BLACKROCK MASSACHUSETTS TAX-EXEMPT TRUST
CERTIFICATE
The undersigned hereby certifies that she is the Secretary of BlackRock Massachusetts Tax-Exempt Trust, an unincorporated business trust organized and existing under the laws of The Commonwealth of Massachusetts (the “Trust”), and that annexed hereto is the Amended and Restated Certificate of Designation Establishing and Fixing the Rights and Preferences of Series W-7 Variable Rate Demand Preferred Shares of the Trust, which Amended and Restated Certificate of Designation has been adopted by the Board of Trustees of the Trust in a manner provided in the Trust’s Declaration of Trust.
Executed this 17 day of June, 2019
By: /s/ Janey Ahn
Name: Janey Ahn
Title: Secretary
31755835.1
BLACKROCK MASSACHUSETTS TAX-EXEMPT TRUST
AMENDED AND RESTATED CERTIFICATE OF DESIGNATION
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES
OF
VARIABLE RATE DEMAND PREFERRED SHARES
WHEREAS the Board of Trustees of BlackRock Massachusetts Tax Exempt Trust (the “Trust”), is expressly empowered pursuant to Section 4.1 of the Charter to authorize the issuance of preferred shares of the Trust in one or more series, with such preferences, powers, restrictions, limitations or qualifications as determined by the Board of Trustees and as set forth in the resolution or resolutions providing for the issuance of such preferred shares;
WHEREAS the Board of Trustees has heretofore determined that it is in the best interest of the Trust to issue one series of such preferred shares;
WHEREAS, the Board of Trustees has authorized the issuance of preferred shares, par value $0.01 per share, designated Variable Rate Demand Preferred Shares (“VRDP Shares”), such VRDP Shares to be issued in one or more series, as designated and authorized by the Board of Trustees or a duly authorized committee thereof from time to time (each series of VRDP Shares that may be authorized and issued, a “Series”);
WHEREAS, 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 Certificate of Designation Establishing and Fixing the Rights and Preferences of Variable Rate Demand Preferred Shares effective June 13, 2012 (the “Original Certificate”);
WHEREAS, the Board of Trustees has by resolution authorized the amendment and restatement of the Original Certificate effective as of the Effective Date (as defined below);
WHEREAS, the current Holders (as defined below) of the Series W-7 VRDP Shares (as defined below) have consented to this Amended and Restated Certificate of Designation Establishing and Fixing the Rights and Preferences of Variable Rate Demand Preferred Shares; and
NOW THEREFORE, 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, effective as of the Effective Date, are as follows or as set forth in an amendment hereto (each such Series being referred to herein as a “Series of VRDP Shares”):
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DESIGNATION
Series W-7: A series of 185 preferred shares of beneficial interest, par value $0.01 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 Trustees of the Trust or pursuant to their delegated authority; have such preferences, voting powers, limitations as to dividends, qualifications and terms and conditions of redemption, in addition to those required by applicable law or as set forth in the Charter, as set forth in Parts I and II of this Certificate of Designation and in any applicable Notice of Special Rate Period. The Series W-7 VRDP Shares shall constitute a separate series of preferred shares of beneficial interest in the Trust 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 this Certificate of Designation 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 and the Rules and Regulations thereunder, as amended.
“Additional Amount” shall have the meaning specified in paragraph (e)(i)(C) of Section 2 of Part I of this Certificate of Designation.
“Affected Series” shall have the meaning specified in paragraph (c)(i) of Section 5 of Part I of this Certificate of Designation.
“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 Trust.
“Applicable Base Rate” means (i) with respect to a Rate Period of fewer than forty-nine (49) days, the greater of (a) the SIFMA Municipal Swap Index and (b) the LIBOR Rate, and (ii) with respect to a Rate Period of forty-nine (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 this Certificate of Designation or in the definition of “Maximum Rate,” as applicable.
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“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 this Certificate of Designation.
“Applicable Spread” means, in connection with the Maximum Rate for any Rate Period (and subject to adjustment as described in the definition of Maximum Rate) (i) when there is not a Failed Remarketing Condition, 200 basis points (2.00%), and (ii) while a Failed Remarketing Condition has occurred or is continuing, 200 basis points (2.00%) (up to 59 days of a continued Failed Remarketing Condition), 225 basis points (2.25%) (sixty (60) days but fewer than ninety (90) days of a continued Failed Remarketing Condition), 250 basis points (2.50%) (ninety (90) days but fewer than 120 days of a continued Failed Remarketing Condition), 275 basis points (2.75%) (120 days but fewer than 150 days of a continued Failed Remarketing Condition), 300 basis points (3.00%) (150 days but fewer than 180 days of a continued Failed Remarketing Condition), and 400 basis points (4.00%) (180 days or more of a continued Failed Remarketing Condition); provided that, if at any time when the Applicable Spread is 225 basis points (2.25%), 250 basis points (2.50%), 275 basis points (2.75%), 300 basis points (3.00%) or 400 basis points (4.00%) and the Failed Remarketing Condition no longer exists due to the successful remarketing of all Purchased VRDP Shares, then such Applicable Spread of 225 basis points (2.25%), 250 basis points (2.50%), 275 basis points (2.75%), 300 basis points (3.00%) or 400 basis points (4.00%) will continue to be the Applicable Spread in connection with determining the Maximum Rate in effect for each Rate Period commencing with the first Subsequent Rate Period after the Failed Remarketing Condition no longer exists through and including the first Subsequent Rate Period ending on or after the 45th day after the day the Failed Remarketing Condition no longer exists; provided, further, that (i) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 225 basis points (2.25%), the date such new Failed Remarketing Condition occurs will be deemed to be the 60th day of a continued Failed Remarketing Condition, (ii) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 250 basis points (2.50%), the date such new Failed Remarketing Condition occurs will be deemed to be the 90th day of a continued Failed Remarketing Condition, (iii) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 275 basis points (2.75%), the date such new Failed Remarketing Condition occurs will be deemed to be the 120th day of a continued Failed Remarketing Condition, (iv) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 300 basis points (3.00%), the date such new Failed Remarketing Condition occurs will be deemed to be the 150th day of a continued Failed Remarketing Condition and (v) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 400 basis points (4.00%), the date such new Failed Remarketing Condition occurs will be deemed to be the 180th day of a continued Failed Remarketing Condition, in each case, solely for purposes of determining the Applicable Spread.
“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).
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“Board” means the Board of Trustees of the Trust 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.
“Certificate of Designation” means this Amended and Restated Certificate of Designation Establishing and Fixing the Rights and Preferences of VRDP Shares.
“Charter” means the Agreement and Declaration of Trust, as amended and supplemented (including by this Certificate of Designation), of the Trust on file with the Secretary of The Commonwealth of Massachusetts.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Common Shares” means the common shares of beneficial interest, par value $0.01 per share, in the Trust. “Cure Date” means the VRDP Shares Basic Maintenance Cure Date, the Minimum VRDP Shares Asset Coverage Cure Date, or the Effective Leverage Ratio 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 Trust 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 Trust 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:
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“Discounted Value,” as of any Valuation Date, shall have the meaning set forth in the respective Rating Agency Guidelines.
“Dividend Payment Date,” except as otherwise provided in paragraph (d) of Section 2 of Part I of this Certificate of Designation, 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” shall have the meaning set forth in the Fee Agreement.
“Effective Leverage Ratio Cure Period” shall have the meaning set forth in the Fee Agreement.
“Effective Leverage Ratio Cure Date” shall mean the next Business Day following the last day of the Effective Leverage Ratio Cure Period.
“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 the Tender and Paying Agent Agreement or as specified in the related notice.
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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Extraordinary Corporate Event” means as to the Liquidity Provider, (i) the consolidation or amalgamation with, or merger with and into, or the transfer of all or substantially all of the Liquidity Provider’s assets to, another entity, or (ii) the dissolution, for any reason, of the Liquidity Provider other than in connection with the consolidation, amalgamation with, or merger with and into another entity or the transfer of all or substantially all of the Liquidity Provider’s assets; provided, however, that with respect to (i) above, an Extraordinary Corporate Event does not include any of the listed occurrences where (x) the surviving entity, or transferee of all or substantially all of the Liquidity Provider’s assets, (a) assumes or is bound by all of the obligations of the Liquidity Provider under the terms of the VRDP Shares Purchase Agreement and (b) has short-term debt ratings in one of the two highest rating categories from the Requisite NRSROs and (y) the Liquidity Provider has provided notice in writing to the Trust confirming the information described in (x) at least 10 days prior to the scheduled date of the applicable listed occurrence in (i) above.
“Failed Remarketing Condition” means a Failed Remarketing Condition-Purchased VRDP Shares or a Failed Remarketing Condition-Unpurchased VRDP Shares.
“Failed Remarketing Condition-Purchased VRDP Shares” means that the Liquidity Provider acquires and continues to be the beneficial owner for federal income tax purposes of any shares of a Series of VRDP Shares in connection with purchases made pursuant to the Purchase Obligation (whether as a result of an unsuccessful Remarketing or a Mandatory Purchase) on any Purchase Date, including shares of a Series of VRDP Shares that the Liquidity Provider continues to be the beneficial owner of for federal income tax purposes after the expiration or termination of the VRDP Shares Purchase Agreement.
“Failed Remarketing Condition-Purchased VRDP Shares Redemption” means redemption by the Trust, 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 Trustees for redemption, of shares of a Series of VRDP Shares that the Liquidity Provider shall have acquired pursuant to the Purchase Obligation and continued to be the beneficial owner of for federal income tax purposes for a continuous period of six (6) months during which such VRDP Shares are tendered for Remarketing on each Business Day in accordance with the Related Documents but cannot be successfully remarketed (i.e., a Failed Remarketing Condition-Purchased VRDP Shares shall have occurred and be continuing for such period of time with respect to such VRDP Shares), determined by the Trust on a first-in, first-out basis, in accordance with and subject to the provisions of the Fee Agreement and this Certificate of Designation.
“Failed Remarketing Condition-Unpurchased VRDP Shares” means that a Beneficial Owner (other than the Liquidity Provider or its affiliates) continues to hold shares of a Series of VRDP Shares, that were subject to a Tender in accordance with the VRDP Shares Purchase Agreement, after any Purchase Date as a result of the failure by the Liquidity Provider for any reason to purchase such VRDP Shares pursuant to the Purchase Obligation (whether as a result of an unsuccessful Remarketing or a Mandatory Purchase) (“Unpurchased VRDP Shares”), until such time as all Outstanding Unpurchased VRDP Shares are (i) successfully remarketed pursuant to a Remarketing, (ii) purchased by the Liquidity Provider pursuant to the Purchase Obligation, or (iii) if not successfully remarketed pursuant to a Remarketing or purchased by the Liquidity Provider pursuant to the Purchase Obligation, the subject of a properly tendered Notice of Revocation (or any combination of the foregoing); and any Unpurchased VRDP Shares shall be deemed tendered for Remarketing until the earliest to occur of the foregoing events (i), (ii) or (iii) with respect to such Unpurchased VRDP Shares.
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“Failure to Deposit” means, with respect to shares of a Series of VRDP Shares, a failure by the Trust 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 this Certificate of Designation; provided, however, that the foregoing clause (B) shall not apply to the Trust’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, by and between the Trust and the initial Liquidity Provider, as amended, modified or supplemented from time to time or any similar agreement with a successor Liquidity Provider.
“Final Notice of Purchase” means, in connection with an Optional Tender or a Mandatory Tender, a Notice of Purchase delivered by the Tender and Paying Agent to the Liquidity Provider (or directly to the Liquidity Provider by Beneficial Owners or their Agent Members, in the case of an Optional Tender, or Holders, in the case of a Mandatory Tender, if there is no Tender and Paying Agent or for any reason the Tender and Paying Agent does not perform its obligations) on the Purchase Date indicating the number of shares of a Series of VRDP Shares to be purchased on such date pursuant to the Purchase Obligation, or, in connection with a Mandatory Purchase, the Mandatory Purchase Notice delivered by the Trust or the Tender and Paying Agent on behalf of the Trust.
“Fitch” means Fitch Ratings and its successors.
“Fitch Eligible Assets” means assets of the Trust set forth in the Fitch Guidelines as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with Fitch’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
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“Fitch Guidelines” means the guidelines applicable to Fitch’s current long-term preferred share ratings of the VRDP Shares, provided by Fitch in connection with Fitch’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request to the Trust (a copy of which is available on request to the Trust), 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 Trust or such earlier date as the Trust may elect.
“Fitch Provisions” means Sections 7, 8(c)(B) and 9 of Part I of this Certificate of Designation with respect to Fitch, and any other provisions hereof with respect to Fitch’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust, including any provisions with respect to obtaining and maintaining a long-term preferred share rating on VRDP Shares from Fitch. The Trust 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 Trust.
“Gross-up Payment” means payment to a Beneficial Owner of an amount which, when taken together with the aggregate amount of Taxable Allocations made to such Beneficial Owner to which such Gross-up Payment relates, would cause such Beneficial Owner’s dividends in dollars (after giving effect to regular federal income tax consequences) from the aggregate of such Taxable Allocations and the related Gross-up Payment to be equal to the dollar amount of the dividends which would have been received by such Beneficial Owner if the amount of such aggregate Taxable Allocations would have been excludable from the gross income of such Beneficial Owner. Such Gross-up Payment shall be calculated (i) without consideration being given to the time value of money; (ii) assuming that no Beneficial Owner of shares of a Series of VRDP Shares is subject to the federal alternative minimum tax with respect to dividends received from the Trust; (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 Massachusetts 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 regular federal and Massachusetts 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 Trust 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, June 20, 2012, the next succeeding Wednesday; provided, that if the Initial Rate Period has been designated a Special Rate Period, then such Initial Rate Period shall end on the last day of such Special Rate Period.
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“Investment Adviser” means BlackRock Advisors, LLC, or any successor company or entity.
“LIBOR Dealer” means such LIBOR dealer or dealers as the Trust 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 Trust’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 Trust’s approval) that is representative of a single transaction in such market at such time by reference to the principal London offices of leading banks in the London interbank market; provided, however, that if one of the LIBOR Dealers does not quote a rate required to determine the LIBOR Rate, the LIBOR Rate will be determined on the basis of the quotation or quotations furnished by any Substitute LIBOR Dealer or Substitute LIBOR Dealers selected by the Trust to provide such rate or rates not being supplied by the LIBOR Dealer; provided further, that if the LIBOR Dealer and Substitute LIBOR Dealers are required but unable to determine a rate in accordance with at least one of the procedures provided above, 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.
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“Liquidation Preference,” with respect to a given number of Series W-7 VRDP Shares, means $100,000 times that number.
“Liquidity Account” shall have the meaning specified in paragraph (b)(ii)(B) of Section 10 of Part I of this Certificate of Designation.
“Liquidity Account Investments” means Deposit Securities or any other security or investment owned by the Trust that is rated at least investment grade 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 Trust’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 Trust pursuant to the Tender and Paying Agent Agreement, for termination of the VRDP Shares Purchase Agreement upon the occurrence of a Liquidity Provider Ratings Event, which date shall be not less than sixteen (16) days nor more than thirty (30) days following the date on which such Liquidity Provider Ratings Event first occurs.
“Liquidity Requirement” shall have the meaning specified in paragraph (b)(ii)(C) of Section 10 of Part I of this Certificate of Designation.
“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 determined in accordance with this Certificate of Designation 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 Trust shall not have obtained and delivered to the Tender and Paying Agent an Alternate VRDP Shares Purchase Agreement with a termination date not earlier than 180 days from the Scheduled Termination Date of the VRDP Shares Purchase Agreement being replaced, or (ii) in connection with the termination of the VRDP Shares Purchase Agreement due to a Liquidity Provider Ratings Event or Related Party Termination Event, by the fifteenth day (15th) prior to the Liquidity Provider Ratings Event Termination Date or Related Party Termination Date, as the case may be, the Trust shall not have obtained and delivered to the Tender and Paying Agent an Alternate VRDP Shares Purchase Agreement with a termination date not earlier than 180 days from the Liquidity Provider Ratings Event Termination Date or Related Party Termination Date, as the case may be, of the VRDP Shares Purchase Agreement being replaced. The Mandatory Purchase Event shall be deemed to occur on such fifteenth (15th) day prior to any Scheduled Termination Date, Liquidity Provider Ratings Event Termination Date or Related Party Termination Date, as the case may be.
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“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 Trust or the Tender and Paying Agent on behalf of the Trust to the Holders and the Liquidity Provider in accordance with the VRDP Shares Purchase Agreement and specifying a Mandatory Purchase Date.
