AMENDED AND RESTATED
BYLAWS
OF
RMR REAL ESTATE INCOME
FUND
(Dated as of February 6, 2012)
ARTICLE I
AGREEMENT AND
DECLARATION OF TRUST
1.1 Agreement and
Declaration of Trust. These Bylaws
shall be subject to the Agreement
and Declaration of Trust, as amended
or restated from time to time (the
"Declaration of Trust"), of RMR
REAL ESTATE INCOME FUND,
the Delaware statutory trust
established by the Declaration of
Trust (the "Trust"). Capitalized
terms used in these Bylaws and not
otherwise defined herein shall have
the meanings given to such terms in
the Declaration of Trust.
ARTICLE II
TRUSTEES
2.1 General Powers;
Qualifications; Trustees Holding
Over. The business and affairs of the
Trust shall be managed under the
direction of its Board of Trustees. A
Trustee shall be an individual at least
21 years of age who is not under
legal disability. To qualify for
nomination or election as a Trustee,
an individual, at the time of
nomination and election, shall,
without limitation, (a) have
substantial expertise or experience
relevant to the business of the Trust
and its subsidiaries (as defined in
Section 8.12(f)(iii)), (b) not have
been convicted of a felony and (c)
meet the qualifications of an
Independent Trustee or a Managing
Trustee, each as defined in Section
2.2, as the case may be, depending
upon the position for which such
individual may be nominated and
elected. In case of failure to elect
Trustees at an annual meeting of
Shareholders, the incumbent
Trustees shall hold over and continue
to direct the management of the
business and affairs of the Trust until
they may resign or until their
successors are elected and qualify.
2.2 Independent Trustees
and Managing Trustees. A majority
of the Trustees holding office shall at
all times be Independent Trustees;
provided, however, that upon a
failure to comply with this
requirement as a result of the
creation of a temporary vacancy,
whether as a result of enlargement of
the Board of Trustees or the
resignation, removal or death of a
Trustee who is an Independent
Trustee, such requirement shall not
be applicable. An "Independent
Trustee" is one who is not an
employee of the investment adviser
of the Trust, who is not involved in
the Trust's day-to-day activities, who
is not an "interested person" of the
Trust (as defined in the 1940 Act),
except for the fact of his or her being
a Trustee, and who meets the
qualifications of an independent
director under the applicable rules of
each stock exchange upon which
shares of the Trust are listed for
trading and the Securities and
Exchange Commission (the "SEC"),
as those requirements may be
amended from time to time. If the
number of Trustees, at any time, is
set at less than five, at least one
Trustee shall be a Managing Trustee.
So long as the number of Trustees
shall be five or greater, at least two
Trustees shall be Managing Trustees.
"Managing Trustees" shall mean
Trustees who are not Independent
Trustees and who have been
employees, officers or directors of
the investment adviser of the Trust or
involved in the day-to-day activities
of the Trust during the one year prior
to their election. If at any time the
Board of Trustees shall not be
comprised of a majority of
Independent Trustees or shall not
have the requisite number of
Managing Trustees, the Board of
Trustees shall take such actions as
will cure the applicable condition;
provided that the fact that the Board
of Trustees does not have a majority
of Independent Trustees or requisite
number of Managing Trustees, as the
case may be, or has not taken such
action at any time or from time to
time shall not affect the validity of
any action taken by the Board of
Trustees.
2.3 Number of Trustees.
The number of Trustees shall be
initially set at five. Each of the
Trustees shall be designated as a
Class I, Class II or Class III Trustee
as required by the Declaration of
Trust. The number of Trustees
constituting the entire Board of
Trustees may be increased or
decreased from time to time only by
a vote of the Board of Trustees;
provided, however, that the tenure of
office of a Trustee shall not be
affected by any decrease in the
number of Trustees; provided,
further, that the number of Trustees
shall not be less than three.
2.4 Regular Meetings.
Regular meetings of the Board of
Trustees may be held without call or
notice at such places and at such
times as the Trustees may from time
to time determine; provided that
notice of the first regular meeting
following any such determination
shall be given to absent Trustees.
2.5 Special Meetings.
Special meetings of the Board of
Trustees may be called at any time
by any Managing Trustee, the
President or pursuant to the request
of any two Trustees then in office.
The person or persons authorized to
call special meetings of the Board of
Trustees may fix any place, either
within or without the State of
Delaware, as the place for holding
any special meeting of the Board of
Trustees called by them.
2.6 Notice. Notice of any
special meeting shall be given by
written notice delivered personally or
by electronic mail, telephoned,
facsimile transmitted, overnight
couriered (with proof of delivery) or
mailed to each Trustee at his or her
business or residence address.
Personally delivered, telephoned,
facsimile transmitted or
electronically mailed notices shall be
given at least 24 hours prior to the
meeting. Notice by mail shall be
deposited in the U.S. mail at least 72
hours prior to the meeting. If
mailed, such notice shall be deemed
to be given when deposited in the
U.S. mail properly addressed, with
postage thereon prepaid. Electronic
mail notice shall be deemed to be
given upon transmission of the
message to the electronic mail
address given to the Trust by the
Trustee. Telephone notice shall be
deemed given when the Trustee is
personally given such notice in a
telephone call to which he is a party.
Facsimile transmission notice shall
be deemed given upon completion of
the transmission of the message to
the number given to the Trust by the
Trustee and receipt of a completed
answer back indicating receipt. If
sent by overnight courier, such
notice shall be deemed given when
delivered to the courier. Neither the
business to be transacted at, nor the
purpose of, any annual, regular or
special meeting of the Trustees need
be stated in the notice, unless
specifically required by statute or
these Bylaws.
2.7 Quorum. A majority
of the Trustees shall constitute a
quorum for transaction of business at
any meeting of the Board of
Trustees; provided that, if less than a
majority of such Trustees are present
at a meeting, a majority of the
Trustees present may adjourn the
meeting from time to time without
further notice. The Trustees present
at a meeting of the Board of Trustees
which has been duly called and
convened and at which a quorum
was established may continue to
transact business until adjournment,
notwithstanding the withdrawal of a
number of Trustees resulting in less
than a quorum then being present at
the meeting. Whether or not a
Trustee votes on a matter at a
meeting which he or she attends, he
or she will nonetheless be considered
present for purposes of establishing a
quorum to consider the matter.
2.8 Voting. The action of
the majority of the Trustees present
at a meeting at which a quorum is or
was present shall be the action of the
Board of Trustees, unless the
concurrence of a greater proportion
is required for such action by
specific provision of an applicable
statute, the Declaration of Trust or
these Bylaws. If enough Trustees
have withdrawn from a meeting to
leave fewer than are required to
establish a quorum, but the meeting
is not adjourned, the action of the
majority of that number of Trustees
necessary to constitute a quorum at
such meeting shall be the action of
the Board of Trustees, unless the
concurrence of a greater proportion
is required for such action by
applicable law, the Declaration of
Trust or these Bylaws.
2.9 Telephonic Meetings.
Except as required by the 1940 Act
or other applicable law, attendance at
Board of Trustees meetings may be
in person or by a teleconference or
other communications medium by
means of which all persons
participating in the meeting can hear
and speak with each other.
2.10 Action by Written
Consent. Unless specifically
otherwise provided in the
Declaration of Trust, any action
required or permitted to be taken at
any meeting of the Board of Trustees
may be taken without a meeting, if a
majority of the Trustees shall
individually or collectively consent
in writing to such action. Such
written consent or consents shall be
filed with the records of the Trust
and shall have the same force and
effect as the affirmative vote of such
Trustees at a duly held meeting of
the Board of Trustees at which a
quorum was present.
2.11 Waiver of Notice.
The actions taken at any meeting of
the Trustees, however called and
noticed or wherever held, shall be as
valid as though taken at a meeting
duly held after regular call and notice
if a quorum is present and if, either
before or after the meeting, each of
the Trustees not present waives
notice, consents to the holding of
such meeting or approves the
minutes thereof.
2.12 Vacancies. If for any
reason any or all the Trustees cease
to be Trustees, such event shall not
terminate the Trust or affect these
Bylaws or the powers of the
remaining Trustees hereunder (even
if fewer than three Trustees remain).
Subject to the requirements of the
1940 Act or other applicable law,
any vacancies in the Board of
Trustees, including vacancies
resulting from increases in the
number of Trustees or otherwise,
shall be filled by a majority of the
Trustees then in office, whether or
not sufficient to constitute a quorum,
or by a sole remaining Trustee;
provided, however, that if the
Shareholders of any class or series of
Shares are entitled separately to elect
one or more Trustees, a majority of
the remaining Trustees elected by
that class or series or the sole
remaining Trustee elected by that
class or series may fill any vacancy
among the number of Trustees
elected by that class or series. A
Trustee elected by the Trustees to fill
any vacancy occurring in the Board
of Trustees, whether occurring due to
an increase in size of the Board of
Trustees or by the death, resignation
or removal of any Trustee, shall
serve until the next annual meeting
of Shareholders at which such
Trustee's Class shall be elected and
qualifies; subject, however, to prior
death, resignation, retirement,
disqualification or removal from
office. Any Trustee elected by
Shareholders at an annual meeting to
fill any vacancy occurring in the
Board of Trustees, whether occurring
due to an increase in size of the
Board of Trustees or by the death,
resignation or removal of any
Trustee, that has arisen since the
preceding annual meeting of
Shareholders (which vacancy has not
been filled by election of a new
Trustee by the Trustees) shall hold
office for a term which coincides
with the remaining term of the Class
of Trustee to which such office was
previously assigned. Any person
elected or appointed as a Trustee
shall meet the criteria for office set
forth from time to time in these
Bylaws.
2.13 Compensation. The
Trustees shall be entitled to receive
such reasonable compensation for
their services as Trustees as the
Trustees may determine from time to
time. Trustees may be reimbursed
for expenses of attendance, if any, at
each annual, regular or special
meeting of the Board of Trustees or
of any committee thereof; and for
their expenses, if any, in connection
with each property visit and any
other service or activity performed or
engaged in as Trustees. The
Trustees shall be entitled to receive
remuneration for services rendered to
the Trust in any other capacity, and
such services may include, without
limitation, services as an officer of
the Trust, services as an employee of
RMR Advisors, legal, accounting or
other professional services, or
services as a broker, transfer agent or
underwriter, whether performed by a
Trustee or any person affiliated with
a Trustee.
2.14 Reliance. Each
Trustee, officer, employee and agent
of the Trust shall, in the performance
of his or her duties with respect to
the Trust, be entitled to rely on any
information, opinion, report or
statement, including any financial
statement or other financial data,
prepared or presented by an officer
or employee of the Trust or by RMR
Advisors, accountants, appraisers or
other experts or consultants selected
by the Board of Trustees or officers
of the Trust, regardless of whether
such counsel or expert may also be a
Trustee.
2.15 Qualifying Shares Not
Required. Trustees need not be
Shareholders.
2.16 Emergency
Provisions. Notwithstanding any
other provision in the Declaration of
Trust or these Bylaws, this Section
2.16 shall apply during the existence
of any catastrophe, or other similar
emergency condition, as a result of
which a quorum of the Board of
Trustees under Article II cannot
readily be obtained (an
"Emergency"). During any
Emergency, unless otherwise
provided by the Board of Trustees,
(a) a meeting of the Board of
Trustees may be called by any
Managing Trustee or officer of the
Trust by any means feasible under
the circumstances and (b) notice of
any meeting of the Board of Trustees
during such an Emergency may be
given less than 24 hours prior to the
meeting to as many Trustees and by
such means as it may be feasible at
the time, including publication,
television or radio.
ARTICLE III
OFFICERS
3.1 Enumeration;
Qualification. The officers of the
Trust shall be a President, a
Treasurer, a Secretary, and such
other officers, if any, as the Trustees
from time to time may in their
discretion elect. The Trust may also
have such agents as the Trustees
from time to time may in their
discretion appoint. Any two or more
offices may be held by the same
person.
3.2 Election. The
President, the Treasurer, and the
Secretary shall be elected annually
by the Trustees. Other officers, if
any, may be elected or appointed by
the Trustees at any time. Vacancies
in any office may be filled by the
Board of Trustees at any time.
3.3 Tenure. Officers of
the Trust shall hold office until their
respective successors are chosen and
qualified, or in each case until he or
she sooner dies, resigns, is removed
with or without cause or becomes
disqualified. Each agent of the Trust
shall retain authority at the pleasure
of the Trustees.
3.4 Powers. Subject to
the other provisions of these Bylaws,
each officer of the Trust shall have,
in addition to the duties and powers
herein and in the Declaration of
Trust set forth, such duties and
powers as the Board of Trustees may
from time to time designate.
3.5 Chairman; President;
Vice President. Unless the Trustees
otherwise provide, the Chairman of
the Trustees or, if there is none or in
the absence of the Chairman, the
President shall preside at all
meetings of the Shareholders and of
the Trustees. Alternatively, the
Trustees may designate one Trustee
or another officer of the Trust to
preside at such meetings. Any Vice
President shall have such duties and
powers as may be designated from
time to time by the Trustees or the
President.
3.6 Treasurer; Assistant
Treasurer. The Treasurer shall be
the chief financial and chief
accounting officer of the Trust, and
shall, subject to any arrangement
made by the Trustees with a
custodian, investment adviser, sub-
adviser, manager, or transfer,
shareholder servicing or similar
agent, be in charge of the valuable
papers, books of account and
accounting records of the Trust, and
shall have such other duties and
powers as may be designated from
time to time by the Trustees or by the
President. Any Assistant Treasurer
shall have such duties and powers as
may be designated from time to time
by the Trustees, the President or the
Treasurer.
3.7 Secretary; Assistant
Secretary. The Secretary (or his or
her designee) shall record all
proceedings of the Shareholders and
the Trustees in books to be kept
therefor, which books or a copy
thereof shall be kept at the principal
office of the Trust. In the absence of
the Secretary from any meeting of
Shareholders or Trustees, an
Assistant Secretary, or if there be
none or if he or she is absent, a
temporary secretary chosen at such
meeting shall record the proceedings
thereof in the aforesaid books. Any
Assistant Secretary shall have such
duties and powers as may be
designated from time to time by the
Trustees, the President or the
Secretary.
3.8 Removal and
Resignations. Any officer or agent
of the Trust may be removed by the
Trustees at any time. Any officer of
the Trust may resign at any time by
giving written notice of his or her
resignation to the Trustees, the
Chairman of the Trustees, the
President or the Secretary. Any
resignation shall take effect at any
time specified therein or, if the time
when it shall become effective is not
specified therein, immediately upon
its receipt. The acceptance of a
resignation shall not be necessary to
make it effective unless otherwise
stated in the resignation.
ARTICLE IV
COMMITTEES
4.1 Appointment. The
powers, duties and responsibilities of
the Trustees maybe delegated to one
or more Committees. Trustees,
officers or agents of the Trust may
serve on Committees, but all
Committees shall have at least one
Trustee who will serve as Chairman
of the Committee. Committees shall
have the powers, duties and
responsibilities as may be assigned
to them by the Trustees. The
Trustees may delegate any of the
powers of the Trustees to
Committees appointed under this
Section 4.1 and composed solely of
Trustees, except as prohibited by
law.
4.2 Meetings; Notice.
Notice of Committee meetings shall
be given in the same manner as
notice for special meetings of the
Board of Trustees. One-third, but
not less than one, of the members of
any Committee shall be present in
person at any meeting of a
Committee in order to constitute a
quorum for the transaction of
business at a meeting, and the act of
a majority present at a meeting at the
time of a vote if a quorum is then
present shall be the act of a
Committee. The Chairman of the
Committee shall fix the time and
place of a Committee's meetings
unless the Board of Trustees shall
otherwise provide.
4.3 Telephonic Meetings.
Except as required by the 1940 Act
or other applicable law, attendance at
Committee meetings may be in
person or by a teleconference or
other communications medium by
means of which all persons
participating in the meeting can hear
and speak with each other.
4.4 Action by Written
Consent of Committees. Any action
required or permitted to be taken at
any meeting of a Committee may be
taken without a meeting, if a consent
in writing to such action is signed by
a majority of the Committee and
such written consent is filed with the
minutes of proceedings of such
Committee.
4.5 Vacancies. Subject to
the provisions hereof, the Board of
Trustees shall have the power at any
time to change the membership of
any Committee, to fill all vacancies,
to designate alternate members to
replace any absent or disqualified
member or to dissolve any such
Committee.
