DISTRIBUTION CONTRACT
CLASS A SHARES
BETWEEN G.T. INVESTMENT FUNDS, INC.
AND G.T. GLOBAL FINANCIAL SERVICES, INC.
THIS DISTRIBUTION CONTRACT, dated as of October 22, 1992, between G.T.
GLOBAL INVESTMENT FUNDS, INC., a Maryland corporation ("Company"), and G.T.
GLOBAL FINANCIAL SERVICES, INC., a California corporation ("G.T. Global"), is
made with reference to the following facts:
A. The Company is an open-end management investment company.
B. The Company's Board of Directors ("Board") has established Class A and
Class B shares of certain series of the Company.
C. G.T. Global has the facilities to sell and distribute the Class A
shares of common stock of the various series established from time to time by
the Company that have established Class A shares ("Funds").
D. The Company and G.T. Global desire to enter into a distribution
contract with respect to the Class A shares of the Funds.
NOW, THEREFORE, the parties agree as follows:
1. G.T. Global shall be the exclusive principal underwriter for the sale
of Class A shares of each Fund, except as otherwise provided pursuant to
paragraph 20 hereof. The terms "Class A shares of the Fund" or "Class A shares"
as used herein shall mean Class A shares of common stock issued by the Funds.
2. In the sale of Class A shares of each Fund, G.T. Global shall act as
agent of the Company except in any transaction in which G.T. Global sells such
Class A shares as a dealer to the public, in which event G.T. Global shall act
as principal for its own account.
3. The Company shall sell Class A shares only through G.T. Global except
that the Company may at any time:
(a) Issue Class A shares to any corporation,
association, trust, partnership, or other organization, or its,
or their, security holders, beneficiaries, or members, in
connection with a merger, consolidation, or reorganization to
which the Company is a party, or in connection with the
acquisition of all or substantially all the property and assets
of such corporation, association, trust, partnership, or other
organization;
(b) Issue Class A shares of a Fund at net asset value
to the holders of Class A shares of the other Funds or Class A
shares of other investment companies
managed by G.T. Capital Management, Inc., pursuant to any
exchange or reinvestment option made available as described
in the current Prospectus of the Fund;
(c) Issue Class A shares at net asset value to a
Fund's shareholders in connection with the reinvestment of
dividends and other distributions paid by the Fund;
(d) Issue Class A shares of a Fund at net asset value
to Directors, officers, and employees of the Company, its
investment manager, any principal underwriter of the Company, and
their affiliates, including any trust, pension, profit-sharing,
or other benefit plan established for such persons, registered
representatives and other employees of dealers having Selling
Group Agreements with G.T. Global and with respect to all such
persons listed, their respective spouse, siblings, parents and
children, and to other persons as permitted by applicable rules
adopted by the Securities and Exchange Commission under the
Investment Company Act of 1940 ("1940 Act"), as in effect from
time to time and as described in the current Prospectus of the
Fund;
(e) Issue Class A shares of a Fund at net asset value
to the sponsor organization, custodian or depository of a
periodic or single payment plan, or similar plan for the purchase
of Class A shares of the Fund, purchasing for such plan;
(f) Issue Class A shares of a Fund in the course of
any other transaction specifically provided for in the Prospectus
of the Fund, or upon obtaining the written consent of G.T. Global
thereto; or
(g) Sell Class A shares outside of the North American
continent, Hawaii and Puerto Rico through such other principal
underwriter or principal underwriters as may be designated from
time to time by the Company, pursuant to paragraph 20 hereof.
4. G.T. Global shall devote its best efforts to the sale of Class A
shares of the Funds. G.T. Global shall maintain a sales organization suited
to the sale of Class A shares of the Funds and shall use its best efforts to
effect such sales in countries as to which the Company shall have expressly
waived in writing its right to designate another principal underwriter
pursuant to paragraph 20 hereof, and shall effect and maintain appropriate
qualification to do so in all those jurisdictions in which it sells or offers
Class A shares for sale and in which qualification is required.
