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BLACKROCK MUNICIPAL INCOME FUND, INC.
ARTICLES OF AMENDMENT
AMENDING AND RESTATING THE ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF
VARIABLE RATE DEMAND PREFERRED SHARES
Table
of Contents
Page
PART I......................................................................................................................................... 22
1. Number of Authorized Shares............................................................................................ 22
2. Dividends........................................................................................................................... 22
3. Gross-Up Payments............................................................................................................ 26
4. Designation of Special Rate Periods.................................................................................. 27
5. Voting Rights..................................................................................................................... 32
6. Minimum VRDP Shares Asset Coverage.......................................................................... 38
7. VRDP Shares Basic Maintenance Amount........................................................................ 38
8. Restrictions on Dividends and Other Distributions........................................................... 39
9. Rating Agency Restrictions................................................................................................ 40
10. Redemption..................................................................................................................... 41
11. Liquidation Rights.......................................................................................................... 50
12. Purchase Obligation........................................................................................................ 51
13. Miscellaneous................................................................................................................. 53
PART II........................................................................................................................................ 54
1. Remarketing Procedures.................................................................................................... 54
2. Remarketing Schedule....................................................................................................... 57
3. Determination of Applicable Rate..................................................................................... 61
4. Failed Remarketing Condition........................................................................................... 62
5. Purchase of VRDP Shares by Remarketing Agent............................................................ 62
6. Notification of Allocations................................................................................................. 62
7. Transfers............................................................................................................................. 63
8. Global Certificate............................................................................................................... 64
BLACKROCK MUNICIPAL INCOME FUND, INC.
Articles of Amendment
AMENDING AND RESTATING THE ARTICLES
SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF
VARIABLE
RATE DEMAND PREFERRED SHARES
BlackRock Municipal
Income Fund, Inc., a Maryland corporation (the “Corporation”), hereby certifies
to the State Department of Assessments and Taxation of the State of Maryland that:
FIRST: The
Corporation desires to amend its charter by amending and restating the Articles
Supplementary Establishing and Fixing the Rights and Preferences of Variable
Rate Demand Preferred Shares, dated as of March 16, 2011, as amended to date
(collectively, the “Original Articles Supplementary”, and as hereinafter
amended and restated, the “Articles Supplementary”).
SECOND: Pursuant
to Section 2-604 of the Maryland General Corporation Law, the following
provisions are all the provisions of the Articles Supplementary of the
Corporation currently in effect.
EXPLANATORY STATEMENT
A.
Pursuant to authority expressly
vested in the Board of Directors of the Corporation by Article IV of the Corporation’s
Charter, the Board of Directors has, by resolutions duly adopted on April 14,
2011, December 1, 2017 and November 19, 2021 reclassified 5,617, in the
aggregate, authorized and unissued shares of common stock of the Corporation as
shares of preferred stock of the Corporation, par value $0.10 per share, as
Variable Rate Demand Preferred Shares (“VRDP Shares”). The VRDP Shares may be
issued in one or more series, as designated and authorized by the Board of Directors
or a duly authorized committee thereof from time to time (each series of VRDP
Shares that may be authorized and issued, a “Series”).
B.
The preferences
(including liquidation preference), voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of redemption, of the
shares of each Series of VRDP Shares were initially designated in the Original
Articles Supplementary.
C.
The Board of Directors
of the Corporation has by resolution authorized the amendment and restatement
of the Original Articles Supplementary effective as of the Effective Date.
D.
The preferences
(including liquidation preference), voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of redemption, of the
shares of each Series of VRDP Shares are as follows or as set forth in an
amendment to these Articles Supplementary or otherwise in the Charter (each
such Series being referred to herein as a “Series of VRDP Shares”):
DESIGNATION
Series W-7: A series of 5,617 shares of preferred stock,
par value $0.10 per share, liquidation preference $100,000 per share, is hereby
authorized and designated “Series W-7 Variable Rate Demand Preferred Shares,”
also referred to herein as “Series W-7 VRDP Shares.” Each Series W-7 VRDP Share
shall be issued on a date determined by the Board of Directors of the Corporation
or pursuant to their delegated authority; have an Applicable Rate determined as
provided in these Articles Supplementary; and have such other preferences,
voting powers, limitations as to dividends, qualifications and terms and
conditions of redemption, in addition to those required by applicable law and
that are expressly set forth in the Corporation’s Charter, as set forth in
Parts I and II of these Articles Supplementary. The Series W-7 VRDP Shares
shall constitute a separate series of preferred shares of stock in the Corporation
and each Series W-7 VRDP Share shall be identical. Except as otherwise provided
with respect to any additional Series of VRDP Shares, the terms and conditions
of these Articles Supplementary apply to each Series of VRDP Shares.
DEFINITIONS
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:
“1940 Act”
means the Investment Company Act of 1940, as amended.
“Affected
Series” shall have the meaning specified in paragraph (c)(i) of Section 5
of Part I of these Articles Supplementary.
“Agent
Member” means a Person with an account at the Securities Depository that
holds one or more shares of a Series of VRDP Shares through the Securities
Depository, directly or indirectly, for a Beneficial Owner and that will be
authorized and instructed, directly or indirectly, by a Beneficial Owner to
disclose information to the Remarketing Agent and the Tender and Paying Agent
with respect to such Beneficial Owner.
“Alternate
VRDP Shares Purchase Agreement” means any agreement with a successor
liquidity provider replacing the VRDP Shares Purchase Agreement (or any
replacement therefor) upon its termination in accordance with its terms and
containing a Purchase Obligation substantially similar to the Purchase
Obligation therein as determined by the Corporation.
“Applicable
Base Rate” means (i) with respect to a Rate Period of fewer than forty-nine
(49) days, the greater of (a) the SIFMA Municipal Swap Index and (b) SOFR plus
0.15%, and (ii) with respect to a Rate Period of forty-nine (49) or more days, SOFR
plus 0.15%.
“Applicable
Percentage” shall have the meaning set forth in the definition of the
Maximum Rate.
“Applicable Rate” means the dividend rate per
annum on any share of a Series of VRDP Shares for a Rate Period determined as
set forth in paragraph (e)(i) of Section 2 of Part I of these Articles
Supplementary or in the definition of “Maximum Rate,” as applicable.
“Applicable
Rate Determination” means each periodic operation of the process of
determining the Applicable Rate for the shares of a Series of VRDP Shares for a
Subsequent Rate Period, as provided in the VRDP Shares Remarketing Agreement
and Part II of these Articles Supplementary.
“Applicable
Spread” means, in connection with the Maximum Rate for any Rate Period (and
subject to adjustment as described in the definition of Maximum Rate) (i) when
there is not a Failed Remarketing Condition, 200 basis points (2.00%), and (ii)
while a Failed Remarketing Condition has occurred or is continuing, 200 basis
points (2.00%) (up to 59 days of a continued Failed Remarketing Condition), 225
basis points (2.25%) (sixty (60) days but fewer than ninety (90) days of a
continued Failed Remarketing Condition), 250 basis points (2.50%) (ninety (90)
days but fewer than 120 days of a continued Failed Remarketing Condition), 275
basis points (2.75%) (120 days but fewer than 150 days of a continued Failed
Remarketing Condition), 300 basis points (3.00%) (150 days but fewer than 180
days of a continued Failed Remarketing Condition), and 400 basis points (4.00%)
(180 days or more of a continued Failed Remarketing Condition); provided that,
if at any time when the Applicable Spread is 225 basis points (2.25%), 250 basis
points (2.50%), 275 basis points (2.75%), 300 basis points (3.00%) or 400 basis
points (4.00%) and the Failed Remarketing Condition no longer exists due to the
successful remarketing of all Purchased VRDP Shares, then such Applicable
Spread of 225 basis points (2.25%), 250 basis points (2.50%), 275 basis points
(2.75%), 300 basis points (3.00%) or 400 basis points (4.00%) will continue to
be the Applicable Spread in connection with determining the Maximum Rate in
effect for each Rate Period commencing with the first Subsequent Rate Period
after the Failed Remarketing Condition no longer exists through and including
the first Subsequent Rate Period ending on or after the 45th day after the day
the Failed Remarketing Condition no longer exists; provided, further, that (i)
if a new Failed Remarketing Condition occurs prior to the end of such period
and the Applicable Spread is then 225 basis points (2.25%), the date such new
Failed Remarketing Condition occurs will be deemed to be the 60th day of a
continued Failed Remarketing Condition, (ii) if a new Failed Remarketing
Condition occurs prior to the end of such period and the Applicable Spread is
then 250 basis points (2.50%), the date such new Failed Remarketing Condition
occurs will be deemed to be the 90th day of a continued Failed Remarketing
Condition, (iii) if a new Failed Remarketing Condition occurs prior to the end
of such period and the Applicable Spread is then 275 basis points (2.75%), the
date such new Failed Remarketing Condition occurs will be deemed to be the
120th day of a continued Failed Remarketing Condition, (iv) if a new Failed
Remarketing Condition occurs prior to the end of such period and the Applicable
Spread is then 300 basis points (3.00%), the date such new Failed Remarketing
Condition occurs will be deemed to be the 150th day of a continued Failed
Remarketing Condition and (v) if a new Failed Remarketing Condition occurs
prior to the end of such period and the Applicable Spread is then 400 basis
points (4.00%), the date such new Failed Remarketing Condition occurs will be
deemed to be the 180th day of a continued Failed Remarketing Condition, in each
case, solely for purposes of determining the Applicable Spread.
“Articles Supplementary” means these Amended
and Restated Articles Supplementary Establishing and Fixing the Rights and
Preferences of Variable Rate Demand Preferred Shares as may be amended,
modified or supplemented from time to time.
“Beneficial
Owner” means a Person in whose name shares of a Series of VRDP Shares are recorded
as beneficial owner of such shares of a Series of VRDP Shares by the Securities
Depository, an Agent Member or other securities intermediary on the records of
such Securities Depository, Agent Member or securities intermediary, as the
case may be, or such Person’s subrogee, including the Liquidity Provider to the
extent it is at any time such a beneficial owner of shares of a Series of VRDP
Shares (irrespective of any assignment or transfer by the Liquidity Provider of
its voting rights).
“Board”
means the Board of Directors of the Corporation or any duly authorized
committee thereof.
“Business
Day” means a day other than a day (a) on which commercial banks in The City
of New York, New York are required or authorized by law or executive order to
close or (b) on which the New York Stock Exchange is closed.
“Charter”
means the Articles of Incorporation, as amended and supplemented (including by
these Articles Supplementary), of the Corporation on file in the State
Department of Assessments and Taxation of the State of Maryland.
“Closing
Date” means the Date of Original Issue of the shares of a Series of VRDP
Shares subject to the satisfaction of the conditions specified in Section 3.01
of the Fee Agreement.
“Code”
means the Internal Revenue Code of 1986, as amended.
“Common
Shares” means the shares of common stock, par value $0.10 per share, in the
Corporation.
“Corporation”
shall have the meaning as set forth in the Recitals of these Articles
Supplementary.
“Cure Date”
means the VRDP Shares Basic Maintenance Cure Date or the Minimum VRDP Shares
Asset Coverage Cure Date, as the case may be.
“Custodian”
means a bank, as defined in Section 2(a)(5) of the 1940 Act, that has the
qualifications prescribed in paragraph 1 of Section 26(a) of the 1940 Act, or
such other entity as shall be providing custodian services to the Corporation
as permitted by the 1940 Act or any rule, regulation, or order thereunder, and
shall include, as appropriate, any similarly qualified sub-custodian duly
appointed by the Custodian.
“Date of
Original Issue,” with respect to shares of a Series of VRDP Shares, means
the date on which the Corporation initially issued such VRDP Shares.
“Deposit Securities” means, as of any date, any
United States dollar-denominated security or other investment of a type
described below that either (i) is a demand obligation payable to the holder
thereof on any Business Day or (ii) has a maturity date, mandatory redemption
date or mandatory payment date, on its face or at the option of the holder,
preceding the relevant payment date in respect of which such security or other
investment has been deposited or set aside as a Deposit Security:
(1)
cash or any cash
equivalent;
(2)
any U.S. Government
Security;
(3)
any Municipal
Obligation that has a credit rating from at least one NRSRO that is the highest
applicable rating generally ascribed by such NRSRO to Municipal Obligations
with substantially similar terms as of the date of these Articles Supplementary
(or such rating’s future equivalent), including (A) any such Municipal
Obligation that has been pre-refunded by the issuer thereof with the proceeds
of such refunding having been irrevocably deposited in trust or escrow for the
repayment thereof and (B) any such fixed or variable rate Municipal Obligation
that qualifies as an eligible security under Rule 2a-7 under the 1940 Act;
(4)
any investment in any
money market fund registered under the 1940 Act that qualifies under Rule 2a-7
under the 1940 Act, or similar investment vehicle described in Rule
12d1-1(b)(2) under the 1940 Act, that invests principally in Municipal
Obligations or U.S. Government Securities or any combination thereof; or
(5)
any letter of credit
from a bank or other financial institution that has a credit rating from at
least one (1) NRSRO that is the highest applicable rating generally ascribed by
such NRSRO to bank deposits or short-term debt of similar banks or other
financial institutions as of the date of these Articles Supplementary (or such
rating’s future equivalent).
“Discounted Value,” as of any Valuation Date,
shall have the meanings set forth in the respective Rating Agency Guidelines.
“Dividend
Payment Date,” except as otherwise provided in paragraph (d) of Section 2
of Part I of these Articles Supplementary, means the date that is the first
(1st) Business Day of each calendar month.
“Dividend
Period,” with respect to shares of a Series of VRDP Shares, means the
period from, and including, the Date of Original Issue of shares of such Series
to, but excluding, the initial Dividend Payment Date for shares of such Series
and any period thereafter from, and including, one Dividend Payment Date for
shares of such Series to, but excluding, the next succeeding Dividend Payment
Date for shares of such Series.
“Effective
Leverage Ratio” shall have the meaning set forth in the Fee Agreement.
“Effective Leverage Ratio Cure Period” shall
have the meaning set forth in the Fee Agreement.
“Electronic
Means” means email transmission, facsimile transmission or other similar
electronic means of communication providing evidence of transmission (but
excluding online communications systems covered by a separate agreement)
acceptable to the sending party and the receiving party, in any case if operative
as between any two parties, or, if not operative, by telephone (promptly
confirmed by any other method set forth in this definition), which, in the case
of notices to the Tender and Paying Agent, shall be sent by such means as set
forth in Section 7.02 of the Tender and Paying Agent Agreement or as specified
in the related notice.
“Exchange
Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Extraordinary
Corporate Event” means as to the Liquidity Provider, (i) the consolidation
or amalgamation with, or merger with and into, or the transfer of all or
substantially all of the Liquidity Provider’s assets to another entity, or (ii)
the dissolution, for any reason, of the Liquidity Provider other than in
connection with the consolidation, amalgamation with, or merger with and into
another entity or the transfer of all or substantially all of the Liquidity
Provider’s assets; provided, however, that with respect to (i)
above, an Extraordinary Corporate Event does not include any of the listed
occurrences where (x) the surviving entity, or transferee of all or
substantially all of the Liquidity Provider’s assets, (a) assumes or is bound
by all of the obligations of the Liquidity Provider under the terms of the VRDP
Shares Purchase Agreement and (b) has short-term debt ratings in one of the two
highest ratings categories from the Requisite NRSROs and (y) the Liquidity
Provider has provided notice in writing to the Corporation confirming the
information described in (x) at least 10 days prior to the scheduled date of
the applicable listed occurrence in (i) above.
“Failed
Remarketing Condition” means a Failed Remarketing Condition-Purchased VRDP
Shares or a Failed Remarketing Condition-Unpurchased VRDP Shares.
“Failed
Remarketing Condition-Purchased VRDP Shares” means that the Liquidity
Provider acquires and continues to be the beneficial owner for federal income
tax purposes of any shares of a Series of VRDP Shares in connection with
purchases made pursuant to the Purchase Obligation (whether as a result of an
unsuccessful Remarketing or a Mandatory Purchase) on any Purchase Date,
including shares of a Series of VRDP Shares that the Liquidity Provider
continues to be the beneficial owner of for federal income tax purposes after
the expiration or termination of the VRDP Shares Purchase Agreement.
“Failed
Remarketing Condition-Purchased VRDP Shares Redemption” means redemption by
the Corporation, at a redemption price equal to $100,000 per share plus
accumulated but unpaid dividends thereon (whether or not earned or declared)
to, but excluding, the date fixed by the Board of Directors for redemption, of
shares of a Series of VRDP Shares that the Liquidity Provider shall have
acquired pursuant to the Purchase Obligation and continued to be the beneficial
owner of for federal income tax purposes for a continuous period of six (6)
months during which such VRDP Shares are tendered for Remarketing on each
Business Day in accordance with the Related Documents but cannot be
successfully remarketed (i.e., a Failed Remarketing
Condition-Purchased VRDP Shares shall have occurred and be continuing for such
period of time with respect to such VRDP Shares), determined by the Corporation
on a first-in, first-out basis, in accordance with and subject to the
provisions of the Fee Agreement and these Articles Supplementary.
“Failed
Remarketing Condition-Unpurchased VRDP Shares” means that a Beneficial
Owner (other than the Liquidity Provider or its affiliates) continues to hold
shares of a Series of VRDP Shares, that were subject to a Tender in accordance
with the VRDP Shares Purchase Agreement, after any Purchase Date as a result of
the failure by the Liquidity Provider for any reason to purchase such VRDP
Shares pursuant to the Purchase Obligation (whether as a result of an unsuccessful
Remarketing or a Mandatory Purchase) (“Unpurchased VRDP Shares”), until such
time as all Outstanding Unpurchased VRDP Shares are (i) successfully remarketed
pursuant to a Remarketing, (ii) purchased by the Liquidity Provider pursuant to
the Purchase Obligation, or (iii) if not successfully remarketed pursuant to a
Remarketing or purchased by the Liquidity Provider pursuant to the Purchase
Obligation, the subject of a properly tendered Notice of Revocation (or any
combination of the foregoing); and any Unpurchased VRDP Shares shall be deemed
tendered for Remarketing until the earliest to occur of the foregoing events
(i), (ii) or (iii) with respect to such Unpurchased VRDP Shares.
“Failure to
Deposit” means, with respect to shares of a Series of VRDP Shares, a
failure by the Corporation to pay to the Tender and Paying Agent, not later
than 12:00 noon, New York City time, (A) on the Business Day immediately
preceding any Dividend Payment Date for shares of such Series, in funds
available on such Dividend Payment Date in The City of New York, New York, the
full amount of any dividend (whether or not earned or declared) to be paid on
such Dividend Payment Date on any share of such Series or (B) on the Business
Day immediately preceding any redemption date in funds available on such
redemption date for shares of such Series in The City of New York, New York,
the Redemption Price to be paid on such redemption date for any share of such
Series after Notice of Redemption is provided pursuant to paragraph (c) of
Section 10 of Part I of these Articles Supplementary; provided, however, that
the foregoing clause (B) shall not apply to the Corporation’s failure to pay
the Redemption Price in respect of shares of a Series of VRDP 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.
“Fee Agreement”
means the VRDP Shares Fee Agreement, dated as of April 7, 2022 by and between
the Corporation and the initial Liquidity Provider, as amended, modified or
supplemented from time to time or any similar agreement with a successor
Liquidity Provider.
“Final
Notice of Purchase” means, in connection with an Optional Tender or a
Mandatory Tender, a Notice of Purchase delivered by the Tender and Paying Agent
to the Liquidity Provider (or directly to the Liquidity Provider by Beneficial
Owners or their Agent Members, in the case of an Optional Tender, or Holders,
in the case of a Mandatory Tender, if there is no Tender and Paying Agent or
for any reason the Tender and Paying Agent does not perform its obligations) on
the Purchase Date indicating the number of shares of a Series of VRDP Shares to
be purchased on such date pursuant to the Purchase Obligation, or, in connection with a Mandatory Purchase, the Mandatory
Purchase Notice delivered by the Corporation or the Tender and Paying Agent on
behalf of the Corporation.
“Fitch”
means Fitch Ratings.
“Fitch
Discount Factor” means the discount factors set forth in the Fitch
Guidelines for use in calculating the Discounted Value of the Corporation’s
assets in connection with Fitch’s long-term preferred stock ratings of shares
of a Series of VRDP Shares at the request of the Corporation.
“Fitch
Eligible Assets” means assets of the Corporation set forth in the Fitch
Guidelines as eligible for inclusion in calculating the Discounted Value of the
Corporation’s assets in connection with Fitch’s long-term preferred stock
ratings of shares of a Series of VRDP Shares at the request of the Corporation.
“Fitch
Guidelines” means the guidelines applicable to Fitch’s current long-term
preferred stock ratings of the VRDP Shares, provided by Fitch in connection
with Fitch’s long-term preferred stock ratings of shares of a Series of VRDP
Shares at the request of the Corporation (a copy of which is available on
request to the Corporation), in effect on the date hereof and as may be amended
from time to time, provided, however, that any such amendment will not be
effective for thirty (30) days from the date that Fitch provides final notice
of such amendment to the Corporation.
“Fitch
Provisions” means Sections 7, 8(c)(B) and 9 of Part I of these Articles
Supplementary with respect to Fitch, and any other provisions hereof with
respect to Fitch’s long-term preferred stock ratings of shares of a Series of
VRDP Shares at the request of the Corporation, including any provisions with
respect to obtaining and maintaining a long-term preferred stock rating on VRDP
Shares from Fitch. The Corporation is required to comply with the Fitch
Provisions only if Fitch is then rating shares of a Series of VRDP Shares at
the request of the Corporation.
“Gross-up
Payment” means payment to a Beneficial Owner of an amount which, when taken
together with the aggregate amount of Taxable Allocations made to such
Beneficial Owner to which such Gross-up Payment relates, would cause such
Beneficial Owner’s dividends in dollars (after giving effect to regular federal
income tax consequences) from the aggregate of such Taxable Allocations and the
related Gross-up Payment to be equal to the dollar amount of the dividends
which would have been received by such Beneficial Owner if the amount of such
aggregate Taxable Allocations would have been excludable from the gross income
of such Beneficial Owner. Such Gross-up Payment shall be calculated (i) without
consideration being given to the time value of money; (ii) assuming that no
Beneficial Owner of shares of a Series of VRDP Shares is subject to the federal
alternative minimum tax with respect to dividends received from the Corporation;
(iii) assuming that each Taxable Allocation and each Gross-up Payment (except
to the extent such Gross-up Payment is designated as an exempt-interest
dividend under Section 852(b)(5) of the Code or successor provisions) would be
taxable in the hands of each Beneficial Owner of shares of a Series of VRDP
Shares at the maximum marginal regular federal individual income tax rate
applicable to ordinary income or net capital gains, as applicable, or the
maximum marginal regular federal corporate income tax rate applicable to ordinary income or net capital gains, as applicable,
whichever is greater, in effect at the time such Gross-up Payment is made; and
(iv) assuming that each Taxable Allocation and each Gross-up Payment would not
be subject to the tax imposed by Section 1411 of the Code or any similar
Medicare or other surtax.
“Holder”
means a Person in whose name a share of a Series of VRDP Shares is registered
in the registration books of the Corporation maintained by the Tender and
Paying Agent.
“Initial
Rate Period,” with respect to shares of a Series of VRDP Shares, means the
period commencing on and including the Date of Original Issue thereof and
ending on, and including, the day that is seven (7) days after the Date of
Original Issue, or, if such day is not a Business Day, the next succeeding
Business Day or such other date determined by the Board of Directors of the Corporation
or pursuant to their delegated authority.
“Initial
Special Rate Period” means an Initial Rate Period that has been designated
as a Special Rate Period.
“Investment
Adviser” means BlackRock Advisors, LLC, or any successor company or entity.
“Late Charge”
shall have the meaning specified in paragraph (e)(i)(C) of Section 2 of Part I
of these Articles Supplementary.
“Liquidation
Preference,” with respect to a given number of Series W-7 VRDP Shares,
means $100,000 times that number.
“Liquidity
Account” shall have the meaning specified in paragraph (b)(ii)(B) of
Section 10 of Part I of these Articles Supplementary.
“Liquidity
Account Investments” means Deposit Securities or any other security or
investment owned by the Corporation that is rated not less than A- or A3 or the
equivalent rating (or any such rating’s future equivalent) by each NRSRO then
rating such security or investment (or, if rated by only one NRSRO, by such
NRSRO) or, if no NRSRO is then rating such security, deemed to be, with the
prior written consent of the Liquidity Provider, of an equivalent rating by the
Investment Adviser on the Corporation’s books and records.
“Liquidity
Provider” means any entity in such capacity pursuant to a VRDP Shares
Purchase Agreement, initially, Bank of America, N.A.
“Liquidity
Provider Ratings Event” means the Liquidity Provider shall fail to maintain
at any time short-term debt ratings in one of the two highest rating categories
from the Requisite NRSROs.
“Liquidity
Provider Ratings Event Termination Date” means the date established by the
Tender and Paying Agent, acting upon instructions of the Corporation pursuant
to the Tender and Paying Agent Agreement, for termination of the VRDP Shares
Purchase Agreement upon the occurrence of a Liquidity Provider Ratings Event,
which date shall be not less than sixteen (16) days
nor more than thirty (30) days following the date on which such Liquidity
Provider Ratings Event first occurs.
“Liquidity
Requirement” shall have the meaning specified in paragraph (b)(ii)(C) of
Section 10 of Part I of these Articles Supplementary.
“Mandatory
Purchase” means the mandatory purchase of Outstanding shares of a Series of
VRDP Shares by the Liquidity Provider pursuant to the VRDP Shares Purchase
Agreement in connection with a Mandatory Purchase Event.
“Mandatory
Purchase Date” means the Purchase Date for a Mandatory Purchase determined
in accordance with these Articles Supplementary and the VRDP Shares Purchase
Agreement.
