptcy, insolvency,
reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights, and
to general principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at
law) and except to the extent that the enforceability of the
indemnification provisions contained herein may be limited
under U.S. federal and state securities laws.
(iv) Neither the performance by Colonial of its
obligations under this Agreement, the Distribution Agreement
or any other Fund Agreement to which Colonial is a party nor
the consummation of the transactions contemplated therein or
in the Prospectus Supplement nor the fulfillment of the terms
thereof will conflict with, result in a breach or violation
of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any
properties or assets of Colonial under the charter or by-laws
of Colonial, or the terms and provisions of any agreement,
indenture, mortgage, lease or other instrument to which
Colonial is a party or by which it may be bound or to which
any of the property or assets of Colonial is subject, nor will
such action result in any violation of any order, law, rule or
regulation of any court or governmental agency or body having
jurisdiction over Colonial or any of its properties, which
conflict, breach, violation, lien, charge or encumbrance,
either individually or in the aggregate, would have a material
adverse effect on Colonial.
(v) Except as set forth in the Registration Statement
and Prospectus, there is no pending or, to the best knowledge
of counsel, threatened action, suit or proceeding affecting
Colonial or to which Colonial is a party before or by any
court or governmental agency, authority or body or any
arbitrator which may reasonably be expected to result in any
material adverse change in the condition (financial or other),
business prospects, net worth or results of operations of
Colonial, or which may reasonably be expected to materially
and adversely affect the properties or assets thereof, of a
character required to be disclosed in the Registration
Statement or Prospectus.
(vi) Colonial owns or possesses any governmental
licenses, permits, consents, orders, approvals or other
authorizations necessary to enable Colonial to distribute
Shares as contemplated in the Prospectus.
(vii) The Trust owns or possesses all material
governmental licenses, permits, consents, orders, approvals or
other authorizations, necessary to enable the Fund to continue
to invest in securities as contemplated in the Prospectus.
(viii) The New York Stock Exchange has been duly
notified of the Offer and the Record Date and no other notice
or action by the Trust is required to be delivered to, or
taken with respect to, the New York Stock Exchange in
connection with the issuance and sale of the Shares pursuant
thereto.
(ix) No consent, approval, authorization,
notification or order of, or any filing with, any court or
governmental agency or body or securities exchange is required
for the consummation by Colonial of the transactions
contemplated by this Agreement, the Distribution Agreement or
any other Fund Agreement to which Colonial is a party, except
(A) such as have been obtained and (B) such as may be required
under the blue sky laws of any jurisdiction in connection with
the transactions contemplated hereby.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of Colonial and public officials.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, in the course of their
review and discussion of the contents of the Registration Statement
and Prospectus with certain officers and employees of Colonial and of
the Trust and its independent accountants, no facts have come to their
attention which cause them to believe that the Registration Statement,
on the respective Representation Date, contained any untrue statement
of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements contained
therein not misleading or that the Prospectus, as of its date and on
the respective Representation Date, contained any untrue statement of
a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
(3) The favorable opinions, dated the respective Representation Date,
of Xxxxxxx X. Xxxxxx, counsel for the Administrator, in form and substance
reasonably satisfactory to counsel for the Dealer Managers, to the effect that:
(i) The Administrator has been duly organized and is
validly existing as a corporation in good standing under the
laws of the Commonwealth of Massachusetts, has full power and
authority (corporate and other) to own its properties and
conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to do
business as a foreign corporation in each jurisdiction wherein
it owns or leases real property or in which the conduct of its
business requires such qualification, except where the failure
to be so qualified does not involve a material adverse risk to
its business, properties, financial position or results of
operations of the Administrator.
(ii) Each of this Agreement, the Administration
Agreement and any other Fund Agreement to which the
Administrator is a party has been duly authorized, executed
and delivered by the Administrator and complies in all
material respects with the applicable provisions of the
Investment Company Act and the rules and regulations
thereunder, and is, assuming due authorization, execution and
delivery by the other parties thereto, a legal, valid, binding
and enforceable obligation of the Administrator subject as to
enforcement to bankruptcy, insolvency, reorganization,
moratorium and other laws of general applicability relating to
or affecting creditors' rights, and to general principles of
equity (regardless of whether enforceability is considered in
a proceeding in equity or at law) and except to the extent
that the enforceability of the indemnification provisions
contained herein may be limited under U.S.
federal and state securities laws.
(iii) Neither the performance by the Administrator of
its obligations under this Agreement, the Administration
Agreement or any other Fund Agreement to which the
Administrator is a party nor the consummation of the
transactions contemplated therein or in the Prospectus
Supplement nor the fulfillment of the terms thereof will
conflict with, result in a breach or violation of, or
constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Administrator under the charter or
by-laws of the Administrator, or the terms and provisions of
any agreement, indenture, mortgage, lease or other instrument
to which the Administrator is a party or by which it may be
bound or to which any of the property or assets of the
Administrator is subject, nor will such action result in any
violation of any order, law, rule or regulation of any court
or governmental agency or body having jurisdiction over the
Administrator or any of its properties, which conflict,
breach, violation, lien, charge or encumbrance, either
individually or in the aggregate, would have a material
adverse effect on the Administrator.
