VMTP Exchange Agreement DTF Tax-Free Income Inc. and Wells Fargo Municipal Capital Strategies, LLC January 8, 2016

Exhibit 99.6

Execution version

VMTP Exchange Agreement

DTF Tax-Free Income Inc.

and

Xxxxx Fargo Municipal Capital Strategies, LLC

January 8, 2016

CONTENTS

SECTION				PAGE
ARTICLE I DEFINITIONS					1
1.1		Incorporation of Certain Definitions by Reference			6
ARTICLE II EXCHANGE; CANCELLATION OF OLD VMTP SHARES; EXPENSES, ADDITIONAL FEE					6
2.1		Exchange			6
2.2		Cancellation of Old VMTP Shares			7
2.3		Fees			7
2.4		Operating Expenses			7
2.5		Additional Fee for Failure to Comply with Reporting Requirement			7
ARTICLE III CONDITIONS TO EFFECTIVE DATE					8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE FUND					9
4.1		Existence			9
4.2		Authorization; Contravention			9
4.3		Binding Effect			9
4.4		Financial Information			9
4.5		Litigation			10
4.6		Consents			10
4.7		Incorporation of Additional Representations and Warranties			10
4.8		Complete and Correct Information			10
4.9		Information Memorandum			10
4.10		1940 Act Registration			11
4.11		Effective Leverage Ratio; Asset Coverage; Overcollateralization Ratio			11
4.12		Investment Policies			11
4.13		Credit Quality			11
4.14		Due Diligence			11
4.15		Certain Fees			11
ARTICLE V REPRESENTATIONS AND WARRANTIES OF XXXXX FARGO					12
5.1		Existence			12
5.2		Authorization; Contravention			12
5.3		Binding Effect			12
5.4		Own Account			12
5.5		Litigation			12
5.6		Consents			13
5.7		Beneficial Ownership of Old VMTP Shares; No Liens or Encumbrances			13
5.8		Xxxxx Fargo Status			13
5.9		Experience of Xxxxx Fargo			13
5.10		Certain Fees			13
ARTICLE VI COVENANTS OF THE FUND					13
6.1		Information			13
6.2		No Amendment or Certain Other Actions Without Consent of Xxxxx Fargo			15
6.3		Maintenance of Existence			16
6.4		Tax Status of the Fund			16
6.5		Payment Obligations			16
6.6		Compliance With Law			16
6.7		Maintenance of Approvals: Filings, Etc.			16
6.8		Inspection Rights			16
6.9		Litigation, Etc.			17
6.10		1940 Act Registration			17

6.11		Eligible Assets			17
6.12		Credit Quality			17
6.13		Maintenance of Effective Leverage Ratio			17
6.14		Redemption and Paying Agent			18
6.15		Cooperation in the Sale of New VMTP Shares			18
6.16		[Reserved]			18
6.17		Securities Depository			18
6.18		Future Agreements			18
ARTICLE VII MISCELLANEOUS					19
7.1		Notices			19
7.2		No Waivers			19
7.3		Expenses and Indemnification			20
7.4		Amendments and Waivers			22
7.5		Successors and Assigns			22
7.6		Term of this Agreement			22
7.7		Governing Law			23
7.8		Waiver of Jury Trial			23
7.9		Counterparts			23
7.10		Beneficiaries			23
7.11		Entire Agreement			23
7.12		Relationship to the Articles Supplementary			23
7.13		Confidentiality			23
7.14		Severability			24
7.15		Consent Rights of the Majority Participants to Certain Actions.			24
7.16		Plan of Reorganization.			25
SCHEDULE 1					Schedule-1
EXHIBIT A: FORMS OF OPINIONS OF COUNSEL FOR XXX XXXX					X-0
XXXXXXX X-0: FORM OF CORPORATE AND 1940 ACT OPINION					X-0-0
XXXXXXX X-0: FORM OF TAX OPINION					X-0-0
XXXXXXX X-0: FORM OF LOCAL COUNSEL OPINION					A-3-1
EXHIBIT B: ELIGIBLE ASSETS					B-1
EXHIBIT C: TRANSFEREE CERTIFICATE					C-1
EXHIBIT D: INFORMATION TO BE PROVIDED BY THE FUND					D-1
ANNEX A:		ADDITIONAL REPRESENTATIONS AND WARRANTIES			Annex-1

VMTP EXCHANGE AGREEMENT, dated as of January 8, 2016, between DTF TAX-FREE INCOME INC., a closed-end management investment company organized as a Maryland corporation (the “Fund”) and XXXXX FARGO MUNICIPAL CAPITAL STRATEGIES, LLC, a wholly owned subsidiary of Xxxxx Fargo Bank, National Association, organized and existing under the laws of Delaware (the “Xxxxx Fargo”).

WHEREAS, Xxxxx Fargo desires to exchange 650 Variable Rate MuniFund Term Preferred Shares, Series 2018 of the Fund, with a liquidation preference of $100,000 per share (the “Old VMTP Shares”) for 650 newly issued Variable Rate MuniFund Term Preferred Shares, Series 2021, of the Fund, with a liquidation preference of $100,000 per share (the “New VMTP Shares”), such exchange to be conducted on the terms and subject to the conditions set forth in this Agreement (the “Exchange”), and the Fund desires to accept such Exchange;

WHEREAS, in connection with the Exchange, the Fund has authorized the (1) issuance to Xxxxx Fargo of the New VMTP Shares, as set forth on Schedule 1 hereto, (2) acceptance of the Old VMTP Shares surrendered by Xxxxx Fargo in exchange for the New VMTP Shares, and (3) cancellation of the Old VMTP Shares;

WHEREAS, in connection with the Exchange, Xxxxx Fargo has authorized the (1) transfer to the Fund of the Old VMTP Shares for cancellation by the Fund, and (2) acceptance of the New VMTP Shares in exchange for the Old VMTP Shares so transferred;

WHEREAS, as an inducement to Xxxxx Fargo to accept the New VMTP Shares in exchange for the transfer by Xxxxx Fargo to the Fund of the Old VMTP Shares, the Fund now desires to enter into this Agreement to set forth certain representations, warranties, covenants and agreements regarding the Fund and the New VMTP Shares; and

WHEREAS, as an inducement to the Fund to issue to Xxxxx Fargo the New VMTP Shares in exchange for the transfer by Xxxxx Fargo to the Fund of the Old VMTP Shares, Xxxxx Fargo desires to enter into this Agreement to set forth certain representations, warranties, covenants and agreements regarding Xxxxx Fargo and the New VMTP Shares and the Old VMTP Shares, as applicable.

NOW, THEREFORE, in consideration of the respective agreements contained herein, the parties hereto agree as follows:

ARTICLE I

1. DEFINITIONS

The following terms, as used herein, have the following meanings:

“1940 Act” means the Investment Company Act of 1940, as amended.

“Adviser” has the meaning set forth in the Articles Supplementary.

“Advisory Persons” has the meaning set forth in the Articles Supplementary.

“Agreement” means this VMTP Exchange Agreement, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms hereof.

“Articles Supplementary” means the Articles Supplementary Establishing and Fixing the Rights and Preferences of VMTP Shares, as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms thereof and hereof.

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“Asset Coverage” has the meaning set forth in the Articles Supplementary.

“Below Highly Speculative” means any obligation, the highest rating for which from any of Xxxxx’x, S&P and Fitch is:

(a) lower than B3 or its equivalent, in the case of Moody’s,

(b) lower than B- or its equivalent, in the case of S&P, and

(c) lower than B- or its equivalent, in the case of Fitch.

“Below Investment Grade” means any obligation, the highest rating for which from any of Xxxxx’x, S&P and Fitch is:

(a) lower than Baa3 or its equivalent (or unrated or with rating withdrawn), in the case of Moody’s,

(b) lower than BBB- or its equivalent (or unrated or with rating withdrawn), in the case of S&P, and

(c) lower than BBB- or its equivalent (or unrated or with rating withdrawn), in the case of Fitch.

“Beneficial Owner” has the meaning set forth in the Articles Supplementary.

“Board of Directors” has the meaning set forth in the Articles Supplementary.

“Business Day” has the meaning set forth in the Articles Supplementary.

“Bylaws” means the bylaws of the Fund as amended from time to time.

“Charter” has the meaning set forth in the Articles Supplementary.

“Closed-End Funds” has the meaning set forth in the Articles Supplementary.

“Code” has the meaning set forth in the Articles Supplementary.

“Common Stock” has the meaning set forth in the Articles Supplementary.

“Custodian” has the meaning set forth in the Articles Supplementary.

“Defeased Securities” means a security for which cash, cash equivalents or other eligible property has been pledged in an amount sufficient to make all required payments on such security to and including maturity (including any accelerated maturity pursuant to a permitted redemption), in accordance with the instrument governing the issuance of such security.

“Derivative Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, repurchase transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement, including any such obligations or liabilities under any such master agreement.

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“Dividend Payment Date” has the meaning set forth in the Articles Supplementary.

“Dividend Rate” has the meaning set forth in the Articles Supplementary.

“Due Diligence Request” means the due diligence request letter from Ashurst LLP.

“Effective Date” means the date on which the Exchange is effected, subject to the satisfaction or waiver of the conditions specified in Section 3.

“Effective Leverage Ratio” has the meaning set forth in the Articles Supplementary.

“Electronic Means” has the meaning set forth in the Articles Supplementary.

“Eligible Assets” means the instruments listed in Exhibit B to this Agreement, which may be amended from time to time with the prior consent of Xxxxx Fargo, in which the Fund may invest.

“Exchange” has the meaning set forth in the recitals to this Agreement.

“Fee Rate” means initially 0.25% per annum, which shall be subject to increase by 0.25% per annum for each Week in respect of which any Reporting Failure has occurred and is continuing.

“Fitch” means Fitch Ratings, Inc., a part of the Fitch Group, or any successor or successors thereto.

“Fitch Guidelines” means the guidelines, as may be amended from time to time, in connection with Fitch’s ratings of the New VMTP Shares.

“Force Majeure Exception” means any failure or delay in the performance of the Fund’s reporting obligation pursuant to Sections 2.5 and 6.1(o) arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes; flood; terrorism; wars and other military disturbances; sabotage; epidemics; riots; loss or malfunctions of utilities, computer (hardware or software) or communication services; accidents; acts of civil or military authority and governmental action. The Fund shall use commercially reasonable efforts to commence performance of its obligations during any of the foregoing circumstances.

“Fund” has the meaning set forth in the recitals to this Agreement.

“Holder” has the meaning set forth in the Articles Supplementary.

The word “including” means “including without limitation.”