“Mandatory Tender,” with respect to a Mandatory Tender Event, means the mandatory tender of all shares of a Series of VRDP Shares by Holders for Remarketing or, in the event (i) no Remarketing occurs on or before the Purchase Date or (ii) pursuant to an attempted Remarketing, shares of the Series of VRDP Shares remain unsold and the Remarketing Agent does not purchase for its own account the unsold shares of the Series of VRDP Shares tendered to the Tender and Paying Agent for Remarketing (provided, that the Remarketing Agent may seek to sell such shares of the Series of VRDP Shares in a subsequent Remarketing prior to the Purchase Date), for purchase by the Liquidity Provider at the Purchase Price pursuant to Part II of this Certificate of Designation and the VRDP Shares Purchase Agreement.
“Mandatory Tender Event” means (a) each failure by the Trust 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 Trust 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 Trust 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 Trust 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; or (f) the Trust shall have provided a Notice of Proposed Special Rate Period in accordance with this Certificate of Designation.
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“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 Trust or the Tender and Paying Agent on behalf of the Trust 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 Trust means the market value thereof determined by an independent third-party pricing service designated pursuant to the Trust’s valuation policies and procedures approved from time to time by the Board of Trustees for use in connection with the determination of the Trust’s net asset value. Market Value of any asset shall include any interest or dividends, as applicable, accrued thereon. The pricing service values portfolio securities at the mean between the quoted bid and asked price or the yield equivalent when quotations are readily available. Securities for which quotations are not readily available are valued at fair value as determined by the pricing service using methods which include consideration of: yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating; indications as to value from dealers; and general market conditions. The pricing service may employ electronic data processing techniques or a matrix system, or both, to determine valuations.
“Maximum Rate” for shares of a Series of VRDP Shares on any Rate Determination Date or in respect of the occurrence of a Failed Remarketing Condition for shares of such Series, means the Applicable Percentage of the Applicable Base Rate plus the Applicable Spread. The Maximum Rate for shares of a Series of VRDP Shares will depend on the long-term preferred share rating assigned to such Series of VRDP Shares, the length of the Rate Period and whether or not the Trust 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 Trust; utilizing the lower of the ratings of the Rating Agencies then rating VRDP Shares at the request of the Trust.
** Includes unrated, if no Rating Agency is then rating VRDP Shares at the request of the Trust.
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provided, however, that in the event the Trust 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 Massachusetts individual 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, or (ii) the maximum marginal regular federal and Massachusetts 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, whichever is greater and determined on a weighted average basis in respect of the relative amounts of ordinary income and net capital gains.
The Applicable Percentage as so determined and the Applicable Spread may be subject to upward (and, if previously adjusted upward, subsequent downward) adjustment as provided in the VRDP Shares Remarketing Agreement, with the prior written consent of the Liquidity Provider and after consultation with the Remarketing Agent; provided, that, notwithstanding any provision to the contrary in the VRDP Shares Remarketing Agreement, immediately following any such upward adjustment, the Maximum Rate is equal to or higher than the rates determined subsequent to such adjustment and the Trust would be in compliance with the Minimum VRDP Shares Asset Coverage and the VRDP Shares Basic Maintenance Amount in the Rating Agency Guidelines of the Rating Agency or Rating Agencies then rating the VRDP Shares at the request of the Trust. Furthermore, in the event of Special Rate Periods of greater than 364 days, the Maximum Rate may be subject to upward (and, if previously adjusted upward, subsequent downward) adjustment as provided in the VRDP Shares Remarketing Agreement, with the prior written consent of the Liquidity Provider and after consultation with the Remarketing Agent; provided, that, notwithstanding any provision to the contrary in the VRDP Shares Remarketing Agreement, immediately following any such upward adjustment, the Maximum Rate is equal to or higher than the rates determined subsequent to such adjustment and the Trust would be in compliance with the Minimum VRDP Shares Asset Coverage and the VRDP Shares Basic Maintenance Amount in the Rating Agency Guidelines of the Rating Agency or Rating Agencies then rating the VRDP Shares at the request of the Trust.
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 Trust 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 Massachusetts individual 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, or (ii) the maximum marginal regular federal and Massachusetts 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, whichever is greater and determined on a weighted average basis in respect of the relative amounts of ordinary income and net capital gains.
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“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 Trust 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 Trust which are shares of beneficial interest, 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 Trust to maintain the Minimum VRDP Shares Asset Coverage (as required by Section 6 of Part I of this Certificate of Designation 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. and its successors.
“Moody’s Discount Factor” means the discount factors set forth in the Moody’s Guidelines for use in calculating the Discounted Value of the Trust’s assets in connection with Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
“Moody’s Eligible Assets” means assets of the Trust set forth in the Moody’s Guidelines as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
“Moody’s Guidelines” means the guidelines applicable to Moody’s current long-term preferred share ratings of the VRDP Shares, provided by Moody’s in connection with Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust (a copy of which is available on request to the Trust), 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 Trust or such earlier date as the Trust may elect.
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“Moody’s Provisions” means Sections 7, 8(c)(B) and 9 of Part I of this Certificate of Designation with respect to Moody’s, and any other provisions hereof with respect to Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust, including any provisions hereof with respect to obtaining and maintaining a long-term preferred share rating on shares of a Series of VRDP Shares from
Moody’s. The Trust 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 Trust.
“Municipal Obligations” has the meaning specified in the Fee Agreement.
“Net Tax-Exempt Income” means the excess of the amount of interest excludable from gross income under Section 103(a) of the Code over the amounts disallowed as deductions under Sections 265 and 171(a)(2) of the Code.
“Notice of Proposed Special Rate Period” has the meaning specified in paragraph (c) of Section 4 of Part I of this Certificate of Designation.
“Notice of Purchase” means, as the context requires, a Preliminary Notice of Purchase or a Final Notice of Purchase, in each case, substantially in the form attached as Exhibit A to the VRDP Shares Purchase Agreement.
“Notice of Redemption” means any notice with respect to the redemption of shares of a Series of VRDP Shares pursuant to paragraph (c) of Section 10 of Part I of this Certificate of Designation.
“Notice of Revocation” means, in connection with the revocation by a Beneficial Owner or its Agent Member of its Notice of Tender, a notice, substantially in the form attached to the Tender and Paying Agent Agreement as Exhibit C, delivered by a Beneficial Owner or its Agent Member to the Tender and Paying Agent indicating an intention to revoke the tender of some or all of the shares of a Series of VRDP Shares for sale on a Purchase Date pursuant to paragraph (f) of Section 1 of Part II of this Certificate of Designation.
“Notice of Special Rate Period” has the meaning specified in paragraph (d)(i) of Section 4 of Part I of this Certificate of Designation.
“Notice of Tender” means, in connection with an Optional Tender, a notice, substantially in the form attached to the Tender and Paying Agent Agreement as Exhibit A, delivered by a Beneficial Owner or its Agent Member to the Tender and Paying Agent, indicating an intention to tender shares of a Series of VRDP Shares for sale on a Purchase Date pursuant to Section 1 of Part II of this Certificate of Designation.
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“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 Trust or the Liquidity Provider, including, at the date hereof, Moody’s and Fitch.
“Optional Tender” means any tender of shares of a Series of VRDP Shares by a Beneficial Owner or its Agent Member to the Tender and Paying Agent, other than a Mandatory Tender, for Remarketing or, in the event (i) no Remarketing occurs on or before the Purchase Date, or (ii) pursuant to an attempted Remarketing shares of a Series of VRDP Shares remain unsold and the Remarketing Agent does not purchase for its own account the unsold shares of a Series of VRDP Shares tendered to the Tender and Paying Agent for Remarketing (provided, that the Remarketing Agent may seek to sell such VRDP Shares in a subsequent Remarketing prior to the Purchase Date), for purchase by the Liquidity Provider pursuant to Part II of this Certificate of Designation and the VRDP Shares Purchase Agreement.
“Other Rating Agency” means each NRSRO, if any, other than Moody’s or Fitch then providing a short- term or long-term preferred share rating for the shares of a Series of VRDP Shares at the request of the Trust.
“Other Rating Agency Eligible Assets” means assets of the Trust set forth in the Other Rating Agency Guidelines as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with an Other Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
“Other Rating Agency Guidelines” means the guidelines applicable to each Other Rating Agency’s long- term preferred share ratings of the VRDP Shares, provided by an Other Rating Agency in connection with such Other Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust (a copy of which is available on request to the Trust), as may be amended from time to time, provided, however, that any such amendment will not be effective except as agreed between the Other Rating Agency and the Trust.
“Other Rating Agency Provisions” means Sections 7, 8(c)(B) and 9 of Part I of this Certificate of Designation with respect to any Other Rating Agency then rating shares of a Series of VRDP Shares at the request of the Trust, and any other provisions hereof with respect to such Other Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares, including any provisions with respect to obtaining and maintaining a long-term preferred share rating of shares of a Series of VRDP Shares from such Other Rating Agency. The Trust 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 Trust.
“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 Trust 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 Trust, (ii) any shares of such Series of VRDP Shares with respect to which the Trust 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 this Certificate of Designation, (iii) any shares of such Series of VRDP Shares as to which the Trust 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 Trust; 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 Trust.
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“Person” means and includes an individual, a partnership, a corporation, a trust, an unincorporated association, a joint venture or other entity or a government or any agency or political subdivision thereof.
“Preferred Shares” means the preferred shares of beneficial interest in the Trust, and includes the VRDP Shares.
“Preliminary Notice of Purchase” means a Notice of Purchase delivered by the Tender and Paying Agent to the Liquidity Provider (or directly to the Liquidity Provider by Beneficial Owners or their Agent Members if there is no Tender and Paying Agent or for any reason the Tender and Paying Agent does not perform its obligations) on the Business Day immediately preceding a Purchase Date indicating the number of shares of VRDP Shares to be purchased on the Purchase Date pursuant to the Purchase Obligation.
“Purchase Date,” with respect to any purchase of shares of a Series of VRDP Shares, means (i) in connection with an Optional Tender, the date specified in a Notice of Tender, which date shall be no earlier than the seventh (7th) day (or, if such day is not a Business Day, the next succeeding Business Day) following delivery to the Tender and Paying Agent of the Notice of Tender, (ii) in connection with a Mandatory Tender, the date specified in the Mandatory Tender Notice (or, if such day is not a Business Day, the next succeeding Business Day), subject to the immediately succeeding sentence below, or (iii) in connection with a Mandatory Purchase, the Mandatory Purchase Date specified in the Mandatory Purchase Notice (or, if such day is not a Business Day, the next succeeding Business Day). The Purchase Date in respect of a Mandatory Tender Event shall be not later than seven days following the date a Mandatory Tender Notice is sent to Holders by Electronic Means; provided, that: (A) the Purchase Date in connection with the failure of the Trust 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 Trust obtaining an Alternate VRDP Shares Purchase Agreement may not be later than the Business Day immediately preceding the termination of the VRDP Shares Purchase Agreement being replaced and the effective date of such Alternate VRDP Shares Purchase Agreement (which may not be later than the termination date of the VRDP Shares Purchase Agreement); and (D) the Purchase Date in connection with a Notice of Proposed Special Rate Period may not be later than the first (1st) day of such proposed Special Rate Period.
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“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 this Certificate of Designation or paragraph (b) of Section 4 of Part I of this Certificate of Designation.
“Rating Agency” means each of Fitch (if Fitch is then rating shares of a Series of VRDP Shares at the request of the Trust), Moody’s (if Moody’s is then rating shares of a Series of VRDP Shares at the request of the Trust) 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 Trust).
“Rating Agency Certificate” has the meaning specified in paragraph (b) of Section 7 of Part I of this Certificate of Designation.
“Rating Agency Eligible Assets” means assets of the Trust set forth in the Rating Agency Guidelines of a Rating Agency as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with such Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
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“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 Trust), Fitch Guidelines (if Fitch is then rating shares of a Series of VRDP Shares at the request of the Trust) 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 Trust).
“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 Trust), the Fitch Provisions (if Fitch is then rating shares of a Series of VRDP Shares at the request of the Trust) and any Other Rating Agency Provisions (if such Other Rating Agency is then rating VRDP Shares at the request of the Trust). The Trust 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 Trust.
“Redemption Date” has the meaning specified in paragraph (c) of Section 10 of Part I of this Certificate of Designation.
“Redemption Price” means the applicable redemption price specified in paragraph (a) or (b) of Section 10 of Part I of this Certificate of Designation.
“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 Trust may from time to time appoint.
“Related Documents” means this Certificate of Designation, 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 Trust 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 this Certificate of Designation.
“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.
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“Remarketing Notice” has the meaning set forth in paragraph (b) of Section 2 of Part II of this Certificate of Designation.
“Remarketing Procedures” means the procedures for conducting Remarketings set forth in Part II of this Certificate of Designation.
“Requisite NRSROs” means (i) any two NRSROs that have issued a rating with respect to a security or class of debt obligations of an issuer or (ii) if only one NRSRO has issued a rating with respect to such security or class of debt obligations of an issuer at the time a purchaser Acquires (as such term is defined from time to time in Rule 2a-7 under the 1940 Act) the security, that NRSRO.
“Scheduled Termination Date” means, with respect to a VRDP Shares Purchase Agreement for shares of a Series of VRDP Shares, 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 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 1 of Part II of this Certificate of Designation.
“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 this Certificate of Designation.
“Special Redemption Provisions” shall have the meaning specified in paragraph (a)(i) of Section 10 of Part I of this Certificate of Designation.
“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.
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“Substitute LIBOR Dealer” means any LIBOR Dealer selected by the Trust; 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 this Certificate of Designation.
“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 Trust to act in such capacity as the Trust’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, by and between the Trust 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 Trust is maintaining the VRDP Shares Basic Maintenance Amount, (i) each Friday occurring after the Date of Original Issue that is a Business Day or, for any such Friday that is not a Business Day, the immediately preceding Business Day and (ii) the Date of Original Issue.
“Voting Period” shall have the meaning specified in paragraph (b)(i) of Section 5 of Part I of this Certificate of Designation.
“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 Trust to satisfy the VRDP Shares Basic Maintenance Amount (as required by paragraph (a) of Section 7 of Part I of this Certificate of Designation) 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, by and between the Liquidity Provider and the Tender and Paying Agent, as amended, modified or supplemented, or any Alternate VRDP Shares Purchase Agreement.
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“VRDP Shares Remarketing Agreement” means the VRDP Shares remarketing agreement, dated as of June 19, 2019 by and between the Trust and the Remarketing Agent, as amended, modified or supplemented from time to time, or any similar agreement with a successor remarketing agent.
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The initial number of authorized shares constituting Series W-7 VRDP Shares is as set forth above under the title “Designation.”
The shares of each Series of VRDP Shares shall rank on a parity with each other, with shares of each other Series of VRDP Shares and with shares of any other Series of Preferred Shares as to the payment of dividends by the Trust.
The Holders of shares of any Series of VRDP Shares shall be entitled to receive, when, as and if declared by the Board of Trustees, out of legally available funds therefor in respect of shares of the Trust and otherwise 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 this Certificate of Designation and Section 6 of Part II of this Certificate of Designation), 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 Trust shall pay as a supplemental dividend out of legally available funds therefor in respect of shares of the Trust and otherwise in accordance with applicable law an Additional Amount (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.
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.
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:
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Each dividend rate determined in accordance with this paragraph (e)(i) of Section 2 of Part I of this Certificate of Designation shall be an “Applicable Rate.”
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 Trust 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 Trust 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 Trust pursuant to paragraph (c) of Section 10 of Part I of this Certificate of Designation; provided, however, that the foregoing clause (B) shall not apply to the Trust’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.
27
31755835.1
In connection with each Dividend Payment Date for shares of a Series of VRDP Shares, the Trust 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 this Certificate of Designation, or as otherwise provided for and in connection with the designation of a Special Rate Period. If an aggregate amount of funds equal to the dividends to be paid to all Holders of shares of such Series on such Dividend Payment Date are not available in New York, New York by 12:00 noon, New York City time, on the Business Day immediately preceding such Dividend Payment Date, the Tender and Paying Agent will notify the Liquidity Provider by Electronic Means of such fact prior to the close of business on such day.
All Deposit Securities paid to the Tender and Paying Agent for the payment of dividends (or for the payment of any Additional Amount) shall be held in trust for the payment of such dividends (and any such Additional Amount) 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 Trust by Electronic Means of the amount of any funds deposited with the Tender and Paying Agent by the Trust 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 Additional Amount), 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 Trust or the Liquidity Provider, as the case may be, by the Tender and Paying Agent upon request by Electronic Means of the Trust or the Liquidity Provider, as the case may be. The Trust’s obligation to pay dividends to Holders in accordance with the provisions of this Certificate of Designation shall be satisfied upon payment by the Tender and Paying Agent of such dividends to the Securities Depository on the relevant Dividend Payment Date.
