Exhibit 1.1
150,000 iShares
iSHARES COMEX GOLD TRUST
DISTRIBUTION AGREEMENT
[.], 2005
DISTRIBUTION AGREEMENT
[ ], 2005
Barclays Capital Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Barclays Global Investors, N.A., a national banking association (the
"Sponsor"), has sponsored the formation of a trust, known as "iShares COMEX Gold
Trust" (the "Trust") pursuant to the laws of the State of New York. Subject to
the terms hereof, the Trust has issued to Barclays Capital Inc. ("Barclays
Capital") an aggregate of 150,000 units of fractional undivided beneficial
interest in and ownership of the Trust (each such unit, an "iShare(R)") upon the
deposit by Barclays Capital with The Bank of Nova Scotia, a bank organized under
the laws of Canada, as custodian of the Trust (in such capacity, the
"Custodian"), of an aggregate amount of 15,000 Fine Ounces of gold bullion,
(equal to three baskets as described in the Prospectus, the "Initial Deposit").
The iShares are described in the Prospectus which is referred to below.
The Sponsor has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the "Act"), with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (Registration No. 333-112589)
including a prospectus, relating to the iShares. The Sponsor has furnished to
you, for use by Barclays Capital, the form of what is expected to be the final
prospectus (constituting a part of the registration statement, each such
prospectus being herein called a "Prospectus") relating to the iShares. Except
where the context otherwise requires, the registration statement, as amended
when it becomes effective, including all documents filed as a part thereof, and
including any information contained in any prospectus subsequently filed with
the Commission pursuant to Rule 424(b) under the Act and also including any
registration statement filed pursuant to Rule 462(b) under the Act, is herein
called the "Registration Statement". As used herein, "business day" shall mean a
day on which the American Stock Exchange is open for trading. Capitalized terms
not otherwise defined herein shall have the meaning ascribed to them in the
Depositary Trust Agreement (as defined below).
The Sponsor, on its own behalf and in its capacity as sponsor of the
Trust, and Barclays Capital agree as follows:
1. Sale and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions herein set forth (including
satisfaction of the conditions set forth in Section 6 hereof), Barclays Capital
is purchasing from the Trust 150,000 iShares (such iShares, collectively, the
"Purchased Shares") in exchange for gold bullion which, in the amount of the
Initial Deposit, has been delivered by Barclays Capital to the Custodian on the
date hereof. The Sponsor and the Trust are advised by Barclays Capital that,
upon satisfaction (or waiver by Barclays Capital) of the conditions set forth in
Section 6 hereof, Barclays Capital intends to make a public offering of its
iShares as soon after the effective date of the Registration Statement, and on
such terms, as in its judgment is advisable.
2. Deposit of Gold and Delivery of the Purchased Shares. Pursuant
to the Depositary Trust Agreement of the iShares COMEX Gold Trust between the
Sponsor and the Trustee (the "Depositary Trust Agreement"), dated the date
hereof, Barclays Capital has on the date hereof made delivery of the Initial
Deposit to the Custodian, with irrevocable instructions to transfer such Initial
Deposit to the
account of the Trust, and the Trust has caused the Purchased Shares to be
delivered to Barclays Capital through the facilities of The Depository Trust
Company ("DTC") for the account of Barclays Capital.
3. Representations and Warranties of the Sponsor. The Sponsor, on
its own behalf and in its capacity as sponsor of the Trust, represents and
warrants to and agrees with Barclays Capital that:
(a) at the time the conditions set forth in Section 6 hereof
have been waived or satisfied (such time, the "time of closing") (i) the
Registration Statement shall have become effective and no stop order of the
Commission with respect thereto shall have been issued and no proceedings for
such purpose shall have been instituted or, to the Sponsor's knowledge after due
inquiry, will then be contemplated by the Commission; (ii) each Prospectus, at
the time of filing thereof, shall have complied in all material respects with
the requirements of the Act and the last Prospectus distributed in connection
with the offering of the shares shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; (iii) the Registration Statement shall
comply, and shall have complied at the time it became effective, in all material
respects with the requirements of the Act and the Prospectus will comply, as of
its date and at the time of closing, in all material respects with the
requirements of the Act and any statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement have been so
described or filed; (iv) the conditions to the use of Form S-1 have been
satisfied; (v) the Registration Statement shall not contain, and shall have not
contained at the time it became effective, 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 the
Sponsor makes no warranty or representation with respect to any statement
contained in the Registration Statement or the Prospectus in reliance upon and
in conformity with information concerning Barclays Capital and furnished in
writing by or on behalf of Barclays Capital to the Sponsor expressly for use in
the Registration Statement or such Prospectus; and (vi) the Sponsor and the
Trust shall have not distributed and will not distribute any offering material
in connection with the offering or creation of the shares other than the
Registration Statement or the then most recent Prospectus;
(b) on the date of the Initial Deposit, the statement of
financial position is as set forth in the section of the Registration Statement
and the Prospectus entitled "Statement of Financial Condition";
(c) as of the date hereof, the Trust has been duly formed
and is validly existing as an investment trust under the laws of the State of
New York, as described in the Registration Statement and the Prospectus, and has
all power and authority to issue and deliver the iShares as contemplated herein;
(d) the Sponsor is a national banking association chartered
in the United States, with full power and authority to conduct its business as
described in the Registration Statement and the Prospectus;
(e) the Sponsor is duly qualified, validly existing and in
good standing under the laws of its jurisdiction of organization and the Trust
is not required to so qualify in any jurisdiction;
(f) complete and correct copies of the Depositary Trust
Agreement, and any and all amendments thereto, have been delivered to Barclays
Capital, and no changes thereto have been made subsequent to the date hereof and
prior to the time of closing;
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(g) the iShares have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and non-assessable and free of statutory and
contractual preemptive rights, rights of first refusal and similar rights;
(h) the iShares conform in all material respects to the
description thereof contained in the Registration Statement and the Prospectus
and the holders of the iShares will not be subject to personal liability by
reason of being such holders;
(i) this Agreement has been duly authorized, executed and
delivered by the Sponsor;
(j) neither the Sponsor nor the Trust is in material breach
or material violation of or in material default under (nor has any event
occurred which with notice, lapse of time or both would result in any material
