<SEC-DOCUMENT>0000940400-13-000127.txt : 20130301
<SEC-HEADER>0000940400-13-000127.hdr.sgml : 20130301
<ACCEPTANCE-DATETIME>20130301154029
ACCESSION NUMBER:		0000940400-13-000127
CONFORMED SUBMISSION TYPE:	NSAR-B
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20121231
FILED AS OF DATE:		20130301
DATE AS OF CHANGE:		20130301
EFFECTIVENESS DATE:		20130301

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GABELLI UTILITY TRUST
		CENTRAL INDEX KEY:			0001080720
		IRS NUMBER:				134046522
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		NSAR-B
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-09243
		FILM NUMBER:		13657351

	BUSINESS ADDRESS:	
		STREET 1:		1 CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
		BUSINESS PHONE:		9149215083

	MAIL ADDRESS:	
		STREET 1:		1 CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GABELLI UTILITY FUND
		DATE OF NAME CHANGE:	19990225
</SEC-HEADER>
<DOCUMENT>
<TYPE>NSAR-B
<SEQUENCE>1
<FILENAME>gut.fil
<TEXT>
<PAGE>      PAGE  1
000 B000000 12/31/2012
000 C000000 0001080720
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 6.1
000 J000000 A
001 A000000 THE GABELLI UTILITY TRUST
001 B000000 811-09243
001 C000000 9149215100
002 A000000 ONE CORPORATE CENTER
002 B000000 RYE
002 C000000 NY
002 D010000 10580
002 D020000 1422
003  000000 N
004  000000 N
005  000000 N
006  000000 N
007 A000000 N
007 B000000  0
007 C010100  1
008 A000001 GABELLI FUNDS, LLC
008 B000001 A
008 C000001 801-37706
008 D010001 RYE
008 D020001 NY
008 D030001 10580
008 D040001 1422
010 A000001 GABELLI FUNDS, LLC
010 B000001 801-37706
010 C010001 RYE
010 C020001 NY
010 C030001 10580
010 C040001 1422
010 A000002 BNY MELLON INVESTMENT SERVICING (US) INC.
010 B000002 84-01761
010 C010002 WILMINGTON
010 C020002 DE
010 C030002 19809
012 A000001 COMPUTERSHARE TRUST COMPANY, N.A.
012 B000001 84-05925
012 C010001 CANTON
012 C020001 MA
012 C030001 02021
012 C040001 1011
013 A000001 PRICEWATERHOUSECOOPERS LLP
013 B010001 NEW YORK
013 B020001 NY
<PAGE>      PAGE  2
013 B030001 10017
014 A000001 GABELLI & COMPANY, INC.
014 B000001 8-21373
014 A000002 G.DISTRIBUTORS, LLC
014 B000002 8-68697
015 A000001 THE BANK OF NEW YORK MELLON
015 B000001 C
015 C010001 EVERETT
015 C020001 MA
015 C030001 02149
015 E010001 X
018  000000 Y
019 A000000 Y
019 B000000   31
019 C000000 GABELLIGRP
020 A000001 GABELLI & COMPANY, INC.
020 B000001 13-2885006
020 C000001      8
020 A000002 DAIWA SECURITIES AMERICA, INC.
020 B000002 13-5680329
020 C000002      3
020 A000003 GOLDMAN, SACHS & CO.
020 B000003 13-5108880
020 C000003      2
020 A000004 J.P. MORGAN SECURITIES, INC.
020 B000004 13-3379014
020 C000004      1
021  000000       14
022 A000001 BARCLAYS CAPITAL, INC.
022 B000001 06-1031656
022 C000001     79287
022 D000001     21591
022 A000002 SOUTHERN UNION CO.
022 B000002 75-0571592
022 C000002         0
022 D000002      4646
022 A000003 ROLLS-ROYCE HOLDINGS PLC
022 C000003         0
022 D000003        40
022 A000004 PROGRESS ENERGY INC., CVO
022 C000004         0
022 D000004        30
023 C000000      79287
023 D000000      26307
024  000000 N
026 A000000 N
026 B000000 Y
026 C000000 N
026 D000000 Y
026 E000000 N
026 F000000 Y
<PAGE>      PAGE  3
026 G010000 N
026 G020000 N
026 H000000 N
027  000000 N
028 A010000         0
028 A020000         0
028 A030000         0
028 A040000         0
028 B010000         0
028 B020000         0
028 B030000         0
028 B040000         0
028 C010000         0
028 C020000         0
028 C030000         0
028 C040000         0
028 D010000         0
028 D020000         0
028 D030000         0
028 D040000         0
028 E010000         0
028 E020000         0
028 E030000         0
028 E040000         0
028 F010000         0
028 F020000         0
028 F030000         0
028 F040000         0
028 G010000         0
028 G020000         0
028 G030000         0
028 G040000         0
028 H000000         0
030 A000000      0
030 B000000  0.00
030 C000000  0.00
031 A000000      0
031 B000000      0
032  000000      0
033  000000      0
035  000000      0
036 B000000      0
038  000000      0
042 A000000   0
042 B000000   0
042 C000000   0
042 D000000   0
042 E000000   0
042 F000000   0
042 G000000   0
042 H000000   0
<PAGE>      PAGE  4
043  000000      0
044  000000      0
045  000000 Y
046  000000 N
047  000000 Y
048  000000  1.000
048 A010000        0
048 A020000 0.000
048 B010000        0
048 B020000 0.000
048 C010000        0
048 C020000 0.000
048 D010000        0
048 D020000 0.000
048 E010000        0
048 E020000 0.000
048 F010000        0
048 F020000 0.000
048 G010000        0
048 G020000 0.000
048 H010000        0
048 H020000 0.000
048 I010000        0
048 I020000 0.000
048 J010000        0
048 J020000 0.000
048 K010000        0
048 K020000 0.000
049  000000 N
050  000000 N
051  000000 Y
052  000000 N
053 A000000 Y