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“Indemnified Persons” means, Xxxxx Fargo and its affiliates and directors, officers, partners, employees, agents, representatives and control persons, entitled to indemnification by the Fund under Section 7.3.

“Index Rate” has the meaning set forth in the Articles Supplementary.

“Information Memorandum” means the information memorandum of the Fund relating to the Exchange dated January 8, 2016, as may be amended, revised or supplemented from time to time.

“Investment Grade” means,

(A) any obligation (other than the New VMTP Shares), the highest rating for which from any of Xxxxx’x, S&P and Fitch is:

(a) higher than Ba1 or its equivalent, in the case of Moody’s,

(b) higher than BB+ or its equivalent, in the case of S&P, and

(c) higher than BB+ or its equivalent, in the case of Fitch and

(B) in respect of the New VMTP Shares, the rating from Moody’s or Fitch, as applicable, which is:

(a) higher than Ba1 or its equivalent, in the case of Moody’s, and

(b) higher than BB+ or its equivalent, in the case of Fitch.

“Liquidation Preference” means, with respect to a given number of New VMTP Shares, $100,000 times that number.

“Low Investment Grade” means any obligation, the highest rating for which from any of Xxxxx’x, S&P and Fitch is:

(a) lower than A2 but higher than Ba1 or its equivalent, in the case of Moody’s;

(b) lower than A but higher than BB+ or its equivalent, in the case of S&P; and

(c) lower than A but higher than BB+ or its equivalent, in the case of Fitch.

“Majority Participants” means the Holder(s) of more than 50% of the Outstanding New VMTP Shares.

“Managed Assets” means the Fund’s net assets, including assets attributable to any principal amount of any borrowings (including the issuance of commercial paper or notes) or preferred stock outstanding.

“Market Value” has the meaning set forth in the Articles Supplementary.

“Moody’s” means Xxxxx’x Investors Service, Inc., or any successor or successors thereto.

“Moody’s Guidelines” means the guidelines, as may be amended from time to time, in connection with Moody’s ratings of the New VMTP Shares.

“New VMTP Shares” has the meaning set forth in the recitals to this Agreement.

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“NRSRO” has the meaning set forth in the Articles Supplementary.

The word “or” is used in its inclusive sense.

“Old VMTP Purchase Agreement” means the Purchase Agreement dated as of August 23, 2013 between the Fund and Xxxxx Fargo with respect to the Old VMTP Shares.

“Old VMTP Shares” has the meaning set forth in the recitals to this Agreement.

“Optional Redemption Price” has the meaning set forth in the Articles Supplementary.

“Optional Redemption Premium” has the meaning set forth in the Articles Supplementary.

“Other Rating Agency” means each NRSRO, if any, other than Fitch then providing a rating for the New VMTP Shares pursuant to the request of the Fund.

“Other Rating Agency Guidelines” means the guidelines provided by each Other Rating Agency, as may be amended from time to time, in connection with the Other Rating Agency’s ratings of the New VMTP Shares.

“Outstanding” has the meaning set forth in the Articles Supplementary.

“Overcollateralization Ratio” has the meaning set forth in the Articles Supplementary.

“Overconcentration Amount” means as of any date of calculation of the Effective Leverage Ratio for the Fund, an amount equal to the sum of: (i) the Market Value of the Fund’s total assets rated Low Investment Grade in excess of 50% of the Market Value of the Fund’s total assets; (ii) the Market Value of the Fund’s total assets rated Below Investment Grade in excess of 20% of the Market Value of the Fund’s total assets; (iii) the Market Value of the Fund’s total assets that are Unrated in excess of 10% of the Market Value of the Fund’s total assets; (iv) the Market Value of the Fund’s total assets that are obligations of a single issuer and that are rated Investment Grade in excess of 12% of the Market Value of the Fund’s total assets; (v) the Market Value of the Fund’s total assets that are obligations of a single issuer and that are rated Below Investment Grade in excess of 4% of the Market Value of the Fund’s total assets; (vi) the Market Value of the Fund’s assets that constitute exempt interest obligations backed primarily by payments from tobacco companies (excluding such tobacco securities that are Defeased Securities) in excess of 10% of the Fund’s total assets; and (vii) the Market Value of the Fund’s assets that constitute obligations of issuers within any single state or territory in excess of 25% of the Fund’s total assets.

“Person” has the meaning set forth in the Articles Supplementary.

“Preferred Stock” has the meaning set forth in the Articles Supplementary.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

“Rate Period” has the meaning set forth in the Articles Supplementary.

“Rating Agency” means Fitch (if Fitch is then rating New VMTP Shares) and any Other Rating Agency.

“Rating Agency Guidelines” means Fitch Guidelines and any Other Rating Agency Guidelines as they exist from time to time.

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“Redemption and Paying Agent” means The Bank of New York Mellon, or with the prior written consent of Xxxxx Fargo (which consent shall not be unreasonably withheld), any successor Person, which has entered into an agreement with the Fund to act in such capacity as the Fund’s tender agent, transfer agent, registrar, dividend disbursing agent, paying agent and redemption price disbursing agent and calculation agent in connection with the payment of regularly scheduled dividends with respect to New VMTP Shares.

“Reference Date” has the meaning set forth in Section 6.1(o).

“Related Documents” means this Agreement, the Charter, the Articles Supplementary, the New VMTP Shares and the Bylaws.

“Reporting Failure” has the meaning set forth in Section 2.5.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, and any successor or successors thereto.

“Securities Act” means the U.S. Securities Act of 1933, as amended.

“Securities Depository” means The Depository Trust Company, New York, New York, and any substitute for or successor to such securities depository that shall maintain a book-entry system with respect to the New VMTP Shares.

“Term Redemption Date” has the meaning set forth in the Articles Supplementary.

“Unrated” means any obligation which is unrated or has had its rating withdrawn by each of Xxxxx’x, S&P and Fitch.

“Week” means a period of seven consecutive calendar days.

“Xxxxx Fargo” has the meaning set forth in the recitals to this Agreement.

“written” or “in writing” means any form of written communication, including communication by means of telex, telecopier or electronic mail.

1.1 Incorporation of Certain Definitions by Reference

Each capitalized term used herein and not otherwise defined herein shall have the meaning provided therefor (including by incorporation by reference) in the Related Documents.

ARTICLE II

2. EXCHANGE; CANCELLATION OF OLD VMTP SHARES; EXPENSES; ADDITIONAL FEE

2.1 Exchange

(a) On the Effective Date, Xxxxx Fargo, or a representative thereof duly authorized to act on its behalf, will transfer to the Fund a total of 000 Xxx XXXX Shares, in exchange for the issuance by the Fund to Xxxxx Xxxxx xx 000 Xxx XXXX Shares, with such transfer and issuance effected through the Securities Depository.

(b) Prior to 12:00 noon, New York City time, on the Effective Date, the Fund will deposit with Deutsche Bank Trust Company Americas, in its capacity as redemption and paying agent for the Old VMTP Shares, an amount of same-day funds equal to all unpaid dividends and distributions on the Old VMTP Shares accumulated from and including August 22, 2013 to (but excluding) the Effective Date (whether or not earned or declared by the Fund, but excluding interest thereon).

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(c) Xxxxx Fargo agrees that it may only make offers and sales of the New VMTP Shares in compliance with the Securities Act and applicable state securities laws only to Persons that it reasonably believes are (1)(i) QIBs that are Closed-End Funds, banks (or affiliates of banks), insurance companies or registered open-end management investment companies, in each case, pursuant to Rule 144A or another available exemption from registration under the Securities Act, in a manner not involving any public offering within the meaning of Section 4(a)(2) of the Securities Act, (ii) tender option bond trusts in which all investors are QIBs that are Closed-End Funds, banks (or affiliates of banks), insurance companies or registered open-end management investment companies or (iii) other investors with the prior written consent of the Fund and (2) unless the prior written consent of the Fund and the Majority Participants has been obtained, not Advisory Persons if such Advisory Persons would, after such sale and transfer, own more than 20% of the Outstanding New VMTP Shares. Any transfer in violation of the foregoing restrictions shall be void ab initio. In connection with any transfer of New VMTP Shares, each transferee will be required to deliver to the Fund a transferee certificate in the form set forth as Exhibit C.

2.2 Cancellation of Old VMTP Shares

Contemporaneous with the issuance of the New VMTP Shares upon consummation of the Exchange, the Fund shall, and shall cause the Securities Depository or its agent to, cancel all of the Old VMTP Shares, and the Old VMTP Purchase Agreement shall be terminated and shall no longer be in effect (other than any provisions thereof that by their express terms survive the repayment in full of all amounts owed to Xxxxx Fargo under the Old VMTP Purchase Agreement and the Old VMTP Shares).

2.3 Fees

On the Effective Date, the Fund shall pay up to $40,000 of the fees and expenses of Xxxxx Fargo’s outside counsel.

2.4 Operating Expenses

The Fund shall pay amounts due to be paid by it hereunder (including any incidental expenses but not including redemption or dividend payments on the Old VMTP Shares) as operating expenses.

2.5 Additional Fee for Failure to Comply with Reporting Requirement

If the Fund fails to comply with the reporting requirements set forth in Section 6.1(o) (except as a result of a Force Majeure Exception) and such failure is not cured within three Business Days after written notification to the Fund by Xxxxx Fargo of such failure (a “Reporting Failure”), the Fund shall pay to Xxxxx Fargo on the Dividend Payment Date occurring in the month immediately following a month in which such Reporting Failure occurs, a fee calculated in respect of each Week (or portion thereof) during such month in which such Reporting Failure continues to exist equal to the product of (a) the Fee Rate, times (b) the aggregate average daily Liquidation Preference of the New VMTP Shares held by Xxxxx Fargo during such Week or portion thereof, times (c) the quotient of the number of days in such Week or portion thereof divided by the number of calendar days in such year. Notwithstanding the foregoing, in no event shall (i) the fee payable pursuant to this Section 2.5 for any Week plus the Dividend Rate for the New VMTP Shares for such Week exceed the Index Rate plus 5.00%, (ii) the fee payable pursuant to this Section 2.5 for any Week plus the Dividend Rate for the New VMTP Shares for such Week exceed 15% or (iii) the Fund be required to calculate or pay a fee in respect of more than one Reporting Failure in any Week.

