SECTION
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HEADING
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PAGE
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ARTICLE I
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DEFINITIONS |
1
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1.1
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Incorporation of Certain Definitions by Reference and Interpretation
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6
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ARTICLE II
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PURCHASE AND TRANSFERS, COSTS AND EXPENSES; ADDITIONAL FEE |
6
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2.1
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Purchase and Transfer of the VMTP Shares
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6
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2.2
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Fees
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8
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2.3
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Operating Expenses
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8
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2.4
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Additional Fee for Failure to Comply with Reporting Requirement or Registration Rights Failure
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8
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ARTICLE III
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CONDITIONS TO EFFECTIVE DATE |
9
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ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF THE ISSUER |
10
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4.1
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Existence
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10
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4.2
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Authorization; Contravention
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11
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4.3
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Binding Effect
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11
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4.4
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Financial Information
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11
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4.5
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Litigation
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11
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4.6
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Consents
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12
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4.7
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Incorporation of Additional Representations and Warranties
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12
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4.8
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Complete and Correct Information
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12
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4.9
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1940 Act Registration
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13
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4.10
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Effective Leverage Ratio; Asset Coverage
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12
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4.11
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Credit Quality
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13
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4.12
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Due Diligence
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13
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4.13
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Certain Fees
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13
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4.14
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Eligible Assets
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14
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4.15
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Capitalization
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13
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ARTICLE V
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REPRESENTATIONS AND WARRANTIES OF THE PURCHASER |
13
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5.1
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Existence
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14
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5.2
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Authorization; Contravention
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14
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5.3
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Binding Effect
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14
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5.4
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Own Account
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14
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5.5
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Litigation
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15
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5.6
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Consents
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15
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5.7
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Purchaser Status
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15
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5.8
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Certain Transactions
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15
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5.9
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Certain Fees
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15
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5.10
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Experience of the Purchaser
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15
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5.11
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Due Diligence
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16
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5.12
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Access to Information
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16
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ARTICLE VI
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COVENANTS OF THE ISSUER |
16
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6.1
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Information
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16
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6.2
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No Amendment or Certain Other Actions Without Consent of the Purchaser
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19
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6.3
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Maintenance of Existence
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19
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6.4
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Tax Status of the Issuer
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19
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6.5
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Payment Obligations
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19
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6.6
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Compliance With Law
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20
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6.7
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Maintenance of Approvals: Filings, Etc.
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20
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6.8
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Inspection Rights
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20
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6.9
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Litigation, Etc.
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20
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6.10
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1940 Act Registration
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20
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6.11
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Credit Quality
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21
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6.12
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Maintenance of Effective Leverage Ratio
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21
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6.13
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Redemption and Paying Agent
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21
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6.14
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Cooperation in the Sale of the VMTP Shares
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21
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6.15
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Use of Proceeds
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22
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6.16
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Securities Depository
|
22
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6.17
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Future Agreements
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22
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6.18
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Eligible Assets
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22
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ARTICLE VII
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MISCELLANEOUS |
23
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7.1
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Notices
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23
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7.2
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No Waivers
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23
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7.3
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Expenses and Indemnification
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24
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7.4
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Amendments and Waivers
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26
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7.5
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Successors and Assigns
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27
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7.6
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Term of this Agreement
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27
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7.7
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Governing Law
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28
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7.8
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Waiver of Jury Trial
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28
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7.9
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Counterparts
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28
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7.10
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Beneficiaries
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28
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7.11
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Entire Agreement
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28
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7.12
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Relationship to the Articles Supplementary
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28
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7.13
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Confidentiality
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29
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7.14
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Severability
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29
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7.15
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Consent Rights of the Majority Participants to Certain Actions
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30
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SCHEDULE 1
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Schedule 1-1
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EXHIBIT A
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FORMS OF OPINIONS OF COUNSEL FOR THE ISSUER
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A-1
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EXHIBIT A-1
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FORM OF CORPORATE AND 1940 ACT OPINION
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A-1-1
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EXHIBIT A-2
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FORM OF TAX OPINION
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A-2-1
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EXHIBIT A-3
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FORM OF LOCAL COUNSEL OPINION
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A-3-1
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EXHIBIT A-4
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FORM OF NEGATIVE ASSURANCE LETTER
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A-4-1
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EXHIBIT B
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ELIGIBLE ASSETS
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B-1
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EXHIBIT C
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TRANSFEREE CERTIFICATE
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C-1
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EXHIBIT D
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ADDITIONAL REPRESENTATIONS AND WARRANTIES
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D-1
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EXHIBIT E
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CAPITALIZATION
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E-1
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1.1 |
Incorporation of Certain Definitions by Reference and Interpretation
|
2.1 |
Purchase and Transfer of the VMTP Shares
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(a) |
On the Effective Date, BAPFC will acquire 1,209 VMTP Shares sold on initial issuance in a transaction (which, based upon the representations of the Issuer and the Purchaser herein, is exempt from registration under the Securities Act)
by payment of the Purchase Price in immediately available funds to the Issuer through the account of its agent at the Securities Depository.
