BLACKROCK
MUNIYIELD CALIFORNIA QUALITY FUND, INC.
ARTICLES OF AMENDMENT
AMENDING AND RESTATING THE ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE
RIGHTS AND PREFERENCES OF
VARIABLE RATE DEMAND PREFERRED SHARES
Table
of Contents
EXPLANATORY STATEMENT...................................................................................................... 1
DESIGNATION................................................................................................................................ 2
DEFINITIONS.................................................................................................................................. 2
PART I........................................................................................................................................... 20
1......... Number of Authorized
Shares................................................................................ 20
2......... Dividends............................................................................................................... 20
3......... Gross-Up Payments................................................................................................ 24
4......... Designation of
Special Rate Periods....................................................................... 24
5......... Voting Rights.......................................................................................................... 28
6......... Minimum VRDP Shares
Asset Coverage................................................................ 34
7......... VRDP Shares Basic
Maintenance Amount.............................................................. 34
8......... Restrictions on
Dividends and Other Distributions................................................. 34
9......... Rating Agency
Restrictions..................................................................................... 35
10....... Redemption............................................................................................................ 36
11....... Liquidation Rights.................................................................................................. 44
12....... Purchase Obligation................................................................................................ 45
13....... Miscellaneous......................................................................................................... 47
PART II.......................................................................................................................................... 48
1......... Remarketing
Procedures......................................................................................... 48
2......... Remarketing Schedule............................................................................................ 50
3......... Determination of
Applicable Rate.......................................................................... 53
4......... Failed Remarketing
Condition................................................................................ 54
5......... Purchase of VRDP
Shares by Remarketing Agent.................................................. 54
6......... Notification of
Allocations..................................................................................... 54
7......... Transfers................................................................................................................ 55
8......... Global Certificate................................................................................................... 55
BLACKROCK MUNIYIELD
CALIFORNIA QUALITY FUND, INC
ARTICLES OF AMENDMENT
AMENDING AND RESTATING THE ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE
RIGHTS AND PREFERENCES OF
VARIABLE RATE DEMAND PREFERRED SHARES
BlackRock
MuniYield California Quality Fund, Inc., a Maryland corporation (the “Corporation”),
hereby certifies to the State Department of Assessments and Taxation of the
State of Maryland that:
FIRST: The Corporation desires to amend its charter by amending and
restating the Articles Supplementary Establishing and Fixing the Rights and
Preferences of Variable Rate Demand Preferred Shares, dated as April
20, 2011, as previously amended by Articles of Amendment, dated as of June
20, 2012, and Articles of Amendment, dated as of April 23, 2013 (collectively,
the “Original Articles Supplementary”, and as hereinafter amended and restated,
the “Articles Supplementary”).
SECOND:
Pursuant to Section 2-604 of the Maryland General Corporation Law, the
following provisions are all the provisions of the Articles Supplementary of
the Corporation currently in effect:
EXPLANATORY
STATEMENT
A.
Pursuant to authority expressly
vested in the Board of Directors of the Corporation by Article IV of the
Corporation’s Charter, the Board of Directors has, by resolution duly adopted
on April 14, 2011, reclassified 1,665 authorized and unissued shares of common
stock of the Corporation as shares of preferred stock of the Corporation, par
value $0.10 per share, as Variable Rate Demand Preferred Shares (“VRDP Shares”).
The Variable Rate Demand Preferred Shares may be issued in one or more series,
as designated and authorized by the Board of Directors or a duly authorized
committee thereof from time to time (each series of VRDP Shares that may be
authorized and issued, a “Series”).
B.
The preferences
(including liquidation preference), voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of redemption, of the
shares of each Series of VRDP Shares were initially designated in the Original
Articles Supplementary.
C.
The Board of Directors
of the Corporation has by resolution authorized the amendment and restatement
of the Original Articles Supplementary effective as of the Effective Date.
D.
The Holders of the
Series W-7 VRDP Shares have consented to these Articles Supplementary.
E.
The preferences
(including liquidation preference), voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of redemption, of the
shares of each Series of VRDP Shares are as follows or as set forth in an
amendment to these Articles Supplementary or otherwise in the Charter (each
such Series being referred to herein as a “Series of VRDP Shares”).
DESIGNATION
Series W-7: A series of
1,665 shares of preferred stock, par value $0.10 per share, liquidation
preference $100,000 per share, is hereby authorized and designated “Series W-7
Variable Rate Demand Preferred Shares,” also referred to herein as “Series W-7
VRDP Shares.” Each Series W-7 VRDP Share shall be issued on a date determined
by the Board of Directors of the Corporation or pursuant to their delegated
authority; have an Applicable Rate equal to the sum of 0.25% 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, April 20, 2011,
or 0.50% 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, April 27, 2011 and an initial Dividend Payment Date of May 2, 2011;
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 Part I
and II of these Articles Supplementary. The Series W-7 VRDP Shares shall
constitute a separate series of preferred stock of the Corporation and each
Series W-7 VRDP Share shall be identical. Except as otherwise provided with
respect to any additional Series of VRDP Shares, the terms and conditions of
these Articles Supplementary apply to each Series of VRDP Shares.
DEFINITIONS
The following terms shall
have the following meanings (with terms defined in the singular having
comparable meanings when used in the plural and vice versa), unless the context
otherwise requires:
“1940 Act” means the
Investment Company Act of 1940, as amended.
“Agent Member” means
a Person with an account at the Securities Depository that holds one or more
shares of a Series of VRDP Shares through the Securities Depository, directly
or indirectly, for a Beneficial Owner and that will be authorized and
instructed, directly or indirectly, by a Beneficial Owner to disclose
information to the Remarketing Agent and the Tender and Paying Agent with
respect to such Beneficial Owner.
“Alternate VRDP Shares
Purchase Agreement” means any agreement with a successor liquidity provider
replacing the VRDP Shares Purchase Agreement (or any replacement therefor) upon
its termination in accordance with its terms and containing a Purchase
Obligation substantially similar to the Purchase Obligation therein as
determined by the Corporation.
“Applicable Base Rate”
means (i) with respect to a Rate Period of fewer than 49 days, the greater of
(a) the SIFMA Municipal Swap Index or (b) the LIBOR Rate, and (ii) with respect
to a Rate Period of 49 or more days, the LIBOR Rate.
“Applicable Percentage”
shall have the meaning set forth in the definition of the Maximum Rate.
“Applicable Rate”
means the dividend rate per annum on any share of a Series of VRDP Shares for a
Rate Period determined as set forth in paragraph (e)(i) of Section 2
of Part I of these Articles Supplementary or in the definition of “Maximum
Rate,” as applicable.
“Applicable Rate
Determination” means each periodic operation of the process of determining
the Applicable Rate for the shares of a Series of VRDP Shares for a Subsequent
Rate Period, as provided in the VRDP Shares Remarketing Agreement and Part II
of these Articles Supplementary.
“Applicable
Spread” means, in connection with the Maximum Rate for any Rate Period (and
subject to adjustment as described in the definition of Maximum Rate) (i) when
there is not a Failed Remarketing Condition, 200 basis points (2.00%), and (ii)
while a Failed Remarketing Condition has occurred or is continuing, 200 basis
points (2.00%) (up to 59 days of a continued Failed Remarketing Condition), 225
basis points (2.25%) (sixty (60) days but fewer than ninety (90) days of a
continued Failed Remarketing Condition), 250 basis points (2.50%) (ninety (90)
days but fewer than 120 days of a continued Failed Remarketing Condition), 275
basis points (2.75%) (120 days but fewer than 150 days of a continued Failed
Remarketing Condition), 300 basis points (3.00%) (150 days but fewer than 180
days of a continued Failed Remarketing Condition), and 400 basis points (4.00%)
(180 days or more of a continued Failed Remarketing Condition), provided
that, if at any time when the Applicable Spread is 225 basis points (2.25%),
250 basis points (2.50%), 275 basis points (2.75%), 300 basis points (3.00%) or
400 basis points (4.00%) and the Failed Remarketing Condition no longer exists
due to the successful remarketing of all Purchased VRDP Shares, then such
Applicable Spread of225 basis points (2.25%), 250 basis points (2.50%), 275
basis points (2.75%), 300 basis points (3.00%) or 400 basis points (4.00%) will
continue to be the Applicable Spread in connection with determining the Maximum
Rate in effect for each Rate Period commencing with the first Subsequent Rate
Period after the Failed Remarketing Condition no longer exists through and
including the first Subsequent Rate Period ending on or after the 45th day
after the day the Failed Remarketing Condition no longer exists, provided,
further, that (i) if a new Failed Remarketing Condition occurs prior to
the end of such period and the Applicable Spread is then 225 basis points
(2.25%), the date such new Failed Remarketing Condition occurs will be deemed
to be the 60th day of a continued Failed Remarketing Condition, (ii) if a new
Failed Remarketing Condition occurs prior to the end of such period and the
Applicable Spread is then 250 basis points (2.50%), the date such new Failed
Remarketing Condition occurs will be deemed to be the 90th day of a continued
Failed Remarketing Condition, (iii) if a new Failed Remarketing Condition
occurs prior to the end of such period and the Applicable Spread is then 275
basis points (2.75%), the date such new Failed Remarketing Condition occurs
will be deemed to be the 120th day of a continued Failed Remarketing Condition,
(iv) if a new Failed Remarketing Condition occurs prior to the end of such
period and the Applicable Spread is then 300 basis points (3.00%), the date
such new Failed Remarketing Condition occurs will be deemed to be the 150th day
of a continued Failed Remarketing Condition and (v) if a new Failed Remarketing
Condition occurs prior to the end of such period and the Applicable Spread is
then 400 basis points (4.00%), the date such new Failed Remarketing Condition
occurs will be deemed to be the 180th day of a continued Failed Remarketing
Condition, in each case, solely for purposes of determining the Applicable
Spread.
“Articles Supplementary”
means these Articles of Amendment Amending and Restating the Articles
Supplementary Establishing and Fixing the Rights and Preferences of VRDP
Shares.
“Beneficial Owner”
means a Person in whose name shares of a Series of VRDP Shares are recorded as
beneficial owner of such shares of a Series of VRDP Shares by the Securities
Depository, an Agent Member or other securities intermediary on the records of
such Securities Depository, Agent Member or securities intermediary, as the
case may be, or such Person’s subrogee, including the Liquidity Provider to the
extent it is at any time such a beneficial owner of shares of a Series of VRDP
Shares (irrespective of any assignment or transfer by the Liquidity Provider of
its voting rights).
“Board of Directors”
means the Board of Directors of the Corporation or any duly authorized
committee thereof.
“Business Day” means
a day other than a day (a) on which commercial banks in The City of New York,
New York are required or authorized by law or executive order to close or (b)
on which the New York Stock Exchange is closed.
“Charter”
means the Articles of Incorporation of the Corporation, as amended and
supplemented (including these Articles Supplementary), on file in the State
Department of Assessments and Taxation of the State of Maryland.
“Code” means the
Internal Revenue Code of 1986, as amended.
“Common Shares”
means the shares of common stock, par value $0.10 per share, of the Corporation.
“Cure Date” means
the VRDP Shares Basic Maintenance Cure Date or the Minimum VRDP Shares Asset
Coverage Cure Date, as the case may be.
“Custodian” means a
bank, as defined in Section 2(a)(5) of the 1940 Act, that has the
qualifications prescribed in paragraph 1 of Section 26(a) of the 1940
Act, or such other entity as shall be providing custodian services to the
Corporation as permitted by the 1940 Act or any rule, regulation, or order
thereunder, and shall include, as appropriate, any similarly qualified
sub-custodian duly appointed by the Custodian.
“Date of Original Issue,”
with respect to shares of a Series of VRDP Shares, means the date on which the
Corporation initially issued such VRDP Shares.
“Deposit Securities”
means, as of any date, any United States dollar-denominated security or other
investment of a type described below that either (i) is a demand obligation
payable to the holder thereof on any Business Day or (ii) has a maturity date,
mandatory redemption date or mandatory payment date, on its face or at the
option of the holder, preceding the relevant payment date in respect of which
such security or other investment has been deposited or set aside as a Deposit
Security:
(1) cash or any cash
equivalent;
(2) any U.S.
Government Security;
(3) any Municipal
Obligation that has a credit rating from at least one NRSRO that is the highest
applicable rating generally ascribed by such NRSRO to Municipal Obligations
with substantially similar terms as of the date of these Articles Supplementary
(or such rating’s future equivalent), including (A) any such Municipal
Obligation that has been pre-refunded by the issuer thereof with the proceeds
of such refunding having been irrevocably deposited in trust or escrow for the
repayment thereof and (B) any such fixed or variable rate Municipal Obligation
that qualifies as an eligible security under Rule 2a-7 under the 1940 Act;
(4) any investment
in any money market fund registered under the 1940 Act that qualifies under
Rule 2a-7 under the 1940 Act, or similar investment vehicle described in Rule
12dl-l(b)(2) under the 1940 Act, that invests principally in Municipal
Obligations or U.S. Government Securities or any combination thereof; or
(5) any letter of
credit from a bank or other financial institution that has a credit rating from
at least one NRSRO that is the highest applicable rating generally ascribed by
such NRSRO to bank deposits or short-term debt of similar banks or other
financial institutions as of the date of these Articles Supplementary (or such
rating’s future equivalent).
“Discounted Value,”
as of any Valuation Date, shall have the meaning set forth in the Rating Agency
Guidelines.
“Dividend
Payment Date,” except as otherwise provided in paragraph (d) of Section 2
of Part I of these Articles Supplementary, means the date that is the
first (1st) Business Day of each calendar month.
“Dividend Period,”
with respect to shares of a Series of VRDP Shares, means the period from, and
including, the Date of Original Issue of shares of such Series to, but
excluding, the initial Dividend Payment Date for shares of such Series and any
period thereafter from, and including, one Dividend Payment Date for shares of
such Series to, but excluding, the next succeeding Dividend Payment Date for
shares of such Series.
“Effective Date”
means June 19, 2019.
“Effective Leverage
Ratio” has the meaning set forth in the Fee Agreement.
“Effective Leverage
Ratio Cure Period” has the meaning set forth in the Fee Agreement.
“Electronic Means” means
email transmission, facsimile transmission or other similar electronic means of
communication providing evidence of transmission (but excluding online
communications systems covered by a separate agreement) acceptable to the
sending party and the receiving party, in any case if operative as between the
relevant two (2) parties, or, if not operative, by telephone (promptly confirmed
by any other method set forth in this definition), which, in the case of
notices to the Tender and Paying Agent, shall be sent by such means as set
forth in Section 7.02 of the Tender and Paying Agent Agreement or as
specified in the related notice.
“Exchange Act” means
the U.S. Securities Exchange Act of 1934, as amended.
“Extraordinary Corporate
Event” means as to the Liquidity Provider, (i) the consolidation or
amalgamation with, or merger with and into, or the transfer of all or
substantially all of the Liquidity Provider’s assets to, another entity, or
(ii) the dissolution, for any reason, of the Liquidity Provider other than in
connection with the consolidation 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; 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 Shares Purchase
Agreement and (b) has short-term debt ratings in one of the two highest ratings
categories from the Requisite NRSROs and (y) the Liquidity Provider has
provided notice in writing to the Corporation confirming the information described
in (x) at least ten (10) days prior to the scheduled date of the applicable
listed occurrence in (i) above.
“Failed Remarketing
Condition” means a Failed Remarketing Condition-Purchased VRDP Shares or a
Failed Remarketing Condition-Unpurchased VRDP Shares.
“Failed Remarketing
Condition-Purchased VRDP Shares” means that the Liquidity Provider acquires
and continues to be the beneficial owner for federal income tax purposes of any
shares of a Series of VRDP Shares in connection with purchases made pursuant to
the Purchase Obligation (whether as a result of an unsuccessful Remarketing or
a Mandatory Purchase) on any Purchase Date, including shares of a Series of
VRDP Shares that the Liquidity Provider continues to be the beneficial owner of
for federal income tax purposes after the expiration or termination of the VRDP
Shares Purchase Agreement.
“Failed
Remarketing Condition-Purchased VRDP Shares Redemption” means redemption by
the Corporation, at a redemption price equal to $100,000 per share plus
accumulated but unpaid dividends thereon (whether or not earned or declared)
to, but excluding, the date fixed by the Board of Directors for redemption, of
shares of a Series of VRDP Shares that the Liquidity Provider shall have
acquired pursuant to the Purchase Obligation and continued to be the beneficial
owner of for federal income tax purposes for a continuous period of six (6) months
during which such VRDP Shares are tendered for Remarketing on each Business Day
in accordance with the Related Documents but cannot be successfully remarketed
pursuant to such Remarketings (i.e., a Failed Remarketing Condition-Purchased
VRDP Shares shall have occurred and be continuing for such period of time with
respect to such VRDP Shares), determined by the Corporation on a first-in,
first-out basis, in accordance with and subject to the provisions of the Fee
Agreement and these Articles Supplementary.
“Failed Remarketing
Condition-Unpurchased VRDP Shares” means that a Beneficial Owner (other
than the Liquidity Provider or its affiliates) continues to hold shares of a
Series of VRDP Shares, that were subject to a Tender in accordance with the
VRDP Shares Purchase Agreement, after any Purchase Date as a result of the
failure by the Liquidity Provider for any reason to purchase such VRDP Shares
pursuant to the Purchase Obligation (whether as a result of an unsuccessful
Remarketing or a Mandatory Purchase) (“Unpurchased VRDP Shares”), until such
time as all Outstanding Unpurchased VRDP Shares are (i) successfully remarketed
pursuant to a Remarketing, (ii) purchased by the Liquidity Provider pursuant to
the Purchase Obligation, or (iii) if not successfully remarketed pursuant to a
Remarketing or purchased by the Liquidity Provider pursuant to the Purchase
Obligation, the subject of a validly tendered Notice of Revocation (or any
combination of the foregoing); and any Unpurchased VRDP Shares shall be deemed
tendered for Remarketing until the earliest to occur of the foregoing events
(i), (ii) or (iii) with respect to such Unpurchased VRDP Shares.
“Failure to Deposit”
means, with respect to shares of a Series of VRDP Shares, a failure by the
Corporation to pay to the Tender and Paying Agent, not later than 12:00 noon,
New York City time, (A) on the Business Day immediately preceding any Dividend
Payment Date for shares of such Series, in funds available on such Dividend
Payment Date in The City of New York, New York, the full amount of any dividend
(whether or not earned or declared) to be paid on such Dividend Payment Date on
any share of such Series or (B) on the Business Day immediately preceding any
redemption date in funds available on such redemption date for shares of such Series
in The City of New York, New York, the Redemption Price to be paid on such
redemption date for any share of such Series after Notice of Redemption is
provided pursuant to paragraph (c) of Section 10 of Part I of
these Articles Supplementary; provided, however, that the
foregoing clause (B) shall not apply to the Corporation’s failure to pay the
Redemption Price in respect of shares of a Series of VRDP Shares when the
related Notice of Redemption provides that redemption of such shares is subject
to one or more conditions precedent and any such condition precedent shall not
have been satisfied at the time or times and in the manner specified in such
Notice of Redemption.
“Fee Agreement”
means the VRDP Shares Fee Agreement, dated as of June 19, 2019, between the
Corporation and the Liquidity Provider, as amended, modified or supplemented
from time to time or any similar agreement with a successor Liquidity Provider.
“Final Notice of
Purchase” means, in connection with an Optional Tender or a Mandatory
Tender, a Notice of Purchase delivered by the Tender and Paying Agent to the
Liquidity Provider (or directly to the Liquidity Provider by Beneficial Owners
or their Agent Members, in the case of an Optional Tender, or Holders, in the
case of a Mandatory Tender, if there is no Tender and Paying Agent or for any
reason the Tender and Paying Agent does not perform its obligations) on the
Purchase Date indicating the number of shares of a Series of VRDP Shares to be
purchased on such date pursuant to the Purchase
Obligation, or, in connection with a Mandatory Purchase, the Mandatory Purchase
Notice delivered by the Corporation or the Tender and Paying Agent on behalf of
the Corporation.
“Fitch” means Fitch
Ratings.
“Fitch Eligible Assets”
means assets of the Corporation set forth in the Fitch Guidelines as eligible
for inclusion in calculating the Discounted Value of the Corporation’s assets
in connection with Fitch ratings of shares of a Series of VRDP Shares at the request
of the Corporation.
“Fitch Guidelines”
means the guidelines applicable to Fitch’s current ratings of the VRDP Shares,
provided by Fitch in connection with Fitch’s ratings of shares of a Series of
VRDP Shares at the request of the Corporation (a copy of which is available on
request to the Corporation), in effect on the date hereof and as may be amended
from time to time, provided, however that any such amendment will
not be effective for thirty (30) days from the date that Fitch provides final
notice of such amendment to the Corporation.
“Fitch Provisions”
means Sections 7, 8(c)(B) and 9 of Part I of these Articles Supplementary
with respect to Fitch, and any other provisions hereof with respect to Fitch’s
ratings of shares of a Series of VRDP Shares at the request of the Corporation,
including any provisions with respect to obtaining and maintaining a rating on
VRDP Shares from Fitch. The Corporation is required to comply with the Fitch
Provisions only if Fitch is then rating shares of a Series of VRDP Shares at
the request of the Corporation.
“Gross-up Payment”
means payment to a Beneficial Owner of an amount which, when taken together
with the aggregate amount of Taxable Allocations made to such Beneficial Owner
to which such Gross-up Payment relates, would cause such Beneficial Owner’s
dividends in dollars (after regular federal income tax consequences) from the
aggregate of such Taxable Allocations and the related Gross-up Payment to be
equal to the dollar amount of the dividends which would have been received by
such Beneficial Owner if the amount of such aggregate Taxable Allocations would
have been excludable from the gross income of such Beneficial Owner. Such
Gross-up Payment shall be calculated (i) without consideration being given to
the time value of money; (ii) assuming that no Beneficial Owner of shares of a
Series of VRDP Shares is subject to the federal alternative minimum tax with
respect to dividends received from the Corporation; (iii) assuming that each
Taxable Allocation and each Gross-up Payment (except to the extent such
Gross-up Payment is designated as an exempt-interest dividend under Section 852(b)(5)
of the Code or successor provisions) would be taxable in the hands of each
Beneficial Owner of shares of a Series of VRDP Shares at the maximum marginal
combined regular federal and California individual income tax rate applicable
to ordinary income or net capital gains (taking into account the federal income
tax deductibility of state taxes paid or incurred), as applicable, or the
maximum marginal combined regular federal and California corporate income tax
rate applicable to ordinary income or net capital gains (taking into account
the federal income tax deductibility of state taxes paid or incurred), as
applicable, whichever is greater, in effect at the time such Gross-up Payment
is made; and (iv) assuming that each Taxable Allocation and each Gross-up
Payment would not be subject to the tax imposed by Section 1411 of the
Code or any similar Medicare or other surtax.