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ARTICLE III

3. CONDITIONS TO EFFECTIVE DATE

It shall be a condition to the Effective Date that each of the following conditions shall have been satisfied or waived as of such date, and upon such satisfaction or waiver, this Agreement shall be effective:

(a) this Agreement shall have been duly executed and delivered by the parties hereto;

(b) the New VMTP Shares shall have a long-term issue credit rating of AAA from Fitch on the Effective Date;

(c) receipt by Xxxxx Fargo of executed originals, or copies certified by a duly authorized officer of the Fund to be in full force and effect and not otherwise amended, of all Related Documents, as in effect on the Effective Date, and an incumbency certificate with respect to the authorized signatories thereto;

(d) receipt by Xxxxx Fargo of opinions of counsel for the Fund, substantially to the effect of Exhibit A;

(e) except as disclosed in the Information Memorandum, there shall not be any pending or threatened material litigation (unless such pending or threatened litigation has been determined by Xxxxx Fargo to be acceptable);

(f) the fees and expenses and all other amounts payable on the Effective Date pursuant to Section 2.3 hereof shall have been paid;

(g) Xxxxx Fargo, in its reasonable discretion, shall be satisfied that no change in law, rule or regulation (or their interpretation or administration), in each case, shall have occurred which will adversely affect the consummation of the transaction contemplated by this Agreement;

(h) there shall have been delivered to Xxxxx Fargo any additional documentation and financial information, including satisfactory responses to its due diligence inquiries, as it deems relevant; and

(i) there shall have been delivered to Xxxxx Fargo such information and copies of documents, approvals (if any) and records certified, where appropriate, of corporate proceedings as Xxxxx Fargo may have requested relating to the Fund’s entering into and performing this Agreement and the other Related Documents to which it is a party, and the transactions contemplated hereby and thereby.

The Fund and Xxxxx Fargo agree that consummation of the Exchange pursuant to this Agreement shall constitute acknowledgment that the foregoing conditions have been satisfied or waived.

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ARTICLE IV

4. REPRESENTATIONS AND WARRANTIES OF THE FUND

The representations and warranties set out in this Article IV are given hereunder by the Fund to Xxxxx Fargo on the Effective Date.

4.1 Existence

The Fund is validly existing and in good standing as a corporation under the laws of the State of Maryland, with full right and power to issue the New VMTP Shares in exchange for the Old VMTP Shares and to execute, deliver and perform its obligations under this Agreement and each Related Document.

4.2 Authorization; Contravention

The execution, delivery and performance by the Fund of this Agreement and each Related Document are within the Fund’s powers, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official except such as have been taken or made and will not violate or contravene, or constitute a default under, any provision of applicable law, charter, ordinance or regulation or of any material agreement, judgment, injunction, order, decree or other instrument binding upon the Fund or result in the creation or imposition of any lien or encumbrance on any asset of the Fund.

4.3 Binding Effect

This Agreement constitutes a valid and binding agreement of the Fund, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable or public policy principles of general applicability, it being understood that the enforceability of indemnification provisions may be subject to limitations imposed under applicable securities laws. The New VMTP Shares have been duly authorized and, when issued in connection with the Exchange as contemplated by this Agreement, will be validly issued by the Fund and will be fully paid and nonassessable and free of any pre-emptive or similar rights.

4.4 Financial Information

The financial statements of the Fund as of its most recent fiscal year-end, and the auditors’ report with respect thereto, copies of which have heretofore been furnished to Xxxxx Fargo, fairly present in all material respects the financial condition of the Fund, at such date and for such period, and were prepared in accordance with accounting principles generally accepted in the United States, consistently applied (except as required or permitted and disclosed). Since the most recent fiscal year-end of the Fund, there has been no material adverse change in the condition (financial or otherwise) or operations of the Fund, except as disclosed in the Information Memorandum, other than changes in the general economy or changes affecting the market for municipal securities or investment companies generally. Any financial, budget and other projections furnished to Xxxxx Fargo were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair and reasonable in light of conditions existing at the time of delivery of such financial, budget or other projections, and represented, and as of the date of this representation, represent, the Fund’s reasonable best estimate of the Fund’s future financial performance.

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4.5 Litigation

Except as disclosed in the Information Memorandum or in a schedule delivered to Xxxxx Fargo prior to the Effective Date, no action, suit, proceeding or investigation is pending or (to the best knowledge of the Fund) overtly threatened in writing against the Fund in any court or before any governmental authority (i) in any way contesting or, if decided adversely, would affect the validity of any Related Document or this Agreement; or (ii) in which a final adverse decision would materially adversely affect provisions for or materially adversely affect the sources for payment of the Liquidation Preference of or dividends on the New VMTP Shares.

4.6 Consents

All consents, licenses, approvals, validations and authorizations of, and registrations, validations or declarations by or with, any court or any governmental agency, bureau or agency required to be obtained in connection with the execution, delivery, performance, validity or enforceability of this Agreement and the other Related Documents (including the New VMTP Shares) have been obtained and are in full force and effect.

4.7 Incorporation of Additional Representations and Warranties

As of the Effective Date, the Fund hereby makes to Xxxxx Fargo the representations and warranties included in Annex A hereto, which representations and warranties are hereby incorporated by reference herein.

4.8 Complete and Correct Information

All information, reports and other papers and data with respect to the Fund furnished to Xxxxx Fargo (other than financial information and financial statements, which are covered solely by Section 4.4 of this Agreement) were, at the time the same were so furnished, complete and correct in all material respects. No fact is known to the Fund that materially and adversely affects or in the future may (so far as it can reasonably foresee) materially and adversely affect the New VMTP Shares, or the Fund’s ability to pay when due its obligations under this Agreement, any of the New VMTP Shares and the Related Documents that has not been set forth in the Information Memorandum or in the financial information and other documents referred to in Section 4.4 or this Section 4.8 or in such information, reports, papers and data or otherwise made available or disclosed in writing to Xxxxx Fargo. Taken as a whole, the documents furnished and statements made by the Fund in connection with the negotiation, preparation or execution of this Agreement and the Related Documents do not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

4.9 Information Memorandum

The Information Memorandum, true copies of which have heretofore been delivered to Xxxxx Fargo, when considered together with this Agreement and the information made available pursuant to the Due Diligence Request or disclosed in writing to Xxxxx Fargo prior to the Effective Date in connection with this Agreement, does not contain any untrue statement of a material fact and such Information Memorandum does not omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

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4.10 1940 Act Registration

The Fund is duly registered as a closed-end management investment company under the 1940 Act and such registration is in full force and effect.

4.11 Effective Leverage Ratio; Asset Coverage; Overcollateralization Ratio

As of the Effective Date, the Fund is in compliance with the Effective Leverage Ratio, the Asset Coverage and each Overcollateralization Ratio as required by Section 2.4 of the Articles Supplementary.

In connection with calculating the Effective Leverage Ratio, the Fund’s total assets and accrued liabilities reflect the positive or negative net obligations of the Fund under each Derivative Contract determined in accordance with the Fund’s valuation policies.

For purposes of calculating the Effective Leverage Ratio for purposes of the representation contained in the second preceding paragraph, any Overconcentration Amount has been subtracted from the sum determined pursuant to sub-section (ii) of the definition of Effective Leverage Ratio, set out in Section 2.4(d) of the Articles Supplementary.

4.12 Investment Policies

As of the Effective Date, all of the Fund’s portfolio investments constitute Eligible Assets, as described in Exhibit B to this Agreement.

4.13 Credit Quality

As of the Effective Date, the Fund (1) has invested at least 80% of its Managed Assets in securities that, at the time of investment, were rated Investment Grade or were unrated but judged to be of comparable quality by the Adviser; (2) has invested up to 20% of its Managed Assets in municipal securities that at the time of investment were rated Below Investment Grade or were unrated but judged to be of comparable quality by the Adviser, provided that the Fund has invested no more than 10% of its Managed Assets in municipal securities that, at the time of investment, were rated Below Highly Speculative or that were unrated but judged to be of comparable quality by the Adviser; and (3) has no investments in non-municipal securities that, at the time of investment, were rated Below Investment Grade.

4.14 Due Diligence

The Fund understands that nothing in this Agreement, the Information Memorandum, or any other materials presented to the Fund in connection with the Exchange constitutes legal, tax or investment advice from Xxxxx Fargo. The Fund has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with the Exchange.

4.15 Certain Fees

The Fund acknowledges that, other than the fees and expenses payable pursuant to this Agreement, no brokerage or finder’s fees or commissions are or will be payable by the Fund or Xxxxx Fargo to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement.

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ARTICLE V

5. REPRESENTATIONS AND WARRANTIES OF XXXXX FARGO

Xxxxx Fargo represents and warrants with respect to itself, as of the date hereof and as of the Effective Date to the Fund as follows:

5.1 Existence

Xxxxx Fargo is validly existing and in good standing as a limited liability company under the laws of the State of Delaware and Xxxxx Fargo has full right and power to effect the Exchange and to execute, deliver and perform its obligations under this Agreement and each Related Document to which it is a party.

5.2 Authorization; Contravention

The execution, delivery and performance by Xxxxx Fargo of this Agreement and each Related Document to which it is a party are within Xxxxx Fargo’s powers, have been duly authorized by all necessary action, require no action by or in respect of, or filing with, any governmental body, agency or official except such as have been taken or made and will not violate or contravene, or constitute a default under, any provision of applicable law, charter, ordinance or regulation or of any material agreement, judgment, injunction, order, decree or other instrument binding upon Xxxxx Fargo.

5.3 Binding Effect

This Agreement constitutes a valid and binding agreement of Xxxxx Fargo, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally and (ii) the availability of equitable remedies may be limited by equitable or public policy principles of general applicability, it being understood that the enforceability of indemnification provisions may be subject to limitations imposed under applicable securities laws.

5.4 Own Account

Xxxxx Fargo understands that the New VMTP Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities laws and Xxxxx Fargo is acquiring the New VMTP Shares as principal for its own account and not with a view to or for the purpose of distributing or reselling such securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such New VMTP Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such New VMTP Shares in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting Xxxxx Fargo’s right to transfer New VMTP Shares in compliance with the transfer limitations of this Agreement and in compliance with applicable federal and state securities laws).

5.5 Litigation

Except as disclosed in a schedule delivered to the Fund prior to the Effective Date, no action, suit, proceeding or investigation is pending or (to the best knowledge of Xxxxx Fargo) overtly threatened in writing against Xxxxx Fargo in any court or before any governmental authority in any way contesting or, if decided adversely, would affect the validity of this Agreement.

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5.6 Consents

All consents, licenses, approvals, validations and authorizations of, and registrations, validations or declarations by or with, any court or any governmental agency, bureau or agency required to be obtained by Xxxxx Fargo in connection with the execution, delivery, performance, validity or enforceability of this Agreement by or against Xxxxx Fargo and the Exchange have been obtained and are in full force and effect.

