EXHIBIT 99.2B
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 [ ]: ___ 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 [ ] (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 plural
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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) "ACCOUNTANT'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 RATE" shall mean, for each Rate Period (i) if
Sufficient Clearing Orders exist for the Auction in respect thereof,
the Winning Bid Rate, (ii) if Sufficient Clearing Orders do not exist
for the Auction in respect thereof, the Maximum Rate, and (iii) in the
case of any Distribution Period if all the Preferred Shares are the
subject of Submitted Hold Orders for the Auction in respect thereof,
the All Hold Rate.
(h) "AUCTION" shall mean each periodic implementation of the Auction
Procedures.
(i) "AUCTION AGENCY AGREEMENT" shall mean the agreement between the
Trust and the Auction Agent which provides, among other things, that
the Auction Agent will follow the Auction Procedures for purposes of
determining the Applicable Rate for the Preferred Shares so long as the
Applicable Rate for such Preferred Shares is to be based on the results
of an Auction.
(j) "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.
(k) "AUCTION DATE" with respect to any Rate Period, shall mean the
Business Day next preceding the first day of such Rate Period.
(l) "AUCTION PROCEDURES" shall mean the procedures for conducting
Auctions set forth in Part II of Article X of these Bylaws.
(m) "AVAILABLE PREFERRED SHARES" shall have the meaning specified in
paragraph (a) of Section 3 of Part II of Article X of these Bylaws.
(n) "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.
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(o) "BID" and "BIDS" shall have the respective meanings specified in
paragraph (a) of Section 1 of Part II of Article X of these Bylaws.
(p) "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.
(q) "BOARD OF TRUSTEES" shall mean the Board of Trustees of the Trust
or any duly authorized committee thereof.
(r) "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.
(s) "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.
(t) "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.
(u) "CLOSING TRANSACTION" shall have the meaning specified in paragraph
(a)(i)(A) of Section 13 of Part I of Article X of these Bylaws.
(v) "CODE" means the Internal Revenue Code of 1986, as amended.
(w) "COMMERCIAL PAPER DEALERS" shall mean (1) [ ] 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.
(x) "COMMON SHARES" shall mean the outstanding common shares, par value
$.0001 per share, of the Trust.
(y) "CURE DATE" shall mean the Preferred Shares Basic Maintenance Cure
Date or the 1940 Act Cure Date, as the case may be.
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(z) "DATE OF ORIGINAL ISSUE" with respect to the Preferred Shares,
shall mean the date on which the Trust initially issued such shares.
(aa) "DECLARATION OF TRUST" shall have the meaning specified on the
first page of these Bylaws.
(bb) "DEPOSIT SECURITIES" shall mean cash and any obligations or
securities, including Short Term Money Market Instruments that are
Eligible Assets, rated at least AAA or F-1 by Fitch, X-0, XXX-0 xx
XXXX-0 by Xxxxx'x or AAA or A-1 by S&P.
(cc) "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.
(dd) "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.
(ee) "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 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.
(ff) "EXISTING HOLDER," with respect to shares of Preferred Shares,
shall mean a Broker-Dealer (or any such other Person as may be
permitted by the Trust) that is listed on the records of the Auction
Agent as a holder of shares of the Series.
(gg) "EXPOSURE PERIOD" shall mean the period commencing on a given
Valuation Date and ending 45 days thereafter.
(hh) "FAILURE TO DEPOSIT," with respect to shares of a series 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
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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.
(ii) "FITCH" shall mean Fitch Ratings and its successors.
