EVERGREEN UTILITIES AND HIGH INCOME FUND

                OFFER TO PURCHASE FOR CASH 575,250 OF ITS ISSUED
               AND OUTSTANDING SHARES AT NET ASSET VALUE PER SHARE

               THE OFFER WILL EXPIRE AT 5:00 P.M. EASTERN TIME ON
                 JANUARY 24, 2005, UNLESS THE OFFER IS EXTENDED.

To the Shareholders of Evergreen Utilities and High Income Fund:

Evergreen Utilities and High Income Fund, a non-diversified, closed-end
management investment company organized as a statutory trust under the laws of
the State of Delaware (the "Fund"), is offering to purchase up to 5%, or 575,250
in the aggregate, of its issued and outstanding common shares, no par value (the
"Shares"), to fulfill an undertaking made in connection with the initial public
offering of the Shares. See Section 2. The offer is for cash at a price equal to
the net asset value ("NAV") per Share determined as of the close of the regular
trading session of the New York Stock Exchange (the "NYSE"), on the day after
the date the offer expires, and is upon the terms and subject to the conditions
set forth in this Offer to Purchase and the related Letter of Transmittal (which
together with any amendments or supplements thereto collectively constitute the
"Offer"). The Offer will expire at 5:00 p.m. Eastern Time on January 24, 2005,
unless extended. The Shares are traded on the American Stock Exchange (the
"AMEX") under the symbol "ERH." The NAV as of the close of the regular trading
session of the NYSE on December 14, 2004 was $22.45 per Share. During the
pendancy of the Offer, current NAV quotations can be obtained from various
public websites that report prices of mutual funds and stocks. The symbol for
obtaining NAV quotations is "XERHX." You may also call EquiServe Trust Company,
N.A. (the "Depositary"), at 1-888-396-7866 between the hours of 9:00 a.m. and
5:00 p.m. Eastern Time, Monday through Friday (except holidays).

           THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 3.

                              IMPORTANT INFORMATION

Shareholders who desire to tender their Shares should either: (1) properly
complete and sign the Letter of Transmittal, provide thereon the original of any
required signature guarantee(s) and mail or deliver it together with the Shares
(in proper certificated or uncertificated form), any other documents required by
the Letter of Transmittal; or (2) request their broker, dealer, commercial bank,
trust company or other nominee to effect the transaction on their behalf.
Shareholders who desire to tender Shares registered in the name of such a firm
must contact that firm to effect a tender on their behalf. Tendering
Shareholders will not be obligated to pay brokerage commissions in connection
with their tender of Shares, but they may be charged a fee by such a firm for
processing the tender(s). The Fund reserves the absolute right to reject tenders
determined not to be in appropriate form.

       If you do not wish to tender your Shares, you need not take any action.

       NEITHER THE FUND NOR ITS BOARD OF TRUSTEES NOR EVERGREEN INVESTMENT
       MANAGEMENT COMPANY, LLC (THE "ADVISOR") MAKES ANY RECOMMENDATION TO ANY
       SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. NO
       PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE
       FUND, ITS BOARD OF TRUSTEES OR THE ADVISOR AS TO WHETHER SHAREHOLDERS
       SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER OR
       TO MAKE ANY REPRESENTATION OR TO GIVE ANY INFORMATION IN CONNECTION WITH
       THE OFFER OTHER THAN AS CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL.
       IF MADE OR GIVEN, ANY SUCH RECOMMENDATION, REPRESENTATION OR INFORMATION
       MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND, ITS BOARD
       OF TRUSTEES OR THE ADVISOR. SHAREHOLDERS ARE URGED TO EVALUATE CAREFULLY
       ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX
       ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER OR REFRAIN FROM
       TENDERING THEIR SHARES.








                                        i
{W0114355; 4}
                               SUMMARY TERM SHEET

                                          (Section references are to this Offer
to Purchase.)

This Summary Term Sheet highlights certain information concerning this tender
offer. To understand the offer fully and for a more complete discussion of the
terms and conditions of the offer, you should read carefully the entire Offer to
Purchase and the related Letter of Transmittal.

What is the tender offer?

         Evergreen Utilities and High Income Fund (the "Fund") is offering to
         purchase 5%, or 575,250 in the aggregate, of its common shares for cash
         at a price per share equal to the per share net asset value as of the
         close of the regular trading session of the New York Stock Exchange
         ("NYSE") on January 25, 2005 (or, if the offer is extended, on the date
         after the date to which the offer is extended) upon specified terms and
         subject to conditions as set forth in the tender offer documents.

Why is the Fund making this tender offer?

         The Fund is making this tender offer pursuant to the Evergreen Enhanced
         Liquidity Plan, as described in the Fund's Prospectus dated April 27,
         2004 (the "Prospectus"). In the Prospectus, the Board of Trustees
         committed to make tender offers for the Fund's common shares under
         certain circumstances and subject to certain conditions. Beginning six
         to eight months after the Fund's commencement of operations (for a
         total of eight consecutive calendar quarters), in the event that the
         Fund's common shares trade at a discount to net asset value of greater
         than 5% for fifteen of twenty days during a specific measurement
         period, the Fund, under normal circumstances, will make offers to
         purchase up to 5% of its outstanding common shares at their net asset
         value from all beneficial shareholders. During the fourth quarter of
         2004, the Fund did trade at a discount of greater than 5% for at least
         fifteen days during the measurement period.

When will the tender offer expire, and may the offer be extended?

         The tender offer will expire at 5:00 p.m. Eastern Time on January 24,
         2005, unless extended. The Fund may extend the period of time the offer
         will be open by issuing a press release or making some other public
         announcement by no later than the next business day after the offer
         otherwise would have expired. See Section 15.

What is the net asset value per Fund share and the closing sale price on the
American Stock Exchange per Fund share as of a recent date?

         As of December 14, 2004, the net asset value per share was $22.45 and
         the closing sale price per share was $20.06. See Section 8 of the Offer
         to Purchase for details. During the pendancy of the offer, current net
         asset value quotations can be obtained from either: (1) various public
         websites that report prices of mutual funds and stocks, under the
         symbol "XERHX" or (2) EquiServe Trust Company, N.A. by calling (888)
         396-7866 between 9:00 a.m. and 5:00 p.m. Eastern Time, Monday through
         Friday (except holidays). You can find the current market price per
         share, as quoted on the American Stock Exchange (the "AMEX"), under the
         symbol "ERH".

Will the net asset value be higher or lower on the date that the price to be
paid for tendered shares is to be determined?

         No one can accurately predict the net asset value at a future date.

What happens if I tender my shares and the net asset value on the date of
determination of the tender price is lower than the then current market price
per share on the AMEX?

         You would receive less money for your shares than if you had sold them
on the AMEX.

How do I tender my shares?

         If your shares are registered in your name, you should obtain the
         tender offer materials, including the Offer to Purchase and the related
         Letter of Transmittal, read them, and if you decide to tender, complete
         a Letter of Transmittal and submit any other documents required by the
         Letter of Transmittal. These materials must be received by EquiServe
         Trust Company, N.A., the Depositary, in proper form before 5:00 p.m.
         Eastern Time on January 24, 2005 (unless the tender offer is extended
         by the Fund in which case the new deadline will be as stated in the
         public announcement of the extension).

         If your shares are held by a broker, dealer, commercial bank, trust
         company or other nominee (e.g., in "street name"), you should contact
         that firm to obtain the package of information necessary to make your
         decision, and you can only tender your shares by directing that firm to
         complete, compile and deliver the necessary documents for submission to
         the Depositary by January 24, 2005 (or if the offer is extended, the
         expiration date as extended). See Section 4.

Is there any cost to me to tender?

         The Fund will not charge a fee to process a tender. However, your
         broker, dealer, commercial bank, trust company or other nominee may
         charge you fees according to its individual policies. See the Letter of
         Transmittal.

May I withdraw my shares after I have tendered them and, if so, by when?

         Yes, you may withdraw your shares at any time prior to 5:00 p.m.
         Eastern Time on January 24, 2005 (or if the offer is extended, at any
         time prior to 5:00 p.m. Eastern Time on the new expiration date).
         Withdrawn shares may be re-tendered by following the tender procedures
         before the offer expires (including any extension period). In addition,
         if shares tendered have not by then been accepted for payment, you may
         withdraw your tendered shares at any time after February 18, 2005. See
         Section 5.

How do I withdraw tendered shares?

         A notice of withdrawal of tendered shares must be timely received by
         EquiServe Trust Company, N.A., which specifies the name of the
         shareholder who tendered the shares, the number of shares being
         withdrawn (which must be all of the shares tendered) and, as regards
         share certificates which represent tendered shares that have been
         delivered or otherwise identified to EquiServe Trust Company, N.A., the
         name of the registered owner of such shares if different than the
         person who tendered the shares. See Section 5.

May I place any conditions on my tender of shares?

         No.

Is there a limit on the number of shares I may tender?

         There is no limit on the number of shares that you may tender. If you
         own fewer than 100 shares in total, you must tender either all or none
         of your shares. If you hold 100 or more shares, your tender will be
         proper only if you tender at least 20% of the Fund shares you own or
         which you are considered to own under specified federal tax rules. See
         Sections 1 and 14.

