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<SEC-DOCUMENT>0000930413-06-002268.txt : 20060323
<SEC-HEADER>0000930413-06-002268.hdr.sgml : 20060323
<ACCEPTANCE-DATETIME>20060322183908
ACCESSION NUMBER:		0000930413-06-002268
CONFORMED SUBMISSION TYPE:	N-2/A
PUBLIC DOCUMENT COUNT:		12
FILED AS OF DATE:		20060323
DATE AS OF CHANGE:		20060322

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:		N-2/A
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04915
		FILM NUMBER:		06704690

	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

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:		N-2/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-130590
		FILM NUMBER:		06704691

	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>N-2/A
<SEQUENCE>1
<FILENAME>c40133_n2a.htm
<TEXT>
<HTML>

<HEAD><TITLE></TITLE></HEAD>
<BODY>


<P align="center">
<FONT size=2 face="serif">As filed with the Securities and Exchange Commission
on March 22, 2006 </FONT></P>
<P align="right">
<FONT size=2 face="serif">1933 Act File No. 333-130590</FONT><BR>
<FONT size=2 face="serif">1940 Act File No. 811-04915 </FONT></P>

<hr noshade size=3>
<hr size="1" noshade>
<center>
  <B><FONT size=5 face="serif">SECURITIES AND EXCHANGE COMMISSION</FONT></B><FONT size=2 face="serif"> </FONT><BR>
  <B><FONT size=2 face="serif">Washington, D.C. 20549</FONT></B><FONT size=2 face="serif"> </FONT><BR>
  <B><FONT size=5 face="serif">FORM N-2 </FONT></B><BR>
  <FONT size=2 face="serif">(Check Appropriate Box or Boxes) </FONT><BR>
</center>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD align=center>
<B><FONT size=2 face="serif">REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</FONT></B>&nbsp;
        </TD>
        <TD align=right>
      <FONT size=2 face="sans-serif">|X|</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
  <TD align=left> </TD>
  <TD align=right>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=center>
<FONT size=2 face="serif">Pre-Effective Amendment No. 1</FONT>&nbsp;
        </TD>
        <TD align=right>
<FONT size=2 face="sans-serif">|X|</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=center>
<FONT size=2 face="serif">Post-Effective Amendment No.</FONT>&nbsp;
        </TD>
        <TD align=right>
      <FONT size=2 face="sans-serif">|&nbsp;&nbsp;|</FONT>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=center>
<B><FONT size=2 face="serif">REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940</FONT></B>&nbsp;
        </TD>
        <TD align=right>
      <FONT size=2 face="sans-serif">|X|</FONT>&nbsp;   </TD>
</TR>
<TR valign="bottom">
        <TD align=center>
<FONT size=2 face="serif">Amendment No. 49</FONT>&nbsp;
        </TD>
        <TD align=right>
      <FONT size=2 face="sans-serif">|X|</FONT>&nbsp;   </TD>
</TR>
<TR valign="bottom">
  <TD align=left> </TD>
  <TD align=right>&nbsp;</TD>
</TR>
</TABLE><BR>
<P align="center">
<B><FONT size=5 face="serif">DNP SELECT INCOME FUND INC.</FONT></B><B><FONT size=5 face="serif"> </FONT></B><BR>
<FONT size=2 face="serif">(Exact Name of Registrant as Specified in Charter)<br>
</FONT> <B><FONT size=2 face="serif">55 East Monroe Street, Suite
3600 </FONT></B><br>
<B><FONT size=2 face="serif">Chicago, Illinois 60603</FONT></B><FONT size=2 face="serif"> </FONT><BR>
  <FONT size=2 face="serif">(Address of Principal Executive Offices) </FONT><BR>
  <B><FONT size=2 face="serif">(312) 368-5510 </FONT></B><BR>
  <FONT size=2 face="serif">(Registrant&#146;s Telephone Number, including Area
  Code) </FONT><BR>
  <B><FONT size=2 face="serif">Nathan I. Partain, CFA </FONT></B><BR>
  <B><FONT size=2 face="serif">DNP Select Income Fund Inc. </FONT></B><BR>
  <FONT face="serif"> </FONT><FONT size=2 face=serif><B>55 East Monroe
  Street, Suite 3600 </B></FONT> <BR>
  <B><FONT size=2 face="serif">Chicago, Illinois 60603</FONT></B><FONT size=2 face="serif"> </FONT><BR>
  <FONT size=2 face="serif">(Name and Address of Agent for Service) </FONT><BR>
  <B><FONT size=2 face="serif">Copies to: </FONT></B><FONT size=2 face="serif"> </FONT><BR>
</P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=50% align=center>
<B><FONT size=2 face="serif">John R. Sagan, Esq.</FONT></B>&nbsp;
        </TD>
        <TD align=center>
<B><FONT size=2 face="serif">Kevin J. Carr, Esq.</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=50% align=center>
<B><FONT size=2 face="serif">Lawrence R. Hamilton, Esq.</FONT></B>&nbsp;
        </TD>
        <TD align=center>
<B><FONT size=2 face="serif">Phoenix Life Insurance Company</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=50% align=center>
<B><FONT size=2 face="serif">Mayer, Brown, Rowe &amp; Maw LLP</FONT></B>&nbsp;
        </TD>
        <TD align=center>
<B><FONT size=2 face="serif">One American Row</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=50% align=center>
<FONT face="serif"> </FONT><FONT size=2 face="serif"><B>71 South Wacker Drive</B></FONT>&nbsp;
        </TD>
        <TD align=center>
<B><FONT size=2 face="serif">Hartford, Connecticut 06102</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=50% align=center>
<B><FONT size=2 face="serif">Chicago, Illinois 60606</FONT></B>&nbsp;
        </TD>
        <TD align=center>
<B><FONT size=2 face="serif">(860) 403-5000</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=50% align=center>
<B><FONT size=2 face="serif">(312) 782-0600</FONT></B>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
</TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT size=2 face="serif">Approximate Date of Proposed Public Offering: </FONT></B><FONT size=2 face="serif">As soon as practicable after the effective date of this Registration Statement. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">If any of the securities
being registered on this form will be offered on a delayed or continuous basis
in reliance on Rule 415 under the Securities Act of 1933, other than securities
offered  in connection with a dividend reinvestment plan, check the following
box&nbsp;&nbsp; </FONT><font size="2" face="sans-serif">|&nbsp;&nbsp;|</font> </P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD align=right>&nbsp;</TD>
  <TD colspan=3 align=left><FONT size=2 face="serif">It is proposed that this
    filing will become effective (check appropriate box): </FONT></TD>
</TR>
<TR valign="bottom">
        <TD width=2% align=right>
      <div align="left"><font size="2" face="sans-serif">|X|&nbsp;&nbsp;</font>      </div></TD>
        <TD colspan=3 align=left>
<FONT size=2 face="serif">when declared effective pursuant to Section 8(c).</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
  <TD align=left>&nbsp;</TD>
  <TD colspan=3 align=left>&nbsp;</TD>
</TR>
<TR valign="bottom">
        <TD align=left>

          <div align="left"></div></TD>
        <TD colspan=3 align=left>
<FONT size=2 face="serif">If appropriate, check the following box:</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=right>
      <div align="left"><font size="2" face="sans-serif">|&nbsp;&nbsp;|</font>  </div></TD>
        <TD colspan=3 align=left>
<FONT size=2 face="serif">This post-effective amendment designates a new effective date for a previously filed registration statement.</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=right>
      <div align="left"><font size="2" face="sans-serif">|&nbsp;&nbsp;|</font>  </div></TD>
        <TD colspan=3 align=left>
<FONT size=2 face="serif">This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=left>

          <div align="left"></div></TD>
        <TD colspan=3 align=left>
<FONT size=2 face="serif">Act and the Securities Act registration statement number of the earlier effective registration statement for the</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=left>

          <div align="left"></div></TD>
        <TD width=79% align=left>
<FONT size=2 face="serif">same offering is</FONT>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
        </TD>
        <TD width=10% align=left>
<FONT size=2 face="serif">.</FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>
<p>

<table width="100%" border=0 cellpadding=0 cellspacing=0>
  <tr valign="bottom">
    <td colspan=8 align=center> <b><font size=2 face="serif">CALCULATION OF REGISTRATION
          FEE UNDER THE SECURITIES ACT OF 1933</font></b>&nbsp; </td>
  </tr>
  <tr>
    <td colspan=8>
      <hr size="1" noshade>
      <hr size="1" noshade>
    </td>
  </tr>
  <tr valign="bottom">
    <td align=left>&nbsp; </td>
    <td align=left>&nbsp; </td>
    <td>&nbsp; </td>
    <td align=left>
      <center>
        <b><font size=1 face="serif">Proposed Maximum</font></b>&nbsp;
    </center></td>
    <td>
      <center>
    </center></td>
    <td align=left>
      <center>
        <b><font size=1 face="serif">Proposed Maximum</font></b>&nbsp;
    </center></td>
    <td>
      <center>
    </center></td>
    <td align=center>
      <center>
        <b><font size=1 face="serif">Amount of</font></b>&nbsp;
    </center></td>
  </tr>
  <tr valign="bottom">
    <td align=right>
      <center>
        <b><font size=1 face="serif">Title of Securities</font></b>&nbsp;
    </center></td>
    <td align=center> <b><font size=1 face="serif">Amount Being</font></b>&nbsp; </td>
    <td>&nbsp; </td>
    <td align=left>
      <center>
        <b><font size=1 face="serif">Offering Price Per</font></b>&nbsp;
    </center></td>
    <td>
      <center>
    </center></td>
    <td align=left>
      <center>
        <b><font size=1 face="serif">Aggregate Offering</font></b>&nbsp;
    </center></td>
    <td>
      <center>
    </center></td>
    <td align=center>
      <center>
        <b><font size=1 face="serif">Registration</font></b>&nbsp;
    </center></td>
  </tr>
  <tr valign="bottom">
    <td align=right>
      <center>
        <b><font size=1 face="serif">Being Registered</font></b>&nbsp;
    </center></td>
    <td align=center> <b><font size=1 face="serif">Registered</font></b>&nbsp; </td>
    <td>&nbsp; </td>
    <td align=center>
      <center>
        <b><font size=1 face="serif">Unit</font></b>&nbsp;
    </center></td>
    <td>
      <center>
    </center></td>
    <td align=center>
      <center>
        <b><font size=1 face="serif">Price</font></b>&nbsp;
    </center></td>
    <td>
      <center>
    </center></td>
    <td align=center>
      <center>
        <b><font size=1 face="serif">Fee</font></b>&nbsp;
    </center></td>
  </tr>
  <tr>
    <td colspan=8>
      <hr noshade size=1>
    </td>
  </tr>
  <tr valign="bottom">
    <td align=center>
      <div align="left"><font size=2 face="serif">Auction Preferred Stock,</font>&nbsp; </div></td>
    <td align=left>&nbsp; </td>
    <td>&nbsp; </td>
    <td align=left>&nbsp; </td>
    <td>&nbsp; </td>
    <td align=left>&nbsp; </td>
    <td>&nbsp; </td>
    <td align=left>&nbsp; </td>
  </tr>
  <tr valign="bottom">
    <td align=right>
      <div align="left"><font size=2 face="serif">&#36;0.001 par value per share</font>&nbsp; </div></td>
    <td align=right> <center>
      <font size=2 face="serif">12,000 shares</font>&nbsp;
    </center></td>
    <td>&nbsp; </td>
    <td align=left>
      <center>
        <font size=2 face="serif">&#36;25,000</font>
    </center></td>
    <td>&nbsp; </td>
    <td align=left>
      <center>
        <font size=2 face="serif">&#36;300,000,000</font>
      </center></td>
    <td>
      <center>
    </center></td>
    <td align=left>
      <center>
        <font size=2 face="serif">&#36;32,100(1)</font>
    </center></td>
  </tr>
  <tr>
    <td colspan="8"><hr size="1" noshade>
        <hr size="1" noshade>
    </td>
  </tr>
</table>

<BR>
<P><FONT size=2 face="serif">(1) Previously paid.</FONT></P>

<P>
<FONT size=2 face="serif"> </FONT><B><FONT size=2 face="serif">The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to section 8(a), may determine. </FONT></B></P>

<hr size="1" noshade>

<HR noshade  width="100%" size=3>

<P align="left" style="page-break-before:always"></P><PAGE>

<P><FONT SIZE=2 COLOR=RED FACE=ARIAL>The information in this Prospectus is not complete and may be changed.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission. We may not sell these securities until the
registration statement is effective. This Prospectus is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where the offer or sale is not permitted.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="33%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="35%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="30%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 COLOR=RED FACE=ARIAL><B>PRELIMINARY PROSPECTUS</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2   COLOR=RED FACE=ARIAL><B>Subject to completion</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT face=arial SIZE=2>March 23,
  2006</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT FACE=ARIAL SIZE=4><B>$300,000,000</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

</TABLE>

<P><FONT SIZE=6>DNP Select Income Fund Inc.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<FONT SIZE=4 FACE=ARIAL><B>4,000 Shares Series M<BR>
4,000 Shares Series W<BR>
4,000 Shares Series F</B><BR></FONT><DIV><FONT SIZE=3> </FONT></DIV><BR>
<FONT SIZE=4 FACE=ARIAL><B>Auction Preferred Stock (&#147;APS&#148;)<BR>
Liquidation Preference $25,000 Per Share</B></FONT>
<BR>

<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><B>Investment
  objectives. </B>DNP
  Select Income Fund Inc. (the &#147;Fund&#148;) is a diversified, closed-end management
  investment company. The Fund&#146;s primary investment objectives are current
  income and long-term growth of income. Capital appreciation is a secondary
  objective. There can be no assurance that the Fund will achieve its
  investment objectives. </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<DIV><FONT SIZE=3> </FONT></DIV>
<FONT SIZE=2><B>Investment
  adviser. </B>Duff &amp;
  Phelps Investment Management Co. (the &#147;Adviser&#148;) has acted as the Fund&#146;s
  investment adviser since the Fund&#146;s inception in 1987. As of December 31,
  2005, the Adviser managed approximately $6.1 billion in assets, including
  approximately $2.6 billion in securities of public utility companies. The
  Adviser&#146;s address is 55 East Monroe Street, Suite 3600, Chicago, Illinois
  60603. </FONT>
<DIV><FONT SIZE=3> </FONT></DIV>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<DIV><FONT SIZE=2><B>Portfolio
  contents. </B>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&#146;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.</FONT></DIV><DIV ALIGN=RIGHT STYLE="MARGIN-TOP:-16PX"><FONT SIZE=2><I>(continued
  on inside cover)</I></FONT></DIV>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<DIV><FONT SIZE=3> </FONT></DIV>
<FONT SIZE=2><B>Before
  buying any APS, you should read the discussion of material risks of investing
  in the Fund in the &#147;Risks&#148; section beginning on page 22 of this Prospectus.
  Certain of these risks are summarized in &#147;Prospectus summary&#151;Risks of investing in the Fund&#148; beginning
  on page 4.</B></FONT>
<DIV><FONT SIZE=3> </FONT></DIV>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><B>Neither
  the Securities and Exchange Commission nor any state securities commission
  has approved or disapproved of these securities or determined if this
  Prospectus is truthful or complete. Any representation to the contrary is a
  criminal offense. </B></FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="46%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="18%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>Price to public</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>Sales load</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>Proceeds to Fund(1)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>Per share</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL>25,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL>250</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL>24,750&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>Total</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL>300,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL>3,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2 FACE=ARIAL>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL>297,000,000&nbsp;&nbsp;&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<BR>
<DIV><FONT SIZE=3> </FONT></DIV>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="4%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Plus accumulated dividends, if any, from the date the
  APS are issued, but before offering expenses payable by the Fund estimated to
  be approximately $408,100. The Fund and the Adviser have agreed to indemnify
  the underwriter against certain liabilities under the Securities Act of 1933,
  as amended. See &#147;Underwriting&#148;.</FONT></P>
</TD>
</TR>
</TABLE>

<BR><FONT SIZE=2>The underwriter is offering
the APS subject to various conditions. The underwriter expects to deliver the
APS in book-entry form, through the facilities of the Depository Trust Company,
to purchasers on or
about&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2006.</FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P ALIGN=CENTER><FONT SIZE=5 FACE=ARIAL><B>UBS Investment Bank</B></FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1><I>(continued from previous page) </I></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<DIV><FONT SIZE=3> </FONT></DIV>

<FONT SIZE=2>The APS is being offered by
the underwriter subject to the condition that the shares of APS be rated &#147;Aaa&#148;
by Moody&#146;s Investors Service, Inc. (&#147;Moody&#146;s&#148;) and &#147;AAA&#148; by Standard &amp;
Poor&#146;s Ratings Services, a division of The McGraw-Hill Companies, Inc.
(&#147;S&amp;P&#148;), as of the time of delivery of the APS to the underwriter, and
subject to certain other conditions. </FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>The APS will pay adjustable
rate dividends based on shorter-term interest rates, which will be
re-determined periodically by an auction process, conducted in accordance with
the procedures described in this Prospectus and, in further detail, in the
Statement of Additional Information. The adjustment period for APS dividends
could be as short as seven days or as long as a year or more.</FONT></P>

<P><FONT SIZE=2>The APS, which has no
history of public trading, will not be listed on an exchange or automated
quotation system. Broker-dealers may maintain a secondary trading market in the
APS outside of auctions; however, they have no obligation to do so, and there
can be no assurance that a secondary market for the APS will develop or, if it
does develop, that it will provide holders with a liquid trading market (i.e.,
trading will depend on the presence of willing buyers and sellers and the
trading price will be subject to variables to be determined at the time of the
trade by such broker-dealers). A general increase in the level of interest
rates may have an adverse effect on the secondary market price of the APS, and
a selling shareholder that sells APS between auctions may receive a price per
share of less than $25,000. The Fund may redeem APS as described under
&#147;Description of APS&#151;Redemption.&#148;</FONT></P>

<P><FONT SIZE=2>When issued and outstanding,
the APS will add further leverage to an investment in the Fund&#146;s common stock.
The APS will be senior in liquidation and distribution rights to the Fund&#146;s
outstanding common stock and equal in liquidation and distribution rights to
the Fund&#146;s outstanding remarketed preferred stock (&#147;RPS&#148;), Series A, Series B,
Series C, Series D and Series E. The Fund&#146;s common stock is traded on the New York
Stock Exchange under the symbol &#147;DNP.&#148;</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<FONT SIZE=2>You should read this
Prospectus, which contains important information about the Fund, before
deciding whether to invest in the APS, and retain it for future reference. A
Statement of Additional Information, dated March&nbsp;&nbsp;, 2006, containing additional
information about the Fund, has been filed with the Securities and Exchange
Commission (&#147;SEC&#148;) and is incorporated by reference in its entirety into this
Prospectus, which means it is part of the Prospectus for legal purposes. You
may request a free copy of the Statement of Additional Information (the table
of contents of which is on page 57 of this Prospectus), the Fund&#146;s annual and
semi-annual reports and other information about the Fund, or make other
inquiries by calling the Fund&#146;s administrator at (888) 878-7845, by writing to
the Fund at 55 East Monroe Street, Suite 3600, Chicago, Illinois 60603, or by
visiting the web site of either the Fund (http://www.dnpselectincome.com) or
the SEC (http://www.sec.gov). </FONT><BR><BR>

<FONT SIZE=2>You should rely only on the
information contained or incorporated by reference in this Prospectus. The Fund
has not, and the underwriter has not, authorized anyone to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. The Fund is not, and the underwriter is
not, making an offer in any state where the offer or sale is not permitted. You
should not assume that the information in this Prospectus is accurate as of any
date other than the date on the front of this Prospectus. The Fund&#146;s business,
financial condition and prospects may have changed since that date. </FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>The Fund&#146;s APS does not
represent a deposit or obligation of, and is not guaranteed or endorsed by, any
bank or other insured depository institution, and is not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other government agency.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>ii</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>



<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="86%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="13%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2   FACE=ARIAL><B>TABLE OF CONTENTS</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 NOSHADE WIDTH="100%" ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 NOSHADE WIDTH="100%" ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<DIV><FONT SIZE=3> </FONT></DIV>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A001">Prospectus
  summary</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>1</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A002">Financial
  highlights</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>11</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A003">The Fund</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>13</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A004">Use of
  proceeds</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>13</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A005">Capitalization
  (unaudited)</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>14</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A006">Portfolio
  composition</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>14</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A007">The Fund&#146;s
  investments</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>15</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A008">Risks</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>22</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A009">Management
  of the Fund</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>29</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A010">Description
  of APS</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>32</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A011">The
  auction</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>41</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A012">Description
  of capital structure</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>45</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A013">Certain
  provisions in the charter and bylaws and certain provisions of Maryland law</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>47</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A014">Repurchase
  of common stock</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>50</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A015">U.S.
  federal income tax matters</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>51</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A016">Underwriting</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>55</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A017">Custodian,
  transfer agent and auction agent</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>55</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A018">Legal
  opinions</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>55</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A019">Available
  information</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>56</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A020">Privacy
  principles of the Fund</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>56</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><A HREF="#A021">Table of
  contents for the Statement of Additional Information</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT FACE=ARIAL SIZE=2><B>57</B></FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>iii</B></FONT></P>
</TD>
</TR>
</TABLE>

<DIV><FONT SIZE=3> </FONT></DIV><BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<DIV STYLE="BORDER:SOLID BLACK 1PX; PADDING:1%; WIDTH:100%">
<P><A NAME=A001></A><FONT SIZE=4 FACE=ARIAL>Prospectus summary</FONT></P>

<P><FONT SIZE=2><I>This is only a summary. This summary does not contain all of
the information that you should consider before investing in our APS. You
should read the more detailed information contained in this Prospectus, the
Statement of Additional Information and the Articles Supplementary attached as
Appendix A to the Statement of Additional Information. Unless otherwise noted,
any reference in this Prospectus to preferred stock is a reference to both our
RPS and APS. Capitalized terms used but not defined in this Prospectus shall
have the meanings given to such terms in the Articles Supplementary. </I></FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>THE FUND</B></FONT></P>

<P><FONT SIZE=2>DNP Select Income Fund Inc.
is a diversified, closed-end management investment company that first offered
its common stock to the public in January 1987. See &#147;The Fund.&#148; </FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>THE OFFERING </B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<FONT SIZE=2>The Fund is offering an
aggregate of 12,000 shares of APS, designated Series M, Series W and Series F,
each at a purchase price of $25,000 per share. The APS is being offered by UBS
Securities LLC (the &#147;Underwriter&#148;). See &#147;Underwriting.&#148; </FONT>

<P><FONT SIZE=2>In addition to the APS
offered by this Prospectus, the Fund intends to issue, subsequent to the
offering of APS made by this Prospectus, an additional 4,000 shares of Series T
APS and 4,000 shares of Series R APS (collectively, the &#147;Additional APS&#148;). The
sale of the APS offered by this Prospectus is not contingent upon the sale of
the Additional APS, and there can be no assurance that the Fund will issue all
or any of the Additional APS. With respect to liquidation and distribution
rights, any Additional APS that is issued will rank on a parity with the APS
offered by this Prospectus and with the RPS.</FONT></P>

<P><FONT SIZE=2>The Fund intends to use this
offering of APS and the offering of the Additional APS to reconfigure and
expand its use of leverage. The Fund&#146;s leverage currently includes (1) five
series of outstanding RPS with an aggregate liquidation preference of $500
million and (2) $200 million of outstanding commercial paper notes (the &#147;CP
Notes&#148;). The Fund will utilize approximately $200 million of the net proceeds
of this offering to retire all of the outstanding CP Notes and will use the
remaining net proceeds to increase its total leverage. The Fund currently
anticipates that the retirement of the CP Notes will be completed within three
months of the completion of this offering and, depending on market conditions,
plans to issue the Additional APS as soon thereafter as practicable. The
leverage obtained through the issuance of the Additional APS will further
increase the Fund&#146;s total leverage. This increase in leverage could have the
effect of increasing the volatility of both the Fund&#146;s net asset value and the
market value of its common stock.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>INVESTMENT OBJECTIVES AND POLICIES </B></FONT></P>

<P><FONT SIZE=2>The Fund&#146;s primary
investment objectives are current income and long-term growth of income.
Capital appreciation is a secondary objective. There can be no assurance that
the Fund will achieve its investment objectives. 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&#146;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. See &#147;The Fund&#146;s investments&#151;Investment objectives and policies.&#148; </FONT></P>

<FONT SIZE=2>The Fund&#146;s investment
policies have been developed to take advantage of the characteristics and
historical performances of securities of companies in the public utilities
industry. Historically, securities of companies in the public utilities
industry have tended to produce current income and long-term growth of income
for their holders. They are thus well suited to the Fund&#146;s primary investment
objectives. The investments of the Fund in securities of public utility
companies are diversified not only in terms of issuers but also in terms of
types of securities, since the Fund may invest in fixed income securities, such
as bonds and preferred stocks, as well as common stocks, convertible securities
and securities of real estate investment trusts. The Fund may invest in the
securities of domestic and foreign</FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

</DIV>
<DIV ALIGN=RIGHT><FONT SIZE=2 FACE=ARIAL><B>1</B></FONT></DIV>
<BR>
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<DIV STYLE="BORDER:SOLID BLACK 1PX; PADDING:1%; WIDTH:100%">
<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>issuers as well as in
securities of companies of any market capitalization, including small and mid
cap stocks. The Fund may vary the percentage of assets invested in any one type
of security based upon the Adviser&#146;s evaluation as to the appropriate portfolio
structure for achieving the Fund&#146;s investment objectives under prevailing
market, economic and financial conditions. Generally, the Fund purchases a
fixed income security only if, at the time of purchase, it is rated investment
grade, although the Fund is not required to divest itself of a security that
falls below investment grade. The Fund does not have a specific maturity policy
but generally does not purchase fixed income securities with maturities longer
than 30 years. See &#147;The Fund&#146;s investments&#151;Investment objectives and policies.&#148;</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>INVESTMENT TECHNIQUES</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<FONT SIZE=2>The Fund may from time to
time employ a variety of investment techniques, including those described below
under the heading &#147;The Fund&#146;s investments&#151;Investment techniques,&#148; to hedge
against fluctuations in the price of portfolio securities, to enhance total
return or to provide a substitute for the purchase or sale of securities. Some
of these techniques, such as purchases of put and call options, options on
stock indices and stock index futures and entry into certain credit derivative
transactions, are hedges against or substitutes for investments in equity
investments. Other techniques, such as the purchase of interest rate futures
and entry into transactions involving interest rate swaps, options on interest
rate swaps and certain credit derivatives, are hedges against or substitutes
for investments in debt securities. The Fund&#146;s ability to utilize any of the
techniques described in this Prospectus may be limited by restrictions imposed
on its operations in connection with obtaining and maintaining its
qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended (the &#147;Code&#148;), and by rating agencies rating the Fund&#146;s
preferred stock. Though it does not currently make significant use of dividend
capture trading, the Fund may seek to enhance the level of dividend income it
receives by engaging in such trading in the future. In a dividend capture
trade, the Fund sells a stock that it held past the stock&#146;s ex-dividend date to
purchase another stock paying a dividend before the next dividend of the stock
being sold. By entering into such trades, the Fund could augment the amount of
dividend income it receives over the course of a year. </FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>USE OF LEVERAGE </B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>As discussed above, the
Fund&#146;s leverage currently includes (1) five series of outstanding RPS with an
aggregate liquidation preference of $500 million and (2) $200 million of
outstanding CP Notes. Throughout this Prospectus, debt securities of the Fund,
such as the CP Notes, and debt for borrowed money are sometimes collectively
referred to as &#147;Borrowings.&#148;</FONT></DIV>

<P><FONT SIZE=2>At December 31, 2005, $200
million of CP Notes were outstanding and the Fund had received proceeds from
the CP Notes of $197,255,382. In addition, the Fund has a $100 million backup
credit facility (under which it had no Borrowings as of December 31, 2005) to
provide liquidity for meeting its obligations under the CP Notes. The Fund intends
to utilize a portion of the net proceeds of this offering to pay in full all
amounts outstanding under the CP Notes, after which the Fund intends to
discontinue its CP Note program and terminate the related backup credit
facility.</FONT></P>

<P><FONT SIZE=2>All Borrowings will have
seniority over the APS and the RPS and payments to holders of APS and RPS in
liquidation or otherwise will be subject to the prior payment of any
Borrowings. By the same token, the Fund&#146;s preferred stock, including the APS
and the RPS, will have seniority over the Fund&#146;s common stock. Consequently,
changes in the value of the Fund&#146;s portfolio will be borne initially by holders
of the Fund&#146;s common stock. If there is a net decrease (or increase) in the
value of the Fund&#146;s investment portfolio, the use of leverage will likely cause
a greater decrease (or increase) in the net asset value per common share than
if the Fund were not leveraged. See &#147;The Fund&#146;s investments&#151;Use of leverage&#148;
and &#147;Description of capital structure&#151;Description of borrowings.&#148;</FONT></P>

<FONT SIZE=2 FACE=ARIAL><B>INTEREST RATE TRANSACTIONS</B></FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>In connection with the
Fund&#146;s use of leverage through its preferred stock and CP Notes, the Fund may
enter into interest rate swap or cap transactions. Interest rate swaps involve
the Fund&#146;s agreement with the swap counterparty to pay a fixed rate payment in
exchange for the counterparty paying the Fund a variable rate payment that is
intended to approximate the Fund&#146;s variable rate payment obligation on its
preferred stock or variable rate borrowing. The payment obligation would</FONT></P>

</DIV>
<DIV><FONT SIZE=2 FACE=ARIAL><B>2</B></FONT></DIV>
<BR>
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<DIV STYLE="BORDER:SOLID BLACK 1PX; PADDING:1%; WIDTH:100%">
<DIV><FONT SIZE=3> </FONT></DIV>

<FONT SIZE=2>be based on the notional
amount of the swap. The Fund&#146;s payment obligations under the swap are general
unsecured obligations of the Fund and are ranked senior to distributions under
the common stock and preferred stock. The Fund may use an interest rate cap,
which would require it to pay a premium to the cap counterparty and would
entitle it, to the extent that a specified variable rate index exceeds a
predetermined fixed rate, to receive from the counterparty payment of the
difference based on the notional amount. The Fund would use interest rate swaps
or caps only with the intent to reduce or eliminate the effect that an increase
in short-term interest rates could have on common share net earnings as a
result of leverage. See &#147;The Fund&#146;s investments&#151;Interest rate transactions.&#148; </FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>INVESTMENT ADVISER AND ADMINISTRATOR </B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>Duff &amp; Phelps Investment
Management Co. is the Fund&#146;s investment adviser. The Adviser is registered with
the SEC as an investment adviser under the Investment Advisers Act of 1940 (the
&#147;Advisers Act&#148;). The Adviser (together with its predecessor) has been in the
investment advisory business for more than 70 years and has acted as the Fund&#146;s
investment adviser since the Fund&#146;s inception in 1987. As of December 31, 2005,
the Adviser managed approximately $6.1 billion in assets, including
approximately $2.6 billion in securities of public utility companies. The
Adviser acts as investment adviser to two other closed-end investment companies
registered under the Investment Company Act of 1940 (the &#147;Investment Company
Act&#148;) and three open-end investment companies registered under the Investment
Company Act.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>J.J.B. Hilliard, W.L. Lyons,
Inc. (the &#147;Administrator&#148;) is the Fund&#146;s administrator. The Administrator is a
wholly-owned subsidiary of The PNC Financial Services Group, Inc. The
Administrator provides administrative services required in connection with the
operation of the Fund.</FONT></P>

<P><FONT SIZE=2>The Fund pays a quarterly
fee to the Adviser for investment advisory services at an annual rate of 0.60%
of the Fund&#146;s average weekly net assets up to $1.5 billion and 0.50% of average
weekly net assets in excess of $1.5 billion. The Fund pays a quarterly fee to
the Administrator for administrative services at an annual rate of 0.25% of the
Fund&#146;s average weekly net assets up to $100 million, 0.20% of the average
weekly net assets from $100 million to $1.0 billion and 0.10% of the average
weekly net assets over $1.0 billion. </FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>RISKS</B></FONT></P>

<P><FONT SIZE=2>The following describes
various principal risks of investing in the APS and the Fund. A more detailed
description of these and other risks of investing in the APS and the Fund are
described under &#147;Risks&#148; in this Prospectus.</FONT></P>

<P><FONT SIZE=4 FACE=ARIAL>Risks of
investing in the APS</FONT></P>



<DIV><FONT SIZE=3> </FONT></DIV>
<DIV><FONT SIZE=2 FACE=ARIAL><B>Auction risk</B></FONT></DIV>
<DIV><FONT SIZE=2>The dividend rate for the
APS normally is set through an auction process. In the auction, holders of APS
may indicate the dividend rate at which they would be willing to hold or sell
their APS or purchase additional APS. The auction also provides liquidity for
the sale of APS. An auction fails if there are more shares of APS offered for
sale than there are buyers for shares of APS. You may not be able to sell your
APS at an auction if the auction fails. Finally, if you elect to retain your
APS in connection with an auction, and all other holders also elect to retain
their APS in connection with that auction, then the applicable dividend rate
for the next dividend period will be the &#147;all-hold&#148; rate, which may be less
than the market rate. See &#147;Risks&#151;Auction risk.&#148; </FONT></DIV>


<BR>
<DIV><FONT SIZE=2 FACE=ARIAL><B>Secondary market risk</B></FONT></DIV>

<DIV><FONT SIZE=2>If you try to sell shares of
your APS between auctions, you may not be able to sell any or all of your APS
or you may not be able to sell them for $25,000 per share plus accumulated
dividends. If the Fund has designated a special dividend period, changes in
interest rates could affect the price you would receive if you sold your shares
in the secondary market. Broker-dealers that maintain a secondary trading
market for the APS are not required to maintain this market, and the Fund is
not</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

</DIV>
<DIV ALIGN=RIGHT><FONT SIZE=2 FACE=ARIAL><B>3</B></FONT></DIV>
<BR>
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<DIV STYLE="BORDER:SOLID BLACK 1PX; PADDING:1%; WIDTH:100%">
<DIV><FONT SIZE=3> </FONT></DIV>


<FONT SIZE=2>required to redeem shares
either if an auction or an attempted secondary market sale fails because of a
lack of buyers. The APS are not listed on a stock exchange or traded on the
NASDAQ stock market. If you sell your APS to a broker-dealer between auctions,
you may receive less than the price you paid for them, especially if market
interest rates have risen since the last auction. See &#147;Risks&#151;Secondary market
risk.&#148; </FONT>


<BR><BR>
<DIV><FONT SIZE=2 FACE=ARIAL><B>Ratings and asset coverage risk</B></FONT></DIV>


<DIV><FONT SIZE=2>While it is expected that
Moody&#146;s will assign a rating of &#147;Aaa&#148; and S&amp;P will assign a rating of &#147;AAA&#148;
to the APS, such ratings do not eliminate or necessarily mitigate the risks of
investing in the APS. Moody&#146;s or S&amp;P could withdraw or downgrade the APS,
which may make your shares less liquid at an auction or in the secondary
market. If Moody&#146;s or S&amp;P withdraws its rating or downgrades the APS, the
Fund may alter its portfolio or redeem shares of APS in an effort to reinstate
or improve, as the case may be, the rating, although there is no assurance that
the Fund will be able to do so to the extent necessary to restore the prior
rating. The Fund&#146;s ability to meet the asset coverage requirements of the
Investment Company Act may be impaired by decreases in the market value of the
Fund&#146;s total assets, including those assets attributable to the Fund&#146;s preferred
stock and Borrowings. The Fund also may voluntarily redeem APS under certain
circumstances. See &#147;Risks&#151;Ratings and asset coverage risk.&#148; </FONT></DIV>


<BR>
<DIV><FONT SIZE=2 FACE=ARIAL><B>Subordination risk</B></FONT></DIV>


<DIV><FONT SIZE=2>While holders of APS will
have equal liquidation and distribution rights to the holders of RPS, they will
be subordinated to the rights of both the holders of the CP Notes and the
lenders under the Fund&#146;s credit facility. Therefore, dividends, distributions
and other payments to holders of APS in liquidation or otherwise may be subject
to prior payments due to the holders of CP Notes and the lenders under the
Fund&#146;s credit facility. In the event of a default on the Fund&#146;s CP Notes or
under the credit facility, the Fund would not be permitted to declare, pay or
set apart for payment any dividend or other distribution in respect of the APS,
or call for redemption or redeem any shares of APS. If the Fund enters into
other Borrowings or interest rate swaps or caps, the rights of lenders and
counter-parties in those transactions will also be senior to those of the APS.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>Restrictions on dividends and other distributions</B></FONT>

<DIV><FONT SIZE=2>Restrictions imposed on the
declaration and payment of dividends or other distributions to the holders of
the Fund&#146;s common stock or preferred stock, both by the Investment Company Act
and by requirements imposed by rating agencies, might impair the Fund&#146;s ability
to comply with minimum distribution requirements that it must satisfy to
maintain its favorable tax treatment as a regulated investment company for U.S.
federal income tax purposes. </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>Interest rate risk</B></FONT><BR>

<FONT SIZE=2>The APS pays dividends based
on short-term interest rates. If short-term interest rates rise, dividend rates
on the APS will also rise. A sharp increase in short-term interest rates could
cause a &#147;negative arbitrage&#148; situation, where the dividend rate on the APS
would exceed the yield on the Fund&#146;s portfolio securities. In addition, rising
market interest rates could negatively impact the value of the Fund&#146;s
investment portfolio, reducing the amount of assets serving as asset coverage for
the APS.</FONT></P>

<P><FONT SIZE=4 FACE=ARIAL>Risks of investing in the
Fund </FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Investment and market risk</B></FONT><BR>

<FONT SIZE=2>An investment in the Fund is
subject to investment risk, including the possible loss of the entire amount
invested. An investment in the Fund represents an indirect investment in the securities
owned by the Fund, which are generally traded on a securities exchange or in
the over-the-counter markets. The value of these securities, like other market
investments, may move up or down, sometimes rapidly and unpredictably.</FONT></P>
</DIV>

<DIV><FONT SIZE=2 FACE=ARIAL><B>4</B></FONT></DIV>
<BR>
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<DIV STYLE="BORDER:SOLID BLACK 1PX; PADDING:1%; WIDTH:100%">
<P><FONT SIZE=2 FACE=ARIAL><B>Income risk</B></FONT>

<DIV><FONT SIZE=2>The income that holders of
preferred stock and common stock receive from the Fund is based primarily on
the dividends and interest the Fund earns from its investments, which can vary
widely over the short and long term. If prevailing market interest rates drop,
distribution rates of the Fund&#146;s preferred stock holdings and any bond holdings
and preferred and common shareholders&#146; income from the Fund could drop as well.
The Fund&#146;s income also would likely be affected adversely when prevailing
short-term interest rates increase and the Fund is utilizing leverage. </FONT></DIV>

<BR>
<DIV><FONT SIZE=3> </FONT></DIV>
<div><FONT SIZE=2 FACE=ARIAL><B>Management risk</B></FONT></div>

