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<SEC-DOCUMENT>0000940400-06-000204.txt : 20060310
<SEC-HEADER>0000940400-06-000204.hdr.sgml : 20060310
<ACCEPTANCE-DATETIME>20060310140344
ACCESSION NUMBER:		0000940400-06-000204
CONFORMED SUBMISSION TYPE:	NSAR-B
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20051231
FILED AS OF DATE:		20060310
DATE AS OF CHANGE:		20060310
EFFECTIVENESS DATE:		20060310

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GABELLI DIVIDEND & INCOME TRUST
		CENTRAL INDEX KEY:			0001260729
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		NSAR-B
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21423
		FILM NUMBER:		06678733

	BUSINESS ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
</SEC-HEADER>
<DOCUMENT>
<TYPE>NSAR-B
<SEQUENCE>1
<FILENAME>gdivid.fil
<TEXT>
<PAGE>      PAGE  1
000 B000000 12/31/2005
000 C000000 0001260729
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000 E000000 NF
000 F000000 Y
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000 I000000 6.1
000 J000000 A
001 A000000 THE GABELLI DIVIDEND & INCOME TRUST
001 B000000 811-21423
001 C000000 9149215100
002 A000000 ONE CORPORATE CENTER
002 B000000 RYE
002 C000000 NY
002 D010000 10580
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010 B000001 801-37706
010 C010001 RYE
010 C020001 NY
010 C030001 10580
010 C040001 1422
010 A000002 PFPC INC.
010 C010002 WILMINGTON
010 C020002 DE
010 C030002 19809
012 A000001 COMPUTERSHARE TRUST COMPANY, N.A.
<PAGE>      PAGE  2
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012 C010001 CANTON
012 C020001 MA
012 C030001 02021
012 C040001 1011
013 A000001 PRICEWATERHOUSECOOPERS LLP
013 B010001 NEW YORK
013 B020001 NY
013 B030001 10017
014 A000001 GABELLI & COMPANY, INC.
014 B000001 8-21373
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014 B000002 8-37104
014 A000003 GABELLI FIXED INCOME DISTRIBUTORS INC.
014 B000003 8-38568
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<PAGE>      PAGE  3
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022 B000008 22-3660471
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022 C000009      5958
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087 B020000 36242H203
087 B030000 GDV PR A
087 C010000 PREFERRED STOCK 6.000% SERIES D
087 C020000 36242H500
087 C030000 GDV PF D
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SIGNATURE   BRUCE N. ALPERT
TITLE       PRESIDENT

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>2
<FILENAME>gdivid77b.txt
<TEXT>

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of The Gabelli Dividend
& Income Trust:

In planning and performing our audit of the financial statements
of The Gabelli Dividend & Income Trust (the "Trust") as of and
for the year ended December 31, 2005, in accordance with the
standards of the Public Company Accounting Oversight Board
(United States), we considered the Trust's internal control over
financial reporting, including control activities for
safeguarding securities, as a basis for designing our auditing
procedures for the purpose of expressing our opinion on the
financial statements and to comply with the requirements of Form
N-SAR, but not for the purpose of expressing an opinion on the
effectiveness of the Trust's internal control over financial
reporting. Accordingly, we express no such opinion.

The management of the Trust is responsible for establishing and
maintaining effective internal control over financial reporting.
In fulfilling this responsibility, estimates and judgments by
management are required to assess the expected benefits and
related costs of controls.  A Trust's internal control over
financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.  Such
internal control over financial reporting includes policies and
procedures that provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use or
disposition of a Trust's assets that could have a material effect
on the financial statements.

Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.

A control deficiency exists when the design or operation of a
control does not allow management or employees, in the normal
course of performing their assigned functions, to prevent or
detect misstatements on a timely basis. A significant deficiency
is a control deficiency, or combination of control deficiencies,
that adversely affects the Trust's ability to initiate,
authorize, record, process or report external financial data
reliably in accordance with generally accepted accounting
principles such that there is more than a remote likelihood that
a misstatement of the Trust's annual or interim financial
statements that is more than inconsequential will not be
prevented or detected.  A material weakness is a control
deficiency, or combination of control deficiencies, that results
in more than a remote likelihood that a material misstatement of
the annual or interim financial statements will not be prevented
or detected.

Our consideration of the Trust's internal control over financial
reporting was for the limited purpose described in the first
paragraph and would not necessarily disclose all deficiencies in
internal control over financial reporting that might be
significant deficiencies or material weaknesses under standards
established by the Public Company Accounting Oversight Board
(United States).  However, we noted no deficiencies in the
Trust's internal control over financial reporting and its
operation, including controls for safeguarding securities, that
we consider to be material weaknesses as defined above as of
December 31, 2005.

This report is intended solely for the information and use of
management, the Board of Trustees of The Gabelli Dividend &
Income Trust and the Securities and Exchange Commission and is
not intended to be and should not be used by anyone other than
these specified parties.


PricewaterhouseCoopers LLP
New York, New York
February 28, 2006

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77Q1 OTHR EXHB
<SEQUENCE>3
<FILENAME>gdivid77q12.txt
<TEXT>

THE GABELLI DIVIDEND & INCOME TRUST (the "Trust")

EXHIBIT TO ITEM 77Q1


THE GABELLI DIVIDEND & INCOME TRUST
FORM OF
STATEMENT OF PREFERENCES
OF
SERIES E AUCTION RATE PREFERRED SHARES

The Gabelli Dividend & Income Trust, a Delaware
statutory trust, (the "Fund"), hereby certifies that:

FIRST:  The Board of Trustees of the Fund, at a
meeting duly convened and held on February 25, 2004,
pursuant to authority expressly vested in it by Article III
of the Agreement and Declaration of Trust, adopted
resolutions classifying an unlimited amount of shares as
authorized but unissued preferred shares of the Fund, par
value $0.001 per share and at a meeting duly convened and
held on May 18, 2005, authorized the designation and
issuance of an unlimited amount of Series E Auction Rate
Preferred Shares at such times and in such amount as the
Pricing Committee should determine.

SECOND:  The Pricing Committee, at a meeting duly
convened and held on October 28, 2005 pursuant to authority
granted it by the Board of Trustees of the Fund at its
August 9, 2005 meeting, approved the designation and
issuance by the Fund of up to 5,400 Series E Auction Rate
Preferred Shares.

THIRD:  The preferences, rights, voting powers,
restrictions, limitations as to dividends and
distributions, qualifications, and terms and conditions of
redemption of the Series E Auction Rate  Preferred Shares,
par value $0.001 per share, as set by the Board of Trustees
are as follows:

DESIGNATION

Series E Preferred Shares:  A series of 5,400
preferred shares, par value $0.001 per share, liquidation
preference $25,000 per share, is hereby designated
"Series E Auction Rate  Preferred Shares" (the "Series E
Preferred Shares").  Each share of Series E Preferred
Shares may be issued on a date to be determined by the
Board of Trustees of the Fund; have an initial dividend
rate stated as a rate per annum, an initial Dividend Period
and an initial Dividend Payment Date as shall be determined
in advance of the issuance thereof by the Board of Trustees
of the Fund; and have such other preferences, rights,
voting powers, restrictions, limitations as to dividends
and distributions, qualifications and terms and conditions
of redemption, in addition to those required by applicable
law or set forth in the Governing Documents applicable to
Preferred Shares of the Fund, as are set forth in this
Statement of Preferences.  The Series E Preferred Shares
shall constitute a separate series of Preferred Shares.

As used in this Statement of Preferences, unless
the context requires otherwise, each capitalized term shall
have the meaning ascribed to it in paragraph 13 of Part I
and paragraph 1 of Part II of this Statement of
Preferences.

Part I:  Series E Preferred Shares Terms

1.                                      Number of Shares; Ranking.

(a)                                 The
initial number of authorized and classified shares
constituting the Series E Preferred Shares to be issued is
5,400.  Additional authorized and classified Series E
Preferred Shares may be issued at any time upon resolution
by the Board of Trustees.  No fractional Series E Preferred
Shares shall be issued.

(b)                                 Series E
Preferred Shares which at any time have been redeemed or
purchased by the Fund shall, after such redemption or
purchase, have the status of authorized but unissued
Preferred Shares.

(c)                                  The
Series E Preferred Shares shall rank on a parity with any
other series of Preferred Shares as to the payment of
dividends and distribution to which such share is entitled.

(d)                                 No
Holder of Series E Preferred Shares shall have, solely by
reason of being such a holder, any preemptive or other
right to acquire, purchase or subscribe for any Preferred
Shares or Common Shares or other securities of the Fund
which it may hereafter issue or sell.

2.                                      Dividends
and Distributions.

(a)                                 The
Holders of Series E Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Trustees,
out of funds legally available therefor, cumulative cash
dividends and distributions on their Series E Preferred
Shares at the dividend rate determined by the Board of
Trustees in the manner described under "Designation" above
during the period from and after the date on which the
initial Series E Preferred Shares are originally issued up
to and including the last day of the initial Dividend
Period and, thereafter, at the rate, determined as set
forth in paragraph 2(c), and no more, payable on the
respective dates determined as set forth in paragraph
2(b).  Dividends and distributions on the Outstanding
Series E Preferred Shares shall accumulate from the date on
which such shares are originally issued.

(b)
(i)                                     Dividends and
distributions shall be payable on the Series E Preferred
Shares when, as and if declared by the Board of Trustees
following the initial Dividend Payment Date, subject to
paragraph 2(b)(ii), with respect to any Dividend Period of
91 days or less, on the first Business Day following the
last day of such Dividend Period; provided, however, if the
Dividend Period is more than 91 days then monthly on the
first Business Day of each calendar month and on the first
Business Day following the last day of such Dividend
Period.

(ii)
If a day for payment of dividends and distributions
resulting from the application of paragraph
2(b)(i) above is not a Business Day, then the Dividend
Payment Date shall be the first Business Day following
such day for payment of dividends and distributions.


(iii)                               The
Fund shall pay to the Paying Agent not later than
12:00 noon, New York City time, on the Business Day
immediately preceding each Dividend Payment Date for
Series E Preferred Shares, an aggregate amount of
immediately available funds equal to the dividends and
distributions to be paid to all Holders of such
Series E Preferred Shares on such Dividend Payment
Date.  The Fund shall not be required to establish any
reserves for the payment of dividends and
distributions.

(iv)                              All
monies paid to the Paying Agent for the payment of
dividends and distributions shall be held in trust for
the payment of such dividends and distributions by the
Paying Agent for the benefit of the Holders specified
in paragraph 2(b)(v).  Unless instructed by the Fund
in writing the Paying Agent will hold such moneys
uninvested.  Any monies paid to the Paying Agent in
accordance with the foregoing but not applied by the
Paying Agent to the payment of dividends and
distributions including interest earned, if any, on
such monies, will, to the extent permitted by law, be
repaid to the Fund at the end of 90 days from the date
on which such monies were to have been so applied.

(v)
Each dividend and distributions on Series E Preferred
Shares shall be paid on the Dividend Payment Date
therefor to the Holders of Series E Preferred Shares
as their names appear on the stock ledger or ownership
records of the Fund on the Business Day immediately
preceding such Dividend Payment Date; provided,
however, that if dividends and distributions are in
arrears, they may be declared and paid at any time to
Holders as their names appear on the stock ledger or
ownership records of the Fund on such date not
exceeding 15 days preceding the payment date thereof,
as may be fixed by the Board of Trustees.  No interest
will be payable in respect of any dividend payment or
payments which may be in arrears.

(c)
(i)                                     For each Dividend
Period after the initial Dividend Period for the
Outstanding Series E Preferred Shares, the dividend rate
shall be equal to the rate (stated as a rate per annum)
that results from an Auction (but the rate set at the
Auction will not exceed the Maximum Rate); provided,
however, that if an Auction for any subsequent Dividend
Period is not held for any reason (other than as provided
in the immediately following sentence) or if Sufficient
Clearing Bids have not been made in an Auction (other than
as a result of all Series E Preferred Shares being the
subject of Submitted Hold Orders, in which case the
dividend rate shall be the All Hold Rate), then the
dividend rate on each Outstanding share of Series E
Preferred Shares for any such Dividend Period shall be the
Maximum Rate, except as provided in 2(c)(ii) below.   If a
dividend payment date is not a Business Day because the New
York Stock Exchange is closed for business for more than
three consecutive business days due to an act of God,
natural disaster, act of war, civil or military
disturbance, act of terrorism, sabotage, riots or a loss or
malfunction of utilities or communications services, or the
dividend payable on such date can not be paid for any such
reason, then:

A.
        the dividend payment date for the
affected dividend period will be the next
business day on which the Trust and its paying
agent, if any, are able to cause the dividend and
distributions to be paid using their reasonable
best efforts;

B.
        the affected dividend period will end on
the day it would have ended had such event not
occurred and the dividend payment date had
remained the scheduled date; and

C.
        the next dividend period will begin and
end on the dates on which it would have begun and
ended had such event not occurred and the
dividend payment date remained the scheduled
date.

(ii)                                  A
Default Period with respect to the Outstanding
Series E Preferred Shares will commence if the Fund
fails to deposit irrevocably in trust in same-day
funds, with the Paying Agent by 12:00 noon, New York
City time on the Business Day immediately preceding
the relevant Dividend Payment Date, the full amount of
any declared dividend or distribution on the
Outstanding Series E Preferred Shares then payable on
that Dividend Payment Date (a "Dividend Default").

A Default Period with respect to a
Dividend Default or a Redemption Default shall end on
the Business Day on which, by 12:00 noon, New York
City time, all unpaid dividends and distributions and
any unpaid Redemption Price, including an amount in
respect of such Series E Preferred Shares equal to the
Default Rate applied to the amount of such non-payment
based on the actual number of days that comprised the
Default Period divided by 360 shall have been
deposited irrevocably in trust in same-day funds with
the Paying Agent.  The "Default Rate" shall be equal
to the Reference Rate multiplied by three (3).   In
the case of a Default Period, the following shall
apply:

A.
        Each Dividend Period that commences
during a Default Period will be a Standard
Dividend Period.

B.
        The dividend rate for each Dividend
Period that commences and concludes during a
Default Period will be equal to the Default Rate,
unless an Auction was held immediately prior to
such Dividend Period, in which case the dividend
rate shall be the Applicable Rate set at such
Auction.

C.
        In the event a Dividend Period commences
during a Default Period and such Dividend Period
continues after such Default Period has ended,
(a) the dividend rate for the portion of such
Dividend Period that occurs during the Default
Period will be the Default Rate and (b) the
dividend rate for the portion of such Dividend
Period that falls outside the Default Period will
be (i) the Applicable Rate, in the case of the
first Dividend Period following a Default, or
(ii) the Maximum Rate, in the case of any other
Dividend Period commencing during a Default
Period.

D.
        The commencement of a Default Period will
not by itself cause the commencement of a new
Dividend Period.

E.
         No Auction will be held during an
applicable Default Period; provided, however,
that if a Default Period shall end prior to the
end of a Standard Dividend Period that had
commenced during such Default Period, an Auction
will be held on the last day of such Standard
Dividend Period.

(iii)       The amount of dividends
or distributions per Series E Preferred Share payable
(if declared) on each Dividend Payment Date of each
Dividend Period of less than one year (or in respect
of dividends on another date in connection with a
redemption during such Dividend Period) shall be
computed by multiplying the relevant Applicable Rate,
Default Rate or Maximum Rate, as the case may be, for
such Dividend Period (or a portion thereof) by a
fraction, the numerator of which will be the number of
days in such Dividend Period (or portion thereof) that
such Series E Preferred Share was Outstanding and for
which the Applicable Rate, Maximum Rate or the Default
Rate was applicable (but in no event shall the
numerator exceed 360) and the denominator of which
will be 360, multiplying the amount so obtained by
$25,000, and rounding the amount so obtained to the
nearest cent.  During any Dividend Period of one year
or more, the amount of dividends and distributions per
Series E Preferred Share payable on any Dividend
Payment Date (or in respect of dividends on another
date in connection with a redemption during such
Dividend Period) will be computed as described in the
preceding sentence except that the numerator, with
respect to any full twelve month period, will be 360.

(d)                                 Any
dividend payment made on Series E Preferred Shares shall
first be credited against the earliest accumulated but
unpaid dividends and distributions due with respect to such
shares.

(e)                                  For so
long as the Series E Preferred Shares are Outstanding,
except as otherwise contemplated by Part I of this
Statement of Preferences, the Fund shall not pay any
dividend or other distribution (other than a dividend or
distribution paid in shares of, or options, warrants or
rights to subscribe for or purchase, Common Shares or other
shares, if any, ranking junior to the Series E Preferred
Shares as to dividends and distributions and upon
liquidation) with respect to Common Shares or any other
capital shares of the Fund ranking junior to the Series E
Preferred Shares as to dividends and distributions or upon
liquidation, or call for redemption, redeem, purchase or
otherwise acquire for consideration any Common Shares or
other capital shares ranking junior to the Series E
Preferred Shares (except by conversion into or exchange for
shares of the Fund ranking junior to the Series E Preferred
Shares as to dividends and distributions and upon
liquidation), unless, in each case, (i) immediately after
such transaction, the Fund would have Eligible Assets with
an aggregate Discounted Value at least equal to the Basic
Maintenance Amount and Asset Coverage would be achieved,
(ii) all cumulative and unpaid dividends and distributions
due on or prior to the date of the transaction have been
declared and paid in full with respect to the Fund's
Preferred Shares, including the Series E Preferred Shares
(or shall have been declared and sufficient funds for the
payment thereof deposited with the applicable Paying Agent)
and (iii) the Fund has redeemed the full number of
Preferred Shares to be redeemed mandatorily pursuant to any
provision for mandatory redemption contained herein,
including, without limitation, any such provision contained
in paragraph 3(a)(ii).

(f)                                   No
full dividends or distributions shall be declared or paid
on the Series E Preferred Shares for any Dividend Period or
part thereof, unless full cumulative dividends and
distributions due through the most recent Dividend Payment
Dates therefor for all Outstanding series of Preferred
Shares of the Fund ranking on a parity with the Series E
Preferred Shares as to the payment of dividends and
distributions have been or contemporaneously are declared
and paid through the most recent Dividend Payment Dates
therefor.  If full cumulative dividends due have not been
paid on all Outstanding Preferred Shares, any dividends
being paid on such Preferred Shares (including the Series E
Preferred Shares) will be paid as nearly pro rata as
possible in proportion to the respective amounts of
dividends and distributions accumulated but unpaid on each
such series of Preferred Shares then Outstanding on the
relevant Dividend Payment Date.

3.
Redemption.

(a)
(i)                                     Optional
Redemption.  After the initial Dividend Period, subject to
any Non-Call Period and the provisions of this paragraph 3,
and to the extent permitted under the 1940 Act and Delaware
law, the Fund may, at its option, redeem in whole or in
part out of funds legally available therefor, Series E
Preferred Shares by delivering a notice of redemption to
the Holders and the Rating Agencies not fewer than 7
calendar days and not more than 40 calendar days prior to
the Redemption Date at the applicable Redemption Price.
Notwithstanding the foregoing, the Fund shall not give a
notice of any redemption pursuant to this paragraph
3(a)(i) unless, on the date on which the Fund gives such
notice (x) the Fund reasonably believes that, assuming the
fulfillment of any conditions precedent specified in such
notice, it will be able to deposit with the Paying Agent
when due Deposit Assets with maturity or tender dates not
later than the day preceding the applicable Redemption Date
and having a value not less than the Redemption Price due
to Holders of the Series E Preferred Shares to be redeemed
on the Redemption Date and (y) the Fund would have Eligible
Assets with an aggregate Discounted Value at least equal to
the Basic Maintenance Amount and Asset Coverage immediately
subsequent to such redemption, if such redemption were to
occur on such date, it being understood that the provisions
of paragraph 3(d) shall be applicable in such circumstances
in the event the Fund makes the deposit and takes the other
action required thereby.

(ii)
Mandatory Redemption.  So long as Series E Preferred
Shares are Outstanding, if the Fund fails (A) as of
any Valuation Date to meet the Basic Maintenance Test
and such failure is not cured by the Basic Maintenance
Amount Cure Date or (B) as of any Quarterly Valuation
Date to meet Asset Coverage and such failure is not
cured by the Series E Asset Coverage Cure Date or
(C) as of any valuation or measuring date applicable
to any other series of Preferred Shares to meet any
applicable maintenance amount test and such failure is
not cured by the relevant cure date (any such cure
date, together with any Basic Maintenance Amount Cure
Date or Series E Asset Coverage Cure Date, a "Cure
Date"), Preferred Shares, which at the Fund's
determination may include Series E Preferred Shares,
will be subject to mandatory redemption at the
applicable Redemption Price out of funds legally
available therefor.  The series and number of
Preferred Shares to be redeemed in such circumstances
will be determined by the Fund, subject to the
limitations of the 1940 Act and Delaware law, from
among all series of Preferred Shares then Outstanding
and may include any proportion of Series E Preferred
Shares (or any other series of Preferred Shares).  The
amount of Preferred Shares to be mandatorily redeemed
under such circumstances shall, in the aggregate,
equal the lesser of (1) the minimum amount of
Preferred Shares (including the Series E Preferred
Shares if so determined by the Fund) the redemption of
which, if deemed to have occurred immediately prior to
the opening of business on the relevant Cure Date,
would result in the Fund meeting, as the case may be,
the Basic Maintenance Test, Asset Coverage and any
other then applicable maintenance amount test, in each
case as of the relevant Cure Date (provided that, if
there is no such minimum amount of Preferred Shares
the redemption of which would have such result, all
Series E Preferred Shares then Outstanding will be
redeemed), and (2) the maximum amount of Preferred
Shares that can be redeemed out of funds expected to
be available therefor on the Mandatory Redemption Date
at the applicable Redemption Price; provided, that in
the event that Preferred Shares are redeemed
mandatorily pursuant to this paragraph 3, the Fund
may, but is not required to, redeem a sufficient
amount of additional Series E Preferred Shares, which
when aggregated with other Preferred Shares redeemed
by the Fund, permits the Fund to have (x) Eligible
Assets with Adjusted Value with respect to the
Preferred Shares remaining Outstanding of as great as
110% of the Basic Maintenance Amount and (y) Asset
Coverage with respect to the Preferred Shares
remaining Outstanding of as much as 220%.

(iii)
Subject to the Statement of Preferences establishing
each series of Preferred Shares and the 1940 Act, the
Fund may determine the shares and series of Preferred
Shares to be redeemed in accordance with the paragraph
3(a)(ii) above, subject to the further provisions of
this paragraph 3(a)(iii).  The Fund shall effect any
mandatory redemption of Series E Preferred Shares
relating to:  (A) a failure to meet the Basic
Maintenance Test or a failure to meet Asset Coverage,
no later than 8 days following such Cure Date,
provided, that if such 15th day is not a Business Day,
such redemption will occur not later than the close of
business on the next Business Day or (B) a failure to
meet any other then applicable maintenance amount test
in accordance with the requirements of such test (in
each case the date specified for such redemption
being, the "Mandatory Redemption Date"), except that
if the Fund does not have funds legally available for
the redemption of, or is not otherwise legally
permitted to redeem, the amount of Preferred Shares
which would be mandatorily redeemed by the Fund under
subparagraph 3(a)(ii) if sufficient funds were
available, or the Fund otherwise is unable to effect
such redemption on or prior to the applicable
Mandatory Redemption Date, the Fund shall redeem on
such redemption date the number of Series E Preferred
Shares and other Preferred Shares with respect to
which it has given notice of redemption as it shall
have legally available funds, or is otherwise able, to
redeem ratably on the basis of Redemption Price from
each holder whose shares are to be redeemed, and the
remainder of the Series E Preferred Shares and other
Preferred Shares which it was unable to redeem on the
earliest practicable date on which the Fund will have
such funds available upon notice, in the case of
Series E Preferred Shares, pursuant to paragraph
3(b) to Holders of the Series E Preferred Shares to be
redeemed.  The Fund will deposit with the Paying Agent
funds sufficient to redeem the specified number of
Series E Preferred Shares subject to a redemption
under this paragraph 3(a) by 12:00 noon, New York City
time, of the Business Day immediately preceding the
redemption date.  If fewer than all of the Outstanding
Series E Preferred Shares are to be redeemed, the
number of Series E Preferred Shares to be redeemed
shall be redeemed pro rata from the Holders of such
shares in proportion to the number of Series E
Preferred Shares held by such Holders, by lot or by
such other method as the Fund shall deem fair and
equitable, subject, however, to the terms of any
applicable Specific Redemption Provisions.

(b)                                 In the
event of a redemption of Series E Preferred Shares pursuant
to paragraph 3(a) above, the Fund will have filed or will
file a notice of its intention to redeem with the
Commission, in either case so as to provide at least the
minimum notice required under Rule 23c-2 under the 1940 Act
or any successor provision.  In addition, the Fund shall
deliver a notice of redemption to the Auction Agent (the
"Notice of Redemption") containing the information set
forth below (i) in the case of an optional redemption
pursuant to paragraph 3(a)(i) above, one Business Day prior
to the giving of notice to the Holders and (ii) in the case
of a mandatory redemption pursuant to paragraph
3(a)(ii) above, on or prior to the seventh day preceding
the Mandatory Redemption Date.  The Auction Agent will use
its reasonable efforts to provide telephonic, electronic or
written notice to each Holder of any Series E Preferred
Shares called for redemption not later than the close of
business on the Business Day immediately following the day
on which the Fund determines the shares to be redeemed (or,
during a Default Period with respect to such shares, not
later than the close of business on the Business Day
immediately following the day on which the Auction Agent
receives Notice of Redemption from the Fund).  The Auction
Agent shall confirm a telephonic notice in writing not
later than the close of business on the third Business Day
preceding the date fixed for redemption by providing the
Notice of Redemption to each Holder of shares called for
redemption, the Paying Agent (if different from the Auction
Agent) and the Securities Depository.  The Notice of
Redemption will be addressed to the Holders of Series E
Preferred Shares at their addresses appearing on the share
records of the Fund.  Such Notice of Redemption will set
forth (s) the date fixed for redemption, (t) the number or
percentage of Series E Preferred Shares to be redeemed, (u)
the CUSIP number(s) of such shares, (v) the Redemption
Price (specifying the amount of accumulated dividends and
any applicable redemption premium to be included therein),
(w) the place or places where such shares are to be
redeemed, (x) that dividends on the shares to be redeemed
will cease to accumulate on such date fixed for redemption,
(y) the provision of this Statement of Preferences under
which redemption shall be made, and (z) in the case of a
redemption pursuant to paragraph 3(a)(i), any conditions
precedent to such redemption.  If fewer than all the
Outstanding Series E Preferred Shares held by any Holder
are to be redeemed, the Notice of Redemption mailed to such
Holder shall also specify the number or percentage of
Series E Preferred Shares to be redeemed from such Holder.
No defect in the Notice of Redemption or in the transmittal
or mailing thereof will affect the validity of the
redemption proceedings, except as required by applicable
law.

(c)
Notwithstanding the provisions of paragraph 3(a), the Fund
shall not redeem Preferred Shares unless all accumulated
and unpaid dividends and distributions on all Outstanding
Series E Preferred Shares and other Preferred Shares
ranking on a parity with the Series E Preferred Shares with
respect to dividends and distributions for all applicable
past Dividend Periods (whether or not earned or declared by
the Fund) have been or are contemporaneously paid or
declared and Deposit Assets for the payment of such
dividends and distributions have been deposited with the
Paying Agent; provided, however, that the foregoing shall
not prevent the purchase or acquisition of outstanding
Preferred Shares pursuant to the successful completion of
an otherwise lawful purchase or exchange offer made on the
same terms to holders of all Outstanding Series E Preferred
Shares.

(d)                                 Upon the
deposit of funds sufficient to redeem Series E Preferred
Shares with the Paying Agent and the giving of the Notice
of Redemption to the Auction Agent under paragraph
3(b) above, such shares shall no longer be deemed to be
Outstanding for any purpose (including, without limitation,
for purposes of calculating whether the Fund has met the
Basic Maintenance Test or Asset Coverage), and all rights
of the Holders of the Series E Preferred Shares so called
for redemption shall cease and terminate, except the right
of such Holder to receive the applicable Redemption Price,
but without any interest or other additional amount.  Such
Redemption Price shall be paid by the Paying Agent to the
nominee of the Securities Depository.  The Fund shall be
entitled to receive from the Paying Agent, promptly after
the date fixed for redemption, any cash deposited with the
Paying Agent in excess of (i) the aggregate Redemption
Price of the Series E Preferred Shares called for
redemption on such date and (ii) such other amounts, if
any, to which Holders of the Series E Preferred Shares
called for redemption may be entitled.  Any funds so
deposited that are unclaimed at the end of two years from
such redemption date shall, to the extent permitted by law,
be paid to the Fund, after which time the Holders of
Series E Preferred Shares so called for redemption may look
only to the Fund for payment of the Redemption Price and
all other amounts, if any, to which they may be entitled;
provided, however, that the Paying Agent shall notify all
Holders whose funds are unclaimed by placing a notice in
The Wall Street Journal concerning the availability of such
funds for three consecutive weeks.  The Fund shall be
entitled to receive, from time to time after the date fixed
for redemption, any interest earned on the funds so
deposited.

(e)                                  A
Default Period with respect to the Outstanding Series E
Preferred Shares will commence if the Fund fails to deposit
irrevocably in trust in same-day funds, with the Paying
Agent by 12:00 noon, New York City time on the Business Day
preceding the redemption date specified in the Notice of
Redemption (the "Redemption Date") or on such later date as
the Paying Agent shall authorize, the full amount of any
Redemption Price payable on such Redemption Date (a
"Redemption Default"); provided, that no Redemption Default
shall be deemed to have occurred in respect of Series E
Preferred Shares when the related redemption notice
provides that the redemption of such Series E Preferred
Shares is subject to one or more conditions precedent and
each such condition precedent shall not have been satisfied
at the time or times or in the manner specified in such
Notice of Redemption.  To the extent a Redemption Default
occurs with respect to Series E Preferred Shares or that
any redemption for which Notice of Redemption has been
given is otherwise prohibited, such redemption shall be
made as soon as practicable to the extent such funds become
legally available or such redemption is no longer otherwise
prohibited.  Notwithstanding the fact that a Redemption
Default has occurred and is continuing or that the Fund has
otherwise failed to redeem Series E Preferred Shares for
which a Notice of Redemption has been given, dividends and
distributions may be declared and if so declared will be
paid on Series E Preferred Shares, which shall include
those Series E Preferred Shares for which Notice of
Redemption has been given but for which deposit of funds
has not been made.

(f)                                   All
moneys paid to the Paying Agent for payment of the
Redemption Price of Series E Preferred Shares called for
redemption shall be held in trust by the Paying Agent for
the benefit of Holders of the Series E Preferred Shares so
to be redeemed.  A Redemption Default will occur on account
of the Fund's failure to timely deposit any required
Redemption Price with the Paying Agent and any resulting
Default Period will end in accordance with paragraph
2(c)(ii).

(g)                                  So long
as the Series E Preferred Shares are held of record by the
nominee of the Securities Depository, the Redemption Price
for such shares will be paid on the date fixed for
redemption to the nominee of the Securities Depository for
distribution to agent members for distribution to the
Persons for whom they are acting as agent.

(h)                                 Except
for the provisions described above, nothing contained in
this Statement of Preferences limits any right of the Fund
to purchase or otherwise acquire Series E Preferred Shares
outside of an Auction at any price, whether higher or lower
than the price that would be paid in connection with an
optional or mandatory redemption, so long as, at the time
of any such purchase, there is no arrearage in the payment
of dividends or distributions on, or the Redemption Price
with respect to, any Series E Preferred Shares for which
Notice of Redemption has been given, and the Fund meets
Asset Coverage and the Basic Maintenance Test after giving
effect to such purchase or acquisition on the date
thereof.  Any Series E Preferred Shares which are
purchased, redeemed or otherwise acquired by the Fund shall
have no voting rights.  If fewer than all the Outstanding
Series E Preferred Shares are redeemed or otherwise
acquired by the Fund, the Fund shall give notice of such
transaction to the Auction Agent.

