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EXHIBIT 5(h)
SUB-ADVISORY AGREEMENT
AGREEMENT made this ____ day of __________, 199_, by and between A I M
Advisors, Inc. ("AIM"), a Delaware corporation, and INVESCO Realty Advisors,
Inc., a Texas corporation (the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, AIM Advisor Funds, Inc. (the "Fund") is engaged in business as
a diversified, open-end management investment company registered under the
Investment Company Act of 1940, as amended (hereinafter referred to as the
"Investment Company Act") which is divided into various series (the "Shares"),
and which may be divided into additional series, each representing an interest
in a separate portfolio of investments; and
WHEREAS, AIM and the Sub-Adviser are engaged principally in rendering
investment advisory services and are registered as investment advisers under
the Investment Advisers Act of 1940; and
WHEREAS, AIM has entered into an Investment Advisory Agreement with the
Fund (the "AIM Investment Advisory Agreement"), pursuant to which AIM is
required to provide investment and advisory services to the Fund's series, and,
upon receipt of written approval of the Fund, is authorized to retain companies
which are affiliated with AIM to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to one of the Fund series, (the AIM Advisor Real Estate Fund,
hereinafter referred to as the "Series") on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, AIM and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
AIM hereby employs the Sub-Adviser to act as investment adviser to the
Series and to furnish the investment advisory services described below, subject
to the broad supervision of AIM and the Board of Directors of the Fund, for the
period and on the terms and conditions set forth in this Agreement. The Sub-
Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be
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an independent contractor and, unless otherwise expressly provided or
authorized herein, shall have no authority to act for or represent the Fund in
any way or otherwise be deemed an agent of the Fund.
The Sub-Adviser hereby agrees to manage the investment operations of the
Series, subject to the supervision of the Fund's directors (the "Directors")
and AIM. Specifically, the Sub-Adviser agrees to perform the following
services:
(a) to manage the investment and reinvestment of all the assets,
now or hereafter acquired, of the Series, and to execute all purchases
and sales of portfolios securities;
(b) to maintain a continuous investment program for the Series,
consistent with (i) the Series' investment policies as set forth in the
Fund's Articles of Incorporation, Bylaws, and Registration Statement, as
from time to time amended, under the Investment Company Act of 1940, and
in any Prospectus and/or Statement of Additional Information of the
Fund, as from time to time amended and in use under the Securities Act
of 1933, as amended, and (ii) the Fund's status as a regulated
investment company under the Internal Revenue Code of 1986, as amended;
(c) to determine what securities are to be purchased or sold for
the Series, unless otherwise directed by the Directors of the Fund or
AIM, and to execute transactions accordingly;
(d) to provide to the Series the benefit of all of the investment
analysis and research, the reviews of current economic conditions and of
trends, and the consideration of long-range investment policy now or
hereafter generally available to investment advisory customers of the
Sub-Adviser;
(e) to determine what portion of the Series should be invested in
the various types of securities authorized for purchase by the Series;
and
(f) to make recommendations as to the manner in which voting
rights, rights to consent to Fund action and any other rights pertaining
to the Series' securities shall be exercised.
With respect to execution of transactions for the Series, the
Sub-Adviser is authorized to employ such brokers or dealers as may, in the
Sub-Adviser's best judgment, implement the policy of the Fund to obtain prompt
and reliable execution at the most favorable price obtainable. In assigning an
execution or negotiating the commission to be paid therefor, the Sub-Adviser is
authorized to consider the full range and quality of a broker's services which
benefit the Fund, including but not limited to research and analytical
capabilities, reliability of performance, sale of Fund shares, and financial
soundness and responsibility. Research services prepared and furnished by
brokers through which the Sub-Adviser effects securities transactions on behalf
of the Series may be used by the Sub-Adviser in servicing all of its accounts,
and not all such services may be used by the Sub-Adviser in connection with the
Fund. In the selection of a broker or dealer for
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execution of any negotiated transaction, the Sub-Adviser shall have no duty or
obligation to seek advance competitive bidding for the most favorable
negotiated commission rate for such transaction, or to select any broker solely
on the basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by
other qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Fund of speed, efficiency, and
confidentiality of execution, the execution capabilities required by the
circumstances of the particular transactions, and the apparent knowledge or
familiarity with sources from or to whom such securities may be purchased or
sold. Where the commission rate reflects services, reliability and other
relevant factors in addition to the cost of execution, the Sub-Adviser shall
have the burden of demonstrating that such expenditures were bona fide and for
the benefit of the Fund. Transactions may be effected through qualified broker-
dealers who recommend the Fund to their clients, or who act as agent in the
purchase of the Fund's shares for their clients. When a number of brokers and
dealers can provide comparable best price and execution on a particular
transaction, the Sub-Adviser may consider the sale of Fund shares by a broker