(iv) Except as set forth in the Registration
Statement and Prospectus, there is no pending or, to the best
knowledge of counsel, threatened action, suit or proceeding
affecting the Administrator or to which the Administrator is a
party before or by any court or governmental agency, authority
or body or any arbitrator which may reasonable be expected to
result in any material adverse change in the condition
(financial or other), business prospects, net worth or results
of operations of the Administrator, or which may reasonably be
expected to materially and adversely affect the properties or
assets thereof, of a character required to be disclosed in the
Registration Statement or Prospectus.
(v) The Administrator owns or possesses any
governmental licenses, permits, consents, orders, approvals or
other authorizations necessary to enable the Administrator to
perform the services for the Fund as contemplated in the
Prospectus.
(vi) No consent, approval, authorization,
notification or order of, or any filing with, any court or
governmental agency or body is required for the consummation
by the Administrator of the transactions contemplated by this
Agreement, the Administration Agreement or any other Fund
Agreement to which the Administrator is a party, except (A)
such as have been obtained and (B) such as may be required
under the blue sky laws of any jurisdiction in connection with
the transactions contemplated hereby.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Administrator and public officials.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, in the course of their
review and discussion of the contents of the Registration Statement
and Prospectus with certain officers and employees of the
Administrator and of the Trust and its independent accountants, no
facts have come to their attention which cause them to believe that
the Registration Statement, on the respective Representation Date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements contained therein not misleading or that the
Prospectus, as of its date and on the respective Representation Date,
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading.
(4) The favorable opinions, dated the respective Representation Date,
of Xxxx Xxxxxxxxx or Xxxx Xxxxxxx, counsel for the Portfolio Manager, in form
and substance reasonably satisfactory to counsel for the Dealer Managers, to the
effect that:
(i) The Portfolio Manager has been duly organized and
is validly existing as a corporation in good standing under
the laws of the Commonwealth of Virginia, has full power and
authority (corporate and other) to own its properties and
conduct its business as described in the Registration
Statement and the Prospectus, and is duly qualified to do
business as a foreign corporation in each jurisdiction wherein
it owns or leases real property or in which the conduct of its
business requires such qualification, except where the failure
to be so qualified does not involve a material adverse risk to
its business, properties, financial position or results of
operations of the Portfolio Manager.
(ii) The Portfolio Manager is duly registered as an
investment adviser under the Advisers Act and is not
prohibited by the Advisers Act or the Investment Company Act,
or the rules and regulations under such Acts, from acting as
an investment adviser for the Fund as contemplated in the
Prospectus and the Management Agreement.
(iii) Each of this Agreement, the Management
Agreement and any other Fund Agreement to which the Portfolio
Manager is a party has been duly authorized, executed and
delivered by the Portfolio Manager and complies as respects
the Portfolio Manager in all material respects with the
applicable provisions of the Advisers Act, the Investment
Company Act and the rules and regulations under such Acts, and
is, assuming due authorization, execution and delivery by the
other parties thereto, a legal, valid, binding and enforceable
obligation of the Portfolio Manager, subject as to enforcement
to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting
creditors' rights, and to general principles of equity
(regardless of whether enforceability is considered in a
proceeding in equity or at law) and except to the extent that
the enforceability of the indemnification provisions contained
herein may be limited under U.S. federal and state securities
laws.
(iv) Neither the performance by the Portfolio Manager
of its obligations under this Agreement, the Management
Agreement or any other Fund Agreement to which the Portfolio
Manager is a party nor the consummation of the transactions
contemplated therein or in the Prospectus Supplement nor the
fulfillment of the terms thereof will conflict with, result in
a breach or violation of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Portfolio
Manager under the charter or by-laws of the Portfolio Manager,
or the terms and provisions of any agreement, indenture,
mortgage, lease or other instrument to which the Portfolio
Manager is a party or by which it may be bound or to which any
of the property or assets of the Portfolio Manager is subject,
nor will such action result in any violation of any order,
law, rule or regulation of any court or governmental agency or
body having jurisdiction over the Portfolio Manager or any of
its properties, which conflict, breach, violation, lien,
charge or encumbrance, either individually or in the
aggregate, would have a material adverse effect on the
Portfolio Manager.
(v) Except as set forth in the Registration Statement
and Prospectus, there is no pending or, to the best knowledge
of counsel, threatened action, suit or proceeding affecting
the Portfolio Manager or to which the Portfolio Manager is a
party before or by any court or governmental agency, authority
or body or any arbitrator which may reasonably be expected to
result in any material adverse change in the condition
(financial or other), business prospects, net worth or results
of operations of the Portfolio Manager, or which may
reasonably be expected to materially and adversely affect the
properties or assets thereof, of a character required to be
disclosed in the Registration Statement or Prospectus.
