FORM OF
AMENDED AND RESTATED
BYLAWS
OF
RMR REAL ESTATE FUND
(Dated as of February __, 2004)
ARTICLE I
AGREEMENT AND DECLARATION OF TRUST AND PRINCIPAL OFFICE
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 FUND, the Massachusetts
business 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 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 may be changed by the Trustees then in office, provided it SHALL NOT be
less than three. The Trustees shall be designated as Class I, Class II or Class
III Trustees by the Trustees.
2.2 INDEPENDENT TRUSTEES. After completion of the Trust's initial
public offering of Shares, a majority of the Trustees holding office shall at
all times be Trustees who are not "interested persons" of the Trust (as defined
in the Investment Company Act of 1940, as amended), except for the fact of their
being Trustees; and, PROVIDED, HOWEVER, that less than a majority of the
Trustees may be such independent Trustees on a temporary basis by reason of the
death, resignation, removal or other vacancy in the office of one or more
Trustees.
2.3 REGULAR MEETINGS. Regular meetings of the 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.
2.4 SPECIAL MEETINGS. Special meetings of the Trustees may be held at
any time and at any place designated in the call of the meeting when called by
the Chairman of the Trustees, the President, the Treasurer, the Secretary or by
two or more Trustees, provided notice thereof is
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given to each Trustee by the Secretary or an Assistant Secretary or by the
officer or the Trustees calling the meeting.
2.5 NOTICE. It shall be sufficient notice to the Trustee of a special
meeting to send notice by mail at least seventy-two hours or by telegram, telex,
telecopy, electronic mail or other electronic facsimile transmission method at
least twenty-four hours before the meeting addressed to the Trustee at his or
her usual or last known business or residence address or to give notice to him
or her in person or by telephone at least twenty-four hours before the meeting.
Notice of a meeting need not be given to any Trustee if a written waiver of
notice, executed by him or her, before or after the meeting, is filed with the
records of the meeting, or to any Trustee who attends the meeting. Neither
notice of a meeting nor a waiver of a notice need specify the purposes of the
meeting.
2.6 QUORUM. At any meeting of the Trustees a majority of the Trustees
then in office shall constitute a quorum. Any meeting of the Trustees may be
adjourned from time to time by a majority of the votes cast upon the question,
whether or not a quorum is present, and the meeting may be held as adjourned
without further notice. Whether or not a Trustee votes on a matter at a meeting
which he attends, he will nonetheless be considered present for purposes of
establishing a quorum to consider the matter.
2.7 ATTENDANCE. Except as required by applicable law, attendance at
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.
2.8 WRITTEN CONSENT. Action by the Trustees may be taken by written
consent signed by a majority of the Trustees then in office, provided that the
form of written consent is circulated to all Trustees before or promptly after
it is signed by the majority of Trustees.
ARTICLE III
OFFICERS
3.1 ENUMERATION; QUALIFICATION. The officers of the Trust shall be a
President, a Treasurer, a Secretary, and such other officers including a
Chairman of the Trustees, 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. The Chairman of the Trustees, if one is
elected, shall be a Trustee and may but need not be a Shareholder; and any other
officer may but does not need to be a Trustee or a Shareholder. 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 at
any time.
3.3 TENURE. The Chairman of the Trustees, if one is elected, the
President, the Treasurer and the Secretary 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
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becomes disqualified. Each other officer shall hold office and 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 shall have, in addition to the duties and powers herein and in the
Declaration of Trust set forth, such duties and powers as are commonly incident
to the office occupied by him or her as if the Trust were organized as a
Massachusetts business corporation and such other duties and powers as the
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 to preside at such meetings. The Trustees may designate a chief
executive officer from among the Trustees or the elected officers. 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 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 the 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 RESIGNATIONS. Any Trustee or officer may resign at any time by
written instrument signed by him or her and delivered to the Chairman, the
President or the Secretary, or to a meeting of the Trustees. Such resignation
shall be effective upon receipt unless specified to be effective at some other
time. Except to the extent expressly provided in a written agreement with the
Trust, no officer resigning and no officer removed shall have any right to any
compensation for any period following his or her resignation or removal, or any
right to damages on account of such removal.
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
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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.
4.2 MEETINGS; NOTICE. Except as specifically provided in resolutions
constituting a Committee or providing for the conduct of its meetings: (i)
Committee meetings may be called by the Chairman or any two Committee members;
(ii) notice of Committee meetings may be given by the person calling the
meeting, the Secretary or any Assistant Secretary; and (iii) notice of Committee
meetings shall be given in the manner and within the times provided for Trustees
meetings.
4.3 QUORUM; VOTING. Except as provided below or as otherwise
specifically provided in the resolutions constituting a Committee and providing
for the conduct of its meetings, a majority of the members of any Committee
shall constitute a quorum for the transaction of business, and any action of
such a Committee may be taken at a meeting by a vote of a majority of the
members present (so long as a quorum is present) or evidenced by one or more
writings signed by such a majority. Members of a Committee may participate in a
meeting of such Committee by means of a conference telephone or other
communications medium by means of which all persons participating in the meeting
can hear and speak to each other.
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 seal of the Trust shall, subject to alteration by the
Trustees, consist of a flat-faced die with the word "Massachusetts", together
with the name of the Trust and the year of its organization cut or engraved
thereon; PROVIDED, HOWEVER, that unless otherwise required by the Trustees, the
seal shall not be necessary to be placed on, and its absence shall not impair
the validity of, any document, instrument or other document executed and
delivered by or 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.
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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 American Stock
Exchange, 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 if so required, 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. Special meetings of the Shareholders or any or all classes or series of
Shares may also be called by 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 Trustees. Written
notice of any meeting of Shareholders, stating the time, place and purpose of
the meeting, shall be given or caused to be given by the Trustees at least ten
days before such meeting to each Shareholder entitled to vote thereat by leaving
such notice with the Shareholder at his or her residence or usual place of
business or by mailing such notice, postage prepaid, to the Shareholder's
address as it appears on the records of the Trust. Such notice may be given by
the Secretary or an Assistant Secretary or by any other officer designated by
the Trustees. 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.
8.2 VOTING POWER. 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 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 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. Shares may be voted
in person or by proxy. A proxy with respect to Shares held in the name of two or
more persons shall be valid if executed by any one of them unless at or prior to
exercise of the proxy the Trust receives a specific written notice to the
contrary from any one of them. The placing of a Shareholder's name on a proxy
pursuant to telephonic or electronically transmitted instructions obtained
pursuant to procedures reasonably designed to verify that such instructions have
been authorized by such Shareholder shall constitute execution of such proxy by
or on behalf of such Shareholder. A proxy purporting to be executed by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
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8.3 RECORD DATES. For the purpose of determining the Shareholders who
are entitled to vote or act at any meeting or any adjournment thereof, the
Trustees may from time to time fix a time and date, which shall be not more than
90 days before the date of any meeting of Shareholders, as the record date for
determining the Shareholders having the right to notice of and to vote at such
meeting and any adjournment thereof and only Shareholders of record on such
record date shall have the right notwithstanding any transfer of Shares on the
books of the Trust after the record date; or without fixing such record date the
Trustees may for any of such purposes close the register or transfer books for
all or any part of such period.
ARTICLE IX
AMENDMENT TO THE BYLAWS
9.1 GENERAL. These Bylaws may be amended, changed, altered or repealed,
in whole or part, only by resolution of the Trustees at any meeting of the
Trustees at which a quorum is present, or by a written consent signed by a
majority of the Trustees then in office.
ARTICLE X
PREFERRED SHARES OF BENEFICIAL INTEREST
DESIGNATION
10.1 STATEMENT CREATING ONE SERIES OF PREFERRED SHARES.
SERIES T: ___ 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" or "Preferred Shares"). Each
share of the Series 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 of ___.
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 5(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
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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) "AA FINANCIAL COMPOSITE COMMERCIAL PAPER RATE" on any date for any
Rate Period of Preferred Shares, shall mean (i) the Interest Equivalent
of the 7-day rate, in the case of a Rate Period which is a Minimum Rate
Period or shorter; for Rate Periods greater than 7 days but fewer than
or equal to 16 days, the 15-day rate; for Rate Periods greater than 16
days but fewer than or equal to 31 days, the 30-day rate; for Rate
Periods greater than 31 days but fewer than or equal to 61 days, the
60-day rate; for Rate Periods greater than 61 days but fewer than or
equal to 91 days, the 90 day rate; for Rate Periods greater than 91
days but fewer than or equal to 270 days, the rate described in (ii);
for Rate Periods greater than 270 days, the Treasury Index Rate, in
each case on commercial paper on behalf of issuers whose corporate
bonds are rated AA by S&P, or the equivalent of such rating by another
nationally recognized rating agency, as announced by the Federal
Reserve Bank of New York for the close of business on the Business Day
immediately preceding such date; or (ii) if the Federal Reserve Bank of
New York does not make available such a rate, then the arithmetic
average of the Interest Equivalent of such rates on commercial paper
placed on behalf of such issuers, as quoted on a discount basis or
otherwise by the Commercial Paper Dealers to the Auction Agent for the
close of business on the Business Day immediately preceding such date
(rounded to the next highest .001 of 1%). If any Commercial Paper
Dealer does not quote a rate required to determine the AA Financial
Composite Commercial Paper Rate, such rate shall be determined on the
basis of the quotations (or quotation) furnished by the remaining
Commercial Paper Dealers (or Dealer), if any, or any Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers selected
by the Trust to provide such rate or rates not being supplied by any
Commercial Paper Dealer or Commercial Paper Dealers, as the case may
be, or, if the Trust does not select any such Substitute Commercial
Paper Dealer or Substitute Commercial Paper Dealers, by the remaining
Commercial Paper Dealer or Commercial Paper Dealers or if there are no
such Commercial Paper Dealers, by the Auction Agent. For purposes of
this definition, the "Interest Equivalent" of a rate stated on a
discount basis (a "discount rate") for commercial paper of a given
number of days' maturity shall be equal to the quotient (rounded
upwards to the next higher one-thousandth (.001) of 1%) of (A) the
discount rate divided by (B) the difference between (x) 1.00 and (y) a
fraction, the numerator of which shall be the product of the discount
rate times the number of days in which such commercial paper matures
and the denominator of which shall be 360.
(b) "AUDITOR'S CONFIRMATION" shall have the meaning specified in
paragraph (c) of Section 7 of Part I of these Bylaws.
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(c) "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.
(d) "AGENT MEMBER" shall mean a member of or participant in the
Securities Depository that will act on behalf of a Bidder.
(e) "ALL HOLD RATE" shall mean 80% of the AA Financial Composite
Commercial Paper Rate.
(f) "ANNUAL VALUATION DATE" shall mean the last Business Day of
December of each year.
(g) "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:
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 if such shares have a rating of
AAA by Moody's or Fitch or the equivalent of such ratings by such
agencies or a substitute rating agency or substitute rating agencies;
(ii) if not AAA, then AA- if such shares have a rating of AA- or better
by Moody's or Fitch or the equivalent of such rating by such agencies
or a substitute rating agency or substitute rating agencies, (iii) if
not AA- or higher, then A- if such shares have a rating of A- or better
by Moody's or Fitch or the equivalent of such ratings by such agencies
or a substitute rating agency or substitute rating agencies, (iv) if
not A- or higher, then BBB- if such shares have a rating of BBB- or
better by Moody's or Fitch or the equivalent of such ratings by such
agencies or substitute rating agency or substitute rating agencies, (v)
if not BBB- or higher, then below 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
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Amount. The Trust shall take all reasonable action necessary to enable
Xxxxx'x and Fitch to provide a rating for the Preferred Shares. If
Moody's 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.
(h) "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.
(i) "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:
CREDIT RATINGS
XXXXX'X FITCH APPLICABLE 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 if such shares have a rating of
AAA by Moody's or Fitch or the equivalent of such ratings by such
agencies or a substitute rating agency or substitute rating agencies;
(ii) if not AAA, then AA- if such shares have a rating of AA- or better
by Moody's or Fitch or the equivalent of such rating by such agencies
or a substitute rating agency or substitute rating agencies, (iii) if
not AA- or higher, then A- if such shares have a rating of A- or better
by Moody's or Fitch or the equivalent of such ratings by such agencies
or a substitute rating agency or substitute rating agencies, (iv) if
not A- or higher, then BBB- if such shares have a rating of BBB- or
better by Moody's or Fitch or the equivalent of such ratings by such
agencies or substitute rating agency or substitute rating agencies, (v)
if not BBB- or higher, then below 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.
(j) "AUCTION" shall mean each periodic implementation of the Auction
Procedures.
(k) "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
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Preferred Shares so long as the Applicable Rate for such Preferred
Shares is to be based on the results of an Auction.
(l) "AUCTION AGENT" shall mean the entity appointed as such by a
resolution of the Board of Trustees in accordance with Section 6 of
Part II of Article X of these Bylaws.
(m) "AUCTION DATE" with respect to any Rate Period, shall mean the
Business Day next preceding the first day of such Rate Period.
(n) "AUCTION PROCEDURES" shall mean the procedures for conducting
Auctions set forth in Part II of Article X of these Bylaws.
(o) "AVAILABLE PREFERRED SHARES" shall have the meaning specified in
paragraph (a) of Section 3 of Part II of Article X of these Bylaws.
(p) "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.
(q) "BID" and "BIDS" shall have the respective meanings specified in
paragraph (a) of Section 1 of Part II of Article X of these Bylaws.
(r) "BIDDER" and "BIDDERS" shall have the respective meanings specified
in paragraph (a) of Section 1 of Part II of Article X of these Bylaws;
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.
(s) "BOARD OF TRUSTEES" shall mean the Board of Trustees of the Trust
or any duly authorized committee thereof.
(t) "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 of these Bylaws, 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.
(u) "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 of
these Bylaws.
(v) "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.
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(w) "CLOSING TRANSACTION" shall have the meaning specified in paragraph
(a)(i)(A) of Section 13 of Part I of Article X of these Bylaws.
(x) "CODE" means the Internal Revenue Code of 1986, as amended.
(y) "COMMERCIAL PAPER DEALERS" shall mean (1) RBC Xxxx Xxxxxxxx Inc.
and any other commercial paper dealer selected by the Trust as to
which Xxxxx'x, Fitch or any substitute rating agency then rating the
Preferred Shares shall not have objected; (2) in lieu of any thereof,
their respective affiliates or successors, if such entity is a
commercial paper dealer; and (3) in the event that any of the
foregoing shall cease to quote rates for commercial paper of issuers
of the sort described above, in substitution therefor, a nationally
recognized dealer in commercial paper of such issuers then making such
quotations selected by the Trust.
(z) "COMMON SHARES" shall mean the outstanding common shares, par value
$.001 per share, of the Trust.
(aa) "CURE DATE" shall mean the Preferred Shares Basic Maintenance Cure
Date or the 1940 Act Cure Date, as the case may be.
(bb) "DATE OF ORIGINAL ISSUE" with respect to the Preferred Shares,
shall mean the date on which the Trust initially issued such shares.
(cc) "DECLARATION OF TRUST" shall have the meaning specified on the
first page of these Bylaws.
(dd) "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.
(ee) "DISCOUNTED 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
Xxxxx'x Discount Factor for a Xxxxx'x 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 Xxxxx'x Eligible Asset that
is prepayable, the quotient as calculated above or the par value, plus
accrued interest or distribution, as applicable, whichever is lower.
(ff) "DISTRIBUTION 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 2 of Part
I of Article X of these Bylaws.
(gg) "DISTRIBUTION PERIOD," with respect to the Preferred Shares, shall
mean the period from and including the Date of Original Issue of shares
of a series of Preferred
-11-
Shares to but excluding the initial Distribution Payment Date for
shares of the Series and thereafter any period from and including one
Distribution Payment Date for shares of the Series to but excluding the
next succeeding Distribution Payment Date for shares of the Series.
(hh) "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 the Series.
(ii) "EXPOSURE PERIOD" shall mean the period commencing on a given
Valuation Date and ending 45 days thereafter.
(jj) "FAILURE TO DEPOSIT," with respect to shares of a series of
Preferred Shares, 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 the 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 the Series or
(B) on any redemption date in funds available on such redemption date
for shares of the Series in New York, New York, the Redemption Price to
be paid on such redemption date for any share of the Series after
notice of redemption is mailed pursuant to paragraph (c) of Section 11
of Part I of Article X of these Bylaws; 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.
(kk) "FITCH" shall mean Fitch Ratings and its successors.
(ll) "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) Corporate Debt Securities of REITs and Other Real Estate
Companies (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%
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(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.
(iii) 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%.
(iv) 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%
-13-
(v) 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.
(vi) 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.
(mm) "FITCH ELIGIBLE ASSET" shall mean the following:
(i) Common stock, preferred stock, and any debt security of
REITs and Other Real Estate Companies.
(ii) 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.
(iii) 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.
(iv) U.S. Treasury Securities and U.S. Treasury Strips.
(v) 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.
(vi) 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
-14-
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.
(nn) "Fitch Exposure Period" means the period commencing on (and
including) a given Valuation Date and ending 41 days thereafter.
(oo) "FITCH HEDGING TRANSACTION" shall have the meaning specified in
paragraph (b)(1) of Section 13 of Part I of Article X of these Bylaws.
(pp) "FORWARD COMMITMENTS" shall have the meaning specified in
paragraph (a)(iv) of Section 13 of Part I of Article X of these Bylaws.
(qq) "HOLDER" with respect to shares of a series of Preferred Shares,
shall mean the registered holder of such shares as the same appears on
the record books of the Trust.
(rr) "HOLD ORDER" and "HOLD ORDERS" shall have the respective meanings
specified in paragraph (a) of Section 1 of Part II of Article X of
these Bylaws.
(ss) "INDEPENDENT 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.
(tt) "INITIAL RATE PERIOD" shall be the period from and including the
Date of Original Issue to but excluding _______ with respect to the
Series.
(uu) "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.
(vv) "LATE CHARGE" shall have the meaning specified in subparagraph
(e)(1)(B) of Section 2 of Part I of Article X of these Bylaws.
(ww) "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.
(xx) "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
-15-
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.
(yy) "LIQUIDATION PREFERENCE" with respect to a given number of
Preferred Shares, means $25,000 times that number.
(zz) "London Business Day" means any day on which commercial banks are
generally open for business in London.
(aaa) "MARKET VALUE" of any asset of the Trust shall mean the market
value thereof determined in accordance with the pricing procedures of
the Trust.
(bbb) "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.
-16-
[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.]
(ccc) "MINIMUM RATE PERIOD" shall mean any Rate Period consisting of 7
Rate Period Days for the Preferred Shares.
(ddd) "XXXXX'X" shall mean Xxxxx'x Investors Service, Inc., a Delaware
corporation, and its successors.
(eee) "XXXXX'X DISCOUNT FACTOR" shall mean, for purposes of determining
the Discounted Value of any Xxxxx'x Eligible Asset, the percentage
determined as follows. The Xxxxx'x Discount Factor for any Xxxxx'x
Eligible Asset other than the securities set forth below will be the
percentage provided in writing by Xxxxx'x.
