<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
JANUARY 26, 1998
1940 ACT FILE NO. 811-4975
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940 |X|
Amendment No. 11 |X|
MFS MULTIMARKET INCOME TRUST
(Exact Name of Registrant as Specified in Charter)
500 Boylston Street, Boston, Massachusetts 02116
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 617-954-5000
Stephen E. Cavan
Secretary and Clerk
MFS Multimarket Income Trust
c/o Massachusetts Financial Services Company
500 Boylston Street
Boston, Massachusetts 02116
(Name and Address of Agent for Service)
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
1. Exhibits:
(a)(1) -- Declaration of Trust, dated
January 9, 1987; filed herewith.
(a)(2) -- Amendment to Declaration of Trust,
dated January 30, 1987; filed herewith.
(a)(3) -- Amendment to Declaration of Trust,
dated April 19, 1989; filed herewith.
(b)(1) -- Amended and Restated By-Laws dated
December 21, 1994 (previously filed as
Exhibit (2)(b)(3) to Amendment No. 9 to
the Registration Statement on Form N-2
filed with the SEC on February 28, 1995
("Amendment No. 9")); incorporated
herein by reference.
(c) -- Inapplicable.
(d) -- Specimen certificate for Shares of
Beneficial Interest, without par value;
filed herewith.
(e) -- The section "Dividend Reinvestment
and Cash Purchase Plan" on page 3 of
the Registrant's Annual Report to its
Shareholders, for its fiscal year ended
October 31, 1997; incorporated herein by
reference.
(f) -- Inapplicable.
(g)(1) -- Investment Advisory Agreement,
dated February 25, 1987; filed herewith.
(g)(2) Administrative Services Agreement, dated
March 1, 1997, between Massachusetts
Financial Services Company and the
Registrant; filed herewith.
(h) -- Omitted pursuant to General
Instruction G.3. to Form N-2.
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(i) -- Retirement Plan for Non-Interested
Person Trustees, dated January 1, 1991;
filed herewith.
(j)(1) -- Custodian Agreement dated February
25, 1987; filed herewith.
(j)(2) -- Amendment to Custodian Agreement
dated October 1, 1989; filed herewith.
(j)(3) -- Amendment to Custodian Agreement
dated February 29, 1988; filed herewith.
(j)(4) -- Amendment to Custodian Agreement
dated December 28, 1990; filed herewith.
(j)(5) -- Amendment to the Custodian
contract, dated September 17, 1991;
filed herewith.
(k)(1) -- Registrar, Transfer Agency and
Service Agreement, dated August 15, 1994
(previously filed as Exhibit (2)(k)(2)
to Amendment No. 9 ("Amendment No. 9"));
incorporated herein by reference.
(k)(2) -- Credit Agreement dated as of
November 10, 1992 between Registrant
and Chase Manhattan Bank, N.A.; filed
herewith.
(l) -- Omitted pursuant to General
Instruction G.3 to Form N-2.
(m) -- Inapplicable.
(n) -- Omitted pursuant to General
Instruction G.3 to Form N-2.
(o) -- Omitted pursuant to General
Instructions G.3 to Form N-2.
(p) -- Form of Purchase Agreement; filed
herewith.
(q) -- Inapplicable.
(r) -- Inapplicable.
Power of Attorney, dated August 11, 1994
(previously filed with Amendment No. 9);
incorporated herein by reference.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Boston and Commonwealth of Massachusetts on the 22nd day of January, 1998.
MFS MULTIMARKET INCOME TRUST
By: JAMES R. BORDEWICK, JR.
Name: James R. Bordewick, Jr.
Title: Assistant Secretary
SIGNATURE TITLE
A. KEITH BRODKIN* Chairman, President (Principal
A. Keith Brodkin Executive Officer) and Trustee
W. THOMAS LONDON* Treasurer (Principal Financial Officer
W. Thomas London and Principal Accounting Officer)
RICHARD B. BAILEY* Trustee
Richard B. Bailey
MARSHALL N. COHAN* Trustee
Marshall N. Cohan
LAWRENCE H. COHN, M.D.* Trustee
Lawrence H. Cohn, M.D.
<PAGE>
SIR J. DAVID GIBBONS* Trustee
Sir J. David Gibbons
ABBY M. O'NEILL* Trustee
Abby M. O'Neill
WALTER E. ROBB, III* Trustee
Walter E. Robb, III
ARNOLD D. SCOTT* Trustee
Arnold D. Scott
JEFFREY L. SHAMES* Trustee
Jeffrey L. Shames
J. DALE SHERRATT* Trustee
J. Dale Sherratt
WARD SMITH* Trustee
Ward Smith
*By: JAMES R. BORDEWICK, JR.
Name: James R. Bordewick, Jr.
as Attorney-in-fact
Executed by James R. Bordewick, Jr.,
on behalf of those indicated pursuant to
a Power of Attorney dated
August 11, 1994; previously filed with
Amendment No. 9; incorporated
herein by reference.
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
(a)(1) Declaration of Trust, dated January 9, 1987.
(a)(2) Amendment to Declaration of Trust, dated January 30, 1987.
(a)(3) Amendment to Declaration of Trust, dated April 24, 1989.
(d) Specimen certificate for Shares of Beneficial Interest,
without par value.
(g)(1) Investment Advisory Agreement, dated February 25, 1987.
(g)(2) Administrative Services Agreement, dated March 1, 1997,
between Massachusetts Financial Services Company and the
Registrant.
(i) Retirement Plan for Non-Interested Person Trustees, dated
January 1, 1991.
(j)(1) Custodian Agreement dated February 25, 1987.
(j)(2) Amendment to Custodian Agreement dated October 1, 1989.
(j)(3) Amendment to Custodian Agreement dated February 29, 1988.
(j)(4) Amendment to Custodian Agreement dated December 28, 1990.
(j)(5) Amendment to the Custodian contract, dated September 17,
1991.
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description of Exhibit
(k)(2) Credit Agreement dated as of November 10, 1992 between
Registrant and Chase Manhattan Bank, N.A.
(p) Form of Purchase Agreement.
<PAGE>
EXHIBIT NO. 99(a)(1)
MFS HIGH YIELD MARKETS TRUST
DECLARATION OF TRUST
Dated January 9, 1987
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I - Name and Definitions 1
Section 1.1 Name
Section 1.2 Definitions
ARTICLE II - Trustees 2
Section 2.1 Number of Trustees
Section 2.2 Term of Office of Trustees
Section 2.3 Resignation and Appointment of
Trustees
Section 2.4 Vacancies
Section 2.5 Delegation of Power to Other
Trustees
ARTICLE III - Powers of Trustees 4
Section 3.1 General
Section 3.2 Investments
Section 3.3 Legal Title
Section 3.4 Issuance and Repurchase of
Securities
Section 3.5 Borrowing Money; Lending Trust
Property
Section 3.6 Delegation; Committees
Section 3.7 Collection and Payment
Section 3.8 Expenses
Section 3.9 Manner of Acting; By-Laws
Section 3.10 Miscellaneous Powers
Section 3.11 Principal Transactions
Section 3.12 Trustees and Officers as
Shareholders
ARTICLE IV - Investment Adviser, Distributor and
Transfer Agent 8
Section 4.1 Investment Adviser
Section 4.2 Distributor
Section 4.3 Transfer Agent
Section 4.4 Parties to Contract
<PAGE>
PAGE
ARTICLE V - Limitations of Liability of
Shareholders, Trustees and Others 10
Section 5.1 No Personal Liability of
Shareholders, Trustees, etc.
Section 5.2 Non-Liability of Trustees, etc.
Section 5.3 Mandatory Indemnification
Section 5.4 No Bond Required of Trustees
Section 5.5 No Duty of Investigation; Notice
in Trust Instruments, etc.
Section 5.6 Reliance on Experts, etc.
ARTICLE VI - Shares of Beneficial Interest 13
Section 6.1 Beneficial Interest
Section 6.2 Rights of Shareholders
Section 6.3 Trust Only
Section 6.4 Issuance of Shares
Section 6.5 Register of Shares
Section 6.6 Transfer of Shares
Section 6.7 Notices
Section 6.8 Voting Powers
ARTICLE VII - Determination of Net Asset Value, Net
Income and Distributions 16
ARTICLE VIII - Duration; Termination of Trust; Amendment;
Mergers, Etc. 16
Section 8.1 Duration
Section 8.2 Termination of Trust
Section 8.3 Amendment Procedure
Section 8.4 Merger, Consolidation and Sale
of Assets
Section 8.5 Incorporation and Reorganization
Section 8.6 Conversion
Section 8.7 Certain Transactions
<PAGE>
PAGE
ARTICLE IX - Reports to Shareholders 21
ARTICLE X - Miscellaneous 21
Section 10.1 Filing
Section 10.2 Governing Law
Section 10.3 Counterparts
Section 10.4 Reliance by Third Parties
Section 10.5 Provisions in Conflict with Law
or Regulations
SIGNATURE PAGE 23
<PAGE>
DECLARATION OF TRUST
OF
MFS HIGH YIELD MARKETS TRUST
Dated January 9, 1987
DECLARATION OF TRUST made January 9, 1987 by the Trustees:
WHEREAS, the Trustees desire to establish a trust for the investment
and reinvestment of funds contributed thereto); and
WHEREAS, the Trustees desire that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest, as
hereinafter provided:
NOW THEREFORE, the Trustees hereby declare that all money and property
contributed to the trust established hereunder shall be held and managed in
trust for the benefit of holders, from time to time, of the shares of beneficial
interest issued hereunder and subject to the provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1 Name. The name of the trust created hereby is the "MFS
High Yield Markets Trust."
Section 1.2 Definitions. Wherever they are used herein, the
following terms have the following respective meanings:
(a) "By-Laws" means the By-laws referred to in Section 3.9 hereof, as
from time to time amended.
(b) the terms "Commission," "Interested Person," and "Majority
Shareholder Vote," (the 67% or 50% requirement of the third sentence of Section
2(a)(42) of the 1940 Act, whichever may be applicable) have the meanings given
them in the 1940 Act.
(c) "Declaration" means this Declaration of Trust as amended from time
to time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein" and "hereunder" shall be deemed to refer to this Declaration rather
than the article or section in which such words appear.
(d) "Distributor" means the party, other than the Trust, to the
contract described in Section 4.2 hereof.
(e) "Investment Adviser" means a party furnishing services to the Trust
pursuant to any contract described in Section 4.1
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hereof.
(f) The "1940 Act" means the Investment Company Act of 1940 and the
Rules and Regulations thereunder, as amended from time to time.
(g) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof, whether domestic or foreign.
(h) "Shareholder" means a record owner of outstanding Shares.
(i) "Shares" means the Shares of Beneficial Interest into which the
beneficial interest in the Trust shall be divided from time to time and includes
fractions of Shares as well as whole Shares.
(j) "Transfer Agent" means the party, other than the Trust, to a
contract described in Section 4.3 hereof.
(k) The "Trust" means the entity specified in Section 1.1 above.
(l) The "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees.
(m) The "Trustees" means the persons who have signed the Declaration,
so long as they shall continue in office in accordance with the terms hereof,
and all other persons who may from time to time be duly elected, qualified and
serving as Trustees in accordance with the provisions hereof, and reference
herein to a Trustee or the Trustees shall refer to such person or persons in
their capacity as trustees hereunder.
ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees. The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than three (3) nor more than fifteen (15). No reduction in
the number of Trustees shall have the effect of removing any Trustee from office
prior to the expiration of his term unless the Trustee is specifically removed
pursuant to Section 2.2 of this Article II at the time of the decrease.
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Section 2.2. Term of Office of Trustees. The Board of Trustees shall be
divided into three classes. Within the limits above specified, the number of
Trustees in each class shall be determined by resolution of the Board of
Trustees. The term of office of all of the Trustees shall expire on the date of
first annual meeting of shareholders or special meeting in lieu thereof
following the effective date of the Registration Statement relating to the
Shares under the Securities Act of 1933, as amended. The term of office of the
first class shall expire on the date of the second annual meeting of
shareholders or special meeting in lieu thereof. The term of office of the
second class shall expire on the date of the third annual meeting of
shareholders or special meeting in lieu thereof. The term of office of the third
class shall expire on the date of the fourth annual meeting of shareholders or
special meeting in lieu thereof. Upon expiration of the term of office of each
class as set forth above, the number of Trustees in such class, as determined by
the Board of Trustees, shall be elected for a term expiring on the date of the
third annual meeting of shareholders or special meeting in lieu thereof
following such expiration to succeed the Trustees whose terms of office expire.
The Trustees shall be elected at an annual meeting of the shareholders or
special meeting in lieu thereof called for that purpose, except as provided in
Section 2.3 of this Article and each Trustee elected shall hold office until his
successor shall have been elected and shall have qualified; except (a) that any
Trustee may resign his trust (without need for prior or subsequent accounting)
by an instrument in writing signed by him and delivered to the other Trustees,
which shall take effect upon such delivery or upon such later date as is
specified therein; (b) that any Trustee may be removed (provided the aggregate
number of Trustees after such removal shall not be less than the number required
by Section 2.1 hereof) with cause, at any time by written instrument, signed by
at least two-thirds of the remaining Trustees, specifying the date when such
removal shall become effective; (c) that any Trustee who requests in writing to
be retired or who has become incapacitated by illness or injury may be retired
by written instrument signed by a majority of the other Trustees, specifying the
date of his retirement; and (d) a Trustee may be removed at any meeting of
Shareholders by a vote of two-thirds of the outstanding Shares. Upon the
resignation or removal of a Trustee, or his otherwise ceasing to be a Trustee,
he shall execute and deliver such documents as the remaining Trustees shall
require for the purpose of conveying to the Trust or the remaining Trustees any
Trust property held in the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall execute and
deliver on his behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
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Section 2.3. Resignation and Appointment of Trustees. In case of the
declination, death, resignation, retirement, removal or inability of any of the
Trustees, or in case a vacancy shall, by reason of an increase in number, or for
any other reason, exist, the remaining Trustees shall fill such vacancy by
appointing such other person as they in their discretion shall see fit. Such
appointment shall be evidenced by a written instrument signed by a majority of
the Trustees in office. Any such appointment shall not become effective,
however, until the person named in the written instrument or appointment shall
have accepted in writing such appointment and agreed in writing to be bound by
the terms of the Declaration. Within twelve months of such appointment, the
Trustees shall cause notice of such appointment to be mailed to each Shareholder
at his address as recorded on the books of the Trustees. An appointment of a
Trustee may be made by the Trustees then in office and notice thereof mailed to
Shareholders as aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation or increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. The power of appointment is subject to the provisions of Section 16(a)
of the 1940 Act.
Section 2.4. Vacancies. The death, declination, resignation,
retirement, removal or incapacity of the Trustees, or any one of them, shall not
operate to annul the Trust or to revoke any existing agency created pursuant to
the terms of this Declaration. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled as provided in Section 2.3, the
Trustees in office, regardless of their number, shall have all the powers
granted to the Trustees and shall discharge all the duties imposed upon the
Trustees by the Declaration. A written instrument certifying the existence of
such vacancy signed by a majority of the Trustees shall be conclusive evidence
of the existence of such vacancy.
Section 2.5. Delegation of Power to Other Trustees. Any Trustee may, by
power of attorney, delegate his power for a period not exceeding six (6) months
at any one time to any other Trustee or Trustees; provided that in no case shall
less than two (2) Trustees personally exercise the powers granted to the
Trustees under the Declaration except as herein otherwise expressly provided.
ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General. The Trustees shall have exclusive and
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were
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<PAGE>
the sole owners of the Trust Property and business in their own right, but with
such powers of delegation as may be permitted by the Declaration. The Trustees
shall have power to conduct the business of the Trust and carry on its
operations in any and all of its branches and maintain offices both within and
without The Commonwealth of Massachusetts, in any and all states of the United
States of America, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions, agencies or
instrumentalities of the United States of America and of foreign governments and
to do all such other things and execute all such instruments as the Trustees
deem necessary, proper or desirable in order to promote the interests of the
Trust although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust made by the Trustees
in good faith shall be conclusive. In construing the provisions of the
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 3.2. Investments. (a) The Trustees shall have the power to:
(i) conduct, operate and carry on the business of an
investment company;
(ii) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, own, hold, pledge, sell, assign, transfer, exchange,
distribute, lend or otherwise deal in or dispose of United States and foreign
currencies, any form of gold and other precious metals, commodity contracts,
options, contracts for the future acquisition or delivery of securities and
securities of every nature and kind, including, without limitation, all types of
bonds, debentures, stocks, negotiable or non-negotiable instruments,
obligations, evidences of indebtedness, certificates of deposit or indebtedness,
commercial paper, repurchase agreements, bankers' acceptances, and other
securities of any kind, issued, created, guaranteed or sponsored by any and all
Persons, including, without limitation, states, territories and possessions of
the United States and the District of Columbia and any political subdivisions,
agencies or instrumentalities thereof and the United States Government, any
foreign government, any political subdivisions thereof or their agencies or
instrumentalities, international instrumentalities or by any bank or savings
institution, or by any corporation or organization organized under the laws of
the United States or of any state, territory or possession thereof, or by any
corporation or organization organized under any foreign law, or in "when issued"
contracts
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<PAGE>
for any such securities, or retain Trust assets in cash and from time to time
change the investments of the assets of the Trust; and to exercise any and all
rights, powers and privileges of ownership or interest in respect of any and all
such investments of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with power to
designate one or more persons, firms, associations or corporations to exercise
any of said rights, powers and privileges in respect of any of said instruments.
(iii) to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, and to do every other
act or thing incidental or appurtenant to or connected with the aforesaid
purposes, objects or powers.
(b) The Trustees shall not be limited to investing in
obligations maturing before the possible termination of the Trust, nor shall the
Trustees be limited by any law limiting the investments which may be made by
fiduciaries.
Section 3.3. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person as nominee, on such terms as the Trustees may determine. The right,
title and interest of the Trustees in the Trust Property shall vest
automatically in each Person who may hereafter become a Trustee. Upon the
resignation, removal or death of a Trustee he shall automatically cease to have
any right, title or interest in any of the Trust Property, and the right, title
and interest of such Trustee in the Trust Property shall vest automatically in
the remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
Section 3.4. Issuance and Repurchase of Securities. The Trustees shall
have the power to issue, sell, repurchase, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VII and VIII hereof, to apply to any
such retirement, cancellation or acquisition of Shares any funds or property of
the Trust whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of the Commonwealth of Massachusetts governing
business corporations.
Section 3.5. Borrowing Money; Lending Trust Property. The Trustees
shall have power to borrow money or otherwise obtain
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credit and to secure the same by mortgaging, pledging or otherwise subjecting as
security the assets of the Trust, to endorse, guarantee, or undertake the
performance of any obligation, contract or engagement of any other Person and to
lend Trust property.
Section 3.6. Delegation; Committees. The Trustees shall have power to
delegate from time to time to such of their number or to officers, employees or
agents of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Trustees or
otherwise as the Trustees may deem expedient.
Section 3.7. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.
Section 3.8. Expenses. The Trustees shall have the power to incur and
pay any expenses which in the opinion of the Trustees are necessary or
incidental to carry out any of the purposes of the Declaration, and to pay
reasonable compensation from the funds of the Trust to themselves as Trustees.
The Trustees shall fix the compensation of all officers, employees and Trustees.
Section 3.9. Manner of Acting; By-Laws. Except as otherwise provided
herein or in the By-Laws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of all the Trustees.
The Trustees may adopt By-Laws not inconsistent with this Declaration to provide
for the conduct of the business of the Trust and may amend or repeal such
By-Laws to the extent such power is not reserved to the Shareholders.
Section 3.10. Miscellaneous Powers. The Trustees shall have the power
to: (a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations; (c) remove Trustees or
fill vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider appropriate, and
appoint from their own number, and terminate, any one or more committees which
may exercise some or all of the power and
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authority of the Trustees as the Trustees may determine; (d) purchase, and pay
for out of Trust Property, insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, distributors,
selected dealers or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not constituting
negligence, or whether or not the Trust would have the power to indemnify such
Person against such liability; (e) establish pension, profit sharing, share
purchase, and other retirement, incentive and benefit plans for any Trustees,
officers, employees and agents of the Trust; (f) to the extent permitted by law,
indemnify any person with whom the Trust has dealings, including the Investment
Adviser, Distributor, Transfer Agent, and selected dealers, to such extent as
the Trustees shall determine; (g) guarantee indebtedness or contractual
obligations of others; (h) determine and change the fiscal year of the Trust and
the method by which its accounts shall be kept; and (i) adopt a seal for the
Trust but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust.
Section 3.11. Principal Transactions. Except in transactions permitted
by the 1940 Act, or any order of exemption issued by the Commission, the
Trustees shall not, on behalf of the Trust, buy any securities (other than
Shares) from or sell any securities (other than Shares) to, or lend any assets
of the Trust to, any Trustee or officer of the Trust or any firm of which any
such Trustee or officer is a member of the Trust or any firm of which any such
Trustee or officer is a member acting as principal, or have any such dealings
with the Investment Adviser, Distributor, or Transfer Agent or with any
Interested Person of such Person; but the Trust may employ any such Person, or
firm or company in which such Person is an Interested Person, as broker, legal
counsel, registrar, transfer agent, dividend disbursing agent or custodian upon
customary terms.
Section 3.12. Trustees and Officers as Shareholders. No officer,
Trustee or Member of the Advisory Board of the Trust, and no member, partner,
officer, director or trustee of the Investment Adviser or of the Distributor,
and no Investment Adviser or Distributor of the Trust, shall take long or short
positions in the securities issued by the Trust.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR AND TRANSFER AGENT
Section 4.1. Investment Adviser. Subject to a Majority Shareholder
Vote, the Trustees may in their discretion from time to time enter into one or
more investment advisory or management contracts whereby a party to such
contract shall
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<PAGE>
undertake to furnish the Trust such management, investment advisory, statistical
and research facilities and services, promotional activities, and such other
facilities and services, if any, as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine. Notwithstanding any provisions of the Declaration,
the Trustees may delegate to the Investment Adviser authority (subject to such
general or specific instructions as the Trustees may from time to time adopt) to
effect purchases, sales, loans or exchanges of assets of the Trust on behalf of
the Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of the
Investment Adviser (and all without further action by the Trustees). Any such
purchases, sales, loans or exchanges shall be deemed to have been authorized by
all the Trustees.
Section 4.2. Distributor. The Trustees may in their discretion from
time to time enter into a contract, providing for the sale of Shares whereby the
Trust may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as the Trustees may in their
discretion determine not inconsistent with the provisions of this Article IV or
the By-Laws; and such contract may also provide for the sale of Shares by such
other party as principal or as agent of the Trust and may provide that such
other party may enter into selected dealer agreements with registered securities
dealers to further the purpose of the distribution of the Shares.
Section 4.3. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract or
contracts whereby the other party to such contract shall undertake to furnish
transfer agency and/or shareholder services to the Trust. The contract or
contracts shall have such terms and conditions as the Trustees may in their
discretion determine not inconsistent with the Declaration or the By-Laws. Such
services may be provided by one or more Persons.
Section 4.4. Parties to Contract. Any contract of the character
described in Sections 4.1, 4.2 or 4.3 of this Article IV or any Custodian
contract, as described in the By-laws, may be entered into with any Person,
although one or more of the Trustees or officers of the Trust may be an officer,
partner, director, trustee, shareholder, or member of such other party to the
contract, and no such contract shall be invalidated or rendered voidable by
reason of the existence of any such relationship; nor shall any Person holding
such relationship be liable merely by reason of such relationship for any loss
or expense to the Trust under or by reason of said contract or accountable for
any profit realized directly or indirectly
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therefrom, provided that the contract when entered into was not inconsistent
with the provisions of this Article IV or the By-laws. The same Person may be
the other party to contracts entered into pursuant to Sections 4.1, 4.2 and 4.3
above or Custodian contracts, and any individual may be financially interested
or otherwise affiliated with Persons who are parties to any or all of the
contracts mentioned in this Section 4.4.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 5.1. No Personal Liability of Shareholders, Trustees, etc.
Subject to Section 5.3, no Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with Trust Property or the
acts, obligations or affairs of the Trust. No Trustee, officer, employee or
agent of the Trust shall be subject to any personal liability whatsoever to any
Person, other than the Trust or its Shareholders, in connection with Trust
Property or the affairs of the Trust, save only that arising from bad faith,
willful misfeasance, gross negligence or reckless disregard for his duty to such
Person; and all such Persons shall look solely to the Trust Property for
satisfaction of claims of any nature arising in connection with the affairs of
the Trust. If any Shareholder, Trustee, officer, employee, or agent, as such, of
the Trust, is made a party to any suit or proceeding to enforce any such
liability, he shall not, on account thereof, be held to any personal liability.
The Trust shall indemnify and hold each Shareholder harmless from and against
all claims and liabilities to which such Shareholder may become subject by
reason of his being or having been a Shareholder, and shall reimburse such
Shareholder for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The rights accruing to a
Shareholder under this Section 5.1 shall not exclude any other right to which
such Shareholder may be lawfully entitled, nor shall anything herein contained
restrict the right of the Trust to indemnify or reimburse a Shareholder in any
appropriate situation even though not specifically provided herein.
Section 5.2. Non-Liability of Trustees, etc. Subject to Section 5.3, no
Trustee, officer, employee or agent of the Trust shall be liable to the Trust,
its Shareholders, or to any Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties.
Section 5.3. Mandatory Indemnification. (a) Subject to the
exceptions and limitations contained in paragraph (b) below:
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(i) every person who is or has been a Trustee or officer of
the Trust shall be indemnified by the Trust against all liability and against
all expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit," or "proceeding"
shall apply to all claims, actions, suits or proceedings (civil, criminal, or
other, including appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee
or officer:
(i) against any liability to the Trust or the Shareholders by
reason of a final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office;
(ii) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable belief
that his action was in the best interest of the Trust;
(iii) in the event of a settlement involving a payment by a
Trustee or officer or other disposition not involving a final adjudication as
provided in paragraph (b) (i) or (b) (ii) resulting in a payment by a Trustee or
officer, unless there has been either a determination that such Trustee or
officer did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office by the
court or other body approving the settlement or other disposition or by a
reasonable determination, based upon a review of readily available facts (as
opposed to a full trial-type inquiry) that he did not engage in such conduct:
(A) by vote of a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter); or
(B) by written opinion of independent legal counsel.
