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<SEC-DOCUMENT>0001099343-05-000027.txt : 20050711
<SEC-HEADER>0001099343-05-000027.hdr.sgml : 20050711
<ACCEPTANCE-DATETIME>20050711141352
ACCESSION NUMBER:		0001099343-05-000027
CONFORMED SUBMISSION TYPE:	N-2
PUBLIC DOCUMENT COUNT:		17
FILED AS OF DATE:		20050711
DATE AS OF CHANGE:		20050711

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BOULDER GROWTH & INCOME FUND
		CENTRAL INDEX KEY:			0000102426
		IRS NUMBER:				132729672
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-126503
		FILM NUMBER:		05947722

	BUSINESS ADDRESS:	
		STREET 1:		1680 38TH STREET
		STREET 2:		SUITE 800
		CITY:			BOULDER
		STATE:			CO
		ZIP:			80301
		BUSINESS PHONE:		3034445483

	MAIL ADDRESS:	
		STREET 1:		1680 38TH STREET
		STREET 2:		SUITE 800
		CITY:			BOULDER
		STATE:			CO
		ZIP:			80301

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	USLIFE INCOME FUND INC
		DATE OF NAME CHANGE:	19920703

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BOULDER GROWTH & INCOME FUND
		CENTRAL INDEX KEY:			0000102426
		IRS NUMBER:				132729672
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1130

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-02328
		FILM NUMBER:		05947723

	BUSINESS ADDRESS:	
		STREET 1:		1680 38TH STREET
		STREET 2:		SUITE 800
		CITY:			BOULDER
		STATE:			CO
		ZIP:			80301
		BUSINESS PHONE:		3034445483

	MAIL ADDRESS:	
		STREET 1:		1680 38TH STREET
		STREET 2:		SUITE 800
		CITY:			BOULDER
		STATE:			CO
		ZIP:			80301

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	USLIFE INCOME FUND INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>registrationstmnt.txt
<DESCRIPTION>AMPS REGISTRATION STATEMENT
<TEXT>

As filed with the Securities and Exchange Commission on July 8, 2005.

Securities Act Registration No. 333-__________

Investment Company Registration No. 811-7390



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM N-2

           REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
                        Pre-Effective Amendment No. ___ [  ]
                       Post-Effective Amendment No. ___ [  ]
                                     and/or
                          REGISTRATION STATEMENT UNDER
                     THE INVESTMENT COMPANY ACT OF 1940 [X]
                               AMENDMENT NO. 9 [X]

                       Boulder Growth & Income Fund, Inc.
               (Exact Name of Registrant as Specified In Charter)

                           1680 38th Street, Suite 800
                             Boulder, Colorado 80301
                    (Address of Principal Executive Offices)

                                 (303) 444-5483
              (Registrant's Telephone Number, including Area Code)

                             Stephen C. Miller, Esq.
                        Boulder Investment Advisers, LLC
                           1680 38th Street, Suite 800
                             Boulder, Colorado 80301

                     (Name and Address of Agent for Service)

                                   Copies to:

                             Arthur L. Zwickel, Esq.
                     Paul, Hastings, Janofsky & Walker, LLP
                       515 South Flower Street, 25th Floor
                              Los Angeles, CA 90071


APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:  As soon as practicable  after the
effective date of this Registration Statement.

If any securities  being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities  offered in connection with a dividend  reinvestment plan, check
the following box. [ ]

<TABLE>
<CAPTION>

                                  CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

<S>                                                    <C>             <C>                  <C>                 <C>
                 Title of Securities                   Amount Being    Proposed             Proposed            Amount of
                 Being Registered                      Registered      Maximum Offering     Maximum Aggregate   Registration Fee
                                                                       Price per Unit       Offering Price

Shares of  Preferred  Stock,  par value  $25,000  per
share...............................................   1,000 shares    $25,000              $25,000,000         $2,942.50
</TABLE>

     The registrant  hereby amends this  Registration  Statement on such date or
     dates as may be necessary to delay its effective  date until the Registrant
     shall  file  a  further  amendment  that  specifically   states  that  this
     Registration Statement shall thereafter become effective in accordance with
     Section  8(a) of the  Securities  Act of 1933,  as  amended,  or until this
     Registration   Statement  shall  become  effective  on  such  date  as  the
     Securities and Exchange  Commission,  acting pursuant to said Section 8(a),
     may determine.

<PAGE>


                       BOULDER GROWTH & INCOME FUND, INC.

                                     Form N2

                              CROSS REFERENCE SHEET

<TABLE>
<S>        <C>                                                                   <C>

Items In
Part A     Caption                                                               Location in Prospectus

Item 1.    Outside Front Cover.................................................. Front Cover Page

Item 2.    Inside Front and Outside Back Cover Page............................. Front Cover Page

Item 3.    Fee Table and Synopsis............................................... Prospectus Summary and Fee Table

Item 4.    Financial Highlights................................................. Financial Highlights (Unaudited)

Item 5.    Plan of Distribution................................................. Front Cover Page;  Prospectus Summary; The Auction;
                                                                                 Underwriting

Item 6.    Selling Shareholders................................................. Not Applicable

Item 7.    Use of Proceeds...................................................... Use of Proceeds

Item 8.    General Description of the Registrant................................ Cover   Page;   Prospectus   Summary;   The   Fund;
                                                                                 Investment   Objective  and  Policies;   Investment
                                                                                 Philosophy;  Risk  Factors;  Determination  of  Net
                                                                                 Asset Value;  Capitalization  of the Fund and Other
                                                                                 Matters

Item 9.    Management........................................................... Prospectus   Summary;   Management   of  the  Fund;
                                                                                 Portfolio Contents; Description of Preferred Shares

Item 10.   Capital Stock , Long-Term Debt, and Other Securities................. Capitalization;  Description  of Preferred  Shares;
                                                                                 The Auction;  Capitalization  of the Fund and Other
                                                                                 Matters; Federal Income Tax Matters

Item 11.   Defaults and Arrears on Senior Securities...........................  Not Applicable

Item 12.   Legal Proceedings.................................................... Not Applicable

Item 13.   Table of Contents of the Statement of Additional                      Table of Contents of the  Statement  of  Additional
                                                                                 Information
           Information..........................................................

<PAGE>

Items In
Part B      Caption                                                              Location in Statement of Additional Information


Item 14.    Cover Page.........................................................  Front Cover Page

Item 15.    Table of Contents..................................................  Front Cover Page

Item 16.    General Information and History....................................  Not Applicable

Item 17.    Investment Objective and Policies..................................  Investment   Objective  and  Policies;   Investment
                                                                                 Philosophy;

Item 18.    Management.........................................................  Management of the Fund;

Item 19.    Control Persons and Principal Holders of Securities................  Management  of  the  Fund;  Security  Ownership  of
                                                                                 Certain  Beneficial  Owners;  Ownership of the Fund
                                                                                 by Directors

Item 20.    Investment Advisory and Other Services.............................  Management  of  the  Fund;   Compensation   to  the
                                                                                 Advisers and  Administrator;  Factors Considered by
                                                                                 the   Independent   Directors  in   Approving   the
                                                                                 Investment   Advisory   Agreements;   Duration  and
                                                                                 Termination; Conflicts of Interest

Item 21.    Brokerage Allocation and Other Practices...........................  Portfolio  Transactions,  Brokerage  Allocation and
                                                                                 Other Practices

Item 22.    Tax Status.........................................................  Federal Income Tax Matters

Item 23.    Financial Statements...............................................  Financial Statements
</TABLE>

PART C OTHER INFORMATION

Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C to this Registration Statement.


<PAGE>


THE  INFORMATION  IN THIS  PROSPECTUS  IS NOT  COMPLETE  AND MAY BE  CHANGED.  A
REGISTRATION  STATEMENT  RELATING  TO THE  SECURITIES  HAS BEEN  FILED  WITH THE
SECURITIES AND EXCHANGE COMMISSION.  WE MAY NOT SELL THESE SECURITIES UNTIL THIS
REGISTRATION  STATEMENT IS  EFFECTIVE.  THIS  PROSPECTUS IS NOT AN OFFER TO SELL
THESE  SECURITIES AND IT IS NOT  SOLICITING AN OFFER TO BUY THESE  SECURITIES IN
ANY STATE WHERE THE OFFER, SOLICITATION OR SALE IS NOT PERMITTED.

                              SUBJECT TO COMPLETION

                    PRELIMINARY PROSPECTUS DATED JULY 8, 2005


                                   PROSPECTUS

                                   $25,000,000
                       BOULDER GROWTH & INCOME FUND, INC.
              Auction Market Preferred Shares ("Preferred Shares")

                                  1,000 Shares
                    Liquidation Preference $25,000 Per Share


The Boulder  Growth & Income Fund,  Inc. (the "Fund") is offering  1,000 Auction
Market  Preferred  Shares.  The shares are  referred  to in this  prospectus  as
"Preferred  Shares."  The  Fund  is  a  closed-end,  non-diversified  management
investment company.

Investment Objective.  The Fund's investment objective is total return. The Fund
seeks to produce both income and long-term capital  appreciation by investing in
a portfolio of equity and debt securities.  The Fund invests primarily in common
stocks,  including  dividend  paying  common  stocks  such as  those  issued  by
utilities,  real estate  investment  trusts ("REITs") and closed-end  registered
investment  companies.  The Fund also invests in fixed income securities such as
U.S.  government  securities,  preferred  stocks  and  bonds.  The Fund  invests
primarily  in  securities  of  U.S.-based  companies  and to a lesser  extent in
foreign  equity  securities  and  sovereign  debt, in each case  denominated  in
foreign  currency.  The Fund has no  restrictions  on its  ability  to invest in
foreign  securities.  The Fund is  concentrated  in REITs,  which  means it must
invest  more than 25% of its total  assets  in REITs and  companies  in the real
estate  industry.  No  assurance  can be given  that the Fund will  achieve  its
investment objective.

Investment Advisers.  Boulder Investment Advisers,  LLC ("BIA") and Stewart West
Indies  Trading  Company,   Ltd.  d/b/a  Stewart  Investment   Advisers  ("SIA")
(collectively the "Advisers") act as the co-investment advisers to the Fund. The
address of the Fund and BIA is 1680 38th Street,  Suite 800,  Boulder,  Colorado
80301. The address of SIA is Bellerive, Queen Street, St. Peter, Barbados.

INVESTING IN THE PREFERRED SHARES INVOLVES RISKS THAT ARE DESCRIBED IN THE "RISK
FACTORS" SECTION  BEGINNING ON PAGE 23 OF THIS PROSPECTUS.  THE MINIMUM PURCHASE
AMOUNT OF THE PREFERRED SHARES IS $25,000.

NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION  NOR  ANY  STATE  SECURITIES
COMMISSION  HAS APPROVED OR DISAPPROVED  THESE  SECURITIES OR DETERMINED IF THIS
PROSPECTUS  IS TRUTHFUL OR  COMPLETE.  ANY  REPRESENTATION  TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<TABLE>
<S>                                                              <C>            <C>
                                                                 PER SHARE      TOTAL
                                                               -------------- -------------

Public offering price (1).................................       $25,000        $25,000,000

Sales load................................................

Estimated offering expenses...............................

Proceeds, after expenses, to the Fund.....................
</TABLE>


(1)  The  public  offering  price per share will be  increased  by the amount of
     dividends, if any, that have accumulated from the date the Preferred Shares
     are first issued.

The underwriter is offering the Preferred Shares subject to various  conditions.
The  underwriter  expects to deliver  the  Preferred  Shares to  purchasers,  in
book-entry form,  through the facilities of The Depository Trust Company ("DTC")
on or about _________, 2005.

__________________, 2005

[Lead Underwriter - Full Name]


<PAGE>


You should read this  prospectus,  which sets forth  concisely  the  information
about the Fund  that a  prospective  investor  ought to know  before  investing,
before  deciding  whether to invest in the Preferred  Shares,  and retain it for
future  reference.  A Statement of Additional  Information  dated July __, 2005,
containing  additional  information  about the  Fund,  has been  filed  with the
Securities  and  Exchange  Commission  and is  incorporated  by reference in its
entirety  into this  prospectus.  You can  review the table of  contents  of the
Statement  of  Additional  Information  on page 48 of this  prospectus.  You may
request a free copy of the  Statement of  Additional  Information  or the Fund's
annual and semi-annual  reports,  request other  information  about the Fund, or
make shareholder  inquiries by calling (800) 331-1710 or by writing to the Fund.
The Fund's  Statement  of  Additional  Information  and  annual and  semi-annual
reports   are  also   available   free  of   charge   on  the   Fund's   website
(http://www.boulderfunds.net)  and on the Securities  and Exchange  Commission's
website  (http://www.sec.gov),  which also contains other  information about the
Fund. You may also email requests for these documents to  publicinfo@sec.gov  or
make a request in writing to the  Securities  and Exchange  Commission's  Public
Reference Section,  Washington,  D.C. 20549-0102. The Fund's registration number
under the  Investment  Company  Act of 1940,  as  amended  (the  "1940  Act") is
811-02328.

The Preferred  Shares do not  represent a deposit or obligation  of, and are not
guaranteed or endorsed by, any bank or other insured depository  institution and
are not federally  insured by the Federal  Deposit  Insurance  Corporation,  the
Federal Reserve Board or any other government agency.

The Fund is  offering  1,000  Preferred  Shares.  The  Preferred  Shares  have a
liquidation  preference  of $25,000  per  share,  plus any  accumulated,  unpaid
dividends. The Preferred Shares also have priority over the Fund's common shares
as to distribution of assets, as described in this prospectus. It is a condition
of closing this offering  that the Preferred  Shares be assigned a rating of Aaa
by Moody's Investor Services, Inc. ("Moody's") and AAA by Fitch, Inc. ("Fitch").

The dividend rate for the Preferred  Shares for the initial dividend period will
be ___%. The initial  dividend period for the Preferred  Shares is from the date
of issuance through  ____________,  2005. For subsequent periods,  the Preferred
Shares will pay  dividends  based on a rate set at auction,  usually  held every
twenty-eight  days.  Prospective  purchasers should carefully review the auction
procedures described in this prospectus and should note: (1) a buy order (called
a "bid order") or sell order is a  commitment  to buy or sell  Preferred  Shares
based on the results of an auction;  and (2) purchases and sales will be settled
on the next business day after the auction.

THE PREFERRED SHARES WILL NOT BE LISTED ON AN EXCHANGE. YOU MAY ONLY BUY OR SELL
PREFERRED  SHARES THROUGH AN ORDER PLACED AT AN AUCTION WITH OR THROUGH  CERTAIN
BROKER-DEALERS  OR IN A SECONDARY MARKET  MAINTAINED BY CERTAIN  BROKER-DEALERS.
THESE  BROKER-DEALERS  ARE NOT REQUIRED TO MAINTAIN THIS MARKET,  AND IT MAY NOT
PROVIDE YOU WITH LIQUIDITY.


<PAGE>

<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
<S>                                                                                                              <C>
PRIVACY PRINCIPLES OF THE FUND....................................................................................3
PROSPECTUS SUMMARY................................................................................................4
FINANCIAL HIGHLIGHTS (UNAUDITED).................................................................................17
THE FUND.........................................................................................................17
USE OF PROCEEDS..................................................................................................17
CAPITALIZATION...................................................................................................18
INVESTMENT OBJECTIVE AND POLICIES................................................................................18
INVESTMENT PHILOSOPHY............................................................................................20
PORTFOLIO CONTENTS...............................................................................................20
RISK FACTORS.....................................................................................................23
MANAGEMENT OF THE FUND...........................................................................................27
DESCRIPTION OF PREFERRED SHARES..................................................................................33
   GENERAL.......................................................................................................33
   DIVIDENDS AND RATE PERIODS....................................................................................33
   REDEMPTION....................................................................................................36
   LIQUIDATION...................................................................................................36
   RATING AGENCY GUIDELINES AND ASSET COVERAGE...................................................................37
   VOTING RIGHTS.................................................................................................38
THE AUCTION......................................................................................................39
   GENERAL.......................................................................................................39
   AUCTION AGENCY AGREEMENT......................................................................................39
   BROKER-DEALER AGREEMENTS......................................................................................39
   AUCTION PROCEDURES............................................................................................39
   SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT.......................................................41
   NOTIFICATION OF RESULTS AND SETTLEMENT........................................................................42
   SECONDARY MARKET TRADING AND TRANSFERS OF Preferred Shares....................................................42
FEDERAL INCOME TAX MATTERS.......................................................................................43
DETERMINATION OF NET ASSET VALUE.................................................................................45
UNDERWRITING.....................................................................................................47
CAPITALIZATION OF THE FUND AND OTHER MATTERS.....................................................................45
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION.....................................................48
</TABLE>


                _______________________________________________

You  should  rely  only  on the  information  contained  in or  incorporated  by
reference into this prospectus. The Fund has not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information,  you should not rely on
it. The Fund is not, and the underwriters are not, making an offer to sell these
securities in any  jurisdiction  where the offer or sale is not  permitted.  The
information  appearing  in  this  prospectus  is  given  as of the  date of this
prospectus. The Fund's business,  financial condition, results of operations and
prospects may have changed since the date of this prospectus.


                         PRIVACY PRINCIPLES OF THE FUND

The Fund has established the following  policy regarding  information  about the
Fund's  shareholders:  We  consider  all  shareholder  data  to be  private  and
confidential,  and we hold ourselves to the highest standards in its safekeeping
and use. The Fund collects nonpublic  information (e.g., name,  address,  Social
Security Number,  Fund holdings) about  shareholders  from  transactions in Fund
shares.  The  Fund  will  not  release   information  about  current  or  former
shareholders (except as permitted by law) unless one of the following conditions
is met: (i) we receive your prior written consent; (ii) we believe the recipient
to be you or your authorized representative;  or (iii) we are required by law to
release  information  to the  recipient.  The  Fund  has not and will not in the
future give or sell information about its current or former  shareholders to any
other company,  individual, or group (except as permitted by law). The Fund will
only use information  about its shareholders as necessary to service or maintain
shareholder  accounts in the ordinary  course of business.  Internally,  we also
restrict  access to shareholder  personal data to those who have a specific need
for the records. We maintain physical, electronic and procedural safeguards that
comply with Federal  standards to guard your personal  data.  The Fund's primary
service providers (i.e., advisers, administrators,  transfer agent and custodian
(the "Service Providers")) have adopted individual privacy policies that conform
with and assure the Fund's compliance with the foregoing.

The Fund and its  Service  Providers  restrict  access  to  non-public  personal
information  about  its  shareholders  to  employees  of the  Fund's  investment
advisers  and  their  affiliates  with  a  legitimate   business  need  for  the
information.  The Fund maintains physical,  electronic and procedural safeguards
designed to protect the non-public personal information of its shareholders. For
more   information   about   the   Fund's   privacy   policies,   please   visit
http://www.boulderfunds.net.


<PAGE>

                               PROSPECTUS SUMMARY

The  following  is only a summary.  This  summary  does not  contain  all of the
information that you should consider before  investing in the Preferred  Shares,
especially  the  information  set forth under the heading  "Risk  Factors."  You
should  review  the  more  detailed  information  contained  in the body of this
prospectus,  the Statement of  Additional  Information  and the Fund's  Articles
Supplementary  Creating  and Fixing the Rights of Auction  Preferred  Stock (the
"Articles  Supplementary") attached as Appendix C to the Statement of Additional
Information.

<TABLE>
<S>                 <C>
The  Fund           Boulder   Growth  &  Income   Fund,   Inc.  is  a
                    non-diversified,  closed-end  management  investment company
                    that was  organized  in  October  1972 and began  investment
                    activities  in January  1974.  The Fund's  common shares are
                    traded on the New York Stock Exchange (the "NYSE") under the
                    symbol  "BIF." As of _____ __, 2005,  the Fund had _________
                    shares of  common  stock  outstanding.  The  average  weekly
                    trading volume of the Fund's common stock on the NYSE during
                    the  period  from  ____________  through  _____________  was
                    ____shares.  As of ______ ___,  2005,  the net assets of the
                    Fund were approximately $___________.

                    As of July ___,  2005, the Fund had a bank line of credit in
                    the amount of $20,000,000  (the "Bank Debt") of which it had
                    drawn down $20,000,000. The Bank Debt is used for investment
                    and will be repaid entirely in conjunction with the Offering
                    (defined below) out of the proceeds of the Offering.

                    The  Fund's  investment   advisers  are  Boulder  Investment
                    Advisers,  LLC and Stewart West Indies Trading Company, Ltd.
                    d/b/a Stewart Investment  Advisers.  The address of the Fund
                    and BIA is 1680 38th Street,  Suite 800,  Boulder,  Colorado
                    80301.  The address of SIA is Bellerive,  Queen Street,  St.
                    Peter, Barbados.

The  Offering       The Fund is  offering an  aggregate  of 1,000
                    Preferred  Shares at a purchase  price of $25,000  per share
                    plus dividends,  if any, that have accumulated from the date
                    the Fund first issues the Preferred Shares (the "Offering").
                    The Preferred  Shares are being  offered  through a group of
                    underwriters (the "Underwriters") led by [Lead Underwriter -
                    Full Name] ("Lead Underwriter").

                    The Preferred  Shares  entitle their holders to receive cash
                    dividends  at an annual  rate  that may vary for  successive
                    dividend  periods.  In general,  except as  described  under
                    "Description  of Preferred  Shares" and  "Dividends and Rate
                    Periods"  below,  the  dividend  period  for each  series of
                    Preferred  Shares will be twenty-eight  days.  Deutsche Bank
                    Trust Company  Americas (the "Auction Agent") will determine
                    the  dividend  rate for any  dividend  period by an  auction
                    conducted on the business day immediately prior to the start
                    of that dividend period. See "The Auction."

                    The Preferred Shares are not listed on an exchange. Instead,
                    investors may buy or sell Preferred  Shares at an auction by
                    submitting orders to  broker-dealers  that have entered into
                    agreements  ("Broker-Dealer  Agreements")  with the  Auction
                    Agent  ("Broker-Dealers")  or to  broker-dealers  that  have
                    entered into separate agreements with a Broker-Dealer.

                    Generally,  investors  in  the  Preferred  Shares  will  not
                    receive certificates representing ownership of their shares.
                    The   Depository   Trust  Company  or  any  successor   (the
                    "Securities  Depository"  or "DTC") or its  nominee  for the
                    account of the investor's Broker-Dealer will maintain record
                    ownership  of  Preferred   Shares  in  book-entry  form.  An
                    investor's Broker-Dealer,  in turn, will maintain records of
                    that investor's beneficial ownership of Preferred Shares.

Investment Objective and     The Fund's investment objective is total return. The
Principal Investment         Fund seeks to produce both income and long-term capital
Strategies                   appreciation by investing in a portfolio of equity and
                             debt securities. The Fund invests primarily in common
                             stocks, including dividend paying common stocks such
                             as those issued by utilities, real estate investment
                             trusts ("REITs") and regulated investment companies
                             under the Code (as defined below) ("RICs").
                             The Fund also invests in fixed income securities such
                             as U.S. government securities, preferred stocks and bonds.
                             The Fund invests primarily in securities of U.S.-based
                             companies and to a lesser extent in foreign equity
                             securities and sovereign debt, in each case
                             denominated in foreign currency. The Fund has no
                             restrictions on its ability to invest in foreign
                             securities. The Fund is concentrated in REITs,
                             which means it must invest more than 25% of its
                             total assets in REITs and companies in the real
                             estate industry. No assurance can be given that the
                             Fund will achieve its investment objective. See
                             "Investment Objective and Policies."

<PAGE>

                    The  Fund  is a  "non-diversified"  investment  company,  as
                    defined in the 1940 Act, which means that it is permitted to
                    invest its assets in a more  limited  number of issuers than
                    "diversified"  investment  companies.  A diversified company
                    may not,  with  respect to 75% of its total  assets,  invest
                    more than 5% of its total  assets in the  securities  of any
                    one issuer and may not own more than 10% of the  outstanding
                    voting  securities of any one issuer.  However,  pursuant to
                    the  requirements  of  Subchapter M of the Internal  Revenue
                    Code of 1986, as amended (the "Code"), (A) not more than 25%
                    of the Fund's total assets may be invested in  securities of
                    any one issuer (other than U.S.  government  securities  and
                    RICs) or of any two or more issuers  controlled  by the Fund
                    which may be deemed to be  engaged  in the same,  similar or
                    related trades or businesses, and (B) with respect to 50% of
                    the total value of the Fund's  portfolio,  (i) the Fund must
                    limit  to 5% the  portion  of  its  assets  invested  in the
                    securities of a single  issuer  (other than U.S.  government
                    securities  and  RICs),  and  (ii) the Fund may not own more
                    than 10% of the  outstanding  voting  securities  of any one
                    issuer (other than U.S. government securities and RICs). The
                    Fund intends to concentrate its common stock  investments in
                    a few issuers and to take large  positions in those issuers,
                    consistent with being a "non-diversified" fund. As a result,
                    the Fund may be  subject  to a  greater  risk of loss than a
                    diversified   fund  or  a  fund  that  has  diversified  its
                    investments  more broadly.  Taking larger  positions is also
                    likely to increase  the  volatility  of the Fund's net asset
                    value,  reflecting  fluctuation  in the value of large  Fund
                    holdings.

                    The Fund has  adopted a  concentration  policy  pursuant  to
                    which it must, under normal market  conditions,  invest more
                    than 25% of its total  assets in REITs or  companies  in the
                    real  estate  industry.  The Fund  must  obtain  shareholder
                    approval  prior to changing this policy.  The portion of the
                    Fund's  assets  invested  in REITs and such other  companies
                    will vary based on market conditions, but it is not expected
                    to exceed 50% of total assets.  As of July ___, 2005,  ____%
                    of the Fund's  assets were  invested in REITs.  Although the
                    Fund can invest in REITs of any size,  it currently  intends
                    to invest in REITs with  market  capitalizations  of greater
                    than $500 million.  Although the Fund  generally  invests in
                    U.S. REITs, such companies may invest directly or indirectly
                    in  non-U.S.  properties,  and  the  Fund  may  make  direct
                    investments  in foreign  REITs.  The Fund presently owns one
                    foreign REIT security.

                    Under the 1940 Act,  the Fund must limit to 10% the  portion
                    of its assets  invested in RICs, and under  Subchapter M, no
                    single  investment can exceed 25% of the Fund's total assets
                    at the time of purchase.  These  percentage  limitations are
                    calculated  at the time of  investment,  and the Fund is not
                    required  to dispose of assets if  holdings  increase  above
                    these levels due to appreciation.  As of July __, 2005, ___%
                    of the Fund's assets were invested in RICs,  and ___% of the
                    Fund's  assets were  invested in  Berkshire  Hathaway,  Inc.
                    (NYSE:  BRK). The Fund has no restrictions on its ability to
                    invest in foreign  securities.  As of July __, 2005, ___% of
                    the Fund's assets were invested in foreign securities.

                    Under normal market  conditions,  the Fund intends to invest
                    at least 80% of its net assets in common  stocks,  primarily
                    domestic  common stocks and  secondarily  in foreign  common
                    stocks denominated in foreign currencies. The portion of the
                    Fund's  assets that are not invested in common stocks may be
                    invested in fixed income  securities,  cash  equivalents and
                    income-producing  common stocks. The term  "income-producing
                    common  stocks"  includes  RICs whose  objective  is income,
                    REITs, and other  dividend-paying  common stocks,  while the
                    term  "fixed  income   securities"   includes  bonds,   U.S.
                    government securities,  notes, bills, debentures,  preferred
                    stocks,  convertible  securities,   bank  debt  obligations,
                    repurchase    agreements   and   short-term   money   market
                    obligations.

                    Under normal circumstances, the Fund will not have more than
                    10% of its assets in cash or cash equivalents. The Fund may,
                    for temporary defensive purposes,  allocate a higher portion
                    of its  assets  to  cash  and  cash  equivalents.  For  this
                    purpose,  cash  equivalents  consist of, but are not limited
                    to,  short-term  (less than twelve months to maturity)  U.S.
                    government  securities,  certificates  of deposit  and other
                    bank  obligations,  investment grade corporate bonds,  other
                    debt instruments and repurchase agreements.

                    Except  for  the  Fund's  investment   objective,   industry
                    concentration  and  fundamental  investment  restrictions as
                    described  in  this  prospectus  and  in  the  Statement  of
                    Additional  Information,   the  percentage  limitations  and
                    investment  policies  set  forth in this  prospectus  can be
                    changed  by the  Fund's  Board of  Directors  (the  "Board")
                    without shareholder approval.

Use of  Leverage    The  Fund  expects  to  utilize  financial
by the Fund         leverage  on  an  ongoing  basis  for  investment   purposes
                    specifically  through the issuance of the Preferred  Shares.
                    After  completion of the Offering,  the Fund anticipates its
                    total leverage from the issuance of Preferred Shares will be
                    approximately  [22%] of the Fund's total assets. This amount
                    may change but the Fund will not incur  additional  leverage
                    in the form of  preferred  shares  if as a result  its total
                    leverage  would  exceed  50% of  the  Fund's  total  assets.
                    Although  the Fund may in the future  offer other  preferred
                    shares,  increase the number of Preferred  Shares,  or incur
                    other  indebtedness,  which would further leverage the Fund,
                    the Fund does not currently intend to offer preferred shares
                    other than the Preferred  Shares  offered hereby or to incur
                    indebtedness,  other than  short-term  credits in connection
                    with the settlements of portfolio transactions.

<PAGE>

                    The Fund generally will not utilize leverage if the Advisers
                    anticipate  that leverage  would result in a lower return to
                    holders  of the  Fund's  common  shares  over  time.  Use of
                    financial  leverage  creates an  opportunity  for  increased
                    returns for the holders of the Fund's  common shares but, at
                    the same time,  creates the  possibility  for  greater  loss
                    (including the likelihood of greater volatility of net asset
                    value  and  market  price  of  the  common   shares  and  of
                    dividends),  and there can be no assurance that a leveraging
                    strategy will be successful during any period in which it is
                    employed.  Because  the fees  paid to the  Advisers  will be
                    calculated on the basis of the Fund's  managed  assets,  the
                    fees will be higher when leverage  (including  the Preferred
                    Shares) is  utilized,  giving the  Advisers an  incentive to
                    utilize leverage.

Risk                The  following is a summary of the  principal  risks of
Considerations      investing in the Preferred Shares.  You should read the more
                    extensive discussion in this prospectus under "Risk Factors"
                    beginning on page 23.

                    Risks of  Investing  in the  Preferred  Shares.  The primary
                    risks of investing in the Preferred Shares are:

                             |X|      If an auction fails you may not be able to
                                      sell some or all of your shares.

                             |X|      Because of the nature of the market for
                                      Preferred Shares, you may receive less
                                      than the price you paid for your Preferred
                                      Shares if you sell them outside of the
                                      auction, especially when market interest
                                      rates are rising.

                             |X|      A rating agency could, at any time,
                                      downgrade or withdraw its rating assigned
                                      to the Preferred Shares without prior
                                      notice to the Fund or shareholders. Any
                                      downgrading or withdrawal of rating could
                                      affect the liquidity of the Preferred
                                      Shares in an auction.

                             |X|      The Fund may be forced to redeem Preferred
                                      Shares to meet regulatory or rating agency
                                      requirements or may voluntarily redeem
                                      your shares in certain circumstances.

                             |X|      In certain circumstances, the Fund may not
                                      earn sufficient income from its
                                      investments to pay dividends on the
                                      Preferred Shares.

                             |X|      If interest rates rise, the value of the
                                      Fund's investment portfolio will decline,
                                      reducing the asset coverage for Preferred
                                      Shares.

                    Leverage  Risk.  The Preferred  Shares  leverage  creates an
                    opportunity for increased return but, at the same time, will
                    involve special risk  considerations.  Leveraging  resulting
                    from the Preferred  Shares will magnify  declines as well as
                    increases in the net asset value of the Fund's  common stock
                    and  in  the  net  return  on its  portfolio.  Although  the
                    principal  amount of the  Fund's  Preferred  Shares  will be
                    fixed, the Fund's assets may change in value during the time
                    the  Preferred  Shares  are  outstanding,   thus  increasing
                    exposure to capital risk.  To the extent the return  derived
                    from the assets obtained with the Preferred  Shares proceeds
                    exceeds the interest and other  expenses  that the Fund will
                    have to pay,  the Fund's net return will be greater  than if
                    Preferred Shares leverage was not used. Conversely, however,
                    if the return from the assets  obtained  with the  Preferred
                    Shares  proceeds  is not  sufficient  to  cover  the cost of
                    borrowing,  the net  return of the Fund will be less than if
                    Preferred  Shares  leverage was not used,  and therefore the
                    amount available for distribution to the Fund's shareholders
                    as dividends will be reduced.

                    Interest Rate Risk. The Preferred Shares pay dividends based
                    on  shorter-term  interest  rates.  The Fund  presently  has
                    invested  the  proceeds  of the Bank Debt in REITs and other
                    dividend    paying   and   income    producing    securities
                    (collectively,    "Income    Producing    Securities")   and
                    anticipates  continuing  to  do  so  in  order  to  generate
                    sufficient  income to pay dividends on the Preferred  Shares
                    when  due.  The  dividends  and  rates  paid  on the  Income
                    Producing  Securities  can  be  expected  to  fluctuate.  If
                    short-term  interest  rates  rise,  dividend  rates  on  the
                    Preferred  Shares will also rise since the  auction  setting
                    the  dividend  rate on  Preferred  Shares  will  compete for
                    investors with other short-term  instruments.  A significant
                    increased dividend rate on the Preferred Shares could result
                    in the Fund  under-earning  its Preferred  Shares  dividend,
                    which  would  lead  to  the  Preferred  Shares  shareholders
                    receiving a return of capital, assuming there are no capital
                    gains to be paid  out.  Similarly,  if the  rating  agencies
                    lower the  rating  assigned  to the  Preferred  Shares,  the
                    dividend rate on the Preferred  Shares will likely increase.
                    The Fund  must pay all its  expenses  before  it can pay any
                    dividends, including any Preferred Shares dividends.
<PAGE>

                    Risk Associated with  Concentrating  in REITs.  The Fund has
                    adopted  an  investment  policy of  concentrating  in REITs.
                    Under  normal  market  conditions,  the Fund is  required to
                    maintain over 25% of its  investments in REITs and companies
                    in  the  real   estate   industry.   The  Fund  must  obtain
                    shareholder  approval  prior to changing  this policy,  thus
                    limiting its  flexibility  to liquidate  REITs in the future
                    should   market   conditions   warrant.   Since   the   Fund
                    concentrates  its assets in the real  estate  industry,  the
                    Fund's  performance  will be impacted by the  performance of
                    the REIT markets. Property values may fall due to increasing
                    vacancies or declining rents resulting from economic, legal,
                    cultural or technological developments. REIT prices also may
                    drop  because of the failure of borrowers to pay their loans
                    and poor  management.  Many REITs  utilize  leverage,  which
                    increases  investment  risk  and  could  adversely  affect a
                    REIT's  operations  and  market  value in  periods of rising
                    interest  rates as well as risks  normally  associated  with
                    debt financing. In addition, there are risks associated with
                    particular sectors of real estate investments (e.g., retail,
                    office,  hotel,  healthcare  and  multifamily   properties),
                    although the Fund does not intend to focus on any particular
                    sector of real estate investments.

                    Auction Risk.  The dividend  rate for the  Preferred  Shares
                    normally is set through an auction process.  In the auction,
                    holders of Preferred  Shares may indicate the dividend  rate
                    at  which  they  would  be  willing  to hold  or sell  their
                    Preferred Shares or purchase  additional  Preferred  Shares.
                    The  auction  also  provides   liquidity  for  the  sale  of
                    Preferred  Shares.  An  auction  fails  if  there  are  more
                    Preferred Shares offered for sale than there are buyers. You
                    may not be able to sell your Preferred  Shares at an auction
                    if the  auction  fails.  A holder  of the  Preferred  Shares
                    therefore  can be  given no  assurance  that  there  will be
                    sufficient  clearing  bids in any auction or that the holder
                    will be able to sell its  Preferred  Shares  in an  auction.
                    Also,  if you place bid orders  (orders to retain  Preferred
                    Shares) at an auction only at a specified dividend rate, and
                    that rate exceeds the rate set at the auction,  you will not
                    retain  your  Preferred  Shares.  Additionally,  if you  buy
                    Preferred Shares or elect to retain Preferred Shares without
                    specifying a dividend rate below which you would not wish to
                    buy or continue to hold those  Preferred  Shares,  you could
                    receive a lower rate of return on your Preferred Shares than
                    the market  rate.  Finally,  the  dividend  periods  for the
                    Preferred  Shares  may be  changed  by the Fund,  subject to
                    certain  conditions  and  with  notice  to  the  holders  of
                    Preferred  Shares,  which could also affect the liquidity of
                    your investment.

                    As noted above,  if there are more Preferred  Shares offered
                    for sale than there are buyers for those Preferred Shares in
                    any  auction,  the auction will fail and you may not be able
                    to sell some or all of your  Preferred  Shares at that time.
                    The   relative   buying  and  selling   interest  of  market
                    participants  in your  Preferred  Shares and in the  auction
                    rate  securities  market as a whole will vary over time, and
                    such variations may be affected by, among other things, news
                    relating  to the Fund,  the  attractiveness  of  alternative
                    investments,  the  perceived  risk of  owning  the  security
                    (whether  related to credit,  liquidity  or any other risk),
                    the tax treatment  accorded the instruments,  the accounting
                    treatment accorded auction rate securities, including recent
                    clarifications  of  U.S.   generally   accepted   accounting
                    principles   relating  to  the  treatment  of  auction  rate
                    securities,   reactions  to  regulatory   actions  or  press
                    reports,  financial  reporting  cycles and market  sentiment
                    generally.  Shifts  of  demand  in  response  to any  one or
                    simultaneous  particular  events cannot be predicted and may
                    be short-lived or exist for longer periods.

                    Secondary  Market  Risk.  If you try to sell your  Preferred
                    Shares  between  auctions you may not be able to sell any or
                    all of your Preferred  Shares or you may not be able to sell
                    them  for  $25,000  per  share or  $25,000  per  share  plus
                    accumulated but unpaid dividends. If the Fund has designated
                    a special dividend  period,  changes in interest rates could
                    affect  the  price  you  would  receive  if  you  sold  your
                    Preferred Shares in the secondary  market.  You may transfer
                    Preferred  Shares  outside of auctions  only to or through a
                    Broker-Dealer   that  has  entered   into  a   Broker-Dealer
                    Agreement, or other persons as the Fund permits.

                    Securities and Exchange Commission Inquiries. Certain of the
                    Underwriters  have advised the Fund that those  Underwriters
                    and  various  other  broker-dealers  and  other  firms  that
                    participate in the auction rate  securities  market received
                    letters  from  the  staff  of the  Securities  and  Exchange
                    Commission in the spring of 2004. The letters requested that
                    each of these  firms  voluntarily  conduct an  investigation
                    regarding its  respective  practices and  procedures in that
                    market.   Pursuant   to  these   requests,   each  of  those
                    Underwriters conducted its own voluntary review and reported
                    its  findings  to the  Securities  and  Exchange  Commission
                    staff.  At  the  staff's  request,  those  Underwriters  are
                    engaging  in  discussions  with  the  staff  concerning  its
                    inquiry. Neither those Underwriters nor the Fund can predict
                    the ultimate outcome of the inquiry or how that outcome will
                    affect the market for the Preferred Shares or the auctions.

<PAGE>

                    Ratings and Asset Coverage  Risk.  While it is expected that
                    Moody's  will assign a rating of Aaa and Fitch will assign a
                    rating of AAA to the Preferred  Shares,  such ratings do not
                    eliminate or necessarily  mitigate the risks of investing in
                    the Preferred  Shares.  Moody's or Fitch could downgrade its
                    rating of the Preferred Shares or withdraw its rating of the
                    Preferred  Shares  at any time,  which may make your  shares
                    less liquid at an auction or in the secondary market and may
                    materially  and adversely  affect the value of the Preferred
                    Shares if sold  outside  an  auction.  If the Fund  fails to
                    satisfy   the  asset   coverage   ratios   discussed   under
                    "Description of Preferred Shares - Rating Agency  Guidelines
                    and Asset Coverage," the Fund will be required to redeem, at
                    a  time  that  may  not be  favorable  to  the  Fund  or its
                    shareholders, a sufficient number of the Preferred Shares in
                    order  to  return  to  compliance  with the  asset  coverage
                    ratios.

                    Restrictions   on   Dividends   and   Other   Distributions.
                    Restrictions  imposed  on the  declaration  and  payment  of
                    dividends  or  other  distributions  to the  holders  of the
                    Fund's common shares and Preferred Shares,  both by the 1940
                    Act and by requirements  imposed by rating  agencies,  might
                    impair the Fund's ability to maintain its qualification as a
                    regulated   investment   company  for  federal   income  tax
                    purposes.

                    General  Risks of Investing  in the Fund.  The Fund is not a
                    complete investment program and should only be considered as
                    an addition to an investor's existing diversified  portfolio
                    of   investments.   Due  to  uncertainty   inherent  in  all
                    investments,  there can be no  assurance  that the Fund will
                    achieve its investment objectives.

                             |X|   Non-Diversified  Status Risk.  The Fund is  classified  as  "non-diversified"
                                   under the 1940 Act. As a result,  it can invest a greater  portion of its assets
                                   in  obligations  of a single  issuer than a  "diversified"  fund.  The Fund will
                                   therefore  be  more  susceptible  than a  diversified  fund to  being  adversely
                                   affected  by  any  single   corporate,   economic,   political   or   regulatory
                                   occurrence.  The  Fund  intends  to  diversify  its  investments  to the  extent
                                   necessary  to  qualify,  and  maintain  its status,  as a  regulated  investment
                                   company under U.S.  federal  income tax laws. See "Risks Factors - General Risks
                                   of Investing in the Fund" and "Federal Income Tax Matters."

                             |X|   Investments  in Common  Stocks.  The Fund  expects  to invest,  under  normal
                                   market  conditions,  in excess of 80% of its assets in  publicly  traded  common
                                   stocks.   Common  stocks   generally  have  greater  risk  exposure  and  reward
                                   potential  over time than  bonds.  The  volatility  of common  stock  prices has
                                   historically  been  greater  than bonds,  and as the Fund  invests  primarily in
                                   common  stocks,  the  Fund's  net  asset  value may also be  volatile.  Further,
                                   because the time horizon for the Fund's  investments  in common stock is longer,
                                   the time  necessary  for the Fund to achieve its  objective of total return will
                                   likely be longer than for a fund that invests solely for income.

                             |X|   Reinvestment Risk. Income from the Fund's portfolio will decline if the Fund invests
                                   the income from, or proceeds from the sale of its, Income Producing Securities into lower
                                   yielding instruments. A decline in income could affect the Fund's ability to pay
                                   dividends on the Preferred Shares.

                             |X|   Concentration Risk. The Fund intends to concentrate its common stock investments in a
                                   few issuers and to take large positions in those issuers, consistent with being a
                                   "non-diversified" fund. As a result, the Fund may be subject to a greater risk of loss than
                                   a diversified fund or a fund that has diversified its investments more broadly.
                                   Taking larger positions is also likely to increase the volatility of the Fund's net
                                   asset value, reflecting fluctuation in the value of large Fund holdings.

                             |X|   Investment  in  Berkshire  Hathaway.   The  Fund  presently  has  invested  a
                                   significant percentage of its portfolio in Berkshire Hathaway,  Inc. (NYSE: BRK)
                                   ("Berkshire").  As of July  ___,  2005,  the  Fund  held 310  Berkshire  Class A
                                   shares,  representing  ____% of the Fund's assets. The Advisers do not currently
                                   intend to liquidate any portion of the Fund's  position in  Berkshire.  Although
                                   not an insurance  company itself,  Berkshire owns Geico Insurance and General Re
                                   Insurance,  and therefore derives a significant  portion of its income,  and its
                                   value,  from  these two  insurance  companies.  The  insurance  business  can be
                                   significantly  affected by interest  rates as well as price  competition  within
                                   the  industry.  In addition,  an insurance  company may  experience  significant
                                   changes in its year to year operating  performance based both on claims paid and
                                   on performance of invested assets.  Insurance  companies can also be affected by
                                   government  regulations  and tax laws,  which may  change  from time to time.  A
                                   significant  decline in the market price of  Berkshire  or any other  company in
                                   which the Fund has made a significant  common stock  investment (i) would result
                                   in a  significant  decline in the Fund's net asset  value,  (ii) may result in a
                                   proportionate  decline in the  market  price of the Fund's  common  shares,  and
                                   (iii) may result in greater risk and market  fluctuation  than a fund that has a
                                   more diversified portfolio.

<PAGE>

                             |X|   Investments in REITs.  The Fund has adopted a  concentration  policy pursuant
                                   to which it must,  under normal market  conditions,  invest more than 25% of its
                                   total assets in REITs or companies  in the real estate  industry.  The Fund must
                                   obtain  shareholder  approval  prior to changing this policy,  thus limiting its
                                   flexibility to liquidate REITs in the future should market  conditions  warrant.
                                   Since the Fund will  concentrate  its assets in the real  estate  industry,  the
                                   Fund's  performance  will be generally  linked to performance of the real estate
                                   markets.  Property  values may fall due to  increasing  vacancies  or  declining
                                   rents resulting from economic,  legal,  cultural or technological  developments.
                                   REIT  prices  also may drop  because of the  failure of  borrowers  to pay their
                                   loans  and  poor  management.  Many  REITs  utilize  leverage,  which  increases
                                   investment risk and could adversely affect a REIT's  operations and market value
                                   in periods of rising interest  rates, as well as risks normally  associated with
                                   debt  financing.  In  addition,  there  are  risks  associated  with  particular
                                   sectors of real estate investments (e.g., retail, office, hotel,  healthcare and
                                   multifamily  properties),  although  the Fund  does not  intend  to focus on any
                                   particular sector of real estate investments.

                             |X|   Leveraging  Risk.  The Fund is currently  leveraged  with the Bank Debt which
                                   will be replaced with leverage  from the Preferred  Shares.  Use of leverage may
                                   have a number of  adverse  effects on the Fund and its  shareholders  including:
                                   (i) leverage may magnify market  fluctuations in the Fund's underlying  holdings
                                   thus causing a  disproportionate  change in the Fund's net asset value; (ii) the
                                   Fund's  cost of  leverage  may exceed the  return on the  underlying  securities
                                   acquired  with the proceeds of the  leverage,  thereby  diminishing  rather than
                                   enhancing  the return to  shareholders  and  generally  making the Fund's  total
                                   return to such  shareholders  more  volatile;  (iii) the Fund may be required to
                                   sell  investments in order to meet dividend or interest  payments on the debt or
                                   preferred  stock it has issued  when it may be  disadvantageous  to do so;  (iv)
                                   leveraging  through the issuance of preferred stock requires that the holders of
                                   the preferred  stock have class voting rights on various matters that could make
                                   it more  difficult  for the  holders  of the Fund's  common  stock to change the
                                   investment  objective or  fundamental  policies of the Fund, to convert it to an
                                   open-end fund or make certain other  changes;  and (v) the Fund may be forced to
                                   redeem  some  or all of the  Preferred  Shares  at  inopportune  times  due to a
                                   decline in market value of Fund investments.

                             |X|   Discount From Net Asset Value.  Common stock of closed-end  funds  frequently
                                   trade  at a  market  price  that is  less  than  the  value  of the  net  assets
                                   attributable  to those shares (a "discount").  The  possibility  that the Fund's
                                   shares  will trade at a discount  from net asset  value is a risk  separate  and
                                   distinct from the risk that the Fund's net asset value will  decrease.  The risk
                                   of  purchasing  shares of a  closed-end  fund that might  trade at a discount or
                                   unsustainable  premium is more  pronounced  for investors who wish to sell their
                                   shares in a  relatively  short  period  of time  because,  for those  investors,
                                   realization  of a gain  or  loss  on  their  investments  is  likely  to be more
                                   dependent  upon the  existence  of a premium  or  discount  than upon  portfolio
                                   performance.

                             |X|   Size of the  Fund.  As of  July  ___,  2005,  the  Fund  had  net  assets  of
                                   approximately  $____ million.  As a fund with a relatively small asset base, the
                                   Fund may be subject  to certain  operational  inefficiencies  including:  higher
                                   expense  ratio,  less coverage by analysts and the  marketplace in general which
                                   can  contribute  to a less  active  trading  market  for the  Fund's  shares and
                                   consequently  a wider  discount,  more limited  ability to attract new investors
                                   and/or take  advantage  of  investment  opportunities  and less  ability to take
                                   advantage of lower transaction costs available to larger investors.

                             |X|   Repurchase of the Fund's  Common Stock.  The Fund is authorized to repurchase
                                   its common  shares on the open  market when the shares are trading at a discount
                                   from  net  asset  value as  determined  by the  Board  from  time to  time.  The
                                   acquisition  of common  shares by the Fund will decrease the total assets of the
                                   Fund and, therefore,  have the effect of increasing the Fund's expense ratio and
                                   may  adversely  affect  the  ability  of the  Fund  to  achieve  its  investment
                                   objectives.  Furthermore,  the  acquisition  of  common  shares  by the Fund may
                                   require the Fund to redeem the  Preferred  Shares in order to  maintain  certain
                                   asset  coverage  requirements.  To the  extent  the Fund  may need to  liquidate
                                   investments to fund  repurchase of common  shares,  this may result in portfolio
                                   turnover which will result in additional expenses being borne by the Fund.

<PAGE>

                             |X|   Dependence on Key Personnel. The Advisers are
                                   dependent upon the expertise of Stewart
                                   Horejsi in providing advisory services with
                                   respect to the Fund's investments. If the
                                   Advisers were to lose the services of Mr.
                                   Horejsi, their ability to service the Fund
                                   could be adversely affected. There can be no
                                   assurance that a suitable replacement could
                                   be found for Mr. Horejsi in the event of his
                                   death, resignation, retirement or inability
                                   to act on behalf of the Advisers.

                             |X|   Issuer Risk. The value of the Fund's
                                   portfolio may decline for a number of reasons
                                   which directly relate to the issuers of the
                                   securities in the portfolio, such as
                                   management performance, financial leverage
                                   and reduced demand for an issuer's goods and
                                   services.

                             |X|   Inflation Risk. Inflation risk is the risk
                                   that the value of assets or income from
                                   investments will be worth less in the future
                                   as inflation decreases the value of money. As
                                   inflation increases, the real value of the
                                   Fund's portfolio can decline.

                             |X|   Repurchase  Agreements.  The use of repurchase  agreements  involves  certain
                                   risks.  For example,  if the seller of securities  under a repurchase  agreement
                                   defaults on its obligation to repurchase the underlying securities,  as a result
                                   of bankruptcy or  otherwise,  the Fund will seek to dispose of such  securities,
                                   which action could involve costs or delays.  If the seller becomes insolvent and
                                   subject to liquidation or  reorganization  under applicable  bankruptcy or other
                                   laws,  the  Fund's  ability  to  dispose  of the  underlying  securities  may be
                                   restricted.  Finally,  it  is  possible  that  the  Fund  may  not  be  able  to
                                   substantiate its interest in the underlying securities.

                             |X|   Foreign Securities Risk. The Fund is permitted to invest in foreign securities.
                                   Investment in non-U.S. issuers may involve unique risks compared to investing in
                                   securities of U.S. issuers. These risks are more pronounced to the extent that the Fund
                                   invests a significant portion of its non-U.S. investments in one region or in the
                                   securities of emerging market issuers. These risks may include:

                                   o     Less information about non-U.S. issuers
                                         or markets may be available due to less
                                         rigorous disclosure, accounting
                                         standards or regulatory practices.

                                   o     Many non-U.S. markets are smaller, less
                                         liquid and more volatile. In a changing
                                         market, the Advisers may not be able to
                                         sell the Fund's portfolio securities at
                                         times, in amounts and at prices they
                                         consider reasonable.

                                   o     Currency exchange rates or controls may
                                         adversely affect the value of the
                                         Fund's investments.

                                   o     The economies of non-U.S. countries may
                                         grow at slower rates than expected or
                                         may experience downturns or recessions.

                                   o     Withholdings and other non-U.S. taxes may decrease the Fund's return.

                             |X|   Currency  Risk. A portion of the Fund's  assets may be quoted or  denominated
                                   in  non-U.S.   currencies.   These  securities  may  be  adversely  affected  by
                                   fluctuations  in  relative  currency  exchange  rates  and by  exchange  control
                                   regulations.  The Fund's investment  performance may be negatively affected by a
                                   devaluation  of a  currency  in which  the  Fund's  investments  are  quoted  or
                                   denominated.  Further,  the Fund's  investment  performance may be significantly
                                   affected,  either  positively or negatively,  by currency exchange rates because
                                   the U.S.  dollar value of securities  quoted or denominated in another  currency
                                   will  increase or decrease in response to changes in the value of such  currency
                                   in relation to the U.S. dollar.

                             |X|   Sovereign   debt  risk.  An  investment  in  debt   obligations  of  non-U.S.
                                   governments  and  their  political  subdivisions   ("sovereign  debt")  involves
                                   special risks that are not present in corporate debt  obligations.  The non-U.S.
                                   issuer of the  sovereign  debt or the  non-U.S.  governmental  authorities  that
                                   control the repayment of the debt may be unable or unwilling to repay  principal
                                   or interest  when due, and the Fund may have limited  recourse in the event of a
                                   default.   During  periods  of  economic  uncertainty,   the  market  prices  of
                                   sovereign  debt may be more  volatile  than prices of debt  obligations  of U.S.
                                   issuers. In the past, certain non-U.S.  countries have encountered  difficulties
                                   in  servicing  their  debt  obligations,  withheld  payments  of  principal  and
                                   interest  and declared  moratoria  on the payment of  principal  and interest on
                                   their sovereign debt.

<PAGE>

                             |X|   Liquidity Risk.  Although the Fund invests  primarily in securities traded on
                                   national  exchanges,  it may invest in less liquid assets from time to time that
                                   are not  readily  marketable  and may be  subject  to  restrictions  on  resale.
                                   Illiquid  securities  may be more  difficult  to value or may  impair the Fund's
                                   ability to realize the full value of its assets in the event of a  voluntary  or
                                   involuntary  liquidation  of such  assets  and thus may cause a  decline  in the
                                   Fund's net asset value.  The Fund has no  limitation on the amount of its assets
                                   that may be  invested in  securities  which are not  readily  marketable  or are
                                   subject to restrictions  on resale,  although it may not invest more than 30% of
                                   the value of its total assets in  securities  which have been  acquired  through
                                   private  placement.  In  certain  situations,   the  Fund  could  find  it  more
                                   difficult to sell such securities at desirable times and/or prices.

                             |X|   Market  Disruption  Risk.  The  terrorist  attacks  in the  United  States on
                                   September 11, 2001 had a disruptive effect on the securities  markets.  The Fund
                                   cannot  predict  the  effects  of  similar  events  in the  future  on the  U.S.
                                   economy.  These  terrorist  attacks and  related  events,  including  the war in
                                   Iraq, its  aftermath,  and  continuing  occupation of Iraq by coalition  forces,
                                   have led to  increased  short-term  market  volatility  and may  have  long-term
                                   effects on U.S. and world  economies  and markets.  A similar  disruption of the
                                   financial  markets could impact interest  rates,  auctions,  secondary  trading,
                                   ratings,  credit risk,  inflation  and other  factors  relating to the Preferred
                                   Shares.

                             |X|   Anti-Takeover  Provisions  Risk.  The  Fund's  charter  (the  "Charter")  and
                                   bylaws (the "Bylaws")  include  provisions that could limit the ability of other
                                   entities or persons to acquire  control of the Fund or to change the composition
                                   of its Board.  Such  provisions  could limit the ability of shareholders to sell
                                   their shares at a premium over prevailing  market prices by discouraging a third
                                   party from  seeking  to obtain  control of the Fund.  These  provisions  include
                                   advance notice requirements for shareholder  proposals and super-majority voting
                                   requirements for certain  transactions with affiliates,  open-ending the Fund or
                                   a merger, liquidation, asset sale or similar transaction.

Investment          The  Fund  is  co-advised  by  Boulder
Advisers            Investment  Advisers,  LLC and Stewart  West Indies  Trading
                    Company,   Ltd.  d/b/a  Stewart  Investment  Advisers.   The
                    Advisers have been providing  advisory  services to the Fund
                    since January 2002,  and to Boulder Total Return Fund,  Inc.
                    since March 1999. As of July ___,  2005,  the Advisers had a
                    total of $_____ million in assets under management. The Fund
                    pays the  Advisers  an  aggregate  monthly fee at the annual
                    rate of 1.25% of the Fund's average  monthly net asset value
                    (the  "Adviser   Fee").   The   liquidation   value  of  any
                    outstanding  preferred stock (e.g., the Preferred Shares) is
                    included in determining  the Fund's net asset value on which
                    fees are  calculated.  The Fund's  co-administrator  is Fund
                    Administrative  Services, LLC ("FAS" or the "Administrator")
                    which is an affiliate of the Advisers.

Trading  Market     The  Preferred  Shares  will  not be  listed  on an
                    exchange.  Instead, you may buy or sell the Preferred Shares
                    at an auction that normally is held every  twenty-eight days
                    by   submitting   orders   to  a   Broker-Dealer   or  to  a
                    broker-dealer  that has  entered  into a separate  agreement
                    with  a   Broker-Dealer.   In  addition  to  the   auctions,
                    Broker-Dealers  and  other  broker-dealers  may  maintain  a
                    secondary  trading market in the Preferred Shares outside of
                    auctions  but may  discontinue  this  activity  at any time.
                    There is no assurance  that a secondary  market will provide
                    holders of Preferred Shares with liquidity. You may transfer
                    Preferred  Shares  outside of auctions  only to or through a
                    Broker-Dealer  or a  broker-dealer  that has entered  into a
                    Broker-Dealer  Agreement,  or  other  persons  as  the  Fund
                    permits.

Dividends and Rate  The table below shows the dividend  rate,
Period              the  dividend  payment  date and the  number of days for the
                    initial rate period of the Preferred  Shares offered in this
                    prospectus.  For  subsequent  rate  periods,  the  Preferred
                    Shares  will pay  dividends  based on a rate set at auctions
                    normally  held every 28 days. In most  instances,  dividends
                    are payable on the first  business day  following the end of
                    the rate period.

                    The  rate  set  at  auction  will  not  exceed  the  maximum
                    applicable  rate. The dividend payment date for special rate
                    periods will be set out in the notice  designating a special
                    rate period.

                    Dividends on the Preferred  Shares will be  cumulative  from
                    the date the  Preferred  Shares are first issued and will be
                    paid out of legally available funds.
</TABLE>


<PAGE>

<TABLE>
<S>                     <C>                     <C>             <C>
Initial Dividend Rate   Dividend Payment        Subsequent      Number of Days in Initial Rate
                        Date for Initial Rate   Dividend        Period
                        Period                  Payment Day

_________________%      ____________,2005       __________      ____________
</TABLE>


                    The Fund  may,  subject  to  certain  conditions,  designate
                    special rate periods of more than 28 days.  The Fund may not
                    designate a special rate period unless  sufficient  clearing
                    bids were made in the most recent  auction for the Preferred
                    Shares. In addition, full cumulative dividends,  any amounts
                    due with respect to mandatory redemptions and any additional
                    dividends  payable  prior to such date must be paid in full.
                    The Fund also must have received  confirmation  from Moody's
                    and Fitch or any substitute  rating agency that the proposed
                    special rate period will not adversely  affect such agency's
                    then-current  rating on the  Preferred  Shares  and the lead
                    Undewriter   designated   by  the  Fund,   initially   [Lead
                    Underwriter], must not have objected to the declaration of a
                    special  rate   period.   See   "Description   of  Preferred
                    Shares--Dividends  and Rate  Periods"  and  "Designation  of
                    Special Rate Periods" and "The Auction".

                    The  Preferred  Shares will entitle their holders to receive
                    cash  dividends  at a rate per  annum  that may vary for the
                    successive  dividend periods for such shares. The applicable
                    rate for a particular  dividend period will be determined by
                    an  auction   conducted  on  the  business  day  immediately
                    preceding  the start of such  dividend  period.  A "business
                    day" is a day on  which  the NYSE is open  for  trading  and
                    which is not a Saturday,  Sunday or other day on which banks
                    in New  York  City are  authorized  or  obligated  by law to
                    close.

                    Determination  of Maximum  Applicable Rate.  Generally,  the
                    applicable  rate for any  regular  dividend  period  for the
                    Preferred   Shares   will  not  be  more  than  the  maximum
                    applicable rate. The maximum  applicable rate will depend on
                    the credit rating  assigned to the  Preferred  Shares and on
                    the duration of the dividend period.  The maximum applicable
                    rate will be the higher of the applicable  percentage of the
                    reference rate or the  applicable  spread plus the reference
                    rate.  The  reference  rate  (the  "Reference  Rate") is the
                    applicable   LIBOR  Rate  (as  defined  in  "Description  of
                    Preferred   Shares   -   Dividends   and  Rate   Periods   -
                    Determination  of Maximum  Applicable  Rate") for a dividend
                    period  of fewer  than 365 days or the  applicable  Treasury
                    Index Rate (as defined in "Description of Preferred Shares -
                    Dividends  and  Rate  Periods  -  Determination  of  Maximum
                    Applicable Rate") for a dividend period of 365 days or more.
                    The  applicable   percentage  or  applicable  spread  as  so
                    determined  is further  subject  to upward but not  downward
                    adjustment in the discretion of the Board after consultation
                    with the lead Underwriter,  initially [Lead Underwriter]. In
                    the  case  of  a  special  dividend   period,   the  maximum
                    applicable  rate will be specified by the Fund in the notice
                    of the special  dividend  period for such  special  dividend
                    payment period.

                    The applicable percentage and spread are as follows:

<TABLE>
<CAPTION>
                       Applicable Percentage Payment Table

             Credit Ratings                Applicable Percentage   Applicable Spread

        Moody's         Fitch
        <S>             <C>                <C>                     <C>
        Aaa             AAA                125%                    1.25%
        Aa3 to Aa1      AA- to AA+         150%                    1.50%
        A3 to A1        A- to A+           200%                    2.00%
        Baa3 to Baa1    BBB- to BBB+       250%                    2.50%
        Ba1 and Lower   BB+ and lower      300%                    3.00%
</TABLE>

                    There  is no  minimum  applicable  rate  in  respect  of any
                    dividend  period.  See  "Description  of Preferred  Shares -
                    Dividends and Rate Periods."

                    Assuming  the  Fund   maintains  a  Aaa/AAA  rating  on  the
                    Preferred  Shares,  the  practical  effect of the  different
                    methods used to  calculate  the maximum  applicable  rate is
                    shown in the table below:

<TABLE>
<S>             <C>                     <C>                     <C>
Reference Rate  Maximum                 Maximum Applicable      Method used to
                Applicable Rate         Rate Using the          Determine the
                Using the               Applicable spread       Maximum
                Applicable                                      Applicable Rate
                ercentage

1%              1.25%                   2.25%                   Spread
2%              2.50%                   3.25%                   Spread
3%              3.75%                   4.25%                   Spread
4%              5.00%                   5.25%                   Spread
5%              6.25%                   6.25%                   Either
6%              7.50%                   7.25%                   Percentage
</TABLE>

<PAGE>

                    Prior to each dividend payment date, the Fund is required to
                    deposit  with the  Auction  Agent  sufficient  funds for the
                    payment of  declared  dividends.  The failure to make such a
                    deposit will result in the  cancellation  of any auction and
                    the dividend rate will be the maximum  applicable rate until
                    such failure to deposit is cured or, if not timely cured,  a
                    non-payment  rate of 300% of the  Reference  Rate.  The Fund
                    does not intend to establish any reserves for the payment of
                    dividends.

<TABLE>
<S>                 <C>
Ratings             The Preferred Shares are expected to receive ratings
                    of Aaa from Moody's and AAA from Fitch. These ratings are an
                    assessment of the capacity and  willingness  of an issuer to
                    pay  preferred  stock  obligations.  The  ratings  are not a
                    recommendation  to  purchase,  hold  or sell  the  Preferred
                    Shares  inasmuch as the rating does not comment as to market
                    price or suitability for a particular investor.  The ratings
                    also  do  not  address  the  likelihood  that  an  owner  of
                    Preferred  Shares  will be able to sell  such  shares  in an
                    auction or otherwise.  The ratings are based on  information
                    obtained from the Fund and other sources. The ratings may be
                    changed,  suspended,  or withdrawn  in the rating  agencies'
                    discretion as a result of changes in, or the  unavailability
                    of, such information. See "Description of Preferred Shares -
                    Rating Agency Guidelines and Asset Coverage."

Redemption          The Fund is required to redeem  Preferred  Shares
                    if the Fund does not meet the asset  coverage ratio required
                    by the 1940 Act,  or to  correct a failure  to meet a rating
                    agency   guideline  in  a  timely   manner.   The  Fund  may
                    voluntarily  redeem Preferred  Shares,  in whole or in part,
                    subject to certain conditions. See "Description of Preferred
                    Shares - Redemption" and  "Description of Preferred Shares -
                    Rating Agency Guidelines and Asset Coverage."

Asset  Maintenance  Under the Articles  Supplementary,  which
                    establishes  and fixes the  rights  and  preferences  of the
                    Preferred  Shares,  the Fund must maintain asset coverage of
                    the  Preferred  Shares as required  by the rating  agency or
                    agencies rating the Preferred Shares (the "Preferred  Shares
                    Basic  Maintenance  Amount").  The  Preferred  Shares  Basic
                    Maintenance   Amount  is  the  sum  of  (a)  the   aggregate
                    liquidation   preference  of  the   Preferred   Shares  then
                    outstanding,   together  with  the   aggregate   liquidation
                    preference  on any other series of  preferred  shares of the
                    Fund (plus  redemption  premium,  if any),  and (b)  certain
                    accrued and projected dividend and other payment obligations
                    of  the  Fund.  Moody's  and  Fitch  have  each  established
                    separate guidelines for calculating  discounted value of the
                    Fund's assets for purposes of this asset  coverage  test. To
                    the extent any particular portfolio holding does not satisfy
                    a  rating  agency's  guidelines,  all  or a  portion  of the
                    holding's  value will not be included in the rating agency's
                    calculation  of  discounted  value.  The  Moody's  and Fitch
                    guidelines also impose certain diversification  requirements
                    on the Fund's portfolio.

                    As  required  by the 1940 Act,  the Fund must also  maintain
                    asset  coverage of at least 200% with respect to outstanding
                    senior  securities that are preferred  stock,  including the
                    Preferred  Shares  (the  "1940  Act  Preferred  Share  Asset
                    Coverage").

                    In the event that the Fund does not satisfy  these  coverage
                    tests,  some or all of the Preferred  Shares will be subject
                    to  mandatory  redemption.  See  "Description  of  Preferred
                    Shares - Redemption."

                    Based on the composition of the Fund's  portfolio as of July
                    __, 2005,  the asset  coverage of the Preferred  Shares,  as
                    measured  pursuant to the 1940 Act,  would be  approximately
                    ____%  if  the  Fund   were  to   issue   Preferred   Shares
                    representing   approximately  ___%  of  the  Fund's  managed
                    assets.

Mandatory           If the Preferred Shares Basic  Maintenance  Amount
Redemption          or the  1940  Act  Preferred  Share  Asset  Coverage  is not
                    maintained  or restored as specified  herein,  the Preferred
                    Shares will be subject to mandatory redemption, out of funds
                    legally  available  therefore,  at the mandatory  redemption
                    price of $25,000 per share plus an amount equal to dividends
                    thereon (whether or not earned or declared)  accumulated but
                    unpaid to the date fixed for redemption. Any such redemption
                    will be limited to the minimum  number of  Preferred  Shares
                    necessary to restore the Preferred Shares Basic  Maintenance
                    Amount or the 1940 Act Preferred  Share Asset  Coverage,  as
                    the case may be. The Fund's ability to make such a mandatory
                    redemption  may be restricted by the  provisions of the 1940
                    Act.

<PAGE>

Optional            The Preferred  Shares are  redeemable at the option
Redemption          of the Fund, as a whole or in part, on any dividend  payment
                    date  (except  on an  initial  dividend  payment  date  or a
                    special  dividend  period with respect to which the Fund has
                    agreed  not  to  redeem  Preferred  Shares   voluntarily  (a
                    "Non-Call  Period"))  at the  optional  redemption  price of
                    $25,000 per share, plus an amount equal to dividends thereon
                    (whether or not earned or declared)  accumulated  but unpaid
                    to the date fixed for redemption  plus the premium,  if any,
                    resulting from the  designation of a Premium Call Period.  A
                    "Premium  Call Period" is a period  during  which  Preferred
                    Shares  are only  redeemable  at the option of the Fund at a
                    price per share equal to $25,000 plus accumulated but unpaid
                    dividends, plus a premium.

Liquidation         The  liquidation  preference  for the Preferred
Preference          Shares will be $25,000 per share plus accumulated but unpaid
                    dividends, if any, whether or not declared. See "Description
                    of Preferred Shares - Liquidation."

Voting Rights       The holders of preferred shares, including the
                    Preferred Shares, voting as a separate class, have the right
                    to elect at least two  Directors  of the Fund at all  times.
                    Such  holders also have the right to elect a majority of the
                    Directors  in the event  that two years'  dividends  on such
                    preferred  shares are unpaid.  In each case,  the  remaining
                    Directors  will be elected  by holders of common  shares and
                    preferred  shares,  including the Preferred  Shares,  voting
                    together as a single class. The holders of preferred shares,
                    including  the  Preferred  Shares,  will vote as a  separate
                    class or classes on certain other matters required under the
                    Articles  Supplementary,  the 1940 Act and Maryland law. See
                    "Description of Preferred Shares - Voting Rights."

Auction  Procedure  Unless  otherwise  permitted by the Fund,
                    investors  may only  participate  in auctions  through their
                    Broker-Dealers.  The process for  determining the applicable
                    rate on the  Preferred  Shares  described in this section is
                    referred to as the "Auction  Procedures" and each setting of
                    the applicable rate is referred to as an "auction."

                    Prior to the  submission  deadline on each auction date each
                    customer of a Broker-Dealer  who is listed on the records of
                    that Broker-Dealer (or, if applicable, the Auction Agent) as
                    a beneficial  owner of such shares may submit the  following
                    types  of   orders   with   respect   to   shares   to  that
                    Broker-Dealer:

                    1. Hold Order - indicating its desire to hold shares without
                    regard to the applicable rate for the next dividend period.

                    2. Bid -  indicating  its  desire  to  purchase  or hold the
                    indicated  number  of  shares  at  $25,000  per share if the
                    applicable  rate for shares for the next dividend  period is
                    not less than the rate  specified in the bid. A bid order by
                    an existing  holder will be deemed an  irrevocable  offer to
                    sell shares at $25,000 per share if the applicable  rate for
                    shares for the next dividend period is less than the rate or
                    spread specified in the bid.

                    3. Sell  Order -  indicating  its  desire to sell  shares at
                    $25,000 per share without regard to the applicable  rate for
                    the next dividend period.

                    A beneficial  owner may submit  different types of orders to
                    its Broker-Dealer with respect to different Preferred Shares
                    then held by the  beneficial  owner.  A beneficial  owner of
                    such shares that submits its bid with respect to such shares
                    to its  Broker-Dealer  having a rate higher than the maximum
                    applicable  rate for such shares on the auction date will be
                    treated   as   having   submitted   a  sell   order  to  its
                    Broker-Dealer.  A  beneficial  owner of shares that fails to
                    submit an order to its  Broker-Dealer  with  respect to such
                    shares will  ordinarily  be deemed to have  submitted a hold
                    order  with  respect  to such  shares to its  Broker-Dealer.
                    However,  if a beneficial owner of shares fails to submit an
                    order with respect to such shares to its  Broker-Dealer  for
                    an auction  relating  to a special  dividend  period of more
                    than ___ days, such beneficial  owner will be deemed to have
                    submitted  a sell order to its  Broker-Dealer.  A sell order
                    constitutes  an  irrevocable  offer  to sell  the  Preferred
                    Shares  subject to the sell order.  A beneficial  owner that
                    offers  to  become  the   beneficial   owner  of  additional
                    Preferred Shares is, for purposes of such offer, a potential
                    holder as discussed below.

<PAGE>

                    A  potential  holder is a customer of a  Broker-Dealer  that
                    either (i) is not a beneficial owner of Preferred Shares but
                    wishes to purchase  shares or (ii) is a beneficial  owner of
                    Preferred Shares that wishes to purchase  additional shares.
                    A potential  holder may submit bids to its  Broker-Dealer in
                    which it offers to  purchase  shares at $25,000 per share if
                    the applicable  rate for shares for the next dividend period
                    is not  less  than the  specified  rate in such  bid.  A bid
                    placed by a  potential  holder of shares  specifying  a rate
                    higher  than the maximum  applicable  rate for shares on the
                    auction date will not be accepted.

                    The  Broker-Dealers  in turn will submit the orders of their
                    respective customers who are beneficial owners and potential
                    holders  to  the  Auction  Agent.  The  Broker-Dealers  will
                    designate  themselves  (unless  otherwise  permitted  by the
                    Fund) as  existing  holders  of  shares  subject  to  orders
                    submitted or deemed submitted to them by beneficial  owners.
                    They will  designate  themselves  as  potential  holders  of
                    shares  subject  to orders  submitted  to them by  potential
                    beneficial owners. However, neither the Fund nor the Auction
                    Agent will be responsible for a  Broker-Dealer's  failure to
                    comply with these Auction Procedures.  Any order placed with
                    the Auction Agent by a  Broker-Dealer  as or on behalf of an
                    existing  holder or a  potential  holder will be treated the
                    same  way  as an  order  placed  with a  Broker-Dealer  by a
                    beneficial owner or potential  beneficial owner.  Similarly,
                    any  failure  by a  Broker-Dealer  to submit to the  Auction
                    Agent  an  order  for  any  Preferred  Shares  held by it or
                    customers  who are  beneficial  owners  will be treated as a
                    beneficial owner's failure to submit to its Broker-Dealer an
                    order  in  respect  of  Preferred   Shares  held  by  it.  A
                    Broker-Dealer  may also submit  orders to the Auction  Agent
                    for its own  account  as an  existing  holder  or  potential
                    holder, provided it is not an affiliate of the Fund.

                    There are sufficient  clearing bids for shares in an auction
                    if the  number of shares  subject to bids  submitted  to the
                    Auction Agent by  Broker-Dealers  for potential holders with
                    rates  or  spreads  equal  to  or  lower  than  the  maximum
                    applicable  rate is at least  equal to or exceeds the sum of
                    the number of shares  subject to sell  orders and the number
                    of shares subject to bids specifying rates or spreads higher
                    than  the  maximum   applicable  rate  submitted  or  deemed
                    submitted  to  the  Auction  Agent  by  Broker-Dealers   for
                    existing holders.  If there are sufficient clearing bids for
                    shares,   the  applicable  rate  for  shares  for  the  next
                    succeeding  dividend  period thereof will be the lowest rate
                    specified in the submitted  bids which,  taking into account
                    such rate and all lower rates bid by Broker-Dealers as or on
                    behalf of existing  holders  and  potential  holders,  would
                    result in existing holders and potential  holders owning the
                    shares available for purchase in the auction.

                    If there are not  sufficient  clearing bids for such shares,
                    the applicable rate for the next dividend period will be the
                    maximum applicable rate on the auction date. However, if the
                    Fund has  declared a special  dividend  period and there are
                    not  sufficient  clearing  bids,  the  election of a special
                    dividend  period will not be  effective  and the  applicable
                    rate for the next rate period will be the same as during the
                    current rate period.  If there are not  sufficient  clearing
                    bids,  beneficial  owners  of  Preferred  Shares  that  have
                    submitted  or are deemed to have  submitted  sell orders may
                    not be able to sell in the  auction  all  shares  subject to
                    such  sell  orders.  If all of  the  applicable  outstanding
                    Preferred  Shares are the subject of submitted  hold orders,
                    then  the  dividend   period   following  the  auction  will
                    automatically  be the same  length as the  minimum  dividend
                    period and the applicable  rate for the next dividend period
                    will  be 90% of  the  Reference  Rate  on  the  date  of the
                    applicable auction.

                    The  Auction  Procedures  include a pro rata  allocation  of
                    shares for purchase and sale which may result in an existing
                    holder continuing to hold or selling,  or a potential holder
                    purchasing,  a number of Preferred  Shares that is different
                    than the number of shares  specified  in its  order.  To the
                    extent  the   allocation   procedures   have  that   result,
                    Broker-Dealers  that have designated  themselves as existing
                    holders or potential  holders in respect of customer  orders
                    will be required to make  appropriate  pro rata  allocations
                    among their respective customers.

                    The  following  is a  simplified  example  of how a  typical
                    auction  works.  Assume that the Fund has 1,000  outstanding
                    Preferred  Shares  and  three  current  holders.  The  three
                    current  holders and three  potential  holders submit orders
                    through broker-dealers at the auction:
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
        Holder                          Goal                            Action

<S>                             <C>                             <C>
Current Holder A...........     Owns 500 shares, wants to       Bid order of 4.1% rate for
                                sell all 500 shares if          all 500 shares
                                auction rate is less than
                                4.1%

Current Holder B...........     Owns 300 shares, wants to       Hold order - will take the
                                hold                            auction rate

Current Holder C...........     Owns 200 shares, wants to       Bid order of 3.9% rate for
                                sell all 200 shares if          all 200 shares
                                auction rate is less than
                                3.9%

Current Holder D...........     Wants to buy 200 shares         Places order to buy at or
                                                                above 4.0%

Current Holder E...........     Wants to buy 300 shares         Places order to buy at or
                                                                above 3.9

Current Holder F...........     Wants to buy 200 shares         Places order to buy at or
                                                                above 4.1%
</TABLE>

                    The  lowest  dividend  rate  that  will  result in all 1,000
                    Preferred Shares in the above example  continuing to be held
                    is 4.0% (the offer by D). Therefore,  the dividend rate will
                    be 4.0%.  Current holders B and C will continue to own their
                    shares.  Current  holder A will sell its shares  because A's
                    dividend  rate  bid  was  higher  than  the  dividend  rate.
                    Potential  holder D will buy 200 shares and potential holder
                    E will buy 300  shares  because  their bid rates  were at or
                    below the dividend rate. Potential holder F will not buy any
                    shares because its bid rate was above the dividend rate.

<TABLE>
<S>                 <C>
Federal  Income     The Fund intends to take the  position  that
Taxation            under  present law,  the  Preferred  Shares will  constitute
                    stock  of  the  Fund.  Distributions  with  respect  to  the
                    Preferred Shares (other than  distributions in redemption of
                    the Preferred  Shares that are treated as exchanges of stock
                    under Section 302(b) of the Code) will constitute  dividends
                    to the extent of the Fund's current or accumulated  earnings
                    and  profits  as  calculated  for U.S.  federal  income  tax
                    purposes.   The  dividends  generally  will  be  taxable  as
                    ordinary income.  Distributions of net capital gain that are
                    designated  by the Fund as capital gain  dividends,  if any,
                    however,  will be treated as long-term capital gains without
                    regard to the length of time the shareholder has held shares
                    of the Fund.



Administrator, Custodian,    Fund Administrative Services, LLC serves as the Fund's
Transfer Agent, Registrar    co-administrator. Under its Administration Agreement
and Dividend Disbursing      with the Fund, FAS provides certain administrative and
Agent                        executive management services to the Fund including:
                             providing the Fund's principal offices and executive officers,
                             overseeing and administering all contracted service
                             providers, making recommendations to the Board
                             regarding policies of the Fund, conducting
                             shareholder relations, authorizing expenses and
                             other administrative tasks.

                    Under the Administration  Agreement,  FAS receives a monthly
                    fee  calculated  at an annual  rate of 0.20% of the value of
                    the Fund's  average  monthly net assets up to $250  million;
                    0.18% of the Fund's  average  monthly net assets on the next
                    $150 million;  and 0.15% on the value of the Fund's  average
                    monthly assets over $400 million.  FAS has agreed to waive a
                    portion  of its fee in order to limit the  Fund's  the total
                    monthly administration  expenses (including  administration,
                    co-administration,  transfer  agent and  custodian  fees) to
                    0.30% of the Fund's average  monthly net assets.  The equity
                    owners of FAS are Evergreen Atlantic, LLC and the Lola Brown
                    Trust  No.  1B,  each  of  which  is  considered  to  be  an
                    "affiliated  person"  of the Fund as that term is defined in
                    the 1940 Act.

                    Investors Bank & Trust Company  ("Investors Bank") serves as
                    the Fund's  co-administrator and custodian.  As compensation
                    for  its   services,   Investors   Bank   receives   certain
                    out-of-pocket  expenses,  transaction  fees and  asset-based
                    fees of ___%, which are accrued daily and paid monthly.

                    PFPC Inc. ("PFPC"), an indirect,  majority-owned  subsidiary
                    of PNC Financial  Services Group, Inc., serves as the Fund's
                    transfer agent,  dividend-paying agent and registrar for the
                    Fund's common stock. As compensation  for PFPC's services as
                    such,  the  Fund  pays  PFPC  a  monthly  fee  plus  certain
                    out-of-pocket expenses.

                    Deutsche Bank Trust  Company  Americas will serve as Auction
                    Agent,  transfer agent,  dividend paying agent and registrar
                    for the Preferred Shares.
</TABLE>
<PAGE>


                        FINANCIAL HIGHLIGHTS (UNAUDITED)

The  table  below  sets  forth  selected  financial  data,  including  operating
performance  data,  total investment  returns,  ratios to average net assets and
other  supplemental  data,  for a share of the Fund's  common stock  outstanding
throughout the period presented.  The per share operating performance and ratios
for the period  ending June 30, 2001 and prior years were  audited by the Fund's
previous independent  registered public accounting firm. The per share operating
performance  and ratios for the periods ended June 30, 2002,  2003 and 2004 were
audited by _________,  the Fund's independent registered public accounting firm,
as stated in their report which is  incorporated by reference into the Statement
of  Additional  Information.   The  following  information  should  be  read  in
conjunction  with  the  Financial  Statements  and  Notes  thereto,   which  are
incorporated by reference into the Statement of Additional Information.

                             [INSERT FINANCIAL DATA]

The information  above  represents the operating  performance  data for a common
share  outstanding,  total investment  return,  ratios to average net assets and
other  supplemental  data for the period  indicated.  This  information has been
determined based upon financial information provided in the financial statements
and market value data for the Fund's common shares.

As of July  ___,  2005,  the Fund had a bank  line of  credit  in the  amount of
$20,000,000  (defined  above as the  "Bank  Debt")  of which it had  drawn  down
$20,000,000. The Bank Debt is used for investment and will be repaid entirely in
conjunction with the Offering out of the proceeds of the Offering. The following
table depicts the outstanding Bank Debt as of July ___, 2005 and the end of each
fiscal year within the most recent 10 years  during  which the Fund had the Bank
Debt or any other bank debt outstanding.

<TABLE>
<CAPTION>
                 Year                     Total Amount Outstanding Exclusive           Asset Coverage Per Unit
                                                of Treasury Securities
              <S>                                     <C>                                       <C>

              11/30/2003                              $20,000,000                               4.79
              11/30/2004                              $18,000,000                               5.80
               6/30/2005                              $20,000,000                               5.41
</TABLE>


                                    THE FUND

The  Fund  is  a  non-diversified,   closed-end  management  investment  company
organized as a Maryland  corporation in October 1972.  From its  inception,  and
prior to April 26,  2002,  the Fund was named USLife  Income Fund,  Inc. and was
virtually 100% invested in corporate  bonds. In January 2002, the Fund's largest
shareholder,  the Ernest Horejsi Trust No. 1B,  succeeded in replacing the Board
of  Directors  with a slate of its  nominees.  Soon  thereafter,  in April 2002,
shareholder  approved  changing the Fund's  investment  objective  and corporate
name, changing the Fund's classification from diversified to non-diversified and
changing  or  eliminating  a  number  of  the  Fund's   fundamental   investment
restrictions.  Thereafter,  the Fund began the process of  liquidating  its bond
portfolio  and started  investing  in common  equities  consistent  with the new
investment  objective.  As of July ___,  2005,  the Fund had none of its  assets
invested in bonds.

As of July ___, 2005, the Fund had _________ shares of common stock outstanding.
The Fund's  common  shares  are  traded on the NYSE under the symbol  "BIF." The
average  weekly trading volume of the Fund's common stock on the NYSE during the
period from ____________ through  _____________ was ____shares.  As of July ___,
2005, the net assets of the Fund were approximately $___________.

The following  provides  information about the Fund's  outstanding  shares as of
_________, 2005:

<TABLE>
        <S>                     <C>             <C>                     <C>
        Title of class          Amount          Amount held by          Amount
                                Authorized      the Fund for its        Outstanding
                                                Account

        Common Shares........   240,000         0

        Preferred Shares

        Preferred Shares.....   1,000           0                       0
</TABLE>


                                 USE OF PROCEEDS

The net  proceeds  of the  Offering  will be  approximately  $24,________  after
payment of offering  expenses  (estimated  to be  $_______)  and the sales load.
Approximately  $_____ of the net  proceeds  will be used to redeem the Bank Debt
(which has an  interest  rate of __% and  matures on  demand),  with the balance
being invested in accordance with the Fund's  investment  objective and policies
as  soon  as  practicable.  We  anticipate  that  we  will  be  able  to  invest
substantially all of such net proceeds within  approximately  three months after
completion of this offering.  Pending such investment,  we anticipate  investing
the  proceeds in  short-term  securities  issued by the U.S.  government  or its
agencies or instrumentalities  or in high quality,  short-term or long-term debt
obligations or money market instruments.

<PAGE>

                           CAPITALIZATION (UNAUDITED)

The Fund's  Charter  authorizes  the  issuance of  250,000,000  shares of common
stock,  par value  $0.01 per  share.  In 2002,  Fund  shareholders  approved  an
amendment to the Fund's Charter which authorizes the Board,  without shareholder
approval, to increase the Fund's authorized capital. Pursuant to such amendment,
and in connection with a rights offering in 2002, the Board resolved to increase
the authorized capital of the Fund to its current level.

The  following  table sets forth the  capitalization  of the Fund as of July __,
2005,  and as adjusted to give effect to the  issuance of the  Preferred  Shares
offered  hereby  assuming  the  Fund  issues  [1,000 ] of the  Preferred  Shares
representing  approximately [ ] of the Fund's total assets (including  estimated
offering expenses of $[ ] and a sales load of $[_____] per Preferred Share). The
common shareholders' paid in capital is charged with the cost of issuance of the
Preferred Shares.

<TABLE>
<CAPTION>
                                                                Actual                  As Adjusted
<S>                                                          <C>                        <C>

Preferred Shares, $0.01 par value, $25,000 stated
value per share, at liquidation value, including
dividends payable; _______ shares authorized (no
shares issued); 1,000 shares issues, as adjusted             $___________               $___________

Shareholder's Equity:

   Common shares, $0.01 par value per share; ______
   shares authorized, _________ shares outstanding
   (1)                                                       $___________               $___________

   Undistributed net investment income                       $___________               $___________

   Accumulated net realized gain/loss on investments         $___________               $___________

   Net unrealized appreciation/depreciation on
   investments                                               $___________               $___________

   Net assets attributable to common shares                  $___________               $___________

   Net assets, plus liquidation preferences of
   Preferred Shares                                          $___________               $___________
</TABLE>

(1) None of these outstanding shares are held by or for the account of the Fund.


                        INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT OBJECTIVE.  The Fund's investment objective is total return. The Fund
seeks to produce both income and long-term capital  appreciation by investing in
a portfolio of equity and debt securities.  The Fund invests primarily in common
stocks,  including  dividend  paying  common  stocks  such as  those  issued  by
utilities,  REITs and  closed-end  RICs.  The Fund also  invests in fixed income
securities such as U.S. government  securities,  preferred stocks and bonds. The
Fund invests  primarily in securities  of  U.S.-based  companies and to a lesser
extent in foreign equity securities and sovereign debt, in each case denominated
in foreign  currency.  The Fund has no  restrictions on its ability to invest in
foreign securities. The Fund is concentrated in REITs which means it must invest
more than 25% of its total  assets in REITs  and  companies  in the real  estate
industry.  No assurance  can be given that the Fund will achieve its  investment
objective.

INVESTMENT  POLICIES.  The Fund is a  "non-diversified"  investment  company, as
defined in the 1940 Act,  which means that it is  permitted to invest its assets
in a more limited number of issuers than "diversified"  investment companies.  A
diversified  company may not,  with respect to 75% of its total  assets,  invest
more than 5% of its total assets in the securities of any one issuer and may not
own more  than  10% of the  outstanding  voting  securities  of any one  issuer.
However,  pursuant to the requirements of Subchapter M of the Code, (A) not more
than 25% of the Fund's  total  assets may be invested in  securities  of any one
issuer (other than U.S.  government  securities  and RICs) or of any two or more
issuers  controlled  by the Fund  which may be deemed to be engaged in the same,
similar  or related  trades or  businesses,  and (B) with  respect to 50% of the
total value of the Fund's  portfolio,  (i) the Fund must limit to 5% the portion
of its assets  invested in the  securities  of a single  issuer (other than U.S.
government  securities and RICs), and (ii) the Fund may not own more than 10% of
the outstanding voting securities of any one issuer (other than U.S.  government
securities  and  RICs).  The  Fund  intends  to  concentrate  its  common  stock
investments  in a few  issuers  and to take large  positions  in those  issuers,
consistent  with being a  "non-diversified"  fund. As a result,  the Fund may be
subject  to a greater  risk of loss than a  diversified  fund or a fund that has
diversified its investments more broadly. Taking larger positions is also likely
to increase the volatility of the Fund's net asset value, reflecting fluctuation
in the value of large Fund holdings.

<PAGE>

As a matter of investment policy, the Fund is concentrated in REITs, which means
it must,  under  normal  market  conditions,  invest  more than 25% of its total
assets in REITs or companies in the real estate  industry.  The Fund must obtain
shareholder  approval  prior to changing this policy.  The portion of the Fund's
assets  invested  in REITs and such  other  companies  will vary based on market
conditions,  but it is not  expected to exceed 50% of total  assets.  As of July
___, 2005,  ___% of the Fund's assets were invested in REITs.  Although the Fund
can invest in REITs of any size,  it  currently  intends to invest in REITs with
market capitalizations of greater than $500 million. Although the Fund generally
invests in U.S.  REITs,  such  companies  may invest  directly or  indirectly in
non-U.S.  properties, and the Fund may make direct investments in foreign REITs.
The Fund presently owns one foreign REIT security.

Under normal market  conditions,  the Fund intends to invest at least 80% of its
net assets in common stocks, primarily domestic common stocks and secondarily in
foreign   common   stocks   denominated   in   foreign   currencies.   The  term
"income-producing common stocks" includes RICs whose objective is income, REITs,
and other dividend-paying common stocks. Under the 1940 Act, the Fund must limit
to 10% the portion of its assets  invested in RICs,  and under  Subchapter M, no
single  investment  can  exceed 25% of the  Fund's  total  assets at the time of
purchase. These percentage limitations are calculated at the time of investment,
and the Fund is not  required  to dispose of assets if holdings  increase  above
these levels due to appreciation. As of July __, 2005, ___% of the Fund's assets
were invested in RICs,  and ___% of the Fund's assets were invested in Berkshire
Hathaway,  Inc. Class A shares.  The Fund has no  restrictions on its ability to
invest in foreign  securities.  As of July __, 2005,  ___% of the Fund's  assets
were invested in foreign securities.

The portion of the Fund's  assets that are not invested in common  stocks may be
invested  in  fixed  income  securities   (including   bonds,  U.S.   government
securities, notes, bills, debentures,  preferred stocks, convertible securities,
bank  debt  obligations,  repurchase  agreements  and  short-term  money  market
obligations),  cash equivalents and income-producing common stocks. Under normal
circumstances,  the Fund will not have  more  than 10% of its  assets in cash or
cash equivalents.  The Fund may, for temporary  defensive  purposes,  allocate a
higher  portion of its assets to cash and cash  equivalents.  For this  purpose,
cash  equivalents  consist  of, but are not limited  to,  short-term  (less than
twelve months to maturity) U.S. government  securities,  certificates of deposit
and  other  bank  obligations,  investment  grade  corporate  bonds  other  debt
instruments and repurchase agreements.

The Fund is also subject to the following fundamental  policies,  which may only
be changed with shareholder approval. The Fund may not:

     1.   Issue any senior securities except as permitted under the 1940 Act.

     2.   Invest in the  securities  of  companies  conducting  their  principal
          business  activity in the same  industry  if,  immediately  after such
          investment, the value of its investments in such industry would exceed
          25% of the value of its total assets;  provided  that this  limitation
          will not apply to REITs or related  companies in the same  industry as
          REITs.

     3.   Participate  on a joint or a joint and  several  basis in any  trading
          account  in  securities,  except  that the  Fund  may,  to the  extent
          permitted  by  rules,  regulations  or orders  of the  Securities  and
          Exchange Commission,  combine orders with others for the purchases and
          sales of securities in order to achieve the best overall execution.

     4.   Purchase or sell interests in oil, gas or other mineral exploration or
          development programs.

     5.   Purchase or sell real  estate,  except  that the Fund may  purchase or
          sell  interests  in REITs and  securities  secured  by real  estate or
          interests  therein issued by companies owning real estate or interests
          therein.

     6.   Purchase or sell commodities or commodity contracts.

     7.   Make loans other than  through  the  purchase  of debt  securities  in
          private  placements  and  the  loaning  of  portfolio   securities  as
          described under "Investment Objective and Policies".

     8.   Borrow money in an amount  exceeding the maximum  permitted  under the
          1940 Act.

     9.   Underwrite  securities of other  issuers,  except insofar as it may be
          deemed to be an underwriter in selling a portfolio  security which may
          require registration under the Securities Act of 1933, as amended (the
          "Securities Act").

     10.  Invest  more than 30% of the value of its total  assets in  securities
          which have been acquired through private placements.

     11.  Purchase or retain the  securities  of any  issuer,  if, to the Fund's
          knowledge,  those officers and directors of the Fund or its investment
          advisers who individually own beneficially  more than 1/2 of 1% of the
          outstanding securities of such issuer,  together own beneficially more
          than 5% of such outstanding securities.

<PAGE>

     12.  Pledge,  mortgage or hypothecate  its assets except in connection with
          permitted borrowing and to the extent related to transactions in which
          the Fund is authorized to engage.

Except  for  the  Fund's  investment  objective,   industry   concentration  and
fundamental  investment  restrictions as described in this prospectus and in the
Statement of Additional  Information,  the percentage limitations and investment
policies  set forth in this  prospectus  can be  changed  by the  Board  without
shareholder approval.

OTHER INVESTMENT TECHNIQUES. The Fund may engage in other types of transactions,
including, but not limited to, investment in restricted and illiquid securities,
repurchase   agreements,   when-issued  and  forward  commitment   transactions,
borrowing,  securities lending and other transactions. For a description of such
types of  transactions,  see  "Investment  Policies and  Techniques"  and "Other
Investment Policies and Techniques" in the Statement of Additional Information.


                              INVESTMENT PHILOSOPHY

COMMON  STOCKS.  With respect to the Fund's common stock  portfolio  (other than
common stocks purchased  primarily for their  income-producing  potential),  the
Advisers use an "intrinsic  value" approach to selecting and managing the Fund's
assets.  The Advisers define intrinsic value as the discounted value of the cash
that can be taken out of a business during its remaining life.  Accordingly,  in
their  securities  selection  process,  the  Advisers  put  primary  emphasis on
analysis of balance  sheets,  cash  flows,  the  quality of  management  and its
ability to  efficiently  and  effectively  allocate  capital,  various  internal
returns which indicate  profitability,  and the relationships that these factors
have to the price of a given security.  The intrinsic value approach is based on
the belief that the securities of certain  companies may sell at a discount from
the Advisers'  estimate of such companies'  "intrinsic value". The Advisers will
attempt to identify and invest in such  securities,  with the  expectation  that
such value discount will narrow over time and thus provide capital  appreciation
for the Fund. When the Fund makes an investment in common stock of an issuer, it
will likely make a significant  investment  and typically  hold such stock for a
long period of time. Over time, the Fund believes that value investing  produces
superior total returns.

FIXED INCOME  INVESTMENTS.  In seeking its total return objective,  the Fund may
invest a portion of its assets in U.S. government securities,  preferred stocks,
bonds and other income producing securities. In selecting such investments,  the
Advisers  consider,   among  other  things,  current  yield,  liquidity,   price
variability and the underlying  fundamental  characteristics of the issuer, with
particular emphasis on debt to equity and debt coverage ratios.

BONDS. Prior to April 26, 2002, the Fund was called USLIFE Income Fund, Inc. and
was  virtually  100%  invested in  corporate  bonds.  Since the Fund changed its
investment  objective on April 26, 2002, the Advisers have liquidated all of the
Fund's  bond  portfolio.  As of July __,  2005,  the Fund had none of its assets
invested in bonds.


                               PORTFOLIO CONTENTS

At any  given  time,  the  Fund  has  some or all of the  types  of  investments
described below. Under normal market conditions, the Fund invests primarily in a
portfolio of common  stocks and income  producing  securities  such as stocks of
REITs, RICs and utilities, bonds and preferred stocks.

COMMON  STOCKS.  The Fund may invest all or any  portion of its assets in common
stock.  Common  stock is defined as shares of a  corporation  that  entitle  the
holder to a pro rata share of the profits of the  corporation,  if any,  without
preference  over any  other  shareholder  or class  of  shareholders,  including
holders of the  corporation's  preferred  stock and other senior equity.  Common
stock  usually  carries  with it the right to vote and  frequently  an exclusive
right to do so. Upon liquidation, holders of common stock also have the right to
participate in the assets of the corporation after all other claims are paid.

In selecting  common stocks for investment,  the Fund expects to focus primarily
on U.S.-based  companies,  although the Fund is permitted to invest in companies
outside the U.S.  Generally,  target  companies have  consistent high returns on
equity,  while using modest  amounts of debt relative to their  industries.  The
Fund seeks  investments in businesses the Advisers  understand which have fairly
predictable and improving future earnings, and most importantly,  are reasonably
priced relative to the businesses'  earnings and anticipated growth in earnings.
The Fund does not focus its investments in "large-cap", "mid-cap" or "small-cap"
companies  since  the  Advisers  believe  it  would be  unwise  to  impose  such
investment limitations.

