<PAGE>
Exhibit (h)
Auction Rate Cumulative Preferred Shares
MFS MUNICIPAL INCOME TRUST
2,800 Shares, Series T
2,800 Shares, Series TH
Liquidation Preference $25,000 Per Share
FORM OF UNDERWRITING AGREEMENT
December [4], 2000
SALOMON SMITH BARNEY INC.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
MFS Municipal Income Trust, a Massachusetts business trust (the
"Trust"), proposes, upon the terms and conditions set forth herein, to issue and
sell an aggregate of 2,800 shares of its Auction Rate Cumulative Preferred
Shares, Series T and 2,800 shares of its Auction Rate Cumulative Preferred
Shares, Series TH, each with a liquidation preference of $25,000 per share (the
shares of Auction Rate Cumulative Preferred Shares to be sold hereby are
referred to herein, collectively, as the "Shares"). The Shares will be
authorized by, and subject to the terms and conditions of, the Statement
creating the Shares (the "Statement") in the form filed as an exhibit to the
Registration Statement referred to in Section 1 of this agreement. The Trust and
its investment adviser, Massachusetts Financial Services Company (the
"Adviser"), wish to confirm as follows their agreement with Salomon Smith Barney
Inc. (the "Underwriters"), in connection with the purchase of the Shares by the
Underwriters.
Collectively, the Investment Advisory Agreement dated as of November
6, 1986 between the Trust and the Adviser ("the "Investment Management
Agreement"), the Master Administrative Services Agreement dated as of March 1,
1997 between the Trust and the Adviser, the Custodian Agreement dated as of
February 19, 1998 between the Trust and State Street Bank and Trust Company, the
Transfer Agency, Registrar and Dividend Paying Agency Agreement dated as of
_____ between the Trust and MFS Service Center, Inc. and the Auction Agency
Agreement dated as of December [4], 2000 between the Trust and Bankers Trust
Company are hereinafter referred to as the "Trust Agreements." This Underwriting
Agreement is hereinafter referred to as the "Agreement."
1. Registration Statement and Prospectus. The Trust has prepared in
conformity with the provisions of the Securities Act of 1933, as amended (the
"1933 Act"), the Investment Company Act of 1940, as amended (the "1940 Act"),
and the rules and regulations of the Securities and Exchange Commission (the
"Commission") promulgated under the 1933 Act (the "1933 Act Rules and
Regulations") and the 1940 Act (the "1940 Act Rules and Regulations" and,
together with the 1933 Act Rules and Regulations, the "Rules and Regulations") a
registration statement on Form N-2, as amended by _____________ (File Nos.
333-42364 and 811-4841), under the 1933 Act and the 1940 Act (the "registration
statement"), including a prospectus relating to the Shares, and has filed the
registration statement and prospectus in accordance with the 1933 Act and the
1940 Act. The Trust also has filed a notification of registration of the Trust
as an investment company under the 1940 Act on Form N-8A (the "1940 Act
Notification"). The term "Registration Statement" as used in this Agreement
means the registration statement (including all financial schedules and
exhibits), as amended at the time it becomes effective under the 1933 Act or, if
the registration statement became effective under the 1933 Act prior to the
execution of this Agreement, as amended or supplemented at the time it became
effective, prior to the execution of this Agreement. If it is contemplated, at
the time this Agreement is executed, that a post-effective amendment to the
registration statement will be filed under the 1933 Act and must be declared
effective before the offering of the Shares may commence, the term "Registration
Statement" as used in this Agreement means the registration statement as amended
by said post-effective amendment. If the Trust has filed an abbreviated
registration statement to register an additional amount of Shares pursuant to
Rule 462(b) under the 1933 Act (the "Rule 462 Registration Statement"), then any
reference herein to the term "Registration Statement" shall include such Rule
462 Registration Statement. The term "Prospectus" as used in this Agreement
means the prospectus and statement of additional information in the forms
included in the Registration Statement or, if the prospectus and statement of
additional information included in the Registration Statement omit information
in reliance on Rule 430A under the 1933 Act Rules and Regulations and such
information is included in a prospectus and statement of additional information
filed with the Commission pursuant to Rule 497(h) under the 1933 Act, the term
"Prospectus" as used in this Agreement means the prospectus and statement of
additional information in the forms included in the Registration Statement as
supplemented by the addition of the information contained in the prospectus
filed with the Commission pursuant to Rule 497(h). The term "Prepricing
Prospectus" as used in this Agreement means the prospectus and statement of
additional information subject to completion in the forms included in the
registration statement at the time of filing of amendment no. ___ to the
registration statement with the Commission on ________ __, 2000, and as such
prospectus and statement of additional information shall have been amended from
time to time prior to the date of the Prospectus, together with any other
prospectus and statement of additional information relating to the Trust other
than the Prospectus approved in writing by or directly or indirectly prepared by
the Trust or the Adviser; it being understood that the definition of Prepricing
Prospectus above shall not include any Prepricing Prospectus prepared by the
Underwriters unless approved in writing by the Trust or Adviser. The terms
"Registration Statement," "Prospectus" and "Prepricing Prospectus" shall also
include any financial statements incorporated by reference therein.
The Trust has furnished you with copies of such registration
statement, each amendment to such registration statement filed with the
Commission and each Prepricing Prospectus.
2. Agreements to Sell and Purchase. The Trust hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to the
Underwriters and, upon the basis of the representations, warranties and
agreements of the Trust and the Adviser herein contained and subject to all the
terms and conditions set forth herein, the Underwriters agree to purchase from
the Trust, at a purchase price of $_______ per Share, the number of shares of
each series of Auction Rate Cumulative Preferred Shares set forth opposite the
name of each Underwriter in Schedule I hereto.
3. Terms of Public Offering. The Trust and the Adviser have been
advised by the Underwriters that the Underwriters propose to make a public
offering of the Shares as soon after the Registration Statement and this
Agreement have become effective as in the Underwriters' judgment is advisable
and initially to offer the Shares upon the terms set forth in the Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the
Underwriters of and payment for the Shares shall be made at the office of
Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, NY 10017, at 9:30
A.M., New York City time, on ________ __, 2000 (the "Closing Date"). The place
of closing for the Shares and the Closing Date may be varied by agreement
between you and the Trust.
Certificates for the Shares shall be registered in such names and in
such denominations as the Underwriters shall request prior to 9:30 A.M., New
York City time, on the second business day preceding the Closing Date. Such
certificates shall be made available to the Underwriters in New York City for
inspection not later than 9:30 A.M., New York City time, on the business day
next preceding the Closing Date. The certificates evidencing the Shares shall be
delivered to the Underwriters on the Closing Date, through the facilities of The
Depository Trust Company, against payment of the purchase price therefor in
immediately available funds.
5. Agreements of the Trust and the Adviser. The Trust and the
Adviser, jointly and severally, agree with the Underwriters as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective under the 1933 Act before the offering of the Shares
may commence, the Trust will endeavor to cause the Registration Statement or
such post-effective amendment to become effective under the 1933 Act as soon as
possible and will advise the Underwriters promptly and, if requested by the
Underwriters, will confirm such advice in writing when the Registration
Statement or such post-effective amendment has become effective.
