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EXHIBIT d(6)
AIM INVESTMENT SECURITIES FUNDS
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 1 day of June, 2000, by and between AIM
Investment Securities Funds, a Delaware business trust (the "Trust") with
respect to its series of shares shown on the Schedule A attached hereto, as the
same may be amended from time to time, and A I M Advisors, Inc., a Delaware
corporation (the "Advisor").
RECITALS
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "l940 Act"), as an open-end, diversified management
investment company;
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;
WHEREAS, the Trust's Amended and Restated Agreement and Declaration of
Trust (the "Declaration of Trust") authorizes the Board of Trustees of the Trust
(the "Board of Trustees") to create separate series of shares of beneficial
interest of the Trust, and as of the date of this Agreement, the Board of
Trustees has created seven separate series portfolios (such portfolios and any
other portfolios hereafter added to the Trust being referred to collectively
herein as the "Funds"); and
WHEREAS, the Trust and the Advisor desire to enter into an agreement to
provide for investment advisory services to the Funds 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 agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor for
the Funds and shall, in such capacity, supervise all aspects of the Funds'
operations, including the investment and reinvestment of cash, securities or
other properties comprising the Funds' assets, subject at all times to the
policies and control of the Board of Trustees. The Advisor shall give the Trust
and the Funds 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 1 hereof, the Advisor shall:
(a) supervise all aspects of the operations of the Funds;
(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 Funds, and whether concerning the individual issuers whose
securities are included in the assets of the Funds or the activities in
which such issuers engage, or with respect to securities which the
Advisor considers desirable for inclusion in the Funds' assets;
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(c) determine which issuers and securities shall be
represented in the Funds' investment portfolios and regularly report
thereon to the Board of Trustees;
(d) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers and regularly
report thereon to the Board of Trustees; and
(e) take, on behalf of the Trust and the Funds, all actions
which appear to the Trust and the Funds 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 Funds.
3. Securities Lending Duties and Fees. The Advisor agrees to provide
the following services in connection with the securities lending activities of
each Fund: (a) oversee participation in the securities lending program to ensure
compliance with all applicable regulatory and investment guidelines; (b) assist
the securities lending agent or principal (the "Agent") in determining which
specific securities are available for loan; (c) monitor the Agent to ensure that
securities loans are effected in accordance with the Advisor's instructions and
with procedures adopted by the Board of Trustees; (d) prepare appropriate
periodic reports for, and seek appropriate approvals from, the Board of Trustees
with respect to securities lending activities; (e) respond to Agent inquiries;
and (f) perform such other duties as necessary.
As compensation for such services provided by the Advisor in connection
with securities lending activities of each Fund, a lending Fund shall pay the
Advisor a fee equal to 25% of the net monthly interest or fee income retained or
paid to the Fund from such activities.
4. Delegation of Responsibilities. The Advisor is authorized to
delegate any or all of its rights, duties and obligations under this Agreement
to one or more sub-advisors, and may enter into agreements with sub-advisors,
and may replace any such sub-advisors from time to time in its discretion, in
accordance with the 1940 Act, the Advisers Act, and rules and regulations
thereunder, as such statutes, rules and regulations are amended from time to
time or are interpreted from time to time by the staff of the Securities and
Exchange Commission ("SEC"), and if applicable, exemptive orders or similar
relief granted by the SEC and upon receipt of approval of such sub-advisors by
the Board of Trustees and by shareholders (unless any such approval is not
required by such statutes, rules, regulations, interpretations, orders or
similar relief).
5. Independent Contractors. The Advisor and any sub-advisors shall for
all purposes herein be deemed to be independent contractors and shall, unless
otherwise expressly provided or authorized, have no authority to act for or
represent the Trust in any way or otherwise be deemed to be an agent of the
Trust.
6. Control by Board of Trustees. 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 Funds, shall at all times be subject
to any directives of the Board of Trustees.
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7. Compliance with Applicable Requirements. In carrying out 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 Trust,
as the same may be amended from time to time under the Securities Act
of 1933 and the 1940 Act;
(c) the provisions of the Declaration of Trust, as the same
may be amended from time to time;
(d) the provisions of the by-laws of the Trust, as the same
may be amended from time to time; and
(e) any other applicable provisions of state, federal or
foreign law.
