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Draft of May 12, 1997
5,000,000
THE XXXXXXXX GLOBAL EQUITY FUND
SHARES OF BENEFICIAL INTEREST
UNDERWRITING AGREEMENT
WHEAT, FIRST SECURITIES, INC.
Riverfront Plaza
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000 ___________, 1997
Ladies and Gentlemen:
The Xxxxxxxx Global Equity Fund, a Delaware business trust (the "Fund"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to Wheat, First Securities, Inc. (the "Underwriter") an aggregate of 5,000,000
shares of beneficial interest, par value $0.01, of the Fund (the "Shares"), and
at the election of the Underwriter, an aggregate of 750,000 additional Shares.
The aggregate of 5,000,000 Shares to be sold by the Fund are herein called the
"Firm Securities," and the aggregate of 750,000 additional Shares to be sold by
the Fund are herein called the "Optional Securities." The Firm Securities and
the Optional Securities that the Underwriter elects to purchase pursuant to
Section 3 hereof are collectively called the "Securities."
1. REPRESENTATIONS AND WARRANTIES RELATING TO THE FUND. Each of the Fund,
Xxxxxxxx Asset Management, Inc. ("Xxxxxxxx") and Guinness Flight Investment
Management Limited ("Guinness Flight") (Xxxxxxxx and Guinness Flight
collectively, the "Investment Advisers") represents and warrants to, and agrees
with, the Underwriter that:
(a) A notification on Form N-8A (the "Notification") of
registration of the Fund as an investment company and a registration
statement in respect of the Securities on Form N-2 (File No. 333-7543),
and a preliminary prospectus as a part thereof, under the Securities Act
of 1933, as amended, and the rules and regulations thereunder
(collectively, the "1933 Act"), and the Investment Company Act of 1940,
as amended, and the rules and regulations thereunder (collectively, the
"1940 Act"), in respect of the Securities have been filed with the
Securities and Exchange Commission (the "Commission") in the form
heretofore delivered to you; such registration statement, as amended,
has been declared
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effective by the Commission; no other document with respect to such
registration statement has heretofore been filed with the Commission;
and no stop order suspending the effectiveness of such registration
statement has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission (any preliminary prospectus
included in such registration statement or filed with the Commission
pursuant to Rule 424 or Rule 497 under the 1933 Act, being hereinafter
called a "Preliminary Prospectus," the various parts of such
registration statement, including all exhibits thereto, and including
the information contained in the form of final prospectus filed with the
Commission pursuant to Rule 424(b) or Rule 497(b) under the 1933 Act in
accordance with Section 5(a) of this Agreement and deemed by virtue of
Rule 430A under the 1933 Act to be part of the registration statement at
the time it was declared effective, together with any related
registration statement filed with the Commission for registration of a
portion of the Securities, which registration statement became effective
pursuant to Rule 462(b) under the 1933 Act, being herein called
collectively the "Registration Statement," and the final prospectus, in
the form first filed pursuant to Rule 424(b) or Rule 497(b), being
hereinafter called the "Prospectus," provided, that if the Fund elects
to rely on Rule 434 under the 1933 Act, all references to the Prospectus
shall be deemed to include, without limitation, the form of prospectus
and the abbreviated term sheet, taken together, provided to the
Underwriter by the Fund in reliance on Rule 434);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the 1933 Act and the 1940 Act, and did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Fund by the Underwriter expressly for use therein;
(c) The Registration Statement and the Notification conform, and
the Prospectus and any amendments or supplements thereto will conform,
in all material respects to the requirements of the 1933 Act and the
1940 Act, as applicable, and do not and will not as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Fund by the Underwriter
expressly for use therein;
(d) Since the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been any
change in the capital stock or debt of the Fund or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the condition, financial or otherwise, of
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the Fund or the Investment Advisers, or in the investment objectives,
investment policies, liabilities, business, prospects or operations of
the Fund otherwise than as set forth in the Prospectus, and there have
been no transactions entered into by the Fund that are material to the
Fund other than those in the ordinary course of its business or as
described in the Prospectus;
(e) The Fund has been duly formed and is validly existing as a
business trust in good standing under the laws of Delaware with power
and authority to own or lease its properties and conduct its business as
described in the Prospectus, and has been duly qualified to do business
as a foreign entity in good standing in all other jurisdictions in which