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(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a Person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such Person. Nothing contained herein shall affect any rights
to indemnification to which personnel other than Trustees and officers may be
entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit, or proceeding of the character described in paragraph (a) of this
Section 5.3 shall be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the recipient to repay such
amount if it is ultimately determined that he is not entitled to indemnification
under this Section 5.3, provided that either
(i) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses arising out of
any such advances; or
(ii) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in office
act on the matter) or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 5.3, a "Disinterested Trustee" is one (i) who
is not an "Interested Person" of the Trust (including anyone who has been
exempted from being an "Interested Person" by any rule, regulation or order of
the Commission), and (ii) against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or had been pending.
Section 5.4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 5.5. No Duty of Investigation; Notice in Trust Instruments,
etc. No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust shall be bound to make
any inquiry concerning the validity of any transaction purporting to be made by
the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract,
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instrument, certificate, Share, other security of the Trust or undertaking, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under the Declaration or in their capacity as
officers, employees or agents of the Trust. Every written obligation, contract,
instrument, certificate, Share, other security of the Trust or undertaking made
or issued by the Trustees shall recite that the same is executed or made by them
not individually, but as Trustees under the Declaration, and that the
obligations of any such instrument are not binding upon any of the Trustees or
Shareholders, individually, but bind only the trust estate, and may contain any
further recital which they or he may deem appropriate, but the omission of such
recital shall not operate to bind any of the Trustees or Shareholders
individually. The Trustees shall at all times maintain insurance for the
protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
Section 5.6. Reliance on Experts, etc. Each Trustee and officer or
employee of the Trust shall, in the performance of his duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by the Investment Adviser, the Distributor,
Transfer Agent, selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable shares of beneficial interest, all
of one class, without par value. The number of shares of beneficial interest
authorized hereunder is unlimited. All Shares issued hereunder including,
without limitation, Shares issued in connection with a dividend in Shares or a
split of Shares, shall be fully paid and non-assessable.
Section 6.2. Rights of Shareholders. The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
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Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to assume any losses of the Trust or suffer an assessment of any kind by
virtue of their ownership of Shares. The Shares shall be personal property
giving only the rights in the Declaration specifically set forth. The Shares
shall not entitle the holder to preference, preemptive, appraisal, conversion or
exchange rights.
Section 6.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in the Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 6.4. Issuance of Shares. The Trustees, in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times, and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing their
proportionate beneficial interests in Trust. Contributions to the Trust may be
accepted for whole Shares and/or l/l,000ths of a Share or integral multiples
thereof.
Section 6.5. Register of Shares. A register shall be kept at the
principal office of the Trust or at an office of the Transfer Agent which shall
contain the names and addresses of the Shareholders and the number of Shares
held by them respectively and a record of all transfers thereof. Such register
shall be conclusive as to who are the holders of the Shares and who shall be
entitled to receive dividends or distributions or otherwise to exercise or enjoy
the rights of Shareholders. No Shareholder shall be entitled to receive payment
of any dividend or distribution, nor to have notice given to him as herein or in
the By-Laws provided, until he has given his address to the Transfer Agent or
such other officer or agent of the Trustees as shall keep the said register for
entry thereon. The Trustees, in their discretion, may authorize the issuance of
Share certificates and promulgate appropriate rules and regulations as to their
use.
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Section 6.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with any certificate of
certificates (if issued) for such Shares and such evidence of the genuiness of
each such execution and authorization and of other matters as may reasonably be
required. Upon such delivery the transfer shall be recorded on the register of
the Trust. Until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or register nor any officer, employee or agent
of the Trust shall be affected by any notice of the proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent; but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 6.7. Notices. Any and all notices to which any Shareholder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
Section 6.8. Voting Powers. The Shareholders shall have power to vote
only (i) for the election of Trustees or for their removal as provided in
Section 2.2 hereof, (ii) with respect to any investment advisory or management
contract as provided in Section 4.1 hereof, (iii) with respect to termination of
the Trust as provided in Section 8.2, (iv) with respect to any amendment of the
Declaration to the extent and as provided in Section 8.3, (v) with respect to
any merger, consolidation, conversion or sale of assets as provided in Sections
8.4, 8.5 and 8.7, (vi) with respect to incorporation of the Trust to the extent
and as provided in Section 8.5, (vii) to the same extent as the stockholders of
a Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, and (viii) with
respect to such additional matters relating to the Trust as may be required by
the Declaration, the By-Laws or any registration of the Trust with the
Commission (or any successor agency) or any state, or as the Trustees may
consider necessary or desirable. Each whole Share shall be entitled to one vote
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as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote, except that Shares held in the
treasury of the Trust shall not be voted. There shall be no cumulative voting in
the election of Trustees. Until Shares are issued, the Trustees may exercise all
rights of Shareholders and may take any action required by law, the Declaration
or the By-Laws to be taken by Shareholders. The By-Laws may include further
provisions for Shareholders' votes and meetings and related matters.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
The Trustees, in their absolute discretion, may prescribe and shall set
forth in the By-Laws or in a duly adopted vote of the Trustees such bases and
times for determining the per Share net asset value of the Shares or net income,
or the declaration and payment of dividends and distributions, as they may deem
necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST; AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation
of time but subject to the provisions of this Article VIII.
Section 8.2. Termination of Trust. (a) The Trust may be terminated (i)
by the affirmative vote of the holders of not less than two-thirds of the Shares
outstanding and entitled to vote at any meeting of Shareholders, or (ii) by an
instrument in writing, without a meeting, signed by a majority of the Trustees
and consented to by the holders of not less than two-thirds of such Shares. Upon
the termination of the Trust:
(i) The Trust shall carry on no business except for the
purpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs of the
Trust and all the powers of the Trustees under this Declaration shall continue
until the affairs of the Trust shall have been wound up, including the power to
fulfill or discharge the contracts of the Trust, collect its assets, sell,
convey, assign, exchange, transfer or otherwise dispose of all or any part of
the remaining Trust Property to one or more persons at public or private sale
for consideration which may consist in whole or in part of cash, securities or
other property of any kind, discharge or pay its liabilities, and to do all
other acts appropriate to liquidate its business; provided, that any
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sale, conveyance, assignment, exchange, transfer or other disposition of all or
substantially all the Trust Property shall require Shareholder approval in
accordance with Section 8.4 hereof; and
(iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly in cash
and partly in kind, among the Shareholders according to their respective rights.
(b) After termination of the Trust and distribution to the
Shareholders as herein provided, a majority of the Trustees shall execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties hereunder, and the rights and interests of
all Shareholders shall thereupon cease.
Section 8.3. Amendment Procedure. (a) Except as provided in paragraph
(c) of this Section 8.3 this Declaration may be amended by a Majority
Shareholder Vote or by an instrument in writing, without a meeting, signed by a
majority of the Trustees and consented to by the holders of not less than a
majority of the Shares outstanding and entitled to vote. The Trustees may also
amend this Declaration without the vote or consent of Shareholders to change the
name of the Trust, to supply any omission, to cure, correct or supplement any
ambiguous, defective or inconsistent provision hereof, or if they deem it
necessary to conform this Declaration to the requirements of applicable federal
laws or regulations or the requirements of the regulated investment company
provisions of the Internal Revenue Code, but the Trustees shall not be liable
for failing so to do.
(b) No amendment may be made under this Section 8.3 which would change
any rights with respect to any Shares by reducing the amount payable thereon
upon liquidation of the Trust or by diminishing or eliminating any voting rights
pertaining thereto, except with the vote or consent of the holders of two-thirds
of the Shares outstanding and entitled to vote. Nothing contained in this
Declaration shall permit the amendment of this Declaration to impair the
exemption from personal liability of the Shareholders, Trustees, Officers,
employees and agents of the Trust or to permit assessment upon Shareholders.
(c) No amendment may be made under this Section 8.3 which shall amend,
alter, change or repeal any of the provisions of Sections 8.3, 8.4, 8.6 and 8.7
unless the amendment effecting such amendment, alteration, change or repeal
shall
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receive the affirmative vote or consent of sixty-six and two-thirds percent (66
2/3%) of the Shares outstanding and entitled to vote. Such affirmative vote or
consent shall be in addition to the vote or consent of the holders of Shares
otherwise required by law or by the terms of any class or series of preferred
stock, whether now or hereafter authorized, or any agreement between the Trust
and any national securities exchange.
(d) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by the
Trustees as aforesaid or a copy of the Declaration, as amended, and executed by
a majority of the Trustees, shall be conclusive evidence of such amendment when
lodged among the records of the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
Section 8.4. Merger, Consolidation and Sale of Assets. The Trust may
merge or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property, including its good will, upon such terms and conditions and for
such consideration when and as authorized at any meeting of Shareholders called
for the purpose by the affirmative vote of the holders of not less than
two-thirds of the Shares outstanding and entitled to vote, or by an instrument
or instruments in writing without a meeting, consented to by the holders of not
less than two-thirds of such Shares, provided, however, that if such merger,
consolidation, sale, lease or exchange is recommended by the Trustees, the vote
or written consent of the holders of a majority of Shares outstanding and
entitled to vote, shall be sufficient authorization; and any such merger,
consolidation, sale, lease or exchange shall be deemed for all purposes to have
been accomplished under and pursuant to the statutes of the Commonwealth of
Massachusetts. Nothing contained herein shall be construed as requiring approval
of shareholder for any sale of assets in the ordinary course of business of the
Trust.
Section 8.5. Incorporation and Reorganization. With the approval of the
holders of a majority of the Shares outstanding and entitled to vote, the
Trustees may cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction, or any other trust,
partnership, association or other organization to take over all of the Trust
Property or to carry on any business in which the Trust shall
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directly or indirectly have any interest, and to sell, convey and transfer the
Trust Property to any such corporation, trust, partnership, association or
organization in exchange for the shares or securities thereof or otherwise and
to lend money to, subscribe for the shares or securities of, and enter into any
contracts with any such corporation, trust, partnership, association or
organization in which the Trust holds or is about to acquire shares or any other
interest. Subject to section 8.4 hereof, the Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling, conveying
or transferring a portion of the Trust Property to such organization or
entities.
Section 8.6. Conversion. Notwithstanding any other provision of this
Declaration, the conversion of the Trust from a "closed-end company" to an
"open-end company," as those terms are defined in Sections 5(a)(2) and 5(a)(1),
respectively, of the 1940 Act as in effect on December 1, 1986, shall require
the affirmative vote or consent of the holders of sixty-six and two-thirds
percent (66 2/3%) of the Shares outstanding and entitled to vote. Such
affirmative vote or consent shall be in addition to the vote or consent of the
holders of the Shares otherwise required by law or by the terms of any class or
series of preferred stock, whether now or hereafter authorized, or any agreement
between the Trust and any national securities exchange.
Section 8.7. Certain Transactions. (a) Notwithstanding any other
provision of this Declaration and subject to the exceptions provided in
paragraph (d) of this Section, the types of transactions described in paragraph
(c) of this Section shall require the affirmative vote or consent of the holders
of sixty-six and two-thirds (66 2/3%) of the Shares outstanding and entitled to
vote, when a Principal Shareholder (as defined in paragraph (b) of this Section)
is a party to the transaction. Such affirmative vote or consent shall be in
addition to the vote or consent of the holders of Shares otherwise required by
law or by the terms of any class or series of preferred stock, whether now or
hereafter authorized, or any agreement between the Trust and any national
securities exchange.
(b) The term "Principal Shareholder" shall mean any corporation, person
or other entity which is the beneficial owner, directly or directly, of more
than five percent (5%) of the outstanding Shares and shall include any affiliate
or associate, as such terms are defined in clause (ii) below, of a
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Principal Shareholder. For the purposes of this Section, in addition to the
Shares which a corporation, person or other entity beneficially owns directly,
(a) any corporation, person or other entity shall be deemed to be the beneficial
owner of any Shares (i) which it has the right to acquire pursuant to any
agreement or upon exercise of conversion rights or warrants, or otherwise (but
excluding share options granted by the Trust) or (ii) which are beneficially
owned, directly or indirectly (including Shares deemed owned through application
of clause (i) above), by any other corporation, person or entity with which its
"affiliate" or "associate" (as defined below) has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
Shares, or which is its "affiliate", or "associate" as those terms are defined
in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934 as in effect on December 1, 1986, and (b) the outstanding Shares
shall include Shares deemed owned through application of clauses (i) and (ii)
above but shall not include any other Shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any subsidiary of the
Trust with or into any Principal Shareholder.
(ii) The issuance of any securities of the Trust to any Principal
Shareholder for cash.
(iii) The sale, lease or exchange of all or any substantial part of the
assets of the Trust to any Principal Shareholder (except assets
having an aggregate fair market value of less than $1,000,000,
aggregating for the purpose of such computation all assets sold,
leased or exchanged in any series of similar transactions within a
twelve-month period.)
(iv) The sale, lease or exchange to the Trust or any subsidiary
thereof, in exchange for securities of the Trust of any assets of
any Principal Shareholder (except assets having an aggregate fair
market value of less than $1,000,000, aggregating for the purposes
of such computation all assets sold, leased or exchanged in any
series of similar transactions within a twelve-month period).
(d) The provisions of this Section shall not be applicable to (i) any
of the transactions described in paragraph (c) of this Section if the Board of
Trustees of the Trust shall by resolution have approved a memorandum of
understanding with such Principal Shareholder with respect to and substantially
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consistent with such transaction, or (ii) any such transaction with any
corporation of which a majority of the outstanding shares of all classes of
stock normally entitled to vote in elections of directors is owned of record or
beneficially by the Trust and its subsidiaries.
(e) The Board of Trustees shall have the power and duty to determine
for the purposes of this Section on the basis of information known to the Trust,
whether (i) a corporation, person or entity beneficially owns more than five
percent (5%) of the outstanding Shares, (ii) a corporation, person or entity is
an "affiliate" or "associate" (as defined above) of another, (iii) the assets
being acquired or leased to or by the Trust or any subsidiary thereof,
constitute a substantial part of the assets of the Trust and have an aggregate
fair market value of less than $1,000,000, and (iv) the memorandum of
understanding referred to in paragraph (d) hereof is substantially consistent
with the transaction covered thereby. Any such determination shall be conclusive
and binding for all purposes of this Section.
ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the transactions of the Trust, including financial
statements which shall at least annually be certified by independent public
accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Filing. This Declaration and any amendment hereto shall
be filed in the office of the Secretary of the Commonwealth of Massachusetts and
in such other places as may be required under the laws of Massachusetts and may
also be filed or recorded in such other places as the Trustees deem appropriate.
Each amendment so filed shall be accompanied by a certificate signed and
acknowledged by a Trustee stating that such action was duly taken in a manner
provided herein, and unless such amendment or such certificate sets forth some
later time for the effectiveness of such amendment, such amendment shall be
effective upon its filing. A restated Declaration, integrating into a single
instrument all of the provisions of the Declaration which are then in effect and
operative, may be executed from time to time by a majority of the Trustees and
shall, upon filing with the Secretary of the Commonwealth of Massachusetts, be
conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration and the various amendments
thereto.
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Section 10.2. Governing Law. This Declaration is executed by the
Trustees and delivered in the Commonwealth of Massachusetts and with reference
to the laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said State.
Section 10.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument or
writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders present
at any meeting or executing any written instrument satisfies the requirements of
this Declaration, (e) the form of any By-Laws adopted by or the identity of any
officers elected by the Trustees, or (f) the existence of any fact or facts
which in any manner relate to the affairs of the Trust, shall be conclusive
evidence as to the matters so certified in favor of any Person dealing with the
Trustees and their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of the Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code, or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of the
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of the Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
-22-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this instrument this 9th day
of January, 1987.
ARNOLD D. SCOTT
Arnold D. Scott, as
Trustee and not individually
200 Berkeley Street
Boston, Massachusetts
W. THOMAS LONDON
W. Thomas London, as Trustee
and not individually
200 Berkeley Street
Boston, Massachusetts
DANIEL M. JAFFE
Daniel M. Jaffe, as Trustee
and not individually
200 Berkeley Street
Boston, Massachusetts
-23-
<PAGE>
COMMONWEALTH OF MASSACHUSETTS
SUFFOLK, SS BOSTON, MASSACHUSETTS
January 9, 1987
Then personally appeared the above-named Arnold D. Scott, W. Thomas
London and Daniel M. Jaffe, and who severally acknowledged the foregoing
instrument to be their free act and deed.
Before me,
ELEIN F. WEBSTER
Elein F. Webster
Notary Public
My Commission Expires: 12/4/92
-24-
<PAGE>
EXHIBIT NO. 99(a)(2)
MFS HIGH YIELD MARKETS TRUST
CERTIFICATION OF AMENDMENT TO DECLARATION OF TRUST
The undersigned, constituting all of the Trustees of MFS High Yield
Markets Trust (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts pursuant to a Declaration of Trust dated January
9, 1987 (the "Declaration"), do hereby certify, as provided by the provisions of
Section 8.3(d) of the Declaration, that in accordance with the provisions of the
last sentence of Section 8.3(a), a majority of the Trustees of the Trust, by
vote duly adopted by a majority of the Trustees as of January 30, 1987, amended
the Declaration as follows:
1. Section 1.1 is amended to read in its entirety:
Section 1.1. Name. The name of the trust created hereby is
the "MFS Multimarket Income Trust.'"
IN WITNESS WHEREOF, the undersigned have executed this certificate this
30th day of January 1987.
ARNOLD D. SCOTT
Arnold D. Scott
W. THOMAS LONDON
W. Thomas London
DANIEL M. JAFFE
Daniel M. Jaffe
<PAGE>
EXHIBIT NO. 99(a)(3)
MFS MULTIMARKET INCOME TRUST
CERTIFICATION OF AMENDMENT TO DECLARATION OF TRUST
The undersigned, constituting all of the Trustees of MFS Multimarket
Income Trust (the "Trust"), a business trust organized under the laws of the
Commonwealth of Massachusetts pursuant to a Declaration of Trust (the
"Declaration"), dated January 9, 1987, as amended, do hereby certify, as
provided by the provisions of Section 8.3(d) of the Declaration, that in
accordance with the provisions of Section 8.3(a) of the Declaration, the
shareholders of the Trust, by a vote duly adopted by a majority of the
outstanding voting securities of the Trust (as defined in the Investment Company
Act of 1940) on April 19, 1989, amended the Declaration as follows:
1. Section 3.4 is amended to read in its entirety:
Section 3.4. Issuance and Repurchase of Securities.
The Trustees shall have the power to issue, sell,
repurchase, retire, cancel, acquire, hold, resell, reissue,
dispose of, transfer, and otherwise deal in Shares, bonds,
debentures, notes or other instruments evidencing
indebtedness and, to apply to any such retirement,
cancellation or acquisition of Shares, bonds, debentures,
notes or other instruments evidencing indebtedness any funds
or property of the Trust whether capital or surplus or
otherwise, to the full extent now or hereafter permitted by
the laws of the Commonwealth of Massachusetts governing
business corporations.
IN WITNESS WHEREOF, the undersigned have executed this certificate this
19 day of April 1989.
RICHARD B. BAILEY LAWRENCE T. PERERA
Richard B. Bailey Lawrence T. Perera
A. KEITH BRODKIN WILLIAM J. POORVU
A. Keith Brodkin William J. Poorvu
NELSON J. DARLING, JR. CHARLES W. SCHMIDT
Nelson J. Darling, Jr. Charles W. Schmidt
JOHN LOWELL
John Lowell
<PAGE>
EXHIBIT NO. 99(d)
MFS MULTIMARKET INCOME TRUST
ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
THIS CERTIFICATE IS TRANSFERABLE IN BOSTON AND IN NEW YORK CITY
SHARES OF BENEFICIAL INTEREST SHARES OF BENEFICIAL INTEREST
WITHOUT PAR VALUE WITHOUT PAR VALUE
C U S I P_____________________
SEE REVERSE FOR
CERTAIN DEFINITIONS
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF
MFS Multimarket Income Trust, transferable on the books of the Trust by the
holder hereof in person or by duly authorized attorney upon surrender of this
Certificate properly endorsed. This Certificate and the shares represented
hereby are issued and shall be subject to all of the provisions of the
Declaration of Trust and By-Laws of the Trust, each as from time to time
amended, (copies of which are on file with the Transfer Agent), to all of which
the holder by acceptance hereof assents. This Certificate is not valid until
countersigned and registered by the Transfer Agent and Registrar.
Witness the facsimile seal of the Trust and the facsimile signatures of
its duly authorized officers.
Dated: MFS MULTIMARKET INCOME TRUST
BY:
W. THOMAS LONDON
W. Thomas London
TREASURER PRESIDENT
COUNTERSIGNED AND REGISTERED:
STATE STREET BANK AND TRUST COMPANY
(BOSTON)
TRANSFER AGENT
AND REGISTRAR,
<PAGE>
EXHIBIT NO. 99(g)(1)
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this 25th day of February, 1987, by and
between MFS MULTIMARKET INCOME TRUST, a Massachusetts business trust (the
"Trust"), and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation
(the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as a closed-end investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide business management services to the
Trust (the "Fund") 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 the Adviser. The Adviser shall provide the Fund with such
investment advice and supervision as the latter may from time to time consider
necessary for the proper supervision of its funds. The Adviser shall act as
Adviser to the Fund and as such shall furnish continuously an investment program
and shall determine from time to time what securities shall be purchased, sold
or exchanged and what portion of the assets of the Fund shall be held
uninvested, subject always to the restrictions of its Declaration of Trust,
dated January 9, 1987, and By-Laws, as each may be amended from time to time
(respectively, the "Declaration" and the "By-Laws"), to the provisions of the
Investment Company Act of 1940 and the Rules, Regulations and orders thereunder
and to the Fund's then current Prospectus. The Adviser shall also make
recommendations as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Fund's portfolio
securities shall be exercised. Should the Trustees at any time, however, make
any definite determination as to investment policy and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Adviser shall take, on behalf of the Fund,
all actions which it deems necessary to implement the investment policies
determined as provided above, and in particular to place all orders for the
purchase or sale of portfolio securities for the Fund's account with brokers or
dealers selected by it, and to that end the Adviser is authorized as the agent
of the Fund to give instructions to the Custodian of the Fund as to deliveries
of securities and payments of cash for the account of the Fund. In connection
with the selection of such brokers or dealers and the placing of such orders,
the Adviser is directed to seek for the Fund execution at the best available
price. Subject to this requirement of seeking the best available price,
securities may be bought from or sold to broker dealers who have furnished
statistical, research and other information or services to the Adviser.
-1-
<PAGE>
2. Allocation of Charges and Expenses. The Adviser shall furnish at its
own expense investment advisory and administrative services, office space,
equipment and clerical personnel necessary for servicing the investments of the
Fund and maintaining its organization, and investment advisory facilities and
executive and supervisory personnel for managing the investments, effecting the
portfolio transactions of the Fund. The Adviser shall arrange, if desired by the
Fund, for directors, officers and employees of the Adviser to serve as Trustees,
officers or agents of the Fund if duly elected or appointed to such positions
and subject to their individual consent and to any limitations imposed by law.
It is understood that the Fund will pay all of its own expenses including,
without limitation, compensation of Trustees not "affiliated" with the Adviser;
governmental fees; interest charges; taxes; membership dues in the Investment
Company Institute allocable to the Fund; fees and expenses of independent
auditors, of legal counsel and of any transfer agent, registrar or dividend
disbursing agent of the Fund; expenses of servicing shareholder accounts;
expenses of preparing, printing and mailing share certificates, shareholder
reports, notices, proxy statements and reports to governmental officers and
commissions; brokerage and other expenses connected with the execution,
recording and settlement of portfolio security transactions; insurance premiums;
fees and expenses of the custodian for all services to the Fund, including
safekeeping of funds and securities; and maintaining required books and
accounts; expenses of calculating the net asset value of shares of the Fund;
expenses of shareholder meetings, and expenses relating to the issuance,
registration and qualification of shares of the Trust and the preparation,
printing and mailing of prospectuses for such purposes (except to the extent
that any Distribution Agreement to which the Fund is a party provides that
another party is to pay some or all of such expenses.
3. Compensation of the Adviser. For the services to be rendered and the
facilities to be provided, the Trust shall pay to the Adviser out of the assets
of the Fund an investment advisory fee computed and paid monthly in an amount
equal to the sum of 34% of the Fund's average daily net assets plus 5.4% of the
Fund's gross income (i.e., income other than gains from the sale of securities,
short-term gains from options and futures transactions and premium income from
options written), in each case on an annual basis for the Fund's then-current
fiscal year. If the Adviser shall serve for less than the whole of any period
specified in this Article 3, the compensation to the Adviser will be prorated.
4. Covenants of the Adviser. The Adviser agrees that it will not deal
with itself, or with the Trustees of the Fund or the Fund principal underwriter,
if any, as principals in making purchases or sales of securities or other
property for the account of the Fund, except as permitted by the Investment
Company Act of 1940 and the Rules, Regulations or Orders thereunder, will not
take a long or short position in the shares of the Fund except as permitted by
the Declaration and will comply with all other provisions of the Declaration and
By-Laws and the then-current Prospectus of the Fund relative to the Adviser and
its directors and officers.
-2-
<PAGE>
5. Limitation of Liability of the Adviser. The Adviser shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution and management of
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its duties and
obligations hereunder. As used in this Section 5, the term "Adviser" shall
include directors, officers and employees of the Adviser as well as the
corporation itself.
6. Activities of the Adviser. The services of the Adviser to the Fund
are not to be deemed to be exclusive, the Adviser being free to render
investment advisory and/or other services to others. The Adviser may permit
other Fund clients to use the initials "MFS" in their names. The Fund agrees
that if the Adviser shall for any reason no longer serve as Adviser to the Fund,
the Fund will change its name so as to delete the initials "MFS". It is
understood that Trustees, officers and shareholders of the Fund are or may be or
become interested in the Adviser, as directors, officers, employees, or
otherwise and that directors, officers and employees, or otherwise and that
directors, officers and employees of the Adviser are or may be or become
similarly interested in the Fund, and that the Adviser may be or become
interested in the Fund as a shareholder or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective on the day and year first above written and
shall govern the relations between the parties hereto thereafter, and shall
remain in force until August 1, 1988 on which date it will terminate unless its
continuance after August 1, 1988 is "specifically approved at least annually"
(i) by the vote of a majority of the Trustees of the Fund who are not
"interested persons" of the Fund or of the Adviser at a meeting specifically
called for the purpose of voting on such approval, and (ii) by the Board of
Trustees of the Fund, 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 or by "vote of a majority of the outstanding voting securities"
of the Fund, or by the Adviser, in each case on not more than sixty days' nor
less than thirty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its "assignment".