“Mandatory
Purchase Event” means, (i) in connection with the termination of the VRDP
Shares Purchase Agreement due to its expiration as of a Scheduled Termination
Date, by the fifteenth day prior to any such Scheduled Termination Date, (a)
the Liquidity Provider shall not have agreed to an extension or further
extension of the Scheduled Termination Date to a date not earlier than 180 days
from the Scheduled Termination Date of the VRDP Shares Purchase Agreement then
in effect, and (b) the Corporation shall not have obtained and delivered to the
Tender and Paying Agent an Alternate VRDP Shares Purchase Agreement with a
termination date not earlier than 180 days from the Scheduled Termination Date
of the VRDP Shares Purchase Agreement being replaced, or (ii) in connection
with the termination of the VRDP Shares Purchase Agreement due to a Liquidity
Provider Ratings Event or Related Party Termination Event, by the fifteenth day
prior to the Liquidity Provider Ratings Event Termination Date or Related Party
Termination Date, as the case may be, the Corporation shall not have obtained
and delivered to the Tender and Paying Agent an Alternate VRDP Shares Purchase
Agreement with a termination date not earlier than 180 days from the Liquidity
Provider Ratings Event Termination Date or Related Party Termination Date, as
the case may be, of the VRDP Shares Purchase Agreement being replaced. The
Mandatory Purchase Event shall be deemed to occur on such fifteenth day prior
to any Scheduled Termination Date, Liquidity Provider Ratings Event Termination
Date or Related Party Termination Date, as the case may be.
“Mandatory
Purchase Notice” means, in connection with the Mandatory Purchase of shares
of a Series of VRDP Shares, a notice, substantially in the form attached to the
VRDP Shares Purchase Agreement as Exhibit B, delivered by the Corporation or
the Tender and Paying Agent on behalf of the Corporation to the Holders and the
Liquidity Provider in accordance with the VRDP Shares Purchase Agreement and
specifying a Mandatory Purchase Date.
“Mandatory
Tender,” with respect to a Mandatory Tender Event, means the mandatory
tender of all shares of a Series of VRDP Shares by Holders for Remarketing or,
in the event (i) no Remarketing occurs on or before the Purchase Date or (ii)
pursuant to an attempted Remarketing, shares of the Series of VRDP Shares
remain unsold and the Remarketing Agent does not purchase for its own account
the unsold shares of the Series of VRDP Shares tendered to the Tender and
Paying Agent for Remarketing (provided, that the Remarketing Agent may seek to
sell such shares of the Series of VRDP Shares in a subsequent Remarketing prior
to the Purchase Date), for purchase by the Liquidity
Provider at the Purchase Price pursuant to Part II of these Articles
Supplementary and the VRDP Shares Purchase Agreement.
“Mandatory
Tender Event” means (a) each failure by the Corporation to make a scheduled
payment of dividends on a Dividend Payment Date; (b) the occurrence of a
Liquidity Provider Ratings Event (which shall constitute a single Mandatory
Tender Event upon the occurrence of such Liquidity Provider Ratings Event,
whether or not continuing and whether or not such Liquidity Provider Ratings
Event also results in a Mandatory Purchase Event; provided that, following
restoration of the short-term debt ratings to the requisite level, a subsequent
Liquidity Provider Ratings Event, shall constitute a new Mandatory Tender
Event); (c) in the event of a failure by the Corporation to pay the Liquidity
Provider the applicable fee when due under the terms of the Fee Agreement if
the Liquidity Provider (in its sole discretion) thereafter provides written
notice to the Corporation that such failure to pay such fee constitutes a
Mandatory Tender Event; (d) the eighth (8th) day prior to the scheduled date of
the occurrence of an Extraordinary Corporate Event; (e) the Corporation shall
have obtained and delivered to the Tender and Paying Agent an Alternate VRDP
Shares Purchase Agreement by the fifteenth day prior to the Scheduled
Termination Date, Liquidity Provider Ratings Event Termination Date or Related
Party Termination Date, as the case may be, of the VRDP Shares Purchase
Agreement being replaced; (f) the Corporation shall have provided a Notice of
Proposed Special Rate Period in accordance with these Articles Supplementary;
or (g) in the event of a breach by the Corporation of its Effective Leverage
Ratio covenant with the Liquidity Provider in the Fee Agreement and the failure
to cure such breach within sixty (60) days from the date of such breach (which
60-day period would include the Effective Leverage Ratio Cure Period), if the
Liquidity Provider (in its sole discretion) thereafter provides written notice
to the Corporation and the Tender and Paying Agent that the failure to timely
cure such breach constitutes a Mandatory Tender Event (subject to the Corporation
curing such breach prior to the delivery date of such notice from the Liquidity
Provider).
“Mandatory
Tender Notice” means, in connection with the Mandatory Tender of shares of
a Series of VRDP Shares, a notice, substantially in the form attached to the
VRDP Shares Remarketing Agreement as Annex II, delivered by the Corporation or
the Tender and Paying Agent on behalf of the Corporation to the Holders and the
Liquidity Provider in accordance with the VRDP Shares Purchase Agreement and
specifying a Mandatory Tender Event and Purchase Date.
“Market
Value” of any asset of the Corporation means the market value thereof
determined by an independent third-party pricing service designated pursuant to
the Corporation’s valuation policies and procedures approved from time to time
by the Board of Directors for use in connection with the determination of the Corporation’s
net asset value. Market Value of any asset shall include any interest or
dividends, as applicable, accrued thereon. The pricing service values portfolio
securities at the mean between the quoted bid and asked price or the yield
equivalent when quotations are readily available. Securities for which
quotations are not readily available are valued at fair value as determined by
the pricing service using methods which include consideration of: yields or
prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating; indications as to value from dealers; and general market
conditions. The pricing service may employ electronic data processing
techniques or a matrix system, or both, to determine valuations.
“Maximum Rate” for shares of a Series of VRDP
Shares on any Rate Determination Date or in respect of the occurrence of a
Failed Remarketing Condition for shares of such Series, means the Applicable
Percentage of the Applicable Base Rate plus the Applicable Spread. The Maximum
Rate for shares of a Series of VRDP Shares will depend on the long-term
preferred stock rating assigned to such Series of VRDP Shares, the length of
the Rate Period and whether or not the Corporation has given notification to
the Remarketing Agent and the Tender and Paying Agent prior to the Applicable
Rate Determination for the Rate Period pursuant to Section 6 of Part II hereto
that any ordinary income or capital gains will be included in the dividend on
shares of a Series of VRDP Shares for that Rate Period. The Applicable Percentage
of the Applicable Base Rate is as follows:
Long-Term* Rating
|
Applicable Percentage
of Applicable Base Rate– No Notification
|
Fitch
|
Moody’s
|
|
AA- to AAA
|
Aa3 to Aaa
|
100%
|
BBB- to A+
|
Baa3 to A1
|
110%
|
Below BBB-**
|
Below Baa3*
|
135%
|
* And/or the equivalent ratings of any
Other Rating Agency then rating the shares of the Series of VRDP Shares at the
request of the Corporation; utilizing the lower of the ratings of the Rating
Agencies then rating VRDP Shares at the request of the Corporation.
** Includes unrated, if no Rating Agency
is then rating VRDP Shares at the request of the Corporation.
provided, however, that in the event the Corporation
has given notification prior to the Applicable Rate Determination for the Rate
Period pursuant to Section 6 of Part II hereof that any ordinary income and
capital gains will be included in the dividend on shares of the Series of VRDP
Shares for that Rate Period, the Applicable Percentage in the foregoing table
shall be divided by the quantity one (1) minus (i) the maximum marginal regular
federal personal income tax rate applicable to ordinary income or net capital
gains (as applicable), each expressed as a decimal, or (ii) the maximum
marginal regular federal corporate income tax rate applicable to ordinary
income or net capital gains (as applicable), each expressed as a decimal,
whichever is greater and determined on a weighted average basis in respect of
the relative amounts of ordinary income and net capital gains.
The Applicable
Percentage as so determined and the Applicable Spread may be subject to upward
(and, if previously adjusted upward, subsequent downward) adjustment as
provided in the VRDP Shares Remarketing Agreement, with the prior written
consent of the Liquidity Provider and after consultation with the Remarketing
Agent; provided, that, notwithstanding any provision to the contrary in the
VRDP Shares Remarketing Agreement, immediately following any such upward
adjustment, the Maximum Rate is equal to or higher than the rates determined
subsequent to such adjustment and the Corporation would be in compliance with
the Minimum VRDP Shares Asset Coverage and the VRDP Shares Basic Maintenance
Amount in the Rating Agency Guidelines of the Rating Agency or Rating Agencies
then rating the VRDP Shares at the request of the Corporation. Furthermore, in
the event of Special Rate Periods of greater than 364 days, the Maximum Rate
may be subject to upward (and, if previously adjusted upward, subsequent
downward) adjustment as provided in the VRDP Shares
Remarketing Agreement, with the prior written consent of the Liquidity Provider
and after consultation with the Remarketing Agent; provided, that, notwithstanding
any provision to the contrary in the VRDP Shares Remarketing Agreement,
immediately following any such upward adjustment, the Maximum Rate is equal to
or higher than the rates determined subsequent to such adjustment and the Corporation
would be in compliance with the Minimum VRDP Shares Asset Coverage and the VRDP
Shares Basic Maintenance Amount in the Rating Agency Guidelines of the Rating
Agency or Rating Agencies then rating the VRDP Shares at the request of the Corporation.
A Maximum Rate
in effect in respect of a Failed Remarketing Condition will continue to be the
Applicable Rate (i) until the first (1st) day of the next succeeding Subsequent
Rate Period after a Failed Remarketing Condition no longer exists in the case
of a Minimum Rate Period or a Special Rate Period of twenty-eight (28) Rate
Period Days or fewer, and (ii) until the first (1st) day of the next succeeding
Dividend Period after a Failed Remarketing Condition no longer exists in the
case of a Special Rate Period of greater than twenty-eight (28) Rate Period
Days.
Notwithstanding
any provision to the contrary in the VRDP Shares Remarketing Agreement, in no
event shall the Maximum Rate exceed 15%; provided, however, that in the event
the Corporation has given notification prior to the Applicable Rate
Determination for the Rate Period pursuant to Section 6 of Part II hereof that
any ordinary income or capital gains will be included in the dividend on shares
of the Series of VRDP Shares for that Rate Period, the Maximum Rate shall not
exceed 15% divided by the quantity one (1) minus (i) the maximum marginal
regular federal personal income tax rate applicable to ordinary income or net
capital gains (as applicable), each expressed as a decimal, or (ii) the maximum
marginal regular federal corporate income tax rate applicable to ordinary
income or net capital gains (as applicable), each expressed as a decimal,
whichever is greater and determined on a weighted average basis in respect of
the relative amounts of ordinary income and net capital gains.
“Minimum
Rate Period” means any Rate Period consisting of seven (7) Rate Period
Days, as adjusted to reflect any changes when the regular day that is a Rate
Determination Date is not a Business Day.
“Minimum
VRDP Shares Asset Coverage” means asset coverage, as defined in Section
18(h) of the 1940 Act as of the date of the Fee Agreement (excluding (1) from
the denominator of such asset coverage test (i) any senior securities for which
the Corporation has issued a Notice of Redemption and either has delivered
Deposit Securities to the Tender and Paying Agent or otherwise has adequate
Deposit Securities on hand for the purpose of such redemption and (ii) the Corporation’s
outstanding preferred shares to be redeemed in accordance with Section 6.20 of
the Fee Agreement with the gross proceeds from the sale of the Series W-7 VRDP
Shares, for which the Corporation either has delivered Deposit Securities to
the Tender and Paying Agent or otherwise has adequate Deposit Securities on
hand for the purpose of such redemption and (2) from the numerator of such
asset coverage test, any Deposit Securities referred to in the previous clauses
(1)(i) and (ii)), with such changes thereafter as agreed with the prior written
consent of the Liquidity Provider, of at least 200% or such higher percentage
as required and specified in the Fee Agreement, but, in any event, not more
than 250%, with respect to all outstanding senior securities of the Corporation
which are shares of stock, including all Outstanding
VRDP Shares (or, in each case, if higher, 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 stock of a closed-end investment company as a
condition of declaring dividends on its common shares or stock).
“Minimum
VRDP Shares Asset Coverage Cure Date,” with respect to the failure by the Corporation
to maintain the Minimum VRDP Shares Asset Coverage (as required by Section 6 of
Part I of these Articles Supplementary and the Fee Agreement) as of the last
Business Day of each month, means the tenth Business Day of the following
month.
“Moody’s”
means Moody’s Investors Service, Inc., a Delaware corporation, and its
successors.
“Moody’s
Discount Factor” means the discount factors set forth in the Moody’s
Guidelines for use in calculating the Discounted Value of the Corporation’s
assets in connection with Moody’s long-term preferred stock ratings of shares
of a Series of VRDP Shares at the request of the Corporation.
“Moody’s Eligible
Assets” means assets of the Corporation set forth in the Moody’s Guidelines
as eligible for inclusion in calculating the Discounted Value of the Corporation’s
assets in connection with Moody’s long-term preferred stock ratings of shares
of a Series of VRDP Shares at the request of the Corporation.
“Moody’s
Guidelines” means the guidelines applicable to Moody’s current long-term
preferred stock ratings of the VRDP Shares, provided by Moody’s in connection
with Moody’s long-term preferred stock ratings of shares of a Series of VRDP
Shares at the request of the Corporation (a copy of which is available on
request to the Corporation), in effect on the date hereof and as may be amended
from time to time, provided, however, that any such amendment will not be
effective for thirty (30) days from the date that Moody’s provides final notice
of such amendment to the Corporation.
“Moody’s Provisions”
means Sections 7, 8(c)(B) and 9 of Part I of these Articles Supplementary with
respect to Moody’s, and any other provisions hereof with respect to Moody’s
long-term preferred stock ratings of shares of a Series of VRDP Shares at the
request of the Corporation, including any provisions hereof with respect to
obtaining and maintaining a long-term preferred stock rating on shares of a
Series of VRDP Shares from Moody’s. The Corporation is required to comply with
the Moody’s Provisions only if Moody’s is then rating shares of a Series of
VRDP Shares at the request of the Corporation.
“Municipal
Obligations” means Municipal Bonds as described under “The Fund’s
Investments – Description of Municipal Bonds” in the Offering Memorandum.
“Net
Tax-Exempt Income” means the excess of the amount of interest excludable
from gross income under Section 103(a) of the Code over the amounts disallowed
as deductions under Sections 265 and 171(a)(2) of the Code.
“Notice of
Proposed Special Rate Period” has meaning specified in paragraph (c) of
Section 4 of Part I of these Articles Supplementary.
“Notice of Purchase” means, as the context
requires, a Preliminary Notice of Purchase or a Final Notice of Purchase, in
each case, substantially in the form attached as Exhibit A to the VRDP Shares
Purchase Agreement.
“Notice of
Redemption” means any notice with respect to the redemption of shares of a
Series of VRDP Shares pursuant to paragraph (c) of Section 10 of Part I of these
Articles Supplementary.
“Notice of
Revocation” means, in connection with the revocation by a Beneficial Owner
or its Agent Member of its Notice of Tender, a notice, substantially in the
form attached to the Tender and Paying Agent Agreement as Exhibit C, delivered
by a Beneficial Owner or its Agent Member to the Tender and Paying Agent
indicating an intention to revoke the tender of some or all of the shares of a
Series of VRDP Shares for sale on a Purchase Date pursuant to paragraph (f) of
Section 1 of Part II of these Articles Supplementary.
“Notice of Special
Rate Period” has the meaning specified in paragraph (d)(i) of Section 4 of
Part I of these Articles Supplementary.
“Notice of
Tender” means, in connection with an Optional Tender, a notice,
substantially in the form attached to the Tender and Paying Agent Agreement as
Exhibit A, delivered by a Beneficial Owner or its Agent Member to the Tender
and Paying Agent, indicating an intention to tender shares of a Series of VRDP
Shares for sale on a Purchase Date pursuant to Section 1 of Part II of these Articles
Supplementary.
“NRSRO”
means a “nationally recognized statistical rating organization” within the
meaning of Section 3(a)(62) of the Exchange Act that is not an “affiliated
person” (as defined in Section 2(a)(3) of the 1940 Act) of the Corporation or
the Liquidity Provider, including, at the date hereof, Moody’s and Fitch.
“Offering
Memorandum” means the offering memorandum of the Corporation relating to
the offering and sale of Series W-7 VRDP Shares, dated April 7, 2022, as
amended, revised or supplemented from time to time, including in connection
with any Remarketing, if applicable.
“Optional
Tender” means any tender of shares of a Series of VRDP Shares by a
Beneficial Owner or its Agent Member to the Tender and Paying Agent, other than
a Mandatory Tender, for Remarketing or, in the event (i) no Remarketing occurs
on or before the Purchase Date, or (ii) pursuant to an attempted Remarketing
shares of a Series of VRDP Shares remain unsold and the Remarketing Agent does
not purchase for its own account the unsold shares of a Series of VRDP Shares
tendered to the Tender and Paying Agent for Remarketing (provided, that the
Remarketing Agent may seek to sell such VRDP Shares in a subsequent Remarketing
prior to the Purchase Date), for purchase by the Liquidity Provider pursuant to
Part II of these Articles Supplementary and the VRDP Shares Purchase Agreement.
“Other
Rating Agency” means each NRSRO, if any, other than Moody’s or Fitch then
providing a short-term or long-term preferred stock rating for the shares of a
Series of VRDP Shares at the request of the Corporation.
“Other Rating Agency Eligible Assets” means
assets of the Corporation set forth in the Other Rating Agency Guidelines as
eligible for inclusion in calculating the Discounted Value of the Corporation’s
assets in connection with an Other Rating Agency’s long-term preferred stock
ratings of shares of a Series of VRDP Shares at the request of the Corporation.
“Other
Rating Agency Guidelines” means the guidelines applicable to each Other Rating
Agency’s long-term preferred stock ratings of the VRDP Shares, provided by an
Other Rating Agency in connection with such Other Rating Agency’s long-term
preferred stock ratings of shares of a Series of VRDP Shares at the request of
the Corporation (a copy of which is available on request to the Corporation),
as may be amended from time to time, provided, however, that any such amendment
will not be effective except as agreed between the Other Rating Agency and the Corporation.
“Other
Rating Agency Provisions” means Sections 7, 8(c)(B) and 9 of Part I of these
Articles Supplementary with respect to any Other Rating Agency then rating
shares of a Series of VRDP Shares at the request of the Corporation, and any
other provisions hereof with respect to such Other Rating Agency’s long-term
preferred stock ratings of shares of a Series of VRDP Shares, including any
provisions with respect to obtaining and maintaining a long-term preferred
stock rating of shares of a Series of VRDP Shares from such Other Rating Agency.
The Corporation is required to comply with the Other Rating Agency Provisions
of an Other Rating Agency only if such Other Rating Agency is then rating
shares of a Series of VRDP Shares at the request of the Corporation.
“Outstanding”
means, as of any date with respect to VRDP Shares of any Series, the number of
shares of such Series theretofore issued by the Corporation except, without
duplication, (i) any shares of such Series of VRDP Shares theretofore cancelled
or delivered to the Tender and Paying Agent for cancellation or redemption by
the Corporation, (ii) any shares of such Series of VRDP Shares with respect to
which the Corporation has given a Notice of Redemption and irrevocably
deposited with the Tender and Paying Agent sufficient Deposit Securities to
redeem such shares of such Series of VRDP Shares, pursuant to Section 10 of
Part I of these Articles Supplementary, (iii) any shares of such Series of VRDP
Shares as to which the Corporation shall be a Beneficial Owner, and (iv) any
shares of such Series of VRDP Shares represented by any certificate in lieu of
which a new certificate has been executed and delivered by the Corporation;
provided, however, with respect to clause (ii), any such shares of such Series
of VRDP Shares will be deemed to be Outstanding for purposes of the VRDP Shares
Purchase Agreement until redeemed by the Corporation.
“Person”
means and includes 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.
“Preferred
Shares” means the shares of preferred stock of the Corporation, and
includes the VRDP Shares.
“Preliminary
Notice of Purchase” means a Notice of Purchase delivered by the Tender and
Paying Agent to the Liquidity Provider (or directly to the Liquidity Provider
by Beneficial Owners or their Agent Members if there is no Tender and Paying
Agent or for any reason the Tender and Paying Agent
does not perform its obligations) on the Business Day immediately preceding a
Purchase Date indicating the number of shares of VRDP Shares to be purchased on
the Purchase Date pursuant to the Purchase Obligation.
“Purchase
Date,” with respect to any purchase of shares of a Series of VRDP Shares,
means (i) in connection with an Optional Tender, the date specified in a Notice
of Tender, which date shall be no earlier than the seventh (7th) day (or, if
such day is not a Business Day, the next succeeding Business Day) following
delivery to the Tender and Paying Agent of the Notice of Tender, (ii) in
connection with a Mandatory Tender, the date specified in the Mandatory Tender
Notice (or, if such day is not a Business Day, the next succeeding Business Day),
subject to the immediately succeeding sentence below, or (iii) in connection
with a Mandatory Purchase, the Mandatory Purchase Date specified in the
Mandatory Purchase Notice (or, if such day is not a Business Day, the next
succeeding Business Day). The Purchase Date in respect of a Mandatory Tender
Event shall be not later than seven days following the date a Mandatory Tender
Notice is sent to Holders by Electronic Means; provided, that: (A) the Purchase
Date in connection with the failure of the Corporation to pay the applicable
fee to the Liquidity Provider may not be later than the last Business Day of
the month such payment was due; (B) the Purchase Date in connection with the
occurrence of an Extraordinary Corporate Event may not be later than the Business
Day immediately preceding the occurrence of the Extraordinary Corporate Event
(and, if no earlier Purchase Date is specified in a Mandatory Tender Notice
with respect to such Extraordinary Corporate Event, the Business Day
immediately preceding the occurrence of the Extraordinary Corporate Event shall
be deemed to be the Purchase Date irrespective of the failure to have given or
sent a Mandatory Tender Notice); (C) the Purchase Date in connection with the Corporation
obtaining an Alternate VRDP Shares Purchase Agreement may not be later than the
Business Day immediately preceding the termination of the VRDP Shares Purchase
Agreement being replaced and the effective date of such Alternate VRDP Shares
Purchase Agreement (which may not be later than the termination date of the
VRDP Shares Purchase Agreement); and (D) the Purchase Date in connection with a
Notice of Proposed Special Rate Period may not be later than the first (1st)
day of such proposed Special Rate Period.
“Purchase
Obligation” means the unconditional and irrevocable obligation of the
Liquidity Provider during the term and pursuant to the terms of the VRDP Shares
Purchase Agreement to purchase Outstanding shares of a Series of VRDP Shares on
any Purchase Date at the Purchase Price from Beneficial Owners, in the case of
any Optional Tender, and Holders, in the case of any Mandatory Tender or any
Mandatory Purchase, in each case following delivery of a Final Notice of
Purchase with respect to such VRDP Shares.
“Purchase
Price” means an amount equal to the Liquidation Preference of any shares of
a Series of VRDP Shares to be purchased on a Purchase Date, plus any
accumulated but unpaid dividends thereon (whether or not earned or declared),
if any, to, but excluding, the relevant Purchase Date.
“Purchased
VRDP Shares” means all shares of a Series of VRDP Shares purchased by the
Liquidity Provider pursuant to the VRDP Shares Purchase Agreement, so long as
the Liquidity Provider continues to be the beneficial owner for federal income
tax purposes of such VRDP Shares.
“Rate Determination Date” means, with respect
to any Series of VRDP Shares, the last day of a Rate Period for such Series or,
if such day is not a Business Day, the next succeeding Business Day; provided,
however, that the next succeeding Rate Determination Date will be determined
without regard to any prior extension of a Rate Determination Date to a
Business Day.
“Rate Period,”
with respect to shares of a Series of VRDP Shares, means the Initial Rate
Period for shares of such Series and any Subsequent Rate Period, including any
Special Rate Period, for shares of such Series.
“Rate Period
Days,” for any Rate Period, means the number of days that would constitute
such Rate Period but for the application of paragraph (d) of Section 2 of Part
I of these Articles Supplementary or paragraph (b) of Section 4 of Part I of these
Articles Supplementary.
“Rating
Agency” means each of Fitch (if Fitch is then rating shares of a Series of
VRDP Shares at the request of the Corporation), Moody’s (if Moody’s is then
rating shares of a Series of VRDP Shares at the request of the Corporation) and
any Other Rating Agency (if such Other Rating Agency is then rating shares of a
Series of VRDP Shares at the request of the Corporation).
“Rating
Agency Certificate” has the meaning specified in paragraph (b) of Section 7
of Part I of these Articles Supplementary.
“Rating
Agency Eligible Assets” means assets of the Corporation set forth in the
Rating Agency Guidelines of a Rating Agency as eligible for inclusion in
calculating the Discounted Value of the Corporation’s assets in connection with
such Rating Agency’s long-term preferred stock ratings of shares of a Series of
VRDP Shares at the request of the Corporation.
“Rating
Agency Guidelines” means Moody’s Guidelines (if Moody’s is then rating
shares of a Series of VRDP Shares at the request of the Corporation), Fitch Guidelines
(if Fitch is then rating shares of a Series of VRDP Shares at the request of
the Corporation) and any Other Rating Agency Guidelines (if such Other Rating
Agency is then rating shares of a Series of VRDP Shares at the request of the Corporation).
“Rating
Agency Provisions” means the Moody’s Provisions (if Moody’s is then rating
shares of a Series of VRDP Shares at the request of the Corporation), the Fitch
Provisions (if Fitch is then rating shares of a Series of VRDP Shares at the
request of the Corporation) and any Other Rating Agency Provisions (if such
Other Rating Agency is then rating VRDP Shares at the request of the Corporation).
The Corporation is required to comply with the Rating Agency Provisions of a
Rating Agency only if such Rating Agency is then rating shares of a Series of
VRDP Shares at the request of the Corporation.
“Redemption
Date” has the meaning specified in paragraph (c) of Section 10 of Part I of
these Articles Supplementary.
“Redemption
Price” means the applicable redemption price specified in paragraph (a) or
(b) of Section 10 of Part I of these Articles Supplementary.
“Related Documents” means these Articles
Supplementary, the Charter, the Series W-7 VRDP Shares, the Placement Agreement,
the VRDP Shares Purchase Agreement, the VRDP Shares Remarketing Agreement, the
Fee Agreement and the Tender and Paying Agent Agreement.
