EXHIBIT 13(b)
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AUCTION AGENCY AGREEMENT
between
VAN XXXXXX XXXXXXX CALIFORNIA
VALUE MUNICIPAL INCOME TRUST
and
BANKERS TRUST COMPANY
Dated as of July 21, 1993
Relating to
Auction Preferred Shares
("APS")
of
VAN XXXXXX XXXXXXX CALIFORNIA
VALUE MUNICIPAL INCOME TRUST
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1. Definitions and Rules of Construction ..................................... 1
1.1 Terms Defined by Reference to APS Provisions ....................... 1
1.2 Terms Defined Herein ............................................... 1
1.3 Rules of Construction .............................................. 3
2. The Auction ............................................................... 3
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures .............................................. 3
2.2 Preparation of Each Auction; Maintenance of Registry of
Beneficial owners .................................................. 4
2.3 Information Concerning Rates ....................................... 7
2.4 Auction Schedule ................................................... 11
2.5 Designation of Special Dividend Period ............................. 12
2.6 Allocation of Taxable Income ....................................... 14
2.7 Failure to Deposit ................................................. 15
2.8 Broker-Dealers ..................................................... 17
2.9 Ownership of APS ................................................... 18
2.10 Access to and Maintenance of Auction Records ....................... 18
2.11 Dividend and Redemption Price Deposit .............................. 18
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent........ 19
4. The Auction Agent as Transfer Agent and Registrar ......................... 19
4.1 Issue of Share Certificates ........................................ 19
4.2 Registration of Transfer of Shares ................................. 19
4.3 Removal of Legend on Restricted Shares ............................. 20
4.4 Lost Share Certificates ............................................ 20
4.5 Disposition of Cancelled Certificates; Record Retention ............ 20
4.6 Share Transfer Books ............................................... 20
4.7 Return of Funds .................................................... 21
5. Representations and Warranties of the Fund ................................ 21
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6. The Auction Agent........................................................... 22
6.1 Duties and Responsibilities.......................................... 22
6.2 Rights of the Auction Agent.......................................... 23
6.3 Auction Agent's Disclaimer........................................... 24
6.4 Compensation, Expenses and Indemnification........................... 24
7. Miscellaneous............................................................... 24
7.1 Term of Agreement.................................................... 24
7.3 Entire Agreement..................................................... 26
7.4 Benefits............................................................. 26
7.5 Amendment; Waiver.................................................... 26
7.6 Successors and Assigns............................................... 27
7.7 Limitation of Liability.............................................. 27
7.9 Execution in Counterparts............................................ 27
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AUCTION AGENCY AGREEMENT dated as of July 21, 0000 xxxxxxx XXX XXXXXX
XXXXXXX XXXXXXXXXX VALUE MUNICIPAL INCOME TRUST, a Massachusetts business trust
(the "Fund"), and BANKERS TRUST COMPANY, a
New York banking corporation (the
"Auction Agent").
WHEREAS, the Fund proposes to issue a series of preferred shares of
beneficial interest, par value $.01 per share, liquidation preference $50,000
per share, designated Auction Preferred Shares pursuant to the APS Provisions
(as hereinafter defined) and desires that the Auction Agent perform certain
duties in connection with the APS upon the terms and subject to the conditions
of this Agreement, and hereby appoints the Auction Agent to act in the
capacities set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Fund and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined by Reference to APS Provisions. Capitalized terms not
defined herein shall have the respective meanings specified in the APS
Provisions.
1.2 Terms Defined Herein. As used herein and in the Settlement Procedures,
the following terms shall have the following meanings, unless the context
otherwise requires:
(a) "Agent Member" of any Person shall mean the member of, or
participant in, the Securities Depository that will act on behalf of a Bidder
and is identified as such in such Bidder's Master Purchaser's Letter.
(b) "APS Provisions" shall mean the Certificate of Vote of the Fund's
Board of Trustees establishing the APS pursuant to the Declaration of Trust of
the Fund and attached hereto as Exhibit D.
(c) "Auction" shall have the meaning specified in Section 2.1 hereof.
(d) "Auction Procedures" shall mean the auction procedures
constituting Part II of the form of APS Provisions.
(e) "Authorized Officer" shall mean each Senior Vice President, Vice
President, Assistant Vice President, Assistant Treasurer and Assistant Secretary
of the Auction Agent and every other officer or employee of the Auction Agent
designated as an "Authorized Officer" for purposes hereof in a communication to
the Fund.
(f) "Broker-Dealer" shall mean any broker-dealer, commercial bank or
other entity permitted by law to perform the functions of a Broker-Dealer that
is a member of, or a participant in, the Securities Depository or is an
affiliate of such member or participant, has been selected by the Fund and has
entered into a Broker-Dealer Agreement that remains effective.
(g) "Broker-Dealer Agreement" shall mean each agreement among the
Fund, the Auction Agent and a Broker-Dealer substantially in the form attached
hereto as Exhibit A.
(h) "Existing Holder," when used with respect to the APS, shall mean a
Person who has signed a Master Purchaser's Letter and is listed as the
beneficial owner of such APS in the records of the Auction Agent.
(i) "Fund Officer" shall mean the Chairman of the Board of Trustees of
the Fund, the President, each Vice President (whether or not designated by a
number or word or words added before or after the title "Vice President"), the
Secretary, the Treasurer, each Assistant Secretary and each Assistant Treasurer
of the Fund and every other officer or employee of the Fund designated as a
"Fund Officer" for purposes hereof in a notice to the Auction Agent.
(j) "Master Purchaser's Letter" shall mean a letter addressed to the
Fund, the Auction Agent, a Broker-Dealer and an Agent Member, substantially in
the form attached hereto as Exhibit B.
(k) "Potential Holder," when used with respect to the APS, shall mean
any Person, including any Existing Holder of APS, (i) who shall have executed a
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Master Purchaser's Letter and (ii) who may be interested in acquiring APS (or,
in the case of an Existing Holder of APS, additional APS).
(l) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit C.
(m) "Underwriters" shall mean Xxxxxxx, Sachs & Co., Xxxxx Xxxxxx,
Xxxxxx Xxxxx & Co. Incorporated, PaineWebber Incorporated, Prudential Securities
Incorporated, Xxxxxx, Peabody & Co. Incorporated and X.X. Xxxxxxx & Sons, Inc.
and any other person named as an underwriter of the APS in the Underwriting
Agreement or any schedule thereto.
(n) "Underwriting Agreement" shall mean the Underwriting Agreement
dated July 15, 1993 among the Fund and Xxxxxxx, Sachs & Co., Xxxxx Xxxxxx,
Xxxxxx Xxxxx & Co. Incorporated, PaineWebber Incorporated, Prudential Securities
Incorporated, Xxxxxx, Peabody & Co. Incorporated and X.X. Xxxxxxx & Sons, Inc. .