REAL ESTATE INVESTMENT  TRUSTS (REITs).  As a matter of investment  policy,  the
Fund is  concentrated  in  REITs,  which  means it  will,  under  normal  market
conditions,  invest more than 25% of its total  assets in REITs or  companies in
the real estate  industry.  The Fund must obtain  shareholder  approval prior to
changing this policy.  REITs are trusts that invest primarily in commercial real
estate or real  estate-related  loans. A REIT is not taxed on income distributed
to its shareholders or unit-holders if it complies with regulatory  requirements
relating  to  its  organization,  ownership,  assets  and  income,  and  with  a
regulatory requirement that it distribute to its shareholders or unit-holders at
least 90% of its taxable income for each taxable year.  Generally,  REITs can be
classified as equity REITs, mortgage REITs and hybrid REITs. Equity REITs invest
the majority of their assets  directly in real  property and derive their income
primarily  from rents and  capital  gains  from  appreciation  realized  through
property  sales.  Mortgage  REITs  invest the  majority of their  assets in real
estate  mortgages  and derive their income  primarily  from  interest  payments.
Hybrid REITs combine the  characteristics  of both equity and mortgage REITs. By
investing in REITs indirectly through the Fund,  shareholders will bear not only
the  proportionate  share of the  expenses  of the Fund,  but also,  indirectly,
similar  expenses of underlying  REITs.  The Fund invests in REITs primarily for
income.

<PAGE>

The Fund may be subject to certain risks associated with the direct  investments
of the REITs.  REITs may be affected by changes in their  underlying  properties
and by defaults by borrowers or tenants.  Mortgage  REITs may be affected by the
quality of the credit extended.  Furthermore, REITs are dependent on specialized
management  skills.  Some  REITs  may have  limited  diversification  and may be
subject to risks  inherent in financing a limited  number of  properties.  REITs
depend generally on their ability to generate cash flow to make distributions to
shareholders or unit-holders, and may be subject to defaults by borrowers and to
self-liquidations. In addition, a REIT may be affected by its failure to qualify
for  tax-free  pass-through  of income under the Code or its failure to maintain
exemption from registration under the 1940 Act.

REGISTERED  INVESTMENT  COMPANIES (RICs).  The Fund is permitted to invest up to
10% of its assets in securities  issued by RICs.  The common stock of closed-end
RICs can trade at a substantial  discount to the  underlying  net asset value of
the RIC, and the Fund may, from time to time,  invest in common stocks issued by
RICs when they are trading at  discounts  or when the  Advisers  otherwise  deem
market conditions appropriate.  The Fund intends to normally invest in RICs that
pay  dividends.  RICs that pay regular  dividends  typically  own interest  rate
sensitive  securities,  which  tend to  increase  in value when  interest  rates
decline, and decrease in value when interest rates increase.  To the extent that
the Fund  invests in RICs,  the Fund's  shareholders  will incur  expenses  with
respect to both the Fund and that portion of the Fund's assets invested in other
RICs.  However,  as common  stocks of closed-end  RICs can trade at  substantial
discounts  to their  underlying  net asset  values,  the  Advisers  may deem the
"double"  expense to have minimal  impact when compared to the discount at which
the Fund may buy their  shares.  The net asset value and market  value of common
stock issued by RICs will fluctuate with the value of the underlying assets. The
Fund may invest in the auction market  preferred stock of other closed-end funds
primarily as a means of investing  the Fund's cash for the  short-term in higher
yielding  alternatives to repurchase  agreements or US treasury securities.  The
Fund will consider  investing cash in these  instruments,  and other  short-term
money market type alternatives,  when the yield spread is adequately  attractive
over repurchase agreements and US treasuries.  The Fund generally will invest in
auction  market  preferred  stocks that are rated AAA  although it may invest in
lower rated securities from time to time.

PREFERRED  STOCKS.  The Fund  may  invest  in  preferred  securities.  Preferred
securities are equity  securities,  but they have many  characteristics of fixed
income  securities,  such as a fixed  dividend  payment  rate and/or a liquidity
preference over the issuer's common shares.  However,  because  preferred shares
are  equity  securities,  they may be more  susceptible  to risks  traditionally
associated with equity investments than fixed income  securities.  Unlike common
stock, preferred securities typically do not have voting rights.

Fixed rate preferred  stocks have fixed dividend  rates.  They can be perpetual,
with no mandatory  redemption date, or issued with a fixed mandatory  redemption
date.  Certain  issues of  preferred  stock are  convertible  into other  equity
securities.  Perpetual  preferred stocks provide a fixed dividend throughout the
life of the issue, with no mandatory retirement provisions, but may be callable.
Sinking fund  preferred  stocks  provide for the  redemption of a portion of the
issue on a regularly scheduled basis with, in most cases, the entire issue being
retired  at a future  date.  The value of fixed  rate  preferred  stocks  can be
expected to vary inversely with interest rates. Adjustable rate preferred stocks
have a  variable  dividend  rate  which is  determined  periodically,  typically
quarterly,  according to a formula  based on a specified  premium or discount to
the  yield  on  particular  U.S.  Treasury  securities,  typically  the  highest
base-rate yield of one of three U.S.  Treasury  securities:  the 90-day Treasury
bill; the 10-year Treasury note; and either the 20-year or 30-year Treasury bond
or other index.  The premium or discount to be added to or subtracted  from this
base-rate  yield is fixed at the time of issuance and cannot be changed  without
the  approval  of the  holders of the  adjustable  rate  preferred  stock.  Some
adjustable  rate preferred  stocks have a maximum and a minimum rate and in some
cases are convertible into common stock.

Auction  rate  preferred  stocks pay  dividends  that  adjust  based on periodic
auctions. Such preferred stocks are similar to short-term corporate money market
instruments in that an auction rate preferred stockholder has the opportunity to
sell the preferred stock at par in an auction, normally conducted at least every
49 days, through which buyers set the dividend rate in a bidding process for the
next period.  The dividend rate set in the auction depends on market  conditions
and the credit quality of the  particular  issuer.  Typically,  the auction rate
preferred stock's dividend rate is limited to a specified maximum  percentage of
an external commercial paper index as of the auction date. Further, the terms of
the auction rate preferred stocks generally  provide that they are redeemable by
the issuer at certain times or under certain conditions.

The Fund may, from time to time, invest in preferred  securities that are rated,
or whose issuer's senior debt is rated, investment grade by Moody's and Standard
& Poor's ("S&P") at the time of investment,  although the Fund is not limited to
investments in investment grade preferred securities.  In addition, the Fund may
acquire  unrated  issues that the Advisers  deem to be  comparable in quality to
rated issues in which the Fund is authorized to invest.

MONEY MARKET INSTRUMENTS.  Under normal conditions,  the Fund may hold up to 10%
of its assets in cash or money market instruments. The Fund intends to invest in
money market  instruments  pending  investments  in common  stocks,  to serve as
collateral in connection with certain  investment  techniques,  and to hold as a
reserve pending the payment of dividends to investors. When the Advisers believe
that economic  circumstances warrant a temporary defensive posture, the Fund may
invest without limitation in short-term money market instruments.

<PAGE>

Money market  instruments  that the Fund may acquire  usually will be securities
rated  in the  highest  short-term  rating  category  by  Moody's  or S&P or the
equivalent from another major rating service, or securities of issuers that have
received  such  ratings  with  respect to other  short-term  debt or  comparable
unrated securities. Money market instruments in which the Fund typically expects
to invest include:  Government  Securities (as defined below);  bank obligations
(including  certificates of deposit,  time deposits and bankers'  acceptances of
U.S. or foreign banks); commercial paper rated P-l by Moody's or A-1 by S&P; and
repurchase agreements.

REPURCHASE AGREEMENTS.  The Fund may invest temporarily,  without limitation, in
repurchase  agreements,  which are agreements  pursuant to which  securities are
acquired by the Fund from a third party with the understanding that they will be
repurchased by the seller at a fixed price on an agreed date.  These  agreements
may be made with respect to any of the portfolio securities in which the Fund is
authorized  to  invest.  Repurchase  agreements  may be  characterized  as loans
secured  by the  underlying  securities.  The Fund  may  enter  into  repurchase
agreements  with (i) member  banks of the Federal  Reserve  System  having total
assets in excess of $500 million and (ii) securities dealers, provided that such
banks or dealers  meet certain  creditworthiness  standards  established  by the
Board.  The resale price reflects the purchase price plus an agreed-upon  market
rate of interest  which is  unrelated  to the coupon rate or date of maturity of
the  purchased  security.  The  collateral  is  marked  to  market  daily.  Such
agreements  permit  the  Fund to keep  all its  assets  earning  interest  while
retaining  "overnight"  flexibility  in pursuit of  investments of a longer term
nature.

GOVERNMENT SECURITIES. The Fund may invest in government securities that include
direct  obligations  of  the  United  States  and  obligations  issued  by  U.S.
government agencies and instrumentalities  ("Government  Securities").  Included
among direct obligations of the United States are treasury bills, treasury notes
and treasury bonds,  which differ  principally in terms of their  maturities and
are  supported by the full faith and credit of the U.S.  government.  Securities
issued  by  U.S.  government  agencies  and   instrumentalities   include  other
securities  that are supported by the full faith and credit of the United States
(such as Government National Mortgage Association certificates); securities that
are supported by the right of the issuer to borrow from the U.S.  Treasury (such
as securities of Federal Home Loan Banks);  and securities that are supported by
the credit of the instrumentality (such as Federal National Mortgage Association
and Federal Home Loan  Mortgage  Corporation  bonds).  No assurance can be given
that the U.S.  government will provide  financial  support in the future to U.S.
government agencies,  authorities or instrumentalities that are not supported by
the full faith and  credit of the United  States.  Securities  guaranteed  as to
principal  and interest by the U.S.  government,  its agencies,  authorities  or
instrumentalities  include (i) securities for which the payment of principal and
interest  is  backed  by an  irrevocable  letter  of  credit  issued by the U.S.
government or any of its agencies,  authorities or  instrumentalities;  and (ii)
participations in loans made to non-U.S.  governments or other entities that are
so  guaranteed.  The  secondary  market for certain of these  participations  is
limited and therefore may be regarded as illiquid.

ZERO  COUPON  SECURITIES.  The Fund may invest up to 10% of its total  assets in
zero  coupon  securities  issued  by  the  U.S.  government,   its  agencies  or
instrumentalities, as well as custodial receipts or certificates underwritten by
securities dealers or banks that evidence ownership of future interest payments,
principal  payments  or both  on  certain  government  securities.  Zero  coupon
securities  pay no cash income to their holders until they mature and are issued
at substantial  discounts  from their value at maturity.  When held to maturity,
their entire return comes from the  difference  between their purchase price and
their maturity value.  Because interest on zero coupon securities is not paid on
a current  basis,  the values of  securities of this type are subject to greater
fluctuations  than are the values of securities that distribute income regularly
and may be more  speculative than such  securities.  Accordingly,  the values of
these  securities  may be highly  volatile  as interest  rates rise or fall.  In
addition,  the Fund's  investments  in zero  coupon  securities  will  result in
special tax  consequences.  Although zero coupon securities do not make interest
payments,  for tax  purposes a portion of the  difference  between a zero coupon
security's  maturity  value and its purchase price is taxable income of the Fund
each year.

Custodial  receipts  evidencing  specific coupon or principal  payments have the
same  general  attributes  as  zero  coupon  Government  Securities  but are not
considered to be Government Securities.  Although typically under the terms of a
custodial  receipt the Fund is authorized to assert its rights directly  against
the issuer of the  underlying  obligation,  the Fund may be  required  to assert
through  the  custodian  bank such rights as may exist  against  the  underlying
issuer.  Thus, in the event the underlying  issuer fails to pay principal and/or
interest  when due,  the Fund may be subject to delays,  expenses and risks that
are greater than those that would have been involved if the Fund had purchased a
direct  obligation  of the issuer.  In addition,  in the event that the trust or
custodial  account  in which  the  underlying  security  has been  deposited  is
determined  to  be  an  association  taxable  as  a  corporation,  instead  of a
non-taxable  entity,  the yield on the  underlying  security would be reduced in
respect of any taxes paid.

LENDING OF  SECURITIES.  The Fund is authorized  to lend  securities it holds to
brokers, dealers and other financial  organizations,  although it has no current
intention of doing so. Loans of the Fund's securities, if and when made, may not
exceed 33-1/3% of the Fund's total assets.  The Fund's loans of securities  will
be collateralized by cash, letters of credit or Government  Securities that will
be maintained at all times in a segregated  account with the Fund's custodian in
an amount at least equal to the current  market value of the loaned  securities.
From  time to  time,  the Fund may pay a part of the  interest  earned  from the
investment of collateral received for securities loaned to the borrower and/or a
third party that is unaffiliated with the Fund and that is acting as a "finder."

By  lending  its  portfolio  securities,  the Fund can  increase  its  income by
continuing to receive interest on the loaned  securities,  by investing the cash
collateral  in  short-term  instruments  or by  obtaining  yield  in the form of
interest paid by the borrower when Government Securities are used as collateral.
The risk in lending  portfolio  securities,  as with other extensions of credit,
consists of the  possible  delay in recovery of the  securities  or the possible
loss of rights in the collateral should the borrower fail financially.  The Fund
will adhere to the following  conditions  whenever it lends its securities:  (i)
the Fund must receive at least 100% cash  collateral  or  equivalent  securities
from the borrower, which will be maintained by daily marking-to-market; (ii) the
borrower  must  increase  the  collateral  whenever  the  market  value  of  the
securities  loaned rises above the level of the collateral;  (iii) the Fund must
be able to terminate the loan at any time; (iv) the Fund must receive reasonable
interest on the loan, as well as any dividends,  interest or other distributions
on the loaned  securities and any increase in market value; (v) the Fund may pay
only  reasonable  custodian  fees in connection  with the loan;  and (vi) voting
rights on the loaned  securities  may pass to the  borrower,  except that,  if a
material  event  adversely  affecting the  investment  in the loaned  securities
occurs,  the Board must  terminate  the loan and regain the Fund's right to vote
the securities.

<PAGE>

PORTFOLIO  TURNOVER.  Although the Advisers are not  restricted  with respect to
portfolio  turnover,  it is not the Fund's policy to engage in transactions with
the objective of seeking  profits from short-term  trading.  It is expected that
the annual  portfolio  turnover rate of the Fund will be less than 50% excluding
securities  having a maturity of one year or less.  Because it is  difficult  to
accurately  predict portfolio  turnover rates,  actual turnover may be higher or
lower.  Higher portfolio turnover results in increased Fund expenses,  including
brokerage  commissions,  dealer mark-ups and other transaction costs on the sale
of securities and on the reinvestment in other securities.  For the fiscal years
ended  November 30, 2003 and November 30, 2004,  the Fund's  portfolio  turnover
rates were 40% and 33%, respectively.


                                  RISK FACTORS

Risk is inherent in all investing.  Investing in any investment company security
involves  risk,  including the risk that you may receive  little or no return on
your investment or that you may lose part or all of your investment.  Therefore,
before  investing you should  consider  carefully  the following  risks that you
assume when you invest in Preferred Shares.

LEVERAGE  RISK.  The Fund expects to use financial  leverage on an ongoing basis
for investment purposes.  Taking into account the Preferred Shares being offered
in this prospectus, and the retirement of the Bank Debt with the proceeds of the
Preferred Shares, the amount of leverage would, as of July ___, 2005,  represent
approximately  ____% of the Fund's total assets.  The Fund's  leveraged  capital
structure  creates special risks not associated with unleveraged  funds having a
similar  investment  objectives and policies.  These include the  possibility of
higher  volatility  of both the net  asset  value  of the Fund and the  value of
assets serving as asset coverage for the Preferred Shares.

Because  the fee paid to the  Advisers  will be  calculated  on the basis of the
Fund's  managed assets (which equals the aggregate net asset value of the common
shares plus the liquidation preference of the Preferred Shares), the fee will be
higher when  leverage is  utilized,  giving the Advisers an incentive to utilize
leverage.

INTEREST RATE RISK.  The Preferred  Shares pay dividends  based on  shorter-term
interest rates. The Fund presently has invested the proceeds of the Bank Debt in
REITs and other dividend paying and income producing  securities  (defined above
as "Income Producing  Securities") and anticipates  continuing to do so in order
to generate  sufficient income to pay interest on the Preferred Shares when due.
The dividends and rates paid on the Income Producing  Securities can be expected
to fluctuate. If short-term interest rates rise, dividend rates on the Preferred
Shares  will also rise since the  auction  setting the  dividends  on  Preferred
Shares  will  compete  for  investors  with  other  short-term  instruments.   A
significant  increased dividend rate on the Fund's Preferred Shares could result
in the Fund under-earning its Preferred Shares dividend, which would lead to the
Preferred Shares shareholders receiving a return of capital,  assuming there are
no capital gains to be paid out.  Similarly,  if the rating  agencies  lower the
rating  assigned to the  Preferred  Shares,  the dividend  rate on the Preferred
Shares will likely  increase.  The Fund must pay all its expenses  before it can
pay any dividends, including any Preferred Shares dividends.

AUCTION RISK. The dividend rate for the Preferred Shares normally is set through
an auction process. In the auction, holders of Preferred Shares may indicate the
dividend  rate at which they  would be  willing to hold or sell their  Preferred
Shares or  purchase  additional  Preferred  Shares.  The auction  also  provides
liquidity for the sale of Preferred  Shares.  An auction fails if there are more
Preferred Shares offered for sale than there are buyers.  You may not be able to
sell your  Preferred  Shares at an auction if the auction fails. A holder of the
Preferred  Shares  therefore  can be  given  no  assurance  that  there  will be
sufficient  clearing bids in any auction or that the holder will be able to sell
its Preferred  Shares in an auction.  Also,  if you place bid orders  (orders to
retain  Preferred  Shares) at an auction only at a specified  dividend rate, and
that  rate  exceeds  the rate set at the  auction,  you  will  not  retain  your
Preferred Shares.  Additionally,  if you buy Preferred Shares or elect to retain
Preferred  Shares  without  specifying a dividend rate below which you would not
wish to buy or  continue to hold those  Preferred  Shares,  you could  receive a
lower rate of return on your Preferred Shares than the market rate. Finally, the
dividend periods for the Preferred Shares may be changed by the Fund, subject to
certain  conditions with notice to the holders of Preferred Shares,  which could
also affect the liquidation of your  investment.  See  "Description of Preferred
Shares" and "The Auction - Auction Procedures."

As noted above, if there are more auction rate securities  offered for sale than
there are buyers for those auction rate  securities in any auction,  the auction
will  fail  and you may not be  able to sell  some or all of your  auction  rate
securities  at that time.  The  relative  buying and selling  interest of market
participants  in your auction rate securities and in the auction rate securities
market as a whole will vary over time,  and such  variations may be affected by,
among  other  things,  news  relating  to  the  issuer,  the  attractiveness  of
alternative  investments,  the  perceived  risk of owning the security  (whether
related to credit,  liquidity or any other risk), the tax treatment accorded the
instruments,   the  accounting   treatment  accorded  auction  rate  securities,
including recent clarifications of U.S. generally accepted accounting principles
relating to the  treatment of auction rate  securities,  reactions to regulatory
actions or press  reports,  financial  reporting  cycles  and  market  sentiment
generally.  Shifts of demand in response to any one or  simultaneous  particular
events cannot be predicted and may be short-lived or exist for longer periods.

<PAGE>

SECONDARY MARKET RISK. If you try to sell your Preferred Shares between auctions
you may not be able to sell any or all of your  Preferred  Shares or you may not
be able to sell them for $25,000 per share or $25,000 per share plus accumulated
but unpaid  dividends.  If the Fund has designated a special  dividend period (a
rate period of more than  twenty-eight  days),  changes in interest  rates could
affect  the price you would  receive  if you sold your  Preferred  Shares in the
secondary market.  You may transfer Preferred Shares outside of auctions only to
or through a Broker-Dealer that has entered into a Broker-Dealer  Agreement,  or
other  persons  as the Fund  permits.  The Fund  does  not  anticipate  imposing
significant restrictions on transfers to other persons. However, unless any such
other  person has entered  into a  relationship  with a  Broker-Dealer  that has
entered into a Broker-Dealer  Agreement with the Auction Agent, that person will
not be able to submit bids at auctions  with  respect to the  Preferred  Shares.
Broker-Dealers that maintain a secondary trading market for Preferred Shares are
not  required to maintain  this  market,  and the Fund is not required to redeem
Preferred  Shares  either if an auction or an  attempted  secondary  market sale
fails because of a lack of buyers.  The Preferred Shares will not be listed on a
stock exchange or the Nasdaq National Market.  If you sell your Preferred Shares
to a  Broker-Dealer  between  auctions,  you may receive less than the price you
paid for them,  especially  if market  interest  rates have risen since the last
auction. In addition, a Broker-Dealer may, in its own discretion, decide to sell
the Preferred Shares in the secondary market to investors at any time and at any
price,  including at prices  equivalent  to, below or above the par value of the
Preferred Shares.

SECURITIES AND EXCHANGE COMMISSION INQUIRIES.  The Underwriters have advised the
Fund that certain of the Underwriters and various other broker-dealers and other
firms that  participate in the auction rate securities  market received  letters
from the staff of the Securities and Exchange  Commission in the spring of 2004.
The  letters  requested  that  each  of  these  firms  voluntarily   conduct  an
investigation  regarding its respective practices and procedures in that market.
Pursuant  to  these  requests,  each of  those  Underwriters  conducted  its own
voluntary  review and  reported  its  findings to the  Securities  and  Exchange
Commission  staff. At the staff's  request,  those  Underwriters are engaging in
discussions  with the staff concerning its inquiry.  Neither those  Underwriters
nor the Fund can predict the ultimate outcome of the inquiry or how that outcome
will affect the market for the Preferred Shares or the auctions.

RATINGS AND ASSET COVERAGE RISK. While it is expected that Moody's will assign a
rating of Aaa to the  Preferred  Shares and Fitch will assign a rating of AAA to
the Preferred Shares, such ratings do not eliminate or necessarily  mitigate the
risks of investing in Preferred  Shares.  Moody's or Fitch could  downgrade  its
rating of the Preferred Shares or withdraw its rating of the Preferred Shares at
any time,  which may make  your  shares  less  liquid  at an  auction  or in the
secondary  market  and may  materially  and  adversely  affect  the value of the
Preferred Shares if sold outside an auction.  Moody's and Fitch are not required
to provide prior notice of a decision to downgrade  the  Preferred  Shares or to
withdraw their rating. If Moody's or Fitch downgrades the Preferred Shares,  the
Fund may alter its portfolio or redeem  Preferred Shares in an effort to improve
the rating,  although there is no assurance that it will be able to do so to the
extent  necessary to restore the prior rating.  If the Fund fails to satisfy the
asset coverage ratios discussed under  "Description of Preferred Shares - Rating
Agency Guidelines and Asset Coverage," the Fund will be required to redeem, at a
time that is not favorable to the Fund or its shareholders,  a sufficient number
of Preferred  Shares in order to return to  compliance  with the asset  coverage
ratios. The Fund may be required to redeem Preferred Shares at a time when it is
not advantageous for the Fund to make such redemption or to liquidate  portfolio
securities in order to have  available  cash for such  redemption.  The Fund may
voluntarily redeem Preferred Shares under certain circumstances in order to meet
asset  maintenance  tests.  While a sale of substantially  all the assets of the
Fund or the merger of the Fund into another entity would require the approval of
the holders of Preferred  Shares voting as a separate  class as discussed  under
"Description of Preferred Shares - Voting Rights," a sale of  substantially  all
the  assets of the Fund or the  merger of the Fund with or into  another  entity
would not be  treated as a  liquidation  of the Fund nor  require  that the Fund
redeem Preferred Shares,  in whole or in part,  provided that the Fund continued
to  comply  with the asset  coverage  ratios  discussed  under  "Description  of
Preferred   Shares  -  Rating  Agency   Guidelines  and  Asset   Coverage."  See
"Description of Preferred Shares - Rating Agency  Guidelines and Asset Coverage"
for a description of the asset maintenance tests the Fund must meet.

RESTRICTIONS ON DIVIDENDS AND OTHER  DISTRIBUTIONS.  Restrictions imposed on the
declaration  and payment of dividends or other  distributions  to the holders of
the Fund's  common  shares  and  Preferred  Shares,  both by the 1940 Act and by
requirements  imposed by rating  agencies,  might  impair the Fund's  ability to
maintain its  qualification as a RIC for federal income tax purposes.  While the
Fund may redeem  Preferred Shares to enable the Fund to distribute its income as
required to maintain its  qualification as a RIC under the Code, there can be no
assurance that such redemptions can be effected in time to meet the requirements
of the Code. See "Federal Income Tax Matters."

GENERAL  RISKS OF INVESTING IN THE FUND.  The Fund is not a complete  investment
program and should only be considered  as an addition to an investor's  existing
diversified  portfolio  of  investments.  Due  to  uncertainty  inherent  in all
investments, there can be no assurance that the Fund will achieve its investment
objective.

     NON-DIVERSIFIED  STATUS RISK.  The Fund is classified as  "non-diversified"
     under the 1940 Act.  As a result,  it can  invest a greater  portion of its
     assets in  obligations  of a single issuer than a  "diversified"  fund. The
     Fund will therefore be more  susceptible  than a diversified  fund to being
     adversely  affected  by  any  single  corporate,   economic,  political  or
     regulatory occurrence. The Fund intends to diversify its investments to the
     extent  necessary  to qualify,  and  maintain  its  status,  as a regulated
     investment  company under U.S. federal income tax laws. See "Federal Income
     Tax Matters."

<PAGE>

     INVESTMENTS  IN COMMON  STOCKS.  The Fund  expects to invest,  under normal
     market conditions, in excess of 80% of its assets in publicly traded common
     stocks.  Common  stocks  generally  have greater  risk  exposure and reward
     potential  over time than bonds.  The volatility of common stock prices has
     historically  been greater than bonds, and as the Fund invests primarily in
     common  stocks,  the Fund's net asset value may also be volatile.  Further,
     because the time  horizon  for the Fund's  investments  in common  stock is
     longer,  the time  necessary for the Fund to achieve its objective of total
     return  will  likely be  longer  than for a fund that  invests  solely  for
     income.

     REINVESTMENT  RISK.  Income from the Fund's  portfolio  will decline if the
     Fund  invests  the  income  from or  proceeds  from the sale of its  Income
     Producing  Securities into lower yielding  instruments or Income  Producing
     Securities  with a lower  spread over the base  lending  rate. A decline in
     income could affect the Fund's  ability to pay  dividends on the  Preferred
     Shares.

     CONCENTRATION RISK. The Fund is classified as  "non-diversified"  under the
     1940 Act,  which  means it can  invest a greater  portion  of its assets in
     obligations  of a single issuer than a  "diversified"  fund.  The Fund will
     therefore be more  susceptible  than a diversified  fund to being adversely
     affected  by  any  single  corporate,  economic,  political  or  regulatory
     occurrence.  Taking  larger  positions  is  also  likely  to  increase  the
     volatility  of the Fund's net asset value,  reflecting  fluctuation  in the
     value of large Fund holdings.

     INVESTMENTS  IN  REITs.  As a  matter  of  investment  policy,  the Fund is
     concentrated  in  REITs,  which  means  it must  maintain  over  25% of its
     investments in REITs and other companies in the real estate  industry.  The
     Fund must obtain shareholder  approval prior to changing this policy,  thus
     limiting its  flexibility  to liquidate  REITs in the future  should market
     conditions  warrant.  Since the Fund  concentrates  its  assets in the real
     estate  industry,  the  Fund's  performance  will be  generally  linked  to
     performance  of the real estate  markets.  Property  values may fall due to
     increasing  vacancies or declining  rents  resulting from economic,  legal,
     cultural or technological  developments.  REIT prices also may drop because
     of poor  management  or the failure of borrowers  to pay their loans.  Many
     REITs utilize leverage which increases  investment risk and could adversely
     affect a REIT's  operations and market value in periods of rising  interest
     rates  as well as  risks  normally  associated  with  debt  financing.  The
     dividend  income  paid  out  by the  REIT  may be  reduced  or  eliminated,
     depending on the income produced by the underlying  properties owned by the
     REITs.  In the normal course of business,  REITs face risks that are either
     non-financial or  non-quantifiable.  These risks principally include credit
     risk as well as legal risk.  Because most REITs are typically financed with
     debt instruments, they are also interest rate sensitive. In addition, there
     are risks  associated  with particular  sectors of real estate  investments
     (e.g.,  retail,  office,  hotel,  healthcare and  multifamily  properties),
     although the Fund does not intend to focus on any particular sector of real
     estate investments.

     INVESTMENTS  IN  BERKSHIRE  HATHAWAY.  The Fund  presently  has  invested a
     significant  percentage of its portfolio in  low-dividend  or  non-dividend
     paying  common  stocks  such  as  Berkshire  Hathaway,   Inc.  (NYSE:  BRK)
     ("Berkshire").  As of July ___, 2005,  the Fund held 310 Berkshire  Class A
     shares,  representing  ____% of the  Fund's  assets.  The  Advisers  do not
     currently  intend to  liquidate  any  portion  of the  Fund's  position  in
     Berkshire.  Although not an insurance company itself,  Berkshire owns Geico
     Insurance  and General Re Insurance,  and  therefore  derives a significant
     portion of its income,  and its value, from these two insurance  companies.
     The insurance  business can be significantly  affected by interest rates as
     well as price competition  within the industry.  In addition,  an insurance
     company may  experience  significant  changes in its year to year operating
     performance  based  both on  claims  paid and on  performance  of  invested
     assets.  Insurance companies can also be affected by government regulations
     and tax laws, which may change from time to time. A significant  decline in
     the market price of  Berkshire  or any other  company in which the Fund has
     made  a  significant   common  stock  investment  (i)  would  result  in  a
     significant  decline in the Fund's  net asset  value,  (ii) may result in a
     proportionate  decline in the market price of the Fund's common shares, and
     (iii) may result in greater  risk and market  fluctuation  than a fund that
     has a more diversified portfolio.

     LEVERAGING.  The Fund is currently  leveraged with the Bank Debt which will
     be replaced with leverage  from the Preferred  Shares.  Use of leverage may
     have  a  number  of  adverse  effects  on the  Fund  and  its  shareholders
     including:  (i)  leverage  may magnify  market  fluctuations  in the Fund's
     underlying  holdings thus causing a  disproportionate  change in the Fund's
     net asset value;  (ii) the Fund's cost of leverage may exceed the return on
     the  underlying  securities  acquired  with the  proceeds of the  leverage,
     thereby  diminishing  rather than enhancing the return to shareholders  and
     generally  making  the  Fund's  total  return  to  such  shareholders  more
     volatile;  (iii) the Fund may be required to sell  investments  in order to
     meet  dividend or interest  payments on the debt or preferred  stock it has
     issued when it may be disadvantageous to do so; (iv) leveraging through the
     issuance of  preferred  stock  requires  that the holders of the  preferred
     stock have class voting  rights on various  matters that could make it more
     difficult  for the  holders  of the  Fund's  common  stock  to  change  the
     investment  objective or fundamental policies of the Fund, to convert it to
     an open-end  fund or make certain  other  changes;  and (v) the Fund may be
     forced to redeem some or all of the Preferred  Shares at inopportune  times
     due to a decline in market value of Fund investments.

<PAGE>

     DISCOUNT FROM NET ASSET VALUE.  Common stock of closed-end funds frequently
     trade at a market  price  that is less  than  the  value of the net  assets
     attributable  to those  shares (a  "discount").  The  possibility  that the
     Fund's  shares  will  trade at a  discount  from net asset  value is a risk
     separate  and  distinct  from the risk that the Fund's net asset value will
     decrease.  The risk of  purchasing  shares of a closed-end  fund that might
     trade  at a  discount  or  unsustainable  premium  is more  pronounced  for
     investors  who wish to sell their  shares in a  relatively  short period of
     time because,  for those investors,  realization of a gain or loss on their
     investments  is likely to be more dependent upon the existence of a premium
     or discount than upon portfolio performance.

     SIZE  OF  FUND.  As  of  July  ___,  2005,  the  Fund  had  net  assets  of
     approximately  $____ million. As a fund with a relatively small asset base,
     the Fund may be subject to certain  operational  inefficiencies  including:
     higher  expense  ratio,  less coverage by analysts and the  marketplace  in
     general which can contribute to a less active trading market for the Fund's
     shares and  consequently a wider discount,  more limited ability to attract
     new investors  and/or take advantage of investment  opportunities  and less
     ability to take advantage of lower  transaction  costs  available to larger
     investors.

     REPURCHASE OF THE FUND'S COMMON STOCK. The Fund is authorized to repurchase
     its common  shares on the open  market  when the  shares  are  trading at a
     discount from net asset value as determined by the Board from time to time.
     The acquisition of common shares by the Fund will decrease the total assets
     of the Fund and,  therefore,  have the  effect  of  increasing  the  Fund's
     expense ratio and may  adversely  affect the ability of the Fund to achieve
     its investment objectives. Furthermore, the acquisition of common shares by
     the Fund may  require the Fund to redeem the  Preferred  Shares in order to
     maintain  certain asset coverage  requirements.  To the extent the Fund may
     need to liquidate investments to fund repurchase of common shares, this may
     result in portfolio turnover which will result in additional expenses being
     borne by the Fund.

     DEPENDENCE ON KEY PERSONNEL.  The Advisers are dependent upon the expertise
     of Stewart  Horejsi in  providing  advisory  services  with  respect to the
     Fund's  investments.  If the  Advisers  were to lose  the  services  of Mr.
     Horejsi,  their  ability to service the Fund could be  adversely  affected.
     There can be no assurance  that a suitable  replacement  could be found for
     Mr. Horejsi in the event of his death, resignation, retirement or inability
     to act on behalf of the Advisers.

     ISSUER RISK. The value of the Fund's  portfolio may decline for a number of
     reasons  which  directly  relate to the  issuers of the  securities  in the
     portfolio,  such as management performance,  financial leverage and reduced
     demand for the issuer's goods and services.

     INFLATION  RISK.  Inflation  risk is the risk  that the  value of assets or
     income  from  investment  will be worth  less in the  future  as  inflation
     decreases the value of money. As inflation increases, the real value of the
     common shares and distributions thereon can decline.

     REPURCHASE  AGREEMENTS.  The use of repurchase  agreements involves certain
     risks.  For  example,  if the  seller  of  securities  under  a  repurchase
     agreement   defaults  on  its   obligation  to  repurchase  the  underlying
     securities,  as a result of bankruptcy or otherwise,  the Fund will seek to
     dispose of such securities,  which action could involve costs or delays. If
     the seller becomes  insolvent and subject to liquidation or  reorganization
     under applicable bankruptcy or other laws, the Fund's ability to dispose of
     the underlying  securities may be restricted.  Finally, it is possible that
     the Fund may not be able to  substantiate  its  interest in the  underlying
     securities. To minimize this risk, the securities underlying the repurchase
     agreement  will be held by the custodian at all times in an amount at least
     equal to the repurchase price,  including  accrued interest.  If the seller
     fails to  repurchase  the  securities,  the  Fund may  suffer a loss to the
     extent  proceeds from the sale of the  underlying  securities are less than
     the repurchase price.

     FOREIGN  SECURITIES  RISK.  The Fund may  invest  without  limit in foreign
     securities.  Investment  in  non-U.S.  issuers  may  involve  unique  risks
     compared to investing in securities of U.S.  issuers.  These risks are more
     pronounced to the extent that the Fund invests a significant portion of its
     non-U.S.  investment in one region or in the securities of emerging  market
     issuers. These risks may include:

     o Less information  about non-U.S.  issuers or markets may be available due
     to less rigorous disclosure, accounting standards or regulatory practices.

     o Many non-U.S.  markets are smaller,  less liquid and more volatile.  In a
     changing market,  the Advisers may not be able to sell the Fund's portfolio
     securities at times, in amounts and at prices they consider reasonable.

     o Currency exchange rates or controls may adversely affect the value of the
     Fund's investments.

     o The  economies  of  non-U.S.  countries  may grow at  slower  rates  than
     expected or may experience a downturn or recession.

     o Withholdings and other non-U.S. taxes may decrease the Fund's return.

     CURRENCY  RISK. A portion of the Fund's assets may be quoted or denominated
     in non-U.S.  currencies.  These  securities  may be  adversely  affected by
     fluctuations in relative  currency  exchange rates and by exchange  control
     regulations.  The Fund's investment  performance may be negatively affected
     by a devaluation of a currency in which the Fund's  investments  are quoted
     or  denominated.   Further,  the  Fund's  investment   performance  may  be
     significantly  affected,  either  positively  or  negatively,  by  currency
     exchange  rates  because  the U.S.  dollar  value of  securities  quoted or
     denominated  in another  currency  will increase or decrease in response to
     changes in the value of such currency in relation to the U.S. dollar.

<PAGE>

     SOVEREIGN  DEBT  RISK.  An  investment  in  debt  obligations  of  non-U.S.
     governments and their political  subdivisions  ("sovereign  debt") involves
     special  risks that are not  present in  corporate  debt  obligations.  The
     non-U.S.  issuer  of  the  sovereign  debt  or  the  non-U.S.  governmental
     authorities  that  control  the  repayment  of the  debt may be  unable  or
     unwilling to repay  principal  or interest  when due, and the Fund may have
     limited  recourse  in the event of a default.  During  periods of  economic
     uncertainty,  the market prices of sovereign debt may be more volatile than
     prices of debt obligations of U.S. issuers.  In the past,  certain non-U.S.
     countries   have   encountered   difficulties   in  servicing   their  debt
     obligations,  withheld  payments of  principal  and  interest  and declared
     moratoria on the payment of principal and interest on their sovereign debt.

     A sovereign  debtor's  willingness  or ability to repay  principal  and pay
     interest in a timely  manner may be affected by, among other  factors,  its
     cash flow  situation,  the extent of its  foreign  currency  reserves,  the
     availability of sufficient non-U.S. exchange, the relative size of the debt
     service  burden,   the  sovereign  debtor's  policy  toward  its  principal
     international  lenders and local political  constraints.  Sovereign debtors
     may also be dependent on expected disbursements from non-U.S.  governments,
     multilateral  agencies and other entities to reduce  principal and interest
     arrearages  on their debt.  The failure of a sovereign  debtor to implement
     economic reforms, achieve specified levels of economic performance or repay
     principal  or  interest  when  due  may  result  in  the   cancellation  of
     third-party  commitments to lend funds to the sovereign  debtor,  which may
     further impair such debtor's ability or willingness to service its debts.

     LIQUIDITY RISK. Although the Fund invests primarily in securities traded on
     national  exchanges,  it may invest in less liquid assets from time to time
     that are not  readily  marketable  and may be  subject to  restrictions  on
     resale.  Illiquid  securities  may be more difficult to value or may impair
     the Fund's  ability to realize the full value of its assets in the event of
     a voluntary or involuntary  liquidation of such assets and thus may cause a
     decline in the Fund's net asset value.  . The Fund has no limitation on the
     amount of its  assets  that may be  invested  in  securities  which are not
     readily  marketable or are subject to restrictions  on resale,  although it
     may not invest more than 30% of the value of its total assets in securities
     which have been acquired through private placement.  In certain situations,
     the Fund could find it more difficult to sell such  securities at desirable
     times and/or prices.

     MARKET  DISRUPTION  RISK.  The  terrorist  attacks in the United  States on
     September 11, 2001 had a disruptive effect on the securities  markets.  The
     Fund cannot predict the effects of similar events in the future on the U.S.
     economy.  These terrorist attacks and related events,  including the war in
     Iraq, its aftermath, and continuing occupation of Iraq by coalition forces,
     have led to increased  short-term  market volatility and may have long-term
     effects on U.S. and world  economies and markets.  A similar  disruption of
     the financial  markets could impact  interest  rates,  auctions,  secondary
     trading,  ratings, credit risk, inflation and other factors relating to the
     Preferred Shares.

     ANTI-TAKEOVER  PROVISIONS  RISK.  The Fund's  Charter  and  Bylaws  include
     provisions  that could  limit the  ability of other  entities or persons to
     acquire control of the Fund or to change the composition of its Board. Such
     provisions  could limit the ability of shareholders to sell their shares at
     a premium over prevailing  market prices by discouraging a third party from
     seeking to obtain control of the Fund.  These  provisions  include  advance
     notice  requirements  for  shareholder  proposals,   super-majority  voting
     requirements for certain transactions with affiliates, open-ending the Fund
     and a merger, liquidation, asset sale or similar transaction.


                             MANAGEMENT OF THE FUND

The Board is  responsible  for the  overall  management  of the Fund,  including
supervision  of the duties  performed by the Advisers.  There are currently five
directors  of the Fund,  one of whom is an  "interested  person" of the Fund (as
defined in the 1940 Act).

INFORMATION  ABOUT  DIRECTORS AND OFFICERS.  Set forth in the following table is
certain information about each Director of the Fund, including his address, age,
position  with the Fund,  term of office,  length of time  served and  principal
occupation during the last five years:


<TABLE>
<S>                        <C>                       <C>                                                <C>
Name, Address*, Age        Position, Length of       Principal Occupation(s) and Other                  Number of Funds
                           Term Served, and Term     Directorships Held During the Past Five            in Fund Complex
                           of Office**               Years                                              Overseen by
                                                                                                        Director+
- ------------------------------------------------------------------------------------------------------------------------------------
Independent Directors

Joel W. Looney,            Director of the Fund      Partner, Financial Management Group, LLC           2
Chairman                   since January, 2002.      (investment adviser), since July 1999; CFO,
Age:  43                   Chairman of the Board     Bethany College, 1995-1999; Director,
                           of the Fund since         Boulder Total Return Fund, Inc., since
                           October 2004.             January 2001; Director and Chairman of the
                                                     Board, First Financial Fund, Inc., since
                                                     August 2003.


Alfred G. Aldridge, Jr.    Director of the Fund      Executive Vice President, Business                 2
Brig. Gen. (Retired)       since January 2002.       Development Specialists (sales and
Cal. Air National Guard                              marketing consulting) since 2004; Sales
Age: 67                                              Manager, Shamrock Foods Company,1982-2002;
                                                     Director, Arizona Sports Foundation, since
                                                     1997;  Director, Boulder Total Return Fund,
                                                     Inc., since 1999; Director, Maricopa Youth
                                                     Assistance Foundation, since 2004.

Richard I. Barr            Director of the Fund      Retired; Manager, Advantage Sales and              2
Age:  67                   since January 2002.       Marketing, Inc. (food brokerage),
                                                     1963-2001; Director, Boulder Total Return
                                                     Fund, Inc., since 1999 and Chairman of the
                                                     Board since 2003; Director, First Financial
                                                     Fund, Inc., since 2001.

Dennis R. Causier***       Director of the Fund      Retired; Managing Director and Chairman,           1
Age:  57                   since October 2004.       P.S. Group PLC (engineering and
                                                     construction), 1966-2001; Owner,
                                                     Professional Yacht Management Services
                                                     (yacht management) 2002-present; Director,
                                                     First Financial Fund, Inc., since October,
                                                     2004.
- ------------------------------------------------------------------------------------------------------------------------------------
Interested Director

John S. Horejsi++          Director of the Fund      Director of Horejsi Charitable Foundation          1
Age: 37                    since May 2004.           (a private charitable foundation), since
                                                     1997.
</TABLE>

* Unless  otherwise  specified,  the  Directors'  respective  addresses  are c/o
Boulder  Growth & Income  Fund,  Inc.,  1680 38th  Street,  Suite 800,  Boulder,
Colorado 80301.

** Each Director's current term expires at the annual meeting of shareholders in
2006.

*** Mr.  Causier  is a  British  citizen  and a  resident  of  ____________  and
substantially  all of his assets are  located  outside the United  States.  As a
result,  it may be difficult to realize judgments of courts of the United States
predicated upon civil  liabilities  under federal  securities laws of the United
States.  The Fund has been advised that there is substantial doubt as to (i) the
enforceability in  ______________ of such civil remedies and criminal  penalties
as are  afforded  by the  federal  securities  laws of the United  States,  (ii)
whether the ____________  courts would enforce judgments of United States courts
obtained in actions  against Mr.  Causier  predicated  upon the civil  liability
provisions of the federal  securities  laws, or (iii) whether  _________  courts
would enforce, in an original action, liabilities against Mr. Causier predicated
solely on federal  securities  laws.  Mr. Causier has appointed the Secretary of
the Fund  (presently  Stephanie  Kelley in Boulder,  Colorado)  as his agent for
service of process in any legal action in the United States, thus subjecting him
to the jurisdiction of the United States courts.

+ The "fund  complex"  consists of the Fund and Boulder Total Return Fund,  Inc.
which is also managed by the Advisers.

++  Mr.  Horejsi  is an  "interested  person"  of  the  Fund  by  virtue  of his
relationship  with Stewart Horejsi,  the Fund's primary portfolio manager and an
employee of BIA and SIA.

Messrs.  Looney,  Barr and Causier also serve as  directors  of First  Financial
Fund, Inc., an investment  company  acknowledged to be under common control with
the Advisers.  From the late 1980's until  January,  2001,  Mr.  Looney  served,
without compensation,  as one of three trustees of the Mildred Horejsi Trust, an
affiliate of the Fund's  largest  shareholder,  the Ernest  Horejsi Trust No. 1B
(the "EH  Trust").  The  address  for the EH Trust is 3601 C Street,  Suite 600,
Anchorage, Alaska 99503.

The EH Trust  holds  [21%] of the  Fund's  outstanding  shares and is the Fund's
largest shareholder.  The EH Trust has asserted,  and the Fund has acknowledged,
that the EH Trust is a "control  person" as  contemplated  by the 1940 Act.  The
sole  trustees of the EH Trust are Badlands  Trust  Company,  LLC  ("Badlands"),
Larry Dunlap and Susan Ciciora,  Stewart Horejsi's daughter  (collectively,  the
"EH  Trustees").  The EH  Trustees  may also be deemed to be control  persons by
virtue of their trusteeship with the EH Trust. The EH Trustees disclaim any such
control relationship.  The Stewart R. Horejsi Trust No. 2A (the "SRH Trust"), an
irrevocable  grantor trust established by Stewart Horejsi for the benefit of his
issue, is the sole equity owner of Badlands and may be deemed indirectly to be a
control person by virtue of its ownership of Badlands.  The SRH Trust  disclaims
any such control relationship.

<PAGE>

As discussed  above,  the EH Trust owns [21%] of the Fund's common  stock,  is a
"control  person"  as  contemplated  under the 1940 Act and is  affiliated  with
entities who own the Advisers and FAS (i.e., the Horejsi Affiliates). As a large
shareholder,  EH Trust is able to significantly influence any matters upon which
the  holders of common  stock may vote,  including  the  election  of the Fund's
directors and any change in the Fund's investment adviser.  Since all members of
the Board are elected  annually,  the EH Trust may be able to effect a change of
control  with  respect  to the  entire  Board in a single  election.  Similarly,
several of the Fund's corporate  governance  policies grant shareholders  voting
power or decrease the voting requirement necessary to take certain actions. As a
large shareholder, the EH Trust will have greater influence over the adoption or
failure  of  certain   corporate   actions   requiring  a  vote  of  the  Fund's
shareholders.  In  particular,  the EH Trust would have a greater  influence  in
compelling  a special  meeting  with the support of only a small  percentage  of
other  non-Horejsi  shareholders.  Nonetheless,  since most of the other actions
under the Fund's corporate  governance  policies require the support of either a
majority or two-thirds of outstanding  shares for a future change,  the EH Trust
cannot  effect any such change  without the support of a  substantial  number of
non-Horejsi shareholders.  However, in these instances, where an action requires
a majority or  two-thirds  voting  approval,  the EH Trust may have an effective
veto.

Together with other trusts and entities affiliated with the Horejsi family (more
particularly  defined  below as the  "Horejsi  Affiliates"),  the EH  Trust  has
asserted control with respect to two other investment  companies,  Boulder Total
Return Fund, Inc.  ("BTF") and First Financial Fund, Inc.  ("FF").  As discussed
below,  the  Horejsi  Affiliates  also  own the  Advisers  and FAS,  the  Fund's
co-administrator.   The  following   table  shows  security   ownership  by  the
Independent Directors with respect to BTF and FF as of December 31, 2004.

<TABLE>
<CAPTION>
Name of Director           Company         Title of Class        Value of        Percent of Class
                                                              Securities (1)
<S>                          <C>               <C>                <C>              <C>    <C>    <C>


Joel W. Looney               BTF               Common             $_____           Less than 1%
                             FF                Common             $_____           Less than 1%
Alfred G. Aldridge           BTF               Common             $_____           Less than 1%
                             FF                Common             $_____           Less than 1%
Richard I. Barr              BTF               Common             $_____           Less than 1%
                             FF                Common             $_____           Less than 1%
Dennis R. Causier            BTF               Common               $0             Less than 1%
                             FF                Common               $0             Less than 1%
</TABLE>
(1) Closing price on December 31, 2004.


Direct ownership of the Fund's common stock by all officers and directors of the
Fund is less than one percent. John Horejsi, an interested director of the Fund,
is a  discretionary  beneficiary  of the EH  Trust  and  may be  deemed  to have
indirect  beneficial  ownership  of the common  stock held by the EH Trust.  Mr.
Horejsi disclaims all such beneficial  ownership.  Mr. Horejsi does not directly
own any shares of the Fund. Stephen Miller, the Fund's president,  is an officer
and  director  of  Badlands  and may be  deemed  to have  in  direct  beneficial
ownership of the common stock held by the EH Trust. However,  because two of the
EH  Trustees  are  required  in  order  for the EH  Trust  to  vote or  exercise
dispositive  authority with respect to shares owned by the EH Trust,  Mr. Miller
disclaims beneficial ownership of such shares.

The names of the  officers of the Fund and certain  additional  information  are
listed in the table below.  Each officer was elected to office by the Board at a
meeting  held on April 26,  2005.  Each  officer  will hold such office  until a
successor has been elected by the Board.

<PAGE>

<TABLE>
<CAPTION>
                               Position, Length of Term
Name, Address, Age                Served, and Term of     Principal Occupation(s) and Other Directorships Held
                                        Office                         During the Past Five Years
<S>                            <C>                        <C>
Stephen C. Miller              President of the Fund      President of and General Counsel for BIA, since 1999;
1680 38th Street,              since January 2002 and     Manager, FAS, since 1999; Vice President of SIA, since
Suite 800                      Director from January      ______; Director and President of Boulder Total Return
Boulder, CO 80301              2002 through October       Fund, Inc., since 1999 (resigned as Director in 2004);
Age:  52                       2004.  Appointed           Director and President of First Financial Fund, Inc.
                               annually.                  since 2003 (resigned as Director and Chairman in 2004);
                                                          President and General Counsel, Horejsi, Inc.
                                                          (liquidated in 1999); General Counsel, Brown
                                                          Welding Supply, LLC (sold in 1999);
                                                          officer of various other entities
                                                          affiliated with the Horejsi family; Of
                                                          Counsel, Krassa & Miller, LLC since 1991.

Carl D. Johns                  Chief Financial Officer,   Vice President and Treasurer of BIA and Assistant
1680 38th Street,              Chief Accounting           Manager of FAS, since April, 1999; Vice President, Chief
Suite 800                      Officer, Vice President    Financial Officer and Chief Accounting Officer, Boulder
Boulder, CO 80301              and Treasurer since        Total Return Fund, Inc., since 1999 and First Financial
Age: 41                        January 2002.  Appointed   Fund, Inc., since August 2003.
                               annually.

Stephanie J. Kelley            Secretary since January    Secretary, Boulder Total Return Fund, Inc., since
1680 38th Street,              2002.  Appointed           October 2000 and First Financial Fund, Inc., since
Suite 800                      annually.                  August 2003; Assistant Secretary and Assistant Treasurer
Boulder, CO 80301                                         of various other entities affiliated with the Horejsi
Age:  48                                                  family; Employee, FAS, since March 1999.

Nicole L. Murphey              Assistant Secretary        Assistant Secretary, Boulder Total Return Fund, Inc.,
1680 38th Street,              since January 2002.        since October 2000 and First Financial Fund, Inc. since
Suite 800                      Appointed annually.        August 2003; Employee, FAS, since July 1999.
Boulder, CO 80301
Age:  28

Candace Cavalier               Assistant Secretary        Assistant Secretary, Boulder Total Return Fund, Inc. and
200 Clarendon Street           since April 2005.          First Financial Fund, Inc. since January 2005; Associate
Boston, MA 02116               Appointed annually         Counsel, Investors Bank & Trust Company, since March
Age: 33                                                   2004; Consultant at Deutsche Asset Management from
                                                          September 2002 to Sept 2003; Associate at Hinckley, Allen &
                                                          Snyder LLP from July 2001 to July 2002; Staff Attorney at
                                                          Securities and Exchange Commission from September 1998 to
                                                          June 2001.

Laura Healy                    Assistant Treasurer        Assistant Treasurer, Boulder Total Return Fund, Inc. and
200 Clarendon Street           since January 2005.        First Financial Fund, Inc. since January 2005; Senior
Boston, MA 02116               Appointed annually.        Director, Investors Bank & Trust Company, since January
Age: 41                                                   2002; Assistant Treasurer at MFS Investment Management
                                                          from December 1996 to January 2002.

Janice Desmond                 Assistant Treasurer        Assistant Treasurer, Boulder Total Return Fund, Inc. and
200 Clarendon Street           since January 2005.        First Financial Fund, Inc. since January 2005; Director,
Boston, MA 02116               Appointed annually.        Investors Bank & Trust Company, since January 2005; Vice
Age: 54                                                   President of Deutsche Asset Management from February
                                                          2001 to January 2005; Assistant Vice President of
                                                          Wellington Asset Management from September 1999 to
                                                          February 2001.
</TABLE>

INFORMATION  REGARDING  THE ADVISERS AND OTHER  SERVICE  PROVIDERS.  The Fund is
co-advised  by BIA and SIA.  Since  January  of 2002,  the  Advisers  have  been
providing advisory services to the Fund and, since March of 1999, to the Boulder
Total Return Fund, Inc. As of July ___, 2005, the Advisers had a total of $_____
million in assets under management.

<PAGE>

BOULDER INVESTMENT ADVISERS, LLC. BIA was formed on April 8, 1999, as a Colorado
limited liability  company and is registered as an investment  adviser under the
Investment  Advisers Act of 1940,  as amended.  Together with SIA, BIA serves as
the investment co-adviser to two registered closed-end investment companies, the
Fund and Boulder Total Return Fund, Inc (together,  the "Boulder Funds"). At the
present time, BIA has only one other client,  also co-advised with SIA, which is
an affiliated private foundation, the Horejsi Charitable Foundation.  Stewart R.
Horejsi is an  employee of and  investment  manager  for both  Advisers  and has
extensive  experience  managing  common  stocks  for the Fund as well as for the
various  other  trusts and  entities  affiliated  with the  Horejsi  family (the
"Horejsi  Affiliates").  The  members  of BIA are  Evergreen  Atlantic,  LLC,  a
_________,  located at 1680 38th Street, Suite 800, Boulder,  Colorado 80301 and
the Lola Brown  Trust No.  1B, an  irrevocable  Alaska  domiciled  trust,  whose
address is c/o Badlands Trust Company, LLC, 3601 C Street, Suite 600, Anchorage,
Alaska 99503 (the  "Members").  The Members each hold a 50% interest in BIA. The
Members  are  "affiliated  persons"  of the Fund (as that term is defined in the
1940 Act).  Both Mr. Horejsi and John S. Horejsi,  Mr.  Horejsi's son and one of
the Fund's  "interested"  directors,  are discretionary  beneficiaries under the
Lola Brown Trust No. 1B as well as under other Horejsi family  affiliated trusts
which  own  Evergreen  Atlantic,   LLC.   Accordingly,   as  a  result  of  this
relationship,  both  Stewart R.  Horejsi  and John S.  Horejsi  may  directly or
indirectly benefit from the relationship between the Fund and BIA.

STEWART INVESTMENT ADVISERS.  SIA is a Barbados  international business company,
incorporated on November 12, 1996. As discussed above,  SIA,  together with BIA,
serves  as the  investment  co-adviser  to the  Boulder  Funds  and the  Horejsi
Charitable  Foundation,  which  presently are SIA's only clients.  SIA is wholly
owned by the Stewart  West Indies  Trust,  an  irrevocable  trust  domiciled  in
Alaska,  established  by Stewart  Horejsi in 1996 primarily to benefit his issue
(the "West Indies Trust"). The West Indies Trust's address is c/o Badlands Trust
Company, LLC, 3601 C Street, Suite 600, Anchorage,  Alaska 99503. Mr. Horejsi is
not a beneficiary  under the West Indies Trust.  However,  John S. Horejsi,  Mr.
Horejsi's  son  and  the  Fund's  "interested"   director,  is  a  discretionary
beneficiary  under  the  West  Indies  Trust  and  thus,  as a  result  of  this
relationship,  may directly or indirectly benefit from the relationship  between
SIA and the Fund.

SIA is not  domiciled in the United States and  substantially  all of its assets
are located  outside the United  States.  As a result,  it may be  difficult  to
realize  judgments  of  courts  of  the  United  States  predicated  upon  civil
liabilities  under federal  securities  laws of the United States.  The Fund has
been advised that there is  substantial  doubt as to (i) the  enforceability  in
Barbados of such civil  remedies and  criminal  penalties as are afforded by the
federal  securities  laws of the United  States,  (ii)  whether the  appropriate
foreign  courts would  enforce  judgments of United  States  courts  obtained in
actions  against  SIA  predicated  upon the civil  liability  provisions  of the
federal securities laws, or (iii) whether a Barbados court would enforce,  in an
original action, liabilities against SIA predicated solely on federal securities
laws.  Pursuant to the  advisory  agreement  between  SIA and the Fund,  SIA has
appointed  the  Secretary of the Fund  (presently  Stephanie  Kelley in Boulder,
Colorado)  as its agent for service of process in any legal action in the United
States, thus subjecting it to the jurisdiction of the United States courts.

PORTFOLIO MANAGERS.  Stewart R. Horejsi is the Fund's primary investment manager
and,  together with Carl D. Johns,  the Fund's Vice President and Treasurer,  is
responsible for the day-to-day  management of the Fund's assets and is primarily
responsible for the Fund's asset allocation. Mr. Horejsi has been an employee of
both BIA and SIA since ______.  Mr. Horejsi has been the President or Manager of
various  subsidiaries of various Horejsi family  affiliates since June 1986, and
the  investment  manager for various  Horejsi  Affiliates  since 1982.  He was a
director of the Boulder Total Return Fund,  Inc. until November,  2001;  General
Manager of Brown  Welding  Supply,  LLC from 1994 until 1999;  and a director of
Sunflower  Bank  from  ____ to ____.  Mr.  Horejsi  has been  the  Director  and
President of the Horejsi Charitable  Foundation,  Inc. since 1997. He received a
Masters  Degree in Economics  from Indiana  University in 1961 and a Bachelor of
Science Degree in Industrial Management from the University of Kansas in 1959.

Carl D. Johns,  the Fund's Vice President and Treasurer,  is also Vice President
and  Treasurer  for BIA and,  together  with Mr.  Horejsi,  is  responsible  for
research,  managing  the Fund's  fixed  income  portfolio  and BIA's  day-to-day
advisory  activities.  He has worked for BIA since 1999. Since 1999, he has been
Chief Financial Officer,  Chief Accounting Officer, Vice President and Treasurer
of the Boulder Total Return Fund,  Inc. Mr. Johns is also the assistant  manager
of FAS.  Prior to joining  BIA,  Mr.  Johns  worked at  Flaherty  and  Crumrine,
Incorporated,  from  1992  to  1998.  During  that  period  he was an  Assistant
Treasurer  for the Preferred  Income Fund  Incorporated,  the  Preferred  Income
Opportunity  Fund  Incorporated,   and  the  Preferred  Income  Management  Fund
Incorporated. Mr. Johns received a Bachelors degree in Mechanical Engineering at
the  University  of Colorado in 1985,  and a Masters  degree in Finance from the
University of Colorado in 1991.

Additional  information  regarding the portfolio managers'  compensation,  other
accounts  managed and  ownership of Fund shares is included in the  Statement of
Additional Information.

THE INVESTMENT CO-ADVISORY AGREEMENTS.  The Advisers and the Fund are parties to
investment  co-advisory  agreements  dated as of April 26,  2002 (the  "Advisory
Agreements").  Under the terms of the Advisory Agreements,  the Advisers provide
advisory  services  regarding  asset  allocation,  manage the  investment of the
Fund's assets and provide such investment research,  advice and supervision,  in
conformity with the Fund's investment  objective and policies,  as necessary for
the operations of the Fund. The Advisory Agreements provide, among other things,
that the Advisers will bear all expenses in connection  with the  performance of
their  services  under  the  Advisory  Agreements,  although  the Fund will bear
certain other expenses to be incurred in its operation, including organizational
expenses,  taxes,  interest,  brokerage costs and commissions and stock exchange
fees;  fees of  Directors  of the Fund who are not also  officers,  directors or
employees of the Advisers;  Securities and Exchange  Commission fees; state Blue
Sky qualification fees; insurance premiums; outside auditing and legal expenses;
costs  of  maintenance  of  the  Fund's  existence;  membership  fees  in  trade
associations; stock exchange listing fees and expenses; and litigation and other
extraordinary or non-recurring expenses.

<PAGE>

The  Advisory  Agreements  provide  that the Fund shall pay to the  Advisers for
their  services  an  aggregate  monthly  fee at the annual  rate of 1.25% of the
Fund's average  monthly net assets (the "Adviser Fee")  (including the principal
amount of leverage,  if any).  Under the terms of the Advisory  Agreements,  the
Advisers split the Adviser Fee as determined by the Advisers and approved by the
Board from time to time. Presently, the Adviser Fee is split between BIA and SIA
25% and 75%, respectively.  Although the Advisers intend to devote such time and
effort to the business of the Fund as is  reasonably  necessary to perform their
respective  duties to the Fund,  the services of the Advisers are not  exclusive
and the Advisers may provide similar services to other investment  companies and
other clients and may engage in other activities.

The Advisory  Agreements  provide that the Advisers  shall not be liable for any
error of judgment or mistake of law or omission or any loss suffered by the Fund
in  connection  with the matters to which the  agreements  relate,  although the
agreements  do not  protect  or  purport to protect  the  Advisers  against  any
liability to the Fund to which the Advisers would otherwise be subject by reason
of  willful  misfeasance,  bad faith or gross  negligence  on their  part in the
performance  of  their  duties  or from  reckless  disregard  by  them of  their
obligations  and duties  under the  agreements.  Each  Advisory  Agreement  also
provides for  indemnification  by the Fund of the  Advisers and their  partners,
members,  officers,  employees,  agents  and  control  persons  for  liabilities
incurred  by them in  connection  with their  services  to the Fund,  subject to
certain limitations and conditions.

Each Advisory  Agreement  will continue in effect  without a term so long as its
continuation is specifically  approved at least annually by both (i) the vote of
a majority  of the Board or the vote of a  majority  of the  outstanding  voting
securities of the Fund (as such term is defined in the 1940 Act) and (ii) by the
vote  of a  majority  of the  directors  who are not  parties  to such  Advisory
Agreement or interested persons (as such term is defined in the 1940 Act) of any
such party, cast in person at a meeting called for the purpose of voting on such
approval.  Any of the Advisory  Agreements  may be  terminated as a whole at any
time by the  Fund,  without  the  payment  of any  penalty,  upon  the vote of a
majority of the Board or a majority of the outstanding  voting securities of the
Fund or by the Advisers on 60 days' written notice by either party to the other.
Except as otherwise provided by order of the Securities and Exchange  Commission
or any rule or provision of the 1940 Act, each of the Advisory  Agreements  will
terminate  automatically  in the  event of  their  assignment  (as such  term is
defined in the 1940 Act and the rules thereunder).

FUND  ADMINISTRATIVE   SERVICES,   LLC.  The  Fund's  co-administrator  is  Fund
Administrative  Services,  LLC  ("FAS" or the  "Administrator").  FAS  (formerly
Boulder  Administrative  Services,  LLC) is a Colorado limited liability company
whose  principal  place of business  is 1680 38th  Street,  Suite 800,  Boulder,
Colorado  80301.  The  members  of FAS are Lola  Brown  Trust  No.  1B (50%) and
Evergreen Atlantic, L.L.C. (50%) (the "Members"), each of which is considered to
be an  "affiliated  person" of the Fund as that term is defined in the 1940 Act.
The officers of FAS are Stephen C.  Miller,  manager;  Carl D. Johns,  assistant
manager; Laura Rhodenbaugh, secretary/treasurer; and Stephanie Kelley, assistant
secretary.  Since January of 2002, FAS has been providing certain administrative
and  executive  management  services to the Fund,  including  among other things
negotiation  of service  provider  contracts,  oversight  of service  providers,
maintenance of the Fund's policies and procedures,  and provision of compliance,
legal and fund accounting  services.  FAS has also provided such  administrative
and executive  management  services to the Boulder Total Return Fund, Inc. since
March of 1999, and to First Financial Fund, Inc. since August of 2003.

The Fund and FAS are parties to an  Administration  Agreement  dated February 1,
2004 (the  "Administration  Agreement").  FAS is owned by the  Members,  who, as
indicated  above,  are also the  owners  of BIA and are  included  in the  group
referred to herein as the Horejsi  Affiliates.  As discussed above, both Stewart
R. Horejsi and his son John S. Horejsi,  the Fund's only "interested"  director,
are  discretionary  beneficiaries  under the Lola Brown Trust No. 1B, one of the
Members of FAS, and under the trusts that own Evergreen Atlantic, LLC, the other
Member of FAS.

Under the Administration  Agreement,  the Fund pays FAS a monthly fee calculated
at an annual rate of 0.20% of the value of the Fund's average monthly net assets
up to $250 million;  0.18% of the Fund's average  monthly net assets on the next
$150 million;  and, 0.15% on the value of the Fund's average monthly assets over
$400  million.  Notwithstanding,   FAS  has  agreed  to  cap  the  Fund's  total
administration  costs at  0.30%  (including  administration,  co-administration,
transfer  agent and  custodian  fees).  Accordingly,  FAS has  agreed to waive a
portion of its fee  should  the total  monthly  administration  expenses  exceed
0.30%.

INVESTORS  BANK & TRUST  COMPANY.  Investors  Bank & Trust  Company  ("Investors
Bank"), located at 200 Clarendon Street, Boston,  Massachusetts 02116, serves as
the Fund's co-administrator and custodian.  As co-administrator,  Investors Bank
provides certain services including fund accounting and preparation of materials
for Board  meetings.  Under an  administration  agreement and custody  agreement
between the Fund and Investors  Bank,  the Fund pays  Investors  Bank a combined
monthly fee for both  co-administrative  and custodian services calculated at an
annual rate of 0.058% of the value of the Fund's  average  monthly net assets up
to $300 million and 0.04% on the value of the Fund's average  monthly net assets
over $300 million,  or a minimum monthly fee of $10,500.  Presently,  because of
the level of the Fund's average monthly net assets, the Fund pays the minimum of
$10,500  monthly.  In addition,  Investors Bank receives  certain  out-of-pocket
expenses,  transaction fees and certain charges for securities transactions. All
customary fees of the custodian are paid by the Fund.

PFPC INC. The transfer agent,  dividend  disbursing  agent and registrar for the
common  shares of the Fund is PFPC Inc.  ("PFPC"),  an indirect,  majority-owned
subsidiary of the PNC  Financial  Services  Group,  Inc. PFPC is located at 4400
Computer Drive, Westborough, MA 01581-5120. As compensation for PFPC's services,
the Fund pays PFPC a monthly fee plus certain out-of-pocket expenses.


<PAGE>


                         DESCRIPTION OF PREFERRED SHARES

The  following is a brief  description  of the material  terms of the  Preferred
Shares.  For the complete  terms of the  Preferred  Shares,  please refer to the
detailed  description  of the  Preferred  Shares in the  Articles  Supplementary
(Appendix C to the Statement of Additional Information).

GENERAL.  The Articles of Amendment and Restatement of the Fund filed on May 18,
2004 authorize the issuance of an unlimited number of preferred shares in one or
more  classes or series  with  rights as  determined  by the Board  without  the
approval of common  shareholders.  The Preferred  Shares will have a liquidation
preference of $25,000 per share,  plus an amount equal to accumulated but unpaid
dividends (whether or not earned or declared).

The Preferred  Shares are preferred shares that entitle their holders to receive
dividends when, as and if declared by the Board, out of funds legally  available
therefor, at a rate per annum that may vary for successive dividend periods. The
applicable rate for a particular  dividend period for the Preferred  Shares will
be  determined  by an auction  conducted on the business day before the start of
such  dividend  period.  Beneficial  owners and potential  beneficial  owners of
Preferred  Shares may participate in auctions,  although,  except in the case of
special dividend periods of longer than 91 days,  beneficial  owners desiring to
continue to hold all of their Preferred Shares regardless of the applicable rate
resulting  from auctions need not  participate  in order to continue to hold the
Preferred  Shares.  For an explanation of auctions and the method of determining
the applicable rate, see "Dividends and Rate Periods" and "The Auction" below.

The nominee of the  Securities  Depository  is expected to be the sole holder of
record of the Preferred Shares.  Accordingly,  each purchase of Preferred Shares
must  rely on (i) the  procedures  of the  Securities  Depository  and,  if such
purchaser is not a member of the Securities  Depository,  such purchaser's Agent
Member (members of DTC that will act on behalf of existing or potential  holders
of  Preferred  Shares  are  referred  to herein as "Agent  Member"),  to receive
dividends,  distributions and notices and to exercise voting rights (if and when
applicable)  and (ii) the  records of the  Securities  Depository  and,  if such
purchaser is not a member of the Securities  Depository,  such purchaser's Agent
Member, to evidence its beneficial ownership of the Preferred Shares.

The  Preferred  Shares  will rank on parity with any other  series of  preferred
shares of the Fund as to the payment of dividends and the distribution of assets
upon liquidation.  Each share of Preferred Shares carries one vote on matters on
which Preferred Shares can be voted.  When issued and sold, the Preferred Shares
will have a liquidation  preference of $25,000 per share plus an amount equal to
accumulated  but unpaid  dividends  (whether or not  declared) and will be fully
paid and  non-assessable.  See "Liquidation." The Preferred Shares, when issued,
will be fully paid and  non-assessable  and have no  preemptive,  conversion  or
cumulative  voting rights.  The Preferred  Shares will not be  convertible  into
common shares or other shares of the Fund, and the holders  thereof will have no
preemptive  rights. The Preferred Shares will not be subject to any sinking fund
but will be subject  to  redemption  at the  option of the Fund on any  dividend
payment date for the Preferred Shares (except during the initial dividend period
and during a Non-Call  Period) at a redemption  price generally equal to $25,000
per share plus accumulated and unpaid dividends.  In certain circumstances,  the
Preferred  Shares  will be  subject  to  mandatory  redemption  by the Fund at a
redemption price of $25,000 per share plus accumulated and unpaid dividends. See
"Redemption."

DIVIDENDS AND RATE PERIODS.

     GENERAL.  The  following is a general  description  of  dividends  and rate
periods for the  Preferred  Shares.  The initial  rate period for the  Preferred
Shares will be _____days  and the dividend  rate for this period will be _____%.
Subsequent  rate  periods  will  be 28  days,  and  the  dividend  rate  will be
determined by auction.  The Fund, subject to certain conditions,  may change the
length of subsequent  rate periods by designating  them as special rate periods.
See "Designation of Special Rate Periods" below.

     DIVIDEND PAYMENT DATES.  Dividends on the Preferred Shares will be payable,
when,  as and if  declared  by the  Board,  out of  legally  available  funds in
accordance  with  the  Fund's  Charter  and  applicable  law.  Dividend  periods
generally  will begin on the first  business day after an auction.  If dividends
are payable on a day that is not a business day, then  dividends  will generally
be  payable  on the next  day if such day is a  business  day,  or as  otherwise
specified in the  Articles  Supplementary.  If a dividend  payment date is not a
business  day  because  the NYSE is closed  for  business  for more  than  three
consecutive  business days due to an act of God, natural  disaster,  act of war,
civil or military disturbance,  act of terrorism,  sabotage,  riots or a loss or
malfunction of utilities or communications  services, or the dividend payable on
such date cannot be paid for any such reason, then:

     o    the dividend payment date for the affected dividend period will be the
          next business day on which the Fund and its paying agent,  if any, are
          able to cause the  dividend  to be paid using  their  reasonable  best
          efforts;

     o    the affected  dividend  period will end on the day it would have ended
          had such event not occurred and the dividend payment date had remained
          the scheduled date; and

     o    the next  dividend  period will begin and end on the dates on which it
          would  have  begun  and  ended had such  event  not  occurred  and the
          dividend payment date remained the scheduled date.

Dividends  will be paid through DTC on each dividend  payment date. The dividend
payment date will normally be the first  business day after the dividend  period
ends. DTC, in accordance with its current procedures,  is expected to distribute
dividends  received  from the Auction  Agent in same-day  funds on each dividend
payment  date to Agent  Members.  These Agent  Members  are in turn  expected to
distribute  such  dividends  to the  persons for whom they are acting as agents.
Each of the  current  Broker-Dealers  has  indicated  to the Fund that  dividend
payments will be available in same-day  funds on each  dividend  payment date to
customers  that  use a  Broker-Dealer  or a  Broker-Dealer's  designee  as Agent
Member.

<PAGE>

     CALCULATION OF DIVIDEND PAYMENT.  The Fund computes the dividends per share
payable on the Preferred  Shares by multiplying the applicable rate in effect by
a fraction.  The  numerator of this fraction will normally be the number of days
in the rate period and the  denominator  will normally be 360. This rate is then
multiplied  by $25,000 to arrive at the  dividends  per share.  Dividends on the
Preferred Shares will accumulate from the date of their original issue, which is
_________, 2005. For each dividend payment period after the initial rate period,
the dividend will be the dividend rate determined at auction.  The dividend rate
that results from an auction will not be greater than the maximum rate described
below.

     DETERMINATION OF MAXIMUM  APPLICABLE RATE. The maximum  applicable rate for
any regular  period will be the higher of (as set forth in the table  below) the
applicable  percentage of the Reference Rate or the  applicable  spread plus the
Reference Rate. The Reference Rate is the applicable  LIBOR Rate (for a dividend
period or a special  dividend  period of fewer than 365 days), or the applicable
Treasury Index Rate (for a special  dividend period of 365 days or more). In the
case of a special rate period,  the maximum applicable rate will be specified by
the Fund in the notice of the  special  rate  period for such  dividend  payment
period. The applicable  percentage or applicable spread is determined on the day
that a notice of a special rate period is  delivered  if the notice  specifies a
maximum applicable rate for a special rate period. The applicable  percentage or
applicable  spread will be determined based on the lower of the credit rating or
ratings assigned to the Preferred Shares by Moody's and Fitch.

The "LIBOR Rate," as described in greater detail in the Articles  Supplementary,
is the applicable  London  Inter-Bank  Offered Rate for deposits in U.S. dollars
for the period most closely approximating the applicable dividend period for the
Preferred Shares.

The  "Treasury  Index  Rate," as  described  in greater  detail in the  Articles
Supplementary,  is the average  yield to  maturity  for  certain  U.S.  Treasury
securities  having  substantially  the same length to maturity as the applicable
dividend period for the Preferred Shares.

<TABLE>
<CAPTION>
                       Applicable Percentage Payment Table

                                               Applicable
             Credit Ratings                    Percentage       Applicable Spread
      Moody's           Fitch
   <S>                  <C>                    <C>              <C>
   Aaa                  AAA                    125%             1.25%
   Aa3 to Aa1           A- to AA+              150%             1.50%
   A3 to A1             A- to A+               200%             2.00%
   Baa3 to Baa1         BBB- to BBB+           250%             2.50%
   Ba1 and lower        BB+ and lower          300%             3.00%
</TABLE>


Assuming  the Fund  maintains an Aaa/AAA  rating on the  Preferred  Shares,  the
practical  effect  of the  different  methods  used  to  calculate  the  maximum
applicable rate is shown in the table below:

<TABLE>
<CAPTION>
                       Maximum Applicable
                        Rate Using the      Maximum Applicable      Method Used to
                          Applicable         Rate Using the       Determine the Maximum
   Reference Rate      Percentage          Applicable Spread      Applicable Rate
   <S>                 <C>                 <C>                    <C>
   1%                  1.25%               2.25%                  Spread
   2%                  2.50%               3.25%                  Spread
   3%                  3.75%               4.25%                  Spread
   4%                  5.00%               5.25%                  Spread
   5%                  6.25%               6.25%                  Either
   6%                  7.50%               7.25%                  Percentage
</TABLE>


The Board may amend the  maximum  applicable  rate to  increase  the  percentage
amount by which the Reference Rate described above is multiplied, or to increase
the spread added to the Reference Rate, to determine the maximum applicable rate
shown  without the vote or consent of the holders of  Preferred  Shares,  or any
other  shareholder  of the Fund,  but only with  confirmation  from each  rating
agency  then rating the  Preferred  Shares that such action will not impair such
agency's then-current rating of the Preferred Shares,  provided that immediately
following  any such  increase  the Fund could meet the  Preferred  Shares  Basic
Maintenance  Amount test  discussed  below under "Rating  Agency  Guidelines and
Asset Coverage."

<PAGE>

Prior to each dividend  payment  date,  the Fund is required to deposit with the
Auction  Agent  sufficient  funds for the  payment of  declared  dividends.  The
failure to make such deposit will result in the  cancellation of any auction and
the  dividend  rate will be the maximum  applicable  rate until such  failure to
deposit  is cured or, if not timely  cured,  a  non-payment  rate of 300% of the
applicable  Reference  Rate.  The Fund does not intend to establish any reserves
for the payment of dividends.

     RESTRICTIONS  ON  DIVIDENDS  AND  OTHER  DISTRIBUTIONS.  While  any  of the
Preferred  Shares are outstanding,  the Fund,  except as provided below, may not
declare,  pay or set apart for payment,  any dividend or other  distribution  in
respect of its common shares. In addition,  the Fund may not call for redemption
or redeem any of its common  shares.  However,  the Fund is not  confined by the
above restrictions if:

     o    immediately after such transaction, the discounted value of the Fund's
          portfolio would be equal to or greater than the Preferred Shares Basic
          Maintenance  Amount  and the value of the  Fund's  portfolio  would be
          equal to or greater than the 1940 Act Preferred  Share Asset  Coverage
          (see "Rating Agency Guidelines and Asset Coverage" below);

     o    full cumulative  dividends on the Preferred  Shares due on or prior to
          the date of the transaction  have been declared and paid or shall have
          been declared and sufficient  funds for the payment thereof  deposited
          with the Auction Agent; and

     o    the Fund has redeemed the full number of Preferred  Shares required to
          be redeemed by any provision for mandatory redemption contained in the
          Articles Supplementary.

The Fund generally  will not declare,  pay or set apart for payment any dividend
on any  class or series of shares  of the Fund  ranking,  as to the  payment  of
dividends,  on a parity with  Preferred  Shares unless the Fund has declared and
paid or  contemporaneously  declares and pays full  cumulative  dividends on the
Preferred  Shares through its most recent dividend payment date.  However,  when
the Fund has not paid  dividends in full upon the Preferred  Shares  through the
most recent dividend payment date or upon any other class or series of shares of
the Fund  ranking,  as to the payment of dividends,  on a parity with  Preferred
Shares through their most recent  respective  dividend payment dates, the amount
of  dividends  declared  per share on  Preferred  Shares and such other class or
series  of shares  will in all cases  bear to each  other  the same  ratio  that
accumulated  dividends  per share of  Preferred  Shares and such other  class or
series of shares bear to each other.

     DESIGNATION OF SPECIAL RATE PERIODS.  The Fund may, in certain  situations,
declare a special  rate period.  Prior to  declaring a special rate period,  the
Fund will give notice (a "notice of special rate  period") to the Auction  Agent
and to each  Broker-Dealer.  The notice will state that the next succeeding rate
period for the  Preferred  Shares will be a number of days as  specified in such
notice.  The Fund may not  designate  a special  rate period  unless  sufficient
clearing bids were made in the most recent auction. In addition, full cumulative
dividends,  any  amounts  due with  respect  to  mandatory  redemptions  and any
additional  dividends  payable  prior  to  such  date  must  be  paid in full or
deposited with the Auction Agent. The Fund also must have received  confirmation
from Moody's and Fitch or any substitute rating agency that the proposed special
rate period will not adversely affect such agency's  then-current  rating on the
Preferred  Shares and the  Underwriter  designated by the Fund,  initially [Lead
Underwriter],  must not have objected to declaration of a special rate period. A
notice of  special  rate  period  also will  specify  whether  the shares of the
Preferred Shares will be subject to optional redemption during such special rate
period and, if so, the redemption  premium,  if any,  required to be paid by the
Fund in connection with such optional redemption.

     NON-PAYMENT PERIOD AND LATE CHARGE. A "failure to deposit," with respect to
the Preferred  Shares,  means a failure by the Fund to pay to the Auction Agent,
not later than 12:00  noon,  New York City time,  (A) on the  business  day next
preceding any dividend  payment date for the Preferred Shares in funds available
on such dividend payment date in the City of New York, New York, the full amount
of any dividend  (whether or not earned or declared) to be paid on such dividend
payment date or (B) on the business day next  preceding any  redemption  date in
funds  available on such  redemption date in the City of New York, New York, the
redemption  price to be paid on such  redemption date after notice of redemption
is mailed;  provided,  however, that the foregoing clause (B) shall not apply to
the Fund's  failure to pay the redemption  price in respect of Preferred  Shares
when the related notice of redemption provides that redemption of such shares is
subject to one or more  conditions  precedent and any such  condition  precedent
shall not have been  satisfied at the time or times and in the manner  specified
in such notice of redemption. If a failure to deposit occurs but, prior to 12:00
noon, New York City time, on the third business day next  succeeding the date on
which such failure to deposit occurred,  such failure to deposit shall have been
cured and the Fund shall have paid to the  Auction  Agent a late  charge  ("Late
Charge")  equal to the sum of (1) if such  failure to deposit  consisted  of the
failure to timely pay to the  Auction  Agent the full amount of  dividends  with
respect to any dividend  period,  an amount  computed by multiplying (x) 300% of
the Reference Rate for the dividend  period during which such failure to deposit
occurs on the dividend  payment date for such dividend period by (y) a fraction,
the  numerator  of which  shall be the number of days for which such  failure to
deposit has not been cured (including the day such failure to deposit occurs and
excluding the day such failure to deposit is cured) and the denominator of which
shall be 360, and applying the rate obtained  against the aggregate  liquidation
preference  of the  outstanding  Preferred  Shares  and (2) if such  failure  to
deposit  consisted  of the  failure  to  timely  pay to the  Auction  Agent  the
redemption price of the shares,  if any, for which notice of redemption has been
mailed by the Fund, an amount  computed by multiplying (x) 300% of the Reference
Rate for the dividend  period during which such failure to deposit occurs on the
redemption date by (y) a fraction, the numerator of which shall be the number of
days for which such  failure to  deposit  is not cured  (including  the day such
failure  to  deposit  occurs and  excluding  the day such  failure to deposit is
cured) and the denominator of which shall be 360, and applying the rate obtained
against the aggregate  liquidation  preference of the  outstanding  shares to be
redeemed,  then no  auction  will be held  for the  subsequent  dividend  period
thereof and the dividend rate for such  subsequent  dividend  period will be the
maximum applicable rate on the auction date for such subsequent dividend period.
If any failure to deposit  shall have  occurred  with  respect to the  Preferred
Shares during any dividend  period  thereof,  and, prior to 12:00 noon, New York
City time,  on the third  business  day next  succeeding  the date on which such
failure to deposit  occurred,  such failure to deposit shall not have been cured
or the Fund shall not have paid the applicable Late Charge to the Auction Agent,
no auction will be held in respect of Preferred  Shares for the first subsequent
dividend  period  thereafter  (or  for any  dividend  period  thereafter  to and
including the dividend  period during which (1) such failure to deposit is cured
and (2) the Fund pays the  applicable  Late  Charge to the  Auction  Agent  (the
condition  set forth in this  clause (2) to apply  only in the event  Moody's is
rating such shares at the time the Fund cures such failure to deposit),  in each
case no later than 12:00 noon,  New York City time,  on the fourth  business day
prior to the end of such  dividend  period)  (a  "non-payment  period")  and the
dividend rate for each such subsequent dividend period shall be a rate per annum
(the "non-payment period rate") equal to 300% of the applicable  Reference Rate,
provided  that the Board shall have the  authority to adjust,  modify,  alter or
change  from time to time such  initial  rate if the  Board  determines  and the
rating  agencies (or any  substitute  rating  agency) advise the Fund in writing
that such  adjustment,  modification,  alteration  or change will not  adversely
affect the then-current ratings on the Preferred Shares.

<PAGE>


REDEMPTION

     MANDATORY  REDEMPTION.  The Fund is required to maintain  (a) a  discounted
value of eligible  portfolio  securities  equal to the  Preferred  Shares  Basic
Maintenance Amount and (b) the 1940 Act Preferred Share Asset Coverage (at least
200% with  respect  to senior  securities  which are  equity  shares,  including
Preferred Shares).  Eligible portfolio  securities for purposes of the Preferred
Shares  Basic  Maintenance  Amount will be  determined  from time to time by the
rating agencies then rating the Preferred  Shares. If the Fund fails to maintain
such asset coverage  amounts and does not timely cure such failure in accordance
with the requirements of the rating agencies that rate the Preferred Shares, the
Fund must  redeem  all or a portion  of the  Preferred  Shares.  This  mandatory
redemption  will take  place on a date that the Board  specifies  out of legally
available  funds, in accordance with the Articles  Supplementary  and applicable
law, at the redemption  price of $25,000 per share plus  accumulated  but unpaid
dividends  (whether or not declared) to (but not  including)  the date fixed for
redemption.  The number of  Preferred  Shares  that must be redeemed in order to
cure such  failure will be allocated  pro rata among the  outstanding  Preferred
Shares.  The  mandatory  redemption  will be limited to the number of  Preferred
Shares  necessary,  after giving  effect to such  redemption,  in order that the
discounted  value of the Fund's portfolio equals or exceeds the Preferred Shares
Basic  Maintenance  Amount,  and the  value of the  Fund's  portfolio  equals or
exceeds the 1940 Act Preferred Share Asset  Coverage.  In determining the number
of Preferred  Shares  required to be redeemed in accordance  with the foregoing,
the Fund will  allocate the number of shares  required to be redeemed to satisfy
the Preferred  Shares Basic  Maintenance  Amount or the 1940 Act Preferred Share
Asset Coverage,  as the case may be, pro rata among the Preferred Shares and any
other preferred shares of the Fund subject to redemption or retirement. If fewer
than all  outstanding  shares are,  as a result,  to be  redeemed,  the Fund may
redeem such shares by lot or other method that it deems fair and equitable.

     OPTIONAL  REDEMPTION.  To the  extent  permitted  under  the  1940  Act and
Maryland law, the Fund at its option may,  without the consent of the holders of
Preferred  Shares,  redeem Preferred Shares having a dividend period of one year
or less,  in whole or in part,  on the  business  day after the last day of such
dividend  period  upon not less  than 15  calendar  days'  and not more  than 40
calendar  days' prior notice.  The optional  redemption  price per share will be
$25,000 per share,  plus an amount  equal to  accumulated  but unpaid  dividends
thereon  (whether or not earned or  declared)  to the date fixed for  redemption
plus the  premium,  if any,  resulting  from the  designation  of a Premium Call
Period.  Preferred  Shares  having a  dividend  period of more than one year are
redeemable at the option of the Fund,  in whole or in part,  prior to the end of
the relevant  dividend period,  subject to any specific  redemption  provisions,
which may  include  the payment of  redemption  premiums to the extent  required
under any applicable specific redemption provisions.  The Fund will not make any
optional  redemption  unless,  after  giving  effect  thereto,  (i) the Fund has
available  certain deposit  securities with maturities or tender dates not later
than the day preceding  the  applicable  redemption  date and having a value not
less than the  amount  (including  any  applicable  premium)  due to  holders of
Preferred  Shares by reason of the  redemption of Preferred  Shares on such date
fixed for the redemption and (ii) the Fund has eligible assets with an aggregate
discounted  value  at least  equal to the  Preferred  Shares  Basic  Maintenance
Amount.  Notwithstanding the foregoing,  Preferred Shares may not be redeemed at
the option of the Fund  unless  all  dividends  in  arrears  on the  outstanding
Preferred Shares,  including all outstanding  preferred shares, have been or are
being  contemporaneously  paid or set aside for payment.  This would not prevent
the lawful  purchase or  exchange  offer for  Preferred  Shares made on the same
terms to holders of all outstanding preferred shares.


LIQUIDATION

If the Fund is  liquidated,  the holders of  outstanding  Preferred  Shares will
receive the liquidation  preference,  plus all accumulated but unpaid dividends,
before any  payment  is made to the  holders of common  shares.  The  holders of
Preferred  Shares will be entitled to receive  these  amounts from the assets of
the Fund available for distribution to its shareholders. In addition, the rights
of holders of  Preferred  Shares to receive  these  amounts  are  subject to the
rights of holders of other preferred shares ranking on parity with the Preferred
Shares with respect to the  distribution of assets upon liquidation of the Fund.
After the payment to the holders of  Preferred  Shares of the full  preferential
amounts as  described,  the  holders of  Preferred  Shares will have no right or
claim to any of the remaining assets of the Fund.

<PAGE>

For purpose of the foregoing paragraph,  a voluntary or involuntary  liquidation
of the Fund does not include:

     o    the sale of all or  substantially  all the property or business of the
          Fund;

     o    the  merger  or  consolidation  of the  Fund  into or with  any  other
          business trust or corporation; or

     o    the merger or consolidation of any other business trust or corporation
          into or with the Fund.

In addition,  none of the foregoing  would result in the Fund being  required to
redeem any  Preferred  Shares if after such  transaction  the Fund  continued to
comply with the rating agency guidelines and asset coverage ratios.

RATING AGENCY  GUIDELINES AND ASSET  COVERAGE.  It is expected that Moody's will
assign a rating of Aaa and Fitch  will  assign a rating of AAA to the  Preferred
Shares.  Securities  rated Aaa by Moody's are  considered by Moody's as the best
quality  investment grade securities and carry the smallest degree of investment
risk.  Interest payments are protected by a large or by an exceptionally  stable
margin and principal is secure. While the various protective elements are likely
to change,  the  changes  that can be expected  are most  unlikely to impair the
fundamentally  strong  position of such  issues.  Securities  rated AAA by Fitch
denote the lowest  expectation of credit risk. They are assigned only in case of
exceptionally strong capacity for timely payment of financial commitments.  This
capacity is highly unlikely to be adversely affected by foreseeable events.

The Fund is required  under  guidelines of Moody's and Fitch to maintain  assets
having in the  aggregate  a  discounted  value at least  equal to the  Preferred
Shares  Basic  Maintenance  Amount.  Moody's  and Fitch  have  each  established
separate  guidelines  for  calculating  discounted  value.  To  the  extent  any
particular portfolio holding does not satisfy a rating agency's guidelines,  all
or a portion of the holding's  value will not be included in the rating agency's
calculation of discounted  value.  The Moody's and Fitch  guidelines also impose
certain  diversification  requirements on the Fund's portfolio.  The Moody's and
Fitch  guidelines do not impose any  limitations on the percentage of the Fund's
assets that may be  invested  in holdings  not  eligible  for  inclusion  in the
calculation  of the  discounted  value of the  Fund's  portfolio.  The amount of
ineligible  assets  included  in the  Fund's  portfolio  at any  time  may  vary
depending  upon the rating,  diversification  and other  characteristics  of the
eligible  assets  included  in  the  portfolio.   The  Preferred   Shares  Basic
Maintenance Amount is the sum of (a) the aggregate liquidation preference of the
Preferred  Shares then  outstanding,  together  with the  aggregate  liquidation
preference on any other series of preferred shares (plus redemption  premium, if
any),  and  (b)  certain  accrued  and  projected  dividend  and  other  payment
obligations of the Fund.

The Fund is also required  under the 1940 Act to maintain the 1940 Act Preferred
Share Asset  Coverage.  The Fund's 1940 Act  Preferred  Share Asset  Coverage is
tested as of the last  business  day of each  month in which any  senior  equity
securities are outstanding.  The minimum required 1940 Act Preferred Share Asset
Coverage  amount  of 200%  may be  increased  or  decreased  if the  1940 Act is
amended.  Based on the  composition  of the  portfolio  of the  Fund and  market
conditions as of __________  2005,  the 1940 Act Preferred  Share Asset Coverage
with  respect to all of the Fund's  preferred  shares,  assuming the issuance on
that date of all  Preferred  Shares  offered  hereby  and  giving  effect to the
deduction  of  related  sales  load and  related  offering  costs  estimated  at
approximately $________ would have been computed as follows:


  Value of Fund assets less liabilities not          $
       constituting senior securities
_____________________________________________   =    __________   = _________%

 Senior securities representing indebtedness
   plus liquidation value of the preferred           $
                   shares

In the  event  the  Fund  does not  timely  cure a  failure  to  maintain  (a) a
discounted  value of its portfolio at least equal to the Preferred  Shares Basic
Maintenance  Amount or (b) the 1940 Act Preferred Share Asset Coverage,  in each
case in accordance  with the  requirements of the rating agency or agencies then
rating the  Preferred  Shares,  the Fund will be  required  to redeem  preferred
shares as described under "Redemption - Mandatory Redemption" above.

The Fund may, but is not required to, adopt any  modifications to the guidelines
that  may be  established  by  Moody's  or  Fitch.  Failure  to  adopt  any such
modifications,  however,  may result in a change in the ratings  assigned to the
Preferred Shares or a withdrawal of ratings altogether.  In addition, any rating
agency providing a rating for the Preferred  Shares may, at any time,  change or
withdraw any such rating. The Board may, without  shareholder  approval,  amend,
alter or repeal any or all of the definitions and related  provisions which have
been adopted by the Fund pursuant to the rating  agency  guidelines in the event
such rating agency is no longer rating the Preferred Shares or the Fund receives
written  confirmation  from Moody's or Fitch,  as the case may be, that any such
amendment, alteration or repeal would not impair the rating then assigned to the
Preferred Shares.

As recently  described  by Moody's and Fitch,  a  preferred  stock  rating is an
assessment of the capacity and  willingness of an issuer to pay preferred  stock
obligations.  The  rating on the  Preferred  Shares is not a  recommendation  to
purchase,  hold or sell those shares, inasmuch as the rating does not comment as
to market price or  suitability  for a particular  investor.  The rating  agency
guidelines  described  above also do not address the likelihood that an owner of
Preferred  Shares will be able to sell such  shares in an auction or  otherwise.
The rating is based on current information furnished to Moody's and Fitch by the
Fund and the Adviser and information obtained from other sources. The rating may
be  changed,  suspended  or  withdrawn  as  a  result  of  changes  in,  or  the
unavailability of, such information.  The common shares have not been rated by a
nationally recognized statistical rating organization.

<PAGE>

The rating agency's  guidelines will apply to the Preferred  Shares only so long
as the rating  agency is rating the shares.  The Fund will pay  certain  fees to
Moody's and Fitch for rating the Preferred Shares.

VOTING RIGHTS.  Except as otherwise  provided in this prospectus or as otherwise
required by law,  holders of Preferred Shares will have equal voting rights with
holders of common shares and any other preferred shares (one vote per share) and
will vote together  with holders of common shares and any preferred  shares as a
single class.

Holders of outstanding preferred shares, including Preferred Shares, voting as a
separate class, are entitled to elect two of the Fund's Directors. The remaining
Directors  are  elected  by  holders  of common  shares  and  preferred  shares,
including  Preferred  Shares,  voting  together as a single  class.  The term of
Directors  elected by holders of preferred stock,  such as the Preferred Shares,
will terminate  automatically upon redemption in full of the preferred stock. If
at any time  dividends  (whether  or not  earned  or  declared)  on  outstanding
preferred shares,  including  Preferred Shares,  are due and unpaid in an amount
equal  to two  full  years  of  dividends,  and  sufficient  cash  or  specified
securities  have not been  deposited  with the Auction  Agent for the payment of
such  dividends,  then,  the sole  remedy of  holders of  outstanding  preferred
shares, including Preferred Shares, is that the number of Directors constituting
the Board will be  automatically  increased  by the smallest  number that,  when
added to the two  Directors  elected  exclusively  by the  holders of  preferred
shares,  including  Preferred  Shares,  as described  above,  would constitute a
majority of the Board.  The holders of  preferred  shares,  including  Preferred
Shares,  will be entitled to elect that smallest number of additional  Directors
at a special  meeting of  shareholders as soon as possible and at all subsequent
meetings  at which  Directors  are to be  elected.  The  terms of  office of the
persons who are  Directors at the time of that election  will  continue.  If the
Fund  thereafter  shall pay, or declare and set apart for payment,  in full, all
dividends  payable on all  outstanding  preferred  shares,  including  Preferred
Shares,  the special  voting  rights  stated above will cease,  and the terms of
office of the additional  Directors  elected by the holders of preferred shares,
including Preferred Shares, will automatically terminate.

As long as any Preferred Shares are outstanding,  the Fund will not, without the
affirmative  vote or  consent  of the  holders  of at  least a  majority  of the
Preferred Shares outstanding at the time (voting together as a separate class):

     (a) authorize,  create or issue any class or series of shares ranking prior
to or on a parity with the Preferred Shares with respect to payment of dividends
or the  distribution  of assets on  dissolution,  liquidation  or winding up the
affairs of the Fund,  or  authorize,  create or issue  additional  shares of any
series of Preferred Shares or any other preferred shares, unless, in the case of
preferred shares on a parity with the Preferred Shares, the Fund obtains written
confirmation  from Moody's (if Moody's is then rating preferred  shares),  Fitch
(if Fitch is then rating preferred  shares) or any substitute  rating agency (if
any such  substitute  rating  agency is then rating  preferred  shares) that the
issuance of a class or series would not impair the rating then  assigned by such
rating  agency to the  Preferred  Shares and the Fund  continues  to comply with
Section  13 of the 1940  Act,  the  1940  Act  Preferred  Share  Asset  Coverage
requirements and the Preferred Shares Basic Maintenance Amount requirements,  in
which  case the vote or consent of the  holders of the  Preferred  Shares is not
required;

     (b)  amend,  alter or repeal the  provisions  of the  Charter  or  Articles
Supplementary by merger,  consolidation or otherwise,  so as to adversely affect
any preference,  right or power of the Preferred  Shares or holders of Preferred
Shares;  provided,  however,  that  (i)  none of the  actions  permitted  by the
exception  to (a) above  will be deemed to affect  such  preferences,  rights or
powers,  (ii) a  division  of  Preferred  Shares  will be deemed to affect  such
preferences,  rights or  powers  only if the  terms of such  division  adversely
affect the holders of Preferred Shares and (iii) the authorization, creation and
issuance of classes or series of shares ranking  junior to the Preferred  Shares
with respect to the payment of  dividends  and the  distribution  of assets upon
dissolution, liquidation or winding up of the affairs of the Fund will be deemed
to affect  such  preferences,  rights or powers only if Moody's or Fitch is then
rating the Preferred Shares and such issuance would, at the time thereof,  cause
the Fund not to satisfy  the 1940 Act  Preferred  Share  Asset  Coverage  or the
Preferred Shares Basic Maintenance Amount; or

     (c)  approve  any  reorganization  (as such  term is used in the 1940  Act)
adversely affecting the Preferred Shares.