053 B000000 Y
053 C000000 N
054 A000000 Y
054 B000000 Y
054 C000000 Y
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 N
054 H000000 Y
054 I000000 N
054 J000000 Y
054 K000000 N
054 L000000 N
054 M000000 Y
054 N000000 N
054 O000000 N
055 A000000 N
<PAGE>      PAGE  5
055 B000000 N
056  000000 Y
057  000000 N
058 A000000 N
059  000000 Y
060 A000000 N
060 B000000 N
061  000000        0
062 A000000 N
062 B000000   0.0
062 C000000   0.0
062 D000000   0.0
062 E000000   0.0
062 F000000   0.0
062 G000000   0.0
062 H000000   0.0
062 I000000   0.0
062 J000000   0.0
062 K000000   0.0
062 L000000   0.0
062 M000000   0.0
062 N000000   0.0
062 O000000   0.0
062 P000000   0.0
062 Q000000   0.0
062 R000000   0.0
063 A000000   0
063 B000000  0.0
066 A000000 Y
066 B000000 N
066 C000000 N
066 D000000 N
066 E000000 Y
066 F000000 N
066 G000000 N
067  000000 N
068 A000000 N
068 B000000 N
069  000000 N
070 A010000 Y
070 A020000 N
070 B010000 Y
070 B020000 N
070 C010000 Y
070 C020000 N
070 D010000 Y
070 D020000 N
070 E010000 Y
070 E020000 N
070 F010000 Y
070 F020000 N
<PAGE>      PAGE  6
070 G010000 Y
070 G020000 N
070 H010000 Y
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 Y
070 K010000 Y
070 K020000 Y
070 L010000 Y
070 L020000 Y
070 M010000 Y
070 M020000 Y
070 N010000 Y
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 Y
070 P020000 N
070 Q010000 N
070 Q020000 N
070 R010000 Y
070 R020000 N
071 A000000      6181
071 B000000     12370
071 C000000    223477
071 D000000    3
072 A000000 12
072 B000000       10
072 C000000     7862
072 D000000        0
072 E000000        0
072 F000000     2296
072 G000000        0
072 H000000       62
072 I000000      143
072 J000000       36
072 K000000        0
072 L000000      273
072 M000000      113
072 N000000        0
072 O000000        0
072 P000000        0
072 Q000000       45
072 R000000       38
072 S000000       16
072 T000000        0
072 U000000        0
072 V000000        0
072 W000000       95
<PAGE>      PAGE  7
072 X000000     3117
072 Y000000      288
072 Z000000     5043
072AA000000    10002
072BB000000        0
072CC010000        0
072CC020000     5198
072DD010000     4468
072DD020000        0
072EE000000     8489
073 A010000   0.1400
073 A020000   0.0000
073 B000000   0.2600
073 C000000   0.2000
074 A000000      723
074 B000000        0
074 C000000    53701
074 D000000      121
074 E000000        0
074 F000000   222369
074 G000000        0
074 H000000        0
074 I000000      891
074 J000000       12
074 K000000        0
074 L000000      360
074 M000000       77
074 N000000   278254
074 O000000       33
074 P000000      420
074 Q000000        0
074 R010000        0
074 R020000        0
074 R030000        0
074 R040000      732
074 S000000    51332
074 T000000   225737
074 U010000    41184
074 U020000        0
074 V010000     5.48
074 V020000     0.00
074 W000000   0.0000
074 X000000    29985
074 Y000000     5441
075 A000000        0
075 B000000   232553
076  000000     6.16
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
<PAGE>      PAGE  8
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078  000000 N
080 A000000 TRAVELERS-ST. PAUL FIRE & MARINE INSURANCE
080 B000000 GREAT AMERICAN INSURANCE COMPANY
080 C000000    27800
081 A000000 Y
081 B000000  36
082 A000000 N
082 B000000        0
083 A000000 N
083 B000000        0
084 A000000 N
084 B000000        0
085 A000000 Y
085 B000000 N
086 A010000   9338
086 A020000  56465
086 B010000      0
086 B020000      0
086 C010000      0
086 C020000      0
086 D010000      0
086 D020000      0
086 E010000      0
086 E020000      0
086 F010000      0
086 F020000      0
087 A010000 COMMON STOCK
087 A020000 36240A101
087 A030000 GUT
087 B010000 5.625% SERIES A CUMULATIVE PREFERRED STOCK
087 B020000 36240A200
087 B030000 GUTPRA
088 A000000 N
088 B000000 N
088 C000000 N
088 D000000 Y
<PAGE>      PAGE  9
SIGNATURE   SCOTT R. FUCHS
TITLE       ASSISTANT TREASURER

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77B ACCT LTTR
<SEQUENCE>2
<FILENAME>gut77b.txt
<TEXT>



Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of The Gabelli
Utility Trust:

In planning and performing our audit of the financial
statements of The Gabelli Utility Trust ("the Fund") as of
and for the year ended December 31, 2012, in accordance with
the standards of the Public Company Accounting Oversight
Board (United States), we considered the Fund's internal
control over financial reporting, including controls over
safeguarding securities, as a basis for designing our
auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the
requirements of Form N-SAR, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's
internal control over financial reporting.  Accordingly, we
do not express an opinion on the effectiveness of the Fund's
internal control over financial reporting.