<DIV><FONT SIZE=2>The Fund is subject to
management risk because it is an actively managed portfolio. The Adviser and
the individual portfolio managers apply investment techniques and risk analyses
in making investment decisions for the Fund, but there can be no guarantee that
these will produce the desired results.</FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>Leverage risk</B></FONT>

<DIV><FONT SIZE=2>The Fund&#146;s leveraged capital
structure creates special risks not associated with unleveraged funds having
similar investment objectives and policies. These include the possibility of
higher volatility of the Fund&#146;s net asset value and the asset coverage of the
Fund&#146;s preferred stock.</FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>Utilities industry risk</B></FONT>

<DIV><FONT SIZE=2>The Fund invests a
significant portion of its assets in securities of issuers in the public
utilities industry. This may make the Fund more susceptible to adverse
economic, political or regulatory occurrences affecting this industry. As
concentration in an industry increases, so does the potential for fluctuation
in the net asset value of the Fund&#146;s assets. </FONT></DIV>
<BR>
<DIV><FONT SIZE=2>Certain segments of the
public utilities industry and individual companies within such segments may not
perform as well as the industry as a whole. The public utilities industry
historically has been subject to risks of increases in fuel, purchased power
and other operating costs, high interest costs on borrowings needed for capital
improvement programs and costs associated with compliance with and changes in
environmental and other governmental regulations. Telecommunications companies
in particular have been subject to risks associated with increasing levels of
competition, technology substitution (i.e. wireless, broadband and voice over
Internet protocol, or VoIP), industry overcapacity, consolidation and
regulatory uncertainty.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>Investments in securities of foreign issuers</B></FONT>

<DIV><FONT SIZE=2>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. When
the Fund invests in securities of foreign issuers, it is subject to risks not
typically associated with investing in securities of U.S. companies. These
risks can include currency devaluations and other fluctuations in foreign
currencies, foreign currency exchange controls, greater price volatility,
substantially less liquidity and significantly smaller market capitalization of
securities markets, more substantial government involvement in the economy,
higher rates of inflation, differences in securities regulation and trading,
political uncertainty and other risks.</FONT></DIV>

<P><FONT SIZE=2>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&#146;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. </FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Common stock risk</B></FONT>

<DIV><FONT SIZE=2>The Fund has substantial
exposure to common stocks. Although common stocks have historically generated
higher average returns than fixed-income securities over the long-term, common
stocks also have experienced significantly more volatility in returns. An
adverse event, such as an unfavorable earnings report, may depress the value of
a particular common stock held by the Fund. Also, the</FONT></DIV>

</DIV>
<DIV ALIGN=RIGHT><FONT SIZE=2 FACE=ARIAL><B>5</B></FONT></DIV>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<BR>
<div style="border:solid black 1px;padding:2%; width:100%">

<P><FONT SIZE=2>price of
common stocks are sensitive to general movements in the stock market and a drop
in the stock market may depress the price of common stocks to which the Fund
has exposure. Common stock prices fluctuate for many reasons, including changes
in investors&#146; perceptions of the financial condition of an issuer or the
general condition of the relevant stock market, or when political or economic
events affecting the issuer occur. In addition, common stock prices may be
sensitive to rising interest rates, as the costs of capital rise and borrowing
costs increase.</FONT></P>

<div><FONT SIZE=3> </FONT></div>
<div><FONT SIZE=2 FACE=ARIAL><B>Small and mid cap stock risk</B></FONT></div>

<div><FONT SIZE=2>The Fund may
invest in companies of any market capitalization. The Fund&#146;s investments in
small and medium-sized companies may be subject to more abrupt or erratic
movements in price than its investments in larger, more established companies
because the securities of such companies are less well-known, held primarily by
insiders or institutional investors or may trade less frequently and in lower
volume. Furthermore, small and medium-sized companies are more likely to
experience greater or more unexpected changes in their earnings and growth
prospects. Such companies often have limited financial resources or may depend
on a few key employees, and the products or technologies of such companies may
be at a relatively early stage of development or not fully tested.</FONT></div>
<div><FONT SIZE=3> </FONT></div><BR>
<div><FONT SIZE=2 FACE=ARIAL><B>Preferred stock risk</B></FONT></div>
<div><FONT SIZE=2>The Fund may invest in, and thus may have
exposure to, preferred stocks. Preferred stocks involve credit risk, which is
the risk that a preferred stock will decline in price, or fail to pay dividends
when expected, because the issuer experiences a decline in its financial
status. In addition to credit risk, investment in preferred stocks involves
certain other risks. Certain preferred stocks contain provisions that allow an
issuer under certain conditions to skip distributions (in the case of
&#147;non-cumulative&#148; preferred stocks) or defer distributions (in the case of
&#147;cumulative&#148; preferred stocks). If the Fund owns a preferred stock that is
deferring its distributions, the Fund may be required to report income for tax
purposes while it is not receiving income on this position. Preferred stocks
often contain provisions that allow for redemption in the event of certain tax
or legal changes or at the issuers&#146; call. In the event of redemption, the Fund
may not be able to reinvest the proceeds at comparable rates of return.
Preferred stocks typically do not provide any voting rights, except in cases
when dividends are in arrears beyond a certain time period, which varies by
issue. Preferred stocks are subordinated to bonds and other debt instruments in
a company&#146;s capital structure in terms of priority to corporate income and
liquidation payments, and therefore are subject to greater credit risk than
those debt instruments. Preferred stocks may be significantly less liquid than
many other securities, such as U.S. government securities, corporate debt or
common stock.</FONT></div>
<BR>

<div><FONT SIZE=2 FACE=ARIAL><B>Issuer risk</B></FONT></div>

<div><FONT SIZE=2>The value of
common and preferred stocks may decline for a number of reasons which directly
relate to the issuer, such as management performance, leverage and reduced
demand for the issuer&#146;s goods and services.</FONT></div><BR>

<div><FONT SIZE=2 FACE=ARIAL><B>Debt securities risk</B></FONT></div>

<div><FONT SIZE=2>In addition to
credit risk, investment in debt securities carries certain risks, including:</FONT></div><BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH=95% VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE="WINGDINGS 3">&#134;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><I>Redemption risk </I>&#151; Debt securities sometimes
  contain provisions that allow for redemption in the event of tax or security
  law changes in addition to call features at the option of the issuer. In the
  event of a redemption, the Fund may not be able to reinvest the proceeds at
  comparable rates of return.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE="WINGDINGS 3">&#134;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><I>Limited voting rights </I>&#151; Debt securities
  typically do not provide any voting rights, except in cases when interest
  payments have not been made and the issuer is in default.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE="WINGDINGS 3">&#134;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2><I>Liquidity </I>&#151; Certain debt securities may be
  substantially less liquid than many other securities, such as U.S. government
  securities or common stocks.</FONT></P>
</TD>
</TR>
</TABLE>
<BR>

</div>

<div><FONT SIZE="2" FACE=ARIAL><B>6</B> </FONT></div><BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>

<div style="border:solid black 1px;padding:2%; width:100%">

<DIV><FONT SIZE=2 FACE=ARIAL><B>Credit risk</B></FONT></DIV>
<DIV><FONT SIZE=2>Credit risk is
the risk that an issuer of a preferred or debt security will become unable to
meet its obligation to make dividend, interest and principal payments. In
general, lower rated preferred or debt securities carry a greater degree of
credit risk. If rating agencies lower their ratings of preferred or debt
securities in the Fund&#146;s portfolio, the value of those obligations could
decline, which could jeopardize the rating agencies&#146; ratings of the preferred
stock issued by the Fund. In addition, the underlying revenue source for a
preferred or debt security may be insufficient to pay dividends, interest or
principal in a timely manner. Because a primary source of income for the Fund
is the dividend, interest and principal payments on the preferred or debt
securities in which it invests, any default by an issuer of a preferred or debt
security could have a negative impact on the Fund&#146;s ability to pay dividends to
its investors. Even if the issuer does not actually default, adverse changes in
the issuer&#146;s financial condition may negatively affect its credit rating or
presumed creditworthiness. These developments would adversely affect the market
value of the issuer&#146;s obligations or the value of credit derivatives if the
Fund has sold credit protection.</FONT></DIV><BR>

<DIV><FONT SIZE=2 FACE=ARIAL><B>Hedging strategy risk</B></FONT></DIV>
<DIV><FONT SIZE=2>Certain of the
investment techniques that the Fund may employ for hedging or, under certain
circumstances, to increase income or total return, will expose the Fund to
risks. Such investment techniques may include entering into interest rate and
stock index futures contracts and options on interest rate and stock index
futures contracts, purchasing and selling put and call options on securities
and stock indices, purchasing and selling securities on a when-issued or
delayed delivery basis and lending portfolio securities. The Fund intends to
comply with regulations of the SEC involving &#147;covering&#148; or segregating assets
in connection with the Fund&#146;s use of options and futures contracts.</FONT></DIV>

<P><FONT SIZE=2>There are
economic costs of hedging reflected in the pricing of futures, swaps, options
and contracts related to options on positions in interest rate swaps which can
be significant, particularly when long-term interest rates are substantially
above short-term interest rates. There may be an imperfect correlation between
changes in the value of the Fund&#146;s portfolio holdings and hedging positions
entered into by the Fund, which may prevent the Fund from achieving the
intended hedge or expose the Fund to risk of loss. In addition, the Fund&#146;s
success in using hedge instruments is subject to the Adviser&#146;s ability to
predict correctly changes in the relationships of such hedge instruments to the
Fund&#146;s portfolio holdings, and there can be no assurance that the Adviser&#146;s
judgment in this respect will be accurate. Consequently, the use of hedging
transactions might result in a poorer overall performance for the Fund, whether
or not adjusted for risk, than if the Fund had not hedged its portfolio
holdings.</FONT></P>


<div><FONT SIZE=3> </FONT></div>
<DIV><FONT SIZE=2 FACE=ARIAL><B>Derivatives risk</B></FONT></DIV>

<div><FONT SIZE=2>To the extent
the Fund enters into derivatives transactions (such as futures contracts and
options thereon, options and swaps), the Fund will be subject to increased risk
of principal loss due to imperfect correlation or unexpected price or interest
rate movements. The Fund also will be subject to credit risk with respect to
the counterparties to the derivatives contracts purchased by the Fund. If a
counterparty becomes bankrupt or otherwise fails to perform its obligations
under a derivative contract due to financial difficulties, the Fund may
experience significant delays in obtaining any recovery under the derivative
contract in a bankruptcy or other reorganization proceeding. The Fund may
obtain only a limited recovery or may obtain no recovery in such circumstances.
As a general matter, dividends received on hedged stock positions are
characterized as ordinary income and are not eligible for favorable tax
treatment. In addition, use of derivatives may give rise to short-term capital
gains and other income that would not qualify for payments by the Fund of
qualified dividends, as described under &#147;U.S. federal income tax
matters&#151;Taxation of shareholders.&#148; </FONT></div>

<BR>
<DIV><FONT SIZE=2 FACE=ARIAL><B>Dividend capture risk</B></FONT></DIV>

<div><FONT SIZE=2>The Fund may
seek to increase its dividend income using a strategy called &#147;dividend
capture.&#148; In a dividend capture trade, the Fund sells a stock that it held past
the stock&#146;s ex-dividend date to purchase another stock paying a dividend before
the next dividend of the stock being sold. The use of dividend capture
strategies exposes the Fund to increased trading costs and the potential for
capital loss. Since 2004, the Fund has not made significant use of dividend
captures but may decide to do so in the future. </FONT></div>
<div><FONT SIZE=3> </FONT></div>


</div>
<div align=right><FONT SIZE="2" face=arial><B>7</B> </FONT></div><BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<div style="border:solid black 1px;padding:2%; width:100%">

<DIV><FONT SIZE=2 FACE=ARIAL><B>Portfolio turnover risk</B></FONT></DIV>

<DIV><FONT SIZE=2>The techniques
and strategies contemplated by the Fund might result in a high degree of
portfolio turnover. The Fund cannot accurately predict its securities portfolio
turnover rate, but anticipates that its annual portfolio turnover rate will not
exceed 100% (excluding turnover of securities having a maturity of one year or
less) under normal market conditions, although it could be materially higher
under certain conditions. A high turnover rate (100% or more) necessarily
involves greater expenses to the Fund and may result in realization of net
short-term capital gains.</FONT></DIV><BR>

<DIV><FONT SIZE=2 FACE=ARIAL><B>Inflation risk</B></FONT></DIV>

<DIV><FONT SIZE=2>Inflation risk
is the risk that the purchasing power of assets or income from investment will
be worth less in the future as inflation decreases the value of money. As inflation
increases, the real value of the Fund&#146;s preferred stock and common stock, and
distributions thereon, can decline. In addition, during any periods of rising
inflation, dividend rates of preferred stock issued by the Fund would likely
increase, which would tend to further reduce returns to the Fund&#146;s common
shareholders.</FONT></DIV><BR>

<DIV><FONT SIZE=2 FACE=ARIAL><B>Tax risk</B></FONT></DIV>

<DIV><FONT SIZE=2>The Fund&#146;s
investment program and the tax treatment of Fund distributions may be affected
by Internal Revenue Service (&#147;IRS&#148;) interpretations of the Code and future
changes in tax laws and regulations, including changes as a result of the
&#147;sunset&#148; provisions that currently apply to the favorable tax treatment of
qualified dividends. There can be no assurance that any portion of the Fund&#146;s
income distributions will not be fully taxable as ordinary income. In order for
the Fund to avoid corporate-level income tax, the Fund must qualify each year
as a regulated investment company under the Code and distribute all of its net
income. </FONT></DIV><BR>

<div><FONT SIZE=3> </FONT></div>
<DIV><FONT SIZE=2 FACE=ARIAL><B>Market disruption risk</B></FONT></DIV>

<div><FONT SIZE=2>The war with
Iraq and the continuing presence in that country of coalition forces have had a
substantial impact on the U.S. and world economies and securities markets. The
duration and nature of the war and occupation and the potential costs of
rebuilding the Iraqi infrastructure and political systems cannot be predicted
with any certainty. The war and occupation, terrorism and related geopolitical
risks have led, and may in the future lead, to increased short-term market
volatility and may have adverse long-term effects on U.S. and world economies
and markets generally. Those events could also have an acute effect on
individual issuers or related groups of issuers. These risks could also
adversely affect securities markets, interest rates, auctions, secondary
trading, ratings, credit risk, inflation, deflation and other factors relating
to the APS. </FONT></div><BR>

<P><FONT SIZE=2 FACE=ARIAL><B>Anti-takeover provisions</B></FONT>

<DIV><FONT SIZE=2>Certain
provisions of the Fund&#146;s charter and bylaws may be regarded as &#147;anti-takeover&#148;
provisions because they could have the effect of limiting the ability of other
entities or persons to acquire control of the Fund. See &#147;Certain provisions in
the charter and bylaws and certain provisions of Maryland law.&#148; </FONT></DIV>

<div><FONT SIZE=3> </FONT></div>

<P><FONT SIZE=2 FACE=ARIAL><B>TRADING MARKET </B></FONT></P>
<div><FONT SIZE=3> </FONT></div>
<div><FONT SIZE=2>The APS will
not be listed on an exchange. Instead, you may buy or sell shares of APS at an
auction, which normally is held weekly, by submitting orders to a broker-dealer
that has entered into an agreement with the auction agent and the Fund (a
&#147;Broker-Dealer&#148;), or to a broker-dealer that has entered into a separate
agreement with a Broker-Dealer. In addition to the auctions, Broker-Dealers and
other broker-dealers may maintain a secondary trading market in APS outside of
auctions, but may discontinue this activity at any time. There is no assurance
that a secondary market will provide shareholders with liquidity. You may
transfer shares outside of auctions only to or through a Broker-Dealer or a
broker-dealer that has entered into a separate agreement with a Broker-Dealer.</FONT></div>
<div><FONT SIZE=3> </FONT></div>


</div>
<div><FONT SIZE="2" FACE=ARIAL><B>8</B> </FONT></div><BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>

<div style="border:solid black 1px;padding:2%; width:100%">

<P><FONT SIZE=2>The table
below shows the first auction date for the APS and the day on which each
subsequent auction will normally be held for the APS. The first auction date
for the APS will be the business day before the dividend payment date for the
initial dividend period for the APS. The start date for subsequent dividend
periods will normally be the business day following the auction dates unless
the then-current dividend period is a special dividend period or the first day
of the subsequent dividend period is not a business day.</FONT></P>

<div><FONT SIZE=3> </FONT></div>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="26%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="38%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="32%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Initial
  auction</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Subsequent</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1 FACE=ARIAL><B>Series</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>date</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>auction
  day</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR BGCOLOR="#E6E6E6">
<TD VALIGN=TOP>
<P><FONT SIZE=2>Series M</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>Monday</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Series W</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>Wednesday</FONT></P>
</TD>
</TR>
<TR BGCOLOR="#E6E6E6">
<TD VALIGN=TOP>
<P><FONT SIZE=2>Series F</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>Friday</FONT></P>
</TD>
</TR>
</TABLE><BR>

<div><FONT SIZE=2 FACE=ARIAL><B>DIVIDENDS AND
DIVIDEND PERIODS </B></FONT></DIV>
<BR>
<DIV><FONT SIZE=2>The table
below shows the dividend rate for the initial dividend period on the APS. For
subsequent dividend periods, the APS will pay dividends based on a rate set at
auctions, normally held weekly. In most instances, dividends are paid weekly,
on the day following the end of the dividend period. The rate set at auction
will not exceed the maximum dividend rate. See &#147;Description of APS&#151;Dividends
and dividend periods.&#148; </FONT></DIV>

<P><FONT SIZE=2>In addition,
the table below shows the date from which dividends on the APS will accumulate
at the initial rate, the dividend payment date for the initial dividend period
and the day on which subseq-nent dividends will normally be paid. If the day on
which dividends normally would be paid is not a business day, then your
dividends will be paid on the first business day that falls after that day.</FONT></P>

<P><FONT SIZE=2>Finally, the
table below shows the number of days of the initial dividend period for the
APS. Subsequent dividend periods generally will be seven days. The dividend
payment date for any special dividend period of more than seven days will be
set out in the notice designating such special dividend period. See
&#147;Description of APS&#151;Dividends and dividend periods&#151;Declaration of special
dividend periods.&#148; </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="12%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="15%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="19%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="14%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=bottom>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Initial<BR>
  dividend<BR>
  rate</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=bottom>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Date
  of<BR>
  accumulation<BR>
  at initial rate</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=bottom>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Dividend
  payment<BR>
  date for initial<BR>
  dividend period</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=bottom>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Subsequent<BR>
  dividend<BR>
  payment day</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=bottom>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Number
  of<BR>
  days of<BR>
  initial<BR>
  dividend<BR>
  period</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR  bgcolor="#e6e6e6">
<TD VALIGN=TOP>
<P><FONT SIZE=2>Series M</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Series W</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR  bgcolor="#e6e6e6">
<TD VALIGN=TOP>
<P><FONT SIZE=2>Series F</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE><BR>

<DIV><FONT SIZE=2 FACE=ARIAL><B>TAXATION</B></FONT></DIV>
<BR>
<DIV><FONT SIZE=2>Dividends paid
with respect to APS should constitute dividends for federal income tax purposes
to the extent attributable to the Fund&#146;s current or accumulated earnings and
profits. For a further discussion of the tax treatment of dividends paid by the
Fund, see &#147;U.S. federal income tax matters&#151;Taxation of shareholders.&#148;
Distributions of net capital gain, to the extent so designated, will be treated
as long-term capital gains.</FONT></DIV>
<div><FONT SIZE=3> </FONT></div>

<P><FONT SIZE=2 FACE=ARIAL><B>REDEMPTION</B></FONT></P>
<div><FONT SIZE=3> </FONT></div>
<div><FONT SIZE=2>The Fund may
be required to redeem all or a portion of the APS if, for example, the Fund
does not meet an asset coverage ratio required by law or to correct a failure
to meet a rating agency guideline in a timely manner. The Fund voluntarily may
redeem shares of APS under certain conditions. See &#147;Description of
APS&#151;Redemption&#148; and &#147;Description of APS&#151;Rating agency guidelines and asset
coverage.&#148; </FONT></div>
<div><FONT SIZE=3> </FONT></div>

<P><FONT SIZE=2 FACE=ARIAL><B>LIQUIDATION
PREFERENCE </B></FONT></P>
<div><FONT SIZE=3> </FONT></div>
<div><FONT SIZE=2>The
liquidation preference of the APS will be $25,000 per share, plus an amount
equal to accumulated but unpaid dividends. See &#147;Description of
APS&#151;Liquidation.&#148;</FONT></div>
<div><FONT SIZE=3> </FONT></div>
</div>

<DIV align=right><FONT SIZE="2" FACE=ARIAL><B>9</B> </FONT></DIV><BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>


<div style="border:solid black 1px;padding:2%; width:100%">

<P><FONT SIZE=2 FACE=ARIAL><B>RATINGS </B></FONT></P>
<div><FONT SIZE=3> </FONT></div>
<div><FONT SIZE=2>The APS is
expected to be issued with a rating of &#147;Aaa&#148; from Moody&#146;s and &#147;AAA&#148; from
S&amp;P. In order to maintain these ratings, the Fund must own portfolio
securities of a sufficient value and with adequate credit quality and
diversification to meet the rating agencies&#146; guidelines. See &#147;Description of
APS&#151;Rating agency guidelines and asset coverage.&#148; </FONT></div>
<div><FONT SIZE=3> </FONT></div>
<P><FONT SIZE=2 FACE=ARIAL><B>VOTING RIGHTS</B></FONT></P>
<div><FONT SIZE=3> </FONT></div>

<div><FONT SIZE=2>The Investment
Company Act requires that the holders of the Fund&#146;s preferred stock, voting as
a separate class, have the right to elect at least two directors at all times
and to elect a majority of the directors at any time when two years&#146; dividends
on the preferred stock are unpaid. In each case, the remaining directors are
elected by holders of the Fund&#146;s common stock, voting as a separate class. The
holders of preferred stock vote as a separate class or classes on certain other
matters as required under the Fund&#146;s charter, the Investment Company Act and
Maryland law. See &#147;Description of APS&#151;Voting rights&#148; and &#147;Certain provisions in
the charter and bylaws <FONT SIZE=2>and certain provisions of Maryland law</FONT>.&#148;</FONT></div>

<div><FONT SIZE=3> </FONT></div>
<P><FONT SIZE=2 FACE=ARIAL><B>U.S. FEDERAL INCOME
TAX STATUS OF THE FUND </B></FONT></P>

<P><FONT SIZE=2>The Fund has
elected to be treated, has qualified and intends to continue to qualify as a
regulated investment company for U.S. federal income tax purposes. As a
regulated investment company, the Fund generally is not required to pay
corporate-level federal income taxes on any ordinary income or capital gains
that it distributes to its shareholders as dividends. To maintain its regulated
investment company status, the Fund must meet specified source-of-income and
asset diversification requirements and distribute annually at least 90% of its
ordinary income and realized net short-term capital gains in excess of realized
net long-term capital losses, if any. See &#147;U.S. federal income tax matters.&#148; </FONT></P>


</div>

        <div><FONT SIZE="2" FACE=ARIAL><B>10</B> </FONT></div><BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>
<DIV STYLE='BORDER:1PX SOLID BLACK;PADDING:2%;WIDTH:100%'>
<P><FONT SIZE=4 FACE=ARIAL><A NAME=A002></A>Financial
highlights </FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>SELECTED PER SHARE DATA AND RATIOS </B></FONT></P>

<P> <BR><FONT SIZE=2>The selected financial data
below sets forth per share operating performance data, total investment return,
ratios and supplemental data for each year in the ten-year period ended
December 31, 2005. The financial information should be read in conjunction with
the financial statements of the Fund incorporated by reference into this
Prospectus and the Statement of Additional Information. For the years ended
December 31, 2002, 2003, 2004 and 2005, the financial information set forth
below was audited by Ernst &amp; Young LLP. For prior years, the financial
information set forth below was audited by other independent accountants, whose
reports expressed an unqualified opinion on such financial information. </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="13%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="29" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>For the Year Ended December 31,</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="29" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>2005</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>2004</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>2003</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>2002</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>2001</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>2000</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>1999</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>1998</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>1997</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>1996</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>Net asset value:</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Beginning of year</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>8.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>7.94</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>7.37</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>9.18</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>10.51</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>8.77</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>10.36</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>9.90</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>8.44</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>8.85</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Net investment income(1)(2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.41</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.77</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.88</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.89</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.88</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.85</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>0.84</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Net realized and unrealized gain (loss) on investments</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>0.14</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.06</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>0.62</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(1.78</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(1.23</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.76</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(1.59</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>0.46</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.46</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(0.41</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Dividends on preferred stock from net investment income(1)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.04</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.08</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.11</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.10</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.10</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.10</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.10</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Total from investment operations applicable to common
stock</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>0.55</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.60</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.37</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(1.03</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(0.54</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>2.53</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(0.80</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.24</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>2.21</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>0.33</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Dividends on common stock from and in excess of net investment
income</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.80</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.78</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.78</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.74</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Return of capital</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(0.04</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Total distributions</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.80</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.78</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.78</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>(0.74</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Net asset value</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>End of year</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.51</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.75</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>7.94</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>7.37</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.18</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>10.51</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.77</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>10.36</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.90</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.44</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Per share market value</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>End of year</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>10.39</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>11.92</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>10.96</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.90</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>11.06</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>10.50</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.31</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>11.25</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>10.13</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.63</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Ratio of expenses to average net assets applicable to common
stock(1)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>2.24</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.86</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.89</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.44</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.57</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.66</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.46</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.45</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1.53</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Ratio of net investment income to average net assets applicable to
  common stock(1)(2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>4.51</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>5.63</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.88</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.63</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.63</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.73</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.40</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>8.85</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>9.87</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>7.79</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Total investment return on market value</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(6.16</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>17.35</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>19.82</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(3.04</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>13.67</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>37.37</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>(19.85</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>)%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>19.95</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>27.69</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>4.68</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Portfolio turnover rate (2)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>21.99</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>43.71</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>242.69</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>197.27</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>213.48</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>229.70</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>223.78</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>251.19</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>213.57</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>226.21</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=1>Net assets applicable to common stock, end of year (000s
omitted)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1,904,206
  </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1,935,437</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1,738,286</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1,592,970</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1,959,697</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>2,216,014</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1,828,128</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>2,131,692</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>2,010,035</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>1,686,443</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=GRAY ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Upon the adoption of FAS 150 in 2003, dividends on
  preferred stock are included in interest expense and are part of net
  investment income. Absent this change in accounting, per share net investment
  income and dividends on preferred stock would have been $0.47 and $0.06,
  respectively in 2005, $0.58 and $0.03, respectively in 2004 and $0.78 and
  $0.03, respectively in 2003.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Beginning in 2004, the Fund reduced its use of
  short-term trading strategies designed to capture dividend income and made
  increased use of realized gains to supplement its investment income. Until
  the Fund utilizes all of its tax loss carryforwards, distributions to
  shareholders are expected to be treated as ordinary income for federal income
  tax purposes. In addition, the reduced use of short-term trading strategies
  reduced the Fund&#146;s portfolio turnover rate during 2004 and 2005.</FONT></P>
</TD>
</TR>
</TABLE>

</DIV>
<div ALIGN=RIGHT><FONT SIZE=2 FACE=ARIAL><B>11</B></FONT></div>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<DIV STYLE='BORDER:1PX SOLID BLACK;PADDING:2%;WIDTH:100%'>
<P><FONT SIZE=2 FACE=ARIAL><B>INFORMATION REGARDING SENIOR SECURITIES</B></FONT></P>

<P> <BR><FONT SIZE=2>The following table provides
information about the Fund&#146;s CP Notes and RPS as of the dates indicated. Except
as noted in the table, for the years ended December 31, 2002, 2003, 2004 and
2005, the information was audited by Ernst &amp; Young LLP. For prior years,
except as noted in the table, the financial information set forth below was
audited by other independent accountants, whose reports expressed an
unqualified opinion on such financial information.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="19%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>CP
  Notes</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>RPS</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Average
  Market</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Asset
  Coverage</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Liquidation</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Value</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>per
  $1,000 of</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Preference</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Aggregate</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>per
  $100,000 of</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Principal</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Aggregate</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>and
  Average</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Asset
  Coverage</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Amount</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Principal</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Amount
  (2)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Amount</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Market
  Value</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>per
  Share (4)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Outstanding</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Amount
  (1)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>(unaudited)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Outstanding</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>per
  Share (3)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>(unaudited)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>December 31, 2005</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>197,255,382</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>$&nbsp;100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>$&nbsp;13,188</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>$&nbsp;100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>$&nbsp;504,983</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>December 31, 2004</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>198,361,375</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>13,278</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>487,087</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>December 31, 2003</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>198,974,940</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>12,249</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>447,657</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>December 31, 2002</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>197,955,439</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>11,573</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>418,594</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>December 31, 2001</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>196,827,285</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>13,497</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>491,939</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>December 31, 2000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>193,187,392</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>15,059</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>543,203</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>December 31, 1999</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>193,842,781</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>13,010</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>465,626</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>December 31, 1998</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>171,002,097</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>16,390</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>526,338</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>December 31, 1997</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>98,441,884</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>26,498</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>502,007</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>December 31, 1996</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>98,360,808</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>23,229</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>100,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>437,289</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=GRAY ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Average market value is calculated as the face value
  of the CP Notes.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Asset coverage is calculated by subtracting the
  Fund&#146;s total liabilities (not including the CP Notes or the RPS) from the
  Fund&#146;s total assets and dividing that amount by the total number of units of
  CP Notes, where one unit equals $1,000 of CP Notes.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(3)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Liquidation preference per share of RPS refers to the
  amount that holders of RPS are entitled to receive per share before any
  distributions are made to the holders of the common stock, in the event the
  Fund is ever liquidated. The average market value per share is the price at
  which shares of RPS are remarketed, which is equal to the liquidation preference
  per share.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>Asset coverage is calculated by subtracting the
  Fund&#146;s total liabilities (not including the RPS) from the Fund&#146;s total assets
  and dividing that amount by the number of RPS outstanding.</FONT></P>
</TD>
</TR>
</TABLE>
</DIV>

<div><FONT SIZE=2 FACE=ARIAL><B>12</B></FONT></div>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=4 FACE=ARIAL><A NAME=A003></A>The Fund</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The Fund is a closed-end,
diversified management investment company that is registered under the
Investment Company Act. The Fund was incorporated in the State of Maryland on
November 26, 1986 and first offered its common stock to the public on January
21, 1987. The Fund&#146;s common stock is traded on the New York Stock Exchange
under the symbol &#147;DNP.&#148; In 1988, the Fund issued 5,000 shares of RPS in five
series of 1,000 shares each. The Fund&#146;s principal office is located at 55 East
Monroe Street, Suite 3600, Chicago, Illinois 60603, and its telephone number is
(312) 368-5510.</FONT></P>

<P> <BR><FONT SIZE=2>The Fund&#146;s board of
directors has authorized the Fund to issue up to $200,000,000 of CP Notes in
minimum denominations of $100,000 with maturities up to 270 days. The CP Notes
are generally sold on a discount basis, but may be sold on an interest-bearing
basis. During 2005, interest rates on the CP Notes ranged from 2.60% to 4.54%.
At December 31, 2005, $200 million of CP Notes were outstanding and the Fund
had received proceeds of $197,255,382. The Fund intends to utilize a portion of
the net proceeds of this offering to pay in full all amounts outstanding under
the CP Notes, after which the Fund intends to discontinue its CP Note program
and terminate the related backup credit facility.</FONT></P>

<P><FONT SIZE=2>The following table provides
information about the Fund&#146;s outstanding stock as of December 31, 2005:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="29%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="29%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="19%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP >
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Number
  of shares</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Number
  of shares</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>held
  by the Fund</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Number
  of shares</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1 FACE=ARIAL><B>Title of class</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>authorized</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>or
  for its account</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>outstanding</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Common Stock</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>250,000,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>223,835,635</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Preferred Stock</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>100,000,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>RPS, Series A</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>RPS, Series B</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>RPS, Series C</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>RPS, Series D</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>RPS, Series E</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>
<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=4 FACE=ARIAL><A NAME=A004></A>Use of proceeds</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>
<div><FONT SIZE=2>The net proceeds of this
offering will be approximately $296,591,900 after payment of the sales loads
and estimated offering expenses. The Fund will utilize a portion of the net
proceeds of this offering to pay in full all amounts outstanding under the CP
Notes, and the remaining net proceeds will be invested in accordance with the
Fund&#146;s investment objectives and policies as stated below. We currently
anticipate that the Fund will be able to invest substantially all of the net
proceeds of this offering in securities that meet the Fund&#146;s investment
objectives and policies within three months after the completion of this
offering. Pending such investment, it is anticipated that the proceeds will be
invested in short-term securities.</FONT></div>
<DIV><FONT SIZE=3> </FONT></DIV>
<BR>
<div><HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER></div>
<div style="margin-top:-6px" ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>13</B></FONT></div>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>

<P><FONT SIZE=4 FACE=ARIAL><A NAME=A005></A>Capitalization
(unaudited)</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>
<div><FONT SIZE=2>The following table sets
forth the  capitalization of the Fund as of December 31, 2005, and as
adjusted to give effect to the issuance of the APS offered hereby (including
estimated offering expenses and sales loads of $3,408,100):</FONT></div>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="68%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Actual</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>As
  adjusted</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Preferred stock, $0.001
  par value, 100,000,000 shares authorized</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>APS offered hereby, $25,000 stated value per share,
at liquidation
  value, 12,000 shares issued and outstanding, as adjusted</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>300,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>RPS, $100,000 stated value per share, at
liquidation value, 5,000
  shares issued and outstanding</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>500,000,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2><B>Shareholders&#146;
  equity:</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Common stock, $0.001 par value, 250,000,000 shares authorized,
  223,835,635 shares issued and outstanding(1)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>223,836</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>223,836</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Paid-in surplus</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,893,950,922</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,890,542,822</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Accumulated net realized loss on investments</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>(248,087,764</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>(248,087,764</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Distributions in excess of book net investment income</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(33,403,581</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>(33,403,581</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Net unrealized appreciation (depreciation) on investments and foreign
  currency translation</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>291,523,495</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>291,523,495</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Net assets applicable to common stock</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,904,206,908</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,900,798,808</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>
<DIV><FONT SIZE=3> </FONT></DIV>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=GRAY ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>None of these outstanding
  shares are held by or for the account of the Fund.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=4 FACE=ARIAL><A NAME=A006></A>Portfolio
composition</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>
<div><FONT SIZE=2>As of December 31, 2005,
approximately 78% of the market value of the Fund&#146;s portfolio, exclusive of
short-term instruments, was invested in equity securities and approximately 22%
was invested in other securities. The following table sets forth certain
information with respect to the composition as of December 31, 2005 of the
fixed income portion of the Fund&#146;s investment portfolio, exclusive of
short-term instruments, based on the highest rating assigned to each
investment.</FONT></div>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="8%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="21%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP NOWRAP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Number
  of</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1 FACE=ARIAL><B>S&amp;P(1)</B></FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1 FACE=ARIAL><B>Moody&#146;s(1)</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>issues</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Value</B></FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Percentage</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>AAA</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Aaa</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>2</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>$&nbsp;&nbsp;47,007,684</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>8.2</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=LEFT><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>AA</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Aa</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0.0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=LEFT><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>A</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>A</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>23</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>289,217,356</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>50.8</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=LEFT><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>BBB</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Baa</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>210,557,322</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>37.0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=LEFT><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>BB</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Ba</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>22,747,111</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>4.0</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=LEFT><FONT SIZE=2>%</FONT></P></TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Unrated</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Unrated</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>0.0</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=LEFT><FONT SIZE=2>%</FONT></P></TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P STYLE='MARGIN-RIGHT:0IN;MARGIN-LEFT:17.3PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2>Total:</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>42</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>569,529,473</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>100.0</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=LEFT><FONT SIZE=2>%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>
<DIV><FONT SIZE=3> </FONT></DIV>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=GRAY ALIGN=LEFT>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>S&amp;P rating categories may be modified further by
  a plus (+) or minus (-) in the case of AA, A, BBB and BB ratings. Moody&#146;s
  rating categories may be modified further by a 1, 2 or 3 in the case of Aa,
  A, Baa and Ba ratings.</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<div><HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER></div>
<div style="margin-top:-6px"><FONT SIZE=2 FACE=ARIAL><B>14</B></FONT></div>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><A NAME=A007></A><FONT  SIZE=4 FACE=ARIAL>The Fund&#146;s
investments</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The following section
describes the Fund&#146;s investment objectives and policies, fundamental investment
restrictions, portfolio contents and investment techniques. More complete
information describing the Fund&#146;s investments can be found in the Statement of
Additional Information, which is incorporated into this Prospectus by
reference.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>INVESTMENT OBJECTIVES AND POLICIES</B></FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s primary
investment objectives are current income and long-term growth of income.
Capital appreciation is a secondary objective. There can be no assurance that
the Fund will achieve its investment objectives.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>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&#146;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&#146;s investment objectives stated in the preceding paragraph and its
policy of concentrating its investments in the public utilities industry are
fundamental policies and may not be changed without the approval of the holders
of a &#147;majority&#148; (as defined in the Investment Company Act) of the outstanding
shares of the Fund&#146;s common stock and preferred stock voting together as a
single 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. </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s investment
policies have been developed to take advantage of the characteristics and
historical performances of securities of companies in the public utilities industry.
Many of these companies have established a reputation for paying regular
dividends and for increasing their common stock dividends over time. Investment
decisions are made by the Adviser&#146;s experienced team of portfolio managers and
research analysts primarily on the basis of fundamental research. In evaluating
particular issuers, the Adviser considers a number of factors, including
historical growth rates and rates of return on capital, financial condition and
resources, management skills and strategies and factors specific to the public
utilities industry, such as regulatory environment, energy sources and
environmental compliance measures. With respect to investments in equity
securities, the Adviser seeks stocks that are attractively valued and produce
an attractive level of dividend income. The Adviser also considers the
prospective growth in earnings and dividends in relation to price/earnings
ratios, yield and risk. The Adviser believes that above-average dividend
returns and below-average price/earnings ratios are factors that not only
provide current income but also generally tend to moderate risk and to afford
opportunity for appreciation of securities owned by the Fund. In keeping with
its value approach, the Adviser selects securities selling at what it believes
are discounts to their underlying values and then may hold such securities
until the market values reflect their intrinsic values or longer.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The investments of the Fund
in securities of public utility companies are diversified not only in terms of
issuers but also in terms of types of securities since the Fund may invest in
fixed income securities, such as bonds and preferred stocks, as well as common
stocks. The Fund may vary the percentage of assets invested in any one type of
security based upon the Adviser&#146;s evaluation as to the appropriate portfolio
structure for achieving the Fund&#146;s investment objectives under prevailing
market, economic and financial conditions. Certain securities (such as fixed
income securities) are selected on the basis of their current yield, while
other securities are purchased for their income growth potential.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>See &#147;Investment Policies,
Techniques and Restrictions&#151;Fundamental Investment Restrictions&#148; in the
Statement of Additional Information for a complete list of the fundamental
investment restrictions of the Fund.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>15</B></FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>The Fund&#146;s
  investments</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT  SIZE=2 FACE=ARIAL><B>PORTFOLIO CONTENTS</B></FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s portfolio is
composed principally of the following types of equity and fixed-income
securities.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Common stocks<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>Common stock represents
an equity ownership interest in an issuer. The Fund has substantial exposure to
common stocks. Although common stocks have historically generated higher
average returns than fixed-income securities over the long-term, common stocks
also have experienced significantly more volatility in returns. An adverse
event, such as an unfavorable earnings report, may depress the value of a
particular common stock held by the Fund. Also, the price of common stocks are
sensitive to general movements in the stock market and a drop in the stock
market may depress the price of common stocks to which the Fund has exposure.
Common stock prices fluctuate for many reasons, including changes in investors&#146;
perceptions of the financial condition of an issuer or the general condition of
the relevant stock market, or when political or economic events affecting the
issuers occur. In addition, common stock prices may be sensitive to rising
interest rates, as the costs of capital rise and borrowing costs increase.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Preferred stocks<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>Preferred stock, like
common stock, represents an equity ownership in an issuer. Generally, preferred
stock has a priority of claim over common stock in dividend payments and upon
liquidation of the issuer. Unlike common stock, preferred stock does not
usually have voting rights. Preferred stock in some instances is convertible
into common stock.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Although they are equity
securities, preferred stocks have certain characteristics of both debt and
common stock. They are debt-like in that their promised income is usually
contractually fixed. They are common stock-like in that they do not have rights
to precipitate bankruptcy proceedings or collection activities in the event of
missed payments. Furthermore, they have many of the key characteristics of
equity due to their subordinated position in an issuer&#146;s capital structure and
because their quality and value are heavily dependent on the profitability of
the issuer rather than on any legal claims to specific assets or cash flows.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>In order to be payable,
dividends on preferred stock must be declared by the issuer&#146;s board of
directors or trustees. In addition, distributions on preferred stock may be
subject to deferral and thus may not be automatically payable. Income payments
on some preferred stocks are cumulative, causing dividends and distributions to
accrue even if not declared by the board of directors or trustees or otherwise
made payable. Other preferred stocks are non-cumulative, meaning that skipped
dividends and distributions do not continue to accrue. There is no assurance
that dividends on preferred stocks in which the Fund invests will be declared
or otherwise made payable. The Fund may invest in non-cumulative preferred
stock, although the Adviser would consider, among other factors, their non-cumulative
nature in making any decision to purchase or sell such securities.</FONT></P>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=3> </FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=2>Shares of preferred stock
have a liquidation value that generally equals the original purchase price at
the date of issuance. The market values of preferred stock may be affected by
favorable and unfavorable changes impacting the issuers&#146; industries or sectors.
They may also be affected by actual and anticipated changes or ambiguities in
the tax status of the security and by actual and anticipated changes or
ambiguities in tax laws, such as changes in corporate and individual income tax
rates and in the dividends received deduction or the characterization of
dividends as qualified dividends as described below under &#147;U.S. federal income
tax matters&#151;Taxation of shareholders.&#148; </FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Because the claim on an
issuer&#146;s earnings represented by preferred stock may become onerous when
interest rates fall below the rate payable on the stock or for other reasons,
the issuer may redeem preferred stock, generally after an initial period of
call protection in which the stock is not redeemable. Thus, in declining
interest rate environments in particular, the Fund&#146;s holdings of higher
dividend-</FONT></P>

