-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TuPVfGOMAKySSRkOSNEMNSa33J++sRwX1CKehQNjPYsaaXDYkNsUZvpqejjuwfs4 K5OSYhqNTYGk7NYU8IJzRw== 0000912938-98-000019.txt : 19980128 0000912938-98-000019.hdr.sgml : 19980128 ACCESSION NUMBER: 0000912938-98-000019 CONFORMED SUBMISSION TYPE: POS AMI PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19980126 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MFS GOVERNMENT MARKETS INCOME TRUST CENTRAL INDEX KEY: 0000811922 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 046565627 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: POS AMI SEC ACT: SEC FILE NUMBER: 811-05078 FILM NUMBER: 98512997 BUSINESS ADDRESS: STREET 1: 500 BOYLSTON ST STREET 2: 15TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6179545214 MAIL ADDRESS: STREET 1: 500 BOYLSTON STREET STREET 2: 15TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 POS AMI 1 EXHIBIT FILING FOR N-2 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 1998 1940 ACT FILE NO. 811-5078 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 GOVERNMENT MARKETS 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 Government Markets Income Trust c/o Massachusetts Financial Services Company 500 Boylston Street Boston, Massachusetts 02116 (Name and Address of Agent for Service) PART C OTHER INFORMATION Item 24. Financial Statements and Exhibits: 1. Exhibits: (a)(1) -- Declaration of Trust, dated March 27, 1987; filed herewith. (b)(1) -- Amended and Restated By-Laws dated December 14, 1994 (previously filed as Exhibit (b)(2) to Amendment No. 10 to the Registrant's Registration Statement on Form N-2 on March 30, 1995 ("Amendment No. 10)); 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 4 of the Registrant's Annual Report to its Shareholders, for its fiscal year ended November 30, 1997; incorporated herein by reference. (f) -- Inapplicable. (g)(1) -- Investment Advisory Agreement, dated May 5, 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. (i) -- Retirement Plan for Non-Interested Person Trustees, dated January 1, 1991; filed herewith. (j)(1) -- Custodian Agreement between the Registrant and State Street Bank and Trust Company, dated May 20, 1987; filed herewith. - 2 - (j)(2) -- Amendment to Custodian Agreement dated May 20, 1987; filed herewith. (j)(3) -- Amendment to Custodian Agreement dated October 9, 1991; filed herewith. (j)(4) -- Amendment to Custodian Agreement dated February 29, 1988; filed herewith. (j)(5) -- Amendment to the Custodian contract, dated October 1, 1989; filed herewith. (k)(1) -- Registrar, Transfer Agency and Service Agreement between Registrant and MFS Service Center, Inc., dated August 15, 1994 (previously filed as Exhibit (e)(2) to Amendment No. 10); incorporated herein by reference. (k)(2) -- Loan Agreement by and among the Banks named therein, the MFS Funds named therein, and The First National Bank of Boston, dated as of February 21, 1995, previously filed as Exhibit (k)(3) to Amendment No. 10; incorporated herein by reference. (l) -- Omitted pursuant to General Instruction G.3 to Form N-2. (m) -- None. (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. - 3 - 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 26th day of January 1998. MFS GOVERNMENT MARKETS 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 PETER G. HARWOOD* Trustee Peter G. Harwood J. ATWOOD IVES* Trustee J. Atwood Ives LAWRENCE T. PERERA, ESQ.* Trustee Lawrence T. Perera, Esq. WILLIAM J. POORVU* Trustee William J. Poorvu CHARLES W. SCHMIDT* Trustee Charles W. Schmidt ARNOLD D. SCOTT* Trustee Arnold D. Scott JEFFREY L. SHAMES* Trustee Jeffrey L. Shames ELAINE R. SMITH* Trustee Elaine R. Smith DAVID B. STONE* Trustee David B. Stone *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 September 21, 1994, previously filed with Amendment No. 10; incorporated herein by reference. INDEX TO EXHIBITS Exhibit No. Description of Exhibit (a)(1) Declaration of Trust, dated March 27, 1987. (d) Specimen certificate for Shares of Beneficial Interest, without par value. (g)(1) Investment Advisory Agreement, dated May 5, 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 between the Registrant and State Street Bank and Trust Company, dated May 20, 1987. (j)(2) Amendment to Custodian Agreement dated May 20, 1987. (j)(3) Amendment to Custodian Agreement dated October 9, 1991. (j)(4) Amendment to Custodian Agreement dated February 29, 1988. (j)(5) Amendment to the Custodian contract, dated October 1, 1989. (p) Form of Purchase Agreement. EX-99.A1 2 DECLARATION OF TRUST EXHIBIT NO. 99(a)(1) MFS GOVERNMENT MARKETS INCOME TRUST DECLARATION OF TRUST Dated March 27, 1987 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 ARTICLE V - Limitations of Liability of Shareholders, Trustees and Others 10 Section 5.1. No Personal Liability of Shareholders, Trustees, etc. PAGE 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 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 DECLARATION OF TRUST OF MFS GOVERNMENT MARKETS INCOME TRUST Dated March 27, 1987 DECLARATION OF TRUST made March 27, 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 Government Markets Income 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 hereof. -1- (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. -2- 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. -3- 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 of 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 -4- 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, evidence 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 of the political subdivisions, agencies or instrumentalities thereof, and by the United States Government, any foreign government, any political subdivisions thereof or any agencies or 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 -5- 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 -6- 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; ByLaws. 