0000914851-15-000194.txt : 20150724
0000914851-15-000194.hdr.sgml : 20150724
20150724164333
ACCESSION NUMBER: 0000914851-15-000194
CONFORMED SUBMISSION TYPE: NSAR-B
PUBLIC DOCUMENT COUNT: 6
CONFORMED PERIOD OF REPORT: 20150531
FILED AS OF DATE: 20150724
DATE AS OF CHANGE: 20150724
EFFECTIVENESS DATE: 20150724
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: WESTERN ASSET MANAGED MUNICIPALS FUND INC.
CENTRAL INDEX KEY: 0000886043
IRS NUMBER: 000000000
FISCAL YEAR END: 0531
FILING VALUES:
FORM TYPE: NSAR-B
SEC ACT: 1940 Act
SEC FILE NUMBER: 811-06629
FILM NUMBER: 151005042
BUSINESS ADDRESS:
STREET 1: 620 EIGHTH AVENUE
STREET 2: 49TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10018
BUSINESS PHONE: 888-777-0102
MAIL ADDRESS:
STREET 1: 620 EIGHTH AVENUE
STREET 2: 49TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10018
FORMER COMPANY:
FORMER CONFORMED NAME: MANAGED MUNICIPALS PORTFOLIO INC
DATE OF NAME CHANGE: 19920929
NSAR-B
1
answer.fil
PAGE 1
000 B000000 05/31/2015
000 C000000 886043
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 6.1
000 J000000 A
001 A000000 WA MANAGED MUNICIPALS FUND INC
001 B000000 811-6629
001 C000000 8887770102
002 A000000 620 EIGHTH AVENUE, 49TH FLOOR
002 B000000 NEW YORK
002 C000000 NY
002 D010000 10018
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
007 C010100 1
008 A000001 LEGG MASON PARTNERS FUND ADVISOR, LLC
008 B000001 A
008 C000001 801-66785
008 D010001 NEW YORK
008 D020001 NY
008 D030001 10018
008 A000002 WESTERN ASSET MANAGEMENT COMPANY
008 B000002 S
008 C000002 801-08162
008 D010002 PASADENA
008 D020002 CA
008 D030002 91101
012 A000001 AMERICAN STOCK TRANSFER & TRUST COMPANY
012 B000001 84-00416
012 C010001 BROOKLYN
012 C020001 NY
012 C030001 11219
013 A000001 KPMG LLP
013 B010001 NEW YORK
013 B020001 NY
013 B030001 10154
014 A000001 LEGG MASON INVESTOR SERVICES, LLC
014 B000001 8-53089
014 A000002 CARNES CAPITAL CORPORATION
014 B000002 8-33443
014 A000003 PERMAL (HONG KONG) LIMITED
014 B000003 8-00000
014 A000004 ROYCE FUND SERVICES, INC.
PAGE 2
014 B000004 8-28663
015 A000001 STATE STREET BANK AND TRUST COMPANY
015 B000001 C
015 C010001 BOSTON
015 C020001 MA
015 C030001 02111
015 E010001 X
018 000000 Y
019 A000000 Y
019 B000000 157
019 C000000 LEGGMASONF
020 A000001 BARCLAYS CAPITAL INC.
020 B000001 06-1031656
020 C000001 10
021 000000 10
022 A000001 WELLS FARGO & CO
022 B000001 41-0449260
022 C000001 88460
022 D000001 64277
022 A000002 JPMORGAN CHASE & CO.
022 B000002 13-3224016
022 C000002 16399
022 D000002 16415
022 A000003 CITIGROUP GLOBAL MARKETS INC.
022 B000003 11-2418191
022 C000003 22084
022 D000003 7411
022 A000004 GOLDMAN SACHS & CO.
022 B000004 13-5108880
022 C000004 14563
022 D000004 11977
022 A000005 BANK OF AMERICA-MERRILL LYNCH
022 B000005 56-2058405
022 C000005 7891
022 D000005 11167
022 A000006 MORGAN STANLEY
022 B000006 13-2655998
022 C000006 6235
022 D000006 3157
022 A000007 DEUTSCHE BANK SECURITIES, INC.
022 B000007 13-2730328
022 C000007 5676
022 D000007 0
022 A000008 BARCLAYS CAPITAL INC.
022 B000008 06-1031656
022 C000008 2100
022 D000008 1600
022 A000009 US BANCORP
022 B000009 84-1019337
022 C000009 2400
022 D000009 200
PAGE 3
022 A000010 SOUTHWEST SECURITIES, INC.
022 B000010 75-1382137
022 C000010 1964
022 D000010 0
023 C000000 168949
023 D000000 116300
024 000000 N
026 A000000 N
026 B000000 Y
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 N
028 A010000 0
028 A020000 0
028 A030000 0
028 A040000 0
028 B010000 0
028 B020000 0
028 B030000 0
028 B040000 0
028 C010000 0
028 C020000 0
028 C030000 0
028 C040000 0
028 D010000 0
028 D020000 0
028 D030000 0
028 D040000 0
028 E010000 0
028 E020000 0
028 E030000 0
028 E040000 0
028 F010000 0
028 F020000 0
028 F030000 0
028 F040000 0
028 G010000 0
028 G020000 0
028 G030000 0
028 G040000 0
028 H000000 0
030 A000000 0
030 B000000 0.00
030 C000000 0.00
031 A000000 0
031 B000000 0
PAGE 4
032 000000 0
033 000000 0
035 000000 0
036 B000000 0
038 000000 0
042 A000000 0
042 B000000 0
042 C000000 0
042 D000000 0
042 E000000 0
042 F000000 0
042 G000000 0
042 H000000 0
043 000000 0
044 000000 0
045 000000 Y
046 000000 N
047 000000 Y
048 000000 0.550
048 A010000 0
048 A020000 0.000
048 B010000 0
048 B020000 0.000
048 C010000 0
048 C020000 0.000
048 D010000 0
048 D020000 0.000
048 E010000 0
048 E020000 0.000
048 F010000 0
048 F020000 0.000
048 G010000 0
048 G020000 0.000
048 H010000 0
048 H020000 0.000
048 I010000 0
048 I020000 0.000
048 J010000 0
048 J020000 0.000
048 K010000 0
048 K020000 0.000
049 000000 N
050 000000 N
051 000000 N
052 000000 N
053 A000000 N
054 A000000 Y
054 B000000 Y
054 C000000 Y
054 D000000 N
054 E000000 N
PAGE 5
054 F000000 N
054 G000000 Y
054 H000000 Y
054 I000000 N
054 J000000 Y
054 K000000 N
054 L000000 Y
054 M000000 Y
054 N000000 N
054 O000000 Y
055 A000000 Y
055 B000000 N
056 000000 Y
057 000000 N
058 A000000 N
059 000000 Y
060 A000000 N
060 B000000 N
061 000000 0
062 A000000 Y
062 B000000 0.0
062 C000000 0.0
062 D000000 0.0
062 E000000 4.5
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 135.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
063 A000000 0
063 B000000 10.7
064 A000000 Y
064 B000000 N
066 A000000 N
067 000000 N
068 A000000 N
068 B000000 N
069 000000 N
070 A010000 Y
070 A020000 N
070 B010000 Y
070 B020000 N
070 C010000 N
PAGE 6
070 C020000 N
070 D010000 Y
070 D020000 N
070 E010000 Y
070 E020000 Y
070 F010000 Y
070 F020000 N
070 G010000 Y
070 G020000 N
070 H010000 Y
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 N
070 K010000 Y
070 K020000 N
070 L010000 Y
070 L020000 N
070 M010000 Y
070 M020000 N
070 N010000 Y
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 N
070 P020000 N
070 Q010000 N
070 Q020000 N
070 R010000 N
070 R020000 N
071 A000000 45969
071 B000000 34628
071 C000000 821207
071 D000000 4
072 A000000 12
072 B000000 39275
072 C000000 0
072 D000000 0
072 E000000 0
072 F000000 4702
072 G000000 0
072 H000000 0
072 I000000 70
072 J000000 10
072 K000000 0
072 L000000 34
072 M000000 116
072 N000000 34
072 O000000 0
072 P000000 0
PAGE 7
072 Q000000 0
072 R000000 108
072 S000000 78
072 T000000 0
072 U000000 0
072 V000000 0
072 W000000 844
072 X000000 5998
072 Y000000 0
072 Z000000 33278
072AA000000 0
072BB000000 5260
072CC010000 9210
072CC020000 0
072DD010000 33407
072DD020000 0
072EE000000 0
073 A010000 0.7800
073 A020000 0.0000
073 B000000 0.0000
073 C000000 0.0000
074 A000000 15
074 B000000 0
074 C000000 27950
074 D000000 832442
074 E000000 0
074 F000000 0
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 1616
074 K000000 0
074 L000000 10616
074 M000000 52
074 N000000 872691
074 O000000 6625
074 P000000 414
074 Q000000 0
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 216437
074 S000000 32425
074 T000000 616790
074 U010000 42841
074 U020000 0
074 V010000 14.40
074 V020000 0.00
074 W000000 0.0000
074 X000000 18025
074 Y000000 0
PAGE 8
075 A000000 0
075 B000000 605592
076 000000 13.96
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 Y
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
080 A000000 ICI MUTUAL INSURANCE COMPANY
080 C000000 60000
081 A000000 Y
081 B000000 160
082 A000000 N
082 B000000 0
083 A000000 N
083 B000000 0
084 A000000 N
084 B000000 0
085 A000000 Y
085 B000000 N
086 A010000 17
086 A020000 240
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 9
086 D020000 21758
086 E010000 9
086 E020000 216213
086 F010000 0
086 F020000 0
087 A010000 WA MANAGED MUNICIPALS FUND INC.
087 A020000 95766M105
087 A030000 MMU
088 A000000 N
PAGE 9
088 B000000 N
088 C000000 N
088 D000000 Y
SIGNATURE STEVEN FRANK
TITLE TREASURER
EX-99.77B ACCT LTTR
2
77b.txt
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Western Asset Managed Municipals Fund Inc.:
In planning and performing our audit of the financial statements
of Western Asset Managed Municipals Fund Inc.(the "Fund"), as of
and for the year ended May 31, 2015, in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), we considered the Fund's internal control over
financial reporting, including controls over safeguarding
securities, as a basis for designing our auditing procedures for
the purpose of expressing our opinion on the financial statements
and to comply with the requirements of Form N-SAR, but not for
the purpose of expressing an opinion on the effectiveness of the
Fund's internal control over financial reporting. Accordingly, we
express no such opinion.
Management of the Fund is responsible for establishing and
maintaining effective internal control over financial reporting.
In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of controls. A fund's internal control over
financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A
fund's internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of
records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the fund; (2)
provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and
that receipts and expenditures of the fund are being made only in
accordance with authorizations of management and directors of the
fund; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or
disposition of the fund's assets that could have a material
effect on the financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
A deficiency in internal control over financial reporting exists
when the design or operation of a control does not allow
management or employees, in the normal course of performing their
assigned functions, to prevent or detect misstatements on a
timely basis. A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting,
such that there is a reasonable possibility that a material
misstatement of the Fund's annual or interim financial statements
will not be prevented or detected on a timely basis.
Our consideration of the Fund's internal control over financial
reporting was for the limited purpose described in the first
paragraph and would not necessarily disclose all deficiencies in
internal control that might be material weaknesses under
standards established by the Public Company Accounting Oversight
Board (United States). However, we noted no deficiencies in the
Fund's internal control over financial reporting and its
operation, including controls over safeguarding securities that
we consider to be a material weakness as defined above as of May
31, 2015.
This report is intended solely for the information and use of
management and the Board of Directors of Western Asset Managed
Municipals Fund Inc. and the Securities and Exchange Commission
and is not intended to be and should not be used by anyone other
than these specified parties.
/s/KPMG LLP
New York, New York
July 22, 2015
Page 2
EX-99.77I NEW SECUR
3
item_77i.txt
SUB-ITEM 77I(b)
WESTERN ASSET MANAGED MUNICIPALS FUND INC.
Authorization of Variable Rate Demand Preferred Shares.
Western Asset Managed Municipals Fund Inc. (the "Fund") created
a series of up to 8,703 shares of preferred stock, par value
$.001 per share, liquidation preference $25,000 per share, is
hereby authorized and designated "Series 1 Variable Rate Demand
Preferred Stock," also referred to herein as "Series 1 VRDP" or
"Series 1 VRDP Shares," and references to "Series 1 VRDP Shares"
shall also be interpreted as references to "shares of Series 1
VRDP," as the context may require. Each share of Series 1 VRDP
shall be issued on a date determined by the Board of Directors
of the Fund or pursuant to their delegated authority; 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 or
as set forth in the Charter, as set forth in Parts I and II of
these Articles Supplementary (as defined below). Each share of
Series 1 VRDP shall be issued on a date determined by the Board
of Directors of the Fund or pursuant to their delegated
authority; have an Applicable Rate equal to the sum of 0.09% per
annum plus the Securities Industry and Financial Markets
Association ("SIFMA") Municipal Swap Index, published at 3:00
p.m., New York City time, on Wednesday, February 25, 2015, or
0.11% per annum, if the SIFMA Municipal Swap Index is not so
published, for the Initial Rate Period from, and including, the
Date of Original Issue to, and including, March 4, 2015, and
have an initial Dividend Payment Date of April 1, 2015; 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 or
as set forth in the Charter, as set forth in Parts I and II of
these Articles Supplementary. The Series 1 VRDP shall constitute
a separate series of preferred stock of the Fund and each share
of Series 1 VRDP shall be identical. Except as otherwise
provided with respect to any additional Series of VRDP, the
terms and conditions of these Articles Supplementary apply to
each Series of VRDP.
The number of Series 1 VRDP Shares that the Board of Directors
has authorized on or
prior to the date hereof for issuance is 8,703. The Board of
Directors may, from time to time,
authorize the issuance of additional VRDP Shares in accordance
with the terms hereof
Please also refer to Sub-Item 77Q1(a) of this Form N-SARS.
EX-99.77Q1 OTHR EXHB
4
item_77q1.a.txt
SUB-ITEM 77Q1(a)
WESTERN ASSET MANAGED MUNICIPALS FUND INC.
Attached please find the Articles Supplementary for the Registrant:
Articles Supplementary to the Articles of Incorporation filed on
March 4, 2015 with the State of Maryland Department of Assessments
and Taxation.
EX-99.77Q1 OTHR EXHB
5
item_77q1.d.txt
SUB-ITEM 77Q1(d)
WESTERN ASSET MANAGED MUNICIPALS FUND INC.
Authorization of Variable Rate Demand Preferred Shares.
Western Asset Managed Municipals Fund Inc. (the ?Fund?) created
a series of up to 8,703 shares of preferred stock, par value
$.001 per share, liquidation preference $25,000 per share, is
hereby authorized and designated ?Series 1 Variable Rate Demand
Preferred Stock,? also referred to herein as ?Series 1 VRDP? or
?Series 1 VRDP Shares,? and references to ?Series 1 VRDP Shares?
shall also be interpreted as references to ?shares of Series 1
VRDP,? as the context may require. Each share of Series 1 VRDP
shall be issued on a date determined by the Board of Directors
of the Fund or pursuant to their delegated authority; 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 or
as set forth in the Charter, as set forth in Parts I and II of
these Articles Supplementary (as defined below). Each share of
Series 1 VRDP shall be issued on a date determined by the Board
of Directors of the Fund or pursuant to their delegated
authority; have an Applicable Rate equal to the sum of 0.09% per
annum plus the Securities Industry and Financial Markets
Association (?SIFMA?) Municipal Swap Index, published at 3:00
p.m., New York City time, on Wednesday, February 25, 2015, or
0.11% per annum, if the SIFMA Municipal Swap Index is not so
published, for the Initial Rate Period from, and including, the
Date of Original Issue to, and including, March 4, 2015, and
have an initial Dividend Payment Date of April 1, 2015; 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 or
as set forth in the Charter, as set forth in Parts I and II of
these Articles Supplementary. The Series 1 VRDP shall constitute
a separate series of preferred stock of the Fund and each share
of Series 1 VRDP shall be identical. Except as otherwise
provided with respect to any additional Series of VRDP, the
terms and conditions of these Articles Supplementary apply to
each Series of VRDP.