5. Within the United States of America, G.T. Global shall offer and
sell Class A shares only to or through such dealers as are members in good
standing of the National Association of Securities Dealers, Inc. ("NASD"), or
to persons legally engaged in dealer activities who are exempt from NASD
membership in accord with applicable law. Class A
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shares of a Fund sold to dealers shall be for resale by such dealers only at
the public offering price set forth in the effective Prospectus relating to
the Fund which is part of the Company's Registration Statement in effect
under the Securities Act of 1933, as amended ("1933 Act"), at the time of
such offer or sale (herein, the "Prospectus"). G.T. Global may sell Class A
shares of a Fund to dealers at such discounts from said public offering price
as are set forth in the Prospectus, and/or in a Dealer or Selling Group
Agreement between G.T. Global and the Dealer, but neither such discounts nor
commissions shall exceed the sales charge or discounts referred to in the
Prospectus.
6. In its sales to dealers, G.T. Global shall use its best efforts to
determine that such dealers are appropriately qualified to transact business
in securities under applicable laws, rules and regulations promulgated by
such national, state, local or other governmental or quasi-governmental
authorities as may in a particular instance have jurisdiction.
7. The applicable public offering price of Class A shares of a Fund
shall be the price which is equal to the net asset value per Class A share
plus such sales charge as may be provided for in the Prospectus. Net asset
value per Class A share shall be determined for a Fund in the manner and at
the time or times set forth in and subject to the provisions of its
Prospectus.
8. All orders for Class A shares received by G.T. Global shall, unless
rejected by G.T. Global or the Company, be accepted by G.T. Global
immediately upon receipt and confirmed at an offering price determined in
accordance with the provisions of the Prospectus and the 1940 Act, and
applicable rules in effect thereunder. G.T. Global shall not hold orders
subject to acceptance nor otherwise delay their execution. In conformity
with the rules of the NASD, G.T. Global shall not accept conditional orders.
The provisions of this paragraph shall not be construed to restrict the right
of the Company to withhold Class A shares of the Funds from sale under
paragraph 16 hereof.
9. The Company or its transfer agent shall be promptly advised of all
orders received, and shall cause shares of Funds to be issued upon payment
received in accord with policies established by the Company and G.T. Global.
10. G.T. Global shall adopt and follow procedures as approved by the
officers of the Company for the confirmation of sales to dealers, the
collection of amounts payable by dealers on such sales, and the cancellation
of unsettled transactions, as may be necessary to comply with the
requirements of the NASD and the 1940 Act, as such requirements may from time
to time exist.
11. The compensation for the services of G.T. Global as a principal
underwriter under this Contract shall be the sales charge, if any, which is
collected on sales of Class A shares. In addition, G.T. Global is entitled
to fees, if any, payable under the Distribution plan adopted pursuant to Rule
12b-1 under the 1940 Act applicable to the Class A shares (the "Class A
Plan").
12. The Company agrees to use its best efforts to maintain its
registration as an open-end management investment company under the 1940 Act.
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13. The Company agrees to use its best efforts to maintain an effective
prospectus relating to each Fund under the 1933 Act, and warrants that such
prospectus will contain all statements required by and will conform with the
requirements of the 1933 Act and the rules and regulations thereunder, and
that no part of any such prospectus, at the time the Registration Statement
of which it is a part is ordered effective, will contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein not misleading. G.T.
Global agrees and warrants that it will not in the sale of Class A shares of
the Funds use any prospectus, advertising or sales literature not approved by
the Company or its officers nor make any untrue statement of a material fact
nor omit the stating of a material fact necessary in order to make the
statements made, in the light of the circumstances under which they are made,
not misleading. G.T. Global agrees to indemnify and hold the Company
harmless from any and all loss, expense, damage and liability resulting from
a breach by G.T. Global of the agreements and warranties in this paragraph,
or from the use of any sales literature, information, statistics or other aid
or device employed in connection with the sale of Class A shares not approved
by the Company and its officers.
14. The expense of each printing of each Prospectus and each revision
thereof or addition thereto deemed necessary by the Company's officers to
meet the requirements of applicable laws shall be divided between the
Company, G.T. Global and any other principal underwriter of the Class A
shares of the Funds as they may from time to time agree.
