EXHIBIT (2)(g)(2)
AIM FLOATING RATE FUND
SUB-ADVISORY CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO SENIOR SECURED MANAGEMENT, INC.
Contract made as of _______________________, 2000, between A I M
Advisors, Inc., a Delaware corporation ("Adviser"), and INVESCO Senior Secured
Management, Inc., a New York corporation ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration Contract with AIM Floating Rate Fund ("Fund"), a closed-end
management investment company registered under the Investment Company Act of
1940, as amended ("1940 Act"); and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser to furnish
certain advisory services to the Fund, and 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. Adviser hereby appoints Sub-Adviser as sub-adviser of
the Fund for the period and on the terms set forth in this Contract. Sub-Adviser
accepts such appointment and agrees to render the services herein set forth, for
the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision of the Fund's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for the Fund, including investment research and management, with respect
to all securities and investments and cash equivalents of the Fund. The
Sub-Adviser will determine from time to time what securities and investments
will be purchased, retained or sold by the Fund, and the brokers and dealers
through whom trades will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net results in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Fund's, Adviser's, or Sub-Adviser's other clients with
research, analysis, advice and similar services. The Sub-Adviser may pay, in
return for such research and analysis, a higher commission or
spread than may be charged by other brokers and dealers, subject to the
Sub-Adviser's 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 Sub-Adviser to the Fund and its other clients and that the
total commissions or spreads paid by the Fund will be reasonable in relation to
the benefits to the Fund over the long term. In no instance will portfolio
securities be purchased from or sold to the 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 Sub-Adviser simultaneously places orders to purchase or sell the
same security on behalf of the Fund and one or more other accounts advised by
the 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 Fund
recognizes that in some cases this procedure may adversely affect the results
obtained for the Fund.
(c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Fund, and will furnish the Board and Adviser
with such periodic and special reports as the Board or Adviser reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
the Sub-Adviser hereby agrees that all records which it maintains for the Fund
are the property of the Fund, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records which it maintains for the Fund and
which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Fund any records which it maintains
for the Fund upon request by the Fund.
3. Further Duties. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Agreement and Declaration
of Trust, By-Laws and Registration Statement of the Fund 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.
4. Delegation of Sub-Adviser's Duties as Sub-Adviser. With respect to
the Fund, Sub-Adviser may enter into one or more contracts ("Sub-Sub-Advisory
Contracts") with a sub-sub-adviser in which Sub-Adviser delegates to such
sub-sub-adviser the performance of any or all of the services specified in
Paragraph 2 of this Contract, provided that: (i) each Sub-Sub-Advisory Contract
imposes on the sub-sub-adviser bound thereby all the duties and conditions to
which Sub-Adviser is subject with respect to the services under Paragraphs 2 and
3 of this Contract; (ii) each Sub-Sub-Advisory Contract meets all requirements
of the 1940 Act and rules thereunder, and (iii) Adviser shall not enter into a
Sub-Sub-Advisory Contract unless it is approved by the Board prior to
implementation.
5. Services Not Exclusive. The services furnished by Sub-Adviser
hereunder are not to be deemed exclusive and 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
2
Sub-Adviser, who may also be a Trustee, officer or employee of the Fund, 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 Fund will bear all expenses
not specifically assumed by Sub-Adviser.
(b) Expenses borne by the Fund 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 Fund and any losses incurred in connection
therein; (ii) fees payable to and expenses incurred on behalf of the Fund by
Sub-Adviser under this Contract; (iii) investment consulting fees and related
costs; (iv) expenses of organizing the Fund; (v) costs incurred in connection
with the issuance, sale or repurchase of the Fund's shares of beneficial
interest; (vi) filing fees and expenses relating to the registration and
qualification for the Fund's shares and the Fund under federal and/or state
securities laws and maintaining such registrations and qualifications; (vii)
expenses of preparing and filing reports and other documents with governmental
and regulatory agencies; (viii) fees and salaries payable to the Fund'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 Fund 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)
expenses of disbursing dividends and distributions; (xvii) costs of preparing
share certificates; (xviii) expenses of setting in type, printing and mailing
prospectuses and supplements thereto, reports, notices and proxy materials for
existing shareholders; (xix) expenses of obtaining and maintaining securities
exchange listing of the Fund's shares of beneficial interest; (xx) any
extraordinary expenses (including fees and disbursements of counsel, costs of
actions, suits or proceedings to which the Fund is a party and the expenses the
Fund may incur as a result of its legal obligation to provide indemnification to
its officers, Trustees, employees and agents) incurred by the Fund; (xxi) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xxii) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xxiii) the cost of investment company literature and other
publications provided by the Fund to its Trustees and officers; and (xxiv) costs
of mailing, stationery and communications equipment.
(c) The payment or assumption by Sub-Adviser of any expense of the Fund
that Sub-Adviser is not required by this Contract to pay or assume shall not
obligate
3
Sub-Adviser to pay or assume the same or any similar expense of the Fund on any
subsequent occasion.
7. Compensation.
(a) For the services provided to the Fund under this Contract, Adviser
will pay 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 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 the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
8. Limitation of Liability of Sub-Adviser and Indemnification.
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 Fund 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
Sub-Adviser in the performance by Sub-Adviser of its duties or from reckless
disregard by Sub-Adviser of its obligations and duties under this Contract. Any
person, even though also an officer, partner, employee, or agent of Sub-Adviser,
who may be or become a Trustee, officer, employee or agent of the Fund, shall be
deemed, when rendering services to the Fund or acting with respect to any
business of the Fund to be rendering such service to or acting solely for the
Fund and not as an officer, partner, employee, or agent or one under the control
or direction of 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 Fund's outstanding voting securities, when required
by the 1940 Act.
(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, 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 Fund.
4
(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 Fund on sixty days'
written notice to Sub-Adviser or by Sub-Adviser at any time, without the payment
of any penalty, on sixty days' written notice to the Fund. 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 Fund's outstanding voting
securities, when required by the 1940 Act.
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.
5
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.
A I M ADVISORS, INC.
Attest: By:
--------------------------- ---------------------------
Name:
Title:
INVESCO SENIOR SECURED MANAGEMENT, INC.
Attest: By:
--------------------------- ---------------------------
Name:
Title:
6
APPENDIX A
TO
SUB-ADVISORY CONTRACT
The Adviser shall pay the Sub-Adviser, as full compensation for all
services rendered and all facilities furnished hereunder, a sub-advisory fee of
0.48% of the Fund's average daily net assets for the calendar year, computed in
the manner used for the determination of the Fund's net asset value.
7