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3,000,000
Shares of Beneficial Interest
in
BERTHEL GROWTH TRUST II
(a Delaware business trust)
DEALER MANAGER AGREEMENT
__________, 2000
Berthel Fisher & Company Financial Services, Inc.
100 Second Street, S.E.
Cedar Rapids, Iowa 52401
Dear Sirs:
1. INTRODUCTORY. TJB Capital Management, Inc., a
Delaware corporation (the "Corporate Trustee") has formed a business trust
organized pursuant to the Delaware Business Trust Act Berthel Growth Trust II
(the "Trust"). Berthel Fisher & Company Planning, Inc. (the "Trust Advisor")
has executed a Management Agreement agreeing to serve as the investment
adviser for the Trust. The Trust desires to increase its capital by the sale
of shares of beneficial interest in the Trust (the "Shares") in the proposed
maximum amount of 2,500,000 Shares subject to increase to 3,000,000 Shares if
additional Shares are sold pursuant to subsection (b) of Section 3 hereof.
Each subscriber (a "Subscriber") for Shares will be required to comply with
the subscription procedures set forth in the Prospectus (as herein defined),
including the manual execution, personally or through an attorney-in-fact, of
a subscription agreement (the "Subscription Agreement") substantially in the
form attached as Exhibit B to the Prospectus.
Capitalized terms not defined herein shall have their
respective meanings defined in the Prospectus or in the Declaration of Trust in
the form attached as Exhibit A to the Prospectus.
2. REPRESENTATIONS AND WARRANTIES OF THE TRUST, THE
CORPORATE TRUSTEE AND THE TRUST ADVISOR.
(a) The Trust and the Trust Advisor each represent and
warrant to you that:
(i) A registration statement on Form N-2
(Registration No. __________) with respect to the Shares,
including a preliminary prospectus, copies of which have
heretofore been delivered to you, has been prepared by the
Trust and the Trust Advisor in conformity with the
requirements of the Securities Act of 1933, as amended (the
"1933 Act") , the rules and regulations (the "1933 Act Rules
and Regulations") of the Securities and Exchange Commission
(the "Commission") under the 1933 Act, the Investment Company
Act of 1940, as amended (the "1940 Act") and the rules and
regulations (the "1940 Act Rules and Regulations") of the
Commission under the 1940 Act, has been filed with the
Commission under the 1933 Act and has become effective as of
_____________ 2000. Any such preliminary prospectus is
hereinafter called a "Preliminary Prospectus," such
registration statement, including all exhibits thereto, is
hereinafter called the "Registration Statement," the final
form of such prospectus (if different than the Preliminary
Prospectus), if filed pursuant to rule 497(b) of the 1933 Act
Rules and Regulations, is hereinafter called the "Prospectus,"
and any prospectus that is intended to comply with the
requirements of Section 10(b) of the 1933 Act, and
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any supplement or amendment thereto, is hereinafter called a
"Summary Prospectus."
(ii) The Commission has not issued an order
preventing or suspending the use of a Preliminary Prospectus,
and, at its date of issue, each Preliminary Prospectus
conformed in all material respects with the requirements of
the 1933 Act, the 1933 Act Rules and Regulations, the 1940
Act, the 1940 Act Rules and Regulations, the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission thereunder (the
"Advisers Act Rules and Regulations") and to the knowledge of
the Trust Advisor and the Trust did not include an untrue
statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; when the Registration
Statement becomes effective and at all times thereafter up to
and including the Initial Closing Date (as herein defined) and
each Subsequent Closing Date (as herein defined) the
Registration Statement and the Prospectus and any amendments
or supplements thereto and any Summary Prospectus will contain
all material statements and information required to be
included therein by the 1933 Act, the 1933 Act Rules and
Regulations, the 1940 Act, the 1940 Act Rules and Regulations,
the Advisers Act, and the Advisers Act Rules and Regulations
and will conform in all material respects to the requirements
of the 1933 Act, the 1933 Act Rules and Regulations, the 1940
Act, the 1940 Act Rules and Regulations, the Advisers Act, and
the Advisers Act Rules and Regulations; and at the time the
Registration Statement becomes effective and at all times
thereafter up to and including the Initial Closing Date and
each Subsequent Closing Date, if any, neither the Registration
Statement nor the Prospectus, nor any amendment or supplement
thereto, will to the knowledge of the Trust Advisor and the
Trust include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and
neither the Prospectus nor any Summary Prospectus nor any
supplemental sales material (when read in conjunction with the
Prospectus, whether designated only for broker-dealer use or
otherwise and whether written or otherwise) will include an
untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing
representations and warranties shall not apply to information
contained in or omitted from any Preliminary Prospectus or the
Registration Statement or the Prospectus or any such amendment
or supplement or any Summary Prospectus in reliance upon, and
in conformity with, written information furnished to the Trust
or the Trust Advisor by you specifically for use in the
preparation thereof.
(iii) After the respective dates as of which
information is given in the Registration Statement and
Prospectus, and except as set forth or contemplated in the
Prospectus, neither the Trust nor the Trust Advisor has
incurred material liabilities or obligations, direct or
contingent, nor entered into any material transactions, and
there has not been a material adverse change in the condition
(financial or otherwise), business, prospects, or results of
operations of the Trust or the Trust Advisor or a change in
the capital or long-term debt of the Trust or the capital
stock or long-term debt of the Trust Advisor, nor has the
Trust Advisor
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declared, paid, or made a dividend or distribution on its
capital stock, nor has there been a change or a development
that might result in a change in the beneficial ownership of
the capital stock of the Trust Advisor.
(iv) The financial statement, together with the
related notes, set forth in the Prospectus fairly present, on
the basis stated in the Registration Statement, the financial
position of the Trust at the respective dates therein
specified. Such statements and related notes have been
prepared in accordance with generally accepted accounting
principles except as may be set forth in the Prospectus.
(v) Deloitte & Touche LLP, who have expressed their
opinion on the audited financial statement included in the
Registration Statement, are, with respect to the Trust and the
Trust Advisor, independent public accountants as required by
the 1933 Act and the applicable published 1933 Act Rules and
Regulations.