or dealer in selecting among qualified broker-dealers.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities
necessary to perform its obligations under this Agreement. Except to the extent
expressly assumed by the Sub-Adviser herein and except to the extent required
by law to be paid by the Sub-Adviser, AIM and/or the Fund shall pay all costs
and expenses in connection with the operations of the Series.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, the facilities furnished and expenses assumed
by the Sub-Adviser, AIM shall pay to the Sub-Adviser a fee, computed daily and
paid as of the last day of each month, using for each daily calculation the
most recently determined net asset value of the Series, as determined by a
valuation made in accordance with the Fund's procedures for calculating its net
asset value as described in the Fund's Prospectus and/or Statement of
Additional Information. The advisory fee to the Sub-Adviser shall be computed
at the annual rate indicated in Schedule A hereto. During any period when the
determination of the Series' net asset value is suspended by the Directors of
the Fund, the net asset value of a share of the Series as of the last business
day prior to such suspension shall, for the purpose of this Article III, be
deemed to be the net asset
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value at the close of each succeeding business day until it is again
determined. However, no such fee shall be paid to the Sub-Adviser with respect
to any assets of the Series which may be invested in any other investment
company for which the Sub-Adviser serves as investment adviser or sub-adviser.
The fee provided for hereunder shall be prorated in any month in which this
Agreement is not in effect for the entire month. The Sub-Adviser shall be
entitled to receive fees hereunder only for such periods as the AIM Investment
Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Series are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, AIM and their affiliates are or may become
interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS
AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Series, neither the Sub-Adviser nor any of its directors,
officers or employees will either act as a principal or agent for any party
other than the Series or receive any commissions. The Sub-Adviser will comply
with all applicable laws in acting hereunder including, without limitation, the
Investment Company Act; the Investment Advisers Act of 1940, as amended; and
all rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement having been approved by a majority of the outstanding
voting securities of the Series, shall become effective as of the date so
written above, and shall remain in force for an initial term of two years from
the date of execution, and from year to year thereafter until its termination
in accordance with this Article VI, but only so long as such continuance is
specifically approved at least annually by (i) the Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Series, and
(ii) a majority of those Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such approval.
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This Agreement may be terminated as to any services at any time,
without the payment of any penalty, by AIM, by the Fund by vote of the
Directors of the Fund or by vote of a majority of the outstanding voting
securities of the Series, or by the Sub-Adviser. A termination by AIM or the
Sub-Adviser shall require sixty days' written notice to the other party and to
the Fund, and a termination by the Fund shall require such notice to each of
the parties. This Agreement shall automatically terminate in the event of its
assignment to the extent required by the Investment Company Act and the rules
thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Fund such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the Sub-
Adviser to receive payments on any unpaid balance of the compensation described
in Article III hereof earned prior to such termination.
ARTICLE VII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
AIM. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Fund, including
a majority of the Directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for the purpose
of voting on such amendment, and (2) the vote of a majority of the outstanding
voting securities of the Series (other than an amendment which can be effective
without shareholder approval under applicable law).
ARTICLE VIII
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the rules and
regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
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ARTICLE IX
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of Texas and the applicable provisions of the Investment Company Act. To
the extent that the applicable laws of the State of Texas, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
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ARTICLE X
MISCELLANEOUS
Notice. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed, postage prepaid, to the other party at such address as
such other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define or limit the size, extent or intent of this Agreement or any provision
hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
A I M ADVISORS, INC.
By:
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President
ATTEST:
---------------------------------
Secretary
INVESCO REALTY ADVISORS, INC.
By:
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President
ATTEST:
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Secretary
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SCHEDULE A
TO
XXX SUB-ADVISORY AGREEMENT
Pursuant to Article III of the Sub-Advisory Agreement between A I M and
INVESCO Realty Advisors, Inc.. ("XXX"), fees payable thereunder to the XXX
shall be calculated by applying the following annual rates to the average daily
net assets of the indicated Series:
SERIES ANNUAL FEE RATE
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AIM Advisor Real Estate Fund 0.35% of assets to $100 million;
0.25% of assets in excess of $100 million.