So long as any shares of the  Preferred  Shares are  outstanding,  the Fund will
not,  without the affirmative vote or consent of the holders of at least 66 2/3%
of the Preferred Shares  outstanding at the time, in person or by proxy,  either
in  writing  or at a  meeting,  voting as a  separate  class,  file a  voluntary
application for relief under federal  bankruptcy law or any similar  application
under state law for so long as the Fund is solvent and does not foresee becoming
insolvent.

To the extent permitted under the 1940 Act, the Fund will not approve any of the
actions  set  forth in (a) or (b)  above  which  adversely  affects  the  rights
expressly  set forth in the  Charter or  Articles  Supplementary  of a holder of
preferred  shares  differently  than  those of a holder of any  other  preferred
shares  without  the  affirmative  vote or consent of the  holders of at least a
majority  of the  shares  of each  series  adversely  affected.  Unless a higher
percentage  is provided  for under the Charter or  Articles  Supplementary,  the
affirmative  vote of the  holders of a  majority  of the  outstanding  Preferred
Shares,  voting together as a single class, will be required to approve any plan
of reorganization  (including bankruptcy  proceedings)  adversely affecting such
shares or any action requiring a vote of security holders under Section 13(a) of
the 1940 Act.  However,  to the extent  permitted  by the  Charter  or  Articles
Supplementary,  no vote of  holders  of  common  shares,  either  separately  or
together  with holders of preferred  shares as a single  class,  is necessary to
take the actions contemplated by (a) and (b) above. The holders of common shares
will not be entitled to vote in respect of such matters  unless,  in the case of
the actions  contemplated by (b) above,  the action would  adversely  affect the
contract  rights of the  holders  of common  shares  expressly  set forth in the
Charter.

<PAGE>

The foregoing voting provisions will not apply with respect to Preferred Shares
if, at or prior to the time when a vote is required, such shares have been (i)
redeemed or (ii) called for redemption and sufficient funds have been deposited
in the Fund to effect such redemption.


                                   THE AUCTION

GENERAL. The Articles  Supplementary provide that, except as otherwise described
in this  prospectus,  the  applicable  rate for the  Preferred  Shares  for each
dividend period after the initial  dividend period will be the rate that results
from an  auction  conducted  as set  forth in the  Articles  Supplementary,  the
material  terms of which  are  summarized  below.  In such an  auction,  persons
determine  to hold or offer to sell or,  based on  dividend  rates  bid by them,
offer to purchase  or sell  Preferred  Shares.  See the  Articles  Supplementary
included as Appendix C in the  Statement of  Additional  Information  for a more
complete description of the auction process.

AUCTION AGENCY  AGREEMENT.  The Fund will enter into an auction agency agreement
with the Auction Agent  (currently,  Deutsche Bank Trust Company Americas) which
provides,  among other  things,  that the Auction  Agent will follow the Auction
Procedures to determine the applicable rate for the Preferred  Shares so long as
the applicable rate for the Preferred Shares is to be based on the results of an
auction.

The Auction Agent will act as agent for the Fund in connection with auctions. In
the absence of bad faith or negligence  on its part,  the Auction Agent will not
be  liable  for any  action  taken,  suffered  or  omitted,  or for any error of
judgment  made, by it in the  performance of its duties under the auction agency
agreement  and will not be liable for any error of  judgment  made in good faith
unless the Auction Agent shall have been negligent in ascertaining the pertinent
facts.  Pursuant  to the  auction  agency  agreement,  the Fund is  required  to
indemnify the Auction Agent for certain losses and  liabilities  incurred by the
Auction Agent without negligence or bad faith on its part in connection with the
performance of its duties under such agreement.

The Auction Agent may terminate the auction agency  agreement upon notice to the
Fund no earlier than 60 days after delivery of said notice. If the Auction Agent
should  resign or its  appointment  is  terminated  during any  period  that any
Preferred  Shares are  outstanding,  the Fund will use its best efforts to enter
into an agreement with a successor  auction agent containing  substantially  the
same terms and conditions as the auction agency  agreement.  The Fund may remove
the Auction Agent provided that,  prior to removal,  the Fund has entered into a
replacement agreement with a successor auction agent.

BROKER-DEALER AGREEMENTS. Each auction requires the participation of one or more
Broker-Dealers.  The  Auction  Agent  will enter into  agreements  with  several
Broker-Dealers  selected by the Fund,  which  provide for the  participation  of
those Broker-Dealers in auctions for Preferred Shares.

The Auction Agent will pay to each Broker-Dealer after each auction,  from funds
provided by the Fund, a service charge:  (i) for any  twenty-eight-day  dividend
period,  at the annual  rate of 1/4 of 1% of the  liquidation  preference  (such
liquidation  preference being $25,000 per share) of the Preferred Shares held by
a Broker-Dealer's  customer upon settlement in an auction (equal to $[62.50] per
Preferred  Shares  per  year)  and  (ii) for any  special  dividend  period,  as
determined  by  mutual  consent  of the  Fund  and  any  such  Broker-Dealer  or
Broker-Dealers  and which shall be based upon a selling concession that would be
applicable to an underwriting of fixed or variable rate preferred  shares with a
similar fixed maturity or variable rate dividend  period,  respectively,  at the
commencement of the dividend  period with respect to such auction.  This service
charge  applies to  Preferred  Shares  held on  account  of the  Broker-Dealer's
clients as well as to Preferred Shares held for the Broker-Dealer's own account.
A  Broker-Dealer  may  share a portion  of any such fees with  non-participating
broker-dealers  that submit orders to the  Broker-Dealer for an auction that are
placed by that Broker-Dealer at such auction.

The Fund may request that the Auction Agent terminate one or more  Broker-Dealer
Agreements  at any time  upon  five  days'  notice,  provided  that at least one
Broker-Dealer Agreement is in effect after termination of the Agreement(s).

AUCTION  PROCEDURES.  The following is a brief summary of the material  terms of
the procedures to be used in conducting  auctions.  This summary is qualified by
reference to the Auction  Procedures  set forth in the  Articles  Supplementary,
which is attached as Appendix C to the Statement of Additional Information.  The
settlement  procedures  to be used with  respect  to  auctions  are set forth in
Appendix D to the Statement of Additional Information.

Prior to the submission  deadline on each auction date for the Preferred Shares,
each  customer  of a  Broker-Dealer  who  is  listed  on  the  records  of  that
Broker-Dealer  (or, if  applicable,  the Auction Agent) as a holder of Preferred
Shares, or a Broker-Dealer that holds Preferred Shares for its own account,  may
submit the  following  types of orders with respect to the  Preferred  Shares to
that Broker-Dealer:

     1.   Hold Order - indicating  its desire to hold shares  without  regard to
          the applicable rate for the next dividend period.

<PAGE>

     2.   Bid - indicating  its desire to purchase or hold the indicated  number
          of shares at  $25,000  per share if the  applicable  rate for the next
          dividend  period is not less than the rate specified in the bid. A bid
          order by an  existing  holder will be deemed an  irrevocable  offer to
          sell shares at $25,000 per share if the  applicable  rate for the next
          dividend period is less than the rate or spread specified in the bid.

     3.   Sell Order - indicating its desire to sell shares at $25,000 per share
          without regard to the applicable rate for the next dividend period.

A beneficial  owner may submit  different  types of orders to its  Broker-Dealer
with respect to different  Preferred Shares then held by the beneficial owner. A
beneficial owner that submits its bid to its Broker-Dealer  having a rate higher
than the maximum  applicable  rate on the auction date will be treated as having
submitted a sell order to its  Broker-Dealer.  A beneficial  owner that fails to
submit an order to its Broker-Dealer will ordinarily be deemed to have submitted
a hold order to its  Broker-Dealer.  However,  if a  beneficial  owner  fails to
submit  an order to its  Broker-Dealer  for an  auction  relating  to a  special
dividend period of more than [91] days such  beneficial  owner will be deemed to
have submitted a sell order to its  Broker-Dealer.  A sell order  constitutes an
irrevocable  offer to sell the  Preferred  Shares  subject to the sell order.  A
beneficial  owner  that  offers to become  the  beneficial  owner of  additional
Preferred Shares is, for purposes of such offer, a potential holder as discussed
below.

A potential beneficial owner is either a customer of a Broker-Dealer that is not
a  beneficial  owner of Preferred  Shares but that wishes to purchase  shares or
that is a beneficial owner of shares that wishes to purchase  additional shares.
A potential  beneficial  owner may submit bids to its  Broker-Dealer in which it
offers to purchase shares at $25,000 per share if the applicable rate for shares
for the next dividend  period is not less than the specified rate in such bid. A
bid placed by a  potential  holder of shares  specifying  a rate higher than the
maximum rate for shares on the auction date will not be accepted.

The Broker-Dealers in turn will submit the orders of their respective  customers
who are beneficial  owners and potential holders to the Auction Agent. They will
designate  themselves  (unless  otherwise  permitted  by the  Fund) as  existing
holders of shares  subject to orders  submitted  or deemed  submitted to them by
beneficial owners. They will designate themselves as potential holders of shares
subject to orders  submitted to them by potential  beneficial  owners.  However,
neither the Fund nor the Auction Agent will be responsible for a Broker-Dealer's
failure to comply  with these  Auction  Procedures.  Any order  placed  with the
Auction  Agent by a  Broker-Dealer  as or on behalf of an  existing  holder or a
potential  holder  will be  treated  the  same  way as an  order  placed  with a
Broker-Dealer by a beneficial owner or potential holder.  Similarly, any failure
by a  Broker-Dealer  to submit to the Auction  Agent an order for any  Preferred
Shares held by it or customers  who are  beneficial  owners will be treated as a
beneficial owner's failure to submit to its Broker-Dealer an order in respect of
Preferred  Shares  held by it. A  Broker-Dealer  may also  submit  orders to the
Auction  Agent for its own account as an existing  holder or  potential  holder,
provided it is not an affiliate of the Fund. If a Broker-Dealer submits an order
for its own  account in any  auction,  it may have  knowledge  of orders  placed
through it in that auction and therefore  have an advantage  over other bidders,
but such  Broker-Dealer  would not have  knowledge of orders  submitted by other
Broker-Dealers  in that auction.  As a result of bidding by the Broker-Dealer in
an  auction,  the  auction  rate may be higher or lower than the rate that would
have prevailed had the Broker-Dealer not bid.

There are  sufficient  clearing  bids for  shares in an auction if the number of
shares  subject to bids  submitted or deemed  submitted to the Auction  Agent by
Broker-Dealers  for  potential  holders with rates or spreads  equal to or lower
than the maximum  applicable rate is at least equal to or exceeds the sum of the
number of shares subject to sell orders and the number of shares subject to bids
specifying rates or spreads higher than the maximum applicable rate submitted or
deemed submitted to the Auction Agent by Broker-Dealers for existing holders. If
there are  sufficient  clearing bids for shares,  the  applicable  rate for such
shares for the next  succeeding  dividend period thereof will be the lowest rate
specified  in the  submitted  bids which,  taking into account such rate and all
lower  rates  bid by  Broker-Dealers  as or on behalf of  existing  holders  and
potential holders, would result in existing holders and potential holders owning
the shares available for purchase in the auction.

If there are not sufficient  clearing bids for shares,  the applicable  rate for
the next  dividend  period  will be the maximum  applicable  rate on the auction
date.  If the  Fund has  declared  a  special  rate  period  and  there  are not
sufficient  clearing  bids,  the  election of a special  rate period will not be
effective and the  applicable  rate for the next rate period will be the same as
during the current dividend period.  If there are not sufficient  clearing bids,
beneficial  owners of Preferred Shares that have submitted or are deemed to have
submitted  sell orders may not be able to sell in the auction all shares subject
to such sell orders. If all of the applicable  outstanding  Preferred Shares are
the subject of submitted  hold orders,  then the dividend  period  following the
auction will automatically be the same length as the minimum dividend period and
the  applicable  rate for the next dividend  period will be 90% of the Reference
Rate.

A  Broker-Dealer  may bid in an auction in order to prevent what would otherwise
be (i) a failed auction,  (ii) an "all-hold" auction or (iii) an applicable rate
that the Broker-Dealer  believes,  in its sole discretion,  does not reflect the
market  rate  for  the  Preferred   Shares  at  the  time  of  the  auction.   A
Broker-Dealer,  may,  but is not  obligated  to,  advise  beneficial  owners  of
Preferred  Shares that the  applicable  rate that would  apply in an  "all-hold"
auction  may be lower than the rate that would  apply if owners  submit bids and
such advice,  if given,  may  facilitate  the  submission of bids by owners that
would avoid the occurrence of an "all-hold" auction.

The Auction  Procedures include a pro rata allocation of shares for purchase and
sale which may result in an existing holder continuing to hold or selling,  or a
potential holder purchasing, a number of Preferred Shares that is different than
the  number of shares  specified  in its order.  To the  extent  the  allocation
procedures have that result,  Broker-Dealers that have designated  themselves as
existing  holders or  potential  holders in respect of  customer  orders will be
required  to make  appropriate  pro  rata  allocations  among  their  respective
customers.

<PAGE>

Settlement  of purchases  and sales will be made on the next business day (which
is also a dividend  payment date) after the auction date through the  Securities
Depository. Purchasers will make payment through their Agent Members in same-day
funds to the Securities  Depository  against  delivery to their respective Agent
Members.  The  Securities  Depository  will make payment to the  sellers'  Agent
Members in  accordance  with DTC's  normal  procedures,  which now  provide  for
payment against delivery by their Agent Members in same day funds.

If an auction date is not a business day because the NYSE is closed for business
due  to an  act  of  God,  natural  disaster,  act of  war,  civil  or  military
disturbance,  act of  terrorism,  sabotage,  riots or a loss or  malfunction  of
utilities  or  communications  services,  or the  Auction  Agent  is not able to
conduct  an auction  in  accordance  with the  Auction  Procedures  for any such
reason,  then the auction rate for the next dividend  period will be the auction
rate determined on the previous auction date.

The following is a simplified  example of how a typical  auction  works.  Assume
that the Fund has 1,000 outstanding  Preferred Shares and three current holders.
The three current  holders and three  potential  holders  submit orders  through
Broker-Dealers at the auction:

<TABLE>
<CAPTION>
             Holder                                Goal                                     Action
<S>                               <C>                                     <C>
Current Holder A...........       Owns 500 shares, wants to sell all      Bid order of 4.1% rate for all 500 shares
                                  500 shares if auction rate is less
                                  than 4.1%
Current Holder B...........       Owns 300 shares, wants to hold          Hold order - will take the auction rate
Current Holder C...........       Owns 200 shares, wants to sell all      Bid order of 3.9% rate for all 200 shares
                                  200 shares if auction rate is less
                                  than 3.9%
Potential Holder D.........       Wants to buy 200 shares if auction      Places order to buy at or above 4.0%
                                  rate is equal to or greater than 4.0%
Potential Holder E.........       Wants to buy 300 shares if auction      Places order to buy at or above 3.9%
                                  rate is equal to or greater than 3.9%
Potential Holder F.........       Wants to buy 200 shares if auction      Places order to buy at or above 4.1%
                                  rate is equal to or greater than 4.1%
</TABLE>

The lowest dividend rate that will result in all 1,000  Preferred  Shares in the
above  example  continuing to be held is 4.0% (the offer by D).  Therefore,  the
dividend rate will be 4.0%.  Current  holders B and C will continue to own their
shares.  Current holder A will sell its shares because A's dividend rate bid was
higher  than the  dividend  rate.  Potential  holder D will buy 200  shares  and
potential  holder E will buy 300 shares because their bid rates were at or below
the dividend  rate.  Potential  holder F will not buy any shares because its bid
rate was above the dividend rate.

SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT. Prior to 1:30 p.m., New
York City time,  on each auction date, or such other time on the auction date as
may  be  specified  by the  Auction  Agent  (the  "submission  deadline"),  each
Broker-Dealer will submit to the Auction Agent in writing or through the Auction
Agent's auction  processing  system all orders obtained by it for the auction to
be  conducted  on  such  auction  date,  designating  itself  (unless  otherwise
permitted by the Fund) as the existing holder or potential  holder in respect of
the Preferred Shares subject to such orders. Any order submitted by a beneficial
owner  or  a  potential   beneficial  owner  to  its  Broker-Dealer,   or  by  a
Broker-Dealer  to the Auction Agent,  prior to the  submission  deadline for any
auction date, shall be irrevocable.

If the rate per annum  specified in any bid contains  more than three figures to
the right of the decimal point, the Auction Agent will round such rate per annum
up to the next  highest  one-thousandth  (.001) of  one-percent.  If one or more
orders of an existing  holder are submitted to the Auction Agent and such orders
cover in the aggregate more than the number of outstanding Preferred Shares held
by such existing  holder,  such orders will be considered valid in the following
order of priority:

          (i)  any hold order will be  considered  valid up to and including the
               number of  outstanding  Preferred  Shares  held by such  existing
               holder, provided that if more than one hold order is submitted by
               such existing  holder and the number of Preferred  Shares subject
               to such hold orders exceeds the number of  outstanding  Preferred
               Shares  held by such  existing  holder,  the number of  Preferred
               Shares  subject to each of such hold  orders  will be reduced pro
               rata so that such  hold  orders,  in the  aggregate,  will  cover
               exactly the number of outstanding  Preferred  Shares held by such
               existing holder;

          (ii) any bids will be  considered  valid,  in the  ascending  order of
               their  respective  rates  per  annum  if  more  than  one  bid is
               submitted by such existing holder, up to and including the excess
               of the  number  of  outstanding  Preferred  Shares  held  by such
               existing holder over the number of outstanding  Preferred  Shares
               subject to any hold order referred to in clause (i) above (and if
               more than one bid submitted by such existing holder specifies the
               same  rate per  annum  and  together  they  cover  more  than the
               remaining  number of shares that can be the subject of valid bids
               after  application  of  clause  (i)  above  and of the  foregoing
               portion of this clause (ii) to any bid or bids specifying a lower
               rate or rates per annum,  the number of shares subject to each of
               such bids will be  reduced  pro rata so that  such  bids,  in the
               aggregate,  cover exactly such  remaining  number of  outstanding
               shares); and the number of outstanding shares, if any, subject to
               bids not valid  under  this  clause  (ii) shall be treated as the
               subject of a bid by a potential holder; and

<PAGE>

          (iii) any sell order will be considered  valid up to and including the
               excess of the number of outstanding Preferred Shares held by such
               existing  holder over the sum of the number of  Preferred  Shares
               subject to hold  orders  referred  to in clause (i) above and the
               number of Preferred Shares subject to valid bids by such existing
               holder  referred to in clause (ii) above;  provided that, if more
               than one sell order is submitted  by any existing  holder and the
               number of Preferred Shares subject to such sell orders is greater
               than such excess,  the number of Preferred Shares subject to each
               of such sell  orders  will be reduced  pro rata so that such sell
               orders,  in the  aggregate,  will  cover  exactly  the  number of
               Preferred Shares equal to such excess.

If more than one bid of any potential  holder is submitted in any auction,  each
bid  submitted in such  auction will be  considered a separate bid with the rate
per annum and number of Preferred Shares therein specified.

NOTIFICATION  OF RESULTS  AND  SETTLEMENT.  The  Auction  Agent will advise each
Broker-Dealer  who submitted a bid or sell order in an auction  whether such bid
or sell order was accepted or rejected in whole or in part and of the applicable
rate for the next dividend period for the related  Preferred Shares by telephone
or through the Auction Agent's auction  processing system at approximately  3:00
p.m.,  New York City  time,  on the  auction  date for such  auction.  Each such
Broker-Dealer  that  submitted an order for the account of a customer  then will
advise such  customer  whether  such bid or sell order was accepted or rejected,
will  confirm  purchases  and sales  with each  customer  purchasing  or selling
Preferred  Shares as a result  of the  auction  and will  advise  each  customer
purchasing or selling  Preferred Shares to give instructions to its Agent Member
of the Securities  Depository to pay the purchase price against delivery of such
shares or to deliver such shares against payment  therefor as appropriate.  If a
customer  selling  Preferred  Shares as a result of an auction fails to instruct
its Agent Member to deliver such shares,  the Broker-Dealer  that submitted such
customer's  bid or sell order will  instruct  such Agent  Member to deliver such
shares against payment therefor.  Each Broker-Dealer that submitted a hold order
in an auction on behalf of a customer  also will  advise  such  customer  of the
applicable  rate for the next  dividend  period for the  Preferred  Shares.  The
Auction Agent will record each  transfer of Preferred  Shares on the record book
of existing holders to be maintained by the Auction Agent.

In accordance with the Securities  Depository's  normal  procedures,  on the day
after each  auction  date,  the  transactions  described  above will be executed
through the  Securities  Depository,  and the accounts of the  respective  Agent
Members at the Securities  Depository  will be debited and credited as necessary
to effect the  purchases  and sales of Preferred  Shares as  determined  in such
auction.  Purchasers  will make payment  through their Agent Members in same-day
funds to the Securities Depository against delivery through their Agent Members;
the  Securities  Depository  will make  payment  in  accordance  with its normal
procedures,  which now provide for payment in same-day  funds. If the procedures
of the Securities  Depository applicable to Preferred Shares shall be changed to
provide for payment in next-day  funds,  then purchasers may be required to make
payment in next-day funds

If any existing holder selling  Preferred  Shares in an auction fails to deliver
such  Preferred  Shares,  the  Broker-Dealer  of any  person  that  was to  have
purchased  Preferred  Shares in such auction may deliver to such person a number
of whole Preferred  Shares that is less than the number of Preferred Shares that
otherwise  was to be  purchased  by such  person.  In such event,  the number of
Preferred  Shares to be so delivered  will be determined by such  Broker-Dealer.
Delivery  of such  lesser  number  of  Preferred  Shares  will  constitute  good
delivery.  Each Broker-Dealer  Agreement also will provide that neither the Fund
nor the Auction Agent will have  responsibility or liability with respect to the
failure of a beneficial  owner,  potential  beneficial owner or their respective
Agent  Members  to  deliver  Preferred  Shares  or to pay for  Preferred  Shares
purchased or sold pursuant to an auction or otherwise.

SECONDARY MARKET TRADING AND TRANSFERS OF PREFERRED SHARES.  The  Broker-Dealers
may maintain a secondary trading market in Preferred Shares outside of auctions,
but are not obligated to do so, and may  discontinue  such activity at any time.
There can be no assurance that any secondary  trading market in Preferred Shares
will provide owners with liquidity of investment.  The Preferred Shares will not
be registered on any stock exchange or on the Nasdaq National Market.  Investors
who  purchase  Preferred  Shares  in an  auction  (particularly  if the Fund has
declared a special  dividend  period) should note that because the dividend rate
on such shares will be fixed for the length of that dividend  period,  the value
of such shares may fluctuate in response to the changes in interest  rates,  and
may be more or less  than  their  original  cost if sold on the open  market  in
advance  of the  next  auction  thereof,  depending  on  market  conditions.  In
addition,  a Broker-Dealer may, in its own discretion,  decide to sell Preferred
Shares  in the  secondary  trading  market to  investors  at any time and at any
price,  including at prices  equivalent  to, below or above the par value of the
Preferred Shares.

A beneficial owner or an existing holder may sell, transfer or otherwise dispose
of Preferred Shares only in whole shares and only:

     o    pursuant  to a bid or sell  order  placed  with the  Auction  Agent in
          accordance with the Auction Procedures;

     o    to a Broker-Dealer; or

     o    to such  other  persons  as may be  permitted  by the Fund;  provided,
          however,  that a sale,  transfer  or other  disposition  of  Preferred
          Shares from a customer of a Broker-Dealer who is listed on the records
          of  that  Broker   Dealer  as  the  holder  of  such  shares  to  that
          Broker-Dealer or another customer of that  Broker-Dealer  shall not be
          deemed  to  be  a  sale,   transfer  or  other   disposition  if  such
          Broker-Dealer  remains the existing  holder of the shares;  and in the
          case  of  all  transfers   other  than   pursuant  to  auctions,   the
          Broker-Dealer (or other person, if permitted by the Fund) to whom such
          transfer is made will advise the Auction Agent of such transfer.

<PAGE>

                           FEDERAL INCOME TAX MATTERS

The  following  is a summary  discussion  of  certain  U.S.  federal  income tax
consequences  that may be relevant to a shareholder  of  acquiring,  holding and
disposing of Preferred  Shares of the Fund. This discussion  addresses only U.S.
federal income tax consequences to U.S.  shareholders  that hold their shares as
capital  assets  and  does  not  address  all of the  U.S.  federal  income  tax
consequences  that may be relevant to particular  shareholders in light of their
individual  circumstances.  This  discussion  also  does  not  address  the  tax
consequences  to  shareholders  who are  subject  to special  rules,  including,
without  limitation,  banks and  financial  institutions,  insurance  companies,
dealers in securities or foreign currencies, foreign shareholders,  shareholders
who hold their shares as or in a hedge  against  currency  risk, a  constructive
sale,  or  a  conversion  transaction,  shareholders  who  are  subject  to  the
alternative  minimum tax, or  tax-exempt or  tax-deferred  plans,  accounts,  or
entities.  In addition,  the discussion  does not address any state,  local,  or
foreign  tax  consequences,  and it  does  not  address  any  U.S.  federal  tax
consequences  other than U.S.  federal income tax  consequences.  The discussion
reflects  applicable  tax  laws  of the  United  States  as of the  date of this
prospectus,  which tax laws may be changed or subject to new  interpretations by
the courts,  Treasury or the Internal Revenue Service (the "IRS")  retroactively
or  prospectively.  No attempt is made to present a detailed  explanation of all
U.S. federal income tax concerns  affecting the Fund and its  shareholders,  and
the discussion  set forth herein does not  constitute tax advice.  Investors are
urged  to  consult  their  own  tax  advisers  to  determine  the  specific  tax
consequences to them of investing in the Fund, including the applicable federal,
state,  local and  foreign tax  consequences  to them and the effect of possible
changes in tax laws.

The Fund intends to elect to be treated and to qualify each year as a "regulated
investment company" under Subchapter M of the Code and to comply with applicable
distribution  requirements so that it generally will not pay U.S. federal income
tax on income and capital gains distributed to shareholders. In order to qualify
as a regulated investment company,  which qualification the following discussion
assumes, the Fund must satisfy certain tests regarding the sources of its income
and the  diversification  of its assets.  If the Fund  qualifies  as a regulated
investment   company  and,  for  each  taxable  year,  it   distributes  to  its
shareholders  an  amount  equal  to or  exceeding  the  sum  of  (i)  90% of its
"investment  company  taxable income" as that term is defined in the Code (which
includes, among other things, dividends, taxable interest, and the excess of any
net short-term  capital gains over net long-term  capital losses,  as reduced by
certain deductible  expenses) without regard to the deduction for dividends paid
and (ii)  90% of the  excess  of its  gross  tax-exempt  interest  over  certain
disallowed  deductions,  the Fund  generally  will be relieved  of U.S.  federal
income tax on any income of the Fund,  including  "net capital gain" (the excess
of net long term capital gain over net short-term capital loss),  distributed to
shareholders.  However,  if the Fund meets such  distribution  requirements  but
chooses to retain  some  portion of  investment  company  taxable  income or net
capital gain, it generally will be subject to U.S. federal income tax at regular
corporate rates on the amount retained.  The Fund intends to distribute at least
annually all or substantially all of its investment  company taxable income, net
tax exempt  interest and net capital  gain. If for any taxable year the Fund did
not  qualify  as a  regulated  investment  company,  it  would be  treated  as a
corporation  subject to U.S.  federal  income tax thereby  subjecting any income
earned  by the Fund to tax at the  corporate  level  and,  when  such  income is
distributed, to a further tax at the shareholder level.

Under the Code,  the Fund will be subject to a  nondeductible  4% federal excise
tax on a portion  of its  undistributed  ordinary  income and  capital  gain net
income if it fails to meet  certain  distribution  requirements  with respect to
each calendar  year. The Fund intends to make  distributions  in a timely manner
and  accordingly  does not expect to be subject to the excise tax, but there can
be no assurance that the Fund's  distributions  will be sufficient to avoid this
tax entirely.

Based in part on the lack of any  present  intention  on the part of the Fund to
redeem or purchase  the  Preferred  Shares at any time in the  future,  the Fund
intends to take the position that under  present law the  Preferred  Shares will
constitute  stock of the Fund and  distributions  with respect to the  Preferred
Shares (other than  distributions in redemption of the Preferred Shares that are
treated as exchanges under Section 302(b) of the Code) will constitute dividends
to the  extent of the Fund's  current or  accumulated  earnings  and  profits as
calculated for U.S.  federal income tax purposes.  This view relies in part on a
published ruling of the IRS stating that certain preferred stock similar in many
material  respects to the Preferred Shares  represents  equity.  It is possible,
however,  that the IRS might take a contrary  position  asserting,  for example,
that the  Preferred  Shares  constitute  debt of the Fund. If this position were
upheld, the discussion of the treatment of distributions  below would not apply.
Instead  distributions  by  the  Fund  to  holders  of  Preferred  Shares  would
constitute interest, whether or not such distributions exceeded the earnings and
profits of the Fund,  would be included in the income of the recipient and would
be taxed as ordinary income.

In general, assuming the Fund has sufficient current or accumulated earnings and
profits,  dividends  from  investment  company  taxable  income  are  taxable as
ordinary  income and  dividends  from net capital  gain that are  designated  as
capital gain dividends are taxable as long-term  capital gains for U.S.  federal
income tax purposes  without  regard to the length of time the  shareholder  has
held  shares of the Fund.  Since not all of the Fund's  income is  derived  from
interest,  some portion of its dividends  from its  investment  company  taxable
income  may  constitute  "qualified  dividend  income"  for  federal  income tax
purposes and thus may be eligible for the favorable  federal  long-term  capital
gain tax rates on qualified dividend income.  Capital gain dividends distributed
by the Fund to individual  shareholders  generally  will qualify for the maximum
15% U.S. federal income tax rate on long-term capital gains.  Under current law,
the maximum 15% U.S.  federal  income tax rate on long-term  capital  gains will
cease to apply to taxable years beginning after December 31, 2008.

<PAGE>

If a portion of the Fund's income consists of qualifying  dividends paid by U.S.
corporations  (other than REITs), a portion of the dividends paid by the Fund to
corporate  stockholders,  if properly  designated,  may qualify for the dividend
received  deduction or "DRD".  In addition,  for taxable  years  beginning on or
before December 31, 2008,  distributions of investment  income designated by the
Fund as derived  from  qualified  dividend  income will be taxed in the hands of
individuals at the rates applicable to long-term capital gain,  provided holding
period  and  other  requirements  are met by both the Fund and the  stockholder.
Specifically,  a dividend paid by the Fund to a stockholder  will not be treated
as qualified  dividend income of the stockholder (1) if the dividend is received
with respect to any share held for fewer than 61 days during the 121-day  period
beginning  on the date  which is 60 days  before  the date on which  such  share
becomes  ex-dividend  with respect to such dividend,  (2) to the extent that the
recipient is under an obligation (whether pursuant to a short sale or otherwise)
to make related payments with respect to positions in  substantially  similar or
related  property or (3) if the recipient elects to have the dividend treated as
investment  income for purposes of the limitation on deductibility of investment
interest. Qualified dividend income is, in general, dividend income from taxable
domestic  corporations  and  certain  "qualified  foreign  corporations"  (e.g.,
generally,  foreign  corporations  incorporated  in a  possession  of the United
States or in certain  countries with a qualifying  comprehensive tax treaty with
the United States, or the stock of which and with respect to which such dividend
is paid is readily  tradable on an established  securities  market in the United
States),  but does not include a foreign  corporation which for the taxable year
of the  corporation  in which the dividend was paid,  or the  preceding  taxable
year, is a "passive foreign  investment  company," as defined in the Code. There
can be no assurance of what portion, if any, of the Fund's distributions will be
entitled to the lower tax rates that apply to qualified dividend income.

Although  dividends  generally  will be treated as  distributed  when paid,  any
dividend  declared  by the  Fund as of a record  date in  October,  November  or
December and paid during the following  January will be treated for U.S. federal
income tax purposes as received by  shareholders  on December 31 of the calendar
year in which it is declared.

Distributions  by the Fund in  excess  of the  Fund's  current  and  accumulated
earnings  and  profits  will be  treated as a return of capital to the extent of
(and in  reduction  of) the  shareholder's  tax basis in its shares and any such
amount in excess of that  basis will be treated as gain from the sale of shares,
as discussed below. The U.S. federal income tax status of all distributions will
be reported to shareholders annually.

If the Fund  retains  any net  capital  gain for a  taxable  year,  the Fund may
designate  the retained  amount as  undistributed  capital  gains in a notice to
shareholders  who, if subject to U.S.  federal  income tax on long-term  capital
gains,  (i) will be  required to include in income for U.S.  federal  income tax
purposes,  as  long-term  capital  gain,  their  proportionate  shares  of  such
undistributed  amount,  and (ii) will be entitled to credit their  proportionate
shares of the tax paid by the Fund on the  undistributed  amount  against  their
U.S. federal income tax liabilities,  if any, and to claim refunds to the extent
the credit exceeds such liabilities.

The IRS has taken the position that if a regulated investment company has two or
more classes of shares,  it must designate  distributions  made to each class in
any year as  consisting  of no more than  such  class's  proportionate  share of
particular  types of income,  including  ordinary  income and capital  gains.  A
class's  proportionate  share  of a  particular  type of  income  is  determined
according to the percentage of total dividends paid by the regulated  investment
company to such class. Consequently,  if both common shares and Preferred Shares
are outstanding, the Fund intends to designate distributions made to the classes
of particular types of income in accordance with each such class's proportionate
share of such income.  The Fund will designate  dividends  qualifying as capital
gain  dividends  and other  taxable  dividends in a manner that  allocates  such
income  between the holders of common shares and Preferred  Shares in proportion
to the total  dividends paid to each class during the taxable year, or otherwise
as required by applicable law.

Sales and other  dispositions of the Fund's shares  generally are taxable events
for shareholders that are subject to tax.  Shareholders should consult their own
tax advisers  with  reference  to their  individual  circumstances  to determine
whether any particular transaction in the Fund's shares is properly treated as a
sale for tax  purposes  (including a redemption  of  Preferred  Shares),  as the
following  discussion  assumes,  and the tax  treatment  of any  gains or losses
recognized in such transactions. In general, if shares of the Fund are sold, the
shareholder  will  recognize  gain or loss equal to the  difference  between the
amount realized on the sale and the  shareholder's  adjusted basis in the shares
sold.  Such gain or loss  generally will be treated as long-term gain or loss if
the  shares  were held for more than one year and  otherwise  generally  will be
treated as short-term  gain or loss. Any loss  recognized by a shareholder  upon
the sale or other  disposition of shares with a tax holding period of six months
or less will be treated as a long-term capital loss to the extent of any amounts
treated as distributions of long-term capital gains with respect to such shares.
Losses on sales or other  dispositions  of shares may be disallowed  under "wash
sale"  rules  in the  event  substantially  identical  shares  of the  Fund  are
purchased  (including  those made pursuant to reinvestment  of dividends  and/or
capital gains distributions) within a period of 61 days beginning 30 days before
and ending 30 days after a sale or other disposition of shares.

If, in connection  with the selection of a long-term  dividend  period,  (i) the
Fund  provides  that a Premium Call Period will follow a Non-Call  Period,  (ii)
based on all the facts and  circumstances  at the time of the designation of the
long-term  dividend  period  the  Fund is more  likely  than not to  redeem  the
Preferred  Shares  during the Premium Call  Period,  and (iii) the premium to be
paid upon redemption during the Premium Call Period exceeds a reasonable penalty
for early redemption, it is possible that the holder of Preferred Shares will be
required  to accrue  such  premium  as a  dividend  (to the extent of the Fund's
earnings and profits) over the term of the Non-Call Period.

<PAGE>

The Fund is required in certain  circumstances  to backup withhold on reportable
payments,  including  dividends,  capital gains  distributions,  and proceeds of
sales or other  dispositions of the Fund's shares paid to certain holders of the
Fund's  shares who do not furnish the Fund with their  correct  Social  Security
number  or  other  taxpayer   identification   number  and  make  certain  other
certifications,  or who are  otherwise  subject  to backup  withholding.  Backup
withholding is not an additional tax. Any amounts withheld from payments made to
a  shareholder  may be refunded  or credited  against  such  shareholder's  U.S.
federal income tax liability,  if any, provided that the required information is
furnished to the IRS.

The foregoing is a general and abbreviated summary of the provisions of the Code
and the Treasury  regulations  currently in effect as they generally  affect the
taxation of the Fund and its shareholders.  As noted above, these provisions are
subject to change by legislative,  judicial or  administrative  action,  and any
such change may be retroactive.  A further discussion of the U.S. federal income
tax rules  applicable  to the Fund can be found in the  Statement of  Additional
Information   which  is   incorporated   by  reference  into  this   prospectus.
Shareholders  are  urged  to  consult  their  tax  advisers  regarding  specific
questions as to U.S. federal, foreign, state, and local income or other taxes.

As required by U.S. Treasury Regulations governing tax practice,  you are hereby
advised that any written tax advice contained herein was not written or intended
to be used (and  cannot be used) by any  taxpayer  for the  purpose of  avoiding
penalties that may be imposed under the Code.

The  advice  was  prepared  to  support  the   promotion  or  marketing  of  the
transactions or matters addressed by the written advice.

Any person  reviewing this discussion  should seek advice based on such person's
particular circumstances from an independent tax adviser.


                        DETERMINATION OF NET ASSET VALUE

The net asset value of common stock of the Fund is computed based upon the value
of the Fund's portfolio  securities and other assets. Net asset value per common
share of the Fund is determined as of the close of the regular  trading  session
on the  NYSE no less  frequently  than the last  business  day of each  week and
month, provided,  however, that if any such day is a holiday or determination of
net asset value on such day is impracticable,  the net asset value is calculated
on such earlier or later day as determined by the Advisers.  The Fund calculates
net  asset  value  per  common  share  of the  Fund by  subtracting  the  Fund's
liabilities (including accrued expenses, dividends payable and any borrowings of
the Fund) and the liquidation value of any outstanding  preferred stock from the
Fund's  total  assets (the value of the  securities  the Fund holds plus cash or
other assets,  including interest accrued but not yet received) and dividing the
result by the total number of common shares of the Fund outstanding.

The Fund values its  holdings  by using  market  quotations  provided by pricing
services,  prices  provided  by market  makers  or  estimates  of market  values
obtained from yield data  relating to  instruments  or  securities  with similar
characteristics  in  accordance  with  procedures   established  by  the  Board.
Short-term  securities  having  a  maturity  of 60 days or less  are  valued  at
amortized cost, which approximates  market value. Any securities or other assets
for which  current  market  quotations  are not readily  available are valued at
their fair value as determined in good faith under procedures established by and
under the general supervision and responsibility of the Board.


                  CAPITALIZATION OF THE FUND AND OTHER MATTERS

REPURCHASE OF COMMON SHARES.  Shares of closed-end  investment  companies  often
trade at a discount to their net asset values, and the Fund's common shares have
in the past and may in the future  trade at a discount to their net asset value.
The market price of the Fund's  common  shares is  determined by such factors as
relative  demand for and supply of such common shares in the market,  the Fund's
net asset value, general market and economic conditions and other factors beyond
the control of the Fund. Although the Fund's common shareholders do not have the
right to  require  the Fund to redeem  their  common  shares,  the Fund may take
action,  from time to time,  to  repurchase  common shares in the open market or
make tender offers for its common shares at their net asset value. This may, but
will not  necessarily,  have the effect of reducing any market discount from net
asset value.

The  acquisition  of common shares by the Fund will decrease the total assets of
the Fund and, therefore,  have the effect of increasing the Fund's expense ratio
and may  adversely  affect the  ability of the Fund to  achieve  its  investment
objectives.  Furthermore,  the  acquisition  of  common  shares  by the Fund may
require the Fund to redeem the  Preferred  Shares in order to  maintain  certain
asset  coverage  requirements.  To the  extent  the Fund  may need to  liquidate
investments to fund  repurchase of common  shares,  this may result in portfolio
turnover  which will result in additional  expenses being borne by the Fund. The
Board  currently  considers the following  factors to be relevant to a potential
decision to repurchase  common shares:  the extent and duration of the discount,
the liquidity of the Fund's  portfolio,  the impact of any action on the Fund or
its  stockholders  and market  considerations.  Any share  repurchases or tender
offers will be made in accordance with the  requirements of the Exchange Act and
the 1940 Act. See "U.S. Federal Taxation" for a description of the potential tax
consequences of a repurchase of common shares. See "Repurchase of Shares" in the
Statement of Additional Information.

<PAGE>

CAPITALIZATION.  The Charter  authorizes the issuance of  250,000,000  shares of
common stock, par value $0.01 per share. In 2002, Fund shareholders  approved an
amendment to the Fund's charter which authorizes the Board,  without shareholder
approval, to increase the Fund's authorized capital. Pursuant to such amendment,
and in connection with a rights offering in 2002, the Board resolved to increase
the authorized capital of the Fund to its current level.

RIGHTS WITH REGARD TO DIVIDENDS, VOTING AND LIQUIDATION.  When issued, shares of
common  stock are fully  paid and  non-assessable.  The  Fund's  shares  have no
preemptive,  conversion,  exchange or  redemption  rights.  Each share of common
stock has one vote and shares equally in dividends and distributions when and if
declared by the Fund and in the Fund's net assets upon  liquidation.  All voting
rights for the  election of  directors  are  non-cumulative.  Consequently,  the
holders  of more than 50% of the shares  can elect  100% of the  directors  then
nominated  for election if they choose to do so (subject to the right of holders
of preferred  shares to elect  directors) and, in such event, the holders of the
remaining common shares will not be able to elect any directors.

COMMON STOCK. Although the Fund conducted a rights offerings in 2002, and may do
so again in the  future,  the Fund has no  present  intention  of  offering  any
additional  shares of capital  stock other than the Preferred  Shares  described
herein.  Any  additional  offerings of shares of capital  stock,  if made,  will
require approval by the Board. Any additional  offering of common shares will be
subject to the requirements of the 1940 Act that common shares may not be issued
at a price below the then  current net asset value  (exclusive  of  underwriting
discounts and  commissions)  except in  connection  with an offering to existing
stockholders   or  with  the  consent  of  a  majority  of  the  Fund's   common
shareholders.

The Fund's  common stock traded on the NYSE from January 1974 to April 29, 2002,
under the symbol "UIF". From April 30, 2002 to the present, the common stock has
traded  on the NYSE  under  the  symbol  "BIF".  On July __,  2005,  there  were
11,327,784  shares of common stock issued and  outstanding,  the net asset value
per common  share was $____ and the closing  price per common  share on the NYSE
was $_____.

PREFERRED  STOCK.  Under the Charter,  the Board is  authorized  to classify and
reclassify any unissued shares of the Fund's common stock as part of an issuance
of  preferred  stock.  The  Board  is  also  authorized  to  set or  change  the
preferences,   conversion  or  other  rights,   voting   powers,   restrictions,
limitations as to dividends, qualifications or terms or conditions of redemption
of such  shares of stock.  Under the 1940  Act,  the Fund is  permitted  to have
outstanding more than one series of preferred shares so long as no single series
has a priority over another series as to the  distribution of assets of the Fund
or the payment of dividends.  Holders of common shares and outstanding preferred
shares of the Fund have no  preemptive  right to purchase any  preferred  shares
that might be  issued.  On July __,  2005,  the Board  classified  10,000 of its
unissued shares of common stock as preferred stock.

ANTI-TAKEOVER   PROVISIONS  OF  THE  CHARTER  AND  BY-LAWS.   At  a  meeting  of
shareholders held in May 2004,  shareholders  approved a comprehensive  range of
corporate   governance   proposals  which  abolished  or  changed  a  number  of
anti-takeover  provisions previously adopted by the Fund. These included,  among
others,  proposals  to (i)  declassify  the  Board,  (ii) elect  directors  by a
plurality of votes cast, (iii) permit  shareholders to effect By-law amendments,
(iv) set the number of directors at exactly five, and (v) prohibit the Fund from
opting  into the  Maryland  Unsolicited  Takeovers  Act.  Nonetheless,  the Fund
presently  has  provisions  in its Charter and By-Laws  which may still have the
effect of limiting the ability of other  entities or persons to acquire  control
of the Fund,  to cause it to engage in  certain  transactions  or to modify  its
structure (commonly referred to as "anti-takeover" provisions):

          (1)  The Charter  requires the affirmative vote of at least two-thirds
               of the votes  entitled  to be cast by holders of common  stock to
               approve,  adopt or authorize  (a) certain  business  combinations
               (e.g.,  merger,  consolidation  or liquidation,  or sale,  lease,
               exchange,  mortgage, pledge, transfer or other disposition of the
               Fund's assets, etc.); (b) voluntary liquidation or dissolution of
               the  Fund;  (c)  shareholder   proposals   regarding   investment
               decisions;  (d)  conversion  from  a  closed-end  to an  open-end
               investment  company;  or (e) a self-tender for, or acquisition by
               the Fund of,  more than 25% of the Fund's  outstanding  shares of
               stock, during any twelve-month period.

          (2)  The Fund's By-laws  contain  provisions the effect of which is to
               prevent matters,  including nominations of Directors,  from being
               considered  at  shareholders'  meetings  where  the  Fund has not
               received sufficient prior notice of the matters.

The percentage of votes required under these provisions,  which are greater than
the  minimum  requirements  under  Maryland  law or the 1940  Act,  make it more
difficult to effect a change in the Fund's business or management and could have
the effect of  depriving  holders  of common  shares of an  opportunity  to sell
shares at a premium over prevailing  market prices by discouraging a third party
from  seeking  to  obtain  control  of the  Fund in a tender  offer  or  similar
transaction.  The Board, however, has considered these anti-takeover  provisions
and believes that they are in the best interests of shareholders.

INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING  FIRM.  The  data in the  "Financial
Highlights"  section of this prospectus are based upon financial  statements for
the 6 months  ending May 31,  2005,  that have not been  audited  and  financial
statements  for the year ending  November  30,  2004,  that have been audited by
________,  the Fund's independent  registered public accounting firm, located at
________________,  as indicated in their reports with respect  thereto,  and are
incorporated  by reference  herein in reliance on their  reports  given on their
authority as experts in auditing and accounting.

<PAGE>

VALIDITY OF SHARES.  Certain  legal  matters in  connection  with the  Preferred
Shares will be passed on by Paul, Hastings,  Janofsky & Walker LLP, Los Angeles,
California,  counsel to the Fund in connection  with the  Offering,  and Venable
LLP.  Certain  matters  have been passed upon for the  Underwriters  by Clifford
Chance  US LLP,  New  York,  New  York.  Clifford  Chance US LLP may rely on the
opinion of Venable LLP as to certain matters of Maryland law.

REPORTS TO SHAREHOLDERS. The Fund sends unaudited semiannual reports and audited
annual reports, including lists of investments held, to shareholders.

AVAILABLE INFORMATION.  The Fund is subject to the informational requirements of
the  Exchange  Act and the 1940 Act and in  accordance  therewith is required to
file reports,  proxy  statements and other  information  with the Securities and
Exchange  Commission.  Any such reports,  proxy statements and other information
can  be  inspected  and  copied  at  the  public  reference  facilities  of  the
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, the
Commission's New York Regional Office at 233 Broadway,  New York, New York 10279
and its Chicago Regional Office at Suite 1400,  Northwestern  Atrium Center, 500
West Madison Street,  Chicago,  Illinois 60661.  Reports,  proxy  statements and
other  information  concerning  the Fund can also be inspected at the offices of
the NYSE, 20 Broad Street, New York, New York 10005.

Additional  information  regarding the Fund and the Offering is contained in the
Registration Statement on Form N-2, including amendments, exhibits and schedules
thereto,  relating to the Preferred Shares filed by the Fund with the Securities
and Exchange Commission. This prospectus does not contain all of the information
set forth in the Registration Statement, including any amendments,  exhibits and
schedules  thereto.  For further  information  with  respect to the Fund and the
shares  offered  hereby,  reference  is  made  to  the  Registration  Statement.
Statements  contained in this  Prospectus  as to the contents of any contract or
other  document  referred to are not  necessarily  complete and in each instance
reference  is made to the copy of such  contract or other  document  filed as an
exhibit to the  Registration  Statement,  each such statement being qualified in
all respects by such reference.

A copy of the  Registration  Statement  may be inspected  without  charge at the
Securities and Exchange Commission's  principal office in Washington,  D.C., and
copies of all or any part thereof may be obtained from the  Commission  upon the
payment of certain fees prescribed by the Commission. The Commission maintains a
website  (http://www.sec.gov)  that contains the Registration  Statement,  other
documents  incorporated by reference,  and other  information the Fund has filed
electronically with the Commission, including proxy statements and reports filed
under the Exchange Act.


                                  UNDERWRITING

Subject to the terms and conditions stated in the purchase  agreement dated July
__, 2005 (the "Purchase  Agreement"),  each  Underwriter  named below, for which
[Lead  Underwriter]  is  acting  as  representative,  has  severally  agreed  to
purchase,  and the Fund has  agreed to sell to such  Underwriter,  the number of
Preferred Shares set forth opposite the name of such Underwriter.

        Underwriter                             Number of Preferred
                                                Shares
        [Lead Underwriter - Full Name]


        Total

The Purchase  Agreement  provides that the  obligations of the  Underwriters  to
purchase  the shares  included in this  offering  are subject to the approval of
certain  legal  matters by counsel and to certain  other  conditions,  including
without  limitation  the  receipt  by  the  Underwriters  of  customary  closing
certificates,  opinions and other documents,  and the receipt by the Fund of Aaa
and AAA ratings on the Preferred Shares by Moody's and Fitch,  respectively,  as
of the time of the offering.  The Underwriters are obligated to purchase all the
Preferred Shares if they purchase any of the Preferred  Shares.  In the Purchase
Agreement,  the Fund and  Advisers  have agreed to  indemnify  the  Underwriters
against certain liabilities,  including liabilities arising under the Securities
Act, or to contribute  payments the Underwriters may be required to make for any
of those liabilities

The  Underwriters  propose  to  initially  offer  some of the  Preferred  Shares
directly to the public at the public  offering price set forth on the cover page
of this  prospectus and some of the Preferred  Shares to certain  dealers at the
public offering price less a concession not in excess of $_______ per share. The
sales load the Fund will pay of $[250]  per share is equal to 1% of the  initial
offering price of the Preferred Shares. After the Offering, the Underwriters may
change the public offering price and the concession.  Investors must pay for any
Preferred Shares purchased in the Offering on or before July ___, 2005.

<PAGE>

The Fund  anticipates that the Underwriters may from time to time act as brokers
or dealers in executing the Fund's portfolio transactions after they have ceased
to be Underwriters. The Underwriters are active underwriters of, and dealers in,
securities  and  act as  market  makers  in a  number  of such  securities,  and
therefore can be expected to engage in portfolio  transactions with, and perform
services for, the Fund.

The  Underwriters  have  advised the Fund that certain of the  Underwriters  and
various other  broker-dealers  and other firms that  participate  in the auction
rate  securities  market  received  letters from the staff of the Securities and
Exchange  Commission in the spring of 2004.  The letters  requested that each of
those  firms  voluntarily  conduct an  investigation  regarding  its  respective
practices and  procedures in that market.  Pursuant to these  requests,  each of
those Underwriters  conducted its own voluntary review and reported its findings
to the Securities and Exchange  Commission staff. At the staff's request,  those
Underwriters  are engaging in discussions with the staff concerning its inquiry.
Neither those  Underwriters nor the Fund can predict the ultimate outcome of the
inquiry or how that outcome will affect the market for the  Preferred  Shares or
the auctions.

The Fund anticipates  that the Underwriters or their respective  affiliates may,
from time to time,  act in auctions as  Broker-Dealers  and receive  fees as set
forth under "The Auction" and in the Statement of Additional Information.

The principal business address of [Lead Underwriter] is __________________.

In connection  with this offering,  certain of the  Underwriters  or dealers may
distribute prospectuses electronically.

The  settlement  date  for  the  purchase  of  the  Preferred   Shares  will  be
____________,  2005,  as  agreed  upon by the  Underwriters,  the  Fund  and the
Advisers  pursuant to Rule 15c6-1 under the Securities  Exchange Act of 1934, as
amended (the "Exchange Act").


          TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

THE FUND

USE OF PROCEEDS

INVESTMENT OBJECTIVE AND POLICIES

INVESTMENT POLICIES AND RESTRICTIONS

INVESTMENT POLICIES AND TECHNIQUES

MANAGEMENT OF THE FUND

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS OWNERSHIP OF THE FUND BY

DIRECTORS DIRECTOR AND OFFICER COMPENSATION COMMITTEES OF THE BOARD OF DIRECTORS

INVESTMENT ADVISERS AND OTHER SERVICE PROVIDERS COMPENSATION TO THE ADVISERS AND
ADMINISTRATORS

FACTORS  CONSIDERED BY THE  INDEPENDENT  DIRECTORS IN APPROVING  THE  INVESTMENT
ADVISORY AGREEMENTS

DURATION AND TERMINATION

POTENTIAL CONFLICTS OF INTEREST

PROXY VOTING

CODE OF ETHICS

PORTFOLIO TRANSACTIONS, BROKERAGE ALLOCATION AND OTHER PRACTICES

ADDITIONAL INFORMATION CONCERNING THE AUCTIONS FOR PREFERRED SHARES

RATING AGENCY GUIDELINES

REPURCHASE OF SHARES

FEDERAL INCOME TAX MATTERS.

PERFORMANCE-RELATED, COMPARATIVE AND OTHER INFORMATION

FINANCIAL STATEMENTS

ADDITIONAL INFORMATION

Appendix A - Description of Ratings

Appendix B - Proxy Voting Policies and Procedures

Appendix C - Articles  Supplementary  Creating  and Fixing the Rights of Auction
Preferred Stock

Appendix D - Settlement Procedures


<PAGE>


                                   $25,000,000
                       BOULDER GROWTH & INCOME FUND, INC.
                         Auction Market Preferred Shares

                                  1,000 Shares

                    Liquidation Preference $25,000 Per Share

                                  July __, 2005
<PAGE>


                    SUBJECT TO COMPLETION, DATED JULY 8, 2005


                       BOULDER GROWTH & INCOME FUND, INC.

                       STATEMENT OF ADDITIONAL INFORMATION

Boulder Growth & Income Fund, Inc. (the "Fund") is a closed-end, non-diversified
management investment company. This Statement of Additional Information does not
constitute a prospectus,  but should be read in conjunction  with the prospectus
relating  hereto  dated July __,  2005 (the  "Prospectus").  This  Statement  of
Additional  Information  does not include  all  information  that a  prospective
investor should consider before  participating  in the auction market  preferred
shares  ("Preferred   Shares")  offering  (the  "Offering")   described  in  the
Prospectus  or  otherwise  purchasing  the Fund's  common  stock.  A copy of the
Prospectus may be obtained without charge by calling the Fund's co-administrator
(Fund  Administrative  Services,  LLC) at (800)-________.  You may also obtain a
copy of the  Prospectus  on the  Securities  and Exchange  Commission's  website
(http://www.sec.gov).  Capitalized  terms used but not defined in this Statement
of Additional Information have the meanings given to them in the Prospectus.

THE INFORMATION IN THIS STATEMENT OF ADDITIONAL  INFORMATION IS NOT COMPLETE AND
MAY BE  CHANGED.  WE MAY  NOT  SELL  THESE  SECURITIES  UNTIL  THE  REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE  COMMISSION IS EFFECTIVE.  THIS
STATEMENT OF ADDITIONAL INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND
IS NOT SOLICITING AN OFFER TO BUY THESE  SECURITIES IN ANY STATE WHERE THE OFFER
OR SALE IS NOT PERMITTED.

This Statement of Additional Information is dated July 8, 2005.


<TABLE>
<CAPTION>
                                TABLE OF CONTENTS
<S>                                                                                                                      <C>
THE FUND                                                                                                                 2

USE OF PROCEEDS                                                                                                          2

INVESTMENT OBJECTIVE AND POLICIES                                                                                        2

INVESTMENT POLICIES AND RESTRICTIONS                                                                                     2

INVESTMENT POLICIES AND TECHNIQUES                                                                                       3

MANAGEMENT OF THE FUND                                                                                                   9

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                                                                          9

OWNERSHIP OF THE FUND BY DIRECTORS                                                                                       9

DIRECTOR AND OFFICER COMPENSATION                                                                                        10

COMMITTEES OF THE BOARD OF DIRECTORS                                                                                     11

INVESTMENT ADVISERS AND OTHER SERVICE PROVIDERS                                                                          12

COMPENSATION TO THE ADVISERS AND ADMINISTRATORS                                                                          13

FACTORS CONSIDERED BY THE INDEPENDENT DIRECTORS IN APPROVING THE INVESTMENT ADVISORY AGREEMENTS                          14

DURATION AND TERMINATION                                                                                                 16

POTENTIAL CONFLICTS OF INTEREST                                                                                          16

PROXY VOTING                                                                                                             17

CODE OF ETHICS                                                                                                           17

PORTFOLIO TRANSACTIONS, BROKERAGE ALLOCATION AND OTHER PRACTICES                                                         17

ADDITIONAL INFORMATION CONCERNING THE AUCTIONS FOR PREFERRED SHARES                                                      18

RATING AGENCY GUIDELINES                                                                                                 19

REPURCHASE OF SHARES                                                                                                     20

FEDERAL INCOME TAX MATTERS                                                                                               21

PERFORMANCE-RELATED, COMPARATIVE AND OTHER INFORMATION                                                                   25

FINANCIAL STATEMENTS                                                                                                     26

ADDITIONAL INFORMATION                                                                                                   26

Appendix A - Description of Ratings
Appendix B - Proxy Voting Policies and Procedures
Appendix C - Articles Supplementary Creating and Fixing the Rights of Auction Preferred Stock
Appendix D - Settlement Procedures
</TABLE>

<PAGE>

                                    THE FUND

From its  inception in 1972 until 2002,  the Fund was called USLIFE Income Fund,
Inc. (the  "Predecessor  Fund").  The Predecessor Fund was managed to provide "a
high level of current  income," was virtually  100% invested in corporate  bonds
and was  classified as a diversified  fund under the  Investment  Company Act of
1940,  as amended (the "1940  Act").  At a special  shareholder  meeting held in
April 2002, shareholders approved a change in the Fund's name, in the investment
objective to "total return" and in the Fund's classification from diversified to
non-diversified,  and  eliminated or changed  certain of the Fund's  fundamental
investment   policies.   See  "Fundamental   Policies"  below.  After  the  Fund
implemented these changes,  the Fund's advisers liquidated a substantial portion
of the Fund's bond  portfolio.  As of June 30, 2005,  none of the Fund's  assets
were invested in bonds.


                                 USE OF PROCEEDS

The  majority of the net  proceeds of the  Offering  will be used to pay off $20
million  drawn from a line of credit the Fund  currently  uses as leverage.  The
balance  of the  proceeds  will  be  invested  in  accordance  with  the  Fund's
investment  objective and policies as soon as practicable.  The Fund anticipates
that it will be able to invest  substantially  all of such net  proceeds  within
approximately  three  months after  completion  of this  offering.  Pending such
investment,  the net proceeds may be invested in U.S.  government  securities or
high grade, short-term money market instruments. If necessary, the Fund may also
purchase, as temporary investments,  securities of other open-end and closed-end
investment companies that invest in equity and fixed-income securities.


                        INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment  objective is total return. The Fund seeks to produce both
income and long-term capital  appreciation by investing in a portfolio of equity
and debt  securities.  The Fund invests  primarily in common  stocks,  including
dividend  paying  common  stocks such as those  issued by  utilities,  REITs and
closed-end  RICs. The Fund also invests in fixed income  securities such as U.S.
government securities, preferred stocks and bonds. The Fund invests primarily in
securities  of U.S.-based  companies  and to a lesser  extent in foreign  equity
securities  and  sovereign  debt,  in each  case  denominated  in the  sovereign
currency.  The Fund has no  restrictions  on its  ability  to invest in  foreign
securities.  The Fund is  concentrated  in REITs which means it must invest more
than 25% of its total assets in REITs and companies in the real estate industry.
No assurance can be given that the Fund will achieve its investment objective.

The Fund is a "non-diversified"  investment company, as defined in the 1940 Act,
which means that it is permitted  to invest its assets in a more limited  number
of issuers than "diversified"  investment  companies.  A diversified company may
not, with respect to 75% of its total  assets,  invest more than 5% of its total
assets in the  securities of any one issuer and may not own more than 10% of the
outstanding  voting  securities  of any one  issuer.  However,  pursuant  to the
requirements  of  Subchapter M of the Internal  Revenue Code of 1986, as amended
(the  "Code"),  (A) not more than 25% of the Fund's total assets may be invested
in securities of any one issuer (other than U.S. government securities and RICs)
or of any two or more issuers  controlled  by the Fund which may be deemed to be
engaged  in the same,  similar  or related  trades or  businesses,  and (B) with
respect  to 50% of the total  value of the Fund's  portfolio,  (i) the Fund must
limit to 5% the  portion of its assets  invested in the  securities  of a single
issuer (other than U.S.  government  securities and RICs), and (ii) the Fund may
not own more than 10% of the  outstanding  voting  securities  of any one issuer
(other  than  U.S.  government   securities  and  RICs).  The  Fund  intends  to
concentrate  its common  stock  investments  in a few  issuers and to take large
positions in those issuers, consistent with being a "non-diversified" fund. As a
result,  the Fund may be  subject to a greater  risk of loss than a  diversified
fund or a fund that has diversified its investments more broadly.  Taking larger
positions  is also likely to  increase  the  volatility  of the Fund's net asset
value, reflecting fluctuations in the value of large Fund holdings.

Under normal market  conditions,  the Fund intends to invest at least 80% of its
net assets in common stocks,  primarily  domestic common stocks, and secondarily
in foreign common stocks denominated in foreign currencies.


                      INVESTMENT POLICIES AND RESTRICTIONS

INDUSTRY  CONCENTRATION  POLICY. As a matter of investment  policy,  the Fund is
concentrated  in REITs,  which means it must,  under normal  market  conditions,
invest  more than 25% of its  total  assets  in REITs or  companies  in the real
estate industry (the "Concentration  Policy").  The Fund must obtain shareholder
approval prior to changing this policy,  thus limiting the Fund's flexibility to
liquidate REITs in the future should market conditions warrant.

<PAGE>

FUNDAMENTAL POLICIES. A number of the Fund's investment policies,  listed below,
are "fundamental"  policies (the "Fundamental  Policies"),  which means that the
policies may not be changed without the approval of the holders of a majority of
the Fund's  outstanding  voting securities (which for this purpose and under the
1940 Act means the lesser of (i) 67% of the shares  represented  at a meeting at
which more than 50% of the outstanding  shares are represented or (ii) more than
50% of the outstanding shares). The Fund may not:

     1.   Issue any senior securities except as permitted under the 1940 Act.

     2.   Invest in the  securities  of  companies  conducting  their  principal
          business  activity in the same  industry  if,  immediately  after such
          investment, the value of its investments in such industry would exceed
          25% of the value of its total assets;  provided  that this  limitation
          will not apply to REITs or related  companies in the same  industry as
          REITs.

     3.   Participate  on a joint or a joint and  several  basis in any  trading
          account  in  securities,  except  that the  Fund  may,  to the  extent
          permitted by rules,  regulations or orders of the SEC,  combine orders
          with  others for the  purchases  and sales of  securities  in order to
          achieve the best overall execution.

     4.   Purchase or sell interests in oil, gas or other mineral exploration or
          development programs.

     5.   Purchase or sell real  estate,  except  that the Fund may  purchase or
          sell REITs and securities  secured by real estate or interests therein
          issued by companies owning real estate or interests therein.

     6.   Purchase or sell commodities or commodity contracts.

     7.   Make loans other than  through  the  purchase  of debt  securities  in
          private  placements  and  the  loaning  of  portfolio   securities  as
          described under "Investment Objective and Policies".

     8.   Borrow money in an amount  exceeding the maximum  permitted  under the
          1940 Act.

     9.   Underwrite  securities of other  issuers,  except insofar as it may be
          deemed to be an underwriter in selling a portfolio  security which may
          require registration under the Securities Act of 1933.

     10.  Invest  more than 30% of the value of its total  assets in  securities
          which have been acquired through private placements.

     11.  Purchase or retain the  securities  of any  issuer,  if, to the Fund's
          knowledge,  those officers and directors of the Fund or its investment
          adviser who individually  own beneficially  more than 1/2 of 1% of the
          outstanding securities of such issuer,  together own beneficially more
          than 5% of such outstanding securities.

     12.  Pledge,  mortgage or hypothecate  its assets except in connection with
          permitted borrowing and to the extent related to transactions in which
          the Fund is authorized to engage.

With the exception of the Fund's  investment  objective  (i.e.,  total  return),
Concentration Policy and Fundamental Policies,  all other policies,  statements,
objectives, terms and conditions may be changed by the Fund's Board of Directors
(the "Board") without shareholder approval.


                       INVESTMENT POLICIES AND TECHNIQUES

The following  information  supplements the discussion of the Fund's  investment
objective, policies and techniques that are described in the Prospectus.

PORTFOLIO  INVESTMENTS.  Under  normal  market  conditions,  the Fund intends to
invest at least  80% of its net  assets in  common  stocks,  primarily  domestic
common stocks,  and secondarily in foreign common stocks  denominated in foreign
currencies.  Common stocks include dividend-paying stocks of RICs and REITs. The
portion  of the  Fund's  assets  that is not  invested  in common  stocks may be
invested in fixed  income  securities,  cash  equivalents  and  income-producing
common stocks.  The term  "income-producing  common stocks"  includes RICs whose
objective is income, REITs, and other  dividend-paying  common stocks, while the
term "fixed income  securities"  includes  bonds,  U.S.  government  securities,
notes, bills, debentures,  preferred stocks,  convertible securities,  bank debt
obligations, repurchase agreements and short-term money market obligations.

     COMMON  STOCKS.  The Fund may  invest  all or any  portion of its assets in
common stock.  Common stock is defined as shares of a  corporation  that entitle
the  holder  to a pro rata  share of the  profits  of the  corporation,  if any,
without  preference  over  any  other  shareholder  or  class  of  shareholders,
including holders of the corporation's  preferred stock and other senior equity.
Common  stock  usually  carries  with it the  right  to vote and  frequently  an
exclusive  right to do so.  Holders  of  common  stock  also  have the  right to
participate in the assets of the corporation after all other claims are paid.

<PAGE>

In selecting  common stocks for investment,  the Fund expects to focus primarily
on U.S.-based companies and secondarily on the common stock of foreign companies
denominated  in foreign  currencies.  The Fund is  permitted  to invest  without
limitation in companies outside the U.S.  Generally,  target companies will have
consistent  high returns on equity,  while using modest amounts of debt relative
to their  industries.  The Fund seeks investments in businesses which the Fund's
investment advisers,  Boulder Investment Advisers,  LLC ("BIA") and Stewart West
Indies  Trading  Company,   Ltd.  d/b/a  Stewart  Investment   Advisers  ("SIA")
(collectively  the "Advisers"),  understand,  which have fairly  predictable and
improving future earnings, and most importantly,  are priced reasonably relative
to the businesses'  earnings and anticipated  growth in earnings.  The Fund will
not necessarily  focus its investments in "large-cap",  "mid-cap" or "small-cap"
companies  since  the  Advisers  believe  it  would be  unwise  to  impose  such
investment limitations.  Investments in small or middle capitalization companies
involve  greater  risk  than  is  customarily   associated  with  larger,   more
established  companies due to the greater business risks of small size,  limited
markets and financial  resources,  narrow product lines and the frequent lack of
depth of management. The securities of small or medium-sized companies are often
traded over-the-counter,  and may not be traded in volumes typical of securities
traded on a  national  securities  exchange.  Consequently,  the  securities  of
smaller  companies may have limited market  stability and may be subject to more
abrupt or erratic market  movements than securities of larger,  more established
companies or the market averages in general.

When the Fund makes an  investment  in a common  stock,  it will  likely  make a
significant  investment  and typically hold it for a long period of time. In the
long run,  the Fund  believes  that  value  investing  produces  superior  total
returns.  However,  value stocks can remain undervalued for long periods of time
and may never reach what the Advisers  believe are their full intrinsic  values,
or, as with any  security may decline in value.  In  addition,  value stocks may
fall out of favor with  investors  and may  under-perform  growth  stocks during
given periods.

     REAL ESTATE INVESTMENT  TRUSTS. As a matter of investment  policy, the Fund
is concentrated in REITs,  which means it will, under normal market  conditions,
invest  more than 25% of its  total  assets  in REITs or  companies  in the real
estate  industry.  The Fund must obtain  shareholder  approval prior to changing
this policy. REITs are trusts that invest primarily in commercial real estate or
real  estate-related  loans.  A REIT is not taxed on income  distributed  to its
shareholders  or  unit-holders  if  it  complies  with  regulatory  requirements
relating  to  its  organization,  ownership,  assets  and  income,  and  with  a
regulatory requirement that it distribute to its shareholders or unit-holders at
least 90% of its taxable income for each taxable year.  Generally,  REITs can be
classified as equity REITs, mortgage REITs and hybrid REITs. Equity REITs invest
the majority of their assets  directly in real  property and derive their income
primarily  from rents and  capital  gains  from  appreciation  realized  through
property  sales.  Mortgage  REITs  invest the  majority of their  assets in real
estate  mortgages  and derive their income  primarily  from  interest  payments.
Hybrid REITs combine the  characteristics  of both equity and mortgage REITs. By
investing in REITs indirectly through the Fund,  shareholders will bear not only
the  proportionate  share of the  expenses  of the Fund,  but also,  indirectly,
similar  expenses of underlying  REITs.  The Fund invests in REITs primarily for
income.

The Fund may be subject to certain risks associated with the direct  investments
of the REITs.  REITs may be affected by changes in their  underlying  properties
and by defaults by borrowers or tenants.  Mortgage  REITs may be affected by the
quality of the credit extended.  Furthermore, REITs are dependent on specialized
management  skills.  Some  REITs  may have  limited  diversification  and may be
subject to risks  inherent in financing a limited  number of  properties.  REITs
depend generally on their ability to generate cash flow to make distributions to
shareholders or unit-holders, and may be subject to defaults by borrowers and to
self-liquidations. In addition, a REIT may be affected by its failure to qualify
for  tax-free  pass-through  of income under the Code or its failure to maintain
exemption from registration under the 1940 Act.

     REGISTERED INVESTMENT COMPANIES.  The Fund is permitted to invest up to 10%
of its assets in other registered  investment  companies under the 1940 Act. The
common  stock of  closed-end  RICs can trade at a  substantial  discount  to the
underlying  net asset  value of the RIC,  and the Fund  may,  from time to time,
invest in common  stocks  issued by RICs when they are trading at  discounts  or
when the Advisers otherwise deem market conditions appropriate. The Fund intends
to normally invest in RICs that pay dividends.  RICs that pay regular  dividends
typically  own interest  rate  sensitive  securities,  which tend to increase in
value when interest  rates  decline,  and decrease in value when interest  rates
increase.  To the extent that the Fund invests in RICs, the Fund's  shareholders
will incur expenses with respect to both the Fund and that portion of the Fund's
assets invested in other RICs.  However, as common stocks of closed-end RICs can
trade at  substantial  discounts  to their  underlying  net  asset  values,  the
Advisers may deem the "double"  expense to have minimal  impact when compared to
the  discount  at which the Fund may buy their  shares.  The net asset value and
market value of common stock issued by RICs will fluctuate with the value of the
underlying  assets. The Fund may invest in the auction market preferred stock of
other closed-end funds primarily as a means of investing the Fund's cash for the
short-term in higher  yielding  alternatives  to  repurchase  agreements or U.S.
treasury securities. The Fund will consider investing cash in these instruments,
and other  short-term money market type  alternatives,  when the yield spread is
adequately attractive over repurchase  agreements and U.S. treasuries.  The Fund
generally  will  invest in auction  market  preferred  stocks that are rated AAA
although it may invest in lower rated securities from time to time.

<PAGE>

     BONDS.  Prior to April 26, 2002,  the Fund was called  USLIFE  Income Fund,
Inc. and was virtually 100% invested in corporate bonds.  Since the Fund changed
its investment  objective on April 26, 2002, the Advisers have liquidated all of
the Fund's bond  portfolio.  As of June 30, 2005, none of the Fund's assets were
invested in bonds.

Bonds,  or fixed  income  securities,  are debt  obligations  issued by the U.S.
government and its agencies,  corporations,  municipalities and other borrowers.
The  market  values of fixed  income  investments  will  change in  response  to
interest  rate changes and other  factors.  During  periods of falling  interest
rates,  the  values of  outstanding  fixed  income  securities  generally  rise.
Conversely,  during  periods  of  rising  interest  rates,  the  values  of such
securities  generally  decline.  Changes by  recognized  rating  agencies in the
rating of any fixed  income  security  and in the  ability  of an issuer to make
payments of interest and principal  also affect the value of these  investments.
Changes in the value of portfolio  securities will not  necessarily  affect cash
income  derived  from  these  securities,  but will  affect the Fund's net asset
values.

Corporations  issue bonds and notes to raise  money for  working  capital or for
capital  expenditures  such  as  plant  construction,  equipment  purchases  and
expansion.  In return for the money loaned to the  corporation by  shareholders,
the corporation  promises to pay bondholders interest and to repay the principal
amount of the bond or note.

     PREFERRED STOCKS.  The Fund may invest in preferred  securities.  Preferred
securities are equity  securities,  but they have many  characteristics of fixed
income  securities,  such as a fixed  dividend  payment  rate and/or a liquidity
preference over the issuer's common shares.  However,  because  preferred shares
are  equity  securities,  they may be more  susceptible  to risks  traditionally
associated with equity investments than fixed income  securities.  Unlike common
stock, preferred securities typically do not have voting rights.

Fixed rate preferred  stocks have fixed dividend  rates.  They can be perpetual,
with no mandatory  redemption date, or issued with a fixed mandatory  redemption
date.  Certain  issues of  preferred  stock are  convertible  into other  equity
securities.  Perpetual  preferred stocks provide a fixed dividend throughout the
life of the issue, with no mandatory retirement provisions, but may be callable.
Sinking fund  preferred  stocks  provide for the  redemption of a portion of the
issue on a regularly scheduled basis with, in most cases, the entire issue being
retired  at a future  date.  The value of fixed  rate  preferred  stocks  can be
expected to vary inversely with interest rates. Adjustable rate preferred stocks
have a  variable  dividend  rate  which is  determined  periodically,  typically
quarterly,  according to a formula  based on a specified  premium or discount to
the  yield  on  particular  U.S.  Treasury  securities,  typically  the  highest
base-rate yield of one of three U.S.  Treasury  securities:  the 90-day Treasury
bill; the 10-year Treasury note; and either the 20-year or 30-year Treasury bond
or other index.  The premium or discount to be added to or subtracted  from this
base-rate  yield is fixed at the time of issuance and cannot be changed  without
the  approval  of the  holders of the  adjustable  rate  preferred  stock.  Some
adjustable  rate preferred  stocks have a maximum and a minimum rate and in some
cases are convertible into common stock.

Auction  rate  preferred  stocks pay  dividends  that  adjust  based on periodic
auctions. Such preferred stocks are similar to short-term corporate money market
instruments in that an auction rate preferred stockholder has the opportunity to
sell the preferred stock at par in an auction, normally conducted at least every
49 days, through which buyers set the dividend rate in a bidding process for the
next period.  The dividend rate set in the auction depends on market  conditions
and the credit quality of the  particular  issuer.  Typically,  the auction rate
preferred stock's dividend rate is limited to a specified maximum  percentage of
an external commercial paper index as of the auction date. Further, the terms of
the auction rate preferred stocks generally  provide that they are redeemable by
the issuer at certain times or under certain conditions.

The Fund may, from time to time, invest in preferred  securities that are rated,
or whose issuer's senior debt is rated, investment grade by Moody's and Standard
& Poor's ("S&P") at the time of investment,  although the Fund is not limited to
investments in investment grade preferred securities.  In addition, the Fund may
acquire  unrated  issues that the Advisers  deem to be  comparable in quality to
rated issues in which the Fund is authorized to invest.

     MONEY MARKET INSTRUMENTS.  Under normal conditions, the Fund may hold up to
10% of its  assets in cash or money  market  instruments.  The Fund  intends  to
invest in money market  instruments  pending  investments in common  stocks,  to
serve as collateral in connection  with certain  investment  techniques,  and to
hold as a reserve  pending  the  payment of  dividends  to  investors.  When the
Advisers  believe  that  economic  circumstances  warrant a temporary  defensive
posture,  the Fund may invest  without  limitation  in  short-term  money market
instruments.

Money market  instruments  that the Fund may acquire will be securities rated in
the highest  short-term rating category by Moody's or S&P or the equivalent from
another  major rating  service,  securities  of issuers that have  received such
ratings with respect to other short-term debt or comparable unrated  securities.
Money market  instruments in which the Fund typically expects to invest include:
U.S. government securities; bank obligations (including certificates of deposit,
time deposits and bankers'  acceptances  of U.S. or foreign  banks);  commercial
paper rated P-l by Moody's or A-1 by S&P ; and repurchase agreements.

     REPURCHASE AGREEMENTS. The Fund may invest temporarily, without limitation,
in repurchase agreements,  which are agreements pursuant to which securities are
acquired by the Fund from a third party with the understanding that they will be
repurchased by the seller at a fixed price on an agreed date.  These  agreements
may be made with respect to any of the portfolio securities in which the Fund is
authorized  to  invest.  Repurchase  agreements  may be  characterized  as loans
secured  by the  underlying  securities.  The Fund  may  enter  into  repurchase
agreements  with (i) member  banks of the Federal  Reserve  System  having total
assets in excess of $500 million and (ii) securities dealers, provided that such
banks or dealers  meet  certain  creditworthiness  standards.  The resale  price
reflects the purchase price plus an agreed upon market rate of interest which is
unrelated to the coupon rate or date of maturity of the purchased security.  The
collateral is marked to market daily.  Such  agreements  permit the Fund to keep
all its assets  earning  interest  while  retaining  "overnight"  flexibility in
pursuit of investments of a longer term nature.

<PAGE>

The use of repurchase  agreements  involves certain risks.  For example,  if the
seller of securities under a repurchase  agreement defaults on its obligation to
repurchase  the  underlying  securities,  as  a  result  of  its  bankruptcy  or
otherwise, the Fund will seek to dispose of such securities,  which action could
involve  costs or  delays.  If the  seller  becomes  insolvent  and  subject  to
liquidation or  reorganization  under  applicable  bankruptcy or other laws, the
Fund's  ability to  dispose  of the  underlying  securities  may be  restricted.
Finally,  it is  possible  that  the Fund  may not be able to  substantiate  its
interest in the  underlying  securities.  To minimize this risk,  the securities
underlying the  repurchase  agreement will be held by the custodian at all times
in an amount at least equal to the repurchase price, including accrued interest.
If the seller fails to repurchase the securities,  the Fund may suffer a loss to
the extent proceeds from the sale of the underlying securities are less than the
repurchase price.

     GOVERNMENT  SECURITIES.  The Fund may  invest in  securities  that  include
direct  obligations  of  the  United  States  and  obligations  issued  by  U.S.
government agencies and instrumentalities  ("Government  Securities").  Included
among direct obligations of the United States are Treasury bills, Treasury notes
and Treasury  bonds,  which  differ  principally  in terms of their  maturities.
Securities  issued  by  U.S.  government  agencies  and  instrumentalities  are:
securities  that are supported by the full faith and credit of the United States
(such as Government National Mortgage Association certificates); securities that
are supported by the right of the issuer to borrow from the U.S.  Treasury (such
as securities of Federal Home Loan Banks);  and securities that are supported by
the credit of the instrumentality (such as Federal National Mortgage Association
and Federal Home Loan  Mortgage  Corporation  bonds).  No assurance can be given
that the U.S.  government will provide  financial  support in the future to U.S.
government agencies,  authorities or instrumentalities that are not supported by
the full faith and  credit of the United  States.  Securities  guaranteed  as to
principal  and interest by the U.S.  government,  its agencies,  authorities  or
instrumentalities  include (i) securities for which the payment of principal and
interest  is  backed  by an  irrevocable  letter  of  credit  issued by the U.S.
government or any of its agencies,  authorities or  instrumentalities;  and (ii)
participations in loans made to non-U.S.  governments or other entities that are
so  guaranteed.  The  secondary  market for certain of these  participations  is
limited and therefore may be regarded as illiquid.

     ZERO COUPON  SECURITIES.  The Fund may invest up to 10% of its total assets
in zero  coupon  securities  issued  by the U.S.  government,  its  agencies  or
instrumentalities as well as custodial receipts or certificates  underwritten by
securities dealers or banks that evidence ownership of future interest payments,
principal  payments  or both  on  certain  government  securities.  Zero  coupon
securities  pay no cash income to their holders until they mature and are issued
at substantial  discounts  from their value at maturity.  When held to maturity,
their entire return comes from the  difference  between their purchase price and
their maturity value.  Because interest on zero coupon securities is not paid on
a current  basis,  the values of  securities of this type are subject to greater
fluctuations  than are the values of securities that distribute income regularly
and may be more  speculative than such  securities.  Accordingly,  the values of
these  securities  may be highly  volatile  as interest  rates rise or fall.  In
addition,  the Fund's  investments  in zero  coupon  securities  will  result in
special tax  consequences.  Although zero coupon securities do not make interest
payments,  for tax  purposes a portion of the  difference  between a zero coupon
security's  maturity  value and its purchase price is taxable income of the Fund
each year.

Custodial  receipts  evidencing  specific coupon or principal  payments have the
same  general  attributes  as  zero  coupon  Government  Securities  but are not
considered to be Government Securities.  Although typically under the terms of a
custodial  receipt the Fund is authorized to assert its rights directly  against
the issuer of the  underlying  obligation,  the Fund may be  required  to assert
through  the  custodian  bank such rights as may exist  against  the  underlying
issuer.  Thus, in the event the underlying  issuer fails to pay principal and/or
interest  when due,  the Fund may be subject to delays,  expenses and risks that
are greater than those that would have been involved if the Fund had purchased a
direct  obligation  of the issuer.  In addition,  in the event that the trust or
custodial  account  in which  the  underlying  security  has been  deposited  is
determined  to  be  an  association  taxable  as  a  corporation,  instead  of a
non-taxable  entity,  the yield on the  underlying  security would be reduced in
respect of any taxes paid.

     BORROWINGS.  The Fund  reserves  the  right to borrow  funds to the  extent
permitted by its Fundamental  Policies.  See  "Fundamental  Policies" above. The
proceeds of  borrowings  may be used for any valid  purpose  including,  without
limitation,  liquidity,  investing and repurchases of capital stock of the Fund.
The Fund may borrow  money only in an amount up to one-third of the value of the
Fund's  total  assets.  Borrowing  is a form of leverage  and, in that  respect,
entails risks,  including volatility in net asset value, market value and income
available for distribution.

<PAGE>

     LENDING OF SECURITIES.  The Fund is authorized to lend  securities it holds
to  brokers,  dealers  and other  financial  organizations,  although  it has no
current intention of doing so. Loans of the Fund's securities, if and when made,
may not  exceed  33-1/3%  of the  Fund's  total  assets.  The  Fund's  loans  of
securities  will be  collateralized  by cash,  letters  of credit or  Government
Securities that will be maintained at all times in a segregated account with the
Fund's  custodian in an amount at least equal to the current market value of the
loaned  securities.  From time to time,  the Fund may pay a part of the interest
earned from the investment of collateral  received for securities  loaned to the
borrower  and/or a third  party that is  unaffiliated  with the Fund and that is
acting as a "finder."

By  lending  its  portfolio  securities,  the Fund can  increase  its  income by
continuing to receive interest on the loaned  securities,  by investing the cash
collateral  in  short-term  instruments  or by  obtaining  yield  in the form of
interest paid by the borrower when Government Securities are used as collateral.
The risk in lending  portfolio  securities,  as with other extensions of credit,
consists of the  possible  delay in recovery of the  securities  or the possible
loss of rights in the collateral should the borrower fail financially.  The Fund
will adhere to the following  conditions  whenever it lends its securities:  (i)
the Fund must receive at least 100% cash  collateral  or  equivalent  securities
from the borrower, which will be maintained by daily marking-to-market; (ii) the
borrower  must  increase  the  collateral  whenever  the  market  value  of  the
securities  loaned rises above the level of the collateral;  (iii) the Fund must
be able to terminate the loan at any time; (iv) the Fund must receive reasonable
interest on the loan, as well as any dividends,  interest or other distributions
on the loaned  securities and any increase in market value; (v) the Fund may pay
only  reasonable  custodian  fees in connection  with the loan;  and (vi) voting
rights on the loaned  securities  may pass to the  borrower,  except that,  if a
material  event  adversely  affecting the  investment  in the loaned  securities
occurs,  the Board must  terminate  the loan and regain the Fund's right to vote
the securities.

     SHORT SALES AGAINST THE BOX. The Fund may make short sales of securities in
order to reduce  market  exposure  and/or to increase its income if at all times
when a short  position is open, the Fund owns an equal or greater amount of such
securities or owns preferred stock, debt or warrants convertible or exchangeable
into an equal or greater number of the shares of common stocks sold short. Short
sales of this  kind are  referred  to as short  sales  "against  the  box."  The
broker-dealer  that executes a short sale generally invests the cash proceeds of
the sale  until  they are paid to the  Fund.  Arrangements  may be made with the
broker-dealer  to obtain a portion of the  interest  earned by the broker on the
investment  of short  sale  proceeds.  The Fund will  segregate  the  securities
against  which short sales  against the box have been made in a special  account
with its custodian. Not more than 10% of the Fund's net assets (taken at current
value) may be held as collateral for such sales at any one time.

     ILLIQUID   SECURITIES.   The  Fund  may  invest  in  illiquid   securities.
Historically,   illiquid   securities  have  included   securities   subject  to
contractual  or  legal  restrictions  on  resale  because  they  have  not  been
registered  under  the 1933 Act,  securities  which are  otherwise  not  readily
marketable  and  repurchase  agreements  having a maturity  of longer than seven
days.  Restricted  securities are securities  that may not be sold freely to the
public  absent   registration   under  the  1933  Act,  or  an  exemption   from
registration. The Fund has no limitation on the amount of its assets that may be
invested  in  securities  which are not  readily  marketable  or are  subject to
restrictions on resale, although it may not invest more than 30% of the value of
its  total  assets  in  securities  which  have been  acquired  through  private
placement.

The Board has  delegated  the function of making  day-to-day  determinations  of
liquidity to the Advisers pursuant to guidelines approved by the Board. The Fund
is a  closed-end  fund which means that  managing  liquidity  for the purpose of
shareholder  redemptions  is not an  issue  as it  might  otherwise  be  with an
open-end fund.  Accordingly,  the Advisers are not constrained in this regard in
their day-to-day  management of the portfolio,  knowing that redemptions are not
an issue.  Moreover, a majority of the securities in the Fund, both historically
and currently, are exchange-traded securities with relatively good liquidity. In
the few cases where the liquidity of certain securities is less so, the Advisers
will take into  account a number of factors  in  reaching  liquidity  decisions,
including, but not limited to: (1) the frequency of trades for the security, (2)
the number of dealers  willing and ready to purchase and sell the security,  (3)
whether any dealers have agreed to make a market in the security, (4) the number
of other  potential  purchasers  for the  security,  and (5) the  nature  of the
securities and the nature of the marketplace trades.

     WHEN-ISSUED, DELAYED DELIVERY AND FORWARD COMMITMENT TRANSACTIONS. The Fund
may  purchase  and  sell  securities,  including  Government  Securities,  on  a
when-issued,  delayed delivery or forward commitment basis. Typically, no income
accrues on  securities  the Fund has  committed  to  purchase  prior to the time
delivery  of the  securities  is made,  although  the Fund  may earn  income  on
securities it has segregated.

When  purchasing  a security  on a  when-issued,  delayed  delivery,  or forward
commitment  basis,  the Fund  assumes the rights and risks of  ownership  of the
security, including the risk of price fluctuations,  and takes such fluctuations
into  account  when  determining  its net asset  value.  Because the Fund is not
required to pay for the  security  until the delivery  date,  these risks are in
addition to the risks associated with the Fund's other investments.  If the Fund
remains  substantially  fully  invested  at a  time  when  when-issued,  delayed
delivery,  or forward  commitment  purchases are outstanding,  the purchases may
result in a form of leverage.

<PAGE>

When the Fund has sold a security on a when-issued, delayed delivery, or forward
commitment  basis,  the Fund does not participate in future gains or losses with
respect to the security. If the other party to a transaction fails to deliver or
pay for  the  securities,  the  Fund  could  miss a  favorable  price  or  yield
opportunity  or could suffer a loss.  The Fund may dispose of or  renegotiate  a
transaction after it is entered into, and may sell when-issued, delayed delivery
or forward commitment securities before they are delivered,  which may result in
a capital gain or loss. There is no percentage limitation on the extent to which
the Fund may purchase or sell securities on a when-issued,  delayed delivery, or
forward commitment basis.


OTHER INVESTMENT TECHNIQUES AND POLICIES

     PREFERRED SHARES LEVERAGE. The Prospectus  contemplates an offering whereby
the Fund will be leveraged with 1,000  Preferred  Shares.  The Preferred  Shares
will be senior to the common stock and will result in the  financial  leveraging
of the common stock. Dividends on Preferred Shares are cumulative. The Fund will
be required to meet certain asset  coverage  tests with respect to the Preferred
Shares.  If the Fund fails to meet these  requirements and does not correct such
failure,  the Fund may be required to redeem,  in part or in full, the Preferred
Shares at a  redemption  price of $25,000 per share plus an amount  equal to the
accumulated  and  unpaid  dividends  on such  shares  in  order  to  meet  these
requirements.  Additionally,  failure to meet the foregoing  asset  requirements
could restrict the Fund's ability to pay dividends to common stock  shareholders
and  could  lead  to  sales  of  portfolio   securities  at  inopportune  times.
Nevertheless, the Fund's management believes that well-managed leverage can have
a beneficial  effect on common stock  shareholders'  total return.  Leverage can
provide enough additional income to pay a substantial  portion of Fund expenses,
if there is enough of a  positive  spread  between  the  borrowed  money and the
return on the assets  acquired  with such  monies.  Use of  leverage  may have a
number of  adverse  effects  on the Fund and its  shareholders,  including:  (i)
leverage may magnify market  fluctuations in the Fund's underlying holdings thus
causing a disproportionate change in the Fund's net asset value; (ii) the Fund's
cost of leverage  may exceed the return on the  underlying  securities  acquired
with the proceeds of the leverage, thereby diminishing rather than enhancing the
return to  shareholders  and  generally  making the Fund's  total return to such
shareholders  more volatile;  (iii) the Fund may be required to sell investments
in order to meet  dividend or interest  payments on the debt or preferred  stock
when  it may be  disadvantageous  to do so;  and  (iv)  leveraging  through  the
issuance of preferred  stock  requires that the holders of the  preferred  stock
have class voting  rights on various  matters that could make it more  difficult
for the  holders  of the  common  stock to change the  investment  objective  or
fundamental  policies  of the Fund,  to convert it to an  open-end  fund or make
certain other changes.

Although the Fund will focus its use of leverage on producing  income,  the Fund
may also purchase  other income  producing  securities  (e.g.,  RICs,  REITs and
dividend-paying  common  stocks)  or   non-dividend-paying   common  stocks  for
long-term  appreciation.  The  Fund is  limited  in its use of  leverage  to the
maximum amount permitted pursuant to Section 18 of the 1940 Act.

     RISKS ASSOCIATED WITH LEVERAGE. The Preferred Shares leverage (or any other
leverage) will create an opportunity for increased return but, at the same time,
will involve special risk  considerations.  Leveraging will magnify  declines as
well as  increases  in the net asset  value of the  common  stock and in the net
return on the Fund's  portfolio.  Although the principal of the Fund's Preferred
Shares will be fixed,  the Fund's assets may change in value during the time the
Preferred Shares are outstanding,  thus increasing  exposure to capital risk. To
the extent the return derived from the assets obtained with the Preferred Shares
proceeds exceeds the interest and other expenses that the Fund will have to pay,
the Fund's net return will be greater than if Preferred  Shares leverage was not
used.  Conversely,  however,  if the return  from the assets  obtained  with the
Preferred  Shares  proceeds is not sufficient to cover the dividends and cost of
the Preferred Shares,  the net return of the Fund will be less than if Preferred
Shares   leverage  was  not  used,  and  therefore  the  amount   available  for
distribution to the Fund's shareholders as dividends will be reduced.

     BORROWING THROUGH  REPURCHASE  AGREEMENTS.  The Fund may borrow by entering
into reverse  repurchase  agreements with any member bank of the Federal Reserve
System and any broker-dealer or any foreign bank that has been determined by the
Advisers to be  creditworthy.  Under a reverse  repurchase  agreement,  the Fund
would sell securities and agree to repurchase them at a mutually agreed date and
price. At the time the Fund enters into a reverse repurchase agreement,  it will
establish  and maintain a segregated  account with its custodian or a designated
sub-custodian,  containing  cash or liquid  obligations  having a value not less
than the repurchase  price  (including  accrued  interest).  Reverse  repurchase
agreements  involve the risk that the market value of the  securities  purchased
with the  proceeds  of the sale of  securities  received by the Fund may decline
below the price of the securities  the Fund is obligated to  repurchase.  In the
event the buyer of securities  under a reverse  repurchase  agreement  files for
bankruptcy  or  becomes  insolvent,  the buyer or its  trustee or  receiver  may
receive  an  extension  of time to  determine  whether  to  enforce  the  Fund's
obligation to repurchase the  securities,  and the Fund's use of the proceeds of
the reverse  repurchase  agreement may  effectively  be  restricted  pending the
decision.  Any reverse  repurchase  agreements  entered into by the Fund will be
treated  as  borrowings  for  purposes  of  calculating  the  Fund's   borrowing
limitation.

<PAGE>


                             MANAGEMENT OF THE FUND

The Board is  responsible  for the  overall  management  of the Fund,  including
supervision of the duties performed by the Advisers. There are five Directors of
the Fund. One of the Directors is an "interested person" of the Fund (as defined
in the 1940 Act). The Directors who are not "interested persons" of the Fund are
referred to herein as "Independent  Directors." See the "Management of the Fund"
in the Prospectus for additional information about the Directors and officers of
the Fund.



                 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following  table sets forth  certain  information  regarding the  beneficial
ownership of the Fund's shares as of June ___, 2005, by each person who is known
by the Fund to beneficially own 5% or more of the Fund's common stock.


<TABLE>
<CAPTION>
        Name and address* of Owner      Number of Shares         Number of Shares          Percentage
                                         Directly Owned         Beneficially Owned      Beneficially Owned
<S>                                     <C>                     <C>                     <C>
Ernest Horejsi Trust No.1B (the         2,354,600               2,354,600               20.79%
"EH Trust")

Badlands Trust Company, LLC                                     ---**                   20.79%

Stewart R. Horejsi Trust No. 2A                                 ---**                   20.79%

Aggregate Shares Owned**                                        2,354,600               20.79%
</TABLE>
_______________________

* The  address  of  each  listed  owner  is  c/o  Badlands  Trust  Company,  LLC
("Badlands"), 3601 C Street, Suite 600, Anchorage, Alaska 99503.

** Excludes  shares owned by the EH Trust.  Badlands is one of three trustees of
the EH Trust.  Badlands is a private trust company  organized  under the laws of
Alaska  and is  wholly  owned  by the  Stewart  R.  Horejsi  Trust  No.  2A,  an
irrevocable  trust organized by Stewart R. Horejsi for the benefit of his issue.
The managers of Badlands are Larry Dunlap, Stephen C. Miller, Laura Rhodenbaugh,
Laura Tatooles,  and Ron Kukes,  each of whom disclaim  beneficial  ownership of
shares owned by the EH Trust. Mr. Miller is an officer and director of Badlands.
Because two of the Trust's  trustees are required in order for the Trust to vote
or exercise dispositive authority with respect to shares owned by the Trust, Mr.
Miller disclaims beneficial ownership of such shares.

Information  as to  beneficial  ownership  in the  previous  paragraph  has been
obtained from a representative of the beneficial  owners;  all other information
as to  beneficial  ownership is based on reports filed with the  Securities  and
Exchange Commission (the "SEC") by such beneficial owners.

As of June ___, 2005, Cede & Co., a nominee  partnership of the Depository Trust
Fund, held of record, but not beneficially,  __________shares  or ___% of common
stock  outstanding of the Fund. As of June ___, 2005,  officers and Directors of
the Fund,  as a group,  owned  ____________shares  of the  Fund's  common  stock
(including  the  aggregate  shares of common  stock owned by the EH Trust as set
forth above), representing ______% of common stock.



                       OWNERSHIP OF THE FUND BY DIRECTORS

     Set forth in the  following  table  are the  current  members  of the Board
together with the dollar range of equity securities  beneficially  owned by each
Director as of December 31, 2004, as well as the  aggregate  dollar range of the
Fund's  equity  securities  in all  funds  overseen  in  the  Fund's  family  of
investment  companies  (i.e.,  other funds managed by BIA and SIA and which hold
themselves out as related companies).

<PAGE>

<TABLE>
<CAPTION>
                                           Dollar Range of Equity         Aggregate Dollar Range of
                                           Securities in the Fund       Equity Securities in All Funds
                                                                         in the Family of Investment
                                                                                   Companies
        <S>                                <C>                          <C>
        Independent Directors
- ----------------------------------------------------------------------------------------------------------------------
        Alfred G. Aldridge, Jr.            $10,001 to $50,000           $50,001 to $100,000

        Richard I. Barr                    $50,001 to $100,000          Over $100,000

        Joel W. Looney                     $50,001 to $100,000          Over $100,000

        Dennis R. Causier                  $0                           $0


        Interested Director
- ------------------------------------------------------------------------------------------------------------------------
        John S. Horejsi                    Over $100,000+               Over $100,000
</TABLE>

+  2,354,600  shares  of the  Fund are held by the EH  Trust.  Accordingly,  Mr.
Horejsi may be deemed to have indirect beneficial  ownership of such Shares. Mr.
Horejsi disclaims all such beneficial  ownership.  Mr. Horejsi does not directly
own any shares of the Fund.