What if more than 575,250 shares are tendered (and not timely withdrawn)?

         The Fund will purchase duly tendered shares from tendering shareholders
         pursuant to the terms and conditions of the tender offer on a pro rata
         basis in accordance with the number of shares tendered by each
         shareholder (and not timely withdrawn), unless the Fund determines not
         to purchase any shares. If a shareholder owns and tenders fewer than
         100 shares, the Fund will purchase all shares tendered by such
         shareholder. The Fund's present intention, if the tender offer is
         oversubscribed, is not to purchase more than 575,250 shares. See
         Section 1.

If I decide not to tender, how will the tender offer affect the Fund shares I
hold?

         Your percentage ownership interest in the Fund will increase after
completion of the tender offer. See Section 11.

Does the Fund have the financial resources to make payment?

         Yes. Although permitted to do so, the Fund does not expect to borrow
money to finance the purchase of any tendered shares.

If shares I tender are accepted by the Fund, when will payment be made?

         It is contemplated, subject to change, that payment for tendered
         shares, if accepted, will be made on or about January 28, 2005. See
         Section 6.

Is my sale of shares in the tender offer a taxable transaction?

It is anticipated that U.S. shareholders (other than those who are tax-exempt)
who sell shares in the tender offer will generally recognize gain or loss for
U.S. federal income tax purposes equal to the difference between the cash they
receive for the shares sold and their adjusted basis in the shares. The sale
date for tax purposes will be the date the Fund accepts shares for purchase. See
Section 14 for details, including the nature of the income or loss and the
differing rules for U.S. and non-U.S. shareholders. Because the Fund has been in
operation for less than a year, any capital gains or losses recognized by a
shareholder would be short-term capital gains or losses. Please consult your tax
advisor for a more complete discussion of your potential tax consequences.

Is the Fund required to complete the tender offer and purchase all shares
tendered up to the number of shares tendered for?

         Under most circumstances, yes. There are certain circumstances,
         however, in which the Fund will not be required to purchase any shares
         tendered as described in Section 3.

Is there any reason shares tendered would not be accepted?

         In addition to those circumstances described in Section 3 in which the
         Fund is not required to accept tendered shares, the Fund has reserved
         the right to reject any and all tenders determined by it not to be in
         appropriate form. The Fund will reject tenders from any shareholder if
         less than 20% of the shares actually and constructively (as determined
         under the Internal Revenue Code) owned by the tendering shareholder are
         tendered or if the tender does not include original signature(s) or the
         original of any required signature guarantee(s).

How will tendered shares be accepted for payment?

         Properly tendered shares, up to the number tendered for, will be
         accepted for payment by a determination of the Fund's Board of Trustees
         followed by notice of acceptance to EquiServe Trust Company, N.A. which
         is thereafter to make payment as directed by the Fund with funds to be
         deposited with it by the Fund. See Section 6.

What action need I take if I decide not to tender my shares?

         None.

Does management encourage shareholders to participate in the tender offer, and
will they participate in the tender offer?

         No. Neither the Fund, its Board of Trustees nor the Fund's investment
         adviser is making any recommendation to tender or not to tender shares
         in the tender offer. No trustee or officer of the Fund intends to
         tender shares. See Section 10.

Will there be additional opportunities to tender shares to the Fund?

         The Board of Trustees of the Fund (the "Board") has committed to
         potentially making a tender offer in each of the Fund's next seven
         quarters (for a total of eight consecutive quarters) under certain
         circumstances and subject to certain conditions. In the event that the
         common shares trade at a discount to net asset value of greater than 5%
         for fifteen of twenty days during a specific measurement period in any
         such quarter, the Fund under normal circumstances, will make offers to
         purchase up to 5% of its outstanding common shares at their net asset
         value from all beneficial shareholders. The Fund will not undertake a
         tender offer if the Fund's common shares are not trading at a discount.
         Under certain circumstances, the Board may, however, decide that the
         Fund should not make a tender offer even if such shares are trading at
         a discount for the required number of days. See Section 2.

How do I obtain information?

         Questions and requests for assistance should be directed to EquiServe
         Trust Company, N.A., the Depository for the tender offer, toll free at
         (888) 396-7866. Requests for additional copies of the Offer to
         Purchase, the Letter of Transmittal and all other tender offer
         documents should be directed to EquiServe Trust Company, N.A., the
         Distribution Agent for the tender offer, at (732) 417-2653. If you do
         not own shares directly, you should obtain this information and the
         documents from your broker, dealer, commercial bank, trust company or
         other nominee, as appropriate.








                                       -1-

                                TABLE OF CONTENTS


                                                                                               
Section                                                                                           Page
                                                                                                  ----

Summary Term Sheet..............................................................................     i

1. Price; Number of Shares......................................................................     3

2. Purpose of the Offer; Plans or Proposals of the Fund.........................................     4

3. Certain Conditions of the Offer..............................................................     5

4. Procedures for Tendering Shares..............................................................     6

         a. Proper Tender of Shares.............................................................     6

         b. Signature Guarantees and Method of Delivery.........................................     7

         c. Dividend Reinvestment Plan..........................................................     8

         d. Book-Entry Delivery.................................................................     8

         e. Guaranteed Delivery.................................................................     8

         f. Determinations of Validity..........................................................     9

         g. United States Federal Income Tax Withholding........................................    10

5. Withdrawal Rights............................................................................    11

6. Payment for Shares...........................................................................    11

7. Source and Amount of Funds...................................................................    12

8. Price Range of Shares; Dividends/Distributions...............................................    13

9. Selected Financial Information...............................................................    14

10. Interest of Trustees, Executive Officers and Certain Related Persons                            15

11. Certain Effects of the Offer................................................................    16

12. Certain Information about the Fund..........................................................    16

13. Additional Information......................................................................    17

14. Certain United States Federal Income Tax Consequences.......................................    18

15. Amendments; Extension of Tender Period; Termination.........................................    21

16. Miscellaneous...............................................................................    21











1. Price; Number of Shares.

     Upon the terms and subject to the  conditions  of the Offer,  the Fund will
accept for payment and purchase for cash up to 5% or 575,250 in the aggregate of
its issued and outstanding  Shares that are properly tendered prior to 5:00 p.m.
Eastern Time on January 24, 2005 (and not withdrawn in  accordance  with Section
5). The Fund  reserves the right to amend,  extend or terminate  the Offer.  See
Sections 3 and 15. The Fund will not be obligated to purchase Shares pursuant to
the Offer under certain  circumstances.  See Section 3. The later of January 24,
2005 or the latest date to which the Offer is extended is hereinafter called the
"Expiration  Date." The purchase price of the Shares will be their NAV per Share
determined  as of the close of the  regular  trading  session of the NYSE on the
date after the  Expiration  Date. The Fund will not pay interest on the purchase
price  under any  circumstances.  The NAV on  December  14,  2004 was $22.45 per
Share. During the duration of the Offer,  current NAV quotations can be obtained
from various publicly available websites that publish mutual fund NAVs and stock
prices, under the symbol "XERHX," or by calling the Depositary at (888) 396-7866
between the hours of 9:00 a.m. and 5:00 p.m. Eastern Time, Monday through Friday
(except holidays).

     The  Offer  is  being  made  by the  Fund  to all  Shareholders  and is not
conditioned upon  Shareholders  tendering in the aggregate any minimum number of
Shares. However, a Shareholder wishing to accept the Offer is required to tender
at least  20% of the  Shares  owned by the  Shareholder  and  attributed  to the
Shareholder  for federal  income tax purposes  under Section 318 of the Internal
Revenue  Code of 1986,  as amended (the  "Code"),  as of the date of purchase of
Shares by the Fund  pursuant to the Offer.  There may be tax  consequences  to a
tendering   Shareholder   who  tenders  less  than  all  Shares  owned  by  such
Shareholder. See Section 14 concerning the tax consequences of tendering Shares.

     If more than 575,250  Shares are duly  tendered  pursuant to the Offer (and
not  withdrawn  as  provided in Section 5),  unless the Fund  determines  not to
purchase any Shares, the Fund will purchase Shares from tendering  Shareholders,
in accordance  with the terms and  conditions  specified in the Offer,  on a pro
rata  basis,  in  accordance  with the number of Shares  duly  tendered by or on
behalf of each Shareholder (and not so withdrawn). However, the Fund will accept
all Shares tendered by any Shareholder who owns,  beneficially or of record,  an
aggregate of not more than 99 Shares and who tenders all such Shares by means of
the  Letter of  Transmittal  tendered  by or on behalf of that  Shareholder.  If
Shares  duly  tendered  by or on behalf of a  Shareholder  include  Shares  held
pursuant to the Fund's Dividend Reinvestment Plan, the proration will be applied
first with  respect to other  Shares  tendered  and only  thereafter,  if and as
necessary,  with respect to Shares held pursuant to that Plan. The Fund does not
contemplate  extending  the Offer and  increasing  the number of Shares  covered
thereby by reason of more than 575,250 Shares having been tendered.

     On December 1, 2004,  there were 11,505,000  Shares issued and outstanding,
and there  were 61 holders  of record of  Shares.  Certain  of these  holders of
record were  brokers,  dealers,  commercial  banks,  trust  companies  and other
institutions  that held Shares in nominee name on behalf of multiple  beneficial
owners.