(vi) The Declaration of Trust, as amended to the
date hereof is substantially in the form of the Declaration of
Trust attached as Exhibit A to the Prospectus. At each Closing
at which a Subscriber is to acquire Shares, such Subscriber
will have paid to the Trust the full consideration due from
him for the Shares subscribed for by him. All action required
to be taken by the Trust as a condition to the issuance and
sale of the Shares to qualified Subscribers therefor has been,
or before the Initial Closing Date and each Subsequent Closing
Date, if any, will have been, taken, including without
limitation, the due acceptance by the Trust of each
Subscriber's Subscription Agreement. Assuming that each
Subscriber will have duly authorized, executed, and delivered
a Subscription Agreement, the Shares, when offered and sold as
described in the Registration Statement and the Declaration of
Trust, will represent valid beneficial interests in the Trust,
as to which the Subscribers will have no liability in excess
of their respective Capital Contributions and their share of
the Trust's assets and undistributed profits (subject to the
obligation of a Shareholder to repay any funds wrongfully
returned or distributed to him).
(vii) The Trust is a business trust duly formed and
validly existing under the laws of the State of Delaware with
full power and authority under the Declaration of Trust and
the Delaware Act to conduct the business in which it is
engaged or proposes to engage as described in the Prospectus;
and the Trust is or will be duly formed or qualified under the
laws of each other jurisdiction, if any, in which such
formation or qualification is necessary to enable the Trust to
conduct the business in which it is engaged or proposes to
engage as described in the Prospectus.
(viii) The Trust Advisor has been duly organized and
is validly existing and in good standing as a corporation
under the laws of the State of Iowa, with power and authority
(corporate and other) to act as the Trust Advisor of the
Trust, to own or lease its properties, and to conduct its
business as described in the Prospectus; the Trust Advisor is
duly qualified to do business and in good standing as a
foreign corporation in all other jurisdictions in which its
acting as the Trust Advisor of the Trust as described in the
Prospectus, its ownership or leasing of properties, or the
conduct of its business requires such qualification or may
require such qualification and the failure to so qualify
might result in material adverse consequences to the
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Trust; and the Trust Advisor is in possession of and operating
in compliance with all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, and
orders required for the conduct of its business as described
in the Prospectus, all of which are valid and in full force
and effect. The Corporate Trustee has been duly organized and
is validly existing and in good standing as a corporation
under the laws of the State of Delaware, with power and
authority (corporate and other) to act as the corporate
trustee of the Trust, to own or lease its properties, and to
conduct its business as described in the Prospectus; the
Corporate Trustee is duly qualified to do business and in good
standing as a foreign corporation in all other jurisdictions
in which its acting as the corporate trustee of the Trust as
described in the Prospectus, its ownership or leasing of
properties, or the conduct of its business requires such
qualification or may require such qualification and the
failure to so qualify might result in material adverse
consequences to the Trust; and the Corporate Trustee is in
possession of and operating in compliance with all franchises,
grants, authorizations, licenses, permits, easements,
consents, certificates, and orders required for the conduct of
its business as described in the Prospectus, all of which are
valid and in full force and effect.
(ix) There are no legal or governmental proceedings
pending to which the Trust, the Corporate Trustee or the Trust
Advisor is a party or of which any of their respective
properties is the subject, which, if determined adversely to
the Trust, the Corporate Trustee or the Trust Advisor, would
individually or in the aggregate result in a material adverse
change in the condition (financial or otherwise), business,
prospects, or results of operations of the Trust, the
Corporate Trustee or the Trust Advisor; and, to the best of
the knowledge of the Trust, the Corporate Trustee and the
Trust Advisor, no such proceedings are threatened or
contemplated by governmental authorities or others.
(x) This Agreement has been duly and validly
authorized, executed, and delivered by or on behalf of the
Trust Advisor, the Corporate Trustee and the Trust, and
constitutes a legal, valid, and binding obligation of the
Trust, the Corporate Trustee and the Trust Advisor enforceable
in accordance with its terms.
(xi) The Trust Agreement has been duly and validly
authorized, executed, and delivered by or on behalf of the
Corporate Trustee in compliance with the terms and conditions
of the 1940 Act, the 1940 Act Rules and Regulations, the
Advisers Act, and the Advisers Act Rules and Regulations, and
constitutes a legal, valid, and binding obligation enforceable
in accordance with its terms.
(xii) On the Initial Closing Date the Management
Agreement between the Trust and the Trust Advisor will be
substantially in the form of the Management Agreement filed as
an exhibit to the Registration Statement, will have been duly
and validly authorized, executed, and delivered on behalf of
the Trust, will comply with the terms and conditions of the
1940 Act, the 1940 Act Rules and Regulations, the Advisers
Act, and the Advisers Act Rules and Regulations, and will
constitute a legal, valid and binding obligation of the Trust
enforceable in accordance with its terms.
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(xiii) The escrow agreement (the "Escrow
Agreement") among the Trust, you, and Firstar Bank, N.A.,
as escrow agent (the "Escrow Agent"), is substantially in
the form of the escrow agreement filed as an exhibit to the
Registration Statement, has been duly and validly
authorized, executed, and delivered on behalf of the Trust,
and constitutes a legal, valid and binding obligation of
the Trust enforceable in accordance with its terms.
(xiv) The execution and delivery of this Agreement,
the Declaration of Trust, the Management Agreement, and the
Escrow Agreement, the incurrence of the obligations herein and
therein set forth, and the consummation of the transactions
contemplated herein, therein, and in the Prospectus will not
result in a breach or violation of the terms or provisions of
or constitute a default under (a) any statute, (b) any
indenture, mortgage, deed of trust, note agreement, or other
agreement or instrument to which either the Trust or the Trust
Advisor is a party or by which either of them or the property
of either of them is bound, (c) the Declaration of Trust, (d)
the certificate of incorporation or bylaws of the Trust
Advisor or the Corporate Trustee, each as amended to date, or
(e) any order, rule, or regulation applicable to the Trust,
the Corporate Trustee or the Trust Advisor of any court or any
governmental body or administrative agency having jurisdiction
over the Trust or the Trust Advisor.
(xv) No consent, approval, authorization, or order
of any court or governmental authority or agency is required
for the consummation by the Trust, the Corporate Trustee and
the Trust Advisor of the transactions contemplated by this
Agreement, except such as may be required by the National
Association of Securities Dealers, Inc., (the "NASD"), or
under the 1933 Act, the 1933 Act Rules and Regulations, or
state securities or blue-sky laws.
(xvi) The Trust has elected to be treated as a
business development company under the 1940 Act and has filed
all statements and other documents with the Commission in
connection with such election that are required by the 1940
Act, the 1940 Act Rules and Regulations, the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations of the Commission under the 1934 Act;
such election has not been withdrawn by the Trust pursuant to
Section 54(c) of the 1940 Act; the Trust does not fail to meet
any requirements for it to be a business development company;
the Trust will, on the Initial Closing Date and on each
Subsequent Closing Date, if any, meet all requirements for it
to be a business development company; the Commission has not
issued an order pursuant to Section 54(c) of the Act revoking
such election or, to the best of the knowledge of the Trust
and the Trust Advisor, instituted proceedings to issue such an
order.