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(b) |
The Purchaser agrees that it may offer, sell, transfer or otherwise dispose of the VMTP Shares in compliance with the Securities Act and applicable state securities laws only in whole shares and only (i)(1) to Persons that it
reasonably believes are QIBs that are: (a) registered closed-end management investment companies, the shares of which are traded on a national securities exchange and registered open-end management investment companies, in each case, that
invest primarily in municipal obligations (each, a "Registered Investment Company"); (b) banks or entities that are 100% direct or indirect subsidiaries of banks' publicly traded parent holding
companies (collectively, "Banks"); or (c) insurance 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, (2) to tender option bond trusts (or similar vehicles used for providing financing for municipal obligations and municipal closed-end fund
preferred shares) in which all investors are Persons that the Purchaser reasonably believes are QIBs that are Registered Investment Companies, Banks or insurance companies (or, in the case of a tender option bond trust (or similar
vehicles used for providing financing for municipal obligations and municipal closed-end fund preferred shares) in which the Holder or an affiliate of the Holder retains a residual interest), or (3) to other investors with the prior
written consent of the Issuer and (ii) unless the prior written consent of each of the Issuer and the Majority Participants has been obtained, not to BNYM Persons if such BNYM Persons would, after such sale and transfer, own more than 20%
of the Outstanding VMTP Shares. Any transfer in violation of the foregoing restrictions shall be void ab initio. In the event that the Purchaser intends to transfer the VMTP Shares to a Person
other than an affiliate or a tender option bond trust (or similar vehicles used for providing financing for municipal obligations and municipal closed-end fund preferred shares), the Purchaser shall provide written notice to the Fund,
which notice shall be signed by the Purchaser, indicating the Purchaser's intent to transfer the VMTP Shares and the name of the intended transferee at least three (3) Business Days in advance of the transfer; provided, that any failure
to deliver such advance notice shall not void any such transfer. In connection with any transfer of the VMTP Shares, each transferee will be required to deliver to the Issuer a transferee certificate set forth as Exhibit C to this
Agreement no later than the date of the transfer (excluding a tender option bond trust (or similar vehicles used for providing financing for municipal obligations and municipal closed-end fund preferred shares) in which the Purchaser
retains a residual interest, which will not be required to deliver a transferee certificate). The foregoing restrictions on transfer shall not apply to any VMTP Shares registered under the Securities Act pursuant to the Registration
Rights Agreement or any subsequent transfer of such registered VMTP Shares thereafter.
|
(c) |
In the event that the Purchaser transfers, in accordance with Section 2.1(b) of this Agreement, VMTP Shares to a tender option bond trust (or similar vehicles used for providing financing for municipal obligations and municipal
closed-end fund preferred shares) in which the Purchaser retains a residual interest, for so long as no event has occurred that results in the termination of such tender option bond trust (or similar vehicles used for providing financing
for municipal obligations and municipal closed-end fund preferred shares), for purposes of each of the Applicable Sections (as defined below) that requires, permits or provides for (i) notice or the delivery of information to or (ii)
voting of the VMTP Shares or the giving of any consent by or (iii) payment of fees, in each case, to the Purchaser or the Majority Participants, the Purchaser, and not such tender option bond trust (or similar vehicles used for providing
financing for municipal obligations and municipal closed-end fund preferred shares), shall be deemed to be the actual owner of such VMTP Shares. For the avoidance of doubt, the deemed ownership provided for in this Section 2.1(c) shall
be limited to the following sections of this Agreement: 2.1(b), 2.4, 6.1, 6.2, 6.8, 6.9, 6.12, 6.14, 6.17, 7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.8, 7.10, 7.12 and 7.15 (collectively, the "Applicable Sections").
