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EXHIBIT(g)(3)
FLOATING RATE PORTFOLIO
SUB-SUB-ADVISORY AND SUB-SUB-ADMINISTRATION CONTRACT
BETWEEN
INVESCO SENIOR SECURED MANAGEMENT, INC.
AND
INVESCO (NY), INC.
Contract made as of May 29, 1998, between INVESCO Senior Secured
Management, Inc., a New York corporation ("Sub-Adviser"), and INVESCO (NY),
INC., a California corporation ("Secondary Sub-Adviser").
WHEREAS Sub-Adviser has entered into a Sub-Advisory and
Sub-Administration Contract with A I M Advisors, Inc. ("Adviser") with respect
to Floating Rate Portfolio ("Portfolio"), a closed-end management investment
company registered under the Investment Company Act of 1940, as amended ("1940
Act"); and
WHEREAS Sub-Adviser desires to retain Secondary Sub-Adviser as
sub-sub-adviser and sub-sub-administrator to furnish certain advisory and
administrative services to the Portfolio, and Secondary Sub-Adviser is willing
to furnish such services;
NOW THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. Sub-Adviser hereby appoints Secondary Sub-Adviser as
sub-sub-adviser and sub-sub-administrator of the Portfolio for the period and on
the terms set forth in this Contract. Secondary Sub-Adviser accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties as Sub-Sub-Adviser.
(a) Subject to the supervision of the Portfolio's Board of Trustees
("Board"), Adviser, and the Sub-Adviser, the Secondary Sub-Adviser will provide
a continuous investment program for the Portfolio, including investment research
and management, for a portion of the investments of the Portfolio to be
determined by the Sub-Adviser (the "Sub-Sub-Advised Assets"). The Secondary
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold with respect to the
Sub-Sub-Advised Assets of the Portfolio. The Secondary Sub-Adviser will be
responsible for placing purchase and sell orders for such investments and for
other related transactions. The Secondary Sub-Adviser will provide services
under this Agreement in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's registration statement.
(b) The Secondary Sub-Adviser agrees that, in placing orders with
brokers and dealers, it will attempt to obtain the best net result, in terms of
price and execution.
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Consistent with this obligation, the Secondary Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Portfolio's, Adviser's, Sub-Adviser's or Secondary
Sub-Adviser's other clients with research, analysis, advice and similar
services. The Secondary Sub-Adviser may pay to brokers and dealers, in return
for such research and analysis services, a higher commission or spread than may
be charged by other brokers and dealers, subject to the Secondary Sub-Adviser
determining in good faith that such commission or spread is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Secondary Sub-Adviser to the Portfolio and its other clients and that the total
commissions or spreads paid by the Portfolio will be reasonable in relation to
the benefits to the Portfolio over the long term. In no instance will Portfolio
securities be purchased from or sold to the Secondary Sub-Adviser, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder and any exemptive orders currently in
effect. Whenever the Secondary Sub-Adviser simultaneously places orders to
purchase or sell the same security on behalf of the Portfolio and one or more
other accounts advised by the Secondary Sub-Adviser, such orders will be
allocated as to price and amount among all such accounts in a manner believed to
be equitable to each account. The Portfolio recognizes that in some cases this
procedure may adversely affect the results obtained for the Portfolio.
(c) The Secondary Sub-Adviser will maintain all books and records with
respect to the securities transactions of the Portfolio, and will furnish the
Board, Adviser, and Sub-Adviser with such periodic and special reports as the
Board, Adviser, or Sub-Adviser reasonably may request. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Secondary Sub-Adviser hereby
agrees that all records which it maintains for the Portfolio are the property of
the Portfolio, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Portfolio and which are
required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees
to surrender promptly to the Portfolio any records which it maintains for the
Portfolio upon request by the Portfolio.
(d) The Secondary Sub-Adviser will provide the Board, the Adviser, and
the Sub-Adviser on a regular basis with economic and investment analyses and
reports and make available to the Board, the Adviser, and the Sub-Adviser upon
request any economic, statistical and investment services normally available to
institutional or other customers of the Secondary Sub-Adviser.