it owns or leases property, or conducts any business, so as to require
such qualification, except where the failure to so qualify would not
result in a material adverse effect on the Fund;
(f) The Fund is duly registered with the Commission as a
non-diversified, closed-end management investment company under the 1940
Act and no order of suspension or revocation of such registration has
been issued or proceedings therefor initiated or threatened by the
Commission. No person is serving or acting as an officer, director or
trustee of, or investment adviser to, the Fund except in accordance with
the provisions of the 1940 Act and the Investment Advisers Act of 1940,
as amended, and the rules and regulations of the Commission thereunder
(the "Advisers Act");
(g) The Fund has an authorized capitalization as set forth in the
Prospectus under the caption "Shares of Beneficial Interest in the Fund"
and otherwise; all of the issued shares of beneficial interest of the
Fund have been duly and validly authorized and issued, are fully paid
and nonassessable and conform to the description of the shares of
beneficial interest of the Fund contained in the Prospectus; there are
no preemptive or other similar rights to subscribe for or to purchase
any securities of the Fund; there are no warrants, options or other
rights to purchase any securities of the Fund; neither the filing of the
Registration Statement nor the offering or sale of the Securities as
contemplated by this Agreement gives rise to any rights for or relating
to the registration of any securities of the Fund with respect to such
filing, offering or sale, other than rights which have been waived or
satisfied;
(h) The Securities have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued and fully paid and nonassessable, and
will conform to the description of the Securities contained in the
Prospectus as amended or supplemented;
(i) The issue and sale of the Securities by the Fund and the
performance of this Agreement; the investment advisory agreement between
the Fund and Xxxxxxxx (the "Xxxxxxxx Advisory Agreement"); the
investment advisory agreement between the Fund and Guinness Flight (the
"Guinness Flight Advisory Agreement") (the Xxxxxxxx Advisory Agreement
and the Guinness Flight Advisory Agreement collectively, the "Advisory
Agreements"); the administration agreement between Investment Company
Administration
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Corporation (the "Administrator") and the Fund (the "Administration
Agreement"); the custody agreement between Investors Bank and Trust
Company (the "Custodian") and the Fund (the "Custody Agreement"); the
transfer agency agreement between State Street Bank & Trust Company (the
"Transfer Agent") and the Fund (the "Transfer Agency Agreement") (this
Agreement, the Advisory Agreements, the Administration Agreement, the
Custody Agreement and the Transfer Agency Agreement are herein referred
to collectively as the "Fundamental Agreements") and the consummation by
the Fund of the transactions contemplated by the Fundamental Agreements
will not conflict with or result in a breach or violation of any terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Fund is a party or by which any of the property or assets
of the Fund is bound or to which any of the property or assets of the
Fund is subject, nor will such action result in any violation of the
provisions of the Declaration of Trust or Bylaws of the Fund or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Fund or any of its
properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issuance and sale of the Securities or the
consummation by the Fund of the transactions contemplated by the
Fundamental Agreements or the Automatic Dividend Reinvestment and Cash
Purchase Plan (the "Plan"), except such consents, approvals,
authorizations, registrations or qualifications as may be required under
the 1933 Act, the 1940 Act and under state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by
the Underwriter and the clearance of such offering with the National
Association of Securities Dealers, Inc.;
(j) There are no legal or governmental proceedings pending to
which the Fund is a party or of which any property of the Fund is the
subject, other than as set forth or contemplated in the Prospectus,
which, if determined adversely to the Fund, would individually or in the
aggregate have a material adverse effect on the Fund and, to the best of
the Fund's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or by others;
(k) The Declaration of Trust and Bylaws of the Fund, the
Fundamental Agreements and the Plan comply with the all applicable
provisions of the 1933 Act, the 1940 Act and the Advisers Act, and all
approvals of such documents required under the 1940 Act by the Fund's
shareholders and Board of Trustees have been obtained and are in full
force and effect;
(l) There are no material restrictions, limitations or
regulations with respect to the ability of the Fund to invest its assets
as described in the Prospectus, other than as described therein;
(m) The statement of assets and liabilities included in the
Registration Statement and the Prospectus presents fairly the financial
position of the Fund as at the date indicated and such statement has
been prepared in conformity with generally accepted accounting