The management of the Fund is responsible for establishing
and maintaining effective internal control over financial
reporting.  In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected
benefits and related costs of controls.  A fund's internal
control over financial reporting is a process designed to
provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial
statements for external purposes in accordance with
generally accepted accounting principles. A fund's internal
control over financial reporting includes those policies and
procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the fund;
(2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the fund
are being made only in accordance with authorizations of
management and trustees of the fund; and (3)  provide
reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use or disposition of
a fund's assets that could have a material effect on the
financial statements.

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

A deficiency in internal control over financial reporting
exists when the design or operation of a control does not
allow management or employees, in the normal course of
performing their assigned functions, to prevent or detect
misstatements on a timely basis.  A material weakness is a
deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a
reasonable possibility that a material misstatement of the
Fund's annual or interim financial statements will not be
prevented or detected on a timely basis.

Our consideration of the Fund's internal control over
financial reporting was for the limited purpose described in
the first paragraph and would not necessarily disclose all
deficiencies in internal control over financial reporting
that might be material weaknesses under standards
established by the Public Company Accounting Oversight Board
(United States).  However, we noted no deficiencies in the
Fund's internal control over financial reporting and its
operation, including controls over safeguarding securities,
that we consider to be material weaknesses as defined above
as of December 31, 2012.

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

/s/ PricewaterhouseCoopers LLP
New York, New York
February 28, 2013


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77Q1 OTHR EXHB
<SEQUENCE>3
<FILENAME>gut77q11.txt
<TEXT>
Exhibit 77(Q)(1)(a)(i)



THE GABELLI UTILITY TRUST
AMENDED AND RESTATED 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 1,200,000 5.625% Series A Cumulative Preferred Shares.
            THIRD: As a result of a notification from Moody's
that it no longer requires the delivery of a Basic Maintenance
Report or an Accountant's Confirmation, the Board of Trustees
of the Trust determined that it should amend this Statement of
Preferences to reflect the Moody's notification.
            FOURTH: The Board of Trustees of the Trust, at a
meeting duly convened and held on November 15, 2012, pursuant
to authority expressly vested in it by Part III of this
Statement of Preferences, authorized the officers of the Trust
to amend and restate this Statement of Preferences that was
initially executed on July 31, 2003.
            FIFTH: 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:
            "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.
            "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:
AND
DISCOUNT FACTOR:

Short Term Money Market Instruments (other than U.S.
Government Obligations
set forth below) and other commercial paper:
     U.S. Treasury Securities with final maturities that are
less than or equal to 60 days      1.00
     Demand or time deposits, certificates of deposit and
bankers' acceptances includible
in Short Term Money Market Instruments        1.00
     Commercial paper rated P-1 by Moody's maturing in 30 days
or less.      1.00
     Commercial paper rated P-1 by Moody's maturing in more
than 30 days but in 270 days or less.      1.15
     Commercial paper rated A-1+ by S&P maturing in 270 days
or less       1.25
     Repurchase obligations includible in Short Term Money
Market Instruments if term is less than 30 days and counterparty
is  rated at least A2.       1.00

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

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 maturity    2.50
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 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                   Maximum
                 Single            Single

              Issuer(3)(4)       Issuer(3)(4)

Moody's
Rating(1)(2)

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 Sub-        Maximum
                 Single                            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 the Trust or any subsidiary of the Trust is the holder
will be disregarded and deemed not Outstanding, and (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 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
repr esented 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) 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.


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.


            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 November 15, 2012.

By____________________
Name:   Bruce Alpert
Title:     President
Attest:

_______________________
Name:    Agnes Mullady
Title:      Secretary


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.77Q1 OTHR EXHB
<SEQUENCE>4
<FILENAME>gut77q12.txt
<TEXT>
Exhibit 77(Q)(1)(a)(ii)


THE GABELLI UTILITY TRUST

AMENDED AND RESTATED STATEMENT OF PREFERENCES

OF

SERIES B AUCTION MARKET PREFERRED SHARES

The Gabelli Utility Trust, a Delaware statutory trust, (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 5,000 authorized but unissued
capital shares of the Trust, par value $.001 per share, as
"Series B Auction Market Preferred Shares" and authorizing the
issuance of up to 5,000 Series B Auction Market 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 1,000 Series B Auction Market Preferred Shares.

                  THIRD: As a result of a notification from
(i) Moody's that it no longer requires the delivery of a Basic
Maintenance Report or an Accountant's Confirmation and (ii)
S&P that it no longer requires the delivery of an Accountant's
Confirmation, the Board of Trustees of the Trust determined
that it should amend this Statement of Preferences to reflect
the Moody's and S&P notifications.

     FOURTH: The Board of Trustees of the Trust, at a meeting
duly convened and held on November 15, 2012, pursuant to
authority expressly vested in it by Part III of this Statement
of Preferences, authorized the officers of the Trust to amend
and restate this Statement of Preferences that was initially
executed on July 31, 2003.