This Agreement may be amended only if such amendment is approved by "vote of a
majority of the outstanding voting securities" of the Fund.
The terms "specifically approved at least annually", "vote of a majority of the
outstanding voting securities", "assignment", "affiliated person", and
"interested person", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
Investment Company Act of 1940 and the Rules and Regulations thereunder,
subject, however, to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered in their names and on their behalf by the undersigned, thereunto
duly authorized, all as of the day and year first above written. The undersigned
Trustee of the Fund has executed this Agreement not individually, but as Trustee
under the Declaration and the obligations of this Agreement are not binding upon
any of the Trustees or shareholders of the Fund, individually, but bind only the
trust estate.
MFS MULTIMARKET INCOME TRUST
By: RICHARD B. BAILEY
Richard B. Bailey,
Chairman and Trustee
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: H. ALDEN JOHNSON, JR.
H. Alden Johnson, Jr.,
President
-4-
<PAGE>
EXHIBIT NO. 99(g)(2)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
MASTER ADMINISTRATIVE SERVICES AGREEMENT dated this 1st day of March, 1997, by
and among Massachusetts Financial Services Company, a Delaware corporation (the
"Administrator"), and each of the funds (or trusts acting on behalf of their
series) identified on Exhibit A hereto (each a "Fund" and collectively the
"Funds").
W I T N E S S E T H:
WHEREAS, the Funds have entered into Investment Advisory Agreements with the
Administrator (the "Advisory Agreements") pursuant to which the Administrator
provides investment advisory services to the Funds;
WHEREAS, the Advisory Agreements recite that the Administrator will bear certain
expenses associated with the provision of investment advisory services and that
the Funds will bear their own expenses, including expenses of legal counsel to
the Funds, expenses connected with the execution, recording and settlement of
the Funds' portfolio security transactions and expenses of calculating the
Funds' net asset values;
WHEREAS, the Administrator, at its expense, has provided a variety of
administrative services to the Funds for the benefit of the Funds and their
shareholders; and
WHEREAS, the Funds desire to retain the Administrator to render certain legal,
financial administration and other administrative services to the Funds in the
manner and on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto and hereinafter set forth, the parties covenant and agree as
follows:
1. Administrative Services. Subject to the limitations set forth in the second
paragraph of Section 3 of this Agreement, the Administrator shall render to each
Fund the financial administration services set forth on Exhibit B hereto (the
"Financial Administration Services"), the legal services set forth on Exhibit C
hereto (the "Legal Services") and the other administrative services set forth on
Exhibit D hereto ("Other Administrative Services") (the Financial Administration
Services, Legal Services and Other Administrative Services are collectively
referred to as the "Administrative Services").
The Administrative Services provided by the Administrator to each Fund
may not include all Administrative Services required by the Fund, due to a
number of considerations, including, without limitation, the Administrator's
level of work flow, staffing and resources, the specialized or unique nature of
the Administrative Services and the relative priorities of such Administrative
<PAGE>
Services. The Administrator may, on behalf of each Fund, arrange for or engage
outside legal counsel, accounting or auditing firm or any other outside service
provider or vendor (collectively, "third party vendors") to perform
Administrative Services for the Fund, and the Fund will bear the expense of any
such third party vendors; provided however, that the Administrator shall
promptly inform the Fund's governing board in the event any third party vendor
is engaged to perform Administrative Services for a Fund on a basis that is
expected to generate significant expenses for a Fund.
2. Maintenance of Books and Records. With respect to the provision of
Administrative Services, the Administrator will preserve for each Fund that is
registered as a registered investment company with the Securities and Exchange
Commission (the "SEC") all records required to be maintained as prescribed by
the rules and regulations of the SEC in the manner and for the time periods
prescribed by such rules. The Administrator agrees that all such records shall
be the property and under the control of each Fund for which they are maintained
and shall be made available, within five business days of any request therefor,
to the Fund's Board of Trustees or auditors during regular business hours at the
Administrator's offices. In the event of termination of this Agreement for any
reason, all such records shall be returned, without charge, promptly to the
appropriate Fund, free from any claim or retention of rights by the
Administrator, except that the Administrator may retain copies of such records.
3. Administrative Fee. Each Fund shall pay the Administrator a fee as agreed to
from time to time and as set forth in Exhibit E hereto (the "Administrative
Fee"). The Administrative Fee shall be accrued for each calendar day and the sum
of the daily fee accruals shall be paid monthly to the Administrator on the
second to last business day of each calendar month. If this Agreement becomes
effective or terminates before the end of any calendar month, the Administrative
Fee for the period from the effective date to the end of such calendar month or
from the beginning of such calendar month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
The governing board of each Fund will, on an annual basis, review the
services provided, the Administrator's costs in providing such services, amounts
paid to third party vendors pursuant to the arrangement described in Section 1
and the amount paid by the Fund to the Administrator pursuant to this Agreement
(including the extent to which such amount is greater or lesser than the
Administrator's costs in providing such services) and such other information as
such board may reasonably request.
4. Scope of Administrative Services; Regulatory and Business and Industry
Practice Developments. The Administrative Services to be furnished by the
Administrator include only those services required by a Fund or which are being
furnished by the Administrator at March 1, 1997. In the event that, subsequent
to March 1, 1997, because of regulatory developments, or new or modified
business or industry practices, the Fund requires services in addition to the
Administrative Services, at the request of the Fund, the Administrator will
consider furnishing
-2-
<PAGE>
such additional services, with compensation for such additional services to be
agreed upon with respect to each such occasion as it arises.
5. Non-Exclusivity. The services of the Administrator to the Funds
hereunder are not to be deemed exclusive and the Administrator shall be free
to render similar services to others.
6. Standard of Care. Neither the Administrator, nor any of its directors,
officers, stockholders, agents or employees, shall be liable or responsible to
any Fund or its shareholders for any error of judgment, mistake of law or any
loss arising out of any act or omission in the performance by the Administrator
of its duties under this Agreement, except for liability resulting from (a)
willful misfeasance, (b) bad faith, (c) in the case of Financial Administration
Services, negligence, and, in the case of Legal Services and Other
Administrative Services, gross negligence, in each case on the Administrator's
part or (d) from reckless disregard by the Administrator of its obligations and
duties under this Agreement.
7. Term, Termination, Amendment and Assignment. This Agreement shall begin on
the date first written above and shall continue indefinitely. The Agreement may
be terminated at any time, without payment of any penalty, by the Board of
Directors/Trustees which oversees the Fund upon sixty (60) days' written notice
to the Administrator. This Agreement may be terminated by the Administrator with
respect to any Fund at any time upon sixty (60) days' written notice to the
Fund. This Agreement may be amended at any time by a written agreement executed
by each party hereto and may be assigned with respect to any Fund only with the
written consent of the Fund and the Administrator.
8. Miscellaneous.
a. Captions. The captions in this Agreement are included for
convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise affect
their construction or effect.
b. Governing Law. The provisions of this Agreement shall be
construed and interpreted in accordance with the domestic
substantive laws of The Commonwealth of Massachusetts, without
giving effect to any conflicts or choice of laws rule or
provision that would result in the application of the domestic
substantive laws of any other jurisdiction.
c. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one
and the same instrument.
d. Joinder of Funds. In the event that additional funds are
created from time to time which desire to retain the
Administrator to provide them with Administration Services
pursuant to this Agreement, the Administrator and the
additional fund
-3-
<PAGE>
may jointly amend Schedule A hereto to add the additional
fund, and the additional fund shall thereafter be
deemed a "Fund" for all purposes of this Agreement.
The consent of the other parties to this
Agreement shall not be required to amend Schedule A hereto.
e. Scope of Fund's Obligations. A copy of the Declaration of
Trust of each Fund (or trust of which the Fund is a series)
organized as a Massachusetts business trust (each a
"Trust"), is on file with the Secretary of State of The
Commonwealth of Massachusetts. The Administrator
acknowledges that the obligations of or arising out of this
Agreement are not binding upon any of a 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
thereunder and hereunder. If this Agreement is executed by
the Trust on behalf of one or more series of the Trust, the
Administrator further acknowledges 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
Agreement are binding solely upon the assets or property of
the series on whose behalf the Trust has executed this
Agreement. The Administrator also agrees that the
obligations of each Fund hereunder shall be several and not
joint, in accordance with its proportionate interest
hereunder, and agrees not to proceed (by way of claim,
set-off or otherwise) against any Fund for the obligations
of another Fund.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affiliated, as of the date first written above.
On behalf of the MFS Family of Funds,
MFS Closed-End Funds and MFS
Institutional Funds listed on Exhibit A
hereto
By:/S/ A. KEITH BRODKIN
A. Keith Brodkin
Chairman and President
On behalf of the MFS/Sun Life Series
Trust and Compass Products listed on
Exhibit A hereto
By:/S/ JOHN D. MCNEIL
John D. McNeil
Chairman
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By:/S/ JEFFREY L. SHAMES
Jeffrey L. Shames
President
-5-
<PAGE>
Exhibit A
Funds
I. MFS Family of Funds
MFS Series Trust I:
MFS Managed Sectors Fund
MFS Cash Reserve Fund
MFS World Asset Allocation Fund
MFS Special Opportunities Fund
MFS Aggressive Growth Fund
MFS Research Growth and Income Fund
MFS Equity Income Fund
MFS Core Growth Fund
MFS Convertible Securities Fund
MFS Blue Chip Fund
MFS New Discovery Fund
MFS Science & Technology Fund
MFS Research International Fund
MFS Series Trust II:
MFS Emerging Growth Fund
MFS Capital Growth Fund
MFS Gold & Natural Resources Fund
MFS Intermediate Income Fund
MFS Series Trust III:
MFS High Income Fund
MFS Municipal High Income Fund
MFS Series Trust IV:
MFS Money Market Fund
MFS Government Money Market Fund
MFS Municipal Bond Fund
MFS OTC Fund
MFS Series Trust V:
MFS Total Return Fund
MFS Research Fund
MFS Series Trust VI:
MFS World Total Return Fund
MFS Utilities Fund
MFS World Equity Fund
MFS Series Trust VII:
MFS World Governments Fund
MFS Value Fund
MFS Series Trust VIII:
MFS Strategic Income Fund
MFS World Growth Fund
-6-
<PAGE>
MFS Series Trust IX:
MFS Bond Fund
MFS Limited Maturity Fund
MFS Municipal Limited Maturity Fund
MFS Series Trust X:
MFS Government Mortgage Fund
MFS/Foreign & Colonial Emerging Markets Equity Fund
MFS/Foreign & Colonial International Growth Fund
MFS/Foreign & Colonial International Growth and Income Fund
MFS Municipal Series Trust:
MFS Alabama Municipal Bond Fund
MFS Arizona Municipal Bond Fund
MFS California Municipal Bond Fund
MFS Florida Municipal Bond Fund
MFS Georgia Municipal Bond Fund
MFS Maryland Municipal Bond Fund
MFS Massachusetts Municipal Bond Fund
MFS Mississippi Municipal Bond Fund
MFS New York Municipal Bond Fund
MFS North Carolina Municipal Bond Fund
MFS Pennsylvania Municipal Bond Fund
MFS South Carolina Municipal Bond Fund
MFS Tennessee Municipal Bond Fund
MFS Virginia Municipal Bond Fund
MFS West Virginia Municipal Bond Fund
MFS Municipal Income Fund
MFS Growth Opportunities Fund
MFS Government Securities Fund
Massachusetts Investors Growth Stock Fund
MFS Government Limited Maturity Fund
Massachusetts Investors Trust
II. MFS Closed-End Funds
MFS Municipal Income Trust
MFS Multimarket Income Trust
MFS Government Markets Income Trust
MFS Intermediate Income Trust
MFS Charter Income Trust
MFS Special Value Trust
-7-
<PAGE>
III. MFS Institutional Funds
MFS Institutional Trust:
MFS Institutional Emerging Equities Fund
MFS Institutional Worldwide Fixed Income Fund
MFS Institutional Emerging Markets Income Fund
MFS Institutional International Equity Fund
MFS Institutional Mid-Cap Growth Equity Fund
MFS Institutional Research Fund
MFS Institutional Core Plus Fixed Income Fund
MFS Union Standard Trust:
MFS Union Standard Equity Fund
MFS Variable Insurance Trust:
MFS Emerging Growth Series
MFS Value Series
MFS Research Series
MFS Growth With Income Series
MFS Total Return Series
MFS Utilities Series
MFS High Income Series
MFS World Governments Series
MFS Strategic Fixed Income Series
MFS Bond Series
MFS Limited Maturity Series
MFS Money Market Series
IV. MFS/Sun Life Series Trust
MFS Capital Appreciation Series
MFS Conservative Growth Series
MFS Government Securities Series
MFS World Governments Series
MFS High Yield Series
MFS Managed Sectors Series
MFS Money Market Series
MFS Total Return Series
MFS Utilities Series
MFS World Growth Series
MFS Zero Coupon Series 2000
MFS Research Series
MFS World Asset Allocation Series
MFS World Total Return Series
MFS Emerging Growth Series
MFS/Foreign & Colonial International Growth and Income Series
MFS/Foreign & Colonial International Growth Series
MFS/Foreign & Colonial Emerging Markets Equity Series
MFS Value Series
-8-
<PAGE>
V. Compass Products
MFS Capital Appreciation Variable Account
MFS Government Securities Variable Account
MFS World Governments Variable Account
MFS High Yield Variable Account
MFS Managed Sectors Variable Account
MFS Money Market Variable Account
MFS Total Return Variable Account
-9-
<PAGE>
Exhibit B
Financial Administration Services
The Administrator shall perform the following Financial Administration
Services for each Fund:
A. General Services.
1. Prepare such financial information of the Fund as is
reasonably necessary for reports to shareholders of the
Fund, reports to the Fund's governing board and officers,
and reports to appropriate regulatory authorities including,
without limitation, prospectuses, shareholder reports,
shareholder notices, proxy statements and other periodic
reports and render statements or copies of records as from
time to time are reasonably requested by the Fund.
2. Facilitate audits of accounts by the Fund's independent
public accountants or by any of the auditors employed or
engaged by the Fund or by any regulatory body with
jurisdiction over the Fund. Coordinate with, and monitor
the performance of, the custodian banks retained by the Fund
to perform the necessary custodial services for the Fund
including, without limitation, the safekeeping of the funds
and securities.
3. Negotiate contracts for computing the Fund's net asset value
per share, and, if applicable, its public offering price
and/or its daily dividend rates and money market yields and
other investment performance quotations, in accordance with
sub-paragraph C below, and notify the Fund and such other
persons as the Fund may reasonably request of the net asset
value per share, the public offering price and/or its daily
dividend rates and money market yields and other investment
performance quotations.
B. Valuation of Securities. The Administrator shall ensure that the value of the
Fund's securities is computed in accordance with governing law, rules and
regulations, the Fund's governing instruments and subject to the oversight and
direction of the Fund's governing body. The Administrator may use one or more
external pricing services in computing the value of a Fund's securities,
including broker/dealers, provided that the Fund's governing body or an
individual designated by the Fund's governing body has approved the use of such
pricing services.
C. Computation of Net Asset Value, Public Offering Price, Daily Dividend Rates
and Performance Quotations. The Administrator shall assure that the Fund's net
asset value, net income, public offering price, dividend rates and money market
yields, if applicable, and other investment performance quotations are
calculated in a manner and at such time or times as the
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Fund shall direct and in accordance with governing law, rules and regulations
and the Fund's governing instruments and subject to the oversight and direction
of the Fund's governing board.
D. Other Financial Administration Services. In addition, the Administrator shall
provide the following Financial Administration Services:
(1) Provide Treasurers or Assistant Treasurers to serve as
officers of the Fund;
(2) Coordinate the meetings of the Audit Committees, assure that
meetings are scheduled and that agendas are prepared;
participate in meetings of the Audit Committee;
(3) Review contracts and negotiate fees for the Fund for services
such as independent audit fees, custodian fees, transfer agent
fees and the fees of other service providers to the Fund;
(4) Oversee the preparation of accounting records required to be
maintained by the Fund. Assure that any audit of Fund records
is coordinated and completed timely;
(5) Direct the preparation of Fund Financial Statements and
Footnotes. Assure that all statements and disclosures are in
accordance with generally accepted accounting principles and
that disclosures meet current regulatory or accounting
requirements;
(6) Assure that all distributions of the Fund meet the distribution
and excise tax requirements to assure qualification and to
minimize taxes paid by the Fund;
(7) Establish the tax policies and procedures for the Fund; maintain
procedures and policies with respect to tax matters; maintain
tax accounting records of the Fund; complete or review tax
returns and excise tax forms for the Fund; assist in preparing
the 1099-DIV information delivered to shareholders;
(8) Complete materials for the governing board of the Fund,
including materials for board meetings and in connection with
the renewal of investment advisory and distribution contracts;
(9) Direct the accrual of Fund expenses; review and approve all
invoices submitted to the Fund; and
(10) Perform or arrange for the performance of all other Financial
Administration Services required of the Fund.
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Exhibit C
Legal Services
The Administrator shall provide the following Legal Services to each
Fund:
A. Organizational Matters and Initial Registration. The Administrator
shall perform the following functions relating to the organization and initial
registration of the Fund:
Draft and file with appropriate regulatory authorities the
Fund's charter documents;
Draft, negotiate and file with appropriate regulatory
authorities the Fund's service contracts;
Prepare and file the Fund's registration statement or other
similar registration documentation with appropriate regulatory
authorities (the "Registration Statement") and negotiate with such
regulatory authorities; and
Otherwise arrange for and oversee registration and qualification
of the Fund's shares.
B. Ongoing Regulatory Filings, Reports and Meetings. The Administrator
shall perform the following functions relating to ongoing regulatory filings,
reports and meetings of the Fund:
Prepare and file with appropriate regulatory authorities
amendments to the Fund's Registration Statement;
Prepare and file with appropriate regulatory authorities
supplements to the Fund's prospectus and statement of additional
information;
Design and write documents or materials required to be prepared
by or on behalf of the Fund for distribution to shareholders of
the Fund, the Fund's governing board and officers and any
governmental officers or commissions as required of the Fund and
not otherwise provided for under this Agreement including, without
limitation, prospectuses, shareholder reports, shareholder notices
and proxy statements;
Prepare and file or oversee preparation and review and provide
legal guidance on the Fund's annual, semi-annual and other
periodic reports;
Prepare and file or oversee preparation and provide legal
guidance on the Fund's tax filings and reports;
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Prepare and file with appropriate regulatory authorities the
Fund's proxy statement and negotiate with such regulatory
authorities;
Prepare and file with appropriate regulatory authorities various
reports in order to maintain the Fund's status in good standing;
Arrange for shareholders' meetings;
Prepare the Fund's representatives who will attend shareholder
meetings and all necessary materials in connection with such
meetings including, without limitation, a written script for such
meetings, shareholder minutes and any follow-up documents; and
Attend shareholder meetings.
C. Securities Trading and Investment Practices. The Administrator shall
perform the following functions relating to the Fund's securities trading and
investment practices:
Review and negotiate private placement and municipal securities
offering documentation and provide legal guidance on transfer
restrictions;
Provide guidance on legal considerations relating to the
purchase of foreign securities;
Draft and negotiate documentation necessary to permit the Fund to
engage in a variety of derivative and securities trading practices
and provide legal guidance with respect to these practices;
Negotiate the Fund's line of credit documentation; and
Provide legal guidance on applicable laws regulating the types
and levels of ownership of securities by the Fund.
D. Regulated Activities. Applicable securities laws regulate numerous aspects of
the Fund's business, including such matters as the Fund's: prospectus
disclosure; investment activities; affiliated transactions; investment in senior
securities; sales, redemptions and exchanges; distribution of income and capital
gains; distribution of Fund shares; board composition; code of ethics; fidelity
bond; custodial services; and investment advisory and distribution contracts.
The Administrator will provide the Fund with legal guidance with respect to
these matters and to the general application of securities laws to the Fund's
business.
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E. Tax Considerations. The Administrator shall perform the following functions
relating to the application of tax rules to the Fund:
Provide legal guidance with respect to the application of tax
rules to the Fund and analyze from a tax perspective new types of
securities purchased by the Fund, new investment practices engaged
in by the Fund and new investment products or practices adopted by
the Fund; and
Draft and/or review sections of the Fund's prospectus describing
the tax consequences of an investment in the Fund.
F. Board Considerations. The Administrator shall perform the following functions
with respect to the Fund's governing board:
Provide advice concerning applicable rules governing the
composition of the Fund's governing board;
Coordinate, prepare materials for and attend board and
committee meetings and coordinate any follow up issues; and
Provide guidance and prepare materials on legal issues relevant
to the Fund's business.
G. Miscellaneous/Extraordinary Events. The Administrator shall perform the
following miscellaneous functions for the Fund:
Provide legal guidance with respect to litigation brought by the
Fund and against the Fund and negotiate litigation settlements and
pre-litigation settlements and work-out arrangements;
Obtain the required documentation to be filed in connection with
any lawsuits against the Fund and provide information or expertise
on administrative matters affecting such litigation;
Provide legal guidance on alternative distribution structures for
the Fund's shares (such as the adoption of a multiple class
structure);
Review all contracts concerning the acquisition of other
investment companies or the liquidation of the Fund, draft,
negotiate and file various documentation required in connection
therewith, provide guidance on the manner such transactions should
be structured to comply with applicable law and obtain legal
opinions and regulatory authority rulings necessary for such
transactions to comply with applicable law;
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Seek formal guidance from regulatory authorities concerning the
application of various regulations to the Fund and seek exemptive
relief where appropriate; and
Provide or arrange for all other Legal Services required of the
Fund and not otherwise provided for under this Agreement other
than the services of any counsel retained to represent the members
of the governing boards of the funds who are not "interested
persons" of the Administrator or its affiliates, as such term is
defined in the Investment Company Act of 1940.
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Exhibit D
OTHER ADMINISTRATIVE SERVICES
The Administrator shall provide the following Other Administrative
Services to each Fund:
(1) Arrange for persons or other entities to serve as transfer
agent, registrar or dividend disbursing agent as required by the
Fund;
(2) Arrange for a line of credit in the event of an unanticipated
redemption of shares;
(3) Arrange for consideration by the Board of appropriate or
necessary insurance coverage for the Fund;
(4) Subject to Section 4 hereof, perform or arrange for all
compliance functions required of the Fund;
(5) Prepare, and arrange for the printing and mailing of, any
necessary investment communications;
(6) Arrange for the printing and mailing of any documents or written
materials required to be prepared by or on behalf of the Fund
including, without limitation, stock certificates, prospectuses,
shareholder reports, shareholder notices, proxy statements and
reports to governmental officers and commissions;
(7) Arrange for any other printing, production and delivery services
required of the Fund and not otherwise provided for under this
Agreement;
(8) Provide a system of internal controls adequate to carry-out the
business of the Fund and arrange for the annual report on
internal controls of the Fund and its agents;
(9) Review the Fund's disclosure documents to ensure that
disclosures and policies conform to the Fund's actual operation;
and
(10) Provide for the calculation and timely disbursement of
appropriate regulatory authority registration fees.
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Exhibit E
ADMINISTRATIVE FEE
The Administrative Fee shall be an amount, computed as set forth below,
designed to reimburse the Administrator for its actual costs (excluding costs of
staffing so-called residual matters as set forth in Exhibit #2 to Exhibit H to
the Memorandum to the Trustees of the Funds from Stephen E. Cavan and Joseph W.
Dello Russo dated September 23, 1996 (Offshore Board) or October 1, 1996
(Compass, Crimson, Institutional Products and Red Boards)) for providing the
Financial Administration Services and Legal Services (the "Actual Costs") for
providing such services for a calendar year computed pursuant to the principles
set forth in such Exhibit H, subject to such changes in those principles as may
be agreed to from time to time by the Funds and the Administrator (the "Approved
Budgeted Costs"). In computing its Actual Costs, the Administrator will follow
the cost allocation principles set forth in the Deloitte & Touche LLP Report of
Independent Consultant dated November 29, 1996 under the caption "Review of MFS
Cost Reimbursement Methodologies", subject to such changes as may be agreed to
from time to time by the Funds and the Administrator.
For calendar year 1997, the Approved Budgeted Costs are agreed to be
$5.5 million, such amount to be pro rated from the effective date of this
Agreement. For each subsequent calendar year, the Approved Budgeted Costs shall
be an amount agreed to by the Funds and the Administrator prior to the beginning
of the year, provided that, until Approved Budgeted Costs for a year are agreed
to, the Approved Budgeted Costs and Administrative Fee for the prior year shall
remain in effect.
Subject to the adjustments required by the next paragraph, the
Administrative Fee for a calendar year shall be computed by allocating the
Approved Budgeted Costs for that year among the Funds based on each Fund's
average daily net assets for its then-current fiscal year at rates reflecting a
basic rate on the first $1 billion of net assets of a Fund, a 16 2/3% discount
from the basic rate on the next $1 billion, a 33 1/3% discount from the basic
rate on the next $1 billion, and the elimination of any charge on assets in
excess of $3 billion. For 1997 the rates shall be:
0.0150% on first $1 billion;
0.0125% on next $1 billion;
0.0100% on next $1 billion;
0.0% on amounts in excess of $3 billion
in each case on an annualized basis for a Fund's then-current
fiscal year.
In the event that the aggregate amount of all Administrative Fees
received by the Administrator during a calendar year at any time equals 110% of
the amount of the Approved Budgeted Costs for that year, no further payments of
Administrative Fees shall be made by the Funds to the Administrator for that
calendar year. In the event that the aggregate amount of the
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Administrative Fees received by the Administrator for a calendar year is less
than the amount of the Approved Budgeted Costs for that year, the Administrator
shall not be entitled to recovery of this shortfall during the current calendar
year; however, the amount of such shortfall will be taken into account when
establishing the Administrative Fee for following calendars years. In the event
that the aggregate amount of the Administrative Fees received by the
Administrator for a calendar year is greater than the Administrator's Actual
Costs for that year, such excess fees shall be applied as a credit against the
Administrative Fees payable by the Funds hereunder for the subsequent calendar
year.
The Administrator will provide the Funds with such information as may
reasonably be required to review the Administrator's Actual Costs as of June 30
and December 31 in each year.