1.3 Rules of Construction. Unless the context or use indicates another or
different meaning or intent, the following rules shall apply to the construction
of this Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience of
reference and shall not constitute a part of this Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof", "herein", "hereto" and other words of similar
import refer to this Agreement as a whole.
(d) All references herein to a particular time of day shall be to
New
York City time.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures. (a) The APS Provisions provide that the Applicable Rate
per annum
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for the APS for each Subsequent Dividend Period after the Initial Dividend
Period with respect to the APS shall, except under certain conditions, be equal
to the rate per annum that a bank or trust company appointed by the Fund advises
has resulted on the Business Day preceding the first day of such Subsequent
Dividend Period from implementation of the Auction Procedures. Each periodic
implementation of the Auction Procedures is hereinafter referred to as an
"Auction." The Board of Trustees has adopted a resolution appointing Bankers
Trust Company as Auction Agent for purposes of the Auction Procedures for the
APS. The Auction Agent accepts such appointment and agrees to follow the
procedures set forth in this Section 2 and the Auction Procedures for the
purpose of determining the Applicable Rate for the APS for each Subsequent
Dividend Period thereof for which the Applicable Rate is to be determined by an
Auction.
(a) All of the provisions contained in the Auction Procedures and the
Settlement Procedures are incorporated herein by reference in their entirety and
shall be deemed to be a part hereof to the same extent as if such provisions
were fully set forth herein.
2.2 Preparation of Each Auction; Maintenance of Registry of Beneficial
Owners. (a) Not later than seven days prior to the first Auction Date for the
APS, the Fund shall provide the Auction Agent with a list of the Broker-Dealers
and a manually signed copy of each Broker-Dealer Agreement for execution by the
Auction Agent. Not later than seven days prior to any Auction Date for the APS
for which any change in such list of Broker-Dealers is to be effective, the Fund
will notify the Auction Agent in writing of such change and, if any such change
involves the addition of a Broker-Dealer to such list, shall cause to be
delivered to the Auction Agent for execution by the Auction Agent a
Broker-Dealer Agreement signed by such Broker-Dealer; provided, however, that if
the Fund proposes to designate any Special Dividend Period of the APS pursuant
to Section 4 of Part I of the APS Provisions, not later than 11:00 A.M.,
New
York City time, on the Business Day next preceding the Auction next preceding
the first day of such Special Dividend Period, upon the written request of the
Auction Agent the Fund shall provide the Auction Agent with a list of the
Broker-Dealers for the APS and a manually signed copy of each Broker-Dealer
Agreement or a new
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Schedule A to the Broker-Dealer Agreement (which Schedule A shall replace and
supersede any previous Schedule A to such Broker-Dealer Agreement) with each
Broker-Dealer. The Auction Agent and the Fund shall have entered into an
Agreement with each Broker-Dealer prior to the participation of any such
Broker-Dealer in any Auction.
(b) In the event that any Auction Date for the APS shall be changed
after the Auction Agent shall have given the notice referred to in clause (vi)
of paragraph (a) of the Settlement Procedures, or after the notice referred to
in Section 2.5(a) hereof, if applicable, the Auction Agent, by such means as the
Auction Agent deems practicable, shall give notice of such change to the
Broker-Dealers for the APS not later than the earlier of 9:15 A.M. on the new
Auction Date or 9:15 A.M. on the old Auction Date.
(c) (i) The Auction Agent shall maintain a registry of the beneficial
owners of APS who shall constitute Existing Holders of the APS for purposes of
Auctions and shall indicate thereon the identity of the respective Broker-Dealer
of each Existing Holder, if any, on whose behalf such Broker-Dealer submitted
the most recent Order in any Auction which resulted in such Existing Holder
continuing to hold or purchasing the APS. The Auction Agent shall keep such
registry current and accurate. The Fund shall provide or cause to be provided to
the Auction Agent at or prior to the Date of Original Issue of the APS a list of
the initial Existing Holders of APS, the number of shares purchased by each such
Existing Holder and the respective Broker-Dealer of each such Existing Holder or
the affiliate thereof through which each such Existing Holder purchased such
APS. The Auction Agent shall advise the Fund in writing whenever the number of
Existing Holders is 500 or more. The Auction Agent may rely upon, as conclusive
evidence of the identities of the Existing Holders of APS, (A) such list, (B)
the results of Auctions and (C) notices from any Existing Holder, the Agent
Member of any Existing Holder or the Broker-Dealer of any Existing Holder as
described in the first sentence of Section 2.2(c)(iii) hereof.
(ii) In the event of any partial redemption of the APS, the
Auction Agent shall, at least two Business Days prior to the
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next Auction, request the Agent Member of each Existing Holder of APS
to disclose to the Auction Agent (upon selection by such Agent Member
of the Existing Holders whose APS are to be redeemed) the number of
APS, if any, of such Existing Holder which are subject to such
redemption, provided the Auction Agent has been furnished with the
name and telephone number of a person or department at such Agent
Member from which it shall request such information. Upon any refusal
of an Agent Member to release such information, the Auction Agent
shall deliver to such Agent Member a facsimile copy of the Existing
Holder's Master Purchaser's Letter, which authorizes and instructs
such Agent Member to release such information to the Auction Agent. In
the absence of receiving any such information with respect to an
Existing Holder, from such Existing Holder's Agent Member or
otherwise, the Auction Agent may continue to treat such Existing
Holder as the beneficial owner of the number of APS shown in the
Auction Agent's registry.
(iii) The Auction Agent shall be required to register a transfer
of APS from an Existing Holder of such APS to another Person only if
such transfer is made to a Person that has delivered, or on whose
behalf has been delivered, a signed Master Purchaser's Letter to the
Auction Agent and if (A) such transfer is pursuant to an Auction or
(B) the Auction Agent has been notified in writing (I) in a notice
substantially in the form of Exhibit D to the Broker-Dealer Agreements
by such Existing Holder, the Agent Member of such Existing Holder or
the Broker-Dealer of such Existing Holder of such transfer or (II) in
a notice substantially in the form of Exhibit E to the Broker-Dealer
Agreements by the Broker-Dealer of any Person that purchased or sold
APS in an Auction of the failure of such APS to be transferred as a
result of such Auction. The Auction Agent is not required to accept
any such notice for an Auction unless it is received by the Auction
Agent by 3:00 P.M. on the Business Day preceding such Auction.
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(iv) The Auction Agent is not required to accept the Master
Purchaser's Letter of any Potential Holder who wishes to submit a Bid
for the first time in an Auction or of any Potential Holder or
Existing Holder who wishes to amend its Master Purchaser's Letter
unless such letter or amendment is received by the Auction Agent by
3:00 P.M. on the Business Day preceding such Auction.
(d) The Auction Agent may request the Broker-Dealers, as set forth in
the Broker-Dealer Agreements, to provide the Auction Agent with a list of their
respective customers that such Broker-Dealers believe are Existing Holders of
APS. The Auction Agent shall keep confidential such registry of Existing Holders
and shall not disclose the identities of the Existing Holders of such APS to any
Person other than the Fund and the Broker-Dealer that provided such information.
