SUB ITEM 77Q1(e)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 29th day of June, 2007
by and between MFS HIGH
INCOME MUNICIPAL TRUST, a StateMassachusetts business trust (the "Trust"),
and MASSACHUSETTS FINANCIAL
SERVICES COMPANY, a StateplaceDelaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide services to the Trust
on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
Article 1. Duties of the Adviser. (a) The Adviser shall
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provide the Trust with such
investment advice and supervision as the latter may from time to time
consider necessary for the proper
supervision of its assets. The Adviser shall act as investment adviser
to the Trust and as such shall
furnish continuously an investment program and shall determine from time to time
what securities or other instruments shall be purchased, sold or exchanged and
what portion of the assets of the Trust shall be held uninvested, subject always
to the restrictions of the Trust's Declaration of Trust, dated January 9, 1989,
and By-Laws, each as amended from time to time (respectively, the "Declaration"
and the "By-Laws"), to the provisions of the Investment Company Act of 1940 and
the Rules, Regulations and orders thereunder and to the Trust's then-current
Prospectus and Statement of Additional Information.
The Adviser also shall exercise voting rights, rights to consent to corporate
actions and any other rights pertaining to the Trust's portfolio securities in
accordance with the Adviser's policies and procedures as presented to the
Trustees of the Trust from time to time. Should the Trustees at any time,
however, make any definite determination as to the investment policy and notify
the Adviser thereof in writing, the Adviser shall be bound by such determination
for the period,
if any, specified in such
notice or until similarly notified that such determination shall be revoked.
(b) The Adviser shall take, on behalf of the Trust, all actions
which it deems necessary to
implement the investment policies determined as provided above, and in
particular to place all orders for the purchase or sale of portfolio securities
or other instruments for the Trust's account with brokers or dealers selected by
it, and to that end, the Adviser is authorized as the agent of the Trust to give
instructions to the Custodian of the Trust as to the deliveries of securities or
other instruments and payments of cash for the account of the Trust. In
connection with the selection of such brokers or dealers and the placing of such
orders, the Adviser is directed to seek for the Trust the
best overall price and execution available from responsible brokerage firms,
taking account of all factors it deems relevant, including by way of
illustration: price; the size of the transaction; the nature of the market for
the security; the amount of the commission; the timing and impact of the
transaction taking into account market prices and trends; the reputation,
experience and financial stability of the broker or dealer involved; and the
quality of services
rendered by the broker or dealer
in other transactions. In fulfilling this requirement, the Adviser 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 Trust to pay a
broker or dealer an amount of commission for effecting a securities transaction
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction, if the Adviser determined 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
Adviser's overall responsibilities
with respect to the Trust and to other clients of the Adviser
as to which the Adviser exercises
investment discretion.
(c) Subject to the general supervision and control of the Trustees of
the Trust and under the terms and conditions set forth in this Agreement, the
Trust acknowledges and agrees that it is contemplated that Adviser may, at its
own expense, select and contract with one or more investment advisers
(Sub-Advisers) to manage the investment operations and composition of the Trust
and render investment advice for the Trust, including the purchase, retention,
and disposition of the investments, securities and cash contained in the Trust,
subject always
to the restrictions of the Trusts
Declaration and the By-Laws, to the provisions of the Investment
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Company Act of 1940 and the Rules,
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Regulations and orders thereunder and to the Trust's then-current Prospectus and
Statement of Additional Information; provided, that any contract with an
Sub-Adviser (a Sub-Advisory Agreement) shall be in compliance with and approved
as required by the Investment Company Act of 1940 and the Rules, Regulations and
orders thereunder or in accordance with exemptive relief granted by the
Securities and Exchange Commission (SEC) under the Investment Company Act of
1940.
(d) Subject always to the direction and control of the Trustee s of the Trust,
Adviser will have (i) overall supervisory responsibility for the general
management and investment of the Trusts assets; (ii) full discretion to select
new or additional Sub-Advisers for the Trust; (iii) full discretion to enter
into and materially modify existing Sub-Advisory Agreements with Sub-Advisers;
(iv) full discretion to terminate and replace any Sub-Adviser; and (v) full
investment discretion to make all determinations with respect to the investment
of the Trusts assets not then managed by an Sub-Adviser.