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<P><FONT  SIZE=2 FACE=ARIAL><B>16</B></FONT></P>
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<P><FONT  SIZE=2 FACE=ARIAL><B>The Fund&#146;s
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</TD>
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<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>paying preferred stocks may
be reduced and the Fund may be unable to acquire securities paying comparable
rates with the redemption proceeds.</FONT></P>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=3> </FONT></DIV>

<DIV><FONT  SIZE=2 FACE=ARIAL><B>Corporate bonds and other debt securities<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund also invests
in corporate bonds, debentures and other debt securities of companies in the
public utilities industry or other industries and sectors. Debt securities in
which the Fund invests may pay fixed or variable rates of interest. Bonds and
other debt securities generally are issued by corporations and other issuers to
borrow money from investors. The issuer pays the investor a fixed or variable
rate of interest and normally must repay the amount borrowed on or before
maturity. Certain debt securities are &#147;perpetual&#148; in that they have no maturity
date. Generally, the Fund purchases a fixed income security only if, at the time
of purchase, it is rated investment grade, although the Fund is not required to
divest itself of a security that falls below investment grade. The Fund does
not have a specific maturity policy but generally does not purchase fixed
income securities with maturities longer than 30 years.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT  SIZE=2 FACE=ARIAL><B>Convertible securities and bonds with warrants attached<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may invest
in preferred stocks and fixed-income obligations that are convertible into
common stocks of domestic and foreign issuers, and bonds issued as a unit with
warrants to purchase equity or fixed-income securities. Convertible securities
in which the Fund may invest, comprised of both convertible debt and
convertible preferred stock, may be converted at either a stated price or at a
stated rate into underlying shares of common stock. Because of this feature,
convertible securities generally enable an investor to benefit from increases
in the market price of the underlying common stock. Convertible securities
often provide higher yields than the underlying equity securities, but
generally offer lower yields than non-convertible securities of similar
quality. The value of convertible securities fluctuates in relation to changes
in interest rates like bonds, and, in addition, fluctuates in relation to the market
price of the underlying common stock.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Bonds with warrants attached
to purchase equity securities have many characteristics of convertible bonds
and their prices may, to some degree, reflect the performance of the underlying
stock. Bonds may also be issued with warrants attached to purchase additional
fixed-income securities at the same coupon rate. A decline in interest rates
would permit the Fund to buy additional bonds at a favorable rate or to sell
the warrants at a profit. If interest rates rise, the warrants would generally
expire with no value.</FONT></P>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=3> </FONT></DIV>

<DIV><FONT  SIZE=2 FACE=ARIAL><B>Real estate investment trusts</b></font><BR>
<FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may invest
in companies that are treated as real estate investment trusts for federal
income tax purposes (&#147;REITs&#148;). REITs are financial vehicles that pool investors&#146;
capital to acquire, develop and/or finance real estate and provide services to
their tenants. REITs may concentrate their investments in specific geographic
areas or in specific property types, e.g., regional malls, shopping centers,
office buildings, apartment buildings and industrial warehouses. The market
value of REIT shares and the ability of REITs to distribute income may be
adversely affected by numerous factors, including rising interest rates,
changes in the national, state and local economic climate and real estate
conditions, perceptions of prospective tenants of the safety, convenience and
attractiveness of the properties, the ability of the owners to provide adequate
management, maintenance and insurance, the cost of complying with the Americans
with Disabilities Act, increasing competition and compliance with environmental
laws, changes in real estate taxes and other operating expenses, adverse
changes in governmental rules and fiscal policies, adverse changes in zoning
laws and other factors beyond the control of the issuers. In addition,
distributions received by the Fund from REITs may consist of dividends, capital
gains and/or return of capital. REIT income distributions received by the Fund
generally will not be treated as qualified dividends.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

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<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>17</B></FONT></P>
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<P><FONT  SIZE=2 FACE=ARIAL><B>The Fund&#146;s
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<P><FONT  SIZE=2 FACE=ARIAL><B>INVESTMENT TECHNIQUES<BR><BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may from
time to time employ a variety of investment techniques, including those
described below, to hedge against fluctuations in the price of portfolio
securities, to enhance total return or to provide a substitute for the purchase
or sale of securities. Some of these techniques, such as purchases of put and
call options, options on stock indices and stock index futures and entry into
certain credit derivative transactions, are hedges against or substitutes for
investments in equity investments. Other techniques, such as the purchase of
interest rate futures and entry into transactions involving interest rate
swaps, options on interest rate swaps and certain credit derivatives, are
hedges against or substitutes for investments in debt securities. The Fund&#146;s
ability to utilize any of the techniques described below may be limited by
restrictions imposed on its operations in connection with obtaining and
maintaining its qualification as a regulated investment company under the Code.</FONT></P>

<p><FONT Face="Times New Roman, Times, Serif" SIZE=3> </FONT><BR><FONT  SIZE=2 FACE=ARIAL><B>Lending of portfolio securities<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>In order to generate
additional income, the Fund from time to time lends securities from its
portfolio, with an aggregate value not in excess of 33 1/3% of its total
assets, to brokers, dealers and financial institutions such as banks and trust
companies. At December 31, 2005, the Fund had loaned portfolio securities with
a market value of $659,052,519 to a broker-dealer and received $683,471,220 of
cash collateral. In connection with all loans of securities, the Fund receives
collateral in cash, U.S. government securities, irrevocable letters of credit
or various other specified types of investment-grade securities. The collateral
is required to be maintained in an amount equal to at least 100% of the current
market value of the loaned securities. The Fund receives a portion of the
income earned on the securities held as collateral and continues to earn income
on the loaned securities. Loans of the Fund&#146;s securities are terminable at any
time. The Fund has the right to regain record ownership of loaned securities to
exercise beneficial rights such as voting rights and rights to interest or
other distributions. The Fund may pay reasonable fees to persons unaffiliated with
the Fund for services in arranging such loans. With respect to lending of
portfolio securities, there is the risk of failure by the borrower to return
the securities involved in such transactions, in which event the Fund may incur
a loss. In addition, securities lending transactions may reduce the amount of
distributions that are treated as qualified dividend income eligible for the
reduced federal income tax rate.</FONT></p>

<P><FONT  SIZE=2 FACE=ARIAL><B>Dividend capture trading<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may seek to
enhance the level of dividend income it receives by engaging in dividend
capture trading. In a dividend capture trade, the Fund sells a stock that it
held past the stock&#146;s ex-dividend date to purchase another stock paying a
dividend before the next dividend of the stock being sold. By entering into
such trades, the Fund could augment the amount of dividend income it receives
over the course of a year. The use of dividend capture strategies exposes the
Fund to increased trading costs and the potential for capital loss.</FONT><BR>
<FONT SIZE=3> </FONT></p>

<P><FONT  SIZE=2 FACE=ARIAL><B>When-issued and delayed delivery transactions<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>New issues of
preferred and debt securities may be offered on a when-issued or delayed
delivery basis, which means that delivery and payment for the securities
normally take place within 45 days after the date of the commitment to purchase.
The payment obligation and the dividends that will be received on the
securities are fixed at the time the buyer enters into the commitment. The Fund
will make commitments to purchase securities on a when-issued or delayed
delivery basis only with the intention of acquiring the securities, but may
sell these securities before the settlement date if the Adviser deems it
advisable. No additional when-issued or delayed delivery commitments will be
made if more than 20% of the Fund&#146;s total assets would be so committed.
Securities purchased on a when-issued or delayed delivery basis may be subject
to changes in value based upon the public&#146;s perception of the creditworthiness
of the issuer and changes, real or anticipated, in the level of interest rates.
Securities purchased or sold on a when-issued or delayed delivery basis may
expose the Fund to risk because they may experience these fluctuations prior to
their actual delivery. The Fund will not accrue income</FONT></P>

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<P><FONT  SIZE=2 FACE=ARIAL><B>18</B></FONT></P>
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<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=3> </FONT></DIV>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=2>with respect to a debt
security it has purchased on a when-issued or delayed delivery basis prior to
its stated delivery date but will accrue income on a delayed delivery security
it has sold. Purchasing or selling securities on a when-issued or delayed delivery
basis can involve the additional risk that the yield available in the market
when the delivery takes place actually may be higher than that obtained in the
transaction itself. The Fund will establish and maintain with its custodian a
segregated account consisting of liquid securities equal at all times to the
amount of the Fund&#146;s when-issued and delayed delivery purchase commitments.
Placing securities rather than cash in the segregated account may have a
leveraging effect on the Fund&#146;s net asset value per share; that is, to the
extent that the Fund remains substantially fully invested in securities at the
same time that it has committed to purchase securities on a when-issued or
delayed delivery basis, greater fluctuations in its net asset value per share
may occur than if it had set aside cash to satisfy its purchase commitments.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT  SIZE=2 FACE=ARIAL><B>Temporary investments<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>During unusual market
circumstances, the Fund may invest temporarily in cash, money market
securities, money market mutual funds or cash equivalents, which may be
inconsistent with the Fund&#146;s investment objectives. Cash equivalents are highly
liquid, short-term securities such as commercial paper, time deposits,
certificates of deposit, short-term notes and short-term U.S. government
obligations. To the extent that the Fund engages in such defensive investments,
it may not achieve its investment objectives.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Portfolio turnover<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may sell
securities to realize capital losses that can be used to offset capital gains
(but not dividends or other ordinary income) or in connection with dividend
capture strategies. Use of these strategies will increase portfolio turnover.
The Fund cannot accurately predict its securities portfolio turnover rate, but
anticipates that its annual portfolio turnover rate will not exceed 100%
(excluding turnover of securities having a maturity of one year or less) under
normal market conditions, although it could be materially higher under certain
conditions. A high turnover rate (100% or more) necessarily involves greater
expenses to the Fund and may result in realization of net short-term capital
gains.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>USE OF LEVERAGE</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund uses various forms
of financial leverage, currently including: (1) five series of outstanding RPS
with an aggregate liquidation preference of $500 million and (2) the ability to
issue up to $200 million of CP Notes. At December 31, 2005, $200 million of CP
Notes were outstanding and the Fund had received proceeds from the CP Notes of
$197,255,382. In addition, the Fund has a $100 million backup credit facility
(under which it had no Borrowings as of December 31, 2005) to provide liquidity
for meeting its obligations under the CP Notes. The Fund&#146;s fundamental
investment restrictions limit the Fund&#146;s Borrowings to an aggregate amount not
exceeding 15% of the value of the Fund&#146;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). However, for so long as the
Fund&#146;s preferred stock is rated by S&amp;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&amp;P that such Borrowings would not
adversely affect S&amp;P&#146;s then-current rating of the preferred stock.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s use of leverage
is premised upon the expectation that the Fund&#146;s preferred stock dividends and
borrowing cost on the CP Notes will be lower than the return the Fund achieves
on its investments with the proceeds of the issuance of preferred stock and CP
Notes. Such difference in return may result from the Fund&#146;s higher credit
rating or the short-term nature of its borrowing compared to the long-term
nature of its investments. Since the total assets of the Fund (including the
assets obtained from leverage) will be invested in the potentially higher
yielding portfolio investments or portfolio investments with the potential for
capital appreciation, the holders of common stock should</FONT></P>

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<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>19</B></FONT></P>
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<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=2>be the beneficiaries of any
incremental return. Should the differential between the underlying assets and
cost of leverage narrow, any incremental return to common shareholders will be
reduced. Furthermore, if long-term rates rise or the Fund otherwise incurs
losses on its investments, the Fund&#146;s net asset value attributable to its
common stock will reflect the decline in the value of portfolio holdings
resulting therefrom.</FONT></DIV>

<p><FONT Face="Times New Roman, Times, Serif" SIZE=2>All Borrowings will have
seniority over the APS and the RPS and payments to holders of APS and RPS in
liquidation or otherwise will be subject to the prior payment of any
Borrowings. By the same token, the Fund&#146;s preferred stock, including both the
APS and the RPS, will have seniority over the Fund&#146;s common stock.
Consequently, changes in the value of the Fund&#146;s portfolio will be borne
initially by holders of the Fund&#146;s common stock. If there is a net decrease (or
increase) in the value of the Fund&#146;s investment portfolio, the use of leverage
will likely cause a greater decrease (or increase) in the net asset value per
common share than if the Fund were not leveraged.</FONT><BR>

<FONT SIZE=3> </FONT></p>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>To the extent the income or
capital appreciation derived from securities purchased with funds received from
leverage exceeds the cost of leverage, the Fund&#146;s return to common shareholders
will be greater than if leverage had not been used. Conversely, if the income
or capital appreciation from the securities purchased with such funds is not
sufficient to cover the cost of leverage or if the Fund incurs capital losses,
the return of the Fund to common shareholders will be less than if leverage had
not been used. Capital raised through the issuance of preferred stock and CP
Notes is subject to dividend payments and interest costs that may or may not
exceed the income and appreciation on the assets purchased. In addition, the
Fund is also required to pay a fee to maintain its credit facility, which
increases the cost of borrowing over the stated interest rate of the CP Notes.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Under the Investment Company
Act, the Fund is not permitted to issue preferred stock unless immediately
after such issuance the net asset value of the Fund&#146;s portfolio is at least
200% of the liquidation value of the outstanding shares of preferred stock (i.e.,
such liquidation value may not exceed 50% of the value of the Fund&#146;s total
assets). In addition, the Fund is not permitted to declare any cash dividend or
other distribution on its common stock unless, at the time of such declaration,
the net asset value of the Fund&#146;s portfolio (determined after deducting the
amount of such dividend or distribution) is at least 200% of such liquidation
value. So long as the Fund has preferred stock outstanding, the Fund intends,
to the extent possible, to purchase or redeem shares of preferred stock from
time to time to maintain coverage of any outstanding shares of preferred stock
of at least 200%.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=2>Under the Investment Company
Act, the Fund is not permitted to incur indebtedness unless immediately after
such borrowing the Fund has an asset coverage of at least 300% of the aggregate
outstanding principal balance of indebtedness (i.e., such indebtedness may not
exceed 33 1/3% of the value of the Fund&#146;s total assets). Additionally, under the
Investment Company Act, the Fund may not declare any dividend or other
distribution upon any class of its stock, or purchase any such stock, unless
the aggregate indebtedness of the Fund has, at the time of the declaration of
any such dividend or distribution or at the time of any such purchase, an asset
coverage of at least 300% after deducting the amount of such dividend,
distribution, or purchase price, as the case may be.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The CP Notes and the credit
facility contain customary restrictive financial covenants. Among other things,
the Fund is required to maintain eligible portfolio property having a
discounted value of at least 4.05 times the Fund&#146;s liabilities. The Fund is
also required to maintain total assets equal to at least four times its
liabilities, and net assets (defined as total assets less liabilities other
than senior securities representing indebtedness) equal to at least four times
the value of its senior securities representing indebtedness. In addition, the
Fund may not declare, pay or set apart for payment any dividend or other
distribution in respect of its common or preferred stock, or call for
redemption or redeem any of its common or preferred stock, when loans are
outstanding under the credit facility, or when an event of default exists or
would result under the credit facility. The Adviser does not anticipate that
these covenants or restrictions will adversely affect its ability to manage the
Fund&#146;s portfolio in accordance with the Fund&#146;s investment objectives and
strategies. However, due to these covenants</FONT></P>

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<P><FONT  SIZE=2 FACE=ARIAL><B>20</B></FONT></P>
</TD>
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<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>The Fund&#146;s
  investments</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<BR>
<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=2>or restrictions, so long as
the CP Notes and the credit facility are outstanding, the Fund could be forced
to liquidate investments at times and at prices that are not favorable to the
Fund, or to forgo investments that the Adviser otherwise views as favorable.<BR>
<FONT  SIZE=3> </FONT></FONT></DIV>

<P><FONT  SIZE=2 FACE=ARIAL><B>INTEREST RATE TRANSACTIONS</B></FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>In connection with the
Fund&#146;s use of leverage through its preferred stock and CP Notes, the Fund may
enter into interest rate swap or cap transactions. Interest rate swaps involve
the Fund&#146;s agreement with the swap counterparty to pay a fixed rate payment in
exchange for the counterparty paying the Fund a variable rate payment that is
intended to approximate the Fund&#146;s variable rate payment obligation on its
preferred stock or variable rate Borrowing. The payment obligation would be
based on the notional amount of the swap. The Fund&#146;s payment obligations under
the swap are general unsecured obligations of the Fund and are ranked senior to
distributions under the common stock and preferred stock. </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may use an interest
rate cap, which would require it to pay a premium to the cap counter-party and
would entitle it, to the extent that a specified variable rate index exceeds a
predetermined fixed rate, to receive from the counterparty payment of the
difference based on the notional amount. The Fund would use interest rate swaps
or caps only with the intent to reduce or eliminate the risk that an increase
in short-term interest rates could have on common share net earnings as a result
of leverage. </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund will usually enter
into swaps or caps on a net basis; that is, the two payment streams will be
netted out in a cash settlement on the payment date or dates specified in the
instrument, with the Fund receiving or paying, as the case may be, only the net
amount of the two payments. The Fund intends to maintain in a segregated
account with its custodian cash or liquid securities having a value at least
equal to the Fund&#146;s net payment obligations under any swap transaction, marked to
market daily. Under certain circumstances, the Fund may be required to pledge
the assets in such segregated account to the counterparty. Any such pledge will
result in the counterparty having a lien on the assets in the segregated
account and the Fund&#146;s ability to make use of those assets will be limited. </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The use of interest rate
swaps and caps is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
security transactions. Depending on the state of interest rates in general, the
Fund&#146;s use of interest rate swaps or caps could enhance or harm the overall
performance on the common stock. To the extent there is a decline in interest
rates, the value of the interest rate swap or cap could decline, and could
result in a decline in the net asset value of the common stock. In addition, if
short-term interest rates are lower than the Fund&#146;s fixed rate of payment on
the interest rate swap, the swap will reduce common stock net earnings. If, on
the other hand, short-term interest rates are higher than the fixed rate of
payment on the interest rate swap, the swap will enhance common stock net
earnings. Buying interest rate caps could enhance the performance of the common
stock by providing a maximum leverage expense. Buying interest rate caps could
also decrease the net earnings of the common stock in the event that the
premium paid by the Fund to the counterparty exceeds the additional amount the
Fund would have been required to pay had it not entered into the cap agreement.
The Fund has no current intention of selling an interest rate swap or cap. The
Fund will not enter into interest rate swap or cap transactions in an aggregate
notional amount that exceeds the outstanding amount of the Fund&#146;s leverage. </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Interest rate swaps and caps
do not involve the delivery of securities or other underlying assets or
principal. Accordingly, the risk of loss with respect to interest rate swaps is
limited to the net amount of interest payments that the Fund is contractually
obligated to make. If the counterparty defaults, the Fund would not be able to
use the anticipated net receipts under the swap or cap to offset the dividend
payments on its preferred stock or interest payments on its Borrowings. Depending
on whether the Fund would be entitled to receive net payments from the
counterparty on the swap or cap, which in turn would depend on the general
state of short-term interest rates at that point in time, such a default could
negatively impact the performance of the common stock.</FONT></P>

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<P>&nbsp;</P>
</TD>
</TR>
<TR>
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</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>21</B></FONT></P>
</TD>
</TR>
</TABLE>

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<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>The Fund&#146;s
  investments</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Although this will not
guarantee that the counterparty does not default, the Fund will not enter into
an interest rate swap or cap transaction with any counterparty that the Adviser
believes does not have the financial resources to honor its obligation under
the interest rate swap or cap transaction. Further, the Adviser will
continually monitor the financial stability of a counterparty to an interest
rate swap or cap transaction in an effort to proactively protect the Fund&#146;s
investments.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>In addition, at the time the
interest rate swap or cap transaction reaches its scheduled termination date,
there is a risk that the Fund will not be able to obtain a replacement
transaction or that the terms of the replacement will not be as favorable as on
the expiring transaction. If this occurs, it could have a negative impact on
the performance of the common stock.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may choose or be
required to redeem some or all of its preferred stock or prepay any of its
Borrowings. This redemption would likely result in the Fund seeking to
terminate early all or a portion of any swap or cap transaction. Such early
termination of a swap could result in a termination payment by or to the Fund.
A termination payment by the Fund would result in a reduction in common share
net earnings. An early termination of a cap could result in a termination
payment to the Fund.</FONT></P>

<P><A NAME=A008></A><FONT  SIZE=4 FACE=ARIAL>Risks</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Risk is inherent in all
investing. Investing in any investment company security involves risk, including
the risk that you may receive little or no return on your investment or that
you may lose part or all of your investment. Therefore, before investing you
should consider carefully the following risks that you assume when you invest
in the APS.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>RISKS OF INVESTING IN THE APS</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT  SIZE=2 FACE=ARIAL><B>Auction risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The dividend rate for
the APS normally is set through an auction process. In the auction, holders of
APS may indicate the dividend rate at which they would be willing to hold or
sell their APS or purchase additional APS. The auction also provides liquidity
for the sale of APS. An auction fails if there are more shares of APS offered
for sale than there are buyers for shares of APS. You may not be able to sell
your APS at an auction if the auction fails. Finally, if you elect to retain
your APS in connection with an auction, and all other holders also elect to
retain their APS in connection with that auction, then the applicable dividend
rate for the next dividend period will be the &#147;all-hold&#148; rate, which may be less
than the market rate. See &#147;Description of APS&#148; and &#147;The Auction&#151;Auction
procedures.&#148;</FONT></DIV>

<P><FONT  SIZE=2 FACE=ARIAL><B>Secondary market risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>If you try to sell
shares of your APS between auctions, you may not be able to sell any or all of
your shares of APS or you may not be able to sell them for $25,000 per share
plus accumulated dividends. If the Fund has designated a special dividend
period, changes in interest rates could affect the price you would receive if
you sold your shares in the secondary market. Broker-Dealers that maintain a secondary
trading market for the APS are not required to maintain this market, and the
Fund is not required to redeem shares either if an auction or an attempted
secondary market sale fails because of a lack of buyers. The APS is not listed
on a stock exchange or traded on the NASDAQ stock market. If you sell your APS
to a Broker-Dealer between auctions, you may receive less than the price you
paid for them, especially if market interest rates have risen since the last
auction.</FONT><br><FONT  SIZE=3 > </FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Ratings and asset coverage risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>While it is expected
that Moody&#146;s will assign a rating of &#147;Aaa&#148; and S&amp;P will assign a rating of
&#147;AAA&#148; to the APS, such ratings will not eliminate or necessarily mitigate the
risks of investing in the APS. Moody&#146;s or S&amp;P could withdraw or downgrade the
ratings it assigns to the APS, which may make your APS less liquid at an
auction or in the secondary market. If Moody&#146;s or S&amp;P withdraws</FONT></P>

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<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
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</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>22</B></FONT></P>
</TD>
</TR>
</TABLE>

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<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>Risks</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT  SIZE=3 > </FONT><BR>

<FONT Face="Times New Roman, Times, Serif" SIZE=2>its rating or downgrades the
APS, the Fund may alter its portfolio or redeem shares of APS in an effort to
reinstate or improve, as the case may be, the rating, although there is no
assurance that the Fund will be able to do so to the extent necessary to
restore the prior rating. The Fund&#146;s ability to meet the asset coverage requirements of the
Investment Company Act may be impaired by decreases in the market value of the
Fund&#146;s total assets, including those assets attributable to the Fund&#146;s preferred
stock and Borrowings. The Fund also may voluntarily redeem shares of APS
under certain circumstances. See &#147;Description of APS&#151;Rating agency guidelines
and asset coverage&#148; for a description of the asset maintenance tests the Fund
must meet.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Subordination risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>As permitted by its
fundamental investment policies, the Fund uses various forms of financial
leverage. The issuance of the APS is only one component of the Fund&#146;s use of
leverage, which also includes: (1) five series of outstanding RPS with an
aggregate liquidation preference of $500 million and (2) the ability to issue
up to $200 million of CP Notes. At December 31, 2005, $200 million of CP Notes
were outstanding and the Fund had received proceeds of $197,255,382. In
addition, the Fund has a $100 million backup credit facility (under which it
had no Borrowings as of December 31, 2005). While holders of APS will have
equal liquidation and distribution rights to the holders of RPS, they will be
subordinated to the rights of both the holders of the CP Notes and the lenders
under the Fund&#146;s credit facility. Therefore, dividends, distributions and other
payments to holders of APS in liquidation or otherwise may be subject to prior
payments due to the holders of CP Notes and the lenders under the Fund&#146;s credit
facility. In the event of a default on the Fund&#146;s CP Notes or under the credit
facility, the Fund would not be permitted to declare, pay or set apart for
payment any dividend or other distribution in respect of the APS, or call for
redemption or redeem any shares of APS.</FONT><BR><FONT  SIZE=3 > </FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Restrictions on dividends and other distributions<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>Restrictions imposed
on the declaration and payment of dividends or other distributions to the
holders of the Fund&#146;s common stock and preferred stock, both by the Investment
Company Act and by requirements imposed by Moody&#146;s, S&amp;P or a substitute
rating agency, might impair the Fund&#146;s ability to satisfy minimum distribution
requirements that it must satisfy to receive favorable treatment as a regulated
investment company for federal income tax purposes. While the Fund has the
ability to redeem shares of APS to enable the Fund to distribute its income to
the extent required to maintain its favorable tax treatment as a regulated
investment company under the Code, there can be no assurance that such
redemptions can be effected in time to meet the requirements of the Code. See
&#147;U.S. federal income tax matters.&#148;</FONT></P>

<P><FONT  SIZE=3 > </FONT><BR><FONT  SIZE=2 FACE=ARIAL><B>Interest rate risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The APS pays
dividends based on short-term interest rates. If short-term interest rates
rise, dividend rates on the APS will also rise. A sharp increase in short-term
interest rates could cause a &#147;negative arbitrage&#148; situation, where the dividend
rate on the APS would exceed the yield on the Fund&#146;s portfolio securities. In
addition, rising market interest rates could negatively impact the value of the
Fund&#146;s investment portfolio, reducing the amount of assets serving as asset
coverage for the APS. See &#147;The Fund&#146;s investments&#151;Use of leverage.&#148;</FONT><BR>
<FONT  SIZE=3 > </FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>RISKS OF INVESTING IN THE FUND</B></FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Investment and market risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>An investment in the
Fund is subject to investment risk, including the possible loss of the entire
amount invested. An investment in the Fund represents an indirect investment in
the securities owned by the Fund, which are generally traded on a securities
exchange or in the over-the-counter markets. The value of these securities,
like other market investments, may move up or down, sometimes rapidly and
unpredictably.</FONT></P>

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<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>23</B></FONT></P>
</TD>
</TR>
</TABLE>

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<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>Risks</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT  SIZE=2 FACE=ARIAL><B>Income risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The income that
holders of preferred stock and common stock receive from the Fund is based
primarily on the dividends and interest the Fund earns from its investments,
which can vary widely over the short and long term. If prevailing market
interest rates drop, distribution rates of the Fund&#146;s preferred stock holdings
and any bond holdings and preferred and common shareholders&#146; income from the
Fund could drop as well. The Fund&#146;s income also would likely be affected
adversely when prevailing short-term interest rates increase and the Fund is
utilizing leverage.</FONT></P>


<div><FONT  SIZE=3 > </FONT></div>

<div><FONT  SIZE=2 FACE=ARIAL><B>Management risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund is subject
to management risk because it is an actively managed portfolio. The Adviser and
the individual portfolio managers apply investment techniques and risk analyses
in making investment decisions for the Fund, but there can be no guarantee that
these will produce the desired results.</FONT></div>

<P><FONT  SIZE=2 FACE=ARIAL><B>Leverage risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund uses financial
leverage on an ongoing basis for investment purposes. Leverage risk includes
the risk associated with the issuance of preferred stock and CP Notes to
leverage the Fund&#146;s common stock. If the dividend rate on the preferred stock
or the interest rate on the CP Notes exceeds the net rate of return on the
Fund&#146;s portfolio, the leverage will result in a lower net asset value than if
the Fund were not leveraged, and the Fund&#146;s ability to pay dividends and meet
its asset coverage requirements on its preferred stock, including the APS,
would be reduced. Similarly, any decline in the net asset value of the Fund&#146;s
investments could result in the Fund being in danger of failing to meet its
asset coverage requirements or of losing its Aaa and AAA ratings on its preferred
stock or, in an extreme case, the Fund&#146;s current investment income might not be
sufficient to meet the dividend requirements on its preferred stock. To
counteract such an event, the Fund might need to liquidate investments in order
to fund a redemption of some or all of its preferred stock.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>It is currently anticipated
that, taking into account the APS being offered by this Prospectus, the amount
of leverage will represent up to 35% of the Fund&#146;s total assets.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s leveraged capital
structure creates special risks not associated with unleveraged funds having
similar investment objectives and policies. These include the possibility of
higher volatility of the Fund&#146;s net asset value and the asset coverage of the
Fund&#146;s preferred stock.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>While the Fund may from time
to time consider reducing leverage in response to actual or anticipated changes
in interest rates in an effort to mitigate the increased volatility of current
income and net asset value associated with leverage, we cannot assure you that the
Fund will actually reduce leverage in the future or that any reduction, if
undertaken, will be effective. Changes in the future direction of interest
rates are very difficult to predict accurately. If the Fund were to reduce
leverage based on a prediction about future changes to interest rates and that
prediction turned out to be incorrect, the reduction in leverage would likely
cause a decrease in the Fund&#146;s net asset value relative to what it would have
been if the Fund had not reduced leverage. The Fund may decide that this risk
outweighs the likelihood of achieving the desired reduction in volatility of
income and net asset value if the prediction were to turn out to be correct,
and determine not to reduce leverage as described above.<BR><BR>Because the fee paid
to the Adviser is calculated on the basis of the Fund&#146;s managed assets (which
equals the aggregate net asset value of the common stock plus the aggregate
liquidation preference of the preferred stock and the aggregate principal
amount of the CP Notes), the advisory fee will be higher when leverage is
utilized, giving the Adviser an incentive to utilize leverage.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Utilities industry risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund invests a
significant portion of its assets in securities of issuers in the public
utilities industry. This may make the Fund more susceptible to adverse
economic, political or regulatory occurrences affecting this sector. As
concentration in a sector increases, so does the potential for fluctuation in
the value of the Fund&#146;s assets.</FONT><BR>
<FONT Face="Times New Roman, Times, Serif" SIZE=3 > </FONT></P>

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<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>24</B></FONT></P>
</TD>
</TR>
</TABLE>

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<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>Risks</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
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</TD>
</TR>
</TABLE>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Certain segments of the
industry and individual companies within such segments may not perform as well
as the industry as a whole. Many public utility companies historically have
been subject to risks of increases in fuel and other operating costs, high interest
costs on borrowings needed for capital improvement programs and costs
associated with compliance with and changes in environmental and other
governmental regulations. Telecommunications companies in particular have been
subject to risks associated with increasing levels of competition, technology
substitution (i.e. wireless, broadband and voice over Internet protocol, or
VoIP), industry overcapacity, consolidation and regulatory uncertainty.
Regulatory changes with respect to nuclear and conventionally fueled power
generating and transmission facilities could increase costs or impair the
ability of public utility companies to operate and utilize such facilities,
thus reducing public utility companies&#146; earnings or resulting in losses. </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Rates of return on
investment of certain public utility companies are subject to review by
government regulators. There can be no assurance that changes in regulatory
policies or accounting standards will not negatively affect public utility
companies&#146; earnings or dividends. Costs incurred by public utility companies,
such as fuel and purchased power costs, often are subject to immediate market
action resulting from such things as political or military forces operating in
geographic regions where oil production is concentrated or global or regional
weather conditions, such as droughts. Rates of return of public utility
companies generally are subject to review and limitation by state public
utility commissions, which ordinarily results in a lag or an absence of
correlation between costs and return. It is also possible that costs may not be
offset by return.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Public utility companies
have, in recent years, been affected by increased competition, which could
adversely affect the profitability or viability of such companies. Electric
public utility companies may also be subject to increasing economic pressures
due to deregulation of generation, transmission and other aspects of their
business.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Investments in securities of foreign issuers<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>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 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&#146;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 Investment Company Act; however, as a closed-end fund,
the Fund is not currently limited under the Investment Company 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&#146;s fundamental investment policies permit
the Fund to enter into currency hedging transactions.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>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&#146;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.</FONT></P>

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<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>25</B></FONT></P>
</TD>
</TR>
</TABLE>

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<P><FONT  SIZE=2 FACE=ARIAL><B>Risks</B></FONT></P>
</TD>
</TR>
<TR>
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</TD>
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<P><FONT  SIZE=2 FACE=ARIAL><B>Common stock risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund has exposure
to common stocks. Although common stocks have historically generated higher
average returns than fixed-income securities over the long-term, common stocks
also have experienced significantly more volatility in returns. An adverse
event, such as an unfavorable earnings report, may depress the value of a
particular common stock held by the Fund. Also, the price of common stocks are
sensitive to general movements in the stock market and a drop in the stock
market may depress the price of common stocks to which the Fund has exposure.
Common stock prices fluctuate for many reasons, including changes in investors&#146;
perceptions of the financial condition of an issuer or the general condition of
the relevant stock market, or when political or economic events affecting the
issuers occur. In addition, common stock prices may be sensitive to rising
interest rates, as the costs of capital rise and borrowing costs increase.</FONT></P>


<div><FONT  SIZE=3 > </FONT></div>
<DIV><FONT  SIZE=2 FACE=ARIAL><B>Small and mid cap stock risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may invest
in companies of any market capitalization. The Fund&#146;s investments in small and
medium-sized companies may be subject to more abrupt or erratic movements in price
than its investments in larger, more established companies because the
securities of such companies are less well-known, held primarily by insiders or
institutional investors or may trade less frequently and in lower volume.
Furthermore, small and medium-sized companies are more likely to experience
greater or more unexpected changes in their earnings and growth prospects. Such
companies often have limited financial resources or may depend on a few key
employees, and the products or technologies of such companies may be at a
relatively early stage of development or not fully tested.</FONT></DIV>

<div><FONT  SIZE=3 > </FONT></div>

<P><FONT  SIZE=2 FACE=ARIAL><B>Preferred stock risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund has exposure
to preferred stocks. Preferred stocks involve credit risk, which is the risk
that a preferred stock will decline in price, or fail to pay dividends when
expected, because the issuer experiences a decline in its financial status. In
addition to credit risk, investment in preferred stocks involves certain other
risks. Certain preferred stocks contain provisions that allow an issuer under
certain conditions to skip distributions (in the case of &#147;non-cumulative&#148;
preferred stocks) or defer distributions (in the case of &#147;cumulative&#148; preferred
stocks). If the Fund owns a preferred stock that is deferring its
distributions, the Fund may be required to report income for tax purposes while
it is not receiving income on this position. Preferred stocks often contain
provisions that allow for redemption in the event of certain tax or legal
changes or at the issuers&#146; call. In the event of redemption, the Fund may not
be able to reinvest the proceeds at comparable rates of return. Preferred
stocks typically do not provide any voting rights, except in cases when
dividends are in arrears beyond a certain time period, which varies by issue.
Preferred stocks are subordinated to bonds and other debt instruments in a
company&#146;s capital structure in terms of priority to corporate income and
liquidation payments, and therefore are subject to greater credit risk than
those debt instruments. Preferred stocks may be significantly less liquid than
many other securities, such as U.S. government securities, corporate debt or
common stock.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Issuer risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The value of common
and preferred stocks may decline for a number of reasons which directly relate
to the issuer, such as management performance, leverage and reduced demand for
the issuer&#146;s goods and services.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Debt securities risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>In addition to credit
risk, investment in debt securities carries certain risks, including:</FONT></P>