breach or material violation of, constitute a material default under or give the
holder of any indebtedness (or a person acting on such holder's behalf) the
right to require the repurchase, redemption or repayment of all or a part of
such indebtedness under) its respective constitutive documents, or any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Sponsor or the Trust is a party or by which either of
them or any of their properties may be bound or affected, and the execution,
delivery and performance of this Agreement, the issuance and sale of the iShares
and the consummation of the transactions contemplated hereby will not conflict
with, result in any breach or violation of or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in
any breach or violation of or constitute a default under), respectively, the
constitutive documents of the Sponsor or the Depositary Trust Agreement, or any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement or
instrument to which the Sponsor or the Trust is a party or by which either of
them or any of their respective properties may be bound or affected, or any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Sponsor or the Trust;
(k) no approval, authorization, consent or order of or
filing with any federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency is required in connection with the
issuance and sale of the iShares or the consummation by the Sponsor and the
Trust of the transactions contemplated hereby other than registration of the
iShares under the Act, which has been or will be effected, and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the shares are being offered by Barclays Capital or under the rules and
regulations of the National Association of Securities Dealers (the "NASD");
(l) except as set forth in the Registration Statement and
the Prospectus, (i) no person has the right, contractual or otherwise, to cause
the Trust to issue or sell to it any iShares or other equity interest of the
Trust, and (ii) no person has the right to act as an underwriter or as a
financial advisor to the Trust in connection with the offer and sale of the
iShares, in the case of each of the foregoing clauses (i) and (ii), whether as a
result of the filing or effectiveness of the Registration Statement or the sale
of the iShares as contemplated thereby or otherwise; no person has the right,
contractual or otherwise, to cause the Sponsor on behalf of the Trust to
register under the Act any other equity interests of the Trust, or to include
any such shares or interests in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the shares as contemplated thereby or
otherwise;
(m) each of the Sponsor and the Trust has all necessary
licenses, authorizations, consents and approvals and has made all necessary
filings required under any federal, state, local or foreign law, regulation or
rule, and has obtained all necessary authorizations, consents and approvals from
other persons, in order to conduct its respective business; neither the Sponsor
nor the Trust is in violation
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of, or in default under, or has received notice of any proceedings relating to
revocation or modification of, any such license, authorization, consent or
approval or any federal, state, local or foreign law, regulation or rule or any
decree, order or judgment applicable to the Sponsor or the Trust;
(n) all legal or governmental proceedings, affiliate
transactions, off-balance sheet transactions, contracts, licenses, agreements,
leases or documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement have been so described or filed as required;
(o) except as set forth in the Registration Statement and
the Prospectus, there are no material actions, suits, claims, investigations or
proceedings pending or threatened or, to the Sponsor's knowledge after due
inquiry, contemplated to which the Sponsor or the Trust, or (to the extent that
is or could be material in the context of the offering and sale of the iShares)
any of their respective directors or officers, is or would be a party or of
which any of their respective properties are or would be subject at law or in
equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency;
(p) PricewaterhouseCoopers, whose report on the audited
statement of financial condition of the Trust is filed with the Commission as
part of the Registration Statement and the Prospectus, are independent public
accountants as required by the Act;
(q) the audited statement of financial condition included in
the Prospectus, together with the related notes and schedules, presents fairly
the financial position of the Trust as of the date indicated and has been
prepared in compliance with the requirements of the Act and in conformity with
generally accepted accounting principles; there are no financial statements
(historical or pro forma) that are required to be included in the Registration
Statement and the Prospectus that are not included as required; and the Trust
does not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not disclosed in the Registration
Statement and the Prospectus;
(r) subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus, there has
not been any (i) material adverse change, or any development involving a
prospective material adverse change affecting the Sponsor or the Trust, (ii)
transaction which is material to the Sponsor or the Trust taken as a whole,
(iii) obligation, direct or contingent (including any off-balance sheet
obligations), incurred by the Sponsor or the Trust, which is material to the
Trust, (iv) change in the iShares or outstanding indebtedness of the Trust, or
(v) dividend or distribution of any kind declared, paid or made on the iShares;
(s) the Trust is not and, after giving effect to the
offering and sale of the iShares, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
investment Company Act of 1940, as amended (the "Investment Company Act");
(t) except as set forth in the Registration Statement and
the Prospectus, (i) the Sponsor and the Trust own, or have obtained valid and
enforceable licenses for, or other rights to use, the inventions, patent
applications, patents, trademarks (both registered and unregistered),
tradenames, copyrights, trade secrets and other proprietary information
described in the Registration Statement and the Prospectus as being owned or
licensed by them or which are necessary for the conduct of their respective
businesses, (collectively, "Intellectual Property"); (ii) there are no third
parties who have or, to the Sponsor's knowledge after due inquiry, will be able
to establish rights to any Intellectual Property, except for the ownership
rights of the owners of the Intellectual Property which is licensed to the
Sponsor or the Trust; (iii) there is no infringement by third parties of any
Intellectual Property; (iv) there is no pending or threatened action, suit,
proceeding or claim by others challenging the Sponsor's or the Trust's rights in
or
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to any Intellectual Property, and the Sponsor and the Trust are unaware of any
facts which could form a reasonable basis for any such claim; (v) there is no
pending or threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Intellectual Property, and the Sponsor and the
Trust are unaware of any facts which could form a reasonable basis for any such
claim; and (vi) there is no pending or threatened action, suit, proceeding or
claim by others that the Sponsor or the Trust infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Sponsor and the Trust are unaware of any facts which could form
a reasonable basis for any such claim.