2.3 Information Concerning Rates. (a) The Applicable Percentage on the date
of this Agreement for APS is 110%. If there is any change in the credit rating
of APS by either of the rating agencies (or substitute or successor rating
agencies) referred to in the definition of "Applicable Percentage" resulting in
any change in the Applicable Percentage for APS after the date of this
Agreement, the Fund shall notify the Auction Agent in writing of such change in
the Applicable Percentage prior to 12:00 Noon on the Business Day prior to the
next Auction Date for the APS succeeding such change. If the Fund designates all
or a portion of any dividend on the APS to consist of net capital gains or other
income taxable for federal income tax purposes, it will indicate, in its notice
in the form of Exhibit K hereto to the Auction Agent pursuant to Section 2.6
hereof, the Applicable Percentage for the APS such series to be in effect for
the Auction Date on which the dividend rate for such dividend is to be fixed. In
determining the Maximum Rate for the APS on any Auction Date as set forth in
Section 2.3(b)(i) hereof, the Auction Agent shall be entitled to rely on the
last Applicable Percentage for APS of which it has most recently received notice
from the Fund (or, in the absence of such notice, the percentage set forth in
the first sentence of this paragraph (a)), except that if the Fund shall have
notified the Auction Agent of an Applicable Percentage to be in effect
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for an Auction Date in accordance with the preceding sentence, the Applicable
Percentage in effect for the next succeeding Auction Date of the APS shall be,
unless the Fund notifies the Auction Agent of a change in the Applicable
Percentage for such succeeding Auction Date pursuant to this Section 2.3(a), the
Applicable Percentage that was in effect on the first preceding Auction Date for
the APS with respect to which the dividend, the rate for which was fixed on such
Auction Date, did not include any net capital gains or other income taxable for
federal income tax purposes.
(b) (i) on each Auction Date for the APS, the Auction Agent shall
determine the Maximum Rate for such APS. The Maximum Rate for the APS on any
Auction Date shall be:
(A) in the case of any Auction Date which is not
the Auction Date immediately prior to the first day of any
proposed Special Dividend Period of more than 28 days designated
by the Fund pursuant to Section 4 of Part I of the APS
Provisions, the product of (1) the Reference Rate on such Auction
Date for the next Rate Period of the APS and (2) the Applicable
Percentage on such Auction Date, unless the APS has or had a
Special Dividend Period (other than a Special Dividend Period of
28 Rate Period Days or less) and an Auction at which Sufficient
Clearing Bids existed has not yet occurred for a Minimum Dividend
Period of the APS after such Special Dividend Period, in which
case the higher of:
(1) the dividend rate on the APS for the
then-ending Rate Period, and
(2) the product of (x) the higher of (I) the "AA"
Composite Commercial Paper Rate on such Auction Date for the
then-ending Rate Period of the APS, if such Rate Period is less than
one year, or the Treasury
8
Rate on such Auction Date for such Rate Period, if such Rate Period is
one year or greater and (II) the "AA" Composite Commercial Paper Rate
on such Auction Date for such Special Dividend Period of the APS, if
such Special Dividend Period is less than one year, or the Treasury
Rate on such Auction Date for such Special Dividend Period, if such
Special Dividend Period is one year or greater, and (y) the Applicable
Percentage on such Auction Date; or
(B) in the case of any Auction Date which is the
Auction Date immediately prior to the first day of any proposed
Special Dividend Period of more than 28 days designated by the
Fund pursuant to Section 4 of Part I of the APS Provisions, the
product of (1) the highest of (x) the Reference Rate on such
Auction Date for the then-ending Rate Period of the APS, if such
Rate Period is less than one year, or the Treasury Rate on such
Auction Date for such Rate Period, if such Rate Period is one
year or greater, (y) the Reference Rate on such Auction Date for
such Special Dividend Period of the APS for which the Auction is
being held, if such Special Dividend Period is less than one
year, or the Treasury Rate on such Auction Date for such Special
Dividend Period of the APS for which the Auction is being held,
if such Special Dividend Period is one year or greater, and (z)
the Reference Rate on such Auction Date for Minimum Dividend
Periods and (2) the Applicable Percentage on such Auction Date.
Not later than 9:30 A.M. on each Auction Date, the Auction Agent shall notify
the Fund and the Broker-Dealers of the Maximum Rate so determined and the
Reference Rate and Treasury Rate(s), as the case may be, used to make such
determination.
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(ii) From and after a Failure to Deposit by the Fund during any
Rate Period of the APS, until such failure is cured and a late charge,
if applicable, is paid, in accordance with subparagraph (c)(i) of
Section 2 of Part I of the APS Provisions, on the first day of each
Rate Period of the APS the Auction Agent shall determine the Treasury
Rate for such Rate Period, if such Rate Period is one year or greater,
and the Reference Rate for Minimum Dividend Periods and Rate Periods
that are less than one year. Not later than 9:30 A.M. on each such
first day, the Auction Agent shall notify the Fund of the applicable
Reference Rate and Treasury Rate.
(iii) If any Reference Rate or Treasury Rate, as the case may be,
is not quoted on an interest basis, the Auction Agent shall convert
the quoted rate to the interest equivalent thereof as set forth in the
definition of such rate in the APS Provisions if the rate obtained by
the Auction Agent is quoted on a discount basis, or if such rate is
quoted on a basis other than an interest or discount basis the Auction
Agent shall convert the quoted rate to an interest rate after
consultation with the Fund as to the method of such conversion.
(iv) If any "AA" Composite Commercial Paper Rate is to be based
on rates supplied by Commercial Paper Dealers and one or more of the
Commercial Paper Dealers shall not provide a quotation for the
determination of such "AA" Composite Commercial Paper Rate, the
Auction Agent shall immediately notify the Fund so that the Fund can
determine whether to select a Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers to provide the quotation or
quotations not being supplied by any Commercial Paper Dealer or
Commercial Paper Dealers. The Fund shall promptly advise the Auction
Agent of any such selection.
(v) If any Treasury Rate is to be based on rates supplied by U.S.
Government
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Securities Dealers and one or more of the U.S. Government Securities
Dealers shall not provide a quotation for the determination of such
Treasury Rate, the Auction Agent shall immediately notify the Fund so
that the Fund can determine whether to select a Substitute U.S.
Government Securities Dealer or Substitute U.S. Government Securities
Dealers to provide the quotation or quotations not being supplied by
any U.S. Government Securities Dealer or U.S. Government Securities
Dealers. The Fund shall promptly advise the Auction Agent of any such
selection.
