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<SEC-DOCUMENT>0000902561-02-000214.txt : 20020430
<SEC-HEADER>0000902561-02-000214.hdr.sgml : 20020430
ACCESSION NUMBER:		0000902561-02-000214
CONFORMED SUBMISSION TYPE:	POS AMI
PUBLIC DOCUMENT COUNT:		11
FILED AS OF DATE:		20020430

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DNP SELECT INCOME FUND INC
		CENTRAL INDEX KEY:			0000806628
		IRS NUMBER:				363480989
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		POS AMI
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04915
		FILM NUMBER:		02627595

	BUSINESS ADDRESS:	
		STREET 1:		PO BOX 32760
		CITY:			LOUISVILLE
		STATE:			KY
		ZIP:			40232
		BUSINESS PHONE:		3123685510

	MAIL ADDRESS:	
		STREET 1:		PO BOX 32760
		CITY:			LOUISVILLE
		STATE:			KY
		ZIP:			40232

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DUFF & PHELPS SELECTED UTILITIES INC
		DATE OF NAME CHANGE:	19910429
</SEC-HEADER>
<DOCUMENT>
<TYPE>POS AMI
<SEQUENCE>1
<FILENAME>posami.txt
<TEXT>

     As filed with the Securities and Exchange Commission on April 30, 2002

                                Investment Company Act file no. 811-4915




================================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                     ------


                                    FORM N-2


                                     -------

       REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
                              Amendment No. 44                         [X]

                                     -------


                           DNP SELECT INCOME FUND INC.
               (Exact name of registrant as specified in charter)


                                     -------

                              55 East Monroe Street
                             Chicago, Illinois 60603
                    (Address of principal executive offices)
                   Registrant's telephone number: 312/368-5510

           Nathan I. Partain                         John R. Sagan
           DNP Select Income Fund Inc.               Mayer, Brown, Rowe & Maw
           55 East Monroe Street                     190 South LaSalle Street
           Chicago, Illinois 60603                   Chicago, Illinois  60603

                   (Names and addresses of agents for service)

It is proposed  that this filing will become  effective:
        [X] immediately upon filing.

[ ] This post-effective amendment designates a new effective date for a
    previously filed post-effective amendment.



<PAGE>


                                       -1-

================================================================================

                  PART A: INFORMATION REQUIRED IN A PROSPECTUS

Item 1. Outside Front Cover

        Not applicable.

Item 2. Cover Pages; Other Offering Information

        Not applicable.

Item 3. Fee Table and Synopsis

        1.

Shareholder Transaction Expenses

       Sales Load (as a percentage of offering price)........................N/A

       Dividend Reinvestment and Cash Purchase Plan Fees.....................(1)

Annual Expenses (as a percentage of net assets attributable to common shares)

       Management Fees.................................................... 0.74%

       Interest Payments on Borrowed Funds................................ 0.46%

       Other Expenses..................................................... 0.37%

               Total Annual Expenses.......................................1.57%

        Example (2)                  1 year      2 years     5 years    10 years
You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return          $16         $32         $86        $187

(1)      Shareholders that reinvest dividends and/or capital gains distributions
         will be charged only brokerage fees in the event that shares are
         purchased in the open market. Investors investing cash in addition to
         any cash dividends reinvested will be charged brokerage commissions
         plus a service fee of $2.50 per transaction. See Item 10.1(c).

(2)      This Example should not be considered a representation of future
         expenses, and actual expenses may be greater or lesser than those
         shown.

The purpose of the foregoing table is to assist an investor in understanding the
costs and expenses that an investor will bear directly or indirectly, and the
information contained therein is not necessarily indicative of future
performance. See Item 9.

         2.    Not applicable.

         3.    Not applicable.


                                      1
<PAGE>

Item 4.  Financial Highlights

         Not applicable.

Item 5.  Plan of Distribution

         Not applicable.

Item 6.  Selling Shareholders

         Not applicable.

Item 7.  Use of Proceeds

         Not applicable.

Item 8.   General Description of the Registrant

          1.   General

               (a) The Registrant, DNP Select Income Fund Inc. (the "Fund"),
               is a corporation organized under the laws of the State of
               Maryland on November 26, 1986.

               (b) The Fund is a diversified closed-end investment company.

          2.   Investment Objectives and Policies

         Investment objectives

         The Fund's primary investment objectives are current income and
long-term growth of income. Capital appreciation is a secondary objective.

         Principal investment strategies

         The Fund seeks to achieve its investment objectives by investing
primarily in a diversified portfolio of equity and fixed income securities of
companies in the public utilities industry. Under normal conditions, more than
65% of the Fund's total assets will be invested in securities of public
utility companies engaged in the production, transmission or distribution of
electric energy, gas or telephone services. The Fund's investment objectives
stated in the preceding paragraph and its policy of concentrating its
investments in the utilities industry are fundamental policies and may not be
changed without the approval of the holders of a "majority" (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act")) of the
outstanding shares of the common stock and the preferred stock voting together
as one class, which means the lesser of (i) 67% of the shares represented at a
meeting at which more than 50% of the outstanding shares are represented or
(ii) more than 50% of the outstanding shares.

                                   2
<PAGE>


         Fundamental investment restrictions

         The following are fundamental investment restrictions of the Fund that
may be changed only with approval of the holders of a "majority" (as defined in
the 1940 Act) of the outstanding shares of the common stock and the preferred
stock voting together as one class:

               1.   The Fund may not invest more than 25% of its total assets
          (valued at the time of investment) in securities of companies
          engaged principally in any one industry other than the utilities
          industry, which includes companies engaged in the production,
          transmission or distribution of electric energy or gas or in
          telephone services, except that this restriction does not apply to
          securities issued or guaranteed by the United States Government or
          its agencies or instrumentalities.

               2.   The Fund may not:

                    (a) invest more than 5% of its total assets (valued at the
               time of the investment) in the securities of any one issuer,
               except that this restriction does not apply to United States
               Government securities; or

                    (b) acquire more than 10% of the outstanding voting
               securities of any one issuer (at the time of acquisition);

         except that up to 25% of the Fund's total assets (at the time of
         investment) may be invested without regard to the limitations set
         forth in this restriction.

               3.   The Fund may borrow money on a secured or unsecured basis
         for any purpose of the Fund in an aggregate amount not exceeding 15%
         of the value of the Fund's total assets at the time of any such
         borrowing (exclusive of all obligations on amounts held as
         collateral for securities loaned to other persons to the extent that
         such obligations are secured by assets of at least equivalent
         value).

               4.   The Fund may not pledge, mortgage or hypothecate its
         assets, except to secure indebtedness permitted by restriction 3 above.
         (The deposit in escrow of securities in connection with the writing of
         put and call options, collateralized loans of securities and collateral
         arrangements with respect to margin requirements for futures
         transactions and with respect to segregation of securities in
         connection with forward contracts are not deemed to be pledges or
         hypothecations for this purpose.)

               5.   The Fund may make loans of securities to other persons to
         the extent of not more than 33 1/3% of its total assets (valued at the
         time of the making of loans), and may invest without limitation in
         short-term obligations and publicly distributed obligations.

               6.   The Fund may not underwrite the distribution of securities
         of other issuers, although it may acquire securities that, in the event
         of a resale, might be required to be registered under the Securities
         Act of 1933, as amended, because the Fund could be regarded as an
         underwriter as defined in that act with respect to the resale.

               7.   The Fund may not purchase or sell real estate or any
         interest therein, except that the Fund may invest in securities secured
         by real estate or interests therein, such as mortgage pass-throughs,
         pay-throughs, collateralized mortgage obligations, and securities
         issued by companies (including partnerships and real estate investment
         trusts) that invest in real estate or interests therein.

               8.   The Fund may acquire securities of other investment
         companies to the extent (at the acquisition) of (i) not more than 3% of
         the outstanding voting stock of any one investment company, (ii) not
         more than 5% of the assets of the Fund in any one investment company
         and (iii) not more than 10% of the assets of the Fund in all investment
         companies (exclusive in each case of securities received as a dividend
         or as a result of a merger, consolidation or other plan of
         reorganization).

               9.   The Fund may not invest for the purpose of exercising
         control over or management of any company.

              10.   The Fund may not purchase securities on margin, or make
         short sales of securities, except the use of short-term credit
         necessary for the clearance of purchases and sales of portfolio
         securities, but it may make margin deposits in connection with
         transactions in options, futures and options on futures.


                                      3
<PAGE>

              11.   The Fund may not purchase or sell commodities or commodity
         contracts, except that it may enter into (i) stock index futures
         transactions, interest rate futures transactions and options on such
         future transactions and (ii) forward contracts on foreign currencies to
         the extent permitted by applicable law.

              12.   The Fund may not issue any security senior to its common
         stock, except that the Fund may borrow money subject to investment
         restriction 3 and except as permitted by the Fund's charter.

         If a percentage restriction set forth above is adhered to at the time a
transaction is effected, later changes in percentages resulting from changes in
value or in the number of outstanding securities of an issuer will not be
considered a violation.

         Other Significant Investment Policies

         Fixed Income Securities. The Fund purchases a fixed income security
only if, at the time of purchase, it is (i) rated investment grade by at least
two of the following three nationally recognized statistical rating
organizations: Moody's Investors Service, Inc. ("Moody's"), Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P"), and
Fitch IBCA, Inc. ("Fitch") or (ii) determined by the Fund's investment adviser
to be of investment grade and not rated below investment grade by any of the
aforementioned rating services. A fixed income security rated investment grade
has a rating of BBB- or better by Fitch, Baa3 or better by Moody's, or BBB- or
better by S&P. In making its determination that a fixed income security is
investment grade, the Fund's investment adviser will use the standards used by a
nationally recognized statistical rating organization.

         Leverage. The Fund is authorized to borrow money in amounts of up to
15% of the value of its total assets at the time of such borrowings. However,
for so long as the Fund's preferred stock is rated by S&P, the Fund will limit
the aggregate amount of its borrowings to 10% of the value of its total assets
and will not incur any borrowings, unless advised by S&P that such borrowings
would not adversely affect S&P's then-current rating of the preferred stock.

         Lending of Portfolio Securities. In order to generate additional
income, the Fund may from time to time lend securities from its portfolio, with
a value not in excess of 33 1/3% of its total assets, to brokers, dealers and
financial institutions such as banks and trust companies for which it will
receive collateral in cash, United States Government securities or an
irrevocable letter of credit that will be maintained in an amount equal to at
least 100% of the current market value of the loaned securities.

         Rating Agency Guidelines. The Fund's preferred stock is currently rated
by Moody's, S&P and Fitch, nationally recognized statistical rating
organizations, which issue ratings for various securities reflecting the
perceived creditworthiness of those securities. The Fund intends that, so long
as shares of its preferred stock are outstanding, the composition of its
portfolio will reflect guidelines established by the foregoing rating
organizations in connection with the Fund's receipt of the highest rating for
its preferred stock from at least two of such rating organizations.

         Options and Futures Transactions. The Fund may seek to increase its
current return by writing covered options. In addition, through the writing and
purchase of options and the purchase and sale of futures contracts and related
options, the Fund may at times seek to hedge against a decline in the value of
securities owned by it or an increase in the price of securities which it plans
to purchase. However, for so long as shares of the Fund's preferred stock are
rated either by Moody's or S&P, the Fund will not purchase or sell futures
contracts or related options or engage in other hedging transactions unless
Moody's or S&P, as the case may be, advises the Fund that such action or actions
will not adversely affect its then-current rating of the Fund's preferred stock.

         Temporary Investments. For temporary defensive purposes, the Fund may
be invested primarily in money market securities. These securities include
securities issued or guaranteed by the United States Government and its agencies
and instrumentalities, commercial paper and certificates of deposit. To the
extent that the Fund engages in such defensive investments, it may not achieve
its investment objectives.


                                      4
<PAGE>

         Nonfundamental Restrictions. The Fund may not (i) invest in securities
subject to legal or contractual restrictions on resale, if, as a result of such
investment, more than 10% of the Fund's total assets would be invested in such
securities, or (ii) acquire 5% or more of the outstanding voting securities of a
public utility company.

         Each of the policies and restrictions described above may be changed by
the board of directors without the approval of the Fund's shareholders. If a
percentage restriction set forth above is adhered to at the time a transaction
is effected, later changes in percentages resulting from changes in value or in
the number of outstanding securities of an issuer will not be considered a
violation.

         3.       Risk Factors

         Leverage. As of December 31, 2001, the Fund had outstanding
         indebtedness of $197,397,331 and five series of preferred stock with an
         aggregate liquidation preference of $500 million. The dividend rate on
         each series of preferred stock is reset every 49 days through a
         remarketing procedure. As of April 6, 2002, the dividend rate on the
         five series of preferred stock averaged 1.56% and the interest rate on
         the Fund's outstanding indebtedness averaged 2.06%. The Fund must
         experience an annual return of 0.46% on its portfolio in order to cover
         annual interest and dividend payments on the Fund's outstanding
         indebtedness and preferred stock.

         Leverage creates certain risks for holders of common stock, including
         higher volatility of both the net asset value and market value of the
         common stock. Fluctuations in dividend rates on the preferred stock and
         interest rates on the Fund's indebtedness will affect the dividend to
         holders of common stock. Holders of the common stock receive all net
         income from the Fund remaining after payment of dividends on the
         preferred stock and interest on the Fund's indebtedness, and generally
         are entitled to a pro rata share of net realized capital gains, if any.

         Upon any liquidation of the Fund, the holders of shares of preferred
         stock will be entitled to liquidating distributions (equal to $100,000
         per share of preferred stock plus any accumulated and unpaid dividends
         thereon) and the holders of the Fund's indebtedness will be entitled to
         receive repayment of outstanding principal plus accumulated and unpaid
         interest thereon before any distribution is made to holders of common
         stock.

         The leverage obtained through the issuance of the preferred stock and
         from the Fund's presently outstanding indebtedness has provided holders
         of common stock with a higher dividend than such holders would have
         otherwise received. However, there can be no assurance that the Fund
         will be able to continue to realize such a higher net return on its
         investment portfolio. Changes in certain factors could cause the
         relationship between the dividends paid on the preferred stock and
         interest paid on the Fund's indebtedness to increase relative to the
         dividend and interest rates on the portfolio securities in which the
         Fund may be invested. Under such conditions the benefit of leverage to
         holders of common stock will be reduced and the Fund's leveraged
         capital structure could result in a lower rate of return to holders of
         common stock than if the Fund were not leveraged. The Fund is required
         by the 1940 Act to maintain an asset coverage of 200% on outstanding
         preferred stock and 300% on outstanding indebtedness. If the asset
         coverage declines below those levels (as a result of market
         fluctuations or otherwise), the Fund may be required to sell a portion
         of its investments at a time when it may be disadvantageous to do so.

         The following table illustrates the effects of leverage on a return to
         common stockholders. The figures appearing in the table are
         hypothetical and actual returns may be greater or less than those
         appearing in the table.

- --------------------------------------------------------------------------------
Assumed annual return on     -10.00%     -5.00%     0.00%     5.00%      10.00%
portfolio (net of expenses)
- --------------------------------------------------------------------------------
Corresponding annual return  -14.81%     -8.05%     -1.29%    5.46%      12.22%
to common stockholder
- --------------------------------------------------------------------------------


         Investments in Securities of Foreign Issuers. While the Fund is
         prohibited from investing 15% or more of its assets in securities of
         foreign issuers, the Fund may be exposed to certain risks as a result
         of foreign investments. Investing in securities of foreign issuers



                                      5
<PAGE>

         involves certain considerations not typically associated with investing
         in securities of U.S. companies, including (a) controls on foreign
         investment and limitations on repatriation of invested capital and on
         the Fund's ability to exchange local currencies for U.S. dollars, (b)
         greater price volatility, substantially less liquidity and
         significantly smaller market capitalization of securities markets, (c)
         currency devaluations and other currency exchange rate fluctuations,
         (d) more substantial government involvement in the economy, (e) higher
         rates of inflation, (f) less government supervision and regulation of
         the securities markets and participants in those markets and (g)
         political uncertainty and other considerations. The Fund will treat
         investments in countries with repatriation restrictions as illiquid for
         purposes of any applicable limitations under the 1940 Act; however, as
         a closed-end fund, the Fund is not currently limited under that Act in
         the amount of illiquid securities it may acquire. Because of the
         limited forward market for the purchase of U.S. dollars in most foreign
         countries and the limited circumstances in which the Fund expects to
         hedge against declines in the value of foreign country currencies
         generally, the Fund will be adversely affected by devaluations of
         foreign country currencies against the U.S. dollar to the extent the
         Fund is invested in securities denominated in currencies experiencing a
         devaluation. The Fund's fundamental investment policies permit the Fund
         to enter into currency hedging transactions.

         In addition, accounting, auditing and financial reporting standards in
         foreign countries are different from U.S. standards. As a result,
         certain material disclosures may not be made and less information may
         be available to the Fund and other investors than would be the case if
         the Fund's investments were restricted to securities of U.S. issuers.
         Moreover, it may be more difficult to obtain a judgment in a court
         outside the United States. Interest and dividends paid on securities
         held by the Fund and gains from the disposition of such securities may
         be subject to withholding taxes imposed by foreign countries.

         Anti-takeover Provisions. Certain provisions of the Fund's charter
         may be regarded as "anti-takeover" provisions because they could
         have the effect of limiting the ability of other entities or persons
         to acquire control of the Fund. See Item 10.l(e).

         Premium/Discount From Net Asset Value. Shares of closed-end investment
         companies trade in the market above, at and below net asset value. This
         characteristic of shares of closed-end investment companies is a risk
         separate and distinct from the risk that the Fund's net asset value may
         decline. Since inception, the Fund's common stock has generally traded
         at a premium to net asset value. For example, in the two-year period
         ended December 31, 2001, as of the close of business of the New York
         Stock Exchange on the last day in each week on which the New York Stock
         Exchange was open (the date the Fund calculates its net asset value per
         share), the Fund's shares were trading at a premium to net asset value
         87% of the time. The Fund usually does not calculate its net asset
         value per share on any other day and does not know whether the Fund's
         shares were trading at a premium to net asset value on such days. The
         Fund is not able to predict whether its shares will trade above, at or
         below net asset value in the future.

         Dividend Captures. The Fund acts to increase its dividend income using
         a strategy called "dividend capture." Under this strategy, the Fund
         purchases shares of stock of a particular issuer immediately prior to
         the market close on the stock's ex-dividend date and then writes a
         covered call option on the same number of shares of that issuer. The
         call option expires at 10:00 a.m. on the immediately following trading
         day. Because the Fund is the holder of the stock at the market close on
         the ex-dividend date, it is entitled to receive the dividend on the
         stock. If, as expected, the holder of the call option elects to
         exercise the option, the Fund will no longer hold the stock after 10:00
         a.m. on the trading day immediately following the ex-dividend date.
         However, because of the possibility that the call option will not be
         exercised, the Fund utilizes this dividend capture strategy only in
         connection with equity securities that the Adviser has determined to be
         suitable for inclusion in the Fund's portfolio for a more extended
         period. During 2001, dividend captures accounted for approximately 35%
         of the Fund's investment income. The use of dividend captures entails
         certain costs and risks. Because the market price of the stock
         generally declines by the amount of the dividend immediately after the
         ex-dividend date, the Fund experiences a capital loss on the stock
         approximating the amount of the captured dividend. In addition, the



                                      6
<PAGE>

         Fund incurs transaction costs in connection with the purchase of the
         stock and the sale of the option. In 2001 such transaction costs
         equaled approximately 0.1% of the value of the stock. It is also
         possible that the issuer of the stock could experience a material
         adverse event during the period between the time of purchase of the
         stock and the time of expiration of the option that would cause a
         decline in the market value of the stock significantly in excess of the
         expected decline that reflects the amount of the dividend. If this
         occurred, the option holder would likely decline to exercise the
         option, and the Fund would continue to hold the stock.

         4.       Other Policies

         None.

         5.       Share Price Data

         The Fund's common stock has been listed on the New York Stock Exchange
since January 21, 1987 (trading symbol DNP). Since the commencement of trading,
the Fund's common stock has most frequently traded at a premium to net asset
value, but has periodically traded at a slight discount. The following table
shows the range of the market prices of the Fund's common stock, net asset value
of the Fund's shares corresponding to such high and low prices and the premium
to net asset value presented by such high and low prices:

<TABLE>
<CAPTION>


                                                                                   Market Premium (Discount)
                                 Market Price            Net Asset Value at          to Net Asset Value at
Quarter Ended
                                                        Market        Market        Market         Market
                               High         Low          High          Low           High            Low
<S>          <C>            <C>           <C>              <C>          <C>           <C>              <C>



2002         March 31        $ 11.3700     $10.9000        $ 9.32        $ 9.13        22.00%           19.39%

2001         December 31       11.2500      10.7000          9.56          9.26        17.68%           15.55%

             September 30      11.2000      10.2000          9.77          9.13        14.64%           11.72%

             June 30           11.2000      10.4300         10.23          9.96         9.48%            4.72%

             March 31          10.9800       9.5625          9.88          9.80        11.13%          (2.42%)

2000         December 31       10.8125       9.5000         10.28          9.90         5.18%          (4.04%)

             September 30      10.0625       9.5000          9.87          8.95         1.95%            6.15%

             June 30            9.6875       8.6875          9.16          8.96         5.76%          (3.04%)

             March 31           9.3125       8.3125          8.85          8.77         5.23%          (5.22%)
</TABLE>


On April 5, 2002, the net asset value was $9.30, trading prices ranged between
$11.29 and $11.34 (representing a premium to net asset value of 21.40% and
21.94%, respectively) and the closing price was $11.32 (representing a premium
to net asset value of 21.70%).

         6.       Business Development Companies

         Not applicable.

Item 9.  Management

         1.       General

                  (a)     Board of Directors

                         The business and affairs of the Fund are managed
                   under the direction of the board of directors.

                  (b)    Investment Adviser

                                    7
<PAGE>


                         The Fund's investment adviser (the "Adviser") is Duff
                  & Phelps Investment Management Co., 55 East Monroe Street,
                  Chicago, Illinois 60603. The Adviser (together with its
                  predecessor) has been in the investment advisory business for
                  more than 60 years and, excluding the Fund, currently has more
                  than $4.3 billion in client accounts under discretionary
                  management. The Adviser acts as adviser to two other
                  closed-end investment companies registered under the 1940 Act
                  and as sub-adviser to six open-end investment companies
                  registered under the 1940 Act. The Adviser is a wholly-owned
                  subsidiary of Phoenix Investment Partners, Ltd. ("Phoenix
                  Investment Partners"), which is an indirect, wholly-owned
                  subsidiary of The Phoenix Companies, Inc. Prior to May 11,
                  1998, Phoenix Investment Partners was known as Phoenix Duff &
                  Phelps Corporation. Phoenix Investment Partners, through its
                  subsidiaries, provides investment management, investment
                  research, financial consulting and investment banking
                  services.

                         The Adviser is responsible for the management of the
                  Fund's investment portfolio, subject to the overall control of
                  the board of directors of the Fund.

                         Under the terms of an investment advisory agreement
                  between the Fund and the Adviser (the "Advisory Agreement"),
                  the Adviser receives from the Fund a quarterly fee at an
                  annual rate of .60% of the average weekly net asset value of
                  the Fund up to $1.5 billion and .50% of average weekly net
                  assets in excess of $1.5 billion. The net assets for each
                  weekly period are determined by averaging the net assets at
                  the end of a week with the net assets at the end of the prior
                  week. For purposes of the foregoing calculation, "net assets"
                  are defined as the sum of (i) the aggregate net asset value of
                  the Fund's common stock, (ii) the aggregate liquidation
                  preference of the Fund's preferred stock and (iii) the
                  aggregate proceeds to the Fund of commercial paper issued by
                  the Fund.

                         Under the terms of a service agreement among the
                  Adviser, Phoenix Investment Partners, and the Fund (the
                  "Service Agreement"), Phoenix Investment Partners makes
                  available to the Adviser the services, on a part-time basis,
                  of its employees and various facilities to enable the Adviser
                  to perform certain of its obligations to the Fund. However,
                  the obligation of performance under the Advisory Agreement is
                  solely that of the Adviser, for which Phoenix Investment
                  Partners assumes no responsibility, except as described in the
                  preceding sentence. The Adviser reimburses Phoenix Investment
                  Partners for any costs, direct or indirect, fairly
                  attributable to the services performed and the facilities
                  provided by Phoenix Investment Partners under the Service
                  Agreement. The Fund does not pay any fees pursuant to the
                  Service Agreement.

