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EXHIBIT NO. 99.5(o)
FORM OF
SUB-ADVISORY AGREEMENT
MFS RESEARCH INTERNATIONAL FUND
SUB-ADVISORY AGREEMENT, dated this 30th day of December, 1996, by and
between FOREIGN & COLONIAL MANAGEMENT LTD., a company incorporated under the
laws of England and Wales (the "Sub-Adviser"), and FOREIGN & COLONIAL EMERGING
MARKETS LIMITED, a company incorporated under the laws of England and Wales
("FCEM").
WITNESSETH:
WHEREAS, Massachusetts Financial Services Company (the "Adviser")
provides MFS Research International Fund (the "Fund"), a series of MFS Series
Trust I (the "Trust"), an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), business services
pursuant to the terms and conditions of an investment advisory agreement dated
December 30, 1996 (the "Advisory Agreement") between the Adviser and the Trust,
on behalf of the Fund;
WHEREAS, the Sub-Adviser provides services to the Adviser pursuant to
the terms and conditions of a sub-advisory agreement dated December 30, 1996
(the "FCM Sub-Advisory Agreement") between the Adviser and the Sub-Adviser; and
WHEREAS, FCEM is willing to provide services to the Sub-Adviser 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:
1. Duties of FCEM. FCEM will furnish the Sub-Adviser with information
and advice relating to such portion of the Fund's assets as the Adviser,
Sub-Adviser and FCEM shall from time to time mutually designate (the "Designated
Assets"). Subject to the supervision of the Trustees of the Trust, the Adviser
and the Sub-Adviser, FCEM will: (a) manage the Designated Assets on behalf of
the Fund in accordance with the Fund's investment objective, policies and
limitations as stated in the Fund's then current Prospectus (the "Prospectus")
and Statement of Additional Information (the "Statement"), and the Trust's
Amended and Restated Declaration of Trust dated December 14, 1994, as amended,
and Amended and Restated By-Laws, each as from time to time in effect
(respectively, the"Declaration" and the "By-Laws") and in compliance with the
1940 Act and the rules, regulations and orders thereunder; (b) make investment
decisions with respect to the Designated Assets; (c) place purchase and sale
orders for portfolio transactions with respect to the Designated Assets; (d)
manage otherwise uninvested cash assets with respect to the Designated Assets ;
(e) as the agent of the Fund, give instructions (including trade tickets) to the
custodian and any sub-custodian of the Fund as to deliveries of securities,
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transfers of currencies and payments of cash with respect to the Designated
Assets (FCEM shall promptly notify the Adviser and the Sub-Adviser of such
instructions); (f) employ professional portfolio managers to provide research
services to the Fund; (g) attend periodic meetings of the Board of Trustees of
the Trust and (h) obtain all the registrations, qualifications and consents, on
behalf of the Fund, which are necessary for the Fund to purchase and sell assets
in each jurisdiction (other than the United States) in which the Designated
Assets are to be invested (FCEM shall promptly provide the Adviser and the
Sub-Adviser with copies of any such registrations, qualifications and consents).
In providing these services, FCEM will furnish continuously an investment
program with respect to the Designated Assets. FCEM shall be responsible for
monitoring the Fund's compliance with the Prospectus, the Statement, the
Declaration, the By-Laws and the 1940 Act and the rules, regulations and orders
thereunder and in monitoring such compliance FCEM shall do so in the functional
currency of the Fund. FCEM shall only be responsible for compliance with the
above-mentioned restrictions in regards to the Designated Assets. The
Sub-Adviser agrees to provide FCEM with such assistance as may be reasonably
requested by FCEM in connection with its activities under this Agreement,
including, without limitation, information concerning the Fund, its funds
available, or to become available, for investment and generally as to the
conditions of the Fund's affairs.