principles;
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(n) Ernst & Xxxxx has certified certain financial statements of
the Fund and is an independent public accountant as required by the 1933
Act and the rules and regulations of the Commission thereunder;
(o) The Fund has timely filed all necessary federal, state and
foreign income, franchise and excise tax returns and has paid all taxes
shown thereon as due, and there is no tax deficiency that has been or,
to the best knowledge of the Fund, might be asserted against the Fund
that might have a material adverse effect on the business, properties,
business prospects, condition (financial or otherwise), earnings or
results of operations of the Fund, and all tax liabilities are
adequately provided for on the books of the Fund taken as a whole;
(p) No relationship, direct or indirect, exists between or among
the Fund, on the one hand, and the trustees, officers, shareholders,
customers or suppliers of the Fund on the other hand, that is required
by the 1933 Act or the Securities Exchange Act of 1934, as amended, or
by the rules and regulations under either of such Acts to be described
in the Registration Statement and the Prospectus that is not so
described;
(q) The Fund has not taken and will not take, directly or
indirectly, any action that is designed to or that has constituted or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Fund to facilitate the
sale or resale of the Securities;
(r) The Fund holds and is operating in compliance, in all
material respects, with all grants, authorizations, licenses, permits,
consents, certificates and orders (including exemptive orders) of and
from, and has made all declarations and filings with, all governmental
and self-regulatory bodies, courts and other tribunals required for the
conduct of its business as presently being conducted ("licenses") and
all licenses are valid and in full force and effect; and the Fund is in
compliance, in all material respects, with all laws, regulations, orders
and decrees applicable to it;
(s) The Fund maintains insurance of the types and in the amounts
that are reasonable or required for the business operated by it, all of
which insurance is in full force and effect;
(t) The Securities have been approved for listing, subject to
notice of issuance, on the New York Stock Exchange, and the Fund's
Registration Statement on Form 8-A under the Exchange Act is effective;
(u) Each of the Fundamental Agreements has been duly authorized,
executed and delivered by the Fund, and each Fundamental Agreement,
except this Agreement, assuming due authorization, execution and
delivery by the other parties thereto, and the Plan constitutes the
legal, valid and binding obligation of the Fund, enforceable in
accordance with its terms except as may be limited by bankruptcy,
insolvency, fraudulent
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transfer or other similar laws affecting the rights and remedies of
creditors generally and subject to general principles or equity;
(v) The Fundamental Agreements (other than this Agreement) are in
full force and effect and neither the Fund nor, to the Fund's knowledge,
any other party to any such agreement is in default thereunder and no
event has occurred that with the passage of time or the giving of notice
or both would constitute a default thereunder. The Fund is not currently
in breach of, or in default under, any other written agreement or
instrument to which it or its property is bound or affected;
(w) The Fund intends to direct the investment of the proceeds of
the offering described in the Prospectus in such manner as to comply
with the requirements of Subchapter M of the Internal Revenue Code of
1986, as amended (the "Code"), and the Fund is eligible to qualify as a
regulated investment company under Subchapter M of the Code;
(x) Each officer and trustee of the Fund has entered into
agreements with the Fund pursuant to which such persons agree not to
offer, sell, or contract to sell, or otherwise dispose of, any Shares
beneficially owned by them or any securities convertible into, or
exchangeable for, Shares, on or before the 180th day after the date of
this Agreement without your prior written consent;
(y) The Fund maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences;
(z) There is no statute, regulation, contract or other document
of a character required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration
Statement that is not described or filed as required, and all such
contracts to which the Fund is a party constitute valid and binding
agreements of the Fund and are enforceable against the Fund in
accordance with the terms thereof, except as may be limited by
bankruptcy, insolvency, fraudulent transfer or other similar laws
affecting the rights and remedies of creditors generally and subject to
general principles or equity;
(aa) Any advertisement used with the consent of the Fund in the
public offering of the Shares pursuant to Rule 482 under the 1933 Act
(an "Omitting Prospectus") complies with the requirements of Rule 482,
and does not contain an untrue statement of a material fact; and
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(bb) The Fund does not own more than 5% of the equity interests
of any business entity.