(i) Common Shares and Preferred Shares of REITs and Other Real
Estate Companies:
DISCOUNT FACTOR (1)(2)(3)
---------------
Common Shares of REITs 154%
Preferred Shares of REITs
with Senior Implied or Unsecured 154%
Xxxxx'x (or Xxxxx) rating:
without Senior Implied or Unsecured 208%
Xxxxx'x (or Fitch) rating:
DISCOUNT FACTOR (1)(2)(3)
---------------
Preferred Shares of Other Real Estate Companies
with Senior Implied or Unsecured 208%
Xxxxx'x (or Xxxxx) rating:
without Senior Implied or Unsecured 250%
Xxxxx'x (or Fitch) rating
(1) A Discount Factor of 250% will be applied to those assets in a
single Xxxxx'x Real Estate Industry/Property Sector Classification that
exceed 30% of Xxxxx'x Eligible Assets but are not greater than 35% of
Xxxxx'x Eligible Assets.
(2) A Discount Factor of 250% will be applied if dividends on such
securities have not been paid consistently (either quarterly or
annually) over the previous three years, or for such shorter time period
that such securities have been outstanding.
(3) A Discount Factor of 250% will be applied if the market
capitalization (including common shares and preferred shares) of an
issuer is below $500 million.
(ii) Debt Securities of REITs and Other Real Estate
Companies(1):
-17-
MATURITY IN YEARS Aaa Aa A Baa Ba B UNRATED(2)
--- -- - --- -- - --------
1 or less 109% 112% 115% 118% 137% 150% 250%
2 or less (but longer than 1) 115% 118% 122% 125% 146% 160% 250%
3 or less (but longer than 2) 120% 123% 127% 131% 153% 168% 250%
4 or less (but longer than 3) 126% 129% 133% 138% 161% 176% 250%
5 or less (but longer than 4) 132% 135% 139% 144% 168% 185% 250%
7 or less (but longer than 5) 139% 143% 147% 152% 179% 197% 250%
10 or less (but longer than 7) 145% 150% 155% 160% 189% 208% 250%
15 or less (but longer than 10) 150% 155% 160% 165% 196% 216% 250%
20 or less (but longer than 15) 150% 155% 160% 165% 196% 228% 250%
30 or less (but longer than 20) 150% 155% 160% 165% 196% 229% 250%
Greater than 30 165% 173% 181% 189% 205% 240% 250%
(1) The Xxxxx'x Discount Factors for debt securities shall also be
applied to any interest rate swap or cap, in which case the rating of
the counterparty shall determine the appropriate rating category.
(2) 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 Xxxxx'x and
unrated securities, which are securities rated by neither Xxxxx'x, S&P
nor Fitch, are limited to 10% of Xxxxx'x Eligible Assets. If a
corporate, municipal or other debt security is unrated by Xxxxx'x, S&P
or Fitch, the Trust will use the percentage set forth under "Unrated" in
this table. Ratings assigned by S&P or Fitch are generally accepted by
Xxxxx'x 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.
(iii) U.S. Treasury Securities and U.S. Treasury Strips:
REMAINING TERM TO U.S. TREASURY SECURITIES U.S. TREASURY
MATURITY FACTOR DISCOUNT FACTOR STRIPS DISCOUNT
----------------- ------------------------ ---------------
1 year or less 107% 107%
2 years or less (but longer than 1 year) 113% 115%
3 years or less (but longer than 2 years) 118% 121%
4 years or less (but longer than 3 years) 123% 128%
5 years or less (but longer than 4 years) 128% 135%
7 years or less (but longer than 5 years) 135% 147%
10 years or less (but longer than 7 years) 141% 163%
15 years or less (but longer than 10 years) 146% 191%
20 years or less (but longer than 15 years) 154% 218%
30 years or less (but longer than 20 years) 154% 244%
-18-
(iv) Short-term instruments: The Xxxxx'x Discount Factor
applied to short-term portfolio securities, including without
limitation corporate 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 49 days of the relevant
valuation date; (B) 115%, so long as such portfolio securities
do not mature within the Xxxxx'x Exposure Period or have a
demand feature at par not exercisable within 49 days of the
relevant valuation date; and (C) 125%, if such securities are
not rated by Xxxxx'x, so long as such portfolio securities are
rated at least A-1+/AA or SP-1+/AA by S&P and mature or have a
demand feature at par exercisable within 49 days of the
relevant valuation date. The Xxxxx'x Discount Factor applied
to 2a-7 Money Market Funds will be 110%. A Xxxxx'x Discount
Factor of 100% will be applied to cash.
(fff) "XXXXX'X ELIGIBLE ASSETS" shall mean the following:
(i) Common shares, preferred shares and any debt security of
REITs and Real Estate Companies.
(a) Common shares of REITs and preferred shares and
any debt security of REITs and Other Real Estate Companies:
(A) which comprise at least 7 of the 14 Xxxxx'x Real Estate
Industry/Property Sector Classifications ("Xxxxx'x Sector
Classifications") listed below and of which no more than ___%
may constitute a single such classification; (B) which in the
aggregate constitute at least [ ] separate classes of common
shares, preferred shares, and debt securities, issued by at
least [ ] issuers; (C) issued by a single issuer which in the
aggregate constitute no more than 7.0% of the Market Value of
Moody's Eligible Assets, (D) issued by a single issuer which,
with respect to 50% of the Market Value of Moody's Eligible
Assets, constitute in the aggregate no more than 5% of Market
Value of Moody's Eligible Assets; and
(b) Unrated debt securities or preferred securities
issued by an issuer which: (A) has not filed for bankruptcy
within the past three years; (B) is current on all principal
and interest on such debt security; (C) is current on such
preferred security distributions; (D) possesses a current,
unqualified auditor's report without qualified, explanatory
language and (E) in the aggregate, do not exceed 10% of the
discounted Moody's Eligible Assets;
(ii) Interest rate swaps or caps entered into according to
International Swap Dealers Association ("ISDA") standards if
(a) the counterparty to the swap transaction has a short-term
rating of not less than P-1 or, if the counterparty does not
have a short-term rating, the counterparty's senior unsecured
long-term debt rating is Aa3 or higher and (b) the original
aggregate notional amount of the interest rate swap or cap
transaction or transactions is not to be greater than the
liquidation preference of the Preferred Shares originally
issued. The interest rate swap or cap transaction will be
marked-to-market daily;
-19-
(iii) U.S. Treasury Securities and Treasury Strips;
(iv) Short-Term Money Market Instruments so long as (A) such
securities are rated at least P-1, (B) in the case of demand
deposits, time deposits and overnight funds, the depository
institution is rated at least A2, (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 A2 and the security matures within one month, (2)
is rated A1 and the security matures within three months or
(3) is rated at least Aa3 and the security matures within six
months; PROVIDED, HOWEVER, that for purposes of this
definition, such instruments (other than commercial paper
rated by Fitch and not rated by Moody's) need not meet any
otherwise applicable Xxxxx'x rating criteria; and
(v) Cash (including, for this purpose, interest and dividends
due on assets rated (A) Baa3 or higher by Moody's if the
payment date is within five Business Days of the Valuation
Date, (B) A2 or higher if the payment date is within thirty
days of the Valuation Date, and (C) A1 or higher if the
payment date is within 49 days of the relevant valuation date;
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 Moody's and the
Trust may agree from time to time) and receivables for Moody's
Eligible Assets sold if the receivable is due within five
Business Days of the Valuation Date.
(ggg) "MOODY'S HEDGING TRANSACTION" shall have the meaning specified in
paragraph (a)(i) of Section 13 of Part I of Article X of these Bylaws.
(hhh) "MOODY'S REAL ESTATE INDUSTRY/PROPERTY SECTOR CLASSIFICATION"
means, for the purposes of determining Moody's Eligible Assets, each of
the following Industry Classifications (as defined by the National
Association of Real Estate Investment Trusts, "NAREIT"):
1. Office
2. Industrial
3. Mixed
4. Shopping Centers
5. Regional Malls
6. Free Standing
7. Apartments
8. Manufactured Homes
9. Diversified
-20-
10. Lodging/Resorts
11. Health Care
12. Home Financing
13. Commercial Financing
14. Self Storage
The Trust will use its discretion in determining
which NAREIT Industry Classification is applicable to
a particular investment in consultation with the
independent auditor and/or Moody's, as necessary.
(iii) "1940 ACT" shall mean the Investment Company Act of 1940, as
amended from time to time.
(jjj) "1940 ACT CURE DATE," with respect to the failure by the Trust to
maintain the 1940 Act Preferred Shares Asset Coverage (as required by
Section 6 of Part I of Article X of these Bylaws) as of the last
Business Day of each month, shall mean the last Business Day of the
following month.
(kkk) "1940 ACT PREFERRED SHARES ASSET COVERAGE" shall mean asset
coverage, as defined in Section 18(h) of the 1940 Act, of at least 200%
with respect to all outstanding senior securities of the Trust which
are shares, including all outstanding Preferred Shares (or such other
asset coverage as may in the future be specified in or under the 1940
Act as the minimum asset coverage for senior securities which are
shares or stock of a closed-end investment company as a condition of
declaring dividends on its common shares or stock).
(lll) "NOTICE OF REDEMPTION" shall mean any notice with respect to the
redemption of Preferred Shares pursuant to paragraph (c) of Section 11
of Part I of Article X of these Bylaws.
(mmm) "NOTICE OF SPECIAL RATE PERIOD" shall mean any notice with
respect to a Special Rate Period of shares of a series of Preferred
Shares pursuant to subparagraph (d)(i) of Section 4 of Part I of
Article X of these Bylaws.
(nnn) "ORDER" and "ORDERS" shall have the respective meanings specified
in paragraph (a) of Section 1 of Part II of Article X of these Bylaws.
(ooo) "OTHER REAL ESTATE COMPANIES" shall mean companies that generally
derive at least 50% of their revenue from real estate or have at least
50% of their assets in real estate, but not including REITs.
(ppp) "OUTSTANDING" shall mean, as of any Auction Date with respect to
shares of a series of Preferred Shares, the number of shares
theretofore issued by the Trust except, without duplication, (i) any
shares of the Series theretofore cancelled or delivered to the
-21-
Auction Agent for cancellation or redeemed by the Trust, (ii) any
shares of the Series as to which the Trust or any Affiliate thereof
shall be an Existing Holder and (iii) any shares of the Series
represented by any certificate in lieu of which a new certificate has
been executed and delivered by the Trust.
(qqq) "PERSON" shall mean and include an individual, a partnership, a
corporation, a trust, an unincorporated association, a joint venture or
other entity or a government or any agency or political subdivision
thereof.
(rrr) "POTENTIAL BENEFICIAL OWNER," with respect to shares of a series
of Preferred Shares, shall mean a customer (including broker dealers
which are not Broker Dealers) of a Broker-Dealer that is not a
Beneficial Owner of shares of the Series but that wishes to purchase
shares of the Series, or that is a Beneficial Owner of shares of the
Series that wishes to purchase additional shares of the Series.
(sss) "POTENTIAL HOLDER," with respect to Preferred Shares, shall mean
a Broker-Dealer (or any such other person as may be permitted by the
Trust) that is not an Existing Holder of Preferred Shares or that is an
Existing Holder of Preferred Shares that wishes to become the Existing
Holder of additional Preferred Shares.
(ttt) "PREFERRED SHARES" shall have the meaning set forth in the first
paragraph of Article X of these Bylaws.
(uuu) "PREFERRED SHARES BASIC MAINTENANCE AMOUNT" as of any Valuation
Date, shall mean the dollar amount equal to the sum of (i)(A) the
product of the number of Preferred Shares outstanding on such date
(including Preferred Shares held by an Affiliate of the Trust but not
Preferred Shares held by the Trust) multiplied by $25,000 (plus the
product of the number of shares of any other series of preferred shares
outstanding on such date multiplied by the liquidation preference of
such shares) plus any redemption premium applicable to Preferred Shares
(or other preferred shares) then subject to redemption; (B) the
aggregate amount of distributions that will have accumulated at the
respective Applicable Rates (whether or not earned or declared) to (but
not including) the first respective Distribution Payment Dates for the
Preferred Shares outstanding that follows such Valuation Date; (C) the
aggregate amount of distributions that would accumulate on Preferred
Shares outstanding from such first Distribution Payment Dates therefor
referenced in (B) of this paragraph through the 45th day after such
Valuation Date at the respective Applicable Rates referenced in (B) of
this paragraph; (D) the amount of anticipated non-interest expenses of
the Trust for the 90 days subsequent to such Valuation Date; (E) the
amount of the current outstanding balances of any indebtedness or
obligations of the Trust senior in right of payment to the Preferred
Shares plus interest actually accrued together with 30 days additional
interest on the current outstanding balances calculated at the current
rate; and (F) any other current liabilities payable during the 30 days
subsequent to such Valuation Date, including, without limitation,
indebtedness due within one year and any redemption premium due with
respect to the Preferred Shares for which a Notice of Redemption has
been sent, as of such Valuation Date, to the extent not reflected in
any of (i)(A) through (i)(E) (including, without limitation, any
liabilities incurred for the purpose of clearing
-22-
securities transactions) less (ii) the sum of any cash plus the value
of any of the Trust's assets irrevocably deposited by the Trust for the
payment of any of (i)(A) through (i)(F) ("value," for purposes of this
clause (ii), means the Discounted Value of the security, except that if
the security matures prior to the relevant redemption payment date and
is either fully guaranteed by the U.S. Government or is rated at least
P-1 by Moody's, it will be valued at its face value).
(vvv) "PREFERRED SHARES BASIC MAINTENANCE CURE DATE," with respect to
the failure by the Trust to satisfy the Preferred Shares Basic
Maintenance Amount (as required by paragraph (a) of Section 7 of Part I
of Article X of these Bylaws) as of a given Valuation Date, shall mean
the seventh Business Day following such Valuation Date.
(www) "PREFERRED SHARES BASIC MAINTENANCE REPORT" shall mean a report
signed by the President, Treasurer, Assistant Treasurer, Controller,
Assistant Controller or any Senior Vice President or Vice President of
the Trust which sets forth, as of the related Valuation Date, the
assets of the Trust, the Market Value and the Discounted Value thereof
(seriatim and in aggregate), and the Preferred Shares Basic Maintenance
Amount.
(xxx) "PRICING SERVICE" shall mean any pricing service designated from
time to time in accordance with the Trust's pricing procedures.
(yyy) "QUARTERLY VALUATION DATE" shall mean the last Business Day of
each March, June, September and December of each year, commencing on
____________.
(zzz) "RATE PERIOD," with respect to shares of a series of Preferred
Shares, shall mean the Initial Rate Period and any Subsequent Rate
Period, including any Special Rate Period.
(aaaa) "RATE PERIOD DAYS," for any Rate Period or Distribution Period,
means the number of days that would constitute such Rate Period or
Distribution Period but for the application of paragraph (d) of Section
2 of Part I of Article X of these Bylaws or paragraph (b) of Section 4
of Part I of Article X of these Bylaws.
(bbbb) "Reference Banks" means four major banks in the London interbank
market selected by RBC Xxxx Xxxxxxxx Inc. or its affiliates or
successors or such other party as the Trust may from time to time
appoint.
(cccc) "REIT," or real estate investment trust, means a company
dedicated to owning, operating or financing real estate.
(dddd) "REDEMPTION PRICE" shall mean the applicable redemption price
specified in Section 11 of Part I of Article X of these Bylaws.
(eeee) "REFERENCE RATE" shall mean, with respect to the determination
of the Maximum Rate, the applicable LIBOR Rate (for a distribution
period or a special
-23-
distribution period of fewer than 365 days), and the applicable
Treasury Index Rate (for a special distribution period of 365 days or
more).
(ffff) "S&P" shall mean Standard & Poor's Ratings Services and its
successors.
(gggg) "SECURITIES DEPOSITORY" shall mean The Depository Trust Company
and its successors and assigns or any other securities depository
selected by the Trust that agrees to follow the procedures required to
be followed by such securities depository in connection with the
Preferred Shares.
(hhhh) "SELL ORDER" and "SELL ORDERS" shall have the respective
meanings specified in paragraph (a) of Section 1 of Part II of Article
X of these Bylaws.
(iiii) "SERIES" shall have the meaning given in the first paragraph of
Article X of these Bylaws.
(jjjj) "SHORT-TERM MONEY MARKET INSTRUMENTS" shall mean the following
types of instruments if, on the date of purchase or other acquisition
thereof by the Trust, the remaining term to maturity thereof is not in
excess of 180 days:
(i) commercial paper rated A-1 or the equivalent if such
commercial paper matures in 30 days or A-1+ or the equivalent
if such commercial paper matures in over 30 days;
(ii) demand or time deposits in, and banker's acceptances and
certificates of deposit of (A) a depository institution or
trust company incorporated under the laws of the United States
of America or any state thereof or the District of Columbia or
(B) a United States branch office or agency of a foreign
depository institution (provided that such branch office or
agency is subject to banking regulation under the laws of the
United States, any state thereof or the District of Columbia);
(iii) overnight funds;
(iv) U.S. Government Securities;
(v) registered investment companies that are money market
funds in compliance with Rule 2a-7 under the 1940 Act ("2a-7
Money Market Funds"); and
(vi) overnight repurchase agreements.
(kkkk) "SPECIAL RATE PERIOD," with respect to Preferred Shares, shall
have the meaning specified in paragraph (a) of Section 4 of Part I of
Article X of these Bylaws.
(llll) "SPECIAL REDEMPTION PROVISIONS" shall have the meaning specified
in subparagraph (a)(i) of Section 11 of Part I of Article X of these
Bylaws.
(mmmm) "SUBMISSION DEADLINE" shall mean 1:00 P.M., Eastern time, on any
Auction Date or such other time on any Auction Date by which
Broker-Dealers are
-24-
required to submit Orders to the Auction Agent as specified by the
Auction Agent from time to time.
(nnnn) "SUBMITTED BID" and "SUBMITTED BIDS" shall have the respective
meanings specified in paragraph (a) of Section 3 of Part II of Article
X of these Bylaws.
(oooo) "SUBMITTED HOLD ORDER" and "SUBMITTED HOLD ORDERS" shall have
the respective meanings specified in paragraph (a) of Section 3 of Part
II of Article X of these Bylaws.
(pppp) "SUBMITTED ORDER" and "SUBMITTED ORDERS" shall have the
respective meanings specified in paragraph (a) of Section 3 of Part II
of Article X of these Bylaws.
(qqqq) "SUBMITTED SELL ORDER" and "SUBMITTED SELL ORDERS" shall have
the respective meanings specified in paragraph (a) of Section 3 of Part
II of Article X of these Bylaws.