2. Purpose of the Offer; Plans or Proposals of the Fund.

     The purpose of the Offer is to fulfill an  undertaking  made in  connection
with the  initial  public  offering  of the  Shares,  as set forth in the Fund's
Prospectus dated April 27, 2004 (the "Prospectus").  In the Prospectus, the Fund
indicated that, in recognition of the possibility that the Shares might trade at
a discount to NAV, the Fund's Board of Trustees  (the "Board of Trustees" or the
"Board") had determined that it would be in the interest of Shareholders to take
action to attempt to reduce or eliminate a market value discount from NAV.

     In this regard,  in the Prospectus,  the Board of Trustees has committed to
make tender offers for the Fund's common shares under certain  circumstances and
subject to certain  conditions.  Beginning  six to eight months after the Fund's
commencement of operations (for a total of eight consecutive calendar quarters),
in the event  that the Fund's  common  shares  trade at a discount  to net asset
value  of  greater  than  5% for  fifteen  of  twenty  days  during  a  specific
measurement period (initially the twenty-first  through fortieth trading days of
a quarter)(the "measurement period"), the Fund under normal circumstances,  will
make offers to purchase up to 5% of its  outstanding  common shares at their net
asset  value from all  beneficial  shareholders.  The Fund will not  undertake a
tender  offer if the Fund's  common  shares are not trading at a  discount.  The
Board reserves the right to modify the conditions described in this paragraph in
light of experience.

     Pursuant to the Fund's  Prospectus,  October 29, 2004 through  November 26,
2004 were set as the measurement  period for purposes of determining  whether an
initial tender offer was required to be conducted. For twenty valuation days out
of the twenty-day  measurement  period,  the average trading price of the Shares
was  approximately  $19.59 per Share,  and the average NAV per Share on the same
days was  approximately  $21.73,  reflecting  an average  discount of 9.9%. As a
result,  the Advisor  recommended  that the Board  consider  conducting a tender
offer for up to 5% of the Fund's Shares. At a meeting on December 8-9, 2004, the
Board considered this recommendation and reviewed  information  provided to them
relating to the same and approved a tender offer by the Fund.  Accordingly,  the
Fund is conducting  its first tender offer  pursuant to the  Evergreen  Enhanced
Liquidity  Plan as described in its  Prospectus  (the "Initial  Tender Offer" or
"Offer").

     In  addition,  the  Board  may  consider  from  time  to time  open  market
repurchases of the Fund's outstanding common shares. The Board may also consider
other steps to reduce or eliminate  the Fund's  market value  discount from NAV.
There can be no assurance that the Board will  authorize any such action.  There
can also be no  assurance  that the Offer,  other  share  tender  offers,  share
repurchases  or other  steps will  result in the Shares  trading at a price that
approximates  or is equal to their NAV.  The market  price of the Shares will be
determined by, among other things,  the relative demand for and supply of Shares
in the market,  the Fund's  investment  performance,  the Fund's  dividends  and
yield,  and  investor  perception  of the Fund's  overall  attractiveness  as an
investment as compared with other investment alternatives.

     Except  as set  forth  above,  as  referred  to in  Section  7 or the  last
paragraph  of Section  10, or in  connection  with the  operation  of the Fund's
Dividend  Reinvestment  Plan,  the  Fund  does not  have  any  present  plans or
proposals and is not engaged in any negotiations  that relate to or would result
in (a) any  extraordinary  transaction,  such  as a  merger,  reorganization  or
liquidation,  involving the Fund or any of its  subsidiaries;  (b) other than in
connection with transactions in the ordinary course of the Fund's operations and
for purposes of funding the Offer, any purchase,  sale or transfer of a material
amount of assets of the Fund or any of its subsidiaries; (c) any material change
in the Fund's present dividend rate or policy, or indebtedness or capitalization
of the Fund; (d) any change in the composition of the Board or management of the
Fund, including, but not limited to, any plans or proposals to change the number
or the term of members of the Board, to fill any existing vacancies on the Board
or to change any  material  term of the  employment  contract  of any  executive
officer;  (e) any other  material  change in the Fund's  corporate  structure or
business,  including  any plans or  proposals  to make any changes in the Fund's
investment  policy  for which a vote  would be  required  by  Section  13 of the
Investment  Company Act of 1940,  as amended (the "1940 Act");  (f) any class of
equity securities of the Fund to be delisted from a national securities exchange
or to cease to be  authorized  to be quoted in an  automated  quotations  system
operated  by  a  national  securities  association;  (g)  any  class  of  equity
securities  of the  Fund  becoming  eligible  for  termination  of  registration
pursuant to Section  12(g)(4) of the Securities  Exchange Act of 1934 as amended
(the  "Exchange  Act");  (h) the  suspension  of the Fund's  obligation  to file
reports  pursuant to Section 15(d) of the Exchange Act; (i) the  acquisition  by
any  person  of  additional  securities  of  the  Fund,  or the  disposition  of
securities  of the Fund;  or (j) any  changes in the Fund's  charter,  bylaws or
other  governing  instruments or other actions that could impede the acquisition
of control of the Fund.

3. Certain Conditions of the Offer.

     Notwithstanding  any other  provision of the Offer or the  Prospectus,  the
policy of the Board,  which may be  changed by the Board,  is that the Fund will
not purchase Shares pursuant to the Offer if (1) such purchases would impair the
Fund's  status as a  regulated  investment  company  under the  Federal tax laws
(which  would make the Fund a taxable  entity,  causing the Fund's  income to be
taxed at the  corporate  level in addition to the taxation of  Shareholders  who
receive  dividends  from the Fund);  (2) the Fund would not be able to liquidate
portfolio  securities in a manner that is orderly and consistent with the Fund's
investment  objective and policies in order to purchase  tendered common shares;
(3) such action would  result in the Fund failing to satisfy the American  Stock
Exchange's  minimum  listing  requirements  (the market value of the outstanding
publicly held Shares must be at least  $10,000,000 and the Evergreen  closed-end
funds that are listed on the AMEX as a group  (including  the Fund) must have an
average  market  value  of  publicly  held  shares  or net  assets  of at  least
$15,000,000  and a total market value of publicly held shares or net assets as a
group of at least $75,000,000); or (4) there is, in the judgment of the Board of
Trustees,   any  (a)  legal  action  or  proceeding   instituted  or  threatened
challenging  the tender offer or otherwise  materially  adversely  affecting the
Fund, (b) declaration of a banking moratorium by Federal or state authorities or
any  suspension of payment by banks in the United  States,  which is material to
the  Fund,  (c)  limitation  imposed  by  Federal  or state  authorities  on the
extension of credit by lending  institutions,  (d)  commencement  of war,  armed
hostilities or other  international or national  calamity directly or indirectly
involving the United States which is material to the Fund,  (e) suspension of or
limitation on prices for trading securities generally on the AMEX or any foreign
exchange on which portfolio  securities of the Fund are traded;  (f) other event
or  condition  that  would  have a  material  adverse  effect on the Fund or its
shareholders  if  tendered  common  shares  were  purchased;  or (g)  the  Board
determines  that effecting the  transaction  would  constitute a breach of their
fiduciary  duty  owed  the  Fund  or its  stockholders.  Thus,  there  can be no
assurance  that the Board of Trustees  will proceed with any tender  offer.  The
Board of Trustees may modify these conditions in light of circumstances existing
at the time or in light of experience.

     The  foregoing  conditions  are  for the  Fund's  sole  benefit  and may be
asserted by the Fund  regardless  of the  circumstances  giving rise to any such
condition (including any action or inaction of the Fund), and any such condition
may be  waived by the  Fund,  in whole or in part,  at any time and from time to
time in its reasonable judgment.  The Fund's failure at any time to exercise any
of the  foregoing  rights  shall not be deemed a waiver of any such  right;  the
waiver of any such right  with  respect to  particular  facts and  circumstances
shall not be deemed a waiver with  respect to any other facts or  circumstances;
and each such right  shall be deemed an ongoing  right  which may be asserted at
any time and from time to time.  Any  determination  by the Fund  concerning the
events described in this Section 3 shall be final and binding.

The  Fund  reserves  the right,  at any time during the duration of the
Offer, to amend, extend or terminate the Offer in any respect. See Section 15.

4. Procedures for Tendering Shares.

         a. Proper Tender of Shares.

     For  Shares to be  properly  tendered  pursuant  to the  Offer,  a properly
completed and duly executed Letter of Transmittal bearing original  signature(s)
and the original of any required signature guarantee(s), all Shares actually, or
as  determined  under  Section  318 of the  Code  constructively,  owned  by the
tendering  Shareholder  to be  tendered  (see  Sections  1 and  14)  (in  proper
certificated or  uncertificated  form), and any other documents  required by the
Letter of  Transmittal  must be received by the  Depositary  at the  appropriate
address set forth on the back cover of this Offer before 5:00 p.m.  Eastern Time
on the Expiration  Date.  Those  Shareholders  who tender less than all of their
Shares  must  include  in the Letter of  Transmittal  (or  facsimile  thereof) a
representation  stating that such Shareholder is tendering less than all, but at
least 20% of the Shares owned by such  Shareholder  or  attributed to them under
Section  318 of the Code,  pursuant  to the Offer.  Letters of  Transmittal  and
certificates representing tendered Shares should not be sent or delivered to the
Fund.  Shareholders  who  desire to tender  Shares  registered  in the name of a
broker,  dealer,  commercial  bank,  trust company or other nominee must contact
that firm to effect a tender on their behalf.

