<DOCUMENT>
<TYPE>EX-99.A.5 CHARTER
<SEQUENCE>7
<FILENAME>ex-99a5.txt
<TEXT>


                                                             Exhibit a.5





                  DUFF & PHELPS SELECTED UTILITIES INC.

              Articles Supplementary creating one series of
                         Remarketed Preferred Stock

      DUFF & PHELPS SELECTED UTILITIES INC., a Maryland corporation having
its principal Maryland office in the City of Baltimore (the "Corporation"),
certifies to the State Department of Assessments and Taxation of Maryland
that:

      FIRST: Pursuant to authority expressly vested in the Board of
Directors of the Corporation by article fifth of its Charter, the Board of
Directors has classified its preferred stock and has authorized the
issuance of a series of 5,000 shares of its authorized preferred stock, par
value $.001 per share, liquidation preference $100,000 per share,
designated Remarketed Preferred Stock, Series I.

      SECOND: The preferences, voting powers, restrictions, limitations as
to dividends, qualifications, and terms and conditions of redemption, of
the shares of such series of preferred stock are as follows:

                                DESIGNATION

      This series of 5,000 shares of preferred stock, par value $.001 per
share, liquidation preference $100,000 per share plus premium, if any,
resulting from the designation of a Premium Call Period (as herein
defined), plus accumulated but unpaid dividends, if any, thereon (whether
or not earned or declared), is designated "Remarketed Preferred Stock,
Series I" and is referred to below as "RP". 1/ Each share of RP shall be
issued on a date to be determined by the Board of Directors of the
Corporation or a duly authorized committee thereof; have an Initial
Dividend Payment Date (as herein defined) to be determined by the Board of
Directors of the Corporation or a duly authorized committee thereof; and
have such other redemption provisions, preferences, limitations and
relative voting rights, in addition to those required by applicable law or
set forth in the Corporation's Charter applicable to preferred stock of the
Corporation, as are set forth in Part I and Part II of these Articles
Supplementary. Except as to Dates of Original Issue (as defined herein),
Dividend Periods (as defined herein), Dividend Payment Dates (as defined
herein), and redemption dates, if any, each share of RP shall be identical
to every other share of RP.

-----------------------
 1/ Registered trademark of Merrill Lynch & Co., Inc.




<PAGE>




                                 PART I.
                                 ------
      1.   Definitions. Unless the context or use indicates another or
different meaning or intent, the following terms shall have the following
meanings, whether used in the singular or plural:

      "`AA' Composite Commercial Paper Rate," on any date, means (i) the
Interest Equivalent of the rate on commercial paper placed for the number
of days specified in the succeeding sentence on behalf of issuers whose
corporate bonds are rated "AA" by S&P and "Aa" by Moody's, or the
equivalent of such rating by another nationally recognized statistical
rating organization, as such rate is made available by the Federal Reserve
Bank of New York on a discount basis or otherwise for the Business Day
immediately preceding such date, or (ii) if the Federal Reserve Bank of New
York does not make available such a rate, then the arithmetic average of
the Interest Equivalent of such rates on commercial paper placed on behalf
of such issuers, as quoted on a discount basis or otherwise by the
Commercial Paper Dealers to the Remarketing Agent for the close of business
on the Business Day immediately preceding such date. In respect of any
Dividend Period (or other period) of 98 or fewer days (determined without
regard to any adjustment in the remarketing schedule in respect of
non-Business Days, as provided herein), the "AA" Composite Commercial Paper
Rate shall be as follows: if the number of days in such Dividend Period is
(i) less than 8, the Interest Equivalent of the 5-day rate, (ii) 8 or more
but less than 20, the Interest Equivalent of the 15-day rate, (iii) 20 or
more but less than 49, the Interest Equivalent of the 30-day rate, (iv) 49
or more but less than 70, the Interest Equivalent of the 60-day rate, (v)
70 or more but less than 85, the arithmetic average of the Interest
Equivalent of the 60-day and 90-day rates and (vi) 85 or more but less than
99, the Interest Equivalent of the 90-day rate. If any Commercial Paper
Dealer does not quote a rate required to determine the "AA" Composite
Commercial Paper Rate, the "AA" Composite Commercial Paper Rate shall be
determined on the basis of the quotation or quotations furnished by the
remaining Commercial Paper Dealer or Dealers or, if none of the Commercial
Paper Dealers quotes such a rate, by any Substitute Commercial Paper Dealer
or Dealers selected by the Corporation to provide such rate or rates not
being supplied by any Commercial Paper Dealer.

      "Accountant's Confirmation" has the meaning set forth in paragraph
8(a)(iii) of this Part I.

      "Adviser" means Duff & Phelps Investment Management Co., the
Corporation's investment adviser.

      "Agent Member" means designated member of the Securities Depository


                                       2
<PAGE>




that will maintain records for a Beneficial Owner of shares of RP that has
identified such Agent Member in its Master Purchaser's Letter and that will
be authorized and instructed to disclose information to the Remarketing
Agent and the Paying Agent with respect to such Beneficial Owner.

      "Applicable Dividend Rate" means, with respect to the initial
Dividend Period, the rate of cash dividend per annum established by the
Board of Directors and, for each subsequent Dividend Period for each share
of RP, means the rate of cash dividend per annum that (i) except for a
Dividend Period commencing during a Non-Payment Period will be equal to the
lower of the rate of cash dividend per annum that the Remarketing Agent
advises results on the Dividend Reset Date preceding the first day of such
Dividend Period from implementation of the remarketing procedures set forth
in Part II hereof and the Maximum Dividend Rate or (ii) for each Dividend
Period commencing during a Non-Payment Period, will be equal to the
Non-Payment Period Rate.

      "Applicable Percentage" has the meaning set forth under "Maximum
Dividend Rate" below.

      "Authorized Newspaper" means a newspaper of general circulation in
the English language generally published on Business Days in The City of
New York.

      "Beneficial Owner" means a person that has signed a Master
Purchaser's Letter and is listed as the beneficial owner of one or more
shares of RP in the records of the Paying Agent or, with respect to any
share not registered in the name of the Securities Depository on the stock
transfer books of the Corporation, the person in whose name such share is
so registered.

      "Board of Directors" means the Board of Directors of the Corporation.

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

      "Certificate of Minimum Liquidity" has the meaning set forth in
paragraph 8(b)(i) of this Part I.

      "Charter" means the Articles of Incorporation, as amended, of the
Corporation, including these Articles Supplementary, on file in the State
Department of Assessments and Taxation of the State of Maryland.

      "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

      "Commercial Paper Dealers" means Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("MLPF&S") and such other Commercial Paper Dealer or
Dealers as the Corporation may from time to time appoint, or, in lieu of
any thereof, their respective affiliates or successors.

      "Common Stock" means the common stock, par value $.001 per share, of
the Corporation.



                                       3
<PAGE>



      "Conventional Mortgage Pass-Through Certificate" means an instrument
publicly issued in bearer or registered form, that is one of a class or
series or by its terms is divisible into a class or series, and that is of
a type commonly dealt in on securities exchanges or markets or commonly
recognized in any area in which it is issued or dealt in as a medium for
investment, evidencing (directly or indirectly) a proportional undivided
interest in specified pools of whole loans that are secured by a valid
first lien on each mortgagor's fee or leasehold interest in related
mortgaged property (except for Permitted Tax Liens and other matters to
which like properties are company subject which neither individually nor in
the aggregate materially interfere with the benefits of the security
intended to be provided by such mortgages or deeds of trust, and standard
exceptions and exclusions in title insurance policies) on one- to four-unit
primary residences (including, without limitation, owner-occupied attached
or detached single-unit residences, one- to four-unit primary residences,
condominiums, second/vacation homes and non-owner occupied residences) and
with respect to which the Required Documentation is required to be held by
a trustee or independent custodian, which mortgage loans are serviced
pursuant to servicing agreements with servicers that have either expressed
the intention to advance funds to meet deficiencies (to the extent such
servicers reasonably believe such advances are recoverable) or provided for
alternative credit enhancement in lieu thereof, and which instruments (a)
have been rated AA or better by S&P or Aa or better by Moody's or (b) do
not qualify pursuant to clause (a) above, but the inclusion of which in the
Eligible Portfolio Property will not, in and of itself, impair, or cause
the RP to fail to retain, the then-current ratings assigned to the RP by
the Rating Agencies, as evidenced by letters to the Corporation to such
effect from the Rating Agencies which letters shall be delivered to the
Remarketing Agent and the Paying Agent at the time each such Conventional
Mortgage Pass-Through Certificate is to be included in the Eligible
Portfolio Property; provided that, a Conventional Mortgage Pass-Through
Certificate shall be eligible for inclusion in the Eligible Portfolio
Property as of any Valuation Date only if it continues to satisfy as of
such Valuation Date the requirements of at least one of clauses (a) or (b)
above, as the Corporation may confirm verbally or in writing, directly or
indirectly, or by reference to publications of the Rating Agencies, by
confirmation from a nationally recognized securities dealer having a
minimum capitalization of $25 million or by such other means as the Rating
Agencies shall approve. The Remarketing Agent and the Paying Agent shall be
entitled to rely on the representation of the Corporation contained in the
RP Basic Maintenance Report with respect to any Valuation Date that, as of
such Valuation Date, the Corporation has confirmed that the Conventional
Mortgage Pass-Through Certificates included in the Corporation's Eligible
Portfolio Property are within the scope of this paragraph.

      "Corporation" means Duff & Phelps Selected Utilities Inc., a Maryland
corporation and the issuer of the shares of RP.

      "Date of Original Issue" means, with respect to any share of RP, the
date on which the Corporation originally issues such share.

      "Debt Obligations" has the meaning set forth under "Utility Stocks"
below.

      "Deposit Securities" means cash, U.S. Government Obligations and
Short Term Money Market Instruments.  Except for purposes of determining
compliance with the RP Basic Maintenance Amount, each Deposit Security
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 Security but only if payable on or prior to the applicable
payment date in advance of which the relevant deposit is made.

      "Discount Factor" means Discount Factor Supplied by Moody's or
Discount Factor supplied by S&P, as the case may be.


                                       4
<PAGE>


      "Discount Factor Supplied By S&P" means, initially, for any asset
held by the Corporation, the number set forth opposite such type of asset
in the following table (it being understood that any asset held by the
Corporation and not listed in the following table or in an amendment or
supplement thereto shall have a Discounted Value of zero):

<TABLE>
<CAPTION>
                                                  Discount Factor(1)
                                                  -------------------
<S>                                                    <C>
Type A Utility Bonds:                                   1.80

Type B Utility Bonds:                                   1.85

Type A Utility Stocks:                                  2.25

Type B Utility Stocks:                                  2.35

GNMA Certificates with fixed interest rates:            1.40

GNMA Certificates with adjustable interest rates:       1.40

FHLMC and FNMA Certificates with fixed interest rates:  1.50

FHLMC and FNMA Certificates with adjustable
  interest rates:                                       1.50

FHLMC Multifamily Securities:                           1.50

FHLMC and FNMA Certificates with variable
  interest rates:                                       1.50

GNMA Graduated Payment Securities:                      1.60

Conventional Mortgage Pass-Through Certificates 2       1.55

U.S. Government Obligations having a remaining term
  to maturity of 90 days or less:                       1.00

U.S. Government Obligations having a remaining term
  to maturity of more than 90 days but not more than
  five years:                                           1.28

U.S. Government Obligations having a remaining term
  to maturity of more than five years but not more
  than 10 years:                                        1.35

U.S. Government Obligations having a remaining term
  to maturity of more than 10 years but not more
  than 15 years:                                        1.40

U.S. Government Obligations having a remaining term
  to maturity of more than 15 years but not more
  than 30 years:                                        1.50

Cash and Short Term Money Market Instruments:           1.00

--------------------
(1)   In the case of Eligible Portfolio Property rated by Moody's but not
      rated by S&P, the Discount Factor Supplied by S&P shall be the
      Discount Factor determined therefor in writing by S&P. Absent such
      written notification, the asset shall have a Discounted Value of
      zero.

(2)   In the event such asset is not rated AA or better by S&P, such asset
      shall have a Discounted Value of zero.
</TABLE>

                                 5
<PAGE>



      Notwithstanding the foregoing, for so long as is required by S&P to
maintain its then-current credit rating of the RP, the Discount Factor
Supplied by S&P with respect to Eligible Portfolio Property sold pursuant
to a reverse repurchase agreement with a remaining term to maturity of more
than 25 days on the date of determination of the Discounted Value of such
Eligible Portfolio Property shall be the then-current Discount Factor
provided by S&P to the Corporation in writing for the purpose of such
determination.

      The Board of Directors shall have the authority to adjust, modify,
alter or change from time to time the initial Discount Factor Supplied by
S&P listed above applied to calculate the Discounted Value of any item of
Eligible Portfolio Property or may specify from time to time a Discount
Factor Supplied by S&P for any asset constituting Eligible Portfolio
Property if the Board of Directors determines and S&P advises the
Corporation in writing that such adjustment, modification, alteration,
change or specification will not adversely affect S&P's then-current rating
of the RP.

      "Discount Factor Supplied By Moody's" means, initially, for any asset
held by the Corporation, the number set forth opposite such type of asset
in the following table (it being understood that any asset held by the
Corporation and not listed in the following table or in an amendment or
supplement thereto shall have a Discounted Value of zero):


                                                        Discount Factor(1)
                                                        ------------------

Type I Utility Bonds having a remaining term
  to maturity of one year or less:                            1.20

Type I Utility Bonds having a remaining term
  to maturity of more than one year but not
  more than two years:                                        1.27

Type I Utility Bonds having a remaining term
  to maturity of more than two years but not
  more than three years:                                      1.32

Type I Utility Bonds having a remaining term
to maturity of more than three years but not
  more than four years:                                       1.38

Type I Utility Bonds having a remaining term
to maturity of more than four years but not
  more than five years:                                       1.4__

Type I Utility Bonds having a remaining term
to maturity of more than five years but not
  more than seven years:                                      1.53

Type I Utility Bonds having a remaining term
to maturity of more than seven years but not
  more than ten years:                                        1.61


                                       6
<PAGE>


Type I Utility Bonds having a remaining term
  to maturity of more than ten years but not
  more than 15 years:                                         1.69

Type I Utility Bonds having a remaining term to
maturity of more than 15 years but not
  more than 20 years:                                         1.76

Type I Utility Bonds having a remaining term
to maturity of more than 20 years but less
  than 30 years:                                              1.79

Type II Utility Bonds having a remaining term
  to maturity of one year or less:                            1.24

Type II Utility Bonds having a remaining term
  to maturity of more than one year but not
  more than two years:                                        1.31

Type II Utility Bonds having a remaining term
  to maturity of more than two years but not
  more than three years:                                      1.38

Type II Utility Bonds having a remaining term
to maturity of more than three years but not
  more than four years:                                       1.44

Type II Utility Bonds having a remaining term
to maturity of more than four years but not
  more than five years:                                       1.50

Type II Utility Bonds having a remaining term
to maturity of more than five years but not
  more than seven years:                                      1.60

Type II Utility Bonds having a remaining term
to maturity of more than seven years but not
  more than ten years:                                        1.70

Type II Utility Bonds having a remaining term
  to maturity of more than ten years but not
  more than 15 years:                                         1.76



                                       7
<PAGE>




Type II Utility Bonds having a remaining term
to maturity of more than 15 years but not
  more than 20 years:                                         1.84

Type II Utility Bonds having a remaining term
to maturity of more than 20 years but not more
  than 30 years:                                              1.87

Type III Utility Bonds having a remaining term
  to maturity of one year or less:                            1.29

Type III Utility Bonds having a remaining term
  to maturity of more than one year but not
  more than two years:                                        1.38

Type III Utility Bonds having a remaining term
  to maturity of more than two years but not
  more than three years:                                      1.44

Type III Utility Bonds having a remaining term
to maturity of more than three years but not
  more than four years:                                       1.51

Type III Utility Bonds having a remaining term
to maturity of more than four years but not
  more than five years:                                       1.57

Type III Utility Bonds having a remaining term
to maturity of more than five years but not
  more than seven years:                                      1.67

Type III Utility Bonds having a remaining term
to maturity of more than seven years but not
  more than ten years:                                        1.77



                                       8
<PAGE>




Type III Utility Bonds having a remaining term
  to maturity of more than ten years but not
  more than 15 years:                                         1.84

