AIM INVESTMENT PORTFOLIOS, INC.
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
AIM INVESTMENT PORTFOLIOS
AND
A I M ADVISORS, INC.
Contract made as of May 29, 1998, between AIM Investment Portfolios,
Inc., a Maryland Corporation ("Company"), and A I M Advisors, Inc., a Delaware
corporation (the "Adviser").
WHEREAS the Company is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as an open-end management investment company,
and offers for public sale shares of AIM Dollar Fund, a series of the
Company's shares of common stock; and
WHEREAS the Company hereafter may establish additional series of its
shares of common stock (any such additional series, together with the
series named in the paragraph immediately preceding, are collectively
referred to herein as the "Funds," and singly may be referred to as a
"Fund"); and
WHEREAS the Company desires to retain Adviser as investment manager and
administrator to furnish certain investment advisory, portfolio management
and administration services to the Company and the Funds, and Adviser is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. APPOINTMENT. The Company hereby appoints Adviser as investment manager
and administrator of each Fund for the period and on the terms set forth in
this Contract. Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Company's Board of Directors
("Board"), Adviser will provide a continuous investment program for each
Fund, including investment research and management with respect to all
securities and investments and cash equivalents of the Fund. Adviser will
determine from time to time what securities and other investments will be
purchased, retained or sold by each Fund, and the brokers and dealers through
whom trades will be executed.
(b) 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 Adviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who sell shares of the Funds or
provide the Funds or Adviser's other clients with research, analysis, advice
and similar services. Adviser may pay to brokers and dealers, in return for
research and analysis, a higher commission or spread than may be charged by
other brokers and dealers, subject to 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 Adviser to the
Funds and its other clients and that the total commissions or spreads paid by
each 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 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 Adviser simultaneously places
orders to purchase or sell the same security on behalf of a Fund and one or
more other accounts advised by 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 Company recognizes that in some cases this procedure may
adversely affect the results obtained for each Fund.
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940
Act, Adviser hereby agrees that all records which it maintains for the
Company are the property of the Company, agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any records which it maintains
for the Company and which are required to be maintained by Rule 31a-1 under
the 1940 Act, and further agrees to surrender promptly to the Company any
records which it maintains for the Company upon request by the Company.
3. DUTIES AS ADMINISTRATOR. Adviser will administer the affairs of each
Fund subject to the supervision of the Board and the following understandings:
(a) Adviser will supervise all aspects of the operations of each Fund,
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 Funds.
(b) At Adviser's expense, Adviser will provide the Company and the
Funds with such corporate, administrative and clerical personnel (including
officers of the Company) and services as are reasonably deemed necessary or
advisable by the Board.
(c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) Adviser will provide the Company and the Funds with, or obtain for
them, 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, Adviser will act in conformity with the Articles of Incorporation,
By-Laws and Registration Statement of the Company 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. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER AND ADMINISTRATOR.
With respect to one or more of the Funds, Adviser may enter into one or more
contracts ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser
or sub-administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii)
each Sub-Advisory and Sub-Administration Contract meets all requirements of
the 1940 Act and rules thereunder, and (iii) Adviser shall not enter into a
Sub-Advisory or Sub-Administration Contract unless it is approved by the
Board prior to implementation.
6. SERVICES NOT EXCLUSIVE. The services furnished by Adviser hereunder are
not to be deemed exclusive and 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 Adviser, who may also be a Director,
officer or employee of the Company, 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.
7. EXPENSES.
(a) During the term of this Contract, each Fund will bear all expenses,
not specifically assumed by Adviser, incurred in its operations and the
offering of its shares.