ARTICLE V
FISCAL YEAR
5.1 General. Except as
from time to time otherwise provided
by the Trustees, the fiscal year of the
Trust shall be a calendar year.
ARTICLE VI
SEAL
6.1 General. The Board
of Trustees may authorize the
adoption of a seal by the Trust. The
Trustees may authorize one or more
duplicate seals. Whenever the Trust
is permitted or required to affix its
seal to a document, it shall be
sufficient to meet the requirements
of any law, rule or regulation relating
to a seal to place the word "(SEAL)"
adjacent to the signature of the
person authorized to execute the
document on behalf of the Trust.
ARTICLE VII
EXECUTION OF PAPERS
7.1 General. Except as
the Trustees may generally or in
particular cases authorize the
execution thereof in some other
manner, all deeds, leases, transfers,
contracts, bonds, notes, checks,
drafts and other obligations made,
accepted or endorsed by the Trust
shall be executed by the President,
any Vice President, the Treasurer or
by whomever else shall be
designated for that purpose by vote
of the Trustees, and need not bear the
seal of the Trust.
ARTICLE VIII
SHAREHOLDERS' VOTING
POWERS AND MEETINGS
8.1 Regular and Special
Meetings. Except as provided in the
next sentence, regular meetings of
the Shareholders for the election of
Trustees and the transaction of such
other business as may properly come
before the meeting shall be held, so
long as Shares are listed for trading
on the NYSE Amex LLC, on at least
an annual basis, on such day and at
such place as shall be designated by
the Trustees. Such regular meetings
of the Shareholders shall only be
called by the Board of Trustees. In
the event that such a meeting is not
held in any annual period, whether
the omission be by oversight or
otherwise, a subsequent special
meeting may be called by the
Trustees and held in lieu of such
meeting with the same effect as if
held within such annual period.
Except as required by the 1940 Act
or other applicable law, special
meetings of Shareholders or any or
all classes or series of Shares may
only be called by a majority of the
Trustees from time to time for such
other purposes as may be prescribed
by law, by the Declaration of Trust
or by these Bylaws, or for the
purpose of taking action upon any
other matter deemed by the Trustees
to be necessary or desirable. A
special meeting of Shareholders may
be held at any such time, day and
place as is designated by the Board
of Trustees.
8.2 Notice of Regular or
Special Meetings. Written notice
specifying the place, day and hour of
any regular or special meeting, the
purpose of the meeting, to the extent
required by law to be provided, and
all other matters required by law
shall be given to each Shareholder of
record entitled to vote, either
personally or by sending a copy
thereof by mail, postage prepaid, to
his or her address appearing on the
books of the Trust or theretofore
given by him or her to the Trust for
the purpose of notice or, if no
address appears or has been given,
addressed to the place where the
principal office of the Trust is
situated, or by electronic
transmission, including facsimile
transmission, to any address or
number of such Shareholder at which
the Shareholder receives electronic
transmissions. If mailed, such notice
shall be deemed to be given once
deposited in the U.S. mail addressed
to the Shareholder at his or her post
office address as it appears on the
records of the Trust, with postage
thereon prepaid. It shall be the duty
of the Secretary to give notice of
each meeting of Shareholders.
Whenever notice of a meeting is
required to be given to a Shareholder
under the Declaration of Trust or
these Bylaws, a written waiver
thereof, executed before or after the
meeting by such Shareholder or his
or her attorney thereunto authorized
and filed with the records of the
meeting, shall be deemed equivalent
to such notice. Notice of a meeting
need not be given to any Shareholder
who attends the meeting.
8.3 Notice of Adjourned
Meetings. It shall not be necessary
to give notice of the time and place
of any adjourned meeting or of the
business to be transacted thereat
other than by announcement at the
meeting at which such adjournment
is taken.
8.4 Scope of Meetings.
Except as otherwise expressly set
forth elsewhere in these Bylaws, no
business shall be transacted at
meetings of Shareholders except as
specifically designated in the notice
or otherwise properly brought before
the Shareholders by or at the
direction of the Board of Trustees.
8.5 Organization of
Shareholder Meetings. Every
meeting of Shareholders shall be
conducted by a Trustee, the President
or any other officer of the Trust, as
designated by the Board of Trustees,
who shall preside at and act as
chairperson of a meeting of
Shareholders. The Secretary, an
Assistant Secretary or a person
appointed by the Trustees or, in the
absence of such appointment, a
person appointed by the person
presiding as chairperson at the
meeting shall act as Secretary of the
meeting and record the minutes of
the meeting. If the Secretary
presides as chairperson at a meeting
of Shareholders, then the Secretary
shall not also act as secretary of the
meeting and record the minutes of
the meeting. The order of business
and all other matters of procedure at
any meeting of Shareholders shall be
determined by the chairperson of the
meeting. The chairperson of the
meeting may prescribe such rules,
regulations and procedures and take
such action as, in the discretion of
such chairperson, are appropriate for
the proper conduct of the meeting,
including, without limitation: (a)
restricting admission to the time set
for the commencement of the
meeting; (b) limiting attendance at
the meeting to Shareholders of
record of the Trust, their duly
authorized proxies or other such
persons as the chairperson of the
meeting may determine; (c) limiting
participation at the meeting on any
matter to Shareholders of record of
the Trust entitled to vote on such
matter, their duly authorized proxies
or other such persons as the
chairperson of the meeting may
determine; (d) limiting the time
allotted to questions or comments by
participants; (e) maintaining order
and security at the meeting; (f)
removing any Shareholder or other
person who refuses to comply with
meeting procedures, rules or
guidelines as set forth by the
chairperson of the meeting; (g)
concluding a meeting or recessing or
adjourning the meeting to a later date
and time and at a place announced at
the meeting; and (h) complying with
any state and local laws and
regulations concerning safety and
security. Without limiting the
generality of the powers of the
chairperson of the meeting pursuant
to the foregoing provisions, the
chairperson, subject to review by the
Independent Trustees, may adjourn
any meeting of Shareholders for any
reason deemed necessary by the
chairperson, including, without
limitation, if (i) no quorum is present
for the transaction of the business,
(ii) the Board of Trustees or the
chairperson of the meeting
determines that adjournment is
necessary or appropriate to enable
the Shareholders to consider fully
information that the Board of
Trustees or the chairperson of the
meeting determines has not been
made sufficiently or timely available
to Shareholders or (iii) the Board of
Trustees or the chairperson of the
meeting determines that adjournment
is otherwise in the best interests of
the Trust. Unless otherwise
determined by the chairperson of the
meeting, meetings of Shareholders
shall not be required to be held in
accordance with the general rules of
parliamentary procedure or any
otherwise established rules of order.
8.6 Quorum. At any
meeting of Shareholders, the
presence in person or by proxy of
Shareholders entitled to cast a
majority of all the votes entitled to
be cast on a particular matter shall
constitute a quorum for voting on a
particular matter or the transaction of
business; but this section shall not
affect any requirement under any
statute or the Declaration of Trust for
the vote necessary for the adoption
of any measure. If, however, such
quorum shall not be present at any
meeting of Shareholders, the
chairperson of the meeting shall have
the power to adjourn the meeting
from time to time without the Trust
having to set a new record date or
provide any additional notice of such
meeting, subject to any obligation of
the Trust to give notice pursuant to
Section 8.3. At such adjourned
meeting at which a quorum shall be
present, any business may be
transacted which might have been
transacted at the meeting as
originally notified. The
Shareholders present, either in
person or by proxy, at a meeting of
Shareholders which has been duly
called and convened and at which a
quorum was established may
continue to transact business until
adjournment, notwithstanding the
withdrawal of enough votes to leave
less than a quorum then being
present at the meeting.
8.7 Voting Power.
(a) Each whole
Share shall be entitled to one
vote as to any matter on
which it is entitled to vote
and each fractional Share
shall be entitled to a
proportionate fractional vote,
except as otherwise provided
in the notice of the meeting
forwarded to the
Shareholders by the Trustees,
the Declaration of Trust,
these Bylaws, or required by
the 1940 Act or any other
applicable law. Except as
otherwise provided in the
notice of the meeting
forwarded to the
Shareholders by the Trustees,
the Declaration of Trust,
these Bylaws or required by
the 1940 Act or any other
applicable law, all Shares of
the Trust then entitled to vote
shall be voted in the
aggregate as a single class
without regard to classes or
series of Shares. There shall
be no cumulative voting in
the election of Trustees.
(b) With regard to
election of a Trustee, and
except as may be mandated
by the 1940 Act or any other
applicable law or the listing
requirements of the principal
exchange on which the
Common Shares are listed,
subject to the voting rights of
any class or series of Shares
as set forth in these Bylaws:
(i) a majority of all the votes
cast at a meeting of
Shareholders duly called and
at which a quorum is present
shall be sufficient to elect a
Trustee in an uncontested
election; and (ii) a majority
of all the Shares entitled to
vote at a meeting of
Shareholders duly called and
at which a quorum is present
shall be sufficient to elect a
Trustee in a contested
election (which, for purposes
of these Bylaws, is an
election at which the number
of nominees exceeds the
number of Trustees to be
elected at the meeting). Each
Share may be voted for as
many individuals as there are
Trustees to be elected and for
whose election the Share is
entitled to be voted.
(c) With regard to
any other matter which may
properly come before a
meeting of Shareholders duly
called and at which a quorum
is present, and except where a
different voting standard is
required by the 1940 Act or
any other applicable law, by
the listing requirements of the
principal exchange on which
the Common Shares are listed
or by a specific provision of
the Declaration of Trust, (i) if
such matter is approved by at
least 60% of the Trustees
then in office, including 60%
of the Independent Trustees
then in office, a majority of
all the votes cast at the
meeting shall be required to
approve such matter; and (ii)
if such matter is not approved
by at least 60% of the
Trustees then in office,
including 60% of the
Independent Trustees then in
office, 75% of all the Shares
entitled to vote at the meeting
shall be required to approve
such matter.
8.8 Proxies. A
Shareholder may cast the votes
entitled to be cast by him or her
either in person or by proxy executed
by the Shareholder or by his or her
duly authorized agent in any manner
permitted by law. Such proxy shall
be filed with such officer of the Trust
or third party agent as the Board of
Trustees shall have designated for
such purpose for verification at or
prior to such meeting. Any proxy
relating to the Shares shall be valid
until the expiration date therein or, if
no expiration is so indicated, for
such period as is permitted pursuant
to Delaware law. At a meeting of
Shareholders, all questions
concerning the qualification of
voters, the validity of proxies, and
the acceptance or rejection of votes,
shall be decided by or on behalf of
the chairperson of the meeting,
subject to Section 8.11.
8.9 Record Dates. The
Board of Trustees may fix the date
for determination of Shareholders
entitled to notice of and to vote at a
meeting of Shareholders. If no date
is fixed for the determination of the
Shareholders entitled to vote at any
meeting of Shareholders, only
persons in whose names Shares
entitled to vote are recorded on the
share records of the Trust at the
opening of business on the day of
any meeting of Shareholders shall be
entitled to vote at such meeting.
8.10 Voting of Shares by
Certain Holders. Shares registered in
the name of a corporation,
partnership, trust or other entity, if
entitled to be voted, may be voted by
the president or a vice president, a
general partner or trustee thereof, as
the case may be, or a proxy
appointed by any of the foregoing
individuals, unless some other
person who has been appointed to
vote such Shares pursuant to a bylaw
or a resolution of the governing body
of such corporation or other entity or
pursuant to an agreement of the
partners of the partnership presents a
certified copy of such bylaw,
resolution or agreement, in which
case such person may vote such
Shares. Any trustee or other
fiduciary may vote Shares registered
in his or her name as such fiduciary,
either in person or by proxy.
8.11 Inspectors.
(a) Before or at any
meeting of Shareholders, the
chairperson of the meeting
may appoint one or more
persons as inspectors for such
meeting. Such inspectors
shall (i) ascertain and report
the number of Shares
represented at the meeting, in
person or by proxy, and the
validity and effect of proxies,
(ii) receive and tabulate all
votes, ballots or consents,
(iii) report such tabulation to
the chairperson of the
meeting and (iv) perform
such other acts as are proper
to conduct the election or
voting at the meeting.
(b) Each report of an
inspector shall be in writing
and signed by him or her or
by a majority of them if there
is more than one inspector
acting at such meeting. If
there is more than one
inspector, the report of a
majority shall be the report of
the inspectors. The report of
the inspector or inspectors on
the number of Shares
represented at the meeting
and the results of the voting
shall be prima facie evidence
thereof.
8.12 Advance Notice of
Nominees for Trustee and Other
Proposals.
(a) Nominations and
Other Proposals to be
Considered at Meetings of
Shareholders. Nominations
of individuals for election to
the Board of Trustees and the
proposal of other business to
be considered by the
Shareholders at meetings of
Shareholders may be
properly brought before the
meeting only as set forth in
this Section 8.12. All
judgments and
determinations made by the
Board of Trustees or the
chairperson of the meeting,
as applicable, under this
Section 8.12 (including,
without limitation, judgments
as to whether any matter or
thing is satisfactory to the
Board of Trustees and
determinations as to the
propriety of a proposed
nomination or a proposal of
other business for
consideration by
Shareholders) shall be final
and binding unless
determined by a court of
competent jurisdiction to
have been made in bad faith.
(b) Annual Meetings
of Shareholders.
(i) A
Shareholder may
recommend to the
Nominating Committee
of the Board of Trustees
an individual as a
nominee for election to
the Board of Trustees.
Such recommendation
shall be made by written
notice to the Chair of
such committee and the
Secretary, which notice
should contain or be
accompanied by the
information and
documents with respect to
such recommended
nominee and Shareholder
that such Shareholder
believes to be relevant or
helpful to the Nominating
Committee's
deliberations. In
considering such
recommendation, the
Nominating Committee
may request additional
information concerning
the recommended
nominee or the
Shareholder making the
recommendation. The
Nominating Committee
of the Board of Trustees
will consider any such
recommendation in its
discretion. A Shareholder
seeking to make a
nomination of an
individual for election to
the Board of Trustees
must make such
nomination in accordance
with Section 8.12(b)(ii) or
Section 8.12(b)(iii), as
applicable.
(ii) Nomination
s of individuals for
election to the Board of
Trustees by the holders of
Preferred Shares, voting
as a separate class
pursuant to Section E(a)
or E(b) of Part I of Article
X, at an annual meeting
of Shareholders may be
properly brought before
the meeting (A) pursuant
to the Trust's notice of
meeting or otherwise
properly brought before
the meeting by or at the
direction of the Board of
Trustees or (B) by any
holder of Preferred
Shares who (1) has
continuously held at least
$2,000 in market value,
or 1%, of the Preferred
Shares entitled to vote at
the meeting on such
election for at least one
year from the date such
holder of Preferred
Shares gives the notice
provided for in this
Section 8.12(b)(ii) (such
one year period of
continuous holding to
include having
continuously held at least
$2,000 in market value,
or 1%, of the preferred
shares of Old RMR Real
Estate Income Fund then
outstanding for such
period of time
immediately prior to and
including January 20,
2012 as may be necessary
to achieve such one year
period if such notice is
given prior to January 20,
2013), and continuously
holds such Preferred
Shares through and
including the time of the
annual meeting (including
any adjournment or
postponement thereof),
(2) is a holder of record
of such Preferred Shares
at the time of giving the
notice provided for in this
Section 8.12(b)(ii)
through and including the
time of the annual
meeting (including any
adjournment or
postponement thereof),
(3) is entitled to make
nominations and to vote
at the meeting on such
election and (4) complies
with the notice
procedures set forth in
this Section 8.12 as to
such nomination. Section
8.12(b)(ii)(B) shall be the
exclusive means for a
holder of Preferred
Shares to make
nominations of
individuals for election to
the Board of Trustees by
the holders of Preferred
Shares voting as a
separate class pursuant to
Section E(a) or E(b) of
Part I of Article X. For
purposes of determining
compliance with the
requirement in subclause
(1) of Section
8.12(b)(ii)(B), the market
value of Preferred Shares
held by the applicable
Shareholder shall be
determined by
multiplying the number
of Preferred Shares such
Shareholder continuously
held for that one-year
period by the Liquidation
Preference (as that term is
defined in Article X) of
such Preferred Shares.