The deemed ownership provided for in this Section 2.1(c) shall last until the earliest of (A) the termination of such tender option bond trust (or similar vehicles used for providing financing for municipal obligations and municipal
closed-end fund preferred shares); (B) the agreement by the Issuer and the Purchaser to terminate such deemed ownership; and (C) with respect to some or all of the Applicable Sections, the good-faith determination by the Purchaser that
such deemed ownership has adverse tax, legal or other regulatory consequences or is otherwise no longer consistent with applicable law.
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(d) |
Anything herein to the contrary notwithstanding, except with respect to the deemed ownership provided for above in respect of the Applicable Sections, the tender option bond trust (or similar vehicles used for providing financing for
municipal obligations and municipal closed-end fund preferred shares) to which VMTP Shares are transferred and each of the beneficial owners thereof shall retain all of its other rights in respect of the Issuer and the VMTP Shares
pursuant to this Agreement and the Articles Supplementary or under law, including, for the avoidance of doubt, its rights under any of the Applicable Sections to the extent necessary for the protection or exercise of such other rights
retained pursuant to this Section 2.1(d) of this Agreement or that are otherwise applicable as a result of the exercise of such other rights.
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2.2 |
Fees
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(a) |
Within thirty (30) days of invoicing, the Issuer shall pay the reasonable fees and expenses of the Purchaser's single outside counsel in connection with (i) the negotiation and documentation of the transactions contemplated by this
Agreement and (ii) the initial organization and set up of a voting trust to be formed with respect to the VMTP Shares.
|
(b) |
The Issuer shall pay the fees and expenses incurred by the Purchaser in connection with both the initial set up and organization and the annual maintenance of the voting trust to be formed with respect of the VMTP Shares, such amount
not to exceed $15,000 on an annual basis.
|
(c) |
With respect to the fees and expenses described in subsection (b) of this Section 2.2, the Issuer will pay such fees and expenses within thirty (30) days of receipt of the associated invoice. For avoidance of doubt, the Issuer's
responsibilities with respect to the fees and expenses described in subsections (a)(ii) and (b) are exclusive of each other.
|
2.3 |
Operating Expenses
|
2.4 |
Additional Fee for Failure to Comply with Reporting Requirement or Registration Rights Failure
|
(a) |
For so long as the Purchaser is a Holder or Designated Owner of any Outstanding VMTP Shares, if the Issuer fails to comply with the reporting requirements set forth in Sections 6.1(o) and 6.1(p) of this Agreement (except as a result of
a Force Majeure Exception) and such failure is not cured within seven (7) Business Days after written notification to the Issuer by the Purchaser of such failure (a "Reporting Failure") or a Registration Rights Failure occurs, and such failure is not cured within seven (7) Business Days after written notification to the Issuer by the Purchaser of such failure, the Issuer shall pay to
the Purchaser on the Dividend Payment Date occurring in the month immediately following a month in which either such Reporting Failure or Registration Rights Failure (either, a "Failure") continues
a fee, calculated in respect of each Week (or portion thereof) during such month in respect of a Failure and beginning on the date of such Failure, equal to the product of (i) the Fee Rate, times (ii) the aggregate average daily
Liquidation Preference of the VMTP Shares held by the Purchaser during such Week or portion thereof, times (iii) the quotient of the number of days in such Week or portion thereof divided by the number of calendar days in the year in
which such Week or portion thereof occurs. If such fee is an "other distribution" pursuant to the Articles Supplementary, such fee shall be paid pursuant to and in accordance with the Articles
Supplementary, including Section 2.2(c) of the Articles Supplementary. Notwithstanding the foregoing, in no event shall (i) the fee payable pursuant to this Section 2.4 hereunder for any
Week plus the Applicable Spread on the VMTP Shares for such Week exceed an amount (exclusive of any Additional Amount Payment) equal to the product of (x) 15%, times (y) the aggregate average daily Liquidation Preference of the VMTP
Shares held by the Purchaser during such Week or portion thereof, times (z) the quotient of the number of days in such Week or portion thereof divided by the number of calendar days in the year in which such Week or portion thereof
occurs; (ii) the fee payable pursuant to this Section 2.4 for any Week plus the amount of dividends payable at the Dividend Rate for the VMTP Shares for such Week exceed an amount equal to the product of (aa) 15%, times (bb) the aggregate
average daily Liquidation Preference of the VMTP Shares held by the Purchaser during such Week or portion thereof, times (cc) the quotient of the number of days in such Week or portion thereof divided by the number of calendar days in the
year in which such Week or portion thereof occurs; or (iii) the Issuer be required to calculate or pay a fee in respect of more than one Failure in any Week.