(rrrr) "SUBSEQUENT RATE PERIOD," with respect to Preferred Shares,
shall mean the period from and including the first day following the
Initial Rate Period of Preferred Shares to but excluding the next
Distribution Payment Date for Preferred Shares and any period
thereafter from and including one Distribution Payment Date for
Preferred Shares to but excluding the next succeeding Distribution
Payment Date for Preferred Shares; PROVIDED, HOWEVER, that if any
Subsequent Rate Period is also a Special Rate Period, such term shall
mean the period commencing on the first day of such Special Rate Period
and ending on the last day of the last Distribution Period thereof.
(ssss) "SUBSTITUTE COMMERCIAL PAPER DEALER" shall mean [ ] or their
respective affiliates or successors, if such entity is a commercial
paper dealer or such other entity designated by the Trust; PROVIDED,
HOWEVER, that none of such entities shall be a Commercial Paper Dealer.
(tttt) "SUBSTITUTE U.S. GOVERNMENT SECURITIES DEALER" shall mean
[ ] or their respective affiliates or successors, if
such entity is a U.S. Government securities dealer or such other entity
designated by the Trust; PROVIDED, HOWEVER, that none of such entities
shall be a U.S. Government Securities Dealer.
(uuuu) "SUFFICIENT CLEARING BIDS" shall have the meaning specified in
paragraph (a) of Section 3 of Part II of Article X of these Bylaws.
(vvvv) "TREASURY XXXX" shall mean a direct obligation of the U.S.
Government having a maturity at the time of issuance of 364 days or
less.
(wwww) "TREASURY FUTURES" shall have the meaning specified in paragraph
(a)(i) of Section 13 of Part I of Article X of these Bylaws.
(xxxx) "TREASURY INDEX RATE" means the average yield to maturity for
actively traded marketable U.S. Treasury fixed interest rate securities
having the same number of
-25-
30-day periods to maturity as the length of the applicable Distribution
Period, determined, to the extent necessary, by linear interpolation
based upon the yield for such securities having the next shorter and
next longer number of 30-day periods to maturity treating all
Distribution Periods with a length greater than the longest maturity
for such securities as having a length equal to such longest maturity,
in all cases based upon data set forth in the most recent weekly
statistical release published by the Board of Governors of the Federal
Reserve System (currently in H.15 (519)); PROVIDED, HOWEVER, if the
most recent such statistical release shall not have been published
during the 15 days preceding the date of computation, the foregoing
computations shall be based upon the average of comparable data as
quoted to the Trust by at least three recognized dealers in U.S.
Government Securities selected by the Trust.
(yyyy) "TREASURY NOTE" shall mean a direct obligation of the U.S.
Government having a maturity at the time of issuance of five years or
less but more than 364 days.
(zzzz) "TREASURY NOTE RATE," on any date for any Rate Period, shall
mean (i) the yield on the most recently auctioned Treasury Note with a
remaining maturity closest to the length of such Rate Period, as quoted
in The Wall Street Journal on such date for the Business Day next
preceding such date; or (ii) in the event that any such rate is not
published in The Wall Street Journal, then the yield as calculated by
reference to the arithmetic average of the bid price quotations of the
most recently auctioned Treasury Note with a remaining maturity closest
to the length of such Rate Period, as determined by bid price
quotations as of the close of business on the Business Day immediately
preceding such date obtained from the U.S. Government Securities
Dealers to the Auction Agent. If any U.S. Government Securities Dealer
does not quote a rate required to determine the Treasury Note Rate, the
Treasury Note Rate shall be determined on the basis of the quotation or
quotations furnished by the remaining U.S. Government Securities Dealer
or U.S. Government Securities Dealers and any Substitute U.S.
Government Securities Dealers selected by the Trust to provide such
rate or rates not being supplied by any U.S. Government Securities
Dealer or U.S. Government Securities Dealers, as the case may be, or,
if the Trust does not select any such Substitute U.S. Government
Securities Dealer or Substitute U.S. Government Securities Dealers, by
the remaining U.S. Government Securities Dealer or U.S. Government
Securities Dealers.
(aaaaa) "TRUST" shall mean the entity named on the first page of these
Bylaws, which is the issuer of the Preferred Shares.
(bbbbb) "U.S. GOVERNMENT SECURITIES DEALER" shall mean [ ]
and any other U.S. Government Securities Dealer selected by the Trust
as to which Moody's (if Xxxxx'x is then rating the Preferred Shares) or
Fitch (if Fitch is then rating the Preferred Shares) shall not have
objected or their respective affiliates or successors, if such entity
is a U.S. Government Securities Dealer.
(ccccc) "U.S. TREASURY SECURITIES" means direct obligations of the
United States Treasury that are entitled to the full faith and credit
of the United States.
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(ddddd) "U.S. TREASURY STRIPS" means securities based on U.S. Treasury
Securities created through the Separate Trading of Registered Interest
and Principal of Securities program.
(eeeee) "VALUATION DATE" shall mean, for purposes of determining
whether the Trust is maintaining the Preferred Shares Basic Maintenance
Amount, the last Business Day of each month.
(fffff) "VOTING PERIOD" shall have the meaning specified in paragraph
(b) of Section 5 of Part I of Article X of these Bylaws.
(ggggg) "WINNING BID RATE" shall have the meaning specified in
paragraph (a) of Section 3 of Part II of Article X of these Bylaws.
PART I
1. NUMBER OF AUTHORIZED SHARES. The number of authorized shares
constituting the Series is 3000, of which ___ shares will be issued on March __,
2004.
2. DISTRIBUTIONS.
(a) RANKING. The Preferred Shares shall rank on a parity with
each other and with any other series of preferred shares as to the
payment of distributions by the Trust.
(b) CUMULATIVE CASH DISTRIBUTIONS. The Holders Preferred
Shares shall be entitled to receive, when, as and if declared by the
Board of Trustees, out of funds legally available therefor in
accordance with the Declaration of Trust and applicable law, cumulative
cash distributions at the Applicable Rate for shares of the Series,
determined as set forth in paragraph (e) of this Section 2, and no more
(except to the extent set forth in Section 3 of this Part I), payable
on the Distribution Payment Dates with respect to shares of the Series
determined pursuant to paragraph (d) of this Section 2. Holders of
Preferred Shares shall not be entitled to any distribution, whether
payable in cash, property or shares, in excess of full cumulative
distributions, as herein provided, on Preferred Shares. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
distribution payment or payments on Preferred Shares which may be in
arrears, and, except to the extent set forth in subparagraph (e)(i) of
this Section 2, no additional sum of money shall be payable in respect
of any such arrearage.
(c) DISTRIBUTIONS CUMULATIVE FROM DATE OF ORIGINAL ISSUE.
Distributions on Preferred Shares shall accumulate at the Applicable
Rate from the Date of Original Issue thereof.
(d) DISTRIBUTION PAYMENT DATES AND ADJUSTMENT THEREOF.
Distributions on Preferred Shares shall be payable for the Initial Rate
Period on _________, and, if declared by the Board of Trustees (which
declaration may be by a single resolution for multiple such dates), on
each seventh day thereafter (or after the Distribution Payment Date
with respect to an intervening Special Rate Period), with
-27-
respect to the Preferred Share (each date being a "Distribution Payment
Date"); PROVIDED, HOWEVER, that:
(i) if the day on which distributions would otherwise
be payable on Preferred Shares is not a Business Day,
then such distributions shall be payable on such
Preferred Shares on the first Business Day that falls
after such day, and
(ii) notwithstanding this paragraph (d) of Section 2,
the Trust in its discretion may establish the
Distribution Payment Dates in respect of any Special
Rate Period of Preferred Shares consisting of more
than 7 Rate Period Days, with respect to the Series;
PROVIDED, HOWEVER, that such dates shall be set forth
in the Notice of Special Rate Period relating to such
Special Rate Period, as delivered to the Auction
Agent, which Notice of Special Rate Period shall be
filed with the Secretary of the Trust; and further
provided that (1) any such Distribution Payment Date
shall be a Business Day and (2) the last Distribution
Payment Date in respect of such Special Rate Period
shall be the Business Day immediately following the
last day thereof, as such last day is determined in
accordance with paragraph (b) of Section 4 of this
Part I.
(e) DISTRIBUTION RATES AND CALCULATION OF DISTRIBUTIONS.
(i) DISTRIBUTION RATES. The distribution rate on
Preferred Shares during the period from and after the
Date of Original Issue of Preferred Shares to and
including the last day of the Initial Rate Period of
such Preferred Shares shall be equal to the rate per
annum set forth with respect to such Preferred Shares
under "Designation." The initial distribution rate on
any series of preferred shares subsequently
established by the Trust shall be the rate set forth
in or determined in accordance with the resolutions
of the Board of Trustees establishing the Series. For
each Subsequent Rate Period of Preferred Shares, the
distribution rate on such Preferred Shares shall be
equal to the rate per annum that results from an
Auction for shares of the Series on the Auction Date
next preceding such Subsequent Rate Period (but the
rate set at the Auction will not exceed the Maximum
Rate); PROVIDED, HOWEVER, that if:
(A) subject to Section 9 of Part II, an
Auction for any Subsequent Rate Period of
Preferred Shares is not held for any reason
other than as described below or if
Sufficient Clearing Orders have not been
made in an Auction (other than as a result
of all Preferred Shares being the subject of
Submitted Hold Orders), then the
distribution rate on the shares of the
Series for such Subsequent Rate Period will
be the Maximum Rate of the Series on the
Auction Date therefor;
(B) any Failure to Deposit shall have
occurred with respect to shares of the
Series during any Rate Period thereof (other
than any Special Rate Period consisting of
more than 364 Rate Period Days or any Rate
Period succeeding any Special Rate Period
consisting of more than 364 Rate Period Days
during which a Failure to Deposit occurred
that has not been cured), but, prior to
-28-
12:00 Noon, Eastern time, on the third
Business Day next succeeding the date on
which such Failure to Deposit occurred, such
Failure to Deposit shall have been cured in
accordance with paragraph (f) of this
Section 2 and the Trust shall have paid to
the Auction Agent a late charge ("Late
Charge") equal to the sum of (1) if such
Failure to Deposit consisted of the failure
timely to pay to the Auction Agent the full
amount of distributions with respect to any
Distribution Period of shares of the Series,
an amount computed by multiplying (x) 200%
of the Reference Rate for the Rate Period
during which such Failure to Deposit occurs
on the Distribution Payment Date for such
Distribution Period by (y) a fraction, the
numerator of which shall be the number of
days for which such Failure to Deposit has
not been cured in accordance with paragraph
(f) of this Section 2 (including the day
such Failure to Deposit occurs and excluding
the day such Failure to Deposit is cured)
and the denominator of which shall be 360,
and applying the rate obtained against the
aggregate Liquidation Preference of the
outstanding shares of the Series and (2) if
such Failure to Deposit consisted of the
failure timely to pay to the Auction Agent
the Redemption Price of the shares, if any,
of the Series for which Notice of Redemption
has been mailed by the Trust pursuant to
paragraph (c) of Section 11 of this Part I,
an amount computed by multiplying (x) 200%
of the Reference Rate for the Rate Period
during which such Failure to Deposit occurs
on the redemption date by (y) a fraction,
the numerator of which shall be the number
of days for which such Failure to Deposit is
not cured in accordance with paragraph (f)
of this Section 2 (including the day such
Failure to Deposit occurs and excluding the
day such Failure to Deposit is cured) and
the denominator of which shall be 360, and
applying the rate obtained against the
aggregate Liquidation Preference of the
outstanding shares of the Series to be
redeemed, no Auction will be held, in
respect of shares of the Series for the
Subsequent Rate Period thereof and the
distribution rate for shares of the Series
for such Subsequent Rate Period will be the
Maximum Rate on the Auction Date for such
Subsequent Rate Period;
(C) any Failure to Deposit shall have
occurred with respect to shares of the
Series during any Rate Period thereof (other
than any Special Rate Period consisting of
more than 364 Rate Period Days or any Rate
Period succeeding any Special Rate Period
consisting of more than 364 Rate Period Days
during which a Failure to Deposit occurred
that has not been cured), and, prior to
12:00 Noon, Eastern time, on the third
Business Day next succeeding the date on
which such Failure to Deposit occurred, such
Failure to Deposit shall not have been cured
in accordance with paragraph (f) of this
Section 2 or the Trust shall not have paid
the applicable Late Charge to the Auction
Agent, no Auction will be held in respect of
shares of the Series for the first
Subsequent Rate Period thereof thereafter
(or for any Rate Period thereof thereafter
to and including the Rate Period during
which (1) such Failure to Deposit is cured
in accordance with paragraph (f) of this
Section 2 and (2) the Trust pays the
applicable Late Charge to the Auction Agent
(the condition set forth in this clause (2)
to apply only in the event Xxxxx'x is rating
such shares at the time the Trust cures such
Failure to Deposit), in each case no later
than 12:00
-00-
Xxxx, Xxxxxxx time, on the fourth Business
Day prior to the end of such Rate Period),
and the distribution rate for shares of the
Series for each such Subsequent Rate Period
for shares of the Series shall be a rate per
annum equal to the Maximum Rate on the
Auction Date for such Subsequent Rate Period
(but with the prevailing rating for shares
of the Series, for purposes of determining
such Maximum Rate, being deemed to be "Below
"Baa3"/BBB-"); or
(D) any Failure to Deposit shall have
occurred with respect to shares of the
Series during a Special Rate Period thereof
consisting of more than 364 Rate Period
Days, or during any Rate Period thereof
succeeding any Special Rate Period
consisting of more than 364 Rate Period Days
during which a Failure to Deposit occurred
that has not been cured, and, prior to 12:00
Noon, Eastern time, on the fourth Business
Day preceding the Auction Date for the Rate
Period subsequent to such Rate Period, such
Failure to Deposit shall not have been cured
in accordance with paragraph (f) of this
Section 2 or, in the event Xxxxx'x is then
rating such shares, the Trust shall not have
paid the applicable Late Charge to the
Auction Agent (such Late Charge, for
purposes of this subparagraph (D), to be
calculated by using, as the Reference Rate,
the Reference Rate applicable to a Rate
Period (x) consisting of more than 270 Rate
Period Days and (y) commencing on the date
on which the Rate Period during which
Failure to Deposit occurs commenced), no
Auction will be held with respect to shares
of the Series for such Subsequent Rate
Period (or for any Rate Period thereof
thereafter to and including the Rate Period
during which (1) such Failure to Deposit is
cured in accordance with paragraph (f) of
this Section 2 and (2) the Trust pays the
applicable Late Charge to the Auction Agent
(the condition set forth in this clause (2)
to apply only in the event Xxxxx'x is rating
such shares at the time the Trust cures such
Failure to Deposit), in each case no later
than 12:00 Noon, Eastern time, on the fourth
Business Day prior to the end of such Rate
Period), and the distribution rate for
shares of the Series for each such
Subsequent Rate Period shall be a rate per
annum equal to the Maximum Rate for shares
of the Series on the Auction Date for such
Subsequent Rate Period (but with the
prevailing rating for shares of the Series,
for purposes of determining such Maximum
Rate, being deemed to be "Below
"Baa3"/BBB-").
(ii) CALCULATION OF DISTRIBUTIONS. The amount of
distributions per share payable on Preferred Shares
on any date on which distributions on shares of the
Series shall be payable shall be computed by
multiplying the Applicable Rate for shares of the
Series in effect for such Distribution Period or
Distribution Periods or part thereof for which
distributions have not been paid by a fraction, the
numerator of which shall be the number of days in
such Distribution Period or Distribution Periods or
part thereof and the denominator of which shall be
360 if such Distribution Period consists of 7 Rate
Period Days for the Series, and 360 for all other
Distribution Periods, and applying the rate obtained
against $25,000.
-30-
(f) CURING A FAILURE TO DEPOSIT. A Failure to Deposit with
respect to Preferred Shares shall have been cured (if such Failure to
Deposit is not solely due to the willful failure of the Trust to make
the required payment to the Auction Agent) with respect to any Rate
Period of shares of the Series if, within the respective time periods
described in subparagraph (e)(i) of this Section 2, the Trust shall
have paid to the Auction Agent (A) all accumulated and unpaid
distributions on shares of the Series and (B) without duplication, the
Redemption Price for shares, if any, of the Series for which Notice of
Redemption has been mailed by the Trust pursuant to paragraph (c) of
Section 11 of Part I of Article X of these Bylaws; 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 Redemption Notice provides that redemption of such Preferred
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.
(g) DISTRIBUTION PAYMENTS BY TRUST TO AUCTION AGENT. The Trust
shall pay to the Auction Agent, not later than 12:00 Noon, Eastern
time, on each Distribution Payment Date for Preferred Shares, an
aggregate amount of funds available in The City of New York, New York,
equal to the distributions to be paid to all Holders of shares of the
Series on such Distribution Payment Date.
(h) AUCTION AGENT AS TRUSTEE OF DISTRIBUTION PAYMENTS BY
TRUST. All moneys paid to the Auction Agent for the payment of
distributions shall be held in trust for the payment of such
distributions by the Auction Agent for the benefit of the Holders
specified in paragraph (i) of this Section 2. Any moneys paid to the
Auction Agent in accordance with the foregoing but not applied by the
Auction Agent to the payment of distributions will, to the extent
permitted by law, be repaid to the Trust at the end of 90 days from the
date on which such moneys were so to have been applied.
(i) DISTRIBUTIONS PAID TO HOLDERS. Each distribution on
Preferred Shares shall be paid on the Distribution Payment Date
therefor to the Holders thereof as their names appear on the record
books of the Trust on the Business Day next preceding such Distribution
Payment Date.
(j) DISTRIBUTIONS CREDITED AGAINST EARLIEST ACCUMULATED BUT
UNPAID DISTRIBUTIONS. Any distribution payment made on Preferred Shares
shall first be credited against the earliest accumulated but unpaid
distributions due with respect to such Preferred Shares. Distributions
in arrears for any past Distribution Period may be declared and paid at
any time, without reference to any regular Distribution Payment Date,
to the Holders as their names appear on the record books of the Trust
on such date, not exceeding 15 days preceding the payment date thereof,
as may be fixed by the Board of Trustees.
3. RESERVED.
4. DESIGNATION OF SPECIAL RATE PERIODS.
-31-
(a) LENGTH OF AND PRECONDITIONS FOR SPECIAL RATE PERIOD. The
Trust, at its option, may designate any succeeding Subsequent Rate
Period of Preferred Shares as a special rate period consisting of a
specified number of Rate Period Days, other than the number of Rate
Period Days comprising a Minimum Rate Period, that is evenly divisible
by seven, subject to adjustment as provided in paragraph (b) of this
Section 4 (each such period, a "Special Rate Period"). A designation of
a Special Rate Period shall be effective only if (A) notice thereof
shall have been given in accordance with paragraph (c) and subparagraph
(d)(i) of this Section 4, (B) an Auction for shares of the Series shall
have been held on the Auction Date immediately preceding the first day
of such proposed Special Rate Period and Sufficient Clearing Bids for
shares of the Series shall have existed in such Auction, and (C) if any
Notice of Redemption shall have been mailed by the Trust pursuant to
paragraph (c) of Section 11 of this Part I with respect to any shares
of the Series, the Redemption Price with respect to such shares shall
have been deposited with the Auction Agent. In the event the Trust
wishes to designate any succeeding Subsequent Rate Period for Preferred
Shares as a Special Rate Period consisting of more than 28 Rate Period
Days, the Trust shall notify Fitch (if Fitch is then rating the
Preferred Shares) and Moody's (if Xxxxx'x is then rating the Preferred
Shares) in advance of the commencement of such Subsequent Rate Period
that the Trust wishes to designate such Subsequent Rate Period as a
Special Rate Period and shall provide Fitch (if Fitch is then rating
the Preferred Shares) and Moody's (if Xxxxx'x is then rating the
Preferred Shares) with such documents as either may request. In
addition, full cumulative distributions, any amounts due with respect
to mandatory redemptions and any additional distributions payable prior
to such date must be paid in full or deposited with the Auction Agent.