5.7 Beneficial Ownership of Old VMTP Shares; No Liens or Encumbrances

Xxxxx Fargo is the sole beneficial owner of the Old VMTP Shares being delivered for exchange pursuant to this Agreement and such Old VMTP Shares are being transferred to the Fund or its duly authorized representative, free and clear of any liens or encumbrances of any kind.

5.8 Xxxxx Fargo Status

At the time Xxxxx Fargo was offered an opportunity to exchange the Old VMTP Shares for the New VMTP Shares, it was, and as of the Effective Date it is an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

5.9 Experience of Xxxxx Fargo

Xxxxx Fargo has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the Exchange and prospective investment in the New VMTP Shares, and has so evaluated the merits and risks of such investment. Xxxxx Fargo is able to bear the economic risk of the Exchange and an investment in the New VMTP Shares and, at the present time, is able to afford a complete loss of such investment.

5.10 Certain Fees

Xxxxx Fargo acknowledges that, other than the fees and expenses payable pursuant to this Agreement, no brokerage or finder’s fees or commissions are or will be payable by the Fund or, to Xxxxx Fargo’s knowledge, by the Fund to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. Xxxxx Fargo is paying no fee or other consideration to any Person in connection with the solicitation of the Exchange.

ARTICLE VI

6. COVENANTS OF THE FUND

The Fund agrees that, so long as there is any amount payable hereunder or Xxxxx Fargo owns any Outstanding New VMTP Shares:

6.1 Information

Without limitation of the other provisions of this Agreement, the Fund will deliver, or direct the Redemption and Paying Agent to deliver, to Xxxxx Fargo:

(a) as promptly as practicable after the preparation and filing thereof with the Securities and Exchange Commission, each annual and semi-annual report prepared with respect to the Fund, which delivery may be made by notice of the electronic availability of any such document on a public website;

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(b) notice of any change in (including being put on Credit Watch or Watchlist), or suspension or termination of, the ratings on the New VMTP Shares by any Rating Agency (and any corresponding change in the Rating Agency Guidelines applicable to the New VMTP Shares associated with any such change in the rating from any Rating Agency) or any change of a Rating Agency rating the New VMTP Shares as promptly as practicable upon the occurrence thereof;

(c) notice of any redemption or other repurchase of any or all of the New VMTP Shares as provided in the Articles Supplementary;

(d) notice of any proposed amendments to any of the Related Documents at such time as the amendments are sent to other parties whose approval is required for such amendment and in any event not less than 10 Business Days prior to any proposed amendment and copies of all actual amendments thereto within five Business Days of being signed or, in each case, as provided in the relevant document;

(e) notice of any missed, reduced or deferred dividend payment on the New VMTP Shares that remains uncured for more than three Business Days as soon as reasonably practicable, but in no event later than one Business Day after expiration of the grace period;

(f) notice of insufficient deposit to provide for a properly noticed redemption, or liquidation as soon as reasonably practicable, but in no event later than two Business Days after discovery of insufficient deposits;

(g) notice of non-compliance with the Rating Agency Guidelines (if applicable) for more than five Business Days as soon as reasonably practicable, but in no event later than one Business Day after expiration of the foregoing grace period;

(h) notice of the distribution of net capital gains or ordinary income one Business Day in advance of the Rate Period that such net capital gains or ordinary income will or may be distributed, simultaneously with the Redemption and Paying Agent providing such notice to Beneficial Owners or their Agent Members;

(i) notice of any change to any investment adviser or sub-adviser of the Fund within two Business Days after a resignation or a notice of removal has been sent by or to any investment adviser or sub-adviser;

(j) notice of any proxy solicitation as soon as reasonably practicable, but in no event later than five Business Days after mailing thereof;

(k) notice one Business Day after the occurrence thereof of (i) the failure of the Fund to pay the amount due on any “senior securities” (as defined under the 0000 Xxx) or other debt at the time outstanding, and any period of grace or cure with respect thereto shall have expired; (ii) the failure of the Fund to pay, or admitting in writing its inability to pay, its debts generally as they become due; or (iii) the failure of the Fund to pay accumulated dividends on any additional preferred stock ranking pari passu with the New VMTP Shares, and any period of grace or cure with respect thereto shall have expired;

(l) notice of a material breach of any representation, warranty or covenant of the Fund contained in this Agreement or the Articles Supplementary, in each case, only if an officer of the Fund has actual knowledge of such breach as soon as reasonably practicable, but in no event later than five days after knowledge of senior management of the Fund or the Adviser thereof;

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(m) notice of any litigation, administrative proceeding or business development which may reasonably be expected to materially adversely affect the Fund’s business, properties or affairs or the ability of the Fund to perform its obligations as set forth hereunder or under any of the Related Documents to which it is a party as soon as reasonably practicable, but in no event later than 10 days after knowledge of any officer of the Fund or the Adviser thereof;

(n) upon request of Xxxxx Fargo, copies of all certificates that the Fund has delivered to each Rating Agency which is then rating New VMTP Shares that are set forth in the respective Rating Agency Guidelines (if applicable) regarding the Asset Coverage and each Overcollateralization Ratio and all related calculations at such times and containing such information as set forth in the respective Rating Agency Guidelines as soon as reasonably practicable after such certificates have been sent;

(o) on the third Business Day following the 15^th day and the last day of each month (each such 15^th day and last day of a month, a “Reference Date”), the information set forth in Exhibit D to this Agreement with respect to the portfolio investments of the Fund as of the Reference Date and a calculation of the Effective Leverage Ratio and the Asset Coverage of the Fund as of the close of business of each Business Day since the date of the last report issued pursuant to this Section 6.1(o) (and in each case, such information shall be accurate and complete as of the Reference Date); and upon the failure of the Fund to maintain Asset Coverage as provided in Section 2.4(a) of the Articles Supplementary, the Effective Leverage Ratio as required by Section 2.4(c) of the Articles Supplementary or any Overcollateralization Ratio as required by Section 2.4(e) of the Articles Supplementary, notice of such failure within one Business Day of the occurrence thereof; and

(p) from time to time such additional information regarding the financial position, results of operations or prospects of the Fund as Xxxxx Fargo may reasonably request including, without limitation, copies of all offering memoranda or other offering material with respect to the sale of any securities of the Fund as soon as reasonably practicable, but in no event later than 10 days after a request.

All information, reports and other papers, documentation and data with respect to the Fund furnished to Xxxxx Fargo pursuant to this Section 6.1 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Xxxxx Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

6.2 No Amendment or Certain Other Actions Without Consent of Xxxxx Fargo

To the extent that Xxxxx Fargo is the Holder of 51% of the New VMTP Shares then outstanding, without the prior written consent of Xxxxx Fargo, the Fund will not agree, consent to or permit any amendment, supplement, interpretation, modification or repeal of the Articles Supplementary or any provision therein, nor waive any provision thereof.

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6.3 Maintenance of Existence

The Fund shall continue to maintain its existence as a corporation under the laws of the State of Maryland, with full right and power to effect the Exchange, issue the New VMTP Shares and to execute, deliver and perform its obligations under this Agreement and each Related Document.

6.4 Tax Status of the Fund

The Fund will qualify as a “regulated investment company” within the meaning of Section 851(a) of the Code and the dividends made with respect to the New VMTP Shares will qualify as “exempt interest dividends” to the extent they are reported as such by the Fund and permitted by Section 852(b)(5)(A) of the Code.

6.5 Payment Obligations

The Fund shall promptly pay or cause to be paid all amounts payable by it hereunder and under the Related Documents, according to the terms hereof and thereof, shall take such actions as may be necessary to include all payments hereunder and thereunder which are subject to appropriation in its budget and make full appropriations related thereto, and shall duly perform each of its obligations under this Agreement and the Related Documents. All payments of any sums due hereunder shall be made in the amounts required hereunder without any reduction or setoff, notwithstanding the assertion of any right of recoupment or setoff or of any counterclaim by the Fund.

6.6 Compliance With Law

The Fund shall comply with all laws, ordinances, orders, rules and regulations that may be applicable to it if the failure to comply could have a material adverse effect on the Fund’s ability to pay when due its obligations under this Agreement, any of the New VMTP Shares, or any of the other Related Documents.

6.7 Maintenance of Approvals: Filings, Etc.

The Fund shall at all times maintain in effect, renew and comply with all the terms and conditions of all consents, filings, licenses, approvals and authorizations as may be necessary under any applicable law or regulation for its execution, delivery and performance of this Agreement and the other Related Documents to which it is a party.

6.8 Inspection Rights

The Fund shall, at any reasonable time and from time to time, upon reasonable notice, permit Xxxxx Fargo or any agents or representatives thereof to examine and make copies of the records and books of account related to the transactions contemplated by this Agreement, to visit its properties and to discuss its affairs, finances and accounts with any of its officers and independent accountants, to the extent permitted by law. The Fund shall pay the reasonable expenses of Xxxxx Fargo incurred in connection with up to one inspection pursuant to this Section 6.8 per fiscal year. The Fund will not unreasonably withhold its authorization for its independent accountants to discuss its affairs, finances and accounts with Xxxxx Fargo.

All information, reports and other papers, documentation and data with respect to the Fund furnished to Xxxxx Fargo pursuant to this Section 6.8 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Xxxxx Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

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6.9 Litigation, Etc.

The Fund shall give prompt notice in writing to Xxxxx Fargo of any litigation, administrative proceeding or business development which is reasonably expected to materially adversely affect its business, properties or affairs or to impair the ability of the Fund to perform its obligations as set forth hereunder or under any of the Related Documents.

All information, reports and other papers, documentation and data with respect to the Fund furnished to Xxxxx Fargo pursuant to this Section 6.9 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Xxxxx Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

6.10 1940 Act Registration

The Fund shall maintain its valid registration as a closed-end management investment company under the 1940 Act in full force and effect.

6.11 Eligible Assets

The Fund shall only make investments in the Eligible Assets listed on Exhibit B, as amended from time to time with the prior written consent of Xxxxx Fargo, in accordance with the Fund’s investment objectives and the investment policies set forth in the Information Memorandum. For the avoidance of doubt, compliance with this Section 6.11 shall be tested as of the Effective Date and thereafter at the time an investment is made, and subsequent changes in asset values, credit quality or other circumstances shall not require the Fund to dispose of investments that were Eligible Assets at the time they were acquired by the Fund.