|
(b) |
Notwithstanding the foregoing, in no event shall (i) the fee payable pursuant to this Section 2.4 for any day plus the Dividend Rate for the VMTP Shares for such day exceed 15%, (ii) the Issuer be required to calculate and pay a fee,
in respect of more than one Failure in any Week, or (iii) the fee payable pursuant to this Section 2.4 be payable with respect to any portion of a Week in which such Failure is not continuing.
|
(a) |
this Agreement shall have been duly executed and delivered by the parties hereto;
|
(b) |
the VMTP Shares shall have a long-term issue credit rating of at least AA (or its equivalent) from at least one NRSRO, expected to be S&P, on the Effective Date;
|
(c) |
receipt by the Purchaser of executed originals, or copies certified by a duly authorized officer of the Issuer 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 the Purchaser of opinions of counsel for the Issuer, substantially to the effect of Exhibit A;
|
(e) |
except as otherwise disclosed to the Purchaser, there shall not be any pending or overtly threatened material litigation against the Issuer (unless such pending or threatened litigation has been determined by the Purchaser to be
acceptable);
|
(f) |
the fees and expenses and all other amounts payable on the Effective Date pursuant to Section 2.2(a) hereof shall have been paid;
|
(g) |
the Purchaser, 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 the Purchaser 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 the Purchaser such information and copies of documents, approvals (if any) and records certified, where appropriate, of corporate proceedings as the Purchaser may have requested relating to the
Issuer's entering into and performing this Agreement and the other Related Documents to which the Issuer is a party, and the transactions contemplated hereby and thereby.
|
4.1 |
Existence
|
4.2 |
Authorization; Contravention
|
4.3 |
Binding Effect
|
4.4 |
Financial Information
|
4.5 |
Litigation
|
4.6 |
Consents
|
4.7 |
Incorporation of Additional Representations and Warranties
|
4.8 |
Complete and Correct Information
|
4.9 |
1940 Act Registration
|
4.10 |
Effective Leverage Ratio; Asset Coverage
|
4.11 |
Credit Quality
|
4.12 |
Due Diligence
|
4.13 |
Certain Fees
|
4.14 |
Eligible Assets
|
4.15 |
Capitalization
|
5.1 |
Existence
|
5.2 |
Authorization; Contravention
|
5.3 |
Binding Effect
|
5.4 |
Own Account
|
5.5 |
Litigation
|
5.6 |
Consents
|
5.7 |
Purchaser Status
|
5.8 |
Certain Transactions
|
5.9 |
Certain Fees
|
5.10 |
Experience of the Purchaser
|
5.11 |
Due Diligence
|
5.12 |
Access to Information
|
6.1 |
Information
|
(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 Issuer, which delivery may be made by notice of the
electronic availability of any such document on a public website;
|
(b) |
notice of any change in (including being put on Credit Watch or Watchlist), or suspension or termination of, the rating on the VMTP Shares by any Rating Agency (and any corresponding change in the Rating Agency Guidelines applicable to
the VMTP Shares associated with any such change in the rating from any Rating Agency) or any change of a Rating Agency rating the VMTP Shares as promptly as practicable upon the occurrence thereof;
|
(c) |
notice of any redemption or other repurchase of any or all of the 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 (other than the Board of Directors) whose approval is required for such amendment and in any event not less than
ten (10) Business Days prior to the effectiveness of any proposed amendment and copies of all actual amendments thereto within ten (10) 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 VMTP Shares that remains uncured for more than three (3) Business Days as soon as reasonably practicable, but in no event later than one (1) Business Day after
expiration of the foregoing grace period;
|
(f) |
notice of the failure to make any deposit provided for under Section 2.4(d) of the Articles Supplementary in respect of a properly noticed redemption as soon as reasonably practicable, but in no event later than two (2) Business Days
after discovery of such failure to make any such deposit;
|
(g) |
notice of material non-compliance with the Rating Agency Guidelines (if applicable) for more than five (5) consecutive Business Days as soon as reasonably practicable, but in no event later than one (1) Business Day after expiration of
the foregoing grace period;
|
(h) |
notice of the distribution of net capital gains or ordinary income one (1) Business Day in advance of the Rate Period that such net capital gains or ordinary income will or may be distributed, in addition to any notice the Redemption