The Trust also must have portfolio securities with a discounted value
at least equal to the Preferred Share Maintenance Amount.
(b) ADJUSTMENT OF LENGTH OF SPECIAL RATE PERIOD. In the event
the Trust wishes to designate a Subsequent Rate Period as a Special
Rate Period, but the day following what would otherwise be the last day
of such Special Rate Period is not a Wednesday that is a Business Day
in case of the Series, then the Trust shall designate such Subsequent
Rate Period as a Special Rate Period consisting of the period
commencing on the first day following the end of the immediately
preceding Rate Period and ending on the first Tuesday that is followed
by a Wednesday that is a Business Day preceding what would otherwise be
such last day in the case of the Series.
(c) NOTICE OF PROPOSED SPECIAL RATE PERIOD. If the Trust
proposes to designate any succeeding Subsequent Rate Period of
Preferred Shares as a Special Rate Period pursuant to paragraph (a) of
this Section 4, not less than 7 (or such lesser number of days as
determined by the Trust with appropriate consultation with the Auction
Agent and Broker-Dealers) nor more than 30 days prior to the date the
Trust proposes to designate as the first day of such Special Rate
Period (which shall be such day that would otherwise be the first day
of a Minimum Rate Period), notice shall be mailed by the Trust by
first-class mail, postage prepaid, to the Holders of shares of the
Series. Each such notice shall state (A) that the Trust may exercise
its option to designate a succeeding Subsequent Rate Period of shares
of the Series as a Special Rate Period, specifying the first day
thereof and (B) that the Trust will, by 11:00 A.M., Eastern time, on
the second Business Day next preceding such date (or by such later time
or date, or both, as
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determined by the Trust with appropriate consultation with the Auction
Agent and Broker-Dealers) notify the Auction Agent of either (x) its
determination, subject to certain conditions, to exercise such option,
in which case the Trust shall specify the Special Rate Period
designated, or (y) its determination not to exercise such option.
(d) NOTICE OF SPECIAL RATE PERIOD. No later than 11:00 A.M.,
Eastern time, on the second Business Day next preceding the first day
of any proposed Special Rate Period of shares of a series of Preferred
Shares as to which notice has been given as set forth in paragraph (c)
of this Section 4 (or such later time or date, or both, as determined
by the Trust with appropriate consultation with the Auction Agent and
Broker-Dealers), the Trust shall deliver to the Auction Agent either:
(i) a notice ("Notice of Special Rate Period") stating (A)
that the Trust has determined to designate the next succeeding
Rate Period of shares of the Series as a Special Rate Period,
specifying the same and the first day thereof, (B) the Auction
Date immediately prior to the first day of such Special Rate
Period, (C) that such Special Rate Period shall not commence
if (1) an Auction for shares of the Series shall not be held
on such Auction Date for any reason or (2) an Auction for
shares of the Series shall be held on such Auction Date but
Sufficient Clearing Bids for shares of the Series shall not
exist in such Auction (other than because all Outstanding
shares of the Series are subject to Submitted Hold Orders),
(D) the scheduled Distribution Payment Dates for shares of the
Series during such Special Rate Period and (E) the Special
Redemption Provisions, if any, applicable to shares of the
Series in respect of such Special Rate Period, such notice to
be accompanied by a Preferred Shares Basic Maintenance Report
showing that, as of the third Business Day next preceding such
proposed Special Rate Period, Moody's Eligible Assets (if
Xxxxx'x is then rating the series in question) and Fitch
Eligible Assets (if Fitch is then rating the series in
question) each have an aggregate Discounted Value at least
equal to the Preferred Shares Basic Maintenance Amount as of
such Business Day (assuming for purposes of the foregoing
calculation that (a) the Maximum Rate is the Maximum Rate on
such Business Day as if such Business Day were the Auction
Date for the proposed Special Rate Period, and (b) if
applicable, the Moody's Discount Factors applicable to Moody's
Eligible Assets and the Fitch Discount Factors applicable to
Fitch Eligible Assets are determined by reference to the first
Exposure Period longer than the Exposure Period then
applicable to the Trust, as described in the definitions of
Moody's Discount Factor and Fitch Discount Factor herein); or
(ii) a notice stating that the Trust has determined not to
exercise its option to designate a Special Rate Period of
shares of the Series and that the next succeeding Rate Period
of shares of the Series shall be a Minimum Rate Period.
(e) FAILURE TO DELIVER NOTICE OF SPECIAL RATE PERIOD. If the
Trust fails to deliver either of the notices described in subparagraphs
(d)(i) or (d)(ii) of this Section 4 (and, in the case of the notice
described in subparagraph (d)(i) of this Section 4, a Preferred Shares
Basic Maintenance Report to the effect set forth in such subparagraph
(if either Moody's or Fitch is then rating the series in question))
with respect to any
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designation of any proposed Special Rate Period to the Auction Agent by
11:00 A.M., Eastern time, on the second Business Day next preceding the
first day of such proposed Special Rate Period (or by such later time
or date, or both, as determined by the Trust with appropriate
consultation with the Auction Agent and Broker-Dealers), the Trust
shall be deemed to have delivered a notice to the Auction Agent with
respect to such Special Rate Period to the effect set forth in
subparagraph (d)(ii) of this Section 4. In the event the Trust delivers
to the Auction Agent a notice described in subparagraph (d)(i) of this
Section 4, it shall file a copy of such notice with the Secretary of
the Trust, and the contents of such notice shall be binding on the
Trust. In the event the Trust delivers to the Auction Agent a notice
described in subparagraph (d)(ii) of this Section 4, the Trust will
provide Moody's (if Xxxxx'x is then rating the series in question) and
Fitch (if Fitch is then rating the series in question) a copy of such
notice.
5. VOTING RIGHTS.
(a) ONE VOTE PER PREFERRED SHARE. Except as otherwise provided
in the Declaration of Trust or as otherwise required by law, (i) each
Holder of Preferred Shares shall be entitled to one vote for each
Preferred Share held by such Holder on each matter submitted to a vote
of Shareholders of the Trust, and (ii) the holders of outstanding
shares of preferred shares, including Preferred Shares, and of Common
Shares shall vote together as a single class; PROVIDED, HOWEVER, that,
at any meeting of the Shareholders of the Trust held for the election
of Trustees, the holders of outstanding shares of preferred shares,
including Preferred Shares, represented in person or by proxy at said
meeting, shall be entitled, as a class, to the exclusion of the holders
of all other securities and classes of shares of the Trust, to elect
two Trustees of the Trust (regardless of the total number of Trustees
serving on the Trust's Board of Trustees), each share of preferred
shares, including each Preferred Share, entitling the holder thereof to
one vote; provided, further, that if the Board of Trustees shall be
divided into one or more classes, the Board of Trustees shall determine
to which class or classes the Trustees elected by the holders of
preferred shares shall be assigned and the holders of the preferred
shares shall only be entitled to elect the Trustees so designated as
being elected by the holders of the preferred shares when their term
shall have expired; provided, finally, that such Trustees appointed by
the holders of preferred shares shall be allocated as evenly as
possible among the classes of Trustees. Subject to paragraph (b) of
this Section 5, the holders of outstanding Common Shares and preferred
shares, including Preferred Shares, voting together as a single class,
shall elect the balance of the Trustees.
(b) VOTING FOR ADDITIONAL TRUSTEES.
(i) VOTING PERIOD. Except as otherwise provided in the
Declaration of Trust or as otherwise required by law, during
any period in which any one or more of the conditions
described in subparagraphs (A) or (B) of this subparagraph
(b)(i) shall exist (such period being referred to herein as a
"Voting Period"), the number of Trustees constituting the
Board of Trustees shall be automatically increased by the
smallest number that, when added to the two Trustees elected
exclusively by the holders of preferred shares, including
Preferred Shares, would constitute a majority of the Board of
Trustees as so increased by such smallest number;
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and the holders of preferred shares, including Preferred
Shares, shall be entitled, voting as a class on a
one-vote-per-share basis (to the exclusion of the holders of
all other securities and classes of shares of the Trust), to
elect such smallest number of additional Trustees, together
with the two Trustees that such holders are in any event
entitled to elect. A Voting Period shall commence:
(A) if at the close of business on any distribution
payment date accumulated distributions (whether or
not earned or declared) on any outstanding preferred
shares, including Preferred Shares, equal to at least
two full years' distributions shall be due and unpaid
and sufficient cash or specified securities shall not
have been deposited with the Auction Agent for the
payment of such accumulated distributions; or
(B) if at any time holders of Preferred Shares are
entitled under the 1940 Act to elect a majority of
the Trustees of the Trust.
Upon the termination of a Voting Period, the voting
rights described in this subparagraph (b)(i) shall cease,
subject always, however, to the revesting of such voting
rights in the Holders upon the further occurrence of any of
the events described in this subparagraph (b)(i).
(ii) NOTICE OF SPECIAL MEETING. As soon as practicable after
the accrual of any right of the holders of preferred shares,
including Preferred Shares, to elect additional Trustees as
described in subparagraph (b)(i) of this Section 5, the Trust
shall notify the Auction Agent and the Auction Agent shall
call a special meeting of registered holders, by mailing a
notice of such special meeting to such holders, such meeting
to be held not less than 10 nor more than 30 days after the
date of mailing of such notice. If the Trust fails to send
such notice to the Auction Agent or if the Auction Agent does
not call such a special meeting, it may be called by any such
holder on like notice. The record date for determining the
registered holders entitled to notice of and to vote at such
special meeting shall be the close of business on the fifth
Business Day preceding the day on which such notice is mailed
or on such other date as the Trust and the Auction Agent may
agree. At any such special meeting and at each meeting of
holders of preferred shares, including Preferred Shares, held
during a Voting Period at which Trustees are to be elected,
such holders, voting together as a class (to the exclusion of
the holders of all other securities and classes of shares of
the Trust), shall be entitled to elect the number of Trustees
prescribed in subparagraph (b)(i) of this Section 5 on a
one-vote-per-share basis.
(iii) TERMS OF OFFICE OF EXISTING TRUSTEES. The terms of
office of all persons who are Trustees of the Trust at the
time of a special meeting of Holders and holders of other
shares of preferred shares of the Trust to elect Trustees
shall continue, notwithstanding the election at such meeting
by the Holders and such other holders of the number of
Trustees that they are entitled to elect, and the persons so
elected by the Holders and such other holders, together with
the two incumbent Trustees elected by the Holders and such
other holders of
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preferred shares of the Trust and the remaining incumbent
Trustees elected by the holders of the Common Shares and
preferred shares, including Preferred Shares, shall constitute
the duly elected Trustees of the Trust.
(iv) TERMS OF OFFICE OF CERTAIN TRUSTEES TO TERMINATE UPON
TERMINATION OF VOTING PERIOD. Simultaneously with the
termination of a Voting Period, the terms of office of the
additional Trustees elected by the Holders and holders of
other preferred shares of the Trust pursuant to subparagraph
(b)(i) of this Section 5 shall terminate, the remaining
Trustees shall constitute the Trustees of the Trust and the
voting rights of the Holders and such other holders to elect
additional Trustees pursuant to subparagraph (b)(i) of this
Section 5 shall cease, subject to the provisions of the last
sentence of subparagraph (b)(i) of this Section 5.
(c) HOLDERS OF PREFERRED SHARES TO VOTE ON CERTAIN OTHER
MATTERS.
(i) INCREASES IN CAPITALIZATION. So long as any Preferred
Shares are outstanding, the Trust shall not, without the
affirmative vote or consent of the Holders of at least a
majority of the Preferred Shares outstanding at the time, in
person or by proxy, either in writing or at a meeting, voting
as a separate class: (a) authorize, create or issue any class
or series of shares ranking prior to or on a parity with
Preferred Shares with respect to the payment of distributions
or the distribution of assets upon dissolution, liquidation or
winding up of the affairs of the Trust, or authorize, create
or issue additional shares of any series of Preferred Shares
(except that, notwithstanding the foregoing, but subject to
the provisions of paragraph (c) of Section 13 of this Part I,
the Board of Trustees, without the vote or consent of the
Holders of Preferred Shares, may from time to time authorize
and create, and the Trust may from time to time issue
additional shares of Preferred Shares, or classes or series of
preferred shares ranking on a parity with Preferred Shares
with respect to the payment of distributions and the
distribution of assets upon dissolution, liquidation or
winding up of the affairs of the Trust; PROVIDED, HOWEVER,
that if Xxxxx'x and Fitch (or other NRSRO) is not then rating
the Preferred Shares, the aggregate liquidation preference of
all Preferred Shares of the Trust outstanding after any such
issuance, exclusive of accumulated and unpaid distributions,
may not exceed $[___]) or (b) amend, alter or repeal the
provisions of the Declaration of Trust, or these Bylaws,
whether by merger, consolidation or otherwise, so as to affect
any preference, right or power of such Preferred Shares or the
Holders thereof; PROVIDED, HOWEVER, that (i) none of the
actions permitted by the exception to (a) above will be deemed
to affect such preferences, rights or powers, (ii) a division
or split of a Preferred Share will be deemed to affect such
preferences, rights or powers only if the terms of such
division adversely affect the Holders of Preferred Shares and
(iii) the authorization, creation and issuance of classes or
series of shares ranking junior to Preferred Shares with
respect to the payment of distributions and the distribution
of assets upon dissolution, liquidation or winding up of the
affairs of the Trust, will be deemed to affect such
preferences, rights or powers only if Xxxxx'x or
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Fitch is then rating Preferred Shares and such issuance would,
at the time thereof, cause the Trust not to satisfy the 1940
Act Preferred Shares Asset Coverage or the Preferred Shares
Basic Maintenance Amount. So long as any Preferred Shares are
outstanding, the Trust shall not, without the affirmative vote
or consent of the Holders of at least a majority of the
Preferred Shares outstanding at the time, in person or by
proxy, either in writing or at a meeting, voting as a separate
class, file a voluntary application for relief under Federal
bankruptcy law or any similar application under state law for
so long as the Trust is solvent and does not foresee becoming
insolvent.
(ii) 1940 ACT MATTERS. Unless a higher percentage is provided
for in the Declaration of Trust, (A) the affirmative vote of
the Holders a "majority of the outstanding" (as such term is
defined in the 1940 Act) preferred shares of the Trust,
including Preferred Shares, voting as a separate class, shall
be required to approve (A) any plan of reorganization (as such
term is used in the 1940 Act) adversely affecting such shares
and (B) any action requiring a vote of security holders of the
Trust under Section 13(a) of the 1940 Act. In the event a vote
of Holders of Preferred Shares is required pursuant to the
provisions of Section 13(a) of the 1940 Act, the Trust shall,
not later than ten Business Days prior to the date on which
such vote is to be taken, notify Xxxxx'x (if Xxxxx'x is then
rating the Preferred Shares) and Fitch (if Fitch is then
rating the Preferred Shares) that such vote is to be taken and
the nature of the action with respect to which such vote is to
be taken. The Trust shall, not later than ten Business Days
after the date on which such vote is taken, notify Xxxxx'x (if
Xxxxx'x is then rating the Preferred Shares) and Fitch (if
Fitch is then rating the Preferred Shares) of the results of
such vote.
(d) BOARD MAY TAKE CERTAIN ACTIONS WITHOUT SHAREHOLDER
APPROVAL. The Board of Trustees may, without the vote or consent of the
Holders of the Preferred Shares, or any other shareholder of the Trust,
from time to time amend, alter or repeal any or all of the definitions
of the terms listed below, or any provision of the Bylaws viewed by
Moody's or Fitch as a predicate for any such definition, and any such
amendment, alteration or repeal will not be deemed to affect the
preferences, rights or powers of the Preferred Shares or the Holders
thereof, provided the Board of Trustees receives confirmation from
Xxxxx'x (if Xxxxx'x is then rating the Preferred Shares) and Fitch (if
Fitch is then rating the Preferred Shares), that any such amendment,
alteration or repeal would not impair the ratings then assigned to the
Preferred Shares by Xxxxx'x (if Xxxxx'x is then rating the Preferred
Shares) or Fitch (if Fitch is then rating the Preferred Shares):
Auditor's Confirmation Xxxxx'x Eligible Assets
Annual Valuation Date Xxxxx'x Hedging Transactions
Closing Transaction Moody's Real Estate Industry/Property Sector
Classification
Deposit Securities 1940 Act Cure Date
Discounted Value 1940 Act Preferred Shares Asset Coverage
Exposure Period Other Real Estate Company
Fitch Discount Factor Preferred Shares Basic Maintenance Amount
Fitch Eligible Assets Preferred Shares Basic Maintenance Cure Date
Fitch Hedging Transactions Preferred Shares Basic Maintenance Report
Forward Commitments Quarterly Valuation Date
Hedging Transactions Real Estate Index
Independent Accountant REIT
Market Value Treasury Futures
Xxxxx'x Discount Factor Valuation Date
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In addition, subject to compliance with applicable law, the
Board of Trustees may amend the definition of Maximum Rate to increase
the percentage amount by which the Reference Rate is multiplied to
determine the Maximum Rate shown therein without the vote or consent of
the holders of preferred shares, including Preferred Shares, or any
other shareholder of the Trust, and without receiving any confirmation
from any rating agency, after consultation with the Broker-Dealers,
provided that immediately following any such increase the Trust would
meet the Preferred Shares Basic Maintenance Amount Test.
(e) RELATIVE RIGHTS AND PREFERENCES. Unless otherwise required
by law or provided elsewhere in the Declaration of Trust, the Holders
of Preferred Shares shall not have any relative rights or preferences
or other special rights other than those specifically set forth herein.
(f) NO PREEMPTIVE RIGHTS OR CUMULATIVE VOTING. The Holders of
Preferred Shares shall have no preemptive rights or rights to
cumulative voting.
(g) VOTING FOR TRUSTEES SOLE REMEDY FOR TRUST'S FAILURE TO PAY
DISTRIBUTIONS. In the event that the Trust fails to pay any
distributions on the Preferred Shares, the exclusive remedy of the
Holders shall be the right to vote for Trustees pursuant to the
provisions of this Section 5.