The number of Series 1 VRDP Shares that the Board of Directors
has authorized on or
prior to the date hereof for issuance is 8,703. The Board of
Directors may, from time to time,
authorize the issuance of additional VRDP Shares in accordance
with the terms hereof
Please also refer to Sub-Item 77Q1(a) of this Form N-SARS.
EX-99.77Q1 OTHR EXHB
6
articles_supplementary.txt
WESTERN ASSET MANAGED MUNICIPALS FUND INC.
ARTICLES SUPPLEMENTARY CLASSIFYING AND DESIGNATING SERIES 1
VARIABLE RATE DEMAND PREFERRED STOCK
Effective Date: March 4, 2015
NYI-524626646v8
TABLE OF CONTENTS
Page
DESIGNATION OF SERIES 1 VRDP 1
DEFINITIONS 2
PART I 21
1. Number of Authorized Shares 21
2. Dividends 22
(a) Ranking 22
(b) Cumulative Cash Dividends 22
(c) Dividends Cumulative from Date of Original Issue 22
(d) Dividend Payment Dates and Adjustment Thereof 22
(e) Applicable Rates and Calculation of Dividends 23
(f) Curing a Failure to Deposit 25
(g) Dividend Payments by Fund to Tender and Paying
Agent 25
(h) Tender and Paying Agent as Trustee of Dividend
Payments by
Fund 26
(i) Dividends Paid to Holders 25
(j) Dividends Credited Against Earliest Accumulated
But Unpaid
Dividends 26
(k) Dividends Designated as Exempt-Interest Dividends.
26
3. Gross-Up Payments 26
4. Designation of Special Rate Periods 27
(a) Length of and Preconditions for Special Rate
Period 27
(b) Adjustment of Length of Special Rate Period 27
(c) Notice of Proposed Special Rate Period 27
(d) Notice of Special Rate Period 28
(e) Failure to Deliver Notice of Special Rate Period 29
(f) Other Special Rate Period Provisions 29
5. Voting Rights 29
(a) One Vote Per VRDP Share 29
(b) Voting for Additional Trustees 30
(c) Holders of VRDP Shares to Vote on Certain Other
Matters 31
(d) Fund May Take Certain Actions Without Shareholder
Approval 33
(e) Voting Rights Set Forth Herein are Sole Voting
Rights 34
(f) No Preemptive Rights or Cumulative Voting 34
(g) Sole Remedy for Fund's Failure to Pay Dividends 34
(h) Holders Entitled to Vote 34
6. Minimum VRDP Asset Coverage 34
7. VRDP Basic Maintenance Amount 34
8. Restrictions on Dividends and Other Distributions 35
TABLE OF CONTENTS
(continued)
Page
(a) Dividends on Preferred Shares Other than Series 1
VRDP 35
(b) Dividends and Other Distributions With Respect to
Common
Shares Under the 1940 Act 35
(c) Other Restrictions on Dividends and Other
Distributions 36
9. Ratings Matter 36
(a) Short-Term Ratings 36
(b) Rating Agency Restrictions 37
10. Redemption 37
(a) Optional Redemption 37
(b) Mandatory Redemption 38
(c) Notice of Redemption 43
(d) No Redemption Under Certain Circumstances 44
(e) Absence of Funds Available for Redemption 44
(f) Tender and Paying Agent as Trustee of Redemption
Payments by
Fund 45
(g) Deposit with the Tender and Paying Agent;
Shares for Which Notice of Redemption Has
Been Given Are No Longer
Outstanding 45
(h) Compliance With Applicable Law 46
(i) Only Whole VRDP Shares May Be Redeemed 46
(j) Modification of Redemption Procedures 46
11. Liquidation Rights 46
(a) Ranking 46
(b) Distributions Upon Liquidation 46
(c) Pro Rata Distributions 47
(d) Rights of Junior Shares 47
(e) Certain Events Not Constituting Liquidation 47
12. Purchase Obligation 47
13. Miscellaneous 49
(a) Amendment of or Supplements to these Articles
Supplementary 49
(b) No Fractional Shares 50
(c) Status of VRDP Shares Redeemed, Exchanged or
Otherwise
Acquired by the Fund. 50
(d) Purchase Obligation Part of VRDP Shares 50
(e) Treatment of VRDP Shares as Stock 50
(f) Board May Resolve Ambiguities 50
(g) Headings Not Determinative. 50
(h) Notices 50
TABLE OF CONTENTS
(continued)
Page
PART II 50
1. Remarketing Procedures 50
2. Remarketing Schedule 53
3. Determination of Applicable Rate 56
4. Failed Remarketing Condition 57
5. Purchase of Series 1 VRDP Shares by Remarketing Agent 57
6. Notification of Allocations 57
7. Transfers 58
8. Global Certificate 58
WESTERN ASSET MANAGED MUNICIPALS FUND INC.
ARTICLES SUPPLEMENTARY CLASSIFYING AND DESIGNATING SERIES 1
VARIABLE RATE DEMAND PREFERRED STOCK
WESTERN ASSET MANAGED MUNICIPALS FUND INC., a Maryland
corporation (the "Fund"), hereby certifies that:
FIRST: Pursuant to authority expressly vested in the Board
of Directors of the Fund by Article V Section 3 of the Fund's
Charter (as defined below), the Board of Directors has, by
resolution, authorized the issuance of 8,703 shares of preferred
stock, $.001 par value per share, classified as Variable Rate
Demand Preferred Stock with a liquidation preference of $25,000
per share in one or more series as may be authorized and issued
from time to time (each, a "Series," and each such Series being
referred to herein as a "Series of VRDP," and shares of all
such Series being referred to herein individually as a "VRDP
Share" and collectively as "VRDP Shares" or "VRDP"); and
SECOND: The preferences (including liquidation preference),
voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption, of the
Series 1 Variable Rate Demand Preferred Stock designated below
are as follows or as set forth in an amendment or supplement
hereto.
DESIGNATION OF SERIES 1 VRDP
Series 1: A series of up to 8,703 shares of preferred
stock, par value $.001 per share, liquidation preference $25,000
per share, is hereby authorized and designated "Series 1 Variable
Rate Demand Preferred Stock," also referred to herein as "Series
1 VRDP" or "Series 1 VRDP Shares," and references to "Series 1
VRDP Shares" shall also be interpreted as references to "shares
of Series 1 VRDP," as the context may require. Each share of
Series 1 VRDP shall be issued on a date determined by the Board
of Directors of the Fund or pursuant to their delegated
authority; 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 or as set forth in the Charter, as set forth in
Parts I and II of these Articles Supplementary (as defined
below). Each share of Series 1 VRDP shall be issued on a date
determined by the Board of Directors of the Fund or pursuant to
their delegated authority; have an Applicable Rate equal to the
sum of 0.09% per annum plus the Securities Industry and
Financial Markets Association ("SIFMA") Municipal Swap Index,
published at 3:00 p.m., New York City time, on Wednesday,
February 25, 2015, or 0.11% per annum, if the SIFMA Municipal
Swap Index is not so published, for the Initial Rate Period
from, and including, the Date of Original Issue to, and
including, March 4, 2015, and have an initial Dividend Payment
Date of April 1, 2015; 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 or as set forth in the Charter, as set forth in
Parts I and II of these Articles Supplementary. The Series 1
VRDP shall constitute a separate series of preferred stock of
the Fund and each share of Series 1 VRDP shall be identical.
Except as otherwise provided with respect to any additional
Series of VRDP, the terms and conditions of these Articles
Supplementary apply to each Series of VRDP.
The number of Series 1 VRDP Shares that the Board of
Directors has authorized on or prior to the date hereof for
issuance is 8,703. The Board of Directors may, from time to
time, authorize the issuance of additional VRDP Shares in
accordance with the terms hereof.
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:
(a) "Agent Member" means a Person with an account at the
Securities Depository that holds one or more Series 1
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.
(b) "Alternate VRDP Purchase Agreement" means any agreement
with a successor liquidity provider replacing the VRDP
Purchase Agreement (or any replacement therefor) upon
its termination in accordance with its terms and
containing a purchase obligation substantially
identical to the Purchase Obligation therein as
determined by the Fund.
(c) "Applicable Base Rate" means (i) with respect to a
Rate Period of fewer than 49 days, the greater of (a)
the SIFMA Municipal Swap Index Rate or (b) the LIBOR
Rate and (ii) with respect to a Rate Period of 49 or
more days, the LIBOR Rate.
(d) "Applicable Percentage" shall have the meaning set
forth in the definition of "Maximum Rate."
(e) "Applicable Rate" means the dividend rate per annum
on any Series 1 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."
(f) "Applicable Rate Determination" means each periodic
operation of the process of determining the Applicable
Rate for the Series 1 VRDP Shares for a Subsequent
Rate Period, as provided in the Remarketing Agreement
and Part II of these Articles Supplementary.
(g) "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 (as provided below), 200 basis points
(2.00%) (up to 59 days of a continued Failed
Remarketing Condition), 225 basis points (2.25%) (60
days but fewer than 90 days of a continued Failed
Remarketing Condition), 250 basis points (2.50%) (90
days but fewer than 120 days of a continued Failed
Remarketing Condition), 275 basis points (2.75%) (120
days but fewer than 150
- 2 -
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%)
the Failed Remarketing Condition no longer exists due
to the successful Remarketing of all Purchased VRDP
Shares, 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 the period described in the
foregoing proviso 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.
(h) "Articles Supplementary" means these Articles
Supplementary Classifying and Designating Series 1
Variable Rate Demand Preferred Stock, as amended or
supplemented from time to time in accordance with the
provisions hereof.
(i) "Beneficial Owner" means a Person, including the
Liquidity Provider to the extent it is at any time
the beneficial owner of Series 1 VRDP Shares
(irrespective of any assignment or transfer by the
Liquidity Provider of its voting rights), in whose
name Series 1 VRDP Shares are recorded as beneficial
owner of such VRDP Shares by the Securities
Depository, an Agent Member or another securities
intermediary on the records of such Securities
Depository, Agent Member or securities intermediary,
as the case may be, or such Person's subrogee.
(j) "Board of Directors" means the Board of Directors of
the Fund or any duly authorized committee thereof.
(k) "Business Day" means a day (a) other than a day on
which commercial banks in The City of New York, New
York are required or authorized by law or executive
order to close and (b) on which the New York Stock
Exchange is not closed.
(l) "Charter" means the Articles of Incorporation of the
Fund, as amended, supplemented and corrected from
time to time, as filed with, and accepted for record
by, the State Department of Assessments and Taxation of
Maryland.
(m) "Code" means the Internal Revenue Code of 1986, as
amended.
(n) "Common Shares" means the shares of common stock,
par value $0.001 per share, of the Fund.
(o) "Cure Date" means the VRDP Basic Maintenance Cure
Date or the Minimum VRDP Asset Coverage Cure Date, as
the case may be.
(p) "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 Fund 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.
(q) "Date of Original Issue," with respect to any share of
Series 1 VRDP, means the date on which the Fund
initially issued such share of Series 1 VRDP.
(r) "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 (long-term
or short-term as to the applicable type of
obligation) 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 any
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; and
(5) any letter of credit from a bank or other
financial institution that has a credit rating
from at least one NRSRO that is the highest
applicable rating generally ascribed by such
NRSRO to bank deposits or short- term debt of
banks or other financial institutions as of the
date of these Articles Supplementary (or such
rating's future equivalent).
(s) "Discounted Value," as of any Valuation Date, means,
with respect to a Rating Agency Eligible Asset, the
quotient of the Market Value thereof divided by the
applicable discount factor, or as otherwise set
forth in the applicable Rating Agency Guidelines as
then used by the Fund.
(t) "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 Business Day of each calendar month.
(u) "Dividend Period," with respect to the Series 1 VRDP
Shares, means the period from, and including, the
Date of Original Issue in connection with the
initial issuance of Series 1 VRDP Shares to, but
excluding, the initial Dividend Payment Date for the
Series 1 VRDP Shares and any period thereafter from,
and including, one Dividend Payment Date for the
Series 1 VRDP Shares to, but excluding, the next
succeeding Dividend Payment Date for the Series 1 VRDP
Shares.
(v) "Effective Leverage Ratio" shall have the meaning set
forth in the VRDP Fee Agreement.
(w) "Effective Leverage Ratio Cure Period" shall have the
meaning set forth in the VRDP Fee Agreement.
(x) "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 the relevant 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.
(y) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(z) "Extraordinary Corporate Event" means, as to the
Liquidity Provider, (i) the consolidation or
amalgamation with, or the 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 or
amalgamation with, or the merger with and into, or the
transfer of all or substantially all of the Liquidity
Provider's assets to, another entity; 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 all of
the obligations of the Liquidity Provider under the
terms of the VRDP Purchase Agreement and (b) has
short-term debt ratings in one of the two highest
rating categories from the Requisite NRSROs or such
other short- term debt ratings, if any, as may be
required for the Series 1 VRDP Shares to satisfy the
eligibility criteria under Rule 2a-7 under the 1940
Act and (y) the Liquidity Provider has provided
notice in writing to the Fund confirming the
information described in clause (x) at least 10 days
prior to the scheduled date of the applicable listed
occurrence in clause (i) above.
(aa) "Failed Remarketing Condition" means a Failed
Remarketing Condition- Purchased VRDP Shares or a
Failed Remarketing Condition-Unpurchased VRDP Shares.
(bb) "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 Series 1 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 Series 1 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 Purchase
Agreement.
(cc) "Failed Remarketing Condition-Purchased VRDP Shares
Redemption" means redemption by the Fund, at a
redemption price equal to $25,000 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
Series 1 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 period of six
months during which such VRDP Shares 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 Fund on a
first-in, first-out basis, in accordance with and
subject to the provisions of the VRDP Fee Agreement and
these Articles Supplementary.
(dd) "Failed Remarketing Condition-Unpurchased VRDP Shares"
means that a Beneficial Owner (other than the
Liquidity Provider or its affiliates) continues to
hold Series 1 VRDP Shares that were subject to
a proper Tender after any
Purchase Date for such VRDP Shares 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.
(ee) "Failure to Deposit" means, with respect to shares of
Series 1 VRDP, a failure by the Fund 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 for shares of such Series in funds available on
such redemption date 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 1 of these Articles
Supplementary; provided, however, that the foregoing
clause (B) shall not apply to the Fund's failure to
pay the Redemption Price in respect of Series 1 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.
(ff) "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 relevant Purchase Date indicating the number of
Series 1 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 Fund or the Tender
and Paying Agent on behalf of the Fund.
(gg) "Fitch" means Fitch Ratings, Inc., a Delaware
corporation, and its successors. (hh) "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) only taking into account the regular
federal income tax with respect to dividends received
from the Fund (that is, without giving effect to any
other federal tax based on income, such as (A) the
alternative minimum tax or (B) the "Medicare tax,"
which at the date hereof is imposed at the rate of 3.8%
on the net investment income (which includes taxable
dividends and net capital gains) of certain
individuals, trusts and estates); and (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 at the maximum marginal regular federal 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.
(ii) "Holder" means a Person in whose name a Series 1 VRDP
Share is registered in the registration books of the
Fund maintained by the Tender and Paying Agent.
(jj) "Initial Rate Period," with respect to the Series 1
VRDP Shares, means the period commencing on and
including the Date of Original Issue thereof and
ending on, and including, March 4, 2015, the next
succeeding Wednesday, as set forth under "Designation
of Series 1 VRDP" above.
(kk) "Investment Adviser" means Legg Mason Partners Fund
Advisor, LLC, or any successor entity.
(ll) "Late Charge" shall have the meaning specified in
paragraph (e)(i)(C) of Section 2 of Part I of these
Articles Supplementary.
(mm) "LIBOR Dealer" means Citigroup Global Markets Inc. and
such other dealer or dealers as the Fund from time to
time may appoint or in lieu of any thereof, their
respective affiliates and successors.