In connection with Advisers responsibilities herein, Adviser will assess the
Trusts investment focus and will seek to implement decisions with respect to the
allocation and reallocation of the Trusts assets among one or more current or
additional Sub-Advisers from time to time, as Adviser deems appropriate, to
implement the Trusts investment policies determined as provided above. In
addition, Adviser (in conjunction with the Trusts Independent Chief Compliance
Officer) will oversee (or, in the event that the Adviser does not require a
Sub-Advisor to assume responsibility therefore under the Sub-Advisory Agreement,
shall be responsible for) compliance of each Sub-Adviser with the investment
objectives, policies and restrictions of the Trust (or portions of the Trust)
under the management of such Sub-Adviser, and review and report to the Trustees
of the Trust on the performance of each Sub-Adviser. Adviser will furnish, or
cause the appropriate Sub-Adviser(s) to furnish, to the Trust such statistical
information, with respect to the investments that the Trust (or portions of the
Trust) may hold or contemplate purchasing, as the Trust may reasonably request.
Further, Adviser (in conjunction with the Trust's Independent Chief Compliance
Officer) will oversee compliance of each Sub-Adviser with the compliance program
of the Trust (or portions of the Trust) under the management of such
Sub-Adviser, as well as the compliance program of the Sub-Adviser as such
program relates to the Sub-Adviser's management of the Trust. On Adviser's own
initiative, Adviser will apprise, or cause the appropriate Sub-Adviser(s) to
apprise, the Trust of important developments materially affecting the Trust (or
any portion of the Trust that they advise) and will furnish the Trust, from time
to time, with such information as may be appropriate for this purpose. Further,
Adviser agrees to furnish, or cause the appropriate Sub-Adviser(s) to furnish,
to the Trustees of the Trust such periodic and special reports as the Trustees
of the Trust may reasonably request. In addition, Adviser agrees to cause the
appropriate Sub-Adviser(s) to furnish to third-party data reporting services all
currently available standardized performance information and other customary
data as may be appropriate.
(e) Subject to the provisions of Article 6, the Adviser shall
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not be liable for any error of
judgment or mistake of law by any Sub-adviser or for any loss arising out of
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any investment made by any
Sub-adviser or for any act or omission in the execution and management of the
Trust by any Sub-adviser.
Article 2. Allocation of Charges and Expenses. (a) The
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Adviser shall furnish at its own
expense investment advisory and administrative services, office space,
equipment and clerical personnel
necessary for servicing the investments of the Trust and maintaining its
organization, and investment
advisory facilities and executive and supervisory personnel for managing
the investments and effecting
the portfolio transactions of the Trust. The Adviser shall arrange,
if desired by the Trust, for
directors, officers and employees of the Adviser to serve as Trustees,
officers or agents of the Trust
if duly elected or appointed to such positions and subject to their
individual consent and to any
limitations imposed by law.
(b) It is understood that the Trust will pay all of its own expenses
incurred in its operations and
the offering of the Trusts shares, unless specifically provided
otherwise in this Agreement or except
to the extent that the Adviser agrees in a written instrument executed
by the Adviser (specifically
referring to this Article 2(b)) to assume or otherwise pay for
specified expenses of the Trust,
including, without limitation: compensation of Trustees "not affiliated"
with the Adviser; governmental
fees; interest charges; taxes; membership dues in the Investment
Company Institute allocable to the
Trust; fees and expenses of independent auditors, of legal counsel,
and of any transfer agent,
registrar or dividend disbursing agent of the Trust; expenses of
repurchasing and redeeming shares and
servicing shareholder accounts; expenses of preparing, printing and
mailing stock certificates,
shareholder reports, notices, proxy statements and reports to governmental
officers and commissions; brokerage and other expenses connected with the
execution, recording
and settlement of portfolio
security transactions; insurance premiums; fees and expenses of the
custodian for all services to the
Trust, including safekeeping of funds and securities and maintaining
required books and accounts;
expenses of calculating the net asset value of shares of the Trust;
organizational and start up costs;
such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits
or proceedings to which the Trust is a party or otherwise may
have an exposure, and the legal
obligation which the Trust may have to indemnify the Trust's Trustees
and officers with respect
thereto; and expenses relating to the issuance, registration and
qualification of shares of the Trust
and the preparation, printing and mailing of prospectuses for such
purposes (except to the extent that
any Distribution Agreement to which the Trust is a party provides that
another party is to pay some or
all of such expenses).
(c) The payment or assumption by the Adviser of any expenses of the
Trust that the Adviser is not obligated by this Agreement or otherwise to pay or
assume shall no
obligate the Adviser to pay or
assume the same or any similar expenses of the Trust on any subsequent
occasion.
Article 3. Compensation of the Adviser. For the services to be rendered
and the facilities provided, the Trust shall pay to the Adviser an investment
advisory fee computed and paid monthly as set forth in Appendix A attached
hereto. If the Adviser shall serve for
less than the whole of any period
specified in this Article 3, the compensation paid to the Adviser will be
prorated.