“Holder” means a
Person in whose name a share of a Series of VRDP Shares is registered in the
registration books of the Corporation maintained by the Tender and Paying
Agent.
“Initial Rate Period,”
with respect to Series W-7 VRDP Shares, means the period commencing on and
including the Date of Original Issue thereof and ending on, and including,
April 27, 2011, the next succeeding Wednesday, as set forth under “Designation”
above.
“Investment
Adviser” means BlackRock Advisors, LLC, or any successor company or entity.
“Late Charge” shall have the meaning specified in paragraph (e)(i)(C) of Section 2
of Part I of these Articles Supplementary.
“LIBOR Dealer” means
such LIBOR dealer or dealers as the Corporation from time to time may appoint
or in lieu of any thereof, their respective affiliates and successors.
“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 Corporation’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 Corporation’s approval) that is
representative of a single transaction in such market at such time by reference
to the principal London offices of leading banks in the London interbank market;
provided, however, that if one of the LIBOR Dealers does not
quote a rate required to determine the LIBOR Rate, the LIBOR Rate will be
determined on the basis of the quotation or quotations furnished by any
Substitute LIBOR Dealer or Substitute LIBOR Dealers selected by the Corporation
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.
“Liquidation Preference,”
with respect to a given number of Series W-7 VRDP Shares, means $ 100,000 times
that number.
“Liquidity Account
Investments” means Deposit Securities or any other security or investment
owned by the Corporation that is rated at least A- or the equivalent rating (or
any such rating’s future equivalent) by each NRSRO then rating such security or
investment (or if rated by only one NRSRO, by such NRSRO) or, if no NRSRO is
then rating such security, deemed to be, with the prior written
consent of the Liquidity Provider, of an equivalent rating by the Investment
Adviser on the Corporation’s books and records.
“Liquidity Provider”
means any entity in such capacity pursuant to a VRDP Shares Purchase Agreement.
“Liquidity Provider
Ratings Event” means the Liquidity Provider shall fail to maintain at any
time short-term debt ratings in one of the two highest rating categories from
the Requisite NRSROs.
“Liquidity Provider
Ratings Event Termination Date” means the date established by the Tender
and Paying Agent, acting upon instructions of the Corporation pursuant to the
Tender and Paying Agent Agreement, for termination of the VRDP Shares Purchase
Agreement upon the occurrence of a Liquidity Provider Ratings Event, which date
shall be not less than sixteen (16) days nor more than thirty (30) days
following the date on which such Liquidity Provider Ratings Event first occurs.
“London Business Day”
means any day on which commercial banks are generally open for business in
London.
“Mandatory Purchase”
means the mandatory purchase of Outstanding shares of a Series of VRDP Shares
by the Liquidity Provider pursuant to the VRDP Shares Purchase Agreement in
connection with a Mandatory Purchase Event.
“Mandatory Purchase Date”
means the Purchase Date for a Mandatory Purchase in accordance with these
Articles Supplementary and the VRDP Shares Purchase Agreement.
“Mandatory Purchase
Event” means, (i) in connection with the termination of the VRDP Shares
Purchase Agreement due to its expiration as of a Scheduled Termination Date, by
the fifteenth day prior to any such Scheduled Termination Date, (a) the
Liquidity Provider shall not have agreed to an extension or further extension
of the Scheduled Termination Date to a date not earlier than 180 days from the
Scheduled Termination Date of the VRDP Shares Purchase Agreement then in
effect, and (b) the Corporation shall not have obtained and delivered to the
Tender and Paying Agent an Alternate VRDP Shares Purchase Agreement with a
termination date not earlier than 180 days from the Scheduled Termination Date
of the VRDP Shares Purchase Agreement, or (ii) in connection with the
termination of the VRDP Shares Purchase Agreement due to a Liquidity Provider
Ratings Event or Related Party Termination Event, by the fifteenth day prior to
the Liquidity Provider Ratings Event Termination Date or Related Party
Termination Date, as the case may be, the Corporation shall not have obtained
and delivered to the Tender and Paying Agent an Alternate VRDP Shares Purchase
Agreement with a termination date not earlier than 180 days from the Liquidity
Provider Ratings Event Termination Date or Related Party Termination Date, as
the case may be, of the VRDP Shares Purchase Agreement. The Mandatory Purchase
Event shall be deemed to occur on such fifteenth day prior to any Scheduled
Termination Date, Liquidity Provider Ratings Event Termination Date or Related
Party Termination Date, as the case may be.
“Mandatory Purchase
Notice” means, in connection with the Mandatory Purchase of shares of a
Series of VRDP Shares, a notice, substantially in the form attached to the VRDP
Shares Purchase Agreement as Exhibit B, delivered by the Corporation or the
Tender and Paying Agent on behalf of the Corporation to the Holders and the
Liquidity Provider in accordance with the VRDP Shares Purchase Agreement and specifying
a Mandatory Purchase Date.
“Mandatory
Tender,” with respect to a Mandatory Tender Event, means the mandatory tender
of all shares of a Series of VRDP Shares by Holders for Remarketing or, in the
event (i) no Remarketing occurs on or before the Purchase Date or (ii) pursuant
to an attempted Remarketing, shares of the Series of VRDP Shares remain unsold
and the Remarketing Agent does not purchase for its own account the unsold
shares of the Series of VRDP Shares tendered to the Tender and Paying Agent for
Remarketing (provided, that the Remarketing Agent may seek to sell such
shares of the Series of VRDP Shares in a subsequent Remarketing prior to the
Purchase Date), for purchase by the Liquidity Provider at the Purchase Price
pursuant to Section 2 of Part II of these Articles Supplementary and
the VRDP Shares Purchase Agreement.
“Mandatory Tender Event”
means (a) each failure by the Corporation to make a scheduled payment of
dividends on a Dividend Payment Date; (b) the occurrence of a Liquidity
Provider Ratings Event (which shall constitute a single Mandatory Tender Event
upon the occurrence of such Liquidity Provider Ratings Event, whether or not
continuing and whether or not such Liquidity Provider Ratings Event also
results in a Mandatory Purchase Event; provided that, following
restoration of the short-term debt ratings to the requisite level, a subsequent
Liquidity Provider Ratings Event, shall constitute a new Mandatory Tender
Event); (c) in the event of a failure by the Corporation to pay the Liquidity
Provider the applicable fee when due under the terms of the Fee Agreement, if
the Liquidity Provider (in its sole discretion) thereafter provides written
notice to the Corporation that such failure to pay such fee constitutes a
Mandatory Tender Event; (d) the eighth (8th) day prior to the scheduled date of
the occurrence of an Extraordinary Corporate Event; (e) the Corporation shall
have obtained and delivered to the Tender and Paying Agent an Alternate VRDP
Shares Purchase Agreement by the fifteenth (15th) day prior to the Scheduled
Termination Date, Liquidity Provider Ratings Event Termination Date or Related
Party Termination Date, as the case may be, of the VRDP Shares Purchase
Agreement; (f) the Corporation shall have provided a Notice of Proposed Special
Rate Period in accordance with these Articles Supplementary; or (g) in the
event of a breach by the Corporation of its Effective Leverage Ratio covenant
with the Liquidity Provider in the Fee Agreement and the failure to cure such
breach within sixty (60) days from the date of such breach (which 60-day period
would include the Effective Leverage Ratio Cure Period), if the Liquidity
Provider (in its sole discretion) thereafter provides written notice to the
Corporation and the Tender and Paying Agent that the failure to timely cure such
breach constitutes a Mandatory Tender Event (subject to the Corporation curing
such breach prior to the delivery date of such notice from the Liquidity
Provider).
“Mandatory Tender Notice”
means, in connection with the Mandatory Tender of shares of a Series of VRDP
Shares, a notice, substantially in the form attached to the VRDP Shares
Remarketing Agreement as Annex II, delivered by the Corporation or the Tender
and Paying Agent on behalf of the Corporation to the Holders and the Liquidity
Provider in accordance with the VRDP Shares Purchase Agreement and specifying a
Mandatory Tender Event and Purchase Date.
“Market Value” of
any asset of the Corporation means the market value thereof determined by an
independent third-party pricing service designated pursuant to the Corporation’s
valuation policies and procedures approved from time to time by the Board of
Directors for use in connection with the determination of the Corporation’s net
asset value. Market Value of any asset shall include any interest or dividends,
as applicable, accrued thereon. The pricing service values portfolio securities
at the mean between the quoted bid and asked price or the yield equivalent when
quotations are readily available. Securities for which quotations are not readily
available are valued at fair value as determined by the pricing service using
methods which include consideration of, yields or prices of municipal bonds of
comparable quality, type of issue, coupon, maturity and rating; indications as
to value from dealers; and general market conditions. The pricing service may
employ electronic data processing techniques or a matrix system, or both, to
determine valuations.
“Maximum
Rate” for shares of a Series of VRDP Shares on any Rate Determination Date
or in respect of the occurrence of a Failed Remarketing Condition for shares of
such series, means the Applicable Percentage of the Applicable Base Rate plus
the Applicable Spread. The Maximum Rate for shares of a Series of VRDP Shares
will depend on the long-term rating assigned to such Series of VRDP Shares, the
length of the Rate Period and whether or not the Corporation has given notification
to the Remarketing Agent and the Tender and Paying Agent prior to the
Applicable Rate Determination for the Rate Period pursuant to Section 6 of
Part II hereto that any ordinary income or capital gains will be included
in the dividend on shares of a Series of VRDP Shares for that Rate Period. The
Applicable Percentage of the Applicable Base Rate is as follows:
Long-Term Rating
|
Applicable Percentage of Applicable Base Rate—
No Notification
|
Fitch
|
Moody’s
|
|
AA- to AAA
|
Aa3 to Aaa
|
100%
|
BBB- to A+
|
Baa3 to A1
|
110%
|
Below BBB-**
|
Below Baa3**
|
135%
|
___________________
* And/or the equivalent ratings of any Other
Rating Agency then rating the shares of the Series of VRDP Shares at the
request of the Corporation; utilizing the lower of the ratings of the Rating Agencies
then rating VRDP Shares at the request of the Corporation.
** Includes unrated, if no Rating Agency is then
rating VRDP Shares.
provided, however,
that in the event the Corporation has given notification prior to the
Applicable Rate Determination for the Rate Period pursuant to Section 6 of
Part II hereof that any ordinary income and capital gains will be included
in the dividend on shares of the Series of VRDP Shares for that Rate Period,
the Applicable Percentage in the foregoing table shall be divided by the
quantity one (1) minus (i) the maximum marginal combined regular federal and
California personal income tax rate (taking into account the federal income tax
deductibility of state taxes paid or incurred) applicable to ordinary income or
net capital gains (as applicable), each expressed as a decimal applicable to ordinary
income or net capital gains (as applicable), or (ii) the maximum marginal
combined regular federal and California corporate income tax rate (taking into
account the federal income tax deductibility of state taxes paid or incurred)
applicable to ordinary income or net capital gains (as applicable), each
expressed as a decimal applicable to ordinary income or net capital gains (as
applicable), whichever is greater and determined on a weighted average basis in
respect of the relative amounts of ordinary income and net capital gains.
The Applicable Percentage
as so determined and the Applicable Spread may be subject to upward (and if
previously adjusted upward, subsequent downward) adjustment as provided in the
VRDP Shares Remarketing Agreement, with the prior written consent of the
Liquidity Provider and after consultation with the Remarketing Agent, provided,
that, notwithstanding any provision to the contrary in the VRDP Shares
Remarketing Agreement, the Maximum Rate is equal to or higher than the rates
determined as set forth above, and immediately following any such increase, the
Corporation would be in compliance with the Minimum VRDP Shares Asset Coverage
and the VRDP Shares Basic Maintenance Amount in the Rating Agency Guidelines
of the NRSRO or NRSROs then rating the VRDP Shares at the request of the
Corporation. Furthermore, in the event of
Special Rate Periods of greater than 364 days, the Maximum Rate may be subject
to upward adjustment as provided in the VRDP Shares Remarketing Agreement, with
the prior written consent of the Liquidity Provider and after consultation with
the Remarketing Agent; provided, that, notwithstanding any provision to
the contrary in the VRDP Shares Remarketing Agreement, immediately following
any such increase, the Corporation would be in compliance
with the Minimum VRDP Shares Asset Coverage and the VRDP Shares Basic
Maintenance Amount in the Rating Agency Guidelines of the NRSRO or
NRSROs then rating the VRDP Shares at the request of the Corporation.
A Maximum Rate in effect in
respect of a Failed Remarketing Condition will continue to be the Applicable
Rate (i) until the first (1st) day of the next succeeding Subsequent Rate
Period after a Failed Remarketing Condition no longer exists in the case of a
Minimum Rate Period or a Special Rate Period of twenty eight (28) Rate Period
Days or fewer, and (ii) until the first (1st) day of the next succeeding
Dividend Period after a Failed Remarketing Condition no longer exists in the
case of a Special Rate Period of greater than twenty-eight (28) Rate Period
Days.
Notwithstanding any
provision to the contrary in the VRDP Shares Remarketing Agreement, in no event
shall the Maximum Rate exceed 15%; provided, however, that in the
event the Corporation has given notification prior to the Applicable Rate
Determination for the Rate Period pursuant to Section 6 of Part II
hereof that any ordinary income or capital gains will be included in the
dividend on shares of the Series of VRDP Shares for that Rate Period, the
Maximum Rate shall not exceed 15% divided by the quantity one (1) minus (i) the
maximum marginal combined regular federal and California personal income tax
rate (taking into account the federal income tax deductibility of state taxes
paid or incurred) applicable to ordinary income or net capital gains (as
applicable), each expressed as a decimal applicable to ordinary income or net capital
gains (as applicable), or (ii) the maximum marginal combined regular federal
and California corporate income tax rate (taking into account the federal
income tax deductibility of state taxes paid or incurred) applicable to
ordinary income or net capital gains (as applicable), each expressed as a
decimal applicable to ordinary income or net capital gains (as applicable),
whichever is greater and determined on a weighted average basis in respect of
the relative amounts of ordinary income and net capital gains.
“Minimum Rate Period”
means any Rate Period consisting of seven (7) Rate Period Days, as adjusted to
reflect any changes when the regular day that is a Rate Determination Date is
not a Business Day.
“Minimum VRDP Shares
Asset Coverage” means asset coverage, as defined in Section 18(h) of
the 1940 Act as of the date of the Fee Agreement (excluding (1) from the
denominator of such asset coverage test any senior securities for which the
Corporation has issued a Notice of Redemption and either has delivered Deposit
Securities to the Tender and Paying Agent or otherwise has adequate Deposit
Securities on hand and segregated on the books and records of the Custodian for
the purpose of such redemption and (2) from the numerator of such asset
coverage test, any Deposit Securities referred to in the previous clause (1)),
with such changes thereafter as agreed with the prior written consent of the
Liquidity Provider, of at least 200% or such higher percentage as required and
specified in the Fee Agreement, but, in any event, not more than 250%, with
respect to all outstanding senior securities of the Corporation which are
stock, including all Outstanding VRDP Shares (or, in each case, if higher, such
other asset coverage as may in the future be specified in or under the 1940 Act
as the minimum asset coverage for senior securities which are stock of a
closed-end investment company as a condition of declaring dividends on its
common shares or stock).
“Minimum VRDP Shares
Asset Coverage Cure Date,” with respect to the failure by the Corporation
to maintain the Minimum VRDP Shares Asset Coverage (as required by Section 6
of Part I of these Articles Supplementary and the Fee Agreement) as of the
last Business Day of each month, means the tenth Business Day of the following
month.
“Moody’s” means
Moody’s Investors Service, Inc.
“Moody’s
Discount Factor” means the discount factors set forth in the Moody’s Guidelines
for use in calculating the Discounted Value of the Corporation’s assets in
connection with Moody’s ratings of shares of a Series of VRDP Shares at the
request of the Corporation.
“Moody’s Eligible Assets”
means assets of the Corporation set forth in the Moody’s Guidelines as eligible
for inclusion in calculating the Discounted Value of the Corporation’s assets
in connection with Moody’s ratings of shares of a Series of VRDP Shares at the
request of the Corporation.
“Moody’s Guidelines”
means the guidelines applicable to Moody’s current ratings of the VRDP Shares,
provided by Moody’s in connection with Moody’s ratings of shares of a Series of
VRDP Shares at the request of the Corporation (a copy of which is available on
request of the Corporation), in effect on the date hereof and as may be amended
from time to time; provided, however, that any such amendment
will not be effective for thirty (30) days from the date that Moody’s provides
final notice of such amendment to the Corporation.
“Moody’s Provisions”
means Sections 7, 8(c)(B) and 9 of Part I of these Articles Supplementary
with respect to Moody’s, and any other provisions hereof with respect to Moody’s
ratings of shares of a Series of VRDP Shares at the request of the Corporation,
including any provisions hereof with respect to obtaining and maintaining a
rating on shares of a Series of VRDP Shares from Moody’s. The Corporation is
required to comply with the Moody’s Provisions only if Moody’s is then rating
shares of a Series of VRDP Shares at the request of the Corporation.
“Municipal Obligations”
means Municipal Bonds as defined under the caption “The Fund’s Investments” in
the Offering Memorandum.
“Net Tax-Exempt Income”
means the excess of the amount of interest excludable from gross income under Section 103(a)
of the Code over the amounts disallowed as deductions under Sections 265 and 171(a)(2)
of the Code.
“Notice of Proposed
Special Rate Period” means any notice with respect to a proposed Special
Rate Period of shares of a Series of VRDP Shares pursuant to paragraph (c)
of Section 4 of Part I of these Articles Supplementary.
“Notice of Purchase”
means, as the context requires, a Preliminary Notice of Purchase or a Final
Notice of Purchase, in each case, substantially in the form attached as Exhibit
A to the VRDP Shares Purchase Agreement.
“Notice of Redemption”
has the meaning specified in paragraph (c) of Section 10 of Part I
of these Articles Supplementary.
“Notice of Revocation”
means, in connection with the revocation by a Beneficial Owner or its Agent
Member of its Notice of Tender, a notice, substantially in the form attached to
the Tender and Paying Agent Agreement as Exhibit C, delivered by a Beneficial
Owner or its Agent Member to the Tender and Paying Agent indicating an intention
to revoke the tender of some or all of the shares of a Series of VRDP Shares
for sale on a Purchase Date pursuant to paragraph (f) of Section I of
Part II of these Articles Supplementary.
“Notice of Special Rate
Period” means any notice with respect to a Special Rate Period of shares of
a Series of VRDP Shares pursuant to paragraph (d)(i) of Section 4 of Part I
of these Articles Supplementary.
“Notice
of Tender” means, in connection with an Optional Tender, a notice,
substantially in the form attached to the Tender and Paying Agent Agreement as
Exhibit A, delivered by a Beneficial Owner or its Agent Member to the Tender
and Paying Agent, indicating an intention to tender shares of a Series of VRDP
Shares for sale on a Purchase Date pursuant to Section I of Part II
of these Articles Supplementary.
“NRSRO” means a “nationally
recognized statistical rating organization” within the meaning of Section 3(a)(62)
of the Exchange Act that is not an “affiliated person” (as defined in Section 2(a)(3)
of the 1940 Act) of the Corporation or the Liquidity Provider, including, at
the date hereof, Moody’s, Fitch and S&P.
“Offering Memorandum”
means the offering memorandum in respect of the Corporation’s sale of Series
W-7 VRDP Shares, dated June 19, 2019, as amended, revised or supplemented from time
to time, including in connection with any Remarketing, if applicable.
“Optional Tender”
means any tender of shares of a Series of VRDP Shares by a Beneficial Owner or
its Agent Member to the Tender and Paying Agent, other than a Mandatory Tender,
for Remarketing or, in the event (i) no Remarketing occurs on or before the
Purchase Date, or (ii) pursuant to an attempted Remarketing shares of a Series
of VRDP Shares remain unsold and the Remarketing Agent does not purchase for
its own account the unsold shares of a Series of VRDP Shares tendered to the
Tender and Paying Agent for Remarketing, (provided, that the Remarketing
Agent may seek to sell such VRDP Shares in a subsequent Remarketing prior to
the Purchase Date), for purchase by the Liquidity Provider pursuant to Section 2
of Part II of these Articles Supplementary and the VRDP Shares Purchase
Agreement.
“Other Rating Agency”
means each NRSRO, if any, other than Moody’s or Fitch then providing a rating
for the shares of a Series of VRDP Shares at the request of the Corporation.
“Other Rating Agency
Eligible Assets” means assets of the Corporation set forth in the Other
Rating Agency Guidelines as eligible for inclusion in calculating the
Discounted Value of the Corporation’s assets in connection with Other Rating
Agency ratings of shares of a Series of VRDP Shares at the request of the
Corporation.
“Other Rating Agency
Guidelines” means the guidelines applicable to each Other Rating Agency’s
ratings of the VRDP Shares, provided by such Other Rating Agency in connection
with such Other Rating Agency’s ratings of shares of a Series of VRDP Shares at
the request of the Corporation (a copy of which is available on request to the
Corporation), as may be amended from time to time, provided, however
that any such amendment will not be effective except as agreed upon by the
Other Rating Agency and the Corporation.
“Other Rating Agency
Provisions” means Sections 7, 8(c)(B) and 9 of Part I of these
Articles Supplementary with respect to any Other Rating Agency then rating
shares of a Series of VRDP Shares at the request of the Corporation, and any
other provisions hereof with respect to such Other Rating Agency’s ratings of
shares of a Series of VRDP Shares, including any provisions with respect to
obtaining and maintaining a rating of shares of a Series of VRDP Shares from
such Other Rating Agency. The Corporation is required to comply with the Other
Rating Agency Provisions of an Other Rating Agency only if such Other Rating
Agency is then rating shares of a Series of VRDP Shares at the request of the
Corporation.
“Outstanding” means,
as of any date with respect to VRDP Shares of any Series, the number of shares
of such Series theretofore issued by the Corporation except, without
duplication, (i) any shares of such Series of VRDP
Shares theretofore cancelled or delivered to the Tender and Paying Agent for
cancellation or redemption by the Corporation, (ii) any shares of such Series
of VRDP Shares with respect to which the Corporation has given a Notice of
Redemption and irrevocably deposited with the Tender and Paying Agent sufficient
Deposit Securities to redeem such shares of such Series of VRDP Shares,
pursuant to Section 10 of Part I of these Articles Supplementary, (iii)
any shares of such Series of VRDP Shares as to which the Corporation shall be a
Beneficial Owner, and (iv) any shares of such Series of VRDP Shares represented
by any certificate in lieu of which a new certificate has been executed and
delivered by the Corporation, provided, however, with respect to
clause (ii), any such shares of such Series of VRDP Shares will be deemed to be
Outstanding for purposes of the VRDP Shares Purchase Agreement until redeemed
by the Corporation.