(nn) "LIBOR Rate" means, on any Rate Determination Date,
(i) the rate for deposits in U.S. dollars for the
designated Rate Period, which appears on Reuters
display page LIBOR01 ("Page LIBOR01") (or such other
page as may replace that page on that service, or such
other service as may be selected by the LIBOR Dealer
or its successors that are LIBOR Dealers) as of 11:00
a.m. London time, on the day that is the London
Business Day preceding the Rate Determination Date
(the
"LIBOR Determination Date"), or (ii) if such rate
does not appear on Page LIBOR01 or such other page as
may replace such Page LIBOR01, (A) the LIBOR Dealer
shall determine the arithmetic mean of the offered
quotations of the Reference Banks to leading banks in
the London interbank market for deposits in
U.S. dollars for the designated Rate Period in an
amount determined by such LIBOR Dealer by reference
to requests for quotations as of approximately 11:00
a.m. (London time) on such date made by such LIBOR
Dealer to the Reference Banks, (B) if at least two of
the Reference Banks provide such quotations, the
LIBOR Rate shall equal such arithmetic mean of such
quotations, (C) if only one or none of the Reference
Banks provide such quotations, the LIBOR Rate shall be
deemed to be the arithmetic mean of the offered
quotations that leading banks in The City of New York
selected by the LIBOR Dealer (after obtaining the
Fund's approval) are quoting on the relevant LIBOR
Determination Date for deposits in
U.S. dollars for the designated Rate Period in an
amount determined by the LIBOR Dealer (after
obtaining the Fund's approval) that is representative
of a single transaction in such market at such
time by reference to the principal London offices
of leading banks in the London interbank market;
provided, however, that if no LIBOR Dealer quotes a
rate required to determine the LIBOR Rate, the LIBOR
Rate will be determined on the basis of the quotation
or quotations furnished by any Substitute LIBOR Dealer
or Substitute LIBOR Dealers selected by the Fund to
provide such rate or rates not being supplied by the
LIBOR Dealer; provided further, that if the LIBOR
Dealer and Substitute LIBOR Dealers are required but
unable to determine a rate in accordance with at least
one of the procedures provided above, the LIBOR Rate
shall be the LIBOR Rate as determined on the previous
Rate Determination Date. If the number of days in a
Rate Period shall be (i) seven or more but fewer than
21 days, such rate shall be the seven-day LIBOR Rate;
(ii) 21 or more but fewer than 49 days, such rate
shall be the one-month LIBOR rate; (iii) 49 or more
but fewer than 77 days, such rate shall be the two-
month LIBOR rate; (iv) 77 or more but fewer than 112
days, such rate shall be the three-month LIBOR rate;
(v) 112 or more but fewer than 140 days such rate
shall be the four-month LIBOR rate; (vi) 140 or more
but fewer than 168 days, such rate shall be the five-
month LIBOR rate; (vii) 168 or more but fewer than 189
days, such rate shall be the six-month LIBOR rate;
(viii) 189 or more but fewer than 217 days, such rate
shall be the seven-month LIBOR rate; (ix) 217 or more
but fewer than 252 days, such rate shall be the eight-
month LIBOR rate; (x) 252 or more but fewer than 287
days, such rate shall be the nine- month LIBOR rate;
(xi) 287 or more but fewer than 315 days, such rate
shall be the ten-month LIBOR rate; (xii) 315 or more
but fewer than 343 days, such rate shall be the
eleven-month LIBOR rate; and (xiii) 343 or more but
fewer than 365 days, such rate shall be the twelve-
month LIBOR rate.
(oo) "Liquidation Preference," with respect to a given
number of shares of Series 1 VRDP, means $25,000 times
that number.
(pp) "Liquidity Account" shall have the meaning specified
in paragraph (b)(ii)(B) of Section 10 of Part I of
these Articles Supplementary.
(qq) "Liquidity Account Investments" means any Deposit
Security or any other security or investment owned
by the Fund that is rated at least A3/A- or the
equivalent rating by each NRSRO then rating such other
security or investment, provided that any such other
security or investment shall be so rated by at least
one NRSRO.
(rr) "Liquidity Provider" means any entity acting in such
capacity pursuant to a VRDP Purchase Agreement,
initially, Citibank, N.A.
(ss) "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 ratings
categories from the Requisite NRSROs or such other
short-term debt ratings, if any, as may be required
for the Series 1 VRDP Shares to satisfy the
eligibility criteria under Rule 2a-7 under the 1940
Act.
(tt) "Liquidity Provider Ratings Event Termination Date"
means the date established by the Tender and Paying
Agent, acting upon written instructions of the Fund
pursuant to the Tender and Paying Agent Agreement, for
termination of the VRDP Purchase Agreement upon the
occurrence of a Liquidity Provider Ratings Event,
which date shall be not less than 16 days nor more
than 30 days following such Liquidity Provider Ratings
Event.
(uu) "London Business Day" means any day on which
commercial banks are generally open for business in
London.
(vv) "Mandatory Purchase" means the mandatory purchase of
Outstanding Series 1 VRDP Shares by the Liquidity
Provider pursuant to the VRDP Purchase Agreement in
connection with a Mandatory Purchase Event.
(ww) "Mandatory Purchase Date" means the Purchase Date for
a Mandatory Purchase determined in accordance with
these Articles Supplementary and the VRDP Purchase
Agreement.
(xx) "Mandatory Purchase Event" means (i) in connection
with the termination of the VRDP 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 Purchase Agreement then in effect and (b) the
Fund shall not have obtained and delivered to the
Tender and Paying Agent an Alternate VRDP Purchase
Agreement with a termination date not earlier than
180 days from the Scheduled Termination Date of the
VRDP Purchase Agreement then in effect or (ii) in
connection with the termination of the VRDP 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 Fund shall not have obtained and
delivered to the Tender and Paying
Agent an Alternate VRDP 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 Purchase Agreement then in effect. 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.
(yy) "Mandatory Purchase Notice" means, in connection with
the Mandatory Purchase of Series 1 VRDP Shares, a
notice prepared by the Fund and delivered by the Fund
or delivered by the Tender and Paying Agent on behalf
of the Fund to the Holders and the Liquidity Provider
specifying a Mandatory Purchase Date.
(zz) "Mandatory Tender," with respect to a Mandatory
Tender Event, means the mandatory tender of all
Series 1 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, Series 1 VRDP Shares remain unsold and
the Remarketing Agent does not purchase for its own
account the unsold Series 1 VRDP Shares tendered to
the Tender and Paying Agent for Remarketing (provided
that the Remarketing Agent may seek to sell such
Series 1 VRDP Shares in a subsequent Remarketing
prior to the Purchase Date), for purchase by the
Liquidity Provider at the Purchase Price pursuant to
Section 1 of Part II of these Articles Supplementary
and the VRDP Purchase Agreement.
(aaa) "Mandatory Tender Event" means (a) each failure by
the Fund to make a scheduled payment of dividends on
any Series 1 VRDP Shares 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 a subsequent Liquidity Provider Ratings Event,
following restoration of the short-term debt ratings
to the requisite level, shall constitute a new
Mandatory Tender Event); (c) the Fund fails to pay
the Liquidity Provider the applicable fee due in
advance under the terms of the VRDP Fee Agreement by
seven Business Days prior to the beginning of the
month to which such payment relates and the Liquidity
Provider (in its sole discretion) thereafter provides
written notice to the Fund that such failure to pay
such fee constitutes a Mandatory Tender Event; (d)
the eighth day prior to the scheduled date of the
occurrence of an Extraordinary Corporate Event; (e) the
Fund shall have obtained and delivered to the Tender
and Paying Agent an Alternate VRDP 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 Purchase Agreement being
replaced; (f) the Fund shall have provided a Notice of
Proposed Special Rate Period in accordance with these
Articles Supplementary; (g) the Fund breaches its
Effective Leverage Ratio covenant with the Liquidity
Provider in the VRDP Fee Agreement and fails to cure
such breach within the Effective Leverage Ratio Cure
Period, and
- 11 -
the Liquidity Provider (in its sole discretion)
thereafter provides written notice to the Fund that
the failure to timely cure such breach constitutes a
Mandatory Tender Event (subject to the Fund curing
such breach prior to the delivery date of such notice
from the Liquidity Provider); or (h) the occurrence
of an Optional Early Replacement Event.
(bbb) "Mandatory Tender Notice" means, in connection with
the Mandatory Tender of Series 1 VRDP Shares, a notice
prepared by the Fund and delivered in accordance with
the VRDP Purchase Agreement by the Fund or delivered
by the Tender and Paying Agent on behalf of the Fund
to the Holders and the Liquidity Provider specifying a
Mandatory Tender Event and Purchase Date.
(ccc) "Market Value" of any asset of the Fund means for
fixed income securities (which may include, but are
not limited to, corporate, government, municipal,
mortgage-backed, collateralized mortgage obligations
and asset-backed securities) and certain derivative
instruments the prices supplied by independent third-
party pricing services, which may use market prices
or broker/dealer quotations or a variety of valuation
techniques and methodologies. The independent third-
party pricing services use inputs that are observable
such as issuer details, interest rates, yield curves,
prepayment speeds, credit risks/spreads, default
rates and quoted prices for similar securities.
Short-term fixed income securities that will mature in
60 days or less are valued at amortized cost, unless
it is determined that using this method would not
reflect an investment's fair value. Futures contracts
are valued daily at the settlement price established
by the board of trade or exchange on which they are
traded. If independent third-party pricing services
are unable to supply prices for a portfolio
investment, or if the prices supplied are deemed by
the Investment Adviser to be unreliable, the market
price may be determined by the Investment Adviser
using quotations from one or more broker/dealers or at
the transaction price if the security has recently
been purchased and no value has yet been obtained from
a pricing service or pricing broker. When reliable
prices are not readily available, such as when the
value of a security has been significantly affected by
events after the close of the exchange or market on
which the security is principally traded, but before
the Fund calculates its net asset value, the Fund
values these securities as determined in accordance
with procedures approved by the Fund's Board of
Directors. The Fund uses valuation techniques to
measure fair value that are consistent with the market
approach and/or income approach, depending on the
type of security and the particular circumstance. The
market approach uses prices and other relevant
information generated by market transactions involving
identical or comparable securities. The income
approach uses valuation techniques to discount
estimated future cash flows to present value.
(ddd) "Maximum Rate" means, for the Series 1 VRDP Shares
on any Rate Determination Date or in respect of the
occurrence of a Failed Remarketing Condition for
shares of such Series, the Applicable Percentage of
the Applicable Base Rate plus the Applicable Spread.
The Maximum Rate for the Series 1 VRDP Shares will
depend on the long-term rating assigned to the Series
1 VRDP Shares, the length of the Rate Period and
whether or not the Fund has given
notification 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
the Series 1 VRDP Shares for that Rate Period. The
Applicable Percentage of the Applicable Base Rate is as
follows:
Long-
Term
Ratings
*
Appli
cable
Perce
ntage
of
Appli
cable
Base
Rate-
No
Notif
icati
on
Moody's
S&P/Fitch
Aa3 to Aaa
AA- to AAA
100%
Baa3 to A1
BBB- to A+
135%
Below Baa3**
Below BBB-**
150%
* And/or the equivalent ratings of another Rating Agency
then rating the Series 1 VRDP Shares utilizing the
higher of the ratings of the Rating Agencies then
rating the Series 1 VRDP Shares.
** Includes unrated, if no Rating Agency is then rating the
Series 1 VRDP Shares.
provided, however, that in the event the Fund 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 the Series 1 VRDP Shares for that Rate Period, the
Applicable Percentage in the foregoing table shall be divided by
the quantity 1 minus the maximum marginal regular federal
personal income tax rate applicable to ordinary income or the
maximum marginal regular federal corporate income tax rate
applicable to ordinary income, whichever is greater.
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 Remarketing Agreement, provided that, notwithstanding any
provision to the contrary in the Remarketing Agreement,
following such adjustment, the Maximum Rate is equal to or
higher than the rates determined as set forth above without
giving effect to such adjustment, and immediately following any
such upward adjustment, the Fund would be in compliance with the
Minimum VRDP Asset Coverage and each applicable VRDP Basic
Maintenance Amount. Furthermore, in the event of Special Rate
Periods of greater than 364 days, the Maximum Rate may be
subject to upward adjustment as provided in the Remarketing
Agreement, provided that, notwithstanding any provision to the
contrary in the Remarketing Agreement, immediately following
any such upward adjustment, the Fund would be in compliance
with the Minimum VRDP Asset Coverage and each applicable VRDP
Basic Maintenance Amount.
A Maximum Rate in effect in respect of a Failed
Remarketing Condition will continue to be the Applicable Rate
(i) until the first 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
28 Rate Period Days or fewer and (ii) until the first 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 28 Rate Period Days.
Notwithstanding any provision to the contrary in the
Remarketing Agreement, in no event shall the Maximum Rate exceed
15%; provided, however, that in the event the Fund 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 Series 1 VRDP Shares for that Rate Period, the
Maximum Rate shall not exceed 15% divided by the quantity 1
minus the maximum marginal regular federal personal income tax
rate applicable to ordinary income or the maximum marginal
regular federal corporate income tax rate applicable to ordinary
income, whichever is greater.
(eee) "Minimum Rate Period" means any Rate Period consisting
of seven Rate Period Days, as adjusted to reflect any
changes when the regular day that is a Rate
Determination Date is not a Business Day.
(fff) "Minimum VRDP Asset Coverage" means asset coverage, as
defined in Section 18(h) of the 1940 Act as of the
date of the VRDP Fee Agreement with such changes
thereafter as agreed with the prior written consent of
the Liquidity Provider, of at least 200% or such
higher percentage as may be required and specified in
the VRDP Fee Agreement, but, in any event, not more
than 250%, with respect to all outstanding senior
securities of the Fund which are 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 common stock).
(ggg) "Minimum VRDP Asset Coverage Cure Date," means, with
respect to the failure by the Fund to maintain the
Minimum VRDP Asset Coverage as of the close of
business on the last Business Day of any month (as
required by Section 6 of Part I of these Articles
Supplementary), the seventh Business Day of the
following month.
(hhh) "Moody's" means Moody's Investors Service, Inc., a
Delaware corporation, and its successors.
(iii) "Municipal Obligations" means municipal
securities as described under "The Fund's Investments
- Municipal Obligations" in the Offering Memorandum.
(jjj) "1940 Act" means the Investment Company Act of 1940,
as amended.
(kkk) "Notice of Proposed Special Rate Period" shall have
the meaning specified in paragraph (c) of Section 4 of
Part I of these Articles Supplementary.
(lll) "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 to the VRDP Purchase Agreement.
(mmm) "Notice of Redemption" shall have the meaning
specified in paragraph (c) of Section 10 of Part I of
these Articles Supplementary.
(nnn) "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, 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 Series 1 VRDP Shares for sale on a Purchase Date
pursuant to Section 1 of Part II of these Articles
Supplementary.
(ooo) "Notice of Special Rate Period" shall have the meaning
specified in paragraph (d)(i) of Section 4 of Part I
of these Articles Supplementary.
(ppp) "Notice of Tender" means, in connection with an
Optional Tender, a notice, substantially in the form
attached to the Tender and Paying Agent Agreement,
delivered by a Beneficial Owner or its Agent Member to
the Tender and Paying Agent, indicating an intention
to tender Series 1 VRDP Shares for sale on a
Purchase Date pursuant to Section 1 of Part II of these
Articles Supplementary.
(qqq) "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 Fund or the Liquidity
Provider, including, at the date hereof, Fitch, Moody's
and S&P.
(rrr) "Offering Memorandum" means the Offering Memorandum
of the Fund relating to the offering and sale of
Series 1 VRDP Shares dated March 2, 2015, as amended,
revised or supplemented from time to time, including
in connection with any Remarketing, if applicable, or
offering of additional Series 1 VRDP Shares, if
applicable.
(sss) "Optional Replacement Increased Cost Event" means the
delivery of a certificate by the Liquidity Provider to
the Fund pursuant to Section 2.07(b)(2) of the VRDP
Fee Agreement in respect of compensation for certain
increased costs and similar amounts.
(ttt) "Optional Replacement Ratings Event" means, at any
time, the Liquidity Provider shall fail to maintain
short-term debt ratings in the highest ratings
category from each Rating Agency.
(uuu) "Optional Early Replacement Event" means, following
the occurrence and during the continuance of an
Optional Replacement Ratings Event or following the
occurrence of an Optional Replacement Increased Cost
Event, the Fund shall have obtained and delivered to
the Tender and Paying Agent an Alternate VRDP Purchase
Agreement and provided notice thereof (which notice
also designates an Optional Early Termination Date) to
the Holders and the Liquidity Provider in accordance
with the Tender and Paying Agent Agreement and at any
time prior to the 30th calendar day preceding the
then-prevailing Scheduled Termination Date. The date
of the occurrence of the Optional Early Replacement
Event shall be the date of such notice.