(vi) The Portfolio Manager owns or possesses any
governmental licenses, permits, consents, orders, approvals or
other authorizations necessary to enable the Portfolio Manager
to continue to direct investments in securities as
contemplated in the Prospectus.
(vii) No consent, approval, authorization,
notification or order of, or any filing with, any court or
governmental agency or body is required for the consummation
by the Portfolio Manager of the transactions contemplated by
this Agreement, the Management Agreement or any other Fund
Agreement to which the Portfolio Manager is a party, except
(A) such as have been obtained and (B) such as may be required
under the blue sky laws of any jurisdiction in connection with
the transactions contemplated hereby.
In rendering such opinion, such counsel may rely, as to matters of
fact, to the extent such counsel deems proper, on certificates of responsible
officers of the Portfolio Manager and public officials.
Such counsel shall also have stated that, while they have not
themselves checked the accuracy and completeness of or otherwise verified, and
are not passing upon and assume no responsibility for the accuracy or
completeness of, the statements contained in the Registration Statement or the
Prospectus, in the course of their review and discussion of the contents of the
Registration Statement and Prospectus with certain officers and employees of the
Portfolio Manager and of the Trust and its independent accountants, no facts
have come to their attention which cause them to believe that the Registration
Statement, on the respective Representation Date, contained any untrue statement
of a material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements contained therein not misleading or
that the Prospectus, as of its date and on the respective Representation Date,
as the case may be, contained any untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.
(a) The Dealer Managers shall have received from Skadden,
Arps, Slate, Xxxxxxx & Xxxx (Illinois), counsel for the Dealer Managers, such
opinion or opinions, dated the respective Representation Date, with respect to
the Offer, the Registration Statement, the Prospectus and other related matters
as the Dealer Managers may reasonably require, and the Trust shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(d) The Trust, on behalf of the Fund, shall have furnished to
the Dealer Managers certificates of the Trust, signed on behalf of the Trust by
the Chairman of the Board, the President, a Vice President, the Treasurer or the
Secretary or an Assistant Secretary of the Trust, dated the respective
Representation Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any supplement to
the Prospectus and this Agreement and that, to the best of their knowledge:
(i) The representations and warranties of the Trust in this
Agreement are true and correct in all material respects on and as of
the respective Representation Date, with the same effect as if made on
the respective Representation Date, and the Trust has complied in all
material respects with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
respective Representation Date.
(ii) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Trust's knowledge, threatened.
(iii) Since the date of the commencement of operations of the
Fund, there has been no material adverse change in the condition
(financial or other), earnings, business or properties of the Fund,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus.
(e) Colonial shall have furnished to the Dealer Managers
certificates, signed on behalf of Colonial by the Chairman of the Board, the
President, a Vice President or other senior officer, dated the respective
Representation Date, to the effect that the signer of such certificate has read
the Registration Statement, the Prospectus, any supplement to the Prospectus and
this Agreement and, to the best knowledge of such signer, the representations
and warranties of Colonial in this Agreement are true and correct in all
material respects on and as of the respective Representation Date, with the same
effect as if made on the respective Representation Date.
(f) The Administrator shall have furnished to the Dealer
Managers certificates, signed on behalf of the Administrator by the Chairman of
the Board, the President, a Vice President or other senior officer, dated the
respective Representation Date, to the effect that the signer of such
certificate has read the Registration Statement, the Prospectus, any supplement
to the Prospectus and this Agreement and, to the best knowledge of such signer,
the representations and warranties of the Administrator in this Agreement are
true and correct in all material respects on and as of the respective
Representation Date, with the same effect as if made on the respective
Representation Date.
(g) The Portfolio Manager shall have furnished to the Dealer
Managers certificates, signed on behalf of the Portfolio Manager by the Chairman
of the Board, the President, a Vice President or other senior officer, dated the
respective Representation Date, to the effect that the signer of such
certificate has read the Registration Statement, the Prospectus, any supplement
to the Prospectus and this Agreement and, to the best knowledge of such signer,
the representations and warranties of the Portfolio Manager in this Agreement
are true and correct in all material respects on and as of the respective
Representation Date, with the same effect as if made on the respective
Representation Date.
(h) Price Waterhouse LLP shall have furnished to the Dealer
Managers letters, dated the respective Representation Date, in form and
substance satisfactory to the Dealer Managers, and stating in effect that:
(i) They are independent accountants with respect to the Fund
within the meaning of the Securities Act and the applicable Rules and
Regulations.