(b) The Trust will advise the Underwriters promptly and, if
requested by the Underwriters, will confirm such advice in writing:
(i) of any request made by the Commission for amendment of or
a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus (or any amendment or supplement to any
of the foregoing) or for additional information,
(ii) of the issuance by the Commission, the National
Association of Securities Dealers, Inc. (the "NASD"), any state
securities commission, any national securities exchange, any
arbitrator, any court or any other governmental, regulatory,
self-regulatory or administrative agency or any official of any
order suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any
Prepricing Prospectus, or any sales material (as hereinafter
defined), of any notice pursuant to Section 8(e) of the 1940 Act, of
the suspension of qualification of the Shares for offering or sale
in any jurisdiction, or the initiation of any proceeding for any
such purposes,
(iii) of receipt by the Trust, the Adviser, any affiliate of
the Trust or the Adviser or any representative or attorney of the
Trust or the Adviser of any other material communication from the
Commission, the NASD, any state securities commission, any national
securities exchange, any arbitrator, any court or any other
governmental, regulatory, self-regulatory or administrative agency
or any official relating to the Trust (if such communication
relating to the Trust is received by such person within three years
after the date of this Agreement), the Registration Statement, the
1940 Act Notification, the Prospectus, any Prepricing Prospectus,
any sales material (as herein defined) (or any amendment or
supplement to any of the foregoing) or this Agreement or any of the
Trust Agreements and
(iv) within the period of time referred to in paragraph (f)
below, of any material adverse change in the condition (financial or
other), business, prospects, properties, net assets or results of
operations of the Trust or the Adviser or of the happening of any
other event which makes any statement of a material fact made in the
Registration Statement or the Prospectus, or any Prepricing
Prospectus or any sales materials (as herein defined) (or any
amendment or supplement to any of the foregoing) untrue or which
requires the making of any additions to or changes in the
Registration Statement or the Prospectus, or any Prepricing
Prospectus or any sales materials (as herein defined) (or any
amendment or supplement to any of the foregoing) in order to state a
material fact required by the 1933 Act, the 1940 Act or the Rules
and Regulations to be stated therein or necessary in order to make
the statements therein (in the case of the Prospectus, in light of
the circumstances under which they were made), not misleading or of
the necessity to amend or supplement the Registration Statement, the
Prospectus, or any Prepricing Prospectus or any sales material (as
herein defined) (or any amendment or supplement to any of the
foregoing) to comply with the 1933 Act, the 1940 Act, the Rules and
Regulations or any other law or order of any court or regulatory
body.
If at any time the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any
court or any other governmental, regulatory, self-regulatory or
administrative agency or any official shall issue any order
suspending the effectiveness of the Registration Statement,
prohibiting or suspending the use of the Prospectus or any sales
material (as herein defined) (or any amendment or supplement to any
of the foregoing) or suspending the qualification of the Shares for
offering or sale in any jurisdiction, the Trust will make every
reasonable effort to obtain the withdrawal of such order at the
earliest possible time.
(c) The Trust will furnish to you, without charge, three signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto, but without exhibits, as you may request.
(d) The Trust will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectus, or any sales
material (as herein defined), of which you shall not previously have been
advised or to which you shall reasonably object after being so advised or (ii)
so long as, in the opinion of counsel for the Underwriters, a Prospectus is
required by the 1933 Act to be delivered in connection with sales by the
Underwriters or any dealer, file any information, documents or reports pursuant
to the Securities Exchange Act of 1934, as amended (the "1934 Act"), without
delivering a copy of such information, documents or reports to you prior to or
concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Trust
has delivered to you, without charge, in such quantities as you have requested,
copies of each form of the Prepricing Prospectus. The Trust consents to the use,
in accordance with the provisions of the 1933 Act and with the state securities
or blue sky laws of the jurisdictions in which the Shares are offered by the
Underwriters and by dealers, prior to the date of the Prospectus, of each
Prepricing Prospectus so furnished by the Trust.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a prospectus is required by the 1933 Act to be
delivered in connection with sales by the Underwriters or any dealer, the Trust
will expeditiously deliver to the Underwriters and each dealer, without charge,
as many copies of the Prospectus (and of any amendment or supplement thereto) as
the Underwriters may reasonably request. The Trust consents to the use of the
Prospectus (and of any amendment or supplement thereto) in accordance with the
provisions of the 1933 Act and with the state securities or blue sky laws of the
jurisdictions in which the Shares are offered by the Underwriters and by all
dealers to whom Shares may be sold, both in connection with the offering and
sale of the Shares and for such period of time thereafter as the Prospectus is
required by the 1933 Act to be delivered in connection with sales by the
Underwriters or any dealer. If during such period of time any event shall occur
that in the judgment of the Trust or in the opinion of counsel for the
Underwriters is required to be set forth in the Registration Statement or the
Prospectus (as then amended or supplemented) or should be set forth therein in
order to make the statements therein (in the case of the Prospectus, in the
light of the circumstances under which they were made) not misleading, or if it
is necessary to supplement or amend the Registration Statement or the Prospectus
to comply with the 1933 Act, the 1940 Act, the Rules and Regulations or any
other federal law, rule or regulation, or any state securities or blue sky
disclosure laws, rules or regulations, the Trust will forthwith prepare and,
subject to the provisions of paragraph (d) above, promptly file with the
Commission an appropriate supplement or amendment thereto, and will
expeditiously furnish to the Underwriters and dealers, without charge, a
reasonable number of copies thereof. In the event that the Trust and the
Underwriters agree that the Registration Statement or the Prospectus should be
amended or supplemented, the Trust, if requested by the Underwriters, will
promptly issue a press release announcing or disclosing the matters to be
covered by the proposed amendment or supplement.
(g) The Trust will make generally available to its security holders
an earnings statement, which need not be audited, covering a twelve-month period
ending not later than 19 months after the effective date of the Registration
Statement as soon as practicable after the end of such period, which earnings
statement shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule
158 of the 1933 Act Rules and Regulations.
(h) During the period of five years hereafter, the Trust will
furnish to you (i) as soon as available, a copy of each report of the Trust
mailed to stockholders or filed with the Commission or furnished to the New York
Stock Exchange (the "NYSE") other than reports on Form N-SAR, and (ii) from time
to time such other information concerning the Trust as the Underwriters may
reasonably request.
(i) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than by notice given by
the Underwriters terminating this Agreement pursuant to Section 12 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Trust or the Adviser to comply with the terms or
fulfill any of the conditions of this Agreement, the Trust and the Adviser,
jointly and severally, agree to reimburse the Underwriters for all out-of-pocket
expenses (including reasonable fees and expenses of counsel for the
Underwriters) incurred by the Underwriters in connection herewith.
(j) The Trust will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectus and in such a manner as to comply with the investment objectives,
policies and restrictions of the Trust as described in the Prospectus.
(k) The Trust will timely file the requisite copies of the
Prospectus with the Commission pursuant to Rule 497(c) or Rule 497(h) of the
1933 Act Rules and Regulations, whichever is applicable or, if applicable, will
timely file the certification permitted by Rule 497(j) of the 1933 Act Rules and
Regulations and will advise the Underwriters of the time and manner of such
filing.
(l) Except as provided in this Agreement, the Trust will not sell,
contract to sell, or otherwise dispose of any senior securities (as defined in
the 1940 Act) of the Trust, or grant any options or warrants to purchase senior
securities of the Trust, for a period of 180 days after the date of the
Prospectus, without the prior written consent of the Underwriters. For avoidance
of doubt, the foregoing sentence shall not apply to [(i)] the Shares to be sold
hereunder [or (ii) transactions as contemplated in the Registration Statement
undertaken in the normal course of the Trust's business].