                  FIFTH: The preferences, rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the
Series B Auction Market Preferred Shares, par value $.001 per
share, as set by the Board of Trustees are as follows:

DESIGNATION

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

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

PART I

SERIES B PREFERRED SHARES TERMS

1. Number of Shares; Ranking.

                  (a) The initial number of authorized and
classified shares constituting the Series B Preferred Shares
to be issued is 1,000. Additional authorized and classified
Series B Preferred Shares may be issued at any time upon
resolution by the Board of Trustees. No fractional Series B
Preferred Shares shall be issued.

                  (b) Series B 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.

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

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

2. Dividends.

                  (a) The Holders of Series B 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 on their Series B Preferred Shares
at the dividend rate determined by the Board of Trustees in
the manner described under "Designation" above during the
period from and after the date on which the initial Series B
Preferred Shares are originally issued up to and including the
last day of the initial Dividend Period and, thereafter, at
the rate, determined as set forth in paragraph 2(c), and no
more, payable on the respective dates determined as set forth
in paragraph 2(b). Dividends on the Outstanding Series B
Preferred Shares shall accumulate from the date on which such
shares are originally issued.

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

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

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

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

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

                  (c)     (i) For each Dividend Period after
the initial Dividend Period for the Outstanding Series B
Preferred Shares, the dividend rate shall be equal to the rate
(stated as a rate per annum) that results from an Auction
(but the rate set at the Auction will not exceed the Maximum
Rate); provided, however, that if an Auction for any
subsequent Dividend Period is not held for any reason (other
than as provided in the immediately following sentence) or if
Sufficient Clearing Bids have not been made in an Auction
(other than as a result of all Series B Preferred Shares being
the subject of Submitted Hold Orders), then the dividend rate
on each Outstanding share of 19ries B Preferred Shares for any
such Dividend Period shall be the Maximum Rate, except as
provided in 2(c)(ii) below. If an Auction is not held because
an unforeseen event or unforeseen events cause a day that
otherwise would have been an Auction Date not to be a Business
Day, then the length of the then-current Dividend Period shall
be extended by seven days (or a multiple thereof if necessary
because of such unforeseen event or events), the Applicable
Rate for such period shall be the Applicable Rate for the
Dividend Period so extended and the Dividend Payment Date for
such Dividend Period shall be the first Business Day
immediately succeeding the end of such period.

                          (ii) Subject to the cure provisions
in paragraph 2(c)(iii) below, a Default Period with respect to
the Outstanding Series B Preferred Shares will commence if the
Trust fails to deposit irrevocably in trust in same-day funds,
with the Paying Ageby 12;00 noonrk City time on the Business
Day immediately preceding the relevant Dividend Payment Date,
the full amount of any declared dividend on the Outstanding
Series B Preferred Shares then payable on that Dividend
Payment Date (a "Dividend Default").

                  Subject to the cure provisions of paragraph
2(c)(iii) below, a Default Period with respect to a Dividend
Default or a Redemption Default shall end on the Business Day
on which, by 12:00 noon, New York City time, all unpaid
dividends and any unpaid Redemption Price in respect of such
Series B Preferred Shares shall have been deposited
irrevocably in trust in same-day funds with the Paying Agent.
In the case of a Default Period, the following shall apply:

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

                  B.       The dividend rate for each Dividend
Period that commences and concludes during a Default
Period will be equal to the Default Rate.

                  C.       In the event a Holder sells Series
B Preferred Shares at an Auction that takes place on
the day a Dividend Default occurs and the Default is
not cured in accordance with paragraph 2(c)(iii)
below, such former Holder shall be entitled to
receive the Default Rate with respect to the Series
B Preferred Shares such Holder sold at the Auction
for the Dividend Period with respect to which the
Default occurred.

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

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

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

                          (iii) No Default Period with respect
to a Dividend Default or Redemption Default shall be deemed to
have commenced, unless such default is due solely to the
willful failure of the Trust, if the amount of any dividend or
any Redemption Price due is deposited irrevocably in trust in
same-day funds with the Paying Agent by 12:00 noon, New York
City time within three Business Days after the applicable
Dividend Payment Date or Redemption Date, together with an
amount in respect of such Series B Preferred Shares equal to
the Default Rate applied to the amount of such non-payment
based on the actual number of days that would otherwise have
comprised the Default Period divided by 360. The "Default
Rate" shall be equal to the Reference Rate multiplied by three
(3).

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

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

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

                  (f) No full dividends shall be declared or
paid on the Series B Preferred Shares for any Dividend Period
or part thereof, unless full cumulative dividends due through
the most recent Dividend Payment Dates therefor for all
Outstanding series of Preferred Shares of the Trust ranking on
a parity with the Series B 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
Outstanding Preferred Shares, any dividends being paid on such
Preferred Shares (including the Series B 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 then Outstanding on the
relevant Dividend Payment Date.