(iii) Nominatio
ns of individuals for
election to the Board of
Trustees by the holders of
Common Shares and
Preferred Shares, voting
together as a single class,
at an annual meeting of
Shareholders may be
properly brought before
the meeting (A) pursuant
to the Trust's notice of
meeting by or at the
direction of the Board of
Trustees or (B) by any
one or more Shareholders
of the Trust who (1) (x) at
the date of the giving of
the notice provided for in
this Section 8.12(b)(iii),
individually or in the
aggregate, hold at least
3% of the Shares entitled
to vote at the meeting on
such election and have
held such Shares
continuously for at least
three years, and (y)
continuously hold such
Shares through and
including the time of the
annual meeting (including
any adjournment or
postponement thereof),
(2) are each a Shareholder
of record of the Trust at
the time of giving the
notice provided for in this
Section 8.12(b)(iii)
through and including the
time of the annual
meeting (including any
adjournment or
postponement thereof),
(3) are each entitled to
make nominations and to
vote at the meeting on
such election and (4)
comply with the notice
procedures set forth in
this Section 8.12(b) as to
such nomination. Section
8.12(b)(iii)(B) shall be
the exclusive means for
any Shareholder to make
nominations of
individuals for election to
the Board of Trustees by
the holders of Common
Shares and Preferred
Shares, voting together as
a single class.
(iv) The
proposal of business to be
considered by
Shareholders at an annual
meeting of Shareholders,
other than the nomination
of individuals for election
to the Board of Trustees,
may be properly brought
before the meeting (A)
pursuant to the Trust's
notice of meeting by or at
the direction of the Board
of Trustees or (B) by any
Shareholder of the Trust
who (1) has continuously
held at least $2,000 in
market value, or 1%, of
the Shares entitled to vote
at the meeting on the
proposal for business for
at least one year from the
date such Shareholder
gives the notice provided
for in this Section
8.12(b)(iv), and
continuously holds such
Shares through and
including the time of the
annual meeting (including
any adjournment or
postponement thereof),
(2) is a Shareholder of
record at the time of
giving the notice
provided for in this
Section 8.12(b)(iv)
through and including the
time of the annual
meeting (including any
adjournment or
postponement thereof),
(3) is entitled to propose
such business and to vote
at the meeting on the
proposal for such
business and (4) complies
with the notice
procedures set forth in
this Section 8.12(b) as to
such business. Section
8.12(b)(iv)(B) shall be the
exclusive means for a
Shareholder to propose
business before an annual
meeting of Shareholders,
except (x) to the extent of
matters which are
required to be presented
to Shareholders by
applicable law which
have been properly
presented in accordance
with the requirements of
such law and (y)
nominations of
individuals for election to
the Board of Trustees
shall be made in
accordance with Section
8.12(b)(ii)(B) or Section
8.12(b)(iii)(B), as
applicable. For purposes
of determining
compliance with the
requirement in subclause
(1) of Section
8.12(b)(iv)(B), (A) the
market value of Common
Shares held by the
applicable Shareholder
shall be determined by
multiplying the number
of Common Shares such
Shareholder continuously
held for that one-year
period by the highest
selling price of the
Common Shares as
reported on the principal
exchange on which the
Trust's Common Shares
are listed during the 60
calendar days before the
date such notice was
submitted and (B) the
market value of Preferred
Shares held by the
applicable Shareholder
shall be determined by
multiplying the number
of Preferred Shares such
Shareholder continuously
held for that one-year
period by the Liquidation
Preference (as that term is
defined in Article X) of
such Preferred Shares.
(v) For
nominations for election
to the Board of Trustees
or other business to be
properly brought before
an annual meeting by one
or more Shareholders
pursuant to Section
8.12(b), such
Shareholder(s) shall have
given timely notice
thereof in writing to the
Secretary in accordance
with this Section 8.12 and
such other business shall
otherwise be a proper
matter for action by
Shareholders. To be
timely, the notice of such
Shareholder(s) shall set
forth all information
required under this
Section 8.12 and shall be
delivered to the Secretary
at the principal executive
offices of the Trust not
later than 5:00 p.m.
(Eastern Time) on the
120th day nor earlier than
the 150th day prior to the
first anniversary of the
date of the proxy
statement for the
preceding year's annual
meeting; provided,
however, that in the event
that the annual meeting is
called for a date that is
more than 30 days earlier
or later than the first
anniversary of the date of
the preceding year's
annual meeting, notice by
such Shareholder(s) to be
timely shall be so
delivered not later than
5:00 p.m. (Eastern Time)
on the 10th day following
the earlier of the day on
which (A) notice of the
date of the annual
meeting is mailed or
otherwise made available
or (B) public
announcement of the date
of the annual meeting is
first made by the Trust.
Neither the postponement
or adjournment of an
annual meeting, nor the
public announcement of
such postponement or
adjournment, shall
commence a new time
period for the giving of a
notice of one or more
Shareholder(s) as
described above. No
Shareholder may give a
notice to the Secretary
described in this Section
8.12(b)(v) unless such
Shareholder holds a
certificate for all Shares
owned by such
Shareholder during all
times described in
Section 8.12(b)(ii)(B) or
Section 8.12(b)(iii)(B), as
applicable, in the case of
a nomination of one or
more individuals for
election the Board of
Trustees, or Section
8.12(iv)(B), in the case of
the proposal of other
business, and a copy of
each such certificate held
by such Shareholder at
the time of giving such
notice shall accompany
such Shareholder's notice
to the Secretary in order
for such notice to be
effective; provided, that,
if at the time of giving
such notice Preferred
Shares may only be held
in book-entry form, then
such Shareholder shall in
lieu of delivering
certificates for all such
Preferred Shares deliver
at the time of giving such
notice evidence
satisfactory to the Board
of Trustees that such
Shareholder is the
Beneficial Owner (as that
term is defined in Article
X) for all Preferred
Shares held by such
Shareholder during all
times described in
Section 8.12(b)(ii)(B) or
Section 8.12(b)(iii)(B), as
applicable, in the case of
a nomination of one or
more individuals for
election the Board of
Trustees, or Section
8.12(iv)(B), in the case of
the proposal of other
business (including, for
the avoidance of doubt,
during all times when
such Shareholder held
preferred shares of Old
RMR Real Estate Income
Fund that such
Shareholder is permitted
to "tack" to such
Shareholder's period of
ownership of Preferred
Shares under Section
8.12(b)(ii)(B)(1)).
A notice of one or
more Shareholders pursuant to this
Section 8.12(b) shall set forth:
A. separat
xxx as
to each
individ
ual
whom
such
Shareh
older(s
)
propos
e to
nomina
te for
electio
n or
reelecti
on as a
Trustee
(a
"Propo
sed
Nomin
ee")
and
any
Propos
ed
Nomin
ee
Associ
ated
Person
(as
defined
in
Section
8.12(b)
(viii)),
(1) the
name,
age,
busines
s
address
and
residen
ce
address
of such
Propos
ed
Nomin
ee and
the
name
and
address
of such
Propos
ed
Nomin
ee
Associ
ated
Person,
(2) a
statem
ent of
whethe
r such
Propos
ed
Nomin
ee is
propos
ed for
nomina
tion as
an
Indepe
ndent
Trustee
(as
defined
in
Section
2.2) or
a
Manag
ing
Trustee
(as
defined
in
Section
2.2)
and a
descrip
tion of
such
Propos
ed
Nomin
ee's
qualifi
cations
to be
an
Indepe
ndent
Trustee
or
Manag
ing
Trustee
, as the
case
may
be, and
such
Propos
ed
Nomin
ee's
qualifi
cations
to be a
Trustee
pursua
nt to
the
criteria
set
forth in
Section
2.1, (3)
the
class,
series
and
numbe
r of
any
Shares
that
are,
directl
y or
indirec
tly,
benefic
ially
owned
or
owned
of
record
by
such
Propos
ed
Nomin
ee or
by
such
Propos
ed
Nomin
ee
Associ
ated
Person,
(4) the
date
such
Shares
were
acquire
d,
whethe
r any
"tackin
g"
provisi
ons
contain
ed in
Section
8.12(b)
(ii)(B)(
1) are
being
relied
upon
and the
invest
ment
intent
of such
acquisi
tion,
(5) a
descrip
tion of
all
purcha
ses and
sales
of
securiti
es of
the
Trust
by
such
Propos
ed
Nomin
ee or
by
such
Propos
ed
Nomin
ee
Associ
ated
Person
during
the
previo
us 36
month
period,
includi
ng the
date of
the
transac
tions,
the
class,
series
and
numbe
r of
securiti
es
involve
d in the
transac
tions
and the
consid
eration
involve
d, (6) a
descrip
tion of
all
Derivat
ive
Transa
ctions
(as
defined
in
Section
8.12(b)
(viii))
by
such
Propos
ed
Nomin
ee or
by
such
Propos
ed
Nomin
ee
Associ
ated
Person
during
the
previo
us 36
month
period,
includi
ng the
date of
the
transac
tions
and the
class,
series
and
numbe
r of
securiti
es
involve
d in,
and the
materia
l
econo
mic
terms
of, the
transac
tions,
such
descrip
tion to
include
,
withou
t
limitati
on, all
inform
ation
that
such
Propos
ed
Nomin
ee or
Propos
ed
Nomin
ee
Associ
ated
Person
would
be
require
d to
report
on an
Insider
Report
(as
defined
in
Section
8.12(b)
(viii))
if such
Propos
ed
Nomin
ee or
Propos
ed
Nomin
ee
Associ
ated
Person
were a
Trustee
of the
Trust
or the
benefic
ial
owner
of
more
than
10% of
any
class
or
series
of
Shares
at the
time of
the
transac
tions,
(7) any
perfor
xxxxx
related
fees
(other
than an
asset
based
fee) to
which
such
Propos
ed
Nomin
ee or
such
Propos
ed
Nomin
ee
Associ
ated
Person
is
entitled
based
on any
increas
e or
decreas
e in the
value
of
Shares
or
instru
ment
or
arrange
ment
of the
type
contem
plated
within
the
definiti
on of
Derivat
ive
Transa
ction,
if any,
includi
ng,
withou
t
limitati
on, any
such
interest
s held
by
membe
rs of
such
Propos
ed
Nomin
ee's or
such
Propos
ed
Nomin
ee
Associ
ated
Person
's
immed
iate
family
sharing
the
same
househ
old
with
such
Propos
ed
Nomin
ee or
such
Propos
ed
Nomin
ee
Associ
ated
Person,
(8) any
proport
ionate
interest
in
Shares
or
instru
ment
or
arrange
ment
of the
type
contem
plated
within
the
definiti
on of
Derivat
ive
Transa
ction
held,
directl
y or
indirec
tly, by
a
general
or
limited
partner
ship in
which
such
Propos
ed
Nomin
ee or
such
Propos
ed
Nomin
ee
Associ
ated
Person
is a
general
partner
or,
directl
y or
indirec
tly,
benefic
ially
owns
an
interest
in a
general
partner
, (9) a
descrip
tion of
all
direct
and
indirec
t
compe
nsation
and
other
materia
l
moneta
ry
agreem
ents,
arrange
ments
and
underst
xxxxxx
s
during
the
past
three
years,
and
any
other
materia
l
relatio
nships,
betwee
n or
among
any
Shareh
older
making
the
nomina
tion,
any
Propos
ed
Nomin
ee
Associ
ated
Person,
or any
of their
respect
ive
affiliat
es and
associa
tes, or
others
acting
in
concert
therewi
th, on
the one
hand,
and
each
Propos
ed
Nomin
ee, or
his or
her
respect
ive
affiliat
es and
associa
tes, or
others
acting
in
concert
therewi
th, on
the
other
hand,
includi
ng,
withou
t
limitati
on, all
inform
ation
that
would
be
require
d to be
disclos
ed
pursua
nt to
Item
404 of
Regula
tion S-
K
promul
gated
by the
SEC
(and
any
success
or
regulat
ion), if
any
Shareh
older
making
the
nomina
tion
and
any
Propos
ed
Nomin
ee
Associ
ated
Person
on
whose
behalf
the
nomina
tion is
made,
or any
affiliat
e or
associa
te
thereof
or
person
acting
in
concert
therewi
th,
were
the
"registr
ant"
for
purpos
es of
such
rule
and the
Propos
ed
Nomin
ee
were a
directo
r or
executi
ve
officer
of such
registra
nt, (10)
any
rights
to
dividen
ds on
the
Shares
owned
benefic
ially
by
such
Propos
ed
Nomin
ee or
such
Propos
ed
Nomin
ee
Associ
ated
Person
that are
separat
ed or
separa
ble
from
the
underl
ying
Shares,
(11) to
the
extent
known
by
such
Propos
ed
Nomin
ee or
such
Propos
ed
Nomin
ee
Associ
ated
Person,
the
name
and
address
of any
other
person
who
owns,
of
record
or
benefic
ially,
any
Shares
and
who
support
s the
Propos
ed
Nomin
ee for
electio
n or
reelecti
on as a
Trustee
and
(12) all
other
inform
ation
relatin
g to
such
Propos
ed
Nomin
ee or
such
Propos
ed
Nomin
ee
Associ
ated
Person
that is
require
d to be
disclos
ed in
solicita
tions
of
proxies
for
electio
n of
Trustee
s in an
electio
n
contest
(even
if an
electio
n
contest
is not
involve
d), or
is
otherw
ise
require
d, in
each
case,
pursua
nt to
Section
14 (or
any
success
or
provisi
on) of
the
Exchan
ge Act,
and the
rules
and
regulat
ions
promul
gated
thereun
der;
B. as to
any
other
busines
s that
the
Shareh
older
propos
es to
bring
before
the
meetin
g, (1) a
descrip
tion of
such
busines
s, (2)
the
reasons
for
proposi
ng
such
busines
s at the
meetin
g and
any
materia
l
interest
in such
busines
s of
such
Shareh
older
or any
Shareh
older
Associ
ated
Person
(as
defined
in
Section
8.12(b)
(viii)),
includi
ng any
anticip
ated
benefit
to such
Shareh
older
or any
Shareh
older
Associ
ated
Person
therefr
om, (3)
a
descrip
tion of
all
agreem
ents,
arrange
ments
and
underst
xxxxxx
s
betwee
n such
Shareh
older
and
Shareh
older
Associ
ated
Person
among
st
themse
lves or
with
any
other
person
or
person
s
(includ
ing
their
names)
in
connec
tion
with
the
propos
al of
such
busines
s by
such
Shareh
older
and (4)
a
represe
ntation
that
such
Shareh
older
intends
to
appear
in
person
or by
proxy
at the
meetin
g to
bring
the
busines
s
before
the
meetin
g;
C. separat
xxx as
to each
Shareh
older
giving
the
notice
and
any
Shareh
older
Associ
ated
Person,
(1) the
class,
series
and
numbe
r of all
Shares
that are
owned
of
record
by
such
Shareh
older
or by
such
Shareh
older
Associ
ated
Person,
if any,
(2) the
class,
series
and
numbe
r of,
and the
nomine
e
holder
for,
any
Shares
that are
owned,
directl
y or
indirec
tly,
benefic
ially
but not
of
record
by
such
Shareh
older
or by
such
Shareh
older
Associ
ated
Person,
if any,
(3)
with
respect
to the
Shares
referen
ced in
the
foregoi
ng
clauses
(1) and
(2), the
date
such
Shares
were
acquire
d,
whethe
r any
"tackin
g"
provisi
ons
contain
ed in
Section
8.12(b)
(ii)(B)(
1) are
being
relied
upon
and the
invest
ment
intent
of such
acquisi
tion,
and (4)
all
inform
ation
relatin
g to
such
Shareh
older
and
Shareh
older
Associ
ated
Person
that is
require
d to be
disclos
ed in
connec
tion
with
the
solicita
tion of
proxies
for
electio
n of
Trustee
s in an
electio
n
contest
(even
if an
electio
n
contest
is not
involve
d), or
is
otherw
ise
require
d, in
each
case,
pursua
nt to
Section
14 (or
any
success
or
provisi
on) of
the
Exchan
ge Act
and the
rules
and
regulat
ions
promul
gated
thereun
der;
D. separat
xxx as
to each
Shareh
older
giving
the
notice
and
any
Shareh
older
Associ
ated
Person,
(1) the
name
and
address
of such
Shareh
older,
as they
appear
on the
Trust's
share
ledger
and the
current
name
and
address
, if
differe
nt, of
such
Shareh
older
and
Shareh
older
Associ
ated
Person
and (2)
the
invest
ment
strateg
y or
objecti
ve, if
any, of
such
Shareh
older
or
Shareh
older
Associ
ated
Person
and a
copy
of the
prospe
ctus,
offerin
g
memor
andum
or
similar
docum
ent, if
any,
provid
ed to
investo
rs or
potenti
al
investo
rs in
such
Shareh
older
or
Shareh
older
Associ
ated
Person;
E. separat
xxx as
to each
Shareh
older
giving
the
notice
and
any
Shareh
older
Associ
ated
Person,
(1) a
descrip
tion of
all
purcha
ses and
sales
of
securiti
es of
the
Trust
by
such
Shareh
older
or
Shareh
older
Associ
ated
Person
during
the
previo
us 36
month
period,
includi
ng the
date of
the
transac
tions,
the
class,
series
and
numbe
r of
securiti
es
involve
d in the
transac
tions
and the
consid
eration
involve
d, (2) a
descrip
tion of
all
Derivat
ive
Transa
ctions
by
such
Shareh
older
or
Shareh
older
Associ
ated
Person
during
the
previo
us 36
month
period,
includi
ng the
date of
the
transac
tions
and the
class,
series
and
numbe
r of
securiti
es
involve
d in,
and the
materia
l
econo
mic
terms
of, the
transac
tions,
such
descrip
tion to
include
,
withou
t
limitati
on, all
inform
ation
that
such
Shareh
older
or
Shareh
older
Associ
ated
Person
would
be
require
d to
report
on an
Insider
Report
if such
Shareh
older
or
Shareh
older
Associ
ated
Person
were a
Trustee
of the
Trust
or the
benefic
ial
owner
of
more
than
10% of
any
class
or
series
of
Shares
at the
time of
the
transac
tions,
(3) any
perfor
xxxxx
related
fees
(other
than an
asset
based
fee) to
which
such
Shareh
older
or
Shareh
older
Associ
ated
Person
is
entitled
based
on any
increas
e or
decreas
e in the
value
of
Shares
or
instru
ment
or
arrange
ment
of the
type
contem
plated
within
the
definiti
on of
Derivat
ive
Transa
ction,
if any,
as of
the
date of
such
notice,
includi
ng,
withou
t
limitati
on, any
such
interest
s held
by
membe
rs of
such
Shareh
older's
or
Shareh
older
Associ
ated
Person
's
immed
iate
family
sharing
the
same
househ
old
with
such
Shareh
older
or
Shareh
older
Associ
ated
Person,
(4) any
proport
ionate
interest
in
Shares
or
instru
ment
or
arrange
ment
of the
type
contem
plated
within
the
definiti
on of
Derivat
ive
Transa
ction
held,
directl
y or
indirec
tly, by
a
general
or
limited
partner
ship in
which
such
Shareh
older
or
Shareh
older
Associ
ated
Person
is a
general
partner
or,
directl
y or
indirec
tly,
benefic
ially
owns
an
interest
in a
general
partner
and (5)
any
rights
to
dividen
ds on
the
Shares
owned
benefic
ially
by
such
Shareh
older
or
Shareh
older
Associ
ated
Person
that are
separat
ed or
separa
ble
from
the
underl
ying
Shares;
F. to the
extent
known
by the
Shareh
older
giving
the
notice,
the
name
and
address
of any
other
Person
who
owns,
benefic
ially or
of
record,
any
Shares
and
who
support
s the
nomine
e for
electio
n or
reelecti
on as a
Trustee
or the
propos
al of
other
busines
s; and
G. if more
than
one
class
or
series
of
Shares
is
outstan
ding,
the
class
and
series
of
Shares
entitled
to vote
for
such
Propos
ed
Nomin
ee
and/or
Shareh
older's
propos
al, as
applica
ble.
