EX-99(k)(ii)
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
_______________________________________________
AUCTION AGENCY AGREEMENT
dated as of March __, 2003
Relating to
Series C Auction Rate Cumulative Preferred Stock
of
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
______________________________________________
The Bank of New York,
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of March
__, 2003, is between The Gabelli Convertible and Income Securities Fund Inc.
(the "Corporation") and The Bank of New York, a New York banking corporation,
as Auction Agent (as defined below).
The Corporation proposes to issue an aggregate of 1,000 preferred
shares, par value $0.001 per share, liquidation preference $25,000 per share,
designated as Series C Auction Rate Cumulative Preferred Shares (the
"Preferred Shares"), pursuant to the Articles Supplementary (as defined
below).
The Corporation desires that the Auction Agent perform certain
duties as agent in connection with each Auction (as defined below) (in such
capacity, the "Auction Agent"), and as the transfer agent, registrar, dividend
paying agent and redemption price disbursing agent with respect to the
Preferred Shares (in such capacity, the "Paying Agent"), upon the terms and
conditions of this Agreement, and the Corporation hereby appoints The Bank of
New York as said Auction Agent.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the Corporation and the Auction Agent agree as
follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined By Reference to Articles Supplementary.
Capitalized terms not defined herein shall have the respective
meanings specified in the Articles Supplementary.
1.2 Terms Defined Herein.
As used herein and in the Settlement Procedures, each of the
following terms shall have the meaning ascribed to it below, unless the
context otherwise requires:
(a) "Agent Member" of any Person shall mean the member of, or
participant in, the Securities Depository that will act on behalf of a Bidder.
(b) "Agreement" shall mean this Agreement.
(c) "Articles Supplementary" shall mean the Articles
Supplementary Creating and Fixing the Rights of the Series C Auction Rate
Cumulative Preferred Stock.
(d) "Auction" shall have the meaning specified in Section 2.1
hereof.
(e) "Auction Procedures" shall mean the auction procedures
constituting Article II of the Articles Supplementary as of the filing
thereof.
(f) "Authorized Officer" of the Auction Agent shall mean each
Vice President, Assistant Vice President and Assistant Treasurer of the
Auction Agent assigned to the Dealing and Trading Group of its Corporate Trust
Department and every other officer or employee of the Auction Agent designated
as an "Authorized Officer" for purposes hereof in a written communication to
the Corporation.
(g) "Broker-Dealer Agreement" shall mean each agreement between
the Auction Agent and a Broker-Dealer substantially in the form attached
hereto as Exhibit A.
(h) "Commercial Paper Dealers" shall mean (i) Xxxxxxx Xxxxx
Xxxxxx Inc., Xxxxxx Brothers Inc., Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated and Xxxxxxx Xxxxx & Co.; (ii) in lieu of any thereof, its
respective affiliate or successor; and (iii) in the event that any of the
foregoing shall cease to quote rates for commercial paper of issuers of the
sort described above, in substitution therefor, a nationally recognized dealer
in commercial paper of such issuers then making such quotations selected by
the Corporation
(i) "Corporate Officer" shall mean the Chairman and Chief
Executive Officer, the President, each Vice President (whether or not
designated by a number or word or words added before or after the title "Vice
President"), the Secretary, the Treasurer, each Assistant Vice President, each
Assistant Secretary and each Assistant Treasurer of the Corporation and every
other officer or employee of the Corporation designated as a "Corporate
Officer" for purposes hereof in a notice to the Auction Agent.
(j) "Preferred Shares" shall mean the preferred shares, par
value $.001 per share, of the Corporation designated as its "Series C Auction
Rate Cumulative Preferred Shares" and bearing such further designation as to
series as the Board of Directors, as the case may be, of the Corporation or
any committee thereof shall specify.
(k) "Rate Multiple" has the meaning provided in Section 2.6.
(l) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(m) "U.S. Government Securities Dealers" has the meaning
provided in Section 2.6(a)(v).
1.3 Rules of Construction.
Unless the context or use indicates another or different meaning or
intent, the following rules shall apply to the construction of the Agreement:
(a) Words importing the singular number shall include the plural
number and vice versa.
(b) The captions and headings herein are solely for convenience
of reference and shall not constitute a part of the Agreement nor shall they
affect its meaning, construction or effect.
(c) The words "hereof", "herein", "hereto" and other words of
similar import refer to the Agreement as a whole.
(d) All references herein to a particular time of day shall be
to New York City time.
2. The Auction.
2.1 Purpose; Incorporation by Reference of Auction Procedures and
Settlement Procedures.
(a) The Board of Directors of the Corporation has adopted a
resolution appointing The Bank of New York as Auction Agent for purposes of
the Auction Procedures. The Auction Agent hereby accepts such appointment and
agrees that, on each Auction Date, it shall follow the procedures set forth in
this Section 2 and the Auction Procedures for the purpose of determining the
Applicable Rate of the Preferred Shares for any Dividend Period after the
initial Dividend Period. Each periodic operation of such procedures is
hereinafter referred to as an "Auction."
(b) All of the provisions contained in the Auction Procedures
and the Settlement Procedures are incorporated herein by reference in their
entirety and shall be deemed to be a part hereof to the same extent as if such
provisions were fully set forth herein.
2.2 Preparation for Each Auction; Maintenance of Registry of
Beneficial Owners.
(a) Not later than seven days prior to the first Auction Date
for the Preferred Shares subject to an Auction, the Corporation shall provide
the Auction Agent with a list of the Broker-Dealers. Not later than seven days
prior to any Auction Date for the Preferred Shares for which any change in
such list of Broker- Dealers is to be effective, the Corporation will notify
the Auction Agent in writing of such change and, if any such change involves
the addition of a Broker-Dealer to such list, shall cause to be delivered to
the Auction Agent for execution by the Auction Agent a Broker-Dealer Agreement
in the form of Exhibit A signed by such Broker- Dealer; provided, however,
that if the Corporation proposes to designate any Special Dividend Period of
the Preferred Shares pursuant to Section 4 of Article I of the Articles
Supplementary, not later than 11:00 A.M. on the Business Day immediately
preceding the last Auction Date prior to the first day of such Dividend Period
or by such later time or date, or both, as may be agreed to by the Auction
Agent, the Corporation shall provide the Auction Agent with a list of the
Broker-Dealers for the Preferred Shares and a manually signed copy of each
Broker-Dealer Agreement or a new Schedule A to a Broker-Dealer Agreement
(which Schedule A shall replace and supersede any previous Schedule A to such
Broker-Dealer Agreement) with each Broker-Dealer. The Auction Agent, as Agent
of the Corporation, shall have entered into a Broker-Dealer Agreement with
each Broker-Dealer prior to the participation of any such Broker-Dealer in any
Auction.