     Section  14(e) of the  Exchange Act and Rule 14e-4  promulgated  thereunder
make it  unlawful  for any  person,  acting  alone or in  concert  with  others,
directly or  indirectly,  to tender  Shares in a partial  tender  offer for such
person's  own account  unless at the time of tender,  and at the time the Shares
are accepted for payment,  the person tendering has a net long position equal to
or greater  than the amount  tendered in (a) Shares and will deliver or cause to
be delivered such Shares for the purpose of tender to the Fund within the period
specified in the Offer,  or (b) an equivalent  security and, upon the acceptance
of his or her tender, will acquire Shares by conversion,  exchange,  or exercise
of such  equivalent  security to the extent  required by the terms of the Offer,
and will deliver or cause to be delivered the Shares so acquired for the purpose
of tender to the Fund prior to or on the Expiration Date. Section 14(e) and Rule
14e-4 provide a similar  restriction  applicable to the tender or guarantee of a
tender on behalf of another person.

     The acceptance of Shares by the Fund for payment will  constitute a binding
agreement  between  the  tendering  Shareholder  and the Fund upon the terms and
subject to the  conditions of the Offer,  including the tendering  Shareholder's
representation  that the Shareholder has a net long position in the Shares being
tendered  within the  meaning  of Rule 14e-4 and that the tender of such  Shares
complies with Rule 14e-4.

         b. Signature Guarantees and Method of Delivery.

         No signature guarantee is required if (a) the Letter of Transmittal is
signed by the registered holder(s) (including, for purposes of this document,
any participant in The Depository Trust Company ("DTC") book-entry transfer
facility whose name appears on DTC's security position listing as the owner of
Shares) of the Shares tendered thereby, unless such holder(s) has completed
either the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" in the Letter of Transmittal or (b) the Shares
tendered are tendered for the account of a firm (an "Eligible Institution")
which is a broker, dealer, commercial bank, credit union, savings association or
other entity and which is a member in good standing of a stock transfer
association's approved medallion program (such as STAMP, SEMP or MSP). In all
other cases, all signatures on the Letter of Transmittal must be guaranteed by
an Eligible Institution. See Instruction 5 of the Letter of Transmittal.

         If the Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered thereby, the signature(s) must correspond with the name(s)
as written on the face of the certificate(s) for the Shares tendered without
alteration, enlargement or any change whatsoever.

         If any of the Shares tendered thereby are owned of record by two or
more joint owners, all such owners must sign the Letter of Transmittal.

         If any of the tendered Shares are registered in different names
(including Shares constructively owned by the tendering Shareholder as
determined under Section 318 of the Code which must also be tendered--see
Sections 1 and 14), it is necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations.

         If the Letter of Transmittal or any certificates for Shares tendered or
stock powers relating to Shares tendered are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons should so
indicate when signing, and proper evidence satisfactory to the Fund of their
authority so to act must be submitted.

         If the Letter of Transmittal is signed by the registered holder(s) of
the Shares transmitted therewith, no endorsements of certificates or separate
stock powers with respect to such Shares are required unless payment is to be
made to, or certificates for Shares not purchased are to be issued in the name
of, a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.

         If the Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed thereon, the certificate(s)
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s) for the Shares involved. Signatures on such certificates or stock
powers must be guaranteed by an Eligible Institution. See Section 6.

         c. Dividend Reinvestment Plan.

         EquiServe Trust Company, N.A., the Fund's Transfer Agent, holds Shares
in uncertificated form for certain Shareholders pursuant to the Fund's Dividend
Reinvestment Plan. See Section 1 concerning the manner in which any necessary
proration will be made.

         d. Book-Entry Delivery.

         The Depositary has established an account with respect to the Shares at
DTC for purposes of the Offer. Any financial institution that is a participant
in the DTC system may make book-entry delivery of tendered Shares by causing DTC
to transfer such Shares into the Depositary's account at DTC in accordance with
DTC's procedures for such transfers. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at DTC, a
Letter of Transmittal properly completed and bearing original signature(s) and
the original of any required signature guarantee(s), or an Agent's Message (as
defined below) in connection with a book-entry transfer, and any other documents
required by the Letter of Transmittal, must in any case be received by the
Depositary prior to 5:00 p.m. Eastern Time on the Expiration Date at one of its
addresses set forth on the back cover of this Offer, or the tendering
Shareholder must comply with the guaranteed delivery procedures described below.

         The term "Agent's Message" means a message from DTC transmitted to, and
received by, the Depositary forming a part of a timely confirmation of a
book-entry transfer of Shares (a "Book-Entry Confirmation") which states that
(a) DTC has received an express acknowledgment from the DTC participant
tendering the Shares that are the subject of the Book-Entry Confirmation, (b)
the DTC participant has received and agrees to be bound by the terms of the
Letter of Transmittal, and (c) the Fund may enforce such agreement against the
DTC participant.

         Delivery of documents to DTC in accordance with DTC's procedures does
not constitute delivery to the Depositary.

         e. Guaranteed Delivery.

         Notwithstanding the foregoing, if a Shareholder desires to tender
Shares pursuant to the Offer and the certificates for the Shares to be tendered
are not immediately available, or time will not permit the Letter of Transmittal
and all documents required by the Letter of Transmittal to reach the Depositary
prior to 5:00 p.m. Eastern Time on the Expiration Date, or a Shareholder cannot
complete the procedures for delivery by book-entry transfer on a timely basis,
then such Shareholder's Shares may nevertheless be tendered, provided that all
of the following conditions are satisfied:

             (i) the tender is made by or through an Eligible Institution; and

             (ii) a properly completed and duly executed Notice of Guaranteed
             Delivery in the form provided by the Fund is received by the
             Depositary prior to 5:00 pm Eastern Time on the Expiration Date;
             and

             (iii) the certificates for all such tendered Shares, in proper form
             for transfer, or a Book-Entry Confirmation with respect to such
             Shares, as the case may be, together with a Letter of Transmittal
             properly completed and bearing original signature(s) and the
             original of any required signature guarantee(s) (or, in the case of
             a book- entry transfer, an Agent's Message), and any documents
             required by the Letter of Transmittal, are received by the
             Depositary prior to 5:00 P.M. Eastern Time on the second AMEX
             trading day after the date of execution of the Notice of Guaranteed
             Delivery.

         The Notice of Guaranteed Delivery may be delivered by hand or
       transmitted by facsimile transmission or mail to the Depositary and must
       include a guarantee by an Eligible Institution and a representation that
       the Shareholder owns the Shares tendered within the meaning of, and that
       the tender of the Shares effected thereby complies with, Rule 14e-4 under
       the Exchange Act, each in the form set forth in the Notice of Guaranteed
       Delivery.

THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND
SOLE RISK OF THE TENDERING STOCKHOLDER. IF DOCUMENTS ARE SENT BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.

         Shareholders have the responsibility to cause their Shares tendered (in
proper certificated or uncertificated form), the Letter of Transmittal properly
completed and bearing original signature(s) and the original of any required
signature guarantee(s), and any other documents required by the Letter of
Transmittal, to be timely delivered. Timely delivery is a condition precedent to
acceptance of Shares for purchase pursuant to the Offer and to payment of the
purchase amount.

         Notwithstanding any other provision hereof, payment for Shares accepted
for payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares (if available), a Letter
of Transmittal properly completed and bearing original signature(s) and the
original of any required signature guarantee(s) or, in the case of a book-entry
transfer, an Agent's Message, and any other documents required by the Letter of
Transmittal.

         f. Determinations of Validity.

         All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tenders will be determined by the Fund, in its sole
discretion, which determination shall be final and binding. The Fund reserves
the absolute right to reject any or all tenders determined not to be in
appropriate form or to refuse to accept for payment, purchase, or pay for, any
Shares if, in the opinion of the Fund's counsel, accepting, purchasing or paying
for such Shares would be unlawful. The Fund also reserves the absolute right to
waive any of the conditions of the Offer or any defect in any tender, whether
generally or with respect to any particular Share(s) or Shareholder(s). The
Fund's interpretations of the terms and conditions of the Offer shall be final
and binding.

NEITHER THE FUND, ITS BOARD OF TRUSTEES, THE ADVISOR, THE DEPOSITARY NOR ANY
OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR
IRREGULARITY IN ANY TENDER, AND NONE OF THEM WILL INCUR ANY LIABILITY FOR
FAILURE TO GIVE ANY SUCH NOTICE.

         g. United States Federal Income Tax Withholding.

         To prevent the imposition of U.S. federal backup withholding tax equal
to 28% of the gross payments made pursuant to the Offer, prior to such payments
each Shareholder accepting the Offer who has not previously submitted to the
Fund a correct, completed and signed Internal Revenue Service ("IRS") Form W-9
("Form W-9") (for U.S. Shareholders) or IRS Form W-8BEN ("Form W-8BEN") (or, if
appropriate, Form W-8IMY ("Form W-8IMY")) (for non-U.S. Shareholders), or
otherwise established an exemption from such withholding, must submit the
appropriate form to the Depositary. See Section 14.