     None  of  the   Independent   Directors  or  their  family   members  owned
beneficially  or of record any securities of the Advisers or any person directly
or  indirectly  controlling,  controlled  by, or under  common  control with the
Advisers.



                        DIRECTOR AND OFFICER COMPENSATION

     The  following   table  sets  forth  certain   information   regarding  the
compensation of the Independent Directors for the fiscal year ended November 30,
2004.  No persons  other than the  Independent  Directors,  as set forth  below,
currently  receive  compensation  from the  Fund for  acting  as a  Director  or
officer. Directors and officers of the Fund do not receive pension or retirement
benefits from the Fund.

<TABLE>
<CAPTION>
                                            Aggregate             Total Compensation from
  Name of Person and Position with the  Compensation from       the Fund and Fund Complex
                  Fund                       the Fund               Paid to Directors
- ------------------------------------------------------------------------------------------------
<S>                                     <C>                     <C>
Alfred G. Aldridge, Jr., Director       $23,000                 $49,500
                                                                (2 funds)


Richard I. Barr, Director               $23,000                 $53,500
                                                                (2 funds)

Joel W. Looney, Director and Chairman   $25,000                 $53,500
of the Board                                                    (2 funds)

Dennis R. Causier, Director             $4,533                  $4,533
                                                                (1 fund)
</TABLE>


     Each  Independent  Director  receives a fee of $8,000 per annum plus $3,000
for each in person meeting,  $500 for each Audit Committee  meeting and $500 for
each telephonic meeting of the Board. In addition, the Chairman of the Board and
the Chairman of the Audit Committee  receives an additional  $1,000 per meeting.
Each Independent Director of the Fund is reimbursed for travel and out-of-pocket
expenses associated with attending Board and Committee meetings.  The Board held
eight meetings (four of which were held by telephone conference call) during the
fiscal year ended  November 30, 2004.  Each Director  currently  serving in such
capacity  for the entire  fiscal year  attended at least 75% of the  meetings of
Directors and any Committee of which he is a member. Directors currently serving
and who served less than the entire  fiscal  year  attended at least 75% of such
meetings held during their tenure as a Director. The aggregate remuneration paid
to the  Independent  Directors  of the Fund for acting as such during the fiscal
year ended November 30, 2004 amounted to $75,532.97.

<PAGE>


                      COMMITTEES OF THE BOARD OF DIRECTORS

AUDIT COMMITTEE. The Fund has an audit committee consisting solely of all of the
Fund's Independent Directors (i.e., Messrs. Looney, Aldridge,  Causier and Barr)
(the "Audit  Committee").  The purpose of the Audit  Committee  is to assist the
Board in its oversight of the integrity of the Fund's financial statements,  the
Fund's   compliance   with   legal   and   regulatory   requirements,   and  the
qualifications,   independence   and  performance  of  the  Fund's   independent
registered  public accounting firm (the  "independent  accountants").  The Audit
Committee  reviews  the scope and  results of the Fund's  annual  audit with the
Fund's independent accountants and recommends the engagement of such independent
accountants.   Management,   however,   is  responsible  for  the   preparation,
presentation  and  integrity  of  the  Fund's  financial  statements,   and  the
independent  accountants  are  responsible  for planning and carrying out proper
audits and reviews.  The Board adopted a written charter for the Audit Committee
on January 23, 2002 and most recently amended the Charter on January 23, 2004. A
copy of the Audit  Committee  Charter was  attached as an appendix to the Fund's
proxy statement in 2004.  Each member of the Audit Committee is independent,  as
that term is defined by the New York Stock Exchange ("NYSE") Listing  Standards.
The Audit  Committee  met two times  during the fiscal year ended  November  30,
2004.

NOMINATING  COMMITTEE.  The Board has a nominating  committee  (the  "Nominating
Committee") consisting solely of the Independent Directors, which is responsible
for considering  candidates for election to the Board in the event a position is
vacated or created.  Each member of the Nominating Committee is independent,  as
that term is defined by the NYSE Listing Standards. The Nominating Committee met
three times during the fiscal year ended November 30, 2004.

The  Nominating  Committee  does  not  have a  formal  process  for  identifying
candidates. The Nominating Committee takes into consideration such factors as it
deems  appropriate  when  nominating  candidates.   These  factors  may  include
judgment,  skill,  diversity,  experience  with  investment  companies and other
organizations  of comparable  purpose,  complexity,  size and subject to similar
legal  restrictions and oversight,  the interplay of the candidate's  experience
with  the  experience  of other  Board  members,  and the  extent  to which  the
candidate would be a desirable addition to the Board and any committees thereof.
The  Nominating  Committee  will consider all  qualified  candidates in the same
manner.  The  Nominating  Committee may modify its policies and  procedures  for
director  nominees  and  recommendations  in  response  to changes in the Fund's
circumstances, and as applicable legal or listing standards change.

The  Nominating  Committee  will consider  director  candidates  recommended  by
shareholders  (if a vacancy  were to exist) and  submitted  in  accordance  with
applicable law and the following procedures.  Pursuant to the Fund's By-laws, at
any annual  meeting of the  shareholders,  only  business that has been properly
brought before the meeting will be conducted.  To be properly brought before the
annual  meeting,  the business  must be (i)  specified in the notice of meeting,
(ii) by or at the direction of the Board,  or (iii) otherwise  properly  brought
before the meeting by a shareholder.  For business to be properly brought before
the annual  meeting by a  shareholder,  the  shareholder  must have given timely
notice  thereof  in  writing  to the  Secretary  of the Fund.  To be  timely,  a
shareholder's  notice must be  delivered  to the  Secretary of the Fund no later
than 5:00 p.m.,  Mountain Time, on the 120th day prior to the first  anniversary
of the date of mailing of the notice for the preceding  year's  annual  meeting.
However,  if the date of the annual  meeting is advanced or delayed by more than
30 days from the first  anniversary  of the date of the preceding  year's annual
meeting,  for notice by the  shareholder to be timely,  it must be delivered not
later than 5:00 p.m.,  Mountain Time, on the later of the 120th day prior to the
date of such annual  meeting or the tenth day  following the day on which public
announcement of the date of such meeting is first made. The public  announcement
of a  postponement  or adjournment of an annual meeting shall not commence a new
time period for the giving of a shareholder's notice as described above.


Pursuant to the Fund's By-laws,  such shareholder's notice shall set forth as to
each  individual  whom the  shareholder  proposes  to nominate  for  election or
reelection  as a director,  (A) the name,  age,  business  address and residence
address of such  individual,  (B) the class,  series and number of any shares of
stock of the Fund that are beneficially  owned by such individual,  (C) the date
such shares were acquired and the  investment  intent of such  acquisition,  (D)
whether  such  shareholder  believes  any  such  individual  is,  or is not,  an
"interested  person" of the Fund,  as  defined  in the 1940 Act and  information
regarding such individual that is sufficient,  in the discretion of the Board or
any  committee  thereof  or any  authorized  officer  of the Fund,  to make such
determination and (E) all other information  relating to such individual that is
required to be disclosed in  solicitations  of proxies for election of directors
in an election  contest  (even if an election  contest is not  involved),  or is
otherwise  required,  in each case pursuant to Regulation  14A (or any successor
provision) under the Securities  Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules thereunder  (including such individual's written consent to
being named in the proxy  statement as a nominee and to serving as a director if
elected).

<PAGE>


                 INVESTMENT ADVISERS AND OTHER SERVICE PROVIDERS

The Fund is  co-advised  by Boulder  Investment  Advisers,  LLC and Stewart West
Indies Trading Company,  Ltd. d/b/a Stewart  Investment  Advisers.  The Advisers
have been providing  advisory  services to the Fund since January,  2002, and to
Boulder Total Return Fund,  Inc.  since March,  1999. As of June ___,  2005, the
Advisers had a total of $_____ million in assets under management.

BOULDER INVESTMENT ADVISERS, LLC. BIA was formed on April 8, 1999, as a Colorado
limited liability  company and is registered as an investment  adviser under the
Investment  Advisers Act of 1940, as amended.  Stewart R. Horejsi is an employee
of and  investment  manager  for  both  Advisers  and has  extensive  experience
managing  common stocks for the Fund as well as for the various other trusts and
entities  affiliated  with the Horejsi  family (the "Horejsi  Affiliates").  The
members of BIA are Evergreen  Atlantic,  LLC, whose address is 1680 38th Street,
Suite  800,  Boulder,  Colorado  80301 and the Lola Brown  Trust No.  1B,  whose
address is c/o Badlands Trust Company, LLC, 3601 C Street, Suite 600, Anchorage,
Alaska  99503 (the  "Members").  Each of the Members hold a 50% interest in BIA.
The Members are "affiliated persons" of the Fund (as that term is defined in the
1940 Act).  Both Mr.  Horejsi and John S.  Horejsi,  Mr.  Horejsi's  son and the
Fund's  "interested"  Director,  are discretionary  beneficiaries under the Lola
Brown Trust No. 1B as well as under other Horejsi Affiliates which own Evergreen
Atlantic,  LLC. Accordingly,  as a result of this relationship,  both Stewart R.
Horejsi  and  John S.  Horejsi  may  directly  or  indirectly  benefit  from the
relationship between the Fund and BIA.

STEWART INVESTMENT ADVISERS.  SIA is a Barbados  international  business company
incorporated  on November  12,  1996.  SIA is wholly  owned by the Stewart  West
Indies Trust (the "West Indies Trust"), an irrevocable trust domiciled in Alaska
and established by Mr. Horejsi in 1996 primarily to benefit his issue.  The West
Indies Trust's address is c/o Badlands Trust Company,  LLC, 3601 C Street, Suite
600,  Anchorage,  Alaska 99503. Mr. Horejsi is not a beneficiary  under the West
Indies  Trust.  However,  John S.  Horejsi,  Mr.  Horejsi's  son and the  Fund's
"interested"  Director,  is a  discretionary  beneficiary  under the West Indies
Trust and thus,  as a result of this  relationship,  may directly or  indirectly
benefit from the relationship between SIA and the Fund.

SIA is not  domiciled in the United States and  substantially  all of its assets
are located  outside the United  States.  As a result,  it may be  difficult  to
realize  judgments  of  courts  of  the  United  States  predicated  upon  civil
liabilities  under federal  securities  laws of the United States.  The Fund has
been  advised  that  there  is  substantial  doubt as to the  enforceability  in
Barbados of such civil  remedies and  criminal  penalties as are afforded by the
federal securities laws of the United States. Pursuant to the advisory agreement
between SIA and the Fund, SIA has appointed the Secretary of the Fund (presently
Stephanie  Kelley in Boulder,  Colorado)  as its agent for service of process in
any legal action in the United States, thus subjecting it to the jurisdiction of
the United States courts.

CO-ADVISORY  AGREEMENTS.  The  Advisers  and the Fund are parties to  investment
co-advisory  agreements dated as of April 26, 2002 (the "Advisory  Agreements").
Under  the terms of the  Advisory  Agreements,  the  Advisers  provide  advisory
services regarding asset allocation,  manage the investment of the Fund's assets
and provide such investment research, advice and supervision, in conformity with
the Fund's investment objective and policies, as necessary for the operations of
the Fund. The Advisory Agreements provide, among other things, that the Advisers
will bear all expenses in  connection  with the  performance  of their  services
under the Advisory Agreements.

The  Advisory  Agreements  provide  that the Fund shall pay to the  Advisers for
their  services  an  aggregate  monthly  fee at the annual  rate of 1.25% of the
Fund's average monthly net assets,  including the principal  amount of leverage,
if any (the "Adviser Fee"). The Adviser Fee is higher than the fees paid by most
similarly situated U.S.  investment  companies.  Under the terms of the Advisory
Agreements, the Advisers share the Adviser Fee as determined by the Advisers and
approved by the Board from time to time. Presently,  BIA and SIA receive 25% and
75%,  respectively,  of the Adviser Fee.  Although the Advisers intend to devote
such  time  and  effort  to the  business  of the Fund as they  deem  reasonably
necessary to perform their  respective  duties to the Fund,  the services of the
Advisers are not  exclusive  and the Advisers  may provide  similar  services to
other investment companies and other clients and may engage in other activities.

The Advisory  Agreements  provide that the Advisers  shall not be liable for any
error of judgment or mistake of law or omission or any loss suffered by the Fund
in  connection  with the matters to which the  agreements  relate,  although the
agreements  do not  protect  or  purport to protect  the  Advisers  against  any
liability to the Fund to which the Advisers would otherwise be subject by reason
of  willful  misfeasance,  bad faith or gross  negligence  on their  part in the
performance  of  their  duties  or from  reckless  disregard  by  them of  their
obligations  and duties  under the  agreements.  Each  Advisory  Agreement  also
provides for  indemnification  by the Fund of the  Advisers and their  partners,
members,  officers,  employees,  agents  and  control  persons  for  liabilities
incurred  by them in  connection  with their  services  to the Fund,  subject to
certain limitations and conditions.

PORTFOLIO MANAGERS.  Stewart R. Horejsi is the Fund's primary investment manager
and,  together with Carl D. Johns,  the Fund's Vice President and Treasurer,  is
responsible for the day-to-day  management of the Fund's assets.  Mr. Horejsi is
primarily  responsible for the Fund's asset allocation and Mr. Johns,  also Vice
President and Treasurer  for BIA, is  responsible  for research and managing the
Fund's fixed income portfolio.  Messrs. Horejsi and Johns are referred to herein
as the  "Portfolio  Managers".  The  Portfolio  Managers  act  as the  portfolio
managers with respect to the Fund and one other registered  investment  company,
the Boulder Total Return Fund,  Inc.  ("BTF").  As of November 30, 2004, BTF had
total assets of approximately $_____. Mr. Horejsi also acts as portfolio manager
with respect to a client of the Advisers who is a Horejsi Affiliate, the Horejsi
Charitable  Foundation,  which has total assets of approximately  $_______ as of
November  30,  2004.  Mr.  Horejsi  also acts as a financial  consultant  to the
Horejsi  Affiliates and manages their portfolios of equities having an aggregate
value of approximately $_______ as of November 30, 2004.

<PAGE>

The Portfolio Managers are compensated with fixed salaries which are established
based on a number of considerations,  including, among others, job and portfolio
performance,  industry compensation and comparables, and years of experience and
service with the Adviser.  The Portfolio Managers are reviewed from time to time
and their  salaries  may be adjusted  based on their  recent and  long-term  job
performance and cost of living increases.  Generally,  the Portfolio Managers do
not receive  bonuses.  Conflicts  of interest may arise in  connection  with the
Portfolio Managers'  management of the Fund's  investments.  This is because the
Portfolio  Managers  also  serve  as  portfolio  managers  to BTF and the  other
accounts  described  above  that may have  investment  objectives  identical  or
similar to those of the Fund. See "Potential Conflicts of Interest" below.

Mr. Horejsi does not directly own any shares of the Fund. However, the EH Trust,
which has engaged Mr. Horejsi as a financial consultant and of which Mr. Horejsi
is a  discretionary  beneficiary,  holds  2,354,600  shares  of the  Fund  as of
November  30,  2004.  Accordingly,  Mr.  Horejsi may be deemed to have  indirect
beneficial  ownership  of such shares  which have a dollar range in excess of $1
million.  Mr. Horejsi disclaims all such beneficial  ownership.  Mr. Johns holds
between [$10,001 and $50,000] of the shares of the Fund as of November 30, 2004.

FUND ADMINISTRATIVE  SERVICES, LLC. Fund Administrative Services, LLC ("FAS") is
the Fund's co-administrator.  FAS is a Colorado limited liability company formed
in 1994.  Its  principal  place of business is 200 S. Santa Fe, #4,  Salina,  KS
67401 and it has offices in Colorado at 1680 38th  Street,  Suite 800,  Boulder,
Colorado  80301.  The  members  of FAS are Lola  Brown  Trust  No.  1B (50%) and
Evergreen Atlantic, LLC (50%). Stewart R. Horejsi, the Fund's portfolio manager,
and his son John S. Horejsi, the Fund's "interested" Director, are discretionary
beneficiaries  of the Lola  Brown  Trust No.  1B,  and of the  trusts  which own
Evergreen  Atlantic,  LLC. The  officers of FAS are Stephen C. Miller,  manager;
Carl Johns,  assistant  manager;  Laura  Rhodenbaugh,  secretary/treasurer;  and
Stephanie  Kelley,  assistant  secretary.  Since  January of 2002,  FAS has been
providing certain  administrative and executive management services to the Fund,
including  among  other  things  negotiation  of  service  provider   contracts,
oversight  of  service  providers,   maintenance  of  the  Fund's  policies  and
procedures, and provision of compliance, legal and fund accounting services. FAS
has also  provided such  administrative  and  executive  management  services to
Boulder Total Return Fund, Inc. since March of 1999 and to First Financial Fund,
Inc. since August of 2003.

The Fund and FAS are parties to an  administration  agreement  dated February 1,
2004.  Under the  administration  agreement,  the Fund  pays FAS a  monthly  fee
calculated at an annual rate of 0.20% of the value of the Fund's average monthly
net assets up to $250 million; 0.18% of the Fund's average monthly net assets on
the next $150 million;  and,  0.15% on the value of the Fund's  average  monthly
assets over $400 million.  FAS has agreed to cap the Fund's total administration
costs at 0.30% (including administration,  co-administration, transfer agent and
custodian  fees),  and  therefore  waives a portion  of its fee should the total
monthly administration expenses exceed 0.30% on an annualized basis.

INVESTORS  BANK & TRUST  COMPANY.  Investors  Bank & Trust  Company  ("Investors
Bank"),  located at 200 Clarendon  Street,  Boston MA 02116 serves as the Fund's
co-administrator  and custodian of its assets.  As  co-administrator,  Investors
Bank provides  certain  services  including fund  accounting and  preparation of
materials  for Board  meetings.  Under an  administration  agreement and custody
agreement  between the Fund and Investors  Bank,  the Fund pays Investors Bank a
combined  monthly  fee  for  both   co-administrative   and  custodian  services
calculated  at an  annual  rate of 0.058%  of the  value of the  Fund's  average
monthly  net  assets up to $300  million  and  0.04% on the value of the  Fund's
average  monthly  net assets  over $300  million,  or a minimum  monthly  fee of
$10,500.  Presently,  because of the level of the  Fund's  average  monthly  net
assets, the Fund pays the minimum fee of $10,500 monthly. In addition, Investors
Bank  receives  certain  out-of-pocket  expenses,  transaction  fees and certain
charges for  securities  transactions.  All customary  fees of the custodian are
paid by the Fund.



                 COMPENSATION TO THE ADVISERS AND ADMINISTRATORS

Information  is provided in this  Statement of  Additional  Information  and the
Prospectus  concerning the Advisers and  Administrator and their agreements with
the Fund.  The amounts paid to such  persons  during the last three fiscal years
or, if  shorter,  the period  during  which the entity was  retained  to provide
services to the Fund are as follows:

<PAGE>

<TABLE>
<CAPTION>
Name of Entity                                                 Fees Paid by the Fund
<S>                                                            <C>                <C>               <C>
                                                               2002               2003              2004

Boulder Investment Advisers, LLC

Stewart Investment Advisers

Fund Administrative Services, LLC                              *                  *                 *

Investors Bank & Trust Company                                 --                 --                $_**
</TABLE>


*Prior to February 1, 2004, from fees it received under the prior administrative
agreement  between FAS and the Fund, FAS was required to pay  substantially  all
fees  respecting  services  provided  to the  Fund  by  any  sub-administrators,
custodian or transfer agent. Under this arrangement, out of the funds identified
in the  Table  above,  FAS paid  such  outsourced  service  providers  $_______,
$_______ and $______ during fiscal year 2002, 2003 and 2004, respectively.  At a
regular  meeting of directors held on January 23, 2004, the Board approved a new
administrative agreement where by the Fund would separately pay FAS and all such
service providers.

** Investors Bank began providing administration services to the Fund on October
1, 2004.



        FACTORS CONSIDERED BY THE INDEPENDENT DIRECTORS IN APPROVING THE
                         INVESTMENT ADVISORY AGREEMENTS

The 1940 Act requires that a fund's investment  advisory  agreements be approved
annually by both the Board and a majority of the  Independent  Directors  voting
separately.  The  Independent  Directors have  determined  that the terms of the
Fund's  investment  advisory  agreements  are fair and  reasonable  and that the
contracts are in the Fund's best interest.  The  Independent  Directors  believe
that the  investment  advisory  agreements  will  enable  the Fund to enjoy high
quality investment advisory services at a cost they deem appropriate, reasonable
and in the  best  interests  of the Fund and its  shareholders.  At a  regularly
scheduled  meeting held on January 21, 2005, the Directors,  by a unanimous vote
(including a separate vote of the Independent  Directors),  approved the renewal
of the Advisory Agreements.

FACTORS  CONSIDERED.  Generally,  the Board  considered  a number of  factors in
renewing the Advisory Agreements including,  among other things, (i) the nature,
extent and quality of services to be furnished by the Advisers to the Fund; (ii)
the investment  performance of the Fund compared to relevant  market indices and
the  performance  of peer groups of  closed-end  investment  companies  pursuing
similar strategies;  (iii) the advisory fees and other expenses paid by the Fund
compared to those of similar funds managed by other  investment  advisers;  (iv)
the profitability to the Advisers of their investment advisory relationship with
the Fund;  (v) the extent to which  economies  of scale would be realized as the
Fund grows and whether fee levels  reflect any economies of scale;  (vi) support
of the  Advisers  by the Fund's  principal  shareholders;  (vii) the  historical
relationship  between  the Fund and the  Advisers,  and (viii) the  relationship
between the Advisers and its affiliated  service  provider,  FAS. The Board also
reviewed  the  ability of the  Advisers  to provide  investment  management  and
supervision  services  to the Fund,  including  the  background,  education  and
experience  of the key  portfolio  management  and  operational  personnel,  the
investment  philosophy and decision-making  process of those professionals,  and
the ethical standards maintained by the Advisers.

DELIBERATIVE  PROCESS.  To assist the Board in its  evaluation of the quality of
the Advisers'  services and the  reasonableness  of the Advisers' fees under the
Advisory  Agreements,  the Board received a memorandum  from  independent  legal
counsel to the Independent  Directors  discussing the factors generally regarded
as appropriate to consider in evaluating  investment  advisory  arrangements and
the duties of directors in approving such  arrangements.  In connection with its
evaluation,  the Board also requested, and received,  various materials relating
to the  Advisers'  investment  services  under the  Advisory  Agreements.  These
materials included a report prepared by Lipper,  Inc.  ("Lipper")  comparing the
Fund's performance, advisory fees and expenses to a group of funds determined to
be most  similar  to the Fund  (the  "Peer  Group")  and a broader  universe  of
relevant  funds (the  "Universe"),  in each case as  determined  by Lipper.  The
Lipper  report also included a  performance  comparison  for the Fund against an
appropriate  index. In addition,  the Board received  reports and  presentations
from the Advisers that described,  among other things,  the Advisers'  financial
condition,  profitability  from its  relationship  with the  Fund,  soft  dollar
commission  and  trade  allocation  policies,   organizational   structure,  and
compliance  policies  and  procedures.  The Board  also  considered  information
received from the Advisers throughout the year, including investment performance
and expense ratio reports for the Fund.

In advance of the January 21, 2005 meeting,  the  Independent  Directors  held a
special  telephonic  meeting  with  counsel  to the Fund and  independent  legal
counsel to the Independent  Directors.  The principal purpose of the meeting was
to discuss  the  renewal of the  Advisory  Agreements  and review the  materials
provided  to the Board by the  Advisers  in  connection  with the annual  review
process. As a result of these discussions,  the Independent  Directors requested
that the  Advisers  provide  supplemental  materials  to assist the Board in its
evaluation of the Advisory Agreements.  The Board held additional discussions at
the January 21, 2005 Board meeting,  which included a private  session among the
Independent  Directors and their independent legal counsel at which no employees
or representatives of the Advisers were present.

<PAGE>

BOARD   CONSIDERATIONS.   The   information   below   summarizes   the   Board's
considerations  in connection with its approval of the Advisory  Agreements.  In
deciding to approve the Advisory Agreements, the Board did not identify a single
factor as  controlling  and this  summary  does not  describe all of the matters
considered.  However,  the  Board  concluded  that each of the  various  factors
referred to below favored such approval.

     Nature,  Extent and Quality of the  Services  Provided;  Ability to Provide
Services.  The  Board  received  and  considered  various  data and  information
regarding the nature, extent and quality of services provided to the Fund by the
Advisers under the Advisory  Agreements.  Each Adviser's most recent  investment
adviser  registration form on the Securities and Exchange  Commission's Form ADV
was provided to the Board,  as were the responses of the Advisers to information
requests  submitted to the Advisers by the Independent  Directors  through their
independent legal counsel. The Board reviewed and analyzed the materials,  which
included  information  about the  background,  education  and  experience of the
Advisers' key portfolio  management and operational  personnel and the amount of
attention devoted to the Fund by the Advisers' portfolio  management  personnel.
In this regard,  it was noted that the Advisers'  only clients are the Fund, one
other  registered  investment  company  (Boulder Total Return Fund,  Inc.) and a
charitable foundation affiliated with the Horejsi family. Accordingly, the Board
was  satisfied  that  the  Advisers'  investment  personnel,  including  Stewart
Horejsi, the Fund's principal portfolio manager, devote a significant portion of
their time and attention to the success of the Fund and its investment strategy.
The  Board  also  considered  the  Advisers'   recently  enhanced  policies  and
procedures for ensuring  compliance with applicable laws and regulations.  Based
on the above factors,  the Board concluded that it was generally  satisfied with
nature,  extent and quality of the investment  advisory services provided to the
Fund by the Advisers, and that the Advisers possessed the ability to continue to
provide these services to the Fund in the future.

     Investment Performance.  The Board considered the investment performance of
the Fund since January 2002,  when the Advisers  became the investment  managers
for the Fund, as compared to both relevant  indices and the  performance  of the
Fund's  peer group  universe.  The Board noted  favorably  that for the one- and
three-year  periods ending December 31, 2004, the Fund's  performance based upon
total return ranked in the second quintile of its Universe (i.e.,  the upper 40%
of the funds in the Universe),  and had  outperformed  the Standard & Poor's 500
index,  the  Fund's  primary  relevant  benchmark,  as  well  as the  Dow  Jones
Industrial  Average and the Nasdaq Composite,  the Fund's secondary  benchmarks.
The  Board   acknowledged   that  the  Universe   included  both  leveraged  and
non-leveraged closed-end funds to provide a more statistically significant group
for  comparison  purposes,  even though the Fund is leveraged  and comparing the
Fund only to Funds that use  leverage  may yield a different  result.  The Board
also noted that the investment  performance  for the Fund continued the superior
investment  performance  record achieved by Mr. Horejsi prior to his association
with the Fund in managing his family's extensive investment portfolio.  Based on
these  factors,  the  Board  concluded  that  the  overall  performance  results
supported the renewal of the Advisory Agreements.

     Costs of  Services  Provided  and  Profits  Realized  by the  Advisers.  In
evaluating the costs of the services  provided to the Fund by the Advisers,  the
Board  received  statistical  and other  information  regarding the Fund's total
expense  ratio  and  its  various  components,  including  management  fees  and
investment-related  expenses.  This  information  included a  comparison  of the
Fund's  various  expenses  to  the  Peer  Group  and  the  Universe.  The  Board
acknowledged that the level of fees charged by the Advisers is at the higher end
of the  spectrum of fees charged by similarly  situated  investment  advisers of
closed-end funds. The Fund's management fee expense ranked in the fifth quintile
of the nine funds  included in the Peer Group and in the fourth  quintile of the
Universe.  The Board noted that the Fund's  shareholders had removed most of the
Fund's investment  limitations,  resulting in a much broader (and more difficult
to  assess)  universe  of  investment  possibilities  for the  Fund  than  might
otherwise be the case for other  "sector" or "industry"  oriented  funds,  which
requires  a greater  degree  of  portfolio  management  skill on the part of the
Advisers. The Board also considered that the Advisers do not participate in soft
dollar or directed brokerage  transactions.  Instead, the Advisers bear the cost
of third party  research  utilized by the Advisers,  increasing  the cost to the
Advisers of providing investment  management services to the Fund and decreasing
the  Fund's  transaction  expenses.  It was also noted  that the  Advisers  have
historically  waived fees when the Fund held  significant  levels of un-invested
cash.

The Board also obtained detailed information regarding the overall profitability
of the Advisers and the combined  profitability  of the Advisers and FAS,  which
acts as co-administrator  for the Fund. The combined  profitability  information
was  obtained to assist the Board in  determining  the  overall  benefits to the
Advisers  from their  relationship  to the Fund.  Based on its  analysis of this
information,  the  Board  determined  that the  level of  profits  earned by the
Advisers from managing the Fund bear a reasonable  relationship  to the services
rendered.

Based on these  factors,  the Board  concluded  that the fee under the  Advisory
Agreements  was  reasonable  and fair in light of the nature and  quality of the
services provided by the Advisers.

<PAGE>

     Economies of Scale. The Board considered  whether there have been economies
of scale  with  respect  to the  management  of the Fund,  whether  the Fund has
appropriately  benefited from any economies of scale, and whether the management
fee rate is  reasonable  in relation to the Fund's  assets and any  economies of
scale that may exist.  Based on the relatively small size of the Fund, the Board
determined  that no  meaningful  economies of scale would be realized  until the
Fund achieved  significantly  higher asset levels. The Board also noted that the
Advisers' internal costs of providing investment management services to the Fund
had increased, in part due to administrative burdens and expenses resulting from
recent  legislative and regulatory  actions.  Based on these factors,  the Board
concluded that the absence of  breakpoints  in the Fund's  current  advisory fee
schedule was acceptable.

     Shareholder  Support and Historical  Relationship  with the Fund. The Board
placed  considerable  weight on the views of the  Fund's  largest  shareholders,
which are affiliated with Mr. Horejsi and the Advisers. As of December 31, 2004,
these  shareholders  held  approximately  21% of the Fund's  outstanding  common
shares,  representing  approximately $17 million of the Fund's net assets of $90
million,  excluding  leverage,  on that  date.  The Board  understands  from Mr.
Horejsi that these  shareholders  are supportive of the Advisers and the renewal
of the Advisory Agreements.  The Board also noted that the Fund had not received
any negative feedback from other Fund shareholders with respect to the levels of
investment management fees and expenses experienced by the Fund.

APPROVAL.  The Board based its  decision to approve the renewal of the  Advisory
Agreements  on a  careful  analysis,  in  consultation  with  Fund  counsel  and
independent counsel for the Independent  Directors,  of these and other factors.
In approving the Advisory Agreements,  the Board concluded that the terms of the
Fund's investment  advisory  agreements are reasonable and fair and that renewal
of the  Advisory  Agreements  is in the  best  interests  of the  Fund  and  its
shareholders.



                            DURATION AND TERMINATION

The terms of the  Advisory  Agreements  were  approved by the Board at a regular
meeting of the Board held on  January  21,  2005,  including  a majority  of the
Directors  who are not parties to the agreement or  "interested  persons" of any
such party (as such term is defined in the 1940 Act).

Each Advisory  Agreement  will continue in effect  without a term so long as its
continuation is specifically  approved at least annually by both (i) the vote of
a majority  of the Board or the vote of a  majority  of the  outstanding  voting
securities of the Fund (as such term is defined in the 1940 Act) and (ii) by the
vote  of a  majority  of the  directors  who are not  parties  to such  Advisory
Agreement or interested persons (as such term is defined in the 1940 Act) of any
such party, cast in person at a meeting called for the purpose of voting on such
approval.  Any of the Advisory  Agreements  may be  terminated as a whole at any
time by the  Fund,  without  the  payment  of any  penalty,  upon  the vote of a
majority of the Board or a majority of the outstanding  voting securities of the
Fund or by the Advisers on 60 days' written notice by either party to the other.
Except as otherwise provided by order of the SEC or any rule or provision of the
1940 Act, each of the Advisory  Agreements will terminate  automatically  in the
event of its  assignment  (as such term is defined in the 1940 Act and the rules
thereunder).


                         POTENTIAL CONFLICTS OF INTEREST

The Fund is managed by the Advisers,  who also serve as  investment  advisers to
another  closed-end  investment  company  and at least  one other  account  with
investment  objectives  identical or similar to those of the Fund.  Mr.  Horejsi
also manages a substantial  portfolio of securities for the Horejsi  Affiliates.
Securities  frequently  meet the investment  objectives of the Fund, the Horejsi
Affiliates  and such other funds and  accounts.  In such cases,  the decision to
recommend  a purchase to one fund or account  rather than  another is based on a
number of  factors.  The  determining  factors  in most  cases are the amount of
securities of the issuer then outstanding, the value of those securities and the
market for them.  Other  factors  considered in the  investment  recommendations
include  other  investments  that  each  fund  or  account  presently  has  in a
particular  industry and the  availability  of investment  funds in each fund or
account. It is possible that at times identical  securities will be held by more
than one fund and/or account. However,  positions in the same issue may vary and
the length of time that any fund or account may choose to hold its investment in
the same issue may likewise vary.

To the  extent  that  more  than one of the  funds or  accounts  managed  by the
Advisers seeks to acquire the same security at about the same time, the Fund may
not be able to acquire as large a position in such  security as it desires or it
may have to pay a higher price for the  security.  However,  with respect to the
Horejsi  Affiliates and the other private account  managed by the Advisers,  the
Horejsi  Affiliates  and such other private  account have consented to allow the
funds managed by the Adviser to complete  their  transactions  in any particular
security  before the Horejsi  Affiliates or such other  private  account will be
allowed to  transact  in such  security,  thus  giving the funds  managed by the
Advisers the first opportunity to trade in a particular  security.  The Fund may
not be able to  obtain  as large an  execution  of an order to sell or as high a
price for any particular  portfolio  security if the Advisers  decide to sell on
behalf of another  account the same portfolio  security at the same time. On the
other hand, if the same  securities  are bought or sold at the same time by more
than one fund or account,  the resulting  participation  in volume  transactions
could produce better executions for the Fund. In the event more than one account
purchases or sells the same  security on a given date,  the  purchases and sales
will normally be made as nearly as practicable on a pro rata basis in proportion
to the amounts  desired to be  purchased or sold by each  account.  Although the
other fund  managed  by the  Advisers  may have the same or  similar  investment
objectives and policies as the Fund, its portfolio does not generally consist of
the same  investments  as the Fund and its  performance  results  are  likely to
differ from those of the Fund.

<PAGE>

                                  PROXY VOTING

The Board has  delegated  to BIA the  authority to vote proxies on behalf of the
Fund.  The Board has approved the proxy voting  guidelines  of the Fund and will
review the guidelines and suggest changes they deem advisable.  A summary of the
Fund's and BIA's proxy  voting  policies  and  procedures  are  attached to this
Statement  of  Additional  Information  as  Appendices  B and  C,  respectively.
Information   regarding  how  the  Fund  voted  proxies  relating  to  portfolio
securities  during the most recent  12-month  period  ended June 30 is available
without charge,  upon request, by calling  1-800-_______,  and on the Securities
and Exchange Commission's website, at www.sec.gov.


                                 CODE OF ETHICS

The Fund and the Advisers  have adopted a joint code of ethics  pursuant to Rule
17j-1  under  the  1940  Act  that is  applicable  to  officers,  directors  and
designated  employees of the Fund and the Advisers,  as applicable (the "Code of
Ethics").  The Code of Ethics  permits  such  personnel  to  engage in  personal
securities transactions for their own account,  including securities that may be
purchased  or held by the Fund,  and is designed to prescribe  means  reasonably
necessary to prevent  conflicts  of interest  from  arising in  connection  with
personal  securities  transactions.  The Code of Ethics is on file with,  and is
available from, the Securities and Exchange  Commission's  Public Reference Room
in Washington,  D.C.  Information on the operation of the Public  Reference Room
may be obtained  by calling  the  Commission  at  1-(202)-942-8090.  The Code of
Ethics is also  available  on the EDGAR  database on the  Commission's  internet
website at  http://www.sec.gov.  Copies of the Code of Ethics  may be  obtained,
after paying a duplicating  fee, by electronic  request to the following  e-mail
address:  publicinfo@sec.gov,  or by writing the  Commission's  Public Reference
Section, Washington, D.C. 20549-0102.


        PORTFOLIO TRANSACTIONS, BROKERAGE ALLOCATION AND OTHER PRACTICES

All orders for the purchase or sale of portfolio securities are placed on behalf
of the Fund by the  Advisers  pursuant to  authority  contained  in the Advisory
Agreements. The Advisers seek best execution in selecting brokers and dealers to
effect  the  Fund's  transactions  and  negotiating  prices  and  any  brokerage
commissions.  The Fund may purchase  certain money market  instruments  directly
from an issuer,  in which case no commissions or discounts are paid. No separate
brokerage commission is typically paid on bond transactions, which are typically
executed on a principal basis, in contrast to common stock  transactions,  where
brokerage commissions are the norm. The Fund paid $______,  $______, and $______
in brokerage  commissions for the fiscal years ended November 30, 2002, 2003 and
2004, respectively.

The Advisers are  responsible for effecting the Fund's  securities  transactions
and will do so in a manner it deems fair and reasonable to  shareholders  of the
Fund and not according to any formula.  The Advisers' primary  considerations in
selecting  the manner of  executing a  securities  transaction  for the Fund are
prompt execution of orders, the size and breadth of the market for the security,
the reliability,  integrity, financial condition and execution capability of the
firm,  the  difficulty  in  executing  the order,  and the best net  price.  The
Advisers have established procedures whereby it monitors, periodically evaluates
and reports to the Board the cost and quality of execution  services provided by
brokers  selected by the  Advisers  to execute  transactions  for the Fund.  The
evaluation is made  primarily  based on a comparison of  commissions  charged by
other broker with similar capabilities and trade execution.

There are many  instances  when, in the judgment of the Advisers,  more than one
firm can offer  comparable  execution  services.  In selecting among such firms,
consideration  may be given to those  firms  which  supply  research  and  other
services in addition to execution services, although the Fund does not typically
rely on such research. The Advisers have adopted a policy against using any kind
of soft dollar  arrangements.  The Advisers utilize  purchased  research only in
regards to the REIT  industry,  but do not use soft dollars as a means of paying
for such research.  Rather,  the Advisers have arranged that a higher commission
would be paid only with regard to REIT trades that  involve  REITs  covered by a
particular  research  company,  in which  case the Fund pays only the  amount of
commission  typically  paid to other brokers and the Advisers pay any portion of
such commission that exceeds this typical brokerage commission.  This policy has
been  disclosed  to and  approved  by the Board.  During  the fiscal  year ended
November 30, 2004,  the  Advisers  directed  $10,690,854  in  transactions  with
related  commissions  of $14,206 to Green  Street  Advisers for the REIT related
research  described  above.  Of the  $14,206  in  commissions  related  to these
transactions, the Advisers reimbursed the Fund for $7,103, the portion which the
Advisers  deemed to be in excess of the  commissions  the Fund would likely have
paid to a broker which provided best execution.

<PAGE>

Although the Advisory  Agreements contain no restrictions on portfolio turnover,
it is not the Fund's  policy to engage in  transactions  with the  objective  of
seeking profits from short-term  trading.  The annual portfolio turnover rate of
the Fund is generally less than 50%,  excluding  securities having a maturity of
one year or less.  Because  it is  difficult  to  accurately  predict  portfolio
turnover  rates,  actual  turnover  may be  higher or  lower.  Higher  portfolio
turnover results in increased Fund expenses,  including  brokerage  commissions,
dealer mark-ups and other transaction costs on the sale of securities and on the
reinvestment in other  securities.  For the fiscal years ended November 30, 2003
and November 30, 2004,  the Fund's  portfolio  turnover  rates were 40% and 33%,
respectively.


       ADDITIONAL INFORMATION CONCERNING THE AUCTIONS FOR PREFERRED SHARES

GENERAL.  The Depository  Trust Company ("DTC" or the  "Securities  Depository")
will act as the Securities  Depository with respect to the Preferred Shares. One
certificate  for all of the  Preferred  Shares will be registered in the name of
Cede & Co., as nominee of the Securities Depository.  Such certificate will bear
a legend to the effect that it is issued subject to the  provisions  restricting
transfers  of  shares  of  the  Preferred   Shares  contained  in  the  Articles
Supplementary  Creating and Fixing the Rights of Auction Market  Preferred Stock
(the "Articles  Supplementary") which is attached hereto as Appendix D. Prior to
the commencement of the right of holders of the Preferred Shares to elect two of
the Fund's  Directors,  as described under  "Description of Preferred  Shares --
Voting Rights" in the Prospectus, Cede & Co. will be the holder of record of the
Preferred  Shares  and owners of such  shares  will not be  entitled  to receive
certificates  representing their ownership  interest in such shares.  DTC, a New
York-chartered  limited  purpose  trust  company,   performs  services  for  its
participants, some of whom (and/or their representatives) own DTC. DTC maintains
lists of its participants and will maintain the positions (ownership  interests)
held by each such  participant  in the  Preferred  Shares,  whether  for its own
account or as a nominee for another person.

THE AUCTION AGENT.  Deutsche Bank Trust Company  Americas (the "Auction  Agent")
will act as agent for the Fund in connection  with the auctions of the Preferred
Shares  (the  "Auctions").  In  the  absence  of  willful  misconduct  or  gross
negligence  on its part,  the  Auction  Agent  will not be liable for any action
taken,  suffered,  or  omitted  or for any error of  judgment  made by it in the
performance  of its duties under the auction agency  agreement  between the Fund
and the Auction  Agent and will not be liable for any error of judgment  made in
good faith unless the Auction Agent was grossly  negligent in  ascertaining  the
pertinent facts.

The Auction Agent may  conclusively  rely upon, as evidence of the identities of
the holders of the Preferred  Shares,  the Auction Agent's  registry of holders,
and the results of auctions and notices from any broker-dealer ("Broker-Dealer")
that has entered  into an  agreement  with the Auction  Agent (a  "Broker-Dealer
Agreement")  (or other  person,  if  permitted  by the  Fund)  with  respect  to
transfers  described under "The Auction - Secondary Market Trading and Transfers
of Preferred  Shares" in the  Prospectus  and notices from the Fund. The Auction
Agent is not  required  to accept any such  notice  for an auction  unless it is
received by the Auction Agent by 3:30 p.m.,  New York City time, on the business
day preceding such Auction.

The Auction Agent may terminate its auction agency  agreement with the Fund upon
notice to the Fund on a date no earlier than 60 days after such  notice.  If the
Auction Agent should resign, the Fund will use its best efforts to enter into an
agreement with a successor auction agent containing substantially the same terms
and conditions as the auction agency agreement.  The Fund may remove the Auction
Agent  provided that prior to such removal the Fund shall have entered into such
an agreement with a successor auction agent.

BROKER-DEALERS.  The Auction Agent, after each Auction for the Preferred Shares,
will pay to each  Broker-Dealer,  from  funds  provided  by the Fund,  a service
charge at the  annual  rate:  (i) in the case of any  Auction  date  immediately
preceding a dividend  period other than a special  dividend  period of less than
one year,  the product of (A) a fraction the numerator of which is the number of
days in such dividend period  (calculated by counting the date of original issue
of such shares to but excluding  the next  succeeding  dividend  payment date of
such shares) and the denominator of which is 360, times (B) 1/4 of 1%, times (C)
$25,000  times (D) the sum of the  aggregate  number  of  shares of  outstanding
Preferred  Shares for which the Auction is conducted and (ii) in the case of any
special  dividend  period of one year or more,  the amount  determined by mutual
consent  of the Fund  and any  such  Broker-Dealers  and  shall be based  upon a
selling  concession  that would be  applicable  to an  underwriting  of fixed or
variable rate  Preferred  Shares with a similar final  maturity or variable rate
dividend period,  respectively,  at the commencement of the dividend period with
respect  to such  Auction.  For the  purposes  of the  preceding  sentence,  the
Preferred  Shares will be placed by a Broker-Dealer  if such shares were (a) the
subject of hold orders deemed to have been submitted to the Auction Agent by the
Broker-Dealer and were acquired by such  Broker-Dealer for its customers who are
beneficial owners or (b) the subject of an order submitted by such Broker-Dealer
that is (i) a submitted bid of an existing  holder that resulted in the existing
holder  continuing  to hold such  shares as a result  of the  Auction  or (ii) a
submitted  bid of a potential  bidder  that  resulted  in the  potential  holder
purchasing such shares as a result of the Auction or (iii) a valid hold order.

<PAGE>

The Fund may request the Auction  Agent to terminate  one or more  Broker-Dealer
agreements at any time, provided that at least one Broker-Dealer agreement is in
effect after such termination.

Each  Broker-Dealer  Agreement  provides  that a  Broker-Dealer  (other  than an
affiliate of the Fund) may submit orders in Auctions for its own account, unless
the Fund  notifies  all  Broker-Dealers  that they may no longer do so, in which
case Broker-Dealers may continue to submit hold orders and sell orders for their
own  accounts.  Any  Broker-Dealer  that is an  affiliate of the Fund may submit
orders in Auctions,  but only if such orders are not for its own  account.  If a
Broker-Dealer submits an order for its own account in any Auction, it might have
an advantage  over other bidders  because it would have  knowledge of all orders
submitted by it in that Auction;  such  Broker-Dealer,  however,  would not have
knowledge of orders submitted by other Broker-Dealers in that Auction.


                            RATING AGENCY GUIDELINES

The descriptions of Fitch, Inc.  ("Fitch") and Moody's Investors  Service,  Inc.
("Moody's")  rating guidelines  ("Rating Agency  Guidelines")  contained in this
Statement  of  Additional  Information  do not  purport to be  complete  and are
subject to and  qualified  in their  entireties  by  reference  to the  Articles
Supplementary,  a copy of which is attached as Appendix C to this  Statement  of
Additional  Information.  A copy of the  Articles  Supplementary  is filed as an
exhibit to the registration statement of which the prospectus and this Statement
of Additional  Information  are a part and may be inspected,  and copies thereof
may be obtained, as described in the prospectus.

The composition of the Fund's portfolio reflects the Rating Agency Guidelines in
connection  with the Fund's  receipt of a rating of "Aaa" and "AAA" from Moody's
and  Fitch,  respectively,   for  the  Preferred  Shares.  These  Rating  Agency
Guidelines  relate,  among other things,  to credit quality  characteristics  of
issuers and  diversification  requirements  and specify various discount factors
for  different  types of securities  (with the level of discount  greater as the
rating of a security becomes lower). Under the Rating Agency Guidelines, certain
types of securities in which the Fund may otherwise  invest  consistent with its
investment  strategy are not eligible for  inclusion in the  calculation  of the
discounted value of the Fund's portfolio. Such instruments include, for example,
private  placements  (other than Rule 144A  securities) and other securities not
within the Rating Agency Guidelines. Accordingly, although the Fund reserves the
right to invest in such securities to the extent set forth herein, they have not
and it is anticipated that they will not constitute a significant portion of the
Fund's portfolio.

The Rating Agency  Guidelines  require that the Fund  maintain  assets having an
aggregate  discounted  value,  determined  on the  basis  of the  Rating  Agency
Guidelines,  greater than the aggregate liquidation  preference of the Preferred
Shares plus specified liabilities,  payment obligations and other amounts, as of
periodic  valuation dates. The Rating Agency Guidelines also require the Fund to
maintain  asset  coverage  required  by the 1940 Act as a  condition  to  paying
dividends or other  distributions  on the Fund's  common  shares.  The effect of
compliance with the Rating Agency  Guidelines may be to cause the Fund to invest
in higher quality assets and/or to maintain relatively  substantial  balances of
highly  liquid  assets  or to  restrict  the  Fund's  ability  to  make  certain
investments  that  would  otherwise  be  deemed  potentially  desirable  by  the
Advisers.  The Rating Agency  Guidelines are subject to change from time to time
with the consent of the relevant  rating  agency and would not apply if the Fund
in the  future  elected  not to use  financial  leverage  consisting  of  senior
securities  rated  by  one or  more  rating  agencies,  although  other  similar
arrangements  might apply with respect to other senior  securities that the Fund
may issue.

The Fund intends to maintain,  at specified  times,  a discounted  value for its
portfolio at least equal to the amount specified by each rating agency.  Moody's
and Fitch have each established  separate guidelines for determining  discounted
value.  To the extent any  particular  portfolio  holding  does not  satisfy the
applicable Rating Agency's Guidelines,  all or a portion of such holding's value
will not be included in the calculation of discounted  value (as defined by such
rating  agency).  The Rating Agency  Guidelines do not impose any limitations on
the  percentage  of Fund's  assets that may be invested in holdings not eligible
for  inclusion  in  the  calculation  of the  discounted  value  of  the  Fund's
portfolio.  The amount of such assets  included in the Fund's  portfolio  at any
time  may  vary   depending   upon  the   rating,   diversification   and  other
characteristics  of the Fund's  assets that are  eligible  for  inclusion in the
discounted value of the Fund's portfolio under the Rating Agency Guidelines. For
a more detailed  description of the Rating Agency  Guidelines,  see the Articles
Supplementary.

<PAGE>

                              REPURCHASE OF SHARES

The  Fund  is  a  closed-end   investment   company  and  therefore  its  common
shareholders  do not have the right to cause the Fund to  redeem  their  shares.
Instead,  the Fund's common shares trade in the open market at a price that is a
function of several  factors,  including  net asset value,  dividend  stability,
relative demand for and supply of such shares in the market,  general market and
economic  conditions,  dividend  stability,  dividend  levels (which are in turn
affected  by  expenses),  and other  factors.  Because  shares  of a  closed-end
investment  company may frequently trade at prices lower than net asset value (a
"Discount"),  the Board may  consider  actions  that might be taken to reduce or
eliminate any material  Discount in respect of common shares,  which may include
the repurchase of such shares in the open market or in private transactions, the
making of a tender offer for such shares at net asset value,  or the  conversion
of the Fund to an open-end investment company.  The Board may not decide to take
any of  these  actions.  In  addition,  there  can be no  assurance  that  share
repurchases or tender offers, if undertaken, will reduce any Discount.

Once the Fund issues the  Preferred  Shares,  the Fund's  ability to  repurchase
shares of, or tender for, its common stock may be limited by the asset  coverage
requirements  of the 1940  Act and by  asset  coverage  and  other  requirements
imposed by various  rating  agencies.  No assurance  can be given that the Board
will decide to undertake  share  repurchases or tenders or, if undertaken,  that
repurchases  and/or tender offers will result in the Fund's common stock trading
at a price  that is close to,  equal to or above net asset  value.  The Fund may
borrow to finance repurchases and/or tender offers. Any tender offer made by the
Fund for its shares may be at a price  equal to or less than the net asset value
of such shares.  Any service fees incurred in  connection  with any tender offer
made by the Fund  will be borne by the  Fund  and  will not  reduce  the  stated
consideration to be paid to tendering shareholders.

Subject  to its  investment  limitations,  the Fund may  borrow to  finance  the
repurchase  of  common  shares  or to  make  a  tender  offer.  Interest  on any
borrowings to finance share repurchase  transactions or the accumulation of cash
by the Fund in  anticipation  of share  repurchases  or tenders  will reduce the
Fund's net income. Any share repurchase, tender offer or borrowing that might be
approved by the Board would have to comply  with the  Exchange  Act and the 1940
Act and the rules and regulations under each of those Acts.

Although the  decision to take action in response to a Discount  will be made by
the Board at the time it considers such issue, it is the Board's present policy,
which may be changed by the Board, not to authorize repurchases of common shares
or a tender  offer for such  shares if (1) such  transactions,  if  consummated,
would (a) result in the  delisting  of the common  shares from the NYSE,  or (b)
impair the Fund's status as a regulated investment company under the Code (which
would make the Fund a taxable  entity,  causing the Fund's income to be taxed at
the  corporate  level in addition to the  taxation of  shareholders  who receive
dividends from the Fund) or as a registered  closed-end investment company under
the 1940 Act; (2) the Fund would not be able to liquidate  portfolio  securities
in an orderly manner and  consistent  with the Fund's  investment  objective and
policies  in order  to  repurchase  shares;  or (3)  there  is,  in the  Board's
judgment,  any (a) material legal action or proceeding  instituted or threatened
challenging such transactions or otherwise  materially  adversely  affecting the
Fund, (b) general  suspension of or limitation on prices for trading  securities
on the  NYSE,  (c)  declaration  of a banking  moratorium  by  Federal  or state
authorities  or any  suspension  of  payment  by U.S.  banks in  which  the Fund
invests,  (d)  material  limitation  affecting  the Fund or the  issuers  of its
portfolio  securities by Federal or state authorities on the extension of credit
by lending institutions or on the exchange of foreign currency, (e) commencement
of war, armed  hostilities or other  international or national calamity directly
or indirectly involving the United States, or (f) other event or condition which
would have a material  adverse effect  (including any adverse tax effect) on the
Fund or its shareholders if shares were repurchased. The Board may in the future
modify these conditions in light of experience.

The  repurchase by the Fund of its common shares at prices below net asset value
will result in an  increase  in the net asset value of those  shares that remain
outstanding.  However,  there can be no  assurance  that  share  repurchases  or
tenders at or below net asset  value will  result in the  Fund's  common  shares
trading at a price equal to their net asset value.  Nevertheless,  the fact that
the Fund's shares may be the subject of repurchase or tender offers at net asset
value  from  time to time,  or that the Fund  may be  converted  to an  open-end
company,  may be helpful in reducing  any spread  between  market  price and net
asset value that might otherwise exist.

In  addition,  a purchase  by the Fund of its common  shares will  decrease  the
Fund's total assets, which would likely have the effect of increasing the Fund's
expense  ratio.  Any  purchase  by the Fund of its common  shares at a time when
preferred  shares are outstanding  will increase the leverage  applicable to the
outstanding  common shares then remaining and decrease the asset coverage of the
preferred shares.

Before deciding  whether to take any action if the common shares trade below net
asset value, the Board would likely consider all relevant factors, including the
extent and duration of the Discount, the liquidity of the Fund's portfolio,  the
impact of any  action  that might be taken on the Fund or its  shareholders  and
market considerations.  Based on these considerations, even if the Fund's shares
should trade at a Discount, the Board may determine that, in the interest of the
Fund and its shareholders, no action should be taken.

<PAGE>

                           FEDERAL INCOME TAX MATTERS

The  following  is a summary  discussion  of  certain  U.S.  federal  income tax
consequences  that may be  relevant  to a  shareholder  acquiring,  holding  and
disposing of Preferred  Shares of the Fund. This discussion  addresses only U.S.
federal income tax  consequences to U.S.  shareholders  who hold their shares as
capital  assets  and  does  not  address  all of the  U.S.  federal  income  tax
consequences  that may be relevant to particular  shareholders in light of their
individual  circumstances.  This  discussion  also  does  not  address  the  tax
consequences  to  shareholders  that are  subject to special  rules,  including,
without  limitation,  banks and  financial  institutions,  insurance  companies,
dealers in securities or foreign currencies, foreign shareholders, tax-exempt or
tax-deferred  plans,   accounts,   or  entities,  or  investors  who  engage  in
constructive sale or conversion  transactions.  In addition, the discussion does
not address state,  local or foreign tax  consequences,  and it does not address
any tax  consequences  other  than U.S.  federal  income tax  consequences.  The
discussion  reflects  applicable tax laws of the United States as of the date of
this  Statement  of  Additional  Information,  which tax laws may be  changed or
subject to new  interpretations by the courts,  Treasury or the Internal Revenue
Service  (the  "IRS")  retroactively  or  prospectively.  No  attempt is made to
present a detailed explanation of all U.S. federal income tax concerns affecting
the Fund or its  shareholders,  and the  discussion  set forth  herein  does not
constitute tax advice.  Investors are urged to consult their own tax advisers to
determine  the  specific  tax  consequences  to them of  investing  in the Fund,
including the applicable  federal,  state, local and foreign tax consequences to
them and the effect of possible changes in tax laws.

As required by U.S. Treasury Regulations governing tax practice,  you are hereby
advised that any written tax advice contained herein was not written or intended
to be used (and  cannot be used) by any  taxpayer  for the  purpose of  avoiding
penalties that may be imposed under the Code.

The  advice  was  prepared  to  support  the   promotion  or  marketing  of  the
transactions or matters addressed by the written advice.

Any person  reviewing this discussion  should seek advice based on such person's
particular circumstances from an independent tax adviser.

The Fund has  qualified  and  elected  to be treated  each year as a  "regulated
investment company" under Subchapter M of the Code and to comply with applicable
distribution  requirements so that it generally will not pay U.S. federal income
tax on  income  of  the  Fund,  including  net  capital  gains,  distributed  to
shareholders.  In order to  qualify  as a  regulated  investment  company  under
Subchapter M of the Code, which qualification this discussion assumes,  the Fund
must,  among  other  things,  derive at least 90% of its gross  income  for each
taxable year from  dividends,  interest,  payments  with  respect to  securities
loans, gains from the sale or other disposition of stock,  securities or foreign
currencies,  or other income (including gains from options,  futures and forward
contracts)  derived  with  respect to its  business of  investing in such stock,
securities or currencies (the "90% income test").  In addition to satisfying the
requirements  described  above,  the Fund must satisfy an asset  diversification
test in order to qualify as a regulated investment company.  Under this test, at
close of each quarter of the Fund's  taxable  year, at least 50% of the value of
the Fund's assets must consist of cash and cash items  (including  receivables),
U.S. Government securities,  securities of other regulated investment companies,
and  securities  of other  issuers (as to which the Fund must not have  invested
more than 5% of the value of the Fund's  total assets in  securities  of any one
such  issuer  and as to which  the Fund  must not have held more than 10% of the
outstanding  voting securities of any one such issuer),  and no more than 25% of
the value of its total assets may be invested in the securities (other than U.S.
Government securities and securities of other regulated investment companies) of
any one issuer,  or of two or more issuers which the Fund controls and which are
engaged in the same or similar or related trades or businesses.

The American Jobs Creation Act of 2004 (the "2004 Tax Act"), which the President
recently  signed  into  law,  provides  that for  taxable  years of a  regulated
investment  company beginning after October 22, 2004, net income derived from an
interest in a "qualified  publicly traded  partnership," as defined in the Code,
will be treated as  qualifying  income for purposes of the 90% income test,  and
for the  purposes  of the  diversification  requirements  described  above,  the
outstanding  voting securities of any issuer includes the equity securities of a
qualified  publicly  traded  partnership  and no more than 25% of the value of a
regulated investment company's total assets may be invested in the securities of
one or more qualified publicly traded  partnerships.  In addition,  the separate
treatment for publicly traded  partnerships  under the passive loss rules of the
Code  applies  to a  regulated  investment  company  holding  an  interest  in a
qualified  publicly traded  partnership,  with respect to items  attributable to
such interest.

If the Fund  qualifies as a regulated  investment  company and, for each taxable
year, it distributes to its shareholders an amount equal to or exceeding the sum
of (i) 90% of its "investment company taxable income" as that term is defined in
the Code (which includes, among other things,  dividends,  taxable interest, and
the  excess of any net  short-term  capital  gains  over net  long-term  capital
losses, as reduced by certain deductible expenses) and (ii) 90% of the excess of
its gross tax-exempt interest, if any, over certain disallowed  deductions,  the
Fund generally  will not be subject to U.S.  federal income tax on any income of
the Fund, including "net capital gain" (the excess of net long-term capital gain
over net short-term capital loss), distributed to shareholders.  However, if the
Fund has met such  distribution  requirements but chooses not to distribute some
portion  of its  investment  company  taxable  income or net  capital  gain,  it
generally will be subject to U.S. federal income tax at regular  corporate rates
on the amount retained.  The Fund intends to distribute at least annually all or
substantially  all of its  investment  company  taxable  income,  net tax-exempt
interest, and net capital gain. If for any taxable year the Fund did not qualify
as a regulated  investment company, it would be treated as a corporation subject
to U.S.  federal  income tax and all  distributions  out of earnings and profits
would be taxed to shareholders as ordinary income.  In addition,  the Fund could
be required to  recognize  unrealized  gains,  pay taxes and make  distributions
(which could be subject to interest charges) before  requalifying as a regulated
investment company.

<PAGE>

Under the Code,  the Fund will be subject  to a  nondeductible  4% U.S.  federal
excise tax on a portion of its undistributed taxable ordinary income and capital
gains if it fails to meet certain distribution requirements with respect to each
calendar  year.  The Fund intends to make  distributions  in a timely manner and
accordingly  does not expect to be subject to the excise tax,  but as  described
below,  there  can  be no  assurance  that  the  Fund's  distributions  will  be
sufficient to avoid entirely this tax.

Based in part on the lack of any  present  intention  on the part of the Fund to
redeem or purchase  the  Preferred  Shares at any time in the  future,  the Fund
intends to take the position that under  present law the  Preferred  Shares will
constitute  stock of the Fund and  distributions  with respect to the  Preferred
Shares (other than  distributions in redemption of the Preferred Shares that are
treated as exchanges under Section 302(b) of the Code) will constitute dividends
to the  extent of the Fund's  current or  accumulated  earnings  and  profits as
calculated for U.S.  federal income tax purposes.  This view relies in part on a
published  ruling of the IRS stating that certain  preferred  stock,  similar in
many  material  respects  to the  Preferred  Shares,  represents  equity.  It is
possible,  however,  that the IRS might take a contrary position asserting,  for
example, that the Preferred Shares constitute debt of the Fund. If this position
were upheld,  the discussion of the treatment of  distributions  below would not
apply.  Instead  distributions  by the Fund to holders of Preferred Shares would
constitute interest, whether or not such distributions exceeded the earnings and
profits of the Fund, would be included in the income of the recipient, and would
be taxed as ordinary income.

In  general,  assuming  that the  Fund  has  sufficient  earnings  and  profits,
dividends from investment  company taxable income are taxable as ordinary income
and distributions  from net capital gain, if any, that are designated as capital
gain  dividends are taxable as long-term  capital gains for U.S.  federal income
tax  purposes  without  regard to the  length of time the  shareholder  has held
shares of the Fund. Since the Fund's income is derived  primarily from interest,
dividends of the Fund from its investment  company taxable income generally will
not constitute  "qualified  dividend income" for federal income tax purposes and
thus will not be eligible for the favorable  federal  long-term capital gain tax
rates on qualified  dividend income.  In addition,  the Fund's dividends are not
expected to qualify for any dividends-received deduction that might otherwise be
available for certain dividends  received by shareholders that are corporations.
Capital  gain  dividends  distributed  by the  Fund to  individual  shareholders
generally  will  qualify for the maximum 15% U.S.  federal tax rate on long-term
capital  gains.  Under  current  law,  the maximum 15% U.S.  federal tax rate on
qualified  dividend  income and  long-term  capital gains will cease to apply to
taxable years beginning after December 31, 2008.

Distributions  by the Fund in  excess  of the  Fund's  current  and  accumulated
earnings  and  profits  will be  treated as a return of capital to the extent of
(and in  reduction  of) the  shareholder's  tax basis in its shares and any such
amount in excess of that  basis will be treated as gain from the sale of shares,
as discussed below. The U.S. federal income tax status of all distributions will
be reported to shareholders  annually.  If the Fund retains any net capital gain
for a taxable year, the Fund may designate the retained amount as  undistributed
capital gains in a notice to shareholders who, if subject to U.S. federal income
tax on long-term  capital  gains,  (i) will be required to include in income for
U.S. federal income tax purposes, as long-term capital gain, their proportionate
shares of such  undistributed  amount, and (ii) will be entitled to credit their
proportionate  shares  of the tax paid by the Fund on the  undistributed  amount
against their U.S. federal income tax liabilities,  if any, and to claim refunds
to the extent the credit exceeds such liabilities.

Although  dividends  generally  will be treated as  distributed  when paid,  any
dividend  declared  by the  Fund as of a record  date in  October,  November  or
December and paid during the following  January will be treated for U.S. federal
income tax purposes as received by  shareholders  on December 31 of the calendar
year in which it is declared.  In addition,  certain  other  distributions  made
after the close of a taxable year of the Fund may be "spilled  back" and treated
as paid by the Fund  (except  for  purposes  of the 4% excise  tax)  during such
taxable year.  In such case,  shareholders  generally  will be treated as having
received  such  dividends  in the taxable year in which the  distributions  were
actually made.

If the Fund invests in certain pay-in-kind  securities,  zero coupon securities,
deferred interest securities or, in general,  any other securities with original
issue  discount  (or with market  discount if the Fund elects to include  market
discount in income  currently),  the Fund  generally  must accrue income on such
investments for each taxable year,  which generally will be prior to the receipt
of the corresponding cash payments.  However, the Fund must distribute, at least
annually,  all or substantially all of its investment company taxable income and
net tax-exempt  interest,  including such accrued  income,  to  shareholders  to
qualify as a regulated  investment company under the Code and avoid U.S. federal
income  and  excise  taxes.  Therefore,  the  Fund may  have to  dispose  of its
portfolio  securities under  disadvantageous  circumstances to generate cash, or
may have to borrow the cash, to satisfy distribution requirements.

<PAGE>

The Fund may invest  significantly  in debt  obligations  that are in the lowest
rating  categories or are unrated,  including  debt  obligations  of issuers not
currently paying interest or who are in default. Investments in debt obligations
that are at risk of or in default  present  special tax issues for the Fund. Tax
rules are not  entirely  clear  about  issues such as when the Fund may cease to
accrue interest,  original issue discount or market  discount,  when and to what
extent  deductions  may be taken  for bad  debts or  worthless  securities,  how
payments  received  on  obligations  in  default  should  be  allocated  between
principal  and income and whether  exchanges  of debt  obligations  in a workout
context are taxable.  These and other  issues will be addressed by the Fund,  in
the event it  invests  in such  securities,  in order to seek to ensure  that it
distributes  sufficient income to preserve its status as a regulated  investment
company and does not become subject to U.S. federal income or excise tax.

If the Fund utilizes  leverage through  borrowing or issuing preferred shares, a
failure by the Fund to meet the asset coverage  requirements imposed by the 1940
Act or by any rating  organization  that has rated such leverage,  or additional
restrictions  that may be imposed by certain lenders on the payment of dividends
or distributions  potentially  could limit or suspend the Fund's ability to make
distributions  on  its  common  shares.  Such  a  limitation  or  suspension  or
limitation  could  prevent  the  Fund  from  distributing  at  least  90% of its
investment  company  taxable income and net  tax-exempt  interest as is required
under the Code and  therefore  might  jeopardize  the Fund's  qualification  for
taxation as a regulated  investment  company under the Code and/or might subject
the Fund to the 4% excise tax  discussed  above.  Upon any  failure to meet such
asset coverage requirements,  the Fund may, in its sole discretion,  purchase or
redeem  shares of preferred  stock in order to maintain or restore the requisite
asset  coverage  and  avoid  the  adverse  consequences  to  the  Fund  and  its
shareholders of failing to satisfy the distribution requirement. There can be no
assurance,  however,  that any such action would achieve these  objectives.  The
Fund will endeavor to avoid restrictions on its ability to distribute dividends.

For U.S. federal income tax purposes,  the Fund is permitted to carry forward an
unused net capital loss for any year to offset its capital gains, if any, for up
to eight years following the year of the loss. To the extent subsequent  capital
gains are offset by such losses,  they would not result in U.S.  federal  income
tax  liability  to the Fund and are not  expected to be  distributed  as such to
shareholders.

At the time of an investor's  purchase of Fund shares, a portion of the purchase
price may be attributable  to realized or unrealized  appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently,  subsequent
distributions by the Fund with respect to these shares from such appreciation or
income  may be  taxable  to such  investor  even  if the  trading  value  of the
investor's  shares  is,  as a result  of the  distributions,  reduced  below the
investor's cost for such shares and the distributions  economically  represent a
return of a portion of the investment.

Foreign  exchange  gains and  losses  realized  by the Fund in  connection  with
certain  transactions  involving foreign  currency-denominated  debt securities,
certain  options and futures  contracts  relating to foreign  currency,  foreign
currency  forward  contracts,  foreign  currencies,  or payables or  receivables
denominated in a foreign  currency are subject to Section 988 of the Code, which
generally  causes  such gains and losses to be  treated as  ordinary  income and
losses and may affect the  amount,  timing and  character  of  distributions  to
shareholders.  Under Treasury regulations that may be promulgated in the future,
any gains from such  transactions  that are not  directly  related to the Fund's
principal business of investing in stock or securities (or its options contracts
or futures contracts with respect to stock or securities) may have to be limited
in order to enable the Fund to satisfy the 90% income  test.  If the net foreign
exchange loss for a year were to exceed the Fund's  investment  company  taxable
income (computed  without regard to such loss), the resulting  ordinary loss for
such year  would not be  deductible  by the Fund or its  shareholders  in future
years.

Sales and other  dispositions of Fund shares are taxable events for shareholders
that are subject to tax. Shareholders should consult their own tax advisers with
reference to their individual  circumstances to determine whether any particular
transaction  in Fund shares is properly  treated as a sale for tax purposes,  as
the following  discussion assumes,  and the tax treatment of any gains or losses
recognized  in such  transactions.  In  general,  if Fund  shares are sold,  the
shareholder  will  recognize  gain or loss equal to the  difference  between the
amount  realized  on the sale and the  shareholder's  adjusted  tax basis in the
shares sold. Such gain or loss will be treated as long-term capital gain or loss
if the shares sold were held for more than one year and otherwise generally will
be  treated  as  short-term  capital  gain  or  loss.  Any  loss  realized  by a
shareholder  upon the sale or other  disposition  of shares  with a tax  holding
period of six months or less will be treated as a long-term  capital loss to the
extent of any amounts treated as distributions  of long-term  capital gains with
respect to such shares.  Losses on sales or other  dispositions of shares may be
disallowed under "wash sale" rules in the event  substantially  identical shares
of the Fund are  purchased  (including  those made pursuant to  reinvestment  of
dividends  and/or  capital  gains  distributions)  within  a  period  of 61 days
beginning  30 days  before  and  ending  30 days  after a  redemption  or  other
disposition  of  shares.  In such a case,  the  disallowed  portion  of any loss
generally would be included in the U.S. federal tax basis of the shares acquired
in the other investments.  The ability to otherwise deduct capital losses may be
subject to other limitations under the Code.

<PAGE>

The Fund may, at its  option,  redeem the  Preferred  Shares in whole or in part
subject to certain limitations and to the extent permitted under applicable law,
and is required to redeem all or a portion of the Preferred Shares to the extent
required to maintain the Preferred Shares Basic  Maintenance  Amount (as defined
in the  Prospectus)  and the 1940 Act Preferred Share Asset Coverage (as defined
in the  Prospectus).  Gain or  loss,  if any,  resulting  from a  redemption  of
Preferred  Shares  generally  will be  taxed  as gain or loss  from  the sale of
Preferred  Shares under  Section 302 of the Code rather than as a dividend,  but
only  if the  redemption  distribution  (a)  is  deemed  not  to be  essentially
equivalent  to a dividend,  (b) is in  complete  redemption  of a  shareholder's
interest in the Fund, (c) is substantially  disproportionate with respect to the
shareholder,  or (d) with respect to a non-corporate shareholder,  is in partial
liquidation of the shareholder's  interest in the Fund. For the purposes of (a),
(b), and (c) above,  a  shareholder's  ownership of common  shares and Preferred
Shares will be taken into  account and the common  shares and  Preferred  Shares
held by persons who are related to the redeemed  shareholder may also have to be
taken into  account.  If none of the  conditions  (a) through  (d) are met,  the
redemption proceeds may be considered to be a dividend  distribution  taxable as
ordinary  income as  discussed  above.  In  addition,  any  declared  but unpaid
dividends  distributed to  shareholders  in connection with a redemption will be
taxable to shareholders as dividends as described above.

Under Treasury regulations,  if a shareholder  recognizes a loss with respect to
shares of $2 million or more for an  individual  shareholder,  or $10 million or
more for a  corporate  shareholder,  in any  single  taxable  year (or a greater
amount over a combination of years),  the  shareholder  must file with the IRS a
disclosure  statement on Form 8886.  Shareholders  who own portfolio  securities
directly are in many cases excepted from this reporting  requirement  but, under
current  guidance,  shareholders  of  regulated  investment  companies  are  not
excepted. A shareholder who fails to make the required disclosure to the IRS may
be subject to substantial  penalties.  The fact that a loss is reportable  under
these regulations does not affect the legal  determination of whether or not the
taxpayer's  treatment of the loss is proper.  Shareholders  should  consult with
their tax advisers to determine the  applicability of these regulations in light
of their  individual  circumstances.  Options  written or purchased  and futures
contracts  entered into by the Fund on certain  securities,  indices and foreign
currencies, as well as certain forward foreign currency contracts, may cause the
Fund to  recognize  gains or losses  from  marking-to-market  even  though  such
options may not have lapsed, been closed out, or exercised,  or such futures and
forward  contracts  may not have been  performed  or closed  out.  The tax rules
applicable to these  contracts may affect the  characterization  of some capital
gains and  losses  realized  by the Fund as  long-term  or  short-term.  Certain
options,  futures and forward  contracts  relating to foreign  currencies may be
subject to Section 988, as described above, and accordingly may produce ordinary
income or loss.  Additionally,  the Fund may be required to recognize gain if an
option, futures contract, short sale or other transaction that is not subject to
the mark-to-market  rules is treated as a "constructive sale" of an "appreciated
financial  position"  held by the Fund under  Section 1259 of the Code.  Any net
mark-to-market  gains and/or gains from  constructive  sales may also have to be
distributed  to satisfy  the  distribution  requirements  referred to above even
though the Fund may receive no corresponding  cash amounts,  possibly  requiring
the  disposition  of portfolio  securities  or borrowing to obtain the necessary
cash. Losses on certain options,  futures or forward contracts and/or offsetting
positions  (portfolio  securities or other  positions  with respect to which the
Fund's risk of loss is substantially  diminished by one or more options, futures
or forward  contracts)  may also be deferred under the tax straddle rules of the
Code, which may also affect the characterization of capital gains or losses from
straddle  positions and certain successor  positions as long-term or short-term.
Certain tax elections may be available  that would enable the Fund to ameliorate
some adverse effects of the tax rules described in this paragraph. The tax rules
applicable to options,  futures,  forward contracts and straddles may affect the
amount,  timing and character of the Fund's income and gains or losses and hence
of its distributions to shareholders.

The  federal  income tax  treatment  of the Fund's  investment  in  transactions
involving  swaps,  caps,  floors,  and  collars  and  structured  securities  is
uncertain and may be subject to recharacterization by the IRS. To the extent the
tax treatment of such securities or transactions  differs from the tax treatment
expected by the Fund,  the timing or character of income  recognized by the Fund
could  be  affected,  requiring  the Fund to  purchase  or sell  securities,  or
otherwise change its portfolio, in order to comply with the tax rules applicable
to regulated investment companies under the Code.

The IRS has taken the position  that if a regulated  investment  company has two
classes or more of shares, it must designate distributions made to each class in
any year as  consisting  of no more than  such  class's  proportionate  share of
particular  types of income,  including  ordinary income and net capital gain. A
class's  proportionate  share  of a  particular  type of  income  is  determined
according to the percentage of total dividends paid by the regulated  investment
company to such class. Consequently,  if both common shares and Preferred Shares
are outstanding, the Fund intends to designate distributions made to the classes
of  particular  types of income in  accordance  with the classes'  proportionate
shares of such income.  Thus,  the Fund will  designate  dividends  constituting
capital gain  dividends and other taxable  dividends in a manner that  allocates
such  income  between  the  holders  of common  shares and  Preferred  Shares in
proportion to the total dividends paid to each class during the taxable year, or
otherwise as required by applicable law.

<PAGE>

The Fund may be  subject  to  withholding  and other  taxes  imposed  by foreign
countries, including taxes on interest, dividends and capital gains with respect
to its investments in those countries, which would, if imposed, reduce the yield
on or return from those investments.  Tax conventions  between certain countries
and the U.S. may reduce or eliminate such taxes in some cases. The Fund does not
expect to satisfy the requirements for passing through to its shareholders their
pro rata shares of qualified  foreign  taxes paid by the Fund,  with the general
result that  shareholders  would not be entitled to any  deduction or credit for
such taxes on their own tax returns.

Federal law requires  that the Fund  withhold (as "backup  withholding")  28% of
reportable  payments,  including  dividends,  capital gain distributions and the
proceeds of redemptions  and exchanges or  repurchases  of Fund shares,  paid to
shareholders who have not complied with IRS regulations.  In order to avoid this
withholding   requirement,   shareholders   must   certify   on  their   Account
Applications,  or on separate IRS Forms W-9, that the Social  Security Number or
other  Taxpayer  Identification  Number they provide is their correct number and
that they are not  currently  subject  to backup  withholding,  or that they are
exempt  from  backup  withholding.  The Fund may  nevertheless  be  required  to
withhold if it receives notice from the IRS or a broker that the number provided
is  incorrect  or backup  withholding  is  applicable  as a result  of  previous
underreporting of interest or dividend income.

The  description of certain U.S.  federal tax  provisions  above relates only to
U.S. federal income tax  consequences  for  shareholders  who are U.S.  persons,
i.e., U.S. citizens or residents or U.S. corporations,  partnerships,  trusts or
estates,  and who are subject to U.S.  federal income tax.  Investors other than
U.S.  persons  may be subject to  different  U.S.  tax  treatment,  including  a
non-resident alien U.S.  withholding tax at the rate of 30% or at a lower treaty
rate on  amounts  treated as  ordinary  dividends  from the Fund and,  unless an
effective  IRS Form W-8BEN or other  authorized  withholding  certificate  is on
file, to backup  withholding  at the rate of 28% on certain other  payments from
the Fund.  Under the provisions the 2004 Tax Act,  dividends paid by the Fund to
non-U.S.  shareholders  that are  derived  from  short-term  capital  gains  and
qualifying net interest  income  (including  income from original issue discount
and  market  discount),  and  that  are  properly  designated  by  the  Fund  as
"interest-related  dividends"  or  "short-term  capital  gain  dividends,"  will
generally not be subject to U.S. withholding tax, provided that the income would
not be  subject  to  federal  income  tax if  earned  directly  by the  non-U.S.
shareholder.  In addition,  pursuant to the 2004 Tax Act,  distributions  of the
Fund  attributable  to gains  from sales or  exchanges  of "U.S.  real  property
interests" (as defined in the Code and regulations) (including certain U.S. real
property holding corporations) will generally be subject to U.S. withholding tax
and may give rise to an  obligation on the part of the non-U.S.  shareholder  to
file a United States tax return.  The  provisions  contained in the 2004 Tax Act
relating to  distributions to shareholders  who are non-U.S.  persons  generally
will apply to distributions  with respect to taxable years of the Fund beginning
after December 31, 2004 and before January 1, 2008.  Shareholders should consult
their own tax advisers on these matters and on state,  local,  foreign and other
applicable tax laws.


             PERFORMANCE-RELATED, COMPARATIVE AND OTHER INFORMATION

PERFORMANCE-RELATED  INFORMATION.  From time to time, in  advertisements,  sales
literature or reports to  shareholders,  the past performance of the Fund may be
illustrated and/or compared with that of other investment companies with similar
investment  objectives.  For example, yield or total return of the Fund's shares
may be  compared to averages  or  rankings  prepared by Lipper,  Inc.,  a widely
recognized  independent service which monitors mutual fund performance;  the S&P
500 Index; the Dow Jones  Industrial  Average;  or other  comparable  indices or
investment  vehicles.  In addition,  the performance of the Fund's shares may be
compared to  alternative  investment  or savings  vehicles  and/or to indices or
indicators of economic activity, e.g., inflation or interest rates. The Fund may
also  include  securities  industry  or  comparative   performance   information
generally  and  in  advertising  or  materials   marketing  the  Fund's  shares.
Performance  rankings and listings  reported in newspapers or national  business
and financial publications,  such as Barron's,  Business Week, Consumers Digest,
Consumer Reports,  Financial World, Forbes,  Fortune,  Investors Business Daily,
Kiplinger's  Personal Finance Magazine,  Money Magazine,  New York Times,  Smart
Money, USA Today, U.S. News and World Report, The Wall Street Journal and Worth,
may also be cited (if the Fund is listed  in any such  publication)  or used for
comparison,  as well as  performance  listings and rankings  from various  other
sources including  Bloomberg  Financial  Markets,  CDA/Wiesenberger,  Donoghue's
Mutual  Fund  Almanac,  Ibbotson  Associates,  Investment  Company  Data,  Inc.,
Johnson's  Charts,  Kanon Bloch Carre and Co.,  Lipper,  Inc.,  Micropal,  Inc.,
Morningstar,  Inc.,  Schabacker  Investment  Management and Towers Data Systems,
Inc. In addition,  from time to time,  quotations  from articles from  financial
publications such as those listed above may be used in advertisements,  in sales
literature or in reports to shareholders of the Fund. The Fund may also present,
from time to time, historical  information depicting the value of a hypothetical
account in one or more classes of the Fund since inception.

<PAGE>

Past performance is not indicative of future results. At any time in the future,
yields  and  total  return  may be higher or lower  than past  yields  and total
return, and there can be no assurance that any historical results will continue.

THE  ADVISERS.  From time to time,  the Advisers may use, in  advertisements  or
information  furnished  to  present  or  prospective  shareholders,  information
regarding the Advisers  including,  without  limitation,  information  regarding
their  investment  style,  countries of  operation,  organization,  professional
staff, clients (including other registered investment  companies),  assets under
management  and  performance  record.  These  materials may refer to opinions or
rankings of the Advisers' overall investment management performance contained in
third-party reports or publications.


                              FINANCIAL STATEMENTS

INDEPENDENT  REGISTERED  PUBLIC  ACCOUNTING  FIRM.  The statements of assets and
liabilities and operations of the Fund as of November 30, 2004,  incorporated by
reference  into this  Statement of Additional  Information  have been audited by
______________  ("_____"),  the Fund's independent  registered public accounting
firm, as set forth in its report  thereon  appearing  elsewhere  herein,  and is
included in reliance  upon such report given upon the  authority of such firm as
experts in accounting and auditing.  _____, located at ___________________,  has
served as the Fund's independent registered public accounting firm since January
23, 2002,  and has been selected to serve in such capacity for the Fund's fiscal
year  ending  November  30,  2005.  The  financial   statements  and  report  of
independent  registered  public  accounting firm  incorporated by reference into
this  Statement of  Additional  Information  have been so  incorporated  and the
financial  highlights  included  in the  prospectus  have  been so  included  in
reliance  upon the report of  ________  given on their  authority  as experts in
auditing and accounting.

INCORPORATION  BY REFERENCE.  The Fund's audited  Portfolio of  Investments  and
Statement of Assets and Liabilities  dated November 30, 2004;  audited Statement
of Operations and Statement of Changes in Net Assets for the year ended November
30, 2004; and report of the independent  registered  public  accounting firm for
the year ended  November 30, 2004,  are included in the Fund's Annual Report for
the fiscal year ended November 30, 2004, and  incorporated  herein by reference.
The Fund's  unaudited  Portfolio  of  Investments  and  Statement  of Assets and
Liabilities  dated May 31, 2005 and the unaudited  Statement of  Operations  and
Statement of Changes in Net Assets for the six months  ended May 31,  2005,  are
included in the Fund's Semi-Annual Report for the six months ended May 31, 2005,
and  incorporated  herein  by  reference  You may  request  a free  copy of this
Statement  of  Additional  Information  or the  Fund's  annual  and  semi-annual
reports, request other information about the Fund, or make shareholder inquiries
by  calling  (800)  331-1710  or by  writing  to the  Fund.  This  Statement  of
Additional  Information  and annual and  semi-annual  reports are also available
free of charge on the Fund's  website  (http://www.boulderfunds.net)  and on the
Securities and Exchange  Commission's website  (http://www.sec.gov),  which also
contains other information about the Fund. You may also email requests for these
documents to  publicinfo@sec.gov  or make a request in writing to the Securities
and Exchange Commission's Public Reference Section, Washington, D.C. 20549-0102.
The Fund's registration number under the 1940 Act is 811-02328.


                             ADDITIONAL INFORMATION

A Registration Statement on Form N-2, including amendments thereto,  relating to
the shares  offered  hereby,  has been filed by the Fund with the Securities and
Exchange  Commission,  Washington,  D.C. The  prospectus  and this  Statement of
Additional  Information do not contain all of the  information  set forth in the
Registration  Statement,  including  any exhibits  and  schedules  thereto.  For
further  information  with  respect to the Fund and the shares  offered  hereby,
reference is made to the  Registration  Statement.  Statements  contained in the
prospectus  and this  Statement of Additional  Information as to the contents of
any contract or other document  referred to are not necessarily  complete and in
each instance  reference is made to the copy of such contract or other  document
filed as an exhibit to the  Registration  Statement,  each such statement  being
qualified in all respects by such reference.


<PAGE>



Part C.  Other Information.

Item 24.  Financial Statements and Exhibits

1.   Financial Statements:

     a.   Financial   Statements   included  in  Part  A  (Prospectus)  of  this
          Registration Statement:

          i.   Financial highlights for each of the five years ended 2000, 2001,
               2002, 2003, 2004 (1)

     b.   Financial  Statements  included  in Part B  (Statement  of  Additional
          Information) of this Registration Statement.

          i.   Report of Independent Accountants (2)

          ii.  Statement of assets and liabilities as of November 30, 2004 (2)

          iii. Statement of operations for the year ended November 30, 2004 (2)

          iv.  Statement of cash flows for the year ended November 30, 2004 (2)

          v.   Statement  of changes  in net assets for each of the years  ended
               November 30, 2004 and 2003 (2)

          vi.  Schedule of Investments as of November 30, 2004 (2)

2.   Exhibits

     a.   Fund's Charter

          i.   Articles of Incorporation of the Fund (3)

          ii.  Articles of Amendment dated October 9, 1991 (3)

          iii. Articles of Amendment dated November 24, 1998 (3)

          iv.  Articles Supplementary dated January 27, 2000 (3)

          v.   Articles of Amendment dated April 26, 2002 (3)

          vi.  Articles of Amendment dated October 21, 2002 (3)

          vii. Articles of Amendment dated October 23, 2002 (3)

          viii. Articles Supplementary dated April 8, 2004 (4)

          ix.  Articles of Amendment dated May 18, 2004 (4)

          x.   Articles of Amendment and Restatement dated May 18, 2004 (4)

          xi.  Articles of Amendment dated April 25, 2005 (4)

          xii. Articles   Supplementary   Creating  and  Fixing  the  Rights  of
               Preferred Stock (5)

     b. Amended and Restated By-laws of the Fund (4)

     c. Not applicable

     d. Specimen share certificates (5)

     e. Dividend Reinvestment Plan (4)

     f. Not applicable

     g. Investment Advisory Agreements

          i.   Investment  Co-Advisory  Agreement  between  the Fund and Boulder
               Investment Advisers, L.L.C. ("BIA") (3)

          ii.  Investment  Co-Advisory  Agreement  between  the Fund and Stewart
               West  Indies  Trading  Company,  Ltd.  d/b/a  Stewart  Investment
               Advisers ("SIA") (3)

     h.   Purchase Agreement among the Fund, BIA and the Underwriters (5)

     i.   Deferred Compensation Plan of Kalman J. Cohen, Director. (3)

     j.   Custody  Agreement between the Fund and Investors Bank & Trust Company
          (4)

     k.   Other Agreements

          i.   Transfer Agency Agreement between the Fund and PFPC, Inc. (4)

<PAGE>

          ii.  Administration Agreement between the Fund and Fund Administrative
               Services, LLC. (4)

          iii. Amendment to  Administration  Agreement between the Fund and Fund
               Administrative Services, LLC. (4)

          iv.  Administration  Agreement  between the Fund and Investors  Bank &
               Trust Company (4)

          v.   Collateral Securities Account Agreement (4)

          vi.  Loan and Pledge  Agreement  between the Fund and Custodial  Trust
               Company (4)

          vii. Delegation  Agreement between the Fund and Investors Bank & Trust
               Company (4)

          viii. Auction  Agency  Agreement  between the Fund and  Deutsche  Bank
               Trust Company Americas (5)

          ix.  Broker-Dealer      Agreement     between     the     Fund     and
               _____________________. (5)

     l.   Opinions of Counsel

          i.   Opinion and consent of Paul Hastings Janofsky & Walter (5)

          ii.  Opinion and consent of Venable, Baetjer and Howard, LLP (5)

     m.   Consents to Service of Process

          i.   Consent to Service of Process with respect to Dennis Causier,  an
               independent director of the Fund (5)

          ii.  Consent to Service of Process with respect to SIA (3)

     n.   Consent of __________ (5)

     o.   Not applicable

     p.   Initial Share Purchase Agreement (5)

     q.   Not applicable

     r.   Code of Ethics of the Fund, BIA and SIA (4)

     s.   Power of Attorney (4)

(1)  Incorporated  herein by reference to the  Registrant's  Form N-CSR filed on
     __________, 2005 for six months ending May 31, 2005.

(2)  Incorporated  herein by reference to the  Registrant's  Form N-CSR filed on
     February 8, 2005 for year ending November 30, 2004.

(3)  Incorporated  hereby by reference to  Amendment  No. 8 to the  Registration
     Statement  on Form  N-2/A of the  Registrant  filed on  November  20,  2002
     (Securities   Act   File   No.    33-100634;    EDGAR   Accession    Number
     0000950117-02-002800.

(4)  Filed herewith.

(5)  To be filed by amendment.

Item 26. Marketing Arrangements. Reference is made to the Purchase Agreement for
the  Fund's  preferred  shares  to be filed by  amendment  to this  Registration
Statement.

Item 27. Other Expenses of Issuance and Distribution.  The Fund expects to incur
approximately  $_________  of  expenses in  connection  with the  Offering.  The
following  table  identifies  the  significant   expenses  associated  with  the
Offering.



Registration Fees                                    $
Printing Costs (other than certificates)             $
Accounting Fees and Expenses                         $
Legal Fees and Expenses                              $
Rating Agency Fees                                   $
Miscellaneous                                        $
TOTAL ESTIMATED COSTS                                $

<PAGE>

Item 28. Persons controlled by or under common control with the Fund. The Ernest
Horejsi Trust No. 1B (the "EH Trust") is the Fund's largest  shareholder and has
asserted the existence of control with respect to the Fund.  Together with other
trusts and  entities  affiliated  with the  Horejsi  family  (collectively,  the
"Horejsi  Affiliates"),  the EH Trust has  asserted  control with respect to two
other  investment  companies,  the Boulder Total Return Fund, Inc. and the First
Financial Fund,  Inc. The Horejsi  Affiliates also own the Advisers and FAS, the
Fund's  co-administrator.  The following table shows the relationship of each of
the related  companies to the Fund and each  company's  ownership by the Horejsi
Affiliates.

<TABLE>
<S>                                                           <C>                                   <C>
                                                                Principal Shareholder(s)/Equity       Percentage of shares
                                                                           Holder(s)                  directly held in the
                                                                                                     respective company as
                                                                                                        of June 30, 2005

The Fund                                                      EH Trust                              [21%]

Boulder Total Return Fund, Inc. NYSE: BTF                     EH Trust                              [27.66%]
                                                              Lola Brown Trust No. 1B               [11.11%]
                                                              Evergreen Atlantic LLC                [2.79%]
                                                              Susan L. Ciciora Trust                [1.42%]
                                                              John S. Horejsi Trust                 [0.85%]
                                                              Evergreen Trust                       [0.51%]

First Financial Fund, Inc. NYSE: FF                           Stewart R. Horejsi Trust No. 2A       [7.36%]
                                                              EH Trust                              [7.50%]
                                                              Lola Brown Trust No. 1B               [10.18%]
                                                              Mildred Horejsi Trust                 [8.34%]
                                                              Susan L. Ciciora Trust                [5.90%]

Boulder Investment Advisers, LLC                              Lola Brown Trust No. 1B               50%
                                                              Evergreen Atlantic LLC                50%

Stewart West Indies Trading Company,  Ltd. doing business as  Stewart West Indies Trust             100%
Stewart Investment Advisers

Fund Administrative Services, LLC                             Lola Brown Trust No. 1B               50%
                                                              Evergreen Atlantic LLC                50%
</TABLE>


The EH Trust was established by Ernest Horejsi,  Stewart  Horejsi's  father,  in
1966. It is an  irrevocable  grantor trust formed in Kansas but now domiciled in
Alaska.  The  Lola  Brown  Trust  No.  1B was  established  by Lola  Brown,  the
grandmother  of Stewart  Horejsi,  in 1967. It is an  irrevocable  grantor trust
formed in Kansas  but now  domiciled  in  Alaska.  The Susan  Ciciora  Trust was
established by Susan Ciciora, the daughter of Stewart Horejsi, in 1998. It is an
irrevocable  grantor  trust formed in South Dakota but now  domiciled in Alaska.
The John S. Horejsi Trust was  established  by John Horejsi,  the son of Stewart
Horejsi,  in 1998. It is an irrevocable grantor trust formed in South Dakota but
now domiciled in Alaska.  The Evergreen Trust was established by Stewart Horejsi
in 1995. It is an irrevocable  grantor trust formed in Bermuda but now domiciled
in  Alaska.  The  Stewart R.  Horejsi  Trust No. 2A was  established  by Stewart
Horejsi in 1968.  It is an  irrevocable  grantor  trust formed in Kansas but now
domiciled in Alaska.  The Mildred  Horejsi was  established by Mildred  Horejsi,
Stewart Horejsi's mother, in 1965. It is an irrevocable  grantor trust formed in
New York but now  domiciled  in  Alaska.  The  Stewart  West  Indies  Trust  was
established  by Stewart  Horejsi in 1998.  It is an  irrevocable  grantor  trust
formed in South Dakota but now domiciled in Alaska.  Evergreen Atlantic LLC is a
Colorado  family limited  liability  company formed in 1995. Its members are the
Evergreen Trust (11%),  the Susan Ciciora Trust (30%), the John S. Horejsi Trust
(15%) and the Stewart West Indies Trust (44%).

Item 29.  Number of Holders of Shares.

<TABLE>
<S>                                              <C>
Title of Class                                   Record Holders as of_______, 2005

Common Stock, par value $.01 per share
</TABLE>


Item 30.  Indemnification.  Section 2-418 of the General  Corporation Law of the
State of Maryland,  Article VIII of the  Registrant's  Articles of Incorporation
(to be filed as an Exhibit to this Registration  Statement),  Article 5.2 of the
Registrant's  By-laws  (to be filed as an  Exhibit  to this  Registration),  the
Investment  Advisory  Agreements  (to be filed as Exhibits to this  Registration
Statement)  provide  for   indemnification.   Insofar  as  indemnification   for
liabilities  arising  under  the  Securities  Act of  1933  (the  "Act")  may be
permitted to  directors,  officers and  controlling  persons of the  Registrant,
pursuant to the foregoing  provisions,  or otherwise,  the  Registrant  has been
advised  that in the opinion of the  Securities  and  Exchange  Commission  such
indemnification  is  against  public  policy  as  expressed  in the  Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Registrant of expenses incurred
or paid by a director,  officer or  controlling  person of the Registrant in the
successful  defense of any  action,  suit or  proceeding)  is  asserted  by such
director,  officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been  settled by  controlling  precedent,  submit to a court of  appropriate
jurisdiction the question whether such  indemnification  by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

<PAGE>

Item 31. Business and Other Connections of the Investment Adviser. Registrant is
fulfilling the requirement of this Item 31 to provide a list of the officers and
directors of its investment advisers,  together with information as to any other
business, profession,  vocation or employment of a substantial nature engaged in
by that entity or those of its officers and directors during the past two years,
by  incorporating  herein by reference the information  contained in the current
Form ADV filed with the Securities  and Exchange  Commission by each of BIA (SEC
File No.  ________) and SIA (SEC File No.  ________)  pursuant to the Investment
Advisers Act of 1940, as amended.

Item 32. Location of Accounts and Records.

Fund Administrative Services, L.L.C.            Co-Administrator
1680 38th Street (Suite 800)
Boulder, CO 80301

Investors Bank & Trust Company.                 Co-Administrator
200 Clarendon Street
P.O. Box 9130 Boston, MA 02117

PFPC, Inc.                                      Common Stock Transfer Agent
400 Bellevue Parkway
Wilmington, Delaware 19809

Investors Bank & Trust Company                  Custodian
200 Clarendon Street
P.O. Box 9130 Boston, MA 02117

Deutsche Bank Trust Company Americas            Preferred Stock Transfer Agent
- --------------------------
New York, NY

Item 33. Management Services. Not applicable.

Item 34. Undertakings

     1.   The Registrant hereby undertakes to suspend the offering of the shares
          until it amends its Prospectus if (a) subsequent to the effective date
          of its Registration Statement,  the net asset value declines more than
          10 percent  from its net asset value as of the  effective  date of the
          Registration  Statement  or (b) the net asset  value  increases  to an
          amount greater than its net proceeds as stated in the Prospectus.

     2.   Not applicable.

     3.   Not applicable.

     4.   Not applicable.

     5.   The Registrant hereby undertakes that:

          a.   For  the  purposes  of  determining   any  liability   under  the
               Securities Act of 1933, the information  omitted from the form of
               prospectus filed as part of a registration  statement in reliance
               on Rule 430A and contained in the form of prospectus filed by the
               Registrant  under Rule 497(h)  under the  Securities  Act of 1933
               shall be deemed to be part of the  Registration  Statement  as of
               the time it was declared effective.

          b.   For the purpose of determining any liability under the Securities
               Act of 1933, each  post-effective  amendment that contains a form
               of prospectus shall be deemed to be a new Registration  Statement
               relating to the securities  offered therein,  and the offering of
               the  securities  at that time  shall be deemed to be the  initial
               bona fide offering thereof.

<PAGE>

     6.   The Registrant  hereby undertakes to send by first class mail or other
          means designed to ensure equally prompt delivery,  within two business
          days of  receipt  of an oral or  written  request,  any  Statement  of
          Additional Information.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended,  and the
Investment Company Act of 1940, as amended,  the Registrant has duly caused this
Amendment  to its  Registration  Statement  to be  signed  on its  behalf by the
undersigned,  thereunto duly authorized, in the City of Boulder and the State of
Colorado, on the 8th day of July, 2005

                           BOULDER GROWTH & INCOME FUND, INC.