(vi) A notice of
one or more Shareholders
making a nomination
pursuant to Section
8.12(b)(ii)(B) or Section
8.12(b)(iii)(B) shall be
accompanied by:
A. a
signed
and
notariz
xx
xxxxxx
ent of
each
Shareh
older
giving
the
notice
certifyi
ng that
(1) all
inform
ation
contain
ed in
the
notice
is true
and
comple
te in all
respect
s, (2)
the
notice
compli
es with
this
Section
8.12(b)
, and
(3)
such
Shareh
older
will
continu
e to
hold
all
Shares
referen
ced in
Section
8.12(b)
(ii)(B)(
1) or
Section
8.12(b)
(iii)(B)
(1)(x),
as
applica
ble,
throug
h and
includi
ng the
time of
the
annual
meetin
g
(includ
ing any
adjour
nment
or
postpo
nement
thereof
); and
B. a
signed
and
notariz
ed
certific
ate of
each
Propos
ed
Nomin
ee (1)
certifyi
ng that
the
inform
ation
contain
ed in
the
notice
regardi
ng
such
Propos
ed
Nomin
ee and
any
Propos
ed
Nomin
ee
Associ
ated
Person
is true
and
comple
te and
compli
es with
this
Section
8.12(b)
and (2)
consen
ting to
being
named
in the
Shareh
older's
proxy
statem
ent as a
nomine
e and
to
serving
as a
Trustee
if
elected
..
(vii) Notwithst
xxxxxx anything in the
second sentence of
Section 8.12(b)(v) to the
contrary, in the event that
the number of Trustees to
be elected to the Board of
Trustees is increased and
there is no public
announcement of such
action at least 130 days
prior to the first
anniversary of the date of
the proxy statement for
the preceding year's
annual meeting, a
Shareholder's notice
required by this Section
8.12(b) also shall be
considered timely, but
only with respect to
nominees for any new
positions created by such
increase, if the notice is
delivered to the Secretary
at the principal executive
offices of the Trust not
later than 5:00 p.m.
(Eastern Time) on the
10th day immediately
following the day on
which such public
announcement is first
made by the Trust.
(viii) For
purposes of this Section
8.12, (i) "Shareholder
Associated Person" of
any Shareholder shall
mean (A) any Person
acting in concert with,
such Shareholder, (B) any
direct or indirect
beneficial owner of
Shares owned of record
or beneficially by such
Shareholder and (C) any
Person controlling,
controlled by or under
common control with
such Shareholder or a
Shareholder Associated
Person; (ii) "Proposed
Nominee Associated
Person" of any Proposed
Nominee shall mean (A)
any Person acting in
concert with such
Proposed Nominee, (B)
any direct or indirect
beneficial owner of
Shares owned of record
or beneficially by such
Proposed Nominee and
(C) any Person
controlling, controlled by
or under common control
with such Proposed
Nominee or a Proposed
Nominee Associated
Person; (iii) "Derivative
Transaction" by a Person
shall mean any (A)
transaction in, or
arrangement, agreement
or understanding with
respect to, any option,
warrant, convertible
security, stock
appreciation right or
similar right with an
exercise, conversion or
exchange privilege, or
settlement payment or
mechanism related to, any
security of the Trust, or
similar instrument with a
value derived in whole or
in part from the value of a
security of the Trust, in
any such case whether or
not it is subject to
settlement in a security of
the Trust or otherwise or
(B) any transaction,
arrangement, agreement
or understanding which
included or includes an
opportunity for such
person, directly or
indirectly, to profit or
share in any profit
derived from any increase
or decrease in the value
of any security of the
Trust, to mitigate any loss
or manage any risk
associated with any
increase or decrease in
the value of any security
of the Trust or to increase
or decrease the number of
securities of the Trust
which such person was, is
or will be entitled to vote,
in any such case whether
or not it is subject to
settlement in a security of
the Trust or otherwise;
and (iv) "Insider Report"
shall mean a statement
required to be filed
pursuant to Section 16 of
the Exchange Act (or any
successor provisions) by
a person who is a Trustee
of the Trust or who is
directly or indirectly the
beneficial owner of more
than 10% of any class of
Shares.
(c) Shareholder
Nominations or Other
Proposals Causing Covenant
Breaches or Defaults. At the
same time as the submission
of any Shareholder
nomination or proposal of
other business to be
considered at a Shareholders'
meeting that, if approved and
implemented by the Trust,
would cause the Trust or any
subsidiary (as defined in
Section 8.12(f)(iii)) of the
Trust to be in breach of any
covenant of the Trust or any
subsidiary of the Trust or
otherwise cause a default (in
any case, with or without
notice or lapse of time) in any
existing debt instrument or
agreement of the Trust or any
subsidiary of the Trust or
other material contract or
agreement of the Trust or any
subsidiary of the Trust, the
proponent Shareholder or
Shareholders shall submit to
the Secretary at the principal
executive offices of the Trust
(i) evidence satisfactory to
the Board of Trustees of the
lender's or contracting
party's willingness to waive
the breach of covenant or
default or (ii) a detailed plan
for repayment of the
indebtedness to the lender or
curing the contractual breach
or default and satisfying any
resulting damage claim,
specifically identifying the
actions to be taken or the
source of funds, which plan
must be satisfactory to the
Board of Trustees in its
discretion, and evidence of
the availability to the Trust of
substitute credit or
contractual arrangements
similar to the credit or
contractual arrangements
which are implicated by the
Shareholder nomination or
other proposal that are at
least as favorable to the
Trust, as determined by the
Board of Trustees in its
discretion. As an example
and not as a limitation, at the
time these Bylaws are being
amended and restated, the
Trust is party to a bank credit
facility that contains
covenants which prohibit
certain changes in the
management and policies of
the Trust without the
approval of the lender;
accordingly, a Shareholder
nomination or proposal
which implicates these
covenants shall be
accompanied by a waiver of
these covenants duly
executed by the bank or by
evidence satisfactory to the
Board of Trustees of the
availability of funding to the
Trust to repay outstanding
indebtedness under this credit
facility and of the availability
of a new credit facility on
terms as favorable to the
Trust as the existing credit
facility.
(d) Shareholder
Nominations or Other
Proposals Requiring
Governmental Action. If (i)
submission of any
Shareholder nomination or
proposal of other business to
be considered at a
Shareholders' meeting that
could not be considered or, if
approved, implemented by
the Trust without the Trust,
any subsidiary of the Trust,
the proponent Shareholder,
any Proposed Nominee of
such Shareholder, any
Proposed Nominee
Associated Person of such
Proposed Nominee, any
Shareholder Associated
Person of such Shareholder,
the holder of proxies or their
respective affiliates or
associates filing with or
otherwise notifying or
obtaining the consent,
approval or other action of
any federal, state, municipal
or other governmental or
regulatory body (a
"Governmental Action") or
(ii) such Shareholder's
ownership of Shares or any
solicitation of proxies or
votes or holding or exercising
proxies by such Shareholder,
any Proposed Nominee of
such Shareholder, any
Proposed Nominee
Associated Person of such
Proposed Nominee, any
Shareholder Associated
Person of such Shareholder,
or their respective affiliates
or associates would require
Governmental Action, then,
at the same time as the
submission of any
Shareholder nomination or
proposal of other business to
be considered at a
Shareholders' meeting, the
proponent Shareholder or
Shareholders shall submit to
the Secretary at the principal
executive offices of the Trust
(x) evidence satisfactory to
the Board of Trustees that
any and all Governmental
Action has been given or
obtained, including, without
limitation, such evidence as
the Board of Trustees may
require so that any nominee
may be determined to satisfy
any suitability or other
requirements or (y) if such
evidence was not obtainable
from a governmental or
regulatory body by such time
despite the Shareholder's
diligent and best efforts, a
detailed plan for making or
obtaining the Governmental
Action prior to the election of
any such Proposed Nominee
or the implementation of such
proposal, which plan must be
satisfactory to the Board of
Trustees in its discretion.
(e) Special Meetings
of Shareholders. As set forth
in Section 8.4, only business
brought before the meeting
pursuant to the Trust's notice
of meeting shall be conducted
at a special meeting of
Shareholders. Subject to the
requirements of the 1940 Act
or any other applicable laws,
nominations of individuals
for election to the Board of
Trustees only may be made at
a special meeting of
Shareholders at which
Trustees are to be elected: (i)
pursuant to the Trust's notice
of meeting; (ii) otherwise
properly brought before the
meeting by or at the direction
of the Board of Trustees; or
(iii) provided that the Board
of Trustees has determined
that Trustees shall be elected
at such special meeting, by
any Shareholder of the Trust
who is a Shareholder of
record both at the time of
giving of notice provided for
in this Section 8.12(e)
through and including the
time of the special meeting,
who is entitled to vote at the
meeting on such election and
who has complied with the
notice procedures and other
requirements set forth in this
Section 8.12(e). In the event
the Trust calls a special
meeting of Shareholders for
the purpose of having holders
of Preferred Shares, voting as
a separate class pursuant to
Section E(a) or E(b) of Part I
of Article X, elect one or
more Trustees to the Board of
Trustees, any such holder of
Preferred Shares may
nominate an individual or
individuals (as the case may
be) for election as a Trustee
as specified in the Trust's
notice of meeting, if the
Shareholder satisfies the
holding period and certificate
and/or evidence of being a
Beneficial Owner
requirements set forth in
Section 8.12(b)(ii) and
Section 8.12(b)(v), the
Shareholder's notice contains
or is accompanied by the
information and documents
required by Section 8.12 and
the Shareholder has given
timely notice thereof in
writing to the Secretary at the
principal executive offices of
the Trust. In the event the
Trust calls a special meeting
of Shareholders for the
purpose of having holders of
Common Shares and
Preferred Shares, voting
together as a single class,
elect one or more Trustees to
the Board of Trustees, any
such Shareholder may
nominate an individual or
individuals (as the case may
be) for election as a Trustee
as specified in the Trust's
notice of meeting, if the
Shareholder satisfies the
holding period and certificate
and/or evidence of being a
Beneficial Owner
requirements set forth in
Section 8.12(b)(iii) and
Section 8.12(b)(v), the
Shareholder's notice contains
or is accompanied by the
information and documents
required by Section 8.12 and
the Shareholder has given
timely notice thereof in
writing to the Secretary at the
principal executive offices of
the Trust. To be timely, a
Shareholder's notice shall be
delivered to the Secretary at
the principal executive
offices of the Trust not earlier
than the 150th day prior to
such special meeting and not
later than 5:00 p.m. (Eastern
Time) on the later of (i) the
120th day prior to such
special meeting or (ii) the
10th day following the day
on which public
announcement is first made
of the date of the special
meeting and of the nominees
proposed by the Trustees to
be elected at such meeting.
Neither the postponement or
adjournment of a special
meeting, nor the public
announcement of such
postponement or
adjournment, shall
commence a new time period
for the giving of a
Shareholder's notice as
described above.
(f) General.
(i) If
information submitted
pursuant to this Section
8.12 by any Shareholder
proposing a nominee for
election as a Trustee or
any proposal for other
business at a meeting of
Shareholders shall be
deemed by the Board of
Trustees incomplete or
inaccurate, any
authorized officer or the
Board of Trustees or any
Committee may treat
such information as not
having been provided in
accordance with this
Section 8.12. Any notice
submitted by a
Shareholder pursuant to
this Section 8.12 that is
deemed by the Board of
Trustees inaccurate,
incomplete or otherwise
fails to satisfy completely
any provision of this
Section 8.12 shall be
deemed defective and
shall thereby render all
proposals and
nominations set forth in
such notice defective.
Upon written request by
the Secretary or the Board
of Trustees or any
Committee (which may
be made from time to
time), any Shareholder
proposing a nominee for
election as a Trustee or
any proposal for other
business at a meeting of
Shareholders shall
provide, within three
business days after such
request (or such other
period as may be
specified in such request),
(A) written verification,
satisfactory to the
Secretary or any other
authorized officer or the
Board of Trustees or any
Committee, in his, her or
its discretion, to
demonstrate the accuracy
of any information
submitted by the
Shareholder pursuant to
this Section 8.12, (B)
written responses to
information reasonably
requested by the
Secretary, the Board of
Trustees or any
Committee and (C) a
written update, to a
current date, of any
information submitted by
the Shareholder pursuant
to this Section 8.12 as of
an earlier date. If a
Shareholder fails to
provide such written
verification, information
or update within such
period, the Secretary or
any other authorized
officer or the Board of
Trustees may treat the
information which was
previously provided and
to which the verification,
request or update relates
as not having been
provided in accordance
with this Section 8.12;
provided, however, that
no such written
verification, response or
update shall cure any
incompleteness,
inaccuracy or failure in
any notice provided by a
Shareholder pursuant to
this Section 8.12. It is the
responsibility of a
Shareholder who wishes
to make a nomination or
other proposal to comply
with the requirements of
Section 8.12; nothing in
this Section 8.12(f)(i) or
otherwise shall create any
duty of the Trust, the
Board of Trustees or any
Committee nor any
officer of the Trust to
inform a Shareholder that
the information submitted
pursuant to this Section
8.12 by or on behalf of
such Shareholder is
incomplete or inaccurate
or not otherwise in
accordance with this
Section 8.12 nor require
the Trust, the Board of
Trustees, any Committee
or any officer of the Trust
to request clarification or
updating of information
provided by any
Shareholder, but the
Board of Trustees, a
Committee or the
Secretary acting on behalf
of the Board of Trustees
or a Committee, may do
so in its, his or her
discretion.