“Person” means and
includes an individual, a partnership, a corporation, a trust, an
unincorporated association, a joint venture or other entity or government or
any agency or political subdivision thereof.
“Preferred Shares”
mean the shares of preferred stock of the Corporation, and includes the VRDP
Shares.
“Preliminary Notice of
Purchase” means a Notice of Purchase delivered by the Tender and Paying
Agent to the Liquidity Provider (or directly to the Liquidity Provider by
Beneficial Owners or their Agent Members if there is no Tender and Paying Agent
or for any reason the Tender and Paying Agent does not perform its obligations)
on the Business Day immediately preceding a Purchase Date indicating the number
of shares of VRDP Shares to be purchased on the Purchase Date pursuant to the
Purchase Obligation.
“Purchase Date,”
with respect to any purchase of shares of a Series of VRDP Shares, means (i) in
connection with an Optional Tender, the date specified in a Notice of Tender,
which date shall be no earlier than the seventh (7th) day (or, if such day is
not a Business Day, the next succeeding Business Day) following delivery to the
Tender and Paying Agent of the Notice of Tender, (ii) in connection with a
Mandatory Tender, the date specified in the Mandatory Tender Notice (or, if
such day is not a Business Day, the next succeeding Business Day), subject to
the immediately succeeding sentence below, or (iii) in connection with a
Mandatory Purchase, the Mandatory Purchase Date specified in the Mandatory
Purchase Notice (or, if such day is not a Business Day, the next succeeding
Business Day). The Purchase Date in respect of a Mandatory Tender Event shall
be not later than seven (7) days following the date a Mandatory Tender Notice
is sent to Holders by Electronic Means, provided that, (A) the Purchase
Date in connection with the failure of the Corporation to pay the applicable
fee to the Liquidity Provider may not be later than the last Business Day of
the month such payment was due; (B) the Purchase Date in connection with the
occurrence of an Extraordinary Corporate Event may not be later than the
Business Day immediately preceding the occurrence of the Extraordinary
Corporate Event (and, if no earlier Purchase Date is specified in a Mandatory
Tender Notice with respect to such Extraordinary Corporate Event, the Business
Day immediately preceding the occurrence of the Extraordinary Corporate Event shall
be deemed to be the Purchase Date irrespective of the failure to have given or
sent a Mandatory Tender Notice); (C) the Purchase Date in connection with the
Corporation obtaining an Alternate VRDP Shares Purchase Agreement may not be
later than the Business Day immediately preceding the termination of the VRDP
Shares Purchase Agreement and the effective date of such Alternate VRDP Shares
Purchase Agreement (which may not be later than the termination date of the
VRDP Shares Purchase Agreement); and (D) the Purchase Date in connection with a
Notice of Proposed Special Rate Period may not be later than the first (1st)
day of such proposed Special Rate Period.
“Purchase
Obligation” means the unconditional and irrevocable obligation of the
Liquidity Provider during the term and pursuant to the terms of the VRDP Shares
Purchase Agreement to purchase Outstanding shares of a Series of VRDP Shares on
any Purchase Date at the Purchase Price from Beneficial Owners, in the case of
any Optional Tender, and Holders, in the case of any Mandatory Tender or any
Mandatory Purchase, in each case following delivery of a Final Notice of
Purchase with respect to such VRDP Shares.
“Purchase Price”
means an amount equal to the Liquidation Preference of any shares of a Series of
VRDP Shares to be purchased on a Purchase Date, plus any accumulated but unpaid
dividends thereon (whether or not earned or declared), if any, to, but
excluding, the relevant Purchase Date.
“Purchased VRDP Shares”
means all shares of a Series of VRDP Shares purchased by the Liquidity Provider
pursuant to the VRDP Shares Purchase Agreement, so long as the Liquidity
Provider continues to be the beneficial owner for federal income tax purposes
of such VRDP Shares.
“Rate Determination Date”
means, with respect to any Series of VRDP Shares, the last day of a Rate Period
for such Series or, if such day is not a Business Day, the next succeeding
Business Day, provided, however, that the next succeeding Rate
Determination Date will be determined without regard to any prior extension of
a Rate Determination Date to a Business Day.
“Rate Period,” with
respect to shares of a Series of VRDP Shares, means the Initial Rate Period for
shares of such Series and any Subsequent Rate Period, including any Special
Rate Period for shares of such Series.
“Rate Period Days,”
for any Rate Period, means the number of days that would constitute such Rate
Period but for the application of paragraph (d) of Section 2 of Part I
of these Articles Supplementary or paragraph (b) of Section 4 of Part I
of these Articles Supplementary.
“Rating Agency”
means each of Fitch (if Fitch is then rating shares of a Series of VRDP Shares
at the request of the Corporation), Moody’s (if Moody’s is then rating shares
of a Series of VRDP Shares at the request of the Corporation), S&P (if
S&P is then rating shares of a Series of VRDP Shares at the request of the
Corporation) and any Other Rating Agency (if such Other Rating Agency is then
rating shares of a Series of VRDP Shares at the request of the Corporation).
“Rating Agency
Certificate” has the meaning specified in paragraph (b) of Section 7
of Part I of these Articles Supplementary.
“Rating Agency Eligible
Assets” means assets of the Corporation set forth in the Rating Agency
Guidelines of a Rating Agency as eligible for inclusion in calculating the
Discounted Value of the Corporation’s assets in connection with such Rating
Agency’s rating of shares of a Series of VRDP Shares at the request of the
Corporation.
“Rating Agency
Guidelines” means Moody’s Guidelines (if Moody’s is then rating shares of a
Series of VRDP Shares at the request of the Corporation), Fitch Guidelines (if
Fitch is then rating shares of a Series of VRDP Shares at the request of the
Corporation) and any Other Rating Agency Guidelines (if such Other Rating
Agency is then rating shares of a Series of VRDP Shares at the request of the
Corporation).
“Rating Agency
Provisions” means the Moody’s Provisions (if Moody’s is then rating shares
of a Series of VRDP Shares at the request of the Corporation), the Fitch
Provisions (if Fitch is then rating shares of a Series of VRDP Shares at the
request of the Corporation) and any Other Rating Agency Provisions
(if such Other Rating Agency is then rating VRDP Shares at the request of the
Corporation). The Corporation is required to comply with the Rating Agency
Provisions of a Rating Agency only if such Rating Agency is then rating shares
of a Series of VRDP Shares at the request of the Corporation.
“Redemption Date”
has the meaning specified in paragraph (c) of Section 10 of Part I
of these Articles Supplementary.
“Redemption Price”
means the applicable redemption price specified in paragraph (a) or (b) of
Section 10 of Part I of these Articles Supplementary.
“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
Corporation may from time to time appoint.
“Related Documents”
means the Charter, the Series W-7 VRDP Shares, the VRDP Shares Purchase
Agreement, the VRDP Shares Remarketing Agreement, the Fee Agreement and the
Tender and Paying Agent Agreement.
“Related Party”
means a related party for purposes of Section 267(b) or Section 707(b)
of the Code, as such provisions may be amended from time to time.
“Related Party
Termination Date” means the effective date of the termination of the VRDP
Shares Purchase Agreement in accordance with its terms following the occurrence
of a Related Party Termination Event.
“Related Party
Termination Event” means the Liquidity Provider becoming a Related Party of
the Corporation other than through the acquisition of shares of a Series of
VRDP Shares pursuant to the terms of the VRDP Shares Purchase Agreement.
“Remarketing” means
the remarketing of shares of a Series of VRDP Shares by the Remarketing Agent
on behalf of the Beneficial Owners thereof pursuant to an Optional Tender or on
behalf of the Holders thereof pursuant to a Mandatory Tender, as provided in
the VRDP Shares Remarketing Agreement and Part II of these Articles
Supplementary.
“Remarketing Agent”
means, with respect to the Series W-7 VRDP Shares, the Person or Persons
designated as Remarketing Agent for such Series of VRDP Shares, with the prior
written consent of the Liquidity Provider (which consent shall not be
unreasonably withheld), as set forth in Schedule I to the Fee Agreement, and
its or their permitted successors and assigns.
“Remarketing Notice”
has the meaning set forth in paragraph (b) of Section 2 of Part II
of these Articles Supplementary.
“Remarketing Procedures”
means the procedures for conducting Remarketings set forth in Part II of
these Articles Supplementary.
“Requisite NRSROs”
means (i) any two NRSROs that have issued a rating with respect to a security
or class of debt obligations of an issuer, or (ii) if only one NRSRO has issued
a rating with respect to such security or class of debt obligations of an
issuer at the time a purchaser Acquires (as such term is defined in Rule 2a- 7
under the 1940 Act) the security, that NRSRO.
“S&P”
means S&P Global Ratings, a Standard & Poors Financial Services LLC
business.
“Scheduled Termination
Date” means, with respect to a VRDP Shares Purchase Agreement for shares of
a Series of VRDP Shares, July 2, 2020, or any succeeding date to which the term
of such VRDP Shares Purchase Agreement is extended pursuant to the terms
thereof.
“SEC” means the
Securities and Exchange Commission.
“Securities Act”
means the U.S. Securities Act of 1933, as amended.
“Securities Depository”
means The Depository Trust Company, New York, New York, and any substitute for
or successor to such securities depository that shall maintain a book-entry
system with respect to the shares of a Series of VRDP Shares.
“SIFMA Municipal Swap
Index” means on any Rate Determination Date the Securities Industry and
Financial Markets Association Municipal Swap Index, produced and made available
by Municipal Market Data as of 3:00 p.m., New York City time, on the Rate
Determination Date.
“Special Optional Tender
Provisions” shall have the meaning specified in paragraph (g) of Section I
of Part II of these Articles Supplementary.
“Special Rate Period,”
with respect to shares of a Series of VRDP Shares, shall have the meaning
specified in paragraph (a) of Section 4 of Part I of these
Articles Supplementary.
“Special Redemption
Provisions” shall have the meaning specified in paragraph (a)(i) of Section 10
of Part I of these Articles Supplementary.
“Subsequent Rate Period,”
with respect to shares of a Series of VRDP Shares, means the period from, and
including, the first (1st) day following the Initial Rate Period of shares of
such Series to, and including, the next Rate Determination Date for shares of
such Series and any period thereafter from, and including, the first (1st) day
following a Rate Determination Date for shares of such Series to, and
including, the next succeeding Rate Determination Date for shares of such
Series; provided, however, that if any Subsequent Rate Period is
also a Special Rate Period, such term shall mean the period commencing on the
first (1st) day of such Special Rate Period and ending on, and including, the
last day of the last Dividend Period thereof; except for Special Rate Periods,
each Subsequent Rate Period will be a Minimum Rate Period.
“Substitute LIBOR Dealer”
means any LIBOR Dealer selected by the Corporation, provided that none of such
entities shall be an existing LIBOR Dealer.
“Taxable Allocation”
shall have the meaning specified in paragraph (a) of Section 3 of Part I
of these Articles Supplementary.
“Tender” means
either a Mandatory Tender or an Optional Tender, as applicable.
“Tender and Paying Agent”
means The Bank of New York Mellon, or with the prior written consent of the
Liquidity Provider (which consent shall not be unreasonably withheld) any
successor Person, which has entered into an agreement with the Corporation to
act in such capacity as the Corporation’s tender agent, transfer agent,
registrar, dividend disbursing agent, paying agent, redemption price disbursing agent and calculation agent in
connection with the payment of regularly scheduled dividends with respect to
each Series of VRDP Shares.
“Tender and Paying Agent
Agreement” means the amended and restated tender and paying agent
agreement, dated as of June 19, 2019, between the Corporation 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.
“U.S. Government
Securities” means direct obligations of the United States or of its
agencies or instrumentalities that are entitled to the full faith and credit of
the United States and that, other than United States Treasury Bills, provide
for the periodic payment of interest and the full payment of principal at
maturity or call for redemption.
“Valuation Date”
means, for purposes of determining whether the Corporation is maintaining the
VRDP Shares Basic Maintenance Amount, each Friday that is a Business Day, or
for any Friday that is not a Business Day, the immediately preceding Business
Day, and the Date of Original Issue, commencing with the Date of Original
Issue.
“Voting Period”
shall have the meaning specified in paragraph (b)(i) of Section 5 of Part I
of these Articles Supplementary.
“VRDP Shares Basic
Maintenance Amount,” as of any Valuation Date, shall have the meaning set
forth for “Basic Maintenance Amount” in the Rating Agency Guidelines.
“VRDP Shares Basic
Maintenance Cure Date,” with respect to the failure by the Corporation to
satisfy the VRDP Shares Basic Maintenance Amount (as required by paragraph (a)
of Section 7 of Part I of these Articles Supplementary) as of a given
Valuation Date, shall have the meaning set forth in the Rating Agency
Guidelines, but in no event shall it be longer than 10 Business Days following
such Valuation Date.
“VRDP Shares Basic
Maintenance Report” shall have the meaning set forth for “Basic Maintenance
Report” in the Rating Agency Guidelines.
“VRDP Shares Purchase
Agreement” means the VRDP Shares Purchase Agreement, dated as of June 19,
2019, between the Liquidity Provider and the Tender and Paying Agent, as
amended, modified or supplemented, or any Alternate VRDP Shares Purchase
Agreement.
“VRDP Shares Remarketing
Agreement” means the VRDP Shares Remarketing Agreement, dated as of June
19, 2019, between the Corporation and the Remarketing Agent, as amended,
modified or supplemented from time to time, or any similar agreement with a
successor remarketing agent.
PART I
1.
Number of Authorized Shares.
The initial number of
authorized shares constituting Series W-7 VRDP Shares is as set forth above under
the title “Designation.”
2.
Dividends.
(a)
Ranking. The shares of any Series of VRDP Shares shall rank
on a parity with each other, with shares of any other Series of VRDP Shares and
with shares of any other Series of Preferred Shares as to the payment of
dividends by the Corporation.
(b)
Cumulative Cash Dividends. The Holders of shares of any Series of VRDP Shares
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of 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 VRDP Shares shall not be entitled to any
dividend, whether payable in cash, property or shares, in excess of full
cumulative dividends, as herein provided, on VRDP Shares. No interest, or sum
of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on VRDP Shares which may be in arrears, and no additional
sum of money shall be payable in respect of such arrearage, except that the
Corporation shall pay as a supplemental dividend a Late Charge (as defined
below in paragraph (e)(i)(C) of this Section 2) on account of a
Failure to Deposit, if any, in respect of each day during the period commencing
on the day a Failure to Deposit occurs through and including the day
immediately preceding the earlier of (i) the day the Failure to Deposit is
cured and (ii) the third (3rd) Business Day next succeeding the day on which
the Failure to Deposit occurred.
(c)
Dividends Cumulative from Date
of Original Issue. Dividends on
shares of any Series of VRDP shares shall be declared daily and accumulate at
the Applicable Rate for shares of such Series from the Date of Original Issue
thereof.
(d)
Dividend Payment Dates and
Adjustment Thereof. The Dividend
Payment Date with respect to shares of a Series of VRDP Shares shall be the
first (1st) Business Day of each calendar month; provided, however,
that:
(i)
notwithstanding the foregoing, the
Corporation in its discretion may establish more frequent Dividend Payment
Dates than monthly in respect of any Minimum Rate Period, and the Dividend
Payment Date for the Dividend Period prior to the commencement of a Special
Rate Period shall be the Business Day immediately preceding the first (1st) day
of such Special Rate Period; and
(ii)
notwithstanding the foregoing, the
Corporation in its discretion may establish the Dividend Payment Dates in
respect of any Special Rate Period of shares of a Series of VRDP Shares
consisting of more than seven (7) Rate Period Days, provided, however,
that such dates shall be set forth in the Notice of Proposed Special Rate
Period and Notice of Special Rate Period relating to such Special Rate Period,
as delivered to the Remarketing Agent, which Notice of Proposed Special Rate
Period and Notice of Special Rate Period shall be filed with the
Secretary of the Corporation; and 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 shares of any Series of VRDP
Shares during the period from and after the Date of Original Issue of shares of
such Series to and including the last day of the Initial Rate Period of shares
for such Series shall be equal to the rate per annum set forth with respect to
the shares of such Series under “Designation” above. Except for Special Rate
Periods, each Subsequent Rate Period will be a Minimum Rate Period. For each
Subsequent Rate Period of shares of such Series thereafter, the dividend rate
on shares of such Series shall be equal to the rate per annum that results from
the Applicable Rate Determination for shares of such Series on the Rate
Determination Date immediately preceding such Subsequent Rate Period, provided,
however, that:
(A)
if an Applicable Rate
Determination for any such Subsequent Rate Period is not held for any reason,
the dividend rate on shares of such Series for such Subsequent Rate Period will
be adjusted to the Maximum Rate for shares of such Series on the Rate Determination
Date therefor;
(B)
in the event of a Failed
Remarketing Condition, the Applicable Rate as of the close of business on the
day the Failed Remarketing Condition first occurs will be adjusted to the
Maximum Rate (with the Applicable Spread subject to adjustment as set forth in
the definition of Applicable Spread), and the Maximum Rate will continue to be
the Applicable Rate (i) until the first (1st) day of the next succeeding
Subsequent Rate Period after a Failed Remarketing Condition no longer exists in
the case of a Minimum Rate Period or a Special Rate Period of twenty-eight (28)
Rate Period Days or fewer, and (ii) until the first (1st) day of the next
succeeding Dividend Period after a Failed Remarketing Condition no longer
exists in the case of a Special Rate Period of greater than twenty-eight (28) Rate
Period Days;
(C)
if any Failure to Deposit shall
have occurred with respect to shares of such Series during any Dividend Period
thereof, but, prior to 12:00 noon, New York City time, on the third (3rd)
Business Day next succeeding the date on which such Failure to Deposit
occurred, such Failure to Deposit shall have been cured in accordance with paragraph (f)
of this Section 2, and the Corporation shall have paid to the Tender and
Paying Agent as a late charge (“Late Charge”) daily supplemental dividends
equal in the aggregate to the sum of (1) if such Failure to Deposit consisted
of the failure to timely pay to the Tender and Paying Agent the full amount of
dividends with respect to any Dividend Period of the shares of such Series, an
amount computed by multiplying (x) the Applicable Rate for the Rate Period
during which such Failure to Deposit occurs on the Dividend Payment Date for
such Dividend Period plus 2.00% by (y) a fraction, the numerator of which shall
be the number of days for which such Failure to Deposit has not been cured in
accordance with paragraph (f) of this Section 2 (including the day
such Failure to Deposit occurs and excluding the day such
Failure
to Deposit is cured) and the denominator of which shall be 360, and applying
the rate obtained against the aggregate Liquidation Preference of the
Outstanding shares of such Series (with the amount for each individual day that
such Failure to Deposit occurs or continues uncured being declared as a
supplemental dividend on that day) and (2) if such Failure to Deposit consisted
of the failure to timely pay to the Tender and Paying Agent the Redemption
Price of the shares, if any, of such Series for which Notice of Redemption has
been provided by the Corporation pursuant to paragraph (c) of Section 10
of Part I of these Articles Supplementary, an amount computed by
multiplying, (x) for the Rate Period during which such Failure to Deposit
occurs on the Redemption Date, the Applicable Rate plus 2.00% by (y) a
fraction, the numerator of which shall be the number of days for which such
Failure to Deposit is not cured in accordance with paragraph (f) of this Section 2
(including the day such Failure to Deposit occurs and excluding the day such
Failure to Deposit is cured) and the denominator of which shall be 360, and
applying the rate obtained against the aggregate Liquidation Preference of the
Outstanding shares of such Series to be redeemed (with the amount for each
individual day that such Failure to Deposit occurs or continues uncured being
declared as a supplemental dividend on that day), and if a Rate Determination
Date occurs on the date on which such Failure to Deposit occurred or on either
of the two (2) Business Days succeeding that date, and the Failure to Deposit
has not been cured on such Rate Determination Date in accordance with paragraph (f)
of this Section 2, no Applicable Rate Determination will be held in
respect of shares of such Series for the Subsequent Rate Period relating to
such Rate Determination Date and the dividend rate for shares of such Series
for such Subsequent Rate Period will be the Maximum Rate for shares of such
Series on the Rate Determination Date for such Subsequent Rate Period; or
(D)
if any Failure to Deposit shall
have occurred with respect to shares of such Series during any Dividend Period
thereof, and, prior to 12:00 noon, New York City time, on the third (3rd)
Business Day next succeeding the date on which such Failure to Deposit
occurred, such Failure to Deposit shall not have been cured in accordance with paragraph (f)
of this Section 2 or the Corporation shall not have paid the applicable
Late Charge to the Tender and Paying Agent, no Applicable Rate Determination
will occur in respect of shares of such Series for the first Subsequent Rate
Period thereof thereafter (or for any Subsequent Rate Period thereof thereafter
to and including the Subsequent Rate Period during which(1) such Failure to
Deposit is cured in accordance with paragraph (f) of this Section 2
and (2) the Corporation pays the applicable Late Charge to the Tender and
Paying Agent, in each case no later than 12:00 noon, New York City time, on the
fourth (4th) Business Day prior to the end of such Subsequent Rate Period), and
the dividend rate for shares of such Series for each such Subsequent Rate
Period shall be a rate per annum equal to the Maximum Rate for shares of such
Series on the Rate Determination Date for such Subsequent Rate Period (but with
the prevailing rating for shares of such Series, for purposes of determining
such Maximum Rate, being deemed to be “below ‘BBB-”‘).
Each dividend rate
determined in accordance with this paragraph (e)(i) of Section 2 of Part I
of these Articles Supplementary shall be an “Applicable Rate.”
(ii)
Calculation of Dividends. The
amount of dividends per share payable on shares of a Series of VRDP Shares on
any Dividend Payment Date shall equal the sum of the dividends accumulated but
not yet paid for each Rate Period (or part thereof) in the related Dividend
Period or Dividend Periods. The amount of dividends accumulated for each such Rate
Period (or part thereof) shall be computed by multiplying the Applicable Rate
in effect for shares of such Series for such Rate Period (or part thereof) by a
fraction, the numerator of which shall be the number of days in such Rate
Period (or part thereof) and the denominator of which shall be the actual
number of days in the year (365 or 366), and multiplying such product by
$100,000.
(f)
Curing a Failure to Deposit. A Failure to Deposit with respect to shares of a
Series of VRDP Shares shall have been cured (if such Failure to Deposit is not
solely due to the willful failure of the Corporation to make the required
payment to the Tender and Paying Agent) with respect to any Dividend Period of
shares of such Series if, within the respective time periods described in paragraph (e)(i)
of this Section 2, the Corporation shall have paid to the Tender and
Paying Agent (A) all accumulated but unpaid dividends on shares of such Series
and (B) without duplication, the Redemption Price for shares, if any, of such
Series for which Notice of Redemption has been provided by the Corporation
pursuant to paragraph (c) of Section 10 of Part I of these
Articles Supplementary; provided, however, that the foregoing
clause (B) shall not apply to the Corporation’s failure to pay the Redemption
Price in respect of shares of a Series of VRDP Shares when the related Notice
of Redemption provides that redemption of such shares is subject to one or more
conditions precedent and any such condition precedent shall not have been
satisfied at the time or times and in the manner specified in such Notice of Redemption.