(vvv) "Optional Early Termination Date" means the date
established by the Tender and Paying Agent, acting
upon written instructions of the Fund pursuant to the
Tender and Paying Agent Agreement, for termination
of the VRDP Purchase Agreement upon the occurrence of
an Optional Early Replacement Event, which date shall
be not less than 16 days nor more than 30 days
following such Optional Early Replacement Event.
(www) "Optional Tender" means any tender of Series 1 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 Series 1
VRDP Shares remain unsold and the Remarketing Agent
does not purchase for its own account the unsold
Series 1 VRDP Shares tendered to the Tender and Paying
Agent for Remarketing (provided that the Remarketing
Agent may seek to sell such Series 1 VRDP Shares in
a subsequent Remarketing prior to the Purchase Date),
for purchase by the Liquidity Provider pursuant to
Section 1 of Part II of these Articles Supplementary
and the VRDP Purchase Agreement.
(xxx) "Other Special Rate Period Provisions" shall have the
meaning specified in paragraph (f) of Section 4 of
Part I of these Articles Supplementary.
(yyy) "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 Fund except,
without duplication, (i) any shares of such Series
theretofore cancelled or delivered to the Tender and
Paying Agent (or other relevant tender and paying
agent) for cancellation or redemption by the Fund,
(ii) any shares of such Series with respect to which,
in the case of Series 1 VRDP Shares, the Fund has
given a Notice of Redemption and irrevocably
deposited with the Tender and Paying Agent sufficient
Deposit Securities to redeem such VRDP Shares,
pursuant to Section 10 of Part I of these Articles
Supplementary or, in the case of VRDP Shares of any
other Series, the Fund has taken the equivalent
action under the statement applicable to such shares,
(iii) any shares of such Series as to which the Fund
shall be a Beneficial Owner, and (iv) any shares of
such Series represented by any certificate in lieu
of which a new certificate has been executed and
delivered by the Fund; provided, however, with
respect to clause (ii), any such Series 1 VRDP Share
will be deemed to be Outstanding for purposes of the
VRDP Purchase Agreement until redeemed by the Fund.
(zzz) "Person" means and includes an individual, a
partnership, a corporation, a limited liability
company, a trust, an unincorporated association, a
joint venture or other entity or a government or any
agency or political subdivision thereof.
(aaaa) "Preferred Shares" means the shares of preferred stock
of the Fund, including the VRDP Shares of each Series.
(bbbb) "Preliminary Notice of Purchase" shall have the meaning
specified in paragraph
(b) of Section 2 of Part II of these Articles
Supplementary.
(cccc) "Purchase Date," with respect to any purchase of Series
1 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 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 Fund 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 Fund obtaining
an Alternate VRDP Purchase Agreement may not be later
than the Business Day immediately preceding the
termination of the VRDP Purchase Agreement being
replaced; and
(D) the Purchase Date in connection with a Notice of
Proposed Special Rate Period may not be later than the
first day of the proposed Special Rate Period.
(dddd) "Purchase Obligation" means the unconditional and
irrevocable obligation of the Liquidity Provider during
the term and pursuant to the terms of the VRDP
Purchase Agreement to purchase Outstanding Series 1
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 Series 1 VRDP Shares.
(eeee) "Purchase Price" means an amount equal to the
Liquidation Preference of any Series 1 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.
(ffff) "Purchased VRDP Shares" means all Series 1 VRDP
Shares purchased by the Liquidity Provider pursuant
to Article II of the VRDP Purchase Agreement, so long
as the Liquidity Provider continues to be the
beneficial owner for federal income tax purposes of
such Series 1 VRDP Shares.
(gggg) "Rate Determination Date" means, with respect to the
Series 1 VRDP Shares, the last day of a Rate Period
for the Series 1 VRDP Shares 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.
(hhhh) "Rate Period," with respect to the Series 1 VRDP
Shares, means the Initial Rate Period and any
Subsequent Rate Period, including any Special Rate
Period.
(iiii) "Rate Period Days," for any Rate Period, means the
number of days in such Rate Period.
(jjjj) "Rating Agency" means, at any time, each NRSRO,
if any, then providing a rating for the Series 1 VRDP
Shares pursuant to the request of the Fund, including,
at the date hereof, Fitch and Moody's.
(kkkk) "Rating Agency Certificate" has the meaning
specified in paragraph (b) of Section 7 of Part I of
these Articles Supplementary.
(llll) "Rating Agency Eligible Assets" means assets of
the Fund set forth in the applicable Rating Agency
Guidelines as eligible for inclusion in calculating
the Discounted Value of the Fund's assets in
connection with the Rating Agency's ratings of Series
1 VRDP Shares.
(mmmm) "Rating Agency Guidelines" means the guidelines
provided by each Rating Agency, as may be amended,
supplemented or replaced from time to time, applied by
such Rating Agency in connection with the Rating
Agency's rating of Series 1 VRDP Shares.
(nnnn) "Redemption Date" shall have the meaning specified in
paragraph (c) of Section 10 of Part I of these Articles
Supplementary.
(oooo) "Redemption Price" means the applicable redemption
price specified in paragraph (a) or (b) of Section 10
of Part I of these Articles Supplementary.
(pppp) "Reference Banks" means four major banks in the
London interbank market selected by the Remarketing
Agent or its affiliates or successors or such other
party as the Fund may from time to time appoint.
(qqqq) "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.
(rrrr) "Related Party Termination Date" means the
effective date of the termination of the VRDP
Purchase Agreement in accordance with its terms
following the occurrence of a Related Party
Termination Event.
(ssss) "Related Party Termination Event" means the Liquidity
Provider becoming a Related Party of the Fund other
than through the acquisition of Series 1 VRDP Shares
pursuant to the terms of the VRDP Purchase Agreement.
(tttt) "Remarketing" means the remarketing of Series 1
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 Remarketing
Agreement and these Articles Supplementary.
(uuuu) "Remarketing Agent" means the entity appointed as
such with respect to the Series 1 VRDP Shares by a
resolution of the Board of Directors and any
additional or successor entity appointed by the
Board of Directors which has entered into a
Remarketing Agreement with the Fund, initially
Citigroup Global Markets Inc.
(vvvv) "Remarketing Agreement" means the Remarketing
Agreement, with respect to the Series 1 VRDP Shares,
dated as of March 4, 2015, between the Fund and the
initial Remarketing Agent, as amended, modified or
supplemented from time to time, or any similar
agreement with a successor Remarketing Agent.
(wwww) "Remarketing Notice" shall have the meaning specified
in paragraph (b) of Section 2 of Part II of these
Articles Supplementary.
(xl) "Remarketing Procedures" means the procedures for
conducting Remarketings set forth in Part II of these
Articles Supplementary.
(yyyy) "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
in Rule 2a-7 under the 1940 Act) the security, that
NRSRO.
(zzzz) "S&P" means Standard & Poor's Ratings Services, a
Standard & Poor's Financial Services LLC business, and
its successors.
(aaaaa) "Scheduled Termination Date" means March 2, 2016, or
any succeeding date to which the term of the VRDP
Purchase Agreement of the initial Liquidity Provider
is extended, or, as the case may be, the initial
Scheduled Termination Date of any Alternate VRDP
Purchase Agreement, or any succeeding date to which
the term of the Alternate VRDP Purchase Agreement is
extended.
(bbbbb) "SEC" means the Securities and Exchange
Commission. (ccccc) "Securities Act" means the
Securities Act of 1933, as amended.
(ddddd) "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 Series
1 VRDP Shares.
(eeeee) "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 4:00 p.m., New York City time, on the Rate
Determination Date.
(fffff) "SIFMA Municipal Swap Index Rate" means, on any
Rate Determination Date,
(i) the SIFMA Municipal Swap Index produced and made
available on such date, or (ii) if such index is not
made available by 4:00 p.m., New York City time, on
such date, the SIFMA Municipal Swap Index Rate as in
effect on the previous Rate Determination Date.
(ggggg) "Special Rate Period," with respect to the Series 1
VRDP Shares, means a Rate Period established in
accordance with paragraph (a) of Section 4 of Part I of
these Articles Supplementary.
(hhhhh) "Special Redemption Provisions" shall have the meaning
specified in paragraph (a)(i) of Section 10 of Part I
of these Articles Supplementary.
(iiiii) "Subsequent Rate Period" with respect to shares of
Series 1 VRDP, means the period from, and including,
the first 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
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 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.
(jjjjj) "Substitute LIBOR Dealer" means any LIBOR Dealer
selected by the Fund, provided that none of such
entities shall be an existing LIBOR Dealer.
(kkkkk) "Taxable Allocation" shall have the meaning specified
in paragraph (a) of Section 3 of Part I of these
Articles Supplementary.
(lllll) "Tender" means an Optional Tender or Mandatory
Tender, as applicable. (mmmmm) "Tender and Paying Agent"
means The Bank of New York Mellon, or any
successor Person, that has entered into an agreement
with the Fund to act in such capacity as the Fund'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 and
remarketings with respect to the Series 1 VRDP Shares.
(nnnnn) "Tender and Paying Agent Agreement" means the Tender
and Paying Agent Agreement, with respect to the Series
1 VRDP Shares, dated as of March 4, 2015, between the
Fund and the Tender and Paying Agent, as amended,
modified or supplemented from time to time, or any
similar agreement with a successor Tender and Paying
Agent.
(ooooo) "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.
(ppppp) "Valuation Date" means each date the Fund is
required pursuant to Rating Agency Guidelines to
determine whether it is maintaining the VRDP Basic
Maintenance Amount.
(qqqqq) "Voting Period" shall have the meaning specified in
paragraph (b)(i) of Section 5 of Part I of these
Articles Supplementary.
(rrrrr) "VRDP Basic Maintenance Amount," as of any
Valuation Date, shall have the meaning set forth in
the Rating Agency Guidelines.
(sssss) "VRDP Basic Maintenance Cure Date," with respect
to the failure by the Fund to satisfy the VRDP 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 calendar days
following such Valuation Date.
(ttttt) "VRDP Basic Maintenance Report" shall have the
meaning set forth in the Rating Agency Guidelines.
(uuuuu) "VRDP Fee Agreement" means the Variable Rate Demand
Preferred Stock (VRDP) Fee Agreement, with respect
to Series 1 VRDP Shares, dated as of March 4, 2015,
between the Fund and the initial Liquidity Provider,
as amended, modified or supplemented from time to
time, or any similar agreement with a successor
Liquidity Provider.
(xxv) "VRDP Purchase Agreement" means the Variable Rate
Demand Preferred Stock (VRDP) Purchase Agreement,
with respect to Series 1 VRDP Shares, dated as of
March 4, 2015, between the Tender and Paying
Agent and the initial Liquidity Provider, as
amended, modified or supplemented, or any Alternate
VRDP Purchase Agreement.
PART I
1. Number of Authorized Shares.
The initial number of authorized shares constituting
Series 1 VRDP is as set forth above under the title "Designation
of Series 1 VRDP."
2. Dividends.
(a) Ranking. The shares of Series 1 VRDP shall rank
on a parity with each other, with shares of any other Series of
VRDP and with shares of any other series of Preferred Shares as
to the payment of dividends by the Fund.
(b) Cumulative Cash Dividends. The Holders of Series
1 VRDP Shares shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally
available therefor 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 Series 1 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 Series 1 VRDP Shares. No interest, or sum of money
in lieu of interest, shall be payable in respect of any
dividend payment or payments on Series 1 VRDP Shares that may be
in arrears, and no additional sum of money shall be payable in
respect of such arrearage, except that the Fund shall pay as a
supplemental dividend 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 Business
Day next succeeding the day on which the Failure to Deposit
occurred.
(c) Dividends Cumulative from Date of Original Issue.
Dividends on Series 1 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 the Series 1 VRDP
Shares shall be the first Business Day of each calendar month;
provided, however, that:
(i) notwithstanding the foregoing, the Fund 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 following a
Minimum Rate Period shall be the Business Day immediately
following the end of such Minimum Rate Period; and
(ii) notwithstanding the foregoing, the Fund in
its discretion may establish the Dividend Payment Dates in
respect of any Special Rate Period for Series 1 VRDP
Shares; 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
Fund; and provided further 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
Series 1 VRDP Shares during the Initial Rate Period shall
be equal to the rate per annum specified under
"Designation of Series 1 VRDP" above. For each Subsequent
Rate Period of the Series 1 VRDP Shares 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 other than as described below, 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 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 28 Rate Period
Days or fewer and (ii) until the first 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 28 Rate Period
Days;
(C) if any Failure to Deposit shall have
occurred with respect to shares of such Series during
any Dividend Period therefor, but, by 12:00 noon, New
York City time, on the third Business Day next
succeeding the date on which such Failure to Deposit
occurred, such Failure to Deposit shall have been
cured in accordance with paragraph (f) of this Section
2, and the Fund shall have paid to the Tender and
Paying Agent as a late charge ("Late Charge") daily
supplemental dividends equal in the aggregate to the
sum of (1) if such Failure to Deposit consisted of the
failure timely to pay to the Tender and Paying Agent
the full amount of dividends with respect to any
Dividend Period for the shares of such Series, an
amount computed by multiplying (x) the Applicable Rate
for the Rate Period during which such Failure to
Deposit occurred 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 had not been cured in
accordance with paragraph (f) of this Section 2
(including
the day such Failure to Deposit occurred 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
on which such Failure to Deposit occurred or continued
uncured being declared as a supplemental dividend on
that day) and (2) if such Failure to Deposit consisted
of the failure timely to pay to the Tender and Paying
Agent the Redemption Price of the shares of such
Series for which a Notice of Redemption had been
provided by the Fund pursuant to paragraph (c) of
Section 10 of Part I of these Articles
Supplementary, an amount computed by multiplying, (x)
the Applicable Rate for the Rate Period during which
such Failure to Deposit occurred on the applicable
redemption date plus 2.00% by (y) a fraction, the
numerator of which shall be the number of days for
which such Failure to Deposit had not been cured in
accordance with paragraph (f) of this Section 2
(including the day such Failure to Deposit occurred
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 on which such Failure to Deposit
occurred or continued uncured being declared as a
supplemental dividend on that day), the Applicable
Rate Determination will be held in respect of shares
of such Series for the Subsequent Rate Period as
provided above in this paragraph (e), unless 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, in which case 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;
(D) if any Failure to Deposit shall have
occurred with respect to shares of such Series during
any Dividend Period therefor, and, by 12:00 noon, New
York City time, on the third Business Day next
succeeding the date on which such Failure to Deposit
occurred, such Failure to Deposit shall not have been
cured in accordance with paragraph (f) of this Section
2 or the Fund 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
therefor thereafter (or for any Subsequent Rate Period
therefor 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 Fund 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 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 'Baa3'/'BBB-'"); or
(E) in connection with a Special Rate
Period, the Fund may establish other or additional
terms with respect to the dividend rate in accordance
with Section 4 of Part I of these Articles
Supplementary.
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 Series 1 VRDP 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 applying each such rate obtained
against $25,000.
(f) Curing a Failure to Deposit. A Failure to Deposit
with respect to shares of Series 1 VRDP shall be cured for
purposes of paragraph (e) above on the Business Day on which,
by 12:00 noon, New York City time, the Fund 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 a Notice of Redemption has been provided by
the Fund 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 Fund's failure to
pay the Redemption Price in respect 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 Fund to Tender and Paying
Agent. In connection with each Dividend Payment Date for Series
1 VRDP Shares, the Fund shall pay to the Tender and Paying
Agent, not later than 12:00 noon, New York City time, on the
earlier of
(i) the third Business Day next succeeding the Rate Determination
Date immediately preceding the Dividend Payment Date and (ii)
the Business Day immediately preceding the Dividend Payment
Date, 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, or as otherwise provided for 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 Trustee of Dividend
Payments by Fund. All Deposit Securities paid to the Tender and
Paying Agent for the payment of dividends on Series 1 VRDP
Shares shall be held in trust for the payment of such dividends
by the Tender and Paying Agent for the benefit of the Holders
specified in paragraph (i) of this Section 2. Any Deposit
Securities paid to the Tender and Paying Agent in accordance with
the foregoing but not applied by the Tender and Paying Agent to
the payment of dividends will, to the extent permitted by law,
upon request of the Fund, be repaid to the Fund as soon as
possible after the date on which such Deposit Securities were so
to have been applied.