Should the Trustees of the Trust or the Adviser and the Sub-Adviser at
any time make any determination as to investment policy and notify FCEM thereof
in writing, FCEM shall be bound by such determination for the period, if any,
specified in such notice or until notified that such determination has been
revoked. Further, the Adviser and the Sub-Adviser or the Trustees of the Trust
may at any time, upon written notice to FCEM, suspend or restrict the right of
FCEM to determine what assets of the Fund shall be purchased or sold and what
portion, if any, of the Fund's assets shall be held uninvested. It is understood
that the Adviser and the Sub-Adviser undertake to discuss with FCEM any such
determinations of investment policy and any such suspensions or restrictions on
the right of FCEM to determine what assets of the Fund shall be purchased or
sold or held uninvested, prior to the implementation thereof.
2. Execution of Certain Documents. Subject to any other written
instructions of the Adviser, the Sub-Adviser and the Trustees of the Trust, FCEM
is hereby appointed the Sub-Adviser's and the Trust's agent and attorney-in-fact
to execute account documentation, agreements, contracts and other documents as
FCEM shall be requested by brokers, dealers, counterparties and other persons in
connection with its management of the Designated Assets.
3. Brokerage. In connection with the selections of brokers, dealers or
other entities and the placing of orders for the purchase and sale of portfolio
investments for the Fund with respect to the Designated Assets, FCEM is directed
to seek for the Fund execution at the most favorable price by responsible
brokerage firms at reasonably competitive commission rates. In fulfilling this
requirement, FCEM 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 Fund to pay a broker, dealer or other entity an amount of
commission for effecting a securities transaction in excess of the amount of
commission another broker, dealer or other entity would have charged for
effecting that transaction, if FCEM determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
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services (within the meaning of Section 28(e) of the Securities Exchange Act of
1934, as amended) provided by such broker, dealer or other entity, viewed in
terms of either that particular transaction or FCEM's overall responsibilities
with respect to the Fund and to other clients of FCEM as to which FCEM exercises
investment discretion.
4. Reports. FCEM shall furnish to the Trustees of the Trust, the
Adviser or the Sub-Adviser, or all of them, as may be appropriate, quarterly
reports of its activities on behalf of the Fund, as required by applicable law
or as otherwise requested from time to time by the Trustees of the Trust, the
Adviser or the Sub-Adviser, and such additional information, reports,
evaluations, analyses and opinions as the Trustees of the Trust, the Adviser or
the Sub-Adviser, as appropriate, may request from time to time.
5. Services to Other Companies or Accounts. On occasions when FCEM
deems the purchase or sale of a security to be in the best interest of the Fund
as well as other clients, FCEM, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so purchased or sold in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction will be made by FCEM in the manner it considers to be the most
equitable. FCEM agrees to allocate similarly opportunities to sell or otherwise
dispose of securities among the Fund and other clients of FCEM.
6. Compensation of FCEM. For the services to be rendered by FCEM under
this Agreement, the Sub-Adviser shall pay to FCEM compensation, computed and
paid monthly in arrears, at a rate of 0.12% per annum of the average daily net
asset value of the Fund. If FCEM shall serve for less than the whole of any
month, the compensation payable to FCEM with respect to the Fund will be
prorated. FCEM will pay its expenses incurred in performing its duties under
this Agreement. Neither the Trust, the Adviser nor the Fund shall be liable to
FCEM for the compensation of FCEM. For the purpose of determining fees payable
to FCEM, the value of the Fund's net assets shall be computed at the times and
in the manner specified in the Prospectus and/or Statement. In the event that
the Sub-Adviser reduces its management fee payable under the FCM Sub-Advisory
Agreement in order to comply with the expense limitations of a State securities
commission or otherwise, FCEM agrees to reduce its fee payable under this
Agreement by a pro rata amount.
7. Limitation of Liability of FCEM. FCEM 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
Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties and obligations hereunder. The Trust, on behalf of the
Fund, may enforce any obligations of FCEM under this Agreement and may recover
directly from FCEM for any liability it may have to the Fund.