(g)
Dividend Payments by
Corporation to Tender and Paying Agent. In connection with each Dividend Payment Date for shares of a Series
of VRDP Shares, the Corporation shall pay to the Tender and Paying Agent, not
later than 12:00 noon, New York City time, on the earlier of (A) the third
(3rd) Business Day next succeeding the Rate Determination Date immediately
preceding the Dividend Payment Date for such Series and (B) the Business Day
immediately preceding the Dividend Payment Date for such Series (or as
otherwise provided for and in connection with designation of a Special Rate
Period), an aggregate amount of Deposit Securities equal to the dividends to be
paid to all Holders of shares of such Series on such Dividend Payment Date as
determined in accordance with Section 2(e)(ii) of Part I of these
Articles Supplementary, or as otherwise provided for and in connection with
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 Corporation.
All Deposit Securities paid to the Tender and Paying Agent for the payment of
dividends (or for the payment of any Late Charge) shall be held in trust for
the payment of such dividends (and any such Late Charge) by the Tender and
Paying Agent for the benefit of the Holders specified in paragraph (i) of
this Section 2. The Tender and Paying Agent shall notify the Corporation
by Electronic Means of the amount of any funds deposited with the Tender and
Paying Agent by the Corporation for any reason under the Tender and Paying
Agent Agreement, including for the payment of dividends or the redemption of
shares of a Series of VRDP Shares (or any Late Charge), that remain with the
Tender and Paying Agent after ninety (90) days from the date of such deposit
and such amount shall, to the extent permitted by law, be repaid to the
Corporation by the Tender and Paying Agent upon request by Electronic Means of
the Corporation.
(i)
Dividends Paid to Holders. Each dividend on shares of a Series of VRDP Shares
shall be declared daily to the Holders thereof at the close of business on each
such day and paid on each Dividend Payment Date to the Holders thereof at the
close of business on the day immediately preceding such Dividend Payment Date.
In connection with any transfer of shares of a Series of VRDP Shares, the
transferor as Beneficial Owner of such shares shall be deemed to have agreed
pursuant to the terms of such Series of VRDP Shares to transfer to the
transferee the right to receive from the Corporation any dividends declared and
unpaid for each day prior to the transferee becoming the Beneficial Owner of
such VRDP Shares in exchange for payment of the Purchase Price for such VRDP
Shares by the transferee.
(j)
Dividends Credited Against
Earliest Accumulated But Unpaid Dividends. Any dividend payment made on shares of a Series of VRDP Shares that
is insufficient to cover the entire amount of dividends payable shall first be
credited against the earliest accumulated but unpaid dividends due with respect
to such shares of such Series. Dividends in arrears for any past Dividend
Period may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to the Holders as their names appear on the record books
of the Corporation on such date, not exceeding fifteen (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 shares of a Series of VRDP Shares shall be designated as
exempt-interest dividends up to the amount of the Net Tax-Exempt Income of the
Corporation, to the extent permitted by, and for purposes of, Section 852
of the Code.
3.
Gross-Up Payments. Holders of shares of a Series of
VRDP Shares shall be entitled to receive, when, as and if declared by the Board
of Directors, out of funds legally available therefor, dividends in an amount
equal to the aggregate Gross-up Payments as follows:
(a)
If the Corporation allocates any
net capital gains or ordinary income taxable for regular federal income tax
purposes to a dividend paid on shares of a Series of VRDP Shares without either
having given advance notice thereof to the Remarketing Agent or simultaneously
increasing such dividend payment by an additional amount, both as provided in Section 6
of Part II of these Articles Supplementary (such allocation being referred
to herein as a “Taxable Allocation”), the Corporation shall, prior to the end
of the calendar year in which such dividend was paid, provide notice thereof to
the Remarketing Agent and direct the Tender and Paying Agent to send such
notice with a Gross-up Payment to the Holder that was entitled to such dividend
payment during such calendar year at such Holder’s address as the same appears
or last appeared on the record books of the Corporation.
(b)
The Corporation shall not be
required to make Gross-up Payments with respect to any net capital gains or
ordinary income determined by the Internal Revenue Service to be allocable in a
manner different from the manner used by the Corporation.
4.
Designation of Special Rate
Periods.
(a)
Length of and Preconditions for
Special Rate Period. The
Corporation, at its option, with the prior written consent of the Liquidity
Provider, may designate any succeeding Subsequent Rate Period of a Series of
VRDP Shares as a Special Rate Period (a “Special Rate Period”) consisting of a
specified number of Rate Period Days evenly divisible by seven (7) and
initially not more than 1,820, subject to adjustment or extension as provided
in paragraph (b) of this Section 4. A designation of a Special Rate
Period shall be effective only with the prior written consent of the Liquidity
Provider and if (A) it is permitted by applicable law and the Charter, (B)
notice thereof shall have been given in accordance with paragraph (c) and paragraph (d)(i)
of this Section 4, (C) no shares of such Series of VRDP Shares are owned
by the Liquidity Provider pursuant to the Purchase Obligation on either the
Rate Determination Date for such proposed Special Rate Period or on the first
(1st) day of such Special Rate Period and full
cumulative
dividends and any amounts due with respect to redemptions payable prior to such
date have been paid in full, and (D) if any Notice of Redemption shall have
been provided by the Corporation pursuant to paragraph (c) of Section 10
of Part I of these Articles Supplementary with respect to any shares of
such Series of VRDP Shares, the Redemption Price with respect to such VRDP
Shares shall have been deposited with the Tender and Paying Agent. In the event
the Corporation wishes to designate any succeeding Subsequent Rate Period for
shares of a Series of VRDP Shares as a Special Rate Period consisting of more
than twenty-eight (28) Rate Period Days, the Corporation shall notify Moody’s
(if Moody’s is then rating shares of such Series of VRDP Shares at the request
of the Corporation), Fitch (if Fitch is then rating shares of such Series of
VRDP Shares at the request of the Corporation) and each Other Rating Agency (if
any Other Rating Agency is then rating shares of such Series of VRDP Shares at
the request of the Corporation) in advance of the commencement of such
Subsequent Rate Period that the Corporation wishes to designate such Subsequent
Rate Period as a Special Rate Period and shall provide Moody’s (if Moody’s is
then rating shares of such Series of VRDP Shares at the request of the
Corporation), Fitch (if Fitch is then rating shares of such Series of VRDP
Shares at the request of the Corporation) and each Other Rating Agency (if any
Other Rating Agency is then rating shares of such Series of VRDP Shares at the
request of the Corporation) with such documents as they may request.
(b)
Adjustment of Length of Special
Rate Period. In the event the
Corporation wishes to designate a Subsequent Rate Period as a Special Rate
Period, but the day that would otherwise be the last day of such Special Rate
Period is not a Wednesday that is a Business Day in the case of a Series of
VRDP Shares designated as “Series W-7 Variable Rate Demand Preferred Shares”,
then the Special Rate Period shall end on the next Business Day and the
succeeding Subsequent Rate Period will end on the following Wednesday or, if
the succeeding Subsequent Rate Period is a Special Rate Period, it shall end on
a Wednesday as designated by the Corporation, subject in each case to the
foregoing Business Day requirement. A
Special Rate Period designated in accordance with this Section 4 may be
extended to the extent permitted under and in accordance with the terms of the
Notice of Special Rate Period with respect to such Special Rate Period.
(c)
Notice of Proposed Special Rate
Period. If the Corporation
proposes to designate any succeeding Subsequent Rate Period for shares of a
Series of VRDP Shares as a Special Rate Period pursuant to paragraph (a)
of this Section 4, not less than twenty (20) (or such lesser number of
days as may be agreed to from time to time by the Remarketing Agent) nor more
than thirty (30) days prior to the date the Corporation proposes to designate
as the first (1st) day of such Special Rate Period (which shall be such day
that would otherwise be the first (1st) day of a Minimum Rate Period), notice (“Notice
of Proposed Special Rate Period”) shall be sent by the Corporation by first
class mail, postage prepaid or by Electronic Means, to the Holders of shares of
such Series with copies provided to the Tender and Paying Agent, the Liquidity
Provider and the Remarketing Agent. Each such notice shall state (A) that the
Corporation may exercise its option to designate a succeeding Subsequent Rate
Period of shares of such Series as a Special Rate Period, specifying the first
(1st) day thereof, (B) that the Corporation will, by 11:00 a.m., New York City
time, on the second Business Day immediately preceding such date (or by such
later time or date, or both, as may be agreed to by the Remarketing Agent)
notify the Remarketing Agent of either (x) its determination, subject to
certain conditions, to exercise such option, or (y) its determination not to
exercise such option, (C) the Rate Determination Date immediately prior to the
first (1st) day of such Special Rate Period, (D) that such Special Rate Period
shall not commence if(1) any shares of such Series of VRDP shares are owned by
the Liquidity Provider pursuant to the Purchase Obligation on either the Rate
Determination Date for such proposed Special Rate Period or on the first (1st)
day of such Special Rate Period, or (2) full cumulative dividends or any
amounts due with respect to redemptions payable prior to such Rate
Determination Date have not been paid in full, (E) the scheduled Dividend
Payment Dates for shares of such Series during such Special Rate Period, (F)
the Special Redemption Provisions, if any, applicable to shares of such Series
in respect of such Special Rate Period
and (G) the
Special Optional Tender 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 (1st) day of any proposed
Special Rate Period of shares of a Series of VRDP Shares as to which notice has
been given as set forth in paragraph (c) of this Section 4 (or such
later time or date, or both, as may be agreed to by the Remarketing Agent), the
Corporation shall deliver to the Remarketing Agent and the Liquidity Provider
either:
(i)
a notice (“Notice of Special Rate
Period”) stating (A) that the Corporation has determined to designate the next
succeeding Rate Period of such Series of VRDP Shares as a Special Rate Period,
specifying the same and the first (1st) day thereof, (B) the Rate Determination
Date immediately prior to the first (1st) day of such Special Rate Period, (C)
the rate calculation period to be used in determining the Applicable Rate if
the term thereof is different from the term of the Special Rate Period and any
other special provisions relating to the calculation of the Applicable Rate,
including any provision for setting the Applicable Rate by reference to any
index or to the ratings of the VRDP Shares or specifying any additional events
or conditions the existence or occurrence of which result in adjustments to the
Applicable Rate or additional fees or payments in respect of shares of such
Series of VRDP Shares (which provisions may vary provisions that are set forth
in the Charter (including the Articles Supplementary), provided that the
provisions and variations are clearly and expressly set forth in the Notice of
Special Rate Period), (D) that such Special Rate Period shall not commence if
(1) any shares of such Series of VRDP Shares are owned by the Liquidity
Provider pursuant to the Purchase Obligation on either such Rate Determination
Date or on the first (1st) day of such Special Rate Period, or (2) full
cumulative dividends or any amounts due with respect to redemptions payable
prior to such Rate Determination Date have not been paid in full, (E) the scheduled
Dividend Payment Dates for shares of such Series of VRDP Shares during such
Special Rate Period, (F) the Special Redemption Provisions, if any, applicable
to shares of such Series of VRDP Shares in respect of such Special Rate Period,
(G) the Special Optional Tender Provisions, if any, applicable to shares of
such Series of VRDP Shares in respect of such Special Rate Period (including
whether the Optional Tender provisions shall be applicable or otherwise subject
to special conditions during the Special Rate Period), (H) the special
provisions, if any, relating to the transfer of the shares of such Series of
VRDP Shares during the Special Rate Period, (I) the special provisions, if any,
related to Taxable Allocations during the Special Rate Period and any resulting
Gross-up Payments during the Special Rate Period including, but not limited to,
that Section 3 of Part I and Section 6 of Part II of these Articles
Supplementary shall have no effect during the Special Rate Period and that,
instead, alternative special provisions shall be observed during such period;
(J) the special provisions, if any, relating to the creation and termination of
the Special Rate Period including, but not limited to, any provisions relating
to the nature and scope of the obligations and rights of the Liquidity Provider
and the Remarketing Agent in connection therewith, the short-term credit
ratings of the Liquidity Provider and the short-term preferred stock ratings of
the VRDP Shares, the Remarketing of the VRDP Shares upon the termination of the
Special Rate Period, the applicability of the redemption and certain other
related provisions of the Articles Supplementary with respect to shares of such
Series of VRDP Shares held by the Liquidity Provider (whether or not in its capacity
as such) during the Special Rate Period and any rights of the Corporation to
request Holders of such Series of VRDP Shares to agree to an extension of the
Special Rate Period prior to the termination thereof and (K) the special
provisions, if any, relating to Mandatory Tender
Events and Mandatory Tenders with respect to shares of such Series of VRDP
Shares during the Special Rate Period (including whether Mandatory Tender
Events and Mandatory Tenders shall be applicable during the Special Rate Period),
such notice to be accompanied by a VRDP Shares Basic Maintenance Report showing
that, as of the third (3rd) Business Day immediately preceding such proposed
Special Rate Period, Moody’s Eligible Assets (if Moody’s is then rating such
VRDP Shares at the request of the Corporation), Fitch Eligible Assets (if Fitch
is then rating such VRDP Shares at the request of the Corporation) and Other
Rating Agency Eligible Assets (if any Other Rating Agency is then rating such
VRDP Shares at the request of the Corporation) each have an aggregate
Discounted Value at least equal to the VRDP Shares Basic Maintenance Amount as
of such Business Day (assuming for purposes of the foregoing calculation that
(a) the Maximum Rate is the Maximum Rate on such Business Day as if such
Business Day were the Rate Determination Date for the proposed Special Rate
Period, and (b) the Moody’s Discount Factors applicable to Moody’s Eligible
Assets are determined by reference to the first Exposure Period (as defined in
the Moody’s Guidelines) longer than the Exposure Period then applicable to the
Corporation, as described in the Moody’s Guidelines); or
(ii)
a notice stating that
the Corporation has determined not to exercise its option to designate a
Special Rate Period of shares of such Series and that the next succeeding Rate
Period of shares of such Series shall be a Minimum Rate Period.
For the avoidance of
doubt, none of the special provisions set forth in a Notice of Special Rate
Period provided in accordance with subparagraph (i) above shall be deemed to be
amendments, alterations or the repeal of the provisions of these Articles
Supplementary requiring a vote of the Holders of Shares pursuant to Section 5 hereof.
(e)
Failure to Deliver
Notice of Special Rate Period. If the Corporation fails to deliver either of the notices
described in paragraphs (d)(i) or (d)(ii) of this Section 4 (and, in the case
of the notice described in paragraph (d)(i) of this Section 4, a VRDP Shares
Basic Maintenance Report to the effect set forth in such paragraph (but only if
Moody's, Fitch or an Other Rating Agency is then rating the Series in question
pursuant to the request of the Corporation)) with respect to any designation of
any proposed Special Rate Period to the Remarketing Agent and the Liquidity
Provider by 11:00 a.m., New York City time, on the second Business Day
immediately preceding the first (1st) day of such proposed Special Rate Period
(or by such later time or date, or both, as may be agreed to by the Remarketing
Agent and the Liquidity Provider), the Corporation shall be deemed to have
delivered a notice to the Remarketing Agent and the Liquidity Provider with
respect to such Special Rate Period to the effect set forth in paragraph
(d)(ii) of this Section 4. In the event the Corporation delivers to the
Remarketing Agent and the Liquidity Provider a notice described in paragraph
(d)(i) of this Section 4, it shall file a copy of such notice with the
Secretary of the Corporation, and the contents of such notice shall be binding
on the Corporation and the Holders and Beneficial Owners of the shares of such
Series of VRDP Shares. In the event the Corporation delivers to the Remarketing
Agent and the Liquidity Provider a notice described in paragraph (d)(ii) of
this Section 4, the Corporation will provide Moody's (if Moody's is then rating
the VRDP Shares in question pursuant to the request of the Corporation) and
Fitch (if Fitch is then rating the VRDP Shares in question pursuant to the
request of the Corporation) and each Other Rating Agency (if any Other Rating
Agency is then rating the VRDP Shares in question pursuant to the request of
the Corporation) a copy of such notice.
(f)
Termination Date. Notwithstanding the foregoing, no Special Rate Period shall end
later than the fifteenth (15th) day prior to the Scheduled
Termination Date at which point the Rate Periods shall revert to Minimum Rate
Periods.
(g)
Notice to Holders. In the event the Corporation delivers to
the Remarketing Agent and the Liquidity Provider a Notice of Special Rate
Period, it shall deliver, concurrently with the delivery thereof to the
Remarketing Agent and the Liquidity Provider, such Notice of Special Rate
Period to the Holders of the shares of the Series of VRDP Shares subject to the
Special Rate Period. During the term of the Special Rate Period, the
Corporation shall provide a copy of the Notice of Special Rate Period to (i)
any Holder or Beneficial Owner of the shares of such Series of VRDP Shares upon
request and (ii) any Holder or Beneficial Owner that is a transferee in any
transfer of the shares of such Series of VRDP Shares during the Special Rate
Period promptly after receiving the notice described below, provided the
Corporation has been notified of any such transfer and has been provided with
the contact information of such Holder or Beneficial Owner, as applicable.
(h)
Ambiguities. In the event of any conflict between the
terms of the Notice of Special Rate Period and the terms of these Articles
Supplementary, the terms of the Notice of Special Rate Period shall govern.
(i)
Amendments. A Notice of
Special Rate Period may be amended at any time during the term of the Special
Rate Period to which it relates by not less than 30 days’ notice to the
Holders, the Liquidity Provider and the Remarketing Agent, provided that
any amendment that adversely affects the rights of the Holders during such
Special Rate Period shall require the consent of the Holders of at least a
majority of the VRDP Shares Outstanding at the time. For purposes of the
foregoing, except as otherwise set forth in a Notice of Special Rate Period, no
matter shall be deemed to adversely affect any right, preference or power of
the VRDP Shares or the Holders thereof unless such matter (i) alters or
abolishes the terms of any preferential rights of such Shares, (ii) creates, alters
or abolishes the terms of any right in respect of redemption of such Shares, or
(iii) creates or alters (other than to abolish or to comply with applicable
law) the terms of any restriction on transfer applicable to such Shares, and provided
further that the notice provisions or this paragraph may be waived by
Holders, the Liquidity Provider and/or the Remarketing Agent.
5.
Voting Rights.
(a)
One Vote Per VRDP Share. Except as otherwise provided in the Charter or as
otherwise required by law, (i) each Holder of shares of a Series of VRDP Shares
shall be entitled to one vote for each such share held by such Holder on each
matter submitted to a vote of stockholders of the Corporation, and (ii) the
holders of outstanding Preferred Shares, including each share of a Series of
VRDP Shares, and of Common Shares shall vote together as a single class; provided,
however, that the holders of outstanding Preferred Shares, including
VRDP Shares, voting together as a class, to the exclusion of the holders of all
other securities and classes of stock of the Corporation, shall be entitled to
elect two directors of the Corporation at all times, each Preferred Share,
including each share of a Series of VRDP Shares, entitling the holder thereof
to one vote. Subject to paragraph (b) of this Section 5, the holders
of outstanding Common Shares and Preferred Shares, including VRDP Shares, voting
together as a single class, shall elect the balance of the directors.
(b)
Voting for Additional Directors.
(i)
Voting Period. During any period in which any one or more of the
conditions described in subparagraphs (A) or (B) of this paragraph (b)(i)
shall exist (such period being referred to herein as a “Voting Period”), the
number of directors constituting the Board of Directors shall be automatically
increased by the smallest number that, when added to the two directors elected
exclusively by the holders of Preferred Shares, including the VRDP Shares,
would constitute a majority of the Board of Directors as so increased by such
smallest number; and
the holders of Preferred Shares,
including the VRDP Shares, shall be entitled, voting together as a single class
on a one-vote-per-share basis (to the exclusion of the holders of all other
securities and classes of stock of the Corporation), to elect such smallest
number of additional directors, together with the two directors that such
holders are in any event entitled to elect. A Voting Period shall commence:
(A)
if at the close of business on any
Dividend Payment Date accumulated dividends (whether or not earned or declared)
on any outstanding Preferred Shares, including the VRDP Shares, equal to at
least two (2) full years’ dividends shall be due and unpaid and sufficient cash
or specified securities shall not have been deposited with the Tender and
Paying Agent for the payment of such accumulated dividends; or
(B)
if at any time holders of
Preferred Shares are entitled under the 1940 Act to elect a majority of the
directors of the Corporation.
Upon the termination of a
Voting Period, the voting rights described in this paragraph (b)(i) shall
cease, subject always, however, to the revesting of such voting rights in the
holders of Preferred Shares upon the further occurrence of any of the events described
in this paragraph (b)(i).
(ii)
Notice of Special Meeting. As soon as reasonably practicable after the accrual
of any right of the holders of Preferred Shares to elect additional directors
as described in paragraph (b)(i) of this Section 5, the Corporation
may call a special meeting of such holders, such call to be made by notice as
provided in the bylaws of the Corporation, such meeting to be held not less
than ten (10) nor more than sixty (60) days after the date of mailing of such
notice. If a special meeting is not called by the Corporation, it may be called
by any such holder on like notice. The record date for determining the holders
entitled to notice of and to vote at such special meeting shall be not more
than sixty (60) nor less than ten (10) days prior to the date of such special
meeting. At any such special meeting and at each meeting of holders of
Preferred Shares held during a Voting Period at which directors are to be
elected, such holders, voting together as a class (to the exclusion of the holders
of all other securities and classes of stock of the Corporation), shall be
entitled to elect the number of directors prescribed in paragraph (b)(i)
of this Section 5 on a one-vote-per-share basis.
(iii)
Terms of Office of Existing
Directors. The terms of office of all
persons who are directors of the Corporation at the time of a special meeting
of Holders and holders of other Preferred Shares to elect directors shall
continue, notwithstanding the election at such meeting by the Holders and such
other holders of other Preferred Shares of the number of directors that they
are entitled to elect, and the persons so elected by the Holders and such other
holders of other Preferred Shares, together with the two incumbent directors
elected by the Holders and such other holders of other Preferred Shares and the
remaining incumbent directors elected by the holders of the Common Shares and
Preferred Shares, shall constitute the duly elected directors of the
Corporation.
(iv)
Terms of Office of Certain
Directors to Terminate Upon Termination of Voting Period. Simultaneously with the termination of a Voting
Period, the terms of office of the additional directors elected by the Holders
and holders of other Preferred Shares pursuant to paragraph (b)(i) of this
Section 5 shall terminate, the
remaining
directors shall constitute the directors of the Corporation and the voting
rights of the Holders and such other holders to elect additional directors
pursuant to paragraph (b)(i) of this Section 5 shall cease, subject
to the provisions of the last sentence of paragraph (b)(i) of this Section 5.