Article 4. Additional Services. Should the Trust have occasion
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to request the Adviser or its
affiliates to perform administrative or other additional services not herein
contemplated or to request
the Adviser or its affiliates to arrange for the services of others, the Adviser
or its affiliates will act for the Trust upon request to the best of its
ability, with compensation for the services to be agreed upon with respect to
each such occasion as it arises. No such agreement for additional services shall
expand, reduce or otherwise alter the obligations of the Adviser, or the
compensation that the Adviser is due, under this Agreement.
Article 5. Covenants of the Adviser. The Adviser agrees that it will
not deal with itself, or with the Trustees of the Trust or the Trust's
distributor, if any, as principals in making purchases or sales of securities or
other property for the account of the Trust, except as permitted by the
Investment Company Act of 1940 and any rules, regulations or orders of the
Securities and Exchange Commission thereunder, will not take a long or short
position in the
shares of the Trust except as
permitted by the applicable law, and will comply with all other provisions
of the Declaration and the
By-Laws and the then-current Prospectus and Statement of Additional
Information of the Trust relative to
the Adviser and its directors and officers.
Article 6. Limitation of Liability of the Adviser. The Adviser shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the execution and
management of the Trust, except for willful
misfeasance, bad faith, gross
negligence or reckless disregard of its duties and obligations hereunder.
As used in this Article 6,
the term "Adviser" shall include directors, officers and employees
of the Adviser as well as that
corporation itself.
Article 7. Activities of the Adviser. (a) The Trust acknowledges
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that the services of the
Adviser to the Trust are not exclusive, the Adviser being free to render
investment advisory and/or
other services to others. The Trust further acknowledges that it is
possible that, based on their
investment objectives and policies, certain funds or accounts managed by the
Adviser or its affiliates may at times take investment positions or engage in
investment techniques which are contrary to positions taken or techniques
engaged in on behalf of the Trust. Notwithstanding the foregoing, the Adviser
will at all times endeavor to treat all of its clients in
fair and equitable manner.
(b) The Trust acknowledges that whenever the Trust and one
or more other funds or accounts
advised by the Adviser have available monies for investment, investments
suitable and appropriate for
each shall be allocated in a manner believed by the Adviser to be fair and
equitable to each entity.
Similarly, opportunities to sell securities or other investments shall be
allocated in a manner believed
by the Adviser to be fair and equitable to each entity. The Trust
acknowledges that in some instances
this may adversely affect the size of the position that may be acquired or
disposed of for the Trust.
(c) It is understood that the Trustees, officers and shareholders
of the Trust are or may be
or become interested in the Adviser, as directors, officers, employees, or
otherwise and that directors,
officers and employees of the Adviser are or may become similarly interested in
the Trust, and that the Adviser may be or become interested in the Trust as a
shareholder or otherwise.
Article 8. MFS Name. The Trust acknowledges that the names
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"Massachusetts Financial
Services," "MFS" or any derivatives thereof or logos associated with those names
(collectively, the "MFS Marks") are the valuable property of the Adviser and its
affiliates.
The Adviser grants the Trust a
non-exclusive and non-transferable right and sub-license to use the
MFS Marks only so long as the
Adviser serves as investment adviser to the Trust. The Trust agrees that if the
Adviser for any reason no longer serves as investment adviser to the Trust, and
the Adviser
so requests, that the Trust
promptly shall cease to use the MFS Marks and promptly shall amend its
registration statement to delete
any references to the MFS Marks. Likewise, the Trust agrees that if
the Adviser for any reason no
longer serves as investment adviser to the Trust, and the Adviser so requests,
the Trust promptly shall cease to use the MFS Marks and promptly shall amend its
Declaration of Trust to delete any references to the MFS Marks. The Trust
acknowledges that the Adviser may permit other
clients to use the MFS Marks in
their names or other material. For purposes of this Article, the Trust
shall be deemed to have taken
the required action promptly if such action is taken within 90 days of the
Adviser no longer serving as the investment adviser to the Trust, or from the
date of the Advisers request, as the case may be.
Article 9. Duration, Termination and Amendment of this Agreement.