(ii) They have performed specified procedures, not
constituting an audit, including, where applicable, a reading of the
latest available interim financial information of the Fund, a reading
of the minute books of the Fund, inquiries of officials of the Trust
responsible for financial or accounting matters and such other
inquiries and procedures which shall be specified in such letter (1)
with respect to certain amounts, percentages and numerical data
relating to performance information appearing in the Registration
Statement and (2) with respect to the net asset value of the Shares as
of the Expiration Date, which have previously been specified by the
Dealer Managers and which shall be specified in such letter, and have
compared such items with, and have found such items to be in agreement
with, the accounting and financial records of the Fund or of the funds
to which they relate.
(i) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there shall not have
been (i) any change or decrease specified in the letter or letters referred to
in paragraph (h) of this Section 6, or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties of
the Fund, the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the reasonable judgment of the Dealer Managers, so material and
adverse as to make it impractical or inadvisable to proceed with the Offer as
contemplated by the Registration Statement and the Prospectus.
(j) Prior to the respective Representation Date, the Trust, on
behalf of the Fund, shall have furnished to the Dealer Managers such further
information, certificates and documents as the Dealer Managers may reasonably
request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement or waived by the Dealer Managers, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be in all
material respects satisfactory in form and substance to the Dealer Managers and
its counsel, this Agreement and all obligations of the Dealer Managers hereunder
may be canceled at, or at any time prior to, the Initial Expiration Date or
Secondary Expiration Date, as the case may be, by the Dealer Managers. Notice of
such cancellation shall be given to the Fund in writing or by telephone or
telegraph confirmed in writing.
1. Indemnification and Contribution.
(a) Each of the Trust and Colonial, jointly and severally, will
indemnify and hold harmless each Dealer Manager, the directors,
officers, employees and agents of each Dealer Manager and each person,
if any, who controls each Dealer Manager within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act from and
against any and all losses, claims, liabilities, expenses and damages
(including, but not limited to, any and all investigative, legal and
other expenses reasonably incurred in connection with, and any and all
amounts paid in settlement of, any action, suit or proceeding between
any of the indemnified parties and any indemnifying parties or between
any indemnified party and any third party, or otherwise, or any claim
asserted), to which any Dealer Manager, or any such person, may become
subject under the Securities Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar
as such losses, claims, liabilities, expenses or damages arise out of
or are based on (i) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus, the
Registration Statement, the Prospectus or the Offering Materials or
any amendment or supplement to the Registration Statement, the
Prospectus or the Offering Materials or in any documents filed under
the Exchange Act and deemed to be incorporated by reference into the
Prospectus, or in any application or other document executed by or on
behalf of the Trust or based on written information furnished by or on
behalf of the Trust filed in any jurisdiction in order to qualify the
Shares under the securities laws thereof or filed with the Commission,
(ii) the omission or alleged omission to state in such document a
material fact required to be stated in it or necessary to make the
statements in it not misleading or (iii) any act or failure to act or
any alleged act or failure to act by any Dealer Manager in connection
with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to
in any loss, claim, liability, expense or damage arising out of or
based upon matters covered by clause (i) or (ii) above (provided that
neither the Trust nor Colonial shall be liable under this clause (iii)
to the extent it is finally judicially determined by a court of
competent jurisdiction that such loss, claim, liability, expense or
damage resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Dealer Manager through its
gross negligence or willful misconduct); provided that neither the
Trust nor Colonial will be liable to the extent that such loss, claim,
liability, expense or damage is based on an untrue statement or
omission or alleged untrue statement or omission made in reliance on
and in conformity with information relating to any Dealer Manager
furnished in writing to the Trust by the Dealer Managers expressly for
inclusion in the Registration Statement, any preliminary prospectus or
the Prospectus. This indemnity agreement will be in addition to any
liability that the Trust and Colonial might otherwise have.