(u) the Trust is not subject to any tax filing or any
payment obligation of any tax or other assessment of a similar nature (whether
imposed directly or through withholding) including any interest, additions to
tax or penalties applicable thereto due or claimed to be due;
(v) neither the Sponsor nor the Trust has sent or received
any communication regarding termination of, or intent not to renew, any of the
contracts or agreements referred to or described in, or filed as an exhibit to,
the Registration Statement, and no such termination or non-renewal has been
threatened by the Sponsor or the Trust or, to the Sponsor's or the Trust's
knowledge, any other party to any such contract or agreement;
(w) on behalf of the Trust, the Sponsor has established and
maintains disclosure controls and procedures (as such term is defined in Rule
13a-14 and 15d-14 under the Exchange Act of 1934 (the "Exchange Act"), giving
effect to the rules and regulations, and SEC staff interpretations (whether or
not public), thereunder)); such disclosure controls and procedures are designed
to ensure that material information relating to the Trust is made known to the
Sponsor, and such disclosure controls and procedures are effective to perform
the functions for which they were established; on behalf of the Trust, the
Sponsor has been advised of: (i) any significant deficiencies in the design or
operation of internal controls which could adversely affect the Trust's ability
to record, process, summarize, and report financial data; and (ii) any fraud,
whether or not material, that involves management or other employees who have a
role in the Trust's internal controls; any material weaknesses in internal
controls have been identified for the Trust's auditors;
(x) any statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from sources
that the Sponsor believes to be reliable and accurate, and the Sponsor has
obtained the written consent to the use of such data from such sources to the
extent required;
(y) neither the Sponsor, nor the Trust, nor any of the
Sponsor's directors, members, officers, affiliates or controlling persons has
taken, directly or indirectly, any action designed, or which has constituted or
might reasonably be expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any security or
asset of the Trust to facilitate the sale or resale of the iShares; and
(z) to the Sponsor's knowledge after due inquiry, there are
no affiliations or associations between any member of the NASD and any of the
Sponsor's officers, directors or 5% or greater securityholders, except for
Barclays Global Investor Services, a registered broker-dealer wholly owned by
the Sponsor (and which will take no part in any distribution of the iShares) or
as set forth in the Registration Statement and the Prospectus.
In addition, any certificate signed by any officer of the Sponsor and
delivered to Barclays Capital or counsel for Barclays Capital in connection with
the offering of the iShares shall be deemed to be a
5
representation and warranty by the Sponsor, as the case may be, as to matters
covered thereby, to Barclays Capital.
4. Certain Covenants of the Sponsor. The Sponsor, on its own behalf
and in its capacity as sponsor of the Trust, agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the iShares for offering and sale under the
securities or blue sky laws of such states as Barclays Capital may reasonably
designate and to maintain such qualifications in effect so long as Barclays
Capital may request for the distribution of the iShares not to exceed a period
of nine months; provided that the Trust shall not be required to qualify as a
foreign corporation or to consent to the service of process under the laws of
any such jurisdiction (except service of process with respect to the offering
and sale of the iShares); and to promptly advise Barclays Capital of the receipt
by the Sponsor of any notification with respect to the suspension of the
qualification of the iShares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
(b) to make available to Barclays Capital, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to Barclays Capital, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Sponsor or
the Trust shall have made any amendments or supplements thereto after the
effective date of the Registration Statement) as Barclays Capital may request
for the purposes contemplated by the Act; in case Barclays Capital is required
to deliver a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the iShares, the Sponsor will
prepare, at its expense, promptly upon request such amendment or amendments to
the Registration Statement and the Prospectus as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Act;
(c) to endeavor to cause the Registration Statement to
become effective on or before the time of closing and the Sponsor will advise
Barclays Capital promptly; and, if requested by Barclays Capital, to confirm in
writing when the Registration Statement and any post-effective amendment thereto
has become effective; and, upon receipt of request from Barclays Capital
therefor, to file a post-effective amendment removing any reference to Barclays
Capital thereunder;
(d) to advise Barclays Capital promptly, confirming such
advice in writing, of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information with respect thereto, or of notice of institution of proceedings
for, or the entry of a stop order suspending the effectiveness of the
Registration Statement and, if the Commission should enter a stop order
suspending the effectiveness of the Registration Statement, to use its best
efforts to obtain the lifting or removal of such order as soon as possible; to
advise Barclays Capital promptly of any proposal to amend or supplement the
Registration Statement or the Prospectus and to provide Barclays Capital and
Barclays Capital's counsel copies of any such documents for review and comment a
reasonable amount of time prior to any proposed filing and to file no such
amendment or supplement to which Barclays Capital shall object in writing;
(e) subject to section 4(d) hereof, to file promptly all
reports and any information statement required to be filed by the Trust with the
Commission in order to comply with the Exchange Act 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 Purchased Shares;
(f) to advise Barclays Capital promptly of the happening of
any event within the time during which a prospectus relating to the Purchased
Shares is required to be delivered under the Act which could require the making
of any change in the Prospectus then being used so that the Prospectus
6
would not include an untrue statement of material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they are made, not misleading, and, during such time,
subject to section 4(d) hereof, to prepare and furnish, at the Sponsor's
expense, to Barclays Capital promptly such amendments or supplements to such
Prospectus as may be necessary to reflect any such change;
(g) to make generally available to the shareholders of the
Trust, and to deliver to Barclays Capital, an earnings statement of the Trust
(which will satisfy the provisions of Section 11(a) of the Act) covering a
period of twelve months beginning after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Act) as soon as is reasonably
practicable after the termination of such twelve-month period;
(h) to furnish to Barclays Capital promptly for a period of
one year from the date of this Agreement such information as Barclays Capital
may reasonably request regarding the Trust;
(i) to pay all costs, expenses, fees and taxes in connection
with (i) the preparation and filing of the Registration Statement, the
Prospectus, and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to Barclays Capital (including costs of
mailing and shipment), (ii) the registration, issue, sale and delivery of the
iShares including any stock or transfer taxes and stamp or similar duties
payable upon the sale, issuance or delivery of the shares to Barclays Capital,
(iii) the producing, word processing and/or printing of this Agreement, any
Powers of Attorney and any closing documents (including compilations thereof)
and the reproduction and/or printing and furnishing of copies of each thereof to
Barclays Capital and (except closing documents) to dealers (including costs of
mailing and shipment), (iv) the qualification of the iShares for offering and
sale under state or foreign laws and the determination of their eligibility for
investment under state law as aforesaid (including the legal fees and filing
fees and other disbursements of counsel for Barclays Capital) and the printing
and furnishing of copies of any blue sky surveys or legal investment surveys to
Barclays Capital, (v) any listing of the iShares on any securities exchange or
qualification of the iShares for quotation on the American Stock Exchange and
any registration thereof under the Exchange Act, (vi) any filing for review of
the public offering of the iShares by the NASD, including the legal fees and
filing fees and other disbursements of counsel to Barclays Capital, (vi) the
fees and disbursements of the Custodian (as defined in the Depositary Trust
Agreement), transfer agent or registrar for the iShares, (vii) the costs and
expenses of the Trust relating to presentations or meetings undertaken in
connection with the marketing of the offering and sale of the iShares to
prospective investors and Barclays Capital's sales forces, including, without
limitation, expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection with the
road show presentations, travel, lodging and other expenses incurred by the
officers of the Sponsor or the Trust and any such consultants, and the cost of
any aircraft chartered in connection with the road show, and (ix) the
performance of the Sponsor's other obligations hereunder;
(j) to use its best efforts to cause the iShares to be
listed on the American Stock Exchange;
(k) to maintain a Custodian (as defined in the Depositary
Trust Agreement) and an orderly procedure for the transfer and register of the
iShares; and
(l) to waive until the time of closing any fees due under
Section 5.8(a) of the Depositary Trust Agreement.