2. REPRESENTATIONS AND WARRANTIES RELATING TO THE INVESTMENT ADVISERS. Each
of the Investment Advisers represents and warrants to and agrees with the
Underwriter that, with respect to such Investment Adviser:
(a) Such Investment Adviser has been duly incorporated and is
validly existing as a corporation in good standing under the laws of its
state of incorporation with power and authority to own or lease its
properties and conduct its business as described in the Prospectus, and
has been duly qualified to do business as a foreign entity in good
standing in all other jurisdictions in which it owns or leases
properties, or conducts any business, so as to require such
qualification, except where the failure to so qualify would not result
in a material adverse effect on the Investment Adviser;
(b) Such Investment Adviser is duly registered as an investment
adviser under the Advisers Act, and is not prohibited by the Advisers
Act or the 1940 Act or the rules or regulations thereunder from acting
under the applicable Advisory Agreement as an investment adviser to the
Fund as contemplated in the Prospectus, and no order of suspension or
revocation of such registration has been issued or proceedings therefor
initiated or threatened by the Commission;
(c) This Agreement and the applicable Advisory Agreement have
been duly authorized, executed and delivered by such Investment Adviser
and comply with all applicable provisions of the 1933 Act, the 1940 Act
and the Advisers Act. The applicable Advisory Agreement, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes the legal, valid and binding obligation of the Investment
Adviser, enforceable against the Investment Adviser in accordance with
its terms, except as may be limited by bankruptcy, insolvency,
fraudulent transfer or other similar laws affecting the rights and
remedies of creditors generally and subject to general principles or
equity;
(d) The execution and delivery by such Investment Adviser of, and
the performance by the Investment Adviser of its obligations under, this
Agreement and the applicable Advisory Agreement do not and will not
conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Investment Adviser is a party or by which any of the property or
assets of the Investment Adviser is bound or to which any of the
property or assets of the Investment Adviser is subject, nor will such
action result in any violation of the provisions of the Articles of
Incorporation or Bylaws of the Investment Adviser or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Investment Adviser or any of its
properties; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the performance by such Investment Adviser of its
obligations under this Agreement or the applicable Advisory Agreement,
except such consents, approvals,
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authorizations, registrations or qualifications as may be required under
the 1933 Act, the 1940 Act and under state securities or Blue Sky laws
in connection with the purchase and distribution of the Securities by
the Underwriter and the clearance of such offering with the National
Association of Securities Dealers, Inc.;
(e) There are no legal or governmental proceedings pending to
which such Investment Adviser is a party or of which any property of
such Investment Adviser is the subject, other than as set forth or
contemplated in the Prospectus, which, if determined adversely to the
Investment Adviser, would individually or in the aggregate have a
material adverse effect on the Investment Adviser and, to the best of
the Investment Adviser's knowledge, no such proceedings are threatened
or contemplated by governmental authorities or by others;
(f) Such Investment Adviser holds and is operating in compliance,
in all material respects, with all grants, authorizations, licenses,
permits, consents, certificates and orders (including exemptive orders)
of and from, and has made all declarations and filings with, all
governmental and self-regulatory bodies, courts and other tribunals
required for the conduct of its business as presently being conducted
("licenses") and all licenses are valid and in full force and effect;
and the Investment Adviser is in compliance, in all material respects,
with all laws, regulations, orders and decrees applicable to it;
(g) The Investment Adviser has the financial resources available
to it necessary for the performance of its services and obligations as
contemplated in the Prospectus;
(h) The applicable Advisory Agreement is in full force and effect
and neither the Investment Adviser nor the Fund is in default thereunder
and no event has occurred that with the passage of time or the giving of
notice or both would constitute a default thereunder;
(i) All information regarding such Investment Adviser in the
Registration Statement and Prospectus, including, without limitation,
the description of such Investment Adviser and such Investment Adviser's
past performance, does not, and on each Delivery Date will not, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make such information
not misleading; and
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the business or operations of
such Investment Adviser from that set forth in the Prospectus.
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3. PURCHASE AND SALE.
Subject to the terms and conditions herein set forth, (a) the Fund
agrees to sell to the Underwriter, and the Underwriter agrees to purchase from
the Fund at a purchase price per share of [$____], the Firm Securities and (b)
in the event and to the extent that the Underwriter shall exercise the election
to purchase Optional Securities as provided below, the Fund agrees to sell to
the Underwriter, and the Underwriter agrees to purchase from the Fund at the
purchase price set forth in clause (a) of this Section 3, that portion of the
number of Optional Securities as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractional securities).
The Fund hereby grants to the Underwriter the right to purchase at its
election up to 750,000 Optional Securities, at the purchase price per share set
forth in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Securities. Any such election to purchase Optional
Securities may be exercised no more than once by written notice from you to the
Fund, given within a period of 45 calendar days after the date of this
Agreement, setting forth the aggregate amount of Optional Securities to be
purchased and the date on which such Optional Securities are to be delivered, as
determined by you but in no event earlier than the First Delivery Date (as
defined in Section 5 hereof) or, unless you otherwise agree in writing, earlier
than two or later than 10 business days after the date of such notice.
4. OFFERING BY THE UNDERWRITER.
Upon the authorization by you of the release of the Firm Securities, the
Underwriter proposes to offer the Firm Securities for sale upon the terms and
conditions set forth in the Prospectus.
5. DELIVERY AND PAYMENT
[Certificates in definitive form] for the Securities to be purchased by
the Underwriter hereunder, in such denominations and registered in such names as
you may request upon at least two business days' prior notice to the Fund, shall
be delivered by or on behalf of the Fund to you, Wheat, First Securities, Inc.