(b) In the event that any Auction Date for the Preferred Shares
shall be changed after the Auction Agent shall have given the notice referred
to in clause (vii) of paragraph (a) of the Settlement Procedures, the Auction
Agent, by such means as the Auction Agent deems practicable, shall give notice
of such change to the Broker-Dealers not later than the earlier of 9:15 A.M.
on the new Auction Date or 9:15 A.M. on the old Auction Date.
(c)(i) The Auction Agent shall maintain a registry of Persons
that are Broker-Dealers, compiled initially on the date hereof, and that
hold Preferred Shares for purposes of Auctions. The Auction Agent shall
indicate thereon the identity of the Broker-Dealer that submitted the
most recent Order in any Auction which resulted in such Existing Holder
continuing to hold or purchasing the Preferred Shares. The Auction Agent
shall keep such registry current and accurate based on the information
provided to it from time to time by the Broker-Dealer. The Corporation
shall provide or cause to be provided to the Auction Agent at or prior
to the Date of Original Issue of the Preferred Shares a list of the
initial Existing Holders of the Preferred Shares, the number of shares
purchased by each such Existing Holder and the respective Broker-Dealer
of each such Existing Holder or the affiliate thereof through which each
such Existing Holder purchased such shares. The Auction Agent may rely
upon, as conclusive evidence of the identities of the Existing Holders
of Preferred Shares (A) such list, (B) a list of Holders as a result of
Auctions, (C) notices from any Broker-Dealer as described in the first
sentence of Section 2.2(c)(iii) hereof and (D) the results of any
procedures approved by the Corporation that have been devised for the
purpose of determining the identities of Existing Holders in situations
where Preferred Shares may have been transferred without compliance with
any restriction on the transfer thereof set forth in the Auction
Procedures.
(ii) In the event of any partial redemption of the Preferred
Shares and the Auction Agent's receipt of written notice of such partial
redemption thereof, the Auction Agent shall, at least two Business Days
prior to the next Auction, request each Broker-Dealer to provide the
Auction Agent with a list of Persons who such Broker-Dealer believes
should remain Existing Holders after such redemption based upon
inquiries of those Persons such Broker-Dealer believes are Beneficial
Owners as a result of the most recent Auction and with respect to each
such Person, the number of Preferred Shares such Broker-Dealer believes
are owned by such Person after such redemption. In the absence of
receiving any such information from any Broker-Dealer, the Auction Agent
may continue to treat the Existing Holders listed in its registry as the
beneficial owners of the number of Preferred Shares shown in such
registry.
(iii) The Auction Agent shall be required to register a transfer
of Preferred Shares from an Existing Holder of such Preferred Shares
only if such transfer is to another Existing Holder, or other Person if
permitted by the Corporation, and only if such transfer is made (A)
pursuant to an Auction, (B) the Auction Agent has been notified in
writing (1) in a notice substantially in the form of Exhibit B to the
Broker-Dealer Agreements by a Broker-Dealer of such transfer or (2) in a
notice substantially in the form of Exhibit C to the Broker-Dealer
Agreements by the Broker-Dealer of any Existing Holder, or other Person
if permitted by the Corporation, that purchased or sold such Preferred
Shares in an Auction of the failure of such Preferred Shares to be
transferred as a result of such Auction or (C) pursuant to procedures
approved by the Corporation that have been devised for the purpose of
determining the identities of Existing Holders in situations where
Preferred Shares may have been transferred without compliance with any
restriction on the transfer thereof set forth in the Auction Procedures.
The Auction Agent is not required to accept any such notice for an
Auction unless it is received by the Auction Agent by 3:00 P.M. on the
Business Day preceding such Auction.
(d) The Auction Agent may, but shall have no obligation to,
request the Broker-Dealers, as set forth in the Broker-Dealer Agreements, to
provide the Auction Agent with a list of Persons who such Broker-Dealer
believes should be Existing Holders based upon inquiries of those Persons such
Broker-Dealer believes are Beneficial Owners as a result of the most recent
Auction and with respect to each such Person, the number of Preferred Shares
such Broker-Dealer believes to be owned by such Person. The Auction Agent
shall keep confidential such registry of Existing Holders and shall not
disclose the identities of the Existing Holders of such Preferred Shares to
any Person other than the Corporation and the Broker-Dealer that provided such
information; provided, however, that the Auction Agent reserves the right and
is authorized to disclose any such information if (a) it is ordered to do so
by a court of competent jurisdiction or a regulatory body, judicial or
quasi-judicial agency or authority having the authority to compel such
disclosure, (b) it is advised by its counsel that its failure to do so would
be unlawful or (c) failure to do so would expose the Auction Agent to loss,
liability, claim, damage or expense for which it has not received indemnity or
security satisfactory to it.
2.3 Auction Schedule.
The Auction Agent shall conduct Auctions in accordance with the
schedule set forth below. Such schedule may be changed by the Auction Agent
with the consent of the Corporation, which consent shall not be unreasonably
withheld. The Auction Agent shall give written notice of any such change to
each Broker- Dealer. Such notice shall be given prior to the close of business
on the Business Day immediately preceding the first Auction Date on which any
such change shall be effective.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Corporation
and Broker-Dealers of (i) the
applicable Maximum Rate and (ii)
when applicable, the Reference Rate or
the Treasury Index Rate, used in
determining such Maximum Rate as set
forth in Section 2.6(b)(i) hereof.
9:30 A.M. - 1:00 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers
as provided in Section 2(a) of the
Auction Procedures. Submission
Deadline is 1:00 P.M.
Not earlier than 1:00 P.M. Auction Agent makes determinations pursuant
to Section 4(a) of the Auction Procedures.
By approximately 3:30 P.M. Auction Agent advises Corporation of
results of Auction as provided in
Section 4(b) of the Auction Procedures.
Submitted Bids and Submitted Sell
Orders are accepted and rejected in
whole or in part and Preferred Shares
allocated as provided in Section 5 of the
Auction Procedures. Auction Agent
gives notice of Auction results as set
forth in paragraph (a) of the Settlement
Procedures.
The Auction Agent shall follow the notification procedures set forth in
paragraph (a) of the Settlement Procedures.