(m) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, neither the Trust nor the Adviser has taken, nor will
it take, directly or indirectly, any action designed to or that might reasonably
be expected to cause or result in stabilization or manipulation of the price of
any securities issued by the Trust to facilitate the sale or resale of the
Shares.
(n) The Trust will use its best efforts to cause the Shares, prior
to the Closing Date, to be assigned a rating of 'aaa' by Moody's Investors
Service, Inc. ("Moody's") and 'AAA' by Standard & Poor's Corporation ("S&P").
(o) The Trust and the Adviser will use their best efforts to perform
all of the agreements required of them and discharge all conditions to closing
as set forth in this Agreement.
6. Representations and Warranties of the Trust and the Adviser. The
Trust and the Adviser, jointly and severally, represent and warrant to the
Underwriters that:
(a) Each Prepricing Prospectus included as part of the registration
statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 497 of the 1933 Act Rules and Regulations, complied
when so filed in all material respects with the provisions of the 1933 Act, the
1940 Act and the Rules and Regulations. The Commission has not issued any order
preventing or suspending the use of any Prepricing Prospectus.
(b) The registration statement in the form in which it became or
becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectus and any supplement
or amendment thereto when filed with the Commission under Rule 497 of the 1933
Act Rules and Regulations and the 1940 Act Notification when originally filed
with the Commission and any amendment or supplement thereto when filed with the
Commission, complied or will comply in all material respects with the provisions
of the 1933 Act, the 1940 Act and the Rules and Regulations and did not or will
not at any such times contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, except that this representation and warranty
does not apply to statements in or omissions from the registration statement or
the Prospectus made in reliance upon and in conformity with information relating
to the Underwriters furnished to the Trust in writing by or on behalf of the
Underwriters expressly for use therein.
(c) All the outstanding common shares of beneficial interest of the
Trust have been duly authorized and validly issued, are fully paid and
nonassessable and are free of any preemptive or similar rights; the Shares have
been duly authorized and, when issued and delivered to the Underwriters against
payment therefor in accordance with the terms hereof, will be validly issued,
fully paid and nonassessable and free of any preemptive or similar rights and
will conform to the description thereof in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them); and the
capitalization of the Trust conforms to the description thereof in the
Registration Statement and the Prospectus (and any amendment or supplement to
either of them).
(d) The Trust is a business trust duly organized and validly
existing under the laws of The Commonwealth of Massachusetts with full power and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement and the Prospectus (and any amendment
or supplement to either of them), and is duly registered and qualified to
conduct its business and is in good standing in each jurisdiction or place where
the nature of its properties or the conduct of its business requires such
registration or qualification, except where the failure so to register or
qualify does not have a material adverse effect on the condition (financial or
other), business, prospects, properties, net assets or results of operations of
the Trust; and the Trust has no subsidiaries.
(e) There are no legal or governmental proceedings pending or, to
the knowledge of the Trust, threatened, against the Trust, or to which the Trust
or any of its properties is subject, that are required to be described in the
Registration Statement or the Prospectus (and any amendment or supplement to
either of them) but are not described as required, and there are no agreements,
contracts, indentures, leases or other instruments that are required to be
described in the Registration Statement or the Prospectus (and any amendment or
supplement to either of them) or to be filed as an exhibit to the Registration
Statement that are not described or filed as required by the 1933 Act, the 1940
Act or the Rules and Regulations.
(f) The Trust is not in violation of its Declaration of Trust (the
"Declaration"), or bylaws (the "Bylaws"), or other organizational documents or
of any law, ordinance, administrative or governmental rule or regulation
applicable to the Trust or of any decree of the Commission, the NASD, any state
securities commission, any national securities exchange, any arbitrator, any
court or governmental agency, body or official having jurisdiction over the
Trust, or in default in any material respect in the performance of any
obligation, agreement or condition contained in any bond, debenture, note or any
other evidence of indebtedness or in any material agreement, indenture, lease or
other instrument to which the Trust is a party or by which it or any of its
properties may be bound.
(g) Neither the issuance and sale of the Shares, the execution,
delivery or performance of this Agreement or any of the Trust Agreements by the
Trust, nor the consummation by the Trust of the transactions contemplated hereby
or thereby (A) requires any consent, approval, authorization or other order of
or registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official (except such as may have been obtained prior to the date hereof and
such as may be required for compliance with the state securities or blue sky
laws of various jurisdictions which have been or will be effected in accordance
with this Agreement) or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the Declaration, the Bylaws or other
organizational documents of the Trust or (B) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any agreement,
indenture, lease or other instrument to which the Trust is a party or by which
it or any of its properties may be bound, or violates or will violate any
statute, law, regulation or judgment, injunction, order or decree applicable to
the Trust or any of its properties, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Trust
pursuant to the terms of any agreement or instrument to which it is a party or
by which it may be bound or to which any of its property or assets is subject.
The Trust is not subject to any order of any court or of any arbitrator,
governmental authority or administrative agency [that would prohibit it from
entering into this Agreement, carrying out its duties hereunder or issuing the
Shares].
(h) The accountants, Deloitte & Touche LLP, who have certified or
shall certify the financial statements included or incorporated by reference in
the Registration Statement and the Prospectus (or any amendment or supplement to
either of them) are independent public accountants as required by the 1933 Act,
the 1940 Act and the Rules and Regulations.
(i) The financial statements, together with related schedules and
notes, included or incorporated by reference in the Registration Statement and
the Prospectus (and any amendment or supplement to either of them), present
fairly the financial position, results of operations and changes in financial
position of the Trust on the basis stated or incorporated by reference in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
in the Registration Statement and the Prospectus (and any amendment or
supplement to either of them) are accurately presented and prepared on a basis
consistent with such financial statements and the books and records of the
Trust.
(j) The execution and delivery of, and the performance by the Trust
of its obligations under, this Agreement and the Trust Agreements have been duly
and validly authorized by the Trust, and this Agreement and the Trust Agreements
have been duly executed and delivered by the Trust and assuming due
authorization, execution and delivery by the other parties thereto, constitute
the valid and legally binding agreements of the Trust, enforceable against the
Trust in accordance with their terms (subject to the qualification that the
enforceability of the Trust's obligations thereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium, and similar laws of general
applicability relating to or affecting creditors' rights, and to general
principles of equity regardless of whether enforceability is considered in a
proceeding in equity or at law), except as rights to indemnity and contribution
hereunder and thereunder may be limited by federal or state securities laws.
(k) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
the Trust has not incurred any liability or obligation, direct or contingent, or
entered into any transaction, not in the ordinary course of business, that is
material to the Trust, and there has not been any change in the capitalization,
or material increase in the short-term debt or long-term debt, of the Trust, or
any material adverse change, or any development involving or which may
reasonably be expected to involve, a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Trust, whether or not arising in the ordinary
course of business (a "Material Adverse Effect").
(l) The Trust has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectus, the Prospectus or other materials, if any, permitted by the 1933
Act, the 1940 Act or the Rules and Regulations.
