Exhibit (d)(2)
COST REIMBURSEMENT AGREEMENT
This Agreement ("Agreement") is made and entered into effective as of the 4th
day of October 2007 by and between Massachusetts Financial Services Company
("MFS"), a Delaware corporation, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000, and Bulldog Investors General Partnership,
a New York general partnership, having a place of business at Park 00 Xxxx,
Xxxxx Xxx, Xxxxx 000, Xxxxxx Xxxxx, XX 00000, and its officers, directors,
partners, employees, and "affiliated persons" (as that term is defined in the
Investment Company Act of 1940) (collectively "Bulldog").
WHEREAS, MFS is a registered investment adviser that acts as adviser
to MFS Government Markets Income Trust ("MGF," or the "Trust");
WHEREAS, on March 7, 2007, Bulldog submitted a precatory shareholder
proposal for inclusion in the proxy statement of the Trust relating to the
Trust's 2007 annual meeting of shareholders, requesting that the Trust's Board
of Trustees "promptly take the steps necessary to open end the Trust or
otherwise enable shareholders to realize net asset value ('NAV') for their
shares," as subsequently revised on May 12, 2007 (the "Bulldog Proposal");
WHEREAS, the Bulldog Proposal was included in the Trust's definitive
proxy statement filed with the SEC on September 14, 2007 ("Proxy Statement"), as
amended from time to time;
WHEREAS, the Proxy Statement also included as Item 1 a proposal to
elect Xxxxxx X. Xxxxxxx, Xxxxxxxx X. Xxxx, M.D., Xxxxxxxx X. Xxxxxx, and Xxxxxx
X. Xxxxxxx (the "Incumbent Trustees") as Trustees of the Trust and as Item 2 a
"proposal to amend the Trust's fundamental investment policy concerning
borrowing" to permit the Trust to use leverage (the "Leverage Proposal");
WHEREAS, on September 12, 2007, Bulldog filed a preliminary proxy
statement with the SEC ("Bulldog Proxy Statement") and included as Proposal 1 a
proposal to elect each of Xxxxxx Xxxxx, Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx,
and Xxxxxx Xxx (the "Bulldog Nominees") as a Trustee of the Trust;
WHEREAS, on September 12 and 28, 2007, Bulldog made SEC filings
relating to a tender offer for 5,000,000 common shares of the Trust at 96.25%
of NAV on November 9, 2007, subject to certain conditions including the absence
of a competing tender offer (the "Bulldog Offer");
WHEREAS, on October 3, 2007, the parties hereto entered into an
agreement whereby MFS agreed to recommend that the Trustees of the Trust
approve a tender offer by the Trust for 37.5% of the Trust's outstanding common
stock at a price equal to 99% of NAV to expire on November 14,2007, and Bulldog
agreed to certain obligations upon the announcement by the Trust of its
intention to commence such tender offer (the "MGF Tender and Standstill
Agreement");
WHEREAS, Bulldog has incurred certain costs in connection with the
Bulldog Proposal, Bulldog Offer, and Bulldog Proxy Statement, and the parties
wish to reach an understanding concerning those costs;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, and other good and valuable consideration, the
parties agree as follows:
MFS REIMBURSEMENT OBLIGATION. Upon Bulldog's performance of its
obligations under Paragraph 2(a) through 2(c) of the MGF Tender and Standstill
Agreement, MFS shall reimburse Bulldog for 50% of its actual expenses incurred
and paid in connection with the Bulldog Proposal, Bulldog Offer, and Bulldog
Proxy Statement, up to a maximum of $60,000, upon presentation of supporting
invoices or other documentation evidencing such expenses.
BULLDOG INVESTORS MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: /s/ Xxxxxxx Xxxxxxxxx By: /s/ Xxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx Name: Xxxx Xxxxxxxx
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Title: Principal Title: General Counsel
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