5. Reimbursement of Barclays Capital's Expenses. The Sponsor shall,
at the earlier of the time of closing and the first business day immediately
following the last day on which the conditions
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referred to in Section 6 hereof may be satisfied, reimburse Barclays Capital for
all of its out-of-pocket expenses, including the fees and disbursements of
counsel, incurred by Barclays Capital in connection with the preparation of this
Agreement and the transactions contemplated hereby.
6. Conditions of Barclays Capital's Obligations. The obligations of
Barclays Capital hereunder are subject to the accuracy of the representations
and warranties contained herein on the date hereof (if applicable), at the time
of closing, the performance by the Sponsor of its obligations hereunder and
compliance with the following additional conditions precedent no later than on
[ ], 2005:
(a) The Sponsor shall furnish to Barclays Capital at the
time of closing an opinion of counsel for the Sponsor, addressed to Barclays
Capital, and dated the time of closing and in form and substance satisfactory to
Xxxxxxxx Chance US LLP, counsel for Barclays Capital, stating that:
(i) the iShares issuable hereunder, when issued in
accordance with the terms hereof will have been duly authorized and validly
issued and fully paid and non-assessable;
(ii) the iShares conform to the description thereof
contained in the Registration Statement and the Prospectus;
(iii) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other financial and
statistical information contained therein, as to which such counsel need express
no opinion) comply as to form in all material respects with the requirements of
the Act;
(iv) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order proceedings with
respect thereto are pending or threatened under the Act and any required filing
of the Prospectus and any supplement thereto pursuant to Rule 424 under the Act
has been made in the manner and within the time period required by such Rule
424;
(v) no approval, authorization, consent or order of
or filing with any federal, or New York State governmental or regulatory
commission, board, body, authority or agency is required in connection with the
issuance and sale of the iShares and consummation by the Sponsor of the
transactions contemplated hereby other than registration of the iShares under
the Act (except such counsel need express no opinion as to any necessary
qualification under the state securities or blue sky laws of any state or the
laws of any jurisdictions outside the United States);
(vi) the Trust is not and, after giving effect to the
offering and sale of the iShares, will not be an "investment company" or an
entity "controlled" by an "investment company," as such terms are defined in the
Investment Company Act; and
(vii) the information in the Registration Statement
and the Prospectus under the headings "Description of the iShares and the Trust
Agreement", "United States Federal Income Tax Consequences," and "Custody of the
Trust's Gold" insofar as such statements constitute a summary of documents or
matters of law are accurate in all material respects and present fairly the
information required to be shown.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Sponsor, representatives of the independent public accountants of the Trust and
representatives of Barclays Capital at which the contents of the Registration
Statement and the Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration
8
Statement or the Prospectus (except as and to the extent stated in subparagraphs
(ii) and (vii) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes them to believe that the Registration
Statement or any amendment thereto at the time such Registration Statement or
amendment became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus or any
supplement thereto at the date of such Prospectus or such supplement, and at the
time of closing, contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading (it being understood that such counsel need express no opinion
with respect to the information contained under the heading "The Gold Industry"
or the financial statements and schedules and other financial and statistical
information included in the Registration Statement or the Prospectus).
(b) The Sponsor shall furnish to Barclays Capital at the
time of closing an opinion of Xxxxx, Xxxxxx & Xxxxxx LLP, counsel for the
Trustee, addressed to Barclays Capital, and dated the time of closing and in
form and substance satisfactory to Xxxxxxxx Chance US LLP, counsel for Barclays
Capital, stating that:
(i) The Depositary Trust Agreement (i) has been duly
authorized, executed and delivered by The Bank of New York (ii) constitutes a
valid and binding agreement of the Trustee enforceable against the Trustee in
accordance with its terms, except as enforcement of it may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws of general application relating to or affecting creditors' rights
and general principles of equity;
(ii) the Custodian Agreement dated as of ________,
2005 (the "Custodian Agreement") between the Trustee and the Custodian has been
duly authorized, executed and delivered by the Trustee and constitutes a valid
and binding agreement of the Trustee enforceable against the Trustee in
accordance with its terms, except as enforcement of it may be limited by (i)
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or
similar laws of general application relating to or affecting creditors' rights
and (ii) general principles of equity;
(iii) upon receipt by the Trustee of an initial
deposit of gold in accordance with the Trust Agreement, the Trust (as defined in
the Depositary Trust Agreement) will exist;
(iv) upon delivery by the Trustee of the iShares
against the deposit of gold in accordance with the provisions of the Depositary
Trust Agreement, the iShares will be validly issued and will entitle the
registered holder the iShares to the rights specified in the Trust Agreement;
and
(v) The Bank of New York is a corporation duly
organized and existing under the laws of the State of New York, is validly
existing as a banking organization under the Banking Law of the State of New
York and is a subsisting trust company under the supervision of the New York
State Banking Department, and The Bank of New York has full power and authority
to enter into and perform its obligations under each of the Trust Agreement and
the Custodian Agreement.
(c) The Sponsor shall furnish to Barclays Capital at the
time of closing an opinion of [.], general counsel to the Sponsor, addressed to
Barclays Capital, and dated the time of closing and in form and substance
satisfactory to Xxxxxxxx Chance US LLP, counsel for Barclays Capital, stating
that:
(i) the Sponsor is a national banking association
chartered in the United States, with full corporate power and authority to
conduct its business as described in the Registration Statement and the
Prospectus and to execute and deliver this Agreement;
9
(ii) the Sponsor is duly qualified, validly existing
and in good standing under the laws of its jurisdiction of organization;
(iii) this Agreement has been duly authorized,
executed and delivered by the Sponsor;
(iv) the execution, delivery and performance of this
Agreement by the Sponsor, the issuance and delivery of the iShares by the Trust
and the consummation by the Sponsor of the transactions contemplated hereby do
not and will not conflict with, result in any breach or violation of or
constitute a default under (nor constitute any event which with notice, lapse of
time or both would result in any breach or violation of or constitute a default
under) the constitutive documents of the Sponsor or the Depositary Trust
Agreement, or any indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any license, lease, contract or
other agreement or instrument known to such counsel after reasonable (based on a
certificate of an officer of the Sponsor) investigation to which the Sponsor is
a party or by which any of its properties may be bound or affected, or any
federal, or New York State law, regulation or rule or any decree, judgment or
order applicable to the Sponsor and known to such counsel;
(v) to such counsel's knowledge, the Sponsor is not
in material breach or material violation of or in material default under (nor
has any event occurred which with notice, lapse of time, or both would result in
any material breach or material violation of or material default under), its
constitutive documents, or any federal or New York State law, regulation or rule
applicable to the Sponsor; and
(vi) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending, or threatened to
which the Sponsor is or would be a party or to which any of its properties is or
would be subject at law or in equity, before or by any federal, state, local or
foreign governmental or regulatory commission, board, body, authority or agency
which are required to be described in the Registration Statement or the
Prospectus but are not so described.
