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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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