(b) Expenses borne by each 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 therewith; (ii) fees payable to and expenses incurred on behalf of
the Fund by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Company and the Fund; (v)
expenses of preparing filing reports and other documents with governmental
and regulatory agencies; (vi) filing fees and expenses relating to the
registration and qualification of the Fund's shares and the Company under
federal and/or state securities laws and maintaining such registrations and
qualifications; (vii) costs incurred in
connection with the issuance, sale or repurchase of the Fund's shares of
common stock; (viii) fees and salaries payable to the Company's
Directors who are not parties to this Contract or interested persons of any
such party ("Independent Directors"); (ix) all expenses incurred in connection
with the Independent Directors' 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
Company or 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 Directors; (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, statements of additional information and supplements
thereto, reports, notices and proxy materials for existing shareholders;
(xix) any extraordinary expenses (including fees and disbursements of
counsel, costs of actions, suits or proceedings to which the Company is a
party and the expenses the Company may incur as a result of its legal
obligation to provide indemnification to its officers, Directors, employees
and agents) incurred by the Company or the Fund; (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 Company to its Directors and officers; and
(xxiii) costs of mailing, stationery and communications equipment.
(c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by
Adviser, subject to the Board's supervision.
(d) Adviser will assume the cost of any compensation for services
provided to the Company received by the officers of the Company and by the
Directors of the Company who are not Independent Directors.
(e) The payment or assumption by Adviser of any expense of the Company
or any Fund that Adviser is not required by this Contract to pay or assume
shall not obligate Adviser to pay or assume the same or any similar expense
of the Company or any Fund on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided to a Fund under this Contract, the
Company shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of such Fund as forth in Appendix A attached hereto.
Such compensation shall be paid solely from the assets of such Fund.
(b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to Adviser a fee in an amount to be
agreed upon in a written Appendix to this Contract executed by the Company on
behalf of such Fund and by Adviser.
(c) The fee shall be computed daily and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(d) 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.
9. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser shall
not be liable and each Fund shall indemnify Adviser and its directors,
officers and employees, for any costs or liabilities arising from any error
of judgment or mistake of law or any loss suffered by the Fund or the Company
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 Adviser in the performance by Adviser of its duties or from reckless
disregard by Adviser of its obligations and duties under this Contract. Any
person, even though also an officer, partner, employee, or agent of Adviser,
who may be or become an officer, Director, employee or agent of the Company
shall be deemed, when rendering services to a Fund or the Company or acting
with respect to any business of a Fund or the Company, to be rendering such
service to or acting solely for the Fund or the Company and not as an
officer, partner, employee, or agent or one under the control or direction of
Adviser even though paid by it.
10. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove
written, provided that this Contract shall not take effect with respect to
any Fund unless it has first been approved (i) by a vote of a majority of the
Independent Directors, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of that Fund'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 each Fund 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 Directors, 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 that
Fund.
(c) Notwithstanding the foregoing, with respect to any Fund 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 Adviser or by Adviser
at any time, without the payment of any penalty, on sixty days' written
notice to the Company. Termination of this Contract with respect to one Fund
shall not affect the continued effectiveness of this Contract with respect to
any other Fund. This Contract will automatically terminate in the event of
its assignment.
11. AMENDMENT OF THIS CONTRACT. 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.
12. 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.
13. LICENSE AGREEMENT. The Company shall have the non-exclusive right to
use the name "AIM" to designate any current or future series of shares only
so long as A I M Advisors, Inc. serves as investment manager or adviser to
the Company with respect to such series of shares.
14. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or limit 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.
Attest: AIM INVESTMENT PORTFOLIOS, INC.
▇▇▇▇▇▇▇ ▇. Silver By:
Assistant Secretary Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President and Secretary
Attest: A I M ADVISORS, INC.
By:
Name:
Title:
APPENDIX A
TO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
OF
AIM INVESTMENT PORTFOLIOS, INC.
The Company shall pay the Adviser, out of the assets of a Fund, as full
compensation for all services rendered and all facilities furnished
hereunder, a management fee for such Fund set forth below. Such fee shall be
calculated by applying the following annual rates to the average daily net
assets of such Fund for the calendar year computed in the manner used for the
determination of the net asset value of shares of such Fund.
AIM DOLLAR FUND
ANNUAL RATE
-----------
0.50%