“Related
Party” means a related party for purposes of Section 267(b) or Section
707(b) of the Code, as such provisions may be amended from time to time.
“Related
Party Termination Date” means the effective date of the termination of the
VRDP Shares Purchase Agreement in accordance with its terms following the
occurrence of a Related Party Termination Event.
“Related
Party Termination Event” means the Liquidity Provider becoming a Related
Party of the Corporation other than through the acquisition of shares of a
Series of VRDP Shares pursuant to the terms of the VRDP Shares Purchase
Agreement.
“Relevant
Governmental Body” means the Federal Reserve Board and/or the Federal
Reserve Bank of New York, or a committee officially endorsed or convened by the
Federal Reserve Board and/or the Federal Reserve Bank of New York.
“Remarketing”
means the remarketing of shares of a Series of VRDP Shares by the Remarketing
Agent on behalf of the Beneficial Owners thereof pursuant to an Optional Tender
or on behalf of the Holders thereof pursuant to a Mandatory Tender, as provided
in the VRDP Shares Remarketing Agreement and Part II of these Articles
Supplementary.
“Remarketing
Agent” means, with respect to the Series W-7 VRDP Shares, the Person or
Persons designated, with the prior written consent of the Liquidity Provider
(which consent shall not be unreasonably withheld), as Remarketing Agent for
such Series of VRDP Shares, initially as set forth in Schedule I to the Fee
Agreement, and its or their permitted successors and assigns.
“Remarketing
Notice” has the meaning set forth in paragraph (b) of Section 2 of Part II
of these Articles Supplementary.
“Remarketing
Procedures” means the procedures for conducting Remarketings set forth in
Part II of these Articles Supplementary.
“Requisite
NRSROs” means (i) any two NRSROs that have issued a rating with respect to
a security or class of debt obligations of an issuer or (ii) if only one NRSRO
has issued a rating with respect to such security or class of debt obligations
of an issuer at the time a purchaser Acquires (as such term is defined from
time to time in Rule 2a-7 under the 1940 Act) the security, that NRSRO.
“Scheduled
Termination Date” means, with respect to a VRDP Shares Purchase Agreement
for shares of a Series of VRDP Shares, the date that is 364 days from (and
including) the Closing Date for shares of such Series, or any succeeding date
to which the term of such VRDP Shares Purchase Agreement is extended pursuant
to the terms thereof.
“SEC” means the Securities and Exchange
Commission.
“Securities
Act” means the Securities Act of 1933, as amended.
“Securities
Depository” means The Depository Trust Company, New York, New York, and any
substitute for or successor to such securities depository that shall maintain a
book-entry system with respect to the shares of a Series of VRDP Shares.
“SIFMA
Municipal Swap Index” means on any Rate Determination Date the Securities
Industry and Financial Markets Association Municipal Swap Index, produced and
made available by Municipal Market Data as of 3:00 p.m., New York City time, on
the Rate Determination Date.
“SOFR”
with respect to any Business Day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as the
administrator of the benchmark (or a successor administrator) on the Federal
Reserve Bank of New York’s website (or any successor source) at approximately
8:00 a.m. (New York City time) on the immediately succeeding Business Day and,
in each case, that has been selected or recommended by the Relevant Governmental
Body.
“Special
Optional Tender Provisions” shall have the meaning specified in paragraph
(g) of Section 1 of Part II of these Articles Supplementary.
“Special
Rate Period,” with respect to shares of a Series of VRDP Shares, shall have
the meaning specified in paragraph (a) of Section 4 of Part I of these Articles
Supplementary.
“Special
Redemption Provisions” shall have the meaning specified in paragraph (a)(i)
of Section 10 of Part I of these Articles Supplementary.
“Subsequent
Rate Period,” with respect to shares of a Series of VRDP Shares, means the
period from, and including, the first (1st) day following the Initial Rate
Period of shares of such Series to, and including, the next Rate Determination
Date for shares of such Series and any period thereafter from, and including,
the first (1st) day following a Rate Determination Date for shares of such
Series to, and including, the next succeeding Rate Determination Date for
shares of such Series; provided, however, that, if any Subsequent Rate Period is
also a Special Rate Period, such term shall mean the period commencing on the
first (1st) day of such Special Rate Period and ending on, and including, the
last day of the last Dividend Period thereof; except for Special Rate Periods,
each Subsequent Rate Period will be a Minimum Rate Period.
“Taxable
Allocation” shall have the meaning specified in paragraph (a) of Section 3
of Part I of these Articles Supplementary.
“Tender”
means either a Mandatory Tender or an Optional Tender, as applicable.
“Tender and
Paying Agent” means The Bank of New York Mellon, or with the prior written
consent of the Liquidity Provider (which consent shall not be unreasonably withheld) any successor Person, which has entered into an
agreement with the Corporation to act in such capacity as the Corporation’s
tender agent, transfer agent, registrar, dividend disbursing agent, paying
agent, redemption price disbursing agent and calculation agent in connection
with the payment of regularly scheduled dividends with respect to each Series
of VRDP Shares.
“Tender and
Paying Agent Agreement” means the tender and paying agent agreement, dated
as of April 7, 2022, by and between the Corporation and the initial Tender and
Paying Agent, as amended, modified or supplemented from time to time, or any
similar agreement with a successor tender and paying agent.
“U.S.
Government Securities” means direct obligations of the United States or of
its agencies or instrumentalities that are entitled to the full faith and
credit of the United States and that, other than United States Treasury Bills,
provide for the periodic payment of interest and the full payment of principal
at maturity or call for redemption.
“Valuation
Date” means, for purposes of determining whether the Corporation is
maintaining the VRDP Shares Basic Maintenance Amount, (i) each Friday occurring
after the Date of Original Issue that is a Business Day or, for any such Friday
that is not a Business Day, the immediately preceding Business Day and (ii) the
Date of Original Issue.
“Voting
Period” shall have the meaning specified in paragraph (b)(i) of Section 5
of Part I of these Articles Supplementary.
“VRDP
Shares Basic Maintenance Amount,” as of any Valuation Date, shall have the
meaning set forth for “Basic Maintenance Amount” in the Rating Agency Guidelines.
“VRDP Shares
Basic Maintenance Cure Date,” with respect to the failure by the Corporation
to satisfy the VRDP Shares Basic Maintenance Amount (as required by paragraph
(a) of Section 7 of Part I of these Articles Supplementary) as of a given Valuation
Date, shall have the meaning set forth in the Rating Agency Guidelines, but in
no event shall it be longer than 10 Business Days following such Valuation
Date.
“VRDP Shares
Basic Maintenance Report” shall have the meaning set forth for “Basic
Maintenance Report” in the Rating Agency Guidelines.
“VRDP Shares
Purchase Agreement” means the VRDP Shares purchase agreement, dated as of April
7, 2022, by and between the initial Liquidity Provider and the Tender and
Paying Agent, as amended, modified or supplemented, or any Alternate VRDP
Shares Purchase Agreement.
“VRDP Shares
Remarketing Agreement” means the VRDP Shares remarketing agreement, dated
as of April 7, 2022, by and between the Corporation and the initial Remarketing
Agent, as amended, modified or supplemented from time to time, or any similar
agreement with a successor remarketing agent.
PART I
1.
Number of Authorized Shares.
The
initial number of authorized shares constituting Series W-7 VRDP Shares is as
set forth above under the title “Designation.”
2.
Dividends.
(a)
Ranking. The shares of each Series of VRDP Shares shall rank
on a parity with each other, with shares of each other Series of VRDP Shares
and with shares of any other Series of Preferred Shares as to the payment of
dividends by the Corporation.
(b)
Cumulative Cash Dividends. The Holders of shares of any Series of VRDP Shares
shall be entitled to receive, when, as and if declared by the Board of Directors,
out of legally available funds therefor in respect of shares of the Corporation
and in accordance with the Charter and applicable law, cumulative cash
dividends at the Applicable Rate for shares of such 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 Part I of these Articles Supplementary and Section 6 of
Part II of these Articles Supplementary), payable on the Dividend Payment Dates
with respect to shares of such Series determined pursuant to paragraph (d) of
this Section 2. Holders of VRDP Shares shall not be entitled to any dividend,
whether payable in cash, property or shares, in excess of full cumulative
dividends, as herein provided, on VRDP Shares. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on VRDP Shares which may be in arrears, and no additional sum of money
shall be payable in respect of such arrearage, except that the Corporation
shall pay as a supplemental dividend out of legally available funds therefor in
respect of shares of the Corporation and otherwise in accordance with
applicable law a Late Charge (as defined below in paragraph (e)(i)(C) of this
Section 2) on account of a Failure to Deposit, if any, in respect of each day
during the period commencing on the day a Failure to Deposit occurs through and
including the day immediately preceding the earlier of (i) the day the Failure
to Deposit is cured and (ii) the third (3rd) Business Day next succeeding the
day on which the Failure to Deposit occurred.
(c)
Dividends Cumulative from Date
of Original Issue. Dividends on
shares of any Series of VRDP Shares shall be declared daily and accumulate at
the Applicable Rate for shares of such Series from the Date of Original Issue
thereof.
(d)
Dividend Payment Dates and
Adjustment Thereof. The Dividend
Payment Date with respect to shares of a Series of VRDP Shares shall be the
first (1st) Business Day of each calendar month; provided, however,
that:
(i)
notwithstanding the foregoing, the
Corporation in its discretion may establish more frequent Dividend Payment
Dates than monthly in respect of any Minimum Rate Period, and the Dividend
Payment Date for the Dividend Period prior to the commencement of a Special
Rate Period shall be the Business Day immediately preceding the first (1st) day
of such Special Rate Period; and
(ii)
notwithstanding the foregoing, the
Corporation in its discretion may establish the Dividend Payment Dates in
respect of any Special Rate Period of shares of a Series of VRDP Shares
consisting of more than seven Rate Period Days; provided, however,
that such dates shall be set forth in the Notice of Proposed Special Rate
Period and Notice of Special Rate Period relating to such Special Rate Period,
as delivered to the Remarketing Agent, which Notice of Proposed Special Rate
Period and Notice of Special Rate Period shall be filed with the Secretary of
the Corporation; and further provided that (1) any such Dividend Payment Date
shall be a Business Day and (2) the last Dividend 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 Part I of these Articles Supplementary.
(e)
Applicable Rates and Calculation
of Dividends.
(i)
Applicable Rates. The dividend rate on shares of any Series of VRDP
Shares during the period from and after the Date of Original Issue of shares of
such Series to and including the last day of the Initial Rate Period for shares
of such Series shall be equal to the rate per annum determined by the
Board of Directors of the Corporation or pursuant to their delegated authority.
Except for Special Rate Periods, each Subsequent Rate Period will be a Minimum
Rate Period. For each Subsequent Rate Period for shares of such Series
thereafter, the dividend rate on shares of such Series shall be equal to the
rate per annum that results from the Applicable Rate Determination for
shares of such Series on the Rate Determination Date immediately preceding such
Subsequent Rate Period; provided, however, that:
(A)
if an Applicable Rate
Determination for any such Subsequent Rate Period is not held for any reason,
the dividend rate on shares of such Series for such Subsequent Rate Period will
be adjusted to the Maximum Rate for shares of such Series on the Rate
Determination Date therefor;
(B)
in the event of a Failed
Remarketing Condition, the Applicable Rate as of the close of business on the
day the Failed Remarketing Condition first occurs will be adjusted to the
Maximum Rate (with the Applicable Spread subject to adjustment as set forth in
the definition of Applicable Spread), and the Maximum Rate will continue to be
the Applicable Rate (i) until the first (1st) day of the next succeeding
Subsequent Rate Period after a Failed Remarketing Condition no longer exists in
the case of a Minimum Rate Period or a Special Rate Period of twenty-eight (28)
Rate Period Days or fewer, and (ii) until the first (1st) day of the next
succeeding Dividend Period after a Failed Remarketing Condition no longer
exists in the case of a Special Rate Period of greater than twenty-eight (28)
Rate Period Days;
(C)
if any Failure to Deposit shall
have occurred with respect to shares of such Series during any Dividend Period
thereof, but, prior to 12:00 noon, New York City time, on the third (3rd)
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 Corporation shall have paid to the
Tender and Paying Agent as a late charge out of
legally
available funds therefor in respect of shares of the Corporation and otherwise
in accordance with applicable law (“Late Charge”) daily supplemental dividends
equal in the aggregate to the sum of (1) if such Failure to Deposit consisted
of the failure to timely pay to the Tender and Paying Agent the full amount of
dividends with respect to any Dividend Period of the shares of such Series, an
amount computed by multiplying (x) the Applicable Rate for the Rate Period
during which such Failure to Deposit occurs on the Dividend Payment Date for
such Dividend Period plus 2.00% 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 such Series (with the amount for each individual day that such
Failure to Deposit occurs or continues uncured being declared as a supplemental
dividend on that day) and (2) if such Failure to Deposit consisted of the
failure to timely pay to the Tender and Paying Agent the Redemption Price of
the shares, if any, of such Series for which Notice of Redemption has been
provided by the Corporation pursuant to paragraph (c) of Section 10 of Part I
of these Articles Supplementary, an amount computed by multiplying, (x) for the
Rate Period during which such Failure to Deposit occurs on the Redemption Date,
the Applicable Rate plus 2.00% by (y) a fraction, the numerator of which
shall be the number of days for which such Failure to Deposit is not cured in
accordance with paragraph (f) of this Section 2 (including the day such Failure
to Deposit occurs and excluding the day such Failure to Deposit is cured) and
the denominator of which shall be 360, and applying the rate obtained against
the aggregate Liquidation Preference of the Outstanding shares of such Series
to be redeemed (with the amount for each individual day that such Failure to
Deposit occurs or continues uncured being declared as a supplemental dividend
on that day), and if a Rate Determination Date occurs on the date on which such
Failure to Deposit occurred or on either of the two Business Days succeeding
that date, and the Failure to Deposit has not been cured on such Rate
Determination Date in accordance with paragraph (f) of this Section 2, no
Applicable Rate Determination will be held in respect of shares of such Series
for the Subsequent Rate Period relating to such Rate Determination Date and the
dividend rate for shares of such Series for such Subsequent Rate Period will be
the Maximum Rate for shares of such Series on the Rate Determination Date for
such Subsequent Rate Period; or
(D)
if any Failure to Deposit shall
have occurred with respect to shares of such Series during any Dividend Period
thereof, and, prior to 12:00 noon, New York City time, on the third (3rd)
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 Corporation shall not have paid the
applicable Late Charge to the Tender and Paying Agent, no Applicable Rate
Determination will occur in respect of shares of such Series for the first
Subsequent Rate Period thereof thereafter (or for any Subsequent Rate Period
thereof thereafter to and including the Subsequent Rate Period during which (1)
such Failure to Deposit is cured in accordance with paragraph (f) of this
Section 2 and (2) the Corporation pays the applicable Late Charge to the Tender
and Paying Agent, in each case no later than 12:00 noon, New York City time, on
the fourth (4th) Business Day prior to the end of such Subsequent Rate Period),
and the dividend rate for shares of such Series for each such Subsequent Rate
Period shall be a rate per annum equal to the Maximum Rate for shares of
such Series on the Rate Determination Date for such Subsequent Rate Period (but
with the prevailing rating for shares of
such Series,
for purposes of determining such Maximum Rate, being deemed to be “below ‘BBB-’
and below ‘Baa3’”).
Each dividend
rate determined in accordance with this paragraph (e)(i) of Section 2 of Part I
of these Articles Supplementary shall be an “Applicable Rate.”
(ii)
Calculation of Dividends. The amount of dividends per share payable on shares
of a Series of VRDP Shares on any Dividend Payment Date shall equal the sum of
the dividends accumulated but not yet paid for each Rate Period (or part
thereof) in the related Dividend Period or Dividend Periods. The amount of
dividends accumulated for each such Rate Period (or part thereof) shall be
computed by multiplying the Applicable Rate in effect for shares of such Series
for such Rate Period (or part thereof) by a fraction, the numerator of which
shall be the number of days in such Rate Period (or part thereof) and the
denominator of which shall be the actual number of days in the year (365 or
366), and multiplying such product by $100,000.
(f)
Curing a Failure to Deposit. A Failure to Deposit with respect to shares of a
Series of VRDP Shares shall have been cured (if such Failure to Deposit is not
solely due to the willful failure of the Corporation to make the required
payment to the Tender and Paying Agent) with respect to any Dividend Period of
shares of such Series if, within the respective time periods described in
paragraph (e)(i) of this Section 2, the Corporation shall have paid to the
Tender and Paying Agent (A) all accumulated but unpaid dividends on shares of
such Series and (B) without duplication, the Redemption Price for shares, if
any, of such Series for which Notice of Redemption has been provided by the Corporation
pursuant to paragraph (c) of Section 10 of Part I of these Articles
Supplementary; provided, however, that the foregoing clause (B)
shall not apply to the Corporation’s failure to pay the Redemption Price in
respect of shares of a Series of VRDP 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.
(g)
Dividend Payments by Corporation
to Tender and Paying Agent. In
connection with each Dividend Payment Date for shares of a Series of VRDP
Shares, the Corporation shall pay to the Tender and Paying Agent, not later
than 12:00 noon, New York City time, on the earlier of (A) the third (3rd)
Business Day next succeeding the Rate Determination Date immediately preceding
the Dividend Payment Date for such Series and (B) the Business Day immediately
preceding the Dividend Payment Date for such Series (or as otherwise provided
for and in connection with designation of a Special Rate Period), an aggregate
amount of Deposit Securities equal to the dividends to be paid to all Holders
of shares of such Series on such Dividend Payment Date as determined in
accordance with Section 2(e)(ii) of Part I of these Articles Supplementary, or
as otherwise provided for and in connection with the designation of a Special
Rate Period. If an aggregate amount of funds equal to the dividends to be paid
to all Holders of shares of such Series on such Dividend Payment Date are not
available in New York, New York by 12:00 noon, New York City time, on the
Business Day immediately preceding such Dividend Payment Date, the Tender and
Paying Agent will notify the Liquidity Provider by Electronic Means of such
fact prior to the close of business on such day.
(h)
Tender and Paying Agent as Director
of Dividend Payments by Corporation.
All Deposit Securities paid to the Tender and Paying Agent for the payment of
dividends (or for the payment of any Late Charge) shall be held in trust for
the payment of such dividends (and any such Late Charge) by the Tender and
Paying Agent for the benefit of the Holders specified in paragraph (i) of this
Section 2. The Tender and Paying Agent shall notify the Corporation by
Electronic Means of the amount of any funds deposited with the Tender and
Paying Agent by the Corporation for any reason under the Tender and Paying
Agent Agreement, including for the payment of dividends or the redemption of
shares of a Series of VRDP Shares (or any Late Charge), that remain with the
Tender and Paying Agent after ninety (90) days from the date of such deposit
and such amount shall, to the extent permitted by law, be repaid to the Corporation
or the Liquidity Provider, as the case may be, by the Tender and Paying Agent
upon request by Electronic Means of the Corporation or the Liquidity Provider,
as the case may be.
(i)
Dividends Paid to Holders. Each dividend on shares of a Series of VRDP Shares shall
be declared daily to the Holders thereof at the close of business on each such
day and paid on each Dividend Payment Date to the Holders thereof at the close
of business on the day immediately preceding such Dividend Payment Date. In
connection with any transfer of shares of a Series of VRDP Shares, the
transferor as Beneficial Owner of such shares shall be deemed to have agreed
pursuant to the terms of such Series of VRDP Shares to transfer to the
transferee the right to receive from the Corporation any dividends declared and
unpaid for each day prior to the transferee becoming the Beneficial Owner of
such VRDP Shares in exchange for payment of the Purchase Price for such VRDP
Shares by the transferee.
(j)
Dividends Credited Against
Earliest Accumulated But Unpaid Dividends. Any dividend payment made on shares of a Series of VRDP Shares that
is insufficient to cover the entire amount of dividends payable shall first be
credited against the earliest accumulated but unpaid dividends due with respect
to such shares of such Series. Dividends in arrears for any past Dividend
Period may be declared and paid on any date, without reference to any regular
Dividend Payment Date, to the Holders on the record books of the Corporation as
of a record date to be fixed by the Board of Directors, such record date not to
exceed fifteen (15) days preceding the payment date of such dividends.
(k)
Dividends Designated as
Exempt-Interest Dividends. Dividends
on shares of a Series of VRDP Shares shall be designated as exempt-interest dividends
up to the amount of the Net Tax-Exempt Income of the Corporation, to the extent
permitted by, and for purposes of, Section 852 of the Code.
3.
Gross-Up Payments.
Holders of shares of a
Series of VRDP Shares shall be entitled to receive, when, as and if declared by
the Board of Directors, out of legally available funds therefor in respect of
shares of the Corporation and in accordance with the Charter and applicable
law, dividends in an amount equal to the aggregate Gross-up Payments as
follows:
(a)
If the Corporation allocates any
net capital gains or ordinary income taxable for regular federal income tax
purposes to a dividend paid on shares of a Series of VRDP Shares without either
having given advance notice thereof to the Remarketing Agent or simultaneously
increasing such dividend payment by an additional amount,
both as provided in Section 6 of Part II of these Articles Supplementary (such
allocation being referred to herein as a “Taxable Allocation”), the Corporation
shall, prior to the end of the calendar year in which such dividend was paid,
provide notice thereof to the Remarketing Agent and direct the Tender and
Paying Agent to send such notice with a Gross-up Payment to the Holder that was
entitled to such dividend payment during such calendar year at such Holder’s
address as the same appears or last appeared on the record books of the Corporation.
(b)
The Corporation shall not be
required to make Gross-up Payments with respect to any net capital gains or
ordinary income determined by the Internal Revenue Service to be allocable in a
manner different from the manner used by the Corporation.
4.
Designation of Special Rate Periods.
(a)
Length of and Preconditions for
Special Rate Period. The Corporation,
at its option, may designate any succeeding Subsequent Rate Period of a Series
of VRDP Shares as a Special Rate Period (a “Special Rate Period”) consisting of
a specified number of Rate Period Days evenly divisible by seven (7) (except
with respect to the Initial Special Rate Period) and not more than 1,820,
subject to adjustment as provided in paragraph (b) of this Section 4. Such a
designation of a Special Rate Period shall be effective only if (A) it is
permitted by applicable law and the Charter, (B) notice thereof shall have been
given in accordance with paragraph (c) and paragraph (d)(i) of this Section 4,
(C) no shares of such Series of VRDP Shares are owned by the Liquidity Provider
as Purchased VRDP Shares pursuant to the Purchase Obligation on either the Rate
Determination Date for such proposed Special Rate Period or on the first (1st)
day of such Special Rate Period and full cumulative dividends and any amounts
due with respect to redemptions payable prior to such date have been paid in
full, and (D) if any Notice of Redemption shall have been provided by the Corporation
pursuant to paragraph (c) of Section 10 of Part I of these Articles
Supplementary with respect to any shares of such Series of VRDP Shares, the
Redemption Price with respect to such VRDP Shares shall have been deposited
with the Tender and Paying Agent. In the event the Corporation wishes to
designate any succeeding Subsequent Rate Period for shares of a Series of VRDP
Shares as a Special Rate Period consisting of more than twenty-eight (28) Rate
Period Days, the Corporation shall notify Moody’s (if Moody’s is then rating
shares of such Series of VRDP Shares at the request of the Corporation), Fitch
(if Fitch is then rating shares of such Series of VRDP Shares at the request of
the Corporation) and each Other Rating Agency (if any Other Rating Agency is
then rating shares of such Series of VRDP Shares at the request of the Corporation)
in advance of the commencement of such Subsequent Rate Period that the Corporation
wishes to designate such Subsequent Rate Period as a Special Rate Period and
shall provide Moody’s (if Moody’s is then rating shares of such Series of VRDP
Shares at the request of the Corporation), Fitch (if Fitch is then rating
shares of such Series of VRDP Shares at the request of the Corporation) and
each Other Rating Agency (if any Other Rating Agency is then rating shares of
such Series of VRDP Shares at the request of the Corporation) with such
documents as they may request.
(b)
Adjustment of Length of Special
Rate Period. In the event the Corporation
wishes to designate a Subsequent Rate Period as a Special Rate Period, but the
day that would otherwise be the last day of such Special Rate Period is not a
Wednesday that is a Business Day in the case of a Series of VRDP Shares
designated as “Series W-7 Variable Rate Demand Preferred Shares”,
then the Special Rate Period shall end on the next
Business Day following such last day and the succeeding Subsequent Rate Period
will end on the following Wednesday or, if the succeeding Subsequent Rate
Period is a Special Rate Period, it shall end on a Wednesday as designated by
the Corporation, subject in each case to the foregoing Business Day
requirement.