(m)(i) The Trust has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment or supplement thereto), subject
to such qualifications as may be set forth in the Prospectus; (ii) the Trust has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Trust under any such permit, subject in each
case to such qualification as may be set forth in the Prospectus (and any
amendment or supplement thereto); and, (iii) except as described in the
Prospectus (and any amendment or supplement thereto), none of such permits
contains any restriction that is materially burdensome to the Trust, except
where the failure of (i), (ii) or (iii) to be accurate would not, individually
or in the aggregate, have a Material Adverse Effect on the Trust.
(n) The Trust maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization and with the
applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and
the Internal Revenue Code of 1986, as amended (the "Code"); (ii) transactions
are recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets and to maintain compliance with the books and records
requirements under the 1940 Act and the 1940 Act Rules and Regulations; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(o) To the Trust's knowledge, neither the Trust nor any employee or
agent of the Trust has made any payment of funds of the Trust or received or
retained any funds, which payment, receipt or retention of funds is of a
character required to be disclosed in the Prospectus.
(p) The Trust has filed all tax returns required to be filed, which
returns are complete and correct in all material respects, and the Trust is not
in material default in the payment of any taxes which were payable pursuant to
said returns or any assessments with respect thereto.
(q) No holder of any security of the Trust has any right to require
registration of common shares of beneficial interest or any other security of
the Trust because of the filing of the registration statement or consummation of
the transactions contemplated by this Agreement.
(r) The Trust, subject to the registration statement having been
declared effective and the filing of the Prospectus under Rule 497 under the
1933 Act Rules and Regulations, has taken all required action under the 1933
Act, the 1940 Act and the Rules and Regulations to make the public offering and
consummate the sale of the Shares as contemplated by this Agreement.
(s) The conduct by the Trust of its business (as described in the
Prospectus) does not require it to be the owner, possessor or licensee of any
patents, patent licenses, trademarks, service marks or trade names which it does
not own, possess or license.
(t) The Trust is registered under the 1940 Act as a closed-end
non-diversified management investment company and the 1940 Act Notification has
been duly filed with the Commission and, at the time of filing thereof and any
amendment or supplement thereto, conformed in all material respects with all
applicable provisions of the 1940 Act and the Rules and Regulations. The Trust
is, and at all times through the completion of the transactions contemplated
hereby, will be, in compliance in all material respects with the terms and
conditions of the 1933 Act and the 1940 Act. No person is serving or acting as
an officer, director or investment adviser of the Trust except in accordance
with the provisions of the 1940 Act and the 1940 Act Rules and Regulations and
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and the
rules and regulations of the Commission promulgated under the Advisers Act (the
"Advisers Act Rules and Regulations").
(u) Except as stated in this Agreement and in the Prospectus (and
any amendment or supplement thereto), the Trust has not taken, nor will it take,
directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in stabilization or manipulation of the price of any
securities issued by the Trust to facilitate the sale or resale of the Shares,
and the Trust is not aware of any such action taken or to be taken by any
affiliates of the Trust.
(v) The Trust has filed in a timely manner each document or report
required to be filed by it pursuant to the 1934 Act and the rules and
regulations of the Commission promulgated thereunder (the "1934 Act Rules and
Regulations"); each such document or report at the time it was filed conformed
to the requirements of the 1934 Act and the 1934 Act Rules and Regulations; and
none of such documents or reports contained an untrue statement of any material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(w) All advertising, sales literature or other promotional material
(including "prospectus wrappers," "broker kits," "road show slides" and "road
show scripts") authorized in writing by or prepared by the Trust or the Adviser
for use in connection with the offering and sale of the Shares (collectively,
"sales material") complied and comply in all material respects with the
applicable requirements of the 1933 Act, the 1940 Act, the Rules and Regulations
and the rules and interpretations of the NASD and no such sales material
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(x) Each of the Trust Agreements and the Trust's and the Adviser's
obligations under this Agreement and each of the Trust Agreements comply in all
material respects with all applicable provisions of the 1940 Act, the 1940 Act
Rules and Regulations, the Advisers Act and the Advisers Act Rules and
Regulations.
(y) The Shares have been, or prior to the Closing Date will be,
assigned a rating of 'aaa' by Moody's and 'AAA' by S&P.
(z) As required by Subchapter M of the Code, the Trust is currently
in compliance with the requirements to qualify as a regulated investment company
under the Code.
(aa) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), no director of
the Trust is an "interested person" (as defined in the 1940 Act) of the Trust or
an "affiliated person" (as defined in the 1940 Act) of any Underwriter.
7. Representations and Warranties of the Adviser. The Adviser
represents and warrants to the Underwriters as follows:
(a) The Adviser is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus (and any amendment or supplement to either of them), and is duly
registered and qualified to conduct its business and is in good standing in each
jurisdiction or place where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the failure
so to register or to qualify does not have a material adverse effect on the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Adviser or its subsidiaries [set forth in Schedule
II hereto] or on the ability of the Adviser to perform its obligations under
this Agreement and the Investment Management Agreement.
(b) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by the Advisers
Act, the Advisers Act Rules and Regulations, the 1940 Act or the 1940 Act Rules
and Regulations from acting under the Investment Management Agreement for the
Trust as contemplated by the Prospectus (or any amendment or supplement
thereto). There does not exist any proceeding or any facts or circumstances the
existence of which could lead to any proceeding which might adversely affect the
registration of the Adviser with the Commission.
(c) There are no legal or governmental proceedings pending or, to
the knowledge of the Adviser, threatened against the Adviser, or to which the
Adviser or any of its material properties is subject, that are required to be
described in the Registration Statement or the Prospectus (or any amendment or
supplement to either of them) but are not described as required or that may
reasonably be expected to involve a prospective material adverse change, in the
condition (financial or other), business, prospects, properties, net assets or
results of operations of the Adviser or on the ability of the Adviser to perform
its obligations under this Agreement and the Investment Management Agreement.
(d) Neither the execution, delivery or performance of this Agreement
or the Investment Management Agreement by the Adviser, nor the consummation by
the Adviser of the transactions contemplated hereby or thereby (A) requires the
Adviser to obtain any consent, approval, authorization or other order of or
registration or filing with, the Commission, the NASD, any state securities
commission, any national securities exchange, any arbitrator, any court,
regulatory body, administrative agency or other governmental body, agency or
official or conflicts or will conflict with or constitutes or will constitute a
breach of or a default under, the certificate of incorporation or by-laws, or
other organizational documents, of the Adviser or (B) conflicts or will conflict
with or constitutes or will constitute a breach of or a default under, any
agreement, indenture, lease or other instrument to which the Adviser is a party
or by which it or any of its properties may be bound, or violates or will
violate any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Adviser or any of its properties or will result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Adviser pursuant to the terms of any agreement or instrument to
which it is a party or by which it may be bound or to which any of the property
or assets of the Adviser is subject. The Adviser is not subject to any order of
any court or of any arbitrator, governmental authority or administrative agency
[that would prohibit it from entering into this Agreement or carrying out its
duties hereunder].
(e) The execution and delivery of, and the performance by the
Adviser of its obligations under, this Agreement and the Investment Management
Agreement have been duly and validly authorized by the Adviser, and this
Agreement and the Investment Management Agreement have been duly executed and
delivered by the Adviser and assuming due authorization, execution and delivery
by the other parties thereto, each constitutes the valid and legally binding
agreement of the Adviser, enforceable against the Adviser in accordance with its
terms (subject to the qualification that the enforceability of the Adviser's
obligations thereunder may be limited by bankruptcy, insolvency, reorganization,
moratorium, and similar laws of general applicability relating to or affecting
creditors' rights, and to general principles of equity regardless of whether
enforceability is considered in a proceeding in equity or at law), except as
rights to indemnity and contribution hereunder may be limited by federal or
state securities laws.