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EXHIBIT NO. 99(i)
MFS MULTIMARKET INCOME TRUST
RETIREMENT PLAN FOR NON-INTERESTED PERSON TRUSTEES
MFS Multimarket Income Trust (the "Fund") has adopted this Retirement
Plan for Non-Interested Person Trustees (the "Plan"). The Plan has been
established for the purpose of providing certain benefits to eligible
Independent Trustees of the Fund, or their beneficiaries, after termination of
the Independent Trustees' services as such.
1. DEFINITIONS
The following terms shall have the following meanings:
Accrued Benefit: A benefit which is equal to the Normal
Retirement Benefit calculated using an Independent Trustee's
Years of Service and Annual Compensation as of the determination
date.
Actuarial Equivalent: A benefit equal in value, based on (a)
an interest rate equal to the immediate annuity rate published by
the Pension Guaranty Corporation for the January of the Plan Year
of calculation and (b) the 1983 Individual Annuity Mortality
Tables for Males.
Annual Compensation: The average of the total compensation
(retainer and meeting fees) received by an Independent Trustee
during each of the last three Plan Years preceding his termination
of services as such for which he served either as an Independent
Trustee or a Nonaffiliated Trustee for the entire year; provided,
that if an Independent Trustee served as an Independent Trustee
and/or a Nonaffiliated Trustee for fewer than three full Plan
Years prior to his termination of services, there shall be taken
into account his annualized compensation for the one or more most
recent partial Plan Years (if any) for which he served as an
Independent Trustee or a Nonaffiliated Trustee that, when
aggregated with his full Plan Years, does not exceed three Plan
Years.
Disability: Disability as defined in ss.22(e)(3) of the
Internal Revenue Code of 1986, as amended.
Independent Trustee: A Trustee of the Fund who is not an
"interested person" (as defined in Section 2(a)(19) of the
Investment Company Act of 1940, as amended) of the Fund,
Lifetime Advisers, Inc. ("Lifetime"), Massachusetts Financial
Services Company ("MFS") or MFS Financial Services, Inc. ("FSI").
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Nonaffiliated Trustee: A Trustee of the Fund who has no
material business or professional relationship with the Fund,
Lifetime, MFS or FSI and who is subject to being declared an
"interested person" solely by reason of his relationship with the
Fund, Lifetime, MFS or FSI during the two most recently completed
fiscal years of the Fund.
Normal Retirement Benefit: An annual benefit at Normal
Retirement Date equal to 5% of an Independent Trustee's Annual
Compensation multiplied by the Independent Trustee's whole Years
of Service, up to a maximum of ten Years of Service, payable in
the Normal Form of Benefit, as defined in ss.3(g).
Normal Retirement Date: December 31 of the Plan Year in
which an Independent Trustee attains age 73.
Plan Year: January 1 through December 31.
Retirement: Termination of service of an Independent Trustee
after having completed at least five Years of Service and having
attained age 62, other than: (i) any termination by reason of
death; (ii) any termination by reason of Disability, provided that
any Independent Trustee who suffers a Disability and who has
otherwise satisfied the requirements for Retirement shall have the
right to elect whether his termination is by reason of Retirement
or by reason of Disability; or (iii) any termination resulting
from the Independent Trustee's willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in
the conduct of the office of Independent Trustee ("Misconduct").
Year of Service: A Plan Year during which an Independent
Trustee completed at least six months of service as either a
Nonaffiliated Trustee or an Independent Trustee.
2. ELIGIBILITY
No Trustee of the Fund shall be eligible to participate in the
Plan or be entitled to any rights or benefits hereunder until the
Trustee becomes an Independent Trustee. Each individual who
completes any service as an Independent Trustee on or after the
Effective Date of this Plan, and who so elects in such manner as
the Committee determines from time to time, will be eligible to
participate in the Plan.
3. RETIREMENT DATE; AMOUNT OF BENEFIT
(a) Retirement. Each Independent Trustee shall retire on that
Independent Trustee's Normal Retirement Date, if he has not
previously ceased to perform
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services as an Independent Trustee. Each retired Independent
Trustee is referred to as a "Retired Trustee".
(b) Normal Retirement Benefit. Upon an Independent
Trustee's Retirement on his Normal Retirement Date, the
Independent Trustee shall receive, commencing on his Normal
Retirement Date, his Normal Retirement Benefit.
(c) Early Retirement Benefit. Upon an Independent
Trustee's Retirement prior to his Normal Retirement Date, the
Independent Trustee shall receive an Early Retirement Benefit
commencing on the Independent Trustee's date of Retirement.
The benefit payable on an Independent Trustee's early
Retirement shall be his Accrued Benefit reduced by 5% for
every year that payment of an Early Retirement Benefit
precedes that Trustee's Normal Retirement Date.
(d) Deferred Termination Benefit. If an Independent
Trustee's service as such terminates, other than (i)
termination as a result of his Misconduct or (ii) termination
that constitutes termination by reason of his Retirement,
Disability or death, after he has completed at least five
Years of Service, he shall receive, commencing on the date he
attains age 62, his Accrued Benefit reduced by 55%.
(e) Disability Benefit. If an Independent Trustee's
service as such terminates by reason of his Disability and, if
the Independent Trustee is eligible for Retirement, he elects
that his termination be treated as being by reason of
Disability, he shall receive his Accrued Benefit paid for the
one hundred twenty (120) months immediately following the
month in which his service so terminates. In the event the
Independent Trustee dies before he has received one hundred
twenty (120) payments, monthly payments in the same amount
shall be paid to his beneficiary until the number of payments
to the Independent Trustee plus the number of payments to the
beneficiary equal one hundred twenty (120) payments.
(f) Death Benefit. Each Independent Trustee who
elects to participate in this Plan shall designate a
beneficiary in such form as the Committee approves from time
to time to receive any benefits payable under this Plan in the
event of his death. In the event there is no validly
designated beneficiary in existence on the date of an
Independent Trustee's death, his beneficiary shall be his
surviving spouse, if any, or if none, his estate. The
beneficiary of an Independent Trustee who dies during service,
and with respect to whom benefit payments have not commenced,
shall be entitled to that Independent Trustee's Accrued
Benefit paid for the one hundred twenty (120) months
immediately following death.
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(g) Form of Benefit. Except as otherwise provided in
this ss.3, benefits payable under this ss.3 shall be payable
in the form of a monthly annuity for the life of the
Independent Trustee, and, if the Independent Trustee dies
before he has received one hundred twenty (120) payments,
monthly payments in the same amount shall be payable to his
beneficiary until the number of payments to the Independent
Trustee plus the number of payments to the beneficiary equal
one hundred twenty (120) payments (the "Normal Form of
Benefit"). However, notwithstanding any other provision of
this Section 3 to the contrary, if an Independent Trustee's
beneficiary is entitled to payments under this Plan upon the
Independent Trustee's death, then (i) if the Independent
Trustee's beneficiary is his estate, the lump sum Actuarial
Equivalent present value of those payments shall be paid to
the estate in a single lump sum as soon as administratively
reasonable following the Independent Trustee's death, and (ii)
if the Independent Trustee's beneficiary is other than his
estate, the Committee in its sole discretion may direct that
the Actuarial Equivalent value of those payments be paid in
such form other than the Normal Form of Benefit (including
without limitation a lump sum) as it determines.
4. PAYMENT OF BENEFIT; ALLOCATION OF COSTS
The Fund is responsible for the payment of the benefits, as
well as all expenses of administration of the Plan, including
without limitation all accounting, legal and actuarial fees and
expenses. The obligations of the Fund to pay such benefits and
expenses will not be secured or funded in any manner, and the
obligations will not have any preference over the lawful claims of
the Fund's creditors and shareholders. The Fund shall be under no
obligation to segregate any assets for the purpose of providing
retirement benefits pursuant to this Plan, and to the extent that
any Independent Trustee or beneficiary acquires a right to receive
a benefit under the Plan, such right shall be limited to that of a
recipient of an unfunded, unsecured promise to pay amounts in the
future and such person's position with respect to such amounts
shall be that of a general unsecured creditor of the Fund. To the
extent that the Fund consists of one or more separate portfolios,
costs and expenses will be allocated among the portfolios by the
Board of Trustees of the Fund (the "Board") in a manner that is
determined by the Board to be fair and equitable under the
circumstances.
5. ADMINISTRATION
(a) The Committee. Any question involving entitlement
to payments under or the interpretation or administration of
the Plan will be referred to a committee (the "Committee") of
Independent Trustees designated by the Board. Except as
otherwise provided herein, the Committee will make all
interpretations and determinations necessary or desirable for
the Plan's
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administration, and such interpretations and
determinations will be final and conclusive.
(b) Powers of the Committee. The Committee will
represent and act on behalf of the Fund in respect of the
Plan and, subject to the other provisions of the Plan, the
Committee may adopt, amend or repeal by-laws or other
regulations, relating to the administration of the Plan, the
conduct of the Committee's affairs, its rights or powers or
the rights or powers of its members or of the Board. The
Committee will report to the Board from time to time on its
activities in respect of the Plan. The Committee or persons
designated by it will cause such records to be kept as may be
necessary for the administration of the Plan.
6. MISCELLANEOUS PROVISIONS
(a) Rights Not Assignable. The right to
receive any payment under the Plan may not be transferred,
assigned, pledged or otherwise alienated.
(b) Amendment, etc. The Committee, with the
concurrence of the Board, may at any time amend or terminate
the Plan or waive any provision of the Plan, provided that no
amendment, termination or waiver will impair the rights of an
Independent Trustee to receive upon Retirement the payments
which would have been made to that Independent Trustee had
there been no such amendment, termination or waiver (based
upon that Independent Trustee's Years of Service to the date
of such amendment, termination or waiver) or the rights of a
former Independent Trustee or Retired Trustee to receive any
benefit due under the Plan, without the consent of such
present or former Independent Trustee or Retired Trustee, as
the case may be. A present or former Independent Trustee or
Retired Trustee may elect to waive receipt of his benefit by
so advising the Committee.
Notwithstanding any provision of this Plan
to the contrary, however, in the event of the sale of all or
substantially all of the assets of the Fund, the liquidation
or dissolution of the Fund, or any merger or other similar
reorganization of the Fund that the Fund does not survive:
(i) if although the Fund does not survive
there is a surviving entity, all rights and benefits
(including without limitation those of Retired Trustees)
under the Plan shall cease upon consummation of such
transaction, unless, and only to the extent that, the
board of trustees (or other similar governing body) of
the surviving entity agrees to assume the Plan and/or to
provide any such rights or benefits; and
(ii) if there is no surviving entity, the
Board shall have the right to take specific action to
terminate the Plan and/or to cause any or all rights and
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benefits (including without limitation those of Retired
Trustees) under the Plan to cease as of the date of such
event but, in the absence of any such specific action,
the lump sum Actuarial Equivalent present value of the
Accrued Benefit of each present or former Independent
Trustee or Retired Trustee (or beneficiary thereof) who
on the date of liquidation is receiving or entitled to
receive a benefit under the Plan or would be entitled to
receive a benefit under the Plan based on his actual or
deemed termination of service as of the date of such
liquidation shall be paid to such person.
(c) No Right to Re-election. Nothing in the Plan will
create any obligation on the part of the Board to nominate
any Independent Trustee for re-election.
(d) Vacancies. Although the Board will retain the
right to increase or decrease its size, it shall be the
general policy of the Board to replace each person who ceases
to serve as an Independent Trustee by selecting a new
Independent Trustee from candidates duly proposed.
(e) Consulting. Each Retired Trustee may render such
services for the Fund, for such compensation, as may be
agreed upon from time to time by such Trustee and the Board
of the Fund.
(f) Construction. Whenever any masculine terminology
is used in this Plan, it shall be taken to include the
feminine, unless the context otherwise indicates. The titles
and headings included herein are for convenience only and
shall not be construed as in any way affecting or modifying
the text of this Plan, which text shall control. This Plan
shall be construed and regulated in accordance with the laws
of The Commonwealth of Massachusetts, except to the extent
such state law is preempted by federal law.
(g) Effective Date. This Plan will become effective
on January 1, 1991 (the "Effective Date").
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EXHIBIT NO. 99(j)(1)
CUSTODIAN CONTRACT
Between
MFS MULTIMARKET INCOME TRUST
and
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
PAGE
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE
HELD BY IT 1
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF THE TRUST HELD BY THE CUSTODIAN 2
2.1 Holding Securities 2
2.2 Delivery of Securities 2
2.3 Registration of Securities 5
2.4 Bank Accounts 6
2.5 Investment and Availability of Federal Funds 7
2.6 Collection of Income 7
2.7 Payment of Trust Monies 8
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased 9
2.9 Appointment of Agents 10
2.10 Deposit of Trust Assets in Securities System 10
2.11 Segregated Account 13
2.12 Ownership Certificates for Tax Purposes 14
2.13 Proxies 14
2.14 Communications Relating to Trust Portfolio Securities 14
2.15 Proper Instructions 15
2.16 Actions Permitted Without Express Authority 15
2.17 Evidence of Authority 16
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO THE BOOKS
OF ACCOUNT AND CALCULATION OF NET ASSET VALUE
AND NET INCOME 16
4. RECORDS 17
5. OPINION OF TRUST'S INDEPENDENT ACCOUNTANTS 17
6. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS 18
7. COMPENSATION OF CUSTODIAN 18
8. RESPONSIBILITY OF CUSTODIAN 18
9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT 20
10. SUCCESSOR CUSTODIAN 21
11. INTERPRETIVE AND ADDITIONAL PROVISIONS 22
12. MASSACHUSETTS LAW TO APPLY 22
13. PRIOR CONTRACTS 22
<PAGE>
CUSTODIAN CONTRACT
This Contract between MFS Multimarket Income Trust, a business trust
organized and existing under the laws of The Commonwealth of Massachusetts,
having its principal place of business at 200 Berkeley Street, Boston,
Massachusetts, hereinafter called the "Trust", and State Street Bank and Trust
Company, a Massachusetts trust company, having its principal place of business
at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH:
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the assets
pursuant to the provisions of its Declaration of Trust. The Trust agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Trust from time to time, and the cash
consideration received by it for such shares of beneficial interest ("Shares")
of the Trust as may be issued or sold from time to time. The Custodian shall not
be responsible for any property of the Trust held or received by the Trust and
not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.15), the Custodian shall from time to time employ one or more subcustodians,
but only in accordance with an applicable vote by the Board of Trustees of the
Trust, and provided that the Custodian shall have no more or less responsibility
or liability to the Trust on account of any actions or
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omissions of any subcustodian so employed than any such subcustodian has to
the Custodian.
2. Duties of the Custodian with Respect to Property of the Trust Held By
the Custodian.
2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of the Trust all non-cash property, including
all securities owned by the Trust, other than securities which are
maintained pursuant to Section 2.10 in a clearing agency which acts as
a securities depository or in a book-entry system authorized by the
U.S. Department of the Treasury, collectively referred to herein as a
"Securities System".
2.2 Delivery of Securities. The Custodian shall
release and deliver securities owned by the Trust held by the Custodian
or in a Securities System account of the Custodian only upon receipt of
Proper Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1. Upon sale of such securities for the
account of the Trust and receipt of payment therefor;
2. Upon the receipt of payment in connection
with any repurchase agreement related to such securities
entered into by the Trust;
3. In the case of a sale effected through a
Securities System, in accordance with the provisions of
Section 2.10 hereof;
4. To the depository agent in connection with tender
or other similar offers for portfolio securities of the
Trust;
5. To the issuer thereof or its agent when such
securities are called, redeemed, retired or otherwise
become payable; provided
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that, in any such case, the cash or other
consideration is to be delivered to the Custodian;
6. To the issuer thereof, or its agent, for transfer
into the name of the Trust or into the name of any nominee
or nominees of the Custodian or into the name or nominee
name of any agent appointed pursuant to Section 2.9 or
into the name or nominee name of any sub-custodian
appointed pursuant to Article 1; or for exchange for a
different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities
are to be delivered to the Custodian;
7. Upon the sale of such securities for the account
of the Trust, to the broker or its clearing agent, against
a receipt, for examination in accordance with "street
delivery" custom; provided that in any such case, the
Custodian shall have no responsibility or liability for
any loss arising from the delivery of such securities
prior to receiving payment for such securities except as
may arise from the Custodian's own negligence or willful
misconduct;
8. For exchange or conversion pursuant to any plan of
merger, consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion
contained in such securities, or pursuant to any deposit
agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
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9. In the case of warrants, rights or similar
securities, the surrender thereof in the exercise of such
warrants, rights or similar securities or the surrender of
interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian;
10. For delivery in connection with any loans of
securities made by the Trust, but only against receipt of
adequate collateral as agreed upon from time to time by
the Custodian and the Trust, which may be in the form of
cash or obligations issued by the United States
government, its agencies or instrumentalities, except that
in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury,
the Custodian will not be held liable or responsible for
the delivery of securities owned by the Trust prior to the
receipt of such collateral;
11. For delivery as security in connection with any
borrowings by the Trust requiring a pledge of assets by
the Trust, but only against receipt of amounts borrowed;
12. For delivery in accordance with the provisions of
any agreement among the Trust, the Custodian and a
broker-dealer registered under the Securities Exchange Act
of 1934 (the "Exchange Act") and a member of The National
Association of Securities Dealers, Inc. ("NASD"), relating
to compliance with the rules of The Options Clearing
Corporation and of any registered national securities
exchange, or of any similar organization or
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organizations, regarding escrow or other
arrangements in connection with transactions by the
Trust;
13. For delivery in accordance with the provisions of
any agreement among the Trust, the Custodian, and a
Futures Commission Merchant registered under the Commodity
Exchange Act, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any Contract
Market, or any similar organization or organizations,
regarding account deposits in connection with transactions
by the Trust;
14. Upon receipt of instructions from the transfer
agent ("Transfer Agent") for the Trust, for delivery to
such Transfer Agent or to the holders of shares in
connection with distributions in kind, as may be described
from time to time in the Trust's currently effective
prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15. For any other proper corporate purpose, but only
upon receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Directors
or of the Executive Committee signed by an officer of the
Trust and certified by the Secretary or an Assistant
Secretary, setting forth the purpose for which such
delivery is to be made, declaring such purposes to be
proper corporate purposes, and naming the person or
persons to whom delivery of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of the Trust or
in the name of any nominee of the Trust or of any nominee of the
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Custodian which nominee shall be assigned exclusively to the Trust,
unless the Trust has authorized in writing the appointment of a nominee
to be used in common with other registered investment companies having
the same investment adviser as the Trust, or in the name or nominee
name of any agent appointed pursuant to Section 2.9 or in the name or
nominee name of any subcustodian appointed pursuant to Article 1. All
securities accepted by the Custodian on behalf of the Trust under the
terms of this Contract shall be in "street name" or other good delivery
form.
2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts (the "Trust's Account or Accounts")
in the name of the Trust, subject only to draft or order by the
Custodian acting pursuant to the terms of this Contract, and shall hold
in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Trust, other than cash
maintained by the Trust in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940.
Funds held by the Custodian for the Trust may be deposited by it to its
credit as Custodian in the Banking Department of the Custodian or in
such other banks or trust companies as it may in its discretion deem
necessary or desirable; provided; however, that every such bank or
trust company shall be qualified to act as a custodian under the
Investment Company Act of 1940 and that each such bank or trust company
and the funds to be deposited with each such bank or trust company
shall be approved by vote of a majority of the Board of Trustees of the
Trust. Such funds shall be deposited by the Custodian in its capacity
as Custodian and shall be withdrawable by the Custodian only in that
capacity.
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2.5 Investment and Availability of Federal Funds. Upon mutual
agreement between the Trust and the Custodian, the Custodian shall,
upon the receipt of Proper Instructions,
1. invest in such instruments as may be set forth in
such instruments as may be set forth in such
instructions on the same day as received all federal
funds received after a time agreed upon the Custodian
and the Trust; and
2. make federal funds available to the Trust as of
specified times agreed upon from time to time by the
Trust and the Custodian in the amount of checks
received in payment for Shares of the Trust which are
deposited into the Trust's account.
2.6 Collection of Income. The Custodian shall collect on a timely basis
all income and other payments with respect to registered securities
held hereunder to which the Trust shall be entitled either by law or
pursuant to custom in the securities business, and shall collect on a
timely basis all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such securities
are held by the Custodian or agent thereof and shall credit such
income, as collected, to the Trust's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach
and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest
when due on securities held hereunder. Income due the Trust on
securities loaned pursuant to the provisions of Section 2.2 (10) shall
be the responsibility of the Trust. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the Trust
with such information or data as may be necessary to assist the Trust
in arranging for the timely delivery to the Custodian of the income to
which the Trust is properly entitled.
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2.7 Payment of Trust Monies. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out monies of the Trust in the
following cases only:
1. Upon the purchase of securities for the account of
the Trust but only (a) against the delivery of such
securities to the Custodian (or any bank, banking firm or
trust company doing business in the United States or
abroad which is qualified under the Investment Company Act
of 1940, as amended, to act as a custodian and has been
designated by the Custodian as its agent for this purpose)
registered in the name of the Trust or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof
or in proper form for transfer; (b) in the case of a
purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.10
hereof; or (c) in the of repurchase agreements entered
into between the Trust and the Custodian, or another bank,
or a broker-dealer which is a member of NASD, (i) against
delivery of the securities either in certificate form or
through an entry crediting the Custodian's account at the
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Trust
of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase
such securities from the Trust;
2. In connection with conversion, exchange or
surrender of securities owned by the Trust as set forth in
Section 2.2 hereof;
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3. For the payment of any expense or liability
incurred by the Trust, including but not limited to the
following payments for the account of the Trust: interest,
taxes, management, accounting, transfer agent and legal
fees, and operating expenses of the Trust whether or not
such expenses are to be in whole or part capitalized or
treated as deferred expenses;
4. For the payment of any dividends declared pursuant
to the governing documents of the Trust;
5. For payment of the amount of dividends received in
respect of securities sold short;
6. For any other proper purpose, but only upon
receipt of, in addition to Proper Instructions, a
certified copy of a resolution of the Board of Trustees or
of the Executive Committee of the Trust signed by an
officer of the Trust and certified by its Secretary or an
Assistant Secretary, setting forth the purpose for which
such payment is to be made, declaring such purpose to be a
proper purpose, and naming the person or persons to whom
such payment is to be made.
2.8 Liability for Payment in Advance of Receipt of Securities
Purchased. In any and every case where payment for purchase of
securities for the account of the Trust is made by the Custodian in
advance of receipt of the securities purchased in the absence of
specific written instructions from the Trust to so pay in advance, the
Custodian shall be absolutely liable to the Trust for such securities
to the same extent as if the securities had been received by the
Custodian, except that in the case of repurchase agreements entered
into by the Trust with a bank which is a member of the Federal Reserve
System, the Custodian may transfer funds to
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the account of such bank prior to the receipt of written evidence that
the securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary account of
the Custodian maintained with the Federal Reserve Bank of Boston or of
the safekeeping receipt, provided that such securities have in fact
been so transferred by book-entry.
2.9 Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the Investment Company
Act of 1940, as amended, to act as a custodian, as its agent to carry
out such of the provisions of this Article 2 as the Custodian may from
time to time direct; provided, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or
liabilities hereunder. 2.10 Deposit of Trust Assets in Securities
Systems. The Custodian may deposit and/or maintain securities owned by
the Trust in a clearing agency registered with the Securities and
Exchange Commission under Section 17A of the Securities Exchange Act
of 1934, which acts as a securities depository, or in the book-entry
system authorized by the U.S. Department of the Treasury and certain
federal agencies, collectively referred to herein as "Securities
System" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and
subject to the following provisions:
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1. The Custodian may keep securities of the Trust in
a Securities System provided that such securities are
represented in an account ("Custodian's Account") of the
Custodian in the Securities System which shall not include
any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
2. The records of the Custodian with respect to
securities of the Trust which are maintained in a
Securities System shall identify by book-entry those
securities belonging to the Trust;
3. The Custodian shall pay for securities purchased
for the account of the Trust upon (i) receipt of advice
from the Securities System that such securities have been
transferred to the Custodian's Account, and (ii) the
making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the
Trust. The Custodian shall transfer securities sold for
the account of the Trust upon (i) receipt of advice from
the Securities System that payment for such securities has
been transferred to the Custodian's Account, and (ii) the
making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the
Trust. Copies of all advices from the Securities System of
transfers of securities for the account of the Trust shall
identify the Trust, be maintained for the Trust by the
Custodian and be provided to the Trust at its request.
Upon request, the
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Custodian shall furnish the Trust
confirmation of each transfer to or from the account of
the Trust in the form of a written advice or notice and
shall furnish to the Trust copies of daily transaction
sheets reflecting each day's transactions in the
Securities System for the account of the Trust.
4. The Custodian shall provide the Trust with any
report obtained by the Custodian on the Securities
System's accounting system, internal accounting control
and procedures for safeguarding securities deposited in
the Securities System;
5. The Custodian shall have received the initial or
annual certificate, as the case may be, required by
Article 9 hereof;
6. Anything to the contrary in this Contract
notwithstanding, the Custodian shall be liable to the
Trust for any loss or damage to the Trust resulting from
use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively
such rights as it may have against the Securities System;
at the election of the Trust, it shall be entitled to be
subrogated to the rights of the Custodian with respect to
any claim against the Securities System or any other
person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the
Trust has not been made whole for any such loss or damage.
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2.11 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of the Trust, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.10 hereof, (i) in
accordance with the provisions of any agreement among the Trust, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of
The Options Clearing Corporation and of any registered national
securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Trust, (ii) for purposes of segregating cash
or government securities in connection with options purchased, sold or
written by the Trust or commodity futures contracts or options thereon
purchased or sold by the Trust, (iii) for the purposes of compliance by
the Trust with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, but only, in the case of clause (iv),
upon receipt of, in addition to Proper Instructions, a certified copy
of a resolution of the Board of Trustees or of the Executive Committee
signed by an officer of the Trust and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper corporate
purposes.
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2.12 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all federal
and state tax purposes in connection with receipt of income or other
payments with respect to securities of the Trust held by it and in
connection with transfers of securities.