(c)
Notice of Proposed Special Rate
Period. Except in the case of an
Initial Special Rate Period, if the Corporation proposes to designate any
succeeding Subsequent Rate Period for shares of a Series of VRDP Shares as a
Special Rate Period pursuant to paragraph (a) of this Section 4, not less than
twenty (20) (or such lesser number of days as may be agreed to from time to
time by the Remarketing Agent) nor more than thirty (30) days prior to the date
the Corporation proposes to designate as the first (1st) day of such Special
Rate Period (which shall be such day that would otherwise be the first (1st)
day of a Minimum Rate Period), notice (“Notice of Proposed Special Rate
Period”) shall be sent by the Corporation by first-class mail, postage prepaid
or by Electronic Means, to the Holders of shares of such Series with copies
provided to the Tender and Paying Agent, the Liquidity Provider and the
Remarketing Agent. Each such notice shall state(A) that the
Corporation may exercise its option to designate a succeeding Subsequent Rate
Period of shares of such Series as a Special Rate Period, specifying the first
(1st) day thereof, (B) that the
Corporation will, by 11:00 a.m., New York City time, on the second Business Day
immediately preceding such date (or by such later time or date, or both, as may
be agreed to by the Remarketing Agent) notify the Remarketing Agent of either
(x) its determination, subject to certain conditions, to exercise such option,
or (y) its determination not to exercise such option, (C) the Rate
Determination Date immediately prior to the first (1st) day of such Special
Rate Period, (D) the rate
calculation period to be used in determining the Applicable Rate if the term
thereof is different from the term of the Special Rate Period and any other
special provisions relating to the calculation of the Applicable Rate,
including any provision for setting the Applicable Rate by reference to any
index or to the ratings of the VRDP Shares or specifying any additional events
or conditions the existence or occurrence of which result in adjustments to the
Applicable Rate or additional fees or payments in respect of shares of such
Series of VRDP Shares (which provisions may vary provisions that are set forth
in the Charter (including these Articles Supplementary), provided that the
provisions and variations are clearly and expressly set forth in the Notice of
Special Rate Period), (E) that
such Special Rate Period shall not commence if (1) any shares of such Series of
VRDP Shares are owned by the
Liquidity Provider pursuant to the Purchase Obligation on either the Rate
Determination Date for such Special Rate Period or on the first (1st) day of
such Special Rate Period, or (2) full cumulative dividends or any amounts due
with respect to redemptions payable prior to such Rate Determination Date have
not been paid in full, (F) the scheduled Dividend Payment Dates for shares of such
Series of VRDP Shares during such Special Rate Period, (G) the Special Redemption Provisions, if any, applicable to
shares of such Series of VRDP Shares in respect of such Special Rate Period, (H) the Special Optional Tender Provisions, if any, applicable
to shares of such Series of VRDP Shares in respect of such Special Rate Period
(including whether the Optional Tender provisions shall be applicable or
otherwise subject to special conditions during the Special Rate Period), (I) the special provisions, if any, relating to the transfer of
the shares of such Series of VRDP Shares during the Special Rate Period, (J) the special provisions, if any, related to Taxable
Allocations during the Special Rate Period and any resulting Gross-up Payments
during the Special Rate Period including, but not limited to, that Section 3 of
Part I and Section 6 of Part II of these Articles Supplementary shall have no
effect during the Special Rate Period and that, instead, alternative special
provisions shall be observed during such period,
(K) the special provisions, if any, relating to the creation
and termination of the Special Rate Period including, but not limited to, any
provisions relating to the nature and scope of the obligations and rights of
the Liquidity Provider and the Remarketing Agent in connection therewith, the
short-term credit ratings of the Liquidity Provider and the short-term
preferred stock ratings of the VRDP Shares, the Remarketing of the VRDP Shares
upon the termination of the Special Rate Period, the applicability of the
redemption and certain other related provisions of these Articles Supplementary
with respect to shares of such Series of VRDP Shares held by the Liquidity
Provider (whether or not in its capacity as such) during the Special Rate
Period and any rights of the Corporation to request Holders of such Series of
VRDP Shares to agree to an extension of the Special Rate Period prior to the
termination thereof and (L) the special provisions, if any, relating to Mandatory
Tender Events and Mandatory Tenders with respect to shares of such Series of
VRDP Shares during the Special Rate Period (including whether Mandatory Tender
Events and Mandatory Tenders shall be applicable during the Special Rate
Period).
(d)
Notice of Special Rate Period. No later than 11:00 a.m., New York City time, on the
second Business Day immediately preceding the first (1st) day of any proposed
Special Rate Period for shares of a Series of VRDP 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 may be agreed to by the Remarketing Agent), the Corporation
shall deliver to the Remarketing Agent and the Liquidity Provider either:
(i)
a notice (“Notice of Special Rate
Period”) stating (A) that the Corporation has determined to designate the next
succeeding Rate Period for shares of such Series of VRDP Shares as a Special
Rate Period, specifying the same and the first (1st) day thereof, (B) the Rate
Determination Date immediately prior to the first (1st) day of such Special
Rate Period, (C) the rate calculation period to be used in determining the
Applicable Rate if the term thereof is different from the term of the Special
Rate Period and any other special provisions relating to the calculation of the
Applicable Rate, including any provision for setting the Applicable Rate by
reference to any index or to the ratings of the VRDP Shares or specifying any
additional events or conditions the existence or occurrence of which result in
adjustments to the Applicable Rate or additional fees or payments in respect of
shares of such Series of VRDP Shares (which provisions may vary provisions that
are set forth in the Charter (including these Articles Supplementary), provided
that the provisions and variations are clearly and expressly set forth in the
Notice of Special Rate Period), (D) that such Special Rate Period shall not
commence if (1) any shares of such Series of VRDP Shares are owned by the
Liquidity Provider as Purchased VRDP Shares pursuant to the Purchase Obligation
on either the Rate Determination Date for such Special Rate Period or on the
first (1st) day of such Special Rate Period, or (2) full cumulative dividends
or any amounts due with respect to redemptions payable prior to such Rate
Determination Date have not been paid in full, (E) the scheduled Dividend
Payment Dates for shares of such Series of VRDP Shares during such Special Rate
Period, (F) the Special Redemption Provisions, if any, applicable to shares of
such Series of VRDP Shares in respect of such Special Rate Period, (G) the
Special Optional Tender Provisions, if any, applicable to shares of such Series
of
VRDP Shares in respect of such Special Rate Period
(including whether the Optional Tender provisions shall be applicable or
otherwise subject to special conditions during the Special Rate Period), (H)
the special provisions, if any, relating to the transfer of the shares of such
Series of VRDP Shares during the Special Rate Period, (I) the special
provisions, if any, related to Taxable Allocations during the Special Rate
Period and any resulting Gross-up Payments during the Special Rate Period
including, but not limited to, that Section 3 of Part I and Section 6 of Part
II of these Articles Supplementary shall have no effect during the Special Rate
Period and that, instead, alternative special provisions shall be observed
during such period, (J) the special provisions, if any, relating to the creation
and termination of the Special Rate Period including, but not limited to, any
provisions relating to the nature and scope of the obligations and rights of
the Liquidity Provider and the Remarketing Agent in connection therewith, the
short-term credit ratings of the Liquidity Provider and the short-term
preferred stock ratings of the VRDP Shares, the Remarketing of the VRDP Shares
upon the termination of the Special Rate Period, the applicability of the
redemption and certain other related provisions of these Articles Supplementary
with respect to shares of such Series of VRDP Shares held by the Liquidity
Provider (whether or not in its capacity as such) during the Special Rate
Period and any rights of the Corporation to request Holders of such Series of
VRDP Shares to agree to an extension of the Special Rate Period prior to the
termination thereof and (K) the special provisions, if any, relating to
Mandatory Tender Events and Mandatory Tenders with respect to shares of such
Series of VRDP Shares during the Special Rate Period (including whether
Mandatory Tender Events and Mandatory Tenders shall be applicable during the
Special Rate Period), such notice to be accompanied by a VRDP Shares Basic
Maintenance Report showing that, as of the third (3rd) Business Day immediately
preceding such proposed Special Rate Period, Moody’s Eligible Assets (if
Moody’s is then rating such VRDP Shares at the request of the Corporation),
Fitch Eligible Assets (if Fitch is then rating such VRDP Shares at the request
of the Corporation) and Other Rating Agency Eligible Assets (if any Other
Rating Agency is then rating such VRDP Shares at the request of the Corporation)
each have an aggregate Discounted Value at least equal to the VRDP 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 Rate Determination Date for the
proposed Special Rate Period, and (b) the Moody’s Discount Factors applicable
to Moody’s Eligible Assets are determined by reference to the first Exposure
Period (as defined in the Moody’s Guidelines) longer than the Exposure Period
then applicable to the Corporation, as described in the Moody’s Guidelines); or
(ii)
a notice stating that the Corporation
has determined not to exercise its option to designate a Special Rate Period
for shares of such Series and that the next succeeding Rate Period of shares of
such Series shall be a Minimum Rate Period.
(e)
Failure to Deliver Notice of
Special Rate Period. If the Corporation
fails to deliver either of
the notices described in paragraphs (d)(i) or (d)(ii) of this Section 4 (and,
in the case of
the notice described in paragraph
(d)(i) of this Section 4, a VRDP Shares Basic Maintenance Report to the effect
set forth in such paragraph (but only if Moody’s, Fitch or an Other Rating
Agency is then rating the Series in question pursuant to the request of the Corporation))
with respect to any designation of any proposed Special Rate Period to the
Remarketing Agent and the Liquidity Provider by 11:00 a.m., New York City time,
on the second Business Day immediately preceding the first (1st) day of such
proposed Special Rate Period (or by such later time or date, or both, as may be
agreed to by the Remarketing Agent and the Liquidity Provider), the Corporation
shall be deemed to have delivered a notice to the Remarketing Agent and the
Liquidity Provider with respect to such Special Rate Period to the effect set
forth in paragraph (d)(ii) of this Section 4. In the event the Corporation
delivers to the Remarketing Agent and the Liquidity Provider a notice described
in paragraph (d)(i) of this Section 4, it shall file a copy of such notice with
the Secretary of the Corporation, and the contents of such notice shall, during
the Special Rate Period, be deemed a part of these Articles Supplementary and
binding on the Corporation and the Holders and Beneficial Owners of the shares
of such Series of VRDP Shares. In the event the Corporation delivers to the
Remarketing Agent and the Liquidity Provider a notice described in paragraph
(d)(ii) of this Section 4, the Corporation will provide Moody’s (if Moody’s is
then rating the VRDP Shares in question pursuant to the request of the Corporation)
and Fitch (if Fitch is then rating the VRDP Shares in question pursuant to the
request of the Corporation) and each Other Rating Agency (if any Other Rating
Agency is then rating the VRDP Shares in question pursuant to the request of
the Corporation) a copy of such notice.
(f)
Termination Date. Notwithstanding the foregoing, no Special Rate
Period shall end later than the fifteenth (15th) day prior to the
Scheduled Termination Date at which point the Rate Periods shall revert to
Minimum Rate Periods.
(g)
Initial Rate Period. Notwithstanding any other provision in these Articles
Supplementary to the contrary, the Corporation may designate the Initial Rate
Period as a Special Rate Period on the Date of Original Issue. In the event the
Corporation designates the Initial Rate Period a Special Rate Period, the Corporation
shall deliver a Notice of Special Rate Period to the Remarketing Agent and
Liquidity Provider on the Date of Original Issue and file a copy of such notice
with the Secretary of the Corporation, and the contents of such notice shall be
binding on the Corporation and the Holders and Beneficial Owners of the shares
of such Series of VRDP Shares.
(h)
Notice to Holders. In the event the Corporation delivers to the
Remarketing Agent and the Liquidity Provider a Notice of Special Rate Period,
it shall deliver, concurrently with the delivery thereof to the Remarketing
Agent and the Liquidity Provider, such Notice of Special Rate Period to the
Holders of the shares of such Series of VRDP Shares. During the term of the
Special Rate Period, the Corporation shall provide a copy of the Notice of
Special Rate Period to (i) any Holder or Beneficial Owner of the shares of such
Series of VRDP Shares upon request and (ii) any Holder or Beneficial Owner that
is a transferee in any transfer of the shares of such Series of VRDP Shares
during the Special Rate Period promptly after receiving the notice described
below, provided the Corporation has been notified of any such transfer and has
been provided with the contact information of such Holder or Beneficial Owner,
as applicable.
(i)
Ambiguities. In the event of any conflict between the terms of
the Notice of Special Rate Period and the terms of these Articles Supplementary,
the terms of the Notice of Special Rate Period shall govern.
(j)
Amendments. A Notice of Special Rate Period may be amended by
the Corporation at any time; provided, however, that the Corporation shall
deliver any such amendment to the Remarketing Agent, the Liquidity Provider and,
except in the case of an Initial Special Rate Period, the Holders of the shares
of the Series of VRDP Shares subject to the Special Rate Period in the manner
described in this Section 4 of Part I of these Articles Supplementary, provided
that the Corporation will not, without the prior written consent of the Tender
and Paying Agent (which consent shall not be unreasonably withheld), amend the
Notice of Special Rate Period in a manner that adversely changes the rights,
duties, privileges and immunities of the Tender and Paying Agent under the
Tender and Paying Agent Agreement, the VRDP Shares Purchase Agreement or
otherwise.
5.
Voting Rights.
(a)
One Vote Per VRDP Share. Except as otherwise provided in the Charter or as
otherwise required by law, (i) each Holder of shares of a Series of VRDP Shares
shall be entitled to one vote for each such share held by such Holder on each
matter submitted to a vote of stockholders of the Corporation, and (ii) the
holders of outstanding Preferred Shares, including each share of a Series of
VRDP Shares, and of Common Shares shall vote together as a single class; provided,
however, that the holders of outstanding Preferred Shares, including
VRDP Shares, voting together as a class, to the exclusion of the holders of all
other securities and classes of shares of stock of the Corporation, shall be
entitled to elect two directors of the Corporation at all times, each Preferred
Share, including each share of a Series of VRDP Shares, entitling the holder
thereof to one vote. Subject to paragraph (b) of this Section 5, the holders of
outstanding Common Shares and Preferred Shares, including VRDP Shares, voting
together as a single class, shall elect the balance of the directors.
(b)
Voting for Additional Directors.
(i)
Voting Period. During any period in which any one or more of the
conditions described in subparagraphs (A) or (B) of this paragraph (b)(i) shall
exist (such period being referred to herein as a “Voting Period”), the number
of directors constituting the Board of Directors shall be automatically
increased by the smallest number that, when added to the two directors elected
exclusively by the holders of Preferred Shares, including the VRDP Shares,
would constitute a majority of the Board of Directors as so increased by such
smallest number; and the holders of Preferred Shares, including the VRDP
Shares, shall be entitled, voting together as a single class on a
one-vote-per-share basis (to the exclusion of the holders of all other
securities and classes of shares of stock of the Corporation), to elect such
smallest number of additional directors, together with the two directors that
such holders are in any event entitled to elect. A Voting Period shall
commence:
(A)
if at the close of business on any
Dividend Payment Date accumulated dividends (whether or not earned or declared)
on any outstanding Preferred Shares, including the VRDP Shares, equal to at least
two (2) full years’ dividends shall be due and unpaid and sufficient cash or
specified securities shall not have been deposited with the Tender and Paying
Agent for the payment of such accumulated dividends; or
(B)
if at any time holders of
Preferred Shares are entitled under the 1940 Act to elect a majority of the directors
of the Corporation.
Upon the
termination of a Voting Period, the voting rights described in this paragraph
(b)(i) shall cease, subject always, however, to the revesting of such voting
rights in the holders of Preferred Shares upon the further occurrence of any of
the events described in this paragraph (b)(i).
(ii)
Notice of Special Meeting. As soon as reasonably practicable after the accrual
of any right of the holders of Preferred Shares to elect additional directors
as described in paragraph (b)(i) of this Section 5, the Corporation may call a
special meeting of such holders, such call to be made by notice as provided in
the bylaws of the Corporation, such meeting to be held not less than ten (10)
nor more than sixty (60) days after the date of mailing of such notice. If a
special meeting is not called by the Corporation, it may be called by any such
holder on like notice. The record date for determining the holders entitled to
notice of and to vote at such special meeting shall be not more than sixty (60)
nor less than ten (10) days prior to the date of such special meeting. At any
such special meeting and at each meeting of holders of Preferred Shares held
during a Voting Period at which directors 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 stock of the Corporation), shall be
entitled to elect the number of directors prescribed in paragraph (b)(i) of
this Section 5 on a one-vote-per-share basis.
(iii)
Terms of Office of Existing Directors. The terms of office of all persons who are directors
of the Corporation at the time of a special meeting of Holders and holders of other
Preferred Shares to elect directors shall continue, notwithstanding the
election at such meeting by the Holders and such other holders of other
Preferred Shares of the number of directors that they are entitled to elect,
and the persons so elected by the Holders and such other holders of other
Preferred Shares, together with the two incumbent directors elected by the
Holders and such other holders of other Preferred Shares and the remaining
incumbent directors elected by the holders of the Common Shares and Preferred
Shares, shall constitute the duly elected directors of the Corporation.
(iv)
Terms of Office of Certain Directors
to Terminate Upon Termination of Voting Period. Simultaneously with the termination of a Voting
Period, the terms of office of the additional directors elected by the Holders
and holders of other Preferred Shares pursuant to paragraph (b)(i) of this
Section 5 shall terminate, the remaining directors shall constitute the directors
of the Corporation and the voting rights of the Holders and such other holders
to elect additional directors pursuant
to paragraph
(b)(i) of this Section 5 shall cease, subject to the provisions of the last
sentence of paragraph (b)(i) of this Section 5.
(c)
Holders of VRDP Shares to Vote
on Certain Other Matters.
(i)
Increases in Capitalization and
Certain Amendments. So long as shares
of any Series of VRDP Shares are Outstanding, the Corporation shall not,
without the affirmative vote or consent of the Holders of at least a majority
of the VRDP Shares Outstanding at the time, in person or by proxy, either in
writing or at a meeting, voting as a separate class: (a) authorize, create or
issue any class or series of shares ranking prior to or, except as provided
below, on a parity with the VRDP Shares with respect to the payment of
dividends or the distribution of assets upon dissolution, liquidation or
winding up of the affairs of the Corporation, or authorize, create or issue
additional shares of any Series of VRDP Shares (except that, notwithstanding
the foregoing, but subject to certain Rating Agency approvals, the Board of Directors,
without the vote or consent of the Holders, may from time to time authorize and
create, and the Corporation may from time to time issue additional shares of,
any Series of VRDP Shares or classes or series of Preferred Shares ranking on a
parity with the VRDP Shares with respect to the payment of dividends and the
distribution of assets upon dissolution, liquidation or winding up of the
affairs of the Corporation), or (b) amend, alter or repeal the provisions of
the Charter, or these Articles Supplementary, whether by merger, consolidation
or otherwise, so as to adversely affect any preference, right or power of such
VRDP Shares or the Holders thereof set forth in the Charter or these Articles
Supplementary; provided, however, that (i) none of the actions
permitted by the exception to clause (a) above will be deemed to affect such
preferences, rights or powers, (ii) a division of a VRDP Share will be deemed
to affect such preferences, rights or powers only if the terms of such division
adversely affect the Holders of the VRDP Shares and the authorization, creation
and issuance of classes or series of shares ranking junior to the VRDP Shares
with respect to the payment of dividends and the distribution of assets upon
dissolution, liquidation or winding up of the affairs of the Corporation will
be deemed to affect such preferences, rights or powers only if such issuance
would, at the time thereof, cause the Corporation not to satisfy the Minimum
VRDP Shares Asset Coverage or, if Moody’s, Fitch or any Other Rating Agency is
then rating shares of a Series of VRDP Shares at the request of the Corporation,
the VRDP Shares Basic Maintenance Amount. For purposes of the foregoing, except
as otherwise set forth in these Articles Supplementary, no matter shall be
deemed to adversely affect any right, preference or power of a Series of VRDP
Shares or the Holders thereof unless such matter (i) alters or abolishes the
terms of any preferential rights of such Series, (ii) creates, alters or
abolishes the terms of any right in respect of redemption of such Series, or
(iii) creates or alters (other than to abolish or to comply with applicable
law) the terms of any restriction on transfer applicable to such Series. So
long as any shares of any Series of VRDP Shares are Outstanding, the Corporation
will not, without the affirmative vote or consent of the Holders of at least 662/3%
of the VRDP 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 Corporation is solvent
and does not foresee becoming insolvent. If any action set forth above would
adversely affect the rights of one or more Series (the “Affected Series”) of
VRDP Shares in a manner different from any other Series of VRDP Shares, the Corporation
will not approve any such action without the affirmative vote or consent of the
Holders of at least a majority of the shares of each such Affected Series
Outstanding at the time, in person or by proxy, either in writing or at a
meeting (each such Affected Series voting as a separate class).
(ii)
1940 Act Matters. Unless a higher percentage is provided for in the
Charter, (A) the affirmative vote of the holders of at least a “majority of the
outstanding Preferred Shares,” including VRDP Shares Outstanding at the time,
voting as a separate class, shall be required to approve any conversion
of the Corporation from a closed-end to an open-end investment company and (B)
the affirmative vote of the holders of a “majority of the outstanding Preferred
Shares,” including VRDP Shares Outstanding at the time, voting as a separate
class, shall be required to approve any plan of reorganization (as such term is
used in the 1940 Act) adversely affecting such shares. The affirmative vote of
the holders of a “majority of the outstanding Preferred Shares,” including VRDP
Shares Outstanding at the time, voting as a separate class, shall be required
to approve any action not described in the first sentence of this Section
5(c)(ii) requiring a vote of security holders of the Corporation under Section
13(a) of the 1940 Act. For purposes of the foregoing, “majority of the
outstanding Preferred Shares” means (i) 67% or more of such shares present at a
meeting, if the holders of more than 50% of such shares are present or
represented by proxy, or (ii) more than 50% of such shares, whichever is less.
In the event a vote of Holders of VRDP Shares is required pursuant to the
provisions of Section 13(a) of the 1940 Act, the Corporation shall, not later
than ten (10) Business Days prior to the date on which such vote is to be
taken, notify Moody’s (if Moody’s is then rating the VRDP Shares at the request
of the Corporation), Fitch (if Fitch is then rating the VRDP Shares at the
request of the Corporation) and each Other Rating Agency (if any Other Rating
Agency is then rating the VRDP Shares at the request of the Corporation) that
such vote is to be taken and the nature of the action with respect to which
such vote is to be taken.
(iii)
Exclusive Right to Vote on
Certain Charter Amendments.
Notwithstanding the foregoing, and except as otherwise required by the 1940
Act, whenever a vote of Holders of VRDP Shares is required by the Charter or
applicable law, (i) Holders of Outstanding shares of a Series of VRDP Shares
will be entitled as a Series, to the exclusion of the holders of all other
securities, including other Preferred Shares, Common Shares and other classes
of shares of stock of the Corporation, to vote on matters affecting shares of
such Series of VRDP Shares that do not adversely affect any of the rights of
holders of such other securities, including other Preferred Shares, Common
Shares and other classes of shares of stock of the Corporation, as expressly
set forth in the Charter, and (ii) Holders of Outstanding shares of a Series of
VRDP Shares will not be entitled to vote on matters affecting
any other Preferred Shares that do not adversely affect
any of the rights of Holders of such Series of VRDP Shares, as expressly set
forth in the Charter.
(d)
Board of Directors May Take
Certain Actions Without Stockholder Approval. The Corporation is not required to maintain any particular short-term
or long-term preferred stock ratings for a Series of VRDP Shares; provided,
however, the Corporation will use its reasonable best efforts to
maintain at least one short-term preferred stock rating of the VRDP Shares to
the extent that the Liquidity Provider then has a short-term debt rating; and
the Board of Directors may, subject to this Section 5(d), at anytime, terminate
the services of a Rating Agency then providing a short-term or long-term
preferred stock rating for such Series with or without replacement, in either
case, without the approval of Holders of shares of such Series of VRDP Shares
or other stockholders of the Corporation. The Corporation is required to comply
with the Rating Agency Provisions of a Rating Agency only if such Rating Agency
is then rating a Series of VRDP Shares at the request of the Corporation.
(i)
Notwithstanding anything herein to
the contrary (including without limitation clause (ii) below), the Board of Directors,
without the approval of Holders of shares of any Series of VRDP Shares or other
stockholders of the Corporation, may terminate the services of any Rating
Agency then providing a short-term or long-term preferred stock rating for a
Series of VRDP Shares and replace it with another Rating Agency, provided that
the Corporation provides seven (7) days’ notice by Electronic Means to Holders
prior to terminating the services of a Rating Agency and replacing it with
another Rating Agency. In the event a Rating Agency ceases to furnish a
short-term and long-term preferred stock rating or the Corporation terminates a
Rating Agency with replacement in accordance with this clause (i), the Corporation
shall no longer be required to comply with the applicable Rating Agency
Provisions of the Rating Agency ceasing to furnish a short-term or long-term
preferred stock rating, as the case may be, or so terminated and, as
applicable, the Corporation shall be required to thereafter comply only with
the Rating Agency Provisions of each Rating Agency then providing a short-term
or long-term preferred stock rating for a Series of VRDP Shares at the request
of the Corporation.
(ii)
(A) Notwithstanding
anything herein to the contrary (including without limitation clause (i)
above), the Board of Directors, without the approval of Holders of shares of
any Series of VRDP Shares or other stockholders of the Corporation, may
terminate the services of any Rating Agency then providing a short-term or
long-term preferred stock rating for a Series of VRDP Shares without
replacement, provided that (I) the Corporation has given the Remarketing
Agent, the Tender and Paying Agent, and the Liquidity Provider, and Moody’s,
Fitch and each Other Rating Agency, as applicable, and Holders of shares of
such Series of VRDP Shares at least forty-five (45) calendar days’ advance
written notice of such termination of services, (II) the Corporation is in
compliance with the Moody’s Provisions, the Fitch Provisions and the Other
Rating Agency Provisions, as the case may be, at the time the notice required
in clause (I) hereof is given and at the time of the termination of services,
and (III) shares of such Series of VRDP Shares continue to have short-term and
long-term ratings from at
least one NRSRO at the
request of the Corporation at and after the time of the termination of
services.
(B)
On the date that the notice is
given as described in the preceding clause (A) and on the date that the
services of Moody’s, Fitch or any Other Rating Agency, as applicable, are
terminated, the Corporation shall provide the Tender and Paying Agent and
Moody’s, Fitch and each Other Rating Agency, as applicable, with an officers’
certificate as to the compliance with the provisions of the preceding clause
(A), and, on such later date and thereafter, the Corporation shall no longer be
required to comply with the Rating Agency Provisions of the Rating Agency whose
services were terminated.
(iii)
Notwithstanding anything herein to
the contrary, but subject to this Section 5(d), the Rating Agency Guidelines,
as they may be amended from time to time by the respective Rating Agency, will
be reflected in a written document and may be amended by the respective Rating
Agency without the vote, consent or approval of the Corporation, the Board of Directors
or any holder of Preferred Shares, including any Series of VRDP Shares, or any
other stockholder of the Corporation. The Board of Directors, without the vote
or consent of any holder of Preferred Shares, including any Series of VRDP
Shares, or any other stockholder of the Corporation, may from time to time take
such actions as may be reasonably required in connection with obtaining,
maintaining or changing the short-term or long-term rating of any Rating Agency
that is then rating shares of a Series of VRDP Shares at the request of the Corporation,
and any such action will not be deemed to affect the preferences, rights or
powers of Preferred Shares, including the VRDP Shares, or the holders thereof, provided
that the Board of Directors receives written confirmation from such Rating
Agency, as applicable, then rating such shares of a Series of VRDP Shares at
the request of the Corporation (with such confirmation in no event being
required to be obtained from a particular Rating Agency with respect to
definitions or other provisions relevant only to and adopted in connection with
another Rating Agency’s short-term or long-term preferred stock rating of any
Series of VRDP Shares) that any such action would not adversely affect the
short-term or long-term preferred stock rating then assigned by such Rating
Agency.