3. Duties as Sub-Sub-Administrator. Secondary Sub-Adviser will
administer the affairs of the Portfolio subject to the supervision of the
Portfolio's Board of Trustees ("Board"), the Adviser, the Sub-Adviser, and the
following understandings:
(a) Secondary Sub-Adviser will supervise all aspects of the operations
of the Portfolio, including the oversight of transfer agency and custodial
services except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for control of the conduct of the affairs of the Portfolio.
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(b) At Secondary Sub-Adviser's expense, Secondary Sub-Adviser will
provide the Portfolio with such corporate, administrative and clerical personnel
(including officers of the Portfolio) and services as are reasonably deemed
necessary or advisable by the Board.
(c) Secondary Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the
Portfolio's prospectus, proxy material, tax returns and required reports with or
to the Portfolio's shareholders, the Securities and Exchange Commission and
other appropriate federal or state regulatory authorities.
(d) Secondary Sub-Adviser will provide the Portfolio with, or obtain
for it, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. Further Duties. In all matters relating to the performance of this
Contract, Secondary Sub-Adviser will act in conformity with the Agreement and
Declaration of Trust, By-Laws and Registration Statement of the Portfolio and
with the instructions and directions of the Board and will comply with the
requirements of the 1940 Act, the rules thereunder, and all other applicable
federal and state laws and regulations.
5. Services Not Exclusive. The services furnished by Secondary Sub-
Adviser hereunder are not to be deemed exclusive and Secondary Sub-Adviser shall
be free to furnish similar services to others so long as its services under this
Contract are not impaired thereby. Nothing in this Contract shall limit or
restrict the right of any director, officer or employee of Secondary Sub-
Adviser, who may also be a Trustee, officer or employee of the Portfolio, to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
6. Expenses.
(a) During the term of this Contract, the Portfolio will bear all
expenses not specifically assumed by Secondary Sub-Adviser.
(b) Expenses borne by the Portfolio will include but not be limited to
the following: (i) all direct charges relating to the purchase and sale of
portfolio securities, including the cost (including brokerage commissions, if
any) of securities purchased or sold by the Portfolio and any losses incurred in
connection therein; (ii) fees payable to and expenses incurred on behalf of the
Portfolio by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Portfolio; (v) costs incurred in
connection with the issuance, sale or repurchase of the Portfolio's shares of
beneficial interest; (vi) filing fees and expenses relating to the registration
and qualification for the Portfolio's shares and the Portfolio under federal
and/or state securities laws and maintaining such registrations and
qualifications; (vii) expenses of preparing and filing
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reports and other documents with governmental and regulatory agencies; (viii)
fees and salaries payable to the Portfolio's Trustees who are not parties to
this Contract or interested persons of any such party ("Independent Trustees");
(ix) all expenses incurred in connection with the Independent Trustees'
services, including travel expenses; (x) taxes (including any income or
franchise taxes) and governmental fees; (xi) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds; (xii) any
costs, expenses or losses arising out of a liability of or claim for damages or
other relief asserted against the Portfolio for violation of any law; (xiii)
interest charges; (xiv) legal, accounting and auditing expenses, including legal
fees of special counsel for the Independent Trustees; (xv) charges of
custodians, transfer agents, pricing agents and other agents; (xvi) costs of
preparing share certificates; (xvii) expenses of setting in type, printing and
mailing prospectuses and supplements thereto, reports, notices and proxy
materials for existing shareholders; (xviii) expenses of obtaining and
maintaining securities exchange listing of the Portfolio's shares of beneficial
interest; (xix) any extraordinary expenses (including fees and disbursements of
counsel, costs of actions, suits or proceedings to which the Portfolio is a
party and the expenses the Portfolio may incur as a result of its legal
obligation to provide indemnification to its officers, Trustees, employees and
agents) incurred by the Portfolio; (xx) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (xxi) costs of mailing and tabulating proxies and costs of
meetings of shareholders, the Board and any committees thereof; (xxii) the cost
of investment company literature and other publications provided by the
Portfolio to its Trustees and officers; and (xxiii) costs of mailing, stationery
and communications equipment.