(ii) Only such
individuals who are
nominated in accordance
with this Section 8.12
shall be eligible for
election by Shareholders
as Trustees and only such
business shall be
conducted at a meeting of
Shareholders as shall
have been properly
brought before the
meeting in accordance
with this Section 8.12.
The chairperson of the
meeting and the Board of
Trustees shall each have
the power to determine
whether a nomination or
any other business
proposed to be brought
before the meeting was
made or proposed, as the
case may be, in
accordance with this
Section 8.12 and, if any
proposed nomination or
other business is
determined not to be in
compliance with this
Section 8.12, to declare
that such defective
nomination or proposal
be disregarded.
(iii) For
purposes of this Section
8.12: (A) "public
announcement" shall
mean disclosure in (1) a
press release reported by
the Dow Xxxxx News
Service, Associated Press,
Business Wire, PR
Newswire or any other
widely circulated news or
wire service or (2) a
document publicly filed
by the Trust with the SEC
pursuant to the Exchange
Act; and (B) "subsidiary"
shall include, with respect
to a person, any
corporation, partnership,
joint venture or other
entity of which such
person (1) owns, directly
or indirectly, 10% or
more of the outstanding
voting securities or other
interests or (2) has a
person designated by
such person serving on,
or a right, contractual or
otherwise, to designate a
person, so to serve on, the
board of directors (or
analogous governing
body).
(iv) Notwithsta
nding the foregoing
provisions of this Section
8.12, a Shareholder shall
also comply with all
applicable legal
requirements, including,
without limitation,
applicable requirements
of state law, the 1940 Act
and the Exchange Act and
the rules and regulations
thereunder, with respect
to the matters set forth in
this Section 8.12.
Nothing in this Section
8.12 shall be deemed to
require that a Shareholder
nomination of an
individual for election to
the Board of Trustees or a
Shareholder proposal
relating to other business
be included in the Trust's
proxy statement, except
as may be required by
law.
(v) The Board
of Trustees may from
time to time require any
individual nominated to
serve as a Trustee to
agree in writing with
regard to matters of
business ethics and
confidentiality while such
nominee serves as a
Trustee, such agreement
to be on the terms and in
a form (the "Agreement")
determined satisfactory
by the Board of Trustees,
as amended and
supplemented from time
to time in the discretion
of the Board of Trustees.
The terms of the
Agreement may be
substantially similar to
the Code of Business
Conduct and Ethics of the
Trust or any similar code
promulgated by the Trust
(the "Code of Business
Conduct") or may differ
from or supplement the
Code of Business
Conduct.
(vi) Determinat
ions required or permitted
to be made under this
Section 8.12 by the Board
of Trustees may be
delegated by the Board of
Trustees to a Committee,
subject to applicable law.
8.13 No Shareholder
Actions by Written Consent.
Shareholders shall not be authorized
or permitted to take any action
required or permitted to be taken at a
meeting of Shareholders by written
consent, and may take such action
only at Shareholders meeting of the
Trust.
8.14 Voting by Ballot.
Voting on any question or in any
election may be voice vote unless the
chairperson of the meeting or any
Shareholder shall demand that voting
be by ballot.
8.15 Proposals of Business
Which Are Not Proper Matters For
Action By Shareholders.
Notwithstanding anything in these
Bylaws to the contrary, subject to the
1940 Act and any other applicable
law, any Shareholder proposal for
business the subject matter or effect
of which would be within the
exclusive purview of the Board of
Trustees or would reasonably likely,
if considered by the Shareholders or
approved or implemented by the
Trust, result in an impairment of the
limited liability status for the Trust's
Shareholders, shall be deemed not to
be a matter upon which the
Shareholders are entitled to vote.
The Board of Trustees in its
discretion shall be entitled to
determine whether a Shareholder
proposal for business is not a matter
upon which the Shareholders are
entitled to vote pursuant to this
Section 8.15, and its decision shall
be final and binding unless
determined by a court of competent
jurisdiction to have been made in bad
faith.
ARTICLE IX
MISCELLANEOUS
9.1 Amendment of
Bylaws. Except for any change for
which these Bylaws requires
approval by more than a majority
vote of the Trustees, these Bylaws
may be amended, changed, altered or
repealed, in whole or part, only by
resolution of the Board of Trustees at
any meeting of the Board of Trustees
at which a quorum is present, or by a
written consent signed by a majority
of the Trustees then in office.
9.2 Waiver of Notice.
Whenever any notice is required to
be given pursuant to the Declaration
of Trust, these Bylaws, the 1940 Act
or any other applicable law, a waiver
thereof in writing, signed by the
person or persons entitled to such
notice, or a waiver by electronic
transmission by the person or
persons entitled to such notice,
whether before or after the time
stated therein, shall be deemed
equivalent to the giving of such
notice. Neither the business to be
transacted at nor the purpose of any
meeting need be set forth in the
waiver of notice or waiver by
electronic transmission, unless
specifically required by statute. The
attendance of any person at any
meeting shall constitute a waiver of
notice of such meeting, except where
such person attends a meeting for the
express purpose of objecting to the
transaction of any business on the
ground that the meeting is not
lawfully called or convened.
9.3 Ratification. The
Board of Trustees or the
Shareholders may ratify and make
binding on the Trust any action or
inaction by the Trust or its officers to
the extent that the Board of Trustees
or the Shareholders could have
originally authorized the matter.
Moreover, any action or inaction
questioned in any Shareholder's
derivative proceeding or any other
proceeding on the ground of lack of
authority, defective or irregular
execution, adverse interest of a
Trustee, officer or Shareholder, non-
disclosure, miscomputation, the
application of improper principles or
practices of accounting, or otherwise,
may be ratified, before or after
judgment, by the Board of Trustees
or by the Shareholders and, if so
ratified, shall have the same force
and effect as if the questioned action
or inaction had been originally duly
authorized, and such ratification
shall be binding upon the Trust and
its Shareholders and shall constitute
a bar to any claim or execution of
any judgment in respect of such
questioned action or inaction.
9.4 Ambiguity. In the
case of an ambiguity in the
application of any provision of these
Bylaws or any definition contained
in these Bylaws, the Board of
Trustees shall have the sole power to
determine the application of such
provisions with respect to any
situation based on the facts known to
it and such determination shall be
final and binding unless determined
by a court of competent jurisdiction
to have been made in bad faith.
9.5 Construction. If any
provision of these Bylaws is
determined to be unlawful by a court
or regulatory body of competent
jurisdiction, the remainder of these
Bylaws shall remain in full force and
effect and the offending provision
shall be construed to achieve the
purpose of the offending provision to
the extent legally possible. The re-
construction of an unlawful
provision shall be made by the Board
of Trustees, or, in the absence of
action by the Board of Trustees, by
the court or regulatory body which
determined the provision to be
unlawful. These Bylaws shall be
subject to and construed accordance
with the 1940 Act. In the event of a
conflict between any provision of
these Bylaws and the 1940 Act, such
provision shall be construed to
achieve the purpose of the provision
to the extent legally possible under
the 1940 Act.
9.6 Inspection of Bylaws.
The Trustees shall keep at the
principal office for the transaction of
business of the Trust the original or a
copy of the Bylaws as amended or
otherwise altered to date, certified by
the Secretary, which shall be open to
inspection by the Shareholders at all
reasonable times during office hours.
ARTICLE X
PREFERRED SHARES OF
BENEFICIAL INTEREST
10.1 Statement Creating
Five Series of Preferred Shares.
DESIGNATION
Series F: 1,000 preferred
shares, par value $.0001 per share,
liquidation preference $25,000 per
share plus an amount equal to
accumulated but unpaid distributions
thereon (whether or not earned or
declared), are hereby designated
auction preferred shares, Series F
(the "Series F"). Each share of the
Series F shall have an Applicable
Rate for its Initial Rate Period
determined pursuant to a resolution
of the Board of Trustees and an
initial Distribution Payment Date
that shall be set pursuant to a
resolution of the Board of Trustees.
The shares of Series F shall
constitute a separate series of
Preferred Shares of the Trust.
Series M: 15,000 preferred
shares, par value $.0001 per share,
liquidation preference $25,000 per
share plus an amount equal to
accumulated but unpaid distributions
thereon (whether or not earned or
declared), are hereby designated
auction preferred shares, Series M
(the "Series M"). Each share of the
Series M shall have an Applicable
Rate for its Initial Rate Period
determined pursuant to a resolution
of the Board of Trustees and an
initial Distribution Payment Date
that shall be set pursuant to a
resolution of the Board of Trustees.
The shares of Series M shall
constitute a separate series of
Preferred Shares of the Trust.
Series T: 3,000 preferred
shares, par value $.0001 per share,
liquidation preference $25,000 per
share plus an amount equal to
accumulated but unpaid distributions
thereon (whether or not earned or
declared), are hereby designated
auction preferred shares, Series T
(the "Series T"). Each share of the
Series T shall have an Applicable
Rate for its Initial Rate Period
determined pursuant to a resolution
of the Board of Trustees and an
initial Distribution Payment Date
that shall be set pursuant to a
resolution of the Board of Trustees.
The shares of Series T shall
constitute a separate series of
Preferred Shares of the Trust.
Series Th: 8,000 preferred
shares, par value $.0001 per share,
liquidation preference $25,000 per
share plus an amount equal to
accumulated but unpaid distributions
thereon (whether or not earned or
declared), are hereby designated
auction preferred shares, Series Th
(the "Series Th"). Each share of the
Series Th shall have an Applicable
Rate for its Initial Rate Period
determined pursuant to a resolution
of the Board of Trustees and an
initial Distribution Payment Date
that shall be set pursuant to a
resolution of the Board of Trustees.
The shares of Series Th shall
constitute a separate series of
Preferred Shares of the Trust.
Series W: 8,000 preferred
shares, par value $.0001 per share,
liquidation preference $25,000 per
share plus an amount equal to
accumulated but unpaid distributions
thereon (whether or not earned or
declared), are hereby designated
auction preferred shares, Series W
(the "Series W", together with
Series T, Series TH, Series F, and
Series M, each a "Series" and
collectively, the "Preferred Shares").
Each share of the Series W shall
have an Applicable Rate for its
Initial Rate Period determined
pursuant to a resolution of the Board
of Trustees and an initial
Distribution Payment Date that shall
be set pursuant to a resolution of the
Board of Trustees. The shares of
Series W shall constitute a separate
series of Preferred Shares of the
Trust.
Preferred Shares may be
marketed under the name "auction
preferred shares" or "Preferred
Shares" or such other name as the
Board of Trustees may approve from
time to time.
Each Preferred Share shall
have such other preferences, rights,
voting powers, restrictions,
limitations as to distributions,
qualifications and terms and
conditions of redemption, in addition
to those required by applicable law,
as are set forth in Parts I and II of
Article X of these Bylaws. Subject
to the provisions of Section E(c) of
Part I hereof, the Board of Trustees
of the Trust may, in the future,
reclassify additional shares of the
Trust's capital shares as Preferred
Shares, with the same preferences,
rights, voting powers, restrictions,
limitations as to distributions,
qualifications and terms and
conditions of redemption and other
terms herein described, except that
the Applicable Rate for the Initial
Rate Period, its initial Payment Date
and any other changes in the terms
herein set forth shall be as set forth
in the Bylaws reclassifying such
shares as Preferred Shares.
Capitalized terms used in
Parts I and II of Article X of these
Bylaws shall have the meanings
(with the terms defined in the
singular having comparable
meanings when used in the plural
and vice versa) provided in the
"Definitions" section immediately
following, unless the context
otherwise requires.
DEFINITIONS
As used in Parts I and II of
Article X of these Bylaws, the
following terms shall have the
following meanings (with terms
defined in the singular having
comparable meanings when used in
the plural and vice versa), unless the
context otherwise requires:
(a) "AUDITOR'S
CONFIRMATION" shall
have the meaning specified in
paragraph (c) of Section G of
Part I.
(b) "AFFILIATE"
shall mean, for purposes of
the definition of
"Outstanding," any Person
known to the Auction Agent
to be controlled by, in control
of or under common control
with the Trust; provided,
however, that for purposes of
these Bylaws no Broker-
Dealer controlled by, in
control of or under common
control with the Trust shall
be deemed to be an Affiliate
nor shall any corporation or
any Person controlled by, in
control of or under common
control with such
corporation, one of the
trustees, directors, or
executive officers of which is
a Trustee of the Trust, be
deemed to be an Affiliate
solely because such trustee,
director or executive officer
is also a Trustee of the Trust.
(c) "AGENT
MEMBER" shall mean a
member of or participant in
the Securities Depository that
will act on behalf of a Bidder.
(d) "ALL HOLD
RATE" shall mean 80% of
the Reference Rate.
(e) "ANNUAL
VALUATION DATE" shall
mean the last Business Day
of December of each year.
(f) "APPLICABLE
PERCENTAGE" shall mean
the percentage determined
based on the lower of the
credit ratings assigned to the
Preferred Shares on such date
by Xxxxx'x and Fitch as
follows:
With respect to Series F:
Credit
Ratings
Applicable
Xxxxx'x Fitch
Percentage
Aa3 or higher
AA- or higher
200%
A3 to A1
A- to A+
250%
Baa3 to Baa1
BBB- to BBB+
275%
Ba 1 and
lower
BB+ and lower
325%
With respect to Series M, T,
Th and W:
Credit
Ratings
Applicable
Xxxxx'x Fitch
Percentage
Aa3 or higher
AA- or higher
150%
A3 to A1
A- to A+
200%
Baa3 to Baa1
BBB- to BBB+
225%
Ba 1 and
lower
BB+ and lower
275%
For purposes of this
definition, the "prevailing
rating" of the Preferred
Shares shall be (i) Aaa/AAA
if such shares have a rating of
Aaa by Moody's and AAA
by Fitch or the equivalent of
such ratings by such agencies
or a substitute rating agency
or substitute rating agencies;
(ii) if not Aaa/AAA, then
Aa3/AA- if such shares have
a rating of Aa3 or better by
Moody's and AA- or better
by Fitch or the equivalent of
such rating by such agencies
or a substitute rating agency
or substitute rating agencies,
(iii) if not Aa3/AA- or higher,
then A3/A- if such shares
have a rating of A3 or better
by Moody's and A- or better
by Fitch or the equivalent of
such ratings by such agencies
or a substitute rating agency
or substitute rating agencies,
(iv) if not A3/A- or higher,
then Baa3/BBB- if such
shares have a rating of Baa3
or better by Moody's and
BBB- or better by Fitch or
the equivalent of such ratings
by such agencies or substitute
rating agency or substitute
rating agencies, (v) if not
Baa3/BBB- or higher, then
below Baa3/BBB-.
The Applicable
Percentage as so determined
shall be further subject to
upward but not downward
adjustment in the discretion
of the Board of Trustees of
the Trust after consultation
with the Broker-Dealers,
provided that immediately
following any such increase
the Trust would be in
compliance with the
Preferred Shares Basic
Maintenance Amount. The
Trust shall take all reasonable
action necessary to enable
Moody's and Fitch to provide
a rating for the Preferred
Shares. If Xxxxx'x or Fitch
shall not make such a rating
available, the Trust shall
select another rating agency
to act as a substitute rating
agency. Notwithstanding the
foregoing, the Trust shall not
be required to have more than
one rating agency provide a
rating for the Preferred
Shares.
(g) "APPLICABLE
RATE" shall mean, for each
Rate Period (i) if Sufficient
Clearing Orders exist for the
Auction in respect thereof,
the Winning Bid Rate, (ii) if
Sufficient Clearing Orders do
not exist for the Auction in
respect thereof, the
Maximum Rate, and (iii) in
the case of any Distribution
Period if all the Preferred
Shares are the subject of
Submitted Hold Orders for
the Auction in respect
thereof, the All Hold Rate.
