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EXHIBIT 5(c)
AIM SUMMIT FUND, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 18th day of October, 1993, by and between AIM
Summit Fund, Inc., a Maryland corporation (the "Fund"), and A I M Advisors,
Inc., a Delaware corporation (the "Advisor").
RECITALS
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, diversified management investment
company; and
WHEREAS, the Advisor is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment advisor and engages in
the business of acting as an investment advisor, and
WHEREAS, the Fund and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Fund upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for the
Fund and shall, in such capacity, supervise all aspects of the Fund's
operations, including the investment and reinvestment of the cash, securities
or other properties comprising the Fund, subject at all times to the policies
and control of the Fund's Board of Directors. The Advisor shall give the Fund
the benefit of its best judgment, efforts and facilities in rendering its
services as investment advisor.
2. Investment Analysis and Implementation. In carrying out its
obligations under Section I hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Fund;
(b) obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic, foreign or
otherwise, whether affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are included in the Fund or
the activities in which such issuers engage, or with respect to securities
which the Advisor considers desirable for inclusion in the Fund;
(c) determine which issuers and securities shall be represented in the
Fund's investment portfolio and regularly report thereon to the Fund's Board of
Directors; and
(d) formulate and implement continuing programs for the purchases and
sales of the securities of such issuers, and regularly report thereon to the
Fund's Board of Directors;
and take, on behalf of the Fund, all actions which appear to the Fund necessary
to carry into effect such purchase and sale programs and supervisory functions
as aforesaid, including but not limited to the placing of orders for the
purchase and sale of securities for the Fund.
3. Delegation of Responsibilities. Subject to the approval of the Board
of Directors and the shareholders of the Fund, the Advisor may delegate to a
Sub-Advisor certain of its duties enumerated in Section 2 hereof, provided that
the Advisor shall continue to supervise the performance of any such
Sub-Advisor.
4. Control by Board of Directors. Any investment program undertaken by
the Advisor pursuant to this Agreement, as well as any other activities
undertaken by the Advisor on behalf of the Fund, shall at all times be subject
to any directives of the Board of Directors of the Fund.
5. Compliance with Applicable Requirements. In performing its obligations
under this Agreement, the Advisor shall at all times conform to:
(a) all applicable provisions of the 1940 Act and the Advisers Act and
any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the Fund, as the same
may be amended from time to time, under the Securities Act of 1933 and the 1940
Act;
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(c) the provisions of the corporate charter of the Fund, as the same may
be amended from time to time;
(d) the provisions of the by-laws of the Fund, as the same may be amended
from time to time; and
(e) any other applicable provisions of state or federal law.
6. Broker-Dealer Relationships. The Advisor is responsible for all
decisions to buy and sell securities for the Fund, broker-dealer selection, and
negotiation of brokerage commission rates. The Advisor's primary consideration
in effecting a security transaction will be to execution at the most favorable
price. In selecting a broker-dealer to execute each particular transaction, the
Advisor shall take the following into consideration: the best net price
available; the reliability, integrity and financial condition of the
broker-dealer, the size of and difficulty in executing the order, and the value
of the expected contribution of the broker-dealer to the investment performance
of the Fund on a continuing basis. Accordingly, the price to the Fund in any
transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
portfolio execution services offered. Subject to such policies as the Board of
Directors may from time to time determine, the Advisor shall not be deemed to
have acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Fund to pay a broker or
dealer that provides brokerage and research services to the Advisor an amount
of commission for effecting a portfolio investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Advisor determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Advisor's overall responsibilities with
respect to the Fund and to other clients of the Advisor as to which the Advisor
exercises investment discretion. The Advisor is further authorized to allocate
the orders placed by it on behalf of the Fund to such brokers and dealers who
also provide research or statistical material, or other services to the Fund,
to the Advisor, or to any Sub-Advisor. Such allocation shall be in such amounts
and proportions as the Advisor shall determine, and the Advisor shall report on
said allocations regularly to the Board of Directors of the Fund indicating the
brokers to whom such allocations have been made and the basis therefor. In
making decisions regarding broker-dealer relationships, the Advisor may take
into consideration the recommendations of any Sub-Advisor appointed to provide
investment research or advisory services in connection with the Fund, and may
take into consideration any research services provided to such Sub-Advisor by
broker-dealers.