Type III Utility Bonds having a remaining term to maturity of more than 15
  years but not
  more than 20 years:                                         1.92

Type III Utility Bonds having a remaining term to maturity of more than 20
  years but not more
  than 30 years:                                              1.95

Type IV Utility Bonds having a remaining term
  to maturity of one year or less:                            1.36

Type IV Utility Bonds having a remaining term
  to maturity of more than one year but not
  more than two years:                                        1.44

Type IV Utility Bonds having a remaining term
  to maturity of more than two years but not
  more than three years:                                      1.50

Type IV Utility Bonds having a remaining term
to maturity of more than three years but not
  more than four years:                                       1.57

Type IV Utility Bonds having a remaining term
to maturity of more than four years but not
  more than five years:                                       1.63

Type IV Utility Bonds having a remaining term
to maturity of more than five years but not
  more than seven years:                                      1.74

Type IV Utility Bonds having a remaining term
to maturity of more than seven years but not
  more than ten years:                                        1.83

Type IV Utility Bonds having a remaining term
  to maturity of more than ten years but not
  more than 15 years:                                         1.92

Type IV Utility Bonds having a remaining term
to maturity of more than 15 years but not
  more than 20 years:                                         2.02

Type IV Utility Bonds having a remaining term
to maturity of more than 20 years but not more
  than 30 years:                                              2.03

Type I Utility Stocks                                         2.00




                                       9
<PAGE>





                                                   Discount       Discount
                                                    Factor         Factor
                                                    (Fixed       (Adjustable
                                                     Rate            Rate
FHLMC or FNMA Certificates                         Mortgages)     Mortgages)
--------------------------                        -----------    -----------
FHLMC or FNMA Certificates with interest rates
less than 6% but equal to or greater than 5%:         1.71          1.68

FHLMC or FNMA Certificates with interest rates
less than 7% but equal to or greater than 6%:         1.66          1.68

FHLMC or FNMA Certificates with interest rates
less than 8% but equal to or greater than 7%:         1.61          1.68

FHLMC or FNMA Certificates with interest rates
less than 9% but equal to or greater than 8%:         1.57          1.68

FHLMC or FNMA Certificates with interest rates
less than 10% but equal to or greater than 9%:        1.52          1.68

FHLMC or FNMA Certificates with interest rates
less than 11% but equal to or greater than 10%:       1.49          1.68

FHLMC or FNMA Certificates with interest rates
less than 12% but equal to or greater than 11%:       1.45          1.68

FHLMC or FNMA Certificates with interest rates
less than 13% but equal to or greater than 12%:       1.43          1.68

FHLMC or FNMA Certificates with interest rates
equal to or greater than 13%:                         1.40          1.68



                                                   Discount
                                                    Factor
                                                   --------
GNMA Certificates with interest rates less
than 6% but equal to or greater than 5%:             1.63

GNMA Certificates with interest rates less
than 7% but equal to or greater than 6%:             1.57

GNMA Certificates with interest rates less
than 8% but equal to or greater than 7%:             1.52

GNMA Certificates with interest rates less
than 9% but equal to or greater than 8%:             1.48

GNMA Certificates with interest rates less
than 10% but equal to or greater than 9%:            1.45


                                       10
<PAGE>





GNMA Certificates with interest rates less
than 11% but equal to or greater than 10%:           1.43

GNMA Certificates with interest rates less
than 12% but equal to or greater than 11%:           1.40

GNMA Certificates with interest rates less
than 13% but equal to or greater than 12%:           1.38

GNMA Certificates with interest rates equal
to or greater than 13%:                              1.36

GNMA Certificates with adjustable interest rates:    1.64

FHLMC Multifamily Securities:                         (2)

FHLMC and FNMA Certificates with variable
interest rates:                                       (4)

GNMA Graduated Payment Securities (seasoned):         (3)

Conventional Mortgage Pass-Through Certificates:      (5)

U.S. Government Obligations having a remaining
term to maturity of up to one year:                  1.09

U.S. Government Obligations having a remaining
term to maturity of more than one year but not
more than two years:                                 1.1__

U.S. Government Obligations having a remaining
term to maturity of more than two years but not
more than three years:                               1.20

U.S. Government Obligations having a remaining
term to maturity of more than three years but not
more than four years:                                1.27

U.S. Government Obligations having a remaining
term to maturity of more than four years but not
more than five years:                                1.32

U.S. Government Obligations having a remaining
term to maturity of more than five years but not
more than seven years:                               1.41

U.S. Government Obligations having a remaining
term to maturity of more than seven years but not
more than 10 years:                                  1.49

U.S. Government Obligations having a remaining
term to maturity of more than 10 years but not
more than 15 years:                                  1.56


                                       11
<PAGE>




U.S. Government Obligations having a remaining
term to maturity of more than 15 years but not
more than 20 years:                                  1.64

U.S. Government Obligations having a remaining
term to maturity of more than 20 years but not
more than 30 years:                                  1.65

Cash and Short Term Money Market Instruments:        1.00

------------------
(1)   In the case of Eligible Portfolio Property rated by S&P but not by
      Moody's, the Discount Factor Supplied by Moody's shall be the
      Discount Factor Supplied by Moody's applicable to Eligible Portfolio
      Property with a corresponding maturity but of the next lower rating
      category (e.g., a bond rated AAA by S&P but not rated by Moody's
      shall have a Discount Factor Supplied by Moody's equal to a bond of
      comparable maturity rated Aa by Moody's).

(2)   The applicable Discount Factor set forth under "FHLMC or FNMA
      Certificates" above.

(3)   The same Discount Factor shall apply in the case of GNMA Graduated
      Payment Securities as applies to GNMA Certificates with fixed
      interest rates determined at the point the certificates become
      seasoned.

(4)   The Discount Factor determined therefor in writing by Moody's.

(5)   The Discount Factor determined therefor in writing by Moody's. In the
      event such asset is not rated Aa or better by Moody's, such asset
      shall have a Discounted Value of zero.



      Notwithstanding the foregoing, for so long as is required by Moody's
to maintain its then-current credit rating of the RP, the Discount Factor
Supplied by Moody's with respect to Eligible Portfolio Property sold
pursuant to a reverse repurchase agreement with a remaining term to
maturity of more than 25 days on the date of determination of the
Discounted Value of such Eligible Portfolio Property shall be the
then-current discount factor provided by Moody's to the Corporation in
writing for the purpose of such determination.

      The Board of Directors shall have the authority to adjust, modify,
alter or change from time to time the initial Discount Factor Supplied by
Moody's listed above applied to calculate the Discounted Value of any item
of Eligible Portfolio Property or may specify from time to time a Discount
Factor Supplied by Moody's for any asset constituting Eligible Portfolio
Property if the Board of Directors determines and Moody's advises the
Corporation in writing that such adjustment, modification, alteration,
change or specification will not adversely affect Moody's then-current
rating of the RP.



                                       12
<PAGE>



      "Discounted Value," with respect to any asset held by the Corporation
as of any date, means the quotient of the Market Value of such asset
divided by the applicable Discount Factor Supplied by S&P (provided that,
in the event the Corporation has written a call option on such asset, the
Discounted Value of such asset shall be zero) or the quotient of the Market
Value of such asset divided by the applicable Discount Factor Supplied by
Moody's (provided that, in the event the Corporation has written a call
option on such asset, the Discounted Value of such asset shall mean the
quotient of the lower of the Market Value of such asset and the exercise
price of such call option divided by the applicable Discount Factor
Supplied by Moody's), as the case may be, provided that in no event shall
the Discounted Value of any asset constituting Eligible Portfolio Property
as of any date exceed the unpaid principal balance or face amount of such
asset as of the date. With respect to the calculation of the Discounted
Value of any Utility Bond included in the Corporation's Eligible Portfolio
Property, such calculation shall be made using the criteria set forth in
the definitions of Utility Bonds and Market Value. With respect to the
calculation of the Discounted Value of any Utility Stock included in the
Corporation's Eligible Portfolio Property, such calculation shall be made
using the criteria set forth in the definitions of Utility Stocks and
Market Value. With respect to the calculation of the aggregate Discounted
Value of the Corporation's Eligible Portfolio Property for comparison with
the RP Basic Maintenance Amount, such aggregate Discounted Value shall be
the aggregate Discounted Value calculated using the Discount Factors
Supplied by S&P or the aggregate Discounted Value calculated using the
Discount Factors Supplied by Moody's whichever aggregate Discounted Value
is lower; provided that, in calculating for such purpose the aggregate
Discounted Value of the Corporation's Eligible Portfolio Property using the
applicable Discount Factor Supplied by Moody's, the amount of Utility
Stocks issued by public utility companies with nuclear facilities under
construction (as determined by the Adviser) which may be included in such
calculation shall be limited to five percent of the Market Value of the
Corporation's Eligible Portfolio Property. Notwithstanding any other
provision of these Articles Supplementary, any Utility Bond that has a
remaining term to maturity of more than 30 years, and any asset as to which
there is no Discount Factor Supplied by Moody's or Discount Factor Supplied
by S&P either in these Articles Supplementary or in an amendment or
supplement hereof, shall have a Discounted Value for purposes of
determining the aggregate Discounted Value of the Corporation's Eligible
Portfolio Property calculated using the Discount Factor Supplied by Moody's
or S&P, as the case may be, of zero.

      "Dividend Coverage Amount," as of any Valuation Date, means (a) the
aggregate amount of cash dividends that will accumulate on shares of RP to
(but not including) the respective Dividend Payment Dates therefor that
follow such Valuation Date less (b) the combined value of any Deposit
Securities irrevocably deposited by the Corporation for the payment of cash
dividends on the RP.

      "Dividend Coverage Assets," as of any date of determination, means
Deposit Securities with maturity dates not later than the day preceding the
next Dividend Payment Dates for all shared of RP; provided that, if the
applicable date of determination is a Dividend Payment Date, any Deposit
Securities to be applied to the dividends payable on the RP on such date
shall not be included in the Dividend Coverage Assets.



                                       13
<PAGE>



      "Dividend Payment Date" means (i) with respect to any Optional
Dividend Period or Special Dividend Period of more than 91 but fewer than
365 days, the 92nd day thereof, the 183rd day thereof, if any, the 274th
day thereof, if any, and the day after the last day thereof; (ii) with
respect to any Optional Dividend Period of 365 or more days or Special
Dividend Period of 365 or more days, the third Wednesday of each January,
April, July and October therein and the day after the last day thereof; and
(iii) with respect to any other Dividend Period, the day after the last day
thereof; provided that, if any such date shall not be a Business Day, the
Dividend Payment Date shall be the Business Day next succeeding such day.

      "Dividend Period" means, with respect to any share of RP, the Initial
Dividend Period for such share and thereafter a period which shall commence
on each (but not the final) Dividend Payment Date for such share (which,
except during a Non-Payment Period, shall be a Settlement Date for such
share). Each such subsequent Dividend Period for such share will comprise,
beginning with and including the day upon which it commences, 7 consecutive
days in the case of a 7-day Dividend Period; 49 consecutive days (or such
other number of consecutive days as are specified by the Board of Directors
in the event of a change in law altering the Minimum Holding Period, as
provided herein) in the case of a 49-day Dividend Period; or such number of
consecutive days as shall be designated by the Board of Directors in the
case of any Optional Dividend Period or Special Dividend Period at the time
such Optional Dividend Period is made available or the Board of Directors
designates a Special Dividend Period, as the case may be. Notwithstanding
the foregoing, any adjustment of the remarketing schedule by the
Remarketing Agent which includes an adjustment of a Settlement Date shall
lengthen or shorten the related Dividend Periods by causing them always to
end on and include the day before the Settlement Date as so adjusted.

      "Dividend Reset Date" means any date on which the Remarketing Agent
(i) determines the Applicable Dividend Rates for the ensuing Dividend
Periods, (ii) notifies holders, purchasers and tendering holders of shares
of RP by telephone, telex or otherwise of the results of the Remarketing
and (iii) announces such Applicable Dividend Rates.

      "Dividends-Received Deduction" means the deduction allowed to
corporate holders of certain preferred stock with respect to dividends
received on such stock by Section 243(a)(1) of the Code, or any successor
thereto.

      "Eligible Portfolio Property" shall include Utility Bonds, Utility
Stocks, cash, U.S. Government Obligations, Short Term Money Market
Instruments, FNMA Certificates, FHLMC Certificates, FHLMC Multifamily
Securities, GNMA Certificates, GNMA Multifamily Securities, GNMA Graduated
Payment Securities, Conventional Mortgage Pass-Through Certificates and any
other asset held by the corporation that has been assigned a Discount
Factor by the Rating Agencies and is included within the definition of
Eligible Portfolio Property set forth herein or pursuant to an amendment or
supplement hereto.

      "FHLMC" means the Federal Home Loan Mortgage Corporation created by
Title III of the Emergency Home Finance Act of 1970, and includes any
successor thereto.



                                       14
<PAGE>




      "FHLMC Certificate" means a mortgage participation certificate in
physical or book-entry form, the timely payment of interest on and the
ultimate collection of principal of which is guaranteed by FHLMC, and which
evidences a proportional undivided interest in, or participation interest
in, specified pools of fixed-, variable- or adjustable-rate, level payment
fully amortizing mortgage loans secured by first-priority mortgages on one-
to four-family residences.

      "FHLMC Multifamily Security" means a "Plan B Multifamily Security" in
physical or book-entry form, the timely payment of interest on and the
ultimate collection of principal of which is guaranteed by FHLMC, and which
evidences a proportional undivided interest in, or participation interest
in, specified pools of fixed-, variable- or adjustable-rate level payment
fully amortizing mortgage loans secured by first-priority mortgages on
multi-family residences, the inclusion of which in the Eligible Portfolio
Property will not, in and of itself, impair or cause the RP to fail to
retain the ratings assigned to the RP by the Rating Agencies, as evidenced
by letters to such effect delivered to the Corporation by the Rating
Agencies.

      "FNMA" means the Federal National Mortgage Association, a United
States Government-sponsored private corporation established pursuant to
Title VIII of the Housing and Urban Development Act of 1968, and includes
any successor thereto.

      "FNMA Certificate" means a mortgage pass-through certificate in
physical or book-entry form, the full and timely payment of principal of
and interest on which is guaranteed by FNMA, and which evidences a
proportional undivided interest in specified pools of fixed-, variable- or
adjustable-rate, level payment fully amortizing mortgage loans secured by
first-priority mortgages on single-family and multi-family residences.

      "49-day Dividend Period" means (i) a Dividend Period designated as
such by a Beneficial Owner of a share of RP or (ii) any Dividend Period
commencing after the first day of, and during, a Non-Payment Period, and,
in all such cases, generally containing 49 days.

      "GNMA" means the Government National Mortgage Association, and
includes any successor thereto.

      "GNMA Certificate" means a fully modified pass-through certificate in
physical or book-entry form, the full and timely payment of principal of
and interest on which is guaranteed by GNMA and which evidences a
proportional undivided interest in specified pools of fixed-, variable- or
adjustable-rate, level payment fully amortizing mortgage loans secured by
first-priority mortgages on single-family and multi-family residences.

      "GNMA Graduated Payment Security" means a fully modified pass-through
certificate in physical or book-entry form, the full and timely payment of
principal of and interest on which is guaranteed by GNMA, which obligation
is backed by the full faith and credit of the United States, and which
evidences a proportional undivided interest in specified pools of graduated
payment mortgage loans with payments that increase annually at a
predetermined rate for up to the first five or ten years of the mortgage
loan and that are secured by first-priority mortgages on one- to four-unit
residences.


                                       15
<PAGE>





      "Holder" means, with respect to any share of RP, unless the context
otherwise requires, the person whose name appears on the stock transfer
books of the Corporation as the registered holder of such share.

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

      "Initial Dividend Period" means, with respect to any share of RP, a
49-day Dividend Period commencing on and including the Date of Original
Issue of such share and ending on the day prior to the Initial Dividend
Payment Date.

      "Interest Equivalent" means a yield on a 360-day basis of a discount
basis security which is equal to the yield on an equivalent
interest-bearing security.