(d) No Prospectus or amendment or supplement to the
Registration Statement or the Prospectus shall have been filed to which Barclays
Capital objects in writing.
(e) The Registration Statement shall have been declared
effective.
(f) Prior to the time of closing, (i) no stop order with
respect to the effectiveness of the Registration Statement shall have been
issued under the Act or proceedings initiated under Section 8(d) or 8(e) of the
Act, (ii) the Registration Statement and all amendments thereto shall not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (iii) the Prospectus and all amendments or supplements thereto
shall not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they are made, not
misleading.
(g) Between the time of execution of this Agreement and the
time of closing, no material adverse change or any development involving a
prospective material adverse change in the management or financial condition of
the Sponsor shall occur or become known.
(h) The Sponsor will, at the time of closing, deliver to
Barclays Capital an officer's certificate of the Chief Executive Officer and its
Chief Financial Officer in the form attached as Exhibit A hereto.
10
(i) The Sponsor and the Trustee shall each have furnished to
Barclays Capital such other documents and certificates as to the accuracy and
completeness of any statement in the Registration Statement and the Prospectus
as of the time of closing, as Barclays Capital may reasonably request; provided,
that in the case of the Trustee, such certificate shall be in the form attached
as Exhibit B hereto.
(j) The iShares shall have been approved for listing on the
American Stock Exchange, subject only to notice of issuance at or prior to the
time of closing.
In the event that any of the foregoing conditions precedent have not
been met or waived within the time indicated in the opening paragraph of Section
6 hereof, Barclays Capital may in its sole discretion elect to surrender the
Purchased Shares to the Trust for redemption in compliance with the provisions
of the Depositary Trust Agreement, and upon receipt by Barclays Capital of the
Initial Deposit and any expenses payable to Barclays Capital pursuant to Section
5 of this Agreement, this Agreement shall be of no further force and effect and
all obligations of the parties hereunder shall be discharged; provided, that
obligations of the parties arising under Section 4(k), 5 and 9 shall survive the
termination of this Agreement.
7. Subsequent Offer and Resale of the iShares. The Initial
Purchaser represents, warrants and agrees that subsequent offers and resales of
the iShares will be made in compliance with applicable laws and regulations of
each jurisdiction in which such offer or sale takes place and, in particular,
that:
(a) the offering of the iShares will be made on a private
placement basis in Canada (in the provinces of British Columbia, Ontario and
Quebec) (1) through the Initial Purchaser or its affiliates who are permitted
under applicable securities laws or available exemptions to offer and sell the
iShares in Canada; (2) solely to purchasers who are entitled under applicable
provincial securities laws to purchase the iShares without the benefit of a
prospectus qualified under the securities laws; and (3) in the case of
purchasers in provinces other than Ontario, without the services of a dealer
registered pursuant to those securities laws;
(b) the offering and sale of iShares in Japan can only be
effected through a licensed Commodity Investment Dealer ("shohin toushi hanbai
gyosha") or a person exempt under the law Concerning Regulations of Commodities
Investment Business (Commodities Law). The Prospectus cannot be distributed in
Japan other than to a licensed Commodity Investment Dealer or a person exempt
under the Commodities Law;
(c) the offering and sale of iShares in Switzerland will be
on the basis of a non-public offering. The Prospectus does not constitute a
prospectus according to articles 652a or 1156 of the Swiss Federal Code of
Obligations and the iShares may not be offered or distributed on a professional
basis in or from Switzerland and neither the Prospectus nor any other offering
material relating to the iShares may be publicly issued in connection with any
such offer or distribution. The iShares have not been and will not be approved
by any Swiss regulatory authority. In particular, neither the iShares nor the
trust are or will be supervised by the Swiss Federal Banking Commission, and
investors may not claim protection under the Swiss Investment Fund Act;
(d) the Trust is a collective investment scheme as defined
in the Financial Services and Markets Act. 2000. The Trust has not been
authorized, or otherwise recognized or approved, by the Financial Services
Authority and, as an unregulated scheme, it accordingly cannot be promoted in
the United Kingdom to the general public. The Initial Purchaser will promote the
Trust in the United Kingdom in accordance with applicable law and regulation
only to (1) persons who are investment
11
professionals (as defined in Article 14(5) of the Financial Services and Markets
Xxx 0000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001
(the "CIS Order")); (2) persons who are within any of the categories of persons
described in Article 22 of the CIS Order; or (3) persons to whom the Prospectus
may otherwise lawfully be communicated;
(e) the Prospectus has not been registered as a prospectus
with the Monetary Authority of Singapore under the Securities and Futures Act,
Chapter 289 of Singapore (the "SFA"). Accordingly, the Prospectus and any other
document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the iShares may not be circulated or distributed,
nor may the iShares be offered or sold, or be made the subject of an invitation
for subscription or purchase, whether directly or indirectly, to the public or
any member of the public in Singapore other than (i) to an institutional
investor or other person specified in Section 274 of the SFA, (ii) to a
sophisticated investor, and in accordance with the conditions, specified in
Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with
the conditions of, any other applicable provision of the SFA;
(f) it will comply with the Securities Sales Prospectus Act
(Wertpapier-Verkaufsprospektgesetz, the "WV Act") of the Federal Republic of
Germany and all other applicable legal and regulatory requirements. In
particular, the Initial Purchaser has not engaged and will not engage in a
public offering (offentliches Angebot) within the meaning of the WV Act with
respect to any iShares otherwise than in accordance with the WV Act;
(g) the iShares may not be offered, sold or distributed in
Spain save in compliance with the requirements of the Spanish Securities Market
Law (Ley 00/0000, xx 00 xx xxxxx, xxx Xxxxxxx xx Xxxxxxx), as amended and