7. Compensation. The Fund shall pay the Advisor, as compensation for
services rendered hereunder, an annual fee, payable monthly, based upon the
following average daily net assets of the Fund:
Net Assets Rate
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First $10 million . . . . . . . . . . . . . . . . . . . 1.00%
Over $10 million to and including $150 million . . . . 0.75%
Over $150 million . . . . . . . . . . . . . . . . . . . 0.625%
The average daily net assets of the Fund shall be determined in the
manner set forth in the corporate charter and registration statement of the
Fund, as amended from time to time.
8. Additional Services. Upon the request of the Fund's Board of
Directors, the Advisor may perform certain accounting, shareholder servicing or
other administrative services on behalf of the Fund which are not required by
this Agreement. Such services will be performed on behalf of the Fund, and the
Advisor may receive from the Fund such reimbursement for costs or reasonable
compensation for such services as may be agreed upon by the Advisor and the
Fund's Board of Directors, based on the finding by the Board of Directors that
the provision of such services by the Advisor is in the best interests of the
Fund and its shareholders. Payment or assumption by the Advisor of any Fund
expense that the Advisor is not otherwise required to pay or assume under this
Agreement shall not relieve the Advisor of any of its obligations to the Fund
nor obligate the Advisor to pay or assume any similar Fund expense on any
subsequent occasion. Such services may include, but are not limited to:
(i) the services of a principal financial officer of the Fund (including
applicable office space, facilities and equipment) whose normal duties consist
of maintaining the financial accounts and books and records of the Fund,
including the review and calculation of daily net asset value and the
preparation of tax returns; and the services (including applicable office
space, facilities and equipment) of any of the personnel operating under the
direction of such principal financial officer;
(ii) the services of staff to respond to shareholder inquiries concerning
the status of their accounts; providing assistance to shareholders in exchanges
among the mutual funds managed or advised by the Advisor; changing account
designations or changing addresses; assisting in the purchase or redemption of
shares;
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supervising the operations of the custodian, transfer agent(s) or dividend
disbursing agent(s) for the Fund; or otherwise providing services to
shareholders of the Fund; and
(iii) such other administrative services as may be furnished from time to
time by the Advisor to the Fund at the request of the Fund's Board of
Directors.
9. Expenses of the Fund. All of the ordinary business expenses incurred
in the operations of the Fund and the offering of its shares shall be borne by
the Fund unless otherwise specifically provided otherwise in this Agreement.
These expenses borne by the Fund include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing or governmental fees, the cost
of preparing share certificates, custodian, transfer agent and shareholder
service agent costs, expenses of issue, sale, redemption and repurchase of
shares, expenses of registering and qualifying shares for sale, expenses
relating to directors and shareholders meetings, the cost of preparing and
distributing reports and notices to shareholders, the fees and other expenses
incurred by the Fund in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and statements of
additional information distributed to the Fund's shareholders.
10. Expense Limitation. If, for any fiscal year, the total of all
ordinary business expenses of the Fund, including all investment advisory fees,
but excluding brokerage commissions and fees, taxes, interest and extraordinary
expenses, such as litigation, would exceed the applicable expense limitations
imposed by state securities regulations in any state in which the Fund's shares
are qualified for sale, as such limitations may be raised or lowered from time
to time, the aggregate of all such investment advisory fees shall be reduced by
the amount of such excess. The amount of any such reduction to be borne by the
Advisor shall be deducted from the monthly investment advisory fee otherwise
payable to the Advisor during such fiscal year. If required pursuant to such
state securities regulations, the Advisor will, not later than the last day of
the first month of the next succeeding fiscal year, reimburse the Fund for any
such annual operating expenses (after reduction of all investment advisory fees
in excess of such limitation). For purposes of this paragraph, the term "fiscal
year" shall exclude the portion of the current fiscal year which shall have
elapsed prior to the date hereof, and shall include the portion of the then
current fiscal year which shall have elapsed at the date of termination of this
Agreement.