(c) The greater of the maximum marginal regular federal individual
income tax rate applicable to ordinary income or the maximum marginal regular
federal corporate income tax rate (the "Highest Marginal Rate") on the date of
this Agreement is 34%. If there is any change in the Highest Marginal Rate, the
Fund shall notify the Auction Agent in writing of such change prior to 12:00
Noon on the Business Day prior to the next Auction Date for APS succeeding such
change. In determining the Maximum Rate for the APS on any Auction Date, the
Auction Agent shall be entitled to rely on the Highest Marginal Rate of which it
has most recently received notice from the Fund (or, in the absence of such
notice, the percentage set forth in the first sentence of this paragraph (c)).
2.4 Auction Schedule. The Auction Agent shall conduct Auctions in
accordance with the schedule set forth below. Such schedule may be changed by
the Auction Agent with the consent of the Fund, which consent shall not be
unreasonably withheld. The Auction Agent shall give written notice of any such
change to each Broker-Dealer. Such notice shall be given prior to the close of
business on the Business Day next preceding the first Auction Date on which any
such change shall be effective.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Fund and Broker-Dealers
of the applicable Maximum Rate and the Reference
Rate and Treasury Rate(s), as the
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case may be, used in determining such Maximum Rate
as set forth in Section 2.3(b)(i) hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information communicated
to it by Broker-Dealers as provided in Section
3(a) of the Auction Procedures. Submission
Deadline is 1:30 P.M.
Not earlier than 1:30 P.M. Auction Agent makes determinations pursuant to
Section 4(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Fund of results of Auction
as provided in Section 4(b) of the Auction
Procedures. Submitted Bids and Submitted Sell
orders are accepted and rejected and the APS
allocated as provided in Section 5 of the Auction
Procedures. Auction Agent gives notice of Auction
results as set forth in paragraph (a) of the
Settlement Procedures.
2.5 Designation of Special Dividend Period. (a) The APS Provisions will
provide that, subject to the Fund's option to designate a Special Dividend
Period as referred to in paragraph (b) of this Section 2.5, (i) each Rate Period
(other than the Initial Dividend Period) for the APS will consist of 7 days and
(ii) each Rate Period following a Rate Period that is other than a Minimum
Dividend Period will be 7 days. Not less than 10 nor more than 20 days prior to
the last day of any such Rate Period that is not a Minimum Dividend Period, (i)
the Fund shall deliver to the Auction Agent a notice of the Auction Date of the
next succeeding Auction for the APS in the form of Exhibit E hereto and (ii) the
Auction Agent shall deliver such notice by first-class mail,
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postage prepaid, to each Existing Holder of APS at the address specified in such
Existing Holder's Master Purchaser's Letter and to the Broker-Dealers for the
APS as promptly as practicable after its receipt of such notice from the Fund.
(b) Pursuant to the APS Provisions, the Fund may, at its option,
designate a Special Dividend Period for the APS in the manner described in
Section 4 of Part I of the APS Provisions.
(i) If the Fund proposes to designate any succeeding Subsequent
Dividend Period of the APS as a Special Dividend Period of more than 28
Rate Period Days, (A) the Fund shall deliver to the Auction Agent a notice
of such proposed Special Dividend Period in the form of Exhibit F hereto
not less than 20 nor more than 30 days prior to the first day of such
proposed Special Dividend Period and (B) the Auction Agent on behalf of the
Fund shall deliver such notice by first-class mail, postage prepaid, to
each Existing Holder of APS at the address specified in such Existing
Holder's Master Purchaser's Letter and to the Broker-Dealers for the APS as
promptly as practicable after its receipt of such notice from the Fund.
(ii) If the Board of Trustees determines to designate such
succeeding Subsequent Dividend Period as a Special Dividend Period, (A) the
Fund shall deliver to the Auction Agent a notice of such determination in
the form of Exhibit G hereto not later than 11:00 A.M. on the second
Business Day next preceding the first day of such proposed Special Dividend
Period and (B) the Auction Agent shall deliver such notice to the
Broker-Dealers for the APS not later than 3:00 P.M. on such second Business
Day.
(iii) If the Fund shall deliver to the Auction Agent a notice
stating that the Fund has determined not to exercise its option to
designate such succeeding Subsequent Dividend Period as a Special Dividend
Period with respect to which it has delivered a notice in
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the form of Exhibit F hereto not later than 11:00 A.M. on the second
Business Day next preceding the first day of such proposed Special Dividend
Period, or shall fail to timely deliver either such notice or a notice in
the form of Exhibit G hereto, the Auction Agent shall deliver a notice in
the form of Exhibit H hereto to the Broker-Dealers for the APS not later
than 3:00 P.M. on such second Business Day.
A change in the length of a Rate Period to a Rate Period of more than 28 Rate
Period Days shall not occur if (a) on the Auction Date next preceding the first
day of such Special Dividend Period Sufficient Clearing Bids shall not exist or
(b) a Failure to Deposit shall have occurred prior to such change with respect
to APS and shall not have been cured in accordance with the APS Provisions.
2.6 Allocation of Taxable Income. The Fund may, at its option, designate
all or a portion of any dividend on APS to consist of net capital gains or other
income taxable for federal income tax purposes by delivering to the Auction
Agent a notice in the form of Exhibit K hereto of such designation 15 days prior
to the Auction Date on which the Applicable Rate for such dividend is to be
fixed or by retroactively allocating income taxable for federal income tax
purposes as provided in the APS Provisions. The Auction Agent will deliver such
notice to the Broker-Dealers for the APS on the Business Day following its
receipt of such notice from the Fund. Within two Business Days after any Auction
Date involving the allocation of income taxable for federal income tax purposes,
or if the Fund retroactively allocates income taxable for federal income tax
purposes as provided in the APS Provisions, the Auction Agent shall notify each
Broker-Dealer for the APS as to the dollar amount per share of such taxable
income and income exempt from federal income taxation included in the related
dividend.