Payment of the purchase price for the Securities shall be made by certified or
official bank check in next day funds or, at your option, by wire transfer of
immediately available funds, all at the offices of Wheat, First Securities,
Inc., Riverfront Plaza, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx. If payment is
made in immediately available funds, the Fund shall reimburse you, for your cost
of delivering immediately available funds, such cost to be computed at a daily
rate equal to your cost of overnight borrowings for each day from the Delivery
Date to the immediately following business day. The time and date of such
delivery and payment shall be, with respect to the Firm Securities, 10:00 a.m.,
Richmond, Virginia time, on [________, 1997] or at such other time and date as
you and the Fund may agree upon in writing, and, with respect to the Optional
Securities, 10:00 a.m., Richmond, Virginia time, on the date specified by you in
your written notice of your election to purchase such Optional Securities, or at
such other time and date as you and the Fund may agree upon in writing. Such
time and date for delivery of the Firm Securities is herein called the "First
Delivery Date," such time and date for delivery of the Optional
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Securities, if not the First Delivery Date, is herein called the "Second
Delivery Date," and each such time and date for delivery is herein called a
"Delivery Date." Such certificates will be made available for checking and
packaging at least 24 hours prior to each Delivery Date at the offices of Wheat,
First Securities, Inc. at the address set forth above or such other location
that you designate to the Fund.
6. AGREEMENTS OF THE FUND AND THE INVESTMENT ADVISERS.
The Fund and each of the Investment Advisers agree with the Underwriter:
(a) To prepare the Prospectus in a form reasonably approved by you and
to file such Prospectus (or a term sheet as permitted by Rule 434(c)) pursuant
to Rule 424(b) or Rule 497(b) under the 1933 Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the 1933 Act; to make no amendment or
supplement to the Registration Statement or Prospectus prior to any Delivery
Date which shall be reasonably disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof, of the
time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been
filed and to furnish you with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the Fund
with the Commission subsequent to the date of the Prospectus and for so long as
the delivery of a Prospectus is required in connection with the offering or sale
of the Securities; to advise you, promptly after it receives notice thereof, of
the issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus or for additional information or of the
issuance by the Commission of any notice or order pursuant to Section 8(e) of
the 1940 Act; and, in the event of the issuance of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification or of any order pursuant to
Section 8(e) of the 1940 Act, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such actions as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Fund shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(c) To furnish the Underwriter with copies of the Notification,
Registration Statement and the Prospectus in such quantities as you may from
time to time reasonably request during such period following the date hereof
that a prospectus is required to be delivered in connection with offers or sales
of Securities, and, if the delivery of a prospectus is required during this
period and if at such time any event shall have occurred as a result of which
the Prospectus as then amended or
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supplemented would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be necessary
during such period to amend or supplement the Prospectus to comply with the 1933
Act or the 1940 Act, to notify you and upon your request to file such document
and to prepare and furnish without charge to you and to any dealer in securities
as many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance;
(d) As soon as practicable after the effective date of the Registration
Statement, to make generally available to its shareholders and to deliver to
you, an earnings statement of the Fund, conforming with the requirements of
Section 11(a) of the 1933 Act and Rule 158 under the 1933 Act, covering a period
of at least 12 months beginning after the effective date of the Registration
Statement;
(e) For a period of 180 days from the date of the Prospectus, not to
offer, sell, contract to sell or otherwise dispose of any securities of the Fund
(other than the Securities), without your prior written consent;
(f) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Fund is listed; and (ii), such
additional information concerning the business and financial condition of the
Fund as you may from time to time reasonably request;
(g) To use best efforts to maintain the Fund's qualification as a
regulated investment company under Subchapter M of the Code;
(h) To apply the net proceeds from the sale of the Securities in the
manner set forth in the Prospectus under the caption "Use of Proceeds;" and
(i) To file timely and accurate reports on Form SR with the Commission
in accordance with Rule 463 under the 1933 Act or any successor provision.
7. PAYMENT OF EXPENSES.
The Fund covenants and agrees with the Underwriter that the Fund will
pay or cause to be paid the following: (i) the fees, disbursements and expenses
of the Fund's counsel and accountants in connection with the registration of the
Securities under the 1933 Act and the 1940 Act and all other expenses in
connection with the preparation, printing and filing of the Notification,
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriter and dealers; (ii) the cost of printing or reproducing
this Agreement, the Blue Sky Survey and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all
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expenses in connection with the qualification of the Securities for offering and
sale under state securities laws as provided in Section 6(b) hereof, including
the fees and disbursements of counsel for the Underwriter in connection with
such qualification and in connection with the Blue Sky Survey; (iv) the filing
fees incident to securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Securities; (v) the
cost of preparing stock certificates; (vi) the costs or expenses of any transfer
agent or registrar; (vii) 50% of all marketing expenses relating to the
development, production, printing, mailing, fulfillment (including, but not
limited to, in-bound 1-800 calls) and distribution of any marketing materials
used or proposed to be used in connection with the offering of the Securities
(the "Marketing Expenses") up to $400,000 and such amounts over and above
$400,000 as are jointly approved by the Investment Advisers and the Underwriter
and (viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that except as provided in Section 9 and
Section 11 hereof, the Underwriter will pay all its own costs and expenses,
including the fees of its counsel, stock transfer taxes on resale of any of the
Securities by it and any advertising expenses connected with any offers it may
make.