(xvii) There are no contracts or documents of the
Trust that are required to be filed as exhibits to the
Registration Statement by the 1933 Act, the 1933 Act Rules and
Regulations, the 1940 Act, or the 1940 Act Rules and
Regulations that have not been so filed.
(xviii) The Trust Advisor has, and at all times
through the Initial Closing Date and each Subsequent Closing
Date, if any, will have, a net worth sufficient for
classification of the Trust as a partnership for federal
income tax purposes under the
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Internal Revenue Code of 1986, as amended, or any successor
law thereto, and the regulations thereunder.
(xix) The Trust Advisor is duly registered as an
investment adviser under the Advisers Act and is not
prohibited from acting as the Trust Advisor of the Trust
as contemplated in the Prospectus.
(b) For purposes of this Agreement, any certificate
signed by the Trust Advisor and delivered to you shall be deemed a
representation and warranty by the Trust and the Trust Advisor to you as to
the matters covered thereby.
3. OFFERING AND SALE OF SHARES--INITIAL AND SUBSEQUENT
CLOSINGS.
(a) OFFERING SIZE AND AMOUNT. On the basis of the
representations, warranties, and covenants herein contained, but subject to
the terms and upon the conditions herein set forth, the Trust appoints you as
exclusive Dealer Manager during the term herein specified (the "Offering
Period") to use your best efforts to find subscribers for 2,500,000 Shares,
subject to increase pursuant to subsection (b) of this Section 3, for the
account and risk of the Trust through a public offering.
Subject to the performance by the Trust and the Trust Advisor
of their obligations to be performed hereunder, and to the completeness and
accuracy of the representations and warranties contained herein, you accept such
appointment and agree on the terms and conditions herein set forth to use your
best efforts to find during the Offering Period subscribers for the Shares at a
public offering price of $10 per Share. Each subscriber that is an individual
retirement account will be required to subscribe for at least 200 Shares (unless
a greater number is otherwise specifically required under state securities or
blue-sky laws) and each other subscriber will be required to subscribe for at
least 500 Shares. Shares will be sold in Units of 100 Shares. Subscriptions for
Shares in excess of the minimum may be made only in Units. Your appointment
hereunder, which is terminable as provided in Section 10 hereof, shall continue
until not later than the Termination Date, as defined in the Declaration of
Trust included in the Prospectus.
(b) OVER-ALLOTMENT. In addition, on the basis of the
representations, warranties, and covenants herein contained, but subject to
the terms and conditions herein set forth, you hereby agree to find
subscribers for an additional 500,000 Shares over and above the amount
indicated in subsection (a) of this Section 3, for a maximum total offering
of 3,000,000 Shares, if the Trust elects to increase the number of Shares to
be offered during the Offering Period.
(c) SOLICITING DEALERS. In connection with the
performance of your obligations under this Agreement, you may, in your sole
discretion, use the services of broker-dealers ("Soliciting Dealers") who are
members of the National Association of Securities Dealers, Inc. (NASD) and,
as compensation for their services, may pay to Soliciting Dealers an amount
up to 7.0% of the sales price of all Shares sold through them. Such amount
will be paid to Soliciting Dealers by you only out of the compensation
received by you in respect of such sales of Shares as described in Sections
3(a) and 3(b). The arrangements, if any, between you and any Soliciting
Dealer shall be set forth in a Soliciting Dealer Agreement in a form filed as
an Exhibit to the Registration Statement, unless the Trust shall consent to
other arrangements. By executing a Soliciting Dealer Agreement, the
Soliciting Dealers will agree to abide by the rules and regulations of the
National Association of Securities Dealers, Inc. (including, without
limitation, the provisions of Sections (b)(2) and (b)(3) of Rule 2810 of the
Conduct Rules of the NASD.
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(d) PROCESSING OF SUBSCRIPTION DOCUMENTS. Each person
desiring to purchase Shares is to (i) complete and manually execute a
Subscription Agreement and mail or deliver such executed Subscription
Agreement to you or any Soliciting Dealer and (ii) (a) prior to Initial
Closing, deliver to you or any Soliciting Dealer a check made payable to
"Firstar Bank, N.A. - Escrow Agent" and after Initial Closing, deliver to you
or any Soliciting Dealer a check made payable to the Trust or (b) in
accordance with the Prospectus, assure that his account with his Soliciting
Dealer contains or will contain cash or other good funds on the specified
settlement date, in each case in the amount of $10 for each Share that he
desires to purchase. Each person who authorizes his Soliciting Dealer to
debit his customer account will be notified by his Soliciting Dealer of the
settlement date for the purchase of such Shares. Each such person must have
funds to cover his subscription payment in his account on the specified
settlement date and his account will be debited on the settlement date. Each
Soliciting Dealer shall either (i) forward each check received to you by noon
of the first business day after receipt or (ii) forward the full purchase
price of the Shares subscribed for by wire transfer payable in federal funds
to the Escrow Agent (prior to the Initial Closing) or to the Trust (after the
Initial Closing) by noon after the first business day after settlement for
such funds and simultaneously send a telegram, telecopy or other appropriate
communication stating the name of each investor and the amount of such
investor's subscription funds transferred to you and the Escrow Agent or
Trust, as the case may be. Simultaneous with the transfer of any check or
funds to you or the Escrow Agent, each Soliciting Dealer shall forward the
corresponding subscription agreement to you. You shall forward each check
received by you to the Escrow Agent or to the Trust, as the case may be, by
noon of the first business day following receipt of such check. You shall
also forward each subscription agreement you receive (whether from a
Soliciting Dealer or otherwise) to the Trust for acceptance or rejection on
the first business day after receipt.
(e) (i) In recommending to a prospective investor the
purchase of Shares, you or the Soliciting Dealer shall: (x) have reasonable
grounds to believe, on the basis of information obtained from such investor
concerning such investor's investment objective, other investments, financial
situation, and needs, and any other information known by you, that (1) such
investor is or will be in a financial position appropriate to enable such
investor to realize to a significant extent the benefits described in the
Prospectus, (2) such investor has a fair-market net worth sufficient to
sustain the risks inherent in making an investment in the Trust, including
loss of investment and lack of liquidity, and (3) an investment in the Trust
is otherwise suitable for such investor; and (y) maintain documents
disclosing the basis upon which a determination of suitability was reached as
to each investor. You or the Soliciting Dealer shall inform each investor of
all pertinent facts relating to the liquidity and marketability of an
investment in Shares during the term of such investment.