(iv)
Notwithstanding the foregoing,
nothing in this Section 5 is intended in any way to limit the ability of (A)
the Corporation to make certain adjustments in the VRDP Shares Remarketing
Agreement as provided under the definition of “Maximum Rate,” subject to the
limitations set forth in such definition, or (B) the Board of Directors to,
subject to applicable law, amend or alter any provisions of these Articles
Supplementary, without the vote or consent of any holder of Preferred Shares,
including any Series of VRDP Shares, or any other stockholder of the Corporation,
as otherwise provided in these Articles Supplementary.
(e)
Voting Rights Set Forth Herein
are Sole Voting Rights. Unless
otherwise required by law, the Holders of VRDP Shares shall not have any
relative rights or preferences or other special rights other than those
specifically set forth herein.
(f)
No Preemptive Rights or
Cumulative Voting. The Holders of
VRDP Shares shall have no preemptive rights or rights to cumulative voting.
(g)
Voting for Directors Sole
Remedy for Corporation’s Failure to Pay Dividends. In the event that the Corporation fails to pay any
dividends on shares of a Series of VRDP Shares, the exclusive remedy of the
Holders of such Series shall be the right to vote for directors 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 Articles
Supplementary, by the other provisions of the Charter, by statute or otherwise
by applicable law, no Holder shall be entitled to vote any VRDP Shares and no
VRDP 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 the VRDP Shares entitled to
vote or the VRDP Shares deemed Outstanding for quorum purposes, as the case may
be, the requisite Notice of Redemption with respect to such VRDP Shares shall
have been provided as set forth in paragraph (c) of Section 10 of Part I of these
Articles Supplementary and Deposit Securities in an amount equal to the
Redemption Price for the redemption of such VRDP Shares shall have been
deposited in trust with the Tender and Paying Agent. VRDP Shares held (legally
or beneficially) by the Corporation or any affiliate of the Corporation or
otherwise controlled by the Corporation shall not have any voting rights or be
deemed to be Outstanding for voting or for calculating the voting percentage
required on any other matter or other purposes.
(i)
Grant of Irrevocable Proxy. To the fullest extent permitted by applicable law, each Holder and Beneficial Owner may in
its discretion grant an irrevocable proxy.
6.
Minimum VRDP Shares Asset Coverage.
The Corporation shall
maintain, as of the last Business Day of each month in which any VRDP Share is
Outstanding, the Minimum VRDP Shares Asset Coverage.
7.
VRDP Shares Basic Maintenance
Amount.
(a)
So long as any VRDP Share is
Outstanding, the Corporation shall maintain, on each Valuation Date, and shall
verify to its satisfaction that it is maintaining on such Valuation Date, (i)
Moody’s Eligible Assets having an aggregate Discounted Value equal to or
greater than the VRDP Shares Basic Maintenance Amount (if Moody’s is then rating
the VRDP Shares at the request of the Corporation), (ii) Fitch Eligible Assets
having an aggregate Discounted Value equal to or greater than the VRDP Shares
Basic Maintenance Amount (if Fitch is then rating the VRDP Shares at the
request of the Corporation), and (iii) Other Rating Agency Eligible Assets
having an aggregate Discounted Value equal to or greater than the VRDP Shares
Basic Maintenance Amount (if any Other Rating Agency is then rating the VRDP
Shares at the request of the Corporation).
(b)
The Corporation shall deliver to
each Rating Agency which is then rating a Series of VRDP Shares at the request
of the Corporation and any other party specified in the Rating Agency
Guidelines all certificates that are set forth in the respective Rating Agency
Guidelines
regarding Minimum VRDP Shares Asset
Coverage, the VRDP Shares Basic Maintenance Amount and/or related calculations
at such times and containing such information as set forth in the respective
Rating Agency Guidelines (each, a “Rating Agency Certificate”). A failure by
the Corporation to deliver a Rating Agency Certificate with respect to the VRDP
Shares Basic Maintenance Amount shall be deemed to be delivery of a Rating
Agency Certificate indicating the Discounted Value for all assets of the Corporation
is less than the VRDP Shares Basic Maintenance Amount, as of the relevant
Valuation Date; provided, however, that the Corporation shall
have the ability to cure such failure to deliver a Rating Agency Certificate
within one day of receipt of notice from such Rating Agency that the Corporation
failed to deliver such Rating Agency Certificate.
8.
Restrictions on Dividends and
Other Distributions.
(a)
Dividends on Preferred Shares
Other Than VRDP Shares. Except as set
forth in the next sentence, no dividends shall be declared or paid or set apart
for payment on the shares of any class or series of shares of stock of the Corporation
ranking, as to the payment of dividends, on a parity with the VRDP Shares for
any period unless full cumulative dividends have been or contemporaneously are
declared and paid on the shares of each Series of VRDP Shares through its most
recent Dividend Payment Date. When dividends are not paid in full upon the
shares of each Series of VRDP Shares through its most recent Dividend Payment
Date or upon the shares of any other class or series of shares of stock of the Corporation
ranking on a parity as to the payment of dividends with the VRDP Shares through
their most recent respective dividend payment dates, all dividends declared
upon the VRDP Shares and any other such class or series of shares of stock of
the Corporation ranking on a parity as to the payment of dividends with the
VRDP Shares shall be declared pro rata so that the amount of dividends
declared per share on the VRDP Shares and such other class or series of shares
of stock of the Corporation shall in all cases bear to each other the same
ratio that accumulated dividends per share on the VRDP Shares and such other
class or series of shares of stock of the Corporation bear to each other (for
purposes of this sentence, the amount of dividends declared per VRDP Share
shall be based on the Applicable Rate for such VRDP Share effective during the
Dividend Periods during which dividends were not paid in full).
(b)
Dividends and Other
Distributions With Respect to Common Shares Under the 1940 Act. The Board of Directors 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
1940 Act) 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 VRDP Share is Outstanding, and except as set forth in paragraph (a) of
this Section 8 and paragraph (c) of Section 11 of this Part I, (A) the Corporation
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 VRDP 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 Corporation ranking junior to or on a parity with the VRDP Shares as to
the payment of dividends or 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 Corporation
ranking junior to the VRDP Shares as to the payment of dividends and 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 Corporation
ranking junior to or on a parity with VRDP Shares as to the payment of
dividends and the distribution of assets upon dissolution, liquidation or
winding up), unless (i) full cumulative dividends on shares of each Series of
VRDP Shares through its most recently ended Dividend Period shall have been
paid or shall have been declared and sufficient funds for the payment thereof
deposited with the Tender and Paying Agent and (ii) the Corporation has
redeemed the full number of VRDP Shares required to be redeemed by any
provision for mandatory redemption pertaining thereto, and (B) the Corporation
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 VRDP Shares as to the payment of
dividends and the distribution of assets upon dissolution, liquidation or
winding up) in respect of Common Shares or any other shares of the Corporation
ranking junior to VRDP Shares as to the payment of dividends or 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 Corporation ranking junior to VRDP Shares as to the payment
of dividends and the distribution of assets upon dissolution, liquidation or
winding up), unless immediately after such transaction the Discounted Value of
Moody’s Eligible Assets (if Moody’s is then rating the VRDP Shares at the
request of the Corporation), Fitch Eligible Assets (if Fitch is then rating the
VRDP Shares at the request of the Corporation) and Other Rating Agency Eligible
Assets (if any Other Rating Agency is then rating the VRDP Shares at the
request of the Corporation) would each at least equal the VRDP Shares Basic
Maintenance Amount for such Series.
9.
Rating Agency Restrictions.
For so long as any shares
of any Series of VRDP Shares is Outstanding and any Rating Agency is then
rating a Series of VRDP Shares at the request of the Corporation, the Corporation
will not engage in certain proscribed transactions set forth in the Rating
Agency Guidelines, unless it has received written confirmation from each such
Rating Agency that proscribes the applicable transaction in its Rating Agency
Guidelines that any such action would not impair the rating then assigned by
such Rating Agency to a Series of VRDP Shares.
10.
Redemption.
(a)
Optional Redemption.
(i)
Subject to the provisions of
subparagraph (iv) of this paragraph (a), shares of any Series of VRDP Shares
may be redeemed, at the option of the Corporation, at any time, as a whole or
from time to time in part, out of legally available funds therefor in respect
of shares of the Corporation and otherwise in accordance with applicable state
law, at a redemption price per share equal to the sum of $100,000 plus an
amount equal to accumulated but unpaid dividends thereon (whether or not earned
or declared) to, but not including, the date fixed for redemption; provided,
however, that (1) shares of a Series of VRDP Shares may not be redeemed
in part if after such partial redemption fewer than fifty (50) shares of such
Series would remain Outstanding; (2) shares of a Series of VRDP Shares are not
redeemable by the Corporation during the Initial Rate Period; and (3) subject
to subparagraph (ii) of this paragraph (a), the Notice of Special Rate Period
relating to a Special Rate Period of shares of a Series of VRDP Shares, as
delivered to the Remarketing Agent and filed with the Secretary of the Corporation,
may provide that shares of such Series shall not be redeemable during the whole
or any part of such Special Rate Period 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 shares of a Series of VRDP Shares for a Special Rate Period thereof
may contain Special Redemption Provisions only if the Corporation’s Board of Directors,
after consultation with the Remarketing Agent and the Liquidity Provider,
determines that such Special Redemption Provisions are in the best interest of
the Corporation.
(iii)
If fewer than all of the
Outstanding shares of a Series of VRDP Shares are to be redeemed pursuant to
subparagraph (i) of this paragraph (a), the number of shares of such Series to
be redeemed shall be selected pro rata from among the Holders of shares
of such Series in proportion to the number of shares of such Series held by
such Holders, by lot or in such other manner as the Corporation’s Board of Directors
may determine to be fair and equitable. The Corporation’s Board of Directors
will have the full power and authority to prescribe the terms and conditions
upon which shares of a Series of VRDP Shares will be redeemed from time to
time.
(iv)
The Corporation may not on any
date send a Notice of Redemption pursuant to paragraph (c) of this Section 10
in respect of a redemption contemplated to be effected pursuant to this
paragraph (a) unless on such date (a) the Corporation has available Deposit
Securities with maturity or tender dates not later than the day preceding the
applicable Redemption Date and having a Market Value not less than the amount
(including any applicable premium) due to Holders by reason of the redemption
of shares of a Series of VRDP Shares on such Redemption Date
and (b) the Discounted Value of Moody’s Eligible Assets
(if Moody’s is then rating the shares of a Series of VRDP Shares at the request
of the Corporation), the Discounted Value of Fitch Eligible Assets (if Fitch is
then rating the shares of a Series of VRDP Shares at the request of the Corporation)
and the Discounted Value of Other Rating Agency Eligible Assets (if any Other
Rating Agency is then rating the shares of a Series of VRDP Shares at the
request of the Corporation) each at least equals the VRDP Shares Basic
Maintenance Amount, and would at least equal the VRDP Shares Basic Maintenance
Amount immediately subsequent to such redemption if such redemption were to
occur on such date. For purposes of determining in clause (b) of the preceding
sentence whether the Discounted Value of Moody’s Eligible Assets at least
equals the VRDP Shares Basic Maintenance Amount, the Moody’s Discount Factors
applicable to Moody’s Eligible Assets shall be determined by reference to the
first Exposure Period (as defined in the Moody’s Guidelines) longer than the Exposure
Period then applicable to the Corporation, as described in the definition of
Moody’s Discount Factor herein.
(b)
Mandatory Redemption. (i)(i) The Corporation shall redeem, out of legally
available funds therefor in respect of shares of the Corporation and otherwise
in accordance with state law, all Outstanding Series W-7 VRDP Shares on April
7, 2052, at a redemption price equal to $100,000 per share plus accumulated
but unpaid dividends thereon (whether or not earned or declared) to, but
excluding, such date. The Corporation also shall redeem, out of legally
available funds therefor in respect of shares of the Corporation and otherwise
in accordance with state law, at a redemption price equal to $100,000 per share
plus accumulated but unpaid dividends thereon (whether or not earned or
declared) to (but excluding) the date fixed by the Board of Directors for
redemption, certain of the shares of a Series of VRDP Shares, if the Corporation
fails to have either Moody’s Eligible Assets (if Moody’s is then rating the
shares of a Series of VRDP Shares at the request of the Corporation) with a
Discounted Value, Fitch Eligible Assets (if Fitch is then rating the shares of
a Series of VRDP Shares at the request of the Corporation) with a Discounted
Value, or Other Rating Agency Eligible Assets (if any Other Rating Agency is
then rating the shares of a Series of VRDP Shares at the request of the Corporation)
with a Discounted Value greater than or equal to the VRDP Shares Basic
Maintenance Amount, or fails to maintain the Minimum VRDP Shares Asset Coverage
in accordance with these Articles Supplementary, and such failure is not cured
on or before the VRDP Shares Basic Maintenance Cure Date or the Minimum VRDP
Shares Asset Coverage Cure Date, as the case may be. In the event of a failure
by the Corporation to have Rating Agency Eligible Assets with a Discounted
Value greater than or equal to the VRDP Shares Basic Maintenance Amount, if
then applicable, the Corporation may seek to cure such failure on or prior to
the VRDP Shares Basic Maintenance Cure Date by complying with the requirements
of the Rating Agency or Rating Agencies, if any, then rating shares of such
Series of VRDP Shares at the request of the Corporation as in effect at the
time of such failure. The number of VRDP Shares to be redeemed shall be equal
to the lesser of (A) the minimum number of VRDP 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
applicable Cure Date, would result in the Corporation’s (x) having each of
Moody’s Eligible Assets (if Moody’s is then rating shares of a Series of VRDP
Shares at the request of the Corporation) with a Discounted Value, Fitch
Eligible Assets (if Fitch is then rating shares of a Series of VRDP Shares at
the request of the Corporation) with
a Discounted
Value and Other Rating Agency Eligible Assets (if any Other Rating Agency is
then rating shares of a Series of VRDP Shares at the request of the Corporation)
with a Discounted Value greater than or equal to the VRDP Shares Basic
Maintenance Amount and (y) maintaining the Minimum VRDP Shares Asset Coverage
on the applicable Cure Date (provided, however, that, if there is no such
minimum number of VRDP Shares and other Preferred Shares the redemption or
retirement of which would have such result, all VRDP Shares and Preferred
Shares then outstanding shall be redeemed), and (B) the maximum number of VRDP
Shares, together with all other Preferred Shares subject to redemption or
retirement, that can be redeemed out of legally available funds therefor in
respect of shares of the Corporation and in accordance with the Charter and
applicable law. In determining the VRDP Shares required to be redeemed in
accordance with the foregoing, the Corporation shall allocate the number
required to be redeemed to satisfy the VRDP Shares Basic Maintenance Amount or
the Minimum VRDP Shares Asset Coverage, as the case may be, pro rata among VRDP
Shares and other Preferred Shares (and, then, pro rata among each Series of
VRDP Shares) subject to redemption or retirement. The Corporation shall effect
such redemption on the date fixed by the Corporation therefor, which date shall
not be earlier than ten (10) days nor later than forty (40) days after the
applicable Cure Date, except that if the Corporation does not have legally
available funds for the redemption of all of the required number of VRDP Shares
and other Preferred Shares which are subject to redemption or retirement or the
Corporation otherwise is unable as a result of applicable law to effect such
redemption on or prior to forty (40) days after the applicable Cure Date, the Corporation
shall redeem those VRDP 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. Except in the case of a Failed Remarketing Condition-Purchased VRDP
Shares Redemption, as described below, if fewer than all of the Outstanding
shares of a Series of VRDP Shares are to be redeemed pursuant to this paragraph
(b), the number of shares of a Series of VRDP Shares to be redeemed shall be
redeemed pro rata, by lot or other fair method as determined by the Corporation’s
Board of Directors from the Holders of VRDP Shares in proportion to the number
of shares of such Series of VRDP Shares held by such Holders.
(ii)
(A) In
accordance with these Articles Supplementary and if then required pursuant to
the Fee Agreement, if the Liquidity Provider acquires any VRDP Shares pursuant
to the Purchase Obligation and continues to be the beneficial owner for federal
income tax purposes of such Purchased VRDP Shares for a continuous period of
six (6) months during which such Purchased VRDP Shares are tendered for
Remarketing on each Business Day in accordance with the Related Documents but
cannot be successfully remarketed pursuant to such Remarketings (i.e., a Failed
Remarketing Condition—Purchased VRDP Shares shall have occurred and be
continuing for such period of time with respect to such Purchased VRDP Shares),
the Corporation shall effect a Failed Remarketing Condition-Purchased VRDP
Shares Redemption out of legally available funds for the redemption of the
Purchased VRDP Shares that are subject to the Failed Remarketing
Condition--Purchased VRDP Shares Redemption and in accordance with any other
applicable law restrictions that apply to redemptions of shares; provided,
that, as of the date of redemption: (i) to the extent any VRDP Shares are
Outstanding and held by Persons other than the Liquidity Provider, the Purchase
Obligation of the Liquidity Provider whose VRDP Shares are subject to the
Failed Remarketing Condition-Purchased VRDP Shares Redemption (i.e., Bank of
America, N.A., or any successor or permitted assign)
remains in effect to the extent required by, and in accordance with, the VRDP
Shares Purchase Agreement with Bank of America, N.A., or any successor or
permitted assign, and (ii) to the extent (a) any VRDP Shares are Outstanding
and held by Persons other than the Liquidity Provider and (b) the Purchase
Obligation of the Liquidity Provider whose VRDP Shares are subject to the
Failed Remarketing Condition-Purchased VRDP Shares Redemption (i.e., Bank of
America, N.A., or any successor or permitted assign) remains in effect to the
extent required by, and in accordance with, the VRDP Shares Purchase Agreement
with Bank of America, N.A., or any successor or permitted assign, the Liquidity
Provider whose VRDP Shares are subject to the Failed Remarketing
Condition—Purchased VRDP Shares Redemption (i.e., Bank of America, N.A., or any
successor or permitted assign) shall have made written affirmation to the Corporation
not later than the Business Day immediately preceding the Redemption Date to
the effect that the Liquidity Provider is in compliance with the Purchase
Obligation in accordance with its terms. Notwithstanding the foregoing proviso,
any failure or delay by the Liquidity Provider whose VRDP Shares are subject to
the Failed Remarketing Condition-Purchased VRDP Shares Redemption (i.e., Bank
of America, N.A., or any successor or permitted assign) to deliver the
affirmation referred to in the foregoing proviso shall not relieve the Corporation
of its obligation to effectuate a Failed Remarketing Condition-Purchased VRDP
Shares Redemption and shall only result in a delay by the Corporation to
effectuate a Failed Remarketing Condition-Purchased VRDP Shares Redemption
until one (1) Business Day following the date that such Liquidity Provider
delivers such affirmation or such affirmation is no longer required. The
six-month holding period for Purchased VRDP Shares acquired and continuously
held as a result of a continuing Failed Remarketing Condition-Purchased VRDP
Shares shall be determined by the Corporation on a first-in, first-out basis.
The Corporation shall effect a Failed Remarketing Condition-Purchased VRDP
Shares Redemption on the Redemption Date fixed by the Corporation therefor,
which date shall not be later than three (3) Business Days after the expiration
of the six-month period, except that if the Corporation does not have legally
available funds for the redemption of all of the required number of Purchased
VRDP Shares which are subject to the Failed Remarketing Condition-Purchased
VRDP Shares Redemption or the Corporation otherwise is unable as a result of
applicable law restrictions that apply to redemptions of shares to effect such
redemption on or prior to three (3) Business Days after the expiration of the
six-month period, the Corporation shall redeem those Purchased VRDP Shares
which it was unable to redeem on the earliest practicable date on which it is
able to effect such redemption out of legally available funds in respect of
shares of the Corporation and in accordance with applicable law restrictions
that apply to redemptions of shares.
(B)
Upon the occurrence and
continuance of a Failed Remarketing Condition-Purchased VRDP Shares with
respect to any VRDP Shares, by the fifth (5th) Business Day following delivery
of notice thereof from the Liquidity Provider in accordance with Section
7.08(c) of the Fee Agreement, the Corporation shall cause the Custodian to
segregate, by means of appropriate identification on its books and records or
otherwise in accordance with the
Custodian’s normal
procedures, from the other assets of the Corporation (a “Liquidity Account”)
Liquidity Account Investments with a Market Value equal to at least 110% of the
Liquidation Preference of such Purchased VRDP Shares. If, while the Failed
Remarketing Condition-Purchased VRDP Shares with respect to such Purchased VRDP
Shares is continuing, the aggregate Market Value of the Liquidity Account Investments
included in the Liquidity Account for such Purchased VRDP Shares as of the
close of business on any Business Day is less than 110% of the Liquidation
Preference of such Purchased VRDP Shares, then the Corporation shall cause the
Custodian and the Investment Adviser to take all such necessary action,
including segregating additional assets of the Corporation as Liquidity Account
Investments, so that the aggregate Market Value of the Liquidity Account
Investments included in the Liquidity Account for such Purchased VRDP Shares is
at least equal to 110% of the Liquidation Preference of such Purchased VRDP
Shares not later than the close of business on the next succeeding Business
Day. With respect to assets of the Corporation segregated as Liquidity Account
Investments, the Investment Adviser, on behalf of the Corporation, shall be
entitled to instruct the Custodian with a copy to the Liquidity Provider on any
date to release any Liquidity Account Investments with respect to any Purchased
VRDP Shares from such segregation and to substitute therefor other Liquidity
Account Investments, so long as (x) the assets of the Corporation segregated as
Liquidity Account Investments with respect to such Purchased VRDP Shares at the
close of business on such date have a Market Value equal to at least 110% of
the Liquidation Preference of such Purchased VRDP Shares and (y) the assets of
the Corporation designated and segregated as Deposit Securities at the close of
business on such date have a Market Value equal to at least the Liquidity
Requirement (if any) determined in accordance with paragraph (C) below with
respect to such Purchased VRDP Shares for such date. The Corporation shall
cause the Custodian not to permit any lien, security interest or encumbrance to
be created or permitted to exist on or in respect of any Liquidity Account
Investments included in the Liquidity Account for any Purchased VRDP Shares,
other than liens, security interests or encumbrances arising by operation of
law and any lien of the Custodian with respect to the payment of its fees or
repayment for its advances. Notwithstanding anything expressed or implied
herein to the contrary, the assets of the Liquidity Account shall continue to
be assets of the Corporation subject to the interests of all creditors and stockholders
of the Corporation.
(C)
Subject to notice having been
received as referred to in paragraph (B) above, the Market Value of the Deposit
Securities held in the Liquidity Account for any Purchased VRDP Shares, from
and after the day (or if such day is not a Business Day, the next succeeding
Business Day) preceding the expiration of the six-month period for the Failed
Remarketing Condition-Purchased VRDP Shares applicable to such Purchased VRDP
Shares (which, for the avoidance of doubt, may result in multiple six (6) month
periods, each in respect of a Failed Remarketing Condition-Purchased VRDP
Shares in respect of applicable Purchased VRDP Shares) specified in the table
set forth below, shall not be less than the percentage of the Liquidation
Preference for such Purchased VRDP Shares set forth below opposite such day
(the “Liquidity Requirement”), but in all cases subject to the cure provisions
of paragraph (D) below:
Number of Days*
Preceding the Six Month Anniversary
of Liquidity Provider’s Purchase
|
Value of Deposit Securities
as Percentage of Liquidation
Preference
|
150
120
90
60
30
|
20%
40%
60%
80%
100%
|
*
Or if such day is not a Business Day, the next succeeding Business Day
(D)
If the aggregate Market Value of
the Deposit Securities included in the Liquidity Account for any Purchased VRDP
Shares as of the close of business on any Business Day is less than the
Liquidity Requirement in respect of such Purchased VRDP Shares for such
Business Day, then the Corporation shall cause the segregation of additional or
substitute Deposit Securities in respect of the Liquidity Account for such
Purchased VRDP Shares, so that the aggregate Market Value of the Deposit
Securities included in the Liquidity Account for such Purchased VRDP Shares is
at least equal to the Liquidity Requirement for such Purchased VRDP Shares not
later than the close of business on the next succeeding Business Day.
(E)
The Deposit Securities included in
the Liquidity Account for any Purchased VRDP Shares may be applied by the Corporation,
in its discretion, towards payment of the Redemption Price for such Purchased
VRDP Shares. Upon the earlier to occur of (x) the successful remarketing of the
Purchased VRDP Shares or (y) the deposit by the Corporation with the Tender and
Paying Agent with arrangements satisfactory to the Liquidity Provider of
Deposit Securities having an initial combined Market Value sufficient to effect
the redemption of such Purchased VRDP Shares on the Redemption Date for such
Purchased VRDP Shares, the requirement of the Corporation to maintain a
Liquidity Account for such Purchased VRDP Shares as contemplated by this
Section 10(b)(ii) shall lapse and be of no further force and effect.
(F)
The provisions of paragraphs (A)
through (E) of this Section 10(b)(ii) may be amended by the Board of Directors,
by resolution duly adopted, without stockholder approval in order to conform to
the terms of the Fee Agreement or as otherwise necessary or desirable in the
judgment of the Board of Directors, provided that the Board of Directors
receives the prior written consent of the Liquidity Provider and written
confirmation from each Rating Agency, as applicable, then rating shares of a
Series of VRDP Shares at the request of the Corporation that any such
amendments would not adversely affect the rating then assigned by such Rating
Agency to such Series of VRDP Shares.