                  (c)    Portfolio Management

                         The Fund's portfolio is managed by Nathan I. Partain
                  and T. Brooks Beittel. Mr. Partain has been responsible for
                  the management of the equity investments in the Fund's
                  portfolio since January 1998. He has been President and Chief
                  Executive Officer of the Fund since February 2001 (Executive
                  Vice President April 1998-February 2001, Chief Investment
                  Officer January 1998-February 2001, Senior Vice President
                  January 1997-April 1998, Assistant Secretary January
                  1997-February 2001); Executive Vice President, Duff & Phelps
                  Investment Management Co. since January 1997; and Director of
                  Utility Research, Phoenix Investment Partners, Ltd., 1989-1996
                  (Director of Equity Research, 1993-1996 and Director of Fixed
                  Income Research, 1993). Mr. Beittel has been responsible for
                  the management of the fixed income investments in the Fund's
                  portfolio since April 1994. He has been Secretary, Treasurer
                  and Senior Vice President of the Fund since January 1995; and
                  Senior Vice President, Duff & Phelps Investment Management Co.
                  since 1993 (Vice President 1987-1993).

                  (d)    Administrator

                         The Fund's administrator (the "Administrator") is
                  J.J.B. Hilliard, W.L. Lyons, Inc., Hilliard Lyons Center,
                  Louisville, Kentucky 40202. The Administrator is a
                  wholly-owned subsidiary of The PNC Financial Services Group,
                  Inc. Under the terms of an administration agreement (the
                  "Administration Agreement"), the Administrator provides all
                  management and administrative services required in connection

                                      8
<PAGE>

                  with the operation of the Fund not required to be provided by
                  the Adviser pursuant to the Advisory Agreement, as well as the
                  necessary office facilities, equipment and personnel to
                  perform such services. For its services, the Administrator
                  receives from the Fund a quarterly fee at annual rates of .25%
                  of the Fund's average weekly net assets up to $100 million,
                  .20% of the Fund's average weekly net assets from $100 million
                  to $1.0 billion and .10% of average weekly net assets over
                  $1.0 billion. The net assets for each weekly period are
                  determined by averaging the net assets at the end of a week
                  with the net assets at the end of the prior week. For purposes
                  of the foregoing calculation, "net assets" are defined as the
                  sum of (i) the aggregate net asset value of the Fund's common
                  stock, (ii) the aggregate liquidation preference of the Fund's
                  preferred stock and (iii) the aggregate proceeds to the Fund
                  of commercial paper issued by the Fund.

                  (e)      Custodian

                           The Fund's custodian is The Bank of New York, Church
                  Street Station, Post Office Box 11258, New York, New York
                  10286. The transfer agent and dividend disbursing agent for
                  the Fund's common and preferred stock is The Bank of New York,
                  Church Street Station, P.O. Box 11258, New York, New York
                  10286.

                  (f)      Expenses

                           The Fund is responsible for all expenses not paid by
                  the Adviser or the Administrator, including brokerage fees.

                  (g)      Affiliated Brokerage

                           The Fund has paid, and in the future may pay, broker
                  commissions to the Administrator.  See Item 21.2.

         2.       Non-resident Managers.

                  Not applicable.

         3.       Control Persons.


                          The Fund does not consider that any person "controls"
                  the Fund within the meaning of this item. For information
                  concerning the Fund's officers and directors, see Item 18. No
                  person is known by the Fund to own of record or beneficially
                  five percent or more of any class of the Fund's outstanding
                  equity securities.

Item 10.  Capital Stock, Long-Term Debt, and Other Securities

         1.       Capital Stock.

                  (a)   Common Stock. Holders of common stock, $.001 par value
                  per share, of the Fund are entitled to dividends when and as
                  declared by the board of directors, to one vote per share in
                  the election of directors (with no right of cumulation), and
                  to equal rights per share in the event of liquidation. They
                  have no preemptive rights. There are no redemption, conversion
                  or sinking fund provisions. The shares are not liable to
                  further calls or to assessment by the Fund.

                  (b)  Preferred Stock. Holders of preferred stock, $.001 par
                  value per share, of the Fund are entitled to receive dividends
                  before the holders of the common stock and are entitled to
                  receive the liquidation value of their shares ($100,000 per
                  share) before any distributions are made to the holders of the
                  common stock, in the event the Fund is ever liquidated. Each


                                      9
<PAGE>

                  share of preferred stock is entitled to one vote per share.
                  The holders of the preferred stock have the right to elect two
                  directors of the Fund at all times and to elect a majority of
                  the directors if at any time dividends on the preferred stock
                  are unpaid for two years. In addition to any approval by the
                  holders of the shares of the Fund that might otherwise be
                  required, the approval of the holders of a majority of the
                  outstanding shares of the preferred stock, voting separately
                  as a class, will be required under the 1940 Act to adopt any
                  plan of reorganization that would adversely affect the holders
                  of preferred stock and to approve, among other things, changes
                  in the Fund's sub-classification as a closed-end investment
                  company, changes in its investment objectives or changes in
                  its fundamental investment restrictions.

                  Subject to certain restrictions, the Fund may, and under
                  certain circumstances is required to, redeem shares of its
                  preferred stock at a price of $100,000 per share, plus
                  accumulated but unpaid dividends. The shares of preferred
                  stock are not liable to further calls or to assessment by the
                  Fund. There are no preemptive rights or sinking fund or
                  conversion provisions. The Fund, may, however, upon the
                  occurrence of certain events, authorize the exchange of its
                  current preferred stock on a share-for-share basis for a
                  separate series of authorized but unissued preferred stock
                  having different dividend privileges.

                  (c)   Dividend Reinvestment Plan. Under the Fund's dividend
                  reinvestment plan shareholders may elect to have all dividends
                  and capital gains distributions paid on their common stock
                  automatically reinvested by The Bank of New York, as agent for
                  shareholders, in additional shares of common stock of the
                  Fund. Registered shareholders may participate in the plan. The
                  plan permits a nominee, other than a depository, to
                  participate on behalf of those beneficial owners for whom it
                  is holding shares who elect to participate. However, some
                  nominees may not permit a beneficial owner to participate
                  without transferring the shares into the owner's name.
                  Shareholders who do not elect to participate in the plan will
                  receive all distributions in cash paid by check mailed
                  directly to the shareholder (or, if the shareholder's shares
                  are held in street or other nominee name, then to such
                  shareholder's nominee) by The Bank of New York as dividend
                  disbursing agent. Registered shareholders may also elect to
                  have cash dividends deposited directly into their bank
                  accounts.

                  When a dividend or distribution is reinvested under the plan,
                  the number of shares of common stock equivalent to the cash
                  dividend or distribution is determined as follows:

                                    (i) If shares of the common stock are
                           trading at net asset value or at a premium above net
                           asset value at the valuation date, the Fund issues
                           new shares of common stock at the greater of net
                           asset value or 95% of the then current market price.

                                    (ii) If shares of the common stock are
                           trading at a discount from net asset value at the
                           valuation date, The Bank of New York receives the
                           dividend or distribution in cash and uses it to
                           purchase shares of common stock in the open market,
                           on the New York Stock Exchange or elsewhere, for the
                           participants' accounts. Shares are allocated to
                           participants' accounts at the average price per
                           share, plus commissions, paid by The Bank of New York
                           for all shares purchased by it. If, before The Bank
                           of New York has completed its purchases, the market
                           price exceeds the net asset value of a share, the
                           average purchase price per share paid by The Bank of
                           New York may exceed the net asset value of the Fund's
                           shares, resulting in the acquisition of fewer shares
                           than if the dividend or distribution had been paid in
                           shares issued by the Fund.

                  The valuation date is the business day immediately preceding
                  the date of payment of the dividend or distribution. On that
                  date, the Administrator compares that day's net asset value
                  per share and the closing price per share on the New York
                  Stock Exchange and determines which of the two alternative
                  procedures described above will be followed.

                                      10
<PAGE>


                  The reinvestment shares are credited to the participant's plan
                  account in the Fund's stock records maintained by The Bank of
                  New York, including a fractional share to four decimal places.
                  The Bank of New York will send participants written
                  confirmation of all transactions in the participant's plan
                  account, including information participants will need for tax
                  records. Shares held in the participant's plan account have
                  full dividend and voting rights. Dividends and distributions
                  paid on shares held in the participant's plan account will
                  also be reinvested.

                  The cost of administering the plan is borne by the Fund. There
                  is no brokerage commission on shares issued directly by the
                  Fund. However, participants do pay a pro rata share of
                  brokerage commissions incurred on any open market purchases of
                  shares by The Bank of New York.

                  The automatic reinvestment of dividends and distributions does
                  not relieve participants of any income taxes that may be
                  payable (or required to be withheld) on dividends or
                  distributions.

                  If the closing market price of shares of the Fund's common
                  stock should be equal to or greater than their net asset value
                  on the valuation date, the participants in the plan would
                  receive shares priced at the higher of net asset value or 95%
                  of the market price. Consequently they would receive more
                  shares at a lower per share price than if they had used the
                  cash distribution to purchase Fund shares on the payment date
                  in the market at the market price plus commission.

                  If the market price should be less than net asset value on the
                  valuation date, the cash distribution for the plan
                  participants would be used by The Bank of New York to purchase
                  the shares to be received by the participants, which would be
                  at a discount from net asset value unless the market price
                  should rise during the purchase period so that the average
                  price and commission exceeded net asset value as of the
                  payment date. Also, since the Fund does not redeem its shares,
                  the price on resale may be less or more than the net asset
                  value.

                  Plan participants may purchase additional shares of common
                  stock through the plan by delivering to The Bank of New York a
                  check for at least $100, but not more than $5,000, in any
                  month. The Bank of New York will use such funds to purchase
                  shares in the open market or in private transactions. The
                  purchase price of such shares may be more than or less than
                  net asset value per share. The Fund will not issue new shares
                  or supply treasury shares for such voluntary additional share
                  investment. Purchases will be made commencing with the time of
                  the first distribution payment following the second business
                  day after receipt of the funds for additional purchases, and
                  may be aggregated with purchases of shares for reinvestment of
                  the distribution. Shares will be allocated to the accounts of
                  participants purchasing additional shares at the average price
                  per share, plus a service charge of $2.50 imposed by The Bank
                  of New York and a pro rata share of any brokerage commission
                  (or equivalent purchase costs) paid by The Bank of New York in
                  connection with such purchases. Funds sent to the bank for
                  voluntary additional share reinvestment may be recalled by the
                  participant by written notice received by The Bank of New York
                  not later than two business days before the next dividend
                  payment date. If for any reason a regular monthly dividend is
                  not paid by the Fund, funds for voluntary additional share
                  investment will be returned to the participant, unless the
                  participant specifically directs that such funds continue to
                  be held by The Bank of New York for subsequent investment.
                  Participants will not receive interest on voluntary additional
                  funds held by The Bank of New York pending investment.

                                      11
<PAGE>


                  A shareholder may leave the plan at any time by written notice
                  to The Bank of New York. To be effective for any given
                  distribution, notice must be received by the Bank at least
                  seven business days before the record date for that
                  distribution. When a shareholder leaves the plan: (i) such
                  shareholder may request that The Bank of New York sell such
                  shareholder's shares held in such shareholder's plan account
                  and send such shareholder a check for the net proceeds
                  (including payment of the value of a fractional share, valued
                  at the closing price of the Fund's common stock on the New
                  York Stock Exchange on the date discontinuance is effective)
                  after deducting The Bank of New York's $5.00 charge and any
                  brokerage commission (or equivalent sale cost) or (ii) if no
                  request is made, such shareholder will receive a certificate
                  for the number of full shares held in such shareholder's plan
                  account, along with a check for any fractional share interest,
                  valued at the closing price of the Fund's common stock on the
                  New York Stock Exchange on the date discontinuance is
                  effective. If and when it is determined that the only balance
                  remaining in a shareholder's plan account is a fraction of a
                  single share, such shareholder's participation will be deemed
                  to have terminated, and The Bank of New York will send to such
                  shareholder a check for the value of such fractional share,
                  valued at the closing price of the Fund's common stock on the
                  New York Stock Exchange on the date discontinuance is
                  effective.

                  The Fund may change, suspend or terminate the plan at any
                  time upon mailing a notice to participants.

                  For more information regarding, and an authorization form for,
                  the dividend reinvestment plan, please contact The Bank of New
                  York at 1-877-381-2537 or on the World Wide Web at
                  http://stock.bankofny.com.

                  (d)  Capital Gains Distribution Reinvestment Plan. Unless
                  otherwise indicated by a holder of shares of common stock of
                  the Fund that does not participate in the Fund's dividend
                  reinvestment plan, all distributions in respect of capital
                  gains distributions on shares of common stock held by such
                  holder will be automatically invested by The Bank of New York,
                  as agent of the common shareholders participating in the plan,
                  in additional shares of common stock of the Fund.
                  Distributions in respect of capital gains distributions on
                  shares of common stock that participate in the Fund's dividend
                  reinvestment plan will be reinvested in accordance with the
                  terms of such plan.

                  In any year in which the Fund declares a capital gains
                  distribution, the Fund after the declaration of such dividend
                  and prior to its payment, will provide to each registered
                  holder of Fund common stock that does not participate in the
                  Fund's dividend reinvestment plan a cash election card. A
                  registered shareholder may elect to receive cash in lieu of
                  shares in respect of a capital gains distribution by signing
                  the cash election card in the name(s) of the registered
                  shareholder(s), and mailing the card to The Bank of New York.

                  If a holder's shares of common stock, or some of them, are
                  registered in the name of a broker or other nominee, and the
                  holder wishes to receive a capital gains distribution in cash
                  in lieu of shares of common stock, such shareholder must
                  exercise that election through its nominee (including any
                  depositor of shares held in a securities depository).


                                      12
<PAGE>


                  When a distribution is reinvested under the plan, the number
                  of reinvestment shares is determined as follows:

                                    (i) If, at the time of valuation, the shares
                           are being traded in the securities markets at net
                           asset value or at a premium over net asset value, the
                           reinvestment shares are obtained by The Bank of New
                           York directly from the Fund, at a price equal to the
                           greater of net asset value or 95% of the then current
                           market price, without any brokerage commissions (or
                           equivalent purchase costs).

                                    (ii) If, at the time of valuation, the
                           shares are being traded in the securities markets at
                           a discount from net asset value, The Bank of New York
                           receives the distribution in cash, and uses it to
                           purchase shares in the open market, including on the
                           New York Stock Exchange, or in private purchases.
                           Shares of common stock are allocated to participants
                           at the average price per share, plus any brokerage
                           commissions (or equivalent transaction costs), paid
                           by The Bank of New York for all shares purchased by
                           it in reinvestment of the distribution(s) paid on a
                           particular day.

                  The time of valuation is the close of trading on the New York
                  Stock Exchange on the most recent day preceding the date of
                  payment of the dividend or distribution on which that exchange
                  is open for trading. As of that time, the Administrator
                  compares the net asset value per share as of the time of the
                  close of trading on the New York Stock Exchange on that day
                  and the last reported sale price per share on the New York
                  Stock Exchange, and determines which of the alternative
                  procedures described above are to be followed.

                  If as of any day on which the last reported sale price of the
                  Fund's shares on the New York Stock Exchange is required to be
                  determined pursuant to this plan, no sales of the shares are
                  reported on that exchange, the mean of the bid prices and of
                  the asked prices on that exchange as of the time of the close
                  of trading on the exchange will be substituted.

                  No certificates will be issued representing fractional shares,
                  nor will The Bank of New York purchase fractional shares in
                  the market. The Bank of New York will send to all registered
                  holders of common stock that do not participate in the Fund's
                  dividend reinvestment plan certificates for all shares of
                  common stock purchased or issued pursuant to the capital gains
                  distribution plan and cash in lieu of fractional shares of
                  common stock.

                  The Fund may change, suspend or terminate the plan at any time
                  upon mailing a notice to participants.

                  (e)  Anti-takeover provisions of charter and bylaws. The
                  Fund's charter includes provisions that could have the effect
                  of limiting the ability of other entities or persons to
                  acquire control of the Fund or to change the composition of
                  its board of directors and could have the effect of depriving
                  shareholders of an opportunity to sell their shares at a
                  premium over prevailing market prices by discouraging a third
                  party from seeking to obtain control of the Fund. The board of
                  directors is divided into three classes, each having a term of
                  three years. At each annual meeting of shareholders, the term
                  of one class will expire. This provision could delay for up to
                  two years the replacement of a majority of the board of
                  directors. A director may be removed from office only by vote
                  of the holders of at least 75% of the shares of preferred
                  stock or of common stock, as the case may be, entitled to be
                  voted on the matter.

                  The Fund's charter requires the favorable vote of the holders
                  of at least 75% of the shares of preferred stock and common
                  stock of the Fund entitled to be voted on the matter, voting
                  together as a single class, to approve, adopt or authorize the
                  following:

                                    (i)  a merger or consolidation of the Fund
                           with another corporation,


                                    13
<PAGE>

                                    (ii)  a sale of all or substantially all of
                           the Fund's assets (other than in the regular course
                           of the Fund's investment activities), or

                                    (iii) a liquidation or dissolution of the
                           Fund, unless such action has been approved, adopted
                           or authorized by the affirmative vote of two-thirds
                           of the total number of directors fixed in accordance
                           with the bylaws, in which case the affirmative vote
                           of the holders of a majority of the outstanding
                           shares of preferred stock and common stock entitled
                           to be voted on the matter, voting together as a
                           single class, is required.

                  In addition, the holders of a majority of the outstanding
                  shares of the preferred stock, voting separately as a class,
                  would be required under the 1940 Act to adopt any plan of
                  reorganization that would adversely affect the holders of the
                  preferred stock.

                  Finally, conversion of the Fund to an open-end investment
                  company would require an amendment to the charter. Such an
                  amendment would require the favorable vote of the holders of a
                  majority of the shares of preferred stock and common stock
                  entitled to be voted on the matter voting separately by class.
                  At any time, the amendment would have to be declared advisable
                  by the board of directors prior to its submission to
                  shareholders. Shareholders of an open-end investment company
                  may require the company to redeem their shares of common stock
                  at any time (except in certain circumstances as authorized by
                  or under the 1940 Act) at their net asset value, less such
                  redemption charge, if any, as might be in effect at the time
                  of a redemption. In addition, conversion to an open-end
                  investment company would require redemption of all outstanding
                  shares of the preferred stock.

                  The board of directors has determined that the 75% voting
                  requirements described above, which are greater than the
                  minimum requirements under Maryland law or the 1940 Act, are
                  in the best interests of shareholders generally. Reference
                  should be made to the charter on file with the Securities and
                  Exchange Commission (the "SEC") for the full text of these
                  provisions.

         2.       Long-Term Debt.

                  Not applicable.

         3.       General

                  Not applicable.

         4.       Taxes.  The Fund intends to continue to qualify as a
                  regulated investment company under the Internal Revenue Code
                  of 1986, as it has in each year since the inception of its
                  operations, so as to be relieved of Federal income tax on
                  net investment income and net capital gains distributed to
                  shareholders.

                  Dividends paid by the Fund from its ordinary income and
                  distributions of the Fund's net realized short-term capital
                  gains are taxable to shareholders as ordinary income.
                  Shareholders may be proportionately liable for taxes on income
                  and gains of the Fund but shareholders not subject to tax on
                  their income will not be required to pay tax on amounts
                  distributed to them. The Fund will inform shareholders of the
                  amount and nature of the income or gains. Dividends from
                  ordinary income may be eligible for the dividends-received
                  deduction available to corporate shareholders. Under its

                                     14
<PAGE>


                  charter, the Fund is required to designate dividends paid on
                  its preferred stock as qualifying for the dividends-received
                  deduction to the extent such dividends do not exceed the
                  Fund's qualifying income. In the event the Fund is required to
                  allocate all of its qualifying income to dividends on the
                  preferred stock, dividends payable on the common stock will
                  not be eligible for the dividends-received deduction. Any
                  distributions attributable to the Fund's net realized
                  long-term capital gains are taxable to shareholders as
                  long-term capital gains, regardless of the holding period of
                  shares of the Fund.

                  The Fund intends to distribute substantially all its net
                  investment income and net realized capital gains in the year
                  earned or realized. A dividend reinvestment plan is available
                  to all holders of common stock of the Fund. Under the dividend
                  reinvestment plan, all cash distributions to participating
                  shareholders are reinvested in additional shares of common
                  stock. See Item 10.1(c).

         5.       Outstanding Securities

                                                                  (4)
                                            (3)            Amount Outstanding
                                        Amount Held by    at 3/31/2002 Exclusive
    (1)                (2)              the Fund or for     of Amount Shown
Title of Class    Amount Authorized     its Account             Under (3)
- --------------    ------------------    ----------------   ---------------------

Common, $.001
par value            250,000,000              -0-               214,184,640

Preferred, $.001
par value            100,000,000              -0-                  5,000



         6.       Securities Ratings.
                  ------------------

                  Not applicable.


Item 11.  Defaults and Arrears on Senior Securities

          Not applicable.

Item 12.  Legal Proceedings

          There are no pending legal proceedings to which the Fund, any
subsidiary of the Fund, or the Adviser is a party.

Item 13.  Table of Contents of the Statement of Additional Information

          Not applicable.


          PART B INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

Item 14.  Cover Page

          Not applicable.

Item 15.  Table of Contents

          Not applicable.

Item 16.  General Information and History

         During the past five years, the Fund has not engaged in any business
other than that of an investment company and has not been the subject of any
bankruptcy, receivership or similar proceedings, or any other material
reorganization, readjustment or succession. The Fund's name was changed from
Duff & Phelps Utilities Income Inc. on April 23, 2002.



                                      15
<PAGE>

Item 17.  Investment Objective and Policies

         1.  See Item 8.2.

         2.  See Item 8.2.

         3.  See Item 8.2.

         4.  The Fund's portfolio turnover rate was 213.48% in 2001, 229.70% in
2000 and 223.78% in 1999. During the last two fiscal years, the Fund's portfolio
turnover rate has been influenced by a number of factors: (i) the Fund's
proactive response to changes in the telecommunications, gas and electric
industries, which response includes the use of dividend captures (see Item 8.3
for an explanation of dividend captures); and (ii) changes in the Fund's
international portfolio designed to benefit from capital gain opportunities that
were able to be offset by available loss carryovers.

Item 18.  Management

         1. Set forth below are the names and certain biographical information
about the directors and officers of the Fund. Except as indicated in the table,
directors are elected by the holders of the Fund's common stock. The officers
are elected at the annual meeting of the board of directors of the Fund.

<TABLE>
<CAPTION>



    Name,                         Position(s) Held With the Fund,                     Principal Occupation(s)
   Address                            Length of Time Served                             During Past 5 Years
   and Age                             and Term of Office                             and Other Affiliations



Interested Director
<S>                                 <C>                                   <C>

Claire V. Hansen (1)(2)             Chairman and director                 Senior Advisor to the Board of Directors, Phoenix
55 East Monroe Street               since January 1987.                   Investment Partners, Ltd. since November 1995;
Chicago, Illinois 60603             Term expires in 2005.                 President and Chief Executive Officer of the Fund,
Age: 76                                                                   January 2000-February 2001; Senior Advisor to the
                                                                          Board of Directors, Duff & Phelps Corporation,
                                                                          1988-November 1995 (Chairman of the Board,
                                                                          1987-1988; Chairman of the Board and Chief Executive
                                                                          Officer prior thereto); Chairman of the Board, Duff
                                                                          Research Inc. and Duff & Phelps Investment
                                                                          Management Co., 1985-1987.
Independent Directors

Wallace B. Behnke(3)                Director since January 1987.          Consulting engineer since July 1989; prior thereto,
323 Glen Eagle                      Term expires in 2003.                 Vice Chairman, Commonwealth Edison Company (public
Kiawah Island,                                                            utility).
South Carolina 29455
Age: 76

Harry J. Bruce(3)                   Director since January 1989.          Private investor; former Chairman and Chief
1630 Sheridan Road                  Term expires in 2003.                 Executive Officer, Illinois Central Railroad Co.
Wilmette, Illinois 60091.
Age: 70

Franklin A. Cole(2)(5)              Director since January 1989.          Chairman, Croesus Corporation (private management
54 West Hubbard Street              Term expires in 2004.                 and investment company); former Chairman and Chief
Chicago, Illinois 60610.                                                  Executive Officer, Amerifin Corporation (formerly
Age: 75                                                                   named Walter E. Heller International Corporation);
                                                                          director, Aon Corporation.