28
31755835.1
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 Trust 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. In connection with any transfer of VRDP Shares, the transferee as Beneficial Owner of VRDP Shares shall be deemed to have agreed pursuant to the terms of the VRDP Shares to transfer to the transferor (or prior Holder) the right to receive from the Trust any dividends in the nature of Gross-up Payments that relate to dividends paid during the transferor’s (or prior Holder’s) holding period.
Any dividend payment made on shares of a Series of VRDP Shares that is insufficient to cover the entire amount of dividends payable shall first be credited against the earliest accumulated but unpaid dividends due with respect to such shares of such Series. Dividends in arrears for any past Dividend Period may be declared and paid on any date, without reference to any regular Dividend Payment Date, to the Holders on the record books of the Trust as of a record date to be fixed by the Board of Trustees, such record date not to exceed fifteen (15) days preceding the payment date of such 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 Trust, to the extent permitted by, and for purposes of, Section 852 of the Code.
Holders of shares of a Series of VRDP Shares shall be entitled to receive, when, as and if declared by the Board of Trustees, out of legally available funds therefor in respect of shares of the Trust and in accordance with the Charter and applicable law, dividends in an amount equal to the aggregate Gross-up Payments as follows:
29
31755835.1
The Trust, at its option, may designate any Initial Rate Period or 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 Subsequent Rate Period as a Special Rate Period shall be effective only if (A) it is permitted by applicable law and the Charter, (B) notice thereof shall have been given in accordance with paragraph (d)(i) of this Section 4, (C) no shares of such Series of VRDP Shares are owned by the Liquidity Provider as Purchased VRDP Shares pursuant to the Purchase Obligation on either the Rate Determination Date for such proposed Special Rate Period or on the first (1st) day of such Special Rate Period and full cumulative dividends and any amounts due with respect to redemptions payable prior to such date have been paid in full, and (D) if any Notice of Redemption shall have been provided by the Trust pursuant to paragraph (c) of Section 10 of Part I of this Certificate of Designation 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 Trust 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 Trust shall notify Moody’s (if Moody’s is then rating shares of such Series of VRDP Shares at the request of the Trust), Fitch (if Fitch is then rating shares of such Series of VRDP Shares at the request of the Trust) 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 Trust) in advance of the commencement of such Subsequent Rate Period that the Trust wishes to designate such Subsequent Rate Period as a Special Rate Period and shall provide Moody’s (if Moody’s is then rating shares of such Series of VRDP Shares at the request of the Trust), Fitch (if Fitch is then rating shares of such Series of VRDP Shares at the request of the Trust) 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 Trust) with such documents as they may request.
In the event the Trust wishes to designate a Rate Period as a Special Rate Period, but the day that would otherwise be the last day of such Special Rate Period is not a Wednesday that is a Business Day in the case of a Series of VRDP Shares designated as “Series W-7 Variable Rate Demand Preferred Shares”, then the Special Rate Period shall end on the next Business Day following such last day and the succeeding Rate Period will end on the following Wednesday or, if the succeeding Rate Period is a Special Rate Period, it shall end on a Wednesday as designated by the Trust, 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 Period.
30
31755835.1
If the Trust 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 Trust 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 Trust 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 Trust 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 Trust 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 as Purchased VRDP Shares pursuant to the Purchase Obligation on either the Rate Determination Date for such proposed Special Rate Period or on the first (1st) day of such Special Rate Period, 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, (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, 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 share 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 Certificate of Designation 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 Fund 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 (J) 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).
31
31755835.1
In the event the Trust wishes to designate a Subsequent Rate Period as a Special Rate Period, the Trust shall, no later than 11:00 a.m., New York City time, on the second Business Day immediately preceding the first (1st) day of any proposed Special Rate Period for shares of a Series of VRDP Shares as to which notice has been given as set forth in paragraph (c) of this Section 4 (or such later time or date, or both, as may be agreed to by the Remarketing Agent), deliver to the Remarketing Agent and the Liquidity Provider either:
32
31755835.1
33
31755835.1
If the Trust 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 Trust)) with respect to any designation of any Subsequent Rate Period as a 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 Trust 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 Trust 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 Trust, and the contents of such notice shall be binding on the Trust and the Holders and Beneficial Owners of the shares of such Series of VRDP Shares. In the event the Trust delivers to the Remarketing Agent and the Liquidity Provider a notice described in paragraph (d)(ii) of this Section 4, the Trust will provide Moody’s (if Moody’s is then rating the VRDP Shares in question pursuant to the request of the Trust) and Fitch (if Fitch is then rating the VRDP Shares in question pursuant to the request of the Trust) and each Other Rating Agency (if any Other Rating Agency is then rating the VRDP Shares in question pursuant to the request of the Trust) a copy of such notice.
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.
Notwithstanding any other provision in this Certificate of Designation to the contrary, the Trust may designate the Initial Rate Period a Special Rate Period on the Date of Original Issue. In the event the Trust designates the Initial Rate Period a Special Rate Period, the Trust shall deliver a Notice of Special Rate Period to the Remarketing Agent and Liquidity Provider on the Date of Original Issue and file a copy of such notice with the Secretary of the Trust, and the contents of such notice shall be binding on the Trust and the Holders and Beneficial Owners of the shares of such Series of VRDP Shares.
In the event the Trust delivers to the Remarketing Agent and the Liquidity Provider a Notice of Special Rate Period, it shall deliver, concurrently with the delivery thereof to the Remarketing Agent and the Liquidity Provider, such Notice of Special Rate Period to the Holders of the shares of such Series of VRDP Shares. During the term of the Special Rate Period, the Trust 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 Trust has been notified of any such transfer and has been provided the contact information of such Holder or Beneficial Owner, as applicable.
34
31755835.1
In the event of any conflict between the terms of the Notice of Special Rate Period and the terms of this Certificate of Designation, the terms of the Notice of Special Rate Period shall govern.
Except as may be otherwise provided in a Notice of Special Rate Period, 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.
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 shareholders of the Trust, and (ii) the holders of outstanding Preferred Shares, including each share of a Series of VRDP Shares, and of Common Shares shall vote together as a single class; provided, however, that the holders of outstanding Preferred Shares, including VRDP Shares, voting together as a class, to the exclusion of the holders of all other securities and classes of shares of beneficial interest in the Trust, shall be entitled to elect two trustees of the Trust 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 trustees.
35
31755835.1
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).
36
31755835.1
37
31755835.1
38
31755835.1
The Trust is not required to maintain any particular short-term or long-term preferred share ratings for a Series of VRDP Shares; provided, however, except as otherwise specified in any Notice of Special Rate Period, the Trust will use its reasonable best efforts to maintain at least one short-term preferred share rating of the VRDP Shares to the extent that the Liquidity Provider then has a short-term debt rating, and the Board of Trustees may, subject to this Section 5(d), at any time, terminate the services of a Rating Agency then providing a short-term or long-term preferred share 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 shareholders of the Trust. The Trust 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 Trust.
39
31755835.1
40
31755835.1
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.
The Holders of VRDP Shares shall have no preemptive rights or rights to cumulative voting.
In the event that the Trust 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 trustees pursuant to the provisions of this Section 5.
For purposes of determining any rights of the Holders to vote on any matter, whether such right is created by this Certificate of Designation, 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 this Certificate of Designation and Deposit Securities in an amount equal to the Redemption Price for the redemption of such VRDP Shares shall have been deposited in trust with the Tender and Paying Agent. VRDP Shares held (legally or beneficially) by the Trust or any affiliate of the Trust or otherwise controlled by the Trust 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.
41
31755835.1
To the fullest extent permitted by applicable law, each Holder and Beneficial Owner may in its discretion grant an irrevocable proxy.
The Trust shall maintain, as of the last Business Day of each month in which any VRDP Share is Outstanding, the Minimum VRDP Shares Asset Coverage.
42
31755835.1
Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on the shares of any class or series of shares of beneficial interest in the Trust ranking, as to the payment of dividends, on a parity with the VRDP Shares for any period unless full cumulative dividends have been or contemporaneously are declared and paid on the shares of each Series of VRDP Shares through its most recent Dividend Payment Date. When dividends are not paid in full upon the shares of each Series of VRDP Shares through its most recent Dividend Payment Date or upon the shares of any other class or series of shares of beneficial interest in the Trust ranking on a parity as to the payment of dividends with the VRDP Shares through their most recent respective dividend payment dates, all dividends declared upon the VRDP Shares and any other such class or series of shares of beneficial interest in the Trust ranking on a parity as to the payment of dividends with the VRDP Shares shall be declared pro rata so that the amount of dividends declared per share on the VRDP Shares and such other class or series of shares of beneficial interest in the Trust shall in all cases bear to each other the same ratio that accumulated dividends per share on the VRDP Shares and such other class or series of shares of beneficial interest in the Trust 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).
The Board of Trustees shall not declare any dividend (except a dividend payable in Common Shares), or declare any other distribution, upon the Common Shares, or purchase Common Shares, unless in every such case the Preferred Shares have, at the time of any such declaration or purchase, an asset coverage (as defined in and determined pursuant to the 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.
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 Part I of this Certificate of Designation, (A) the Trust shall not declare, pay or set apart for payment any dividend or other distribution (other than a dividend or distribution paid in shares of, or in options, warrants or rights to subscribe for or purchase, Common Shares or other shares, if any, ranking junior to the 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 Trust 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 Trust 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 Trust 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 Trust has redeemed the full number of VRDP Shares required to be redeemed by any provision for mandatory redemption pertaining thereto, and (B) the Trust shall not declare, pay or set apart for payment any dividend or other distribution (other than a dividend or distribution paid in shares of, or in options, warrants or rights to subscribe for or purchase, Common Shares or other shares, if any, ranking junior to 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 Trust 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 Trust 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 Trust), Fitch Eligible Assets (if Fitch is then rating the VRDP Shares at the request of the Trust) and Other Rating Agency Eligible Assets (if any Other Rating Agency is then rating the VRDP Shares at the request of the Trust) would each at least equal the VRDP Shares Basic Maintenance Amount for such Series.
43
31755835.1
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 Trust, the Trust 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.
44
31755835.1
45
31755835.1
46
31755835.1
47
31755835.1
48
31755835.1
49
31755835.1
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
50
31755835.1
51
31755835.1
If the Trust 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 Trust 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 Trust 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 Trust to the Tender and Paying Agent in electronic format at least five (5) Business Days prior to the date a Notice of Redemption is required to be delivered to the Holders, unless a shorter period of time shall be acceptable to the Tender and Paying Agent. A Notice of Redemption shall be sent to Holders not less than ten (10) days prior to the date fixed for redemption in such Notice of Redemption (the “Redemption Date”). Each such Notice of Redemption shall state: (i) the Redemption Date; (ii) the number of shares of such Series of VRDP Shares to be redeemed and the Series thereof; (iii) the CUSIP number for the VRDP Shares of such Series; (iv) the Redemption Price; (v) the place or places where the certificate(s), if any, for such VRDP Shares (properly endorsed or assigned for transfer, if the Board of Trustees 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 this Certificate of Designation 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 Trust may provide in any Notice of Redemption relating to an optional redemption contemplated to be effected pursuant to Section 10(a) of this Certificate of Designation, including any redemption of VRDP Shares to be optionally redeemed under Section 10(a) as contemplated in Section 10(b)(i) of this Certificate of Designation, that such redemption is subject to one or more conditions precedent not otherwise expressly stated herein and that the Trust 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.
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 Trust 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.
52
31755835.1
To the extent that any redemption for which a Notice of Redemption has been provided is not made by reason of the absence of legally available funds therefor in respect of shares of the Trust and in accordance with the Charter and applicable law, such redemption shall be made as soon as practicable to the extent such funds become available. A failure to redeem shares of a Series of VRDP Shares shall be deemed to exist at any time after the date specified for redemption in a Notice of Redemption when the Trust 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 Trust’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 Trust 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.
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. The Trust’s obligation to pay the Redemption Price of VRDP Shares called for redemption in accordance with this Certificate of Designation shall be satisfied upon payment of such Redemption Price by the Tender and Paying Agent to the Securities Depository on the relevant Redemption Date.
Provided a Notice of Redemption has been provided pursuant to paragraph (c) of this Section 10, the Trust shall irrevocably (except to the extent set forth below in this paragraph (g)) deposit with the Tender and Paying Agent, no later than 12:00 noon, New York City time, on a Business Day not less than ten (10) Business Days preceding the Redemption Date specified in such notice, Deposit Securities in an aggregate amount equal to the Redemption Price to be paid on the Redemption Date in respect of any shares of a Series of VRDP Shares that are subject to such notice. Provided a Notice of Redemption has been provided pursuant to paragraph (c) of this Section 10, upon the deposit with the Tender and Paying Agent of Deposit Securities in an amount sufficient to redeem the shares of a Series of VRDP Shares that are the subject of such notice, dividends on such shares of a Series of VRDP Shares shall cease to accumulate as of the Redemption Date and shares of a Series of VRDP Shares shall no longer be deemed to be Outstanding, except as noted below with respect to the VRDP Shares Purchase Agreement, for any purpose, and all rights of the Holders of the shares of a Series of VRDP Shares so called for redemption shall cease and terminate, except the right of such Holders to receive the Redemption Price, but without any interest or other additional amount, except as provided in paragraph (e)(i) of Section 2 of this Part I and in Section 3 of Part I of this Certificate of Designation. 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 Trustees 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 Trust 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 Trust, after which time the Holders of shares of a Series of VRDP Shares so called for redemption may look only to the Trust for payment of the Redemption Price and all other amounts to which they may be entitled. The Trust 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 Trust.
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In effecting any redemption pursuant to this Section 10, the Trust shall use its best efforts to comply with all applicable conditions precedent to effecting such redemption under the 1940 Act and any applicable Massachusetts or other applicable law, but shall effect no redemption except in accordance with the 1940 Act and any applicable Massachusetts or other applicable law.
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.
Notwithstanding the foregoing provisions of this Section 10, the Trust may, in its sole discretion, modify the procedures set forth above with respect to notification of redemption of VRDP Shares, provided that such modification does not materially and adversely affect the Holders of the VRDP Shares or cause the Trust 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 Trustees, 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 Trustees, without shareholder approval, by resolution and with the prior written consent of the Liquidity Provider may modify such redemption procedures.
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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 Trust.
Upon the dissolution, liquidation or winding up of the affairs of the Trust, 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 Trust legally available for distribution to its shareholders and otherwise in accordance with applicable law, before any payment or distribution shall be made on the Common Shares or on any other class of shares of the Trust ranking junior to the 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 this Certificate of Designation in connection with the liquidation of the Trust. After the payment to the Holders of the VRDP Shares of the full preferential amounts provided for in this paragraph (b), the Holders of the VRDP Shares as such shall have no right or claim to any of the remaining assets of the Trust.
In the event the assets of the Trust available for distribution to the Holders of the VRDP Shares upon any dissolution, liquidation or winding up of the affairs of the Trust, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such Holders are entitled pursuant to paragraph (b) of this Section 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.
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 Trust, after payment shall have been made in full to the Holders of the VRDP Shares as provided in paragraph (b) of this Section 11, but not prior thereto, any other series or class or classes of shares ranking junior to the VRDP Shares with respect to the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Trust shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the Holders of the VRDP Shares shall not be entitled to share therein.
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Neither the sale of all or substantially all the property or business of the Trust, nor the merger, consolidation or reorganization of the Trust 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 Trust shall be a dissolution, liquidation or winding up, whether voluntary or involuntary, for the purposes of this Section 11.
As long as shares of any Series of VRDP Shares are Outstanding, the Trust 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 Trust can do so on a commercially reasonable basis as determined in the sole discretion of the Board of Trustees. If the Trust 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:
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The provisions of paragraphs (a) through (g) of this Section 12 may be amended by the Board of Trustees, by resolution duly adopted, without shareholder approval in order to conform to a VRDP Shares Purchase Agreement providing a Purchase Obligation.
Subject to the provisions of Section 9 of Part I of this Certificate of Designation, the Board of Trustees may, by resolution duly adopted, without shareholder approval (except as otherwise provided by this Certificate of Designation or required by applicable law), amend or supplement this Certificate of Designation to (1) reflect any amendments or supplements hereto which the Board of Trustees is entitled to adopt pursuant to the terms of this Certificate of Designation without shareholder approval or (2) designate additional Series of VRDP Shares (and terms relating thereto). Each such additional Series shall be governed by the terms of this Certificate of Designation as so amended or supplemented.
No fractional shares of a Series of VRDP Shares shall be issued.
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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.
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 Trust for U.S. federal income tax purposes.