                           By: /s/ Stephen C. Miller

                           President

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2A
<SEQUENCE>2
<FILENAME>bifarticlessupp040804.txt
<DESCRIPTION>EXHIBIT (2)(A)(VIII) ARTICLES SUPPLEMENTARY
<TEXT>
EXHIBIT 99.(2)(a)(viii)
ARTICLES SUPPLEMENTARY DATED 04/08/04


                       BOULDER GROWTH & INCOME FUND, INC.

                             ARTICLES SUPPLEMENTARY

     Boulder  Growth  &  Income  Fund,   Inc.,  a  Maryland   corporation   (the
"Corporation")  hereby  certifies to the State  Department  of  Assessments  and
Taxation of Maryland that:

     FIRST:  Pursuant to Section 3-802(b)(3) of the Maryland General Corporation
Law (the  "MGCL"),  the  Corporation,  by a resolution of its Board of Directors
(the  "Board of  Directors")  duly  adopted at a meeting  duly  called and held,
elected not to be subject to Section 3-804 and Section 3-805 of the MGCL.

     SECOND:  The Corporation's  election to not be subject to Section 3-804 and
Section  3-805 of the MGCL has been  approved by the Board of  Directors  in the
manner and by the vote required by law.

     THIRD:  The  undersigned  President of the Corporation  acknowledges  these
Articles Supplementary to be the corporate act of the Corporation and, as to all
matters of facts required to be verified under oath, the  undersigned  President
acknowledges that, to the best of his knowledge,  information and belief,  these
matters and facts are true in all material  respects and that this  statement is
made under the penalties for perjury.

                            [SIGNATURE PAGE FOLLOWS]

     IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary
to be signed in its name and on its behalf by its  President  and attested to by
its Secretary on this 8th day of April, 2004.

ATTEST:                                       Boulder Total Return Fund, Inc.


/s/Stephanie Kelley                           By:  /s/ Stephen C. Miller
Stephanie Kelly                                    Stephen C. Miller
Secretary                                          President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2A
<SEQUENCE>3
<FILENAME>bifarticles051804.txt
<DESCRIPTION>EXHIBIT (2)(A)(IX) ARTICLES OF AMENDMENT 5/18/04
<TEXT>
EXHIBIT 99.(2)(a)(ix)
ARTICLES OF AMENDMENT DATED 05/18/04


                       BOULDER GROWTH & INCOME FUND, INC.

                              ARTICLES OF AMENDMENT

     THIS IS TO CERTIFY THAT:

     FIRST: The charter (the "Charter") of Boulder Growth & Income Fund, Inc., a
Maryland  corporation  (the  "Corporation"),  is hereby amended by repealing the
second sentence of Article VI, Paragraph 2 of the Charter, and replacing it with
the following paragraph in lieu thereof:

     The directors  shall be elected at each annual meeting of the  stockholders
     commencing  in 2004,  except as necessary to fill any  vacancies,  and each
     director  elected  shall hold  office  until his or her  successor  is duly
     elected and qualifies,  or until his or her earlier  resignation,  death or
     removal.

     SECOND:  The  amendments  to the  Charter as set forth above have been duly
advised  by the Board of  Directors  and  approved  by the  stockholders  of the
Corporation as required by law.

     THIRD:  The  undersigned  President of the Corporation  acknowledges  these
Articles of Amendment to be the corporate act of the Corporation  and, as to all
matters of facts required to be verified under oath, the  undersigned  President
acknowledges that, to the best of his knowledge,  information and belief,  these
matters and facts are true in all material  respects and that this  statement is
made under the penalties of perjury.

     IN WITNESS WHEREOF,  the Corporation has caused these Articles of Amendment
to be signed in its name and on its behalf by its  President  and attested to by
its Secretary on this 18th day of May, 2004.

ATTEST:                                       Boulder Growth & Income Fund, Inc.


/s/Nicole Murphey                             /s/ Stephen C. Miller
Assistant Secretary                           President


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2A
<SEQUENCE>4
<FILENAME>axbifarticlesv4.txt
<DESCRIPTION>EXHIBIT (2)(A)(X) ARTICLES OF AMEND AND RESTATE
<TEXT>
EXHIBIT 99.(2)(a)(x)
ARTICLES OF AMENDMENT AND RESTATEMENT


                       BOULDER GROWTH & INCOME FUND, INC.

                      ARTICLES OF AMENDMENT AND RESTATEMENT

          FIRST: Boulder Growth & Income Fund, Inc., a Maryland corporation (the
     "Corporation"),  desires to amend and restate its charter as  currently  in
     effect and as hereinafter amended.

          SECOND: The following provisions are all the provisions of the charter
     (the "Charter") currently in effect and as hereinafter amended:

                                   ARTICLE I

                                      NAME

               The name of the corporation (the "Corporation") is:

               Boulder Growth & Income Fund, Inc.

                                   ARTICLE II

                                     PURPOSE

          The purposes for which the Corporation is formed are:

          (1) To purchase or  otherwise  acquire,  invest and  reinvest in, own,
     hold,  sell or otherwise  dispose of  securities  of every kind and nature,
     including without limitation,  stocks,  warrants and rights exercisable for
     stock, bonds,  debentures,  obligations or evidences of indebtedness,  bank
     acceptances and commercial paper.

          (2) To exercise any and all rights, powers or privileges of individual
     ownership or interest in respect of  securities  owned by it or in which it
     has any interest.

          (3) To engage in any lawful act or activity for which corporations may
     be organized  under the Maryland  General  Corporation  Law (the "MGCL") or
     other applicable  corporation law or laws as in effect,  from time to time,
     in the  State of  Maryland,  and in  general,  to do any or all such  other
     things in  connection  with the  objects and  purposes  of the  Corporation
     hereinbefore set forth, as are, in the opinion of the Board of Directors of
     the  Corporation,  necessary,  incidental,  relative  or  conducive  to the
     attainment  of such objects and  purposes;  and to do such acts and things,
     and to  exercise  any and all such  powers to the same  extent as a natural
     person  might  or  could  lawfully  do to the  full  extent  authorized  or
     permitted  to a  corporation  under any laws  that may be now or  hereafter
     applicable or available to the Corporation.

<PAGE>

          (4) The foregoing  objects and purposes  shall,  except when otherwise
     expressed,  be in no way limited or restricted by reference to or inference
     from the terms of any other  clause  of this or any  other  Article  of the
     Charter of the Corporation  (the "Charter") or any amendment  thereto,  and
     shall each be regarded as  independent,  and construed as powers as well as
     objects and purposes.

          (5)  Nothing  herein  contained  shall  be  construed  as  giving  the
     Corporation  any rights,  powers or privileges  not permitted to it by law.


                                   ARTICLE III

                  PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT

                  The address of the principal office of the Corporation in the
State of Maryland is c/o The Corporation Trust Incorporated, 300 East Lombard
Street, Baltimore, Maryland 21202. The name of the resident agent of the
Corporation in the State of Maryland is The Corporation Trust Incorporated whose
post address is 300 East Lombard Street, Baltimore, Maryland 21202. The resident
agent is a Maryland corporation.


<PAGE>

                                   ARTICLE IV

             AUTHORIZED STOCK AND PROVISIONS FOR DEFINING, LIMITING
                      AND REGULATING CERTAIN POWERS OF THE
                CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS

          Section 4.1 The total  number of shares of stock that the  Corporation
     shall have  authority to issue is 250,000,000  shares of Common Stock,  par
     value $.01 per share.  The aggregate par value of all shares of all classes
     of stock of the Corporation is $2,500,000. The Board of Directors, with the
     approval  of a majority  of the entire  Board,  and  without  action by the
     stockholders,  may amend the Charter to increase or decrease the  aggregate
     number of shares of stock or the  number of shares of stock of any class or
     series that the Corporation has authority to issue.  The Board of Directors
     of the  Corporation  is also  authorized to classify or to reclassify  from
     time to time any unissued shares of stock of the  Corporation,  whether now
     or  hereafter   authorized,   by  setting,   changing  or  eliminating  the
     preferences,  conversion  or other  rights,  voting  powers,  restrictions,
     limitations  as to dividends,  qualifications,  or terms and  conditions of
     redemption of the stock.

          Section  4.2 The  Secretary  of the  Corporation  shall call a special
     meeting of the stockholders on the written request of stockholders entitled
     to cast at least 25% of all the votes entitled to be cast at the meeting.

          Section  4.3 The  Bylaws of the  Corporation,  whether  adopted by the
     Board of  Directors  or the  stockholders,  shall be subject to  amendment,
     alteration  or  repeal,  and new  Bylaws  may be made,  by  either  (a) the
     affirmative  vote of a  majority  of all the votes  cast at a  stockholders
     meeting  at which a  quorum  is  present;  or (b) the  Board of  Directors;
     provided,  however, that the Board of Directors may not (i) amend or repeal
     a Bylaw that allocates  solely to stockholders the power to amend or repeal
     such Bylaw, or (ii) amend or repeal Bylaws or make new bylaws that conflict
     with or  otherwise  alter in any  material  respect  the  effect  of Bylaws
     previously adopted by the stockholders.

<PAGE>

          Section  4.4 The  following  provisions  are  hereby  adopted  for the
     purpose of defining,  limiting and regulating the powers of the Corporation
     and of the directors and stockholders:

          (i) The Board of  Directors  shall  have the  general  management  and
     control of the business and property of the  Corporation,  and may exercise
     all the  powers  of the  Corporation,  except  such as are by law or by the
     Charter or by the Bylaws of the Corporation  (the "Bylaws")  conferred upon
     or reserved to the stockholders.

          (ii) The  Corporation  may in its Bylaws confer powers on the Board of
     Directors in addition to the powers expressly conferred by statute.

          (iii) No holder of  shares  of stock of the  Corporation  of any class
     shall be  entitled  as such,  as a matter of  right,  to  subscribe  for or
     purchase any part of any new or additional  issue of shares of stock of any
     class or of  securities  convertible  into  shares  of stock of any  class,
     whether now or hereafter authorized.

          (iv) All  persons who shall  acquire  stock in the  Corporation  shall
     acquire the same subject to the provisions of this Charter.

          (v) The stockholders and directors may hold their meetings and have an
     office  or  offices  outside  the State of  Maryland,  and the books of the
     Corporation  may  be  kept  (subject  to  any  provision  contained  in any
     applicable  statute)  outside the State of Maryland at such place or places
     as may be from time to time designated by the Board of Directors.

<PAGE>

          Section  4.5  Any  determination  made in good  faith  and,  so far as
     accounting  matters are involved,  in accordance  with  generally  accepted
     accounting  principles  by or  pursuant  to the  direction  of the Board of
     Directors,  as  to  the  amount  of  the  assets,  debts,  obligations,  or
     liabilities of the Corporation, as to the amount of any reserves or charges
     set up and  propriety  thereof,  as to the time of or purposes for creating
     such reserves or charges,  as to the use, alteration or cancellation of any
     reserves or charges  (whether or not any debt  obligation  or liability for
     which such reserves or charges shall have been created shall have been paid
     or  discharged  or  shall  be then  or  thereafter  required  to be paid or
     discharged),  as to the price or closing bid or asked price of any security
     owned or held by the Corporation, as to the market value of any security or
     fair  value of any  other  asset of the  Corporation,  as to the  number of
     shares of the Corporation  outstanding,  as to the estimated expense to the
     Corporation in connection  with purchases of its shares,  as to the ability
     to liquidate securities in orderly fashion, as to the extent to which it is
     practicable to deliver a cross-section  of the portfolio of the Corporation
     in payment  for such  shares,  or as to any other  matters  relating to the
     issue, sale, purchase and/or other acquisition or disposition of securities
     or shares of the Corporation,  shall be final and conclusive,  and shall be
     binding upon the Corporation and all holders of its shares,  past,  present
     and  future,  and  shares of the  Corporation  are  issued  and sold on the
     condition and  understanding,  evidenced by acceptance of certificates  for
     such  shares,  that any and all such  determinations  shall be  binding  as
     aforesaid.


                                   ARTICLE V

                                   DIRECTORS

          Section 5.1 The number of directors of the Corporation  shall be five,
     which number may be  decreased  by the Board of  Directors  pursuant to the
     Bylaws,  but shall  never be less than the minimum  number  required by the
     MGCL.  The names of the  directors  who shall  serve  until the next annual
     meeting of  stockholders  and until their  successors  are duly elected and
     qualify are:

          Alfred G. Aldridge, Jr.

          Richard I. Barr

          Joel W. Looney

          Stephen C. Miller

          Section 5.2 The directors  shall be elected at each annual  meeting of
     the  stockholders  commencing  in 2004,  except  as  necessary  to fill any
     vacancies,  and each  director  elected  shall hold office until his or her
     successor  is duly  elected  and  qualifies,  or until  his or her  earlier
     resignation, death, or removal.

          Section 5.3 A plurality  of all the votes cast at a meeting at which a
     quorum is present shall be sufficient to elect a director.


                                   ARTICLE VI

                              EXTRAORDINARY ACTIONS

          Section 6.1  Notwithstanding any provision of law requiring any action
     to be taken or  authorized  by the  affirmative  vote of the  holders  of a
     greater  proportion of the votes of all classes or of any class of stock of
     the  Corporation,  such  action  shall be  effective  and valid if taken or
     authorized  by the  affirmative  vote of a majority of the total  number of
     votes  entitled  to be  cast  thereon,  except  as  otherwise  specifically
     provided in the Charter.

<PAGE>

          Section 6.2 (a) In this Section, " Business Combination" means:

          (1) a merger  or  consolidation  of the  Corporation  with or into any
     person other than an investment company in a family of investment companies
     having the same investment adviser or administrator as the Corporation;

          (2) the sale, lease,  exchange,  mortgage,  pledge,  transfer or other
     disposition (in one transaction or a series of transactions) to or with any
     other person of any assets of the Corporation except (x) for the payment of
     dividends or other  distributions,  (y) for portfolio  transactions  of the
     Corporation effected in the ordinary course of the Corporation's  business,
     including permitted borrowings,  or (z) in connection with a reorganization
     of  the  Corporation  with  another  investment  company  in  a  family  of
     investment companies having the same investment adviser or administrator as
     the Corporation; or

          (3) the issuance or transfer by the Corporation (in one transaction or
     a series of  transactions)  of any shares of the  corporation  to any other
     person  in  exchange  for  cash,   securities  or  other  property  of  the
     Corporation  (or a  combination  thereof),  but  excluding (v) sales of any
     shares of the Corporation in connection with a public offering  thereof or,
     for shares of preferred  stock or debt  securities  of the  Corporation,  a
     private  placement   thereof,   (w)  issuance  of  any  securities  of  the
     Corporation upon the exercise of any stock subscription right issued by the
     Corporation,  (x) with respect to the Corporation's  dividend  reinvestment
     and/or  cash  purchase  plan,   (y)  in  connection   with  a  dividend  or
     distribution  made pro rata to all holders of stock of the same  class,  or
     (z) a transaction within the scope permitted under (a)(1) or (2) above.

          (b) In addition to the approval by the Board of Directors  required by
     applicable  law,  the  Charter  or  the  Bylaws  of  the  Corporation,  the
     affirmative  vote of the  holders  of  shares  entitled  to  cast at  least
     two-thirds  of all the votes  entitled  to be cast on the  matter  shall be
     required  to  approve:

<PAGE>

               (1) a Business Combination;

               (2) a voluntary liquidation or dissolution of the Corporation;

               (3) a stockholder  proposal as to specific  investment  decisions
          made or to be made with respect to the Corporation's assets;

               (4) an amendment to the Charter to convert the Corporation from a
          closed-end  investment  company to an open-end  investment  company or
          unit  investment  trust (as such terms are  defined by the  Investment
          Company Act of 1940, as amended), whether by merger or otherwise;

               (5) a self tender for, or acquisition by the Corporation of, more
          than 25% of the  Corporation's  outstanding  shares of  stock,  in the
          aggregate, during any twelve-month period.

          (c) This Section may not be amended,  altered or repealed  without the
     affirmative  vote of the  holders of at least  two-thirds  of all the votes
     entitled to be cast on the matter.

          Section 6.3 The  Corporation is prohibited from electing to be subject
     to any  provision of Title 3,  Subtitle 8 of the MGCL, as amended from time
     to time, or any successor to such provisions.


                                  ARTICLE VII

                   LIMITATIONS ON LIABILITY; INDEMNIFICATION

          Section 7.1 To the fullest extent that limitations on the liability of
     directors and officers are permitted by the MGCL, no director or officer of
     the  Corporation  shall  have  any  liability  to  the  Corporation  or its
     stockholders  for damages.  This limitation on liability  applies to events
     occurring  at the time a person  serves as a  director  or  officer  of the
     Corporation whether or not such person is a director or officer at the time
     of any proceeding in which liability is asserted.

<PAGE>

          Section 7.2 The Corporation  shall  indemnify and advance  expenses to
     its currently  acting and its former  directors to the fullest  extent that
     indemnification  of directors is  permitted  by the MGCL.  The  Corporation
     shall indemnify and advance  expenses to its officers to the same extent as
     its  directors and to such further  extent as is  consistent  with law. The
     Board of Directors  may by by-law,  resolution  or  agreement  make further
     provisions for indemnification of directors,  officer, employees and agents
     to the fullest extent permitted by the MGCL.

          Section 7.3 No provision of this Article shall be effective to protect
     or purport to protect any  director or officer of the  Corporation  against
     any liability to the Corporation or its security holders to which he or she
     would  otherwise  be subject by reason of willful  misfeasance,  bad faith,
     gross  negligence  or  reckless  disregard  of the duties  involved  in the
     conduct of his or her office.

          References  to the MGCL in this Article are to the law as from time to
     time amended. No further amendment to the Charter shall affect any right of
     any  person  under  this  Article  VII  based  on any  event,  omission  or
     proceeding prior to such amendment

                                  ARTICLE VIII

                                   AMENDMENTS

          The  Corporation  reserves the right to make,  from time to time,  any
     amendment to its Charter now or hereafter  authorized by law (including any
     amendment  that alters the contract  rights,  as expressly set forth in the
     Charter,  of any class of  outstanding  stock)  and all  rights at any time
     conferred  upon the  stockholders  of the  Corporation  by the  Charter are
     granted subject to the provisions of this Article VIII. Except as otherwise
     provided  in the  Charter,  any of the  provisions  of the  Charter  may be
     amended,  altered or repealed upon the affirmative vote of the holders of a
     majority of the votes entitled to be cast by stockholders.

<PAGE>

                                   ARTICLE IX
                            DURATION OF CORPORATION

              The duration of the Corporation shall be perpetual.

          THIRD:  The amendment to and restatement of the charter as hereinabove
     set forth have been duly advised by the Board of Directors  and approved by
     the stockholders of the Corporation as required by law.

          FOURTH: The current address of the principal office of the Corporation
     is as set forth in Article III of the foregoing  amendment and  restatement
     of the charter.

          FIFTH:  The name and  address of the  Corporation's  current  resident
     agent  is as set  forth  in  Article  III of the  foregoing  amendment  and
     restatement of the charter.

          SIXTH:  The number of  directors of the  Corporation  and the names of
     those  currently  in office are as set forth in Article V of the  foregoing
     amendment and restatement of the charter.

          SEVENTH:  The  undersigned  President  acknowledges  these Articles of
     Amendment and Restatement to be the corporate act of the Corporation and as
     to all matters or facts required to be verified under oath, the undersigned
     President  acknowledges that to the best of his knowledge,  information and
     belief,  these matters and facts are true in all material respects and that
     this statement is made under the penalties for perjury.

                            [SIGNATURE PAGE FOLLOWS]
<PAGE>

          IN WITNESS  WHEREOF,  the  Corporation  has caused  these  Articles of
     Amendment and Restatement to be signed in its name and on its behalf by its
     President and attested to by its Secretary on this 18th day of May, 2004.

ATTEST:                                 BOULDER GROWTH & INCOME
                                        FUND, INC.


/s/ Nicole L. Murphey                   By:/s/ Stephen C. Miller         (SEAL)
Nicole Murphey                             Stephen C. Miller
Asst. Secretary                            President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2A
<SEQUENCE>5
<FILENAME>bifarticles042505.txt
<DESCRIPTION>EXHIBIT (2)(A)(XI) ARTICLES OF AMENDMENT 04/25/05
<TEXT>
EXHIBIT 99.(2)(a)(xi)
ARTICLES OF AMENDMENT DATED 04/25/05


                       BOULDER GROWTH & INCOME FUND, INC.

                              ARTICLES OF AMENDMENT


THIS IS TO CERTIFY THAT:

     FIRST:  The  charter  of Boulder  Growth & Income  Fund,  Inc.,  a Maryland
corporation (the "Corporation"), is hereby amended by:

     1.  deleting  existing  Section  4.3  of  Article  IV in its  entirety  and
substituting in lieu thereof the following new section:

          Section 4.3.  The Bylaws of the  Corporation,  whether  adopted by the
     Board of  Directors  or the  stockholders,  shall be subject to  amendment,
     alteration  or  repeal,  and new  Bylaws  may be made,  by  either  (a) the
     stockholders  by the  affirmative  vote  of a  majority  of all  the  votes
     entitled to be cast on the matter or (b) the Board of Directors;  provided,
     however,  that the Board of  Directors  may not (i) amend or repeal a Bylaw
     that  allocates  solely to  stockholders  the power to amend or repeal such
     Bylaw, or (ii) amend or repeal Bylaws or make new Bylaws that conflict with
     or otherwise alter in any material respect the effect of Bylaws  previously
     adopted by the stockholders.

     2.  deleting  existing  Section  5.1  of  Article  V in  its  entirety  and
substituting in lieu thereof the following new section:

          Section 5.1. The number of directors shall be five.

     SECOND: The amendments to the charter of the Corporation as set forth above
have  been  duly  advised  by  the  Board  of  Directors  and  approved  by  the
stockholders of the Corporation as required by law.

     THIRD: The undersigned  President  acknowledges these Articles of Amendment
to be the  corporate  act of the  Corporation  and as to all  matters  or  facts
required to be verified under oath, the undersigned President  acknowledges that
to the best of his knowledge,  information  and belief,  these matters and facts
are true in all  material  respects  and that this  statement  is made under the
penalties for perjury.

<PAGE>

     IN WITNESS WHEREOF,  the Corporation has caused these Articles to be signed
in its name and on its behalf by its  President and attested to by its Secretary
on this 25th day of April, 2005.

ATTEST:                                       BOULDER GROWTH & INCOME FUND, INC.

/s/ Stephanie Kelley                          /s/ Stephen C. Miller
Stephanie J. Kelley                           Stephen C. Miller
Secretary                                     President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2B
<SEQUENCE>6
<FILENAME>bbifbylaws051804.txt
<DESCRIPTION>EXHIBIT (2)(B) AMENDED AND RESTATED BYLAWS
<TEXT>
EXHIBIT 99.(2)(b)
AMENDED AND RESTATED BYLAWS


                       BOULDER GROWTH & INCOME FUND, INC.

                            AMENDED & RESTATED BYLAWS

                                    ARTICLE I

                                     OFFICES

     Section 1. PRINCIPAL OFFICE. The principal office of the Corporation in the
State of Maryland  shall be located at such place as the Board of Directors  may
designate.

     Section 2. ADDITIONAL OFFICES. The Corporation may have additional offices,
including a principal executive office, at such places as the Board of Directors
may from time to time determine or the business of the Corporation may require.


                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

     Section  1.  PLACE.  All  meetings  of  stockholders  shall  be held at the
principal executive office of the Corporation or at such other place as shall be
set by the Board of Directors and stated in the notice of the meeting.

     Section 2. ANNUAL MEETING.  In 2004, an annual meeting of the  stockholders
for the election of directors  and the  transaction  of any business  within the
powers of the Corporation  shall be held on a date and at the time and place set
by the Board of Directors during the month of May. Commencing in 2005, an annual
meeting of the stockholders for the election of directors and the transaction of
any business within the powers of the Corporation shall be held on a date and at
the time and place set by the Board of  Directors  during  the month of April in
each year.

     Section 3. SPECIAL MEETINGS.

          (a) General.  The Chairman of the Board, the President or the Board of
     Directors  may call a  special  meeting  of the  stockholders.  Subject  to
     subsection (b) of this Section 3, a special meeting of  stockholders  shall
     also be called by the Secretary of the Corporation upon the written request
     of stockholders  entitled to cast not less than twenty-five  percent of all
     the votes entitled to be cast at such meeting.

          (b) Special Meetings Requested by Stockholders.

               (1) Any  stockholder  of  record  seeking  to  have  stockholders
          request a special  meeting  shall,  by sending  written  notice to the
          Secretary  (the  "Record  Date Request  Notice") by  registered  mail,
          return  receipt  requested,  request  the  fixing of a record  date to
          determine the stockholders  entitled to request a special meeting (the
          "Request Record Date").  The Request Record Date shall be the Business
          Day (as defined below) immediately  following the date the Record Date
          Request Notice is received by the  Secretary.  The Record Date Request
          Notice  shall set forth the  purpose of the  meeting  and the  matters
          proposed  to be  acted  on at it,  shall  be  signed  by  one or  more
          stockholders  of record as of the date of  signature  (or their agents
          duly  authorized  in a writing  accompanying  the Record Date  Request
          Notice), shall bear the date of signature of each such stockholder (or
          such agent) and shall set forth all information  relating to each such
          stockholder  that must be  disclosed in  solicitations  of proxies for
          election  of  directors  in an election  contest  (even if an election
          contest  is not  involved),  or is  otherwise  required,  in each case
          pursuant to  Regulation  14A (or any  successor  provision)  under the
          Securities Exchange Act of 1934, as amended (the "Exchange Act").

<PAGE>

               (2) In order for any  stockholder  to request a special  meeting,
          the following shall be delivered to the Secretary: One or more written
          requests for a special  meeting signed by  stockholders  of record (or
          their agents duly authorized in a writing accompanying the request) as
          of the Request Record Date entitled to cast not less than  twenty-five
          percent  (the  "Special  Meeting  Percentage")  of all  of  the  votes
          entitled to be cast at such meeting (the "Special  Meeting  Request").
          In  addition,  the  Special  Meeting  Request  (a) shall set forth the
          purpose of the meeting  and the matters  proposed to be acted on at it
          (which  shall be  limited  to those  lawful  matters  set forth in the
          Record Date Request Notice received by the Secretary),  (b) shall bear
          the date of signature of each such stockholder (or such agent) signing
          the Special Meeting Request, (c) shall set forth the name and address,
          as they appear in the Corporation's books, of each stockholder signing
          such  request  (or on whose  behalf  the  Special  Meeting  Request is
          signed) and the class, series and number of all shares of stock of the
          Corporation which are owned by each such stockholder,  and the nominee
          holder  for,  and  number  of,   shares  owned  by  such   stockholder
          beneficially but not of record,  (d) shall be sent to the Secretary by
          registered mail, return receipt  requested,  and (e) shall be received
          by the  Secretary  within 30 days after the Request  Record Date.  Any
          requesting   stockholder  (or  agent  duly  authorized  in  a  writing
          accompanying the revocation or the Special Meeting Request) may revoke
          his,  her or its request for a special  meeting at any time by written
          revocation delivered to the Secretary.

               (3) The Secretary shall inform the requesting stockholders of the
          reasonably  estimated  cost of  preparing  and  mailing  the notice of
          meeting (including the Corporation's  proxy materials).  The Secretary
          shall not be  required  to call a  special  meeting  upon  stockholder
          request and such meeting shall not be held unless,  in addition to the
          documents  required by paragraph  (2) above,  the  Secretary  receives
          payment of such reasonably  estimated cost prior to the mailing of any
          notice of the meeting.  The Board of  Directors  may revoke the notice
          for  any  Stockholder   Requested   Meeting  (defined  below)  if  the
          requesting  stockholders  fail to comply with the  provisions  of this
          paragraph (3).

               (4) Except as provided in the next sentence,  any special meeting
          shall be held at such place, date and time as may be designated by the
          Chairman  of the  Board,  the  President  or the  Board of  Directors,
          whoever has called the  meeting.  In the case of any  special  meeting
          called  by  the  Secretary  upon  the  request  of   stockholders   (a
          "Stockholder  Requested Meeting"),  such meeting shall be held at such
          place,  date and time as may be  designated by the Board of Directors;
          provided,  however, that the date of any Stockholder Requested Meeting
          shall be not be less  than 60 nor more than 90 days  after the  record
          date for such  meeting  (the  "Meeting  Record  Date");  and  provided
          further that if the Board of  Directors  fails to designate a date and
          time for a  Stockholder  Requested  Meeting  within ten days after the
          date that a valid Special Meeting Request is received by the Secretary
          (the  "Delivery  Date"),  then such meeting shall be held at 2:00 p.m.
          local time on the 90th day after the  Meeting  Record Date or, if such
          90th day is not a Business Day, on the first  preceding  Business Day;
          and  provided  further  that in the event that the Board of  Directors
          fails to designate a place for a Stockholder  Requested Meeting within
          ten days after the Delivery  Date,  then such meeting shall be held at
          the principal  executive office of the  Corporation.  In fixing a date
          for any special  meeting,  the Chairman of the Board, the President or
          the Board of  Directors  may  consider  such  factors as he, she or it
          deems relevant  within the good faith  exercise of business  judgment,
          including,  without  limitation,  the  nature  of  the  matters  to be
          considered,  the facts and  circumstances  surrounding any request for
          meeting  and any plan of the  Board  of  Directors  to call an  annual
          meeting or a special meeting. In the case of any Stockholder Requested
          Meeting,  if the Board of Directors fails to fix a Meeting Record Date
          that is a date within 30 days after the Delivery Date,  then the close
          of  business  on the 30th day after  the  Delivery  Date  shall be the
          Meeting Record Date.

<PAGE>

               (5) If written  revocations  of requests for the special  meeting
          have  been   delivered  to  the  Secretary  and  the  result  is  that
          stockholders  of record (or their agents duly  authorized in writing),
          as of the Request Record Date,  entitled to cast less than the Special
          Meeting  Percentage  have delivered,  and not revoked,  requests for a
          special  meeting to the  Secretary,  the Secretary  shall:  (i) if the
          notice of meeting has not been mailed, refrain from mailing the notice
          of the meeting and send to all  requesting  stockholders  who have not
          revoked  such  requests  written  notice  that the  requisite  Special
          Meeting  Percentage has not been met because of such  revocations,  or
          (ii) if the notice of  meeting  has been  mailed and if the  Secretary
          first  sends to all  requesting  stockholders  who  have  not  revoked
          requests for a special  meeting  written notice of any revocation of a
          request for the special  meeting and written notice of the Secretary's
          intention  to revoke the notice of the  meeting,  revoke the notice of
          the meeting at any time before ten days before the commencement of the
          meeting. Any request for a special meeting received after a revocation
          by the  Secretary  of a notice  of a  meeting  shall be  considered  a
          request for a new special meeting.

               (6) The  Board of  Directors,  the  Chairman  of the Board or the
          President  may appoint  independent  inspectors of elections to act as
          the agent of the Corporation for the purpose of promptly  performing a
          ministerial  review of the validity of any purported  Special  Meeting
          Request  received by the Secretary.  For the purpose of permitting the
          inspectors to perform such review,  no such purported request shall be
          deemed to have been  delivered to the  Secretary  until the earlier of
          (i)  three  Business  Days  after  receipt  by the  Secretary  of such
          purported  request  and (ii) such date as the  independent  inspectors
          certify to the  Corporation  that the valid  requests  received by the
          Secretary represent at least the Special Meeting  Percentage.  Nothing
          contained  in this  paragraph  (6)  shall in any way be  construed  to
          suggest or imply that the Corporation or any stockholder  shall not be
          entitled to contest the  validity of any  request,  whether  during or
          after such three  Business  Day  period,  or to take any other  action
          (including,  without  limitation,  the  commencement,  prosecution  or
          defense of any  litigation  with respect  thereto,  and the seeking of
          injunctive relief in such litigation).

<PAGE>

               (7) For purposes of these Bylaws,  the term  "Business Day" shall
          mean any day  other  than a  Saturday,  a Sunday or other day on which
          banking  institutions  in the  State of  Colorado  are  authorized  or
          obligated by law or executive order to close.

     Section  4.  NOTICE.  Not less than ten nor more than 90 days  before  each
meeting of stockholders,  the Secretary shall give to each stockholder  entitled
to vote at such  meeting  and to each  stockholder  not  entitled to vote who is
entitled to notice of the meeting written or printed notice stating the time and
place of the meeting and, in the case of a special  meeting or as otherwise  may
be required by any statute, the purpose for which the meeting is called,  either
by mail, by presenting it to such stockholder  personally,  by leaving it at the
stockholder's  residence  or  usual  place of  business  or by any  other  means
permitted  by Maryland  law. If mailed,  such notice shall be deemed to be given
when  deposited in the United States mail  addressed to the  stockholder  at the
stockholder's  address  as it appears on the  records of the  Corporation,  with
postage thereon prepaid.

     Subject  to  Section  11(a)  of  this  Article  II,  any  business  of  the
Corporation may be transacted at an annual meeting of stockholders without being
specifically  designated  in the notice,  except such business as is required by
any statute to be stated in such notice.  No business  shall be  transacted at a
special meeting of stockholders except as specifically designated in the notice.

     Section 5. ORGANIZATION AND CONDUCT. Every meeting of stockholders shall be
conducted by an individual appointed by the Board of Directors to be chairman of
the  meeting  or, in the  absence of such  appointment,  by the  Chairman of the
Board,  if any,  or, in the case of a vacancy  in the  office or  absence of the
Chairman of the Board, by one of the following  officers present at the meeting:
the Vice Chairman of the Board, if any, the President,  any Vice President,  the
Secretary,  the Treasurer or, in the absence of such officers, a chairman chosen
by the  stockholders by the vote of a majority of the votes cast by stockholders
present in person or by proxy. The Secretary or, in the Secretary's  absence, an
Assistant  Secretary  or, in the  absence of both the  Secretary  and  Assistant
secretaries,  an  individual  appointed  by the  Board of  Directors  or, in the
absence of such  appointment,  an  individual  appointed  by the chairman of the
meeting  shall act as secretary.  In the event that the Secretary  presides at a
meeting of the  stockholders,  an  Assistant  Secretary,  or, in the  absence of
Assistant secretaries,  an individual appointed by the Board of Directors or the
chairman of the meeting,  shall record the minutes of the meeting.  The order of
business and all other matters of procedure at any meeting of stockholders shall
be  determined  by the chairman of the meeting.  The chairman of the meeting may
prescribe such rules, regulations and procedures and take such action as, in the
discretion  of such  chairman,  are  appropriate  for the proper  conduct of the
meeting,  including,  without limitation,  (a) restricting admission to the time
set for the commencement of the meeting;  (b) limiting attendance at the meeting
to stockholders of record of the Corporation,  their duly authorized proxies and
representatives  and other such  individuals  as the chairman of the meeting may
determine;   (c)  limiting  participation  at  the  meeting  on  any  matter  to
stockholders of record of the Corporation entitled to vote on such matter, their
duly authorized proxies or other such individuals as the chairman of the meeting
may  determine;  (d)  limiting  the time  allotted to  questions  or comments by
participants;  (e) determining  when the polls should be opened and closed;  (f)
maintaining  order and security at the meeting;  (g) removing any stockholder or
any other  individual  who refuses to comply with meeting  procedures,  rules or
guidelines  as set forth by the  chairman of the meeting;  and (h)  concluding a
meeting or recessing or adjourning the meeting to a later date and time and at a
place announced at the meeting.  Unless otherwise  determined by the chairman of
the  meeting,  meetings  of  stockholders  shall not be  required  to be held in
accordance with the rules of parliamentary procedure.

<PAGE>

     Section 6.  QUORUM.  The  presence  in person or by proxy of the holders of
shares of stock of the  Corporation  entitled  to cast a  majority  of the votes
entitled to be cast (without  regard to class) shall  constitute a quorum at any
meeting of the stockholders,  except with respect to any such matter that, under
applicable statutes or regulatory requirements,  requires approval by a separate
vote of one or more classes of stock, in which case the presence in person or by
proxy of the holders of shares entitled to cast a majority of the votes entitled
to be cast by each such class on such a matter shall  constitute a quorum.  This
section shall not affect any requirement under any statute or the charter of the
Corporation for the vote necessary for the adoption of any measure.

     If,  however,  such  quorum  shall not be  present  at any  meeting  of the
stockholders,  the chairman of the meeting or the stockholders  entitled to vote
at such meeting,  present in person or by proxy, shall have the power to adjourn
the  meeting  from  time to time to a date not more  than  120  days  after  the
original record date without notice other than  announcement at the meeting.  At
such adjourned  meeting at which a quorum shall be present,  any business may be
transacted  which  might  have been  transacted  at the  meeting  as  originally
notified.

     The  stockholders  present either in person or by proxy, at a meeting which
has been duly called and  convened,  may  continue to  transact  business  until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.

     Section  7.  VOTING.  A  plurality  of all the votes  cast at a meeting  of
stockholders duly called and at which a quorum is present shall be sufficient to
elect a director.  Each share may be voted for as many  individuals as there are
directors  to be elected  and for whose  election  the share is  entitled  to be
voted. A majority of the votes cast at a meeting of stockholders duly called and
at which a quorum is present  shall be  sufficient  to approve any other  matter
which may  properly  come  before the  meeting,  unless more than or less than a
majority  of the votes cast is  required  by  statute  or by the  charter of the
Corporation.  Unless otherwise provided in the charter,  each outstanding share,
regardless of class, shall be entitled to one vote on each matter submitted to a
vote at a meeting of stockholders.

     Section 8. PROXIES. A stockholder may cast the votes entitled to be cast by
the  shares of stock  owned of record by the  stockholder  in person or by proxy
executed by the stockholder or by the stockholder's duly authorized agent in any
manner  permitted by law. Such proxy or evidence of  authorization of such proxy
shall be filed with the Secretary of the  Corporation  before or at the meeting.
No proxy shall be valid more than eleven months after its date unless  otherwise
provided in the proxy.

<PAGE>

     Section 9.  VOTING OF STOCK BY CERTAIN  HOLDERS.  Stock of the  Corporation
registered in the name of a corporation,  partnership, trust or other entity, if
entitled  to be voted,  may be voted by the  President  or a Vice  President,  a
general partner or trustee thereof,  as the case may be, or a proxy appointed by
any of the  foregoing  individuals,  unless  some  other  person  who  has  been
appointed  to vote  such  stock  pursuant  to a  bylaw  or a  resolution  of the
governing body of such  corporation or other entity or agreement of the partners
of a  partnership  presents  a  certified  copy of  such  bylaw,  resolution  or
agreement,  in which case such person may vote such stock. Any director or other
fiduciary may vote stock registered in his or her name as such fiduciary, either
in person or by proxy.

     Shares of stock of the Corporation directly or indirectly owned by it shall
not be voted at any  meeting and shall not be counted in  determining  the total
number of outstanding shares entitled to be voted at any given time, unless they
are held by it in a  fiduciary  capacity,  in which  case  they may be voted and
shall be counted in determining  the total number of  outstanding  shares at any
given time.

     Section 10. INSPECTORS.  The Board of Directors, in advance of any meeting,
may,  but need not,  appoint one or more  individual  inspectors  or one or more
entities that  designate  individuals as inspectors to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more  inspectors.  In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by  appointment  made by the Board of Directors in advance
of the meeting or at the meeting by the chairman of the meeting. The inspectors,
if any, shall determine the number of shares outstanding and the voting power of
each,  the shares  represented  at the meeting,  the existence of a quorum,  the
validity and effect of proxies,  and shall receive  votes,  ballots or consents,
hear and determine all challenges and questions  arising in connection  with the
right to vote, count and tabulate all votes, ballots or consents,  and determine
the result,  and do such acts as are proper to conduct the election or vote with
fairness to all stockholders. Each such report shall be in writing and signed by
him or her or by a majority of them if there is more than one  inspector  acting
at such meeting.  If there is more than one inspector,  the report of a majority
shall be the report of the inspectors. The report of the inspector or inspectors
on the number of shares represented at the meeting and the results of the voting
shall be prima facie evidence thereof.

     Section 11. ADVANCE NOTICE OF STOCKHOLDER NOMINEES FOR DIRECTOR AND OTHER
STOCKHOLDER PROPOSALS.

          (a) Annual Meetings of Stockholders.

               (1)  Nominations  of  individuals  for  election  to the Board of
          Directors  and the proposal of other  business to be considered by the
          stockholders  may be made at an annual  meeting  of  stockholders  (i)
          pursuant to the  Corporation's  notice of  meeting,  (ii) by or at the
          direction of the Board of Directors or (iii) by any stockholder of the
          Corporation who was a stockholder of record both at the time of giving
          of notice by the  stockholder  as provided  for in this Section and at
          the time of the annual meeting, who is entitled to vote at the meeting
          and who has complied with this Section.

<PAGE>

               (2) For  nominations  or other  business to be  properly  brought
          before an annual meeting by a stockholder  pursuant to clause (iii) of
          paragraph  (a)(1) of this Section 11, the stockholder  must have given
          timely notice  thereof in writing to the Secretary of the  Corporation
          and such other  business must  otherwise be a proper matter for action
          by the  stockholders.  To be timely, a stockholder's  notice shall set
          forth all  information  required  under  this  Section 11 and shall be
          delivered to the  Secretary at the principal  executive  office of the
          Corporation  later than 5:00  p.m.,  Mountain  Time,  on the 120th day
          prior to the first  anniversary  of the date of  mailing of the notice
          for the preceding year's annual meeting;  provided,  however,  that in
          the event that the date of the annual  meeting is  advanced or delayed
          by more  than 30 days from the  first  anniversary  of the date of the
          preceding  year's  annual  meeting,  notice by the  stockholder  to be
          timely must be so delivered not later than 5:00 p.m.,  Mountain  Time,
          on the later of the 120th day prior to the date of such annual meeting
          or the tenth day following the day on which public announcement of the
          date of such  meeting  is first  made.  The public  announcement  of a
          postponement  or adjournment of an annual meeting shall not commence a
          new time period for the giving of a stockholder's  notice as described
          above.  Such  stockholder's  notice  shall  set  forth  (i) as to each
          individual whom the  stockholder  proposes to nominate for election or
          reelection  as a director,  (A) the name,  age,  business  address and
          residence address of such individual, (B) the class, series and number
          of any shares of stock of the Corporation that are beneficially  owned
          by such  individual,  (C) the date such shares were  acquired  and the
          investment  intent of such  acquisition,  (D) whether such stockholder
          believes any such individual is, or is not, an "interested  person" of
          the Corporation,  as defined in the Investment Company Act of 1940, as
          amended, and the rules promulgated thereunder (the "Investment Company
          Act") and information regarding such individual that is sufficient, in
          the  discretion of the Board of Directors or any committee  thereof or
          any authorized officer of the Corporation,  to make such determination
          and (E) all other  information  relating  to such  individual  that is
          required to be disclosed in  solicitations  of proxies for election of
          directors in an election  contest (even if an election  contest is not
          involved),  or  is  otherwise  required,  in  each  case  pursuant  to
          Regulation 14A (or any successor provision) under the Exchange Act and
          the rules thereunder  (including such individual's  written consent to
          being  named in the proxy  statement  as a nominee and to serving as a
          director  if  elected);  (ii)  as  to  any  other  business  that  the
          stockholder  proposes to bring before the meeting,  a  description  of
          such business,  the reasons for proposing such business at the meeting
          and any material interest in such business of such stockholder and any
          Stockholder  Associated Person (as defined below),  individually or in
          the aggregate,  including any  anticipated  benefit to the stockholder
          and the  Stockholder  Associated  Person  therefrom;  (iii)  as to the
          stockholder  giving the notice and any Stockholder  Associated Person,
          the class, series and number of all shares of stock of the Corporation
          which are owned by such stockholder and by such Stockholder Associated
          Person,  if any,  and the nominee  holder for,  and number of,  shares
          owned  beneficially  but not of record by such  stockholder and by any
          such Stockholder  Associated Person; (iv) as to the stockholder giving
          the notice and any  Stockholder  Associated  Person covered by clauses
          (ii) or (iii) of this  paragraph (2) of this Section  11(a),  the name
          and address of such  stockholder,  as they appear on the Corporation's
          stock ledger and current name and address,  if different,  and of such
          Stockholder  Associated  Person;  and (v) to the  extent  known by the
          stockholder  giving  the  notice,  the name and  address  of any other
          stockholder  supporting  the nominee for election or  reelection  as a
          director  or the  proposal  of  other  business  on the  date  of such
          stockholder's notice.

<PAGE>

               (3) For  purposes  of this  Section 11,  "Stockholder  Associated
          Person" of any  stockholder  shall  mean (i) any  person  controlling,
          directly or indirectly,  or acting in concert with, such  stockholder,
          (ii) any beneficial owner of shares of stock of the Corporation  owned
          of record or  beneficially  by such  stockholder  and (iii) any person
          controlling,   controlled  by  or  under  common   control  with  such
          Stockholder Associated Person.

          (b) Special  Meetings of  Stockholders.  Only such  business  shall be
     conducted at a special  meeting of  stockholders as shall have been brought
     before  the  meeting  pursuant  to the  Corporation's  notice  of  meeting.
     Nominations  of  individuals  for election to the Board of Directors may be
     made at a special  meeting of  stockholders  at which  directors  are to be
     elected (i) pursuant to the Corporation's notice of meeting,  (ii) by or at
     the direction of the Board of Directors or (iii) provided that the Board of
     Directors has determined  that  directors  shall be elected at such special
     meeting,  by any  stockholder  of the  Corporation  who is a stockholder of
     record both at the time of giving of notice provided for in this Section 11
     and at the time of the  special  meeting,  who is  entitled  to vote at the
     meeting  and who  complied  with the  notice  procedures  set forth in this
     Section  11. In the  event  the  Corporation  calls a  special  meeting  of
     stockholders  for the purpose of electing  one or more  individuals  to the
     Board of  Directors,  any such  stockholder  may nominate an  individual or
     individuals (as the case may be) for election as a director as specified in
     the Corporation's  notice of meeting, if the stockholder's  notice required
     by paragraph  (2) of this Section 11(a) shall be delivered to the Secretary
     at the principal  executive  office of the  Corporation not later than 5:00
     p.m.,  Mountain  Time,  on the later of the 120th day prior to such special
     meeting or the tenth day following the day on which public  announcement is
     first made of the date of the special meeting and of the nominees  proposed
     by the  Board of  Directors  to be  elected  at such  meeting.  The  public
     announcement  of a postponement  or adjournment of a special  meeting shall
     not commence a new time period for the giving of a stockholder's  notice as
     described above.

          (c) General.

               (1)  Upon  written  request  by the  Secretary  or the  Board  of
          Directors  or any  committee  thereof,  any  stockholder  proposing  a
          nominee for election as a director or any proposal for other  business
          at a meeting of stockholders shall provide,  within five Business Days
          of delivery of such  request (or such other period as may be specified
          in  such  request),   written  verification,   satisfactory,   in  the
          reasonable  discretion  of the  Board of  Directors  or any  committee
          thereof or any authorized  officer of the Corporation,  to demonstrate
          the accuracy of any information  submitted by the stockholder pursuant
          to this  Section 11. If a  stockholder  fails to provide  such written
          verification  within such period,  the information as to which written
          verification  was requested may be deemed not to have been provided in
          accordance with this Section 11.

               (2) Only such  individuals  who are nominated in accordance  with
          this  Section 11 shall be eligible  for  election by  stockholders  as
          directors,  and only such business  shall be conducted at a meeting of
          stockholders  as  shall  have  been  brought  before  the  meeting  in
          accordance  with this  Section 11. The  chairman of the meeting  shall
          have the  power to  determine,  in his or her  reasonable  discretion,
          whether a  nomination  or any other  business  proposed  to be brought
          before  the  meeting  was made or  proposed,  as the  case may be,  in
          accordance with this Section 11.

<PAGE>

               (3) For  purposes of this Section 11, (a) the "date of mailing of
          the  notice"  shall mean 3  business  days after the date of the proxy
          statement  for the  solicitation  of proxies for election of directors
          and (b) "public  announcement"  shall mean  disclosure  (i) in a press
          release  reported  by the Dow Jones News  Service,  Associated  Press,
          Business  Wire,  PR Newswire or  comparable  news service or (ii) in a
          document  publicly  filed by the  Corporation  with the Securities and
          Exchange  Commission  pursuant to the Exchange  Act or the  Investment
          Company Act.

               (4) Notwithstanding the foregoing  provisions of this Section 11,
          a stockholder  shall also comply with all applicable  requirements  of
          state law, the Exchange Act and the rules and  regulations  thereunder
          and of any other applicable laws with respect to the matters set forth
          in this  Section  11.  Nothing  in this  Section 11 shall be deemed to
          affect any right of a stockholder  to request  inclusion of a proposal
          in,  nor the right of the  Corporation  to omit a proposal  from,  the
          Corporation's proxy statement pursuant to Rule 14a-8 (or any successor
          provision) under the Exchange Act.

                                   ARTICLE III

                                    DIRECTORS

     Section 1. GENERAL  POWERS.  The  business  and affairs of the  Corporation
shall be managed under the direction of its Board of Directors.

     Section 2.  NUMBER AND  TENURE.  At any  regular  meeting or at any special
meeting called for that purpose, a majority of the entire Board of Directors may
establish,  increase  or decrease  the number of  directors,  provided  that the
number  thereof  shall  never be less than the  minimum  number  required by the
Maryland  General  Corporation  Law (the  "MGCL"),  nor more than 5, and further
provided  that,  except with  respect to the terms of  directors  elected by the
holders  of  preferred  stock of the  Corporation,  the  tenure  of  office of a
director shall not be affected by any decrease in the number of directors

     Section 3. ANNUAL AND REGULAR  MEETINGS.  An annual meeting of the Board of
Directors  shall be held  immediately  after and at the same place as the annual
meeting of stockholders, no notice other than this Bylaw being necessary. In the
event such  meeting  is not so held,  the  meeting  may be held at such time and
place as shall  be  specified  in a notice  given as  hereinafter  provided  for
special  meetings of the Board of  Directors.  Regular  meetings of the Board of
Directors  shall be held from time to time at such  places and times as provided
by the Board of Directors without notice.

     Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by or at the request of the  chairman of the Board of  Directors,  the
President  or by a  majority  of the  directors  then in  office.  The person or
persons  authorized  to call special  meetings of the Board of Directors may fix
any place as the place for holding any special meeting of the Board of Directors
called by them. The Board of Directors may provide, by resolution,  the time and
place for the  holding of special  meetings  of the Board of  Directors  without
notice other than such resolution.

<PAGE>

     Section 5. NOTICE.  Notice of any special meeting of the Board of Directors
shall be  delivered  personally  or by  telephone,  electronic  mail,  facsimile
transmission,  United  States  mail or  courier to each  director  at his or her
business  or  residence  address.   Notice  by  personal  delivery,   telephone,
electronic mail or facsimile transmission shall be given at least 24 hours prior
to the meeting.  Notice by United States mail shall be given at least three days
prior to the meeting.  Notice by courier  shall be given at least two days prior
to the meeting.  Telephone  notice shall be deemed to be given when the director
or his or her agent is personally given such notice in a telephone call to which
the  director or his or her agent is a party.  Electronic  mail notice  shall be
deemed to be given  upon  transmission  of the  message to the  electronic  mail
address given to the Corporation by the director.  Facsimile transmission notice
shall be deemed to be given upon  completion of the  transmission of the message
to the  number  given  to the  Corporation  by the  director  and  receipt  of a
completed answer-back indicating receipt.  Notice by United States mail shall be
deemed to be given when deposited in the United States mail properly  addressed,
with postage thereon prepaid. Notice by courier shall be deemed to be given when
deposited  with or  delivered  to a  courier  properly  addressed.  Neither  the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting  of the  Board  of  Directors  need  be  stated  in the  notice,  unless
specifically required by statute or these Bylaws.

     Section 6. QUORUM.  A majority of the directors  shall  constitute a quorum
for  transaction of business at any meeting of the Board of Directors,  provided
that, if less than a majority of such  directors are present at said meeting,  a
majority of the  directors  present  may  adjourn the meeting  from time to time
without  further  notice,  and provided  further that if, pursuant to applicable
law, the charter of the Corporation or these Bylaws, the vote of a majority of a
particular group of directors is required for action, a quorum must also include
a majority of such group.

     The directors  present at a meeting which has been duly called and convened
may  continue  to  transact  business  until  adjournment,  notwithstanding  the
withdrawal of enough directors to leave less than a quorum.

     Section 7. VOTING. The action of the majority of the directors present at a
meeting  at which a  quorum  is  present  shall be the  action  of the  Board of
Directors,  unless the concurrence of a greater  proportion is required for such
action by applicable statute or the charter.  If enough directors have withdrawn
from a meeting to leave less than a quorum but the meeting is not adjourned, the
action of the majority of the  directors  still present at such meeting shall be
the  action of the  Board of  Directors,  unless  the  concurrence  of a greater
proportion is required for such action by applicable law or the charter.

     Section 8.  ORGANIZATION.  At each meeting of the Board of  Directors,  the
chairman of the board or, in the absence of the  chairman,  the Vice chairman of
the board,  if any,  shall act as Chairman.  In the absence of both the chairman
and Vice chairman of the board, the chief executive officer or in the absence of
the chief executive officer, the President or in the absence of the President, a
director chosen by a majority of the directors  present,  shall act as Chairman.
The  Secretary  or,  in  his or  her  absence,  an  Assistant  Secretary  of the
Corporation, or in the absence of the Secretary and all Assistant secretaries, a
person appointed by the Chairman, shall act as secretary of the meeting.

<PAGE>

     Section 9. TELEPHONE  MEETINGS.  Directors may  participate in a meeting by
means of a conference telephone or other communications equipment if all persons
participating  in the  meeting  can hear each other at the same  time;  provided
however,  this Section 9 does not apply to any action of the directors  pursuant
to the  Investment  Company Act that requires a vote of the directors to be cast
in person  at the  meeting.  Participation  in a meeting  by these  means  shall
constitute presence in person at the meeting.

     Section 10. CONSENT BY DIRECTORS WITHOUT A MEETING.  Any action required or
permitted  to be taken at any  meeting  of the Board of  Directors  may be taken
without a meeting, if a consent in writing or by electronic transmission to such
action is given by each director and is filed with the minutes of proceedings of
the Board of Directors;  provided however, this Section 10 does not apply to any
action of the directors  pursuant to the Investment  Company Act that requires a
vote of the directors to be cast in person at the meeting.

     Section 11. VACANCIES.  If for any reason any or all the directors cease to
be directors,  such event shall not terminate  the  Corporation  or affect these
Bylaws or the powers of the remaining  directors  hereunder  (even if fewer than
three  directors  remain).  Any vacancy on the Board of Directors  for any cause
other than an increase in the number of directors  shall be filled by a majority
of the remaining  directors,  even if such  majority is less than a quorum.  Any
vacancy  in the number of  directors  created  by an  increase  in the number of
directors may be filled by a majority vote of the entire Board of Directors. Any
individual so elected as director  shall serve until the next annual  meeting of
stockholders and until his or her successor is elected and qualifies.

     Section 12. COMPENSATION. Directors shall not receive any stated salary for
their  services as directors  but, by resolution of the Board of Directors,  may
receive  compensation  per year  and/or  per  meeting  and/or  per visit to real
property  or other  facilities  owned or leased by the  Corporation  and for any
service or activity they performed or engaged in as directors.  Directors may be
reimbursed  for  expenses  of  attendance,  if any, at each  annual,  regular or
special  meeting of the Board of Directors or of any  committee  thereof and for
their  expenses,  if any, in connection  with each property  visit and any other
service or  activity  they  performed  or engaged in as  directors;  but nothing
herein  contained  shall be construed to preclude any directors from serving the
Corporation in any other capacity and receiving compensation therefor.

     Section 13.  LOSS OF  DEPOSITS.  No  director  shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings and
loan  association,  or other  institution  with whom  moneys or stock  have been
deposited or custodied.

     Section 14.  SURETY  BONDS.  Unless  required by law, no director  shall be
obligated to give any bond or surety or other  security for the  performance  of
any of his or her duties.

<PAGE>

     Section 15.  RELIANCE.  Each director,  officer,  employee and agent of the
Corporation  shall,  in the performance of his or her duties with respect to the
Corporation,  be fully justified and protected with regard to any act or failure
to act in reliance  in good faith upon the books of account or other  records of
the  Corporation,  upon  an  opinion  of  counsel  or upon  reports  made to the
Corporation by any of its officers or employees or by the adviser,  accountants,
appraisers or other experts or consultants selected by the Board of Directors or
officers of the  Corporation,  regardless  of whether such counsel or expert may
also be a director.

     Section 16.  COMMON STOCK  DIRECTORS.  At such time as the  Corporation  is
required by law to have greater than a majority of its  directors be persons who
are not  "interested  persons" of the  Corporation (as defined in the Investment
Company  Act),  in the event the  Corporation  has any class of preferred  stock
outstanding  permitting preferred stockholders to elect two members of the Board
of Directors and so long as the preferred  stockholders  have the right to elect
such Directors,  no Directors nominated to represent the common stockholders may
be an "interested person" (as defined in the Investment Company Act).

                                   ARTICLE IV

                                   COMMITTEES

     Section 1. NUMBER,  TENURE AND  QUALIFICATIONS.  The Board of Directors may
appoint from among its members an Executive  Committee,  an Audit  Committee,  a
Nominating Committee and other committees, composed of one or more directors, to
serve at the pleasure of the Board of Directors.

     Section 2.  POWERS.  The Board of  Directors  may  delegate  to  committees
appointed  under  Section 1 of this  Article  any of the  powers of the Board of
Directors, except as prohibited by law.

     Section 3.  MEETINGS.  Notice of committee  meetings  shall be given in the
same manner as notice for special meetings of the Board of Directors. A majority
of the members of the committee shall constitute a quorum for the transaction of
business at any meeting of the committee. The act of a majority of the committee
members  present at a meeting shall be the act of such  committee.  The Board of
Directors  may designate a chairman of any  committee,  and such chairman or, in
the absence of a chairman,  any two  members of any  committee  (if there are at
least two  members of the  Committee)  may fix the time and place of its meeting
unless the Board shall  otherwise  provide.  In the absence of any member of any
such committee,  the members thereof present at any meeting, whether or not they
constitute a quorum,  may appoint  another  director to act in the place of such
absent member. Each committee shall keep minutes of its proceedings.

     Section  4.  TELEPHONE  MEETINGS.  Members of a  committee  of the Board of
Directors  may  participate  in a meeting by means of a conference  telephone or
other communications  equipment if all persons  participating in the meeting can
hear each other at the same  time.  Participation  in a meeting  by these  means
shall constitute presence in person at the meeting, except as otherwise required
under the Investment Company Act.

<PAGE>

     Section 5. CONSENT BY COMMITTEES WITHOUT A MEETING.  Any action required or
permitted  to be taken at any meeting of a committee  of the Board of  Directors
may be taken  without  a  meeting,  if a consent  in  writing  or by  electronic
transmission  to such  action is given by each  member of the  committee  and is
filed with the minutes of proceedings of such committee.

     Section  6.  VACANCIES.  Subject  to the  provisions  hereof,  the Board of
Directors  shall  have the power at any time to  change  the  membership  of any
committee,  to fill all vacancies, to designate alternate members to replace any
absent or disqualified member or to dissolve any such committee.  Subject to the
power of the Board,  the members of the  committee  shall have the power to fill
any vacancies on the committee.

                                    ARTICLE V

                                    OFFICERS

     Section 1.  GENERAL  PROVISIONS.  The  officers  of the  Corporation  shall
include a President,  a Secretary  and a Treasurer and may include a chairman of
the board, a Vice chairman of the board, a chief executive officer,  one or more
Vice Presidents,  a chief operating officer,  a chief financial officer,  one or
more Assistant  secretaries and one or more Assistant  Treasurers.  In addition,
the Board of Directors may from time to time elect such other officers with such
powers and duties as they shall deem necessary or desirable. The officers of the
Corporation shall be elected annually by the Board of Directors, except that the
chief  executive  officer or President may from time to time appoint one or more
Vice  Presidents,  Assistant  secretaries  and  Assistant  Treasurers  or  other
officers.  Each officer  shall hold office until his or her successor is elected
and qualifies or until his or her death, or his or her resignation or removal in
the manner  hereinafter  provided.  Any two or more offices except President and
Vice  President may be held by the same person.  Election of an officer or agent
shall not of itself create  contract  rights  between the  Corporation  and such
officer or agent.

     Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the Corporation
may be  removed,  with or without  cause,  by the Board of  Directors  if in its
judgment the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so  removed.  Any  officer of the  Corporation  may resign at any time by giving
written notice of his or her resignation to the Board of Directors, the chairman
of the board, the President or the Secretary.  Any resignation shall take effect
immediately  upon its receipt or at such later time  specified  in the notice of
resignation.  The acceptance of a resignation  shall not be necessary to make it
effective unless otherwise stated in the resignation.  Such resignation shall be
without prejudice to the contract rights, if any, of the Corporation.

     Section 3. VACANCIES. A vacancy in any office may be filled by the Board of
Directors for the balance of the term.

     Section 4. CHIEF EXECUTIVE OFFICER.  The Board of Directors may designate a
chief  executive  officer.  The  chief  executive  officer  shall  have  general
responsibility  for  implementation  of  the  policies  of the  Corporation,  as
determined by the Board of Directors, and for the management of the business and
affairs of the  Corporation.  He or she may  execute any deed,  mortgage,  bond,
contract or other instrument,  except in cases where the execution thereof shall
be  expressly  delegated  by the Board of  Directors  or by these Bylaws to some
other  officer or agent of the  Corporation  or shall be  required  by law to be
otherwise  executed;  and in general  shall  perform all duties  incident to the
office of chief executive  officer and such other duties as may be prescribed by
the Board of Directors from time to time.

<PAGE>

     Section 5. CHIEF OPERATING OFFICER.  The Board of Directors may designate a
chief  operating   officer.   The  chief   operating   officer  shall  have  the
responsibilities  and duties as set forth by the Board of Directors or the chief
executive officer.

     Section 6. CHIEF FINANCIAL OFFICER.  The Board of Directors may designate a
chief  financial   officer.   The  chief   financial   officer  shall  have  the
responsibilities  and duties as set forth by the Board of Directors or the chief
executive officer.

     Section 7. CHAIRMAN OF THE BOARD.  The Board of Directors shall designate a
chairman of the board. The chairman of the board shall preside over the meetings
of the Board of Directors and of the  stockholders at which he shall be present.
The chairman of the board shall  perform such other duties as may be assigned to
him or her by the Board of Directors.

     Section 8.  PRESIDENT.  In the absence of a chief  executive  officer,  the
President shall in general supervise and control all of the business and affairs
of the Corporation. In the absence of a designation of a chief operating officer
by the Board of Directors,  the President shall be the chief operating  officer.
He or she may execute any deed,  mortgage,  bond,  contract or other instrument,
except in cases where the execution thereof shall be expressly  delegated by the
Board of  Directors  or by these  Bylaws to some  other  officer or agent of the
Corporation or shall be required by law to be otherwise executed; and in general
shall  perform  all duties  incident to the office of  President  and such other
duties as may be prescribed by the Board of Directors from time to time.

     Section 9. VICE PRESIDENTS. In the absence of the President or in the event
of a vacancy in such office,  the Vice  President (or in the event there is more
than one Vice President, the Vice Presidents in the order designated at the time
of their  election or, in the absence of any  designation,  then in the order of
their  election)  shall  perform the duties of the  President and when so acting
shall have all the powers of and be  subject  to all the  restrictions  upon the
President;  and  shall  perform  such  other  duties as from time to time may be
assigned to such Vice  President by the  President or by the Board of Directors.
The Board of Directors may  designate  one or more Vice  Presidents as executive
Vice  President,  senior Vice  Presidents,  or as Vice  President for particular
areas of responsibility.

     Section  10.  SECRETARY.  The  Secretary  shall (a) keep the minutes of the
proceedings  of the  stockholders,  the Board of Directors and committees of the
Board of Directors in one or more books provided for that purpose;  (b) see that
all notices are duly given in accordance  with the provisions of these Bylaws or
as required by law; (c) be custodian of the corporate records and of the seal of
the  Corporation;  (d)  keep a  register  of the  post  office  address  of each
stockholder which shall be furnished to the Secretary by such  stockholder;  (e)
have general charge of the stock transfer books of the  Corporation;  and (f) in
general perform such other duties as from time to time may be assigned to him by
the chief executive officer, the President or by the Board of Directors.

<PAGE>

     Section 11. TREASURER.  The Treasurer shall keep full and accurate accounts
of receipts and  disbursements  in books  belonging to the Corporation and shall
deposit all moneys and other  valuable  effects in the name and to the credit of
the  Corporation  in such  depositories  as may be  designated  by the  Board of
Directors.  In the absence of a designation of a chief financial  officer by the
Board of Directors,  the Treasurer shall be the chief  financial  officer of the
Corporation. The Treasurer shall disburse the funds of the Corporation as may be
ordered  by  the  Board  of   Directors,   taking   proper   vouchers  for  such
disbursements,  and shall render to the President and Board of Directors, at the
regular  meetings of the Board of  Directors  or whenever it may so require,  an
account  of all  his or  her  transactions  as  Treasurer  and of the  financial
condition  of the  Corporation.  If  required  by the  Board of  Directors,  the
Treasurer  shall give the Corporation a bond in such sum and with such surety or
sureties as shall be  satisfactory  to the Board of  Directors  for the faithful
performance  of the duties of his or her office and for the  restoration  to the
Corporation,  in case of his or her death,  resignation,  retirement  or removal
from  office,  of all books,  papers,  vouchers,  moneys and other  property  of
whatever kind in his or her possession or under his or her control  belonging to
the Corporation.

     Section 12. ASSISTANT SECRETARIES AND ASSISTANT  TREASURERS.  The Assistant
secretaries and Assistant Treasurers,  in general,  shall perform such duties as
shall be assigned to them by the Secretary or Treasurer, respectively, or by the
President or the Board of Directors. The Assistant Treasurers shall, if required
by the Board of  Directors,  give bonds for the  faithful  performance  of their
duties in such sums and with such surety or sureties as shall be satisfactory to
the Board of Directors.

<PAGE>

                                   ARTICLE VI

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

     Section 1. CONTRACTS.  The Board of Directors,  the Executive  Committee or
another  committee of the Board of Directors  within the scope of its  delegated
authority  may  authorize  any officer or agent to enter into any contract or to
execute  and  deliver  any  instrument  in the  name  of and  on  behalf  of the
Corporation and such authority may be general or confined to specific instances.
Any  agreement,  deed,  mortgage,  lease or other  document  shall be valid  and
binding upon the  Corporation  when duly authorized or ratified by action of the
Board of  Directors  or the  Executive  Committee  or such other  committee  and
executed by an authorized person.

     Section 2. CHECKS AND DRAFTS.  All checks,  drafts or other  orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the  Corporation  shall be signed by such officer or agent of the Corporation in
such manner as shall from time to time be determined by the Board of Directors.

     Section 3. DEPOSITS.  All funds of the Corporation  shall be deposited from
time to time to the credit of the Corporation in such banks,  trust companies or
other depositories as the Board of Directors may designate.

                                   ARTICLE VII

                                      STOCK

     Section 1. CERTIFICATES. In the event that the Corporation issues shares of
stock  represented by  certificates,  such  certificates  shall be signed by the
officers of the Corporation in the manner  permitted by the MGCL and contain the
statements  and  information  required  by the  MGCL.  In  the  event  that  the
Corporation issues shares of stock without  certificates,  the Corporation shall
provide  to  holders  of such  shares a  written  statement  of the  information
required by the MGCL to be included on stock certificates.

     Section 2. TRANSFERS WHEN  CERTIFICATES  ARE ISSUED.  Upon surrender to the
Corporation or the transfer agent of the Corporation of a stock certificate duly
endorsed  or  accompanied  by  proper  evidence  of  succession,  assignment  or
authority to transfer,  the  Corporation  shall issue a new  certificate  to the
person entitled  thereto,  cancel the old certificate and record the transaction
upon its books. The Corporation  shall be entitled to treat the holder of record
of any share of stock as the holder in fact thereof and, accordingly,  shall not
be bound to recognize  any equitable or other claim to or interest in such share
or on the part of any other  person,  whether  or not it shall  have  express or
other notice thereof,  except as otherwise  provided by the laws of the State of
Maryland.  Notwithstanding  the  foregoing,  transfers of shares of any class of
stock will be subject in all respects to the charter of the  Corporation and all
of the terms and conditions contained therein.

<PAGE>

     Section 3. REPLACEMENT CERTIFICATE. The President, Secretary or any officer
designated by the Board of Directors may direct a new  certificate  to be issued
in place of any certificate previously issued by the Corporation alleged to have
been lost,  stolen or destroyed  upon the making of an affidavit of that fact by
the person  claiming  the  certificate  to be lost,  stolen or  destroyed.  When
authorizing  the issuance of a new  certificate,  an officer  designated  by the
Board of Directors may, in his or her discretion and as a condition precedent to
the  issuance  thereof,  require  the owner of such  lost,  stolen or  destroyed
certificate  or the owner's legal  representative  to advertise the same in such
manner as he shall require and/or to give bond, with sufficient  surety,  to the
Corporation  to  indemnify  it  against  any loss or claim  which may arise as a
result of the issuance of a new certificate.

     Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board of
Directors  may set,  in advance,  a record  date for the purpose of  determining
stockholders  entitled to notice of or to vote at any meeting of stockholders or
determining  stockholders  entitled  to receive  payment of any  dividend or the
allotment  of  any  other  rights,  or in  order  to  make  a  determination  of
stockholders for any other proper purpose.  Such date, in any case, shall not be
prior to the close of  business on the day the record date is fixed and shall be
not more than 90 days and,  in the case of a meeting of  stockholders,  not less
than ten  days,  before  the date on which  the  meeting  or  particular  action
requiring such determination of stockholders of record is to be held or taken.

     In lieu of fixing a record date,  the Board of  Directors  may provide that
the stock transfer books shall be closed for a stated period but not longer than
20 days. If the stock  transfer  books are closed for the purpose of determining
stockholders entitled to notice of or to vote at a meeting of stockholders, such
books shall be closed for at least ten days before the date of such meeting.  If
no record  date is fixed and the stock  transfer  books are not  closed  for the
determination  of  stockholders,  (a) the record date for the  determination  of
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of  business on the day on which the notice of meeting is mailed
or the 30th day before the meeting, whichever is the closer date to the meeting;
and (b) the  record  date for the  determination  of  stockholders  entitled  to
receive  payment of a dividend or an  allotment of any other rights shall be the
close of business on the day on which the resolution of the directors, declaring
the dividend or allotment of rights, is adopted.

     When a  determination  of  stockholders  entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination shall
apply to any adjournment  thereof,  except when (i) the  determination  has been
made through the closing of the transfer  books and the stated period of closing
has expired or (ii) the meeting is  adjourned to a date more than 120 days after
the record date fixed for the  original  meeting,  in either of which case a new
record date shall be determined as set forth herein.

     Section 5. STOCK LEDGER.  The  Corporation  shall maintain at its principal
office or at the office of its  accountants  or transfer  agent,  an original or
duplicate share ledger  containing the name and address of each  stockholder and
the number of shares of each class held by such stockholder.

<PAGE>

     Section 6. FRACTIONAL STOCK;  ISSUANCE OF UNITS. The Board of Directors may
issue  fractional  stock or provide for the issuance of scrip, all on such terms
and under  such  conditions  as they may  determine.  Notwithstanding  any other
provision of the charter or these Bylaws, the Board of Directors may issue units
consisting of different securities of the Corporation.  Any security issued in a
unit shall have the same  characteristics as any identical  securities issued by
the  Corporation,  except that the Board of  Directors  may  provide  that for a
specified  period  securities  of the  Corporation  issued  in such  unit may be
transferred on the books of the Corporation only in such unit.

                                  ARTICLE VIII

                                 ACCOUNTING YEAR

     The Board of Directors shall have the power,  from time to time, to fix the
fiscal year of the Corporation by a duly adopted resolution.

                                   ARTICLE IX

                                  DISTRIBUTIONS

     Section 1. AUTHORIZATION.  Dividends and other distributions upon the stock
of the Corporation  may be authorized by the Board of Directors,  subject to the
provisions  of law and the  charter  of the  Corporation.  Dividends  and  other
distributions may be paid in cash, property or stock of the Corporation, subject
to the provisions of law and the charter.

     Section  2.  CONTINGENCIES.  Before  payment  of  any  dividends  or  other
distributions,  there  may be set aside  out of any  assets  of the  Corporation
available for dividends or other  distributions such sum or sums as the Board of
Directors may from time to time, in its absolute  discretion,  think proper as a
reserve fund for contingencies, for equalizing dividends or other distributions,
for repairing or maintaining  any property of the  Corporation or for such other
purpose as the Board of Directors  shall determine to be in the best interest of
the  Corporation,  and the Board of  Directors  may modify or  abolish  any such
reserve.

                                    ARTICLE X

                                      SEAL

     Section 1. SEAL.  The Board of Directors  may  authorize  the adoption of a
seal by the Corporation.  The seal shall contain the name of the Corporation and
the year of its incorporation and the words  "Incorporated  Maryland." The Board
of  Directors  may  authorize  one or more  duplicate  seals and provide for the
custody thereof.

     Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or required
to affix its seal to a document, it shall be sufficient to meet the requirements
of any law,  rule or  regulation  relating to a seal to place the word  "(SEAL)"
adjacent to the  signature of the person  authorized  to execute the document on
behalf of the Corporation.

<PAGE>

                                   ARTICLE XI

                     INDEMNIFICATION AND ADVANCE OF EXPENSES

     To the maximum extent permitted by Maryland law and the Investment  Company
Act in effect from time to time, the Corporation  shall  indemnify and,  without
requiring  a  preliminary   determination   of  the  ultimate   entitlement   to
indemnification,  shall pay or reimburse reasonable expenses in advance of final
disposition  of a proceeding  to (a) any  individual  who is a present or former
director or officer of the  Corporation and who is made or threatened to be made
a party to the  proceeding  by reason of his or her service in any such capacity
or (b) any individual who, while a director or officer of the Corporation and at
the request of the  Corporation,  serves or has served as a  director,  officer,
partner  or  trustee  of  such   corporation,   real  estate  investment  trust,
partnership, joint venture, trust, employee benefit plan or other enterprise and
who is made or threatened to be made a party to the  proceeding by reason of his
or her service in any such capacity.  The Corporation  may, with the approval of
its Board of Directors or any duly authorized  committee  thereof,  provide such
indemnification and advance for expenses to a person who served a predecessor of
the  Corporation in any of the  capacities  described in (a) or (b) above and to
any employee or agent of the  Corporation or a predecessor  of the  Corporation.
Any  indemnification  or advance of expenses made pursuant to this Article shall
be subject  to  applicable  requirements  of the  Investment  Company  Act.  The
indemnification  and payment of expenses  provided in these  Bylaws shall not be
deemed exclusive of or limit in any way other rights to which any person seeking
indemnification  or payment of expenses may be or may become  entitled under any
bylaw, regulation, insurance, agreement or otherwise.

     Neither  the  amendment  nor repeal of this  Article,  nor the  adoption or
amendment  of any other  provision  of the Bylaws or charter of the  Corporation
inconsistent  with this  Article,  shall  apply to or affect in any  respect the
applicability  of the preceding  paragraph with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.

     No provision of this Article XI shall be effective to protect or purport to
protect any  director or officer of the  Corporation  against  liability  to the
Corporation or its stockholders to which he or she would otherwise be subject by
reason of  willfulness  misfeasance,  bad faith,  gross  negligence  or reckless
disregard of the duties involved in the conduct of his or her office.

                                   ARTICLE XII

                                WAIVER OF NOTICE

     Whenever any notice is required to be given  pursuant to the charter of the
Corporation  or these Bylaws or pursuant to applicable  law, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated  therein,  shall be deemed  equivalent to the giving of
such  notice.  Neither the business to be  transacted  at nor the purpose of any
meeting need be set forth in the waiver of notice,  unless specifically required
by statute.  The  attendance  of any person at any meeting  shall  constitute  a
waiver of notice of such meeting, except where such person attends a meeting for
the express  purpose of  objecting  to the  transaction  of any  business on the
ground that the meeting is not lawfully called or convened.

<PAGE>

                                  ARTICLE XIII

                               AMENDMENT OF BYLAWS

     These   Bylaws,   whether   adopted  by  the  Board  of  Directors  or  the
stockholders,  shall be  subject to  amendment,  alteration  or repeal,  and new
Bylaws may be made, by either (a) the affirmative  vote of a majority of all the
votes cast at a  stockholders  meeting at which a quorum is present;  or (b) the
Board of Directors;  provided,  however, that the Board of Directors may not (i)
amend or repeal a Bylaw that allocates solely to stockholders the power to amend
or repeal  such  Bylaw,  or (ii) amend or repeal  Bylaws or make new Bylaws that
conflict  with or otherwise  alter in any material  respect the effect of Bylaws
previously adopted by the stockholders.

Dated:  May 18, 2004

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2E
<SEQUENCE>7
<FILENAME>bifdrpplanfinal.txt
<DESCRIPTION>EXHIBIT (2)(E) DIVIDEND REINVESTMENT PLAN
<TEXT>
EXHIBIT 99.(2)(e)
DIVIDEND REINVESTMENT PLAN


                          Boulder Growth & Income Fund

             TERMS AND CONDITIONS OF THE DIVIDEND REINVESTMENT PLAN

     Registered  holders  ("Common  Shareholders")  of common stock (the "Common
Shares") of Boulder  Growth & Income Fund (the  "Fund")  will  automatically  be
enrolled (the "Participants") in its Dividend Reinvestment Plan (the "Plan") and
are advised as follows:

     1. THE PLAN  AGENT.  PFPC  Inc.  (the  "Agent")  will act as Agent for each
Participant.  The Agent will open an account for each Participant under the Plan
in the same name in which his or her outstanding Common Shares are registered.

     2. CASH OPTION.  The Fund will declare its income dividends,  capital gains
distributions  or  managed  distributions  ("Distributions")  payable  in Common
Shares,  or, at the  option of Common  Shareholders,  in cash.  Therefore,  each
Participant   will  have  all   Distributions   on  his  or  her  Common  Shares
automatically  reinvested in additional  Common Shares,  unless such Participant
elects to receive such Distributions in cash by contacting the Agent.

     3. MARKET PREMIUM ISSUANCES. If on the payment date for a Distribution, the
net asset value per Common  Share is equal to or less than the market  price per
Common Share plus estimated brokerage commissions, the Agent shall receive newly
issued Common Shares ("Additional Common Shares"), including fractions, from the
Fund for each Participant's  account.  The number of Additional Common Shares to
be  credited   shall  be  determined  by  dividing  the  dollar  amount  of  the
Distribution  by the greater of (i) the net asset value per Common  Share on the
payment  date,  or (ii) 95% of the market  price per Common Share on the payment
date.

     4.  MARKET  DISCOUNT  PURCHASES.  If the net asset  value per Common  Share
exceeds the market price plus  estimated  brokerage  commissions  on the payment
date for a Distribution,  the Agent (or a  broker-dealer  selected by the Agent)
shall endeavor to apply the amount of such  Distribution  on each  Participant's
Common Shares to purchase Common Shares on the open market.  Such purchases will
be made on or after the payment date for such  Distribution but in no event will
purchases be made on or after an ex-dividend  date for a subsequent  dividend on
Common   Shares  or  later  than  30  days  after  the  payment  date  for  such
Distribution.  The weighted average price (including  brokerage  commissions) of
all Common Shares purchased by the Agent, as Agent shall be the price per Common
Share  allocable to each  Participant.  If,  before the Agent has  completed its
purchases, the market price plus estimated brokerage commissions exceeds the net
asset value of the Common Shares as of the payment date, the purchase price paid
by the Agent may exceed the net asset value of the Common  Shares,  resulting in
the acquisition of fewer Common Shares than if such  Distribution  had been paid
in Common  Shares  issued by the Fund. If the Agent is unable to invest the full
Distribution  amount in purchases  in the open market or if the market  discount
shifts to a market premium  during the purchase  period then the Agent may cease
making  purchases  in the open  market the  instant  the Agent is  notified of a
market  premium and may invest the  uninvested  portion of the  Distribution  in
newly issued  Common Shares at the net asset value per Common Share at the close
of business  provided  that, if the net asset value is less than or equal to 95%
of the then current  market  price per Common  Share,  the dollar  amount of the
Distribution  will be divided by 95% of the market  price on the  payment  date.
Participants  should  note that they will not be able to  instruct  the Agent to
purchase  Common Shares at a specific time or at a specific  price.  Open-market
purchases may be made on any securities exchange where Common Shares are traded,
in the over-the-counter market or in negotiated transactions, and may be on such
terms as to price, delivery and otherwise as the Agent shall determine.

<PAGE>

     5. VALUATION.  The market price of Common Shares on a particular date shall
be the last sales price on the  securities  exchange where the Common Shares are
listed on that date (the  "Exchange"),  or, if there is no sale on such Exchange
on that date, then the mean between the closing bid and asked quotations on such
Exchange on such date will be used.  The net asset  value per Common  Share on a
particular  date  shall  be  the  amount  calculated  on  that  date  (or if not
calculated on such date, the amount most recently calculated) by or on behalf of
the Fund in accordance with the Fund's current prospectus.

     6.  SAFEKEEPING.  In order to protect  against loss,  theft or destruction,
Participants may deposit Common Shares registered in their own names and held in
certificate form into their Plan accounts.  Certificates, along with a letter of
instruction,  should be sent to the Agent by registered or certified  mail, with
return  receipt  requested,  or some other form of  traceable  mail and properly
insured.  Participants should not endorse their certificates.  There are no fees
for this service.

     7. TAXATION.  The automatic  reinvestment of Distributions does not relieve
Participants  of any taxes which may be payable on  Distributions.  Participants
will receive tax  information  annually for their  personal  records and to help
them prepare their federal income tax return. For further  information as to tax
consequences  of  participation  in the Plan,  Participants  should consult with
their own tax advisors.

     8.  LIABILITY OF AGENT.  The Agent shall at all times act in good faith and
agrees to use its best efforts within  reasonable  limits to ensure the accuracy
of all services  performed  under this  Agreement and to comply with  applicable
law,  but assumes no  responsibility  and shall not be liable for loss or damage
due to error unless such error is caused by the Agent's  negligence,  bad faith,
or willful misconduct or that of its employees.  Each  Participant's  uninvested
funds  held by the  Agent  will not  bear  interest.  The  Agent  shall  have no
liability in connection  with any inability to purchase Common Shares within the
time  provided,  or with the timing of any purchases  effected.  The Agent shall
have no  responsibility  for the value of Common Shares acquired.  The Agent may
commingle Participants' funds.

     9.  RECORDKEEPING.  The  Agent may hold each  Participant's  Common  Shares
acquired  pursuant to the Plan  together  with the Common Shares of other Common
Shareholders of the Fund acquired pursuant to the Plan in non-certificated  form
in the Agent's name or that of the Agent's nominee.  Distributions on fractional
shares will be credited to each Participant's  account. Each Participant will be
sent a confirmation by the Agent of each acquisition made for his or her account
as soon as  practicable,  but in no event  later  than 60 days,  after  the date
thereof.   Upon  a  Participant's   request,  the  Agent  will  deliver  to  the
Participant,  without charge,  a certificate or certificates for the full Common
Shares.  Although  each  Participant  may from  time to time  have an  undivided
fractional  interest (computed to three decimal places) in a Common Share of the
Fund, no certificates  for a fractional  share will be issued.  Participants may
request a  certificate  by calling the Agent at  1-800-331-1710,  writing to the
Agent at P.O. Box 43027, Providence,  RI 02940-3027, or completing and returning
the  transaction  form  attached  to each Plan  statement.  The Agent will issue
certificates as soon as possible but in no event more than 5 business days after
receipt of a Participant's request. Similarly,  Participants may request to sell
a portion  of the Common  Shares  held by the Agent in their  Plan  accounts  by
calling  the Agent,  writing to the  Agent,  or  completing  and  returning  the
transaction  form  attached  to each Plan  statement.  The Agent  will sell such
Common Shares  through a  broker-dealer  selected by the Agent within 5 business
days of receipt of the request.  The sale price will equal the weighted  average
price of all Common  Shares sold  through the Plan on the day of the sale,  less
brokerage  commissions.  Participants  should  note  that the Agent is unable to
accept instructions to sell on a specific date or at a specific price. Any share
dividends or split shares  distributed  by the Fund on Common Shares held by the
Agent for Participants will be credited to their accounts. In the event that the
Fund makes available to its Common  Shareholders  rights to purchase  additional
Common Shares,  the Common Shares held for each Participant  under the Plan will
be added to other  Common  Shares held by the  Participant  in  calculating  the
number of rights to be issued to each Participant.

<PAGE>

     10. PROXY  MATERIALS.  The Agent will forward to each Participant any proxy
solicitation  material.  The  Agent  will  vote  any  Common  Shares  held for a
Participant  first in  accordance  with the  instructions  set forth on  proxies
returned by such  Participant  to the Fund, and then with respect to any proxies
not returned by such  Participant  to the Fund,  in the same  proportion  as the
Agent votes the proxies returned by the Participants to the Fund.

     11. BROKERS,  NOMINEE  HOLDERS,  ETC. In the case of  shareholders  such as
banks,  brokers  or  nominees  that hold  Common  Shares  for others who are the
beneficial owners, the Agent will administer the Plan on the basis of the number
of Common Shares  certified by the record  shareholder as representing the total
amount  registered  in such  shareholder's  name  and held  for the  account  of
beneficial owners who are to participate in the Plan.

     12. FEES. The Agent's service fee for handling  Distributions  will be paid
by the  Fund.  Each  Participant  will  be  charged  his or her pro  rata  share
(currently  $.02  per  share)  of  brokerage   commissions  on  all  open-market
purchases.  If a Participant elects to have the Agent sell part or all of his or
her Common Shares and remit the  proceeds,  such  Participant  will be charged a
service fee of $15.00 and his or her pro rata share of brokerage  commissions on
the shares sold (currently $.05 per share).  The Participant will not be charged
any other fees for this service.

     13. TERMINATION IN THE PLAN. Each registered  Participant may terminate his
or her account  under the Plan at any time by notifying  the Agent in writing at
P.O.  Box  43027,   Providence,   RI   02940-3027,   by  calling  the  Agent  at
1-800-331-1710  or by completing and returning the transaction  form attached to
each Plan  statement.  Such  termination  will be  effective  with  respect to a
particular  Distribution if the Participant's notice is received by the Agent at
least  ten  days  prior  to such  Distribution  record  date.  The  Plan  may be
terminated  by the  Agent or the Fund  upon  notice  in  writing  mailed to each
Participant  at least 60 days prior to the  effective  date of the  termination.
Upon any  termination,  the Agent will cause a certificate or certificates to be
issued for the full  shares  held for each  Participant  under the Plan and cash
adjustment  for any fraction of a Common Share at the then current  market value
of the Common Shares to be delivered to him or her without charge. If preferred,
a Participant may request the sale of all of the Common Shares held by the Agent
in his or her Plan account in order to terminate participation in the Plan. If a
Participant has terminated his or her participation in the Plan but continues to
have Common Shares registered in his or her name, he or she may re-enroll in the
Plan at any time by calling the Agent at 1-800-331-1710.

<PAGE>

     14. AMENDMENT OF THE PLAN. These terms and conditions may be amended by the
Agent or the Fund at any time but,  except  when  necessary  or  appropriate  to
comply  with  applicable  law or the rules or  policies  of the  Securities  and
Exchange Commission or any other regulatory  authority,  only by mailing to each
Participant  appropriate  written notice at least 30 days prior to the effective
date thereof.  The amendment shall be deemed to be accepted by each  Participant
unless,  prior to the effective date thereof,  the Agent receives  notice of the
termination of the Participant's  account under the Plan. Any such amendment may
include an appointment by the Agent of a successor  Agent,  subject to the prior
written approval of the successor Agent by the Fund.

     15.  APPLICABLE  LAW. These terms and  conditions  shall be governed by the
laws of the State of Maryland.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2J
<SEQUENCE>8
<FILENAME>bifcustodyagreemtwibt.txt
<DESCRIPTION>EXHIBIT (2)(J) CUSTODY AGREEMENT WITH IBT
<TEXT>
EXHIBIT 99.(2)(j)
CUSTODY AGREEMENT WITH IBT

                              CUSTODIAN AGREEMENT

     AGREEMENT  made as of this  29th day of  September  2004,  between  Boulder
Growth & Income Fund,  Inc., a company  organized under the laws of the state of
Maryland (the "Fund"), and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust
company (the "Bank").

     WHEREAS,  the Fund is  registered  as a  closed-end  management  investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");

     WHEREAS,  the Fund and Bank are parties to an Administration  Agreement and
Delegation Agreement of even date herewith (the  "Administration  Agreement" and
"Delegation Agreement");

     WHEREAS,  the Bank has at least  the  minimum  qualifications  required  by
Section 17(f)(1) of the 1940 Act to act as custodian of the portfolio securities
and cash of the Fund;

     WHEREAS,  the Fund  desires  to place  and  maintain  all of its  portfolio
securities and cash in the custody of the Bank; and

     WHEREAS,  the Bank is willing to act as custodian for the Fund,  subject to
the terms and conditions of this Agreement.

     NOW, THEREFORE,  in consideration of the mutual covenants herein set forth,
it is agreed between the parties hereto as follows:

     1. Bank Appointed Custodian. The Fund hereby appoints the Bank as custodian
of its  portfolio  securities  and cash  delivered  to the  Bank as  hereinafter
described  and the Bank  agrees to act as such  upon the  terms  and  conditions
hereinafter set forth. For the services  rendered pursuant to this Agreement the
Fund agrees to pay to the Bank the fees set forth on Appendix A hereto.

     2. Definitions.  Whenever used herein, the terms listed below will have the
following meaning:

     2.1 Authorized Person.  Authorized Person will mean any of the persons duly
authorized to give Proper Instructions or otherwise act on behalf of the Fund by
appropriate  resolution of its Board, and set forth in a certificate as required
by Section 4 hereof.

     2.2 Board.  Board will mean the Board of Directors or the Board of Trustees
of the Fund, as the case may be.

     2.3  Security.  The term security as used herein will have the same meaning
assigned to such term in the  Securities  Act of 1933,  as  amended,  including,
without limitation,  any note, stock, treasury stock, bond, debenture,  evidence
of indebtedness,  certificate of interest or participation in any profit sharing
agreement,   collateral-trust   certificate,   preorganization   certificate  or
subscription, transferable share, investment contract, voting-trust certificate,
certificate  of deposit for a security,  fractional  undivided  interest in oil,
gas, or other mineral rights, any put, call,  straddle,  option, or privilege on
any security, certificate of deposit, or group or index of securities (including
any interest therein or based on the value thereof), or any put, call, straddle,
option, or privilege entered into on a national  securities exchange relating to
a foreign currency, or, in general, any interest or instrument commonly known as
a "security," or any certificate of interest or  participation  in, temporary or
interim  certificate  for,  receipt  for,  guarantee  of, or warrant or right to
subscribe to, or option  contract to purchase or sell any of the foregoing,  and
futures, forward contracts and options thereon.

     2.4 Portfolio Security.  Portfolio Security will mean any Security owned by
the Fund.
<PAGE>


     2.5  Officers'   Certificate.   Officers'  Certificate  will  mean,  unless
otherwise indicated, any request,  direction,  instruction,  or certification in
writing signed by any two Authorized Persons of the Fund.

     2.6   Book-Entry   System.   Book-Entry   System  shall  mean  the  Federal
Reserve-Treasury  Department  Book Entry  System for United  States  government,
instrumentality  and agency securities operated by the Federal Reserve Bank, its
successor or successors and its nominee or nominees.

     2.7 Depository. Depository shall mean The Depository Trust Company ("DTC"),
a clearing agency  registered with the Securities and Exchange  Commission under
Section  17A of the  Securities  Exchange  Act of  1934  ("Exchange  Act"),  its
successor or successors and its nominee or nominees. The term "Depository" shall
further  mean and include any other  person  authorized  to act as a  depository
under the 1940 Act,  its  successor or  successors  and its nominee or nominees,
specifically identified in a certified copy of a resolution of the Board.

     2.8 Proper  Instructions.  Proper  Instructions shall mean (i) instructions
regarding  the  purchase  or sale of  Portfolio  Securities,  and  payments  and
deliveries  in  connection  therewith,  given  by  an  Authorized  Person,  such
instructions  to be given in such form and manner as the Bank and the Fund shall
agree upon from time to time,  and (ii)  instructions  (which may be  continuing
instructions)  regarding  other  matters  signed or initialed  by an  Authorized
Person.  Oral instructions  will be considered  Proper  Instructions if the Bank
reasonably  believes them to have been given by an Authorized  Person.  The Fund
shall cause all oral instructions to be promptly confirmed in writing.  The Bank
shall act upon and comply with any subsequent Proper  Instruction which modifies
a prior  instruction  and the sole  obligation  of the Bank with  respect to any
follow-up or confirmatory  instruction  shall be to make  reasonable  efforts to
detect any discrepancy  between the original  instruction and such  confirmation
and to report such  discrepancy to the Fund. The Fund shall be  responsible,  at
the Fund's expense, for taking any action, including any reprocessing, necessary
to correct any such discrepancy or error, and to the extent such action requires
the Bank to act, the Fund shall give the Bank specific Proper Instructions as to
the action required.  Upon receipt by the Bank of an Officers' Certificate as to
the  authorization  by  the  Board  accompanied  by a  detailed  description  of
procedures approved by the Fund, Proper  Instructions may include  communication
effected directly between electro-mechanical or electronic devices provided that
the Board and the Bank agree in writing  that such  procedures  afford  adequate
safeguards for the Fund's assets.

     3. [RESERVED]

     4.  Certification  as to  Authorized  Persons.  The  Secretary or Assistant
Secretary  of the Fund will at all times  maintain  on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank, of
(i) the names and signatures of the Authorized Persons and (ii) the names of the
members of the Board, it being understood that upon the occurrence of any change
in the information set forth in the most recent certification on file (including
without  limitation any person named in the most recent  certification who is no
longer an Authorized Person as designated  therein),  the Secretary or Assistant
Secretary of the Fund will sign a new or amended certification setting forth the
change and the new, additional or omitted names or signatures.  The Bank will be
entitled to rely and act upon any Officers'  Certificate given to it by the Fund
which  has  been  signed  by  Authorized   Persons  named  in  the  most  recent
certification received by the Bank.

     5.  Custody  of Cash.  As  custodian  for the Fund,  the Bank will open and
maintain a separate  account or  accounts in the name of the Fund or in the name
of the Bank,  as Custodian  of the Fund,  and will deposit to the account of the
Fund  all of the  cash of the  Fund,  except  for  cash  held by a  subcustodian
appointed  pursuant to Sections 14.2 or 14.3 hereof,  including  borrowed funds,
delivered  to the  Bank,  subject  only to draft  or  order  by the Bank  acting
pursuant  to the  terms  of this  Agreement.  Pursuant  to the  Bank's  internal
policies  regarding  the  management  of cash  accounts,  the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit account
upon which the Bank reserves  theright to require seven (7) days notice prior to
withdrawal  of cash from such an  account.  Upon  receipt  by the Bank of Proper
Instructions  (which may be continuing  instructions) or in the case of payments
for repurchases of outstanding shares of common stock of the Fund,  notification
from the  Fund's  transfer  agent as  provided  in Section  7,  requesting  such
payment, designating the payee or the account or accounts to which the Bank will
release funds for deposit,  and stating that it is for a purpose permitted under
the terms of this Section 5, specifying the applicable subsection, the Bank will
make  payments of cash held for the  accounts of the Fund,  insofar as funds are
available for that purpose, only as permitted in subsections 5.1-5.9 below.

<PAGE>

     5.1 Purchase of  Securities.  Upon the purchase of securities for the Fund,
against  contemporaneous  receipt  of such  securities  by the  Bank or  against
delivery of such  securities to the Bank in accordance  with generally  accepted
settlement  practices  and  customs  followed  by  U.S.  registered   investment
companies  in the  jurisdiction  or  market  in  which  the  transaction  occurs
registered  in the name of the Fund or in the name of, or properly  endorsed and
in form for transfer to, the Bank,  or a nominee of the Bank, or receipt for the
account of the Bank  pursuant to the  provisions  of Section 6 below,  each such
payment to be made at the purchase  price shown on a broker's  confirmation  (or
transaction  report in the case of Book Entry  Paper (as that term is defined in
Section 6.6 hereof)) of purchase of the  securities  received by the Bank before
such payment is made,  as confirmed in the Proper  Instructions  received by the
Bank before such payment is made.

     5.2 [RESERVED]

     5.3  Distributions and Expenses of the Fund. For the payment on the account
of the Fund of  dividends  or other  distributions  to  shareholders  (including
holders  of the  Fund's  preferred  stock,  if any) as may from  time to time be
declared by the Board,  interest,  taxes,  management  or  administration  fees,
distribution fees, fees of the Bank for its services hereunder and reimbursement
of the expenses and liabilities of the Bank as provided herein or as approved by
the Funds, fees of any transfer agent, fees and expenses for the Board, fees for
legal,  accounting,  and auditing  services,  exchange  listing  fees,  or other
operating expenses of the Fund.

     5.4 Payment in Respect of Securities.  For payments in connection  with the
conversion,   exchange  or  surrender  of  Portfolio  Securities  or  securities
subscribed to by the Fund held by or to be delivered to the Bank.

     5.5 Repayment of Loans.  To repay loans of money made to the Fund,  but, in
the case of final  payment,  only upon  redelivery  to the Bank of any Portfolio
Securities  pledged or  hypothecated  therefor  and upon  surrender of documents
evidencing the loan;

     5.6  Repayment  of Cash.  To repay the cash  delivered  to the Fund for the
purpose of  collateralizing  the  obligation to return to the Fund  certificates
borrowed  from  the  Fund  representing  Portfolio  Securities,  but  only  upon
redelivery to the Bank of such borrowed certificates.

     5.7 Foreign Exchange Transactions.

          (a) For  payments in  connection  with foreign  exchange  contracts or
     options  to  purchase  and sell  foreign  currencies  for  spot and  future
     delivery (collectively, "Foreign Exchange Agreements") which may be entered
     into  by the  Bank on  behalf  of the  Fund  upon  the  receipt  of  Proper
     Instructions,  such Proper  Instructions  to specify the currency broker or
     banking  institution  (which may be the Bank, or any other  subcustodian or
     agent hereunder,  acting as principal) with which the contract or option is
     made, and the Bank shall have no duty with respect to the selection of such
     currency brokers or banking  institutions  with which the Fund deals or for
     their failure to comply with the terms of any contract or option.