(f) The description of the Adviser in the Registration Statement and
the Prospectus (and any amendment or supplement thereto) complied and comply in
all material respects with the provisions of the 1933 Act, the 1940 Act, the
Advisers Act, the Rules and Regulations and the Advisers Act Rules and
Regulations and did not and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading.
(g) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement to either of them), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement to either of them),
the Adviser has not incurred any liability or obligation, direct or contingent,
or entered into any transaction, not in the ordinary course of business, that is
material to the Adviser or the Trust and that is required to be disclosed in the
Registration Statement or the Prospectus and there has not been any material
adverse change, or any development involving or which may reasonably be expected
to involve, a prospective material adverse change, in the condition (financial
or other), business, prospects, properties, net assets or results of operations
of the Adviser, whether or not arising in the ordinary course of business, or
which, in each case, could have a material adverse effect on the ability of the
Adviser to perform its obligations under this Agreement and the Investment
Management Agreement.
(h)(i) The Adviser has such permits, licenses, franchises and
authorizations of governmental or regulatory authorities ("permits") as are
necessary to own its properties and to conduct its business in the manner
described in the Prospectus (and any amendment thereto); (ii) the Adviser has
fulfilled and performed all its material obligations with respect to such
permits and no event has occurred which allows, or after notice or lapse of time
would allow, revocation or termination thereof or results in any other material
impairment of the rights of the Adviser under any such permit; and, (iii) except
as described in the Prospectus (and any amendment or supplement thereto), none
of such permits contains any restriction that is materially burdensome to the
Adviser, except where the failure of (i), (ii) or (iii) to be accurate would
not, individually or in the aggregate, have a Material Adverse Effect on the
Adviser.
8. Indemnification and Contribution. (a) The Trust and the Adviser,
jointly and severally, agree to indemnify and hold harmless each of the
Underwriters and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation), joint or several, arising out of or based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Prepricing Prospectus or in the Registration Statement or the
Prospectus or in any amendment or supplement thereto, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses arise
out of or are based upon any untrue statement or omission or alleged untrue
statement or omission which has been made therein or omitted therefrom in
reliance upon and in conformity with the information relating to any Underwriter
furnished in writing to the Trust or the Adviser by or on behalf of any
Underwriter through you expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Shares by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the 1933
Act and the 1933 Act Rules and Regulations, and the untrue statement or alleged
untrue statement or omission or alleged omission of a material fact contained in
such Prepricing Prospectus was corrected in the Prospectus, provided that the
Trust has delivered the Prospectus to the several Underwriters in requisite
quantity on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which the Trust or the
Adviser may otherwise have.
(b) Any party that proposes to assert the right to be indemnified
under this Section 8 will, promptly after receipt of notice of commencement of
any action against such party in respect of which a claim is to be made against
an indemnifying party or parties under this Section 8, notify each such
indemnifying party of the commencement of such action, enclosing a copy of all
papers served, but the omission to so notify such indemnifying party (i) will
not relieve it from any liability that it may have to any indemnified party
under the foregoing provision of this Section 8 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party and (ii) will not, in any event, relieve such
indemnifying party from any other obligation (other than pursuant to the
foregoing provision of this Section 8) it may have under this Agreement. If any
action, suit or proceeding shall be brought against any Underwriter or any
person controlling any Underwriter in respect of which indemnity may be sought
against the Trust or the Adviser, such Underwriter or such controlling person
shall promptly notify the Trust or the Adviser, and the Trust or the Adviser
[may, at its option and upon notice to the Underwriters,] assume the defense
thereof, including the employment of counsel and payment of all fees and
expenses. Such Underwriter or any such controlling person shall have the right
to employ separate counsel in any such action, suit or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Underwriter or such controlling person unless
(i) the Trust or the Adviser has agreed in writing to pay such fees and
expenses, (ii) the Trust and the Adviser have failed to assume the defense and
employ counsel, or (iii) the named parties to any such action, suit or
proceeding (including any impleaded parties) include both such Underwriter or
such controlling person and the Trust or the Adviser and such Underwriter or
such controlling person shall have been advised by its counsel that
representation of such indemnified party and the Trust or the Adviser by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the Trust and the Adviser shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the Trust and the Adviser
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by the Underwriters, and that all such fees and expenses shall be
reimbursed as they are incurred. The Trust and the Adviser shall not be liable
for any settlement of any such action, suit or proceeding effected without their
written consent, but if settled with such written consent, or if there be a
final judgment for the plaintiff in any such action, suit or proceeding, the
Trust and the Adviser agree to indemnify and hold harmless any Underwriter, to
the extent provided in the preceding paragraph, and any such controlling person
from and against any loss, claim, damage, liability or expense by reason of such
settlement or judgment.
(c) Each Underwriter agrees to indemnify and hold harmless the Trust
and the Adviser, their directors, trustees, any officers who sign the
Registration Statement, and any person who controls the Trust or the Adviser
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
to the same extent as the foregoing indemnity from the Trust and the Adviser to
each Underwriter, but only with respect to information relating to such
Underwriter furnished in writing by or on behalf of such Underwriter expressly
for use in the Registration Statement, the Prospectus or any Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Trust or the Adviser, any of their
directors, any such officer, or any such controlling person based on the
Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Underwriter pursuant to this paragraph (c), such Underwriter shall
have the rights and duties given to the Trust and the Adviser by paragraph (b)
above (except that if the Trust or the Adviser shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the Trust
and the Adviser, their directors, trustees, any such officer, and any such
controlling person shall have the rights and duties given to the Underwriters by
paragraph (b) above. The foregoing indemnity agreement shall be in addition to
any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 8 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or reasonable expenses
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Trust and the Adviser on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other hand from the offering
of the Shares, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Trust and the Adviser on the one hand (treated jointly for this
purpose as one person) and the Underwriters on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Trust and the Adviser on the one hand
(treated jointly for this purpose as one person) and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Trust bear to the
total underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault of the Trust and the Adviser on the one hand (treated jointly for
this purpose as one person) and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Trust and the Adviser on
the one hand (treated jointly for this purpose as one person) or by the
Underwriters on the other hand and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action against such party in respect of which a
claim for contribution may be made under this Section 8(d), notify such party or
parties from whom contribution may be sought, but the omission so to notify (i)
will not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 8(d), unless such
omission results in the forfeiture of substantive rights or defenses by the
party or parties from whom contribution is being sought and (ii) will not, in
any event, relieve the party or parties from whom contribution may be sought
from any other obligation (other than pursuant to this Section 8(d)) it or they
may have under this Agreement. Except for a settlement entered into pursuant to
the last sentence of Section 8(b) hereof, no party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent shall not be unreasonably withheld).