(jj) "FITCH DISCOUNT FACTOR" means for the purposes of determining the
Preferred Shares Basic Maintenance Amount, the percentage determined
below:
(i) Common Shares and Preferred Shares of REITs and Other Real
Estate Companies:
DISCOUNT FACTOR (1)
REIT or Other Real Estate Company Preferred Shares ___%
REIT or Other Real Estate Company Common Shares ___%
(ii) Corporate Debt Securities of REITs(1)(2):
MATURITY IN YEARS AAA AA A BBB BB B CCC
----------------- --- -- - --- -- - ---
1 or less ___% ___% ___% ___% ___% ___% ___%
2 or less (but longer than 1) ___% ___% ___% ___% ___% ___% ___%
3 or less (but longer than 2) ___% ___% ___% ___% ___% ___% ___%
4 or less (but longer than 3) ___% ___% ___% ___% ___% ___% ___%
5 or less (but longer than 4) ___% ___% ___% ___% ___% ___% ___%
7 or less (but longer than 5) ___% ___% ___% ___% ___% ___% ___%
10 or less (but longer than 7) ___% ___% ___% ___% ___% ___% ___%
12 or less (but longer than 10) ___% ___% ___% ___% ___% ___% ___%
15 or less (but longer than 12) ___% ___% ___% ___% ___% ___% ___%
Greater than 20 ___% ___% ___% ___% ___% ___% ___%
(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, then the
security will be notched one rating category, i.e., considered to be
rated one rating category lower than the rating category assigned by
that NRSRO, for purposes of computing the Discount Factor. 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 be notched two rating categories for purposes of computing the
Discount Factor.
(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:
-11-
The Fitch Discount Factor applied to convertible
securities is (A) ___% for investment grade convertibles and
(B) ___%for below investment grade convertibles so long as
such convertible securities have neither (x) conversion
premiums greater than ___% 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) ___% for investment grade convertibles, and (B) ___%
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 ___%.
(iv) U.S. Treasury Securities:
REMAINING TERM TO MATURITY DISCOUNT FACTOR
-------------------------- ---------------
1 year or less ___%
2 years or less (but longer than 1 year) ___%
3 years or less (but longer than 2 years) ___%
4 years or less (but longer than 3 years) ___%
5 years or less (but longer than 4 years) ___%
7 years or less (but longer than 5 years) ___%
10 years or less (but longer than 7 years) ___%
15 years or less (but longer than 10 years) ___%
20 years or less (but longer than 15 years) ___%
25 years or less (but longer than 20 years) ___%
30 years or less (but longer than 25 years) ___%
(v) Short-Term Instruments and Cash: The Fitch Discount Factor
applied to short-term portfolio securities, other than 2a-7
Money Market Funds, will be (A) ___%, so long as such
portfolio securities or repurchase agreements mature or have a
demand feature at par exercisable within the Exposure Period
and (B) ___%, so long as such portfolio securities neither
mature nor have a demand feature at par exercisable within the
exposure period and are rated at least F-1/AA by Fitch, P-1/Aa
by Moody's, or A-1/AA by S&P. The Fitch Discount Factor
applied to 2a-7 Money Market Funds will be ___% if the 2a-7
Money Market Funds are rated by Fitch and ___% if the 2a-7
Money Market Funds are not rated by Fitch. A Fitch Discount
Factor of ___% 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.
(kk) "FITCH ELIGIBLE ASSET" shall mean the following:
-12-
(i) Common shares, preferred shares, 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 discretion, be
discounted at the same rate as the related security or on such
other basis as Fitch and the Trust may agree from time to
time) and receivables for Fitch Eligible Assets sold if the
receivable is due within five Business Days of the Valuation
Date.
(ll) "FITCH HEDGING TRANSACTION" shall have the meaning specified in
paragraph (b)(1) of Section 13 of Part I of Article X of these Bylaws.
(mm) "FORWARD COMMITMENTS" shall have the meaning specified in
paragraph (a)(iv) of Section 13 of Part I of Article X of these Bylaws.
(nn) "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.
(oo) "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.
-13-
(pp) "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.
(qq) "INITIAL RATE PERIOD" shall be the period from and including the
Date of Original Issue to but excluding _______ with respect to the
Series.
(rr) "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.
(ss) "LATE CHARGE" shall have the meaning specified in subparagraph
(e)(1)(B) of Section 2 of Part I of Article X of these Bylaws.
(tt) "LIQUIDATION PREFERENCE" with respect to a given number of
Preferred Shares, means $25,000 times that number.
(uu) "MARKET VALUE" of any asset of the Trust shall mean the market
value thereof determined in accordance with the pricing procedures of
the Trust.