3. Redemption.

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


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

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

                  (b) In the event of a redemption of Series B
Preferred Shares pursuant to paragraph 3(a) above, the Trust
will have filed or will file a notice of its intention to
redeem with the Commission, in either case so as to provide at
least the minimum notice required under Rule 23c-2 under the
1940 Act or any successor provision. In addition, the Trust
shall deliver a notice of redemption to the Auction Agent (the
"Notice of Redemption") containing the information set forth
below (i) in the case of an optional redemption pursuant to
paragraph 3(a)(i) above, one Business Day prior to the giving
of notice to the Holders and (ii) in the case of a mandatory
redemption pursuant to paragraph 3(a)(ii) above, on or prior
to the 7th day preceding the Mandatory Redemption Date. The
Auction Agent will use its reasonable efforts to provide
telephonic, electronic or written notice to each Holder of any
Series B Preferred Shares called for redemption not later than
the close of business on the Business Day immediately
following the day on which the Trust determines the shares to
be redeemed (or, during a Default Period with respect to such
shares, not later than the close of business on the Business
Day immediately following the day on which the Auction Agent
receives Notice of Redemption from the Trust). The Auction
Agent shall confirm a telephonic notice in writing not later
than the close of business on the third Business Day preceding
the date fixed for redemption by providing the Notice of
Redemption to each Holder of shares called for redemption, the
Paying Agent (if different from the Auction Agent) and the
Securities Depository. The Notice of Redemption will be
addressed to the Holders of Series B Preferred Shares at their
addresses appearing on the share records of the Trust. Such
Notice of Redemption will set forth (s) the date fixed for
redemption, (t) the number or percentage of Series B Preferred
Shares to be redeemed, (u) the CUSIP number(s) of such shares,
(v) the Redemption Price (specifying the amount of accumulated
dividends and any applicable redemption premium to be included
therein), (w) the place or places where such shares are to be
redeemed, (x) that dividends on the shares to be redeemed will
cease to accumulate on such date fixed for redemption, (y) the
provision of this Statement of Preferences under which
redemption shall be made, and (z) in the case of a redemption
pursuant to paragraph 3(a)(i), any conditions precedent to
such redemption. If fewer than all the Outstanding Series B
Preferred Shares held by any Holder are to be redeemed, the
Notice of Redemption mailed to such Holder shall also specify
the number or percentage of Series B Preferred Shares to be
redeemed from such Holder. No defect in the Notice of
Redemption or in the transmittal or mailing thereof will
affect the validity of the redemption proceedings, except as
required by applicable law.

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

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

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

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

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

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

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

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

4. Designation of Dividend Period.

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

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

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

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

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

5. Restrictions on Transfer.

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

6. Voting Rights.

                  (a) General.

                  Except as otherwise provided in the
Governing Documents or a resolution of the Board of Trustees,
or as required by applicable law, Holders of Series B
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 B Preferred Shares shall be
entitled to one vote for each Series B Preferred Share held
and the Holders of Outstanding Preferred Shares and Common
Shares shall vote together as a single class; provided,
however, that at any meeting of the shareholders of the Trust
held for the election of trustees, the Holders of Outstanding
Preferred Shares, including the Series B 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 the 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 as a class. Subject to paragraph 6(b), the holders of
outstanding capital shares of the Trust, including the Holders
of Outstanding Preferred Shares, including the Series B
Preferred Shares, voting as a single class, shall elect the
balance of the trustees.

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

                  During any period in which any one or more
of the conditions described below shall exist (such period
being referred to herein as a "Voting Period"), the number
and/or composition of trustees constituting the Board of
Trustees shall be adjusted as necessary to permit the Holders
of the Outstanding Preferred Shares, including the Series B
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 6(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 the 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 B Preferred Shares equal
to at least two full years' dividends shall have become due
and unpaid and sufficient cash or specified securities shall
not have been deposited with the Paying Agent for the payment
in full of such accumulated dividends; 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 the1940 Act or the Statement of
Preferences creating such shares.

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

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

                  Subject to paragraph 1 of Part III of this
Statement of Preferences, so long as the Series B 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 the
Governing Documents so as to in the aggregate adversely affect
the rights and preferences set forth in any Statement of
Preferences, including the Series B Preferred Shares. To the
extent permitted under the 1940 Act, in the event 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 B 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
each Rating Agency ten Business Days prior to any such vote
described above. Unless a higher percentage is required under
the Governing Documents or applicable provisions of the
Delaware Statutory Trust Act or the 1940 Act, the affirmative
vote of the Holders of a majority of the Outstanding Preferred
Shares, including the Series B Preferred Shares, voting
together as a single class, will be required to approve any
plan of reorganization adversely affecting the Preferred
Shares or any action requiring a vote of security holders
under Section 13(a) of the 1940 Act. For purposes of this
paragraph 6(c), the phrase "vote of the Holders of a majority
of the Outstanding Preferred Shares" (or any like phrase)
shall mean, in accordance with Section 2(a)(42) of the 1940
Act, the vote, at the annual or a special meeting of the
shareholders of the 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 the Series B Preferred Shares,
voting together as a single class, necessary to authorize the
action in question. An increase in the number of authorized
Preferred Shares pursuant to the Governing Documents or the
issuance of additional shares of any series of Preferred
Shares (including the Series B Preferred Shares) pursuant to
the Governing Documents shall not in and of itself be
considered to adversely affect the rights and preferences of
the Holders of Preferred Shares.

                  (d) Voting Procedures.

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

                          (ii) For purposes of determining any
rights of the Holders of the Preferred Shares, including the
Series B Preferred Shares, to vote on any matter, whether such
right is created by this Statement of Preferences, by the
other provisions of the Governing Documents, by statute or
otherwise, a share of Series B Preferred Shares 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 6(b)
above shall expire, and the remaining trustees shall
constitute the trustees of the Trust and the voting rights of
such Holders of Preferred Shares, including Series B
Preferred Shares, to elect additional trustees pursuant to
paragraph 6(b) above shall cease, subject to the provisions of
the last sentence of paragraph 6(b). Upon the expiration of
the terms of the trustees elected by the holders of Preferred
Shares pursuant to paragraph 6(b) above, the number of
trustees shall be automatically reduced to the number of
trustees on the Board immediately preceding such Voting
Period.