Gordon B. Davidson(4)               Director since January 1989.          Of Counsel, Wyatt, Tarrant & Combs (law firm) since
PNC Plaza                           Term expires in 2004.                 September 1995 (Chairman of the Executive Committee
Louisville, Kentucky 40202                                                prior thereto); retired director, BellSouth Corp.;
Age: 75                                                                   former Chairman of the Board and director, Trans
                                                                          Financial Advisers, Inc.

Connie K. Duckworth (3)(5)          Director since April 2002.            Partner, Eight Wings Enterprises (investor in
77 Stone Gate Lane                  Term expires in 2005.                 early-stage businesses) since December 2001;
Lake Forest, Illinois 60045                                               Advisory Director, Goldman, Sachs & Company,
Age 47                                                                    December 2000-December 2001 (Managing Director,
                                                                          December 1996-December 2000, Partner
                                                                          1990-1996, Chief Operating Officer of Firmwide
                                                                          Diversity Committee 1990-1995); Chair, The
                                                                          Committee of 200 (organization of women business
                                                                          leaders)
</TABLE>


                                                            16
<PAGE>

<TABLE>
<CAPTION>

    Name,                         Position(s) Held With the Fund,                     Principal Occupation(s)
   Address                            Length of Time Served                             During Past 5 Years
   and Age                             and Term of Office                             and Other Affiliations


<S>                                 <C>                                   <C>


Robert J. Genetski (4)(5)(6)        Director since April 2001.            President, Robert J. Genetski & Associates, Inc.
195 North Harbor Drive              Term expires in 2004.                 (economic and financial consulting firm) since 1991;
Chicago, Illinois 60601                                                   Senior Managing Director, Chicago Capital, Inc.
Age: 59                                                                   (financial services firm) 1995-2001; former Senior
                                                                          Vice President and Chief Economist, Harris Trust &
                                                                          Savings Bank; author of several books; regular
                                                                          contributor to the Nikkei Financial Daily

Francis E. Jeffries (2)(4)(7)       Director since January 1987.          Retired Chairman, Phoenix Investment Partners, Ltd.
8477 Bay Colony Drive               Term expires in 2004.                 since May 1997 (Chairman, November 1995-May 1997);
Naples, Florida 34108                                                     Chairman and Chief Executive Officer, Duff & Phelps
Age: 71                                                                   Corporation, June 1993-November 1995 (President and
                                                                          Chief Executive Officer, January 1992-June 1993);
                                                                          President and Chief Executive Officer, Duff & Phelps
                                                                          Illinois Inc. since 1987 (President and Chief
                                                                          Operating Officer, 1984-1987) and Chairman of the
                                                                          Board, Duff & Phelps Investment Management Co.
                                                                          (1988-1993); director, The Empire District Electric
                                                                          Company.

Nancy Lampton (4)(5)(6)             Director since October 1994.          Chairman and Chief Executive Officer, Hardscuffle
3 Riverfront Plaza                  Term expires in 2003.                 Inc. (insurance holding company) and Chairman and
Louisville, Kentucky 40202                                                Chief Executive Officer, American Life and Accident
Age: 59                                                                   Insurance Company of Kentucky; director,
                                                                          Constellation Energy Group, Inc.

Carl F. Pollard (3)                 Director since April 2002.            Owner, Hermitage Farm L.L.C. (Thoroughbred breeding)
10500 W. U.S. Hwy 42                Term expires in 2005.                 since January 1995; Chairman, Columbia Healthcare
Goshen, Kentucky 40026                                                    Corporation 1993-1994; Chairman and Chief Executive
Age 63                                                                    Officer, Galen Health Care, Inc. March-August 1993;
                                                                          President and Chief Operating Officer, Humana Inc.
                                                                          1991-1993 (previously Senior Executive Vice
                                                                          President, Executive Vice President and Chief
                                                                          Financial Officer); Chairman and Director, Churchill
                                                                          Downs Incorporated; Director, National City Bank,
                                                                          Kentucky (Executive Committee), Breeders' Cup
                                                                          Limited, Kentucky Derby Museum Corporation; Trustee,
                                                                          Thoroughbred Owners and Breeders Association

David J. Vitale (3)(5)              Director since April 2000.            President and Chief Executive Officer, Board of
141 West Jackson Boulevard          Term expires in 2003.                 Trade of the City of Chicago, Inc. since March 2001;
Chicago, Illinois 60604                                                   Retired bank executive 1999-2001; Vice Chairman and
Age: 55                                                                   Director, Bank One Corporation 1998-1999; Vice
                                                                          Chairman and Director, First Chicago NBD
                                                                          Corporation, and President, The First National
                                                                          Bank of Chicago, 1995-1998; Vice Chairman, First
                                                                          Chicago Corporation and The First National Bank
                                                                          of Chicago 1993-1998 (Director 1992-1998,
                                                                          Executive Vice President 1986-1993); Director,
                                                                          Ariel Capital Management, Inc.; Ark Investment
                                                                          Management, Wheels Inc.
</TABLE>

                                                            17
<PAGE>

<TABLE>
<CAPTION>


    Name,                         Position(s) Held With the Fund,                     Principal Occupation(s)
   Address                            Length of Time Served                             During Past 5 Years
   and Age                             and Term of Office                             and Other Affiliations

<S>                                 <C>                                   <C>


Officers of the Fund (other than the Chairman, for whom see above)

Nathan I. Partain                   President and Chief Executive         Executive Vice President, Duff & Phelps Investment
55 East Monroe Street               Officer since February 2001           Management Co. since January 1997; Director of
Chicago, Illinois 60603             (Executive Vice President April       Utility Research, Phoenix Investment Partners, Ltd.,
Age: 45                             1998-February 2001, Chief             1989-1996 (Director of Equity Research, 1993-1996
                                    Investment Officer January            and Director of Fixed Income Research, 1993);
                                    1998-February 2001, Senior Vice       director, Otter Tail Corporation.
                                    President January 1997-April 1998,
                                    Assistant Secretary January
                                    1997-February 2001).

T. Brooks Beittel                   Secretary, Treasurer and Senior       Senior Vice President, Duff & Phelps Investment
55 East Monroe Street               Vice President since January 1995.    Management Co. since 1993 (Vice President 1987-1993).
Chicago, Illinois 60603
Age: 52

Michael Schatt                      Senior Vice President Fund since      Senior Vice President, Duff & Phelps Investment
55 East Monroe Street               April 1998 (Vice President January    Management Co. since January 1997; Managing
Chicago, Illinois 60603             1997-April 1998.                      Director, Phoenix Investment Partners, Ltd.,
Age: 55                                                                   1994-1996; Self-employed consultant, 1994; Director
                                                                          of Real Estate Advisory Practice, Coopers & Lybrand,
                                                                          1990-1994.

Joseph C. Curry, Jr.                Vice President since April 1988.      Senior Vice President, J.J.B. Hilliard, W.L. Lyons,
Hilliard Lyons Center                                                     Inc. since 1994 (Vice President 1982-1994); Vice
Louisville, Kentucky 40202                                                President, Hilliard Lyons Trust Company; President,
Age: 57                                                                   Hilliard-Lyons Government Fund, Inc.; Treasurer and
                                                                          Secretary, Hilliard Lyons Growth Fund, Inc.;
                                                                          Treasurer, Senbanc Fund.

Dianna P. Wengler                   Assistant Secretary since April       Vice President, J.J.B. Hilliard, W.L. Lyons, Inc.
Hilliard Lyons Center               1988.                                 since 1990; Vice President, Hilliard-Lyons
Louisville, Kentucky 40202                                                Government Fund, Inc.; Assistant Secretary, Hilliard
Age: 41                                                                   Lyons Growth Fund, Inc.
</TABLE>

- --------------------------------------------------------------------------------

(1)     Mr. Hansen is deemed to be an "interested person" of the Fund (as
        defined in the 1940 Act) because of his positions with the
        Fund and with Phoenix Investment Partners (parent company of the
        Adviser).

(2)     Member of the executive committee of the board of directors, which has
        authority, with certain exceptions, to exercise the powers of the board
        of directors between board meetings. The executive committee acted once
        during 2001 by unanimous written consent in lieu of a meeting.

(3)     Member of the audit committee of the board of directors, which makes
        recommendations regarding the selection of the Fund's independent
        public accountants and meets with representatives of the accountants to
        determine the scope of and review the results of each audit. The audit
        committee met twice during 2001.


                                      18
<PAGE>

(4)     Member of the nominating committee of the board of directors, which
        selects nominees for election as directors and officers. The nominating
        committee met four times during 2001. The nominating committee does not
        consider nominees recommended by shareholders.

(5)     Member of the contracts committee of the board of directors, which
        makes recommendations regarding the Fund's contractual arrangements for
        investment management and administrative services, including the terms
        and conditions of such contracts. The contracts committee met twice
        during 2001.

(6)     Director elected by holders of preferred stock.

(7)     Mr. Jeffries oversees 34 portfolios in the Fund Complex to which the
        Fund belongs.

        2.       Included in Item 18.1.

        3.       Not applicable.

        4.       Not applicable.

        5.       Included in Item 18.1.

        6.       Included in Item 18.1.

        7.       The following table provides certain information relating to
                 the equity securities beneficially owned, as of December 31,
                 2001, by each director (i) in the Fund and (ii) on an
                 aggregate basis, in any registered investment companies
                 overseen by the director within the same family of investment
                 companies as the Fund.

                                               Aggregate Dollar Range of Equity
                           Dollar Range        Securities in All Funds Overseen
                           of Equity           or to be Overseen by Director or
            Name of        Securities          Nominee in Family of Investment
            Director       in the Fund                  Companies


Interested Director

Claire V. Hansen            over $100,000               over $100,000

Independent Directors

Wallace B. Behnke           $10,001-$50,000             $10,001-$50,000
Harry J. Bruce               over $100,000               over $100,000
Franklin A. Cole            $10,001-$50,000             $10,001-$50,000
Gordon B. Davidson           over $100,000                over $100,000
Connie K. Duckworth               none                         none
Robert J. Genetski          $10,001-$50,000             $10,001-$50,000
Francis E. Jeffries          over $100,000                over $100,000
Nancy Lampton                over $100,000                over $100,000
Carl F. Pollard                   none                         none
David J. Vitale             $10,001-$50,000             $10,001-$50,000

         8.       As of December 31, 2001, none of the foregoing directors, or
                  their immediate family members, owned any securities of the
                  Adviser or any person (other than a registered investment
                  company) directly or indirectly controlling, controlled by or
                  under common control with the Adviser.

         9.       Mr. Jeffries was formerly a shareholder and member of senior
                  management of Duff & Phelps Corporation, predecessor to
                  Phoenix Investment Partners. Under the terms of his employment
                  contract, Phoenix Investment Partners continued to pay through
                  2001 the annual premium on life insurance policies owned by
                  Mr. Jeffries. The amount of such premiums in 2000 and 2001 was
                  $62,682 and $22,989, respectively. In 2000, Mr. Jeffries
                  received $283,554 for the repurchase of his common shares in
                  Phoenix Investment Partners and $228,850 for the purchase of
                  outstanding unexercised options, which transactions were
                  effected at the then market value for such shares and options.


                                      19
<PAGE>


         10.      Included in Item 18.9.

         11.      Included in Item 18.9.

         12.      Not applicable.

         13.      Approval of Advisory Agreement. Each year, the board of
                  directors of the Fund, including a majority of the directors
                  who are not interested persons of the Fund or the Adviser
                  voting separately as a class, is required to approve the
                  renewal of the Advisory Agreement. The board of directors
                  requests and evaluates, and the Adviser furnishes, such
                  information as the board determines to be reasonably necessary
                  to evaluate the terms of the Advisory Agreement. The board of
                  directors also retains an independent consultant on an annual
                  basis to provide detailed comparative data regarding the
                  Adviser's fees, expense ratios and investment performance.

                  In arriving at their decision to renew the current Advisory
                  Agreement, the directors reviewed the foregoing information
                  and took into account all factors that they deemed relevant to
                  the best interests of the shareholders of the Fund. Such
                  factors included the following: (i) the nature, quality and
                  extent of the services furnished to the Fund by the Adviser;
                  (ii) fees paid by other mutual funds for similar services;
                  (iii) the profitability to the Adviser of its relationship
                  with the Fund; (iv) the continuation of appropriate incentives
                  to assure that the Adviser will be able to continue to furnish
                  high-quality services to the Fund; (v) the capabilities of the
                  team of investment professionals employed by the Adviser who
                  perform services for the Fund; (vi) the necessity of the
                  Adviser maintaining and enhancing its ability to attract and
                  retain capable personnel to serve the Fund; (vii) the
                  investment performance over time of the Fund compared to
                  various market indices and other mutual funds; (viii) the
                  extent to which the Fund's stock trades at a premium or a
                  discount to net asset value; (ix) the benefits of any
                  economies of scale that may be available to the Adviser; and
                  (x) the direct and indirect benefits the Adviser receives from
                  its relationship with the Fund, including brokerage and soft
                  dollar arrangements (see description in Item 21.3 below).

                  In comparing the Fund's expenses and investment performance to
                  those of other mutual funds, the directors took note of the
                  fact that there are no other closed-end income-oriented funds
                  that have a utilities and REIT investment focus, an equity and
                  fixed-income asset mix and an asset level and leverage policy
                  comparable to the Fund. While expressly declining to use
                  investment performance as the sole, or even the primary,
                  measure of the quality of the Adviser's services, the
                  directors noted that the Fund's investment performance in 2001
                  had enabled the Fund to pay all of its regular monthly
                  dividends plus an enhanced dividend in the final month of the
                  year. The directors also viewed the fact that the Fund's stock
                  traded at an average premium of 11.8% to net asset value
                  during 2001 as evidence that investors take a favorable view
                  of the extent to which the Fund has been meeting its primary
                  objective of providing current income for shareholders. With
                  respect to investment personnel, the directors considered the
                  fact that the specific individuals who manage the Fund's
                  portfolio bring a significant depth of experience to their
                  jobs, have worked together for many years and are well
                  respected in the industry. With respect to expenses, the
                  directors noted that the management fees paid by the Fund were
                  at or below the median levels paid by other leveraged
                  closed-end domestic equity funds. It should be emphasized
                  that, in arriving at their decision, the directors did not
                  single out any one factor or group of factors as being more
                  important than other factors. Rather, the directors considered
                  all factors together in light of the totality of circumstances
                  presently facing the Fund, recognizing that different
                  circumstances might lead them to weigh the various factors
                  differently when considering the best interests of the Fund
                  and its shareholders.


                                      20
<PAGE>


                  Based on the foregoing considerations, the board of directors
                  of the Fund, including a majority of the directors who are not
                  interested persons of the Fund or the Adviser voting
                  separately as a class, determined that the fees payable to the
                  Adviser under the Advisory Agreement were fair and reasonable
                  to the Fund and that the renewal of the Advisory Agreement for
                  a one-year period ending on April 30, 2003 was in the best
                  interests of the Fund and its shareholders.

         14.      The following table shows the compensation paid by the Fund
                  to the Fund's current directors during 2001:

                           COMPENSATION TABLE (1)(2)
                                                                  Aggregate
                                                                Compensation
                                                                  from the
         Name of Director                                           Fund

         Interested Director

         Claire V. Hansen.......................................     $   0

         Independent Directors

         Wallace B. Behnke......................................  $ 39,429
         Harry J. Bruce.........................................    33,500
         Franklin A. Cole.......................................    44,500
         Gordon B. Davidson.....................................    40,500
         Connie K. Duckworth (3)................................         0
         Robert J. Genetski.....................................    22,453
         Francis E. Jeffries (2)................................    34,500
         Nancy Lampton..........................................    37,500
         Carl F. Pollard (3)....................................         0
         David J. Vitale........................................    42,571

- ------------------------------------
(1)      Each director not affiliated with the Adviser receives an annual fee of
         $22,500 (and an additional $3,000 if the director serves as chairman of
         a committee of the board of directors) plus an attendance fee of $1,500
         for each meeting of the board of directors and $1,000 for each meeting
         of a committee of the board of directors attended in person or by
         telephone. Directors and officers affiliated with the Adviser or the
         Administrator receive no compensation from the Fund for their services
         as such. In addition to the amounts shown in the table above, all
         directors and officers who are not affiliated with the Adviser or the
         Administrator are reimbursed for the expenses incurred by them in
         connection with their attendance at a meeting of the board of directors
         or a committee of the board of directors. The Fund does not have a
         pension or retirement plan applicable to directors or officers of the
         Fund.

(2)      During 2001, Mr. Jeffries received aggregate compensation of $135,000
         for service as a director of the Fund and as a director or trustee of
         33 other investment companies in the same fund complex as the Fund. No
         other director received compensation for service as a director of any
         other investment company in the same fund complex as the Fund.

(3)      Ms. Duckworth and Mr. Pollard were elected as directors of the Fund on
         April 23, 2002 and consequently received no compensation from the Fund
         during 2001.

         15. Codes of Ethics. Each of the Fund and the Adviser has adopted an
             Amended and Restated Code of Ethics (collectively, the "Codes")
             under Rule 17j-1 of the 1940 Act. The Codes impose significant
             restrictions on the ability of personnel subject to the Codes to
             engage in personal securities transactions. Among other things, the
             Codes generally prohibit covered personnel from knowingly buying or
             selling securities (except for mutual funds, U.S. government
             securities and money market instruments) that are being purchased,
             sold or considered for purchase or sale by the Fund unless the
             proposed purchases are approved in advance by the Adviser's
             compliance officer. The Codes also contain certain reporting
             requirements and compliance procedures. The Codes can be reviewed
             and copied at the Public Reference Room of the SEC in Washington,
             D.C. Information on the operation of the Public Reference Room may
             be obtained by calling the SEC at 1-202-942-8090. The Codes are
             also available at the EDGAR Database on the SEC's Internet site at
             http://www.sec.gov. Copies of the Codes may also be obtained, after
             paying a duplicating fee, by electronic request at the following
             E-mail address: publicinfo@sec.gov, or by writing the SEC's Public
             Reference Section, Washington, D.C. 20549-0102. The SEC file number
             for documents filed by the Fund under the 1940 Act is 811-4915.


                                      21
<PAGE>

Item 19.  Control Persons and Principal Holders of Securities

         1.  The Fund does not consider that any person "controls" the Fund
             within the meaning of this item. For information concerning
             the Fund's officers and directors, see Item 18.

         2.  No person is known by the Fund to own of record or beneficially
             five percent or more of any class of the Fund's
             outstanding equity securities.

         3.  As of December 31, 2001, the officers and directors of the
             Fund owned in the aggregate 229,862 shares of Common Stock,
             representing less than 1% of the Fund's outstanding Common
             Stock.

Item 20.  Investment Advisory and Other Services

         1.  The Adviser is a wholly-owned subsidiary of Phoenix Investment
             Partners, which is an indirect, wholly-owned subsidiary of
             The Phoenix Companies, Inc.  Phoenix Investment Partners and its
             subsidiaries provide investment management services to
             institutional and private clients and to the life insurance
             subsidiaries of The Phoenix Companies, Inc.

             See Item 18 for the names and capacities of affiliated persons of
             the Fund who are also affiliated persons of the Adviser.

             For a discussion of the method of calculating the advisory fee
             under the Advisory Agreement, see Item 9.1(b). The investment
             advisory fees paid by the Fund totaled $15,284,267 in 2001,
             $14,719,244 in 2000 and $14,839,366 in 1999.

         2.  See Item 9.1(b) for a discussion of the Service Agreement.

         3.  No fees, expenses or costs of the Fund were paid by persons other
             than the Adviser or the Fund.

         4.  See Item 9.1 (d) for a discussion of the Administration Agreement.
             The administrative fees paid by the Fund totaled
             $3,806,813 in 2001, $3,693,849 in 2000 and $3,717,873 in 1999.

         5.  Not applicable.

         6.  See Item 9.1 (e).

         7.  The Fund's independent public accountant is Arthur Andersen LLP.

         8.  Not applicable.

Item 21.  Brokerage Allocation and Other Practices

         1. The Adviser has discretion to select brokers and dealers to execute
         portfolio transactions initiated by the Adviser. The Fund paid
         brokerage commissions in the aggregate amount of $9,015,619, $7,158,821
         and $8,510,655 during 2001, 2000 and 1999, respectively, not including
         the gross underwriting spread on securities purchased in underwritten
         public offerings.

         2. The Fund did not pay any brokerage commissions during 2001, 2000 or
         1999 to any broker that (1) is an affiliated person of the Fund, (2) is
         an affiliated person of an affiliated person of the Fund or (3) has an
         affiliated person that is an affiliated person of the Fund or the
         Adviser.

         3. In selecting brokers or dealers to execute portfolio transactions
         and in evaluating the best net price and execution available, the
         Adviser is authorized to consider "brokerage and research services" (as
         those terms are defined in Section 28(e) of the Securities Exchange Act
         of 1934), statistical quotations, specifically the quotations necessary
         to determine the Fund's net asset value, and other information provided
         to the Fund and/or to the Adviser (or their affiliates). The Adviser is
         also authorized to cause the Fund to pay to a broker or dealer who
         provides such brokerage and research services a commission for


                                      22
<PAGE>

         executing a portfolio transaction which is in excess of the amount of
         commission another broker or dealer would have charged for effecting
         that transaction. The Adviser must determine in good faith, however,
         that such commission was reasonable in relation to the value of the
         brokerage and research services provided, viewed in terms of that
         particular transaction or in terms of all the accounts over which the
         Adviser exercises investment discretion. It is possible that certain of
         the services received by the Adviser attributable to a particular
         transaction will benefit one or more other accounts for which
         investment discretion is exercised by the Adviser.

         4. Neither the Fund nor the Adviser, during the last fiscal year,
         pursuant to an agreement or understanding with a broker or otherwise
         through an internal allocation procedure, directed the Fund's brokerage
         transactions to a broker or brokers because of research services.

         5. The Fund has not acquired during its most recent fiscal year
         securities of its regular brokers or dealers as defined in Rule 10b-1
         under the 1940 Act, or their parents.

Item 22.  Tax Status

         The Fund intends to continue to qualify as a regulated investment
company under the Internal Revenue Code of 1986, as it has in each year since
the inception of its operations, so as to be relieved of Federal income tax on
net investment income and net capital gains distributed to shareholders.

         Dividends paid by the Fund from its ordinary income and distributions
of the Fund's net realized short-term capital gains are taxable to shareholders
as ordinary income. Dividends from ordinary income may be eligible for the
dividends-received deduction available to corporate shareholders. Under its
charter, the Fund is required to designate dividends paid on its preferred stock
as qualifying for the dividends-received deduction to the extent such dividends
do not exceed the Fund's qualifying income. In the event the Fund is required to
allocate all of its qualifying income to dividends on the preferred stock,
dividends payable on the common stock will not be eligible for the
dividends-received deduction. Any distributions attributable to the Fund's net
realized long-term capital gains are taxable to shareholders as long-term
capital gains, regardless of the holding period of shares of the Fund.

         The Fund intends to distribute substantially all its net investment
income and net realized capital gains in the year earned or realized. A dividend
reinvestment plan is available to all holders of common stock of the Fund. Under
the dividend reinvestment plan, all cash distributions to participating
shareholders are reinvested in additional shares of common stock. See Item
10.1(c).

         As of December 31, 2001, the Fund had tax capital loss carryforwards of
$72,506,566 which expire beginning on December 31,
2003.

Item 23.  Financial Statements

         The financial statements listed below are incorporated herein by
reference from the Fund's Annual Report to Shareholders for the year ended
December 31, 2001 as filed on Form N-30D with the Securities and Exchange
Commission on February 27, 2002 (no. 811-4915). All other portions of the Annual
Report to Shareholders are not incorporated herein by reference and are not part
of the Registration Statement. A copy of the Annual Report to Shareholders may
be obtained without charge by writing to the Fund at its address at 55 East
Monroe Street, Chicago, Illinois 60603 or by calling the Administrator toll-free
at 888-878-7845.

