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<TYPE>EX-99
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<FILENAME>s462455a.txt
<DESCRIPTION>EXHIBIT (A)(II)
<TEXT>


                           THE GABELLI UTILITY TRUST

                           STATEMENT OF PREFERENCES

                                      OF

                  5.625% SERIES A CUMULATIVE PREFERRED SHARES

         The Gabelli Utility Trust, a Delaware statutory trust (hereinafter
called the "Trust"), hereby certifies that:

         FIRST: The Board of Trustees of the Trust, at a meeting duly convened
and held on February 19, 2003, pursuant to authority expressly vested in it by
Article III of the Agreement and Declaration of Trust, adopted resolutions
classifying and designating 2,000,000 authorized but unissued capital shares
of the Trust, par value $.001 per share, as "5.625% Series A Cumulative
Preferred Shares" and authorizing the issuance of up to 2,000,000 shares of
5.625% Series A Cumulative Preferred Shares at such times as the Pricing
Committee should determine.

         SECOND: The Pricing Committee, at a meeting duly convened and held on
July 22, 2003, pursuant to authority granted it by the Board of Trustees of
the Trust at its February 19, 2003 meeting, approved the issuance by the Trust
of up to 1,200,000 5.625% Series A Cumulative Preferred Shares.

         THIRD: The preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the 5.625% Series A Cumulative Preferred Shares, par value $.001
per share, as set by the Board of Trustees are as follows:

                                    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 Moody's and S&P 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
               Trust, 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 Trust;

         (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
               Trust'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 Trust'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 Trust 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; and

         (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 Trust 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 Trust.

         "Annual Valuation Date" means the Valuation Date each calendar year
so designated by the Trust, 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 Trust which are stock, including all
Outstanding Series A 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 (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 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 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 Trust's other liabilities due and payable as of such Valuation Date
(except that dividends and other distributions payable by the Trust on Common
Shares shall not be included as a liability) and such liabilities projected to
become due and payable by the Trust 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 Trust 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 Trust 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 Trust's assets or (ii) the face
value of any of the Trust'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 Trust's custodian bank in a segregated account or deposited by the
Trust 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 Trust
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 Trust 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 A Preferred Shares, 10 Business Days following a Valuation Date, such
date being the last day upon which the Trust'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 A 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 Trust 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 Trust as amended from time to
time.

         "Common Shares" means the common shares, par value $.001 per share,
of the Trust.

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

         "Date of Original Issue" means July 31, 2003, 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 Agreement and Declaration of Trust of the
Trust, dated as of February 25, 1999, 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 Trust).

         "Deposit Assets" means cash, Short-Term Money Market Instruments and
U.S. Government Obligations. Except for determining whether the Trust 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 A
Preferred Shares, EquiServe Trust Company, N.A. and its successors or any
other dividend-disbursing agent appointed by the Trust and, with respect to
any other class or series of Preferred Shares, the Person appointed by the
Trust as dividend-disbursing or paying agent with respect to such class or
series.

         "Dividend Payment Date" means with respect to the Series A Preferred
Shares, any date on which dividends 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.

        "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 Trust 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 A
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 Trust 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 Trust with respect to any of its assets, mean the amount determined with
respect to specific Moody's Eligible Assets of the Trust 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 A 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 Trust 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 A 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 Trust 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;

         (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 A
               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
               Trust by any such means by such Administrator, plus (ii)
               accrued interest on such indebtedness.

         "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 A Preferred
Shares at the request of the Trust, "Moody's" shall be deemed to refer to any
other nationally recognized securities rating agency designated by the Trust.

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

                                                                   Moody's
Type of Moody's Eligible Asset:                               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               1.00
    Money Market Instruments..........................

    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                1.00
    days and counterparty is rated at least A2........