2.4 Notice of Auction Results.
The Auction Agent will advise each Broker-Dealer who submitted a
Bid or Sell Order in an Auction whether such Bid or Sell Order was accepted or
rejected in whole or in part and of the Applicable Rate for the next Dividend
Period for the related Preferred Shares by telephone or through its auction
processing system as set forth in paragraph (a) of the Settlement Procedures.
2.5 Broker-Dealers.
(a) No later than 12:00 noon on each Auction Date for Preferred
Shares, the Corporation shall pay to the Auction Agent an amount in cash equal
to the aggregate fees payable to the Broker-Dealers pursuant to Section 2.8 of
the Broker-Dealer Agreements. The Auction Agent shall apply such moneys as set
forth in Section 2.8 of each such Broker-Dealer Agreement.
(b) The Corporation shall obtain the consent of the Auction
Agent prior to selecting any Person to act as a Broker-Dealer, which consent
shall not be unreasonably withheld.
(c) The Auction Agent shall terminate any Broker-Dealer
Agreement as set forth therein if so directed by the Corporation, provided
that at least one Broker-Dealer Agreement would be in effect for the Preferred
Shares after such termination.
(d) Subject to the Auction Agent's having consented to the
selection of the relevant Broker-Dealer pursuant to Section 2.5(b) hereof, the
Auction Agent shall from time to time enter into such Broker-Dealer Agreements
in the form attached hereto as Exhibit A with one or more Broker-Dealers as
the Corporation shall request, and shall enter into such schedules to any such
Broker-Dealer Agreements as the Corporation shall request.
2.6 Information Concerning Rates.
(a) If there is any change in the credit rating of Preferred
Shares by the rating agency (or substitute or successor rating agencies),
referred to in the definition of "Maximum Rate," that results in any change in
the applicable percentage of the "AA" Financial Composite Commercial Paper
Rate used to determine the Maximum Rate for Preferred Shares (the "Rate
Multiple"), the Corporation shall notify the Auction Agent in writing of such
change in the Rate Multiple prior to 12:00 noon on the Business Day prior to
the next Auction Date succeeding such change. On the date hereof the Rate
Multiple is 150%. If the Corporation designates all or a portion of any
dividend on Preferred Shares to consist of net capital gains or other income
taxable for Federal income tax purposes, it will indicate, in a notice in the
form of Exhibit H hereto to the Auction Agent pursuant to Section 2.6 hereof,
the Rate Multiple to be in effect for the Auction Date on which the dividend
rate for such dividend is to be fixed. In determining the Maximum Rate on any
Auction Date, the Auction Agent shall be entitled to rely on the last Rate
Multiple for Preferred Shares of which it has most recently received notice
from the Corporation (or, in the absence of such notice, the percentage
determined by reference to the definition of Rate Multiple), except that if
the Corporation shall have notified the Auction Agent of a Rate Multiple to be
in effect for an Auction Date in accordance with the preceding sentence, the
Rate Multiple in effect for the next succeeding Auction Date shall be, unless
the Corporation notifies the Auction Agent of a change in the Rate Multiple
for such succeeding Auction Date pursuant to this Section 2.6(a), the Rate
Multiple that was in effect on the first preceding Auction Date for Preferred
Shares with respect to which the dividend, the rate for which was fixed on
such Auction Date, did not include any net capital gain or other income
taxable for Federal income tax purposes.
On each Auction Date, the Auction Agent shall determine the Maximum
Rate. Not later than 9:30 A.M. on each Auction Date the Auction Agent shall
notify the Corporation and the Broker-Dealers of the Maximum Rate and the "AA"
Financial Composite Commercial Paper Rate and Treasury Index Rate, as the case
may be, used to make such determination.
2.7 Designation of Special Dividend Period.
(a) No designation is necessary for a Standard Dividend Period,
which shall last seven calendar days.
(b) Pursuant to the Articles Supplementary, the Corporation may,
at its option, designate a Special Dividend Period for the Preferred Shares in
the manner described in Section 4 of Article I of the Articles Supplementary.
(i) If the Board of Directors proposes to designate any
Dividend Period as a Special Dividend Period, (A) the Corporation shall
deliver to the Auction Agent a notice of such proposed Special Dividend
Period in the form of Exhibit C hereto not less than seven Business Days
(or two Business Days in the event the duration of the Dividend Period
prior to the Special Dividend Period is less than eight Business Days)
nor more than 30 Business Days prior to the first day of the Special
Dividend Period and (B) the Auction Agent on behalf of the Corporation
shall deliver such notice by first-class mail, postage prepaid, to each
Existing Holder of Preferred Shares at the address set forth for such
Existing Holder in the records of the Auction Agent and to the
Broker-Dealers as promptly as practicable after its receipt of such
notice from the Corporation.
(ii) If the Corporation determines to designate such Dividend
Period as a Special Dividend Period, (A) the Corporation shall deliver
to the Auction Agent a notice of such determination in the form of
Exhibit D hereto not later than 3:00 P.M. on the second Business Day
immediately preceding the first day of such proposed Special Dividend
Period and (B) the Auction Agent shall deliver such notice to the
Broker- Dealers promptly on such second Business Day.
(iii) If the Corporation shall deliver to the Auction Agent a
notice not later than 3:00 P.M. on the second Business Day immediately
preceding the first day of such proposed Special Dividend Period stating
that the Corporation has determined not to exercise its option to
designate such Dividend Period as a Special Dividend Period, in the form
of Exhibit E hereto, or shall fail to timely deliver either such notice
or a notice in the form of Exhibit D hereto, the Auction Agent shall
deliver a notice in the form of Exhibit E hereto to the Broker-Dealers
promptly on such second Business Day. If the Corporation fails to
deliver either such notice provided in this Section 2.7(b) hereof by
3:00 P.M., the Corporation shall be deemed to have delivered a notice to
the Auction Agent with respect to such Dividend Period to the effect set
forth in this Section 2.7(b)(iii), thereby resulting in a Standard
Dividend Period.
Such change in the length of any Dividend Period shall not occur if
(1) an Auction for Preferred Shares shall not be held on such Auction Date for
any reason or (2) an Auction for Preferred Shares shall be held on such
Auction Date but Sufficient Clearing Bids for Preferred Shares shall not exist
in such Auction.
2.8 Default.
In the event the Fund fails to deliver amounts to the Auction Agent
in accordance with the Articles Supplementary, which failure, but for the Fund
delivering such amounts plus all applicable late charges to the Auction Agent
by the applicable Cure Date, would result in a Default (a "Potential
Default"), (a) all amounts payable by the Fund to the holders of Preferred
Shares with respect to such Potential Default or Default, (b) the dividend
rate or dividend rates applicable to the Dividend Period or Dividend Periods
with respect to which such Potential Default or Default occurs, and (c) the
dividend rate for the Dividend Period immediately following the Dividend
Period during which all amounts payable by the Fund (including, without
limitation, any Dividend Rate applicable to such period that is not determined
at Auction, and applicable late charges, together, the "Late Charge") with
respect to such Potential Default or Default are delivered by the Fund to the
Auction Agent, shall be as set forth in the Articles Supplementary.
2.9 Ownership of Shares of Preferred Shares.
Neither the Corporation nor any affiliate of the Corporation shall
submit any Order in any Auction for Preferred Shares, except as set forth in
the next sentence. Any Broker-Dealer that is an affiliate of the Corporation
may submit Orders in Auctions, but only if such Orders are not for its own
account. For purposes of this Section 2.9, a Broker-Dealer shall not be deemed
to be an affiliate of the Corporation solely because one or more of the
directors or executive officers of such Broker-Dealer or of any Person
controlled by, in control of or under common control with such Broker-Dealer
is also a director of the Corporation. The Auction Agent shall have no duty or
liability with respect to the enforcement or otherwise of this Section 2.9.
2.10 Intentionally Omitted.
2.11 Access to and Maintenance of Auction Records.
The Auction Agent shall afford to the Corporation, its agents,
independent public accountants and counsel and the Broker-Dealers, access at
reasonable times during normal business hours to review and make extracts or
copies of all books, records, documents and other information concerning the
conduct and results of Auctions (at no cost to the Auction Agent), provided
that any such agent, accountant, counsel or Broker-Dealer shall furnish the
Auction Agent with a letter from the Corporation requesting that the Auction
Agent afford such person access. The Auction Agent shall maintain records
relating to any Auction for a period of six years after such Auction, and such
records shall, in reasonable detail, accurately and fairly reflect the actions
taken by the Auction Agent hereunder.
3. The Auction Agent as Dividend and Redemption Price Disbursing Agent.
The Auction Agent, as dividend and redemption price disbursing
agent, shall pay to the Holders of Preferred Shares (i) on each Dividend
Payment Date, dividends on the Preferred Shares, (ii) on any date fixed for
redemption of Preferred Shares, the Redemption Price of the Preferred Shares
called for redemption and (iii) any late charge related to any payment of
dividends or Redemption Price, in each case after receipt of the necessary
funds from the Corporation with which to pay such dividends, Redemption Price
or late charge. The amount of dividends for any Dividend Period to be paid by
the Auction Agent to the Holders of Preferred Shares will be determined by the
Corporation as set forth in Section 2 of Article I of the Articles
Supplementary. The Redemption Price of any shares to be paid by the Auction
Agent to the Holders will be determined by the Corporation as set forth in
Section 3 of Article I of the Articles Supplementary. The Corporation shall
notify the Auction Agent in writing of a decision to redeem Preferred Shares
at least one Business Day prior to the date a notice of redemption is required
to be mailed to the Holders of the shares to be redeemed by paragraph (b) of
Section 3 of Article I of the Articles Supplementary and shall notify the
Auction Agent in writing on or prior to the 10th day preceding a Mandatory
Redemption Date. Such notice by the Corporation to the Auction Agent shall
contain the information required by paragraph (b) of Section 3 of Article I of
the Articles Supplementary to be stated in the notice of redemption required
to be mailed by the Corporation to such Holders.
4. The Auction Agent as Transfer Agent and Registrar.
4.1 Issue of Stock or Shares Certificates.
Upon the Date of Original Issue of Preferred Shares, one or more
certificates representing all of the Preferred Shares issued on such date
shall be issued by the Corporation and, at the request of the Corporation,
registered in the name of Cede & Co. and countersigned by the Auction Agent.
4.2 Registration of Transfer of Shares.
Preferred Shares shall be registered solely in the name of the
Securities Depository or its nominee.
4.3 Removal of Legend on Restricted Shares.
All requests for removal of legends on Preferred Shares indicating
restrictions on transfer shall be accompanied by an opinion of counsel stating
that such legends may be removed and such shares freely transferred, such
opinion to be delivered under cover of a letter from a Corporate Officer
authorizing the Auction Agent to remove the legend on the basis of said
opinion.
4.4 Lost Stock or Share Certificates.
The Auction Agent shall issue and register replacement certificates
for certificates represented to have been lost, stolen or destroyed upon the
fulfillment of such requirements as shall be deemed appropriate by the
Corporation and the Auction Agent, subject at all times to provisions of law,
the By-Laws of the Corporation governing such matters and resolutions adopted
by the Corporation with respect to lost securities. The Auction Agent shall
not have any liability for loss incurred by the Corporation or by any other
person as a result of the receipt or acceptance of fraudulent, forged or
invalid certificates or securities (or certificates or securities which are
otherwise not freely transferable or deliverable without encumbrance in any
relevant market). The Auction Agent may issue new certificates in exchange for
and upon the cancellation of mutilated certificates. Any request by the
Corporation to the Auction Agent to issue a replacement or new certificate
pursuant to this Section 4.4 shall be deemed to be a representation and
warranty by the Corporation to the Auction Agent that such issuance will
comply with such provisions of law and the By-Laws and resolutions of the
Corporation.
4.5 Disposition of Cancelled Certificates; Record Retention.
The Auction Agent shall retain all stock or share certificates
which have been cancelled in transfer or exchange and all accompanying
documentation in accordance with applicable rules and regulations of the
Securities and Exchange Commission for two calendar years. The Corporation
shall also undertake to furnish to the Securities and Exchange Commission and
to the Board of Governors of the Federal Reserve System, upon demand, at
either the principal office or at any regional office, complete, correct and
current hard copies of any and all such records.
4.6 Stock or Record Books.
For so long as the Auction Agent is acting as the transfer agent
for Preferred Shares pursuant to this Agreement, it shall maintain a stock or
record book containing a list of the Holders of the Preferred Shares. In case
of any request or demand for the inspection of the stock or record books of
the Corporation or any other books in the possession of the Auction Agent, the
Auction Agent will notify the Corporation and secure instructions as to
permitting or refusing such inspection; provided, however, the Auction Agent
shall allow inspection of such books and records in its possession without the
consent of the Corporation by its lawyers, accountants, regulators, auditors
and other parties the Auction Agent deems necessary in order to carry out the
normal operation of its business. The Auction Agent reserves the right,
however, to exhibit the stock or record books or other books to any Person if
(a) it is ordered to do so by a court of competent jurisdiction or a
regulatory body, judicial or quasi-judicial agency or authority having the
authority to compel such disclosure, (b) it is advised by its counsel that its
failure to do so would be unlawful or (c) failure to do so would expose the
Auction Agent to loss, liability, claim, damage or expense for which it has
not received indemnity or security satisfactory to it.
4.7 Return of Funds.
Any funds deposited with the Auction Agent hereunder by the
Corporation for any reason, including but not limited to redemption of
Preferred Shares, that remain unpaid after ninety days shall be repaid to the
Corporation upon the written request of the Corporation.
5. Representations and Warranties.
5.1 Representations and Warranties of the Corporation
The Corporation represents and warrants to the Auction Agent that:
(a) the Corporation is duly organized and existing business
Corporation in good standing under the laws of the State of its incorporation
and has full corporate power or all requisite power to execute and deliver the
Agreement and to authorize, create and issue the Preferred Shares, and the
Preferred Shares when issued, will be duly authorized, validly issued, fully
paid and nonassessable;
(b )the Agreement has been duly and validly authorized, executed
and delivered by the Corporation and constitutes the legal, valid and binding
obligation of the Corporation;
(c) the form of the certificate evidencing the Preferred Shares
complies or will comply with all applicable laws of the State of its
incorporation;
(d) when issued, the Preferred Shares will have been duly
registered under the Securities Act of 1933, as amended, and no further action
by or before any governmental body or authority of the United States or of any
state thereof is required in connection with the execution and delivery of
this Agreement or will have been required in connection with the issuance of
Preferred Shares;
(e) the execution and delivery of this Agreement and the
issuance and delivery of the Preferred Shares do not and will not conflict
with, violate or result in a breach of, the terms, conditions or provisions
of, or constitute a default under, the Articles of Amendment and Restatement
(as amended) or the By- Laws of the Corporation, any law or regulation, any
order or decree of any court or public authority having jurisdiction, or any
mortgage, indenture, contract, agreement or undertaking to which the
Corporation is a party or by which it is bound the effect of which conflict,
violation, default or breach would be material to the Corporation or the
Corporation and its subsidiaries taken as a whole; and
(f) no taxes are payable upon or in respect of the execution of
this Agreement or the issuance of the Preferred Shares.
5.2 Representations and Warranties of the Auction Agent.
The Auction Agent represents and warrants to the Corporation that:
(a) The Auction Agent is duly organized and is validly existing
as a banking corporation in good standing under the laws of the State of New
York and has the corporate power to enter into and perform its obligations
under this Agreement; and
(b) this Agreement has been duly and validly authorized,
executed and delivered by the Auction Agent and constitutes the legal, valid
and binding obligation of the Auction Agent, enforceable against the Auction
Agent in accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equitable principles.
6. The Auction Agent.
6.1 Duties and Responsibilities.
(a) The Auction Agent is acting solely as agent for the
Corporation hereunder and owes no fiduciary duties to any Person except if
provided by this Agreement.
(b) The Auction Agent undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Auction
Agent.
(c) In the absence of gross negligence or willful misconduct on
its part, the Auction Agent shall not be liable for any action taken,
suffered, or omitted or for any error of judgment made by it in the
performance of its duties under the Agreement. The Auction Agent shall not be
liable for any error of judgment resulting from the use or reliance on a
source of information used in good faith unless the Auction Agent shall have
been grossly negligent in the determination, calculation or declaration
thereunder. The Auction Agent shall not be liable for any error of judgment
made in good faith unless the Auction Agent shall have been grossly negligent
in ascertaining (or failing to ascertain) the pertinent facts.
6.2 Rights of the Auction Agent.
(a) The Auction Agent may conclusively rely and shall be fully
protected in acting or refraining from acting upon any communication
authorized hereby and upon any written instruction, notice, request,
direction, consent, report, certificate, share certificate or other
instrument, paper or document believed in good faith by it to be genuine. The
Auction Agent shall not be liable for acting upon any telephone communication
authorized hereby which the Auction Agent believes in good faith to have been
given by the Corporation or by a Broker-Dealer. The Auction Agent may record
telephone communications with the Corporation or with the Broker-Dealers or
both.
(b) The Auction Agent may consult with counsel of its choice and
the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon.
(c) The Auction Agent shall not be required to advance, expend
or risk its own funds or otherwise incur or become exposed to financial
liability in the performance of its duties hereunder.
(d) The Auction Agent may perform its duties and exercise its
rights hereunder either directly or by or through agents or attorneys and
shall not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed by it with due care hereunder.
(e) The Auction Agent shall not be responsible or liable for any
failure or delay in the performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
reasonable control, including without limitation strikes, work stoppages, acts
of war or terrorism, insurrection, revolution, nuclear or natural catastrophes
or acts of God, and interruptions, loss or malfunctions or utilities,
communications or computer (software and hardware) services, it being
understood that the Auction Agent shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances.
(f) The Auction Agent shall not be: (i) required to, and does
not, make any representations or have any responsibilities as to the validity,
accuracy, value or genuineness of any signatures or endorsements, other than
its own; (ii) obligated to take any legal action hereunder that might, in its
judgment, involve any expense or liability, unless it has been furnished with
indemnity satisfactory to the Auction Agent; and (iii) responsible for or
liable in any respect on account of the identity, Corporation or rights of any
Person (other than itself and its agents and attorneys) executing or
delivering or purporting to execute or deliver any document under this
Agreement or any Broker-Dealer Agreement.
6.3 Compensation, Expenses and Indemnification.
(a) The Corporation shall pay the Auction Agent an annual fee as
compensation for all services rendered by it under this Agreement and the
Broker- Dealer Agreements as the Corporation and the Auction Agent have agreed
to from time to time.
(b) The Corporation shall reimburse the Auction Agent upon its
request for all reasonable out-of-pocket expenses, disbursements and advances
incurred or made by the Auction Agent in accordance with any provision of this
Agreement and the Broker-Dealer Agreements (including the compensation and the
reasonable expenses and disbursements of its agents and counsel), except any
expense or disbursement attributable to its gross negligence or willful
misconduct. In no event shall the Auction Agent be responsible or liable for
special, indirect or consequential loss or damage of any kind whatsoever
(including, but not limited to, loss of profit), even if the Auction Agent has
been advised of the likelihood of such loss or damage and regardless of the
form of action.
(c) To the extent, if any, that a court of competent
jurisdiction would enforce such agreement as not contrary to law or public
policy, the Corporation hereby agrees to keep fully indemnified, on an
after-tax basis, the Auction Agent (in its capacity as Auction Agent and, if
applicable, in its capacity as transfer agent, registrar, dividend paying
agent and redemption price disbursing agent and any other capacity
contemplated by this Agreement) and its officers, directors, employees and
agents for and hold them harmless against any loss, liability or expense
incurred without gross negligence or willful misconduct on their part, arising
out of or in connection with this Agreement and any Broker-Dealer Agreements,
including the costs and expenses of defending itself against any such claim or
liability in connection with its exercise or performance of any of its rights
or duties hereunder and thereunder (which costs and expenses include the costs
and expenses of the enforcement of this provision).
(d) The Auction Agent, in any of its various capacities, shall
hold funds uninvested unless otherwise directed by the Corporation.
6.4 Auction Agent's Disclaimer.
The Auction Agent makes no representation as to the validity or
adequacy of the Agreement, the Broker-Dealer Agreements or the Preferred
Shares except that the Auction Agent hereby represents that this Agreement has
been duly authorized, executed and delivered by the Auction Agent and
constitutes a legal and binding obligation of the Auction Agent.
7. Miscellaneous.
7.1 Term of Agreement.
(a) The term of this Agreement is unlimited unless it shall be
terminated as provided in this Section 7.1. The Corporation may terminate this
Agreement at any time by so notifying the Auction Agent, provided that the
Corporation has entered into an agreement in substantially the form of the
Agreement with a successor Auction Agent. The Auction Agent may terminate this
Agreement upon written notice to the Corporation on the date specified in such
notice, which date shall be no earlier than 30 days after the date of delivery
of such notice.
(b) Except as otherwise provided in this paragraph (b), the
respective rights and duties of the Corporation and the Auction Agent under
this Agreement with respect to the Preferred Shares shall cease upon
termination of the Agreement. The Corporation's representations, warranties,
covenants and obligations to the Auction Agent under Sections 5 and 6.3 hereof
shall survive the termination of the Agreement. Upon termination of this
Agreement, the Auction Agent shall, at the Corporation's request, promptly
deliver to the Corporation copies of all books and records maintained by it
with respect to Preferred Shares in connection with its duties hereunder.
7.2 Communications.
Except for (a) communications authorized to be by telephone
pursuant to this Agreement or the Auction Procedures and (b) communications in
connection with Auctions (other than those expressly required to be in
writing), all notices, requests and other communications to any party
hereunder shall be in writing (including telecopy or similar writing) and
shall be given to such party, addressed to it, at its address or telecopy
number set forth below:
If to the Corporation, The Gabelli Convertible and Income Securities
Fund Inc.
One Corporate Center
Rye, New York 10580-1422
Attention: Xxxxx X. Xxxxxx
Telephone No.: 000-000-0000
Telecopier No.: 000-000-0000
If to the Auction Agent, The Bank of New York
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Each such notice, request or communication shall be effective when
delivered at the address specified herein. Communications shall be given on
behalf of the Corporation by a Corporate Officer and on behalf of the Auction
Agent by telephone (confirmed by telecopy or in writing) by an Authorized
Officer.
7.3 Entire Agreement.
This Agreement contains the entire agreement between the parties
relating to, and superseding any prior agreement between the parties relating
to, the subject matter hereof, and there are no other representations,
endorsements, promises, agreements or understandings, oral, written or
implied, between the parties relating to the subject matter hereof except for
agreements relating to the compensation of the Auction Agent.
7.4 Benefits.
Nothing herein, express or implied, shall give to any Person, other
than the Corporation, the Auction Agent and their respective successors and
assigns, any benefit of any legal or equitable right, remedy or claim
hereunder.
7.5 Amendment; Waiver.
(a) This Agreement shall not be deemed or construed to be
modified, amended, rescinded, cancelled or waived, in whole or in part, except
by a written instrument signed by a duly authorized representative of the
party to be charged.
(b) Failure of either party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
7.6 Successors and Assigns.
This Agreement shall be binding upon, inure to the benefit of, and
be enforceable by, the respective successors and assigns of each of the
Corporation and the Auction Agent.
7.7 Severability.
If any clause, provision or section hereof shall be ruled invalid
or unenforceable by any court of competent jurisdiction, the invalidity or
unenforceability of such clause, provision or section shall not affect any of
the remaining clauses, provisions or sections hereof.
7.8 Disclosure of Information.
The Auction Agent agrees that it will not disclose or use any "non-
public personal information" about the Corporation's shareholders other than
such uses or disclosures as are permitted by Regulation S-P under Section 504
of the Gramm Xxxxx Xxxxx Act ("Regulation S-P"). "Nonpublic personal
information" about a shareholder shall mean: (a) personally identifiable
financial information; (b) any list, description, or other grouping of
consumers that is derived from using any personally identifiable information
that is not publically available; and (c) any other information that a
customer or the Transfer Agent is prohibited from using or disclosing pursuant
to Regulation S-P.
7.9 Governing Law; Jurisdiction; and Waiver of Trial by Jury.
This Agreement shall be governed by, and interpreted and construed
in accordance with, the substantive law of the State of New York. The parties
agree that all actions and proceedings arising out of this Agreement or any
transactions contemplated hereby shall be brought in the State of New York
and, in connection with any such action or proceeding, submit to the
jurisdiction of, and venue in, such State. Each of the parties hereto also
irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim arising out of this agreement or the transaction contemplated
hereby.
THE GABELLI CONVERTIBLE AND
INCOME SECURITIES FUND INC.
________________________________
By: Name
Title
THE BANK OF NEW YORK
________________________________
By: Name
Title
[Auction Agency Agreement]
EXHIBIT A
FORM OF
BROKER-DEALER AGREEMENT
EXHIBIT B
SETTLEMENT PROCEDURES
The following summary of Settlement Procedures sets forth the procedures
expected to be followed in connection with the settlement of each Auction and
will be incorporated by reference in the Auction Agency Agreement and each
Broker- Dealer Agreement. Nothing contained in this Exhibit B constitutes a
representation by the Corporation that in each Auction each party referred to
herein will actually perform the procedures described herein to be performed
by such party.
(a) By approximately 3:00 p.m., New York City time, on each
Auction Date, the Auction Agent shall notify by telephone or through its
auction processing system the Broker-Dealers that participated in the Auction
held on such Auction Date and submitted an order on behalf of any Existing
Holder or Potential Holder of:
(i) the Applicable Rate fixed for the next succeeding
Dividend Period;
(ii) whether Sufficient Clearing Bids existed for
the determination of the Applicable Rate;
(iii) if such Broker-Dealer (a "Seller's Broker- Dealer")
submitted a Bid or Sell Order on behalf of an Existing Holder, the
number of shares, if any, of Preferred Shares to be sold by such
Existing Holder;
(iv) if such Broker-Dealer (a "Buyer's Broker- Dealer")
submitted a Bid on behalf of a Potential Holder, the number of shares,
if any, of Preferred Shares to be purchased by such Potential Holder;
(v) if the aggregate number of Preferred Shares to be sold
by all Existing Holders on whose behalf such Broker-Dealer submitted a
Bid or a Sell Order exceeds the aggregate number of Preferred Shares to
be purchased by all Potential Holders on whose behalf such Broker-Dealer
submitted a Bid, the name or names of one or more Buyer's Broker-Dealers
(and the name of the Agent Member with the Securities Depository, if
any, of each such Buyer's Broker- Dealer) acting for one or more
purchasers of such excess number of Preferred Shares and the number of
such shares to be purchased from one or more Existing Holders on whose
behalf such Broker-Dealer acted by one or more Potential Holders on
whose behalf each of such Xxxxx's Broker-Dealers acted;
(vi) if the aggregate number of Preferred Shares to be
purchased by all Potential Holders on whose behalf such Broker- Dealer
submitted a Bid exceeds the aggregate number of Preferred Shares to be
sold by all Existing Holders on whose behalf such Broker-Dealer
submitted a Bid or a Sell Order, the name or names of one or more
Seller's Broker Dealers (and the name of the Agent Member, if any, of
each such Seller's Broker-Dealer) acting for one or more sellers of such
excess number of Preferred Shares and the number of such shares to be
sold to one or more Potential Holders on whose behalf such Broker-Dealer
acted by one or more Existing Holders on whose behalf each of such
Seller's Broker-Dealers acted; and
(vii) the Auction Date of the next succeeding Auction with
respect to the Preferred Shares.
(b) On each Auction Date, each Broker-Dealer that submitted an
Order on behalf of any Existing Holder or Potential Holder shall:
(i) in the case of a Broker-Dealer that is a Buyer's
Broker-Dealer, instruct each Potential Holder on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part, to
instruct such Potential Holder's Agent Member to pay to such
Broker-Dealer (or its Agent Member) through the Securities Depository
the amount necessary to purchase the number of Preferred Shares to be
purchased pursuant to such Bid against receipt of such shares and advise
such Potential Holder of the Applicable Rate for the next succeeding
Dividend Period;
(ii) in the case of a Broker-Dealer that is a Seller's
Broker-Dealer, instruct each Existing Holder on whose behalf such
Broker-Dealer submitted a Sell Order that was accepted, in whole or in
part, to instruct such Existing Holder's Agent Member to deliver to such
Broker-Dealer (or its Agent Member) through the Securities
Depository the number of Preferred Shares to be sold pursuant to such
Order against payment therefor and advise any such Existing Holder that
will continue to hold Preferred Shares of the Applicable Rate for the
next succeeding Dividend Period;
(iii) advise each Existing Holder on whose behalf such
Broker-Dealer submitted a Hold Order of the Applicable Rate for the next
succeeding Dividend Period;
(iv) advise each Existing Holder on whose behalf such
Broker-Dealer submitted an Order of the Auction Date for the next
succeeding Auction; and
(v) advise each Potential Holder on whose behalf such
Broker-Dealer submitted a Bid that was accepted, in whole or in part, of
the Auction Date for the next succeeding Auction.
(c) On the basis of the information provided to it pursuant to
(a) above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf
of a Potential Holder or an Existing Holder shall, in such manner and at such
time or times as in its sole discretion it may determine, allocated any funds
received by it pursuant to (b)(i) above and any Preferred Shares received by
it pursuant to (b)(ii) above among the Potential Holders, if any, on whose
behalf such Broker-Dealer submitted Bids, the Existing Holders, if any, on
whose behalf such Broker-Dealer submitted Bids that were accepted or Sell
Orders, and any Broker-Dealer or Broker- Dealers identified to it by the
Auction Agent pursuant to (a)(v) or (a)(vi) above.
(d) On each Auction Date:
(i) each Potential Holder and Existing Holder shall instruct
its Agent Member as provided in (b)(i) or (ii) above, as the case may
be;
(ii) each Seller's Broker-Dealer which is not an Agent Member
of the Securities Depository shall instruct its Agent Member to (A) pay
through the Securities Depository to the Agent Member of the Existing
Holder delivering shares to such Broker- Dealer pursuant to (b)(ii)
above the amount necessary to purchase such shares against receipt of
such shares, and (B) deliver such shares through the Securities
Depository to a Buyer's Broker-Dealer (or its Agent Member) identified
to such Seller's Broker-Dealer pursuant to (a)(v) above against payment
therefor; and
(iii) each Buyer's Broker-Dealer which is not an Agent Member
of the Securities Depository shall instruct its Agent Member to (A) pay
through the Securities Depository to a Seller's Broker-Dealer (or its
Agent Member) identified pursuant to (a) (vi) above the amount necessary
to purchase the shares to be purchased pursuant to (b) (i) above against
receipt of such shares, and (B) deliver such shares through the
Securities Depository to the Agent Member of the purchaser thereof
against payment therefor.
(e) On the day after the Auction Date:
(i) each Bidder's Agent Member referred to in (d) (i) above
shall instruct the Securities Depository to execute the transactions
described under (b) (i) or (ii) above, and the Securities Depository
shall execute such transactions;
(ii) each Seller's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions described
in (d) (ii) above, and the Securities Depository shall execute such
transactions; and
(iii) each Buyer's Broker-Dealer or its Agent Member shall
instruct the Securities Depository to execute the transactions described
in (d) (iii) above, and the Securities Depository shall execute such
transactions.
(f) If an Existing Holder selling Preferred Shares in an Auction
fails to deliver such shares (by authorized book-entry), a Broker-Dealer may
deliver to the Potential Holder on behalf of which it submitted a Bid that was
accepted a number of whole Preferred Shares that is less than the number of
shares that otherwise was to be purchased by such Potential Holder. In such
event, the number of Preferred Shares to be so delivered shall be determined
solely by such Broker- Dealer. Delivery of such lesser number of shares shall
constitute good delivery. Notwithstanding the foregoing terms of this
paragraph (f), any delivery or non- delivery of shares which shall represent
any departure from the results of an Auction, as determined by the Auction
Agent, shall be of no effect unless and until the Auction Agent shall have
been notified of such delivery or non-delivery in accordance with the
provisions of the Auction Agency Agreement and the Broker- Dealer Agreements.
EXHIBIT C
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
NOTICE OF PROPOSED CHANGE OF
LENGTH OF DIVIDEND PERIOD OF
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
("Preferred Shares")
The Gabelli Convertible and Income Securities Fund Inc. (the
"Corporation") may exercise its option to designate the Dividend Period of its
Preferred Shares commencing [the first day of the Special Dividend Period] as
a Special Dividend Period.
By 3:00 P.M., New York City time, on the second Business Day
preceding the first day of such proposed Special Dividend Period, the
Corporation will notify ___________________ of either (a) its determination to
exercise such option, designating the length of such Special Dividend Period
or (b) its determination not to exercise such option.
THE GABELLI CONVERTIBLE AND
INCOME SECURITIES FUND INC.
_________________________________
Dated: __________, 20__
EXHIBIT D
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
NOTICE OF CHANGE OF LENGTH OF DIVIDEND PERIOD
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
("Preferred Shares")
NOTICE IS HEREBY GIVEN that (the "Corporation") has determined to
designate the Dividend Period of its Preferred Shares commencing on [the first
day of the Special Dividend Period] as a Special Dividend Period.
Capitalized terms not defined herein shall have the respective
meanings specified in the Articles Supplementary or Auction Agency Agreement,
as the case may be.
The Special Dividend Period will be __________ calendar days.
The Auction Date for the Special Dividend Period is the Business
Day immediately preceding the first day of such Special Dividend Period.
As a result of the Special Dividend Period designation, the amount
of dividends payable on Preferred Shares during the Special Dividend Period
will be based on a 360-day year.
The Special Dividend Period shall not commence if (a) an Auction
for Preferred Shares shall not be held on such Auction Date for any reason or
(b) an Auction for Preferred Shares shall be held on such Auction Date but
Sufficient Clearing Bids for such shares shall not exist in such Auction.
The scheduled Dividend Payment Dates for the Preferred Shares
during such Special Dividend Period will be _________________________.
[Special Redemption Provisions, if any]
THE GABELLI CONVERTIBLE AND
INCOME SECURITIES FUND INC.
_________________________________
Dated: __________, 20__
EXHIBIT E
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF DIVIDEND PERIOD OF
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
("Preferred Shares")
NOTICE IS HEREBY GIVEN that The Gabelli Convertible and Income
Securities Fund Inc. (the "Corporation") has determined not to exercise its
option to designate a Special Dividend Period of its Preferred Shares and the
next succeeding Dividend Period will be a Standard Dividend Period of seven
calendar days.
THE GABELLI CONVERTIBLE AND
INCOME SECURITIES FUND INC.
______________________________
Dated: __________, 20___
EXHIBIT F
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
NOTICE OF CURE OF DEFAULT ON
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
("Preferred Shares")
NOTICE IS HEREBY GIVEN that The Gabelli Convertible and Income
Securities Fund Inc. (the "Corporation") has cured its Potential Default and
paid the applicable late charge with respect to its Preferred Shares. The next
Auction Date for the Preferred Shares is scheduled to be on _________________,
20___.
THE GABELLI CONVERTIBLE AND
INCOME SECURITIES FUND INC.
______________________________
Dated: __________, 20___
EXHIBIT G
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
NOTICE OF CURE OF DEFAULT ON
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
("Preferred Shares")
NOTICE IS HEREBY GIVEN that The Gabelli Convertible and Income
Securities Fund Inc. (the "Corporation") has cured its Default and paid the
applicable late charge with respect to its Preferred Shares. The next Auction
Date for the Preferred Shares is scheduled to be on _________________, 20___.
THE GABELLI CONVERTIBLE AND
INCOME SECURITIES FUND INC.
______________________________
Dated: __________, 20___
EXHIBIT H
THE GABELLI CONVERTIBLE AND INCOME SECURITIES FUND INC.
NOTICE OF
[CAPITAL GAINS] [AND] [TAXABLE ORDINARY INCOME](1)
DIVIDEND FOR
SERIES C AUCTION RATE CUMULATIVE PREFERRED STOCK
("Preferred Shares")
NOTICE IS HEREBY GIVEN that the amount of the dividend payable on
________________, 20____ for The Gabelli Convertible and Income Securities
Fund's Preferred Shares will be determined by the Auction to be held on
_______________, 20___. Up to [$ A ](2) [$ B ](3) per share of the dividend
payable on such date as determined by such Auction will consist of [capital
gains](2) [ordinary income taxable for Federal income tax purposes](3). If the
dividend amount payable on such date as determined by such Auction is less
than [$ A ](2) [$ B ](3) per share, the entire amount of the dividend will
consist of [capital gains](2) [ordinary income taxable for Federal income tax
purposes](3). [To the extent such dividend amount exceeds [$ A ] per share,
any excess up to [$ B ] per share will consist of ordinary income taxable for
Federal income tax purposes.](4) Accordingly, the aforementioned composition
of the dividend payable on _______________, 20___ should be considered in
determining Orders to be submitted with respect to the Auction to be held on
________________, 20__. The Rate Multiple in effect for such Auction will be
____%.
THE GABELLI CONVERTIBLE AND
INCOME SECURITIES FUND INC.
-------------------
(1) Include language with respect to capital gains, taxable
ordinary income or both, depending on the character of the designation to be
made with respect to the dividend(s).
(2) Include bracketed material if a portion of the dividend will be
designated capital gains.
(3) Include bracketed material if a portion of the dividend will be
designated ordinary income taxable for Federal income tax purposes and no
portion of the dividend will be designated capital gains.
(4) Include bracketed material if a portion of the dividend will be
designated capital gains and a portion will be designated ordinary income
taxable for Federal income tax purposes.
A = the maximum amount of capital gains allocated to the Preferred Shares to
be included in such dividend, divided by the number of Preferred Shares.
B = the maximum amount of ordinary income taxable for Federal income tax
purposes allocated to the Preferred Shares to be included in such dividend,
divided by the number of preferred shares.