2.7 Failure to Deposit. (a) If:
(i) any Failure to Deposit shall have occurred with respect to
APS during any Rate Period thereof (other than any Special Dividend Period,
if such Special Dividend Period is one year or greater, or any Rate Period
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succeeding any Special Dividend Period, if such Special Dividend Period is
one year or greater, during which a Failure to Deposit occurred that has
not been cured); and
(ii) prior to 12:00 Noon,
New York City time, on the third
Business Day next succeeding the date on which such Failure to Deposit
occurred, such Failure to Deposit shall have been cured in accordance with
the next succeeding sentence and the Fund shall have paid to the Auction
Agent a late charge equal to the sum of (A) if such Failure to Deposit
consisted of the failure timely to pay to the Auction Agent the full amount
of dividends with respect to any Dividend Period on the APS, an amount
computed by multiplying (1) 200% of the Reference Rate (or Treasury Rate,
if applicable) for the Rate Period during which such Failure to Deposit
occurs on the Dividend Payment Date for such Dividend Period by (2) a
fraction, the numerator of which shall be the number of days for which such
Failure to Deposit has not been cured in accordance with the next
succeeding sentence (including the day such Failure to Deposit occurs and
excluding the day such Failure to Deposit is cured) and the denominator of
which shall be 365, and applying the rate obtained against the aggregate
liquidation preference of the outstanding APS and (B) if such Failure to
Deposit consisted of the failure timely to pay to the Auction Agent the
Optional Redemption Price or Mandatory Redemption Price, as the case may
be, of the APS, if any, for which Notice of Redemption has been given by
the Fund pursuant to paragraph (b) of Section 3 of Part I of the APS
Provisions, an amount computed by multiplying (x) 200% of the Reference
Rate (or Treasury Rate, if applicable) for the Rate Period during which
such Failure to Deposit occurs on the redemption date by (y) a fraction,
the numerator of which shall be the number of days for which such Failure
to Deposit was not cured in accordance with the next succeeding sentence
(including the day such Failure to Deposit occurs and excluding the day
such Failure to Deposit
15
was cured) and the denominator of which shall be 365, and applying the rate
obtained against the aggregate liquidation preference of the outstanding
APS to be redeemed,
then the Auction Agent shall deliver a notice in the form of Exhibit I hereto by
first-class mail, postage prepaid, to the Broker-Dealers for the APS not later
than one Business Day after its receipt of the payment from the Fund curing such
Failure to Deposit and such late charge. A Failure to Deposit with respect to
the APS shall have been cured (if such Failure to Deposit is not solely due to
the willful failure of the Fund to make the required payment to the Auction
Agent) with respect to any Rate Period thereof if, not later than 12:00 Noon,
New York City time, on the fourth Business Day preceding the Auction Date for
the Rate Period subsequent to such Rate Period, the Fund shall have paid to the
Auction Agent (A) all accumulated and unpaid dividends on APS and (B) without
duplication, the Optional Redemption Price or Mandatory Redemption Price, as the
case may be, for APS, if any, for which Notice of Redemption has been given by
the Fund pursuant to paragraph (b) of Section 3 of Part I of the APS Provisions.
(b) If:
(i) any Failure to Deposit shall have occurred with respect to
the APS during a Rate Period thereof (other than any Special Dividend
Period, if such Special Dividend Period is one year or greater, or any Rate
Period succeeding any Special Dividend Period, if such Special Dividend
Period is one year or greater, during which a Failure to Deposit occurred
that has not been cured), and, prior to 12:00 Noon on the third Business
Day next succeeding the date on which such Failure to Deposit occurred,
such Failure to Deposit shall not have been cured within the meaning of the
last sentence of Section 2.7(a) hereof and the Fund shall not have paid to
the Auction Agent the late charge described in such Section 2.7(a), but
such Failure to Deposit shall subsequently be so cured; or
16
(ii) any Failure to Deposit shall have occurred with respect to
the APS during a Special Dividend Period, if such Special Dividend Period
is one year or greater, or during any Rate Period succeeding any Special
Dividend Period, if such Special Dividend Period is one year or greater,
during which a Failure to Deposit occurred, and such Failure to Deposit
shall subsequently have been cured within the meaning of the last sentence
of Section 2.7(a) hereof,
then the Auction Agent shall deliver a notice in the form of Exhibit J hereto to
the Broker-Dealers for the APS not later than one Business Day after the receipt
of the payment from the Fund during such Failure to Deposit. Notwithstanding the
foregoing, the Auction Agent shall conduct an Auction on an Auction Date which
occurs simultaneously with the date of commencement of a Failure to Deposit.
2.8 Broker-Dealers. (a) Not later than 12:00 Noon on each Auction Date for
the APS, the Fund shall pay to the Auction Agent an amount in cash equal to the
aggregate fees payable to the Broker-Dealers for the APS pursuant to Section 2.8
of the Broker-Dealer Agreements for the APS. The Auction Agent shall apply such
moneys as set forth in Section 2.8 of each such Broker-Dealer Agreement.
(b) The Fund shall obtain the consent of the Auction Agent prior to
selecting any Person to act as a Broker-Dealer, which consent shall not be
unreasonably withheld.
(c) The Auction Agent shall terminate any Broker-Dealer Agreement as
set forth therein if so directed by the Fund, provided that at least one
BrokerDealer Agreement would be in effect for the APS after such termination.
(d) Subject to the Auction Agent's having consented to the selection
of the relevant Broker-Dealer pursuant to Section 2.8 (b) hereof, the Auction
Agent shall from time to time enter into such Broker-Dealer Agreements with one
or more Broker-Dealers as the Fund
17
shall request, and shall enter into such schedules to any such Broker-Dealer
Agreements as the Fund shall request, which schedules, among other things, shall
set forth that the Broker-Dealer Agreement relates to the APS.
2.9 Ownership of APS. The Fund shall notify the Auction Agent if the Fund
or any affiliate of the Fund acquires APS. Neither the Fund nor any affiliate of
the Fund shall submit any order in any Auction for APS, except as set forth in
the next sentence. Any Broker-Dealer that is an affiliate of the Fund may submit
orders in Auctions, but only if such Orders are not for its own account. For
purposes of this Section 2.9, a Broker-Dealer shall not be deemed to be an
affiliate of the Fund solely because one or more of the directors or executive
officers of such Broker-Dealer or of any Person controlled by, in control of or
under common control with such Broker-Dealer is also a trustee of the Fund. The
Auction Agent shall have no duty or liability with respect to enforcement of
this Section 2.9.
2.10 Access to and Maintenance of Auction Records. The Auction Agent shall,
upon the receipt of prior written notice from the Fund, afford to the Fund
access at reasonable times during normal business hours to all books, records,
documents and other information concerning the conduct and results of Auctions.
The Auction Agent shall maintain records relating to any Auction for a period of
six years after such Auction, and such records shall, in reasonable detail,
accurately and fairly reflect the actions taken by the Auction Agent hereunder.
2.11 Dividend and Redemption Price Deposit. The Fund shall pay to the
Auction Agent, not later than 12:00 noon,
New York City time, (A) on the
Business Day next preceding any Dividend Payment Date for the APS, in funds
available on such Dividend Payment Date in The City of
New York,
New York, the
full amount of any dividend (whether or not earned or declared) to be paid on
such Dividend Payment Date on any share of the APS and (B) on the Business Day
next preceding any redemption date, in funds available on such redemption date
for the APS in The City of
New York,
New York, the Redemption Price to be paid
on such redemption date for any share of the APS after notice of redemption is
given as set forth in the Certificate of Vote.
18
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent.