(b) Each Dealer Manager will indemnify and hold harmless the
Trust and Colonial, each person, if any, who controls the Trust or Colonial
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, each trustee of the Trust and each officer of the Trust who signs
the Registration Statement to the same extent as the foregoing indemnity from
the Trust and Colonial to each Dealer Manager, but only insofar as losses,
claims, liabilities, expenses or damages arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in reliance
on and in conformity with information relating to any Dealer Manager furnished
in writing to the Trust by the Dealer Managers expressly for use in the
Registration Statement or the Prospectus. This indemnity will be in addition to
any liability that each Dealer Manager might otherwise have; provided, however,
that in no case shall any Dealer Manager be liable or responsible for any amount
in excess of the fees and commissions received by such Dealer Manager.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 7 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all such
indemnified party or parties. All such fees, disbursements and other charges
will be reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent (which consent will not be unreasonably
withheld). No indemnifying party shall, without the prior written consent of
each indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding relating to
the matters contemplated by this Section 7 (whether or not any indemnified party
is a party thereto), unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising or
that may arise out of such claim, action or proceeding. Notwithstanding any
other provision of this Section 7(c), 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 effected without its written consent if (i) such settlement
is entered into more than 45 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.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 7 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Trust and Colonial or the Dealer
Managers, the Trust and Colonial and the Dealer Managers will contribute to the
total losses, claims, liabilities, expenses and damages (including any
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted, but after deducting any contribution received by the Trust and
Colonial from persons other than the Dealer Managers, such as persons who
control the Trust or Colonial within the meaning of the Securities Act, officers
of the Trust who signed the Registration Statement and directors of the Trust,
who also may be liable for contribution) to which the Trust and Colonial and any
one or more of the Dealer Managers may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Trust and Colonial
on the one hand and the Dealer Managers on the other. The relative benefits
received by the Trust and Colonial (treated jointly for this purpose as one
person) on the one hand and the Dealer Managers on the other shall be deemed to
be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Trust bear to the total fees received by the
Dealer Managers. If, but only if, the allocation provided by the foregoing
sentence is not permitted by applicable law, the allocation of contribution
shall be made in such proportion as is appropriate to reflect not only the
relative benefits referred to in the foregoing sentence but also the relative
fault of the Trust and Colonial (treated jointly for this purpose as one
person), on the one hand, and the Dealer Managers, on the other, with respect to
the statements or omissions which resulted in such loss, claim, liability,
expense or damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative fault
shall be determined by reference to whether the 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 Trust or Colonial or the Dealer
Managers, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Trust, Colonial and the Dealer Managers agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were to be determined
by pro rata allocation (even if the Dealer Managers were treated as one entity
for such purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 7(d) shall be deemed to include, for purpose of this Section 7(d), any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Dealer Manager shall be
required to contribute any amount in excess of the fees received by it and no
person found guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Dealer
Managers' obligations to contribute as provided in this Section 7(d) are several
and not joint. For purposes of this Section 7(d), any person who controls a
party to this Agreement within the meaning of the Securities Act will have the
same rights to contribution as that party, and each officer of the Trust who
signed the Registration Statement will have the same rights to contribution as
the Trust, subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 7(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 7(d). Except for a settlement entered
into pursuant to the last sentence of Section 7(c) hereof, no party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements
contained in this Section 7 and the representations and warranties of the Trust
and Colonial contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any investigation made by or on behalf of
the Dealer Managers or (ii) any termination of this Agreement.
(f) Notwithstanding any other provisions in this Section 7, no
party shall be entitled to indemnification or contribution under this Agreement
against any loss, claim, liability, expense or damage arising by reason of such
person's willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of such person's reckless disregard of
such person's obligations and duties hereunder.
(g) The Trust and Colonial acknowledge that the statements
under the caption "Distribution Arrangements for the Offer" in the Prospectus
Supplement constitute the only information furnished in writing to the Trust by
the Dealer Managers expressly for use in such document, and the Dealer Managers
confirm that such statements are true and correct in all material respects.
8. Representations, Warranties and Agreements to Survive
Delivery. The respective agreements, representations, warranties, indemnities
and other statements of the Trust or its officers, of Colonial, of the
Administrator, of the Portfolio Manager and of the Dealer Managers set forth in
or made pursuant to this Agreement shall survive the Initial Expiration Date and
the Secondary Expiration Date and will remain in full force and effect,
regardless of any investigation made by or on behalf of Dealer Managers or the
Trust or any of the officers, trustees, directors or controlling persons
referred to in Section 7 hereof, and will survive delivery of and payment for
the Shares pursuant to the Offer. The provisions of Sections 5 and 7 hereof
shall survive the termination or cancellation of this Agreement.
9. Termination of Agreement. (a) This Agreement shall be
subject to termination in the absolute discretion of the Dealer Managers, by
notice given to the Trust prior to the expiration of the Offer, if prior to such
time (i) financial, political, economic, currency, banking or social conditions
in the United States shall have undergone any material change the effect of
which on the financial markets makes it, in the Representative's judgment,
impracticable or inadvisable to proceed with the Offer, (ii) there has occurred
any outbreak or material escalation of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as to
make it, in the Representatives' judgment, impracticable or inadvisable to
proceed with the Offer, (iii) trading in securities generally on the New York
Stock Exchange shall have been suspended or limited or (iv) a banking moratorium
shall have been declared either by Federal or New York State authorities.
(a) 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 5.
10. Notices. All communications hereunder will be in writing
and effective only on receipt and, if sent to the Dealer Managers, will be
mailed, delivered or telegraphed and confirmed to PaineWebber Incorporated,
Attn: Xxxx X. Reit, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or if
sent to the Trust, Colonial, the Administrator or the Portfolio Manager, will be
mailed, delivered or telegraphed and confirmed to them in writing at: c/o
Colonial Management Associates, Inc., Xxx Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, Attn: Xxxxxxx X. Xxxxxx, Vice President and Counsel.
11. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and will
inure to the benefit of the officers, trustees, directors and controlling
persons referred to in Section 7 hereof, and no other person will have any right
or obligation hereunder.
12. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York without
reference to conflict of law principles thereof.