2.13 Proxies. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in
the name of the Trust or a nominee of the Trust, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Trust such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.14 Communications Relating to Trust Portfolio Securities. The
Custodian shall transmit promptly to the Trust all written information
(including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Trust and
the maturity of futures contracts purchased or sold by the Trust)
received by the Custodian from issuers of the securities being held
for the Trust. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Trust all written information
received by the Custodian from issuers of the securities whose tender
or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Trust desires to take action with
respect to any tender offer, exchange offer or any other similar
transaction, the Trust shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
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2.15 Proper Instructions. Proper Instructions as used throughout this
Article 2 means a writing signed or initialled by one or more person or
persons as the Board of Trustees shall have from time to time
authorized. Each such writing shall set forth the specific transaction
or type of transaction involved, including a specific statement of the
purpose for which such action is requested. Oral instructions will be
considered Proper Instructions if the Custodian reasonably believes
them to have been given by a person authorized to give such
instructions with respect to the transaction involved. The Trust shall
cause all oral instructions to be confirmed in writing. Upon receipt of
a certificate of the Secretary or an Assistant Secretary as to the
authorization by the Board of Trustees of the Trust accompanied by a
detailed description of procedures approved by the Board of Trustees,
Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the
Board of Trustees and the Custodian are satisfied that such procedures
afford adequate safeguards for the Trust's assets.
2.16 Actions Permitted without Express Authority. The Custodian may in
its discretion, without express authority from the Trust:
1. make payments to itself or others for minor
expenses of handling securities or other similar items
relating to its duties under this Contract, provided
that all such payments shall be accounted for to the
Trust;
2. surrender securities in temporary form for
securities in definitive form;
3. endorse for collection, in the name of the
Trust, checks, drafts and other negotiable
instruments; and
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4. in general, attend to all non-discretionary
details in connection with the sale, exchange,
substitution, purchase, transfer and other dealings with
the securities and property of the Trust except as
otherwise directed by the Board of Trustees of the
Trust.
2.17 Evidence of Authority. The Custodian shall be protected in acting
upon any instructions, notice, request, consent, certificate or other instrument
or paper believed by it to be genuine and to have been properly executed by or
on behalf of the Trust. The Custodian may receive and accept a certified copy of
a vote of the Board of Trustees of the Trust as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or (b) of any
determination or of any action by the Board of Trustees pursuant to the
Declaration of Trust as described in such vote, and such vote may be considered
as in full force and effect until receipt by the Custodian of written notice to
the contrary.
3. Duties of the Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by the Board of
Trustees of the Trust to keep the books of account of the Trust and/or compute
the net asset value per share of the outstanding shares of the Trust or, if
directed in writing to do so by the Trust, shall itself keep such books of
account and/or compute such net asset value per share. If so directed, the
Custodian shall also calculate weekly the net income of the Trust as described
in the Trust's currently effective prospectus and shall advise
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the Trust and the Transfer Agent weekly of the total amounts of such net income
and, if instructed in writing by an officer of the Trust to do so, shall advise
the Transfer Agent periodically of the division of such net income among its
various components. The calculations of the net asset value per share and the
daily income of the Trust shall be made at the time or times described from time
to time in the Trust's currently effective prospectus. 4. Records. The Custodian
shall create and maintain all records relating to its activities and obligations
under this Contract in such manner as will meet the obligations of the Trust
under the Investment Company Act of 1940, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal and state
tax laws and any other law or administrative rules or procedures which may be
applicable to the Trust. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the Custodian be open
for inspection by duly authorized officers, employees or agents of the Trust and
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Trust's request, supply the Trust with a tabulation of securities
owned by the Trust and held by the Custodian and shall, when requested to do so
by the Trust and for such compensation as shall be agreed upon between the Trust
and the Custodian, include certificate numbers in such tabulations. 5. Opinion
of Trust's Independent Accountant. The Custodian shall take all reasonable
action, as the Trust may from time to time request, to obtain from year to year
favorable opinions from the Trust's independent accountants with respect to its
activities hereunder in connection with
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the preparation of the Trust's Form N-1A, and Form N-SAR or other annual reports
to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
6. Reports to Trust by Independent Public Accountants. The Custodian shall
provide the Trust, at such times as the Trust may reasonably require, with
reports by independent public accountants on the accounting system, internal
accounting control and procedures for safeguarding securities, futures contracts
and options on futures contracts, including securities deposited and/or
maintained in a Securities System, relating to the services provided by the
Custodian under this Contract; such reports, shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Trust, to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, shall so state.
7. Compensation of Custodian. The Custodian shall be entitled to reasonable
compensation for its services and expenses as Custodian, as agreed upon from
time to time between the Trust and the Custodian.
8. Responsibility of Custodian. So long as and to the extent that it is in the
exercise of reasonable care, the Custodian shall not be responsible for the
title, validity or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Contract and shall be held
harmless in acting upon any notice, request, consent, certificate or other
instrument reasonably believed by it to be genuine and to be signed by the
proper party or parties. The Custodian shall be held to the exercise of
reasonable care in carrying out the provisions of this Contract and shall be
indemnified by the Trust
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for any action taken or omitted by it in the proper execution of instructions
from the Trust. It shall be entitled to rely on and may act upon advice of
counsel for the Trust on all matters and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
The Trust agrees to indemnify and hold harmless the Custodian and its
nominee from and against all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) incurred or assessed against it or its
nominee in connection with the performance of this Contract, except such as may
arise from it or its nominee's own negligent action, negligent failure to act or
willful misconduct. The Custodian is authorized to charge any account of the
Trust for such items and its fees. To secure any such authorized charges and any
advances of cash or securities made by the Custodian to or for the benefit of
the Trust for any purpose which results in the Trust incurring an overdraft at
the end of any business day or for extraordinary or emergency purposes during
any business day, the Trust hereby grants to the Custodian a security interest
in and pledges to the Custodian securities held for it by the Custodian, in an
amount not to exceed 5 percent of the Trust's gross assets, the specific
securities to be designated in writing from time to time by the Trust or its
investment adviser (the "Pledged Securities"). Should the Trust fail to repay
promptly any advances of cash or securities, the Custodian shall be entitled to
use available cash and to dispose of the Pledged Securities as is necessary to
repay any such advances.
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9. Effective Period. Termination and Amendment. This Contract shall become
effective as of its execution, shall continue in full force and effect until
terminated as hereinafter provided, may be amended at any time by mutual
agreement of the parties hereto and may be terminated by either party by an
instrument in writing delivered or mailed, postage prepaid to the other party,
such termination to take effect not sooner than thirty (30) days after the date
of such delivery or mailing; provided, however that the Custodian shall not act
under Section 2.10 hereof in the absence of receipt of an initial certificate of
the Secretary or an Assistant Secretary that the Board of Trustees of the Trust
have approved the initial use of a particular Securities System and the receipt
of an annual certificate of the Secretary or an Assistant Secretary that the
Board of Trustees have reviewed the use by the Trust of such Securities System,
as required in each case by Rule 17f-4 under the Investment Company Act of 1940,
as amended and; provided further, however, (a) that the Trust shall not amend or
terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Declaration of Trust, and (b) that the
Trust may at any time by action of its Board of Trustees (i) substitute another
bank or trust company for the Custodian by giving notice as described above to
the Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian or upon the happening
of a like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements.
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10. Successor Custodian. If a successor custodian shall be appointed by the
Board of Trustees of the Trust, the Custodian shall, upon termination, deliver
to such successor custodian at the office of the Custodian, duly endorsed and in
the form for transfer, all securities then held by it hereunder and shall
transfer to an account of the successor custodian all of the Trust's securities
held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board of
Trustees of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940, of
its own selection, having an aggregate capital, surplus, and undivided profits,
as shown by its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian and all instruments
held by the Custodian relative thereto and all other property held by it under
this Contract and to transfer to an account of such successor custodian all of
the Trust's securities held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Contract.
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In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions. In connection with the operation of
this Contract, the Custodian and the Trust may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
12. Massachusetts Law to Apply. This Contract shall be construed and the
provisions thereof interpreted under and in accordance with laws of The
Commonwealth of Massachusetts.
13. Prior Contracts. This Contract supersedes and terminates, as of the date
hereof, all prior contracts between the Trust and the Custodian relating to the
custody of the Fund's assets.
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in it name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 25th day of February, 1987.
ATTEST MFS MULTIMARKET INCOME TRUST
DANIEL M. JAFFE By: RICHARD B. BAILEY
Daniel M. Jaffe Richard B. Bailey
ATTEST STATE STREET BANK & TRUST COMPANY
ILLEGIBLE By: ILLEGIBLE
(Illegible) (Illegible)
Assistant Secretary Vice President
-23-
<PAGE>
EXHIBIT NO. 99(j)(2)
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made as of this 1st day of October, 1989 by and between State
Street Bank and Trust Company (the "Custodian") and MFS Multimarket Income Trust
(the "Trust").
WHEREAS, the Custodian and the Trust are parties to a Custodian
Contract dated February 25, 1987 (the "Custodian Contract") which governs the
terms and conditions under which the Custodian maintains custody of the
securities and other assets of the Trust;
WHEREAS, the Custodian may delegate to Massachusetts Financial Services
Company ("MFS") the performance of certain duties the Custodian would otherwise
be obligated to perform pursuant to the Custodian Agreement;
WHEREAS, the Trust agrees to any such delegation of certain Custodian
duties;
NOW THEREFORE, the Custodian and the Trust hereby amend the terms of
the Custodian Contract and mutually agree to the following:
1) Add new Section 14 which shall read as follows:
14.Delegation of Certain Custodian Duties to MFS
The Custodian may delegate to MFS the performance of any or
all of its duties hereunder relating to (i) accounting for investments
in currency and for financial instruments (including, without
limitation, options, contracts, futures contracts, options on futures
contracts, options on foreign currency and forward foreign currency
exchange contracts and (ii) federal and state regulatory compliance.
The Custodian shall compensate MFS for the performance of such duties
at such fee or fees as MFS shall determine to be equal to MFS's cost
for performing such duties (the "MFS Fees"). Following its payment of
the MFS Fees to MFS, the Custodian shall recover the amount of the MFS
Fees and from the Trust on such terms as the Custodian and the Trust
shall agree. MFS assumes responsibility for all duties delegated to it
by the Custodian pursuant to this Section 14, and the Custodian may
rely on MFS for the accuracy and correctness of the accounting
information provided by MFS to the Custodian pursuant to this Section
14.
IN WITNESS WHEREOF, each of the parties hereto have caused this
instrument to be executed in its name and on its behalf by a duly authorized
representative as of the aforementioned day and year.
ATTEST MFS MULTIMARKET INCOME TRUST
LINDA J. HOARD By: A. KEITH BRODKIN
Linda J. Hoard A. Keith Brodkin
ATTEST STATE STREET BANK AND TRUST COMPANY
ILLEGIBLE By: PHYLLIS AHEARN
(Illegible) Phyllis Ahearn
Assistant Secretary Vice President
<PAGE>
EXHIBIT NO. 99(j)(3)
AMENDMENT TO
CUSTODIAN CONTRACT
Amendment to Custodian Contract between MFS Multimarket Income Trust, a
business trust organized and existing under the laws of Massachusetts, having a
principal place of business at 200 Berkeley Street, Boston, MA 02116
(hereinafter called the "Fund"), and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 225
Franklin Street, Boston, Massachusetts 02110 (hereinafter called the
"Custodian").
WHEREAS: The Fund and the Custodian are parties to a Custodian
Contract dated February 25, 1987 (the "Custodian Contract");
WHEREAS: The Fund desires that the Custodian issue a letter of credit
(the "Letter of Credit') on behalf of the Fund for the benefit of ICI Mutual
Insurance Company (the "Company") in accordance with the Continuing Letter of
Credit and Security Agreement and that the Fund's obligations to the Custodian
with respect to the Letter of Credit shall be fully collateralized at all times
while the Letter of Credit is outstanding by, among other things, segregated
assets of the Fund equal to 125% of the face amount to the amount of the Letter
of Credit;
WHEREAS: The Custodian Contract provides for the establishment of
segregated accounts for proper Fund purposes upon Proper Instructions (as
defined in the Custodian Contract); and
WHEREAS: The Fund and the Custodian desire to establish a segregated
account to hold the collateral for the Fund's obligations to the Custodian with
respect to the Letter of Credit and to amend the Custodian Contract to provide
for the establishment and maintenance thereof;
<PAGE>
WITNESSETH: That in consideration of the mutual covenants and
agreements hereinafter contained, the parties hereto hereby amend the Custodian
Contract as follows:
1. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Custodian Contract.
2. The Fund hereby instructs the Custodian to establish and
maintain a segregated account ( the "Letter of Credit Custody Account") for and
in behalf of the Fund as contemplated by Section 2.13(iv) for the purpose of
collateralizing the Fund's obligations under this Amendment to the Custodian
Contract.
3. The Fund shall deposit with the Custodian and the Custodian shall
hold in the Letter of Credit Custody Account cash, U.S. government securities
and other high-grade debt securities owned by the Fund acceptable to the
Custodian (collectively "Collateral Securities") equal to 125% of the face
amount to the amount which the Company may draw under the Letter of Credit. Upon
receipt of such Collateral Securities in the Letter of Credit Custody Account,
the Custodian shall issue the Letter of Credit to the Company.
4. The Fund hereby grants to the Custodian a security interest in the
Collateral Securities from time to time in the Letter of Credit Custody Account
(the "Collateral") to secure the performance of the Fund's obligations to the
Custodian with respect to the Letter of Credit, including, without limitation,
under Section 5-114(3) of the Uniform Commercial Code. The Fund shall register
the pledge of Collateral and execute and deliver to the Custodian such powers
and instruments of assignment as may be requested by the Custodian to evidence
and perfect the limited interest in the Collateral granted hereby.
5. The Collateral Securities in the Letter of Credit Custody Account
may be substituted or exchanged (including substitutions or exchanges which
increase or
<PAGE>
decrease the aggregate value of the Collateral) only pursuant to Proper
Instructions from the Fund after the Fund notifies the Custodian of the
contemplated substitution or exchange and the Custodian agrees that such
substitution or exchange is acceptable to the Custodian.
6. Upon any payment made pursuant to the Letter of Credit by the
Custodian to the Company, after notice to the company, the Custodian may
withdraw from the Letter of Credit Custody Account Collateral Securities in an
amount equal in value to the amount actually so paid. The Custodian shall have
with respect to the Collateral so withdrawn all of the rights of a secured
creditor under the Uniform Commercial Code as adopted in the Commonwealth of
Massachusetts at the time of such withdrawal and all other rights granted or
permitted to it under law.
7. The Custodian will transfer upon receipt all income earned on
the Collateral to the Fund custody account unless the Custodian receives Proper
Instructions from the Fund to the contrary.
8. Upon the drawing by the Company of all amounts which may become
payable to it under the Letter of Credit and the withdrawal of all Collateral
Securities with respect thereto by the Custodian pursuant to Section 6 hereof,
or upon the termination of the Letter of Credit by the Fund with the written
consent of the Company, the Custodian shall transfer any Collateral Securities
then remaining in the Letter of Credit Custody Account to another fund custody
account.
9. Collateral held in the Letter of Credit Custody Account shall be
released only in accordance with the provisions of this Amendment to Custodian
Contract. The Collateral shall at all times until withdrawn pursuant to Section
6 hereof remain
<PAGE>
the property of the Fund, subject only to the extent of the interest granted
herein to the Custodian.
10. Notwithstanding any other termination of the Custodian Contract,
the Custodian Contract shall remain in full force and effect with respect to the
Letter of Credit Custody Account until transfer of all Collateral Securities
pursuant to Section 8 hereof.
11. The Custodian shall be entitled to reasonable compensation for its
issuance of the Letter of Credit and for its services in connection with the
Letter of Credit Custody Account as agreed upon from time to time between the
Fund and the Custodian.
12. The Custodian Contract as amended hereby, shall be governed by, and
construed and interpreted under, the laws of the Commonwealth of Massachusetts.
13. The parties agree to execute and deliver all such further documents
and instruments and to take such further action as may be required to carry out
the purposes of the Custodian Contract, as amended hereby.
14. Except as provided in this Amendment to Custody Contract, the
Custodian Contract shall remain in full force and effect, without amendment or
modification, and all applicable provisions of the Custodian Contract, as
amended hereby, including, without limitation, Section 8 thereof, shall govern
the Letter of Credit Custody Account and the rights and obligations of the Fund
and the Custodian under this Amendment to Custodian Contract. No provision of
this Amendment to Custodian Contract shall be deemed to constitute a waiver of
any rights of the Custodian under the Custodian Contract or under law.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Amendment to Custodian
Contract to be executed in its name and behalf by its duly authorized
representatives and its seal to be hereunder affixed as of the 29th day of
February, 1988.
ATTEST:
By: D. M. Jaffe By: W. Thomas London, Treasurer
D. M. Jaffe W. Thomas London
ATTEST: STATE STREET BANK AND TRUST COMPANY
By: Illegible By: Illegible
Assistant Secretary Vice President
<PAGE>
EXHIBIT NO. 99(j)(4)
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between STATE STREET BANK AND TRUST COMPANY (the
"Custodian") and MFS MULTIMARKET INCOME TRUST (the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated February 25, 1987 (the "Custodian Contract") governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Fund desires to amend the Custodian Contract to provide
for the maintenance of its foreign securities, and cash incidental to
transactions in such securities, in the custody of The Chase Manhattan Bank N.A.
("Chase") and the banking institutions and foreign securities depositories it
employs for such purposes;
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Custodian Contract and herein, the Custodian and the Fund hereby amend the
Custodian Contract and agree to the following terms and conditions and to amend
the Custodian Contract as follows:
1.The Fund hereby authorizes and instructs the Custodian to
employ Chase as sub-custodian for the Fund's foreign securities,
and cash incidental to transactions in such securities, on the
terms and conditions set forth in the Sub-Custody Contract
between the Custodian and Chase which is attached hereto as
Exhibit "A" (the "Sub-Custody Contract").
<PAGE>
2.The Custodian hereby agrees to enter into the Sub-Custody
Contract and to provide such services to the Fund and in
accordance with such contract as necessary for foreign custody
services to be provided pursuant thereto.
3.The Custodian agrees that for any contract that it enters into
with a Subcustodian, such contract shall contain a Standard
of Care no less than that which is contained in the
Custodian Agreement. At the election of the Fund, the Fund
shall be entitled to be subrogated to the rights of the
Custodian under the Sub-Custody Contract with respect to any
claims arising thereunder against Chase or any other banking
institution or securities depository employed by Chase if
and to the extent that the Fund has not been made whole
therefor.
4.As between the custodian and the Fund, the Fund shall be
solely responsible to assure that the maintenance of foreign
securities and cash pursuant to the terms of the Sub-Custody
Contract complies with all applicable rules, regulations,
interpretations and orders of the Securities and Exchange
Commission, and the Custodian assumes no responsibility and
makes no representations as to such compliance.
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this instrument
to be executed in its name and behalf by its duly authorized representative
as of the 28th day of December, 1990.
ATTEST: MFS MULTIMARKET INCOME TRUST
LINDA J. HOARD By: A. KEITH BRODKIN
Linda J. Hoard A. Keith Brodkin
Assistant Secretary President
ATTEST STATE STREET BANK AND TRUST COMPANY
JOE KINNALLY By: PHYLLIS AHEARN
Joe Kinnally Phyllis Ahearn
Assistant Secretary Vice President
<PAGE>
EXHIBIT NO. 99(j)(5)
AMENDMENT
The Custodian Contract dated February 25, 1987 between MFS Multimarket
Income Trust (referred to herein as the "Trust") and State Street Bank and Trust
Company (the "Custodian") is hereby amended as follows:
I. Section 2.1 is amended to read as follows:
"Holding Securities. The Custodian shall hold and physically
segregate for the account of the Trust all non-cash property, including all
securities owned by the Trust, other than (a) securities which are maintained
pursuant to Section 2.10 in a clearing agency which acts as a securities
depository or in a book-entry system authorized by the U.S. Department of the
Treasury, collectively referred to herein as "Securities System" and (b)
commercial paper of an issuer for which State Street Bank and Trust Company acts
as issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.10A."
II. Section 2.2 is amended to read, in relevant part as follows:
"Delivery of Securities. The Custodian shall release and
deliver securities owned by the Trust held by the Custodian or in a Securities
System account of the Custodian or in the
-1-
<PAGE>
Custodian's Direct Paper book entry system account ("Direct Paper System
Account") only upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in following
cases:
1) . . . .
.
.
.
14) . . . ."
III. Section 2.8(1) is amended to read in relevant part as follows:
"Payment of Trust Monies. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Trust in the following cases only:
1) Upon the purchase of securities, options,
futures contracts or options on futures contracts for
the account of the Trust but only (a) against the
delivery of such securities or evidence of title to
such options, futures contracts or options on futures
contracts, to the Custodian (or any bank, banking
firm or trust company doing business in the United
States or abroad which is qualified
-2-
<PAGE>
under the Investment Company Act of
1940, as amended, to act as a custodian and has been
designated by the Custodian as its agent for this
purpose) registered in the name of the Trust or in
the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer;
(b) in the case of a purchase effected through a
Securities System, in accordance with the conditions
set forth in Section 2.10 hereof or (c) in the case
of a purchase involving the Direct Paper System, in
accordance with the conditions set forth in Section
2.10A; or (d) in the case of repurchase agreements
entered into between the Trust and the Custodian, or
another bank, or a broker-dealer which is a member of
NASD, (i) against delivery of the securities either
in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with
such securities or (ii) against delivery of the
receipt evidencing purchase by the Trust of
securities owned by the Custodian along with written
evidence of the agreement by the Custodian to
repurchase such securities from the Trust or (e) for
transfer to a time deposit account of the Trust in
any bank, whether domestic or foreign; such transfer
may be
-3-
<PAGE>
effected prior to receipt of a
confirmation from a broker and/or the applicable bank
pursuant to Proper Instructions from the Trust as
defined in Section 2.15;"
IV. Following Section 2.10 there is inserted a new Section 2.10.A to
read as follows:
2.10.A "Trust Assets Held in the Custodian's Direct Paper
System. The Custodian may deposit and/or maintain securities owned by the
Trust in the Direct Paper System of the Custodian subject to the following
provisions:
1) No transaction relating to
securities in the Direct Paper System will be
effected in the absence of Proper Instructions;
2) The Custodian may keep securities
of the Trust in the Direct Paper System only if
such securities are represented in an account
("Account") of the Custodian in the Direct
Paper System which shall not include any assets
of the Custodian other than assets held as a
fiduciary, custodian or otherwise for
customers;
3) The records of the Custodian
with respect to securities of the Trust which
are maintained in
-4-
<PAGE>
the Direct Paper System shall identify by book-
entry those securities belonging to the Trust;
4) The Custodian shall pay for
securities purchased for the account of the
Trust upon the making of an entry on the
records of the Custodian to reflect such
payment and transfer of securities to the
account of the Trust. The Custodian shall
transfer securities sold for the account of the
Trust upon the making of an entry on the
records of the Custodian to reflect such
transfer and receipt of payment for the account
of the Trust;
5) The Custodian shall furnish the
Trust confirmation of each transfer to or from
the account of the Trust, in the form of a
written advice or notice, of Direct Paper on
the next business day following such transfer
and shall furnish to the Trust copies of daily
transaction sheets reflecting each day's
transaction in the Securities System for the
account of the Trust;
6) The Custodian shall provide the
Trust with any report on its system of internal
accounting control as the Trust may reasonably
request from time to time."
-5-
<PAGE>
V. Section 9 is hereby amended to read as follows:
"Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution,
shall continue in full force and effect until terminated as hereinafter
provided, may be amended at any time by mutual agreement of the parties hereto
and may be terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take effect not
sooner than thirty (30) days after the date of such delivery or mailing;
provided, however that the Custodian shall not act under Section 2.10 hereof in
the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Trustees of the Trust has approved the
initial use of a particular Securities System and the receipt of an annual
certificate of the Secretary or an Assistant Secretary that the Board of
Trustees has reviewed the use by the Trust of such Securities System, as
required in each case by Rule 17f-4 under the Investment Company Act of 1940, as
amended and that the Custodian shall not act under Section 2.10A hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Board of Trustees has approved the initial use of the Direct
Paper System and the receipt of an annual certificate of the Secretary or an
Assistant Secretary that the Board of Trustees has reviewed the use by the Trust
of the Direct Paper System; provided further, however, that the Trust shall not
amend or terminate this
-6-
<PAGE>
Contract in contravention of any applicable federal or state regulations, or any
provision of the Articles of Incorporation, and, further provided, that the
Trust may at any time by action of its Board of Trustees (i) substitute another
bank or trust company for the Custodian by giving notice as described above to
the Custodian, or (ii) immediately terminate this Contract in the event of the
appointment of a conservator or receiver for the Custodian by the Comptroller of
the Currency or upon the happening of a like event at the direction of an
appropriate regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its costs, expenses and disbursements."
Except as otherwise expressly amended and modified herein, the
provisions of the Custodian Contract shall remain in full force and effect.
-7-
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed in its name and on its behalf by its duly authorized
representatives and its Seal to be hereto affixed as of the 17th day of
September, 1991.
ATTEST: MFS MULTIMARKET INCOME TRUST
LINDA J. HOARD By: W. THOMAS LONDON
Linda J. Hoard W. Thomas London
Assistant Secretary Treasurer
ATTEST: STATE STREET BANK AND TRUST COMPANY
ILLEGIBLE By: JOHN HENRICH
(Illegible) John Henrich
Assistant Secretary Vice President
-8-
<PAGE>
EXHIBIT NO. 99(k)(2)
CREDIT AGREEMENT
dated as of November 10, 1992
between
MFS MULTIMARKET INCOME TRUST
and
THE CHASE MANHATTAN BANK, N.A.
<PAGE>
Table of Contents
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS.
Section 1.01 Definitions 1
Section 1.02 Accounting Terms 9
ARTICLE. 2 THE CREDIT.
Section 2.01 The Loans 9
Section 2.02 The Note 10
Section 2.03 Purpose 10
Section 2.04 Borrowing Procedures 10
Section 2.05 Prepayments 10
Section 2.06 Interest Periods 10
Section 2.07 Changes of Commitment 11
Section 2.08 Certain Notices 11
Section 2.09 Minimum Amounts 11
Section 2.10 Interest 11
Section 2.11 Fees 12
Section 2.12 Payments Generally 12
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs 13
Section 3.02 Basis For Determining Interest Rate
Inadequate or Unfair 15
Section 3.03 Illegality 15
Section 3.04 Certain Compensation 16
ARTICLE 4 CONDITIONS PRECEDENT.
Section 4.01 Documentary Conditions Precedent 16
Section 4.02 Additional Conditions Precedent 17
Section 4.03 Deemed Representations 18
ARTICLE 5 REPRESENTATIONS AND WARRANTIES.