The Auction Agent, as dividend and redemption price disbursing agent, shall
pay to the Holders of APS (i) on each Dividend Payment Date for the APS,
dividends on APS, (ii) on any date fixed for redemption of the APS, the
Redemption Price of the APS called for redemption and (iii) any late charge
related to any payment of dividends or Redemption Price, in each case after
receipt of the necessary funds from the Fund with which to pay such dividends,
Redemption Price or late charge. The amount of dividends for any Rate Period for
the APS to be paid by the Auction Agent to the Holders of APS will be determined
by the Fund as set forth in Section 2 of Part I of the APS Provisions. The
Redemption Price of any shares to be paid by the Auction Agent to the Holders
will be determined by the Fund as set forth in Section 3 of Part I of the APS
Provisions. The Fund shall notify the Auction Agent in writing of a decision to
redeem APS at least five days prior to the date a notice of redemption is
required to be mailed to the Holders of APS to be redeemed by paragraph (b) of
Section 3 of Part I of the APS Provisions. Such notice by the Fund to the
Auction Agent shall contain the information required by paragraph (b) of Section
3 of Part I of the APS Provisions to be stated in the notice of redemption
required to be mailed by the Auction Agent to such Holders.
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Share Certificates. Upon the Date of Original Issue of the
APS, one certificate representing all of the APS issued on such date shall be
issued by the Fund and, at the request of the Fund, registered in the name of
Cede & Co. and countersigned by the Auction Agent.
4.2 Registration of Transfer of Shares. APS shall be registered solely in
the name of the Securities Depository or its nominee.
4.3 Removal of Legend on Restricted Shares. All requests for removal of
legends on APS indicating restrictions on transfer shall be accompanied by an
opinion of counsel stating that such legends may be removed and such shares
freely transferred, such opinion
19
to be delivered under cover of a letter from a Fund officer authorizing the
Auction Agent to remove the legend on the basis of said opinion.
4.4 Lost Share Certificates. The Auction Agent shall issue and register
replacement certificates for certificates represented to have been lost, stolen
or destroyed upon the fulfillment of such requirements as shall be deemed
appropriate by the Fund and the Auction Agent, subject at all times to
provisions of law, the By-Laws of the Fund governing such matters and
resolutions adopted by the Fund with respect to lost securities. The Auction
Agent may issue new certificates in exchange for and upon the cancellation of
mutilated certificates. Any request by the Fund to the Auction Agent to issue a
replacement or new certificate pursuant to this Section 4.4 shall be deemed to
be a representation and warranty by the Fund to the Auction Agent that such
issuance will comply with such provisions of law and the By-Laws and resolutions
of the Fund.
4.5 Disposition of Cancelled Certificates; Record Retention. The Auction
Agent shall retain all share certificates which have been cancelled in transfer
or exchange and all accompanying documentation in accordance with applicable
rules and regulations of the Securities and Exchange Commission for two calendar
years. Upon the expiration of this two-year period, the Auction Agent shall
deliver to the Fund the cancelled certificates and accompanying documentation.
The Fund also shall undertake to furnish to the Securities and Exchange
Commission and to the Board of Governors of the Federal Reserve System, upon
demand, at either the principal office or at any regional office, complete,
correct and current hard copies of any and all such records. Thereafter such
records shall not be destroyed by the Fund without the concurrence of the
Auction Agent.
4.6 Share Transfer Books. For so long as the Auction Agent, Bankers Trust
Company, is acting as the transfer agent for the APS pursuant to this Agreement,
it shall maintain a share transfer book containing a list of the Holders of APS,
the number of APS held by such Holders and the address of each Holder. The
Auction Agent shall record in such share transfer books any change of address of
a Holder upon notice by such Holder. In case of any request or demand for the
inspection of the share
20
transfer books of the Fund or any other books in the possession of the Auction
Agent, the Auction Agent will notify the Fund and secure instructions as to
permitting or refusing such inspection. The Auction Agent reserves the right,
however, to exhibit the share transfer books or other books to any Person in
case it is advised by its counsel that its failure to do so would be unlawful.
4.7 Return of Funds. Any funds deposited with the Auction Agent hereunder
by the Fund for any reason, including but not limited to redemption of APS, that
remain unpaid after ninety days shall be repaid to the Fund upon the written
request of the Fund, together with interest, if any, earned thereon.
5. Representations and Warranties of the Fund.
The Fund represents and warrants to the Auction Agent that:
(a) the Fund has been duly organized and is subsisting as a voluntary
association with transferable shares (commonly referred to as a business trust)
under the laws of The Commonwealth of Massachusetts and has all necessary power
and authority to execute and deliver this Agreement and to authorize, create and
issue the APS;
(b) this Agreement has been duly and validly authorized, executed and
delivered by the Fund and, assuming due authorization, execution and delivery by
the Auction Agent, constitutes the legal, valid and binding obligation of the
Fund subject, as to enforceability, to bankruptcy, insolvency, reorganization,
moratorium, receivership or similar laws, whether statutory or decisional,
relating to or affecting creditors' rights and to general equitable principles
(regardless of whether enforcement is sought in equity or at law);
(c) the form of the certificate evidencing APS complies with all
applicable laws of The Commonwealth of Massachusetts;
(d) APS, when issued, delivered and paid for on the Date of Original
Issue as contemplated by the Underwriting Agreement, will have been duly
authorized,
21
validly issued, fully paid and nonassessable, except as provided under
Massachusetts law;
(e) assuming the Underwriters comply with their obligations under the
Underwriting Agreement and that the purchasers of the APS comply with their
obligations in the Master Purchaser's Letter, no consent, authorization or order
of, or filing or registration with, any court, governmental agency or official
(except such as have been obtained and such as may be required under the
Securities Act of 1933, as amended, or the Investment Company Act of 1940, as
amended, or under the blue sky or state securities laws) is required in
connection with the execution and delivery of this Agreement or the issuance of
APS; and
(f) the issuance and sale of the APS, the execution, delivery and
performance of this Agreement, compliance by the Fund with all provisions
hereof, and the consummation of the transactions contemplated hereby or by the
Underwriting Agreement or the Broker-Dealer Agreements, will not conflict with,
constitute a breach of any of the terms or provisions of, or a default under, or
result in the creation or imposition of any material lien, charge or encumbrance
upon any of the assets of the Fund pursuant to the terms of any agreement,
indenture or instrument to which the Fund is a party or by which the Fund is
bound, or result in a violation of the Declaration of Trust, APS Provisions or
By-Laws of the Fund or of any order, rule or regulation of any court or
governmental agency having jurisdiction over the Fund or its property which
conflict, breach, default, lien or violation, individually or in the aggregate,
would have a material adverse effect on the business, financial position or
results of operations of the Fund.
6. The Auction Agent.
6.1 Duties and Responsibilities. (a) The Auction Agent is acting solely as
agent for the Fund hereunder and owes no fiduciary duties to any other Person by
reason of this Agreement.
(b) The Auction Agent undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement and the Broker-Dealer
22
Agreements, and no implied covenants or obligations shall be read into this
Agreement against the Auction Agent.
(c) In the absence of bad faith or gross negligence on its part, the
Auction Agent shall not be liable for any action taken, suffered, or omitted or
for any error of judgment made by it in the performance of its duties under this
Agreement except that the Auction Agent shall be liable for any error of
judgment made in good faith if the Auction Agent shall have been grossly
negligent in ascertaining the pertinent facts.