         Under certain circumstances (see Section 14), the Depositary will
withhold a tax equal to 30% of the gross payments payable to a non-U.S.
Shareholder unless the Depositary determines that a reduced rate of withholding
or an exemption from withholding is applicable. (Exemption from backup
withholding tax does not exempt a non-U.S. Shareholder from the 30% withholding
tax.) For this purpose, a "Non-U.S. Shareholder", is, in general, a Shareholder
that is not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, (iii) an estate the income
of which is subject to United States federal income taxation regardless of the
source of such income, or (iv) a trust if (A) a court within the United States
is able to exercise primary supervision over the administration of the trust and
(B) one or more U.S. persons have the authority to control all substantial
decisions of the trust.

         The Depositary will determine a Shareholder's status as a Non-U.S.
Shareholder and the Shareholder's eligibility for a reduced rate of, or an
exemption from, withholding by reference to any outstanding certificates or
statements concerning such eligibility, unless facts and circumstances indicate
that such reliance is not warranted. A Non-U.S. Shareholder that has not
previously submitted the appropriate certificates or statements with respect to
a reduced rate of, or exemption from, withholding for which such Shareholder may
be eligible should consider doing so in order to avoid over-withholding. See
Section 14.







5. Withdrawal Rights.

         At any time prior to 5:00 p.m. Eastern Time on the Expiration Date,
and, if the Shares have not by then been accepted for payment by the Fund, at
any time after February 18, 2005, any Shareholder may withdraw all, but not less
than all, of the Shares that the Shareholder has tendered.

         To be effective, a written notice of withdrawal of Shares tendered must
be timely received by the Depositary at the appropriate address set forth on the
back cover of this Offer. Shareholders may also send a facsimile transmission
notice of withdrawal, which must be timely received by the Depositary at (781)
380-3388 (confirm by telephone at (781) 843-1833 ext 200), and the original
notice of withdrawal must be delivered to the Depositary by overnight courier or
by hand the next day. Any notice of withdrawal must specify the name(s) of the
person having tendered the Shares to be withdrawn, the number of Shares to be
withdrawn and, if one or more certificates representing such Shares have been
delivered or otherwise identified to the Depositary, the name(s) of the
registered owner(s) of such Shares as set forth in such certificate(s) if
different from the name(s) of the person tendering the Shares. If one or more
certificates have been delivered to the Depositary, then, prior to the release
of such certificate(s), the certificate number(s) shown on the particular
certificate(s) evidencing such Shares must also be submitted and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution.

         All questions as to the validity, form and eligibility (including time
of receipt) of notices of withdrawal will be determined by the Fund in its sole
discretion, which determination shall be final and binding. Shares properly
withdrawn will not thereafter be deemed to be tendered for purposes of the
Offer. Withdrawn Shares, however, may be re-tendered by following the procedures
described in Section 4 prior to 5:00 p.m. Eastern Time on the Expiration Date.
Except as otherwise provided in this Section 5, tenders of Shares made pursuant
to the Offer will be irrevocable.

NEITHER THE FUND, ITS BOARD OF TRUSTEES, THE ADVISOR, THE DEPOSITARY NOR ANY
OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR
IRREGULARITY IN ANY NOTICE OF WITHDRAWAL, NOR SHALL ANY OF THEM INCUR ANY
LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE.

6. Payment for Shares.

         For purposes of the Offer, the Fund will be deemed to have accepted for
payment and purchased Shares that are tendered (and not withdrawn in accordance
with Section 5 pursuant to the Offer) when, as and if it gives oral or written
notice to the Depositary of its acceptance of such Shares for payment pursuant
to the Offer. Under the Exchange Act, the Fund is obligated to pay for or return
tendered Shares promptly after the termination, expiration or withdrawal of the
Offer. Upon the terms and subject to the conditions of the Offer, the Fund will
pay for Shares properly tendered as soon as practicable after the Expiration
Date. The Fund will make payment for Shares purchased pursuant to the Offer by
depositing the aggregate purchase price therefor with the Depositary, which will
make payment to Shareholders promptly as directed by the Fund. The Fund will not
pay interest on the purchase price under any circumstances.

         In all cases, payment for Shares purchased pursuant to the Offer will
be made only after timely receipt by the Depositary of: (a) a Letter of
Transmittal properly completed and bearing original signature(s) and any
required signature guarantee(s), (b) such Shares (in proper certificated or
uncertificated form), and (c) any other documents required by the Letter of
Transmittal. Shareholders may be charged a fee by a broker, dealer or other
institution for processing the tender requested. Certificates representing
Shares tendered but not purchased will be returned promptly following the
termination, expiration or withdrawal of the Offer, without further expense to
the tendering Shareholder. The Fund will pay any transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, tendered
Shares are registered in the name of any person other than the person signing
the Letter of Transmittal, the amount of any such transfer taxes (whether
imposed on the registered owner or such other person) payable on account of the
transfer to such person of such Shares will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted. The Fund may not be obligated to purchase Shares
pursuant to the Offer under certain conditions. See Section 3.

         Any tendering Shareholder or other payee who has not previously
submitted a correct, completed and signed Form W-8BEN (or, if appropriate, Form
W-8IMY) or Form W-9, as necessary, and who fails to complete fully and sign
either the Form W-8BEN (or, if appropriate, Form W-8IMY) or Substitute Form W-9
accompanying the Letter of Transmittal and provide that form to the Depositary,
may be subject to federal backup withholding tax of 28% of the gross proceeds
paid to such Shareholder or other payee pursuant to the Offer. See Section 14
regarding this tax as well as possible withholding at the rate of 30% (or lower
applicable treaty rate) on the gross proceeds payable to tendering Non-U.S.
Shareholders.

7. Source and Amount of Funds.

         The total cost to the Fund of purchasing 575,250 of its issued and
outstanding Shares pursuant to the Offer would be $12,914,362 (based on a price
per Share of $22.45, the NAV as of the close of the regular trading session of
the NYSE on December 14, 2004). On December 14, 2004, the aggregate value of the
Fund's net assets was $258,335,128.

         To pay the aggregate purchase price of Shares accepted for payment
pursuant to the Offer, the Fund anticipates that funds will first be derived
from any cash on hand and then, if necessary, from the proceeds from the sale of
portfolio securities held by the Fund. The selection of which portfolio
securities to sell, if any, will be made by the Advisor, taking into account
investment merit, relative liquidity and applicable investment restrictions and
legal requirements. The Fund reserves the right to finance a portion of the
Offer through temporary borrowing, although it does not currently intend to do
so.

         The purchase of Shares by the Fund will decrease the net assets of the
Fund and, therefore, have the effect of increasing the Fund's expense ratio. In
addition, the purchases may have an adverse effect on the Fund's investment
performance.

         Because the Fund may sell portfolio securities to raise cash for the
purchase of Shares, while the Offer is pending, and possibly for a short time
thereafter, the Fund may hold a greater than normal percentage of its assets in
cash and cash equivalents, which would tend to decrease the Fund's net income.
As of December 14, 2004, cash and cash equivalents constituted approximately
0.64% of the Fund's total assets.

         Under some market circumstances, it may be necessary for the Fund to
raise cash by liquidating portfolio securities in a manner that could reduce the
market value of such securities and, thus, reduce both the NAV of the Shares and
the proceeds from the sale of such securities. Liquidating portfolio securities,
if necessary, may also lead to the premature disposition of portfolio
investments and additional transaction costs. Depending upon the timing of such
sales, any such decline in NAV may adversely affect any tendering Shareholders
whose Shares are accepted for purchase by the Fund, as well as those
Shareholders who do not sell Shares pursuant to the Offer. Shareholders who
retain their Shares may be subject to certain other effects of the Offer. See
Section 11.

8. Price Range of Shares; Dividends/Distributions.

The following table sets forth, for the periods indicated, the high and low NAVs
per Share and the high and low closing sale prices per Share as reported on the
AMEX, and the amounts of cash dividends/distributions per Share paid during such
periods.



                                              Net Asset Value              Market Price
                                          -----------------------      ---------------------       Dividends/
                                            High            Low          High          Low         Distributions
Fiscal Year (ending August 31, 2004)     ----------    ----------     ---------    ---------       --------------
                                                                                 

1st Quarter                                 N/A*           N/A*         N/A*         N/A*           N/A*
2nd Quarter                                 N/A*           N/A*         N/A*         N/A*           N/A*
3rd Quarter                               $18.95         $18.25       $20.01       $20.01       $-----
4th Quarter                               $19.76         $18.76       $19.76       $17.00       $0.3000

Fiscal Year (ending August 31, 2005)
1st Quarter                               $22.31         $19.81       $19.81       $18.01       $0.3000





                *The Fund commenced operations on April 30, 2004.

         As of the close of business on December 14, 2004, the Fund's NAV was
$22.45 per Share, and the high, low and closing prices per Share on the AMEX on
that date were $20.10, $19.97 and $20.06, respectively. During the time the
Offer is pending, current NAV quotations can be obtained by contacting the
Depositary in the manner indicated in Section 1.