6.12 Credit Quality

Unless the Fund receives the prior written consent of Xxxxx Fargo (such consent to be determined in Xxxxx Fargo’s good faith discretion), the Fund (1) will invest at least 80% of its Managed Assets in securities that, at the time of investment, are rated Investment Grade or are unrated but judged to be of comparable quality by the Adviser; (2) may invest up to 20% of its Managed Assets in municipal securities that, at the time of investment, are rated Below Investment Grade or are unrated but judged to be of comparable quality by the Adviser, provided that the Fund may invest no more than 10% of its Managed Assets in municipal securities that, at the time of investment, are rated Below Highly Speculative or that are unrated but judged to be of comparable quality by the Adviser; and (3) will not invest in any non-municipal securities that, at the time of investment, are rated Below Investment Grade.

6.13 Maintenance of Effective Leverage Ratio

For so long as the Fund fails to provide the information required under Section 6.1(o), Xxxxx Fargo shall calculate the Effective Leverage Ratio using the most recently received information required to be delivered pursuant to Section 6.1(o) and the market values of securities determined by the third-party pricing service which provided the market values to the Fund on the most recent date that information was properly provided by the Fund pursuant to the requirements of Section 6.1(o). The Effective Leverage Ratio as calculated by Xxxxx Fargo in such instances shall be binding on the Fund. If required, the Fund shall restore the Effective Leverage Ratio as provided in the Articles Supplementary. For purposes of calculating the Effective Leverage Ratio, any Overconcentration Amount shall be subtracted from the sum determined pursuant to sub-section (ii) of the definition of Effective Leverage Ratio set out in Section 2.4(d) of the Articles Supplementary.

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In connection with calculating the Effective Leverage Ratio, the Fund’s total assets and accrued liabilities shall reflect the positive or negative net obligations of the Fund under each Derivative Contract determined in accordance with the Fund’s valuation policies.

6.14 Redemption and Paying Agent

The Fund shall use its commercially reasonable best efforts to engage at all times a Redemption and Paying Agent to perform the duties to be performed by the Redemption and Paying Agent specified herein and in the Articles Supplementary.

6.15 Cooperation in the Sale of New VMTP Shares

The Fund will comply with reasonable due diligence requests from Xxxxx Fargo in connection with any proposed sale by Xxxxx Fargo of New VMTP Shares in a transaction exempt from registration and otherwise permitted by this Agreement, provided that the Fund need not comply with any such request more than twice in any period of twelve consecutive months and any prospective purchaser of New VMTP Shares from Xxxxx Fargo shall execute a confidentiality agreement substantially to the effect of Section 7.13 hereof prior to receiving any due diligence materials provided pursuant to such due diligence request.

All information, reports and other papers, documentation and data with respect to the Fund furnished to Xxxxx Fargo pursuant to this Section 6.15 shall be, at the time the same are so furnished, complete and correct in all material respects and, when considered with all other material delivered to Xxxxx Fargo under this Agreement or made available pursuant to the Due Diligence Request, will not contain untrue statements of material facts or omit to state material facts necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading.

6.16 [Reserved]

6.17 Securities Depository

The Fund agrees to maintain settlement of New VMTP Shares in global book entry form through the Securities Depository or such other clearance system acceptable to Xxxxx Fargo.

6.18 Future Agreements

The Fund shall promptly, at the request of Xxxxx Fargo, enter into an agreement, on terms mutually satisfactory to the Fund and Xxxxx Fargo, of the type specified in Section 12(d)(1)(E)(iii) of the 1940 Act, so as to permit Xxxxx Fargo or any transferee satisfying the requirements set forth in Section 2.1 to rely on the provisions of Section 12(d)(1)(E)(iii) of the 1940 Act.

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ARTICLE VII

7. MISCELLANEOUS

7.1 Notices

All notices, requests and other communications to any party hereunder shall be in writing (including telecopy, electronic mail or similar writing), except in the case of notices and other communications permitted to be given by telephone, and shall be given to such party at its address or telecopy number or email address set forth below or such other address or telecopy number or email address as such party may hereafter specify for the purpose by notice to the other parties. Each such notice, request or other communication shall be effective when delivered at the address specified in this Section; provided that notices to Xxxxx Fargo under Section 6.1 shall not be effective until received in writing; except as otherwise specified, notices under Section 6.1 may be given by telephone to Xxxxx Fargo at the telephone numbers listed below (or such other telephone numbers as may be designated by Xxxxx Fargo, by written notice to the Fund, to receive such notice), immediately confirmed in writing, including by fax or electronic mail. The notice address for each party is specified below:

(a) if to the Fund:

DTF Tax-Free Income Inc.

000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000

Xxxxxxx, Xxxxxxxx 00000

Attention: Xxxxxx X. Xxxxxxx

Telephone: (000) 000-0000

Facsimile: (000) 000-0000

Email: Xxxxxx.Xxxxxxx@xxxxx.xxx

(b) if to Xxxxx Fargo:

Xxxxx Fargo Municipal Capital Strategies, LLC

c/o Wells Fargo Bank, National Association

000 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000

Attention: Xxxx Xxxxxx

Telephone: (000) 000-0000

Facsimile: (000) 000-0000

Email: xxxx.xxxxxx@xxxxxxxxxx.xxx

Wire Instructions:

Bank Routing Number:		000000000
Bank Name:		Xxxxx Fargo Bank N.A.
Account Number:		0000000 2812407
Attention:		“ATTN Xxx Xxxx –ARS Dividend”
Reference:		CUSIP 00000X000

7.2 No Waivers

(a) The obligations of the Fund hereunder shall not in any way be modified or limited by reference to any other document, instrument or agreement (including, without limitation, the New VMTP Shares or any other Related Document). The rights of Xxxxx Fargo hereunder are separate from and in addition to any rights that any Holder of any New VMTP Share may have under the terms of such New VMTP Share or any Related Document or otherwise.

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(b) No failure or delay by the Fund or Xxxxx Fargo in exercising any right, power or privilege hereunder or under the New VMTP Shares shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. No failure or delay by the Fund or Xxxxx Fargo in exercising any right, power or privilege under or in respect of the New VMTP Shares or any other Related Document shall affect the rights, powers or privileges of the Fund or Xxxxx Fargo hereunder or shall operate as a limitation or waiver thereof. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

7.3 Expenses and Indemnification

(a) The Fund shall upon demand either, as Xxxxx Fargo may require, pay in the first instance or reimburse Xxxxx Fargo (to the extent that payments for the following items are not made under the other provisions hereof) for all reasonable out-of-pocket expenses (including reasonable fees and costs of outside counsel, and reasonable consulting, accounting, appraisal, investment banking, and similar professional fees and charges) incurred by Xxxxx Fargo in connection with the enforcement of or preservation of rights under the Related Documents. The Fund shall not be responsible under this Section 7.3(a) for the fees and costs of more than one law firm in any one jurisdiction with respect to any one proceeding or set of related proceedings for Xxxxx Fargo, unless Xxxxx Fargo shall have reasonably concluded that there are legal defenses available to it that are different from or additional to those available to the Fund.

(b) The Fund agrees to indemnify and hold harmless Xxxxx Fargo and each other Indemnified Person of Xxxxx Fargo from and against any losses, claims, damages, liabilities or expenses incurred by them (including reasonable fees and disbursements of outside counsel) which are related to or arise out of (A) any material misstatements or any material statements omitted to be made in the Information Memorandum (including any documents incorporated by reference therein) or (B) any claim by any third party relating to the Exchange of the Old VMTP Shares for the New VMTP Shares by the Fund or the holding of the New VMTP Shares by Xxxxx Fargo (excluding in any such case clauses (A) or (B), claims, losses, liabilities or expenses arising out of or resulting from the gross negligence or wilful misconduct of any Indemnified Party as determined by a court of competent jurisdiction).

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(c) The indemnifying party also agrees that if any indemnification sought by an Indemnified Person pursuant to this Agreement is unavailable or insufficient, for any reason, to hold harmless the Indemnified Persons of such other party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), then the indemnifying party, in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, liabilities, damages and expenses (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the Fund on the one hand and Xxxxx Fargo on the other hand from the actual or proposed transactions giving rise to or contemplated by this Agreement or (ii) if the allocation provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also the relative fault of the Fund on the one hand and Xxxxx Fargo on the other, in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages, liabilities or expenses (or actions in respect thereof), as well as any other relevant equitable considerations; provided that in any event the aggregate contribution of Xxxxx Fargo and its Indemnified Persons to all losses, claims, damages, liabilities and expenses with respect to which contributions are available hereunder will not exceed the amount of dividends actually received by Xxxxx Fargo from the Fund pursuant to the proposed transactions giving rise to this Agreement. For purposes of determining the relative benefits to the Fund on the one hand, and Xxxxx Fargo on the other, under the proposed transactions giving rise to or contemplated by this Agreement, such benefits shall be deemed to be in the same proportion as (i) the total value received or proposed to be received by the Fund pursuant to the transactions, whether or not consummated bears to (ii) the dividends and Optional Redemption Premium paid by the Fund to Xxxxx Fargo in connection with the proposed transactions giving rise to or contemplated by this Agreement. The relative fault of the parties shall be determined by reference to, among other things, whether the actions taken or omitted to be taken in connection with the proposed transactions contemplated by this Agreement (including any misstatement of a material fact or the omission to state a material fact) relates to information supplied by the Fund on the one hand, or Xxxxx Fargo on the other, the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, misstatement or alleged omission, and any other equitable considerations appropriate in the circumstances. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for such fraudulent misrepresentation. The indemnity, reimbursement and contribution obligations under this Agreement shall be in addition to any rights that any Indemnified Person may have at common law or otherwise.

(d) If any action, suit, proceeding or investigation is commenced, as to which an Indemnified Person proposes to demand indemnification, it shall notify the indemnifying party with reasonable promptness; provided, however, that any failure by such Indemnified Person to notify the indemnifying party shall not relieve the indemnifying party from its obligations hereunder (except to the extent that the indemnifying party is materially prejudiced by such failure to promptly notify). The indemnifying party shall be entitled to assume the defense of any such action, suit, proceeding or investigation, including the employment of counsel reasonably satisfactory to the Indemnified Person. The Indemnified Person shall have the right to counsel of its own choice to represent it, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the indemnifying party has failed promptly to assume the defense and employ counsel reasonably satisfactory to the Indemnified Person in accordance with the preceding sentence or (ii) the Indemnified Person shall have been advised by counsel that there exist actual or potential conflicting interests between the indemnifying party and such Indemnified Person, including situations in which one or more legal defenses may be available to such Indemnified Person that are different from or additional to those available to the indemnifying party; provided, however, that the indemnifying party shall not, in connection with any one such action or proceeding or separate but substantially similar actions or proceedings arising out of the same general allegations be liable for fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Persons of such other party; and such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the indemnifying party and any counsel designated by the indemnifying party.