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 -7- 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 a short position 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 -8- undertake to furnish the Trust such management, investment advisory, statistical and research 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 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 -9- 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: -10- (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) above 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. -11- (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, -12- 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 -13- 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. -14- 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 or certificates (if issued) for such Shares and such evidence of the genuineness 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, (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 -15- 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 -16- 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 -17- 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 -18- 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 -19- 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 any substantially -20- 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. -21- 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- IN WITNESS WHEREOF, the undersigned have executed this instrument this 27th day of March, 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- COMMONWEALTH OF MASSACHUSETTS SUFFOLK, SS BOSTON, MASSACHUSETTS March 27, 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, PATRICIA C. HOWE Patricia C. Howe Notary Public My Commission Expires: 6/8/90 EX-99.D 3 SPECIMEN CERTIFICATE SHARES OF SHARES OF BENEFICIAL INTEREST BENEFICIAL INTEREST WITHOUT WITHOUT PAR VALUE PAR VALUE ORGANIZED UNDER THE LAWS OF THE COMMONWEALTH THIS CERTIFICATE IS TRANSFERABLE OF MASSACHUSETTS IN BOSTON AND IN NEW YORK CITY C U S I P 55274E 10 2 SEE REVERSE FOR CERTAIN DEFINITIONS MFS SPECIAL VALUE TRUST THIS CERTIFIES THAT IS THE OWNER OF FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL INTEREST OF MFS SPECIAL VALUE 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 SPECIAL VALUE TRUST COUNTERSIGNED AND REGISTERED: BY: STATE STREET BANK AND TRUST COMPANY (BOSTON) TRANSFER AGENT AND REGISTRAR BY: W. THOMAS LONDON A. KEITH BRODKIN W. Thomas London A. Keith Brodkin AUTHORIZED SIGNATURE TREASURER PRESIDENT EX-99.G1 4 INVESTMENT ADVISORY AGREEMENT EXHIBIT NO. 99(g)(1) INVESTMENT ADVISORY AGREEMENT INVESTMENT ADVISORY AGREEMENT, dated this 5th day of May, 1987, by and between MFS GOVERNMENT MARKETS 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 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 Trust with such investment advice and supervision as the latter may from time to time consider necessary for the proper supervision of its Trusts. The Adviser shall act as Adviser to the Trust 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 Trust shall be held uninvested, subject always to the restrictions of its Declaration of Trust, dated March 27, 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 Trust'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 Trust'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 Trust, all actions which it deems necessary to implement the investment policies determined as provided above, and in particular to place all orders for the purchase or sale of portfolio securities for the Trust's account with brokers or dealers selected by it, and to that end the Adviser is authorized as the agent of the Trust to give instructions to the Custodian of the Trust as to deliveries of securities and payments of cash for the account of the Trust. In connection with the selection of such brokers or dealers and the placing of such orders, the Adviser is directed to seek for the Trust 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- 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 Trust and maintaining its organization, and investment advisory facilities and executive and supervisory personnel for managing the investments, effecting the portfolio transactions of the Trust. The Adviser shall arrange, if desired by the Trust, for directors, officers and employees of the Adviser to serve as Trustees, officers or agents of the Trust if duly elected or appointed to such positions and subject to their individual consent and to any limitations imposed by law. It is understood that the Trust 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 Trust; fees and expenses of independent auditors, of legal counsel and of any transfer agent, registrar or dividend disbursing agent of the Trust; expenses of 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 Trust, including safekeeping of Trusts and securities and maintaining required books and