To the extent permitted by applicable law, the Board of Trustees may interpret or adjust the provisions of this Certificate of Designation to resolve any inconsistency or ambiguity or to remedy any formal defect, and may amend this Certificate of Designation with respect to VRDP Shares prior to the issuance of such VRDP Shares.
The headings contained in this Certificate of Designation are for convenience of reference only and shall not affect the meaning or interpretation of this Certificate of Designation.
All notices or communications, unless otherwise specified in the By-laws of the Trust or this Certificate of Designation, shall be sufficiently given if in writing and delivered in person, by Electronic Means or mailed by first- class mail, postage prepaid.
To the extent any of the Rating Agency Provisions, Rating Agency Guidelines, asset coverage or leverage requirements of the Rating Agencies or any definition that incorporates a meaning set forth in any of the Rating Agency Guidelines are no longer required or used by a Rating Agency then rating the VRDP Shares in such Rating Agency’s rating methodology or Rating Agency Guidelines, then such provisions, guidelines, requirements, or definitions shall have no effect under this Certificate of Designation, and notwithstanding anything herein to the contrary, the Board may remove any such provisions, guidelines, requirements or definitions from this Certificate of Designation without the vote, consent or approval of the Beneficial Owners or Holders of Preferred Shares, including any Series of VRDP Shares, or any other shareholder of the Trust.
Notwithstanding anything expressed or implied to the contrary in this Certificate of Designation, all dividends, redemptions and other payments by the Trust on or in respect of the VRDP Shares shall be paid only out of legally available funds therefor in respect of shares of the Trust and otherwise in accordance with applicable law.
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For purposes of the section entitled “Designation” contained in this Certificate of Designation and all of the provisions in this Certificate of Designation and any Notice of Special Rate Period relating to any “distribution” as defined in section 1.40 of the Massachusetts Business Corporation Act (M.G.L. ch. 156D) (the “Massachusetts Business Corporation Act”) on or in respect of the VRDP Shares, including, without limitation, Sections 2, 3, 10, 11 and 13(j) of Part I of this Certificate of Designation, “applicable law” shall include section 6.40 of the Massachusetts Business Corporation Act, including any successor provisions, as if the Trust were a Massachusetts corporation subject to the Massachusetts Business Corporation Act and the VRDP Shares were shares of a Massachusetts corporation subject to the Massachusetts Business Corporation Act. Accordingly, and without limiting the scope of the preceding sentence, any “distribution” as defined in section 1.40 of the Massachusetts Business Corporation Act on or in respect of the VRDP Shares, including, without limitation, pursuant to Sections 2, 3, 10 and 11 of Part I of this Certificate of Designation, shall be subject to the restrictions and limitations of section 6.40 of the Massachusetts Business Corporation Act, including any successor provisions as if the Trust were a Massachusetts corporation subject to the Massachusetts Business Corporation Act. Notwithstanding the foregoing, the Trust is not a Massachusetts Business Corporation and is not otherwise subject to the Massachusetts Business Corporation Act.
The Charter is on file with the Secretary of The Commonwealth of Massachusetts and provides that the name “Trustees” refers to the trustees under the Charter collectively as trustees, but not as individuals or personally; and no trustee, shareholder, officer, employee or agent of the Trust shall be held to any personal liability, nor shall resort be had to their private property for the satisfaction of any obligation or claim or otherwise in connection with the affairs of the Trust, but the Trust property only shall be liable.
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(a) Pursuant to an Optional Tender, Beneficial Owners may elect to tender their VRDP Shares (in one or more shares) for purchase at the Purchase Price on the Purchase Date designated in the Notice of Tender (or, if such day is not a Business Day, on the next succeeding Business Day) by an effective delivery of a Notice of Tender to the Tender and Paying Agent. Each Notice of Tender shall be irrevocable (except as described below) and effective upon receipt by the Tender and Paying Agent and shall:
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In the event of a Failed Remarketing Condition, pursuant to the Tender and Paying Agent Agreement, the Tender and Paying Agent shall provide notice of a Failed Remarketing Condition promptly, but in any event within two (2) Business Days of receipt by the Tender and Paying Agent of notice from the Trust 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 Trust).
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 Trust, the Tender and Paying Agent or any Remarketing Agent shall be obligated in any case to provide funds to make payment to a Beneficial Owner or its Agent Member upon such Beneficial Owner’s tender of its shares of a Series of VRDP Shares in a Remarketing unless, in each case, such shares of such Series of VRDP Shares were acquired for the account of the Trust, the Tender and Paying Agent or the Remarketing Agent.
Whenever the Trust 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 Trust shall (except as provided below) notify the Remarketing Agent and Tender and Paying Agent of the amount to be so included (i) not later than fourteen (14) calendar days preceding the first Rate Determination Date on which the Applicable Rate for such dividend is to be established, and (ii) for any successive Rate Determination Date on which the Applicable Rate for such dividend is to be established, not later than the close of business on the immediately preceding Rate Determination Date. Whenever such advance notice is received from the Trust, 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 Trust 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 Trust 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.
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Investment Adviser in riskless principal transactions with respect to such purchases of shares of a Series of VRDP Shares.
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 Trust to any Person other than the Securities Depository or its nominee. The foregoing restriction on registration of transfer shall be conspicuously noted on the face or back of the certificates of VRDP Shares in such a manner as to comply with the requirements of Section 8- 204 of the Uniform Commercial Code as in effect in The Commonwealth of Massachusetts, or any successor provisions.
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BLACKROCK MASSACHUSETTS TAX-EXEMPT TRUST
(THE “FUND”)
SERIES W-7
VARIABLE RATE DEMAND PREFERRED SHARES (“VRDP SHARES”)
CUSIP NO. 09258E208*
Amended and Restated Notice of Special Rate Period
WHEREAS, in accordance with the Fund’s Certificate of Designation Establishing and Fixing the Rights and Preferences of VRDP Shares, dated June 13, 2012, as amended, with respect to the Series W-7 of the Fund’s Variable Rate Preferred Shares (the “Certificate of Designation”), the Fund designated the next succeeding Rate Period for VRDP Shares as a Special Rate Period commencing June 14, 2012 (the “Special Rate Period Commencement Date”), pursuant to a Notice of Special Rate Period dated June 14, 2012 (the “Notice of Special Rate Period”).
WHEREAS, the Board of Trustees of the Fund, has from time to time adopted amendments to the Notice of Special Rate Period; and
WHEREAS, the Board of Trustees of the Fund, in accordance with Section 4(j) of the Certificate of Designation, has, by resolution, adopted certain additional amendments to the Notice of Special Rate Period, as amended, effective as of June 19, 2019, with the consent of the Total Holders.
NOW, THEREFORE, the Notice of Special Rate Period is amended and restated in its entirety effective as of June 19, 2019, in order to incorporate such amendments, as follows:
Term of Special Rate Period
The last day of the Special Rate Period shall be June 17, 2020 or such later date as the Special Rate Period may be extended pursuant to the terms of this Amended and Restated Notice of Special Rate Period.
Calculation of Dividends During Special Rate Period
For each SRP Calculation Period for the VRDP Shares, the dividend rate on the VRDP Shares (the “SRP Applicable Rate”) shall be calculated by the Tender and Paying Agent and shall be equal to the rate per annum that results from the sum of the (1) Base Rate and (2) Ratings Spread (the “SRP Applicable Rate Determination”). During the Special Rate Period, references in the Certificate of Designation and the other Related Documents to the “Applicable Rate Determination,” the “Applicable Rate,” a “Subsequent Rate Period” or a “Rate Determination Date,” in each case with respect to the VRDP Shares, shall be deemed to be references to the SRP Applicable Rate Determination, the SRP Applicable Rate, an SRP Calculation Period or an SRP Calculation Date, respectively. The SRP Applicable Rate for any SRP Calculation Period (or part thereof) shall in no event be greater than the Maximum Rate.
31759683.1
The amount of dividends payable on each VRDP Share on any Dividend Payment Date during the Special Rate Period shall be calculated by the Tender and Paying Agent and shall equal the sum of the dividends accumulated but not yet paid for each SRP Calculation Period (or part thereof) and, if applicable, any other Rate Period (or part thereof) occurring during the related Dividend Period. For the avoidance of doubt, the amount of dividends payable on each VRDP Share on any Dividend Payment Date during the Special Rate Period shall also include any Additional Amount applicable under the Statement. The amount of dividends accumulated for each such SRP Calculation Period (or part thereof) shall be computed by multiplying the SRP Applicable Rate for the VRDP Shares for such SRP Calculation Period (or part thereof) by a fraction, the numerator of which shall be the number of days in such SRP Calculation Period (or part thereof) and the denominator of which shall be the actual number of days in the year (365 or 366), and multiplying such product by $100,000.
During the Special Rate Period, the scheduled Dividend Payment Dates for the VRDP Shares shall continue to be the first Business Day of each calendar month.
Notice of Taxable Allocations and Gross-Up Payments
Section 3 of Part I and Section 6 of Part II of the Certificate of Designation shall have no effect during the Special Rate Period
During the Special Rate Period, Holders of VRDP Shares shall be entitled to receive, when, as and if declared by the Board of Trustees, out of funds legally available therefor under applicable law and otherwise in accordance with applicable law, dividends in an amount equal to the aggregate Gross-up Payments as follows:
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Special Redemption Provisions
During the Special Rate Period, the VRDP Shares may be redeemed pursuant to Section 10(a)(i) of the Certificate of Designation only upon the payment of the applicable Redemption Premium and otherwise in accordance with Section 10(a) of the Certificate of Designation. The Fund’s Board of Trustees has determined in accordance with Section 10(a)(ii) of the Certificate of Designation that the Special Redemption Provisions are in the best interests of the Fund.
“Redemption Premium” means, if the VRDP Shares are rated above A1/A+ and its equivalent by all Rating Agencies then rating the VRDP Shares as of the relevant Redemption Date and with respect to the VRDP Shares subject to redemption on such Redemption Date, other than in respect of any redemption required to comply with the VRDP Shares Basic Maintenance Amount or the Minimum VRDP Shares Asset Coverage requirements or any optional redemption in connection with a redemption to comply with the Minimum VRDP Shares Asset Coverage requirements that results in Minimum VRDP Shares Asset Coverage of up to 240%, an amount equal to:
Any VRDP Share exchanged for a preferred share of an acquiring entity or successor entity in connection with a reorganization, merger or redomestication of the Fund in another state that had been previously approved by the Holders of VRDP Shares or that otherwise does not require the vote or consent of the Holders of VRDP Shares shall not be subject to the Redemption Premium solely as a result of such exchange of shares.
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Optional Tender and Transfers of VRDP Shares
During the Special Rate Period, Beneficial Owners and Holders shall not have the right to tender their VRDP Shares for Remarketing pursuant to an Optional Tender.
The Fund agrees, however, that during the Special Rate Period, a Beneficial Owner or Holder of VRDP Shares may sell, transfer or otherwise dispose of VRDP Shares in whole shares only to (i) Persons that such Beneficial Owner or Holder reasonably believes are QIBs that are either registered closed-end management investment companies, the common shares of which are traded on a national securities exchange (“Closed-End Funds”), banks, insurance companies, companies that are included in the S&P 500 Index (and their direct or indirect wholly owned subsidiaries) or registered open-end management investment companies, (ii) tender option bond trusts (whether tax-exempt or taxable) in which all investors are Persons that such Beneficial Owner or Holder reasonably believes are QIBs that are Closed-End Funds, banks, insurance companies, companies that are included in the S&P 500 Index (and their direct or indirect wholly owned subsidiaries) or registered open-end management investment companies (or, in the case of a TOB Trust in which an affiliate of such Beneficial Owner or Holder retains a residual interest, such affiliate of such Beneficial Owner or Holder, but only to the extent expressly provided for in an agreement between the Fund and such Beneficial Owner or Holder) or (iii) such other Persons approved in writing by the Fund, in each case, pursuant to Rule 144A of the Securities Act or another available exemption from registration under the Securities Act, in a manner not involving any public offering within the meaning of Section 4(a)(2) of the Securities Act. Any transfer in violation of the foregoing restrictions shall be void ab initio and any transferee of VRDP Shares transferred in violation of the foregoing restrictions shall be deemed to agree to hold all payments it received on any such improperly transferred VRDP Shares in trust for the benefit of the transferor of such VRDP Shares.
In the event that a Beneficial Owner transfers VRDP Shares to a TOB Trust in which such Beneficial Owner or an affiliate of such Beneficial Owner that is a wholly owned direct or indirect subsidiary of such Beneficial Owner retains a residual interest, for so long as no event has occurred that results in the termination of such TOB Trust, for purposes of each section of the Certificate of Designation that requires, permits or provides for (i) notice or the delivery of information to the Beneficial Owner of VRDP Shares or (ii) voting of the VRDP Shares by or the giving of any consent by the Beneficial Owner of VRDP Shares (collectively, the “Applicable Sections”), then such Beneficial Owner, and not such tender option bond trust, shall be deemed to be the actual holder and Beneficial Owner of such VRDP Shares.
Anything herein to the contrary notwithstanding, except with respect to the deemed holding and ownership provisions set forth above in respect of the Applicable Sections, any TOB Trust to which the VRDP Shares are transferred and each of the beneficial owners thereof shall, subject to the provisions of the agreements governing the TOB Trust, retain all of its other rights in respect of the VRDP Shares under the Certificate of Designation or applicable law, including, for the avoidance of doubt, the rights of such TOB Trust in respect of matters addressed by any of the Applicable Sections to the extent necessary for the protection or exercise of such other rights or that are otherwise applicable as a result of the exercise of such other rights.
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Additional Provisions Relating to the Termination of Special Rate Period
If at any time the Total Holder of the VRDP Shares is also the Liquidity Provider with respect to the VRDP Shares under the terms of the then effective VRDP Shares Purchase Agreement, and the Total Holder has purchased the VRDP Shares in its individual capacity and not in its capacity as Liquidity Provider pursuant to the Purchase Obligation (in such capacity, an “LP Holder”), then such LP Holder acknowledges that (i) such purchase of the VRDP Shares by the LP Holder does not constitute a Failed Remarketing Condition—Purchased VRDP Shares, and (ii) except as provided below, the beneficial ownership of such VRDP Shares by the LP Holder shall not require a Failed Remarketing Condition—Purchased VRDP Shares Redemption.
If the Scheduled Termination Date for the VRDP Shares is further extended to a succeeding Scheduled Termination Date in accordance with the terms of the VRDP Shares Purchase Agreement, then, unless the Special Rate Period has been extended in accordance with the procedures set forth below, the VRDP Shares beneficially owned by any Beneficial Owner will be deemed automatically tendered for Remarketing on the seventh day prior to the last day of the Special Rate Period (the “Automatic Tender Date”) with a Purchase Date occurring on the first day of the Subsequent Rate Period immediately succeeding the Special Rate Period. Notice of the extension of the Scheduled Termination Date for the VRDP Shares and the automatic tender of such VRDP Shares for Remarketing shall be provided by or on behalf of the Fund to the Holders of such VRDP Shares as soon as reasonably practicable upon the extension of the Scheduled Termination Date, but in no event later than one Business Day before the Automatic Tender Date. Notwithstanding the foregoing provisions of this Amended and Restated Notice of Special Rate Period, if any VRDP Shares beneficially owned by the LP Holder for federal income tax purposes on such Purchase Date are not successfully remarketed for purchase on such Purchase Date, a Failed Remarketing Condition—Purchased VRDP Shares will be deemed to exist in respect of such VRDP Shares for all purposes of the Certificate of Designation (including Section 10(b) thereof and the definition of Maximum Rate) and the other Related Documents and, as of such Purchase Date, such VRDP Shares will be deemed beneficially owned by the Liquidity Provider in its capacity as Liquidity Provider. Accordingly, all such VRDP Shares deemed beneficially owned by the Liquidity Provider will thereafter be deemed tendered for Remarketing on each Business Day in accordance with the Related Documents, and the continued beneficial ownership of such VRDP Shares by the Liquidity Provider will result in a Failed Remarketing Condition—Purchased VRDP Shares Redemption in accordance with, and subject to, the terms of such definition and the Related Documents. For the avoidance of doubt, if any VRDP Shares beneficially owned by a Beneficial Owner other than the LP Holder are not successfully remarketed on the Purchase Date relating to the Automatic Tender Date and are purchased by the Liquidity Provider pursuant to the Purchase Obligation, such VRDP Shares shall constitute Failed Remarketing Condition—Purchased VRDP Shares, such VRDP Shares will thereafter be deemed tendered for Remarketing on each Business Day in accordance with the Related Documents, and the continued beneficial ownership of such VRDP Shares by the Liquidity Provider will result in a Failed Remarketing Condition—Purchased VRDP Shares Redemption in accordance with, and subject to, the terms of such definition and the Related Documents.
