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Exhibit 5(c)
AIM INVESTMENT SECURITIES FUNDS
MASTER INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made this 18th day of October, 1993, by and between
AIM Investment Securities Funds, a Delaware business trust (the "Company") and
A I M Advisors, Inc., a Delaware corporation (the "Advisor").
RECITALS
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end, diversified management
investment company, consisting of multiple series of investment portfolios;
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 Company's Agreement and Declaration of Trust authorizes
the Board of Trustees of the Company to issue an unlimited number of shares of
beneficial interest of the Company and to establish additional series or
classes of shares from time to time and, as of the date of this Agreement, the
Company's Board of Trustees has authorized the issuance of two series of shares
representing interests in two investment portfolios: AIM Adjustable Rate
Government Fund and Limited Maturity Treasury Portfolio (AIM Limited Maturity
Treasury Shares and Institutional Shares) (such portfolios and any other
portfolios hereafter added to the Company being referred to collectively herein
as the "Portfolios");
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Advisory Services. The Advisor shall act as investment advisor
for each Portfolio and shall, in such capacity, supervise all aspects of the
Portfolios' operations, including the investment and reinvestment of the cash,
securities or other properties comprising the Portfolios, subject at all times
to the policies and control of the Company's Board of Trustees. The Advisor
shall give the Company and the Portfolios 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
Portfolios;
(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 Company or the Portfolios, and whether concerning the
individual issuers whose securities are included in the Portfolios or
the
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activities in which such issuers engage, or with respect to securities
which the Advisor considers desirable for inclusion in the Portfolios;
(c) determine which issuers and securities shall be
represented in the Portfolios and regularly report thereon to the
Company's Board of Trustees; and
(d) formulate and implement continuing programs for the
purchases and sales of the securities of such issuers, and regularly
report thereon to the Company's Board of Trustees;
and take, on behalf of the Company and the Portfolios, all actions which appear
to the Company and the Portfolios 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 of the
Portfolios.
3. Delegation of Responsibilities. Subject to the approval of the
Board of Trustees and the shareholders of the Portfolios, 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 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 Portfolios, shall at all
times be subject to any directives of the Board of Trustees of the Company.
5. 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
Company, 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 Agreement and Declaration of
Trust of the Company, as the same may be amended from time to time;
(d) the provisions of the by-laws of the Company, 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
decisions to buy and sell securities for the Portfolios, broker-dealer
selection, and negotiation of brokerage commission rates. The Advisor's
primary consideration in effecting a security transaction will be execution at
the most favorable price. In selecting a broker-dealer to execute each
particular transaction, the Advisor will take the following into consideration:
the best net
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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 Portfolios on a continuing basis. Accordingly, the price to the
Portfolios 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 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 Portfolios 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 Portfolios, 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
Portfolios to such brokers and dealers who also provide research or statistical
material, or other services to the Portfolios, 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 of the Company 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 Portfolios, and
may take into consideration any research services provided to such sub-advisor
by broker-dealers.
7. Compensation. The Company shall pay the Advisor as
compensation for services rendered hereunder an annual fee, payable monthly, as
set forth in Appendix A to this Agreement. The Company acknowledges that the
Advisor may from time to time pay a fee to any sub-advisor engage pursuant to
Section 3 of this Agreement, according to a fee schedule set forth in the
applicable sub-advisory agreement.
The average daily net asset value of the Portfolios shall be determined
in the manner set forth in the Agreement and Declaration of Trust and
registration statement relating to the Portfolios, as amended from time to
time.
8. Additional Services. Upon the request of the Company's Board
of Trustees, the Advisor may perform (or arrange for the performance of)
certain accounting, shareholder servicing or other administrative services on
behalf of the Portfolios which are not required by this Agreement. Such
services will be performed on behalf of the Portfolios and the Advisor may
receive from the Portfolios such reimbursement for costs or reasonable
compensation for such services as may be agreed upon between the Advisor and
the Company's Board of Trustees based on a finding by the Board of Trustees
that the provision of such services by the Advisor is in the best interests of
the Portfolios and their shareholders. Payment or assumption by the Advisor of
any Portfolio 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 Portfolios nor obligate the Advisor to pay
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or assume any similar Portfolio expense on any subsequent occasions. Such
services may include, but are not limited to:
(a) the services of a principal financial officer of the
Company (including applicable office space, facilities and equipment)
whose normal duties consist of maintaining the financial accounts and
books and records of the Company and the Portfolios, including the
review and calculation of daily net asset value and the preparation of
tax returns; the services (including applicable office space,
facilities and equipment) of any of the personnel operating under the
direction of such principal financial officer;
(b) 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; supervising the
operations of the custodian, transfer agent(s) or dividend disbursing
agent(s) for the Portfolios; or otherwise providing services to
shareholders of the Portfolios; and
(c) such other administrative services as may be furnished
from time to time by the Advisor to the Company or the Portfolios at
the request of the Company's Board of Trustees.