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</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=2><I>Redemption
  risk </I>&#151; Debt
  securities sometimes contain provisions that allow for redemption in the
  event of tax or security law changes in addition to call features at the
  option of the issuer. In the event of a redemption, the Fund may not be able
  to reinvest the proceeds at comparable rates of return.</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

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</TD>
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</TD>
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<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>26</B></FONT></P>
</TD>
</TR>
</TABLE>

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<P><FONT  SIZE=2 FACE=ARIAL><B>Risks</B></FONT></P>
</TD>
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<BR>

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</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=2><I>Limited
  voting rights </I>&#151;
  Debt securities typically have limited voting rights, except in cases when
  interest payments have not been made and the issuer is in default.</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT Face="Times New Roman, Times, Serif" SIZE=2><I>Liquidity
  </I>&#151; Certain debt
  securities may be substantially less liquid than many other securities, such
  as U.S. government securities or common stocks.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT  SIZE=2 FACE=ARIAL><B>Credit risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>Credit risk is the
risk that an issuer of a preferred or debt security will become unable to meet
its obligation to make dividend, interest and principal payments. In general,
lower rated preferred or debt securities carry a greater degree of credit risk.
If rating agencies lower their ratings of preferred or debt securities in the
Fund&#146;s portfolio, the value of those obligations could decline, which could
jeopardize the rating agencies&#146; ratings of the preferred stock issued by the
Fund. In addition, the underlying revenue source for a preferred or debt
security may be insufficient to pay dividends, interest or principal in a
timely manner. Because the primary source of income for the Fund is the
dividend, interest and principal payments on the preferred or debt securities
in which it invests, any default by an issuer of a preferred or debt security
could have a negative impact on the Fund&#146;s ability to pay dividends to its
investors. Even if the issuer does not actually default, adverse changes in the
issuer&#146;s financial condition may negatively affect its credit rating or
presumed creditworthiness. These developments would adversely affect the market
value of the issuer&#146;s obligations or the value of credit derivatives if the
Fund has sold credit protection.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Hedging strategy risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>Certain of the
investment techniques that the Fund may employ for hedging or, under certain
circumstances, to increase income or total return will expose the Fund to
risks. In addition to the hedging techniques described elsewhere (i.e.,
positions in Treasury Bond or Treasury Note futures contracts, use of options
on these positions, positions in interest rate swaps, options thereon
(&#147;swaptions&#148;) and credit derivatives), such investment techniques may include
entering into interest rate and stock index futures contracts and options on
interest rate and stock index futures contracts, purchasing and selling put and
call options on securities and stock indices, purchasing and selling securities
on a when-issued or delayed delivery basis and lending portfolio securities.
The Fund intends to comply with regulations of the SEC involving &#147;covering&#148; or
segregating assets in connection with the Fund&#146;s use of options and futures
contracts.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>There are economic costs of
hedging reflected in the pricing of futures, swaps, options and swaption
contracts which can be significant, particularly when long-term interest rates
are substantially above short-term interest rates. The desirability of
moderating these hedging costs will be a factor in the Adviser&#146;s choice of
hedging strategies, although costs will not be the exclusive consideration in
selecting hedge instruments. In addition, the Fund may select individual
investments based upon their potential for appreciation without regard to the
effect on current income in an attempt to mitigate the impact on the Fund&#146;s
assets of the expected normal cost of hedging.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>There may be an imperfect
correlation between changes in the value of the Fund&#146;s portfolio holdings and
hedging positions entered into by the Fund, which may prevent the Fund from
achieving the intended hedge or expose the Fund to risk of loss. In addition,
the Fund&#146;s success in using hedge instruments is subject to the Adviser&#146;s
ability to predict correctly changes in the relationships of such hedge
instruments to the Fund&#146;s portfolio holdings, and there can be no assurance
that the Adviser&#146;s judgment in this respect will be accurate. Consequently, the
use of hedging transactions might result in a poorer overall performance for
the Fund, whether or not adjusted for risk, than if the Fund had not hedged its
portfolio holdings.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Derivatives risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>To the extent the
Fund enters into derivative transactions (such as futures contracts and options
thereon, options and swaps), the Fund will be subject to increased risk of
principal loss due to imper-</FONT></P>

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</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>27</B></FONT></P>
</TD>
</TR>
</TABLE>

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<P><FONT  SIZE=2 FACE=ARIAL><B>Risks</B></FONT></P>
</TD>
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<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>fect correlation or
unexpected price or interest rate movements. The Fund also will be subject to
credit risk with respect to the counterparties to the derivatives contracts
purchased by the Fund. If a counterparty becomes bankrupt or otherwise fails to
perform its obligations under a derivative contract due to financial
difficulties, the Fund may experience significant delays in obtaining any
recovery under the derivative contract in a bankruptcy or other reorganization
proceeding. The Fund may obtain only a limited recovery or may obtain no
recovery in such circumstances. As a general matter, dividends received on
hedged stock positions are characterized as ordinary income and are not
eligible for favorable tax treatment. In addition, use of derivatives may give
rise to short-term capital gains and other income that would not qualify for
payments by the Fund of qualified dividends.</FONT></P>

<P><FONT  SIZE=3 > </FONT><BR><FONT  SIZE=2 FACE=ARIAL><B>Dividend capture risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund may seek to
increase its dividend income using a strategy called &#147;dividend capture.&#148; In a
dividend capture trade, the Fund sells a stock that it held past its
ex-dividend date to purchase another stock paying a dividend before the next
dividend of the stock being sold. The use of dividend capture strategies
exposes the Fund to increased trading costs and the potential for capital loss.
Since 2004, the Fund has not made significant use of dividend captures but may
decide to do so in the future.</FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=3 > </FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Portfolio turnover risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The techniques and
strategies contemplated by the Fund might result in a high degree of portfolio
turnover. The Fund cannot accurately predict its securities portfolio turnover
rate, but anticipates that its annual portfolio turnover rate will not exceed
100% (excluding turnover of securities having a maturity of one year or less)
under normal market conditions, although it could be materially higher under
certain conditions. A high turnover rate (100% or more) necessarily involves
greater expenses to the Fund and may result in realization of net short-term
capital gains.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Inflation risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>Inflation risk is the
risk that the purchasing power of assets or income from investments will be
worth less in the future as inflation decreases the value of money. As
inflation increases, the real value of the Fund&#146;s preferred stock and common
stock, and distributions thereon, can decline. In addition, during any periods
of rising inflation, the interest rate payable on any debt owed by the Fund
would likely increase, which would tend to further reduce returns to the Fund&#146;s
common shareholders.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Tax risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s investment
program and the tax treatment of Fund distributions may be affected by IRS
interpretations of the Code and future changes in tax laws and regulations,
including changes as a result of the &#147;sunset&#148; provisions that currently apply
to the favorable tax treatment of qualified dividends. There can be no
assurance that any portion of the Fund&#146;s income distributions will not be fully
taxable as ordinary income. In order for the Fund to avoid corporate-level
income tax, the Fund must qualify each year as a regulated investment company
under the Code and distribute all of its net income.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>Market disruption risk<BR>
</B></Font><FONT Face="Times New Roman, Times, Serif" SIZE=2>The war with Iraq and
the continuing occupation of that country by coalition forces have had a
substantial impact on the U.S. and world economies and securities markets. The
duration and nature of the war and occupation and the potential costs of
rebuilding the Iraqi infrastructure and political systems cannot be predicted
with any certainty. The war and occupation, terrorism and related geopolitical
risks have led, and may in the future lead, to increased short-term market
volatility and may have adverse long-term effects on U.S. and world economies
and markets generally. Those events could also have an acute effect on
individual issuers or related groups of issuers. These risks could also
adversely affect securities markets, interest rates, auctions, secondary
trading, ratings, credit risk, inflation, deflation and other factors relating
to the APS.</FONT></P>

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</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>28</B></FONT></P>
</TD>
</TR>
</TABLE>

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</TD>
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<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>Risks</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
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</TR>
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<P></P>

<p><font  size=2 face=ARIAL><b>Anti-takeover provisions<br>
  </b></font>

<br>
<font face="Times New Roman, Times, Serif" size=2>Certain provisions of the Fund&#146;s charter and bylaws may be regarded as &#147;anti-takeover&#148; provisions because they could have the effect of limiting the ability of other entities or persons to acquire control of the Fund. See &#147;Certain provisions in the charter and bylaws </font><font size=2>and certain provisions of Maryland law</font><font face="Times New Roman, Times, Serif" size=2>.&#148;<br>
</font> </p>
<P><A NAME=A009></A><FONT  SIZE=4 FACE=ARIAL>Management of the
Fund</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>BOARD OF DIRECTORS AND OFFICERS</B></FONT></P>

<P><FONT  SIZE=3 > </FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=2>The business and affairs of
the Fund are managed under the direction of the Fund&#146;s board of directors. For
information concerning the Fund&#146;s officers and directors, see &#147;Management of
the Fund&#148; in the Statement of Additional Information.</FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=3 > </FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>INVESTMENT ADVISER</B></FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s investment
adviser is Duff &amp; Phelps Investment Management Co., 55 East Monroe Street,
Suite 3600, Chicago, Illinois 60603. The Adviser (together with its
predecessor) has been in the investment advisory business for more than 70
years and, excluding the Fund, currently has more than $3.3 billion in client
accounts under discretionary management. The Adviser acts as adviser to two
other closed-end investment companies registered under the Investment Company
Act and as adviser to three open-end investment companies registered under the
Investment Company Act. The Adviser is a wholly owned subsidiary of Phoenix
Investment Partners, Ltd. (&#147;Phoenix Investment Partners&#148;), which is an
indirect, wholly-owned subsidiary of The Phoenix Companies, Inc. (&#147;PNX&#148;).
Phoenix Investment Partners and its subsidiaries provide investment management
services to institutional and private clients and to the life insurance
subsidiaries of PNX.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Adviser is responsible
for the management of the Fund&#146;s investment portfolio, subject to the overall
control of the board of directors of the Fund.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT Face="Times New Roman, Times, Serif" SIZE=2>Under the terms of an
investment advisory agreement between the Fund and the Adviser (the &#147;Advisory
Agreement&#148;), the Adviser receives from the Fund a quarterly fee at an annual
rate of 0.60% of the average weekly net assets of the Fund up to $1.5 billion
and 0.50% 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, &#147;net assets&#148; are defined as the sum of (i) the
aggregate net asset value of the Fund&#146;s common stock, (ii) the aggregate
liquidation preference of the Fund&#146;s preferred stock and (iii) the aggregate
proceeds to the Fund of commercial paper issued by the Fund. The investment
advisory fees paid by the Fund under the Advisory Agreement totaled $14,771,365
in 2005, $13,869,531 in 2004 and $13,069,523 in 2003. A discussion regarding
the basis for the directors&#146; approving the Advisory Agreement is available in
the Fund&#146;s Semi-Annual Report to Shareholders for the six months ended June 30,
2005 as filed with the SEC on Form N-CSR on September 2, 2005 (No. 811-4915).</FONT></DIV>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Under the terms of a service
agreement among the Adviser, Phoenix Investment Partners and the Fund (the
&#147;Service Agreement&#148;), 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.</FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=3 > </FONT></P>

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</TD>
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</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>29</B></FONT></P>
</TD>
</TR>
</TABLE>

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</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>Management of
  the Fund</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT  SIZE=2 FACE=ARIAL><B>PORTFOLIO MANAGEMENT</B></FONT></P>

<P><FONT  SIZE=3 > </FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=2>A team of investment
professionals employed by the Adviser is responsible for the day-to-day
management of the Fund&#146;s portfolio. The members of that investment team and
their respective areas of responsibility and expertise, as of March 1, 2006,
are as follows: </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Nathan I. Partain, CFA, has
led the Fund&#146;s portfolio management team since 1998 and has served on the
Fund&#146;s portfolio management team since 1996. He has been President, Chief
Executive Officer and Chief Investment Officer of the Fund since February 2001
(Executive Vice President and Chief Investment Officer from 1998 to 2001). Mr.
Partain has been President and Chief Investment Officer of the Adviser since
April 2005 (Executive Vice President from 1997 to 2005), President and Chief
Executive Officer of DTF Tax-Free Income Inc. (&#147;DTF&#148;) and Duff &amp; Phelps
Utility and Corporate Bond Trust Inc. (&#147;DUC&#148;), two other closed-end utilities
oriented funds, since February 2004, and lead portfolio manager of Phoenix
Global Utilities Fund (&#147;PGU&#148;), an open-end utilities oriented fund, since
October 2004. He joined the Duff &amp; Phelps organization in 1987 and has
served since then in positions of increasing responsibility. He is also a
director of Otter Tail Corporation (since 1993). </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>T. Brooks Beittel, CFA, has
served on the Fund&#146;s portfolio management team and has been Secretary and a
Senior Vice President of the Fund since January 1995 (Treasurer from January
1995 to September 2002). He has been Senior Vice President of the Adviser since
1993 (Vice President 1987-1993) and Secretary of DTF and DUC since May 2005. He
is also a member of the portfolio management teams of DUC and PGU. Mr. Beittel
concentrates his research on fixed-income securities. He joined the Duff &amp;
Phelps organization in 1987 and has served since then in positions of
increasing responsibility.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Michael Schatt has served on
the Fund&#146;s portfolio management team since 1996 and has been a Senior Vice
President of the Fund since April 1998 (Vice President from January 1997 to
April 1998). Mr. Schatt has been a Senior Vice President of the Adviser since
January 1997 and was a Managing Director of Phoenix Investment Partners from
1994 to 1996. Mr. Schatt concentrates his research on REIT securities and is
the senior portfolio manager for all REIT products managed by the Adviser.
These products include the Phoenix Real Estate Securities Fund, the Phoenix
Real Estate Securities Series sub-account of the Phoenix Edge Series annuity
products, Duff &amp; Phelps Real Estate Securities Trust and various separate
accounts. Before joining the Duff &amp; Phelps organization in 1994, Mr. Schatt
spent four years as a director of the Real Estate Advisory Practice for Coopers
&amp; Lybrand, LLC, advising foreign pension funds on the acquisition and
disposition of U.S. real estate assets and assisting clients in evaluating
public real estate investments as an alternative to private real estate
investments. Prior to joining Coopers &amp; Lybrand, he had 10 years&#146;
experience in real estate finance. </FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Deborah A. Jansen, CFA, has
served on the Fund&#146;s portfolio management team and has been a Senior Vice
President of the Adviser since January 2001. She is also a member of the
portfolio management team of PGU. Ms. Jansen concentrates her research on the
global electric and natural gas industries. Prior to joining the Adviser in
2001, Ms. Jansen was a Senior Vice President, Principal and Equity Portfolio
Manager at Stein Roe and Farnham, Inc. from 1996 to 2000.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Connie M. Luecke, CFA, has
served on the Fund&#146;s portfolio management team since 1996 and has been a Senior
Vice President of the Adviser since January 1998 (Managing Director from 1996
to 1998). She is also a member of the portfolio management team of PGU. Ms.
Luecke concentrates her research on the global telecommunications industries.
She joined the Duff &amp; Phelps organization in 1992 and has served since then
in positions of increasing responsibility.</FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Daniel J. Petrisko, CFA, has
served on the Fund&#146;s portfolio management team since 2004 and has been a Senior
Vice President of the Adviser since 1997 (Vice President from 1995 to 1997). He
has been Chief Investment Officer of DUC, another closed-end utilities oriented
fund, since February 2004 (Portfolio Manager from 2002 to 2004, Vice President
since 2000). He joined the Duff &amp; Phelps organization in 1995 and has
served since then in positions of increasing responsibility.</FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=3 > </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>30</B></FONT></P>
</TD>
</TR>
</TABLE>

<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT  SIZE=2 FACE=ARIAL><B>Management of
  the Fund</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<BR>
<DIV><FONT SIZE=3> </FONT><BR><FONT Face="Times New Roman, Times, Serif" SIZE=2>Randle L. Smith, CFA, has
served on the Fund&#146;s portfolio management team since 1996 and has been a Senior
Vice President of the Adviser since January 1998 (Managing Director from 1996
to 1998). He is also a member of the portfolio management team of PGU. Mr.
Smith concentrates his research on the global electric and natural gas
industries. He joined the Duff &amp; Phelps organization in 1990 and has served
since then in positions of increasing responsibility.</FONT>
<BR><FONT SIZE=3> </FONT></DIV>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>Please refer to the
Statement of Additional Information for additional information about the Fund&#146;s
portfolio managers, including the structure of and method of computing
compensation, other accounts they manage and their ownership of securities of
the Fund.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>ADMINISTRATOR</B></FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund&#146;s 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
&#147;Administration Agreement&#148;), the Administrator provides all management and
administrative services required in connection 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 an annual rate of 0.25% of the Fund&#146;s average weekly net
assets up to $100 million, 0.20% of the Fund&#146;s average weekly net assets from
$100 million to $1.0 billion and 0.10% 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, &#147;net assets&#148; are defined as
the sum of (i) the aggregate net asset value of the Fund&#146;s common stock, (ii)
the aggregate liquidation preference of the Fund&#146;s preferred stock and (iii)
the aggregate proceeds to the Fund of commercial paper issued by the Fund.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>EXPENSES</B></FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund is responsible for
all expenses not paid by the Adviser or the Administrator, including brokerage
fees.</FONT></P>

<P><FONT  SIZE=2 FACE=ARIAL><B>CONTROL PERSONS</B></FONT></P>

<P><FONT Face="Times New Roman, Times, Serif" SIZE=2>The Fund does not consider
that any person &#147;controls&#148; the Fund. No person is known by the Fund to own of record
or beneficially five percent or more of any class of the Fund&#146;s outstanding
equity securities. For purposes of the preceding, &#147;control&#148; means (1) the
beneficial ownership, either directly or through one or more controlled
companies, of more than 25 percent of the voting securities of a company; (2)
the acknowledgement or assertion by either the controlled or controlling party
of the existence of control; or (3) a final adjudication under Section 2(a)(9)
of the Investment Company Act that control exists.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT  SIZE=2   FACE=ARIAL><B>31</B></FONT></P>
</TD>
</TR>
</TABLE>

<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=4 FACE=ARIAL><A NAME=A010></A>Description of APS</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The following is a brief
description of the terms of the APS. For the complete terms of the APS,
including the meanings of the defined terms used in this Prospectus but not
otherwise defined, please refer to the detailed description of the APS in the
Articles Supplementary attached as Appendix A to the Statement of Additional
Information.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>GENERAL</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>The APS will rank on a
parity with the shares of any other series of preferred stock of the Fund as to
the payment of dividends and the distribution of assets upon liquidation. All
shares of APS carry &frac14; vote per share on matters on which APS can be voted. The shares of APS,
when issued, will be fully paid and non-assessable and will have no preemptive,
conversion or cumulative voting rights. The shares of APS will not be
convertible into common stock, RPS or other capital stock of the Fund. </FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>A preferred stock credit
rating is a rating agency&#146;s assessment of the capacity and willingness of an
issuer to pay preferred stock obligations. The ratings on the APS are not
recommendations to purchase, hold or sell APS, inasmuch as the ratings do not
comment as to market price or suitability for a particular investor. The rating
agency guidelines described below also do not address the likelihood that an
owner of APS will be able to sell shares of APS in an auction or otherwise.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>In addition to the APS
offered by this Prospectus, the Fund currently intends to issue, subsequent to
    the offering of APS made by this Prospectus, Additional APS consisting of
    4,000 shares of Series T APS and 4,000 shares of Series R APS. The sale of
    the APS offered by this Prospectus is not contingent upon the sale of the
    Additional APS, and there can be no assurance that the Fund will issue all
    or any of the Additional APS. With respect to liquidation and distribution
    rights, any Additional APS that is issued will rank on a parity with the
    APS offered by this Prospectus and with the RPS.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>DIVIDENDS AND DIVIDEND PERIODS</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>The following is a general
description of dividends and dividend periods. The initial dividend period for
each series of APS is as set forth below:</FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="80%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="15%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1 FACE=ARIAL><B>Series</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP NOWRAP>
<P ALIGN=right><FONT SIZE=1   FACE=ARIAL><B>Initial
  dividend period</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Series M</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Series W</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Series F</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>Any subsequent dividend
periods will generally be seven days. The Fund, subject to certain conditions,
may change the length of subsequent dividend periods by designating them as
special dividend periods. See &#147;Declaration of special dividend periods&#148; below.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Dividend payment dates</B></FONT></P>

<P><FONT SIZE=2>Dividends on the APS will be
payable when, as and if declared by the board of directors, out of legally
available funds in accordance with the charter, the Articles Supplementary and
applicable law. Dividends are scheduled to be paid for each series of APS as
follows:</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="45%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="22%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="22%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1 FACE=ARIAL><B>Series</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Initial
  dividend payment date</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Subsequent
  dividend<BR>
  payment day</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE color=black ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Series M</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>Tuesday</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>Series W</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>Thursday</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Series F</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>-</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>Monday</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<DIV><FONT SIZE=3> </FONT></DIV>
<BR>

<DIV><HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER></DIV>

<DIV><FONT FACE="ARIAL" SIZE="2"><B>32</B> </FONT></DIV>

<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<BR>
<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>If dividends are payable on
a day that is not a business day, then dividends will be payable on the next business
day. In addition, the Fund may specify different dividend payment dates for any
special dividend period of more than 28 dividend period days.</FONT></DIV>

<P><FONT SIZE=2>Dividends will be paid
through The Depository Trust Company (the &#147;Securities Depository&#148;) on each
dividend payment date. The Securities Depository, in accordance with its
current procedures, is expected to distribute dividends received from the Fund
in next-day funds on each dividend payment date to its members or participants
(&#147;Agent Members&#148;) who are acting as agents for beneficial owners. These Agent
Members are in turn expected to distribute such dividends to the persons for
whom they are acting as agents. However, each of the current Broker-Dealers has
indicated to the Fund that dividend payments will be available in same-day
funds on each dividend payment date to customers that use such Broker-Dealer or
that Broker-Dealer&#146;s designee as Agent Member.</FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>Calculation of dividend payment</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>The Fund computes the
dividends per share payable on shares of each series of APS by multiplying the
applicable dividend rate in effect for shares of such series in effect by a
fraction. The numerator of this fraction will normally be seven (i.e., the
number of days in the dividend period) and the denominator will normally be
360. In either case, this rate is then multiplied by $25,000 to arrive at
dividends per share.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>Dividends on shares of each
series of APS will accumulate from the date of their original issue. For each
dividend payment period after the initial dividend period, the dividend rate
will be the dividend rate determined at auction once each of the requirements
of the Articles Supplementary are satisfied.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>Prior to each auction,
Broker-Dealers will notify holders of the term of the next succeeding dividend
period as soon as practicable after the Broker-Dealers have been so advised by
the Fund. After each auction, on the auction date, Broker-Dealers will notify
holders of the applicable dividend rate for the next succeeding dividend period
and of the auction date of the next succeeding auction.</FONT></DIV>

<P><FONT SIZE=2>The dividend rate that
results from an auction for each series of APS will not be greater than the
maximum dividend rate. The maximum dividend rate for any regular dividend
period will be the higher of (i) the applicable percentage of the reference
rate and (ii) the applicable spread plus the reference rate. The reference rate
will be the applicable LIBOR Rate (as defined below) (for a dividend period of
fewer than 365 days) or the applicable U.S. Treasury Note Rate (as defined below)
(for a dividend period of 365 days or more). The applicable percentage of the
reference rate and the applicable spread plus the reference rate for any
regular dividend period will generally be determined based on the credit
ratings assigned to the APS by Moody&#146;s and S&amp;P on the auction date for such
period (as set forth in the table below). If Moody&#146;s and S&amp;P do not make
such rating available, the rate will be determined by reference to equivalent
ratings issued by a substitute rating agency. In the case of a special dividend
period, (1) the maximum dividend rate will be specified by the Fund in the
notice of special dividend period for such dividend period, (2) the applicable
percentage of the reference rate and the applicable spread plus the reference
rate will be determined on the date two business days before the first day of
such special dividend period and (3) the reference rate will be the applicable
LIBOR Rate (for a dividend period of fewer than 365 days) or the U.S. Treasury Note Rate
 (for a dividend period of 365 days or more).</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="21%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="13%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="22%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="11%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="7%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="13%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>Moody&#146;s</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>S&amp;P</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1   FACE=ARIAL><B>Applicable percentage</B><FONT   SIZE=1 FACE=ARIAL><B><BR>
  of the reference rate</B></FONT></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Applicable
  spread</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>

</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>Aaa</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>AAA</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>125</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>125
  bps</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>Aa3
  to Aa1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>AA-
  to AA+</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>150</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>150
  bps</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>A3
  to A1</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>A-
  to A+</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>200</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>200
  bps</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>Baa3
  to Baa1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>BBB-
  to BBB+</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>250</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>250
  bps</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>Ba1
  and lower</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>BB+
  and lower</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>300</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>%</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>300
  bps</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<DIV><FONT SIZE=3> </FONT></DIV>
<BR>

<DIV><HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER></DIV>
<DIV ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="2"><B>33</B></FONT> </DIV>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<BR>
<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>Assuming the Fund maintains
an AAA/Aaa rating on the APS, the practical effect of the different methods
used to calculate the maximum dividend rate is shown in the table below:</FONT></DIV><BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="15%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="15%"  VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>

<TD WIDTH="4%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="18%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="19%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1 FACE=ARIAL><B>Reference rate</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Maximum
  dividend<BR>
  rate using the<BR>
  applicable percentage<BR>
  of the reference rate</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Maximum
  dividend rate<BR>
  using the applicable spread<BR>
  plus the reference rate</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1   FACE=ARIAL><B>Method
  used to<BR>
  determine the<BR>
  maximum dividend rate</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P STYLE="MARGIN-RIGHT:30PX" ALIGN=CENTER><FONT SIZE=2>1%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1.25%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>2.25%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>Spread</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P  STYLE="MARGIN-RIGHT:30PX" ALIGN=CENTER><FONT SIZE=2>2%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>2.50%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>3.25%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>Spread</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P  STYLE="MARGIN-RIGHT:30PX" ALIGN=CENTER><FONT SIZE=2>3%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>3.75%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>4.25%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>Spread</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P  STYLE="MARGIN-RIGHT:30PX"  ALIGN=CENTER><FONT SIZE=2>4%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5.00%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>5.25%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>Spread</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P  STYLE="MARGIN-RIGHT:30PX" ALIGN=CENTER><FONT SIZE=2>5%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>6.25%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>6.25%</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>Either</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P   STYLE="MARGIN-RIGHT:30PX"  ALIGN=CENTER><FONT SIZE=2>6%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>7.50%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>7.25%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2>Percentage</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>Prior to each dividend
payment date, the Fund is required to deposit with the auction agent sufficient
funds for the payment of declared dividends. The failure to make such deposit
will not result in the cancellation of any auction. The Fund does not intend to
establish any reserves for the payment of dividends.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>The Fund will take all
reasonable action necessary to enable Moody&#146;s and S&amp;P to provide ratings
for each series of APS. If such ratings are not made available by Moody&#146;s or
S&amp;P, the underwriter or its affiliates and successors, after consultation
with the Fund, will select one or more other rating agencies to act as
substitute rating agencies.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>The &#147;LIBOR Rate&#148; is the
applicable London Inter-Bank Offered Rate for deposits in U.S. dollars for the period
most closely approximating the applicable dividend period for a series of APS.
For a more detailed description, please see the Articles Supplementary.</FONT></P>

<P><FONT SIZE=2>The &#147;U.S. Treasury Note Rate&#148; is
the average yield to maturity for certain U.S. Treasury securities having
substantially the same length to maturity as the applicable dividend period for
a series of APS. For a more detailed description, please see the Articles
Supplementary.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Effect of failure to pay dividends in a timely manner</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>If the Fund fails to pay the
auction agent the full amount of any dividend for any shares of APS in a timely
manner, but the Fund cures such failure and pays any late charge before 12:00
noon, New York City time, on the third business day following the date the
failure occurred, no auction will be held for the APS for the first subsequent
dividend period thereafter, and the dividend rate for the APS for that
subsequent dividend period will be the maximum dividend rate. However, if the
Fund does not effect a timely cure, no auction will be held for the APS for the
first subsequent dividend period thereafter (and for any dividend period
thereafter, up to and including the dividend period during which the failure is
cured and the late charge is paid), and the dividend rate for the APS for each
subsequent dividend period will be the maximum dividend rate with the
prevailing rating for the series of APS being deemed Baa1/BBB.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2 FACE=ARIAL><B>Restrictions on dividends and other distributions</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>Under the Investment Company
Act, the Fund may not (i) declare any dividend with respect to the APS if, at
the time of such declaration (and after giving effect thereto), asset coverage
with respect to the Fund&#146;s Borrowings that are senior securities representing
indebtedness (as defined in the Investment Company Act) would be less than 200%
(or such other percentage as may in the future be specified in or under the
Investment Company Act as the minimum asset coverage for senior securities
representing indebtedness of a closed-end investment company as a condition of
declaring dividends on its preferred stock) or (ii) declare any other
distribution on the APS or purchase or redeem shares</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>34</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<BR>
<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>of APS if, at the time of
the declaration (and after giving effect thereto), asset coverage with respect
to the Fund&#146;s senior securities representing indebtedness would be less than
300% (or such other percentage as may in the future be specified in or under
the Investment Company Act as the minimum asset coverage for senior securities
representing indebtedness of a closed-end investment company as a condition of
declaring distributions on or effecting purchases or redemptions of any class
of its capital stock). &#147;Senior securities representing indebtedness&#148; generally
means any bond, debenture, note or similar obligation or instrument
constituting a security (other than shares of beneficial interest) and
evidencing indebtedness and could include the Fund&#146;s obligations under any
Borrowings. For purposes of determining asset coverage for senior securities
representing indebtedness in connection with the payment of dividends or other
distributions on or purchases or redemptions of stock, the term &#147;senior
security&#148; does not include any promissory note or other evidence of
indebtedness issued in consideration of any loan, extension or renewal thereof,
made by a bank or other person and privately arranged, and not intended to be
publicly distributed. The term &#147;senior security&#148; also does not include any such
promissory note or other evidence of indebtedness in any case where such a loan
is for temporary purposes only and in an amount not exceeding 5% of the value
of the total assets of the Fund at the time the loan is made; a loan is
presumed under the Investment Company Act to be for temporary purposes if it is
repaid within 60 days and is not extended or renewed; otherwise it is presumed
not to be for temporary purposes. For purposes of determining whether the 200%
and 300% asset coverage requirements described above apply in connection with
dividends or distributions on or purchases or redemptions of shares of APS,
such asset coverages may be calculated on the basis of values calculated as of
a time within 48 hours (not including Sundays or holidays) next preceding the
time of the applicable determination.</FONT></DIV>

<P><FONT SIZE=2>In addition, a declaration
of a dividend or other distribution on or purchase or redemption of shares of
APS may be prohibited (i) at any time when an event of default under any
Borrowings has occurred and is continuing; (ii) after giving effect to such
declaration, the Fund would not have eligible portfolio holdings with an
aggregated discounted value at least equal to any asset coverage requirements
associated with such Borrowings; or (iii) the Fund has not redeemed the full
amount of Borrowings, if any, required to be redeemed by any provision for
mandatory redemption. While any shares of APS are outstanding, the Fund
generally may not declare, pay or set apart for payment any dividend or other
distribution in respect of its common stock. In addition, the Fund may not call
for redemption or redeem any of its common stock. However, the Fund is not
confined by the above restrictions if:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="10%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>immediately after such
  transaction, the Discounted Value of the Fund&#146;s portfolio would be equal to
  or greater than the Preferred Stock Basic Maintenance Amount and the
  Investment Company Act Preferred Stock Asset Coverage (see &#147;&#151;Rating agency
  guidelines and asset coverage&#148; below); </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<DIV><FONT SIZE=3> </FONT></DIV>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>full cumulative dividends
  on each series of APS 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 auction agent; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the Fund has redeemed the
  full number of shares of APS required to be redeemed by any provision for
  mandatory redemption contained in the Articles Supplementary.</FONT></P>
</TD>
</TR>
</TABLE>



<P><FONT SIZE=2>The Fund generally will not
declare, pay or set apart for payment any dividend on any class or series of
shares of capital stock of the Fund ranking, as to the payment of dividends, on
a parity with the APS unless the Fund has declared and paid or
contemporaneously declares and pays full cumulative dividends on each series of
APS through its most recent dividend payment date. However, when the Fund has
not paid dividends in full upon the shares of each series of APS through the
most recent dividend payment date or upon any other class or series of shares
of the Fund ranking, as to the payment of dividends, on a parity with the APS
through their most recent respective dividend payment dates, the amount of
dividends declared per share on the APS and such other class or series of
shares</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="2"><B>35</B></FONT> </P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>will in all cases bear to
each other the same ratio that accumulated dividends per share on the APS and
such other class or series of shares bear to each other.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Declaration of special dividend periods</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>The Fund may, under certain
circumstances, declare a special dividend period for a particular series of
APS. Upon declaring a special dividend period, the Fund will give notice to the
auction agent and each Broker-Dealer. The notice will request that the next
succeeding dividend period for the series of APS be a number of days (greater
than 7) evenly divisible by seven as specified in such notice and not more than
1,820 days long; provided, however, that a special dividend period may be a
number of days not evenly divisible by seven if all shares of the series of APS
are to be redeemed at the end of such special dividend period. The Fund may not
request a special dividend period unless sufficient clearing bids for shares of
such series were made in the most recent auction (that is, in general, the
number of shares subject to buy orders by potential holders is at least equal
to the number of shares subject to sell orders by existing holders). In
addition, full cumulative dividends, any amounts due with respect to mandatory
redemptions and any additional dividends payable prior to such date must be
paid in full or deposited with the auction agent. Prior to declaring a special
dividend period, the Fund will confirm that, as of the auction date next
preceding the first day of such special dividend period, it has eligible assets
with an aggregate discounted value at least equal to the Preferred Stock Basic
Maintenance Amount (as defined below). The Fund also intends to consult with
the Broker-Dealers and provide notice to each rating agency which is then
rating the APS and so requires. A notice of special dividend period also will
specify whether the APS will be subject to optional redemption during such
special dividend period and, if so, the redemption premium, if any, required to
be paid by the Fund in connection with such optional redemption. If the Fund
proposes to designate any special dividend period, not fewer than 20 (or such
lesser number of days as may be agreed from time to time by the auction agent
and each Broker-Dealer) nor more than 30 business days prior to the first day
of such special dividend period, notice shall be mailed to Holders of such
series of APS. Each such notice shall state (A) that the Fund proposes to
exercise its option to designate a succeeding special dividend period,
specifying the special dividend period&#146;s first day, and (B) that the Fund will
by 11:00 A.M., New York City time, on the second business day next preceding
the first day of such special dividend period, notify the auction agent, who
will promptly notify the Broker-Dealers, of either (x) its determination,
subject to certain conditions, to proceed with such special dividend period, subject
to the terms of any specific redemption provisions, or (y) its determination
not to proceed with such special dividend period, in which latter event the
succeeding dividend period shall be a minimum dividend period. No later than
11:00 A.M., New York City time, on the second business day next preceding the
first day of any proposed special dividend period, the Fund shall deliver to
the auction agent, who will promptly deliver to the Broker-Dealers, either: (i)
a notice stating (A) that the Fund has determined to designate the next
succeeding dividend period as a special dividend period, specifying the first
and last days thereof, and (B) the terms of any specific redemption provisions;
or (ii) a notice stating that the Fund has determined not to exercise its
option to designate a special dividend period. If the Fund fails to deliver
either such notice with respect to any designation of any proposed special
dividend period to the auction agent by 11:00 A.M., New York City time, on the
second business day next preceding the first day of such proposed special
dividend period, the Fund shall be deemed to have delivered a notice to the
auction agent with respect to such dividend period to the effect set forth in
clause (ii) above, thereby resulting in a minimum dividend period. The Fund
must also have received confirmation from Moody&#146;s and S&amp;P or any substitute
rating agency that the proposed special dividend period will not adversely
affect such rating agency&#146;s then-current rating on the APS, and the lead Broker-Dealer
designated by the Fund, initially UBS Securities LLC, must not have objected to
the declaration of a special dividend period.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>36</B> </FONT> </P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2 FACE=ARIAL><B>REDEMPTION</B></FONT></P>

<P><FONT SIZE=2><B>Mandatory redemption. </B>The Fund is required to maintain (a) a Discounted
Value of eligible portfolio securities equal to the Preferred Stock Basic
Maintenance Amount and (b) the Investment Company Act Preferred Stock Asset
Coverage. Eligible portfolio securities for purposes of (a) above will be
determined from time to time by the rating agencies then rating the APS. If the
Fund fails to maintain such asset coverage amounts and does not timely cure
such failure in accordance with the requirements of the rating agency that
rates the APS, the Fund must redeem all or a portion of the APS. This mandatory
redemption will take place on a date that the board of directors specifies out
of legally available funds in accordance with the charter, the Articles
Supplementary and applicable law, at the redemption price of $25,000 per share
plus accumulated but unpaid dividends (whether or not earned or declared) to
the date fixed for redemption. The number of shares of APS that must be
redeemed in order to cure such failure will be allocated pro rata among the
outstanding shares of preferred stock of the Fund. The mandatory redemption
will be limited to the number of shares of APS necessary to restore the
required Discounted Value or the Investment Company Act Preferred Stock Asset
Coverage, as the case may be.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2><B>Optional redemption. </B>The Fund, at its option, may redeem the APS,
in whole or in part, out of funds legally available therefor. Any optional
redemption will occur on any dividend payment date at the optional redemption
price per share of $25,000 per share plus an amount equal to accumulated but
unpaid dividends to the date fixed for redemption plus the premium, if any,
specified in a special redemption provision. No shares of APS may be redeemed
if the redemption would cause the Fund to violate the Investment Company Act or
any other applicable law. Shares of a series of APS may not be redeemed in part
if fewer than 300 shares of APS would remain outstanding after the redemption.
The Fund has the authority to redeem shares of APS for any reason.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>The redemption price for a
series of APS may include the payment of redemption premiums to the extent
required under any applicable specific redemption provisions. The Fund will not
make any optional redemption unless, after giving effect thereto, (i) the Fund
has available certain deposit securities with maturities or tender dates not
later than the day preceding the applicable redemption date and having a value
not less than the amount (including any applicable premium) due to holders of
the series of APS by reason of the redemption of the series of APS on such date
fixed for the redemption and (ii) the Fund has eligible assets with an
aggregate discounted value at least equal to the Preferred Stock Basic
Maintenance Amount. Notwithstanding the foregoing, a series of APS may not be
redeemed at the option of the Fund unless all dividends in arrears on all
outstanding series of APS, and any other outstanding preferred stock of the
Fund, have been or are being contemporaneously paid or set aside for payment.
This would not prevent the lawful purchase or exchange offer for a series of
APS made on the same terms to holders of all outstanding preferred stock of the
Fund.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>LIQUIDATION</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Fund,
the holders of preferred stock, including both APS and RPS, will be entitled to
receive a preferential liquidating distribution, which is expected to equal the
original purchase price per share of preferred stock plus accrued and unpaid
dividends, whether or not declared, before any distribution of assets is made
to holders of common stock. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of preferred stock will
not be entitled to any further participation in any distribution of assets by
the Fund.</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="2"><B>37</B> </FONT> </P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>For purpose of the foregoing
paragraph, a voluntary or involuntary liquidation of the Fund does not include:
</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="10%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the sale of all or
  substantially all the property or business of the Fund; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the merger or
  consolidation of the Fund into or with any other business trust or
  corporation; or </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>the merger or
  consolidation of any other business trust or corporation into or with the
  Fund.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2 FACE=ARIAL><B>RATING AGENCY GUIDELINES AND ASSET COVERAGE</B></FONT></P>