(c)
Holders of VRDP Shares to Vote
on Certain Other Matters.
(i)
Increases in Capitalization and
Certain Amendments. So long as shares
of any Series of VRDP Shares are Outstanding, the Corporation shall not,
without the affirmative vote or consent of the Holders of at least a majority
of the VRDP Shares Outstanding at the time, in person or by proxy, either in
writing or at a meeting, voting as a separate class, (a) authorize, create or
issue any class or series of shares ranking prior to or on a parity with the
VRDP Shares with respect to the payment of dividends or the distribution of
assets upon dissolution, liquidation or winding up of the affairs of the
Corporation, or authorize, create or issue additional shares of any Series of
VRDP Shares (except that, notwithstanding the foregoing, but subject to certain
Rating Agency approvals, the Board of Directors, without the vote or consent of
the Holders, may with the prior written consent of the Liquidity Provider from
time to time authorize and create, and the Corporation may from time to time
issue additional shares of, any Series of VRDP Shares or classes or series of Preferred
Shares ranking on a parity with the VRDP Shares with respect to the payment of
dividends and the distribution of assets upon dissolution, liquidation or
winding up of the affairs of the Corporation), or (b) amend, alter or repeal
the provisions of the Charter, including these Articles Supplementary, whether
by merger, consolidation or otherwise, so as to adversely affect any
preference, right or power of such VRDP Shares or the Holders thereof set forth
in the Charter, including these Articles Supplementary, provided, however,
that (i) none of the actions permitted by the exception to clause (a) above
will be deemed to affect such preferences, rights or powers, (ii) a division of
a VRDP Share will be deemed to affect such preferences, rights or powers only
if the terms of such division adversely affect the Holders of the VRDP Shares
and (iii) the authorization, creation and issuance of classes or series of
shares ranking junior to VRDP Shares with respect to the payment of dividends
and the distribution of assets upon dissolution, liquidation or winding up of
the affairs of the Corporation will be deemed to affect such preferences,
rights or powers only if such issuance would, at the time thereof, cause the
Corporation not to satisfy the Minimum VRDP Shares Asset Coverage or, if Moody’s,
Fitch or any Other Rating Agency is then rating shares of a Series of VRDP
Shares at the request of the Corporation, the VRDP Shares Basic Maintenance
Amount. For purposes of the foregoing, except as otherwise set forth in these
Articles Supplementary, no matter shall be deemed to adversely affect any
right, preference or power of a Series of VRDP Shares or the Holders thereof
unless such matter (i) alters or abolishes the terms of any preferential rights
of such Series, (ii) creates, alters or abolishes the terms of any right in
respect of redemption of such Series, or (iii) creates or alters (other than to
abolish or to comply with applicable law) the terms of any restriction on
transfer applicable to such Series. So long as any shares of any Series of VRDP
Shares are Outstanding, the Corporation will not, without the affirmative vote
or consent of the Holders of at least 662/3%
of the VRDP Shares Outstanding at the
time, in person or by proxy, either in writing or at a meeting, voting as a
separate class, file a voluntary application for relief under federal
bankruptcy law or any similar
application under state
law for so long as the Corporation is solvent and does not foresee becoming insolvent.
If any action set forth above would adversely affect the rights of one or more
Series (the “Affected Series”) of VRDP Shares in a manner different from any
other Series of VRDP Shares, the Corporation will not approve any such action
without the affirmative vote or consent of the Holders of at least a majority
of the shares of each such Affected Series Outstanding at the time, in person
or by proxy, either in writing or at a meeting (each such Affected Series
voting as a separate class).
(ii)
1940 Act Matters. Unless a higher percentage is provided for in the
Charter, (A) the affirmative vote of the holders of at least a “majority of the
outstanding Preferred Shares,” including VRDP Shares Outstanding at the time,
voting as a separate class, shall be required to approve any conversion of the
Corporation from a closed-end to an open-end investment company and (B) the affirmative
vote of the holders of a “majority of the outstanding Preferred Shares,”
including VRDP Shares Outstanding at the time, voting as a separate class,
shall be required to approve any plan of reorganization (as such term is used in
the 1940 Act) adversely affecting such shares. The affirmative vote of the
holders of a “majority of the outstanding Preferred Shares,” including VRDP
Shares Outstanding at the time, voting as a separate class, shall be required
to approve any action not described in the first sentence of this Section 5(c)(ii)
requiring a vote of security holders of the Corporation under Section 13(a)
of the 1940 Act. For purposes of the foregoing, “majority of the outstanding
Preferred Shares” means (i) 67% or more of such shares present at a meeting, if
the Holders of more than 50% of such shares are present or represented by
proxy, or (ii) more than 50% of such shares, whichever is less. In the event a
vote of Holders of VRDP Shares is required pursuant to the provisions of Section 13(a)
of the 1940 Act, the Corporation shall, not later than ten (10) Business Days
prior to the date on which such vote is to be taken, notify Moody’s (if Moody’s
is then rating the VRDP Shares at the request of the Corporation), Fitch (if
Fitch is then rating the VRDP Shares at the request of the Corporation) and
each Other Rating Agency (if any Other Rating Agency is then rating the VRDP
Shares at the request of the Corporation) that such vote is to be taken and the
nature of the action with respect to which such vote is to be taken.
(iii)
Exclusive Right to Vote on
Certain Charter Amendments.
Notwithstanding the foregoing, and except as otherwise required by the 1940
Act, (i) Holders of Outstanding shares of a Series of VRDP Shares will be
entitled as a Series, to the exclusion of the holders of all other securities,
including other Preferred Shares, Common Shares and other classes of capital
stock of the Corporation, to vote on matters affecting shares of such Series of
VRDP Shares that do not adversely affect any of the rights of holders of such
other securities, including other Preferred Shares, Common Shares and other
classes of capital stock, as expressly set forth in the Charter, and (ii)
Holders of Outstanding shares of a Series of VRDP Shares will not be entitled
to vote on matters affecting any other Preferred Shares that do not adversely
affect any of the rights of Holders of such Series of VRDP Shares, as expressly
set forth in the Charter.
(d)
Board of Directors May Take
Certain Actions Without Stockholder Approval. The Corporation is not required to maintain any
particular preferred stock ratings for a Series of VRDP Shares and the Board of
Directors may, subject to this Section 5(d), at any time, terminate the
services of a
Rating Agency then providing a rating
for such Series with or without replacement, in either case, without the
approval of Holders of shares of such Series of VRDP Shares or other
stockholders of the Corporation. The Corporation is required to comply with the
Rating Agency Provisions of a Rating Agency only if such Rating Agency is then
rating a Series of VRDP Shares at the request of the Corporation.
(i)
Notwithstanding anything herein to
the contrary (including without limitation clause (ii) below), the Board of
Directors, without the approval of Holders of shares of any Series of VRDP
Shares or other stockholders of the Corporation, may terminate the services of
any Rating Agency then providing a rating for a Series of VRDP Shares and
replace it with another Rating Agency, provided that the Corporation
provides seven (7) days’ notice by Electronic Means to Holders prior to
terminating the services of a Rating Agency and replacing it with another
Rating Agency. In the event a Rating Agency ceases to furnish a preferred stock
rating or the Corporation terminates a Rating Agency with replacement in
accordance with this clause (i), the Corporation shall no longer be required to
comply with the Rating Agency Provisions of the Rating Agency so terminated
and, as applicable, the Corporation shall be required to thereafter comply with
the Rating Agency Provisions of each Rating Agency then providing a rating for
a Series of VRDP Shares at the request of the Corporation.
(ii)
(A) Notwithstanding anything herein to the contrary (including without
limitation clause (i) above), the Board of Directors, without the approval of
Holders of shares of any Series of VRDP Shares or other stockholders of the
Corporation, may terminate the services of any Rating Agency then providing a
rating for a Series of VRDP Shares without replacement, provided that (I)
the Corporation has given the Remarketing Agent, the Tender and Paying Agent, and
the Liquidity Provider, and Moody’s, Fitch and each Other Rating Agency, as
applicable, and Holders of shares of such Series of VRDP Shares at least
forty-five (45) calendar days’ advance written notice of such termination of
services, (II) the Corporation is in compliance with the Moody’s Provisions,
the Fitch Provisions and the Other Rating Agency Provisions, as the case may
be, at the time the notice required in clause (I) hereof is given and at the
time of the termination of services, and (III) shares of such Series of VRDP
Shares continue to be rated by at least one NRSRO at and after the time of the
termination of services.
(B)
On the date that the notice is
given as described in the preceding clause (A) and on the date that the
services of Moody’s, Fitch or any Other Rating Agency, as applicable, are
terminated, the Corporation shall provide the Tender and Paying Agent and Moody’s,
Fitch and each Other Rating Agency, as applicable, with an officers’
certificate as to the compliance with the provisions of the preceding clause
(A), and, on such later date and thereafter, the Corporation shall no longer be
required to comply with the Rating Agency Provisions of the Rating Agency whose
services were terminated.
(iii)
Notwithstanding anything herein to
the contrary, but subject to this Section 5(d), the Rating Agency
Guidelines, as they may be amended from time to time by the respective Rating
Agency, will be reflected in a written document and may be amended by the
respective Rating Agency without the vote, consent or approval of the
Corporation, the Board of Directors or any holder of Preferred Shares,
including any Series of VRDP Shares, or any other
stockholder of the Corporation. The Board of Directors, without the vote or
consent of any holder of Preferred Shares, including any Series of VRDP Shares,
or any other stockholder of the Corporation, may from time to time take such
actions as may be reasonably required in connection with obtaining, maintaining
or changing the rating of any Rating Agency that is then rating shares of a
Series of VRDP Shares at the request of the Corporation, and any such action
will not be deemed to affect the preferences, rights or powers of Preferred
Shares, including VRDP Shares, or the Holders thereof, provided that the
Board of Directors receives written confirmation from such Rating Agency, as
applicable, then rating such shares of a Series of VRDP Shares at the request
of the Corporation (with such confirmation in no event being required to be
obtained from a particular Rating Agency with respect to definitions or other
provisions relevant only to and adopted in connection with another Rating
Agency’s rating of any Series of VRDP Shares) that any such action would not
adversely affect the rating then assigned by such Rating Agency.
(iv)
Notwithstanding the foregoing,
nothing in this Section 5 is intended in any way to limit the ability of
(A) the Corporation to make certain adjustments in the VRDP Shares Remarketing
Agreement as provided under the definition of “Maximum Rate,” subject to the
limitations set forth in such definition, or (B) the Board of Directors to,
subject to applicable law, amend or alter any provisions of these Articles
Supplementary, without the vote or consent of any holder of Preferred Shares,
including any Series of VRDP Shares, or any other stockholder of the
Corporation, as otherwise provided in these Articles Supplementary.
(e)
Voting Rights Set Forth Herein
are Sole Voting Rights. Unless
otherwise required by law, the Holders of VRDP Shares shall not have any
relative rights or preferences or other special rights other than those
specifically set forth herein.
(f)
No Preemptive Rights or
Cumulative Voting. The Holders of
VRDP Shares shall have no preemptive rights or rights to cumulative voting.
(g)
Voting for Directors Sole
Remedy for Corporation’s Failure to Pay Dividends. In the event that the Corporation fails to pay any
dividends on shares of a Series of VRDP Shares, the exclusive remedy of the
Holders of such Series shall be the right to vote for directors pursuant to the
provisions of this Section 5.
(h)
Holders Entitled to Vote. For purposes of determining any rights of the
Holders to vote on any matter, whether such right is created by these Articles
Supplementary, by the other provisions of the Charter, by statute or otherwise
by applicable law, no Holder shall be entitled to vote any VRDP Shares and no
VRDP Shares shall be deemed to be “Outstanding” for the purpose of voting or
determining the number of shares required to constitute a quorum if, prior to
or concurrently with the time of determination of the VRDP Shares entitled to
vote or the VRDP Shares deemed Outstanding for quorum purposes, as the case may
be, the requisite Notice of Redemption with respect to such VRDP Shares shall
have been provided as set forth in paragraph (c) of Section 10 of Part I
of these Articles Supplementary and Deposit Securities in an amount equal to
the Redemption Price for the redemption of such VRDP Shares shall have been
deposited in trust with the Tender and Paying Agent and segregated on the books
and records of the Custodian for that purpose. VRDP Shares held (legally or
beneficially) by the Corporation or any affiliate of the Corporation or
otherwise controlled by the Corporation shall not
have
any voting rights or be deemed to be Outstanding for voting or for calculating
the voting percentage required on any other matter or other purposes.
(j)
Grant of
Irrevocable Proxy. To the
fullest extent permitted by applicable
law, each Holder and Beneficial Owner may in its discretion grant an
irrevocable proxy.
6.
Minimum VRDP Shares Asset Coverage. The Corporation shall maintain,
as of the last Business Day of each month in which any VRDP Share is
Outstanding, the Minimum VRDP Shares Asset Coverage.
7.
VRDP Shares Basic Maintenance
Amount.
(a)
So long as any VRDP Share is
Outstanding, the Corporation shall maintain, on each Valuation Date, and shall
verify to its satisfaction that it is maintaining on such Valuation Date, (i)
Moody’s Eligible Assets having an aggregate Discounted Value equal to or
greater than the VRDP Shares Basic Maintenance Amount (if Moody’s is then
rating the VRDP Shares at the request of the Corporation), (ii) Fitch Eligible
Assets having an aggregate Discounted Value equal to or greater than the VRDP
Shares Basic Maintenance Amount (if Fitch is then rating the VRDP Shares at the
request of the Corporation), and (iii) Other Rating Agency Eligible Assets
having an aggregate Discounted Value equal to or greater than the VRDP Shares
Basic Maintenance Amount (if any Other Rating Agency is then rating the VRDP
Shares at the request of the Corporation).
(b)
The Corporation shall deliver to
each Rating Agency which is then rating a Series of VRDP Shares at the request
of the Corporation and any other party specified in the Rating Agency
Guidelines all certificates that are set forth in the respective Rating Agency
Guidelines regarding Minimum VRDP Shares Asset Coverage, VRDP Shares Basic
Maintenance Amount and/or related calculations at such times and containing
such information as set forth in the respective Rating Agency Guidelines (each,
a “Rating Agency Certificate”). A failure by the Corporation to deliver a
Rating Agency Certificate with respect to the VRDP Shares Basic Maintenance
Amount shall be deemed to be delivery of a Rating Agency Certificate indicating
the Discounted Value for all assets of the Corporation is less than the VRDP
Shares Basic Maintenance Amount, as of the relevant Valuation Date; provided,
however, that the Corporation shall have the ability to cure such
failure to deliver a Rating Agency Certificate within one day of receipt of
notice from such Rating Agency that, without limiting paragraph (a) above
or modifying the VRDP Shares Basic Maintenance Cure Date, the Corporation
failed to deliver such Rating Agency Certificate.
8.
Restrictions on Dividends and
Other Distributions.
(a)
Dividends on Preferred Shares
Other Than VRDP Shares. Except as
set forth in the next sentence, no dividends shall be declared or paid or set
apart for payment on the shares of any class or Series of stock of the
Corporation ranking, as to the payment of dividends, on a parity with the VRDP
Shares for any period unless full cumulative dividends have been or
contemporaneously are declared and paid on the shares of each Series of VRDP
Shares through its most recent Dividend Payment Date. When dividends are not paid
in full upon the shares of each Series of VRDP Shares through its most recent
Dividend Payment Date or upon the shares of any other class or series of stock
of the Corporation ranking on a parity as to the payment of dividends with the
VRDP Shares through their most recent respective dividend payment dates, all
dividends declared upon the VRDP Shares and any other such class or series of
stock ranking on a parity as to the payment of dividends with the VRDP Shares
shall be declared pro rata so that the amount of dividends declared per share
on the VRDP Shares and such other class or series of 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 bear to each other (for
purposes of this sentence, the
amount of dividends
declared per VRDP Share shall be based on the Applicable Rate for such VRDP
Share effective during the Dividend Periods during which dividends were not
paid in full).
(b)
Dividends and Other Distributions
With Respect to Common Shares Under the 1940 Act. The Board of Directors shall not declare any
dividend (except a dividend payable in Common Shares), or declare any other
distribution, upon the Common Shares, or purchase Common Shares, unless in every
such case the Preferred Shares have, at the time of any such declaration or
purchase, an asset coverage (as defined in and determined pursuant to the 1940
Act) of at least 200% (or such other asset coverage as may in the future be
specified in or under the 1940 Act as the minimum asset coverage for senior
securities which are shares or stock of a closed-end investment company as a
condition of declaring dividends on its common shares or stock) after deducting
the amount of such dividend, distribution or purchase price, as the case may
be.
(c)
Other Restrictions on Dividends
and Other Distributions. For so
long as any VRDP Share is Outstanding, and except as set forth in paragraph (a)
of this Section 8 and paragraph (c) of Section 11 of this Part I,
(A) the Corporation shall not declare, pay or set apart for payment any
dividend or other distribution (other than a dividend or distribution paid in
shares of, or in options, warrants or rights to subscribe for or purchase,
Common Shares or other shares, if any, ranking junior to the VRDP Shares as to
the payment of dividends and the distribution of assets upon dissolution,
liquidation or winding up) in respect of the Common Shares or any other shares
of the Corporation ranking junior to or on a parity with the VRDP Shares as to
the payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up, or call for redemption, redeem, purchase or
otherwise acquire for consideration any Common Shares or any other such junior
shares (except by conversion into or exchange for shares of the Corporation
ranking junior to the VRDP Shares as to the payment of dividends and the
distribution of assets upon dissolution, liquidation or winding up), or any
such parity shares (except by conversion into or exchange for shares of the
Corporation ranking junior to or on a parity with VRDP Shares as to the payment
of dividends and the distribution of assets upon dissolution, liquidation or
winding up), unless (i) full cumulative dividends on shares of each Series of
VRDP Shares through its most recently ended Dividend Period shall have been
paid or shall have been declared and sufficient funds for the payment thereof
deposited with the Tender and Paying Agent and (ii) the Corporation has
redeemed the full number of VRDP Shares required to be redeemed by any
provision for mandatory redemption pertaining thereto, and (B) the Corporation
shall not declare, pay or set apart for payment any dividend or other
distribution (other than a dividend or distribution paid in shares of, or in
options, warrants or rights to subscribe for or purchase, Common Shares or
other shares, if any, ranking junior to VRDP Shares as to the payment of
dividends and the distribution of assets upon dissolution, liquidation or
winding up) in respect of Common Shares or any other shares of the Corporation
ranking junior to VRDP Shares as to the payment of dividends or the
distribution of assets upon dissolution, liquidation or winding up, or call for
redemption, redeem, purchase or otherwise acquire for consideration any Common
Shares or any other such junior shares (except by conversion into or exchange
for shares of the Corporation ranking junior to VRDP Shares as to the payment
of dividends and the distribution of assets upon dissolution, liquidation or
winding up), unless immediately after such transaction the Discounted Value of
Moody’s Eligible Assets (if Moody’s is then rating the VRDP Shares at the
request of the Corporation), Fitch Eligible Assets (if Fitch is then rating the
VRDP Shares at the request of the Corporation) and Other Rating Agency Eligible
Assets (if any Other Rating Agency is then rating the VRDP Shares at the
request of the Corporation) would each at least equal the Basic Maintenance
Amount for such Series.
9.
Rating Agency Restrictions. For so long as any shares of any
Series of VRDP Shares is Outstanding and any Rating Agency is then rating a
Series of VRDP Shares at the request of the Corporation, the Corporation will
not engage in certain proscribed transactions set forth in the Rating Agency
Guidelines, unless it has received written confirmation from each such Rating
Agency that
proscribes the applicable transaction in
its Rating Agency Guidelines that any such action would not impair the rating
then assigned by such Rating Agency to a Series of VRDP Shares.
10.
Redemption.
(a)
Optional Redemption.
(i)
Subject to the provisions of subparagraph (iv)
of this paragraph (a), shares of any Series of VRDP Shares may be
redeemed, at the option of the Corporation, at any time, as a whole or from
time to time in part, out of funds legally available therefor and otherwise in
accordance with applicable state law, at a redemption price per share equal to
the sum of $100,000 plus an amount equal to accumulated but unpaid dividends
thereon (whether or not earned or declared) to, but not including, the date
fixed for redemption; provided, however, that (1) shares of a
Series of VRDP Shares may not be redeemed in part if after such partial
redemption fewer than fifty (50) shares of such Series would remain
Outstanding; (2) shares of a Series of VRDP Shares are not redeemable by the
Corporation during the Initial Rate Period; and (3) subject to subparagraph (ii)
of this paragraph (a), the Notice of Special Rate Period relating to a
Special Rate Period of shares of a Series of VRDP Shares, as delivered to the
Remarketing Agent and filed with the Secretary of the Corporation, may provide
that shares of such Series shall not be redeemable during the whole or any part
of such Special Rate Period or shall be redeemable during the whole or any part
of such Special Rate Period only upon payment of such redemption premium or
premiums as shall be specified therein (“Special Redemption Provisions”).
(ii)
A Notice of Special Rate Period
relating to shares of a Series of VRDP Shares for a Special Rate Period thereof
may contain Special Redemption Provisions only if the Corporation’s Board of
Directors, after consultation with the Remarketing Agent and the Liquidity
Provider, determines that such Special Redemption Provisions are in the best
interest of the Corporation.
(iii)
If fewer than all of the
Outstanding shares of a Series of VRDP Shares are to be redeemed pursuant to
subparagraph (i) of this paragraph (a), the number of shares of such
Series to be redeemed shall be selected 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 Corporation’s Board of
Directors may determine to be fair and equitable. The Corporation’s Board of
Directors will have the full power and authority to prescribe the terms and
conditions upon which shares of a Series of VRDP Shares will be redeemed from
time to time.
(iv)
The Corporation may not on any
date send a Notice of Redemption pursuant to paragraph (c) of this Section 10
in respect of a redemption contemplated to be effected pursuant to this paragraph (a)
unless on such date (a) the Corporation has available Deposit Securities with
maturity or tender dates not later than the day preceding the applicable
redemption date and having a Market Value not less than the amount (including
any applicable premium) due to Holders by reason of the redemption of shares of
a Series of VRDP Shares on such redemption date and (b) the Discounted Value of
Moody’s Eligible Assets (if Moody’s is then rating the shares of a Series of
VRDP Shares at the request of the Corporation),
the
Discounted Value of Fitch Eligible Assets (if Fitch is then rating the shares
of a Series of VRDP Shares at the request of the Corporation) and the
Discounted Value of Other Rating Agency Eligible Assets (if any Other Rating
Agency is then rating the shares of a Series of VRDP Shares at the request of
the Corporation) each at least equals the VRDP Shares Basic Maintenance Amount,
and would at least equal the VRDP Shares Basic Maintenance Amount immediately
subsequent to such redemption if such redemption were to occur on such date.