    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:

        Utility ......................................              1.70

        Industrial ...................................              2.64

        Financial ....................................              2.41

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

Convertible Preferred Stocks..........................              3.00

Preferred stocks:

    Auction rate preferred stocks.....................              3.50

    Other preferred stocks issued by issuers in the
    financial and industrial industries...............              2.09

    Other preferred stocks issued by issuers in the
    utilities industry................................              1.55

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 of 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:

    Non-convertible corporate debt rated Aaa 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

    Non-convertible corporate debt rated at least Aa3
    with remaining terms to maturity of:

        1 year or less................................              1.12

        2 years of 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

    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

    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

    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...............................              1.56

        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

    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...............................              1.86

        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

         Non-convertible unrated corporate debt of any              2.50
maturity .............................................

Convertible corporate debt securities rated at least
Aa3 issued by the following type of issuers:

    Utility...........................................            1.62-1.67

    Industrial........................................            2.56-2.61

    Financial.........................................            2.33-2.38

    Transportation....................................            2.50-2.65

Convertible corporate debt securities rated at least A3
issued by the following type of issuers:

    Utility...........................................              1.72

    Industrial........................................              2.66

    Financial.........................................              2.43

    Transportation....................................              2.75

Convertible corporate debt securities rated at least
Baa3 issued by the following type of issuers:

    Utility...........................................              1.88

    Industrial........................................              2.82

    Financial.........................................              2.59

    Transportation....................................              2.85

Convertible corporate debt securities rated at least
Ba3 issued by the following type of issuers:

    Utility...........................................              1.95

    Industrial........................................              2.90

    Financial.........................................              2.65

    Transportation....................................              2.90

Convertible corporate debt securities rated at least B2
issued by the following type of issuers:

    Utility...........................................              1.99

    Industrial........................................              2.93

    Financial.........................................              2.70

    Transportation....................................              2.95


        "Moody's Eligible Assets" means:

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

         (b)   Short-Term Money Market Instruments;

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

         (d)   preferred stocks (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 $50,000,000,
               (iv) which have paid cash dividends consistently during the
               preceding three-year period (or, in the case of new issues
               without a dividend history, are rated at least A1 by Moody's
               or, if not rated by Moody's, are rated at least AA- by S&P),
               (v) which pay cumulative cash dividends in U.S. dollars, (vi)
               which are not convertible into any other class of stock and do
               not have warrants attached, (vii) which are not issued by
               issuers in the transportation industry and (viii) in the case
               of auction rate preferred stocks, which are rated at least Aa3
               by Moody's, or if not rated by Moody's, AAA by S&P, AAA by
               Fitch or are otherwise approved in writing by Moody's and have
               never had a failed auction; provided, however, that for this
               purpose the aggregate Market Value of the Trust's holdings of
               any single issue of auction rate preferred stock shall not be
               more than 1% of the Trust'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 Trust;
               provided, however, that (y) common stock which, while a Moody's
               Eligible Asset owned by the Trust, 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 Trust'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 Trust'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
               Trust'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 Trust'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, the Netherlands, New
               Zealand, Norway, 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 Trust 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 BB- 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 Trust'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 BB 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 Trust'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 Trust'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 Trust 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 Trust'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 Trust's holdings:

Issuer:

                                          Non-Utility              Utility
                                         Maximum Single         Maximum Single
Moody's Rating(1)(2)                      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:

                                                   Utility
                                Non-Utility        Maximum           Utility
                              Maximum Single     Single Sub-      Maximum Single
Moody's Rating(1)               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 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 corporate,
               municipal or other debt security is unrated by Moody's, S&P or
               Fitch, the Trust will use the percentage set forth under "Below
               B and Unrated" 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 from
               $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 A 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 Trust 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 Trust 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 Trust except:

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

         (b)   any such Preferred Share, other than an auction rate Preferred
               Share, 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 Trust in trust for, or
               have been irrevocably deposited with the relevant disbursing
               agent for payment to, the holder of such share pursuant to the
               Statement of Preferences with respect thereto;

         (c)   in the case of an auction rate Preferred Share, any such share
               theretofore delivered to the auction agent for cancellation or
               with respect to which the Trust 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 Trust is the holder
will be disregarded and deemed not Outstanding, (ii) in connection with any
auction of Auction Market Preferred Shares as to which the Trust or any Person
known to the auction agent to be a subsidiary of the Trust is the holder will
be disregarded and not deemed Outstanding.