(vv) "MAXIMUM RATE" for Preferred Shares on any date on which the
Applicable Rate is determined, the applicable percentage of the AA
Financial Composite Commercial Paper Rate on the date of such Auction
determined as set forth below based on the lower of the credit ratings
assigned to the Preferred Shares by Xxxxx'x and Fitch 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.
XXXXX'X CREDIT FITCH CREDIT APPLICABLE
RATING RATING PERCENTAGE
------ ------ ----------
Aa3 or Above AA- or Above ___%
A3 or A1 A- to A+ ___%
Baa3 to Baa1 BBB- to BBB+ ___%
Below Baa3 Below BBB- ___%
(ww) "MINIMUM RATE PERIOD" shall mean any Rate Period consisting of 7
Rate Period Days for the Preferred Shares.
(xx) "XXXXX'X" shall mean Xxxxx'x Investors Service, Inc., a Delaware
corporation, and its successors.
(yy) "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 Moody's Discount Factor for any Moody's
Eligible Asset other than the securities set forth below will be the
percentage provided in writing by Xxxxx'x.
-14-
(i) Common Shares and Preferred Shares of REITs and Other Real
Estate Companies:
DISCOUNT FACTOR (1)(2)(3)
Common Shares of REITs ___%
Preferred Shares of REITs
with Senior Implied or Unsecured
Xxxxx'x (or Fitch) rating: ___%
without Senior Implied or Unsecured
Xxxxx'x (or Xxxxx) rating: ___%
DISCOUNT FACTOR (1)(2)(3)
Preferred Shares of Other Real Estate Companies
with Senior Implied or Unsecured
Xxxxx'x (or Fitch) rating: ___%
without Senior Implied or Unsecured
Moody's (or Xxxxx) rating ___%
(1) A Discount Factor of ___% will be applied to those assets in a
single Moody's Real Estate Industry/Property Sector Classification that
exceed __% of Moody's Eligible Assets but are not greater than __% of
Moody's Eligible Assets.
(2) A Discount Factor of ___% 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 ___% will be applied if the market
capitalization (including common shares and preferred shares) of an
issuer is below $___ million.
(ii) Debt Securities of REITs and Other Real Estate
Companies(1):
MATURITY IN YEARS Aaa Aa A Baa Ba B NR(2)
--- -- - --- -- - --
1 or less ___% ___% ___% ___% ___% ___% ___%
2 or less (but longer than 1) ___% ___% ___% ___% ___% ___% ___%
3 or less (but longer than 2) ___% ___% ___% ___% ___% ___% ___%
4 or less (but longer than 3) ___% ___% ___% ___% ___% ___% ___%
5 or less (but longer than 4) ___% ___% ___% ___% ___% ___% ___%
7 or less (but longer than 5) ___% ___% ___% ___% ___% ___% ___%
10 or less (but longer than 7) ___% ___% ___% ___% ___% ___% ___%
15 or less (but longer than 10) ___% ___% ___% ___% ___% ___% ___%
20 or less (but longer than 15) ___% ___% ___% ___% ___% ___% ___%
30 or less (but longer than 20) ___% ___% ___% ___% ___% ___% ___%
Greater than 30 ___% ___% ___% ___% ___% ___% ___%
-15-
(1) The Moody's 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 a Trust asset can be
derived from other sources as well as combined with a number of
sources, unrated fixed-income and convertible securities, which are
securities that are not rated by any of Xxxxx'x, S&P or Fitch, are
limited to 10% of discounted Moody's Eligible Assets. If a security is
either rated below B or not rated by any of Xxxxx'x, S&P or Fitch, the
Trust will use the applicable percentage set forth in the row of the
table entitled "Unrated." Upon notice by Moody's, ratings assigned by
S&P or Fitch may be subject to adjustments in particular categories of
credits for which the S&P and/or Fitch rating does not seem to
approximate a Xxxxx'x rating equivalent.
