SUB-ADVISORY AGREEMENT
AGREEMENT made this 28th day of February, 1997, by and between INVESCO
Services, Inc. ("ISI"), a Georgia corporation, and INVESCO REALTY ADVISORS,
INC., a Texas corporation (the "Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO 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, ISI 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, ISI has entered into an Investment Advisory Agreement with the Fund
(the "ISI Investment Advisory Agreement"), pursuant to which ISI 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 ISI to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory services to
those series of the Fund set forth in the appendix hereto, hereinafter referred
to as the "Series") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, ISI and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
ISI 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 ISI 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 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
ISI. 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 ISI, 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 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, ISI 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, ISI 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
rates set forth in the appendix 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 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 ISI Investment
Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund 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, ISI and their affiliates are or may become
interested in the Fund as directors, officers and employees.