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

         "Preferred Shares" means the preferred shares, par value $.001 per
share, of the Trust, and includes the Series A 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 A Preferred Shares" means the 5.625% Series A Cumulative
Preferred Shares, par value $.001 per share, of the Trust.

         "Series A Asset Coverage Cure Date" means, with respect to the
failure by the Trust 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
Trust, 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
               trust 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.

         "Trust" means The Gabelli Utility Trust, a Delaware statutory trust.

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

         "Valuation Date" means the last Business Day of each month, or such
other date as the Trust 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 A PREFERRED SHARES

         1.    Dividends.

         (a) Holders of Series A 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 at the rate of 5.625%
per annum (computed on the basis of a 360-day year consisting of twelve 30-day
months) of the Liquidation Preference on the Series A 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 September 26, 2003
(or, if any such day is not a Business Day, then on the next succeeding
Business Day) to holders of record of Series A Preferred Shares as they appear
on the stock register of the Trust at the close of business on the fifth
preceding Business Day in preference to dividends on Common Shares and any
other capital shares of the Trust ranking junior to the Series A Preferred
Shares in payment of dividends. Dividends on Series A 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 on account of
arrears for any past Dividend Period or in connection with the redemption of
Series A 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 shall be declared or paid on Series A
Preferred Shares for any Dividend Period or part thereof unless full
cumulative dividends due through the most recent Dividend Payment Dates
therefor for all series of Preferred Shares of the Trust ranking on a parity
with the Series A Preferred Shares as to the payment of dividends have been or
contemporaneously are declared and paid through the most recent Dividend
Payment Dates therefor. If full cumulative dividends due have not been paid on
all such Outstanding Preferred Shares, any dividends being paid on such
Preferred Shares (including the Series A Preferred Shares) will be paid as
nearly pro rata as possible in proportion to the respective amounts of
dividends accumulated but unpaid on each such series of Preferred Shares on
the relevant Dividend Payment Date. No holders of Series A Preferred Shares
shall be entitled to any dividends, whether payable in cash, property or
shares, in excess of full cumulative dividends as provided in this paragraph
1(b)(i) on Series A Preferred Shares. No interest or sum of money in lieu of
interest shall be payable in respect of any dividend payments on any Series A
Preferred Shares that may be in arrears.

               (ii) For so long as Series A Preferred Shares are Outstanding,
the Trust 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 A Preferred Shares as to dividends and upon liquidation)
in respect of the Common Shares or any other shares of the Trust ranking
junior to the Series A 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 Trust ranking junior to the Series A 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 Trust ranking junior to the
Series A Preferred Shares as to dividends and upon liquidation), unless, in
each case, (A) immediately thereafter, the aggregate Adjusted Value of the
Trust's Moody's Eligible Assets shall equal or exceed the Basic Maintenance
Amount and the Trust shall have Asset Coverage, (B) all cumulative dividends
on all Series A 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 Trust has redeemed the full number of
Series A Preferred Shares to be redeemed mandatorily pursuant to any provision
contained herein for mandatory redemption.