For purposes of determining in clause (b) of the preceding sentence whether the
Discounted Value of Moody’s Eligible Assets at least equals the VRDP Shares
Basic Maintenance Amount, the Moody’s Discount Factors applicable to Moody’s Eligible
Assets shall be determined by reference to the first Exposure Period (as
defined in the Moody’s Guidelines) longer than the Exposure Period then
applicable to the Corporation, as described in the definition of Moody’s
Discount Factor herein.
(b)
Mandatory Redemption. (i)(i) The Corporation shall redeem, out of funds legally
available therefor and otherwise in accordance with state law, all Outstanding
Series W-7 VRDP Shares on May 1, 2041, at a redemption price equal to $100,000
per share plus accumulated but unpaid dividends thereon (whether or not
earned or declared) to, but excluding, such date; provided, however,
that if such date is not a Business Day, the redemption shall occur on the next
succeeding Business Day, at a redemption price equal to $100,000 per share plus
accumulated but unpaid dividends thereon (whether or not earned or declared)
to, but excluding, May 1, 2041. The Corporation
also shall redeem, out of funds legally available therefor and otherwise in
accordance with state law, at a redemption price equal to $100,000 per share
plus accumulated but unpaid dividends thereon (whether or not earned or
declared) to, but excluding, the date fixed by the Board of Directors for
redemption, certain of the shares of a Series of VRDP Shares, if the
Corporation fails to have either Moody’s Eligible Assets (if Moody’s is then
rating the shares of a Series of VRDP Shares at the request of the Corporation)
with a Discounted Value, Fitch Eligible Assets (if Fitch is then rating the
shares of a Series of VRDP Shares at the request of the Corporation) with a
Discounted Value, or Other Rating Agency Eligible Assets (if any Other Rating
Agency is then rating the shares of a Series of VRDP Shares at the request of
the Corporation) with a Discounted Value greater than or equal to the VRDP
Shares Basic Maintenance Amount, or fails to maintain the Minimum VRDP Shares
Asset Coverage in accordance with these Articles Supplementary, and such
failure is not cured on or before the VRDP Shares Basic Maintenance Cure Date
or the Minimum VRDP Shares Asset Coverage Cure Date, as the case may be. In the
event of failure by the Corporation to have Rating Agency Eligible Assets with
a Discounted Value greater than or equal to the VRDP Shares Basic Maintenance
Amount, if then applicable, the Corporation may seek to cure such failure on or
prior to the VRDP Shares Basic Maintenance Cure Date by complying with the
requirements of the Rating Agency or Rating Agencies, if any, then rating
shares of such Series of VRDP Shares at the request of the Corporation as in
effect at the time of such failure. The number of VRDP Shares to be redeemed
shall be equal to the lesser of (A) the minimum number of VRDP Shares, together
with all other Preferred Shares subject to redemption or retirement, the
redemption of which, if deemed to have occurred immediately prior to the
opening of business on the applicable Cure Date, would result in the
Corporation’s having each of Moody’s Eligible Assets (if Moody’s is then rating
shares of a Series of VRDP Shares at the request of the Corporation) with a
Discounted Value, Fitch Eligible Assets (if Fitch is then rating shares of a
Series of VRDP Shares at the request of the Corporation) with a Discounted
Value and Other Rating Agency Eligible Assets (if any Other Rating Agency is
then rating shares of a Series of VRDP Shares at the request of the
Corporation) with a Discounted Value greater than or equal to the VRDP Shares
Basic Maintenance Amount or maintaining the Minimum VRDP Shares Asset Coverage,
as the case may be, on the applicable Cure Date (provided, however,
that, if there is no such minimum number of VRDP Shares and other Preferred
Shares the redemption or retirement of which
would
have such result, all VRDP Shares and Preferred Shares then outstanding shall
be redeemed), and (B) the maximum number of VRDP Shares, together with all
other Preferred Shares subject to redemption or retirement, that can be
redeemed out of funds legally available therefor in accordance with the Charter
and applicable law. In determining the VRDP Shares required to be redeemed in
accordance with the foregoing, the Corporation shall allocate the number
required to be redeemed to satisfy the VRDP Shares Basic Maintenance Amount or
the Minimum VRDP Shares Asset Coverage, as the case may be, pro rata among VRDP
Shares and other Preferred Shares (and, then, pro rata among each Series of
VRDP Shares) subject to redemption or retirement. The Corporation shall effect
such redemption on the date fixed by the Corporation therefor, which date shall
not be earlier than ten (10) days nor later than sixty (60) days after the
applicable Cure Date, except that if the Corporation does not have funds
legally available for the redemption of all of the required number of VRDP
Shares and other Preferred Shares which are subject to redemption or retirement
or the Corporation otherwise is unable as a result of applicable law to effect
such redemption on or prior to sixty (60) days after the applicable Cure Date, the
Corporation shall redeem those VRDP Shares and other Preferred Shares which it
was unable to redeem on the earliest practicable date on which it is able to
effect such redemption. Except in the case of a Failed Remarketing
Condition-Purchased VRDP Shares Redemption, as described below, if fewer than
all of the Outstanding shares of a Series of VRDP Shares are to be redeemed
pursuant to this paragraph (b), the number of shares of a Series of VRDP
Shares to be redeemed shall be redeemed pro rata, by lot or other fair method
as determined by the Corporation’s Board of Directors from the Holders of VRDP
Shares in proportion to the number of shares of such Series of VRDP Shares held
by such Holders.
(ii)
(A) In accordance with these Articles Supplementary and if then required
pursuant to the Fee Agreement, if the Liquidity Provider acquires any VRDP
Shares pursuant to the Purchase Obligation, including without limitation,
pursuant to Section 2.02(r) of the VRDP Shares Purchase Agreement, and
continues to be the beneficial owner for federal income tax purposes of such
Purchased VRDP Shares for a continuous period of six (6) months during which
such Purchased VRDP Shares are tendered for Remarketing on each Business Day in
accordance with the Related Documents but cannot be successfully remarketed
(i.e., a Failed Remarketing Condition Purchased VRDP Shares shall have
occurred and be continuing for such period of time with respect to such
Purchased VRDP Shares), the Corporation shall effect a Failed Remarketing
Condition-Purchased VRDP Shares Redemption out of funds legally available for
the redemption of the Purchased VRDP Shares that are subject to the Failed
Remarketing Condition-Purchased VRDP Shares Redemption and in accordance with
any other applicable law restrictions that apply to redemptions of stock; provided,
that, as of the date of redemption, (i) to the extent any VRDP Shares are
Outstanding and held by Persons other than the Liquidity Provider, the Purchase
Obligation of the Liquidity Provider whose VRDP Shares are subject to the
Failed Remarketing Condition-Purchased VRDP Shares Redemption remains in effect
to the extent required by, and in accordance with, the VRDP Shares Purchase
Agreement to which such Liquidity Provider is a party; and (ii) to the extent
(a) any VRDP Shares are Outstanding and held by Persons other than the
Liquidity Provider and (b) the Purchase Obligation of the Liquidity Provider
whose VRDP Shares are subject to the Failed Remarketing Condition-Purchased
VRDP Shares Redemption remains in effect to the extent required by, and in
accordance with, the VRDP Shares Purchase Agreement to which such Liquidity
Provider is a party, the Liquidity Provider whose VRDP Shares are subject to
the Failed Remarketing Condition-Purchased VRDP Shares Redemption shall have
made written. affirmation to the Corporation not later than the Business Day
immediately preceding the Redemption Date to the effect that the Liquidity
Provider is in compliance with the Purchase Obligation in
accordance with its terms. Notwithstanding the foregoing proviso, any failure
or delay by the Liquidity Provider whose VRDP Shares are subject to the Failed
Remarketing Condition-Purchased VRDP Shares Redemption to deliver the
affirmation referred to in the foregoing proviso shall not relieve the
Corporation of its obligation to effectuate a Failed Remarketing
Condition-Purchased VRDP Shares Redemption and shall only result in a delay by
the Corporation to effectuate a Failed Remarketing Condition-Purchased VRDP
Shares Redemption until one (1) Business Day following the date that such
Liquidity Provider delivers such affirmation or such affirmation is no longer
required. The six-month holding period for Purchased VRDP Shares acquired and
continuously held as a result of a continuing Failed Remarketing
Condition-Purchased VRDP Shares shall be determined by the Corporation on a
first-in, first-out basis. The Corporation shall effect a Failed Remarketing
Condition-Purchased VRDP Shares Redemption on the Redemption Date fixed by the
Corporation therefor, which date shall not be later than three (3) Business
Days after the expiration of the six month period, except that if the
Corporation does not have legally available funds for the redemption of all of
the required number of Purchased VRDP Shares which are subject to the Failed
Remarketing Condition-Purchased VRDP Shares Redemption or the Corporation
otherwise is unable as a result of applicable law restrictions that apply to
redemptions of stock to effect such redemption on or prior to three (3)
Business Days after the expiration of the six-month period, the Corporation
shall redeem those Purchased VRDP Shares which it was unable to redeem on the
earliest practicable date on which it is able to effect such redemption out of
legally available funds and in accordance with applicable law restrictions that
apply to redemptions of stock.
(B)
Upon the occurrence and
continuance of a Failed Remarketing Condition-Purchased VRDP Shares with
respect to any VRDP Shares (including any deemed occurrence thereof pursuant to
Section 2.02(r) of the VRDP Shares Purchase Agreement), by the fifth (5th)
Business Day following delivery of notice thereof from the Liquidity Provider
in accordance with Section 7.08(c) of the Fee Agreement, the Corporation
shall cause the Custodian to segregate, by means of appropriate identification
on its books and records or otherwise in accordance with the Custodian’s normal
procedures, from the other assets of the Corporation (a “Liquidity Account”)
Liquidity Account Investments with a Market Value equal to at least 110% of the
Liquidation Preference of such Purchased VRDP Shares. If, while the Failed
Remarketing Condition-Purchased VRDP Shares with respect to such Purchased VRDP
Shares is continuing, the aggregate Market Value of the Liquidity Account
Investments included in the Liquidity Account for such Purchased VRDP Shares as
of the close of business on any Business Day is less than 110% of the
Liquidation Preference of such Purchased VRDP Shares, then the Corporation
shall cause the Custodian and the Investment Adviser to take all such necessary
action, including segregating additional assets of the Corporation as Liquidity
Account Investments, so that the aggregate Market Value of the Liquidity
Account Investments included in the Liquidity Account for such Purchased VRDP
Shares is at least equal to 110% of the Liquidation Preference of such
Purchased VRDP Shares not later than the close of business on the next
succeeding Business Day. With respect to assets of the Corporation segregated
as Liquidity Account Investments, the Investment Adviser, on behalf of the
Corporation, shall be entitled to instruct the Custodian
with
a copy to the Liquidity Provider on any date to release any Liquidity Account
Investments with respect to any Purchased VRDP Shares from such segregation and
to substitute therefor other Liquidity Account Investments, so long as (x) the
assets of the Corporation segregated as Liquidity Account Investments with
respect to such Purchased VRDP Shares at the close of business on such date
have a Market Value equal to 110% of the Liquidation Preference of such
Purchased VRDP Shares and (y) the assets of the Corporation designated and
segregated as Deposit Securities at the close of business on such date have a
Market Value equal to the Liquidity Requirement (if any) determined in
accordance with paragraph (C) below with respect to such Purchased VRDP
Shares for such date. The Corporation shall cause the Custodian not to permit
any lien, security interest or encumbrance to be created or permitted to exist
on or in respect of any Liquidity Account Investments included in the Liquidity
Account for any Purchased VRDP Shares, other than liens, security interests or
encumbrances arising by operation of law and any lien of the Custodian with
respect to the payment of its fees or repayment for its advances.
Notwithstanding anything expressed or implied herein to the contrary, the
assets of the Liquidity Account shall continue to be assets of the Corporation
subject to the interests of all creditors and stockholders of the Corporation.
(C)
Subject to notice having been
received as referred to in paragraph (B) above, the Market Value of the
Deposit Securities held in the Liquidity Account for any Purchased VRDP Shares,
from and after the day (or if such day is not a Business Day, the next
succeeding Business Day) preceding the expiration of the six-month period for
the Failed Remarketing Condition-Purchased VRDP Shares applicable to such
Purchased VRDP Shares (which, for the avoidance of doubt, may result in
multiple six month periods, each in respect of a Failed Remarketing Condition-Purchased
VRDP Shares in respect of applicable Purchased VRDP Shares) specified in the
table set forth below, shall not be less than the percentage of the Liquidation
Preference for such Purchased VRDP Shares set forth below opposite such day
(the “Liquidity Requirement”), but in all cases subject to the cure provisions
of paragraph (D) below:
Number of Days*
Preceding the Six Month Anniversary of Liquidity Provider’s Purchase
|
Value of Deposit
Securities
as Percentage of Liquidation Preference
|
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 Corporation shall cause the segregation of additional or
substitute Deposit Securities in respect of the Liquidity Account for such
Purchased VRDP Shares, so that the aggregate Market Value of the Deposit
Securities included in the Liquidity Account for such Purchased VRDP Shares is
at least equal to the Liquidity Requirement for such Purchased VRDP Shares not
later than the close of business on the next succeeding Business Day.
(E)
The Deposit Securities included in
the Liquidity Account for any Purchased VRDP Shares may be applied by the
Corporation, in its discretion, towards payment of the Redemption Price for
such Purchased VRDP Shares. Upon the earlier to occur of (x) the successful
remarketing of the Purchased VRDP Shares or (y) the deposit by the Corporation
with the Tender and Paying Agent with arrangements satisfactory to the
Liquidity Provider of Deposit Securities having an initial combined Market
Value sufficient to effect the redemption of such Purchased VRDP Shares on the
Redemption Date for such Purchased VRDP Shares, the requirement of the
Corporation to maintain a Liquidity Account for such Purchased VRDP Shares as
contemplated by this Section I0(b)(ii) shall lapse and be of no further
force and effect.
(F)
The provisions of paragraphs (A)
through (E) of this Section 10(b)(ii) may be amended by the Board of
Directors, by resolution duly adopted, without stockholder approval in order to
conform to the terms of a Fee Agreement or as otherwise necessary or desirable
in the judgment of the Board of Directors. provided that the Board of
Directors receives the prior written consent of the Liquidity Provider and
written confirmation from each Rating Agency, as applicable, then rating shares
of a Series of VRDP Shares at the request of the Corporation that any such
amendments would not adversely affect the rating then assigned by such Rating
Agency to such Series of VRDP Shares.
(iii)
At least six (6) months prior to
the scheduled mandatory Redemption Date of May 1, 2041 specified in Section 10(b)(i)
above, if any Series W-7 VRDP Shares then remain Outstanding, the Corporation
shall cause the Custodian to segregate in a Liquidity Account (but without
duplication of any Liquidity Account then in effect pursuant to Section 10(b)(ii)
above), by means of appropriate identification on its books and records or
otherwise in accordance with the Custodian’s normal procedures, from the other
assets of the Corporation, Liquidity Account Investments with a Market Value
equal to at least 110% of the Liquidation Preference of the then Outstanding
Series W-7 VRDP Shares. The Corporation shall maintain such Liquidity Account
in accordance with Section 10(b)(ii)(B), (C) and (D) above and comply with
the requirements set forth therein with respect to Liquidity Account
Investments and the Liquidity Requirement; provided, that for purposes
of this Section 10(b)(iii) all references therein to Purchased VRDP Shares
shall be deemed to be to all Outstanding Series W-7 VRDP Shares, all references
therein to the Failed Remarketing Condition-Purchased VRDP Shares or the
related six-month period shall be deemed to be to
the
six-month period preceding the scheduled mandatory Redemption Date of May 1,
2041, and the references to notice by the Liquidity Provider shall not be
applicable. The Deposit Securities included in the Liquidity Account for the
Outstanding Series W-7 VRDP Shares may be applied by the Corporation, in its
discretion, towards payment of the Redemption Price for the Outstanding Series
W-7 VRDP Shares. Upon the deposit by the Corporation with the Tender and Paying
Agent with arrangements satisfactory to the Liquidity Provider of Deposit Securities
having an initial combined Market Value sufficient to effect the redemption of
the Outstanding Series W-7 VRDP Shares on May 1, 2041 Redemption Date for the
Outstanding Series W-7 VRDP Shares, the requirement of the Corporation to
maintain a Liquidity Account for the Outstanding Series W-7 VRDP Shares as
contemplated by this Section 10(b)(iii) shall lapse and be of no further
force and effect.
(c)
Notice of Redemption. If the Corporation shall determine or be required to
redeem, in whole or in part, shares of a Series of VRDP Shares pursuant to paragraph (a)
or (b)(i) of this Section 10, the Corporation will send a notice of
redemption (the “Notice of Redemption”), by Electronic Means (or by first-class
mail, postage prepaid, in the case where the shares of such Series of VRDP
Shares are in physical form outside the book-entry system of the Securities
Depository), to Holders thereof and the Liquidity Provider or, in the case of a
redemption pursuant to paragraph (b)(ii) of this Section 10, only to
the Liquidity Provider, or request the Tender and Paying Agent, on behalf of
the Corporation to promptly do so by Electronic Means (or by first-class mail,
postage prepaid, in the case where the shares of such Series of VRDP Shares are
in physical form outside the book-entry system of the Securities Depository) so
long as the Notice of Redemption is furnished by the Corporation to the Tender
and Paying Agent in electronic format at least five (5) Business Days prior to
the date a Notice of Redemption is required to be delivered to the Holders,
unless a shorter period of time shall be acceptable to the Tender and Paying
Agent. A Notice of Redemption shall be sent to Holders not less than ten (10)
days prior to the date fixed for redemption in such Notice of Redemption (the “Redemption
Date”). Each such Notice of Redemption shall state, (i) the Redemption Date;
(ii) the number of shares of such Series of VRDP Shares to be redeemed and the
Series thereof; (iii) the CUSIP number for the VRDP Shares of such Series; (iv)
the Redemption Price; (v) the place or places where the certificate(s), if any,
for such shares (properly endorsed or assigned for transfer, if the Board of
Directors requires and the Notice of Redemption states) are to be surrendered
for payment of the Redemption Price; (vi) that dividends on the shares of such
Series of VRDP Shares to be redeemed will cease to accumulate from and after
such Redemption Date; and (vii) the provisions of these Articles Supplementary under
which such redemption is made. If fewer than all shares of a Series of VRDP
Shares held by any Holder are to be redeemed, the Notice of Redemption
delivered to such Holder shall also specify the number of shares of such Series
of VRDP Shares to be redeemed from such Holder. The Corporation may provide in
any Notice of Redemption relating to a redemption contemplated to be effected
pursuant to these Articles Supplementary that such redemption is subject to one
or more conditions precedent and that the Corporation shall not be required to
effect such redemption unless each such condition has been satisfied at the
time or times and in the manner specified in such Notice of Redemption. No
defect in the Notice of Redemption or delivery thereof shall affect the
validity of redemption proceedings, except as required by applicable law.
(d)
No Redemption Under Certain
Circumstances. Notwithstanding
the provisions of paragraphs (a) or (b) of this Section 10, if any
dividends on shares of a Series of VRDP Shares (whether or not earned or
declared) are in arrears, no shares of such Series shall be redeemed unless all
Outstanding shares of such Series are simultaneously redeemed, and the
Corporation shall not otherwise purchase or acquire any shares of such Series; provided,
however, that the foregoing shall not prevent the purchase or
acquisition of Outstanding shares of a Series of VRDP Shares pursuant to the
successful completion of an
otherwise lawful purchase
or exchange offer made on the same terms to Holders of all Outstanding shares
of such Series of VRDP Shares.
(e)
Absence of Funds Available for
Redemption. To the extent that
any redemption for which a Notice of Redemption has been provided is not made
by reason of the absence of legally available funds therefor in accordance with
the Charter and applicable law, such redemption shall be made as soon as
practicable to the extent such funds become available. A failure to redeem
shares of a Series of VRDP Shares shall be deemed to exist at any time after
the date specified for redemption in a Notice of Redemption when the
Corporation shall have failed, for any reason whatsoever, to deposit in trust
with the Tender and Paying Agent the Redemption Price with respect to any
shares for which such Notice of Redemption has been sent; provided, however,
that the foregoing shall not apply in the case of the Corporation’s failure to
deposit in trust with the Tender and Paying Agent the Redemption Price with
respect to any shares where (1) the Notice of Redemption relating to such
redemption, provided that such redemption was subject to one or more
conditions precedent, and (2) any such condition precedent shall not have been
satisfied at the time or times and in the manner specified in such Notice of
Redemption. Notwithstanding the fact that the Corporation may not have redeemed
shares of a Series of VRDP Shares for which a Notice of Redemption has been
provided, dividends may be declared and paid on shares of a Series of VRDP
Shares and shall include those shares of such Series of VRDP Shares for which a
Notice of Redemption has been provided.
(f)
Tender and Paying Agent as
Trustee of Redemption Payments by Corporation. All moneys paid to the Tender and Paying Agent for
payment of the Redemption Price of shares of a Series of VRDP Shares called for
redemption shall be held in trust by the Tender and Paying Agent for the
benefit of Holders of shares so to be redeemed.
(g)
Shares for Which Notice of
Redemption Has Been Given Are No Longer Outstanding. Provided a Notice of Redemption has been provided
pursuant to paragraph (c) of this Section 10, the Corporation shall
irrevocably (except to the extent set forth below in this paragraph (g))
deposit with the Tender and Paying Agent, no later than 12:00 noon, New York
City time, on a Business Day not less than ten (10) Business Days preceding the
redemption date specified in such notice, Deposit Securities in an aggregate
amount equal to the Redemption Price to be paid on the Redemption Date in
respect of any shares of a Series of VRDP Shares that are subject to such
notice. Provided a Notice of Redemption has been provided pursuant to paragraph (c)
of this Section 10, upon the deposit with the Tender and Paying Agent of
Deposit Securities in an amount sufficient to redeem the shares of a Series of
VRDP Shares that are the subject of such notice, dividends on such shares of a
Series of VRDP Shares shall cease to accumulate and such shares of a Series of
VRDP Shares shall no longer be deemed to be Outstanding, except as noted below
with respect to the VRDP Shares Purchase Agreement, for any purpose, and all
rights of the Holders of the shares of a Series of VRDP Shares so called for
redemption shall cease and terminate, except the right of such Holders to
receive the Redemption Price, but without any interest or other additional
amount, except as provided in paragraph (e)(i) of Section 2 of this Part I
and in Section 3 of Part I of these Articles Supplementary. Upon
surrender in accordance with the Notice of Redemption of the certificates for
any shares of a Series of VRDP Shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the
Notice of Redemption shall so state), the Redemption Price shall be paid by the
Tender and Paying Agent to the Holders of shares of a Series of VRDP Shares
subject to redemption. In the case that fewer than all of the shares
represented by any such certificate are redeemed, a new certificate shall be
issued, representing the unredeemed shares, without cost to the Holder thereof.