<P><FONT SIZE=2>The Fund is required under
guidelines of Moody&#146;s and S&amp;P to maintain assets having in the aggregate a
Discounted Value at least equal to the Preferred Stock Basic Maintenance
Amount. Moody&#146;s and S&amp;P have each established separate guidelines for calculating
Discounted Value. To the extent any particular portfolio holding does not
satisfy a rating agency&#146;s guidelines, all or a portion of the holding&#146;s value
will not be included in the rating agency&#146;s calculation of Discounted Value.
The Moody&#146;s and S&amp;P guidelines do not impose any limitations on the
percentage of the Fund&#146;s assets that may be invested in holdings not eligible
for inclusion in the calculation of the Discounted Value of the Fund&#146;s
portfolio. The amount of ineligible assets included in the Fund&#146;s portfolio at
any time may vary depending upon the rating, diversification and other
characteristics of the eligible assets included in the portfolio. The Preferred
Stock Basic Maintenance Amount includes the sum of (a) the aggregate
liquidation preference of the preferred stock then outstanding and (b) certain
accrued and projected payment obligations of the Fund.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>The Fund is also required
under the Investment Company Act to maintain asset coverage of at least 200%
with respect to senior securities which are stock, including the APS and RPS
(&#147;Investment Company Act Preferred Stock Asset Coverage&#148;). The Fund&#146;s
Investment Company Act Preferred Stock Asset Coverage is tested as of the last
business day of each month in which any senior equity securities are
outstanding. Based on the composition of the portfolio of the Fund and market
conditions as of December 31, 2005, the Investment Company Act Preferred Stock
Asset Coverage with respect to all of the Fund&#146;s preferred stock, assuming the
issuance on that date of all shares of APS offered hereby and giving effect to
the deduction of related sales load and related offering costs estimated at
$3,408,100 in the aggregate, would have been computed as follows: </FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="52%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="16%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="15%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>Value
  of Fund assets less liabilities<BR>not constituting senior securities</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=center><FONT SIZE=2>$2,898,054,190</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="70%" NOSHADE  ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>=</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="90%" NOSHADE  ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>=</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>291%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>Senior
  securities representing indebtedness<BR>
  plus liquidation value of preferred stock</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=center><FONT SIZE=2>$&nbsp;&nbsp;&nbsp;997,255,382</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>After giving effect to the
repayment of all amounts outstanding under the CP Notes using the proceeds of
this offering of APS, the Investment Company Act Preferred Stock Asset Coverage
with respect to all of the Fund&#146;s preferred stock would be 338%.</FONT></P>

<P><FONT SIZE=2>In the event the Fund does
not timely cure a failure to maintain (a) a Discounted Value of its portfolio
equal to the Preferred Stock Basic Maintenance Amount or (b) the Investment
Company Act Preferred Stock Asset Coverage, in accordance with the requirements
of the rating agency or agencies then rating the APS or the Investment Company
Act, as the case may be, the Fund will be required to redeem shares of APS as
described under &#147;Redemption&#151;Mandatory redemption&#148; above.</FONT>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>The Fund may, but is not
required to, adopt any modifications to the guidelines that may be established
by Moody&#146;s or S&amp;P. Failure to adopt any such modifications, however, may
result in a change in the ratings described above or a withdrawal of ratings
altogether. In addition, any rating agency providing a rating for the APS may,
at any time, change, suspend or withdraw any such rating. The board of</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>38</B> </FONT> </P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>directors may, without
shareholder approval, amend, alter or repeal any or all of the definitions and
related provisions which have been adopted by the Fund pursuant to the rating
agency guidelines in the event the Fund receives written confirmation from
Moody&#146;s or S&amp;P, as the case may be, that any such amendment, alteration or
repeal would not impair the rating then assigned to the APS.</FONT></P>

<P><FONT SIZE=2>As described by Moody&#146;s and
S&amp;P, a preferred stock rating is an assessment of the capacity and
willingness of an issuer to pay preferred stock obligations. The rating on the
APS is not a recommendation to purchase, hold or sell shares of APS, inasmuch
as the rating does not comment as to market price or suitability for a
particular investor. The rating agency guidelines referred to above also do not
address the likelihood that an owner of shares of APS will be able to sell such
shares in an auction or otherwise. The rating is based on current information
furnished to Moody&#146;s and S&amp;P by the Fund and the Adviser and information
obtained from other sources. The rating may be changed, suspended or withdrawn
as a result of changes in, or the unavailability of, such information.</FONT></P>

<P><FONT SIZE=2>The rating agency&#146;s
guidelines will apply to the APS only so long as the rating agency is rating
the APS. The Fund will pay certain fees to Moody&#146;s and S&amp;P for rating the
APS.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>VOTING RIGHTS</B></FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>Except as otherwise provided
in this Prospectus and in the Statement of Additional Information or as otherwise
required by law, holders of APS will be entitled to &frac14; vote per
share of APS and will vote together with holders of common stock and other
preferred stock as a single class. Since each share of APS represents a
liquidation preference of $25,000, whereas each share of RPS (which has one
vote per share) represents a liquidation preference of $100,000, the allocation
of &frac14; vote per share to the APS will give all holders of preferred stock
equal voting power per dollar of liquidation preference. </FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>

<P><FONT SIZE=2>Holders of outstanding
preferred stock, voting separately as one class, are entitled to elect two of
the Fund&#146;s directors. The remaining directors are elected by holders of the
Fund&#146;s common stock. In addition, if at any time dividends (whether or not earned
or declared) on outstanding preferred stock are due and unpaid in an amount
equal to two full years of dividends, and sufficient cash or specified
securities have not been deposited with the auction agent for the payment of
such dividends, then, the sole remedy of holders of outstanding preferred stock
is that the number of directors constituting the board of directors will be
automatically increased by the smallest number that, when added to the two
directors elected exclusively by the holders of preferred stock as described
above, would constitute a majority of the board of directors. The holders of
preferred stock will be entitled to elect that smallest number of additional
directors at a special meeting of shareholders held as soon as possible and at all
subsequent meetings at which directors are to be elected. The terms of office
of the persons who are directors at the time of that election will continue. If
the Fund thereafter shall pay, or declare and set apart for payment, in full,
all dividends payable on all outstanding preferred stock, the special voting
rights stated above will cease, and the terms of office of the additional
directors elected by the holders of preferred stock will automatically
terminate.</FONT></P>

<DIV><FONT SIZE=3> </FONT></DIV>

<DIV><FONT SIZE=2>As long as any shares of APS
are outstanding, the Fund will not, without the affirmative vote or consent of
the holders of at least two-thirds of the shares of preferred stock outstanding
at the time (voting separately as one class):</FONT></DIV>

<DIV><FONT SIZE=3> </FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(a)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>authorize, create or
  issue, or increase the authorized or issued number of, any class or series of
  shares ranking prior to the APS with respect to the payment of dividends or
  the distribution of assets on liquidation; or </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(b)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>amend, alter or repeal the
  provisions of the charter, including the Articles Supplementary, whether by
  merger, consolidation or otherwise, so as to materially and adversely affect
  any right, preference, privilege or voting power of the APS or the holders of
  APS; provided that any increase in the amount of the authorized preferred
  stock or the creation and issuance of</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="2"><B>39</B> </FONT> </P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of APS</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="10%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>other series of preferred
  stock, or any increase in the amount of authorized shares of such series or
  of any other series of preferred stock, in each case ranking on a parity with
  or junior to the APS, will not be deemed to materially and adversely affect
  such rights, preferences, privileges or voting powers unless such issuance
  would cause the Fund not to satisfy the Investment Company Act Preferred
  Stock Asset Coverage requirements or the Preferred Stock Basic Maintenance Amount
  requirements, in which case the vote or consent of the holders of the
  preferred stock is not required.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>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 APS, 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 APS, 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 APS, necessary to
authorize the action in question.</FONT></P>

<P><FONT SIZE=2>As defined in the 1940 Act,
a reorganization includes:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(a)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a reorganization under the
  supervision of a court of competent jurisdiction; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(b)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a merger or consolidation;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>


<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(c)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a sale of 75% or more in value of the assets of the Fund;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(d)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a restatement of the
  capital of the Fund, or an exchange of securities issued by the Fund for any
  of its own outstanding securities;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(e)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a voluntary dissolution or
  liquidation of the Fund; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(f)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a recapitalization or
  other procedure or transaction which has for its purpose the alteration,
  modification, or elimination of any of the rights, preferences, or privileges
  of any class of securities issued by the Fund, as provided in its charter or
  other instrument creating or defining such rights, preferences, and
  privileges;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(g)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>an exchange of securities
  issued by the Fund for outstanding securities issued by another company or
  companies, preliminary to and for the purpose of effecting or consummating
  any of the foregoing; or </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(h)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any exchange of securities
  by a company which is not an investment company for securities issued by the
  Fund.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Under Section 13(a) of the
1940 Act, the vote of a majority of the Fund&#146;s outstanding voting securities is
required to authorize the Fund to: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(a)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>convert from a closed-end
  to an open-end investment company; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(b)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>borrow money, issue senior
  securities, underwrite securities issued by other persons, purchase or sell
  real estate or commodities or make loans to other persons, except in each
  case in accordance with the recitals of policy contained in the Fund&#146;s
  registration statement with respect thereto; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(c)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>deviate from its policy in
  respect of concentration of investments in the public utilities industry as
  recited in its registration statement, deviate from any investment policy
  which is changeable only if authorized by shareholder vote, or deviate from
  any other policy identified as fundamental in its registration statement; or </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(d)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>change the nature of its
  business so as to cease to be an investment company.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The foregoing voting
provisions will not apply with respect to the APS if, at or prior to the time
when a vote is required, all shares of APS have been (i) redeemed or (ii)
called for redemption and sufficient funds have been deposited in trust to
effect such redemption.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>40</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=4 FACE=ARIAL>The auction<A   NAME=A011></A></FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2 FACE=ARIAL><B>GENERAL</B></FONT></P>

<P><FONT SIZE=3> <BR></FONT>
<FONT SIZE=2>The Articles
Supplementary provide that, except as otherwise described in this Prospectus,
the applicable dividend rate for each series of APS for each dividend period after
the initial dividend period will be the rate that results from an auction
conducted as set forth in the Articles Supplementary and summarized below. In
such an auction, persons determine to hold or offer to sell or, based on
dividend rates bid by them, offer to purchase or sell shares of APS. See the
Articles Supplementary included in the Statement of Additional Information for
a more complete description of the auction process.</FONT></P>

<P><FONT SIZE=2><B>Auction agency agreement.</B> The Fund will enter into an auction agency
agreement with the auction agent (currently, The Bank of New York) which
provides, among other things, that the auction agent will follow the auction
procedures to determine the applicable dividend rate for each series of APS, so
long as the applicable dividend rate for such series of APS is to be based on
the results of an auction.</FONT><BR><FONT SIZE=3> </FONT></P>

<P><FONT SIZE=2>The auction agent may
terminate the auction agency agreement upon 45 days&#146; notice to the Fund. If the
auction agent should resign, the Fund will use its best efforts to enter into
an agreement with a successor auction agent containing substantially the same
terms and conditions as the auction agency agreement. The Fund may remove the
auction agent provided that, prior to removal, the Fund has entered into a
replacement agreement with a successor auction agent.</FONT></P>

<P><FONT SIZE=2><B>Broker-Dealer agreements</B>. Each auction requires the participation of
one or more Broker-Dealers. The auction agent will enter into agreements with
several Broker-Dealers selected by the Fund, which provide for the participation
of those Broker-Dealers in auctions for APS.</FONT></P>

<P><FONT SIZE=2>The auction agent will pay
to each Broker-Dealer after each auction, from funds provided by the Fund, a
service charge at the annual rate of &frac14; of 1% in the case of any auction before a
dividend period of 364 days or less, or a percentage agreed to by the Fund and
the Broker-Dealers, in the case of any auction before a dividend period of 365
days or longer, of the purchase price of APS placed by a Broker-Dealer at the
auction.</FONT></P>

<P><FONT SIZE=2>The Fund may request the
auction agent to terminate one or more Broker-Dealer Agreements at any time
upon five days&#146; notice, provided that at least one Broker-Dealer Agreement is
in effect after termination of the agreements.</FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>The Broker-Dealer
Agreements provide that a Broker-Dealer may submit orders in auctions for its
own account, unless the Fund notifies all Broker-Dealers that they no longer
may do so; provided that Broker-Dealers may continue to submit hold orders and
sell orders. Any Broker-Dealer submitting an order for its own account in any
auction could have an advantage over other potential holders in that it would
have knowledge of other orders placed through it in that auction. A
Broker-Dealer would not, however, have knowledge of orders submitted by other
Broker-Dealers, if any. As a result of bidding by the Broker-Dealer in an
auction, the applicable dividend rate may be higher or lower than the rate that
would have prevailed had the Broker-Dealer not bid. A Broker-Dealer may also
bid in an auction in order to prevent what would otherwise be (1) a failed
auction, (2) an &#147;all-hold&#148; auction, or (3) the implementation of an applicable
dividend rate that the Broker-Dealer believes, in its sole judgment, does not
reflect the market for such securities at the time of the auction.
Broker-Dealers may, but are not obligated to, advise owners of APS that the
rate that will apply in an &#147;all-hold&#148; auction is often a lower rate than would
apply if owners submit bids, and such advice, if given, may facilitate the
submission of bids by existing owners that would avoid the occurrence of an
&#147;all-hold&#148; auction. In the Broker-Dealer Agreements, the Broker-Dealers agree
to handle customers&#146; orders in accordance with their respective duties under
applicable securities laws and rules.</FONT><BR><FONT SIZE=3> </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="2"><B>41</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>
<TR>

<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>The
  auction</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The information in this
paragraph has been furnished by the Underwriter for inclusion in this
Prospectus. According to published news reports, the SEC has requested
information from a number of broker-dealers regarding certain of their
practices in connection with auction rate securities, such as the practices
described in the preceding paragraph. Such published news reports also indicate
that the SEC has requested that each broker-dealer receiving the request for
information voluntarily conduct an investigation regarding its practices and
procedures in auction rate securities markets. The Underwriter has advised the
Fund that it and certain other participants in the auction rate securities
markets, including both taxable and tax-exempt markets, have received the
request for information from the SEC described above. The Underwriter is
cooperating with the SEC in providing the requested information. No assurance
can be given as to whether the results of this process will affect the market
for the APS or the auctions therefor.</FONT><BR><font size=3> </FONT></P>


<P><FONT face=arial SIZE=2><B>AUCTION PROCEDURES</B></FONT><BR><BR><FONT SIZE=2>The following is a brief
summary of the auction procedures for the APS. They are described in the
Statement of Additional Information in more detail.</FONT></P>

<P><FONT SIZE=2>Prior to the submission
deadline on each auction date for shares of APS, each customer of a
Broker-Dealer who is listed on the records of that Broker-Dealer (or, if
applicable, the auction agent) as a beneficial owner of APS may submit the
following types of orders with respect to shares of APS to that Broker-Dealer.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3 > </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>1.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Hold order: indicating its
  desire to hold shares of APS without regard to the applicable dividend rate
  for the next dividend period.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>2.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Bid: indicating its desire
  to sell shares of APS at $25,000 per share if the applicable dividend rate
  for the next dividend period is less than the rate specified in the bid.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>3.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Sell order: indicating its
  desire to sell shares of APS at $25,000 per share without regard to the
  applicable dividend rate for the next dividend period.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>A beneficial owner may
submit different types of orders to its Broker-Dealer with respect to the
shares of APS then held by the beneficial owner. A beneficial owner of shares
of such series that submits its bid with respect to the APS to its Broker-Dealer
having a rate higher than the maximum applicable dividend rate for the APS on
the auction date will be treated as having submitted a sell order to its
Broker-Dealer. A beneficial owner of APS that fails to submit an order to its
Broker-Dealer with respect to the APS will ordinarily be deemed to have
submitted a hold order with respect to the APS to its Broker-Dealer. However,
if a beneficial owner of APS fails to submit an order with respect to such
shares of such series to its Broker-Dealer for an auction relating to a
dividend period of more than 28 days, such beneficial owner will be deemed to
have submitted a sell order to its Broker-Dealer. A sell order constitutes an
irrevocable offer to sell the shares of APS subject to the sell order. A
beneficial owner that offers to become the beneficial owner of additional
shares of APS is, for purposes of such offer, a potential holder as discussed
below.</FONT></P>

<P><FONT SIZE=2>A potential holder is either
a customer of a Broker-Dealer that is not a beneficial owner of a series of APS
but that wishes to purchase shares of APS of such series or that is a
beneficial owner of shares of APS of such series that wishes to purchase
additional shares of APS of such series. A potential holder may submit bids to
its Broker-Dealer in which it offers to purchase shares of such series at
$25,000 per share if the applicable dividend rate for shares of such series for
the next dividend period is not less than the specified rate in such bid. A bid
placed by a potential holder of shares of such series specifying a rate higher
than the maximum applicable dividend rate for shares of such series on the
auction date will not be accepted.<BR>
<FONT SIZE=3 > </FONT></FONT></P>

<P><FONT SIZE=2>The Broker-Dealers in turn
will submit the orders of their respective customers who are beneficial owners
and potential holders to the auction agent. They will designate themselves
(unless otherwise</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>42</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>


<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>The auction</B> </FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3 > </FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>permitted by the Fund) as
existing holders of shares subject to orders submitted or deemed submitted to
them by beneficial owners. They will designate themselves as potential holders
of shares subject to orders submitted to them by potential holders. However,
neither the Fund nor the auction agent will be responsible for a
Broker-Dealer&#146;s failure to comply with these procedures. Any order placed with
the auction agent by a Broker-Dealer as or on behalf of an existing holder or a
potential holder will be treated the same way as an order placed with a
Broker-Dealer by a beneficial owner or potential holder. Similarly, any failure
by a Broker-Dealer to submit to the auction agent an order for any shares of
APS held by it or customers who are beneficial owners will be treated as a
beneficial owner&#146;s failure to submit to its Broker-Dealer an order in respect
of shares of APS held by it. A Broker-Dealer may also submit orders to the
auction agent for its own account as an existing holder or potential holder,
provided it is not an affiliate of the Fund.</FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>There are sufficient
clearing bids for APS in an auction if the number of shares of APS subject to
bids submitted or deemed submitted to the auction agent by Broker-Dealers for
potential holders with rates or spreads equal to or lower than the maximum
applicable dividend rate for the APS is at least equal to or exceeds the sum of
the number of shares of APS subject to sell orders and the number of shares of
APS subject to bids specifying rates or spreads higher than the maximum
applicable dividend rate for APS submitted or deemed submitted to the auction
agent by Broker-Dealers for existing holders of APS. If there are sufficient
clearing bids for APS, the applicable dividend rate for APS for the next
succeeding dividend period thereof will be the lowest rate specified in the
submitted bids which, taking into account such rate and all lower rates bid by
Broker-Dealers as or on behalf of existing holders and potential holders, would
result in existing holders and potential holders owning the shares of APS
available for purchase in the auction.</FONT></P>

<P><FONT SIZE=2>If there are not sufficient
clearing bids for APS, the applicable dividend rate for the next dividend
period will be the maximum applicable dividend rate for APS on the auction
date. If this happens, beneficial owners of APS that have submitted or are
deemed to have submitted sell orders may not be able to sell in the auction all
shares of APS subject to such sell orders. If all of the outstanding shares of
APS are the subject of submitted hold orders, the applicable dividend rate for
the next dividend period will then be 80% of the reference rate (i.e., the
&#147;all-hold&#148; rate).<BR>
<FONT SIZE=3 > </FONT></FONT></P>

<P><FONT SIZE=2>The auction procedure
includes a pro rata allocation of shares for purchase and sale, which may
result in an existing holder continuing to hold or selling, or a potential
holder purchasing, a number of shares of APS that is different than the number
of shares specified in its order. To the extent the allocation procedures have
that result, Broker-Dealers that have designated themselves as existing holders
or potential holders in respect of customer orders will be required to make
appropriate pro rata allocations among their respective customers.</FONT></P>

<P><FONT SIZE=2>Settlement of purchases and
sales will be made on the next business day (which is also a dividend payment
date) after the auction date through DTC. Purchasers will make payment through
their Agent Members in same-day funds to DTC against delivery to their
respective Agent Members. DTC will make payment to the sellers&#146; Agent Members
in accordance with DTC&#146;s normal procedures, which now provide for payment
against delivery by their Agent Members in same-day funds. </FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>The auctions for Series M
APS will normally be held every Monday, and each subsequent dividend period
will normally begin on the following Tuesday; the auctions for Series W APS
will normally be held every Wednesday, and each subsequent dividend period will
normally begin on the following Thursday; and the auctions for Series F APS
will normally be held every Friday, and each subsequent dividend period will
normally begin on the following Monday.</FONT><FONT SIZE=3><BR>
</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="2"><B>43</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>


<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </font></P>
</TD>
</TR>


<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>The
auction</B> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </font></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The following is a simplified
example of how a typical auction works. Assume that the Fund has 1,000
outstanding shares of APS and three existing holders. The three existing
holders and three potential holders submit orders through Broker-Dealers at the
auction:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH=107 VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH=39 VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH=263 VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH=38 VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH=273 VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3 > </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Existing Holder A</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Owns 500 shares, wants to
  sell all 500 shares if applicable dividend rate is less than 2.10%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Places bid order of 2.10%
  rate for all 500 shares</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Existing Holder B</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Owns 300 shares, wants to
  hold</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Places hold order &#151; will
  take the applicable dividend rate</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Existing Holder C</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Owns 200 shares, wants to
  sell all 200 shares if applicable dividend rate is less than 1.90%</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Places bid order of 1.90%
  rate for all 200 shares</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Potential Holder D</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Wants to buy 200 shares</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Places order to buy at or
  above 2.00%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Potential Holder E</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Wants to buy 300 shares</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Places order to buy at or
  above 1.90%</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Potential Holder F</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Wants to buy 200 shares</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Places order to buy at or
  above 2.10%</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The lowest dividend rate
that will result in all 1,000 shares of APS continuing to be held is 2.00% (the
offer by D). Therefore, the applicable dividend rate will be 2.00%. Existing
holders B and C will continue to own their shares. Existing holder A will sell
its shares because A&#146;s dividend rate bid was higher than the applicable
dividend rate. Potential holder D will buy 200 shares and potential holder E
will buy 300 shares because their bid rates were at or below the applicable
dividend rate. Potential holder F will not buy shares because its bid rate was
above the applicable dividend rate.</FONT></P>

<P><FONT SIZE=2>If an auction date is not a
business day because the New York Stock Exchange is closed for business due to
an act of God, natural disaster, act of war, civil or military disturbance, act
of terrorism, sabotage, riots or a loss or malfunction of utilities or
communications services, or the auction agent is not able to conduct an auction
in accordance with the auction procedures for any such reason, then the
applicable dividend rate for the next dividend period will be the applicable
dividend rate determined on the previous auction date.</FONT></P>

<P><FONT SIZE=2>If a dividend payment date
is not a business day because the New York Stock Exchange is closed for
business due to an act of God, natural disaster, act of war, civil or military
disturbance, act of terrorism, sabotage, riots or a loss or malfunction of
utilities or communications services, or the dividend payable on such date can
not be paid for any such reason, then: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(i)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The dividend payment date
  for the affected dividend period will be the next business day on which the
  Fund and its paying agent, if any, can pay the dividend; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(ii)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The affected dividend
  period will end on the day it otherwise would have ended; and </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(iii)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The next dividend period
  will begin and end on the dates on which it otherwise would have begun and
  ended.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT face=arial SIZE=2><B>SECONDARY MARKET TRADING AND TRANSFERS OF APS</B></FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>The Broker-Dealers are
expected to maintain a secondary trading market in the APS outside of auctions,
but are not obligated to do so, and may discontinue such activity at any time.
There can be no assurance that any secondary trading market in the APS will
provide owners with liquidity of investment. The APS will not be listed on any
stock exchange or traded on the NASDAQ Stock Market. Investors who purchase
shares in an auction for a special dividend period should note that because the
dividend rate on such shares will be fixed for the length of such dividend
period, the value of the</FONT><BR><FONT SIZE=3> </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>44</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>The
auction</B> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>shares may fluctuate in
response to changes in interest rates and may be more or less than their
original cost if sold on the open market in advance of the next auction.</FONT><BR><FONT SIZE=3> </FONT></P>



<P><FONT SIZE=2>A beneficial owner or an
existing holder may sell, transfer or otherwise dispose of APS only in whole
shares and only: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>pursuant to a bid or sell
  order placed with the auction agent in accordance with the auction
  procedures; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>to a Broker-Dealer; or</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>to such other persons as may be permitted by the Fund;</FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="3" VALIGN=TOP>
<P><FONT SIZE=2>provided, however, that:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a sale, transfer or other
  disposition of APS from a customer of a Broker-Dealer who is listed on the
  records of that Broker-Dealer as the holder of such shares to that
  Broker-Dealer or another customer of that Broker- Dealer shall not be deemed
  to be a sale, transfer or other disposition if such Broker-Dealer remains the
  existing holder of the shares; and </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>in the case of all
  transfers other than pursuant to auctions, the Broker-Dealer (or other
  person, if permitted by the Fund) to whom such transfer is made will advise
  the auction agent of such transfer.</FONT></P>
</TD>
</TR>
</TABLE>

<P><A NAME=A012></A><FONT face=arial SIZE=4>Description of capital structure</FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>The Fund&#146;s authorized
capital stock consists of 250,000,000 shares of common stock, $0.001 par value
per share, of which 223,835,635 were outstanding at December 31, 2005, and
100,000,000 shares of preferred stock, $0.001 par value per share, of which
5,000 were outstanding at December 31, 2005.</FONT><BR><FONT SIZE=3> </FONT></P>

<P><FONT FACE=ARIAL SIZE=2><B>DESCRIPTION OF COMMON STOCK</B></FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>Holders of common stock
are entitled to dividends when and as declared by the board of directors, to
one vote per share in the election of directors and other matters submitted to
the shareholders (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.</FONT><FONT SIZE=3 ><BR>
</FONT></P>

<P><FONT SIZE=2>Under the Fund&#146;s dividend
reinvestment plan common 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. See &#147;Dividend Reinvestment Plan&#148; in the Statement of
Additional Information for a description of the dividend reinvestment plan of
the Fund.</FONT></P>

<P><FONT FACE=ARIAL  SIZE=2><B>DESCRIPTION OF PREFERRED STOCK</B></FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>The Fund&#146;s charter
expressly grants authority 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
date, five series of RPS have been issued and three series of APS have been
authorized for issuance.</FONT><FONT SIZE=3><BR>
</FONT></P>

<P><FONT SIZE=2>Holders of preferred stock
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 with respect to the RPS and $25,000 per share with respect to the APS, in
each case plus accumulated but unpaid dividends) before any distributions are
made to the holders of the common stock, in the event the</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT FACE="ARIAL" SIZE="2"><B>45</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of capital structure</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=3> <BR></FONT>
<FONT SIZE=2>Fund is ever liquidated.
Each share of preferred stock is entitled to &frac14; vote per
$25,000 of liquidation preference. 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 Investment Company 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&#146;s sub-classification as a
closed-end investment company, changes in its investment objectives or changes
in its fundamental investment restrictions.</FONT><BR><FONT SIZE=3>
</FONT></P>

<P><FONT SIZE=2>Subject to certain
restrictions, the Fund may, and under certain circumstances is required to,
redeem all or a portion of the RPS at a price of $100,000 per share and all or
a portion of the APS at a price of $25,000 per share, in each case 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.</FONT></P>

<P><FONT FACE=ARIAL SIZE=2><B>DESCRIPTION OF BORROWINGS</B></FONT></P>

<P><FONT SIZE=2>The Fund is authorized to
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&#146;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). However, for
so long as the Fund&#146;s preferred stock is rated by S&amp;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&amp;P that such
Borrowings would not adversely affect S&amp;P&#146;s then-current rating of the
preferred stock.</FONT></P>

<P><FONT SIZE=3 > <BR></FONT>
<FONT SIZE=2>The Fund&#146;s board of
directors has authorized the Fund to issue up to $200,000,000 of CP Notes in
minimum denominations of $100,000 with maturities up to 270 days. The CP Notes
are generally sold on a discount basis, but may be sold on an interest-bearing
basis. During 2005, interest rates on the CP Notes ranged from 2.60% to 4.54%.
The CP Notes are not redeemable by the Fund nor are they subject to voluntary
prepayment prior to maturity. The aggregate amount of CP Notes outstanding
changes from time to time. At December 31, 2005, $200 million of CP Notes were
outstanding and the Fund had received proceeds of $197,255,382. The CP Notes
are unsecured, general obligations of the Fund. The CP Notes currently hold the
highest short-term debt rating from Moody&#146;s and S&amp;P.</FONT></P>

<P><FONT SIZE=2>To provide liquidity for the
CP Note program, the Fund maintains an unsecured backup credit facility, which
expires on December 11, 2006. The Fund is able to request loans under the
credit facility of up to $100,000,000 at any one time, subject to certain
restrictions. To date, the Fund has not made any Borrowings under the credit
facility.</FONT></P>

<P><FONT SIZE=2>The rights of lenders to the
Fund to receive interest on and repayment of principal of any such Borrowings
are senior to those of the Fund&#146;s shareholders, including the holders of APS.
In addition, the CP Notes and the credit facility contain customary restrictive
financial covenants. Among other things, the Fund is required to maintain
eligible portfolio property having a discounted value of at least 4.05 times
the Fund&#146;s liabilities. The Fund is also required to maintain total assets
equal to at least four times its liabilities, and net assets (defined as total
assets less liabilities other than senior securities representing indebtedness)
equal to at least four times the value of its senior securities representing
indebtedness. In addition, the Fund may not declare, pay or set apart for
payment any dividend or other distribution in respect of its common or
preferred stock, or call for redemption or redeem any of its common or
preferred stock, when loans are outstanding under the credit facility, or when
an event of default exists or would result under the credit facility.<FONT SIZE=3><BR>
</FONT></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px" >
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE="ARIAL" SIZE="2"><B>46</B> </FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Description
  of capital structure</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Under the requirements of
the Investment Company Act, the Fund, immediately after issuing any Borrowings
that are senior securities representing indebtedness (as defined in the
Investment Company Act), must have an asset coverage of at least 300%. With
respect to any Borrowings, asset coverage means the ratio which the value of
the total assets of the Fund, less all liabilities and indebtedness not
represented by senior securities, bears to the aggregate amount of any such
Borrowings that are senior securities representing indebtedness, issued by the
Fund. Certain types of Borrowings may also result in the Fund being subject to
covenants in credit agreements relating to asset coverages or portfolio
composition or otherwise. In addition, the Fund is subject to certain
restrictions imposed by guidelines of one or more rating agencies which may
issue ratings for CP Notes issued by the Fund. Such restrictions may be more
stringent than those imposed by the Investment Company Act.<BR><BR> The Investment
Company Act does (in certain circumstances) grant to the lenders to the Fund
certain voting rights in the event of default in the payment of interest on or
repayment of principal.</FONT></P>

<P><FONT SIZE=2>The Fund will utilize a
portion of the net proceeds of this offering to pay in full all amounts
outstanding under the CP Notes, after which the Fund intends to discontinue its
CP Note program and terminate the related backup credit facility.</FONT></P>

<P>
<BR>
<A NAME=A013></A><FONT SIZE=4 FACE=ARIAL>Certain provisions in the
charter and bylaws and certain
provisions of Maryland law<BR>
</FONT> </P>

<P><FONT SIZE=2 FACE=ARIAL><B>ANTI-TAKEOVER PROVISIONS IN THE CHARTER</B></FONT></P>

<P> <BR>
<FONT SIZE=2>The Fund&#146;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 common stockholders 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 with or without cause 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.<BR>
</FONT> </P>

<P><FONT SIZE=2>The Fund&#146;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: </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(i)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a merger or
  consolidation of the Fund with another corporation, </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(ii)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a sale of all or
  substantially all of the Fund&#146;s assets (other than in the regular course of
  the Fund&#146;s investment activities), or </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(iii)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>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 Investment Company Act to adopt any
plan of reorganization that would adversely affect the holders of the preferred
stock.</FONT></P>

<P><FONT SIZE=2>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
at least 75% of </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>47</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Certain
  provisions in the charter and bylaws and certain provisions of Maryland law</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>

</TABLE>

<P><FONT SIZE=2>the shares of preferred
stock and common stock of the Fund entitled to be voted on the matter, voting
together as a single class, unless such amendment 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, would be required. 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 Investment
Company 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.</FONT></P>

<P> <BR>
<FONT SIZE=2>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 Investment Company Act, are in the best interests of the Fund.
Reference should be made to the charter on file with the SEC for the full text
of these provisions.<BR>
</FONT> </P>

<P><FONT SIZE=2 FACE=ARIAL><B>ANTI-TAKEOVER PROVISIONS IN THE BYLAWS</B></FONT></P>

<P><FONT SIZE=2>The Fund&#146;s bylaws establish
advance notice procedures for shareholder proposals to be brought before an
annual meeting of shareholders, and for proposed nominations of candidates for
election to the board of directors at an annual or special meeting of
shareholders. Generally, such notices must be received by the Secretary of the
Fund, in the case of an annual meeting, not less than 90 days nor more than 120
days prior to the first anniversary of the preceding year&#146;s annual meeting and,
in the case of a special meeting, not later than the close of business on the
tenth day following the day on which notice of the date of the special meeting
was mailed or public announcement of the date of the special meeting was made,
whichever first occurs. Reference should be made to the bylaws on file with the
SEC for the detailed requirements of these advance notice procedures.</FONT></P>

<P> <BR>
<FONT FACE=ARIAL SIZE=2><B>ANTI-TAKEOVER PROVISIONS OF MARYLAND LAW</B></FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Maryland Business Combination Act</B></FONT>

<div><FONT SIZE=2>Under Maryland law,
&#147;business combinations&#148; between a Maryland corporation and an interested stockholder
or an affiliate of an interested stockholder are prohibited for five years
after the most recent date on which the interested stockholder becomes an
interested stockholder. These business combinations include a merger,
consolidation, share exchange, or, in circumstances specified in the statute,
an asset transfer or issuance or reclassification of equity Securities. An
interested stockholder is defined as: </FONT></div>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>any person who
  beneficially owns ten percent or more of the voting power of the corporation&#146;s
  shares; or </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>an affiliate or associate
  of the corporation who, at any time within the two-year period prior to the
  date in question, was the beneficial owner of ten percent or more of the
  voting power of the then outstanding voting stock of the corporation.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>A person is not an
interested stockholder under the statute if the board of directors approved in
advance the transaction by which he otherwise would have become an interested
stockholder. However, in approving a transaction, the board of directors may
provide that its approval is subject to compliance, at or after the time of
approval, with any terms and conditions determined by the board.</FONT></P>

<P><FONT SIZE=2>After the five-year
prohibition, any business combination between the Maryland corporation and an
interested stockholder generally must be recommended by the board of directors
of the corporation and approved by the affirmative vote of at least:<BR>
</FONT> </P>


<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>48</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Certain
  provisions in the charter and bylaws and certain provisions of Maryland law</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>80% of the votes entitled
  to be cast by holders of outstanding shares of voting stock of the
  corporation; and </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>two-thirds of the votes
  entitled to be cast by holders of voting stock of the corporation other than
  shares held by the interested stockholder with whom or with whose affiliate
  the business combination is to be effected or held by an affiliate or
  associate of the interested stockholder.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>These super-majority vote
  requirements do not apply if the corporation&#146;s common stockholders receive a
  minimum price, as defined under Maryland law, for their shares in the form of
  cash or other consideration in the same form as previously paid by the
  interested stockholder for its shares.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The statute permits various
exemptions from its provisions, including business combinations that are
exempted by the board of directors before the time that the interested
stockholder becomes an interested stockholder. </FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Maryland Control Share Acquisition Act</B></FONT>

<div><FONT SIZE=2>Maryland law provides that
control shares of a Maryland corporation acquired in a control share
acquisition have no voting rights except to the extent approved by a vote of
two-thirds of the votes entitled to be cast on the matter. Shares owned by the
acquiror, by officers or by directors who are employees of the corporation are
excluded from shares entitled to vote on the matter. Control Shares are voting
shares of stock which, if aggregated with all other shares of stock owned by
the acquiror or in respect of which the acquiror is able to exercise or direct
the exercise of voting power (except solely by virtue of a revocable proxy),
would entitle the acquiror to exercise voting power in electing directors
within one of the following ranges of voting power: </FONT></div>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>one-tenth or more but less
  than one-third, </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>one-third or more but less
  than a majority, or </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a majority or more of all
  voting power.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Control shares do not
include shares the acquiring person is then entitled to vote as a result of
having previously obtained stockholder approval. A control share acquisition
means the acquisition of control shares, subject to certain exceptions.</FONT></P>

<P><FONT SIZE=2>A person who has made or
proposes to make a control share acquisition may compel the board of directors
of the corporation to call a special meeting of stockholders to be held within
50 days of demand to consider the voting rights of the shares. The right to
compel the calling of a special meeting is subject to the satisfaction of
certain conditions, including an undertaking to pay the expenses of the meeting.
If no request for a meeting is made, the corporation may itself present the
question at any stockholders meeting.</FONT></P>

<P><FONT SIZE=2>If voting rights are not
approved at the meeting or if the acquiring person does not deliver an
acquiring person statement as required by the statute, then the corporation may
redeem for fair value any or all of the control shares, except those for which
voting rights have previously been approved. The right of the corporation to
redeem control shares is subject to certain conditions and limitations. Fair
value is determined, without regard to the absence of voting rights for the
control shares, as of the date of the last control share acquisition by the
acquiror or of any meeting of stockholders at which the voting rights of the
shares are considered and not approved. If voting rights for control shares are
approved at a stockholders meeting and the acquiror becomes entitled to vote a
majority of the shares entitled to vote, all other stockholders may exercise
appraisal rights. The fair value of the shares as determined for purposes of
appraisal rights may not be less than the highest price per share paid by the
acquiror in the control share acquisition.<BR>
</FONT> </P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>49</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>Certain
  provisions in the charter and bylaws and certain provisions of Maryland law</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The control share
acquisition statute does not apply (a) to shares acquired in a merger,
consolidation or share exchange if the corporation is a party to the
transaction, or (b) to acquisitions approved or exempted by the charter or
bylaws of the corporation.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>Maryland Unsolicited Takeovers Act</B></FONT>