(d) Any funds deposited with the Auction Agent hereunder by the Fund
for any reason, including the payment of dividends or the redemption of APS,
that remain with the Auction Agent after 90 days shall be repaid to the Fund
upon the written request of the Fund, together with interest, if any, earned
thereon.
6.2 Rights of the Auction Agent. (a) The Auction Agent may rely and shall
be protected in acting or refraining from acting upon any communication
authorized hereby and upon any written instruction, notice, request, direction,
consent, report, certificate, share certificate or other instrument, paper or
document believed by it to be genuine. The Auction Agent shall not be liable for
acting upon any telephone communication authorized hereby which the Auction
Agent believes in good faith to have been given by the Fund or by any
Broker-Dealer. The Auction Agent may record telephone communications with the
Fund or with any Broker-Dealer.
(b) The Auction Agent may consult with counsel reasonably acceptable
to the Fund and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend or risk
its own funds or otherwise incur or become exposed to financial liability in the
performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys and shall not be
23
responsible for any misconduct on the part of any agent or attorney appointed by
it with due care hereunder except as set forth above in Section 6.1(c).
6.3 Auction Agent's Disclaimer. The Auction Agent makes no representation
as to the validity or adequacy of this Agreement (except as to the Auction
Agent's duties hereunder and as to the due authorization, execution and delivery
of this Agreement), the Broker-Dealer Agreements (except as to the Auction
Agent's duties thereunder) or the APS.
6.4 Compensation, Expenses and Indemnification. (a) The Fund shall pay the
Auction Agent from time to time reasonable compensation for all services
rendered by it under this Agreement and the Broker-Dealer Agreements in such
amounts as may be agreed to by the Fund and the Auction Agent from time to time.
(b) The Fund shall reimburse the Auction Agent upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Auction Agent in accordance with any provision of this Agreement and the
Broker-Dealer Agreements (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any expense or disbursement
attributable to its gross negligence or bad faith.
(c) The Fund shall indemnify the Auction Agent for and hold it
harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection with its
agency under this Agreement and the Broker-Dealer Agreements, including the
costs and expenses of defending itself against any claim or liability in
connection with its exercise or performance of its duties hereunder and
thereunder for which indemnification is provided by this subsection.
7. Miscellaneous.
7.1 Term of Agreement. (a) The term of this Agreement is unlimited unless
it shall be terminated as provided in this Section 7.1. The Fund may terminate
this Agreement any time by so notifying the Auction Agent in writing, provided
that the Fund has entered into an agreement in substantially the form of this
Agreement
24
with a successor auction agent. The Auction Agent may terminate this Agreement
upon written notice to the Fund, such termination to be effective on the earlier
of (i) the date specified in such notice which shall not be earlier than 90 days
after the giving of such notice or (ii) the date on which a successor trust
company is appointed by the Fund pursuant to an agreement containing
substantially the same terms and conditions as this Agreement.
(b) Except as otherwise provided in this paragraph (b), the respective
rights and duties of the Fund and the Auction Agent under this Agreement shall
cease upon termination of this Agreement. The Fund's obligations under Section
6.4 hereof and its representations and warranties contained in Section 5 hereof
and the Auction Agent's obligations and liabilities under Sections 2.10 and 4.5
hereof shall survive the termination hereof. Upon termination of this Agreement,
the Auction Agent shall, at the Fund's request, promptly deliver to the Fund
copies of all books and records maintained by it in connection with its duties
hereunder.
7.2 Communications. Except for (a) communications authorized to be by
telephone pursuant to this Agreement or the Auction Procedures and (b)
communications in connection with Auctions (other than those expressly required
to be in writing) and unless otherwise specified by the terms of this Agreement
all notices, requests and other communications to any party hereunder shall be
in writing (including telecopy or similar writing) given to such person at its
address or telecopy number set forth below:
If to the Company, Van Xxxxxx Xxxxxxx
addressed: California Value
Municipal Income Trust
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
25
With a copy sent to:
Xxxxxx X. XxXxxxxxx
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to the Auction Agent, Bankers Trust Company
addressed: Corporate Trust and Agency Group
Four Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Auction Rate Securities
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
or to such other address as the party to whom the communication is addressed
shall have previously communicated to the other party. Communications shall be
given on behalf of the Fund by a Fund Officer and on behalf of the Auction Agent
by an Authorized Officer. Communications shall be effective when received at the
proper address.
7.3 Entire Agreement. This Agreement contains the entire agreement among
the parties relating to the subject matter hereof, and there are no other
representations, endorsements, promises, agreements or understandings, oral,
written or inferred, between the parties.
7.4 Benefits. Nothing herein, express or implied, shall give to any Person,
other than the Fund, the Auction Agent and their respective successors and
assigns, any benefit of any legal or equitable right, remedy or claim hereunder.
7.5 Amendment; Waiver. (a) This Agreement shall not be deemed or construed
to be modified, amended, rescinded, cancelled or waived, in whole or in part,
except by a written instrument signed by a duly authorized representative of the
party to be charged. The Fund shall notify the Auction Agent and each
Broker-Dealer of any change in the Fund's Declaration of Trust, as amended and
26
restated as of the date hereof, prior to the effective date of any such change.
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such rights or remedies with respect to any
subsequent breach.
7.6 Successors and Assigns. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by, the respective successors of each of the
Fund and the Auction Agent.
7.7 Limitation of Liability. Pursuant to the provisions of Article V,
Section 5.5 of the Fund's Declaration of Trust, as amended or restated as of the
date hereof, this Agreement is entered into by the trustees of the Fund not
individually, but as trustees under such Declaration of Trust and the
obligations of the Fund hereunder are not binding upon any such trustees or
shareholders of the Fund, individually, but bind only the trust estate.
7.8 Severability. If any clause, provision or section hereof shall be ruled
invalid or unenforceable by any court of competent jurisdiction, the invalidity
or unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.9 Execution in Counterparts. This Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
7.10 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
27
IN WITNESS WHEREOF, the parties hereto have caused this
Auction Agency
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the date first above written.
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
By /s/ Xxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
& Secretary
BANKERS TRUST COMPANY
By /s/ Xxxxxx Xxxxxx
--------------------------------
Name: XXXXXX XXXXXX
Title: ASSISTANT TREASURER
28
EXHIBITS
EXHIBIT A - Form of Broker-Dealer Agreement
EXHIBIT B - Form of Master Purchaser's Letter
EXHIBIT C - Settlement Procedures
EXHIBIT D - Form of APS Provisions
EXHIBIT E - Form of Notice of Auction Dates
EXHIBIT F - Form of Notice of Proposed Change of Length of Rate Period
EXHIBIT G - Form of Notice of Change of Length of Rate Period
EXHIBIT H - Form of Notice of Determination Not to Change Length of Rate Period
EXHIBIT I - Form of Notice of Cure of Failure to Deposit
EXHIBIT J - Form of Notice of Subsequent Cure of Failure to Deposit
EXHIBIT K - Form of Notice of Capital Gain and Taxable Ordinary Income Dividend
29
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
30
EXHIBIT B
FORM OF
MASTER PURCHASER'S LETTER
31
EXHIBIT C
SETTLEMENT PROCEDURES
32
EXHIBIT D
AUCTION PROCEDURES
00
XXXXXXX X
XXX XXXXXX XXXXXXX CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
NOTICE OF AUCTION DATE FOR
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that the Auction Date of the next Auction for the
APS of VAN XXXXXX XXXXXXX CALIFORNIA VALUE MUNICIPAL INCOME TRUST (the "Fund")
is scheduled to be _______________ and the next Dividend Payment Date for the
Fund's APS will be __________.