     -    Report of independent public accountants

     -    Schedule of Investments at December 31, 2001

     -    Balance Sheet at December 31, 2001

     -    Statement of Operations for the year ended December 31, 2001

     -    Statement of Changes in Net Assets for the years ended
          December 31, 2001 and 2000

     -    Statement of Cash Flows for the year ended December 31, 2001

     -    Notes to Financial Statements

     -    Financial Highlights - Selected Per Share Data and Ratios


                                      23
<PAGE>

                           PART C: OTHER INFORMATION

Item 24.  Financial Statements and Exhibits

         1.       Financial Statements

                  In Part B:

                           Report of independent public accountants

                           Schedule of Investments at December 31, 2001

                           Balance Sheet at December 31, 2001

                           Statement of Operations for the year ended
                           December 31, 2001

                           Statement of Changes in Net Assets for the years
                           ended December 31, 2001 and 2000

                           Statement of Cash Flows for the year ended
                           December 31, 2001

                           Notes to Financial Statements

                           Financial Highlights - Selected Per Share Data
                           and Ratios

                  In Part C:

                           None

         2.       Exhibits

                  a.1      Articles of Incorporation

                  a.2      Amendment to Articles of Incorporation

                  a.3      Second Amendment to Articles of Incorporation

                  a.4      Form of Articles Supplementary creating Remarketed
                           Preferred Stock, Series A, B, C, D and E

                  a.5      Form of Articles Supplementary creating Remarketed
                           Preferred Stock, Series I

                  a.6      Third Amendment to Articles of Incorporation

                  a.7      Fourth Amendment to Articles of Incorporation

                  a.8      Fifth Amendment to Articles of Incorporation

                  a.9      Sixth Amendment to Articles of Incorporation

                  b.       Bylaws (as amended through October 18, 2001)

                  c.       None

                                      24
<PAGE>


                  d.1      Specimen common stock certificate (Incorporated by
                           reference from Registrant's registration statement on
                           Form N-2, no. 33-10421)

                  d.2      Form of certificate of Remarketed Preferred Stock,
                           Series A (Incorporated by reference from
                           pre-effective amendment no. 2 to Registrant's
                           registration statement on Form N-2, no. 33-22933)

                  d.3      Form of certificate of Remarketed Preferred Stock,
                           Series B (Incorporated by reference from
                           pre-effective amendment no. 1 to Registrant's
                           registration statement on Form N-2, no. 33-24101)

                  d.4      Form of certificate of Remarketed Preferred Stock,
                           Series C (Incorporated by reference from
                           pre-effective amendment no. 1 to Registrant's
                           registration statement on Form N-2, no. 33-24100)

                  d.5      Form of certificate of Remarketed Preferred Stock,
                           Series D (Incorporated by reference from
                           pre-effective amendment no. 1 to Registrant's
                           registration statement on Form N-2, no. 33-24102)

                  d.6      Form of certificate of Remarketed Preferred Stock,
                           Series E (Incorporated by reference from
                           pre-effective amendment no. 1 to Registrant's
                           registration statement on Form N-2, no. 33-24099)

                  d.7      Form of certificate of Remarketed Preferred Stock,
                           Series I (Incorporated by reference from
                           pre-effective amendment no. 2 to Registrant's
                           registration statement on Form N-2, no. 33-22933)

                  e.       None

                  f.       None

                  g.1      Investment Advisory Agreement (Incorporated by
                           reference from post-effective amendment no. 39 to
                           Registrant's registration statement under the
                           Investment Company Act of 1940 on Form N-2,
                           no. 811-4915)

                  g.2      Service Agreement (Incorporated by reference from
                           post-effective amendment no. 39 to Registrant's
                           registration statement under the Investment Company
                           Act of 1940 on Form N-2, no. 811-4915)

                  g.3      Administration Agreement (Incorporated by reference
                           from post-effective amendment no. 39 to Registrant's
                           registration statement under the Investment Company
                           Act of 1940 on Form N-2, no. 811-4915)

                  h.       Not applicable

                  i.       Not applicable

                  j.       Custodian agreement (Incorporated by reference from
                           Registrant's registration statement on Form N-2,
                           no. 33-10421)


                                      25
<PAGE>

                  k.1      Loan agreement (Incorporated by reference from
                           Registrant's registration statement on Form N-2,
                           no. 33-10421)

                  k.2      Amendment dated November 15, 1988 to Loan Agreement
                           (Incorporated by reference from post-effective
                           amendment no. 1 to Registrant's registration
                           statement on Form N-2, no. 33-20433)

                  k.3      Form of Remarketing Agreement (Incorporated by
                           reference from pre-effective amendment no. 3 to
                           Registrant's registration statement on Form N-2,
                           no. 33-22933)

                  k.4      Form of Paying Agent Agreement (Incorporated by
                           reference from pre-effective amendment no. 3 to
                           Registrant's registration statement on Form N-2,
                           no. 33-22933)

                  l.       Not applicable

                  m.       Not applicable

                  n.       Not applicable

                  o.       Not applicable

                  p.       Subscription Agreement for initial capital
                           (Incorporated by reference from Registrant's
                           registration statement on Form N-2, no. 33-10421)

                  q.       Not applicable

                  r.1      Amended and Restated Code of Ethics of Registrant
                           (Incorporated by reference from post-effective
                           amendment no. 41 to Registrant's registration
                           statement on Form N-2, no. 811-4915)

                  r.2      Amended and Restated Code of Ethics of Duff & Phelps
                           Investment Management Co. (investment adviser to
                           Registrant) (Incorporated by reference from
                           post-effective amendment no. 41 to Registrant's
                           registration statement on Form N-2, no. 811-4915)

Item 25.  Marketing Arrangements

         Not applicable.

Item 26.  Other Expenses of Issuance and Distribution

         Not applicable.

Item 27.  Persons Controlled by or Under Common Control

         The Fund does not consider that it is controlled, directly or
indirectly, by any person. The information on Item 20 is incorporated by
reference.

Item 28.  Number of Holders of Securities

                                      26
<PAGE>


                                                   Number of
                                                 Record Holders
                       Title of Class            March 31, 2002

Common Stock, $.001 par value                        28,540

Preferred Stock, $.001 par value                       1


Item 29.  Indemnification

         Section 2-418 of the General Corporation Law of Maryland authorizes the
indemnification of directors and officers of Maryland corporations under
specified circumstances.

         Article Ninth of the Registrant's Articles of Incorporation (Exhibit
a.1 to this registration statement) provides that the Registrant shall
indemnify its directors and officers under specified circumstances; the
provision contains the exclusion required by section 17(h) of the Investment
Company Act of 1940.

         Insofar as indemnification for liabilities arising under the Securities
Act of 1933 (the "1933 Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person in connection with the securities being registered), the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1933 Act and will be governed by the final adjudication of such
issue.

         The Registrant, its directors and officers, the Adviser and persons
affiliated with them are insured under a policy of insurance maintained by the
Registrant and the Adviser, within the limits and subject to the limitations of
the policy, against certain expenses in connection with the defense of actions,
suits or proceedings and certain liabilities that might be imposed as a result
of such actions, suits or proceedings, to which they are parties by reason of
being or having been such directors or officers. The policy expressly excludes
coverage for any director or officer whose personal dishonesty, fraudulent
breach of trust, lack of good faith, or intention to deceive or defraud has been
finally adjudicated or may be established or who willfully fails to act
prudently.

Item 30.  Business and Other Connections of Investment Adviser


         Neither Duff & Phelps Investment Management Co., nor any of its
directors or executive officers, has at any time during the past two years been
engaged in any other business, profession, vocation or employment of a
substantial nature either for its or his own account or in the capacity of
director, officer, employee, partner or trustee, except as indicated in this
Registration Statement.

Item 31.  Location of Accounts and Records

         All accounts, books and other documents required to be maintained by
Section 31 (a) of the Investment Company Act of 1940 and the Rules promulgated
thereunder are maintained at the offices of the Fund (55 East Monroe Street,
Chicago, Illinois 60603), the Adviser, the Administrator and the Fund's
custodian and transfer agents. See Items 9.1(b), 9.1(d) and 9.1(e) for the
addresses of the Adviser, the Administrator and the Fund's custodian and
transfer agents.

Item 32.  Management Services

         Not applicable.

Item 33.  Undertakings

         Not applicable.




                                      27
<PAGE>





                                    SIGNATURE


         Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this amendment to its registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Chicago, and State of Illinois, on April 30, 2002.


                                   DNP SELECT INCOME FUND INC.


                                   By:   /s/ Nathan I Partain
                                        --------------------------------------
                                         Nathan I Partain
                                         President and Chief Executive Officer



<PAGE>




                                 EXHIBIT INDEX


                                                                 Sequential
Exhibit No.       Description                                    Page No.


a.1              Articles of Incorporation
a.2              Amendment to Articles of Incorporation
a.3              Second Amendment to Articles of Incorporation
a.4              Form of Articles Supplementary creating Remarketed
                 Preferred Stock,
                 Series A, B, C, D and E
a.5              Form of Articles Supplementary creating Remarketed
                 Preferred Stock,
                 Series I
a.6              Third Amendment to Articles of Incorporation
a.7              Fourth Amendment to Articles of Incorporation
a.8              Fifth Amendment to Articles of Incorporation
a.9              Sixth Amendment to Articles of Incorporation
b                Bylaws (as amended through October 18, 2001)




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.1 CHARTER
<SEQUENCE>3
<FILENAME>ex-99a1.txt
<TEXT>

                                                             Exhibit a.1




                  DUFF & PHELPS SELECTED UTILITIES INC.

                         Articles of Incorporation

      The undersigned, being a natural person and acting as incorporator,
hereby adopts the following articles of incorporation for the purpose of
forming a business corporation under and by virtue of the general laws of
the State of Maryland.

      FIRST.  Incorporation.  The incorporator is Cameron S. Avery, who is
at least eighteen years of age and whose address is 70 West Madison Street,
Suite 3200, Chicago, Illinois 60602. He is forming the corporation named in
these articles of incorporation under the general laws of the State of
Maryland.

      SECOND.  Name.  The name of the corporation is Duff & Phelps Selected
Utilities Inc.

      THIRD.  Purposes.  The purposes for which the corporation is formed
are:

           1.    To engage in the business of a closed-end management
investment company.

           2.    To invest and reinvest in, to buy or otherwise acquire, to
hold for investment or otherwise, and to sell or otherwise dispose of:

                 a.   Securities of all kinds, however evidenced, and
      rights or warrants to acquire securities, of private and public
      companies, corporations, associations, trusts and other enterprises
      and organizations;

                 b.   Obligations issued or guaranteed by national and
      state governments and their instrumentalities and subdivisions;

                 c.   Deposits in banks, savings banks, trust companies and
      savings and loan associations;

                 d.   Assets and interests other than securities or
      deposits.

      FOURTH.  Principal office and resident agent.  The post office
address of the principal office of the corporation in the State of Maryland
is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,





<PAGE>



Maryland 21202. The name and post office address of the resident agent of
the corporation in the State of Maryland is The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202. The resident
agent is a Maryland corporation.

      FIFTH.  Capital Stock.

      A. Authorized stock. The total number of shares of capital stock that
the corporation shall have authority to issue is 100,000,000 shares, all of
one class called common stock, $.001 par value per share (common stock),
having an aggregate par value of $100,000.

      B. Sale of shares. The board of directors may authorize the sale and
issuance from time to time of shares of common stock, whether now or
hereafter authorized, for such consideration as the board of directors
considers advisable, but not less than par value, subject to such
limitations as may be set forth in these articles of incorporation, the
bylaws, the General Laws of the State of Maryland, the Investment Company
Act of 1940 and other applicable laws.

      C. Fractional shares. Stock may be issued in fractions of whole
shares, to which attach pro rata all of the rights of whole shares,
including the right of voting and of receipt of dividends, except that
there shall be no right of receipt of a certificate representing any
fraction of a whole share.

      D. No preemptive rights. No holder of shares of the corporation,
whether now or hereafter authorized, shall be entitled as of right to
acquire from the corporation any shares of the corporation, whether now or
hereafter authorized.

      SIXTH.  Bylaws.  The board of directors is authorized to adopt, alter
and repeal the bylaws of the corporation, except to the extent that the
bylaws provide otherwise.

      SEVENTH.  Board of Directors.

      1. The total number of directors constituting the board of directors
of the corporation shall be three, which number may be increased from time
to time in accordance with the bylaws of the corporation but shall not be
less than three. No decrease in the number of directors shall have the
effect of shortening the term of any director then in office.

      2.   The names of the persons who will serve as the initial directors
of the corporation are as follows:

                      Claire V. Hansen
                      Francis E. Jeffries
                      Robert D. Milne

      3. Beginning with the first annual meeting of shareholders held after
the initial public offering of the shares of the corporation ("the initial
annual meeting"), the board of directors shall be divided into three
classes: class I, class II, and class III. The terms of office of the
classes of directors elected at the initial annual meeting shall expire at
the times of the annual meetings of the stockholders as follows-class I in



                                2

<PAGE>



1988, class II in 1989, and class III in 1990-or thereafter in each case
when their respective successors are elected and qualified. At each
subsequent annual election, the directors chosen to succeed those whose
terms are expiring shall be identified as being of the same class as the
directors whom they succeed, and shall be elected for a term expiring at
the time of the third succeeding annual meeting of stockholders, or
thereafter in each case when their respective successors are elected and
qualified. The number of directorships shall be apportioned among the
classes so as to maintain the classes as nearly equal in number as
possible.

      4. Any vacancy occurring in the board of directors may be filled by a
majority of the directors in office. A new directorship resulting from an
increase in the number of directors shall be construed not to be a vacancy.
Any director elected to fill a vacancy shall be in the same class and have
the same remaining term as that of the predecessor.

      5. A director may be removed with or without cause, but only by
action of the shareholders taken by the holders of at least 75% of the
shares then entitled to vote in an election of directors.

      6. A majority of the total number of directors fixed in the bylaws
shall be required to constitute a quorum at meetings of the board of
directors.

      EIGHTH. Majority votes of stockholders. Notwithstanding any provision
of the laws of the State of Maryland requiring approval by the stockholders
of any action by the affirmative vote of a greater proportion than a
majority of the votes entitled to be cast on the matter, any such action
may be taken or authorized upon the concurrence of a majority of the number
of votes entitled to be cast thereon.

      NINTH.  Indemnification.  Each person who is or was a director or
officer of the corporation, and each person who serves or served at the
request of the corporation as a director or officer of another enterprise,
shall be indemnified by the corporation in accordance with, and to the
fullest extent authorized by, the General Corporation Law of the State of
Maryland as it may be in effect from time to time, provided that this
section shall not protect any director or officer of the corporation
against any liability to the corporation or to its shareholders to which he
would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the
conduct of his office; and provided further that this article shall not
apply as to any action, suit or proceeding brought by or on behalf of a
director or officer without prior approval of the board of directors.

      TENTH. Liability of directors and officers. The directors and
officers of the corporation shall not be liable to the corporation or to
any of its stockholders or creditors because of any action taken by them in
good faith, and in taking any such action the directors and officers shall
be fully protected in relying in good faith upon the books of account of
the corporation or statements or reports prepared by any of its officials
or employees or by others who they believe in good faith are qualified to
make such statements or reports; provided that this sentence shall not
protect any director or officer of the corporation against any liability to
the corporation or to its stockholders to which he would otherwise be



                            3

<PAGE>



subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.

      ELEVENTH. Merger, sale of assets, liquidation. Notwithstanding any
other provisions of these articles of incorporation, a favorable vote of
the holders of at least 75% of the shares of the corporation then entitled
to be voted on the matter shall be required to approve, adopt or authorize
(i) a merger or consolidation of the corporation with any other
corporation, (ii) a sale of all or substantially all of the assets of the
corporation (other than in the regular course of its investment
activities), or (iii) a liquidation or dissolution of the corporation,
unless such action has previously been approved, adopted or authorized by
the affirmative vote of two-thirds of the total number of directors fixed
in accordance with the bylaws.

      TWELFTH. Conversion to open-end company. Notwithstanding any other
provisions of these articles of incorporation, at any time prior to January
1, 1992, a favorable vote of the holders of at least 75% of the shares of
the corporation entitled to be voted on the matter shall be required to
approve, adopt or authorize an amendment to the articles of incorporation
of the corporation that makes the common stock a redeemable security (as
that term is defined in the Investment Company Act of 1940), unless such
action has previously been approved, adopted or authorized by the
affirmative vote of two-thirds of the total number of directors fixed in
accordance with the bylaws.

      THIRTEENTH. Amendment of articles of incorporation. The corporation
reserves the right to amend, alter change or repeal any provision contained
in its articles of incorporation, in the manner now or hereafter prescribed
by statute, and any rights conferred upon the stockholders are granted
subject to this reservation. Notwithstanding any other provisions of these
articles of incorporation or the bylaws of the corporation (and
notwithstanding the fact that a lesser percentage may be specified by law,
the articles of incorporation or the bylaws of the corporation), the
amendment or repeal of article seventh, eighth, ninth, tenth, eleventh,
twelfth or of this article thirteenth, of the articles of incorporation
shall require the affirmative vote of the holders of at least 75% of the
shares then entitled to be voted on the matter.





                             4

<PAGE>




      IN WITNESS WHEREOF, I have signed these articles of incorporation and
have acknowledged the same to be my act on this 25th day of November, 1986.



                                               /s/ Cameron S. Avery
                                              -------------------------------
                                              Cameron S. Avery


WITNESS:


/s/ Janet D. Olsen
- --------------------
Janet D. Olsen




























                                      5



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.2 CHARTER
<SEQUENCE>4
<FILENAME>ex-99a2.txt
<TEXT>


                                                             Exhibit a.2




                  DUFF & PHELPS SELECTED UTILITIES INC.

                           Articles of Amendment

      Duff & Phelps Selected Utilities Inc., a Maryland corporation having
its principal office in Baltimore, Maryland (hereinafter called the
corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:

      FIRST: The Articles of Incorporation of the corporation are amended
as follows:

           Article FIFTH, Paragraph A of the Articles of Incorporation is
      deleted, and the following is inserted in lieu thereof:

                 A.   Authorized Stock. The total number of shares of stock
           that the corporation shall have the authority to issue is
           250,000,000 shares, all of one class called common stock, $.001
           par value per share (common stock), having an aggregate par
           value of $250,000.

      SECOND: The board of directors of the corporation, including all of
the directors of the corporation, on January 12, 1987 duly adopted a
resolution in which was set forth the foregoing amendment to the Articles
of Incorporation and approved the foregoing amendment.

      THIRD: The organizational meeting of the board of directors was held
on November 26, 1986. There is no stock of the corporation outstanding or
subscribed for entitled to be voted on the amendment.

      FIFTH:(a) The total number of shares of stock which the corporation
has heretofore authorized to issue is 100,000,000 shares, all of one class,
of the par value of $.001 per share and of the aggregate par value of
$100,000.

      (b) The total number of shares of stock which the corporation is
authorized to issue is increased by this amendment to 250,000,000 shares,
$.001 par value per share, and the aggregate par value of the authorized
shares is increased to $250,000.




<PAGE>

      IN WITNESS WHEREOF, Duff & Phelps Selected Utilities Inc. has caused
these articles to be signed in its name and on its behalf by its president
and attested by its secretary on January 13, 1987.

                                         DUFF & PHELPS SELECTED
                                          UTILITIES INC.


                                          By /s/ Richard J. Spletzer
                                             -------------------------------
                                                 Richard J. Spletzer
                                                 Senior Vice President



Attest:

/s/ Calvin J. Pedersen
- -----------------------
Calvin J. Pedersen
Assistant Secretary

      The undersigned, senior vice president of Duff & Phelps Selected
Utilities Inc., who executed on behalf of the corporation the foregoing
articles of amendment, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of the corporation, the foregoing
articles of amendment to be the corporate act of the corporation and
further certifies that to the best of his knowledge, information and
belief, the matters and facts set forth therein with respect to the
approval thereof are true in all material respects, under the penalties of
perjury.


                                           /s/ Richard J. Spletzer
                                           ---------------------------
                                                 Richard J. Spletzer





                                       2





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.3 CHARTER
<SEQUENCE>5
<FILENAME>ex-99a3.txt
<TEXT>


                                                             Exhibit a.3





                  DUFF & PHELPS SELECTED UTILITIES INC.

                           Articles of Amendment

      Duff & Phelps Selected Utilities Inc., a Maryland corporation, having
its principal office in Baltimore, Maryland (hereinafter called the
corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:

      FIRST:  The charter of the corporation is hereby amended as follows:

           (a)  Article Fifth of the charter is amended in its entirety to
read as follows:

      FIFTH.  Capital Stock.
              -------------

           The total number of shares of all classes of stock which the
corporation shall have authority to issue is 350,000,000 shares with an
aggregate par value of $350,000, divided into two classes, of 250,000,000
shares of common stock, $.001 par value per share (common stock), and of
100,000,000 shares of preferred stock, $.001 par value per share (preferred
stock).

           The preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption, of the common stock and the preferred stock are
as follows:

      A.  Common stock
          ------------

           1.    Dividends. Subject to law and to the preferences of the
preferred stock, the holders of the common stock shall be entitled to
receive dividends at such time and in such amounts as may be determined by
the board of directors.

           2.    Voting. Except as provided by law and in or pursuant to
this article fifth, the holders of the common stock shall have one vote for
each share on each matter submitted to a vote of the stockholders of the
corporation.



<PAGE>




           3. Liquidation. In the event of any liquidation, dissolution or
winding up of the corporation, whether voluntary or involuntary, after
payment or provision for payment of the debts and other liabilities of the
corporation and the preferential amounts to which the holders of the
preferred stock shall be entitled upon liquidation, the holders of the
common stock shall be entitled to share in the remaining assets of the
corporation according to their respective interests.

      B.  Preferred stock
          ---------------

           1. Authority of the board of directors to issue in series. The
preferred stock may be issued from time to time in one or more series. All
shares of any one series of preferred stock shall be identical except as to
the respective dates of their issue, the dates from which dividends on
shares of the series issued on different dates shall cumulate, dividend
rates, dividend periods and dividend payment dates. Subject to the charter,
authority is expressly granted to the board of directors to authorize the
issue of one or more series of preferred stock, and to fix by resolution or
resolutions providing for the issue of each such series the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemptions, of such
series, to the full extent now or hereafter permitted by law, including but
not limited to the following:

           a. The number of shares of such series, which may subsequently
      be increased (except as otherwise provided by the resolution or
      resolutions of the board of directors providing for the issue of such
      series) or decreased (to a number not less than the number of shares
      then outstanding) by resolution or resolutions of the board of
      directors, and the distinctive designation of the series;

           b.    The rates or amounts, the periods, and the times of
      payment, of dividends on shares of such series;

           c.    The voting powers, if any, of the holders of such series
      in addition to the voting powers provided by law and in this article
      fifth;

           d. The terms and conditions, if any, upon which the shares of
      such series shall be convertible into or exchangeable for shares of
      any other series, class or classes, or any other securities, to the
      full extent now or hereafter permitted by law;

           e.    The time or times during which, the price or prices at
      which, and the terms and conditions on which, the shares of such
      series may be redeemed by the corporation;

           f.    The terms of any sinking fund to be applied to the
      purchase or redemption, or both, of shares of such series, and the
      terms and amount of any sinking fund payments and the manner of their
      application; and

           g.    The amount which the holders of each series shall be
      entitled to receive in the event of any voluntary or involuntary
      liquidation, dissolution or winding up of the corporation.


                                       2
<PAGE>





Except as stated above in this part 1, all shares of preferred stock shall
be identical. All shares of preferred stock, regardless of series, shall be
of equal rank, and there shall be no priority of one series over any other
series in any payment of dividends nor upon any distribution of assets.

           2. Dividends. The holders of preferred stock of each series
shall be entitled to receive, when and as declared by the board of
directors, cumulative cash dividends at the rates or amounts, for the
periods, and at the times, determined as, or in the manner, specified for
such series by the board of directors as authorized in the preceding part
1.

           No dividends shall be paid or declared or set apart for payment
on any share of preferred stock of any series for any dividend period
unless at or prior to such time all dividends accumulated on all shares of
preferred stock then outstanding shall have been declared through the most
recently ended dividend period of the respective shares, and terminating on
the same and any earlier date shall have been paid or declared and set
apart for payment.

           3. Voting. At any meeting of stockholders of the corporation at
which directors are to be elected, the holders of preferred stock of all
series, voting separately as a single class, shall be entitled to elect two
members of the board of directors, and the holders of common stock, voting
separately as a single class, shall be entitled to elect the balance of the
members of the board of directors.