<div><FONT SIZE=2>Subtitle 8 of Title 3 of the
Maryland General Corporation Law permits a Maryland corporation with a class of
equity securities registered under the Exchange Act and at least three
independent directors to elect to be subject, by provision in its charter or
bylaws or a resolution of its board of directors and notwithstanding any
contrary provision in the charter of bylaws, to any or all of five provisions: </FONT></div>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a classified board; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a two-thirds vote
  requirement for removing a director; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a requirement that the
  number of directors be fixed only by vote of directors; </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a requirement that a
  vacancy on the board be filled only by the remaining directors and for the
  remainder of the full term of the class of directors in which the vacancy
  occurred; and </FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#149;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>a majority requirement for
  the calling of a special meeting of stockholders.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2> A corporation may also
  adopt a charter provision or resolution of the Board of Directors that prohibits
  the corporation from electing to be subject to any or all of the provisions
  of the subtitle. At this time, we have
elected to be subject to the provisions regarding filling of vacancies, but
have not elected to be subject to any other of these provisions. However,
because our charter does not include a provision prohibiting us from electing
to be subject to any of these provisions, our Board of Directors may make such
an election at any time. Through provisions in our charter unrelated to
Subtitle 8, we already have a classified board and require more than a
two-thirds vote for the removal of directors.<BR>
</FONT> </P>

<P><A NAME=A014></A><FONT SIZE=4 FACE=ARIAL>Repurchase of common stock</FONT></P>

<P><FONT SIZE=2>Shares of closed-end
investment companies often trade at a discount to their net asset values, and
the Fund&#146;s common stock may also trade at a discount to its net asset value,
although it is possible that it may trade at a premium above net asset value.
The market price of the Fund&#146;s common stock is determined by such factors as
relative demand for and supply of such common stock in the market, the Fund&#146;s
net asset value, general market and economic conditions and other factors
beyond the control of the Fund. Although the Fund&#146;s common shareholders do not
have the right to redeem their common stock, the Fund may take action to
repurchase common stock in the open market or make tender offers for its common
stock. This may have the effect of reducing any market discount from net asset
value.</FONT></P>

<P> <BR>
<FONT SIZE=2>There is no assurance that, if action is undertaken to repurchase or tender for
shares of common stock, such action will result in the common stock trading at
a price which approximates net asset value. Although share repurchases and
tenders could have a favorable effect on the market price of the Fund&#146;s common
stock, you should be aware that the acquisition of shares of common stock by
the Fund will decrease the total net assets of the Fund and, therefore, may
have the effect of increasing the Fund&#146;s expense ratio and decreasing the asset
coverage with respect to any APS outstanding. Any share repurchases or tender
offers will be made in accordance with requirements of the Securities Exchange
Act of 1934 (the &#147;Exchange Act&#148;), the Investment Company Act and the principal
stock exchange on which the common stock is traded.<BR>
</FONT> </P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>50</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><A NAME=A015></A><FONT SIZE=4 FACE=ARIAL>U.S. federal income tax matters</FONT></P>

<P><FONT SIZE=2>The following is a summary
discussion of certain federal income tax consequences that may be relevant to a
U.S. shareholder that acquires, holds and/or disposes of shares of APS. It
reflects provisions of the Code, existing Treasury regulations, rulings
published by the IRS, and other applicable authority, in each case as of the
date of this Prospectus. These authorities are subject to change by legislative
or administrative action, possibly with retroactive effect. The following
discussion is only a summary of some of the important tax considerations
generally applicable to investments in the Fund and does not constitute tax
advice. For more detailed information regarding tax considerations, see the
Statement of Additional Information. There may be other tax considerations
applicable to particular investors. In addition, income earned through an
investment in the Fund may be subject to state, local and foreign taxes.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>TAXATION OF THE FUND</B></FONT></P>

<P><FONT SIZE=2>The Fund has elected to be
treated, has qualified and intends to continue to qualify for the special tax
treatment afforded regulated investment companies under the provisions of
Subchapter M of the Code. As long as the Fund so qualifies, in any taxable year
in which it distributes at least 90% of the sum of its investment company
taxable income (consisting generally of taxable net investment income, net
short-term capital gain and net realized gains from certain hedging
transactions) and certain other income, the Fund (but not its shareholders)
will not be subject to federal income tax to the extent that it distributes its
investment company taxable income and net capital gain (the excess of net
long-term capital gain over net short-term capital loss). The Fund intends to
distribute substantially all of such income and gain each year.</FONT></P>

<P><FONT SIZE=2>The Fund intends to take the
position that under present law the APS will constitute stock of the Fund, and
distributions by the Fund with respect to its APS (other than distributions in
redemption of APS that are treated as exchanges of stock under Section 302(b)
of the Code) will constitute dividends to the extent of the Fund&#146;s current and
accumulated earnings and profits as calculated for federal income tax purposes.
It is possible, however, that the IRS might take a contrary position,
asserting, for example, that the APS constitutes debt of the Fund. If this
position were upheld, distributions by the Fund to holders of APS would
constitute interest, whether or not they exceeded the earnings and profits of the
Fund, would be included in full in the income of the recipient and would be
taxed as ordinary income. The following discussion assumes that shares of APS
are treated as stock.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>TAXATION OF SHAREHOLDERS</B></FONT></P>

<P><FONT SIZE=2>Distributions of any net
investment income and net short-term capital gain will be taxable as ordinary
income (except to the extent that a reduced capital gains tax rate applies to
qualified dividend income). Distributions of the Fund&#146;s net capital gain, if
any, will be taxable to shareholders as long-term capital gains, regardless of
the length of time they held their shares. So long as the Fund has capital loss
carryforwards, distributions derived from capital gains in the Fund&#146;s portfolio
may constitute ordinary income, rather than capital gains, to shareholders.</FONT></P>

<P><FONT SIZE=2>Distributions, if any, in
excess of the Fund&#146;s earnings and profits will first reduce the adjusted tax
basis of a holder&#146;s shares and, after that basis has been reduced to zero, will
constitute capital gains to the shareholder (assuming the shares are held as
capital assets). For purposes of determining whether distributions are out of
the Fund&#146;s current or accumulated earnings and profits, the Fund&#146;s earnings and
profits will be allocated first to the Fund&#146;s preferred stock and then to the
Fund&#146;s common stock.<BR><BR> Subject to certain conditions and limitations, including
certain holding period requirements for the Fund and the shareholders under
applicable federal income tax provisions, a corporation receiving dividends
with respect to stock it owns in another corporation is allowed a deduction
against a portion of such dividend income received (the &#147;Dividends Received
Deduction&#148;). The Fund expects to receive dividends</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>51</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>U.S.
  federal income tax matters</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>with respect to some
or all of the stocks in other corporations held by the Fund, and the Fund may
designate dividends paid by the Fund as eligible for the Dividends Received
Deduction to the extent that the Fund receives dividends for which the Fund
would be entitled to the Dividends Received Deduction if the Fund were a
regular corporation and not a regulated investment company. A corporation that
owns common stock or preferred stock of the Fund generally will be entitled to
a Dividends Received Deduction with respect to a designated portion of the
dividends it receives from the Fund. </FONT></P>

<P><FONT SIZE=2>To the extent that the
source of dividends or distributions with respect to the APS is dividends
received by the Fund that would be eligible for the Dividends Received
Deduction, a corporate holder of APS will be allowed a deduction equal to 70%
of the dividends paid to it by the Fund that are designated by the Fund as
eligible for the Dividends Received Deduction. The aggregate amount of
Dividends Received Deductions that may be taken by a corporation is limited to
70% of its taxable income, computed without regard to any net operating loss
deduction. The portion of a dividend on the APS that can be designated as
eligible for the Dividends Received Deduction will be limited by the fact that
dividend income received by the Fund is allocated to the RPS first, before
being allocated to any other class or series of the Fund&#146;s stock. Dividends on
the APS and the Fund&#146;s common stock will be designated as eligible for the
Dividends Received Deduction only to the extent that any qualifying income
remains after dividends are paid on the RPS.</FONT></P>

<P> <BR>
<FONT SIZE=2>Dividends declared by the Fund in October, November or December of any year and
payable to shareholders of record on a date in any of those months will be
deemed to have been paid by the Fund and received by the shareholders on
December 31 of that year if the dividends are paid by the Fund during the
following January. Accordingly, those dividends will be taxed to shareholders
for the year in which that December 31 falls.<BR>
</FONT> </P>

<P><FONT SIZE=2>The Fund will inform
shareholders of the source and tax status of all distributions promptly after
the close of each calendar year. The IRS has taken the position that if a
regulated investment company has more than one class of stock, it may designate
distributions made to each class in any year as consisting of no more than that
class&#146;s proportionate share of particular types of income for that year,
including ordinary income and net capital gain. A class&#146;s proportionate share
of a particular type of income for a year is determined according to the
percentage of total dividends paid by the regulated investment company during
that year to the class. The IRS, however, will not render such designations
ineffective for federal income tax purposes even if it is a disproportionate
designation as long as such designation is made pursuant to a rule described in
a registration statement that was filed with the SEC before June 13, 1989.</FONT></P>

<P> <BR>
<FONT SIZE=2>The Fund has received a private letter ruling from the IRS that states that the
IRS will respect the Fund&#146;s proposed method of designating income eligible for
the Dividends Received Deduction to the RPS, common stock and the APS. More
specifically, the IRS will respect the Fund&#146;s designation of income eligible
for the Dividends Received Deduction to the RPS pro rata between dividend
income that is eligible for the Dividends Received Deduction (and that
constitutes qualified dividend income) and dividend income that is eligible for
the Dividends Received Deduction (but does not constitute qualified dividend
income). To the extent any qualifying income remains after dividends are paid
on the RPS, distributions on the common stock and the APS will be designated as
income eligible for the Dividends Received Deduction on a pro rata basis between
these classes. Dividend income that constitutes qualified dividend income (but
is not eligible for the Dividends Received Deduction) and net capital gain will
be designated to the common stock and the APS (and to the RPS to the extent the
Fund&#146;s qualified income is less than the distribution to the RPS) on a pro rata
basis among these classes.<BR><BR>If at any time when any shares of APS are
outstanding the Fund does not meet the asset coverage requirements of the
Investment Company Act, the Fund will be required to suspend distributions to
holders of common stock until the asset coverage is restored. See &#147;Description
of APS&#151;Dividends and dividend periods&#151;Restrictions on dividends and other
payments.&#148; Such a suspension may prevent the Fund from distributing at least
90% of the sum of its investment company taxable income and certain other
income and may, therefore, jeopardize the Fund&#146;s qualification for taxation as
a regulated investment company. Upon any failure to meet the asset coverage
requirements of the Investment Company<BR>
</FONT> </P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>52</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>U.S.
  federal income tax matters</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>Act, the Fund, in its sole
discretion, may redeem shares of APS in order to maintain or restore the
requisite asset coverage and avoid the adverse consequences to the Fund and its
shareholders of failing to qualify for treatment as a regulated investment
company. See &#147;Description of APS&#151;Redemption.&#148; There can be no assurance,
however, that any such action would achieve that objective.</FONT></P>

<P> <BR>
<FONT SIZE=2>Under current law, the U.S. federal income tax rate on long-term capital gains
recognized by individuals is 15% (or 5% for individuals in the 10% or 15% tax
brackets) and by corporations is 35%. &#147;Qualified dividend income&#148; received by
individuals from certain domestic and foreign corporations also is taxed at
this reduced capital gains tax rate. Qualified dividend income received by
corporations is taxed at ordinary income tax rates to the extent it is not
eligible for and reduced by the Dividends Received Deduction. The reduced
long-term capital gains tax rate will apply to capital gains realized by
shareholders who sell shares of APS that they have held for more than one year.
The reduced rates, which do not apply to short-term capital gains, generally
apply to long-term capital gains from sales or exchanges (and to Fund
distributions of such gain) for taxable years beginning before January 1, 2009.
Fund distributions designated as capital gain dividends should be eligible for
the reduced rate applicable to long-term capital gains for individuals. Ordinary
income dividends paid by the Fund will be eligible to be treated by individual
Fund shareholders as qualified dividend income taxed at the reduced capital
gains rate to the extent that some portion of the Fund&#146;s dividends are
attributable to qualified dividend income received by the Fund and to the
extent that the Fund designates such portion as qualified dividend income. The
reduced rates apply only if certain holding period requirements are satisfied
by the shareholder. For this purpose, &#147;qualified dividend income&#148; means
dividends received by the Fund from U.S. corporations and qualifying foreign
corporations, provided that the Fund satisfies certain holding period and other
requirements in respect of the stock of such corporations. As is the case with
the Dividends Received Deduction, to the extent the Fund is required to
allocate income eligible for the Dividends Received Deduction to the RPS, the
allocation to the RPS generally will reduce the dividends on the common stock
and the APS that are eligible for the special qualified dividend rate. <BR>
</FONT> </P>

<P><FONT SIZE=2>In the case of securities
lending transactions, payments in lieu of dividends are not treated as
qualified dividend income. Dividends received by the Fund from REITs are
treated as qualified dividend income eligible for this lower tax rate only in
limited circumstances.</FONT></P>

<P><FONT SIZE=2>These special rules relating
to the taxation of the Fund&#146;s ordinary income dividends as qualified dividend
income generally apply to taxable years beginning before January 1, 2009.
Thereafter, the Fund&#146;s dividends, other than capital gain dividends, will be
fully taxable at ordinary income tax rates unless further legislative action is
taken.</FONT></P>


<P><FONT SIZE=2>A dividend paid by the Fund
to a shareholder will not be treated as qualified dividend income of the
shareholder if (1) the dividend is received with respect to any share held for
fewer than 61 days during the 121-day period beginning on the date which is 60
days before the date on which such share becomes ex-dividend with respect to
such dividend (or more than 90 days during the associated 181-day period, in
the case of dividends attributable to periods in excess of 366 days paid with
respect to preferred stock), (2) to the extent that the recipient is under an
obligation (whether pursuant to a short sale or otherwise) to make related
payments with respect to positions in substantially similar or related
property, or (3) if the recipient elects to have the dividend treated as
investment income for purposes of the limitation on deductibility of investment
interest.</FONT></P>

<P><FONT SIZE=2>Dividends and interest
received, and gains realized, by the Fund on foreign securities may be subject
to income, withholding or other taxes imposed by foreign countries and U.S.
possessions (collectively &#147;foreign taxes&#148;) that would reduce the return on its
securities. Tax conventions between certain countries and the United States,
however, may reduce or eliminate foreign taxes, and many foreign countries do
not impose taxes on capital gains in respect of investments by foreign
investors. Since less than 50% of the value
of the Fund&#146;s total assets at the close of its taxable year will consist of
securities of foreign corporations, no foreign tax credit with respect to any
foreign taxes paid by the Fund will pass through to its shareholders.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>53</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>U.S.
  federal income tax matters</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>



<P><FONT SIZE=2>The Fund will inform
shareholders of the source and tax status of all distributions promptly after
the close of each calendar year.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>SALES OF APS</B></FONT></P>

<P> <BR>
<FONT SIZE=2>The sale of APS (including transfers in connection with a redemption or
repurchase of APS treated as a sale or exchange) will be a taxable transaction
for federal income tax purposes. A selling shareholder generally will recognize
gain or loss equal to the difference between the amount of cash (plus the fair
market value of any property received) and the holder&#146;s adjusted tax basis in
the APS. If the shares of APS are held as a capital asset, the gain or loss
will be a capital gain or loss and will be long-term if the shares of APS have
been held for more than one year. The maximum tax rate applicable to capital
gains recognized by individuals and other non-corporate taxpayers is (i) the
same as the maximum ordinary income tax rate for gains recognized on the sale
of capital assets held for one year or less, or (ii) 15% for gains recognized
on the sale of capital assets held for more than one year (as well as certain
capital gain dividends) (5% for individuals in the 10% or 15% tax brackets).
The maximum tax rate applicable to net capital gains recognized by a corporate
taxpayer is 35%. Any loss realized on a disposition of shares of APS held for
six months or less will be treated as a long-term, rather than a short-term,
capital loss to the extent of any capital gain distributions received with
respect to those shares of APS. A shareholder&#146;s holding period for APS is
suspended for any periods during which the shareholder&#146;s risk of loss is
diminished as a result of holding one or more other positions in substantially
similar or related property, or through certain options, sales contracts or
short sales. Any loss realized on a sale or exchange of shares of APS will be
disallowed to the extent those shares of APS are replaced by other
substantially identical shares within a period of 61 days beginning 30 days
before and ending 30 days after the date of disposition of the original shares
of APS. In that event, the basis of the replacement shares of APS will be
adjusted to reflect the disallowed loss.<BR>
</FONT> </P>

<P><FONT SIZE=2>An investor should also be
aware that the benefits of the reduced tax rate applicable to long-term capital
gains and qualified dividend income may be impacted by the application of the
alternative minimum tax to individual shareholders.</FONT></P>

<P><FONT SIZE=2 FACE=ARIAL><B>BACKUP WITHHOLDING</B></FONT></P>

<P><FONT SIZE=2>The Fund is required to
withhold a percentage of all taxable dividends, capital gain distributions and
repurchase proceeds payable to any individuals and certain other non-corporate
shareholders who do not provide the Fund with a correct taxpayer identification
number. Such withholding from taxable dividends and capital gain distributions
is also required for such shareholders who fail to provide certain
certifications or otherwise are subject to backup withholding. Backup
withholding is not an additional tax. Any amounts withheld from payments made
to a shareholder may be refunded or credited against the shareholder&#146;s U.S.
federal income tax liability, provided that the required information is
furnished to the IRS.</FONT></P>

<P><FONT SIZE=2>The foregoing briefly
summarizes some of the important federal income tax consequences of investing
in the APS, reflects the federal tax law as of the date of this Prospectus, and
does not address special tax rules applicable to certain types of investors,
such as foreign investors. Investors should consult their tax advisors
regarding other federal, state or local tax considerations that may be
applicable in their particular circumstances, as well as any proposed tax law
changes. A more complete discussion of the tax rules applicable to the Fund and
its shareholders can be found in the Statement of Additional Information, which
is incorporated by reference into this Prospectus.</FONT></P>

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<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>54</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
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<BR>

<div> </div>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>
<div> </div>

<P><A NAME=A016></A><FONT SIZE=4 FACE=ARIAL>Underwriting</FONT></P>

<div> </div>
<DIV><FONT SIZE=2>UBS Securities LLC, 299 Park Avenue, New York, New York, has agreed, subject to
the terms and conditions of the Underwriting Agreement with the Fund and the
Adviser, to purchase from the Fund the number of APS set forth below. The
Underwriter is committed to purchase and pay for all of the Fund&#146;s APS if any
are purchased.</FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="74%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT FACE=ARIAL SIZE=1><B>Underwriter</B></FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<P ALIGN=CENTER><FONT FACE=ARIAL SIZE=1><B>Number
  of shares of APS</B></FONT></P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>UBS Securities LLC</FONT></P>
</TD>
<TD COLSPAN="3" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Total</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=3 WIDTH="100%" NOSHADE COLOR=GRAY ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>The Underwriter has advised
the Fund that it proposes initially to offer the APS of the Fund to the public
at the public offering price set forth on the cover page of this Prospectus,
and to certain dealers at such price less a concession not in excess of $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share. The sales load the Fund will pay
of $250 per share of APS is equal to 1% of the initial offering price. The
Underwriter may allow, and such dealers may reallow, a discount not in excess
of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to other dealers. After the initial public offering, the public offering
price, concession and discount may be changed. Investors must pay for any APS
purchased on or before &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2006.</FONT></P>

<P><FONT SIZE=2>The Underwriter will act in
auctions as a Broker-Dealer as set forth under &#147;The auction&#148; and will be
entitled to fees for services as a Broker-Dealer as set forth therein. The
Underwriter also may provide information to be used in ascertaining the
reference rate.</FONT></P>

<P><FONT SIZE=2>The Fund anticipates that
the Underwriter may from time to time act as a broker and dealer in connection
with the execution of the Fund&#146;s portfolio transactions after it has ceased to
be the principal underwriter of the Fund under the Investment Company Act and,
subject to certain conditions, may act as a broker while it is principal
underwriter.</FONT></P>

<P><FONT SIZE=2>In connection with this
offering, the Underwriter or selected dealers may distribute prospectuses
electronically.</FONT></P>

<P><FONT SIZE=2>The Fund and the Adviser
have agreed to indemnify the Underwriter against certain liabilities, including
liabilities under the Securities Act of 1933.<BR>
</FONT> </P>

<P><A NAME=A017></A><FONT SIZE=4 FACE=ARIAL>Custodian, transfer agent and auction agent</FONT></P>

<P> <BR>
<FONT SIZE=2>The Fund&#146;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&#146;s common and preferred stock is The Bank of
New York, Church Street Station, P.O. Box 11258, New York, New York 10286. The
Fund&#146;s auction agent is The Bank of New York, Church Street Station, P.O. Box 11258, New York, New York 10286.<BR>
</FONT> </P>

<P><A NAME=A018></A><FONT SIZE=4 FACE=ARIAL>Legal opinions</FONT></P>

<P> <BR>
<FONT SIZE=2>Certain legal matters in connection with the shares of APS offered hereby will
be passed upon by Mayer, Brown, Rowe &amp; Maw LLP, Chicago, Illinois, and for
the Underwriter by Skadden, Arps, Slate, Meagher &amp; Flom LLP, Chicago,
Illinois. DLA Piper Rudnick Gray Cary US LLP, Baltimore, Maryland, will opine
on certain matters pertaining to Maryland law. Mayer, Brown, Rowe &amp; Maw LLP
and Skadden, Arps, Slate, Meagher &amp; Flom LLP may rely as to certain matters
of Maryland law on the opinion of DLA Piper Rudnick Gray Cary US LLP.<BR>
</FONT> </P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>55</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><A NAME=A019></A><FONT SIZE=4 FACE=ARIAL>Available information</FONT></P>

<P> <BR>
<FONT SIZE=2>The Fund is subject to the informational requirements of the Exchange Act and
the Investment Company Act and is required to file reports, proxy statements
and other information with the SEC. These documents can be inspected and copied
for a fee at the SEC&#146;s public reference room, 100 F Street, N.E., Washington,
D.C. 20549, and at the SEC&#146;s Northeast Regional Office, 233 Broadway, New York,
New York 10279. Reports, proxy statements and other information about the Fund
can be inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.<BR>
</FONT> </P>

<P><FONT SIZE=2>This Prospectus does not
contain all of the information in the Fund&#146;s registration statement, including
amendments, exhibits, and schedules. Statements in this Prospectus about the
contents of any contact or other document are not necessarily complete and in
each instance reference is made to the copy of the contact or other document
filed as an exhibit to the registration statement, each such statement being
qualified in all respects by this reference.</FONT></P>

<P> <BR>
<FONT SIZE=2>Additional information about the Fund and the APS can be found in the Fund&#146;s
registration statement (including amendments, exhibits, and schedules) on Form
N-2 filed with the SEC. The SEC maintains a web site (http://www.sec.gov) that
contains the Fund&#146;s registration statement, other documents incorporated by
reference, and other information the Fund has filed electronically with the
SEC, including proxy statements and reports filed under the Exchange Act.<BR>
</FONT> </P>

<P><A NAME=A020></A><FONT SIZE=4 FACE=ARIAL>Privacy principles of the Fund</FONT></P>

<P><FONT SIZE=2>The Fund is committed to
maintaining the privacy of its shareholders and to safeguarding their non-public
personal information. The following information is provided to help you
understand what personal information the Fund collects, how the Fund protects
that information and why, in certain cases, the Fund may share information with
select other parties.</FONT></P>

<P><FONT SIZE=2>Generally, the Fund does not
receive any non-public personal information relating to its shareholders,
although certain non-public personal information of its shareholders may become
available to the Fund. The Fund does not disclose any non-public personal
information about its shareholders or former shareholders to anyone, except as
permitted by law or as is necessary in order to service shareholder accounts
(for example, to a transfer agent or third party administrator).</FONT></P>

<P><FONT SIZE=2>The Fund restricts access to
non-public personal information about its shareholders to employees of the
Fund&#146;s investment adviser and its affiliates with a legitimate business need
for the information. The Fund maintains physical, electronic and procedural
safeguards designed to protect the non-public personal information of its
shareholders.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>56</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=4 FACE=ARIAL><A NAME=A021></A>Table of contents for the<BR>
Statement of Additional Information</FONT></P>



<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
    <TD WIDTH="95%" VALIGN=BOTTOM>
      <P>&nbsp;</P></TD>
    <TD WIDTH="4%" VALIGN=BOTTOM>
      <P ALIGN=CENTER>&nbsp;</P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=1>&nbsp;</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=CENTER><FONT SIZE=1><B>Page</B></FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=1>&nbsp;</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
    </TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Investment Policies, Techniques and Restrictions</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>2</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Management of the Fund</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>5</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Portfolio Transactions and Brokerage</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>14</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Additional Information Concerning the Auctions for APS</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Repurchase of Common Stock</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>21</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Dividend Reinvestment Plan</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>23</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>U.S. Federal Income Tax Matters</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>24</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Experts</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>30</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Additional Information</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>31</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Financial Statements</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>31</FONT></P></TD>
  </TR>
  <TR>
    <TD VALIGN=BOTTOM>
      <P><FONT SIZE=2>Appendix A: Form of Articles Supplementary Creating Series
          M, Series W and Series F of Auction Preferred Stock</FONT></P></TD>
    <TD VALIGN=BOTTOM>
      <P ALIGN=RIGHT><FONT SIZE=2>A-1</FONT></P></TD>
  </TR>
</TABLE>


<BR>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=RIGHT><FONT SIZE=2   FACE=ARIAL><B>57</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>
<BR>
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<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>
<IMG src="c40133_n2x1x1.jpg" border=0>
</FONT></P>
</TD>
</TR>
</TABLE>

<BR>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="100%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE  ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2 FACE=ARIAL><B>58</B></FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P align="left" style="page-break-before:always"></P><PAGE>


<HR ALIGN="LEFT" WIDTH="100%" size="4" noshade style="margin-top: -5px">
<HR ALIGN="LEFT" WIDTH="100%" size="1" noshade style="margin-top: -10px">

<P><FONT SIZE=2 COLOR=RED>The information in this Statement of
Additional Information is not complete and may be changed. A registration
statement relating to these securities has been filed with the Securities and
Exchange Commission. We may not sell these securities until the registration
statement is effective. This Statement of Additional Information is not a
prospectus.</FONT></P>

<div><FONT SIZE=3 COLOR=BLACK> </FONT><BR>
</div>

<div ALIGN=CENTER><FONT size=2 COLOR=RED>Subject to Completion,
dated March 23, 2006<BR>
<BR></FONT></div>

<div ALIGN=CENTER><FONT SIZE=2><B>STATEMENT OF ADDITIONAL INFORMATION<BR>
, 2006<BR></B></FONT></div>
<div><FONT SIZE=3 COLOR=BLACK> </FONT></div>

<P ALIGN=CENTER><FONT SIZE=2><B>DNP Select Income Fund Inc.<BR>
55 East Monroe Street, Suite 3600 <BR>
Chicago, Illinois 60603 <BR>
(312) 368-5510</B></FONT></P>

<P><FONT SIZE=3> <BR>
<B><FONT SIZE=2>This Statement of Additional
Information (&#147;SAI&#148;) is not a prospectus and is authorized for distribution to
prospective investors only if preceded or accompanied by the prospectus of DNP
Select Income Fund Inc., subject to completion, dated March 23, 2006 as supplemented
from time to time, which is incorporated herein by reference. This SAI should
be read in conjunction with such prospectus, a copy of which may be obtained
without charge by contacting your financial intermediary or calling the Fund at
(888) 878-7845.</FONT><BR>
</B><FONT SIZE=3> </FONT></font></P><FONT SIZE=3>

<HR size="1" noshade style="margin-top: -2px">
<HR size="4" noshade style="margin-top: -10px">
<P STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<P ALIGN=CENTER><FONT SIZE=2><B>TABLE OF CONTENTS</B></FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="92%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="4%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Page</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A001">Investment Policies, Techniques and
  Restrictions</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>2</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A002">Management of the Fund</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>5</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A003">Portfolio Transactions and Brokerage</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>14</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A004">Additional Information Concerning the
  Auctions for APS</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>16</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A005">Repurchase of Common Stock</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>21</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A006">Dividend Reinvestment Plan</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>23</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A007">U.S. Federal Income Tax Matters</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>24</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A008">Experts</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>30</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A009">Additional Information</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>31</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A010">Financial Statements</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>31</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=2><A HREF="#A011">Appendix A: Articles Supplementary Creating
  Series M, Series W and Series F of Auction Preferred Stock</A></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>A-1</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT   SIZE=3> </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P STYLE='MARGIN-LEFT:8.65PT;TEXT-INDENT:-8.65PT'><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=GRAY ALIGN=CENTER>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capitalized
terms used in this SAI and not otherwise defined have the meanings given them
in the Fund&#146;s prospectus.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>INVESTMENT
POLICIES, TECHNIQUES AND RESTRICTIONS</B></FONT></P>

<P><FONT SIZE=3> </FONT><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>The
Fund&#146;s primary investment objectives are current income and long-term growth of
income. Capital appreciation is a secondary objective. 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&#146;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.</FONT><BR>
<FONT SIZE=3> </FONT></P>

<P><FONT SIZE=2><B>Fundamental Investment Restrictions</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following are fundamental investment restrictions of the Fund that may be
changed only with approval of the holders of a &#147;majority&#148; (as defined in the
Investment Company Act) of the outstanding shares of the Fund&#146;s common stock
and preferred stock voting together as a single class:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="85%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>1.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>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 public 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 U.S. government or its agencies or
  instrumentalities.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>2.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>The Fund may
  not:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(a)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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
  U.S. government securities; or</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(b)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>acquire more
  than 10% of the outstanding voting securities of any one issuer (at the time
  of acquisition);</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>except that
  up to 25% of the Fund&#146;s total assets (at the time of investment) may be
  invested without regard to the limitations set forth in this restriction.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>3.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>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&#146;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).</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>4.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>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.)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>5.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>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.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>6.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>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 because the Fund could be
  regarded as an underwriter as defined in that act with respect to the resale.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>7.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>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.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>8.</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>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).</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>2</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="90%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&nbsp;&nbsp;9.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The Fund may
  not invest for the purpose of exercising control over or management of any
  company.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>10.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>11.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>12.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>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&#146;s charter. The Fund&#146;s charter expressly grants the Fund&#146;s board of
  directors the authority to cause the Fund to issue one or more series of
  preferred stock, and to fix by resolution the preferences, conversion or
  other rights, voting powers, restrictions, limitations as to dividends,
  qualifications, and terms and conditions of redemptions, of each such series.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2><B>Additional Nonfundamental Restrictions</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;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.</FONT></P>

<P><FONT SIZE=2><B>Other Significant Investment Policies</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following are other significant investment policies and restrictions of the
Fund, which may be changed by the board of directors without the approval of
the Fund&#146;s shareholders.</FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed
Income Securities. </B>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&#146;s, S&amp;P and Fitch, Inc. or (ii) determined by the
Fund&#146;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&#146;s, or BBB- or better by S&amp;P. In making its determination
that a fixed income security is investment grade, the Fund&#146;s investment adviser
will use the standards used by a nationally recognized statistical rating
organization.</FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rating
Agency Guidelines. </B>The Fund&#146;s preferred stock is
currently rated by Moody&#146;s and S&amp;P, nationally recognized statistical
rating organizations, which issue ratings for various securities reflecting the
perceived cred-itworthiness 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&#146;s receipt of the highest rating for
its preferred stock from at least two of such rating organizations.</FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Options
and Futures Transactions. </B>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&#146;s preferred stock are rated either by Moody&#146;s or S&amp;P, the Fund will
not purchase or sell futures contracts or related options or engage in other
hedging transactions unless Moody&#146;s or S&amp;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&#146;s preferred stock.</FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Swap
and Swaption Transactions. </B>The Fund may utilize
interest rate and credit swaps and swaptions, subject to the following
restrictions: (i) swaps and swaptions must be U.S. dollar denominated and used
for hedging purposes only; (ii) no more than 5% of the Fund&#146;s total assets, at
the time of purchase, may be invested in time premiums paid for swaptions;
(iii) the terms of all swaps and swaptions must conform to the standards of the
ISDA Master Agreement published by the International Swaps and Derivatives
Association, Inc.; and (iv) the counterparty must be a bank or broker-dealer
firm regulated under the laws of the United States that is (A) on a list
approved by the board of directors, (B) with capital of at least $100 million
and (C) rated investment grade by both S&amp;P and Moody&#146;s.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>3</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=3> <BR></FONT>
<FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Credit
Derivatives. </B>The market value of the Fund&#146;s investments in credit
derivatives and/or premiums paid therefor as a buyer of credit protection will
not exceed 10% of the Fund&#146;s total assets and the notional value of the credit
exposure to which the Fund is subject when it sells credit derivatives will not
exceed 33 1/3% of the Fund&#146;s total
assets.</FONT></P>

<P><FONT SIZE=2><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign
securities. </B>The Fund may not invest in securities
issued by public utilities located outside the United States if, as a result of
such investment, 15% or more of the Fund&#146;s total assets would be invested in
such securities.<BR>
<FONT SIZE=3> </FONT></FONT></P>

<P><FONT SIZE=2><B>Percentage Restrictions</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Fund&#146;s investment policies, techniques and restrictions that are set forth in
the Prospectus or this Statement of Additional Information may contain
percentage restrictions with respect to the amount of the Fund&#146;s assets that
may be invested in a given manner. If any such percentage restriction 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.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>4</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>MANAGEMENT OF
THE FUND</B></FONT></P>

<P><FONT SIZE=3> </FONT><BR>
<B><FONT SIZE=2>Directors and Officers</FONT><BR>
</B><FONT SIZE=3> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;s common stock. The officers are elected
at the annual meeting of the board of directors of the Fund.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="26%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="13%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name, Address <BR>
  and Age</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Position(s)
  Held <BR>
  With the Fund,<BR>
  Term of <BR>
  Office and <BR>
  Length of <BR>
  Time Served</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Principal
  Occupation(s)<BR>
  During Past 5 Years</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Number
  of <BR>
  Portfolios in <BR>
  Fund <BR>
  Complex <BR>
  Overseen <BR>
  by Director</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Other
  Directorships <BR>
  Held by Director/Officer</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>



<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><B><I>Independent Directors</I></B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Stewart E.
  Conner (3)(4) <BR>
  c/o Duff &amp; Phelps Investment<BR>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Co.<BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 64</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  since April 2004. Term expires in 2007.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Attorney,
  Wyatt Tarrant &amp; Combs LLP since 1966 (Chairman, Executive Committee 2000&#150;2004,
  Managing Partner 1988&#150;2000)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Connie K.
  Duckwoth (2)(4) <BR>
  c/o Duff &amp; Phelps Investment<BR>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Co.<BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 51</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  since April 2002. Term expires in 2008.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Founder,
  Chairman, and President, Arzu, Inc. (non-profit corporation created to
  assist Afghan women through sale of homemade rugs) since August 2003; Member,
  Eight Wings Enterprises LLC (investor in early stage businesses) 2002&#150;2004;
  Advisory Director, Goldman, Sachs &amp; Company, December 2000&#150;December 2001
  (Managing Director, December 1996&#150;December 2000, Partner 1990&#150;1996, Chief
  Operating Officer of Firmwide Diversity Committee 1990&#150;1995)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director,
  Smurfit-Stone Container Corporation (packaging manufacturer); Trustee,
  Northwestern Mutual Life Insurance Company; Director and Vice Chairman,
  Evanston Northwestern Health Care Corporation; Member, Board of Overseers,
  Wharton School of the University of Pennsylvania</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Robert J.
  Genetski (2)(5) <BR>
  c/o Duff &amp; Phelps Investment <BR>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Co. <BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 63</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  since April 2001. Term expires in 2007.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>President,
  Robert Genetski &amp; Associates, Inc. (economic and financial consulting
  firm) since 1991; Senior Managing Director, Chicago Capital, Inc. Inc.
  (financial services firm) 1995&#150;2001; former Senior Vice President and Chief
  Economist, Harris Trust &amp; Savings Bank; author of several books; regular
  contributor to the <I>Nikkei</I> <I>Financial Daily</I></FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director,
  Midwest Banc Holdings Inc.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>5</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="23%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="22%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name, Address <BR>
  and Age</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Position(s)
  Held <BR>
  With the Fund,<BR>
  Term of <BR>
  Office and <BR>
  Length of <BR>
  Time Served</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Principal
  Occupation(s)<BR>
  During Past 5 Years</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Number
  of <BR>
  Portfolios in <BR>
  Fund <BR>
  Complex <BR>
  Overseen <BR>
  by Director</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Other
  Directorships <BR>
  Held by Director/Officer</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Francis E.
  Jeffries (1)<BR>
  c/o Duff &amp; Phelps Investment &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Co.<BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 75</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director since
  January 1987. Term expires in 2007. Chairman since May 2005 (Vice Chairman
  April 2004&#150; May 2005).</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chairman of
  the Board, DTF Tax-Free Income Inc. and Duff &amp; Phelps Utility and
  Corporate Bond Trust Inc. (the &#147;DTF and DUC Funds&#148;) since September 1991 and
  November 1992, respectively (President, January 2000&#150;February 2004),
  Chairman, Phoenix Investment Partners, Ltd. November 1995&#150;May 1997; Chairman
  and Chief Executive Officer, Duff &amp; Phelps Corporation, June
  1993&#150;November 1995 (President and Chief Executive Officer, January 1992&#150;June
  1993); Chairman of the Board, Duff &amp; Phelps Investment Management Co.
  1988&#150;1993</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>54</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP NOWRAP>
<P><FONT SIZE=2>Nancy
  Lampton (3)(4)(5) <BR>
  c/o Duff &amp; Phelps Investment<BR>
  Management Co. <BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 63</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  since October 1994. Term expires in 2006.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chairman and
  Chief Executive Officer, Hardscuffle Inc. (insurance holding company) since
  January 2000; Chairman and Chief Executive Officer, American Life and
  Accident Insurance Company of Kentucky since 1971</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>3</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director,
  Constellation Energy Group, Inc. (public utility holding company); Advisory
  Board Member, Thorium Power, Inc. (designer of non-proliferative fuel for
  nuclear energy needs)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>6</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="25%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="13%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name, Address <BR>
  and Age</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Position(s)
  Held <BR>
  With the Fund,<BR>
  Term of <BR>
  Office and <BR>
  Length of <BR>
  Time Served</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Principal
  Occupation(s)<BR>
  During Past 5 Years</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Number
  of <BR>
  Portfolios in <BR>
  Fund <BR>
  Complex <BR>
  Overseen <BR>
  by Director</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Other
  Directorships <BR>
  Held by Director/Officer</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP NOWRAP>
<P><FONT SIZE=2>Christian H.
  Poindexter (2)(3)<BR>
  c/o Duff &amp; Phelps Investment<BR>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Co.<BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 67</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  since May 2003. Term expires in 2006.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Retired
  Chairman and Chief Executive Officer, Constellation Energy Group, Inc.
  (public utility holding company) (Executive Committee Chairman, July 2002&#150;
  March 2003; Chairman of the Board, April 1999&#150;July 2002; Chief Executive
  Officer, April 1999&#150; October 2001; President, April 1999&#150;October 2000); Chairman,
  Baltimore Gas and Electric Company, January 1993&#150;July 2002 (Chief Executive
  Officer, January 1993&#150;July 2000; President, March 1998&#150; October 2000;
  Director, 1988&#150;2003)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director,
  Mercantile Bankshares Corporation (bank holding company); Director, The
  Baltimore Life Insurance Company; Member, Finance and Investment Committee,
  National Executive Board, Boy Scouts of America; Chairman, Investment
  Committee, U.S. Naval Academy Foundation</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP NOWRAP>
<P><FONT SIZE=2>Carl F.
  Pollard (1)(2) <BR>
  c/o Duff &amp; Phelps Investment<BR>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Co.<BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 67</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  since April 2002. Term expires in 2008.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Owner,
  Hermitage Farm L.L.C. (thoroughbred breeding) since January 1995; Chairman,
  Columbia Healthcare Corporation 1993&#150;1994; Chairman and Chief Executive
  Officer, Galen Health Care, Inc. March&#150;August 1993; President and Chief
  Operating Officer, Humana Inc. 1991&#150;1993 (previously Senior Executive Vice
  President, Executive Vice President and Chief Financial Officer)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chairman of
  the Board and Director, Churchill Downs Incorporated</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>7</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="26%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="12%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="21%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="20%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name, Address <BR>
  and Age</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Position(s)
  Held <BR>
  With the Fund,<BR>
  Term of <BR>
  Office and <BR>
  Length of <BR>
  Time Served</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Principal
  Occupation(s)<BR>
  During Past 5 Years</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Number
  of <BR>
  Portfolios in <BR>
  Fund <BR>
  Complex <BR>
  Overseen <BR>
  by Director</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Other
  Directorships <BR>
  Held by Director/Officer</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>David J.
  Vitale (1)(4) <BR>
  c/o Duff &amp; Phelps Investment <BR>
  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Management Co. <BR>
  55 East Monroe Street, <BR>
  Suite 3600 <BR>
  Chicago, Illinois 60603 <BR>
  Age: 59</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  since April 2000. Term expires in 2006.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chief
  Administrative Officer, Chicago Public Schools since April 2003; Private
  investor November 2002&#150;April 2003; President and Chief Executive Officer,
  Board of Trade of the City of Chicago, Inc., March 2001&#150;November 2002;
  Retired executive 1999&#150;2001; Vice Chairman and Director, Bank One
  Corporation, 1998&#150;1999; Vice Chairman and Director, First Chicago NBD
  Corporation, and President, The First National Bank of Chicago, 1995&#150;1998;
  Vice Chairman, First Chicago Corporation and The First National Bank of
  Chicago, 1993&#150;1998 (Director, 1992&#150;1998; Executive Vice President, 1986&#150;1993)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>3</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director,
  UAL Corporation Cairline holding company), ISO New England Inc. (not for
  profit independent system operator of New England&#146;s electricity supply),
  Ariel Capital Management, Inc., Ark Investment Management and Wheels, Inc.
  (automobile fleet management)</FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR SIZE=1 WIDTH="20%" NOSHADE COLOR=GRAY ALIGN=LEFT>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>