         The tendering of Shares, unless and until Shares tendered are accepted
for payment and purchase, will not affect the record ownership of any such
tendered Shares for purposes of entitlement to any dividends payable by the
Fund.



9. Selected Financial Information.

         Set forth below is a summary of selected financial information for the
Fund as of and for the fiscal year ended August 31, 2004. The information with
respect to the fiscal year has been excerpted from the Fund's audited financial
statements contained in its Annual Report to Shareholders, a copy of which has
been filed with the Securities and Exchange Commission (the "SEC") and is
incorporated herein by reference. This Report was previously provided to
Shareholders. You may request a copy the Fund's Annual Report at no charge by
calling 1-800-343-2898 between 8:30 a.m. and 5:30 p.m., Eastern time, on any
business day. The summary of selected financial information set forth below is
qualified in its entirety by reference to such statements and the financial
information, the notes thereto and related matter contained therein.

SUMMARY OF SELECTED FINANCIAL INFORMATION

                         For the Period Indicated Below




                                                                Year Ended
                                                             _August 31, 2004
                                                                       ------
                                                               (Audited)

STATEMENT OF ASSETS AND LIABILITIES
(AT END OF PERIOD)
Total assets.................................................  $348,443,690
Total liabilities............................................  $ 41,060,232
Preferred shares at redemption value.........................  $ 80,055,663
Net assets...................................................  $227,327,795
Net asset value per Share....................................  $      19.76
Shares outstanding...........................................    11,505,000
STATEMENT OF OPERATIONS
Investment income............................................  $  9,907,003
Net expenses.................................................  $   (968,720)
                                                               ------------
Net investment income........................................  $  8,938,283
Net gain (loss) on investment transactions...................  $  3,776,166
Dividends to preferred shareholders .........................  $   (237,018)
                                                               ------------
Net increase (decrease) in net assets from operations (a)....  $ 12,477,431
                                                               ------------

SELECTED DATA FOR A SHARE OF COMMON STOCK
OUTSTANDING THROUGHOUT EACH PERIOD (a)
Income From Investment Operations
Net investment income........................................  0.77
Net realized and unrealized gain (loss) on investment
  transactions...............................................  0.32
                                                               ---

Net increase (decrease) in net asset value from operations...  1.09
                                                               ---

Dividends and Distributions
Dividends from net investment income.........................  (0.30)
                                                               ----
Total dividends and distributions............................  (0.30)
                                                               ----

Offering costs charged to capital............................  (0.13)

Net asset value, end of period...............................  $19.76
                                                               -----

Market value, end of period..................................  $18.29
                                                               ------

RATIOS
Expenses to average net assets (d)..............................1.31%@
Expenses to average net assets excluding interest expense (c)...1.02%@
Net investment income to average net assets.....................12.05%@
TOTAL INVESTMENT RETURN
Total investment return based on:
Market value (b)................................................(7.05%)

........................................................................


(a) For the period from April 30, 2004 (commencement of operations), to August
31, 2004.
(b) Total return is calculated assuming a purchase of common stock on the first
day and a sale of common stock on the last day of the period reported. Dividends
and distributions are assumed for the purposes of these calculations to be
reinvested at prices obtained under the Fund's Automatic Dividend Reinvestment
Plan. Total return does not reflect brokerage commissions or sales charges.
(c) The ratio of expenses to average net assets excludes interest expense and
expense reductions.
(d) The ratio of expenses to average net assets excludes expense reductions.
@ Annualized


10. Interest of Trustees, Executive Officers and Certain Related Persons.

         The Trustees and executive officers of the Fund and the aggregate
number and percentage of the Shares each of them beneficially owns is set forth
in the table below. The address of each of them is in care of the Fund at 200
Berkeley Street, Boston, Massachusetts 02116-5034, Telephone: 1-800-343-2898. As
of December 1, 2004, the Trustees and officers of the Fund as a group
beneficially owned less than 1% of the Shares. As of December 1, 2004 the
Advisor owned 5,000 Shares.



                                          Number of              Percentage of
                                   Shares Beneficially       Shares Beneficially
Name and Position                          Owned                     Owned


Gerald M. McDonnell, Trustee...             100                   0.00087%
Richard J. Shima, Trustee......             800                   0.00695%
David M. Richardson, Trustee...           2,000                   0.01738%
Richard K. Wagoner, Trustee....             100                   0.00087%




     Pursuant to an Investment  Advisory and  Management  Agreement  dated as of
March 18, 2004 with the Advisor (the "Advisory Agreement"), the Fund employs the
Advisor to manage the investment of the assets of the Fund.  The Advisor,  whose
business  address  and  telephone  numbers  are  200  Berkeley  Street,  Boston,
Massachusetts  02116-5034  and  800-225-1587,  has  been the  Fund's  investment
adviser since the Fund's  commencement  of  operations.  The Advisor is a wholly
owned  subsidiary of Wachovia Bank,  N.A.  Wachovia Bank,  N.A.,  located at 201
South College Street,  Charlotte,  North Carolina 28288-0630, is a subsidiary of
Wachovia Corporation, formerly First Union Corporation.

     For services provided by the Advisor under the Advisory Agreement, the Fund
pays the Advisor monthly, as compensation for the services rendered and expenses
paid by it,  an annual  fee equal to 0.60% of the  Fund's  average  daily  Total
Assets.  "Total  Assets"  means the net assets of the Fund (plus  borrowings  or
other leverage for investment purposes to the extent excluded in calculating net
assets).  Because the fee paid to the Advisor is  determined on the basis of the
Fund's Total Assets, the Advisor's  interest in determining  whether to leverage
the Fund may differ from the  interests of the Fund.  The Fund's  average  daily
Total Assets are determined for the purpose of calculating the management fee by
taking the  average of all the daily  determinations  of Total  Assets  during a
given  calendar  month.  The fees are payable for each calendar month as soon as
practicable after the end of that month. During the fiscal year ended August 31,
2004,  the Fund paid to the  Advisor  fees  totaling  $534,261  pursuant  to the
Advisory Agreement.

     During the past sixty days, there have not been any transactions  involving
Shares that were  effected by the Fund.  Based upon the Fund's  records and upon
information  provided to the Fund, except as described in this Section 10, there
have not been any  transactions  in Shares that were effected during such period
by any Trustee or  executive  officer of the Fund,  any person  controlling  the
Fund,  any  director or  executive  officer of any  corporation  or other person
ultimately in control of the Fund, any associate or minority-owned subsidiary of
the Fund or any executive  officer or director of any subsidiary of the Fund. On
November 22, 2004, Mr. David M.  Richardson  purchased 500 Shares of the Fund on
the open market at a price of $19.60 per share. Based upon information  provided
or available to the Fund,  no Trustee,  officer or affiliate of the Fund intends
to tender Shares pursuant to the Offer.  The Offer does not,  however,  restrict
the purchase of Shares pursuant to the Offer from any such person.

     Except as set forth in this Offer,  neither  the Fund,  nor, to the best of
the Fund's  knowledge,  any of the Fund's  officers or Trustees,  nor any of the
officers or directors of any of its  subsidiaries,  is a party to any  contract,
arrangement,  understanding  or  relationship  with any other  person  relating,
directly or indirectly to the Offer with respect to any  securities of the Fund,
including,  but not  limited to, any  contract,  arrangement,  understanding  or
relationship concerning the transfer or the voting of any such securities, joint
ventures,  loan or  option  arrangements,  puts or calls,  guaranties  of loans,
guaranties  against loss or the giving or  withholding  of proxies,  consents or
authorizations.

11. Certain Effects of the Offer.

     The  purchase  of  Shares  pursuant  to the Offer  will have the  effect of
increasing the  proportionate  interest in the Fund of  Shareholders  who do not
tender Shares. All Shareholders remaining after the Offer will be subject to any
increased  risks  associated  with the  reduction  in the number of  outstanding
Shares and the  reduction in the Fund's  assets  resulting  from payment for the
tendered  Shares,  such as any greater  volatility  due to  decreased  portfolio
diversification   and   proportionately    higher   expenses.    Under   certain
circumstances,  the need to raise cash in connection with the purchase of Shares
pursuant to the Offer may have an adverse effect on the Fund's NAV and/or income
per Share. See Section 7. All Shares purchased by the Fund pursuant to the Offer
will be retired and thereafter will be authorized and unissued Shares.

12. Certain Information about the Fund.

     The Fund was organized as a statutory  trust under the laws of the State of
Delaware on February 4, 2004 and is registered as a non-diversified,  closed-end
management   investment   company  under  the  1940  Act.  Under  normal  market
conditions, the Fund will invest at least 80% of its net assets in securities of
utilities companies (water, gas, electric and telecommunications  companies) and
in U.S.  dollar-denominated  non-investment  grade  debt  securities.  The  Fund
allocates its assets between two separate  investment  strategies.  Under normal
market conditions,  the Fund allocates  approximately 70% of its total assets to
an  investment  strategy  that  focuses on  common,  preferred  and  convertible
preferred stocks and convertible  debentures of utility companies  (water,  gas,
electric and telecommunications  companies),  and approximately 30% of its total
assets  to an  investment  strategy  that  focuses  on  U.S.  dollar-denominated
non-investment grade bonds, debentures, and other income obligations.

     Reference  is made to Sections 2, 8 and 9 and to the  financial  statements
referred to in Section 9.