accounts; expenses of calculating the net asset value of shares of the Trust; 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 Trust 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 Trust an investment advisory fee computed and paid monthly in an amount equal to the sum of .32% of the Trust's average daily net assets plus 5.33% of the Trust'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 Trust'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 Trust or the Trust principal underwriter, if any, as principals in making purchases or sales of securities or other property for the account of the Trust, except as permitted by the Investment Company Act of 1940 and the Rules, Regulations or orders thereunder, will not take a long or short position in the shares of the Trust 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 Trust relative to the Adviser and its directors and officers. -2- 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 Trust, 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 Trust 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 Trust clients to use the initials "MFS" in their names. The Trust agrees that if the Adviser shall for any reason no longer serve as Adviser to the Trust, the Trust will change its name so as to delete the initials "MFS". It is understood that Trustees, officers and shareholders of the Trust are or may be or become interested in the Adviser, as directors, officers, employees, or otherwise and that directors, officers and employees, or otherwise and that directors, officers and employees of the Adviser are or may become similarly interested in the Trust, and that the Adviser may be or become interested in the Trust as a shareholder or otherwise. 7. Duration, Termination and Amendments of this Agreement. This Agreement shall become effective as of the day and year first above written and shall govern the relations between the parties hereto thereafter, and shall remain in force until December 31, 1988 on which date it will terminate unless its continuance after December 1, 1988 is "specifically approved at least annually" (i) by the vote of a majority of the Trustees of the Trust who are not "interested persons" of the Trust or of the Adviser at a meeting specifically called for the purpose of voting on such approval, and (ii) by the Board of Trustees of the Trust, or by "vote of a majority of the outstanding voting securities" of the Trust. 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 Trust, or by the Adviser, in each case on not more than sixty days' nor less than thirty days' written notice to the other party. This Agreement shall automatically terminate in the event of its "assignment". This Agreement may be amended only if such amendment is approved by "vote of a majority of the outstanding voting securities" of the Trust. 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- 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 Trust 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 Trust, individually, but bind only the trust estate. MFS GOVERNMENT MARKETS INCOME TRUST By: RICHARD B. BAILEY Richard B. Bailey, Chairman and Trustee MASSACHUSETTS FINANCIAL SERVICES COMPANY By: A. KEITH BRODKIN A. Keith Brodkin Senior Executive Vice President -4- EX-99.G2 5 ADMINISTRATIVE SERVICES AGREEMENT 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 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 such additional services, with compensation for such additional services to be agreed upon with respect to each such occasion as it arises. -2- 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 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. -3- 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. -4- 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- 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- 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- 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- 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- 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 -10- 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. -11- 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; -12- 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. -13- 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; -14- 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. -15- 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. -16- 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 -17- 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. -18- EX-99.I 6 RETIREMENT PLAN EXHIBIT NO. 99(i) MFS GOVERNMENT MARKETS INCOME TRUST RETIREMENT PLAN FOR NON-INTERESTED PERSON TRUSTEES MFS Government Markets 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"). 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 -1- 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: The later of December 31 of the Plan Year in which an Independent Trustee attains age 75 or December 31, 1992. 