(e) The Trust, the Adviser and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 8 were
determined by a pro rata allocation or by any other method of allocation that
does not take account of the equitable considerations referred to in paragraph
(d) above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Shares underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute pursuant to this Section 8 are several
in proportion to the respective numbers of Shares set forth opposite their names
in Schedule I hereto (or such numbers of Shares increased as set forth in
Section 11 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent
of the indemnified party, effect any settlement of any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which
an indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Trust and the Adviser set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)
any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Trust, the Adviser, their directors or
officers, or any person controlling the Trust or the Adviser, (ii) acceptance of
any Shares and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Trust, the Adviser, their directors or officers, or any
person controlling the Trust or the Adviser, shall be entitled to the benefits
of the indemnity, contribution, and reimbursement agreements contained in this
Section 8.
[(h) Notwithstanding any other provisions in this Section 8, no
party shall be entitled to the benefit of any provision under this Agreement
which protects or purports to protect such person against any liability to the
Trust or its security holders to which such person would otherwise be subject by
reason of such person's willful misfeasance, bad faith, or gross negligence, in
the performance of such person's duties hereunder, or by reason of such person's
reckless disregard of such person's obligations and duties hereunder.]
9. Conditions of Underwriters' Obligations. The several obligations
of the Underwriters to purchase the Shares hereunder are subject to the
following conditions:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the registration statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
registration statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by the
Underwriters, and all filings, if any, required by Rules 497 and 430A under the
1933 Act and the 1933 Act Rules and Regulations shall have been timely made; no
stop order suspending the effectiveness of the Registration Statement or order
pursuant to Section 8(e) of the 1940 Act shall have been issued and no
proceeding for those purposes shall have been instituted or, to the knowledge of
the Trust, the Adviser or the Underwriters, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
registration statement or the prospectus or otherwise) shall have been complied
with to the Underwriters' satisfaction.
(b) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change or any development involving a prospective
change in or affecting the condition (financial or other), business, prospects,
properties, net assets, or results of operations of the Trust or the Adviser not
contemplated by the Prospectus, which in the Underwriters' opinion would
materially and adversely affect the market for the Shares, or (ii) any event or
development relating to or involving the Trust or the Adviser or any officer or
director of the Trust or the Adviser which makes any statement made in the
Prospectus untrue or which, in the opinion of the Trust and its counsel or the
Underwriters and their counsel, requires the making of any addition to or change
in the Prospectus in order to state a material fact required by the 1933 Act,
the 1940 Act or the Rules and Regulations or any other law to be stated therein
or necessary in order to make the statements therein not misleading, if amending
or supplementing the Prospectus to reflect such event or development would, in
the Underwriters' opinion, materially adversely affect the market for the
Shares.
(c) The Trust shall have furnished to you a report showing
compliance with the asset coverage requirements of the 1940 Act and a Municipal
Preferred Basic Maintenance Report (as defined in the Statement), each dated the
Closing Date and in form and substance satisfactory to you. Each such report may
use portfolio holdings and valuations as of the close of business of any day not
more than six business days preceding the Closing Date, provided, however, that
the Trust represents in such report that its total net assets as of the Closing
Date have not declined by 5% or more from such valuation date.
(d) The Underwriters shall have received on the Closing Date an
opinion of Bingham Dana LLP, counsel for the Trust, dated the Closing Date and
addressed to you, in form and substance satisfactory to you and to the effect
that:
(i) The Trust is a business trust validly existing under the
laws of The Commonwealth of Massachusetts with power and authority
as such a trust to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and
the Prospectus;
(ii) The authorized shares of beneficial interest of the Trust
are as set forth under the caption "Capitalization at April 30,
2000" in the Prospectus; and the shares of beneficial interest of
the Trust conform in all material respects as to legal matters to
the description thereof contained in the Prospectus under the
captions "Description of Municipal Preferred" and "Description of
Common Stock";
(iii) The Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive, or to the best
knowledge of such counsel after reasonable inquiry, similar rights
that entitle or will entitle any person to acquire any Shares upon
the issuance thereof by the Trust, and will conform to the
description thereof contained in the Prospectus under the caption
"Description of Municipal Preferred";
(iv) The form of certificates for the Shares conforms to the
requirements of Massachusetts law;
(v) The Registration Statement is effective under the 1933 Act
and the 1940 Act and, to the best knowledge of such counsel after
reasonable inquiry, no stop order suspending the effectiveness of
the Registration Statement or order pursuant to Section 8(e) of the
1940 Act relating to the Trust has been issued and no proceedings
for that purpose are pending before or threatened by the Commission;
and any required filing of the Prospectus pursuant to Rule 497 of
the 1933 Act Rules and Regulations has been made in accordance with
Rule 497;
(vi) The Trust has power and authority to enter into this
Agreement and each of the Trust Agreements and to issue, sell and
deliver the Shares to the Underwriters as provided herein, and this
Agreement and each of the Trust Agreements have been duly
authorized, executed and delivered by the Trust and, assuming due
authorization, execution and delivery by the other parties thereto,
each Trust Agreement is a valid, legal and binding agreement of the
Trust, enforceable against the Trust in accordance with its terms,
except as enforcement of rights to indemnity and contribution
hereunder may be limited by Federal or state securities laws or
principles of public policy and subject to the qualification that
the enforceability of the Trust's obligations hereunder may be
limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles;
(vii) Neither the issuance and sale of the Shares, the
execution, delivery or performance of this Agreement and the Trust
Agreements by the Trust, nor consummation by the Trust of the
transactions contemplated hereby and the Trust Agreements conflicts
or will conflict with or constitutes or will constitute a breach of,
or a default under, the Declaration or Bylaws, or other
organizational documents, of the Trust or any agreement, indenture,
lease or other instrument to which the Trust is a party or by which
it or any of its properties is bound that is an exhibit to the
Registration Statement, or will result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of
the Trust, nor will any such action result in any violation of any
existing law or regulation (assuming compliance with all applicable
state securities or blue sky laws), judgment, injunction, order or
decree that is applicable to the Trust or any of its properties and
that is known to such counsel;
(viii) To the best knowledge of such counsel no consent,
approval, authorization or other order of, or registration or filing
by the Trust with the Commission, the NASD, any national securities
exchange, or, to the best of such counsel's knowledge, any
arbitrator, any court, regulatory body, administrative agency or
other governmental body, agency, or official is required on the part
of the Trust (except such as may have been obtained prior to the
date hereof and such as may be required for compliance with NASD
requirements and with the state securities or blue sky laws of
various jurisdictions) for the issuance and sale of the Shares to
the Underwriters as contemplated by this Agreement, the execution,
delivery and performance by the Trust of this Agreement and the
Trust Agreements or the consummation of the transactions
contemplated hereby and thereby;
(ix) The Registration Statement and Prospectus (except for the
financial statements and the notes thereto and the schedules and
other financial and statistical data contained or referred to
therein, as to which such counsel need not express any opinion)
comply as to form in all material respects with the requirements of
the 1933 Act, the 1940 Act, and the Rules and Regulations;
(x) To the best knowledge of such counsel after reasonable
inquiry (but without a search of the dockets of any court,
administrative body or filing office in any jurisdiction), (A) other
than as described or contemplated in the Registration Statement or
Prospectus, there are no legal or governmental proceedings pending
or threatened against the Trust, or to which the Trust or any of its
properties is subject, which are required to be described in the
Registration Statement or Prospectus and (B) there are no
agreements, contracts, indentures, leases or other instruments that
are required to be described in the Registration Statement or the
Prospectus that are not described as required;
(xi) The Trust is duly registered with the Commission under
the 1940 Act as a closed-end, non-diversified management investment
company; the provisions of the Declaration and Bylaws comply as to
form in all material respects with the applicable provisions of the
1940 Act and the 1940 Act Rules and Regulations; and the provisions
of the Declaration and Bylaws and the investment policies and
restrictions described in the Registration Statement and the
Prospectus under the captions "Investment Objective and Policies"
(in the Prospectus) comply in all material respects with the
requirements of the 1940 Act;
(xii) The Trust has full power and authority to own its
properties and to conduct business as now being conducted, as
described in the Prospectus;
(xiii) Such counsel shall also state that, while they have not
themselves checked the accuracy and completeness of or otherwise
verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, except to the limited
extent stated in paragraphs (ii) and (xi) above, in the course of
their review and discussion of the contents of the Registration
Statement and Prospectus with certain officers and employees of the
Trust and its independent accountants, no facts have come to their
attention which cause them to believe that the Registration
Statement (except as to any financial statements, including the
notes and schedules thereto, or other financial data contained or
referred to in the Registration Statement as to which they express
no belief), as of its effective date, contained an untrue statement
of a material fact or omitted to state a material fact required to
be stated therein or necessary to make the statements contained
therein not misleading or that the Prospectus (except as to any
financial statements, including the notes and schedules thereto, or
other financial data contained or referred to in the Prospectus, as
to which they express no belief), as of its issue date and as of the
Closing Date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements contained therein, in the light of
the circumstances under which they were made, not misleading.