      "Market Value" means, initially, the amount determined with respect
to specific assets of the Corporation in the manner set forth below:

           (a) as to any Utility Bond, (i) the product of (A) the unpaid
      principal balance of such Utility Bond as of the Reporting Date, and
      (B) (1) if the Utility Bond is traded on a national securities
      exchange or quoted on the NASDAQ System, the last sales price
      reported on the date of valuation or (2) if there was no reported
      sales price on the date of valuation or if the Utility Bond is not
      traded on a national securities exchange or quoted on the NASDAQ
      System, the lower of two bid prices for such Utility Bond provided by
      two nationally recognized securities dealers with a minimum
      capitalization of $25 million or by one such securities dealer and
      any other source (provided that the utilization of such source would
      not adversely affect the ratings of the RP) to the custodian of the
      Corporation's assets, 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 Corporation by any such means by
      such custodian (provided that evidence of the bid quotes furnished by
      such custodian shall be provided to the Paying Agent and the
      Remarketing Agent by the Corporation with the related RP Basic
      Maintenance Report), plus (ii) accrued interest on such Utility Bond,
      or, if two bid prices cannot be obtained, such item of Eligible
      Portfolio Property shall have a Market Value of zero;

           (b) as to any Utility Stock, (i) if the Utility Stock is traded
      on a national securities exchange or quoted on the NASDAQ System, the
      last sales price reported on the date of valuation or (ii) if there
      was no reported sales price on the date of valuation, the lower of
      two bid prices for such Utility Stock provided by two nationally
      recognized securities dealers with a minimum capitalization of $25
      million or by one such securities dealer and any other source
      (provided that the utilization of such source would not adversely
      affect the then-current ratings of the RP) to the custodian of the
      Corporation's assets, 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


                                       16
<PAGE>



      means, and in turn provided to the Corporation by any such means by
      such custodian (provided that evidence of the bid quotes furnished by
      such custodian shall be provided to the Remarketing Agent by the
      Corporation with the related RP Basic Maintenance Report), or, if two
      bid prices cannot be obtained, such item of Eligible Portfolio
      Property shall have a Market Value of zero;

           (c) the product of (i) as to GNMA Certificates, GNMA Graduated
      Payment Securities, GNMA Multifamily Securities, FNMA Certificates,
      FHLMC Certificates and FHLMC Multifamily Securities, the aggregate
      unpaid principal amount of the mortgage loans evidenced by each such
      certificate or security, as the case may be, which may include
      amounts shown on the most recent report related to the certificate or
      security received by the Corporation prior to the Reporting Date, and
      as to U.S. Government Obligations and Short Term Money Market
      Instruments (other than demand deposits, federal funds, bankers'
      acceptances and next Business Day's repurchase agreements), the face
      amount or aggregate principal amount of such U.S. Government
      Obligations or Short Term Money Market Instruments, as the case may
      be, and (ii) the lower of the bid prices for the same kind of
      certificates, securities or instruments, as the case may be, having,
      as nearly as practicable, comparable interest rates and maturities
      provided by two nationally recognized securities dealers having
      minimum capitalization of $25 million or by one such securities
      dealer and any other source (provided that the utilization of such
      source would not adversely affect the then-current ratings of the RP)
      to the custodian of the Corporation's assets, 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 Corporation by any such
      means by such custodian (provided that evidence of the bid quotes
      furnished by such custodian shall be delivered to the Remarketing
      Agent with the related RP Basic Maintenance Report), or, if two bid
      prices cannot be obtained, such item of Eligible Portfolio Property
      will have a Market Value of zero;

           (d) as to Conventional Mortgage Pass-Through Certificates, the
      product of (i) the outstanding aggregate principal balance of the
      mortgage loans underlying such certificates as determined by the
      Corporation by any method which the Corporation believes reliable,
      which may include amounts based on verbal reports of the servicers of
      the related mortgage loans to the Corporation, as of the applicable
      Reporting Date and (ii) the dollar value of the lower of two bid
      prices per dollar of outstanding principal amount as of such
      applicable Reporting Date for such certificates, provided by two
      nationally recognized securities dealers having minimum
      capitalization of $25 million or by one such securities dealer and
      any other source (provided that the utilization of such source would
      not adversely affect the then-current ratings of the RP) to the
      custodian of the Corporation's assets, 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 Corporation by any such
      means by such custodian (provided that evidence of the bid quotes
      furnished by such custodian shall be delivered to the Remarketing
      Agent with the related RP Basic Maintenance Report), or, if two bid


                                       17
<PAGE>



      prices cannot be obtained, such item of Eligible Portfolio Property
      shall have a Market Value of zero; and

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

The Board of Directors shall have the authority to adjust, modify, alter or
change from time to time the initial method of calculation of the Market
Value of an asset constituting Eligible Portfolio Property described above
and the Board of Directors may specify from time to time the method for
calculating the Market Value of any asset identified as Eligible Portfolio
Property if the Board of Directors determines and the Rating Agencies
advise the Corporation in writing that such adjustment, modification,
alteration, change or specification will not adversely affect their
then-current ratings of the RP.

      "Master Purchaser's Letter" means a letter substantially in the form
of Appendix B to the Corporation's prospectus relating to the shares of RP,
or such other form as may be approved by the Remarketing Agent, which is
required to be executed by each purchaser of shares of RP.

      "Maximum Dividend Rate" for any 7-day Dividend Period, 49-day
Dividend Period or Optional Dividend Period of 98 or fewer days or Special
Dividend Period of 98 or fewer days at any Dividend Reset Date shall apply
to a cash dividend, and be the Applicable Percentage of the applicable "AA"
Composite Commercial Paper Rate. The Applicable Percentage shall vary with
the lower of the credit rating or ratings assigned to the shares of RP by
Moody's and S&P (or if Moody's or S&P or both shall not make such rating
available, the equivalent of either or both of such ratings by a Substitute
Rating Agency or two Substitute Rating Agencies or, in the event that only
one such rating shall be available, such rating) on each Dividend Reset
Date as follows:


                Credit Ratings                         Applicable Percentage
    ----------------------------------------           ---------------------

       Moody's                    S&P
       -------                    ---
    "aa3" or higher            AA- or higher                    110%

    "a3" to "a1"               A- to A+                         125%

    "baa3" to "baa1"           BBB- to BBB+                     150%

    Below "baa3"               Below BBB-                       200%

The applicable Maximum Dividend Rate or Rates for any Optional Dividend
Period of more than 98 days or Special Dividend Period of more than 98 days
at any Dividend Reset Date shall be a fixed or variable rate or rates
determined from time to time by formula or other means as designated by the
Board of Directors in respect of such Optional Dividend Period or Special
Dividend Period. The Remarketing Agent shall round each applicable Maximum
Dividend Rate to the nearest one-thousandth (0.001) of one percent per
annum, with any such number ending in five ten-thousandths (0.0005) of one


                                       18
<PAGE>



percent being rounded upwards to the nearest one-thousandth (0.001) of one
percent. The Remarketing Agent shall not round the applicable "AA"
Composite Commercial Paper Rate as part of their calculation of any Maximum
Dividend Rate.

      "Minimum Holding Period" means 46 days or such other minimum holding
period required for corporate taxpayers to be entitled to the
Dividends-Received Deduction as provided in Section 246(c) of the Code or
any successor thereto.

      "Minimum Liquidity Level is Met" means, as of any date of
determination, that the aggregate Market Value of the Dividend Coverage
Assets equals or exceeds the Dividend Coverage Amount.

      "Moody's" means Moody's Investors Service, Inc., and includes any
successor thereto.

      "1940 Act" means the Investment Company Act of 1940, as amended from
time to time.

      "NASDAQ System" has the meaning set forth under "Type I Utility
Stocks" below.

      "1940 Act RP Asset Coverage" means asset coverage, as defined in
section 18(h) of the 1940 Act, of at least 200% of the aggregate
liquidation preference with respect to all outstanding senior securities of
the Corporation which are stock, including all outstanding shares of RP and
Other RP (or such other asset coverage as may 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 paying dividends
on its common stock).

      "1940 Act Cure Date," with respect to the failure by the Corporation
to maintain the 1940 Act RP Asset Coverage (as required by paragraph 7 of
this Part I) as of the last day of each month, means the last Business Day
of the following such month.

      "Non-Call Period" has the meaning set forth under "Specific
Redemption Provisions" below.

      "Non-Payment Period" means any period beginning on and including the
day on which the Corporation shall fail to (i) declare, prior to 12:00
noon, New York City time, on the second Business Day preceding any Dividend
Payment Date for any shares of RP, for payment on such Dividend Payment
Date to the Beneficial Owners of such shares of RP as of 12:00 noon, New
York City time, on the Business Day preceding such Dividend Payment Date,
the full amount of any dividend on such shares of RP payable on such
Dividend Payment Date or (ii) deposit, irrevocably in trust, in same-day
funds, with the Paying Agent by 12:00 noon, New York City time, (A) on any
Dividend Payment Date for any shares of RP the full amount of any declared
cash dividend on such shares (whether or not earned) payable on such
Dividend Payment Date or (B) on any redemption date for any shares of RP,
the redemption price of such shares of $100,000 per share plus the full
amount of any cash dividends thereon (whether or not earned or declared)
accumulated but unpaid to such redemption date after a Notice of Redemption
with respect to such shares of RP has been given pursuant to paragraph 4(e)


                                       19
<PAGE>


of Part I hereof, and ending on and including the Business Day on which, by
12:00 noon, New York City time, all unpaid cash dividends and unpaid
redemption prices shall have been so deposited or shall have otherwise been
made available to Beneficial Owners in same-day funds; provided that a
Non-Payment Period shall not end during the first seven days thereof unless
the Corporation shall have given at least three days' written notice of the
Paying Agent, the Remarketing Agent and the Securities Depository and
thereafter shall not end unless the Corporation shall have given at least
fourteen days' written notice to the Paying Agent, the Remarketing Agent,
the Securities Depository and all Beneficial Owners.

      "Non-Payment Period Rate" means, initially, 200% of the applicable
"AA" Composite Commercial Paper Rate, provided that the Board of Directors
shall have the authority to adjust, modify, alter or change from time to
time the initial Non-Payment Period Rate if the Board of Directors
determines and the Rating Agencies advise the Corporation in writing that
such adjustment, modification, alteration or change will not adversely
affect their then-current ratings on the RP.

      "Notice of Redemption" means any notice with respect to the
redemption of shares of RP pursuant to paragraph 4 of this Part I.

      "Optional Dividend Period" means a Dividend Period established by the
Board of Directors pursuant to paragraph 3(1) of this Part I.

      "Other RP" means the remarketed preferred stock of the Corporation,
other than the RP.

      "Paying Agent" means Bankers Trust Company, or any successor company
or entity, which has entered into a Paying Agent Agreement with the
Corporation to act for the Corporation, among other things, as the transfer
agent, registrar, dividend and redemption price disbursing agent,
settlement agent and agent for certain notifications in connection with the
shares of RP in accordance with such agreement.

      "Paying Agent Agreement" means an agreement to be entered into
between the Corporation and the Paying Agent.

      "Permitted Tax Liens" means liens for general and special taxes and
assessments on the property in question.

      "Preferred Stock" means the preferred stock of the Corporation, and
includes RP and Other RP.

      "Premium Call Period" has the meaning set forth under "Specific
Redemption Provisions" below.

      "Projected Dividend Amount" for the RP and the Other RP shall mean,
initially, if the date of determination is a Valuation Date, the amount of
cash dividends, based on the number of shares of RP and the Other RP
outstanding on such Valuation Date, projected to accumulate on such shares
from such Valuation Date until the 70th day after such Valuation Date, at
the following dividend rates:

           (a) If the Valuation Date is the Date of Original Issue or a
      Dividend Payment Date (which terms, for purposes of this definition,


                                       20
<PAGE>



      shall refer to the equivalent dates in the case of Other RP), (i) for
      the Dividend Period beginning on the Date of Original Issue or such
      Dividend Payment Date and ending on (but not including) the first
      following Dividend Payment Date, the Applicable Dividend Rate (which
      term, for the purposes of this definition, shall refer to the
      equivalent rate in the case of Other RP) in effect on such Valuation
      Date, and (ii) for the period beginning on (and including) the first
      following Dividend Payment Date and ending on (and including) the
      70th day following such Valuation Date, the product of 2.32 and (x)
      the Maximum Dividend Rate (which term, for the purposes of this
      definition, shall refer to the equivalent rate in the case of Other
      RP) on the Date of Original Issue (in the case of the Date of
      Original Issue) or (y) the Maximum Dividend Rate as of the last
      occurring Settlement Date or, in the case of Other RP, the equivalent
      date (in the case of any Dividend Payment Date); and

           (b) If such Valuation Date is not the Date of Original Issue or
      a Dividend Payment Date, (i) for the period beginning on such
      Valuation Date and ending on (but not including) the first following
      Dividend Payment Date, the Applicable Dividend Rate in effect on such
      Valuation Date, and (ii) for the period beginning on (and including)
      the first following Dividend Payment Date and ending on (but not
      including) the sooner of the second following Dividend Payment Date
      or the 71st day following such Valuation Date, the product of 2.32
      and (x) the Maximum Dividend Rate on the Date of Original Issue (in
      the case of a Valuation Date occurring prior to the first Settlement
      Date) or (y) the Maximum Dividend Rate on the last occurring
      Settlement Date or, in the case of Other RP, the equivalent date (in
      the case of any other Valuation Date) and (iii) for the period, if
      any, beginning on (and including) the second following Dividend
      Payment Date and ending on (but not including) the 71st day following
      such Valuation Date, the product of 3.20 and the rate specified in
      clause (x) or (y) above.

If the date of determination is not a Valuation Date, then the Projected
Dividend Amount on such date of determination shall equal the Projected
Dividend Amount therefor on the immediately preceding Valuation Date,
adjusted to reflect any decrease in the number of shares of RP and Other RP
outstanding. The Board of Directors shall have the authority to adjust,
modify, alter or change from time to time the initial bases for the
calculation of the Projected Dividend Amount if the Board or Directors
determines and the Rating Agencies shall have advised the Corporation in
writing that such adjustment, modification, alteration or change would not
adversely affect their then-current ratings of the RP.

      "Quarterly Valuation Date" means, for so long as any shares of RP are
outstanding, the last Business Day of March, June, September and December
of each year, commencing December 31, 1988, or, if such day is not a
Valuation Date, the next preceding Valuation Date.

      "Rating Agencies" means S&P and Moody's for so long as S&P and
Moody's issue ratings for the RP, and, at such time as S&P and/or Moody's
no longer issues a rating for the RP, the Substitute Rating Agency or
Substitute Rating Agencies, as the case may be.

      "Remarketing" means each periodic operation of the process for
remarketing shares of RP as described in Part II hereof.


                                       21
<PAGE>


      "Remarketing Agent" means MLPF&S and any additional or successor
companies or entities which have entered into an agreement with the
Corporation to carry out the remarketing procedures for the purpose of
determining the Applicable Dividend Rates.

      "Reporting Date," with respect to any price referred to in the
definition of the Market Value of an item of Eligible Portfolio Property,
shall mean the date as of which the Market Value of such item of Eligible
Portfolio Property is to be determined or, if no such price is available as
provided above under "Market Value" for such date, the next closest prior
date as of which such price is so available; provided that, no such price
shall be deemed to be available as of a Reporting Date if such price is not
available as of a date within five Business Days next preceding the date as
of which the determination of such Market Value is to be made.

      "Required Documentation," with respect to a mortgage loan underlying
a Convention Mortgage Pass-Through Certificate means:

           (a) the mortgage note or other evidence of indebtedness secured
      by the mortgage endorsed without recourse in blank or to the trustee
      or other custodian and accompanied by an assignment thereof;

           (b) the mortgage, deed of trust, deed to secure debt or similar
      security instruments encumbering real property or related
      documentation, with evidence of recording or filing thereof, in each
      case accompanied by assignments thereof, executed in blank or to the
      trustee or other custodian, in recordable form as may be appropriate
      in the jurisdiction where the property is located and evidence that
      such assignment has been recorded in the name of the trustee or other
      custodian, and such trustee or other custodian receives an opinion of
      counsel (containing only such exceptions as may be permissible under
      the indenture or other agreement pursuant to which the mortgage loan
      is pledged to the trustee in connection with the related Conventional
      Mortgage Pass-Through Certificate) to the effect that,
      notwithstanding that the assignment of the mortgage has not been
      recorded, the actions taken with respect to the mortgage loan are
      sufficient to permit the trustee or other custodian to avail itself
      of all protection available under applicable law against the claims
      of any present or future creditors of the issuer, and are sufficient
      to prevent any other sale, transfer, assignment, pledge or
      hypothecation of the mortgage and the related mortgage note by the
      issuer from being enforceable, or will create a valid assignment of
      and a valid and perfected lien upon and security interest in a
      mortgage and related mortgage note, which lien and security interest
      is (except for the trustee's lien securing certain obligations of the
      issuer to the trustee as provided in the indenture pursuant to which
      the mortgage loan is pledged to the trustee in connection with the
      related Conventional Mortgage Pass-Through Certificate) prior in
      right to all other security interests therein created or perfected
      under the Uniform Commercial Code (as in effect in the jurisdiction
      where the property is located);

           (c) in the case of mortgage notes covered by private mortgage
      insurance, evidence that such mortgage notes are so insured; and


                                       22
<PAGE>




           (d) a copy of the title insurance policy or an opinion or
      certificate of counsel stating the mortgage constitutes a first lien
      on the premises described in such mortgage (which opinion or
      certificate may be subject to exceptions for Permitted Tax Liens and
      other matters to which like properties are commonly subject which
      neither individually nor in the aggregate materially interfere with
      the benefits of the security interest intended to be provided by such
      mortgage and standard exceptions and exclusions from mortgage title
      insurance policies).