and Paying Agent provides to Designated Owners or their Agent Members;
|
(i) |
notice of any change to any investment adviser or sub-adviser of the Issuer within five (5) 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 of stockholders by the Issuer, which may be satisfied by the delivery of the proxy statement itself, as soon as reasonably practicable, but in no event later than five (5) Business Days after mailing
thereof to all stockholders;
|
(k) |
notice no later than two (2) Business Days after the occurrence thereof of (i) the failure of the Issuer to pay the amount due on any "senior securities" (as defined under the 1940 Act) or other debt issued by the Issuer at the time
outstanding after any period of grace or cure with respect thereto shall have expired; (ii) the failure of the Issuer to pay, or admitting in writing its inability to pay, its debts generally as they become due; or (iii) the failure of
the Issuer to pay accumulated dividends on any additional preferred stock ranking pari passu with the VMTP Shares, after 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 Issuer contained in this Agreement or the Registration Rights Agreement or any material violation of the terms of the Articles Supplementary, in each case,
only if any officer of the Issuer has actual knowledge of such breach or violation, as soon as reasonably practicable, but in no event later than five (5) Business Days, after actual knowledge of any officer of the Issuer thereof;
|
(m) |
notice of any litigation, administrative proceeding or business development which may reasonably be expected to materially adversely affect the Issuer's business, properties or affairs or to materially impair the ability of the Issuer
to perform its obligations as set forth hereunder or under any of the other Related Documents to which it is a party as soon as reasonably practicable, but in no event later than ten (10) Business Days after actual knowledge of any
officer of the Issuer thereof;
|
(n) |
upon request of the Purchaser, copies of all certificates that the Issuer has delivered to each Rating Agency that are set forth in the respective Rating Agency Guidelines (if applicable) regarding Asset Coverage and all related
calculations for such certificates 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) |
within fifteen (15) calendar days after the last day of each month (each, a "Reporting Date"), a report of portfolio holdings of the Issuer as of the close of business on the last Business Day
of such month, prepared on a basis substantially consistent with the monthly reports of portfolio holdings of the Issuer currently reported on the Issuer's public website;
|
(p) |
within fifteen (15) calendar days after the last day of each month, a calculation of the Effective Leverage Ratio and the Asset Coverage of the Issuer as of the close of business of the last Business Day of such month; and upon the
failure of the Issuer to maintain Asset Coverage as provided in Section 2.4(a) of the Articles Supplementary or the Effective Leverage Ratio as required by Section 2.4(c) of the Articles Supplementary, notice of such failure within one
(1) Business Day of the occurrence thereof;
|
(q) |
notice of any amendment to the Pricing Procedures effecting the determination of Market Value of any of the Issuer's assets, together with detail of such amendment, within five (5) Business Days of the occurrence thereof; and
|
(r) |
from time to time such additional information regarding the financial position, results of operations or prospects of the Issuer as the Purchaser may reasonably request including, without limitation, copies of all offering material
with respect to the sale of any securities of the Issuer as soon as reasonably practicable, but in no event later than seven (7) Business Days after such a request.
|
6.2 |
No Amendment or Certain Other Actions Without Consent of the Purchaser
|
6.3 |
Maintenance of Existence
|
6.4 |
Tax Status of the Issuer
|
6.5 |
Payment Obligations
|
6.6 |
Compliance With Law
|
6.7 |
Maintenance of Approvals: Filings, Etc.
|
6.8 |
Inspection Rights
|
6.9 |
Litigation, Etc.
|
6.10 |
1940 Act Registration
|
6.11 |
Credit Quality
|
6.12 |
Maintenance of Effective Leverage Ratio
|
6.13 |
Redemption and Paying Agent
|
6.14 |
Cooperation in the Sale of the VMTP Shares
|
6.15 |
Use of Proceeds
|
6.16 |
Securities Depository
|
6.17 |
Future Agreements
|
6.18 |
Eligible Assets
|
6.19 |
Maryland Control Share Acquisition Act
|
7.1 |
Notices
|
(a) |
if to the Issuer:
|
BNY Mellon Municipal Income, Inc.