(i) Dividends Paid to Holders. Dividends on the
Series 1 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 Series 1 VRDP
Shares, the transferor as Beneficial Owner of Series 1 VRDP
Shares shall be deemed to have agreed pursuant to the terms of
the Series 1 VRDP Shares to transfer to the transferee the right
to receive from the Fund any dividends declared and unpaid for
each day prior to the transferee becoming the Beneficial Owner
of the Series 1 VRDP Shares in exchange for payment of the
Purchase Price for such Series 1 VRDP Shares by the transferee.
(j) Dividends Credited Against Earliest Accumulated
But Unpaid Dividends. Any dividend payment made on Series 1 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. Dividends in arrears for any past Dividend Period may
be declared (to the extent not previously declared as required
under paragraph (i) above) and paid at any time, without
reference to any regular Dividend Payment Date, to the Holders
as their names appear on the record books of the Fund on such
date, not exceeding 15 days preceding the payment date thereof,
as may be fixed by the Board of Directors.
(k) Dividends Designated as Exempt-Interest
Dividends. Dividends on Series 1 VRDP Shares shall be designated
as exempt-interest dividends up to the amount of tax- exempt
income of the Fund, to the extent permitted by, and for purposes
of, Section 852 of the Code.
3. Gross-Up Payments. Holders of Series 1 VRDP Shares
shall be entitled to receive, when, as and if declared by the
Board of Directors, out of funds legally available therefor,
dividends in an amount equal to the aggregate Gross-up Payments
as follows:
(a) If the Fund allocates any net capital gains or
ordinary income taxable for regular federal income tax purposes
to a dividend paid on Series 1 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 Fund 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 in writing 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 Fund.
(b) 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.
4. Designation of Special Rate Periods.
(a) Length of and Preconditions for Special Rate
Period. The Fund, at its option, may designate any Subsequent
Rate Period for Series 1 VRDP Shares as a Special Rate Period,
consisting of the duration specified by the Fund in accordance
with this Section 4 and ending on a Wednesday, subject to
adjustment as provided in paragraph (b) of this Section 4, or,
if so designated by the Fund, ending on the final redemption date
specified in paragraph (b)(i)(A) of Section 10 of Part I of
these Articles Supplementary. Except for Special Rate Periods,
each Subsequent Rate Period will be a Minimum Rate Period. A
designation of a Special Rate Period shall be effective only if
(A) notice thereof shall have been given in accordance with
paragraph
(c) and paragraph (d)(i) of this Section 4, (B) no Series 1
VRDP Shares are owned by the Liquidity Provider pursuant to the
Purchase Obligation on either the Rate Determination Date for
such proposed Special Rate Period or on the first day of such
Special Rate Period and full cumulative dividends and any
amounts due with respect to redemptions, in each case, payable on
the Series 1 VRDP Shares prior to such date have been paid in
full, and (C) if any Notice of Redemption shall have been
provided by the Fund pursuant to paragraph (c) of Section 10 of
Part I of these Articles Supplementary with respect to any
shares of such Series, the Redemption Price with respect to
such shares shall have been deposited with the Tender and Paying
Agent. In the event the Fund wishes to designate any Subsequent
Rate Period for the Series 1 VRDP Shares as a Special Rate
Period consisting of more than 28 Rate Period Days, the Fund
shall notify each Rating Agency then rating the Series 1 VRDP
Shares in advance of the commencement of such Subsequent Rate
Period that the Fund wishes to designate such Subsequent Rate
Period as a Special Rate Period and shall provide each Rating
Agency then rating the Series 1 VRDP Shares with such
documents as the applicable Rating Agency may request.
(b) Adjustment of Length of Special Rate Period. In
the event the Fund wishes to designate a Subsequent Rate Period
for the Series 1 VRDP Shares 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, then the
Special Rate Period shall end on the next Business Day and the
succeeding Subsequent Rate Period (if it is a Minimum Rate
Period) will end on the following Wednesday.
(c) Notice of Proposed Special Rate Period. If the
Fund proposes to designate any Subsequent Rate Period for the
Series 1 VRDP Shares as a Special Rate Period pursuant to
paragraph (a) of this Section 4, not less than 20 (or such
lesser number of days as may be agreed to from time to time by
the Remarketing Agent) nor more than 30 days prior to the date
the Fund proposes to designate as the first day of such Special
Rate Period (which shall be a day that would otherwise be the
first day of a Minimum Rate Period), a notice (a "Notice of
Proposed Special Rate Period") shall be sent by the Fund by
Electronic Means (or by first-class mail, postage prepaid, where
the Series 1 VRDP Shares are in physical form outside the book-
entry system of the Securities Depository) 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 Fund may exercise its
option to designate a succeeding Subsequent Rate Period for the
Series 1 VRDP Shares as a Special Rate Period, specifying the
first day thereof, (B) that the Fund will, by 11:00 a.m., New
York City time, on the second Business Day immediately
preceding such first day (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 day of such
Special Rate Period, (D) that such Special Rate Period shall not
commence if (1) any Series 1 VRDP Shares are owned by the
Liquidity Provider pursuant to the Purchase Obligation on
either the Rate Determination Date for such proposed Special
Rate Period or on the first day of such Special Rate Period or
(2) full cumulative dividends or any amounts due with respect
to redemptions, in each case, payable on the Series 1 VRDP
Shares prior to such Rate Determination Date have not been paid
in full, (E) the scheduled Dividend Payment Dates for shares of
such Series during such Special Rate Period and (F) a
description of the Other Special Rate Period Provisions, if any,
applicable to shares of such Series in respect of such 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 day of any proposed Special Rate
Period for the Series 1 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 Fund shall deliver to the Remarketing
Agent, the Tender and Paying Agent and the Liquidity Provider
either:
(i) a notice (a "Notice of Special Rate
Period") stating (A) that the Fund has determined to
designate the next succeeding Rate Period for shares of
such Series as a Special Rate Period, specifying the same
and the first day thereof, (B) the Rate Determination Date
immediately prior to the first day of such Special Rate
Period, (C) that such Special Rate Period shall not
commence if (1) any Series 1 VRDP Shares are owned by the
Liquidity Provider pursuant to the Purchase Obligation on
either such Rate Determination Date or on the first day of
such Special Rate Period or (2) full cumulative dividends
or any amounts due with respect to redemptions, in each
case, payable on the Series 1 VRDP Shares prior to such
Rate Determination Date have not been paid in full,
(D) the scheduled Dividend Payment Dates for shares of such
Series during such Special Rate Period and (E) the Other
Special Rate Period Provisions, if any, applicable to shares
of such Series in respect of such Special Rate Period, such
notice to be accompanied by (if then applicable) a VRDP
Basic Maintenance Report showing that, as of the third
Business Day immediately preceding such proposed Special
Rate Period, the applicable Rating Agency Eligible Assets
each have an aggregate Discounted Value at least equal to
the applicable VRDP Basic Maintenance Amount as of such
Business Day (assuming for purposes of the foregoing
calculation that, to the extent then required under the
applicable Rating Agency Guidelines, the Applicable 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); or
(ii) a notice stating that the Fund 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 Fund 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 Basic Maintenance Report to the
effect set forth in such paragraph (if then required by the
applicable Rating Agency Guidelines)) with respect to the
designation of the 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 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 Fund 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 Fund 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 Fund, and the contents of such
notice shall be binding on the Fund. In the event the Fund
delivers to the Remarketing Agent and the Liquidity Provider a
notice described in paragraph (d)(ii) of this Section 4, the
Fund will provide each Rating Agency then rating the Series 1
VRDP Shares a copy of such notice.
(f) Other Special Rate Period Provisions. In
connection with any Special Rate Period designated pursuant to
this Section 4, the Fund, without the vote or consent of any
Holder of Series 1 VRDP Shares but with the prior written
consent of the Liquidity Provider, may provide for provisions
relating solely to such Special Rate Period that differ from
those provided in these Articles Supplementary, including with
respect to the Purchase Obligation, optional tender provisions,
mandatory tender provisions, mandatory purchase provisions, the
dividend rate setting provisions (including as to the Maximum
Rate), and, if the dividend may be determined by reference to an
index, formula or other method, the manner in which it will be
determined, Special Redemption Provisions or other redemption
provisions (other than Section 10(b)(i)(A) of these Articles
Supplementary) and modified or new definitions ("Other Special
Rate Period Provisions"), provided that such provisions may
not affect the parity ranking of Series 1 VRDP Shares relative
to any other series of Preferred Shares of the Fund then
outstanding with respect to dividends or distribution of assets
upon dissolution, liquidation or winding up of the affairs of
the Fund.
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 VRDP Shares shall be entitled to one vote for
each VRDP Share held by such Holder on each matter submitted to
a vote of stockholders of the Fund and (ii) the holders of
outstanding Preferred Shares, including each VRDP Share, and of
Common Shares shall vote together as a single class; provided,
however, that the holders of outstanding Preferred Shares,
including VRDP Shares, voting as a class, to the exclusion of
the holders of all other securities and classes of shares of
capital stock of the Fund, shall be entitled to elect two
directors of the Fund at all times, each Preferred Share,
including each VRDP Share, 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 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 VRDP Shares,
shall be entitled, voting as a class on a one-vote-per-
share basis (to the exclusion of the holders of all other
securities and classes of shares of stock of the Fund), 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 VRDP Shares, equal to at
least two 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 or other relevant equivalent thereof 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 Fund.
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
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 Fund
shall call a special meeting of such holders, and the Fund
shall mail a notice of such special meeting to such
holders, such meeting to be held not less than 10 nor more
than 20 days after the date of mailing of such notice. If
a special meeting is not called by the Fund, 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 the close of business
on the fifth Business Day preceding the day on which such
notice is mailed. 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 stock of the
Fund), 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
Fund at the time of a special meeting of Holders and
holders of other Preferred Shares to elect additional
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 Fund.
(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 automatically shall terminate, the
remaining directors shall constitute the directors of the
Fund 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 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. The Board of Directors, without the vote or
consent of the Holders of Series 1 VRDP Shares, may from
time to time authorize and create, and the Fund may from
time to time issue additional shares of, any Series of
VRDP, including Series 1 VRDP Shares, or classes or series
of Preferred Shares ranking on a parity with Series 1 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 Fund. So long as any
Series 1 VRDP Shares are Outstanding, the Fund shall not,
without the affirmative vote or consent of the Holders of
at least a majority of the Series 1 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 the Series 1 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 Fund or
(b) amend, alter or repeal the provisions of the Charter,
or these Articles Supplementary, whether by merger,
consolidation or otherwise, so as to materially and
adversely affect any preference, right or power of the
Series 1 VRDP Shares or the Holders or Beneficial Owners
thereof; provided, however, that (i) none of the actions
permitted by paragraph (a) of Section 13 of Part I of
these Articles Supplementary will be deemed to so affect
such preferences, rights or powers, (ii) a division of a
VRDP Share will be deemed to so affect such preferences,
rights or powers only if the terms of such division so
affect the Holders or Beneficial Owners of Series 1 VRDP
Shares and (iii) the authorization, creation and issuance
of classes or series of shares ranking junior to the
Series 1 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 Fund will
be deemed to so affect such preferences, rights or powers
only if such issuance would, at the time thereof, cause
the Fund not to satisfy the Minimum
- 31 -
VRDP Asset Coverage. For purposes of the foregoing, except
as otherwise set forth in these Articles Supplementary, no
matter shall be deemed to materially and adversely affect
any right, preference or power of the Series 1 VRDP
Shares or the Holders or Beneficial Owners thereof unless
such matter (i) alters or abolishes any preferential right
of such Series; (ii) creates, alters or abolishes any right
in respect of redemption of such Series; or (iii) creates
or alters any restriction on transfer applicable to such
Series (other than to abolish such restriction or to comply
with applicable law). So long as any Series 1 VRDP Shares
are Outstanding, the Fund shall not, without the
affirmative vote or consent of the Holders of at least
66?% of the Series 1 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 Fund is
solvent and does not foresee becoming insolvent. If any
action set forth above requiring the vote of Holders of
Series 1 VRDP Shares would adversely affect the rights of
Series 1 VRDP in a manner different from any other Series
of VRDP, the Fund will not approve any such action without
the affirmative vote or consent of the Holders of at least
a majority of the shares of the Series 1 VRDP outstanding
at the time, in person or by proxy, either in writing or at
a meeting (the Series 1 VRDP voting as a separate class).
Notwithstanding the foregoing, the Fund, without the vote,
approval or consent of Holders of Series 1 VRDP Shares or
other stockholders of the Fund, has the right to (x)
terminate the services of any and all Rating Agencies
providing a long-term rating for the Series 1 VRDP Shares,
and such rating or ratings, to the extent it or they
would have been taken into account in any of the
provisions in these Articles Supplementary, will be
disregarded (for the avoidance of doubt, other than the
effect of the absence of such ratings for purposes of
determining the Maximum Rate) and (y) provide for Other
Special Rate Period Provisions in accordance with, but
subject to the limitations set forth in, paragraph (f) of
Section 4 of Part I of these Articles Supplementary. For
the avoidance of doubt, no vote of the holders of Common
Shares shall be required to amend, alter or repeal the
provisions of these Articles Supplementary.
(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 Fund 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, 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, 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 Fund 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 Series 1 VRDP Shares is required pursuant to the
provisions of Section 13(a) of the 1940 Act, the Fund
shall, not later than 10 Business Days prior to the date
on
which such vote is to be taken, notify each Rating Agency
then rating the Series 1 VRDP Shares that such vote is to
be taken and the nature of the action with respect to
which such vote is to be taken. The Fund shall, not later
than 10 Business Days after the date on which such vote is
taken, notify each such Rating Agency of the results of such
vote.
(iii) Exclusive Right to Vote on Certain Matters.
Except as otherwise required by the 1940 Act, other
applicable law or the Charter, (i) whenever a vote of
Holders of Series 1 VRDP Shares is otherwise required by
these Articles Supplementary, Holders of Outstanding shares
of Series 1 VRDP will be entitled as a Series, to the
exclusion of the holders of all other shares, including
other Preferred Shares, Common Shares and other classes of
stock of the Fund, to vote on matters solely affecting
shares of Series 1 VRDP and (ii) Holders of Outstanding
shares of Series 1 VRDP 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 shares of
Series 1 VRDP, as expressly set forth in the Charter and
these Articles Supplementary.
(d) Fund May Take Certain Actions Without Stockholder
Approval. The Fund is not required to maintain any particular
short-term or long-term ratings for the Series 1 VRDP Shares,
and, subject only to Section 9 of this Part I, the Fund, without
the vote, approval or consent of any holder of Preferred
Shares, including any Series of VRDP, or any other shareholder
of the Fund, may from time to time adopt, amend, alter or
repeal any or all of the definitions contained herein, add
covenants and other obligations of the Fund, or confirm the
applicability of covenants and other obligations set forth
herein, in connection with obtaining, maintaining or changing
the rating of any Rating Agency that is then rating the Series 1
VRDP Shares, and any such adoption, amendment, alteration or
repeal will not be deemed to affect the preferences, rights or
powers of Series 1 VRDP Shares, or the Holders or Beneficial
Owners thereof.
Subject only to Section 9 of this Part I, the Fund
may, at any time, replace a Rating Agency or terminate the
services of any Rating Agencies then providing a rating for the
Series 1 VRDP Shares without replacement, in either case,
without the approval of Holders of Series 1 VRDP Shares or other
shareholders of the Fund. In the event a Rating Agency ceases to
furnish a long-term rating for the Series 1 VRDP Shares or the
Fund terminates the services of a Rating Agency then providing a
long-term rating for the Series 1 VRDP Shares, such rating, to
the extent it would have been taken into account in any of the
provisions of the Series 1 VRDP Shares included in these
Articles Supplementary, will be disregarded, and only the ratings
of the then-designated Rating Agency or Agencies, if any, will
be taken into account (other than the effect of the absence of
such ratings for purposes of determining the Maximum Rate).