      "Right" has the meaning set forth in paragraph 3(n) of this Part I.

      "RP" means the Remarketed Preferred Stock, Series I of the
Corporation to be issued pursuant hereto.

      "RP Basic Maintenance Amount" means, initially, as of any date, the
sum of (i) the aggregate liquidation preference of the shares of RP
outstanding and shares of Other RP outstanding, (ii) to the extent not
covered in (i) above, the aggregate amount of accumulated but unpaid cash
dividends with respect to the shares of RP outstanding and shares of Other
RP outstanding, (iii) any Rights due and payable and any equivalent rights
to receive cash with respect to Other RP which are due and payable, (iv)
the principal amount of the Corporation's loan from the Aid Association For
Lutherans then outstanding, (v) an amount equal to accrued but unpaid
interest on the principal amount of the Corporation's loan from the Aid
Association For Lutherans then outstanding, (vi) the aggregate principal
amount of, and an amount equal to accrued but unpaid interest on, any other
then outstanding indebtedness of the Corporation for money borrowed, (vii)
the aggregate Projected Dividend Amount, (viii) redemption premium, if any,
and (ix) the greater of $200,000 or an amount equal to projected expenses
of the Corporation for the next three month period. The Board of Directors
shall have the authority to adjust, modify, alter or change from time to
time the initial elements comprising the RP Basic Maintenance Amount if the
Board of Directors determines and the Rating Agencies advise the
Corporation in writing that such adjustment, modification, alteration or
change will not adversely affect their then-current ratings on the RP.

      "RP Basic Maintenance Cure Date," with respect to the failure by the
Corporation to maintain the RP Basic Maintenance Amount (as required by
paragraph 8 of this Part I) as of each Valuation Date, means the eighth
Business Day following such Valuation Date.

      "RP Basic Maintenance Report" means a report signed by the President,
the Treasurer, any Senior Vice President or any Vice President of the
Corporation which sets forth, as of the related Valuation Date, the assets
of the Corporation, the Market Value and the Discounted Value thereof
(seriatum and in the aggregate), and the RP Basic Maintenance Amount.

      "S&P" means Standard & Poor's Corporation, and includes any successor
thereto.

      "Securities Depository" means The Depository Trust Company, a
securities depository, or any successor company or other entity selected by
the Corporation for the shares of RP that agrees to follow the procedures
required to be followed by such securities depository in connection with
the shares of RP.


                                       23
<PAGE>




      "Service" means the Internal Revenue Service.

      "Settlement Date" means any date on which (i) a new Dividend Period
begins, and (ii) shares of RP which have been tendered and sold in a
Remarketing are delivered through the Securities Depository.

      "7-day Dividend Period" means a Dividend Period designated as such by
a Beneficial Owner and generally containing seven days.

      "Short Term Money Market Instruments" means the following kinds of
instruments, if on the date of purchase or other acquisition by the
Corporation of any such instrument the remaining term to maturity thereof
is not more than 30 days:

           (a) demand deposits in, certificates of deposit of, bankers'
      acceptances issued by, or federal funds sold to, any depository
      institution, the deposits of which are insured by the Federal Deposit
      Insurance Corporation (or any successor thereto) or the Federal
      Savings and Loan Insurance Corporation (or any successor thereto),
      provided that, at the time of the Corporation's investment therein,
      the commercial paper or other unsecured short-term debt obligations
      of such depository institution are rated at least A-1+ by S&P and
      Prime-1 by Moody's;

           (b) repurchase obligations with respect to a U.S. Government
      Obligation, FNMA Certificate, FHLMC Certificate or GNMA Certificate
      entered into with a depository institution, the deposits of which are
      insured by the Federal Deposit Insurance Corporation (or any
      successor thereto) or the Federal Savings and Loan Insurance
      Corporation (or any successor thereto) and the commercial paper or
      other unsecured short-term debt obligations of which are rated at
      least A-1+ by S&P and Prime-1 by Moody's, which must be repurchased
      within one Business Day from the date such repurchase obligation was
      entered into; and

           (c) commercial paper rated at the time of the Corporation's
      investment therein at least A-1+ by S&P and Prime-1 by Moody's.

      "Special Dividend Period" means a Dividend Period established by the
Board of Directors pursuant to paragraph 3(m) of this Part I.

      "Specific Redemption Provisions" means, with respect to any Optional
Dividend Period of 365 or more days or Special Dividend Period of 365 or
more days, either, or any combination of, (i) a period (a "Non-Call
Period") determined by the Corporation, after consultation with the
Remarketing Agent, during which the shares subject to such Dividend Period
shall not be subject to redemption at the option of the Corporation and
(ii) a period (a "Premium Call Period"), consisting of a number of whole
years and determined by the Board of Directors, after consultation with the
Remarketing Agent, during each year of which the shares subject to such
Dividend Period shall be redeemable at the Corporation's option at a price
per share equal to $100,000 plus accumulated but unpaid dividends plus a
premium expressed as a percentage of $100,000, as determined by the Board
or Directors after consultation with the Remarketing Agent.



                                       24
<PAGE>




      "Substitute Commercial Paper Dealers" means such Substitute
Commercial Paper Dealer or Dealers as the Corporation may from time to time
appoint or, in lieu of any thereof, their respective affiliates or
successors.

      "Substitute Rating Agency" and "Substitute Rating Agencies" mean a
nationally recognized statistical rating organization or two nationally
recognized statistical organizations, respectively, selected by the
Corporation to act as the substitute rating agency or substitute rating
agencies, as the case may be, to determine the credit ratings of the shares
of RP.

      "Tender and Dividend Reset" means the process pursuant to which
shares of RP may be tendered or deemed tendered in a Remarketing or held
and become subject to the new Applicable Dividend Rate or Rates determined
by the Remarketing Agent in such Remarketing.

      "Tender Date" means any date on which (i) a holder of shares of RP
must provide to the Remarketing Agent irrevocable telephonic notice of
intent to tender shares of RP in a Remarketing or to change Dividend
Periods for shares, and (ii) such Remarketing formally commences.

      "Type A Utility Bonds" as of any date means Utility Bonds rated A- or
higher by S&P.

      "Type B Utility Bonds" as of any date means (a) Utility Bonds held by
the Corporation at such date and continuously since at least September 30,
1988 which are rated from BBB- to BBB+ by S&P or (b) Utility Bonds rated
BBB- to BBB+ by S&P provided that the Utility Bonds rated BBB- shall be
limited to twenty-five percent of the Market Value of the Corporation's
Eligible Portfolio Property.

      "Type I Utility Bonds" as of any date means Utility Bonds rated Aaa
by Moody's.

      "Type II Utility Bonds" as of any date means Utility Bonds rated Aa3
to Aa1 by Moody's.

      "Type III Utility Bonds" as of any date means Utility Bonds rated A3
to A1 by Moody's.

      "Type IV Utility Bonds" as of any date means Utility Bonds rated Baa3
to Baa1 by Moody's.

      "Type A Utility Stocks" as of any date means Utility Stocks which are
traded on the New York Stock Exchange, Inc. or the American Stock Exchange,
Inc., are currently paying cash dividends, and have been issued by public
utility companies having debt obligations outstanding with implied senior
debt ratings from S&P of A- or higher.

      "Type B Utility Stocks" as of any date means (a) Utility Stocks which
are traded on the New York Stock Exchange, Inc. or the American Stock
Exchange, Inc., are currently paying cash dividends, are held by the
Corporation at such date and continuously since at least September 30, 1998
and have been issued by public utility companies having debt obligations
outstanding with implied senior debt ratings from S&P of BBB- to BBB+ or


                                       25
<PAGE>



(b) Utility Stocks which are traded on the New York Stock Exchange, Inc. or
the American Stock Exchange, Inc., are currently paying cash dividends and
have been issued by public utility companies having debt obligations
outstanding with implied senior debt ratings from S&P from BBB- to BBB+
provided that Utility Stocks issued by public utility companies having debt
obligations outstanding with implied senior debt ratings from S&P of BBB-
shall be limited to twenty-five percent of the Market Value of the
Corporation's Eligible Portfolio Property.

      "Type I Utility Stocks" as of any date means Utility Stocks which are
traded on the New York Stock Exchange, Inc. or the American Stock Exchange,
Inc. or are quoted on the National Association of Securities Dealers
Automated Quotation ("NASDAQ") System and have been issued by public
utility companies having debt obligations outstanding with senior or
subordinated debt ratings from Moody's of Baa3 or higher.

      "U.S. Government Obligations" means direct obligations of the United
States, provided that such direct obligations are entitled to the full
faith and credit of the United States and that any such obligations, 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.

      "Utility Bonds" means, initially, corporate debt obligations issued
by state regulated public utility companies rated from BBB- to AAA by S&P
and from Baa3 to Aaa by Moody's, which corporate debt obligations (a)
provide for the periodic payment of interest thereon in cash in U.S.
dollars, (b) do not provide for conversion or exchange into equity capital
at any time over their respective lives, (c) have been registered under the
Securities Act of 1933, as amended, and (d) have not had notice given in
respect thereof that any such corporate debt obligations are the subject of
an offer by the issuer thereof of exchange or tender for cash, securities
or any other type of consideration. In addition, so long as the shares of
RP are rated by S&P or Moody's, no corporate debt obligation held by the
Corporation shall be deemed a Utility Bond (i) if it fails to meet the
criteria in column (1) below or (ii) to the extent (but only to the
proportionate extent) the acquisition or holding thereof by the Corporation
causes the Corporation to exceed any applicable limitation set forth in
column (2) below in the event the shares of RP are rated by S&P or column
(2), (3) or (4) below in the event the shares to RP are rated by Moody's as
of any relevant date of determination (provided that, in the event that the
Corporation shall exceed any such limitation, the Corporation shall
designate, in its sole discretion, the particular Utility Bond(s) and/or
portions thereof which shall be deemed to have caused the Corporation to
exceed such limitation):



                                       26
<PAGE>



                    Column (1)        Column (2)    Column (3)   Column (4)

                                                               Maximum Percent
                                                  Maximum         of Market
                                                Percent of         Value
                                               Market Value     of Corpora-
                                 Maximum       of Corpora-     tion's Assets
                                 Percent       tion's Assets    Including
                                of Market    Including Eligible  Eligible
  S&P and                       Value of        Portfolio        Portfolio
   Moody's                      Eligible        Property         Property
  Rating of       Minimum       Portfolio       Issued by         Issued
Utility Bonds     Original      Property      Issuers in any    by Issuers
   or Debt      Issue Size of  Issued by any   One Industry     Regulated by
Obligations(1)  Each Issue(2)  One Issuer(3)   Category(4)    any One [Strategy]
--------------  -------------  -------------   -------------  ------------------

               ($ in millions)  S&P    Moody's
                                ---    -------

AAA, Aaa......      $100        10.0%   100.0%      100.0%         100.0%

AA1, Aa.......       100        10.0     20.0        60.0           20.0

Aa, A.........       100        10.0     10.0        50.0           10.0

BBB, Baa......       100         5.0      4.0        50.0            2.0

------------------
(1)  Rating designations include (+) or (-) modifiers to the S&P rating
     where appropriate. Rating designations include modifiers of 1 to 3 to
     the Moody's rating where appropriate.

(2)  This restriction is applicable only to Utility Bonds.

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

(4)  The referenced percentages represent maximum cumulative totals only
     for the related Moody's rating category and each lower Moody's rating
     category. There are two Industry categories -- telecommunications and
     all other utilities.

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


The Board of Directors shall have the authority to adjust, modify, alter or
change from time to time the assets (and/or the characteristics thereof)
included initially within the definition of Utility Bonds for purposes of


                                       27
<PAGE>



determining compliance with the RP Basic Maintenance Amount if the Board of
Directors determines and the Rating Agencies advise the Corporation in
writing that such adjustment, modification, alteration or change will not
adversely affect their then-current ratings of the RP.

      "Utility Stocks" means, initially, common stocks issued by state
regulated public utility companies having debt obligations outstanding with
senior debt ratings of BBB to AAA from S&P or subordinated debt ratings of
BBB- to AAA from S&P and senior or subordinated debt ratings of Baa3 to Aaa
from Moody's, which debt obligations have been registered under the
Securities Act of 1933, as amended ("Debt Obligations"). In addition, so
long as the shares of RP are rated by S&P or Moody's, no common stock held
by the Corporation shall be deemed a Utility Stock to the extent (but only
to the proportionate extent) the acquisition or holding thereof by the
Corporation causes the Corporation to exceed any applicable limitation set
forth in column (2) of the table set forth in "Utility Bonds" above in the
event the shares of RP are rated by S&P or column (2), (3) or (4) of such
table in the event the shares of RP are rated by Moody's as of any relevant
date of determination (provided that, in the event that the Corporation
shall exceed any such limitation, the Corporation shall designate, in its
sole discretion, the particular Utility Stock(s) and/or portions thereof
which shall be deemed to have caused the Corporation to exceed such
limitation). The Board of Directors shall have the authority to adjust,
modify, alter or change from time to time the assets (and/or the
characteristics thereof) initially included within the definition of
Utility Stocks for purposes of determining compliance with the RP Basic
Maintenance Amount if the Board of Directors determines and the Rating
Agencies advise the Corporation in writing that such adjustment,
modification, alteration or change will not adversely affect their
then-current ratings of the RP.

      "Valuation Date" means (i) the fifteenth day of each month or, if
such day is not a Business Day, the next succeeding Business Day, and (ii)
the last Business Day of each month (or, in the case of the first Valuation
Date, a date selected by the Corporation within fifteen days after the
Original Issue Date).

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

      2.   Fractional Shares.  No fractional shares of RP shall be issued
or recognized by the Corporation.

      3. Dividends. (a) The Holders as of 12:00 noon, New York City time,
on the Business Day preceding the applicable Dividend Payment Dates, shall
be entitled to receive, when, as and if declared by the Board of Directors,
out of funds legally available therefor, cumulative dividends each
consisting of (i) cash at the Applicable Dividend Rate and (ii) a Right to
receive cash determined as set forth in paragraph 3(l) below and payable as
set forth therein. Dividends on the shares of RP so declared and payable
shall be paid, to the extent available and permitted by law, and in
preference to and priority over any dividends declared and payable on the
Common Stock, out of income of the Corporation which constitutes qualifying
income for purposes of the Dividends-Received Deduction.



                                       28
<PAGE>





           (b) Dividends on shares of RP shall accumulate from the
applicable Date of Original Issue and will be payable, when, as and if
declared by the Board of Directors, on each Dividend Payment Date
applicable to each such share of RP.

           (c) Each declared dividend, including each Right, shall be
payable on the applicable Dividend Payment Date to the Holder or Holders of
such shares of RP as set forth in paragraph 3(a). Dividends on any share in
arrears for any past Dividend Payment Date may be declared and paid at any
time, without reference to any regular Dividend Payment Date, to the Holder
of such share on a date not exceeding five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors. Any
dividend payment made on any share of RP shall first be credited against
the earliest dividends accumulated but unpaid (whether or not earned) with
respect to such share.