<PAGE>

          (b) In order  to  secure  any  payments  in  connection  with  Foreign
     Exchange  Agreements  which may be  entered  into by the Bank  pursuant  to
     Proper Instructions,  the Fund agrees that the Bank shall have a continuing
     lien and  security  interest,  to the extent of any  payment  due under any
     Foreign Exchange Agreement,  in and to any property at any time held by the
     Bank for the Fund's  benefit and which is then in the Bank's  possession or
     control (or in the  possession  or control of any third party acting on the
     Bank's  behalf).   The  Fund  authorizes  the  Bank,  in  the  Bank's  sole
     discretion,  at any time to charge any such  payment  due under any Foreign
     Exchange Agreement against any balance of account standing to the credit of
     the Fund on the Bank's books.

     5.8 Other Authorized  Payments.  For other  authorized  transactions of the
Fund,  or other  obligations  of the Fund  incurred  for proper  Fund  purposes;
provided  that  before  making  any such  payment  the Bank will also  receive a
certified  copy of a  resolution  of the Board  signed by an  Authorized  Person
(other  than  the  Person  certifying  such  resolution)  and  certified  by its
Secretary  or  Assistant  Secretary,  naming  the person or persons to whom such
payment is to be made, and either  describing the  transaction for which payment
is to be made and declaring it to be an authorized  transaction  of the Fund, or
specifying the amount of the obligation for which payment is to be made, setting
forth the purpose for which such  obligation  was  incurred and  declaring  such
purpose to be a proper corporate purpose.

     5.9 Termination.  Upon the termination of this Agreement as hereinafter set
forth pursuant to Section 8 and Section 16 of this Agreement.

     6. Securities.

          6.1 Segregation and Registration. Except as otherwise provided herein,
     and except for  securities  to be delivered to any  subcustodian  appointed
     pursuant  to  Sections  14.2 or 14.3  hereof,  the Bank as  custodian  will
     receive and hold pursuant to the provisions  hereof,  in a separate account
     or  accounts  and  physically  segregated  at all times from those of other
     persons,  any and all  Portfolio  Securities  which may now or hereafter be
     delivered  to it by or for the  account  of the  Fund.  All such  Portfolio
     Securities  will be held or disposed of by the Bank for, and subject at all
     times to the  instructions  of,  the  Fund  pursuant  to the  terms of this
     Agreement.  Subject to the specific provisions herein relating to Portfolio
     Securities that are not physically held by the Bank, the Bank will register
     all Portfolio  Securities (unless otherwise directed by Proper Instructions
     or an Officers'  Certificate),  in the name of a registered  nominee of the
     Bank as defined in the  Internal  Revenue Code and any  Regulations  of the
     Treasury  Department  issued  thereunder,  and will execute and deliver all
     such  certificates in connection  therewith as may be required by such laws
     or regulations  or under the laws of any state.  The Fund will from time to
     time furnish to the Bank  appropriate  instruments  to enable it to hold or
     deliver in proper  form for  transfer,  or to  register  in the name of its
     registered nominee, any Portfolio Securities which may from time to time be
     registered in the name of the Fund.

          6.2 Voting and  Proxies.  Neither the Bank nor any nominee of the Bank
     will  vote  any of the  Portfolio  Securities  held  hereunder,  except  in
     accordance with Proper Instructions or an Officers'  Certificate.  The Bank
     will promptly forward and, where appropriate, execute and deliver, or cause
     to be executed and  delivered,  to the Fund all notices,  proxies and proxy
     soliciting materials delivered to the Bank with respect to such Securities,
     such proxies to be executed by the registered holder of such Securities (if
     registered  otherwise than in the name of the Fund), but without indicating
     the manner in which such proxies are to be voted.

<PAGE>

          6.3  Corporate  Action.  If at any time the Bank is  notified  that an
     issuer of any  Portfolio  Security has taken or intends to take a corporate
     action (a "Corporate Action") that affects the rights, privileges,  powers,
     preferences, qualifications or ownership of a Portfolio Security, including
     without limitation, liquidation,  consolidation,  merger, recapitalization,
     reorganization,  reclassification, subdivision, combination, stock split or
     stock dividend,  which Corporate Action requires an affirmative response or
     action on the part of the holder of such Portfolio Security (a "Response"),
     the Bank shall  notify  the Fund  promptly  of the  Corporate  Action,  the
     Response  required in connection  with the Corporate  Action and the Bank's
     deadline for receipt  from the Fund of Proper  Instructions  regarding  the
     Response (the "Response Deadline").  The Bank shall forward to the Fund via
     telecopier and/or overnight courier all notices,  information statements or
     other materials  relating to the Corporate Action promptly after receipt of
     such materials by the Bank.

               (a) The  Bank  shall  act upon a  required  Response  only  after
          receipt by the Bank of Proper Instructions from the Fund no later than
          5:00 p.m. on the date  specified as the Response  Deadline and only if
          the  Bank  (or  its  agent  or  subcustodian   hereunder)  has  actual
          possession of all necessary  Securities,  consents and other materials
          no  later  than  5:00  p.m.  on the  date  specified  as the  Response
          Deadline.

               (b) The Bank shall  have no duty to act upon a required  Response
          if Proper  Instructions  relating to such  Response and all  necessary
          Securities,  consents and other  materials  are not received by and in
          the  possession  of the  Bank no  later  than  5:00  p.m.  on the date
          specified as the Response Deadline. Notwithstanding,  the Bank may, in
          its sole  discretion,  use its best efforts to act upon a Response for
          which Proper  Instructions  and/or necessary  Securities,  consents or
          other  materials  are received by the Bank after 5:00 p.m. on the date
          specified as the Response  Deadline,  it being acknowledged and agreed
          by the  parties  that  any  undertaking  by the  Bank to use its  best
          efforts in such circumstances shall in no way create any duty upon the
          Bank to complete such Response prior to its expiration.

               (c) In the event that the Fund  notifies  the Bank of a Corporate
          Action  requiring a Response and the Bank has received no other notice
          of such  Corporate  Action,  the Response  Deadline  shall be 48 hours
          prior to the Response expiration time set by the depository processing
          such Corporate Action.

               (d) Section  14.3(c) of this Agreement shall govern any Corporate
          Action  involving  Foreign  Portfolio  Securities  held by an Eligible
          Foreign Sub-Custodian (as defined below).

          6.4 Book-Entry System.  Provided (i) the Bank has received a certified
     copy of a resolution of the Board  specifically  approving deposits of Fund
     assets in the Book-Entry  System,  and (ii) for any  subsequent  changes to
     such  arrangements  following  such  approval,  the Board has  reviewed and
     approved the arrangement and has not delivered an Officer's  Certificate to
     the Bank indicating that the Board has withdrawn its approval:

               (a) The Bank  may keep  Portfolio  Securities  in the  Book-Entry
          System  provided that such Portfolio  Securities are represented in an
          account  ("Account")  of the Bank (or its agent) in such System  which
          shall not include  any assets of the Bank (or such  agent)  other than
          assets held as a fiduciary, custodian, or otherwise for customers;

               (b) The records of the Bank (and any such agent) with  respect to
          the Fund's participation in the Book-Entry System through the Bank (or
          any such agent) will identify by book entry the  Portfolio  Securities
          which are included with other securities  deposited in the Account and
          shall at all times during the regular  business  hours of the Bank (or
          such  agent)  be open  for  inspection  by duly  authorized  officers,
          employees or agents of the Fund.  Where  securities are transferred to
          the Fund's  account,  the Bank shall also, by book entry or otherwise,
          identify  as  belonging  to the Fund a  quantity  of  securities  in a
          fungible bulk of securities  (i) registered in the name of the Bank or
          its nominee,  or (ii) shown on the Bank's  account on the books of the
          Federal Reserve Bank;

               (c) The Bank (or its agent)  shall pay for  securities  purchased
          for the account of the Fund or shall pay cash  collateral  against the
          return of Portfolio Securities loaned by the Fund upon:

<PAGE>

                    (i) receipt of advice from the  Book-Entry  System that such
               Securities have been transferred to the Account,and

                    (ii) the  making of an entry on the  records of the Bank (or
               its agent) to reflect  such  payment and transfer for the account
               of the Fund.  The Bank (or its agent) shall  transfer  securities
               sold or loaned for the account of the Fund upon:

               (d) The Bank  will  promptly  provide  the Fund  with any  report
          obtained  by  the  Bank  or  its  agent  on  the  Book-Entry  System's
          accounting  system,  internal  accounting  control and  procedures for
          safeguarding securities deposited in the Book-Entry System;

          6.5  Use of a  Depository.  Provided  (i)  the  Bank  has  received  a
     certified copy of a resolution of the Board specifically approving deposits
     in DTC or other such Depository and (ii) for any subsequent changes to such
     arrangements  following such approval,  the Board has reviewed and approved
     the arrangement and has not delivered an Officer's  Certificate to the Bank
     indicating that the Board has withdrawn its approval:

               (a) The Bank may use a  Depository  to hold,  receive,  exchange,
          release,  lend,  deliver and otherwise deal with Portfolio  Securities
          including stock dividends,  rights and other items of like nature, and
          to receive  and remit to the Bank on behalf of the Fund all income and
          other payments  thereon and to take all steps  necessary and proper in
          connection with the collection thereof;

               (b) Registration of Portfolio  Securities may be made in the name
          of any nominee or nominees used by such Depository;

               (c) Payment for securities purchased and sold may be made through
          the clearing medium  employed by such  Depository for  transactions of
          participants  acting  through  it.  Upon  any  purchase  of  Portfolio
          Securities,  payment will be made only upon delivery of the securities
          to or for  the  account  of the  Fund  and the  Fund  shall  pay  cash
          collateral  against the return of Portfolio  Securities  loaned by the
          Fund only upon delivery of the Securities to or for the account of the
          Fund;  and upon  any sale of  Portfolio  Securities,  delivery  of the
          Securities will be made only against payment therefor or, in the event
          Portfolio  Securities are loaned,  delivery of Securities will be made
          only  against  receipt of the initial  cash  collateral  to or for the
          account of the Fund; and

               (d) The Bank shall use its best efforts to provide that:

                    (i) The Depository  obtains  replacement of any certificated
               Portfolio  Security  deposited with it in the event such Security
               is lost,  destroyed,  wrongfully taken or otherwise not available
               to be returned to the Bank upon its request;

                    (ii) Proxy  materials  received by a Depository with respect
               to  Portfolio  Securities  deposited  with  such  Depository  are
               forwarded  immediately to the Bank for prompt  transmittal to the
               Fund;

<PAGE>

                    (iii)  Such  Depository   promptly   forwards  to  the  Bank
               confirmation of any purchase or sale of Portfolio  Securities and
               of the  appropriate  book  entry made by such  Depository  to the
               Fund's account;

                    (iv) Such Depository  prepares and delivers to the Bank such
               records with respect to the performance of the Bank's obligations
               and duties  hereunder as may be necessary  for the Fund to comply
               with the recordkeeping  requirements of Section 31(a) of the 1940
               Act and Rule 31(a) thereunder; and

                    (v)  Such  Depository  delivers  to the  Bank  all  internal
               accounting  control  reports,   whether  or  not  audited  by  an
               independent public  accountant,  as well as such other reports as
               the Fund may reasonably  request in order to verify the Portfolio
               Securities held by such Depository.

          6.6 Use of Book-Entry  System for Commercial  Paper.  Provided (i) the
     Bank  has  received  a  certified   copy  of  a  resolution  of  the  Board
     specifically approving participation in a system maintained by the Bank for
     the holding of commercial paper in book-entry form ("Book-Entry Paper") and
     (ii) for each year  following  such  approval  the Board has  received  and
     approved the  arrangements,  upon receipt of Proper  Instructions  and upon
     receipt of confirmation from an Issuer (as defined below) that the Fund has
     purchased such Issuer's Book-Entry Paper, the Bank shall hold in book-entry
     form, on behalf of the Fund,  commercial  paper issued by issuers with whom
     the Bank has  entered  into a  book-entry  agreement  (the  "Issuers").  In
     maintaining procedures for Book-Entry Paper, the Bank agrees that:

               (a) The Bank will maintain all Book-Entry  Paper held by the Fund
          in an account of the Bank that  includes  only  assets  held by it for
          customers;

               (b) The records of the Bank with  respect to the Fund's  purchase
          of Book-Entry  paper through the Bank will  identify,  by  book-entry,
          commercial  paper  belonging  to the  Fund  which is  included  in the
          Book-Entry  System and shall at all times during the regular  business
          hours of the Bank be open for inspection by duly authorized  officers,
          employees or agents of the Fund;

               (c) The Bank shall pay for  Book-Entry  Paper  purchased  for the
          account of the Fund upon  contemporaneous  (i)  receipt of advice from
          the Issuer that such sale of Book-Entry  Paper has been effected,  and
          (ii) the making of an entry on the records of the Bank to reflect such
          payment and transfer for the account of the Fund;

               (d) The Bank shall cancel such Book-Entry  Paper  obligation upon
          the maturity thereof upon  contemporaneous  (i) receipt of advice that
          payment for such  Book-Entry  Paper has been  transferred to the Fund,
          and (ii) making of an entry on the records of the Bank to reflect such
          payment for the account of the Fund; and

               (e) The Bank will send to the Fund such  reports on its system of
          internal  accounting  control with respect to the Book-Entry  Paper as
          the Fund may reasonably request from time to time.

          6.7 Use of Immobilization Programs. Provided (i) the Bank has received
     a certified  copy of a resolution of the Board  specifically  approving the
     maintenance of Portfolio  Securities in an immobilization  program operated
     by a bank which meets the requirements of Section 26(a)(1) of the 1940 Act,
     and (ii) for each year  following  such approval the Board has reviewed and
     approved the arrangement and has not delivered an Officer's  Certificate to
     the Bank  indicating  that the Board has withdrawn  its approval,  the Bank
     shall  enter into such  immobilization  program  with such bank acting as a
     subcustodian hereunder.

          6.8 Eurodollar CDs. Any Portfolio  Securities which are Eurodollar CDs
     may be  physically  held  by  the  European  branch  of  the  U.S.  banking
     institution that is the issuer of such Eurodollar CD (a "European Branch"),
     provided that such Portfolio  Securities are identified on the books of the
     Bank  asbelonging  to the Fund and that the books of the Bank  identify the
     European  Branch holding such  Portfolio  Securities.  Notwithstanding  any
     other provision of this Agreement to the contrary,  except as stated in the
     first  sentence of this  subsection  6.8,  the Bank shall be under no other
     duty with respect to such Eurodollar CDs belonging to the Fund.

<PAGE>

          6.9 Options and Futures Transactions.

               (a) Puts and Calls  Traded  on  Securities  Exchanges,  NASDAQ or
          Over-the-Counter.

                    (i) The Bank shall take  action as to put  options  ("puts")
               and call options  ("calls")  purchased  or sold  (written) by the
               Fund  regarding  escrow or other  arrangements  (i) in accordance
               with the provisions of any agreement entered into upon receipt of
               Proper Instructions among the Bank, any broker-dealer  registered
               with the National  Association of Securities  Dealers,  Inc. (the
               "NASD"), and, if necessary,  the Fund, relating to the compliance
               with the rules of the  Options  Clearing  Corporation  and of any
               registered  national  securities  exchange,  or  of  any  similar
               organization or organizations.

                    (ii) Unless another agreement requires it to do so, the Bank
               shall  be under  no duty or  obligation  to see that the Fund has
               deposited or is maintaining  adequate margin,  if required,  with
               any broker in connection  with any option,  nor shall the Bank be
               under duty or obligation to present such option to the broker for
               exercise  unless it receives Proper  Instructions  from the Fund.
               The Bank shall have no responsibility for the legality of any put
               or call purchased or sold on behalf of the Fund, the propriety of
               any such  purchase or sale,  or the  adequacy  of any  collateral
               delivered to a broker in  connection  with an option or deposited
               to  or  withdrawn  from  a  Segregated  Account  (as  defined  in
               subsection 6.10 below). The Bank specifically,  but not by way of
               limitation,  shall not be under any duty or  obligation  to:  (i)
               periodically  check or notify  the Fund  that the  amount of such
               collateral  held by a broker or held in a  Segregated  Account is
               sufficient  to protect  such broker or the Fund against any loss;
               (ii) effect the return of any  collateral  delivered to a broker;
               or (iii)  advise  the Fund that any  option  it holds,  has or is
               about to expire.  Such  duties or  obligations  shall be the sole
               responsibility of the Fund.

               (b) Puts, Calls and Futures Traded on Commodities Exchanges

                    (i) The Bank shall take action as to puts, calls and futures
               contracts ("Futures") purchased or sold by the Fund in accordance
               with  the  provisions  of any  agreement  entered  into  upon the
               receipt  of Proper  Instructions  among the Fund,  the Bank and a
               Futures  Commission   Merchant  registered  under  the  Commodity
               Exchange  Act,  relating  to  compliance  with  the  rules of the
               Commodity Futures Trading  Commission and/or any Contract Market,
               or any similar  organization or organizations,  regarding account
               deposits in connection with transactions by the Fund.

                    (ii) The  responsibilities  of the Bank as to futures,  puts
               and calls traded on commodities exchanges, any Futures Commission
               Merchant  account and the Segregated  Account shall be limited as
               set forth in subparagraph  (a)(ii) of this Section 6.9 as if such
               subparagraph referred to Futures Commission Merchants rather than
               brokers,  and  Futures  and puts and  calls  thereon  instead  of
               options.

          6.10  Segregated  Account.  The Bank  shall,  upon  receipt  of Proper
     Instructions,  establish and maintain a Segregated  Account or Accounts for
     and on behalf of the Fund.

               (a) Cash and/or  Portfolio  Securities may be transferred  into a
          Segregated  Account  upon  receipt  of  Proper   Instructions  in  the
          following circumstances:

                    (i) in accordance with the provisions of any agreement among
               the  Fund,  the Bank and a  broker-dealer  registered  under  the
               Exchange  Act and a member of the NASD or any Futures  Commission
               Merchant registered under the Commodity Exchange Act, relating to
               compliance with the rules of the Options Clearing Corporation and
               of any registered  national  securities  exchange or theCommodity
               Futures Trading Commission or any registered  Contract Market, or
               of  any   similar   organizations   regarding   escrow  or  other
               arrangements in connection with transactions by the Fund;

<PAGE>

                    (ii) for the purpose of  segregating  cash or  securities in
               connection  with  options  purchased  or  written  by the Fund or
               commodity futures purchased or written by the Fund;

                    (iii) for the deposit of liquid assets,  such as cash,  U.S.
               Government  securities  or other  high  grade  debt  obligations,
               having a market value  (marked to market on a daily basis) at all
               times equal to not less than the aggregate  purchase price due on
               the settlement dates of all the Fund's then  outstanding  forward
               commitment or "when-issued"  agreements  relating to the purchase
               of  Portfolio  Securities  and all the  Fund's  then  outstanding
               commitments under reverse repurchase agreements entered into with
               broker-dealer firms;

                    (iv) for the  purposes  of  compliance  by the Fund with the
               procedures  required by Investment Company Act Release No. 10666,
               or any  subsequent  release or  releases  of the  Securities  and
               Exchange  Commission  relating to the  maintenance  of Segregated
               Accounts by registered investment companies;

                    (v) for other proper  corporate  purposes,  but only, in the
               case of this clause (v),  upon  receipt of, in addition to Proper
               Instructions,  a certified copy of a resolution of the Board,  or
               of the  executive  committee of the Board signed by an officer of
               the  Fund  and   certified  by  the  Secretary  or  an  Assistant
               Secretary,   setting  forth  the  purpose  or  purposes  of  such
               Segregated  Account  and  declaring  such  purposes  to be proper
               corporate purposes.

               (b) Cash and/or  Portfolio  Securities  may be  withdrawn  from a
          Segregated  Account  pursuant to Proper  Instructions in the following
          circumstances:

                    (i) with respect to assets  deposited in accordance with the
               provisions  of any  agreements  referenced  in (a)(i) or  (a)(ii)
               above, in accordance with the provisions of such agreements;

                    (ii) with respect to assets  deposited  pursuant to (a)(iii)
               or  (a)(iv)  above,  for  sale or  delivery  to meet  the  Fund's
               obligations under outstanding  forward  commitment or when-issued
               agreements  for the  purchase of Portfolio  Securities  and under
               reverse repurchase agreements;

                    (iii)  for  exchange  for  other  liquid  assets of equal or
               greater value deposited in the Segregated Account;

                    (iv) to the  extent  that  the  Fund's  outstanding  forward
               commitment  or  when  issued   agreements  for  the  purchase  of
               portfolio securities or reverse repurchase agreements are sold to
               other parties or the Fund's  obligations  thereunder are met from
               assets of the Fund other than those in the Segregated Account;

                    (v) for delivery upon settlement of a forward  commitment or
               when-issued agreement for the sale of Portfolio Securities; or

                    (vi) with  respect to assets  deposited  pursuant  to (a)(v)
               above,  in  accordance  with the  purposes of such account as set
               forth in Proper Instructions.

          6.11  Interest  Bearing Call or Time  Deposits.  The Bank shall,  upon
     receipt of Proper  Instructions  relating  to the  purchase  by the Fund of
     interest-bearing  fixed-term and call  deposits,  transfer cash, by wire or
     otherwise,  in such amounts and to such bank or banks as shall be indicated
     in such Proper  Instructions.  The Bank shall  include in its records  with
     respect to the assets of the Fund appropriate  notation as to the amount of
     each such deposit,  the banking institution with which such deposit is made
     (the  "Deposit  Bank"),  and shall  retain  such forms of advice or receipt
     evidencing  thedeposit,  if any,  as may be  forwarded  to the  Bank by the
     Deposit Bank.  Such deposits  shall be deemed  Portfolio  Securities of the
     Fund and the  responsibility of the Bank therefore shall be the same as and
     no greater  than the Bank's  responsibility  in respect of other  Portfolio
     Securities of the Fund.

<PAGE>

          6.12 Transfer of Securities. The Bank will transfer, exchange, deliver
     or  release  Portfolio  Securities  held by it  hereunder,  insofar as such
     Securities are available for such purpose,  provided that before making any
     transfer,  exchange,  delivery  or  release  under this  Section  only upon
     receipt of Proper  Instructions.  The Proper  Instructions shall state that
     such transfer,  exchange or delivery is for a purpose  permitted  under the
     terms of this Section 6.12, and shall specify the applicable subsection, or
     describe the purpose of the transaction  with sufficient  particularity  to
     permit the Bank to ascertain the  applicable  subsection.  After receipt of
     such Proper  Instructions,  the Bank will  transfer,  exchange,  deliver or
     release Portfolio Securities only in the following circumstances:

               (a) Upon sales of  Portfolio  Securities  for the  account of the
          Fund, against  contemporaneous receipt by the Bank of payment therefor
          in full, or against  payment to the Bank in accordance  with generally
          accepted settlement  practices and customs followed by U.S. registered
          investment  companies  in the  jurisdiction  or  market  in which  the
          transaction  occurs, each such payment to be in the amount of the sale
          price shown in a broker's  confirmation  of sale  received by the Bank
          before such payment is made,  as confirmed in the Proper  Instructions
          received by the Bank before such payment is made;

               (b) In  exchange  for or upon  conversion  into other  securities
          alone or other  securities  and cash  pursuant  to any plan of merger,
          consolidation,  reorganization,  share split-up,  change in par value,
          recapitalization  or  readjustment  or  otherwise,  upon  exercise  of
          subscription,  purchase or sale or other similar rights represented by
          such Portfolio  Securities,  or for the purpose of tendering shares in
          the event of a tender offer therefor,  provided,  however, that in the
          event of an offer of  exchange,  tender  offer,  or other  exercise of
          rights   requiring  the  physical  tender  or  delivery  of  Portfolio
          Securities,  the Bank shall have no liability for failure to so tender
          in a timely manner unless such Proper Instructions are received by the
          Bank at least two business days prior to the date required for tender,
          and  unless  the Bank (or its  agent or  subcustodian  hereunder)  has
          actual possession of such Security at least two business days prior to
          the date of tender;

               (c) Upon  conversion  of Portfolio  Securities  pursuant to their
          terms into other securities;

               (d) For the purpose of  repurchasing  in-kind  shares of the Fund
          upon authorization from the Fund;

               (e) In the  case of  option  contracts  owned  by the  Fund,  for
          presentation to the endorsing broker;

               (f) When  such  Portfolio  Securities  are  called,  redeemed  or
          retired or otherwise become payable;

               (g) For the  purpose  of  effectuating  the  pledge of  Portfolio
          Securities  held by the Bank in order to  collateralize  loans made to
          the Fund by any bank, including the Bank; provided, however, that such
          Portfolio  Securities  will be released  only upon payment to the Bank
          for the account of the Fund of the moneys borrowed,  provided further,
          however,  that in cases  where  additional  collateral  is required to
          secure a borrowing  already  made,  and such fact is made to appear in
          the Proper Instructions, Portfolio Securities may be released for that
          purpose  without  any such  payment.  In the  event  that any  pledged
          Portfolio  Securities  are held by the Bank,  they will be so held for
          the  account  of the  lender,  and  after  notice to the Fund from the
          lender in accordance with the normal  procedures of the lender and any
          loan  agreement  between  the  fund  and the  lender  that an event of
          deficiency or default on the loan has  occurred,  the Bank may deliver
          such pledged Portfolio Securities to or for the account of the lender;

<PAGE>

               (h)  for  the  purpose  of  releasing  certificates  representing
          Portfolio Securities,  against  contemporaneous receipt by the Bank of
          the fair  market  value of such  security,  as set forth in the Proper
          Instructions received by the Bank before such payment is made;

               (i) for the purpose of delivering  securities lent by the Fund to
          a bank or broker dealer,  but only against  receipt in accordance with
          street  delivery  custom  except  as  otherwise  provided  herein,  of
          adequate  collateral  as agreed upon from time to time by the Fund and
          the  Bank,  and  upon  receipt  of  payment  in  connection  with  any
          repurchase  agreement  relating to such securities entered into by the
          Fund;

               (j) for other  authorized  transactions  of the Fund or for other
          proper corporate purposes;  provided that before making such transfer,
          the Bank will also  receive a  certified  copy of  resolutions  of the
          Board,  signed by an  authorized  officer of the Fund  (other than the
          officer  certifying such resolution) and certified by its Secretary or
          Assistant  Secretary,   specifying  the  Portfolio  Securities  to  be
          delivered,  setting forth the transaction in or purpose for which such
          delivery is to be made, declaring such transaction to be an authorized
          transaction  of the  Fund or such  purpose  to be a  proper  corporate
          purpose,  and naming the  person or persons to whom  delivery  of such
          securities shall be made; and

               (k) upon  termination of this Agreement as hereinafter  set forth
          pursuant to Section 8 and Section 16 of this Agreement.

     As to any  deliveries  made by the  Bank  pursuant  to this  Section  6.12,
securities  or cash  receivable in exchange  therefor  shall be delivered to the
Bank.

     7.  Repurchases.  In the case of  payment of assets of the Fund held by the
Bank in connection  with  repurchases by the Fund of outstanding  common shares,
the Bank will rely on  notification by the Fund's transfer agent of a repurchase
of shares and certificates, if issued, in proper form for repurchase before such
payment  is made.  Payment  shall be made in  accordance  with the  Articles  of
Incorporation or Declaration of Trust and By-laws of the Fund (the  "Articles"),
from assets available for said purpose.

     8.  Merger,  Dissolution,  etc.  of  Fund.  In the  case  of the  following
transactions,  not in the ordinary course of business, namely, the merger of the
Fund into or the consolidation of the Fund with another investment company,  the
sale by the  Fund  of all,  or  substantially  all,  of its  assets  to  another
investment   company,  or  the  liquidation  or  dissolution  of  the  Fund  and
distribution  of its  assets,  the Bank  will  promptly  deliver  the  Portfolio
Securities held by it under this Agreement and disburse cash only upon the order
of the Fund set forth in an Officers'  Certificate,  accompanied  by a certified
copy of a resolution of the Board authorizing any of the foregoing transactions.
Upon  completion of such delivery and  disbursement  and the payment of the fees
through the end of the then current term of this  Agreement,  and  disbursements
and expenses of the Bank,  this  Agreement  will terminate and the Bank shall be
released from any and all obligations hereunder.

     9. Actions of Bank Without Prior  Authorization.  Notwithstanding  anything
herein  to the  contrary,  unless  and  until  the Bank  receives  an  Officers'
Certificate to the contrary,  the Bank will take the following  actions  without
prior authorization or instruction of the Fund or the transfer agent:

          9.1 Endorse for collection and collect on behalf of and in the name of
     the  Fund  all  checks,   drafts,   or  other  negotiable  or  transferable
     instruments or other orders for the payment of money received by it for the
     account  of the  Fund  and hold  for the  account  of the Fund all  income,
     dividends,  interest  and  other  payments  or  distributions  of cash with
     respect to the Portfolio Securities held thereunder;

          9.2 Present for payment all coupons and other  income items held by it
     for the account of the Fund which call for payment  upon  presentation  and
     hold the cash received by it upon such payment for the account of the Fund;

<PAGE>

          9.3  Receive  and hold  for the  account  of the  Fund all  securities
     received as a distribution  on Portfolio  Securities as a result of a stock
     dividend,  share  split-up,   reorganization,   recapitalization,   merger,
     consolidation,  readjustment, distribution of rights and similar securities
     issued with respect to any Portfolio Securities held by it hereunder.

          9.4 Execute as agent on behalf of the Fund all necessary ownership and
     other certificates and affidavits  required by the Internal Revenue Code or
     the regulations of the Treasury  Department  issued  thereunder,  or by the
     laws of any state, now or hereafter in effect, inserting the Fund's name on
     such  certificates as the owner of the securities  covered thereby,  to the
     extent it may  lawfully do so and as may be  required to obtain  payment in
     respect  thereof.  The Bank will execute and deliver such  certificates  in
     connection  with Portfolio  Securities  delivered to it or by it under this
     Agreement as may be required under the  provisions of the Internal  Revenue
     Code and any Regulations of the Treasury  Department issued thereunder,  or
     under the laws of any State;

          9.5 Present for payment  all  Portfolio  Securities  which are called,
     redeemed, retired or otherwise become payable, and hold cash received by it
     upon payment for the account of the Fund; and

          9.6 Exchange interim  receipts or temporary  securities for definitive
     securities.

     10.  Collections  and  Defaults.  The Bank will use  reasonable  efforts to
collect any funds which may to its  knowledge  become  collectible  arising from
Portfolio  Securities,  including  dividends,  interest and other income, and to
transmit to the Fund notice actually  received by it of any call for redemption,
offer of exchange,  right of subscription,  reorganization  or other proceedings
affecting such  Securities.  If Portfolio  Securities  upon which such income is
payable are in default or payment is refused  after due demand or  presentation,
the Bank will notify the Fund in writing of any default or refusal to pay within
two business days from the day on which it receives knowledge of such default or
refusal.

     11. Maintenance of Records and Accounting Services.  The Bank will maintain
records with respect to transactions for which the Bank is responsible  pursuant
to the  terms and  conditions  of this  Agreement,  and in  compliance  with the
applicable  rules and  regulations of the 1940 Act. The books and records of the
Bank  pertaining to its actions under this  Agreement and reports by the Bank or
its independent  accountants  concerning its accounting  system,  procedures for
safeguarding  securities  and  internal  accounting  controls  will  be  open to
inspection  and audit at  reasonable  times by  officers of or auditors or other
agents  employed by the Fund and will be preserved by the Bank in the manner and
in accordance with the applicable rules and regulations under the 1940 Act.

     The Bank shall perform fund accounting in accordance with applicable  laws,
regulations and other  applicable  requirements  to which other U.S.  registered
investment  companies are subject and shall keep the books of account and render
statements or copies from time to time as reasonably  requested by the Treasurer
or any executive officer of the Fund.

     The  Bank  shall  assist   generally  in  the  preparation  of  reports  to
shareholders,  regulators and others, audits of accounts,  and other ministerial
matters of like nature.

     12. Fund Evaluation and Yield Calculation

          12.1 Fund  Evaluation.  The Bank shall compute and,  unless  otherwise
     directed by the Board,  determine as of the close of regular trading on the
     New York  Stock  Exchange  on the last day of each week and the last day of
     each month, on which said Exchange is open for unrestricted  trading and as
     of such other days, or hours, if any, as may be authorized by the Board and
     agreed to by the Bank,  the net asset value of a share of capital  stock of
     the Fund, such  determination  to be made in accordance with the provisions
     of the Articles and By-laws of the Fund and the Prospectus and Statement of
     Additional  Information relating to the Fund, as they may from time to time
     be amended, the Fund's  valuationprocedures,  applicable law and regulatory
     guidance,  and any applicable resolutions of the Board at the time in force
     and  applicable;  and promptly to notify the Fund, the proper  exchange and
     the NASD or such other  persons as the Fund may  request of the  results of
     such  computation  and  determination.  In  computing  the net asset  value
     hereunder, the Bank may rely in good faith upon information furnished to it
     by any  Authorized  Person in  respect  of (i) the manner of accrual of the
     liabilities  of the  Fund and in  respect  of  liabilities  of the Fund not
     appearing on its books of account kept by the Bank, (ii) reserves,  if any,
     authorized  by the Board or that no such  reserves  have  been  authorized,
     (iii) the source of the  quotations  to be used in computing  the net asset
     value and (iv) the value to be assigned to any  security for which no price
     quotations are readily available, and the Bank shall not be responsible for
     any loss  occasioned by such reliance or for any good faith reliance on any
     quotations received from a source pursuant to (iii) above.

<PAGE>

          12.2. Yield Calculation. The Bank will compute the performance results
     of the Fund (the "Yield  Calculation") in accordance with the provisions of
     Release  No.  33-6753 and  Release  No. IC- 16245  (February  2, 1988) (the
     "Releases")  promulgated  by the Securities  and Exchange  Commission,  any
     subsequent amendments thereto, and published  interpretations of or general
     conventions accepted by the staff of the Securities and Exchange Commission
     with respect to such releases or the subject  matter  thereof  ("Subsequent
     Staff Positions"), subject to the terms set forth below:

               (a) The Bank shall compute the Yield Calculation for the Fund for
          the  stated  periods of time as shall be  mutually  agreed  upon,  and
          communicate  in a timely manner the result of such  computation to the
          Fund.

               (b) In performing the Yield Calculation, the Bank will derive the
          items  of data  necessary  for the  computation  from the  records  it
          generates and maintains for the Fund pursuant  Section 11 hereof.  The
          Bank shall have no  responsibility  to review,  confirm,  or otherwise
          assume  any  duty  or  liability  with  respect  to  the  accuracy  or
          correctness  of any such data  supplied to it by the Fund,  any of the
          Fund's  designated  agents or any of the Fund's designated third party
          providers.

               (c) At the request of the Bank, the Fund shall  provide,  and the
          Bank shall be entitled to rely on, written standards and guidelines to
          be followed by the Bank in  interpreting  and applying the computation
          methods set forth in the Releases or any Subsequent Staff Positions as
          they specifically apply to the Fund. In the event that the computation
          methods in the  Releases  or the  Subsequent  Staff  Positions  or the
          application  to the Fund of a standard or  guideline  is not free from
          doubt or in the event there is any  question of  interpretation  as to
          the  characterization  of a  particular  security  or any  aspect of a
          security or a payment  with  respect  thereto  (e.g.,  original  issue
          discount,  participating  debt security,  income or return of capital,
          etc.) or otherwise or as to any other element of the computation which
          is pertinent to the Fund, the Fund or its designated  agent shall have
          the  full  responsibility  for  making  the  determination  of how the
          security or payment is to be treated for  purposes of the  computation
          and how the  computation  is to be made  and  shall  inform  the  Bank
          thereof on a timely basis.  The Bank shall have no  responsibility  to
          make  independent  determinations  with  respect  to any item which is
          covered  by  this  Section,  and  shall  not be  responsible  for  its
          computations  made in accordance with such  determinations  so long as
          such computations are mathematically correct.

               (d) The  Fund  shall  keep  the  Bank  informed  of all  publicly
          available  information  and of any  non-public  advice or  information
          obtained by the Fund from its independent auditors or by its personnel
          or the personnel of its  investment  adviser(s),  or Subsequent  Staff
          Positions  related to the  computations  to be  undertaken by the Bank
          pursuant  to this  Agreement  and the Bank shall not be deemed to have
          knowledge of such  information  (except as contained in the  Releases)
          unless it has been furnished to the Bank in writing.

     13. Additional Services. The Bank shall perform the additional services for
the Fund as are set forth on Appendix B hereto.  Appendix B may be amended  from
time to time  upon  agreement  of the  parties  to  include  further  additional
services  to be  provided  by the Bank to the Fund,  at which  time the fees set
forth in Appendix A shall be appropriately increased.

<PAGE>

     14. Duties of the Bank.

          14.1  Performance  of Duties and Standard of Care. In  performing  its
     duties  hereunder  and any other duties listed on any Schedule  hereto,  if
     any,  the Bank  will be  entitled  to  receive  and act upon the  advice of
     independent  counsel of its own  selection,  which may be  counsel  for the
     Fund,  and will be without  liability for any action taken or thing done or
     omitted  to be done in  accordance  with this  Agreement  in good  faith in
     conformity with such advice.

          The Bank will be under no duty or  obligation to inquire into and will
     not be liable for:

               (a)  the  validity  of  the  issue  of any  Portfolio  Securities
          purchased by or for the Fund, the legality of the purchases thereof or
          the propriety of the price incurred therefor;

               (b) the legality of any sale of any  Portfolio  Securities  by or
          for the Fund or the  propriety  of the  amount  for which the same are
          sold;

               (c) the legality of an issue or sale of any common  shares of the
          Fund or the sufficiency of the amount to be received therefor;

               (d) the legality of the  repurchase  of any common  shares of the
          Fund or the propriety of the amount to be paid therefor;

               (e) the legality of the  declaration  of any dividend by the Fund
          or the legality of the  distribution  of any  Portfolio  Securities as
          payment in kind of such dividend; and

               (f) any property or moneys of the Fund unless and until  received
          by it,  and  any  such  property  or  moneys  delivered  or paid by it
          pursuant to the terms hereof.

          Moreover,  the  Bank  will  not be under  any  duty or  obligation  to
     ascertain whether any Portfolio Securities at any time delivered to or held
     by it for the  account of the Fund are such as may  properly be held by the
     Fund under the  provisions of its Articles,  By-laws,  any federal or state
     statutes or any rule or regulation of any governmental agency.

          14.2  Agents and  Subcustodians  with  Respect to Property of the Fund
     Held in the United States.  The Bank may employ agents of its own selection
     in the performance of its duties hereunder and shall be responsible for the
     acts and  omissions of such agents as if  performed by the Bank  hereunder.
     Without limiting the foregoing, certain duties of the Bank hereunder may be
     performed by one or more affiliates of the Bank.

          Upon receipt of Proper Instructions, the Bank may employ subcustodians
     selected  by or at the  direction  of the  Fund,  provided  that  any  such
     subcustodian meets at least the minimum qualifications  required by Section
     17(f)(1)  of the 1940 Act to act as a custodian  of the Fund's  assets with
     respect to property of the Fund held in the United  States.  The Bank shall
     have no  liability  to the Fund or any other person by reason of any act or
     omission of any such subcustodian and the Fund shall indemnify the Bank and
     hold it harmless  from and against any and all  actions,  suits and claims,
     arising directly or indirectly out of the performance of any  subcustodian.
     Upon request of the Bank,  the Fund shall assume the entire  defense of any
     action, suit, or claim subject to the foregoing  indemnity.  The Fund shall
     pay all fees and expenses of any subcustodian.

<PAGE>

          14.3  Duties of the Bank with  Respect  to  Property  of the Fund Held
     Outside of the United States.

               (a)  Appointment  of  Foreign  Custody  Manager.  If the Fund has
          appointed  any person or entity  other than the Bank  Foreign  Custody
          Manager  (as that term is defined  in Rule 17f-5  under the 1940 Act),
          the Bank shall act only upon  Proper  Instructions  from the Fund with
          regard to any of the Fund's Portfolio  Securities or other assets held
          or to be held  outside  of the  United  States,  and the Bank shall be
          without liability for any Claim (as that term is defined in Section 15
          hereof) arising out of maintenance of the Fund's Portfolio  Securities
          or other  assets  outside of the United  States.  The Fund also agrees
          that it shall enter into a written agreement with such Foreign Custody
          Manager that shall obligate such Foreign Custody Manager to provide to
          the Bank in a timely  manner all  information  required by the Bank in
          order to complete  its  obligations  hereunder.  The Bank shall not be
          liable  for any  Claim  arising  out of the  failure  of such  Foreign
          Custody Manager to provide such information to the Bank.

               (b)  Segregation  of  Securities.  The Bank shall identify on its
          books as belonging to the Fund the Foreign  Portfolio  Securities held
          by each foreign  sub-custodian  (each an "Eligible Foreign Custodian,"
          as that term is defined in Rule 17f-5 under the 1940 Act)  selected by
          the  Foreign  Custody  Manager,  subject to receipt by the Bank of the
          necessary  information  from such  Eligible  Foreign  Custodian if the
          Foreign Custody Manager is not the Bank.

               (c)  Transactions in Foreign Custody Account.  Transactions  with
          respect  to the  assets  of  the  Fund  held  by an  Eligible  Foreign
          Custodian shall be effected  pursuant to Proper  Instructions from the
          Fund to the  Bank  and  shall  be  effected  in  accordance  with  the
          applicable  agreement  between  the Foreign  Custody  Manager and such
          Eligible  Foreign  Custodian.  If at any  time any  Foreign  Portfolio
          Securities  shall  be  registered  in the name of the  nominee  of the
          Eligible Foreign  Custodian,  the Fund agrees to hold any such nominee
          harmless  from any  liability  by reason of the  registration  of such
          securities in the name of such nominee.

               Notwithstanding  any provision of this Agreement to the contrary,
          settlement and payment for Foreign Portfolio  Securities  received for
          the account of the Fund and delivery of Foreign  Portfolio  Securities
          maintained  for the account of the Fund may be effected in  accordance
          with  the  customary  established  securities  trading  or  securities
          processing  practices  and  procedures  utilized  by  U.S.  registered
          investment  companies  in the  jurisdiction  or  market  in which  the
          transaction  occurs,   including,   without   limitation,   delivering
          securities  to the  purchaser  thereof or to a dealer  therefor (or an
          agent  for such  purchaser  or  dealer)  against  a  receipt  with the
          expectation of receiving  later payment for such  securities from such
          purchaser or dealer.

               In  connection  with any action to be taken  with  respect to the
          Foreign  Portfolio  Securities  held  hereunder,   including,  without
          limitation,  the exercise of any voting rights,  subscription  rights,
          redemption  rights,  exchange  rights,  conversion  rights  or  tender
          rights,  or any other  action  in  connection  with any  other  right,
          interest or privilege with respect to such  Securities  (collectively,
          the  "Rights"),  the Bank  shall  promptly  transmit  to the Fund such
          information  in connection  therewith as is made available to the Bank
          by the Eligible Foreign  Custodian,  and shall promptly forward to the
          applicable  Eligible  Foreign  Custodian  any  instructions,  forms or
          certifications  with  respect  to such  Rights,  and any  instructions
          relating to the actions to be taken in  connection  therewith,  as the
          Bank shall  receive  from the Fund  pursuant  to Proper  Instructions.
          Notwithstanding the foregoing,  the Bank shall have no further duty or
          obligation with respect to such Rights, including, without limitation,
          the  determination  of whether the Fund is entitled to  participate in
          such  Rights  under   applicable   U.S.  and  foreign   laws,  or  the
          determination  of whether any action proposed to be taken with respect
          to such  Rights  by the  Fund or by the  applicable  Eligible  Foreign
          Custodian will comply with all applicable  terms and conditions of any
          such Rights or any applicable laws or regulations, or market practices
          within the market in which such action is to be taken or omitted.

<PAGE>

               (d) Tax Law. The Bank shall have no  responsibility  or liability
          for any obligations  now or hereafter  imposed on the Fund or the Bank
          as custodian of the Fund by the tax laws of any  jurisdiction,  and it
          shall  be the  responsibility  of the Fund to  notify  the Bank of the
          obligations  imposed on the Fund or the Bank as the  custodian  of the
          Fund  by  the  tax  law  of  any  non-U.S.   jurisdiction,   including
          responsibility  for withholding and other taxes,  assessments or other
          governmental charges,  certifications and governmental reporting.  The
          sole  responsibility  of the Eligible Foreign Custodian with regard to
          such tax law shall be to use  reasonable  efforts  to assist  the Fund
          with respect to any claim for exemption or refund under the tax law of
          jurisdictions for which the Fund has provided such information.

          14.4  Insurance.  The Bank shall use the same care with respect to the
     safekeeping  of Portfolio  Securities and cash of the Fund held by it as it
     uses in respect of its own similar  property  but it need not  maintain any
     special insurance for the benefit of the Fund.

          14.5.  Fees and  Expenses of the Bank.  The Fund will pay or reimburse
     the Bank from time to time for any transfer  taxes payable upon transfer of
     Portfolio   Securities  made  hereunder,   and  for  all  necessary  proper
     disbursements,  expenses  and  charges  made or incurred by the Bank in the
     performance of this Agreement  (including any duties listed on any Schedule
     hereto,  if any)  including any  indemnities  for any loss,  liabilities or
     expense to the Bank as provided  above.  For the  services  rendered by the
     Bank hereunder,  the Fund will pay to the Bank such compensation or fees at
     such  rate and at such  times as shall be  agreed  upon in  writing  by the
     parties from time to time. The Bank will also be entitled to  reimbursement
     by the  Fund for all  reasonable  expenses  incurred  in  conjunction  with
     termination of this Agreement.

          14.6  Advances  by the  Bank.  The Bank may,  in its sole  discretion,
     advance  funds on behalf of the Fund to make any payment  permitted by this
     Agreement  upon  receipt  of any  proper  authorization  required  by  this
     Agreement for such payments by the Fund. Should such a payment or payments,
     with advanced funds,  result in an overdraft (due to insufficiencies of the
     Fund's account with the Bank, or for any other reason) this Agreement deems
     any such  overdraft or related  indebtedness a loan made by the Bank to the
     Fund payable on demand.  Such overdraft  shall bear interest at the current
     rate charged by the Bank for such loans  unless the Fund shall  provide the
     Bank with agreed upon compensating  balances. The Fund agrees that the Bank
     shall have a  continuing  lien and  security  interest to the extent of any
     overdraft or indebtedness  and to the extent required by law, in and to any
     property at any time held by it for the Fund's benefit or in which the Fund
     has an interest and which is then in the Bank's  possession  or control (or
     in the  possession  or  control  of any third  party  acting on the  Bank's
     behalf).  The Fund authorizes the Bank, in the Bank's sole  discretion,  at
     any time to charge any  overdraft or  indebtedness,  together with interest
     due thereon,  against any balance of account  standing to the credit of the
     Fund on the Bank's books.

     15. Limitation of Liability.

          15.1 Notwithstanding anything in this Agreement to the contrary, in no
     event shall the Bank or any of its officers, directors, employees or agents
     (collectively,  the  "Indemnified  Parties")  be  liable to the Fund or any
     third  party,  and the  Fund  shall  indemnify  and  hold  the Bank and the
     Indemnified  Parties  harmless  from and against any and all loss,  damage,
     liability,  actions,  suits,  claims,  costs and expenses,  including legal
     fees, (a "Claim") arising as a result of any act or omission of the Bank or
     any  Indemnified  Party under this  Agreement,  except for any Claim to the
     extent resulting from the negligence,  willful  misfeasance or bad faith of
     the Bank, or any Indemnified Party. Without limiting the foregoing, neither
     the Bank nor the Indemnified  Parties shall be liable for, and the Bank and
     the Indemnified Parties shall be indemnified  against, any Claim arising as
     a result of:

               (a) Any act or omission by the Bank or any  Indemnified  Party in
          good faith reasonable  reliance upon the terms of this Agreement,  any
          Officer's Certificate,  Proper Instructions,  resolution of the Board,
          telegram, telecopier, notice, request, certificate or other instrument
          reasonably believed by the Bank to genuine;

<PAGE>

               (b) Any act or omission of any subcustodian selected by or at the
          direction of the Fund;

               (c) Any act or omission of any Foreign Custody Manager other than
          the Bank or any act or omission of any Eligible  Foreign  Custodian if
          the Bank is not the Foreign Custody Manager;

               (d) Any Corporate Action,  distribution or other event related to
          Portfolio  Securities  which,  at the direction of the Fund,  have not
          been registered in the name of the Bank or its nominee;

               (e) Any Corporate  Action requiring a Response for which the Bank
          has not received Proper  Instructions or obtained actual possession of
          all necessary Securities,  consents or other materials by 5:00 p.m. on
          the date specified as the Response Deadline;

               (f) Any act or omission of any European Branch of a U.S.  banking
          institution  that is the issuer of Eurodollar  CDs in connection  with
          any Eurodollar CDs held by such European Branch;

               (g)  Information  reasonably  relied on in good faith by the Bank
          and  supplied  by  any  Authorized   Person  in  connection  with  the
          calculation  of (i) the net asset value of the shares of capital stock
          of the Fund or (ii) the Performance Calculation; or

               (h) Any  acts  of  God,  strikes,  legal  constraint,  government
          actions, war, emergency conditions, earthquakes, fires, floods, storms
          or other disturbances of nature,  epidemics,  riots,  nationalization,
          expropriation,   currency   restrictions,    interruption,   loss   or
          malfunction of electrical power or other utilities, transportation, or
          telecommunication   systems,  or  computers  and  computer  facilities
          (hardware or  software),  equipment or  transmission  failure,  damage
          reasonably  beyond its control or other causes  reasonably  beyond its
          control.

          15.2 Notwithstanding anything to the contrary in this Agreement, in no
     event  shall the Bank or the  Indemnified  Parties be liable to the Fund or
     any  third  party  for  lost  profits  or  lost  revenues  or any  special,
     consequential,  punitive or  incidental  damages of any kind  whatsoever in
     connection with this Agreement or any activities hereunder.

          15.3  The   indemnification   contained   herein  shall   survive  the
     termination of this Agreement.

     16. Termination.

          16.1 The term of this Agreement shall be one year, commencing upon the
     date hereof (the "Initial  Term"),  unless  earlier  terminated as provided
     herein.  After  the  expiration  of the  Initial  Term,  the  term  of this
     Agreement shall  automatically  renew for successive one-year terms (each a
     "Renewal  Term") unless  written  notice of non-renewal is delivered by the
     non-renewing  party to the other  party no later than  ninety days prior to
     the expiration of the Initial Term or any Renewal Term, as the case may be.
     Either party hereto may terminate this Agreement prior to the expiration of
     the Initial Term or any Renewal Term in the event of a Default. A "Default"
     shall  exist  if a  party  fails  to  substantially  perform  its  material
     obligations  under  this  Agreement  or  otherwise  violates  any  material
     provision of this  Agreement,  provided that the  violating  party does not
     cure such  violation  within thirty days of receipt of written  notice from
     the non-violating party of such violation (a "Notice of Violation"),  or if
     the nature of the  violation  is such that it cannot be cured  within  such
     thirty-day period,  the party does not commence  substantive action to cure
     such violation within thirty days of the Notice of Violation.

          16.2 A Default under this  Agreement  shall  constitute a simultaneous
     default under the Administration  Agreement and Delegation Agreement giving
     rise to all appropriate remedies  thereunder,  including early termination.
     Similarly,    a   default   under   the    Administration    Agreement   or
     DelegationAgreement  shall  constitute  a  simultaneous  Default  hereunder
     giving rise to all remedies set forth herein, including early termination.

<PAGE>

          16.3 In the event of the termination of this Agreement,  the Bank will
     immediately  upon receipt or transmittal,  as the case may be, of notice of
     termination,  commence and prosecute  diligently to completion the transfer
     of all cash and the delivery of all Portfolio  Securities duly endorsed and
     all records  maintained  under Section 11 to the successor  custodian  when
     appointed by the Fund.  The  obligation of the Bank to deliver and transfer
     over the assets of the Fund held by it directly to such successor custodian
     will  commence as soon as such  successor  is appointed  and will  continue
     until  completed  as  aforesaid.  If the Fund does not  select a  successor
     custodian  within  fifty (50) days from the date of  delivery  of notice of
     termination  the Bank may,  subject to the  provisions of subsection  16.3,
     deliver the Portfolio Securities and cash of the Fund held by the Bank to a
     bank  or  trust  company  of the  Bank's  own  selection  which  meets  the
     requirements  of  Section  17(f)(1)  of the  1940  Act and  has a  reported
     capital,   surplus  and  undivided   profits   aggregating  not  less  than
     $2,000,000,  to be held as the property of the Fund under terms  similar to
     those on which  they were held by the  Bank,  whereupon  such bank or trust
     company so selected by the Bank will become the successor custodian of such
     assets of the Fund with the same  effect as though  selected  by the Board.
     Thereafter,  the Bank shall be released from any and all obligations  under
     this Agreement.

          16.4  Prior to the  expiration  of fifty  (50)  days  after  notice of
     termination has been given,  the Fund may furnish the Bank with an order of
     the Fund  advising that a successor  custodian  cannot be found willing and
     able to act upon  reasonable  and customary  terms.  In that event the Bank
     will  deliver  the  Portfolio  Securities  and cash of the Fund held by it,
     subject as aforesaid,  upon receipt by the Bank of a copy of the minutes of
     the meeting of the Board at which action was taken, certified by the Fund's
     Secretary  and an  opinion  of  counsel  to the  Fund in form  and  content
     satisfactory to the Bank.  Thereafter,  the Bank shall be released from any
     and all obligations under this Agreement.

               16.4  The  Fund  shall  reimburse  the  Bank  for any  reasonable
          expenses  incurred by the Bank in connection  with the  termination of
          this Agreement.

               16.5 At any time after the  termination  of this  Agreement,  the
          Fund may, upon written request,  have reasonable access to the records
          of the Bank relating to its performance of its duties as custodian.

     17.  Confidentiality.   Both  parties  hereto  agree  that  any  non-public
information obtained hereunder concerning the other party or the shareholders of
the Fund is  confidential  and may not be  disclosed  without the consent of the
other party,  except as may be required by applicable law or at the request of a
governmental  agency.  The parties further agree that a breach of this provision
would irreparably damage the other party and accordingly agree that each of them
is  entitled,  in  addition  to all  other  remedies  at law or in  equity to an
injunction or injunctions  without bond or other security to prevent breaches of
this provision.

     18.  Notices.  Any  notice or other  instrument  in writing  authorized  or
required  by  this  Agreement  to be  given  to  either  party  hereto  will  be
sufficiently  given if  addressed  to such  party and  delivered  via (i) United
States Postal Service registered mail, (ii) facsimile with written confirmation,
(iii) hand  delivery  with  signature to such party at its office at the address
set forth below, namely:

          (a) In the  case of  notices  sent to the Fund  to:

                Boulder  Growth & Income  Fund,  Inc.
                1680 38th  Street,  Suite 800
                Boulder,  CO 80301
                Facsimile  (303) 245-0420
                Attention:  Stephen C. Miller,  President & General Counsel

<PAGE>

          (b) In the case of notices sent to the Bank to:

                Investors Bank & Trust Company
                200  Clarendon  Street,  P.O. Box 9130
                Boston,  Massachusetts 02117-9130
                Facsimile  617-330-6033
                Attention:  Paula A. Lordi, Senior Director - Client  Management
                With a copy to: John E. Henry,  General Counsel

          or at such other  place as such party may from time to time  designate
          in writing.

     19. Amendments.  This Agreement may not be altered or amended, except by an
instrument in writing, executed by both parties.

     20.  Parties.  This  Agreement  will be binding upon and shall inure to the
benefit of the  parties  hereto and their  respective  successors  and  assigns;
provided,  however,  that  this  Agreement  will not be  assignable  by the Fund
without  the  written  consent of the Bank or by the Bank  without  the  written
consent of the Fund,  authorized and approved by its Board; and provided further
that termination proceedings pursuant to Section 16 hereof will not be deemed to
be an assignment within the meaning of this provision.

     21.  Governing  Law. This Agreement and all  performance  hereunder will be
governed by the laws of the  Commonwealth  of  Massachusetts,  without regard to
conflict of laws provisions.

     22.  Counterparts.  This  Agreement  may  be  executed  in  any  number  of
counterparts,  each of  which  shall  be  deemed  to be an  original,  but  such
counterparts shall, together, constitute only one instrument.

     23.  Entire  Agreement.  This  Agreement,  together  with  its  Appendices,
constitutes the sole and entire  agreement  between the parties  relating to the
subject  matter herein and does not operate as an acceptance of any  conflicting
terms or provisions of any other  instrument  and  terminates and supersedes any
and all prior  agreements and  undertakings  between the parties relating to the
subject matter herein.

     24. Limitation of Liability.  The Bank agrees that the obligations  assumed
by the Fund  hereunder  shall be  limited in all cases to the assets of the Fund
and that the Bank shall not seek  satisfaction  of any such  obligation from the
officers, agents, employees, trustees, or shareholders of the Fund.

     25. Non-exclusive Services. The Fund understands that the Bank now acts and
will continue to act as custodian of various investment  companies and fiduciary
of other  managed  accounts,  and the Fund has no  objection  to the  Bank's  so
acting.  In addition,  it is understood that the persons employed by the Bank to
assist in the performance of its duties hereunder may not devote their full time
to such  services  and  nothing  herein  contained  shall be  deemed to limit or
restrict  the  right of the Bank or any  affiliate  of the Bank to engage in and
devote time and attention to other  businesses or to render services of whatever
kind or nature.

     26.  Business  Continuity.  The  Bank  represents  that  it has in  place a
reasonable business continuity plan.



                  [Remainder of Page Intentionally Left Blank]


<PAGE>

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their  respective  officers  thereunto duly authorized as of the day
and year first written above.


                                Boulder Growth & Income Fund, Inc.


                                By: /s/ Stephen C. Miller
                                Stephen C. Miller, President



                                INVESTORS BANK & TRUST COMPANY

                                By: /s/ Robert D. Mancuso
                                Name:   Robert D. Mancuso
                                Title:  Senior Vice President


<PAGE>


                                   Appendices


          Appendix . . . . . . . .. . . . .. . . . . . .. . . . . . Fee Schedule
          Appendix B . . . . . . . . . . . . . . . . . . . . Additional Services

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>9
<FILENAME>taagreementpfpc090203.txt
<DESCRIPTION>EXHIBIT (2)(K)(I) TRANSFER AGENCY AGREEMENT PFPC
<TEXT>
EXHIBIT 99.(2)(k)(i)
TRANSFER AGENCY AGREEMENT WITH PFPC


                       TRANSFER AGENCY SERVICES AGREEMENT


          THIS  AGREEMENT  is made as of  September  2, 2003 by and between PFPC
     INC., a Massachusetts  corporation ("PFPC"),  BOULDER GROWTH & INCOME FUND,
     INC.,  a Maryland  corporation  (the  "Fund")  and solely  with  respect to
     Sections  11,  12 and  16  hereby,  Fund  Administrative  Services,  L.L.C.
     ("FAS").

                              W I T N E S S E T H:

          WHEREAS,  the Fund  wishes  to  retain  PFPC to serve as its  transfer
     agent, registrar, dividend disbursing agent and shareholder servicing agent
     and PFPC wishes to furnish such services.

          NOW, THEREFORE,  in consideration of the premises and mutual covenants
     herein  contained,  and intending to be legally  bound hereby,  the parties
     hereto agree as follows:

     1. Definitions. As Used in this Agreement:

          (a)  "1933 Act" means the Securities Act of 1933, as amended.

          (b)  "1934 Act" means the Securities Exchange Act of 1934, as amended.

          (c)  "Authorized  Person"  means any officer of the Fund and any other
               person  duly  authorized  by the  Fund's  Board of  Directors  or
               Trustees to give Oral  Instructions  and Written  Instructions on
               behalf of the Fund. An Authorized Person's scope of authority may
               be limited by setting forth such limitation in a written document
               signed by both parties hereto.

          (d)  "CEA" means the Commodities Exchange Act, as amended.

          (e)  "Oral Instructions" mean oral instructions  received by PFPC from
               an Authorized Person or from a person reasonably believed by PFPC
               to be an Authorized  Person.  PFPC may, in its sole discretion in
               each separate  instance,  consider and rely upon  instructions it
               receives from an Authorized  Person via  electronic  mail as Oral
               Instructions.

<PAGE>

          (f)  "SEC" means the Securities and Exchange Commission.

          (g)  "Securities  Laws" mean the 1933 Act,  the 1934 Act, the 1940 Act
               and the CEA.

          (h)  "Shares" mean the shares of beneficial  interest of any series or
               class of the Fund.

          (i)  "Written Instructions" mean (i) written instructions signed by an
               Authorized Person and received by PFPC or (ii) trade instructions
               transmitted  (and  received  by PFPC)  by means of an  electronic
               transaction  reporting  system access to which  requires use of a
               password or other authorized identifier.  The instructions may be
               delivered  by  hand,  mail,  tested  telegram,  cable,  telex  or
               facsimile sending device.

     2. Appointment. The Fund hereby appoints PFPC to serve as transfer agent,
     registrar, dividend disbursing agent and shareholder servicing agent to the
     Fund in accordance with the terms set forth in this Agreement. PFPC accepts
     such  appointment  and agrees to furnish  such  services.

     3. Delivery of Documents. The Fund has provided or, where applicable,  will
     provide PFPC with the following:

          (a)  At  PFPC's  request,  certified  or  authenticated  copies of the
               resolutions  of  the  Fund's  Board  of  Directors  or  Trustees,
               approving the  appointment  of PFPC or its  affiliates to provide
               services to the Fund and approving this Agreement;

          (b)  A  copy  of  the  Fund's  most  recent   effective   registration
               statement;

          (c)  A copy of the advisory agreement of the Fund;

          (d)  A copy of the distribution/underwriting agreement with respect to
               each class of Shares of the Fund;

<PAGE>

          (e)  A copy of the  Fund's  administration  agreements  if PFPC is not
               providing the Fund with such services;

          (f)  Copies of any distribution and/or shareholder servicing plans and
               agreements made in respect of the Fund;

          (g)  A copy of the Fund's organizational  documents, as filed with the
               state in which the Fund is organized; and

          (h)  Copies  (certified or authenticated  where applicable) of any and
               all amendments or supplements to the foregoing.

     4.  Compliance with Rules and  Regulations.  PFPC undertakes to comply with
     all applicable  requirements of the Securities Laws and any laws, rules and
     regulations of governmental authorities having jurisdiction with respect to
     the duties to be performed by PFPC hereunder.  Except as  specifically  set
     forth herein,  PFPC assumes no  responsibility  for such  compliance by the
     Fund or any other entity.

     5. Instructions.

          (a)  Unless otherwise provided in this Agreement,  PFPC shall act only
               upon Oral Instructions or Written Instructions.

          (b)  PFPC  shall be  entitled  to rely  upon any Oral  Instruction  or
               Written  Instruction  it receives from an  Authorized  Person (or
               from a person  reasonably  believed  by PFPC to be an  Authorized
               Person) pursuant to this Agreement. PFPC may assume that any Oral
               Instruction or Written  Instruction  received hereunder is not in
               any  way  inconsistent  with  the  provisions  of  organizational
               documents  or  this  Agreement  or of  any  vote,  resolution  or
               proceeding of the Fund's Board of Directors or Trustees or of the
               Fund's  shareholders,  unless  and until  PFPC  receives  Written
               Instructions to the contrary.

<PAGE>

          (c)  The  Fund  agrees  to  forward  to  PFPC   Written   Instructions
               confirming  Oral  Instructions  so that PFPC receives the Written
               Instructions  by the close of  business on the same day that such
               Oral  Instructions  are received.  The fact that such  confirming
               Written  Instructions are not received by PFPC or differ from the
               Oral Instructions  shall in no way invalidate the transactions or
               enforceability  of  the  transactions   authorized  by  the  Oral
               Instructions   or   PFPC's   ability   to  rely  upon  such  Oral
               Instructions.  Where Oral  Instructions  or Written  Instructions
               reasonably  appear  to have  been  received  from  an  Authorized
               Person,  PFPC shall incur no liability to the Fund in acting upon
               such Oral  Instructions  or Written  Instructions  provided  that
               PFPC's  actions   comply  with  the  other   provisions  of  this
               Agreement.

     6. Right to Receive Advice.

          (a)  Advice  of the  Fund.  If PFPC is in  doubt as to any  action  it
               should or should not take, PFPC may request directions or advice,
               including Oral  Instructions  or Written  Instructions,  from the
               Fund.

          (b)  Advice of Counsel.  If PFPC shall be in doubt as to any  question
               of law  pertaining  to any  action it should or should  not take,
               PFPC may request advice from counsel of its own choosing (who may
               be counsel for the Fund, the Fund's  investment  adviser or PFPC,
               at the option of PFPC).

          (c)  Conflicting Advice. In the event of a conflict between directions
               or advice  or Oral  Instructions  or  Written  Instructions  PFPC
               receives from the Fund,  and the advice it receives from counsel,
               PFPC may rely upon and follow the advice of counsel.

<PAGE>

          (d)  Protection  of PFPC.  PFPC  shall be  protected  in any action it
               takes or does not take in reliance  upon  directions or advice or
               Oral  Instructions  or Written  Instructions it receives from the
               Fund or from counsel and which PFPC believes,  in good faith,  to
               be   consistent   with  those   directions   or  advice  or  Oral
               Instructions  or Written  Instructions.  Nothing in this  section
               shall be construed so as to impose an obligation upon PFPC (i) to
               seek such  directions or advice or Oral  Instructions  or Written
               Instructions,  or (ii) to act in accordance  with such directions
               or advice or Oral  Instructions or Written  Instructions  unless,
               under the terms of other  provisions of this Agreement,  the same
               is a  condition  of PFPC's  properly  taking or not  taking  such
               action.

     7. Records; Visits. The books and records pertaining to the Fund, which are
     in the  possession  or under the control of PFPC,  shall be the property of
     the Fund.  Such books and  records  shall be  prepared  and  maintained  as
     required by the 1940 Act and other  applicable  securities  laws, rules and
     regulations.  The Fund and  Authorized  Persons  shall have  access to such
     books and records at all times during PFPC's normal  business  hours.  Upon
     the  reasonable  request of the Fund,  copies of any such books and records
     shall be provided by PFPC to the Fund or to an  Authorized  Person,  at the
     Fund's expense.

<PAGE>

     8.  Confidentiality.  Each party shall keep  confidential  any  information
     relating  to  the  other  party's  business  ("Confidential  Information").
     Confidential  Information shall include (a) any data or information that is
     competitively  sensitive  material,  and not generally known to the public,
     including,  but not limited to, information about product plans,  marketing
     strategies,   finances,   operations,   customer  relationships,   customer
     profiles,  customer lists,  sales  estimates,  business plans, and internal
     performance  results  relating  to the past,  present  or  future  business
     activities  of  the  Fund  or  PFPC,  their  respective   subsidiaries  and
     affiliated  companies  and the  customers,  clients and suppliers of any of
     them;  (b)  any  scientific  or  technical  information,  design,  process,
     procedure, formula, or improvement that is commercially valuable and secret
     in  the  sense  that  its  confidentiality  affords  the  Fund  or  PFPC  a
     competitive  advantage  over  its  competitors;  (c)  all  confidential  or
     proprietary  concepts,   documentation,   reports,  data,   specifications,
     computer  software,  source  code,  object code,  flow  charts,  databases,
     inventions,  know-how,  and trade  secrets,  whether or not  patentable  or
     copyrightable; and (d) anything designated as confidential. Notwithstanding
     the  foregoing,  information  shall not be subject to such  confidentiality
     obligations if it: (a) is already known to the receiving  party at the time
     it is obtained;  (b) is or becomes  publicly known or available  through no
     wrongful act of the  receiving  party;  (c) is  rightfully  received from a
     third party who, to the best of the  receiving  party's  knowledge,  is not
     under a duty of confidentiality;  (d) is released by the protected party to
     a third party without  restriction;  (e) is required to be disclosed by the
     receiving  party  pursuant to a  requirement  of a court  order,  subpoena,
     governmental or regulatory agency or law (provided the receiving party will
     provide the other party written notice of such  requirement,  to the extent
     such notice is  permitted);  (f) is relevant to the defense of any claim or
     cause of action asserted against the receiving party; or (g) has been or is
     independently developed or obtained by the receiving party.

<PAGE>

     9.  Cooperation  with  Accountants.  PFPC shall  cooperate  with the Fund's
     independent public accountants and shall take all reasonable actions in the
     performance  of its  obligations  under this  Agreement  to ensure that the
     necessary  information  is  made  available  to  such  accountants  for the
     expression of their opinion, as required by the Fund.

     10. PFPC System.  PFPC shall  retain title to and  ownership of any and all
     data bases, computer programs, screen formats, report formats,  interactive
     design techniques, derivative works, inventions, discoveries, patentable or
     copyrightable matters,  concepts,  expertise,  patents,  copyrights,  trade
     secrets, and other related legal rights utilized by PFPC in connection with
     the services  provided by PFPC to the Fund.

     11. Disaster  Recovery.  PFPC shall enter into and shall maintain in effect
     with  appropriate   parties  one  or  more  agreements   making  reasonable
     provisions for emergency use of electronic data processing equipment to the
     extent  appropriate  equipment  is  available.  In the  event of  equipment
     failures,  PFPC shall,  at no  additional  expense to the Fund or FAS, take
     reasonable  steps to  minimize  service  interruptions.  PFPC shall have no
     liability with respect to the loss of data or service  interruptions caused
     by equipment  failure,  provided such loss or interruption is not caused by
     PFPC's own willful misfeasance, bad faith, negligence or reckless disregard
     of its duties or obligations  under this Agreement.

     12. Compensation.  As compensation for services rendered by PFPC during the
     term of this Agreement, FAS will pay to PFPC a fee or fees as may be agreed
     to from time to time in writing by FAS and PFPC.  PFPC  agrees that it will
     not look to the Fund for  compensation of its services  hereunder but shall
     look  solely to FAS.  The Fund and FAS  acknowledges  that PFPC may receive
     float benefits and/or  investment  earnings in connection with  maintaining
     certain accounts required to provide services under this Agreement.

<PAGE>

     13.  Indemnification.  The Fund agrees to indemnify  and hold harmless PFPC
     and its affiliates from all taxes, charges, expenses,  assessments,  claims
     and liabilities (including, without limitation,  reasonable attorneys' fees
     and disbursements and liabilities arising under the Securities Laws and any
     state  and  foreign  securities  and blue sky  laws)  arising  directly  or
     indirectly  from  any  action  or  omission  to act  which  PFPC  takes  in
     connection  with the provision of services to the Fund.  Neither PFPC,  nor
     any of its affiliates,  shall be indemnified  against any liability (or any
     expenses  incident to such  liability)  caused by PFPC's or its affiliates'
     own willful misfeasance, bad faith, negligence or reckless disregard of its
     duties and obligations  under this Agreement,  provided that in the absence
     of a finding to the contrary the acceptance,  processing and/or negotiation
     of a fraudulent payment for the purchase of Shares shall be presumed not to
     have been the result of PFPC's or its affiliates  own willful  misfeasance,
     bad faith, negligence or reckless disregard of such duties and obligations.

     14.  Responsibility  of PFPC.

          (a)  PFPC  shall  be under no duty to take  any  action  hereunder  on
               behalf of the Fund except as specifically  set forth herein or as
               may be  specifically  agreed to by PFPC and the Fund in a written
               amendment  hereto.  PFPC shall be obligated to exercise  care and
               diligence in the  performance of its duties  hereunder and to act
               in good  faith in  performing  services  provided  for under this
               Agreement.  PFPC shall be liable only for any damages arising out
               of PFPC's  failure to perform its duties under this  Agreement to
               the extent such damages arise out of PFPC's willful  misfeasance,
               bad faith, negligence or reckless disregard of such duties.

<PAGE>

          (b)  Without  limiting the generality of the foregoing or of any other
               provision  of this  Agreement,  (i) PFPC  shall not be liable for
               losses beyond its control,  including without limitation (subject
               to Section  11),  delays or errors or loss of data  occurring  by
               reason of circumstances beyond PFPC's control, provided that PFPC
               has acted in  accordance  with the  standard set forth in Section
               14(a)  above;  and  (ii)  PFPC  shall  not be  under  any duty or
               obligation  to  inquire  into and  shall  not be  liable  for the
               validity or  invalidity  or authority or lack thereof of any Oral
               Instruction or Written  Instruction,  notice or other  instrument
               which conforms to the applicable  requirements of this Agreement,
               and which PFPC reasonably believes to be genuine.

          (c)  Notwithstanding  anything  in  this  Agreement  to the  contrary,
               neither  PFPC  nor  its  affiliates   shall  be  liable  for  any
               consequential,  special or indirect losses or damages, whether or
               not the likelihood of such losses or damages was known by PFPC or
               its affiliates.

          (d)  No party may assert a cause of action hereunder against any party
               hereto more that 12 months after the date on which the  asserting
               became aware of such cause of action.

          (e)  Each party  shall have a duty to  mitigate  damages for which the
               other party may become responsible.

     15.  Description  of  Services.

          (a)  Shareholder  Information.  PFPC  shall  maintain  a record of the
               number of Shares held by each  Shareholder  of record which shall
               include name,  address,  taxpayer  identification and which shall
               indicate   whether  such  Shares  are  held  in  certificates  or
               uncertificated form.

<PAGE>

          (b)  Shareholder  Services.  PFPC shall respond as  appropriate to all
               inquiries  and  communications  from  Shareholders   relating  to
               Shareholder  accounts with respect to its duties hereunder and as
               may be from time to time  mutually  agreed upon  between PFPC and
               the Fund.

          (c)  Share Certificates.

               (i)  At the expense of the Fund,  the Fund shall supply PFPC with
                    an adequate supply of blank share  certificates to meet PFPC
                    requirements  therefor.  Such  Share  certificates  shall be
                    properly   signed  by  facsimile.   The  Fund  agrees  that,
                    notwithstanding  the death,  resignation,  or removal of any
                    officer  of  the  Fund  whose  signature   appears  on  such
                    certificates,  PFPC or its agent may continue to countersign
                    certificates  which  bear such  signatures  until  otherwise
                    directed by Written Instructions.

               (ii) PFPC shall issue replacement  Share  certificates in lieu of
                    certificates which have been lost, stolen or destroyed, upon
                    receipt by PFPC of  properly  executed  affidavits  and lost
                    certificate  bonds,  in form  satisfactory to PFPC, with the
                    Fund and PFPC as obligees under the bond.

               (iii)PFPC  shall  also  maintain  a  record  of each  certificate
                    issued,  the number of Shares  represented  thereby  and the
                    Shareholder  of record.  With respect to Shares held in open
                    accounts or uncertificated  form (i.e., no certificate being
                    issued with respect thereto) PFPC shall maintain  comparable
                    records of the Shareholders thereof,  including their names,
                    addresses  and taxpayer  identification.  PFPC shall further
                    maintain  a stop  transfer  record on lost  and/or  replaced
                    certificates.

          (d)  Mailing  Communications  to  Shareholders.  PFPC will address and
               mail to Shareholders of the Fund, all proxy materials and reports
               to Shareholders, dividend and distribution notices.

          (e)  Transfer of Shares.

               (i)  PFPC  shall  process  all  requests  to  transfer  Shares in
                    accordance  with the  transfer  procedures  set forth in the
                    Fund's Prospectus.

<PAGE>

               (ii) PFPC  will   transfer   Shares   upon   receipt  of  Written
                    Instructions  or otherwise  pursuant to the  Prospectus  and
                    Share certificates,  if any, properly endorsed for transfer,
                    accompanied  by such  documents as PFPC  reasonably may deem
                    necessary.

               (iii)PFPC  reserves the right to refuse to transfer  Shares until
                    it is satisfied that the endorsement on the  instructions is
                    valid and genuine. PFPC also reserves the right to refuse to
                    transfer  Shares  until it is satisfied  that the  requested
                    transfer  is  legally  authorized,  and it  shall  incur  no
                    liability for the refusal,  in good faith, to make transfers
                    which  PFPC  in  its  good   judgment,   deems  improper  or
                    unauthorized, or until it is reasonably satisfied that there
                    is no basis to any claims adverse to such transfer.

          (f)  Dividends.

               (i)  Upon the declaration of each dividend and each capital gains
                    distribution  by the  Board of  Directors  of the Fund  with
                    respect  to Shares of the Fund,  the Fund  shall  furnish or
                    cause to be furnished to PFPC Written  Instructions  setting
                    forth  the  date  of the  declaration  of such  dividend  or
                    distribution,  the  ex-dividend  date,  the date of  payment
                    thereof,  the record date as of which Shareholders  entitled
                    to payment shall be determined, the amount payable per Share
                    to the  Shareholders  of record as of that  date,  the total
                    amount payable on the payment date and whether such dividend
                    or distribution is to be paid in Shares at net asset value.

               (ii) On or before the payment date  specified in such  resolution
                    of the Board of  Directors,  the Fund will provide PFPC with
                    sufficient  cash  to make  payment  to the  Shareholders  of
                    record as of such payment date.

               (iii)If PFPC does not  receive  sufficient  cash from the Fund to
                    make total  dividend  and/or  distribution  payments  to all
                    Shareholders  of the Fund as of the record date,  PFPC will,
                    upon   notifying   the  Fund,   withhold   payment   to  all
                    Shareholders   of  record  as  of  the  record   date  until
                    sufficient cash is provided to PFPC.

          (g)  Miscellaneous

               In addition to and  neither in lieu nor in  contravention  of the
               services set forth above,  PFPC shall:  perform all the customary
               services  of a transfer  agent,  registrar,  dividend  disbursing
               agent and agent of the dividend  reinvestment  and cash  purchase
               plan as described  herein  consistent with those  requirements in
               effect as at the date of this Agreement. The detailed definition,
               frequency,  limitations and associated  costs (if any) set out in
               the agreed upon fees, include but are not limited to: maintaining
               all Shareholder  accounts,  preparing  Shareholder meeting lists,
               mailing proxies,  tabulating proxies, mailing Shareholder reports
               to current  Shareholders,  withholding taxes on U.S. resident and
               non-resident  alien  accounts  where  applicable,  preparing  and
               filing U.S. Treasury  Department Forms 1099 and other appropriate
               forms  required  with respect to dividends and  distributions  by
               federal authorities for all registered Shareholders.

<PAGE>

     16.  Duration  and   Termination.   This  Agreement  shall  continue  until
     terminated by the Fund or by PFPC on sixty (60) days' prior written  notice
     to the other party. In the event the Fund gives notice of termination,  all
     reasonable  expenses  associated with movement (or  duplication) of records
     and materials and conversion thereof to a successor transfer agent or other
     service  provider,  and all reasonable  trailing expenses incurred by PFPC,
     will be borne by FAS.

     17.  Notices.  Notices  shall be addressed  (a) if to PFPC, at 400 Bellevue
     Parkway,  Wilmington,  Delaware 19809, Attention:  President; (b) if to the
     Fund, at 1680 38th Street, Suite 800, Boulder,  Colorado 80301,  Attention:
     President or (c) if to neither of the  foregoing,  at such other address as
     shall  have been given by like  notice to the sender of any such  notice or
     other  communication  by the other party.  If notice is sent by  confirming
     telegram,  cable,  telex or facsimile sending device, it shall be deemed to
     have been given  immediately.  If notice is sent by  first-class  mail,  it
     shall be deemed to have been given three days after it has been mailed.  If
     notice is sent by  messenger,  it shall be deemed to have been given on the
     day it is delivered.

     18.  Amendments.  This  Agreement,  or any term thereof,  may be changed or
     waived  only by a  written  amendment,  signed by the  party  against  whom
     enforcement of such change or waiver is sought.

     19. Assignment. PFPC may assign this Agreement to any majority-owned direct
     or indirect  subsidiary of The PNC Financial Services Group, Inc., provided
     that PFPC remains responsible for the action of its assignees.

<PAGE>

     20.   Counterparts.   This  Agreement  may  be  executed  in  two  or  more
     counterparts,  each of which shall be deemed an original,  but all of which
     together shall constitute one and the same instrument.

     21.  Further  Actions.  Each party  agrees to perform such further acts and
     execute such further  documents as are necessary to effectuate the purposes
     hereof.

     22. Miscellaneous.

          (a)  Entire  Agreement.  This Agreement  embodies the entire agreement
               and  understanding  between the parties and  supersedes all prior
               agreements  and  understandings  relating to the  subject  matter
               hereof,  provided  that the  parties  may  embody  in one or more
               separate  documents  their  agreement,  if any,  with  respect to
               delegated duties.

          (b)  Captions.  The  captions  in  this  Agreement  are  included  for
               convenience of reference only and in no way define or delimit any
               of the provisions  hereof or otherwise affect their  construction
               or effect.

          (c)  Governing  Law. This  Agreement  shall be deemed to be a contract
               made in Delaware and governed by Delaware law,  without regard to
               principles of conflicts of law.

          (d)  Partial  Invalidity.  If any provision of this Agreement shall be
               held  or  made  invalid  by a court  decision,  statute,  rule or
               otherwise,  the remainder of this Agreement shall not be affected
               thereby.

<PAGE>

          (e)  Successors and Assigns.  This Agreement shall be binding upon and
               shall  inure to the  benefit  of the  parties  hereto  and  their
               respective successors and permitted assigns.

          (f)  No Representations or Warranties. Except as expressly provided in
               this Agreement,  PFPC hereby  disclaims all  representations  and
               warranties,  express  or  implied,  made to the Fund or any other
               person, including,  without limitation,  any warranties regarding
               quality, suitability,  merchantability,  fitness for a particular
               purpose or  otherwise  (irrespective  of any  course of  dealing,
               custom or usage of trade),  of any services or any goods provided
               incidental  to  services  provided  under  this  Agreement.  PFPC
               disclaims  any  warranty of title or  non-infringement  except as
               otherwise set forth in this Agreement.

          (g)  Facsimile  Signatures.  The  facsimile  signature of any party to
               this Agreement shall  constitute the valid and binding  execution
               hereof by such party.


<PAGE>


          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
     be executed as of the day and year first above written.

                                  PFPC INC.

                                  By:     /s/ Michael G. McCarthy
                                          Michael G. McCarthy
                                  Title:  Senior V.P. and General Manager


                                  BOULDER GROWTH & INCOME FUND, INC.

                                  By:     /s/ Carl Johns
                                  Title:  V.P. & Treasurer


                                  Solely with respect to Sections 11, 12 and 16:
                                  FUND  ADMINISTRATIVE SERVICES, L.L.C. -

                                  By:     /s/ Stephen C. Miller
                                  Title:  Pres.


<PAGE>


                                September 2, 2003

BOULDER GROWTH & INCOME FUND, INC.

     Re: Transfer Agency Services Fees

Dear Sir/Madam:

     This letter  constitutes  our agreement with respect to  compensation to be
paid to PFPC  Inc.  ("PFPC")  under  the  terms of a  Transfer  Agency  Services
Agreement  dated  September  2, 2003 between  Boulder  Growth & Income Fund (the
"Fund"),  Fund  Administrative  Services,  L.L.C. ("you" or "FAS") and PFPC (the
"Agreement") for service  provided on behalf of the Fund.  Pursuant to paragraph
12 of the Agreement,  and in consideration of the services to be provided to the
Fund,  FAS will pay PFPC certain fees and reimburse  PFPC for its  out-of-pocket
expenses incurred on the Fund's behalf, as follows:

Monthly Base Fee:

               $2,083.33 per month.

Out-of-Pocket Expenses.  Out-of-Pocket Expenses include, but are not limited to,
postage (direct pass through to the Fund), telephone and telecommunication costs
(including  all  lease,   maintenance  and  line  costs),   proxy  solicitations
(including  mailings and  tabulations),  shipping,  certified and overnight mail
(including related  insurance),  terminals,  communication  lines,  printers and
other equipment and any expenses  incurred in connection with such terminals and
lines, duplicating services, distribution and redemption check issuance, courier
services, Federal Reserve charges for check clearance,  overtime (as approved by
the Fund),  temporary staff (as approved by the Fund),  travel and entertainment
(as approved by the Fund), record retention (including retrieval and destruction
costs,  exit fees charged by third party record  keeping  vendors),  third party
audit reviews, insurance.

     Any fee or  out-of-pocket  expenses  not paid within 30 days of the date of
the  original  invoice  will be charged a late payment fee of 1% per month until
payment of the fees are received by PFPC.


<PAGE>


     If the foregoing  accurately  sets forth our agreement and you intend to be
legally bound thereby, please execute a copy of this letter and return it to us.

                                        Very truly yours,

                                        PFPC INC.


                                        By:     /s/ Michael M. McCarthy

                                        Name:   Michael M. McCarthy

                                        Title:  Senior V.P. and General Manager


     Agreed and Accepted:

     BOULDER GROWTH & INCOME FUND, INC.


     By:        /s/ Carl Johns

     Name:      Carl Johns

     Title:     V.P. & Treasurer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>10
<FILENAME>bifadminagreemt0104v2.txt
<DESCRIPTION>EXHIBIT (2)(K)(II) ADMINISTRATION AGREEMENT FAS
<TEXT>
EXHIBIT 99.(2)(k)(ii)
ADMINISTRATION AGREEMENT WITH FAS


                            ADMINISTRATION AGREEMENT

     This ADMINISTRATION  AGREEMENT (the "Agreement") is dated as of February 1,
2004 and is between BOULDER GROWTH & INCOME FUND,  INC., a Maryland  corporation
(the "Fund") whose principal offices are located at 1680 38TH Street, Suite 800,
Boulder,  CO. 80301, and FUND ADMINISTRATIVE  SERVICES,  LLC, a Colorado limited
liability company (the "Administrator"),  whose principal offices are located at
1680 38th Street, Suite 800, Boulder, CO. 80301.

                                    RECITALS

     A. The Fund is a closed-end  management  investment  company organized as a
Maryland corporation.

     B. The Fund desires to retain the  Administrator to provide  administrative
services to the Fund, and the  Administrator is willing to provide such services
on the terms and subject to the conditions set forth in this Agreement.

                                    COVENANTS

     NOW,  THEREFORE,  in  consideration of the premises and the mutual promises
contained  herein,  and for other good and valuable  consideration,  the parties
agree as follows:

     1. Definitions. As Used in this Agreement:

          (a) "1933 Act" means the Securities Act of 1933, as amended.

          (b) "1934 Act" means the Securities Exchange Act of 1934, as amended.

          (c) "1940 Act" means the Investment Company Act of 1940, as amended.

          (d) "Adviser" means the investment adviser or advisers for the Fund as
     defined in the 1940 Act.

          (e)  "Authorized  Person"  means any officer of the Fund and any other
     person  duly  authorized  by the  Fund's  Board of  Directors  to give Oral
     Instructions and Written  Instructions on behalf of the Fund. An Authorized
     Person's scope of authority may be limited by setting forth such limitation
     in a written document signed by both parties hereto.

          (f) "CEA" means the Commodities Exchange Act, as amended.

          (g)  "Oral   Instructions"   mean  oral   instructions   received   by
     Administrator  from  an  Authorized  Person  or  from a  person  reasonably
     believed by Administrator to be an Authorized Person. Administrator may, in
     its sole  discretion  in each  separate  instance,  consider  and rely upon
     instructions  it receives from an Authorized  Person via electronic mail as
     Oral Instructions.

          (h) '"SEC" means the Securities and Exchange Commission.

          (i)  "Securities  Laws" means the 1933 Act, the 1934 Act, the 1940 Act
     and the CEA.

          (j)  "Shares"  means the shares of common stock of any series or class
     of the Fund.

<PAGE>

          (k) "Written Instructions" means (i) written instructions signed by an
     Authorized Person and received by Administrator or (ii) trade  instructions
     transmitted  (and  received  by  Administrator)  by means of an  electronic
     transaction  reporting system access to which requires use of a password or
     other  authorized  identifier.  The  instructions may be delivered by hand,
     mail, tested telegram, cable, telex, facsimile sending device or email.

     2.  Appointment.   The  Fund  hereby  appoints   Administrator  to  provide
administration  services  in  accordance  with  the  terms  set  forth  in  this
Agreement.  Administrator  accepts such  appointment  and agrees to provide such
services.

     3. Delivery of Documents. The Fund has provided or, where applicable,  will
provide Administrator with the following:

          (a) at Administrator's  request,  certified or authenticated copies of
     the resolutions of the Fund's Board of Directors  approving the appointment
     of  Administrator  or its  affiliates  to provide  services to the Fund and
     approving this Agreement.

          (b) A copy of the Fund's most recent effective registration statement.

          (c) A copy of the Fund's advisory agreement or agreements.

          (d) A copy of each additional Administration Agreement of the Fund, if
     any; and

          (e) Copies (certified or  authenticated,  where applicable) of any and
     all amendments or supplements to the foregoing.

     4.  Compliance  with Rules and  Regulations.  Administrator  undertakes  to
comply with all applicable  requirements  of the Securities  Laws, and any laws,
rules  and   regulations  of  governmental   authorities   and   self-regulating
organizations  having jurisdiction with respect to the duties to be performed by
Administrator hereunder. Except as specifically set forth herein,  Administrator
assumes no liability for such compliance by the Fund or other entity.

     5. Instructions.

          (a) Unless otherwise provided in this Agreement,  Administrator  shall
     act only upon Oral Instructions or Written Instructions.

          (b) Administrator  shall be entitled to rely upon any Oral Instruction
     or Written  Instruction  it receives from an  Authorized  Person (or from a
     person  reasonably  believed by Administrator  to be an Authorized  Person)
     pursuant  to  this  Agreement.  Administrator  may  assume  that  any  Oral
     Instruction  or Written  Instruction  received  hereunder is not in any way
     inconsistent  with  the  provisions  of  organizational  documents  or this
     Agreement or of any vote,  resolution  or proceeding of the Fund's Board of
     Directors  or of the Fund's  shareholders,  unless and until  Administrator
     receives Written Instructions to the contrary.

          (c) The Fund agrees to forward to Administrator  Written  Instructions
     confirming Oral Instructions (except where such Oral Instructions are given
     by  Administrator  or its  affiliates) so that  Administrator  receives the
     Written  Instructions  by the close of  business  on the same day that such
     Oral  Instructions  are  received.  The fact that such  confirming  Written
     Instructions  are not  received  by  Administrator  or differ from the Oral
     Instructions  shall in no way invalidate the transactions or enforceability
     of the transactions  authorized by the Oral Instructions or Administrator's
     ability to rely upon such Oral  Instructions.  Where Oral  Instructions  or
     Written  Instructions  reasonably  appear  to have  been  received  from an
     Authorized  Person,  Administrator  shall incur no liability to the Fund in
     acting upon such Oral  Instructions or Written  Instructions  provided that
     Administrator's actions comply with the other provisions of this Agreement.

<PAGE>

     6. Right to Receive Advice.

          (a) Advice of the Fund. If  Administrator is in doubt as to any action
     it should or should  not take,  Administrator  may  request  directions  or
     advice, including Oral Instructions or Written Instructions, from the Fund.

          (b) Advice of Counsel.  If  Administrator  shall be in doubt as to any
     question  of law  pertaining  to any  action it should or should  not take,
     Administrator  may request advice from counsel of its own choosing (who may
     be counsel for the Fund, the Fund's investment adviser or Administrator, at
     the option of Administrator).

          (c) Conflicting  Advice. In the event of a conflict between directions
     or  advice  or Oral  Instructions  or  Written  Instructions  Administrator
     receives from the Fund and the advice Administrator  receives from counsel,
     Administrator may rely upon and follow the advice of counsel.

          (d) Protection of Administrator.  Administrator  shall be protected in
     any action it takes or does not take in reliance upon  directions or advice
     or Oral  Instructions or Written  Instructions it receives from the Fund or
     from  counsel  and  which  Administrator  believes,  in good  faith,  to be
     consistent with those directions or advice and Oral Instructions or Written
     Instructions. Nothing in this section shall be construed so as to impose an
     obligation upon Administrator (i) to seek such directions or advice or Oral
     Instructions  or Written  Instructions,  or (ii) to act in accordance  with
     such  directions  or advice or Oral  Instructions  or Written  Instructions
     unless, under the terms of other provisions of this Agreement,  the same is
     a condition of Administrator's properly taking or not taking such action.

     7. Records; Visits.

          (a) The  books and  records  pertaining  to the Fund  which are in the
     possession or under the control of Administrator and co-administrator shall
     be the property of the Fund.  Such books and records  shall be prepared and
     maintained  as  required  by the 1940 Act and other  applicable  Securities
     Laws,  rules and  regulations.  The Fund and Authorized  Persons shall have
     access to such books and records at all times during Administrator's normal
     business hours. Upon the reasonable request of the Fund, copies of any such
     books and  records  shall be provided  by  Administrator  to the Fund or an
     Authorized Person, at the Fund's expense.

          (b) Administrator  shall cause the following records to be kept at its
     offices or at the offices of the Fund's co-administrator:

               (1) all books and  records  with  respect to the Fund's  books of
               account;

               (2) records of the Fund's securities transactions; and

               (3) all  other  books  and  records  as the Fund is  required  to
               maintain, including pursuant to Rule 31a-1 of the 1940 Act.

     8. Officers and Staff. The Administrator  shall provide personnel to act as
officers  of the Fund and to act as the Fund's  Chief  Legal  Officer  and Chief
Compliance Officer, to do such things as are permitted in the Fund's Articles of
Incorporation and By-laws, as each is amended to the date hereof, or as required
by law.

     9. Administrative  Services.  The Administrator shall provide the following
administrative,  legal and regulatory  services to the Fund  (collectively,  the
"Administrative  Services").  It is intended  that the  Administrative  Services
provided  by the  Administrator  shall be of an  administrative  nature only and
shall under no circumstances  include services  associated with the provision of
investment advisory services.

<PAGE>

          (a) NEGOTIATION OF SERVICE  PROVIDER  CONTRACTS.  Administrator  shall
     negotiate   all  contracts   with  Service   Providers,   supervise   their
     obligations,  and make  periodic  reports to the Board on their  respective
     performance.   For  this  purpose,  "Service  Provider"  means  the  Fund's
     investment adviser(s),  co-administrator(s),  transfer agent and registrar,
     custodian, and all other service providers and vendors of the Fund.

          (b) OVERSIGHT OF SERVICE PROVIDERS.  The Administrator  shall maintain
     oversight with respect to the activities of the Service Providers and shall
     review all relevant reports,  documentation and other work product prepared
     by the Service Providers, including but not limited to:

               (1) Transfer agency services;

               (2)  Coordinate  contractual   relationships  and  communications
               between the Fund and its contractual Service Providers;

               (3) Provide  documentation  regarding the current  investments of
               the Fund and all trades executed by such investment adviser(s) as
               the Fund may engage from time to time (the "Adviser(s)");.

               (4) Custodian services;

               (5) All fund accounting, including

                    a. The Fund's financial statements on a monthly basis;

                    b.  Reviewing  monthly  financials  of the  Fund,  including
                    income, expenses, gains and losses;

                    c. Evaluating and monitoring the expense accrual rate of the
                    Fund;

                    d.  Calculating  and  confirming  the NAV of the  Fund  each
                    Friday and at month-end with the Fund's accountant;

                    e. Providing internal auditing;

                    f.  Responding  to SEC and other  regulatory  inquiries  and
                    audits;

                    g. Serving as liaison to the Fund's independent accountants;

                    h. Calculate monthly, quarterly and annual total returns;

                    i. Calculate and monitor net realized and  unrealized  gains
                    (losses) of the Fund;

                    j. Prepare  weekly and month-end  calculation  of the Fund's
                    NAV;

                    k. Obtaining prices for portfolio  holdings and assisting in
                    the valuation of illiquid securities;

               (6)  Review  any  and  all  other  reports  produced  by  Service
               Providers in regards to the Fund.

<PAGE>

          (c) POLICIES AND  PROCEDURES.  The  Administrator  shall establish and
     maintain the Fund's Code of Ethics and such other  policies  and  operating
     procedures   required  under  the  1940  Act  and  other  Securities  Laws,
     including,  without  limitation,  Rule  38a-1  under the 1940  Act,  and as
     required by any exchange on which Fund shares are traded.

          (d) INVESTMENT  RECORDS.  The Administrator  shall review and maintain
     records of current  investments  of the Fund,  including  daily  trades and
     monthly appraisals,  analyze the Adviser's  performance based on investment
     objectives  against relevant indexes and other  investment  companies,  and
     present results to the Board of Directors.

          (e) TOTAL RETURNS.  The Administrator  shall assist in the calculation
     and  maintenance  total  returns  (both  NAV and  market)  of the  Fund for
     purposes mentioned above and investor relations.

          (f) LEGAL  SERVICES.  The  Administrator  shall  provide the following
     general counsel and legal services:

               (1) Provide in-house general counsel and ancillary legal services
          (e.g.,  contract  drafting and  negotiation;  drafting of  non-routine
          proxies,   prospectuses,   registration   statements,   statements  of
          additional information,  articles  supplementary,  rights offering and
          other memoranda and ancillary  items;  negotiating  loan documents and
          terms  with  banks on lines of credit  for  leveraging  for the Fund);
          periodically  reviewing,  analyzing,  updating and revising the Funds'
          fundamental  documents;  legal  research  and  analysis for such other
          topics that affect the Fund;  coordinate  with outside Fund counsel as
          needed.

               (2) In conjunction with  co-administrator(s),  prepare board book
          materials  and  insure  that  all  necessary  materials  are  promptly
          provided to the Board of Directors in advance of their  quarterly  and
          special meetings;

               (3) Attend all Board meetings and annual shareholder  meetings of
          the Fund and review minutes of same;

               (4)  Review  all  legal  matters  concerning  the Fund  with Fund
          counsel;

               (5) Prepare, coordinate with Fund's outside counsel and file with
          the SEC  notices of Annual or Special  Meetings  of  Shareholders  and
          Proxy materials  relating to such meetings,  and produce  camera-ready
          documents for printing;

               (6)  Prepare,  review and file all  registration  statements  and
          coordinate review of same by Fund counsel;

               (7) Provide compliance procedures for the Fund with regard to the
          Fund's investment  objective,  policies,  restrictions,  rating agency
          guidelines, tax matters and applicable laws and exchange rules;

               (8) Make necessary SEC and NYSE filings on behalf of the Fund and
          its Directors;

               (9) Maintain the Fund's compliance  calendar to assure compliance
          with various filing and Board approval deadlines;

               (10) Make all  applications  for  obtaining the fidelity bond and
          directors' and officers' errors and omissions  insurance  policies for
          the  Fund in  accordance  with  the  requirements  of Rule  17g-1  and
          17d-1(d)(7)  under the 1940 Act as such bond and policies are approved
          by the Fund's Board of Directors;

<PAGE>

          (g) TREASURY SERVICES.