           If at any time dividends on any outstanding preferred stock of
any series shall be unpaid in an amount equal to two full years' dividends,
the number of directors constituting the board of directors shall
automatically be increased by the smallest number that, when added to the
number of directors then constituting the board of directors, shall
constitute a majority of such increased number, including the two directors
elected by the holders of preferred stock pursuant to the preceding
paragraph; and at a special meeting of stockholders which shall be called
and held as soon as practicable, and at all subsequent meetings at which
directors are to be elected, the holders of preferred stock of all series,
voting separately as a single class, shall be entitled to elect the
smallest number of additional directors of the corporation who will
constitute a majority of the total number of directors of the corporation
so increased. The terms of office of the persons who are directors at the
time of that election shall continue. If the corporation thereafter shall
pay, or declare and set apart for payment, in full all dividends payable on
all outstanding shares of preferred stock of all series for all past
dividend periods, the voting rights stated in the preceding sentence shall
cease, and the terms of office of all of the directors elected by the
holders of preferred stock (but not of the directors elected by the holders
of common stock) shall terminate automatically. A special meeting of
stockholders shall be called and held as soon thereafter as practicable for
the election of two directors by the holders of the preferred stock, as
provided in the preceding paragraph; and at such meeting, and at all
subsequent meetings of stockholders at which directors are to be elected,
the holders of shares of preferred stock and of common stock shall have the
right to elect the members of the board of directors as stated in the
preceding paragraph, subject to the revesting of the rights of the holders


                                       3
<PAGE>



of the preferred stock as provided in the first sentence of this paragraph
in the event of any subsequent arrearage in the payment of two full years'
dividends on the shares of preferred stock of any series.

           Any vacancy in the office of any director elected by the holders
of shares of preferred stock may be filled by the remaining directors (or
director) so elected or, if not so filled, by the holders of shares of
preferred stock of all series, voting separately as a single class, at any
meeting of stockholders for the election of directors held thereafter. A
director elected by the holders of preferred stock or of common stock may
be removed with or without cause, but only by action taken by the holders
of at least 75% of the shares of preferred stock or of common stock,
respectively, then entitled to vote in an election to fill that
directorship.

           Except to the extent stated otherwise in this article fifth, the
provisions of article seventh shall apply to this article fifth.

           4. Liquidation. In the event of any liquidation, dissolution or
winding up of the corporation, whether voluntary or involuntary, the
holders of preferred stock of each series shall be entitled to receive only
such amount or amounts, including accumulated and unpaid dividends, as
shall have been fixed by the charter or by the resolution or resolutions of
the board of directors providing for the issue of such series. If, upon any
such liquidation, dissolution or winding up of the corporation, whether
voluntary or involuntary, the assets of the corporation available for
distribution among the holders of all outstanding shares of preferred stock
of all series should be insufficient to permit the payment in full to such
holders of the amounts to which they are entitled, then such available
assets shall be distributed among the holders of shares of preferred stock
ratably in any such distribution of assets according to the respective
amounts that would be payable on all such shares if all amounts thereon
were paid in full. A consolidation or merger of the corporation with or
into one or more other corporations or a sale, lease or exchange of all or
substantially all of the assets of the corporation shall not be deemed to
be a voluntary or involuntary liquidation, dissolution or winding up,
within the meaning of this article fifth.

      C.  All stock
          ---------

           1. Sale of shares. The board of directors may authorize the sale
and issuance from time to time of shares of stock, whether now or hereafter
authorized, for such consideration as the board of directors considers
advisable, but not less than par value, subject to such limitations as may
be set forth in the charter of the corporation, the bylaws, the General
Laws of the State of Maryland, the Investment Company Act of 1940, and
other applicable laws.

           2. Fractional shares. Except as may be provided otherwise by the
board of directors in authorizing the issuance of a series of preferred
stock, stock may be issued in fractions of whole shares, to which attach
pro rata all of the rights of whole shares, including the right of voting
and of receipt of dividends, except that there shall be no right of receipt
of a certificate representing any fraction of a whole share.



                                       4
<PAGE>




           3. No preemptive rights. No holder of shares of the corporation,
whether now or hereafter authorized, shall be entitled as of right to
acquire from the corporation any shares of the corporation, whether now or
hereafter authorized.

      (b)  A new Article Fourteenth is added to the charter to read in its
entirety as follows:

      FOURTEENTH. Limitation of Liability. To the fullest extent permitted
      by Maryland statutory or decisional law, as amended or interpreted,
      no director or officer of the corporation shall be personally liable
      to the corporation or to its stockholders for money damages;
      provided, however, that this article shall not protect any director
      or officer of the corporation against any liability to the
      corporation or to its stockholders to which he or she would otherwise
      be subject by reason of willful misfeasance, bad faith, gross
      negligence, or reckless disregard of the duties involved in the
      conduct of his or her office. No amendment of the charter of the
      corporation or repeal of any of its provisions shall limit or
      eliminate the benefits provided to directors and officers under this
      provision in connection with any act or omission that occurred prior
      to such amendment or repeal.

      SECOND: The board of directors of the corporation on March 4, 1988
duly adopted a resolution in which was set forth each of the foregoing
amendments to the charter, declaring that each amendment as proposed was
advisable and directing that each amendment be submitted for consideration
at the 1988 annual meeting of stockholders of the corporation.

      THIRD: Notice setting forth the proposed amendments to the charter
and a summary of the changes to be effected by each amendment and stating
that a purpose of the meeting of the stockholders called to be held on
April 8, 1988 (which meeting, having been convened was adjourned to May 17,
1988) would be to take action thereon was given, as required by law, to all
stockholders entitled to vote thereon. Each amendment to the charter of the
corporation as hereinabove set forth was approved by the stockholders of
the corporation at the adjourned session of said meeting by the affirmative
vote of a majority of all the votes entitled to be cast thereon.

      FOURTH:  Each amendment to the charter of the corporation as
hereinabove set forth has been duly advised by the board of directors and
duly approved by the stockholders of the corporation.

      FIFTH: (a) The total number of shares of stock which the corporation
has heretofore been authorized to issue is 250,000,000 shares, all of one
class called common stock, of the par value of $.001 per share and of the
aggregate par value of $250,000.

      (b) The total number of shares of stock which the corporation is
authorized to issue is increased by the amendment to Article Fifth of the
charter to 350,000,000 shares, of which 250,000,000 shares are common
stock, par value $.001 per share, and of which 100,000,000 shares are
preferred stock, par value $.001 per share. The aggregate par value of the
authorized shares is increased to $350,000.



                                       5
<PAGE>





      (c) The description of each class of stock of the corporation as
amended is fully contained in the text of the amendment to Article Fifth of
the charter set out in its entirety in subsection (a) of Article First
hereof.

      IN WITNESS WHEREOF, Duff & Phelps Selected Utilities Inc. has caused
these articles to be signed in its name and on its behalf by its president
and attested to by its secretary on May 17, 1988.

                                        DUFF & PHELPS SELECTED
                                         UTILITIES INC.



                                         By: /s/ Richard J. Spletzer
                                            ----------------------------
                                                  Richard J. Spletzer
                                                  Senior Vice President


ATTEST:

/s/ Calvin J. Pedersen
- ------------------------------
    Calvin J. Pedersen
      Secretary


      THE UNDERSIGNED, senior vice president of Duff & Phelps Selected
Utilities Inc., who executed on behalf of the corporation the foregoing
Articles of Amendment, of which this certificate is made a part, hereby
acknowledges, in the name and on behalf of the corporation, the foregoing
Articles of Amendment to be the corporate act of the corporation and
further certifies that to the best of his knowledge, information and
belief, the matters and facts set forth therein with respect to the
authorization and approval thereof are true in all material respects, under
the penalties of perjury.



                                          /s/ Richard J. Spletzer
                                          -------------------------------
                                           Richard J. Spletzer



                                       6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.4 CHARTER
<SEQUENCE>6
<FILENAME>ex-99a4.txt
<TEXT>

                                                             Exhibit a.4




                  DUFF & PHELPS SELECTED UTILITIES INC.

             Articles Supplementary creating five 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 five series of 1,000 shares each of its authorized preferred
stock, par value $.001 per share, liquidation preference $100,000 per
share, designated respectively: Remarketed Preferred Stock, Series A;
Remarketed Preferred Stock, Series B; Remarketed Preferred Stock, Series C;
Remarketed Preferred Stock, Series D; and Remarketed Preferred Stock,
Series E.

      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

      SERIES A: A series of 1,000 shares of preferred stock, par value
$.001 per share, liquidation preference $100,000 per share plus accumulated
but unpaid dividends, if any, thereon (whether or not earned or declared),
is hereby designated "Remarketed Preferred Stock, Series A." Each share of
Remarketed Preferred Stock, Series A 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; be redeemed (unless
such share shall have been otherwise redeemed pursuant to paragraph 4 of
Part I of these Articles Supplementary or exchanged prior thereto for a
share of Remarketed Preferred Stock, Series I, pursuant to paragraph 11 of
Part I of these Articles Supplementary) by the Corporation on a date to be
determined by the Board of Directors of the Corporation or a duly
authorized committee thereof at a redemption price of $100,000 per share
plus accumulated but unpaid dividends to the date fixed for redemption
(whether or not earned or declared); and have such other preferences,


<PAGE>



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. The Remarketed Preferred Stock, Series A
shall constitute a separate series of preferred stock of the Corporation,
and each share of Remarked Preferred Stock, Series A shall be identical
except as provided in paragraph 4 of Part I of these Articles
Supplementary.

      SERIES B: A series of 1,000 shares of preferred stock, par value
$.001 per share, liquidation preference $100,000 per share plus accumulated
but unpaid dividends, if any, thereon (whether or not earned or declared),
is hereby designated "Remarketed Preferred Stock, Series B." Each share of
Remarketed Preferred Stock, Series B 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; be redeemed (unless
such share shall have been otherwise redeemed pursuant to paragraph 4 of
Part I of these Articles Supplementary or exchanged prior thereto for a
share of Remarketed Preferred Stock, Series I, pursuant to paragraph 11 of
Part I of these Articles Supplementary) by the Corporation on a date to be
determined by the Board of Directors of the Corporation or a duly
authorized committee thereof at a redemption price of $100,000 per share
plus accumulated but unpaid dividends to the date fixed for redemption
(whether or not earned or declared); and have such other 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. The Remarketed Preferred Stock, Series B
shall constitute a separate series of preferred stock of the Corporation,
and each share of Remarketed Preferred Stock, Series B shall be identical
except as provided in paragraph 4 of Part I of these Articles
Supplementary.

      SERIES C: A series of 1,000 shares of preferred stock, par value of
$.001 per share, liquidation preference $100,000 per share plus accumulated
but unpaid dividends, if any, thereon (whether or not earned or declared),
is hereby designated "Remarketed Preferred Stock, Series C." Each share of
Remarketed Preferred Stock, Series C 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; be redeemed (unless
such share shall have been otherwise redeemed pursuant to paragraph 4 of
Part I of these Articles Supplementary or exchanged prior thereto for a
share of Remarketed Preferred Stock, Series I, pursuant to paragraph 11 of
Part I of these Articles Supplementary) by the Corporation on a date to be
determined by the Board of Directors of the Corporation or a duly
authorized committee thereof at a redemption price of $100,000 per share
plus accumulated but unpaid dividends to the date fixed for redemption
(whether or not earned or declared); and have such other 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. The Remarketed Preferred Stock, Series C



                                       2
<PAGE>



shall constitute a separate series of preferred stock of the Corporation,
and each share of Remarketed Preferred Stock, Series C shall be identical
except as provided in paragraph 4 of Part I of these Articles
Supplementary.

      SERIES D: A series of 1,000 shares of preferred stock, par value
$.001 per share, liquidation preference $100,000 per share plus accumulated
but unpaid dividends, if any, thereon (whether or not earned or declared),
is hereby designated "Remarketed Preferred Stock, Series D." Each share of
Remarketed Preferred Stock, Series D 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; be redeemed (unless
such share shall have been otherwise redeemed pursuant to paragraph 4 of
Part I of these Articles Supplementary or exchanged prior thereto for a
share of Remarketed Preferred Stock, Series I, pursuant to paragraph 11 of
Part I of these Articles Supplementary) by the Corporation on a date to be
determined by the Board of Directors of the Corporation or a duly
authorized committee thereof at a redemption price of $100,000 per share
plus accumulated but unpaid dividends to the date fixed for redemption
(whether or not earned or declared); and have such other preferences,
limitations and relative voting rights, in addition to those required by
applicable law or set forth on 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. The Remarketed Preferred Stock, Series D
shall constitute a separate series of preferred stock of the Corporation,
and each share of Remarketed Preferred Stock, Series D shall be identical
except as provided in paragraph 4 of Part I of these Articles
Supplementary.

      SERIES E: A series of 1,000 shares of preferred stock, par value
$.001 per share, liquidation preference $100,000 per share plus accumulated
but unpaid dividends, if any, thereon (whether or not earned or declared),
is hereby designated "Remarketed Preferred Stock, Series E." Each share of
Remarketed Preferred Stock, Series E 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; be redeemed (unless
such share shall have been otherwise redeemed pursuant to paragraph 4 of
Part I of these Articles Supplementary or exchanged prior thereto for a
share of Remarketed Preferred Stock, Series I, pursuant to paragraph 11 of
this Part I of these Articles Supplementary) by the Corporation on a date
to be determined by the Board of Directors of the Corporation of a duly
authorized committee thereof at a redemption price of $100,000 per share
plus accumulated but unpaid dividends to the date fixed for redemption
(whether or not earned or declared); and have such other 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. The Remarketed Preferred Stock, Series E
shall constitute a separate series of preferred stock of the Corporation,
and each share of Remarketed Preferred Stock, Series E shall be identical
except as provided in paragraph 4 of Part I of these Articles
Supplementary.


                                       3
<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 (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 the Interest Equivalent
of the 60-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 a designated member of the Securities
Depository 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, 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.


                                       4
<PAGE>




           "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 and the Articles
Supplementary relating to the Serial RP (if any) 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.

           "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 commonly 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
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


                                       5
<PAGE>



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 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.

           "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):


                                       6
<PAGE>



<TABLE>
<CAPTION>
                                                   Discounted 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>

                                       7
<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):




                                       8
<PAGE>



<TABLE>
<CAPTION>
                                                     Discount Factor(1)
                                                     ------------------
<S>                                                       <C>
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:                      1.44

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

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



                                       9
<PAGE>

<CAPTION>

<S>                                                       <C>
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

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


                                       10
<PAGE>

<CAPTION>

<S>                                                       <C>
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





                                       11
<PAGE>





<CAPTION>
                                                   Discount
                                                    Factor
                                                   (Fixed        (Adjustable
                                                    Rate
FHLMC or FNMA Certificate                         Mortgages)      Mortgage)
- -------------------------                         ----------     -----------
<S>                                                  <C>             <C>
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




                                       12
<PAGE>




<CAPTION>

                                                   Discount
GNMA Certificates                                   Factor
- -----------------                                  --------
<S>                                                  <C>
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

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:                                 1.15

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




                                       13
<PAGE>




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

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.
</TABLE>



                                       14
<PAGE>



           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.

           "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 that 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



                                       15
<PAGE>



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.

           "Divided 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 Dividend Payment Date that follows 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 Date; 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 Dividend Coverage Assets.

           "Dividend Payment Date" means the day after the last day of the
applicable Dividend Period; 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, 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). 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 Period by causing it 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 Rate for the ensuing Dividend
Period, (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 Rate.

           "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 assets held by the Corporation that has been assigned a Discount
Factor by the Rating Agencies and is included within the definition of


                                       16
<PAGE>



Eligible Portfolio Property set forth herein or pursuant to an amendment or
supplement hereto.

           "Exchange Date" has the meaning set forth in paragraph 11, of
this Part I.

           "Exchange Event" has the meaning set forth in paragraph 11 of
this Part I.

           "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.

           "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 secure 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.

           "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.



                                       17
<PAGE>



           "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.

           "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, the 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;



                                       18
<PAGE>



                 (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 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


                                       19
<PAGE>


      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
      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 of the Corporation 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 Dividend Period 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:



                                       20
<PAGE>





             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 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 (0.005) of one 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.



                                       21
<PAGE>




           "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 the full amount of any declared cash dividend
(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) 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 to 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.

           "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.


                                       22
<PAGE>




           "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, shall refer to the equivalent date 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 terms, for purposes of this definition, shall refer to
      the equivalent date 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 terms, for purposes of
      this definition, shall refer to the equivalent date 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 of 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


                                       23
<PAGE>



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.

           "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 Conventional Mortgage Pass-Through Certificate means:

                 (a) the mortgage note or other evidence of indebtedness
      secured by the mortgage endorsed without recourse in blank or other
      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


                                       24
<PAGE>




      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

                 (d) a copy of the title insurance policy or an opinion or
      certificate of counsel stating that 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(1) of this Part
I.

           "RP" means either the Remarketed Preferred Stock, Series A; the
Remarketed Preferred Stock, Series B; the Remarketed Preferred Stock,
Series C; the Remarketed Preferred Stock, Series D; or the Remarketed
Preferred Stock, Series E.

           "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 no
covered in (i), 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.



                                       25
<PAGE>



           "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 successory 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.

           "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.

           "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.

           "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.


                                       26
<PAGE>



           "Substitute Rating Agency" and "Substitute Rating Agencies" mean
a nationally recognized statistical rating organization or two nationally
recognized statistical rating 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 determined by the
Remarketing Agency in such Remarketing.

           "Tender Date" means any date on which (i) each holder of shares
of RP must provide to the Remarketing Agent irrevocable telephonic notice
of intent to tender shares of RP in a Remarketing, 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, 1988
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
(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


                                       27
<PAGE>



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 rate 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):


                                       28

<PAGE>

<TABLE>
<CAPTION>
                   Column (1)     Column(2)     Column(3)      Column(4)

                                                                Maximum Percent
                                                Maximum         of Market
                                                Percent of      Value
                                                Market Value    of Corpora-
                                                of Corpora-     tion's Assets
                                                tion's Assets,  Including
S&P and                       Maximum Percent   Including Eli-  Eligible
Moody's                       of Market Value   gible Portfolio Portfolio
Rating of                     of Eligible       Property,       Property,
Utility      Minimum          Portfolio         Issued by       Issued
Bonds or     Original         Property          Issuers in any  by Issuers
Debt Obli-   Issue Size of    Issued by any     One Industry    Regulated by
gations (1)  Each Issue(2)    One Issuer(3)     Category(4)     any One (5)
- ----------   ---------------- ----------------  --------------  ------------

             ($ in millions)    S&P   Moody's
                                ---   -------
<S>              <C>           <C>     <C>        <C>              <C>
                 $100          10.0%   100.0%     100.0%           100.0%
                  100          10.0     20.0       60.0             20.0
                  100          10.0     10.0       50.0             10.0
                  100           5.0      4.0       50.0              7.0


- --------------------------

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

</TABLE>

      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 determining compliance with the RP Basic Maintenance Amount if
the Board of Directors determines and the Rating Agencies advise the


                                       29
<PAGE>



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 a termination (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 transfer, 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(1) below and payable as
set forth therein. 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 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.

                                       30
<PAGE>



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

      (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. Except as provided in paragraph 3(h) or 3(l) of this Part
I, neither Holders nor Beneficial Owners of shares of RP shall be entitled
to any interest, or other additional amount, on any dividend payment
(including Rights) on any share of RP which may be in arrears.

      (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 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.

      (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
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 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.

      (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


                                       31
<PAGE>



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 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 and by 1:00 p.m. on the
Tender Date at the end of each subsequent Dividend Period, the Beneficial
Owner of a share of RP may elect to tender such share or to hold such share
for the next Dividend Period. If the Beneficial Owner of such share of PR
fails to elect to tender or hold 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 the next
Dividend Period; provided that, if there is no Remarketing Agent, the
Remarketing Agent does not conduct a Remarketing or the Remarketing Agent
is unable to remarket in such Remarketing all shares of RP tendered to it
at a price of $100,000 per share, then such Beneficial Owner shall hold
such share for the next Dividend Period and the Applicable Dividend Rate
therefor shall be the Maximum Dividend Rate.

      (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 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


                                       32
<PAGE>



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) 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
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 such 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 Nonqualifying Distributions would have qualified for the
Dividends-Received Deduction in the hands of such Right Holder. Such cash
receivable on such 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:


                                       33
<PAGE>



           (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 Date, out of funds legally available therefor, at a
redemption price equal to $100,000 per share plus an amount equal to cash
dividends thereon (whether or not earned or declared) accumulated but
unpaid to the date fixed for redemption.

           (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 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
locate 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.

           (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. Unless certificates representing shares of RP are held by
Holders other than the Securities Depository or its nominee, the Securities
Depository, upon receipt of such notice, shall determine by lot 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 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



                                       34
<PAGE>



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
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 by lot.

           (e) Any Notice of 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, on the fifth Business Day prior
to the redemption date. In the case of a partial redemption of the shares
of PR, 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
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 defect in the Notice of Redemption or other redemption
notice or in the transmittal or the mailing thereof 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


                                       35
<PAGE>





which shall have been given Notice of Redemption shall not be subject to
transfer outside 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 of
any shares 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 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(l) of this Part I), and such shares
shall no longer be deemed outstanding for any purpose. The Corporation
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


                                       36
<PAGE>



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 Period (or, if such transaction is on a Dividend Payment Date,
through the Dividend Period 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 Payment 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.

           (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. (a) 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 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.

           (b) 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 where paid in full.

           (c) Neither the consolidation nor the merger of the Corporation
with or into any corporation or corporations nor a reorganization of the


                                       37
<PAGE>



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.
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).



                                       38
<PAGE>




           (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.

               (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


                                       39
<PAGE>



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.

      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 least equal to the RP Basic 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.



                                       40
<PAGE>




               (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
determined in accordance with these Articles Supplementary whether 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 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 in a


                                       41
<PAGE>



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.

               (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
the shares of RP as to dividends and upon liquidation) or any other such
parity 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 Right required
to be paid under paragraph 3(l) 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


                                       42
<PAGE>



earlier of the date received or the date seven days after which such notice
is mailed.

      11. Exchange Provisions. (a) Upon receipt by the Corporation of an
opinion of legal counsel, in form and substance satisfactory to the Board
of Directors, that dividends on the Corporation's Remarketed Preferred
Stock, Series I will not be considered preferential under section 562(c) of
the Code, which opinion may, but is not required to, rely upon a ruling on
the matter by the Service, the Board of Directors may, but is not required
to, adopt a resolution authorizing (such authorization shall be referred to
herein as an "Exchange Event") that, on the first Dividend Payment Date for
the RP which is at least 45 days after the occurrence of an Exchange Event
and as of which the conditions described below have been satisfied (the
"Exchange Date"), the RP will be exchanged automatically, and without any
action or choice on the part of Holders thereof, on a share-for-share basis
for the Corporation's Remarketed Preferred Stock, Series I. However, shares
of RP will not be exchanged for shares of the Corporation's Remarketed
Preferred Stock, Series I unless Moody's and S&P shall have issued on or
before the Exchange Date ratings on the Corporation's Remarketed Preferred
Stock, Series I equivalent to the ratings on the RP, provided that, if
Moody's or S&P shall not make a rating available, such exchange will take
place if a Substitute Rating Agency or Agencies shall have issued a rating
or ratings which is/are equivalent to such then-current rating or ratings
on the Exchange Date. Holders of outstanding shares of RP will receive one
share of the Corporation's Remarketed Preferred Stock, Series I for each
share of RP held and exchanged by them on the Exchange Date.

      (b) The Fund will cause the publication of an exchange notice in an
Authorized Newspaper, and cause the Paying Agent to mail an exchange notice
to each Holder, not less than 10 nor more than 30 days prior to the
Exchange Date. Such notice will state: (i) the Exchange Date, (ii) that on
the Exchange Date all shares of Original RP will be exchanged
automatically, and without any action or choice on the part of the Holders,
on a share-for-share basis for the Corporation's Remarketed Preferred
Stock, Series I, (iii) that the Initial Dividend Period for the
Corporation's Remarketed Preferred Stock, Series I issuable in exchange for
the RP will be a 49-day Dividend Period commencing on the Exchange Date,
and (iv) that dividends on shares of RP will cease to accumulate on the
Exchange Date.

      (c) On the Exchange Date, the RP will cease to accumulate dividends,
the shares of RP will no longer be deemed outstanding, the rights of the
Holders (except the right to receive accumulated but unpaid dividends to
the Exchange Date) will cease, and the person or persons entitled to
receive the Corporation's Remarketed Preferred Stock, Series I upon the
exchange will be treated for all purposes as the holder or holders of such
Remarketed Preferred Stock, Series I.

      12. 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.


                                       43
<PAGE>





      13. 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 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.