8. CONDITIONS TO OBLIGATIONS OF UNDERWRITER.
The obligations of the Underwriter hereunder, as to the Securities to be
delivered at each Delivery Date, shall be subject, in their discretion, to the
condition that all representations and warranties and other statements of the
Fund and the Investment Advisers herein are, at and as of such Delivery Date,
true and correct, and the condition that the Fund and the Investment Advisers
shall have performed all of their respective obligations hereunder theretofore
to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) under the 1933 Act within the applicable time period prescribed for
such filing by the rules and regulations under the 1933 Act and in accordance
with Section 5(a) of this Agreement; no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to your reasonable satisfaction;
(b) Xxxxxx & Xxxxxxxx, counsel for the Underwriter, shall have furnished
to you such opinion or opinions, dated such Delivery Date, with respect to the
formation of the Fund, the validity of the Securities being issued at such
Delivery Date, the Registration Statement, the Prospectus, and other related
matters as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to pass
upon such matters;
(c) Xxxxxx, Xxxxx, Xxxxxxxx & Xxxxxxx, counsel for the Fund, shall have
furnished to you their written opinion, dated such Delivery Date, in form and
substance satisfactory to you, to the effect set forth in Annex A hereto;
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(d) _______________, counsel for Guinness Flight, shall have furnished
to you their written opinion, dated such Delivery Date, in form and substance
satisfactory to you, to the effect set forth in Annex B hereto;
(e) Xxxxxxx & Xxxxxx, counsel for Xxxxxxxx, shall have furnished to you
their written opinion, dated such Delivery Date, in form and substance
satisfactory to you, to the effect set forth in Annex C hereto;
(f) At 10:00 a.m., Richmond, Virginia, time, on the date of this
Agreement and the effective date of the most recently filed post-effective
amendment to the Registration Statement and also at each Delivery Date, Xxxxx &
Young shall have furnished to you a letter or letters, dated the respective date
of delivery thereof, in form and substance satisfactory to you, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information relating to the Fund contained in the Registration
Statement and the Prospectus;
(g) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in the
capital stock or debt of the Fund or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
condition, financial or otherwise, of the Fund or the Investment Advisers, or in
the investment objectives, investment policies, liabilities, business, prospects
or operations of the Fund otherwise than as set forth in the Prospectus, and
there have been no transactions entered into by the Fund that are material to
the Fund other than those in the ordinary course of its business or as described
in the Prospectus, the effect of which, in any such case in your reasonable
judgment so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Securities being
delivered at such Delivery Date on the terms and in the manner contemplated by
the Prospectus;
(h) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading of any of the
equity securities of the Fund on the New York Stock Exchange; (ii) any United
States federal or state statute, regulation, rule or order of any court,
legislative body, agency or other governmental authority shall have been
enacted, published, decreed or promulgated or any proceeding or investigation
shall have been commenced which, in your reasonable judgment, materially and
adversely affects the business or operations of the Fund; (iii) a suspension or
material limitation in trading in securities generally on the New York Stock
Exchange or the Nasdaq National Market; (iv) a general moratorium on commercial
banking activities in New York State declared by either federal or New York
State authorities; (v) the outbreak or escalation of hostilities involving the
United States or the declaration by the United States of a national emergency or
war, if any such event specified in this clause (v) would have such a materially
adverse effect, in your reasonable judgment, as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Securities being delivered at such Delivery Date on the terms and in the manner
contemplated in the Prospectus; or (vi) such a material adverse change in
general economic, political, financial or international conditions affecting
financial markets in the United States having a material adverse impact on
trading prices
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of securities in general, as, in your reasonable judgment, makes it inadvisable
to proceed with the payment for and delivery of the Securities;
(i) The Fund shall have furnished to you copies of agreements between
the Fund and the trustees and officers of the Fund, in form and content
satisfactory to you, pursuant to which such persons agree not to offer, sell, or
contract to sell, or otherwise dispose of, any Shares beneficially owned by them
or any securities convertible into, or exchangeable for, Shares, on or before
the 180th day after the date of this Agreement without your prior written
consent;
(j) The Fund and the Investment Advisers shall have furnished or caused
to be furnished to you at such Delivery Date certificates of officers of the
Fund and of the Investment Advisers reasonably satisfactory to you as to the
accuracy of the respective representations and warranties of the Fund and the
Investment Advisers herein at and as of such Delivery Date, as to the
performance by the Fund and the Investment Advisers of all of their obligations
hereunder to be performed at or prior to such Delivery Date, as to the matters
set forth in subsections (a) and (g) of this Section and as to such other
matters as you may reasonably request;
(k) You shall have received on such Delivery Date a certificate from a
duly authorized officer of the Custodian certifying that the Custody Agreement