|
|
240 Greenwich Street
|
|
New York, New York 10286
|
|
Attention:
|
Deirdre Cunnane
|
Telephone:
|
(212) 922-6039
|
Email:
|
Deirdre.cunnane@bnymellon.com
|
(b) |
if to BAPFC:
|
Banc of America Preferred Funding Corporation
|
|
One Bryant Park
|
|
1111 Avenue of the Americas, 3rd Floor
|
|
New York, NY 10036
|
|
Attention:
|
Thomas J. Visone
|
Mary Ann Olson
|
|
Todd Blasiak
|
|
Michael Jentis
|
|
Lisa Irizarry
|
|
Carl Daniels
|
|
Telephone:
|
(212) 449-7358
|
Email:
|
thomas.visone@bofa.com
|
mary.ann.olson@bofa.com
|
|
todd.blasiak@bofa.com
|
|
lisa.m.irizarry@bofa.com
|
|
michael.jentis@bofa.com
|
|
carl.daniels@bofa.com
|
7.2 |
No Waivers
|
(a) |
The obligations of the Issuer hereunder shall not in any way be modified or limited by reference to any other document, instrument or agreement (including, without limitation, the VMTP Shares or any other Related Document). The rights
of the Purchaser hereunder are separate from and in addition to any rights that any Holder or Designated Owner of any VMTP Share may have under the terms of such VMTP Share or any Related Document or otherwise.
|
(b) |
No failure or delay by the Issuer or the Purchaser in exercising any right, power or privilege hereunder or under the 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 Issuer or the Purchaser in exercising any right, power or privilege under or in respect of the VMTP Shares or any other Related
Document shall affect the rights, powers or privileges of the Issuer or the Purchaser 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 Issuer shall upon demand either, as the Purchaser may require, pay in the first instance or reimburse the Purchaser (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 the Purchaser in
connection with the enforcement of or preservation of rights under this Agreement. The Issuer 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 the Purchaser, unless the Purchaser shall have reasonably concluded that there are legal defenses available to it that are different from or additional to those available to the Issuer.
|
(b) |
The Issuer agrees to indemnify and hold harmless the Purchaser and each other Indemnified Person of the Purchaser from and against any losses, claims, damages, liabilities and reasonable out-of-pocket expenses incurred by them
(including reasonable fees and disbursements of outside counsel) that are related to or arise out of (i) any claim by any third party relating to the offering or sale of the VMTP Shares by the Issuer or the holding of the VMTP Shares by
the Purchaser (A) that the Purchaser aided and abetted a breach of a fiduciary duty by the Issuer or any Director or officer of the Issuer or (B) arising from any act by the Issuer or any Director or officer of the Issuer or (ii) any
breach by the Issuer of any Related Document (in each case, excluding claims, losses, liabilities or expenses arising out of or resulting from the gross negligence or willful misconduct of any Indemnified Person as determined by a court
of competent jurisdiction, and excluding any consequential, special or punitive damages or losses consisting of trading losses, speculative losses, loss of profit or loss of business opportunity).
|
(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, liabilities or expenses (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, damages, liabilities and expenses (or actions in respect thereof) in such proportion as is appropriate to reflect (i) the relative benefits received by the Issuer on the one hand and
the Purchaser 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 Issuer on the one hand and the Purchaser on the other, in connection with 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 the Purchaser and their 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 received by the Purchaser from the Issuer pursuant to the proposed transactions giving rise to this Agreement. For purposes of determining the relative benefits to the Issuer on
the one hand, and the Purchaser 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 Issuer pursuant to the transactions, whether or not consummated bears to (ii) the dividends and Optional Redemption Premium paid by the Issuer to the Purchaser 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 Issuer on the one hand, or the Purchaser 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.
|
(e) |
Nothing in this Section 7.3 is intended to limit any party's obligations contained in other parts of this Agreement or the VMTP Shares.