8. Activities of FCEM. The services of FCEM to the Fund are not deemed
to be exclusive, FCEM being free to render investment advisory and/or other
services to others. It is understood that the Trustees, officers and
shareholders of the Trust, the Fund, the Adviser or the
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Sub-Adviser are or may become interested in FCEM or any person controlling,
controlled by or under common control with FCEM, as trustees, officers,
employees or otherwise and that trustees, officers and employees of FCEM or any
person controlling, controlled by or under common control with FCEM may become
similarly interested in the Trust, the Fund, the Adviser or the Sub-Adviser and
that FCEM may be or become interested in the Fund as a shareholder or otherwise.
9. Covenants of FCEM. FCEM agrees that it (a) will not deal with
itself, "affiliated persons" of FCEM, the Sub-Adviser, the Trustees of the Trust
or the Fund's distributor, as principals, agents, brokers or dealers in making
purchases or sales of securities or other property for the account of the Fund,
except as permitted by the 1940 Act and the rules, regulations and orders
thereunder and subject to the prior written approval of the Adviser, (b) will
not take a long or short position in the shares of the Fund except as permitted
by the Declaration and (c) will comply with all other provisions of the
Declaration and the By-Laws and the then-current Prospectus and Statement
relative to FCEM and its trustees, officers, employees and affiliates.
10. Representations, Warranties and Additional Agreements of FCEM. FCEM
represents, warrants and agrees that:
(a) It: (i) is registered as an investment adviser under the U.S.
Investment Advisers Act of 1940 (the "Advisers Act"), is
authorized to undertake investment business in the United
Kingdom by virtue of its membership in the Investment
Management Regulatory Organisation ("IMRO") and is registered
under the laws of any jurisdiction in which FCEM is required
to be registered as an investment adviser in order to perform
its obligations under this Agreement, and will continue to be
so registered for so long as this Agreement remains in effect;
(ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement;
(iii) has met, and will continue to meet for so long as this
Agreement remains in effect, any other applicable Federal or
State requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be
met in order to perform the services contemplated by this
Agreement; (iv) has the authority to enter into and perform
the services contemplated by this Agreement; (v) will
immediately notify the Adviser and the Sub-Adviser in writing
of the occurrence of any event that would disqualify FCEM from
serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise; and
(vi) will immediately notify the Adviser and the Sub-Adviser
in writing of any change of control of FCEM or any parent of
FCEM resulting in an "assignment" of this Agreement.
(b) It will maintain, keep current and preserve on behalf of the
Fund, in the manner and for the periods of time required or
permitted by the 1940 Act and the rules, regulations and
orders thereunder and the Advisers Act and the rules,
regulations and orders thereunder, records relating to
investment transactions made by FCEM for the Fund as may be
reasonably requested by the Adviser or the Fund from time to
time. FCEM agrees that such records are the property of the
Fund, and will be
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surrendered to the Fund promptly upon request; provided,
however, that FCEM may retain copies of such records for
archival purposes as required by IMRO.
(c) FCEM has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and, if it has
not already done so, will provide the Adviser, the Sub-Adviser
and the Trust with a copy of such code of ethics, and upon any
amendment to such code of ethics, promptly provide such
amendment. At least annually FCEM will provide the Trust, the
Sub-Adviser and the Adviser with a certificate signed by the
chief compliance officer (or the person performing such
function) of FCEM certifying, to the best of his or her
knowledge, compliance with the code of ethics during the
immediately preceding twelve (12) month period, including any
material violations of or amendments to the code of ethics or
the administration thereof.
(d) It has provided the Adviser, the Sub-Adviser and the Trust
with a copy of its Form ADV as most recently filed with the
Securities and Exchange Commission (the "SEC") and will,
promptly after filing any amendment to its Form ADV with the
SEC, furnish a copy of such amendment to the Adviser, the
Sub-Adviser and the Trust.