(i)                                     In
the case of any redemption pursuant to this paragraph 3,
only whole Series E Preferred Shares shall be redeemed, and
in the event that any provision of the Governing Documents
would require redemption of a fractional share, the Auction
Agent shall be authorized to round up so that only whole
shares are redeemed.

(j)
Notwithstanding anything herein to the contrary, the Board
of Trustees may authorize, create or issue other series of
Preferred Shares ranking on a parity with the Series E
Preferred Shares with respect to the payment of dividends
or distributions or the distribution of assets upon
dissolution, liquidation or winding up of the affairs of
the Fund, to the extent permitted by the 1940 Act, if upon
issuance of any such series, either (i) the net proceeds
from the sale of such shares (or such portion thereof
needed to redeem or repurchase the Outstanding Series E
Preferred Shares) are deposited with the Auction Agent,
Notice of Redemption as contemplated by paragraph 3(b) has
been delivered prior thereto or is sent promptly
thereafter, and such proceeds are used to redeem all
Outstanding Series E Preferred Shares or (ii) the Fund
would meet Asset Coverage, the Basic Maintenance Test and
the requirements of paragraph 9 immediately following such
issuance and any redemption of Preferred Shares (which may
include a portion of the Series E Preferred Shares) to be
effected with the proceeds of such issuance.

4.
Designation of Dividend Period.

(a)                                 The
initial Dividend Period for the Series E Preferred Shares
shall be as determined in the manner under "Designation"
above.  The Fund shall designate the duration of subsequent
Dividend Periods of the Series E Preferred Shares;
provided, however, that no such designation shall be
necessary for a Standard Dividend Period and, provided
further, that any designation of a Special Dividend Period
for the Series E Preferred shall be effective only if
(i) notice thereof shall have been given as provided
herein, (ii) any failure to pay in a timely manner to the
Auction Agent the full amount of any dividend or
distribution on, or the Redemption Price of, the Series E
Preferred Shares shall have been cured as provided for
herein, (iii) Sufficient Clearing Orders shall have existed
in an Auction held for the Series E Preferred Shares on the
Auction Date immediately preceding the first day of such
proposed Special Dividend Period, (iv) if the Fund shall
have mailed a Notice of Redemption with respect to any
Series E Preferred Shares, the Redemption Price with
respect to such shares shall have been deposited with the
Paying Agent, and (v) the Fund has confirmed that as of the
Auction Date next preceding the first day of such Special
Dividend Period, it has Eligible Assets with an aggregate
Discounted Value at least equal to the Basic Maintenance
Amount, and the Fund has consulted with the Broker-Dealers
and has provided notice of such designation and a Basic
Maintenance Report for the most recent Valuation Date to
each Rating Agency.

(b)                                 If the
Fund proposes to designate any Special Dividend Period, not
fewer than seven Business Days (or two Business Days in the
event the duration of the Dividend Period prior to such
Special Dividend Period is fewer than ten Business Days)
nor more than 30 Business Days prior to the first day of
such Special Dividend Period, notice shall be (i) made by
press release and (ii) communicated by the Fund by
telephonic or other means to the Auction Agent and the lead
Broker-Dealers, initially Citigroup Global Markets Inc. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated, and
confirmed in writing promptly thereafter.  Each such notice
shall state (x) that the Fund proposes to exercise its
option to designate a succeeding Special Dividend Period,
specifying the first and last days thereof and (y) that the
Fund will by 3:00 P.M., New York City time, on the second
Business Day next preceding the first day of such Special
Dividend Period, notify the Auction Agent, who will
promptly notify the Broker-Dealers, of either (A) its
determination, subject to certain conditions, to proceed
with such Special Dividend Period, subject to the terms of
any Specific Redemption Provisions, or (B) its
determination not to proceed with such Special Dividend
Period, in which latter event the succeeding Dividend
Period shall be a Standard Dividend Period.  No later than
3:00 P.M., New York City time, on the second Business Day
next preceding the first day of any proposed Special
Dividend Period, the Fund shall deliver to the Auction
Agent, who will promptly deliver to the Broker-Dealers and
Existing Holders, either:

1.                                      a notice
stating (a) that the Fund has determined to
designate the next succeeding Dividend Period as
a Special Dividend Period, (b) the first and last
days thereof and (c) the terms of any Specific
Redemption Provisions; or

2.                                      a notice
stating that the Fund has determined not to
exercise its option to designate a Special
Dividend Period.

If the Fund fails to deliver either such notice
with respect to the designation of any proposed Special
Dividend Period to the Auction Agent or is unable to make
the confirmation provided in paragraph 4(a)(v) by
3:00 P.M., New York City time, on the second Business Day
next preceding the first day of such proposed Special
Dividend Period, the Fund shall be deemed to have delivered
a notice to the Auction Agent with respect to such Dividend
Period to the effect set forth in clause (2) above, thereby
resulting in a Standard Dividend Period.

5.
Restrictions on Transfer.

(a)                                 Series E
Preferred Shares may be transferred only (a) pursuant to an
Order placed in an Auction, (b) to or through a Broker-
Dealer or (c) to the Fund or any Affiliate.
Notwithstanding the foregoing, a transfer other than
pursuant to an Auction will not be effective unless the
selling Existing Holder or the Agent Member of such
Existing Holder (in the case of an Existing Holder whose
shares are listed in its own name on the books of the
Auction Agent), or the Broker-Dealer or Agent Member of
such Broker-Dealer (in the case of a transfer between
persons holding any Series E Preferred Shares through
different Broker-Dealers), advises the Auction Agent of
such transfer.  Any certificates representing Series E
Preferred Shares issued to the Securities Depository will
bear legends with respect to the restrictions described
above and stop-transfer instructions will be issued to the
Transfer Agent and/or Registrar.

6.                                      Voting
Rights.

(a)                                 General.

Except as otherwise provided in the Governing
Documents or a resolution of the Board of Trustees, or as
required by applicable law, Holders of Series E Preferred
Shares shall have no power to vote on any matter except
matters submitted to a vote of the Common Shares.  In any
matter submitted to a vote of the holders of the Common
Shares, each Holder of Series E Preferred Shares shall be
entitled to one vote for each Series E Preferred Share held
and the Holders of Outstanding Preferred Shares and Common
Shares shall vote together as a single class; provided,
however, that at any meeting of the shareholders of the
Fund held for the election of trustees, the Holders of
Outstanding Preferred Shares, including the Series E
Preferred Shares, shall be entitled, as a class, to the
exclusion of the holders of all other securities and
classes of capital shares of the Fund, to elect a number of
the Fund's trustees, such that following the election of
trustees at the meeting of the shareholders, the Fund's
Board of Trustees shall contain two trustees elected by the
Holders of the Outstanding Preferred Shares as a class.
Subject to paragraph 6(b), the holders of outstanding
capital shares of the Fund, including the Holders of
Outstanding Preferred Shares, including the Series E
Preferred Shares, voting as a single class, shall elect the
balance of the trustees.

(b)                                 Right to
Elect Majority of Board of Trustees.

During any period in which any one or more of the
conditions described below shall exist (such period being
referred to herein as a "Voting Period"), the number and/or
composition of trustees constituting the Board of Trustees
shall be adjusted as necessary to permit the Holders of the
Outstanding Preferred Shares, including the Series E
Preferred Shares, voting separately as one class (to the
exclusion of the holders of all other securities and
classes of capital shares of the Fund) to elect the number
of trustees that, when added to the two trustees elected
exclusively by the Holders of Preferred Shares pursuant to
paragraph 6(a) above, would constitute a simple majority of
the Board of Trustees as so adjusted.  The Fund and the
Board of Trustees shall take all necessary actions,
including effecting the removal of trustees or the
amendment of the Fund's Declaration, to effect an
adjustment of the number and/or composition of trustees as
described in the preceding sentence.  A Voting Period shall
commence:

(i)
if at any time accumulated dividends and distributions
(whether or not earned or declared, and whether or not
funds are then legally available in an amount
sufficient therefor) on the Outstanding Series E
Preferred Shares equal to at least two full years'
dividends and distributions shall have become due and
unpaid and sufficient cash or specified securities
shall not have been deposited with the Paying Agent
for the payment in full of such accumulated dividends
and distributions; or

(ii)
if at any time Holders of any other Preferred Shares
are entitled to elect a majority of the trustees of
the Fund under the 1940 Act or the Statement of
Preferences creating such shares.

Upon the termination of a Voting
Period, the voting rights described in this paragraph
6(b) shall cease, subject always, however, to the
reverting of such voting rights in the holders of
Preferred Shares upon the further occurrence of any of
the events described in this paragraph 6(b).

(c)                                  Right
to Vote with Respect to Certain Other Matters.

Subject to paragraph 1 of Part III of
this Statement of Preferences, so long as the Series E
Preferred Shares are Outstanding, the Fund shall not,
without the affirmative vote of the Holders of a majority
(as defined in the 1940 Act) of the Preferred Shares
Outstanding at the time and present and voting on such
matter, voting separately as one class, amend, alter or
repeal the provisions of the Governing Documents so as to
in the aggregate adversely affect the rights and
preferences set forth in any Statement of Preferences,
including the Series E Preferred Shares.  To the extent
permitted under the 1940 Act, in the event more than one
series of Preferred Shares are Outstanding, the Fund shall
not effect any of the actions set forth in the preceding
sentence which in the aggregate adversely affects the
rights and preferences set forth in the Statement of
Preferences for a series of Preferred Shares differently
than such rights and preferences for any other series of
Preferred Shares without the affirmative vote of the
Holders of at least a majority of the Preferred Shares
Outstanding and present and voting on such matter of each
series adversely affected (each such adversely affected
series voting separately as a class to the extent its
rights are affected differently).  The Holders of the
Series E Preferred Shares shall not be entitled to vote on
any matter that affects the rights or interests of only one
or more other series of Preferred Shares.  The Fund shall
notify each Rating Agency ten Business Days prior to any
such vote described above.  Unless a higher percentage is
required under the Governing Documents or applicable
provisions of the Delaware Statutory Trust Act or the 1940
Act, the affirmative vote of the Holders of a majority of
the Outstanding Preferred Shares, including the Series E
Preferred Shares, voting together as a single class, will
be required to approve any plan of reorganization adversely
affecting the Preferred Shares or any action requiring a
vote of security holders under Section 13(a) of the 1940
Act.  For purposes of this paragraph 6(c), the phrase "vote
of the Holders of a majority of the Outstanding Preferred
Shares" (or any like phrase) shall mean, in accordance with
Section 2(a)(42) of the 1940 Act, the vote, at the annual
or a special meeting of the shareholders of the Fund duly
called (i) of 67 percent or more of the Preferred Shares
present at such meeting, if the Holders of more than 50
percent of the Outstanding Preferred Shares are present or
represented by proxy; or (ii) of more than 50 percent of
the Outstanding Preferred Shares, whichever is less.  The
class vote of Holders of Preferred Shares described above
will in each case be in addition to a separate vote of the
requisite percentage of Common Shares and Preferred Shares,
including the Series E Preferred Shares, voting together as
a single class, necessary to authorize the action in
question.  An increase in the number of authorized
Preferred Shares pursuant to the Governing Documents or the
issuance of additional shares of any series of Preferred
Shares (including the Series E Preferred Shares) pursuant
to the Governing Documents shall not in and of itself be
considered to adversely affect the rights and preferences
of the Holders of Preferred Shares.

(d)                                 Voting
Procedures.

(i)
As soon as practicable after the accrual of any right
of the Holders of Preferred Shares, including the
Series E Preferred Shares, to elect additional
trustees as described in paragraph 6(b), the Fund
shall call a special meeting of such Holders and
instruct the Auction Agent to mail a notice of such
special meeting to the Holders of Series E Preferred
Shares, such meeting to be held not less than 10 nor
more than 20 days after the date of mailing of such
notice.  If the Fund fails to send such notice to the
Auction Agent or if the Fund does not call such a
special meeting, it may be called by any such Holder
on like notice.  The record date for determining the
Holders entitled to notice of and to vote at such
special meeting shall be the close of business on the
day on which such notice is mailed or such other day
as the Board of Trustees shall determine.  At any such
special meeting and at each meeting held during a
Voting Period, such Holders of Preferred Shares,
voting together as a class (to the exclusion of the
holders of all other securities and classes of capital
shares of the Fund), shall be entitled to elect the
number of trustees prescribed in paragraph 6(b) on a
one-vote-per-share basis.  At any such meeting, or
adjournment thereof in the absence of a quorum, a
majority of the Holders of Preferred Shares, including
the Series E Preferred Shares, present in person or by
proxy shall have the power to adjourn the meeting
without notice, other than an announcement at the
meeting, until a date not more than 120 days after the
original record date.

(ii)
For purposes of determining any rights of the Holders
of the Preferred Shares, including the Series E
Preferred Shares, to vote on any matter, whether such
right is created by this Statement of Preferences, by
the other provisions of the Governing Documents, by
statute or otherwise, a share of Series E Preferred
Shares which is not Outstanding shall not be counted.

(iii)                               The
terms of office of all persons who are trustees of the
Fund at the time of a special meeting of Holders of
Preferred Shares to elect trustees and who remain
trustees following such meeting shall continue,
notwithstanding the election at such meeting by such
Holders of the number of trustees that they are
entitled to elect, and the persons so elected by such
Holders, together with the two incumbent trustees
elected by the Holders of Preferred Shares and the
remaining incumbent trustees elected by the holders of
the Common Shares and Preferred Shares, shall
constitute the duly elected trustees of the Fund.

(iv)                              Upon
the expiration of a Voting Period, the terms of office
of the additional trustees elected by the Holders of
Preferred Shares pursuant to paragraph 6(b) above
shall expire, and the remaining trustees shall
constitute the trustees of the Fund and the voting
rights of such Holders of Preferred Shares, including
Series E Preferred Shares, to elect additional
trustees pursuant to paragraph 6(b) above shall cease,
subject to the provisions of the last sentence of
paragraph 6(b). Upon the expiration of the terms of
the trustees elected by the holders of Preferred
Shares pursuant to paragraph 6(b) above, the number of
trustees shall be automatically reduced to the number
of trustees on the Board immediately preceding such
Voting Period.

(e)
Exclusive Remedy.

Unless otherwise required by law, the
Holders of Series E Preferred Shares shall not have any
rights or preferences other than those specifically set
forth herein.  The Holders of Series E Preferred Shares
shall have no preemptive rights or rights to cumulative
voting.  In the event that the Fund fails to pay any
dividends or distributions on the Series E Preferred
Shares, the exclusive remedy of the Holders shall be the
right to vote for trustees pursuant to the provisions of
this paragraph 6.

(f)
Notification to Rating Agency.

In the event a vote of Holders of
Preferred Shares is required pursuant to the provisions of
Section 13(a) of the 1940 Act, as long as the Series E
Preferred Shares are rated by a Rating Agency at the
request of the Fund, the Fund shall, not later than ten
Business Days prior to the date on which such vote is to be
taken, notify each Rating Agency that such vote is to be
taken and the nature of the action with respect to which
such vote is to be taken and, not later than ten Business
Days after the date on which such vote is taken, notify
each Rating Agency of the result of such vote.

7.
Liquidation Rights.

(a)                                 In the
event of any liquidation, dissolution or winding up of the
affairs of the Fund, whether voluntary or involuntary, the
Holders of Series E Preferred Shares shall be entitled to
receive out of the assets of the Fund available for
distribution to shareholders, after claims of creditors but
before any distribution or payment shall be made in respect
of the Common Shares or any other shares of the Fund
ranking junior to the Series E Preferred Shares as to
liquidation payments, a liquidation distribution in the
amount of $25,000.00 per share (the "Liquidation
Preference"), plus an amount equal to all unpaid dividends
and distributions accumulated to and including the date
fixed for such distribution or payment (whether or not
earned or declared by the Fund, but excluding interest
thereon), and such Holders shall be entitled to no further
participation in any distribution or payment in connection
with any such liquidation, dissolution or winding up.

(b)                                 If, upon
any liquidation, dissolution or winding up of the affairs
of the Fund, whether voluntary or involuntary, the assets
of the Fund available for distribution among the Holders of
all Outstanding Series E Preferred Shares, and any other
Outstanding class or series of Preferred Shares ranking on
a parity with the Series E Preferred Shares as to payment
upon liquidation, shall be insufficient to permit the
payment in full to such Holders of Series E Preferred
Shares of the Liquidation Preference plus accumulated and
unpaid dividends and distributions and the amounts due upon
liquidation with respect to such other Preferred Shares,
then such available assets shall be distributed among the
Holders of Series E Preferred Shares and such other
Preferred Shares ratably in proportion to the respective
preferential liquidation amounts to which they are
entitled.  Unless and until the Liquidation Preference plus
accumulated and unpaid dividends and distributions has been
paid in full to the Holders of Series E Preferred Shares,
no dividends or distributions will be made to holders of
Common Shares or any other shares of the Fund ranking
junior to the Series E Preferred Shares as to liquidation.

8.                                      Auction
Agent.

For so long as the Series E Preferred Shares are
Outstanding, the Auction Agent, duly appointed by the Fund
to so act, shall be in each case a commercial bank, trust
company or other financial institution independent of the
Fund and its Affiliates (which, however, may engage or have
engaged in business transactions with the Fund or its
Affiliates) and at no time shall the Fund or any of its
Affiliates act as the Auction Agent in connection with the
Auction Procedures.  If the Auction Agent resigns or for
any reason its appointment is terminated during any period
that any Series E Preferred Shares are Outstanding, the
Fund shall use its best efforts promptly thereafter to
appoint another qualified commercial bank, trust company or
financial institution to act as the Auction Agent.

9.                                      Coverage Tests.

(a)
Determination of Compliance.

For so long as the Series E Preferred
Shares are Outstanding, the Fund shall make the following
determinations:

(i)             Asset Coverage as follows:

(A)
As of each Quarterly Valuation Date, the Fund
shall determine whether Asset Coverage is met as
of that date.  In the event the Fund determines
that it has failed to meet Asset Coverage as of
such Quarterly Valuation Date, the Fund will
notify each Rating Agency of such failure in
writing (which notification may be by facsimile
or other electronic means) on or before
5:00 P.M., New York City time, on the fifth
Business Day following the date of such determination.

(B)
The Fund shall deliver to each Rating Agency an
"Asset Coverage Certificate" which sets forth the
determination of paragraph 9(a)(i)(A) above
(1) as of the Date of Original Issue and,
thereafter, (2) as of each Annual Valuation
Date.  Such Asset Coverage Certificate shall be
delivered in the case of clause (1) on the Date
of Original Issue and in the case of clause
(2) on or before the fifteenth Business Day
following such Quarterly Valuation Date or the
relevant Cure Date, as the case may be.

(ii)          Basic Maintenance Amount as follows:

(A)
For so long as the Series E Preferred Shares are
rated by Moody's and/or S&P at the Fund's
request, the Fund shall maintain, on each
Valuation Date, Eligible Assets having an
Adjusted Value at least equal to the Basic
Maintenance Amount, as of such Valuation Date.
Upon any failure to maintain Eligible Assets
having an Adjusted Value at least equal to the
Basic Maintenance Amount, the Fund shall use all
commercially reasonable efforts to re-attain
Eligible Assets having an Adjusted Value at least
equal to the Basic Maintenance Amount on or prior
to the Basic Maintenance Amount Cure Date, by
altering the composition of its portfolio or
otherwise.

(B)
On or before 5:00 P.M., New York City time, on
the fifth Business Day after a Valuation Date on
which the Fund fails to satisfy the Basic
Maintenance Amount, and on the fifth Business Day
after the Basic Maintenance Amount Cure Date with
respect to such Valuation Date, the Fund shall
deliver to each Rating Agency notice of such
failure, which will be deemed to have been
delivered to such Rating Agency if such Rating
Agency receives a copy or facsimile or other
electronic transcription or transmission thereof
and on the same day the Fund mails or sends to
such Rating Agency for delivery on the next
Business Day the full Basic Maintenance Report.
In addition, the Fund shall deliver a Basic
Maintenance Report to each Rating Agency as of
each Monthly Valuation Date, in each case on or
before the fifth Business Day after such day.  A
failure by the Fund to deliver a Basic
Maintenance Report pursuant to the preceding
sentence shall be deemed to be delivery of a
Basic Maintenance Report indicating the
Discounted Value for all assets of the Fund is
less than the Basic Maintenance Amount, as of the
relevant Valuation Date.

(C)
Within thirty (30) days after the date of
delivery of a Basic Maintenance Report in
accordance with paragraph 9(a)(ii)(B) relating to
any Annual Valuation Date, the Fund shall cause
the Independent Accountant to send an
Accountant's Confirmation to each Rating Agency
with respect to such Basic Maintenance Report.

(D)
Within fifteen (15) Business Days after the date
of delivery of notice in accordance with
paragraph 9(a)(ii)(B) relating to each, if any,
Valuation Date on which the Fund failed to
satisfy the Basic Maintenance Amount and the
Basic Maintenance Amount Cure Date with respect
to such failure to satisfy the Basic Maintenance
Amount, the Fund shall cause the Independent
Accountant to provide to each Rating Agency an
Accountant's Confirmation as to such failure.

(E)
If any Accountant's Confirmation delivered
pursuant to paragraph (C) or (D) of this
paragraph 9(a)(ii) does not agree with the Fund's
calculation of the Basic Maintenance Report for a
particular Valuation Date for which such
Accountant's Confirmation was required to be
delivered, or shows that a lower aggregate
Discounted Value for the aggregate Eligible Asset
in respect of any Rating Agency than was
determined by the Fund, the calculation or
determination made by such Independent Accountant
shall be final and conclusive and shall be
binding on the Fund, and the Fund shall
accordingly amend and deliver the Basic
Maintenance Report to the relevant Rating Agency
promptly following receipt by the Fund of such
Accountant's Confirmation.

(F)
  On or before 5:00 p.m., New York City time, on
the fifth Business Day after the Date of Original
Issue of Series E Preferred Shares, the Fund
shall complete and deliver to each Rating Agency
a Basic Maintenance Report as of the close of
business on such Date of Original Issue.

(G)
As for any Valuation Date for which the Fund's
ratio of the Discounted Value of Eligible Assets
in respect of any Rating Agency to the Basic
Maintenance Amount is less than or equal to 110%,
the Fund shall deliver, by fax or email before
5:00 p.m. New York City time on the first
Business Day following such Valuation Date,
notice of such ratio to each Rating Agency.

(b)                                 Failure
to Meet Asset Coverage Requirements.

If the Fund fails to have Asset
Coverage as provided in paragraph 9(a)(i)(A) or to have
Eligible Assets having an Adjusted Value at least equal to
the Basic Maintenance Amount as provided in paragraph
9(a)(ii)(A) and such failure is not cured by the applicable
Cure Date, Preferred Shares, which at the Fund's
determination (to the extent permitted by the 1940 Act and
Delaware law) may include any proportion of Series E
Preferred Shares, will be subject to mandatory redemption
as set forth in paragraph 3.

(c)                                  Status
of Series E Preferred Shares Called for Redemption.

For purposes of determining whether the
requirements of paragraphs 9(a)(i)(A) and
9(a)(ii)(A) hereof are satisfied, (i) no Series E Preferred
Share or other Preferred Share shall be deemed to be
Outstanding for purposes of any computation if, prior to or
concurrently with such determination, sufficient Deposit
Assets to pay the full Redemption Price for such share
shall have been deposited in trust with the Paying Agent
(or applicable dividend-disbursing agent) and the requisite
Notice of Redemption shall have been given, and (ii) such
Deposit Assets deposited with the Paying Agent (or
dividend-disbursing agent) shall not be included.

(d)                                 Certain
Notifications Relating to Market Value.

In the event the Market Value of an
Eligible Asset is determined pursuant to clause (a)(iii) of
the definition of Market Value set forth in paragraph 13,
the Fund shall promptly inform each Rating Agency in
writing (which notice may be by facsimile or other
electronic means) of the basis upon which the Market Value
of such Eligible Asset was determined.

10.                               Certain Other
Restrictions.

(a)                                 For so
long as the Series E Preferred are rated by a Rating Agency
at the Fund's request, the Fund will not, and will cause
the Adviser not to, (i) knowingly and willfully purchase or
sell any asset for the specific purpose of causing, and
with the actual knowledge that the effect of such purchase
or sale will be to cause, the Fund to have Eligible Assets
having an Adjusted Value as of the date of such purchase or
sale to be less than the Basic Maintenance Amount as of
such date, (ii) in the event that, as of the immediately
preceding Valuation Date, the Adjusted Value of the Fund's
Eligible Assets exceeded the Basic Maintenance Amount by 5%
or less, alter the composition of the Fund's assets in a
manner reasonably expected to reduce the Adjusted Value of
the Fund's Eligible Assets, unless the Fund shall have
confirmed that, after giving effect to such alteration, the
Adjusted Value of the Fund's Eligible Assets exceeded the
Basic Maintenance Amount or (iii) declare or pay any
dividend or other distribution on any Common Shares or
repurchase any Common Shares, unless the Fund shall have
confirmed that, after giving effect to such declaration,
other distribution or repurchase, the Fund continued to
satisfy the requirements of paragraph 9(a)(ii).

(b)                                 For so
long as the Series E Preferred Shares are rated by any
Rating Agency at the Fund's request, unless the Fund shall
have received from each such Rating Agency, the Fund may
engage in the lending of its portfolio securities only in
an amount of up to 20% of the Fund's total assets, provided
that the Fund receives cash collateral for such loaned
securities that is maintained at all times in an amount
equal to at least 100% of the then current market value of
the loaned securities and, if invested, is invested only in
Short-Term Money Market Instruments or in money market
mutual funds meeting the requirements of Rule 2a 7 under
the 1940 Act that maintain a constant $1.00 per share net
asset value and treat the loaned securities rather than the
collateral as the assets of the Fund for purposes of
determining compliance with paragraph 9.

(c)                                  For so
long as the Series E Preferred Shares are rated by any
Rating Agency at the Fund's request, the Fund shall not
consolidate with, merge into, sell or otherwise transfer
all or substantially all of its assets to another Person or
adopt a plan of liquidation of the Fund, in each case
without providing prior written notification to each Rating
Agency.

11.                               Limitation on
Incurrence of Additional Indebtedness,
Certain Transactions and Issuance of
Additional Preferred Shares.

(a)                                 So long
as the Series E Preferred Shares are Outstanding, the Fund
may issue and sell one or more series of a class of senior
securities of the Fund representing indebtedness under
Section 18 of the 1940 Act and/or otherwise create or incur
indebtedness, provided that immediately after giving effect
to the incurrence of such indebtedness and to its receipt
and application of the proceeds thereof, the Fund shall
have an "asset coverage" for all senior securities
representing indebtedness, as defined in Section 18(h) of
the 1940 Act, of at least 300% of the amount of all
indebtedness of the Fund then Outstanding and no such
additional indebtedness shall have any preference or
priority over any other indebtedness of the Fund upon the
distribution of the assets of the Fund or in respect of the
payment of interest.  Any possible liability resulting from
lending and/or borrowing portfolio securities, entering
into reverse repurchase agreements, entering into futures
contracts and writing options, to the extent such
transactions are made in accordance with the investment
restrictions of the Fund then in effect, shall not be
considered to be indebtedness limited by this paragraph
11(a).

(b)                                 So long
as any Series E Preferred Shares are Outstanding and S&P is
rating such Series E Preferred Shares at the Fund's
request, the Fund will not, unless it has received written
confirmation that any such transaction would not impair the
rating then assigned by S&P to such Series E Preferred
Shares, engage in any one or more of the following
transactions:

(c)
purchase or sell futures contracts; write, purchase or
sell options on futures contracts; or write put
options (except covered put options) or call options
(except covered call options); enter into swap, cap or
floor agreements (collectively, "S&P Hedging
Transactions"), except subject to the following
limitations:

(A)
for each net long or short position in S&P
Hedging Transactions, the Fund will maintain in a
segregated account with the Fund's custodian or
with the counterparty to such S&P Hedging
Transaction an amount of cash or readily
marketable securities having a value, when added
to any amounts on deposit with the Fund's futures
commission merchants or brokers as margin or
premium for such position, at least equal to the
market value of the Fund's potential obligations
on such position, marked-to-market on a daily
basis, in each case as and to the extent required
by the applicable rules or orders of the
Commission or by interpretations of the
Commission's staff;

(B)
the Fund will not engage in any S&P Hedging
Transaction which would cause the Fund at the
time of such transaction to own or have sold the
lesser of (1) outstanding futures contracts, in
aggregate, based on the Standard & Poor's 500
Index, the Dow Jones Industrial Average, the
Russell 2000 Index, the Wilshire 5000 Index, the
Nasdaq Composite Index and the New York Stock
Exchange Composite Index (or any component of any
of the forgoing) exceeding in number 50% of the
market value of the Fund's total assets or
(2) outstanding futures contracts based on any of
the aforementioned indices exceeding in number
10% of the average number of daily traded futures
contracts based on such index in the 30 days
preceding the time of effecting such transaction
as reported by The Wall Street Journal;

(C)
the Fund will engage in closing transactions to
close out any outstanding futures contract which
the Fund owns or has sold or any outstanding
option thereon owned by the Fund in the event
(1) the Fund does not have S&P Eligible Assets
with an aggregate Discounted Value equal to or
greater than the Series E Preferred Basic
Maintenance Amount on two consecutive Valuation
Dates and (2) the Fund is required to pay
variation margin on the second such Valuation
Date;

(D)
the Fund will engage in a closing transaction to
close out any outstanding futures contract or
option thereon at least one week prior to the
delivery date under the terms of the futures
contract or option thereon unless the Fund holds
the securities deliverable under such terms; and

(E)
when the Fund writes a futures contract or option
thereon, either the amount of margin posted by
the Fund (in the case of a futures contract) or
the marked-to-market value of the Fund's
obligation (in the case of a put option written
by the Fund) shall be treated as a liability of
the Fund for purposes of calculating the Series E
Preferred Basic Maintenance Amount, or, in the
event the Fund writes a futures contract or
option thereon which requires delivery of an
underlying security and the Fund does not wish to
treat its obligations with respect thereto as a
liability for purposes of calculating the
Series E Preferred Basic Maintenance Amount, it
shall hold such underlying security in its
portfolio and shall not include such security to
the extent of such contract or option as an S&P
Eligible Asset.

(ii)
borrow money, except for the purpose of clearing
securities transactions if (A) the Series E Preferred
Basic Maintenance Amount would continue to be
satisfied after giving effect to such borrowing and
(B) such borrowing (1) is privately arranged with a
bank or other person and is not intended to be
publicly distributed or (2) is for "temporary
purposes," and is in an amount not exceeding 5 percent
of the market value of the total assets of the Fund at
the time of the borrowing; for purposes of the
foregoing, "temporary purposes" means that the
borrowing is to be repaid within sixty days and is not
to be extended or renewed;

(iii)
engage in any short sales of equity securities (other
than short sales against the box) unless the Fund
maintains in a segregated account with the Fund's
custodian an amount of cash or other readily
marketable securities having a market value, when
added to any amounts on deposit with the Fund's broker
as collateral for its obligation to replace the
securities borrowed and sold short, at least equal to
the current market value of securities sold short,
marked-to-market on a daily basis;

(iv)
utilize any pricing service other than a Pricing
Service or such other pricing service then permitted
by S&P;

(v)
enter into any reverse repurchase agreement, other
than with a counterparty that is rated at least A 1+
by S&P;

(vi)                              enter
into any interest rate swap agreements, unless:

A.
        The counterparty to the swap transaction
has a short term rating of 'A 1' or, if the
counterparty does not have a short term rating,
the counterparty's senior unsecured long term
debt rating is 'A-' or higher;

B.
        The interest rate swap transaction will
be marked to market weekly by the swap
counterparty;

C.
        Provision is made for the agreement to
terminate immediately in the event the trust
fails to maintain an aggregate discounted value
at least equal to the basic maintenance amount on
two consecutive valuation dates;

D.
        For the purpose of calculating the asset
coverage test 90% of any positive mark to market
valuation of the fund's rights will be eligible
assets and 100% of any negative mark to market
valuation of the fund's rights will be included
in the calculation of the basic maintenance
amount; and

E.
         The trust maintains liquid assets with a
value at least equal to the net amount of the
excess, if any, of the fund's obligations over
its entitlement with respect to each swap and at
least equal to the fund's obligations with
respect to any caps or floors.