           (d) Neither Holders nor Beneficial Owners of shares of RP shall
be entitled to any dividends on the shares of RP, whether payable in cash,
property or stock, in excess of full cumulative dividends (including
Rights) thereon. The Board of Directors shall designate, in accordance with
the applicable provisions of the Code, the cash dividends on the shares of
RP so declared and paid or payable and on the shares of Other RP declared
and paid or payable for any fiscal year as qualifying for the
Dividends-Received Deduction in an amount equal to the lesser of (i) the
amount of the Corporation's income for such fiscal year which qualifies for
the Dividends-Received Deduction, or (ii) the amount of such cash
dividends.

           (e) Except as otherwise provided herein, the Applicable Dividend
Rate on each share of RP for each Dividend Period with respect to such
share shall be equal to the rate per annum that results from implementation
of the remarketing procedures described in Part II hereof.

           (f) The amount of cash dividends for shares of RP payable (if
declared) on each Dividend Payment Date in respect of Dividend Periods of
fewer than 365 days shall be computed by the Corporation by multiplying the
Applicable Dividend Rate in effect with respect to cash dividends payable
on such share on such Dividend Payment Date by a fraction the numerator of
which shall be the number of days such share was outstanding from and
including its Date of Original Issue or the preceding Dividend Payment Date
on which a cash dividend was paid, as the case may be, to and including the
last day of such Dividend Period, and the denominator of which shall be
360, and then multiplying the percentage so obtained by $100,000. The
amount of cash dividends for each share of RP payable on each Dividend
Payment Date in respect of an Optional Dividend Period of 365 or more days
or a Special Dividend Period of 365 or more days shall be computed on the
basis of a 360-day year of twelve 30-day months. In accordance with the
remarketing procedures set forth in Part II hereof, there may exist at any
given time a number of Dividend Payment Dates for all outstanding shares of
RP, and dividends on any share shall be payable only on a Dividend Payment
Date applicable to such share of RP.

           (g) No later than by 12:00 noon, New York City time, on each
Dividend Payment Date, the Corporation shall deposit in same-day funds with
the Paying Agent the full amount of any dividend declared and payable on
such Dividend Payment Date on any share of RP. For the purposes of the



                                       29
<PAGE>




foregoing, payment in New York Clearing House (next-day) funds at any time
on any Business Day shall be considered equivalent to payment in same-day
funds on the next Business Day at the same time, and any payment made after
12:00 noon, New York City time, on any Business Day shall be considered to
have been made instead in the same form of funds before 12:00 noon, New
York City time, on the next Business Day.

           (h) The Applicable Dividend Rate for each Dividend Period
commencing during a Non-Payment Period shall be equal to the Non-Payment
Period Rate; any share of RP for which an Optional Dividend Period of more
than 98 days or Special Dividend Period of more than 98 days would
otherwise have commenced on the first day of a Non-Payment Period shall
have, instead, a 7-day Dividend Period; and each Dividend Period commencing
after the first day of, and during, a Non-Payment Period shall be a 49-day
Dividend Period.

           (i) So long as any shares of RP are outstanding, the Corporation
shall not, subject to the requirements of the 1940 Act and Maryland law,
without the affirmative vote or consent of the holders of at least
two-thirds of the votes of the shares of RP outstanding at the time, given
in person or by proxy, either in writing or at a meeting (voting separately
as one class): (a) authorize, create or issue, or increase the authorized
or issued amount, of any class or series of stock ranking prior to the RP
with respect to payment of dividends or the distribution of assets on
liquidation, or (b) amend, alter or repeal the provisions of the
Corporation's Charter including these Articles Supplementary, whether by
merger, consolidation or otherwise, so as to materially and adversely
affect any right, preference, privilege or voting power of such shares of
RP or the Holders thereof; provided that, any increase in the amount of the
authorized RP or the creation and issuance of other series of Preferred
Stock, or any increase in the amount of authorized shares of such series or
of any other series of remarketed preferred stock, in each case ranking on
a parity with or junior to the RP, will not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers
unless such issuance would cause the Corporation not to satisfy the 1940
Act RP Asset Coverage or the RP Basic Maintenance Amount. Unless a higher
percentage is provided for under the Charter, the affirmative vote of the
holders of a majority of the outstanding shares of Preferred Stock,
including RP, voting together as a single class, will be required to
approve any plan of reorganization adversely affecting such shares or any
action requiring a vote of security holders under Section 13(a) of the 1940
Act. The class vote of holders of shares of Preferred Stock, including RP,
described above will in each case be in addition to a separate vote of the
requisite percentage of shares of Common Stock and shares of Preferred
Stock, including RP, necessary to authorize the action in question.

      The foregoing voting provisions shall not apply if, at or prior to
the time when the act with respect to which such vote would otherwise be
required shall be effected, all outstanding shares of RP shall have been
redeemed or called for redemption and sufficient funds shall have been
deposited in trust to effect such redemption.

           (j)   Except during a Non-Payment Period, by 1:00 p.m. on the
Tender Date at the end of the Initial Dividend Period applicable to a share
of RP and by 1:00 p.m. on the Tender Date at the end of each subsequent
Dividend Period applicable to a share of RP, the Beneficial Owner of such



                                       30
<PAGE>




share may elect to tender such share or to hold such share. If the
Beneficial Owner of such share of RP elects to hold such share, such
Beneficial Owner may, unless the Board of Directors has designated a
Special Dividend Period commencing on the Settlement Date next following
such Tender Date and such share is subject to such Special Dividend Period,
elect to hold such share of RP for a 7-day Dividend Period, a 49-day
Dividend Period or any available Optional Dividend Period; provided that,
in the event that (i) such Beneficial Owner elects an available Optional
Dividend Period of more than 98 days with respect to such share or the
Board of Directors has designated the next succeeding Dividend Period as a
Special Dividend Period of more than 98 days and such share is subject to
such Special Dividend Period and (ii) there is no Remarketing Agent, the
Remarketing Agent does not conduct a Remarketing or the Remarketing Agent
is unable to remarket in the Remarketing on the Dividend Reset Date
following such Tender Date all shares of RP tendered (or deemed tendered)
to it at a price of $100,000 per share, then the Dividend Period in respect
of such share shall be a 7-day Dividend Period and the Applicable Dividend
Rate shall be the Maximum Dividend Rate for a 7-day Dividend Period. If the
Beneficial Owner of such share of RP fails to elect to tender or hold such
share, or to elect a Dividend Period for such share, by 1:00 p.m. on such
Tender Date, such Beneficial Owner shall continue to hold such share at the
Applicable Dividend Rate determined in such Remarketing for a Dividend
Period of the same type as the current Dividend Period for such share;
provided that (i) if such current Dividend Period is an Optional Dividend
Period of 98 or fewer days which is not available on such Tender Date, such
Beneficial Owner shall hold such share for a 7-day Dividend Period, (ii) if
such current Dividend Period is a 7-day Dividend Period, a 49-day Dividend
Period or an Optional Dividend Period of 98 or fewer days which is
available on such Tender Date but (a) there is no Remarketing Agent or the
Remarketing Agent does not conduct a Remarketing, then such Beneficial
Owner shall hold such share for a 7-day Dividend Period and the Applicable
Dividend Rate shall be the Maximum Dividend Rate for a 7-day Dividend
Period, or (b) the Remarketing Agent is unable to remarket in such
Remarketing all shares of RP tendered (or deemed tendered) to it at a price
of $100,000 per share, such Beneficial Owner will hold such share for the
same Dividend Period as the then current Dividend Period with respect to
such share and the applicable Dividend Rate therefor will be the applicable
Maximum Dividend Rate, and (iii) if such current Dividend Period is an
Optional Dividend Period of more than 98 days or a Special Dividend Period,
or the succeeding Dividend Period has been designated by the Board of
Directors as a Special Dividend Period and such share is subject to such
Special Dividend Period, then such Beneficial Owner shall be deemed to have
elected to tender such share. If such share of RP is tendered (or deemed
tendered) but not sold in such Remarketing, the Beneficial Owner thereof
shall hold such share at the applicable Maximum Dividend Rate for a 7-day
Dividend Period. If such share of RP is tendered (or deemed tendered) and
purchased in such Remarketing, the next Dividend Period for such share
shall be the Dividend Period elected by the purchaser of such share in such
Remarketing or the Special Dividend Period designated by the Board of
Directors, as the case may be, at the Applicable Dividend Rate therefor,
except that, if the Remarketing Agent is unable to remarket in such
Remarketing all shares of RP tendered (or deemed tendered) to it at a price
of $100,000 per share, no purchaser in such Remarketing shall be permitted
to acquire shares having an Optional Dividend Period of more than 98 days
or a Special Dividend Period of more than 98 days.


                                       31
<PAGE>



           (k) In the event of a change in law altering the Minimum Holding
Period, the Board of Directors may increase or decrease the period of time
between Dividend Payment Dates so as to adjust uniformly the number of days
in any 49-day Dividend Period commencing after the date of such change in
law to equal or exceed the then current Minimum Holding Period; provided
that, the number of days for any Dividend Period as so adjusted shall not
exceed 98 and shall be evenly divisible by seven (except as required from
time to time by adjustments in the remarketing schedule as provided
herein). Upon any such adjustment by the Board of Directors, the
Corporation shall notify the Remarketing Agent and the Paying Agent, and
the Paying Agent shall in turn notify the Securities Depository, of such
adjustment; provided that, during a Non-Payment Period, the Corporation
also shall notify the Beneficial Owners of shares of RP directly of such
adjustment.

           (l) Except during a Non-Payment Period, the Board of Directors
may at any time and from time to time institute one or more Optional
Dividend Periods with such number of days, and which shall be available for
such period, as the Board of Directors shall specify; provided that (i) in
respect of any Optional Dividend Period of more than 98 days, the Board of
Directors shall also determine a Maximum Dividend Rate or Rates in respect
of such period which rate or rates, as determined from time to time by
formula or other means, may be fixed or variable and (ii) in respect of an
Optional Dividend Period of 365 or more days, the Board of Directors, after
consultation with the Remarketing Agent, may establish Specific Redemption
Provisions. An Optional Dividend Period shall be available after seven
days' written notice thereof and, if applicable, of the Maximum Dividend
Rate or Rates and Specific Redemption Provisions, if any, in respect
thereof shall have been given to the Remarketing Agent, the Paying Agent
and the Securities Depository. The Corporation also shall publish promptly
notice of any designation of an Optional Dividend Period, and related
Maximum Dividend Rate or Rates and Specific Redemption Provisions, if any,
at least once in an Authorized Newspaper, but the failure so to publish
shall not affect the validity or effectiveness of any such designation or
determination. After an Optional Dividend Period becomes available, such
Optional Dividend Period shall be available in each Remarketing and, if
elected by any Beneficial Owner of shares of RP, shall commence on each
Settlement Date and continue until rescinded by the Board of Directors,
which rescission shall be effective after seven days' written notice
thereof shall have been given to the Remarketing Agent, the Paying Agent,
the Securities Depository and Beneficial Owners. The existence or
rescission of any Optional Dividend Period shall not affect any current
Dividend Period or prevent the Board of Directors from establishing other
Optional Dividend Periods of similar duration or in any way restrict the
Maximum Dividend Rate or Rates or Specific Redemption Provisions which may
be designated in connection with any other Optional Dividend Period.

           (m) The Board of Directors may at any time designate a
subsequent Dividend Period with respect to all or any specified fewer
number of shares of RP eligible for Tender and Dividend Reset on the Tender
Date next preceding the commencement of such Dividend Period as a Special
Dividend Period with such number of days as the Board of Directors shall
specify; provided that (i) written notice of any such designation, of the
Maximum Dividend Rate or Rates, if applicable, and Specific Redemption
Provisions, if any, in respect thereof and of the consequences of failure
to tender or to elect to hold shares, must be given at least seven days


                                       32
<PAGE>


prior to such Tender Date to the Remarketing Agent, the Paying Agent, the
Securities Depository and the Beneficial Owners or shares of RP which are
to be subject to such Special Dividend Period; (ii) no Special Dividend
Period may commence for any share of RP during a Non-Payment Period: (iii)
if such Special Dividend Period contains 365 or more days, (x) the shares
of RP subject to such Special Dividend Period shall have an aggregate
liquidation preference (exclusive of accumulated but unpaid dividends,
premium, if any, and Rights, if any) of at least $35,000,000 or such
greater or lesser amount as may be specified by the Board of Directors and
(y) the shares, if any, and Rights, if any) of at least $35,000,000 or such
greater or lesser amount as may be specified by the Board of Directors;
(iv) in respect of any Special Dividend Period of more than 98 days, the
Board of Directors shall also determine a Maximum Dividend Rate or Rates,
which rate or rates, as determined from time to time by formula or other
means, may be fixed or variable; and (v) in respect of any Special Dividend
Period of 365 or more days, the Board of Directors, after consultation with
the Remarketing Agent, may establish Specific Redemption Provisions. In the
event the Board of Directors designates a Special Dividend Period with
respect to less than all shares of RP eligible for Tender and Dividend
Reset in the Remarketing prior to such Special Dividend Period, the shares
subject to such Special Dividend Period will be selected by the Paying
Agent by lot. The existence or rescission of any Special Dividend Period
shall not affect any current Dividend period or prevent the Board of
Directors from establishing other Special Dividend Periods of similar
duration or in any way restrict the Maximum Dividend Rate or Rates or
Specific Redemption Provisions which may be designated in connection with
any other Special Dividend Period.

      If the Remarketing Agent is unable to remarket sufficient shares of
RP at the commencement of a Special Dividend Period to satisfy the
requirement described in clause (iii) of the preceding paragraph, then the
Dividend Period in respect of any share of RP which otherwise would have
been subject to such Special Dividend Period shall be a 7-day Dividend
Period and an Applicable Dividend Rate shall be set by the Remarketing
Agent in accordance with the remarketing procedures.

           (n) Each dividend shall consist of (i) cash at the Applicable
Dividend Rate and (ii) a right (a "Right") to receive cash (as determined
below). Each Right shall thereafter be independent of the share or shares
of RP on which the dividend was paid. The Corporation shall cause to be
maintained a record of each Right received by the respective Holders. The
Corporation shall not be required to recognize any transfer of a Right. If
all or any part of the cash dividends on the shares of RP during any fiscal
year does not qualify for the Dividends-Received Deduction ("Nonqualifying
Distributions") because (i) the Corporation does not have income for such
fiscal year eligible for the Dividends-Received Deduction at least equal to
the dividends paid on the RP and the Other RP for such year, or (ii) the
Corporation does not properly designate dividends on the RP as being
eligible for the Dividends-Received Deduction, the applicable Rights shall
entitle the holders thereof ("Right Holders") to additional cash (as set
forth below), and the Corporation will, within 270 days after the end of
such fiscal year, provide notice thereof to the Paying Agent. The Paying
Agent will mail a copy of such notice to each Right Holder at the address
specified in such Right Holder's Master Purchaser's Letter as promptly as
practicable after its receipt of such notice from the Corporation. The
Corporation will within 30 days after such notice is given to the Paying


                                       33
<PAGE>



Agent pay to the Paying Agent (who will then distribute to Right Holders),
out of funds legally available therefor, cash in satisfaction of the
applicable Rights in an amount specified below with respect to all
Nonqualifying Distributions made during such fiscal year.

      Cash payable pursuant to a Right shall be paid to the Right Holder
thereof in an amount which, when taken together with the aggregate
Nonqualifying Distributions paid to such Right Holder during any fiscal
year, would cause such Right Holder's net yield in dollars (after Federal
income tax consequences) from the aggregate of both the Nonqualifying
Distributions and the cash receivable pursuant to a Right to be equal to
the net yield in dollars (after Federal income tax consequences) which
would have been received by such Right Holder if the amount of the
aggregate Non-qualifying Distributions would have qualified for the
Dividends-Received Deduction in the hands of such Right Holder. Such cash
receivable on a Right shall be calculated without consideration being given
to the time value of money and using the applicable maximum marginal
corporate Federal tax rate in effect at the time such Right was declared.

      The Corporation may estimate the amount payable in respect of any
Right and pay all or any portion of such estimated amount prior to the end
of the fiscal year in which such Right was declared.

      If, for any fiscal year, all cash dividends paid at the Applicable
Dividend Rate on the shares of RP are eligible in full for the
Dividends-Received Deduction, then the amount payable to holders of Rights
applicable to that year shall be zero.