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

         (c) Not later than the Business Day immediately preceding each
Dividend Payment Date, the Trust shall deposit with the Dividend-Disbursing
Agent Deposit Assets having an initial combined value sufficient to pay the
dividends that are payable on such Dividend Payment Date, which Deposit Assets
shall mature on or prior to such Dividend Payment Date. The Trust 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 Trust, whether voluntary or involuntary, the holders of Series
A Preferred Shares shall be entitled to receive out of the assets of the Trust
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 Trust ranking junior to the
Series A 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 accumulated to and including the
date fixed for such distribution or payment (whether or not earned or declared
by the Trust, 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 Trust, whether voluntary or involuntary, the assets of the
Trust available for distribution among the holders of all Outstanding Series A
Preferred Shares, and any other Outstanding class or series of Preferred
Shares of the Trust ranking on a parity with the Series A Preferred Shares as
to payment upon liquidation, shall be insufficient to permit the payment in
full to such holders of Series A Preferred Shares of the Liquidation
Preference plus accumulated and unpaid dividends 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 A 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 has been paid
in full to the holders of Series A Preferred Shares, no dividends or
distributions will be made to holders of the Common Shares or any other shares
of the Trust ranking junior to the Series A Preferred Shares as to
liquidation.

         3.  Redemption.

         The Series A Preferred Shares shall be redeemed by the Trust as
provided below:

         (a) Mandatory Redemptions.

         If the Trust is required to redeem any Preferred Shares (which may
include Series A Preferred Shares) pursuant to paragraphs 5(b) or 5(c) of Part
II hereof, then the Trust shall, to the extent permitted by the 1940 Act and
Delaware law, by the close of business on such Series A 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 Trust 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 Trust may include any proportion of Series A
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 Trust 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 A Preferred Shares, at a price
equal to $25.00 per share plus accumulated but unpaid dividends (whether or
not earned or declared by the Trust) 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 Trust may, but is not
required to, redeem a sufficient number of Series A Preferred Shares pursuant
to this paragraph 3(a) which, when aggregated with other Preferred Shares
redeemed by the Trust, permits the Trust to have with respect to the Preferred
Shares (including the Series A 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 A Preferred Shares
then Outstanding are required to be redeemed pursuant to paragraph 5 of Part
II hereof, the Trust 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 July 31, 2008, the Series A Preferred Shares are not subject
to optional redemption by the Trust unless such redemption is necessary, in
the judgment of the Board of Trustees, to maintain the Trust's status as a
regulated investment company under Subchapter M of the Internal Revenue Code
of 1986, as amended. Commencing July 31, 2008 and thereafter, and prior
thereto to the extent necessary to maintain the Trust'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 Trust
may at any time upon Notice of Redemption redeem the Series A 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 Trust shall determine or be required to redeem
Series A 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 Trust 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 A 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 A 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 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 A 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 Trust 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 Trust 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 A 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 A Preferred Shares
called for redemption on the redemption date. The Trust 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 Trust shall default in making payment of the
Redemption Price), all rights of the holders of the Series A 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 Trust shall be entitled
to receive, promptly after the date fixed for redemption any cash in excess of
the aggregate Redemption Price of the Series A 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 Trust, after which the
holders of the Series A Preferred Shares so called for redemption shall look
only to the Trust for payment of the Redemption Price thereof. The Trust 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 A
Preferred Shares that are subject to redemption shall surrender the
certificate evidencing such shares to the Trust 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 A Preferred Shares pursuant to this Statement of Preferences, such
redemption shall be made pro rata from each holder of Series A 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 Trust shall not redeem Series A Preferred Shares unless all accumulated
and unpaid dividends on all Outstanding Series A Preferred Shares and other
Preferred Shares ranking on a parity with the Series A Preferred Shares with
respect to dividends for all applicable past Dividend Periods (whether or not
earned or declared by the Trust) shall have been or are contemporaneously paid
or declared and Deposit Assets for the payment of such dividends 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 A Preferred
Shares.