[A Failure to Deposit with respect to the APS currently exists. If such
Failure to Deposit is not cured prior to 12:00 Noon on the fourth Business Day
prior to the next scheduled Auction Date of the APS as defined, the next Auction
will not be held. Notice of the next Auction for the APS will be delivered when
such Failure to Deposit is cured.(1)]
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
--------------------
(1) Include this language if a Failure to Deposit exists.
00
XXXXXXX X
XXX XXXXXX XXXXXXX CALIFORNIA
VALUE MUNICIPAL INCOME TRUST
NOTICE OF PROPOSED CHANGE OF
LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX CALIFORNIA VALUE MUNICIPAL
INCOME TRUST (the "Fund") may exercise its option to designate the Rate Period
of its APS commencing [the first day of the proposed Special Dividend Period] as
a Special Dividend Period.
By 11:00 A.M. on the second Business Day next preceding the first day of
such proposed Special Dividend Period, the Fund will notify Bankers Trust
Company of either (a) its determination to exercise such option, designating the
length of such Special Dividend Period and the terms of the Specific Redemption
Provisions, if any, or (b) its determination not to exercise such option.
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
Dated:_____________________
00
XXXXXXX X
XXX XXXXXX XXXXXXX CALIFORNIA
VALUE MUNICIPAL INCOME TRUST
NOTICE OF CHANGE OF LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX CALIFORNIA VALUE MUNICIPAL
INCOME TRUST (the "Fund") has determined to designate the Rate Period of its APS
commencing on [the first day of the Special Dividend Period] as a Special
Dividend Period.
The Special Dividend Period will be ___ [days] [year[s]].
The Auction Date for the Special Dividend Period is [the Business Day next
preceding the first day of such Special Dividend Period].
[Specific Redemption Provisions, if applicable.]
[As a result of the Special Dividend Period designation, the amount of
dividends payable on APS during the Special Dividend Period will be based on a
360-day year] [include if Rate Period is greater than 28 Rate Period Days].
The Special Dividend Period shall not commence if (a) on such Auction Date
Sufficient Clearing Bids shall not exist or (b) if a Failure to Deposit shall
have occurred prior to the first day thereof with respect to the APS.
The scheduled Dividend Payment Dates for APS during such Special Dividend
Period will be [__________].
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
Dated:_____________________
00
XXXXXXX X
XXX XXXXXX XXXXXXX XXXXXXXXXX
VALUE MUNICIPAL INCOME TRUST
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF RATE PERIOD OF
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX CALIFORNIA VALUE MUNICIPAL
INCOME TRUST (the "Fund") has determined not to exercise its option to designate
a Special Dividend Period of its APS and the next succeeding Dividend Period
will be a Minimum Rate Period of __ days.
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
Dated:_____________________
37
EXHIBIT I
VAN XXXXXX XXXXXXX CALIFORNIA
VALUE MUNICIPAL INCOME TRUST
NOTICE OF CURE OF
FAILURE TO DEPOSIT ON
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX CALIFORNIA VALUE MUNICIPAL
INCOME TRUST (the "Fund") has cured its Failure to Deposit with respect to its
APS. The dividend rate on the shares of APS for the current Rate Period is
__________% per annum, the Dividend Payment Date[s] for the current Rate Period
is scheduled to be __________ and the next Auction Date is scheduled to be
__________.
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
Dated:_____________________
38
EXHIBIT J
VAN XXXXXX XXXXXXX CALIFORNIA
VALUE MUNICIPAL INCOME TRUST
NOTICE OF SUBSEQUENT CURE OF
FAILURE TO DEPOSIT ON
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that VAN XXXXXX XXXXXXX CALIFORNIA VALUE MUNICIPAL
INCOME TRUST (the "Fund") has cured its Failure to Deposit with respect to its
APS. The next Auction Date for the APS is scheduled to be on __________.
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
Dated:_____________________
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EXHIBIT K
VAN XXXXXX XXXXXXX CALIFORNIA
VALUE MUNICIPAL INCOME TRUST
NOTICE OF
[CAPITAL GAINS] [AND] [TAXABLE ORDINARY INCOME](1)
DIVIDEND FOR
AUCTION PREFERRED SHARES
("APS")
NOTICE IS HEREBY GIVEN that the amount of the dividend payable on
__________ for the APS of VAN XXXXXX XXXXXXX CALIFORNIA VALUE MUNICIPAL INCOME
TRUST (the "Fund") will be determined by the Auction to be held on
_______________. Up to [$ __A__](2) [$__B ](3) per share of the dividend payable
on such date as determined by such Auction will consist of [capital gains](2)
[ordinary income taxable for federal income tax purposes](3). If the dividend
amount payable on such date as determined by such Auction is less than [$ A ](2)
[$ B ](3) per share, the
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(1) Include language with respect to capital gains, taxable ordinary income or
both, depending on the character of the designation to be made with respect
to the dividend(s).
(2) Include bracketed material if a portion of the dividend will be designated
capital gains.
(3) Include bracketed material if a portion of the dividend will be designated
ordinary income taxable for federal income tax purposes and no portion of
the dividend will be designated capital gains.
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entire amount of the dividend will consist of [capital gains](2) [ordinary
income taxable for federal income tax purposes](3). [To the extent such dividend
amount exceeds [$ A ] per share, any excess up to [$ B ] per share will consist
of ordinary income taxable for federal income tax purposes].(4) Accordingly, the
aforementioned composition of the dividend payable on _______________ should be
considered in determining Orders to be submitted with respect to the Auction to
be held on _______________. The Applicable Percentage in effect for such Auction
will be __%.
VAN XXXXXX XXXXXXX
CALIFORNIA VALUE
MUNICIPAL INCOME TRUST
------------------------
(4) Include bracketed material if a portion of the dividend will be designated
capital gains and a portion will be designated ordinary income taxable for
Federal income tax purposes.
(A) = the maximum amount of capital gains allocated to the APS to be included
in such dividend, divided by the number of shares of APS.
(B) = the maximum amount of ordinary income taxable for federal income tax
purposes allocated to the APS to be included in such dividend, divided by
the number of shares in such series.
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