<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=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 did not meet during 2005.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Member of
  the audit committee of the board of directors, which makes recommendations
  regarding the selection of the Fund&#146;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 2005.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Member of
  the nominating and governance committee of the board of directors, which
  selects nominees for election as directors, recommends individuals to be
  appointed by the board as Fund officers and members of board committees and
  makes recommendations regarding other Fund governance and board
  administration matters. The nominating and governance committee met twice
  during 2005. The committee will consider nominees recommended by
  shareholders. Shareholders wishing to recommend candidates to the committee
  should submit such recommendations to the Secretary of the Fund, 55 East
  Monroe Street, Suite 3600, Chicago, Illinois 60603. The Secretary of the Fund
  will forward the recommendations to the nominating and governance committee
  for consideration.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(4)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Member of
  the contracts committee of the board of directors, which makes
  recommendations regarding the Fund&#146;s contractual arrangements for investment
  management and administrative services, including the terms and conditions of
  such contracts. The contracts committee met twice during 2005.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(5)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Director
  elected by holders of preferred stock.</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="22%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="18%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="25%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="26%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name, Address <BR>
  and Age</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Position(s)
  Held <BR>
  With the Fund</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Term of
  Office and <BR>
  Length of Time Served</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Principal
  Occupation(s)<BR>
  During Past 5 Years</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2><B><I>Officers of the Fund</I></B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Nathan I.
  Partain <BR>
  55 East Monroe Street <BR>
  Chicago, Illinois 60603 <BR>
  Age: 49</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>President
  and Chief Executive Officer</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>President
  and Chief Executive Officer since February 2001 (Chief Investment Officer
  since January 1998, Executive Vice President April 1998&#150;February 2001, Senior
  Vice President January 1997&#150;April 1998, Assistant Secretary January
  1997&#150;February 2001).</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>President
  and Chief Executive Officer, the DTF and DUC Funds since February 2004;
  President, Duff &amp; Phelps Investment Management Co. since April 2005
  (Executive Vice President January 1997&#150; April 2005); Director of Utility
  Research, Phoenix Investment Partners, Ltd., 1989&#150;1996 (Director of Equity
  Research, 1993&#150;1996 and Director of Fixed Income Research, 1993); Director,
  Otter Tail Corporation (1993&#150;present)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>T. Brooks
  Beittel <BR>
  55 East Monroe Street <BR>
  Chicago, Illinois 60603 <BR>
  Age: 55</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Secretary
  and Senior Vice President</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Secretary
  and Senior Vice President since January 1995 (Treasurer January 1995&#150;
  September 2002).</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Senior Vice
  President, Duff &amp; Phelps Investment Management Co. since 1993 (Vice
  President 1987&#150;1993)</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Michael
  Schatt <BR>
  55 East Monroe Street <BR>
  Chicago, Illinois 60603 <BR>
  Age: 58</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Senior Vice
  President</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Senior Vice
  President since April 1998 (Vice President January 1997&#150;April 1998.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Senior Vice
  President, Duff &amp; Phelps Investment Management Co. since January 1997;
  Managing Director, Phoenix Investment Partners, Ltd., 1994&#150;1996</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Joseph C.
  Curry, Jr. <BR>
  Hilliard Lyons Center Louisville, Kentucky 40202 <BR>
  Age: 61</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Treasurer
  and Vice President</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Treasurer
  since September 2002; Vice President since April 1988.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Senior Vice
  President, J.J.B. Hilliard, W.L. Lyons, Inc. since 1994 (Vice President
  1982&#150;1994); Vice President, Hilliard Lyons Trust Company; President,
  Hilliard-Lyons Government Fund, Inc.; Vice President and Assistant Treasurer,
  Senbanc Fund</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>9</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="22%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="18%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="25%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="26%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name, Address <BR>
  and Age</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Position(s)
  Held <BR>
  With the Fund</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Term of
  Office and <BR>
  Length of Time Served</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Principal
  Occupation(s)<BR>
  During Past 5 Years</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="40%" NOSHADE COLOR=BLACK ALIGN=LEFT>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Joyce B.
  Riegel <BR>
  55 East Monroe Street <BR>
  Chicago, Illinois 60603 <BR>
  Age: 51</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chief
  Compliance Officer</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chief
  Compliance Officer since February 2004.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Chief
  Compliance Officer, the DTF and DUC Funds since August 2003; Senior Vice
  President and Chief Compliance Officer of Duff and Phelps Investment
  Management since 2004; Vice President and Compliance Officer, Duff &amp;
  Phelps Investment Management Co. 2002&#150;2004; Vice President and Chief
  Compliance Officer, Stein Roe Investment Counsel LLC January 2001&#150;August
  2002; Vice President and Compliance Officer, Stein Roe &amp; Farnham
  Incorporated July 1996&#150;December 2000</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Dianna P.
  Wengler <BR>
  Hilliard Lyons Center Louisville, Kentucky 40202 <BR>
  Age: 45</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Assistant
  Vice President and Assistant Secretary</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Assistant
  Vice President since April 2004; Assistant Secretary since April 1988.</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Vice
  President, J.J.B. Hilliard, W.L. Lyons, Inc. since 1990; Vice President,
  Hilliard-Lyons Government Fund, Inc.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>10</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>



<P><FONT SIZE=3> <BR>
</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>The
following table provides certain information relating to the equity securities
beneficially owned, as of December 31, 2005, 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.</font><BR>
<FONT SIZE=3> </FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="11%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="24%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="9%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="22%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="8%" VALIGN=TOP>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="23%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name of Director</B></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Dollar
  Range of Equity Securities</B><FONT SIZE=1><BR>
  </FONT><FONT SIZE=1><B>in
  the Fund</B></FONT></FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Aggregate
  Dollar Range of Equity<BR>
  Securities in All Funds Overseen<BR>
  or to be Overseen by Director or<BR>
  Nominee in Family of Investment<BR>
  Companies</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2><B><I>Independent Directors</I></B></FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Stewart E.
  Conner</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$50,001-$100,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$50,001-$100,000</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Connie K.
  Duckworth</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Robert J.
  Genetski</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Francis E.
  Jeffries</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Nancy
  Lampton</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Christian H.
  Poindexter</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Carl F.
  Pollard</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>over $100,000</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>David J.
  Vitale</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>$10,001-$50,000</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>$10,001-$50,000</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=3> </font><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>As of
December 31, 2005, 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.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December 31, 2005, the officers and directors of the Fund owned in the
aggregate less than 1% of the Fund&#146;s outstanding common stock and none of the
Fund&#146;s outstanding preferred stock.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table shows the compensation paid by the Fund to the Fund&#146;s current
directors during 2005:</FONT><BR><FONT SIZE=3> </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>COMPENSATION TABLE </B>(1)(2)</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="11%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="55%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name of Director</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Aggregate<BR>
  Compensation<BR>
  from the</B><FONT   SIZE=1><B><BR>
  Fund</B></FONT></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Total<BR>
  Compensation from<BR>
  the Fund and the</B><FONT   SIZE=1><B><BR>
  Fund Complex (2)</B></FONT></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2><B><I>Independent Directors</I></B></FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Stewart E.
  Conner</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>42,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>42,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Connie K.
  Duckworth</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>45,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>45,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Robert J.
  Genetski</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>42,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>42,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Francis E.
  Jeffries</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>78,393</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>197,393</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Nancy
  Lampton</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>50,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>76,901</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Christian H.
  Poindexter</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>45,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>45,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Carl F.
  Pollard</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>47,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>47,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>David J.
  Vitale</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>47,000</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>70,901</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<BR>
<HR NOSHADE WIDTH="120" SIZE=1 ALIGN=LEFT>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Each
  director not affiliated with the Adviser receives an annual fee of $25,000
  (and an additional $5,000 if the director serves as chairman of a committee
  of the board of directors) plus an attendance fee of $2,000 for each meeting
  of the board of directors and $1,500 for each meeting of a committee of the
  board of directors attended in person or by telephone. The chairman of the
  board of directors receives an additional fee of $50,000 annually. 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.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>The Fund
  Complex includes all funds that are advised by the Adviser or other
  affiliates of Phoenix Investment Partners, Ltd. Mr. Jeffries serves as a
  director or trustee of 53 other funds in the Fund Complex, and each of Ms.
  Lampton and Mr. Vitale serves as a director of two other funds in the Fund
  Complex.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT SIZE=2>11</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2><B>Portfolio Managers</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There
may be certain inherent conflicts of interest that arise in connection with the
portfolio managers&#146; management of the Fund&#146;s investments and the investments of
any other accounts they manage. Such conflicts could include aggregation of
orders for all accounts managed by a particular portfolio manager, the
allocation of purchases across all such accounts, the allocation of IPOs and
any soft dollar arrangements that the Adviser may have in place that could
benefit the Fund and/or such other accounts. The Adviser has adopted policies
and procedures designed to address any such conflicts of interest to ensure
that all management time, resources and investment opportunities are allocated
equitably. There have been no material compliance issues with respect to any of
these policies and procedures during the Fund&#146;s most recent fiscal year.</FONT></P>

<P><FONT SIZE=3> </FONT><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>The
following table provides information as of December 31, 2005 regarding the
other accounts besides the Fund that are managed by the portfolio managers of
the Fund identified in the Fund&#146;s prospectus. As noted in the table, portfolio
managers of the Fund may also manage or be members of management teams for
other mutual funds within the Phoenix fund complex or other similar accounts.
As of December 31, 2005, the Fund&#146;s portfolio managers did not manage any
accounts with respect to which the advisory fee is based on the performance of
the account, nor do they manage any hedge funds.</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="12%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="2%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="10%" VALIGN=BOTTOM>
<P ALIGN=CENTER>&nbsp;</P>
</TD>
<TD WIDTH="3%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="6%" VALIGN=BOTTOM>
<P ALIGN=RIGHT>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
<TD WIDTH="1%" VALIGN=BOTTOM>
<P>&nbsp;</P>
</TD>
</TR>

<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="7" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Registered Investment<BR>
  Companies (1)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="7" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Other Pooled Investment<BR>
  Vehicles (2)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="7" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Other Accounts (3)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="7" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="7" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="7" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=1><B>Name of<BR>
  Portfolio Manager</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Number of<BR>Accounts</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Total
  Assets<BR>(in millions)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Number of<BR>Accounts</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Total
  Assets<BR>(in millions)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Number of<BR>Accounts</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Total
  Assets<BR>(in millions)</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="4" VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Nathan I. Partain</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>14,7</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>T. Brooks Beittel</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>2</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>495.6</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Michael Schatt</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>2</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>1,012.6</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>24.7</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>10&nbsp;&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>234.3</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Deborah A. Jansen</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>14.7</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Connie M. Luecke</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>14.7</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=2>Daniel J. Petrisko</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>480.9</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=2>8</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=2>1,460.5</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Randle L. Smith</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>1</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>$</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>14.7</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>0</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P ALIGN=RIGHT><FONT SIZE=2>&#151;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD COLSPAN="2" VALIGN=BOTTOM>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=RIGHT><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
</TABLE>
<BR>
<HR NOSHADE WIDTH="120" SIZE=1 ALIGN=LEFT>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="95%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(1)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Registered
  Investment Companies include all open and closed-end mutual funds. For
  Registered Investment Companies, assets represent net assets of all open-end
  investment companies and gross assets of all closed-end investment companies.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(2)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Other Pooled
  Investment Vehicles include, but are not limited to, securities of issuers
  exempt from registration under Section 3(c) of the 1940 Act, such as private
  placements and hedge funds.</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(3)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Other
  Accounts include, but are not limited to, individual managed accounts,
  separate accounts, institutional accounts, pension funds and collateralized
  bond obligations.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=3> </FONT><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>The
following is a description of the compensation structure, as of December 31,
2005, of the Fund&#146;s portfolio managers identified in the Fund&#146;s prospectus. The
Fund&#146;s portfolio managers receive a competitive base salary, an incentive bonus
opportunity and a benefits package.</FONT><BR>
<FONT SIZE=3> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
portfolio manager is paid a fixed base salary, which is determined by Phoenix
Investment Partners and is designed to be competitive in light of the
individual&#146;s experience and responsibilities. The management of Phoenix
Investment Partners uses compensation survey results of investment industry
compensation conducted by an independent third party in evaluating competitive
market compensation for its investment management professionals.</FONT></P>

<P><FONT SIZE=3> </FONT><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>The
incentive bonus package for portfolio managers is based upon how well the
individual manager meets or exceeds assigned goals and a subjective assessment
of contribution to the team effort. Their incentive bonus also reflects a
performance component. The performance component is based in part on achieving
and/or exceeding income targets underlying the Fund&#146;s ability to pay common
stock dividends, and in part on performance relative to a composite of the
S&amp;P Utilities Index and the Lehman Brothers Utility Bond Index, reflecting
the stock and bond ratio of the Fund. The performance component is further
adjusted to reward investment personnel for managing within the stated
framework and for not taking unnecessary risks. This ensures that investment
personnel will remain focused on managing and acquiring securities that
correspond to the Fund&#146;s mandate and risk profile. It also avoids the
temptation for portfolio managers to take on more risk and unnecessary exposure
to chase performance for personal gain.</FONT><BR>
<FONT SIZE=3> </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>12</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incentive
bonus compensation of the Fund&#146;s portfolio managers is currently comprised of
two components: 75% of the incentive bonus is based on the pre-tax performance
of the Fund, as measured by earnings per share and total return over a one-year
period, and 25% of the incentive bonus is based in the overall pre-tax
profitability and investment return of PNX, the Adviser&#146;s parent company, over
a one-year period. For the year 2005, the Fund&#146;s portfolio managers have been
guaranteed that they will receive no less than 80% of the incentive bonus
available under the above formula. The portfolio managers&#146; incentive bonus
compensation is not based on the value of assets held in the Fund&#146;s portfolio,
except to the extent that the level of assets in the Fund&#146;s portfolio affects
the advisory fee received by the Adviser, and thus indirectly the profitability
of PNX.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Finally,
portfolio managers may also receive PNX stock options and/or be granted PNX
restricted stock at the direction of the PNX board of directors. To date no
portfolio manager of the Fund has received awards under the PNX restricted
stock units long-term incentive plan.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Highly
compensated individuals are eligible to participate in a long-term incentive
plan to defer their compensation and realize tax benefits. Compensation under
the long-term incentive plan is payable in restricted stock units of PNX, which
vest over three years.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Portfolio
managers are also eligible to participate in broad-based plans offered
generally to the firm&#146;s employees, including broad-based retirement, 401(k),
health and other employee benefit plans.</FONT></P>

<P><FONT SIZE=3> </FONT><BR> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT SIZE=2>The following table sets forth the dollar range of equity securities in the
Fund beneficially owned, as of December 31, 2005, by each of the portfolio
managers identified in the Fund&#146;s prospectus.</FONT><FONT SIZE=3><BR>
</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="62%">
<TR style="font-size:1px">
<TD WIDTH="28%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="37%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="33%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM NOWRAP>
<P><FONT SIZE=1><B>Name of Portfolio Manager</B></FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1><B>Dollar
  Range of<BR>
  Equity Securities in the Fund</B></FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
</TD>
<TD VALIGN=BOTTOM>
<P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=BOTTOM>
<HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>T. Brooks
  Beittel</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>None</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Deborah A.
  Jansen</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>None</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Connie M. Luecke</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>$1-$10,000</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Nathan I.
  Partain</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$100,000-$500,000</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Daniel J.
  Petrisko</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>None</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=2>Michael
  Schatt</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P ALIGN=CENTER><FONT SIZE=2>$10,001-$50,000</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=2>Randle L.
  Smith</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP BGCOLOR="#E6E6E6">
<P ALIGN=CENTER><FONT SIZE=2>None</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2><B>Proxy Voting Policies</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Fund has adopted proxy voting policies and procedures. The following is a
summary description of those policies and procedures, the full text of which is
available at the Fund&#146;s website at http://www.dnpselectincome.com.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
to the right of the board of directors to give the Adviser written instructions
as to the voting or non-voting of proxies on any matter presenting an actual or
perceived conflict of interest as described below, the Fund has delegated the
voting of proxies with respect to securities owned by it to the Adviser. The
Adviser may delegate its proxy voting responsibilities to a proxy committee
established from time to time by the Adviser and may engage one or more
qualified, independent organizations to vote proxies on behalf of the Fund,
subject in each case to compliance with these policies and procedures.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It
is the intention of the Fund to exercise stock ownership rights in portfolio
holdings in a manner that is reasonably anticipated to further the best
economic interests of shareholders of the Fund. Accordingly, the Fund or its
delegate(s) endeavors to analyze and vote all proxies that are considered
likely to have financial implications, and, where appropriate, to participate
in corporate governance, shareholder proposals, management communications and
legal proceedings.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Adviser will generally vote in favor of management recommendations on routine
matters. The Adviser will analyze and vote on non-routine matters, including
the adoption of anti-takeover measures, proxy contests for control, contested
elections of directors, corporate governance matters and executive compensation
matters, on a case-by-case basis, taking into account factors appropriate to
each such matter. The Adviser will generally vote against shareholder proposals
on social issues, except where the Adviser determines that a different position
would be in the clear economic interests of the Fund and its shareholders. The
Adviser may abstain from voting</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>13</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2>when it
concludes that the effect on shareholders&#146; economic interests or the value of
the portfolio holding is indeterminable or insignificant.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
exercising its voting discretion, the Adviser will seek to avoid any actual or
perceived conflicts of interest between the interests of Fund shareholders, on
the one hand, and those of the Adviser or any affiliated person of the Fund or
the Adviser, on the other hand. The Adviser will notify the board of directors
of the Fund promptly after becoming aware that any actual or potential conflict
of interest exists, indicating how the Adviser proposes to vote on the matter
and its reasons for doing so. The board of directors may decide to (i) vote
pursuant to the recommendation of the delegate, (ii) abstain from voting or
(iii) rely on the recommendations of an established, independent third party
with qualifications to vote proxies, such as Institutional Shareholder
Services. The Adviser may not waive any conflict of interest or vote any
conflicted proxies without the prior written approval of the board of directors
or its duly authorized representative.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information
on how proxies relating to the Fund&#146;s voting securities were voted (if any) by
the Adviser during the most recent 12-month period ended June 30th is
available, without charge, upon request, by calling (800) 699-1236 and on the
website of the SEC at http://www.sec.gov.</FONT></P>

<P><FONT SIZE=2><B>Code of Ethics</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
of the Fund and the Adviser has adopted a Code of Ethics under Rule 17j-1 of
the Investment Company 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&#146;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 (202) 551-8090. The codes are also available
at the EDGAR Database on the SEC&#146;s Internet site at http://www.sec.gov and on
the Fund&#146;s Internet site at http://www.dnpselectincome.com. Copies of the codes
may also be obtained, after paying a duplicating fee, by electronic request at
the following email address: publicinfo@sec.gov, or by writing the SEC&#146;s Public
Reference Section, Washington, D.C. 20549-0102. The SEC file number for
documents filed by the Fund under the Investment Company Act is 811-4915.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2><B>PORTFOLIO
TRANSACTIONS AND BROKERAGE</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decisions
concerning the execution of portfolio security transactions, including the
selection of the market and the executing firm, are made by the Adviser. The
Adviser is also responsible for the execution of transactions for all other
accounts managed by it. The Adviser places the portfolio security transactions
of the Fund and of all other accounts managed by it for execution with many
firms. The Adviser uses its best efforts to obtain execution of portfolio
security transactions at prices which are advantageous to the Fund and at
reasonably competitive spreads or (when a disclosed commission is being
charged) at reasonably competitive commission rates. In seeking such execution,
the Adviser will use its best judgment in evaluating the terms of a
transaction, and will give consideration to various relevant factors, including
without limitation the full range and quality of the executing firm&#146;s services,
the value of the brokerage and research services provided, the responsiveness
of the firm to the Adviser, the size and type of the transaction, the nature
and character of the market for the security, the confidentiality, speed and
certainty of effective execution required for the transaction, the general
execution and operational capabilities of the executing firm, the reputation,
reliability, experience and financial condition of the firm, the value and
quality of the services rendered by the firm in this and other transactions,
and the reasonableness of the spread or commission, if any.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Transactions
on stock exchanges and other agency transactions involve the payment of
negotiated brokerage commissions. Such commissions vary among different
broker-dealer firms, and a particular broker-dealer may charge different
commissions according to such factors as the difficulty and size of the
transaction and the volume of business done with such broker-dealer.
Transactions in foreign securities often involve the payment of brokerage
commissions, which may be higher than those in the United States. There is
generally no stated </FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>14</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2>commission in the
case of securities traded in the over-the-counter markets, but the price paid
or received usually includes an undisclosed dealer markup or markdown. In an
underwritten offering the price paid often includes a disclosed fixed
commission or discount retained by the underwriter or dealer.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fixed-income
obligations which may be purchased and sold by the Fund are generally traded in
the over-the-counter market on a net basis (<I>i.e.</I>,
without commission) through broker-dealers or banks acting for their own account
rather than as brokers, or otherwise involve transactions directly with the
issuers of such obligations. The Fund may also purchase fixed-income and other
securities from underwriters, the cost of which may include undisclosed fees
and concessions to the underwriters.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
spreads or commissions paid on portfolio security transactions will, in the
judgment of the Adviser, be reasonable in relation to the value of the services
provided, commissions exceeding those which another firm might charge may be
paid to broker-dealers who were selected to execute transactions on behalf of
the Adviser&#146;s clients in part for providing brokerage and research services to
the Adviser.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 &#147;brokerage and research services&#148; (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&#146;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 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.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;s brokerage transactions to a broker or brokers
because of research services.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Securities
considered as investments for the Fund may also be appropriate for other
investment accounts managed by the Adviser or its affiliates. Whenever
decisions are made to buy or sell securities by the Fund and one or more of
such other accounts simultaneously, the Adviser will allocate the security
transactions (including &#147;hot&#148; issues) in a manner which it believes to be
equitable under the circumstances. As a result of such allocations, there may
be instances where the Fund will not participate in a transaction that is allocated
among other accounts. Additionally, trades executed by different firms,
including the Adviser, will not be aggregated and allocated as to price; thus,
there may be instances where the Fund does not pay or receive the same price as
other investment accounts managed by the Adviser. While these aggregation and
allocation policies could have a detrimental effect on the price or amount of
the securities available to the Fund from time to time, it is the opinion of
the directors of the Fund that the benefits received from the Adviser&#146;s
organization outweigh any disadvantage that may arise from exposure to
simultaneous transactions.</FONT></P>

<P><FONT SIZE=3> </FONT><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>The
Fund paid brokerage commissions in the aggregate amount of $799,719, $1,667,497
and $8,550,524 during 2005, 2004 and 2003, respectively, not including the
gross underwriting spread on securities purchased in underwritten public
offerings. The Fund did not pay any brokerage commissions during 2005, 2004 or
2003 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. The Fund did
not pay brokerage commissions to the Administrator during 2005, 2004 or 2003,
but has done so in the past and may do so again in the future.</FONT><FONT SIZE=3><BR>
</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>15</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>ADDITIONAL
INFORMATION CONCERNING THE AUCTIONS FOR APS</B></FONT></P>

<P><FONT SIZE=2><B>General Securities Depository</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Depository Trust Company (&#147;DTC&#148;) will act as the Securities Depository with
respect to each series of APS. One certificate for all of the shares of each
series will be registered in the name of Cede &amp; Co., as nominee of the Securities
Depository. Such certificate will bear a legend to the effect that such
certificate is issued subject to the provisions restricting transfers of shares
of APS contained in the Articles Supplementary. The Fund will also issue stop
transfer instructions to the transfer agent for APS. Prior to the commencement
of the right of holders of APS to elect a majority of the Fund&#146;s directors, as
described under &#147;Description of APS&#151;Voting Rights&#148; in the Prospectus, Cede &amp; Co. will
be the holder of record of each series of APS and owners of such shares will
not be entitled to receive certificates representing their ownership interest
in such shares.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DTC,
a New York chartered limited purpose trust company, performs services for its
participants, some of whom (and/or their representatives) own DTC. DTC
maintains lists of its participants and will maintain the positions (ownership
interests) held by each such participant in shares of APS, whether for its own
account or as a nominee for another person.</FONT></P>

<P><FONT SIZE=2><B>Concerning the Auction Agent</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
auction agent will act as agent for the Fund in connection with Auctions. In
the absence of bad faith or negligence on its part, the auction agent will not
be liable for any action taken, suffered, or omitted or for any error of
judgment made by it in the performance of its duties under the auction agency
agreement between the Fund and the auction agent and will not be liable for any
error of judgment made in good faith unless the auction agent was negligent in
ascertaining the pertinent facts.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
auction agent may rely upon, as evidence of the identities of the holders of
shares of APS, the auction agent&#146;s registry of holders, the results of auctions
and notices from any Broker-Dealer (or other person, if permitted by the Fund)
with respect to transfers described under &#147;The Auction&#151;Secondary Market Trading
and Transfers of APS&#148; in the Prospectus and notices from the Fund. The auction
agent is not required to accept any such notice for an auction unless it is
received by the auction agent by 3:00 p.m., New York City time, on the business
day preceding such auction.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
auction agent may terminate its auction agency agreement with the Fund upon
notice to the Fund on a date no earlier than 45 days after such notice. If the
auction agent should resign, the Fund will use its best efforts to enter into
an agreement with a successor auction agent containing substantially the same
terms and conditions as the auction agency agreement. The Fund may remove the
auction agent provided that prior to such removal the Fund shall have entered
into such an agreement with a successor auction agent.</FONT></P>

<P><FONT SIZE=2><B>Broker-Dealers</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
auction agent after each auction for the shares of APS will pay to each
Broker-Dealer, from funds provided by the Fund, a service charge at the annual
rate of 1/4 of 1% in the case of any
auction immediately preceding a dividend period of less than one year, or a
percentage agreed to by the Fund and the Broker-Dealers in the case of any
auction immediately preceding a dividend period of one year or longer, of the
purchase price of the shares of APS placed by such Broker-Dealer at such
auction. For the purposes of the preceding sentence, shares of APS will be
placed by a Broker-Dealer if such shares were (a) the subject of hold orders
deemed to have been submitted to the auction agent by the Broker-Dealer and
were acquired by such Broker-Dealer for its own account or were acquired by
such Broker-Dealer for its customers who are beneficial owners or (b) the
subject of an order submitted by such Broker-Dealer that is (i) a submitted bid
of an existing holder that resulted in the existing holder continuing to hold
such shares as a result of the auction or (ii) a submitted bid of a potential
holder that resulted in the potential holder purchasing such shares as a result
of the auction or (iii) a valid hold order.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Fund may request the auction agent to terminate one or more Broker-Dealer
agreements at any time, provided that at least one Broker-Dealer agreement is
in effect after such termination.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>16</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>

<P><FONT SIZE=2><B>Orders by Existing Holders and Potential
Holders</B></FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
or prior to the submission deadline on each auction date for shares of a series
of APS:</FONT></P>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
<TR style="font-size:1px">
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="5%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
<TD WIDTH="85%" VALIGN=TOP>
<P>&nbsp;</P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(a)</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>each
  beneficial owner of shares of such series may submit to its Broker-Dealer by
  telephone or otherwise a:</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(i)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#147;Hold
  Order&#148;: indicating the number of outstanding shares, if any, of such series
  that such beneficial owner desires to continue to hold without regard to the
  Applicable Rate for such shares of such series for the next succeeding
  Dividend Period of such shares;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(ii)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#147;Bid&#148;:
  indicating the number of outstanding shares, if any, of such series that such
  beneficial owner offers to sell if the Applicable Rate for such shares of
  such series for the next succeeding Dividend Period shall be less than the
  rate per annum specified by such beneficial owner in such Bid; and/or</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(iii)</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>&#147;Sell
  Order&#148;: indicating the number of outstanding shares, if any, of such that
  such beneficial owner offers to sell without regard to the Applicable Rate
  for such shares of such series for the next succeeding Dividend Period; and</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=3> </FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
</TR>
<TR>
<TD VALIGN=TOP>
<P><FONT SIZE=1>&nbsp;</FONT></P>
</TD>
<TD VALIGN=TOP>
<P><FONT SIZE=2>(b)</FONT></P>
</TD>
<TD COLSPAN="2" VALIGN=TOP>
<P><FONT SIZE=2>Broker-Dealers
  shall contact customers who are Potential Beneficial Owners by telephone or
  otherwise to determine whether such customers desire to submit Bids, in which
  they will indicate the number of shares, if any, of such series that they
  offer to purchase if the Applicable Rate for shares of such series for the
  next succeeding Dividend Period is not less than the rate per annum specified
  in such Bids.</FONT></P>
</TD>
</TR>
</TABLE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
communication to a Broker-Dealer of the foregoing information is herein
referred to as an &#147;Order&#148; and collectively as &#147;Orders.&#148; A Beneficial Owner or a
Potential Beneficial Owner placing an Order with its Broker-Dealer is herein
referred to as a &#147;Bidder&#148; and collectively as &#147;Bidders.&#148; The submission by a
Broker-Dealer of an Order to the Auction Agent shall likewise be referred to
herein as an &#147;Order&#148; and collectively as &#147;Orders,&#148; and an Existing Holder or
Potential Holder who places an Order with the Auction Agent or on whose behalf
an Order is placed with the Auction Agent shall likewise be referred to herein
as a &#147;Bidder&#148; and collectively as &#147;Bidders.&#148;</FONT></P>

<P><FONT SIZE=3> </FONT><BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT SIZE=2>A
Beneficial Owner may submit different types of Orders to its Broker-Dealer with
respect to shares of a series of APS then held by such Beneficial Owner. A Bid
placed by a Beneficial Owner specifying a rate higher than the Applicable Rate
determined in the Auction shall constitute an irrevocable offer to sell the
shares subject thereto. A Beneficial Owner that submits a Bid to its
Broker-Dealer having a rate higher than the Maximum Applicable Rate on the
Auction Date thereof will be treated as having submitted a Sell Order to its
Broker-Dealer. A Beneficial Owner that fails to submit to its Broker-Dealer
prior to the Submission Deadline for shares of such series an Order or Orders
covering all the Outstanding shares of such series held by such Beneficial
Owner will be deemed to have submitted a Hold Order to its Broker-Dealer
covering the number of Outstanding shares of such series held by such Beneficial
Owner and not subject to Orders submitted to its Broker-Dealer; provided,
however, that if a Beneficial Owner fails to submit to its Broker-Dealer prior
to the Submission Deadline for shares of a series of APS an Order or Orders
covering all of the Outstanding shares of such series held by such Beneficial
Owner for an Auction relating to a Special Dividend Period consisting of more
than 28 days, such Beneficial Owner will be deemed to have submitted a Sell
Order to its Broker-Dealer covering the number of Outstanding shares of such
series held by such Beneficial Owner and not subject to Orders submitted to its
Broker-Dealer. A Sell Order shall constitute an irrevocable offer to sell the
shares of such series of APS subject thereto at a price per share equal to
$25,000. A Beneficial Owner of shares of a series of APS that offers to become
the Beneficial Owner of additional shares of such series of APS is, for
purposes of such offer, a Potential Beneficial Owner.</FONT><BR>
<FONT SIZE=3> </FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
Potential Beneficial Owner of shares of a series of APS may submit to its
Broker-Dealer Bids in which it offers to purchase shares of a series if the
Applicable Rate for the next Dividend Period is not less than the rate
specified in such Bid. A Bid placed by a Potential Beneficial Owner specifying
a rate not higher than the Maximum Applicable Rate shall constitute an
irrevocable offer to purchase the number of shares of a series of APS specified
in such Bid if the rate determined in the Auction is equal to or greater than
the rate specified in such Bid.</FONT></P>

<P ALIGN=CENTER><FONT SIZE=2>17</FONT></P>

<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4><P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P><PAGE>


<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
described more fully below under &#147;&#151;Submission of Orders by Broker-Dealers to
Auction Agent,&#148; the Broker-Dealers will submit the Orders of their respective
customers who are Beneficial Owners and Potential Beneficial Owners to the
Auction Agent, designating themselves (unless otherwise permitted by the Fund)
as Existing Holders in respect of shares of such series of APS subject to
Orders submitted or deemed submitted to them by Beneficial Owners and as
Potential Holders in respect of shares of such series subject to Orders
submitted to them by Potential Beneficial Owners. However, neither the Fund nor
the Auction Agent will be responsible for a Broker-Dealer&#146;s failure to comply
with the foregoing. Any Order placed with the Auction Agent by a Broker-Dealer
as or on behalf of an Existing Holder or a Potential Holder will be treated in
the same manner as an Order placed with a Broker-Dealer by a Beneficial Owner
or a Potential Beneficial Owner, as described in the preceding paragraph.
Similarly, any failure by a Broker-Dealer to submit to the Auction Agent an
Order in respect of any shares of a series of APS held by it or its customers
who are Beneficial Owners will be treated in the same manner as a Beneficial
Owner&#146;s failure to submit to its Broker-Dealer an Order in respect of shares of
a series of APS held by it, as described in the second preceding paragraph. For
information concerning the priority given to different types of Orders placed
by Existing Holders, see &#147;&#151;Submission of Orders by Broker-Dealers to Auction
Agent&#148; below.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Fund nor an affiliate may submit an Order in any Auction, except that any
Broker-Dealer that is an affiliate of the Fund may submit Orders in an Auction,
but only if such Orders are not for its own account.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Auction Procedures include a pro rata allocation of shares for purchase and
sale, which may result in an Existing Holder continuing to hold or selling, or
a Potential Holder purchasing, a number of shares of a series of APS that is
fewer than the number of shares of such series specified in its Order. See
&#147;&#151;Acceptance and Rejection of Submitted Bids and Submitted Sell Orders and
Allocation of Shares&#148; below. To the extent the allocation procedures have that
result, Broker-Dealers that have designated themselves as Existing Holders or
Potential Holders in respect of customer Orders will be required to make
appropriate pro rata allocations among their respective customers. Each
purchase or sale shall be made for settlement on the Business Day next
succeeding the Auction Date at a price per share equal to $25,000. See
&#147;&#151;Notification of Results; Settlement&#148; below.</FONT></P>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
described above, any Bid specifying a rate higher than the Maximum Applicable
Rate will (i) be treated as a Sell Order if submitted by a Beneficial Owner or
an Existing Holder and (ii) not be accepted if submitted by a Potential
Beneficial Owner or a Potential Holder. Accordingly, the Auction Procedures
establish the Maximum Applicable Rate as a maximum rate per annum that can
result from an Auction. See &#147;&#151;Determination of Sufficient Clearing Bids,
Winning Bid Rate and Applicable Rate&#148; and &#147;&#151;Acceptance and Rejection of
Submitted Bids and Submitted Sell Orders and Allocation of Shares&#148; below.</FONT></P>

<P><FONT SIZE=2><B>Submission of Orders by Broker-Dealers to
Auction Agent</B></FONT></P>