(iii)
At least six (6) months prior to
the scheduled mandatory Redemption Date April 7, 2052 specified in Section
10(b)(i) above, if any Series W-7 VRDP Shares then remain Outstanding, the Corporation
shall cause the Custodian to segregate in a Liquidity Account (but without
duplication of any Liquidity Account then in effect pursuant to Section
10(b)(ii) above), by means of appropriate identification on its books and
records or otherwise in accordance with the Custodian’s normal procedures, from
the other assets of the Corporation, Liquidity Account Investments with a
Market Value equal to at least 110% of the Liquidation Preference of the then
Outstanding Series W-7 VRDP Shares. The Corporation shall maintain such
Liquidity Account in accordance with Section 10(b)(ii)(B), (C) and (D) above
and comply with the requirements set forth therein with respect
to Liquidity Account Investments and the Liquidity
Requirement; provided, that for purposes of this Section 10(b)(iii) all
references therein to Purchased VRDP Shares shall be deemed to be to all
Outstanding Series W-7 VRDP Shares, all references therein to the Failed
Remarketing Condition-Purchased VRDP Shares or the related six-month period
shall be deemed to be to the six-month period preceding the scheduled mandatory
Redemption Date of April 7, 2052, and the references to notice by the Liquidity
Provider shall not be applicable. The Deposit Securities included in the
Liquidity Account for the Outstanding Series W-7 VRDP Shares may be applied by
the Corporation, in its discretion, towards payment of the Redemption Price for
the Outstanding Series W-7 VRDP Shares. Upon the deposit by the Corporation
with the Tender and Paying Agent with arrangements satisfactory to the
Liquidity Provider of Deposit Securities having an initial combined Market
Value sufficient to effect the redemption of the Outstanding Series W-7 VRDP
Shares on April 7, 2052 Redemption Date for the Outstanding Series W-7 VRDP
Shares, the requirement of the Corporation to maintain a Liquidity Account for
the Outstanding Series W-7 VRDP Shares as contemplated by this Section
10(b)(iii) shall lapse and be of no further force and effect.
(c)
Notice of Redemption. If the Corporation shall determine or be required to
redeem, in whole or in part, shares of a Series of VRDP Shares pursuant to
paragraph (a) or (b)(i) of this Section 10, the Corporation will send a notice
of redemption (the “Notice of Redemption”), by Electronic Means (or by
first-class mail, postage prepaid, in the case where the shares of such Series
of VRDP Shares are in physical form outside the book-entry system of the
Securities Depository), to Holders thereof and the Liquidity Provider or, in
the case of a redemption pursuant to paragraph (b)(ii) of this Section 10, only
to the Liquidity Provider, or request the Tender and Paying Agent, on behalf of
the Corporation to promptly do so by Electronic Means (or by first-class mail,
postage prepaid, in the case where the shares of such Series of VRDP Shares are
in physical form outside the book-entry system of the Securities Depository) so
long as the Notice of Redemption is furnished by the Corporation to the Tender
and Paying Agent in electronic format at least five (5) Business Days prior to
the date a Notice of Redemption is required to be delivered to the Holders,
unless a shorter period of time shall be acceptable to the Tender and Paying
Agent. A Notice of Redemption shall be sent to Holders not less than ten (10)
days prior to the date fixed for redemption in such Notice of Redemption (the
“Redemption Date”). Each such Notice of Redemption shall state: (i) the Redemption
Date; (ii) the number of shares of such Series of VRDP Shares to be redeemed
and the Series thereof; (iii) the CUSIP number for the VRDP Shares of such
Series; (iv) the Redemption Price; (v) the place or places where the
certificate(s), if any, for such VRDP Shares (properly endorsed or assigned for
transfer, if the Board of Directors requires and the Notice of Redemption
states) are to be surrendered for payment of the Redemption Price; (vi) that
dividends on the shares of such Series of VRDP Shares to be redeemed will cease
to accumulate from and after such Redemption Date; and (vii) the provisions of these
Articles Supplementary under which such redemption is made. If fewer than all
shares of a Series of VRDP Shares held by any Holder are to be redeemed, the
Notice of Redemption delivered to such Holder shall also specify the number of
shares of such Series of VRDP Shares to be redeemed from such Holder. The Corporation
may provide in any Notice of Redemption relating to an optional redemption
contemplated to be effected pursuant to these Articles Supplementary that such
redemption is subject to one or more conditions
precedent
not otherwise expressly stated herein and that the Corporation shall not be
required to effect such redemption unless each such condition has been
satisfied at the time or times and in the manner specified in such Notice of
Redemption. No defect in the Notice of Redemption or delivery thereof shall
affect the validity of redemption proceedings, except as required by applicable
law.
(d)
No Redemption Under Certain
Circumstances. Notwithstanding the
provisions of paragraphs (a) or (b) of this Section 10, if any dividends on
shares of a Series of VRDP Shares (whether or not earned or declared) are in
arrears, no shares of such Series shall be redeemed unless all Outstanding
shares of such Series are simultaneously redeemed, and the Corporation shall
not otherwise purchase or acquire any shares of such Series; provided,
however, that the foregoing shall not prevent the purchase or acquisition
of Outstanding shares of a Series of VRDP Shares pursuant to the successful
completion of an otherwise lawful purchase or exchange offer made on the same
terms to Holders of all Outstanding shares of such Series of VRDP Shares.
(e)
Absence of Funds Available for
Redemption. To the extent that any
redemption for which a Notice of Redemption has been provided is not made by
reason of the absence of legally available funds therefor in respect of shares
of the Corporation and in accordance with the Charter and applicable law, such
redemption shall be made as soon as practicable to the extent such funds become
available. A failure to redeem shares of a Series of VRDP Shares shall be
deemed to exist at any time after the date specified for redemption in a Notice
of Redemption when the Corporation shall have failed, for any reason
whatsoever, to deposit in trust with the Tender and Paying Agent the Redemption
Price with respect to any shares for which such Notice of Redemption has been
sent; provided, however, that the foregoing shall not
apply in the case of the Corporation’s failure to deposit in trust with the
Tender and Paying 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 Corporation
may not have redeemed shares of a Series of VRDP Shares for which a Notice of
Redemption has been provided, dividends may be declared and paid on shares of a
Series of VRDP Shares and shall include those shares of such Series of VRDP
Shares for which a Notice of Redemption has been provided.
(f)
Tender and Paying Agent as Director
of Redemption Payments by Corporation.
All moneys paid to the Tender and Paying Agent for payment of the Redemption
Price of shares of a Series of VRDP Shares called for redemption shall be held
in trust by the Tender and Paying 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 provided
pursuant to paragraph (c) of this Section 10, the Corporation shall irrevocably
(except to the extent set forth below in this paragraph (g)) deposit with the
Tender and Paying Agent, no later than 12:00 noon, New York City time, on a
Business Day not less than ten (10) Business Days preceding the Redemption Date
specified in such notice, Deposit Securities in an aggregate amount equal to
the Redemption Price to be paid on the Redemption Date in respect of any shares
of a Series of VRDP Shares that
are subject to such
notice. Provided a Notice of Redemption has been provided pursuant to paragraph
(c) of this Section 10, upon the deposit with the Tender and Paying Agent of
Deposit Securities in an amount sufficient to redeem the shares of a Series of
VRDP Shares that are the subject of such notice, dividends on such shares of a
Series of VRDP Shares shall cease to accumulate as of the Redemption Date and
shares of a Series of VRDP Shares shall no longer be deemed to be Outstanding,
except as noted below with respect to the VRDP Shares Purchase Agreement, for
any purpose, and all rights of the Holders of the shares of a Series of VRDP
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 paragraph (e)(i) of Section 2 of this
Part I and in Section 3 of Part I of these Articles Supplementary. Upon
surrender in accordance with the Notice of Redemption of the certificates for
any shares of a Series of VRDP Shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the
Notice of Redemption shall so state), the Redemption Price shall be paid by the
Tender and Paying Agent to the Holders of shares of a Series of VRDP 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 Corporation
shall be entitled to receive from the Tender and Paying Agent, promptly after
the date fixed for redemption, any cash or other Deposit Securities deposited
with the Tender and Paying Agent in excess of (i) the aggregate Redemption
Price of the shares of a Series of VRDP Shares called for redemption on such
date and (ii) all other amounts to which Holders of shares of a Series of VRDP
Shares called for redemption may be entitled. Any funds so deposited that are
unclaimed at the end of ninety (90) days from such redemption date shall, to
the extent permitted by law, be repaid to the Corporation, after which time the
Holders of shares of a Series of VRDP Shares so called for redemption may look
only to the Corporation for payment of the Redemption Price and all other
amounts to which they may be entitled. The Corporation shall be entitled to
receive, from time to time after the date fixed for redemption, any interest on
the funds so deposited. Notwithstanding the foregoing, shares of a Series of
VRDP Shares will be deemed to be Outstanding for purposes of the VRDP Shares
Purchase Agreement until redeemed by the Corporation.
(h)
Compliance With Applicable Law. In effecting any redemption pursuant to this Section
10, the Corporation shall use its best efforts to comply with all applicable
conditions precedent to effecting such redemption under the 1940 Act and any
applicable Maryland or other state law, but shall effect no redemption except
in accordance with the 1940 Act and any applicable Maryland or other state law.
(i)
Only Whole Shares of a Series
of VRDP Shares May Be Redeemed. In
the case of any redemption pursuant to this Section 10, only whole shares of a
Series of VRDP Shares shall be redeemed, and in the event that any provision of
the Charter would require redemption of a fractional share, the Remarketing
Agent shall be authorized to round up so that only whole shares are redeemed.
(j)
Modification of Redemption
Procedures. Notwithstanding the
foregoing provisions of this Section 10, the Corporation may, in its sole
discretion, modify the procedures set forth above with respect to notification
of redemption of VRDP Shares, provided that such modification does not
materially and adversely affect the Holders of the VRDP Shares or cause the Corporation
to violate any law, rule or regulation, or to in any way alter the obligations
of the
Tender and Paying Agent without its prior
written consent. Furthermore, if in the sole discretion of the Board of Directors,
after consultation with counsel, modification of the foregoing redemption
provisions (x) are permissible under the rules and regulations or interpretations
of the SEC and under other applicable law and (y) would not cause a material
risk as to the treatment of the VRDP Shares as equity for U.S. federal income
tax purposes, the Board of Directors, without stockholder approval, by
resolution and with the prior written consent of the Liquidity Provider may
modify such redemption procedures.
11.
Liquidation Rights.
(a)
Ranking. The shares of a Series of VRDP Shares shall rank on
a parity with each other, with shares of any other Series of VRDP Shares 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 Corporation.
(b)
Distributions Upon Liquidation. Upon the dissolution, liquidation or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the Holders
of VRDP Shares then Outstanding shall be entitled to receive and to be paid out
of the assets of the Corporation legally available for distribution to its stockholders
and otherwise in accordance with applicable state law, before any payment or
distribution shall be made on the Common Shares or on any other class of shares
of the Corporation ranking junior to the VRDP 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 dividends thereon
(whether or not earned or declared) accumulated but unpaid to (but not
including) the date of final distribution in same day funds, together with any
payments required to be made pursuant to Section 3 of Part I of these Articles
Supplementary in connection with the liquidation of the Corporation. After the
payment to the Holders of the VRDP Shares of the full preferential amounts
provided for in this paragraph (b), the Holders of the VRDP Shares as such
shall have no right or claim to any of the remaining assets of the Corporation.
(c)
Pro Rata Distributions. In the event the assets of the Corporation available
for distribution to the Holders of the VRDP Shares upon any dissolution,
liquidation or winding up of the affairs of the Corporation, 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 11, 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 VRDP 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 VRDP 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 VRDP
Shares with respect to the distribution of assets upon dissolution, liquidation
or winding up of the affairs of the Corporation, after payment shall have been
made in full to the Holders of the VRDP Shares as provided in paragraph (b) of
this Section 11, but not prior thereto, any other series or class or classes
of shares ranking junior to the VRDP Shares with respect to the distribution of
assets
upon dissolution, liquidation or winding up of
the affairs of the Corporation 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 VRDP 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 Corporation, nor the
merger, consolidation or reorganization of the Corporation into or with any
business or statutory trust, corporation or other entity nor the merger,
consolidation or reorganization of any business or statutory trust, corporation
or other entity into or with the Corporation shall be a dissolution,
liquidation or winding up, whether voluntary or involuntary, for the purposes
of this Section 11.
12.
Purchase Obligation.
As long as shares of any Series of VRDP Shares are Outstanding, the Corporation
shall maintain a VRDP Shares Purchase Agreement providing for a Purchase
Obligation with a Liquidity Provider with short-term debt ratings in one of the
two highest ratings categories from the Requisite NRSROs on an ongoing basis to
the extent that the Corporation can do so on a commercially reasonable basis as
determined in the sole discretion of the Board of Directors. If the Corporation
maintains a VRDP Shares Purchase Agreement providing a Purchase Obligation, the
provisions herein relating to the Liquidity Provider shall be operative and the
following shall apply:
(a)
The Corporation shall notify, or
cause the Tender and Paying Agent to notify, Holders by Electronic Means, or by
first-class mail, postage prepaid, in the case in which shares of a Series of VRDP
Shares are in physical form outside the book-entry system of the Securities
Depository, (A) in the event of a Mandatory Tender Event or Mandatory Purchase
Event, (B) upon at least seven days’ prior notice in the event that there is a
substitute Liquidity Provider (including, but not limited to, as to the
Liquidity Provider, its consolidation, amalgamation with, or merger with and
into, another entity, or the transfer of all or substantially all of the
Liquidity Provider’s assets to another entity, (C) any downgrade in the
short-term or long-term preferred stock rating of the Series of VRDP Shares by
an NRSRO then rating shares of such Series of VRDP Shares at the request of the
Corporation or (D) any downgrade in the short-term or long-term rating of the
Liquidity Provider by an NRSRO then rating the shares of such Series of VRDP
Shares at the request of the Corporation and such Liquidity Provider.
(b)
In the event of a Failed
Remarketing Condition, the Corporation will require in the Tender and Paying
Agent Agreement that the Tender and Paying Agent will notify the Corporation
and Holders by telephone or Electronic Means, or by first-class-mail, postage
prepaid, in the case in which shares of a Series of VRDP Shares are in physical
form outside the book-entry system of the Securities Depository, of such Failed
Remarketing Condition.
(c)
Each share of a Series of VRDP
Shares shall be subject to Tender to the Tender and Paying Agent for
Remarketing on the related Purchase Date or, in the event (i) no Remarketing occurs
or (ii) pursuant to an attempted Remarketing shares remain unsold and the
Remarketing Agent does not purchase for its own account the unsold shares of a
Series of VRDP Shares tendered to the Tender and Paying Agent for Remarketing (provided
that the Remarketing
Agent may seek to sell such
shares of a Series of VRDP Shares in a subsequent Remarketing prior to the
Purchase Date) to the Liquidity Provider for purchase on such Purchase Date
pursuant to a Final Notice of Purchase. If there is no Tender and Paying Agent
or the Tender and Paying Agent does not perform such obligation pursuant to the
VRDP Shares Purchase Agreement, Beneficial Owners and their Agent Members shall
have the right to tender their shares of a Series of VRDP Shares directly to
the Liquidity Provider pursuant to a Final Notice of Purchase. In the event
there is no Tender and Paying Agent or for any reason the Tender and Paying
Agent does not perform its obligations under the VRDP Shares Purchase
Agreement, the Corporation (i) upon becoming aware thereof, shall promptly
notify the Liquidity Provider, the Remarketing Agent and Holders by Electronic
Means of such event, and (ii) so long as such event is continuing, shall use
its best efforts to direct and request the Remarketing Agent to forward,
concurrently with the delivery thereof to the Liquidity Provider or as promptly
as practicable thereafter, any Remarketing Notice to each Beneficial Owner or
Holder tendering shares of the Series of VRDP Shares that are the subject of
such notice.
(d)
The Corporation will require in
the Tender and Paying Agent Agreement that, pursuant to a Tender, shares of a
Series of VRDP Shares that are not sold in a Remarketing will be tendered by
the Tender and Paying Agent to the Liquidity Provider for payment of the
Purchase Price on the Purchase Date pursuant to the VRDP Shares Purchase
Agreement.
(e)
Except as set forth in Section
10(b) of Part I of these Articles Supplementary in connection with a mandatory
redemption of shares of a Series of VRDP Shares, the Corporation shall have no
obligation to purchase shares of a Series of VRDP Shares acquired by the
Liquidity Provider pursuant to the VRDP Shares Purchase Agreement or otherwise.
(f)
Shares of a Series of VRDP Shares
are subject to Mandatory Purchase by the Liquidity Provider upon the occurrence
of a Mandatory Purchase Event. So long as shares of such Series of VRDP Shares
are in book-entry form and held through the Securities Depository, any
Mandatory Purchase will be effected automatically through the book-entry system
of the Securities Depository, without any action required on the part of the
Holders or Beneficial Owners. Promptly following the occurrence of a Mandatory
Purchase Event, and in any event within three (3) Business Days thereafter, the
Corporation, or the Tender and Paying Agent at the direction of the Corporation
(provided, that the Tender and Paying Agent may require up to two (2)
Business Days prior notification by Electronic Means by the Corporation), shall
provide a Mandatory Purchase Notice by Electronic Means to Holders and the
Liquidity Provider, specifying a Mandatory Purchase Date for all Outstanding
shares of such Series of VRDP Shares. The Mandatory Purchase Date shall not be
later than seven (7) days following the date a Mandatory Purchase Notice is
sent to Holders by Electronic Means, and in any event shall be not later than
the Business Day immediately preceding the termination of the VRDP Shares
Purchase Agreement. Any notice given in respect of a Mandatory Purchase under these
Articles Supplementary shall be conclusively presumed to have been duly given,
whether or not the Holders receive such notice. Upon the occurrence of a
Mandatory Purchase Event, all Outstanding shares of a Series of VRDP Shares
automatically shall be subject to Mandatory Purchase by the Liquidity Provider
at the Purchase Price on the Mandatory Purchase Date, including any shares of
such Series of VRDP Shares tendered pursuant to an Optional Tender or Mandatory
Tender for which the Purchase Date has not yet occurred.
(g)
In the event shares of a Series of
VRDP Shares are issued in certificated form and a Holder fails to deliver such
shares of such Series of VRDP Shares to which a Mandatory Purchase relates, on
or prior to the Mandatory Purchase Date, the Holder of shares of such Series of
VRDP Shares will not be entitled to any payment (including any accumulated but
unpaid dividends thereon, whether or not earned or declared) other than the
Purchase Price of such undelivered VRDP Shares as of the scheduled Purchase
Date. Any such undelivered shares of a Series of VRDP Shares will be deemed to
be delivered to the Tender and Paying Agent, and the Tender and Paying Agent
will place stop-transfer orders against the undelivered shares of such Series
of VRDP Shares. Any moneys held by the Tender and Paying Agent for the purchase
of undelivered shares of such Series of VRDP Shares shall be held in a separate
account, shall not be invested, and shall be held for the exclusive benefit of
the Holder of such undelivered shares of such Series of VRDP Shares. The
undelivered shares of a Series of VRDP Shares shall be deemed to be no longer
Outstanding (except as to entitlement to payment of the Purchase Price), and
the Corporation will issue to the purchaser a replacement share certificate for
such shares in lieu of such undelivered shares of such Series of VRDP Shares.
(h)
The Corporation shall use its best
efforts to engage at all times a Tender and Paying Agent to perform the duties
specified in these Articles Supplementary, the Tender and Paying Agent
Agreement and the VRDP Shares Purchase Agreement with respect to the Tender and
Paying Agent.
The provisions
of paragraphs (a) through (g) of this Section 12 may be amended by the Board of
Directors, by resolution duly adopted, without stockholder approval in order to
conform to a VRDP Shares Purchase Agreement providing a Purchase Obligation.
13.
Miscellaneous.
(a)
Amendment of or Supplements to these
Articles Supplementary. Subject to
the provisions of Section 9 of Part I of these Articles Supplementary, the
Board of Directors may, by resolution duly adopted, without stockholder
approval (except as otherwise provided by these Articles Supplementary or
required by applicable law), amend or supplement these Articles Supplementary
to (1) reflect any amendments or supplements hereto which the Board of Directors
is entitled to adopt pursuant to the terms of these Articles Supplementary
without stockholder approval or (2) designate additional Series of VRDP Shares
(and terms relating thereto). Each such additional Series shall be governed by
the terms of these Articles Supplementary as so amended or supplemented.
(b)
No Fractional Shares. No fractional shares of a Series of VRDP Shares
shall be issued.
(c)
Status of VRDP Shares Redeemed,
Exchanged or Otherwise Acquired by the Corporation. Shares of a Series of VRDP shares which are
redeemed, exchanged or otherwise acquired by the Corporation shall return to
the status of authorized and unissued Preferred Shares without designation as
to series, provided, however, that any shares of a Series of VRDP
Shares which are provisionally delivered by the Corporation to or for the
account of an agent of the Corporation or to or for the account of a purchaser
of the shares of the Series of VRDP Shares,
but for
which final payment is not received by the Corporation, shall return to the
status of authorized and unissued shares of such Series of VRDP Shares.
(d)
Purchase Obligation Part of the
VRDP Shares. Each Holder and
Beneficial Owner, by virtue of acquiring shares of a Series of VRDP Shares, is
deemed to have agreed to treat the Purchase Obligation as part of the VRDP
Shares rather than as a separate property right.
(e)
Treatment of VRDP Shares as
Equity. Each Holder and Beneficial
Owner, by virtue of acquiring shares of a Series of VRDP Shares, is deemed to
have agreed to treat the VRDP Shares as equity in the Corporation for U.S.
federal income tax purposes.
(f)
Board of Directors May Resolve
Ambiguities. To the extent permitted
by applicable law, the Board of Directors may interpret or adjust the
provisions of these Articles Supplementary to resolve any inconsistency or
ambiguity or to remedy any formal defect, and may amend these Articles
Supplementary with respect to VRDP Shares prior to the issuance of such VRDP
Shares.
(g)
Headings Not Determinative. The headings contained in these Articles
Supplementary are for convenience of reference only and shall not affect the
meaning or interpretation of these Articles Supplementary.
(h)
Notices. All notices or communications, unless otherwise
specified in the By-laws of the Corporation or these Articles Supplementary,
shall be sufficiently given if in writing and delivered in person, by
Electronic Means or mailed by first-class mail, postage prepaid.
(i)
Applicable Law Restrictions. Notwithstanding anything expressed or implied to the
contrary in these Articles Supplementary, all dividends, redemptions and other
payments by the Corporation on or in respect of the VRDP Shares shall be paid
only out of legally available funds therefor in respect of shares of the Corporation
and otherwise in accordance with applicable law.
(j)
[Reserved].
(k)
Annex A Incorporated by
Reference. The Notice of Special Rate
Period attached as Annex A
hereto amends, modifies, and is a part of, these Articles Supplementary. In the
event of any conflict between the terms of Annex A and any other terms of these
Articles Supplementary during the Special Rate Period specified in Annex A, the
terms of Annex A shall govern.
PART II
1.
Remarketing Procedures.
(a)
Pursuant to an Optional Tender,
Beneficial Owners may elect to tender their VRDP Shares (in one or more shares)
for purchase at the Purchase Price on the Purchase Date designated in the
Notice of Tender (or, if such day is not a Business Day, on the next succeeding
Business Day) by an effective delivery of a Notice of Tender to the Tender and
Paying Agent.
Each Notice of Tender shall be
irrevocable (except as described below) and effective upon receipt by the
Tender and Paying Agent and shall:
(i)
be delivered by a Beneficial
Owner, directly or through its Agent Member, by email transmission (or if email
transmission shall be unavailable, by facsimile transmission), to the Tender
and Paying Agent not later than 2:00 p.m., New York City time, on any Business
Day;
(ii)
state the series and the aggregate
number of VRDP Shares to be purchased, the CUSIP number of the Series of VRDP
Shares to be purchased, and the Purchase Date and be in substantially the form
of and contain such other information specified in an exhibit to the VRDP
Shares Purchase Agreement; and
(iii)
state that the tendering
Beneficial Owner acknowledges that such Beneficial Owner is required to deliver
the VRDP Shares that are the subject of a Notice of Tender (that has not been
duly revoked as provided below) on or before 2:00 p.m., New York City time, on
the Purchase Date.
(b)
Upon receipt of a Notice of
Tender, the Tender and Paying Agent shall provide a copy of such notice to the
Liquidity Provider and the Remarketing Agent (with a copy to the Corporation)
as promptly as practicable by Electronic Means, but no later than 4:00 p.m.,
New York City time, on the date of receipt or deemed receipt.
(c)
Any Notice of Tender delivered to
the Tender and Paying Agent by a Beneficial Owner or its Agent Member after
2:00 p.m., New York City time, shall be deemed to have been received by the
Tender and Paying Agent on the next succeeding Business Day, and the Purchase
Date shall be adjusted such that the Purchase Date shall be the Business Day
next succeeding the date specified as the Purchase Date in the relevant Notice
of Tender.
(d)
The determination of the Tender
and Paying Agent as to whether a Notice of Tender has been properly delivered
pursuant to the foregoing paragraph (a) shall be conclusive and binding upon
the Beneficial Owner and its Agent Member.
(e)
(i) Shares of a
Series of VRDP Shares are subject to Mandatory Tender upon the occurrence of a
Mandatory Tender Event.
(ii)
So long as the shares of a Series
of VRDP Shares are in book-entry form and held through the Securities
Depository, any Mandatory Tender will be effected automatically through the
book-entry system of the Securities Depository, without any action required on
the part of the Holders or Beneficial Owners. Promptly following the occurrence
of a Mandatory Tender Event, and in any event within three (3) Business Days
thereafter, the Corporation, or the Tender and Paying Agent at the direction of
the Corporation (provided, that the Tender and Paying Agent may require
up to two (2) Business Days prior notification by Electronic Means by the Corporation),
shall provide a Mandatory Tender Notice by Electronic Means to the Holders, the
Remarketing Agent and the Liquidity Provider, specifying a Purchase Date for
all Outstanding shares of such Series of VRDP Shares. Any notice given in
respect of a Mandatory Tender under these
Articles
Supplementary will be conclusively presumed to have been duly given, whether or
not the Holders receive such notice.