The Corporation shall be entitled to receive from the Tender and Paying Agent,
promptly after the date fixed for redemption, any cash or other Deposit
Securities deposited with the Tender and Paying Agent in excess of (i) the
aggregate Redemption Price of the shares of a Series of VRDP Shares called for
redemption on such date and (ii) all other amounts to which Holders of shares
of a Series of VRDP Shares called for redemption may be entitled. Any funds so
deposited that are
unclaimed at the end of ninety (90)
days from such redemption date shall, to the extent permitted by law, be repaid
to the Corporation, after which time the Holders of shares of a Series of VRDP
Shares so called for redemption may look only to the Corporation for payment of
the Redemption Price and all other amounts to which they may be entitled. The
Corporation shall be entitled to receive, from time to time after the date
fixed for redemption, any interest on the funds so deposited. Notwithstanding
the foregoing, shares of a Series of VRDP Shares will be deemed to be
Outstanding for purposes of the VRDP Shares Purchase Agreement until redeemed
by the Corporation.
(h)
Compliance With Applicable Law. In effecting any redemption pursuant to this Section 10,
the Corporation shall use its best efforts to comply with all applicable
conditions precedent to effecting such redemption under the 1940 Act and any
applicable Maryland or other state law, but shall effect no redemption except
in accordance with the 1940 Act and any applicable Maryland or other state law.
(i)
Only Whole Shares of a Series
of VRDP Shares May Be Redeemed.
In the case of any redemption pursuant to this Section 10, only whole
shares of a Series of VRDP Shares shall be redeemed, and in the event that any
provision of the Charter would require redemption of a fractional share, the
Remarketing Agent shall be authorized to round up so that only whole shares are
redeemed.
(j)
Modification of Redemption Procedures. Notwithstanding the foregoing provisions of this Section 10,
the Corporation may, in its sole discretion, modify the procedures set forth
above with respect to notification of redemption of VRDP Shares, provided
that such modification does not materially and adversely affect the Holders of
VRDP Shares or cause the Corporation to violate any law, rule or regulation, or
to in any way alter the obligations of the Tender and Paying Agent without its
prior written consent. Furthermore, if in the sole discretion of the Board of
Directors, after consultation with counsel, modification of the foregoing
redemption provisions (x) are permissible under the rules and regulations or
interpretations of the SEC and under other applicable law and (y) would not
cause a material risk as to the treatment of the VRDP Shares as equity for U.S.
federal income tax purposes, the Board of Directors, without stockholder
approval, by resolution and with the prior written consent of the Liquidity
Provider may modify such redemption procedures.
11.
Liquidation Rights.
(a)
Ranking. The shares of a Series of VRDP Shares shall rank on
a parity with each other, with shares of any other Series of VRDP Shares and
with shares of any other Series of Preferred Shares as to the distribution of
assets upon dissolution, liquidation or winding up of the affairs of the
Corporation.
(b)
Distributions Upon Liquidation. Upon the dissolution, liquidation or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the Holders
of VRDP Shares then Outstanding shall be entitled to receive and to be paid out
of the assets of the Corporation available for distribution to its stockholders
and otherwise in accordance with applicable state law, before any payment or
distribution shall be made on the Common Shares or on any other class of shares
of the Corporation ranking junior to the VRDP Shares upon dissolution,
liquidation or winding up, an amount equal to the Liquidation Preference with
respect to such shares plus an amount equal to all dividends thereon (whether
or not earned or declared) accumulated but unpaid to (but not including) the
date of final distribution in same day funds, together with any payments
required to be made pursuant to Section 3 of Part I of these Articles
Supplementary in connection with the liquidation of the Corporation. After the
payment to the Holders of VRDP Shares of the full preferential amounts provided
for in this paragraph (b), the Holders of VRDP Shares as such shall have
no right or claim to any of the remaining assets of the Corporation.
(c)
Pro Rata Distributions. In the event the assets of the Corporation available
for distribution to the Holders of VRDP Shares upon any dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary, shall be insufficient to pay in full all amounts to which such
Holders are entitled pursuant to paragraph (b) of this Section 11, no
such distribution shall be made on account of any shares of any other class or
Series of Preferred Shares ranking on a parity with the VRDP Shares with
respect to the distribution of assets upon such dissolution, liquidation or
winding up unless proportionate distributive amounts shall be paid on account
of the VRDP Shares, ratably, in proportion to the full distributable amounts
for which holders of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up.
(d)
Rights of Junior Shares. Subject to the rights of the holders of shares of
any series or class or classes of shares ranking on a parity with the VRDP
Shares with respect to the distribution of assets upon dissolution, liquidation
or winding up of the affairs of the Corporation, after payment shall have been
made in full to the Holders of VRDP Shares as provided in paragraph (b) of
this Section 11, but not prior thereto, any other series or class or
classes of shares ranking junior to the VRDP Shares with respect to the
distribution of assets upon dissolution, liquidation or winding up of the
affairs of the Corporation shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the Holders of VRDP Shares shall not
be entitled to share therein.
(e)
Certain Events Not Constituting
Liquidation. Neither the sale of
all or substantially all the property or business of the Corporation, nor the
merger, consolidation or reorganization of the Corporation into or with any
business or statutory trust, corporation or other entity nor the merger,
consolidation or reorganization of any business or statutory trust, corporation
or other entity into or with the Corporation shall be a dissolution,
liquidation or winding up, whether voluntary or involuntary, for the purposes
of this Section 11.
12.
Purchase Obligation. As long as shares of any Series
of VRDP Shares are Outstanding, the Corporation shall maintain a VRDP Shares
Purchase Agreement providing for a Purchase Obligation with a Liquidity
Provider with short-term debt ratings in one of the two highest ratings
categories from the Requisite NRSROs on an ongoing basis to the extent that the
Corporation can do so on a commercially reasonable basis as determined in the
sole discretion of the Board of Directors. If the Corporation maintains a VRDP
Shares Purchase Agreement providing a Purchase Obligation, the provisions
herein relating to the Liquidity Provider shall be operative and the following
shall apply:
(a)
The Corporation shall notify, or
cause the Tender and Paying Agent to notify, Holders by Electronic Means, or by
first-class mail, postage prepaid, in the case in which shares of a Series of
VRDP Shares are in physical form outside the book-entry system of the
Securities Depository, (A) in the event of a Mandatory Tender Event or
Mandatory Purchase Event, (B) upon at least seven (7) days’ prior notice in the
event that there is a substitute Liquidity Provider (including, but not limited
to, as to the Liquidity Provider, its consolidation, amalgamation with, or merger
with or into, another entity, or the transfer of all or substantially all of
the Liquidity Provider’s assets to another entity), or (C) any downgrade in the
rating of the Series of VRDP Shares or the Liquidity Provider by an NRSRO then
rating shares of such Series of VRDP Shares at the request of the Corporation
or Liquidity Provider.
(b)
In the event of a Failed
Remarketing Condition, the Corporation will require in the Tender and Paying
Agent Agreement that the Tender and Paying Agent will notify the Corporation
and Holders by telephone or Electronic Means (or by first-class-mail, postage
prepaid, in the case in which shares of a Series of VRDP Shares are in physical
form outside the book-entry system of the Securities Depository) of such Failed
Remarketing Condition.
(c)
Each share of a Series of VRDP
Shares shall be subject to tender to the Tender and Paying Agent for
Remarketing on the related Purchase Date or, in the event (i) no Remarketing
occurs or (ii) pursuant to an attempted Remarketing shares remain unsold and
the Remarketing Agent does not purchase for its own account the unsold shares
of a Series of VRDP Shares tendered to the Tender and Paying Agent for Remarketing
(provided that the Remarketing Agent may seek to sell such shares of a
Series of VRDP Shares in a subsequent Remarketing prior to the Purchase Date)
to the Liquidity Provider for purchase on such Purchase Date pursuant to a
Notice of Purchase. If there is no Tender and Paying Agent or the Tender and
Paying Agent does not perform such obligation pursuant to the VRDP Shares
Purchase Agreement, Beneficial Owners and their Agent Members shall have the
right to tender their shares of a Series of VRDP Shares directly to the
Liquidity Provider pursuant to a Final Notice of Purchase. In the event there
is no Tender and Paying Agent or for any reason the Tender and Paying Agent
does not perform its obligations under the VRDP Shares Purchase Agreement, the
Corporation (i) upon becoming aware thereof, shall promptly notify the
Liquidity Provider, the Remarketing Agent and Holders by Electronic Means of
such event, and (ii) so long as such event is continuing, shall use its best
efforts to direct the Remarketing Agent to forward, concurrently with the
delivery thereof to the Liquidity Provider or as promptly as practicable
thereafter, any Remarketing Notice to each Beneficial Owner or Holder tendering
shares of the Series of VRDP Shares that are the subject of such notice.
(d)
The Corporation will require in
the Tender and Paying Agent Agreement that, pursuant to a Tender, shares of a
Series of VRDP Shares that are not sold in a Remarketing will be tendered by
the Tender and Paying Agent to the Liquidity Provider for payment of the Purchase
Price on the Purchase Date pursuant to the VRDP Shares Purchase Agreement.
(e)
Except as set forth in Section 10(b)
of Part I of these Articles Supplementary in connection with a mandatory
redemption of shares of a Series of VRDP Shares, the Corporation shall have no
obligation to purchase shares of a Series of VRDP Shares acquired by the
Liquidity Provider pursuant to the VRDP Shares Purchase Agreement or otherwise.
(f)
Shares of a Series of VRDP Shares
are subject to Mandatory Purchase by the Liquidity Provider upon the occurrence
of a Mandatory Purchase Event. So long as shares of such Series of VRDP Shares
are in book-entry form and held through the Securities Depository, any
Mandatory Purchase will be effected automatically through the book-entry system
of the Securities Depository, without any action required on the part of the
Holders or Beneficial Owners. Promptly following the occurrence of a Mandatory
Purchase Event, and in any event within three (3) Business Days thereafter, the
Corporation, or the Tender and Paying Agent at the direction of the Corporation
(provided, that the Tender and Paying Agent may require up to two (2)
Business Days prior notification by Electronic Means by the Corporation), shall
provide a Mandatory Purchase Notice by Electronic Means to Holders and the
Liquidity Provider, specifying a Mandatory Purchase Date for all Outstanding
shares of such Series of VRDP Shares. The Mandatory Purchase Date shall not be
later than seven (7) days following the date a Mandatory Purchase Notice is
sent to Holders by Electronic Means, and in any event shall be not later than
the Business Day immediately preceding the termination of the VRDP Shares
Purchase Agreement. Any notice given in respect of a Mandatory Purchase under
these Articles Supplementary shall be conclusively presumed to have been duly
given, whether or not the Holders receive such notice. Upon the occurrence of a
Mandatory Purchase Event, all Outstanding shares of a Series of VRDP Shares
automatically shall be subject to Mandatory Purchase by the Liquidity Provider
at the Purchase Price on the Mandatory Purchase Date, including any shares of
such Series of VRDP Shares tendered pursuant to an Optional Tender or Mandatory
Tender for which the Purchase Date has not yet occurred.
(g)
In the event shares of a Series of
VRDP Shares are issued in certificated form outside the book-entry system of
the Securities Depository and a Holder fails to deliver such shares of such
Series of VRDP Shares to which a Mandatory Purchase relates, on or prior to the
Mandatory Purchase Date, the
Holder of shares of such
Series of VRDP Shares 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 VRDP Shares as of the
scheduled Purchase Date. Any such undelivered shares of a Series of VRDP Shares
will be deemed to be delivered to the Tender and Paying Agent, and the Tender
and Paying Agent will place stop-transfer orders against the undelivered shares
of such Series of VRDP Shares. Any moneys held by the Tender and Paying Agent
for the purchase of undelivered shares of such Series of VRDP Shares shall be
held in a separate account, shall not be invested, and shall be held for the
exclusive benefit of the Holder of such undelivered shares of such Series of
VRDP Shares. The undelivered shares of a Series of VRDP Shares shall be deemed
to be no longer Outstanding (except as to entitlement to payment of the
Purchase Price), and the Corporation will issue to the purchaser replacement
share certificates for such shares in lieu of such undelivered shares of such
Series of VRDP Shares.
(h)
The Corporation shall use best
efforts to engage at all times a Tender and Paying Agent to perform the duties
specified in these Articles Supplementary, the Tender and Paying Agent
Agreement and the VRDP Shares Purchase Agreement with respect to the Tender and
Paying Agent.
The provisions of
paragraphs (a) through (g) of this Section 12 may be amended by the Board
of Directors, by resolution duly adopted, without stockholder approval in order
to conform to a VRDP Shares Purchase Agreement providing a Purchase Obligation.
13.
Miscellaneous.
(a)
Amendment of or Supplements to
these Articles Supplementary.
Subject to the provisions of Section 9 of Part I of these Articles
Supplementary, the Board of Directors may, by resolution duly adopted, without
stockholder approval (except as otherwise provided by these Articles
Supplementary or required by applicable law), amend or supplement these
Articles Supplementary to (1) reflect any amendments or supplements hereto
which the Board of Directors is entitled to adopt pursuant to the terms of
these Articles Supplementary without stockholder approval or (2) designate
additional Series of VRDP Shares (and terms relating thereto). Each such
additional Series shall be governed by the terms of these Articles
Supplementary as so amended or supplemented.
(b)
No Fractional Shares. No fractional shares of a Series of VRDP Shares
shall be issued.
(c)
Status of VRDP Shares Redeemed, Exchanged or Otherwise Acquired by the Corporation.
Shares of a Series of VRDP shares which are redeemed, exchanged or otherwise
acquired by the Corporation shall return to the status of authorized and
unissued Preferred Shares without designation as to series, provided, however,
that any shares of a Series of VRDP Shares which are provisionally delivered by
the Corporation to or for the account of an agent of the Corporation or to or
for the account of a purchaser of the shares of the Series of VRDP Shares, but
for which final payment is not received by the Corporation, shall return to the
status of authorized and unissued shares of such Series of VRDP Shares.
(d)
Purchase Obligation Part of
the VRDP Shares. Each Holder and
Beneficial Owner, by virtue of acquiring shares of a Series of VRDP Shares, is
deemed to have agreed to treat the Purchase Obligation as part of the VRDP
Shares rather than as a separate property right.
(e)
Treatment of VRDP Shares as
Equity. Each Holder and
Beneficial Owner, by virtue of acquiring shares of a Series of VRDP Shares, is
deemed to have agreed, to treat the VRDP Shares as equity in the Corporation
for U.S. federal income tax purposes.
(f)
Board of Directors May Resolve
Ambiguities. To the extent permitted
by applicable law, the Board of Directors may interpret or adjust the
provisions of these Articles Supplementary to resolve any inconsistency or
ambiguity or to remedy any formal defect, and may amend these Articles
Supplementary with respect to VRDP Shares prior to the issuance of such VRDP
Shares.
(g)
Headings Not Determinative. The headings contained in these Articles
Supplementary are for convenience of reference only and shall not affect the
meaning or interpretation of these Articles Supplementary.
(h)
Notices. All notices or communications, unless otherwise
specified in the Bylaws of the Corporation or these Articles Supplementary,
shall be sufficiently given if in writing and delivered in person, by
Electronic Means or mailed by first-class mail, postage prepaid.
PART II
1.
Remarketing Procedures.
(a)
Pursuant to an Optional Tender,
Beneficial Owners may elect to tender their VRDP Shares (in denominations equal
to the Liquidation Preference) for purchase at the Purchase Price on the
Purchase Date designated in a Notice of Tender (or, if such day is not a
Business Day, on the next succeeding Business Day) by a proper delivery of a
Notice of Tender to the Tender and Paying Agent. Each Notice of Tender shall be
irrevocable (except as described below) and effective upon receipt by the
Tender and Paying Agent and shall:
(i)
be delivered by a Beneficial
Owner, directly or through its Agent Member, by email transmission (or if email
transmission shall be unavailable, by facsimile transmission), to the Tender
and Paying Agent not later than 2:00 p.m., New York City time, on any Business
Day;
(ii)
state the series and the aggregate
number of VRDP Shares to be purchased, the CUSIP number of the Series of VRDP
Shares to be purchased, and the Purchase Date and be in substantially the form
of and contain such other information specified in an exhibit to the VRDP
Shares Purchase Agreement; and
(iii)
state that the tendering
Beneficial Owner acknowledges that such Beneficial Owner is required to deliver
the VRDP Shares that are the subject of a Notice of Tender (that has not been
duly revoked as provided below) on or before 2:00 p.m., New York City time, on
the Purchase Date.
(b)
Upon receipt of a Notice of
Tender, the Tender and Paying Agent shall provide a copy of such notice to the
Liquidity Provider and the Remarketing Agent (with a copy to the Corporation)
as promptly as practicable by Electronic Means, but no later than 4:00 p.m.,
New York City time, on the date of receipt or deemed receipt.
(c)
Any Notice of Tender delivered to
the Tender and Paying Agent by a Beneficial Owner or its Agent Member after
2:00 p.m., New York City time, shall be deemed to have been received by the
Tender and Paying Agent on the next succeeding Business Day, and the Purchase
Date shall be adjusted such that the Purchase Date shall be the Business Day
next succeeding the date specified as the Purchase Date in the Notice of
Tender.
(d)
The determination of the Tender
and Paying Agent as to whether a Notice of Tender has been properly delivered
pursuant to the foregoing paragraph (a) shall be conclusive and binding
upon the Beneficial Owner and its Agent Member.
(e)
(i) Shares of a Series of VRDP Shares are subject to
Mandatory Tender upon the occurrence of a Mandatory Tender Event.
(ii)
So long as the shares of a Series
of VRDP Shares are in book-entry form and held through the Securities
Depository, any Mandatory Tender will be effected automatically through the
book-entry system of the Securities Depository, without any action required on
the part of the Holders or Beneficial Owners. Promptly following the occurrence
of a Mandatory Tender Event, and in any event within three (3) Business Days
thereafter, the Corporation, or the Tender and Paying Agent at the direction of
the Corporation (provided, that the Tender and Paying Agent may require
up to two (2) Business Days prior notification by Electronic Means by the
Corporation), shall provide a Mandatory Tender Notice by Electronic Means to
Holders, the Remarketing Agent and the Liquidity Provider, specifying a
Purchase Date for all Outstanding shares of such Series of VRDP Shares. Any
notice given in respect of a Mandatory Tender under these Articles Supplementary
will be conclusively presumed to have been duly given, whether or not the
Holders receive such notice.
(iii)
Upon the occurrence of a Mandatory
Tender Event, all Outstanding shares of a Series of VRDP Shares automatically
shall be subject to Mandatory Tender and delivered to the Tender and Paying
Agent for purchase on the designated Purchase Date by purchasers in the
Remarketing in the event of a successful Remarketing or otherwise by the
Liquidity Provider, including any shares of such Series of VRDP Shares
previously tendered pursuant to an Optional Tender for which the Purchase Date
has not yet occurred. In the event that shares of a Series of VRDP Shares are
issued in certificated form outside the book-entry system of the Securities
Depository and a Holder of shares of such Series of VRDP Shares fails to
deliver such shares to which a Mandatory Tender relates on or prior to the
Purchase Date, the Holder of shares of such Series of VRDP Shares shall not be
entitled to any payment (including any accumulated but unpaid dividends
thereon, whether or not earned or declared) other than the Purchase Price of
such undelivered shares of such Series of VRDP Shares as of the scheduled
Purchase Date. Any such undelivered shares of such Series of VRDP Shares will
be deemed to be delivered to the Tender and Paying Agent, and the Tender and
Paying Agent will place stop-transfer orders against the undelivered shares of
such Series of VRDP Shares. Any moneys held by the Tender and Paying Agent for
the purchase of undelivered shares of a Series of VRDP Shares will be held in a
separate account by the Tender and Paying Agent, will not be invested, and will
be held for the exclusive benefit of the Holder of such undelivered shares of
such Series of VRDP Shares. The undelivered shares of a Series of VRDP Shares
will be deemed to be no longer Outstanding (except as to entitlement to payment
of the Purchase Price), and the Corporation will issue to the purchaser
replacement share certificates in lieu of such undelivered shares of such
Series of VRDP Shares.
(f)
A Beneficial Owner or its Agent
Member that delivered a Notice of Tender in connection with an Optional Tender
may deliver in writing by email transmission (or if email transmission shall be
unavailable, by facsimile transmission) to the Tender and Paying Agent, not
later than 10:00 a.m., New York City time, on or prior to the Business Day
immediately preceding the Purchase Date, a notice to the effect that such Beneficial
Owner wishes to revoke its election to tender some or all of the shares of a
Series of VRDP Shares that were specified in such Notice of Tender to be
purchased (a “Notice of Revocation”). Any Notice of Revocation delivered to the
Tender and Paying Agent shall be promptly delivered by Electronic Means by the
Tender and Paying Agent to the Liquidity Provider and the Remarketing Agent
(with a copy to the Corporation) by 12:00 noon, New York City time, on the
Business Day immediately preceding the relevant Purchase Date. The Remarketing
Agent (following receipt of such Notice of Revocation) shall notify the Tender
and Paying Agent and the Liquidity Provider of the number of shares of such
Series of VRDP Shares specified in such Notice of Revocation that are subject
to an agreement of sale pursuant to a Remarketing by Electronic Means not later
than 2:00 p.m., New York City time, on the Business Day immediately preceding
the Purchase Date. The Tender and Paying Agent shall contact the Remarketing
Agent by Electronic Means by 1:45 p.m., New York City time, if such
notification has not been received by such time. The Tender and Paying Agent
shall deliver such notification to the Beneficial Owner or its Agent Member
promptly following receipt from the Remarketing Agent, and in any event by 4:00
p.m., New York City time, on the Business Day immediately preceding the
Purchase Date. Any such Notice of Revocation shall be effective (without
further action on the part of the Beneficial Owner or its Agent Member) as a
revocation of the Optional Tender of the number of shares of such Series of
VRDP Shares specified therein as being sought to be revoked, but (except as set
forth below) only if and to the extent that the Remarketing Agent has not
entered into an agreement to sell shares of such Series of VRDP Shares. A
Notice of Revocation shall be effective as to the number of shares of a Series
of VRDP Shares specified therein as having been revoked less the number of
shares of such Series of VRDP Shares in respect of which the Remarketing Agent
has so notified the Tender and Paying Agent and the Liquidity Provider that it
has entered into an agreement of sale. Notwithstanding the foregoing, (x)
tendered shares of a Series of VRDP Shares, if any, that remain 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 shares of a
Series of VRDP Shares, if any, that remain unsold on the related Purchase Date
shall be allocated by the Remarketing Agent to each Notice of Revocation
received in respect of shares of such Series of VRDP Shares tendered for
purchase on such Purchase Date and not already satisfied in the chronological
order in which each such Notice of Revocation was received by the Tender and
Paying Agent, and each such Notice of Revocation shall be effective only to the
extent of such allocation and availability of unsold shares of such Series of
VRDP Shares.