(a) This Agreement shall
become effective with respect to the Trust on the date first written
above if approved by the
shareholders of the Trust, on the Effective Date for the Trust, as set
forth in Appendix A attached
hereto. Thereafter, this Agreement will remain in effect with respect to
the Trust for a period of two
years from the Trust's Effective Date as set forth in Appendix A, on which date
it will terminate for the Trust unless its continuance is "specifically approved
at least
annually" (i) by the vote of a
majority of the Trustees of the Trust who are not "interested persons"
of the Trust or of the Adviser at
a meeting specifically called for the purpose of voting on such
approval, and (ii) by the Board of
Trustees of the Trust, or by "vote of a majority of the outstanding voting
securities" of the applicable Trust.
(b) This Agreement may be terminated as to the Trust at any time
without the payment of any penalty by the Trustees or by "vote of a majority of
the outstanding voting securities" of the applicable Trust, or by the Adviser,
in each case on not more than sixty
days' nor less than thirty
days' written notice to the other party. This Agreement shall automatically
terminate in the event of
its "assignment".
(c) This Agreement may be amended with respect to the Trust
only if such amendment is in
writing signed by or on behalf of the Trust and the Adviser and is
approved by "vote of a majority of
the outstanding voting securities" of the applicable Trust (if such shareholder
approval is required by the Investment Company Act of 1940).
Article 10. Scope of Trust's Obligations. A copy of the Trusts
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Declaration of Trust is on file with the Secretary of
State of The Commonwealth of Massachusetts. The Adviser acknowledges that
the obligations of or arising
out of this Agreement are not binding upon any of the Trust's Trustees,
officers, employees, agents or shareholders individually, but are binding solely
upon the assets and property of the Trust. If this Agreement is executed by the
Trust, the Adviser further acknowledges that th
assets and liabilities of
the Trust are separate and distinct and that the obligations of or arising out
of this Agreement concerning the Trust are binding solely upon the assets or
property of the Trust and not upon the assets or property of any other Trust.
Article 11. Definitions and Interpretations. The terms
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"specifically approved at least
annually," "vote of a majority of the outstanding voting securities,"
"assignment," "affiliated person,"
and "interested person," when used in this Agreement, shall have the respective
meanings specified, and shall be construed in a manner consistent with, the
Investment
Company Act of 1940 and the rules and
regulations promulgated thereunder. 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 Investment Company Act of 1940, the Investment
Advisers Act of 1940, the Securities Act of 1933, or the Securities Exchange Act
of 1934 (collectively, the "Federal Securities Acts") shall be resolved by
reference to such term or provision of the Federal Securities Acts and to
interpretations
thereof, if any, by United
States federal courts or, in the absence of any controlling decisions of any
such court, by rules or regulations of the Securities and Exchange Commission.
Where the effect of a requirement of the Federal Securities Acts reflected in
any provision of this Agreement is revised by rule or regulation of the
Securities and Exchange Commission, such provisions shall be deemed to
incorporate the effect of such rule or regulation.
Article 12. Record Keeping. The Adviser will maintain records in
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a form acceptable to the Trust and in compliance with
the rules and regulations of the Securities and Exchange Commission, including
but not limited to
records required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the rules
thereunder, which at all times will be the property of the Trust and will be
available for inspection
and use by the Trust.
Article 13. Miscellaneous. (a) This Agreement contains the
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entire understanding and
agreement of the parties with respect to the subject matter hereof.
(b) Headings in this Agreement are for ease of reference only and shall
not constitute a part of the Agreement.
(c) Should any portion of this Agreement for any reason be
held void in law or equity, the
remainder of the Agreement shall be construed to the extent possible as
if such voided portion had never
been contained herein.
(d) This Agreement shall be governed by the laws of the
Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions
thereof, except that questions
of interpretation shall be resolved in accordance with the provisions of
Article 11 above.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered
in their names and on their behalf by the undersigned officers thereunto
duly authorized, all as of the
day and year first above written. The undersigned officer of the Trust
has executed this Agreement not
individually, but as an officer under the Declaration and the obligations
of this Agreement are not
binding upon any of the Trustees, officers or shareholders of the Trust,
individually, but bind only the trust estate.
MFS HIGH INCOME MUNICIPAL TRUST
By: XXXX X. POLEBAUM______
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Name: Xxxx X. Xxxxxxxx
Title: Secretary
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By:_ROBERT J. MANNING_
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Name: Xxxxxx X. Xxxxxxx
xxxx: Chief Executive Officer
Appendix A
Compensation to the Adviser
The investment advisory fee payable by the Trust shall be computed and paid
monthly in an amount equal to the sum of 0.75% of the Trust's average daily net
assets including assets applicable to the auction preferred shares (average
daily net assets being computed for this
purpose without deducting any
liability for money borrowed for investment in accordance with the Trusts
investment objective and policies).