Notwithstanding anything herein to the contrary, the
Rating Agency Guidelines, as they may be amended, supplemented
or replaced from time to time by the applicable Rating Agency,
will be reflected in written documents, including the ratings
methodologies of the applicable Rating Agency, and may be
amended, supplemented or replaced by the applicable Rating
Agency without the vote, consent or approval of the Fund, the
Board of Directors, any Holder of Series 1 VRDP Shares, or any
other shareholder of the Fund.
Notwithstanding the foregoing, nothing in this Section
5 is intended in any way to limit the ability of (i) the Fund
to make certain adjustments pursuant to the Remarketing
Agreement as provided under the definition of "Maximum Rate,"
subject to the limitations set forth in such definition, or
(ii) the Board of Directors to amend or alter other provisions
of these Articles Supplementary, without the vote, approval or
consent of any Holder of Series 1 VRDP Shares, or any other
shareholder of the Fund, 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 Series
1 VRDP Shares shall not have any voting rights, 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 Series 1 VRDP Shares shall have no preemptive rights
or rights to cumulative voting.
(g) Sole Remedy for Fund's Failure to Pay Dividends.
In the event that the Fund fails to pay any dividends on the
Series 1 VRDP Shares, the sole remedy of the Holders under
these Articles Supplementary, without limiting any rights to
payment of such dividends or other rights under the Charter,
these Articles Supplementary and applicable law or the
occurrence of a Mandatory Tender Event, 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,
no Holder shall be entitled to vote any Series 1 VRDP Share and
no Series 1 VRDP Share shall be deemed to be "outstanding" for
the purpose of voting or determining the number of shares
required to constitute a quorum if, prior to or concurrently
with the time of determination of shares entitled to vote or
shares deemed outstanding for quorum purposes, as the case may
be, the requisite Notice of Redemption with respect to such
shares shall have been provided as set forth in paragraph (c) of
Section 10 of Part I of these Articles Supplementary and Deposit
Securities with a Market Value at least equal to the Redemption
Price for the redemption of such shares shall have been
deposited in trust with the Tender and Paying Agent for that
purpose. Series 1 VRDP Shares owned (legally or beneficially)
or controlled by the Fund 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.
6. Minimum VRDP Asset Coverage. The Fund shall maintain,
as of the close of business on the last Business Day of each
month on which any Series 1 VRDP Share is Outstanding, the
Minimum VRDP Asset Coverage.
7. VRDP Basic Maintenance Amount.
(a) Subject to paragraph (c) below, so long as
Series 1 VRDP Shares are Outstanding, the Fund shall maintain,
on each Valuation Date, and shall verify to its satisfaction
that it is maintaining on such Valuation Date, Rating
Agency Eligible Assets having an
aggregate Discounted Value equal to or greater than the VRDP
Basic Maintenance Amount (as then provided in the applicable
Rating Agency Guidelines).
(b) Subject to paragraph (c) below, the Fund shall
deliver to each Rating Agency that is then rating the Series 1
VRDP Shares and any other party specified in the Rating Agency
Guidelines, if required by such Rating Agency or other party,
all certificates that are set forth in the respective Rating
Agency Guidelines regarding Minimum VRDP Asset Coverage, the
VRDP 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"). Subject to paragraph (c) below, a failure by the
Fund to deliver a Rating Agency Certificate with respect to the
VRDP Basic Maintenance Amount shall be deemed to be delivery of
a Rating Agency Certificate indicating the Discounted Value for
all assets of the Fund is less than the VRDP Basic Maintenance
Amount, as of the relevant Valuation Date.
(c) The Fund is not required to maintain any
particular long-term ratings for the Series 1 VRDP Shares, and
the Rating Agency Guidelines may be changed or eliminated at any
time without the approval of Holders of Series 1 VRDP Shares or
any other shareholders of the Fund, including in connection with
the change or elimination of any or all long-term ratings then
applicable to the Series 1 VRDP Shares.
8. Restrictions on Dividends and Other Distributions.
(a) Dividends on Preferred Shares Other than Series 1
VRDP. 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 stock of the Fund ranking, as to the
payment of dividends, on a parity with the Series 1 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 through its most recent dividend payment date.
When dividends are not paid in full upon the shares of each
Series of VRDP through its most recent dividend payment date or
upon the shares of any other class or series of shares of
stock of the Fund ranking on a parity as to the payment of
dividends with VRDP Shares through their most recent respective
dividend payment dates, all dividends declared and paid upon
VRDP Shares and any other such class or series of stock
ranking on a parity as to the payment of dividends with VRDP
Shares shall be declared and paid pro rata so that the amount of
dividends declared and paid per share on VRDP Shares and such
other class or series of stock 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 stock to each other
(for purposes of this sentence, the amount of dividends declared
and paid per Series 1 VRDP Share shall be based on the
Applicable Rate for such share for 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 Series 1 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
Fund 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 Series 1 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 Fund ranking junior to
or on a parity with the Series 1 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 Fund ranking junior to the
Series 1 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 Fund ranking junior to or on a
parity with Series 1 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 the Series
1 VRDP Shares through the most recently ended Dividend Period
therefor 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 Fund has redeemed the
full number of Series 1 VRDP Shares required to be redeemed by
any provision for mandatory redemption pertaining thereto
(regardless of whether any such mandatory redemption is then
restricted by any provision of these Articles Supplementary),
and (B) the Fund 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 Series 1 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 Fund ranking junior to the
Series 1 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 Fund ranking junior to Series 1 VRDP Shares as to the
payment of dividends and the distribution of assets upon
dissolution, liquidation or winding up), unless, to the extent
any Rating Agency or Agencies are then providing a long-term
rating for the Series 1 VRDP Shares, immediately after such
transaction the Discounted Value of Rating Agency Eligible
Assets (as determined by each Rating Agency, if any, then
rating the Series 1 VRDP Shares) would at least equal the VRDP
Basic Maintenance Amount (if any), if then required by such
Rating Agency or Agencies.
9. Ratings Matter.
(a) Short-Term Ratings. The Fund will use its
reasonable best efforts to maintain at least one short-term
rating of the Series 1 VRDP Shares, to the extent that the
Liquidity Provider then has a short-term debt rating.
(b) Rating Agency Restrictions. The Fund will adhere
to the diversification requirements 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 the Series 1 VRDP Shares.
10. Redemption.
(a) Optional Redemption.
(i) Subject to the provisions of paragraph (iv)
of this paragraph (a), the Series 1 VRDP Shares may be
redeemed, at the option of the Fund, at any time, as a
whole or from time to time in part, out of funds legally
available therefor, at a redemption price per share equal
to the sum of $25,000 plus an amount equal to accumulated
but unpaid dividends thereon (whether or not earned or
declared) to, but not including, the date fixed for
redemption; provided, however, that (1) the Series 1 VRDP
Shares may not be redeemed in part if after such partial
redemption fewer than 50 shares of such Series would remain
Outstanding; (2) shares of Series 1 VRDP are not redeemable
by the Fund 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 for
shares of Series 1 VRDP, as delivered to the Remarketing
Agent and filed with the Secretary of the Fund, 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) [ Reserved ]
(iii) If fewer than all of the Outstanding shares
of Series 1 VRDP 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
either pro rata from the Holders of shares of such Series
in proportion to the number of shares of such Series held
by such Holders or by lot or in such manner as the Fund's
Board of Directors may determine to be fair and equitable.
Subject to the provisions of these Articles Supplementary
and applicable law, the Fund's Board of Directors will
have the full power and authority to prescribe the terms
and conditions upon which Series 1 VRDP Shares will be
redeemed from time to time.
(iv) The Fund 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 Fund 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 of Series 1 VRDP Shares by reason of the
redemption of such shares on such Redemption Date and (b),
if applicable, the Discounted Value of Rating Agency
Eligible Assets (as determined by each Rating Agency, if
any, then rating the Series 1 VRDP Shares) each at least
equals the applicable
VRDP Basic Maintenance Amount, and would at least equal
such VRDP Basic Maintenance Amount immediately subsequent
to such redemption if such redemption were to occur on
such date.
(b) Mandatory Redemption.
(i) (A) The Fund shall redeem all Outstanding
Series 1 VRDP Shares on March 4, 2045, at a redemption
price equal to $25,000 per share plus accumulated but
unpaid dividends thereon (whether or not earned or
declared) to, but excluding, such date.
(B) Except as otherwise provided below, the
Fund shall redeem Preferred Shares of any series, if
the Fund fails to, if applicable, have Rating Agency
Eligible Assets (as determined by each Rating Agency,
if any, then rating the Series 1 VRDP Shares) with a
Discounted Value greater than or equal to the
applicable VRDP Basic Maintenance Amount, and such
failure is not cured on or before the applicable VRDP
Basic Maintenance Cure Date. In the event of the
failure by the Fund to have Rating Agency Eligible
Assets with a Discounted Value greater than or equal
to the VRDP Basic Maintenance Amount, if then
applicable, the Fund may seek to cure such failure on
or prior to the VRDP Basic Maintenance Cure Date by
complying with the requirements of the Rating Agency
or Rating Agencies, if any, then rating the Series 1
VRDP Shares as in effect at the time of such failure.
Alternatively, on or prior to such VRDP Basic
Maintenance Cure Date, the Fund may choose to cure
such failure by (a) complying with the VRDP Basic
Maintenance Amount applicable to long-term ratings for
the Series 1 VRDP Shares lower than the ratings
prevailing at the time of failure or (b) terminating
the services of the Rating Agency or Agencies then
providing a long-term rating of the Series 1 VRDP
Shares. The number of Preferred Shares to be
redeemed, which at the Fund's sole discretion (to
the extent permitted by the 1940 Act and Maryland law)
may include any number or proportion of Preferred
Shares of any series, shall be equal to the lesser of
(i) the minimum number of Preferred Shares the
redemption of which, if deemed to have occurred
immediately prior to the opening of business on the
VRDP Basic Maintenance Cure Date, would, together with
all other Preferred Shares subject to retirement,
result in the Fund's having Rating Agency Eligible
Assets (as determined by each Rating Agency, if any,
then rating the Series 1 VRDP Shares) with a
Discounted Value greater than or equal to the VRDP
Basic Maintenance Amount on such VRDP Basic
Maintenance Cure Date (provided, however, that, if
there is no such minimum number of Preferred Shares the
redemption of which would have such result, all Series
1 VRDP Shares and other Preferred Shares then
outstanding shall be redeemed) and (ii) the maximum
number of Preferred Shares that can be redeemed out of
funds legally available therefor in accordance with
the Articles and applicable law. To the extent that
the Fund redeems VRDP Shares in accordance with the
foregoing, the Fund shall allocate the number of VRDP
Shares to be redeemed pro rata among each Series of
VRDP subject to redemption. The Fund shall effect such
redemption on the date fixed by the Fund therefor,
which date shall not be earlier than 10 days nor later
than 30 days after
the VRDP Basic Maintenance Cure Date, except that, if
the Fund does not have funds legally available for
the redemption or retirement of all of the required
number of VRDP Shares and other Preferred Shares that
are subject to redemption or retirement or the Fund
otherwise is unable as a result of applicable law to
effect such redemption on or prior to 30 days after
the VRDP Basic Maintenance Cure Date, the Fund shall
redeem or retire, as applicable, those VRDP Shares and
other Preferred Shares that it was unable to redeem or
retire on the earliest practicable date on which it
is able to effect such redemption or retirement. The
Fund will redeem any Series 1 VRDP Shares at a
redemption price equal to $25,000 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.
(C) The Fund shall redeem Preferred Shares
of any series, if the Fund fails to maintain the
Minimum VRDP Asset Coverage in accordance with these
Articles Supplementary and such failure is not cured
on or before the Minimum VRDP Asset Coverage Cure
Date. The number of Preferred Shares to be redeemed,
which at the Fund's sole discretion (to the extent
permitted by the 1940 Act and Maryland law) may
include any number or proportion of Preferred Shares
of any series, shall be equal to the lesser of (i)
the minimum number of Preferred Shares the redemption
of which, if deemed to have occurred immediately
prior to the opening of business on the Minimum
VRDP Asset Coverage Cure Date, would, together with
all other Preferred Shares subject to retirement,
result in the Fund's maintaining the Minimum VRDP
Asset Coverage on such Minimum VRDP Asset Coverage
Cure Date (provided, however, that, if there is no
such minimum number of Preferred Shares the redemption
of which would have such result, all VRDP Shares and
other Preferred Shares then outstanding shall be
redeemed) and (ii) the maximum number of Preferred
Shares that can be redeemed out of funds legally
available therefor in accordance with the Charter and
applicable law. To the extent that the Fund redeems
VRDP Shares in accordance with the foregoing, the
Fund shall allocate the number of VRDP Shares to be
redeemed pro rata among each Series of VRDP subject
to redemption. The Fund shall effect such redemption
on the date fixed by the Fund therefor, which date
shall not be earlier than 10 days nor later than 30
days after the Minimum VRDP Asset Coverage Cure Date,
except that, if the Fund does not have funds legally
available for the redemption or retirement of all of
the required number of VRDP Shares and other Preferred
Shares that are subject to redemption or retirement or
the Fund otherwise is unable as a result of applicable
law to effect such redemption on or prior to 30 days
after the Minimum VRDP Asset Coverage Cure Date, the
Fund shall redeem those VRDP Shares and other
Preferred Shares that it was unable to redeem or retire
on the earliest practicable date on which it is able
to effect such redemption or retirement. The Fund will
redeem any Series 1 VRDP Shares at a redemption price
equal to $25,000 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.
(D) 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 Series 1 VRDP are to be
redeemed pursuant to this paragraph (b), the number
of shares of such Series to be redeemed shall be
selected either pro rata from the Holders of shares of
such Series in proportion to the number of shares of
such Series held by such Holders or by lot or in
such manner as the Fund's Board of Directors may
determine to be fair and equitable. Subject to the
provisions of these Articles Supplementary and
applicable law, the Fund's Board of Directors will
have the full power and authority to prescribe the
terms and conditions upon which Series 1 VRDP Shares
will be redeemed from time to time.
(ii) (A) In accordance with these Articles
Supplementary and if then required pursuant to the VRDP
Fee Agreement, if the Liquidity Provider acquires any
Series 1 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 period of
six months during which such Purchased VRDP Shares 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
Purchased VRDP Shares), the Fund shall effect a Failed
Remarketing Condition-Purchased VRDP Shares Redemption,
provided that, as of the date of redemption: (i) to the
extent any Series 1 VRDP Shares are Outstanding and held by
Persons other than the Liquidity Provider, the Purchase
Obligation of the Liquidity Provider whose Series 1 VRDP
Shares are subject to the Failed Remarketing Condition-
Purchased VRDP Shares Redemption remains in effect to the
extent required by, and in accordance with, the VRDP
Purchase Agreement to which such Liquidity Provider is a
party and (ii) to the extent (a) any Series 1 VRDP Shares
are Outstanding and held by Persons other than the
Liquidity Provider and (b) the Purchase Obligation of the
Liquidity Provider whose Series 1 VRDP Shares are subject
to the Failed Remarketing Condition-Purchased VRDP Shares
Redemption remains in effect to the extent required by, and
in accordance with, the VRDP Purchase Agreement to which
such Liquidity Provider is a party, the Liquidity Provider
whose Series 1 VRDP Shares are subject to the Failed
Remarketing Condition-Purchased VRDP Shares Redemption
shall have made written affirmation to the Fund 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 Series 1
VRDP Shares are subject to the Failed Remarketing
Condition- Purchased VRDP Shares Redemption to deliver the
affirmation referred to in the foregoing proviso shall not
relieve the Fund of its obligation to effectuate a
Failed Remarketing Condition-Purchased VRDP Shares
Redemption and shall only result in a delay by the Fund
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 on which such affirmation is no longer
required to be delivered. The six-month holding period for
Purchased VRDP Shares acquired and held as a result of a
continuing Failed Remarketing Condition-Purchased VRDP
Shares shall be determined by the Fund on a first-in,
first-out basis. The Fund shall effect a Failed
Remarketing Condition-Purchased VRDP Shares Redemption on
the date fixed
by the Fund therefor, which date shall not be later than
three (3) Business Days after the expiration of the six-
month holding period in respect of the applicable Purchased
VRDP Shares, except that, if the Fund does not have funds
legally available for the redemption of all of the required
number of Purchased VRDP Shares that are subject to the
Failed Remarketing Condition-Purchased VRDP Shares
Redemption or the Fund otherwise is unable as a result of
applicable law to effect such redemption on or prior to
three (3) Business Days after the expiration of the
applicable six-month holding period, the Fund shall redeem
those Series 1 VRDP Shares that it was unable to redeem on
the earliest practicable date on which it is able to effect
such redemption.