     The principal  executive office and business address of the Fund is located
at 200 Berkeley Street, Boston,  Massachusetts  02116-5034.  The Fund's business
telephone number is 1-800-343-2989.

13. Additional Information.

     Since September 2003,  governmental  and  self-regulatory  authorities have
instituted   numerous  ongoing   investigations  of  various  practices  in  the
securities  and mutual fund  industries,  including  investigations  relating to
revenue sharing,  market-timing,  late trading and record retention, among other
things. The investigations  cover investment  advisory companies to mutual funds
(including  the  Advisor),  distributors  and transfer  agents to mutual  funds,
broker-dealers,  hedge funds, as well as other firms.  Wachovia Corporation (the
Advisor's  parent)  and/or certain of its  subsidiaries  (including the Advisor)
have  received  subpoenas  and/or other  requests for  documents  and  testimony
relating to these investigations,  are endeavoring to comply with those requests
and are  cooperating  with  the  investigations.  Wachovia  Corporation  and its
subsidiaries, including the Advisor, are continuing their own internal review of
policies,  practices,  procedures and personnel, and are taking remedial actions
where appropriate.

     In connection with one of these investigations, on July 28, 2004, the staff
of the SEC informed the Advisor,  Evergreen Investment  Services,  Inc. ("EIS"),
the   Fund's    administrator,    and    Evergreen    Service    Company,    LLC
("ESC")(collectively,  "Evergreen")  that the staff  intends to recommend to the
SEC that it institute an enforcement action against  Evergreen.  The SEC staff's
proposed  allegations relate to (i) an arrangement pursuant to which a broker at
one of the Advisor's affiliated  broker-dealers had been authorized,  apparently
by an  officer  of the  Advisor  (no  longer  with the  Advisor),  to  engage in
short-term  trading,  on behalf of a client,  in  Evergreen  Mid Cap Growth Fund
(formerly  Evergreen  Small Company  Growth Fund and Evergreen  Emerging  Growth
Fund) during the period December,  2000,  through April,  2003, in excess of the
limitations set forth in the Fund's  prospectus,  (ii)  short-term  trading from
September,  2001, through January, 2003, by a former Evergreen portfolio manager
of Evergreen  Precious  Metals  Fund,  a Fund he managed at the time,  (iii) the
sufficiency  of  systems  for  monitoring   exchanges  and  enforcing   exchange
limitations  as stated in the  Funds'  prospectuses,  and (iv) the  adequacy  of
e-mail retention practices. In connection with the activity in Evergreen Mid Cap
Growth  Fund,  the Advisor  reimbursed  the fund  $378,905,  plus an  additional
$25,242,  representing  what  the  Advisor  calculated  at  that  time to be the
client's net gain and the fees earned by the Advisor and the  expenses  incurred
by the  fund on the  client's  account.  In  connection  with  the  activity  in
Evergreen Precious Metals Fund, the Advisor reimbursed the fund $70,878, plus an
additional  $3,075,  representing what the Advisor calculated at that time to be
the portfolio manager's net gain and the fees earned by the Advisor and expenses
incurred by the fund on the portfolio manager's account.  Evergreen is currently
engaged in discussions with the staff of the SEC concerning its recommendation.

     Any resolution of these matters with  regulatory  authorities  may include,
but not be limited to, sanctions,  penalties or injunctions regarding Evergreen,
restitution to mutual fund  shareholders  and/or other  financial  penalties and
structural  changes in the governance or management of  Evergreen's  mutual fund
business.  Any penalties or restitution will be paid by Evergreen and not by the
Evergreen funds.

     Wachovia   Corporation   also  is   cooperating   with   governmental   and
self-regulatory  authorities in matters relating to the brokerage  operations of
Prudential  Financial,  Inc.  ("Prudential")  that  were  included  in  Wachovia
Corporation's retail brokerage  combination with Prudential.  Under the terms of
that  transaction,   Wachovia  Corporation  is  indemnified  by  Prudential  for
liabilities relating to those matters.

     Based on  information  currently  available,  advice of counsel,  available
insurance coverage and established reserves,  Wachovia Corporation believes that
the eventual  outcome of the actions  against  Wachovia  Corporation  and/or its
subsidiaries,  including the matters described above, will not,  individually or
in the  aggregate,  have a material  adverse  effect on  Wachovia  Corporation's
consolidated financial position or results of operations or on its subsidiaries,
including the Advisor.  However, in the event of unexpected future developments,
it is possible that the ultimate  resolution of those matters,  if  unfavorable,
may be  material  to  Wachovia  Corporation's  results  of  operations  for  any
particular period, including for that of the Advisor.

     Evergreen  does not believe the  foregoing  investigation  and actions will
have a material adverse impact on the Evergreen funds, including the Fund.

     An Issuer  Tender  Offer  Statement  on  Schedule  TO (the  "Schedule  TO")
including the exhibits thereto,  filed with the SEC, provides certain additional
information  relating  to the  Offer,  and may be  inspected  and  copied at the
prescribed rates at the SEC's public  reference  facilities at 450 Fifth Street,
N.W.,  Room 1024,  Washington,  D.C. 20549 and Citicorp  Center,  500 W. Madison
Street, Suite 1400, Chicago, Illinois 60661-2511.  Copies of the Schedule TO and
the  exhibits  are  available  on the  EDGAR  Database  on the SEC's Web site at
http://www.sec.gov  and copies of this  information may also be obtained,  after
paying a duplicating fee, by electronic request at the following E-mail address:
publicinfo@sec.gov  or by writing the SEC's Public Reference Section,  450 Fifth
Street, N.W., Washington, D.C. 20549.

14. Certain United States Federal Income Tax Consequences.

     The following  discussion is a general  summary of the U.S.  federal income
tax consequences of a sale of Shares pursuant to the Offer based on current U.S.
federal  income  tax law,  including  applicable  Treasury  regulations  and IRS
rulings.  The discussion reflects applicable tax laws of the United States as of
the date of this Offer to Purchase,  which tax laws may be changed or subject to
new interpretations by the courts or the IRS retroactively or prospectively.  No
attempt is made to present a detailed explanation of all U.S. federal income tax
concerns  affecting the Fund and its Shareholders,  and the discussion set forth
herein does not  constitute  tax advice.  Each  Shareholder  should  consult the
Shareholder's  tax advisor for a full  understanding  of the tax consequences of
such  a  sale,   including  potential  state,  local  and  foreign  taxation  by
jurisdictions of which the Shareholder is a citizen, resident or domiciliary. In
view of the requirement of the Offer that a tendering  Shareholder  must tender,
or cause the tender of, at least 20% of the Shares owned by the  Shareholder and
the Shares attributed to the Shareholder under Section 318 of the Code as of the
date of  purchase  of Shares by the Fund  pursuant  to the Offer,  tax  advisors
should also be consulted regarding the application of the constructive ownership
rules of Section  318. In general,  Section 318  provides  that Shares  owned by
certain family members of a tendering  Shareholder,  and by certain  entities in
which the Shareholder has a direct or indirect interest, are treated as owned by
the Shareholder for purposes of determining the federal income tax  consequences
of a sale of Shares pursuant to the Offer.

     U.S. Shareholders.  Based upon the assumption that a Shareholder wishing to
accept the Offer will be required to tender at least 20% of the Shares  owned by
such Shareholders or attributed to them under Section 318 of the Code, it is the
opinion of Sullivan & Worcester LLP that  Shareholders  who do not tender Shares
will not realize  constructive  distributions on their Shares as a result of the
participation by other Shareholders in the Offer.  Further, it is the opinion of
Sullivan & Worcester LLP that Shareholders  (other than tax-exempt  persons) who
are citizens  and/or  residents of the U.S., or  corporations,  partnerships  or
other  entities  created or  organized  in or under the laws of the U.S.  or any
political subdivision thereof, or estates the income of which is subject to U.S.
federal income  taxation  regardless of the source of such income,  or trusts if
(A) a court  within the United  States is able to exercise  primary  supervision
over the  administration  of the trust and (B) one or more United States persons
have the  authority  to control all  substantial  decisions  of the trust ("U.S.
Shareholders"),  who  tender  at  least  20%  of  the  Shares  owned  by  such a
Shareholder  or attributed to it under Section 318 of the Code,  that is held by
such  Shareholder as a capital asset,  will realize  capital gain or loss on the
tender equal to the difference between the price paid by the Fund for the Shares
purchased in the Offer and the  Shareholder's  adjusted basis in such Shares, if
such Shareholder's  proportionate  interest in the Shares of the Fund, including
stock attributed to the Shareholder under Section 318 of the Code, is reduced as
a result of such  tender.  The sale date for tax  purposes  will be the date the
Fund accepts  Shares for  purchase.  This gain or loss will be treated as either
long-term or  short-term if the Shares have been held at that time for more than
one year or for one year or less, respectively.  Any such long-term capital gain
realized by a non-corporate U.S.  Shareholder will be taxed at a maximum rate of
15%.  However,  because the Fund has been in operation for less than a year, any
capital gains or losses recognized by a shareholder would be short-term  capital
gains or losses.  No opinion,  however,  has been  rendered  with respect to any
Shareholder  tendering Shares whose proportionate  interest in the Shares of the
Fund,  including Shares  attributed  under Section 318 of the Code,  immediately
after the tender is 5% or more. Such  Shareholders  are advised to consult their
own tax  advisors  with  respect to the  specific  tax  consequences  to them of
participation in the Offer.