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 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. -2- (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 39%. (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. (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, -3- 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 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 -4- 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 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. -5- (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"). EX-99.J1 7 CUSTODIAN AGREEMENT EXHIBIT NO. 99(j)(1) CUSTODIAN CONTRACT Between MFS GOVERNMENT MARKETS INCOME TRUST and STATE STREET BANK AND TRUST COMPANY 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 6 2.4. Bank Accounts 6 2.5. Investment and Availability of Federal Funds 7 2.6. Collection of Income 8 2.7. Payment of Trust Monies 8 2.8. Liability for Payment in Advance of Receipt of Securities Purchased 10 2.9. Appointment of Agents 11 2.10 Deposit of Trust Assets in Securities System 11 2.11. Segregated Account 13 2.12. Ownership Certificates for Tax Purposes 15 2.13. Proxies 15 2.14. Communications Relating to Trust Portfolio Securities 15 2.15. Proper Instructions 16 2.16 Actions Permitted Without Express Authority 16 2.17 Evidence of Authority 17 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF NET ASSET VALUE AND NET INCOME 17 4. RECORDS 18 5. OPINION OF TRUST'S INDEPENDENT ACCOUNTANT 19 6. REPORTS TO TRUST BY INDEPENDENT PUBLIC ACCOUNTANTS 19 7. COMPENSATION OF CUSTODIAN 19 Page 8. RESPONSIBILITY OF CUSTODIAN 20 9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT 21 10. SUCCESSOR CUSTODIAN 22 11. INTERPRETIVE AND ADDITIONAL PROVISIONS 24 12. MASSACHUSETTS LAW TO APPLY 24 13. PRIOR CONTRACTS 24 CUSTODIAN CONTRACT This Contract between MFS Government Markets 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: 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 its 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 -1- 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 omissions of any sub-custodian 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; -2- 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 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 -3- 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; 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 -4- 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 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 -5- 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's investment adviser or the investment advisor of the Trust, respectively, signed by an officer of the Trust and certified by the Secretary or an Assistant Secretary, setting forth the purposes for which such delivery is to be made, declaring such purposes to be proper corporate purpose, 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 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 sub-custodian 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 -6- 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 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. 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. -7- 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 such 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. 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 -8- 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; 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 -9- 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 the account of such bank prior to the receipt of -10- written evidence that the securities subject to such repurchase agreements, 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 safe-keeping 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: 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 -11- 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 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 -12- 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. 2.11. Segregated Account. The Custodian shall upon receipt of Proper -13- 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 of the investment adviser of the Trust signed by an officer of the Trust or an investment adviser of the Trust, respectively, and certified by the Secretary or an Assistant Secretary, setting forth the purpose -14- or purposes of such segregated account and declaring such purposes to be proper corporate purposes. 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 -15- 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. 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 -16- 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 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 -17- 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 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 -18- 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 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, the reports shall so state. 7. Compensation of Custodian. The Custodian shall be entitled to reasonable compensation for its services and expenses as Custodian, -19- 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 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 -20- business day or for extraordinary or emergency purposes during any business day, the Trust on behalf of the Portfolio 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. 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 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 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, -21- 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. 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. -22- 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. 