The Fund shall have the right, exercisable not more than 120 days nor less than 90 days prior to the last day of the Special Rate Period, to request that each Holder of the VRDP Shares (x) extend the term of the Special Rate Period for the VRDP Shares for an additional 364-day period, which request may be conditioned upon terms and conditions that are different from the terms and conditions herein, including, without limitation, the further extension of the Scheduled Termination Date and (y) notify the Fund and the Tender and Paying Agent of such Holder’s acceptance or rejection of such request within 30 days after receiving such request. If any Holder of the VRDP Shares fails to notify the Fund and the Tender and Paying Agent of its acceptance or rejection of the Fund’s request for extension within 30 days after receiving such request, such failure to respond shall constitute a rejection of such request. Any acceptance by a Holder within such 30-day period may be conditioned upon terms and conditions, including, without limitation, the further extension of the Scheduled Termination Date, that are different from the terms and conditions herein or the terms proposed by the Fund in making an extension request (a “Conditional Acceptance”). If any Holder provides a Conditional Acceptance, then the Fund shall have 30 days thereafter to notify the Total Holders and the Tender and Paying Agent of the Fund’s acceptance or rejection of the terms and conditions specified in any such Conditional Acceptance. The Fund’s failure to notify the Total Holders and the Tender and Paying Agent within such 30-day period will be deemed a rejection of the terms and conditions specified in a Conditional Acceptance. Each Holder of the VRDP Shares may grant or deny any request for extension of the Special Rate Period for the VRDP Shares in their sole and absolute discretion and any request for such extension will be effective only if granted by the Total Holders. Notwithstanding the foregoing, each of the provisions of this paragraph, including without limitation the notice provisions, may be waived by written agreement of the Fund and the Total Holders. The provisions of this paragraph are deemed waived to the extent necessary in connection with the extension of the Special Rate Period from June 19, 2019 to June 17, 2020, and such extension shall be deemed for all purposes to have been made in accordance with the procedures set forth in this Amended and Restated Notice of Special Rate Period.
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If the Scheduled Termination Date is not further extended to a succeeding Scheduled Termination Date in accordance with the terms of the VRDP Shares Purchase Agreement or if the VRDP Shares Purchase Agreement is otherwise terminated on or prior to the Scheduled Termination Date for any reason, then the VRDP Shares beneficially owned by any Beneficial Owner will be deemed automatically tendered for Remarketing on the seventh day prior to the Scheduled Termination Date (whether or not the VRDP Shares Purchase Agreement has terminated on or prior to such date) with a Purchase Date occurring on such Scheduled Termination Date. Notice of the automatic tender of such VRDP Shares for Remarketing shall be provided by or on behalf of the Fund to the Holders of such VRDP Shares as soon as reasonably practicable prior to, but in no event later than one Business Day before, the Automatic Tender Date. Notwithstanding the foregoing provisions of this Amended and Restated Notice of Special Rate Period, if any VRDP Shares beneficially owned by the LP Holder for federal income tax purposes on such Purchase Date are not successfully remarketed for purchase on such Purchase Date, a Failed Remarketing Condition—Purchased VRDP Shares will be deemed to exist in respect of such VRDP Shares for all purposes of the Certificate of Designation (including Section 10(b) thereof and the definition of Maximum Rate) and the other Related Documents and, as of such Purchase Date, such VRDP Shares will be deemed beneficially owned by the Liquidity Provider in its capacity as Liquidity Provider, unless the Fund has entered into an Alternate VRDP Shares Purchase Agreement and all VRDP Shares beneficially owned by the LP Holder are subject to purchase by the replacement Liquidity Provider pursuant to the Purchase Obligation of such Liquidity Provider under such Alternate VRDP Shares Purchase Agreement on and as of such Purchase Date. Accordingly, if a Failed Remarketing Condition—Purchased VRDP Shares is so deemed to exist in respect of any VRDP Shares deemed beneficially owned by the Liquidity Provider on such Purchase Date, such VRDP Shares will thereafter be deemed tendered for Remarketing on each Business Day in accordance with the Related Documents and the continued beneficial ownership of such VRDP Shares by the Liquidity Provider will result in a Failed Remarketing Condition—Purchased VRDP Shares Redemption in accordance with, and subject to, the terms of such definition and the Related Documents. For the avoidance of doubt, if any VRDP Shares beneficially owned by a Beneficial Owner other than the LP Holder are not successfully remarketed on the Purchase Date relating to the automatic tender described above and are purchased by the Liquidity Provider pursuant to the Purchase Obligation, such VRDP Shares shall constitute Failed Remarketing Condition— Purchased VRDP Shares, such VRDP Shares will thereafter be deemed tendered for Remarketing on each Business Day in accordance with the Related Documents, and the continued beneficial ownership of such VRDP Shares by the Liquidity Provider will result in a Failed Remarketing Condition—Purchased VRDP Shares Redemption in accordance with, and subject to, the terms of such definition and the Related Documents. Notwithstanding the foregoing, the termination, on June 19, 2019, of the VRDP Shares Purchase Agreement dated as of June 14, 2012 and the Fund’s entering into the VRDP Shares Purchase Agreement on June 19, 2019, will not trigger the automatic tender for Remarketing described in this paragraph.
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Other Additional Provisions Applicable During Special Rate Period
During the Special Rate Period, the provisions of the Certificate of Designation relating to Mandatory Tender Events and related Mandatory Tenders shall be inapplicable.
During the Special Rate Period, the first sentence of the first paragraph of Section 12 of the Certificate of Designation shall be inapplicable.
During the Special Rate Period, the Fund is not required to obtain or maintain any short- term preferred share rating of the VRDP Shares.
During the Special Rate Period, Section 4(j) of Part I of the Certificate of Designation shall be replaced by the following: Notwithstanding the Fund’s option to designate any succeeding Subsequent Rate Period of a Series of VRDP Shares as a Special Rate Period under Section 4 of Part I of the Certificate of Designation, during the Special Rate Period, the Fund shall not, without (i) the prior written consent of the Liquidity Provider and the Remarketing Agent and (ii) the affirmative vote or consent of the Total Holders of the VRDP Shares of such Series Outstanding at the time, in person or by proxy, either in writing or at a meeting, voting as a separate class, designate another Special Rate Period for such Series.
A Notice of Special Rate Period may be amended, altered, or repealed 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, alteration or repeal that adversely affects the rights of the Holders during such Special Rate Period shall require the consent of the Liquidity Provider, the Remarketing Agent, and 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 this 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. Notwithstanding the foregoing, any amendment, alteration or repeal of any provision of this Amended and Restated Notice of Special Rate Period that adversely affects the amount, timing, priority or taxability of any dividend, redemption or other payment or distribution due to the Holders of the VRDP Shares of such Series shall require the affirmative vote or consent of the Total Holders of such Series, in person or by proxy, either in writing or at a meeting, voting as a separate class.
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Personal Liability
This Amended and Restated Notice of Special Rate Period is executed by or on behalf of the trustees of the Fund solely in their capacity as such trustees, and shall not constitute their personal obligation either jointly or severally in their individual capacities. The Fund’s Declaration of Trust is on file with the Secretary of the Commonwealth of Massachusetts. In accordance with the Declaration of Trust, no trustee, shareholder, officer, employee or agent of the Fund shall be held to any personal liability, nor shall resort be had to their private property for the satisfaction of any obligation or claim or otherwise under this Amended and Restated Notice of Special Rate Period and the Fund shall be solely liable therefor; all parties hereto shall look solely to the Fund property for the payment of any claim, or the performance of any obligation, hereunder.
Certain capitalized terms used but not defined in this Amended and Restated Notice of Special Rate Period are defined in Appendix A hereto. Capitalized terms used but not defined in this Amended and Restated Notice of Special Rate Period, including in Appendix A hereto, shall have the meanings given to such terms in the Certificate of Designation.
* NOTE: Neither the Fund nor the Tender and Paying Agent shall be responsible for the selection or use of the CUSIP Numbers selected, nor is any representation made as to its correctness indicated in any notice or as printed on any VRDP Share certificate. It is included solely as a convenience to Holders of VRDP Shares.
[Signature Page Follows]
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IN WITNESS WHEREOF, I have signed this Amended and Restated Notice of Special Rate Period as of the date first written above.
BLACKROCK MASSACHUSETTS TAX EXEMPT TRUST
By: /s/ Jonathan Diorio
Name: Jonathan Diorio
Title: Vice President
Signature Page to MHE Amended and Restated Notice of Special Rate Period
31759683.1
Appendix A
Definitions
The following terms shall have the following meanings:
“Base Rate” means, with respect to an SRP Calculation Period, the SIFMA Municipal Swap Index on the SRP Calculation Date for such SRP Calculation Period.
“Maximum Rate” means 15% per annum, exclusive of any applicable Gross-up Payment or increased dividend payment relating to the inclusion in any dividend of net capital gains or ordinary income taxable for regular federal income tax purposes, in each case due and payable in accordance with the Certificate of Designation.
“Ratings Spread” means, with respect to an SRP Calculation Period, the percentage per annum set forth below opposite the highest applicable credit rating assigned to the VRDP Shares, unless the lowest applicable rating is below A3/A-, in which case the Ratings Spread shall mean the percentage per annum set forth below opposite the lowest applicable credit rating assigned to the VRDP Shares by Moody’s, Fitch or any Other Rating Agency, in each case rating the VRDP Shares at the request of the Fund, on the SRP Calculation Date for such SRP Calculation Period:
Moody’s/Fitch |
Percentage |
Aaa/AAA |
0.75% |
Aa3/AA- to Aa1/AA+ |
0.95% |
A3/A- to A1/A+ |
1.60% |
Baa3/BBB- to Baa1/BBB+ |
2.35% |
Non-investment grade or Unrated |
3.35% |
“SRP Calculation Date” means (i) with respect to the SRP Initial Calculation Period, the Business Day immediately preceding the Special Rate Period Commencement Date and (ii) with respect to any SRP Subsequent Calculation Period, the last day of the immediately preceding SRP Calculation Period, provided that the next succeeding SRP Calculation Date will be determined without regard to any prior extension of a SRP Calculation Date to a Business Day.
“SRP Calculation Period” means the SRP Initial Calculation Period and any SRP Subsequent Calculation Period.
“SRP Initial Calculation Period” means, with respect to the VRDP Shares, the period commencing on, and including, the Special Rate Period Commencement Date and ending on, and including, the next succeeding Wednesday, or, if such day is not a Business Day, the next succeeding Business Day.
“SRP Subsequent Calculation Period” means, with respect to the VRDP Shares, the period from, and including, the first day following a SRP Calculation Date to, and including, the next succeeding Wednesday, or, if such day is not a Business Day, the next succeeding Business Day.
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“TOB Trust” means a tender option bond trust or similar vehicles that are functionally equivalent to tender option bond trusts and used for providing financing for municipal obligations and municipal closed-end fund preferred shares.
“Total Holders” means, with respect to any Series of VRDP Shares, the Holders of 100% of the aggregate Outstanding amount of the VRDP Shares of such Series.
Appendix A
11
BLACKROCK MASSACHUSETTS TAX-EXEMPT TRUST
CERTIFICATE
The undersigned hereby certifies that she is the Secretary of BlackRock Massachusetts Tax-Exempt Trust, an unincorporated business trust organized and existing under the laws of The Commonwealth of Massachusetts (the “Trust”), and that annexed hereto is the Amended and Restated Certificate of Designation Establishing and Fixing the Rights and Preferences of Series W-7 Variable Rate Demand Preferred Shares of the Trust, which Amended and Restated Certificate of Designation has been adopted by the Board of Trustees of the Trust in a manner provided in the Trust’s Declaration of Trust.
Executed this 17 day of June, 2019
By: /s/ Janey Ahn
Name: Janey Ahn
Title: Secretary
31755835.1
BLACKROCK MASSACHUSETTS TAX-EXEMPT TRUST
AMENDED AND RESTATED CERTIFICATE OF DESIGNATION
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES
OF
VARIABLE RATE DEMAND PREFERRED SHARES
WHEREAS the Board of Trustees of BlackRock Massachusetts Tax Exempt Trust (the “Trust”), is expressly empowered pursuant to Section 4.1 of the Charter to authorize the issuance of preferred shares of the Trust in one or more series, with such preferences, powers, restrictions, limitations or qualifications as determined by the Board of Trustees and as set forth in the resolution or resolutions providing for the issuance of such preferred shares;
WHEREAS the Board of Trustees has heretofore determined that it is in the best interest of the Trust to issue one series of such preferred shares;
WHEREAS, the Board of Trustees has authorized the issuance of preferred shares, par value $0.01 per share, designated Variable Rate Demand Preferred Shares (“VRDP Shares”), such VRDP Shares to be issued in one or more series, as designated and authorized by the Board of Trustees or a duly authorized committee thereof from time to time (each series of VRDP Shares that may be authorized and issued, a “Series”);
WHEREAS, 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 Certificate of Designation Establishing and Fixing the Rights and Preferences of Variable Rate Demand Preferred Shares effective June 13, 2012 (the “Original Certificate”);
WHEREAS, the Board of Trustees has by resolution authorized the amendment and restatement of the Original Certificate effective as of the Effective Date (as defined below);
WHEREAS, the current Holders (as defined below) of the Series W-7 VRDP Shares (as defined below) have consented to this Amended and Restated Certificate of Designation Establishing and Fixing the Rights and Preferences of Variable Rate Demand Preferred Shares; and
NOW THEREFORE, 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, effective as of the Effective Date, are as follows or as set forth in an amendment hereto (each such Series being referred to herein as a “Series of VRDP Shares”):
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DESIGNATION
Series W-7: A series of 185 preferred shares of beneficial interest, par value $0.01 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 Trustees of the Trust or pursuant to their delegated authority; have such preferences, voting powers, limitations as to dividends, qualifications and terms and conditions of redemption, in addition to those required by applicable law or as set forth in the Charter, as set forth in Parts I and II of this Certificate of Designation and in any applicable Notice of Special Rate Period. The Series W-7 VRDP Shares shall constitute a separate series of preferred shares of beneficial interest in the Trust 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 this Certificate of Designation 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 and the Rules and Regulations thereunder, as amended.
“Additional Amount” shall have the meaning specified in paragraph (e)(i)(C) of Section 2 of Part I of this Certificate of Designation.
“Affected Series” shall have the meaning specified in paragraph (c)(i) of Section 5 of Part I of this Certificate of Designation.
“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 Trust.
“Applicable Base Rate” means (i) with respect to a Rate Period of fewer than forty-nine (49) days, the greater of (a) the SIFMA Municipal Swap Index and (b) the LIBOR Rate, and (ii) with respect to a Rate Period of forty-nine (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 this Certificate of Designation or in the definition of “Maximum Rate,” as applicable.
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“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 this Certificate of Designation.
“Applicable Spread” means, in connection with the Maximum Rate for any Rate Period (and subject to adjustment as described in the definition of Maximum Rate) (i) when there is not a Failed Remarketing Condition, 200 basis points (2.00%), and (ii) while a Failed Remarketing Condition has occurred or is continuing, 200 basis points (2.00%) (up to 59 days of a continued Failed Remarketing Condition), 225 basis points (2.25%) (sixty (60) days but fewer than ninety (90) days of a continued Failed Remarketing Condition), 250 basis points (2.50%) (ninety (90) days but fewer than 120 days of a continued Failed Remarketing Condition), 275 basis points (2.75%) (120 days but fewer than 150 days of a continued Failed Remarketing Condition), 300 basis points (3.00%) (150 days but fewer than 180 days of a continued Failed Remarketing Condition), and 400 basis points (4.00%) (180 days or more of a continued Failed Remarketing Condition); provided that, if at any time when the Applicable Spread is 225 basis points (2.25%), 250 basis points (2.50%), 275 basis points (2.75%), 300 basis points (3.00%) or 400 basis points (4.00%) and the Failed Remarketing Condition no longer exists due to the successful remarketing of all Purchased VRDP Shares, then such Applicable Spread of 225 basis points (2.25%), 250 basis points (2.50%), 275 basis points (2.75%), 300 basis points (3.00%) or 400 basis points (4.00%) will continue to be the Applicable Spread in connection with determining the Maximum Rate in effect for each Rate Period commencing with the first Subsequent Rate Period after the Failed Remarketing Condition no longer exists through and including the first Subsequent Rate Period ending on or after the 45th day after the day the Failed Remarketing Condition no longer exists; provided, further, that (i) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 225 basis points (2.25%), the date such new Failed Remarketing Condition occurs will be deemed to be the 60th day of a continued Failed Remarketing Condition, (ii) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 250 basis points (2.50%), the date such new Failed Remarketing Condition occurs will be deemed to be the 90th day of a continued Failed Remarketing Condition, (iii) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 275 basis points (2.75%), the date such new Failed Remarketing Condition occurs will be deemed to be the 120th day of a continued Failed Remarketing Condition, (iv) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 300 basis points (3.00%), the date such new Failed Remarketing Condition occurs will be deemed to be the 150th day of a continued Failed Remarketing Condition and (v) if a new Failed Remarketing Condition occurs prior to the end of such period and the Applicable Spread is then 400 basis points (4.00%), the date such new Failed Remarketing Condition occurs will be deemed to be the 180th day of a continued Failed Remarketing Condition, in each case, solely for purposes of determining the Applicable Spread.