(c) Secondary Sub-Adviser will assume the cost of any compensation for
services provided to the Portfolio received by the officers of the Portfolio and
by the Trustees of the Portfolio who are not Independent Trustees.
(d) The payment or assumption by Secondary Sub-Adviser of any expense
of the Portfolio that Secondary Sub-Adviser is not required by this Contract to
pay or assume shall not obligate Secondary Sub-Adviser to pay or assume the same
or any similar expense of the Portfolio on any subsequent occasion.
7. Compensation.
(a) For the services provided to the Portfolio under this Contract,
Sub-Adviser will pay Secondary Sub-Adviser a fee, computed weekly and paid
monthly, as set forth in Appendix A hereto.
(b) The fee shall be computed weekly and paid monthly to Secondary Sub-
Adviser on or before the last business day of the next succeeding calendar
month.
(c) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to
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the proportion which such period bears to the full month in which such
effectiveness or termination occurs.
8. Limitation of Liability of Secondary Sub-Adviser and
Indemnification. Secondary Sub-Adviser shall not be liable for any costs or
liabilities arising from any error of judgment or mistake of law or any loss
suffered by the Portfolio in connection with the matters to which this Contract
relates except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of Secondary Sub-Adviser in the performance by Secondary
Sub-Adviser of its duties or from reckless disregard by Secondary Sub-Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Secondary Sub-Adviser, who may be or
become a Trustee, officer, employee or agent of the Portfolio, shall be deemed,
when rendering services to the Portfolio or acting with respect to any business
of the Portfolio to be rendering such service to or acting solely for the
Portfolio and not as an officer, partner, employee, or agent or one under the
control or direction of Secondary Sub-Adviser even though paid by it.
9. Duration and Termination.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect unless it has first
been approved (i) by a vote of a majority of the Independent Trustees, cast in
person at a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Portfolio, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Portfolio.
(c) Notwithstanding the foregoing, this Contract may be terminated at
any time, without the payment of any penalty, by vote of the Board or by a vote
of a majority of the outstanding voting securities of the Portfolio on sixty
days' written notice to Secondary Sub-Adviser or by Secondary Sub-Adviser at
any time, without the payment of any penalty, on sixty days' written notice to
the Portfolio. This Contract will automatically terminate in the event of its
assignment.
10. Amendment. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Portfolio's outstanding voting
securities, when required by the 1940 Act.
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11. Governing Law. This Contract shall be construed in accordance with
the laws of the State of Delaware (without regard to Delaware conflict or choice
of law provisions) and the 1940 Act. To the extent that the applicable laws of
the State of Delaware conflict with the applicable provisions of the 1940 Act,
the latter shall control.
12. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first above
written.
INVESCO SENIOR SECURED MANAGEMENT, INC.
Attest: /s/ XXXXXXX X. SILVER By: /s/ XXXXXXX XXXXXXXX
------------------------ --------------------------------------
Xxxxxxx X. Silver Name: Xxxxxxx Xxxxxxxx
Title: Managing Director
INVESCO (NY), INC.
Attest: /s/ XXXXXXX X. SILVER By: /s/ XXXXX X. XXX
------------------------ --------------------------------------
Xxxxxxx X. Silver Name: Xxxxx X. Xxx
Assistant Secretary Title: Chief Legal and Compliance Officer
and Secretary
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APPENDIX A
TO
SUB-SUB-ADVISORY AND SUB-SUB-ADMINISTRATION CONTRACT
The Sub-Adviser shall pay the Secondary Sub-Adviser, as full compensation for
all services rendered and all facilities furnished hereunder, a sub-sub-advisory
fee of 0.48% of the portion of the Portfolio's average daily net assets for the
calendar year that is delegated to the Secondary Sub-Adviser. The Portfolio's
average daily net assets shall be computed in the manner used for the
determination of the Portfolio's net asset value.