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. -23- 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 a 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. -24- 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 Trust's assets. -25- IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and behalf by its duly authorized representative and its seal to be hereunder affixed as of the 20th day of May, 1987. ATTEST MFS GOVERNMENT MARKETS INCOME TRUST DANIEL M. JAFFE By: RICHARD B. BAILEY Daniel M. Jaffe Richard B. Bailey ATTEST STATE STREET BANK AND TRUST COMPANY J. FARRELL By: ILLEGIBLE J. Farrell (Illegible) Assistant Secretary Vice President -26- EX-99.J2 8 AMENDMENT TO CUSTODIAN CONTRACT EXHIBIT NO. 99(j)(2) AMENDMENT TO CUSTODIAN CONTRACT Agreement made by and between STATE STREET BANK AND TRUST COMPANY (the "Custodian") and MFS GOVERNMENTS MARKETS INCOME TRUST (the "Fund"). WHEREAS, the Custodian and the Fund are parties to a custodian contract dated May 20, 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 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"). 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. Notwithstanding anything to the contrary in the Custodian Contract, the custodian shall not be liable to the Fund for any loss, damage, cost, expense, liability or claim arising out of or in connection with the maintenance of custody of the Fund's foreign securities and cash by Chase or by any other banking institution or securities depository employed pursuant to the terms of the Sub-Custody Contract, except that the Custodian shall be liable for any such loss, damage, cost, expense, liability or claim to the extent attributable to the failure of the Custodian to exercise reasonable care in the performance of its duties thereunder. 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 comply 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. 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 20th day of May, 1987. MFS GOVERNMENT MARKETS INCOME TRUST ATTEST: DANIEL M. JAFFE By: W. THOMAS LONDON Daniel M. Jaffe W. Thomas London (Title) (Title) STATE STREET BANK AND TRUST COMPANY ATTEST: J. FARRELL By: ILLEGIBLE J. Farrell (Illegible) Assistant Secretary Vice President EX-99.J3 9 AMENDMENT TO CUSTODIAN CONTRACT EXHIBIT NO. 99(j)(3) AMENDMENT The Custodian Contract dated May 20, 1987 between MFS Government Markets 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- Custoodian'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) . . . . . . . 15) . . . ." III. Section 2.7(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- 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- 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- 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- 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- Contract in contravention of any applicable federal or state regulations, or any provision of the Declaration of Trust, 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- 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 9th day of October, 1991. ATTEST: MFS GOVERNMENT MARKETS INCOME TRUST ILLEGIBLE By: W. T. LONDON (Illegible) W. T. London Assistant Secretary Treasurer ATTEST: STATE STREET BANK AND TRUST COMPANY JOE KINNALLY By: JOHN HENRICH Joe Kinnally John Henrich Assistant Secretary Vice President -8- EX-99.J4 10 AMENDMENT TO CUSTODIAN CONTRACT EXHIBIT NO. 99(j)(4) AMENDMENT TO CUSTODIAN CONTRACT Amendment to Custodian Contract between MFS Government Markets Income Trust, a business trust organized and existing under the laws of Massachusetts, having a principal place of business at 200 Berkeley Street, Boston, Massachusetts 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 May 20, 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 -1- Credit and to amend the Custodian Contract to provide for the establishment and maintenance thereof; 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. -2- 5. The Collateral Securities in the Letter of Credit Custody Account may be substituted or exchanged (including substitutions or exchanges which increase or 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. -3- 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 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 -4- 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. 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 February 29, 1988. ATTEST: By: D. M. JAFFE By: W. T. LONDON D. M. Jaffe W. T. London Treasurer ATTEST: STATE STREET BANK & TRUST COMPANY By: K. M. KNEELAND By: ILLEGIBLE K. M. Kneeland (illegible) Assistant Secretary Vice President -5- EX-99.J5 11 AMENDMENT TO THE CUSTODIAN CONTRACT EXHIBIT NO.99(j)(5) 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 Government Markets Income Trust (the "Trust"). WHEREAS, the Custodian and the Trust are parties to a Custodian Contract dated May 20, 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 GOVERNMENT MARKETS INCOME TRUST ILLEGIBLE By: A. KEITH BRODKIN (Illegible) A. Keith Brodkin ATTEST STATE STREET BANK AND TRUST COMPANY ILLEGIBLE By: PHYLLIS AHEARN (Illegible) Phillis Ahearn Assistant Secretary Vice President EX-99.P 12 FORM OF PURCHASE AGREEMENT EXHIBIT NO. 99(p) MFS GOVERNMENT MARKETS INCOME TRUST MFS Government Markets Income Trust 200 Berkeley Street Boston, MA 02116 Gentlemen: In connection with my purchase of ___________________________ Shares of Beneficial Interest (without par value) of MFS Government Markets 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, -----END PRIVACY-ENHANCED MESSAGE-----