Section 5.01 Organization, Good Standing and Due
Qualification 18
Section 5.02 Trust Power and Authority; No Conflicts 18
Section 5.03 Legally Enforceable Agreements 19
Section 5.04 Litigation 19
Section 5.05 Financial Statements 19
Section 5.06 Ownership and Liens 19
Section 5.07 Taxes 20
Section 5.08 Subsidiaries 20
Section 5.09 Credit Arrangements 20
Section 5.10 Operation of Business 20
Section 5.11 Hazardous Materials 20
<PAGE>
Section 5.12 No Default on Outstanding Judgments or Orders 21
Section 5.13 No Defaults on Other Agreements 21
Section 5.14 Labor Disputes and Acts of Gods 21
Section 5.15 Governmental Regulation Trust Document 21
Section 5.16 Affiliation 22
Section 5.17 Investment Advisor 22
ARTICLE 6 AFFIRMATIVE COVENANTS.
Section 6.01 Maintenance of Existence 22
Section 6.02 Conduct of Business 22
Section 6.03 Maintenance of Properties 22
Section 6.04 Maintenance of Records 22
Section 6.05 Maintenance of Insurance 23
Section 6.06 Compliance with Laws 23
Section 6.07 Right of Inspection 23
Section 6.08 Reporting Requirements 23
Section 6.09 Compliance with Investment Restrictions 25
Section 6.10 Investment Company Act of 1940 25
ARTICLE 7 NEGATIVE COVENANTS.
Section 7.01 Liens 26
Section 7.02 Mergers, Etc. 27
Section 7.03 Amendment of Investment Practices 27
Section 7.04 Use of Proceeds 28
ARTICLE 8 FINANCIAL COVENANTS.
Section 8.01 Asset Coverage Test 28
ARTICLE 9 EVENTS OF DEFAULT.
Section 9.01 Events of Default 28
Section 9.02 Remedies 30
ARTICLE 10 MISCELLANEOUS.
Section 10.01 Amendments and Waivers 30
Section 10.02 Usury 31
Section 10.03 Expenses 31
Section 10.04 Survival 31
Section 10.05 Assignment; Participations 31
Section 10.06 Notices 33
Section 10.07 Setoff 33
Section 10.08 Jurisdiction; Immunities 33
Section 10.09 Table of Contents; Headings 34
Section 10.10 Severability 34
Section 10.11 Counterparts 34
<PAGE>
Section 10.12 Integration 34
Section 10.13 Governing Law 34
Section 10.14 Confidentiality 34
Section 10.15 Treatment of Certain Information 34
Section 10.16 Limitation of Shareholder Liability, Etc. 35
EXHIBITS
Exhibit A Promissory Note
Exhibit B Opinion of Counsel for Borrower
Exhibit C Form of Borrower's Asset Coverage Statement
Exhibit D Additional Fair Market Value Methodology
SCHEDULES
Schedule I Credit Arrangements
<PAGE>
CREDIT AGREEMENT dated as of November 10, 1992 between MFS MULTIMARKET
INCOME TRUST, a business trust organized under the laws of the Commonwealth of
Massachusetts (the "Borrower") and THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), a national banking association organized under the laws of the
United States of America (the "Bank").
The Borrower desires that the Bank extend credit as provided herein and
the Bank is prepared to extend such credit. Accordingly, the Borrower and the
Bank agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and vice versa):
"Advisers Act" means the Investment Advisers Act of 1940, as amended.
"Affiliate" means any Person: (a) which directly or indirectly
controls, or is controlled by, or is under common control with, the Borrower;
(b) which directly or indirectly beneficially owns or holds 5% or more of any
class of voting stock of the Borrower; (c) 5% or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Borrower; or
(d) which is a partnership in which the Borrower is a general partner. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities;, by contract, or otherwise.
"Affiliated Person" means "affiliated person" as defined in the 1940
Act.
"Agreement" means this Credit Agreement and all Exhibits and Schedules
hereto, as amended or supplemented from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles, Sections,
Exhibits, Schedules and the like of this Agreement unless otherwise indicated.
"Assessment Rate" means, for any Interest Period for any CD Loan, the
average rate (rounded upwards, if necessary, to the nearest 1/100 of 1%) at
which premiums for deposit insurance are then charged to the Bank by the Federal
Deposit Insurance Corporation (or any successor) during such Interest Period for
Dollar time deposits with the Bank at the Principal Office, as estimated by the
Bank in good faith.
"Asset Coverage Statement" means the monthly statement substantially in
the form attached hereto as Exhibit C which is to be provided by the Borrower to
the Bank pursuant to Section 6.08(c) hereof.
<PAGE>
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York City and whenever such day relates
to a Eurodollar Loan or notice with respect to any Eurodollar Loan, a day on
which dealings in Dollar deposits are also carried out in the London interbank
market.
"CD Loan" means any Loan when and to the extent the interest rate
therefor is determined on the basis of clause (b) or (d) of the definition
"Fixed Base Rate."
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, a. amended from time
to time.
"Commission" means the Securities and Exchange Commission.
"Commitment" means the obligation of the Bank to make Loans under this
Agreement in the aggregate principal amount of $150,000,000, as such amount may
be reduced or otherwise modified from time to time in accordance with the terms
of this Agreement.
"Custodian" means State Street Bank & Trust Company or any other duly
appointed custodian for the Borrower.
"Default" means the occurrence and continuance of any event which with
the giving of notice or lapse of time, or both, would become an Event of
Default.
"Default Rate" means, with respect to the principal of any Loan and, to
the extent permitted by law, any other amount payable by the Borrower under this
Agreement or the Note that is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period from and
including the due date, to, but excluding the date on which such amount is paid
in full equal to 1% above the Variable Rate as in effect from time to time plus
the Margin (if any) (provided that, if the amount so in default is principal of
a Fixed Rate Loan and the due date thereof is a day other than the last day of
the Interest Period therefor, the "Default Rate" for such principal shall be,
for the period from and including the due date and to but excluding the last day
of the Interest Period therefor, 2% above the interest rate for such Loan as
provided in Section 2.10 hereof and, thereafter, the rate provided for above in
this definition).
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Domestic Government Securities" means obligations (a) which are owned
by the Borrower free and clear of any Lien, and (b) which are (i) direct
obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United
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States of America or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America, or (ii)
direct obligations of any agency of the United States of America which are rated
no lower than "AA+" by Standard Poor's Corporation ("S&P") or "A1" by Moody's
Investor Service, Inc. ("Moody's") provided that such obligations were rated
"AAA" by S&P or "Aaa" by Moody's at the time of their purchase or acquisition by
the Borrower, or (iii) direct obligations of the Federal National Mortgage
Association, the Federal Home Loan Mortgage Corporation or the Government
National Mortgage Association. It is understood that a call option, written by
the Borrower, on any type of security held by the Borrower shall not be deemed
to create a Lien on any such security provided that the terms of such call
option or any agreement relating thereto do not create or grant any security
interest in such security and Borrower retains complete beneficial ownership of
and control over such security; provided, that the Borrower may exercise such
control through its Custodian and subcustodians. It is further understood that
an escrow receipt (an "Escrow Receipt") issued by the Custodian pursuant to the
terms of any such call option issued solely on any obligations of the type
described in clauses (i), (ii) and (iii) of the first sentence of this
definition shall not be deemed a Lien if (i) the Escrow Receipt limits the
rights of the holder of the Escrow Receipt to the receipt of the securities
specified therein upon payment by such holder to the Custodian of the purchase
price for such securities specified in the call option for which such Escrow
Receipt was issued, plus accrued interest, on the exercise date (or during the
exercise period) specified in such call option, and (ii) the Borrower has an
agreement with the holder of the call option in respect of which the Escrow
Receipt was issued, pursuant to which agreement the Borrower has the right to
repurchase such call option upon notice.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Eurodollar Loan" means any Loan when and to the extent the interest
rate therefor is determined on the basis of clause (a) or (c) of the definition
"Fixed Base Rate."
"Event of Default" has the meaning given such term in Section 9.01.
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"Facility Documents" means this Agreement and the Note.
"Fair Market Value" of a security shall be the value assigned to a
given security in the most recent calculation by the Borrower of its Net Asset
Value. Fair Market Value shall be determined on each day that the New York Stock
Exchange is open for trading and shall be in accordance with the applicable
requirements of the 1940 Act and the provisions of Exhibit D hereto, which
Exhibit D may be amended by the Borrower from time to time provided that (i) any
such amendment is in accordance with the 1940 Act and (ii) the Borrower provides
notice to the Bank of any amendment in the first Portfolio Report provided to
the Bank after the effectiveness of such amendment.
"Federal Funds Rate" means, for any day, the rate per annum (expressed
on a 365/366 day basis of calculation, if the rate on Variable Rate Loans is so
calculated) equal to the weighted average of the rates on overnight federal
funds transactions as published by the Federal Reserve Bank of New York for such
day (or for any day that is not a Banking Day, for the immediately preceding
Banking Day).
"Final Maturity Date" means (i) with respect to Variable Rate and CD
Loans, the date 180 days after the Termination Date and (ii) with respect to
Eurodollar Loans, the numerically corresponding date in the sixth calendar month
after the Termination Date.
"Financial Contracts" means option contracts, options on futures
contracts, futures contracts, forward foreign currency exchange contracts,
options on foreign currencies, repurchase agreements, reverse repurchase
agreements, securities lending agreements, when-issued securities and other
similar arrangements entered into by the Borrower in the ordinary course of its
business in accordance with its Investment Practices.
"Fixed Base Rate" means with respect to any Fixed Rate Loan:
(a) for a Eurodollar Loan having an Interest Period of one, two, three
or six calendar months, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of 1%) quoted at approximately 11:00 a.m. London time by the
principal London branch of the Bank two Banking Days prior to the first day of
the Interest Period for such Loan for the offering to leading banks in the
London interbank market of Dollar deposits in immediately available funds, for a
period equal to the Interest Period of such Loan and in an amount substantially
equal to the principal amount of such Loan;
(b) for a CD Loan having an Interest Period of 30, 60, 90 or 180 days,
the rate per annum (rounded upwards, if necessary, to the nearest 1/20 of 1%)
determined by the bank to be the average of the bid rates quoted to it at the
Principal Office at approximately 10:00 a.m. New York City time (or as soon
thereafter as
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practicable) on the first day of the Interest Period for such Loan by New York
certificate of deposit dealers of recognized standing selected by the Bank for
the purchase at face value of certificates of deposit of the Bank having a
maturity equal to the Interest Period of such CD Loan and in an amount
substantially equal to the principal amount of such CD Loan; provided that, if
such quotations from such dealers are not available to the Bank, it shall
determine a reasonably equivalent rate on the basis of another source or sources
selected by it in good faith;
(c) for a Eurodollar Loan having an Interest Period of other than one,
two, three or six calendar months, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) quoted at approximately 11:00 a.m. London
time by the principal London branch of the Bank two Banking Days prior to the
first day of the Interest Period for such Loan for the offering to leading banks
in the London interbank market of Dollar deposits in immediately available funds
for a period, and in an amount, comparable to such Interest Period and principal
amount of the Eurodollar Loan which shall be made by the Bank and outstanding
during such Interest Period; and
(d) for a CD Loan having an Interest Period of other than 30, 60, 90 or
180 days, the rate per annum (rounded upwards, if necessary, to the nearest 1/20
of 1%) determined by the Bank to be the average of the bid rates quoted to it at
the Principal Office at approximately 10:00 a.m. New York City time (or as soon
thereafter as practicable) on the first day of the Interest Period for such Loan
by New York certificate of deposit dealers of recognized standing selected by
the Bank for the purchase at face value of certificates of deposit of the Bank
having a maturity, and in an amount, comparable to such Interest Period and the
principal amount of the CD Loan which shall be made by the Bank and outstanding
during such Interest Period; provided that, if such quotations from such dealers
are not available to the Bank, it shall determine a reasonably equivalent rate
on the basis of another source or sources selected by it in good faith.
"Fixed Rate" means, for any Fixed Rate Loan, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by the Bank to be
equal to the sum of (a) the quotient of (i) the Fixed Base Rate for such Loan
for the Interest Period therefor, divided by (ii) one minus the Reserve
Requirement for such Loan for such Interest Period plus (b) if such Loan is a CD
Loan, the Assessment Rate in effect at the commencement of such Interest Period.
"Fixed Rate Loan" means any Eurodollar or CD Loan.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the
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financial statements referred to in Section 5.05 (except for changes concurred
in by the Borrower's independent public accountants).
"Interest Period" means the period commencing on the date a Loan is
made and ending, as the Borrower may select pursuant to Section 2.06: (a) in the
case of Variable Rate Loans, on any day less than 180 days thereafter; (b) in
the case of Eurodollar Loans, on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter (or on such other day prior to
the numerically corresponding day in the sixth calendar month thereafter as the
Borrower may request) provided that each such Interest Period which commences on
the last Banking Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Banking Day of the appropriate calendar month; and (c) in
the case of CD Loans, on the day 30, 60, 90 or 180 days thereafter (or on such
other day less than 180 days thereafter as the Borrower may request).
"International Government Securities" means debt securities issued by
any country which is a member of OECD (other than the United States of America)
which are (x) rated "AA-" or better by S&P or "Aa3" or better by Moody's and (y)
owned by the Borrower free and clear of any Lien. It is understood that a call
option, written by the Borrower, on any type of security held by the Borrower
shall not be deemed to create a Lien on any security held by the Borrower
provided that the terms of such call option or any agreement relating thereto do
not create or grant any security interest in such security and Borrower retains
complete beneficial ownership of and control over such security; provided that
the Borrower may exercise such control through its Custodian and subcustodians.
"Investment Adviser" means Massachusetts Financial Services Company.
"Investment Practices" means the investment objectives and fundamental
investment policies and restrictions in effect with respect to the Borrower, as
may be set forth either in the Registration Statement or in a vote adopted by
the shareholders of the Borrower.
"Lending Office" means, for each type of Loan, the lending office of
the Bank (or of an affiliate of the Bank) designated as such for such type of
Loan on its signature page hereof or such other office of the Bank (or of an
affiliate of the Bank) as the Bank may from time to time specify to the Borrower
as the office by which its Loans of such type are to be made and maintained.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge,
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conditional sale, title retention agreement, financing lease or other
encumbrance or similar right of others, or any agreement to give any of the
foregoing.
"Loan" means any loan made by the Bank pursuant to Section 2.01.
"Margin" means (a) for a Variable Rate Loan, 0%; (b) for a Eurodollar
Loan, 3/8 of 1%; and (c) for a CD Loan, 3/8 of 1%.
"Net Asset Coverage" means, as at any date of determination thereof,
an amount equal to the sum of:
(a) the product of (x) the sum of: (i) the aggregate Fair Market Value
of Domestic Government Securities (other than securities subject to call
options) on such date of determination and (ii) with respect to each Domestic
Government Security subject to a call option, the lower of the Fair Market Value
of such security on such date of determination and the exercise price for such
security specified in the related call option, and (y) 66 2/3%; and
(b) the product of (x) the sum of: (i) the aggregate Fair Market Value
of International Government Securities (other than securities subject to call
options) on such date of determination and (ii) with respect to each
International Government Security subject to a call option, the lower of the
Fair Market Value of such security on such date of determination and the
exercise price for such security specified in the related call option, and (y)
50%.
"Net Asset Value" means the aggregate net asset value of the Borrower
as determined on each day that the New York Stock Exchange is open for trading
and in accordance with the requirements of the 1940 Act, and the terms of
Exhibit D hereto as such Exhibit may be amended by the Borrower in accordance
with the terms hereof.
"Note" means the promissory note of the Borrower in the form of Exhibit
A hereto evidencing the Loans made by the Bank hereunder.
"OECD" means the Organization for Economic Cooperation and
Development.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"Portfolio Report" means the monthly portfolio valuation report to be
provided by the Borrower to the Bank pursuant to Section 6.08(c) hereof.
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"Prime Rate" means that rate of interest from time to time announced by
the Bank at the Principal Office as its prime commercial lending rate.
"Principal Office" means the principal office of the Bank, presently
located at 1 Chase Manhattan Plaza, New York, New York 10081.
"Public Accountants" means the independent certified public accountants
of recognized standing, acting as auditors for the Borrower.
"Registration Statement" means as of any date of determination the
currently effective Registration Statement of the Borrower on Form N-2 or any
successor form as amended by amendment most recently filed with the Commission.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means any change after the date of this Agreement
in United States federal, state, municipal or foreign laws or regulations
(including without limitation Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of banks
including the Bank of or under any United States, federal, state, municipal or
foreign laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
"Reserve Requirement" means, for any Interest Period for any Fixed Rate
Loan, the average maximum rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during the
Interest Period for such Loan under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000 against
(a) in the case of Eurodollar Loans, "Eurocurrency liabilities (as such term is
used in Regulation D) or (b) in the case of CD Loans, non-personal Dollar time
deposits in an amount of $100,000 or more. Without limiting the effect of the
foregoing, the Reserve Requirement shall also reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the Fixed Base Rate for Eurodollar or CD Loans (as the case
may be) is to be determined as provided in the definition of "Fixed Base Rate"
in this Section 1.01 or (ii) any
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category of extensions of credit or other assets which include Eurodollar or CD
Loans (as the case may be).
Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the securities or other ownership
interests having ordinary voting power (absolutely or contingently) for the
election of directors or other persons performing similar functions are at the
time owned directly or indirectly by such Person.
Termination Date" means the later of (a) November 9, 1993 and (b) if
the Termination Date has been extended pursuant to Section 2.01(c), the date to
which the Termination Date has been so extended; provided that if such date is
not a Banking Day, the Termination Date shall be the immediately preceding
Banking Day.
"Variable Rate" means, for any day, the higher of (a) the Federal Funds
Rate for such day plus 3/8 of 1% and (b) the Prime Rate for such day.
"Variable Rate Loan" means any Loan when and to the extent the interest
rate for such Loan is determined in relation to the Variable Rate.
"1940 Act" means the Investment Company Act of 1940, as amended .
Section 1.02. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
ARTICLE 2. THE CREDIT.
Section 2.01. The Loans. (a) Subject to the terms and conditions of
this Agreement, the Bank agrees to make loans (the "Loans") to the Borrower from
time to time, from and including, the date hereof to, but excluding, the
Termination Date up to, but not exceeding, the amount of the Commitment. The
Loans may be outstanding as Variable Rate Loans or Eurodollar Loans or CD Loans
(each a "type" of Loan). Loans of each type shall be made and maintained at the
Bank's Lending Office for such type of Loans.
(b) Each Loan shall be due and payable on the last day of the
Interest Period therefor.
(c) The Borrower may request, in a notice given as herein provided not
less than 110 days and not more than 150 days prior to the Termination Date then
in effect (the Existing Termination Date), that the Termination Date be
extended, which notice shall specify a date (which shall be no later than the
ninetieth day before the Existing Termination Date) as of which the requested
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extension is to be effective (the "Requested Effective Date"), and the new
Termination Date to be in effect following such extension the "Requested
Termination Date"), which date shall be no more than 360 days after the
Requested Effective Date of such extension (with the Effective Date being
counted as the first day). The Bank shall, not later than a date 90 days prior
to the Existing Termination Date, send by facsimile transmission a notice to the
Borrower (the "Bank Notice") of its election to extend or not to extend the
Termination Date and shall mail a copy of the Bank Notice to the Borrower;
provided, however, that the failure by the Bank to give the Bank Notice shall be
deemed to be an election not to extend the Termination Date. A Bank Notice
hereunder notifying the Borrower of the Bank's election to extend the
Termination Date shall specify the extended Termination Date which shall be a
date 360 days after the date of the Bank Notice (with the date of the Bank
Notice counted as the first day) and the date of the Bank Notice shall be the
date on which the extension is to be effective (the "Effective Date").
Section 2.02. The Note. The Loans shall be evidenced by a single
promissory note in favor of the Bank in the form of Exhibit A, dated the date of
this Agreement, duly completed and executed by the Borrower.
Section 2.03. Purpose. The Borrower shall use the proceeds of the Loans
for such purposes, including without limitation the purchase of securities, as
are in accordance with the Investment Practices; provided, however, that such
proceeds shall not be used for the purpose, whether immediate, incidental or
ultimate, of buying or carrying "margin stock" within the meaning of Regulation
U.
Section 2.04. Borrowing Procedures. The Borrower shall give the Bank
notice of each borrowing to be made hereunder as provided in Section 2.08. Not
later than 1:00 p.m. New York City time on the date of such borrowing, the Bank
shall, through its Lending Office and subject to the conditions of this
Agreement, make the amount of the Loan to be made by it on such day available to
the Borrower, in immediately available funds, at the Principal Office and shall
promptly transfer such funds pursuant to the Borrower's instructions.
Section 2.05. Prepayments. The Borrower shall have the right to prepay
Loans at any time or from time to time; provided that: (a) the Borrower shall
give the Bank notice of each such prepayment as provided in Section 2.08; and
(b) any prepayment of a Fixed Rate Loan on a day other than the last day of the
Interest Period for such Loan shall include any amounts payable pursuant to
Section 3.04 in connection therewith.
Section 2.06. Interest Periods. In the case of each Loan, the
Borrower shall select an Interest Period of any duration in
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accordance with the definition of Interest Period in Section 1.01, subject to
the following limitations: (a) no Interest Period may extend beyond the Final
Maturity Date; and (b) if an Interest Period would end on a day which is not a
Banking Day, such Interest Period shall be extended to the next Banking Day,
unless, in the case of a Eurodollar Loan, such Banking Day would fall in the
next calendar month in which event such Interest Period shall end on the
immediately preceding Banking Day.
Section 2.07. Changes of Commitment. (a) The Borrower shall have the
right to reduce or terminate the amount of unused Commitment at any time or from
time to time, provided that: (i) the Borrower shall give notice of each such
reduction or termination to the Bank as provided in Section 2.08; and (ii) each
partial reduction shall be in an aggregate amount at least equal to $10,000,000.
(b) The Commitment once reduced or terminated may not be
reinstated.
Section 2.08. Certain Notices. Notices by the Borrower to the Bank of
each borrowing pursuant to Section 2.04, each prepayment pursuant to Section
2.05 and each reduction or termination of the Commitment pursuant to Section
2.07 shall be irrevocable and shall be effective only if received by the Bank
not later than 12:00 noon New York City time, and (a) in the case of borrowings
(i) of Variable Rate Loans, given on the Banking Day therefor; (ii) Eurodollar
Loans, given three Banking Days prior thereto; and (iii) CD Loans, given two
Banking Days prior thereto; (b) in the case of prepayments of Loans, given one
Banking Day prior thereto; and (c) in the case of reductions or termination of
the Commitment, given three Banking Days prior thereto. Each such notice shall
specify the Loans to be borrowed or prepaid and the amount (subject to Section
2.09) and type of the Loans to be borrowed or prepaid and the date of borrowing
or prepayment (which shall be a Banking Day). Each such notice of reduction or
termination shall specify the amount of the Commitment to be reduced or
terminated.
Section 2.09. Minimum Amounts. Except for borrowings which exhaust the
full remaining amount of the Commitment, and prepayments which result in the
prepayment of all Loans, each borrowing and prepayment of principal of Loans
shall be in an amount at least equal to $10,000,000.
Section 2.10. Interest. (a) Interest shall accrue on the
outstanding and unpaid principal amount of each Loan for the period from and
including the date of making such Loan to but excluding the date such Loan is
due at the following rates per annum: (i) for a Variable Rate Loan, at a
variable rate per annum equal to the Variable Rate plus any Margin and (ii)
for a Fixed Rate Loan, at a fixed rate equal to the Fixed Rate plus the
Margin. If the
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principal amount of any Loan and any other amount payable by the Borrower
hereunder or under the Note shall not be paid when due (at stated maturity, by
acceleration or otherwise), interest shall accrue on such amount to the fullest
extent permitted by law from and including such due date to but excluding the
date such amount is paid in full at the Default Rate.
(b) The interest rate on each Variable Rate Loan shall change when the
Variable Rate changes and interest on each such Loan shall be calculated on the
basis of a year of 365 (or in the case of a leap year, 366) days for the actual
number of days elapsed. Interest on each Fixed Rate Loan shall be calculated on
the basis of a year of 360 days for the actual number of days elapsed.
(c) Accrued interest with respect to a Loan shall be due and payable in
arrears upon any payment of principal of the Loan and on the last day of the
Interest Period with respect thereto and, in the case of an Interest Period
greater than three months or 90 days, at three-month (in the case of a
Eurodollar Loan) or 90-day (in the case of a CD Loan or a Variable Rate Loan)
intervals after the first day of such Interest Period; provided that interest
accruing at the Default Rate shall be due and payable from time to time on
demand of the Bank.
Section 2.11. Fees. The Borrower shall pay to the Bank a commitment fee
on the daily average unused Commitment for the period from and including the
date hereof to the earlier of the date the Commitment is terminated and the
Termination Date at a rate per annum equal to 1/8 of 1%, calculated on the basis
of a year of 365 (or, in a leap year, 366) days for the actual number of days
elapsed. The accrued commitment fee shall be due and payable in arrears upon the
date of any reduction or termination of the Commitment with respect to the
amount of the Commitment so reduced or terminated, and otherwise on the last day
of each March, June, September and December, commencing on the first such date
after the Closing Date, and on the Termination Date.
Section 2.12. Payments Generally. All payments under this Agreement or
the Note shall be made in Dollars in immediately available funds not later than
1:00 p.m. New York City time on the relevant dates specified above (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Banking Day) at the Principal Office for the account of the
applicable Lending Office of the Bank; provided that, when a new Loan is to be
made by the Bank on a date the Borrower is to repay any principal of an
outstanding Loan, the Bank shall apply the proceeds thereof to the payment of
the principal to be repaid and only an amount equal to the difference between
the principal to be borrowed and the principal to be repaid shall be made
available by the Bank to the Borrower as provided in Section 2.04 or paid by the
Borrower to the Bank pursuant to this Section 2.12, as the case may be. The
Borrower shall, at the time of making each payment
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under this Agreement or the Note, specify to the Bank the principal or other
amount payable by the Borrower under this Agreement or the Note to which such
payment is to be applied (and in the event that it fails to so specify, or if a
Default or Event of Default has occurred and is continuing, the bank may apply
such payment as it may elect in its sole discretion). If the due date of any
payment under this Agreement or the Note would otherwise fall on a day which is
not a Banking Day, such date shall be extended to the next succeeding Banking
Day and interest shall be payable for any principal so extended for the period
of such extension.