13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
14. Miscellaneous. A copy of the Declaration of Trust of
the Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Agreement has been
executed on behalf of the Fund by an officer of the Trust in the
capacity of an officer and not individually and the obligations of or
arising out of this Agreement are not binding upon any of the trustees,
officers or shareholders individually but are binding only upon the assets and
property of the Fund.
If the foregoing is in accordance with your understanding of
our agreement, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement among the Trust,
Colonial, the Administrator the Portfolio Manager and the Dealer Managers.
Very truly yours,
Colonial Trust II, Colonial Management
on behalf of Newport Associates, Inc.
Greater China Fund
By: By:
Name: Name:
Title: Title:
Colonial Investment Newport Fund Management,
Services, Inc. Inc.
By: By:
Name: Name:
Title: Title:
The foregoing Agreement is hereby confirmed and accepted, on behalf of
the Dealer Managers, as of the date first above written.
PaineWebber Incorporated
By:
Name:
Title:
A-2
FOOTER B HAS BEEN ENTERED (DRAFT)
NEWPORT GREATER CHINA FUND,
a portfolio of Colonial Trust II
Load-Waived Class A Shares
Issuable upon Exercise of
Subscription Rights for such Shares
AMENDMENT TO
COLONIAL SELLING AGREEMENT
To Securities Dealers and Brokers:
Colonial Trust II (the "Trust"), on behalf of its portfolio Newport
Greater China Fund (the "Fund"), is offering to beneficial shareholders
("Holders") as of the close of business on June 16, 1997 (the "Record Date") of
(i) shares of common stock or common shares of beneficial interest, as the case
may be, (the "Colonial ETF Shares") of the following exchange-traded, closed-end
investment companies: Colonial Investment Grade Municipal Trust; Colonial
Municipal Income Fund; Colonial High Income Municipal Trust; Colonial
Intermediate High Income Fund; Colonial Intermarket Income Trust I; Liberty
All-Star Equity Fund; and Liberty All-Star Growth Fund Inc. (the "Colonial ETF
Funds") and (ii) common shares of beneficial interest, of any designated class
(the "Colonial MF Shares"), of Colonial Newport Tiger Fund; Colonial Newport
Tiger Cub Fund ; and Colonial Newport Japan Fund(the "Colonial Mutual Funds"),
non-transferable subscription rights (the "Subscription Rights") to purchase
shares of beneficial interest of the Fund, no par value per share, designated
Class A Shares (the "Shares") at the Subscription Price (as hereinafter defined)
without payment of an up-front sales charge (the "Load-Waived Class A Shares").
The Subscription Rights entitle Holders of Colonial ETF Shares and
Colonial MF Shares to subscribe for Load-Waived Class A Shares at the rate of
one Load-Waived Class A Share for each Colonial ETF Share or Colonial MF Share
held on the Record Date, except that Holders owning fewer than 150 Colonial ETF
Shares or Colonial MF Shares are entitled to subscribe for 150 Load-Waived Class
A Shares. Holders of Colonial ETF Shares and Colonial MF Shares who fully
exercise all their Subscription Rights may be entitled to subscribe for
additional Load-Waived Class A Shares of the Fund, subject to availability (the
"Over-Subscription Privilege"). The opportunity for Holders of Colonial ETF
Shares and Colonial MF Shares to subscribe for Load-Waived Class A Shares
pursuant to the Subscription Rights expires at 5:00 p.m., New York City time, on
July 25, 1997 (the "Initial Expiration Date"). In the event that the Fund has
not achieved, as of the Initial Expiration Date, the Maximum Offer Amount (as
defined in the Fund's Prospectus Supplement (as hereinafter defined)), then the
Fund may offer Load-Waived Class A Shares to the general public for a period not
to exceed thirty calendar days from the Initial Expiration Date, unless earlier
terminated by the Fund (such date, as subject to early termination, is referred
to as the "Secondary Expiration Date") as provided for in the Fund's Prospectus
Supplement.
A-10
The offer of Subscription Rights to the Holders of Colonial ETF Shares
and Colonial MF Shares will commence on June 23, 1997 (the "Commencement Date").
Load-Waived Class A Shares issued to Holders of Colonial ETF Shares and Colonial
MF Shares pursuant to exercise of Subscription Rights, including pursuant to
requests for additional Load-Waived Class A Shares pursuant to the
Over-Subscription Privilege, duly received on or prior to the Initial Expiration
Date will be at the initial subscription price (the "Initial Subscription
Price") of $20.00 per Load-Waived Class A Share. The settlement date for the
issuance of the Initial Load-Waived Class A Shares shall be July 30, 1997 (the
"Initial Settlement Date"). Purchase requests, if any, of Load-Waived Class A
Shares by members of the general public received after the Initial Expiration
Date will not be accepted until after the Initial Settlement Date and, if
accepted, will be sold at the net asset value per Share next determined after
receipt and acceptance of the order (the "Secondary Subscription Price"). The
Initial Subscription Price and the Secondary Subscription Price are collectively
referred to as the "Subscription Price." The aggregate number of Initial
Load-Waived Class A Shares that may be issued on the Initial Settlement Date,
and the aggregate number of Secondary Load-Waived Class A Shares that may be
issued until the Secondary Expiration Date, will be subject to the Maximum Offer
Amount (as defined in the Prospectus Supplement (as hereinafter defined)).