|
7.4 |
Amendments and Waivers
|
7.5 |
Successors and Assigns
|
7.6 |
Term of this Agreement
|
7.7 |
Governing Law
|
7.8 |
Waiver of Jury Trial
|
7.9 |
Counterparts
|
7.10 |
Beneficiaries
|
7.11 |
Entire Agreement
|
7.12 |
Relationship to the Articles Supplementary
|
7.13 |
Confidentiality
|
7.14 |
Severability
|
7.15 |
Consent Rights of the Majority Participants to Certain Actions
|
(a) |
The termination by the Issuer 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 VMTP Shares unless (i) immediately
following such termination, there would be at least one Rating Agency with respect to the VMTP Shares or (ii) it replaces the terminated Rating Agency with another Rating Agency and provides notice thereof to the Holders of such VMTP
Shares; provided that such replacement shall no occur unless such replacement other Rating Agency shall have at the time of such replacement (i) published a rating for the VMTP Shares and (ii) entered into an agreement with the Issuer to
continue to publish such rating subject to the Rating Agency's customary conditions.
|
(b) |
The Issuer issuing or suffering to exist any "senior security" (as defined in the 1940 Act as of the date hereof, but not including a Derivative Contract, 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 VMTP Shares issued and sold pursuant to this Agreement or indebtedness for borrowed money of the Issuer, except (i) borrowings for temporary purposes in an
amount not to exceed 5% of the assets of the Issuer, which borrowings are repaid within sixty (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 VMTP Shares and costs incurred in connection therewith, (iii) any outstanding APS as the date hereof, (iv) the Issuer's issuance of tender options bonds or creation of a tender option bond trust (or
similar vehicles used for providing financing for municipal obligations and municipal closed-end fund preferred shares), if any and (v) 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 Issuer it shall not require the approval of the Majority Participants if the Issuer redeems, retires or terminates such "senior security" or otherwise cures such non-compliance within five
Business Days of receiving notice of the existence thereof.
|
(c) |
The Issuer (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 or the Articles Supplementary, except as permitted by the Charter or the
Articles Supplementary or (ii) except for any lien for the benefit of the Custodian of the Issuer on the assets of the Issuer held by such Custodian, any lien arising by operation of law, pledging any portfolio security to secure any
senior securities or other liabilities to be incurred by the Issuer (including under any tender option bond trust (or similar vehicles used for providing financing for municipal obligations and municipal closed-end fund preferred shares)
of which the residual floating rate trust certificates will be owned by the Issuer) unless the securities pledged pursuant to all such pledges 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 Issuer; 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 Issuer and the Issuer cures such violation within five (5) Business Days
of receiving notice of the existence thereof.
|
(d) |
Approval of any amendment, alteration or repeal of any provision of the Charter or the Articles Supplementary, whether by merger, consolidation or otherwise, that would affect any preference, right or power of the VMTP Shares
differentially from the rights of the holders of the Common Shares; or
|
(e) |
Approval of any action to be taken pursuant to Sections 2.6(h) of the Articles Supplementary (other than the issuance of additional series of Variable Rate MuniFund Term Preferred Shares or other Preferred Shares, the proceeds of which
will be used for the redemption or repurchase of the VMTP Shares and costs incurred in connection therewith).
|
BNY MELLON MUNICIPAL INCOME, INC.
|
||
By:
|
/s/ David DiPetrillo
|
|
Name:
|
David DiPetrillo
|
|
Title:
|
President
|
|
BANC OF AMERICA PREFERRED FUNDING CORPORATION
|
||
By:
|
/s/ Michael Jentis
|
|
Name:
|
Michael Jentis
|
|
Title:
|
Managing Director
|
Description of VMTP Shares:
|
1,209 BNY Mellon Municipal Income, Inc.
|
Series 2023-1 Variable Rate MuniFund Term Preferred Shares with a Liquidation Preference of $25,000 per share.
|
|
CUSIP 05589T401
|
● |
it is registered under the Securities Act;
|
● |
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
|
● |
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.
|
● |
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.
|
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:
|
|||
|
Series 2023-1 Variable Rate MuniFund Term Preferred Shares (VMTP),
liquidation preference $25,000 per share (1,209 shares outstanding)
Auction Preferred Stock (APS),
|
$
|
30,225,000
|
||
liquidation preference $25,000 per share (0 shares outstanding)
|
$
|
0
|
||
Total Preferred Shares Capitalization
|
$
|
30,225,000
|