(ii) You hereby acknowledge your responsibilities under
Rule 2810(b)(2) of the Conduct Rules of the NASD, and:
(A) Before participating in the public offering of
the Shares, you shall have reasonable grounds to believe,
based on information made available to you by the Trust
Advisor through the Registration Statement, the Prospectus,
and other materials, that all material facts are adequately
and accurately disclosed in the Registration Statement and the
Prospectus and provide a basis for evaluating the Trust and
investment in the Shares; and
(B) In determining the adequacy of disclosed facts
pursuant to subsection (A) immediately preceding, you shall
obtain information on material facts
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relating at a minimum to: items of compensation; tax aspects;
financial stability and experience of the sponsor of the
Trust; the Trust's conflicts and risk factors; pertinent
reports and other documents; and regulatory matters.
(f) No subscription shall be effective unless and until
accepted on behalf of the Trust by the Trust Advisor, and the Trust Advisor
reserves the right, in its sole discretion, to refrain from accepting any
subscription submitted. If acceptable subscriptions for at least 600,000
Shares shall not have been received by the Termination Date, all funds (if
any) received from Subscribers shall be returned in full, together with,
except as set forth in the Prospectus, interest earned thereon and without
deduction of escrow or other fees or expenses; and your appointment and this
Agreement shall terminate without obligation on your part or on the part of
the Trust or the Trust Advisor, except as provided in Sections 5 and 6
hereof. You agree that each person subscribing for Shares shall have the
right to receive a refund of that person's investment for a period of five
business days after the date the person receives a final Prospectus.
(g) If by the Termination Date (or such earlier time as
may be agreed upon by you and the Trust), at least 600,000 Shares shall have
been properly subscribed for, or if at an earlier time all the Shares shall
have been properly subscribed for, you shall notify the Trust Advisor of the
aggregate number of Shares for which you have received subscriptions.
Payments of the purchase price for the Shares for which you have found
Subscribers shall then be made at your offices or at such other place as
shall be agreed upon between you and the Trust Advisor, at 10:00 a.m., Cedar
Rapids, Iowa time, on the fifth full business day after the day on which you
so notify the Trust Advisor of the number of Shares subscribed for, or such
other day and time (not later than ten business days thereafter) as shall be
agreed upon between you and the Trust Advisor (the "Initial Closing Date").
(h) If fewer than all the Shares shall have been
subscribed and paid for on the Initial Closing Date, then, at such time or
times as are mutually agreed upon by you and the Trust during the Offering
Period, one or more dates may be established on which additional Subscribers
may become Shareholders of the Trust (each a "Subsequent Closing Date").
Before each Subsequent Closing Date you shall notify the Trust Advisor of the
aggregate number of additional Shares for which you have received
subscriptions, and then payment of the purchase price for the additional
Shares for which you have found Subscribers, and delivery of subscription
Agreements signed as indicated in subsection (g) with regard to such
additional Shares, shall be made at your offices or at such other place as
shall be agreed upon between you and the Trust Advisor, at 10:00 a.m., Cedar
Rapids, Iowa time, on each Subsequent Closing Date.
The term "Closing Date" refers to the Initial Closing Date or
any Subsequent Closing Date.
(i) Except as set forth in the Prospectus, interest
earned on Subscribers' funds before a Closing Date shall be paid to the
Trust, for distribution pursuant to the Declaration of Trust.
(j) As compensation for your services hereunder, the
Trust shall pay you the following:
(i) a cash commission based on a sliding
scale that is dependent upon the number of shares
purchased by a particular investor. The discount
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will be applied to the entire aggregate amount
invested by a particular investor. The discount and
selling commission is as follows:
<TABLE>
<CAPTION>
Amount Invested Commission on
by Total Amount of
an Investor Investment Discount to Investor
----------- ---------- --------------------
<S> <C> <C>
Less than $499,999 7% N/A
$500,000 to $999,999 5% 2%
$1,000,000 and more 2% 5%
</TABLE>
If a particular investor uses the same name
and brokerage account to effect multiple purchases of
Shares, all of such investor's purchases shall be
combined for purposes of computing the commission.
The commission rate thus determined shall apply to
the aggregate of the multiple purchases by such
investor.
With respect to any subscription described
in subsections (b) and (c) above, the difference
between the amount paid pursuant to subsections (b)
and (c) and 7.0% of the purchase price of the Shares
subscribed for by such subscription shall be paid by
the Trust to the investor making such subscription,
referred to in such subsections as a quantity
discount in the form of a reimbursement of a portion
of the purchase price of the Shares;
and;
(ii) an Underwriting Fee in cash equal to 2.0%
of the aggregate purchase price of Shares sold through
you; and
(iii) a Syndication Fee in cash equal to 1% of
the aggregate purchase price of shares sold through you;
provided, however, that the Trust shall not be obligated to pay you a
commission, Underwriting Fee or Syndication Fee with respect to Shares
purchased by the Trust Advisor or an affiliate of the Trust Advisor
("Management Shares"). For purposes of the foregoing, the term "affiliate"
shall have the meaning specified in Rule 405 under the 1933 Act.
Such commission and fee shall be earned and payable only
after the Trust Advisor has accepted the Subscriptions for such Shares and
the funds deposited in escrow for such Shares have been released or the funds
paid directly to the Trust have been delivered, and shall be paid to you by
check or bank wire transfer in immediately available funds on each Closing
Date with respect to the Shares (other than Management Shares) sold to
Subscribers on such Closing Date.
(k) Neither you, the Trust, nor the Trust Advisor shall,
directly or indirectly, pay or award finder's fees, commissions, or other
compensation to a person engaged by a potential investor for investment
advice as an inducement to such advisor to advise the purchase of Shares;
provided, however, that normal sales commissions payable to a registered
broker-dealer or other properly licensed person for selling Shares shall not
be prohibited by this provision.
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(l) To promote the sale of Shares, the Trust or you may
pay directly to registered representatives non-cash awards that, when
aggregated with other non-cash awards paid in that year by affiliates of the
Trust, do not exceed $100 in value per registered representative per year and
provided that the aggregate of all non-cash awards paid by anyone in
connection with this offering does not exceed $5,000.
(m) Total payments made to you and all Soliciting Dealers
in connection with the offering of Shares, including sales commissions paid
to you and to unaffiliated Soliciting Dealers and payments made for special
marketing incentives (including the aggregate value of all non-cash awards
paid directly to registered representatives), will not in the aggregate
exceed 10% of the gross proceeds of the offering.