(xiv) Such counsel may also state that they do not express any
opinion concerning any law other than the law of The Commonwealth of
Massachusetts and the federal law of the United States.
(e) The Underwriters shall have received on the Closing Date an
opinion of James Bordewick, Jr., Associate General Counsel of the Adviser, dated
the Closing Date and addressed to you, in form and substance satisfactory to you
and to the effect that:
(i) The Adviser is a corporation duly incorporated and validly
existing in good standing under the laws of the State of Delaware
with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Registration Statement and the Prospectus;
(ii) The Adviser is duly registered with the Commission as an
investment adviser under the Advisers Act and is not prohibited by
the Advisers Act, the Advisers Act Rules and Regulations, the 1940
Act or the 1940 Act Rules and Regulations from acting under the
Investment Management Agreement for the Trust as contemplated by the
Prospectus;
(iii) This Agreement and the Investment Management Agreement
have been duly authorized, executed and delivered by the Adviser and
the Investment Management Agreement is a valid and binding agreement
of the Adviser, enforceable against the Adviser in accordance with
its terms except as enforcement of rights to indemnity and
contribution hereunder may be limited by Federal or state securities
laws or principles of public policy and subject to the qualification
that the enforceability of the Adviser's obligations hereunder may
be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and by general equitable principles;
(iv) Neither the execution, delivery or performance of this
Agreement by the Adviser, compliance by the Adviser with the
provisions hereof nor consummation by the Adviser of the
transactions contemplated hereby conflicts or will conflict with, or
constitutes or will constitute a breach of or default under, the
articles of incorporation or bylaws, or other organizational
documents, of the Adviser or any agreement, indenture, lease or
other instrument to which the Adviser is a party or by which it or
any of its properties is bound that is known to such counsel after
reasonable inquiry, or will result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Adviser, nor will any such action result in any violation of any
existing law, regulation (assuming compliance with state securities
and blue sky laws), ruling, judgment, injunction, order or decree
known to such counsel after reasonable inquiry, applicable to the
Adviser or any of its properties;
(v) No consent, approval, authorization or other order of, or
registration or filing with, the Commission, the NASD, any national
securities exchange, any arbitrator, any court, regulatory body,
administrative agency or other governmental body, agency, or
official (except such as may have been obtained prior to the date
hereof and such as may be required for compliance with state
securities or blue sky laws) is required on the part of the Adviser
for the execution, delivery and performance by it of this Agreement
and the Trust Agreements to which it is a party or the consummation
by it of the transactions contemplated hereby and thereby;
(vi) To the knowledge of such counsel, there are no legal or
governmental proceedings pending or threatened against the Adviser
or any of its material properties which are required to be described
in the Registration Statement or the Prospectus but are not
described as required;
(vii) Such counsel shall also state that, to the best
knowledge of such counsel, the description of the Adviser contained
in the Registration Statement, as of its effective date, does not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements contained therein not misleading or that the description
of the Adviser contained in the Prospectus, as of its issue date and
as of the Closing Date, does not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements contained therein, in
the light of the circumstances under which they were made, not
misleading.
(f) The Underwriters shall have received on the Closing Date an
opinion of Simpson Thacher & Bartlett, counsel for the Underwriters, dated the
Closing Date and addressed to you, with respect to such matters as you may
reasonably request.
(g) The Underwriters shall have received letters addressed to you,
dated the date hereof and the Closing Date, from Deloitte & Touche LLP,
independent certified public accountants, substantially in the forms heretofore
approved by you.
(h)(i) No order suspending the effectiveness of the registration
statement or the Registration Statement or prohibiting or suspending the use of
the Prospectus (or any amendment or supplement thereto) or any Prepricing
Prospectus or any sales material shall have been issued and no proceedings for
such purpose or for the purpose of commencing an enforcement action against the
Trust, the Adviser or, with respect to the transactions contemplated by the
Prospectus (or any amendment or supplement thereto) and this Agreement, the
Underwriters, may be pending before or, to the knowledge of the Trust, the
Adviser or the Underwriters or in the reasonable view of counsel to the
Underwriters, shall be threatened or contemplated by the Commission at or prior
to the Closing Date and that any request for additional information on the part
of the Commission (to be included in the Registration Statement, the Prospectus
or otherwise) be complied with to the satisfaction of the Underwriters; (ii)
there shall not have been any change in the shares of beneficial interest of the
Trust nor any material increase in the short-term or long-term debt of the Trust
(other than in the ordinary course of business) from that set forth or
contemplated in the Registration Statement or the Prospectus (or any amendment
or supplement thereto); (iii) there shall not have been, subsequent to the
respective dates as of which information is given in the Registration Statement
and the Prospectus (or any amendment or supplement thereto), except as may
otherwise be stated in the Registration Statement and Prospectus (or any
amendment or supplement thereto), any material adverse change in the condition
(financial or other), business, prospects, properties, net assets or results of
operations of the Trust or the Adviser; (iv) the Trust shall not have any
liabilities or obligations, direct or contingent (whether or not in the ordinary
course of business), that are material to the Trust, other than those reflected
in the Registration Statement or the Prospectus (or any amendment or supplement
to either of them); and (v) all the representations and warranties of the Trust
and the Adviser contained in this Agreement shall be true and correct on and as
of the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date, and the Underwriters shall have received a certificate of the
Trust and the Adviser, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of each of the Trust and the Adviser (or
such other officers as are acceptable to the Underwriters), to the effect set
forth in this Section 9(h) and in Section 9(i) hereof.
(i) That neither the Trust nor the Adviser shall have failed at or
prior to the Closing Date to have performed or complied in all material respects
with any of its agreements herein contained and required to be performed or
complied with by it hereunder at or prior to the Closing Date.
(j) The Trust shall have delivered and the Underwriters shall have
received evidence satisfactory to the Underwriters that each series of Shares
are rated 'aaa' by Moody's and AAA by S&P as of the Closing Date, and there
shall not have been given any notice of any intended or potential downgrading,
or of any review for a potential downgrading, in the rating accorded to the
shares of each series of the Shares by Moody's or S&P.