(h) HOLDERS ENTITLED TO VOTE. For purposes of determining any
rights of the Holders to vote on any matter, whether such right is
created by these Bylaws, by the Declaration of Trust, by statute or
otherwise, no Holder shall be entitled to vote Preferred Shares and no
Preferred Shares shall be deemed to be "outstanding" for the purpose of
voting or determining the number of shares required to constitute a
quorum if, prior to or concurrently with the time of determination of
shares entitled to vote or shares deemed outstanding for quorum
purposes, as the case may be, the requisite Notice of Redemption with
respect to such shares shall have been mailed as provided in paragraph
(c) of Section 11 of this Part I and the Redemption Price for the
redemption of such shares shall have been deposited in trust with the
Auction Agent for that purpose. No Preferred Shares held by the Trust
or any affiliate of the Trust (except for shares held by a
Broker-Dealer that is an affiliate of the Trust for the account of its
customers) shall have any voting rights or be deemed to be outstanding
for voting or other purposes.
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6. 1940 ACT PREFERRED SHARES ASSET COVERAGE. THE TRUST SHALL MAINTAIN,
AS OF THE LAST BUSINESS DAY OF EACH MONTH IN WHICH ANY SHARE OF A SERIES OF
PREFERRED SHARES IS OUTSTANDING, THE 1940 ACT PREFERRED SHARES ASSET COVERAGE;
PROVIDED, HOWEVER, THAT THE REDEMPTION PURSUANT TO SECTION 11(B) OF THIS PART I
SHALL BE THE SOLE REMEDY IN THE EVENT THE TRUST FAILS TO DO SO.
7. PREFERRED SHARES BASIC MAINTENANCE AMOUNT.
(a) So long as Preferred Shares are outstanding, the Trust
shall maintain, on each Valuation Date, and shall verify to its
satisfaction that it is maintaining on such Valuation Date, (i) Fitch
Eligible Assets having an aggregate Discounted Value equal to or
greater than the Preferred Shares Basic Maintenance Amount (if Fitch is
then rating the Preferred Shares) and (ii) Xxxxx'x Eligible Assets
having an aggregate Discounted Value equal to or greater than the
Preferred Shares Basic Maintenance Amount (if Xxxxx'x is then rating
the Preferred Shares); PROVIDED, HOWEVER, that the redemption pursuant
to Section 11(b) of this Part I shall be the sole remedy in the event
the Trust fails to do so.
(b) On or before 5:00 P.M., Eastern time, on the third
Business Day after a Valuation Date on which the Trust fails to satisfy
the Preferred Shares Basic Maintenance Amount, and on the third
Business Day after the Preferred Shares Basic Maintenance Cure Date
with respect to such Valuation Date, the Trust shall complete and
deliver to Fitch (if Fitch is then rating the Preferred Shares) and
Xxxxx'x (if Xxxxx'x is then rating the Preferred Shares) a Preferred
Shares Basic Maintenance Report as of the date of such failure or such
Preferred Shares Basic Maintenance Cure Date, as the case may be. The
Trust shall also deliver a Preferred Shares Basic Maintenance Report to
Xxxxx'x (if Xxxxx'x is then rating the Preferred Shares) and Fitch (if
Fitch is then rating the Preferred Shares), in each case on or before
the seventh Business Day after the last Business Day of each month. A
failure by the Trust to deliver a Preferred Shares Basic Maintenance
Report pursuant to the preceding sentence shall be deemed to be
delivery of a Preferred Shares Basic Maintenance Report indicating the
Discounted Value for all assets of the Trust is less than the Preferred
Shares Basic Maintenance Amount, as of the relevant Valuation Date.
(c) Within ten Business Days after the date of delivery of a
Preferred Shares Basic Maintenance Report in accordance with paragraph
(b) of this Section 7 relating to a Quarterly Valuation Date that is
also an Annual Valuation Date, the Trust shall cause the Independent
Accountant to confirm in writing to Fitch (if Fitch is then rating the
Preferred Shares) and Xxxxx'x (if Xxxxx'x is then rating the Preferred
Shares) (i) the mathematical accuracy of the calculations reflected in
such Report (and in any other Preferred Shares Basic Maintenance
Report, randomly selected by the Independent Accountant, that was
delivered by the Trust during the quarter ending on such Annual
Valuation Date), (ii) that, in such Report (and in such randomly
selected Report), the Trust correctly determined in accordance with
these Bylaws whether the Trust had, at such Annual Valuation Date (and
at the Valuation Date addressed in such randomly-selected Report),
Fitch Eligible Assets (if Fitch is then rating the Preferred Shares) of
an aggregate Discounted Value at least equal to the Preferred Shares
Basic Maintenance Amount and Xxxxx'x Eligible Assets (if Xxxxx'x is
then rating the Preferred Shares) of
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an aggregate Discounted Value at least equal to the Preferred Shares
Basic Maintenance Amount, (iii) that, in such Report (and in such
randomly selected Report), the Trust determined whether the Trust had,
at such Annual Valuation Date (and at the Valuation Date addressed in
such randomly selected Report) in accordance with these Bylaws, with
respect to the Fitch ratings on Real Estate Securities, the issuer name
and issue size and coupon rate listed in such Report, verified by the
Independent Accountant by reference to Bloomberg Financial Services or
another independent source approved by Xxxxx'x (if Xxxxx'x is then
rating the Preferred Shares) and Fitch (if Fitch is then rating the
Preferred Shares) and the Independent Accountant shall provide a
listing in its letter of any differences, (iv) with respect to the
Moody's ratings on Real Estate Securities, the issuer name, issue size
and coupon rate listed in such Report, that such information has been
verified by the Independent Accountant by reference to Bloomberg
Financial Services or another independent source approved by Xxxxx'x
(if Xxxxx'x is then rating the Preferred Shares) and Fitch (if Fitch is
then rating the Preferred Shares) and the Independent Accountant shall
provide a listing in its letter of any differences, (v) with respect to
the bid or mean price (or such alternative permissible factor used in
calculating the Market Value) provided by the custodian of the Trust's
assets to the Trust for purposes of valuing securities in the Trust's
portfolio, that the Independent Accountant has traced the price used in
such Report to the bid or mean price listed in such Report as provided
to the Trust and verified that such information agrees (in the event
such information does not agree, the Independent Accountant will
provide a listing in its letter of such differences) and (vi) with
respect to such confirmation to Xxxxx'x (if Xxxxx'x is then rating the
Preferred Shares) and Fitch (if Fitch is then rating the Preferred
Shares), that the Trust has satisfied the requirements of Section 13 of
this Part I with respect to portfolio holdings as of the date of such
Report (such confirmation is herein called the "Auditor's
Confirmation"); PROVIDED, HOWEVER, that the Independent Accountant may
base the conclusions related to (ii) through (vi) above on a sample of
at least 25 securities (or such other number of securities as the
Independent Accountant and Xxxxx'x (if Xxxxx'x is then rating the
Preferred Shares) and Fitch (if Fitch is then rating the Preferred
Shares) may agree from time to time).
(d) Within ten Business Days after the date of delivery of a
Preferred Shares Basic Maintenance Report in accordance with paragraph
(b) of this Section 7 relating to any Valuation Date on which the Trust
failed to satisfy the Preferred Shares Basic Maintenance Amount, and
relating to the Preferred Shares Basic Maintenance Cure Date with
respect to such failure to satisfy the Preferred Shares Basic
Maintenance Amount, the Trust shall cause the Independent Accountant to
provide to Fitch (if Fitch is then rating the Preferred Shares) and
Xxxxx'x (if Xxxxx'x is then rating the Preferred Shares) an Auditor's
Confirmation as to such Preferred Shares Basic Maintenance Report.
(e) If any Auditor's Confirmation delivered pursuant to
paragraph (c) or (d) of this Section 7 shows that an error was made in
the Preferred Shares Basic Maintenance Report for a particular
Valuation Date for which such Auditor's Confirmation was required to be
delivered, or shows that a lower aggregate Discounted Value for the
aggregate of all Fitch Eligible Assets (if Fitch is then rating the
Preferred Shares) or Xxxxx'x Eligible Assets (if Xxxxx'x is then rating
the Preferred Shares), as the case may be, of the Trust was determined
by the Independent Accountant, then in the absence of
-40-
manifest error the calculation or determination made by such
Independent Accountant shall be final and conclusive and shall be
binding on the Trust, and the Trust shall accordingly amend and deliver
the Preferred Shares Basic Maintenance Report to Fitch (if Fitch is
then rating the Preferred Shares) and Xxxxx'x (if Xxxxx'x is then
rating the Preferred Shares) promptly following receipt by the Trust of
such Auditor's Confirmation.
(f) On or before 5:00 p.m., Eastern time, on the first
Business Day after the Date of Original Issue of any Preferred Shares,
the Trust shall complete and deliver to Fitch (if Fitch is then rating
the Preferred Shares) and Xxxxx'x (if Xxxxx'x is then rating the
Preferred Shares) a Preferred Shares Basic Maintenance Report as of the
close of business on such Date of Original Issue.
(g) On or before 5:00 p.m., Eastern time, on the seventh
Business Day after either (i) the Trust shall have redeemed Common
Shares or (ii) the ratio of the Discounted Value of Fitch Eligible
Assets or the Discounted Value of Xxxxx'x Eligible Assets to the
Preferred Shares Basic Maintenance Amount on any valuation date is less
than or equal to 105% or (iii) whenever requested by Xxxxx'x or Fitch,
the Trust shall complete and deliver to Fitch (if Fitch is then rating
the Preferred Shares) or Xxxxx'x (if Xxxxx'x is then rating the
Preferred Shares), as the case may be, a Preferred Shares Basic
Maintenance Report as of the date of such request.
8. RESERVED.
9. RESTRICTIONS ON DISTRIBUTIONS AND OTHER DISTRIBUTIONS.
(a) DISTRIBUTIONS ON SHARES OTHER THAN PREFERRED SHARES.
Except as set forth in the next sentence, no distributions shall be
declared or paid or set apart for payment on the shares of any class or
series of shares of the Trust ranking, as to the payment of
distributions, on a parity with Preferred Shares for any period unless
full cumulative distributions have been or contemporaneously are
declared and paid on the Preferred Shares through its most recent
Distribution Payment Date. When distributions are not paid in full upon
the Preferred Shares through its most recent Distribution Payment Date
or upon the shares of any other class or series of shares of the Trust
ranking on a parity as to the payment of distributions with Preferred
Shares through their most recent respective distribution payment dates,
all distributions declared upon Preferred Shares and any other such
class or series of shares ranking on a parity as to the payment of
distributions with Preferred Shares shall be declared pro rata so that
the amount of distributions declared per share on Preferred Shares and
such other class or series of shares shall in all cases bear to each
other the same ratio that accumulated distributions per share on the
Preferred Shares and such other class or series of shares bear to each
other (for purposes of this sentence, the amount of distributions
declared per share of Preferred Shares shall be based on the Applicable
Rate for such share for the Distribution Periods during which
distributions were not paid in full).
(b) DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO COMMON
SHARES UNDER THE 1940 ACT. The Board of Trustees shall not declare
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any dividend (except a dividend payable in Common Shares), or declare
any other distribution, upon the Common Shares, or purchase Common
Shares, unless in every such case the Preferred Shares have, at the
time of any such declaration or purchase, an asset coverage (as defined
in and determined pursuant to the 0000 Xxx) of at least 200% (or such
other asset coverage as may in the future be specified in or under the
1940 Act as the minimum asset coverage for senior securities which are
shares or stock of a closed-end investment company as a condition of
declaring dividends on its common shares or stock) after deducting the
amount of such dividend, distribution or purchase price, as the case
may be.
(c) OTHER RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS.
For so long as any Preferred Shares are outstanding, and except as set
forth in paragraph (a) of this Section 9 and paragraph (c) of Section
12 of this Part I, (A) the Trust shall not declare, pay or set apart
for payment any dividend or other distribution (other than a dividend
or distribution paid in shares of, or in options, warrants or rights to
subscribe for or purchase, Common Shares or other shares, if any,
ranking junior to the Preferred Shares as to the payment of dividends
and the distribution of assets upon dissolution, liquidation or winding
up) in respect of the Common Shares or any other shares of the Trust
ranking junior to or on a parity with the Preferred Shares as to the
payment of dividends or other distributions. including the distribution
of assets upon dissolution, liquidation or winding up, or call for
redemption, redeem, purchase or otherwise acquire for consideration any
Common Shares or any other such junior shares (except by conversion
into or exchange for shares of the Trust ranking junior to the
Preferred Shares as to the payment of dividends and other
distributions, including the distribution of assets upon dissolution,
liquidation or winding up), or any such parity shares (except by
conversion into or exchange for shares of the Trust ranking junior to
or on a parity with Preferred Shares as to the payment of dividends and
other distributions, including the distribution of assets upon
dissolution, liquidation or winding up), unless (i) full cumulative
distributions on Preferred Shares through its most recently ended
Distribution Period shall have been paid or shall have been declared
and sufficient funds for the payment thereof are reasonably expected by
the Trust to be available for payment on the date payment is due to the
Auction Agent and (ii) the Trust has redeemed the full number of
Preferred Shares required to be redeemed by any provision for mandatory
redemption pertaining thereto, and (B) the Trust shall not declare, pay
or set apart for payment any dividend or other distribution (other than
a dividend or distribution paid in shares of, or in options, warrants
or rights to subscribe for or purchase, Common Shares or other shares,
if any, ranking junior to Preferred Shares as to the payment of
dividends and other distributions, including the distribution of assets
upon dissolution, liquidation or winding up) in respect of Common
Shares or any other shares of the Trust ranking junior to Preferred
Shares as to the payment of dividends or other distributions, including
the distribution of assets upon dissolution, liquidation or winding up,
or call for redemption, redeem, purchase or otherwise acquire for
consideration any Common Shares or any other such junior shares (except
by conversion into or exchange for shares of the Trust ranking junior
to Preferred Shares as to the payment of dividends and other
distributions, including the distribution of assets upon dissolution,
liquidation or winding up), unless immediately after such transaction
the Discounted Value of Xxxxx'x Eligible Assets (if Xxxxx'x is then
rating the Preferred Shares) and Fitch Eligible Assets (if Fitch is
then
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rating the Preferred Shares) would each at least equal the Preferred
Shares Basic Maintenance Amount.
10. RESERVED.
11. REDEMPTION.
(a) OPTIONAL REDEMPTION.
(i) Subject to the provisions of subparagraph (v) of this
paragraph (a), Preferred Shares may be redeemed, at the option
of the Trust, as a whole or from time to time in part, on the
second Business Day preceding any Distribution Payment Date
for shares of the Series, out of funds legally available
therefor, at a redemption price per share equal to the sum of
$25,000 plus an amount equal to accumulated but unpaid
distributions thereon (whether or not earned or declared) to
(but not including) the date fixed for redemption; PROVIDED,
HOWEVER, that (1) Preferred Shares are redeemable by the Trust
during the Initial Rate Period only on the second Business Day
next preceding the last Distribution Payment Date for such
Initial Rate Period; and (2) subject to subparagraph (ii) of
this paragraph (a), the Notice of Special Rate Period relating
to a Special Rate Period of Preferred Shares, as delivered to
the Auction Agent and filed with the Secretary of the Trust,
may provide that shares of the Series shall not be redeemable
during the whole or any part of such Special Rate Period
(except as provided in subparagraph (iv) of this paragraph
(a)) or shall be redeemable during the whole or any part of
such Special Rate Period only upon payment of such redemption
premium or premiums as shall be specified therein ("Special
Redemption Provisions").
(ii) A Notice of Special Rate Period relating to Preferred
Shares for a Special Rate Period thereof may contain Special
Redemption Provisions only if the Trust's Board of Trustees,
after consultation with the Broker-Dealer or Broker-Dealers
for such Special Rate Period of shares of the Series,
determines that such Special Redemption Provisions are in the
best interest of the Trust.
(iii) If fewer than all of the outstanding Preferred Shares
are to be redeemed pursuant to subparagraph (i) of this
paragraph (a), the number of shares of the Series to be
redeemed shall be determined by the Board of Trustees, and
such shares shall be redeemed pro rata from the Holders of
shares of the Series in proportion to the number of shares of
the Series held by such Holders or by such other method that
the Board of Trustees deems fair and equitable.
(iv) Subject to the provisions of subparagraph (v) of this
paragraph (a), Preferred Shares may be redeemed, at the option
of the Trust, as a whole but not in part, out of funds legally
available therefor, on the first day following any
Distribution Period thereof included in a Rate Period
consisting of more than 364 Rate Period Days if, on the date
of determination of the Applicable Rate for shares of the
Series for such Rate Period, such Applicable Rate equaled or
exceeded on such
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date of determination the Treasury Note Rate for such Rate
Period, at a redemption price per share equal to the sum of
$25,000 plus an amount equal to accumulated but unpaid
distributions thereon (whether or not earned or declared) to
(but not including) the date fixed for redemption.
(v) The Trust may not on any date mail a Notice of Redemption
pursuant to paragraph (c) of this Section 11 in respect of a
redemption contemplated to be effected pursuant to this
paragraph (a) unless on such date (a) the Trust has available
Deposit Securities with maturity or tender dates not later
than the day preceding the applicable redemption date and
having a value not less than the amount (including any
applicable premium) due to Holders of Preferred Shares by
reason of the redemption of such shares on such redemption
date and (b) the Discounted Value of Xxxxx'x Eligible Assets
(if Xxxxx'x is then rating the Preferred Shares) and the
Discounted Value of Fitch Eligible Assets (if Fitch is then
rating the Preferred Shares) each at least equal the Preferred
Shares Basic Maintenance Amount, and would at least equal the
Preferred Shares Basic Maintenance Amount immediately
subsequent to such redemption if such redemption were to occur
on such date. The Trust shall not be required to have
available Deposit Securities as described in clause (a) of
this subparagraph (v) in respect of a redemption of any
Preferred Shares, as a whole or in part, contemplated to be
effected pursuant to paragraph 11(a) where such redemption is
subject to the issuance of shares of any other series of
preferred shares of the Trust. For purposes of determining in
clause (b) of the preceding sentence whether the Discounted
Value of Moody's Eligible Assets and Fitch Eligible Assets
each at least equal the Preferred Shares Basic Maintenance
Amount, the Moody's Discount Factor applicable to Moody's
Eligible Assets and the Fitch Discount Factor applicable to
Fitch Discount Assets shall be determined by reference, if
applicable, to the first Exposure Period longer than the
Exposure Period then applicable to the Trust, as described in
the definition of Moody's Discount Factor and Fitch Discount
Factor herein.
(b) MANDATORY REDEMPTION. The Trust shall redeem, at a
redemption price equal to $25,000 per share plus accumulated but unpaid
distributions thereon (whether or not earned or declared) to (but not
including) the date fixed by the Board of Trustees for redemption,
certain of the Preferred Shares, if the Trust fails to have either
Moody's Eligible Assets with a Discounted Value or Fitch Eligible
Assets with a Discounted Value greater than or equal to the Preferred
Shares Basic Maintenance Amount, in accordance with the requirements of
the rating agency or agencies then rating the Preferred Shares, or
fails to maintain the 1940 Act Preferred Shares Asset Coverage and such
failure is not cured on or before the Preferred Shares Basic
Maintenance Cure Date or the 1940 Act Cure Date, as the case may be.