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Each party further agrees that it will not, without the prior written consent of the other parties (the consent of a party shall not be required to the extent such party is neither requesting indemnification nor being requested to provide indemnification), settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such claim, action, suit or proceeding) unless such settlement, compromise or consent includes an unconditional release of each other Indemnified Person from all liability and obligations arising therefrom. The Fund further agrees that none of Xxxxx Fargo, nor any of its affiliates, nor any directors, officers, partners, employees, agents, representatives or control persons of Xxxxx Fargo or any of its affiliates shall have any liability to the Fund arising out of or in connection with the proposed transactions giving rise to or contemplated by this Agreement except for such liability for losses, claims, damages, liabilities or expenses to the extent they have resulted from Xxxxx Fargo’s or its affiliates’ gross negligence or willful misconduct. No Indemnified Person shall be responsible or liable to the indemnifying party or any other person for consequential, special or punitive damages which may be alleged as a result of this Agreement.

(e) Nothing in this Section 7.3 is intended to limit any party’s obligations contained in other parts of this Agreement or the New VMTP Shares.

7.4 Amendments and Waivers

Any provision of this Agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed by the Fund and Xxxxx Fargo; provided, that the Fund shall not make or agree to any amendment or waiver that affects any preference, right or power of the New VMTP Shares or the Holders thereof except as permitted under the Charter, including the Articles Supplementary.

7.5 Successors and Assigns

The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Notwithstanding the preceding sentence, neither the Fund nor Xxxxx Fargo may assign or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of the other party (other than by operation of law), except that (1) any transferee satisfying the requirements set forth in Section 2.1 and which has executed and delivered to the Fund the transferee certificate attached as Exhibit C shall, prior to registration of any New VMTP Shares under the Securities Act, have the rights of Xxxxx Fargo set forth in Section 6.18 and Section 7.15 and shall, so long as such transferee has provided a means for the Fund to transmit such information electronically to it, be entitled to receive the information delivered pursuant to Section 6.1(o) and such transferees shall be deemed a party to this Agreement for purposes of Section 6.1(o) and the confidentiality provisions herein as specified in the transferee certificate and (2) Xxxxx Fargo may assign its rights or obligations to any affiliate of Xxxxx Fargo or any tender option bond trust in which Xxxxx Fargo retains the entire residual interest. Any purported assignment without such prior written consent shall be void.

7.6 Term of this Agreement

This Agreement shall terminate upon payment in full of all amounts due and owing to Xxxxx Fargo hereunder and under the New VMTP Shares; and notwithstanding any termination of this Agreement, Section 7.3, Section 7.7, Section 7.8, Section 7.10, Section 7.11, Section 7.12, and Section 7.13 (for a period of two years after the termination of this Agreement) shall remain in full force and effect.

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7.7 Governing Law

This Agreement shall be construed in accordance with and governed by the domestic law of the State of New York.

THE PARTIES HERETO HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY.

7.8 Waiver of Jury Trial

The Fund and Xxxxx Fargo hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against any other on any matters whatsoever arising out of or in any way connected with this Agreement.

7.9 Counterparts

This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Any counterpart or other signature delivered by facsimile or by electronic mail shall be deemed for all purposes as being a good and valid execution and delivery of this Agreement by that party.

7.10 Beneficiaries

This Agreement is not intended and shall not be construed to confer upon any Person other than the parties hereto and their successors and permitted assigns any rights or remedies hereunder.

7.11 Entire Agreement

This Agreement shall constitute the entire agreement and understanding between the parties hereto with respect to the matters set forth herein and shall supersede any and all prior agreements and understandings relating to the subject matter hereof.

7.12 Relationship to the Articles Supplementary

The Fund and Xxxxx Fargo agree that the representations, warranties, covenants and agreements contained in this Agreement are in addition to the terms and provisions set forth in the Articles Supplementary.

7.13 Confidentiality

Any information delivered by a party to this Agreement to any other party pursuant to this Agreement, including, without limitation, pursuant to Section 6.1 in the case of the Fund (collectively, the “Information”), shall not be disclosed by such other party (or its employees, representatives or agents) to any person or entity (except as required by law or to such of its agents and advisors as need to know and agree to be bound by the provisions of this paragraph) without the prior written consent of the party delivering the Information.

23

The obligations of confidentiality set out in the preceding paragraph do not extend to Information that (a) is or becomes generally available to the public other than as a result of disclosure by a party in violation of this Agreement, (b) is independently acquired by the party receiving the Information from a third-party source not known to such party, after a good faith inquiry, to be in breach of a duty of confidentiality to the other party, or (c) is required or requested to be disclosed (i) by a regulatory agency or in connection with an examination of either party or its representatives by regulatory authorities, (ii) pursuant to subpoena or other court process, (iii) at the express direction of any other authorized government agency, (iv) to its independent attorneys or auditors, (v) as required by any NRSRO, (vi) as otherwise required by law or regulation, (vii) otherwise in connection with the enforcement of this Agreement, (viii) in connection with the exercise of any remedies hereunder or in any suit, action or proceeding relating to this Agreement and the enforcement of rights hereunder, (ix) by a prospective purchaser of the New VMTP Shares that is (A) a transferee that would be permitted pursuant to Section 2.1(b) of this Agreement and (B) aware of the confidentiality provisions of this Section 7.13 and is subject to an agreement with the transferor containing provisions substantially similar thereto and that states that the Fund is an express third party beneficiary thereof, (x) subject to an agreement containing provisions substantially similar to those of this Section 7.13, or (xi) subject to an agreement containing provisions substantially similar to those of this Section 7.13 and with the prior written consent of the other party to this Agreement, which consent shall not be unreasonably withheld, to any actual or prospective counterparty in any swap or derivative transactions. For the avoidance of doubt, references in this Section 7.13 to “regulatory agency”, “regulatory authorities”, “government agency” and “law or regulation” shall be deemed to include the Internal Revenue Service and state taxation authorities.

7.14 Severability

In case any provision of this Agreement shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby so long as the intent of the parties to this Agreement shall be preserved.

7.15 Consent Rights of the Majority Participants to Certain Actions.

Without the affirmative vote or consent of the Majority Participants, neither the Fund nor the Board of Directors will take or authorize the taking of any of actions set forth under clauses (a) through (e) of this Section 7.15:

(a) The termination by the Fund of any Rating Agency or the selection of any Other Rating Agency, either in replacement for a Rating Agency or as an additional Rating Agency with respect to the New VMTP Shares.

(b) The Fund issuing or suffering to exist any “senior security” (as defined in the 1940 Act as of the date hereof or, in the event such definition shall be amended, with such changes to the definition thereof as consented to by the Majority Participants) other than the New VMTP Shares issued and sold pursuant to this Agreement or indebtedness for borrowed money of the Fund, except (i) borrowings for temporary purposes in an amount not to exceed 5% of the assets of the Fund, which borrowings are repaid within 60 days, (ii) the issuance of senior securities or the incurrence of indebtedness for borrowed money, the proceeds of which will be used for the redemption or repurchase of the New VMTP Shares and costs incurred in connection therewith, and (iii) as may be otherwise approved or consented to by the Majority Participants, provided that if any such “senior security” is created or incurred by the Fund it shall not require the approval of the Majority Participants if the Fund redeems, retires or terminates such “senior security” or otherwise cures such non-compliance within five Business Days of receiving notice of the existence thereof.

24

(c) The Fund (i) creating or incurring or suffering to be incurred or to exist any lien on any other funds, accounts or other property held under the Charter, except as permitted by the Charter or (ii) except for any lien for the benefit of the Custodian of the Fund on the assets of the Fund held by such Custodian, pledging any portfolio security to secure any senior securities or other liabilities to be incurred by the Fund (including under any tender option bond trust of which the residual floating rate trust certificates will be owned by the Fund) unless the securities pledged pursuant to all such pledge or other security arrangements are valued for purposes of such security arrangements in an aggregate amount not less than 70% of their aggregate market value (determined by an independent third party pricing service) for purposes of determining the value of the collateral required to be posted or otherwise provided under all such security arrangements; provided, that the required collateral value under such security arrangements shall not exceed the market value of the exposure of each secured party to the credit of the Fund; and provided further, that it shall not require the approval of the Majority Participants if any pledge or security interest in violation of the preceding sentence is created or incurred by the Fund and the Fund cures such violation within five Business Days of receiving notice of the existence thereof.

(d) Approval of any amendment, alteration or repeal of any provision of the Charter, including the Articles Supplementary, whether by merger, consolidation or otherwise, that would affect any preference, right or power of the New VMTP Shares differentially from the rights of the holders of the Common Stock; or

(e) Approval of any action to be taken pursuant to Sections 2.5(g) and 2.16 of the Articles Supplementary (other than the issuance of additional series of Variable Rate MuniFund Term Preferred Shares or other Preferred Stock, the proceeds of which will be used for the redemption or repurchase of the New VMTP Shares and costs incurred in connection therewith).

In addition, if the Board of Directors shall designate a replacement to the S&P Weekly High Grade Municipal Index pursuant to the definition of SIFMA Municipal Swap Index contained in the Articles Supplementary, the Fund shall notify the Holders of the New VMTP Shares within five Business Days of such designation, and if within 30 days of such notice the Majority Participants shall have objected in writing to the designated replacement, the Board of Directors shall designate a replacement to such index as agreed to between the Fund and the Majority Participants. In such event, the replacement index initially approved by the Board of Directors shall be the index in effect for purposes of the Articles Supplementary until a new index has been approved by the Fund and the Majority Participants.

7.16 Plan of Reorganization.

This Agreement shall constitute a “plan of reorganization” within the meaning of Treasury Regulation § 1.368-2(g).

[The remainder of this page has been intentionally left blank.]