(c)                        So long as any
Series E Preferred Shares are Outstanding, the Fund may
issue and sell shares of one or more other series of
Preferred Shares constituting a series of a class of senior
securities of the Fund representing stock under Section 18
of the 1940 Act in addition to the Series E Preferred
Shares and other Preferred Shares then Outstanding,
provided that (i) the Fund shall, immediately after giving
effect to the issuance of such additional Preferred Shares
and to its receipt and application of the proceeds thereof,
have an "asset coverage" for all senior securities which
are stock, as defined in Section 18(h) of the 1940 Act, of
at least 200% of the Series E Preferred Shares and all
other Preferred Shares of the Fund then Outstanding, and
(ii) no such additional Preferred Stock (including any
additional Series E Preferred Shares) shall have any
preference or priority over any other Preferred Shares of
the Fund upon the distribution of the assets of the Fund or
in respect of the payment of dividends and distributions.

12.                               Termination.

In the event that no Series E Preferred Shares
are Outstanding, all rights and preferences of such shares
established and designated hereunder shall cease and
terminate, and all obligations of the Fund under this
Statement of Preferences shall terminate.

13.                               Definitions.

Unless the context or use indicates another or
different meaning or intent, each of the following terms
when used in this Statement of Preferences shall have the
meaning ascribed to it below, whether such term is used in
the singular or plural and regardless of tense:

"Accountant's Confirmation" means a letter from
an Independent Accountant delivered to each Rating Agency
with respect to certain Basic Maintenance Reports
substantially to the effect that:

(a)                                 the
Independent Accountant has read the Basic Maintenance
Report or Reports prepared by the Administrator during the
referenced calendar year that are referred to in such
letter;

(b)                                 with
respect to the issue size compliance, issuer
diversification and industry diversification calculations,
such calculations and the resulting Market Value of the
relevant Eligible Assets included in the Reports and the
Adjusted Value of such Eligible Assets included in the
Reports are numerically correct;

(c)                                  with
respect to the excess or deficiency of the Adjusted Value
of the relevant Eligible Assets included in the Reports
when compared to the Basic Maintenance Amount calculated
for such Rating Agency the results of the calculation set
forth in the Reports have been recalculated and are
numerically correct;

(d)                                 with
respect to the Rating Agency ratings on corporate evidences
of indebtedness, convertible corporate evidences of
indebtedness and preferred stock listed in the Reports,
that information has been traced and agrees with the
information provided directly or indirectly by the
respective Rating Agencies (in the event such information
does not agree or such information is not listed in the
accounting records of the Fund, the Independent Accountants
will inquire of the Rating Agencies what such information
is and provide a listing in their letter of such
differences, if any);

(e)                                  with
respect to issuer name and coupon or dividend rate listed
in the Reports, that information has been traced and agrees
with information listed in the accounting records of the
Fund;

(f)                                   with
respect to issue size listed in the Reports, that
information has been traced and agrees with information
provided by a Pricing Service or such other services as the
relevant Rating Agency may authorize from time to time;

(g)                                  with
respect to the prices (or alternative permissible factors
used in calculating the Market Value as provided by this
Statement of Preferences) provided by the Administrator of
the Fund's assets for purposes of valuing securities in the
portfolio, the Independent Accountant has traced the price
used in the Reports to the price provided by such
Administrator (in accordance with the procedures provided
in this Statement of Preferences) and verified that such
information agrees (in the event such information does not
agree, the Independent Accountants will provide a listing
in their letter of such differences); and

(h)                                 with
respect to the description of each security included in the
Reports, the description of the relevant Eligible Assets
has been compared to the definition of such Rating Agency's
Eligible Assets contained in this Statement of Preferences,
and the description as appearing in the Reports agrees with
the definition of such Rating Agency's Eligible Assets as
described in this Statement of Preferences.

Each such letter may state that:  (i) such
Independent Accountant has made no independent verification
of the accuracy of the description of the investment
securities listed in the Reports or the Market Value of
those securities nor has it performed any procedures other
than those specifically outlined above for the purposes of
issuing such letter; (ii) unless otherwise stated in the
letter, the procedures specified therein were limited to a
comparison of numbers or a verification of specified
computations applicable to numbers appearing in the Reports
and the schedule(s) thereto; (iii) the foregoing procedures
do not constitute an examination in accordance with
generally accepted auditing standards and the Reports
contained in the letter do not extend to any of the Fund's
financial statements taken as a whole; (iv) such
Independent Accountant does not express an opinion as to
whether such procedures would enable such Independent
Accountant to determine that the methods followed in the
preparation of the Reports would correctly determine the
Market Value or Discounted Value of the investment
portfolio; and (v) accordingly, such Independent Accountant
expresses no opinion as to the information set forth in the
Reports or in the schedule(s) thereto and makes no
representation as to the sufficiency of the procedures
performed for the purposes of this Statement of
Preferences; and such other statements as are acceptable to
the Rating Agencies.

Such letter shall also state that the Independent
Accountant is an "independent accountant" with respect to
the Fund within the meaning of the 1933 Act and the related
published rules and regulations thereunder.

"Adjusted Value" of each Eligible Asset shall be
computed as follows:

(a)                                 cash
shall be valued at 100% of the face value thereof; and

(b)                                 all
other Eligible Assets shall be valued at the applicable
Discounted Value thereof; and

(c)                                  each
asset that is not an Eligible Asset shall be valued at
zero.

"Administrator" means the other party to the
Administration Agreement with the Fund which shall
initially be Gabelli Funds, LLC, a New York limited
liability company, and will include, as appropriate, any
sub-administrator appointed by the Administrator.
"ADRs" means U.S. dollar-denominated American
Depository Receipts.
"Adviser" means Gabelli Funds, LLC, a New York
limited liability company, or such other Person that is
then serving as the investment adviser of the Fund.
"Affiliate" means, with respect to the Auction
Agent, any person known to the Auction Agent to be
controlled by, in control of or under common control with
the Fund; provided, however, that no Broker-Dealer
controlled by, in control of or under common control with
the Fund shall be deemed to be an Affiliate nor shall any
corporation or any Person controlled by, in control of or
under common control with such corporation, one of the
directors or executive officers of which is a trustee of
the Fund be deemed to be an Affiliate solely because such
trustee or executive officer is also a trustee of the Fund.

"All Hold Rate" means 90% of the Reference Rate.

"Annual Valuation Date" means the Valuation Date
each calendar year so designated by the Fund, commencing in
the calendar year 2003.

"Applicable Rate" means, with respect to the
Series E Preferred Shares, for each Dividend Period (i) if
Sufficient Clearing Bids exist for the Auction in respect
thereof, the Winning Bid Rate, (ii) if Sufficient Clearing
Orders do not exist for the Auction in respect thereof, or
an Auction does not take place with respect to such
Dividend Period because of the commencement of a Default
Period, the Maximum Rate and (iii) if all Series E
Preferred Shares are the subject of Submitted Hold Orders
for the Auction in respect thereof, the All Hold Rate.

"Asset Coverage" means asset coverage, as
determined in accordance with Section 18(h) of the 1940
Act, of at least 200% with respect to all outstanding
senior securities of the Fund which are stock, including
all Outstanding Series E Preferred Shares (or such other
asset coverage as may in the future be specified in or
under the 1940 Act as the minimum asset coverage for senior
securities which are stock of a closed-end investment
company as a condition of declaring dividends on its common
stock), determined on the basis of values calculated as of
a time within 48 hours (not including Saturdays, Sundays or
holidays) next preceding the time of such determination.

"Asset Coverage Certificate" means the
certificate required to be delivered by the Fund pursuant
to paragraph 9(a)(i)(B) of Part I of this Statement of
Preferences.

"Auction" means each periodic operation of the
Auction Procedures.

"Auction Agent" means The Bank of New York unless
and until another commercial bank, trust company, or other
financial institution appointed by a resolution of the
Board of Trustees enters into an agreement with the Fund to
follow the Auction Procedures for the purpose of
determining the Applicable Rate.

"Auction Date" means the last day of the initial
Dividend Period and each seventh day after the immediately
preceding Auction Date; provided, however, that if any such
seventh day is not a Business Day, such Auction Date shall
be the first preceding day that is a Business Day and the
next Auction Date, if for a Standard Dividend Period, shall
(subject to the same advancement procedure) be the seventh
day after the date that the preceding Auction Date would
have been if not for the advancement procedure; provided
further, however, that the Auction Date for the Auction at
the conclusion of any Special Dividend Period shall be the
last Business Day in such Special Dividend Period and that
no more than one Auction shall be held during any Dividend
Period; provided further, however, that the Auction Date
following a Default Period shall be the last Business Day
in the Standard Dividend Period that commenced during such
Default Period.  Notwithstanding the foregoing, in the
event an auction is not held because an unforeseen event or
unforeseen events cause a day that otherwise would have
been an Auction Date not to be a Business Day, then the
length of the then current dividend period will be extended
by seven days (or a multiple thereof if necessary because
of such unforeseen event or events).

"Auction Procedures" means the procedures for
conducting Auctions as set forth in Part II of this
Statement of Preferences.

"Basic Maintenance Amount" means, with respect to
the Series E Preferred Shares, as of any Valuation Date,
the dollar amount equal to (a) the sum of (i) the product
of the number of shares of each class or series of
Preferred Shares Outstanding on such Valuation Date
multiplied, in the case of each such series or class, by
the per share Liquidation Preference applicable to each
such series or class, plus any redemption premium
applicable to each class or series of Preferred Shares then
subject to redemption; (ii) to the extent not included in
(i) the aggregate amount of cash dividends and
distributions (whether or not earned or declared) that will
have accumulated for each Outstanding Preferred Share from
the most recent applicable dividend payment date to which
dividends and distributions have been paid or duly provided
for (or, in the event the Basic Maintenance Amount is
calculated on a date prior to the initial Dividend Payment
Date with respect to a class or series of the Preferred
Shares, then from the Date of Original Issue of such
shares) through the Valuation Date plus all dividends and
distributions to accumulate on the Preferred Shares then
Outstanding during the 35 days following such Valuation
Date or, if less, during the number of days following such
Valuation Date that the Preferred Shares called for
redemption are scheduled to remain Outstanding at the
applicable rate or default rate then in effect with respect
to such shares; (iii) the Fund's other liabilities due and
payable as of such Valuation Date (except that dividends
and other distributions payable by the Fund on Common
Shares shall not be included as a liability) and such
liabilities projected to become due and payable by the Fund
during the 90 days following such Valuation Date (excluding
liabilities for investments to be purchased and for
dividends and other distributions not declared as of such
Valuation Date); (iv) the amount of any indebtedness or
obligations of the Fund senior in right of Payments to the
Preferred Shares and (iv) any current liabilities of the
Fund as of such Valuation Date to the extent not reflected
in (or specifically excluded by) any of (a)(i) through
(a)(iii) (including, without limitation, and immediately
upon determination, any amounts due and payable by the Fund
pursuant to reverse repurchase agreements and any payables
for assets purchased as of such Valuation Date) less
(b) (i) the Adjusted Value of any of the Fund's assets or
(ii) the face value of any of the Fund's assets if, in the
case of both (b)(i) and (b)(ii), such assets are either
cash or evidences of indebtedness which mature prior to or
on the date of redemption or repurchase of Preferred Shares
or payment of another liability and are either U.S.
Government Obligations or evidences of indebtedness which
have a rating assigned by Moody's of at least Aaa, P 1,
VMIG 1 or MIG 1 or by S&P of at least AAA, SP 1+ or A 1+,
and are irrevocably held by the Fund's custodian bank in a
segregated account or deposited by the Fund with the
dividend-disbursing agent or Paying Agent, as the case may
be, for the payment of the amounts needed to redeem or
repurchase Preferred Shares subject to redemption or
repurchase or any of (a)(ii) through (a)(iv); and provided
that in the event the Fund has repurchased Preferred Shares
and irrevocably segregated or deposited assets as described
above with its custodian bank, the dividend-disbursing
agent or Paying Agent for the payment of the repurchase
price the Fund may deduct 100% of the Liquidation
Preference of such Preferred Shares to be repurchased from
(a) above.  Basic Maintenance Amount shall, for the
purposes of this Statement of Preferences, have a
correlative meaning with respect to any other class or
series of Preferred Shares.

"Basic Maintenance Amount Cure Date" means, with
respect to the Series E Preferred Shares, 10 Business Days
following a Valuation Date, such date being the last day
upon which the Fund's failure to comply with paragraph
9(a)(ii)(A) of Part I of this Statement of Preferences
could be cured, and shall, for the purposes of this
Statement of Preferences, have a correlative meaning with
respect to any other class or series of Preferred Shares.

"Basic Maintenance Test" means, with respect to
the Series E Preferred Shares, a test which is met if the
lower of the aggregate Discounted Values of the Moody's
Eligible Assets or the S&P Eligible Assets if both Moody's
and S&P are then rating the Series E Preferred Shares at
the request of the Fund, or the Eligible Assets of
whichever of Moody's or S&P is then doing so if only one of
Moody's or S&P is then rating the Series E Preferred Shares
at the request of the Fund, meets or exceeds the Basic
Maintenance Amount.

"Basic Maintenance Report" or "Report" means,
with respect to the Series E Preferred Shares, a report
prepared by the Administrator which sets forth, as of the
related Monthly Valuation Date, (i) Moody's Eligible Assets
and S&P Eligible Assets sufficient to meet or exceed the
Basic Maintenance Amount, (ii) the Market Value and
Discounted Value thereof (seriatim and in the aggregate),
(iii) the Basic Maintenance Amount, and (iv) the net asset
value of the Fund.  Such report will also include (A) the
month-end closing price for the Common Shares of the Fund
(B) the monthly total-return for the Common Shares, which
will be determined based upon  month-end closing share
prices, assuming reinvestment of all dividends paid during
such month and (C) the total leverage position of the
Fund.  For the purposes of this Statement of Preferences,
"Basic Maintenance Report" or "Report" shall have a
correlative meaning with respect to any other class or
series of Preferred Shares.

"Beneficial Owner," with respect to the Series E
Preferred Shares, means a customer of a Broker-Dealer who
is listed on the records of that Broker-Dealer (or, if
applicable, the Auction Agent) as a holder of Series E
Preferred Shares.

"Bid" has the meaning set forth in paragraph
2(a) of Part II of this Statement of Preferences.

"Bidder" has the meaning set forth in paragraph
2(a) of Part II of this Statement of Preferences, provided
however that neither the Fund nor any Affiliate shall be
permitted to be Bidder in an Auction.

"Board of Trustees" or "Board" means the Board of
Trustees of the Fund or any duly authorized committee
thereof as permitted by applicable law.

"Broker-Dealer" means any broker-dealer or
broker-dealers, or other entity permitted by law to perform
the functions required of a Broker-Dealer by the Auction
Procedures, that has been selected by the Fund and has
entered into a Broker-Dealer Agreement that remains
effective.

"Broker-Dealer Agreement" means an agreement
between the Auction Agent and a Broker-Dealer, pursuant to
which such Broker-Dealer agrees to follow the Auction
Procedures.

"Business Day" means a day on which the New York
Stock Exchange is open for trading and which is not a
Saturday, Sunday or other day on which banks in The City of
New York, New York are authorized or obligated by law to
close.

"By-Laws" means the By-Laws of the Fund, as
amended from time to time.

"Commission" means the Securities and Exchange
Commission.

"Common Shares" means the common shares of
beneficial interest of the Fund, par value $0.001 per
share.

"Cure Date" has the meaning set forth in
paragraph 3(a)(ii) of Part I of this Statement of
Preferences.

"Date of Original Issue" means November 3, 2005,
and, for the purposes of this Statement of Preferences,
shall have a correlative meaning with respect to any other
class or series of Preferred Shares.

"Declaration" means the Amended and Restated
Agreement and Declaration of Trust of the Fund, dated
November 25, 2003, as amended and restated from time to
time (including by this Statement of Preferences or by way
of any other supplement or Statement of Preferences
authorizing or creating a class of shares of beneficial
interest in the Fund).

"Default" means a Dividend Default or a
Redemption Default.

"Default Period" means a Dividend Default or a
Redemption Default.

"Default Rate" has the meaning set forth in
paragraph 2(c)(ii) of Part I of this Statement of
Preferences.

"Deposit Assets" means cash, Short Term Money
Market Instruments and U.S. Government Obligations.  Except
for determining whether the Fund has Eligible Assets with
an Adjusted Value equal to or greater than the Basic
Maintenance Amount, each Deposit Asset shall be deemed to
have a value equal to its principal or face amount payable
at maturity plus any interest payable thereon after
delivery of such Deposit Asset but only if payable on or
prior to the applicable payment date in advance of which
the relevant deposit is made.

"Discount Factor" means (a) so long as Moody's is
rating the Series E Preferred Shares at the Fund's request,
the Moody's Discount Factor, (b) so long as S&P is rating
the Series E Preferred Shares at the Fund's request, the
S&P Discount Factor, and/or (c) any applicable discount
factor established by any Other Rating Agency, whichever is
applicable.

"Discounted Value" means, as applicable, (a) the
quotient of the Market Value of an Eligible Asset divided
by the applicable Discount Factor or (b) such other formula
for determining the discounted value of an Eligible Asset
as may be established by an applicable Rating Agency,
provided, in either case that with respect to an Eligible
Asset that is currently callable, Discounted Value will be
equal to the applicable quotient or product as calculated
above or the call price, whichever is lower, and that with
respect to an Eligible Asset that is prepayable, Discounted
Value will be equal to the applicable quotient or product
as calculated above or the par value, whichever is lower.

"Dividend Default" has the meaning set forth in
paragraph 2(c)(ii) of Part I of this Statement of
Preferences.

"Dividend Payment Date" means with respect to the
Series E Preferred Shares, any date on which dividends and
distributions and distributions declared by the Board of
Trustees thereon are payable pursuant to the provisions of
paragraph 2(b) of Part I of this Statement of Preferences
and shall for the purposes of this Statement of Preferences
have a correlative meaning with respect to any other class
or series of Preferred Shares.

"Dividend Period" means, with respect to Series E
Preferred Shares, the initial period determined in the
manner set forth under "Designation" above, and thereafter,
the period commencing on the Business Day following each
Auction Date and ending on the next Auction Date or, if
such next Auction Date is not immediately followed by a
Business Day, on the latest day prior to the next
succeeding Business Day, and shall, for the purposes of
this Statement of Preferences, have a correlative meaning
with respect to any other class or series of Preferred
Shares.

"Eligible Assets" means Moody's Eligible Assets
(if Moody's is then rating the Series E Preferred Shares at
the request of the Fund), S&P Eligible Assets (if S&P is
then rating the Series E Preferred Shares at the request of
the Fund), and/or Other Rating Agency Eligible Assets if
any Other Rating Agency is then rating the Series E
Preferred Shares or any other outstanding series of
Preferred Shares, whichever is applicable.

"Governing Documents" means the Declaration and
the By-Laws.

"Holder" means, with respect to the Preferred
Shares, including the Series E Preferred Shares, the
registered holder of such shares as the same appears on the
stock ledger or ownership records of the Fund or records of
the Auction Agent, as the case may be.

"Independent Accountant" means a nationally
recognized accountant, or firm of accountants, that is with
respect to the Fund an independent public accountant or
firm of independent public accountants under the 1933 Act.

"Industry Classification" means a six-digit
industry classification in the Standard Industry
Classification system published by the United States.

"LIBOR Dealers" means Citigroup Global Markets
Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated
and such other dealer or dealers as the Fund may from time
to time appoint, or, in lieu of any thereof, their
respective affiliates or successors.

"LIBOR Rate," on any Auction Date, means (i) the
rate for deposits in U.S. dollars for the designated
Dividend Period, which appears on display page 3750 of
Moneyline's Telerate Service ("Telerate Page 3750") (or
such other page as may replace that page on that service,
or such other service as may be selected by the LIBOR
Dealer or its successors that are LIBOR Dealers) as of
11:00 a.m., London time, on the day that is the London
Business Day preceding the Auction Date (the "LIBOR
Determination Date"), or (ii) if such rate does not appear
on Telerate Page 3750 or such other page as may replace
such Telerate Page 3750, (A) the LIBOR Dealer shall
determine the arithmetic mean of the offered quotations of
the Reference Banks to leading banks in the London
interbank market for deposits in U.S. dollars for the
designated Dividend Period in an amount determined by such
LIBOR Dealer by reference to requests for quotations as of
approximately 11:00 a.m. (London time) on such date made by
such LIBOR Dealer to the Reference Banks, (B) if at least
two of the Reference Banks provide such quotations, LIBOR
Rate shall equal such arithmetic mean of such quotations,
(C) if only one or none of the Reference Banks provide such
quotations, LIBOR Rate shall be deemed to be the arithmetic
mean of the offered quotations that leading banks in The
City of New York selected by the LIBOR Dealer (after
obtaining the Fund's approval) are quoting on the relevant
LIBOR Determination Date for deposits in U.S. dollars for
the designated Dividend Period in an amount determined by
the LIBOR Dealer (after obtaining the Fund's approval) that
is representative of a single transaction in such market at
such time by reference to the principal London offices of
leading banks in the London interbank market; provided,
however, that if one of the LIBOR Dealers does not quote a
rate required to determine the LIBOR Rate, the LIBOR Rate
will be determined on the basis of the quotation or
quotations furnished by any Substitute LIBOR Dealer or
Substitute LIBOR Dealers selected by the Fund to provide
such rate or rates not being supplied by the LIBOR Dealer;
provided further, that if the LIBOR Dealer and Substitute
LIBOR Dealers are required but unable to determine a rate
in accordance with at least one of the procedures provided
above, LIBOR Rate shall be LIBOR Rate as determined on the
previous Auction Date.  If the number of Dividend Period
days shall be (1) 7 or more but fewer than 21 days, such
rate shall be the seven day LIBOR rate; (2) more than 21
but fewer than 49 days, such rate shall be one month LIBOR
rate; (3) 49 or more but fewer than 77 days, such rate
shall be the two month LIBOR rate; (4) 77 or more but fewer
than 112 days, such rate shall be the three month LIBOR
rate; (5) 112 or more but fewer than 140 days, such rate
shall be the four month LIBOR rate; (6) 140 or more but
fewer than 168 days, such rate shall be the five month
LIBOR rate; (7) 168 or more but fewer than 189 days, such
rate shall be the six month LIBOR rate; (8) 189 or more but
fewer than 217 days, such rate shall be the seven month
LIBOR rate; (9) 217 or more but fewer than 252 days, such
rate shall be the eight month LIBOR rate; (10) 252 or more
but fewer than 287 days, such rate shall be the nine month
LIBOR rate; (11) 287 or more but fewer than 315 days, such
rate shall be the ten month LIBOR rate; (12) 315 or more
but fewer than 343 days, such rate shall be the eleven
month LIBOR rate; and (13) 343 or more but fewer than 365
days, such rate shall be the twelve month LIBOR rate.

"Liquidation Preference" shall, with respect to
each share of Series E Preferred Shares, have the meaning
set forth in paragraph 7(a) of Part I of this Statement of
Preferences and shall, for the purposes of this Statement
of Preferences, have a correlative meaning with respect to
any other class or series of Preferred Shares.

"London Business Day" means any day on which
commercial banks are generally open for business in London.

"Mandatory Redemption Date" has the meaning set
forth in paragraph 3(a)(iii) of Part I of this Statement of
Preferences.

"Market Value" means the amount determined by the
Fund with respect to specific Eligible Assets in accordance
with valuation policies adopted from time to time by the
Board of Trustees as being in compliance with the
requirements of the 1940 Act.

Notwithstanding the foregoing, "Market Value"
may, at the option of the Fund with respect to any of its
assets, mean the amount determined with respect to specific
Eligible Assets of the Fund in the manner set forth below:

(a)                                 as to
any common or preferred stock which is an Eligible Asset,
(i) if the stock is traded on a national securities
exchange or quoted on the Nasdaq System, the last sales
price reported on the Valuation Date, (ii) if there was no
such reported sales price, the price reported by a
recognized pricing service or (iii) if there was no such
pricing service report, the lower of two bid prices for
such stock provided to the Administrator by two recognized
securities dealers with minimum capitalizations of
$25,000,000 (or otherwise approved for such purposes by
Moody's and S&P), at least one of which shall be provided
in writing or by telecopy, telex, other electronic
transcription, computer obtained quotation reducible to
written form or similar means, and in turn provided to the
Fund by any such means by such Administrator, or, if two
bid prices cannot be obtained, such Eligible Asset shall
have a Market Value of zero;

(b)                                 as to
any U.S. Government Obligation, Short-Term Money Market
Instrument (other than demand deposits, federal funds,
bankers' acceptances and next Business Day repurchase
agreements) and commercial paper, with a maturity of
greater than 60 days, the product of (i) the principal
amount (accreted principal to the extent such instrument
accretes interest) of such instrument and (ii) the lower of
the bid prices for the same kind of instruments having, as
nearly as practicable, comparable interest rates and
maturities provided by two recognized securities dealers
having minimum capitalization of $25,000,000 (or otherwise
approved for such purpose by Moody's and S&P) to the
Administrator, at least one of which shall be provided in
writing or by telecopy, telex, other electronic
transcription, computer obtained quotation reducible to
written form or similar means, and in turn provided to the
Fund by any such means by such Administrator, or, if two
bid prices cannot be obtained, such Eligible Asset will
have a Market Value of zero;

(c)                                  as to
cash, demand or time deposits, federal funds, bankers'
acceptances and next Business Day repurchase agreements
included in Short-Term Money Market Instruments, the face
value thereof;

(d)                                 as to
any U.S. Government Obligation, Short-Term Money Market
Instrument or commercial paper with a maturity of 60 days
or fewer, amortized cost unless the Board of Trustees
determines that such value does not constitute fair value;
and

(e)                                  as to
any other evidence of indebtedness which is an Eligible
Asset, (i) the product of (A) the unpaid principal balance
of such indebtedness as of the Valuation Date and (B)(1) if
such indebtedness is traded on a national securities
exchange or quoted on the Nasdaq System, the last sales
price reported on the Valuation Date or (2) if there was no
reported sales price on the Valuation Date or if such
indebtedness is not traded on a national securities
exchange or quoted on the Nasdaq System, the lower of two
bid prices for such indebtedness provided by two recognized
dealers with a minimum capitalization of $25,000,000 (or
otherwise approved for such purpose by Moody's and S&P) to
the Administrator, at least one of which shall be provided
in writing or by telecopy, telex, other electronic
transcription, computer obtained quotation reducible to
written form or similar means, and in turn provided to the
Fund by any such means by such Administrator, plus
(ii) accrued interest on such indebtedness.

"Maximum Rate" means, on any day on which the
Applicable Rate is determined, the greater of (as set forth
in the table below) (i) the applicable percentage of the
Reference Rate or (ii) the applicable spread plus the
Reference Rate. The reference rate is the applicable LIBOR
Rate (for a dividend period or a special dividend period of
fewer than 364 days), or the applicable Treasury Index Rate
(for a special dividend period of 364 days or more). The
applicable percentage and applicable spread will be
determined based on the lower of the credit ratings
assigned to the Series E Preferred Shares by Moody's and
S&P. If Moody's and S&P or both do not make such ratings
available, the rate will be determined by reference to
equivalent ratings issued by a substitute rating agency.

Moody's          S&P Credit    Applicable   Applicable
Credit Rating      Rating      Percentage    Spread

Aaa                  AAA          150%        150 bps
Aa3 to Aa1        AA- to AA+      250%        250 bps
A3 to A1          A- to A+        350%        350 bps
Baa3 to Baa1     BBB+ or lower    550%        550 bps
Baa3 or lower    BBB+ or lower    550%        550 bps

"Monthly Valuation Date" means the last Valuation
Date of each calendar month.

"Moody's" means Moody's Investors Service, Inc.
and its successors at law.

"Moody's Discount Factor" means, with respect to
a Moody's Eligible Asset specified below, the following
applicable number:

Type of Moody's Eligible Asset*:                       Moody's
                                                   Discount Factor:

 U.S. Treasury Securities with final
maturities that are less than or equal to 60 days        1.00

Demand or time deposits, certificates of
deposit and bankers' acceptances
includible in Short Term Money Market Instruments        1.00

Commercial paper rated P-1 by Moody's
maturing in 30 days or less                              1.00

Commercial paper rated P-1 by Moody's
maturing in more than 30 days but in 270
days or less                                             1.15

Commercial paper rated A-1+ by S&P
maturing in 270 days or less                             1.25

Repurchase obligations includible in Short
Term Money Market Instruments if term is
less than 30 days and counterparty is
rated at least A2                                        1.00

Other repurchase obligations                   Discount Factor
                                                applicable to
                                               underlying assets
U.S. Common Stocks and Common Stocks of
foreign issuers for which ADR's are traded:

 Large Cap Stocks (Market Capitalization in
excess of $10 billion)                                2.00

Type of Moody's Eligible Asset*:                      Moody's
                                                     Discount
                                                      Factor:



Mid Cap Stocks (Market Capitalization in
between $2 billion and $10 billion)                    2.05

Small Cap Stocks (Market Capitalization
less than $2 billion)                                  2.20

l   Common Stocks of foreign issuers (in
existence for at least five years) for
which no ADR's are traded                              4.00

Convertible Preferred Stocks and
Convertible Corporate Debt Securities
having a delta range of:


8-.4 (investment grade)                              1.92
8-.4 (below investment grade)                        2.26
1-.8 (investment grade)                              1.95
1-.8 (below investment grade)                        2.29
Convertible Preferred Stocks and
Convertible Corporate Debt Securities
that are unrated                                     2.50

Preferred stocks:

Auction rate preferred stocks                      3.50
Other preferred stock rated:
Aaa                                              1.50
Aa                                               1.55
A                                                1.60
Baa                                              1.65
Ba                                               1.96
B                                                2.16
Less than B or not rated                         2.40
DRD preferred (investment grade)                 1.65
DRD Preferred (below investment grade)           2.16
U.S. Government Obligations (other than
U.S. Treasury Securities Strips set forth
below) with remaining terms to maturity of:

1 year or less                                   1.04
2 years or less                                  1.09
3 years or less                                  1.12
4 years or less                                  1.15
5 years or less                                  1.18
7 years or less                                  1.21
10 years or less                                 1.24
15 years or less                                 1.25
20 years or less                                 1.26
30 years or less                                 1.26

U.S. Treasury Securities Strips with
remaining terms to maturity of:

1 year or less                                  1.04
2 years or less                                 1.10
3 years or less                                 1.14
4 years or less                                 1.18
5 years or less                                 1.21
7 years or less                                 1.27
10 years or less                                1.34
15 years or less                                1.45
20 years or less                                1.54
30 years or less                                1.66

Corporate Debt:

Convertible corporate debt having a delta
range of .4-0, and non-convertible
corporate debt, rated at least Aa1 with
remaining terms to maturity of:

1 year or less                                 1.09
2 years or less                                1.15
3 years or less                                1.20
4 years or less                                1.26
5 years or less                                1.32
7 years or less                                1.39
10 years or less                               1.45
15 years or less                               1.50
20 years or less                               1.50
30 years or less                               1.50
Greater than 30 years                          1.65

Convertible corporate debt having a delta
range of .4-0, and non-convertible
corporate debt, rated at least Aa3 with
remaining terms to maturity of:

1 year or less                                1.12
2 years or less                               1.18
3 years or less                               1.23
4 years or less                               1.29
5 years or less                               1.35
7 years or less                               1.43
10 years or less                              1.50
15 years or less                              1.55
20 years or less                              1.55
30 years or less                              1.55
Greater than 30 years                         1.73

Convertible corporate debt having a delta
range of .4-0, and non-convertible
corporate debt, rated at least A3 with
remaining terms to maturity of:

1 year or less                               1.15
2 years or less                              1.22
3 years or less                              1.27
4 years or less                              1.33
5 years or less                              1.39
7 years or less                              1.47
10 years or less                             1.55
15 years or less                             1.60
20 years or less                             1.60
30 years or less                             1.60
Greater than 30 years                        1.81

Convertible corporate debt having a delta
range of .4-0, and Non-convertible
corporate debt, rated at least Baa3 with
remaining terms of maturity of:

1 year or less                                   1.18
2 years or less                                  1.25
3 years or less                                  1.31
4 years or less                                  1.38
5 years or less                                  1.44
7 years or less                                  1.52
10 years or less                                 1.60
15 years or less                                 1.65
20 years or less                                 1.65
30 years or less                                 1.65
Greater than 30 years                            1.89

Convertible corporate debt having a delta
range of .4-0, and Non-convertible
corporate debt, rated at least Ba3 with
remaining terms of maturity of:

1 year or less                               1.37
2 years or less                              1.46
3 years or less                              1.53
4 years or less                              1.61
5 years or less                              1.68
7 years or less                              1.79
10 years or less                             1.89
15 years or less                             1.96
20 years or less                             1.96
30 years or less                             1.96
Greater than 30 years                        2.05

Convertible corporate debt having a delta
range of .4-0, and non-convertible
corporate debt, rated at least B1 and B2
with remaining terms of maturity of:


1 year or less					1.50
2 years or less					1.60
3 years or less					1.68
4 years or less					1.76
5 years or less					1.85
7 years or less					1.97
10 years or less					2.08
15 years or less					2.16
20 years or less					2.28
30 years or less					2.29
Greater than 30 years				2.40


*              Discount Factors are for a seven-week
exposure period; the Discount Factor applicable to Rule
144A securities shall be increased by 20%. Unless
conclusions regarding liquidity risk and estimates of both
the probability and severity of default for the Trust's
assets can be derived from other sources, securities rated
below B by Moody's and unrated securities, which are
securities rated by neither Moody's, S&P nor Fitch, are
limited to 10% of Moody's Eligible Assets.  If a
convertible corporate debt security is unrated by Moody's,
S&P or Fitch, the Fund will use the percentage set forth
under "NR" in this table.  Ratings assigned by S&P or Fitch
are generally accepted by Moody's at face value.  However,
adjustments to face value may be made to particular
categories of credits for which the S&P and/or Fitch rating
does not seem to approximate a Moody's rating equivalent.
Securities with different ratings assigned by S&P and Fitch
will be accepted at the lower of the two ratings.