is in full force and effect and is the legal, valid, binding and enforceable
obligation of the Custodian, assuming that such Custody Agreement is a legal,
valid, binding and enforceable obligation of the other party thereto;
(l) You shall have received on such Delivery Date a certificate from a
duly authorized officer of the Administrator certifying that the Administration
Agreement is in full force and effect and is the legal, valid, binding and
enforceable obligation of the Administrator, assuming that such Administration
Agreement is a legal, valid, binding and enforceable obligation of the other
party thereto;
(m) You shall have received on such Delivery Date a certificate from a
duly authorized officer of the Transfer Agent certifying that the Transfer
Agency Agreement is in full force and effect and is the legal, valid, binding
and enforceable obligation of the Transfer Agent, assuming that such Transfer
Agency Agreement is a legal, valid, binding and enforceable obligation of the
other party thereto; and
(n) No proceedings shall have been instituted or threatened by the
Commission that would adversely affect the Fund's standing as a registered
investment company under the 1940 Act or the standing of either Investment
Adviser under the Advisers Act.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) The Fund and each of the Investment Advisers will indemnify and hold
harmless the Underwriter against any losses, claims, damages or liabilities,
joint or several, to which the Underwriter may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus,
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the Registration Statement, the Prospectus or the Notification, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse the
Underwriter for any legal or other expenses reasonably incurred by the
Underwriter in connection with investigating, preparing to defend or defending,
or appearing as a third-party witness in connection with, any such action or
claim; provided, however, that the Fund shall not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement,
Prospectus or Notification or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Fund by the
Underwriter expressly for use therein; further provided, however, that the
indemnity agreement contained in this paragraph with respect to any Preliminary
Prospectus shall not inure to the benefit of the Underwriter if the Underwriter
failed to send or give a copy of the Prospectus at or prior to the written
confirmation of the sale of the Securities that are the subject thereof to the
person asserting any such losses, claims, damages (if such failure was not the
result of the Fund's failure to deliver the Prospectus to the Underwriter on a
timely basis to permit the Underwriter to so send or give a copy of the
Prospectus to such person at or prior to such time) and if the Prospectus did
not contain the untrue statement or alleged untrue statement or omission or
alleged omission giving rise to such loss, claim, damage or liability.
(b) The Underwriter will indemnify and hold harmless the Fund and each
Investment Adviser against any losses, claims, damages or liabilities to which
the Fund may become subject, under the 1933 Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Notification, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement, the Prospectus or the Notification or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Fund by such Underwriter through you expressly for use therein; and will
reimburse the Fund for any legal or other expenses reasonably incurred by the
Fund in connection with investigating, preparing to defend or defending, or
appearing as a third-party witness in connection with, any such action or claim.
The Fund acknowledges that the statements set forth in the last paragraph of the
cover page, the first paragraph on the inside front cover page and the first,
second, third, and sixth paragraphs under the heading "Underwriting" in the
Preliminary Prospectus and the Prospectus constitute the only information
furnished in writing by or on behalf of the Underwriter for inclusion in the
Preliminary Prospectus or the Prospectus, and you confirm that such statements
are correct.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
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shall not relieve it from any liability which it may have to any indemnified
party otherwise than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party; provided, however, that if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have been advised by counsel
that representation of such indemnified party and the indemnifying party may be
inappropriate under applicable standards of professional conduct due to actual
or potential differing interests between them, the indemnified party or parties
shall have the right to select separate counsel to defend such action on behalf
of such indemnified party or parties. It is understood that the indemnifying
party shall, in connection with any such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of only one separate firm of attorneys together with appropriate local
counsel at any time for all indemnified parties unless such firm of attorneys
shall have reasonably concluded that one or more indemnified parties has actual
differing interests with other indemnified parties. Upon receipt of notice from
the indemnifying party to such indemnified party of its election so to appoint
counsel to defend such action and approval by the indemnified party of such
counsel, the indemnifying party will not be liable for any settlement entered
into without its consent and will not be liable to such indemnified party under
this Section 9 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence, (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). Notwithstanding the immediately preceding sentence and the first
sentence of this paragraph, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees and
expenses of counsel, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement.