The Load-Waived Class A Shares will be subject to a Contingent Deferred
Sales Charge ("CDSC") of 2% of the lower of the purchase price or the redemption
proceeds if such Load-Waived Class A Shares are redeemed within approximately
twenty-four months from their purchase date. The CDSC may be waived in certain
circumstances as described or referred to in the Prospectus Supplement. The
offer of Load-Waived Class A Shares to Holders of Colonial ETF Shares and
Colonial MF Shares pursuant to Subscription Rights, as it may be extended to
members of the general public in connection with the Secondary Expiration Date,
is referred to herein as the "Offer." The minimum purchase in the Offer is
$3,000 of Load-Waived Class A Shares (150 Load-Waived Class A Shares).
Additional information with respect to the Offer is set forth in a supplement,
dated June 23, 1997 (the "Prospectus Supplement", to the Fund's Prospectus dated
May 16, 1997.
You are a party to a Colonial Selling Agreement (the "Selected Dealer
Agreement") with Colonial Investment Services, Inc. ("Colonial") relating to the
distribution and sale of shares of mutual funds for which Colonial is the
sponsor or distributer. The submitting to Colonial of an order for any
Load-Waived Class A Shares pursuant to the Offer shall constitute your
acceptance of the terms of this Amendment to the Selected Dealer Agreement in
connection with the Offer.
For the duration of the Offer, Colonial has agreed to pay Solicitation
Fees to any qualified broker or dealer [or bank (on a fully disclosed agency
basis)] who solicits the exercise of Subscription Rights (which exercise
includes exercises pursuant to the Over-Subscription Privilege) in connection
with the Offer and who complies with the procedures described below (a
"Soliciting Dealer"). Upon timely delivery to the subscription agent (discussed
below) for the Offer, of payment for Shares purchased pursuant to the exercise
of Subscription Rights and of properly completed and executed documentation as
set forth in this Amendment to the Selected Dealer Agreement, a Soliciting
Dealer will be entitled to receive Solicitation Fees equal to 2.00% of the
Subscription Price per Share so purchased; provided, however, that no payment
shall be due with respect to the issuance of any Shares until payment therefor
is actually received. A qualified broker or dealer is a broker or dealer which
is a member of a registered national securities exchange in the United States or
the National Association of Securities Dealers, Inc. ("NASD") or any foreign
broker or dealer not eligible for membership who agrees to conform to the Rules
of Fair Practice of the NASD, including Sections 2720, 2730, 2740 and 2750
thereof, in making solicitations in the United States to the same extent as if
it were a member thereof.
Colonial has agreed to pay Solicitation Fees to Soliciting Dealers on
the terms set forth in the Dealer Manager Agreement, dated as of June 23, 1997,
among PaineWebber Incorporated, as representative of the several Dealer
Managers, the Trust, Colonial and others (the "Dealer Manager Agreement").
Solicitation and other activities by Soliciting Dealers may be undertaken only
in accordance with the applicable rules and regulations of the Securities and
Exchange Commission and only in those states and other jurisdictions where such
solicitations and other activities may lawfully be undertaken and in accordance
with the laws thereof. Compensation will not be paid for solicitations in any
state or other jurisdiction in which, in the opinion of counsel to Colonial, the
Trust or the Dealer Managers, such compensation may not lawfully be paid.
No Soliciting Dealer or any other person is authorized by the Trust,
Colonial or the Dealer Managers to give any information or make any
representations in connection with the Offer other than those contained in the
Prospectus, the Prospectus Supplement and other authorized solicitation material
furnished by the Trust through Colonial and the Dealer Managers. No Soliciting
Dealer is authorized to act as agent of the Trust, Colonial or the Dealer
Managers in any connection or transaction. In addition, nothing herein contained
shall create a partnership among the Soliciting Dealers and the Dealer Managers
or with one another, or agents of the Dealer Managers, the Trust or Colonial, or
create any association between such parties, or shall render the Dealer
Managers, the Trust or Colonial liable for the obligations of any Soliciting
Dealer. The Dealer Managers shall be under no liability to make any payment to
any Soliciting Dealer, and shall be subject to no other liabilities to any
Soliciting Dealer, and no obligations of any sort shall be implied.
