ITEM 77Q1(e)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 29th day of June, 2007,
by and between MFS CALIFORNIA
INSURED MUNICIPAL FUND, 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
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
August 10, 1999, 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 Advisers 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
Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Trusts 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 Trustees
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 Trusts 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-Advisers
management of the Trust. On Advisers 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
not be liable for any error of
judgment or mistake of law by any Sub-adviser or for any loss arising out of
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 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 not
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
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
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 a 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
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 Trusts 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 Trusts Obligations. A copy of the Trusts
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 Trusts 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
the 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
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 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 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
PlaceTypeplaceCommonwealth ofplaceMassachusetts, 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 theday and year first above
written. The undersigned officer of the Trust has
executed this Agreement notindividually, but as an officer under the
Declaration and the obligations
of this Agreement are notbinding upon any of the Trustees,
officers or shareholders of the Trust,
individually, but bind only the trust estate.
MFS placeplaceCALIFORNIA INSURED
MUNICIPAL FUND By: _MARK N. POLEBAUM_
Name: Xxxx X. Xxxxxxxx
TITLE: Secretary
placeplaceMASSACHUSETTS FINANCIALSERVICES COMPANY
By:_ROBERT X. XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: 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 0.65% of the Trusts 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).