"Moody's Eligible Assets" means:

(a)           cash (including, for this
purpose, receivables for investments sold to a counterparty
whose senior debt securities are rated at least Baa3 by
Moody's or a counterparty approved by Moody's and payable
within five Business Days following such Valuation Date and
dividends and interest receivable within 49 days on
investments);

(b)           Short-Term Money Market
Instruments;

(c)           commercial paper that is not
includible as a Short-Term Money Market Instrument having
on the Valuation Date a rating from Moody's of at least P-1
and maturing within 270 days;

(d)           preferred stocks including
convertible preferred (i) which either (A) are issued by
issuers whose senior debt securities are rated at least
Baa1 by Moody's or (B) are rated at least Baa3 by Moody's
or (C) in the event an issuer's senior debt securities or
preferred stock is not rated by Moody's, which either (1)
are issued by an issuer whose senior debt securities are
rated at least A- by S&P or (2) are rated at least A- by
S&P and for this purpose have been assigned a Moody's
equivalent rating of at least Baa3, (ii) of issuers which
have (or, in the case of issuers which are special purpose
corporations, whose parent companies have) common stock
listed on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market System, (iii) which
have a minimum issue size (when taken together with other
of the issuer's issues of similar tenor) of $40,000,000,
(iv) which have paid cash dividends consistently during the
preceding three-year period (or, in the case of new issues
without a dividend history, are rated at least A1 by
Moody's or, if not rated by Moody's, are rated at least A+
by S&P), (v) which pay cumulative cash dividends in U.S.
dollars, (vi) which do not have warrants attached, (vii)
which are not issued by issuers in the transportation
industry and (viii) in the case of auction rate preferred
stocks, which are rated at least Aa3 by Moody's, or if not
rated by Moody's, AA- by S&P, AA- by Fitch or are otherwise
approved in writing by Moody's and have never had a failed
auction; provided, however, that for this purpose the
aggregate Market Value of the Fund's holdings of any single
issue of auction rate preferred stock shall not be more
than 1% of the Fund's total assets.

(e)           common stocks (i) (A) which
are traded on a nationally recognized stock exchange or in
the over-the-counter market, (B) if cash dividend paying,
pay cash dividends in U.S. dollars and (C) which may be
sold without restriction by the Corporation; provided,
however, that (y) common stock which, while a Moody's
Eligible Asset owned by the Corporation, ceases paying any
regular cash dividend will no longer be considered a
Moody's Eligible Asset until 71 days after the date of the
announcement of such cessation, unless the issuer of the
common stock has senior debt securities rated at least A3
by Moody's and (z) the aggregate Market Value of the
Corporation's holdings of the common stock of any issuer in
excess of 4% in the case of utility common stock and 6% in
the case of non-utility common stock of the aggregate
Market Value of the Corporation's holdings shall not be
Moody's Eligible Assets, (ii) which are securities
denominated in any currency other than the U.S. dollar or
securities of issuers formed under the laws of
jurisdictions other than the United States, its states and
the District of Columbia for which there are ADRs or their
equivalents which are traded in the United States on
exchanges or over-the-counter and are issued by banks
formed under the laws of the United States, its states or
the District of Columbia or (iii) which are securities of
issuers formed under the laws of jurisdictions other than
the United States (and in existence for at least five
years) for which no ADRs are traded; provided, however,
that the aggregate Market Value of the Corporation's
holdings of securities denominated in currencies other than
the U.S. dollar and ADRs in excess of (A) 6% of the
aggregate Market Value of the Outstanding shares of common
stock of such issuer thereof or (B) in excess of 10% of the
Market Value of the Corporation's Moody's Eligible Assets
with respect to issuers formed under the laws of any single
such non-U.S. jurisdiction other than Australia, Belgium,
Canada, Denmark, Finland, France, Germany, Ireland, Italy,
Japan, Luxembourg, the Netherlands, New Zealand, Norway,
Portugal, Spain, Sweden, Switzerland and the United
Kingdom, shall not be a Moody's Eligible Asset;

(f)            ADR securities, based on the
following guidelines: (i) Sponsored ADR program or
(ii) Level II or Level III ADRs.  Private placement
Rule 144A ADRs are not eligible for collateral
consideration.  Global GDR programs will be evaluated on a
case by case basis;

(g)           U.S. Government Obligations;

(h)           corporate evidences of
indebtedness (i) which may be sold without restriction by
the Corporation which are rated at least B3 (Caa
subordinate) by Moody's (or, in the event the security is
not rated by Moody's, the security is rated at least B- by
S&P and which for this purpose is assigned a Moody's
equivalent rating of one full rating category lower), with
such rating confirmed on each Valuation Date, (ii) which
have a minimum issue size of at least (A) $100,000,000 if
rated at least Baa3 or (B) $50,000,000 if rated B or Ba3,
(iii) which are not convertible or exchangeable into equity
of the issuing corporation and have a maturity of not more
than 30 years and (iv) for which, if rated below Baa3 or
not rated, the aggregate Market Value of the Company's
holdings do not exceed 10% of the aggregate Market Value of
any individual issue of corporate evidences of indebtedness
calculated at the time of original issuance; and

(i)            convertible corporate
evidences of indebtedness (i) which are issued by issuers
whose senior debt securities are rated at least B2 by
Moody's (or, in the event an issuer's senior debt
securities are not rated by Moody's, which are issued by
issuers whose senior debt securities are rated at least B
by S&P and which for this purpose is assigned a Moody's
equivalent rating of one full rating category lower),
(ii) which are convertible into common stocks which are
traded on the New York Stock Exchange or the American Stock
Exchange or are quoted on the Nasdaq National Market System
and (iii) which, if cash dividend paying, pay cash
dividends in U.S. dollars; provided, however, that once
convertible corporate evidences of indebtedness have been
converted into common stock, the common stock issued upon
conversion must satisfy the criteria set forth in clause
(e) above and other relevant criteria set forth in this
definition in order to be a Moody's Eligible Asset;
provided, however, that the Corporation's investments in
auction rate preferred stocks described in clause (d) above
shall be included in Moody's Eligible Assets only to the
extent that the aggregate Market Value of such stocks does
not exceed 10% of the aggregate Market Value of all of the
Corporation's investments meeting the criteria set forth in
clauses (a) through (g) above less the aggregate Market
Value of those investments excluded from Moody's Eligible
Assets pursuant to the paragraph appearing after clause
(i) below; and

(j)            no assets which are subject
to any lien or irrevocably deposited by the Corporation for
the payment of amounts needed to meet the obligations
described in clauses (a)(i) through (a)(iv) of the
definition of "Basic Maintenance Amount" may be includible
in Moody's Eligible Assets.

Notwithstanding anything to the contrary in the
preceding clauses (a)-(j), the Corporation's investment in
preferred stock, common stock, corporate evidences of
indebtedness and convertible corporate evidences of
indebtedness shall not be treated as Moody's Eligible
Assets except to the extent they satisfy the following
diversification requirements (utilizing Moody's Industry
and Sub-industry Categories) with respect to the Market
Value of the Corporation's holdings:

Issuer:

Moody's Rating(1)(2)       Non-Utility             Utility
                            Maximum              Maximum Single
                         Single Issuer(3)(4)     Issuer(3)(4)

Aaa					100%				100%
 Aa					 20%				 20%
 A 					 10%				 10%
 CS/CB, Baa(5)			  6%				  6%
 Ba					  4%				  4%
 B1/B2				  3%				  3%
B3 or lower				  2%				  2%


Industry and State:

Moody's Rating(1)      Non-Utility     Utility Maximum    Utility Maximum
                        Maximum         Single Sub-        Single State(3)
                        Single         Industry(3)(6)
                      Industry(3)

Aaa				100%			 100%			 100%
 Aa				 60%			 60%			 20%
 A				 40%			  50%			10(7)%
 CS/CB, Baa(5)		 20%			 50%			 7(7)%
 Ba				 12%			 12%			 0%
 B1/B2			 8%			 8%			 0%
 B3 or lower		 5%			 5%			 0%


(1)                                 Unless conclusions
regarding liquidity risk as well as estimates of both
the probability and severity of default for the
Corporation's assets can be derived from other
sources, securities rated below B by Moody's and
unrated securities, which are securities rated by
neither Moody's, S&P nor Fitch, are limited to 10% of
Moody's Eligible Assets. If a corporate, municipal or
other debt security is unrated by Moody's, S&P or
Fitch, the Corporation will use the percentage set
forth under "B3 or lower" in this table. Ratings
assigned by S&P or Fitch are generally accepted by
Moody's at face value. However, adjustments to face
value may be made to particular categories of credits
for which the S&P and/or Fitch rating does not seem to
approximate a Moody's rating equivalent.

(2)                                 Corporate evidences of
indebtedness from issues ranging $50,000,000 to
$100,000,000 are limited to 20% of Moody's Eligible
Assets.

(3)                                 The referenced
percentages represent maximum cumulative totals only
for the related Moody's rating category and each lower
Moody's rating category.

(4)           Issuers subject to common ownership of 25% or
more are considered as one name.

(5)                                 CS/CB refers to common
stock and convertible corporate evidences of
indebtedness, which are diversified independently from
the rating level.

(6)                                 In the case of utility
common stock, utility preferred stock, utility
evidences of indebtedness and utility convertible
evidences of indebtedness, the definition of industry
refers to sub-industries (electric, water, hydro
power, gas, diversified).  Investments in other sub-
industries are eligible only to the extent that the
combined sum represents a percentage position of the
Moody's Eligible Assets less than or equal to the
percentage limits in the diversification tables above.

(7)                                 Such percentage shall
be 15% in the case of utilities regulated by
California, New York and Texas.

"Moody's Hedging Transactions" means for so long
as any Preferred Shares are rated by Moody's, the Fund may
buy or sell financial futures contracts, write, purchase or
sell call options on financial futures contracts or
purchase put options on financial futures contracts or
write call options on portfolio securities, swaps and
securities lending unless it receives written confirmation
from Moody's that engaging in such transactions would
impair the ratings then assigned to the Preferred Shares by
Moody's, (collectively "Moody's Hedging Transactions"),
subject to the following limitations:

(i)        Future and call options:
For purposes of the Preferred Shares Basic Maintenance
Amount, futures held by the Fund and call options sold
by the Fund shall not be included as Moody's Eligible
Assets. However, such assets shall be valued at Market
Value by subtracting the good faith margin and the
maximum daily trading variance as of a Valuation Date.
For call options purchased by the Fund, the Market
Value of the call option will be included as Moody's
Eligible Asset subject to a Moody's Discount Factor
mutually agreed to between the Fund and Moody's based
on the characteristics of the option contract such as
its maturity and the underlying security of the
contract.

(ii)       Securities lending: The
Fund may engage in securities lending in an amount not
to exceed 10% of the Fund's total gross assets
(provided term and conditions of the securities
lending program are disclosed in advance to Moody's,
if Moody's is rating the preferred shares). For
purposes of calculating the Preferred Shares Basic
Maintenance Amount, such securities lent shall be
included as Moody's Eligible Assets with the
appropriate Moody's Discount Factor applied to such
lent security. The obligation to return such
collateral shall not be included as an
obligation/liability for purposes of calculating the
Basic Maintenance Amount. However, the Fund may
reinvest cash collateral for securities lent in
conformity with its investment objectives and policies
and the provisions of these bylaws. In such event, to
the extent that securities lending collateral received
is invested by the Fund in assets that otherwise would
be Moody's Eligible Assets and the value of such
assets exceeds the amount of the Fund's Moody's
Eligible Assets by applying the applicable Moody's
Discount Factor to this amount and adding the product
to total Moody's Eligible Assets. Conversely, if the
value of assets in which securities lending collateral
has been invested is less then the amount of the
Fund's obligation to return the collateral on a
Valuation Date, such difference shall be included as
an obligation/liability of the Fund for purposes of
calculating the Basic Maintenance Amount. Collateral
received by the Fund in a securities lending
transaction and maintained by the Fund in the form
received shall not be included as a Moody's Eligible
Asset for purposes of calculating the Basic
Maintenance Amount.

(iii)      Swaps (including Total
Return Swaps and Interest Rate Swaps): Total Return
and Interest Rate Swaps are subject to the following
provisions:

(A)          Only the cumulative
unsettled profit and loss from a Total Return
Swap transaction will be calculated when
determining the Basic Maintenance Amount. If the
Fund has an outstanding gain from a swap
transaction on a Valuation Date, the gain will be
included as a Moody's Eligible Asset subject to
the Moody's Discount Factor on the counterparty
to the swap transaction. If the Fund has an
outstanding liability from a swap transaction on
a Valuation Date, the Fund will subtract the
outstanding liability from the total Moody's
Eligible Assets in calculating the Basic
Maintenance Amount.

In addition, for swaps other
than Total Return Swaps, the Market Value of the
position (positive or negative) will be included
as a Moody's Eligible Asset. The aggregate
notional value of all swaps will not exceed the
Liquidation Preference of the Outstanding
Preferred Shares. At the time a swap is executed,
the Fund will only enter into swap transactions
where the counterparty has at least a S&P or
Fitch rating of A- or Moody's long-term rating of
A3.

(B)          (1)           The
underlying securities subject to a Credit Default
Swap sold by the Fund will be subject to the
applicable Moody's Discount Factor for each
security subject to the swap;

(2)           If the Fund
purchases a Credit Default Swap and holds the
underlying security, the Market Value of the
Credit Default Swap and the underlying security
will be included as a Moody's Eligible Asset
subject to the Moody's Discount Factor assessed
based on the counterparty risk and the duration
of the swap agreement; and

If not otherwise provided for in (a)(i)-(iii) above,
derivative instruments shall be treated as follows: Any
derivative instruments will be valued pursuant to the
Fund's valuation procedures on a Valuation Date. The amount
of the net payment obligation and the cost of a closing
transaction, as appropriate, on any derivative instrument
on a Valuation Date will be counted as a liability for
purposes of determining the Basic Maintenance Amount (e.g.,
a written call option that is in the money for the holder).
Any derivative instrument with respect to which the Fund is
owed payment on the Valuation Date that is not based upon
an individual security or securities that are Moody's
Eligible Assets will have a mutually agreed upon valuation
by Moody's and the Fund for purposes of determining Moody's
Eligible Assets. Any derivative instrument with respect to
which the Fund is owed payment on the valuation date that
is based upon an individual security or securities that are
Moody's Eligible Assets (e.g., a purchased call option on a
bond that is in the money) will be valued as follows for
purposes of determining Moody's Eligible Assets: (A) For
such derivative instruments that are exchange traded, the
value of the in-the-money amount of the payment obligation
to the Fund will be reduced by applying the Moody's
Discount Factor (as it would apply to the underlying
security or securities) and then added to Moody's Eligible
Assets; and (B) for such derivative instruments that are
not exchange traded, the value of the in-the-money amount
of the payment obligation to the Fund will be (1) reduced
as described in (A) and (B) further reduced by applying to
the remaining amount the Moody's Discount Factor determined
by reference to the credit rating of the derivative
counterparty with the remaining amount after these
reductions then added to Moody's Eligible Assets.

For purposes of determining whether the Fund has Moody's
Eligible Assets with an aggregate Discounted Value that
equals or exceeds the Basic Maintenance Amount, the
Discounted Value of all Forward Commitments to which the
Fund is a party and of all securities deliverable to the
Fund pursuant to such Forward Commitments shall be zero.

"Moody's Hedging Transactions" means purchases or
sales of exchange-traded financial futures contracts based
on any index approved by Moody's or Treasury Bonds, and
purchases, writings or sales of exchange-traded put options
on such financial futures contracts, any index approved by
Moody's or Treasury Bonds, and purchases, writings or sales
of exchange-traded call options on such financial futures
contracts, any index approved by Moody's or Treasury Bonds,
subject to the following limitations:

(a)           the Fund will not engage in
any Moody's Hedging Transaction based on any index approved
by Moody's (other than Closing Transactions) that would
cause the Fund at the time of such transaction to own or
have sold:

(i)        outstanding financial
futures contracts based on such index exceeding in
number 10% of the average number of daily traded
financial futures contracts based on such index in the
30 days preceding the time of effecting such
transaction as reported by The Wall Street Journal; or

(ii)       outstanding financial
futures contracts based on any index approved by
Moody's having a Market Value exceeding 50% of the
Market Value of all portfolio securities of the Fund
constituting Moody's Eligible Assets owned by the
Fund;

(b)           The Fund will not engage in
any Moody's Hedging Transaction based on Treasury Bonds
(other than Closing Transactions) that would cause the Fund
at the time of such transaction to own or have sold:

(i)        outstanding financial
futures contracts based on Treasury Bonds with such
contracts having an aggregate Market Value exceeding
20% of the aggregate Market Value of Moody's Eligible
Assets owned by the Fund and rated Aa by Moody's (or,
if not rated by Moody's but rated by S&P, rated AAA by
S&P); or

(ii)       outstanding financial
futures contracts based on Treasury Bonds with such
contracts having an aggregate Market Value exceeding
50% of the aggregate Market Value of all portfolio
securities of the Fund constituting Moody's Eligible
Assets owned by the Fund (other than Moody's Eligible
Assets already subject to a Moody's Hedging
Transaction) and rated Baa or A by Moody's (or, if not
rated by Moody's but rated by S&P, rated A or AA by S&P);

(c)           The Fund will engage in
Closing Transactions to close out any outstanding financial
futures contract based on any index approved by Moody's if
the amount of open interest in such index as reported by
The Wall Street Journal is less than an amount to be
mutually determined by Moody's and the Fund;

(d)           The Fund will engage in a
Closing Transaction to close out any outstanding financial
futures contract by no later than the fifth Business Day of
the month in which such contract expires and will engage in
a Closing Transaction to close out any outstanding option
on a financial futures contract by no later than the first
Business Day of the month in which such option expires;

(e)           The Fund will engage in
Moody's Hedging Transactions only with respect to financial
futures contracts or options thereon having the next
settlement date or the settlement date immediately thereafter;

(f)            The Fund (i) will not engage
in options and futures transactions for leveraging or
speculative purposes, except that an option or futures
transaction shall not for these purposes be considered a
leveraged position or speculative and (ii) will not write
any call options or sell any financial futures contracts
for the purpose of hedging the anticipated purchase of an
asset prior to completion of such purchase; and

(g)           The Fund will not enter into
an option or futures transaction unless, after giving
effect thereto, the Fund would continue to have Moody's
Eligible Assets with an aggregate Discounted Value equal to
or greater than the Basic Maintenance Amount.

"Moody's Industry Classifications" means, for the
purposes of determining Moody's Eligible Assets, each of
the following industry classifications (or such other
classifications as Moody's may from time to time approve
for application to the Series E Preferred Shares).

1.                                      Aerospace and
Defense: Major Contractor, Subsystems, Research,
Aircraft Manufacturing, Arms, Ammunition.

2.                                      Automobile:
Automobile Equipment, Auto-Manufacturing, Auto
Parts Manufacturing, Personal Use Trailers, Motor
Homes, Dealers.

3.                                      Banking: Bank
Holding, Savings and Loans, Consumer Credit,
Small Loan, Agency, Factoring, Receivables.

4.                                      Beverage, Food
and Tobacco: Beer and Ale, Distillers, Wines and
Liquors, Distributors, Soft Drink Syrup,
Bottlers, Bakery, Mill Sugar, Canned Foods, Corn
Refiners, Dairy Products, Meat Products, Poultry
Products, Snacks, Packaged Foods, Distributors,
Candy, Gum, Seafood, Frozen Food, Cigarettes,
Cigars, Leaf/Snuff, Vegetable Oil.

5.                                      Buildings and
Real Estate: Brick, Cement, Climate Controls,
Contracting, Engineering, Construction, Hardware,
Forest Products (building-related only),
Plumbing, Roofing, Wallboard, Real Estate, Real
Estate Development, REITs, Land Development.

6.                                      Chemicals,
Plastics and Rubber: Chemicals (non-
agricultural), Industrial Gases, Sulphur,
Plastics, Plastic Products, Abrasives, Coatings,
Paints, Varnish, Fabricating Containers.

7.                                      Packaging and
Glass: Glass, Fiberglass, Containers made of:
Glass, Metal, Paper, Plastic, Wood or Fiberglass.

8.                                      Personal and
Non-Durable Consumer Products (Manufacturing
Only): Soaps, Perfumes, Cosmetics, Toiletries,
Cleaning Supplies, School Supplies.

9.
Diversified/Conglomerate Manufacturing.

10.
Diversified/Conglomerate Service.

11.                               Diversified Natural
Resources, Precious Metals and Minerals:
Fabricating, Distribution.

12.                               Ecological:
Pollution Control, Waste Removal, Waste Treatment
and Waste Disposal.

13.                               Electronics:
Computer Hardware, Electric Equipment,
Components, Controllers, Motors, Household
Appliances, Information Service Communication
Systems, Radios, TVs, Tape Machines, Speakers,
Printers, Drivers, Technology.

14.                               Finance: Investment
Brokerage, Leasing, Syndication, Securities.

15.                               Farming and
Agriculture: Livestock, Grains, Produce,
Agriculture Chemicals, Agricultural Equipment,
Fertilizers.

16.                               Grocery: Grocery
Stores, Convenience Food Stores.

17.                               Healthcare,
Education and Childcare: Ethical Drugs,
Proprietary Drugs, Research, Health Care Centers,
Nursing Homes, HMOs, Hospitals, Hospital
Supplies, Medical Equipment.

18.                               Home and Office
Furnishings, Housewares, and Durable Consumer
Products: Carpets, Floor Coverings, Furniture,
Cooking, Ranges.

19.                               Hotels, Motels, Inns
and Gaming.

20.                               Insurance: Life,
Property and Casualty, Broker, Agent, Surety.

21.                               Leisure, Amusement,
Motion Pictures, Entertainment: Boating, Bowling,
Billiards, Musical Instruments, Fishing, Photo
Equipment, Records, Tapes, Sports, Outdoor
Equipment (Camping), Tourism, Resorts, Games, Toy
Manufacturing, Motion Picture Production
Theaters, Motion Picture Distribution.

22.                               Machinery (Non-
Agricultural, Non-Construction, Non-Electronic):
Industrial, Machine Tools, Steam Generators.

23.                               Mining, Steel, Iron
and Non-Precious Metals: Coal, Copper, Lead,
Uranium, Zinc, Aluminum, Stainless Steel,
Integrated Steel, Ore Production, Refractories,
Steel Mill Machinery, Mini-Mills, Fabricating,
Distribution and Sales of the foregoing.

24.                               Oil and Gas: Crude
Producer, Retailer, Well Supply, Service and
Drilling.

25.                               Printing,
Publishing, and Broadcasting: Graphic Arts,
Paper, Paper Products, Business Forms, Magazines,
Books, Periodicals, Newspapers, Textbooks, Radio,
T.V., Cable Broadcasting Equipment.

26.                               Cargo Transport:
Rail, Shipping, Railroads, Rail-car Builders,
Ship Builders, Containers, Container Builders,
Parts, Overnight Mail, Trucking, Truck
Manufacturing, Trailer Manufacturing, Air Cargo,
Transport.

27.                               Retail Stores:
Apparel, Toy, Variety, Drugs, Department, Mail
Order Catalog, Showroom.

28.                               Telecommunications:
Local, Long Distance, Independent, Telephone,
Telegraph, Satellite, Equipment, Research,
Cellular.

29.                               Textiles and
Leather: Producer, Synthetic Fiber, Apparel
Manufacturer, Leather Shoes.

30.                               Personal
Transportation: Air, Bus, Rail, Car Rental.

31.                               Utilities: Electric,
Water, Hydro Power, Gas.

32.                               Diversified
Sovereigns: Semi-sovereigns, Canadian Provinces,
Supra-national Agencies.

The Fund will use SIC codes in determining which
industry classification is applicable to a particular
investment in consultation with the Independent Accountant
and Moody's, to the extent the Fund considers necessary.

"1933 Act" means the Securities Act of 1933, as
amended, or any successor statute.

"1940 Act" means the Investment Company Act of
1940, as amended, or any successor statute.

"Non-Call Period" means a period determined by
the Board of Trustees after consultation with the Broker-
Dealers, during which the Series E Preferred Shares subject
to such period is not subject to redemption at the option
of the Fund but only to mandatory redemption.

"Notice of Redemption" means any notice with
respect to the redemption of Series E Preferred Shares
pursuant to paragraph 3 of Part I of this Statement of
Preferences.

"Other Rating Agency" means any rating agency
other than Moody's or S&P then providing a rating for the
Series E Preferred Shares at the request of the Fund.

"Other Rating Agency Eligible Assets" means
assets of the Fund designated by any Other Rating Agency as
eligible for inclusion in calculating the discounted value
of the Trust's assets in connection with such Other Rating
Agency's rating of the Series E Preferred Shares.

"Outstanding" means, as of any date, Preferred
Shares theretofore issued by the Fund except:

(a)           any such Preferred Share
theretofore cancelled by the Fund or delivered to the Fund
for cancellation;

(b)           any such Preferred Share other
than Preferred Shares as to which a notice of redemption
shall have been given and for whose payment at the
redemption thereof Deposit Assets in the necessary amount
are held by the Fund in trust for, or have been irrevocably
deposited with the relevant disbursing agent for payment
to, the holder of such share pursuant to the Statement of
Preferences with respect thereto;

(c)           in the case of Preferred
Shares, including the Series E Preferred Shares, any such
shares theretofore delivered to the applicable auction
agent for cancellation or with respect to which the Fund
has given notice of redemption and irrevocably deposited
with the applicable paying agent sufficient funds to redeem
such shares; and

(d)           any such Preferred Share in
exchange for or in lieu of which other shares have been
issued and delivered.

Notwithstanding the foregoing, (i) for purposes
of voting rights (including the determination of the number
of shares required to constitute a quorum), any Preferred
Shares as to which any subsidiary of the Fund is the holder
or Existing Holder, as applicable, will be disregarded and
deemed not Outstanding and (ii) in connection with any
auction, any Preferred Shares as to which any Person known
to the auction agent to be a subsidiary of the Fund is the
holder or Existing Holder, as applicable, will be
disregarded and not deemed Outstanding.

"Paying Agent" means The Bank of New York unless
and until another entity appointed by a resolution of the
Board of Trustees enters into an agreement with the Fund to
serve as paying agent, which paying agent may be the same
as the Auction Agent and, with respect to any other class
or series of Preferred Shares, the Person appointed by the
Fund as dividend disbursing or paying agent with respect to
such class or series.

"Person" means and includes an individual, a
partnership, the Fund, a trust, a corporation, a limited
liability company, an unincorporated association, a joint
venture or other entity or a government or any agency or
political subdivision thereof.

"Preferred Shares" means the preferred shares,
par value $0.001 per share, of the Fund, and includes the
Series E Preferred Shares.

"Premium Call Period" means a period consisting
of a number of whole years as determined by the Board of
Trustees after consultation with the Broker-Dealers, during
each year of which the shares subject to such Special
Dividend Period will be redeemable at the Fund's option at
a price per share equal to the Liquidation Preference plus
accumulated but unpaid dividends and distributions (whether
or not earned or declared) plus a premium expressed as a
percentage or percentages of the Liquidation Preference or
 expressed as a formula using specified variables as
determined by the Board of Trustees after consultation with
the Broker-Dealers.

"Pricing Service" means any of the following:
Bloomberg Financial Service, Bridge Information Services,
Data Resources Inc., FT Interactive, International
Securities Market Association, Merrill Lynch Securities
Pricing Service, Muller Data Corp., Reuters, S&P/J.J.
Kenny, Telerate, Trepp Pricing and Wood Gundy.

"Quarterly Valuation Date" means the last
Business Day of each March, June, September and December of
each year.

"Rating Agency" means Moody's and S&P as long as
such rating agency is then rating the Series E Preferred
Shares at the Fund's request or any other rating agency
then rating the Series E Preferred Shares at the Fund's
request.

"Redemption Date" has the meaning set forth in
paragraph 3(e) of Part I of this Statement of Preferences.

"Redemption Default" has the meaning set forth in
paragraph 3(e) of Part I of this Statement of Preferences.

"Redemption Price" shall mean, (a) with respect
to a Dividend Period that is not a Premium Call Period, the
Liquidation Preference plus an amount equal to accumulated
but unpaid dividends and distributions thereon (whether or
not earned or declared) to the Redemption Date, or,
(b) with respect to a Dividend Period that is a Premium
Call Period, the Liquidation Preference plus an amount
equal to accumulated but unpaid dividends and distributions
thereon (whether or not earned or declared) to the
Redemption Date plus a redemption premium, if any,
determined by the Board of Trustees after consultation with
the Broker-Dealers and set forth in the notice describing
any applicable Specific Redemption Provisions.  For the
purposes of this Statement of Preferences, "Redemption
Price" shall have a correlative meaning with respect to any
other class or series of Preferred Shares.

"Reference Banks" means four major banks in the
London interbank market selected by Citigroup Global
Markets Inc. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or its affiliates or successors or such other
party as the Fund may from time to time appoint.

"Reference Rate" means, with respect to the
determination of the Default Rate, the applicable LIBOR
Rate for a Dividend Period of 364 days or fewer or the
applicable Treasury Index Rate for a Dividend Period of
longer than 364 days and, with respect to the determination
of the Maximum Rate, the LIBOR Rate or the Treasury Index
Rate, as appropriate.

"Registrar" means The Bank of New York, unless
and until another entity appointed by a resolution of the
Board of Trustees enters into an agreement with the Fund to
serve as registrar.

"S&P" means Standard & Poor's Ratings Services,
or its successors at law.