4. COVENANTS OF THE TRUST AND THE TRUST ADVISOR. The
Trust and the Trust Advisor covenant to you that:
(a) They will use their best efforts to cause the
Registration Statement to become effective, will advise you promptly as to
the time at which the Registration Statement or any amendment thereto becomes
effective, will advise you promptly of the issuance by the Commission of a
stop order suspending the effectiveness of the Registration Statement or
preventing or suspending the use of any Summary Prospectus or of the issuance
by the Commission of an order pursuant to Section 54(c) of the 1940 Act with
respect to the Trust, or of the institution of any proceedings for such
purposes, and will use their best efforts to prevent the issuance of any such
orders and to obtain as soon as possible the lifting thereof, if issued. They
will advise you promptly of a request by the Commission for an amendment or
supplement to the Registration Statement or the Prospectus or any Summary
Prospectus or for additional information or the receipt of comments from the
Commission with respect to the Registration Statement and will not file an
amendment to the Registration Statement or supplement to the Prospectus or
any Summary Prospectus that shall not previously have been submitted to you
within a reasonable time before the proposed filing thereof or to which you
shall reasonably object in writing or which is not in compliance with the
1933 Act, the 1933 Act Rules and Regulations, the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act, or the Advisers Act Rules and
Regulations. They will advise you promptly of any proposed investments of the
Trust arising after the effective date of the Registration Statement and
before each Closing Date.
(b) They will prepare and file with the Commission,
promptly upon your request, all amendments or supplements to the Registration
Statement or the Prospectus or any Summary Prospectus that in your opinion
may be necessary to enable the continuation of sales of, or dealings in, the
Shares and will use their best efforts to cause the same to become effective
as promptly as possible. If, by the Termination Date, subscriptions for at
least 600,000 Shares shall not have been received, they will prepare and file
a post-effective amendment to the Registration Statement deregistering all of
the Shares registered under the 1933 Act and if, by the Termination Date,
subscriptions for at least 600,000 but fewer than all Shares shall have been
received, they will prepare and file a post-effective amendment to the
Registration Statement deregistering the Shares remaining unsold and, in
either case, will terminate the offering of Shares.
(c) If after the effective date of the Registration
Statement when a prospectus relating to the Shares is required to be
delivered under the 1933 Act, an event relating to or affecting the Trust,
the Trust's investment or the Trust Advisor occurs as a result of which the
Prospectus, any Summary Prospectus, or another prospectus as then in effect
would include an untrue statement of a material fact, or omit to state a
material fact necessary to make the
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<PAGE>
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary to amend the Prospectus or any
Summary Prospectus to comply with the 1933 Act, the Trust or the Trust Advisor
will promptly notify you thereof and will prepare an amended or supplemented
prospectus that will correct such statement or omissions. For purposes of this
subsection (c), the Trust and the Trust Advisor will furnish such information
with respect to themselves, the Trust's proposed investments, and the management
company as you may from time to time reasonably request.
(d) On or before each Closing Date, the Trust will
deliver to you, unless previously delivered, one signed copy of the
Registration Statement and all amendments thereto including all financial
statements and exhibits thereto, and will deliver to you such number of
copies of the Registration Statement, including such financial statements but
without exhibits, and of all amendments thereto, as you may reasonably
request. The Trust and the Trust Advisor will deliver or mail to you or upon
your order on the date of the commencement of the initial public offering,
and thereafter from time to time during the period when delivery of a
prospectus relating to the Shares is required under the 1933 Act, as many
copies of the Prospectus, in final form or as thereafter amended or
supplemented, as you may reasonably request.
(e) They will make generally available to the Trust's
shareholders as soon as practicable, but not later than seventeen months
after the effective date of the Registration Statement, an earnings statement
that will be in reasonable detail (but that need not be audited) and that
will comply with Section 11(a) of the 1933 Act, covering a period of at least
twelve months beginning after the effective date of the Registration
Statement.
(f) They will cooperate with you to enable the Shares to
be qualified for sale under the securities laws of such jurisdictions as you
may designate and at your request will make such applications and furnish
such information as may be required of them for such purpose; provided,
however, that they shall not be required to qualify to do business or to file
a general consent to service of process in any such jurisdiction. They will,
from time to time, prepare and file such statements and reports as are or may
be required to continue such qualifications in effect for so long a period as
you may reasonably request for the distribution of the Shares.
(g) They will furnish to holders of Shares annual reports
containing financial statements certified by independent public accountants
and quarterly summary financial information in reasonable detail, which may
be unaudited. So long as any Shares remain outstanding, they will deliver to
you (i) copies of each annual report of the Trust and each other report and
communication sent by the Trust or the Trust Advisor to holders of the
Shares, (ii) as soon as they are available, copies of other reports
(financial or other) and communications that the Trust or the Trust Advisor
shall publish or otherwise make available to any of the Trust's security
holders as such, and (iii) as soon as they are available, copies of reports
and financial statements furnished to or filed with the Commission.
(h) They will deliver to you, from time to time, any
Summary Prospectus and any supplemental sales material (whether designated
solely for broker-dealer use or otherwise) proposed to be used or delivered
by the Trust or the Trust Advisor in connection with the offering of Shares,
before the use or delivery to third parties of such Summary Prospectus or
such material, and they will not use or deliver to third parties any such
Summary Prospectus or such material to which you shall object; provided,
however, that your failure to object shall in no event be deemed an approval
of any such Summary Prospectus or such material.
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5. PAYMENT OF EXPENSES. Whether or not this Agreement
becomes effective or the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Trust (or the Trust Advisor
on its behalf) shall pay all expenses incident to the performance of the
obligations of the Trust and of the Trust Advisor under this Agreement,
including, but not limited to: all expenses and taxes incident to the sale
and delivery of the Shares; all expenses incident to the registration of the
Shares under the 1933 Act and the printing of copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus, any Summary
Prospectus, the supplemental sales material, any amendments or supplements
thereto, the blue-sky memorandum, this Agreement, the Escrow Agreement, the
Safekeeping Agreement, the Management Agreement, and the Declaration of Trust
and furnishing the same to you; all filing and printing fees and expenses
(including legal fees and disbursements of counsel retained for the purposes
of such qualification) incurred in connection with qualification of the
Shares for sale under the laws of such jurisdictions as you may designate;
all fees and expenses paid or incurred in connection with filings made with
the NASD; all fees and expenses of the transfer agent and registrar for the
Shares, and the custodian of the Trust's securities; all fees and expenses
paid or incurred in connection with the execution of the Declaration of
Trust, the preparation, execution and filing of the Trust's Declaration of
Trust, and all amendments or supplements thereto; all fees and expenses
incurred in qualifying the Trust to transact business outside of the State of
Delaware; the fees and disbursements of counsel to and accountants of the
Trust and the Trust Advisor; and all other costs and expenses incident to the
performance of the obligations of the Trust and the Trust Advisor hereunder
which are not otherwise specifically provided for in this Section 5.