(h) "APPLICABLE
SPREAD" means the spread
determined based on the
credit rating assigned to
Preferred Shares on such date
by Xxxxx'x (if Xxxxx'x is
then rating the Preferred
Shares) and Fitch (if Fitch is
then rating the Preferred
Shares) as follows:
With respect to Series F:
Credit
Ratings
Applicable
Xxxxx'x Fitch
Spread
Aa3 or higher
AA- or higher
200 bps
A3 to A1
A- to A+
250 bps
Baa3 to Baa1
BBB- to BBB+
275 bps
Ba 1 and
lower
BB+ and lower
325 bps
With respect to Series M, T,
Th, and W:
Credit
Ratings
Applicable
Xxxxx'x Fitch
Spread
Aa3 or higher
AA- or higher
150 bps
A3 to A1
A- to A+
200 bps
Baa3 to Baa1
BBB- to BBB+
225 bps
Ba 1 and
lower
BB+ and lower
275 bps
For purposes of this
definition, the "prevailing
rating" of the Preferred
Shares shall be (i) Aaa/AAA
if such shares have a rating of
AaaAAA by Moody's and
AAA by Fitch or the
equivalent of such ratings by
such agencies or a substitute
rating agency or substitute
rating agencies,; (ii) if not
Aaa/AAA, then Aa3/AA- if
such shares have a rating of
Aa3AA- or better by
Moody's and AA- or better
by Fitch or the equivalent of
such rating by such agencies
or a substitute rating agency
or substitute rating agencies,
(iii) if not Aa3/AA- or higher,
then A3/A- if such shares
have a rating of A3A- or
better by Moody's and A- or
better by Fitch or the
equivalent of such ratings by
such agencies or a substitute
rating agency or substitute
rating agencies, (iv) if not
A3/A- or higher, then
Baa3/BBB- if such shares
have a rating of Baa3BBB- or
better by Moody's and BBB-
or better by Fitch or the
equivalent of such ratings by
such agencies or substitute
rating agency or substitute
rating agencies, (v) if not
Baa3/BBB- or higher, then
below Baa3/BBB-.
The Applicable
Spread as so determined shall
be further subject to upward
but not downward adjustment
in the discretion of the Board
of Trustees after consultation
with the Broker-Dealers,
provided that immediately
following any such increase
the Trust would be in
compliance with the
Preferred Shares Basic
Maintenance Amount.
(i) "AUCTION"
shall mean each periodic
implementation of the
Auction Procedures.
(j) "AUCTION
AGENCY AGREEMENT"
shall mean the agreement
between the Trust and the
Auction Agent which
provides, among other things,
that the Auction Agent will
follow the Auction
Procedures for purposes of
determining the Applicable
Rate for the Preferred Shares
so long as the Applicable
Rate for such Preferred
Shares is to be based on the
results of an Auction.
(k) "AUCTION
AGENT" shall mean the
entity appointed as such by a
resolution of the Board of
Trustees in accordance with
Section F of Part II of Article
X.
(l) "AUCTION
DATE" with respect to any
Rate Period, shall mean the
Business Day next preceding
the first day of such Rate
Period.
(m) "AUCTION
PROCEDURES" shall mean
the procedures for conducting
Auctions set forth in Part II
of Article X.
(n) "AVAILABLE
PREFERRED SHARES"
shall have the meaning
specified in paragraph (a) of
Section C of Part II of Article
X.
(o) "BENEFICIAL
OWNER" with respect to
shares of Preferred Shares,
means a customer (including
broker dealers that are not
Broker Dealers) of a Broker-
Dealer who is listed on the
records of that Broker-Dealer
(or, if applicable, the Auction
Agent) as a holder of
Preferred Shares.
(p) "BID" and
"BIDS" shall have the
respective meanings specified
in paragraph (a) of Section A
of Part II of Article X.
(q) "BIDDER" and
"BIDDERS" shall have the
respective meanings specified
in paragraph (a) of Section A
of Part II of Article X;
provided, however, that
neither the Trust nor any
affiliate thereof shall be
permitted to be a Bidder in an
Auction, except that any
Broker-Dealer that is an
affiliate of the Trust may be a
Bidder in an Auction, but
only if the Orders placed by
such Broker-Dealer are not
for its own account.
(r) "BOARD OF
TRUSTEES" shall mean the
Board of Trustees of the
Trust or any duly authorized
committee thereof.
(s) "BROKER-
DEALER" shall mean any
broker-dealer, commercial
bank or other entity permitted
by law to perform the
functions required of a
Broker-Dealer in Part II of
Article X, 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 Trust and has entered
into a Broker-Dealer
Agreement that remains
effective.
(t) "BROKER-
DEALER AGREEMENT"
shall mean an agreement
between the Auction Agent
and a Broker-Dealer pursuant
to which such Broker-Dealer
agrees to follow the
procedures specified in Part
II of Article X.
(u) "BUSINESS
DAY" shall mean a day on
which the New York Stock
Exchange is open for trading
and which is neither a
Saturday, Sunday nor any
other day on which banks in
New York, New York, are
authorized or obligated by
law to close.
(v) "CLOSING
TRANSACTION" shall have
the meaning specified in
paragraph (a)(i)(A) of
Section M of Part I of Article
X.
(w) "CODE" means
the Internal Revenue Code of
1986, as amended.
(x) "COMMON
SHARES" shall mean the
outstanding common shares,
par value $.001 per share, of
the Trust.
(y) "CURE DATE"
shall mean the Preferred
Shares Basic Maintenance
Cure Date or the 1940 Act
Cure Date, as the case may
be.
(z) "DATE OF
ORIGINAL ISSUE" with
respect to the Preferred
Shares, shall mean the date
on which the Trust initially
issued such shares.
(aa) "DECLARATI
ON OF TRUST" shall have
the meaning specified on the
first page.
(bb) "DEPOSIT
SECURITIES" shall mean
cash and any obligations or
securities, including Short
Term Money Market
Instruments that are Eligible
Assets, rated at least AAA or
F-1 by Fitch, X-0, XXX-0 xx
XXXX-0 by Xxxxx'x or
AAA or A-1 by S&P.
(cc) "DISCOUNTE
D VALUE" as of any
Valuation Date, shall mean,
(i) with respect to a Fitch
Eligible Asset or Xxxxx'x
Eligible Asset that is not
currently callable or
prepayable as of such
Valuation Date at the option
of the issuer thereof, the
quotient of the Market Value
thereof divided by the Fitch
Discount Factor for a Fitch
Eligible Asset or Moody's
Discount Factor for a
Moody's Eligible Asset, (ii)
with respect to a Fitch
Eligible Asset or Xxxxx'x
Eligible Asset that is
currently callable as of such
Valuation Date at the option
of the issuer thereof, the
quotient as calculated above
or the call price, plus accrued
interest or distributions, as
applicable, whichever is
lower, and (iii) with respect
to a Fitch Eligible Asset or
Moody's Eligible Asset that
is prepayable, the quotient as
calculated above or the par
value, plus accrued interest or
distribution, as applicable,
whichever is lower.
(dd) "DISTRIBUTI
ON PAYMENT DATE" with
respect to the Preferred
Shares, shall mean any date
on which distributions are
payable on the Preferred
Shares pursuant to the
provisions of paragraph (d) of
Section B of Part I of Article
X.
(ee) "DISTRIBUTI
ON PERIOD," with respect
to the Preferred Shares, shall
mean the period from and
including the Date of
Original Issue of shares of a
Series to but excluding the
initial Distribution Payment
Date for shares of such Series
and thereafter any period
from and including one
Distribution Payment Date
for shares of such Series to
but excluding the next
succeeding Distribution
Payment Date for shares of
such Series.
(ff) "EXISTING
HOLDER," with respect to
shares of Preferred Shares,
shall mean a Broker-Dealer
(or any such other Person as
may be permitted by the
Trust) that is listed on the
records of the Auction Agent
as a holder of shares of any
Series.
(gg) "EXPOSURE
PERIOD" shall mean the
period commencing on a
given Valuation Date and
ending 45 days thereafter.
(hh) "FAILURE TO
DEPOSIT," with respect to
shares of a Series, shall mean
a failure by the Trust to pay
to the Auction Agent, not
later than 12:00 noon,
Eastern time, (A) on any
Distribution Payment Date
for shares of such Series, in
funds available on such
Distribution Payment Date in
New York, New York, the
full amount of any
distribution (whether or not
earned or declared) to be paid
on such Distribution Payment
Date on any share of such
Series or (B) on any
redemption date in funds
available on such redemption
date for shares of such series
in New York, New York, the
Redemption Price to be paid
on such redemption date for
any share of such Series after
notice of redemption is
mailed pursuant to paragraph
(c) of Section K of Part I of
Article X; provided,
however, that the foregoing
clause (B) shall not apply to
the Trust's failure to pay the
Redemption Price in respect
of Preferred Shares when the
related Notice of Redemption
provides that redemption of
such shares is subject to one
or more conditions precedent
and any such condition
precedent shall not have been
satisfied at the time or times
and in the manner specified
in such Notice of
Redemption.
(ii) "FITCH" shall
mean Fitch Ratings and its
successors.
(jj) "FITCH
DISCOUNT FACTOR"
means for the purposes of
determining the Preferred
Shares Basic Maintenance
Amount, the percentage
determined below:
(i) Common
Stock and Preferred Stock
of REITs and Other Real
Estate Companies:
DISCOUNT FACTOR (1)
REIT or Other Real
Estate Company
Preferred Shares
154%
REIT or Other Real
Estate Company
Common Shares
196%
(ii) Common
Stocks and Warrants:
The Fitch Discount
Factor applied to
common stock other than
REIT common stock and
the common stock of
other real estate
companies is:
Large-cap stocks:
200%
Mid-cap stocks:
233%
Small-cap stocks:
286%
Others:
370%
Small-cap
stocks
refer to
stocks
with a
market
capitalizati
on
between
$300
million to
$2 billion.
Mid-cap
stocks
refer to
stocks
with a
market
capitalizati
on
between
$2 billion
to $10
billion.
Large-cap
stocks are
companies
having a
market
capitalizati
on greater
than $10
billion.
(iii) Preferred
Stock: The Fitch
Discount Factor applied
to preferred stock other
than REIT preferred stock
and the preferred stock of
other real estate
companies is the
percentage determined by
reference to the rating in
accordance with the table
set forth below:
PREFERRED STOCK (1)
DISCOUNT
FACTOR
AAA
130%
AA
133%
A
135%
BBB
139%
BB
154%
Not rated or below BB
161%
Investment grade Dividends Received Deduction ("DRD")
164%
Not rated or below investment grade DRD
200%
(iv) Corporate
Debt Securities (1)(2):
MATURITY
IN YEARS
AAA
AA
A
BBB
BB
B
Unrated(1)
1 or less
111%
114%
117%
120%
121%
127%
130%
2 or less (but
longer than
1)
116%
123%
125%
127%
132%
137%
141%
3 or less (but
longer than
2)
121%
125%
127%
131%
133%
140%
152%
4 or less (but
longer than
3)
126%
126%
129%
132%
136%
144%
164%
5 or less (but
longer than
4)
131%
132%
135%
139%
144%
149%
185%
7 or less (but
longer than
5)
140%
143%
146%
152%
159%
167%
228%
10 or less
(but longer
than 7)
141%
145%
147%
153%
160%
168%
232%
12 or less
(but longer
than 10)
144%
147%
150%
157%
165%
174%
249%
15 or less
(but longer
than 12)
148%
151%
155%
163%
172%
182%
274%
Greater than
20
152%
156%
160%
169%
180%
191%
306%
(1) If a security is unrated by
Fitch, but is rated by two other
NRSROs, then the lower of the
ratings on the security from
the two other NRSROs should
be used to determine the Fitch
Discount Factor. If the
security is not rated by Fitch,
but has a rating from only one
other NRSRO, and the security
is above investment grade, the
other rating will be used. If
the security is not rated by
Fitch, but has a rating from
only one other NRSRO, and
the security is below
investment grade, then the
security will use the
percentages set forth in the
unrated column above.
(2) The Fitch Discount Factors
will also apply to interest rate
swaps and caps, whereby the
rating on the counterparty will
determine the appropriate
Discount Factor to apply.
(v) Convertible
Securities:
The Fitch
Discount Factor applied
to convertible securities is
(A) 200% for investment
grade convertibles and
(B) 222% for below
investment grade
convertibles so long as
such convertible
securities have neither (x)
conversion premiums
greater than 100% nor (y)
a yield to maturity or
yield to worst of greater
than the comparable term
Treasury yields plus 15
percentage points.
The Fitch
Discount Factor applied
to convertible securities
which have conversion
premiums of greater than
100% is (A) 152% for
investment grade
convertibles, and (B)
179% for below
investment grade
convertibles so long as a
such convertible
securities do not have a
yield to maturity or yield
to worst of greater than
comparable term
Treasury yields plus 15
percentage points.
The Fitch
Discount Factor applied
to convertible securities
that have a yield to
maturity or yield to worst
of greater than the
comparable term
Treasury yield plus 15
percentage points is
370%.
(vi) U.S.
Treasury Securities:
REMAINING
TERM TO
MATURITY
DISCOUNT
FACTOR
1 year or less
101.5%
2 years or less
(but longer than 1
year)
103%
3 years or less
(but longer than 2
years)
105%
4 years or less
(but longer than 3
years)
107%
5 years or less
(but longer than 4
years)
109%
7 years or less
(but longer than 5
years)
112%
10 years or less
(but longer than 7
years)
114%
15 years or less
(but longer than
10 years)
122%
20 years or less
(but longer than
15 years)
130%
25 years or less
(but longer than
20 years)
146%
30 years or less
(but longer than
25 years)
154%
(vii) Short-
Term Instruments and
Cash: The Fitch Discount
Factor applied to short-
term portfolio securities,
including without
limitation Debt
Securities, Short Term
Money Market
Instruments and
municipal debt
obligations, will be
(A) 100%, so long as
such portfolio securities
mature or have a demand
feature at par exercisable
within the Fitch Exposure
Period; (B) 115%, so long
as such portfolio
securities mature or have
a demand feature at par
not exercisable within the
Fitch Exposure Period;
and (C) 125%, so long as
such portfolio securities
neither mature nor have a
demand feature at par
exercisable within the
Fitch Exposure Period. A
Fitch Discount Factor of
100% will be applied to
cash.
(viii) Rule
144A Securities: The
Fitch Discount Factor
applied to Rule 144A
Securities shall be the
Discount Factor
determined in accordance
with the table above
under "Corporate Debt
Securities" in subsection
(iv), multiplied by 110%
until such securities are
registered under the
Securities Act of 1933, as
amended from time to
time.
(ix) Asset-
backed and mortgage-
backed securities: The
percentage determined by
reference to the asset type
in accordance with the
table set forth below.
Asset Type (with time remaining to maturity, if applicable)
Discount Factor
U.S. Treasury/agency securities (10 years or less)
118%
U.S. Treasury/agency securities (greater than 10 years)
127%
U.S. agency sequentials (10 years or less)
128%
U.S. agency sequentials (greater than 10 years)
142%
U.S. agency principal only securities
236%
U.S. agency interest only securities (with Market Value greater than 40% of
par)
696%
U.S. agency interest only securities (with Market Value less than or equal to
40% of par)
214%
AAA LockOut securities, interest only
236%
U.S. agency planned amortization class bonds (10 years or less)
115%
U.S. agency planned amortization class bonds (greater than 10 years)
136%
AAA sequentials (10 years or less)
118%
AAA sequentials (greater than 10 years)
135%
AAA planned amortization class bonds (10 years or less)
115%
AAA planned amortization class bonds (greater than 10 years)
140%
Jumbo mortgage rated AAA(1)
123%
Jumbo mortgage rated AA(1)
130%
Jumbo mortgage rated A(1)
136%
Jumbo mortgage rated BBB(1)
159%
Commercial mortgage-backed securities rated AAA
131%
Commercial mortgage-backed securities rated AA
139%
Commercial mortgage-backed securities rated A
148%
Commercial mortgage-backed securities rated BBB
177%
Commercial mortgage-backed securities rated BB
283%
Commercial mortgage-backed securities rated B
379%
Commercial mortgage-backed securities rated CCC or not rated
950%
(1) Applies to jumbo
mortgages, credit cards, auto
loans, home equity loans,
manufactured housing and
prime mortgage-backed
securities not issued by a U.S.
agency or instrumentality.
(x) Futures and
call options: For
purposes of Preferred
Shares Basic
Maintenance Amount,
futures held by the Trust
and call options sold by
the Trust shall not be
included as Fitch Eligible
Assets. However, such
assets shall be valued at
Market Value by
subtracting the good faith
margin and the maximum
daily trading variance as
of the Valuation Date.