The number of Preferred Shares to be redeemed shall be equal to the
lesser of (i) the minimum number of Preferred Shares, together with all
other preferred shares subject to redemption or retirement, the
redemption of which, if deemed to have occurred immediately prior to
the opening of business on the Cure Date, would have resulted in the
Trust's having both Moody's Eligible Assets with a Discounted Value and
Fitch Eligible Assets with a Discounted Value greater than or equal to
the Preferred Shares Basic Maintenance Amount or
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maintaining the 1940 Act Preferred Shares Asset Coverage, as the case
may be, on such Cure Date (PROVIDED, HOWEVER, that if there is no such
minimum number of Preferred Shares and other preferred shares the
redemption or retirement of which would have had such result, all
Preferred Shares and other preferred shares then outstanding shall be
redeemed), and (ii) the maximum number of Preferred Shares, together
with all other preferred shares subject to redemption or retirement,
that can be redeemed out of funds expected to be legally available
therefor in accordance with the Declaration of Trust and applicable
law. In determining the Preferred Shares required to be redeemed in
accordance with the foregoing, the Trust shall allocate the number
required to be redeemed to satisfy the Preferred Shares Basic
Maintenance Amount or the 1940 Act Preferred Shares Asset Coverage, as
the case may be, pro rata among Preferred Shares and other preferred
shares (and, then, pro rata among the Preferred Shares) subject to
redemption or retirement. The Trust shall effect such redemption on the
date fixed by the Trust therefor, which date shall not be earlier than
20 days (or such lesser number of days as determined by the Trust with
appropriate consultation with the Auction Agent and Broker-Dealers) nor
later than 40 days after such Cure Date, except that if the Trust does
not have funds legally available for the redemption of all of the
required number of Preferred Shares and other preferred shares that are
subject to redemption or retirement or the Trust otherwise is unable to
effect such redemption on or prior to 40 days after such Cure Date, the
Trust shall redeem those Preferred Shares and other preferred shares
which it was unable to redeem on the earliest practicable date on which
it is able to effect such redemption. If fewer than all of the
outstanding shares Preferred Shares are to be redeemed pursuant to this
paragraph (b), the number of Preferred Shares to be redeemed shall be
redeemed pro rata from the Holders of Preferred Shares in proportion to
the number of Preferred Shares held by such Holders or by such other
method that the Board of Trustees deems fair and equitable.
(c) NOTICE OF REDEMPTION. If the Trust shall determine or be
required to redeem Preferred Shares pursuant to paragraph (a) or (b) of
this Section 11, it shall mail a Notice of Redemption with respect to
such redemption by first class mail, postage prepaid, to each Holder of
the Preferred Shares to be redeemed, at such Holder's address as the
same appears on the record books of the Trust on the record date
established by the Board of Trustees. Such Notice of Redemption shall
be so mailed not less than 20 (or such lesser number of days as
determined by the Trust with appropriate consultation with the Auction
Agent and Broker-Dealers) nor more than 45 days prior to the date fixed
for redemption. Each such Notice of Redemption shall state: (i) the
redemption date; (ii) the number of Preferred Shares to be redeemed;
(iii) the CUSIP number for the shares of the Series; (iv) the
Redemption Price; (v) the place or places where the certificate(s) for
such shares (properly endorsed or assigned for transfer, if the Board
of Trustees shall so require and the Notice of Redemption shall so
state) are to be surrendered for payment of the Redemption Price; (vi)
that distributions on the shares to be redeemed will cease to
accumulate on such redemption date; and (vii) the provisions of this
Section 11 under which such redemption is made. If fewer than all
Preferred Shares held by any Holder are to be redeemed, the Notice of
Redemption mailed to such Holder shall also specify the number of
shares of the Series to be redeemed from such Holder. The Trust may
provide in any Notice of Redemption relating to a redemption
contemplated to be effected pursuant to paragraph (a) of this Section
11 that such redemption is subject to
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one or more conditions precedent and that the Trust shall not be
required to effect such redemption unless each such condition shall
have been satisfied at the time or times and in the manner specified in
such Notice of Redemption.
(d) NO REDEMPTION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding
the provisions of paragraphs (a) or (b) of this Section 11, if any
distributions on Preferred Shares (whether or not earned or declared)
are in arrears, no Preferred Shares shall be redeemed unless all
outstanding shares of the Series are simultaneously redeemed, and the
Trust shall not purchase or otherwise acquire any shares of the Series;
PROVIDED, HOWEVER, that the foregoing shall not prevent the purchase or
acquisition of all outstanding shares of the Series pursuant to the
successful completion of an otherwise lawful purchase or exchange offer
made on the same terms to, and accepted by, Holders of all outstanding
shares of the Series.
(e) ABSENCE OF FUNDS AVAILABLE FOR REDEMPTION. To the extent
that any redemption for which Notice of Redemption has been mailed is
not made by reason of the absence of legally available funds therefor
in accordance with the Declaration of Trust and applicable law, such
redemption shall be made as soon as practicable to the extent such
funds become available. Failure to redeem Preferred Shares shall be
deemed to exist at any time after the date specified for redemption in
a Notice of Redemption when the Trust shall have failed, for any reason
whatsoever, to deposit in trust with the Auction Agent the Redemption
Price with respect to any shares for which such Notice of Redemption
has been mailed; PROVIDED, HOWEVER, that the foregoing shall not apply
in the case of the Trust's failure to deposit in trust with the Auction
Agent the Redemption Price with respect to any shares where (1) the
Notice of Redemption relating to such redemption provided that such
redemption was subject to one or more conditions precedent and (2) any
such condition precedent shall not have been satisfied at the time or
times and in the manner specified in such Notice of Redemption.
Notwithstanding the fact that the Trust may not have redeemed Preferred
Shares for which a Notice of Redemption has been mailed, distributions
may be declared and paid on Preferred Shares and shall include those
Preferred Shares for which a Notice of Redemption has been mailed.
(f) AUCTION AGENT AS TRUSTEE OF REDEMPTION PAYMENTS BY TRUST.
All moneys paid to the Auction Agent for payment of the Redemption
Price of Preferred Shares called for redemption shall be held in trust
by the Auction Agent for the benefit of Holders of shares so to be
redeemed.
(g) SHARES FOR WHICH NOTICE OF REDEMPTION HAS BEEN GIVEN ARE
NO LONGER OUTSTANDING. Provided a Notice of Redemption has been mailed
pursuant to paragraph (c) of this Section 11, upon the deposit with the
Auction Agent (on the Business Day fixed for redemption thereby, in
funds available on that Business Day in The City of New York, New York)
of funds sufficient to redeem the Preferred Shares that are the subject
of such notice, distributions on such shares shall cease to accumulate
and such shares shall no longer be deemed to be outstanding for any
purpose, and all rights of the Holders of the shares so called for
redemption shall cease and terminate, except the right of such Holders
to receive the Redemption Price, but without any interest
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or other additional amount, except as provided in subparagraph (e)(i)
of Section 2 of this Part I and in Section 3 of this Part I. Upon
surrender in accordance with the Notice of Redemption of the
certificates, if any, for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Trustees shall so require and
the Notice of Redemption shall so state), the Redemption Price shall be
paid by the Auction Agent to the Holders of Preferred Shares subject to
redemption. In the case that fewer than all of the shares represented
by any such certificate are redeemed, a new certificate shall be
issued, representing the unredeemed shares, without cost to the Holder
thereof. The Trust shall be entitled to receive from the Auction Agent,
promptly after the date fixed for redemption, any cash deposited with
the Auction Agent in excess of (i) the aggregate Redemption Price of
the Preferred Shares called for redemption on such date and (ii) all
other amounts to which Holders of Preferred Shares called for
redemption may be entitled. Any funds so deposited that are unclaimed
at the end of 90 days from such redemption date shall, to the extent
permitted by law, be repaid to the Trust, after which time the Holders
of Preferred Shares so called for redemption may look only to the Trust
for payment of the Redemption Price and all other amounts to which they
may be entitled.
(h) COMPLIANCE WITH APPLICABLE LAW. In effecting any
redemption pursuant to this Section 11, the Trust shall use its best
efforts to comply with all applicable conditions precedent to effecting
such redemption under the 1940 Act and any applicable Massachusetts
law, but shall effect no redemption except in accordance with the 1940
Act and any applicable Massachusetts law.
(i) ONLY WHOLE PREFERRED SHARES MAY BE REDEEMED. In the case
of any redemption pursuant to this Section 11, only whole Preferred
Shares shall be redeemed, and in the event that any provision of the
Declaration of Trust would require redemption of a fractional share,
the Auction Agent shall be authorized to round up so that only whole
shares are redeemed.
(j) MODIFICATION OF REDEMPTION PROCEDURES. Notwithstanding any
of the foregoing provisions of this Section 11, the Trust may modify
any or all of the requirements relating to the Notice of Redemption
provided that (i) any such modification does not materially and
adversely affect any holder of Preferred Shares, and (ii) the Trust
receives notice from Xxxxx'x (if Xxxxx'x is then rating the Preferred
Shares) and Fitch (if Fitch is then rating the Preferred Shares) that
such modification would not impair the ratings assigned by Moody's and
Fitch to the Preferred Shares.
(k) PURCHASE OR OTHER ACQUISITION OF PREFERRED SHARES OUTSIDE
OF AN AUCTION. Except for the provisions described above, nothing
contained in these Bylaws limits any right of the Trust to purchase or
otherwise acquire any Preferred Shares outside of an Auction at any
price, whether higher or lower than the price that would be paid in
connection with an optional or mandatory redemption, so long as, at the
time of any such purchase, there is no arrearage in the payment of
distributions on, or the mandatory or optional redemption price with
respect to, any Preferred Shares for which Notice of Redemption has
been given and the Trust meets the 1940 Act Preferred Shares Asset
Coverage and the Preferred Shares Basic Maintenance Amount
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Test after giving effect to such purchase or acquisition on the date
thereof. Any shares that are purchased, redeemed or otherwise acquired
by the Trust shall have no voting rights. If fewer than all the
Outstanding Preferred Shares are redeemed or otherwise acquired by the
Trust, the Trust shall give notice of such transaction to the Auction
Agent, in accordance with the procedures agreed upon by the Board of
Trustees.
12. LIQUIDATION RIGHTS.
(a) RANKING. The Preferred Shares shall rank on a parity with
each other and with shares of any other series of preferred shares as
to the distribution of assets upon dissolution, liquidation or winding
up of the affairs of the Trust.
(b) DISTRIBUTIONS UPON LIQUIDATION. Upon the dissolution,
liquidation or winding up of the affairs of the Trust, whether
voluntary or involuntary, the Holders of Preferred Shares then
outstanding shall be entitled to receive and to be paid out of the
assets of the Trust available for distribution to its Shareholders,
before any payment or distribution shall be made on the Common Shares
or on any other class of shares of the Trust ranking junior to the
Preferred Shares upon dissolution, liquidation or winding up, an amount
equal to the Liquidation Preference with respect to such shares plus an
amount equal to all distributions thereon (whether or not earned or
declared but excluding interest thereon) accumulated but unpaid to (but
not including) the date of final distribution in same day funds. After
the payment to the Holders of the Preferred Shares of the full
preferential amounts provided for in this paragraph (b), the Holders of
Preferred Shares as such shall have no right or claim to any of the
remaining assets of the Trust.
(c) PRO RATA DISTRIBUTIONS. In the event the assets of the
Trust available for distribution to the Holders of Preferred Shares
upon any dissolution, liquidation, or winding up of the affairs of the
Trust, whether voluntary or involuntary, shall be insufficient to pay
in full all amounts to which such Holders are entitled pursuant to
paragraph (b) of this Section 12, no such distribution shall be made on
account of any shares of any other class or series of preferred shares
ranking on a parity with the Preferred Shares with respect to the
distribution of assets upon such dissolution, liquidation or winding up
unless proportionate distributive amounts shall be paid on account of
the Preferred Shares, ratably, in proportion to the full distributable
amounts for which holders of all such parity shares are respectively
entitled upon such dissolution, liquidation or winding up.
(d) RIGHTS OF JUNIOR SHARES. Subject to the rights of the
holders of shares of any series or class or classes of shares ranking
on a parity with the Preferred Shares with respect to the distribution
of assets upon dissolution, liquidation or winding up of the affairs of
the Trust, after payment shall have been made in full to the Holders of
the Preferred Shares as provided in paragraph (b) of this Section 12,
but not prior thereto, any other series or class or classes of shares
ranking junior to the Preferred Shares with respect to the distribution
of assets upon dissolution, liquidation or winding up of the affairs of
the Trust shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the Holders of the Preferred
Shares shall not be entitled to share therein.
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(e) CERTAIN EVENTS NOT CONSTITUTING LIQUIDATION. Neither the
sale of all or substantially all the property or business of the Trust,
nor the merger or consolidation of the Trust into or with any
corporation nor the merger or consolidation of any corporation into or
with the Trust shall be a dissolution, liquidation or winding up,
whether voluntary or involuntary, for the purposes of this Section 12.
13. FUTURES AND OPTIONS TRANSACTIONS; FORWARD COMMITMENTS.
(a) If Xxxxx'x is rating any Preferred Shares, then:
(i) For so long as any Preferred Shares are rated by Xxxxx'x,
the Trust will not buy or sell futures contracts, write,
purchase or sell call options on futures contracts or purchase
put options on futures contracts or write call options (except
covered call options) on portfolio securities unless it
receives confirmation from Moody's that engaging in such
transactions would not impair the ratings then assigned to
such Preferred Shares by Moody's, except that the Trust may
purchase or sell exchange-traded futures contracts based on
the NAREIT Index (the "Real Estate Index") or United States
Treasury Bonds, Bills or Notes ("Treasury Futures"), and
purchase, write or sell exchange-traded put options on such
futures contracts and purchase, write or sell exchange-traded
call options on such futures contracts (collectively, "Moody's
Hedging Transactions"), subject to the following limitations:
(A) the Trust will not engage in any Moody's Hedging
Transaction based on the Real Estate Index (other
than transactions which terminate a futures contract
or option held by the Trust by the Trust's taking an
opposite position thereto ("Closing Transactions"))
which would cause the Trust at the time of such
transaction to own or have sold outstanding futures
contracts based on the Real Estate Index exceeding in
number 10% of the average number of daily traded
futures contracts based on the Real Estate Index in
the 30 days preceding the time of effecting such
transaction as reported by The Wall Street Journal;
(B) the Trust will not engage in any Moody's Hedging
Transaction based on Treasury Futures (other than
Closing Transactions) which would cause the Trust at
the time of such transaction to own or have sold (i)
outstanding futures contracts based on Treasury
Futures having an aggregate Market Value exceeding
20% of the aggregate Market Value of Moody's Eligible
Assets owned by the Trust and rated at least Aa by
Moody's (or, if not rated by Moody's, rated AAA by
S&P), or (ii) outstanding futures contracts based on
Treasury Futures having an aggregate Market Value
exceeding 40% of the aggregate Market Value of all
securities of REITs and Other Real Estate Companies
constituting Moody's Eligible Assets owned by the
Trust (other than Moody's Eligible Assets already
subject to a Moody's Hedging Transaction) and rated
Baa or A by Moody's (or, if not rated by Moody's,
rated A or AA by S&P) (for purpose of the foregoing
clauses (I) and (II), the
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Trust shall be deemed to own futures contracts that
underlie any outstanding options written by the
Trust);
(C) the Trust will engage in Closing Transactions to
close out any outstanding futures contract based on
the Real Estate Index if the amount of open interest
in the Real Estate Index as reported by The Wall
Street Journal is less than 100; and
(D) the Trust will not enter into an option on
futures transaction unless, after giving effect
thereto, the Trust would continue to have Moody's
Eligible Assets with an aggregate Discounted Value
equal to or greater than the Preferred Shares Basic
Maintenance Amount.
(ii) For purposes of determining whether the Trust has Moody's
Eligible Assets with an aggregate Discounted Value that equals
or exceeds the Preferred Shares Basic Maintenance Amount, the
Discounted Value of Moody's Eligible Assets which the Trust is
obligated to deliver or receive pursuant to an outstanding
futures contract or option shall be as follows:
(A) assets subject to call options written by the
Trust which are either exchange-traded and "readily
reversible" or which expire within 49 days after the
date as of which such valuation is made shall be
valued at the lesser of: (i) Discounted Value and
(ii) the exercise price of the call option written by
the Trust;
(B) assets subject to call options written by the
Trust not meeting the requirements of clause (A) of
this sentence shall have no value;
(C) assets subject to put options written by the
Trust shall be valued at the lesser of: (i) the
exercise price and (ii) the Discounted Value of the
subject security.
(iii) For purposes of determining whether the Trust has
Moody's Eligible Assets with an aggregate Discounted Value
that equals or exceeds the Preferred Shares Basic Maintenance
Amount, the following amounts shall be subtracted from the
aggregate Discounted Value of the Moody's Eligible Assets held
by the Trust:
(A) 10% of the exercise price of a written call
option;
(B) the exercise price of any written put option;
(C) where the Trust is the seller under a futures
contract, 10% of the settlement price of the futures
contract;
(D) where the Trust is the purchaser under a futures
contract, the settlement price of assets purchased
under such futures contract;
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(E) the settlement price of the underlying futures
contract if the Trust writes put options on a futures
contract and does not own the underlying contract;
and
(F) 105% of the Market Value of the underlying
futures contracts if the Trust writes call options on
a futures contract and does not own the underlying
contract.
(iv) For so long as any Preferred Shares are rated by Moody's,
the Trust will not enter into any contract to purchase
securities for a fixed price at a future date beyond customary
settlement time (other than such contracts that constitute
Moody's Hedging Transactions that are permitted under Section
13(a)(ii) of this Part I), except that the Trust may enter
into such contracts to purchase newly-issued securities on the
date such securities are issued ("Forward Commitments"),
subject to the following limitation:
(A) the Trust will maintain in a segregated account
with its custodian cash, cash equivalents or
short-term, fixed-income securities rated X-0, XXX-0
or MIG-1 by Moody's and maturing prior to the date of
the Forward Commitment with a Market Value that
equals or exceeds the amount of the Trust's
obligations under any Forward Commitments to which it
is from time to time a party or long-term fixed
income securities with a Discounted Value that equals
or exceeds the amount of the Trust's obligations
under any Forward Commitment to which it is from time
to time a party; and
(B) the Trust will not enter into a Forward
Commitment unless, after giving effect thereto, the
Trust would continue to have Moody's Eligible Assets
with an aggregate Discounted Value equal to or
greater than the Preferred Shares Maintenance Amount.
For purposes of determining whether the Trust has
Moody's Eligible Assets with an aggregate Discounted Value
that equals or exceeds the Preferred Shares Basic Maintenance
Amount, the Discounted Value of all Forward Commitments to
which the Trust is a party and of all securities deliverable
to the Trust pursuant to such Forward Commitments shall be
zero.