11. Duration and Termination of this Agreement. This Agreement shall
become effective on the date first above written and shall govern the relations
between the parties hereto thereafter, and shall remain in force until December
30, 1998 and each year thereafter but only so long as its continuance is
"specifically approved at least annually" (a) by the vote of a majority of the
Trustees of the Trust who are not "interested persons" of the Trust, the
Adviser, the Sub-Adviser or FCEM at a meeting specifically called for the
purpose of voting on such approval, and (b) by the Board of Trustees of the
Trust, or by "vote of a majority of the outstanding voting securities" of the
Fund. This Agreement may be terminated at any time without the payment of any
penalty by the Trustees of the Trust, by "vote of a majority of the outstanding
voting securities" of the Fund or by the Adviser or the Sub-Adviser, on not more
than sixty days nor less than thirty days written notice, or by FCEM on not more
than ninety days nor less than sixty days written notice. This Agreement shall
automatically terminate in the event of its "assignment" or in the event that
the FCM Sub-Advisory Agreement or the Advisory Agreement shall have terminated
for any reason.
12. Amendments to this Agreement. This Agreement may be amended only if
such amendment is approved by "vote of a majority of the outstanding voting
securities" of the Fund, by the Adviser, by the Sub-Adviser and by FCEM.
13. Certain Definitions. The terms "specifically approved at least
annually", "vote of a majority of the outstanding voting securities",
"assignment", "control", "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 1940 Act and the rules, regulations
and orders thereunder, subject, however, to such exemptions as may be granted by
the SEC under the 1940 Act.
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14. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by FCEM pursuant to Section
9 hereof shall survive for the duration of this Agreement and FCEM shall
immediately notify, but in no event later than five (5) business days, the
Adviser and the Sub-Adviser in writing upon becoming aware that any of the
foregoing representations and warranties are no longer true.
15. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the internal laws of The Commonwealth of Massachusetts. All
notices provided for by this Agreement shall be in writing and shall be deemed
given when received, against appropriate receipt, by the Sub-Adviser's Secretary
in the case of the Sub-Adviser, by the Adviser's General Counsel in the case of
the Adviser, by FCEM's Secretary in the case of FCEM and by the Trust's
Secretary in the case of the Fund, or such other person as a party shall
designate by notice to the other parties. This Agreement constitutes the entire
agreement among the parties hereto and supersedes any prior agreement among the
parties relating to the subject matter hereof. The section headings of this
Agreement are for convenience of reference and do not constitute a part hereof.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, and their respective seals to be hereto affixed, all
as of the day and year first written above.
FOREIGN & COLONIAL
MANAGEMENT LTD.
By: __________________________
Xxxxx Xxxxxx
By: __________________________
Xxxxxxxx Xxxxxx
FOREIGN & COLONIAL
EMERGING MARKETS
LIMITED
By: __________________________
Audley Twiston Davies
By: __________________________
Xxxxx Xxxxxx
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The foregoing is hereby agreed to:
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of The Commonwealth of Massachusetts. The parties hereto
acknowledge that the obligations of or arising out of this instrument 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 in accordance with its proportionate interest hereunder. If this
instrument is executed by the Trust on behalf of one or more series of the
Trust, the parties hereto acknowledge that the assets and liabilities of each
series of the Trust are separate and distinct and that the obligations of or
arising out of this instrument are binding solely upon the assets or property of
the series on whose behalf the Trust has executed this instrument. If the Trust
has executed this instrument on behalf of more than one series of the Trust, the
parties hereto also agree that the obligations of each series hereunder shall be
several and not joint, in accordance with its proportionate interest hereunder,
and the parties hereto agree not to proceed against any series for the
obligations of another series.
MFS SERIES TRUST I on behalf of
MFS RESEARCH INTERNATIONAL FUND
By: ___________________________________
A. Xxxxx Xxxxxxx
Chairman
MASSACHUSETTS FINANCIAL SERVICES
COMPANY
By: ___________________________________
Xxxxxxx X. Xxxxxx
President
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