restated, and Royal Decree 291/1992 on Issues and Public Offerings of Securities
(Real Decreto 291/1992, de 27 de marzo, sobre Emisiones y Ofertas Publicas de
Venta de Valores), as amended and restated, and other applicable Spanish laws
and regulations;
(h) the iShares may not be acquired by or offered, directly
or indirectly to, individuals or entities in the Netherlands and the Prospectus
may not be circulated in the Netherlands as part of initial distribution or at
any time thereafter, except to individuals or entities whose ordinary business
or profession is (1) to trade or invest in securities or (2) involves the
acquisition and disposal of investment objects of the same kind as the assets or
a substantial part of the assets of the trust, in either case within the meaning
of Article 1 of the regulation dated October 9, 1990 (as amended) issued
pursuant to Article 14 of the Investment Institutions Supervision Act (Wet
Toezicht Beleggingsinstellingen) of 27 June 1990;
(i) the offering of the iShares has not been registered
pursuant to the Italian securities legislation and, accordingly, the Initial
Purchaser has not offered or sold, and will not offer or sell, any iShares in
the Republic of Italy in a solicitation to the public, and any sales of the
iShares in the Republic of Italy shall be effected in accordance with all
Italian securities, tax and exchange control and other applicable laws and
regulations. The Initial Purchaser will not offer, sell or deliver any iShares
or distribute copies of the Prospectus or any other document relating to the
iShares in the Republic of Italy except: (1) to "Professional Investors", as
defined in Article 31.2 of CONSOB Regulation No. 11522 of 1 July 1998 as amended
("Regulation No. 11522"), pursuant to Article 30.2 and 100 of Legislative Decree
No. 58 of 24 February 1998 as amended ("Decree No. 58"), or in any other
circumstances where an expressed exemption to comply with the solicitation
restrictions provided by Decree No. 58 or CONSOB Regulation No. 11971 of 14 May
1999 as amended applies, provided, however, that any such offer, sale or
delivery of the iShares or distribution of copies of the Prospectus or any other
document relating to the iShares in the Republic of Italy must be: (a) made by
investment firms, banks or financial intermediaries permitted to conduct such
activities in the Republic of Italy in accordance with Legislative Decree No.
385 of 1 September 1993 as amended ("Decree No. 385"), Decree Xx. 00, Xxxxxxxxxx
Xx. 00000 and any
12
other applicable laws and regulations; and (b) in compliance with any other
applicable notification requirement or limitation which may be imposed by CONSOB
or the Bank of Italy; or (2) if Italian residents submit unsolicited offers to
the Initial Purchaser to purchase the iShares; and
(j) (1) it has not offered or sold and will not offer or
sell in Hong Kong, by means of any document, any iShares other than to persons
whose ordinary business is to buy or sell shares or debentures, whether as
principal or agent, or in circumstances which do not constitute an offer to the
public within the meaning of the Companies Ordinance (Chapter 32 of the Laws of
Hong Kong) and (2) it has not issued and will not issue any advertisement,
invitation or document relating to the iShares, whether in Hong Kong or
elsewhere, which is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if permitted to do so under
the securities laws of Hong Kong) other than with respect to iShares which are
or are intended to be disposed of only to persons outside Hong Kong or only to
"professional investors" within the meaning of the Securities and Futures
Ordinance (Chapter 571 of the Laws of Hong Kong) and any rules made thereunder.
In addition, the Prospectus has not been submitted to the registration
procedures of the French Autorite des Marches Financiers and, accordingly, the
iShares may not be offered or sold to the public in France. Offers and sales of
the iShares in France may be made only to qualified investors (investisseurs
qualifies) in accordance with Article L.411-2 of the French Code Monetaire et
Financier and decree no. 98-880 dated 1 October 1998 (the "French Code"). The
Prospectus or any other offering material relating to the iShares may not be
distributed in France to any person other than a qualified investor, as defined
in the French Code.
8. Termination. The obligations of Barclays Capital hereunder shall
be subject to termination in the absolute discretion of Barclays Capital, if (x)
since the time of execution of this Agreement or the earlier respective dates as
of which information is given in the Registration Statement and the Prospectus,
there has been any material adverse change or any development involving a
prospective material adverse change affecting the Sponsor or the Trust which
would, in Barclays Capital's judgment, make it impracticable or inadvisable to
proceed with the public offering or the delivery of the iShares on the terms and
in the manner contemplated in the Registration Statement and the Prospectus, or
(y) since the time of execution of this Agreement, there shall have occurred (i)
a suspension or material limitation in trading in securities generally on the
American Stock Exchange, the American Stock Exchange or the NASDAQ, (ii) a
suspension or material limitation in trading in the Trust's securities on the
American Stock Exchange, (iii) a general moratorium on commercial banking
activities declared by either federal or New York State authorities or a
material disruption in commercial banking or securities settlement or clearance
services in the United States, (iv) an outbreak or escalation of hostilities or
acts of terrorism involving the United States or a declaration by the United
States of a national emergency or war, or (v) any other calamity or crisis or
any change in financial, political or economic conditions in the United States
or elsewhere, if the effect of any such event specified in clause (iv) or (v) in
Barclays Capital's judgment makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the iShares on the terms and in the
manner contemplated in the Registration Statement and the Prospectus.
If Barclays Capital elects to terminate this Agreement as
provided in this section 8, the Sponsor shall be notified promptly in writing.
If the sale to Barclays Capital of the iShares, as contemplated
by this Agreement, is not carried out by Barclays Capital for any reason
permitted under this agreement or if such sale is not carried out because the
Sponsor shall be unable to comply with any of the terms of this Agreement, the
Sponsor shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(k), 5 and 9 hereof), and Barclays
Capital shall be under no obligation or liability to the
13
Sponsor or the Trust under this agreement (except to the extent provided in
section 9 hereof) or to one another hereunder.