               (1) Supply various normal and customary Fund  statistical data as
          requested on an ongoing basis;

               (2) Provide all certifications of senior officers required by the
          Securities Laws;

               (3) Prepare for execution  and file the Fund's  federal and state
          tax returns;

               (4) Assist the  co-administrator  and other Service  Providers in
          monitoring the Fund's status as a regulated  investment  company under
          Sub-chapter M of the Internal  Revenue Code of 1986,  as amended,  and
          compliance with its investment objectives, policies and restrictions;

               (5) Supervise and assist the  co-administrator  and other Service
          Providers  in the  preparation  and filing  with the SEC of the Fund's
          annual and semi-annual shareholder reports;

               (6) Assist in the preparation of,  coordinate with Fund's outside
          counsel and file with the SEC Post-Effective  Amendments to the Fund's
          Registration  Statement as needed, assist in preparation of reports to
          the  SEC  including  the  preparation,  certification  and  filing  of
          semi-annual reports on Form N-SAR, Form N-CSR and Form N-PX;

               (7) Monitor the Fund's  assets to assure  adequate  fidelity bond
          coverage is maintained;

               (8) Monitor asset coverage requirements applicable to the Fund or
          any of its shares.

          (h)  REPORTS  TO THE BOARD.  The  Administrator  shall  make  periodic
     reports to the Board and insure that all relevant information regarding the
     Fund is made available to shareholders,  analysts,  investors, and the like
     through shareholder reports, proxy statements, press releases, other public
     documents and filings and other communications.

          (i) DIVIDEND  RECOMMENDATIONS  AND COMPLIANCE WITH FUND POLICIES.  The
     Administrator  shall  study  and  make  recommendations  to  the  Directors
     regarding the Fund's dividend  payout of income and capital gains,  and the
     Fund's compliance with its policies and organizational  documents, with the
     1940 Act, with IRS tax codes and regulations, with rating agency guidelines
     and with stock exchange requirements.

          (j)   GENERAL   MANAGEMENT   AND   SHAREHOLDER   COMMUNICATION.    The
     Administrator  shall provide general management and oversight for the Fund,
     to the extent not  provided  by the  Adviser(s).  The  Administrator  shall
     provide such  necessary  personnel and equipment to adequately  receive and
     respond to all inquiries of the Fund's shareholders and shall make periodic
     summary reports to the Board of Directors regarding same.

          (k) DIRECTORS & OFFICERS LIABILITY INSURANCE.  At least annually,  the
     Administrator shall solicit proposals and make recommendations to the Board
     regarding   the   availability,   cost  and   acquisition   of  errors  and
     omissions/directors  and officers liability insurance,  fidelity bonds, and
     such other  insurance  as might be required  or  prudent,  as the Board may
     determine.

          (l) DISBURSEMENT  SERVICES. The Administrator shall review and approve
     all Fund expenses and cause them to be paid in a timely manner.

<PAGE>

          (m)  WEBSITE   MAINTENANCE.   The  Administrator  shall  provide  such
     personnel and equipment as is necessary to adequately  construct,  maintain
     and administer a professionally developed website for the Fund.

          (n)  PERSONNEL.   Except  as  provided  in  Section  10  hereof,   the
     Administrator  shall,  at its sole  cost and  expense,  employ,  engage  or
     associate with itself such persons as it believes  appropriate to assist it
     in performing its obligations under this Agreement.

          (o) OTHER SERVICES  REQUESTED BY THE BOARD.  The  Administrator  shall
     provide such other  administrative  services as may be reasonably requested
     from time to time by the Board.

          (p)  ACCOUNTING  SERVICES.  Administrator  will perform the  following
     accounting  services  all of which are  included  under the  definition  of
     "Administrative Services":

               (1)  Together  with the  co-administrator,  monitor  the  expense
          accruals   and  notify  an  officer  of  the  Fund  of  any   proposed
          adjustments;

               (2) Control all  disbursements  and authorize such  disbursements
          upon Written Instructions;

               (3) Together with the  co-administrator,  calculate capital gains
          and losses,  and  determine  net income,  compute net asset value,  as
          appropriate,  compute  yields,  total  returns,  expense  ratios,  and
          portfolio turnover rate.

     10. Outsourcing. Administrator may, at its sole cost and expense, outsource
its responsibilities under this Agreement (the "Outsourced Responsibilities") to
reputable  service  providers who are qualified and in the business of providing
some or all of the  services  contemplated  hereunder to  registered  investment
companies  ("Outsource  Providers").  The  Administrator  may, in its reasonable
discretion,  change Outsource  Providers or reallocate all or any portion of the
Outsourced  Responsibilities  hereunder  to  one  or  any  number  of  Outsource
Providers.  Whenever  Administrator proposes to enter into any agreement for the
providing of any Outsourced  Responsibilities,  or if Administrator  proposes to
change Outsource Providers for any Administrative  Services, it shall provide at
least  60  days'  prior  written  notice  to the  Board  of the  details  of the
anticipated change.

     11. Best Efforts.  The Administrator shall give the Fund the benefit of the
Administrator's  best  judgment  and efforts in  rendering  services  under this
Agreement.  As an inducement to the Administrator's  undertaking to render these
services,  the Fund agrees that the Administrator shall not be liable under this
Agreement  for any error of judgment or mistake of law or for any loss  suffered
by the Fund in connection  with the  performance of its  obligations  and duties
under this Agreement,  except a loss resulting from the Administrator's  willful
misfeasance,   bad  faith  or  gross  negligence  in  the  performance  of  such
obligations and duties, or by reason of its reckless disregard thereof.

     12. Compensation.

          (a) The Administration  Fee. In consideration of the  responsibilities
     assumed and the Administrative Services to be rendered by the Administrator
     under this  Agreement,  the Fund shall pay the  Administrator a monthly fee
     (commencing on the Effective Date (defined below)), calculated as follows:

                    (1) 20 basis points on total assets under  management  up to
                    $250 million;

                    (2) 18 basis points on total assets under  management  above
                    $250 million but less than $400 million; and

                    (3) 15 basis points on total assets under  management  above
                    $400 million.

<PAGE>

     In each case,  such basis  points will be applied  against the value of the
     Fund's  average  monthly net assets which,  for the purposes of calculating
     such fee,  will be deemed to be the  average  monthly  value of the  Fund's
     total assets minus the sum of the Fund's liabilities  (excluding  leverage,
     if  any)  (the   "Administration   Fee").   If  the  fees  payable  to  the
     Administrator  pursuant to this Section  begin to accrue  before the end of
     any month or if this Agreement  terminates before the end of any month, the
     fees for the  period  from that  date to the end of that  month or from the
     beginning  of that  month to the date of  termination,  as the case may be,
     shall be prorated  according to the proportion that the period bears to the
     full month in which the effectiveness or termination occurs.

          (b) Fee Waiver. If the aggregate of (i) the  Administration  Fee, (ii)
     co- or  sub-administration  fees paid  directly by the Fund,  (iii) custody
     fees and (iv) transfer agency fees (collectively, the "Fund's Admin Costs")
     for any calendar  month  exceeds 30 basis points (as applied to the average
     monthly  value  of the  Fund's  total  assets  minus  the sum of the  Fun's
     liabilities  (excluding  leverage,  if any)), the Administrator shall waive
     that  portion of the  Administration  Fee such that the Fund's  Admin Costs
     shall equal 30 basis points for such calendar month.

     13.  Reimbursement  for Out of Pocket  Expenses.  The Fund shall  reimburse
Administrator  for all reasonable out of pocket expenses  incurred in connection
with its duties hereunder,  including travel expenses for Administrator's  staff
in their  capacities as officers of the Fund to attend  meetings of the Board of
Directors.

     14. Liaison with Accountants.  Administrator  shall act as liaison with the
Fund's independent public accountants and shall provide account analyses, fiscal
year  summaries,  and other  audit-related  schedules  with respect to the Fund.
Administrator  shall take all reasonable action in the performance of its duties
under this Agreement to assure that the necessary  information is made available
to such  accountants  for the  expression of their  opinion,  as required by the
Fund.  The  Administrator  shall also negotiate all auditor's  fees,  subject to
approval by the Audit Committee of the Board of Directors.

     15.  Administrator's  Systems.  Administrator  shall  retain  title  to and
ownership of any and all data bases, computer programs,  screen formats,  report
formats,   interactive   design   techniques,   derivative  works,   inventions,
discoveries,  patentable or copyrightable matters, concepts, expertise, patents,
copyrights,   trade  secrets,   and  other  related  legal  rights  utilized  by
Administrator  in connection with the services  provided by Administrator to the
Fund.

     16. Disaster Recovery.  In the event of equipment  failures,  Administrator
shall, at no additional  expense to the Fund, take reasonable  steps to minimize
service interruptions. Administrator shall have no liability with respect to the
loss of data or service interruptions caused by equipment failure, provided such
loss or interruption is not caused by Administrator's  own willful  misfeasance,
bad faith,  negligence or reckless  disregard of its duties or obligations under
this Agreement.

     17.  Approval of Agreement.  This  Agreement  shall become  effective as of
January 23, 2004 (the  "Effective  Date"),  the date on which the  Agreement was
approved by vote of a majority of:

          (a) The Board of Directors of the Fund and

          (b) The Directors who are not "interested  persons" (as defined in the
     1940 Act) of the Fund and who have no direct or indirect financial interest
     in this Agreement (the "Non-Interested Directors");

          (c) cast in person at a meeting  called  for the  purpose of voting on
     such approval (the "Board Approval").

<PAGE>

This  Agreement  shall continue in effect with respect to the Fund until January
31, 2005, and  thereafter  shall continue  automatically  for successive  annual
periods,  subject to the  immediately  following  sentence,  and  provided  such
continuance  receives Board Approval,  including  approval by the Non-Interested
Directors.  This  Agreement  may be  terminated  with respect to the Fund at any
time, without payment of any penalty, by a vote of a majority of the outstanding
voting  securities  of the Fund (as  defined  in the 1940 Act) or by a vote of a
majority of the Fund's  Board of  Directors  on 60 days'  written  notice to the
Administrator  or by the  Administrator  on 90 days' written notice to the Fund.
This Agreement shall terminate  automatically in the event of its assignment (as
defined in the 1940 Act).

     18.  Confidentiality.  Each party shall keep  confidential  any information
relating   to  the  other   party's   business   ("Confidential   Information").
Confidential  Information  shall  include  (a) any data or  information  that is
competitively  sensitive  material,  and  not  generally  known  to the  public,
including,  but not limited  to,  information  about  product  plans,  marketing
strategies,  finances,  operations,  customer relationships,  customer profiles,
customer  lists,  sales  estimates,  business  plans,  and internal  performance
results, relating to the past, present or future business activities of the Fund
or Administrator, their respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of them; (b) any scientific or technical
information,  design,  process,  procedure,  formula,  or  improvement  that  is
commercially  valuable and secret in the sense that its confidentiality  affords
the Fund or Administrator a competitive advantage over its competitors.; (c) all
confidential   or   proprietary   concepts,   documentation,    reports,   data,
specifications,  computer  software,  source  code,  object  code,  flow charts,
databases, inventions, know-how, and trade secrets, whether or not patentable or
copyrightable; and (d) anything designated as confidential.  Notwithstanding the
foregoing,  information shall not be subject to such confidentiality obligations
if it (a) is already  known to the  receiving  party at the time it is obtained;
(b) is or becomes  publicly  known or  available  through no wrongful act of the
receiving party; (c) is rightfully  received from a third party who, to the best
of the receiving party's knowledge, is not under a duty of confidentiality;  (d)
is released by the protected party to a third party without restriction;  (e) is
required to be disclosed by the receiving  party  pursuant to a requirement of a
court order,  subpoena,  governmental or regulatory  agency or law (provided the
receiving party will provide the other party written notice of such requirement,
to the extent such notice is  permitted);  (f) is relevant to the defense of any
claim or cause of action asserted  against the receiving  party; or (g) has been
or is independently developed or obtained by the receiving party.

     19.  Indemnification.  The Fund  agrees  to  indemnify  and  hold  harmless
Administrator and its affiliates from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, reasonable attorneys fees
and  disbursements  and  liabilities  arising under the Securities  Laws and any
state and foreign  securities and blue sky laws) arising  directly or indirectly
from any action or omission to act which  Administrator takes in connection with
its  provision of services to the Fund.  Neither  Administrator,  nor any of its
affiliates, shall be indemnified against any liability (or any expenses incident
to such  liability)  caused by  Administrator's  or its  affiliates' own willful
misfeasance,  bad faith,  negligence  or  reckless  disregard  of its duties and
obligations under this Agreement.

     20. Responsibility of Administrator.

          (a) Administrator  shall be under no duty to take any action hereunder
     on behalf of the Fund  except as  specifically  set forth  herein  and such
     other  related  administrative  services  as are  customarily  provided  by
     administrators to registered closed-end funds (other than those required to
     be  provided  by  other  service  providers  to  the  Fund)  or as  may  be
     specifically agreed to by Administrator and the Fund in a written amendment
     hereto.  Administrator shall be obligated to exercise care and diligence in
     the  performance  of its  duties  hereunder  and to act in  good  faith  in
     performing services provided for under this Agreement.  Administrator shall
     be liable only for any damages  arising out of  Administrator's  failure to
     perform its duties under this  Agreement  to the extent such damages  arise
     out of Administrator's willful misfeasance,  bad faith, gross negligence or
     reckless disregard of such duties.

<PAGE>

          (b) Without  limiting the  generality of the foregoing or of any other
     provision  of this  Agreement,  (i)  Administrator  shall not be liable for
     losses beyond its control, including without limitation (subject to Section
     16), delays or errors or loss of data occurring by reason of  circumstances
     beyond  Administrator's  control,  provided that Administrator has acted in
     accordance  with the  standard set forth in Section  20(a) above,  and (ii)
     Administrator shall not be under any duty or obligation to inquire into and
     shall not be liable for the  validity or  invalidity  or  authority or lack
     thereof of any Oral  Instruction  or Written  Instruction,  notice or other
     instrument which conforms to the applicable requirements of this Agreement,
     and which Administrator reasonably believes to be genuine.

          (c)  Notwithstanding  anything  in  this  Agreement  to the  contrary,
     neither   Administrator   nor  its  affiliates  shall  be  liable  for  any
     consequential,  special or indirect  losses or damages,  whether or not the
     likelihood  of such  losses or damages  was known by  Administrator  or its
     affiliates.

          (d) Each party  shall have a duty to  mitigate  damages  for which the
     other party may become responsible.

     21. No Restrictions on Other  Business.  Except to the extent  necessary to
perform the  Administrator's  obligations  under this Agreement,  nothing herein
shall be deemed to limit or  restrict  the  right of the  Administrator,  or any
affiliate of the Administrator,  or any employee of the Administrator, to engage
in any other business or to devote time and attention to the management or other
aspects of any other business,  whether of a similar or dissimilar nature, or to
render services to any other corporation, firm, individual or association.

     22. Miscellaneous Provisions.

          (a)  Articles  of  Incorporation;  Binding  Effect.  The  Articles  of
     Incorporation, establishing the Fund, together with all amendments thereto,
     is on file in the office of the  Secretary  of the State of  Maryland.  The
     obligations of the Fund are not  personally  binding upon, nor shall resort
     be had to the  private  property  of,  any of the  officers,  directors  or
     shareholders  of the Fund or any of  their  agents,  but  only  the  Fund's
     property shall be bound.

          (b)  Governing  Law.  This  Agreement   shall  be  construed  and  its
     provisions  interpreted  in  accordance  with  the  laws  of the  State  of
     Maryland.

          (c) Binding  Agreement;  Assignment.  This Agreement  shall be binding
     upon and inure to the benefit of the parties  hereto and their  successors.
     This  Agreement   shall  not  be  assignable  by  either  party  under  any
     circumstances.

          (d) Severability.  If any term or provision hereunder,  or any portion
     thereof,  is held to be invalid or  unenforceable,  it shall not affect any
     other term or provision hereunder or any part thereof.

          (e) Survival. All promises, covenants, agreements, representations and
     warranties  contained herein shall survive the execution and delivery,  and
     the  subsequent  termination,   of  this  Agreement  and  the  transactions
     contemplated hereunder.

          (f) Entire Agreement.  This Agreement  contains the full,  entire, and
     integrated agreement and understanding  between the parties with respect to
     the  covenants,   promises  and  agreements   herein   described,   and  no
     representations,   warranties,   provisions,   covenants,   agreements   or
     understandings,  written or oral, not herein contained or referred to shall
     be of any  force or  effect.  Except as  otherwise  provided  herein,  this
     Agreement may not be modified or amended  except in writing  signed by both
     of the parties hereto.

<PAGE>

          (g) Counterparts.  This Agreement may be executed in counterparts, all
     of which together shall constitute one and the same instrument.

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
     be duly executed as of the date first written above.



THE FUND:                               THE  ADMINISTRATOR:

BOULDER GROWTH & INCOME FUND, INC.,     FUND  ADMINISTRATIVE   SERVICES,   LLC,
a Maryland corporation                  a  Colorado limited liability company






By: /s/ Stephen C. Miller               By: /s/ Carl D. Johns
Stephen C. Miller, President            Carl D. Johns, Assistant Manager

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>11
<FILENAME>bifamendadminagreemt.txt
<DESCRIPTION>EXHIBIT (2)(K)(III) AMEND TO ADMIN AGR FAS
<TEXT>
EXHIBIT 99.(2)(k)(iii)
AMENDMENT TO ADMINISTRATION AGREEMENT


                                  AMENDMENT TO

                            ADMINISTRATION AGREEMENT

     THIS AMENDMENT TO ADMINISTRATION AGREEMENT (this "Amendment") is made as of
the 21st day of January, 2005 by and among FUND ADMINISTRATIVE  SERVICES, LLC, a
Colorado limited  liability company (the  "Administrator")  and BOULDER GROWTH &
INCOME FUND, INC. a Maryland corporation (the "Fund").

     WHEREAS,  the Fund and the  Administrator  are parties to an Administration
Agreement dated as of February 1, 2004 (the "Agreement"); and

     WHEREAS,  the parties  desire to amend certain  provisions of the Agreement
with respect to the negligence standard to be applied by the Administrator.

          1. Amendments.

               a.  Paragraph  11 of the  Agreement is amended to strike the word
          "gross" from the last sentence of the paragraph.

               b. Paragraph 20(a) of the Agreement is amended to strike the word
          "gross" from the last sentence of the paragraph.

          2. All  Other  Terms and  Conditions  Unchanged.  All other  terms and
     conditions  of the  Sub-Advisory  Agreement  shall remain in full force and
     effect.

          3. Counterparts.  This Amendment may be executed in counterparts, each
     of which shall be deemed an original for all purposes,  and together  shall
     constitute one and the same Amendment.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first above written.


THE ADMINISTRATOR:

FUND ADMINISTRATIVE SERVICES, L.L.C.,
a Colorado limited liability company

By:     /s/ Carl D. Johns
        Carl D. Johns
        Its: Assistant Manager


THE FUND:

BOULDER GROWTH & INCOME FUND, INC.
a Maryland corporation

By:     /s/ Stephen C. Miller
        Stephen C. Miller
        Its: President
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>12
<FILENAME>bifadminagreemtwibt.txt
<DESCRIPTION>EXHIBIT (2)(K)(IV) ADMIN AGREEMENT WITH IBT
<TEXT>
EXHIBIT 99.(2)(k)(iv)
ADMINISTRATION AGREEMENT WITH IBT


                            ADMINISTRATION AGREEMENT


     AGREEMENT  made as of 29th day of  September  2004 by and  between  Boulder
Growth & Income Fund,  Inc., a corporation  organized under the laws of Maryland
(the "Fund"),  and INVESTORS BANK & TRUST COMPANY, a Massachusetts trust company
(the "Bank").

     WHEREAS,  the Fund is  registered  as a  closed-end  management  investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");

     WHEREAS,   the  Fund   desires  to  retain  the  Bank  to  render   certain
administrative services to the Fund;

     WHEREAS,  the Fund and the Bank have entered into a Custodian Agreement and
Delegation  Agreement  of  even  date  herewith  (the  "Custody  Agreement"  and
"Delegation Agreement"); and

     WHEREAS, the Bank is willing to render such services,  subject to the terms
and conditions of this Agreement.

     NOW, THEREFORE,  in consideration of the mutual covenants herein set forth,
it is agreed between the parties hereto as follows:

     1.  Appointment.  The Fund hereby appoints the Bank to act as Administrator
of the Fund on the terms  set forth in this  Agreement.  The Bank  accepts  such
appointment  and  agrees  to  render  the  services  herein  set  forth  for the
compensation herein provided.

     2. Delivery of Documents. The Fund has furnished the Bank with copies, duly
certified or authenticated to the Bank's satisfaction, of each of the following:

          (a)  Resolutions of the Fund's Board of Directors  authorizing  and/or
     approving (i) the appointment of the Bank to provide certain administrative
     services to the Fund,  (ii) this  Agreement,  (iii)  certain  officers  and
     employees  of the Fund to give  instructions  to the Bank  pursuant to this
     Agreement,  and (iv)  certain  officers  and  employees of the Fund to sign
     checks and pay expenses on behalf of the Fund;

          (b) The  Fund's  incorporating  documents  filed  with  the  state  of
     Maryland on [date] and all amendments thereto (the "Articles");

          (c) The Fund's by-laws and all amendments thereto (the "By-Laws");

          (d) The  Fund's  agreements  with  all  service  providers  including,
     without  limitation,  any investment  advisory  agreements,  sub-investment
     advisory  agreements,  custody  agreements,  and transfer agency agreements
     (collectively, the "Agreements");

          (e)  Each of the  Fund's  Registration  Statements  on Form  N-2  (the
     "Registration   Statements")   filed  with  the   Securities  and  Exchange
     Commission  under the Securities Act of 1933, as amended and under the 1940
     Act, and all amendments thereto;

          (f) The Fund's most recent  prospectus  and  statement  of  additional
     information (the "Prospectus"); and

          (g) Such other  documents,  certificates or opinions of counsel as the
     Bank may, in its  reasonable  discretion,  deem necessary or appropriate in
     the proper performance of its duties hereunder.

<PAGE>

     The Fund will immediately furnish the Bank with copies of all amendments of
or  supplements  to the  foregoing  and  with any new  Registration  Statements.
Furthermore,  the Fund will  notify the Bank as soon as  possible  of any matter
which may  materially  affect the  performance by the Bank of its services under
this Agreement.

     3. Duties of Administrator. Subject to the supervision and direction of the
Board of  Directors  of the Fund,  the Bank,  as  Administrator,  will assist in
conducting  various  aspects  of  the  Fund's   administrative   operations  and
undertakes to perform the services described in Appendix A hereto. The Bank may,
from time to time,  perform  additional  duties and functions which shall be set
forth in an amendment to such Appendix A executed by both parties. At such time,
the fee schedule included in Appendix B hereto shall be appropriately amended.

     In  performing  all services  under this  Agreement,  the Bank shall act in
conformity  with the Fund's  Articles  and By-Laws and the 1940 Act, as the same
may be amended  from time to time,  and the  investment  objectives,  investment
policies and other  practices and policies set forth in the Fund's  Registration
Statement,  as the same may be amended from time to time, or as set forth in the
Fund's annual or semi-annual  reports to shareholders.  Notwithstanding any item
discussed herein, the Bank has no discretion over the Fund's assets or choice of
investments and cannot be held liable for any losses arising from such assets or
choice of investments.

     4. Duties of the Fund.

          (a) The Fund will  perform such actions and provide the Bank with such
     information as described in Appendix A hereto.

          (b) The Fund is solely  responsible  (through  its  transfer  agent or
     otherwise) for (i) providing timely and accurate reports ("Share  Reports")
     which will enable the Bank as  Administrator to monitor the total number of
     shares  outstanding  and (ii) providing  timely and accurate  notice of the
     issuance of any new shares.

          (c) The Fund agrees to make its legal  counsel  available  to the Bank
     for  instruction  with  respect to any matter of law arising in  connection
     with the Bank's duties hereunder, and the Fund further agrees that the Bank
     shall be entitled to rely on such instruction without further investigation
     on the part of the Bank.

     5. Fees and Expenses.

          (a) For the services to be rendered and the facilities to be furnished
     by the Bank, as provided for in this  Agreement,  the Fund will  compensate
     the Bank in accordance with the fee schedule attached as Appendix B hereto.
     Such fees do not include out-of-pocket  disbursements (as delineated on the
     fee  schedule  or other  expenses  with the prior  approval  of the  Fund's
     management)  of the Bank for which the Bank shall be  entitled  to bill the
     Fund separately and for which the Fund shall reimburse the Bank.

          (b) The Bank will bear all of its own expenses in connection  with the
     performance  of its  services  under  this  Agreement.  The Fund  will bear
     certain  expenses  to be  incurred  in  its  operation,  including:  taxes,
     interest,  brokerage fees and  commissions,  if any; fees of the members of
     the Board of the Fund who are not officers,  directors, or employees of the
     Bank or its  affiliates  or any person who is an affiliate of any person to
     whom duties may be delegated by the Bank hereunder;  SEC fees and any state
     blue sky qualification fees; any stock exchange fees; charges of custodians
     and  transfer  and  dividend   disbursing   agents;   insurance   premiums,
     professional  association  dues and/or  assessments;  outside  auditing and
     legal  expenses;   costs  of  maintaining  the  Fund's   existence;   costs
     attributable to investor services, including, without limitation, telephone
     and  personnel   expenses;   costs  of   preparing,   printing  and  filing
     registration statements or amendments thereto,  prospectuses and statements
     of additional  information for regulatory  purposes and for distribution to
     existing  or  prospective  shareholders;  costs of  shareholders'  reports,
     meetings of the officers or Board and any extraordinary expenses.

<PAGE>

          (c) The Bank shall not be required to pay any expenses incurred by the
     Fund.

     6. Limitation of Liability.

          (a)  The  Bank,  its  directors,  officers,  employees,  shareholders,
     nominees and agents,  whether past, present or future,  shall not be liable
     for any  error of  judgment  or  mistake  of law or for any loss or  damage
     resulting from the  performance or  nonperformance  of its  obligations and
     duties  under  this  Agreement,   except  a  loss  resulting  from  willful
     misfeasance, bad faith or negligence in the performance of such obligations
     and duties, or by reason of its reckless disregard  thereof.  The Fund will
     indemnify the Bank, its directors,  officers,  employees and agents against
     and hold it and them  harmless  from any and all losses,  claims,  damages,
     liabilities or expenses  (including legal fees and expenses) resulting from
     any  claim,  demand,  action  or suit (i)  arising  out of the  actions  or
     omissions  of the  Fund;  (ii)  arising  out of the  offer  or  sale of any
     securities  of the  Fund in  violation  of (x) any  requirement  under  the
     Federal  securities  laws or  regulations,  (y) any  requirement  under the
     securities laws or regulations of any state, or (z) any stop order or other
     determination  or ruling by any Federal or state agency with respect to the
     offer or sale of such  securities;  or (iii) not resulting from the willful
     misfeasance, bad faith or negligence of the Bank in the performance of such
     obligations and duties or by reason of its reckless disregard thereof.

          (b) The Bank may  apply to the Fund at any time for  instructions  and
     may consult counsel for the Fund, or its own counsel,  and with accountants
     and other experts with respect to any matter arising in connection with its
     duties  hereunder,  and the Bank shall not be liable or accountable for any
     action  taken or  omitted  by it in good  faith  in  accordance  with  such
     instruction,  or with the opinion of such  counsel,  accountants,  or other
     experts.  The Bank shall not be liable for any act or omission taken or not
     taken in reliance upon any  document,  certificate  or instrument  which it
     reasonably  believes  to be genuine  and to be signed or  presented  by the
     proper person or persons.  The Bank shall not be held to have notice of any
     change of authority of any officers, employees, or agents of the Fund until
     the Bank shall have received written notice thereof from the Fund.

          (c) In the  event  the Bank is unable to  perform,  or is  delayed  in
     performing, its obligations under the terms of this Agreement because of of
     God,  strikes,   legal  constraint,   government  actions,  war,  emergency
     conditions,  earthquakes,  fires,  floods,  storms or other disturbances of
     nature,  epidemics,   riots,   nationalization,   expropriation,   currency
     restrictions,  interruption,  loss or  malfunction  of electrical  power or
     other utilities, transportation, or telecommunication systems, or computers
     and computer facilities  (hardware or software),  equipment or transmission
     failure,  damage  reasonably  beyond its control or other causes reasonably
     beyond  its  control,  the Bank  shall  not be  liable  to the Fund for any
     damages  resulting from such failure to perform,  delay in performance,  or
     otherwise from such causes.

          (d) Notwithstanding  anything to the contrary in this Agreement, in no
     event shall the Bank be liable for  special,  incidental  or  consequential
     damages, even if advised of the possibility of such damages.

          (e) The indemnification contained herein shall survive the termination
     of this Agreement.

     7. Termination of Agreement.

          (a) The term of this Agreement shall be one year,  commencing upon the
     date hereof (the "Initial  Term"),  unless  earlier  terminated as provided
     herein.  After  the  expiration  of the  Initial  Term,  the  term  of this
     Agreement shall  automatically  renew for successive one-year terms (each a
     "Renewal  Term") unless  written  notice of non-renewal is delivered by the
     non-renewing  party to the other  party no later than  ninety days prior to
     the expiration of the Initial Term or any Renewal Term, as the case may be.
     Either party hereto may terminate this Agreement prior to the expiration of
     the Initial Term or any Renewal Term in the event of a Default. A "Default"
     shall  exist  if a  party  fails  to  substantially  perform  its  material
     obligations  under  this  Agreement  or  otherwise  violates  any  material
     provision of this  Agreement,  provided that the  violating  party does not
     cure such  violation  within thirty days of receipt of written  notice from
     the non-violating party of such violation (a "Notice of Violation"),  or if
     the nature of the  violation  is such that it cannot be cured  within  such
     thirty-day period,  the party does not commence  substantive action to cure
     such violation within thirty days of the Notice of Violation.

<PAGE>

          (b) A Default under this  Agreement  shall  constitute a  simultaneous
     default under the Custody Agreement and Delegation Agreement giving rise to
     all  appropriate   remedies   thereunder,   including  early   termination.
     Similarly,  a default under the Custody  Agreement or Delegation  Agreement
     shall  constitute  a  simultaneous  Default  hereunder  giving  rise to all
     remedies set for herein, including early termination.

          (b) At any time after the termination of this Agreement, the Fund may,
     upon written  request,  have  reasonable  access to the records of the Bank
     relating to its performance of its duties as Administrator.

     8. Miscellaneous.

          (a) Any notice or other  instrument  authorized  or  required  by this
     Agreement  to be  given  in  writing  to the  Fund  or the  Bank  shall  be
     sufficiently  given if  transmitted by facsimile or addressed to that party
     and  received by it at its office set forth below or at such other place as
     it may from time to time designate in writing.


          To the Fund:
                  Boulder Growth & Income Fund, Inc.
                  1680 38th Street, Suite 800
                  Boulder, CO 80301
                  Facsimile (303) 245-0420
                  Attention: Stephen C. Miller, President & General Counsel


          To the Bank:
                  Investors Bank & Trust Company
                  200 Clarendon Street, P.O. Box 9130
                  Boston, MA 02117-9130
                  Facsimile 617-330-6033
                  Attention: Paula A. Lordi, SeniorDirector, Client Management
                  With a copy to: John E. Henry, General Counsel


          (b) This  Agreement  shall  extend  to and shall be  binding  upon the
     parties  hereto and their  respective  successors  and  assigns;  provided,
     however,  that this Agreement  shall not be assignable  without the written
     consent of the other party.

          (c) This Agreement  shall be construed in accordance  with the laws of
     the Commonwealth of  Massachusetts,  without regard to its conflict of laws
     provisions.

          (d) This Agreement may be executed in any number of counterparts  each
     of which shall be deemed to be an original and which  collectively shall be
     deemed to constitute only one instrument.

          (e) The captions of this  Agreement  are included for  convenience  of
     reference only and in no way define or delimit any of the provisions hereof
     or otherwise affect their construction or effect.

<PAGE>

          (f)  This  Agreement  may not be  altered  or  amended,  except  by an
     instrument in writing, executed by both parties.

     9. Confidentiality.  All books, records, information and data pertaining to
the business of the other party which are exchanged or received  pursuant to the
negotiation or the carrying out of this Agreement shall remain confidential, and
shall  not be  voluntarily  disclosed  to any  other  person,  except  as may be
required in the performance of duties hereunder or as otherwise required by law.

     10. Use of Name.  The Fund shall not use the name of the Bank or any of its
affiliates in any prospectus,  statement of additional information,  shareholder
report,  sales literature or other material relating to the Fund in a manner not
approved  by the Bank  prior  thereto in  writing;  provided  however,  that the
approval of the Bank shall not be required  for any use of its name which merely
refers in accurate and factual  terms to its  appointment  hereunder or which is
required by the  Securities  and  Exchange  Commission  or any state  securities
authority  or  any  other  appropriate  regulatory,   governmental  or  judicial
authority;   provided  further,   that  in  no  event  shall  such  approval  be
unreasonably withheld or delayed.

     11. Non-exclusive Services. The Fund understands that the Bank now acts and
will  continue  to act as  administrator  of various  investment  companies  and
fiduciary of other managed accounts, and the Fund has no objection to the Bank's
so acting.  In addition,  it is understood that the persons employed by the Bank
to assist in the  performance of its duties  hereunder may not devote their full
time to such services and nothing herein  contained  shall be deemed to limit or
restrict  the  right of the Bank or any  affiliate  of the Bank to engage in and
devote time and attention to other  businesses or to render services of whatever
kind or nature.

     12.  Business  Continuity.  The  Bank  represents  that  it has in  place a
reasonable business continuity plan.


                  [Remainder of Page Intentionally Left Blank]


<PAGE>


     IN WITNESS  WHEREOF,  the parties hereto have caused this  instrument to be
duly  executed and  delivered by their duly  authorized  officers as of the date
first written above.



                                Boulder Growth & Income Fund, Inc.


                                By:     /s/ Stephen C. Miller
                                Name:   Stephen C. Miller
                                Title:  President



                                INVESTORS BANK & TRUST OMPANY


                                By:     /s/ Robert D. Mancuso
                                Name:   Robert D. Mancuso
                                Title:  SVP



<PAGE>


                                   Appendices


 Appendix A............................................................ Services

 Appendix B........................................................ Fee Schedule


<PAGE>


                                   APPENDIX B

                             Investors Bank & Trust
                       Summary of Administration Functions
                                The Boulder Funds

<TABLE>
<S>                                             <C>                                     <C>
Function                                        Investors Bank & Trust                  Boulder

MANAGEMENT REPORTING
& TREASURY ADMINISTRATION

Monitor portfolio compliance in                 Perform tests of certain specific       Continuously monitor portfolio
accordance with the current Prospectus          portfolio activity designed from        activity and Fund operations in
and SAI.                                        provisions of the Fund's Prospectus     conjunction with 1940 Act,
                                                and SAI.  Follow-up on potential        Prospectus, SAI and any other
                                                violations.                             Applicable laws and regulations.
                                                                                        Monitor testing results and
                                                                                        approve resolution of
                                                                                        compliance issues.
Frequency: Daily

Provide compliance summary package.             Provide a report of compliance          Review report.
                                                testing results.
Frequency: Monthly

Perform asset diversification testing to        Perform asset diversification tests at  Continuously monitor portfolio
establish qualification as a RIC.               each tax quarter end. Follow-up on      activity in conjunction with IRS
                                                issues.                                 requirements. Review test
                                                                                        results and take any necessary
                                                                                        action. Approve tax positions
                                                                                        taken.

Frequency: Quarterly


Perform qualifying income testing to            Perform qualifying income testing       Continuously monitor portfolio
establish qualification as a RIC.               (on book basis income, unless           activity in conjunction with IRS
                                                material differences are anticipated)   requirements.  Review test
                                                on quarterly basis and as may           results and take any necessary
                                                otherwise be necessary. Follow-up       action.  Approve tax positions
                                                on issues.                              taken.

Frequency: Quarterly
</TABLE>

<PAGE>



                                   APPENDIX B


MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
(CONTINUED)

<TABLE>
<S>                                             <C>                                     <C>

Prepare the Fund's annual expense               Prepare preliminary expense budget.     Provide asset level projections
budget. Establish daily accruals.               Notify fund accounting of new           and vendor fee information.
                                                accrual rates.                          Approve expense budget.

Frequency: Annually

Monitor the Fund's expense budget.              Monitor actual expenses updating        Provide asset level projections
                                                budgets/ expense accruals and notify    quarterly. Provide vendor
                                                FAS of any proposed adjustments.        information as necessary.
                                                                                        Review expense analysis and
                                                                                        approve budget revisions.

Frequency: Quarterly

Receive and coordinate payment of fund          Propose allocations of invoice among    Approve invoices and
expenses.                                       funds and obtain authorized approval    allocations of payments. Send
                                                to process payment.                     expense Authorizations and
                                                Calculate various contractual           invoices to IBT in a timely
                                                expenses (e.g. advisory,                manner.
                                                administrative and custody fees).

Frequency: As often as necessary

Calculate periodic dividend rates to be         Calculate amounts available for         Establish and maintain dividend.
declared in accordance with management          distribution.  Coordinate review by     and distribution policies.
guidelines.                                     management and/or auditors.  Notify     Approve distribution rates per
                                                custody and transfer agent of           share and aggregate amounts.
                                                authorized dividend rates in            Obtain Board approval when
                                                accordance with Board approved          required.
                                                policy.  Report dividends to Board as
                                                required.

Frequency: In accordance with the
Funds' dividend policy
</TABLE>


<PAGE>


                                   APPENDIX B


MANAGEMENT REPORTING
& TREASURY ADMINISTRATION
(CONTINUED)

<TABLE>
<S>                                             <C>                                     <C>

Calculate pre-tax total return information      Provide SEC total return calculations.  Review total return information.
on Funds as defined in the current
Prospectus and SAI.

Frequency: Monthly

Prepare disinterested trustee Form 1099-        Summarize amounts paid to               Provide social security numbers
Misc.                                           directors/trustees during the calendar  and current mailing addresses for
                                                year. Prepare and mail Form 1099-       trustees. Review and approve
                                                Misc.                                   information provided for Form
                                                                                        1099-Misc.

Frequency: Annually

Prepare selected portfolio and financial        Prepare selected portfolio and          Review financial information.
information for presentation to Fund            financial information for inclusion in
Management and Board of Directors.              board material.

Frequency: Quarterly (board materials)

Prepare and file Form N-SAR.                    Prepare form for filing. Obtain any     Provide appropriate responses.
                                                necessary supporting documents.         Review and authorize filing.
                                                File with SEC via EDGAR.

Frequency: Semi-annually
</TABLE>


<PAGE>


                                   APPENDIX B

FINANCIAL REPORTING

<TABLE>
<S>                                             <C>                                     <C>

Coordinate the annual audit and semi-           Coordinate the creation of templates    Provide past financial
Annual and quarterly preparation and            reflecting client-selected standardized statements and other
printing of financial statements and notes      appearance and text of financial        information required to create
with management, fund accounting and            statements and footnotes.  Draft and    templates, including report style
the fund auditors.                              manage production cycle.                and graphics. Approve format
                                                Coordinate with IBT fund accounting     and text as standard.  Approve
                                                the electronic receipt of portfolio and production cycle and assist in
                                                general ledger information. Assist in   managing to the cycle.
                                                resolution of accounting issues.        Coordinate review and approval
                                                Using templates, draft financial        by portfolio managers of
                                                statements, coordinate auditor and      portfolio listing to be included
                                                management review, and clear            in financial statements. Prepare
                                                comments. Coordinate NCSR and           appropriate management letter
                                                NQ filings, printing of reports,        and coordinate production of
                                                EDGAR conversion with outside           Management Discussion and
                                                Printer and filing with the SEC via     Analysis. Review and approve
                                                EDGAR.                                  entire report. Make appropriate
                                                                                        representations in conjunction
                                                                                        with audit. Review and approve
                                                                                        Form N-CSR and NQ. Forward
                                                                                        signed Form N-CSR and NQ to
                                                                                        IBT prior to filing report.

Frequency: Annually/semi-annually,
Quarterly
</TABLE>


<PAGE>


                                   APPENDIX B


LEGAL

<TABLE>
<S>                                             <C>                                     <C>
Prepare agenda and board materials for          Assist FAS in maintaining annual        Review and approve board
quarterly board meetings.                       calendar of required quarterly and      materials and board and
                                                annual approvals. Prepare agenda,       committee meeting minutes.
                                                resolutions and certain board
                                                materials for quarterly board
                                                meetings. Prepare supporting
                                                information and materials when
                                                necessary. Assemble, check and
                                                distribute books in advance of
                                                meeting. Attend board and
                                                committee meeting and prepare
                                                minutes.

Frequency: Quarterly


Provide some assistance with updating           Make annual filing of fidelity bond     Obtain required fidelity bond
and filing with the SEC of fidelity bond        insurance material with the SEC.        insurance coverage. Provide
insurance coverage and the directors and        Monitor level of fidelity bond          materials to IBT for SEC filing.
officers errors and omission insurance          insurance maintained in accordance
policies.                                       with required coverage.

Frequency: Annually

Respond to regulatory audits.                   Compile and provide documentation       Coordinate with regulatory
                                                pursuant to audit requests. Assist      auditors to provide requested
                                                client in resolution of audit inquiries.Documentation and resolutions
                                                                                        to inquiries.
Frequency: As needed
</TABLE>


<PAGE>


                                   APPENDIX B


LEGAL    (CONTINUED)

<TABLE>
<S>                                             <C>                                     <C>
Assist with SEC Post-Effective                  Prepare, coordinate with the            Review and approve filings.
Amendments                                      Fund's counsel and file with the
                                                SEC Post-Effective Amendments
                                                to the Fund's Registration
                                                Statement as needed. (PEAs for a
                                                rights offerings are not included in
                                                current fee schedule).

Frequency: As needed

Assist with SEC notices of Annual or            Coordinate with the Fund and            Prepare notices and proxy
Special Meetings of Shareholders.               Fund's counsel and file with the        materials relating to
                                                SEC notices of Annual or Special        shareholder meetings.
                                                Meetings of Shareholders and
                                                proxy materials relating to such
                                                meetings.

Frequency: As needed (at least
annually)

Review of Annual and Semi-Annual                Review drafts prepared by               Review and approve entire
Reports                                         Financial Reporting focusing on         report.
                                                MDFP, Notes to Financial
                                                Statements for accurate descriptions
                                                of: registrant's organization,
                                                valuation policies and procedures,
                                                service providers, contracts and
                                                expenses, Board of
                                                Directors/Trustees. Review for
                                                disclosure regarding availability of
                                                proxy voting policies and proxy
                                                voting record and matters submitted
                                                to a vote of shareholders during
                                                period covered by report.

Frequency: Semi-annually
</TABLE>


<PAGE>


                                   APPENDIX B

<TABLE>
<S>                                             <C>                                     <C>
Review Form N-SAR.                              Review responses with respect to        Provide appropriate responses.
                                                fidelity bond coverage and provide      Review and authorize filing.
                                                information with respect to
                                                shareholder meetings.

Frequency: Semi-annually
</TABLE>


<PAGE>


                                   APPENDIX B


TAX

<TABLE>
<S>                                             <C>                                     <C>
Prepare income tax provisions.                  Calculate investment company            Provide transaction information
                                                taxable income, net tax exempt          as requested.  Identify Passive
                                                interest, net capital gain and spillbackForeign Investment Companies
                                                dividend requirements. Identify         (PFICs).  Approve tax
                                                book-tax accounting differences.        Accounting positions to be
                                                Track required information relating     taken.  Approve provisions.
                                                to accounting differences.

Frequency: Annually

Calculate excise tax distributions.             Calculate required distributions to     Provide transaction information
                                                avoid imposition of excise tax.         As requested. Identify Passive
                                                - Calculate capital gain net            Foreign Investment Companies
                                                income and foreign currency             (PFICs). Approve tax
                                                gain/loss through October 31.           accounting positions to be
                                                - Calculate ordinary income and         taken. Review and approve all
                                                distributions through a specified       income and distribution
                                                cut off date.                           calculations, including
                                                - Project ordinary income               projected income and dividend
                                                from cut off date to December           shares. Approve distribution
                                                31.                                     rates per share and aggregate
                                                - Ascertain dividend shares.            amounts.  Obtain Board
                                                Identify book-tax accounting            approval when required.
                                                differences. Track required
                                                information relating to accounting
                                                differences. Coordinate review by
                                                management and fund auditors.
                                                Notify custody and transfer agent of
                                                authorized dividend rates in
                                                accordance with Board approved
                                                policy. Report dividends to Board as
                                                required.

Frequency: Annually
</TABLE>


<PAGE>


                                   APPENDIX B

TAX   (CONTINUED)

<TABLE>
<S>                                             <C>                                     <C>
Prepare tax returns                             Prepare excise and RIC tax returns      Review and sign tax return.
                                                (both Federal and State).

Frequency: Annually

Prepare Form 1099                               Obtain yearly distribution              Review and approve
                                                information. Calculate 1099             information provided for Form
                                                reclasses and coordinate with transfer  1099.
                                                agent.

Frequency: Annually

Prepare other year-end tax-related              Obtain yearly income distribution       Review and approve
disclosures                                     information. Calculate disclosures      information provided.
                                                (i.e., dividend received deductions,
                                                foreign tax credits, tax-exempt
                                                income, income by jurisdiction,
                                                QDI) and coordinate with transfer
                                                agent.

Frequency: Annually
</TABLE>

Review and Approval

The  attached  Summary  of  Administration   Functions  has  been  reviewed  and
represents the services currently being provided.


        /s/ Robert D. Mancuso
        Robert D. Mancuso  10-05-04
__________________________________
Signature of Account Director/Date


        /s/ Stephen C. Miller
        Stephen C. Miller, President 9/30/04
___________________________________________________
Signature of Authorized Client Representative/ Date


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>13
<FILENAME>collateralsecurities.txt
<DESCRIPTION>EXHIBIT (2)(K)(V) COLLATERAL SECURITIES ACCT
<TEXT>
EXHIBIT 99.(2)(k)(v)
COLLATERAL SECURITIES ACCOUNT AGREEMENT


                     COLLATERAL SECURITIES ACCOUNT AGREEMENT

     AGREEMENT, dated as of October 1, 2004, among BOULDER GROWTH & INCOME FUND,
INC.  ("Borrower"),  a  corporation  organized  under the laws of  Maryland  and
registered as an investment  company  under the  Investment  Company Act of 1940
(the "1940 Act"),  CUSTODIAL  TRUST COMPANY,  a bank organized under the laws of
the State of New  Jersey  ("Lender"),  and  INVESTORS  BANK & TRUST  COMPANY,  a
Massachusetts trust company ("Securities Intermediary").

     WHEREAS,  Borrower  wishes to borrow  funds from  Lender for the purpose of
purchasing and otherwise  dealing in securities in its business as an investment
company registered under the 1940 Act, and to pledge securities and other assets
as collateral for such borrowings pursuant to a Loan and Pledge Agreement, dated
as of February  21,  2003,  between  Lender and  Borrower  (the "Loan and Pledge
Agreement");

     WHEREAS, such securities and other assets belonging to Borrower are held in
custody with Securities Intermediary pursuant to a Custodian Agreement, dated as
of  September  29,  2004,  between  Borrower and  Securities  Intermediary  (the
"Custody Agreement");

     WHEREAS,  to facilitate  Borrower's  pledge pursuant to the Loan and Pledge
Agreement of such securities and other assets,  and to perfect Lender's security
interest therein,  Borrower and Lender desire that all such securities and other
assets as may from time to time be pledged to Lender be  credited to and held in
a segregated  account  established  with  Securities  Intermediary to which only
securities and other assets of Borrower are credited;

     WHEREAS,  Borrower  and  Lender  desire to  retain  and  employ  Securities
Intermediary  to  act,  and  Securities  Intermediary  is  willing  to  act,  as
securities  intermediary  as provided  herein with respect to the securities and
other assets of Borrower that are pledged to Lender;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     1.  DEFINITIONS.  Unless otherwise  defined herein,  capitalized terms used
herein that are  defined in the New York  Uniform  Commercial  Code as in effect
from time to time  (the  "NYUCC")  shall  have the  meanings  given  such  terms
therein. The term "securities intermediary" when used herein but not capitalized
shall have the  meaning  given such term in the NYUCC as in effect  from time to
time.

<PAGE>

     2. APPOINTMENT OF SECURITIES  INTERMEDIARY.  Securities  Intermediary shall
maintain a collateral  security  account for the  securities and other assets of
Borrower  entitled  "Special  Custody  Account for  Custodial  Trust  Company as
Pledgee of Boulder  Growth & Income  Fund,  Inc." (the  "Pledge  Account"),  and
Securities  Intermediary  shall  credit  thereto and  maintain  therein all such
securities  and other assets  acceptable  to it as it may receive for the Pledge
Account in  accordance  with  Section  6(b) or  Section  6(c)  below;  provided,
however,  that  Securities  Intermediary  shall  neither  accept  for the Pledge
Account,  nor credit to and maintain in the Pledge  Account,  any  securities in
physical form, unless  registered in the name of the Securities  Intermediary or
its nominee..

     3. ACCOUNT; REGISTRATION. (a) Securities Intermediary shall open the Pledge
Account  no  later  than on such  date  as  Lender  may  reasonably  direct  and
thereafter  shall maintain the Pledge Account and act hereunder  pursuant to the
terms of this Agreement. Securities Intermediary shall credit to and maintain in
the Pledge Account,  subject to the provisions hereof, all cash,  securities and
other  property  acceptable  to it that it may from time to time receive for the
Pledge Account in accordance  with Section 6(b) and Section 6(c) below.

     (b) All cash, securities and other property in the Pledge Account shall (i)
be  beneficially  owned by  Borrower,  subject  only to the  lien  and  security
interest  in favor of Lender  created  by  Borrower  under  the Loan and  Pledge
Agreement,  and (ii) not be  subject to any right,  charge,  security  interest,
lien,  set-off or claim of any kind in favor of Securities  Intermediary  or any
person (legal or natural) claiming through Securities Intermediary.

     (c) The Pledge  Account shall have credited to it only the  securities  and
other assets of Borrower.

     (d) In maintaining the Pledge Account and otherwise acting pursuant to this
Agreement, Securities Intermediary is acting solely as a securities intermediary
as provided in this Agreement.

     (e) The Pledge Account is an account to which  Financial  Assets are or may
be credited,  and all securities and other assets credited to the Pledge Account
shall be deemed to be Financial Assets under Article 8 of the NYUCC.  Securities
Intermediary  shall indicate by book entry that such Financial  Assets have been
credited to the Pledge Account.

<PAGE>

     (f) Any and all  securities  and  other  property  credited  to the  Pledge
Account may be credited to a Securities  Account that (i) maintained in the name
of Securities  Intermediary or its nominee at (A) any sub-custodian  employed by
Securities  Intermediary  pursuant  to  Section  4 below or (B) at any  clearing
corporation  (or  agency) or  book-entry  system,  inside or outside  the United
States,  which it is  standard  market  practice to use for the  comparison  and
settlement  of  trades  in such  securities  or  other  property,  and (ii) is a
Securities  Account  to  which  are  credited  only  assets  held by  Securities
Intermediary as a securities intermediary, custodian, fiduciary or otherwise for
customers.

     (g) Securities Intermediary shall not change the name of the Pledge Account
without the prior consent in writing of Lender.

     (h)  Securities  Intermediary  is authorized to disclose  Borrower's  name,
address and  securities  positions in the Pledge  Account to the issuers of such
securities when requested by them to do so.

     4.  AGENTS.  Securities  Intermediary  may  employ  other  banks  and trust
companies  as  sub-custodians   and  may  employ  other  suitable  agents.   The
appointment of any agent pursuant to this Section 4 shall not relieve Securities
Intermediary  of any of its  obligations  or liabilities  under this  Agreement.
However,  any  book-entry  system  maintained  by a Federal  Reserve  Bank,  The
Depository  Trust  Company,  Euroclear,   Clearstream  and  any  other  clearing
corporation or agency, which it is or may become standard market practice to use
for the  comparison  and  settlement of trades in securities or other  property,
shall  not  be   sub-custodians,   agents  or   sub-contractors   of  Securities
Intermediary  for  purposes  of  this  Section  4  or  otherwise.

     5.  CONTROL;  ENTITLEMENT  ORDERS AND  INSTRUCTIONS.  (a)  Without  further
consent  of  Borrower  or  any  other  person  (legal  or  natural),  Securities
Intermediary  shall act with respect to securities and other assets  credited to
the Pledge Account only in accordance with written  Entitlement Orders and other
written  instructions  of Lender.  This  Section  5(a) shall not be construed to
prevent Securities  Intermediary from taking, until such time as it is otherwise
instructed by Lender,  the actions provided for in Section 6(c) below or Section
7 below.

     (b) All  Entitlement  Orders and other  instructions  hereunder shall be in
writing.  Securities  Intermediary  may rely upon and act in accordance with any
such Entitlement Orders or other  instructions  which it reasonably  believes to
have been given or signed on behalf of Lender by one of the  persons  designated
by Lender in  Schedule  A hereto  as it may from  time to time be  revised  upon
reasonable notice to Securities Intermediary.

<PAGE>

     (c) Unless otherwise  specified  herein,  all Entitlement  Orders and other
instructions of Lender to Securities  Intermediary,  and all other instructions,
demands,  notices and other  communications given with respect to this Agreement
or the Pledge  Account by one of the parties  hereto to one or both of the other
parties  hereto  shall be sent,  delivered  or  given  to the  recipient  at the
address, or the relevant telephone number, set forth after its name hereinbelow:

                           To Borrower:

                           BOULDER GROWTH & INCOME FUND, INC.
                           1680 38th Street, Suite 800
                           Boulder, CO 80301
                           Attention: Stephen C. Miller
                           Telephone: (303) 442-2156
                           Facsimile: (303 245-0420


                           To Lender:

                           CUSTODIAL TRUST COMPANY
                           101 Carnegie Center
                           Princeton, NJ 08540-6231
                           Attention: Vice President - Trust Operations
                           Telephone: (609) 951-2320
                           Facsimile: (609) 951-2327


                           To Securities Intermediary:

                           INVESTORS BANK & TRUST COMPANY
                           200 Clarendon Street
                           Boston, MA  02116
                           Attention:  Paula Lordi, Client Management
                           Telephone: (617) 937-6674

or at such other address or telephone number as any party shall have provided to
the others by notice given in accordance with this Section 5(c).

<PAGE>


     6. DELIVERY AND RECEIPT OF  SECURITIES;  PAYMENT FOR  SECURITIES;  ETC. (a)
Securities  Intermediary  shall make  deliveries of securities  and other assets
from the Pledge  Account (i) if to Borrower,  only upon and in  accordance  with
instructions  of Lender,  and (ii) if to any other  person  (legal or  natural),
including Lender,  only upon and in accordance with instructions of Lender,  and
only if, before making any such  delivery,  it has received a notice from Lender
certifying  either (A) that an Event of Default  with  respect to  Borrower  has
occurred  under the Loan and Pledge  Agreement  and is  continuing or (B) if the
asset to be delivered from the Pledge  Account is cash,  that such cash is being
applied  in  accordance  with the  Loan  and  Pledge  Agreement  to repay  loans
thereunder.

<PAGE>

     (c) Securities  Intermediary  shall receive for the Pledge Account,  as and
when it becomes due and payable,  any money or property  (including  payments of
principal,  dividends  and  interest)  due and  payable  on or on account of the
securities and other assets credited to the Pledge Account and, unless otherwise
instructed by Lender in a timely manner,  shall promptly pay any such money over
to  Borrower.   All  non-cash   property  that  is  so  received  by  Securities
Intermediary  for the Pledge  Account shall be credited to and maintained in the
Pledge Account as provided in this Agreement.

     7. PROXIES AND OTHER MATERIALS.  (a) Unless otherwise  instructed by Lender
in a timely manner,  Securities Intermediary shall promptly deliver to Borrower,
to the extent required in the Custody Agreement, all notices of meeting, proxies
and proxy  materials  which it receives  regarding  securities held by it in the
Pledge Account.

     (b) Unless otherwise  instructed by Lender,  Securities  Intermediary shall
promptly deliver to Borrower,  to the extent required in the Custody  Agreement,
other documents and written information received by Securities Intermediary from
issuers of securities  credited to the Pledge  Account or from others  regarding
such securities or other assets held in the Pledge Account.

     8. RECORDS AND REPORTS. (a) Securities Intermediary shall keep accurate and
detailed  accounts,  in  accordance  with industry  standards,  of all receipts,
deliveries and other transactions in the Pledge Account, and all accounts, books
and  records  relating  thereto  shall be open to  inspection  and  audit at all
reasonable  times and upon reasonable  prior notice by any person  designated by
Borrower or Lender.

     (b) For each business day that there are securities or other assets held in
the Pledge Account, or there is a transaction in the Pledge Account, a report of
all transactions in the Pledge Account on such business day (or if there were no
such  transactions,  then a statement  to that  effect)  shall be  delivered  by
Securities  Intermediary  to Lender  (at such  e-mail  address  or in such other
manner as Lender may agree  with  Securities  Intermediary  from time to time in
writing) on the next succeeding business day.

<PAGE>

     (c) Securities  Intermediary shall furnish to Borrower and Lender a monthly
statement of  transactions in the Pledge Account and such other reports as shall
be  reasonably  requested by Lender or Borrower  and are provided by  Securities
Intermediary in the ordinary course of its business.

     9. FEES AND  TRANSACTION  COSTS.  Lender shall pay Securities  Intermediary
such fees and charges for services  rendered by  Securities  Intermediary  under
this  Agreement as Lender and  Securities  Intermediary  shall from time to time
agree.

     10. SUPER PRIORITY LIEN;  ADVERSE CLAIMS.  (a) In the event that Securities
Intermediary has, or subsequently obtains, by agreement,  by operation of law or
otherwise a security  interest in the Pledge Account or in any security or other
asset credited thereto,  such security interest shall be subordinate to Lender's
security  interest  therein  pursuant  to the Loan  and  Pledge  Agreement.  The
securities  and other assets held in the Pledge  Account shall not be subject to
deduction,  set-off,  banker's  lien or any other  right in favor of  Securities
Intermediary.

     (b) If, to the knowledge of Securities  Intermediary,  any person (legal or
natural)  asserts any lien,  encumbrance  or other adverse claim  (including any
writ,  garnishment,  judgment,  warrant  of  attachment,  execution  or  similar
process)  against the Pledge Account or any securities or other assets  credited
thereto,  Securities Intermediary shall promptly give notice thereof to Borrower
and Lender.  Securities  Intermediary  shall have no  obligation  to conduct any
investigation or to take any other steps to obtain such knowledge.

     (c) Upon  Security  Intermediary's  request that it do so,  Borrower  shall
exercise such rights as it may then have under the Loan and Pledge  Agreement to
obtain the  release  from the  Pledge  Account of  securities  and other  assets
constituting  excess  collateral in the Pledge Account  pursuant to the Loan and
Pledge Agreement.

     11.  TERMINATION.  (a) This  Agreement  may be  terminated at any time that
there are no loans outstanding under the Loan and Pledge Agreement by any of the
parties  hereto upon seven  days'  written  notice to each of the other  parties
hereto.  In the event of any such  termination  and in accordance  with Lender's
instructions to do so (which  instructions shall not be unreasonably  withheld),
all property  then in the Pledge  Account shall be  transferred  to such custody
accounts of Borrower as Borrower shall have designated to Lender in writing.

<PAGE>

     (b) This Agreement may also be terminated by Securities  Intermediary  upon
termination of the Custody  Agreement and one day's written notice to Lender and
Borrower,  if, prior to the termination of the Custody  Agreement,  all property
then  in  the  Pledge  Account  has  been  transferred  to  collateral  accounts
established on terms and at another securities  intermediary that Lender, in the
exercise of its sole discretion, has approved in writing.

     12.  REPRESENTATIONS  AND  WARRANTIES.  (a) Each of  Borrower,  Lender  and
Securities  Intermediary represents and warrants, as to itself only, that (i) it
has all necessary power and authority to perform its obligations hereunder, (ii)
the execution and delivery by it of this Agreement, and the performance by it of
its obligations under this Agreement, have been duly authorized by all necessary
action,  corporate  or  otherwise,  and will not  violate  any law,  regulation,
charter, by-law, or other instrument,  restriction or provision applicable to it
or by which it is bound, and (iii) this Agreement  constitutes its legal,  valid
and binding  obligation,  enforceable  against it in accordance  with its terms,
subject, as to enforceability of remedies,  to bankruptcy,  insolvency and other
laws affecting  creditors' rights generally and to general principles of equity.
(b) Securities  Intermediary further represents and warrants that (i) the Pledge
Account  has been  established  as set  forth  in  Section  2 above  and will be
maintained  in the  manner  set  forth  herein  until  the  termination  of this
Agreement  pursuant to Section 11 above, (ii) except for the Custody  Agreement,
there are no other agreements entered into between  Securities  Intermediary and
Borrower with respect to the Pledge Account,  (iii) it has not entered into, and
until the  termination  of this  Agreement it will not enter into, any agreement
with any other person (legal or natural)  relating to the Pledge  Account and/or
any Financial Assets credited  thereto pursuant to which it has agreed,  or will
agree, to comply with  Entitlement  Orders or other  instructions of such person
with respect to the Pledge Account or such Financial Assets, and (iv) it has not
entered  into,  and until the  termination  of this  Agreement it will not enter
into,  any  agreement  with  Borrower  purporting  to  limit  or  condition  the
obligation of Securities  Intermediary  to comply with  instructions  of Lender,
including Entitlement Orders, as set forth in this Agreement.

     13. STANDARD OF LIABILITY AND INDEMNITY.  (a) Securities Intermediary shall
be  liable  to  Lender  only for any  loss,  damage,  cost,  expense  (including
reasonable attorneys' fees and disbursements),  liability or claim to the extent
arising  from  willful  misfeasance,  bad  faith  or  negligence  on the part of
Securities  Intermediary.  Securities  Intermediary  shall be liable to Borrower
only for any loss, damage, cost, expense (including  reasonable  attorneys' fees
and  disbursements),  liability  or claim to the  extent  arising  from  willful
misfeasance,   bad  faith  or  gross   negligence  on  the  part  of  Securities
Intermediary.  In no event shall Securities  Intermediary be liable for special,
indirect or  consequential  damages,  even if Securities  Intermediary  has been
advised of the possibility of such damages.

<PAGE>

     (b) Borrower shall indemnify and hold harmless Securities  Intermediary and
any nominee of Securities  Intermediary from and against any loss, damage, cost,
expense (including reasonable  attorneys' fees and disbursements),  liability or
claim arising  directly or indirectly  (i) from the fact that  securities in the
Pledge  Account  are  registered  in the  name of a  nominee,  or (ii)  from the
provision  of  services   under  this   Agreement,   provided  that   Securities
Intermediary  shall not be  indemnified  and held  harmless from and against any
such loss, damage, cost, expense,  liability or claim to the extent arising from
Securities Intermediary's willful misfeasance, bad faith or gross negligence.

     14.  RESPONSIBILITY  OF SECURITIES  INTERMEDIARY.  Securities  Intermediary
shall  have  no  duties  or  obligations   whatsoever  except  such  duties  and
obligations as are specifically set forth in this Agreement,  and no covenant or
obligation shall be implied in this Agreement against  Securities  Intermediary.
In  particular,  but  without  limiting  the  generality  of  this  Section  14,
Securities  Intermediary  shall have no  responsibility to determine whether any
security interest created in favor of Lender under the Loan and Pledge Agreement
or  otherwise  is valid  or  enforceable  or  whether  the  value or type of the
property in the Pledge Account constitutes  adequate security under the Loan and
Pledge  Agreement or  otherwise,  or, if it does not  constitute  such  adequate
security, to take any action other than pursuant to instructions of Lender given
in accordance with this Agreement, or to ensure compliance by Lender or Borrower
with  the Loan and  Pledge  Agreement  or any law or  regulation  regarding  the
establishment or maintenance of margin credit,  or to  independently  verify the
truthfulness  of any  notice  given to  Securities  Intermediary  by  Lender  or
Borrower under this Agreement.

     15.  CONFLICT  WITH  OTHER  AGREEMENTS.  In the  event of any  conflict  or
inconsistency  between  this  Agreement  (or any portion  thereof) and any other
agreement  (whether  now or  hereafter  existing)  entered into between or among
Securities  Intermediary and one or both of the other parties hereto,  the terms
of this Agreement shall prevail.

<PAGE>

     16.  GOVERNING  LAW. This  Agreement,  the Pledge  Account and the Security
Entitlements  related  thereto  shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflict of
law principles  thereof.  Securities  Intermediary's  jurisdiction as securities
intermediary  shall, for purposes of the NYUCC, be deemed to be the State of New
York.

     17. NO WAIVER. No failure by any party hereto to exercise,  and no delay by
such party in exercising, any right hereunder shall operate as a waiver thereof.
The exercise by any party hereto of any right  hereunder  shall not preclude the
exercise of any other right, and the remedies provided herein are cumulative and
not exclusive of any remedies provided at law or in equity.

     18.  AMENDMENTS.  This Agreement  cannot be changed orally,  and, except as
otherwise  provided  herein with  respect to Schedule A hereto,  no amendment to
this Agreement shall be effective  unless  evidenced by an instrument in writing
executed by all the parties hereto.

     19.   COUNTERPARTS.   This  Agreement  may  be  executed  in  one  or  more
counterparts, and by the parties hereto on separate counterparts,  each of which
shall be deemed an original but all of which together  shall  constitute but one
and the same instrument.

     20. SEVERABILITY. If any provision of this Agreement is invalid, illegal or
unenforceable  in any respect under any applicable  law, the validity,  legality
and enforceability of the remaining provisions shall not be affected or impaired
thereby.

     21. SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their  respective  successors and
assigns;  provided,  however, that this Agreement shall not be assignable by any
party hereto  without the written  consent of the other parties  hereto  (except
that Securities  Intermediary may assign this Agreement  without such consent to
any  affiliate of Securities  Intermediary  to which it also assigns the Custody
Agreement).  Any  purported  assignment in violation of this Section 21 shall be
void.

     22.  JURISDICTION.  Any suit,  action or  proceeding  with  respect to this
Agreement may be brought in the Supreme  Court of the State of New York,  County
of New York, or in the United States District Court for the Southern District of
New York, and the parties hereto hereby submit to the non-exclusive jurisdiction
of such  courts  for the  purpose of any such suit,  action or  proceeding,  and
hereby expressly and irrevocably  waive for such purpose any other  preferential
jurisdiction  by reason of their present or future  domicile or  otherwise.  The
parties hereto hereby expressly and irrevocably  waive the right to a jury trial
with respect to any matter relating to this Agreement.

<PAGE>

     23.  HEADINGS.   The  headings  of  sections  in  this  Agreement  are  for
convenience of reference  only and shall not affect the meaning or  construction
of any provision of this Agreement.


<PAGE>


     IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its  representative  thereunto duly
authorized, as of the day and year first above written.


                                BOULDER GROWTH & INCOME FUND, INC.


                                By /s/ Carl Johns
                                Name: Carl Johns
                                Title:  VP and Treasurer


                                CUSTODIAL TRUST COMPANY



                                By: /s/ Ben Szwalbenest
                                Name: Ben Szwalbenest
                                Title: President



                                INVESTORS BANK & TRUST COMPANY



                                By: /s/ Andrew M. Nesvet
                                Name:  Andrew M. Nesvet
                                Title:  Managing Director


<PAGE>


                                   SCHEDULE A


                        Signatures of Authorized Persons


     Set  forth  below  are the names and  specimen  signatures  of the  persons
authorized by CUSTODIAL TRUST COMPANY to give written instructions to Securities
Intermediary.


                  NAME                          SIGNATURE

  Ben Szwalbenest                               /s/ Ben Szwalbenest

  Kevin Darmody                                 /s/ Kevin Darmody

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>14
<FILENAME>loanandpledgeagreemt.txt
<DESCRIPTION>EXHIBIT (2)(K)(VI) LOAN AND PLEDGE AGREEMENT
<TEXT>
EXHIBIT 99.(2)(k)(vi)
LOAN AND PLEDGE AGREEMENT


                            LOAN AND PLEDGE AGREEMENT

     AGREEMENT  dated as of February 21, 2003,  between  CUSTODIAL TRUST COMPANY
("Bank"),  a bank and trust company organized and existing under the laws of the
State of New Jersey,  and BOULDER  GROWTH & INCOME FUND,  INC.  ("Borrower"),  a
company  organized  and  existing  under the laws of the State of  Maryland  and
registered as an investment company under the Investment Company Act of 1940.

     WHEREAS,  Borrower  may seek to  obtain,  and Bank may be  willing to make,
loans to Borrower  from time to time in an aggregate  principal  amount of up to
the lesser of $20,000,000  or the maximum  amount  Borrower is then permitted to
borrow under the Investment Company Act of 1940;

     NOW, THEREFORE, the parties hereto hereby agree as follows:

     1. DEFINITIONS. The following terms, unless the context otherwise requires,
shall have the following meanings as used herein:

     (a)  "Business  Day" means any day on which banks in both the States of New
Jersey and New York are open for business.

     (b) "Collateral" has the meaning given in Section 7(b) below.

     (c) "Collateral  Securities  Account  Agreement",  at any time, means @ the
collateral account agreement,  dated of even date herewith, among Bank, Borrower
and PFPC Trust Company, a trust company organized and existing under the laws of
the State of  Delaware,  or (IIJ if such  agreement is then no longer in effect,
the collateral  account  agreement (if any) to which Bank,  Borrower and another
securities intermediary acting as provided for therein are then parties.

     (d) "Event of Default" has the meaning given in Section 17 below.

<PAGE>

     (e) "Effective Control" by any Person over securities means such control as
will create  under the  Uniform  Commercial  Code of New York,  in favor of such
Person, a prior, perfected security interest in such securities.

     (f) "Excess Collateral" at any time means (IJ all Collateral which does not
consist of cash in the Pledge Account or Pledged Securities and (I.IJ Collateral
consisting of cash in the Pledge Account,  and/or Pledged Securities,  having an
aggregate Initial Loan Value not greater than the difference between (A) the sum
of all cash in the Pledge  Account and the  aggregate  Initial Loan Value of all
Pledged Securities and @the sum of the outstanding aggregate principal amount of
all the Loans and the interest accrued thereon.

     (g)  "Guarantee"  of or by any Person means any  obligation,  contingent or
otherwise,  of such  Person  guaranteeing  or  having  the  economic  effect  of
guaranteeing any Indebtedness of any other Person (the "Primary Obligor") in any
manner,  whether  directly or  indirectly,  and including any obligation of such
Person, direct or indirect,  (i) to purchase (or advance or supply funds for the
purchase  or payment  of) such  Indebtedness  or to  purchase  (or to advance or
supply  funds  for  the  purchase  of) any  security  for  the  payment  of such
Indebtedness,  (ii) to purchase property, securities or services for the purpose
of assuring the owner of such  Indebtedness of the payment of such  Indebtedness
or (iii)  to  maintain  working  capital,  equity  capital  or  other  financial
statement  condition  or  liquidity  of the Primary  Obligor so as to enable the
Primary  Obligor  to pay such  Indebtedness;  provided,  however,  that the term
Guarantee shall not include  endorsements  for collection or deposit,  in either
case in the ordinary course of business.

     (h)  "Indebtedness"  of any  Person  means,  without  duplication,  (i) all
obligations  of such Person for  borrowed  money or with  respect to deposits or
advances of any kind,  (ii) all  obligations of such Person  evidenced by bonds,
debentures,  notes or similar instruments,  (iii) all obligations of such Person
upon which interest  charges are customarily  paid, (iv) all obligations of such
Person issued or assumed as the deferred  purchase price of property or services
which under generally accepted accounting principles would be shown on a balance
sheet of such Person as a liability,  (v) all  Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,  contingent
or otherwise,  to be secured by) any Lien on property  owned or acquired by such
Person,  whether or not the obligations secured thereby have been assumed,  (vi)
all Guarantees by such Person of Indebtedness  of others,  (vii) all obligations
of such Person in respect of interest  rate and  currency  swap  agreements  and
similar  agreements  obligating such Person to make payments,  whether direct or
indirect or periodically or upon the happening of a contingency,  and (viii) all
obligations  of such Person as an account  party in respect of letters of credit
and bankers'  acceptances.  The  Indebtedness  of any Person  shall  include the
Indebtedness of any partnership in which such Person is a general partner.

<PAGE>

     (i)  "Initial  Loan  Value"  means the  collateral  value  assigned  to the
Collateral in accordance with Section 7(e) below.

     (j)  "Interest  Closing  Date" with  respect to any Loan means the day next
preceding  the day that such Loan is repaid in full and,  prior to such day, any
day next preceding an Interest Commencement Date for such Loan.

     (k) "Interest Commencement Date" with respect to any Loan means the date on
which  such  Loan is made and  thereafter  any 21st day of any month if such day
occurs while such Loan is outstanding (or if any such 21st day is not a Business
Day, then the next succeeding Business Day).

     (l)  "Interest  Period" with respect to any Loan means each period from and
including an Interest  Commencement Date for such Loan to and including the next
succeeding Interest Closing Date for such Loan.

     (m) "Lien"  means,  with respect to any asset,  (i) any  mortgage,  deed of
trust,  lien,  pledge,  encumbrance,  charge or security  interest in or on such
asset  or  any   assignment,   hypothecation,   deposit   arrangement  or  other
preferential arrangement of or with respect to such asset, and (ii) any purchase
option, call or similar right of a third party with respect to such asset.

     (n) "Loan" and "Loans" have the meaning given in Section 2 below.

<PAGE>

     (o)  "Maintenance  Loan Value" means the  collateral  value assigned to the
Collateral in accordance with Section 7(e) below.

     (p) "Market Value" means the value assigned to the Collateral in accordance
with Section 7(g) below.

     (q) "1940 Act"  means the  Investment  Company  Act of 1940 as from time to
time in effect.

     (r) "Person" means any individual, sole proprietorship,  partnership, joint
venture,  trust,  unincorporated  organization,  association,  limited liability
company,  corporation,  government  or any agency,  court or political  division
thereof, or any other entity.

     (s)  "Pledge  Account"  means  a  securities   account  maintained  at  the
securities  intermediary  under the Collateral  Securities Account Agreement and
entitled  "Special  Custody  Account for  Custodial  Trust Company as pledgee of
Boulder Growth & Income Fund".

     (t) "Pledged  Securities"  means () all  securities  recorded in the Pledge
Account  (including  uncertificated  securities  recorded  therein) and (ii) all
other  securities and interests into which such  securities are converted or for
which they are exchanged.

     (u) "30-day LIBOR" means the one-month London  Inter-Bank  Offered Rate for
U.S.  dollars as quoted on Page 3750 on the Dow Jones Market  Service,  formerly
known as the  Telerate  Service (or such other page as may replace  Page 3750 on
that service or such other  service as may be  designated  for the time being by
the British  Bankers'  Association as the information  vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates), as of 11 :00
a.m., London time, on an Interest Commencement Date.

     2. LOANS.  (a) Subject to the terms and conditions of this Agreement,  Bank
may,  in its sole and  absolute  discretion,  make loans to  Borrower  (each,  a
"Loan",  and,  collectively,  the  "Loans") at such times and in such amounts as
Borrower may  request,  which  amounts may  beborrowed,  repaid and  reborrowed,
provided that the Loans shall not exceed, in- aggregate  principal amount at any
one time  outstanding,  the lesser of $20,000,000 or the maximum amount Borrower
is then permitted under the 1940 Act to borrow.

<PAGE>

     (b) Each Loan shall be in a principal amount of $100,000 or more.

     (c) Borrower shall request each Loan by notice to Bank,  specifying (i) the
date (which shall be a Business Day) on which Borrower desires that such Loan be
made, (ii) the principal amount of such Loan, (iii) the Collateral for such Loan
and (iv) such  information  about the use of the proceeds from such Loan as Bank
may from time to time  require,  which notice shall be received by Bank no later
than the last Business Day prior to the date on which Borrower desires that such
Loan be made.

     (d) The Loans shall be evidenced by a loan  account  maintained  by Bank in
Borrower's  name  and by the  records  made  therein  by  Bank,  which  shall be
conclusive,  absent  manifest  error,  as to the  amount  of the  Loans  and the
interest and payments thereon. Any failure so to record or any error in doing so
shall not limit or  otherwise  affect  the  obligation  of  Borrower  under this
Agreement to pay any amount owing with respect to the Loans.

     (e)  Performance  by Borrower of all the  obligations  and covenants it has
incurred and made under this Agreement  shall in no way impair or compromise the
sole and absolute  discretion  of Bank to agree or not agree to make any Loan at
any time.

     3. CONDITIONS PRECEDENT. (a) The obligation of Bank to make any Loan, which
it has, in its sole and absolute discretion, agreed to make, shall be subject to
the  fulfillment on the date of the making of such Loan of each of the following
conditions  precedent:  (i) that no event has occurred and is  continuing  which
constitutes an Event of Default or which,  upon the giving of notice,  the lapse
of  time,  or  both,  would  constitute  an  Event  of  Default,  (ii)  that the
representations  and  warranties of Borrower in Sections 9, 10 and 1 I below are
correct and accurate as though made on such date, (iii) that after giving effect
to the making of such Loan,  Borrower's continuous asset coverage, as defined in
the 1940 Act, is no less than 300% of the aggregate  principal  amount of all of
its borrowings,  including such Loan, then  outstanding,  (iv) that Borrower has
fulfilled,  to the satisfaction of Bank, Borrower's  obligations with respect to
such Loan and the  Collateral  therefor as set forth in Section 7(a) below,  (v)
that after giving effect to the making of such Loan and the pledge of Collateral
therefor,  the Collateral then held by Bank includes Pledged Securities,  and/or
cash in the Pledge Account,  having an aggregate  Initial Loan Value equal to or
greater than the sum of the outstanding  aggregate  principal  amount of all the
Loans and the accrued  interest  thereon,  (vi) that after giving  effect to the
making of such Loan and the pledge of Collateral  therefor,  the  representation
and  warranty  of Borrower in Section  11(a) below  continues  to be correct and
accurate,  and (vii) that Bank has received from Borrower such documents as Bank
may reasonably request.

<PAGE>

     (b) The obligation of Bank to make the first Loan which it has, in its sole
and absolute  discretion,  agreed to make shall be subject to the fulfillment of
the  condition  precedent  that,  on or prior to the date of the  making of such
Loan,  Bank shall have received from Borrower (i) the  origination  fee provided
for in Section 13 below,  (ii) a  statement  of assets and  liabilities  and the
related  statement  of  operations  and  statement  of  changes  in  net  assets
("Financials")  for Borrower's most recent  (6-month or 12-month)  fiscal period
for which they are available,  as well as audited Financials for Borrower's most
recent fiscal year for which such audited Financials are available, and (iii) if
requested  by Bank,  a  Statement  of Purpose  (Federal  Reserve  Form U-1) duly
completed and signed by Borrower.

     4. TERMS OF REPAYMENT; WAIVERS. (a) The principal amount of each Loan shall
be  repayable  by Borrower  at any time,  whether or not an Event of Default has
occurred and is then  continuing,  either (i) in full (together with all accrued
interest  on such Loan) upon demand by Bank to Borrower  for such  repayment  in
full,  or (ii) in part  (together  with all accrued  interest on such part) upon
demand by Bank to Borrower for repayment of such part.

     (b)  Performance  by Borrower of all the  obligations  and covenants it has
incurred and made under this Agreement  shall in no way impair or compromise the
right  of Bank in its sole and  absolute  discretion  to  demand,  at any  time,
repayment of all or any portion of any Loan.

<PAGE>

     (c) Any Loan may also become repayable by Borrower, in whole or in part, as
provided in Section 7(d) below,  and shall  become  repayable by Borrower in its
entirety  as  provided  in Section 17 below upon the  occurrence  of an Event of
Default.

     (d)  Borrower  may repay any Loan in its  entirety  or in part at any time,
without premium or notice of any kind but together with all accrued  interest on
the amount thereof that is repaid.

     (e) Borrower  hereby waives  presentment  and protest of any instrument and
notice  thereof,  notice of default and, to the extent  permitted by  applicable
law, all other notices to which Borrower might otherwise be entitled.

     5. INTEREST AND OTHER CHARGES.  (a) Borrower  shall pay Bank  interest,  in
arrears,  on the principal  amount of each Loan from the date on which such Loan
is made pursuant to Section 2 above until such Loan is due under this  Agreement
(whether at maturity, upon prepayment or otherwise),  at a rate per annum during
each Interest Period equal to 30-day LIBOR on the Interest  Commencement Date of
such Interest Period plus one percent (100 basis points).

     (b) All interest  payable under this Agreement shall be calculated by Bank,
on the  basis of a  360-day  year and for the  actual  number  of days  elapsed.
Interest  accrued  on a Loan  pursuant  to Section  5(a) above  shall be payable
monthly  on the 10th day of each  month  (or,  if the 10th day is not a Business
Day, on the next succeeding  Business Day), upon repayment of such Loan in full,
and as otherwise provided in this Agreement.

     (c)  Borrower  shall pay Bank  interest  on any amount not paid by Borrower
when due under this  Agreement,  from the date  payment  of such  amount was due
until the date such amount is paid,  at a rate per annum  during  each  Interest
Period equal to 30-day LIBOR on the Interest  Commencement Date of such Interest
Period plus three percent (300 basis points).  Such interest shall be payable on
demand made by Bank from time to time.

<PAGE>

     (d)  Each  determination  of an  interest  rate  by Bank  pursuant  to this
Agreement shall be conclusive and binding on Borrower in the absence of manifest
error.

     (e) In no event  whatsoever  shall  the  interest  rate and  other  charges
charged  hereunder  exceed the highest  rate  permissible  under any law which a
court of competent  jurisdiction,  in a final  determination,  deems  applicable
hereto.  In the event that such a court  determines,  in a final  determination,
that Bank has received  interest and other  charges  hereunder in excess of such
highest rate, Bank shall promptly refund such excess amount to Borrower, and the
provisions hereof shall be deemed amended to provide for such permissible rate.

     6. PLACE AND MANNER OF PAYMENT.  Borrower shall make all payments  required
to be made by it under this  Agreement  (whether of  principal,  interest or any
other amount) prior to 11:OO A.M. New York time on the date such payment is due,
at such address in the United  States of America as Bank shall from time to time
indicate to Borrower, in U.S. dollars and in immediately available funds.

     7. COLLATERAL  SECURITY,  PLEDGE AND LOAN VALUES. (a) On or before the date
of the making of any Loan, (i) Borrower shall deliver to the Pledge Account,  or
otherwise give to Bank as pledgee Effective  Control over,  securities which are
acceptable  to Bank in its sole and absolute  discretion  and on the date of the
making of such Loan either (A) have an  aggregate  Initial Loan Value of no less
than the  principal  amount of such Loan or (B) if there is on such date  Excess
Collateral consisting of Pledged Securities,  and/or cash in the Pledge Account,
have an aggregate Initial Loan Value of no less than the difference  between (x)
the principal  amount of such Loan and (y) the  aggregate  Initial Loan Value of
such Excess  Collateral,  and (ii) in the case of securities  in physical  form,
Borrower shall deliver to Bank such  instruments of assignment,  signed in blank
by  Borrower,   consents  and  other  documents,   all  in  form  and  substance
satisfactory  to Bank,  as may be required to enable Bank as pledgee to exercise
its rights and remedies under Section 18 below .

<PAGE>

     (b) To secure the due and punctual payment of all of the Loans, all accrued
interest  thereon and all other  amounts  from time to time  payable by Borrower
under this Agreement, and the performance by Borrower of all its obligations and
covenants under this  Agreement,  Borrower hereby pledges to Bank, and grants to
Bank a first  priority,  perfected  security  interest in and lien upon, (i) all
Pledged Securities at any time in the Pledge Account,  including  uncertificated
securities  recorded therein,  (ii) all other property of Borrower now or at any
time  hereafter in Bank's  possession  including,  but not limited to, all other
securities,  monies, claims and credit balances,  (iii) all property of Borrower
now or at any  time  hereafter  held by or  through  any of  Bank's  affiliates,
including  securities held in Borrower's accounts with securities  broker-dealer
affiliates of Bank, and (iv) all proceeds, products and profits derived from any
of the foregoing (including all cash,  securities,  dividends and other property
at any time and from time to time received,  receivable or otherwise distributed
in respect of or in exchange  for any or all of the  foregoing,  proceeds of any
insurance policies, proceeds of proceeds, and claims against third parties), and
all books and  records  related to any of the  foregoing  (all of the  foregoing
Pledged Securities and other property, together with all other property in which
Borrower may hereafter grant a Lien to Bank, being herein collectively  referred
to as the "Collateral").

     (c) Bank and Borrower hereby agree that each partnership interest,  limited
liability company member interest and other item of property (whether investment
property, financial asset, security,  instrument or cash) held in or credited to
any account of Borrower at Bank or at any  affiliate of Bank shall be treated as
a "financial asset" under Article 8 of the New York Uniform Commercial Code.

     (d) At all times while any Loan is  outstanding,  Borrower  shall  maintain
Collateral in the Pledge Account  consisting of Pledged  Securities  and/or cash
having  an  aggregate  Maintenance  Loan  Value of not less  than the sum of the
outstanding aggregate principal amount of all the Loans and the interest accrued
(and unpaid) thereon.  Forthwith upon demand made to Borrower by Bank,  Borrower
shall, at its option,  either (i) deliver into the Pledge Account,  or otherwise
give to  Bank  as  pledgee  Effective  Control  over,  such  additional  Pledged
Securities, which are acceptable to Bank in its sole and absolute discretion, or
(ii) repay so much of the outstanding  aggregate  principal amount of the Loans,
as, in either case, may be necessary for the aggregate Maintenance Loan Value of
all  Collateral  consisting  of Pledged  Securities,  and/or  cash in the Pledge
Account,  to be no less  than  the sum of the  outstanding  aggregate  principal
amount of all the Loans and the interest accrued thereon.

<PAGE>

     (e) The  Initial  Loan Value and the  Maintenance  Loan Value of any of the
Pledged Securities or other item of Collateral in the Pledge Account are each an
amount representing a percentage of the Market Value of such Pledged Security or
other item of  Collateral  and shall be  determined  either in  accordance  with
Schedule A hereto (which may be  supplemented or revised at any time in the sole
and  absolute  discretion  of Bank) or from time to time by Bank in its sole and
absolute  discretion if such Initial Loan Value and  Maintenance  Loan Value are
not set forth on such Schedule A, provided that any of such  Collateral  that is
subject to any Lien other than one permitted under Section 16(b)(iv) below shall
have no Initial or Maintenance Loan Value.

     (f) With the prior approval of Bank as to any substitute  securities and/or
other collateral and as to the manner of substitution,  Borrower may at any time
and from time to time substitute such securities and/or other collateral for all
or some of the Collateral, provided that no Event of Default has occurred and is
continuing and that,  immediately after giving effect to such substitution,  the
aggregate  Initial Loan Value of all remaining Pledged  Securities,  and cash in
the  Pledge  Account,  is not  less  than the sum of the  outstanding  aggregate
principal amount of the Loans and the interest accrued thereon.

     (g) If and for so long as any  securities  (including  Pledged  Securities)
belonging to Borrower are listed on a national securities exchange in the United
States of America,  their Market Value shall be  determined  for all purposes by
the last sales price for such  Pledged  Securities  on any such  exchange on the
Business Day next preceding the date of  determination  or, if there was no sale
on that Business Day, by the last sales price for such Pledged Securities on the
next  preceding  Business  Day on which  there  was a sale  thereof  on any such
exchange,  all as quoted on the Consolidated Tape of the New York Stock Exchange
or,  if not  quoted  on such  Consolidated  Tape,  then as  quoted  by any  such
exchange. The Market Value of any other item of Collateral, and the Market Value
of  Pledged  Securities  if they are not listed on any such  exchange,  shall be
determined  by Bank for all  purposes  (i)  based  upon the  prices  bid (on the
Business  Day  next   preceding  the  date  of   determination)   by  banks  and
broker/dealers which regularly quote prices on property of the same type as such
item of Collateral or (ii) if no such quotations are available for such Business
Day, based upon such factors as Bank, in its sole and absolute discretion, shall
determine.  Market  Value,  in the case of  interest-bearing  Collateral,  shall
include  accrued  interest to the date on which such Market Value is determined.
Each  determination  of Market Value shall be conclusive and binding on Borrower
in the absence of manifest error.

<PAGE>

     (h)  Subject to Section  7(j) below,  Bank shall cause to be promptly  paid
over to Borrower (i) any and all cash  dividends and interest paid on any of the
Collateral and credited to the Pledge Account,  and (ii) any other cash credited
to the Pledge Account on account of the Collateral  (whether upon the repayment,
redemption or exchange of any thereof or otherwise), unless, after giving effect
to such payment of cash  dividends  or interest or other cash to  Borrower,  the
aggregate  Maintenance  Loan Value of all  Pledged  Securities,  and cash in the
Pledge  Account,  would  be  less  than  the  sum of the  outstanding  aggregate
principal  amount of all the Loans and the interest  accrued  thereon,  in which
case such cash shall  promptly  be applied to the  repayment  of such  aggregate
principal  amount  and the  payment  of  such  interest.  Any  and all  non-cash
distributions  of  property  (including  stock  dividends)  made for any  reason
whatsoever  on or in respect of any of the  Collateral  shall be credited to the
Pledge Account and form part of the Collateral subject to this Agreement.

     (i) Subject to Section 7(j) below,  Borrower shall be entitled to exercise,
for any purpose not inconsistent  with the terms of this Agreement,  any and all
voting  and/or  consensual  rights  and powers  relating  or  pertaining  to the
Collateral.  In  furtherance of such exercise and to the extent that it receives
them,  Bank shall deliver to Borrower all notices of meetings,  proxy  materials
(other than  proxies) and other  materials  that are  distributed  (i) regarding
Pledged Securities,  by the issuers thereof or, in the case of tender,  exchange
or similar offers for Pledged Securities, by the party (or its agent) making the
offer and (ii) regarding Pledged Securities or any other item of Collateral,  by
any  court  having  jurisdiction  over  (or by any  Person  who is a  party  to)
reorganization,  liquidation or other similar proceedings for the issuer of such
Pledged  Securities  or the obligor on such other item of  Collateral.  Whenever
Bank or any of its agents  receives a proxy with respect to Pledged  Securities,
Bank shall promptly  request  instructions  from Borrower on how such securities
are to be  voted,  and shall  give  such  proxy,  or-cause  it to be  given,  in
accordance with such instructions. If Borrower timely informs Bank that Borrower
wishes to vote any such Pledged  Securities in person,  Bank shall promptly seek
to have a legal proxy covering such securities issued to Borrower.

<PAGE>

     (j) If an Event of Default occurs and for so long as it continues, Borrower
shall cease to be entitled (i) to exercise any and all voting and/or  consensual
rights and powers  relating or pertaining to any of the  Collateral  and (ii) to
receive any cash dividends and interest, or other cash, payable on or on account
of any of the  Collateral;  and Bank shall have the sole and exclusive right and
authority to exercise  such voting  and/or  consensual  rights and powers and to
receive and retain such  dividends,  interest and other cash. Any money received
by Bank pursuant to this Section  7(j),  shall be retained by Bank as additional
Collateral and applied in accordance with the provisions of this Agreement.

     (k) (i) Any time there is Excess Collateral,  and provided that no Event of
Default has  occurred and is  continuing,  Borrower  may  designate to Bank,  in
writing,  any of such Excess  Collateral,  and,  promptly upon such designation,
such designated  Excess  Collateral shall be released from the lien and security
interest granted in Section 7(b) above and, if such designated Excess Collateral
is credited to the Pledge  Account,  Bank shall  instruct PFPC Trust Company (or
such other Person then acting as securities  intermediary  under the  Collateral
Securities  Account  Agreement)  to deliver it to such  account of  Borrower  as
Borrower may designate,  provided that,  immediately after giving effect to such
delivery,  the aggregate Initial Loan Value of all remaining Pledged Securities,
and cash in the  Pledge  Account,  is not less  than the sum of the  outstanding
aggregate principal amount of all the Loans and the interest accrued thereon.

          (ii) Provided that no Event of Default has occurred and is continuing,
     and unless Bank and Borrower agree otherwise, Borrower shall have the right
     to deal freely  under this  Agreement  in any item of  Collateral  which is
     neither a Pledged Security nor cash credited to the Pledge Account.

<PAGE>

     (l) Upon (i) the  payment in full of all the Loans,  all  accrued  interest
thereon and all other amounts payable by Borrower under this Agreement, and (ii)
the  performance  by Borrower of all its  obligations  and covenants  under this
Agreement,  the security  interest and lien granted in Section 7(b) above in and
upon the Collateral shall  terminate,  and all of Bank's rights hereunder to the
Collateral  shall  revert to  Borrower.  Upon  notice from  Borrower  after such
termination,  Bank shall deliver to Borrower, or give Borrower Effective Control
over, all  Collateral  under Bank's  control,  and shall deliver to Borrower all
instruments and documents evidencing such Collateral and such other documents as
Borrower shall reasonably request to evidence such termination.

     8. PROTECTION OF SECURITY INTEREST.  (a) Borrower shall, at its expense and
from time to time, perform all steps reasonably requested by Bank at any time to
perfect, maintain, protect and enforce Bank's security interest in and lien upon
the  Collateral,   including,  without  limitation,  (i)  executing  and  filing
financing  or  continuation  statements  and  amendments  thereto,  in form  and
substance   satisfactory   to  Bank,   and  (ii)  obtaining  such  consents  and
registrations  of  transfer,  providing  such  endorsements  and  executing  and
delivering  such other  documents as may be required  for any sale,  transfer or
other  disposition  thereof by Bank  pursuant to Section 18 below.  From time to
time, Borrower shall, upon Bank's written request,  promptly execute and deliver
confirmatory  written  instruments  pledging  the  Collateral  to Bank,  but any
failure by Borrower to do so shall not affect or limit Bank's security  interest
in, lien upon or other rights in and to the Collateral. Until payment in full of
all the Loans,  all accrued  interest  thereon and all other amounts  payable by
Borrower  under  this  Agreement,   and  the  performance  by  Borrower  of  its
obligations and covenants under this Agreement,  Bank's security interest in the
Collateral shall continue in full force and effect.

     (b) Borrower hereby irrevocably  appoints Bank its true and lawful attorney
in its name, place and stead, and at its expense,  solely in connection with the
preservation  and enforcement of Bank's rights and remedies under this Agreement
and whether before or after an Event of Default, to receive, endorse and collect
all checks and other  orders for the  payment of money made  payable to Borrower
representing   any  dividend,   interest  or  other   distribution   payable  or
distributable in respect of any of the Collateral and to give full discharge for
the same, and after an Event of Default, and for so long as it continues, (i) to
give all notices,  obtain aH consents,  effectuate all  registrations  in Bank's
name or that of a proposed  purchaser or other transferee and make all transfers
of all or any part of the  Collateral  which are  necessary  or  appropriate  in
connection with any sale, transfer or other disposition thereof pursuant to this
Agreement,  (ii) to date,  insert  therein the name of an assignee,  and deliver
each of any instruments of assignment delivered to Bank pursuant to Section 7(a)
above, and to prepare and execute all such amendments thereto as may be required
to obtain any consent  necessary for Bank's sale,  transfer or other disposition
of the item of Collateral to which such instrument of assignment pertains, (iii)
to execute and deliver for value all necessary or  appropriate  assignments  and
other  instruments  in  connection  with  any  such  sale,   transfer  or  other
disposition,  and (iv) to execute and deliver  all other  documents,  and do all
other acts and things, which Bank deems appropriate in such connection.

<PAGE>

     9.  OTHER  LIENS.  Borrower  represents  and  warrants  to  Bank  that  all
Collateral is owned by Borrower free and clear of all Liens  whatsoever  (except
for Liens permitted under Section 16(b)(iv) and that (except for Liens permitted
under Section 16(b) below) it will continue to be so owned by Borrower.

     10. USE OF  PROCEEDS.  Borrower  represents  and  warrants to Bank that the
proceeds  of each  Loan will be used to  purchase  portfolio  securities  in its
business as an investment company registered under the 1940 Act.