(iii) U.S. Treasury Securities and U.S. Treasury Strips:
U.S. TREASURY
SECURITIES
REMAINING TERM TO MATURITY DISCOUNT U.S. TREASURY
FACTOR FACTOR STRIPS DISCOUNT
------ ------ ---------------
1 year or less ___% ___%
2 years or less (but longer than 1 year) ___% ___%
3 years or less (but longer than 2 years) ___% ___%
4 years or less (but longer than 3 years) ___% ___%
5 years or less (but longer than 4 years) ___% ___%
7 years or less (but longer than 5 years) ___% ___%
10 years or less (but longer than 7 years) ___% ___%
15 years or less (but longer than 10 years) ___% ___%
20 years or less (but longer than 15 years) ___% ___%
30 years or less (but longer than 20 years) ___% ___%
(iv) Short-Term Instruments and Cash. The Moody's Discount
Factor applied to short-term portfolio securities, including
without limitation corporate debt securities and Short Term
Money Market Instruments, other than 2a-7 Money Market Funds,
will be (i) ___%, so long as such portfolio securities or
repurchase agreements mature or have a demand feature at par
exercisable within 49 days of the relevant valuation date,
(ii) ___%, so long as such portfolio securities mature or have
a demand feature at par not exercisable within 49 days of the
relevant valuation date, and (iii) ___%, 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 Moody's Discount Factor applied
to 2a-7 Money Market Funds will be ___% if the 2a-7 Money
Market Funds are rated by Moody's and ___% if the 2a-7 Money
Market Funds are not rated by Moody's. A Moody's Discount
Factor of ___%will be applied to cash.
(zz) "XXXXX'X ELIGIBLE ASSETS" shall mean the following:
-16-
(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 Moody's Real Estate
Industry/Property Sector Classifications ("Moody's 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;
(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 Xxxxx'x) 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 Xxxxx'x 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
-17-
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.
(aaa) "XXXXX'X HEDGING TRANSACTION" shall have the meaning specified in
paragraph (a)(i) of Section 13 of Part I of Article X of these Bylaws.
(bbb) "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
10. Lodging/Resorts
11. Health Care
12. Home Financing
13. Commercial Financing
14. Self Storage
15. Specialty
The Trust will use its discretion in determining which NAREIT
Industry Classification is applicable to a particular
investment in consultation with Moody's, as necessary.
-18-
(ccc) "1940 ACT" shall mean the Investment Company Act of 1940, as
amended from time to time.
(ddd) "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.
(eee) "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).
(fff) "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.
(ggg) "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.
(hhh) "ORDER" and "ORDERS" shall have the respective meanings specified
in paragraph (a) of Section 1 of Part II of Article X of these Bylaws.
(iii) "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.
(jjj) "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 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.
(kkk) "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.
(lll) "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.
-19-
(mmm) "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.
(nnn) "PREFERRED SHARES" shall have the meaning set forth in the first
paragraph of Article X of these Bylaws.
(ooo) "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 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).
(ppp) "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.
(qqq) "PREFERRED SHARES BASIC MAINTENANCE REPORT" shall mean a report
signed by the President, Treasurer, Assistant Treasurer, Controller,
Assistant
-20-
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.
(rrr) "PRICING SERVICE" shall mean any pricing service designated from
time to time in accordance with the Trust's pricing procedures.
(sss) "QUARTERLY VALUATION DATE" shall mean the last Business Day of
each March, June, September and December of each year, commencing on
____________.
(ttt) "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.
(uuu) "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.
(vvv) "REIT," or real estate investment trust, means a company
dedicated to owning, operating or financing real estate.
(www) "REDEMPTION PRICE" shall mean the applicable redemption price
specified in Section 11 of Part I of Article X of these Bylaws.
(xxx) "REFERENCE RATE" shall mean, with respect to the determination of
the Maximum Rate, the applicable AA Financial Composite Commercial
Paper Rate, for a Rate Period of fewer than or equal to 270 days, or
the applicable Treasury Index Rate, for a Rate Period of more than 270
days.
(yyy) "REGISTRATION STATEMENT" shall mean the Trust's registration
statement on Form N-2 (________) ("Registration Statement"), as the
same may be amended from time to time.