      14. 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 shares 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


                                       44
<PAGE>



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
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 Optional Dividend Period, if any, and any Special Dividend Period
provided that, if the Remarking Agent is unable to remarket on such
Dividend Reset Date all such tendered shares in a Remarketing 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 in 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 fixed
and variable rate taxable and tax-exempt debt securities and the prevailing
dividend yields of fixed and variable rate preferred stock, if necessary,


                                       45
<PAGE>



determine the Applicable Dividend Rate or Rates, as the case may be, 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
Applicable Dividend Rates for the next 7-day Dividend Period (including the
7-day Dividend Period referred to in the preceding clause (ii)), next


                                       46
<PAGE>



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 is 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 for the
Dividend Periods beginning on the Business Day following such Dividend
Reset Date of the Applicable Dividend Rate 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.

           (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


                                       47
<PAGE>





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 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 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
specified in such notice and authorization to the Remarketing Agent to
sell, transfer or otherwise dispose of such shares as set forth herein and
(v) unless the Corporation shall have elected, during a Non-Payment Period,
to waive this requirement, to sell, transfer or otherwise dispose of any


                                       48
<PAGE>



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 reflects 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 certificates 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.




                                       49
<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
                                  -------------------------
                                  Chairman, President


Attest:

/s/ Calvin J. Pedersen
- -----------------------
Secretary





</TEXT>
</DOCUMENT>
<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>
<DOCUMENT>
<TYPE>EX-99.A.6 CHARTER
<SEQUENCE>8
<FILENAME>ex-99a6.txt
<TEXT>


                                                        Exhibit a.6







                  DUFF & PHELPS SELECTED UTILITIES INC.


                           Articles of Amendment
                          ---------------------

      Duff & Phelps Selected Utilities Inc., a Maryland corporation having
its principal office in Chicago, Illinois (hereinafter called the
corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:

      FIRST:  The charter of the corporation, as heretofore amended, is
hereby further amended as follows:

      The Articles Supplementary creating five series of Remarketed
Preferred Stock of the corporation are amended as follows:

      1. Part I, paragraph 1, Definitions, is amended by deleting the
definition of "Eligible Portfolio Property" and replacing it with the
following:

      "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, Other
Permitted Securities 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.

      2. Part I, paragraph 1, Definitions, is further amended by the
addition thereto of the following definition of "Other Permitted
Securities":

      ""Other Permitted Securities" shall include any asset held or
proposed to be acquired by the Corporation (i) not coming within the
definition of 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 or Conventional


<PAGE>



Mortgage Pass-Through Certificates and (ii) that has been assigned a
Discount Factor by the Rating Agencies, provided that the Board of
Directors determines and the Rating Agencies advise the Corporation in
writing that the acquisition or holding of the asset will not adversely
affect their then-current ratings of the RP.

      3.   Part I, paragraph 6, Voting, is amended by the addition thereto
of the following sub-paragraph (e):

           (e) Voting by Series. In addition to any vote of the requisite
percentage of shares of Common Stock and shares of Preferred Stock,
including RP, otherwise necessary to authorize any proposed action under
the Charter or the 1940 Act, on any matter therein the Preferred Stock has
the right to vote as a class, the approval of the holders of a majority of
the outstanding shares of any series of Preferred Stock, including any
series of RP, voting separately as a series, shall be necessary to approve
such proposed action if such series would be affected by the proposed
action in a manner materially different from any other series.

      SECOND: The board of directors of the corporation on October 11, 1989
duly adopted a resolution in which was set forth the foregoing amendment to
the charter, declaring that the said amendment to the charter as proposed
was advisable and directing that it be submitted for consideration at the
1989 annual meeting of stockholders of the corporation.

      THIRD: Notice setting forth said amendment to the charter and a
summary of the changes to be effected by said amendment and stating that a
purpose of the meeting of the stockholders called to be held on December
13, 1989 would be to take action thereon, was given, as required by law, to
all stockholders entitled to vote thereon. The amendment to the charter of
the corporation as hereinabove set forth was approved by the stockholders
of the corporation at said meeting by the affirmative vote of a majority of
all the votes entitled to be cast thereon.

      FOURTH:  The amendment to the charter of the corporation as
hereinabove set forth has been duly advised by the board of directors and
duly approved by the stockholders of the corporation.





                                       2
<PAGE>



      IN WITNESS WHEREOF, Duff & Phelps Selected Utilities Inc., has caused
these articles to be signed in its name and on its behalf by its chairman
and attested by its secretary, on December 13, 1989.

                                 DUFF & PHELPS SELECTED UTILITIES INC.


                                 By /s/ Claire V. Hansen
                                    -----------------------------------
                                          Claire V. Hansen, Chairman

Attest:

/s/ Calvin J. Pedersen
- --------------------------
Calvin J. Pedersen, Secretary


      THE UNDERSIGNED, chairman of Duff & Phelps Selected Utilities Inc.,
who executed on behalf of said corporation the foregoing articles of
amendment, of which this certificate is made a part, hereby acknowledges,
in the name and on behalf of said corporation, the foregoing articles of
amendment to be the corporate act of said corporation and further certifies
that to the best of his knowledge, information and belief, the matters and
facts set forth therein with respect to the approval thereof are true in
all material respects, under the penalties of perjury.


                                 /s/ Claire V. Hansen
                                 ------------------------
                                 Claire V. Hansen





                                       3



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.7 CHARTER
<SEQUENCE>9
<FILENAME>ex-99a7.txt
<TEXT>




                                                         Exhibit a.7






                  DUFF & PHELPS SELECTED UTILITIES INC.


                           Articles of Amendment
                          ---------------------

      Duff & Phelps Selected Utilities Inc., a Maryland corporation having
its principal office in Chicago, Illinois (hereinafter called the
corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:

      FIRST:  The charter of the corporation, as heretofore amended, is
hereby further amended as follows:

      Article SECOND of the charter is hereby amended to read as follows:

           SECOND.  Name.  The name of the corporation is Duff & Phelps
Utilities Income Inc.

      SECOND: The board of directors of the corporation on August 23, 1990
duly adopted a resolution by unanimous written consent in which was set
forth the foregoing amendment to the charter, declaring that the said
amendment to the charter as proposed was advisable and directing that it be
submitted for consideration at the 1990 annual meeting of stockholders of
the corporation.

      THIRD: Notice setting forth said amendment to the charter and the
change to be effected by said amendment and stating that a purpose of the
meeting of the stockholders called to be held on October 17, 1990 would be
to take action thereon, was given, as required by law, to all stockholders
entitled to vote thereon. The amendment to the charter of the corporation
as hereinabove set forth was approved by the stockholders of the
corporation at said meeting by the affirmative vote of a majority of all
the votes entitled to be cast thereon.

      FOURTH:  The amendment to the charter of the corporation as
hereinabove set forth has been duly advised by the board of directors and
duly approved by the stockholders of the corporation.

      FIFTH:  This amendment does not increase the authorized stock of the
corporation.



<PAGE>



      SIXTH:  This amendment shall become effective on November 1, 1990.

      IN WITNESS WHEREOF, Duff & Phelps Selected Utilities Inc., has caused
these articles to be signed in its name and on its behalf by its chairman
and attested by its secretary, on October 17, 1990.

                                 DUFF & PHELPS SELECTED UTILITIES INC.


                                 By /s/ Claire V. Hansen
                                    -----------------------------------
                                          Claire V. Hansen, Chairman

Attest:

/s/ Calvin J. Pedersen
- -----------------------------
Calvin J. Pedersen, Secretary


           THE UNDERSIGNED, chairman of Duff & Phelps Selected Utilities
Inc., who executed on behalf of said corporation the foregoing articles of
amendment, of which this certificate is made a part, hereby acknowledges,
in the name and on behalf of said corporation, the foregoing articles of
amendment to be the corporate act of said corporation and further certifies
that to the best of his knowledge, information and belief, the matters and
facts set forth therein with respect to the approval thereof are true in
all material respects, under the penalties of perjury.


                                       /s/ Claire V. Hansen
                                       ----------------------
                                       Claire V. Hansen



                                       2



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.8 CHARTER
<SEQUENCE>10
<FILENAME>ex-99a8.txt
<TEXT>


                                                           Exhibit a.8



                   DUFF & PHELPS UTILITIES INCOME INC.

                           Articles of Amendment
                          ---------------------

      Duff & Phelps Utilities Income Inc., a Maryland corporation having
its principal office in Baltimore City, Maryland and its principal
executive office in Chicago, Illinois (the "Corporation"), hereby certifies
to the State Department of Assessments and Taxation of Maryland that:

      FIRST:The Corporation's Articles Supplementary creating Remarketed
Preferred Stock Series A, Series B, Series C, Series D and Series E are
hereby amended as follows:

           1.    Part I, Paragraph 1, Definitions, is amended by deleting
                 the definitions of "Deposit Securities," "Discounted
                 Value," "RP Basic Maintenance Amount" and "RP Basic
                 Maintenance Cure Date" and replacing them with the
                 following definitions:

                 "Deposit Securities" means cash, U.S. Government
                 Obligations and Short Term Money Market Instruments.
                 Except for purposes of determining compliance with either
                 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.

                 "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 that date. With respect to the calculation of the
                 Discounted Value of any Utility Bond included in the



<PAGE>




                 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. When calculating the aggregate
                 Discounted Value of the Corporation's Eligible Portfolio
                 Property for comparison with the Moody's RP Basic
                 Maintenance Amount, the Discount Factors Supplied by
                 Moody's shall be used; provided that, in making such
                 calculation, 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. When calculating the aggregate
                 Discounted Value of the Corporation's Eligible Portfolio
                 Property for comparison with the S&P Basic Maintenance
                 Amount, the Discount Factors Supplied by S&P shall be
                 used. Notwithstanding any other provision of these
                 Articles Supplementary, any Utility Bond that has a
                 remaining 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
                 thereof, 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.

                 "RP Basic Maintenance Amount" means the Moody's RP Basic
                 Maintenance Amount or the S&P RP Basic Maintenance Amount,
                 as the case may be.

                 "RP Basic Maintenance Cure Date," with respect to the
                 failure by the Corporation to maintain either 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
                 (seriatim and in the aggregate), and each RP Basic
                 Maintenance Amount.

           2.    Part I, Paragraph 1, Definitions, is further amended by
                 the addition thereto of the following definitions of
                 "Moody's RP Basic Maintenance Amount" and "S&P RP Basic
                 Maintenance Amount":

                 "Moody's 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


                                       2
<PAGE>




                 Other RP outstanding, (ii) to the extent not covered in
                 (i), 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) an
                 amount equal to the product of (x) three and (y) the
                 principal amount of the Corporation's loan from the Aid
                 Association for Lutherans then outstanding, (v) an amount
                 equal to the sum of (x) the amount of accrued but unpaid
                 interest on the principal amount of the Corporation's loan
                 from the Aid Association for Lutherans then outstanding
                 and (y) an amount equal to 70 days of additional accrued
                 interest on such loan at the then-current interest rate
                 borne by such loan, (vi) an amount equal to the product of
                 (x) three and (y) the aggregate principal amount of any
                 other then outstanding indebtedness of the Corporation for
                 money borrowed, (vii) an amount equal to the sum of (x)
                 the aggregate accrued but unpaid interest on the
                 indebtedness referred to in the foregoing clause (vi) and
                 (y) an amount equal to 70 days of additional accrued
                 interest on such indebtedness at the then-current interest
                 rate(s) borne by such indebtedness, (viii) the aggregate
                 Projected Dividend Amount, (ix) redemption premium, if
                 any, and (x) the greater of $200,000 or an amount equal to
                 projected expenses of the Corporation (including, without
                 limitation, fee and indemnification obligations of the
                 Corporation incurred in connection with any commercial
                 paper program undertaken by the Corporation or with any
                 credit facility related thereto) 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 Moody's RP Basic
                 Maintenance Amount if the Board of Directors determines
                 and Moody's advises the Corporation in writing that such
                 adjustment, modification, alteration or change will not
                 adversely affect its then-current rating on the RP.

                 "S&P 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), 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
                 (including, without limitation, fee and indemnification


                                       3
<PAGE>


                 obligations of the Corporation incurred in connection with
                 any commercial paper program undertaken by the Corporation
                 or with any credit facility related thereto) 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 S&P RP Basic
                 Maintenance Amount if the Board of Directors determines
                 and S&P advises the Corporation in writing that such
                 adjustment, modification, alteration or change will not
                 adversely affect its then-current rating on the RP.

           3.    Part I, Paragraph 3, Dividends, is amended by deleting
                 paragraph (i) thereof and replacing it with the following:

                 (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, privileges 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 either 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.


                                       4
<PAGE>




           4.    Part I, Paragraph 4, Redemption, is amended by deleting
                 paragraph (b) thereof and replacing it with the following:

                 (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 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 either 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 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 relevant 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 relevant 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.

           5.    Part I, Paragraph 8, Asset and Liquidity Coverage, is
                 amended by deleting the text of Paragraph (i) of Paragraph
                 (a), RP Basic Maintenance Amount, thereof and replacing it
                 with the following text:

                 (i) The Corporation shall maintain, on each Valuation
                 Date, (A) Eligible Portfolio Property having an aggregate
                 Discounted Value (calculated using the Discount Factors
                 Supplied by Moody's) at least equal to the Moody's RP
                 Basic Maintenance Amount and (B) Eligible Portfolio
                 Property having an aggregate Discounted Value (calculated
                 using the Discount Factors Supplied by S&P) at least equal
                 to the S&P RP Basic Maintenance Amount.


                                       5
<PAGE>



      SECOND:    The Corporation's Articles Supplementary creating
Remarketed Preferred Stock Series I are hereby amended as follows:

           1.    Part I, Paragraph 1, Definitions, is amended by deleting
                 the definitions of "Deposit Securities," "Discounted
                 Value," "RP Basic Maintenance Amount" and "RP Basic
                 Maintenance Cure Date" and replacing them with the
                 following definitions:

                 "Deposit Securities" means cash, U.S. Government
                 Obligations and Short Term Money Market Instruments.
                 Except for purposes of determining compliance with either
                 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.

                 "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 that 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. When calculating the aggregate
                 Discounted Value of the Corporation's Eligible Portfolio
                 Property for comparison with the Moody's RP Basic
                 Maintenance Amount, the Discount Factors Supplied by
                 Moody's shall be used; provided that, in making such
                 calculation, 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. When calculating the aggregate
                 Discounted Value of the Corporation's Eligible Portfolio
                 Property for comparison with the S&P Basic Maintenance
                 Amount, the Discount Factors Supplied by S&P shall be

                                       6
<PAGE>



                 used. Notwithstanding any other provision of these
                 Articles Supplementary, any Utility Bond that has a
                 remaining 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
                 thereof, 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.

                 "RP Basic Maintenance Amount" means the Moody's RP Basic
                 Maintenance Amount or the S&P RP Basic Maintenance Amount,
                 as the case may be.

                 "RP Basic Maintenance Cure Date," with respect to the
                 failure by the Corporation to maintain either 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
                 (seriatim and in the aggregate), and each RP Basic
                 Maintenance Amount.

           2.    Part I, Paragraph 1, Definitions, is further amended by
                 the addition thereto of the following definitions of
                 "Moody's RP Basic Maintenance Amount" and "S&P RP Basic
                 Maintenance Amount":

                 "Moody's 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), 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) an
                 amount equal to the product of (x) three and (y) the
                 principal amount of the Corporation's loan from the Aid
                 Association for Lutherans then outstanding, (v) an amount
                 equal to the sum of (x) the amount of accrued but unpaid
                 interest on the principal amount of the Corporation's loan
                 from the Aid Association for Lutherans then outstanding
                 and (y) an amount equal to 70 days of additional accrued
                 interest on such loan at the then-current interest rate
                 borne by such loan, (vi) an amount equal to the product of
                 (x) three and (y) the aggregate principal amount of any
                 other then outstanding indebtedness of the Corporation for
                 money borrowed, (vii) an amount equal to the sum of (x)
                 the aggregate accrued but unpaid interest on the
                 indebtedness referred to in the foregoing clause (vi) and
                 (y) an amount equal to 70 days of additional accrued


                                       7
<PAGE>



                 interest on such indebtedness at the then-current interest
                 rate(s) borne by such indebtedness, (viii) the aggregate
                 Projected Dividend Amount, (ix) redemption premium, if
                 any, and (x) the greater of $200,000 or an amount equal to
                 projected expenses of the Corporation (including, without
                 limitation, fee and indemnification obligations of the
                 Corporation incurred in connection with any commercial
                 paper program undertaken by the Corporation or with any
                 credit facility related thereto) 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 Moody's RP Basic
                 Maintenance Amount if the Board of Directors determines
                 and Moody's advises the Corporation in writing that such
                 adjustment, modification, alteration or change will not
                 adversely affect its then-current rating on the RP.

                 "S&P 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), 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
                 (including, without limitation, fee and indemnification
                 obligations of the Corporation incurred in connection with
                 any commercial paper program undertaken by the Corporation
                 or with any credit facility related thereto) 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 S&P RP Basic
                 Maintenance Amount if the Board of Directors determines
                 and S&P advises the Corporation in writing that such
                 adjustment, modification, alteration or change will not
                 adversely affect its then-current rating on the RP.

           3.    Part I, Paragraph 3, Dividends, is amended by deleting
                 paragraph (i) thereof and replacing it with the following:

                 (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


                                       8
<PAGE>



                 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, privileges 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 either 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.

           4.    Part I, Paragraph 4, Redemption, is amended by deleting
                 paragraph (b) thereof and replacing it with the following:

                 (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 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 either 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 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


                                       9
<PAGE>




                 satisfaction of the relevant 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 relevant 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.

           5.    Part I, Paragraph 8, Asset and Liquidity Coverage, is
                 amended by deleting the text of Paragraph (i) of Paragraph
                 (a), RP Basic Maintenance Amount, thereof and replacing it
                 with the following text:

                 (i) The Corporation shall maintain, on each Valuation
                 Date, (A) Eligible Portfolio Property having an aggregate
                 Discounted Value (calculated using the Discount Factors
                 Supplied by Moody's) at least equal to the Moody's RP
                 Basic Maintenance Amount and (B) Eligible Portfolio
                 Property having an aggregate Discounted Value (calculated
                 using the Discount Factors Supplied by S&P) at least equal
                 to the S&P RP Basic Maintenance Amount.

      THIRD:     The amendments as herein above set forth have been duly
advised by the Board of Directors of the Corporation and duly approved by
the Corporation's stockholders.

      FOURTH:    These amendments do not increase the authorized stock of
the Corporation.

      FIFTH:     These amendments shall become effective as of the time that
the State Department of Assessments and Taxation of Maryland accepts these
Articles of Amendment for record.




                                       10
<PAGE>



      IN WITNESS WHEREOF, Duff & Phelps Utilities Income Inc. has caused
these Articles of Amendment to be signed in its name and on its behalf by
its chairman and attested by its secretary on this 30th day of November,
1993.

                                       Duff & Phelps Utilities Income Inc.


                                       By: /s/ Claire V. Hansen
                                           ------------------------------
                                                Claire V. Hansen
                                                Chairman
ATTEST:

/s/ Calvin J. Pedersen
- -------------------------
Calvin J. Pedersen
Secretary

      THE UNDERSIGNED, chairman of Duff & Phelps Utilities Income Inc., who
executed on behalf of said corporation the foregoing Articles of Amendment,
of which this certificate is made a part, hereby acknowledges, in the name
and on the behalf of said corporation, the foregoing Articles of Amendment
to be the corporate act of said corporation and further certifies that to
the best of his knowledge, information and belief, the matters and facts
set forth therein with respect to the authorization and approval thereof
are true in all material respects, under the penalties of perjury.


                                       /s/ Claire V. Hansen
                                       ----------------------------
                                       Claire V. Hansen

                                       11





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A.9 CHARTER
<SEQUENCE>11
<FILENAME>exhiba9.txt
<TEXT>
                                                                   Exhibit a.9



                      DUFF & PHELPS UTILITIES INCOME INC.

                             Articles of Amendment

     Duff & Phelps Utilities Income Inc., a Maryland corporation having its
principal office in Baltimore City, Maryland (hereinafter called the
corporation), hereby certifies to the State Department of Assessments and
Taxation of Maryland, that:

     FIRST: The charter of the corporation, as heretofore amended, is hereby
further amended as follows:

         Article SECOND of the charter is hereby amended to read as follows

               SECOND. Name. The name of the corporation is DNP Select Income
               Fund Inc.

     SECOND: The foregoing amendment was approved by a majority of the entire
board of directors of the corporation at a regular meeting held on February
22, 2002 and such amendment is limited to a change expressly authorized by
Section 2-605 of the Maryland General Corporation Law to be made without
action by the stockholders of the corporation.

     THIRD: This amendment does not increase the authorized stock of the
corporation.

     FOURTH: This amendment shall become effective at 5:00 p.m., Eastern Time,
on April 23, 2002.

     IN WITNESS WHEREOF, Duff & Phelps Utilities Income Inc., has caused these
articles to be signed in its name and on its behalf by its president and chief
executive officer and attested by its secretary, on April 9th, 2002.

                                  DUFF & PHELPS UTILITIES INCOME INC.


                                  By   /s/ Nathan I. Partain
                                      ----------------------------------------
                                       Nathan I. Partain
                                       President and Chief Executive Officer



Attest:    /s/ T. Brooks Beittel
           --------------------------------------------
           T. Brooks Beittel, Secretary


<PAGE>



     THE UNDERSIGNED, president and chief executive officer of Duff & Phelps
Utilities Income Inc., who executed on behalf of said corporation the
foregoing articles of amendment, of which this certificate is made a part,
hereby acknowledges, in the name and on behalf of said corporation, the
foregoing articles of amendment to be the corporate act of said corporation
and further certifies that to the best of his knowledge, information and
belief, the matters and facts set forth therein with respect to the approval
thereof are true in all material respects, under the penalties of perjury.

                                /s/ Nathan I. Partain
                                ---------------------------------
                                Nathan I. Partain
















                                     2


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.B BYLAWS
<SEQUENCE>12
<FILENAME>exhibitb.txt
<TEXT>

                                                                    Exhibit b



                      DUFF & PHELPS UTILITIES INCOME INC.

                                    BYLAWS

                     (as amended through October 18, 2001)


                                  ARTICLE I

                                   OFFICES

     Section 1.01. Principal office. The principal office of the corporation
in the State of Maryland shall be located in the City of Baltimore.

     Section 1.02. Other offices. The corporation may also have offices at
such other places both within and without the State of Maryland as the board
of directors may from time to time determine or the business of the
corporation may require.

                                  ARTICLE II

                            MEETING OF STOCKHOLDERS

     Section 2.01. Place of meetings. All meetings of the stockholders shall
be held at such place in the United States as shall be designated from time to
time by the board of directors.

     Section 2.02. Annual meeting. Beginning with the annual meeting of
stockholders to be held in 1990, the annual meeting of stockholders shall be
held on the third Wednesday of April or at such date and time within the month
of April of each year as shall be designated from time to time by the board of
directors and stated in the notice of the meeting, at which they shall elect a
board of directors and transact such other business as may properly be brought
before the meeting.

     Section 2.03. Special meetings. Special meetings of stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
charter of the corporation, may be called at any time by the chairman, the
president or the board of directors. Special meetings of stockholders shall be
called by the secretary upon the written request of stockholders entitled to
cast at least 25 percent of all the votes entitled to be cast at such meeting,
provided that (a) such request shall state the purpose or purposes of the
meeting and the matters proposed to be acted on at it; and (b) the
stockholders requesting the meeting shall have paid to the corporation the
reasonably estimated cost of preparing and mailing the notice thereof, which
the secretary shall determine and specify to such stockholders. Upon payment
of these costs to the corporation, the secretary shall notify each stockholder
entitled to notice of the meeting. Unless requested by stockholders entitled
to cast a majority of all the votes entitled to be cast at the meeting, a
special meeting need not be called to consider any matter which is
substantially the same as a matter voted on at any special meeting of
stockholders held during the preceding twelve months.



                                     1
<PAGE>

     Section 2.04. Stockholders entitled to vote; number of votes. If a record
date has been fixed for the determination of stockholders entitled to notice
of or to vote at any meeting of stockholders, each stockholder of the
corporation shall be entitled to vote, in person or by proxy, each share of
stock (or fraction thereof) registered in his name on the books of the
corporation outstanding at the close of business on such record date, with one
vote (or fraction of a vote) for each share (or fraction thereof) so
outstanding.