(b) If Fitch is rating any Preferred Shares, then:
(i) For so long as any Preferred Shares are rated by Fitch,
the Trust will not buy or sell futures contracts, write,
purchase or sell call options on futures contracts or purchase
put options on futures contracts or write call options (except
covered call options) on portfolio securities unless it
receives confirmation from Fitch that engaging in such
transactions would not impair the ratings then assigned to
such Preferred Shares by Fitch, except that the Trust may
purchase or sell exchange-traded futures contracts based on
the Real Estate Index or Treasury Futures, and purchase, write
or sell exchange-traded put options on such futures contracts
and
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purchase, write or sell exchange-traded call options on such
futures contracts (collectively, "Fitch Hedging
Transactions"), subject to the following limitations:
(A) the Trust will not engage in any Fitch Hedging
Transaction based on the Real Estate Index (other
than Closing Transactions) which would cause the
Trust at the time of such transactions to own or have
sold outstanding futures contracts based on the Real
Estate Index exceeding in number 10% of the average
number of daily traded futures contracts based on the
Real Estate Index in the 30 days preceding the time
of effecting such transaction (as reported by The
Wall Street Journal);
(B) the Trust will not engage in any Fitch Hedging
Transaction based on Treasury Futures (other than
Closing Transactions) which would cause the Trust at
the time of such transaction to own or have sold (i)
outstanding futures contracts based on Treasury
Futures having an aggregate Market Value exceeding
20% of the aggregate Market Value of Fitch Eligible
Assets owned by the Trust and rated at least AA by
Fitch (or, if not rated by Fitch, rated at least Aa
by Moody's; or, if not rated by Moody's, rated at
least AA by S&P), or (ii) outstanding futures
contracts based on Treasury Futures having an
aggregate Market Value exceeding 40% of the aggregate
Market Value of all Real Estate Securities
constituting Fitch Eligible Assets owned by the Trust
(other than Fitch Eligible Assets already subject to
a Fitch Hedging Transaction) and rated at least BBB
by Fitch (or, if not rated by Fitch, rated at least
Baa by Moody's, or, if not rated by Moody's, rated at
least A by S&P) (for purposes of the foregoing
clauses (i) and (ii), the Trust shall be deemed to
own futures contracts that underlie any outstanding
options written by the Trust);
(C) the Trust will engage in Closing Transactions to
close any outstanding futures contract based on the
Real Estate Index if the amount of open interest in
the Real Estate Index as reported by The Wall Street
Journal is less than 100; and
(D) the Trust will not enter into an option on future
transaction unless, after giving effect thereto, the
Trust would continue to have Fitch Eligible Assets
with an aggregate Discounted Value equal to or
greater than the Preferred Shares Basic Maintenance
Amount.
(ii) For purposes of determining whether the Trust has Fitch
Eligible Assets with an aggregate Discounted Value that equals
or exceeds the Preferred Shares Basic Maintenance Amount, the
Discounted Value of Fitch Eligible Assets which the Trust is
obligated to deliver or receive pursuant to an outstanding
futures contract or option shall be as follows:
(A) assets subject to call options written by the
Trust which are either exchange-traded and "readily
reversible" or which expire within 49 days after the
date as of which such valuation is made shall be
valued at the lesser of:
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(i) Discounted Value and (ii) the exercise price of
the call option written by the Trust;
(B) assets subject to call options written by the
Trust not meeting the requirements of clause (A) of
this sentence shall have no value;
(C) assets subject to put options written by the
Trust shall be valued at the lesser of: (i) the
exercise price and (ii) the Discounted Value of the
subject security.
(iii) For purposes of determining whether the Trust has Fitch
Eligible Assets with an aggregate Discounted Value that equals
or exceeds the Preferred Shares Basic Maintenance Amount, the
following amounts shall be subtracted from the aggregate
Discounted Value of the Fitch Eligible Assets held by the
Trust:
(A) 10% of the exercise price of a written call
option;
(B) the exercise price of any written put option;
(C) where the Trust is the seller under a futures
contract, 10% of the settlement price of the futures
contract;
(D) where the Trust is the purchaser under a futures
contract, the settlement price of assets purchased
under such futures contract;
(E) the settlement price of the underlying futures
contract if the Trust writes put options on a futures
contract and does not own the underlying contract;
and
(F) 105% of the Market Value of the underlying
futures contracts if the Trust writes call options on
a futures contract and does not own the underlying
contract.
(iv) For so long as any Preferred Shares are rated by Fitch,
the Trust will not enter into any contract to purchase
securities for a fixed price at a future date beyond customary
settlement time (other than such contracts that constitute
Fitch Hedging Transactions that are permitted under Section
13(b)(ii) of this Part I), except that the Trust may enter
into Forward Commitments, subject to the following limitation:
(A) the Trust will maintain in a segregated account
with its custodian cash, cash equivalents or
short-term, fixed-income securities rated F-1 by
Fitch (or, if not rated by Fitch, rated X-0, XXX-0 or
MIG-1 by Moody's) and maturing prior to the date of
the Forward Commitment with a Market Value that
equals or exceeds the amount
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of the Trust's obligations under any Forward
Commitments to which it is from time to time a party
or long-term fixed income securities with a
Discounted Value that equals or exceeds the amount of
the Trust's obligations under any Forward Commitment
to which it is from time to time a party; and
(B) the Trust will not enter into a Forward
Commitment unless, after giving effect thereto, the
Trust would continue to have Fitch Eligible Assets
with an aggregate Discounted Value equal to or
greater than the Preferred Shares Maintenance Amount.
For purposes of determining whether the Trust has
Fitch Eligible Assets with an aggregate Discounted Value that
equals or exceeds the Preferred Shares Basic Maintenance
Amount, the Discounted Value of all Forward Commitments to
which the Trust is a party and of all securities deliverable
to the Trust pursuant to such Forward Commitments shall be
zero.
(c) For so long as any Preferred Shares are outstanding and
Moody's or Fitch or both is rating such shares, the Trust will not,
unless it has received confirmation from Moody's or Fitch or both, as
applicable, that any such action would not impair the rating then
assigned by such rating agency to such shares, engage in any one or
more of the following transactions:
(i) purchase or sell futures contracts or options thereon
with respect to portfolio securities or write put or call options on portfolio
securities;
(ii) borrow money, except that the Trust may, without
obtaining the confirmation described above, borrow money for the purpose of
clearing securities transactions if
(A) the Preferred Shares Basic Maintenance Amount
would continue to be satisfied after giving effect to
such borrowing and
(B) such borrowing (i) is privately arranged with a
bank or other person and is evidenced by a promissory
note or other evidence of indebtedness that is not
intended to be publicly distributed or (ii) is for
"temporary purposes," is evidenced by a promissory
note or other evidence of indebtedness and is in an
amount not exceeding 5% of the value of the total
assets of the Trust at the time of the borrowing (for
purposes of the foregoing, "temporary purposes" means
that the borrowing is to be repaid within sixty days
and is not to be extended or renewed);
(iii) except as provided in Section 5 of this Part I, issue
additional Preferred Shares or any class or series of shares ranking prior to or
on a parity with Preferred Shares with respect to the payment of dividends or
other distributions, including the distribution of assets upon dissolution,
liquidation or winding up of the Trust, or reissue any Preferred Shares
previously purchased or redeemed by the Trust;
(iv) engage in any short sales of securities;
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(v) lend securities;
(vi) merge or consolidate into or with any other corporation
or entity;
(vii) for purposes of valuation of Moody's Eligible Assets:
(A) if the Trust writes a call option, the underlying asset will be valued as
follows:(1) if the option is exchange-traded and may be offset readily or if the
option expires before the earliest possible redemption of the Series, at the
lower of the Discounted Value of the underlying security of the option and the
exercise price of the option or (2) otherwise, it has no value; (B) if the Trust
writes a put option, the underlying asset will be valued as follows: the lesser
of (1) exercise price and (2) the Discounted Value of the underlying security;
and (C) call or put option contracts which the Trust buys have no value. For so
long as the Series is rated by Moody's: (A) the Trust will not engage in options
transactions for leveraging or speculative purposes; (B) the Trust will not
write or sell any anticipatory contracts pursuant to which the Trust xxxxxx the
anticipated purchase of an asset prior to completion of such purchase; (C) the
Trust will not enter into an option transaction with respect to portfolio
securities unless, after giving effect thereto, the Trust would continue to have
Eligible Assets with an aggregate Discounted Value equal to or greater than the
Preferred Shares Basic Maintenance Amount; (D) the Trust will not enter into an
option transaction with respect to portfolio securities unless after giving
effect to such transaction the Trust would continue to be in compliance with the
provisions relating to the Preferred Shares Basic Maintenance Amount; (E) for
purposes of the Preferred Shares Basic Maintenance Amount assets in margin
accounts are not Eligible Assets; (F) the Trust will write only exchange-traded
options on exchanges approved by Moody's (if Xxxxx'x is then rating the Series);
(G) where delivery may be made to the Trust with any of a class of securities,
the Trust will assume for purposes of the Preferred Shares Basic Maintenance
Amount that it takes delivery of that security which yields it the least value;
(H) the Trust will not engage in forward contracts; and (I) there will be a
quarterly audit made of the Trust's options transactions by the Trust's
independent auditors to confirm that the Trust is in compliance with these
standards.
(viii) change a pricing service (which has been designated
by management or the Board of Trustees); and
(ix) enter into reverse repurchase agreements.
In the event any Preferred Shares are outstanding and another
nationally-recognized statistical rating organization is rating such
shares in addition to or in lieu of Moody's or Fitch, the Trust shall
comply with any restrictions imposed by such rating agency, which
restrictions may be more restrictive than those imposed by Moody's or
Fitch.
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14. MISCELLANEOUS.
(a) AMENDMENT OF BYLAWS TO ADD ADDITIONAL SERIES. Subject to
the provisions of paragraph (c) of Section 10 of this Part I, the Board
of Trustees may, by resolution duly adopted, without shareholder
approval (except as otherwise provided by these Bylaws or required by
applicable law), approving an annex hereto, (1) reflect any amendments
hereto which the Board of Trustees is entitled to adopt pursuant to the
terms of these Bylaws without shareholder approval or (2) add
additional series of Preferred Shares or additional shares of a series
of Preferred Shares (and terms relating thereto) to the series and
Preferred Shares described herein. Each such additional series and all
such additional shares shall be governed by the terms of these Bylaws.
(b) NO FRACTIONAL SHARES. No fractional Preferred Shares shall
be issued.
(c) STATUS OF PREFERRED SHARES REDEEMED, EXCHANGED OR
OTHERWISE ACQUIRED BY THE TRUST. Preferred Shares that are redeemed,
exchanged or otherwise acquired by the Trust shall return to the status
of authorized and unissued Preferred Shares.
(d) BOARD MAY RESOLVE AMBIGUITIES. To the extent permitted by
applicable law, the Board of Trustees may interpret or adjust the
provisions of these Bylaws to resolve any inconsistency or ambiguity or
to remedy any formal defect, and may amend these Bylaws with respect to
Preferred Shares prior to the issuance of shares of the Series.
(e) HEADINGS NOT DETERMINATIVE. The headings contained in
these Bylaws are for convenience of reference only and shall not affect
the meaning or interpretation of these Bylaws.
(f) NOTICES. All notices or communications, unless otherwise
specified in these Bylaws, shall be sufficiently given if in writing
and delivered in person or by facsimile or mailed by first-class mail,
postage prepaid. Notices delivered pursuant to this Section 14 shall be
deemed given on the earlier of the date received or the date five days
after which such notice is mailed, except as otherwise provided in
these Bylaws or by the Massachusetts Business Corporation Law for
notices of shareholders' meetings.
(g) EXEMPTION FROM OWNERSHIP RESTRICTIONS. Pursuant to Article
V, Sections 2.7(a)-(b) of the Declaration of Trust, for any Person who
holds Preferred Shares, the share ownership restrictions contained in
Article V, Sections 2.1(a)(i)-(ii) of the Declaration of Trust shall be
computed as though all Preferred Shares were not issued and
outstanding.
PART II
1. ORDERS.
(a) Prior to the Submission Deadline on each Auction Date for
Preferred Shares:
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(i) each Beneficial Owner of shares of the Series may submit
to its Broker-Dealer by telephone or otherwise information as
to:
(A) the number of Outstanding shares, if any, of the
Series held by such Beneficial Owner which such
Beneficial Owner desires to continue to hold without
regard to the Applicable Rate for shares of the
Series for the next succeeding Rate Period of the
Series;
(B) the number of Outstanding shares, if any, of the
Series held by such Beneficial Owner which such
Beneficial Owner offers to sell if the Applicable
Rate for shares of the Series for the next succeeding
Rate Period of shares of the Series shall be less
than the rate per annum specified by such Beneficial
Owner; and/or
(C) the number of Outstanding shares, if any, of the
Series held by such Beneficial Owner which such
Beneficial Owner offers to sell without regard to the
Applicable Rate for shares of the Series for the next
succeeding Rate Period of shares of the Series; and
(ii) one or more Broker-Dealers, using lists of Potential
Beneficial Owners, shall in good faith for the purpose of
conducting a competitive Auction in a commercially reasonable
manner, contact Potential Beneficial Owners (by telephone or
otherwise), including Persons that are not Beneficial Owners,
on such lists to determine the number of shares, if any, of
the Series which each such Potential Beneficial Owner offers
to purchase if the Applicable Rate for shares of the Series
for the next succeeding Rate Period of shares of the Series
shall not be less than the rate per annum specified by such
Potential Beneficial Owner.
For the purposes hereof, the communication by a Beneficial
Owner or Potential Beneficial Owner to a Broker-Dealer, or by a
Broker-Dealer to the Auction Agent, of information referred to in
clause (i)(A), (i)(B), (i)(C) or (ii) of this paragraph (a) is
hereinafter referred to as an "Order" and collectively as "Orders" and
each Beneficial Owner and each Potential Beneficial Owner placing an
Order with a Broker-Dealer, and such Broker-Dealer placing an Order
with the Auction Agent, is hereinafter referred to as a "Bidder" and
collectively as "Bidders"; an Order containing the information referred
to in clause (i)(A) of this paragraph (a) is hereinafter referred to as
a "Hold Order" and collectively as "Hold Orders"; an Order containing
the information referred to in clause (i)(B) or (ii) of this paragraph
(a) is hereinafter referred to as a "Bid" and collectively as "Bids";
and an Order containing the information referred to in clause (i)(C) of
this paragraph (a) is hereinafter referred to as a "Sell Order" and
collectively as "Sell Orders."
(b)
(i) A Bid by a Beneficial Owner or an Existing Holder of
Preferred Shares subject to an Auction on any Auction Date
shall constitute an irrevocable offer to sell:
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(A) the number of Outstanding shares of the Series
specified in such Bid if the Applicable Rate for
shares of the Series determined on such Auction Date
shall be less than the rate specified therein;
(B) such number or a lesser number of Outstanding
shares of the Series to be determined as set forth in
clause (iv) of paragraph (a) of Section 4 of this
Part II if the Applicable Rate for shares of the
Series determined on such Auction Date shall be equal
to the rate specified therein; or
(C) the number of Outstanding shares of the Series
specified in such Bid if the rate specified therein
shall be higher than the Maximum Rate for shares of
the Series, or such number or a lesser number of
Outstanding shares of the Series to be determined as
set forth in clause (iii) of paragraph (b) of Section
4 of this Part II if the rate specified therein shall
be higher than the Maximum Rate for shares of the
Series and Sufficient Clearing Bids for shares of the
Series do not exist.
(ii) A Sell Order by a Beneficial Owner or an Existing Holder
of Preferred Shares subject to an Auction on any Auction Date
shall constitute an irrevocable offer to sell:
(A) the number of Outstanding shares of the Series
specified in such Sell Order; or
(B) such number or a lesser number of Outstanding
shares of the Series as set forth in clause (iii) of
paragraph (b) of Section 4 of this Part II if
Sufficient Clearing Bids for shares of the Series do
not exist; PROVIDED, HOWEVER, that a Broker-Dealer
that is an Existing Holder with respect to shares of
a series of Preferred Shares shall not be liable to
any Person for failing to sell such shares pursuant
to a Sell Order described in the proviso to paragraph
(c) of Section 2 of this Part II if (1) such shares
were transferred by the Beneficial Owner thereof
without compliance by such Beneficial Owner or its
transferee Broker-Dealer (or other transferee person,
if permitted by the Trust) with the provisions of
Section 7 of this Part II or (2) such Broker-Dealer
has informed the Auction Agent pursuant to the terms
of its Broker-Dealer Agreement that, according to
such Broker-Dealer's records, such Broker-Dealer
believes it is not the Existing Holder of such
shares.
(iii) A Bid by a Potential Beneficial Holder or a Potential
Holder of Preferred Shares subject to an Auction on any
Auction Date shall constitute an irrevocable offer to
purchase:
(A) the number of Outstanding shares of the Series
specified in such Bid if the Applicable Rate for
shares of the Series determined on such Auction Date
shall be higher than the rate specified therein; or
(B) such number or a lesser number of Outstanding
shares of the Series as set forth in clause (v) of
paragraph (a) of Section 4 of this Part II if the
Applicable
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Rate for shares of the Series determined on such
Auction Date shall be equal to the rate specified
therein.
(c) No Order for any number of Preferred Shares other than
whole shares shall be valid.
2. SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT.
(a) Each Broker-Dealer shall submit in writing to the Auction
Agent prior to the Submission Deadline on each Auction Date all Orders
for Preferred Shares subject to an Auction on such Auction Date
obtained by such Broker-Dealer, designating itself (unless otherwise
permitted by the Trust) as an Existing Holder in respect of shares
subject to Orders submitted or deemed submitted to it by Beneficial
Owners and as a Potential Holder in respect of shares subject to Orders
submitted to it by Potential Beneficial Owners, and shall specify with
respect to each Order for such shares:
(i) the name of the Bidder placing such Order (which shall be
the Broker-Dealer unless otherwise permitted by the Trust);
(ii) the aggregate number of shares of the Series that are the
subject of such Order;
(iii) to the extent that such Bidder is an Existing Holder of
shares of the Series:
(A) the number of shares, if any, of the Series
subject to any Hold Order of such Existing Holder;
(B) the number of shares, if any, of the Series
subject to any Bid of such Existing Holder and the
rate specified in such Bid; and
(C) the number of shares, if any, of the Series
subject to any Sell Order of such Existing Holder;
and
(iv) to the extent such Bidder is a Potential Holder of shares
of the Series, the rate and number of shares of the Series
specified in such Potential Holder's Bid.
(b) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall
round such rate up to the next highest one thousandth (.001) of 1%.