     In the unlikely event that a tendering Shareholder's proportionate interest
in the Shares of the Fund,  including Shares attributed to the Shareholder under
Section  318 of the  Code,  is not  reduced  as a  result  of the  tender,  such
Shareholder will be deemed to receive a distribution  from the Fund equal to the
amount of the price paid by the Fund for the Shares  purchased in the Offer.  It
is therefore  possible that the cash received for the Shares  purchased would be
taxable as a distribution by the Fund,  rather than as proceeds from the sale of
the Shares.  In that event,  the cash  received  by a U.S.  Shareholder  will be
taxable as a  dividend,  i.e.,  as  ordinary  income,  to the extent of the U.S.
Shareholder's  allocable share of the Fund's current or accumulated earnings and
profits.  To the extent that such  distribution  exceeds the Fund's  current and
accumulated  earnings and profits,  the  distribution  will reduce the tendering
Shareholder's   adjusted  basis  in  its  Shares.   The  amount  by  which  such
distribution  (not  treated as a dividend)  exceeds the  Shareholder's  adjusted
basis will be a capital gain in the hands of the Shareholder. To the extent that
cash received by a U.S. Shareholder is taxable as a dividend,  the Shareholder's
tax basis in the redeemed  Shares will be  transferred  to the remaining  Shares
held by the Shareholder (or deemed held by the Shareholder  under Section 318 of
the Code).  In the case of a tendering  U.S.  Shareholder  that is a corporation
treated as receiving a distribution from the Fund pursuant to the Offer, special
basis adjustments may also be applicable with respect to any Shares of such U.S.
Shareholder not repurchased pursuant to the Offer.

     Under the "wash  sale" rules under the Code,  a loss  recognized  on Shares
sold  pursuant to the Offer will  ordinarily  be disallowed to the extent a U.S.
Shareholder  acquires  Shares within 30 days before or after the date the Shares
are  purchased  pursuant to the Offer and, in that event,  the basis and holding
period of the Shares acquired will be adjusted to reflect the disallowed loss.

     The  Depositary  may be required to withhold 28% of the gross proceeds paid
to a U.S.  Shareholder or other payee  pursuant to the Offer unless either:  (a)
the U.S.  Shareholder  has completed and submitted to the  Depositary a Form W-9
(or   Substitute   Form  W-9),   providing  the  U.S.   Shareholder's   employer
identification  number or social security  number as applicable,  and certifying
under penalties of perjury that: (a) such number is correct;  (b) either (i) the
U.S.  Shareholder is exempt from backup withholding,  (ii) the U.S.  Shareholder
has not been notified by the IRS that the U.S.  Shareholder is subject to backup
withholding as a result of an under-reporting of interest or dividends, or (iii)
the IRS has notified the U.S. Shareholder that the U.S. Shareholder is no longer
subject to backup withholding; or (c) an exception applies under applicable law.
A Substitute  Form W-9 is included as part of the Letter of Transmittal for U.S.
Shareholders.

     Non-U.S.  Shareholders.  The U.S.  federal  income  taxation  of a Non-U.S.
Shareholder  on a sale of Shares  pursuant to the Offer  depends on whether this
transaction is "effectively  connected"  with a trade or business  carried on in
the U.S. by the Non-U.S.  Shareholder as well as the tax characterization of the
transaction  as either a sale of the Shares or a  distribution  by the Fund,  as
discussed  above for U.S.  Shareholders.  If the sale of Shares  pursuant to the
Offer  is  not  so  effectively  connected  and  if,  as  anticipated  for  U.S.
Shareholders,  it gives rise to gain or loss,  any gain  realized  by a Non-U.S.
Shareholder  upon the tender of Shares pursuant to the Offer will not be subject
to U.S.  federal income tax or to any U.S. tax withholding,  provided,  however,
that such a gain will be subject to U.S.  federal  income tax at the rate of 30%
(or such lower rate as may be  applicable  under a tax  treaty) if the  Non-U.S.
Shareholder is a non-resident  alien individual who is physically present in the
United  States for more than 182 days during the taxable  year of the sale.  If,
however,  U.S.  Shareholders are deemed to receive a distribution  from the Fund
with respect to Shares they tender,  the cash  received by a tendering  Non-U.S.
Shareholder  will also be treated for U.S. tax purposes as a distribution by the
Fund,  with the cash then being  characterized  in the same manner as  described
above for U.S.  Shareholders.  In such an event, the portion of the distribution
treated as a dividend  to the  Non-U.S.  Shareholder  would be subject to a U.S.
withholding  tax at the rate of 30% (or  such  lower  rate as may be  applicable
under a tax  treaty)  if the  dividend  is not  effectively  connected  with the
conduct of a trade or business in the United States by the Non-U.S. Shareholder.
If the amount  realized on the tender of Shares by a Non-U.S.  Shareholder is so
effectively  connected,  regardless of whether the tender is  characterized as a
sale or as giving rise to a distribution  from the Fund for U.S.  federal income
tax purposes, the transaction will be treated and taxed in the same manner as if
the Shares involved were tendered by a U.S. Shareholder.

     Non-U.S.  Shareholders  should provide the Depositary with a completed Form
W-8BEN  (or,  if  appropriate,  Form  W-8IMY)  in  order  to  avoid  28%  backup
withholding  on the cash they receive from the Fund  regardless  of how they are
taxed with respect to their tender of the Shares involved. A copy of Form W-8BEN
(or, if appropriate, Form W-8IMY) is provided with the Letter of Transmittal for
Non-U.S. Shareholders.

15. Amendments; Extension of Tender Period; Termination.

     The Fund reserves the right, at any time during which the Offer is pending,
to amend,  extend or terminate  the Offer in any respect.  Without  limiting the
manner in which the Fund may  choose  to make a public  announcement  of such an
amendment,  extension  or  termination,  the Fund  shall have no  obligation  to
publish, advertise or otherwise communicate any such public announcement, except
as provided by applicable law  (including  Rule 14e-1(d)  promulgated  under the
Exchange  Act)  and by the  requirements  of the  AMEX  (including  the  listing
agreement with respect to the Shares).

     Except to the extent required by applicable law (including Rule 13e-4(f)(1)
promulgated  under the Exchange Act), the Fund will have no obligation to extend
the Offer.  In the event that the Fund is obligated to, or elects to, extend the
Offer, the purchase price for each Share purchased pursuant to the Offer will be
the per Share NAV determined as of the close of the regular  trading  session of
the NYSE on the date after the  Expiration  Date as extended.  No Shares will be
accepted for payment until on or after the new Expiration Date.

16. Miscellaneous.

     The Offer is not being made to, nor will the Fund accept  tenders  from, or
on behalf of,  owners of Shares in any  jurisdiction  in which the making of the
Offer or its acceptance  would not comply with the securities or "blue sky" laws
of that  jurisdiction.  The Fund is not aware of any  jurisdiction  in which the
making of the Offer or the  acceptance  of tenders of,  purchase  of, or payment
for,  Shares in accordance  with the Offer would not be in  compliance  with the
laws of such  jurisdiction.  The Fund,  however,  reserves  the right to exclude
Shareholders  in any  jurisdiction in which it is asserted that the Offer cannot
lawfully be made or tendered  Shares cannot  lawfully be accepted,  purchased or
paid for. So long as the Fund makes a good-faith effort to comply with any state
law deemed  applicable  to the Offer,  the Fund  believes  that the exclusion of
holders  residing in any such  jurisdiction is permitted under Rule  13e-4(f)(9)
promulgated  under the Exchange Act. In any  jurisdiction  where the securities,
blue sky or other  laws  require  the Offer to be made by a  licensed  broker or
dealer, the Offer shall be deemed to be made on the Fund's behalf by one or more
brokers or dealers licensed under the laws of such jurisdiction.

                                        EVERGREEN UTILITIES AND HIGH INCOME FUND


December 20, 2004






                    EQUISERVE TRUST COMPANY, N.A., DEPOSITARY

                        Telephone Number: (888) 396-7866
                         (For questions about the offer)



                              BY FIRST CLASS MAIL:

                         EquiServe Trust Company, N.A.
                            Attn: Corporate Actions
                                 P.O. Box 43014
                           Providence, RI 02940-3014


                           BY REGISTERED, CERTIFIED OR
                            EXPRESS MAIL OR OVERNIGHT
                                    COURIER:
                         EquiServe Trust Company, N.A.
                            Attn: Corporate Actions
                               161 Baystate Drive
                              Braintree, MA 02184


                                    BY HAND:
                         EquiServe Trust Company, N.A.
                             17 Battery Park Place
                                   11th Floor
                               New York, NY 10004



                EQUISERVE TRUST COMPANY, N.A., DISTRIBUTION AGENT

                        Telephone Number: (732) 417-2653
                     (For additional tender offer materials)

                          EquiServe Trust Company, N.A.
                             Attn: Corporate Actions
                                 P.O. Box 43014
                            Providence, RI 02940-3014





EVERGREEN UTILITIES AND HIGH INCOME FUND
December 20, 2004