25

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

DTF TAX-FREE INCOME INC.
By:		/s/ Xxxxxx X. Xxxxxxx
Name:		Xxxxxx X. Xxxxxxx
Title:		President and Chief Executive Officer
XXXXX FARGO MUNICIPAL CAPITAL STRATEGIES, LLC
By:		/s/ Xxx Xxxxxx
Name:		Xxx Xxxxxx
Title:		Senior Vice President

SCHEDULE 1

Description of Shares: 650 DTF Tax-Free Income Inc. Variable Rate MuniFund Term Preferred Shares, Series 2021, with a Liquidation Preference of $100,000 per share

EXHIBIT A

FORMS OF OPINIONS OF COUNSEL FOR THE FUND

EXHIBIT A-1

FORM OF CORPORATE AND 1940 ACT OPINION

[ON FILE]

EXHIBIT A-2

FORM OF TAX OPINION

[ON FILE]

EXHIBIT A-3

FORM OF LOCAL COUNSEL OPINION

[ON FILE]

EXHIBIT B

ELIGIBLE ASSETS

On the Effective Date and at all times thereafter that the New VMTP Shares are Outstanding:

1. “Eligible Assets” are defined to consist only of assets that conform to the following requirements as of the time of investment:

A. Debt obligations. The following debt obligations which are not in payment default at the time of investment:

i. Debt obligations issued by a State, the District of Columbia or political subdivision thereof, including, but not limited to, limited obligation bonds, revenue bonds, and obligations that satisfy the requirements of Section 142(b)(1) of the Code issued by or on behalf of one or more States, or any public agency or authority of any State, or political subdivision of a State.

ii. Debt obligations issued by a U.S. Territory or political subdivision thereof, including limited obligation bonds, revenue bonds, and obligations that satisfy the requirements of section 142(b)(1) of the Code issued by or on behalf of one or more U.S. Territories, or any public agency or authority of any U.S. Territory, or political subdivision of a U.S. Territory, which are “investment grade” (as defined in Paragraph 1.A.x.(bb) below).

iii. Debt obligations of the United States.

iv. Debt obligations issued, insured, or guaranteed by a department or an agency of the government of the United States, if the obligation, insurance, or guarantee commits the full faith and credit of the United States for the repayment of the obligation.

v. Debt obligations of the Washington Metropolitan Area Transit Authority guaranteed by the U.S. Secretary of Transportation under Section 9 of the National Capital Transportation Act of 1969.

vi. Debt obligations of the Federal Home Loan Banks.

vii. Debt obligations, participations or other instruments of or issued by the Federal National Mortgage Association or the Government National Mortgage Association.

viii. Debt obligations which are or ever have been sold by the Federal Home Loan Mortgage Corporation pursuant to sections 305 or 306 of the Federal Home Loan Mortgage Corporation Act.

ix. Debt obligations of any agency named in 12 U.S.C. § 24 (Seventh) as eligible to issue obligations that a national bank may underwrite, deal in, purchase and sell for the bank’s own account, including qualified Canadian government obligations.

x. Debt obligations of issuers other than those specified in (i) through (ix) above that are “investment grade” and that are “marketable.” For these purposes, an obligation is:

(aa) “marketable” if:

• it is registered under the Securities Act;

B - 1

• it is offered and sold pursuant to Securities and Exchange Commission Rule 144A; 17 CFR 230.144A; or

• it can be sold with reasonable promptness at a price that corresponds reasonably to its fair value; and

(bb) “investment grade” if:

• the obligor had adequate capacity to meet financial commitments under the security for the projected life of the asset or exposure, which capacity is presumed if the risk of default by the obligor is low and the full and timely repayment of principal and interest is expected.

xi. Certificates or other securities evidencing ownership interests in a municipal bond trust structure (generally referred to as a tender option bond structure) that invests in (a) debt obligations of the types described in (i) above or (b) depository receipts reflecting ownership interests in accounts holding debt obligations of the types described in (i) above.

xii. The bonds, notes and other debt securities referenced in (A) above shall be defined as Eligible Assets. An asset shall not lose its status as an Eligible Asset solely by virtue of the fact that:

• it provides for repayment of principal and interest in any form including fixed and floating rate, zero interest, capital appreciation, discount, leases, and payment in kind; or

• it is for long-term or short-term financing purposes.

B. Derivatives

i. Interest rate derivatives;

ii. Swaps, futures, forwards, structured notes, options and swaptions related to Eligible Assets or on an index related to Eligible Assets; or

iii. Credit default swaps.

C. Other Assets

i. Securities issued by other investment companies (open- or closed-end funds and exchange-traded funds) that invest exclusively in (a) Eligible Assets, or (b) “Eligible Securities” permitted for investment by a “Tax exempt fund” as defined under SEC Rule 2a-7.

ii. Cash.

iii. Repurchase agreements on assets described in 1(A) above.

iv. Taxable fixed-income securities issued by an issuer described in Paragraph 1(A) (a “Permitted Issuer”) that are not in default at the time of acquisition and are acquired for the purpose of influencing control over such Permitted Issuer or over the creditor group of holders of securities of such Permitted Issuer, where the Fund already owns securities of such Permitted Issuer and the credit quality of such securities has deteriorated or is expected shortly to deteriorate and such new investment is made with the expectation that it should enable the Fund to better maximize the value of its existing investment in such issuer, provided that the taxable fixed-income securities of such issuer so acquired do not constitute more than 0.5% of the Fund’s Managed Assets as of the time of investment.

B - 2

2. At any time that the New VMTP Shares are outstanding, for any investment company the securities of which are held by the Fund, the Fund will provide or make available the following information to the Holders within ten (10) days after the public quarterly release of such information and on the Effective Date (for the reporting period having ended most recently prior to the closing):

i. the identity of the investment company and the CUSIP number, the number of shares owned, as of the end of the prior quarter, and the percentage of the investment company’s equity represented by the Fund’s investment, as of the end of the prior quarter;

ii. a representation that each such investment company invests solely in “Eligible Assets”, which representation may be based upon the affirmative representation of the underlying investment company’s investment adviser; and

iii. the information contained in the most recently released financial statements of each such underlying investment company relating to the portfolio holdings of each such investment company.

B - 3

EXHIBIT C

TRANSFEREE CERTIFICATE

DTF Tax-Free Income Inc.

000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000

Xxxxxxx, XX 00000

Attention: Xxxxxx X. Xxxxxxx

Ladies and Gentlemen:

Reference is hereby made to the Exchange Agreement (the “Exchange Agreement”), dated as of January 8, 2016, between DTF Tax-Free Income Inc., a closed-end management investment company organized as a Maryland corporation (the “Fund”), Xxxxx Fargo Municipal Capital Strategies, LLC, a wholly owned subsidiary of Xxxxx Fargo Bank, National Association, organized and existing under the laws of Delaware, including its successors by merger or operation (the “Transferor”). Capitalized terms used but not defined herein shall have the meanings given them in the Exchange Agreement.

In connection with the proposed sale by the Transferor of                     Variable Rate MuniFund Term Preferred Shares, Series 2021 (“VMTP Shares”) of the Fund (the “Transferred Shares”) to the undersigned transferee (the “Transferee”), the undersigned agrees and acknowledges, on its own behalf, and makes the representations and warranties, on its own behalf, as set forth in this certificate (this “Transferee Certificate”) to the Fund and the Transferor:

1. The Transferee certifies to one of the following (check a box):

q it is a “qualified institutional buyer” (a “QIB”) (as defined in Rule 144A under the Securities Act or any successor provision) (“Rule 144A”) that is a registered closed-end management investment company the shares of which are traded on a national securities exchange (a “Closed-End Fund”), a bank (or an affiliate of a bank), insurance company or registered open-end management investment company, in each case, to which any offer and sale is being made pursuant to Rule 144A or another available exemption from registration under the U.S. Securities Act of 1933, as amended (the “Securities Act”), in a manner not involving any public offering within the meaning of Section 4(a)(2) of the Securities Act;

q it is a tender option bond trust in which all investors are QIBs that are Closed-End Funds, banks (or affiliates of banks), insurance companies, or registered open-end management investment companies; or

q is a person which the Fund has consented in writing to permit to be the holder of the Transferred Shares.

2. The Transferee certifies that it (check a box):

q is not an Advisory Person that after such sale and transfer, would own more than 20% of the Outstanding VMTP Shares; or

q has received the prior written consent of the Fund and the holder(s) of more than 50% of the Outstanding VMTP Shares.

C - 1

3. The Transferee understands and acknowledges that the Transferred Shares are “restricted securities” and have not been registered under the Securities Act or any other applicable securities law, are being offered for sale pursuant to Rule 144A or another available exemption from registration under the Securities Act, in a manner not involving any public offering with the meaning of Section 4(a)(2) of the Securities Act, and may not be offered, sold or otherwise transferred except in compliance with the registration requirements of the Securities Act or any other applicable securities law, pursuant to an exemption therefrom or in a transaction not subject thereto and in each case in compliance with the conditions for transfer set forth in this Transferee Certificate.

4. The Transferee is purchasing the Transferred Shares as principal for its own account and not with a view to or for the purpose of distributing or reselling such securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Transferred Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Transferred Shares in violation of the Securities Act or any applicable state securities law, subject to any requirements of law that the disposition of its property be at all times within its control and subject to its ability to resell such securities pursuant to Rule 144A or another available exemption from registration under the Securities Act and any applicable state securities law.

5. The Transferee agrees, on its own behalf and on behalf of each subsequent holder or owner of the Transferred Shares who by its acceptance thereof will agree, to offer, sell or otherwise transfer the Transferred Shares only to Persons it reasonably believes are (A)(i) QIBs that are registered closed-end management investment companies, the shares of which are traded on a national securities exchange, banks (or affiliates of banks), insurance companies and registered open-end management investment companies, in each case, pursuant to Rule 144A or another available exemption from registration under the Securities Act, in a manner not involving any public offering within the meaning of Section 4(a)(2) of the Securities Act, (ii) tender option bond trusts in which all investors are QIBs that are registered closed-end management investment companies, the shares of which are traded on a national securities exchange, banks (or affiliates of banks), insurance companies, and registered open-end management investment companies, or (iii) other investors which the Fund has consented in writing to permit to be a holder of the Transferred Shares and (B) unless the prior written consent of the Fund and the holder(s) of more than 50% of the outstanding VMTP Shares has been obtained, is not an Advisory Person, if such Advisory Person would, after such sale and transfer, own more than 20% of the Outstanding VMTP Shares.

6. The Transferee acknowledges that the VMTP Shares were issued in book-entry form and are represented by one global certificate and that the global certificate representing the VMTP Shares (unless sold to the public in an underwritten offering of the VMTP Shares pursuant to a registration statement filed under the Securities Act) contains a legend substantially to the following effect:

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.