      4.   Redemption.  Shares of RP shall be redeemable by the Corporation
as provided below:

           (a) To the extent permitted under the 1940 Act and Maryland law,
the Corporation at its option, upon giving a Notice of Redemption, may
redeem shares of RP, in whole or in part, on the next succeeding scheduled
Dividend Payment Dates for those shares of RP called for redemption, out of
funds legally available therefor, at a redemption price equal to $100,000
per share plus premium, if any, resulting from the designation of a Premium
Call Period, plus an amount equal to cash dividends thereon (whether or not
earned or declared) accumulated but unpaid to the date fixed for
redemption; provided that (i) no share of RP will be subject to redemption
at the option of the Corporation during a Non-Call Period to which it is
subject and (ii) if any share of RP is subject to any Optional Dividend
Period or Special Dividend Period containing at least as many days as the
then Minimum Holding Period at the time such Optional Dividend Period or
Special Dividend Period was selected and a redemption at such time would
have the effect that a Beneficial Owner who purchased such share in the
preceding Remarketing therefor would not satisfy such Minimum Holding
period solely by reason of such redemption, such share shall be redeemed on
a date specified by the Board of Directors at least five days in advance
thereof when such condition shall not longer apply (which date may be after
the date fixed for redemption of the other shares called for redemption),
but shall not be later than the next succeeding Dividend Payment Date upon
which such Beneficial Owner would not fail to satisfy such Minimum Holding
Period for such share solely by reason of such redemption.


                                       34
<PAGE>



           (b) The Corporation shall redeem, out of funds legally available
therefor, at a redemption price of $100,000 per share plus an amount equal
to premium, if any, resulting from the designation of a Premium Call
Period, plus cash dividends thereon (whether or not earned or declared)
accumulated but unpaid to the date of redemption, shares of RP to the
extent permitted under the 1940 Act and Maryland law, on a date fixed by
the Board of Directors, if the Corporation fails to maintain the RP Basic
Maintenance Amount or the 1940 Act RP Asset Coverage and such failure is
not cured on or before the RP Basic Maintenance Cure Date or the 1940 Act
Cure Date (herein referred to respectively as the "Cure Date"), as the case
may be. The number of shares to be redeemed shall be equal to the lesser of
(i) the minimum number of shares of RP the redemption of which, if deemed
to have occurred immediately prior to the opening of business on the Cure
Date, together with all shares of other Preferred Stock subject to
redemption or retirement, would result in the satisfaction of the RP Basic
Maintenance Amount or the 1940 Act RP Asset Coverage, as the case may be,
on such Cure Date (provided that, if there is no such minimum number of
shares the redemption of which would have such result, all shares of RP
then outstanding shall be redeemed), and (ii) the maximum number of shares
of RP that can be redeemed out of funds expected to be legally available
therefor on such redemption date. In determining the number of shares of RP
required to be redeemed in accordance with the foregoing, the Corporation
shall allocate the amount required to achieve the RP basic Maintenance
Amount or the 1940 Act RP Asset Coverage, as the case may be, pro rata
among the RP and the Other RP. The Corporation shall effect such redemption
not later than 41 days after such Cure Date, except that if the Corporation
does not have funds legally available for the redemption of all of the
required number of shares of RP which are subject to mandatory redemption
or the Corporation otherwise is unable to effect such redemption on or
prior to such Cure Date, the Corporation shall redeem those shares of RP
which it was unable to redeem on the earliest practicable date on which it
is able to effect such redemption.

      Any share of RP shall be subject to mandatory redemption regardless
of whether such share is subject to a Non-Call Period provided that shares
of RP subject to a Non-Call Period will only be subject to redemption to
the extent that the other shares of RP are not available to satisfy the
number of shares required to be redeemed. In such event, such shares
subject to a Non-Call Period will be selected for redemption in an
ascending order of outstanding Non-Call Period (with shares with the lowest
number of days remaining in the period to be called first) and by lot in
the event of equal outstanding Non-Call Periods. However, if any share of
RP is subject to any Optional Dividend Period or Special Dividend Period
containing at least as many days as the then Minimum Holding Period at the
time such Optional Dividend Period or Special Dividend Period was selected
and a redemption at such time would have the effect that a person who
purchased such share in the preceding Remarketing therefor would not
satisfy such Minimum Holding Period solely by reason of such redemption,
such share shall be redeemed on a date specified by the Corporation at
least five days in advance thereof when such condition shall no longer
apply (which date may be after the date fixed for redemption of the other
shares called for redemption), but shall not be later than the next
succeeding Dividend Payment Date upon which such person would not fail to
satisfy such Minimum Holding Period for such share solely by reason of
redemption.


                                       35
<PAGE>



           (c) Subject to paragraph 4(d) of this Part I, if fewer than all
the outstanding shares of RP are to be redeemed pursuant to this paragraph
4, the number of shares of RP so to be redeemed shall be a whole number of
shares and shall be determined by the Board of Directors, and the
Corporation shall give a Notice of Redemption as provided in paragraph 4(e)
of this Part I provided that no share of RP will be subject to optional
redemption on any Dividend Payment Date during a Non-Call Period to which
it is subject and shares of RP subject to a Non-Call Period will be subject
to mandatory redemption only on the basis described under paragraph 4(b) of
this Part I. Unless certificates representing shares of RP are held by
Holders other than the Securities Depository or its nominee, the Paying
Agent, upon receipt of such notice, shall determine, from among shares
eligible for redemption, the number of shares of RP to be redeemed pro rata
from each current Dividend Period which is then eligible for redemption and
shall give notice of such determination to the Securities Depository; the
Securities Depository thereupon shall determine by lot on a Dividend Period
basis pursuant to the allocation provided by the Paying Agent the number of
shares of RP to be redeemed from the account of each Agent Member (which
may include an Agent Member holding shares for its own account, including
the Remarketing Agent) and notify the Paying Agent of such determination.
The Paying Agent, upon receipt of such notice, shall in turn determine by
lot the number of shares of RP from each Dividend Period to be redeemed
from the accounts of the Beneficial Owners of the shares of RP whose Agent
Members have been selected by the Securities Depository and give notice of
such determination to the Remarketing Agent. In doing so, the Paying Agent
may determine that shares of RP shall be redeemed from the accounts of some
Beneficial Owners, which may include the Remarketing Agent, without shares
of RP being redeemed from the accounts of other Beneficial Owners.

           (d) Notwithstanding paragraph 4(c) of this Part I, if the
redemption of shares of RP is to take place during a Non-Payment Period
with respect to such shares or certificates representing shares of RP are
held by Holders other than the Securities Depository or its nominee, then
the number of shares of RP to be redeemed shall be determined by the Board
of Directors and the shares to be redeemed shall be selected by the
Corporation pro rata from among current Dividend Periods and by lot from
among shares within each current Dividend Period.

           (e) Any Notice or Redemption shall be given by the Corporation
to the Paying Agent, the Securities Depository (and any other Holder) and
the Remarketing Agent, by telephone, not later than 3:00 p.m., New York
City time (and later confirmed in writing) on (A) in the case of optional
redemption pursuant to paragraph 4(a) of this Part I (i) the Settlement
Date in the case of a partial redemption of the shares of RP, (ii) the
Tender Date in the case of a redemption in whole of the shares of RP or
(iii) during a Non-Payment Period, the later of the Dividend Payment Date
and the seventh day, in each case prior to the earliest date upon which any
such redemption shall occur and (B) in the case of mandatory redemption
pursuant to paragraph 4(b) of this Part I, the fifth Business Day prior to
the redemption date. In the case of a partial redemption of the shares of
RP, the Paying Agent shall use reasonable efforts to provide telephonic
notice to each Beneficial Owner of shares of RP called for redemption not
later than the close of business on the Business Day on which the Paying
Agent determines the shares to be redeemed, as described in paragraph 4(c)
if this Part I (or, during a Non-Payment Period, not later than the close
of business on the Business Day immediately following the day on which the


                                       36
<PAGE>




Paying Agent receives a Notice of Redemption from the Corporation). In the
case of a redemption in whole of the shares of RP, the Paying Agent shall
use reasonable efforts to provide telephonic notice to each Beneficial
Owner not later than the close of business on the Business Day immediately
following the day on which it receives a Notice of Redemption from the
Corporation. In any case described in clause (i) or (iii) of the first
sentence of this paragraph 4(e), such telephonic notice shall be confirmed
promptly in writing not later than the close of business on the third
Business Day preceding the redemption date by notice sent by the Paying
Agent to each Beneficial Owner of shares of RP called for redemption, the
Remarketing Agent and the Securities Depository.

           (f) Every Notice of Redemption and other redemption notice shall
state: (i) the redemption date; (ii) the number of shares of RP to be
redeemed; (iii) the redemption price; (iv) that dividends on the shares of
RP to be redeemed shall cease to accumulate as of such redemption date; and
(v) the provision pursuant to which such shares are being redeemed. In
addition, notice of redemption given to a Beneficial Owner shall state the
CUSIP number, if any, of the shares of RP to be redeemed and the manner in
which the Beneficial Owners of such shares may obtain payment of the
redemption price. No effect in the Notice of Redemption or other redemption
notice or in the transmittal or the mailing hereof shall affect the
validity of the redemption proceedings, except as required by applicable
law. The Paying Agent shall use its reasonable efforts to cause the
publication of a redemption notice in an Authorized Newspaper within two
Business Days of the date of the Notice of Redemption, but failure so to
publish such notification shall not affect the validity or effectiveness of
any such redemption proceedings. Shares of RP the Beneficial Owners of
which shall have been given Notice of Redemption shall not be subject to
transfer outside of a Remarketing.

           (g) On any redemption date, the Corporation shall deposit,
irrevocably in trust, in same-day funds, with the Paying Agent, by 12:00
noon, New York City time, the price to be paid on such redemption date
(including premium, if any, resulting from the designation of a
Premium-Call Period) of any share of RP plus an amount equal to cash
dividends thereon accumulated but unpaid to such redemption date (whether
or not earned or declared). For the purposes of the foregoing, payment in
New York Clearing House (next-day) funds at any time on any Business Day
shall be considered equivalent to payment in same-day funds on the next
Business Day at the same time, and any payment made after 12:00 noon, New
York City time, on any Business Day shall be considered to have been made
instead in the same form of funds before 12:00 noon, New York City time, on
the next Business Day.

           (h)   In connection with any redemption, upon the giving of a
Notice of Redemption and the deposit of the funds necessary for such
redemption with the Paying Agent in accordance with this paragraph 4, all
rights of the Holders of shares of RP so called for redemption shall cease
and terminate, except the right of the Holders thereof to receive the
redemption price thereof, inclusive of an amount equal to the premium, if
any, resulting from the designation of a Premium-Call Period plus cash
dividends (whether or not earned or declared) accumulated but unpaid to the
redemption date but without any interest or other additional amount (except
as provided in paragraph 3(h) or 3(n) of this Part I), and such shares
shall no longer be deemed outstanding for any purpose.  The Corporation


                                       37
<PAGE>



shall be entitled to receive from the Paying Agent, promptly after the date
fixed for redemption, any cash deposited with the Paying Agent as aforesaid
in excess of the sum of (i) the aggregate redemption price of the shares of
RP called for redemption on such date and (ii) all other amounts to which
Holders of shares of RP called for redemption may be entitled. Any funds so
deposited with the Paying Agent which are unclaimed at the end of ninety
days from such redemption date shall, to the extent permitted by law, be
repaid to the Corporation, after which time the Holders of shares of RP so
called for redemption shall look only to the Corporation for payment of the
redemption price and all other amounts to which they may be entitled. The
Corporation shall be entitled to receive, from time to time after the date
fixed for redemption, any interest on the funds so deposited.

           (i) To the extent that any redemption for which Notice of
Redemption has been given is not made by reason of the absence of legally
available funds therefor, such redemption shall be made as soon as
practicable to the extent such funds become available. Failure to redeem
shares of RP shall be deemed to exist at any time after the date specified
for redemption in a Notice of Redemption when the Corporation shall have
failed, for any reason whatsoever, to deposit funds with the Paying Agent
pursuant to paragraph 4(g) of this Part I with respect to any shares for
which such Notice of Redemption has been given. Notwithstanding the fact
that the Corporation shall not have redeemed shares of RP for which a
Notice of Redemption has been given, dividends may be declared and paid on
shares of RP and shall include those shares of RP for which a Notice of
Redemption has been given.

           (j) Notwithstanding the foregoing, (i) no share of RP may be
redeemed pursuant to paragraph 4(a) of this Part I unless the full amount
of accumulated but unpaid cash dividends to the date fixed for redemption
for each such share of RP called for redemption shall have been declared,
and (ii) no share of RP may be redeemed unless all outstanding shares of RP
are simultaneously redeemed, nor may any shares of RP be purchased or
otherwise acquired by the Corporation except in accordance with a purchase
offer made on substantially equivalent terms by the Corporation for all
outstanding shares of RP, unless, in each such instance, cash dividends on
all outstanding shares of RP through the end of their most recently ended
Dividend Periods (or, if such transaction is on a Dividend Payment Date,
through the Dividend Periods ending on the day prior to such Dividend
Payment Date) shall have been paid or declared and sufficient funds for the
payment thereof deposited with the Paying Agent.

           (k) Except as set forth in this paragraph 4 with respect to
redemptions and subject to paragraph 4(j) hereof, nothing contained herein
shall limit any legal right of the Corporation or any affiliate to purchase
or otherwise acquire any share of RP at any price. Any shares of RP which
have been redeemed, purchased or otherwise acquired by the Corporation or
any affiliate thereof may be resold. In lieu of redeeming shares called for
redemption, the Corporation shall have the right to arrange for other
purchasers to purchase from Beneficial Owners all shares of RP to be
redeemed pursuant to this paragraph 4 by their paying to such Beneficial
Owners on or before the close of business on the redemption date an amount
equal to not less than the redemption price payable by the Corporation on
the redemption of such shares, and the obligation of the Corporation to pay
such redemption price shall be satisfied and discharged to the extent such
payment is so made by such purchasers.


                                       38
<PAGE>




           (l) Notwithstanding any of the foregoing provisions of this
paragraph 4, the Remarketing Agent may, in its sole discretion, modify the
procedures set forth above with respect to notification of redemption,
provided that, any such modification does not adversely affect any Holder
or Beneficial Owner of shares of RP.

      5. Liquidation. Upon a liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the Holders
shall be entitled, whether from capital or surplus, before any assets of
the Corporation shall be distributed among or paid over to holders of
Common Stock or any other class or series of stock of the Corporation
junior to the RP as to liquidation payments, to be paid the amount of
$100,000 per share of RP, plus premium, if any, plus an amount equal to all
accumulated but unpaid dividends thereon (whether or not earned or
declared) to and including the date of final distribution. After any such
payment, the Holders shall not be entitled to any further participation in
any distribution of assets of the Corporation.

           (a) If, upon any such liquidation, dissolution or winding up of
the Corporation, the assets of the Corporation shall be insufficient to
make such full payments to the Holders and the holders of any Preferred
Stock ranking as to liquidation, dissolution or winding up on a parity with
the RP, then such assets shall be distributed among the Holders and such
parity holders ratably in accordance with the respective amounts which
would be payable on such shares of RP and any other such Preferred Stock if
all amounts thereon were paid in full.

           (b) Neither the consolidation nor the merger of the Corporation
with or into any corporation or corporations nor a reorganization of the
Corporation alone nor the sale or transfer by the Corporation of all or
substantially all of its assets shall be deemed to be a dissolution or
liquidation of the Corporation.

      6. Voting Rights. (a) General. Each Holder of shares of RP shall be
entitled to one vote for each share held on each matter submitted to a vote
of stockholders of the Corporation and, except as otherwise provided in the
1940 Act, the Charter or the Bylaws or as described below, the holders of
shares of Preferred Stock, including RP, and of shares of Common Stock
shall vote together as one class. Prior to the issuance of any RP, the
Board of Directors by resolution shall designate two existing directors
representing holders of Preferred Stock. At the first meeting of
stockholders for which the record date is a date on which shares of
Preferred Stock are outstanding, the holders of Preferred Stock entitled to
vote at such meeting shall have the right as a class, to the exclusion of
the holders of the common stock, to elect two directors of the Corporation
who shall serve for the unexpired terms of the directors originally
designated by the Board of Directors as directors representing holders of
Preferred Stock; except that, if such meeting is an annual meeting of
stockholders at which the term of one of such designated directors expires,
the director so elected to succeed the designated director shall be elected
for a term expiring at the time of the third succeeding annual meeting of
stockholders, or thereafter when his successor is elected and qualified.
Thereafter, the holders of Preferred Stock shall have the right as a class,
to the exclusion of the holders of the common stock, to elect directors to
succeed either of the directors representing the Preferred Stock whose
terms are expiring or whose seats on the Board of Directors are vacant.