(k) The Trust and the Adviser shall have furnished or caused to be
furnished to you such further certificates and documents as you shall have
reasonably requested.
All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to the Underwriters and the Underwriters'
counsel.
Any certificate or document signed by any officer of the Trust or
the Adviser and delivered to the Underwriters, or to counsel for the
Underwriters, shall be deemed a representation and warranty by the Trust or the
Adviser to the Underwriters as to the statements made therein.
10. Expenses. The Trust agrees to pay the following costs and
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the registration statement (including financial
statements and exhibits thereto), each Prepricing Prospectus, the Prospectus and
each amendment or supplement to any of them (including, without limitation, the
filing fees prescribed by the 1933 Act, the 1940 Act and the Rules and
Regulations); (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, each Prepricing Prospectus, the
Prospectus, any sales material and all amendments or supplements to any of them
as may be reasonably requested for use in connection with the offering and sale
of the Shares; (iii) the preparation, printing, authentication, issuance and
delivery of certificates for the Shares, including any stamp taxes in connection
with the original issuance and sale of the Shares; (iv) the reproduction and
delivery of this Agreement, any dealer agreements, the preliminary blue sky
memorandum and all other agreements or documents reproduced and delivered in
connection with the offering of the Shares; (v) the reasonable fees, expenses
and disbursements of counsel for the Underwriters relating to the preparation,
reproduction, and delivery of the preliminary blue sky memorandum; (vi) fees
paid to Moody's and S&P; (vii) the transportation and other expenses incurred by
or on behalf of Trust representatives in connection with presentations to
prospective purchasers of the Shares; and (viii) the fees and expenses of the
Trust's accountants and the fees and expenses of counsel for the Trust and of
the transfer agent [provided, that (a) the Trust, the Adviser and the
Underwriters shall pay their own costs and expenses in attending any information
meeting relating to the Trust, (b) the Underwriters shall pay the costs and
expenses of any sales material prepared by it in connection with the public
offering of the Shares, (c) the Underwriters shall pay the costs and expenses of
any "tombstone" advertisements, and (d) except as provided in this Section and
in Section 5 hereof, the Underwriters shall pay their own costs and expenses,
including the fees and expenses of their counsel.]
11. Effective Date of Agreement. This Agreement shall become
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the registration statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the registration statement or such
post-effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Trust,
by notifying the Underwriters, or by the Underwriters, by notifying the Trust.
If any one or more of the Underwriters shall fail or refuse to
purchase Shares which it or they are obligated to purchase hereunder on the
Closing Date, and the aggregate number of Shares which such defaulting
Underwriter or Underwriters are obligated but fail or refuse to purchase is not
more than one-tenth of the aggregate number of Shares which the Underwriters are
obligated to purchase on the Closing Date, each non-defaulting Underwriter shall
be obligated, severally, in the proportion which the number of Shares set forth
opposite its name in Schedule I hereto bears to the aggregate number of Shares
set forth opposite the names of all non-defaulting Underwriters or in such other
proportion as you may specify, to purchase the Shares which such defaulting
Underwriter or Underwriters are obligated, but fail or refuse, to purchase. If
any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they are obligated to purchase on the Closing Date and the aggregate
number of Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Shares which the Underwriters are obligated
to purchase on the Closing Date and arrangements satisfactory to you and the
Trust for the purchase of such Shares by one or more non-defaulting Underwriters
or other party or parties approved by you and the Trust are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter, the Trust or the Adviser. In any such
case which does not result in termination of this Agreement, either you or the
Trust shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and the Prospectus or any other documents or arrangements
may be effected. Any action taken under this paragraph shall not relieve any
defaulting Underwriter from liability in respect of any such default of any such
Underwriter under this Agreement. The term "Underwriter" as used in this
Agreement includes, for all purposes of this Agreement, any party not listed in
Schedule I hereto who, with your approval and the approval of the Trust,
purchases Shares which a defaulting Underwriter is obligated, but fails or
refuses, to purchase.
Any notice under this Section 11 may be given by telegram, telecopy
or telephone but shall be subsequently confirmed by letter.
12. Termination of Agreement. This Agreement shall be subject to
termination in the Underwriters' absolute discretion, without liability on the
part of any Underwriter to the Trust or the Adviser, by notice to the Trust or
the Adviser, if prior to the Closing Date (i) trading in the Shares or the
Trust's common shares of beneficial interest or securities generally on the NYSE
shall have been suspended or materially limited or minimum prices shall have
been established on the NYSE, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other international or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Shares at the offering
price to the public set forth on the cover page of the Prospectus or to enforce
contracts for the resale of the Shares by the Underwriters. Notice of such
termination may be given to the Trust by telegram, telecopy or telephone and
shall be subsequently confirmed by letter.
13. Information Furnished by the Underwriters. The statements set
forth in the last paragraph on the cover page and the statements in the
________, ________ and _________ paragraphs under the caption "Underwriting" in
any Prepricing Prospectus and in the Prospectus, constitute the only information
furnished by or on behalf of the Underwriters through you as such information is
referred to in Sections 6(b) and 8 hereof.
14. Miscellaneous. Except as otherwise provided in Sections 5, 11
and 12 hereof, notice given pursuant to any provision of this Agreement shall be
in writing and shall be delivered (i) if to the Trust or the Adviser, at the
office of the Trust at 500 Boylston Street, Boston, Massachusetts 02116,
Attention: _____________; or (ii) if to the Underwriters, to Salomon Smith
Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Trust, the Adviser, their directors and officers, and the
other controlling persons referred to in Section 8 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from the Underwriters of any of the Shares in his
status as such purchaser.
15. Applicable Law; Counterparts. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
A copy of the document establishing the Trust is filed with the
Secretary of The Commonwealth of Massachusetts. This Agreement is executed by
officers not as individuals and is not binding upon any of the Trustees,
officers, or shareholders of the Trust individually but only upon the assets of
the Trust.
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Trust, the Adviser and the several Underwriters.
Very truly yours,
MFS MUNICIPAL INCOME TRUST
By:
-------------------------------
MASSACHUSETTS FINANCIAL SERVICES
COMPANY
By:
-------------------------------
Confirmed as of the date first above mentioned.
SALOMON SMITH BARNEY INC.
By:
-------------------------------
Director
<PAGE>
SCHEDULE I
MFS MUNICIPAL INCOME TRUST
Number of
Shares of
each of Series
Underwriter and Series
----------- --------------
Salomon Smith Barney Inc. ................. 2,800 T
---------
2,800 TH
----------
<PAGE>
SCHEDULE II
MFS MUNICIPAL INCOME TRUST
SUBSIDIARIES OF MASSACHUSETTS FINANCIAL SERVICES COMPANY
MFS Investment Management K.K.
MFS Fund Distributors, Inc.
MFS Service Center, Inc.
MFS Institutional Advisors, Inc.
MFS International Ltd.
MFS Investment Management (LUX) S.A.
MFS Original Research Partners, LLC
Vertex Investment Management, Inc.
MFS Retirement Services, Inc.
MFS Heritage Trust Company
MFS Institutional Advisors (Australia) Ltd.
MFS Original Research Advisors, LLC
MFS International (U.K.) Limited
MFS International S.C. Lida (Brazil)