(iii)
Upon the occurrence of a Mandatory
Tender Event, all Outstanding shares of a Series of VRDP Shares automatically
shall be subject to Mandatory Tender and delivered to the Tender and Paying
Agent for purchase on the designated Purchase Date by purchasers in the
Remarketing in the event of a successful Remarketing or otherwise by the
Liquidity Provider, including any shares of such Series of VRDP Shares
previously tendered pursuant to an Optional Tender for which the Purchase Date
has not yet occurred. In the event that shares of a Series of VRDP Shares are
issued in certificated form outside the book-entry system of the Securities
Depository and a Holder of shares of such Series of VRDP Shares fails to
deliver such shares to which a Mandatory Tender relates on or prior to the
Purchase Date, the Holder of shares of such Series of VRDP Shares shall not be
entitled to any payment (including any accumulated but unpaid dividends
thereon, whether or not earned or declared) other than the Purchase Price of
such undelivered shares of such Series of VRDP Shares as of the scheduled
Purchase Date. Any such undelivered shares of such Series of VRDP Shares will
be deemed to be delivered to the Tender and Paying Agent, and the Tender and
Paying Agent will place stop-transfer orders against the undelivered shares of
such Series of VRDP Shares. Any moneys held by the Tender and Paying Agent for
the purchase of undelivered shares of a Series of VRDP Shares will be held in a
separate account by the Tender and Paying Agent, will not be invested, and will
be held for the exclusive benefit of the Holder of such undelivered shares of
such Series of VRDP Shares. The undelivered shares of a Series of VRDP Shares
will be deemed to be no longer Outstanding (except as to entitlement to payment
of the Purchase Price), and the Corporation will issue to the purchaser a
replacement share certificate in lieu of such undelivered shares of such Series
of VRDP Shares.
(f)
A Beneficial Owner or its Agent
Member that delivered a Notice of Tender in connection with an Optional Tender
may deliver in writing by email transmission (or if email transmission shall be
unavailable, by facsimile transmission) to the Tender and Paying Agent, not
later than 10:00 a.m., New York City time, on or prior to the Business Day
immediately preceding the Purchase Date, a notice to the effect that such
Beneficial Owner wishes to revoke its election to tender some or all of the
shares of a Series of VRDP Shares that were specified in such Notice of Tender
to be purchased (a “Notice of Revocation”). Any Notice of Revocation delivered
to the Tender and Paying Agent shall be promptly delivered by Electronic Means by
the Tender and Paying Agent to the Liquidity Provider and the Remarketing Agent
(with a copy to the Corporation) by 12:00 noon, New York City time, on the
Business Day immediately preceding the relevant Purchase Date. The Remarketing
Agent (following receipt of such Notice of Revocation) shall notify the Tender
and Paying Agent and the Liquidity Provider of the number of shares of such
Series of VRDP Shares specified in such Notice of Revocation that are subject
to an agreement of sale pursuant to a Remarketing by Electronic Means not later
than 2:00 p.m., New York City time, on the Business Day immediately preceding
the Purchase Date. The Tender and Paying Agent shall contact the Remarketing
Agent by Electronic Means by 1:45 p.m., New York City time, if such
notification has not been received by such time. The Tender
and
Paying Agent shall deliver such notification to the Beneficial Owner or its
Agent Member promptly following receipt from the Remarketing Agent, and in any
event by 4:00 p.m., New York City time, on the Business Day immediately
preceding the Purchase Date. Any such Notice of Revocation shall be effective
(without further action on the part of the Beneficial Owner or its Agent
Member) as a revocation of the Optional Tender of the number of shares of such
Series of VRDP Shares specified therein as being sought to be revoked, but
(except as set forth below) only if and to the extent that the Remarketing
Agent has not entered into an agreement to sell shares of such Series of VRDP
Shares. A Notice of Revocation shall be effective as to the number of shares of
a Series of VRDP Shares specified therein as having been revoked less the
number of shares of such Series of VRDP Shares in respect of which the
Remarketing Agent has so notified the Tender and Paying Agent and the Liquidity
Provider that it has entered into an agreement of sale. Notwithstanding the
foregoing, tendered shares of a Series of VRDP Shares, if any, that remain
unsold on the related Purchase Date shall be allocated by the Remarketing Agent
to each Notice of Revocation received in respect of shares of such Series of
VRDP Shares tendered for purchase on such Purchase Date and not already
satisfied in the chronological order in which each such Notice of Revocation
was received by the Tender and Paying Agent, and each such Notice of Revocation
shall be effective only to the extent of such allocation and availability of
unsold shares of such Series of VRDP Shares.
(g)
In connection with any Special
Rate Period designated pursuant to Section 4 of Part I of these Articles
Supplementary, the Board of Directors, without the vote or consent of any
Holder of any shares of any Series of VRDP Shares but with the prior written
consent of the Liquidity Provider (except in the case of an Initial Special
Rate Period), in the Notice of Special Rate Period relating to a Series of the
VRDP Shares (other than in the case of an Initial Special Rate Period), as
delivered to the Remarketing Agent and the Liquidity Provider, may provide for
optional tender provisions relating solely to such Special Rate Period
(“Special Optional Tender Provisions”) whereby the minimum number of days’
notice required for an Optional Tender may exceed seven (7) days as specified
in the Special Optional Tender Provisions for such Special Rate Period.
(h)
The Corporation shall use its best
efforts to engage at all times a Remarketing Agent that is a nationally
recognized securities dealer with experience in remarketing variable-rate
securities to use its best efforts to find purchasers for all shares of a
Series of VRDP Shares properly tendered pursuant to a Tender.
2.
Remarketing Schedule.
(a)
In connection with any attempted
Remarketing, all tendered shares of a Series of VRDP Shares shall be remarketed
at the Purchase Price of such shares. The calculation of the Purchase Price of
the shares of such Series of VRDP Shares that are remarketed or purchased by
the Liquidity Provider shall be made by the Remarketing Agent in advance of
such Remarketing or purchase and, together with the details of the aggregate
number and Purchase Price of remarketed shares of such Series of VRDP Shares
and the aggregate number and Purchase Price of shares of such Series of VRDP
Shares to be purchased by the Liquidity Provider pursuant to the Purchase
Obligation, shall be communicated by the Remarketing Agent to the Corporation,
the Liquidity Provider and the Tender and Paying Agent by Electronic Means by
2:00 p.m., New York City time, on the Business Day immediately preceding the
Purchase Date, as described
below. The proceeds of any
sale of any remarketed shares of a Series of VRDP Shares by the Remarketing
Agent relating to tendered shares of such Series of VRDP Shares shall be used
by the Tender and Paying Agent for the purchase of the tendered shares of such
Series of VRDP Shares at the Purchase Price, and the terms of the sale will
provide for the wire transfer of such Purchase Price by the Remarketing Agent
to be received by the Tender and Paying Agent no later than 11:00 a.m., New
York City time, on the related Purchase Date for payment to the Agent Member of
the Beneficial Owner, in the case of an Optional Tender, or Holder, in the case
of a Mandatory Tender, tendering shares of such Series of VRDP Shares for sale
through the Securities Depository in immediately available funds against
delivery of the tendered shares of such Series of VRDP Shares to the Tender and
Paying Agent through the Securities Depository, the delivery of such VRDP
Shares to the Tender and Paying Agent through the Securities Depository no
later than 2:00 p.m., New York City time, on the related Purchase Date and the
re-delivery of such shares of such Series of VRDP Shares by means of “FREE”
delivery through the Securities Depository to the Remarketing Agent for
delivery to the purchaser’s Agent Member through the Securities Depository by
3:00 p.m., New York City time, on the related Purchase Date.
(b)
By 2:00 p.m., New York City time,
on the Business Day immediately preceding each Purchase Date, the Remarketing
Agent shall deliver a notice, in the form attached as Annex Ito the VRDP Shares
Remarketing Agreement, to the Tender and Paying Agent and the Liquidity
Provider (and, at the direction of the Corporation, concurrently therewith or
as promptly as practicable thereafter, to each Beneficial Owner or Holder
tendering VRDP Shares that are the subject of such notice) (a “Remarketing
Notice”), by Electronic Means, that sets forth the number of shares of the
Series of VRDP Shares, if any, that it successfully remarketed for purchase on
such Purchase Date and the aggregate Purchase Price of such sold shares of the
Series of VRDP Shares and the number of shares of such Series of VRDP Shares,
if any, not successfully remarketed for purchase on such Purchase Date and the
aggregate Purchase Price of such unsold shares of the Series of VRDP Shares to
be paid by the Liquidity Provider. If the Remarketing Notice states that the
Remarketing Agent has not successfully remarketed all of the shares of the
Series of VRDP Shares to be purchased on such Purchase Date, the Tender and
Paying Agent shall promptly, and in any event not later than 4:00 p.m., New
York City time, on such Business Day, deliver by Electronic Means to the
Liquidity Provider (with a copy to the Corporation) a Preliminary Notice of
Purchase that, subject to delivery of the Final Notice of Purchase on the
Purchase Date described below, provides for the purchase by the Liquidity
Provider of the number of such shares of the Series of VRDP Shares that the
Remarketing Agent stated in the Remarketing Notice as not having been
successfully remarketed, including the aggregate Purchase Price of such shares
of the Series of VRDP Shares, as calculated by the Remarketing Agent. If the
Remarketing Notice states that the Remarketing Agent has not successfully
remarketed all of the shares of the Series of VRDP Shares to be purchased on
such Purchase Date (or if proceeds from a Remarketing for any tendered shares
of the Series of VRDP Shares have not been received for any reason by the
Tender and Paying Agent by 11:00 a.m., New York City time, on the Purchase
Date), the Tender and Paying Agent shall deliver by Electronic Means to the
Liquidity Provider (with a copy to the Corporation) by 12:00 noon, New York
City time, on such Purchase Date a Final Notice of Purchase that states the
number of shares of the Series of VRDP Shares required to be purchased by the
Liquidity Provider. For purposes of the Final Notice of Purchase, any tendered
shares of the Series of VRDP Shares for which proceeds from a Remarketing have
not been received for any reason by the Tender and
Paying
Agent by 11:00 a.m., New York City time, on the Purchase Date (other than VRDP
Shares owned by the Remarketing Agent or Liquidity Provider and tendered for
Remarketing), shall be treated as not having been successfully remarketed and
shall be required to be purchased by the Liquidity Provider. Except for
manifest error, the payment obligation of the Liquidity Provider shall equal
the Purchase Price of the shares of the Series of VRDP Shares stated in the
Final Notice of Purchase delivered to the Liquidity Provider as being required
to be purchased by the Liquidity Provider.
(c)
The Liquidity Provider shall, no
later than 2:00 p.m., New York City time, on a Purchase Date for any shares of
a Series of VRDP Shares, wire transfer the aggregate Purchase Price of all
shares of such Series of VRDP Shares in respect of which Final Notices of
Purchase have been delivered to it for purchase of shares of such Series of
VRDP Shares on such date, as follows: (i) in the case of a Final Notice of
Purchase delivered by the Tender and Paying Agent, by wire transfer, in immediately
available funds, to the account of the Tender and Paying Agent specified by the
Tender and Paying Agent in any such Final Notice of Purchase; and (ii) in the
event there is no Tender and Paying Agent or for any reason the Tender and
Paying Agent does not perform its obligations under the VRDP Shares Purchase
Agreement and the Liquidity Provider has received a Remarketing Notice that
such shares of such Series of VRDP Shares have not been the subject of an
agreement of sale in a Remarketing and has received written notice from the Corporation
that there is no Tender and Paying Agent or that the Tender and Paying Agent
does not intend to perform its obligations under the VRDP Shares Purchase
Agreement, in the case of a Final Notice of Purchase delivered by a Beneficial
Owner or its Agent Member, in the case of an Optional Tender, or by a Holder,
in the case of a Mandatory Tender, by payment against delivery of the shares of
such Series of VRDP Shares that are the subject of any such Final Notice of
Purchase, through means of the Securities Depository in the case of shares of
such Series of VRDP Shares in the form of global securities.
(d)
Upon receipt by the Tender and
Paying Agent from the Beneficial Owner or its Agent Member, in the case of an
Optional Tender, or from the Holder, in the case of a Mandatory Tender, of
tendered shares of a Series of VRDP Shares and the payment by the Tender and
Paying Agent to such Beneficial Owner or its Agent Member, or such Holder, as
the case may be, of the Purchase Price therefor on the applicable Purchase
Date, the Tender and Paying Agent shall deliver to the Liquidity Provider, by
means of “FREE” delivery through the system of the Securities Depository,
shares of such Series of VRDP Shares in satisfaction of the Liquidity Provider’s
Purchase Obligation on such Purchase Date. Any funds paid by the Liquidity
Provider and held in the account of the Tender and Paying Agent for the payment
of the Purchase Price shall be held in trust (i) in the case of an Optional
Tender, on the Purchase Date, for the benefit of the tendering Beneficial
Owners or their Agent Members until 2:00 p.m., New York City time, on the
Purchase Date and, after such time, in trust for the benefit of the Liquidity
Provider, for payment of the Purchase Price upon delivery of the shares of such
Series of VRDP Shares or, with respect to shares of such Series of VRDP Shares
that are not delivered, for return to the Liquidity Provider upon its request
and (ii) in the case of a Mandatory Tender, for the benefit of the tendering
Holders until delivery of the shares of such Series of VRDP Shares by the
tendering Holders against payment therefor. Any funds paid by the Remarketing
Agent and held in an account of the Tender and Paying Agent for the payment of
the Purchase Price in connection with a Remarketing shall be held in trust (i)
in the case of an Optional Tender, on the Purchase Date, for the benefit of the
tendering Beneficial Owners or their Agent
Members
until 2:00 p.m., New York City time, on the Purchase Date and, after such time,
in trust for the benefit of the Remarketing Agent on account of purchasers
purchasing in a Remarketing or for the Remarketing Agent’s account to the
extent it has advanced the Purchase Price of any shares of such Series of VRDP
Shares (which it may or may not do in its sole discretion) on behalf of one or
more purchasers, as applicable, for payment of the Purchase Price upon delivery
of the shares of such Series of VRDP Shares or, with respect to shares of such
Series of VRDP Shares that are not delivered, for return to the Remarketing
Agent on account of purchasers purchasing in a Remarketing or for the
Remarketing Agent’s account to the extent it has advanced the Purchase Price of
any shares of such Series of VRDP Shares (which it may or may not do in its
sole discretion) on behalf of one or more purchasers, as applicable, upon the
Remarketing Agent’s request and (ii) in the case of a Mandatory Tender, for the
benefit of the tendering Holders until delivery of the shares of the Series of
VRDP Shares by the tendering Holders against payment therefor. Upon receipt of
the shares of a Series of VRDP Shares from the tendering Beneficial Owners or
their Agent Members, in the case of an Optional Tender, or from the tendering
Holders, in the case of a Mandatory Tender, by the Tender and Paying Agent, the
Tender and Paying Agent shall pay, subject to receipt of the Purchase Price by
the Tender and Paying Agent in the form of proceeds of a Remarketing from the
Remarketing Agent, with respect to the shares of such Series of VRDP Shares
remarketed by the Remarketing Agent, or in the form of payment pursuant to the
VRDP Shares Purchase Agreement from the Liquidity Provider, with respect to the
shares of such Series of VRDP Shares subject to purchase pursuant to the
Purchase Obligation, the Purchase Price for shares of such Series of VRDP
Shares to such tendering Beneficial Owner, Agent Member or Holder, as the case
may be. In accordance with and subject to the foregoing, the Tender and Paying
Agent shall effect any such payment on the applicable Purchase Date.
(e)
Except as otherwise expressly
provided for herein, the purchase and delivery of tendered shares of a Series
of VRDP Shares in the form of global securities and their Remarketing will be
accomplished in accordance with the applicable rules and procedures of the
Securities Depository.
(f)
In connection with the allocation
of shares of a Series of VRDP Shares tendered for Remarketing, the Remarketing
Agent shall allocate those shares of such Series of VRDP Shares previously
acquired by the Liquidity Provider pursuant to its Purchase Obligation first to
any purchasers in a Remarketing (such allocation coming first from those shares
of such Series of VRDP Shares acquired earliest by the Liquidity Provider).
(g)
The Remarketing Agent and the
Tender and Paying Agent each shall use commercially reasonable efforts to meet
the timing requirements set forth above. Subject to the VRDP Shares Remarketing
Agreement, the Remarketing Agent may, in its sole discretion, modify the
settlement procedures set forth above with respect to any Remarketing upon ten
(10) days’ prior written notice to the Corporation, the Liquidity Provider and
the Tender and Paying Agent, provided any such modification does not adversely
affect the Holders, the Beneficial Owners, the Tender and Paying Agent, the
Liquidity Provider or the Corporation. The Remarketing Agent may sell shares of
a Series of VRDP Shares for its own account outside of a Remarketing at a price
other than the Purchase Price, subject to the restrictions set forth in Section
2(f) of the VRDP Shares Remarketing Agreement.
(h)
At any time that no Purchase
Obligation is in effect (or with respect to a remarketing of shares of a Series
of VRDP Shares held by the Liquidity Provider as to which any then-effective
Purchase Obligation by a successor liquidity provider is inapplicable), any
shares of a Series of VRDP Shares unsold in a Remarketing will be returned to
the relevant tendering Beneficial Owners or their Agent Members, or the relevant
tendering Holders, as the case may be, including the Liquidity Provider with
respect to Purchased VRDP Shares, by the Tender and Paying Agent.
3.
Determination of Applicable Rate.
(a)
The Applicable Rate shall be
determined by the Remarketing Agent on and as of each Rate Determination Date
as the lowest rate under then-existing market conditions that in the
Remarketing Agent’s sole judgment would result in the shares of the Series of
VRDP Shares on the first (1st) day of the Subsequent Rate Period next succeeding
the Rate Determination Date having a market value equal to the Liquidation
Preference thereof (plus accumulated but unpaid dividends thereon,
whether or not earned or declared). Such determination shall be conclusive and
binding upon the interested parties. The Applicable Rate shall not be more than
the Maximum Rate. Notwithstanding the
foregoing, the Applicable Rate for a Subsequent Rate Period that has been
designated a Special Rate Period may be determined in accordance with the
Notice of Special Rate Period designating such Special Rate Period.
(b)
The Remarketing Agent shall
establish the Applicable Rate by 5:00 p.m., New York City time, on each Rate
Determination Date to the nearest one-thousandth (0.001) of one percent per
annum for the Subsequent Rate Period. The Applicable Rate shall be in
effect from and including the first (1st) day following such Rate Determination
Date to and including the following Rate Determination Date. The Remarketing
Agent shall make the Applicable Rate available after 5:00 p.m., New York City
time, on the Rate Determination Date by Electronic Means to the Corporation,
the Tender and Paying Agent and the Liquidity Provider and post the Applicable
Rate on Bloomberg on such Rate Determination Date.
(c)
In the event that the Remarketing
Agent establishes the Maximum Rate as the Applicable Rate for a Subsequent Rate
Period, the Remarketing Agent shall notify the Corporation and the Tender and
Paying Agent of the Maximum Rate by Electronic Means after 5:00 P.M., New York
City time, on each Rate Determination Date. The Corporation will require in the
Tender and Paying Agent Agreement that the Tender and Paying Agent will notify
the Liquidity Provider and the Holders of VRDP Shares by first-class mail,
postage prepaid (in the case of physical shares), or by Electronic Means (in
the case of VRDP Shares in the form of global securities) that the Applicable
Rate for the Subsequent Rate Period is the Maximum Rate.
(d)
In the event the Remarketing Agent
does not or is unable to determine the Applicable Rate, or if there is no
Remarketing Agent, the Applicable Rate shall be the Maximum Rate.
(e)
In the event of a Failed
Remarketing Condition, the Applicable Rate as of the close of business on the
day the Failed Remarketing Condition first occurs will be adjusted to the
Maximum Rate (with the Applicable Spread subject to adjustment as set forth in
the definition of Applicable Spread) and the Maximum Rate will continue to be
the Applicable Rate (i) until the
first (1st) day of
the next succeeding Subsequent Rate Period after a Failed Remarketing Condition
no longer exists in the case of a Minimum Rate Period or a Special Rate Period
of twenty-eight (28) Rate Period Days or fewer, and (ii) until the first (1st)
day of the next succeeding Dividend Period after the Failed Remarketing
Condition no longer exists in the case of a Special Rate Period of greater than
twenty-eight (28) Rate Period Days.
4.
Failed Remarketing Condition.
In the event of a Failed
Remarketing Condition, pursuant to the Tender and Paying Agent Agreement, the
Tender and Paying Agent shall provide notice of a Failed Remarketing Condition
promptly, but in any event within two (2) Business Days of receipt by the
Tender and Paying Agent of notice from the Corporation of the occurrence of
such Failed Remarketing Condition, by Electronic Means (or by first-class mail,
postage prepaid, in the case where VRDP Shares are in physical form outside the
book-entry system of the Securities Depository) to the Holders (with a copy to
the Corporation).
5.
Purchase of VRDP Shares by
Remarketing Agent.
The Remarketing Agent in its sole discretion may purchase for its own
account shares of a Series of VRDP Shares in a Remarketing; however, the
Remarketing Agent shall not be obligated to purchase any shares of a Series of
VRDP Shares that would otherwise remain unsold in a Remarketing. None of the Corporation,
the Tender and Paying Agent or any Remarketing Agent shall be obligated in any
case to provide funds to make payment to a Beneficial Owner or its Agent Member
upon such Beneficial Owner’s tender of its shares of a Series of VRDP Shares in
a Remarketing unless, in each case, such shares of such Series of VRDP Shares
were acquired for the account of the Corporation, the Tender and Paying Agent
or the Remarketing Agent.
6.
Notification of Allocations.
Whenever the Corporation
intends to include any net capital gains or ordinary income taxable for regular
federal income tax purposes in any dividend on shares of a Series of VRDP
Shares, the Corporation shall (except as provided below) notify the Remarketing
Agent and Tender and Paying Agent of the amount to be so included (i) not later
than fourteen (14) calendar days preceding the first Rate Determination Date on
which the Applicable Rate for such dividend is to be established, and (ii) for
any successive Rate Determination Date on which the Applicable Rate for such
dividend is to be established, not later than the close of business on the
immediately preceding Rate Determination Date. Whenever such advance notice is received
from the Corporation, the Tender and Paying Agent will notify each Holder and
the Remarketing Agent will promptly notify each potential Beneficial Owner or
its Agent Member. With respect to a Rate Period for which such advance notice
was given and whose dividends are comprised partly of such ordinary income or
capital gains and partly of exempt interest income, the different types of
income will be paid in the same relative proportions for each day during the
Rate Period. The Corporation may also include such ordinary income or capital
gains in a dividend on shares of a Series of VRDP Shares without giving advance
notice thereof if it increases the dividends by an additional amount calculated
as if such income was a Taxable Allocation and the additional amount was a
Gross-up Payment, provided the Corporation will notify the Tender and Paying Agent of the additional amounts to be included in such
dividend at least five (5) Business Days prior to the applicable Dividend
Payment Date.
7.
Transfers.
(a)
Unless otherwise permitted by the
Corporation or otherwise permitted by the VRDP Shares Remarketing Agreement in
the case of VRDP Shares owned by the Liquidity Provider or the Remarketing
Agent, a Beneficial Owner or Holder may sell, transfer or otherwise dispose of
shares of a Series of VRDP Shares only in whole shares and only pursuant to a
Remarketing in accordance with the Remarketing Procedures set forth in Part II
of these Articles Supplementary, provided, however, that a sale,
transfer or other disposition of shares of a Series of VRDP Shares from a
Beneficial Owner who holds shares of a Series of VRDP Shares through an Agent
Member to another Beneficial Owner who holds shares of a Series of VRDP Shares
through the same Agent Member shall be permitted. In the case of all transfers
other than pursuant to Remarketings made in accordance with the preceding
sentence, the Agent Member or other Person to whom such transfer is made shall
advise the Remarketing Agent. The Corporation has not registered the shares of
any Series of VRDP Shares under the Securities Act. Accordingly, the shares of
each Series of VRDP Shares are subject to restrictions on transferability and
resale and may only be purchased by and sold to “qualified institutional
buyers” (as defined in Rule 144A under the Securities Act or any successor
provision) in accordance with Rule 144A under the Securities Act or any
successor provision or any exemption from registration available and otherwise
in accordance with the legend set forth on the face of the share certificate
for the share of a Series of VRDP Shares.
(b)
The Investment Adviser, affiliated
persons of the Investment Adviser (as defined in Section 2(a)(3) of the 1940
Act) (other than the Corporation, in the case of a purchase of shares of a
Series of VRDP Shares which are to be cancelled within ten (10) days of
purchase by the Corporation), and Persons over which the Investment Adviser, or
affiliated persons of the Investment Adviser (as defined in Section 2(a)(3) of
the 1940 Act), exercise discretionary investment or voting authority (other
than the Corporation, in the case of a purchase of shares of a Series of VRDP
Shares which are to be cancelled within ten (10) days of purchase by the Corporation)
are not permitted to purchase shares of a Series of VRDP Shares without the
prior written consent of the Liquidity Provider, and any such purchases shall
be void ab initio; provided, however, that the Corporation
shall give prompt notice to Beneficial Owners by Electronic Means upon any of
the foregoing Persons (with the prior written consent of the Liquidity
Provider), singly or in the aggregate, acquiring stock in 20% or more of the
VRDP Shares; provided, further, that without regard to the
preceding requirements, purchases of shares of a Series of VRDP Shares may be
made by broker-dealers that are affiliated persons of the Investment Adviser in
riskless principal transactions with respect to such purchases of shares of a
Series of VRDP Shares.
(c)
If at any time the Corporation is
not furnishing information to the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, in order to preserve the exemption for resales and transfers
under Rule 144A, the Corporation shall furnish, or cause to be furnished, to
Holders and Beneficial Owners of shares of a Series of VRDP Shares and
prospective purchasers of shares of a Series of VRDP Shares, upon request,
information with respect to the Corporation satisfying the requirements of
subsection (d)(4) of Rule 144A.
8.
Global Certificate.
Prior to the
commencement of a Voting Period, (i) all of the shares of a Series of VRDP
Shares Outstanding from time to time shall be represented by one or more global
certificates registered in the name of the Securities Depository or its nominee
and countersigned by the Tender and Paying Agent and (ii) no registration of
transfer of shares of a Series of VRDP Shares shall be made on the books of the
Corporation to any Person other than the Securities Depository or its nominee.