     11. OTHER  REPRESENTATIONS AND WARRANTIES.  Borrower further represents and
warrants to Bank that:

     (a) at no time shall the Collateral include any Pledged Securities or other
property  in an amount  such that  (without  taking any other  relationships  or
assets of Bank into  account)  Bank,  either upon  exercising  its rights  under
Section 18 below or otherwise, would become a holder of 10% or more of any class
of any equity  security of any issuer or would  become (or be presumed to be) an
affiliate of any issuer of securities  (as such term  "affiliate" is defined for
purposes of the Securities Act of 1933);

<PAGE>

     (b) Borrower is not an affiliate (as such term  "affiliate"  is defined for
purposes of the  Securities  Act of 1933) of the issuer of any Pledged  Security
(or other security included in the Collateral);

     (c) if any Pledged  Securities  are  "restricted  securities" as defined in
Rule 144 under the Securities Act of 1933,  then at least two years have elapsed
since the later of the date such Pledged  Securities were acquired by any Person
from the  issuer  thereof  or from an  affiliate  of such  issuer  (as such term
"affiliate"  is  defined  for  purposes  of the  Securities  Act of 1933),  and,
assuming that Bank is not an affiliate of the issuer of such securities (as such
term  "affiliate" is defined for purposes of the  Securities Act of 1933),  Bank
may, in the  exercise of its rights  under  Section 18 below,  sell such Pledged
Securities pursuant to paragraph (k) of such Rule 144;

     (d) Borrower (i) is a company duly organized,  validly existing and in good
standing  under the laws of the State of  Maryland,  (ii) is subject to and duly
registered as a management  investment  company in accordance with the 1940 Act,
(iii) is qualified to do business and is in good standing in all states in which
qualification  and good  standing  are  necessary in order for it to conduct its
business and own its property, and (iv) has all requisite power and authority to
conduct its business, to own its property, to execute and deliver this Agreement
and to perform its obligations hereunder;

     (e) this  Agreement  has been duly and validly  executed  and  delivered by
Borrower and  constitutes  a legal,  valid and binding  obligation  of Borrower,
enforceable   against  it  in  accordance  with  its  terms,   subject,   as  to
enforceability of remedies,  to bankruptcy,  insolvency and other laws affecting
creditors' rights generally and to general principles of equity;

     (f) Borrower has taken all  necessary  action to authorize  the  execution,
delivery and performance of this Agreement, and such authorization, delivery and
performance do not and will not (i) violate its corporate  charter or by-laws or
any law, rule, regulation, order, judgment, injunction, decree, determination or
award  presently  in effect and  applicable  to it, (ii)  require any consent or
result in a breach of or  constitute  a default  under any  agreement,  lease or
instrument  to which it is a party  or by which it or any of its  assets  may be
bound or affected,  or (111) result in or require the creation or  imposition of
any Lien (other than in favor of Bank pursuant to this  Agreement)  upon or with
respect to any of the properties now owned or hereafter acquired by it;

<PAGE>

     (g) no recording,  order,  authorization,  consent, license,  registration,
approval,  exemption,  filing,  notice  or other  similar  action by or with any
governmental body,  governmental  official or other regulatory authority (except
such as have been  obtained  and  copies  or  confirmations  of which  have been
delivered  by Borrower to Bank) is or will be  necessary  (i) for the  legality,
validity,  binding effect or enforceability of this Agreement and the Collateral
Securities Account Agreement,  (ii) to permit the performance by Borrower of its
obligations under this Agreement in accordance with the terms thereof,  (iii) to
enable Bank to enforce its rights and remedies under this Agreement or under the
Collateral  Securities Account Agreement,  including any sale, transfer or other
disposition  by Bank of all or any part of the  Collateral or (iv) to create and
perfect the Lien  granted  under this  Agreement on the Pledged  Securities  and
other Collateral in the Pledge Account;

     (h) Borrower has no Indebtedness  other than  Indebtedness  permitted under
Section 16(a) below;

     (i) Borrower is not in default with respect to any of its Indebtedness;

     (j ) except as disclosed by it to Bank in writing prior to the date of this
Agreement,  there  is no  litigation  or other  proceeding  pending  or,  to its
knowledge,  threatened  against  or  affecting  Borrower  which,  if  determined
adversely  to it,  would have a  material  adverse  effect (i) on its  financial
condition, operations or business or (ii) on any of the Collateral; and

     (k) the audited  statement of assets and liabilities of Borrower as of June
30, 2002,  and the related  statement of operations  and statement of changes in
net assets for the  12-month  period then ended and the  unaudited  statement of
assets and  liabilities  of  Borrower  as of  November  30, 2002 and the related
statement  of  operations  and  statement  of  changes  in net  assets  for  the
five-month  period  then  ended,  copies of all of which  have  heretofore  been
delivered to Bank by Borrower,  and all other  statements  and data submitted in
writing in  connection  with the  request  for the credit  contemplated  by this
Agreement are true and correct, and said financials fairly present the financial
condition of Borrower as at the dates thereof and the results of its  operations
for the periods then ended,  and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis, subject,  however,
to year-end audit  adjustments in the case of such financials for the five-month
period  ended  November 30, 2002.  Since  November 30, 2002,  there have been no
changes in the assets or  liabilities  or financial  condition of Borrower other
than changes in the ordinary  course of business,  and no such changes have been
materially adverse changes. Borrower has no knowledge of any liabilities that it
has at said dates,  contingent  or  otherwise,  not  reflected  in said  balance
sheets,  and Borrower  has not entered into any  commitments  or  contracts,  or
incurred any other liabilities,  which are not reflected in said balance sheets,
which  may  have a  materially  adverse  effect  upon its  financial  condition,
operations or business as now conducted.

<PAGE>

     12. REITERATION OF  REPRESENTATIONS.  The representations in Sections 9, 10
and 11 above  shall be deemed to be  repeated  by  Borrower  each time a Loan is
made.

     13.  ORIGINATION FEE. Upon execution of this Agreement,  Borrower shall pay
Bank an origination fee of $5,000 for the  establishment  of the credit facility
provided in this Agreement.

     14.  REPORTING.  (a) As soon as available,  and in any event within 45 days
after the close of each of the first six months of each fiscal year of Borrower,
commencing with the six months ending on May 31, 2003, Borrower shall deliver to
Bank its statement of assets and  liabilities  at the end of such six months and
its related  statement of operations  and statement of changes in net assets for
the portion of the fiscal year ending on the last day of such six months, all in
reasonable   detail  and  stating  in  comparative  form  the  figures  for  the
corresponding  date  and  period  in  the  previous  fiscal  year,  prepared  in
accordance with generally accepted accounting principles applied on a consistent
basis and  certified  by  Borrower's  chief  financial  or  accounting  officer,
subject, however, to year-end audit adjustments.

<PAGE>

     (b) As soon as  available,  and in any event within 90 days after the close
of each of its fiscal  years,  Borrower  shall  deliver to Bank its statement of
assets  and  liabilities  as at the close of such  fiscal  year and its  related
statement of  operations  and statement of changes in net assets for such fiscal
year, all in reasonable detail and stating in comparative form the figures as at
the close of and for the  previous  fiscal  year,  audited by  certified  public
accountants   satisfactory   to  Bank  and  accompanied  by  a  report  thereon,
satisfactory to Bank, issued by such accountants.

     (c) Promptly after the same are  available,  Borrower shall deliver to Bank
copies  of all  reports  and  other  material  that  Borrower  may  send  to its
shareholders.

     15. BORROWER'S OTHER AFFIRMATIVE  COVENANTS.  Borrower  covenants with Bank
that until the payment in full of all Loans,  all accrued  interest  thereon and
all other amounts payable by Borrower under this Agreement,  and the performance
by Borrower of all its obligations and covenants under this Agreement, it shall:

     (a)  maintain  and  preserve  its  existence  and all  rights,  privileges,
approvals and other authority adequate for the conduct of its business;

     (b)  promptly  notify Bank in writing of any  violation  by Borrower of any
law,  statute,  regulation or ordinance of any  governmental  entity,  or of any
agency  thereof,  applicable to it which would likely  materially  and adversely
affect the  Collateral  or the  financial  condition,  operations or business of
Borrower;

     (c) promptly notify Bank in writing of any default by Borrower with respect
to any of Borrower's Indebtedness;

     (d)  promptly  execute  and  deliver  to Bank such  Statements  of  Purpose
(Federal Reserve Form U-1's) under Regulation U of the Board of Governors of the
Federal  Reserve  System as Bank may request  from  Borrower  with regard to any
Pledged Securities; and

<PAGE>

     (e) promptly upon Bank's request therefor, deliver to Bank such information
and  documents  regarding  Borrower as Bank may from time to time  request  from
Borrower.

     16.  BORROWER'S  NEGATIVE  COVENANTS.  Borrower  covenants  that  until the
payment in full of all Loans, all accrued interest thereon and all other amounts
payable by Borrower under this Agreement, and the performance by Borrower of all
its obligations and covenants under this Agreement, Borrower shall not:

     (a) create,  incur, assume or permit to exist any Indebtedness,  except for
accounts payable incurred in the ordinary course of business,  Loans outstanding
hereunder and Indebtedness to affiliates of Bank; or

     (b) create,  incur,  assume or permit to exist any Lien on any  property or
assets now owned or  hereafter  acquired by  Borrower,  other than (i) Liens for
taxes  not  delinquent  or  which  are  being  contested  in good  faith  and in
appropriate  proceedings,  (ii) Liens in connection with workers'  compensation,
unemployment  insurance  or  social  security  obligations,   (iii)  mechanics',
workmen's,  materialmen's,  landlords', carriers' or other like Liens arising in
the ordinary course of business with respect to obligations which are not due or
which are being  contested in good faith,  (iv) Liens in favor of the securities
intermediary  under the Collateral  Securities  Account Agreement that are fully
and  unconditionally   subordinated  to  Bank's  security  interest  under  this
Agreement,  (v)  Liens  in favor  of  Bank,  and (v) in the  case of  Collateral
consisting of property held by or through Bank's  affiliates,  Liens in favor of
such affiliates.

     17. EVENTS OF DEFAULT.  It shall  constitute an Event of Default  hereunder
(and upon the occurrence  thereof the then outstanding  principal amount of each
Loan and all accrued interest thereon shall become  immediately due and payable,
without  demand,  presentment  or notice of any  kind,  all of which are  hereby
expressly waived) if at any time:

     (a) Borrower fails to pay the principal  amount of any Loan when and in the
amount due; or

<PAGE>

     (b) Borrower fails to make or pay when due any interest payment,  charge or
other amount  required to be made or paid by it under this  Agreement,  and such
failure continues for a period in excess of five Business Days; or

     (c) Borrower  fails to deliver into the Pledge  Account,  and/or  otherwise
give to Bank Effective Control over,  Collateral in accordance with Section 7(d)
above upon demand therefor made by Bank orally or in writing; or

     (d)  Borrower  fails to perform  or observe  any other  term,  covenant  or
condition  to be  performed  or  observed by it under this  Agreement,  and such
failure  continues  for a period  in  excess  of ten days  after  Bank has given
Borrower notice of such failure to perform or observe; or

     (e) any representation or warranty made by Borrower in Sections 9, 10 or 11
above proves to have been incorrect in any material  respect on any of the dates
as of which made or deemed to have been repeated; or

     (f) Borrower  defaults in the payment when due,  whether at stated maturity
or otherwise,  or within any applicable  grace period,  of any  Indebtedness  of
Borrower (other than Indebtedness under this Agreement) in a principal amount of
more than $100,000, whether now or hereafter existing; or

     (g) Borrower fails to perform any other term,  covenant or agreement on its
part to be  performed  under  any  agreement  or  instrument  (other  than  this
Agreement)  evidencing  or  securing  or  relating  to any  of its  Indebtedness
(whether now or hereafter existing) in a principal amount of more than $100,000,
or any event occurs or condition exists, if the effect of such failure, event or
condition is to cause,  or to permit the holder or holders of such  Indebtedness
(with or without  the giving of  notice,  lapse of time or both) to cause,  such
Indebtedness to become due prior to its stated maturity; or

     (h)(i)  Borrower  as  debtor  commences  a case  or  proceeding  under  any
bankruptcy,  insolvency,  reorganization,  liquidation,  dissolution, or similar
law, or seeks the  appointment  of a  receiver,  trustee,  custodian  or similar
official for itself or any substantial part of its property,  (ii) any such case
or  proceeding is commenced  against it, or another  seeks such an  appointment,
which (A) is  consented  to or not timely  contested  by it, (B)  results in the
entry of an order  for  relief,  such an  appointment,  or the entry of an order
having a similar effect,  or (C) is not dismissed within 60 days, (iii) it makes
a general assignment for the benefit of creditors,  or (iv) it admits in writing
its inability to pay its debts as they become due; or

<PAGE>

     (i) one or  more  judgments  or  orders  for the  payment  of  money  in an
aggregate amount in excess of $100,000 are rendered against Borrower and (A) the
same  remain  undischarged  for a period of 14 or more  consecutive  days during
which execution  thereof is not  effectively  stayed upon appeal or otherwise or
(B) any proceeding by a creditor to enforce the same is pending; or

     (j) any event or  circumstance  occurs which in the reasonable  judgment of
Bank  materially  impairs  the  creditworthiness  of  Borrower or its ability to
perform its payment or other obligations under this Agreement; or

     (k)  Borrower  (i)  materially  violates the 1940 Act in the conduct of its
business,  (ii)  ceases  to be  registered  under  the 1940 Act as a  management
investment company, or (iii) is dissolved or ceases to do business; or

     (1) PFPC Trust  Company (or such other  Person  then  acting as  securities
intermediary under the Collateral Securities Account Agreement) fails to perform
or observe any material term,  covenant or condition to be performed or observed
by it under the Collateral  Securities Account Agreement,  which, in Bank's sole
and absolute  judgment,  in any way materially  impairs or otherwise  materially
jeopardizes the enforcement of Bank's rights in the Collateral; or

     (m) the Collateral  Securities Account Agreement ceases at any time and for
any reason to be in full force and effect, provided, that any termination of the
Collateral  Securities  Account Agreement to which PFPC Trust Company is a party
that is strictly in accordance with the terms of Section 11 thereof shall not be
an Event of Default hereunder.

<PAGE>

     18. BANK'S RIGHTS AND REMEDIES. (a) If an Event of Default occurs hereunder
and is continuing,  then, in addition to having the right to exercise any rights
and remedies  available to a secured  creditor under  applicable law, Bank shall
have (i) the right (without being required to give any notice to Borrower except
as may be required in Section 18(c) below) to sell, publicly or privately,  at a
place of Bank's  choosing,  any or all of the  Collateral  and (in such order as
Bank in its sole and absolute discretion may determine) to apply the proceeds of
such sale to the payment of the principal of, and accrued (but unpaid)  interest
on, the Loans and of any other amounts payable by Borrower under this Agreement,
and (ii) the right to apply to the payment of such principal, interest and other
amounts  (in  such  order  as Bank  in its  sole  and  absolute  discretion  may
determine) any cash held by Bank as part of the  Collateral  pursuant to Section
7(j) above.

     (b) If any Pledged Securities or other items of Collateral are, in whole or
in part,  actually  convertible  into or  exchangeable  for  securities or other
property, then, upon the occurrence of an Event of Default and for so long as it
continues,  Bank  shall  have the right,  in its sole and  absolute  discretion,
instead of selling  such  Pledged  Securities  or other items of  Collateral  as
provided in Section  18(a) above,  to convert or exchange  them  pursuant to the
terms applicable  thereto, to apply any cash received by Bank in such conversion
or exchange to the payment of the principal of and accrued interest on the Loans
and of any other amounts payable by Borrower under this  Agreement,  and to sell
as provided in Section 18(a) above any  securities or other property it receives
in such conversion or exchange.

     (c) If any of the Pledged Securities and other items of Collateral are of a
type customarily sold 011 recognized  markets,  then no notification to Borrower
of any public or private sale thereof by Bank is  required,  provided,  however,
that if any such notice is required by  applicable  law with respect to any such
sale, then one Business Day's notice thereof shall be reasonable notification to
Borrower.

<PAGE>

     19. NO WAIVER.  No failure by Bank to exercise  any right,  power or remedy
under this Agreement,  and no delay by Bank in exercising any such right,  power
or remedy,  shall operate as a waiver  thereof;  nor shall any single or partial
exercise  of any such  right,  power or remedy  preclude  any  other or  further
exercise  thereof or the exercise by Bank of any other  right,  power or remedy.
The rights and remedies of Bank provided for in this  Agreement  are  cumulative
and not exclusive of any rights and remedies otherwise available.

     20.  ENTIRE  AGREEMENT;  AMENDMENTS.  This  Agreement  contains  the entire
agreement of the parties with respect to the Loans,  and,  except as provided in
Section 5(e) above,  no amendment,  modification,  termination  or waiver of any
provision  thereof or consent to a  departure  therefrom  by  Borrower  shall be
effective unless the same is in writing and signed by both Bank and Borrower.

     21.  SUCCESSORS AND ASSIGNS;  PARTICIPATIONS.  (a) This Agreement  shall be
binding  upon and shall  inure to the  benefit of the  parties  hereto and their
respective  representatives,  successors and assigns,  provided,  however,  that
except as  provided  in  Section 21 (b) below it may not be  assigned  by either
party hereto  without the prior written  consent of the other party hereto,  and
any purported assignment in violation of this provision shall be null and void.

     (b) Section 21(a) above notwithstanding, Bank may from time to time, in its
sole and absolute discretion and without Borrower's further consent,  (i) assign
this  Agreement  and the  Loans to any  affiliate  of Bank,  which is a bank (as
defined  in the 1940  Act),  or (ii) sell  participations  in any Loan or Loans,
provided,  however, that in the case of any such sale of participations,  Bank's
obligations under this Agreement shall remain unchanged and that it shall remain
solely responsible to Borrower for its performance thereof.

     22.  GOVERNING LAW;  JURISDICTION.  (a) This Agreement shall be governed by
and  construed  in  accordance  with the laws of the State of New York,  without
regard to the  conflict of law  principles  thereof.  Bank's  jurisdiction  as a
securities  intermediary  shall, for purposes of the New York Uniform Commercial
Code, be the State of New York.

<PAGE>

     (b) Any suit,  action or proceeding  with respect to this  Agreement or any
Loan may be brought in the Supreme Court of the State of New York, County of New
York, or in the United States  District  Court for the Southern  District of New
York, and the parties hereto hereby submit to the non-exclusive  jurisdiction of
such courts for the purpose of any such suit,  action or proceeding,  and hereby
waive for such purpose any other  preferential  jurisdiction  by reason of their
present or future  domicile  or  otherwise.  Each of the parties  hereto  hereby
irrevocably  waives its right to trial by jury in any suit, action or proceeding
with respect to this Agreement or any Loan.

     23. NOTICES. Unless otherwise specified,  all notices and demands, given or
required to be given by any party hereto to any other party hereto,  shall be in
writing and shall be deemed to have been properly given if and when delivered in
person to the address set forth after the recipient's  name herein below or sent
by facsimile to the telephone  number set forth after the recipient' name herein
below or if sent by mail,  five (5) business  days after having been  deposited,
registered or certified mail, postage prepaid,  in any post office,  branch post
office or mail depository maintained by the U.S. Postal Service and addressed as
follows:


                  If to Bank, at:
                           CUSTODIAL TRUST COMPANY
                           101 Carnegie Center
                           Princeton, NJ 08540-6231
                           Attention: Loan Compliance Officer
                           Telephone: (609) 951-2313
                           Facsimile:  (609) 951-2317


                  If to Borrower, at:
                           BOULDER GROWTH & INCOME FUND, INC.
                           1680 38th Street, Suite 800
                           Boulder, CO 80301
                           Attention: Stephen C. Miller
                           Telephone: (303) 442-2156
                           Facsimile:  (303) 245-0420

<PAGE>

or to such other address or telephone number as each party may designate for
itself by like notice.

     24.  EXPENSES.  Borrower  shall  pay or,  at the  election  of Bank,  shall
reimburse  Bank  for  paying,  (a)  all  reasonable  costs,  fees  and  expenses
(including  reasonable  attorneys' fees) incurred by Bank in connection with the
enforcement of this Agreement and Bank's  security  interest in the  Collateral,
and (b) all transfer,  stamp, documentary or other similar taxes, assessments or
charges  levied by any tax or other  governmental  authority  in respect of this
Agreement  or any Loan (but not  including  any taxes  imposed on or measured by
Bank's overall net income).

     25. SEVERABILITY. If any provision of this Agreement is invalid, illegal or
unenforceable in any jurisdiction,  the validity, legality and enforceability of
the remaining  provisions  of this  Agreement  (and the  validity,  legality and
enforceability  of  such  provision  in any  other  jurisdiction)  shall  not be
affected or impaired thereby.

     26.  MISCELLANEOUS.  (a) All  agreements,  representations  and  warranties
contained in this  Agreement  shall  survive the  execution and delivery of this
Agreement and the making of any Loan.

     (b) Bank shall not be under any obligation at any time to ascertain whether
Borrower is in compliance  with the 1940 Act, the  regulations  thereunder,  the
provisions of its charter documents or by-laws, or its investment objectives and
policies as then in effect.

     (c) Bank shall be held to the  exercise of  reasonable  care in the custody
and  preservation  of the Collateral in its  possession,  and shall be deemed to
have exercised such care if such Collateral is accorded treatment  substantially
equal to that which Bank accords to its own property.

     (d) Except to the extent that  pursuant to Section  26(c) above Bank may be
liable to Borrower  for Bank's  negligence  in the custody and  preservation  of
Collateral in Bank's possession,  and except as may be otherwise provided in the
matter of collateral by applicable  provisions of the Uniform Commercial Code as
in effect in the State of New York, Bank shall be without  liability to Borrower
for any loss,  damage,  cost,  expense,  liability or claim which does not arise
from willful  misfeasance,  bad faith or gross negligence on the part of Bank in
taking or omitting to take any action under this Agreement.

<PAGE>

     (d) Bank shall have the continuing and exclusive right to apply any and all
payments to any portion of the Loans.  All payments by Borrower to Bank pursuant
to this Agreement shall be made without set-off, and none of such payments shall
be subject to any counterclaim by Borrower.  To the extent that Borrower makes a
payment  or  Bank  receives  any  payment  for  Borrower's  benefit,   which  is
subsequently invalidated,  declared to be fraudulent or preferential,  set aside
or required  to be repaid to a trustee,  debtor in  possession,  receiver or any
other party under any bankruptcy,  reorganization  or insolvency law, common law
or equitable cause, then, to such extent,  the obligation  hereunder of Borrower
which was to have been  satisfied by such payment  shall be revived and continue
as if such payment had not been received by Bank.

     (e) The  headings of  sections in this  Agreement  are for  convenience  of
reference only and shall not affect the meaning or construction of any provision
of this Agreement.

     (f) This Agreement may be executed in one or more  counterparts  and by the
parties  hereto  on  separate  counterparts,  each of which  shall be  deemed an
original  but all of  which  together  shall  constitute  but  one and the  same
instrument.


<PAGE>


     IN WITNESS  WHEREOF,  each of the parties has caused this  Agreement  to be
executed  in its name and on its  behalf by its  representative  thereunto  duly
authorized, all as of the day and year first above written.


                        BOULDER GROWTH & INCOME FUND


                        By: /s/ Carl Johns
                        Name: Carl Johns
                        Title: Vice President and Chief Financial Officer



                        CUSTODIAL TRUST COMPANY


                        By: /s/ Ben Szwalbenest
                        Name: Ben Szwalbenest
                        Title: President


<PAGE>


                                   SCHEDULE A


        Collateral Type                         Loan Value
                                                (as a % of Market Value)


                                                Initial          Maintenance
Cash                                            100%             100%


Equity securities
(U.S. issuers only)                             50%             66.6%

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K
<SEQUENCE>15
<FILENAME>bifdelegationagreemtwibt.txt
<DESCRIPTION>EXHIBIT (2)(K)(VII) DELEGATION AGREEMENT
<TEXT>
EXHIBIT 99.(2)(k)(vii)
DELEGATION AGREEMENT

                              DELEGATION AGREEMENT

     AGREEMENT,  dated as of 29th day of September 2004 by and between INVESTORS
BANK & TRUST  COMPANY,  a  Massachusetts  trust  company (the  "Delegate"),  and
Boulder Growth & Income Fund, Inc., a Maryland corporation (the "Fund").

     WHEREAS,  pursuant to the  provisions  of Rule 17f-5  under the  Investment
Company Act of 1940,  as amended (the "1940 Act"),  and subject to the terms and
conditions  set forth  herein,  the Board of  Directors  of the Fund  desires to
delegate to the Delegate certain responsibilities  concerning Foreign Assets (as
defined  below),  and the Delegate hereby agrees to retain such  delegation,  as
described herein; and

     WHEREAS,  pursuant to the  provisions of Rule 17f-7 under the 1940 Act, and
subject to the terms and conditions set forth herein,  the Board of Directors of
the Fund desires to retain the Delegate to provide certain  services  concerning
Foreign  Assets,  and the Delegate  hereby agrees to provide such  services,  as
described herein;

     NOW  THEREFORE,  in  consideration  of  the  premises  and  of  the  mutual
agreements contained herein, the parties hereto agree as follows:

1. Definitions

     Capitalized terms in this Agreement have the following meanings:

     a.   Authorized Representative

          Authorized  Representative  means  any  one of  the  persons  who  are
     empowered,  on behalf of the parties to this Agreement,  to receive notices
     from the other party and to send notices to the other party.

     b.   Board

          Board means the Board of Directors (or the body authorized to exercise
     authority  similar to that of the board of directors of a  corporation)  of
     Fund.

     c.   Country Risk

          Country Risk means all factors reasonably related to the systemic risk
     of  holding  Foreign  Assets in a  particular  country  including,  but not
     limited  to,  such  country's  financial   infrastructure   (including  any
     Securities Depositories operating in such country);  prevailing custody and
     settlement  practices;  and laws applicable to the safekeeping and recovery
     of Foreign Assets held in custody.

     d.   Eligible Foreign Custodian

          Eligible  Foreign   Custodian  has  the  meaning  set  forth  in  Rule
     17f-5(a)(1) and it is understood that such term includes  foreign  branches
     of U.S. Banks (as the term "U.S. Bank" is defined in Rule 17f-5(a)(7)).

<PAGE>

     e.   Foreign Assets

          Foreign Assets has the meaning set forth in Rule 17f-5(a)(2)

     f.   Foreign Custody Manager

          Foreign Custody Manager has the meaning set forth in Rule 17f-5(a)(3).

     g.   Securities Depository

          Securities Depository has the meaning set forth in Rule 17f-4(a).

     h.   Monitor

          Monitor means to re-assess or re-evaluate,  at reasonable intervals, a
     decision, determination or analysis previously made.

2. Representations

     a.   Delegate's Representations

          Delegate  represents  that it is a trust company  chartered  under the
     laws of the Commonwealth of Massachusetts. Delegate further represents that
     the persons  executing this Agreement and any amendment or appendix  hereto
     on its behalf are duly  authorized  to so bind the Delegate with respect to
     the subject matter of this Agreement.

     b.   Fund's Representations

          Fund represents that the Board has determined that it is reasonable to
     rely  on  Delegate  to  perform  the  responsibilities  described  in  this
     Agreement.   Fund  further  represents  that  the  persons  executing  this
     Agreement  and any  amendment  or  appendix  hereto on its  behalf are duly
     authorized  to so bind the Fund with respect to the subject  matter of this
     Agreement.

3. Jurisdictions and Depositories Covered

     a.   Initial Jurisdictions and Depositories

          The  authority  delegated by this  Agreement in  connection  with Rule
     17f-5 applies only with respect to Foreign Assets held in the jurisdictions
     listed in Appendix A1. Delegate's  responsibilities under this Agreement in
     connection  with Rule  17f-7  apply  only with  respect  to the  Securities
     Depositories  listed in Appendix A2. Upon the creation of a new  Securities
     Depository in any of the jurisdictions listed in Appendix A1 at the time of
     such creation,  such Securities  Depository will automatically be deemed to
     be  listed  in  Appendix  A2 and  will  be  covered  by the  terms  of this
     Agreement.

<PAGE>

     b.   Added Jurisdictions and Depositories

          Jurisdictions  and  related  Securities  Depositories  may be added to
     Appendix A1 and Appendix A2, respectively, by written agreement in the form
     of Appendix B. Delegate's  responsibility and authority with respect to any
     jurisdiction or Securities Depository, respectively, so added will commence
     at the later of (i) the time that Delegate's Authorized  Representative and
     Board's Authorized  Representative  have both executed a copy of Appendix B
     listing such jurisdiction  and/or Securities  Depository,  or (ii) the time
     that  Delegate's  Authorized  Representative  receives a copy of such fully
     executed Appendix B.

     c.   Withdrawn Jurisdictions

          Board may withdraw its (i)  delegation to Delegate with respect to any
     jurisdiction  or (ii)  retention of Delegate with respect to any Securities
     Depository,  upon written notice to Delegate. Delegate may withdraw its (i)
     acceptance of delegation with respect to any jurisdiction or (ii) retention
     with respect to any  Securities  Depository,  upon written notice to Board.
     Ten days (or such  longer  period  as to which  the  parties  agree in such
     event) after receipt of any such notice by the Authorized Representative of
     the party  other  than the party  giving  notice,  Delegate  shall  have no
     further  responsibility  or authority  under this Agreement with respect to
     the  jurisdiction(s)  or Securities  Depository  as to which  delegation is
     withdrawn.

4. Delegation of Authority to Act as Foreign Custody Manager

     a.   Selection of Eligible Foreign Custodians

          Subject to the  provisions of this Agreement and the  requirements  of
     Rule 17f-5 (and any other  applicable  law),  Delegate  is  authorized  and
     directed to place and maintain  Foreign  Assets in the care of any Eligible
     Foreign  Custodian(s)  selected by Delegate in each  jurisdiction  to which
     this  Agreement  applies,   except  that  Delegate  does  not  accept  such
     authorization and direction with regard to Securities Depositories.

     b.   Contracts With Eligible Foreign Custodians

          Subject to the  provisions of this Agreement and the  requirements  of
     Rule 17f-5 (and any other applicable law),  Delegate is authorized to enter
     into, on behalf of Fund, such written  contracts  governing  Fund's foreign
     custody  arrangements  with such  Eligible  Foreign  Custodians as Delegate
     deems appropriate.

5. Monitoring of Eligible Foreign Custodians and Contracts

          In each case in which  Delegate has exercised the authority  delegated
     under this  Agreement  to place  Foreign  Assets with an  Eligible  Foreign
     Custodian,  Delegate  is  authorized  to,  and  shall,  on  behalf of Fund,
     establish a system to Monitor the  appropriateness  of maintaining  Foreign
     Assets with such Eligible Foreign Custodian. In each case in which Delegate
     has exercised the authority  delegated under this Agreement to enter into a
     written contract governing Fund's foreign custody arrangements, Delegate is
     authorized to, and shall, on behalf of Fund,  establish a system to Monitor
     the appropriateness of such contract.

<PAGE>

6. Securities Depositories

     a. In accordance with the requirements of Rule 17f-7,  Delegate shall, upon
execution  of this  Agreement,  provide  the Fund or its  investment  adviser or
administrator  with an analysis of the custody risks associated with maintaining
assets with each Securities Depository listed on Appendix A2 hereto.

     b. In  accordance  with the  requirements  of Rule  17f-7,  Delegate  shall
Monitor  the  custody  risks  associated  with  maintaining   assets  with  each
Securities  Depository  listed on Appendix A2 hereto on a continuing  basis, and
shall promptly notify the Fund or its investment  adviser of any material change
in such risks.

7. Guidelines and Procedures for the Exercise of Delegated Authority

     a.   Board's Conclusive Determination Regarding Country Risk

          In exercising its delegated  authority under this Agreement,  Delegate
     may assume,  for all purposes,  that Board (or Fund's  investment  adviser,
     pursuant to authority  delegated by Board) has considered,  and pursuant to
     its fiduciary duties to Fund and Fund's shareholders, determined to accept,
     such Country Risk as is incurred by placing and maintaining  Foreign Assets
     in the  jurisdictions  to which this Agreement  applies.  In exercising its
     delegated  authority  under this  Agreement,  Delegate may also assume that
     Board (or Fund's  investment  adviser,  pursuant to authority  delegated by
     Board) has, and will  continue to,  Monitor such Country Risk to the extent
     Board deems necessary or appropriate.

          Except as  specifically  described  herein,  nothing in this Agreement
     shall require Delegate to make any selection or to engage in any Monitoring
     on behalf of Fund that would entail consideration of Country Risk.

     b.   Selection of Eligible Foreign Custodians

          In exercising  the authority  delegated  under this Agreement to place
     Foreign Assets with an Eligible Foreign Custodian, Delegate shall determine
     that  Foreign  Assets  will be subject  to  reasonable  care,  based on the
     standards  applicable  to  custodians  in the  market in which the  Foreign
     Assets  will  be  held,  after  considering  all  factors  relevant  to the
     safekeeping of such Foreign Assets, including, without limitation:

               i.   The Eligible Foreign Custodian's practices,  procedures, and
                    internal  controls,  including,  but  not  limited  to,  the
                    physical protections  available for certificated  securities
                    (if applicable),  the method of keeping  custodial  records,
                    and the security and data protection practices;

               ii.  Whether the Eligible  Foreign  Custodian  has the  financial
                    strength to provide reasonable care for Foreign Assets;

               iii. The Eligible  Foreign  Custodian's  general  reputation  and
                    standing;

               iv.  Whether  Fund  will  have  jurisdiction  over and be able to
                    enforce  judgments  against the Eligible Foreign  Custodian,
                    such as by virtue of the  existence  of any  offices  of the
                    Eligible Foreign Custodian in the

<PAGE>

                    United States or the Eligible Foreign Custodian's consent to
                    service of process in the United States; and

               v.   In the  case  of an  Eligible  Foreign  Custodian  that is a
                    banking institution or trust company, any additional factors
                    and criteria set forth in Appendix C to this Agreement.

     c.   Evaluation of Written Contracts

          In exercising  the authority  delegated  under this Agreement to enter
     into written contracts  governing Fund's foreign custody  arrangements with
     an Eligible Foreign Custodian, Delegate shall determine that such contracts
     provide   reasonable  care  for  Foreign  Assets  based  on  the  standards
     applicable to Eligible Foreign Custodians in the relevant market. In making
     this determination,  Delegate shall ensure that the terms of such contracts
     comply with the provisions of Rule 17f-5(c)(2).

     d.   Monitoring of Eligible Foreign Custodians

          In  exercising  the  authority   delegated  under  this  Agreement  to
     establish a system to Monitor the  appropriateness  of maintaining  Foreign
     Assets with an  Eligible  Foreign  Custodian  or the  appropriateness  of a
     written contract  governing Fund's foreign custody  arrangements,  Delegate
     shall  consider  any factors and  criteria  set forth in Appendix D to this
     Agreement.  If, as a result of its Monitoring of Eligible Foreign Custodian
     relationships  hereunder or otherwise,  the Delegate determines in its sole
     discretion  that  it is in the  best  interest  of the  safekeeping  of the
     Foreign Assets to move such Foreign Assets to a different  Eligible Foreign
     Custodian,  the Fund shall bear any expense  related to such  relocation of
     Foreign Assets.

8. Standard of Care

     a. In exercising the authority  delegated  under this Agreement with regard
to its duties under Rule 17f-5,  Delegate  agrees to exercise  reasonable  care,
prudence  and  diligence  such  as  a  person  having   responsibility  for  the
safekeeping of Foreign Assets of an investment company registered under the 1940
Act would exercise.

     b. In carrying out its responsibilities under this Agreement with regard to
Rule  17f-  7,  Delegate  agrees  to  exercise  reasonable  care,  prudence  and
diligence.

9. Reporting Requirements

     Delegate agrees to provide written reports notifying Board of the placement
of Foreign  Assets  with a  particular  Eligible  Foreign  Custodian  and of any
material change in Fund's  arrangements  with such Eligible Foreign  Custodians.
Such reports shall be provided to Board quarterly for  consideration at the next
regularly  scheduled  meeting  of the Board or earlier  if deemed  necessary  or
advisable by the Delegate in its sole discretion.

<PAGE>

10. Provision of Information Regarding Country Risk

     With respect to the  jurisdictions  listed in Appendix A1, or added thereto
pursuant  to Article  3,  Delegate  agrees to  provide  the Board and the Fund's
investment  adviser  or  administrator  with  access to Eyes to the  WorldTM,  a
service available  through the Delegate's Web Site at www.ibtco.com,  containing
information relating to Country Risk, if available,  as is specified in Appendix
E to this Agreement.  Such information relating to Country Risk shall be updated
from time to time as the Delegate deems necessary.

11. Limitation of Liability.

     a. Notwithstanding  anything in this Agreement to the contrary, in no event
shall  the  Delegate  or any of its  officers,  directors,  employees  or agents
(collectively,  the  "Indemnified  Parties")  be liable to the Fund or any third
party,  and the Fund shall  indemnify and hold the Delegate and the  Indemnified
Parties harmless from and against any and all loss, damage, liability,  actions,
suits, claims, costs and expenses,  including legal fees, (a "Claim") arising as
a result of any act or omission of the Delegate or any  Indemnified  Party under
this  Agreement,  except for any Claim  resulting  solely  from the  negligence,
willful  misfeasance  or bad faith of the  Delegate  or any  Indemnified  Party.
Without limiting the foregoing, neither the Delegate nor the Indemnified Parties
shall be liable for,  and the  Delegate  and the  Indemnified  Parties  shall be
indemnified against, any Claim arising as a result of:

               i.   Any act or omission by the Delegate or any Indemnified Party
                    in  reasonable  good faith  reliance  upon the terms of this
                    Agreement, any resolution of the Board, telegram,  telecopy,
                    notice, request,  certificate or other instrument reasonably
                    believed by the Delegate to be genuine;

               ii.  Any  information  which the  Delegate  provides  or does not
                    provide under Section 10 hereof;

               iii. Any acts of God, earthquakes, fires, floods, storms or other
                    disturbances   of   nature,   epidemics,   strikes,   riots,
                    nationalization,  expropriation, currency restrictions, acts
                    of  war,  civil  war  or  terrorism,  insurrection,  nuclear
                    fusion,  fission or  radiation,  the  interruption,  loss or
                    malfunction  of  utilities,   transportation   or  computers
                    (hardware  or  software)   and  computer   facilities,   the
                    unavailability   of  energy   sources   and  other   similar
                    happenings or events.

     b. Notwithstanding  anything to the contrary in this Agreement, in no event
shall the Delegate or the Indemnified Parties be liable to the Fund or any third
party for lost profits or lost revenues or any special, consequential,  punitive
or incidental  damages of any kind  whatsoever in connection with this Agreement
or any activities hereunder.

12. Effectiveness and Termination of Agreement

     This Agreement  shall be effective as of the later of the date of execution
on behalf of Board or Delegate and shall remain in effect  until  terminated  as
provided herein.  This Agreement may be terminated at any time, without penalty,
by written  notice  from the  terminating  party to the  non-terminating  party.
Termination will become  effective 30 days after receipt by the  non-terminating
party of such notice.

<PAGE>

13. Authorized Representatives and Notices

     The  respective  Authorized  Representatives  of Fund  and  Board,  and the
addresses to which notices and other  documents  under this  Agreement are to be
sent to each, are as set forth in Appendix F. Any Authorized Representative of a
party  may  add  or  delete   persons  from  that  party's  list  of  Authorized
Representatives  by written notice to an Authorized  Representative of the other
party.

14. Governing Law

     This  Agreement  shall be  constructed  in accordance  with the laws of the
Commonwealth of Massachusetts without regard to principles of choice of law.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their duly authorized  representatives  as of the date first written
above.


INVESTORS BANK & TRUST COMPANY

By:     /s/ Robert D. Mancuso
Name:   Robert D. Mancuso
Title:  Senior Vice President


Boulder Growth & Income Fund, Inc.

By:     /s/ Stephen C. Miller
Name:   Stephen C. Miller
Title:  President

<PAGE>

List of Appendices

     A1 -- Jurisdictions Covered

     A2 - Securities Depositories Covered

     B -- Additional Jurisdictions/Securities Depositories Covered

     C --  Additional  Factors and  Criteria To Be Applied in the  Selection  of
Eligible Foreign Custodians That Are Banking Institutions or Trust Companies

     D -- Factors  and  Criteria To Be Applied in  Establishing  Systems For the
Monitoring of Foreign Custody Arrangements and Contracts

     E -- Information Regarding Country Risk

     F -- Authorized Representatives

<PAGE>


<TABLE>
<CAPTION>


                                   APPENDIX A1

                              Jurisdictions Covered

                [delete those countries which are not delegated]

                           <S>                       <C>
                           Argentina                 Kenya
                           Austria                   Korea
                           Australia                 Latvia
                           Bahrain                   Lebanon
                           Bangladesh                Lithuania
                           Belgium                   Luxembourg
                           Bermuda                   Malaysia
                           Bolivia                   Mauritius
                           Botswana                  Mexico
                           Brazil                    Morocco
                           Bulgaria                  Namibia
                           Canada                    Netherlands
                           Chile                     New Zealand
                           China                     Norway
                           Clearstream (Cedel)       Oman
                           Colombia                  Pakistan
                           Costa Rica                Panama
                           Croatia                   Papau New Guinea
                           Cyprus                    Peru
                           Czech Republic            Philippines
                           Denmark                   Poland
                           Ecuador                   Portugal
                           Egypt                     Romania
                           Estonia                   Russia
                           Euroclear                 Singapore
                           Finland                   Slovak Republic
                           France                    Slovenia
                           Germany                   South Africa
                           Ghana                     Spain
                           Greece                    Sri Lanka
                           Hong Kong                 Swaziland
                           Hungary                   Sweden
                           Iceland                   Switzerland
                           India                     Taiwan
                           Indonesia                 Thailand
                           Ireland                   Turkey
                           Israel                    Ukraine
                           Italy                     United Kingdom
                           Ivory Coast               Uruguay
                           Japan                     Venezuela
                           Jordan                    Zambia
                           Kazakhstan                Zimbabwe
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

                                   APPENDIX A2

                         Securities Depositories Covered

<S>             <C>                <C>               <C>

Argentin        aCDV               Philippines       PCD
                CRYL                                 RoSS

Australia       Austraclear Ltd.   Poland            CRBS
                CHESS                                NDS
                RITS

Austria         OeKB AG            Portugal          Central de Valores
                                                     Mobiliarios

Bahrain         None               Romania           NBR
                                                     SNCDD
                                                     Stock Exchange
                                                      Registry, Clearing
                                                      & Settlement

Bangladesh      None               Russia            DCC
                                                     NDC
                                                     VTB

Belgium         BKB                Singapore         CDP
                CIK                                  MAS
Bermuda         None               Slovak Republic   NBS
                                                     SCP

Botswana        None                Slovenia         KDD

Brazil          CBLC                South Africa     STRATE
                CETIP                                The Central Depository
                SELIC                                (Pty) Ltd.

Bulgaria        The Bulgarian       Spain            Banco de Espana
                 National Bank                       SCLV
                The Central Depository

Canada          Bank of Canada      Sri Lanka        CDS
                CDS

Chile           DCV                 Sweden           VPC AB

China           SSCC                Switzerland      SIS SegaIntersettle AG
                SSCCRC

<PAGE>

Clearstream                         Taiwan           TSCD

Colombia        DCV                 Thailand         TSD
                DECEVAL

Costa Rica      CEVAL               Turkey           CBT
                                                     Takasbank

Croatia         CNB                 Ukraine          Depository of the
                Ministry of Finance                   National Bank of
                SDA                                   Ukraine
                                                     MFS Depository

Czech Republic  SCP                 Uruguay          None
                TKD

Denmark         VP                  United Kingdom   CMO
                                                     CREST

Ecuador         DECEVALE, S.A.      Venezuela        BCV
                                                     CVV

Egypt           Misr for Clearing,  Zambia           Bank of Zambia
                 Settlement & Dep.                   LuSE CSD

Estonia         ECDSL               Zimbabwe         None

Euroclear

Finland         APK

France          Sicovam SA

Germany         Clearstream

Ghana           None

Greece          Bank of Greece
                CSD

Hong Kong       CCASS
                CMU

Hungary         Keler Ltd.

India           CDSL
                NSDL

<PAGE>

Indonesia       Bank Indonesia
                PT.KSEI

Ireland         CREST
                Gilt Settlement Office

Israel          TASE Clearing
                House Ltd.

Italy           Banca d-Italia
                Monte Titoli

Ivory Coast*    Depositaire Central/
                 Banque de Reglement

Japan           Bank of Japan
                JASDEC

Jordan          SDC

Kazakhstan      Kazakhstan Central
                 Securities Depository

Kenya           Central Bank of Kenya
                 Central Depository

Korea           KSD

Latvia          Bank of Latvia
                LCD

Lebanon         Banque de Liban
                MIDCLEAR

Lithuania       CSDL

Luxembourg      Clearstream

Malaysia        BNM (SSTS)
                MCD

Mauritius       CDS

Mexico          S.D. Indeval

Morocco         Maroclear S.A.

Netherlands     NECIGEF

<PAGE>

New Zealand     New Zealand Central
                 Securities Depository

Norway          VPS

Oman            MDSRC

Pakistan        Central Depository Co.
                 of Pakistan Limited
                 State Bank of Pakistan

Peru            CAVALI
</TABLE>


* Benin,  Burkina-Faso,  Guinea Bissau,  Mali,  Nigeria,  Senegal,  and Togo are
available through the Ivory Coast



<PAGE>


                                   APPENDIX B

                        Additional Jurisdictions Covered


     Pursuant to Article 3 of this Agreement,  Delegate and Board agree that the
following jurisdictions shall be added to Appendix A1:


                   [insert additional countries/depositories]



INVESTORS BANK & TRUST COMPANY

By:     /s/ Robert D. Mancuso
Name:   Robert D. Mancuso
Title:  Senior Vice President


Boulder Growth & Income Fund, Inc.

By:     /s/ Stephen C. Miller
Name:   Stephen C. Miller
Title:  President


DATE:   09/30/04


                                   APPENDIX C

                  Additional Factors and Criteria To Be Applied
                 in the Selection of Eligible Foreign Custodians
                That Are Banking Institutions or Trust Companies


     In  addition to the factors  set forth in Rule  17f-5(c)(1),  in  selecting
Eligible  Foreign  Custodians that are banking  institutions or trust companies,
Delegate shall consider the following factors,  if such information is available
(check all that apply):



_________ None


_________ Other (list below):

<PAGE>


                                   APPENDIX D

                       Factors and Criteria To Be Applied
                in the Establishing Systems For the Monitoring of
                   Foreign Custody Arrangements and Contracts


     In establishing  systems for the Monitoring of foreign custody arrangements
and contracts  with Eligible  Foreign  Custodians,  Delegate  shall consider the
following factors, if such information is available:


     1. Operating performance

     2. Established practices and procedures

     3. Relationship with market regulators

     4. Contingency planning

<PAGE>


                                   APPENDIX E

                       Information Regarding Country Risk


     To aid the Board in its  determinations  regarding  Country Risk,  Delegate
will  furnish  Board  annually  with respect to the  jurisdictions  specified in
Article 3, the following information:


     1. Copy of Addenda or Side Letters to Subcustodian Agreements

     2. Legal Opinion, if available, with regard to:

         a) Access to books and records by the Fund's accountants

         b) Ability to recover assets in the event of bankruptcy of a custodian

         c) Ability to recover assets in the event of a loss

         d) Likelihood of expropriation or nationalization, if available

         e) Ability to repatriate or convert cash or cash equivalents

     3. Audit Report

     4. Copy of Balance Sheet from Annual Report

     5. Country Profile Matrix containing market practice for:

         a) Delivery versus payment

         b) Settlement method

         c) Currency restrictions

         d) Buy-in practice

         e) Foreign ownership limits

         f) Unique market arrangements

<PAGE>


                                   APPENDIX F
                           Authorized Representatives


     The names and addresses of each party's authorized  representatives are set
forth below:

     A. Board

     With a copy to:       Fund Administrative Services, LLC
                           1680 38th Street, Suite 800
                           Boulder, CO 80301
                           Attention: Stephen C. Miller, Manager
                           Fax: (303) 245-0420


     B. Delegate

         Investors Bank & Trust Company
         200 Clarendon Street
         P.O. Box 9130 Boston, MA 02117-9130
         Attention: Paula A. Lordi, Senior Director, Client Management
         Fax: (617) 330-6033

     With a copy to:

                           Investors Bank & Trust Company
                           200 Clarendon Street
                           P.O. Box 9130
                           Boston, MA 02117-9130
                           Attention: Andrew S. Josef, Assistant General Counsel
                           Fax: (617) 946-1929

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2R
<SEQUENCE>16
<FILENAME>amendedcoe101504final.txt
<DESCRIPTION>EXHIBIT (2)(R) CODE OF ETHICS
<TEXT>
EXHIBIT 99.(2)(r)
CODE OF ETHICS OF THE FUND


[GRAPHIC OMITTED - Boulder Funds]

                                             BOULDER INVESTMENT ADVISERS, L.L.C.
                           1680 38TH STREET, SUITE 800 - BOULDER, COLORADO 80301
                                 TELEPHONE (303)444-5483 FACSIMILE (303)245-0420
                                                EMAIL: SCMILLER@BOULDERFUNDS.NET


                         BOULDER TOTAL RETURN FUND, INC.
                       BOULDER GROWTH & INCOME FUND, INC.
                           FIRST FINANCIAL FUND, INC.
                       BOULDER INVESTMENT ADVISERS, L.L.C.
                           STEWART INVESTMENT ADVISERS

                              AMENDED AND RESTATED

                                 CODE OF ETHICS

I.   Introduction

     A.   General Principles

          This Code of Ethics ("Code") establishes rules of conduct for "Covered
          Persons" (as defined  herein) of the Boulder  Total Return Fund,  Inc.
          ("BTF"),  Boulder Growth & Income Fund, Inc. (formerly known as USLIFE
          Income Fund,  Inc.),  ("BIF"),  First  Financial Fund, Inc. ("FF") and
          collectively,  the "Funds",  Boulder Investment  Advisers,  L.L.C. and
          Stewart  Investment  Advisers  (each an  "Adviser"  and  together  the
          "Advisers") and is reasonably designed to prevent Covered Persons from
          (i)  employing  any  device,  scheme or artifice to defraud the Funds;
          (ii)  making any untrue  statement  of  material  fact to the Funds or
          omitting  to  state a  material  fact  necessary  in order to make the
          statements  made to the  Funds,  in light of the  circumstances  under
          which  they are  made,  not  misleading;  (iii)  engaging  in any act,
          practice or course of  business  that  operates or would  operate as a
          fraud or deceit on the Funds;  and (iv)  engaging in any  manipulative
          practice  with  respect to the Funds.  The Code  governs the  personal
          securities activities of Covered Persons. In general,  Covered Persons
          should  (i) always  place the  interests  of the  Funds'  shareholders
          first;  (ii)  ensure that all  personal  securities  transactions  are
          conducted  consistent  with this Code and in such a manner as to avoid
          any actual or potential conflict of interest or any abuse of a Covered
          Person's  position  of trust  and  responsibility;  and (iii) not take
          inappropriate  advantage of their positions.  In addition, all Covered
          Persons  must comply with all Federal  Securities  Laws (as defined in
          Rule 204A-1 under the  Investment  Advisers Act of 1940) as they apply
          to investment companies and investment advisers, and any rules adopted
          thereunder,  and are  expected to adhere to the highest  standards  of
          professional and ethical conduct and should be sensitive to situations
          that may give rise to an actual conflict or the appearance of conflict
          with the Funds' interests.

          The Code shall be  administered by a senior level  supervisory  person
          designated  by the  Boards  of the  Funds  as  the  "Chief  Compliance
          Officer" (the "CCO") who shall have primary  responsibility  to, among
          other  things,  periodically  review and update the Code,  enforce its
          provisions,  and receive reports of and respond to violations. The CCO
          shall hold  orientation  sessions with new employees to inform them of
          their obligations under the Code.

<PAGE>

     B.   Applicability

          For purposes of this Code, "Covered Person" shall mean:

          1.   Any (A) officer or employee of the Funds or (B) officer, employee
               or  Director  of any  Adviser,  or  (C)  any  officer,  employee,
               director or partner of any company in a control  relationship  to
               the  Funds or any  Adviser  who,  in  connection  with his or her
               regular  functions or duties,  makes,  participates in or obtains
               information  regarding  the purchase or sale of securities by the
               Funds  or  whose   functions   relate   to  the   making  of  any
               recommendation  to the Funds  regarding  the  purchase or sale of
               securities,  or any natural person in a control  relationship  to
               the  Funds or any  Adviser  who  obtains  information  concerning
               recommendations  made to the Funds with regard to the purchase or
               sale of a  security,  including  the person or  persons  with the
               direct  responsibility and authority to make investment decisions
               affecting  the  Fund  (such  person  being  referred  to  as  the
               "Portfolio Manager");

          2.   Any Director of the Funds; and

          3.   Those persons identified in "Schedule A", attached hereto and, if
               a natural person,  their immediate family members or "significant
               others".

          This Code shall not apply to any  director,  officer,  or other person
          (including  a  Portfolio  Manager) if such  individual  is required to
          comply  with  another  organization's  code of  ethics  which has been
          approved by the Board of Directors of the Fund  pursuant to Rule 17j-1
          under the Investment  Company Act of 1940, as amended (the "1940 Act")
          if such approval is required by the 1940 Act.

          This Code does not cover any Principal  Underwriter  or its affiliated
          persons.

II.  Restrictions on Activities

     A.   Blackout Periods

          1.   No Covered Person shall purchase or sell, directly or indirectly,
               any  security  in  which  he or she  has,  or by  reason  of such
               transaction acquires, any direct or indirect beneficial ownership
               (as defined in  Attachment  A to this Code) on a day during which
               the  Funds  have a  pending  "buy" or  "sell"  order in that same
               security until that order is executed or withdrawn.

          2.   No Covered Person shall purchase or sell, directly or indirectly,
               any  security  in  which  he or she  has,  or by  reason  of such
               transaction acquires, any direct or indirect beneficial ownership
               (as defined in  Attachment  A to this Code)  within (i) seven (7)
               calendar  days  before and one (1)  calendar  day after the Funds
               trade in that security with respect to Matching  Transactions and
               (ii) seven (7) calendar  days before and seven (7) calendar  days
               after  with  respect  to  Non-Matching  Transactions.   The  term
               "Matching   Transaction"   shall  mean  a  buy-buy  or  sell-sell
               transaction  where  the Funds  purchase  and the  Covered  Person
               purchases  the same  security  or the Funds sell and the  Covered
               Person   sells  the  same   security.   The  term   "Non-Matching
               Transaction" shall mean a buy-sell or sell-buy  transaction where
               the  Funds  purchase  and  the  Covered  Person  sells  the  same
               security,  or the Funds sell and the Covered Person purchases the
               same security. With respect only to Non-Matching  Transactions in
               the Funds' shares ("Fund  Shares"),  where the Covered  Person is
               selling  Fund Shares and the Funds are buying Fund  Shares,  such
               blackout  period  shall be three  (3)  calendar  days  after  the
               Covered Person completes such sale(s). Provided however, that (i)
               the  Covered  Person  shall not  engage in any such  Non-Matching
               Transaction  if  the  Fund's  NAV  varies  by 5%  from  the  last
               published NAV until after such  information  is made public,  and
               (ii) after any such Non-Matching  Transaction in Fund Shares, the
               Covered  Person shall  thereafter be prohibited  from engaging in
               any further Non-Matching  Transaction in Fund Shares for a period
               of fourteen (14) calendar days.

<PAGE>

     B.   "Hot List".  The Advisers shall  establish and  periodically  update a
          "Hot List" of issuers of  securities  that the  Advisers  are actively
          analyzing and  considering as investment  candidates for the Funds. No
          Covered  Person  may trade in Hot List  securities  without  the prior
          written approval of the CCO.

     C.   "Restricted  List".  The Advisers  shall also  maintain a  "Restricted
          List" of issuers of securities,  if any, about which the Advisers have
          inside  information.  No Covered  Person may trade in such  Restricted
          List securities without the prior written approval of the CCO.

     D.   Prohibition Against Short-Swing Trading and Market Timing. All Covered
          Persons  are  prohibited  from  buying and selling the Funds' or other
          publicly-traded securities, and advising or tipping others who may buy
          or sell the  Funds'  or other  publicly-traded  securities,  when such
          persons are in possession of material, nonpublic information regarding
          the Funds or the  issuers of such other  publicly  traded  securities.
          This Code  incorporates  by  reference  the Policy on Insider  Trading
          dated July 7, 2004,  as amended  from time to time,  which  contains a
          more detailed discussion of insider trading and its application to the
          Funds, Advisers and Covered Persons.

          The Funds are closed-end  investment  companies traded on the NYSE and
          thus are not open to abuse of market timing and late trading practices
          (i.e.,  others cannot take advantage of the Funds by conducting market
          timing and late trading practices  vis-a-vis the Funds). The Funds and
          all  Covered  Persons  are  prohibited  from taking part in any market
          timing or late trading  practices  with  respect to open-end  funds in
          which they invest or intend to invest.

     E.   Interested  Transactions.   No  Covered  Person  shall  recommend  any
          securities  transactions by the Funds without having  disclosed his or
          her  interest,  if any,  in such  securities  or the  issuer  thereof,
          including without limitation:

          a.   any  direct or  indirect  beneficial  ownership  (as  defined  in
               Attachment A to this Code) of any securities of such issuer;

          b.   any contemplated transaction by such person in such securities;

<PAGE>

          c.   any position with such issuer or its affiliates; and

          d.   any present or proposed business relationship between such issuer
               or its  affiliates  and such  person or any  party in which  such
               person has a significant interest.

     F.   Initial Public Offerings. No Covered Person shall acquire, directly or
          indirectly,  beneficial  ownership  of any  securities  in an  initial
          public offering  without the prior approval of the CCO (as hereinafter
          defined).  Prior to granting any such approval, the CCO will carefully
          review  information  provided  by such  Covered  Person  on a  written
          Preclearance   Approval   Form   (see   Exhibit   B)  or  the   Funds'
          internet-based  Preclearance  Approval Form containing full details of
          the proposed transaction. The CCO shall take into consideration, among
          other factors,  whether the investment  opportunity should be reserved
          for the Funds, whether the opportunity is being offered to the Covered
          Person as a reward for prior  business,  or otherwise by virtue of his
          or her position with the Funds,  and whether it would be reasonable to
          expect that the Covered Person's future  investment  decisions for the
          Funds will  continue  to be based  solely on the best  interest of the
          Funds.  Purchases of initial public  offerings of volatile  securities
          which are difficult to obtain,  such as certain  common  stocks,  will
          ordinarily  not be  approved.  In  contrast,  purchases  of  generally
          available initial public offerings of less volatile securities such as
          municipal bonds or other securities in which the Funds, as a matter of
          investment  policy,  would not  customarily  invest,  would usually be
          approved.

     G.   Private  Placements.  No Covered  Person  shall  acquire,  directly or
          indirectly,  beneficial  ownership  of  any  securities  in a  private
          placement  or  other  offering  exempt  from  registration  under  the
          Securities Act of 1933 without the prior approval of the CCO. Prior to
          granting any such approval,  the CCO will carefully review information
          provided by such  Covered  Person on a written  Preclearance  Approval
          Form  (see  Exhibit  B)  or  the  Funds'  internet-based  Preclearance
          Approval Form containing full details of the proposed transaction. The
          CCO shall take into  consideration,  among other factors,  whether the
          investment  opportunity should be reserved for the Funds,  whether the
          opportunity  is being  offered to the  Covered  Person as a reward for
          prior business, or otherwise by virtue of his or her position with the
          Funds,  and whether it would be  reasonable to expect that the Covered
          Person's future investment decisions for the Funds will continue to be
          based solely on the best  interest of the Funds.  Covered  Persons who
          have acquired  securities in a private  placement  shall disclose that
          investment  (i)  when  they  play a  part  in  the  Funds'  subsequent
          consideration of an investment in the issuer,  or (ii) otherwise prior
          to any  investment  by the Funds  when such  Covered  Person  knows or
          should know of the Funds' planned  investment.  In such circumstances,
          the Funds'  decision  to  purchase  securities  of the issuer  will be
          subject to an independent  review by Covered  Persons with no personal
          interest in the issuer.

     H.   Gifts.  No Covered  Person  shall  receive any gift or other things of
          more  than de  minimis  value  (i.e.,  totaling  $250 in any  12-month
          period) from any person or entity that does business with or on behalf
          of the Funds, other than reasonable  business-related meals or tickets
          to sporting events, theater or similar activities.

     I.   Service as a Director.  No Covered  Person shall serve on the board of
          directors of any  publicly-traded  company without prior authorization
          from a  committee  comprised  of the CCO  and  any one  non-interested
          director (the "Compliance  Committee") based upon a determination that
          such board service would be consistent with the interests of the Funds
          and their respective shareholders.  If such service is authorized, the
          Covered  Person will be  isolated  from  making  investment  decisions
          relating to such service  through the  implementation  of  appropriate
          "Chinese Wall" procedures established by the Compliance Committee.

<PAGE>

III. Exempt Transactions

     A.   For purposes of this Code, the term  "security"  shall not include the
          following:

          1.   securities  issued or  guaranteed  as to principal or interest by
               the Government of the United States or its instrumentalities;

          2.   bankers' acceptances;

          3.   bank certificates of deposit;

          4.   commercial  paper  and  similar  high  quality   short-term  debt
               instruments, including repurchase agreements;

          5.   shares of money market funds;

          6.   unit investment  trusts if the unit investment  trust is invested
               exclusively in unaffiliated mutual funds; and

          7.   shares of  registered  open-end  investment  companies  unless an
               Adviser or a control affiliate acts as the investment  adviser or
               principal underwriter for such open-end investment company.

          "Security"  shall  include  options,  futures  contracts  as  well  as
          "related securities," such as convertible securities and warrants.

     B.   The  prohibitions  described in paragraph  (A) of Article II shall not
          apply to:

          1.   Purchases or sales effected in any account over which the Covered
               Person has no direct or indirect influence or control;

          2.   Purchases  or sales  that are  non-volitional  on the part of the
               Covered Person;

          3.   Purchases  that are part of an  automatic  dividend  reinvestment
               plan;

          4.   Purchases  effected  upon the  exercise  of  rights  issued by an
               issuer pro rata to all holders of a class of its  securities,  to
               the extent such rights were acquired  from the issuer,  and sales
               of such rights so acquired; or

          5.   Subject  to the  advance  approval  by a CCO (as  defined  below)
               purchases or sales which are only remotely potentially harmful to
               the Fund  because  such  purchases  or sales would be unlikely to
               affect a highly  institutional  market, or because such purchases
               or sales are clearly not related  economically  to the securities
               held, purchased or sold by the Fund.

IV.  Compliance Procedures

     A.   1. Preclearance - Generally. Subject to Paragraphs B (Reporting) and D
          (Certification of Compliance)  below, a Covered Person may directly or
          indirectly  acquire or dispose of  beneficial  ownership of a security
          (collectively referred to herein as a "Transaction"), including shares
          of the Funds,  only if (1) such  Transaction  has been approved by the
          CCO or  other  supervisory  person  employed  by an  Adviser,  (2) the
          approved  Transaction is completed within a thirty (30) day period (or
          in the case of a Transaction  in shares of the Funds,  a seven (7) day
          period)  after  such  approval  is  received  and  (3) the CCO has not
          rescinded such approval prior to execution of the Transaction.

<PAGE>

          2.  Rescission  of  Transaction.  Notwithstanding  a Covered  Person's
          receiving the foregoing prior approval of a Transaction,  such Covered
          Person may  nonetheless be required to rescind any  Transaction in any
          security in which the Funds have made a trade, if the Covered Person's
          Transaction is not effected within 48 hours of the  pre-clearance  and
          it occurs within seven (7) calendar days of the Funds'  transaction in
          the same  security  or a  related  security.  Such  rescission  may be
          required  whether  or not notice of the  Funds'  purchase  or sale was
          given to the Covered Person.

          3. Blanket Preclearances.  The CCO may from time to time issue blanket
          pre-clearances to any and all Covered Persons for specific  securities
          or limited  classes of securities if the stated policy of the Funds is
          to avoid such  specific  securities  or limited  classes of securities
          because they are inappropriate investments given the stated investment
          philosophy of the respective Fund (e.g., specific high-tech or dot-com
          stocks, common stock, including RICs and REITs, having a market-cap of
          less  than $100  million,  and/or  RICs and  REITs  after the Fund has
          completed its buying program in such securities).  Notwithstanding the
          grant of a blanket pre-clearance,  such pre-clearance may be rescinded
          at any time by the CCO and any Transactions with respect to a security
          that is the  subject  of a blanket  pre-clearance  may be  subject  to
          rescission  under  circumstances  contemplated  in paragraph (2) above
          (i.e.,  if a Transaction in the  pre-cleared  security occurs within 7
          days of a transaction  in the same  security or a related  security by
          the Funds).

          Transactions for which  pre-clearance has been given under Paragraph 1
          above  and  this   Paragraph  3  remain   subject  to  the   reporting
          requirements  of this Code.  Neither  the Funds,  nor the CCO or other
          designated  supervisory  persons shall be responsible  for any loss or
          expense or other adverse  consequences  arising from a rescission of a
          Transaction for which pre-clearance had been given; and any gains on a
          rescinded  Transaction  shall be donated to a charity  selected by the
          Adviser.

          4. "De Minimus" Transactions.  The pre-clearance  requirements of this
          Code  shall not apply to "de  minimus"  transactions,  defined  as any
          purchase  or sale of a  security  by a Covered  Person who is not also
          buying or selling  the same  security  or a related  security  for the
          Funds, and which:

               a.   Is issued by a company  with a market  capitalization  of at
                    least $1 billion and has an average daily trading  volume of
                    at least 100,000 shares; and

               b.   Involves no more than 100 shares or units, regardless of the
                    dollar amount of the transaction, or any number of shares or
                    units having a value of no more than $5,000.

          If, during any two consecutive  calendar quarters,  aggregate purchase
          or sale  transactions  by the Access  Person in shares or units of the
          same issuer exceed 300 shares or units or a cumulative  purchase value
          of $15,000, whichever is the last to occur, subsequent transactions in
          the  issuer's  securities  shall no longer be regarded as "de minimus"
          transactions.  Within three  business  days of the  transaction  which
          causes a limit of 300 shares or units or $15,000 to be  exceeded,  the
          Covered  Person  shall  notify  the  CCO  of  the  occurrence  of  the
          transaction. Transactions in the applicable issuer's securities during
          the next 12 months will be subject to the pre-clearance  provisions of
          this Code. De minimus transactions remain subject to all provisions of
          this Code  (e.g.,  periodic  reporting)  other than the  pre-clearance
          requirements.

<PAGE>

          5.  Relationship  Between Covered Persons,  First Financial Fund, Inc.
          and Wellington  Management  Company LLP. It is noted that the Advisers
          are not the advisers to First Financial Fund, Inc. ("FF").  Wellington
          Management Company LLP  ("Wellington")  currently serves as adviser to
          FF and has its own  applicable  code of ethics which has been approved
          by the FF Board of Directors, as required by Rule 17j-1 under the 1940
          Act.  Nonetheless,  each of the Funds described herein  (including FF)
          share  common  non-Wellington  officers,  who are  therefore  "Covered
          Persons" for purposes of this Code. Additionally,  Fund Administrative
          Services,  LLC ("FAS"),  an affiliate of the Advisers and the employer
          of the senior officers of FF, also serves as the Administrator to FF.

          Notwithstanding  these  relationships,  no  information is provided by
          Wellington on a current basis to the officers or directors of FF or to
          FAS with regard to the day-to-day consideration, analysis, purchase or
          sale of securities by FF, whether  contemplated or actual (recognizing
          that  portfolio  information is presented to the Board of Directors at
          its quarterly meetings, which information is generally stale, and fair
          value  pricing   information  for   presentation  to  the  FF  pricing
          committee),  nor do any of the Covered  Persons (1) receive or solicit
          any such  information  from  Wellington or (2) make or  participate in
          making recommendations regarding the purchase or sale of securities by
          or on behalf of FF.

          To avoid the  necessity of Covered  Persons  having to  pre-clear  all
          personal trades in securities in which FF is authorized to invest, the
          Fund has  adopted  the  following  additional  procedures  with regard
          solely to FF, which are  designed to prevent the Covered  Persons from
          engaging in any conduct prohibited by ICA Rule 17j-1(b):

               a.   No Covered  Person  shall trade any  security in which FF is
                    authorized  to invest if such  person has  actual  knowledge
                    that FF has a  pending  "buy"  or  "sell"  order in the same
                    security or a related  security or is considering a "buy" or
                    "sell" order in the same security or a related security.

               b.   No Covered Person shall receive or solicit from  Wellington,
                    directly  or  indirectly,   information   regarding  current
                    purchase    or   sale    orders   or   current    investment
                    recommendations regarding the purchase or sale of securities
                    for FF and shall  certify to the FF Board of  Directors on a
                    quarterly basis that, during the quarter,  (A) they have not
                    solicited  nor  have  they  received  any  information  from
                    Wellington  concerning  current purchase or sale orders,  or
                    current  recommendations  regarding  the purchase or sale of
                    securities  and (B) they  have not made or  participated  in
                    making  recommendations  regarding  the  purchase or sale of
                    securities by or on behalf of FF.

               c.   Except as necessary for pricing portfolio holdings and other
                    fund business,  Wellington shall not provide any information
                    as to current purchase or sale orders or current  investment
                    recommendations regarding the purchase or sale of securities
                    for FF,  and an  appropriate  officer  of  Wellington  shall
                    certify to the Board on a quarterly  basis that,  during the
                    quarter, except as set forth in the certificate,  it did not
                    disclose any  information  regarding  the proposed or actual
                    purchase or sale of any  securities  to any  Covered  Person
                    other  than  materials  containing  public  information  and
                    information in reports disseminated to the members of the FF
                    Board of Directors or other  Covered  Persons prior to Board
                    meetings.  If  Wellington  shall  provide a  Covered  Person
                    information about current purchase or sale orders or current
                    investment recommendations regarding the purchase or sale of
                    securities  for FF, such Covered Person shall be required to
                    pre-clear  transactions in the subject securities during the
                    3-month period following the receipt of the information.

<PAGE>

          THIS EXCEPTION FROM THE  PRE-CLEARANCE  REQUIREMENTS OF THE CODE SHALL
          NOT AFFECT ANY REPORTING REQUIREMENTS, WHICH REMAIN IN EFFECT.

          6. Application of the Preclearance Procedures.  In order to facilitate
          the foregoing preclearance procedures:

               a.   Prior to effecting  any  Transaction,  Covered  Persons must
                    complete  and  submit  to  the  CCO a  written  Preclearance
                    Approval  Form (see Exhibit B) or the Funds'  internet-based
                    Preclearance  Approval Form  containing  full details of the
                    proposed transaction.

               b.   After reviewing the proposed  Transaction,  and the level of
                    potential  investment interest on behalf of the Funds in the
                    security in question, and the Funds' Hot List and Restricted
                    List, the CCO shall approve or  disapprove,  as the case may
                    be, a trading order as  expeditiously  as possible.  The CCO
                    will generally approve  transactions  described below unless
                    the security in question or a related security is on the Hot
                    List or Restricted  List or the CCO believes,  in his or her
                    discretion,  for any other  reason that the  Covered  Person
                    should not trade in such security at such time:

                    i.   Non-convertible  fixed income securities rated at least
                         "A";

                    ii.  Equity   securities   of  a  class   having   a  market
                         capitalization   in  excess  of  $5   billion   if  the
                         transaction  in question  and the  aggregate  amount of
                         such  securities and any related  securities  purchased
                         and sold for the Covered Person in question  during the
                         preceding  60 days does not exceed  (x)  $10,000 or (y)
                         100  shares  or  (z) 1% of the  trading  volume  in the
                         shares over the previous 4 calendar weeks; and

                    iii. Municipal Securities.


               c.   In the  absence of the CCO, a Covered  Person may submit his
                    or her  Preclearance  Approval Form to a designee of the CCO
                    if the CCO in his sole  discretion  wishes to  appoint  one.
                    Preclearance  approval  for the CCO must be obtained  from a
                    Portfolio   Manager  or  assistant   portfolio   manager  or
                    assistant  compliance  officer as designated by the CCO from
                    time to time (the "Assistant Compliance Officer").

               d.   In rendering  approvals,  the CCO shall consider information
                    contained  in  previously  submitted  Preclearance  Approval
                    Forms  and any  initial,  quarterly  and  annual  disclosure
                    certifications  previously  submitted by the Covered Person,
                    in  order  to  generally   consider  that  person's  trading
                    activities  with a view to ensuring that all Covered Persons
                    are  complying  with  the  spirit  as well  as the  detailed
                    requirements of this Code.

<PAGE>

     B.   Reporting

          1.   Initial  Holdings  Reports.  No later than 10 calendar days after
               the person becomes a Covered  Person,  the following  information
               shall  be  submitted  by  each  Covered  Person  to the CCO in an
               Initial Holdings Report in the form set forth as Exhibit C (which
               information must be current as of a date no more than 45 calendar
               days prior to the individual becoming a Covered Person):

               a.   The  title,  number of shares and  principal  amount of each
                    Covered  Security in which the Covered Person had any direct
                    or indirect  beneficial  ownership  when the person became a
                    Covered Person;

               b.   The name of any broker, dealer or bank with whom the Covered
                    Person  maintained an account in which any  securities  were
                    held for the  direct  or  indirect  benefit  of the  Covered
                    Person as of the date the  person  became a Covered  Person;
                    and

               c.   The date that the report is submitted by the Covered Person

          2.   Quarterly  Transaction Reports.  Every Covered Person must make a
               quarterly transaction report covering each non-exempt transaction
               by which the  Covered  Person  acquires  any  direct or  indirect
               beneficial  ownership (as defined in Exhibit A to this Code) of a
               Covered Security.

               A Covered  Person must submit the  quarterly  transaction  report
               (see Exhibit D) to the CCO no later than 30 days after the end of
               the calendar quarter in which the transaction to which the report
               relates was  effected.  Each report  must  contain the  following
               information:

               a.   The date of the transaction,  the title, the exchange ticker
                    symbol or CUSIP number,  the interest rate and maturity date
                    (if applicable) and the number of shares,  and the principal
                    amount of each Covered Security involved:

               b.   The nature of the transaction (i.e., purchase, sale or other
                    acquisition or disposition);

               c.   The price at which the transaction was effected;

               d.   The name of the broker, dealer or bank with or through which
                    the transaction was effected; and

               e.   The date that the report is submitted.

               With  respect  to any  account  established  by a Covered  Person
               during  the  quarter  for the direct or  indirect  benefit of the
               Covered Person, the Covered Person shall report:

<PAGE>

               1.   The name of the broker, dealer or bank with whom the Covered
                    Person established the account;

               2.   The date the account was established; and

               3.   The date that the report is submitted by the Covered Person.

               Any  broker  or  futures  commission  merchant  through  which  a
               transaction  is effected  shall be directed by the Covered Person
               to supply to the CCO, on a timely basis, duplicate  confirmations
               and monthly brokerage statements for all securities accounts.

          3.   Annual  Holdings  Reports.  Annually,  the following  information
               (which  information  must be current as of a date no more than 45
               calendar days before the report is submitted):

               a.   The title, type of security, exchange ticker symbol or CUSIP
                    number,  number  of  shares  and  principal  amount  of each
                    Covered  Security in which the Covered Person had any direct
                    or indirect beneficial ownership;

               b.   The name of any broker, dealer or bank with whom the Covered
                    Person maintains an account in which any securities are held
                    for the direct or indirect  benefit of the  Covered  Person;
                    and

               d.   The date that the report is submitted by the Covered Person.

          4.   Exceptions from Reporting  Requirements.  A Covered Person is not
               required to submit:

               a.   Any report with respect to  purchases  or sales  effected in
                    any  account  over  which the  Covered  Person has no direct
                    influence or control;

               b.   A quarterly  transaction  report with  respect to  purchases
                    that are part of an automatic dividend reinvestment plan;

               c.   A quarterly transaction report if the report would duplicate
                    information  contained  in  broker  trade  confirmations  or
                    account  statements  that the CCO  receives no later than 30
                    days after the end of the applicable quarter.


          5.   Disclaiming Beneficial Ownership.  Any report submitted to comply
               with  the  requirements  of this  Section  IV.B.  may  contain  a
               statement  that the report shall not be construed as an admission
               by the person  making such report that such person has any direct
               or indirect beneficial ownership (as defined in Exhibit A) in the
               securities to which the report relates.

          6.   Review of  Reports.  All  reports  submitted  to comply  with the
               requirements of this Section IV.B shall be reviewed by the CCO or
               the Assistant Compliance Officer and any violations thereof shall
               be reported to the Board of Directors on a quarterly basis.

<PAGE>

     C.   Non-Interested  Directors and Covered  Persons Not Affiliated with any
          of the Funds' Investment Advisers

          1.   Any  person  who is a  Covered  Person  by  virtue of being (i) a
               Director of the Funds, but who is not an "interested  person" (as
               defined in the 1940 Act) of the Funds (an "Independent Director")
               shall be required to comply with  Sections  IV.A.  (Preclearance)
               and Section  IV.B.2.  (Quarterly  Transaction  Reports) above, or
               (ii) an officer of the Funds,  but is not a Covered Person and is
               not an affiliate of any Adviser, shall be required to comply with
               Section IV.A. (Preclearance) above, with respect to a transaction
               only if such person, at the time of that transaction, knew, or in
               the ordinary  course of  fulfilling  his or her  official  duties
               should have  known,  that  during the 15-day  period  immediately
               preceding  the  date  of the  transaction  by  such  person,  the
               security  such person  purchased  or sold is or was  purchased or
               sold by the Funds or was being considered for purchase or sale by
               the Funds. In addition, Independent Directors are not required to
               submit the Initial  Holdings  Reports and Annual Holdings Reports
               required by Sections IV.B.1 and 3 above.

          2.   Notwithstanding  Section IV.C.1 above,  any Independent  Director
               shall be  required to comply with  Section  IV.A.  (Preclearance)
               above,  with  respect  to all  purchases  or sales of the  Funds'
               shares at all times.

     D.   Certification  of  Compliance.  Each Adviser must furnish each Covered
          Person with a copy of this Code of Ethics and any  amendments  thereto
          and each Covered Person shall acknowledge,  in writing,  such receipt.
          Further,  each Covered Person is required to certify  annually that he
          or she (i) has read and understood the Code, (ii) recognizes that they
          are subject to such Code, (iii) has complied with all the requirements
          of the Code and (iv) has disclosed or reported all personal securities
          transactions  required to be  disclosed  or  reported  pursuant to the
          requirements of the Code.

     E.   Review by the Board of Directors.  No less  frequently  than annually,
          the  Fund  and  each  Adviser  must  furnish  to the  Funds'  Board of
          Directors,  and the Board of Directors must consider, a written report
          that:

          1.   Describes any issues  arising under the Code or procedures  since
               the last report to the Funds' Board of Directors,  including, but
               not limited to, information about material violations of the Code
               or procedures  and sanctions  imposed in response to the material
               violations; and

          2.   Certifies that the Funds and each Adviser have adopted procedures
               reasonably  necessary to detect and prevent  Covered Persons from
               violating the Code.

          The  Board  of  Directors  of  the  Funds,  including  a  majority  of
          Independent  Directors,  must approve any material changes to the Code
          no later than six months after  adoption of the material  change.  The
          Board must base its approval of any material  changes to the Code on a
          determination that the Code contains provisions  reasonably  necessary
          to prevent  Covered  Persons from  engaging in any conduct  prohibited
          under Rule 17j-1 under the 1940 Act and the Code.

<PAGE>

          Before  approving any amendment to the Code,  the Board must receive a
          certification  from each  Fund and each  Adviser  that it has  adopted
          procedures  reasonably necessary to detect and prevent Covered Persons
          from violating the Code.


V.   Violations. All Covered Persons shall promptly report any violations of the
     Code by any other person to the CCO, or if such Covered Person  believes it
     will be futile to report to the CCO, to the Legal  Compliance  Committee of
     the Funds.

VI.  Sanctions.   Upon   detecting  that  a  Covered  Person  has  violated  any
     requirement:

     a.   If such violation is not a repeated  violation,  is not material or is
          not a material  violation of Federal  Securities  Laws,  the CCO shall
          apply and enforce such sanctions as, in the discretion of the CCO, the
          CCO  deems   appropriate  in  light  of  the  violation  and  previous
          violations,  and report such to the Board of the relevant  Fund at its
          next regularly  scheduled quarterly meeting;

     b.   If  such  violation  is a  repeated  violation,  is  material  or is a
          material  violation of Federal Securities Laws, the CCO shall promptly
          submit its findings to the relevant  Board of Directors,  or the Legal
          Compliance  Committee.  The Board or Legal  Compliance  Committee  may
          impose on that Covered Person whatever sanctions it deems appropriate,
          including,  among other  things,  disgorgement  of  profits,  censure,
          suspension or termination of employment.

VII. Confidentiality. All information obtained from any Covered Person hereunder
     shall be kept in strict  confidence,  except  that  reports  of  securities
     transactions hereunder may be made available to the Securities and Exchange
     Commission or any other regulatory or self-regulatory organization, and may
     otherwise be disclosed to the extent required by law or regulation.

VIII. Other Laws, Rules and Statements of Policy. Nothing contained in this Code
     shall be  interpreted  as  relieving  any  Covered  Person  from  acting in
     accordance with the provision of any applicable law, rule, or regulation or
     any other  statement of policy or procedures  governing the conduct of such
     person adopted by the Funds.

IX.  Further  Information.  If any person has any  questions  with regard to the
     applicability  of the  provisions of this Code  generally or with regard to
     any securities  transaction or transactions  such person should consult the
     CCO.

X.   Records. The Funds and each Adviser must maintain the following records:

     a.   A copy of each Code of Ethics for the organization  that is in effect,
          or any  time  within  the  past  five  years  was in  effect,  must be
          maintained in an easily accessible place.

     b.   A record of any  violation  of the Code,  and of any action taken as a
          result of the  violation,  must be maintained in an easily  accessible
          place for at least  five years  after the end of the  fiscal  years in
          which  the  violation  occurs,  the  first  two  years  in  an  easily
          accessible place.

     c.   A record of all written acknowledgments verifying receipt of a copy of
          the Code and any amendments as required by the Investment Advisers Act
          of 1940 for each  person  who is  currently,  or within  the past five
          years was, a Covered Person of an Adviser.

<PAGE>

     d.   A copy of each  report  made by a Covered  Person as  required  by the
          Code,  including  any  information  provided in lieu of the  quarterly
          reports,  must be maintained  for at least five years after the end of
          the  fiscal  year in which the  report is made or the  information  is
          provided, the first two years in an easily accessible place.

     e.   A record of all persons,  currently or within the past five years, who
          are or were  required  to make  reports  under the  Code,  or who were
          responsible  for  reviewing  these  reports,  must be maintained in an
          easily accessible place.

     f.   A copy of  each  annual  report  to the  Board  of  Directors  must be
          maintained for at least five years after the end of the fiscal year in
          which it is made, the first two years in an easily accessible place.

     g.   The Funds or an Advisor, as applicable,  must maintain a record of any
          decision,  and the reasons  supporting  the  decision,  to approve the
          acquisition by a Covered Person of IPOs or private placements,  for at
          least  five  years  after  the end of the  fiscal  year in  which  the
          approval is granted.

Originally dated: January 20, 1995
Approved as amended: January 23, 1998
Approved as amended: January 15, 1999
Approved as amended: June 23, 2000
Approved as amended: January 23, 2002
Approved as amended: October 14, 2002
Approved as amended: August 19, 2003
Approved as amended: January 23, 2004
Approved as amended: May 18, 2004
Approved as amended: October 15, 2004


<PAGE>


                                    Exhibit A

     The term "beneficial ownership" as used in the attached Code of Ethics (the
"Code")  is to be  interpreted  by  reference  to  Rule  16a-1(a)(2)  under  the
Securities  Exchange Act of 1934 (the "Rule"),  except that the determination of
direct or indirect  beneficial  ownership  for purposes of the Code must be made
with respect to all securities that a Covered Person has or acquires.  Under the
Rule, a person is generally deemed to have beneficial ownership of securities if
the  person,  directly  or  indirectly,   through  any  contract,   arrangement,
understanding,  relationship  or  otherwise,  has or shares a direct or indirect
pecuniary interest in the securities.

     The term "pecuniary interest" in particular securities is generally defined
in the Rule to mean the opportunity,  directly or indirectly, to profit or share
in any  profit  derived  from a  transaction  in the  securities.  A  person  is
refutably deemed to have an "indirect  pecuniary interest" within the meaning of
the Rule in any  securities  held by members of the  person's  immediate  family
sharing the same  household,  the term "immediate  family"  including any child,
stepchild,   grandchild,  parent,  stepparent,   grandparent,  spouse,  sibling,
mother-in-law,   father-in-law,  son-in-law,  daughter-in-law,   brother-in-law,
sister-in-law,  as well as adoptive  relationships.  Under the Rule, an indirect
pecuniary  interest  also  includes,  among other  things:  a general  partner's
proportionate  interest in the portfolio securities held by a general or limited
partnership;  a performance-related fee, other than an asset-based fee, received
by any broker, dealer, bank, insurance company,  investment company,  investment
adviser,  investment  manager,  trustee or person or entity performing a similar
function;  a person's right to dividends that is separated or separable from the
underlying securities; a person's interest in securities held by certain trusts;
and a person's  right to acquire  equity  securities  through  the  exercise  or
conversion of any derivative security, whether or not presently exercisable, the
term  "derivative  security"  being  generally  defined as any option,  warrant,
convertible  security,  stock  appreciation  right,  or  similar  right  with an
exercise or conversion  privilege at a price related to an equity  security,  or
similar securities with, or value derived from, the value of an equity security.
For  purposes of the Rule, a person who is a  shareholder  of a  corporation  or
similar  entity  is  not  deemed  to  have a  pecuniary  interest  in  portfolio
securities held by the corporation or entity,  so long as the shareholder is not
a controlling  shareholder of the corporation or the entity and does not have or
share investment control over the corporation's or the entity portfolio.


<PAGE>


                                                                       Exhibit B

Boulder Funds Preclearance Request Submission

1. Requestor's Name     [OBJECT OMITTED - Drop Down List]
        Name: [OBJECT OMITTED - Field]     Email: [OBJECT OMITTED - Field]

1a. Other Name/Email (Optional) above.
               To be used  only if the  Requestor's  Name is not on the  list in
               Item 1
               Must contain both name AND valid email address.
                                     Example: John Doe jdoe@someemail.com

2. Security [OBJECT OMITTED - Field]
3. Ticker Symbol [OBJECT OMITTED - Field]
4. Exchange [OBJECT OMITTED - Drop Down List]
5. Buying or Selling [OBJECT OMITTED - Drop Down List]
6. Number of Shares [OBJECT OMITTED - Field]
7. Approx. Share Price [OBJECT OMITTED - Field]
8. P/E Ratio [OBJECT OMITTED - Field]
9. Broker Name And Account No.: [OBJECT OMITTED - Field]

[GRAPHIC OMITTED - Line]

CHECK ALL OF THE FOLLOWING  QUESTIONS THAT APPLY: IF YOU DO NOT CHECK ALL BOXES,
PROVIDE AN EXPLANATION IN THE MESSAGE BOX BELOW

10.  [OBJECT  OMITTED - Check  Box]I have NOT  engaged in trades for the Fund in
this Security during the past seven (7) days

11.  [OBJECT  OMITTED - Check Box]I have NOT engaged in any  offsetting  trades
during the last seven (7) days

12. [OBJECT OMITTED - Check Box]This is NOT an Initial Public Offering (IPO)

13.  [OBJECT  OMITTED  - Check  Box]This  is NOT a  security  in which the Fund
presently invests

14. [OBJECT OMITTED - Check Box]This is NOT a Private Placement Offering

15.  [OBJECT  OMITTED  - Check  Box]I  have NOT  received  nor am I aware of any
research recommendations or confirmations regarding this Security Reason for not
checking one of the options above: [OBJECT OMITTED - Field]

[GRAPHIC OMITTED - Line]

16. [OBJECT OMITTED - Check Box]It is a Common Stock  (non-RIC/REIT) Under $500M
Cap

17.  [OBJECT   OMITTED  -  Check   Box]Fund  is  Approaching   its  40  Act  25%
Diversification Limit in this Security

18. [OBJECT OMITTED - Check Box]It is a RIC or REIT Under $100M Cap

19.  [OBJECT  OMITTED - Check  Box]Fund is  Approaching  its 40 Act 25% Industry
Concentration Limit(REIT or Otherwise) in this Security

20.  [OBJECT   OMITTED  -  Check   Box]Fund  is   Approaching   its  40  Act  5%
Diversification Limit in this Security

21. [OBJECT OMITTED - Check Box]Fund is Approaching its 10% Limit in RICs

22. [OBJECT  OMITTED - Check  Box]Fund is Approaching  its 5 days Trading Volume
Limit for Moody's Coverage

- --------------------------------------------------------------------------------

BY VIRTUE OF SENDING  THIS  PRECLEARANCE  REQUEST,  EMPLOYEE  CONFIRMS  THAT (a)
HE/SHE IS NOT AWARE OF ANY NON-PUBLIC  INFORMATION REGARDING THE SECURITY AND/OR
ITS ISSUER (b) THERE IS NO PRESENT OR PROPOSED PERSONAL OR BUSINESS RELATIONSHIP
BETWEEN  THE ISSUER OR ITS  AFFILIATES  AND THE  EMPLOYEE OR  EMPLOYEE'S  FAMILY
MEMBERS  (EXCEPT  AS  PREVIOUSLY  DISCLOSED  OR AS  DISCLOSED  BELOW) AND (c) TO
EMPLOYEE'S  KNOWLEDGE,  THIS  TRANSACTION  COMPLIES WITH THE EMPLOYER'S  CODE OF
ETHICS AND THAT OF BOULDER  TOTAL RETURN FUND AND BOULDER  GROWTH & INCOME FUND,
Inc. IF GRANTED,  THE  PRECLEARANCE  SHALL BE VALID FOR THIRTY (30) DAYS. IF YOU
REQUIRE  MORE TIME,  CONTACT  THE  COMPLIANCE  OFFICER.  NOT  WITHSTANDING  THIS
PRECLEARANCE,  ALL PRECLEARANCE TRANSACTIONS ARE SUBJECT TO RECSISSION UNDER THE
FUND'S CODE OF ETHICS
- --------------------------------------------------------------------------------

COMMENTS OR EXPLANATION REGARDING THIS TRADE:
[OBJECT OMITTED - Field]

[OBJECT OMITTED - Trigger Button]


<PAGE>


                                                                       Exhibit C

                         BOULDER TOTAL RETURN FUND, INC.
                       BOULDER GROWTH & INCOME FUND, INC.
                           FIRST FINANCIAL FUND, INC.

                             INITIAL HOLDINGS REPORT


Report Submitted by: ___________________________________________________________
                                Print Your Name

     The following table supplies the  information  required by Section IV(B) of
the Code of Ethics dated August 19,  2003,  as amended for the period  specified
below.

<TABLE>
<S>                     <C>             <C>             <C>                             <C>
Securities              Quantity of     Price Per       Name of the Broker/Dealer       Nature of
(Name and Symbol)       Securities      Share or Other  with or through whom the        Ownership of
                                        Unit            Securities are Held             Securities







</TABLE>

To the extent  specified  above, I hereby disclaim  beneficial  ownership of any
security  listed  in this  Report  or in  brokerage  statements  or  transaction
confirmations provided by you.

I CERTIFY THAT I AM FULLY  FAMILIAR WITH THE CODE OF ETHICS AND THAT TO THE BEST
OF MY KNOWLEDGE THE INFORMATION FURNISHED IN THIS REPORT IS TRUE AND CORRECT FOR
THE PERIOD OF __________, _____ THROUGH ____________, _____.


Signature: _________________________

Position: _________________________

Date: _________________________

<PAGE>


                                                                       Exhibit D



                         BOULDER TOTAL RETURN FUND, INC.
                       BOULDER GROWTH & INCOME FUND, INC.
                           FIRST FINANCIAL FUND, INC.

                               TRANSACTION REPORT


Report Submitted by: _____________________________________________________

     The following table supplies the information required by Rule 17j-1 and the
Code of Ethics dated  January 15,  1999,  as amended,  for the period  specified
below. (Transactions reported on brokerage statements or duplicate confirmations
actually  received  by the  Chief  Compliance  Officer  do not have to be listed
although  it is your  responsibility  to  make  sure  that  such  statements  or
confirmations are complete and have been received in a timely fashion.)

<TABLE>
<S>             <C>             <C>                     <C>             <C>             <C>             <C>
Securities      Date of         Whether Purchase,       Quantity of     Price Per Share Name of the     Nature of
(Name and       Transaction     Sale, Short Sale,       Securities      or              Broker/Dealer   Ownership of
Symbol)                         or Other Type of                        Other Unit      with or through Securities
                                Disposition or                                          whom the
                                Acquisition                                             Transaction
                                                                                        Was Effected







</TABLE>


     I CERTIFY THAT I AM FULLY  FAMILIAR WITH THE CODE OF ETHICS AND THAT TO THE
BEST OF MY  KNOWLEDGE  THE  INFORMATION  FURNISHED  IN THIS  REPORT  IS TRUE AND
CORRECT FOR THE PERIOD OF _________, ____ THROUGH ___________, _____.

     I FURTHER  CERTIFY  THAT (A) I HAVE NOT  SOLICITED  NOR HAVE I RECEIVED ANY
INFORMATION FROM WELLINGTON  MANAGEMENT  COMPANY  CONCERNING CURRENT PURCHASE OR
SALE  ORDERS,  OR CURRENT  RECOMMENDATIONS  REGARDING  THE  PURCHASE  OR SALE OF
SECURITIES,  AND (B) I HAVE NOT MADE OR PARTICIPATED  IN MAKING  RECOMMENDATIONS
REGARDING THE PURCHASE OR SALE OF SECURITIES BY OR ON BEHALF OF FIRST  FINANCIAL
FUND, INC.


Signature: _________________________

Position: _________________________

Date: _________________________

<PAGE>


                                                                       Exhibit E

                         BOULDER TOTAL RETURN FUND, INC.
                       BOULDER GROWTH & INCOME FUND, INC.
                           FIRST FINANCIAL FUND, INC.

                             ANNUAL HOLDINGS REPORT

Report  Submitted  by:__________________________________________________________
                                Print Your Name

     The following table supplies the  information  required by Section IV(B) of
the Code of Ethics dated August 19, 2003 for the period specified below.

<TABLE>
<S>             <C>         <C>         <C>                             <C>
Securities      Quantity of Price Per   Name of the Broker/Dealer       Nature of
(Name and       Securities  Share or    with or through whom the        Ownership of
(Symbol)                    Other Unit  Transaction was Effected        Securities






</TABLE>


     To the extent  specified above, I hereby disclaim  beneficial  ownership of
any security  listed in this Report or in brokerage  statements  or  transaction
confirmations provided by you.

- --------------------------------------------------------------------------------

     I CERTIFY THAT I AM FULLY  FAMILIAR WITH THE CODE OF ETHICS AND THAT TO THE
BEST OF MY  KNOWLEDGE  THE  INFORMATION  FURNISHED  IN THIS  REPORT  IS TRUE AND
CORRECT FOR THE PERIOD OF __________, ____ THROUGH ____________, _____.


Signature: _________________________

Position: _________________________

Date: _________________________

<PAGE>


                                                                       Exhibit F


                         BOULDER TOTAL RETURN FUND, INC.
                       BOULDER GROWTH & INCOME FUND, INC.
                           FIRST FINANCIAL FUND, INC.
                     ANNUAL CERTIFICATION OF CODE OF ETHICS
                       AND POLICIES AND PROCEDURES MANUAL


     I (a Covered  Person)  hereby  certify that I have read and  understand the
Code of Ethics of Boulder Total Return Fund, Inc., Boulder Growth & Income Fund,
Inc., and First Financial Fund,  Inc.  (collectively,  the "Funds") dated August
19, 2003, as amended,  and  recognize  that I am subject to its  provisions.  In
addition, I hereby certify:

          (1) that I have complied with the requirements of the Code of Ethics;

          (2)  that  I  have  disclosed  or  reported  all  personal  Securities
     transactions required to be disclosed or reported under the Code of Ethics;
     and

          (3)  that I have  reviewed  and am  familiar  with  the  Policies  and
     Procedures Manual of the Funds and the Advisers.


Signature: _________________________


Position: _________________________


Date: _________________________


<PAGE>


                                                                       Exhibit G


[GRAPHIC OMITTED - Boulder Funds]

                                             BOULDER INVESTMENT ADVISERS, L.L.C.
                           1680 38TH STREET, SUITE 800 - BOULDER, COLORADO 80301
                                 TELEPHONE (303)444-5483 FACSIMILE (303)245-0420
                                                EMAIL: SCMILLER@BOULDERFUNDS.NET


               REVISED SCHEDULE OF COVERED AND SUPERVISORY PERSONS
                              AS OF OCTOBER 1, 2004


SUPERVISORY PERSONS
     Stephen Miller, Designated Supervisory Person and Chief Compliance Officer
     Carl Johns, Secondary Supervisory Person
     Stephanie Kelley, Assistant Compliance Officer


COVERED PERSONS (BOULDER TOTAL RETURN FUND, INC.,  BOULDER GROWTH & INCOME FUND,
INC. and FIRST FINANCIAL FUND, INC.)

Alfred G. Aldridge, Jr.                 Carl Johns
Richard I. Barr                         Stephanie Kelley
Cynthia Surprise                        Joel W. Looney
Jeff Gaboury                            Stephen C. Miller
Susan L. Ciciora                        Nicole Murphey
John S. Horejsi                         Dean Jacobson
Dennis Causier

The Horejsi Affiliates:
Ernest Horejsi Trust No. 1B             Lola Brown Trust No. 1B
BWS, LLC                                Horejsi Charitable Foundation, Inc.
Susan L. Ciciora Trust                  John S. Horejsi Trust
Badlands Trust Company                  Stewart R. Horejsi Trust No. 2
Mildred Horejsi Trust                   Evergreen Atlantic, LLC
Evergreen Trust                         Stewart West Indies Trust

COVERED PERSONS (BOULDER INVESTMENT ADVISERS, LLC)
Stewart R. Horejsi                      Debra Brannan
Laura Rhodenbaugh                       Ellen Cooper
Dennis Oakes                            Sean Lewerke
Polly Cowley

COVERED PERSONS (STEWART INVESTMENT ADVISERS)
Glade Christensen

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2S
<SEQUENCE>17
<FILENAME>powerofattorney.txt
<DESCRIPTION>EXHIBIT (2)(S) POWER OF ATTORNEY
<TEXT>
EXHIBIT 99.(2)(s)
POWER OF ATTORNEY


KNOW ALL PEOPLE BY THESE  PRESENTS,  that each person  whose  signature  appears
below constitutes and appoints Stephen C. Miller and Carl D. Johns, and each and
any of them, his true and lawful  attorneys-in-fact  and agents, with full power
of substitution  and  resubstitution,  for him and his name, place and stead, in
any and all capacities,  to sign any or all amendments (including post-effective
amendments) to the Registration  Statement for the Boulder Growth & Income Fund,
Inc. on Form N-2, and to sign any registration statement that is to be effective
upon filing pursuant to Rule 462  promulgated  under the Securities Act of 1933,
as amended, and to file the same, with all exhibits thereto, and other documents
in connection therewith,  with the Securities and Exchange Commission,  granting
unto  said  attorneys-in-fact  and  agents,  and each of them,  full  power  and
authority to do and perform each and every act and thing requisite and necessary
to be done; hereby ratifying and confirming all that said  attorneys-in-fact and
agents,  or any of them, or their substitute or substitutes,  may lawfully do or
cause to be done by virtue thereof.

Pursuant to the  requirements of the Securities Act of 1933,  this  Registration
Statement has been signed by the following  persons in the capacities and on the
dates indicated.

<TABLE>
<S>                                      <C>                                                 <C>

Signature                                Title                                               Date
/s/ Stephen C. Miller                    President and  Chief Executive Officer              July 8, 2005
/s/ John S. Horejsi*                     Director                                            July 8, 2005
/s/ Joel W. Looney*                      Director                                            July 8, 2005
/s/ Alfred G. Aldridge, Jr.*             Director                                            July 8, 2005
/s/ Richard I. Barr*                     Director                                            July 8, 2005
/s/ Dennis R. Causier*                   Director                                            July 8, 2005
/s/ Carl D. Johns                        Chief   Financial   Officer,    Chief   Accounting  July 8, 2005
                                         Officer, Vice President and Treasurer
</TABLE>

- ------------------
*By:  Stephen C. Miller

Attorney-in-Fact pursuant to Powers of Attorney

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