(c) If an Order or Orders covering all of the Outstanding
Preferred Shares held by any Existing Holder is not submitted to the
Auction Agent prior to the Submission Deadline, the Auction Agent shall
deem a Hold Order to have been submitted by or on behalf of such
Existing Holder covering the number of Outstanding shares of the Series
held by such Existing Holder and not subject to Orders submitted to the
Auction Agent; PROVIDED, HOWEVER, that if an Order or Orders covering
all of the Outstanding shares of the Series held by any Existing Holder
is not submitted to the Auction Agent prior to the Submission Deadline
for an Auction relating to a Special Rate Period consisting of more
-59-
than 28 Rate Period Days, the Auction Agent shall deem a Sell Order to
have been submitted by or on behalf of such Existing Holder covering
the number of outstanding shares of the Series held by such Existing
Holder and not subject to Orders submitted to the Auction Agent.
(d) If one or more Orders of an Existing Holder is submitted
to the Auction Agent covering in the aggregate more than the number of
Outstanding Preferred Shares subject to an Auction held by such
Existing Holder, such Orders shall be considered valid in the following
order of priority:
(i) all Hold Orders for shares of the Series shall be
considered valid, but only up to and including in the
aggregate the number of Outstanding shares of the Series held
by such Existing Holder, and if the number of shares of the
Series subject to such Hold Orders exceeds the number of
Outstanding shares of the Series held by such Existing Holder,
the number of shares subject to each such Hold Order shall be
reduced pro rata to cover the number of Outstanding shares of
the Series held by such Existing Holder;
(ii) (A) any Bid for shares of the Series shall be considered
valid up to and including the excess of the number of
Outstanding shares of the Series held by such Existing Holder
over the number of shares of the Series subject to any Hold
Orders referred to in clause (i) above;
(B) subject to subclause (A), if more than one Bid of
an Existing Holder for shares of the Series is
submitted to the Auction Agent with the same rate and
the number of Outstanding shares of the Series
subject to such Bids is greater than such excess,
such Bids shall be considered valid up to and
including the amount of such excess, and the number
of shares of the Series subject to each Bid with the
same rate shall be reduced pro rata to cover the
number of shares of the Series equal to such excess;
(C) subject to subclauses (A) and (B), if more than
one Bid of an Existing Holder for shares of the
Series is submitted to the Auction Agent with
different rates, such Bids shall be considered valid
in the ascending order of their respective rates up
to and including the amount of such excess; and
(D) in any such event, the number, if any, of such
Outstanding shares of the Series subject to any
portion of Bids considered not valid in whole or in
part under this clause (ii) shall be treated as the
subject of a Bid for shares of the Series by or on
behalf of a Potential Holder at the rate therein
specified; and
(iii) all Sell Orders for shares of the Series shall be
considered valid up to and including the excess of the number
of Outstanding shares of the Series held by such Existing
Holder over the sum of shares of the Series subject to valid
Hold Orders referred to in clause (i) above and valid Bids
referred to in clause (ii) above.
-60-
(e) If more than one Bid for one or more Preferred Shares is
submitted to the Auction Agent by or on behalf of any Potential Holder,
each such Bid submitted shall be a separate Bid with the rate and
number of shares therein specified.
(f) Any Order submitted by a Beneficial Owner or a Potential
Beneficial Owner to its Broker-Dealer, or by a Broker-Dealer to the
Auction Agent, prior to the Submission Deadline on any Auction Date,
shall be irrevocable.
3. DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE AND
APPLICABLE RATE.
(a) Not earlier than the Submission Deadline on each Auction
Date for Preferred Shares, the Auction Agent shall assemble all valid
Orders submitted or deemed submitted to it by the Broker-Dealers in
respect of shares of the Series (each such Order as submitted or deemed
submitted by a Broker-Dealer being hereinafter referred to individually
as a "Submitted Hold Order," a "Submitted Bid" or a "Submitted Sell
Order," as the case may be, or as a "Submitted Order" and collectively
as "Submitted Hold Orders," "Submitted Bids" or "Submitted Sell
Orders," as the case may be, or as "Submitted Orders") and shall
determine for the Series:
(i) the excess of the number of Outstanding Preferred Shares
of the Series over the number of Outstanding shares of the
Series subject to Submitted Hold Orders (such excess being
hereinafter referred to as the "Available Preferred Shares" of
the Series);
(ii) from the Submitted Orders for shares of the Series
whether:
(A) the number of Outstanding shares of the Series
subject to Submitted Bids of Potential Holders
specifying one or more rates equal to or lower than
the Maximum Rate for shares of the Series exceeds or
is equal to the sum of:
(B) the number of Outstanding shares of the Series
subject to Submitted Bids of Existing Holders
specifying one or more rates higher than the Maximum
Rate for shares of the Series; and
(C) the number of Outstanding shares of the Series
subject to Submitted Sell Orders (in the event such
excess or such equality exists (other than because
the number of shares of the Series in subclauses (B)
and (C) above is zero because all of the Outstanding
shares of the Series are subject to Submitted Hold
Orders), such Submitted Bids in subclause (A) above
being hereinafter referred to collectively as
"Sufficient Clearing Bids" for shares of the Series);
and
(iii) if Sufficient Clearing Bids for shares of the Series
exist, the lowest rate specified in such Submitted Bids (the
"Winning Bid Rate" for shares of the Series) which if:
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(A) (I) each such Submitted Bid of Existing Holders
specifying such lowest rate and (II) all other such
Submitted Bids of Existing Holders specifying lower
rates were rejected, thus entitling such Existing
Holders to continue to hold the shares of the Series
that are subject to such Submitted Bids; and
(B) (I) each such Submitted Bid of Potential Holders
specifying such lowest rate and (II) all other such
Submitted Bids of Potential Holders specifying lower
rates were accepted;
would result in such Existing Holders described in subclause
(A) above continuing to hold an aggregate number of
Outstanding shares of the Series which, when added to the
number of Outstanding shares of the Series to be purchased by
such Potential Holders described in subclause (B) above, would
equal not less than the Available Preferred Shares of the
Series.
(b) Promptly after the Auction Agent has made the
determinations pursuant to paragraph (a) of this Section 3, the Auction
Agent shall advise the Trust of the Maximum Rate for Preferred Shares
for which an Auction is being held on the Auction Date and, based on
such determination, the Applicable Rate for shares of the Series for
the next succeeding Rate Period thereof as follows:
(i) if Sufficient Clearing Bids for shares of the Series
exist, the Applicable Rate for all shares of the Series for
the next succeeding Rate Period thereof shall be equal to the
Winning Bid Rate for shares of the Series so determined;
(ii) if Sufficient Clearing Bids for shares of the Series do
not exist (other than because all of the Outstanding shares of
the Series are subject to Submitted Hold Orders), the
Applicable Rate for all shares of the Series for the next
succeeding Rate Period thereof shall be equal to the Maximum
Rate for shares of the Series; or
(iii) if all of the Outstanding shares of the Series are
subject to Submitted Hold Orders, the Applicable Rate for all
shares of the Series for the next succeeding Rate Period
thereof shall be the All Hold Rate.
4. ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL ORDERS
AND ALLOCATION OF SHARES. Existing Holders shall continue to hold the Preferred
Shares that are subject to Submitted Hold Orders, and, based on the
determinations made pursuant to paragraph (a) of Section 3 of this Part II, the
Submitted Bids and Submitted Sell Orders shall be accepted or rejected by the
Auction Agent and the Auction Agent shall take such other action as set forth
below:
(a) If Sufficient Clearing Bids for Preferred Shares have been
made, all Submitted Sell Orders with respect to shares of the Series
shall be accepted and, subject to the provisions of paragraphs (d) and
(e) of this Section 4, Submitted Bids with respect to shares of the
Series shall be accepted or rejected as follows in the following order
of priority and all other Submitted Bids with respect to shares of the
Series shall be rejected:
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(i) Existing Holders' Submitted Bids for shares of the Series
specifying any rate that is higher than the Winning Bid Rate
for shares of the Series shall be accepted, thus requiring
each such Existing Holder to sell the Preferred Shares subject
to such Submitted Bids;
(ii) Existing Holders' Submitted Bids for shares of the Series
specifying any rate that is lower than the Winning Bid Rate
for shares of the Series shall be rejected, thus entitling
each such Existing Holder to continue to hold the Preferred
Shares subject to such Submitted Bids;
(iii) Potential Holders' Submitted Bids for shares of the
Series specifying any rate that is lower than the Winning Bid
Rate for shares of the Series shall be accepted;
(iv) each Existing Holder's Submitted Bid for shares of the
Series specifying a rate that is equal to the Winning Bid Rate
for shares of the Series shall be rejected, thus entitling
such Existing Holder to continue to hold the Preferred Shares
subject to such Submitted Bid, unless the number of
Outstanding Preferred Shares subject to all such Submitted
Bids shall be greater than the number of Preferred Shares
("remaining shares") in the excess of the Available Preferred
Shares of the Series over the number of Preferred Shares
subject to Submitted Bids described in clauses (ii) and (iii)
of this paragraph (a), in which event such Submitted Bid of
such Existing Holder shall be rejected in part, and such
Existing Holder shall be entitled to continue to hold
Preferred Shares subject to such Submitted Bid, but only in an
amount equal to the number of Preferred Shares of the Series
obtained by multiplying the number of remaining shares by a
fraction, the numerator of which shall be the number of
Outstanding Preferred Shares held by such Existing Holder
subject to such Submitted Bid and the denominator of which
shall be the aggregate number of Outstanding Preferred Shares
subject to such Submitted Bids made by all such Existing
Holders that specified a rate equal to the Winning Bid Rate
for shares of the Series; and
(v) each Potential Holder's Submitted Bid for shares of the
Series specifying a rate that is equal to the Winning Bid Rate
for shares of the Series shall be accepted but only in an
amount equal to the number of shares of the Series obtained by
multiplying the number of shares in the excess of the
Available Preferred Shares of the Series over the number of
Preferred Shares subject to Submitted Bids described in
clauses (ii) through (iv) of this paragraph (a) by a fraction,
the numerator of which shall be the number of Outstanding
Preferred Shares subject to such Submitted Bid and the
denominator of which shall be the aggregate number of
Outstanding Preferred Shares subject to such Submitted Bids
made by all such Potential Holders that specified a rate equal
to the Winning Bid Rate for shares of the Series.
(b) If Sufficient Clearing Bids for shares of a series of
Preferred Shares have not been made (other than because all of the
Outstanding shares of the Series are subject to Submitted Hold Orders),
subject to the provisions of paragraph (d) of this Section 4,
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Submitted Orders for shares of the Series shall be accepted or rejected
as follows in the following order of priority and all other Submitted
Bids for shares of the Series shall be rejected:
(i) Existing Holders' Submitted Bids for shares of the Series
specifying any rate that is equal to or lower than the Maximum
Rate for shares of the Series shall be rejected, thus
entitling such Existing Holders to continue to hold the
Preferred Shares subject to such Submitted Bids;
(ii) Potential Holders' Submitted Bids for shares of the
Series specifying any rate that is equal to or lower than the
Maximum Rate for shares of the Series shall be accepted; and
(iii) Each Existing Holder's Submitted Bid for shares of the
Series specifying any rate that is higher than the Maximum
Rate for shares of the Series and the Submitted Sell Orders
for shares of the Series of each Existing Holder shall be
accepted, thus entitling each Existing Holder that submitted
or on whose behalf was submitted any such Submitted Bid or
Submitted Sell Order to sell the shares of the Series subject
to such Submitted Bid or Submitted Sell Order, but in both
cases only in an amount equal to the number of shares of the
Series obtained by multiplying the number of shares of the
Series subject to Submitted Bids described in clause (ii) of
this paragraph (b) by a fraction, the numerator of which shall
be the number of Outstanding shares of the Series held by such
Existing Holder subject to such Submitted Bid or Submitted
Sell Order and the denominator of which shall be the aggregate
number of Outstanding shares of the Series subject to all such
Submitted Bids and Submitted Sell Orders.
(c) If all of the Outstanding Preferred Shares are subject to
Submitted Hold Orders, all Submitted Bids for shares of the Series
shall be rejected.
(d) If, as a result of the procedures described in clause (iv)
or (v) of paragraph (a) or clause (iii) of paragraph (b) of this
Section 4, any Existing Holder would be entitled or required to sell,
or any Potential Holder would be entitled or required to purchase, a
fraction of a Preferred Share on any Auction Date, the Auction Agent
shall, in such manner as it shall determine in its sole discretion,
round up or down the number of Preferred Shares of the Series to be
purchased or sold by any Existing Holder or Potential Holder on such
Auction Date as a result of such procedures so that the number of
shares so purchased or sold by each Existing Holder or Potential Holder
on such Auction Date shall be whole Preferred Shares.
(e) If, as a result of the procedures described in clause (v)
of paragraph (a) of this Section 4, any Potential Holder would be
entitled or required to purchase less than a whole share of a series of
Preferred Shares on any Auction Date, the Auction Agent shall, in such
manner as it shall determine in its sole discretion, allocate Preferred
Shares of the Series for purchase among Potential Holders so that only
whole Preferred Shares of the Series are purchased on such Auction Date
as a result of such procedures by any Potential
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Holder, even if such allocation results in one or more Potential
Holders not purchasing Preferred Shares of the Series on such Auction
Date.
(f) Based on the results of each Auction for Preferred Shares,
the Auction Agent shall determine the aggregate number of shares of the
Series to be purchased and the aggregate number of shares of the Series
to be sold by Potential Holders and Existing Holders and, with respect
to each Potential Holder and Existing Holder, to the extent that such
aggregate number of shares to be purchased and such aggregate number of
shares to be sold differ, determine to which other Potential Holder(s)
or Existing Holder(s) they shall deliver, or from which other Potential
Holder(s) or Existing Holder(s) they shall receive, as the case may be,
Preferred Shares of the Series.
Notwithstanding any provision of the Auction Procedures or the
Settlement Procedures to the contrary, in the event an Existing Holder
or Beneficial Owner of Preferred Shares with respect to whom a
Broker-Dealer submitted a Bid to the Auction Agent for such shares that
was accepted in whole or in part, or submitted or is deemed to have
submitted a Sell Order for such shares that was accepted in whole or in
part, fails to instruct its Agent Member to deliver such shares against
payment therefor, partial deliveries of Preferred Shares that have been
made in respect of Potential Holders' or Potential Beneficial Owners'
Submitted Bids for shares of the Series that have been accepted in
whole or in part shall constitute good delivery to such Potential
Holders and Potential Beneficial Owners.
(g) Neither the Trust nor the Auction Agent nor any affiliate
of either shall have any responsibility or liability with respect to
the failure of an Existing Holder, a Potential Holder, a Beneficial
Owner, a Potential Beneficial Owner or its respective Agent Member to
deliver Preferred Shares or to pay for Preferred Shares sold or
purchased pursuant to the Auction Procedures or otherwise.
5. RESERVED.
6. AUCTION AGENT.
For so long as any Preferred Shares are outstanding, the Auction Agent,
duly appointed by the Trust to so act, shall be in each case a commercial bank,
trust company or other financial institution independent of the Trust and its
affiliates (which however, may engage or have engaged in business transactions
with the Trust or its affiliates) and at no time shall the Trust or any of its
affiliates act as the Auction Agent in connection with the Auction Procedures.
If the Auction Agent resigns or for any reason its appointment is terminated
during any period that any Preferred Shares are outstanding, the Board of
Trustees shall use its best efforts promptly thereafter to appoint another
qualified commercial bank, trust company or financial institution to act as the
Auction Agent. The Auction Agent's registry of Existing Holders of Preferred
Shares shall be conclusive and binding on the Broker-Dealers. A Broker-Dealer
may inquire of the Auction Agent between 3:00 p.m. Eastern time on the Business
Day preceding an Auction for shares of a series of Preferred Shares and 9:30
a.m. Eastern time on the Auction Date for such Auction to ascertain the number
of shares in respect of which the Auction Agent has determined such
Broker-Dealer to be an Existing Holder. If such Broker-Dealer believes it is the
Existing
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Holder of fewer shares of the Series than specified by the Auction Agent in
response to such Broker-Dealer's inquiry, such Broker-Dealer may so inform the
Auction Agent of that belief. Such Broker-Dealer shall not, in its capacity as
Existing Holder of shares of the Series, submit Orders in such Auction in
respect of shares of the Series covering in the aggregate more than the number
of shares of the Series specified by the Auction Agent in response to such
Broker-Dealer's inquiry.
7. TRANSFER OF PREFERRED SHARES.
Unless otherwise permitted by the Trust, a Beneficial Owner or an
Existing Holder may sell, transfer or otherwise dispose of Preferred Shares only
in whole shares and only pursuant to a Bid or Sell Order placed with the Auction
Agent in accordance with the procedures described in this Part II or to a
Broker-Dealer, PROVIDED, HOWEVER, that (a) a sale, transfer or other disposition
of Preferred Shares from a customer of a Broker-Dealer who is listed on the
records of that Broker-Dealer as the holder of such shares to that Broker-Dealer
or another customer of that Broker-Dealer shall not be deemed to be a sale,
transfer or other disposition for purposes of this Section 7 if such
Broker-Dealer remains the Existing Holder of the shares so sold, transferred or
disposed of immediately after such sale, transfer or disposition and (b) in the
case of all transfers other than pursuant to Auctions, the Broker-Dealer (or
other Person, if permitted by the Trust) to whom such transfer is made shall
advise the Auction Agent of such transfer.
8. GLOBAL CERTIFICATE.
Prior to the commencement of a Voting Period, (i) all of the Preferred
Shares outstanding from time to time shall be represented by one global
certificate registered in the name of the Securities Depository or its nominee
and (ii) no registration of transfer of Preferred Shares shall be made on the
books of the Trust to any Person other than the Securities Depository or its
nominee.
9. FORCE MAJEURE.
(a) Notwithstanding anything else set forth herein, if an
Auction Date is not a Business Day because the New York Stock Exchange
is closed for business for more than three consecutive business days
due to an act of God, natural disaster, act of war, civil or military
disturbance, act of terrorism, sabotage, riots or a loss or malfunction
of utilities or communications services or the Auction Agent is not
able to conduct an Auction in accordance with the Auction Procedures
for any such reason, then the Auction Rate for the next Distribution
Period shall be the Auction Rate determined on the previous Auction
Date.
(b) Notwithstanding anything else set forth herein, if a
Distribution Payment Date is not a Business Day because the New York
Stock Exchange is closed for business for more than three consecutive
business days due to an act of God, natural disaster, act of war, civil
or military disturbance, act of terrorism, sabotage, riots or a loss or
malfunction of utilities or communications services or the distribution
payable on such date cannot be paid for any such reason, then:
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(i) the Distribution Payment Date for the affected
Distribution Period shall be the next Business Day on which
the Trust and its paying agent, if any, are able to cause the
distribution to be paid using their reasonable best efforts;
(ii) the affected Distribution Period shall end on the day it
would have ended had such event not occurred and the
Distribution Payment Date had remained the scheduled date; and
(iii) the next Distribution Period will begin and end on the
dates on which it would have begun and ended had such event
not occurred and the Distribution Payment Date remained the
scheduled date.
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