(d) If the indemnification provided for in this Section 9 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Fund and the Investment Advisers on the
one hand and the Underwriter on the other from the offering of the Securities.
If, however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give the
notice required under
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subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Fund and the Investment Advisers on the one hand and the
Underwriter on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Fund and the Investment
Advisers on the one hand and the Underwriter on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (after
deducting the total underwriting discount, but before deducting offering
expenses) received by the Fund bear to the total underwriting discounts and
commissions received by the Underwriter, in each case as set forth in the table
on the cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Fund or the Investment Advisers on the
one hand or the Underwriter on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Fund, the Investment Advisers and the Underwriter
agree that it would not be just and equitable if contributions pursuant to this
subsection (d) were determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), the
Underwriter shall not be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of
damages which the Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the 1933 Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
(e) The obligations of the Fund and the Investment Advisers under this
Section 9 shall be in addition to any liability that the Fund and the Investment
Advisers may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls the Underwriter within the
meaning of the 1933 Act; and the obligations of the Underwriter under this
Section 9 shall be in addition to any liability that the Underwriter may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and trustee of the Fund and to each person, if any, who controls the
Fund within the meaning of Section 2(a) of the 1940 Act.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE.
The respective indemnities, agreements, representations, warranties and
other statements of the Fund, each of the Investment Advisers and the
Underwriter, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation (or any statement as to the results thereof) made by or on behalf
of the Underwriter or any controlling
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person of the Underwriter, or the Fund, or any officer or trustee or controlling
person of the Fund, or either of the Investment Advisers, or any officer or
director or controlling person of either Investment Adviser, and shall survive
delivery of and payment for the Securities.
11. TERMINATION AND PAYMENT OF EXPENSES.
If this Agreement shall be terminated pursuant to any of the provisions
hereof, or if this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of the Fund or either Investment Adviser to
comply with the terms or fulfill any of the conditions of this Agreement, the
Fund and the Investment Advisers agree to reimburse the Underwriter for all
out-of-pocket expenses (including travel expenses, due diligence expenses, and
reasonable fees and expenses of counsel) reasonably incurred by it in connection
herewith, up to a maximum of $200,000 plus 100% of all Marketing Expenses up to
$400,000 and such amounts over and above $400,000 as are jointly approved by the
Underwriter and the Investment Advisers.
12. NOTICES.
All statements, requests, notices and agreements hereunder shall be in
writing or by telegram if promptly confirmed in writing, and if to the
Underwriter shall be sufficient in all respects if delivered or sent by reliable
courier, first class mail, telex or facsimile transmission to Wheat, First
Securities, Inc., at Riverfront Plaza, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, Attention: Corporate Finance Department; if to the Fund and the
Investment Advisers shall be sufficient in all respects if delivered or sent by
reliable courier, first class mail, telex, or facsimile transmission to the
address of the Fund set forth in the Registration Statement, Attention:
____________. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. SUCCESSORS.
This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriter, the Fund and the Investment Advisers and, to the extent
provided in Sections 9 and 10 hereof, the officers and trustees of the Fund and
each person who controls the Fund, the Underwriter or either Investment Adviser,
and their respective heirs, executors, administrators, successors and assigns,
and no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from the Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. TIME OF THE ESSENCE.
Time shall be of the essence in this Agreement.
15. BUSINESS DAY.
As used herein, the term "business day" shall mean any day when the
Commission's office in Washington, D.C. is open for business.
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16. APPLICABLE LAW.
This Agreement shall be construed in accordance with the laws of the
State of New YORK, without regard to the conflicts of law provisions thereof.
17. CAPTIONS.
The captions included in this Agreement are included solely for
convenience of reference and shall not be deemed to be a part of this Agreement.
18. COUNTERPARTS.
This Agreement may be executed by any one or more of the parties in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us four counterparts hereof, and upon the acceptance hereof by
you, this letter and such acceptance hereof shall constitute a binding agreement
among the Underwriter, the Fund, Xxxxxxxx and Guinness Flight.
Very truly yours,
THE XXXXXXXX GLOBAL EQUITY FUND
By:
----------------------------------
Name:
Title:
XXXXXXXX ASSET MANAGEMENT, INC.
By:
----------------------------------
Name:
Title:
GUINNESS FLIGHT INVESTMENT
MANAGEMENT LIMITED
By:
----------------------------------
Name:
Title:
Accepted as of the date hereof at Richmond, Virginia:
WHEAT, FIRST SECURITIES, INC.
By:
-------------------------------
Name:
Title:
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