“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).
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“Board” means the Board of Trustees of the Trust 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.
“Certificate of Designation” means this Amended and Restated Certificate of Designation Establishing and Fixing the Rights and Preferences of VRDP Shares.
“Charter” means the Agreement and Declaration of Trust, as amended and supplemented (including by this Certificate of Designation), of the Trust on file with the Secretary of The Commonwealth of Massachusetts.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Common Shares” means the common shares of beneficial interest, par value $0.01 per share, in the Trust. “Cure Date” means the VRDP Shares Basic Maintenance Cure Date, the Minimum VRDP Shares Asset Coverage Cure Date, or the Effective Leverage Ratio 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 Trust 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 Trust 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:
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“Discounted Value,” as of any Valuation Date, shall have the meaning set forth in the respective Rating Agency Guidelines.
“Dividend Payment Date,” except as otherwise provided in paragraph (d) of Section 2 of Part I of this Certificate of Designation, 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” shall have the meaning set forth in the Fee Agreement.
“Effective Leverage Ratio Cure Period” shall have the meaning set forth in the Fee Agreement.
“Effective Leverage Ratio Cure Date” shall mean the next Business Day following the last day of the Effective Leverage Ratio Cure Period.
“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 the Tender and Paying Agent Agreement or as specified in the related notice.
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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended.
“Extraordinary Corporate Event” means as to the Liquidity Provider, (i) the consolidation or amalgamation with, or merger with and into, or the transfer of all or substantially all of the Liquidity Provider’s assets to, another entity, or (ii) the dissolution, for any reason, of the Liquidity Provider other than in connection with the consolidation, amalgamation with, or merger with and into another entity or the transfer of all or substantially all of the Liquidity Provider’s assets; provided, however, that with respect to (i) above, an Extraordinary Corporate Event does not include any of the listed occurrences where (x) the surviving entity, or transferee of all or substantially all of the Liquidity Provider’s assets, (a) assumes or is bound by all of the obligations of the Liquidity Provider under the terms of the VRDP Shares Purchase Agreement and (b) has short-term debt ratings in one of the two highest rating categories from the Requisite NRSROs and (y) the Liquidity Provider has provided notice in writing to the Trust confirming the information described in (x) at least 10 days prior to the scheduled date of the applicable listed occurrence in (i) above.
“Failed Remarketing Condition” means a Failed Remarketing Condition-Purchased VRDP Shares or a Failed Remarketing Condition-Unpurchased VRDP Shares.
“Failed Remarketing Condition-Purchased VRDP Shares” means that the Liquidity Provider acquires and continues to be the beneficial owner for federal income tax purposes of any shares of a Series of VRDP Shares in connection with purchases made pursuant to the Purchase Obligation (whether as a result of an unsuccessful Remarketing or a Mandatory Purchase) on any Purchase Date, including shares of a Series of VRDP Shares that the Liquidity Provider continues to be the beneficial owner of for federal income tax purposes after the expiration or termination of the VRDP Shares Purchase Agreement.
“Failed Remarketing Condition-Purchased VRDP Shares Redemption” means redemption by the Trust, 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 Trustees for redemption, of shares of a Series of VRDP Shares that the Liquidity Provider shall have acquired pursuant to the Purchase Obligation and continued to be the beneficial owner of for federal income tax purposes for a continuous period of six (6) months during which such VRDP Shares are tendered for Remarketing on each Business Day in accordance with the Related Documents but cannot be successfully remarketed (i.e., a Failed Remarketing Condition-Purchased VRDP Shares shall have occurred and be continuing for such period of time with respect to such VRDP Shares), determined by the Trust on a first-in, first-out basis, in accordance with and subject to the provisions of the Fee Agreement and this Certificate of Designation.
“Failed Remarketing Condition-Unpurchased VRDP Shares” means that a Beneficial Owner (other than the Liquidity Provider or its affiliates) continues to hold shares of a Series of VRDP Shares, that were subject to a Tender in accordance with the VRDP Shares Purchase Agreement, after any Purchase Date as a result of the failure by the Liquidity Provider for any reason to purchase such VRDP Shares pursuant to the Purchase Obligation (whether as a result of an unsuccessful Remarketing or a Mandatory Purchase) (“Unpurchased VRDP Shares”), until such time as all Outstanding Unpurchased VRDP Shares are (i) successfully remarketed pursuant to a Remarketing, (ii) purchased by the Liquidity Provider pursuant to the Purchase Obligation, or (iii) if not successfully remarketed pursuant to a Remarketing or purchased by the Liquidity Provider pursuant to the Purchase Obligation, the subject of a properly tendered Notice of Revocation (or any combination of the foregoing); and any Unpurchased VRDP Shares shall be deemed tendered for Remarketing until the earliest to occur of the foregoing events (i), (ii) or (iii) with respect to such Unpurchased VRDP Shares.
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“Failure to Deposit” means, with respect to shares of a Series of VRDP Shares, a failure by the Trust 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 this Certificate of Designation; provided, however, that the foregoing clause (B) shall not apply to the Trust’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, by and between the Trust and the initial Liquidity Provider, as amended, modified or supplemented from time to time or any similar agreement with a successor Liquidity Provider.
“Final Notice of Purchase” means, in connection with an Optional Tender or a Mandatory Tender, a Notice of Purchase delivered by the Tender and Paying Agent to the Liquidity Provider (or directly to the Liquidity Provider by Beneficial Owners or their Agent Members, in the case of an Optional Tender, or Holders, in the case of a Mandatory Tender, if there is no Tender and Paying Agent or for any reason the Tender and Paying Agent does not perform its obligations) on the Purchase Date indicating the number of shares of a Series of VRDP Shares to be purchased on such date pursuant to the Purchase Obligation, or, in connection with a Mandatory Purchase, the Mandatory Purchase Notice delivered by the Trust or the Tender and Paying Agent on behalf of the Trust.
“Fitch” means Fitch Ratings and its successors.
“Fitch Eligible Assets” means assets of the Trust set forth in the Fitch Guidelines as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with Fitch’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
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“Fitch Guidelines” means the guidelines applicable to Fitch’s current long-term preferred share ratings of the VRDP Shares, provided by Fitch in connection with Fitch’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request to the Trust (a copy of which is available on request to the Trust), 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 Trust or such earlier date as the Trust may elect.
“Fitch Provisions” means Sections 7, 8(c)(B) and 9 of Part I of this Certificate of Designation with respect to Fitch, and any other provisions hereof with respect to Fitch’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust, including any provisions with respect to obtaining and maintaining a long-term preferred share rating on VRDP Shares from Fitch. The Trust 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 Trust.
“Gross-up Payment” means payment to a Beneficial Owner of an amount which, when taken together with the aggregate amount of Taxable Allocations made to such Beneficial Owner to which such Gross-up Payment relates, would cause such Beneficial Owner’s dividends in dollars (after giving effect to regular federal income tax consequences) from the aggregate of such Taxable Allocations and the related Gross-up Payment to be equal to the dollar amount of the dividends which would have been received by such Beneficial Owner if the amount of such aggregate Taxable Allocations would have been excludable from the gross income of such Beneficial Owner. Such Gross-up Payment shall be calculated (i) without consideration being given to the time value of money; (ii) assuming that no Beneficial Owner of shares of a Series of VRDP Shares is subject to the federal alternative minimum tax with respect to dividends received from the Trust; (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 Massachusetts 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 regular federal and Massachusetts 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 Trust 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, June 20, 2012, the next succeeding Wednesday; provided, that if the Initial Rate Period has been designated a Special Rate Period, then such Initial Rate Period shall end on the last day of such Special Rate Period.
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“Investment Adviser” means BlackRock Advisors, LLC, or any successor company or entity.
“LIBOR Dealer” means such LIBOR dealer or dealers as the Trust 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 Trust’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 Trust’s approval) that is representative of a single transaction in such market at such time by reference to the principal London offices of leading banks in the London interbank market; provided, however, that if one of the LIBOR Dealers does not quote a rate required to determine the LIBOR Rate, the LIBOR Rate will be determined on the basis of the quotation or quotations furnished by any Substitute LIBOR Dealer or Substitute LIBOR Dealers selected by the Trust to provide such rate or rates not being supplied by the LIBOR Dealer; provided further, that if the LIBOR Dealer and Substitute LIBOR Dealers are required but unable to determine a rate in accordance with at least one of the procedures provided above, 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.
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“Liquidation Preference,” with respect to a given number of Series W-7 VRDP Shares, means $100,000 times that number.
“Liquidity Account” shall have the meaning specified in paragraph (b)(ii)(B) of Section 10 of Part I of this Certificate of Designation.
“Liquidity Account Investments” means Deposit Securities or any other security or investment owned by the Trust that is rated at least investment grade 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 Trust’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 Trust pursuant to the Tender and Paying Agent Agreement, for termination of the VRDP Shares Purchase Agreement upon the occurrence of a Liquidity Provider Ratings Event, which date shall be not less than sixteen (16) days nor more than thirty (30) days following the date on which such Liquidity Provider Ratings Event first occurs.
“Liquidity Requirement” shall have the meaning specified in paragraph (b)(ii)(C) of Section 10 of Part I of this Certificate of Designation.
“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 determined in accordance with this Certificate of Designation 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 Trust shall not have obtained and delivered to the Tender and Paying Agent an Alternate VRDP Shares Purchase Agreement with a termination date not earlier than 180 days from the Scheduled Termination Date of the VRDP Shares Purchase Agreement being replaced, or (ii) in connection with the termination of the VRDP Shares Purchase Agreement due to a Liquidity Provider Ratings Event or Related Party Termination Event, by the fifteenth day (15th) prior to the Liquidity Provider Ratings Event Termination Date or Related Party Termination Date, as the case may be, the Trust shall not have obtained and delivered to the Tender and Paying Agent an Alternate VRDP Shares Purchase Agreement with a termination date not earlier than 180 days from the Liquidity Provider Ratings Event Termination Date or Related Party Termination Date, as the case may be, of the VRDP Shares Purchase Agreement being replaced. The Mandatory Purchase Event shall be deemed to occur on such fifteenth (15th) day prior to any Scheduled Termination Date, Liquidity Provider Ratings Event Termination Date or Related Party Termination Date, as the case may be.
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“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 Trust or the Tender and Paying Agent on behalf of the Trust to the Holders and the Liquidity Provider in accordance with the VRDP Shares Purchase Agreement and specifying a Mandatory Purchase Date.
“Mandatory Tender,” with respect to a Mandatory Tender Event, means the mandatory tender of all shares of a Series of VRDP Shares by Holders for Remarketing or, in the event (i) no Remarketing occurs on or before the Purchase Date or (ii) pursuant to an attempted Remarketing, shares of the Series of VRDP Shares remain unsold and the Remarketing Agent does not purchase for its own account the unsold shares of the Series of VRDP Shares tendered to the Tender and Paying Agent for Remarketing (provided, that the Remarketing Agent may seek to sell such shares of the Series of VRDP Shares in a subsequent Remarketing prior to the Purchase Date), for purchase by the Liquidity Provider at the Purchase Price pursuant to Part II of this Certificate of Designation and the VRDP Shares Purchase Agreement.
“Mandatory Tender Event” means (a) each failure by the Trust 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 Trust 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 Trust 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 Trust 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; or (f) the Trust shall have provided a Notice of Proposed Special Rate Period in accordance with this Certificate of Designation.
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“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 Trust or the Tender and Paying Agent on behalf of the Trust 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 Trust means the market value thereof determined by an independent third-party pricing service designated pursuant to the Trust’s valuation policies and procedures approved from time to time by the Board of Trustees for use in connection with the determination of the Trust’s net asset value. Market Value of any asset shall include any interest or dividends, as applicable, accrued thereon. The pricing service values portfolio securities at the mean between the quoted bid and asked price or the yield equivalent when quotations are readily available. Securities for which quotations are not readily available are valued at fair value as determined by the pricing service using methods which include consideration of: yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating; indications as to value from dealers; and general market conditions. The pricing service may employ electronic data processing techniques or a matrix system, or both, to determine valuations.
“Maximum Rate” for shares of a Series of VRDP Shares on any Rate Determination Date or in respect of the occurrence of a Failed Remarketing Condition for shares of such Series, means the Applicable Percentage of the Applicable Base Rate plus the Applicable Spread. The Maximum Rate for shares of a Series of VRDP Shares will depend on the long-term preferred share rating assigned to such Series of VRDP Shares, the length of the Rate Period and whether or not the Trust 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 Trust; utilizing the lower of the ratings of the Rating Agencies then rating VRDP Shares at the request of the Trust.
** Includes unrated, if no Rating Agency is then rating VRDP Shares at the request of the Trust.
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provided, however, that in the event the Trust 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 Massachusetts individual 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, or (ii) the maximum marginal regular federal and Massachusetts 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, whichever is greater and determined on a weighted average basis in respect of the relative amounts of ordinary income and net capital gains.
The Applicable Percentage as so determined and the Applicable Spread may be subject to upward (and, if previously adjusted upward, subsequent downward) adjustment as provided in the VRDP Shares Remarketing Agreement, with the prior written consent of the Liquidity Provider and after consultation with the Remarketing Agent; provided, that, notwithstanding any provision to the contrary in the VRDP Shares Remarketing Agreement, immediately following any such upward adjustment, the Maximum Rate is equal to or higher than the rates determined subsequent to such adjustment and the Trust would be in compliance with the Minimum VRDP Shares Asset Coverage and the VRDP Shares Basic Maintenance Amount in the Rating Agency Guidelines of the Rating Agency or Rating Agencies then rating the VRDP Shares at the request of the Trust. Furthermore, in the event of Special Rate Periods of greater than 364 days, the Maximum Rate may be subject to upward (and, if previously adjusted upward, subsequent downward) adjustment as provided in the VRDP Shares Remarketing Agreement, with the prior written consent of the Liquidity Provider and after consultation with the Remarketing Agent; provided, that, notwithstanding any provision to the contrary in the VRDP Shares Remarketing Agreement, immediately following any such upward adjustment, the Maximum Rate is equal to or higher than the rates determined subsequent to such adjustment and the Trust would be in compliance with the Minimum VRDP Shares Asset Coverage and the VRDP Shares Basic Maintenance Amount in the Rating Agency Guidelines of the Rating Agency or Rating Agencies then rating the VRDP Shares at the request of the Trust.
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 Trust 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 Massachusetts individual 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, or (ii) the maximum marginal regular federal and Massachusetts 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, whichever is greater and determined on a weighted average basis in respect of the relative amounts of ordinary income and net capital gains.
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“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 Trust 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 Trust which are shares of beneficial interest, 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 Trust to maintain the Minimum VRDP Shares Asset Coverage (as required by Section 6 of Part I of this Certificate of Designation 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. and its successors.
“Moody’s Discount Factor” means the discount factors set forth in the Moody’s Guidelines for use in calculating the Discounted Value of the Trust’s assets in connection with Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
“Moody’s Eligible Assets” means assets of the Trust set forth in the Moody’s Guidelines as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
“Moody’s Guidelines” means the guidelines applicable to Moody’s current long-term preferred share ratings of the VRDP Shares, provided by Moody’s in connection with Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust (a copy of which is available on request to the Trust), 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 Trust or such earlier date as the Trust may elect.
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“Moody’s Provisions” means Sections 7, 8(c)(B) and 9 of Part I of this Certificate of Designation with respect to Moody’s, and any other provisions hereof with respect to Moody’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust, including any provisions hereof with respect to obtaining and maintaining a long-term preferred share rating on shares of a Series of VRDP Shares from
Moody’s. The Trust 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 Trust.
“Municipal Obligations” has the meaning specified in the Fee Agreement.
“Net Tax-Exempt Income” means the excess of the amount of interest excludable from gross income under Section 103(a) of the Code over the amounts disallowed as deductions under Sections 265 and 171(a)(2) of the Code.
“Notice of Proposed Special Rate Period” has the meaning specified in paragraph (c) of Section 4 of Part I of this Certificate of Designation.