     Section 2.05. Notice of meetings. Written notice of each meeting of
stockholders stating the place, date and hour of the meeting and, in the case
of a special meeting or if otherwise required by law, the purpose or purposes
for which the meeting is called, shall be given not less than 10 nor more than
90 days before the date of the meeting, to each stockholder entitled to vote
at such meeting.

     Section 2.06. Quorum; adjournment. The holders of a majority of the stock
entitled to vote at a meeting of stockholders, present in person or
represented by proxy, shall constitute a quorum at the meeting for the
transaction of business except as otherwise provided by statute or by the
charter of the corporation. If, however, such quorum shall not be present or
represented at any meeting of stockholders, the stockholders entitled to vote
thereat present in person or represented by proxy shall have the power to
adjourn the meeting from time to time, without notice other than announcement
at the meeting, until a quorum shall be present or represented. At any
adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting as
originally notified. If the adjourned meeting is more than 120 days after the
original record date, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder entitled to vote at the meeting.

     Section 2.07. Voting. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in
person or represented by proxy and voting on the question shall decide any
question brought before such meeting, unless the question is one upon which,
by express provision of any statute or the charter of the corporation or these
bylaws, a different vote is required, in which case such express provision
shall govern and control the decision of such question.

     Section 2.08. Proxies. No proxy shall be valid more than eleven months
after its date, unless it provides for a longer period.

     Section 2.09. Stock ledger. The secretary of the corporation shall cause
an original or duplicate stock ledger to be maintained at the office of the
corporation's transfer agent.

                                 ARTICLE III

                           DIRECTORS AND COMMITTEES

     Section 3.01. Function and powers. The business and affairs of the
corporation shall be managed under the direction of its board of directors.
All powers of the corporation may be exercised by or under the authority of
the board of directors except as conferred on or reserved to the stockholders
by statute or the charter of the corporation or these bylaws.



                                     2
<PAGE>

     Section 3.02. Number. The board of directors shall consist of 3
directors, which number may be increased or decreased by a resolution of a
majority of the entire board of directors, provided that the number of
directors shall not be less than 3 or more than 15.

     Section 3.03. Vacancies. Any vacancy occurring in the board of directors
for any cause other than by reason of an increase in the number of directors
may be filled by a majority of the remaining members of the board of
directors, although such majority is less than a quorum; provided, however,
that no vacancy shall be so filled unless immediately thereafter at least
two-thirds of the directors then holding office shall have been elected to
such office by the stockholders, and provided further that if at any time
(other than prior to the first annual meeting of stockholders) less than a
majority of the directors holding office at that time were elected by the
stockholders, a meeting of the stockholders shall be held promptly and in any
event within 60 days for the purpose of electing directors to fill any
existing vacancy in the board of directors, unless the Securities and Exchange
Commission shall by order extend such period under the authority granted by
section 16(a) of the Investment Company Act of 1940. A director elected to
fill a vacancy shall be elected to hold office until the next annual meeting
of stockholders or until his successor is elected and qualifies.

     Section 3.04. Annual and regular meetings. The first meeting of each
newly elected board of directors shall be held immediately after the
adjournment of the annual meeting of stockholders, or at such other time or
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by any director who is not present at the meeting. The
board of directors from time to time may provide for the holding of regular
meetings of the board and fix their time and place.

     Section 3.05. Special meetings. Special meetings of the board may be
called by the chairman on three days' notice to each director, either
personally or by mail or by telegram. Special meetings shall be called by the
chairman or secretary in like manner and on like notice on the written request
of a majority of the directors or a majority of the members of the executive
committee.

     Section 3.06. Quorum and voting. At all meetings of the board the act of
a majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or the charter of the corporation or these
bylaws. If a quorum shall not be present at any meeting of the board of
directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.

     Section 3.07. Telephone meetings. Members of the board of directors or
any committee thereof may participate in a meeting of such board or committee
by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time, and participation by such means shall constitute presence in
person at the meeting, except as may be otherwise specifically provided by
statute or the charter of the corporation or these bylaws.



                                     3
<PAGE>

     Section 3.08. Action without meeting. Unless otherwise restricted by
statute or the charter of the corporation or these bylaws, any action required
or permitted to be taken at any meeting of the board of directors or of any
committee thereof may be taken without a meeting if a unanimous written
consent which sets forth the action is signed by each member of the board or
committee, as the case may be, and filed with the minutes of proceedings of
the board or committee.

     Section 3.09. Committees. The board of directors may, by resolution
passed by a majority of the entire board, designate an executive committee and
other committees, each committee to consist of two or more directors of the
corporation. In the absence of a member of a committee, the members thereof
present at any meeting, whether or not they constitute a quorum, may appoint
another member of the board of directors to act at the meeting in the place of
any such absent member.

     Section 3.10. Executive committee. Unless otherwise provided by
resolution of the board of directors, the executive committee shall have and
may exercise all powers of the board of directors in the management of the
business and affairs of the corporation that may lawfully be exercised by an
executive committee, except the power to: (i) declare dividends or
distributions on stock; (ii) issue stock; (iii) recommend to the stockholders
any action which requires stockholder approval; (iv) amend the bylaws; or (v)
approve any merger or share exchange which does not require stockholder
approval.

     Section 3.11. Other committees. To the extent provided by resolution of
the board of directors, other committees of the board shall have and may
exercise any of the powers that may lawfully be granted to the executive
committee.

     Section 3.12. Minutes of committee meetings. Each committee shall keep
regular minutes of its meetings and report the same to the board of directors
when required.

     Section 3.13. Expenses and compensation of directors. The directors may
be paid their expenses, if any, of attendance at each meeting of the board of
directors and may be paid a fixed sum for attendance at each meeting of the
board of directors or a stated salary as director, or both. No such payment
shall preclude any director from serving the corporation in any other capacity
and receiving compensation therefor. Members of special or standing committees
may be allowed like compensation for attending committee meetings.

     Section 3.14. Retirement of directors. Effective with the elections of
directors to be held at the annual meeting of stockholders in 1992, no person
shall stand for election or reelection as a director of the Fund if that
person would be 75 years old or older at the date of the proxy statement for
the meeting of stockholders at which such election would take place, unless
such person's candidacy shall have been approved by a unanimous vote of all of
the directors then in office (other than any director whose candidacy is being
approved).

     Section 3.15. Qualification of directors. Until November 1, 1998, at
least 75% of the members of the board of directors shall not be interested
persons (as defined in section 2(a)(19) of the Investment Company Act of 1940)
of Duff & Phelps Investment Management Co., the corporation's investment
adviser.





                                     4
<PAGE>

                                  ARTICLE IV

                                    NOTICES

     Section 4.01. Type of notice. Whenever, under the provision of any
statute or the charter of the corporation or these bylaws, notice is required
to be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed
to such director or stockholder, at his address as it appears on the records
of the corporation, with postage thereon prepaid, and such notice shall be
deemed to be given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by telegram.

     Section 4.02. Waiver of notice. Whenever the provisions of any statute or
the charter of the corporation or these bylaws require notice of the time,
place or purpose of a meeting of the board of directors or a committee of the
board, or of stockholders, each person who is entitled to the notice waives
notice if: (a) before or after the meeting he signs a waiver of notice which
is filed with the records of the meeting; or (b) he is present at the meeting
or, in the case of a stockholders' meeting, is represented by proxy.

                                  ARTICLE V

                                   OFFICERS

     Section 5.01. Offices. The officers of the corporation shall be elected
by the board of directors and shall be a chairman, a president, one or more
vice presidents, a secretary and a treasurer. The board of directors may also
appoint one or more assistant secretaries and assistant treasurers. Any number
of offices may be held by the same person, unless the charter of the
corporation or these bylaws otherwise provide, except that no one may serve
concurrently as both president and vice president. A person who holds more
than one office may not act in more than one capacity to execute, acknowledge
or verify an instrument required by law to be executed, acknowledged or
verified by more than one officer.

     Section 5.02. Annual election. The board of directors at its first
meeting after each annual meeting of stockholders shall elect a chairman, a
president, one or more vice presidents, a secretary and a treasurer.

     Section 5.03. Other officers and agents. The board of directors may
appoint such other officers and agents as it shall deem necessary, who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the board.

     Section 5.04. Remuneration. The salaries or other remuneration, if any,
of all officers of the corporation shall be fixed by the board of directors.



                                     5
<PAGE>

     Section 5.05. Term of office; removal; vacancies. The officers of the
corporation shall hold office until their respective successors are chosen and
qualify. Any officer elected or appointed by the board of directors may be
removed at any time by the affirmative vote of a majority of the board of
directors, when the board in its judgment finds that the best interests of the
corporation will be served by such action. The removal of an officer or agent
does not prejudice any of his contract rights. Any vacancy occurring in any
office of the corporation shall be filled by the board of directors.

     Section 5.06. The chairman. The chairman, who shall be chosen from among
the directors of the corporation, shall preside at all meetings of the board
of directors and stockholders. He shall perform such other duties and have
such other powers as the board of directors may from time to time prescribe.

     Section 5.07. The president and chief executive officer. The president
and chief executive officer shall be the chief executive officer of the
corporation, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect. In the absence of the chairman or in the
event of his inability or refusal to act, the president shall preside at all
meetings of the board of directors and stockholders. The president may execute
bonds, mortgages and other contracts requiring a seal, under the seal of the
corporation, except where required or permitted by law to be otherwise signed
and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent
of the corporation.

     Section 5.08. The vice presidents. In the absence of the president or in
the event of his inability or refusal to act, the vice president (or in the
event there be more than one vice president, the vice presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting shall
have all the powers of and be subject to all the restrictions upon the
president. The vice presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.

     Section 5.09. The secretary. The secretary: (a) shall attend all meetings
of the board of directors and all meetings of stockholders and record all the
proceedings of the meetings in a book to be kept for that purpose and shall
perform like duties for the standing committees when required; (b) shall give,
or cause to be given, notice of all meetings of the stockholders and special
meetings of the board of directors, and shall perform such other duties as may
be prescribed by the board of directors, the chairman or the president, under
whose supervision the secretary shall be; and (c) shall have custody of the
corporate seal of the corporation and shall have authority to affix the same
to any instrument requiring it, and when so affixed it may be attested by his
signature.

     Section 5.10. The assistant secretary. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by
the board of directors (or if there be no such determination, then in the
order of their election), shall, in the absence of the secretary or in the
event of his inability or refusal to act, perform the duties and exercise the
powers of the secretary and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.



                                     6
<PAGE>

     Section 5.11. The treasurer. The treasurer: (a) shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
corporation; (b) shall deposit with the corporation's custodian all moneys and
other valuable effects in the name and to the credit of the corporation; (c)
shall direct the custodian to make such disbursements of the funds of the
corporation as may be ordered by the board of directors, taking proper
vouchers for such disbursements; and (d) shall render to the president and the
board of directors, at its regular meetings, or when the board of directors so
requires, an account of all his transactions as treasurer and financial
statements of the corporation.

     Section 5.12. The assistant treasurer. The assistant treasurer, or if
there shall be more than one, the assistant treasurers in the order determined
by the board of directors (or if there be no such determination, then in the
order of their election), shall, in the absence of the treasurer or in the
event of his inability or refusal to act, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.

                                  ARTICLE VI

                                 CAPITAL STOCK

     Section 6.01. Certificates of stock. Every holder of stock in the
corporation shall be entitled, upon request, to have a certificate or
certificates, signed by, or in the name of the corporation by the chairman,
the president or a vice president and the treasurer, an assistant treasurer,
the secretary or an assistant secretary of the corporation, certifying the
number of full shares owned by him in the corporation. No certificates shall
be issued for fractional shares. Where a certificate is countersigned by a
transfer agent other than the corporation or its employee, any other signature
on the certificate may be facsimile. In case any officer or transfer agent who
has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer or transfer agent before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer or transfer agent at the date of issue.

     Section 6.02. Lost certificates. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such
manner as it shall require and/or to give the corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost, stolen
or destroyed. The issuance of a new certificate under this section does not
constitute an overissue of the shares it represents.

     Section 6.03. Transfers of stock. The shares of stock of the corporation
shall be transferable on the books of the corporation at the request of the
record holder thereof in person or by a duly authorized attorney, upon
presentation to the corporation or its transfer agent of a duly executed
assignment or authority to transfer, or power evidence of succession, and, if
the shares are represented by a certificate, a duly endorsed certificate or
certificates of stock surrendered for cancellation, and with such proof of the
authenticity of the signatures as the corporation or its transfer agent may
reasonably require. The transfer shall be recorded on the books of the
corporation, the old certificates, if any, shall be cancelled, and the new
record holder, upon request, shall be entitled to a new certificate or
certificates.



                                     7
<PAGE>

     Section 6.04. Fixing of record date. The board of directors may fix in
advance a date as a record date for the determination of the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or to receive payment of any dividend or other distribution
or allotment of any rights, or to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other
lawful action, provided that such record date shall not be a date more than 90
days, and in the case of a meeting of stockholders not less than 10 days,
prior to the date on which the particular action requiring such determination
of stockholders is to be taken. In such case only such stockholders as shall
be stockholders of record on the record date so fixed shall be entitled to
such notice of, and to vote at, such meeting or adjournment, or to give such
consent, or to receive payment of such dividend or other distribution, or to
receive such allotment of rights, or to exercise such rights, or to take such
other action, as the case may be, notwithstanding any transfer of any shares
on the books of the corporation after any such record date.

     Section 6.05. Registered stockholders. The corporation shall be entitled
to treat the holder of record of shares as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to
or interest in such shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by
statute.

                                 ARTICLE VII

                                   CUSTODIAN

     Section 7.01. Qualifications. The corporation shall at all times employ,
pursuant to a written contract, a bank or trust company having an aggregate
capital, surplus and undivided profits (as shown in its last published report)
of at least $2,000,000 as custodian to hold the funds and securities of the
corporation.

     Section 7.02. Contract. Such contract shall be upon such terms and
conditions and may provide for such compensation as the board of directors
deems necessary or appropriate, provided such contract shall further provide
that the custodian shall deliver securities owned by the corporation only upon
sale of such securities for the account of the corporation and receipt of
payment therefor by the custodian or when such securities may be called,
redeemed, retired or otherwise become payable. Such limitation shall not,
however, prevent:




                                     8
<PAGE>

          (a) the delivery of securities for examination to the broker selling
     the same in accord with the "street delivery" custom whereby such
     securities are delivered to such broker in exchange for a delivery
     receipt exchanged on the same day for an uncertified check of such broker
     to be presented on the same day for certification;

          (b) the delivery of securities of an issuer in exchange for or
     conversion into other securities alone or cash and other securities
     pursuant to any plan of merger, consolidation, reorganization,
     recapitalization or readjustment of the securities of such issuer;

          (c) the conversion by the custodian of securities owned by the
     corporation pursuant to the provisions of such securities into other
     securities;

          (d) the surrender by the custodian of warrants, rights or similar
     securities owned by the corporation in the exercise of such warrants,
     rights or similar securities, or the surrender of interim receipts or
     temporary securities for definitive securities;

          (e) the delivery of securities as collateral on borrowing effected
     by the corporation;

          (f) the delivery of securities owned by the corporation as a
     redemption in kind of securities issued by the corporation.

The custodian shall deliver funds of the corporation only upon the purchase of
securities for the portfolio of the corporation and the delivery of such
securities to the custodian, but such limitation shall not prevent the release
of funds by the custodian for payment of interest, dividend disbursements,
taxes and management fees, for payments in connection with the conversion,
exchange or surrender of securities owned by the corporation as set forth in
sub-paragraphs (b), (c) and (d) above and for operating expenses of the
corporation.

     Section 7.03. Termination of contract. The contract of employment of the
custodian shall be terminable by either party on 60 days' written notice to
the other party. Upon any termination, the board of directors shall use its
best efforts to obtain a successor custodian, but lacking success in the
appointment of a successor custodian, the question of whether the corporation
shall be liquidated or shall function without a custodian shall be submitted
to the stockholders before delivery of any funds or securities of the
corporation to any person other than a successor custodian, including a
temporary successor selected by the retiring custodian. If a successor
custodian is found, the retiring custodian shall deliver funds and securities
owned by the corporation directly to the successor custodian.

     Section 7.04. Agents of custodian. The provisions of any other selection
of these bylaws to the contrary notwithstanding, any contract of employment of
a custodian to hold the funds and securities of the corporation may authorize
the custodian, upon approval of the board of directors, to appoint other banks
or trust companies meeting the requirements of this article, domestic and
foreign (including domestic and foreign branches), to perform all or a part of
the duties of the custodian under its contract with the corporation. In the
case of foreign banks, no authorization or appointment providing for the
holding of funds or securities of the corporation (other than in connection
with the clearing of transactions or exchanges of securities) shall become
effective unless permitted by an appropriate order, rule or written advice of
the Securities and Exchange Commission.



                                     9
<PAGE>

     Section 7.05. Negotiable instruments. Except as otherwise authorized by
the board of directors, all checks and drafts for the payment of money shall
be signed in the name of the corporation by the custodian, and all
requisitions or orders for the payment of money by the custodian or for the
issue of checks and drafts therefor, all promissory notes, all assignments of
shares or securities standing in the name of the corporation, and all
requisitions or orders for the assignment of shares or securities standing in
the name of the custodian or its nominee, or for the execution of powers to
transfer the same, shall be signed in the name of the corporation by not less
than two of its officers. Promissory notes, checks or drafts payable to the
corporation may be endorsed only to the order of the custodian or its agent.

                                 ARTICLE VIII
                              GENERAL PROVISIONS



Section 8.01. Dividends.


        (a)  The board of directors, from time to time as they may deem
advisable, may declare and pay dividends in cash or other property of the
corporation, out of any source available for dividends, to the stockholders
according to their respective rights and interests and in accordance with the
applicable provisions of the charter of the corporation.

        (b)  The board of directors may prescribe from time to time that
dividends declared are payable at the election of any of the stockholders,
either in
cash or in shares of the corporation.

        (c)  The board of directors shall cause any dividend payment to be
accompanied by a written statement if paid wholly or partly from any source
other than:

             (i) the corporation's accumulated undistributed net income
(determined in accordance with generally accepted accounting principles and
the rules and regulations of the Securities and Exchange Commission then in
effect) and not including profits or losses realized upon the sale of
securities or other properties; or

             (ii) the corporation's net income so determined for the current
or preceding fiscal year.

Such statement shall adequately disclose the source or sources of such payment
and the basis of calculation, and shall be in such form as the Securities and
Exchange Commission may prescribe.

     Section 8.02. Fiscal year. The fiscal year of the corporation shall end
on December 31.

     Section 8.03. Seal. The corporate seal shall have inscribed thereon the
name of the corporation and the words "Corporate Seal, Maryland". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or by placing the word "seal" adjacent to the signature of the
authorized officer of the corporation. Any officer or director of the
corporation shall have authority to affix the corporate seal of the
corporation to any document requiring the same.



                                    10
<PAGE>

                                  ARTICLE IX

                                  AMENDMENTS

     Section 9.01. General. Except as provided in section 9.02, these bylaws
may be altered, amended or repealed, and new bylaws may be adopted solely by
the board of directors, at any meeting of the board of directors.

     Section 9.02. Amended by stockholders only. Sections 2.06 and 2.07 of
article II, sections 3.04 and 3.15 of article III, article VII, and
sub-section 8.01(c) of article VIII of these bylaws may be altered, amended or
repealed only with the approval of the holders of a "majority of the
outstanding voting securities" of the corporation, as that term is defined in
section 2(a)(40) of the Investment Company Act of 1940.

                                  ARTICLE X

                CERTAIN PROVISIONS RELATING TO FITCH IBCA, INC.

     Section 10.01. General Definitions. Capitalized terms used in this
Article X but not specifically defined herein shall have the respective
meanings assigned to them in the Articles Supplementary creating Remarketed
Preferred Stock Series A, Series B, Series C, Series D and Series E, as
amended (the "Articles Supplementary"), which definitions are hereby
incorporated by reference herein. The following terms shall have the meanings
set forth below for purposes of this Article X:

               "Corporate Bonds" means debt securities issued by a business
          entity.

               "Discount Factor" means Discount Factor Supplied by Fitch.

               "Discount Factor Supplied by Fitch" 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   Corporate Bonds with a remaining term to maturity of
                   less than or equal to 2 years...........................1.16
          Type I   Corporate Bonds with a remaining term to maturity of
                   more than 2 years, but less than or equal to 4 years....1.26
          Type I   Corporate Bonds with a remaining term to maturity of
                   more than 4 years, but less than 7 years................1.40




                                    11
<PAGE>

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

          Type I   Corporate Bonds with a remaining term to
                   maturity of more than 7 years, but less than
                   or equal to 12 years....................................1.44
          Type I   Corporate Bonds with a remaining term to
                   maturity of more than 12 years, but less than
                   or equal to 25 years....................................1.48
          Type I   Corporate Bonds with a remaining term to
                   maturity of more than 25 years, but less
                   than or equal to 30 years...............................1.52
          Type I   Corporate Bonds with a remaining term to
                   maturity of more than 30 years, but less
                   than or equal to 50 years...............................1.60
          Type II  Corporate Bonds with a remaining term to
                   maturity of less than or equal to 2 years...............1.25
          Type II  Corporate Bonds with a remaining term to
                   maturity of more than 2 years, but less than
                   or equal to 4 years.....................................1.26
          Type II  Corporate Bonds with a remaining term to
                   maturity of more than 4 years, but less
                   than or equal to 7 years................................1.43
          Type II  Corporate Bonds with a remaining term to
                   maturity of more than 7 years, but less
                   than or equal to 12 years...............................1.44
          Type II  Corporate Bonds with a remaining term to
                   maturity of more than 12 years, but less
                   than or equal to 25 years...............................1.51
          Type II  Corporate Bonds with a remaining term to
                   maturity of more than 25 years, but less
                   than or equal to 30 years...............................1.56
          Type II  Corporate Bonds with a remaining term to
                   maturity of more than 30 years, but less than
                   or equal to 50 years....................................1.65
          Type III Corporate Bonds with a remaining term to
                   maturity of more than or equal to 2 years...............1.25
          Type III Corporate Bonds with a remaining term to
                   maturity of more than 2 years, but less than
                   or equal to 4 years.....................................1.29
          Type III Corporate Bonds with a remaining term to
                   maturity of more than 4 years, but less than
                   or equal to 7 years.....................................1.46
          Type III Corporate Bonds with a remaining term to
                   maturity of more than 7 years, but less
                   than or equal to 12 years...............................1.50
          Type III Corporate Bonds with a remaining term to
                   maturity of more than 12 years, but less than
                   or equal to 25 years....................................1.55
          Type III Corporate Bonds with a remaining term to
                   maturity of more than 25 years, but less than
                   or equal to 30 years....................................1.60
          Type III Corporate Bonds with a remaining term to
                   maturity of more than 30 years, but less than
                   or equal to 50 years....................................1.70


                                    12
<PAGE>

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

          Type IV  Corporate Bonds with a remaining term to
                   maturity of less than or equal to 2 years.................27
          Type IV  Corporate Bonds with a remaining term to
                   maturity of more than 2 years, but less than
                   or equal to 4 years.....................................1.32
          Type IV  Corporate Bonds with a remaining term to
                   maturity of more than 4 years, but less than
                   or equal to 7 years.....................................1.52
          Type IV  Corporate Bonds with a remaining term to
                   maturity of more than 7 years, but less than
                   or equal to 12 years....................................1.57
          Type IV  Corporate Bonds with a remaining term to
                   maturity of more than 12 years, but less than
                   or equal to 25 years....................................1.63
          Type IV  Corporate Bonds with a remaining term to
                   maturity of more than 25 years, but less than
                   or equal to 30 years....................................1.69
          Type IV  Corporate Bonds with a remaining term to
                   maturity of more than 30 years, but less than
                   or equal to 50 years....................................1.80

          Stocks
          ------
          Utility Stock.....................................................2.00
          Utility Stocks (ADRs).............................................2.50
          Investment Grade REIT Stock.......................................2.15
          Below Investment Grade or Unrated REIT Stock,
                capitalization greater than $500,000,000. ..................2.50
          Below Investment Grade or Unrated REIT Stock,
                capitalization less than $500,000,000.......................3.00
          Preferred Stock rated AAA by Fitch................................1.66
          Preferred Stock rated AA by Fitch.................................1.68
          Preferred Stock rated A by Fitch..................................1.71
          Preferred Stock rated BBB by Fitch................................1.77

          FNMA, FHLMC or GNMA Certificates
          --------------------------------
          FNMA or FHLMC with 6.0% interest rate.............................1.70
          FNMA or FHLMC with 7.0% interest rate.............................1.65
          FNMA or FHLMC with 8.0% interest rate.............................1.59
          FNMA or FHLMC with 9.0% interest rate.............................1.52
          FNMA or FHLMC with 10.0% interest rate............................1.40



                                    13
<PAGE>

          GNMA with 6% interest rate........................................1.80
          GNMA with 7% interest rate........................................1.70
          GNMA with 8% interest rate........................................1.64
          GNMA with 9% interest rate........................................1.57
          GNMA with 10.0% interest1.45

          U.S. Government Obligations having a remaining term to
                  maturity of up to one year................................1.06
          U.S. Government Obligations having a remaining term to
                  maturity of more than one year but not more
                  than two years............................................1.11
          U. S. Government Obligations having a remaining term to
                  maturity of more than two years but not more
                  than five years...........................................1.20
          U. S. Government Obligations having a remaining term to
                  maturity of more than five years but not more
                  than fifteen years........................................1.45
          U. S. Government Obligations having a remaining term to
                  maturity of more than fifteen years but not more
                  than twenty-five years....................................1.65
          U. S. Government Obligations having a remaining term to
                  maturity of more than twenty-five years but not
                  more than forty years.....................................1.80
          Cash held in segregated custody account at an
                  F-1 + Institution.........................................1.00
          Cash held in segregated custody account at an F-1 Institution.....1.00

          -----------------------

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

                    Notwithstanding the foregoing, for so long as is required
               by Fitch to maintain its then-current credit rating of the
               Original RP or Serial RP, the Discount Factor Supplied by
               Fitch 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 current Discount Factor
               provided by Fitch to the corporation in writing for the
               purpose of such determination.