(B) Upon the occurrence and during the
continuance of a Failed Remarketing Condition-
Purchased VRDP Shares with respect to any Series 1
VRDP Shares, by the fifth Business Day following
delivery of notice thereof from the Liquidity Provider
in accordance with the VRDP Fee Agreement, the Fund
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 Fund
(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 Fund shall cause the Custodian
and the Investment Adviser to take all such necessary
actions, including segregating additional assets of
the Fund 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
Fund segregated as Liquidity Account Investments, the
Investment Adviser, on behalf of the Fund, 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 Fund
segregated as Liquidity Account Investments with
respect to such Purchased VRDP Shares at the close of
business on such date have a Market Value at least
equal to 110% of the Liquidation Preference of such
Purchased VRDP Shares and (y) the assets of the Fund
designated and segregated as Deposit Securities at the
close of business on such date have a Market Value at
least equal to the Liquidity Requirement (if any)
determined in accordance with subparagraph (C) below
with respect to such Purchased VRDP Shares for such
date. The Fund 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.
(C) Subject to notice having been received
from the Liquidity Provider as described in
subparagraph (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 holding period for the Failed
Remarketing Condition-Purchased VRDP Shares applicable
to such Purchased VRDP Shares (which may result in
multiple six-month holding 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
135 20%
105 40%
75 60%
45 80%
15 100%
* 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 Fund 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 Fund, 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 Fund 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
Fund 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) Notwithstanding Section 10(j), the
provisions of subparagraphs (A) through (E) of this
Section 10(b)(ii) may be amended by the Fund, by
resolution of the Board of Directors duly adopted,
without stockholder approval in order to conform to
the terms of a VRDP Fee Agreement or as otherwise
necessary or desirable in the judgment of the Board
of Directors, provided that the Fund receives the
prior written consent of the Liquidity Provider.
(iii) At least six months prior to the scheduled
mandatory Redemption Date of March 4, 2045 specified in
Section 10(b)(i) above, if any Series 1 VRDP Shares then
remain Outstanding, the Fund 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 Fund, Liquidity Account Investments
with a Market Value equal to at least 110% of the
Liquidation Preference of the then Outstanding Series 1
VRDP Shares. The Fund 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
1 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 March 4, 2045, 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 1 VRDP Shares may be applied by the
Fund, in its discretion, towards payment of the Redemption
Price for the Outstanding Series 1 VRDP Shares. Upon the
deposit by the Fund 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 1 VRDP Shares on the March 4, 2045 Redemption Date
for the Outstanding Series 1 VRDP Shares, the requirement
of the Fund to maintain a Liquidity Account for the
Outstanding Series 1 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 Fund shall
determine or be required to redeem, in whole or in part,
shares of Series 1 VRDP pursuant to paragraph (a) or (b) of
this Section 10, the Fund will send a notice of redemption (a
"Notice of Redemption"), by Electronic Means (or by first class
mail, postage prepaid, in the case where the Series 1 VRDP Shares
are in physical form outside the book-entry system of the
Securities Depository), in the case of a redemption pursuant to
paragraph (a) or (b)(i) of this Section 10, to the Holders
thereof and the Liquidity Provider or, in the case of a
redemption pursuant to paragraph (b)(ii) of this Section 10,
- 43 -
only to the Liquidity Provider, or request the Tender and Paying
Agent, on behalf of the Fund to promptly do so by Electronic
Means (or by first class mail, postage prepaid, in the case
where the Series 1 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 Fund 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 or the Liquidity
Provider, as applicable, 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 10 days
(or, in the case of a redemption pursuant to paragraph (b)(ii)
of this Section 10, shall be sent to the Liquidity Provider not
less than one (1) Business Day) 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 Series 1 VRDP Shares to be redeemed and the
Series thereof; (iii) the CUSIP number for the Series 1 VRDP
Shares; (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 Series 1 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 Series 1 VRDP Shares
held by any Holder are to be redeemed, the Notice of Redemption
delivered to such Holder shall also specify the number of Series
1 VRDP Shares to be redeemed from such Holder. The Fund 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 Fund 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 Series 1 VRDP
(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 Fund shall
not purchase or otherwise acquire any shares of such Series;
provided, however, that the foregoing shall not prevent the
purchase or acquisition of all Outstanding shares of such
Series pursuant to the successful completion of an otherwise
lawful purchase or exchange offer made on the same terms to, and
accepted by, Holders of all Outstanding shares of such Series.
(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 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 Series 1 VRDP Shares shall be deemed to exist at any
time after the date specified for redemption in a Notice of
Redemption when the Fund shall have failed, for any reason
whatsoever (including paragraph (d) of this Section 10), 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 Fund's failure to
deposit in trust with the Tender and Paying Agent the
Redemption Price
- 44 -
with respect to any shares where (i) the Notice of Redemption
relating to such redemption provided that such redemption was
subject to one or more conditions precedent and (ii) 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 Fund may not have redeemed
Series 1 VRDP Shares for which a Notice of Redemption has been
provided, dividends shall be declared and paid on Series 1 VRDP
Shares in accordance with and subject to the conditions of these
Articles Supplementary and shall be included in the Redemption
Price in respect of those Series 1 VRDP Shares for which a
Notice of Redemption has been provided.
(f) Tender and Paying Agent as Trustee of
Redemption Payments by Fund. All moneys paid to the Tender and
Paying Agent for payment of the Redemption Price of Series 1
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) Deposit with the Tender and Paying Agent; Shares
for Which Notice of Redemption Has Been Given Are No Longer
Outstanding. Provided a Notice of Redemption has been sent
pursuant to paragraph (c) of this Section 10, not later than
12:00 noon, New York City time, on a Business Day not less than
ten (10) days preceding the Redemption Date specified in such
notice (or on the Business Day immediately preceding the
Redemption Date in the case of Failed Remarketing Condition-
Purchased VRDP Shares Redemption), the Fund shall irrevocably
deposit with the Tender and Paying Agent an aggregate amount
of Deposit Securities with a Market Value equal to the
Redemption Price to be paid on the Redemption Date for the
Series 1 VRDP Shares that are subject to such notice. Provided
a Notice of Redemption has been sent pursuant to paragraph (c)
of this Section 10, upon the deposit with the Tender and Paying
Agent of Deposit Securities with a Market Value equal to the
Redemption Price to be paid on the Redemption Date for the
Series 1 VRDP Shares that are the subject of such notice,
dividends on such shares shall cease to accumulate, except as
included in the Redemption Price, and such shares shall no
longer be deemed to be Outstanding, except as noted below with
respect to the VRDP Purchase Agreement, for any purpose, and
all rights of the Holders of the shares so called for redemption
shall cease and terminate, except the right of such Holders to
receive the Redemption Price, but without any interest or
other additional amount, except as provided in 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 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 Series 1 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 Fund shall be entitled
to receive from the Tender and Paying Agent, (upon written
instruction from the Fund) promptly after the date fixed for
redemption, any cash deposited with the Tender and Paying Agent
in excess of (i) the aggregate Redemption Price of the Series 1
VRDP Shares called for redemption on such date and (ii) all
other amounts to which Holders of Series 1 VRDP Shares called for
redemption may be entitled. Any funds so deposited that are
unclaimed at the end of 90 days from such Redemption Date
shall, to the extent permitted by law, be repaid to the Fund,
after which time the Holders of Series 1 VRDP Shares so called
for redemption may look only to the Fund for payment of the
Redemption Price and all other amounts to which they may be
entitled. The Fund shall be
- 45 -
entitled to receive, from time to time after the date fixed
for redemption, any interest on the funds so deposited.
Notwithstanding the foregoing, Series 1 VRDP Shares will be
deemed to be Outstanding for purposes of the VRDP Purchase
Agreement until redeemed by the Fund.
(h) Compliance With Applicable Law. In effecting any
redemption pursuant to this Section 10, the Fund shall use its
best efforts to comply with all applicable conditions precedent
to effecting such redemption under the 1940 Act and any
applicable Maryland law, but shall effect no redemption except
in accordance with the 1940 Act and any applicable Maryland law.
(i) Only Whole VRDP Shares May Be Redeemed. In the
case of any redemption pursuant to this Section 10, only whole
Series 1 VRDP Shares shall be redeemed, and in the event that
any provision of the Charter would require redemption of a
fractional share, the Tender and Paying 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,
but subject to and without limiting Section 10(b)(ii)(F), the
Fund may, in its sole discretion, modify the procedures set
forth above with respect to notification of redemption for the
Series 1 VRDP Shares, provided that such modification does not
materially and adversely affect the Holders of the Series 1 VRDP
Shares or cause the Fund to violate any law, rule or regulation;
and provided further that no such modification shall 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 are
permissible under the rules and regulations or interpretations
of the SEC and the Code (including in respect of the treatment
of the Series 1 VRDP Shares as stock for U.S. federal income
tax purposes) with respect to the redemption of Series 1 VRDP
Shares owned by the Liquidity Provider, the Fund, without
shareholder approval, by resolution of the Board of Directors,
may modify such redemption procedures.
11. Liquidation Rights.
(a) Ranking. Shares of Series 1 VRDP shall rank on a
parity with each other, with shares of any other Series of VRDP
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 Fund.
(b) Distributions Upon Liquidation. Upon the
dissolution, liquidation or winding up of the affairs of the
Fund, whether voluntary or involuntary, the Holders of Series 1
VRDP Shares then Outstanding shall be entitled to receive and to
be paid out of the assets of the Fund available for distribution
to its shareholders, before any payment or distribution shall
be made on the Common Shares or on any other class of shares of
the Fund ranking junior to the Series 1 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 Fund. After the payment
to the Holders of the Series 1 VRDP Shares of the full
preferential amounts provided for in this paragraph (b), the
Holders of Series 1 VRDP Shares as such shall have no right or
claim to any of the remaining assets of the Fund.
(c) Pro Rata Distributions. In the event the assets
of the Fund available for distribution to the Holders of Series
1 VRDP Shares upon any dissolution, liquidation or winding up of
the affairs of the Fund, 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 Series 1 VRDP or
any shares of any other class or Series of Preferred Shares
ranking on a parity with the Series 1 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 Series 1 VRDP Shares,
ratably, in proportion to the full distributable amounts for
which holders of Series 1 VRDP Shares and 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 other series or class or classes of
shares ranking on a parity with the Series 1 VRDP Shares with
respect to the distribution of assets upon dissolution,
liquidation or winding up of the affairs of the Fund, after
payment shall have been made in full to the Holders of the
Series 1 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 Series 1 VRDP Shares
with respect to the distribution of assets upon dissolution,
liquidation or winding up of the affairs of the Fund 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 Series 1 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 Fund, nor the merger, consolidation or
reorganization of the Fund 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 Fund 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 Series 1 VRDP Shares
are Outstanding, except as otherwise provided pursuant to
Section 4 of Part I of these Articles Supplementary in connection
with a Special Rate Period, the Fund shall maintain a VRDP
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 or such
other short-term debt ratings, if any, as may be required for
the Series 1 VRDP Shares to satisfy the eligibility criteria
under Rule 2a-7 under the 1940 Act on an ongoing basis to the
extent that the Fund can do so on a commercially reasonable
basis as determined in the sole discretion of the Board of
Directors. If the Fund maintains a VRDP Purchase Agreement
providing a Purchase Obligation, the provisions herein relating
to the Liquidity Provider shall be operative and the following
shall apply:
(a) The Fund 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 Series 1 VRDP
Shares are in physical form outside the book-entry system of the
Securities Depository,
(A) of the occurrence of a Mandatory Tender Event or Mandatory
Purchase Event, (B) if there is a substitute Liquidity Provider
(including, but not limited to, as to the Liquidity Provider,
its consolidation or 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), such
notice to be provided at least seven days' prior to any such
substitution, or (C) of any downgrade in the short- term or
long-term rating of the Series 1 VRDP Shares or the short-term
rating of the Liquidity Provider by an NRSRO then rating the
Series 1 VRDP Shares or the Liquidity Provider, as applicable.
(b) In the event of a Failed Remarketing Condition,
the Fund will require in the Tender and Paying Agent Agreement
that the Tender and Paying Agent will notify the Fund and
Holders by telephone or Electronic Means, or by first class mail,
postage prepaid, in the case in which Series 1 VRDP Shares are
in physical form outside the book-entry system of the
Securities Depository, of such Failed Remarketing Condition.
(c) Each Series 1 VRDP Share may or shall, as
applicable, 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 Series 1 VRDP
Shares tendered to the Tender and Paying Agent for Remarketing
(provided that the Remarketing Agent may seek to sell such
Series 1 VRDP Shares in a subsequent Remarketing prior to the
Purchase Date), for purchase by the Liquidity Provider 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 Purchase
Agreement, Beneficial Owners and their Agent Members shall have
the right to tender their Series 1 VRDP Shares directly to the
Liquidity Provider pursuant to a Final Notice of Purchase. If
there is no Tender and Paying Agent or for any reason the
Tender and Paying Agent does not, or in the reasonable judgment
of the Fund will not, perform its obligations under the VRDP
Purchase Agreement, the Fund (i) upon becoming aware thereof,
shall promptly notify the Liquidity Provider, the Remarketing
Agent and the Holders by Electronic Means of such event and (ii)
so long as such event is continuing, shall use its best
efforts to direct 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
Series 1 VRDP Shares that are the subject of such notice.
(d) The Fund will require in the Tender and Paying
Agent Agreement that, pursuant to a Tender, Series 1 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
Purchase Agreement.
(e) Except as set forth in Section 10(b)(ii) of Part
I of these Articles Supplementary in connection with a mandatory
redemption of Series 1 VRDP Shares, the Fund shall have no
obligation to purchase Series 1 VRDP Shares acquired by the
Liquidity Provider pursuant to the VRDP Purchase Agreement or
otherwise.
(f) Series 1 VRDP Shares are subject to Mandatory
Purchase by the Liquidity Provider upon the occurrence of a
Mandatory Purchase Event. Promptly following the occurrence of
a Mandatory Purchase Event, and in any event within three (3)
Business Days thereafter, the Fund, or the Tender and Paying
Agent at the direction of the Fund (provided that the Tender and
Paying Agent may require up to two (2) Business Days' prior
notification by Electronic Means by the Fund), shall provide a
Mandatory Purchase Notice by Electronic Means to the Holders and
the Liquidity Provider, specifying a Mandatory Purchase Date for
all Outstanding Series 1 VRDP Shares. The Mandatory Purchase
Date shall not be later than seven days following the date a
Mandatory Purchase Notice is sent to the Holders by Electronic
Means, and in any event shall be not later than the Business Day
immediately preceding the termination of the VRDP 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 Series 1 VRDP Shares automatically shall
be subject to Mandatory Purchase by the Liquidity Provider at
the Purchase Price on the Mandatory Purchase Date, including any
Series 1 VRDP Shares tendered pursuant to an Optional Tender
or Mandatory Tender for which the Purchase Date has not yet
occurred.
(g) In the event Series 1 VRDP Shares are issued in
certificated form outside the book-entry system of the
Securities Depository and a Holder fails to deliver such Series
1 VRDP Shares to which a Mandatory Purchase relates, on or
prior to the Mandatory Purchase Date, the Holder of such Series
1 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 Series 1 VRDP Shares as of the scheduled Purchase
Date. Any such undelivered Series 1 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 Series 1 VRDP Shares. Any moneys held by the Tender
and Paying Agent for the purchase of undelivered Series 1 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 Series 1 VRDP Shares. The
undelivered Series 1 VRDP Shares shall be deemed to be no
longer Outstanding (except as to entitlement to payment of the
Purchase Price), and the Fund will issue to the purchaser
replacement Series 1 VRDP Share certificates in lieu of such
undelivered Series 1 VRDP Shares.
(h) The Fund 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 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 Purchase Agreement providing a Purchase
Obligation.