Notwithstanding the foregoing, you shall not be reimbursed for the fees and
expenses of your counsel, except such fees and expenses as are incurred with
such counsel on behalf of the Trust in qualification of the Shares under
state "blue sky" laws.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Trust and
the Trust Advisor agree to indemnify and hold harmless you and each person,
if any, who controls you within the meaning of the 1933 Act, and each
Soliciting Dealer and each person, if any, who controls a Soliciting Dealer
within the meaning of the 1933 Act, and the Trust and the Trust Advisor agree
to indemnify and hold harmless you and each person, if any, who controls you
within the meaning of the 1933 Act against any losses, claims, damages,
liabilities, or expenses (including the reasonable cost of investigating and
defending against any claims therefor and counsel fees incurred in connection
therewith), joint or several, which may be based upon the 1933 Act, or any
other statute or at common law, on the ground or alleged ground that any
Preliminary Prospectus, the Registration Statement, the Prospectus (or any
Preliminary Prospectus, the Registration Statement, the Prospectus, or any
Summary Prospectus as from time to time amended or supplemented), or any
supplemental sales material supplied or approved in writing by the Trust or
the Trust Advisor (whether written or otherwise), provided that such
supplemental sales material is accompanied with or preceded by a Prospectus,
(i) includes or allegedly includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or (ii) violates Section 206(4)
of the Advisers Act or Rule 206(4)-1 promulgated thereunder, unless in either
case such statement or omission was made in reliance upon, and in conformity
with, written information furnished to the Trust or the Trust Advisor by you
or a Soliciting Dealer specifically for use in the preparation thereof;
provided that in no case is the Trust or the Trust Advisor, as the case may
be, to be liable with respect to any claims made against you, any Soliciting
Dealer or any such controlling person unless you, such Soliciting Dealer or
such controlling person shall have notified the Trust or the Trust Advisor,
as the case may be, in writing within a reasonable time after the summons or
other first legal process giving information of the nature of the claim shall
have been served upon you, such Soliciting Dealer or such controlling person,
but failure to notify the Trust or the Trust Advisor, as the case may be, of
any such claim shall not relieve it from any liability which it may have to
you, such Soliciting Dealer or such controlling person otherwise than on
account of the indemnity agreement contained in this Section. The Trust or
the Trust Advisor, as the case may be, shall be entitled to
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participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but, if the
Trust or the Trust Advisor elects to assume the defense, such defense shall
be conducted by counsel chosen by it. If the Trust or the Trust Advisor
elects to assume the defense of any such suit and retain such counsel, you,
such Soliciting Dealer or such controlling person or persons, defendant or
defendants in the suit, may retain additional counsel but shall bear the fees
and expenses of such counsel unless (i) the Trust or Trust Advisor, as the
case may be, shall have specifically authorized the retaining of such counsel
or (ii) the parties to such suit include you, such Soliciting Dealer or such
controlling person or persons, and the Trust or the Trust Advisor, as the
case may be, and you, such Soliciting Dealer or such controlling person or
persons have been advised by counsel that one or more legal defenses may be
available to you or to them which may not be available to the Trust or the
Trust Advisor, as the case may be, in which case the Trust or the Trust
Advisor, as the case may be, shall not be entitled to assume the defense of
such suit notwithstanding its obligation to bear the fees and expenses of
such counsel. This indemnity agreement shall be in addition to any liability
which the Trust or the Trust Advisor might otherwise have. Any
indemnification is recoverable only out of Trust net assets and not from
Shareholders.
(b) You and each Soliciting Dealer agree, severally and
not jointly, to indemnify and hold harmless the Trust, each Trustee, the
Trust Advisor, each of the Trust Advisor's directors, each of the Corporate
Trustee's or Trust Advisor's officers who have signed the Registration
Statement and each person, if any, who controls the Trust or the Trust
Advisor within the meaning of the 1933 Act against any losses, claims,
damages, liabilities or expenses (including, unless you elect to assume the
defense, the reasonable cost of investigating and defending against any
claims therefor and counsel fees incurred in connection therewith), joint or
several, which may be based upon the 1933 Act, or any other statute or at
common law, on the ground or alleged ground that any Preliminary Prospectus,
the Registration Statement, or the Prospectus (or any Preliminary Prospectus,
the Registration Statement, or the Prospectus, as from time to time amended
and supplemented) includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, but only insofar as any such
statement or omission was made in reliance upon, and in conformity with,
written information furnished to the Trust or the Trust Advisor by you or
such Soliciting Dealer specifically for use in the preparation thereof;
provided, however, that in no case are you or a Soliciting Dealer to be
liable with respect to any claims made against the Trust, a Trustee, or a
person against whom the action is brought unless the Trust, such Trustee, or
such person shall have notified you or such Soliciting Dealer in writing
within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Trust, such Trustee, or such person, but failure to notify you or such
Soliciting Dealer of such claim shall not relieve you or such Soliciting
Dealer from any liability that you or such Soliciting Dealer may have to the
Trust, such Trustee, or such person otherwise than on account of the
indemnity agreement contained in this Section. You and each Soliciting Dealer
shall be entitled to participate at your and his expense, respectively, in
the defense, or if you or he so elect(s) , to assume the defense of any suit
brought to enforce any such liability, but, if you or he elect(s) to assume
the defense, such defense shall be conducted by counsel chosen by you or him.
If you or such Soliciting Dealer elect(s) to assume the defense of any such
suit and retain such counsel, the Trust, the Trustees, said officers and
directors, and any controlling person or persons, defendant or defendants in
the suit, shall bear the fees and expenses of any additional counsel so
retained. You or such Soliciting Dealer shall not be liable to indemnify any
person for any settlement of any such claim effected without your or his
consent. This indemnity agreement shall be in addition to any liability that
you or such Soliciting Dealer might otherwise have.