“Notice of Purchase” means, as the context requires, a Preliminary Notice of Purchase or a Final Notice of Purchase, in each case, substantially in the form attached as Exhibit A to the VRDP Shares Purchase Agreement.
“Notice of Redemption” means any notice with respect to the redemption of shares of a Series of VRDP Shares pursuant to paragraph (c) of Section 10 of Part I of this Certificate of Designation.
“Notice of Revocation” means, in connection with the revocation by a Beneficial Owner or its Agent Member of its Notice of Tender, a notice, substantially in the form attached to the Tender and Paying Agent Agreement as Exhibit C, delivered by a Beneficial Owner or its Agent Member to the Tender and Paying Agent indicating an intention to revoke the tender of some or all of the shares of a Series of VRDP Shares for sale on a Purchase Date pursuant to paragraph (f) of Section 1 of Part II of this Certificate of Designation.
“Notice of Special Rate Period” has the meaning specified in paragraph (d)(i) of Section 4 of Part I of this Certificate of Designation.
“Notice of Tender” means, in connection with an Optional Tender, a notice, substantially in the form attached to the Tender and Paying Agent Agreement as Exhibit A, delivered by a Beneficial Owner or its Agent Member to the Tender and Paying Agent, indicating an intention to tender shares of a Series of VRDP Shares for sale on a Purchase Date pursuant to Section 1 of Part II of this Certificate of Designation.
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“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 Trust or the Liquidity Provider, including, at the date hereof, Moody’s and Fitch.
“Optional Tender” means any tender of shares of a Series of VRDP Shares by a Beneficial Owner or its Agent Member to the Tender and Paying Agent, other than a Mandatory Tender, for Remarketing or, in the event (i) no Remarketing occurs on or before the Purchase Date, or (ii) pursuant to an attempted Remarketing shares of a Series of VRDP Shares remain unsold and the Remarketing Agent does not purchase for its own account the unsold shares of a Series of VRDP Shares tendered to the Tender and Paying Agent for Remarketing (provided, that the Remarketing Agent may seek to sell such VRDP Shares in a subsequent Remarketing prior to the Purchase Date), for purchase by the Liquidity Provider pursuant to Part II of this Certificate of Designation and the VRDP Shares Purchase Agreement.
“Other Rating Agency” means each NRSRO, if any, other than Moody’s or Fitch then providing a short- term or long-term preferred share rating for the shares of a Series of VRDP Shares at the request of the Trust.
“Other Rating Agency Eligible Assets” means assets of the Trust set forth in the Other Rating Agency Guidelines as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with an Other Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
“Other Rating Agency Guidelines” means the guidelines applicable to each Other Rating Agency’s long- term preferred share ratings of the VRDP Shares, provided by an Other Rating Agency in connection with such Other Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust (a copy of which is available on request to the Trust), as may be amended from time to time, provided, however, that any such amendment will not be effective except as agreed between the Other Rating Agency and the Trust.
“Other Rating Agency Provisions” means Sections 7, 8(c)(B) and 9 of Part I of this Certificate of Designation with respect to any Other Rating Agency then rating shares of a Series of VRDP Shares at the request of the Trust, and any other provisions hereof with respect to such Other Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares, including any provisions with respect to obtaining and maintaining a long-term preferred share rating of shares of a Series of VRDP Shares from such Other Rating Agency. The Trust 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 Trust.
“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 Trust 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 Trust, (ii) any shares of such Series of VRDP Shares with respect to which the Trust 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 this Certificate of Designation, (iii) any shares of such Series of VRDP Shares as to which the Trust 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 Trust; 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 Trust.
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“Person” means and includes an individual, a partnership, a corporation, a trust, an unincorporated association, a joint venture or other entity or a government or any agency or political subdivision thereof.
“Preferred Shares” means the preferred shares of beneficial interest in the Trust, and includes the VRDP Shares.
“Preliminary Notice of Purchase” means a Notice of Purchase delivered by the Tender and Paying Agent to the Liquidity Provider (or directly to the Liquidity Provider by Beneficial Owners or their Agent Members if there is no Tender and Paying Agent or for any reason the Tender and Paying Agent does not perform its obligations) on the Business Day immediately preceding a Purchase Date indicating the number of shares of VRDP Shares to be purchased on the Purchase Date pursuant to the Purchase Obligation.
“Purchase Date,” with respect to any purchase of shares of a Series of VRDP Shares, means (i) in connection with an Optional Tender, the date specified in a Notice of Tender, which date shall be no earlier than the seventh (7th) day (or, if such day is not a Business Day, the next succeeding Business Day) following delivery to the Tender and Paying Agent of the Notice of Tender, (ii) in connection with a Mandatory Tender, the date specified in the Mandatory Tender Notice (or, if such day is not a Business Day, the next succeeding Business Day), subject to the immediately succeeding sentence below, or (iii) in connection with a Mandatory Purchase, the Mandatory Purchase Date specified in the Mandatory Purchase Notice (or, if such day is not a Business Day, the next succeeding Business Day). The Purchase Date in respect of a Mandatory Tender Event shall be not later than seven days following the date a Mandatory Tender Notice is sent to Holders by Electronic Means; provided, that: (A) the Purchase Date in connection with the failure of the Trust 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 Trust obtaining an Alternate VRDP Shares Purchase Agreement may not be later than the Business Day immediately preceding the termination of the VRDP Shares Purchase Agreement being replaced and the effective date of such Alternate VRDP Shares Purchase Agreement (which may not be later than the termination date of the VRDP Shares Purchase Agreement); and (D) the Purchase Date in connection with a Notice of Proposed Special Rate Period may not be later than the first (1st) day of such proposed Special Rate Period.
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“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 this Certificate of Designation or paragraph (b) of Section 4 of Part I of this Certificate of Designation.
“Rating Agency” means each of Fitch (if Fitch is then rating shares of a Series of VRDP Shares at the request of the Trust), Moody’s (if Moody’s is then rating shares of a Series of VRDP Shares at the request of the Trust) 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 Trust).
“Rating Agency Certificate” has the meaning specified in paragraph (b) of Section 7 of Part I of this Certificate of Designation.
“Rating Agency Eligible Assets” means assets of the Trust set forth in the Rating Agency Guidelines of a Rating Agency as eligible for inclusion in calculating the Discounted Value of the Trust’s assets in connection with such Rating Agency’s long-term preferred share ratings of shares of a Series of VRDP Shares at the request of the Trust.
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“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 Trust), Fitch Guidelines (if Fitch is then rating shares of a Series of VRDP Shares at the request of the Trust) 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 Trust).
“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 Trust), the Fitch Provisions (if Fitch is then rating shares of a Series of VRDP Shares at the request of the Trust) and any Other Rating Agency Provisions (if such Other Rating Agency is then rating VRDP Shares at the request of the Trust). The Trust 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 Trust.
“Redemption Date” has the meaning specified in paragraph (c) of Section 10 of Part I of this Certificate of Designation.
“Redemption Price” means the applicable redemption price specified in paragraph (a) or (b) of Section 10 of Part I of this Certificate of Designation.
“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 Trust may from time to time appoint.
“Related Documents” means this Certificate of Designation, 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 Trust 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 this Certificate of Designation.
“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.
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“Remarketing Notice” has the meaning set forth in paragraph (b) of Section 2 of Part II of this Certificate of Designation.
“Remarketing Procedures” means the procedures for conducting Remarketings set forth in Part II of this Certificate of Designation.
“Requisite NRSROs” means (i) any two NRSROs that have issued a rating with respect to a security or class of debt obligations of an issuer or (ii) if only one NRSRO has issued a rating with respect to such security or class of debt obligations of an issuer at the time a purchaser Acquires (as such term is defined from time to time in Rule 2a-7 under the 1940 Act) the security, that NRSRO.
“Scheduled Termination Date” means, with respect to a VRDP Shares Purchase Agreement for shares of a Series of VRDP Shares, 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 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 1 of Part II of this Certificate of Designation.
“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 this Certificate of Designation.
“Special Redemption Provisions” shall have the meaning specified in paragraph (a)(i) of Section 10 of Part I of this Certificate of Designation.
“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.
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“Substitute LIBOR Dealer” means any LIBOR Dealer selected by the Trust; 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 this Certificate of Designation.
“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 Trust to act in such capacity as the Trust’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, by and between the Trust 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 Trust is maintaining the VRDP Shares Basic Maintenance Amount, (i) each Friday occurring after the Date of Original Issue that is a Business Day or, for any such Friday that is not a Business Day, the immediately preceding Business Day and (ii) the Date of Original Issue.
“Voting Period” shall have the meaning specified in paragraph (b)(i) of Section 5 of Part I of this Certificate of Designation.
“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 Trust to satisfy the VRDP Shares Basic Maintenance Amount (as required by paragraph (a) of Section 7 of Part I of this Certificate of Designation) 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, by and between the Liquidity Provider and the Tender and Paying Agent, as amended, modified or supplemented, or any Alternate VRDP Shares Purchase Agreement.
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“VRDP Shares Remarketing Agreement” means the VRDP Shares remarketing agreement, dated as of June 19, 2019 by and between the Trust and the Remarketing Agent, as amended, modified or supplemented from time to time, or any similar agreement with a successor remarketing agent.
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31755835.1
The initial number of authorized shares constituting Series W-7 VRDP Shares is as set forth above under the title “Designation.”
The shares of each Series of VRDP Shares shall rank on a parity with each other, with shares of each other Series of VRDP Shares and with shares of any other Series of Preferred Shares as to the payment of dividends by the Trust.
The Holders of shares of any Series of VRDP Shares shall be entitled to receive, when, as and if declared by the Board of Trustees, out of legally available funds therefor in respect of shares of the Trust and otherwise 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 this Certificate of Designation and Section 6 of Part II of this Certificate of Designation), 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 Trust shall pay as a supplemental dividend out of legally available funds therefor in respect of shares of the Trust and otherwise in accordance with applicable law an Additional Amount (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.
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.
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:
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Each dividend rate determined in accordance with this paragraph (e)(i) of Section 2 of Part I of this Certificate of Designation shall be an “Applicable Rate.”
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 Trust 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 Trust 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 Trust pursuant to paragraph (c) of Section 10 of Part I of this Certificate of Designation; provided, however, that the foregoing clause (B) shall not apply to the Trust’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.
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In connection with each Dividend Payment Date for shares of a Series of VRDP Shares, the Trust 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 this Certificate of Designation, or as otherwise provided for and in connection with the designation of a Special Rate Period. If an aggregate amount of funds equal to the dividends to be paid to all Holders of shares of such Series on such Dividend Payment Date are not available in New York, New York by 12:00 noon, New York City time, on the Business Day immediately preceding such Dividend Payment Date, the Tender and Paying Agent will notify the Liquidity Provider by Electronic Means of such fact prior to the close of business on such day.
All Deposit Securities paid to the Tender and Paying Agent for the payment of dividends (or for the payment of any Additional Amount) shall be held in trust for the payment of such dividends (and any such Additional Amount) 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 Trust by Electronic Means of the amount of any funds deposited with the Tender and Paying Agent by the Trust 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 Additional Amount), 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 Trust or the Liquidity Provider, as the case may be, by the Tender and Paying Agent upon request by Electronic Means of the Trust or the Liquidity Provider, as the case may be. The Trust’s obligation to pay dividends to Holders in accordance with the provisions of this Certificate of Designation shall be satisfied upon payment by the Tender and Paying Agent of such dividends to the Securities Depository on the relevant Dividend Payment Date.
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31755835.1
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 Trust 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. In connection with any transfer of VRDP Shares, the transferee as Beneficial Owner of VRDP Shares shall be deemed to have agreed pursuant to the terms of the VRDP Shares to transfer to the transferor (or prior Holder) the right to receive from the Trust any dividends in the nature of Gross-up Payments that relate to dividends paid during the transferor’s (or prior Holder’s) holding period.
Any dividend payment made on shares of a Series of VRDP Shares that is insufficient to cover the entire amount of dividends payable shall first be credited against the earliest accumulated but unpaid dividends due with respect to such shares of such Series. Dividends in arrears for any past Dividend Period may be declared and paid on any date, without reference to any regular Dividend Payment Date, to the Holders on the record books of the Trust as of a record date to be fixed by the Board of Trustees, such record date not to exceed fifteen (15) days preceding the payment date of such 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 Trust, to the extent permitted by, and for purposes of, Section 852 of the Code.
Holders of shares of a Series of VRDP Shares shall be entitled to receive, when, as and if declared by the Board of Trustees, out of legally available funds therefor in respect of shares of the Trust and in accordance with the Charter and applicable law, dividends in an amount equal to the aggregate Gross-up Payments as follows:
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The Trust, at its option, may designate any Initial Rate Period or 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 Subsequent Rate Period as a Special Rate Period shall be effective only if (A) it is permitted by applicable law and the Charter, (B) notice thereof shall have been given in accordance with paragraph (d)(i) of this Section 4, (C) no shares of such Series of VRDP Shares are owned by the Liquidity Provider as Purchased VRDP Shares pursuant to the Purchase Obligation on either the Rate Determination Date for such proposed Special Rate Period or on the first (1st) day of such Special Rate Period and full cumulative dividends and any amounts due with respect to redemptions payable prior to such date have been paid in full, and (D) if any Notice of Redemption shall have been provided by the Trust pursuant to paragraph (c) of Section 10 of Part I of this Certificate of Designation 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 Trust 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 Trust shall notify Moody’s (if Moody’s is then rating shares of such Series of VRDP Shares at the request of the Trust), Fitch (if Fitch is then rating shares of such Series of VRDP Shares at the request of the Trust) 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 Trust) in advance of the commencement of such Subsequent Rate Period that the Trust wishes to designate such Subsequent Rate Period as a Special Rate Period and shall provide Moody’s (if Moody’s is then rating shares of such Series of VRDP Shares at the request of the Trust), Fitch (if Fitch is then rating shares of such Series of VRDP Shares at the request of the Trust) 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 Trust) with such documents as they may request.
In the event the Trust wishes to designate a Rate Period as a Special Rate Period, but the day that would otherwise be the last day of such Special Rate Period is not a Wednesday that is a Business Day in the case of a Series of VRDP Shares designated as “Series W-7 Variable Rate Demand Preferred Shares”, then the Special Rate Period shall end on the next Business Day following such last day and the succeeding Rate Period will end on the following Wednesday or, if the succeeding Rate Period is a Special Rate Period, it shall end on a Wednesday as designated by the Trust, 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 Period.
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If the Trust 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 Trust 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 Trust 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 Trust 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 Trust 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 as Purchased VRDP Shares pursuant to the Purchase Obligation on either the Rate Determination Date for such proposed Special Rate Period or on the first (1st) day of such Special Rate Period, 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, (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, 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 share 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 Certificate of Designation 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 Fund 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 (J) 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).
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In the event the Trust wishes to designate a Subsequent Rate Period as a Special Rate Period, the Trust shall, no later than 11:00 a.m., New York City time, on the second Business Day immediately preceding the first (1st) day of any proposed Special Rate Period for shares of a Series of VRDP Shares as to which notice has been given as set forth in paragraph (c) of this Section 4 (or such later time or date, or both, as may be agreed to by the Remarketing Agent), deliver to the Remarketing Agent and the Liquidity Provider either:
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If the Trust 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 Trust)) with respect to any designation of any Subsequent Rate Period as a 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 Trust 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 Trust 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 Trust, and the contents of such notice shall be binding on the Trust and the Holders and Beneficial Owners of the shares of such Series of VRDP Shares. In the event the Trust delivers to the Remarketing Agent and the Liquidity Provider a notice described in paragraph (d)(ii) of this Section 4, the Trust will provide Moody’s (if Moody’s is then rating the VRDP Shares in question pursuant to the request of the Trust) and Fitch (if Fitch is then rating the VRDP Shares in question pursuant to the request of the Trust) and each Other Rating Agency (if any Other Rating Agency is then rating the VRDP Shares in question pursuant to the request of the Trust) a copy of such notice.
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.
Notwithstanding any other provision in this Certificate of Designation to the contrary, the Trust may designate the Initial Rate Period a Special Rate Period on the Date of Original Issue. In the event the Trust designates the Initial Rate Period a Special Rate Period, the Trust shall deliver a Notice of Special Rate Period to the Remarketing Agent and Liquidity Provider on the Date of Original Issue and file a copy of such notice with the Secretary of the Trust, and the contents of such notice shall be binding on the Trust and the Holders and Beneficial Owners of the shares of such Series of VRDP Shares.