11. Non-Exclusivity. The services of the Advisor to the Fund are not to
be deemed exclusive, and the Advisor shall be free to render investment
advisory and administrative or other services to others (including other
investment Companies) and to engage in other activities. It is understood and
agreed that officers and directors of the Advisor may serve as officers and
directors of the Fund, and that officers and directors of the Fund may serve as
officers and directors of the Advisor, to the extent permitted by law; and that
officers and directors of the Advisor are not prohibited from engaging in any
other business activity or from rendering services to any other person, or from
serving as partners, officers, directors or trustees of any other firm or
trust, including other investment advisory companies.
12. Term and Approval. This Agreement shall become effective if approved
by the shareholders of the Fund, and if so approved, this Agreement shall
thereafter continue in force and effect until June 30, 1994, and may be
continued from year to year thereafter, provided that the continuation of the
Agreement is specifically approved at least annually.
(a) (i) by the Fund's Board of Directors or (ii) by the vote of "a
majority of the outstanding voting securities" of the Fund (as defined under
Section 2(a) (42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the directors of the Fund
who are not parties to this Agreement or "interested persons" (as defined under
the 0000 Xxx) of a party to this Agreement (other than as Fund directors), by
votes cast in person at a meeting specifically called for such purpose.
13. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by vote of the Fund's Board of Directors or by vote
of a majority of the Fund's outstanding voting securities, or by the Advisor,
on sixty (60) days' written notice to the other party. The notice provided for
herein may be waived by either party. This Agreement shall automatically
terminate in the event of its "assignment" (as defined under Section 2(a) (4)
of the 1940 Act).
14. Liability of Advisor. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties
hereunder on the part of the Advisor or any of its officers, directors or
employees, the Advisor shall not be subject to liability to the Fund or to any
shareholder of the Fund for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be sustained in
the purchase, holding or sale of any security.
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15. Indemnification. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of duties hereunder on the part of the
Advisor or any Sub-Advisor appointed pursuant to this Agreement, or any
officers, directors or employees thereof, the Fund hereby agrees to indemnify
and hold harmless the Advisor and/or Sub-Advisor, as the case may be, against
all claims, actions, suits or proceedings at law or in equity, whether or not
brought by a private party or a governmental department, commission, board,
bureau, agency or instrumentality of any kind, arising from the advertising,
solicitation, sale, purchase or pledge of securities, whether of the Fund or
other securities, undertaken by the Fund, its officers, directors, employees or
affiliates, resulting from any violations of the securities laws, rules,
regulations, statutes and codes, whether federal or any state, by the Fund, its
officers, directors, employees or affiliates. It is expressly understood
between the parties that the Sub-Advisor assumes no responsibility or liability
for any of such actions by the Fund conducted in connection with the business
and the activities of the Fund.
16. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered by hand, telecopied or mailed, postage prepaid, to the
other party at such address as such other party may designate for the receipt
of such notice. Until further notice to the other party, it is agreed that the
address of the Fund and that of the Advisor shall be Eleven Xxxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
17. Questions of Interpretation. Questions of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived
from a term or provision of the 1940 Act or the Advisers Act shall be resolved
by reference to such term or provision of the 1940 Act or the Advisers Act and
to interpretations thereof, if any, by the United States Courts or in the
absence of any controlling decision of any such court, by rules, regulations or
orders of the Securities and Exchange Commission issued pursuant to said Acts.
In addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of the Agreement is revised by rule, regulation
or order of the Securities and Exchange Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
18. License Agreement. The Fund shall be entitled to use the name "AIM
Summit Fund, Inc." only so long as A I M Advisors, Inc. serves as investment
manager or advisor to such Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective duly authorized officers on the day
and year first written above.
AIM SUMMIT FUND, INC.
(a Maryland corporation)
Attest:
/s/ XXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXX
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Assistant Secretary President
A I M ADVISORS, INC.
Attest:
/s/ XXXXX X XXXXXX By: /s/ XXXXXX X. XXXXXX
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Assistant Secretary President
(SEAL)
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