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(c) If the indemnification provided for in this Section 6
is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) above in respect of any losses, claims, damages, liabilities,
or expenses (or actions in respect thereof) referred to herein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities,
or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Trust and the
Trust Advisor on the one hand and the Soliciting Dealers on the other or the
Trust Advisor on the one hand and you on the other, as the case may be, from
the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Trust and the Trust
Advisor on the one hand and the Soliciting Dealers on the other or the Trust
Advisor on one hand and you on the other, as the case may be, in connection
with the statements or omissions that resulted in such losses, claims,
damages, liabilities or expenses (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Trust and the Trust Advisor on the one hand and the Soliciting Dealers
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
and the Trust Advisor bear to the total selling commissions received by the
Soliciting Dealers. The relative benefits received by the Trust Advisor on
the one hand and you 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 and the Trust Advisor bear the total selling
commissions received by you. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Trust, the Trust
Advisor, you or the Soliciting Dealers and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission. The Trust, the Trust Advisor, you and the Soliciting
Dealers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities, or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such claim. Notwithstanding the provisions of
this subsection (c), neither you nor a Soliciting Dealer shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares distributed to the public by you or such Soliciting Dealer
exceeds the amount of any damages that you or such Soliciting Dealer have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(d) Notwithstanding any other provision of this Agreement:
(i) No provision of this Agreement (including,
without limitation, subsections (a) and (c) of this Section
6) shall allow indemnification to you, a Soliciting Dealer
or any person who controls you or a Soliciting Dealer
within the meaning of the 1933 Act against any liability,
whether or not there has been an adjudication of liability,
to the Trust or its partners to which you, a Soliciting
Dealer or any such controlling person would otherwise be
subject by reason of (A) willful misfeasance, (B) bad
faith, or (C) gross negligence, in the performance of your
or
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any such person's respective duties under this Agreement,
or by reason of (D) reckless disregard of your or such
person's respective obligations and duties under this
Agreement (any of (A) through (D) being herein referred to
as "Disabling Conduct"). Further, the advancement of Trust
funds to a Sponsor or its Affiliates for legal expenses and
other costs incurred as result of any legal action for
which indemnification is being sought is permissible only
if at least one of the following conditions is satisfied:
(i) the Indemnitee provides appropriate security for the
undertaking; (ii) the Trust is insured against losses or
expenses of defense or settlement so that the advances may
be recovered; or (iii) either a Majority of the Independent
Trustees who are not parties to the action, suit or
proceeding or independent legal counsel in a written
opinion determines, based upon a review of the then readily
available facts, that there is reason to believe that the
Indemnitee will be found to be entitled to indemnification
under this agreement. In so doing, it shall not be
necessary to employ hearing or trial-like procedures.
Notwithstanding the foregoing, the advancement of Trust
funds to an Indemnitee for legal expenses and other costs
incurred as a result of any legal action for which
indemnification is being sought is permissible only if all
of the following conditions are satisfied: (a) the legal
action relates to acts or omissions with respect to the
performance of duties or services on behalf of the Trust;
(b) the legal action is initiated by a third party who is
not a Shareholder, or the legal action is initiated by a
Shareholder and a court of competent jurisdiction
specifically approves such advancement; and (c) the Sponsor
or its Affiliates undertake to repay the advanced funds to
the Trust, together with the applicable legal rate of
interest thereon, in cases in which such person is found
not to be entitled to indemnification.
(ii) No indemnification shall be allowed to you, a
Soliciting Dealer or any such controlling person under this
Agreement unless one or more of the following conditions
are met: (A) a court or other body before which the
proceeding was brought has reached a final decision on the
merits that the person to be indemnified (the "Indemnitee")
was not liable by reason of Disabling Conduct; (B) in the
absence of such a decision, there has been a reasonable
determination, based upon a review of the facts, that the
Indemnitee was not liable by reason of Disabling Conduct,
by (1) the vote of a majority of the Independent Trustees
of the Trust who are not parties to the proceeding or (2)
independent legal counsel in a written opinion; (C) there
has been a successful adjudication on the merits of each
count involving alleged securities law violations as to the
particular indemnitee; (D) such claims have been dismissed
with prejudice on the merits by a court of competent
jurisdiction as to the particular indemnitee; or (E) a
court of competent jurisdiction approves a settlement of
the claims against a particular indemnitee and finds that
indemnification of the settlement and related costs should
be made, and the court of law considering the request for
indemnification has been advised of the position of the
Securities and Exchange Commission and the published
position of any state securities regulatory authority in
which Shares were offered or sold as to indemnification for
violations of securities laws.
7. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES,
ETC. The respective indemnities, covenants, agreements, representations,
warranties, and other statements of you, the Trust and the Trust Advisor, as
set forth in this Agreement or made by them respectively pursuant to this
Agreement shall remain in full force and effect, regardless of any
investigation made by or
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on behalf of you, the Trust and the Trust Advisor, or any of the officers or
directors of the Trust Advisor or any controlling person, and shall survive
delivery of and payment for the Shares.
8. CONDITIONS TO YOUR OBLIGATIONS. Your obligations
hereunder are subject to the accuracy, at and (except as otherwise stated
herein) as of the date hereof and at and as of each closing Date, of the
representations and warranties made herein by the Trust and the Trust
Advisor, to the compliance at and as of each Closing Date by the Trust and
the Trust Advisor with their covenants and agreements herein contained and
other provisions hereof to be satisfied on or before each Closing Date, and
to the following additional conditions:
(a) The Registration Statement shall become effective and
no stop order suspending the effectiveness thereof or preventing or
suspending the use of any Summary Prospectus shall have been issued and no
proceedings for such purpose shall have been initiated or, to the knowledge
of the Trust, the Trust Advisor, or you, threatened by the Commission, and
any request for additional information on the part of the Commission (to be
included in the Registration Statement or the Prospectus or otherwise) shall
have been complied with.
(b) You shall not have stated in writing on or before a
Closing Date to the Trust or the Trust Advisor that the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or any
Summary Prospectus contains an untrue statement of fact that, in your
opinion, is material, or omits to state a fact that, in your opinion, is
required to be stated therein or is necessary to make the statements therein
not misleading.
(c) You shall have received from Bradley & Riley PC,
their opinion or opinions dated the applicable Closing Date, with respect to
the status of the Trust and the Trust Advisor, the validity of the Shares,
the Registration Statement, and the Prospectus, and such other related
matters as you may reasonably request, and the Trust and the Trust Advisor
shall have furnished to such counsel such documents as they may reasonably
request for the purpose of enabling them to pass upon such matters.