                                       39
<PAGE>



Subject to paragraph 6(b) hereof, the holders of a majority of the shares
of Common Stock shall elect the balance of the directors.

           (b) Right to Elect Majority of Board of Directors. 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 of directors constituting the Board of Directors shall be
automatically increased by the smallest number that, when added to the
number of directors then constituting the Board of Directors, shall
(together with the two directors elected by the holders of Preferred Stock,
including RP, pursuant to paragraph 6(a)) constitute a majority of such
increased number, and the holders of a majority of Preferred Stock,
including RP, shall be entitled, voting as a single class on a
one-vote-per-share basis (to the exclusion of the holders of all other
securities and classes of capital stock of the Corporation), to elect the
smallest number of additional directors of the Corporation that shall
constitute a majority of the total number of directors of the Corporation
so increased. A Voting Period shall commence if at the close of business on
any Dividend Payment Date 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 shares of RP 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 Paying Agent
for the payment of such accumulated dividends. Upon the termination of a
Voting period, the voting rights described in this paragraph 6(b) shall
cease, subject always, however, to the revesting of such voting rights in
the holders of Preferred Stock, including RP, upon the further occurrence
of any of the events described in this paragraph 6(b).

           (c)   Voting Procedures.
                 -----------------

                 (i) As soon as practicable after the accrual of any right
of the holders of Preferred Stock, including RP, to elect a majority of
directors, the Corporation shall notify the Paying Agent and Paying Agent
shall call a special meeting of the holders of Preferred Stock, including
RP, and shall mail a notice of such special meeting to such holders not
less than 10 nor more than 20 days after the date of mailing of such
notice. If the Corporation fails to send such notice to the Paying Agent or
if the Paying Agent does not call such a special meeting, it may be called
by any holder of Preferred Stock, including RP, on like notice. The record
date for determining the holders of Preferred Stock, including RP, entitled
to notice of and to vote at such special meeting shall be the close of
business on the fifth Business Day preceding the day on which such notice
is mailed. At any such special meeting and at each meeting held during a
Voting Period, the holders of Preferred Stock, including RP, voting
together as a class (to the exclusion of the holders of all other
securities and classes of capital stock of the Corporation), shall be
entitled to elect the number of directors prescribed in paragraph 6(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 the holders of Preferred
Stock, including RP, 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 quorum is present; provided, however, that no such meeting
may be adjourned to a date more than 120 days from the original record date
without notice.



                                       40
<PAGE>




                 (ii) For purposes of determining any rights of the Holders
to vote on any matter, whether such right is created by these Articles
Supplementary, by statute or otherwise, no Holder shall be entitled to vote
and no share of RP shall be deemed to be "outstanding" for the purpose of
voting or determining the number of shares required to constitute a quorum,
if, prior to or concurrently with the time of determination of shares
entitled to vote or shares deemed outstanding for quorum purposes, as the
case may be, sufficient funds for the redemption of such shares have been
deposited in trust with the Paying Agent for that purpose and the requisite
Notice of Redemption with respect to such shares shall have been given as
provided in paragraph 4 of this Part I. No share of RP held by the
Corporation or any affiliate of the Corporation shall have any voting
rights or be deemed to be outstanding for voting purposes.

                 (iii) The terms of office of all persons who are directors
of the Corporation at the time of a special meeting of holders of Preferred
Stock, including RP, to elect directors shall continue, notwithstanding the
election at such meeting by such holders of the number of directors that
they are entitled to elect, and the persons so elected by such holders,
together with the incumbent directors elected by the holders of the Common
Stock, shall constitute the duly elected directors of the Corporation.

                 (iv) Simultaneously with the expiration of a Voting
Period, the terms of office of the additional directors elected by the
holders of Preferred Stock, including RP, shall terminate, the incumbent
directors who shall have been elected by the holders of the Common Stock
(or by the Board of Directors at a time which was not during a Voting
Period) and the two incumbent directors the holders of Preferred Stock,
including RP, have the right to elect in any event shall constitute the
directors of the Corporation and the voting rights of such holders to elect
additional directors shall cease.

                 (v) The directors elected by the holders of Preferred
Stock, including RP, shall (subject to the provisions of any applicable
law) be subject to removal only by the vote of the holders of a majority of
the shares of Preferred Stock, including RP, outstanding. Any vacancy on
the Board of Directors occurring by reason of such removal or otherwise may
be filled only by vote of the holders of at least a majority of shares of
Preferred Stock, including RP, outstanding, and if not so filled such
vacancy shall (subject to the provisions of any applicable law) be filled
by a majority of the remaining directors (or the remaining director) who
were elected by such holders. Any other vacancy on the Board of Directors
during a Voting Period shall be filled by a vote of the holder or holders
of Common Stock.

           (d) Exclusive Remedy. Unless otherwise required by law, the
Holders of shares of RP shall not have any relative rights or preferences
or other special rights other than those specifically set forth herein. The
Holders of shares of RP shall have no preemptive rights. In the event that
the Corporation fails to pay any dividends on the shares of RP, the
exclusive remedy of the Holders shall be the right to vote for directors
pursuant to the provisions of this paragraph 6. In no event shall the
Holders of shares of RP have any right to sue for, or bring a proceeding
with respect to, such dividends or redemptions or damages for the failure
to receive the same.



                                       41
<PAGE>




      7.   1940 Act RP Asset Coverage.  The Corporation shall maintain, as
of the last Business Day of each month in which any share of RP is
outstanding, the 1940 Act RP Asset Coverage.

      8.   Asset and Liquidity Coverage.
           ----------------------------

           (a)   RP Basic Maintenance Amount.  (i)  The Corporation shall
maintain, on each Valuation Date, Eligible Portfolio Property having an
aggregate Discounted Value at lease equal to the RP Price Maintenance
Amount.

                 (ii) On or before 5:00 p.m., New York City time, on the
           third Business Day after each Valuation Date, the Corporation
           shall complete and deliver to the Remarketing Agent and the
           Paying Agent an RP Basic Maintenance Report, which will be
           deemed to have been delivered to the Remarketing Agent and the
           Paying Agent if the Remarketing Agent and the Paying Agent
           receive a copy or telecopy, telex or other electronic
           transcription thereof and on the same day the Corporation mails
           to the Remarketing Agent and the Paying Agent for delivery on
           the next Business Day the full RP Basic Maintenance Report A
           failure by the Corporation to deliver an RP Basic Maintenance
           Report under this paragraph 8(a)(ii) without the prior consent
           of the Remarketing Agent and the Paying Agent shall be deemed to
           be delivery of an RP Basic Maintenance Report indicating the
           Discounted Value for all assets of the Corporation is less than
           the RP Basic Maintenance Amount, as of the relevant Valuation
           Date.

                 (iii) Within ten Business Days after the date of delivery
           to the Remarketing Agent and the Paying Agent of an RP Basic
           Maintenance Report in accordance with paragraph 8(a)(ii) above
           relating to a Quarterly Valuation Date, the Independent
           Accountant will confirm in writing to the Remarketing Agent and
           the Paying Agent (A) the mathematical accuracy of the
           calculations reflected in such Report, (B) that, in such Report,
           the Corporation determined in accordance with these Articles
           Supplementary the assets of the corporation which constitute
           Eligible Portfolio Property at such Quarterly Valuation Date,
           (C) that, in such Report, the Corporation has determined in
           accordance with these Articles Supplementary the assets of the
           Corporation had, at such Quarterly Valuation Date, Eligible
           Portfolio Property of an aggregate Discounted Value at least
           equal to the RP Basic Maintenance Amount, (D) with respect to
           the S&P rating on Utility Bonds and Senior Debt Obligations,
           issuer name, issue size and coupon rate listed in such Report,
           that information has been traced and agrees with the information
           listed in The Standard & Poor's Bond Guide (in the event such
           information does not agree or such information is not listed in
           The Standard & Poor's Bond Guide, the Independent Accountant
           will inquire of S&P what such information is, and provide a
           listing in their letter of such differences, if any), (E) with
           respect to the Moody's ratings on Utility Bonds and Senior Debt
           Obligations, issuer name, issue size and coupon rate listed in
           such Report, that information has been traced and agrees with

                                       42
<PAGE>




           the information listed in Moody's Bond Record (in the event such
           information does not agree or such information is not listed in
           Moody's Bond Record, the Independent Accountant will inquire of
           Moody's what such information is, and provide a listing in their
           letter of such differences), and (F) with respect to the lower
           of two bid prices (or alternative permissible factors used in
           calculating the Market Value) provided by the custodian of the
           Corporation's assets to the Corporation for purposes of valuing
           securities in the Corporation's portfolio, the Independent
           Accountant has traced the price used in such Report to the lower
           of the two bid prices listed in the Report provided by such
           custodian and verified that such information agrees (in the
           event such information does not agree, the Independent
           Accountant will provide a listing in its letter of such
           differences) (such confirmation is herein called the
           "Accountant's Confirmation"). If any Accountant's Confirmation
           delivered pursuant to this paragraph 8(a)(iii) shows that an
           error was made in the RP Basic Maintenance Report for a
           Quarterly Valuation Date, or shows that a lower aggregate
           Discounted Value for the aggregate of all Eligible Portfolio
           Property of the Corporation was determined by the Independent
           Accountant, the calculation or determination made by such
           Independent Accountant shall be final and conclusive and shall
           be binding on the Corporation, and the Corporation shall
           accordingly amend the RP Basic Maintenance Report to the
           Remarketing Agent and Paying Agent promptly following receipt by
           the Remarketing Agent and the Paying Agent of such Accountant's
           Confirmation.

           (b)   Liquidity Coverage.
                 ------------------

                 (i) As of each Valuation Date as long as any share of RP
           is outstanding, the Corporation shall determine (A) the Market
           Value of the Dividend Coverage Assets owned by the Corporation
           as of that Valuation Date, (B) the Dividend Coverage Amount on
           that Valuation Date, and (C) whether the Minimum Liquidity Level
           is met as of that Valuation Date. The calculations of the
           Dividend Coverage Assets, the Dividend Coverage Amount and
           whether the Minimum Liquidity Level is met shall be set forth on
           a certificate (a "Certificate of Minimum Liquidity") dated as of
           the Valuation Date. The RP Basic Maintenance Report and the
           Certificate of Minimum Liquidity may be combined in one
           certificate. The Corporation shall cause the Certificate of
           Minimum Liquidity to be delivered to the Remarketing Agent and
           the Paying Agent not later than the close of business on the
           third Business Day after the Valuation Date. The Minimum
           Liquidity Level shall be deemed to be met as of any date of
           determination if the Corporation has timely delivered a
           Certificate of Minimum Liquidity relating to such date, which
           states that the same has been met and which is not manifestly
           inaccurate. In the event that a Certificate of Minimum Liquidity
           is not delivered to the Remarketing Agent and the Paying Agent
           when required, the Minimum Liquidity Level shall be deemed not
           to have been met as of the applicable date.

                                       43
<PAGE>



                 (ii) If the Minimum Liquidity Level is not met as of any
           Valuation Date, then the Corporation shall purchase or otherwise
           acquire Dividend Coverage Assets (with the proceeds from the
           liquidation of Eligible Portfolio Property or otherwise) to the
           extent necessary so that the Minimum Liquidity Level is met as
           of the fifth Business Day following such Valuation Date. The
           Corporation shall, by such fifth Business Day, provide to the
           Paying Agent and the Remarketing Agent a Certificate of Minimum
           Liquidity setting forth the calculations of the Dividend
           Coverage Assets and the Dividend Coverage Amount and showing
           that the Minimum Liquidity Level is met as of such fifth
           Business Day together with a report of the custodian of the
           Corporation's assets confirming the amount of the Corporation's
           Dividend Coverage Assets as of such fifth Business Day.

      9. Restrictions on Certain Distributions. For so long as any share of
RP is outstanding, the Corporation shall not declare, pay or set apart for
payment 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 Stock or other stock, if any, ranking junior to the
shares of RP as to dividends or upon liquidation) in respect of the Common
Stock or any other stock of the Corporation ranking junior to or on a
parity with the shares of RP as to dividends or upon liquidation, or call
for redemption, redeem, purchase or otherwise acquire for consideration any
shares of the Common Stock or any other such junior stock (except by
conversion into or exchange for stock of the Corporation ranking junior to
or on a parity with the shares of RP as to dividends and upon liquidation),
unless (A) immediately after such transaction, the RP Basic Maintenance
Amount and the 1940 Act RP Asset Coverage would be achieved, (B) full
cumulative dividends on shares of RP and shares of Other RP 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 Paying Agent, (C) any debt required to be paid under paragraph 3(n) of
this Part I on or before the date of such declaration or payment has been
paid and (D) the Corporation has redeemed the full number of shares of RP
required to be redeemed by any provision for mandatory redemption contained
herein.

      10. Notice. All notices or communications, unless otherwise specified
in the Bylaws of the Corporation or these Articles Supplementary, shall be
sufficiently given if in writing and delivered in person or mailed by
first-class mail, postage prepaid. Notice shall be deemed given on the
earlier of the date received or the date seven days after which such notice
is mailed.

      11. Borrowings. For so long as the shares of RP are rated by S&P, the
aggregate amount of borrowings by the Corporation (including guarantees
made by the Corporation) shall be limited to an amount equal to 10% of the
value of the Corporation's assets; provided, further, that the Corporation
shall not incur any such borrowings subsequent to the issuance of the RP
unless S&P advises the Corporation in writing that such borrowings will not
adversely affect its then-current rating on the RP.

      12.  Options and Futures Transactions. For so long as the shares of
RP are rated by either Moody's or S&P, the Corporation will not purchase or
sell futures contracts or related options or engage in reverse


                                       44
<PAGE>



repurchase agreement transactions unless Moody's and/or S&P, as the case
may be, advise the Corporation in writing that such action or actions will
not adversely affect their then-current ratings on the RP.

      13. Other Restrictions. For so long as the shares of RP are rated by
S&P, the Corporation may not (i) engage in transactions involving
repurchase obligations which do not constitute Short Term Money Market
Instruments, (ii) engage in transactions involving short sales of portfolio
securities or (iii) overdraw any bank accounts of the Corporation, unless,
in each case, S&P advises the Corporation in writing that such action or
actions will not adversely affect its then current ratings on the RP.


                                PART II.
                                --------
                           REMARKETING PROCEDURES

      1. Remarketing Schedule. Each Remarketing shall take place over a
three-day period consisting of the Tender Date, the Dividend Reset Date and
the Settlement Date. Such dates or the method of establishing such dates
shall be determined by the Board of Directors from time to time.

      2. Procedure for Tendering. (a) Each share of RP is subject to Tender
and Dividend Reset only at the end of each Dividend Period applicable to
such share and may be tendered in a Remarketing only on the Tender Date
immediately prior to the end of the current Dividend Period with respect
thereto. By 12:00 noon, New York City time, on each such Tender Date, the
Remarketing Agent shall, after canvassing the market and considering
prevailing market conditions at the time for shares of RP and similar
securities, provide Beneficial Owners non-binding indications of Applicable
Dividend Rates for the next succeeding 7-day Dividend Period, 49-day
Dividend Period and any Optional Dividend Period or designated Special
Dividend Period provided that if the next Dividend Period has been
designated a Special Dividend Period, the Remarketing Agent will provide to
holders thereof a non-binding indication of the Applicable Dividend Rate
only for such Special Dividend Period. The actual Applicable Dividend Rate
for such Dividend Period may be greater than or less than the rate per
annum indicated in such non-binding indications (but not greater than the
applicable Maximum Dividend Rate). By 1:00 p.m., New York City time, on
such Tender Date, each Beneficial Owner of shares of RP subject to Tender
and Dividend Reset must notify the Remarketing Agent of its desire, on a
share-by-share basis, either to tender such share of RP at a price of
$100,000 per share or to continue to hold such share of RP and elect either
a 7-day Dividend Period, a 49-day Dividend Period or a specific available
Optional Dividend Period or, if applicable, accept a designated Special
Dividend Period, at the new Applicable Dividend Rate for the selected or
designated, as the case may be, Dividend Period. Any notice given to the
Remarketing Agent to tender or hold shares for a particular Dividend Period
shall be irrevocable and shall not be conditioned upon the level at which
the Applicable Dividend Rate is established. Any such notice may not be
waived by the Remarketing Agent, except that prior to 4:00 p.m., New York
City time, on the Dividend Reset Date, the Remarketing Agent may, in its
sole discretion (i) at the request of a Beneficial Owner that has tendered
one or more shares of RP to the Remarketing Agent, contingently waive such
Beneficial Owner's tender and thereby enable such Beneficial Owner to
continue to hold the share or shares for a 7-day Dividend Period, 49-day


                                       45
<PAGE>



Dividend Period or available Optional Dividend Period or a designated
Special Dividend Period as agreed to by such Beneficial Owner and the
Remarketing Agent at such time, so long as such tendering Beneficial Owner
has indicated to the Remarketing Agent that it would accept the new
Applicable Dividend Rate for such Dividend Period, such waiver to be
contingent upon the Remarketing Agent's ability to remarket all shares of
RP tendered in such Remarketing, and (ii) at the request of a Beneficial
Owner that has elected to hold one or more of its shares of RP, waive such
Beneficial Owner's election with respect thereto.