9. Indemnity and Contribution.
(a) The Sponsor agrees to indemnify, defend and hold
harmless Barclays Capital, its partners, directors and officers, and any person
who controls it within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons,
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which Barclays Capital or any such person may
incur under the Act, the Exchange Act, the common law or otherwise, insofar as
such loss, damage, expense, liability or claim arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof) or in a Prospectus (the term
Prospectus for the purpose of this section 9 being deemed to include the
Prospectus and the Prospectus as amended or supplemented by the Sponsor), or
arises out of or is based upon any omission or alleged omission to state a
material fact required to be stated in either such Registration Statement or
such Prospectus or necessary to make the statements made therein not misleading,
except insofar as any such loss, damage, expense, liability or claim arises out
of or is based upon any untrue statement or alleged untrue statement of a
material fact contained in and in conformity with information concerning
Barclays Capital furnished in writing by or on behalf of Barclays Capital to the
Sponsor expressly for use in such Registration Statement or such Prospectus or
arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in such
Registration Statement or such Prospectus or necessary to make such information
not misleading, (ii) any untrue statement or alleged untrue statement made by
the Sponsor in section 3 hereof or the failure by the Sponsor to perform when
and as required any agreement or covenant contained herein, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in any
audio or visual materials provided by the Sponsor or based upon written
information furnished by or on behalf of the Sponsor or the Trust including,
without limitation, slides, videos, films or tape recordings used in connection
with the marketing of the iShares. The Sponsor shall not be liable under this
section 9(a) for any loss, damage, expense, liability or claim which may be
incurred by Barclays Capital to the extent that such loss, damage, expense,
liability or claim is caused by the failure by Barclays Capital to deliver any
subsequent Prospectus as required.
If any action, suit or proceeding (each, a "Proceeding") is
brought against Barclays Capital or any such person in respect of which
indemnity may be sought against the Sponsor pursuant to the foregoing paragraph,
Barclays Capital or such person shall promptly notify the Sponsor in writing of
the institution of such Proceeding and the Sponsor shall assume the defense of
such Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided, however,
that the omission to so notify the Sponsor shall not relieve the Sponsor from
any liability which the Sponsor may have to Barclays Capital or any such person
except to the extent that the Sponsor has been materially prejudiced by such
failure and has not otherwise learned of such proceeding. Barclays Capital or
such person shall have the right to employ its or their own counsel in any such
case, but the fees and expenses of such counsel shall be at the expense of
Barclays Capital or of such person unless the employment of such counsel shall
have been authorized in writing by the Sponsor in connection with the defense of
such Proceeding or the Sponsor shall not have, within a reasonable period of
time in light of the circumstances, employed counsel to have charge of the
defense of such proceeding or such indemnified party or parties shall have
reasonably concluded that there may be defenses available to it or them which
are different from, additional to or in conflict with those available to the
Sponsor (in which case the Sponsor shall not have the right to direct the
defense of such Proceeding on behalf of the indemnified party or parties), in
any of which events such fees and expenses shall be borne by the Sponsor and
paid as incurred (it being understood, however, that the Sponsor shall not be
liable for the
14
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Sponsor shall not be liable for any settlement of any Proceeding effected
without its written consent but if settled with the written consent of the
Sponsor, the Sponsor agrees to indemnify and hold harmless Barclays Capital and
any such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then 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 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have fully reimbursed the indemnified party in accordance with
such request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days' prior notice of
its intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
(b) Barclays Capital agrees to indemnify, defend and hold
harmless each of the Sponsor, its directors and officers, and any person who
controls the Sponsor or the Trust within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act, and the successors and assigns of all of the
foregoing persons, from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Sponsor, the Trust or any such person may incur under the Act,
the Exchange Act, the common law or otherwise, insofar as such loss, damage,
expense, liability or claim arises out of or is based upon any untrue statement
or alleged untrue statement of a material fact contained in and in conformity
with information furnished in writing by or on behalf of Barclays Capital to the
Sponsor or the Trust expressly for use in the Registration Statement (or in the
Registration Statement as amended by any post-effective amendment thereof) or in
the Prospectus or any amendment to the Prospectus, or arises out of or is based
upon any omission or alleged omission to state a material fact in connection
with such information required to be stated in such Registration Statement or
such Prospectus or necessary to make such information not misleading.
If any Proceeding is brought against the Sponsor or the Trust or
any such person in respect of which indemnity may be sought against Barclays
Capital pursuant to the foregoing paragraph, the Sponsor, the Trust or such
person shall promptly notify Barclays Capital in writing of the institution of
such Proceeding and Barclays Capital shall assume the defense of such
Proceeding, including the employment of counsel reasonably satisfactory to such
indemnified party and payment of all fees and expenses; provided, however, that
the omission to so notify Barclays Capital shall not relieve Barclays Capital
from any liability which Barclays Capital may have to the Sponsor, the Trust or
any such person or otherwise. The Sponsor, the Trust or such person shall have
the right to employ its own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of the Sponsor, the Trust or such person
unless the employment of such counsel shall have been authorized in writing by
Barclays Capital in connection with the defense of such Proceeding or Barclays
Capital shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to defend such Proceeding or such indemnified
party or parties shall have reasonably concluded that there may be defenses
available to it or them which are different from or additional to or in conflict
with those available to Barclays Capital (in which case Barclays Capital shall
not have the right to direct the defense of such Proceeding on behalf of the
indemnified party or parties, but Barclays Capital may employ counsel and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of Barclays Capital), in
15
any of which events such fees and expenses shall be borne by Barclays Capital
and paid as incurred (it being understood, however, that Barclays Capital shall
not be liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). Barclays Capital shall not be liable for any settlement of any such
Proceeding effected without the written consent of Barclays Capital but if
settled with the written consent of Barclays Capital, Barclays Capital agrees to
indemnify and hold harmless the Sponsor, the Trust and any such person from and
against any loss or liability by reason of such settlement. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then 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 60 business days after receipt by such indemnifying party
of the aforesaid request, (i) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (ii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.
(c) If the indemnification provided for in this section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
section 9 or insufficient to hold an indemnified party harmless in respect of
any losses, damages, expenses, liabilities or claims referred to therein, then
each applicable indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Sponsor and the Trust on the one hand and
Barclays Capital on the other hand from the offering of the iShares or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Sponsor and
the Trust on the one hand and of Barclays Capital on the other in connection
with the statements or omissions which resulted in such losses, damages,
expenses, liabilities or claims, as well as any other relevant equitable
considerations. The relative benefits received by the Sponsor and the Trust on
the one hand and Barclays Capital on the other shall be deemed to be in the same
respective proportions as the total proceeds from the offering (net of
underwriting discounts, commissions and fees (if any) but before deducting
expenses) received by the Sponsor and the Trust and the total underwriting
discounts and commissions received by Barclays Capital, bear to the aggregate
public offering price of the iShares. The relative fault of the Sponsor and the
Trust on the one hand and of Barclays Capital on the other shall be determined
by reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates to
information supplied by the Sponsor and the Trust or by Barclays Capital and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, damages, expenses, liabilities and claims
referred to in this subsection shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(d) The Sponsor and Barclays Capital agree that it would not
be just and equitable if contribution pursuant to this section 9 were determined
by pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in subsection (c) above.