C - 2

THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY ONLY TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS (1)(A) A “QUALIFIED INSTITUTIONAL BUYER” THAT IS A REGISTERED CLOSED-END MANAGEMENT INVESTMENT COMPANY, THE SHARES OF WHICH ARE TRADED ON A NATIONAL SECURITIES EXCHANGE, BANKS (OR AFFILIATES OF BANKS), INSURANCE COMPANIES AND REGISTERED OPEN-END MANAGEMENT INVESTMENT COMPANIES, IN EACH CASE, IN AN OFFER AND SALE MADE PURSUANT TO RULE 144A OR ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, IN A MANNER NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF SECTION 4(a)(2) OF THE SECURITIES ACT; (B) A TENDER OPTION BOND TRUST IN WHICH ALL INVESTORS ARE QUALIFIED INSTITUTIONAL BUYERS THAT ARE REGISTERED CLOSED-END MANAGEMENT INVESTMENT COMPANIES, THE SHARES OF WHICH ARE TRADED ON A NATIONAL SECURITIES EXCHANGE, BANKS (OR AFFILIATES OF BANKS), INSURANCE COMPANIES, AND REGISTERED OPEN-END MANAGEMENT INVESTMENT COMPANIES; OR (C) A PERSON THAT THE ISSUER OF THE SECURITY HAS APPROVED IN WRITING TO BE THE HOLDER OF THE SECURITY AND (2) UNLESS THE PRIOR WRITTEN CONSENT OF THE ISSUER OF THE SECURITY AND HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VMTP SHARES IS OBTAINED, NOT AN ADVISORY PERSON (AS DEFINED IN THE VMTP EXCHANGE AGREEMENT, DATED JANUARY 8, 2016, BETWEEN THE FUND, XXXXX FARGO MUNICIPAL CAPITAL STRATEGIES, LLC), IF SUCH ADVISORY PERSON WOULD, AFTER SUCH SALE AND TRANSFER, OWN MORE THAN 20% OF THE OUTSTANDING VMTP SHARES.

7. The Transferee has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Transferred Shares, and has so evaluated the merits and risks of such investment. The Transferee is able to bear the economic risk of an investment in the Transferred Shares and, at the present time, is able to afford a complete loss of such investment.

8. The Transferee acknowledges that it has received a copy of the Exchange Agreement and Appendices thereto and agrees to be bound by any obligations therein binding on a transferee of the VMTP Shares and the confidentiality obligations therein with respect to information relating to the Fund as if it were the Transferor.

9. The Transferee acknowledges that it has been given the opportunity to obtain from the Fund the information referred to in Rule 144A(d)(4) under the Securities Act, and has either declined such opportunity or has received such information and has had access to and has reviewed all information, documents and records that it has deemed necessary in order to make an informed investment decision with respect to an investment in the Transferred Shares and that the Transferee understands the risk and other considerations relating to such investment.

10. The Transferee acknowledges that it has sole responsibility for its own due diligence investigation and its own investment decision relating to the Transferred Shares. The Transferee understands that any materials presented to the Transferee in connection with the purchase and sale of the Transferred Shares does not constitute legal, tax or investment advice from the Fund. The Transferee has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with the purchase of the Transferred Shares.

C - 3

11. The Transferee acknowledges that each of Transferor and the Fund and their respective affiliates and others will rely on the acknowledgments, representations and warranties contained in this Transferee’s Certificate as a basis for exemption of the sale of the Transferred Shares under the Securities Act, under the securities laws of all applicable states, and for other purposes. The Transferee agrees to promptly notify the Fund and the Transferor if any of the acknowledgments, representations or warranties set forth herein are no longer accurate.

12. This Transferee’s Certificate shall be governed by and construed in accordance with the laws of the State of New York.

13. The Transferee agrees to provide, together with this completed and signed Transferee’s Certificate, a completed and signed IRS Form W-9, Form W-8 or successor form, as applicable.

[The next page is the signature page.]

C - 4

The undersigned has provided a completed and signed IRS Form W-9, Form W-8 or successor form, as applicable, and has caused this Transferee’s Certificate to be executed by its duly authorized representative as of the date set forth below.

Date:                    

Name of Transferee (use exact name in which

Transferred Shares are to be registered):

Authorized Signature

Print Name and Title

Address of Transferee for Registration of Transferred Shares:

Transferee’s taxpayer identification number:

C - 5

EXHIBIT D

INFORMATION TO BE PROVIDED BY THE FUND

Reporting as of:                    

TOB Floaters: $                    

CUSIP

Portfolio Name

Description

Market Value

Par Value

Rating

State

[    ]

[

]

[

]

[

]

[

]

[

]

[

]

ANNEX A

ADDITIONAL REPRESENTATIONS AND WARRANTIES

(Given only as of the Effective Date)

1. The New VMTP Shares conform in all material respects to the descriptions thereof contained in the Information Memorandum.

2. No registration of the New VMTP Shares under the Securities Act is required.

3. As of the Effective Date, the New VMTP Shares will satisfy the eligibility requirements of Rule 144A(d)(3) under the Securities Act, and no securities of the same class (within the meaning of Rule 144A(d)(3) under the Securities Act) as the New VMTP Shares are listed on any national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system.

4. The Fund has a reasonable belief that the issuance of the New VMTP Shares pursuant to the Exchange and subsequent transfers of the New VMTP Shares will be limited to persons who are (1)(i) QIBs that are registered closed-end management investment companies, banks (or affiliates of banks), insurance companies or registered open-end management investment companies, in each case, pursuant to Rule 144A or another available exemption from registration under the Securities Act, in a manner not involving any public offering within the meaning of Section 4(a)(2) of the Securities Act, (ii) tender option bond trusts in which all investors are QIBs that are Closed-End Funds, banks (or affiliates of banks), insurance companies or registered open-end management investment companies or (iii) other investors with the prior written consent of the Fund and (2) unless the prior written consent of the Fund and the Majority Participants has been obtained, not Advisory Persons if such Advisory Persons would, after such sale and transfer, own more than 20% of the Outstanding New VMTP Shares.

5. Neither the Fund, nor any person acting on its behalf, has, directly or indirectly, made offers or sales of any security (as defined in the Securities Act), or solicited offers to buy any security, nor will it, directly or indirectly, make offers or sales of any security or solicit offers to buy any security under circumstances that would require the registration of the New VMTP Shares under the Securities Act.

6. The Fund will ensure that any Bloomberg screen containing information about the New VMTP Shares includes the following (or similar) language:

• the “Note Box” on the bottom of the “Security Display” page describing the New VMTP Shares will state: “Iss’d Under 144A.”

• the “Security Display” page will have flashing a red indicator “See Other Available Information.”

• the indicator will link to the “Additional Security Information” page, which will state that the securities “are being offered in reliance on the exemption from registration under Rule 144A of the Securities Act to persons who are qualified institutional buyers (as defined in Rule 144A under the Securities Act).”

7. The Fund will instruct The Depository Trust Company (“DTC”) to take these or similar steps with respect to the New VMTP Shares:

• the DTC 20-character security descriptor and 48-character additional descriptor will indicate that sales are limited to QIBs.

Annex A - 1

8. The Fund has confirmed that CUSIP has established a “fixed field” attached to the CUSIP number for the New VMTP Shares containing the “144A” indicator.

9. The Fund is duly registered under the 1940 Act as a closed-end management investment company; the Fund has made all the filings with the SEC that it is required to make under the 1940 Act and the rules and regulations thereunder (the “1940 Act Rules and Regulations”) (each such filing, a “1940 Act Document”); each 1940 Act Document complies in all material respects with the requirements of the 1940 Act and the 1940 Act Rules and Regulations, and each 1940 Act Document did not at the time of filing with the SEC include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

10. No holders of the New VMTP Shares have rights to the registration of such New VMTP Shares.

11. The Fund is not in violation or default of any provision of its Charter or the Articles Supplementary, or in material violation of (i) the terms of any material indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other agreement, obligation, condition, covenant or instrument to which it is a party or bound or to which its property is subject or (ii) any material statute, law, rule, regulation, judgment, order or decree of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over the Fund or any of its properties.

12. The Fund has not distributed and, prior to the Effective Date, will not distribute any written material in connection with the offer of the New VMTP Shares other than the Information Memorandum (including any amendments or supplements thereto) and copies of this Agreement and the Articles Supplementary.

13. The Fund maintains and will maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization and with the investment objectives, policies and restrictions of the Fund and the applicable requirements of the 1940 Act, the 1940 Act Rules and Regulations and the Code; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with accounting principles generally accepted in the United States, to calculate net asset value, to maintain accountability for assets and to maintain material compliance with the books and records requirements under the 1940 Act and the 1940 Act Rules and Regulations; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Fund employs “internal controls over financial reporting” (as such term is defined in Rule 30a-3 under the 0000 Xxx) and such internal controls over financial reporting are effective as required the 1940 Act and the 1940 Act Rules and Regulations. The Fund is not aware of any material weakness in its internal controls over financial reporting.

14. The Fund maintains “disclosure controls and procedures” (as such term is defined in Rule 30a-3 under the 1940 Act); such disclosure controls and procedures are effective as required under the 1940 Act and the 1940 Act Rules and Regulations.

Annex A - 2

15. The Fund has not taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in a violation of federal securities laws or in stabilization or manipulation of the price of any security of the Fund to facilitate the sale of the New VMTP Shares, and the Fund is not aware of any such action taken or to be taken by any affiliates of the Fund.

16. Each of the Custodian Agreement between the Fund and State Street Bank and Trust Company dated as of November 21, 1991 and most recently amended on July 17, 2001, the Investment Management Agreement between the Fund and the Adviser dated as of November 1, 1995 (the “Management Agreement”), the Paying Agent Agreement between the Fund and the Redemption and Paying Agent dated as of January 8, 2016 and the Transfer Agency and Service Agreement between the Fund and American Stock Transfer & Trust Company, LLC dated as of March 20, 2006 complies in all material respects with all applicable provisions of the 1940 Act, the 1940 Act Rules and Regulations, the Investment Advisers Act of 1940, as amended (the “Advisers Act”), and the rules and regulations thereunder (the “Advisers Act Rules and Regulations”) and the Fund’s directors and the Fund’s sole shareholder or shareholders have approved the Management Agreement in accordance with Sections 15(a) and (c), respectively, of the 1940 Act.

17. Except as set forth or incorporated by reference in the Information Memorandum, no trustee of the Fund is an “interested person” (as defined in the 0000 Xxx) of the Fund.

18. There are no transfer taxes or other similar fees or charges under federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement or the issuance by the Fund of the New VMTP Shares.

19. There is and has been no failure on the part of the Fund and any of the Fund’s directors or officers, in their capacities as such, to comply with any provision of the Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated in connection therewith.

20. The Fund has adopted and implemented written policies and procedures reasonably designed to prevent violation of the Federal Securities Laws (as that term is defined in Rule 38a-1 under the 0000 Xxx) by the Fund, including policies and procedures that provide oversight of compliance by each investment adviser and transfer agent of the Fund.

21. The offer and sale of the New VMTP Shares has been conducted in a manner by the Fund and its agents so as not to violate any applicable federal securities laws, including the 1940 Act and the 1940 Act Rules and Regulations, the Advisers Act and the Advisers Act Rules and Regulations, or any applicable state laws.

Annex A - 3