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. Additional Costs. (a) If the bank shall determine an
additional amount to be necessary to compensate it for any costs which the Bank
determines are attributable to its making or maintaining any Fixed Rate Loans
under this Agreement or the Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by the Bank hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to the Bank under this Agreement or the Note in respect of
any of such Loans (other than taxes imposed on the overall net income of the
Bank or of its Lending Office for any of such Loans by the jurisdiction in which
the Principal Office or such Lending Office is located); or (ii) imposes or
modifies any reserve, special deposit, deposit insurance or assessment, minimum
capital, capital ratio or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, the
Bank (including any of such Loans or any deposits referred to in the definition
of "Fixed Base Rate" in Section 1.01); or (iii) imposes any other condition
affecting this Agreement or the Note (or any of such extensions of credit or
liabilities), the Bank will notify the Borrower of the occurrence of such event
occurring after the date of this Agreement which will entitle the Bank to
compensation pursuant to this Section 3.01(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such compensation. The
additional amounts payable hereunder by the Borrower will be such amounts as, in
the Bank's reasonable determination, will compensate the Bank for such
Additional Costs and, subject to the further terms of this paragraph, such
amount shall be due and payable by the Borrower to the Bank at the time of such
notice. If at the time of notice to the Borrower that amounts are due under this
Section 3.01(a), the Borrower and the Bank disagree as to the amounts payable,
then the Borrower and the Bank shall thereafter attempt to negotiate in good
faith an adjustment to the compensation payable hereunder which will adequately
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compensate the Bank for such Additional Costs. If the Borrower and the Bank are
unable to agree to such adjustment within thirty days of the day on which the
Borrower receives such notice, then commencing as of the date of such notice,
the fees payable hereunder shall increase by an amount which will, in the Bank's
reasonable determination, compensate the Bank for such Additional Costs, the
Bank's determination of such amount to be conclusive and binding on the Borrower
absent manifest error.
(b) Without limiting the effect of the foregoing provisions of this
Section 3.01, in the event that, by reason of any Regulatory Change, the Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
the Bank which includes deposits by reference to which the interest rate on
Eurodollar or CD Loans is determined as provided in this Agreement or a category
of extensions of credit or other assets of the Bank which includes Eurodollar or
CD Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if the Bank so elects
by notice to the Borrower, the obligation of the Bank to make Loans of such type
hereunder shall be suspended until the date such Regulatory Change ceases to be
in effect.
(c) Without limiting the effect of the foregoing provisions of this
Section 3.01 (but without duplication), the Borrower shall pay to the Bank from
time to time on request such amounts as the Bank may determine to be necessary
to compensate the Bank for any costs which it determines are attributable to the
maintenance by it or any of its affiliates pursuant to any law or regulation of
any jurisdiction or any interpretation, directive or request (whether or not
having the force of law and whether in effect on the date of this Agreement or
thereafter) of any court or governmental or monetary authority of capital in
respect of its Loans hereunder or its obligation to make Loans hereunder (such
compensation to include, without limitation, an amount equal to any reduction in
return on assets or equity of the Bank to a level below that which it could have
achieved but for such law, regulation, interpretation, directive or request).
The Bank will notify the Borrower if it is entitled to compensation pursuant to
this Section 3.01(c) as promptly as practicable after it determines to request
such compensation. If at the time of notice to the Borrower that amounts are due
under this Section 3.01(c) the Borrower and the Bank disagree as to the amounts
payable, then the Borrower and the Bank shall thereafter attempt to negotiate in
good faith an adjustment to the compensation payable hereunder which will
adequately compensate the Bank for such costs. If the Borrower and the Bank are
unable to agree to such adjustment within thirty days of the day on which the
Borrower receives such notice, then commencing as of the date of such notice,
the fees payable hereunder shall increase by an amount which will, in the Bank's
reasonable determination, compensate the Bank for such costs, the
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Bank's determination of such amount to be conclusive and binding on the Borrower
absent manifest error.
(d) Determinations and allocations by the Bank for purposes of this
Section 3.01 of the effect of any Regulatory Change pursuant to subsections (a)
or (b), or of the effect of capital maintained pursuant to subsection (c), on
its costs of making or maintaining Loans or its obligation to make Loans, or on
amounts receivable by, or the rate of return to, it in respect of loans or such
obligation, and of the additional amounts required to compensate the Bank under
this Section 3.01, shall be conclusive, absent manifest error, provided that
such determinations and allocations are made in good faith and allocated among
commercial customers of the Bank on a fair and reasonable basis. The Bank shall
upon request provide to the Borrower in reasonable detail a copy of calculations
done by the bank in making such determinations.
Section 3.02. Basis For Determining Interest Rate Inadequate or Unfair.
Anything herein to the contrary notwithstanding, if the Bank determines in good
faith (which determination shall be conclusive) that:
(a) quotations of interest rates for the relevant deposits referred to
in the definition of "Fixed Base Rate" in Section 1.01 are not available in the
relevant amounts or for the relevant maturities for purposes of determining the
rate of interest for any type of Fixed Rate Loans as provided in this Agreement;
or
(b) the relevant rates of interest referred to in the definition of
"Fixed Base Rate" in Section 1.01 upon the basis of which the rate of interest
for any type of Fixed Rate Loans is to be determined do not adequately cover the
cost to the Bank of making or maintaining such Loans;
then the Bank shall give the Borrower prompt notice thereof, and so long as such
condition remains in effect, the Bank shall be under no obligation to make Loans
of such type.
Section 3.03. Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for the Bank or its Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then the Bank shall promptly notify the Borrower thereof and the Bank's
obligation to make or maintain Eurodollar Loans hereunder shall be suspended
until such time as the Bank may again make and maintain such affected Loans and
the Borrower shall, upon the request of the Bank on the date specified, prepay
any of such Loans then outstanding together with accrued interest and any amount
due under Section 3.04. If the Bank shall request prepayment of such Eurodollar
Loans in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each such Eurodollar Loan,
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together with accrued interest thereon. Concurrently with prepaying each such
Eurodollar Loan, the Borrower shall borrow a Variable Rate Loan in an equal
principal amount, plus, to the extent an adequate amount of unused Commitment is
available, an amount of principal equal to interest accrued on each such prepaid
Eurodollar Loan from the Bank, and the Bank shall make such a Variable Rate Loan
with an Interest Period equal to the remaining portion of the Interest Period of
the Eurodollar Loan being repaid.
Section 3.04. Certain Compensation. The Borrower shall pay to the Bank,
upon the request of the bank, such amount or amounts as shall be sufficient (in
the reasonable opinion of the Bank) to compensate it for any loss (other than
the lost Margin), cost or expense which the Bank determines is attributable to:
(a) any payment of a Fixed Rate Loan on a date other than the last day
of an Interest Period for such Loan (whether by reason of acceleration or
otherwise); or
(b) any failure by the Borrower to borrow a Fixed Rate Loan to be made
by the Bank on the date specified therefor in the relevant notice under Section
2.04.
Without limiting the foregoing, such compensation shall include an
amount equal to the excess, if any, of: (i) the amount of interest (excluding
any Margin) which otherwise would have accrued on the principal amount so paid
or not borrowed for the period from and including the date of such payment or
failure to borrow to but excluding the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow, to but excluding the last day of
the Interest Period for such Loan which would have commenced on the date
specified therefor in the relevant notice) at the applicable rate of interest
for such Loan provided for herein; over (ii) the amount of interest (as
reasonably determined by the Bank) the Bank would have bid in the London
interbank market (if such Loan is a Eurodollar Loan) or the United States
secondary certificate of deposit market (if such Loan is a CD Loan) for Dollar
deposits for amounts comparable to such principal amount and maturities
comparable to such period. A determination of the Bank as to the amounts payable
pursuant to this Section 3.04 shall be conclusive absent manifest error and the
Bank shall upon request provide to Borrower a copy of calculations in reasonable
detail done by the Bank in making such determination.
ARTICLE 4. CONDITIONS PRECEDENT.
Section 4.01. Documentary Conditions Precedent. The obligation of
the Bank to make the Loan constituting the initial borrowing is subject to the
condition precedent that the Bank shall
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have received on or before the date of such Loan each of the following, in form
and substance satisfactory to the Bank and its counsel:
(a) the Note duly executed by the Borrower;
(b) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, attesting to all trust action taken by the
Borrower, including resolutions of its Board of Trustees authorizing the
execution, delivery and performance of the Facility Documents and each other
document to be delivered pursuant to this Agreement;
(c) a certificate of the Secretary or Assistant Secretary of the
Borrower, dated the Closing Date, certifying the names and true signatures of
the officers of the Borrower and such other persons authorized to sign the
Facility Documents and the other documents to be delivered by the Borrower under
this Agreement;
(d) a certificate of a duly authorized officer of the Borrower, dated
the Closing Date, stating that the representations and warranties in Article 5
are true and correct on such date as though made on and as of such date and that
no event has occurred and is continuing which constitutes a Default or Event of
Default; and
(e) a favorable opinion of in-house counsel for the Borrower, dated the
Closing Date, in substantially the form of Exhibit B and as to such other
matters as the Bank may reasonably request.
Section 4.02. Additional Conditions Precedent. The obligation of the
Bank to make any Loan (including the initial Loan) shall be subject to the
further conditions precedent that on the date of such Loan:
(a) the following statements shall be true:
(i) the representations and warranties contained in Article 5
are true and correct on and as of the date of such Loan as though made on and as
of such date, provided that the representations and warranties in Section 5.04
need not be true and correct if after such Loan there is no net increase in the
aggregate principal amount outstanding hereunder; and
(ii) no Default or Event of Default has occurred and is
continuing, or would result from such Loan.
(b) immediately after giving effect to such Loan, Net Asset Coverage
shall equal or exceed the aggregate outstanding amount of the Loans;
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(c) immediately after giving effect to such Loan, no more than 25% of
the assets of the Borrower shall constitute "margin stock" (as defined in
Regulation U); and
(d) the Bank shall have received such approvals, opinions or documents
as the Bank may reasonably request.
Section 4.03. Deemed Representations. Each notice of a Loan and
acceptance by the Borrower of the proceeds thereof shall constitute a
representation and warranty that the statements contained in Sections 4.02(a),
4.02(b) and 4.02(c) are true and correct both on the date of such notice and,
unless the Borrower otherwise notifies the Bank prior to such borrowing, as of
the date of such Loan.
ARTICLE 5. REPRESENTATIONS AND WARRANTIES.
The Borrower hereby represents and warrants that:
Section 5.01. Organization. Good Standing and Due Qualification. The
Borrower is a business trust duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, has the trust
power and authority to own its assets and to transact the business in which it
is now engaged or proposed to be engaged in accordance with its Investment
Practices.
Section 5.02. Trust Power and Authority; No Conflicts. The execution,
delivery and performance (including without limitation the incurrence of
indebtedness by the Borrower as contemplated by the Facility Documents) by the
Borrower of the Facility Documents have been duly authorized by all necessary
trust action and do not and will not: (a) require any consent or approval of its
shareholders; (b)) contravene its declaration of trust or by-laws or any of its
Investment Practices; (c) violate any provision of, or require any filing (other
than routine filings where the failure to make such filing would not have a
material adverse effect on the financial condition, operations, properties or
business of the Borrower or the ability of the Borrower to perform its
obligations to pay principal and interest on Loans made under the Facility
Documents), registration, consent or approval under, any law (including, without
limitation, the 1940 Act), rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to the
Borrower; (d) result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien, upon or with respect to any of the properties now owned
or hereafter acquired by the Borrower; or (f) cause the Borrower to be
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<PAGE>
in default under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture, agreement,
lease or instrument.
Section 5.03. Legally Enforceable Agreements. Each Facility Document
is, or when delivered under this Agreement will be, a legal, valid and binding
obligation of the borrower enforceable against the Borrower in accordance with
its terms, except to the extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other similar laws affecting creditors'
rights generally.
Section 5.04. Litigation. There are no actions, suits or formal legal
proceedings pending or, to the knowledge of the Borrower, threatened, against or
affecting the Borrower before any court, governmental agency or arbitrator, in
which there is a reasonable possibility, in any one case or in the aggregate, of
an adverse decision which would materially adversely affect the financial
condition, operations, properties or business of the Borrower or the ability of
the Borrower to perform its obligations to pay principal and interest on Loans
made under the Facility Documents.
Section 5.05. Financial Statements. The annual financial statements
dated October 31, 1991 and the semi-annual financial statements of the Borrower
dated April 30, 1992, each together with the opinion thereon, of the independent
certified public accountants appointed as the auditors of the Borrower, copies
of which have been furnished to the Bank, are complete and correct and fairly
present the financial condition of the Borrower as at such dates and the results
of the operations of the Borrower for the periods covered by such statements,
all in accordance with GAAP consistently applied (subject to year end
adjustments in the case of the interim financial statements). There are no
liabilities of the Borrower, fixed or contingent, which are material but are not
reflected in the financial statements or in the notes thereto, other than
liabilities arising in the ordinary course of business since April 30, 1992 and
liabilities which are not otherwise prohibited by the terms of this Agreement.
No information, exhibit or report furnished by the Borrower to the Bank in
connection with the negotiation of this Agreement contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not materially misleading.
Section 5.06. Ownership and Liens. The Borrower has title to, or valid
leasehold interest in, all of its properties and assets, real and personal,
including the properties and assets, and leasehold interests reflected in the
financial statements referred to in Section 5.05 (other than any properties or
assets disposed of in the ordinary course of business), and none of the
properties and assets owned by the Borrower and none of its leasehold interests
is
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<PAGE>
subject to any Lien, except as disclosed in such financial statements or as
may be permitted hereunder.
Section 5.07. Taxes. The Borrower has filed all federal income tax
returns required to be filed and has paid all taxes, assessments and
governmental charges and levies thereon to be due, including interest and
penalties, except where Borrower is contesting in good faith by appropriate
proceedings such payment and is maintaining in accordance with GAAP and the 1940
Act appropriate reserves for the accrual of the same, and has not received a
notice that any of such returns is under examination except as disclosed by the
Borrower to the Bank in writing. The Borrower has filed all other tax returns
required to be filed except where the failure to so file would not have a
material adverse effect on the financial condition, operations, properties or
business of the Borrower or on the ability of the Borrower to perform its
obligations under the Facility Documents.
Section 5.08. Subsidiaries. The Borrower does not have any
Subsidiaries.
Section 5.09. Credit Arrangements. As of the date hereof, Schedule I is
a complete and correct list of all credit agreements, indentures, purchase
agreements, guaranties, and other investments, agreements and arrangements
presently in effect providing for or relating to extensions of credit in an
amount individually of $5,000,000 or more (including agreements and arrangements
for the issuance of letters of credit or for acceptance financing, but excluding
Financial Contracts entered into in the ordinary course of business in
accordance with the Investment Practices) in respect of which the Borrower is in
any manner directly or contingently obligated; and the maximum principal or face
amounts of the credit in question, outstanding and which can be outstanding, are
correctly stated, and all Liens of any nature given or agreed to be given as
security therefor are correctly described or indicated in such Schedule.
Section 5.10. Operation of Business. The Borrower possesses all
licenses, permits, franchises, patents, copyrights, trademarks and trade names,
or rights thereto, to conduct its business substantially as now conducted and as
presently proposed to be conducted, and the Borrower is not in violation of any
valid rights of others with respect to any of the foregoing, except where
Borrower's violation would not have a material adverse effect on the business,
properties, assets, operations or conditions, financial or otherwise, of the
Borrower, or the ability of the Borrower to carry out its obligations to pay the
principal and interest on Loans made under the Facility Documents.
Section 5.11. Hazardous Materials. The Borrower is not required to
obtain any permits, licenses and other authorizations which are required under
all Environmental Laws, except to the
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extent failure to have any such permit, license or authorization would not have
a material adverse effect on the financial condition, operations, business or
prospects of the Borrower.
Section 5.12. No Default on Outstanding Judgments or Orders. The
Borrower has satisfied all judicial judgments and the Borrower is not in default
with respect to any judgment, writ, injunction, decree, rule or regulation of
any court, arbitrator or federal, state, municipal or other governmenta1
authority, commission, board, bureau, agency or instrumentality, domestic or
foreign, except where Borrower's failure to satisfy such judgment or default
would not have a material adverse effect on the business, properties, assets,
operations or conditions, financial or otherwise, of the Borrower, or the
ability of the Borrower to carry out its obligations to pay the principal and
interest on Loans made under the Facility Documents.
Section 5.13. No Defaults on Other Agreements. The Borrower is not a
party to any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any charter or restriction under the declaration of
trust which would have a material adverse effect on the financial condition,
operation, business, properties, assets, operations or conditions, financial or
otherwise, of the Borrower, or the ability of the Borrower to carry out its
obligations to pay the principal of and interest on Loans made under the
Facility Documents. The Borrower is not in default in any material respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument material to its business
to which it is a party.
Section 5.14. Labor Disputes and Acts of God. The business and the
properties of the Borrower are not affected by any fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance), materially and adversely affecting such business or
properties or the operations of the Borrower.
Section 5.15. Governmental Regulation: Trust Documents. (a) The
Borrower is a closed-end investment company registered under the 1940 Act and
has registered the sale of the Borrower's shares of beneficial interest under
the Securities Act of 1933, as amended, pursuant to the Registration Statement.
(b) The Borrower possesses all material governmental licenses,
authorizations, consents and approvals required to carry on its business in
accordance with its Investment Practices.
(c) The Borrower is in material compliance with all investment policies
and restrictions set forth in its declaration of trust and by-laws or in its
Investment Practices, and with all
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<PAGE>
laws, rules, regulations, orders, agreements, undertakings, judgments,
injunctions, decrees or other instruments applicable to the Borrower.
Section 5.16. Affiliation. To the best of the knowledge of the
Borrower without independent investigation, neither the Borrower nor any
Affiliated Person of the Borrower is an Affiliated Person of the Bank.
Section 5.17. Investment Adviser.
(a) The Investment Adviser is duly registered as an investment adviser
under the Advisers Act and is the sole investment adviser to the Borrower; and
(b) The Investment Adviser is a wholly-owned subsidiary of Sun Life
Assurance Company of Canada (U.S.).
ARTICLE 6. AFFIRMATIVE COVENANTS.
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement, the Borrower shall:
Section 6.01. Maintenance of Existence. Preserve and maintain its trust
existence and all of its rights, privileges and franchises necessary or
desirable in the normal conduct of its business. The Borrower will pay and
discharge at or before maturity all its material obligations and liabilities,
including, without limitation, material tax liabilities, except where the same
may be contested in good faith by appropriate proceedings, and will maintain, in
accordance with generally accepted accounting principles, appropriate reserves
for the accrual of the same.
Section 6.02. Conduct of Business. Continue to engage in a regular
manner in a business of the same general type as conducted by it on the date
of this Agreement.
Section 6.03. Maintenance of Properties. Maintain, keep and preserve
all of its properties, (tangible and intangible) necessary or useful in the
proper conduct of its business in good working order and condition, ordinary
wear and tear excepted.
Section 6.04. Maintenance of Records. Keep adequate records and books
of account, in which complete entries will be made in accordance with the 1940
Act and regulations promulgated thereunder and GAAP (with the exception of the
practice whereby the Borrower records the purchase or sale of any security on
the business day immediately following the trade date for such purchase or sale
in accordance with accepted industry practice) reflecting all financial
transactions of the Borrower.
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<PAGE>
Section 6.05. Maintenance of Insurance. Maintain insurance with
financially sound and reputable insurance companies or associations in such
amounts and covering such risks as are usually carried by companies engaged in
the same or a similar business and similarly situated, which insurance may
provide for reasonable deductibility from coverage thereof.
Section 6.06. Compliance with Laws. Comply in all respects with all
applicable laws, rules, regulations (including, without limitation, the 1940
Act) and orders where the failure to so comply would have a material adverse
effect on the financial condition or operations of the Borrower and pay all
material taxes, assessments and governmental charges imposed upon it or upon its
property before the same become delinquent, except where the same may be
contested in good faith by appropriate proceedings, and for which the Borrower
maintains, in accordance with the 1940 Act and GAAP, appropriate reserves after
the accrual of same.
Section 6.07. Right of Inspection. At any reasonable time and from time
to time, permit the Bank or any agent or representative thereof, to examine and
make copies and abstracts from the records and books of account of, and visit
the properties of, the Borrower and to discuss the affairs, finances and
accounts of the Borrower with any of its officers and Chairman of the Board of
Trustees and the Borrower's independent accountants, provided that the Bank
shall pay the costs for such access to the Borrower's independent accountants,
provided further that the Borrower shall pay the costs for such access to the
Borrower's independent accountants if an Event of Default has occurred and has
not been cured or the Bank requests such access to determine whether such Event
of Default has been cured.
Section 6.08. Reparation Requirements. Furnish to the Bank:
(a) as soon as available and in any event within 75 days after the end
of each fiscal year of the Borrower, a statement of assets and liabilities as of
the end of each fiscal year, a statement of operations for such fiscal year, a
statement of changes in net assets for such fiscal year and the preceding fiscal
year, a portfolio of investments as of the end of such fiscal year and the per
share and other data for such fiscal year as well as for the four preceding
years (if applicable) prepared in accordance with regulatory requirements,
setting forth in each case in comparative form to the extent required by the
Securities and Exchange Commission corresponding figures from the preceding
fiscal year (except as to portfolios of investments, statements of net assets
and statements of operations), all reported on in a manner acceptable to the
Securities and Exchange Commission by independent certified public accountants
of recognized standing, acting as auditors for the Borrower (the "Public
Accountants");
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(b) as soon as available and in any event within 75 days after the end
of the first six months of each fiscal year of the Borrower, a statement of
assets and liabilities as of the end of such semi-annual semester, a statement
of operations for such semiannual semester, a statement of changes in net assets
for such semi-annual semester, a portfolio of investments as of the end of such
semi-annual semester, all prepared in accordance with regulatory requirements
and certified (subject to normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by the
Treasurer or any Assistant Treasurer of the Borrower, provided that such
certification shall not be required if the financial materials to be provided
hereunder are certified by the Public Accountants;
(c) as soon as available and in any event within 15 days after the end
of each month of each fiscal year of the Borrower, (i) a Portfolio Report which
shall include a list in reasonable detail of all assets of the Borrower as of
the last day of such month, including, without limitation, with respect to each
security, the issuer, issue, coupon rate, maturity date, rating, total cost, and
Fair Market Value; and (ii) after the end of a month in which a Loan was
outstanding, a statement (the "Asset Coverage Statement"), substantially in the
form attached as Exhibit C hereto, certified by the Treasurer or any Assistant
Treasurer of the Borrower, setting forth the calculations required to determine
Net Asset Coverage with computations demonstrating compliance with the covenant
contained in Article 8 as of the last day of such month and providing
information as to the strike price of any securities subject to call options
which are included in the Net Asset Coverage calculation, delivered together
with the Portfolio Report which shall indicate which specific securities listed
therein are included by the Borrower in the Net Asset Coverage calculation in
the Asset Coverage Statement;
(d) promptly upon receipt thereof, copies of any material reports
submitted to the Borrower by independent certified public accountants in
connection with examination of the financial statements of the Borrower made by
such accountants;
(e) simultaneously with the delivery of the financial statements
referred to in Section 6.08(a) and (b), a certificate of the Treasurer or any
Assistant Treasurer of the Borrower (i) certifying that to the best of his
knowledge no Default or Event of Default has occurred and is continuing or, if a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action which is proposed to be taken with respect
thereto;
(f) promptly after the commencement thereof, notice of all actions,
suits, and formal legal proceedings before any court or governmental department,
commission, board, bureau, agency or
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instrumentality, domestic or foreign, affecting the Borrower which, if
determined adversely to the Borrower, would have a material adverse effect on
the financial condition, properties, or operations of the Borrower;
(g) as soon as possible and in any event within 10 days after the
occurrence of each Default or Event of Default a written notice setting forth
the details of such Default or Event of Default and the action which is proposed
to be taken by the Borrower with respect thereto;
(h) promptly after the furnishing thereof, copies of any material
statement or report furnished to any other party pursuant to the terms of any
indenture, loan or credit or similar agreement, which shall not include
Financial Contracts entered into by the Borrower in accordance with the
Investment Practices, and not otherwise required to be furnished to the Bank
pursuant to any other clause of this Section 6.08;
(i) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and material reports which the Borrower sends
to its shareholders, and copies of all regular, periodic, and special reports
and all registration statements and amendments thereto which the Borrower files
with the Securities and Exchange Commission (including without limitation any
amendments to the Registration Statement) or any governmental authority which
may be substituted therefor, or with any national securities exchange;
(j) if at any time the value of all "margin stock" (as defined in
Regulation U) owned by the Borrower exceeds (or would, following the application
of the proceeds of any Loan hereunder, exceed) 25% of the value of the total
assets of the Borrower, a statement in conformity with the requirements of
Federal Reserve Form U-1 referred to in Regulation U; the value of the total
assets will be the Fair Market Value of the assets; and
(k) such other information respecting the condition or operations,
financial or otherwise, of the Borrower as the Bank may from time to time
reasonably request.
Section 6.09. Compliance with Investment Restrictions. The Borrower
will at all times comply with the fundamental investment restrictions set forth
in its Investment Practices, except where the failure to so comply will not have
a material adverse effect on the business or financial condition of the Borrower
or impair its ability to satisfy its obligations to pay principal and interest
on the Loans made under the Facility Documents.
Section 6.10. Investment Company Act of 1940. The Borrower will at
all times be a registered investment company under the 1940 Act.
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ARTICLE 7. NEGATIVE COVENANTS.
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement, the Borrower shall not:
Section 7.01. Liens. Create, incur, assume or suffer to exist any
Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(a) Liens securing the Loans hereunder;
(b) Liens arising in connection with Financial Contracts entered into
in accordance with the Investment Practices in the ordinary course of business;
(c) Liens imposed by law, such as mechanic's materialsmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(d) the Lien granted to the Custodian pursuant to a custodian agreement
between such custodian and the Borrower, as in effect from time to time, and any
Liens securing reimbursement obligations in respect of a letter of credit issued
or renewed (or increased in connection with an increase in coverage or premiums)
for the benefit of ICI Mutual Insurance Company;
(e) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(f) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business, provided, that
no Liens may be permitted against securities owned by the Borrower pursuant to
this subparagraph (f);
(g) Liens in respect of bonds posted in the appeal of judgments, and
judgment and other similar Liens arising in connection with court proceedings,
provided that the execution or other enforcement of such Liens is effectively
stayed and the claims secured thereby are being actively contested in good faith
and by appropriate proceedings;
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<PAGE>
(h) purchase money Liens on any property other than securities
hereafter acquired or the assumption of any Lien on property other than
securities existing at the time of such acquisition, or a Lien incurred in
connection with any conditional sale or other title retention agreement or a
capital lease; provided that:
(i) any property subject to any of the foregoing is acquired
by the Borrower in the ordinary course of its business and the Lien on any such
property is created contemporaneously with such acquisition;
(ii) each such Lien shall attach only to the property so
acquired and fixed improvements thereon; and
(iii) the indebtedness secured by all such Liens shall not
exceed at any time in the aggregate the lesser of $20,000,000 or 2.5% of the Net
Asset Value of the Borrower; and
(i) any Lien existing on any asset prior to the date of acquisition
thereof by the Borrower provided that such asset was acquired by the Borrower in
respect of claims of the Borrower against an issuer of securities held by the
Borrower, which assets are received by the Borrower pursuant to bankruptcy,
insolvency, reorganization or similar proceeding against such issuer; and
provided further that the indebtedness secured by all such Liens shall not
exceed at any time in the aggregate 5% of the Net Asset Value of the Borrower.
