DISTRIBUTION CONTRACT
CLASS A SHARES
BETWEEN G.T. INVESTMENT PORTFOLIOS, INC.
AND G.T. GLOBAL FINANCIAL SERVICES, INC.
THIS DISTRIBUTION CONTRACT, dated as of March 31, 1993, between G.T.
INVESTMENT PORTFOLIOS, 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 for series of the Company.
C. As of this date, the existing shares of the sole series of the
Company, G.T. Global Dollar Fund ("Fund") are subject to a Distribution Contract
in effect since May 1, 1989, the substance of which is substantially similar to
that of this Contract.
D. As of the close of business of this date all of the publicly issued,
outstanding shares of the Fund are being redesignated as Class A shares of the
Fund.
E. G.T. Global has the facilities to sell and distribute the Class A
shares of common stock of the various Funds established from time to time by the
Company that have established Class A shares.
F. 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
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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 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, if any, 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.
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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 0000 Xxx.
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
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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 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.
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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 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 PORTFOLIOS, INC.
/s/ Xxxxx X. Xxxxxxx By: Xxxxx X. Xxxxx
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Attest: G.T. GLOBAL FINANCIAL
SERVICES, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
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