Notwithstanding the provisions of this section 9, Barclays Capital shall not be
required to contribute any amount in excess of the amount by which the total
price at which the iShares created by Barclays Capital
16
and distributed to the public were offered to the public exceeds the amount of
any damage which Barclays Capital has otherwise been required to pay by reason
of such untrue statement or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The indemnity and contribution agreements contained in
this section 9 and the covenants, warranties and representations of the Sponsor
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of Barclays Capital, its partners,
directors or officers or any person (including each partner, officer or director
of such person) who controls Barclays Capital within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, or by or on behalf of each of the
Sponsor, its directors or officers or any person who controls the Sponsor or the
Trust within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, and shall survive any termination of this Agreement or the issuance and
delivery of the iShares. The Sponsor and the Trust and Barclays Capital agree
promptly to notify each other of the commencement of any Proceeding against it
and, in the case of the Sponsor and the Trust, against any of the Sponsor's or
the Trust's officers or directors in connection with the issuance and sale of
the iShares, or in connection with the Registration Statement or the Prospectus.
10. Information Furnished by Barclays Capital. The statements set
forth in the last paragraph on the cover page of the Prospectus and the
statements set forth in the bullet points and the second sentence in the fourth
paragraph and the penultimate paragraph under the caption "Plan of Distribution"
in the Prospectus constitute the only information furnished by or on behalf of
Barclays Capital as such information is referred to in Sections 3 and 9 hereof.
11. Notices. Except as otherwise herein provided, all statements,
requests, notices and agreements shall be in writing or by telegram and, if to
Barclays Capital, shall be sufficient in all respects if delivered or sent to
Barclays Capital Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: [.] and,
if to the Sponsor or the Trust, shall be sufficient in all respects if delivered
or sent to the Sponsor at the offices of the Sponsor at Barclays Global
Investors, N.A., 00 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: [.].
12. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
13. Submission to Jurisdiction. The Sponsor irrevocably agrees that
any claim may be instituted in the courts of the State of New York located in
the city and County of New York or in the United States District Court for the
southern District of New York, which courts shall have jurisdiction over the
adjudication of such matters, and the Sponsor consents to the jurisdiction of
such courts and personal service with respect thereto. Each of Barclays Capital
and the Sponsor waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Sponsor agrees that a final judgment
in any such action, proceeding or counterclaim brought in any such court shall
be conclusive and binding upon the Sponsor and may be enforced in any other
courts to the jurisdiction of which the Sponsor is or may be subject, by suit
upon such judgment.
14. Parties at Interest. The Agreement herein set forth has been and
is made solely for the benefit of Barclays Capital and the Sponsor and to the
extent provided in section 9 hereof the controlling
17
persons, partners, directors and officers referred to in section 9, and their
respective successors, permitted assigns, heirs, personal representatives and
executors and administrators. No other person, partnership, association or
corporation (including a purchaser, as such purchaser, from Barclays Capital)
shall acquire or have any right under or by virtue of this Agreement.
15. Counterparts. This Agreement may be signed by the parties in one
or more counterparts which together shall constitute one and the same agreement
among the parties.
16. Successors and Assigns. This Agreement may be assigned only with
the written consent of the parties hereunder and shall be binding upon Barclays
Capital and the Sponsor and the Trust and their successors and permitted assigns
and any successor or assign of any substantial portion of the Sponsor's and the
Trust's and any of Barclays Capital's respective businesses and/or assets.
18
If the foregoing correctly sets forth the understanding between the
Sponsor and Barclays Capital, please so indicate in the space provided below for
that purpose, whereupon this agreement and your acceptance shall constitute a
binding agreement between the Sponsor and Barclays Capital.
Very truly yours,
BARCLAYS GLOBAL INVESTORS, N.A.
By:
-------------------------------------
Name:
Title:
By:
-------------------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written,
on behalf of itself
BARCLAYS CAPITAL INC.
By:
--------------------------------------
Name:
Title:
Acknowledged and accepted
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
Title:
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EXHIBIT A
Officer's Certificate
1. I have reviewed the Registration Statement and the Prospectus.
2. The representations and warranties of the Sponsor and the Trust
as set forth in this Agreement are true and correct as of the date hereof and as
of the time of closing.
3. Each of the Sponsor and the Trust has performed all of its
obligations under this Agreement as are to be performed at or before the time of
closing.
4. The conditions set forth in paragraphs (f) and (g) of section 6
of this Agreement have been met.
Exhibit A-1
EXHIBIT B
TRUSTEE'S CERTIFICATE PURSUANT TO SECTION 6(i) OF THE DISTRIBUTION AGREEMENT
[On the letterhead of the Trustee]
Barclays Capital Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
January [ ], 2005
Dear Sirs,
We refer to the Distribution Agreement dated January 21, 2005 (the "Distribution
Agreement") between Barclays Capital Inc. and Barclays Global Investors, N.A.
and acknowledged by us. Each capitalized term used herein and not otherwise
defined has the meaning ascribed to it in the Distribution Agreement.
Pursuant to section 6(i) of the Distribution Agreement I, [ ], being a duly
authorized officer of the Trustee, hereby certify that:
1. the information contained in the last sentence of the first paragraph under
the heading "The Trustee" in the Registration Statement is true, complete and
accurate in all respects; and
2. the Trustee is not in material breach or material violation of or in
material default under (nor has any event occurred which with notice, lapse of
time, or both, would result in any material breach or material violation of or
material default under):
(a) the Trust Agreement;
(b) the Custodian Agreement;
(c) the Distribution Agreement; or
(d) to my knowledge, any federal or New York State law, regulation or rule
applicable to the Trustee in its capacity as trustee of the Trust.
This letter is governed by and shall be construed in accordance with the laws of
the State of New York.
Yours faithfully,
THE BANK OF NEW YORK
By:
--------------------------
Name:
Title:
Exhibit B-1