                  (e) Exclusive Remedy.

                  Unless otherwise required by law, the
Holders of Series B Preferred Shares shall not have any rights
or preferences other than those specifically set forth herein.
The Holders of Series B 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 B
Preferred Shares, the exclusive remedy of the Holders shall be
the right to vote for trustees pursuant to the provisions of
this paragraph 6.

                  (f) Notification to Rating Agency.

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

7. Liquidation Rights.

                  (a) In the event of any liquidation,
dissolution or winding up of the affairs of the Trust, whether
voluntary or involuntary, the Holders of Series B Preferred
Shares shall be entitled to receive out of the assets of the
Trust available for distribution to shareholders, after claims
of creditors but before any distribution or payment shall be
made in respect of the Common Shares or any other shares of
the Trust ranking junior to the Series B Preferred Shares as
to liquidation payments, a liquidation distribution in the
amount of $25,000.00 per share (the "Liquidation Preference"),
plus an amount equal to all unpaid dividends 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 enti tled 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 B
Preferred Shares, and any other Outstanding class or series of
Preferred Shares ranking on a parity with the Series B
Preferred Shares as to payment upon liquidation, shall be
insufficient to permit the payment in full to such Holders of
Series B 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 B 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 B
Preferred Shares, no dividends or distributions will be made
to holders of Common Shares or any other shares of the Trust
ranking junior to the Series B Preferred Shares as to
liquidation.

8. Auction Agent.

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

9. Coverage Tests.

                  (a) Determination of Compliance.

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

                           (i) Asset Coverage as follows:

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

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

                           (ii) Basic Maintenance Amount as
follows:

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

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

                           (C) On or before 5:00 p.m., New
York City time, on the fifth Business Day after the Date of
Original Issue of Series B Preferred Shares, the Trust shall
complete and deliver to S&P a Basic Maintenance Report as of
the close of business on such Date of Original Issue.

                           (D) On or before 5:00 p.m., New
York City time, on the fifth Business Day after either (1) the
Trust shall have redeemed Series B Preferred Shares or (2) the
ratio of the Discounted Value of Eligible Assets in respect of
S&P to the Basic Maintenance Amount is less than or equal to
110%, the Trust shall complete and deliver to S&P, a Basic
Maintenance Report as of the date of either such event.

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

                  (b) Failure to Meet Asset Coverage
Requirements.

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

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

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

                  (d) Certain Notifications Relating to Market
Value.

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

10. Certain Other Restrictions.

                  (a) For so long as the Series B Preferred
are rated by a Rating Agency at the Trust's request, 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
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 Eligible Assets exceeded the Basic Maintenance
Amount by 5% or less, alter the composition of the Trust's
assets in a manner rea sonably expected to reduce the Adjusted
Value of the Trust's Eligible Assets, unless the Trust shall
have confirmed that, after giving effect to such alteration,
the Adjusted Value of the Trust'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 9(a)(ii).
                  (b) For so long as the Series B Preferred
Shares are rated by any Rating Agency at the Trust's request,
unless the Trust shall have received written confirmation from
each such Rating Agency, the Trust may engage in the lending
of its portfolio securities only in an amount of up to 20% of
the Trust's total assets, provided that the Trust receives
cash collateral for such loaned securities that is maintained
at all times in an amount equal to at least 100% of the then
current market value of the loaned securities and, if
invested, is invested only in Short-Term Money Market
Instruments or in money market mutual funds meeting the
requirements of Rule 2a-7 under the 1940 Act that maintain a
constant $1.00 per share net asset value and treat the loaned
securities rather than the collateral as the assets of the
Trust for purposes of determining compliance with paragraph 9.

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

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

                  (a) So long as the Series B 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 the1940 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 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 11(a).

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

                           (i) purchase or sell futures
contracts; write, purchase or sell options on futures
contracts; or write put options (except covered put options)
or call options (except covered call options) on securities
owned by the Trust (collectively, "S&P Hedging Transactions"),
except subject to the following limitations:

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

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

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

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

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

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

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

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

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

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

12.      Termination.

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

13.      Definitions.

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

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

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

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

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

         "Administrator" means the other party to the
Administration Agreement with the 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 that is then
serving as the investment adviser of the Trust.

         "Affiliate" means, with respect to the Auction Agent,
any person known to the Auction Agent to be controlled by, in
control of or under common control with the Trust; provided,
however, that no Broker-Dealer controlled by, in control of or
under common control with the Trust shall be deemed to be an
Affiliate nor shall any corporation or any Person controlled
by, in control of or under common control with such
corporation, one of the directors or executive officers of
which is a trustee of the Trust be deemed to be an Affiliate
solely because such trustee or executive officer is also a
trustee of the Trust.

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

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

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

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

         "Asset Coverage Certificate" means the certificate
required to be delivered by the Trust pursuant to paragraph
9(a)(i)(B) of Part I of this Statement of Preferences.
          "Auction" means each periodic operation of the
Auction Procedures.