           (b) The right of each Beneficial Owner to tender shares of RP in
      a Remarketing therefor shall be limited to the extent that (i) the
      Remarketing Agent conducts a Remarketing pursuant to the terms of the
      Remarketing Agreement, (ii) shares tendered have not been called for
      redemption and (iii) the Remarketing Agent is able to find a
      purchaser or purchasers for tendered shares of RP at an Applicable
      Dividend Rate for the next Dividend Period that is not in excess of
      the Maximum Dividend Rate.

      3. Determination of Applicable Dividend Rates. (a) Between 1:00 p.m.,
New York City time, on each Tender Date and 4:00 p.m., New York City time,
on the succeeding Dividend Reset Date, the Remarketing Agent shall
determine (i) unless the Board of Directors has designated such next
Dividend Period as a Special Dividend Period with respect to all shares
subject to Tender and Dividend Reset, the allocation of tendered shares of
RP among a 7-day Dividend Period, a 49-day Dividend Period and each
available Option Dividend Period, if any, and any Special Dividend Period
provided that, if the Remarketing Agent is unable to remarket on such
Dividend Reset Date all such tendered shares in a Remarketing at a price of
$100,000 per share, then the Remarketing Agent shall allocate no shares to
any Optional Dividend Period of more than 98 days and no share will be
assigned to any Special Dividend Period of more than 98 days, and (ii) the
Applicable Dividend Rates to the nearest one-thousandth (0.001) of one
percent per annum for the next 7-day Dividend Period, the next 49-day
Dividend Period and the next Optional Dividend Period or Periods, or the
next designated Special Dividend Period, as the case may be. The Applicable
Dividend Rates for such Dividend Periods, except as otherwise required
herein, shall be the rate per annum which the Remarketing Agent determines,
in its sole judgment, to be the lowest rates, giving effect to such
allocation, that will enable it to remarket on behalf of the Beneficial
Owners thereof all shares of RP tendered to it at a price of $100,000 per
share.

           (b) If no Applicable Dividend Rate shall have been established
      on a Dividend Reset Date on a Remarketing for a 7-day Dividend
      Period, a 49-day Dividend Period, or any Optional Dividend Period or
      Periods or Special Dividend Period, or for any or all of the
      foregoing, for any reason (other than because there is no Remarketing
      Agent or the Remarketing Agent is not required to conduct a
      Remarketing pursuant to the terms of the Remarketing Agreement), then
      the Remarketing Agent, except during a Non-Payment Period, in its
      sole discretion, shall, after taking into account market conditions
      as reflected in the prevailing yields of bond and variable rate
      taxable and tax-exempt debt securities and the prevailing dividend
      yields of fixed and variable rate preferred stock, if necessary,
      determine the Applicable Dividend Rate or Rates, as the case may be,


                                       46
<PAGE>




      that would be the initial dividend rate or rates fixed in an offering
      on such Dividend Reset Date, assuming in each case a comparable
      dividend period or periods, issuer and security. If there is no
      Remarketing because there is no Remarketing Agent or the Remarketing
      Agent is not required to conduct a Remarketing pursuant to the
      Remarketing Agreement, then, except during a Non-Payment Period, the
      Applicable Dividend Rate for each subsequent Dividend Period for
      which no Remarketing takes place because of the foregoing shall be
      the applicable Maximum Dividend Rate for a 7-day Dividend Period and
      the next succeeding Dividend Period shall be a 7-day Dividend Period.
      In a Remarketing, the Applicable Dividend Rates for different
      Dividend Periods need not be equal.

           (c) In determining such Applicable Dividend Rate or Rates, the
      Remarketing Agent shall, after taking into account market conditions
      as reflected in the prevailing yields of fixed and variable rate
      taxable and tax-exempt debt securities and the prevailing dividend
      yields of fixed and variable rate preferred stock, in providing
      non-binding indications of the Applicable Dividend Rates to
      Beneficial Owners and potential purchasers of shares of RP, (i)
      consider the number of shares of RP tendered and the number of shares
      of RP potential purchasers are willing to purchase and (ii) contact
      by telephone or otherwise current and Potential Beneficial Owners of
      shares of RP and ascertain the dividend rates at which they would be
      willing to hold shares of RP.

           (d) The Applicable Dividend Rate or Rates, as well as the
      allocation of tendered shares of RP, shall be determined as aforesaid
      by the Remarketing Agent in its sole discretion (except as otherwise
      provided in these Articles Supplementary with respect to Applicable
      Dividend Rates that shall be the Non-Payment Period Rate and Maximum
      Dividend Rate) and shall be conclusive and binding on Holders and
      Beneficial Owners.

           (e) As a condition precedent to purchasing shares of RP in any
      offering, in any Remarketing or outside any Remarketing, each
      purchaser of shares of RP shall sign and deliver a Master Purchaser's
      Letter, the sufficiency of any Master Purchaser's Letter to be
      determined by the Remarketing Agent in its sole discretion.

           (f) Except during a Non-Payment Period, the Applicable Dividend
      Rate for any Dividend Period shall not be more than the applicable
      Maximum Dividend Rate.

      4. Allocation of Shares; Failure to Remarket at $100,000 Per Share.
(a) If the Remarketing Agent is unable to remarket by 4:00 p.m., New York
City time, on any Dividend Reset Date all shares of RP tendered to it in
the related Remarketing at a price of $100,000 per share (i) each
Beneficial Owner that tendered shares of RP for sale shall sell a number of
shares of RP on a pro rata basis, to the extent practicable, or by lot, as
determined by the Remarketing Agent in its sole discretion based on the
number of orders to purchase shares of RP in such Remarketing; and (ii) the
next Dividend Period shall be a 7-day Dividend Period for all tendered (or
deemed tendered) but unsold shares and for all other shares the Beneficial
Owners of which shall have elected or been deemed to have elected to hold
such shares for a Dividend Period of more than 98 days; and (iii) the


                                       47
<PAGE>




Applicable Dividend Rates for the next 7-day Dividend Period (including the
7-day Dividend Period referred to in the preceding clause (ii)), next 49
day Dividend Period and, if applicable, next Optional Dividend Period or
Periods of 98 or fewer days or Special Dividend Period of 98 or fewer days
shall be the applicable Maximum Dividend Rates for such Dividend Periods.

           (b) If the allocation procedures described above would result in
      the sale of a fraction of a share of RP, the Remarketing Agent shall,
      in its sole discretion, round up or down the number of shares of RP
      sold by each Beneficial Owner on such Dividend Reset Date so that
      each share sold by a Beneficial Owner shall be a whole share of RP
      and the total number of shares sold equals the total number of shares
      bought on such Dividend Reset Date.

      5. Notification of Results; Settlement. (a) By telephone at
approximately 4:30 p.m., New York City time, on each Dividend Reset Date
the Remarketing Agent shall advise each Beneficial Owner of tendered shares
and each purchaser thereof (or the Agent Member thereof, (i) of the number
of shares such Beneficial Owner or purchaser as to sell or purchase and
(ii) to give instructions to its Agent Member to deliver such shares
against payment therefor or to pay the purchase price against delivery as
appropriate. The Remarketing Agent will also advise each Beneficial Owner
or purchaser that is to continue to hold, or to purchase, shares with
Dividend Periods beginning on the Business Day following such Dividend
Reset Date of the Applicable Dividend Rates for such shares.

           (b) In accordance with the Securities Depository's normal
      procedures, on the Settlement Date, the transactions described above
      with respect to each share of RP shall be executed through the
      Securities Depository, if the Securities Depository or its nominee
      holds or is to hold the certificates relating to the shares to be
      purchased, and the accounts of the respective Agent Members of the
      Securities Depository shall be debited and credited and shares
      delivered by book entry as necessary to effect the purchases and
      sales of shares of RP and the changes in types of Dividend Periods as
      determined in the related Remarketing. Purchasers of shares of RP
      shall make payment to the Paying Agent in same-day funds against
      delivery to other purchasers or their nominees of one or more
      certificates representing shares of RP, or, if the Securities
      Depository or its nominee holds or is to hold the certificates
      relating to the shares to be purchased, through their Agent Members
      in same-day funds to the Securities Depository against delivery
      through their Agent Members by book entry of shares of RP or as
      otherwise required by the Securities Depository. The Securities
      Depository shall make payment in accordance with its normal
      procedures.

           (c) If any Beneficial Owner selling shares of RP in a
      Remarketing fails to deliver such shares, the Agent Member of such
      selling Beneficial Owner and of any other person that was to have
      purchased shares of RP in such Remarketing may deliver to any such
      other person a number of whole shares of RP that is less than the
      number of shares that otherwise was to be purchased by such person.
      In such event, the number of shares of RP to be so delivered shall be
      determined by such Agent Member. Delivery of such lesser number of
      shares of RP shall constitute good delivery.


                                       48
<PAGE>




           (d) The Remarketing Agent, the Paying Agent and the Securities
      Depository each will use its reasonable commercial efforts to meet
      the timing requirements set forth in paragraphs (a) and (b) above;
      provided that, in the event that there is a delay in the occurrence
      of any delivery or other event connected with a Remarketing, the
      Remarketing Agent, the Paying Agent and the Securities Depository
      each will use its reasonable commercial efforts to accommodate such
      delay in furtherance of the Remarketing.

           (e) Notwithstanding any of the foregoing provisions of this
      paragraph 5, the Remarketing Agent may, in its sole discretion,
      modify the settlement procedures set forth above with respect to
      settlement, provided any such modification does not adversely affect
      the Beneficial Owners or the Holders of RP or the Corporation.

      6. Purchase of Shares of RP by Remarketing Agent. The Remarketing
Agent may purchase for its own account shares of RP in a Remarketing,
provided that it purchases all tendered (or deemed tendered) shares of RP
not sold in such Remarketing to other purchasers and that the Applicable
Dividend Rate or Rates established with respect to such shares in such
Remarketing are no higher than the Applicable Dividend Rate or Rates that
would have been established if the Remarketing Agent had not purchased such
shares. Except as provided in the previous sentence, the Remarketing Agent
shall not be obligated to purchase any shares of RP that would otherwise
remain unsold in a Remarketing. If the Remarketing Agent owns any shares of
RP subject to a Remarketing immediately prior to a Remarketing and if all
other shares subject to such Remarketing and tendered for sale by other
Beneficial Owners of shares of RP have been sold in such Remarketing, then
the Remarketing Agent may sell such number of its such shares in such
Remarketing as there are outstanding orders to purchase that have not been
filled by such shares tendered for sale by other Beneficial Owners. Neither
the Corporation, the Paying Agent nor the Remarketing Agent shall be
obligated in any case to provide funds to make payment to a Beneficial
Owner upon such Beneficial Owner's tender of its shares of RP in a
Remarketing.

      7. Applicable Dividend Rate During a Non-Payment Period. So long as a
Non-Payment Period shall continue, paragraphs 1, 2, 3, 4, 5 and 6 of this
Part II shall not be applicable to any of the shares of RP and the shares
of RP shall not be subject to Tender and Dividend Reset.

      8. Transfers. As a condition precedent to purchasing shares of RP in
any offering, in any Remarketing or outside any Remarketing, each purchaser
of shares of RP shall be required to sign and deliver a Master Purchaser's
Letter, the sufficiency of any Master Purchaser's Letter to be determined
by the Remarketing Agent in its sole discretion, in which such purchaser
shall agree, among other things, (i) unless the Corporation has elected,
during a Non-Payment Period, to waive this requirement, to have its
ownership of such shares of RP maintained in book entry form by the
Securities Depository, in the account of a designated Agent Member which,
in turn, shall maintain records of such purchaser's beneficial ownership,
(ii) to be conclusively bound by the remarketing procedures, including the
Remarketing Agent's determination of the Applicable Dividend Rates,
pursuant to the remarketing procedures, (iii) that its notice to tender
shares of RP in a Remarketing will constitute an irrevocable offer, except
as set forth in such Master Purchaser's Letter, to sell the shares


                                       49
<PAGE>



specified in such notice and authorization to the Remarketing Agent to
sell, transfer or otherwise dispose of such shares as set forth herein and
(iv) unless the Corporation shall have elected, during a Non-Payment
Period, to waive this requirement, to sell, transfer or otherwise dispose
of any share of RP held by it only pursuant to orders placed in a
Remarketing therefor or to a person that has signed and delivered a Master
Purchaser's Letter as provided herein, and, in the case of any transfer
other than pursuant to a Remarketing, to ensure that an Agent Member
advises the Remarketing Agent of such transfer. The Agent Member shall be
authorized and instructed to disclose to the Remarketing Agent and/or the
Paying Agent such information with respect to such purchaser's beneficial
ownership as the Remarketing Agent or Paying Agent shall request.

      9. Miscellaneous. To the extent permitted by applicable law, the
Board of Directors of the Corporation may interpret or adjust the
provisions hereof to resolve any inconsistency or ambiguity, remedy any
formal defect or make any other change or modification which does not
adversely affect the rights of Holders or Beneficial Owners of shares of RP
and if such inconsistency or ambiguity reelects an incorrect provision
hereof then the Board of Directors may authorize the filing of a
Certificate of Amendment or a Certificate of Correction, as the case may
be.

      10. Securities Depository; Stock Certificates. (a) If there is a
Securities Depository, an appropriate number of certificates for all of the
shares of RP shall be issued to the Securities Depository and registered in
the name of the Securities Depository or its nominee. Additional
certificates may be issued as necessary to represent shares of RP having
Optional Dividend Periods or Special Dividend Periods. All such
certificates shall bear a legend to the effect that such certificate are
issued subject to the provisions contained in these Articles Supplementary
and each Master Purchaser's Letter. Unless the Corporation shall have
elected, during a Non-Payment Period, to waive this requirement, the
Corporation will also issue stop-transfer instructions to the Paying Agent
for the shares of RP. Except as provided in paragraph (b) below, the
Securities Depository or its nominee will be the Holder, and no Beneficial
Owner shall receive certificates representing its ownership interest in
such shares.

           (b) If the Applicable Dividend Rate applicable to all shares of
      RP shall be the Non-Payment Period Rate or there is no Securities
      Depository, the Corporation may at its option issue one or more new
      certificates with respect to such shares (without the legend referred
      to in paragraph 10(a) of this Part II) registered in the names of the
      Beneficial Owners or their nominees and rescind the stop-transfer
      instruction referred to in paragraph 10(a) of this Part II with
      respect to such shares.



                                       50
<PAGE>




      IN WITNESS WHEREOF, DUFF & PHELPS SELECTED UTILITIES INC. has caused
these presents to be signed in its name and on its behalf by its President,
and its corporate seal to be hereunto affixed and attested by its
Secretary, and the said officers of the Corporation further acknowledged
said instrument to be the corporate act of the Corporation, and stated
under the penalties of perjury that to the best of their knowledge,
information and belief the matters and facts therein set forth with respect
to approval are true in all material respects, all on November 15, 1988.

                                 DUFF & PHELPS SELECTED UTILITIES INC.



                                 By  /s/ Charles V. Hansen
                                     ---------------------------
                                               President

Attest:


/s/ Calvin J. Pederson
-------------------------
         Secretary

























                                           51



</TEXT>
</DOCUMENT>