13. Miscellaneous.
(a) Amendment of or Supplements to these Articles
Supplementary. The Board of Directors may, by resolution duly
adopted, without shareholder approval (except as
otherwise provided by these Articles Supplementary or required
by applicable law), amend or supplement these Articles
Supplementary to (i) reflect any amendments or supplements
hereto which the Board of Directors is entitled to adopt
pursuant to the terms of these Articles Supplementary without
shareholder approval or (ii) provide for the issuance of
additional shares of Series 1 VRDP (and terms relating
thereto). Each such additional share of Series 1 VRDP shall be
governed by the terms of these Articles Supplementary as so
amended or supplemented.
issu
ed.
(b) N
o
F
r
a
c
t
i
o
n
a
l
S
h
a
r
e
s
..
N
o
f
r
a
c
t
i
o
n
a
l
S
e
r
i
e
s
1
V
R
D
P
S
h
a
r
e
s
s
h
a
l
l
b
e
(c) Status of VRDP Shares Redeemed, Exchanged or
Otherwise Acquired by the Fund. Series 1 VRDP Shares that are
redeemed, exchanged or otherwise acquired by the Fund shall
return to the status of authorized and unissued Preferred Shares
without designation as to series, provided, however, that any
Series 1 VRDP Shares which are provisionally delivered by the
Fund to or for the account of an agent of the Fund or to or for
the account of a purchaser of such Series 1 VRDP Shares, but
for which final payment is not received by the Fund, shall
return to the status of authorized and unissued Series 1 VRDP
Shares.
(d) Purchase Obligation Part of VRDP Shares. Each
Holder and Beneficial Owner, by virtue of acquiring Series 1
VRDP Shares, is deemed to have agreed, for U.S. federal income
tax purposes, to treat the Purchase Obligation as part of the
Series 1 VRDP Shares rather than as a separate property right.
(e) Treatment of VRDP Shares as Stock. Each Holder
and Beneficial Owner, by virtue of acquiring Series 1 VRDP
Shares, is deemed to have agreed, for U.S. federal income tax
purposes, to treat the Series 1 VRDP Shares as stock in the Fund.
(f) Board 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.
(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 Fund 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.
PART II
1. Remarketing Procedures.
(a) Pursuant to an Optional Tender, Beneficial
Owners may elect to tender their Series 1 VRDP Shares (in
denominations of $25,000 and integral multiples thereof) for
Remarketing at the Purchase Price on the Purchase Date
designated in a Notice of Tender (or, if
- 50 -
such day is not a Business Day, on the next succeeding Business
Day). Each Notice of Tender shall be irrevocable (except as
described below) and effective upon receipt 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
Series 1 VRDP Shares to be purchased, the CUSIP number of
the Series 1 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
Purchase Agreement; and
(iii) state that the tendering Beneficial Owner
acknowledges that such Beneficial Owner is required to
deliver the Series 1 VRDP Shares that are the subject of a
Notice of Tender (that has not been duly revoked as
described 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 to the Liquidity Provider
and the Remarketing Agent (with a copy to the Fund) 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) Series 1 VRDP Shares are subject to
Mandatory Tender upon the occurrence of a Mandatory Tender
Event.
(ii) Promptly following the occurrence of a
Mandatory Tender Event, and in any event within three (3)
Business Days thereafter, the Fund, or the Tender and
Paying Agent at the direction of the Fund (provided that
the Tender and Paying Agent may require up to two (2)
Business Days prior notification by Electronic Means by the
Fund), 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 Series 1 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 or Beneficial Owners
receive such notice.
(iii) Upon the occurrence of a Mandatory Tender
Event, all Outstanding Series 1 VRDP Shares automatically
shall be subject to Mandatory Tender
- 51 -
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 Series
1 VRDP Shares previously tendered pursuant to an Optional
Tender for which the Purchase Date has not yet occurred. In
the event that Series 1 VRDP Shares are issued in
certificated form outside the book-entry system of the
Securities Depository and a Holder of Series 1 VRDP
Shares fails to deliver such Series 1 VRDP Shares to which
a Mandatory Tender relates on or prior to the Purchase
Date, the Holder of such Series 1 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 Series 1 VRDP Shares as of the scheduled
Purchase Date. Any such undelivered Series 1 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 Series 1 VRDP
Shares. Any moneys held by the Tender and Paying Agent for
the purchase of undelivered Series 1 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 Series 1 VRDP
Shares. The undelivered Series 1 VRDP Shares will be
deemed to be no longer Outstanding (except as to
entitlement to payment of the Purchase Price), and the
Fund will issue to the purchaser replacement Series 1 VRDP
Share certificates in lieu of such undelivered Series 1 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 Series 1 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
Fund) 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 Series 1 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 and, if the Tender
and Paying Agent has not received such notification by 1:45
p.m., New York City time, the Tender and Paying Agent will
contact the Remarketing Agent at 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 Series 1 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 such Series 1 VRDP Shares. A Notice
of Revocation shall be effective as to the number of Series 1
VRDP Shares specified therein as having been revoked less the
number of such Series 1
- 52 -
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, (x) tendered Series 1 VRDP Shares, if any,
unsold and in respect of which the Remarketing Agent has not
entered into an agreement of sale at or after the time of receipt
by the Remarketing Agent of a Notice of Revocation may, at the
discretion of the Remarketing Agent, be allocated by the
Remarketing Agent to such Notice of Revocation and (y) tendered
Series 1 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 Series 1 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 Series 1 VRDP Shares.
(g) Except as otherwise provided pursuant to Section
4 of Part I of these Articles Supplementary in connection with
a Special Rate Period, the Fund shall use its best efforts to
engage at all times a Remarketing Agent that is a nationally
recognized securities dealer with expertise in remarketing
variable-rate securities to use its best efforts to remarket all
Series 1 VRDP Shares properly tendered pursuant to a Tender in
accordance with Part II of these Articles Supplementary.
2. Remarketing Schedule.
(a) In connection with any attempted Remarketing, all
tendered Series 1 VRDP Shares shall be remarketed at the
Purchase Price of such Series 1 VRDP Shares. The calculation of
the Purchase Price of the Series 1 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 Series 1 VRDP Shares and the
aggregate number and Purchase Price of Series 1 VRDP Shares to
be purchased by the Liquidity Provider pursuant to the
Purchase Obligation, shall be communicated by the Remarketing
Agent to the Fund, 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 the sale of any
remarketed Series 1 VRDP Shares by the Remarketing Agent relating
to tendered Series 1 VRDP Shares shall be used by the Tender
and Paying Agent for the purchase of the tendered Series 1 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 Series 1 VRDP Shares for
sale through the Securities Depository in immediately available
funds against delivery of the tendered Series 1 VRDP Shares to
the Tender and Paying Agent through the Securities Depository,
the delivery of such Series 1 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 Series 1 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.
- 53 -
(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 to the Tender and
Paying Agent and the Liquidity Provider (a "Remarketing
Notice"), by Electronic Means, that sets forth the number of
Series 1 VRDP Shares, if any, that it successfully remarketed
for purchase on such Purchase Date and the aggregate Purchase
Price of such sold Series 1 VRDP Shares and the number of
Series 1 VRDP Shares, if any, not successfully remarketed for
purchase on such Purchase Date and the aggregate Purchase Price
of such unsold Series 1 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 Series 1 VRDP
Shares to be purchased on such Purchase Date, the Tender and
Paying Agent will 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 Fund) a preliminary Notice of Purchase (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 Series 1 VRDP Shares that the Remarketing Agent stated
in the Remarketing Notice as not having been successfully
remarketed, including the aggregate Purchase Price of such
Series 1 VRDP Shares, as calculated by the Remarketing Agent.
If the Remarketing Notice states that the Remarketing Agent has
not successfully remarketed all of the Series 1 VRDP Shares to
be purchased on such Purchase Date (or if Remarketing proceeds
for any tendered Series 1 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 will deliver by Electronic Means to the Liquidity Provider
(with a copy to the Fund) by 12:00 noon, New York City time, on
such Purchase Date a Final Notice of Purchase that states the
number of Series 1 VRDP Shares required to be purchased by the
Liquidity Provider. For purposes of the Final Notice of
Purchase, any tendered Series 1 VRDP Shares for which
Remarketing proceeds 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 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 Series 1 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 Series 1
VRDP Shares, wire transfer the aggregate Purchase Price of all
Series 1 VRDP Shares in respect of which Final Notices of
Purchase have been delivered to it for purchase 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 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, 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 Purchase Agreement and
the Liquidity Provider has received a Remarketing Notice that
such Series 1 VRDP Shares have not been the subject of an
agreement of sale in a Remarketing and has received written
notice from the Fund 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 Purchase Agreement, by payment
against
- 54 -
delivery of the Series 1 VRDP Shares that are the subject of any
such Final Notice of Purchase, in each case, through means of
the Securities Depository in the case of Series 1 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 Series 1 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, Series 1 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 for the benefit of the Liquidity Provider
until the Series 1 VRDP Shares are delivered by the tendering
Beneficial Owners or their Agent Members, in the case of an
Optional Tender, or by the tendering Holder, in the case of a
Mandatory Tender, against payment therefor, or returned to the
Liquidity Provider. 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 for the benefit of the Remarketing
Agent on account of purchasers purchasing in a Remarketing
until the Series 1 VRDP Shares are delivered by the tendering
Beneficial Owners or their Agent Members, in the case of an
Optional Tender, or by the tendering Holders, in the case of a
Mandatory Tender, against payment therefor, or returned to the
Remarketing Agent on account of purchasers purchasing in a
Remarketing. Upon receipt of Series 1 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
Remarketing proceeds from the Remarketing Agent, with respect
to Series 1 VRDP Shares successfully remarketed by the
Remarketing Agent, or in the form of payment pursuant to the
VRDP Purchase Agreement from the Liquidity Provider, with
respect to Series 1 VRDP Shares subject to purchase pursuant to
the Purchase Obligation, the Purchase Price for such Series 1
VRDP Shares to the relevant tendering Beneficial Owners, Agent
Members or Holders, 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 Series 1 VRDP
Shares in the form of global securities, the Remarketing or
purchase by the Liquidity Provider thereof, and payments with
respect to the foregoing, will be accomplished in accordance
with the applicable procedures of the Securities Depository.
(f) The Remarketing Agent and the Tender and Paying
Agent each shall use commercially reasonable efforts to meet
the timing requirements set forth above. At any time that no
Purchase Obligation is in effect (or with respect to a
Remarketing of Series 1 VRDP Shares held by the Liquidity
Provider as to which any then-effective Purchase Obligation by a
successor liquidity provider is inapplicable), any Series 1 VRDP
Shares tendered and unsold in a Remarketing shall be returned to
the relevant tendering Beneficial Owners or their Agent Members,
or the relevant tendering Holders, as the case may be, by the
Tender and Paying
Agent. 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 Fund,
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 Fund. The Remarketing Agent may sell
Series 1 VRDP Shares for its own account outside of a
Remarketing at a price other than the Purchase Price.
(g) In connection with the allocation of Series 1
VRDP tendered for Remarketing by the Liquidity Provider and any
other Holder or Beneficial Owner of shares of Series 1 VRDP in
any Remarketing, the Remarketing Agent shall allocate those
shares of Series 1 VRDP 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 Series 1 VRDP acquired earliest by the Liquidity
Provider).
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 Series
1 VRDP Shares on the first 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 exceed
the Maximum Rate.
(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 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 Fund, the Tender and Paying Agent and the Liquidity
Provider and post the Applicable Rate on Bloomberg.
(c) If the Remarketing Agent establishes the Maximum
Rate as the Applicable Rate for a Subsequent Rate Period, the
Remarketing Agent shall notify the Fund and the Tender and
Paying Agent. The Fund will require in the Tender and Paying
Agent Agreement that the Tender and Paying Agent will notify the
Liquidity Provider and the Holders of Series 1 VRDP Shares by
first class mail, postage prepaid (in the case of physical
shares outside the book-entry system of the Securities
Depository), or Electronic Means (in the case of Series 1 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
Applicable Rate will continue to be the Maximum Rate
(i) until the first 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 28
Rate Period Days or fewer and (ii) until the first 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 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
such 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 Fund of the occurrence of such
Failed Remarketing Condition, by Electronic Means (or by first
class mail, postage prepaid, in the case where the Series 1 VRDP
Shares are in physical form outside the book-entry system of the
Securities Depository) to the Holders (with a copy to the Fund).
5. Purchase of Series 1 VRDP Shares by Remarketing Agent.
The Remarketing Agent in its sole discretion may purchase for
its own account Series 1 VRDP Shares in a Remarketing;
however, the Remarketing Agent shall not be obligated to
purchase any Series 1 VRDP Shares that would otherwise remain
unsold in a Remarketing. None of the Fund, the Tender and
Paying Agent or the Remarketing Agent shall be obligated in any
case to provide funds to make payment to a Beneficial Owner or
its Agent Member or a Holder upon such Beneficial Owner's or
Holder's tender of its Series 1 VRDP Shares in a Remarketing
unless, in each case, such Series 1 VRDP Shares were acquired
for the account of the Fund, the Tender and Paying Agent or the
Remarketing Agent, respectively.
6. Notification of Allocations. Whenever the Fund
intends to include any net capital gains or ordinary income
taxable for regular federal income tax purposes in any dividend
on the Series 1 VRDP Shares, the Fund 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 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 notice is received from
the Fund, the Tender and Paying Agent will notify each Holder
and the Remarketing Agent will 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 Fund may also include such ordinary
income or capital gains in a dividend on shares of Series 1 VRDP
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 Fund will notify the Remarketing Agent
and the Tender and Paying Agent of the additional amounts to be
included in such dividend at least five Business Days prior to
the applicable Dividend Payment Date.
7. Transfers.
(a) Unless otherwise permitted by the Fund, a
Beneficial Owner or Holder may sell, transfer or otherwise
dispose of Series 1 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) a sale, transfer or other
disposition of Series 1 VRDP Shares from a Beneficial Owner who
holds shares through an Agent Member to another Beneficial Owner
who holds shares through the same Agent Member shall be
permitted and (b) in the case of all transfers other than
pursuant to Remarketings, the Agent Member (or other Person, if
permitted by the Fund) to whom such transfer is made shall
advise the Remarketing Agent. The Fund has not registered the
Series 1 VRDP Shares under the Securities Act. Accordingly, the
Series 1 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 Series 1 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 Fund, in the case of a purchase of Series
1 VRDP Shares which are to be cancelled within 10 days of
purchase by the Fund), or 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
Fund, in the case of a purchase of Series 1 VRDP Shares which
are to be cancelled within 10 days of purchase by the Fund),
are not permitted to purchase, directly or indirectly, Series 1
VRDP Shares without the prior written consent of the Liquidity
Provider, and any such purchases without such consent shall be
void ab initio; provided, however, that the Fund shall give
prompt notice to Beneficial Owners by Electronic Means upon
any of the foregoing Persons, singly or in the aggregate,
acquiring a beneficial interest in 20% or more of the Series 1
VRDP Shares; provided, further, that, without regard to the
preceding requirements, purchases of Series 1 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 Series 1 VRDP Shares.
(c) If at any time the Fund 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 Fund shall furnish, or cause
to be furnished, to holders of Series 1 VRDP Shares and
prospective purchasers of Series 1 VRDP Shares, upon request,
information with respect to the Fund 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 Series 1 VRDP 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 (ii) no registration of transfer of shares of
Series 1 VRDP shall be made on the books of the Fund to any
Person other than the Securities Depository or its nominee.
THIRD: These Articles Supplementary has been approved by the
Board of Directors of the Fund in the manner and by the vote
required by law.
FOURTH: The undersigned President and Chief Executive Officer
of the Fund acknowledges these Articles Supplementary to be the
corporate act of the Fund and, as to all matters or facts
required to be verified under oath, the undersigned President
and Chief Executive Officer 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.
IN WITNESS WHEREOF, Western Asset Managed Municipals
Fund Inc. has
caused these presents to
be signed as of
March 4
, 2015 in its name and on
its behalf by
its Chief Executive Officer and attested by its Assistant
Secretary.
WESTERN ASSET MANAGED MUNICIPALS FUND
INC.
By: i/btQ@-
i'fame? Kenneth D. Fuller
Title: Chairman, President and Chief
Executive Officer
ATIEST:
By:___ _
Name: e ge P.
Hoyt Title: A
stant
Secretary
[Signature Page to Articles Supplementary]