15. The Company agrees to use its best efforts to qualify and maintain
the qualification of an appropriate number of the Class A shares of each Fund
for sale under the securities laws of such states as G.T. Global and the
Company may approve. Any such qualification may be withheld, terminated or
withdrawn by the Company at any time in its discretion. The expense of
qualification and maintenance of qualification shall be borne by the Company,
but G.T. Global shall furnish such information and other materials relating
to its affairs and activities as may be required by the Company or its
counsel in connection with such qualification.
16. The Company and G.T. Global acknowledge that each has the right to
reject any order for the purchase of Class A shares for any reason. In
addition, the Company may withhold Class A shares from sale in any state or
country temporarily or permanently if, in the opinion of its counsel, such
offer or sale would be contrary to law or if the Board of Directors or the
President or any Vice President of the Company determines that such offer or
sale is not in the best interest of the Company. The Company will give
prompt notice to G.T. Global of any withholding and will indemnify it against
any loss suffered by G.T. Global as a result of such withholding by reason of
non-delivery of Fund Class A shares after a good faith confirmation by G.T.
Global of sales thereof prior to receipt of notice of such withholding.
17. Each Fund shall reimburse G.T. Global for a portion of its
expenditures incurred in providing services under this Contract at the rate
and under the terms specified in the Class A Plan, as such Plan may be
amended from time to time.
18. (a) With respect to any Fund, this Contract may be
terminated at any time, without payment of any penalty, by vote
of a majority of the members of
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the Board of Directors of the Company who are not interested
persons of the Company and have no direct or indirect
financial interest in the operation of the Class A Plan or in
any agreements related to the Class A Plan or by vote of a
majority of the outstanding voting securities of the Company
on thirty (30) days' written notice to G.T. Global, or by G.T.
Global on like notice to the Company. Termination of this
Contract with respect to Class A shares of one Fund shall not
affect its continued effectiveness with respect to Class A
shares of any other Fund.
(b) This Contract may be terminated by either party
upon five (5) days' written notice to the other party in the
event that the Securities and Exchange Commission has issued an
order or obtained an injunction or other court order suspending
effectiveness of the Registration Statement covering the Class A
shares of the Funds.
(c) This Contract may also be terminated by the
Company upon five (5) days' written notice to G.T. Global, should
the NASD expel G.T. Global or suspend its membership in that
organization.
(d) G.T. Global shall inform the Company promptly of
the institution of any proceedings against it by the Securities
and Exchange Commission, the NASD or any state regulatory
authority.
19. This Agreement shall automatically terminate in the event of its
assignment. The term "assignment" shall have the meaning defined in the 1940
Act.
20. With respect to any Fund, upon sixty (60) days' written notice to
G.T. Global, the Company may from time to time designate other principal
underwriters of Class A shares with respect to areas other than the North
American continent, Hawaii, Puerto Rico and such countries as to which the
Company may have expressly waived in writing its right to make such
designation. In the event of such designation, the right of G.T. Global
under this Contract to sell Class A shares in the areas so designated shall
terminate, but this Contract shall remain otherwise in full effect until
terminated in accordance with the provisions of paragraphs 18 and 19 hereof.
21. No provision of this Contract shall protect or purport to protect
G.T. Global against any liability to the Company or holders of Class A shares
of the Funds for which G.T. Global would otherwise be liable by reason of
willful misfeasance, bad faith or negligence.
22. Unless sooner terminated in accordance with the provisions of
paragraphs 18 or 19 hereof, this Contract shall continue in effect with
respect to each Fund for periods of up to one year, but only so long as such
continuance is specifically approved at least annually by (i) vote of a
majority of the Directors of the Company who are not interested persons of
the Company and who have no direct or indirect financial interest in the
Class A Plan or any agreements relating to the Class A Plan, and who are not
parties to this Contract or interested persons of any such party as defined
by the 1940 Act, cast in person at a meeting called for the purpose of voting
on such
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approval; and (ii) either the Board of Directors of the Company or a vote of
a majority of the outstanding Class A shares of the Company as defined by the
1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in duplicate original by their officers thereunder duly authorized
as of the day and year first written above.
Attest: G.T. INVESTMENT FUNDS, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Attest: G.T. GLOBAL FINANCIAL
SERVICES, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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