(g)
In connection with any Special
Rate Period designated pursuant to Section 4 of Part I of these
Articles Supplementary, the Board of Directors, without the vote or consent of
any Holder of any shares of any Series of VRDP Shares but with the prior
written consent of the Liquidity Provider, in the Notice of Special Rate Period
relating to a Series of the VRDP Shares, as delivered to the Remarketing Agent
and the Liquidity Provider, may provide for optional tender provisions relating
solely to such Special Rate Period (“Special Optional Tender Provisions”)
whereby the minimum number of days’ notice required for an Optional Tender may
exceed seven (7) days as specified in the Special Optional Tender Provisions
for such Special Rate Period. The designation of the Special Rate Period will
be a Mandatory Tender Event in accordance with the definition thereof.
(h)
The Corporation shall use its best
efforts to engage at all times a Remarketing Agent that is a nationally
recognized securities dealer with experience in remarketing variable-rate
securities to use its best efforts to find purchasers for all shares of a
Series of VRDP Shares properly tendered pursuant to a Tender.
2.
Remarketing Schedule.
(a)
In connection with any attempted
Remarketing, all tendered shares of a Series of VRDP Shares shall be remarketed
at the Purchase Price of such shares. The calculation of the Purchase Price of
the shares of such Series of VRDP Shares that are remarketed or purchased by
the Liquidity Provider shall be made by the Remarketing Agent in advance of
such Remarketing or purchase and, together with the details of the aggregate
number and Purchase Price of remarketed shares of such Series of VRDP Shares
and the aggregate number and Purchase Price of shares of such Series of VRDP
Shares to be purchased by the Liquidity Provider pursuant to the Purchase
Obligation, shall be communicated by the Remarketing Agent to the Corporation,
the Liquidity Provider and the Tender and Paying Agent by Electronic Means by
2:00 p.m., New York City time, on the Business Day immediately preceding the
Purchase Date, as described below. The proceeds of any sale of any remarketed
shares of a Series of VRDP Shares by the Remarketing Agent relating to tendered
shares of such Series of VRDP Shares shall be used by the Tender and Paying
Agent for the purchase of the tendered shares of such Series of VRDP Shares at
the Purchase Price, and the terms of the sale will provide for the wire
transfer of such Purchase Price by the Remarketing Agent to be received by the
Tender and Paying Agent no later than 11:00 a.m., New York City time, on the
related Purchase Date for payment to the Agent Member of the Beneficial Owner,
in the case of an Optional Tender, or Holder, in the case of a Mandatory
Tender, tendering shares of such Series of VRDP Shares for sale through the
Securities Depository in immediately available funds against delivery of the
tendered shares of such Series of VRDP Shares to the Tender and Paying Agent
through the Securities Depository, the delivery of such VRDP Shares to the
Tender and Paying Agent through the Securities Depository no later than 2:00
p.m., New York City time, on the related Purchase Date and the re-delivery of
such shares of such Series of VRDP Shares by means of “FREE” delivery through
the Securities Depository to the Remarketing Agent for delivery to the
purchaser’s Agent Member through the Securities Depository by 3:00 p.m., New
York City time, on the related Purchase Date.
(b)
By 2:00 p.m., New York City time,
on the Business Day immediately preceding each Purchase Date, the Remarketing
Agent shall deliver a notice, in the form attached as Annex I to the
Remarketing Agreement, to the Tender and Paying Agent and the Liquidity
Provider (and, at the direction of the Corporation, concurrently therewith or
as promptly as practicable thereafter, to each Beneficial Owner or Holder tendering
VRDP Shares that are the subject of such notice) (a “Remarketing Notice”), by Electronic
Means, that sets forth the number of shares of the Series of VRDP Shares, if
any, that it successfully remarketed for purchase on such Purchase Date and the
aggregate Purchase Price of such sold shares of the Series of VRDP Shares and
the number of shares of such Series of VRDP Shares, if any, not successfully
remarketed for purchase on such Purchase Date and the aggregate Purchase Price
of such unsold shares of the Series of VRDP Shares to be paid by the Liquidity
Provider. If the Remarketing Notice states that the Remarketing Agent has not
successfully remarketed all of the shares of the Series of VRDP Shares to be
purchased on such Purchase Date, the Tender and Paying Agent shall promptly,
and in any event not later than 4:00 p.m., New York City time, on such Business
Day, deliver by Electronic Means to the Liquidity Provider (with a copy to the
Corporation) a Preliminary Notice of Purchase that, subject to delivery of the
Final Notice of Purchase on the Purchase Date described below, provides for the
purchase by the Liquidity Provider of the number of such shares of the Series
of VRDP Shares that the Remarketing Agent stated in the Remarketing Notice as
not having been successfully remarketed, including the aggregate Purchase Price
of such shares of the Series of VRDP Shares, as calculated by the Remarketing
Agent. If the Remarketing Notice states that the Remarketing Agent has not
successfully remarketed all of the shares of the Series of VRDP Shares to be
purchased on such Purchase Date (or if proceeds from a Remarketing for any
tendered shares of the Series of VRDP Shares have not been received for any
reason by the Tender and Paying Agent by 11:00 a.m., New York City time, on the
Purchase Date), the Tender and Paying Agent shall deliver by Electronic Means
to the Liquidity Provider (with a copy to the Corporation) by 12:00 noon, New
York City time, on such Purchase Date a Final
Notice of Purchase that states the number of shares of
the Series of VRDP Shares required to be purchased by the Liquidity Provider.
For purposes of the Final Notice of Purchase, any tendered shares of the Series
of VRDP Shares for which proceeds from a Remarketing have not been received for
any reason by the Tender and Paying Agent by 11:00 a.m., New York City time, on
the Purchase Date (other than shares of a Series of 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 shares of the
Series of VRDP Shares stated in the Final Notice of Purchase delivered to the
Liquidity Provider as being required to be purchased by the Liquidity Provider.
(c)
The Liquidity Provider shall, no
later than 2:00 p.m., New York City time, on a Purchase Date for any shares of
a Series of VRDP Shares, wire transfer the aggregate Purchase Price of all
shares of such Series of VRDP Shares in respect of which Final Notices of
Purchase have been delivered to it for purchase of shares of such Series of
VRDP Shares on such date, as follows, (i) in the case of a Final Notice of Purchase
delivered by the Tender and Paying Agent, by wire transfer, in immediately
available funds, to the account of the Tender and Paying Agent specified by the
Tender and Paying Agent in any such Final Notice of Purchase; and (ii) in the
event there is no Tender and Paying Agent or for any reason the Tender and
Paying Agent does not perform its obligations under the VRDP Shares Purchase
Agreement and the Liquidity Provider has received a Remarketing Notice that
such shares of such Series of VRDP Shares have not been the subject of an
agreement of sale in a Remarketing and has received written notice from the
Corporation that there is no Tender and Paying Agent or that the Tender and
Paying Agent does not intend to perform its obligations under the VRDP Shares Purchase
Agreement, in the case of a Final Notice of Purchase delivered by a Beneficial
Owner or its Agent Member, in the case of an Optional Tender, or by a Holder,
in the case of a Mandatory Tender, by payment against delivery of the shares of
such Series of VRDP Shares that are the subject of any such Final Notice of
Purchase, through means of the Securities Depository in the case of shares of
such Series of VRDP Shares in the form of global securities.
(d)
Upon receipt by the Tender and Paying
Agent from the Beneficial Owner or its Agent Member, in the case of an Optional
Tender, or by the Holder, in the case of a Mandatory Tender, of tendered shares
of a Series of VRDP Shares and the payment by the Tender and Paying Agent to
such Beneficial Owner or its Agent Member, or such Holder as the case may be,
of the Purchase Price therefor on the applicable Purchase Date, the Tender and
Paying Agent shall deliver to the Liquidity Provider, by means of “FREE”
delivery through the system of the Securities Depository, shares of such Series
of VRDP Shares in satisfaction of the Liquidity Provider’s Purchase Obligation
on such Purchase Date. Any funds paid by the Liquidity Provider and held in the
account of the Tender and Paying Agent for the payment of the Purchase Price
shall be held in trust (i) in the case of an Optional Tender, on the Purchase
Date, for the benefit of the tendering Beneficial Owners or their Agent Members
until the shares of the Series of VRDP Shares are delivered by the tendering
Beneficial Owners or their Agent Members and, after the Purchase Date, for the
benefit of the Liquidity Provider, for payment of the Purchase Price upon
delivery of the shares of such Series of VRDP Shares or, with respect to shares
of such Series of VRDP Shares that are not delivered, for return to the
Liquidity Provider upon its request and (ii) in the case of a Mandatory Tender,
for the benefit of the tendering Holders until delivery of the shares of such
Series of VRDP Shares by the tendering Holders against payment therefor. Any
funds paid by the Remarketing Agent and held in an account of the Tender and
Paying Agent for the payment of the Purchase Price in connection with a
Remarketing shall be held in trust (i) in the case of an Optional Tender, on the
Purchase Date, for the benefit of the tendering Beneficial Owners or their
Agent Members until the shares of the Series of VRDP Shares are delivered by
the tendering Beneficial Owners or their Agent Members and, after the Purchase
Date, for the benefit of the Remarketing Agent on account of purchasers
purchasing in a Remarketing or for the Remarketing Agent’s account to the
extent it has advanced the Purchase Price of any shares of such Series of VRDP
Shares on behalf of one or more purchasers, as applicable, for
payment of the Purchase
Price upon delivery of the shares of such Series of VRDP Shares or, with
respect to shares of such Series of VRDP Shares that are not delivered, for
return to the Remarketing Agent on account of purchasers purchasing in a Remarketing
or for the Remarketing Agent’s account to the extent it has advanced the
Purchase Price of any shares of such Series of VRDP Shares on behalf of one or
more purchasers, as applicable, upon the Remarketing Agent’s request and (ii)
in the case of a Mandatory Tender, for the benefit of the tendering Holders
until delivery of the shares of the Series of VRDP Shares by the tendering
Holders against payment therefor. Upon receipt of the shares of a Series of
VRDP Shares from the tendering Beneficial Owners or their Agent Members, in the
case of an Optional Tender, or from the tendering Holders, in the case of a
Mandatory Tender, by the Tender and Paying Agent, the Tender and Paying Agent
shall pay, subject to receipt of the Purchase Price by the Tender and Paying
Agent in the form of remarketing proceeds from the Remarketing Agent, with
respect to the shares of such Series of VRDP Shares remarketed by the
Remarketing Agent, or in the form of payment pursuant to the VRDP Shares
Purchase Agreement from the Liquidity Provider, with respect to the shares of
such Series of VRDP Shares subject to purchase pursuant to the Purchase
Obligation, the Purchase Price for shares of such Series of VRDP Shares to such
tendering Beneficial Owner, Agent Member or Holder, as the case may be. In
accordance with and subject to the foregoing, the Tender and Paying Agent shall
effect any such payment on the applicable Purchase Date.
(e)
Except as otherwise expressly
provided for herein, the purchase and delivery of tendered shares of a Series
of VRDP Shares in the form of global securities and their Remarketing will be
accomplished in accordance with the applicable procedures of the Securities
Depository.
(f)
In connection with the allocation
of shares of a Series of VRDP Shares tendered for Remarketing by the Liquidity
Provider and any other Holder or Beneficial Owner of shares of such Series of
VRDP Shares in any Remarketing, the Remarketing Agent shall allocate those
shares of such Series of VRDP Shares previously acquired by the Liquidity
Provider pursuant to its Purchase Obligation first to any purchasers in a
Remarketing (such allocation coming first from those shares of such Series of
VRDP Shares acquired earliest by the Liquidity Provider).
(g)
The Remarketing Agent and the
Tender and Paying Agent each shall use commercially reasonable efforts to meet
the timing requirements set forth above. Subject to the VRDP Shares Remarketing
Agreement, the Remarketing Agent may, in its sole discretion, modify the
settlement procedures set forth above with respect to any Remarketing upon ten
(10) days’ prior written notice to the Corporation, the Liquidity Provider and
the Tender and Paying Agent, provided any such modification does not adversely
affect the Holders, the Beneficial Owners, the Tender and Paying Agent, the
Liquidity Provider or the Corporation. The Remarketing Agent may sell shares of
a Series of VRDP Shares for its own account outside of a Remarketing at a price
other than the Purchase Price.
(h)
At any time that no Purchase
Obligation is in effect (or with respect to a Remarketing of shares of a Series
of VRDP Shares held by the Liquidity Provider as to which any then-effective
Purchase Obligation by a successor liquidity provider is inapplicable), any
shares of a Series of VRDP Shares unsold in a Remarketing will be returned to
the relevant tendering Beneficial Owners or their Agent Members, or the
relevant tendering Holders, as the case may be, by the Tender and Paying Agent. For purposes of the parenthetical in the preceding
sentence, the Purchase Obligation of a successor liquidity provider shall be
treated as inapplicable to shares of a Series of VRDP Shares held by the
Liquidity Provider unless and until either the Corporation or the Liquidity
Provider shall have given the Tender and Paying Agent written notice that such
Purchase Obligation is so applicable.
3.
Determination of Applicable Rate.
(a)
The Applicable Rate shall be
determined by the Remarketing Agent on and as of each Rate Determination Date
as the lowest rate under then-existing market conditions that in the
Remarketing Agent’s sole judgment would result in the shares of the Series of
VRDP Shares on the first (1st) day of the Subsequent Rate Period next
succeeding the Rate Determination Date having a market value equal to the Liquidation
Preference thereof (plus accumulated but unpaid dividends thereon,
whether or not earned or declared). Such determination shall be conclusive and
binding upon the interested parties. The Applicable Rate shall not be more than
the Maximum Rate.
(b)
The Remarketing Agent shall
establish the Applicable Rate by 5:00 p.m., New York City time, on each Rate
Determination Date to the nearest one-thousandth (0.001) of one percent per
annum for the Subsequent Rate Period. The Applicable Rate shall be in
effect from and including the first (1st) day following such Rate Determination
Date to and including the following Rate Determination Date. The Remarketing
Agent shall make the Applicable Rate available after 5:00 p.m., New York City
time on the Rate Determination Date by Electronic Means to the Corporation, the
Tender and Paying Agent and the Liquidity Provider and post the Applicable Rate
on Bloomberg on such Rate Determination Date.
(c)
In the event that the Remarketing
Agent establishes the Maximum Rate as the Applicable Rate for a Subsequent Rate
Period, the Remarketing Agent shall notify the Corporation and the Tender and
Paying Agent of the Maximum Rate by e-mail transmission or facsimile
transmission after 5:00 P.M., New York City time, on each Rate Determination
Date. The Corporation will require in the Tender and Paying Agent Agreement
that the Tender and Paying Agent will notify the Liquidity Provider and the
Holders of VRDP Shares by first-class mail, postage prepaid (in the case of
physical shares), or by Electronic Means (in the case of VRDP Shares in the
form of global securities) that the Applicable Rate for the Subsequent Rate
Period is the Maximum Rate.
(d)
In the event the Remarketing Agent
does not or is unable to determine the Applicable Rate, or if there is no
Remarketing Agent, the Applicable Rate shall be the Maximum Rate.
(e)
In the event of a Failed
Remarketing Condition, the Applicable Rate as of the close of business on the
day the Failed Remarketing Condition first occurs will be adjusted to the
Maximum Rate (with the Applicable Spread subject to adjustment as set forth in
the definition of Applicable Spread) and the Maximum Rate will continue to be
the Applicable Rate (i) until the first (1st) day of the next succeeding
Subsequent Rate Period after a Failed Remarketing Condition no longer exists in
the case of a Minimum Rate Period or a Special Rate Period of twenty-eight (28)
Rate Period Days or fewer, and (ii) until the first (1st) day of the next
succeeding Dividend Period after the Failed Remarketing Condition no longer
exists in the case of a Special Rate Period of greater than twenty-eight (28)
Rate Period Days.
4.
Failed Remarketing Condition.
In
the event of a Failed Remarketing Condition, pursuant to the Tender and Paying
Agent Agreement, the Tender and Paying Agent shall promptly provide notice of a
Failed Remarketing Condition, but in any event within two (2) Business Days of
receipt by the Tender and Paying Agent of notice from the Corporation of the
occurrence of such Failed Remarketing Condition, by Electronic Means (or by
first-class mail, postage prepaid, in the case where VRDP Shares are in
physical form outside the book-entry system of the Securities Depository) to
the Holders (with a copy to the Corporation).
5.
Purchase of VRDP Shares by Remarketing
Agent.
The Remarketing Agent
in its sole discretion may purchase for its own account shares of a Series of
VRDP Shares in a Remarketing; however, the Remarketing Agent shall not be
obligated to purchase any shares of a Series of VRDP Shares that would
otherwise remain unsold in a Remarketing. None of the
Corporation, the Tender
and Paying Agent or any Remarketing Agent shall be obligated in any case to
provide funds to make payment to a Beneficial Owner or its Agent Member or a
Holder upon such Beneficial Owner’s or Holder’s tender of its shares of a
Series of VRDP Shares in a Remarketing unless, in each case, such shares of
such Series of VRDP Shares were acquired for the account of the Corporation,
the Tender and Paying Agent or the Remarketing Agent, as applicable.
6.
Notification of Allocations.
Whenever the
Corporation intends to include any net capital gains or ordinary income taxable
for regular federal income tax purposes in any dividend on shares of a Series
of VRDP Shares, the Corporation shall notify the Remarketing Agent and Tender
and Paying Agent of the amount to be so included (i) not later than fourteen
(14) calendar days preceding the first Rate Determination Date on which the
Applicable Rate for such dividend is to be established, and (ii) for any
successive Rate Determination Date on which the Applicable Rate for such
dividend is to be established, not later than the close of business on the
immediately preceding Rate Determination Date. Whenever such advance notice is
received from the Corporation, the Tender and Paying Agent will notify each
Holder and the Remarketing Agent will promptly notify each potential Beneficial
Owner or its Agent Member. With respect to a Rate Period for which such advance
notice was given and whose dividends are comprised partly of such ordinary
income or capital gains and partly of exempt interest income, the different
types of income will be paid in the same relative proportions for each day
during the Rate Period. The Corporation may also include such ordinary income
or capital gains in a dividend on shares of a Series of VRDP Shares without
giving advance notice thereof if it increases the dividends by an additional
amount calculated as if such income was a Taxable Allocation and the additional
amount was a Gross-up Payment, provided the Corporation will notify the Tender
and Paying Agent of the additional amounts to be included in such dividend at
least five (5) Business Days prior to the applicable Dividend Payment Date.
7.
Transfers.
(a)
Unless otherwise permitted by the
Corporation, a Beneficial Owner or Holder may sell, transfer or otherwise
dispose of shares of a Series of VRDP Shares only in whole shares and only
pursuant to a Remarketing in accordance with the Remarketing Procedures set
forth in Part II of these Articles Supplementary, provided, however,
that (a) a sale, transfer or other disposition of shares of a Series of 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
Corporation) to whom such transfer is made shall advise the Remarketing Agent.
The Corporation has not registered the shares of any Series of VRDP Shares
under the Securities Act. Accordingly, the shares of each Series of VRDP Shares
are subject to restrictions on transferability and resale and may only be
purchased by and sold to “qualified institutional buyers” (as defined in Rule
144A under the Securities Act or any successor provision) in accordance with
Rule 144A under the Securities Act or any successor provision or any exemption
from registration available and otherwise in accordance with the legend set
forth on the face of the share certificate for the share of a Series of VRDP
Shares.
(b)
The Investment Adviser, affiliated
persons of the Investment Adviser (as defined in Section 2(a)(3) of the
1940 Act) (other than the Corporation, in the case of a purchase of shares of a
Series of VRDP Shares which are to be cancelled within ten (10) days of
purchase by the Corporation), and Persons over which the Investment Adviser, or
affiliated persons of the Investment Adviser (as defined in Section 2(a)(3)
of the 1940 Act), exercise discretionary investment or voting authority (other
than the Corporation, in the case of a purchase of shares of a Series of VRDP
Shares which are to be cancelled within ten (10) days of purchase by the
Corporation), are not permitted to purchase shares of a
Series of VRDP Shares
without the prior written consent of the Liquidity Provider, and any such
purchases shall be void ab initio; provided, that, without regard
to the preceding requirements, purchases of shares of a Series of VRDP Shares
may be made by broker-dealers that are affiliated persons of the Investment
Adviser in riskless principal transactions with respect to such purchases of
shares of a Series of VRDP Shares.
(c)
(c) If at any time the
Corporation is not furnishing information to the SEC pursuant to Section 13
or 15(d) of the Exchange Act, in order to preserve the exemption for resales
and transfers under Rule 144A, the Corporation shall furnish, or cause to be
furnished, to Holders of shares of a Series of VRDP Shares and prospective
purchasers of shares of a Series of VRDP Shares, upon request, information with
respect to the Corporation satisfying the requirements of subsection (d)(4) of
Rule 144A.
8.
Global Certificate.
Prior to the commencement
of a Voting Period, (i) all of the shares of a Series of VRDP Shares
Outstanding from time to time shall be represented by one or more global
certificates registered in the name of the Securities Depository or its nominee
and countersigned by the Tender and Paying Agent and (ii) no registration of
transfer of shares of a Series of VRDP Shares shall be made on the books of the
Corporation to any Person other than the Securities Depository or its nominee.
The foregoing restriction on registration of transfer shall be conspicuously
noted on the face or back of the certificates of VRDP Shares in such a manner
as to comply with the requirements of Section 2-211 of the Maryland
General Corporation Law and Section 8-204 of the Uniform Commercial Code
as in effect in the State of Maryland, or any successor provisions.
THIRD: The amendment to the charter of the Corporation as set forth above in
these Articles of Amendment has been duly advised by the Board of Directors of
the Corporation and approved by the stockholders of the Corporation as and to
the extent required by law and in accordance with the charter of the
Corporation.
FOURTH: The authorized stock of the Corporation has not been
increased by these Articles of Amendment.
FIFTH: These Articles of Amendment shall be effective as of June 19, 2019.
SIXTH: As amended hereby, the charter of the Corporation shall remain in
full force and effect.
SEVENTH: The undersigned acknowledges these Articles of
Amendment to be the act of the Corporation and, as to all matter or facts
required to be verified under oath, the undersigned acknowledges that to the
best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties of
perjury.
[Remainder of the Page Intentionally Blank]
IN WITNESS WHEREOF, these
Articles of Amendment are hereby executed in the name of the Corporation on
June 17, 2019.
ATTEST: BLACKROCK
MUNIYIELD CALIFORNIA QUALITY FUND, INC.
By: /s/ Janey Ahn By:
/s/ Jonathan Diorio (SEAL)
Name: Janey Ahn Name:
Jonathan Diorio
Title: Secretary Title:
Vice President