9. Expenses of the Portfolios. All of the ordinary business
expenses incurred in the operations of the Portfolios and the offering of its
shares shall be borne by the Portfolios unless specifically provided otherwise
in this Agreement. These expenses borne by the Portfolios 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 Company on behalf of the Portfolios in
connection with membership in investment company organizations and the cost of
printing copies of prospectuses and statements of additional information
distributed to the Portfolios' shareholders.
10. Expense Limitation. If, for any fiscal year, the total of all
ordinary business expenses of the Portfolios, 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
Portfolios' 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 Portfolios for any such annual operating expenses
(after reduction of all investment advisory fees in excess of such limitation).
For the purposes of this Section, the term "fiscal year" shall exclude the
portion of the current fiscal
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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. The application of expense limitations shall be
applied to each Portfolio of the Company separately unless the laws or
regulations of any state shall require that the expense limitations be imposed
with respect to the Company as a whole.
11. Non-Exclusivity. The services of the Advisor to the Company
and the Portfolios are not to be deemed to be 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 or directors of the
Advisor may serve as officers or trustees of the Company, and that officers or
trustees of the Company 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.
12. Term and Approval. This Agreement shall become effective if
approved by the shareholders of the Portfolios, 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 Company's Board of Trustees or (ii) by the
vote of "a majority of the outstanding voting securities" of the
Portfolios (as defined in Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the trustees
of the Company 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 Company trustees), by votes cast in person at a meeting
specifically called for such purpose.
13. Termination. This Agreement may be terminated as to the
Portfolios at any time, without the payment of any penalty, by vote of the
Company's Board of Trustees or by vote of a majority of the Portfolios'
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 in Section 2(a)(4) of the 1940 Act).
14. Liability of Advisor and Indemnification. 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 Company or to the Portfolios or to any shareholder of the Portfolios 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.
15. Liability of Shareholders. Copies of the Agreement and
Declaration of Trust establishing the Company are on file with the Secretary of
State of the State of Delaware, and notice is hereby given that, as provided by
applicable law, the obligations of or arising
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out of this Agreement are not binding upon any of the shareholders of the
Company individually but are binding only upon the assets and property of the
Company and that the shareholders shall be entitled, to the fullest extent
permitted by applicable law, to the same limitation on personal liability as
stockholders of private corporations for profit.
16. Notices. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid 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
Company and that of the Advisor shall be Eleven Xxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxx, 00000.
17. 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 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 Company shall be entitled to use the
names "AIM Adjustable Rate Government Fund", "Limited Maturity Treasury
Portfolio" and AIM Limited Maturity Treasury Shares" to designate its series
and classes of shares only so long as A I M Advisors, Inc. serves as investment
manager or advisor to the Portfolios.
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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
Attest:
/s/ XXXXX X. XXXXXX By: /s/ XXXXXXX X. XXXXX
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[Assistant] Secretary President
(SEAL)
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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APPENDIX A TO MASTER INVESTMENT ADVISORY AGREEMENT
OF
AIM INVESTMENT SECURITIES FUNDS
The Company shall pay the Advisor as full compensation for all services
rendered and all facilities furnished hereunder, a management fee for each
Portfolio by applying the following annual rates to the average daily net
assets of each Portfolio for the calendar year, computed in the manner used for
the determination of the offering price of Shares of the Portfolio.
AIM ADJUSTABLE RATE GOVERNMENT FUND
NET ASSETS RATE
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First $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.50%
Over $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.40%
LIMITED MATURITY TREASURY PORTFOLIO
NET ASSETS RATE
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First $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20%
Over $500 million . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.175%
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