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

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

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

         "Basic Maintenance Amount" means, with respect to the
Series B Preferred Shares, as of any Valuation Date, the
dollar amount equal to (a) the sum of (i) the product of the
number of shares of each class or series of Preferred Shares
Outstand ing on such Valuation Date multiplied, in the case of
each such series or class, by the per share Liquidation
Preference applicable to each such series or class; (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 applicable dividend payment date to which dividends
have been paid or duly provided for (or, in the event the
Basic Maintenance Amount is calcu lated on a date prior to the
initial Dividend Payment Date with respect to a class or
series of the Preferred Shares, then from the Date of Original
Issue of such shares) through the Valuation Date plus all
dividends to accumulate on the Preferred Shares then
Outstanding during the 31 days following such Valuation Date
or, if less, during the number of days following such
Valuation Date that the Preferred Shares called for redemption
are scheduled to remain Outstanding at the applicable rate or
default rate then in effect with respect to such shares; (iii)
the 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 or
Paying Agent, as the case may be, for the payment of the
amounts needed to redeem or repurchase Preferred Shares
subject to redemption or repurchase or any of (a)(ii) through
(a)(iv); and provided that in the event the Trust has
repurchased Preferred Shares and irrevocably segregated or
deposited assets as described above with its custodian bank,
the dividend-disbursing agent or Paying Agent for the payment
of the repurchase price the Trust may deduct 100% of the
Liquidation Preference of such Preferred Shares to be
repurchased from (a) above. Basic Maintenance Amount shall,
for the purposes of this Statement of Preferences, have a
correlative meaning with respect to any other class or series
of Preferred Shares.

         "Basic Maintenance Amount Cure Date" means, with
respect to the Series B 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 9(a)(ii)(A)
of Part I of this Statement of Preferences could be cured, and
shall, for the purposes of this Statement of Preferences, have
a correlative meaning with respect to any other class or
series of Preferred Shares.           "Basic Maintenance Test"
means, with respect to the Series B Preferred Shares, a test
which is met if the lower of the aggregate Discounted Values
of the Moody's Eligible Assets or the S&P Eligible Assets if
both Moody's and S&P are then rating the Series B Preferred
Shares at the request of the Trust, or the Eligible Assets of
whichever of Moody's or S&P is then doing so if only one of
Moody's or S&P is then rating the Series B Preferred Shares at
the request of the Trust, meets or exceeds the Basic
Maintenance Amount.

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

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

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

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

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

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

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

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

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

         "Commission" means the Securities and Exchange
Commission.

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

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

         "Date of Original Issue" means 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 February 25, 1999, as amended and
restated from time to time (including by this Statement of
Preferences or by way of any other supplement or Statement of
Preferences authorizing or creating a class of shares of
beneficial interest in the Trust).

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

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

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

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

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

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

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

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

         "Eligible Assets" means Moody's Eligible Assets (if
Moody's is then rating the Series B Preferred Shares at the
request of the Trust), S&P Eligible Assets (if S&P is then
rating the Series B Preferred Shares at the request of the
Trust), and/or Other Rating Agency Eligible Assets if any
Other Rating Agency is then rating the Series A Preferred or
Series B AMPS, whichever is applicable.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  (e) as to any other evidence of indebtedness
which is an Eligible Asset, (i) the product of (A) the unpaid
principal balance of such indebtedness as of the Valuation
Date and (B)(1) if such indebtedness is traded on a national
securities exchange or quoted on the Nasdaq System, the last
sales price reported on the Valuation Date or (2) if there was
no reported sales price on the Valuation Date or if such
indebtedness is not traded on a national securities exchange
or quoted on the Nasdaq System, the lower of two bid prices
for such indebtedness provided by two recognized dealers with
a minimum capitalization of $25,000,000 (or otherwise approved
for such purpose by Moody's and S&P) to the Administrator, at
least one of which shall be provided in writing or by
telecopy, telex, other electronic transcrip tion, 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.
         "Maximum Rate" means, on any day on which the
Applicable Rate is determined, the greater of (as set forth in
the table below) (i) the applicable percentage of the
Reference Rate or (ii) the applicable spread plus the
Reference Rate. The reference rate is the applicable LIBOR
Rate (for a dividend period or a special dividend period of
fewer than 364 days), or the applicable Treasury Index Rate
(for a special dividend period of 364 days or more). The
applicable percentage and applicable spread will be determined
based on the lower of the credit ratings assigned to the
Series B AMPS by Moody's and S&P. If Moody's and S&P or both
do not make such ratings available, the rate will be
determined by reference to equivalent ratings issued by a
substitute rating agency.

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

Aaa                 AAA              125%            125 bps
Aa3 to Aa1          AA- to AA+       150%            150 bps
A3 to A1            A- to A+         200%            200 bps
Baa3 to Baa1        BBB- to BBB+     250%            250 bps
Below Baa3          Below BBB-       300%            300 bps