(zzz) "S&P" shall mean Standard & Poor's Ratings Services and its
successors.
(aaaa) "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.
(bbbb) "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.
(cccc) "SERIES" shall have the meaning given in the first paragraph of
Article X of these Bylaws.
-21-
(dddd) "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.
(eeee) "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.
(ffff) "SPECIAL REDEMPTION PROVISIONS" shall have the meaning specified
in subparagraph (a)(i) of Section 11 of Part I of Article X of these
Bylaws.
(gggg) "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 required to submit Orders to the Auction Agent as
specified by the Auction Agent from time to time.
(hhhh) "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.
(iiii) "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.
(jjjj) "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.
(kkkk) "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.
-22-
(llll) "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.
(mmmm) "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.
(nnnn) "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.
(oooo) "SUFFICIENT CLEARING BIDS" shall have the meaning specified in
paragraph (a) of Section 3 of Part II of Article X of these Bylaws.
(pppp) "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.
(qqqq) "TREASURY FUTURES" shall have the meaning specified in paragraph
(a)(i) of Section 13 of Part I of Article X of these Bylaws.
(rrrr) "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 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.
(ssss) "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.
(tttt) "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
-23-
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.
(uuuu) "TRUST" shall mean the entity named on the first page of these
Bylaws, which is the issuer of the Preferred Shares.
(vvvv) "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.
(wwww) "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.
(xxxx) "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.
(yyyy) "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.
(zzzz) "VOTING PERIOD" shall have the meaning specified in paragraph
(b) of Section 5 of Part I of Article X of these Bylaws.
(aaaaa) "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 __, of which ___ shares will be issued on February
__, 2004.
2. DISTRIBUTIONS.
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(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 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.
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(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 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
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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 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 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
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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.
(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.
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(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.
(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 Xxxxx'x (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 Xxxxx'x (if Xxxxx'x is
then rating the Preferred Shares) with such documents as either may request. In
addition, full
-29-
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 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
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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 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
-31-
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; 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).
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(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 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)
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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 Moody's or
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
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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):
Accountant's Confirmation Xxxxx'x Eligible Assets
Annual Valuation Date Moody's 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
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
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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.
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
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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 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
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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 "Accountant'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 Accountant's
Confirmation as to such Preferred Shares Basic Maintenance Report.
(e) If any Accountant'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
Accountant'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 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 Accountant'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.
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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 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
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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 Fund 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 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
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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 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
-41-
Trust. For purposes of determining in clause (b) of the preceding
sentence whether the Discounted Value of Xxxxx'x Eligible Assets and
Fitch Eligible Assets each at least equal the Preferred Shares Basic
Maintenance Amount, the Moody's Discount Factor applicable to Xxxxx'x
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 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
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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 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
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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 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
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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 Xxxxx'x
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 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
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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.
(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
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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 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
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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;
(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
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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 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
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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: (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;
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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 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 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) 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
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(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);
(ii) 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;
(iii) engage in any short sales of securities;
(iv) lend securities;
(v) merge or consolidate into or with any other corporation or
entity;
(vi) change a pricing service (which has been designated by
management or the Board of Trustees); and
(vii) 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.
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,
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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, the Preferred Shares held by
any Person shall not be taken into account in the calculation of the share
ownership restrictions set forth in Article V, Sections 2(a)(i)-(ii) of the
Declaration of Trust.
PART II
1. ORDERS.
(a) Prior to the Submission Deadline on each Auction Date for shares of
a series of Preferred Shares:
(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
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(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
shares of a series 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 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
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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 shares of a series 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 shares of a series 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 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 of a series 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
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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 of a series 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 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 of a series 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
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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.
(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
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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:
(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.
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(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 shares of a series of
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:
(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;
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(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, 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
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(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 shares of a series of 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
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 shares of a series of
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.
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Notwithstanding any provision of the Auction Procedures or the
Settlement Procedures to the contrary, in the event an Existing Holder or
Beneficial Owner of shares of a series 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 of any series
or to pay for Preferred Shares of any series 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 shares of a
series 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 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
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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:
(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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