8. Broker-Dealer Relationships. The Advisor is responsible for
decisions to buy and sell securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates.
(a) The Advisor's primary consideration in effecting a
security transaction will be to obtain the best execution.
(b) In selecting a broker-dealer to execute each particular
transaction, the Advisor will take the following into consideration:
the best net price available; the reliability, integrity and financial
condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Funds on a
continuing basis. Accordingly, the price to the Funds 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 fund execution services offered.
(c) Subject to such policies as the Board of Trustees 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 Funds to pay a
broker or dealer that provides brokerage and research services to the
Advisor an amount of commission for effecting a fund 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 a particular Fund, other Funds of the Trust, 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 Funds to such brokers and
dealers who also provide research or statistical material, or other
services to the Funds, 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 will report on said allocations
regularly to the Board of Trustees indicating the brokers to whom such
allocations have been made and the basis therefor.
(d) With respect to one or more Funds, to the extent the
Advisor does not delegate trading responsibility to one or more
sub-advisors, in making decisions
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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
Funds, and may take into consideration any research services provided
to such sub-advisor by broker-dealers.
(e) Subject to the other provisions of this Section 8, the
1940 Act, the Securities Exchange Act of 1934, and rules and
regulations thereunder, as such statutes, rules and regulations are
amended from time to time or are interpreted from time to time by the
staff of the SEC, any exemptive orders issued by the SEC, and any other
applicable provisions of law, the Advisor may select brokers or dealers
with which it or the Funds are affiliated.
9. Compensation. The compensation that each Fund shall pay the Advisor
is set forth in Schedule B attached hereto.
10. Expenses of the Funds. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares shall
be borne by the Funds unless specifically provided otherwise in this Agreement.
These expenses borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, accounting, auditing, or governmental fees, the cost
of preparing share certificates, custodian, transfer 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
trustees and shareholder meetings, the cost of preparing and distributing
reports and notices to shareholders, the fees and other expenses incurred by the
Trust on behalf of the Funds in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and statements of
additional information distributed to the Funds' shareholders.
11. Services to Other Companies or Accounts. The Trust understands that
the Advisor now acts, will continue to act and may act in the future as
investment manager or advisor to fiduciary and other managed accounts, and as
investment manager or advisor to other investment companies, including any
offshore entities, or accounts, and the Trust has no objection to the Advisor so
acting, provided that whenever the Trust and one or more other investment
companies or accounts managed or advised by the Advisor have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each company and account.
The Trust recognizes that in some cases this procedure may adversely affect the
size of the positions obtainable and the prices realized for the Funds.
12. Non-Exclusivity. The Trust understands that the persons employed by
the Advisor to assist in the performance of the Advisor's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement shall be deemed to limit or restrict the right of the Advisor
or any affiliate of the Advisor to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature. The Trust
further understands and agrees that officers or directors of the Advisor may
serve as officers or trustees of the Trust, and that officers or trustees of the
Trust may serve as officers or directors of the Advisor to the extent permitted
by law; and that the 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.
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13. Effective Date, Term and Approval. This Agreement shall become
effective with respect to a Fund, if approved by the shareholders of such Fund,
on the Effective Date for such Fund, as set forth in Appendix A attached hereto.
If so approved, this Agreement shall thereafter continue in force and effect
until June 30, 2001, 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 Board of Trustees or (ii) by the vote of "a
majority of the outstanding voting securities" of such Fund (as defined
in Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the trustees who
are not parties to this Agreement or "interested persons" (as defined
in the 0000 Xxx) of a party to this Agreement (other than as trustees
of the Trust), by votes cast in person at a meeting specifically called
for such purpose.
14. Termination. This Agreement may be terminated as to the Trust or as
to any one or more of the Funds at any time, without the payment of any penalty,
by vote of the Board of Trustees or by vote of a majority of the outstanding
voting securities of the applicable Fund, or by the Advisor, on sixty (60) days'
written notice to the other party. The notice provided for herein may be waived
by the party entitled to receipt thereof. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
15. Amendment. No amendment of this Agreement shall be effective unless
it is in writing and signed by the party against which enforcement of the
amendment is sought.