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

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

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


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

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

     U.S. Treasury Securities with final maturities that are
Less than or equal to 60 days.       1.00
     Demand or time deposits, certificates of deposit and
bankers' acceptances includible in Moody's Short Term Money Market
     Instruments.             1.00
     Commercial paper rated P-1 by Moody's maturing in 30 days
     or less..                  1.00
     Commercial paper rated P-1 by Moody's maturing in more
     than 30 days but in 270 days or less.       1.15
     Commercial paper rated A-1+ by S&P maturing in 270 days
     or less.                  1.25
     Repurchase obligations includible in Moody's Short Term
     Money Market Instruments if term is less than 30 days and
     counterparty is rated at least A2.      1.00
     Other repurchase obligations.      Discount Factor
applicable to the underlying assets
U.S. Common Stocks and Common Stocks of foreign issuers for
which ADRs 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 ADRs are traded.       4.00
Convertible Preferred Stocks.       3.00
Preferred stocks:
     Auction Market 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 maturity.   2.50
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 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 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 an nouncement 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
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; pro vided, however, that the aggregate
Market Value of the Trust's hold ings of securities
denominated in currencies other than the U.S. dollar
and ADRs in excess of (A) 6% of the aggregate Market
Value of the Outstanding shares of common stock of such
issuer thereof or (B) in excess of 10% of the Market
Value of the Trust's Moody's Eligible Assets with
respect to issuers formed under the laws of any single
such non-U.S. 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 as signed 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 maturi ty 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.; 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 (i) 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 de scribed 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 in debtedness and
convertible corporate evidences of indebtedness shall not be
treated as Moody's Eligible Assets except to the extent they
satisfy the following diversifica tion 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
$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.

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

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

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

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

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

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

(i)	outstanding financial futures contracts based on
such index exceeding in number 10% of the average
number of daily traded financial futures contracts
based on such index in the 30 days preceding the
time of effecting such transaction as reported by
The Wall Street Journal; or
(ii)	 outstanding financial futures contracts based on
any index approved by Moody's having a Market Value
exceeding 50% of the Market Value of all portfolio
securities of the Trust constituting Moody's
Eligible Assets owned by the Trust;


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

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

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

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

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

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

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

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

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

         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, 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 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.

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

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

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

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

     "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 deliv ered to the Trust for
cancellation;

         (b)      any such Preferred Share other than an
auction market 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 market Preferred
Share, including the Series B Preferred Shares, any
such shares theretofore delivered to the applicable
auction agent for cancellation or with respect to which
the Trust has given notice of redemption and
irrevocably deposited with the applicable paying agent
sufficient funds to redeem such shares; and

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

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

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

     "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 B
Preferred Shares.

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

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

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

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

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

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

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

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

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

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

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

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


  Asset Class Obligor
     (Collateral)                     Discount Factors (1)
     ------------                     --------------------
Common Stock                                 230.4%

30-yr treasury notes                         126.7%

10-yr treasury notes                         121.6%

5-yr treasury notes                          115.1%

2-yr treasury notes                          109.4%

52 week treasury bills                       105.8%

STMMI with maturities                        112.7%
from 181 to 360 days

STMMI with maturities                         104%
from 1 to 180

Non-rated 2a-7 eligible                       111%
money market funds used
as sweep accounts

Cash, receivables due                         100%
within 5 business days
of a Valuation Date,
demand deposits and
STMMI with next day
maturities held in
'A-1+' rated institutions,
'AAAm' rated money
market funds & 'A-1+'
commercial paper with
maturities of 30 days
or less
______________
         (1)      For an S&P rating of AAA.

     "S&P Eligible Assets" means:

         (a)      Deposit Assets;

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

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

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

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

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



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

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

                  (1)      restricted stocks (144a securities)
or any pink
                           sheet stocks (generally, stock that
are not carried
                           in daily over-the-counter newspaper
listings) are
                           ineligible; and

                  (2)      the aggregate Market Value of the
Trust's holdings
                           of any single issuer is not in
excess of 4% of the
                           aggregate Market Value of the
Trust's S&P Eligible
                           Assets.

         (c)      preferred stocks, on such basis as S&P may
determine in
                  response to a request from the Trust.

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

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


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

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

     "Series B Preferred Shares" means the Trust's Series B
Auction Market Preferred Shares, par value $.001 per share,
liquidation preference $25,000 per share.

     "Short-Term Money Market Instruments" means the following
types of instruments if, on the date of purchase or other
acquisition thereof by the 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)      AAAm rated money market
funds;

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

                          (iv)      overnight funds; and

                          (v)       U.S. Government
Obligations.

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

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

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

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

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

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

         "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
week, or such other date as the Trust and Rating Agencies may
agree to for purposes of determining the Basic Maintenance
Amount.

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

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

AUCTION PROCEDURES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  2. Orders.

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

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

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

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

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

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

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

                           (b) (i) A Bid by a Beneficial Owner
or an Existing Holder of Series B Preferred Shares subject to
an Auction on any Auction Date shall constitute an irrevocable
offer to sell:

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                  6. Transfer of Series B Preferred Shares.

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

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 Rating Agency
guidelines, if the Board of Trustees determines that such
amendments or modifications are necessary to prevent a
reduction in, or the withdrawal of, a rating of the Preferred
Shares and are in the aggregate in the best interests of the
Holders of the Preferred Shares.

                  2. Other Modification.

         The Board of Trustees, without further action by the
shareholders, may amend, alter, add to or repeal any provision
of this Statement of Preferences including, without
limitation, provisions that have been adopted by the Trust
pursuant to any rating agency guidelines, if the Board of
Trustees determines that such amendments or modifications will
not in the aggregate adversely affect the rights and
preferences of any series of the Preferred Shares, provided,
that the 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 B
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 B
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 November
15, 2012.






By____________________
Name:  Bruce Alpert
Title:    President


Attest:

_______________________
Name:    Agnes Mullady
Title:      Secretary


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