Section 7.02. Mergers, Etc. The Borrower shall not merge or consolidate
with, or sell, assign, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, any Person (or enter into any agreement to
do any of the foregoing) except that: (a) the Borrower may merge or consolidate
with another Person so long as the Borrower is the survivor of such
consolidation or merger and (b) the Borrower may sell, lease or otherwise
transfer all or any substantial part of its assets in the ordinary course of its
business in accordance with its Investment Practices.
Section 7.03. Amendment of Investment Practices.
The Borrower will not amend its declaration of trust or By-laws or its
Investment Practices if such amendment would have a material adverse effect on
the business or financial condition of the Borrower or impair its ability to
satisfy its obligations to pay principal of and interest on Loans made under the
Facility Documents.
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<PAGE>
Section 7.04. Use of Proceeds. The Borrower shall use the proceeds of
the Loans for such purposes, including without limitation the purchase of
securities, as are in accordance with the Investment Practices; provided,
however, that such proceeds shall not be used for the purpose, whether
immediate, incidental or ultimate, of buying or carrying margin stock" within
the meaning of Regulation U.
ARTICLE 8. FINANCIAL COVENANTS. ,
So long as the Note shall remain unpaid or the Bank shall have any
Commitment under this Agreement:
Section 8.01. Asset Coverage Test. Net Asset Coverage shall at all
times equal or exceed the aggregate principal amount of Loans outstanding.
ARTICLE 9 . EVENTS OF DEFAULT.
Section 9.01. Events of Default. Any of the following events shall
be an "Event of Default":
(a) the Borrower shall: (i) fail to pay the principal of the Note as
and when due and payable; or (ii) fail to pay interest on the Note or any fee or
other amount due hereunder as and when due and payable and such failure shall
continue for eight days;
(b) any representation or warranty made or deemed made by the Borrower
in this Agreement or in any other Facility Document or which is contained in any
certificate, document, opinion, financial or other statement furnished at any
time under or in connection with any Facility Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made and,
only with respect to any document delivered pursuant to Section 6.08(i) and
typographical errors therein, shall not have been corrected within ten days of
discovery by the Borrower of the incorrectness of such representation, warranty,
certification or statement;
(c) the Borrower shall: (i) fail to perform or observe any term,
covenant or agreement contained in Section 2.03 or Articles 7 or 8; or (ii) fail
to perform or observe any term, covenant or agreement on its part to be
performed or observed (other than the obligations specifically referred to
elsewhere in this Section 9.01) in any Facility Document and such failure shall
continue for 20 consecutive days after notice from the Bank to the Borrower of
such failure;
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<PAGE>
(d) the Borrower shall: (i) fail to pay any indebtedness in an
aggregate principal amount in excess of $5,000,000, including but not limited to
indebtedness for borrowed money (other than the payment obligations described in
(a) above), of the Borrower, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise); or (ii) fail to perform or observe any term, covenant or condition
on its part to be performed or observed under any agreement or instrument
relating to any such indebtedness, when required to be performed or observed, if
the effect of such failure to perform or observe is to accelerate, or to permit
the acceleration of, after the giving of notice or passage of time, or both, the
maturity of such indebtedness; or any such indebtedness shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof;
(e) the Borrower: (i) shall generally not, or be unable to, or shall
admit in writing its inability to, pay its debts as such debts become due; or
(ii) shall make an assignment for the benefit of creditors, petition or apply to
any tribunal for the appointment of a custodian, receiver or trustee for it or a
substantial part of its assets; or (iii) shall commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in
effect; or (iv) shall have had any such petition or application filed or any
such proceeding shall have been commenced, against it, in which an adjudication
or appointment is made or order for relief is entered, or which petition,
application or proceeding remains undismissed for a period of 60 days or more;
or shall be the subject of any proceeding under which its assets may be subject
to seizure, forfeiture or divestiture; or (v) by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or proceeding or order for relief or the appointment of a custodian,
receiver or trustee for all or any substantial part of its property; or (vi)
shall suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of 60 days or more;
(f) one or more judgments, decrees or orders for the payment of money
in excess of $5,000,000 in the aggregate shall be rendered against the Borrower
and such judgments, decrees or orders shall continue unsatisfied and in effect
for a period of 45 consecutive days without being vacated, discharged, satisfied
or stayed or bonded pending appeal;
(g) (i) 40 days shall have elapsed since an officer of the Borrower has
actual knowledge of the fact that any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Commission under the Securities Exchange Act of 1934) of 25% or
more of the outstanding shares of voting stock of the Borrower; or (ii) during
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<PAGE>
any period of 12 consecutive months, commencing before or after the date of this
Agreement, individuals who at the beginning of such 12-month period were
trustees of the Borrower, or were trustees as of November 1, 1992 of another
investment company advised by the Investment Adviser or any wholly-owned
subsidiary thereof, cease for any reason to constitute a majority of the
trustees of the Borrower;
(h) the Investment Adviser or a wholly-owned Subsidiary thereof cease
to act as the sole investment adviser to the Borrower;
(i) there shall be an "assignment" of the investment advisory agreement
between the Borrower and the Investment Adviser as defined in the Adviser Act;
(j) the Borrower shall convert to an open-end investment company;
(k) as of the last day of any calendar month, the Net Asset Value of
the Borrower shall be less than 66 2/3% of the Net Asset Value of the Borrower
as of the last day of the immediately preceding calendar month; or
(l) the issuance by the Commission of a stop order suspending the
effectiveness of the Registration Statement or the institution by the Commission
of proceedings for that purpose.
Section 9.02. Remedies. If any Event of Default shall occur and be
continuing, the Bank may, by notice to the Borrower, (a) declare the Commitment
to be terminated, whereupon the same shall forthwith terminate, and (b) declare
the outstanding principal of the Note, all interest thereon and all other
amounts payable under this Agreement and the Note to be forthwith due and
payable, whereupon the Note, all such interest and all such amounts shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided that, in the case of an Event of Default referred to in
Section 9.01(e) above, the Commitment shall be immediately terminated, and the
Note, all interest thereon and all other amounts payable under this Agreement
shall be immediately due and payable without notice, presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE 10. MISSCELLANEOUS.
Section 10.01. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in
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<PAGE>
writing signed by the Borrower and the Bank, and any provision of this Agreement
may be waived by the Borrower and the Bank. No failure on the part of the Bank
or the Borrower to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof or preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 10.02. Usury. Anything herein to the contrary notwithstanding,
the obligations of the Borrower under this Agreement and the Note shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
the Bank limiting rates of interest which may be charged or collected by the
Bank.
Section 10.03. Expenses. The Borrower shall reimburse the Bank on
demand for all fees and charges of external legal counsel for the Bank incurred
in connection with the preparation of this Agreement or the Note; provided,
however, that the such legal fees and charges shall not exceed S7, 500 in the
aggregate. The Borrower shall reimburse the Bank on demand for all costs,
expenses and charges (including, without limitation, fees and charges of
external legal counsel for the Bank and costs allocated by its internal legal
counsel) incurred in connection with the enforcement of this Agreement and the
Note. The Borrower agrees to indemnify the Bank and its directors, officers,
employees and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them arising
out of or by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings)
relating to any actual or proposed use by the Borrower of the proceeds of the
Loans, including without limitation, the reasonable fees and disbursements of
counsel reasonably incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).
Section 10.04. Survival. The obligations of the Borrower under
Sections 3.01, 3.04 and 10.03 shall survive the repayment of the Loans and the
termination of the Commitment.
Section 10.05. Assignment: Participations. (a) This Agreement shall
be binding upon, and shall inure to the benefit of, the Borrower, the Bank and
their respective successors and assigns, except that the Borrower may not
assign or transfer its rights or obligations hereunder. Subject to Sections
10.05(b) and (c) hereof, the Bank may not assign or transfer its rights under
this Agreement and the Note without the prior written consent of the Borrower;
provided, however, that the Bank may, without such
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<PAGE>
consent or notice, sell participations in, all or any part of any Loan to
another bank or other entity, in which event in the case of a participation, the
participant shall have no rights under the Facility Documents and all amounts
payable by the Borrower under Article 3 shall be determined as if the Bank had
not sold such participation. The agreement executed by the Bank in favor of the
participant shall not give the participant the right to require the Bank to take
or omit to take any action hereunder except action directly relating to (i) the
extension of a payment date with respect to any portion of the principal of or
interest on any amount outstanding hereunder allocated to such participant, (ii)
the reduction of the principal amount outstanding hereunder or (iii) the
reduction of the rate of interest payable on such amount or any amount of fees
payable hereunder to a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with the Bank. The Bank
may furnish any information concerning the Borrower in the possession of the
Bank from time to time to assignees and participants (including prospective
assignees and participants); provided that the Bank shall require any such
prospective assignee or such participant (prospective or otherwise) to agree in
writing to maintain the confidentiality of such information. With respect to
participations and assignments of rights of the Bank permitted under this
paragraph (a), the Bank shall remain solely responsible for the performance of
its obligations under this Agreement and the Borrower shall continue to deal
solely and directly with the Bank in connection with the Bank's rights and
obligations under the Agreement.
(b) In addition to the assignments and participations permitted under
paragraph (a) and (c) hereof, the Bank may assign and pledge all or any portion
of its Loans and Note to any affiliate of the Bank with prior notice to the
Borrower, provided that the Bank shall remain solely responsible for the
performance of its obligations under this Agreement and the Borrower shall
continue to deal solely and directly with the Bank in connection with the Bank's
rights (other than the right to receive payments) and obligations under this
Agreement. No such assignment shall release the Bank from its obligations
hereunder.
(c) In addition to the assignments and participations permitted under
paragraphs (a) and (b) above, the Bank may assign and pledge all or any portion
of its Loans and Note to any Federal Reserve Bank without notice to the Borrower
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that the Bank shall remain solely responsible for the performance
of it obligations under this Agreement and the Borrower shall continue to deal
solely and directly with the Bank in connection with the Bank's obligations
under this Agreement. No such assignment shall release the Bank from its
obligations hereunder.
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<PAGE>
Section 10.06. Notices. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be given to the Bank and to
the Borrower by ordinary mail or facsimile transmission addressed to such party
at its address on the signature page of this Agreement. Notices shall be
effective upon receipt.
Section 10.07. Setoff. The Borrower agrees that, in addition to (and
without limitation of) any right of setoff, banker's lien or counterclaim the
Bank may otherwise have, the Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Borrower at any of the Bank's offices, in Dollars or in
any other currency, against any amount payable by the Borrower under this
Agreement or the Note which is not paid when due (regardless of whether such
balances are then due to the Borrower), in which case it shall promptly notify
the Borrower thereof; provided that the Bank's failure to give such notice shall
not affect the validity thereof.
SECTION 10.08. JURISDICTION. IMMUNITIES. (a) THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES
FEDERAL COURT SITTING IN NEW YORK COUNTY OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTE, AND THE BORROWER HEREBY
IRREVOCABLY AGREES THAT THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING
MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR FEDERAL COURT. THE
BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE BORROWER AT
ITS ADDRESS SPECIFIED IN SECTION 10.06. THE BORROWER AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BB CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. THE BORROWER FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH
STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF
FORUM NON CONVENIENS. THE BORROWER WAIVES ANY RIGHT IT MAY HAVE TO JURY TRIAL.
(b) Nothing in this Section 10.08 shall affect the right of the Bank to
serve legal process in any other manner permitted by law or affect the right of
the Bank to bring any action or proceeding against the Borrower or its property
in the courts of any other jurisdictions.
(c) To the extent that the Borrower has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether from
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to itself or its property, the Borrower
hereby
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<PAGE>
irrevocably waives such immunity in respect of its obligations under this
Agreement and the Note.
Section 10.09. Table of Contents: Headings. Any table of contents
and the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 10.10. Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 10.11. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 10.12. Integration. The Facility Documents set forth the entire
agreement between the parties hereto relating to the transactions contemplated
thereby and supersede any prior oral or written statements or agreements with
respect to such transactions.
SECTION 10.13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY.
AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OP NEW
YORK.
Section 10.14. Confidentiality. The Bank agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrower pursuant to this Agreement which is identified by the Borrower as being
confidential at the time the same is delivered to the Bank, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for the Bank, (iii) to bank examiners, auditor or accountants, (iv) in
connection with any litigation to which the bank is a party or (v) to any
assignee or participant (or prospective assignee or participant); provided,
however, that to the extent reasonably practicable, the Bank will provide prior
notice of such disclosure to the Borrower.
Section 10.15. Treatment of Certain Information. The Borrower (a)
acknowledges that services may be offered or provided to it (in connection
with this Agreement or otherwise) by the Bank
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<PAGE>
or by one or more of their respective subsidiaries or affiliates and (b)
acknowledges that any information delivered to the Bank or to its subsidiaries
or affiliates regarding the Borrower may be shared among the Bank and each such
subsidiary and affiliate to the extent necessary for the performance of the
Bank's obligations to the Borrower hereunder.
Section 10.16. Limitation of Shareholder Liability Etc. A copy of the
Declaration of Trust of the Borrower is on file with the Secretary of State of
the Commonwealth of Massachusetts. The Bank acknowledges that the obligations of
or arising out of the Facility Documents are not binding upon any of the
Borrower's trustees, officers or shareholders individually, but are binding only
upon the assets and property of the Borrower.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MFS MULTIMARKET INCOME TRUST
By:
Name: Mr. James T. Swanson
Title: Vice President
Address for Notices:
Mr. W. Thomas London
Senior Vice President
Massachusetts Financial Services Company
500 Boylston Street, 22nd Floor
Boston, MA 02116
Tel. No.: (617) 954-5251
Fax No.: (617) 954-6614
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<PAGE>
cc: Mr. James O. Yost
Vice President
Massachusetts Financial Services Company
500 Boylston Street, 22nd Floor
Boston, MA 02116
Tel. No.: (617) 954-5275
Fax No.: (617) 954-6614
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By:
Name: Patricia Gardner
Title: Vice President
Lending Office and Address for Notices:
The Chase Manhattan Bank, N.A.
New York Agency
4 Chase MetroTech Center, 13th F1.
Brooklyn, New York 11245
Tel. No.: 718-242-7945
Fax. No.: 718-242-6909
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<PAGE>
EXHIBIT A
PROMISSORY Note
$150,000,000 New York, New York
November 10, 1992
For value received, MFS MULTIMARKET INCOME TRUST, a corporation
organized under the laws of the Commonwealth of Massachusetts (the "Borrower"),
hereby promises to pay to the order of THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION) (the "Bank") at the principal office of the Bank, at 1 Chase
Manhattan Plaza, New York, New York 10081, for the account of the appropriate
Lending Office of the Bank, the principal sum of $150,000,000 or, if less, the
amount loaned by the Bank to the Borrower pursuant to the Credit Agreement
referred to below, in lawful money of the United States of America and in
immediately available funds, on the date(s) and in the manner provided in said
Credit Agreement. The Borrower also promises to pay interest on the unpaid
principal balance hereof, for the period such balance is outstanding, at said
principal office for the account of said Lending Office, in like money, at the
rates of interest as provided in the Credit Agreement referred to below, on the
date(s) and in the manner provided in said Credit Agreement.
The date and amount of each Loan made by the Bank to the Borrower under
the Credit Agreement referred below, maturity date and each payment of principal
thereof, shall be recorded by the Bank on its books and, prior to any transfer
of this Note (or, at the discretion of the Bank, at any other time), endorsed by
the Bank on the schedule attached hereto or any continuation thereof.
This is the Note referred to in that certain Credit Agreement (as
amended from time to time the "Credit Agreement") dated as of November 10, 1992
between the Borrower and the Bank and evidences the Loans made or remade by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
<PAGE>
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York.
MFS MULTIMARKET INCOME TRUST
By:____________________________
Name:
Title:
<PAGE>
Amount Interest Rate Amount of Balance Notation
Date of Loan or Type Payment Outstanding By
<PAGE>
EXHIBIT B
MFS
MASSACHUSETTS FINANCIAL SERVICES COMPANY
500 Boylston Street, Boston, Massachusetts 02116
(617) 954-5000
LINDA J. HOARD
Vice President and Assistant General Counsel
November 10, 1992
The Chase Manhattan Bank, N A.
1 Chase Manhattan Plaza
New York, New York 10081
Re: MFS Multimarket Income Trust
Gentlemen:
I have acted as counsel for MFS Multimarket Income Trust, a
Massachusetts business trust (the "Borrower") in connection with the execution
and delivery of the Credit Agreement (the "Credit Agreement") dated as of
November 10, 1092 between the Borrower and The Chase Manhattan Bank, N.A. (the
"Bank"). Except as otherwise defined herein, all terms used herein and defined
in the Credit Agreement have the meanings assigned to them therein.
This opinion is furnished to you pursuant to Section 4.01(e) of the
Credit Agreement in connection with your financing of the Borrower pursuant to
the Facility Documents of even date herewith providing for loans by the Bank to
the Borrower in the aggregate principal amount of $150,000,000. In connection
with the preparation of this opinion, I have examined the Borrower's Declaration
of Trust and By-Laws, the Facility Documents and the most recent Registration
Statement. In addition, I have reviewed such resolutions of the Borrower's Board
of Trustees records, certificates, documents ant instruments as I have deemed
appropriate for the purpose of this opinion.
<PAGE>
The Chase Manhattan Bank, N.A.
November 10, 1992
Page 2
For purposes of this. opinion, I am assuming that the Bank has all
requisite power and authority and has taken all necessary corporate and other
actions to enter into the Facility Documents and to effect the transactions
contemplated thereby. I have assurred the genuineness of all signatures, the
conformity to the originals of all documents that I have reviewed as copies, the
authenticity and completeness of all original document that I have reviewed in
original or copy form and the legal competence of each individual executing any
document.
I understand that all of the foregoing assumptions and limitations are
acceptable to you.
Each opinion set forth below relating to the enforceability of any
agreement or instrument against the Borrower is subject to the following general
qualifications:
(i) as to any agreement to which the Borrower is a party, I
assume that such agreement is the binding obligation of each
other party thereto;
(ii) the enforceability of any obligation of the Borrower may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium, marshaling or other laws and rules
or law affecting the enforcement generally of creditors' rights
and remedies (including such as may deny giving effect to
waivers of debtor's or guarantors' rights' ");
(iii) no opinion is given herein as to the availability of any
specific equitable relief of any kind; and
(iv) the enforcement of any of your rights may in all case be
subject to an implied duty of good faith and to general
principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity).
Subject to the limitations I set forth below, I have made such
examination of law as I have deemed necessary for the purposes of this opinion.
This opinion is limited solely to the laws of The Commonwealth of Massachusetts
as applied by courts located in Massachusetts, and the Federal laws of the
United States of America, to the extent that same may apply to or govern such
transactions. I express no opinion herein concerning the laws of any other
jurisdiction. In this regard, I note that the Facility Documents contain
provisions to the effect that the laws of jurisdictions other than those recited
in the second sentence of this paragraph are intended to be governing. For
purposes of my opinions herein, I have, with your permission, assumed with no
independent investigation that the laws of all jurisdictions which may govern
the Facility documents, other than those specifically recited above, are
identical in all relevant respects to the substantive laws of The Commonwealth
of Massachusetts, without regard to conflict of law principles. Except as
specifically set forth above, no opinion is given herein as to the choice of law
or internal substantive rules of law which any tribunal may apply to the
transactions referred to herein.
<PAGE>
The Chase Manhattan Bank, N.A.
November 10, 1992
Page 3
Based on the foregoing, I am of the opinion that:
1.The Borrower is a business trust duly organized and validly
existing and in good standing under the laws of The Commonwealth
of Massachusetts, and has all trust powers and all material
governmental licensees, authorizations, consents and approvals
required to carry on its business as now conducted.
2.The execution, delivery and performance (including without
limitation the incurrence of indebtness by the Borrower as
contemplated by the Facility Documents) by the Borrower of the
Facility Documents are within the Borrower's trust powers and
have been duly authorized by all necessary trust action and do
not and will not: (a) require any consent or approval of its
shareholders; (b) contravene its declaration of trust or By-Laws
or any of its Investment Practices; (c) violate any provision
of, or require any filing (other than routine filings where the
failure to make such filing would not have a material adverse
effect on the financial condition, operations, properties. or
business of the Borrower or the ability of the Borrower to
perform its obligations to pay principal and interest on loans
made under the Facility Documents), registration, consent or
approval under any law, rule or regulation (including, without
limitation, the 1940 Act) presently in effect and having
applicability to the Borrower, or any order, writ, judgment,
injunction, decree, determination or award presently in effect
and having applicability to the Borrower; (d) result in a breach
of or constitute a default or require any consent under an
indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which
it or its properties may be bound or affected; (e) result in, or
require, the creation or imposition of any Lien (other than any
Lien which may be created pursuant to the terms of Section 10.07
of the Credit Agreement), upon or with respect to any of the
properties now owned or hereafter acquired by the Borrower; or
(f) cause the Borrower to be in default under any such law,
rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease
or instrument.
3.Each Facility Document is, or when delivered under the Credit
agreement will be, a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with
its terms.
4.The Borrower has been duly registered under the 1940 Act.
<PAGE>
The Chase Manhattan Bank, N.A.
November 10, 1992
Page 4
5.The Registration Statement relating to the offer and sale of
the shares of beneficial interest in the Borrower has. been
filed under the Securities Act of 1933, as amended, and remains
in effect and to my knowledge no stop order suspending the
effectiveness of the Registration Statement is in effect and no
proceedings for such purpose are pending before, or threatened
by the Commission.
6.The Investment Adviser is duly registered a. an investment
adviser under the Advisers Act.
7.To the beet of my knowledge (after due inquiry), there are no
pending or threatened actions, suits or proceedings against or
affecting the Borrower or Investment Adviser before any court,
governmental agency or arbitrator, which may, in any one case or
in the aggregate, materially adversely affect the financial
conditions operations, properties or business of the Borrower or
the ability of the Borrower to perform its obligations under the
Facility Documents.
Very truly yours,
LINDA J. HOARD
Linda J. Hoard
JLH/aes
<PAGE>
Exhibit C
Form of Borrower's Asset Coverage Statement
under Section 6.08(c)
[Form is Attached]
<PAGE>
Asset Coverage Report
As of: Total loan commitment outstanding (A):
US Government & Eligible US Government Agency Securities:
Indicated as * from attached portfolio report
Fair market value (B)
Non-US OECD Government Securities (Rated AA - or Aa3 or better): Indicated as **
from attached portfolio report Fair market value (C)
Net asset coverage test (must be equal to or greater than 100% to pass coverage
test)
((B) x 0.6667) + ((C) x 0.5) x 100 =
(A)
Certified by:
Treasurer or
Assistant Treasurer
Notes:
Securities noted above are required to be included in this report and
appropriately marked in the attached Portfolio Report only to the extent
necessary to satisfy the Net Asset Coverage test.
Any security identified above subject to a written option shall be reported at
the lower of the security's Fair Market Value or the strike price of the written
option.
<PAGE>
EXHIBIT D
The assets of the Borrower below are valued as follows:
Bonds and other fixed income securities (other than short-term obligations, but
including listed issues), are valued on the basis of valuations furnished by
dealers or by a pricing service which utilizes both dealer-supplied valuations
and electronic data processing techniques which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other market data, without exclusive reliance upon exchange or
over-the-counter prices, since such valuations are believed by Massachusetts
Financial Services Company ("Investment Adviser"), the Borrower's Investment
Adviser, to reflect the fair value of such securities. Forward Contracts will be
valued on the basis of valuations provided by a pricing service. Use of pricing
services has been approved by the Borrower's Board of Trustees. The Borrower's
Board of Trustees has determined that short-term obligations are to be valued at
amortized cost unless this method no longer produces fair valuations. Short-term
obligations with a remaining maturity in excess of 60 days will be valued upon
dealer supplied valuations. All other securities and commodities in the
Borrower's portfolio (other than short-term obligations) for which the principal
market is one or more securities or commodities exchanges (whether domestic or
foreign) will be valued at the last reported sale price or at the settlement
price prior to the determination (or if there has been no current sale, at the
closing bid price) on the primary exchange on which such securities or
commodities are traded; but if a securities exchange is not the principal market
for securities, such securities will, if market quotations are readily
available, be valued at current bid prices, unless such securities are reported
on the NASDAQ system, in which case they are valued at the last sale price or,
if no sales occurred during the day, at the last quoted bid price. Positions in
futures contracts, options and options on futures contracts will normally be
valued at the settlement price on the exchange on which they are primarily
traded. Over-the-counter options are valued by brokers, which may be the brokers
with whom the transactions were entered into, and/or through the use of a
pricing model which takes into account closing bond valuations, implied
volatility and short-term repurchase rates. If acquired, preferred stocks,
common stocks and warrants will be valued at the last sale price on an exchange
or at the last quoted bid price for unlisted securities. Portfolio securities
for which there are no such valuations are valued at fair value as determined in
good faith by or at the direction of the Borrower's Board of Trustees.
<PAGE>
SCHEDULE I
Credit Arrangements
None.
<PAGE>
EXHIBIT NO. 99(p)
MFS MULTIMARKET INCOME TRUST
MFS Multimarket Income Trust
200 Berkeley Street
Boston, MA 02116
Gentlemen:
In connection with my purchase of ___________________________ Shares of
Beneficial Interest (without par value) of MFS Multimarket Income Trust, I
hereby represent and warrant to you that I am purchasing said shares as an
investment with no intention of redeeming or reselling said shares until a date
at least two years hereafter.
Very truly yours,
____________________________