In the event the Trust delivers to the Remarketing Agent and the Liquidity Provider a Notice of Special Rate Period, it shall deliver, concurrently with the delivery thereof to the Remarketing Agent and the Liquidity Provider, such Notice of Special Rate Period to the Holders of the shares of such Series of VRDP Shares. During the term of the Special Rate Period, the Trust 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 Trust has been notified of any such transfer and has been provided the contact information of such Holder or Beneficial Owner, as applicable.
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In the event of any conflict between the terms of the Notice of Special Rate Period and the terms of this Certificate of Designation, the terms of the Notice of Special Rate Period shall govern.
Except as may be otherwise provided in a Notice of Special Rate Period, 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.
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 shareholders of the Trust, and (ii) the holders of outstanding Preferred Shares, including each share of a Series of VRDP Shares, and of Common Shares shall vote together as a single class; provided, however, that the holders of outstanding Preferred Shares, including VRDP Shares, voting together as a class, to the exclusion of the holders of all other securities and classes of shares of beneficial interest in the Trust, shall be entitled to elect two trustees of the Trust 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 trustees.
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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).
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The Trust is not required to maintain any particular short-term or long-term preferred share ratings for a Series of VRDP Shares; provided, however, except as otherwise specified in any Notice of Special Rate Period, the Trust will use its reasonable best efforts to maintain at least one short-term preferred share rating of the VRDP Shares to the extent that the Liquidity Provider then has a short-term debt rating, and the Board of Trustees may, subject to this Section 5(d), at any time, terminate the services of a Rating Agency then providing a short-term or long-term preferred share 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 shareholders of the Trust. The Trust 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 Trust.
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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.
The Holders of VRDP Shares shall have no preemptive rights or rights to cumulative voting.
In the event that the Trust 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 trustees pursuant to the provisions of this Section 5.
For purposes of determining any rights of the Holders to vote on any matter, whether such right is created by this Certificate of Designation, 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 this Certificate of Designation and Deposit Securities in an amount equal to the Redemption Price for the redemption of such VRDP Shares shall have been deposited in trust with the Tender and Paying Agent. VRDP Shares held (legally or beneficially) by the Trust or any affiliate of the Trust or otherwise controlled by the Trust 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.
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To the fullest extent permitted by applicable law, each Holder and Beneficial Owner may in its discretion grant an irrevocable proxy.
The Trust shall maintain, as of the last Business Day of each month in which any VRDP Share is Outstanding, the Minimum VRDP Shares Asset Coverage.
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Except as set forth in the next sentence, no dividends shall be declared or paid or set apart for payment on the shares of any class or series of shares of beneficial interest in the Trust ranking, as to the payment of dividends, on a parity with the VRDP Shares for any period unless full cumulative dividends have been or contemporaneously are declared and paid on the shares of each Series of VRDP Shares through its most recent Dividend Payment Date. When dividends are not paid in full upon the shares of each Series of VRDP Shares through its most recent Dividend Payment Date or upon the shares of any other class or series of shares of beneficial interest in the Trust ranking on a parity as to the payment of dividends with the VRDP Shares through their most recent respective dividend payment dates, all dividends declared upon the VRDP Shares and any other such class or series of shares of beneficial interest in the Trust ranking on a parity as to the payment of dividends with the VRDP Shares shall be declared pro rata so that the amount of dividends declared per share on the VRDP Shares and such other class or series of shares of beneficial interest in the Trust shall in all cases bear to each other the same ratio that accumulated dividends per share on the VRDP Shares and such other class or series of shares of beneficial interest in the Trust 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).
The Board of Trustees shall not declare any dividend (except a dividend payable in Common Shares), or declare any other distribution, upon the Common Shares, or purchase Common Shares, unless in every such case the Preferred Shares have, at the time of any such declaration or purchase, an asset coverage (as defined in and determined pursuant to the 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.
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 Part I of this Certificate of Designation, (A) the Trust shall not declare, pay or set apart for payment any dividend or other distribution (other than a dividend or distribution paid in shares of, or in options, warrants or rights to subscribe for or purchase, Common Shares or other shares, if any, ranking junior to the 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 Trust 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 Trust 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 Trust 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 Trust has redeemed the full number of VRDP Shares required to be redeemed by any provision for mandatory redemption pertaining thereto, and (B) the Trust shall not declare, pay or set apart for payment any dividend or other distribution (other than a dividend or distribution paid in shares of, or in options, warrants or rights to subscribe for or purchase, Common Shares or other shares, if any, ranking junior to 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 Trust 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 Trust 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 Trust), Fitch Eligible Assets (if Fitch is then rating the VRDP Shares at the request of the Trust) and Other Rating Agency Eligible Assets (if any Other Rating Agency is then rating the VRDP Shares at the request of the Trust) would each at least equal the VRDP Shares Basic Maintenance Amount for such Series.
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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 Trust, the Trust 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.
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45
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31755835.1
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31755835.1
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
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If the Trust 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 Trust 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 Trust 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 Trust to the Tender and Paying Agent in electronic format at least five (5) Business Days prior to the date a Notice of Redemption is required to be delivered to the Holders, unless a shorter period of time shall be acceptable to the Tender and Paying Agent. A Notice of Redemption shall be sent to Holders not less than ten (10) days prior to the date fixed for redemption in such Notice of Redemption (the “Redemption Date”). Each such Notice of Redemption shall state: (i) the Redemption Date; (ii) the number of shares of such Series of VRDP Shares to be redeemed and the Series thereof; (iii) the CUSIP number for the VRDP Shares of such Series; (iv) the Redemption Price; (v) the place or places where the certificate(s), if any, for such VRDP Shares (properly endorsed or assigned for transfer, if the Board of Trustees 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 this Certificate of Designation 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 Trust may provide in any Notice of Redemption relating to an optional redemption contemplated to be effected pursuant to Section 10(a) of this Certificate of Designation, including any redemption of VRDP Shares to be optionally redeemed under Section 10(a) as contemplated in Section 10(b)(i) of this Certificate of Designation, that such redemption is subject to one or more conditions precedent not otherwise expressly stated herein and that the Trust 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.
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 Trust 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.
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To the extent that any redemption for which a Notice of Redemption has been provided is not made by reason of the absence of legally available funds therefor in respect of shares of the Trust and in accordance with the Charter and applicable law, such redemption shall be made as soon as practicable to the extent such funds become available. A failure to redeem shares of a Series of VRDP Shares shall be deemed to exist at any time after the date specified for redemption in a Notice of Redemption when the Trust 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 Trust’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 Trust 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.
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. The Trust’s obligation to pay the Redemption Price of VRDP Shares called for redemption in accordance with this Certificate of Designation shall be satisfied upon payment of such Redemption Price by the Tender and Paying Agent to the Securities Depository on the relevant Redemption Date.
Provided a Notice of Redemption has been provided pursuant to paragraph (c) of this Section 10, the Trust shall irrevocably (except to the extent set forth below in this paragraph (g)) deposit with the Tender and Paying Agent, no later than 12:00 noon, New York City time, on a Business Day not less than ten (10) Business Days preceding the Redemption Date specified in such notice, Deposit Securities in an aggregate amount equal to the Redemption Price to be paid on the Redemption Date in respect of any shares of a Series of VRDP Shares that are subject to such notice. Provided a Notice of Redemption has been provided pursuant to paragraph (c) of this Section 10, upon the deposit with the Tender and Paying Agent of Deposit Securities in an amount sufficient to redeem the shares of a Series of VRDP Shares that are the subject of such notice, dividends on such shares of a Series of VRDP Shares shall cease to accumulate as of the Redemption Date and shares of a Series of VRDP Shares shall no longer be deemed to be Outstanding, except as noted below with respect to the VRDP Shares Purchase Agreement, for any purpose, and all rights of the Holders of the shares of a Series of VRDP Shares so called for redemption shall cease and terminate, except the right of such Holders to receive the Redemption Price, but without any interest or other additional amount, except as provided in paragraph (e)(i) of Section 2 of this Part I and in Section 3 of Part I of this Certificate of Designation. 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 Trustees 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 Trust 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 Trust, after which time the Holders of shares of a Series of VRDP Shares so called for redemption may look only to the Trust for payment of the Redemption Price and all other amounts to which they may be entitled. The Trust 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 Trust.
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In effecting any redemption pursuant to this Section 10, the Trust shall use its best efforts to comply with all applicable conditions precedent to effecting such redemption under the 1940 Act and any applicable Massachusetts or other applicable law, but shall effect no redemption except in accordance with the 1940 Act and any applicable Massachusetts or other applicable law.
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.
Notwithstanding the foregoing provisions of this Section 10, the Trust may, in its sole discretion, modify the procedures set forth above with respect to notification of redemption of VRDP Shares, provided that such modification does not materially and adversely affect the Holders of the VRDP Shares or cause the Trust 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 Trustees, 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 Trustees, without shareholder approval, by resolution and with the prior written consent of the Liquidity Provider may modify such redemption procedures.
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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 Trust.
Upon the dissolution, liquidation or winding up of the affairs of the Trust, 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 Trust legally available for distribution to its shareholders and otherwise in accordance with applicable law, before any payment or distribution shall be made on the Common Shares or on any other class of shares of the Trust ranking junior to the 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 this Certificate of Designation in connection with the liquidation of the Trust. After the payment to the Holders of the VRDP Shares of the full preferential amounts provided for in this paragraph (b), the Holders of the VRDP Shares as such shall have no right or claim to any of the remaining assets of the Trust.
In the event the assets of the Trust available for distribution to the Holders of the VRDP Shares upon any dissolution, liquidation or winding up of the affairs of the Trust, whether voluntary or involuntary, shall be insufficient to pay in full all amounts to which such Holders are entitled pursuant to paragraph (b) of this Section 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.
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 Trust, after payment shall have been made in full to the Holders of the VRDP Shares as provided in paragraph (b) of this Section 11, but not prior thereto, any other series or class or classes of shares ranking junior to the VRDP Shares with respect to the distribution of assets upon dissolution, liquidation or winding up of the affairs of the Trust shall, subject to the respective terms and provisions (if any) applying thereto, be entitled to receive any and all assets remaining to be paid or distributed, and the Holders of the VRDP Shares shall not be entitled to share therein.
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Neither the sale of all or substantially all the property or business of the Trust, nor the merger, consolidation or reorganization of the Trust 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 Trust shall be a dissolution, liquidation or winding up, whether voluntary or involuntary, for the purposes of this Section 11.
As long as shares of any Series of VRDP Shares are Outstanding, the Trust 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 Trust can do so on a commercially reasonable basis as determined in the sole discretion of the Board of Trustees. If the Trust 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:
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The provisions of paragraphs (a) through (g) of this Section 12 may be amended by the Board of Trustees, by resolution duly adopted, without shareholder approval in order to conform to a VRDP Shares Purchase Agreement providing a Purchase Obligation.
Subject to the provisions of Section 9 of Part I of this Certificate of Designation, the Board of Trustees may, by resolution duly adopted, without shareholder approval (except as otherwise provided by this Certificate of Designation or required by applicable law), amend or supplement this Certificate of Designation to (1) reflect any amendments or supplements hereto which the Board of Trustees is entitled to adopt pursuant to the terms of this Certificate of Designation without shareholder approval or (2) designate additional Series of VRDP Shares (and terms relating thereto). Each such additional Series shall be governed by the terms of this Certificate of Designation as so amended or supplemented.
No fractional shares of a Series of VRDP Shares shall be issued.
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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.
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 Trust for U.S. federal income tax purposes.
To the extent permitted by applicable law, the Board of Trustees may interpret or adjust the provisions of this Certificate of Designation to resolve any inconsistency or ambiguity or to remedy any formal defect, and may amend this Certificate of Designation with respect to VRDP Shares prior to the issuance of such VRDP Shares.
The headings contained in this Certificate of Designation are for convenience of reference only and shall not affect the meaning or interpretation of this Certificate of Designation.
All notices or communications, unless otherwise specified in the By-laws of the Trust or this Certificate of Designation, shall be sufficiently given if in writing and delivered in person, by Electronic Means or mailed by first- class mail, postage prepaid.
To the extent any of the Rating Agency Provisions, Rating Agency Guidelines, asset coverage or leverage requirements of the Rating Agencies or any definition that incorporates a meaning set forth in any of the Rating Agency Guidelines are no longer required or used by a Rating Agency then rating the VRDP Shares in such Rating Agency’s rating methodology or Rating Agency Guidelines, then such provisions, guidelines, requirements, or definitions shall have no effect under this Certificate of Designation, and notwithstanding anything herein to the contrary, the Board may remove any such provisions, guidelines, requirements or definitions from this Certificate of Designation without the vote, consent or approval of the Beneficial Owners or Holders of Preferred Shares, including any Series of VRDP Shares, or any other shareholder of the Trust.
Notwithstanding anything expressed or implied to the contrary in this Certificate of Designation, all dividends, redemptions and other payments by the Trust on or in respect of the VRDP Shares shall be paid only out of legally available funds therefor in respect of shares of the Trust and otherwise in accordance with applicable law.
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31755835.1
For purposes of the section entitled “Designation” contained in this Certificate of Designation and all of the provisions in this Certificate of Designation and any Notice of Special Rate Period relating to any “distribution” as defined in section 1.40 of the Massachusetts Business Corporation Act (M.G.L. ch. 156D) (the “Massachusetts Business Corporation Act”) on or in respect of the VRDP Shares, including, without limitation, Sections 2, 3, 10, 11 and 13(j) of Part I of this Certificate of Designation, “applicable law” shall include section 6.40 of the Massachusetts Business Corporation Act, including any successor provisions, as if the Trust were a Massachusetts corporation subject to the Massachusetts Business Corporation Act and the VRDP Shares were shares of a Massachusetts corporation subject to the Massachusetts Business Corporation Act. Accordingly, and without limiting the scope of the preceding sentence, any “distribution” as defined in section 1.40 of the Massachusetts Business Corporation Act on or in respect of the VRDP Shares, including, without limitation, pursuant to Sections 2, 3, 10 and 11 of Part I of this Certificate of Designation, shall be subject to the restrictions and limitations of section 6.40 of the Massachusetts Business Corporation Act, including any successor provisions as if the Trust were a Massachusetts corporation subject to the Massachusetts Business Corporation Act. Notwithstanding the foregoing, the Trust is not a Massachusetts Business Corporation and is not otherwise subject to the Massachusetts Business Corporation Act.
The Charter is on file with the Secretary of The Commonwealth of Massachusetts and provides that the name “Trustees” refers to the trustees under the Charter collectively as trustees, but not as individuals or personally; and no trustee, shareholder, officer, employee or agent of the Trust shall be held to any personal liability, nor shall resort be had to their private property for the satisfaction of any obligation or claim or otherwise in connection with the affairs of the Trust, but the Trust property only shall be liable.
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(a) Pursuant to an Optional Tender, Beneficial Owners may elect to tender their VRDP Shares (in one or more shares) for purchase at the Purchase Price on the Purchase Date designated in the Notice of Tender (or, if such day is not a Business Day, on the next succeeding Business Day) by an effective delivery of a Notice of Tender to the Tender and Paying Agent. Each Notice of Tender shall be irrevocable (except as described below) and effective upon receipt by the Tender and Paying Agent and shall:
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In the event of a Failed Remarketing Condition, pursuant to the Tender and Paying Agent Agreement, the Tender and Paying Agent shall provide notice of a Failed Remarketing Condition promptly, but in any event within two (2) Business Days of receipt by the Tender and Paying Agent of notice from the Trust 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 Trust).
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 Trust, the Tender and Paying Agent or any Remarketing Agent shall be obligated in any case to provide funds to make payment to a Beneficial Owner or its Agent Member upon such Beneficial Owner’s tender of its shares of a Series of VRDP Shares in a Remarketing unless, in each case, such shares of such Series of VRDP Shares were acquired for the account of the Trust, the Tender and Paying Agent or the Remarketing Agent.
Whenever the Trust 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 Trust shall (except as provided below) notify the Remarketing Agent and Tender and Paying Agent of the amount to be so included (i) not later than fourteen (14) calendar days preceding the first Rate Determination Date on which the Applicable Rate for such dividend is to be established, and (ii) for any successive Rate Determination Date on which the Applicable Rate for such dividend is to be established, not later than the close of business on the immediately preceding Rate Determination Date. Whenever such advance notice is received from the Trust, 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 Trust 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 Trust 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.
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Investment Adviser in riskless principal transactions with respect to such purchases of shares of a Series of VRDP Shares.
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 Trust to any Person other than the Securities Depository or its nominee. The foregoing restriction on registration of transfer shall be conspicuously noted on the face or back of the certificates of VRDP Shares in such a manner as to comply with the requirements of Section 8- 204 of the Uniform Commercial Code as in effect in The Commonwealth of Massachusetts, or any successor provisions.
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