(d) You shall have received a certificate, dated the
applicable Closing Date, of the President of the Trust Advisor to the effect
that:
(i) No stop order suspending the effectiveness of
the Registration Statement has been issued, and, to the
best of his knowledge, no proceedings for such purpose have
been instituted or are pending or contemplated under the
1933 Act;
(ii) Neither any Preliminary Prospectus, as of its
date, nor the Registration Statement nor the Prospectus,
nor any amendment or supplement thereto, as of the time
when the Registration Statement became effective and at all
times subsequent thereto up to the delivery of such
certificate, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading;
(iii) After the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as set forth or contemplated in the
Prospectus, neither the Trust nor the Trust Advisor has
incurred material liabilities or obligations, direct or
contingent, nor entered into material transactions, and
there has not been a material adverse change in the
condition (financial or
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otherwise) , business, prospects, or results of operations
of the Trust or the Trust Advisor, or any change in the
capital or long-term debt of the Trust Advisor, nor has the
Trust Advisor declared, paid, or made a dividend or
distribution on its capital stock, nor has there been a
change or a development that might result in a change in
the ownership of the capital stock of the Trust Advisor;
(iv) To the best of the knowledge of the signers,
the representations and warranties of the Trust and the
Trust Advisor in this Agreement are true and correct at and
as of the applicable Closing Date, and the Trust and the
Trust Advisor have complied with all the agreements and
satisfied all the conditions on their part to be performed
or satisfied on or before such Closing Date; and
(v) Between the date of this Agreement and the
applicable Closing Date, the business and operations
conducted by the Trust and the Trust Advisor have not
sustained a loss by strike, fire, flood, accident or other
calamity (whether or not insured) of such a character as to
interfere materially with the conduct of their respective
business and operations.
(e) You shall have received a certificate, dated the
applicable Closing Date, of the President of the Corporate Trustee to the
effect that, to the best of his knowledge, the representations and warranties
of the Corporate Trustee in this Agreement are true and correct at and as of
such Closing Date.
(f) You shall have received from Bradley & Riley PC, an
opinion dated the applicable Closing Date to the effect that the Trust will
be treated as a partnership, and not as an association taxable as a
corporation, for federal income tax purposes and that they reaffirm as of
such Closing Date their opinion filed as Exhibit 2.n-2 to the Registration
Statement.
(g) The Trust, the Trust Advisor and the Corporate
Trustee shall have furnished to you such additional certificates as you may
have reasonably requested as the accuracy, at and as of the applicable
Closing Date, of the representations and warranties made herein by them, as
to compliance, at and as of such Closing Date, by them with their covenants
and agreements herein contained and other provisions hereof to be satisfied
on or before such Closing Date, and as to other conditions to your
obligations hereunder.
If any of the conditions hereinabove provided for in this
Section 8 shall not have been satisfied when and as required by this
Agreement, this Agreement may be terminated by you by notifying the Trust of
such termination in writing or by telegram on or before the applicable
Closing Date, but you shall be entitled to waive any of such conditions.
9. EFFECTIVE DATE. This Agreement shall become effective
at 10:00 a.m., Cedar Rapids, Iowa time, on the first full business day
following the effective date of the Registration Statement, or at such
earlier time after the effective date of the Registration Statement as you in
your discretion shall first release the Shares for offering to the public;
provided, however, that the provisions of Sections 5 and 6 shall at all times
be effective.
10. TERMINATION. This Agreement (except for the
provisions of Section 5) may be terminated by the Trust at any time before it
becomes effective in accordance with Section 9 by notice to you and may be
terminated by you at any time before it becomes effective in accordance with
Section 9 by notice to the Trust. In the event of a termination of this
Agreement under this or
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any other provision of this Agreement, there shall be no liability of any
party to this Agreement to any other party other than as provided in Sections 5
and 6.
This Agreement may be terminated by you after it becomes
effective by notice to the Trust (i) if on or before a Closing Date trading
in securities on the New York or American Stock Exchange shall have been
suspended or minimum or maximum prices shall have been established on either
such exchange, or a banking moratorium shall have been declared by United
States authorities; (ii) if on or before a Closing Date there shall have been
an outbreak of hostilities between the United States and a foreign power or
of another insurrection of armed conflict involving the United States which,
in your judgment, makes it impracticable or inadvisable to offer or sell the
Shares; (iii) if there shall have been a development involving particularly
the business or properties or securities of the Trust or the Trust Advisor or
the transactions contemplated by this Agreement that, in your judgment, makes
it impracticable or inadvisable to offer or deliver the Shares on the terms
contemplated by the Prospectus; or (iv) if there shall be litigation pending
or threatened, that, in your judgment, makes it impracticable or inadvisable
to offer or deliver the Shares on the terms contemplated by the Prospectus.
11. NOTICES. All communications hereunder shall be in
writing and, (a) if sent to you, shall be mailed, delivered, or telegraphed
and confirmed to you at your address first above given in this Agreement, and
(b) if sent to the Trust or the Trust Advisor, shall be mailed, delivered, or
telegraphed and confirmed to the following: c/o Leslie D. Smith, 701 Tama
Street, Building B, PO Box 609, Marion, Iowa 52302-0609.
12. SUCCESSORS. This Agreement shall inure to the benefit
of and be binding upon you, the Trust and the Trust Advisor, and their
respective successors and legal representatives. Nothing expressed in this
Agreement is intended or shall be construed to give a person other than the
persons mentioned in the preceding sentence a legal or equitable right,
remedy, or claim under or in respect of this Agreement or provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons
and for the benefit of no other person; except that the representations,
warranties, covenants, agreements, and indemnities of the Trust and the Trust
Advisor contained in this Agreement shall also be for the benefit of the
person or persons, if any, who control you within the meaning of Section 15
of the 1933 Act, and your indemnities shall also be for the benefit of each
director of the Trust Advisor, each of its officers who has signed the
Registration Statement, and the person or persons, if any, who control the
Trust and the Trust Advisor within the meaning of Section 15 of the 1933 Act.
13. APPLICABLE LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Iowa.
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If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for such
purpose, whereupon this letter and your acceptance shall constitute a binding
agreement between us.
Very truly yours,
BERTHEL GROWTH & INCOME TRUST I
By: BERTHEL FISHER & COMPANY PLANNING, INC.
Trust Advisor
By
----------------------------------
HENRY ROYER, President
By: TJB CAPITAL MANAGEMENT, INC.
Corporate Trustee
By
----------------------------------
THOMAS J. BERTHEL, Chief
Executive Officer
Accepted and delivered
as of the date first
above written.
BERTHEL FISHER & COMPANY FINANCIAL SERVICES, INC.
By
---------------------------------
DWIGHT E. WHEELAN, President
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