               If the Trust shall not have funds legally available for the
redemption of, or is otherwise unable to redeem, all the Series A Preferred
Shares or other Preferred Shares designated to be redeemed on any redemption
date, the Trust shall redeem on such redemption date the number of Series A
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 A Preferred Shares and other Preferred Shares
designated to be redeemed shall be redeemed on the earliest practicable date
on which the Trust 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 A 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 A Preferred
Shares shall be entitled to one vote for each Series A Preferred Share held
and the holders of the Outstanding Preferred Shares, including Series A
Preferred Shares, and the Common Shares shall vote together as a single class;
provided, however, that at any meeting of the shareholders of the Trust held
for the election of trustees, the holders of the Outstanding Preferred Shares,
including Series A 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 Trust, to elect a number of Trust's trustees, such that following the
election of trustees at the meeting of the shareholders, the Trust's Board of
Trustees shall contain two trustees elected by the holders of the Outstanding
Preferred Shares, including the Series A Preferred Shares. Subject to
paragraph 4(b) of Part II hereof, the holders of the outstanding capital
shares of the Trust, including the holders of Outstanding Preferred Shares,
including the Series A 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 A Preferred Shares, voting separately
as one class (to the exclusion of the holders of all other securities and
classes of capital shares of the Trust) 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 Trust and the Board of Trustees
shall take all necessary actions, including effecting the removal of trustees
or amendment of the Trust'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 (whether or not earned
or declared, and whether or not funds are then legally available in an amount
sufficient therefor) on the Outstanding Series A Preferred Shares equal to at
least two full years' dividends 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; or

               (ii) if at any time Holders of any other Preferred Shares are
entitled to elect a majority of the trustees of the Trust 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 A Preferred Shares are Outstanding, the Trust 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 A Preferred Shares. To the extent permitted
under the 1940 Act, in the event that more than one series of Preferred Shares
are Outstanding, the Trust 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 A 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 Trust 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 Trust Act or the 1940 Act, the affirmative vote of
the holders of a majority of the Outstanding Preferred Shares, including
Series A 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 Trust 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 A 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 A 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 Trust 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 Trust fails to
send such notice to the Dividend-Disbursing Agent or if the Trust 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 Trust), 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 A 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 A Preferred Share which is not Outstanding
shall not be counted.

               (iii) The terms of office of all persons who are trustees of
the Trust 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 Trust.

               (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 Trust
and the voting rights of such holders of Preferred Shares, including Series A
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 A Preferred
Shares shall not have any rights or preferences other than those specifically
set forth herein. The holders of Series A Preferred Shares shall have no
preemptive rights or rights to cumulative voting. In the event that the Trust
fails to pay any dividends on the Series A 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 A Preferred Shares is
required pursuant to the provisions of Section 13(a) of the 1940 Act, as long
as the Series A Preferred Shares are rated by Moody's at the Trust's request,
the Trust 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 A Preferred Shares are Outstanding, the
Trust shall make the following determinations:

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

               (ii) Basic Maintenance Amount Requirement.

                     (A) For so long as any Series A Preferred Shares are
Outstanding and are rated by Moody's at the Trust's request, the Trust 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 Trust 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 A Preferred Shares and after each (1)
Annual Valuation Date, (2) Valuation Date on which the Trust 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 Trust 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 Trust's
Moody's Eligible Assets exceeds the Basic Maintenance Amount by 5% or less,
the Trust 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 Trust mails to Moody's
for delivery on the next Business Day the Basic Maintenance Report. A failure
by the Trust 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 Trust's Moody's Eligible Assets less than
the Basic Maintenance Amount, as of the relevant Valuation Date.

                     (C) Within ten 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 Trust shall
deliver to Moody's an Accountant's Confirmation relating to such Basic
Maintenance Report that was prepared by the Trust during the quarter ending on
such Annual Valuation Date. Also, within ten 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 Trust fails to
satisfy the requirements of paragraph 5(a)(ii)(A) and any Basic Maintenance
Amount Cure Date, the Trust shall deliver to Moody's an Accountant's
Confirmation relating to such Basic Maintenance Report.