For call options
purchased by the Trust,
the Market Value of the
call option will be
included as a Fitch
Eligible Asset subject to a
Fitch Discount Factor
mutually agreed to
between the Trust and
Fitch based on the
characteristics of the
option contract such as its
maturity and the
underlying security of the
contract.
(xi) Securities
lending: The Trust may
engage in securities
lending in an amount not
to exceed 10% of the
Trust's total gross assets.
For purposes of
calculating the Preferred
Shares Basic
Maintenance Amount,
such securities lent shall
be included as Fitch
Eligible Assets with the
appropriate Fitch
Discount Factor applied
to such lent security. The
obligation to return such
collateral shall not be
included as an
obligation/liability for
purposes of calculating
the Preferred Shares
Basic Maintenance
Amount. However, the
Trust may reinvest cash
collateral for securities
lent in conformity with its
investment objectives and
policies and the
provisions of these
Bylaws. In such event, to
the extent that securities
lending collateral
received is invested by
the Trust in assets that
otherwise would be Fitch
Eligible Assets and the
value of such assets
exceeds the amount of the
Trust's obligation to
return the collateral on a
Valuation Date, such
excess amount shall be
included in the
calculation of Fitch
Eligible Assets by
applying the applicable
Fitch Discount Factor to
this amount and adding
the product to total Fitch
Eligible Assets.
Conversely, if the value
of assets in which
securities lending
collateral has been
invested is less then the
amount of the Trust's
obligation to return the
collateral on a Valuation
Date, such difference
shall be included as an
obligation/liability of the
Trust for purposes of
calculating the Preferred
Shares Basic
Maintenance Amount.
Collateral received by the
Trust in a securities
lending transaction and
maintained by the Trust
in the form received shall
not be included as a Fitch
Eligible Asset for
purposes of calculating
the Preferred Shares
Basic Maintenance
Amount.
(xii) Swaps
(including Total Return
Swaps and Interest Rate
Swaps): Total Return and
Interest Rate Swaps are
subject to the following
provisions:
(a) If the
Trust has
an
outstandi
ng gain
from a
swap
transactio
n on a
Valuation
Date, the
gain will
be
included
as a Fitch
Eligible
Asset
subject to
the Fitch
Discount
Factor on
the
counterpa
rty to the
swap
transactio
n. At the
time a
swap is
executed,
the Trust
will only
enter into
swap
transactio
ns where
the
counterpa
rty has at
least a
Fitch
rating of
A- or
Xxxxx'x
rating of
A3.
(b) Only
the
cumulativ
e
unsettled
profit and
loss from
a Total
Return
Swap
transactio
n will be
calculate
d when
determini
ng the
Preferred
Shares
Basic
Maintena
nce
Amount.
If the
Trust has
an
outstandi
ng
liability
from a
swap
transactio
n on a
Valuation
Date, the
Trust will
count
such
liability
as an
outstandi
ng
liability
from the
total
Fitch
Eligible
Assets in
calculatin
g the
Preferred
Shares
Basic
Maintena
nce
Amount.
(c) In
addition,
for swaps
other
than
Total
Return
Swaps,
the
Market
Value of
the
position
(positive
or
negative)
will be
included
as a Fitch
Eligible
Asset.
The
aggregate
notional
value of
all swaps
will not
exceed
the
Liquidati
on
Preferenc
e of the
Outstandi
ng
Preferred
Shares.
(d) (1)
The
underlyin
g
securities
subject to
a credit
default
swap sold
by the
Trust will
be
subject to
the
applicabl
e Fitch
Discount
Factor for
each
security
subject to
the swap;
(2) If the
Trust
purchases
a credit
default
swap and
holds the
underlyin
g
security,
the
Market
Value of
the credit
default
swap and
the
underlyin
g security
will be
included
as a Fitch
Eligible
Asset
subject to
the Fitch
Discount
Factor
assessed
based on
the
counterpa
rty risk;
and (3)
the Trust
will not
include a
credit
default
swap as a
Fitch
Eligible
Asset
purchase
by the
Trust
without
the Trust
holding
the
underlyin
g security
or when
the Trust
busy a
credit
default
swap for
a basket
of
securities
without
holding
all the
securities
in the
basket.
(xiii) Senior
Loans: The Fitch
Discount Factor applied
to senior, secured floating
rate Loans made to
corporate and other
business entities ("Senior
Loans") shall be the
percentage specified in
the table below opposite
such Fitch Loan
Category:
Fitch Loan Category
Discount Factor
A
115%
B
130%
C
152%
D
370%
Notwithstanding any other
provision contained above, for
purposes of determining whether a
Fitch Eligible Asset falls within a
specific Fitch Loan Category, to the
extent that any Fitch Eligible Asset
would fall within more than one of
the Fitch Loan Categories, such Fitch
Eligible Asset shall be deemed to fall
into the Fitch Loan Category with
the lowest applicable Fitch Discount
Factor.
(xiv) GNMAs,
FNMAs, FHLMCs, etc.,
MBS, asset-backed and
other mortgage-backed
securities:
MBS: U.S. Government
Agency (FNMA, FHLMC or
GNMA) conforming mortgage-
backed securities with a stated
maturity of 30 years shall have a
discount factor of 114% and
conforming mortgage-backed
securities with a stated maturity of
15 years shall have a discount factor
of 111%.
Asset-backed and other
mortgage-backed securities: The
percentage determined by reference
to the asset type in accordance with
the table set forth below.
Asset Type (with time
remaining to maturity, if applicable)
Discount Factor
U.S. Treasury/agency
securities (10 years or less) 118%
U.S. Treasury/agency
securities (greater than 10 years)
127%
U.S. agency sequentials (10
years or less) 120%
U.S. agency sequentials
(greater than 10 years) 142%
U.S. agency principal only
securities 236%
U.S. agency interest only
securities (with Market Value greater
than
40% of par) 696%
U.S. agency interest only
securities (with Market Value less
than or equal to
40% of par) 271%
AAA Lock-Out securities,
interest only 236%
U.S. agency planned
amortization class bonds (10 years or
less) 115%
U.S. agency planned
amortization class bonds (greater
than 10 years) 136%
AAA sequentials (10 years or
less) 118%
AAA sequentials (greater
than 10 years) 135%
AAA planned amortization
class bonds (10 years or less) 115%
AAA planned amortization
class bonds (greater than 10 years)
140%
Jumbo mortgage rated
AAA(1) 123%
Jumbo mortgage rated AA(1)
130%
Jumbo mortgage rated A(1)
136%
Jumbo mortgage rated
BBB(1) 159%
Commercial mortgage-
backed securities rated AAA 131%
Commercial mortgage-
backed securities rated AA 139%
Commercial mortgage-
backed securities rated A 148%
Commercial mortgage-
backed securities rated BBB 177%
Commercial mortgage-
backed securities rated BB 283%
Commercial mortgage-
backed securities rated B 379%
Commercial mortgage-
backed securities rated CCC or not
rated 950%
(1) Applies to jumbo
mortgages, credit cards, auto
loans, home equity loans,
manufactured housing and
prime mortgage-backed
securities not issued by a
U.S. agency or
instrumentality.
(xv) Closed
End Registered
Investment Companies:
The Fitch Discount
Factor applied to Closed
End Registered
Investment Companies is
286%.
(xvi) Other
Securities: The Fitch
Discount Factor with
respect to securities other
than those described
above including ratable
securities not rated by
Fitch or any other
NRSRO will be the
percentage provided in
writing by Fitch.
(kk) "FITCH
ELIGIBLE ASSET" shall
mean the following:
(i) Common
stock, preferred stock,
and any debt security of
REITs and Other Real
Estate Companies.
(ii) Municipal
Obligations that interest
in cash, (ii) do not have
their Fitch rating, as
applicable, suspended by
Fitch, and (iii) are part of
an issue of Municipal
Obligations of at least
$10,000,000. In
Addition, Municipal
Obligations in the Trust's
portfolio must be within
the following investment
guidelines to be Fitch
Eligible Assets.
Rating
----------
Minimum
Issue Size
($ Millions) (1)
-------------------
Maximum
Single
Underlying
Obligor Issuer
(%) (2)
------------------
Maximum
State Allowed
(%) (2)(3)
-----------------
AAA
10
100
100
XX
00
00
00
X
10
10
40
BBB
10
6
20
BB
10
4
12
B
10
3
12
CCC
10
2
12
--------------------
(1) Preferred stock has a
minimum issue size of
$50 million.
(2) The referenced percentage
represents maximum
cumulation total for the
related rating category and
each lower rating category.
(3) Territorial bonds (other than
those issued by Puerto Rico
and counted collectively) are
each limited to 10% of Fitch
Eligible Assets. For
diversification purposes,
Puerto Rico will be treated as
a state.
For purposes of applying
the foregoing
requirements and
applying the applicable
Fitch Discount Factor, if
a Municipal Obligation is
not rated by Fitch but is
rated by Xxxxx'x and
S&P, such Municipal
Obligation (excluding
short-term Municipal
Obligations) will be
deemed to have the Fitch
rating which is the lower
of the Xxxxx'x and S&P
rating. If a Municipal
Obligation is not rated by
Fitch but is rated by
Xxxxx'x or S&P, such
Municipal Obligation
(excluding short-term
Municipal Obligations)
will be deemed to have
such rating. Eligible
Assets shall be calculated
without including cash;
and Municipal
Obligations rated F1 by
Fitch or, if not rated by
Fitch, rated XXX-0,
XXXX-0 or P-1 by
Xxxxx'x; or, if not rated
by Xxxxx'x, rated A-
1+/AA or SP-1+/AA by
S&P shall be considered
to have a long-term rating
of A. When the Trust
sells a Municipal
Obligation and agrees to
repurchase such
Municipal Obligation at a
future date, such
Municipal Obligation
shall be valued at its
Discounted Value for
purposes of determining
Fitch Eligible Assets, and
the amount of the
repurchase price of such
Municipal Obligation
shall be included as a
liability for purposes of
calculating the Preferred
Shares Basic
Maintenance Amount.
When the Trust purchases
a Fitch Eligible Asset and
agrees to sell it at a future
date, such Fitch Eligible
Asset shall be valued at
the amount of cash to be
received by the Trust
upon such future date,
provided that the
counterparty to the
transaction has a long-
term debt rating of at
least A by Fitch and the
transaction has a term of
no more than 30 days;
otherwise, such Fitch
Eligible Asset shall be
valued at the Discounted
Value of such Fitch
Eligible Asset.
Notwithstanding the
foregoing, an asset will
not be considered a Fitch
Eligible Asset for
purposes of determining
the Preferred Shares
Basic Maintenance
Amount to the extent it is
(i) subject to any material
lien, mortgage, pledge,
security interest or
security agreement of any
kind (collectively,
"Liens"), except for (a)
Liens which are being
contested in good faith by
appropriate proceedings
and which Fitch (if Fitch
is then rating the
Preferred Shares) has
indicated to the Trust will
not affect the status of
such asset as a Fitch
Eligible Asset, (b) Liens
for taxes that are not then
due and payable or that
can be paid thereafter
without penalty, (c) Liens
to secure payment for
services rendered or cash
advanced to the Trust by
the investment adviser,
custodian or the Auction
Agent, (d) Liens by virtue
of any repurchase
agreement, and (e) Liens
in connection with any
futures margin account;
or (ii) deposited
irrevocably for the
payment of any liabilities
for purposes of
determining the Preferred
Shares Basic
Maintenance Amount.
(iii) U.S.
Government Securities.
(iv) Debt
securities, if such
securities have been
registered under the
Securities Act or are
restricted as to resale
under federal securities
laws but are eligible for
resale pursuant to Rule
144A under the Securities
Act of 1933, as amended
from time to time, as
determined by the Trust's
investment manager or
portfolio manager acting
pursuant to procedures
approved by the Board of
Trustees of the Trust; and
such securities are issued
by (1) a U.S. corporation,
limited liability company
or limited partnership, (2)
a corporation, limited
liability company or
limited partnership
domiciled in a member of
the European Union,
Argentina, Australia,
Brazil, Chile, Japan,
Korea, and Mexico or
other country if Fitch
does not inform the Trust
that including debt
securities from such
foreign country will
adversely impact Fitch's
rating of the Preferred
Shares (the "Approved
Foreign Nations"), (3) the
government of any
Approved Foreign Nation
or any of its agencies,
instrumentalities or
political subdivisions (the
debt securities of
Approved Foreign Nation
issuers being referred to
collectively as "Foreign
Bonds"), (4) a
corporation, limited
liability company or
limited partnership
domiciled in Canada or
(5) the Canadian
government or any of its
agencies,
instrumentalities or
political subdivisions (the
debt securities of
Canadian issuers being
referred to collectively as
"Canadian Bonds").
Foreign Bonds held by
the Trust will qualify as
Fitch Eligible Assets only
up to a maximum of 20%
of the aggregate Market
Value of all assets
constituting Fitch Eligible
Assets. Similarly,
Canadian Bonds held by
the Trust will qualify as
Fitch Eligible Assets only
up to a maximum of 20%
of the aggregate Market
Value of all assets
constituting Fitch Eligible
Assets. Notwithstanding
the limitations in the two
preceding sentences,
Foreign Bonds and
Canadian Bonds held by
the Trust will qualify as
Fitch Eligible Assets only
up to a maximum of 30%
of the aggregate Market
Value of all assets
constituting Fitch Eligible
Assets. All debt
securities satisfying the
foregoing requirements
and restriction of this
paragraph are herein
referred to as "Debt
Securities."
(v) Preferred
Stocks if (1) such
securities provide for the
periodic payment of
dividends thereon in cash
in U.S. dollars or euros
and do not provide for
conversion or exchange
into, or have warrants
attached entitling the
holder to receive equity
capital at any time over
the respective lives of
such securities, (2) the
issuer or such a preferred
stock has common stock
listed on either the New
York Stock Exchange, the
NYSE Amex or in the
over-the-counter market,
and (3) the issuer of such
a preferred stock has a
senior debt rating or
preferred stock rating
from Fitch of BBB- or
higher or the equivalent
rating by another Rating
Agency. In addition, the
preferred stocks issue
must be at least $50
million.
(vi) Common
stocks (1)(a) which are
traded on the New York
Stock Exchange, the
NYSE Amex or in the
over-the-counter market,
(b) which, if cash
dividend paying, pay cash
dividends in U.S. dollars,
and (c) which may be
sold without restriction
by the Trust; provided,
however, that (i) common
stock which, while a
Fitch Eligible Asset
owned by the Trust,
ceases paying any regular
cash dividend will no
longer be considered a
Fitch Eligible Assets until
60 calendar days after the
date of the announcement
of such cessation, unless
the issuer of the common
stock has senior debt
securities rated at least A-
by Fitch and (ii) the
aggregate Market Value
of the Trust's holdings of
the common stock of any
issuer in excess of 5% per
U.S. issuer of the number
of Outstanding shares
time the Market Value of
such common stock shall
not be a Fitch's Eligible
Asset; and (2) securities
denominated in any
currency other than the
U.S. dollar and securities
of issuers formed under
the laws of jurisdictions
other than the United
States, its states and the
District of Columbia for
which there are dollar-
denominated American
Depository Receipts
("ADRs") which are
traded in the United
States on exchanges or
over-the-counter and are
issued by banks formed
under the laws of the
United States, its states or
the District of Columbia;
provided, however, that
the aggregate Market
Value of the Trust's
holdings of securities
denominated in
currencies other than the
U.S. dollar and ADRs in
excess of 3% of the
aggregate Market Value
of the Outstanding shares
of common stock of such
issuer or in excess of 10%
of the Market Value of
the Trust's Fitch Eligible
Assets with respect to
issuers formed under the
laws of any single such
non-U.S. jurisdiction
other than Approved
Foreign Nations shall not
be a Fitch Eligible Asset
(vii) Rule
144A Securities.
(viii) Warrants
on common stocks
described in (vi) above.
(ix) Any
common stock, preferred
stock or any debt
securities of REITs or
real estate companies.
(x) Interest
Rate Swaps or Interest
Rate Caps entered into
according to International
Swap Dealers Association
("ISDA") standards if (1)
the counterparty to the
swap transaction has a
short-term rating of not
less than F1 by Fitch or
the equivalent by another
Rating Agency, or, if the
swap counterparty does
not have a short-term
rating, the counterparty's
senior unsecured long-
term debt rating is AA or
higher by Fitch or the
equivalent by another
Rating Agency and (2)
the original aggregate
notional amount of the
Interest Rate Swap or
Interest Rate Cap
transaction or transactions
is not greater than the
Liquidation Preference of
the Preferred Shares
originally issued.