               "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
         Fitch, 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 that
         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. When calculating the aggregate


                                    14
<PAGE>

         Discounted Value of the corporation's Eligible Portfolio Property for
         comparison with the Fitch RP Basic Maintenance Amount, the Discount
         Factors Supplied by Fitch shall be used. Notwithstanding any other
         provision of the Articles Supplementary or these bylaws, any Utility
         Bond that has a remaining maturity of more than 30 years, and any
         asset as to which there is no Discount Factor Supplied by Fitch
         either in the Articles Supplementary, in an amendment or supplement
         thereof or in this Article X, 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 Fitch of zero.

               "F-1+ Institution" means a financial institution that has a
          debt rating of F-1+ by Fitch.

               "Fitch" means Fitch IBCA, Inc.

               "Fitch 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), the aggregate amount of accumulated
          but unpaid cash dividends with respect to the shares of RP
          outstanding and shares of Other RP outstanding, (iii) the aggregate
          principal amount of, and an amount equal to accrued but unpaid
          interest on any Notes outstanding, (iv) the aggregate Projected
          Dividend Amount, and (v) an amount equal to the projected expenses
          of the corporation (including, without limitation, fee and
          indemnification obligations of the corporation incurred in
          connection with any commercial paper program undertaken by the
          corporation or with any credit facility related thereto) 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 Fitch RP Basic Maintenance Amount if
          the Board of Directors determines and Fitch advises the corporation
          in writing that such adjustment, modification, alteration or change
          will not adversely affect its then-current rating on the RP.

          "RP Basic Maintenance Amount" means the Fitch RP Basic Maintenance
     Amount.

     Section 10.02. Eligible Assets. The following assets, specifically
Preferred Stock, Type I Corporate Bonds, Type II Corporate Bonds, Type III
Corporate Bonds, and Type IV Corporate Bonds, having met the requirements set
forth in the definition of "Other Permitted Securities" in the Articles
Supplementary, shall be included as Other Permitted Securities for purposes of
determining maintenance of the Fitch RP Basic Maintenance Amount.

          "Below Investment Grade REIT Stock" means an equity security issued
     by a REIT rated BB+ or lower by Fitch.

          "Preferred Stock" means securities of an issuer senior in preference
     to the common equity of the issuer.



                                    15
<PAGE>

          "Type I Corporate Bonds" as of any date means Corporate Bonds rated
     AAA by Fitch.

          "Type II Corporate Bonds" as of any date means Corporate Bonds rated
     AA- to AA+ by Fitch.

          "Type III Corporate Bonds" as of any date means Corporate Bonds
     rated A- to A+ by Fitch.

               "Type IV Corporate Bonds" as of any date means Corporate Bonds
          rated BBB- to BBB+ by Fitch.

          "Unrated REIT Stock" shall mean an equity security issued by a REIT
     that is not rated by the Ratings Agencies or by Fitch.

     Section 10.03. RP Basic Maintenance Amount. (a) The corporation shall
maintain, on each Valuation Date, Eligible Portfolio Property having an
aggregate Discounted Value at least equal to the RP Basic Maintenance Amount.

     (b) 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 10.03(b) 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.

     (c) 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 10.03(b) 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 the Articles Supplementary the assets of the corporation
which constitute Eligible Portfolio Property at such Quarterly Valuation Date,
(C) that, in such Report, the corporation determined in accordance with the
Articles Supplementary whether 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
Fitch 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 Fitch IBCA Ratings Book (in the
event such information does not agree or such information is not listed in the
Fitch IBCA Ratings Book, the Independent Accountant will inquire of Fitch what
such information is and provide a listing in their letter of such difference),



                                    16
<PAGE>

and (E) 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 10.03(c) 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.

                                  ARTICLE XI

             CERTAIN PROVISIONS RELATING TO RATINGS ORGANIZATIONS

     Section 11.01. General Definitions. Capitalized terms used in this
Article XI but not specifically defined herein shall have the respective
meanings assigned them in the Articles Supplementary, which definitions are
hereby incorporated by reference herein. The following capitalized terms shall
have the following meanings for purposes of this Article XI, whether used in
the singular or plural.

          "REIT" means an entity qualifying as a real estate investment trust
     under the United States Internal Revenue Code of 1986, as amended.

          "NYSE" means the New York Stock Exchange.

          "AMEX" means the American Stock Exchange.

          "ADR" means American Depository Receipts.

          "National Securities Exchange" means the NYSE, AMEX, Midwest Stock
     Exchange, Philadelphia Stock Exchange, Boston Stock Exchange, NASDAQ
     System or any other national securities exchange.

          "Market Value" means, as to any S&P Eligible REIT Share, S&P
     Eligible Utility ADR, S&P Eligible Preferred Stock and S&P Eligible
     Corporate Bond, the value calculated by reference to the highest closing
     price on a National Securities Exchange on the date preceding any
     relevant date of determination.

          "MTNP" means, initially, a medium term note program.

          "Yankee Bond" means, initially, a debt security which is issued by a
     foreign government, province, supranational agency or foreign
     corporation.



                                    17
<PAGE>

     Section 11.02. S&P Eligible Asset Definitions. The following assets,
specifically S&P Eligible REIT Shares, S&P Eligible Preferred Stock, S&P
Eligible Corporate Bonds and S&P Eligible Utility ADRs, having met the
requirements set forth in the definition of "Other Permitted Securities" in
the Articles Supplementary, shall be included as "Other Permitted Securities"
for purposes of determining maintenance of the "S&P RP Basic Maintenance
Amount".

          "S&P Eligible REIT Share" means, initially, an equity security
     issued by a REIT. So long as the shares of RP are rated AAA or higher by
     S&P, no equity security held by the Corporation shall be deemed an S&P
     Eligible REIT Share unless (i) such equity security has been listed or
     traded for more than 15 months on a National Securities Exchange and (ii)
     the aggregate Market Value of all such equity securities outstanding is
     equal to or exceeds $100,000,000. So long as the shares of RP are rated
     AAA or higher by S&P, no equity security held by the Corporation shall be
     deemed an S&P Eligible REIT Share to the extent (but only to the
     proportionate extent) (i) the amount thereof held by the Corporation
     exceeds the lesser of (x) 5% of the issued and outstanding equity
     securities of the REIT issuing such S&P Eligible REIT Shares and (y) the
     average weekly trading volume for the past month preceding any relevant
     date of determination; and (ii) the aggregate Market Value of the amount
     thereof held by the Corporation exceeds 5% of the aggregate Market Value
     of the issued and outstanding equity securities of the REIT issuing such
     equity security.

          "S&P Eligible Utility ADRs" means, initially, ADRs issued by public
     utility companies, which ADRs have been listed or traded for more than 15
     months on a National Securities Exchange. So long as the shares of the RP
     are rated AAA or higher by S&P, no ADR held by the Corporation shall be
     deemed an S&P Eligible Utility ADR unless the aggregate Market Value of
     all such ADRs outstanding is equal to or exceeds $100,000,000. So long as
     the shares of RP are rated AAA or higher by S&P, no ADR held by the
     Corporation shall be deemed an S&P Eligible Utility ADR to the extent
     (but only to the proportionate extent) (i) the amount thereof held by the
     Corporation exceeds the lesser of (x) 5% of the issued and outstanding
     S&P Eligible Utility ADRs of the public utility company issuing such S&P
     Eligible Utility ADRs and (y) the average weekly trading volume for the
     past month preceding any relevant date of determination; and (ii) the
     aggregate Market Value of the amount thereof held by the Corporation does
     not exceed 5% of the aggregate Market Value of the issued and outstanding
     equity securities of the public utility company issuing such equity
     security.

          "S&P Eligible Preferred Stock" means, initially, preferred stock (i)
     rated BBB or higher by S&P or (ii) issued by an entity having debt
     obligations outstanding with senior unsecured or subordinated unsecured
     debt ratings of BBB or higher by S&P; provided, however, that no share of
     Yankee Preferred Stock (as such term is defined by S&P from time to time)
     will be considered an S&P Eligible Preferred Stock unless such Yankee
     Preferred Stock is (x) rated A or higher by S&P or (y) issued by an
     entity having debt obligations outstanding with senior unsecured or
     subordinated unsecured debt ratings of A or higher by S&P. So long as the
     shares of RP are rated AAA or higher by S&P, no preferred stock owned by
     the Corporation shall be deemed an S&P Eligible Preferred Stock to the
     extent (but only to the proportionate extent) (i) the aggregate of
     preferred stock owned by the Corporation of an issuer having debt
     obligations outstanding with a senior debt rating of A or higher by S&P
     exceeds 5% of the aggregate Market Value of Eligible Portfolio Property


                                    18
<PAGE>

     owned by the Corporation; (ii) the aggregate Market Value of preferred
     stock owned by the Corporation of an issuer having debt obligations
     outstanding with a senior debt rating of BBB by S&P exceeds 2.5% of the
     aggregate Market Value of Eligible Portfolio Property owned by the
     Corporation; and (iii) the aggregate Market Value of preferred stock
     owned by the Corporation in any one industry (as defined by S&P from time
     to time) exceeds 20% of the aggregate Market Value of the securities
     owned by the Corporation. In addition, so long as the shares of RP are
     rated AAA or higher by S&P, no preferred stock held by the Corporation
     shall be deemed an S&P Eligible Preferred Stock unless such Preferred
     Stock meets the following conditions:

          (i) shares of the issuer (or if the issuer is a special purpose
          corporation, the parent of the issuer) of such preferred stock are
          traded on the NYSE or the AMEX;

          (ii) except in the case of Yankee Preferred Stock, such preferred
          stock is cumulative;

          (iii) such preferred stock is nonconvertible;

          (iv) such preferred stock has no attached warrants;

          (v) the aggregate Market Value of all outstanding equity securities
          of the issues of such preferred stock is at least $500,000;

          (vi) such preferred stock (x) has an initial issue size of at least
          $50 million or (y) is issued by an entity with preferred stock
          outstanding with an aggregate Market Value of at least $50 million;

          (vii) the issuer of such preferred stock pays cash dividends in U.S.
          denominated dollars and has paid cash dividends consistently over
          the previous three years (unless the issuer of the preferred stock
          has no relevant history of issuing dividends, in which case the
          issuer has received an A or higher debt or preferred stock rating
          from S&P);

          (viii) the aggregate Market Value of all equity securities
          outstanding of the issuer of the preferred stock is equal to or
          greater than $50 million;

          (ix) the aggregate Market Value of such preferred stock (calculated
          by reference to the closing price on the Securities Exchanges for
          such preferred stock on the day preceding any relevant date of
          determination) owned by the Corporation is no less than $500,000 and
          no more than $5,000,000, unless such preferred stock is floating
          rate preferred stock where an auction restricts the Corporation's
          ownership of such floating rate preferred stock;



                                    19
<PAGE>

          (x) if such preferred stock is floating rate preferred stock, (x)
          such floating rate preferred stock has a dividend period of less
          than or equal to 49 days, unless such preferred stock is a new
          issue, in which case, the first dividend period of such new issue is
          up to 64 days; and (y) such floating rate preferred stock has not
          been subject to a failed auction;

          (xi) if such preferred stock is adjustable rate preferred stock, the
          aggregate Market Value of all adjustable rate preferred stock owned
          by the Corporation does not exceed 10% of the Other Permitted
          Securities owned by the Corporation.

          "S&P Eligible Corporate Bonds" means, initially, debt securities
     issued by a corporation having a maturity of thirty years or less. So
     long as the shares of RP are rated AAA or higher by S&P, no debt security
     held by the Corporation shall be deemed an S&P Eligible Corporate Bond
     unless (i) in the case of a debt security rated CCC or lower by S&P, such
     debt security is a subordinated debt security with an implied senior
     rating by S&P of B- or higher and (ii) at least two dealers registered
     with the National Association of Securities Dealers offer bids on such
     debt security. In addition, so long as the shares of RP are rated AAA or
     higher by S&P, no debt security held by the Corporation shall be deemed
     an S&P Eligible Corporate Bond unless the following conditions are met:

          (i) at least 80% of the aggregate Market Value of debt securities
          owned by the Corporation which are rated BBB or lower have an
          original issue size of $100 million or higher and the remaining 20%
          have an original issue size no lower than $50 million;

          (ii) in the case of a debt security issued under a MTNP such debt
          security is (x) rated BBB or higher by S&P and has an original issue
          size equal to the maximum number of medium term notes authorized by
          the issuer pursuant to such MTNP and (y) part of a series of medium
          term notes which exceeds $5 million in aggregate Market Value;

          (iii) in the case of a Yankee Bond, such Yankee Bond is rated A or
          higher by S&P and the aggregate of such Yankee Bonds owned by the
          Corporation does not exceed 25% of the aggregate Market Value of
          securities owned by the Corporation;

          (iv) financial statements are publicly available for the issuer of
          such debt securities and such debt securities are registered under
          the Securities Act of 1933;

          (v) the terms of such debt securities provide for periodic interest
          payments in cash over the life of the security;

          (vi) such debt securities are not convertible or exchangeable into
          capital of the issuer at any time; provided that 10% of such debt
          securities outstanding may be subject to exchange or tender offer;
          and

          (vii) in the case of Type IV S&P Eligible Corporate Bonds, the
          aggregate Market Value of such debt securities issued by companies
          engaged principally in any one industry (as defined by S&P) does not
          exceed 20% of the aggregate Market Value of all securities owned by
          the Corporation.



                                    20
<PAGE>

          "Type I S&P Eligible Corporate Bonds" means, initially, S&P Eligible
     Corporate Bonds rated AAA by S&P.

          "Type II S&P Eligible Corporate Bonds" means, initially, S&P
     Eligible Corporate Bonds rated AA by S&P.

          "Type III S&P Eligible Corporate Bonds" means, initially, S&P
     Eligible Corporate Bonds rated A by S&P.

          "Type IV S&P Eligible Corporate Bonds" means, initially, S&P
     Eligible Corporate Bonds rated BBB by S&P.

     Section 11.03. Discount Factors Supplied by S&P. The following Discount
Factors, having been supplied by S&P, shall be "Discount Factors Supplied by
S&P" as defined in the Articles Supplementary for purposes of calculating the
"Discounted Value" of the assets for purposes of determining maintenance of
the S&P RP Basic Maintenance Amount".

          S&P Eligible REIT Shares which have been outstanding             2.52
          for more than eighteen (18) months

          S&P Eligible REIT Shares which have been outstanding for         3.25
          eighteen (18) or fewer months

          S&P Eligible Utility ADRs which have been outstanding for        2.52
          more than eighteen (18) months

          S&P Eligible Utility ADRs which have been outstanding for        3.25
          eighteen (18) or fewer months

          Type I S&P Eligible Corporate Bonds                              1.50

          Type II S&P Eligible Corporate Bonds                             1.55

          Type III S&P Eligible Corporate Bonds                            1.60

          Type IV S&P Eligible Corporate Bonds                             1.65

          Type V S&P Eligible Corporate Bonds                              1.70

          Type VI S&P Eligible Corporate Bonds                             1.80

          Type VII S&P Eligible Corporate Bonds                            1.90

          Type VIII S&P Eligible Corporate Bonds                           2.05

          Type IX S&P Eligible Corporate Bonds                             2.20

          S&P Eligible Preferred Stock (Sinking Fund, Fixed Rate,
          Perpetual or Floating (Rate)                                     2.40

          S&P Eligible Preferred Stock (Adjustable or Auction Rate)        4.00



                                    21
<PAGE>

     Section 11.04 . Moody's Eligible Asset Definitions. The following assets,
specifically Auction Rate Preferred Stock, Hybrid Securities, Preferred Stock,
Type I REIT Shares, Type I Utility ADRs, Industrial Bonds and Utility
Preferred Stock, having met the requirements set forth in the definition of
"Other Permitted Securities" in the Articles Supplementary, shall be included
as "Other Permitted Securities" for purposes of determining maintenance of the
"Moody's RP Basic Maintenance Amount".

          "Auction Rate Preferred Stock" means, initially, preferred stock
     rated a3 or higher which is issued by a company which has paid dividends
     during the preceding three year period.

          "Convertible Preferred Stock" means, initially, Utility Preferred
     Stock which is mandatorily convertible into common equity of the company
     issuing such securities.

          "Hybrid Preferred Stock" means monthly income Preferred Stock,
     quarterly income Preferred Stock and other nonstandard Preferred Stock
     rated a3 or higher which is issued by a company which has paid dividends
     during the preceding three years.

          "Industrial Bond" means, initially, industrial revenue bonds and
     industrial development bonds.

          "Preferred Stock" means, initially, preferred stock rated a3 or
     higher which is (i) not convertible into common equity and (ii) issued by
     a non-utility company which has paid dividends during the preceding 3
     years.

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

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

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

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

          "Type I REIT Shares" means, initially, equity securities issued by
     REITs having debt obligations outstanding with senior unsecured or
     subordinated unsecured debt ratings of Baa3 or higher from Moody's. So
     long as the shares of RP are rated Baa3 or higher by Moody's, no equity
     security held by the Corporation shall be deemed a REIT Share unless (i)
     such equity security is traded on the NYSE or the AMEX, (ii) the
     aggregate value of all such equity securities outstanding (calculated
     based upon the highest of the closing prices on the NYSE or the AMEX as
     applicable, for such equity security on the day preceding any relevant
     date of determination) is equal to or exceeds $500,000,000 and (iii) the
     REIT which issues such equity security has paid dividends for all periods
     since it first qualified as a REIT. In addition, so long as the shares of


                                    22
<PAGE>

     RP are rated Baa3 or higher by Moody's, no equity security held by the
     Corporation shall be deemed a Type I REIT Share to the extent (but only
     to the proportionate extent) the amount thereof held by the Corporation
     exceeds the lesser of (i) 5% of the issued and outstanding equity
     securities of the REIT issuing such equity security and (ii) the average
     weekly trading volume thereof for the 26 week period immediately
     preceding any relevant date of determination.

          "Type I Utility ADRs" means, initially, ADRs, which are traded on
     the NYSE or the AMEX with respect to equity securities issued by public
     utility companies having U.S. dollar denominated debt obligations
     outstanding with senior unsecured or subordinated unsecured debt ratings
     of Baa3 or higher from Moody's. In addition, so long as the shares of RP
     are rated Baa3 or higher by Moody's, no equity security held by the
     Corporation shall be deemed a Type I Utility ADR to the extent (but only
     to the proportionate extent) the amount thereof held by the Corporation
     exceeds the lesser of (i) 5% of the issued and outstanding equity
     securities of the utility company issuing such equity security and (ii)
     the average weekly trading volume thereof for the 26 week period
     immediately preceding any relevant date of determination.

          "Utility Preferred Stock" means, initially, preferred stock
         rated a3 or higher which is issued by a public utility company which
         had paid dividends during the preceding three years.

     Section 11.05 . Discount Factors Supplied by Moody's. The following
Discount Factors, having been supplied by Moody's, shall be "Discount Factors
Supplied by Moody's" as defined in the Articles Supplementary for purposes of
calculating the "Discounted Value" of the assets for purposes of determining
maintenance of the "Moody's RP Basic Maintenance Amount".

                                                              Discount Factor(1)
Auction Rate Preferred Stock                                          3.50

Convertible Preferred Stock                                           2.00

Hybrid Preferred Stock                                                3.50

Preferred Stock                                                       2.35

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

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

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



                                    23
<PAGE>

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

Type I Industrial Bonds having a remaining term to
    maturity of more than four years but not more
    than five years:                                                  1.44

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

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

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

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

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

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

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

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

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



                                    24
<PAGE>

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

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

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

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

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

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

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

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

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

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



                                    25
<PAGE>

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

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

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

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

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

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

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

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

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

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


                                    26
<PAGE>

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

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

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

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

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

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

Type I REIT Shares:                                                   3.00

Type I Utility ADRs issued by an entity organized
    under the laws of Argentina or any political
    subdivision thereof:                                              5.00

Type I Utility ADRs issued by an entity organized
    under the laws of Australia or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Belgium or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Brazil or any political
    subdivision thereof:                                              4.20

Type I Utility ADRs issued by an entity organized
    under the laws of Canada or any political
    subdivision thereof:                                              2.00



                                    27
<PAGE>

Type I Utility ADRs issued by an entity organized
    under the laws of Chile or any political
    subdivision thereof:                                              3.00

Type I Utility ADRs issued by an entity organized
    under the laws of Denmark or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of France or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Germany or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Greece or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Italy or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Mexico or any political
    subdivision thereof:                                              4.00

Type I Utility ADRs issued by an entity organized
    under the laws of Netherlands or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Peru or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Portugal or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of Spain or any political
    subdivision thereof:                                              2.00

Type I Utility ADRs issued by an entity organized
    under the laws of the United Kingdom or any
    political subdivision thereof:                                    2.00

Utility Preferred Stock                                               1.60



                                    28
<PAGE>

     Section 11.06. Revised Definitions. The definitions of "Utility Bonds"
and "Utility Stocks" set forth in the Articles Supplementary are hereby
modified to delete the requirement that the issuers of such securities be
"state regulated".

     Section 11.07. Initial Elements of Moody's RP Basic Maintenance Amount.
In lieu of the definition in Part I, Paragraph 1, Definitions, of the
Articles, the following definition of "Moody's RP Basic Maintenance Amount,"
having been approved by Moody's, shall be used for purposes of the Articles:

          "Moody's 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), 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) an amount equal to the
          product of (x) three and (y) the principal amount of the
          Corporation's loan from the Aid Association for Lutherans then
          outstanding, (v) an amount equal to the sum of (x) the amount of
          accrued but unpaid interest on the principal amount of the
          Corporation's loan from the Aid Association for Lutherans then
          outstanding and (y) an amount equal to 70 days of additional accrued
          interest on such loan at the then-current interest rate borne by
          such loan, (vi) the aggregate principal amount of any other then
          outstanding indebtedness of the Corporation for money borrowed,
          (vii) an amount equal to the sum of (x) the aggregate accrued but
          unpaid interest on the indebtedness referred to in the foregoing
          clause (vi) and (y) an amount equal to 70 days of additional accrued
          interest on such indebtedness at the then-current interest rate(s)
          borne by such indebtedness, (viii) the aggregate Projected Dividend
          Amount, (ix) redemption premium, if any, and (x) the greater of
          $200,000 or an amount equal to projected expenses of the Corporation
          (including, without limitation, fee and indemnification obligations
          of the Corporation incurred in connection with any commercial paper
          program undertaken by the Corporation or with any credit facility
          related thereto) 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 Moody's
          RP Basic Maintenance Amount if the Board of Directors determines and
          Moody's advises the Corporation in writing that such adjustment,
          modification, alteration or change will not adversely affect its
          then-current rating on the RP.




                                    29

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