                     (D) In the event the Adjusted Value of the Trust'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 Trust shall have until the Basic Maintenance Amount
Cure Date to achieve an Adjusted Value of the Trust'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 Trust shall inform
Moody's of such achievement in writing by delivery of a revised Basic
Maintenance Report showing an Adjusted Value of the Trust'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 Trust has repurchased more than 1% of its Common Shares
since the most recent date of delivery of a Basic Maintenance Report, the
Trust 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 Trust fails to have Asset Coverage as provided in paragraph
5(a)(i) hereof and such failure is not cured as of the related Series A Asset
Coverage Cure Date, (i) the Trust 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 Trust's determination (to
the extent permitted by the 1940 Act and Delaware law) may include any
proportion of Series A Preferred Shares, to enable it to meet the requirements
of paragraph 5(a)(i) above, and, at the Trust's discretion, such additional
number of Series A Preferred Shares or other Preferred Shares in order that
the Trust have Asset Coverage with respect to the Series A 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 A 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 Trust 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 Trust 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 A Preferred Shares or other Preferred Shares to
enable it to meet the requirements of paragraph 5(a)(ii)(A) above, and, at the
Trust's discretion, such additional number of Series A Preferred Shares or
other Preferred Shares in order that the Trust have Adjusted Assets with
respect to the remaining Series A 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 A 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 A Preferred Share
shall be deemed to be Outstanding for purposes of any computation if, prior to
or concurrently with such determination, sufficient Deposit Assets to pay the
full Redemption Price for such share shall have been deposited in trust with
the 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 A Preferred Shares are rated by Moody's
at the request of the Trust, the Trust 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 Trust 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 Trust's Moody's Eligible Assets exceeded the Basic Maintenance Amount by
5% or less, alter the composition of the Trust's assets in a manner reasonably
expected to reduce the Adjusted Value of the Trust's Moody's Eligible Assets,
unless the Trust shall have confirmed that, after giving effect to such
alteration, the Adjusted Value of the Trust'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
Trust shall have confirmed that, after giving effect to such declaration,
other distribution or repurchase, the Trust continued to satisfy the
requirements of paragraph 5(a)(ii)(A) of Part II hereof.

         (b) For so long as the Series A Preferred Shares are rated by Moody's
at the request of the Trust, unless the Trust shall have received written
confirmation from Moody's, the Trust may engage in the lending of its
portfolio securities only in an amount of up to 5% of the Trust's total
assets, provided that the Trust 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 Trust for purposes of
determining compliance with paragraph 5 of Part II hereof.

         (c) For so long as the Series A Preferred Shares are rated by Moody's
at the request of the Trust, the Trust shall not consolidate the Trust with,
merge the Trust into, sell or otherwise transfer all or substantially all of
the Trust's assets to another Person or adopt a plan of liquidation of the
Trust, 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 A Preferred Shares are Outstanding the
Trust may issue and sell one or more series of a class of senior securities of
the Trust 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 Trust 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 Trust then outstanding and no such additional indebtedness shall have any
preference or priority over any other indebtedness of the Trust upon the
distribution of the assets of the Trust 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 Trust then in
effect, shall not be considered to be indebtedness limited by this paragraph
7(a).

         (b) So long as any Series A Preferred Shares are Outstanding, the
Trust 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 Trust
representing stock under Section 18 of the 1940 Act in addition to the Series
A Preferred Shares, provided that (i) the Trust 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 A
Preferred Shares and all other Preferred Shares of the Trust then Outstanding,
and (ii) no such additional Preferred Shares shall have any preference or
priority over any other Preferred Shares of the Trust upon the distribution of
the assets of the Trust or in respect of the payment of dividends.

         8. Status of Redeemed or Repurchased Series A Preferred

         Series A Preferred Shares which at any time have been redeemed or
purchased by the Trust 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 Trust 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 Trust 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 Trust 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 Trust'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 A Preferred Shares or any other capital shares of the
Trust, 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 A Preferred Shares.

         IN WITNESS WHEREOF, The Gabelli Utility 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 Trust further acknowledge said
instrument to be the corporate act of the Trust, 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 on July 30, 2003.



                                            By     /s/ Bruce Alpert
                                               ------------------------------
                                               Name:  Bruce Alpert
                                               Title: President

Attest:

___/s/ James E. McKee
Name:  James E. McKee
Title: Secretary

</TEXT>
</DOCUMENT>