"S&P Discount Factor" means, with respect to a
S&P Eligible Asset specified below, the following
applicable number:

Asset Class Obligor                                Overcollateralization
(Collateral)                                          Factors (1)

Public Equity Small-Cap						217.4%
Public Equity Mid-Cap						 186.6%
Public Equity Large-Cap 					167.6%
Convertible Equity Securities 				150.9%
Fixed Rate Preferred Stock 					245.00%
Adjustable Rate Preferred Stock 				216.75%
Taxable Preferred Stock (non-DRD)				 164.00%
DRD Eligible Preferred Stock with a
senior or preferred stock rating of at least BBB	245%
REIT and Non DRD Eligible Preferred
Stock with a senior or preferred stock
rating of at least BBB						164%
DRD Eligible Preferred Stock with a
senior or preferred stock rating below BBB		250%
REIT and non DRD Eligible Preferred
Stock with a senior or preferred stock
rating below BBB							169%
Un rated DRD Eligible Preferred Stock			255%
Un rated Non DRD Eligible and un rated
REIT Preferred Stock						174%
Convertible bonds rated AAA					150.90%
Convertible bonds rated AA					157.58%
Convertible bonds rated A					164.25%
Convertible bonds rated BBB					170.92%
Convertible bonds rated BB 					177.60%
Convertible bonds rated B					184.27%
Convertible bonds rated CCC					190.94%
U.S. Short Term Money Market
Investments with maturities of 180
days or less							104%
U.S. Short Term Money Market
Investments with maturities of between
181 and 360 days							113%
U.S. Government Obligations (52 week
Treasury Bills)							102.23%
U.S. Government Obligations (Two Year
Treasury Notes)							104.23%
U.S. Government Obligations (Five Year
Treasury Notes)							110.27%
U.S. Government Obligations (Ten Year
Treasury Notes)							117.23%
U.S. Government Obligations (Thirty
Year Treasury Bonds)130.38%
Agency Mortgage Collateral (Fixed 15 Year)		132%
Agency Mortgage Collateral (Fixed 30 Year)		135%
Agency Mortgage Collateral (ARM 1/1)			124%
Agency Mortgage Collateral (ARM 3/1)			125%
Agency Mortgage Collateral (ARM 5/1)			125%
Agency Mortgage Collateral (ARM 10/1)			125%
Mortgage Pass Through Fixed (15 Year)			134%
Mortgage Pass Through Fixed (30 Year)			137%
Corporate Bonds rated at least AAA				110%
Corporate Bonds rated at least AA+				111%
Corporate Bonds rated at least AA				113%
Corporate Bonds rated at least AA				115%
Corporate Bonds rated at least A+				116%
Corporate Bonds rated at least A				117%
Corporate Bonds rated at least A				118%
Corporate Bonds rated at least BBB+				120%
Corporate Bonds rated at least BBB				122%
Corporate Bonds rated at least BBB				124%
Corporate Bonds rated at least BB+				129%
Corporate Bonds rated at least BB				135%
Corporate Bonds rated at least BB				142%
Corporate Bonds rated at least B+				156%
Corporate Bonds rated at least B				169%
Corporate Bonds rated at least B				184%
Corporate Bonds rated at least CCC+				202%
Corporate Bonds rated at least CCC				252%
Corporate Bonds rated at least CCC				350%
Master Limited Partnerships					625%
Cash and Other Deposit Securities with
Maturities of 30 days or less					100%

(1)           For an S&P rating of AAA.

"S&P Eligible Assets" means:

(a)           Deposit Assets; and

(b)           common stocks that satisfy all of the
following conditions:

(i)            such common stock (including the
common stock of any predecessor or constituent issuer)
has been traded on a recognized national securities
exchange or quoted on the National Market System (or
any equivalent or successor thereto) of Nasdaq for at
least 450 days,

(ii)          the Market Capitalization of such
issuer of common stock exceeds $100 million,

(iii)          the issuer of such common stock is
not an entity that is treated as a partnership for
federal income tax purposes,

(iv)          if such issuer is organized under
the laws of any jurisdiction other than the United
States, any state thereof, any possession or territory
thereof or the District of Columbia, the common stock
of such issuer held by the Corporation is traded on a
recognized national securities exchange or quoted on
the National Market System of Nasdaq either directly
or in the form of depository receipts and

(v)           if such issuer is registered as an
investment company under the 1940 Act, such issuer
does not invest more than 25% of the value of its
gross assets in securities that are not S&P Eligible
Assets by reason of clause (iv) above;

provided, however, that the Corporation's holdings of the
common stock of any single issuer that satisfies the
conditions set forth in clauses (i) through (v) above shall
be included in S&P Eligible Assets only to the extent that:

(1)          such holdings may be sold publicly by the
Corporation at any time without registration,

(2)          to the extent remaining eligible after
the operation of item (1) above, such holdings do not
exceed a number of shares representing the average
weekly trading volume of such common stock during the
preceding 30 day period, and

(3)          to the extent remaining eligible after
the operation of items (1) and (2) above, the
aggregate Market Value of such holdings, when added to
the aggregate Market Value of the Corporation's
holdings of all other similarly eligible shares of
common stock of issuers in the same Industry
Classification, does not exceed 10% of the aggregate
Market Value of the Corporation's S&P Eligible Assets.

(c)           Preferred Stocks and convertible equity
securities that satisfy all of the following conditions:

l.             The issuer has a senior rating from
Standard & Poor's, or the issue must be rated. In the
case of Yankee preferred stock, the issuer should have
a Standard & Poor's senior rating of at least 'BBB',
or the issue must be rated at least 'BBB'.

2.            The issuer-or if the issuer is a
special-purpose corporation, its parent-is listed on
either the New York Stock Exchange, the American Stock
Exchange or NASDAQ if the traded par amount is less
than $1,000. If the traded par amount is $1,000 or
more exchange listing is not required.

3.            The collateral pays cash dividends
denominated in U.S. dollars.

4.            Private placement 144A with registration
rights are eligible assets.

5.            The minimum market capitalization of
eligible issuers is US$100 million.

Restrictions for floating-rate preferred stock

1.            Holdings must be limited to stock with a
dividend period of less than or equal to 49 days,
except for a new issue, where the first dividend
period may be up to 64 days.

2.            The floating-rate preferred stock may
not have been subject to a failed auction.

RESTRICTIONS FOR ADJUSTABLE-OR AUCTION-RATE PREFERRED
STOCK

l.             The total fair market value of
adjustable-rate preferred stock held in the portfolio
may not exceed 10% of eligible assets.

Concentration Limits:

1.            Total issuer exposure in preferred stock
or convertible equity securities of any one issuer is
limited to 10% of the fair market value of eligible
assets.

2.            Preferred stock or convertible equity
securities rated below B- (including non-rated
preferred stock or convertible equity securities) are
limited to no more than 15% of the fair market value
of the eligible assets.

3.            Add 5 points to overcollateralization
level for issuers with a senior rating or preferred
stock or convertible equity securities rating of less
than BBB.

4.            Add 10 points to overcollateralization
level of issuers with no senior rating or preferred
stock or convertible equity securities rating, or
dividend history.

Note:

      Receivables due within five business days of a
valuation will be treated as cash and are valued at
100%.
      Receivables that are due in more than five
business days of a valuation date qualify as a
Standard & Poor's-eligible asset at a value no
greater than the settlement price discounted at the
applicable credit rating and/or exposure period
discount factor.

(d)           Convertible bonds that satisfy all of
the following conditions:

l.              All convertible bonds should be rated
at least 'CCC' by Standard & Poor's.

2.             The collateral ratings represent the
entire category including (+) or (-) modifiers, unless
otherwise noted.

3.             The collateral levels assume weekly
valuation at the lower of two National Association of
Securities Dealers' bids.

4.             All collateral rated below 'BBB' must
have a minimum market capitalization of $100 million.

Note:

      Receivables due within five business days of a
valuation will be treated as cash and are valued at
100%.

      Receivables that are due in more than five
business days of a valuation date qualify as a
Standard & Poor's-eligible asset at a value no
greater than the settlement price discounted at the
applicable credit rating and/or exposure period
discount factor.

(e)           Corporate bonds that satisfy all of the
following conditions:

The collateral ratings represent the entire rating
category including (+) or (-) modifiers, unless otherwise
noted.

1.            All corporate debt must provide for
periodic interest payments in cash over the life of
the security. The debt must not be convertible or
exchangeable into capital of the security's issuer at
any time (except 10% of the corporate bonds pool may
be subject to exchange or tender offer). In addition,
the securities must have a remaining term to maturity
of 30 years or less.

2.            The size of securities issued under
medium-term note programs will be the size of the
aggregate medium-term note program authorized by the
issuer and under which the particular security is
issued. The medium-term note must be part of a series
(that is, notes from a single issuer having the same
coupon and maturity) that exceeds $5 million.

3.            Medium-term Securities rated below 'BBB-
' by Standard & Poor's are limited to no more than 15%
of the aggregate market value of the portfolio. Non-
rated securities are limited to no more than 5% of the
portfolio.

4.            At least 80% of the high-yield fair
market value in the pool (collateral rated below 'BBB-
') must have a minimum original issue size of $100
million, and the other 20%, $50 million.

5.            Securities rated 'CCC' by Standard &
Poor's are limited to no more than 20% of the
aggregate market value of the portfolio. Securities
rated below 'CC' by Standard & Poor's are limited to
no more than 15% of the aggregate market value of the
portfolio. Non-rated securities are limited to no more
than 5% of the portfolio.

Notes

The percentages set forth in the diversification
guidelines are based on the corporate bond fair market
value and represent maximum cumulative totals for the
related rating category and each lower rating
category.
      Financial statements should be publicly
available for the debt issuers included in the pool.
Securities should be registered under the Securities
Act of 1933, as amended.

Yankee bonds (bonds issued by foreign governments or
provinces, supranational agencies, or by foreign
corporations, offered and sold in the U.S. and
denominated in U.S. dollars) will be subject to the
same assumptions and notes for corporate bonds, with
the following exceptions:
      Up to 50% in Sovereigns and Brady Bonds rated
'A' or better;
      Of the 50% allowed, 25% can be invested in
Sovereigns, Banks and Corporates rated 'BBB' or
better, and Of the 50% allowed, 10% can be invested
in securities rated below 'BBB'.
      Receivables due within five business days of a
valuation will be treated as cash and are valued at
100%.
      Receivables that are due in more than five
business days of a valuation date qualify as a
Standard & Poor's-eligible asset at a value no
greater than the settlement price discounted at the
applicable credit rating and/or exposure period
discount factor.

(f)            Agency Mortgage Collateral that satisfy
all of the following conditions:

1.            Certificates are guaranteed by GNMA for
the full and timely payment of principal and interest.
They also evidence fractional undivided interests in
pools of level-payment; fixed-, variable-, or
adjustable-rate; fully amortizing mortgage loans that
are secured by first liens on one- to four-family
residences.

2.            Certificates guaranteed by FNMA for the
full and timely payment of principal and interest.
They also evidence proportional undivided interests in
pools of level-payment; fixed-, variable-, or
adjustable-rate; fully amortizing mortgage loans that
are secured by first liens on one- to four-family
residences.

3.            Certificates guaranteed by FHLMC for the
timely payment of interest and ultimate payment of
principal. They also evidence proportional undivided
interests in pools of level-payment; fixed-, variable-
, or adjustable-rate; fully amortizing mortgage loans
secured by first liens on one- to four-family
residences. In the case of multifamily Plan B FHLMC
certificates, the pools contain fixed-rate, fully
amortizing mortgage loans secured by first liens on
properties containing five or more units and designed
primarily for residential use.

OVER COLLATERALIZATION LEVELS FOR PUERTO RICO
MORTGAGE-BACKED SECURITIES

l.             For GNMAs, current agency levels
increased by eight points. 2.For FNMAs and FHLMCs,
current agency levels apply.

Note:

      For GNMA certificates backed by pools of
graduated payment mortgages, levels are 20 points
higher.
      Qualifying "large pool" FNMA mortgage-backed
securities and FHLMC participation certificates are
acceptable as eligible collateral. The eligible
fixed-rate programs included FNMA MegaPools,
      FNMA Majors, FHLMC Multilender Swaps, and FHLMC
Giant certificates. Eligible adjustable-rate
mortgage (ARM) programs include nonconvertible FNMA
ARM MegaPools and FHLMC weighted average coupon ARM
certificates. Eligible FHLMC Giant programs exclude
interest-only and principal-only stripped
securities.
      FNMA certificates backed by multifamily ARMs
pegged to the llth District Cost of Funds Index are
acceptable as eligible collateral at five points
above the established levels.
      Multiclass REMICs issued by FNMA and FHLMC are
acceptable as eligible collateral at the collateral
levels established for CMOs.
      Receivables due within five business days of a
valuation will be treated as cash and are valued at
100%.
      Receivables that are due in more than five
business days of a valuation date qualify as a
Standard & Poor's-eligible asset at a value no
greater than the settlement price discounted at the
applicable credit rating and/or exposure period
discount factor.

Notwithstanding the foregoing, an asset will not be
considered an S&P Eligible Asset if it is held in a margin
account, is subject to any material lien, mortgage, pledge,
security interest or security agreement of any kind or has
been deposited irrevocably for the payment of dividends,
redemption payments or any other payment or obligation
under the Corporation's Articles Supplementary.

"S&P Hedging Transactions" has the meaning set
forth in paragraph 11(b)(i) of Part I of this Statement of
Preferences.

"Securities Depository" means The Depository
Trust Company and its successors and assigns or any
successor securities depository selected by the Fund that
agrees to follow the procedures required to be followed by
such securities depository in connection with the Series E
Preferred Shares.

"Series E Asset Coverage Cure Date" means, with
respect to the failure by the Fund to maintain Asset
Coverage (as required by paragraph 9(a)(i)(A) of Part I of
this Statement of Preferences) as of an applicable
Quarterly Valuation Date, 10 Business Days following such
Quarterly Valuation Date, and shall, for the purposes of
this Statement of Preferences, have a correlative meaning
with respect to any other class or series of Preferred
Shares.

"Series E Preferred Shares" means the Fund's
Series E Auction Rate Preferred Shares, par value $0.001
per share, liquidation preference $25,000 per share.

"Short-Term Money Market Instruments" means the
following types of instruments if, on the date of purchase
or other acquisition thereof by the Fund, the remaining
term to maturity thereof is not in excess of 180 days:

(i)            commercial paper rated
A-1 if such commercial paper matures in 30 days, or A-
1+ if such commercial paper matures in over 30 days;

(ii)           AAAm rated money market
funds;

(iii)          demand or time deposits
in, and banker's acceptances and certificates of
deposit of (A) a depository institution or trust
company incorporated under the laws of the United
States of America or any state thereof or the District
of Columbia (B) a United States branch office or
agency of a foreign depository institution (provided
that such branch office or agency is subject to
banking regulation under the laws of the United
States, any state thereof or the District of
Columbia), or (C) A-1+ rated institutions;

(iv)          overnight funds; and

(v)           U.S. Government
Obligations.

"Special Dividend Period" means a Dividend Period
that is not a Standard Dividend Period.

"Specific Redemption Provisions" means, with
respect to any Special Dividend Period of more than one
year, either, or any combination of (i) a Non-Call Period
and (ii) a Premium Call Period.

"Standard Dividend Period" means a Dividend
Period of seven days, subject to increase or decrease to
the extent necessary for the next Auction Date and Dividend
Payment Date to each be Business Days.

"Submission Deadline" means 1:30 p.m., New York
City time, on any Auction Date or such other time on any
Auction Date by which Broker-Dealers are required to submit
Orders to the Auction Agent as specified by the Auction
Agent from time to time.

"Transfer Agent" means The Bank of New York,
unless and until another entity appointed by a resolution
of the Board of Trustees enters into an agreement with the
Fund to serve as transfer agent.

"Treasury Index Rate" means the average yield to
maturity for actively traded marketable U.S. Treasury fixed
interest rate securities having the same number of 30-day
periods to maturity as the length of the applicable
Dividend Period, determined, to the extent necessary, by
linear interpolation based upon the yield for such
securities having the next shorter and next longer number
of 30-day periods to maturity treating all Dividend Periods
with a length greater than the longest maturity for such
securities as having a length equal to such longest
maturity, in all cases based upon data set forth in the
most recent weekly statistical release published by the
Board of Governors of the Federal Reserve System (currently
in H.15 (519)); provided, however, if the most recent such
statistical release shall not have been published during
the 15 days preceding the date of computation, the
foregoing computations shall be based upon the average of
comparable data as quoted to the Fund by at least three
recognized dealers in U.S. Government Obligations selected
by the Fund.

"Fund" means The Gabelli Dividend & Income Trust,
a Delaware statutory trust.

"U.S. Government Obligations" means direct
obligations of the United States or by its agencies or
instrumentalities that are entitled to the full faith and
credit of the United States and that, other than United
States Treasury Bills, provide for the periodic payment of
interest and the full payment of principal at maturity or
call for redemption.

"Valuation Date" means the last Business Day of
each month, or such other date as the Fund and Rating
Agencies may agree to for purposes of determining the Basic
Maintenance Amount.

"Voting Period" has the meaning set forth in
paragraph 6(b) of Part I of this Statement of Preferences.

14.          Interpretation.

References to sections, subsections, clauses,
sub-clauses, paragraphs and subparagraphs that do not
reference a specific Part of this Statement of Preferences
or another document shall refer to the Part of this
Statement of Preferences in which the reference occurs,
unless the context otherwise requires.

Part II: Auction Procedures

1.             Certain Definitions.  Unless the context or
use indicates another or different meaning or intent, each
of the following terms when used in this Statement of
Preferences shall have the meaning ascribed to it below,
whether such term is used in the singular or plural and
regardless of tense:

"Agent Member" means a member of or participant
in the Securities Depository that will act on behalf of a
Bidder.

"Available Preferred Shares" has the meaning set
forth in paragraph 4(a)(i) of Part II of this Statement of
Preferences.

"Bid" has the meaning set forth in paragraph
2(a)(ii) of Part II of this Statement of Preferences.

"Existing Holder" means (a) a Person who
beneficially owns those Preferred Shares, including
Series E Preferred Shares, listed in that Person's name in
the records of the Fund or Auction Agent, as the case may
be, or (b) the beneficial owner of those Series E Preferred
Shares which are listed under such person's Broker-Dealer's
name in the records of the Auction Agent, which Broker-
Dealer shall have signed a Master Purchaser's Letter.

"Hold Order" has the meaning set forth in
paragraph 2(a) of Part II of this Statement of Preferences.

"Master Purchaser's Letter" means the letter
which is required to be executed by each prospective
purchaser of Series E Preferred Shares or by the Broker-
Dealer through whom the shares will be held.

"Order" has the meaning set forth in paragraph
2(a) of Part II of this Statement of Preferences.

"Potential Holder" means (a) any Existing Holder
who may be interested in acquiring additional Series E
Preferred Shares or (b) any other Person who may be
interested in acquiring Series E Preferred Shares and who
has signed a Master Purchaser's Letter or whose shares will
be listed under such person's Broker-Dealer's name on the
records of the Auction Agent which Broker-Dealer shall have
executed a Master Purchaser's Letter.

"Sell Order" has the meaning set forth in
paragraph 2(a) of Part II of this Statement of Preferences.

"Submitted Bid" has the meaning set forth in
paragraph 4(a) of Part II of this Statement of Preferences.

"Submitted Hold Order" has the meaning set forth
in paragraph 4(a) of Part II of this Statement of
Preferences.

"Submitted Order" has the meaning set forth in
paragraph 4(a) of Part II of this Statement of Preferences.

"Submitted Sell Order" has the meaning set forth
in paragraph 4(a) of Part II of this Statement of
Preferences.

"Sufficient Clearing Bids" has the meaning set
forth in paragraph 4(a)(ii) of Part II of this Statement of
Preferences.

"Sufficient Clearing Orders" means that all
Series E Preferred Shares are the subject of Submitted Hold
Orders or that the number of Series E Preferred Shares that
are the subject of Submitted Bids by Potential Holders
specifying one or more rates equal to or less than the
Maximum Rate exceeds or equals the sum of (a) the number of
Series E Preferred Shares that are subject of Submitted
Bids by Existing Holders specifying one or more rates
higher than the Maximum Rate and (b) the number of Series E
Preferred Shares that are subject to Submitted Sell Orders.

"Winning Bid Rate" means the lowest rate
specified in the Submitted Bids which if:

(a)           (i)            each such
Submitted Bid of Existing Holders specifying such lowest
rate and

(ii)   all other such Submitted Bids
of Existing Holders specifying lower rates were
rejected, thus entitling such Existing Holders to
continue to hold the shares of such series that are
subject to such Submitted Bids; and

(b)           (i)            each such
Submitted Bid of Potential Holders specifying such lowest
rate and

(ii)   all other such Submitted Bids
of Potential Holders specifying lower rates were
accepted;

would result in such Existing Holders described in
subclause (a) above continuing to hold an aggregate number
of Outstanding Series E Preferred Shares which, when added
to the number of Outstanding Series E Preferred Shares to
be purchased by such Potential Holders described in
subclause (b) above, would equal not less than the
Available Preferred Shares.

2.             Orders.

(a)           On or prior to the Submission
Deadline on each Auction Date for Series E Preferred
Shares:

(i)    each Beneficial Owner of
Series E Preferred Shares may submit to its Broker-
Dealer by telephone or otherwise information as to:

(A)          the number of
Outstanding Series E Preferred Shares, if any,
held by such Beneficial Owner which such
Beneficial Owner desires to continue to hold
without regard to the Applicable Rate for the
next succeeding Dividend Period;

(B)          the number of
Outstanding Series E Preferred Shares, if any,
held by such Beneficial Owner which such
Beneficial Owner offers to purchase or hold if
the Applicable Rate for the next succeeding
Dividend Period shall be equal to or greater than
the rate per annum specified by such Beneficial
Owner and sell if the Applicable Rate for the
next succeeding Dividend Period shall be less
than the rate per annum specified by such
Beneficial Owner; and/or

(C)          the number of
Outstanding Series E Preferred Shares, if any,
held by such Beneficial Owner which such
Beneficial Owner offers to sell without regard to
the Applicable Rate for the next succeeding
Dividend Period; and

(ii)   each Broker-Dealer, using
lists of potential Beneficial Owners, shall in good
faith for the purpose of conducting a competitive
Auction in a commercially reasonable manner, contact
potential Beneficial Owners (by telephone or
otherwise), including Persons that are not Beneficial
Owners, on such lists to determine the number of
Series E Preferred Shares, if any, that each such
potential Beneficial Owner offers to purchase if the
Applicable Rate for the next succeeding Dividend
Period shall not be less than the rate per annum
specified by such potential Beneficial Owner.

For the purposes hereof, the communication by a Beneficial
Owner or potential Beneficial Owner to a Broker-Dealer, or
by a Broker-Dealer to the Auction Agent, of information
referred to in clauses (a)(i) or (a)(ii) of this paragraph
(2) is hereinafter referred to as an "Order" and
collectively as "Orders" and each Beneficial Owner and each
potential Beneficial Owner placing an Order with a Broker-
Dealer, and such Broker-Dealer placing an Order with the
Auction Agent, is hereinafter referred to as a "Bidder" and
collectively as "Bidders;" an Order containing the
information referred to in clause (a)(i)(A) of this
paragraph (2) is hereinafter referred to as a  d Order" and
collectively as "Hold Orders;" an Order containing the
information referred to in clauses (a)(i)(B) or (a)(ii) of
this paragraph (2) is hereinafter referred to as a "Bid"
and collectively as "Bids;" and an Order containing the
information referred to in clause (a)(i)(C) of this
paragraph (2) is hereinafter referred to as a "Sell Order"
and collectively as "Sell Orders."

(b)           (i)            A Bid by a
Beneficial Owner or an Existing Holder of Series E
Preferred Shares subject to an Auction on any Auction Date
shall constitute an irrevocable offer to sell:
(A)          the number of
Outstanding Series E Preferred Shares specified
in such Bid if the Applicable Rate determined on
such Auction Date shall be less than the rate
specified therein;

(B)          such number or a
lesser number of Outstanding Series E Preferred
Shares to be determined as set forth in paragraph
5(a)(iv) if the Applicable Rate for Series E
Preferred Shares determined on such Auction Date
shall be equal to the rate specified therein; or

(C)          the number of
Outstanding Series E Preferred Shares specified
in such Bid if the rate specified therein shall
be higher than the Maximum Rate, or such number
or a lesser number of Outstanding Series E
Preferred Shares to be determined as set forth in
paragraph 5(b)(iii) if the rate specified therein
shall be higher than the Maximum Rate and
Sufficient Clearing Bids do not exist.

(ii)           A Sell Order by a
Beneficial Owner or an Existing Holder of Series E
Preferred Shares subject to an Auction on any Auction
Date shall constitute an irrevocable offer to sell:

(A)          the number of
Outstanding Series E Preferred Shares specified
in such Sell Order; or

(B)          such number or a
lesser number of Outstanding Series E Preferred
Shares as set forth in paragraph 5(b)(iii) if
Sufficient Clearing Bids do not exist; provided,
however, that a Broker-Dealer that is an Existing
Holder with respect to Series E Preferred Shares
shall not be liable to any Person for failing to
sell such shares pursuant to a Sell Order
described in the proviso to paragraph 3(c) if
(1) such shares were transferred by the
Beneficial Owner thereof without compliance by
such Beneficial Owner or its transferee Broker-
Dealer (or other transferee Person, if permitted
by the Fund) with the provisions of paragraph 6
or (2) such Broker-Dealer has informed the
Auction Agent pursuant to the terms of its
Broker-Dealer Agreement that, according to such
Broker-Dealer's records, such Broker-Dealer
believes it is not the Existing Holder of such
shares.

(iii)          A Bid by a Potential
Holder of Series E Preferred Shares subject to an
Auction on any Auction Date shall constitute an
irrevocable offer to purchase:

(A)          the number of
Outstanding Series E Preferred Shares specified
in such Bid if the Applicable Rate determined on
such Auction Date shall be higher than the rate
specified therein; or

(B)          such number or a
lesser number of Outstanding Series E Preferred
Shares as set forth in paragraph 5(a)(v) if the
Applicable Rate determined on such Auction Date
shall be equal to the rate specified therein.

(c)           No Order for any number of
Series E Preferred Shares other than whole shares shall be
valid.

3.             Submission of Orders by Broker-
Dealers to Auction Agent.

(a)           Each Broker-Dealer shall
submit in writing to the Auction Agent prior to the
Submission Deadline on each Auction Date all Orders for
Series E Preferred Shares subject to an Auction on such
Auction Date obtained by such Broker-Dealer, designating
itself (unless otherwise permitted by the Fund) as an
Existing Holder in respect of shares subject to Orders
submitted or deemed submitted to it by Beneficial Owners
and as a Potential Holder in respect of shares subject to
Orders submitted to it by potential Beneficial Owners, and
shall specify with respect to each Order for such shares:

(i)        the name of the Bidder
placing such Order (which shall be the Broker-Dealer
unless otherwise permitted by the Fund);

(ii)       the aggregate number of
Series E Preferred Shares that are the subject of such
Order;

(iii)      to the extent that such
Bidder is an Existing Holder of Series E Preferred
Shares:

(A)          the number of
Series E Preferred Shares, if any, subject to any
Hold Order of such Existing Holder;

(B)          the number of
Series E Preferred Shares, if any, subject to any
Bid of such Existing Holder and the rate
specified in such Bid; and

(C)          the number of
Series E Preferred Shares, if any, subject to any
Sell Order of such Existing Holder; and

(iv)     to the extent such Bidder is
a Potential Holder of Series E Preferred Shares, the
rate and number of Series E Preferred Shares specified
in such Potential Holder's Bid.

(b)           If any rate specified in any
Bid contains more than three figures to the right of the
decimal point, the Auction Agent shall round such rate up
to the next highest one thousandth (.001) of 1%.

(c)           If an Order or Orders covering
all of the Outstanding Series E Preferred Shares held by
any Existing Holder is not submitted to the Auction Agent
prior to the Submission Deadline, the Auction Agent shall
deem a Hold Order to have been submitted by or on behalf of
such Existing Holder covering the number of Outstanding
Series E Preferred Shares held by such Existing Holder and
not subject to Orders submitted to the Auction Agent;
provided, however, that if an Order or Orders covering all
of the Outstanding Series E Preferred Shares held by any
Existing Holder is not submitted to the Auction Agent prior
to the Submission Deadline for an Auction relating to a
Special Dividend Period consisting of more than 28 calendar
days, the Auction Agent shall deem a Sell Order to have
been submitted by or on behalf of such Existing Holder
covering the number of Outstanding Series E Preferred
Shares held by such Existing Holder and not subject to
Orders submitted to the Auction Agent.

(d)           If one or more Orders of an
Existing Holder is submitted to the Auction Agent covering
in the aggregate more than the number of Outstanding
Series E Preferred Shares subject to an Auction held by
such Existing Holder, such Orders shall be considered valid
in the following order of priority:

(i)        all Hold Orders shall be
considered valid, but only up to and including in the
aggregate the number of Outstanding Series E Preferred
Shares held by such Existing Holder, and if the number
of shares subject to such Hold Orders exceeds the
number of Outstanding Series E Preferred Shares held
by such Existing Holder, the number of shares subject
to each such Hold Order shall be reduced pro rata to
cover the number of Outstanding Series E Preferred
Shares held by such Existing Holder;

(ii)       Any Bid for Series E
Preferred Shares shall be considered valid up to and
including the excess of the number of Outstanding
Series E Preferred Shares held by such Existing Holder
over the number of Series E Preferred Shares subject
to any Hold Orders referred to in clause (d)(i) above;

(A)          subject to subclause
(d)(ii)(A), if more than one Bid of an Existing
Holder for Series E Preferred Shares is submitted
to the Auction Agent with the same rate and the
number of Outstanding Series E Preferred Shares
subject to such Bids is greater than such excess,
such Bids shall be considered valid up to and
including the amount of such excess, and the
number of Series E Preferred  Stock subject to
each Bid with the same rate shall be reduced pro
rata to cover the number of shares equal to such
excess;

(B)          subject to subclauses
(d)(ii)(A) and (B), if more than one Bid of an
Existing Holder for Series E Preferred Shares is
submitted to the Auction Agent with different
rates, such Bids shall be considered valid in the
ascending order of their respective rates up to
and including the amount of such excess; and

(C)          in any such event,
the number, if any, of such Outstanding Series E
Preferred Shares subject to any portion of Bids
considered not valid in whole or in part under
this paragraph 3(d)(ii) shall be treated as the
subject of a Bid by or on behalf of a Potential
Holder at the rate specified therein; and

(iii)      all Sell Orders for
Series E Preferred Shares shall be considered valid up
to and including the excess of the number of
Outstanding Series E Preferred Shares held by such
Existing Holder over the sum of Outstanding Series E
Preferred Shares subject to valid Hold Orders referred
to in paragraph 3(d)(i) above and valid Bids referred
to in paragraph 3(d)(ii) above.

(e)           If more than one Bid for
Series E Preferred Shares is submitted to the Auction Agent
by or on behalf of any Potential Holder, each such Bid
submitted shall be a separate Bid with the rate and number
of shares therein specified.

(f)            Any Order submitted by a
Beneficial Owner or a potential Beneficial Owner to its
Broker-Dealer, or by a Broker-Dealer to the Auction Agent,
prior to the Submission Deadline on any Auction Date, shall
be irrevocable.

4.             Determination of Sufficient
Clearing Bids, Winning Bid Rate and
Applicable Rate.

(a)           Not earlier than the
Submission Deadline on each Auction Date for Series E
Preferred Shares, the Auction Agent shall assemble all
valid Orders submitted or deemed submitted to it by the
Broker-Dealers (each such Order as submitted or deemed
submitted by a Broker-Dealer being hereinafter referred to
individually as a "Submitted Hold Order," a "Submitted Bid"
or a "Submitted Sell Order," as the case may be, or as a
"Submitted Order" and collectively as "Submitted Hold
Orders," "Submitted Bids" or "Submitted Sell Orders," as
the case may be, or as "Submitted Orders") and shall
determine:

(i)        the excess of the number of
Outstanding Series E Preferred Shares over the number
of Outstanding Series E Preferred Shares subject to
Submitted Hold Orders (such excess being hereinafter
referred to as the "Available Preferred Shares");

(ii)       from the Submitted Orders
for Series E Preferred Shares whether:

(A)          the number of
Outstanding Series E Preferred Shares subject to
Submitted Bids of Potential Holders specifying
one or more rates equal to or lower than the
Maximum Rate exceeds or is equal to the sum of

(B)          the number of
Outstanding Series E Preferred Shares subject to
Submitted Bids of Existing Holders specifying one
or more rates higher than the Maximum Rate; and

(C)          the number of
Outstanding Series E Preferred Shares subject to
Submitted Sell Orders (in the event such excess
or such equality exists (other than because the
number of Series E Preferred Shares in clauses
(a)(ii)(A) and (B) above is zero because all of
the Outstanding Series E Preferred Shares are
subject to Submitted Hold Orders), such Submitted
Bids in clause (a)(ii)(A) above being hereinafter
referred to collectively as "Sufficient Clearing
Bids"); and

(iii)      if Sufficient Clearing Bids
exist, the Winning Bid Rate.

(b)           Not later than 9:30 A.M., New
York City time, on each Auction Date, the Auction Agent
shall advise the Fund of the Maximum Rate for the Series E
Preferred Shares for which an Auction is being held on the
Auction Date and, based on such determination, promptly
after the Auction Agent has made the determinations
pursuant to paragraph 4(a), the Auction Agent shall advise
the Fund of the Applicable Rate for the next succeeding
Dividend Period thereof as follows:

(i)        if Sufficient Clearing Bids
exist, that the Applicable Rate for the next
succeeding Dividend Period thereof shall be equal to
the Winning Bid Rate so determined;

(ii)       if Sufficient Clearing Bids
do not exist (other than because all of the
Outstanding shares of such series are subject to
Submitted Hold Orders), that the Applicable Rate for
the next succeeding Dividend Period thereof shall be
equal to the Maximum Rate; or

(iii)      if all of the Outstanding
Series E Preferred Shares are subject to Submitted
Hold Orders, that the Applicable Rate for the next
succeeding Dividend Period thereof shall be the All
Hold Rate.

5.             Acceptance and Rejection of
Submitted Bids and Submitted Sell Orders and
Allocation.

Existing Holders shall continue to hold the
Series E Preferred Shares that are subject to Submitted
Hold Orders, and, based on the determinations made pursuant
to paragraph 4(a), the Submitted Bids and Submitted Sell
Orders shall be accepted or rejected by the Auction Agent
and the Auction Agent shall take such other action as set
forth below:

(a)           a              If Sufficient
Clearing Bids for Series E Preferred Shares have been made,
all Submitted Sell Orders shall be accepted and, subject to
the provisions of paragraphs 5(d) and 5(e), Submitted Bids
shall be accepted or rejected as follows in the following
order of priority and all other Submitted Bids shall be
rejected:

(i)        Existing Holders' Submitted
Bids for Series E Preferred Shares specifying any rate
that is higher than the Winning Bid Rate shall be
accepted, thus requiring each such Existing Holder to
sell the Series E Preferred Shares subject to such
Submitted Bids;

(ii)       Existing Holders' Submitted
Bids for shares Series E Preferred Shares specifying
any rate that is lower than the Winning Bid Rate shall
be rejected, thus entitling each such Existing Holder
to continue to hold the Series E Preferred Shares
subject to such Submitted Bids;

(iii)      Potential Holders'
Submitted Bids for Series E Preferred Shares
specifying any rate that is lower than the Winning Bid
Rate shall be accepted;

(iv)     each Existing Holder's
Submitted Bid for Series E Preferred Shares specifying
a rate that is equal to the Winning Bid Rate shall be
rejected, thus entitling such Existing Holder to
continue to hold the Series E Preferred Shares subject
to such Submitted Bid, unless the number of
Outstanding Series E Preferred Shares subject to all
such Submitted Bids shall be greater than the number
of Series E Preferred Shares ("remaining shares") in
the excess of the Available Preferred Shares over the
number of Series E Preferred Shares subject to
Submitted Bids described in paragraphs 5(a)(ii) and
5(a)(iii), in which event such Submitted Bid of such
Existing Holder shall be rejected in part, and such
Existing Holder shall be entitled to continue to hold
Series E Preferred Shares subject to such Submitted
Bid, but only in an amount equal to the Series E
Preferred Shares obtained by multiplying the number of
remaining shares by a fraction, the numerator of which
shall be the number of Outstanding Series E Preferred
Shares held by such Existing Holder subject to such
Submitted Bid and the denominator of which shall be
the aggregate number of Outstanding Series E Preferred
Shares subject to such Submitted Bids made by all such
Existing Holders that specified a rate equal to the
Winning Bid Rate; and

(v)      each Potential Holder's
Submitted Bid for Series E Preferred Shares specifying
a rate that is equal to the Winning Bid Rate shall be
accepted but only in an amount equal to the number of
shares obtained by multiplying the number of Series E
Preferred Shares in the excess of the Available
Preferred Shares over the number of Series E Preferred
Shares subject to Submitted Bids described in
paragraph 5(a)(ii) through (iv) by a fraction, the
numerator of which shall be the number of Outstanding
Series E Preferred Shares subject to such Submitted
Bid and the denominator of which shall be the
aggregate number of Outstanding Series E Preferred
Shares subject to such Submitted Bids made by all such
Potential Holders that specified a rate equal to the
Winning Bid Rate.

(b)           If Sufficient Clearing Bids
for Series E Preferred Shares have not been made (other
than because all of the Outstanding shares are subject to
Submitted Hold Orders), subject to the provisions of
paragraph 5(d), Submitted Orders shall be accepted or
rejected as follows in the following order of priority and
all other Submitted Bids for Series E Preferred Shares
shall be rejected:

(i)        Existing Holders' Submitted
Bids for Series E Preferred Shares specifying any rate
that is equal to or lower than the Maximum Rate shall
be rejected, thus entitling such Existing Holders to
continue to hold the Series E Preferred Shares subject
to such Submitted Bids;

(ii)       Potential Holders'
Submitted Bids for Series E Preferred Shares
specifying any rate that is equal to or lower than the
Maximum Rate shall be accepted; and

(iii)      Each Existing Holder's
Submitted Bid for Series E Preferred Shares specifying
any rate that is higher than the Maximum Rate and the
Submitted Sell Orders of each Existing Holder shall be
accepted, thus entitling each Existing Holder that
submitted or on whose behalf was submitted any such
Submitted Bid or Submitted Sell Order to sell Series E
Preferred Shares subject to such Submitted Bid or
Submitted Sell Order, but in both cases only in an
amount equal to the number of Series E Preferred
Shares obtained by multiplying the number of Series E
Preferred Shares subject to Submitted Bids described
in paragraph 5(b)(ii) by a fraction, the numerator of
which shall be the number of Outstanding Series E
Preferred Shares held by such Existing Holder subject
to such Submitted Bid or Submitted Sell Order and the
denominator of which shall be the aggregate number of
Outstanding Series E Preferred Shares subject to all
such Submitted Bids and Submitted Sell Orders.

(c)           If all of the Outstanding
Series E Preferred Shares are subject to Submitted Hold
Orders, all Submitted Bids for such shares shall be
rejected.

(d)           If, as a result of the
procedures described in paragraph 5(a)(iv) or (v) or
paragraph 5(b)(iii), any Existing Holder would be entitled
or required to sell, or any Potential Holder would be
entitled or required to purchase, a fraction of a share of
Series E Preferred Shares on any Auction Date, the Auction
Agent shall, in such manner as it shall determine in its
sole discretion, round up or down the number of Series E
Preferred Shares to be purchased or sold by any Existing
Holder or Potential Holder on such Auction Date as a result
of such procedures so that the number of shares so
purchased or sold by each Existing Holder or Potential
Holder on such Auction Date shall be whole shares.

(e)           If, as a result of the
procedures described in paragraph 5(a)(v) any Potential
Holder would be entitled or required to purchase less than
a whole share of Series E Preferred Shares on any Auction
Date, the Auction Agent shall, in such manner as it shall
determine in its sole discretion, allocate Series E
Preferred Shares for purchase among Potential Holders so
that only whole shares are purchased on such Auction Date
as a result of such procedures by any Potential Holder,
even if such allocation results in one or more Potential
Holders not purchasing Series E Preferred Shares on such
Auction Date.

(f)            Based on the results of each
Auction for Series E Preferred Shares, the Auction Agent
shall determine the aggregate number of such shares to be
purchased and the aggregate number of such shares to be
sold by Potential Holders and Existing Holders and, with
respect to each Potential Holder and Existing Holder, to
the extent that such aggregate number of shares to be
purchased and such aggregate number of shares to be sold
differ, determine to which other Potential Holder(s) or
Existing Holder(s) they shall deliver, or from which other
Potential Holder(s) or Existing Holder(s) they shall
receive, as the case may be, Series E Preferred Shares.
Notwithstanding any provision of the Auction Procedures to
the contrary, in the event an Existing Holder or Beneficial
Owner of Series E Preferred Shares with respect to whom a
Broker-Dealer submitted a Bid to the Auction Agent for such
shares that was accepted in whole or in part, or submitted
or is deemed to have submitted a Sell Order for such shares
that was accepted in whole or in part, fails to instruct
its Agent Member to deliver such shares against payment
therefor, partial deliveries of Series E Preferred Shares
that have been made in respect of Potential Holders' or
Potential Beneficial Owners' Submitted Bids for Series E
Preferred Shares that have been accepted in whole or in
part shall constitute good delivery to such Potential
Holders and Potential Beneficial Owners.

(g)           Neither the Fund nor the
Auction Agent nor any affiliate of either shall have any
responsibility or liability with respect to the failure of
an Existing Holder, a Potential Holder, a Beneficial Owner,
a Potential Beneficial Owner or its respective Agent Member
to deliver Series E Preferred Shares or to pay for Series E
Preferred Shares sold or purchased pursuant to the Auction
Procedures or otherwise.

6.             Transfer of Series E Preferred
Shares.

Unless otherwise permitted by the Fund, a
Beneficial Owner or an Existing Holder may sell, transfer
or otherwise dispose of Series E Preferred Shares only in
whole shares and only pursuant to a Bid or Sell Order
placed with the Auction Agent in accordance with the
procedures described in this Part II or to a Broker-Dealer;
provided, however, that (a) a sale, transfer or other
disposition of Series E Preferred Shares from a customer of
a Broker-Dealer who is listed on the records of that
Broker-Dealer as the Holder of such shares to that Broker-
Dealer or another customer of that Broker-Dealer shall not
be deemed to be a sale, transfer or other disposition for
purposes of this paragraph 6 if such Broker-Dealer remains
the Existing Holder of the shares so sold, transferred or
disposed of immediately after such sale, transfer or
disposition and (b) in the case of all transfers other than
pursuant to Auctions, the Broker-Dealer (or other Person,
if permitted by the Fund) to whom such transfer is made
shall advise the Auction Agent of such transfer.

PART III

ABILITY OF THE BOARD OF TRUSTEES TO MODIFY THE STATEMENT OF
PREFERENCES

1.             Modification to Prevent Ratings
Reduction or Withdrawal.

The Board of Trustees, without further action by
the shareholders, may amend, alter, add to or repeal any
provision of this Statement of Preferences including
provisions that have been adopted by the Fund pursuant to
Rating Agency guidelines, if the Board of Trustees
determines that such amendments or modifications are
necessary to prevent a reduction in, or the withdrawal of,
a rating of the Preferred Shares and are in the aggregate
in the best interests of the Holders of the Preferred
Shares.

2.             Other Modification.

The Board of Trustees, without further action by
the shareholders, may amend, alter, add to or repeal any
provision of this Statement of Preferences including,
without limitation, provisions that have been adopted by
the Fund pursuant to any rating agency guidelines, if the
Board of Trustees determines that such amendments or
modifications will not in the aggregate adversely affect
the rights and preferences of any series of the Preferred
Shares, provided, that the Fund has received advice from
each applicable Rating Agency that such amendment or
modification is not expected to adversely affect such
Rating Agency's then current rating of such series of the
Fund's Preferred Shares.

Notwithstanding the provisions of the preceding
paragraph, to the extent permitted by law, the Board of
Trustees, without the vote of the Holders of the Series E
Preferred Shares or any other capital shares of the Fund,
may amend the provisions of this Statement of Preferences
to resolve any inconsistency or ambiguity or to remedy any
formal defect so long as the amendment does not in the
aggregate adversely affect the rights and preferences of
the Series E Preferred Shares.

3.             Notice.

In the event of any modification of this
Statement of Preferences pursuant to paragraph 2 of this
Part III, the Fund shall provide notice of such
modification to the Rating Agencies 30 days prior to the
date such modification takes effect.

IN WITNESS WHEREOF, The Gabelli Dividend & Income
Trust has caused these presents to be signed in its name
and on its behalf by a duly authorized officer, and its
corporate seal to be hereunto affixed and attested by its
Secretary, and the said officers of the Fund further
acknowledge said instrument to be the corporate act of the
Fund, and state that to the best of their knowledge,
information and belief under penalty of perjury the matters
and facts herein set forth with respect to approval are
true in all material respects, all as of November     , 2005.

By:
Name: Bruce N. Alpert
Title: President


Attest:
Name: James E. McKee
Title: Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77I NEW SECUR
<SEQUENCE>4
<FILENAME>gdivid77i.txt
<TEXT>
THE GABELLI DIVIDEND & INCOME TRUST (the "Trust")
EXHIBIT TO ITEM 77I

The Statement of Preferences of the 6.00% Series D Cumulative Preferred
Shares and Series E Auction Rate Preferred Shares of the Trust are
attached herewith as Exhibit 77(Q1).
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77Q1 OTHR EXHB
<SEQUENCE>5
<FILENAME>gdivid77q1.txt
<TEXT>

THE GABELLI DIVIDEND & INCOME TRUST (the "Trust")

EXHIBIT TO ITEM 77Q1

THE GABELLI DIVIDEND & INCOME FUND
FORM OF
STATEMENT OF PREFERENCES
OF
6.00% SERIES D CUMULATIVE PREFERRED SHARES

The Gabelli Dividend & Income Fund, a Delaware
statutory Fund (the "Fund"), hereby certifies that:

FIRST: The Board of Trustees of the Fund, at a meeting
duly convened and held on February 25, 2004, pursuant to
authority expressly vested in it by Article III of the
Agreement and Declaration of Fund, adopted resolutions
classifying unlimited amount of shares as authorized but
unissued preferred shares of the Fund, par value $0.001 per
share and at a meeting duly convened and held on May 18,
2005 authorized the designation and issuance of an
unlimited amount of 6.00% Series D Cumulative Preferred
Shares at such times and in such amounts as the Pricing
Committee should determine.

SECOND: The Pricing Committee, at a meeting duly
convened and held on October 28, 2005, pursuant to
authority granted it by the Board of Trustees of the Fund
at its August 9, 2005 meeting, approved the designation and
issuance by the Fund of up to 2,600,000 shares of     %
Series D Cumulative Preferred Shares.

THIRD:  The preferences, rights, voting powers,
restrictions, limitations as to dividends and
distributions, qualifications, and terms and conditions of
redemption of the 6.00% Series D Cumulative Preferred
Shares, par value $0.001 per share, as set by the Board of
Trustees are as follows:

DESIGNATION

Series D Preferred Shares:  A series of 2,600,000
preferred shares, par value $0.001 per share, liquidation
preference $25 per share, is hereby designated "Series D
Cumulative Preferred Shares" (the "Series D Preferred
Shares").  Each share of Series D Preferred Shares may be
issued on a date to be determined by the Board of Trustees
of the Fund; have an initial dividend rate stated as a rate
per annum, an initial Dividend Period and an initial
Dividend Payment Date as shall be determined in advance of
the issuance thereof by the Board of Trustees of the Fund;
and have such other preferences, rights, voting powers,
restrictions, limitations as to dividends and
distributions, qualifications and terms and conditions of
redemption, in addition to those required by applicable law
or set forth in the Governing Documents applicable to
Preferred Shares of the Fund, as are set forth in this
Statement of Preferences.  The Series D Preferred Shares
shall constitute a separate series of Preferred Shares.

PART I

DEFINITIONS

Unless the context or use indicates another or
different meaning or intent, each of the following terms
when used in this Statement of Preferences shall have the
meaning ascribed to it below, whether such term is used in
the singular or plural and regardless of tense:

"Accountant's Confirmation" means a letter from an
Independent Accountant delivered to Moody's with respect to
certain Basic Maintenance Reports substantially to the
effect that:

(a)           the Independent Accountant has read the
Basic Maintenance Report or Reports prepared by
the Administrator during the referenced calendar
year that are referred to in such letter;

(b)           with respect to the issue size
compliance, issuer diversification and industry
diversification calculations, such calculations
and the resulting Market Value of the Moody's
Eligible Assets included in the Reports and the
Adjusted Value of the Moody's Eligible Assets
included in the Reports are numerically correct;

(c)           with respect to the excess or deficiency
of the Adjusted Value of the Moody's Eligible
Assets included in the Reports when compared to
the Basic Maintenance Amount calculated for
Moody's, the results of the calculation set forth
in the Reports have been recalculated and are
numerically correct;

(d)           with respect to the Rating Agency
ratings on corporate evidences of indebtedness,
convertible corporate evidences of indebtedness
and preferred stock listed in the Reports, that
information has been traced and agrees with the
information provided directly or indirectly by
the respective rating agencies (in the event such
information does not agree or such information is
not listed in the accounting records of the Fund,
the Independent Accountants will inquire of the
rating agencies what such information is and
provide a listing in their letter of such
differences, if any);

(e)           with respect to issuer name and coupon
or dividend rate listed in the Reports, that
information has been traced and agrees with
information listed in the accounting records of
the Fund;

(f)            with respect to issue size listed in
the Reports, that information has been traced and
agrees with information provided by a Pricing
Service or such other services as Moody's may
authorize from time to time;

(g)           with respect to the prices (or
alternative permissible factors used in
calculating the Market Value as provided by this
Statement of Preferences) provided by the
Administrator of the Fund's assets for purposes
of valuing securities in the portfolio, the
Independent Accountant has traced the price used
in the Reports to the price provided by such
Administrator (in accordance with the procedures
provided in this Statement of Preferences) and
verified that such information agrees (in the
event such information does not agree, the
Independent Accountants will provide a listing in
their letter of such differences); and

(h)           with respect to the description of each
security included in the Reports, the description
of Moody's Eligible Assets has been compared to
the definition of Moody's Eligible Assets
contained in this Statement of Preferences, and
the description as appearing in the Reports
agrees with the definition of Moody's Eligible
Assets as described in this Statement of
Preferences.

Each such letter may state that:  (i) such Independent
Accountant has made no independent verification of the
accuracy of the description of the investment securities
listed in the Reports or the Market Value of those
securities nor has it performed any procedures other than
those specifically outlined above for the purposes of
issuing such letter; (ii) unless otherwise stated in the
letter, the procedures specified therein were limited to a
comparison of numbers or a verification of specified
computations applicable to numbers appearing in the Reports
and the schedule(s) thereto; (iii) the foregoing procedures
do not constitute an examination in accordance with
generally accepted auditing standards and the Reports
contained in the letter do not extend to any of the Fund's
financial statements taken as a whole; (iv) such
Independent Accountant does not express an opinion as to
whether such procedures would enable such Independent
Accountant to determine that the methods followed in the
preparation of the Reports would correctly determine the
Market Value or Discounted Value of the investment
portfolio; and (v) accordingly, such Independent Accountant
expresses no opinion as to the information set forth in the
Reports or in the schedule(s) thereto and makes no
representation as to the sufficiency of the procedures
performed for the purposes of this Statement of
Preferences.

Such letter shall also state that the Independent
Accountant is an "independent accountant" with respect to
the Fund within the meaning of the Securities Act of 1933,
as amended, and the related published rules and regulations
thereunder.

"Adjusted Value" of each Moody's Eligible Asset shall
be computed as follows:

(a)           cash shall be valued at 100% of the face
value thereof;

(b)           all other Moody's Eligible Assets shall
be valued at the Discounted Value thereof; and

(c)           each asset that is not a Moody's
Eligible Asset shall be valued at zero.

"Administrator" means the other party to the
Administration Agreement with the Fund which shall
initially be Gabelli Funds, LLC, a New York limited
liability company, and will include, as appropriate, any
sub-administrator appointed by the Administrator.

"ADRs" means U.S. dollar-denominated American
Depository Receipts.

"Adviser" means Gabelli Funds, LLC, a New York limited
liability company, or such other person as shall be serving
as the investment adviser of the Fund.

"Annual Valuation Date" means the Valuation Date each
calendar year so designated by the Fund, commencing in the
calendar year 2003.

"Asset Coverage" means asset coverage, as determined
in accordance with Section 18(h) of the 1940 Act, of at
least 200% with respect to all outstanding senior
securities of the Fund which are stock, including all
Outstanding Series D Preferred Shares (or such other asset
coverage as may in the future be specified in or under the
1940 Act as the minimum asset coverage for senior
securities which are stock of a closed-end investment
company as a condition of declaring dividends on its common
stock), determined on the basis of values calculated as of
a time within 48 hours (not including Saturdays, Sundays or
holidays) next preceding the time of such determination.

"Basic Maintenance Amount" means, as of any Valuation
Date, the dollar amount equal to (a) the sum of (i) the
product of the number of shares of each class or series of
Preferred Shares Outstanding on such Valuation Date
multiplied by the Liquidation Preference per share; (ii) to
the extent not included in (i) the aggregate amount of cash
dividends and distributions (whether or not earned or
declared) that will have accumulated for each Outstanding
Preferred Share from the most recent Dividend Payment Date
to which dividends and distributions have been paid or duly
provided for (or, in the event the Basic Maintenance Amount
is calculated on a date prior to the initial Dividend
Payment Date with respect to a class or series of the
Preferred Shares, then from the Date of Original Issue)
through the Valuation Date plus all dividends and
distributions to accumulate on the Preferred Shares then
Outstanding during the 70 days following such Valuation
Date or, if less, during the number of days following such
Valuation Date that Preferred Shares called for redemption
are scheduled to remain Outstanding; (iii) the Fund's other
liabilities due and payable as of such Valuation Date
(except that dividends and other distributions payable by
the Fund on Common Shares shall not be included as a
liability) and such liabilities projected to become due and
payable by the Fund during the 90 days following such
Valuation Date (excluding liabilities for investments to be
purchased and for dividends and other distributions not
declared as of such Valuation Date); and (iv) any current
liabilities of the Fund as of such Valuation Date to the
extent not reflected in (or specifically excluded by) any
of (a)(i) through (a)(iii) (including, without limitation,
and immediately upon determination, any amounts due and
payable by the Fund pursuant to reverse repurchase
agreements and any payables for assets purchased as of such
Valuation Date) less (b)(i) the Adjusted Value of any of
the Fund's assets or (ii) the face value of any of the
Fund's assets if, in the case of both (b)(i) and (b)(ii),
such assets are either cash or evidences of indebtedness
which mature prior to or on the date of redemption or
repurchase of Preferred Shares or payment of another
liability and are either U.S. Government Obligations or
evidences of indebtedness which have a rating assigned by
Moody's of at least Aaa, P-1, VMIG-1 or MIG-1 or by S&P of
at least AAA, SP-1+ or A-1+, and are irrevocably held by
the Fund's custodian bank in a segregated account or
deposited by the Fund with the Dividend-Disbursing Agent
for the payment of the amounts needed to redeem or
repurchase Preferred Shares subject to redemption or
repurchase or any of (a)(ii) through (a)(iv); and provided
that in the event the Fund has repurchased Preferred Shares
and irrevocably segregated or deposited assets as described
above with its custodian bank or the Dividend-Disbursing
Agent for the payment of the repurchase price the Fund may
deduct 100% of the Liquidation Preference of such Preferred
Shares to be repurchased from (a) above.  Basic Maintenance
Amount shall, for purposes of this Statement of
Preferences, have a correlative meaning with respect to any
other class or series of Preferred Shares.

"Basic Maintenance Amount Cure Date" means, with
respect to the Series D Preferred Shares, 10 Business Days
following a Valuation Date, such date being the last day
upon which the Fund's failure to comply with paragraph
5(a)(ii)(A) of Part II hereof could be cured, and for the
purposes of this Statement of Preferences shall have a
correlative meaning with respect to any other class or
series of Preferred Shares.

"Basic Maintenance Report" or "Report" means, with
respect to the Series D Preferred Shares, a report prepared
by the Administrator which sets forth, as of the related
Valuation Date, Moody's Eligible Assets sufficient to meet
or exceed the Basic Maintenance Amount, the Market Value
and Discounted Value thereof (seriatim and in the
aggregate), and the Basic Maintenance Amount, and for the
purposes of this Statement of Preferences shall have a
correlative meaning with respect to any other class or
series of Preferred Shares.

"Board of Trustees" means the Board of Trustees of the
Fund or any duly authorized committee thereof as permitted
by applicable law.

"Business Day" means a day on which the New York Stock
Exchange is open for trading and that is neither a
Saturday, Sunday nor any other day on which banks in The
City of New York, New York are authorized or obligated by
law to close.

"By-Laws" means the By-Laws of the Fund as amended
from time to time.

"Common Shares" means the common shares of beneficial
interest of the Fund, par value $0.001 per share.

"Cure Date" shall have the meaning set forth in
paragraph 3(a) of Part II hereof.

"Date of Original Issue" means November 3, 2005, and
for the purposes of this Statement of Preferences shall
have a correlative meaning with respect to any other class
or series of Preferred Shares.

"Declaration" means the Amended and Restated Agreement
and Declaration of Fund of the Fund, dated as of August 20,
2003, as amended, supplemented or restated from time to
time (including by this Statement of Preferences or by way
of any other supplement or Statement of Preferences
authorizing or creating a class of shares of beneficial
interest in the Fund).

"Deposit Assets" means cash, Short-Term Money Market
Instruments and U.S. Government Obligations.  Except for
determining whether the Fund has Moody's Eligible Assets
with an Adjusted Value equal to or greater than the Basic
Maintenance Amount, each Deposit Asset shall be deemed to
have a value equal to its principal or face amount payable
at maturity plus any interest payable thereon after
delivery of such Deposit Asset but only if payable on or
prior to the applicable payment date in advance of which
the relevant deposit is made.

"Discounted Value" means, as applicable, (a) the
quotient of the Market Value of an Eligible Asset divided
by the applicable Discount Factor or (b) such other formula
for determining the discounted value of an Eligible Asset
as may be established by an applicable Rating Agency,
provided, in either case that with respect to an Eligible
Asset that is currently callable, Discounted Value will be
equal to the applicable quotient or product as calculated
above or the call price, whichever is lower, and that with
respect to an Eligible Asset that is prepayable, Discounted
Value will be equal to the applicable quotient or product
as calculated above or the par value, whichever is lower.

"Dividend-Disbursing Agent" means, with respect to the
Series D Preferred Shares, EquiServe Fund Company, N.A. and
its successors or any other dividend-disbursing agent
appointed by the Fund and, with respect to any other class
or series of Preferred Shares, the Person appointed by the
Fund as dividend-disbursing or paying agent with respect to
such class or series.

"Dividend Payment Date" means with respect to the
Series D Preferred Shares, any date on which dividends and
distributions declared by the Board of Trustees thereon are
payable pursuant to the provisions of paragraph 1(a) of
Part II of this Statement of Preferences and shall for the
purposes of this Statement of Preferences have a
correlative meaning with respect to any other class or
series of Preferred Shares.

"Dividend Period" shall have the meaning set forth in
paragraph 1(a) of Part II hereof, and for the purposes of
this Statement of Preferences shall have a correlative
meaning with respect to any other class or series of
Preferred Shares.

"Eligible Assets" means Moody's Eligible Assets (if
Moody's is then rating the Series D Preferred Shares at the
request of the Fund), S&P Eligible Assets (if S&P is then
rating the Series D Preferred Shares at the request of the
Fund), and/or Other Rating Agency Eligible Assets if any
Other Rating Agency is then rating the Series D Preferred
Shares or any other outstanding series of Preferred Shares,
whichever is applicable.

"Governing Documents" means the Declaration and the
By-Laws.

"Independent Accountant" means a nationally recognized
accountant, or firm of accountants, that is with respect to
the Fund an independent public accountant or firm of
independent public accountants under the Securities Act of
1933, as amended.

"Liquidation Preference" shall, with respect to the
Series D Preferred Shares, have the meaning set forth in
paragraph 2(a) of Part II hereof, and for the purposes of
this Statement of Preferences shall have a correlative
meaning with respect to any other class or series of
Preferred Shares.

"Market Value" means the amount determined by the Fund
with respect to Moody's Eligible Assets in accordance with
valuation policies adopted from time to time by the Board
of Trustees as being in compliance with the requirements of
the 1940 Act.

Notwithstanding the foregoing, "Market Value" may, at
the option of the Fund with respect to any of its assets,
mean the amount determined with respect to specific Moody's
Eligible Assets of the Fund in the manner set forth below:

(a)           as to any common or preferred stock
which is a Moody's Eligible Asset, (i) if the
stock is traded on a national securities exchange
or quoted on the Nasdaq System, the last sales
price reported on the Valuation Date or (ii) if
there was no reported sales price on the
Valuation Date, the lower of two bid prices for
such stock provided to the Administrator by two
recognized securities dealers with minimum
capitalizations of $25,000,000 (or otherwise
approved for such purpose by Moody's) or by one
such securities dealer and any other source
(provided that the utilization of such source
would not adversely affect Moody's then-current
rating of the Series D Preferred Shares), at
least one of which shall be provided in writing
or by telecopy, telex, other electronic
transcription, computer obtained quotation
reducible to written form or similar means, and
in turn provided to the Fund by any such means by
such Administrator, or, if two bid prices cannot
be obtained, such Moody's Eligible Asset shall
have a Market Value of zero;

(b)           as to any U.S. Government Obligation,
Short Term Money Market Instrument (other than
demand deposits, federal funds, bankers'
acceptances and next Business Day repurchase
agreements) and commercial paper with a maturity
of greater than 60 days, the product of (i) the
principal amount (accreted principal to the
extent such instrument accretes interest) of such
instrument, and (ii) the lower of the bid prices
for the same kind of instruments having, as
nearly as practicable, comparable interest rates
and maturities provided by two recognized
securities dealers having a minimum
capitalization of $25,000,000 (or otherwise
approved for such purpose by Moody's) or by one
such dealer and any other source (provided that
the utilization of such source would not
adversely affect Moody's then-current rating of
the Series D Preferred Shares) to the
Administrator, at least one of which shall be
provided in writing or by telecopy, telex, other
electronic transcription, computer obtained
quotation reducible to written form or similar
means, and in turn provided to the Fund by any
such means by such Administrator, or, if two bid
prices cannot be obtained, such Moody's Eligible
Asset will have a Market Value of zero;

(c)           as to cash, demand deposits, federal
funds, bankers' acceptances and next Business Day
repurchase agreements included in Short-Term
Money Market Instruments, the face value thereof;

(d)           as to any U.S. Government Obligation,
Short-Term Money Market Instrument or commercial
paper with a maturity of 60 days or fewer,
amortized cost unless the Board of Trustees
determines that such value does not constitute
fair value; and

(e)           as to any other evidence of indebtedness
which is a Moody's Eligible Asset, (i) the
product of (A) the unpaid principal balance of
such indebtedness as of the Valuation Date and
(B)(1) if such indebtedness is traded on a
national securities exchange or quoted on the
Nasdaq System, the last sales price reported on
the Valuation Date or (2) if there was no
reported sales price on the Valuation Date or if
such indebtedness is not traded on a national
securities exchange or quoted on the Nasdaq
System, the lower of two bid prices for such
indebtedness provided by two recognized dealers
with a minimum capitalization of $25,000,000 (or
otherwise approved for such purpose by Moody's)
or by one such dealer and any other source
(provided that the utilization of such source
would not adversely affect Moody's then-current
rating of the Series D Preferred Shares) to the
Administrator, at least one of which shall be
provided in writing or by telecopy, telex, other
electronic transcription, computer obtained
quotation reducible to written form or similar
means, and in turn provided to the Fund by any
such means by such Administrator, plus
(ii) accrued interest on such indebtedness.

"Monthly Valuation Date" means the last Valuation Date
of each calendar month.

"Moody's" means Moody's Investors Service, Inc., or
its successors at law.  In the event that Moody's is no
longer rating the Series D Preferred Shares at the request
of the Fund, "Moody's" shall be deemed to refer to any
other nationally recognized securities rating agency
designated by the Fund.

"Moody's Discount Factor" means, with respect to a
Moody's Eligible Asset specified below, the following
applicable number:

TYPE OF MOODY'S ELIGIBLE ASSET:                               MOODY'S
                                                             DISCOUNT
                                                              FACTOR:

 Short Term Money Market
Instruments (other than U.S.
Government Obligations set
forth below) and other
commercial paper:

U.S. Treasury Securities with
final maturities that are less
than or equal to 60 days                                       1.00

Demand or time deposits,
certificates of deposit and
bankers' acceptances includible
in Short Term Money Market Instruments                         1.00

Commercial paper rated P-1 by
Moody's maturing in 30 days or less                            1.00

Commercial paper rated P-1 by
Moody's maturing in more than
30 days but in 270 days or less                                1.15

Commercial paper rated A-1+ by
S&P maturing in 270 days or less                               1.25

Repurchase obligations includible
in Short Term Money Market
Instruments if term is less
than 30 days and counterparty
is rated at least A2                                           1.00

Other repurchase obligations                           Discount Factor
                                                       applicable to
                                                      underlying assets

U.S. Common Stocks and Common
Stocks of foreign issuers for
which ADR's are traded:

Large Cap Stocks (Market
Capitalization in excess of $10 billion)                       2.00

Mid Cap Stocks (Market
Capitalization in between $2
billion and $10 billion)                                       2.05

Small Cap Stocks (Market
Capitalization less than $2 billion)                           2.20

Common Stocks of foreign issuers
(in existence for at least five
years) for which no ADR's are traded                           4.00



* Discount Factors are for a 7-week exposure period; the
Discount Factor applicable to Rule 144A securities shall be
increased by 20%.  Unless conclusions regarding liquidity
risk and estimates of both the probability and severity of
default for the Fund's assets can be derived from other
sources, securities rated below B by Moody's and unrated
securities, which are securities rated by neither Moody's,
S&P nor Fitch, are limited to 10% of Moody's Eligible
Assets. If a convertible corporate debt security is unrated
by Moody's, S&P or Fitch, the Fund will use the percentage
set forth under "NR" in this table. Ratings assigned by S&P
or Fitch are generally accepted by Moody's at face value.
However, adjustments to face value may be made to
particular categories of credits for which the S&P and/or
Fitch rating does not seem to approximate a Moody's rating
equivalent. Securities with different ratings assigned by
S&P and Fitch will be accepted at the lower of the two
ratings.

Type of Moody's Eligible Asset:                              Moody's
                                                        Discount Factor:

 Convertible Preferred Stocks and
Convertible Corporate Debt
Securities having a delta range of:
  .8-.4 (investment grade)                                      1.92
 .8-.4 (below investment grade)                                2.26
 1-.8 (investment grade)                                       1.95
 1-.8 (below investment grade)                                 2.29

Convertible Preferred Stocks and
Convertible Corporate Debt
Securities that are unrated                                    2.50

Preferred stocks:
 Auction rate preferred stocks                                3.50
 Other preferred stock rated:
Aaa                                                          1.50
 Aa                                                         1.55
 A                                                          1.60
 Baa                                                        1.65
 Ba                                                         1.96
 B                                                          2.16
 Less than B or not rated                                   2.40
 DRD Preferred (investment grade)                           1.65
 DRD Preferred (below investment grade)                     2.16
 U.S. Government Obligations
(other than U.S. Treasury
Securities Strips set forth
below) with remaining terms to maturity of:
 1 year or less                                          1.04
 2 years or less                                         1.09
 3 years or less                                         1.12
 4 years or less                                         1.15
 5 years or less                                         1.18
 7 years or less                                         1.21
 10 years or less                                        1.24
 15 years or less                                        1.25
 20 years or less                                        1.26
 30 years or less                                        1.26
 U.S. Treasury Securities Strips
with remaining terms to maturity of:
 1 year or less                                         1.04
 2 years or less                                        1.10
 3 years or less                                        1.14
 4 years or less                                        1.18
 5 years or less                                        1.21
 7 years or less                                       1.27
 10 years or less                                      1.34
 15 years or less                                      1.45
 20 years or less                                      1.54
 30 years or less                                      1.66

Corporate Debt:

Convertible corporate debt
having a delta range of .4-0,
and non-convertible corporate
debt, rated at least Aa1 with
remaining terms to maturity of:

 1 year or less                                     1.09
 2 years or less                                    1.15
 3 years or less                                    1.20
 4 years or less                                    1.26
 5 years or less                                    1.32
 7 years or less                                    1.39
 10 years or less                                   1.45
 15 years or less                                   1.50
 20 years or less                                   1.50
 30 years or less                                   1.50
 Greater than 30 years                              1.65

Convertible corporate debt
having a delta range of .4-0,
and non-convertible corporate
debt, rated at least Aa3 with
remaining terms to maturity of:

 1 year or less                                 1.12
 2 years or less                                1.18
 3 years or less                                1.23
 4 years or less                                1.29
 5 years or less                                1.35
 7 years or less                                1.43
 10 years or less                               1.50
 15 years or less                               1.55
 20 years or less                               1.55
 30 years or less                              1.55
 Greater than 30 years                         1.73

Convertible corporate debt having
a delta range of .4-0, and non-
convertible corporate debt,
rated at least A3 with
remaining terms to maturity of:

 1 year or less                                  1.15
 2 years or less                                 1.22
 3 years or less                                 1.27
 4 years or less                                 1.33
 5 years or less                                 1.39
 7 years or less                                 1.47
 10 years or less                                1.55
 15 years or less                                1.60
 20 years or less                                1.60
 30 years or less                                1.60
 Greater than 30 years                           1.81

Convertible corporate debt
having a delta range of .4-0,
and non-convertible corporate
debt, rated at least Baa3 with
remaining terms of maturity of:

 1 year or less                                1.18
 2 years or less                               1.25
 3 years or less                               1.31
 4 years or less                               1.38
 5 years or less                               1.44
 7 years or less                              1.52
 10 years or less                             1.60
 15 years or less                             1.65
 20 years or less                             1.65
 30 years or less                             1.65
 Greater than 30 years                        1.89

Convertible corporate debt
having a delta range of .4-0,
and non-convertible corporate
debt, rated at least Ba3 with
remaining terms of maturity of:

 1 year or less                                1.37
 2 years or less                               1.46
 3 years or less                               1.53
 4 years or less                               1.61
 5 years or less                               1.68
 7 years or less                               1.79
 10 years or less                              1.89
 15 years or less                              1.96
 20 years or less                              1.96
 30 years or less                             1.96
 Greater than 30 years                        2.05

Convertible corporate debt
having a delta range of .4-0,
and non-convertible corporate
debt, rated at least B1 and B2
with remaining terms of maturity of:
 1 year or less                               1.50
 2 years or less                              1.60
 3 years or less                              1.68
 4 years or less                              1.76
 5 years or less                              1.85
 7 years or less                              1.97
 10 years or less                             2.08
 15 years or less                            2.16
 20 years or less                            2.28
 30 years or less                            2.29
 Greater than 30 years                       2.40


  Discount Factors
are for a seven-week exposure period; the Discount Factor
applicable to Rule 144A securities shall be increased by
20%. Unless conclusions regarding liquidity risk and
estimates of both the probability and severity of default
for the Trust's assets can be derived from other sources,
securities rated below B by Moody's and unrated securities,
which are securities rated by neither Moody's, S&P nor
Fitch, are limited to 10% of Moody's Eligible Assets. If a
convertible corporate debt security is unrated by Moody's,
S&P or Fitch, the Fund will use the percentage set forth
under "NR" in this table. Ratings assigned by S&P or Fitch
are generally accepted by Moody's at face value. However,
adjustments to face value may be made to particular
categories of credits for which the S&P and/or Fitch rating
does not seem to approximate a Moody's rating equivalent.
Securities with different ratings assigned by S&P and Fitch
will be accepted at the lower of the two ratings.

"Moody's Eligible Assets" means:

(a)           cash (including, for this purpose,
receivables for investments sold to a
counterparty whose senior debt securities are
rated at least Baa3 by Moody's or a counterparty
approved by Moody's and payable within five
Business Days following such Valuation Date and
dividends and interest receivable within 70 days
on investments);

(b)           Short-Term Money Market Instruments;

(c)           commercial paper that is not includible
as a Short-Term Money Market Instrument having on
the Valuation Date a rating from Moody's of at
least P-1 and maturing within 270 days;

(d)           preferred stocks including convertible
preferred (i) which either (A) are issued by
issuers whose senior debt securities are rated at
least Baa1 by Moody's or (B) are rated at least
Baa3 by Moody's or (C) in the event an issuer's
senior debt securities or preferred stock is not
rated by Moody's, which either (1) are issued by
an issuer whose senior debt securities are rated
at least A- by S&P or (2) are rated at least A-
by S&P and for this purpose have been assigned a
Moody's equivalent rating of at least Baa3, (ii)
of issuers which have (or, in the case of issuers
which are special purpose corporations, whose
parent companies have) common stock listed on the
New York Stock Exchange, the American Stock
Exchange or the Nasdaq National Market System,
(iii) which have a minimum issue size (when taken
together with other of the issuer's issues of
similar tenor) of $40,000,000, (iv) which have
paid cash dividends consistently during the
proceding three-year period (or, in the case of
new issues without a dividend history, are rated
at least A1 by Moody's or, if not rated by
Moody's, are rated at least A+ by B&P), (v) which
pay cumulative cash dividends in U.S. dollars,
(vi) which do not have warrants attached, (vii)
which are not issued by issuers in the
transportation industry and (vii) in the case of
auction rate preferred stocks, which are rated at
least Aa3 by Moody's, or if not rated by Moody's,
AA- by S&P, AA- by Pitch or are otherwise
approved in writing by Moody's and have never had
a failed auction; provided, however, that for
this purpose the aggregate Market Value of the
Fund's holdings of any single issue of auction
rate preferred stock shall not be more than 1% of
the Fund's total assets.

(e)           common stocks (i) (A) which are traded
on a nationally recognized stock exchange or in
the over-the-counter market, (B) if cash dividend
paying, pay cash dividends in U.S. dollars and
(C) which may be sold without restriction by the
Fund; provided, however, that (y) common stock
which, while a Moody's Eligible Asset owned by
the Fund, ceases paying any regular cash dividend
will no longer be considered a Moody's Eligible
Asset until 71 days after the date of the
announcement of such cessation, unless the issuer
of the common stock has senior debt securities
rated at least A3 by Moody's and (z) the
aggregate Market Value of the Fund's holdings of
the common stock of any issuer in excess of 4% in
the case of utility common stock and 6% in the
case of non-utility common stock of the aggregate
Market Value of the Fund's holdings shall not be
Moody's Eligible Assets, (ii) which are
securities denominated in any currency other than
the U.S. dollar or securities of issuers formed
under the laws of jurisdictions other than the
United States, its states and the District of
Columbia for which there are dollar-denominated
ADRs or their equivalents which are traded in the
United States on exchanges or over-the-counter
and are issued by banks formed under the laws of
the United States, its states or the District of
Columbia or (iii) which are securities of issuers
formed under the laws of jurisdictions other than
the United States (and in existence for at least
five years) for which no ADRs are traded;
provided, however, that the aggregate Market
Value of the Fund's holdings of securities
denominated in currencies other than the U.S.
dollar and ADRs in excess of (A) 6% of the
aggregate Market Value of the outstanding shares
of common stock of such issuer thereof or (B) 10%
of the Market Value of the Fund's Moody's
Eligible Assets with respect to issuers formed
under the laws of any single such non-U.S.
jurisdiction other than Australia, Belgium,
Canada, Denmark, Finland, France, Germany,
Ireland, Italy, Japan, Luxembourg, the
Netherlands, New Zealand, Norway, Portugal,
Spain, Sweden, Switzerland and the United
Kingdom, shall not be a Moody's Eligible Asset;

(f)            ADR securities, based on the following
guidelines: (i) Sponsored ADR program or
(ii) Level II or Level III ADRs.  Private
placement Rule 144A ADRs are not eligible for
collateral consideration.  Global GDR programs
will be evaluated on a case by case basis;

(g)           U.S. Government Obligations;

(h)           corporate evidences of indebtedness
(i) which may be sold without restriction by the
Fund which are rated at least B3 (Caa
subordinate) by Moody's (or, in the event the
security is not rated by Moody's, the security is
rated at least B- by S&P and which for this
purpose is assigned a Moody's equivalent rating
of one full rating category lower), with such
rating confirmed on each Valuation Date, (ii)
which have a minimum issue size of at least
(A) $100,000,000 if rated at least Baa3 or
(B) $50,000,000 if rated B or Ba3, (iii) which
are not convertible or exchangeable into equity
of the issuing corporation and have a maturity of
not more than 30 years and (iv) for which, if
rated below Baa3 or not rated, the aggregate
Market Value of the Fund's holdings do not exceed
10% of the aggregate Market Value of any
individual issue of corporate evidences of
indebtedness calculated at the time of original
issuance; and

(i)            convertible corporate evidences of
indebtedness (i) which are issued by issuers
whose senior debt securities are rated at least
B2 by Moody's (or, in the event an issuer's
senior debt securities are not rated by Moody's,
which are issued by issuers whose senior debt
securities are rated at least B by S&P and which
for this purpose is assigned a Moody's equivalent
rating of one full rating category lower),
(ii) which are convertible into common stocks
which are traded on the New York Stock Exchange
or the American Stock Exchange or are quoted on
the Nasdaq National Market System and
(iii) which, if cash dividend paying, pay cash
dividends in U.S. dollars; provided, however,
that once convertible corporate evidences of
indebtedness have been converted into common
stock, the common stock issued upon conversion
must satisfy the criteria set forth in clause
(e) above and other relevant criteria set forth
in this definition in order to be a Moody's
Eligible Asset;

provided, however, that the Fund's investments in auction
rate preferred stocks described in clause (d) above shall
be included in Moody's Eligible Assets only to the extent
that the aggregate Market Value of such stocks does not
exceed 10% of the aggregate Market Value of all of the
Fund's investments meeting the criteria set forth in
clauses (a) through (g) above less the aggregate Market
Value of those investments excluded from Moody's Eligible
Assets pursuant to the paragraph appearing after clause (j)
below; and

(j)            no assets which are subject to any lien
or irrevocably deposited by the Fund for the
payment of amounts needed to meet the obligations
described in clauses (a)(i) through (a)(iv) of
the definition of "Basic Maintenance Amount" may
be includible in Moody's Eligible Assets.

Notwithstanding anything to the contrary in the
preceding clauses (a)-(j), the Fund's investment in
preferred stock, common stock, corporate evidences of
indebtedness and convertible corporate evidences of
indebtedness shall not be treated as Moody's Eligible
Assets except to the extent they satisfy the following
diversification requirements (utilizing Moody's Industry
and Sub-industry Categories) with respect to the Market
Value of the Fund's holdings:

Issuer:

Moody's Rating(1)(2)       Non-Utility        Utility Maximum
                          Maximum Single          Single
                           Issuer(3)(4)         Issuer(3)(4)

Aaa                         100%                   100%
Aa                           20%                    20%
A                            10%                    10%
CS/CB, Baa(5)                 6%                     4%
Ba                            4%                     4%
B1/B2                         3%                     3%
B3 or below                   2%                     2%

Industry and State:

Moody's Rating(1)    Non-Utility      Utility           Utility
                      Maximum         Maximum           Maximum
                      Single         Single Sub-        Single
                     Industry(3)     Industry(3)(6)     State(3)

Aaa                    100%            100%              100%
Aa                     60%              60%               20%
A                      40%              50%               10%(7)
CS/CB, Baa(5)          20%              50%                7%(7)
Ba                     12%              12%                0%
B1/B2                  8%                8%                0%
B3 or below            5%                5%                0%



(1)           Unless conclusions regarding liquidity
risk as well as estimates of both the probability
and severity of default for the Corporation's
assets can be derived from other sources,
securities rated below B by Moody's and unrated
securities, which are securities rated by neither
Moody's, S&P nor Fitch, are limited to 10% of
Moody's Eligible Assets. If a corporate,
municipal or other debt security is unrated by
Moody's, S&P or Fitch, the Corporation will use
the percentage set forth under "B3 or below" in
this table. Ratings assigned by S&P or Fitch are
generally accepted by Moody's at face value.
However, adjustments to face value may be made to
particular categories of credits for which the
S&P and/or Fitch rating does not seem to
approximate a Moody's rating equivalent.

(2)           Corporate evidences of indebtedness from
issues ranging $50,000,000 to $100,000,000 are
limited to 20% of Moody's Eligible Assets.

(3)           The referenced percentages represent
maximum cumulative totals only for the related
Moody's rating category and each lower Moody's
rating category.

(4)           Issuers subject to common ownership of
25% or more are considered as one name.

(5)           CS/CB refers to common stock and
convertible corporate evidences of indebtedness,
which are diversified independently from the
rating level.

(6)           In the case of utility common stock,
utility preferred stock, utility evidences of
indebtedness and utility convertible evidences of
indebtedness, the definition of industry refers
to sub-industries (electric, water, hydro power,
gas, diversified).  Investments in other sub-
industries are eligible only to the extent that
the combined sum represents a percentage position
of the Moody's Eligible Assets less than or equal
to the percentage limits in the diversification
tables above.

(7)           Such percentage shall be 15% in the case
of utilities regulated by California, New York
and Texas.

"Moody's Industry Classifications" means for the
purposes of determining Moody's Eligible Assets, each of
the following industry classifications (or such other
classifications as Moody's may from time to time approve
for application to the Series D Preferred Shares).

1.       Aerospace and Defense: Major Contractor,
Subsystems, Research, Aircraft Manufacturing,
Arms, Ammunition.

2.       Automobile: Automobile Equipment, Auto-
Manufacturing, Auto Parts Manufacturing,
Personal Use Trailers, Motor Homes, Dealers.

3.       Banking: Bank Holding, Savings and
Loans, Consumer Credit, Small Loan, Agency,
Factoring, Receivables.

4.       Beverage, Food and Tobacco: Beer and
Ale, Distillers, Wines and Liquors,
Distributors, Soft Drink Syrup, Bottlers,
Bakery, Mill Sugar, Canned Foods, Corn
Refiners, Dairy Products, Meat Products,
Poultry Products, Snacks, Packaged Foods,
Distributors, Candy, Gum, Seafood, Frozen
Food, Cigarettes, Cigars, Leaf/Snuff,
Vegetable Oil.

5.       Buildings and Real Estate: Brick,
Cement, Climate Controls, Contracting,
Engineering, Construction, Hardware, Forest
Products (building-related only), Plumbing,
Roofing, Wallboard, Real Estate, Real Estate
Development, REITs, Land Development.

6.       Chemicals, Plastics and Rubber:
Chemicals (non-agricultural), Industrial
Gases, Sulphur, Plastics, Plastic Products,
Abrasives, Coatings, Paints, Varnish,
Fabricating Containers.

7.       Packaging and Glass: Glass, Fiberglass,
Containers made of: Glass, Metal, Paper,
Plastic, Wood or Fiberglass.

8.       Personal and Non-Durable Consumer
Products (Manufacturing Only): Soaps,
Perfumes, Cosmetics, Toiletries, Cleaning
Supplies, School Supplies.

9.        Diversified/Conglomerate Manufacturing.

10.     Diversified/Conglomerate Service.

11.   Diversified Natural Resources, Precious
Metals and Minerals: Fabricating,
Distribution.

12.     Ecological: Pollution Control, Waste
Removal, Waste Treatment and Waste Disposal.

13.     Electronics: Computer Hardware, Electric
Equipment, Components, Controllers, Motors,
Household Appliances, Information Service
Communication Systems, Radios, TVs, Tape
Machines, Speakers, Printers, Drivers,
Technology.

14.     Finance: Investment Brokerage, Leasing,
Syndication, Securities.

15.     Farming and Agriculture: Livestock,
Grains, Produce, Agriculture Chemicals,
Agricultural Equipment, Fertilizers.

16.      Grocery: Grocery Stores, Convenience
Food Stores.

17.     Healthcare, Education and Childcare:
Ethical Drugs, Proprietary Drugs, Research,
Health Care Centers, Nursing Homes, HMOs,
Hospitals, Hospital Supplies, Medical
Equipment.

18.     Home and Office Furnishings, Housewares,
and Durable Consumer Products: Carpets, Floor
Coverings, Furniture, Cooking, Ranges.

19.      Hotels, Motels, Inns and Gaming.

20.     Insurance: Life, Property and Casualty,
Broker, Agent, Surety.

21.     Leisure, Amusement, Motion Pictures,
Entertainment: Boating, Bowling, Billiards,
Musical Instruments, Fishing, Photo Equipment,
Records, Tapes, Sports, Outdoor Equipment
(Camping), Tourism, Resorts, Games, Toy
Manufacturing, Motion Picture Production
Theaters, Motion Picture Distribution.

22.     Machinery (Non-Agricultural, Non-
Construction, Non-Electronic): Industrial,
Machine Tools, Steam Generators.

23.     Mining, Steel, Iron and Non-Precious
Metals: Coal, Copper, Lead, Uranium, Zinc,
Aluminum, Stainless Steel, Integrated Steel,
Ore Production, Refractories, Steel Mill
Machinery, Mini-Mills, Fabricating,
Distribution and Sales of the foregoing.

24.     Oil and Gas: Crude Producer, Retailer,
Well Supply, Service and Drilling.

25.     Printing, Publishing, and Broadcasting:
Graphic Arts, Paper, Paper Products, Business
Forms, Magazines, Books, Periodicals,
Newspapers, Textbooks, Radio, T.V., Cable
Broadcasting Equipment.

26.     Cargo Transport: Rail, Shipping,
Railroads, Rail-car Builders, Ship Builders,
Containers, Container Builders, Parts,
Overnight Mail, Trucking, Truck Manufacturing,
Trailer Manufacturing, Air Cargo, Transport.

27.     Retail Stores: Apparel, Toy, Variety,
Drugs, Department, Mail Order Catalog,
Showroom.

28.     Telecommunications: Local, Long Distance,
Independent, Telephone, Telegraph, Satellite,
Equipment, Research, Cellular.

29.     Textiles and Leather: Producer, Synthetic
Fiber, Apparel Manufacturer, Leather Shoes.

30.     Personal Transportation: Air, Bus, Rail,
Car Rental.

31.     Utilities: Electric, Water, Hydro Power,
Gas.

32.     Diversified Sovereigns: Semi-sovereigns,
Canadian Provinces, Supra-national Agencies.

The Fund will use SIC codes in determining which
industry classification is applicable to a particular
investment in consultation with the Independent Accountant
and Moody's, to the extent the Fund considers necessary.

"1933 Act" means the Securities Act of 1933, as
amended, or any successor statute.

"1940 Act" means the Investment Company Act of 1940,
as amended, or any successor statute.

"Notice of Redemption" shall have the meaning set
forth in paragraph 3(c)(i) of Part II hereof.

"Outstanding" means, as of any date, Preferred Shares
theretofore issued by the Fund except:

(a)           any such Preferred Share theretofore
cancelled by the Fund or delivered to the Fund
for cancellation;

(b)           any such Preferred Share, other than
Auction Preferred Shares, as to which a notice of
redemption shall have been given and for whose
payment at the redemption thereof Deposit Assets
in the necessary amount are held by the Fund in
Fund for, or have been irrevocably deposited with
the relevant disbursing agent for payment to, the
holder of such share pursuant to the Statement of
Preferences with respect thereto;

(c)           in the case of an Auction Preferred
Share, any such share theretofore delivered to
the auction agent for cancellation or with
respect to which the Fund has given notice of
redemption and irrevocably deposited with the
paying agent sufficient funds to redeem such
share; and

(d)           any such Preferred Share in exchange for
or in lieu of which other shares have been issued
and delivered.

Notwithstanding the foregoing, (i) for purposes of voting
rights (including the determination of the number of shares
required to constitute a quorum), any Preferred Shares as
to which any subsidiary of the Fund is the holder will be
disregarded and deemed not Outstanding, (ii) in connection
with any auction of Auction Preferred Shares as to which
the Fund or any Person known to the auction agent to be a
subsidiary of the Fund is the holder will be disregarded
and not deemed Outstanding.

"Person" means and includes an individual, a
partnership, the Fund, a fund, a corporation, a limited
liability company, an unincorporated association, a joint
venture or other entity or a government or any agency or
political subdivision thereof.

"Preferred Shares" means the preferred shares, par
value $0.001 per share, of the Fund, and includes the
Series D Preferred Shares.

"Pricing Service" means any of the following:
Bloomberg Financial Service, Bridge Information Services,
Data Resources Inc., FT Interactive, International
Securities Market Association, Merrill Lynch Securities
Pricing Service, Muller Data Corp., Reuters, S&P/J.J.
Kenny, Telerate, Trepp Pricing and Wood Gundy.

"Redemption Price" has the meaning set forth in
paragraph 3(a) of Part II hereof, and for the purposes of
this Statement of Preferences shall have a correlative
meaning with respect to any other class or series of
Preferred Shares.

"S&P" means Standard & Poor's Ratings Services, or its
successors at law.

"Series D Preferred Shares" means the 6.00% Series D
Cumulative Preferred Shares, par value $0.001 per share, of
the Fund.

"Series D Asset Coverage Cure Date" means, with
respect to the failure by the Fund to maintain Asset
Coverage (as required by paragraph 5(a)(i) of Part II
hereof) as of the last Business Day of each March, June,
September and December of each year, 49 days following such
Business Day.

"Short-Term Money Market Instruments" means the
following types of instruments if, on the date of purchase
or other acquisition thereof by the Fund, the remaining
term to maturity thereof is not in excess of 180 days:

(i)            commercial paper rated A-1 if such
commercial paper matures in 30 days or A-1+ if
such commercial paper matures in over 30 days;

(ii)           demand or time deposits in, and
banker's acceptances and certificates of deposit
of (A) a depository institution or Fund company
incorporated under the laws of the United States
of America or any state thereof or the District
of Columbia or (B) a United States branch office
or agency of a foreign depository institution
(provided that such branch office or agency is
subject to banking regulation under the laws of
the United States, any state thereof or the
District of Columbia);

(iii)           overnight funds; and

 (iv)         U.S. Government Obligations.

"Fund" means The Gabelli Dividend & Income Fund, a
Delaware statutory Fund.

"U.S. Government Obligations" means direct obligations
of the United States or by its agencies or
instrumentalities that are entitled to the full faith and
credit of the United States and that, other than United
States Treasury Bills, provide for the periodic payment of
interest and the full payment of principal at maturity or
call for redemption.

"Valuation Date" means the last Business Day of each
month, or such other date as the Fund and Moody's may agree
to for purposes of determining the Basic Maintenance
Amount.

"Voting Period" shall have the meaning set forth in
paragraph 4(b) of Part II hereof.

PART II

SERIES D PREFERRED SHARES

1. Dividends and Distributions.

(a)    The holders of Series D Preferred Shares shall
be entitled to receive, when, as and if declared by the
Board of Trustees, out of funds legally available therefor,
cumulative cash dividends and distributions at the rate of
6.00% per annum (computed on the basis of a 360-day year
consisting of twelve 30-day months) of the Liquidation
Preference on the Series D Preferred Shares and no more,
payable quarterly on March 26, June 26, September 26 and
December 26 in each year (each, a Dividend Payment Date)
commencing on December 26, 2005 (or, if any such day is not
a Business Day, then on the next succeeding Business Day)
to holders of record of Series D Preferred Shares as they
appear on the stock register of the Fund at the close of
business on the fifth preceding Business Day in preference
to dividends and distributions on Common Shares and any
other capital shares of the Fund ranking junior to the
Series D Preferred Shares in payment of dividends and
distributions.  Dividends and distributions on Series D
Preferred Shares shall accumulate from the date on which
such shares are originally issued. Each period beginning on
and including a Dividend Payment Date (or the Date of
Original Issue, in the case of the first dividend period
after issuance of such shares) and ending on but excluding
the next succeeding Dividend Payment Date is referred to
herein as a "Dividend Period."  Dividends and distributions
on account of arrears for any past Dividend Period or in
connection with the redemption of Series D Preferred Shares
may be declared and paid at any time, without reference to
any Dividend Payment Date, to holders of record on such
date not exceeding 30 days preceding the payment date
thereof as shall be fixed by the Board of Trustees.

(b)   	(i) 	No full dividends and distributions
shall be declared or paid on Series D Preferred Shares for
any Dividend Period or part thereof unless full cumulative
dividends and distributions due through the most recent
Dividend Payment Dates therefor for all series of Preferred
Shares of the Fund ranking on a parity with the Series D
Preferred Shares as to the payment of dividends and
distributions have been or contemporaneously are declared
and paid through the most recent Dividend Payment Dates
therefor.  If full cumulative dividends and distributions
due have not been paid on all such Outstanding Preferred
Shares, any dividends and distributions being paid on such
Preferred Shares (including the Series D Preferred Shares)
will be paid as nearly pro rata as possible in proportion
to the respective amounts of dividends and distributions
accumulated but unpaid on each such series of Preferred
Shares on the relevant Dividend Payment Date.  No holders
of Series D Preferred Shares shall be entitled to any
dividends and distributions, whether payable in cash,
property or shares, in excess of full cumulative dividends
and distributions as provided in this paragraph 1(b)(i) on
Series D Preferred Shares.  No interest or sum of money in
lieu of interest shall be payable in respect of any
dividend payments on any Series D Preferred Shares that may
be in arrears.

(ii)           For so long as Series D Preferred
Shares are Outstanding, the Fund shall not pay any dividend
or other distribution (other than a dividend or
distribution paid in Common Shares, or options, warrants or
rights to subscribe for or purchase Common Shares or other
shares, if any, ranking junior to the Series D Preferred
Shares as to dividends and distributions and upon
liquidation) in respect of the Common Shares or any other
shares of the Fund ranking junior to the Series D Preferred
Shares as to the payment of dividends and the distribution
of assets upon liquidation, or call for redemption, redeem,
purchase or otherwise acquire for consideration any Common
Shares or any other shares of the Fund ranking junior to
the Series D Preferred Shares as to the payment of
dividends and the distribution of assets upon liquidation
(except by conversion into or exchange for shares of the
Fund ranking junior to the Series D Preferred Shares as to
dividends and distributions and upon liquidation), unless,
in each case, (A) immediately thereafter, the aggregate
Adjusted Value of the Fund's Moody's Eligible Assets shall
equal or exceed the Basic Maintenance Amount and the Fund
shall have Asset Coverage, (B) all cumulative dividends and
distributions on all Series D Preferred Shares due on or
prior to the date of the transaction have been declared and
paid (or shall have been declared and sufficient funds for
the payment thereof deposited with the applicable Dividend-
Disbursing Agent) and (C) the Fund has redeemed the full
number of Series D Preferred Shares to be redeemed
mandatorily pursuant to any provision contained herein for
mandatory redemption.

(iii)           Any dividend payment made on the
Series D Preferred Shares shall first be credited against
the dividends and distributions accumulated with respect to
the earliest Dividend Period for which dividends and
distributions have not been paid.

(c)    Not later than the Business Day immediately
preceding each Dividend Payment Date, the Fund shall
deposit with the Dividend-Disbursing Agent Deposit Assets
having an initial combined value sufficient to pay the
dividends and distributions that are payable on such
Dividend Payment Date, which Deposit Assets shall mature on
or prior to such Dividend Payment Date.  The Fund may
direct the Dividend-Disbursing Agent with respect to the
investment of any such Deposit Assets, provided that such
investment consists exclusively of Deposit Assets and
provided further that the proceeds of any such investment
will be available at the opening of business on such
Dividend Payment Date.

2.     Liquidation Rights.

(a)   In the event of any liquidation, dissolution or
winding up of the affairs of the Fund, whether voluntary or
involuntary, the holders of Series D Preferred Shares shall
be entitled to receive out of the assets of the Fund
available for distribution to shareholders, after
satisfying claims of creditors but before any distribution
or payment shall be made in respect of the Common Shares or
any other shares of the Fund ranking junior to the Series D
Preferred Shares as to liquidation payments, a liquidation
distribution in the amount of $25.00 per share (the
"Liquidation Preference"), plus an amount equal to all
unpaid dividends and distributions accumulated to and
including the date fixed for such distribution or payment
(whether or not earned or declared by the Fund, but
excluding interest thereon), and such holders shall be
entitled to no further participation in any distribution or
payment in connection with any such liquidation,
dissolution or winding up.

(b)   If, upon any liquidation, dissolution or winding
up of the affairs of the Fund, whether voluntary or
involuntary, the assets of the Fund available for
distribution among the holders of all Outstanding Series D
Preferred Shares, and any other Outstanding class or series
of Preferred Shares of the Fund ranking on a parity with
the Series D Preferred Shares as to payment upon
liquidation, shall be insufficient to permit the payment in
full to such holders of Series D Preferred Shares of the
Liquidation Preference plus accumulated and unpaid
dividends and distributions and the amounts due upon
liquidation with respect to such other Preferred Shares,
then such available assets shall be distributed among the
holders of Series D Preferred Shares and such other
Preferred Shares ratably in proportion to the respective
preferential liquidation amounts to which they are
entitled.  Unless and until the Liquidation Preference plus
accumulated and unpaid dividends and distributions has been
paid in full to the holders of Series D Preferred Shares,
no dividends or distributions will be made to holders of
the Common Shares or any other shares of the Fund ranking
junior to the Series D Preferred Shares as to liquidation.

3.     Redemption.

The Series D Preferred Shares shall be redeemed by the
Fund as provided below:

(a)   Mandatory Redemptions.

If the Fund is required to redeem any Preferred Shares
(which may include Series D Preferred Shares) pursuant to
paragraphs 5(b) or 5(c) of Part II hereof, then the Fund
shall, to the extent permitted by the 1940 Act and Delaware
law, by the close of business on such Series D Asset
Coverage Cure Date or Basic Maintenance Amount Cure Date
(herein collectively referred to as a "Cure Date"), as the
case may be, fix a redemption date and proceed to redeem
shares as set forth in paragraph 3(c) hereof.  On such
redemption date, the Fund shall redeem, out of funds
legally available therefor, the number of Preferred Shares,
which, to the extent permitted by the 1940 Act and Delaware
law, at the option of the Fund may include any proportion
of Series D Preferred Shares or any other series of
Preferred Shares, equal to the minimum number of shares the
redemption of which, if such redemption had occurred
immediately prior to the opening of business on such Cure
Date, would have resulted in the Fund having Asset Coverage
or an Adjusted Value of its Moody's Eligible Assets equal
to or greater than the Basic Maintenance Amount, as the
case may be, immediately prior to the opening of business
on such Cure Date or, if Asset Coverage or an Adjusted
Value of its Eligible Assets equal to or greater than the
Basic Maintenance Amount, as the case may be, cannot be so
restored, all of the Outstanding Series D Preferred Shares,
at a price equal to $25.00 per share plus accumulated but
unpaid dividends and distributions (whether or not earned
or declared by the Fund) through the date of redemption
(the "Redemption Price").  In the event that Preferred
Shares are redeemed pursuant to paragraphs 5(b) or 5(c) of
Part II hereof, the Fund may, but is not required to,
redeem a sufficient number of Series D Preferred Shares
pursuant to this paragraph 3(a) which, when aggregated with
other Preferred Shares redeemed by the Fund, permits the
Fund to have with respect to the Preferred Shares
(including the Series D Preferred Shares) remaining
Outstanding after such redemption (i) Asset Coverage of as
much as 220% and (ii) Moody's Eligible Assets with Adjusted
Value of as great as 110% of the Basic Maintenance Amount.
In the event that all of the Series D Preferred Shares then
Outstanding are required to be redeemed pursuant to
paragraph 5 of Part II hereof, the Fund shall redeem such
shares at the Redemption Price and proceed to do so as set
forth in paragraph 3(c) hereof.

(b)   Optional Redemptions.

Prior to November 3, 2010 the Series D Preferred
Shares are not subject to optional redemption by the Fund
unless such redemption is necessary, in the judgment of the
Board of Trustees, to maintain the Fund's status as a
regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended.  Commencing
November 3, 2010 and thereafter, and prior thereto to the
extent necessary to maintain the Fund's status as a
regulated investment company under Subchapter M of the
Internal Revenue Code of 1986, as amended, to the extent
permitted by the 1940 Act and Delaware law, the Fund may at
any time upon Notice of Redemption redeem the Series D
Preferred Shares in whole or in part at the Redemption
Price per share, which notice shall specify a redemption
date of not fewer than 15 days nor more than 40 days after
the date of such notice.

(c)   Procedures for Redemption.

(i)             If the Fund shall determine or be
required to redeem Series D Preferred Shares pursuant to
this paragraph 3, it shall mail a written notice of
redemption ("Notice of Redemption") with respect to such
redemption by first class mail, postage prepaid, to each
holder of the shares to be redeemed at such holder's
address as the same appears on the stock books of the Fund
on the close of business on such date as the Board of
Trustees may determine, which date shall not be earlier
than the second Business Day prior to the date upon which
such Notice of Redemption is mailed to the holders of
Series D Preferred Shares.  Each such Notice of Redemption
shall state:  (A) the redemption date as established by the
Board of Trustees; (B) the number of Series D Preferred
Shares to be redeemed; (C) the CUSIP number(s) of such
shares; (D) the Redemption Price; (E) the place or places
where the certificate(s) for such shares (properly endorsed
or assigned for transfer, if the Board of Trustees shall so
require and the Notice of Redemption shall so state) are to
be surrendered for payment in respect of such redemption;
(F) that dividends and distributions on the shares to be
redeemed will cease to accrue on such redemption date;
(G) the provisions of this paragraph 3 under which such
redemption is made; and (H) in the case of a redemption
pursuant to paragraph 3(b), any conditions precedent to
such redemption.  If fewer than all Series D Preferred
Shares held by any holder are to be redeemed, the Notice of
Redemption mailed to such holder also shall specify the
number or percentage of shares to be redeemed from such
holder.  No defect in the Notice of Redemption or the
mailing thereof shall affect the validity of the redemption
proceedings, except as required by applicable law.

(ii)           If the Fund shall give a Notice of
Redemption, then by the close of business on the Business
Day preceding the redemption date specified in the Notice
of Redemption (so long as any conditions precedent to such
redemption have been met) or, if the Dividend-Disbursing
Agent so agrees, another date not later than the redemption
date, the Fund shall (A) deposit with the Dividend-
Disbursing Agent Deposit Assets that shall mature on or
prior to such redemption date having an initial combined
value sufficient to effect the redemption of the Series D
Preferred Shares to be redeemed and (B) give the Dividend-
Disbursing Agent irrevocable instructions and authority to
pay the Redemption Price to the holders of the Series D
Preferred Shares called for redemption on the redemption
date.  The Fund may direct the Dividend-Disbursing Agent
with respect to the investment of any Deposit Assets so
deposited provided that the proceeds of any such investment
will be available at the opening of business on such
redemption date.  Upon the date of such deposit (unless the
Fund shall default in making payment of the Redemption
Price), all rights of the holders of the Series D Preferred
Shares so called for redemption shall cease and terminate
except the right of the holders thereof to receive the
Redemption Price thereof and such shares shall no longer be
deemed Outstanding for any purpose.  The Fund shall be
entitled to receive, promptly after the date fixed for
redemption any cash in excess of the aggregate Redemption
Price of the Series D Preferred Shares called for
redemption on such date and any remaining Deposit Assets.
Any assets so deposited that are unclaimed at the end of
two years from such redemption date shall, to the extent
permitted by law, be repaid to the Fund, after which the
holders of the Series D Preferred Shares so called for
redemption shall look only to the Fund for payment of the
Redemption Price thereof.  The Fund shall be entitled to
receive, from time to time after the date fixed for
redemption, any interest on the Deposit Assets so
deposited.

(iii)          On or after the redemption date,
each holder of Series D Preferred Shares that are subject
to redemption shall surrender the certificate evidencing
such shares to the Fund at the place designated in the
Notice of Redemption and shall then be entitled to receive
the cash Redemption Price, without interest.

(iv)          In the case of any redemption of
less than all of the Series D Preferred Shares pursuant to
this Statement of Preferences, such redemption shall be
made pro rata from each holder of Series D Preferred Shares
in accordance with the respective number of shares held by
each such holder on the record date for such redemption.

(v)           Notwithstanding the other
provisions of this paragraph 3, the Fund shall not redeem
Series D Preferred Shares unless all accumulated and unpaid
dividends and distributions on all Outstanding Series D
Preferred Shares and other Preferred Shares ranking on a
parity with the Series D Preferred Shares with respect to
dividends and distributions for all applicable past
Dividend Periods (whether or not earned or declared by the
Fund) shall have been or are contemporaneously paid or
declared and Deposit Assets for the payment of such
dividends and distributions shall have been deposited with
the Dividend-Disbursing Agent as set forth in paragraph
1(c) of Part II hereof, provided, however, that the
foregoing shall not prevent the purchase or acquisition of
outstanding Preferred Shares pursuant to the successful
completion of an otherwise lawful purchase or exchange
offer made on the same terms to holders of all Outstanding
Series D Preferred Shares.

If the Fund shall not have funds legally available for
the redemption of, or is otherwise unable to redeem, all
the Series D Preferred Shares or other Preferred Shares
designated to be redeemed on any redemption date, the Fund
shall redeem on such redemption date the number of Series D
Preferred Shares and other Preferred Shares so designated
as it shall have legally available funds, or is otherwise
able, to redeem ratably on the basis of the Redemption
Price from each holder whose shares are to be redeemed, and
the remainder of the Series D Preferred Shares and other
Preferred Shares designated to be redeemed shall be
redeemed on the earliest practicable date on which the Fund
shall have funds legally available for the redemption of,
or is otherwise able to redeem, such shares upon Notice of
Redemption.

4.     Voting Rights.

(a)    General.

Except as otherwise provided in the Governing
Documents or a resolution of the Board of Trustees, or as
required by applicable law, holders of Series D Preferred
Shares shall have no power to vote on any matter except
matters submitted to a vote of the Common Shares.  In any
matter submitted to a vote of the holders of the Common
Shares, each holder of Series D Preferred Shares shall be
entitled to one vote for each Series D Preferred Share held
and the holders of the Outstanding Preferred Shares,
including Series D Preferred Shares, and the Common Shares
shall vote together as a single class; provided, however,
that at any meeting of the shareholders of the Fund held
for the election of Trustees, the holders of the
Outstanding Preferred Shares, including Series D Preferred
Shares, shall be entitled, as a class, to the exclusion of
the holders of all other securities and classes of capital
shares of the Fund, to elect a number of Fund's Trustees,
such that following the election of Trustees at the meeting
of the shareholders, the Fund's Board of Trustees shall
contain two Trustees elected by the holders of the
Outstanding Preferred Shares, including the Series D
Preferred Shares. Subject to paragraph 4(b) of Part II
hereof, the holders of the outstanding capital shares of
the Fund, including the holders of Outstanding Preferred
Shares, including the Series D Preferred Shares, voting as
a single class, shall elect the balance of the trustees.

(b)   Right to Elect Majority of Board of Trustees.

During any period in which any one or more of the
conditions described below shall exist (such period being
referred to herein as a "Voting Period"), the number and/or
composition of trustees constituting the Board of Trustees
shall be adjusted as necessary to permit the holders of
Outstanding Preferred Shares, including the Series D
Preferred Shares, voting separately as one class (to the
exclusion of the holders of all other securities and
classes of capital shares of the Fund) to elect the number
of trustees that, when added to the two trustees elected
exclusively by the holders of Preferred Shares pursuant to
paragraph 4(a) above, would constitute a simple majority of
the Board of Trustees as so adjusted.  The Fund and the
Board of Trustees shall take all necessary actions,
including effecting the removal of trustees or amendment of
the Fund's Declaration, to effect an adjustment of the
number and/or composition of trustees as described in the
preceding sentence.  A Voting Period shall commence:

(i)            if at any time accumulated
dividends and distributions (whether or not earned or
declared, and whether or not funds are then legally
available in an amount sufficient therefor) on the
Outstanding Series D Preferred Shares equal to at least two
full years' dividends and distributions shall be due and
unpaid and sufficient cash or specified securities shall
not have been deposited with the Dividend-Disbursing Agent
for the payment of such accumulated dividends and
distributions; or

(ii)           if at any time Holders of any
other Preferred Shares are entitled to elect a majority of
the Trustees of the Fund under the 1940 Act or Statement of
Preferences creating such shares.

Upon the termination of a Voting Period, the voting
rights described in this paragraph 4(b) shall cease,
subject always, however, to the reverting of such voting
rights in the holders of Preferred Shares upon the further
occurrence of any of the events described in this paragraph
4(b).

(c)   Right to Vote with Respect to Certain Other
Matters.

Subject to paragraph 1 of Part III of this Statement
of Preferences, so long as any Series D Preferred Shares
are Outstanding, the Fund shall not, without the
affirmative vote of the holders of a majority (as defined
in the 1940 Act) of the Preferred Shares Outstanding at the
time and present and voting on such matter, voting
separately as one class, amend, alter or repeal the
provisions of this Statement of Preferences so as to in the
aggregate adversely affect the rights and preferences set
forth in any Statement of Preferences, including the
Series D Preferred Shares.  To the extent permitted under
the 1940 Act, in the event that more than one series of
Preferred Shares are Outstanding, the Fund shall not effect
any of the actions set forth in the preceding sentence
which in the aggregate adversely affects the rights and
preferences set forth in the Statement of Preferences for a
series of Preferred Shares differently than such rights and
preferences for any other series of Preferred Shares
without the affirmative vote of the holders of at least a
majority of the Preferred Shares Outstanding and present
and voting on such matter of each series adversely affected
(each such adversely affected series voting separately as a
class to the extent its rights are affected differently).
The holders of the Series D Preferred Shares shall not be
entitled to vote on any matter that affects the rights or
interests of only one or more other series of Preferred
Shares.  The Fund shall notify Moody's ten Business Days
prior to any such vote described above.  Unless a higher
percentage is required under the Governing Documents or
applicable provisions of the Delaware Statutory Fund Act or
the 1940 Act, the affirmative vote of the holders of a
majority of the Outstanding Preferred Shares, including
Series D Preferred Shares, voting together as a single
class, will be required to approve any plan of
reorganization adversely affecting the Preferred Shares or
any action requiring a vote of security holders under
Section 13(a) of the 1940 Act.  For purposes of this
paragraph 4(c), the phrase "vote of the holders of a
majority of the Outstanding Preferred Shares" (or any like
phrase) shall mean, in accordance with Section 2(a)(42) of
the 1940 Act, the vote, at the annual or a special meeting
of the shareholders of the Fund duly called (i) of 67
percent or more of the Preferred Shares present at such
meeting, if the holders of more than 50 percent of the
Outstanding Preferred Shares are present or represented by
proxy; or (ii) of more than 50 percent of the Outstanding
Preferred Shares, whichever is less.  The class vote of
holders of Preferred Shares described above will in each
case be in addition to a separate vote of the requisite
percentage of Common Shares and Preferred Shares, including
Series D Preferred Shares, voting together as a single
class, necessary to authorize the action in question.  An
increase in the number of authorized Preferred Shares
pursuant to the Governing Documents or the issuance of
additional shares of any series of Preferred Shares
(including Series D Preferred Shares) pursuant to the
Governing Documents shall not in and of itself be
considered to adversely affect the rights and preferences
of the Preferred Shares.

(d)   Voting Procedures.

(i)            As soon as practicable after the
accrual of any right of the holders of Preferred Shares to
elect additional trustees as described in paragraph
4(b) above, the Fund shall call a special meeting of such
holders and instruct the Dividend-Disbursing Agent to mail
a notice of such special meeting to such holders, such
meeting to be held not less than 10 nor more than 20 days
after the date of mailing of such notice.  If the Fund
fails to send such notice to the Dividend-Disbursing Agent
or if the Fund does not call such a special meeting, it may
be called by any such holder on like notice.  The record
date for determining the holders entitled to notice of and
to vote at such special meeting shall be the close of
business on the day on which such notice is mailed or such
other date as the Board of Trustees shall determine.  At
any such special meeting and at each meeting held during a
Voting Period, such holders of Preferred Shares, voting
together as a class (to the exclusion of the holders of all
other securities and classes of capital shares of the
Fund), shall be entitled to elect the number of trustees
prescribed in paragraph 4(b) above on a one-vote-per-share
basis.  At any such meeting, or adjournment thereof in the
absence of a quorum, a majority of such holders present in
person or by proxy shall have the power to adjourn the
meeting without notice, other than by an announcement at
the meeting, to a date not more than 120 days after the
original record date.

(ii)           For purposes of determining any
rights of the holders of Series D Preferred Shares to vote
on any matter or the number of shares required to
constitute a quorum, whether such right is created by this
Statement of Preferences, by the other provisions of the
Governing Documents, by statute or otherwise, any Series D
Preferred Share which is not Outstanding shall not be
counted.

(iii)          The terms of office of all persons
who are trustees of the Fund at the time of a special
meeting of holders of Preferred Shares to elect trustees
and who remain trustees following such meeting shall
continue, notwithstanding the election at such meeting by
such holders of the number of trustees that they are
entitled to elect, and the persons so elected by such
holders, together with the two incumbent trustees elected
by the holders of Preferred Shares, and the remaining
incumbent trustees elected by the holders of the Common
Shares and Preferred Shares, shall constitute the duly
elected trustees of the Fund.

(iv)          Upon the expiration of a Voting
Period, the terms of office of the additional trustees
elected by the holders of Preferred Shares pursuant to
paragraph 4(b) above shall expire at the earliest time
permitted by law, and the remaining trustees shall
constitute the trustees of the Fund and the voting rights
of such holders of Preferred Shares, including Series D
Preferred Shares, to elect additional trustees pursuant to
paragraph 4(b) above shall cease, subject to the provisions
of the last sentence of paragraph 4(b).  Upon the
expiration of the terms of the trustees elected by the
holders of Preferred

Shares pursuant to paragraph 4(b) above, the number of
trustees shall be automatically reduced to the number of
trustees on the Board immediately preceding such Voting
Period.

(e)    Exclusive Remedy.

Unless otherwise required by law, the holders of
Series D Preferred Shares shall not have any rights or
preferences other than those specifically set forth
herein.  The holders of Series D Preferred Shares shall
have no preemptive rights or rights to cumulative voting.
In the event that the Fund fails to pay any dividends and
distributions on the Series D Preferred Shares, the
exclusive remedy of the holders shall be the right to vote
for trustees pursuant to the provisions of this paragraph
4.

(f)    Notification to Moody's.

In the event a vote of holders of Series D Preferred
Shares is required pursuant to the provisions of
Section 13(a) of the 1940 Act, as long as the Series D
Preferred Shares are rated by Moody's at the Fund's
request, the Fund shall, not later than ten Business Days
prior to the date on which such vote is to be taken, notify
Moody's that such vote is to be taken and the nature of the
action with respect to which such vote is to be taken and,
not later than ten Business Days after the date on which
such vote is taken, notify Moody's of the result of such
vote.

5.     Coverage Tests.

(a)   Determination of Compliance.

For so long as any Series D Preferred Shares are
Outstanding, the Fund shall make the following
determinations:

(i)            Asset Coverage.  The Fund shall
have Asset Coverage as of the last Business Day of each
March, June, September and December of each year in which
any Series D Preferred Shares are Outstanding.

(ii)           Basic Maintenance Amount
Requirement.

(A)           For so long as any Series D
Preferred Shares are Outstanding and are rated by Moody's
at the Fund's request, the Fund shall maintain, on each
Valuation Date, Moody's Eligible Assets having an Adjusted
Value at least equal to the Basic Maintenance Amount, each
as of such Valuation Date.  Upon any failure to maintain
Moody's Eligible Assets having an Adjusted Value at least
equal to the Basic Maintenance Amount, the Fund shall use
all commercially reasonable efforts to retain Moody's
Eligible Assets having an Adjusted Value at least equal to
the Basic Maintenance Amount on or prior to the Basic
Maintenance Amount Cure Date, by altering the composition
of its portfolio or otherwise.

(B)          The Administrator shall prepare a
Basic Maintenance Report relating to each Valuation Date.
On or before 5:00 P.M., New York City time, on the fifth
Business Day after the first Valuation Date following the
Date of Original Issue of the Series D Preferred Shares and
after each (1) Annual Valuation Date, (2) Valuation Date on
which the Fund fails to satisfy the requirements of
paragraph 5(a)(ii)(A) above, (3) Basic Maintenance Amount
Cure Date following a Valuation Date on which the Fund
fails to satisfy the requirements of paragraph
5(a)(ii)(A) above and (4) Valuation Date and any
immediately succeeding Business Day on which the Adjusted
Value of the Fund's Moody's Eligible Assets exceeds the
Basic Maintenance Amount by 5% or less, the Fund shall
complete and deliver to Moody's a Basic Maintenance Report,
which will be deemed to have been delivered to Moody's if
Moody's receives a copy or telecopy, telex or other
electronic transcription or transmission of the Basic
Maintenance Report and on the same day the Fund mails to
Moody's for delivery on the next Business Day the Basic
Maintenance Report.  A failure by the Fund to deliver a
Basic Maintenance Report under this paragraph
5(a)(ii)(B) shall be deemed to be delivery of a Basic
Maintenance Report indicating an Adjusted Value of the
Fund's Moody's Eligible Assets less than the Basic
Maintenance Amount, as of the relevant Valuation Date.

(C)          Within thirty (30) Business Days
after the date of delivery to Moody's of a Basic
Maintenance Report in accordance with paragraph
5(a)(ii)(B) above relating to an Annual Valuation Date, the
Fund shall deliver to Moody's an Accountant's Confirmation
relating to such Basic Maintenance Report that was prepared
by the Fund during the quarter ending on such Annual
Valuation Date.  Also, within fifteen (15) Business Days
after the date of delivery to Moody's of a Basic
Maintenance Report in accordance with paragraph
5(a)(ii)(B) above relating to a Valuation Date on which the
Fund fails to satisfy the requirements of paragraph
5(a)(ii)(A) and any Basic Maintenance Amount Cure Date, the
Fund shall deliver to Moody's an Accountant's Confirmation
relating to such Basic Maintenance Report.

(D)          In the event the Adjusted Value of
the Fund's Moody's Eligible Assets shown in any Basic
Maintenance Report prepared pursuant to paragraph
5(a)(ii)(B) above is less than the applicable Basic
Maintenance Amount, the Fund shall have until the Basic
Maintenance Amount Cure Date to achieve an Adjusted Value
of the Fund's Moody's Eligible Assets at least equal to the
Basic Maintenance Amount, and upon such achievement (and
not later than such Basic Maintenance Amount Cure Date) the
Fund shall inform Moody's of such achievement in writing by
delivery of a revised Basic Maintenance Report showing an
Adjusted Value of the Fund's Moody's Eligible Assets at
least equal to the Basic Maintenance Amount as of the date
of such revised Basic Maintenance Report.

(E)           On or before 5:00 P.M., New York
City time, on no later than the fifth Business Day after
the next Valuation Date following each date on which the
Fund has repurchased more than 1% of its Common Shares
since the most recent date of delivery of a Basic
Maintenance Report, the Fund shall complete and deliver to
Moody's a Basic Maintenance Report.  A Basic Maintenance
Report delivered as provided in paragraph 5(a)(ii)(B) above
also shall be deemed to have been delivered pursuant to
this paragraph 5(a)(ii)(E).

(b)    Failure to Meet Asset Coverage.

If the Fund fails to have Asset Coverage as provided
in paragraph 5(a)(i) hereof and such failure is not cured
as of the related Series D Asset Coverage Cure Date,
(i) the Fund shall give a Notice of Redemption as described
in paragraph 3 of Part II hereof with respect to the
redemption of a sufficient number of Preferred Shares,
which at the Fund's determination (to the extent permitted
by the 1940 Act and Delaware law) may include any
proportion of Series D Preferred Shares, to enable it to
meet the requirements of paragraph 5(a)(i) above, and, at
the Fund's discretion, such additional number of Series D
Preferred Shares or other Preferred Shares in order that
the Fund have Asset Coverage with respect to the Series D
Preferred Shares and any other Preferred Shares remaining
Outstanding after such redemption as great as 220%, and
(ii) deposit with the Dividend-Disbursing Agent Deposit
Securities having an initial combined value sufficient to
effect the redemption of the Series D Preferred Shares or
other Preferred Shares to be redeemed, as contemplated by
paragraph 3 of Part II hereof.

(c)   Failure to Maintain Moody's Eligible Assets
having an Adjusted Value at Least Equal to the Basic
Maintenance Amount.

If the Fund fails to have Moody's Eligible Assets
having an Adjusted Value at least equal to the Basic
Maintenance Amount as provided in paragraph
5(a)(ii)(A) above and such failure is not cured, the Fund
shall, on or prior to the Basic Maintenance Amount Cure
Date, (i) give a Notice of Redemption as described in
paragraph 3 of Part II hereof with respect to the
redemption of a sufficient number of Series D Preferred
Shares or other Preferred Shares to enable it to meet the
requirements of paragraph 5(a)(ii)(A) above, and, at the
Fund's discretion, such additional number of Series D
Preferred Shares or other Preferred Shares in order that
the Fund have Adjusted Assets with respect to the remaining
Series D Preferred Shares and any other Preferred Shares
remaining Outstanding after such redemption as great as
110% of the Basic Maintenance Amount, and (ii) deposit with
the Dividend-Disbursing Agent Deposit Assets having an
initial combined value sufficient to effect the redemption
of the Series D Preferred Shares or other Preferred Shares
to be redeemed, as contemplated by paragraph 3 of Part II
hereof.

(d)    Status of Shares Called for Redemption.

For purposes of determining whether the requirements
of paragraphs 5(a)(i) and 5(a)(ii)(A) hereof are satisfied,
(i) no Series D Preferred Share shall be deemed to be
Outstanding for purposes of any computation if, prior to or
concurrently with such determination, sufficient Deposit
Assets to pay the full Redemption Price for such share
shall have been deposited in Fund with the Dividend-
Disbursing Agent (or applicable paying agent) and the
requisite Notice of Redemption shall have been given, and
(ii) such Deposit Assets deposited with the Dividend-
Disbursing Agent (or paying agent) shall not be included.

6.     Certain Other Restrictions.

(a)   For so long as the Series D Preferred Shares are
rated by Moody's at the request of the Fund, the Fund will
not, and will cause the Adviser not to, (i) knowingly and
willfully purchase or sell any asset for the specific
purpose of causing, and with the actual knowledge that the
effect of such purchase or sale will be to cause, the Fund
to have Moody's Eligible Assets having an Adjusted Value as
of the date of such purchase or sale to be less than the
Basic Maintenance Amount as of such date, (ii) in the event
that, as of the immediately preceding Valuation Date, the
Adjusted Value of the Fund's Moody's Eligible Assets
exceeded the Basic Maintenance Amount by 5% or less, alter
the composition of the Fund's assets in a manner reasonably
expected to reduce the Adjusted Value of the Fund's Moody's
Eligible Assets, unless the Fund shall have confirmed that,
after giving effect to such alteration, the Adjusted Value
of the Fund's Moody's Eligible Assets exceeded the Basic
Maintenance Amount or (iii) declare or pay any dividend or
other distribution on any Common Shares or repurchase any
Common Shares, unless the Fund shall have confirmed that,
after giving effect to such declaration, other distribution
or repurchase, the Fund continued to satisfy the
requirements of paragraph 5(a)(ii)(A) of Part II hereof.

(b)   For so long as the Series D Preferred Shares are
rated by Moody's at the request of the Fund, unless the
Fund shall have received written confirmation from Moody's,
the Fund may engage in the lending of its portfolio
securities only in an amount of up to 20% of the Fund's
total assets, provided that the Fund receives cash
collateral for such loaned securities which is maintained
at all times in an amount equal to at least 100% of the
current market value of the loaned securities and, if
invested, is invested only in Short-Term Money Market
Investments or in money market mutual funds meeting the
requirements of Rule 2a-7 under the 1940 Act that maintain
a constant $1.00 per share net asset value and treat the
loaned securities rather than the collateral as the assets
of the Fund for purposes of determining compliance with
paragraph 5 of Part II hereof.

(c)   For so long as the Series D Preferred Shares are
rated by Moody's at the request of the Fund, the Fund shall
not consolidate the Fund with, merge the Fund into, sell or
otherwise transfer all or substantially all of the Fund's
assets to another Person or adopt a plan of liquidation of
the Fund, in each case without providing prior written
notification to Moody's.

7.     Limitation on Incurrence of Additional
Indebtedness and Issuance of Additional Preferred Shares

(a)   So long as any Series D Preferred Shares are
Outstanding the Fund may issue and sell one or more series
of a class of senior securities of the Fund representing
indebtedness under Section 18 of the 1940 Act and/or
otherwise create or incur indebtedness, provided that
immediately after giving effect to the incurrence of such
indebtedness and to its receipt and application of the
proceeds thereof, the Fund shall have an "asset coverage"
for all senior securities representing indebtedness, as
defined in Section 18(h) of the 1940 Act, of at least 300%
of the amount of all indebtedness of the Fund then
outstanding and no such additional indebtedness shall have
any preference or priority over any other indebtedness of
the Fund upon the distribution of the assets of the Fund or
in respect of the payment of interest.  Any possible
liability resulting from lending and/or borrowing portfolio
securities, entering into reverse repurchase agreements,
entering into futures contracts and writing options, to the
extent such transactions are made in accordance with the
investment restrictions of the Fund then in effect, shall
not be considered to be indebtedness limited by this
paragraph 7(a).

(b)   So long as any Series D Preferred Shares are
Outstanding, the Fund may issue and sell shares of one or
more other series of Preferred Shares constituting a series
of a class of senior securities of the Fund representing
stock under Section 18 of the 1940 Act in addition to the
Series D Preferred Shares, provided that (i) the Fund
shall, immediately after giving effect to the issuance of
such additional Preferred Shares and to its receipt and
application of the proceeds thereof, including, without
limitation, to the redemption of Preferred Shares for which
a Redemption Notice has been mailed prior to such issuance,
have an "asset coverage" for all senior securities which
are stock, as defined in Section 18(h) of the 1940 Act, of
at least 200% of the sum of the liquidation preference of
the Series D Preferred Shares and all other Preferred
Shares of the Fund then Outstanding, and (ii) no such
additional Preferred Shares shall have any preference or
priority over any other Preferred Shares of the Fund upon
the distribution of the assets of the Fund or in respect of
the payment of dividends.

8.     Status of Redeemed or Repurchased Series D
Preferred

Series D Preferred Shares which at any time have been
redeemed or purchased by the Fund shall, after such
redemption or purchase, have the status of authorized but
unissued  Preferred Shares.

PART III

ABILITY OF BOARD OF TRUSTEES TO MODIFY THE STATEMENT OF
PREFERENCES

1.     Modification  to Prevent Ratings Reduction or
Withdrawal.

The Board of Trustees, without further action by the
shareholders, may amend, alter, add to or repeal any
provision of this Statement of Preferences including
provisions that have been adopted by the Fund pursuant to
the Rating Agency guidelines, if the Board of Trustees
determines that such amendments or modifications are
necessary to prevent a reduction in, or the withdrawal of,
a rating of the Preferred Shares and are in the aggregate
in the best interests of the holders of the Preferred
Shares.

2.     Other Modification.

The Board of Trustees, without further action by the
shareholders, may amend, alter, add to or repeal any
provision of this Statement of Preferences including
provisions that have been adopted by the Fund pursuant to
the rating agency guidelines, if the Board of Trustees
determines that such amendments or modifications will not
in the aggregate adversely affect the rights and
preferences of the holders of any series of the Preferred
Shares, provided, that the Fund has received advice from
each applicable Rating Agency that such amendment or
modification is not expected to adversely affect such
Rating Agency's then-current rating of such series of the
Fund's Preferred Shares.

Notwithstanding the provisions of the preceding
paragraph, to the extent permitted by law, the Board of
Trustees, without the vote of the holders of the Series D
Preferred Shares or any other capital shares of the Fund,
may amend the provisions of this Statement of Preferences
to resolve any inconsistency or ambiguity or to remedy any
formal defect so long as the amendment does not in the
aggregate adversely affect the rights and preferences of
the Series D Preferred Shares.

IN WITNESS WHEREOF, The Gabelli Dividend & Income
Trust has caused these presents to be signed in its name
and on its behalf by a duly authorized officer, and its
corporate seal to be hereunto affixed and attested by its
Secretary, and the said officers of the Fund further
acknowledge said instrument to be the corporate act of the
Fund, and state that to the best of their knowledge,
information and belief under penalty of perjury the matters
and facts herein set forth with respect to approval are
true in all material respects, all as of November    , 2005.



By:
Name: Bruce N. Alpert
Title: President

Attest:
Name: James E. McKee
Title: Secretary


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