16. Liability of Advisor and Fund. 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 Trust or to the
Funds or to any shareholder of the Funds 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. Any liability of
the Advisor to one Fund shall not automatically impart liability on the part of
the Advisor to any other Fund. No Fund shall be liable for the obligations of
any other Fund.
17. Liability of Shareholders. Notice is hereby given that, as provided
by applicable law, the obligations of or arising out of this Agreement are not
binding upon any of the shareholders of the Trust individually but are binding
only upon the assets and property of the Trust and that the shareholders shall
be entitled, to the fullest extent permitted by applicable law, to the same
limitation on personal liability as shareholders of private corporations for
profit.
18. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered, telecopied or mailed postage paid, to the other party
entitled to receipt thereof at such address as such party may designate for the
receipt of such notice. Until further notice to the other party, it is agreed
that the address of the Trust and that of the Advisor shall be 00 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000-0000.
19. Questions of Interpretation. Any question 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
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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 SEC 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 SEC, such provision shall be deemed to incorporate
the effect of such rule, regulation or order. Subject to the foregoing, this
Agreement shall be governed by and construed in accordance with the laws
(without reference to conflicts of law provisions) of the State of Texas.
20. License Agreement. The Trust shall have the non-exclusive right to
use the name "AIM" to designate any current or future series of shares only so
long as A I M Advisors, Inc. serves as investment manager or advisor to the
Trust with respect to such series of shares.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the day and year first
written above.
AIM Investment Securities Funds
(a Delaware business trust)
Attest:
/s/ XXXXXXXX X. XXXXXXXX By: /s/ XXXXX X. XXXXXXX
--------------------------------- --------------------------------
Assistant Secretary Senior Vice President
(SEAL)
Attest: AIM Advisors, Inc.
(a Delaware corporation)
/s/ XXXXXXXX X. XXXXXXXX By: /s/ XXXXX X. XXXXXXX
--------------------------------- --------------------------------
Assistant Secretary Senior Vice President
(SEAL)
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SCHEDULE A
FUNDS AND EFFECTIVE DATES
NAME OF FUND EFFECTIVE DATE OF ADVISORY AGREEMENT
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AIM High Yield Fund June 1, 2000
AIM High Yield Fund II June 1, 2000
AIM Income Fund June 1, 2000
AIM Intermediate Government Fund June 1, 2000
AIM Limited Maturity Treasury Fund June 1, 2000
AIM Money Market Fund June 1, 2000
AIM Municipal Bond Fund June 1, 2000
A-1
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SCHEDULE B
COMPENSATION TO THE ADVISOR
The Trust shall pay the Advisor, out of the assets of a Fund, as full
compensation for all services rendered, an advisory fee for such Fund set forth
below. Such fee shall be calculated by applying the following annual rates to
the average daily net assets of such Fund for the calendar year computed in the
manner used for the determination of the net asset value of shares of such Fund.
AIM HIGH YIELD FUND
NET ASSETS ANNUAL RATE
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First $200 million 0.625%
Next $300 million 0.55%
Next $500 million 0.50%
Amount over $1 billion 0.45%
AIM HIGH YIELD FUND II
NET ASSETS ANNUAL RATE
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First $500 million 0.625%
Next $500 million 0.55%
Amount over $1 billion 0.50%
AIM INCOME FUND
AIM INTERMEDIATE GOVERNMENT FUND
AIM MUNICIPAL BOND FUND
NET ASSETS ANNUAL RATE
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First $200 million 0.50%
Next $300 million 0.40%
Next $500 million 0.35%
Amount over $1 billion 0.30%
B-1
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AIM LIMITED MATURITY TREASURY FUND
NET ASSETS ANNUAL RATE
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First $500 million 0.20%
Amount over $500 million 0.175%
AIM MONEY MARKET FUND
NET ASSETS ANNUAL RATE
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First $1 billion 0.55%
Over $1 billion 0.50%
B-2