Colonial Investors Service Center, Inc. is the subscription agent for
the exercise of Subscription Rights by Holders of Colonial ETF Shares and
Colonial MF Shares (the "Subscription Agent"). In order for a Soliciting Dealer
to receive Solicitation Fees for the exercise of Subscription Rights by Holders
of Colonial ETF Shares and Colonial MF Shares, the manner and timing of the
exercise of the Subscription Rights must conform with the procedures set forth
in the Prospectus Supplement. In the case of a Notice of Guaranteed Delivery,
Solicitation Fees will only be paid after delivery in accordance with such
Notice of Guaranteed Delivery has been effected. Solicitation Fees will be paid
by Colonial to the Soliciting Dealer to an account or address designated by the
Soliciting Dealer below within five business days following the Initial
Settlement Date or the Secondary Settlement Date, as the case may be.
All questions as to the form, validity and eligibility (including time
of receipt) of any exercise of Subscription Rights will be determined by the
Trust, on behalf of the Fund in its sole discretion, which determination shall
be final and binding. Unless waived, any irregularities in connection with an
exercise of Subscription Rights must be cured within such time as Colonial shall
determine. None of the Trust, Colonial, the Dealer Managers, the Subscription
Agent, the Information Agent for the Offer, Shareholder Communications
Corporation or any other person will be under any duty to give notification of
any defects or irregularities in any exercise of Subscription Rights or incur
any liability for failure to give such notification.
The acceptance of Solicitation Fees from Colonial by a Soliciting
Dealer shall constitute a representation by such Soliciting Dealer to Colonial
that: (i) it has received and reviewed the Prospectus and the Prospectus
Supplement; (ii) in soliciting purchases of Shares pursuant to the exercise of
the Subscription Rights it has complied with the applicable requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the applicable
rules and regulations thereunder, any applicable securities laws of any state or
jurisdiction where such solicitations may lawfully be made, and the applicable
rules and regulations of any self-regulatory organization or registered national
securities exchange; (iii) in soliciting purchases of Shares pursuant to the
exercise of the Subscription Rights and in filling orders for such Shares, it
has complied with the terms of the Offer as set forth in the Prospectus
Supplement; (iv) in soliciting purchases of Shares pursuant to the exercise of
the Subscription Rights it has not published, circulated or used any soliciting
materials other than the Prospectus, the Prospectus Supplement and any other
authorized solicitation material furnished by the Trust through Colonial or the
Dealer Managers; (v) it has not purported to act as agent of the Trust, Colonial
or the Dealer Managers in any connection or transaction relating to the Offer;
(vi) the information contained in this Amendment to the Selected Dealer
Agreement is, to its best knowledge, true and complete; (vii) it is not
affiliated with Colonial; (viii) it will not accept Solicitation Fees paid by
Colonial pursuant to the terms hereof with respect to Shares purchased by the
Soliciting Dealer pursuant to an exercise of Subscription Rights for its own
account; (ix) it will not remit, directly or indirectly, any part of
Solicitation Fees paid by Colonial pursuant to the terms hereof to any
beneficial owner of Shares purchased pursuant to the Offer; (x) it acknowledges
that the respective boards of directors or trustees, as the case may be, of each
Colonial ETF Fund and each Colonial Mutual Fund has authorized and directed that
the Prospectus (including the Prospectus Supplement) be delivered to each
beneficial owner of shares of the Colonial ETF Funds and the Colonial Mutual
Funds, and such Soliciting Dealer has delivered or caused to be delivered the
Prospectus (including the Prospectus Supplement) to each beneficial owner for
which such Soliciting Dealer holds such shares of record or as nominee,
consistent with the applicable provisions of the Exchange Act and the rules of
the New York Stock Exchange; (xi) it has agreed to the amount of the
Solicitation Fees and the terms and conditions set forth herein with respect to
receiving such Solicitation Fees. By accepting Solicitation Fees, a Soliciting
Dealer will be deemed to have agreed to indemnify the Trust, Colonial and the
Dealer Managers against losses, claims, damages and liabilities to which the
Trust, Colonial or the Dealer Managers may become subject as a result of the
breach of such Soliciting Dealer's representations made herein and described
above.
Solicitation Fees due to eligible Soliciting Dealers will be paid
promptly after consummation of the Offer. Upon expiration of the Offer, no
Solicitation Fees will be payable to Soliciting Dealers with respect to Shares
purchased thereafter.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Dealer Manager Agreement or, if not defined therein, in
the Prospectus or the Prospectus Supplement.
This Amendment to the Selected Dealer Agreement will be governed by
the laws of the State of New York without reference to the conflict of law
principles thereof.
Please forward a copy of the confirmation page (Page A-9) of this
Amendment to the Selected Dealer Agreement to Newport Greater China Fund,
Attention: ______________ (tel. number (617)___________;
fax number (617)_____________).
Very truly yours,
Colonial Investment Services, Inc.
By:
Name:
Title:
PLEASE COMPLETE THE INFORMATION BELOW:
ACCEPTED AND CONFIRMED BY SOLICITING DEALER
Contact at Firm:
Printed Firm Name Address
Authorized Signature Area Code and Telephone Number
Name and Title Fax Number
Dated:
