Ex-99(2)(k)(ii)
THE GABELLI DIVIDEND & INCOME TRUST
_______________________________________________
AUCTION AGENCY AGREEMENT
dated as of May __, 2004
Relating to
Series B Auction Market Preferred Shares
of
THE GABELLI DIVIDEND & INCOME TRUST
______________________________________________
The Bank of New York,
as Auction Agent
AUCTION AGENCY AGREEMENT
This Auction Agency Agreement (this "Agreement"), dated as of May __,
2004, is between The Gabelli Dividend & Income Trust (the "Trust") and The
Bank of New York, a New York banking corporation, as Auction Agent (as defined
below).
The Trust proposes to issue an aggregate of [__] preferred shares,
par value $0.001 per share, liquidation preference $25,000 per share,
designated as Series B Auction Market Preferred Shares (the "Preferred
Shares"), pursuant to the Statement of Preferences (as defined below).
The Trust 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 Trust 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 Trust and the Auction Agent agree as follows:
1. Definitions and Rules of Construction.
1.1 Terms Defined By Reference to the Statement of Preferences.
Capitalized terms not defined herein shall have the respective
meanings specified in the Statement of Preferences.
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) "Auction" shall have the meaning specified in Section 2.1 hereof.
(d) "Auction Procedures" shall mean the auction procedures
constituting Part II of the Statement of Preferences as of the filing thereof.
(e) "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 Trust.
(f) "Broker-Dealer Agreement" shall mean each agreement between the
Auction Agent and a Broker-Dealer substantially in the form attached hereto as
Exhibit A.
(g) "Preferred Shares" shall mean the preferred shares, par value
$.001 per share, of the Trust designated as its "Series B Auction Market
Preferred Shares" and bearing such further designation as to series as the
Board of Trustees, as the case may be, of the Trust or any committee thereof
shall specify.
(h) "Rate Multiple" has the meaning provided in Section 2.6.
(i) "Settlement Procedures" shall mean the Settlement Procedures
attached hereto as Exhibit B.
(j) "Statement of Preferences" shall mean the Statement of
Preferences Creating and Fixing the Rights of the Series B Auction Market
Preferred Stock.
(k) "Trust 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 Trust and every other officer or
employee of the Trust designated as a "Trust Officer" for purposes hereof in a
notice to the Auction Agent.
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 Trustees of the Trust 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 Trust 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 Trust 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 Trust
proposes to designate any Special Dividend Period of the Preferred Shares
pursuant to Section 4 of Part I of the Statement of Preferences, 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 Trust 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 Trust, 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 Trust 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 Trust 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 Trust, 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 Trust, 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 Trust 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 Trust 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 Trust, 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. The Auction Agent will follow the Bond Market
Association's Market Practice U.S. Holiday Recommendations for shortened
trading days for the bond markets (the "BMA Recommendation") unless the
Auction Agent is instructed otherwise. In the event of a BMA Recommendation on
an Auction Date the Submission Deadline will be 11:30 a.m., instead of 1:30
p.m., and as a result the notice set forth in Section 2.4 will occur earlier.
Time Event
---- -----
By 9:30 A.M. Auction Agent advises the Trust and
Broker-Dealers of (i) the applicable Maximum
Rate and (ii) when applicable, the Reference
Rate, used in determining such Maximum Rate
as set forth in Section 2.6 hereof.
9:30 A.M. - 1:30 P.M. Auction Agent assembles information
communicated to it by Broker-Dealers as
provided in Sections 2(a) and 3 of the
Auction Procedures. Submission Deadline is
1:30 P.M.
Not earlier than 3:00 P.M. Auction Agent makes determinations pursuant
to Section 4(a) of the Auction Procedures.
By approximately 3:00 P.M. Auction Agent advises Trust 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 Trust 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 Trust 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 Trust, 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 Trust
shall request, and shall enter into such schedules to any such Broker-Dealer
Agreements as the Trust shall request.
2.6 Information Concerning Rates.
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 Reference Rate or applicable spread over the Reference Rate,
used to determine the Maximum Rate for Preferred Shares (the "Rate Multiple"
and "Rate Spread," respectively), the Trust shall notify the Auction Agent in
writing of such change in the Rate Multiple or Rate Spread 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 125%, and the Rate Spread is 125 basis
points. If the Trust 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 G
hereto to the Auction Agent pursuant to Section 2.6 hereof, the Rate Multiple
or Rate Spread 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 or Rate Spread for Preferred Shares of which it has most recently
received notice from the Trust (or, in the absence of such notice, the
percentage determined by reference to the definition of Rate Multiple or Rate
Spread), except that if the Trust shall have notified the Auction Agent of a
Rate Multiple or Rate Spread to be in effect for an Auction Date in accordance
with the preceding sentence, the Rate Multiple or Rate Spread in effect for
the next succeeding Auction Date shall be, unless the Trust notifies the
Auction Agent of a change in the Rate Multiple or Rate Spread for such
succeeding Auction Date pursuant to this Section 2.6, the Rate Multiple or
Rate Spread 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 Trust and the Broker-Dealers of the Maximum Rate and the LIBOR 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 Statement of Preferences, the Trust may, at its
option, designate a Special Dividend Period for the Preferred Shares in the
manner described in Section 4 of Part I of the Statement of Preferences.
(i) If the Board of Trustees proposes to designate any
Dividend Period as a Special Dividend Period, (A) the Trust 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 Trust 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 Trust.
(ii) If the Trust determines to designate such Dividend
Period as a Special Dividend Period, (A) the Trust 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 Trust 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 Trust 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 Trust fails to deliver either such notice
provided in this Section 2.7(b) hereof by 3:00 P.M., the Trust 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.
Subject to Section 2.7(b) of this Agreement, 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 Trust fails to deliver amounts to the Auction Agent
in accordance with the Statement of Preferences, all amounts payable by the
Trust with respect to such Default, or Default which has been cured, will be
delivered to the Auction Agent as set forth in the Statement of Preferences.
2.9 Ownership of Shares of Preferred Shares.
Neither the Trust nor any affiliate of the Trust 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 Trust 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 Trust 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 trustee
of the Trust. 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 Trust, 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 Trust 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
Trust 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 Trust as set forth
in Section 2 of Part I of the Statement of Preferences. The Redemption Price
of any shares to be paid by the Auction Agent to the Holders will be
determined by the Trust as set forth in Section 3 of Part I of the Statement
of Preferences. The Trust 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 Part I of the Statement
of Preferences and shall notify the Auction Agent in writing on or prior to
the 10th day preceding a Mandatory Redemption Date. Such notice by the Trust
to the Auction Agent shall contain the information required by paragraph (b)
of Section 3 of Part I of the Statement of Preferences to be stated in the
notice of redemption required to be mailed by the Trust 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 Trust and, at the request of the Trust, 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 Trust 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 Trust
and the Auction Agent, subject at all times to provisions of law, the By-Laws
of the Trust governing such matters and resolutions adopted by the Trust with
respect to lost securities. The Auction Agent shall not have any liability for
loss incurred by the Trust 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 Trust 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 Trust to the Auction Agent that such
issuance will comply with such provisions of law and the By-Laws and
resolutions of the Trust.
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 Trust 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 Trust or any other books in the possession of the Auction Agent, the
Auction Agent will notify the Trust 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 Trust 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 Trust for
any reason, including but not limited to redemption of Preferred Shares, that
remain unpaid after ninety days shall be repaid to the Trust upon the written
request of the Trust.
5. Representations and Warranties.
5.1 Representations and Warranties of the Trust
The Trust represents and warrants to the Auction Agent that:
(a) the Trust is duly organized and existing as a statutory trust in
good standing under the laws of the State of Delaware and has full trust 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 Trust and constitutes the legal, valid and binding obligation
of the Trust;
(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 Agreement and Declaration of Trust (as amended) or the
By-Laws of the Trust, 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 Trust is a party or by which it is bound
the effect of which conflict, violation, default or breach would be material
to the Trust; 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.
(a) The Auction Agent represents and warrants to the Trust that:
(b) 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
(c) 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 Trust
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 Trust or by a Broker-Dealer. The Auction Agent may record
telephone communications with the Trust 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, authority 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 Trust 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 Trust and the Auction Agent have agreed to
from time to time.
(b) The Trust 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
Trust 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 Trust. In the event the
Trust directs the Auction Agent to invest funds in money market accounts or
other investments agreed upon between the Auction Agent and the Trust, amounts
of interest accrued to such invested funds will be returned to the Trust.
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 Trust may terminate this
Agreement at any time by so notifying the Auction Agent, provided that the
Trust 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 Trust 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 Trust and the Auction Agent under this
Agreement with respect to the Preferred Shares shall cease upon termination of
the Agreement. The Trust'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 Trust's request, promptly deliver to the Trust
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 Trust, The Gabelli Dividend & Income Trust
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
If to the Auction Agent, The Bank of New York
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
Each such notice, request or communication shall be effective when
delivered at the address specified herein. Communications shall be given on
behalf of the Trust by a Trust 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 Trust, 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 Trust 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 Trust's shareholders other than
such uses or disclosures as are permitted by Regulation S-P under Section 504
of the Gramm ▇▇▇▇▇ ▇▇▇▇▇ 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 publicly 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 DIVIDEND & INCOME TRUST
________________________________
By: Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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 Trust 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 ▇▇▇▇▇'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 DIVIDEND & INCOME TRUST
NOTICE OF PROPOSED CHANGE OF
LENGTH OF DIVIDEND PERIOD OF
SERIES B AUCTION MARKET PREFERRED SHARES
("Preferred Shares")
The Gabelli Dividend & Income Trust (the "Trust") 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 Trust
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 DIVIDEND &
INCOME TRUST
________________________________
Dated: __________, 20__
EXHIBIT D
THE GABELLI DIVIDEND & INCOME TRUST
NOTICE OF CHANGE OF LENGTH OF DIVIDEND PERIOD
SERIES B AUCTION MARKET PREFERRED SHARES
("Preferred Shares")
NOTICE IS HEREBY GIVEN that Gabelli Dividend & Income Trust (the
"Trust") 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 Statement of Preferences 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, among other
things, (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 DIVIDEND &
INCOME TRUST
________________________________
Dated: __________, 20__
EXHIBIT E
THE GABELLI DIVIDEND & INCOME TRUST
NOTICE OF DETERMINATION NOT TO CHANGE
LENGTH OF DIVIDEND PERIOD OF
SERIES B AUCTION MARKET PREFERRED SHARES
("Preferred Shares")
NOTICE IS HEREBY GIVEN that The Gabelli Dividend & Income
Trust (the "Trust") 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 DIVIDEND &
INCOME TRUST
______________________________
Dated: __________, 20___
EXHIBIT F
THE GABELLI DIVIDEND & INCOME TRUST
NOTICE OF CURE OF DEFAULT ON
SERIES B AUCTION MARKET PREFERRED STOCK
("Preferred Shares")
NOTICE IS HEREBY GIVEN that The Gabelli Dividend & Income Trust (the
"Trust") 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 DIVIDEND &
INCOME TRUST
______________________________
Dated: __________, 20___
EXHIBIT G
THE GABELLI DIVIDEND & INCOME TRUST
NOTICE OF
[CAPITAL GAINS] [AND] [TAXABLE ORDINARY INCOME](1)
DIVIDEND FOR
SERIES B AUCTION MARKET PREFERRED STOCK
("Preferred Shares")
NOTICE IS HEREBY GIVEN that the amount of the dividend payable on
________________, 20____ for The Gabelli Dividend & Income Trust'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/Rate Spread] in effect for such Auction will be
____%.
THE GABELLI DIVIDEND &
INCOME TRUST
_________________________________
(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.