(xi) Swaps,
including Total Return
Swaps entered into
according to ISDA.
(xii) Financial
contracts, as such term is
defined in Section
3(c)(2)(B)(ii) of the 1940
Act, not otherwise
provided for in this
definition may be
included in Fitch Eligible
Assets, but, with respect
to any financial contract,
only upon receipt by the
Trust of a writing from
Fitch specifying any
conditions on including
such financial contract in
Fitch Eligible Assets and
assuring the Trust that
including such financial
contract in the manner so
specified would not affect
the credit rating assigned
by Fitch to the Preferred
Shares
(xiii) Asset-
backed and mortgage-
backed securities.
(xiv) Senior
loans.
(xv) Closed
End Registered
Investment Companies
that (1) have an equity
market capitalization
greater than $100 million
and (2) have an average
trading volume of 50,000
shares per day.
(xvi) Fitch
Hedging Transactions.
Where the Trust sells an asset
and agrees to repurchase such asset
in the future, the Discounted Value
of such asset will constitute a Fitch
Eligible Asset and the amount the
Trust is required to pay upon
repurchase of such asset will count
as a liability for the purposes of the
Preferred Shares Basic Maintenance
Amount. Where the Trust purchases
an asset and agrees to sell it to a third
party in the future, cash receivable
by the Trust thereby will constitute a
Fitch Eligible Asset if the long-term
debt of such other party is rated at
least A- by Fitch or the equivalent by
another Rating Agency and such
agreement has a term of 30 days or
less; otherwise the Discounted Value
of such purchased asset will
constitute a Fitch Eligible Asset.
Notwithstanding the
foregoing, an asset will not be
considered a Fitch Eligible Asset to
the extent that it has been irrevocably
deposited for the payment of (i)(a)
through (i)(e) under the definition of
Preferred Shares Basic Maintenance
Amount or to the extent it is subject
to any Liens, except for (a) Liens
which are being contested in good
faith by appropriate proceedings and
which Fitch has indicated to the
Trust will not affect the status of
such asset as a Fitch Eligible Asset,
(b) Liens for taxes that are not then
due and payable or that can be paid
thereafter without penalty, (c) Liens
to secure payment for services
rendered or cash advanced to the
Trust by its investment manager or
portfolio manager, the Trust's
custodian, transfer agent or registrar
or the Auction Agent and (d) Liens
arising by virtue of any repurchase
agreement.
Fitch diversification
limitations: portfolio holdings as
described below must be within the
following diversification and issue
size requirements in order to be
included in Fitch's Eligible Assets:
EQUITY SECURITIES
Maximum Single Issuer (1)
Large-cap
5%
Mid-cap
5%
Small-cap
5%
(1) Percentages represent both
a portion of the aggregate
Market Value and number of
outstanding shares of the
common stock portfolio.
DEBT SECURITIES
RATED AT LEAST (1)
Maximum
Single Issuer
(2)
Maximum Single
Industry (2)(3)
Minimum Issue
Size ($ in million)
(4)
AAA
100%
100%
$100
AA-
20%
75%
$100
A-
10%
50%
$100
BBB-
6%
25%
$100
BB-
4%
16%
$50
B-
3%
12%
$50
CCC
2%
8%
$50
(1) Not applicable to corporate debt
securities of REITs, Real Estate
Companies, and Lodging
Companies.
(2) Percentages represent a portion
of the aggregate Market Value of
corporate debt securities.
(3) Industries are determined
according to Fitch's Industry
Classifications, as defined herein.
(4) Preferred stock has a minimum
issue size of $50 million, and
mortgage pass through issued by
Federal Home Loan Mortgage
Corporation ("FHLMC"), the
Federal National Mortgage
Association ("FNMA") or the
Government National Mortgage
Association ("GNMA"), which has
no minimum issue size.
If a security is not rated by
Fitch but is rated by two other Rating
Agencies, then the lower of the
ratings on the security from the two
other Rating Agencies will be used
to determine the Fitch Discount
Factor (e.g., where the S&P rating is
A and the Xxxxx'x rating is Baa, a
Fitch rating of BBB will be used). If
a security is not rated by Fitch but is
rated by only one other Rating
Agency, then the rating on the
security from the other Rating
Agency will be used to determine the
Fitch Discount Factor (e.g., where
the only rating on a security is an
S&P rating of AAA, a Fitch rating of
AAA will be used, and where the
only rating on a security is a
Xxxxx'x rating of Ba, a Fitch rating
of BB will be used). If a security is
either rated below CCC or not rated
by any Rating Agency, the Trust will
treat the security as if it were "CCC"
in the table above.
REIT AND OTHER REAL ESTATE COMPANY
SECURITIES
5% issuer limitation (including common, preferred, debt and
other securities)
CLOSED END REGISTERED INVESTMENT COMPANY
SECURITIES
5% issuer limitation(1)
(1) Percentage
represents a portion of
the aggregate Market
Value.
(xvii) Unrated
debt securities or
preferred shares issued by
an issuer which (1) has
not filed for bankruptcy
in the past three years; (2)
is current on all interest
and principal on such
debt security; (3) is
current on distributions
on such preferred shares.
(xviii) Interest
rate swaps or caps entered
into according to
International Swap
Dealers Association
standards if (1) the
counterparty to the swap
transaction has a short-
term rating of not less
than F-1, or, if the swap
counterparty does not
have a short-term rating,
the counterparty's senior
unsecured long-term debt
rating is AA or higher by
Fitch or the equivalent by
another NRSRO and (2)
the original aggregate
notional amount of the
interest rate swap or cap
transaction or transactions
is not greater than the
liquidation preference of
the Preferred Shares
originally issued.
(xix) U.S.
Treasury Securities and
U.S. Treasury Strips.
(xx) Short-
Term Money Market
Instruments as long as (a)
such securities are rated
at least F-1 by Fitch or
the equivalent by another
NRSRO, (b) in the case
of demand deposits, time
deposits and overnight
funds, the depository
institution or supporting
entity is rated at least A
by Fitch or the equivalent
by another NRSRO, (c)
such securities are of 2a-7
Money Market Funds, (d)
such securities are
repurchase agreements or
(e) in all other cases, the
supporting entity (1) is
rated at least A by Fitch
and the security matures
in one month or (2) is
rated at least AA by Fitch
and matures within six
months.
(xxi) Cash
(including, for this
purpose, interest and
dividends due on assets
rated (a) BBB or higher
by Fitch if the payment
date is within 5 Business
Days of the Valuation
Date, (b) A or higher by
Fitch if the payment is
within thirty days of the
Valuation Date (c) A+ or
higher by Fitch if the
payment date is within
the Exposure Period;
provided, however, that
such interest and
dividends may, at the
Trust's discretion, be
discounted at the same
rate as the related security
or on such other basis as
Fitch and the Trust may
agree from time to time)
and receivables for Fitch
Eligible Assets sold if the
receivable is due within
five Business Days of the
Valuation Date.
(ll) "FITCH
EXPOSURE PERIOD"
means the period
commencing on (and
including) a given Valuation
Date and ending 41 days
thereafter.
(mm) "FITCH
HEDGING
TRANSACTION" shall have
the meaning specified in
paragraph (b)(1) of Section
13 of Part I of Article X.
(nn) "FORWARD
COMMITMENTS" shall
have the meaning specified in
paragraph (a)(iv) of Section
M of Part I of Article X.
(oo) "HOLDER"
with respect to shares of a
Series, shall mean the
registered holder of such
shares as the same appears on
the record books of the Trust.
(pp) "HOLD
ORDER" and "HOLD
ORDERS" shall have the
respective meanings specified
in paragraph (a) of Section A
of Part II of Article X.
(qq) "INDEPENDE
NT ACCOUNTANT" shall
mean a nationally recognized
accountant, or firm of
accountants, that is with
respect to the Trust an
independent public
accountant or firm of
independent public
accountants under the
Securities Act of 1933, as
amended from time to time.
(rr) "INITIAL
RATE PERIOD" with
respect to each Series, shall
be the period from and
including the Date of
Original Issue to but
excluding the initial
Distribution Payment date for
such Series.
(ss) "INTEREST
EQUIVALENT" means a
yield on a 360-day basis of a
discount basis security, which
is equal to the yield on an
equivalent interest-bearing
security.
(tt) "LATE
CHARGE" shall have the
meaning specified in
subparagraph (e)(i)(B) of
Section B of Part I of Article
X.
(uu) "LIBOR
Dealers" means RBC Xxxx
Xxxxxxxx Inc. and such other
dealer or dealers as the Trust
may from time to time
appoint, or, in lieu of any
thereof, their respective
affiliates or successors.
(vv) "LIBOR Rate"
on any Auction Date, means
(i) the rate for deposits in
U.S. dollars for the
designated Distribution
Period, which appears on
display page 3750 of
Moneyline's Telerate Service
("Telerate Page 3750") (or
such other page as may
replace that page on that
service, or such other service
as may be selected by the
LIBOR Dealer or its
successors that are LIBOR
Dealers) as of 11:00 a.m.,
London time, on the day that
is the London Business Day
preceding the Auction Date
(the "LIBOR Determination
Date"), or (ii) if such rate
does not appear on Telerate
Page 3750 or such other page
as may replace such Telerate
Page 3750, (A) the LIBOR
Dealer shall determine the
arithmetic mean of the
offered quotations of the
Reference Banks to leading
banks in the London
interbank market for deposits
in U.S. dollars for the
designated Distribution
Period in an amount
determined by such LIBOR
Dealer by reference to
requests for quotations as of
approximately 11:00 a.m.
(London time) on such date
made by such LIBOR Dealer
to the Reference Banks, (B) if
at least two of the Reference
Banks provide such
quotations, LIBOR Rate shall
equal such arithmetic mean
of such quotations, (C) if
only one or none of the
Reference Banks provide
such quotations, LIBOR Rate
shall be deemed to be the
arithmetic mean of the
offered quotations that
leading banks in The City of
New York selected by the
LIBOR Dealer (after
obtaining the Trust's
approval) are quoting on the
relevant LIBOR
Determination Date for
deposits in U.S. dollars for
the designated Distribution
Period in an amount
determined by the LIBOR
Dealer (after obtaining the
Trust's approval) that is
representative of a single
transaction in such market at
such time by reference to the
principal London offices of
leading banks in the London
interbank market; provided,
however, that if one of the
LIBOR Dealers does not
quote a rate required to
determine the LIBOR Rate,
the LIBOR Rate will be
determined on the basis of
the quotation or quotations
furnished by any substitute
LIBOR Dealer or substitute
LIBOR Dealers selected by
the Trust to provide such rate
or rates not being supplied by
the LIBOR Dealer; provided
further, that if the LIBOR
Dealer and substitute LIBOR
Dealers are required but
unable to determine a rate in
accordance with at least one
of the procedures provided
above, LIBOR Rate shall be
LIBOR Rate as determined
on the previous Auction
Date. If the number of
Distribution Period days shall
be (i) 7 or more but fewer
than 21 days, such rate shall
be the seven-day LIBOR rate;
(ii) more than 21 but fewer
than 49 days, such rate shall
be the one-month LIBOR
rate; (iii) 49 or more but
fewer than 77 days, such rate
shall be the two-month
LIBOR rate; (iv) 77 or more
but fewer than 112 days, such
rate shall be the three-month
LIBOR rate; (v) 112 or more
but fewer than 140 days, such
rate shall be the four-month
LIBOR rate; (vi) 140 or more
but fewer that 168 days, such
rate shall be the five-month
LIBOR rate; (vii) 168 or
more but fewer 189 days,
such rate shall be the six-
month LIBOR rate; (viii) 189
or more but fewer than 217
days, such rate shall be the
seven-month LIBOR rate;
(ix) 217 or more but fewer
than 252 days, such rate shall
be the eight-month LIBOR
rate; (x) 252 or more but
fewer than 287 days, such
rate shall be the nine-month
LIBOR rate; (xi) 287 or more
but fewer than 315 days, such
rate shall be the ten-month
LIBOR rate; (xii) 315 or
more but fewer than 343
days, such rate shall be the
eleven-month LIBOR rate;
and (xiii) 343 or more but
fewer than 365 days, such
rate shall be the twelve-
month LIBOR rate.
(ww) "LIQUIDATI
ON PREFERENCE" with
respect to a given number of
Preferred Shares, means
$25,000 times that number.
(xx) "LONDON
BUSINESS DAY" means
any day on which
commercial banks are
generally open for business in
London.
(yy) "MARKET
VALUE" of any asset of the
Trust shall mean the market
value thereof determined in
accordance with the pricing
procedures of the Trust.
(zz) "MAXIMUM
RATE" shall mean, with
respect to Preferred Shares
for any Distribution Period,
the greater of (A) the
Applicable Percentage of the
Reference Rate or (B) the
Applicable Spread plus the
Reference Rate on the
Auction Date. The Auction
Agent will round each
applicable Maximum Rate to
the nearest one-thousandth
(0.001) of one percent per
annum, with any such
number ending in five ten-
thousandths of one percent
being rounded upwards to the
nearest one-thousandth
(0.001) of one percent.
Generally, the applicable
distribution rate for any
Distribution Period for the
Preferred Shares will not be
more than the Maximum Rate
attributable to such shares.
The Maximum Rate for the
Preferred Shares will depend
on the credit rating assigned
to such shares and on the
length of the Distribution
Period.
(aaa) "MINIMUM
RATE PERIOD" shall mean
any Rate Period consisting of
7 Rate Period Days for the
Preferred Shares.
(bbb) "MOODY'S"
shall mean Xxxxx'x
Investors Service, Inc., a
Delaware corporation, and its
successors.
(ccc) "MOODY'S
DISCOUNT FACTOR" shall
mean, for purposes of
determining the Discounted
Value of any Moody's
Eligible Asset, the percentage
determined as follows. The
Moody's Discount Factor for
any Moody's Eligible Asset
other than the securities set
forth below will be the
percentage provided in
writing by Moody's.
(i) Corporate
debt securities: The
percentage determined by
reference to the rating on
such asset with reference
to the remaining term to
maturity of such asset, in
accordance with the table
set forth below (non
convertibles).
Xxxxx'x Rating Category
Term to Maturity of
Corporate Debt Security (2)
Aaa
Aa
A
Baa
Ba
B
Unrated(1)
1 year or less.................................... .
109%
112%
115%
118%
137%
150%
250%
2 years or less (but longer than 1
year) .
115
118
122
125
146
160
250
3 years or less (but longer than 2
years)............................................... .
120
123
127
131
153
168
250
4 years or less (but longer than 3
years)............................................... .
126
129
133
138
161
176
250
5 years or less (but longer than 4
years)............................................... .
132
135
139
144
168
185
250
7 years or less (but longer than 5
years)............................................... .
139
143
147
152
179
197
250
10 years or less (but longer than 7
years)............................................... .
145
150
155
160
189
208
250
15 years or less (but longer than 10
years)............................................... .
150
155
160
165
196
216
250
20 years or less (but longer than 15
years)............................................... .
150
155
160
165
196
228
250
30 years or less (but longer than 20
years)............................................... .
150
155
160
165
196
229
250
Greater than 30 years....................... .
165
173
181
189
205
240
250
(1) Unless conclusions
regarding liquidity risk as well as
estimates of both the probability and
severity of default for the Trust's
assets can be derived from other
sources, securities rated below B by
Moody's and unrated securities
covered by this section (i), which are
securities rated by neither Moody's,
S&P nor Fitch, are limited to 10% of
Moody's Eligible Assets. If a
corporate debt security is unrated by
Moody's, S&P or Fitch, the Fund
will use the percentage set forth
under "Unrated" in this table.
Ratings assigned by S&P or Fitch are
generally accepted by Moody's at
face value. However, adjustments to
face value may be made to particular
categories of credits for which the
S&P and/or Fitch rating does not
seem to approximate a Xxxxx'x
rating equivalent. Split rated
securities assigned by S&P and Fitch
will be accepted at the lower of the
two ratings.
(2) The Moody's
Discount Factors for debt securities
shall also be applied to any
derivative transaction, in which case
the rating of the counterparty shall
determine the appropriate rating
category.
For corporate debt securities that do
not pay interest in U.S. dollars, the
fund sponsor will use the applicable
currency conversion rates.
Preferred stock: The Xxxxx'x
Discount Factor for taxable preferred
stock shall be (1)(2):
Aaa
150%
Aa
155%
A
160%
Baa
165%
Ba
196%
B
216%