The foregoing restriction on registration of transfer shall be conspicuously
noted on the face or back of the certificates of VRDP Shares in such a manner
as to comply with the requirements of Section 8-204 of the Uniform Commercial
Code as in effect in the State of Maryland, or any successor provisions.
THIRD: The
amendment to the charter of the Corporation as set forth above in these
Articles of Amendment has been duly advised by the Board of Directors of the Corporation
and approved by the stockholders of the Corporation as and to the extent
required by law and in accordance with the charter of the Corporation.
FOURTH: The authorized stock of the Corporation has not been
increased by these Articles of Amendment.
FIFTH: These Articles of Amendment shall be effective as of
April 7, 2022.
SIXTH: As amended hereby, the charter of the Corporation
shall remain in full force and effect.
SEVENTH: The undersigned acknowledges these Articles of
Amendment to be the act of the Corporation and, as to all matter or facts
required to be verified under oath, the undersigned acknowledges that to the
best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties of
perjury.
[Remainder of the Page Intentionally Blank]
IN WITNESS
WHEREOF, these Articles of Amendment are hereby executed in the name of the Corporation
on April 1, 2022.
BLACKROCK MUNICIPAL INCOME FUND,
INC.
By: /s/ Jonathan Diorio
Name: Jonathan Diorio
Title: Vice President
ATTEST:
/s/ Janey Ahn
Name: Janey Ahn
Title: Secretary
Annex A
Notice of Special Rate Period
[see attached]
BLACKROCK
MUNICIPAL INCOME FUND, INC.
(THE “FUND”)
SERIES W-7
VARIABLE RATE DEMAND PREFERRED SHARES
(“VRDP SHARES”)
CUSIP
NO. 09262J 201*
Notice of Special Rate Period
April 7, 2022
BlackRock Municipal
Income Fund, Inc.
100
Bellevue Parkway
Wilmington,
Delaware 19809
To: Addressees listed on
Schedule 1 hereto
In accordance
with the Fund’s Amended and Restated Articles Supplementary Establishing and
Fixing the Rights and Preferences of Variable Rate Demand Preferred Shares, effective
April 7, 2022 (the “Articles Supplementary”), the Fund
hereby notifies the Liquidity Provider, the Remarketing Agent and the Holders
of the VRDP Shares that the Fund hereby exercises its option to designate the
current Rate Period of the Series W-7 VRDP Shares as a Special Rate Period. The
first day of the Special Rate Period shall be April 7, 2022 and the last day of
the Special Rate Period shall be April
15, 2023.
The Special
Rate Period shall not commence if (1) any VRDP Shares are owned by the
Liquidity Provider pursuant to the Purchase Obligation on either the Rate
Determination Date immediately preceding the Special Rate Period or on the
first day of the Special Rate Period or (2) full cumulative dividends or any
amounts due with respect to redemptions payable prior to such Rate
Determination Date have not been paid in full.
Certain
capitalized terms used in this Notice of Special Rate Period are defined in
Appendix A hereto. Capitalized terms used but not defined in this Notice of
Special Rate Period, including in Appendix A hereto, shall have the meanings
given to such terms in the Articles Supplementary.
Calculation of Dividends During Special Rate Period
During the
Special Rate Period, for each SRP Calculation Period for the VRDP Shares, the
dividend rate on the VRDP Shares (the “SRP Applicable Rate”) shall be
calculated by the Tender and Paying Agent and shall be equal to the rate per annum that
results from the sum of the (1) Base Rate and (2) Ratings Spread (the “SRP
Applicable Rate Determination”). During the Special Rate Period, references
in the Articles Supplementary and the other Related Documents to the “Applicable Rate Determination,” the “Applicable
Rate,” a “Subsequent Rate Period” or a “Rate Determination Date,” in each case
with respect to the VRDP Shares, shall be deemed to be references to the SRP
Applicable Rate Determination, the SRP Applicable Rate, an SRP Calculation
Period or an SRP Calculation Date, respectively. The SRP Applicable Rate for
any SRP Calculation Period (or part thereof) shall in no event be greater than
the Maximum Rate.
* NOTE: Neither the Fund nor
the Tender and Paying Agent shall be responsible for the selection or use of
the CUSIP Numbers selected, nor is any representation made as to its
correctness indicated in any notice or as printed on any VRDP Share
certificate. It is included solely as a convenience to Holders of VRDP Shares.
The amount of
dividends payable on each VRDP Share on any Dividend Payment Date during the
Special Rate Period shall be calculated by the Tender and Paying Agent and
shall equal the sum of the dividends accumulated but not yet paid for each SRP
Calculation Period (or part thereof) and, if applicable, any other Rate Period
(or part thereof) occurring during the related Dividend Period. For the
avoidance of doubt, the amount of dividends payable on each VRDP Share on any
Dividend Payment Date during the Special Rate Period shall include any Late
Charge applicable under Section 2(e)(i)(C) of the Part I of the Articles
Supplementary. The amount of dividends accumulated for each such SRP
Calculation Period (or part thereof) shall be computed by multiplying the SRP
Applicable Rate for the VRDP Shares for such SRP Calculation Period (or part
thereof) by a fraction, the numerator of which shall be the number of days in
such SRP Calculation Period (or part thereof) and the denominator of which
shall be the actual number of days in the year (365 or 366), and multiplying
such product by $100,000.
During the
Special Rate Period, the scheduled Dividend Payment Dates for the VRDP Shares
shall continue to be the first Business Day of each calendar month; provided,
however, that the Dividend Payment Date with respect to dividends accumulated
on each VRDP Share for the period from April 7, 2022 through April 30, 2022
shall be the first (1st) Business Day of May
2022.
For the
avoidance of doubt, Section 3 of Part II of the Articles Supplementary shall
not be applicable during the Special Rate Period.
Optional
Tender and Transfers of VRDP Shares
During the
Special Rate Period, Beneficial Owners and Holders shall not have the right to
tender their VRDP Shares for Remarketing pursuant to an Optional Tender.
The Fund agrees, however, that during the Special Rate Period, a
Beneficial Owner or Holder of VRDP Shares may sell, transfer or otherwise
dispose of VRDP Shares in whole shares only to (i) Persons that such Beneficial
Owner or Holder reasonably believes are QIBs that are either registered
closed-end management investment companies, the common shares of which are
traded on a national securities exchange (“Closed-End Funds”), banks or
entities that are 100% direct or indirect subsidiaries of banks’ publicly
traded parent holding companies (collectively, “Banks”), insurance
companies, companies that are included in the S&P 500 Index (and their
direct or indirect wholly owned subsidiaries) or registered open-end management
investment companies, (ii) TOB Trust (whether tax-exempt or taxable) in which
all investors are Persons that such Beneficial Owner or Holder reasonably
believes are QIBs that are Closed-End Funds, Banks, insurance companies,
companies that are included in the S&P 500 Index (and their direct or
indirect wholly owned subsidiaries) or registered open-end management
investment companies (or, in the case of a TOB Trust in which an affiliate of
such Beneficial Owner or Holder retains a residual interest, such affiliate of
such Beneficial Owner or Holder, but only to the
extent expressly provided for in an agreement between the Fund and such
Beneficial Owner or Holder) or (iii) such other Persons approved in writing by
the Fund, in each case, pursuant to Rule 144A of the Securities Act or another
available exemption from registration under the Securities Act, in a manner not
involving any public offering within the meaning of Section 4(a)(2) of the
Securities Act. Any transfer in violation of the foregoing restrictions shall
be void ab initio and any transferee of VRDP Shares transferred in
violation of the foregoing restrictions shall be deemed to agree to hold all
payments it received on any such improperly transferred VRDP Shares in trust
for the benefit of the transferor of such VRDP Shares.
In the event
that a Beneficial Owner transfers VRDP Shares to a TOB Trust in which such
Beneficial Owner or an affiliate of such Beneficial Owner that is a wholly
owned direct or indirect subsidiary of such Beneficial Owner retains a residual
interest, for so long as no event has occurred that results in the termination
of such TOB Trust, for purposes of each section of the Articles Supplementary
that requires, permits or provides for (i) notice or the delivery of
information to the Beneficial Owner of VRDP Shares or (ii) voting of the VRDP
Shares by or the giving of any consent by the Beneficial Owner of VRDP Shares
(collectively, the “Applicable Sections”), then such Beneficial Owner,
and not such TOB Trust, shall be deemed to be the actual holder and Beneficial
Owner of such VRDP Shares.
Anything
herein to the contrary notwithstanding, except with respect to the deemed
holding and ownership provisions set forth above in respect of the Applicable
Sections, any TOB Trust to which the VRDP Shares are transferred and each of
the beneficial owners thereof shall, subject to the provisions of the
agreements governing the TOB Trust, retain all of its other rights in respect
of the VRDP Shares under the Articles Supplementary or applicable law,
including, for the avoidance of doubt, the rights of such TOB Trust in respect
of matters addressed by any of the Applicable Sections to the extent necessary
for the protection or exercise of such other rights or that are otherwise
applicable as a result of the exercise of such other rights.
Notice
of Taxable Allocations and Gross-Up Payments
Section 3 of
Part I and Section 6 of Part II of the Articles Supplementary shall have no
effect during the Special Rate Period.
During the
Special Rate Period, Holders of VRDP Shares shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds legally available
therefor under applicable law and otherwise in accordance with applicable law,
dividends in an amount equal to the aggregate Gross-up Payments as follows:
(a) Whenever
the Fund intends or expects to include any net capital gains or ordinary income
taxable for regular federal income tax purposes in any dividend on VRDP Shares,
the Fund shall notify the Tender and Paying Agent of the amount to be so
included (i) not later than 14 calendar days preceding the first SRP
Calculation Date on which the SRP Applicable Rate for such dividend is to be
established, and (ii) for any successive SRP Calculation Date on which the SRP
Applicable Rate for such dividend is to be established, not later than the close
of business on the immediately preceding SRP Calculation Date. Whenever such
advance notice is received from the Fund, the Tender and Paying Agent will
notify each Holder and each Beneficial Owner or its
Agent Member identified to the Tender and Paying Agent. With respect to an SRP
Calculation Period for which such notice was given and whose dividends are
comprised partly of such ordinary income or capital gains and partly of
exempt-interest income, the different types of income will be paid in the same relative
proportions for each day during the SRP Calculation Period.
(b) (i)(i) If the Fund allocates, under Subchapter M of Chapter
1 of the Code, any net capital gains or ordinary income taxable for regular
federal income tax purposes to a dividend paid on VRDP Shares, the Fund shall
to the extent practical simultaneously increase such dividend payment by an additional amount equal to
the Gross-up Payment and direct the Tender and Paying Agent to send notice with
such dividend describing the Gross-up Payment and (ii)(ii) if the Fund allocates, under
Subchapter M of Chapter 1 of the Code, any net capital gains or ordinary income
taxable for regular federal income tax purposes to a dividend paid on VRDP
Shares without simultaneously increasing such dividend as described in clause
(i) above the Fund shall, prior to the end of the calendar year in which such
dividend was paid, direct the Tender and Paying Agent to send notice with a
Gross-up Payment to the Holder that was entitled to such dividend payment
during such calendar year at such Holder’s address as the same appears or last
appeared on the record books of the Fund. The Fund shall compute the Gross-up
Payment.
(c) The
Fund shall not be required to make Gross-up Payments with respect to any net capital gains or ordinary income determined by the
Internal Revenue Service to be allocable in a manner different from the manner
used by the Fund.
Additional
Provisions Relating to the Termination of Special Rate Period
If the
Scheduled Termination Date for the VRDP Shares is further extended to a
succeeding Scheduled Termination Date in accordance with the terms of the VRDP
Shares Purchase Agreement, then, unless the Special Rate Period has been
extended in accordance with the procedures set forth below, the VRDP Shares
beneficially owned by any Beneficial Owner will be deemed automatically
tendered for Remarketing on the seventh day prior to the last day of the
Special Rate Period (the “Automatic Tender Date”) with a Purchase Date
occurring on the first day of the Subsequent Rate Period immediately succeeding
the Special Rate Period. Notice of the extension of the Scheduled Termination
Date for the VRDP Shares and the automatic tender of such VRDP Shares for
Remarketing shall be provided by or on behalf of the Fund to the Holders of
such VRDP Shares as soon as reasonably practicable upon the extension of the
Scheduled Termination Date, but in no event later than one Business Day before
the Automatic Tender Date. Notwithstanding the foregoing provisions of this
Notice of Special Rate Period, if any VRDP Shares beneficially owned by BANA
for federal income tax purposes on such Purchase Date are not successfully
remarketed for purchase on such Purchase Date, a Failed Remarketing
Condition-Purchased VRDP Shares will be deemed to exist in respect of such VRDP
Shares for all purposes of the Articles Supplementary (including Section 10(b)
thereof and the definition of Maximum Rate) and the other Related Documents
and, as of such Purchase Date, such VRDP Shares will be deemed beneficially owned
by the Liquidity Provider. Accordingly, all such VRDP Shares deemed
beneficially owned by the Liquidity Provider will thereafter be deemed tendered
for Remarketing on each Business Day in accordance with the Related Documents,
and the continued beneficial ownership of such VRDP Shares by the Liquidity Provider will result in a Failed Remarketing
Condition-Purchased VRDP Shares Redemption in accordance with, and subject to,
the terms of such definition and the Related Documents. For the avoidance of
doubt, if any VRDP Shares beneficially owned by a Beneficial Owner other than
BANA are not successfully remarketed on the Purchase Date relating to the
Automatic Tender Date and are purchased by the Liquidity Provider pursuant to
the Purchase Obligation, such VRDP Shares shall constitute Failed Remarketing
Condition-Purchased VRDP Shares, such VRDP Shares will thereafter be deemed
tendered for Remarketing on each Business Day in accordance with the Related
Documents, and the continued
beneficial ownership of such VRDP Shares by the Liquidity Provider will result
in a Failed Remarketing Condition-Purchased VRDP Shares Redemption in
accordance with, and subject to, the terms of such definition and the Related
Documents.
The Fund shall
have the right, exercisable not more than 120 days nor less than 90 days prior
to the last day of the Special Rate Period, to request that each Holder of the
VRDP Shares (x) extend the term of the Special Rate Period for the VRDP Shares
for an additional 364-day period, which request may be conditioned upon terms
and conditions that are different from the terms and conditions herein,
including, without limitation, the further extension of the Scheduled
Termination Date and (y) notify the Fund and the Tender and Paying Agent of
such Holder’s acceptance or rejection of such request within 30 days after
receiving such request. If any Holder of the VRDP Shares fails to notify the
Fund and the Tender and Paying Agent of its acceptance or rejection of the
Fund’s request for extension within 30 days after receiving such request, such
failure to respond shall constitute a rejection of such request. Any acceptance
by a Holder within such 30-day period may be conditioned upon terms and
conditions, including, without limitation, the further extension of the
Scheduled Termination Date, that are different from the terms and conditions
herein or the terms proposed by the Fund in making an extension request (a “Conditional
Acceptance”). If any Holder provides a Conditional Acceptance, then the
Fund shall have 30 days thereafter to notify the Total Holders and the Tender
and Paying Agent of the Fund’s acceptance or rejection of the terms and
conditions specified in any such Conditional Acceptance. The Fund’s failure to
notify the Total Holders and the Tender and Paying Agent within such 30-day
period will be deemed a rejection of the terms and conditions specified in a
Conditional Acceptance. Each Holder of the VRDP Shares may grant or deny any
request for extension of the Special Rate Period for the VRDP Shares in their
sole and absolute discretion and any request for such extension will be
effective only if granted by the Total Holders.
If the
Scheduled Termination Date is not further extended to a succeeding Scheduled
Termination Date in accordance with the terms of the VRDP Shares Purchase
Agreement or if the VRDP Shares Purchase Agreement is otherwise terminated on
or prior to the Scheduled Termination Date for any reason, then the VRDP Shares
beneficially owned by any Beneficial Owner will be deemed automatically
tendered for Remarketing on the seventh day prior to the Scheduled Termination
Date (whether or not the VRDP Shares Purchase Agreement has terminated on or
prior to such date) with a Purchase Date occurring on such Scheduled
Termination Date. Notice of the automatic tender of such VRDP Shares for
Remarketing shall be provided by or on behalf of the Fund to the Holders of
such VRDP Shares as soon as reasonably practicable prior to, but in no event
later than one Business Day before, the Automatic Tender Date. Notwithstanding
the foregoing provisions of this Notice of Special Rate Period, if any VRDP
Shares beneficially owned by BANA for federal income tax purposes on such
Purchase Date are not successfully remarketed for purchase on such Purchase Date,
a Failed Remarketing Condition-Purchased VRDP Shares
will be deemed to exist in respect of such VRDP Shares for all purposes of the Articles
Supplementary (including Section 10(b) thereof and the definition of Maximum
Rate) and the other Related Documents and, as of such Purchase Date, such VRDP
Shares will be deemed beneficially owned by the Liquidity Provider, unless the
Fund has entered into an Alternate VRDP Shares Purchase Agreement and all VRDP
Shares beneficially owned by BANA are subject to purchase by the replacement
Liquidity Provider pursuant to the Purchase Obligation of such Liquidity
Provider under such Alternate VRDP Shares Purchase Agreement on and as of such
Purchase Date. Accordingly, if a Failed Remarketing Condition-Purchased VRDP Shares
is so deemed to exist in respect of any VRDP Shares deemed beneficially owned
by the Liquidity Provider on such Purchase Date, such VRDP Shares will
thereafter be deemed tendered for Remarketing on each Business Day in
accordance with the Related Documents and the continued beneficial ownership of
such VRDP Shares by the Liquidity Provider will result in a Failed Remarketing
Condition-Purchased VRDP Shares Redemption in accordance with, and subject to,
the terms of such definition and the Related Documents. For the avoidance of
doubt, if any VRDP Shares beneficially owned by a Beneficial Owner other than
BANA are not successfully remarketed on the Purchase Date relating to the
automatic tender described above and are purchased by the Liquidity Provider pursuant
to the Purchase Obligation, such VRDP Shares shall constitute Failed
Remarketing Condition-Purchased VRDP Shares, such VRDP Shares will thereafter
be deemed tendered for Remarketing on each Business Day in accordance with the
Related Documents, and the continued beneficial ownership of such VRDP Shares
by the Liquidity Provider will result in a Failed Remarketing
Condition-Purchased VRDP Shares Redemption in accordance with, and subject to,
the terms of such definition and the Related Documents.
Other
Additional Provisions Applicable During Special Rate Period
During the
Special Rate Period, there shall be no Mandatory Tender Events or Mandatory
Tenders or any consequences or penalties as a result of there being no
Mandatory Tender Events or Mandatory Tenders.
During the
Special Rate Period, the first sentence of the first paragraph of Section 12 of
the Articles Supplementary shall be inapplicable.
During the
Special Rate Period, Section 4(f) of Part I of the Articles Supplementary shall
be inapplicable. Section 4(f) of Part I of the Articles Supplementary states
the following: “Notwithstanding the foregoing, no Special Rate Period shall end
later than the fifteenth (15th) day prior to the Scheduled Termination Date at
which point the Rate Periods shall revert to Minimum Rate Periods.”
During the
Special Rate Period, the Fund is not required to obtain or maintain any
short-term preferred share rating of the VRDP Shares and there shall be no
other consequences, penalties or notices with respect to the withdrawal of the
VRDP Shares’ short-term preferred shares ratings by a Rating Agency.
Notwithstanding
the Fund’s option to designate any succeeding Subsequent Rate Period of a
Series of VRDP Shares as a Special Rate Period under Section 4 of Part I of the
Articles Supplementary, during the Special Rate Period (unless extended in
accordance with the terms specified above in
“Additional Provisions Relating to the Termination of Special Rate Period”),
the Fund shall not, without (i) the prior written consent of the Liquidity
Provider and the Remarketing Agent and (ii) the affirmative vote or consent of
the Holders of a majority of the VRDP Shares of such Series Outstanding at the
time, in person or by proxy, either in writing or at a meeting, voting as a
separate class, designate another Special Rate Period for such Series, amend,
alter or repeal the term of the Special Rate Period or any other provision of
this Notice of Special Rate
Period so as to adversely affect any preference, right or power of the VRDP
Shares of such Series or the Holders thereof set forth herein; provided,
that any amendment, alteration or repeal of such other provision of this Notice
of Special Rate Period that adversely affects the amount, timing, priority or
taxability of any dividend, redemption or other payment or distribution due to
the Holders of the VRDP Shares of such Series shall require the affirmative
vote or consent of the Total Holders of such Series, in person or by proxy,
either in writing or at a meeting, voting as a separate class.
During the
Special Rate Period, any amendment to the provisions of the Articles
Supplementary during the Special Rate Period in connection with the issuance of
additional shares of the same series of VRDP Shares shall be deemed to
adversely affect the preference, right or power of such VRDP Shares or the
Holders thereof for purposes of Section 5(c)(i) of Part I of the Articles
Supplementary.
In the event
of any conflict between the terms of this Notice of Special Rate Period and the
terms of the Articles Supplementary, the terms of this Notice of Special Rate
Period shall govern.
The Fund is
authorized to amend, or consent to any amendment to, any Related Document in
accordance with the terms therein for purposes of conforming the terms and
provisions therein to the terms and provisions specified in this Notice of
Special Rate Period.
[Signature Page Follows]
IN WITNESS WHEREOF, I have signed this Notice of
Special Rate Period as of the date first written above.
BLACKROCK
MUNICIPAL INCOME FUND, INC.
By:
Name:
Jonathan Diorio
Title:
Vice President
[Signature Page to MUI Notice of Special Rate Period]
Appendix A
Definitions
The following
terms shall have the following meanings:
“BANA”
means, unless the context indicates otherwise, Bank of America, N.A., in its
individual capacity and not in its capacity as Liquidity Provider.
“Base Rate”
means, with respect to an SRP Calculation Period, the SIFMA Municipal Swap
Index on the SRP Calculation Date for such SRP Calculation Period.
“Maximum
Rate” means 15% per annum, exclusive of any applicable Gross-up Payment or
increased dividend payment relating to the inclusion in any dividend of net
capital gains or ordinary income taxable for regular federal income tax
purposes, in each case due and payable in accordance with these Articles
Supplementary.
“Ratings Spread” means, with respect to an SRP Calculation Period, the
percentage per annum set forth below opposite the highest applicable credit
rating assigned to the VRDP Shares, unless the lowest applicable rating is
below A3/A-, in which case the Ratings Spread shall mean the percentage per
annum set forth below opposite the lowest applicable credit rating assigned to
the VRDP Shares by Moody’s, Fitch or any Other Rating Agency, in each case
rating the VRDP Shares at the request of the Fund, on the SRP Calculation Date
for such SRP Calculation Period:
Moody’s/Fitch
|
Percentage
|
Aa2/AA to Aaa/AAA
|
0.85%
|
Aa3/AA-
|
0.94%
|
A3/A- to A1/A+
|
2.00%
|
Baa3/BBB- to Baa1/BBB+
|
3.00%
|
Non-investment grade or Unrated
|
4.00%
|
“SRP
Calculation Date” means (i) with respect to the SRP Initial
Calculation Period, April 6, 2022 and (ii) with respect to any SRP Subsequent
Calculation Period, the last day of the immediately preceding SRP Calculation
Period, provided that the next succeeding SRP Calculation Date will be
determined without regard to any prior extension of a SRP Calculation Date to a
Business Day.
“SRP
Calculation Period” means the SRP Initial Calculation Period and any SRP
Subsequent Calculation Period.
“SRP
Initial Calculation Period” means, with respect to the VRDP Shares, the
period commencing on, and including, April
7, 2022 and ending on, and including, the
next succeeding Wednesday, or, if such day is not a Business Day, the next
succeeding Business Day.
“SRP Subsequent Calculation Period” means, with
respect to the VRDP Shares, the period from, and including, the first day
following a SRP Calculation Date to, and including, the next succeeding
Wednesday, or, if such day is not a Business Day, the next succeeding Business
Day.
“TOB Trust”
means a tender option bond trust or similar vehicles that are functionally
equivalent to tender option bond trusts and used for providing financing for
municipal obligations and municipal closed-end fund preferred shares.
“Total
Holders” means, with respect to any Series of VRDP Shares, the Holders of
100% of the aggregate Outstanding amount of the VRDP Shares of such Series.
Schedule 1
Recipients of this Notice of Special Rate Period
Bank of America, N.A.
One Bryant Park
1111 Avenue of the
Americas, 3rd Floor
New York, New York 10036
Attention: Thomas
Visone
Mary
Ann Olson
Todd
Blasiak
Lisa
Irizarry
Michael
Jentis
Carl
Daniels
Telephone: (212) 449-7358
Email: thomas.visone@bofa.com
mary.ann.olson@bofa.com
todd.blasiak@bofa.com
lisa.m.irizarry@bofa.com
michael.jentis@bofa.com
DG.pfloats@bofa.com
carl.daniels@bofa.com
BofA Securities, Inc.
One Bryant Park
1111 Avenue of the
Americas
3rd Floor
New York, NY 10036
Attention: Thomas
Visone
Mary
Ann Olson
Todd Blasiak
Lisa
Irizarry
Michael
Jentis
Carl
Daniels
Telephone: (212) 449-7358
Email: thomas.visone@bofa.com
mary.ann.olson@bofa.com
todd.blasiak@bofa.com
lisa.m.irizarry@bofa.com
michael.jentis@bofa.com
tommy.murray@bofa.com
dg.temm@bofa.com
DG.pfloats@bofa.com
carl.daniels@bofa.com
Banc
of America Preferred Fund Corporation
One Bryant Park
1111 Avenue of the
Americas, 3rd Floor
New York, New York 10036
Attention: Thomas
Visone
Mary
Ann Olson
Todd
Blasiak
Lisa
Irizarry
Michael
Jentis
Carl
Daniels
Telephone: (212) 449-7358
Email: thomas.visone@bofa.com
mary.ann.olson@bofa.com
todd.blasiak@bofa.com
lisa.m.irizarry@bofa.com
michael.jentis@bofa.com
DG.pfloats@bofa.com
carl.daniels@bofa.com
The Depository Trust
Company
LensNotice@dtcc.com