EXHIBIT 99(H-1)
DISTRIBUTION CONTRACT BETWEEN
GT GLOBAL FLOATING RATE FUND, INC.
AND GT GLOBAL, INC.
THIS DISTRIBUTION CONTRACT, dated as of _________________, 1997 between GT
GLOBAL FLOATING RATE FUND, INC., a Maryland corporation ("Fund"), and GT GLOBAL,
INC., a California corporation ("G.T. Global"), is made with reference to the
following facts:
A. The Fund is a closed-end management investment company.
B. Following an initial subscription period, the Fund's Board of
Directors ("Board") has authorized the continuous offering of the Fund's shares.
C. G.T. Global has the facilities to sell and distribute the shares of
common stock of the Fund.
D. The Fund and G.T. Global desire to enter into a distribution contract
with respect to the shares of the Fund.
NOW, THEREFORE, the parties agree as follows:
1. G.T. Global shall be the exclusive principal underwriter for the sale
of shares of the Fund, except as otherwise provided pursuant to paragraph 20
hereof. The terms "shares of the Fund" or "shares" as used herein shall mean
shares of common stock issued by the Fund.
2. In the sale of shares of the Fund, G.T. Global shall act as agent of
the Fund except in any transaction in which G.T. Global sells such shares as a
dealer to the public, in which event G.T. Global shall act as principal for its
own account.
3. The Fund shall sell shares only through G.T. Global except that the
Fund may at any time:
(a) Issue 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 Fund 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 shares at net asset value to the Fund's shareholders in
connection with the reinvestment
of dividends and other
distributions paid by the Fund;
(c) Issue shares of the Fund at net asset value to Directors,
officers, and employees of the Fund, 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 Dealer 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;
(d) Issue 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 shares of the
Fund, purchasing for such plan;
(e) Issue 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
(f) Sell 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 Fund,
pursuant to paragraph 20 hereof.
4. G.T. Global shall devote its best efforts to the sale of shares of the
Fund. G.T. Global shall maintain a sales organization suited to the sale of
shares of the Fund and shall use its best efforts to effect such sales in
countries as to which the Fund 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 shares for sale and in which
qualifications is required.
5. Within the United States of America, G.T. Global shall offer and sell
shares only to our through such dealers as are members in good standing of the
National Association of Securities Dealers, Inc. ("NASD"), or to persons legally
engaged
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in dealer activities who are exempt from NASD membership in accord with
applicable law. 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 Fund'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 the shares
of a Fund to dealers at such discounts from said public offering price and with
such commissions as are set forth in the Prospectus, and/or in a Dealer
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 the shares of the Fund shall
be the price which is equal to the net asset value per share plus such sales
charge as may be provided for in the Prospectus. Net asset value per share
shall be determined for the 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 shares received by G.T. Global shall, unless rejected
by G.T. Global or the Fund, 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 Fund to withhold shares of the Funds from
sale under paragraph 16 hereof.
9. The Fund or its transfer agent shall be promptly advised of all orders
received, and shall cause shares of the Fund to be issued upon payment received
in accord with policies established by the Fund and G.T. Global.
10. G.T. Global shall adopt and follow procedures as approved by the
officers of the Fund 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.
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11. The compensation for the services of G.T. Global as a principal
underwriter under this Contract shall be the Early Withdrawal Charges, if any,
which are collected on the shares as set forth in the Fund's Prospectus.
12. The Fund agrees to use its best efforts to maintain its registration
as a closed-end management investment company under the 0000 Xxx.
13. The Fund agrees to use its best efforts to maintain an effective
prospectus 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 shares of the Fund use any prospectus, advertising or sales
literature not approved by the Fund 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 Fund 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 shares not approved by the Fund
and its officers.
14. The expense of each printing of each Prospectus and each revisions
thereof or addition thereto deemed necessary by the Fund's officers to meet the
requirements of applicable laws shall be divided between the Fund, G.T. Global
and any other principal underwriter of the shares of the Fund as they may from
time to time agree.
15. The Fund agrees to use its best efforts to qualify and maintain the
qualification of an appropriate number of the shares of the Fund for sale under
the securities laws of such states as G.T. Global and the Fund may approve. Any
such qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. The expense of qualification and maintenance of
qualification shall be borne by the Fund, but G.T. Global shall furnish such
information and other materials relating to its affairs and activities as may be
required by the Fund or its counsel in connection with such qualification.
16. The Fund and G.T. Global acknowledge that each has the right to reject
any order for the purchase of shares for any
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reason. In addition, the Fund may
withhold 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 Fund
determines that such offer or sale is not in the best interest of the Fund. The
Fund 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 shares after a good faith
confirmation by G.T. Global of sales thereof prior to receipt of notice of such
withholding.
17. (a) This Contract may be terminated at any time, without payment of
any penalty, by vote of a majority of the members of the Board of
Directors of the Fund who are not interested persons of the Fund
or by vote of a majority of the outstanding voting securities of
the Fund on thirty (30) days' written notice to G.T. Global, or
by G.T. Global on like notice to the 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 in injunction or other court order suspending
effectiveness of the Registration Statement covering the shares
of the Fund.
(c) This Contract may also be terminated by the Fund upon five (5)
days' written notice to G.T. Global, should the NASD expel G.T.
Global or suspend its membership in that organization.
18. G.T. Global shall inform the Fund 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. Upon sixty (60) days' written notice to G.T. Global, the Fund may from
time to time designate other principal underwriters with respect to areas other
than the North American continent, Hawaii, Puerto Rico and such countries as to
which the Fund 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 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 17, 18 and 19 hereof.
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21. No provision of this Contract shall protect or purport to protect G.T.
Global against any liability to the Fund or holders of shares of the Fund 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 17, 18 or 19 hereof, this Contract shall continue in effect 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
Fund who are not interested persons of the Fund 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 approval;
and (ii) either the Board of Directors of the Fund or a vote of a majority of
the outstanding shares of the Fund 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: GT GLOBAL FLOATING RATE FUND, INC.
___________________ By: _______________________________
Attest: GT GLOBAL, INC.
____________________ By:_______________________________
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