<P> </P>

</font>
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to 1:00 p.m., New York City time, on each Auction Date, or such other time on the Auction Date specified by the Auction Agent (<i>i.e.</i>, the Submission Deadline), each Broker-Dealer will submit to the Auction Agent in writing all Orders obtained by it for the Auction to be conducted on such Auction Date, designating itself (unless otherwise permitted by the Fund) as the Existing Holder or Potential Holder, as the case may be, in respect of the shares of a series of APS subject to such Orders. Any Order submitted by a Beneficial Owner or a Potential Beneficial Owner to its Broker-Dealer, or by a Broker-Dealer to the Auction Agent, prior to the Submission Deadline on any Auction Date, shall be irrevocable.</font></p>
<p> </p>
<FONT SIZE=3>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  any rate specified in any Bid contains more than three figures to the right of
  the decimal point, the Auction Agent will round such rate to the next highest
one-thousandth (0.001) of 1%.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  one or more Orders of an Existing Holder is submitted to the Auction Agent
  covering in the aggregate more than the number of Outstanding APS of a series
  subject to an Auction held by such Existing Holder, such Orders will be
considered valid in the following order of priority:</FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="90%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(a)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>all Hold
    Orders for shares of such series will be considered valid, but only up to and
    including in the aggregate the number of Outstanding shares of such series
    held by such Existing Holder, and, if the number of shares of such series
    subject to such Hold Orders exceeds the number of Outstanding shares of such
    series held by such Existing Holder, the number of shares subject to each
    such Hold Order shall be reduced pro rata to cover the number of Outstanding
    shares held by such Existing Holder;</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>18</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(b)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(i)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>any Bid for
    shares of such series will be considered valid up to and including the excess
    of the number of shares of Outstanding shares of such series held by such
    Existing Holder over the number of shares of such series subject to any Hold
    Orders referred to in clause (a) above;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(ii)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>subject to
    subclause (i), if more than one Bid of an Existing Holder for shares of such
    series is submitted to the Auction Agent with the same rate and the number of
    Outstanding shares of such series subject to such Bids is greater than such
    excess, such Bids will be considered valid up to and including the amount of
    such excess, and the number of shares of such series subject to each Bid with
    the same rate will be reduced pro rata to cover the number of shares of such
    series equal to such excess;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(iii)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>subject to
    subclauses (i) and (ii), if more than one Bid of an Existing Holder for
    shares of such series is submitted to the Auction Agent with different rates,
    such Bids shall be considered valid in the ascending order of their respective
    rates up to and including the amount of such excess; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(iv)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>in any such
    event, the number, if any, of such Outstanding shares of such series subject
    to any portion of Bids considered not valid in whole or in part under this
    clause (b) will be treated as the subject of a Bid for shares of such series
    by or on behalf of a Potential Holder at the rate specified therein; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(c)</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>all Sell
    Orders for shares of such series will be considered valid up to and including
    the excess of the number of Outstanding shares of such series held by such
    Existing Holder over the sum of shares of such series subject to valid Hold
    Orders referred to in clause (a) above and valid Bids referred to in clause
    (b) above.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  more than one Bid of a Potential Holder for shares of a series of APS is
  submitted to the Auction Agent by or on behalf of any Potential Holder, each
  such Bid submitted will be a separate Bid with the rate and number of shares of
such series therein specified.</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2><B>Determination of Sufficient Clearing Bids,
Winning Bid Rate and Applicable Dividend Rate</B></FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
  earlier than the Submission Deadline on each Auction Date for shares of a
  series of APS, the Auction Agent will assemble all valid Orders submitted or
  deemed submitted to it by the Broker-Dealers (each such Hold Order, Bid or Sell
  Order as submitted or deemed submitted by a Broker-Dealer being herein referred
  to as a &#147;Submitted Hold Order,&#148; a &#147;Submitted Bid&#148; or a &#147;Submitted Sell Order,&#148;
  as the case may be, or as a &#147;Submitted Order&#148; and collectively as &#147;Submitted
  Hold Orders,&#148; &#147;Submitted Bids&#148; or &#147;Submitted Sell Orders,&#148; as the case may be,
  or as &#147;Submitted Orders&#148;) and will determine the excess of the number of
  Outstanding shares of such series over the number of Outstanding shares of such
  series subject to Submitted Hold Orders (such excess being herein referred to
  as the &#147;Available APS&#148;) and whether Sufficient Clearing Bids have been made in
  the Auction. &#147;Sufficient Clearing Bids&#148; will have been made if the number of
  Outstanding shares of such series that are the subject of Submitted Bids of
  Potential Holders specifying rates not higher than the Maximum Dividend Rate
  for all Dividend Periods equals or exceeds the number of outstanding shares of
  such series that are the subject of Submitted Sell Orders (including the number
  of shares of such series subject to Bids of Existing Holders specifying rates
higher than the Maximum Dividend Rate).</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  Sufficient Clearing Bids for shares of a series of APS have been made, the Auction
  Agent will determine the lowest rate specified in such Submitted Bids (the
&#147;Winning Bid Rate&#148;) for shares of such series which, taking into account the
  rates in the Submitted Bids of Existing Holders, would result in Existing
  Holders continuing to hold an aggregate number of Outstanding shares of such
  series which, when added to the number of outstanding shares of such series to
  be purchased by Potential Holders, based on the rates in their Submitted Bids,
  would equal not less than the Available APS. In such event, the Winning Bid
  Rate will be the Applicable Dividend Rate for the next Dividend Period for all
shares of such series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  Sufficient Clearing Bids have not been made (other than because all of the
  outstanding shares of a series of APS are subject to Submitted Hold Orders),
  the Applicable Dividend Rate for the next Dividend Period for all shares of
  such series will be equal to the Maximum Dividend Rate. If Sufficient Clearing
  Bids have not been made, Beneficial Owners that have submitted or that are
  deemed to have submitted Sell Orders may not be able to sell in the Auction all
  shares of such series subject to such Sell Orders but will continue to own
  shares of such</FONT>

<DIV><FONT SIZE=3> </FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2>19</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>series for the
  next Dividend Period. See &#147;&#151;Acceptance and Rejection of Submitted Bids and
Submitted Sell Orders and Allocation of Shares&#148; below.</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  all of the outstanding shares of a series of APS are subject to Submitted Hold
  Orders, the Applicable Dividend Rate for all shares of such series for the next
succeeding Dividend Period shall be the All Hold Rate.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2><B>Acceptance and Rejection of Submitted Bids
and Submitted Sell Orders and Allocation of Shares</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
  on the determinations made under &#147;&#151;Determination of Sufficient Clearing Bids,
  Winning Bid Rate and Applicable Dividend Rate&#148; above and, subject to the
  discretion of the Auction Agent to round and allocate certain shares as
  described below, Submitted Bids and Submitted Sell Orders will be accepted or
  rejected in the order of priority set forth in the Auction Procedures, with the
  result that Existing Holders and Potential Holders of shares of a series of APS
  will sell, continue to hold and/or purchase such shares as set forth below.
  Existing Holders that submitted or were deemed to have submitted Hold Orders
  (or on whose behalf Hold Orders were submitted or deemed to have been
  submitted) will continue to hold the shares of such series subject to such Hold
Orders.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
Sufficient Clearing Bids for shares of a series of APS have been made:</FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="90%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(a)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each
    Existing Holder that placed or on whose behalf was placed a Submitted Sell
    Order or Submitted Bid specifying any rate higher than the Winning Bid Rate
    will sell the outstanding shares of such series subject to such Submitted Sell
    Order or Submitted Bid;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(b)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each
    Existing Holder that placed or on whose behalf was placed a Submitted Bid
    specifying a rate lower than the Winning Bid Rate will continue to hold the
    Outstanding shares of such series subject to such Submitted Bid;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(c)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each
    Potential Holder that placed or on whose behalf was placed a Submitted Bid
    specifying a rate lower than the Winning Bid Rate will purchase the number of
    outstanding shares of such series subject to such Submitted Bid;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(d)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each Existing
    Holder that placed or on whose behalf was placed a Submitted Bid specifying a
    rate equal to the Winning Bid Rate will continue to hold the shares of such
    series subject to such Submitted Bid, unless the number of Outstanding APS of
    such series subject to all such Submitted Bids is greater than the number of
    shares of APS (&#147;remaining shares&#148;) in excess of the Available APS over the
    number of shares of APS accounted for in clauses (b) and (c) above, in which
    event each Existing Holder with such a Submitted Bid will continue to hold
    shares of APS of such series subject to such Submitted Bid determined on a
    pro rata basis based on the number of Outstanding APS subject to all such
    Submitted Bids of such Existing Holders; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(e)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each
    Potential Holder that placed or on whose behalf was placed a Submitted Bid
    specifying a rate equal to the Winning Bid Rate for shares of such series
    will purchase any shares of Available APS not accounted for in clauses (b)
    through (d) above on a pro rata basis based on the Outstanding APS subject to
    all such Submitted Bids.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  Sufficient Clearing Bids for shares of a series of APS have not been made
  (unless this results because all Outstanding shares of such series are subject
to Submitted Hold Orders):</FONT></P>
<P><FONT SIZE=3> </FONT>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="90%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(a)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each
    Existing Holder that placed or on whose behalf was placed a Submitted Bid
    specifying a rate equal to or lower than the Maximum Dividend Rate for shares
    of such series will continue to hold the shares of APS subject to such
    Submitted Bid;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(b)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each
    Potential Holder that placed or on whose behalf was placed a Submitted Bid
    specifying a rate equal to or lower than the Maximum Dividend Rate for shares
    of such series will purchase the number of shares of APS subject to such
    Submitted Bid; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>(c)</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Each
    Existing Holder that placed or on whose behalf was placed a Submitted Bid
    specifying a rate higher than the Maximum Dividend Rate for shares of such
    series or a Submitted Sell Order will sell a number of shares of such series
    subject to such Submitted Bid or Submitted Sell Order determined on a pro
    rata basis based on the number of Outstanding shares of such series subject
    to all such Submitted Bids and Submitted Sell Orders.</FONT>
  </TD>
  </TR>
</TABLE>
<DIV><FONT SIZE=3> </FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2>20</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If,
  as a result of the pro rata allocation described in clauses (d) or (e) of the
  second preceding paragraph or clause (c) of the next preceding paragraph, any
  Existing Holder would be entitled or required to sell, or any Potential Holder
  would be entitled or required to purchase, a fraction of a share of APS of a
  series, the Auction Agent will, in such manner as, in its sole discretion, it
  will determine, round up or down to the nearest whole share the number of
  shares of APS of such series being sold or purchased on such Auction Date so
  that the number of shares of such series sold or purchased by each Existing
  Holder or Potential Holder will be whole shares of such series. If as a result
  of the pro rata allocation described in clause (e) of the second preceding
  paragraph, any Potential Holder would be entitled or required to purchase less
  than a whole share of a series of APS, the Auction Agent will, in such manner
  as, in its sole discretion, it will determine, allocate shares of such series
  for purchase among Potential Holders so that only whole shares of such series
  are purchased by any such Potential Holder, even if such allocation results in
one or more of such Potential Holders not purchasing shares of such series.</FONT></P>
<P><FONT SIZE=2><B>Notification of Results; Settlement</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Auction Agent will be required to advise each Broker-Dealer that submitted an
  Order of the Applicable Dividend Rate for the next Dividend Period and, if the
  Order was a Bid or Sell Order, whether such Bid or Sell Order was accepted or
  rejected, in whole or in part, by telephone by approximately 3:30 p.m., New
  York City time, on each Auction Date. Each Broker-Dealer that submitted an
  Order for the account of a customer will then be required to advise such
  customer of the Applicable Dividend Rate for the next Dividend Period and, if
  such Order was a Bid or a Sell Order, whether such Bid or Sell Order was
  accepted or rejected, in whole or in part, will be required to confirm
  purchases and sales with each customer purchasing or selling shares of such
  series as a result of the Auction and will be required to advise each customer
  purchasing or selling APS as a result of the Auction to give instructions to
its Agent Member of the Securities.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Securities Depository will pay the purchase price against delivery of such
  shares or will deliver such shares against payment therefor, as appropriate.
  The Auction Agent will be required to record each transfer of shares of a
  series of APS on the registry of Existing Holders to be maintained by the
Auction Agent.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
  accordance with the Securities Depository&#146;s normal procedures, on the Business
  Day after the Auction Date, the transactions described above will be executed
  through the Securities Depository and the accounts of the respective Agent
  Members at the Securities Depository will be debited and credited and shares
  delivered as necessary to effect the purchases and sales of shares of a series
  of APS as determined in the Auction. Purchasers will make payment through their
  Agent Members in same-day funds to the Securities Depository against delivery
  through their Agent Members; the Securities Depository will make payment in
  accordance with its normal procedures, which provide for payment against
delivery by their Agent Members in same-day funds.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  any Existing Holder selling shares of a series of APS in an Auction fails to
  deliver such shares, the Broker-Dealer of any person that was to have purchased
  such shares in such Auction may deliver to such person a number of whole shares
  of such series that is less than the number of shares of such series that
  otherwise was to be purchased by such person. In such event, the number of
  shares of such series to be so delivered shall be determined by such
  Broker-Dealer. Delivery of such lesser number of shares of such series shall
constitute good delivery.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2><B>REPURCHASE OF
COMMON STOCK</B></FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund is a closed-end management investment company and as such its shareholders
  will not have the right to cause the Fund to redeem their shares of common
  stock. Instead, the Fund&#146;s common stock will trade in the open market at a
  price that will be a function of several factors, including dividend levels
  (which are in turn affected by expenses), net asset value, call protection,
  dividend stability, relative demand for and supply of such shares in the
  market, general market and economic conditions and other factors. Because
  shares of a closed-end investment company may frequently trade at prices lower
  than net asset value, the Fund&#146;s board of directors may consider action that
  might be taken to reduce or eliminate any material discount from net asset
  value in respect of common stock, which may include the repurchase of such
  shares in the open market or in private transactions, the making of a tender
  offer for such shares, or the conversion of the Fund to an open-end investment
  company. The board of directors may decide not to take any of these actions. In
  addition, there can be no assurance that share repurchases or tender offers, if
undertaken, will reduce market discount.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>21</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
  the foregoing, at any time when the Fund&#146;s preferred stock is outstanding, the
  Fund may not purchase, redeem or otherwise acquire any of its common stock
  unless (1) all accrued preferred stock dividends have been paid and (2) at the
  time of such purchase, redemption or acquisition, the net asset value of the
  Fund&#146;s portfolio (determined after deducting the acquisition price of the
  common stock) is at least 200% of the liquidation value of the outstanding
  preferred stock (expected to equal the original purchase price per share plus
  any accrued and unpaid dividends thereon). Any service fees incurred in
  connection with any tender offer made by the Fund will be borne by the Fund and
will not reduce the stated consideration to be paid to tendering shareholders.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
  to its investment restrictions, the Fund may borrow to finance the repurchase
  of shares or to make a tender offer. Interest on any borrowings to finance
  share repurchase transactions or the accumulation of cash by the Fund in
  anticipation of share repurchases or tenders will reduce the Fund&#146;s net income.
  Any share repurchase, tender offer or borrowing that might be approved by the
  Fund&#146;s board of directors would have to comply with the Securities Exchange Act
of 1934, the Investment Company Act and the rules and regulations thereunder.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
  the decision to take action in response to a discount from net asset value will
  be made by the board of directors at the time it considers such issue, it is
  the board&#146;s present policy, which may be changed by the board of directors, not
  to authorize repurchases of common stock or a tender offer for such shares if:
  (1) such transactions, if consummated, would (a) result in the de-listing of
  the common stock from the New York Stock Exchange, or (b) impair the Fund&#146;s
  status as a regulated investment company under the Code (which would make the
  Fund a taxable entity, causing the Fund&#146;s income to be taxed at the corporate
  level in addition to the taxation of shareholders who receive dividends from
  the Fund), or as a registered closed-end investment company under the
  Investment Company Act; (2) the Fund would not be able to liquidate portfolio
  securities in an orderly manner and consistent with the Fund&#146;s investment
  objectives and policies in order to repurchase shares; or (3) there is, in the
  board&#146;s judgment, any (a) material legal action or proceeding instituted or
  threatened challenging such transactions or otherwise materially adversely
  affecting the Fund, (b) general suspension of or limitation on prices for
  trading securities on the New York Stock Exchange, (c) declaration of a banking
  moratorium by Federal or state authorities or any suspension of payment by
  United States or New York banks, (d) material limitation affecting the Fund or
  the issuers of its portfolio securities by Federal or state authorities on the
  extension of credit by lending institutions or on the exchange of foreign
  currency, (e) commencement of war, armed hostilities or other international or
  national calamity directly or indirectly involving the United States or (f)
  other event or condition which would have a material adverse effect (including
  any adverse tax effect) on the Fund or its shareholders if shares were
  repurchased. The board of directors may in the future modify these conditions
in light of experience.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  repurchase by the Fund of its shares at prices below net asset value will
  result in an increase in the net asset value of those shares that remain
  outstanding. However, there can be no assurance that share repurchases or
  tender offers at or below net asset value will result in the Fund&#146;s shares
  trading at a price equal to their net asset value. Nevertheless, the fact that
  the Fund&#146;s shares may be the subject of repurchase or tender offers from time to
  time, or that the Fund may be converted to an open-end investment company, may
  reduce any spread between market price and net asset value that might otherwise
exist.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
  addition, a purchase by the Fund of its common stock will decrease the Fund&#146;s
  total assets which would likely have the effect of increasing the Fund&#146;s
  expense ratio. Any purchase by the Fund of its common stock at a time when
  preferred stock is outstanding will increase the leverage applicable to the
outstanding common stock then remaining.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Before
  deciding whether to take any action if the shares of common stock trade below
  net asset value, the Fund&#146;s board of directors would likely consider all
  relevant factors, including the extent and duration of the discount, the liquidity
  of the Fund&#146;s portfolio, the impact of any action that might be taken on the
  Fund or its shareholders and market considerations. Based on these
  considerations, even if the Fund&#146;s shares should trade at a discount, the board
  of directors may determine that, in the interest of the Fund and its
shareholders, no action should be taken.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>22</FONT></P>
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<PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>DIVIDEND
REINVESTMENT PLAN</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
  the Fund&#146;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&#146;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&#146;s shares are held in street or other nominee name, then to such
  shareholder&#146;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.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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:</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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&#146; accounts.
  Shares are allocated to participants&#146; 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&#146;s
  shares, resulting in the acquisition of fewer shares than if the dividend or
distribution had been paid in shares issued by the Fund.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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&#146;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.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  reinvestment shares are credited to the participant&#146;s plan account in the
  Fund&#146;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&#146;s plan account,
  including information participants will need for tax records. Shares held in
  the participant&#146;s plan account have full dividend and voting rights. Dividends
  and distributions paid on shares held in the participant&#146;s plan account will
also be reinvested.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  the closing market price of shares of the Fund&#146;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.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 common
stock, the price on resale may be less or more than the net asset value.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>23</FONT></P>
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<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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 of New York 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&#146;s shares held in such
  shareholder&#146;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&#146;s common stock on the New York Stock Exchange on the
  date discontinuance is effective) after deducting The Bank of New York&#146;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&#146;s plan account, along with a check for any
  fractional share interest, valued at the closing price of the Fund&#146;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&#146;s
  plan account is a fraction of a single share, such shareholder&#146;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&#146;s common stock on the New York Stock Exchange on the
date discontinuance is effective.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund may change, suspend or terminate the plan at any time upon mailing a
notice to participants.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2><B>U.S. FEDERAL
INCOME TAX MATTERS</B></FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  following discussion is a brief summary of certain U.S. federal income tax
  considerations affecting the Fund and its U.S. shareholders. No attempt is made
  to present a detailed explanation of all U.S. federal, state, local and foreign
  tax concerns affecting the Fund and its shareholders (including shareholders
  owning a large position in the Fund), and the discussions set forth here and in
  the Prospectus do not constitute tax advice. Investors are urged to consult
  their tax advisors with any specific questions relating to federal, state,
  local and foreign taxes. The discussion reflects applicable tax laws of the
  United States as of the date of this Statement of Additional Information, which
  tax laws may be changed or subject to new interpretations by the courts or the
IRS retroactively or prospectively.</FONT></P>
<P><FONT SIZE=2><B>Taxation of the Fund</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund has elected to be treated, has qualified and intends to continue to
  qualify each year as a regulated investment company (a &#147;RIC&#148;) under Subchapter
  M of the Code. Accordingly, the Fund must, among other things, (i) derive in
  each taxable year at least 90% of its gross income (including tax-exempt
  interest) from dividends, interest, payments with respect to certain securities
  loans, and gains from the sale or other disposition of stock, securities or
  foreign currencies, other income (including but not limited to gains from
options, futures and</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2>24</FONT></P>
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<PAGE>

<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>forward
  contracts) derived with respect to its business of investing in such stock,
  securities, or currencies and income from interests in qualified publicly
  traded partnerships; (ii) diversify its holdings so that, at the end of each
  quarter of each taxable year (a) at least 50% of the market value of the Fund&#146;s
  total assets is represented by cash and cash items, U.S. government securities,
  the securities of other RICs and other securities, with such other securities
  limited, in respect of any one issuer, to an amount not greater than 5% of the value
  of the Fund&#146;s total assets and not more than 10% of the outstanding voting
  securities of such issuer, and (b) not more than 25% of the market value of the
  Fund&#146;s total assets is invested in the securities (other than U.S. government
  securities and the securities of other RICs) of (I) any one issuer, (II) any
  two or more issuers that the Fund controls and that are determined to be
  engaged in the same business or similar or related trades or businesses or
  (III) one or more qualified publicly traded partnerships; and (iii) distribute
  substantially all of its net income and net short-term and long-term capital
  gains (after reduction by any available capital loss carryforwards) in
  accordance with the timing requirements imposed by the Code, so as to maintain
  its RIC status and to avoid paying any federal income or excise tax. To the
  extent it qualifies for treatment as a RIC and satisfies the above-mentioned
  distribution requirements, the Fund will not be subject to federal income tax
  on income paid to its shareholders in the form of dividends or capital gain
distributions.</FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amounts
  not distributed on a timely basis in accordance with a calendar year
  distribution requirement are subject to a nondeductible 4% excise tax at the
  Fund level. To avoid the tax, the Fund must distribute (or be deemed to have
  distributed) by December 31 of each calendar year an amount at least equal to
  the sum of (i) 98% of its ordinary income (not taking into account any capital
  gain or loss) for the calendar year, (ii) 98% of its capital gain net income
  (which is the excess of its realized net long-term capital gain over its
  realized net short-term capital loss), generally computed on the basis of the
  one-year period ending on October 31 of such year, after reduction by any available
  capital loss carryforwards, plus (iii) 100% of any ordinary income and capital
  gain net income from the prior year (as previously computed) that was not paid
  during such year and on which the Fund paid no federal income tax. While the
  Fund intends to distribute any income and capital gain in the manner necessary
  to minimize imposition of the 4% excise tax, there can be no assurance that
  sufficient amounts of the Fund&#146;s taxable income and capital gain will be
  distributed to avoid entirely the imposition of the tax. In that event, the
  Fund will be liable for the tax only on the amount by which it does not meet
the foregoing distribution requirement.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
  dividend will be treated as paid during a calendar year if it is paid during
  that calendar year or declared by the Fund in October, November or December of
  that year, payable to shareholders of record on a date during such a month and
  paid by the Fund during January of the following year. Any such dividends paid
  during January of the following year will be deemed to be received on December
  31 of the year the dividends are declared, rather than when the dividends are
  received.</FONT>

<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  the Fund does not qualify as a RIC for any taxable year, the Fund&#146;s taxable
  income will be subject to corporate income taxes, and all distributions from
  earnings and profits, including distributions of net capital gain (if any),
  will be taxable to the shareholders as ordinary income. Such distributions
  generally will be eligible (i) for the dividends received deduction in the case
  of corporate shareholders and (ii) for treatment as &#147;qualified dividends&#148; in
  the case of individual shareholders. In addition, in order to requalify for
  taxation as a RIC, the Fund may be required to recognize unrealized gains, pay
substantial taxes and interest and make certain distributions.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  the Fund utilizes leverage through borrowings, it may be restricted by loan
  covenants with respect to the declaration and payment of dividends in certain
  circumstances. Additionally, if at any time when the shares of APS are
  outstanding the Fund does not meet the asset coverage requirements of the
  Investment Company Act, the Fund will be required to suspend distributions to
  holders of common stock until the asset coverage is restored. See &#147;Description
  of APS&#151;Dividends and Dividend Periods&#151;Restrictions on Dividends and Other
  Payments.&#148; Such a suspension may prevent the Fund from distributing at least
  90% of the sum of its investment company taxable income and certain other
  income and may, therefore, jeopardize the Fund&#146;s qualification for taxation as
  a regulated investment company. Upon any failure to meet the asset coverage
  requirements of the Investment Company Act, the Fund, in its sole discretion,
  may redeem shares of APS in order to maintain or restore the requisite asset
  coverage and avoid the adverse consequences to the Fund and its shareholders of
  failing to qualify for treatment as a regulated investment company. See
&#147;Description of APS&#151;Redemption.&#148; There can be no assurance, however, that any
such action would achieve that objective.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>25</FONT></P>
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<PAGE>

<P><FONT SIZE=2><B>The Fund&#146;s Investments</B></FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund&#146;s investments in options, futures contracts, hedging transactions, forward
  contracts (to the extent permitted) and certain other transactions will be
  subject to special tax rules (including mark-to-market, constructive sale,
  straddle, wash sale, short sale and other rules), the effect of which may be to
  accelerate income to the Fund, defer Fund losses, cause adjustments in the
  holding periods of securities held by the Fund, convert capital gain into
  ordinary income and convert short-term capital losses into long-term capital
  losses. These rules could therefore affect the amount, timing and character of
  distributions to shareholders. The Fund may be required to limit its activities
  in options and futures contracts in order to enable it to maintain its RIC
status.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Some
  of the debt obligations acquired by the Fund may be treated as debt obligations
  that are issued with original issue discount (&#147;OID&#148;). Such OID generally will
  be included in income in the taxable year of accrual and before the Fund
  receives any corresponding cash payments. Since, in certain circumstances, the
  Fund may recognize income before receiving cash representing such income, it
  may have difficulty making distributions in the amounts necessary to satisfy
  the requirements for maintaining RIC status and for avoiding income and excise
  taxes. Accordingly, the Fund may be required to borrow money or dispose of
  securities under disadvantageous circumstances in order to generate cash to
satisfy the Fund&#146;s distribution requirements.</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
  recognized gain or income attributable to market discount on long-term debt
  obligations (<I>i.e.</I>, obligations
  with a term of more than one year) purchased by the Fund is taxable as ordinary
  income. A long-term debt obligation generally is treated as acquired at a
  market discount if purchased after its original issue at a price less than (i)
  the stated principal amount payable at maturity, in the case of any obligation
  that does not have OID or (ii) the sum of the issue price and any OID that
  accrued before the obligation was purchased, subject to a de min-imis
exclusion, in the case of an obligation that does have OID.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  the Fund invests (directly or indirectly through a REIT) in residual interests
  in REMICs, a portion of the Fund&#146;s income will be subject to a U.S. federal
  income tax in all events. &#147;Excess inclusion income&#148; of the Fund generated by a
  residual interest in a REMIC will be allocated to shareholders of the Fund in
  proportion to the dividends received by the shareholders of the Fund. Excess
  inclusion income generally (i) cannot be offset by net operating losses, (ii)
  will constitute unrelated business taxable income to certain tax exempt
  investors and (iii) in the case of a foreign shareholder, will not qualify for
  any reduction in U.S. federal withholding taxes. In addition, if the
  shareholders of the Fund include a &#147;disqualified organization&#148; (such as certain
  governments or governmental agencies) the Fund may be liable for a tax on the
excess inclusion income allocable to the disqualified organization.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund&#146;s transactions in foreign currencies, foreign currency-denominated debt
  obligations and certain foreign currency options, futures contracts and forward
  contracts (and similar instruments) may give rise to ordinary income or loss to
  the extent such income or loss results from fluctuations in the value of the
foreign currency concerned.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income
  received by the Fund with respect to foreign securities may be subject to
  withholding and other taxes imposed by foreign countries. Tax conventions may
  reduce or eliminate such taxes. Generally, shareholders will not be entitled to
claim a credit or deductions with respect to foreign taxes.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
  the Fund acquires any equity interest in certain foreign corporations that
  receive at least 75% of their annual gross income from passive sources (such as
  interest, dividends, certain rents and royalties, or capital gains) or that
  hold at least 50% of their assets in investments producing such income
  (&#147;Passive Foreign Investment Companies&#148; or &#147;PFICs&#148;), the Fund could be subject
  to U.S. federal income tax and additional interest charges on &#147;excess
  distributions&#148; received from such companies or on gain from the sale of stock
  in such companies, even if all income or gain actually received by the Fund is
  timely distributed to its shareholders. The Fund would not be able to pass
  through to its shareholders any credit or deduction for such a tax. An election
  generally may be available that would ameliorate these adverse tax
  consequences, but any such election could require the Fund to recognize taxable
  income or gain (subject to tax distribution requirements) without the
  concurrent receipt of cash. These investments could also result in the
  treatment of associated capital gains as ordinary income. The Fund may limit
  and/or manage its holdings in PFICs to limit its tax liability or maximize its
return from these investments.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  American Jobs Creation Act of 2004 (the &#147;Jobs Act&#148;), among other things,
  modified the 90% gross income test with respect to income of a RIC to include
  net income derived from an interest in certain qualified &#147;publicly traded
  partnerships&#148; (&#147;PTPs&#148;) and modified the asset diversification test of a RIC to
include a new</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>26</FONT></P>
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<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>limitation on the
  investment by a RIC in certain qualified PTP interests. Under the Jobs Act, a
  RIC may now invest in a qualified PTP regardless of the types of business the
  PTP operates. The Jobs Act further provides that passive losses from an
  investment in a qualified PTP may not be used by a RIC to offset any income
  other than income from the same PTP and any deductions passed through by the
PTP may not be used by a RIC to offset income from other sources.</FONT></P>
<P><FONT SIZE=2><B>Taxation of Shareholders</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund intends to take the position that under present law, the APS will
  constitute stock of the Fund, and distributions by the Fund with respect to its
  APS (other than distributions in redemption of APS that are treated as
  exchanges of stock under Section 302(b) of the Code) will constitute dividends
  to the extent of the Fund&#146;s current and accumulated earnings and profits as
  calculated for federal income tax purposes. It is possible, however, that the
  IRS might take a contrary position, asserting, for example, that the APS
  constitutes debt of the Fund. If this position were upheld, distributions by
  the Fund to holders of APS would constitute interest, whether or not they exceeded
  the earnings and profits of the Fund, would be included in full in the income
  of the recipient and would be taxed as ordinary income. The following
discussion assumes that shares of APS are treated as stock.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions
  of any taxable net investment income and net short-term capital gain will be
  taxable as ordinary income (except to the extent that a reduced capital gains
  tax rate applies to qualified dividend income). Distributions of the Fund&#146;s net
  capital gain, if any, will be taxable to shareholders as long-term capital
  gains, regardless of the length of time they held their shares. So long as the
  Fund has capital loss carryforwards, distributions derived from capital gains
  in the Fund&#146;s portfolio may constitute ordinary income, rather than capital
  gains, to shareholders. Distributions, if any, in excess of the Fund&#146;s earnings
  and profits will first reduce the adjusted tax basis of a holder&#146;s shares and,
  after that basis has been reduced to zero, will constitute capital gains to the
  shareholder (assuming the shares are held as a capital asset). For purposes of
  determining whether distributions are out of the Fund&#146;s current or accumulated
  earnings and profits, the Fund&#146;s earnings and profits will be allocated first
to the Fund&#146;s preferred stock and then to the Fund&#146;s common stock.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject
  to certain conditions and limitations, under applicable federal income tax
  provisions, a corporation receiving dividends with respect to stock it owns in
  another corporation is allowed a deduction against a portion of such dividend
  income received (the &#147;Dividends Received Deduction&#148;). The Fund expects to
  receive dividends with respect to some or all of the stocks in other
  corporations held by the Fund, and the Fund may designate such dividends as
  eligible for the Dividends Received Deduction only to the extent that the Fund
  receives dividends for which the Fund would be entitled to the Dividends
  Received Deduction if the Fund were a regular corporation and not a RIC. A
  corporation that owns common stock or preferred stock generally will be
  entitled to a Dividends Received Deduction with respect to a designated portion
of the dividends it receives from the Fund.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
  dividends received by the Fund to be eligible for designation for the Dividends
  Received Deduction, the dividends must be paid by a domestic corporation that
  is subject to U.S. income tax and the Fund must hold the stock of such
  corporation for at least 46 days during the 90-day period beginning 45 days
  before the ex-dividend date for the stock (91 days during the 180-day period
  for certain preferred stock). The Fund&#146;s holding period for stock will in
  general not include any period for which the Fund holds an option to sell or is
  the writer of an option to buy substantially identical stock, although there
  exists an exception for certain options written by the Fund, the exercise
  prices of which are not substantially below the market prices of the underlying
  securities at the times the options are written. The Dividends Received Deduction
  is reduced for dividends received from debt-financed portfolio stock by a
percentage related to the amount of debt incurred to purchase such stock.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To
  the extent that the source of dividends or distributions with respect to the
  APS is dividends received by the Fund that would be eligible for the Dividends
  Received Deduction, a corporate holder of common stock or preferred stock in
  the Fund will be allowed a deduction equal to 70% of the dividends paid to it
  by the Fund and designated by the Fund as eligible for the Dividends Received
  Deduction. The aggregate amount of Dividends Received Deductions that may be
  taken by a corporation is limited to 70% of its taxable income, computed
  without regard to any net operating loss deduction. The portion of a dividend
  on the APS that can be designated as eligible for the Dividends Received
  Deduction will be limited by the fact that dividend income received by the Fund
  is allocated to the RPS first, before being allocated to any other class or
series of the Fund&#146;s stock. Dividends on</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>27</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>the APS and
  the Fund&#146;s common stock will be designated as eligible for the Dividends
  Received Deduction only to the extent that any qualifying income remains after
dividends are paid on the RPS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
  order for dividends effectively designated by the Fund as eligible for the
  Dividends Received Deduction to qualify for the Dividends Received Deduction
  when received by a particular shareholder, the shareholder must, among other
  things, be a corporation meeting the 46-day (or 91-day) holding period
  requirement described above with respect to its Fund shares. The Dividends
  Received Deduction will be reduced in the case of a shareholder who has
  incurred indebtedness, or is treated as having incurred indebtedness, that is
&#147;directly attributable&#148; to the acquisition or carrying of the shares. The basis
  of a shareholder&#146;s shares may be reduced in the case of certain &#147;extraordinary
  dividends&#148; eligible for the Dividends Received Deduction by an amount equal to
  the non-taxed portion of such dividends, although it is expected that such
extraordinary dividends will be paid only in unusual circumstances.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
  current law, certain income distributions properly designated and paid by the
  Fund to individual taxpayers are taxed at rates equal to those applicable to
  net long-term capital gains (15%, or 5% for individuals in the 10% or 15% tax
  brackets). This tax treatment applies only if certain holding period
  requirements and other requirements are satisfied by the shareholder and the
  dividends are attributable to qualified dividends received by the Fund itself.
  Corporate taxpayers are taxed at ordinary income tax rates on dividends not
  eligible for the Dividends Received Deduction. For this purpose, &#147;qualified
  dividends&#148; means dividends received by the Fund from U.S. corporations and
  qualifying foreign corporations, provided that the Fund satisfies certain
  holding period and other requirements in respect of the stock of such
  corporations. As is the case with the Dividends Received Deduction, to the
  extent the Fund is required to allocate income eligible for the Dividends
  Received Deduction to the RPS, the allocation to the RPS generally will reduce
  the dividends on the common stock and the APS that are eligible for the special
qualified dividend rate.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
  the case of securities lending transactions, payments in lieu of dividends are
  not qualified dividends. Dividends received by the Fund from REITs are
  qualified dividends eligible for this lower tax rate only in limited
  circumstances. These special rules relating to the taxation of ordinary income
  dividends from RICs generally apply to taxable years beginning before January
  1, 2009. Thereafter, the Fund&#146;s dividends, other than capital gain dividends,
  will be fully taxable at ordinary income rates unless further legislative
action is taken.</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
  dividend will not be treated as qualified dividend income (whether received by
  the Fund or paid by the Fund to a shareholder) if (1) the dividend is received
  with respect to any share held for fewer than 61 days during the 121-day period
  beginning on the date which is 60 days before the date on which such share
  becomes ex-dividend with respect to such dividend (or more than 90 days during
  the associated 181-day period, in the case of dividends attributable to periods
  in excess of 366 days paid with respect to preferred stock), (2) to the extent
  that the recipient is under an obligation (whether pursuant to a short sale or
  otherwise) to make related payments with respect to positions in substantially
  similar or related property or (3) if the recipient elects to have the dividend
  treated as investment income for purposes of the limitation on deductibility of
  investment interest. Distributions of income by the Fund other than qualified
  dividend income and distributions of net realized short-term capital gains (on
  stocks held for one year or less) are taxed as ordinary income, at rates
currently up to 35%.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  benefits of the reduced tax rates applicable to long-term capital gains and
  qualified dividend income may be impacted by the application of the alternative
minimum tax to individual shareholders.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
  cannot assure you as to what percentage of the dividends paid on the APS, if
  any, will consist of qualified dividend income or long-term capital gains, both
  of which are taxed at lower rates for individuals than are ordinary income and
short-term capital gains.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions
  in excess of the Fund&#146;s earnings and profits will first reduce the adjusted tax
  basis of a holder&#146;s shares and, after such adjusted tax basis is reduced to
  zero, will constitute capital gain to such holder (assuming the shares are held
  as a capital asset). For non-corporate taxpayers, under current law, investment
  company taxable income (other than qualified dividend income) currently will be
  taxed at a maximum rate of 35%, while net capital gain generally will be taxed
  at a maximum rate of 15%. For corporate taxpayers, both investment company
  taxable income and net capital gain are taxed at a maximum rate of 35%. For
  purposes of determining whether distributions are out of the Fund&#146;s current or
  accumulated earnings and profits, the Fund&#146;s earnings and profits will be
  allocated first to the Fund&#146;s preferred stock and then to the Fund&#146;s common
stock.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>28</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund may retain for reinvestment all or part of its net capital gain. If any
  such gain is retained, the Fund will be subject to a tax at a rate of 35% of
  such amount. In that event, the Fund expects to designate the retained amount
  as undistributed capital gain in a notice to its shareholders, each of whom (i)
  will be required to include in income for tax purposes as long-term capital
  gain its share of such undistributed amounts, (ii) will be entitled to credit
  its proportionate share of the tax paid by the Fund against its U.S. federal
  income tax liability and to claim refunds to the extent that the credit exceeds
  such liability and (iii) will increase its basis in its shares of the Fund by
  an amount equal to 65% of the amount of undistributed capital gain included in
such shareholder&#146;s gross income.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  price of shares purchased at any time may reflect the amount of a forthcoming
  distribution. Those purchasing shares just prior to a distribution will receive
  a distribution which will be taxable to them even though it represents in part
a return of invested capital.</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  sale, exchange or redemption of Fund shares may give rise to a gain or loss. In
  general, any gain or loss realized upon a taxable disposition of shares will be
  treated as long-term capital gain or loss if the shares have been held for more
  than 12 months. Otherwise, the gain or loss on the taxable disposition of Fund
  shares will be treated as short-term capital gain or loss. Long-term capital
  gain rates applicable to individuals have been reduced, in general, to 15% (or
  5% for individuals in the 10% or 15% rate brackets); however, such reduced
  rates are set to expire with respect to taxable years beginning after December
  31, 2008 absent further legislative action. The maximum tax rate applicable to
  net capital gains recognized by a corporate taxpayer is 35%. Any loss realized
  upon the sale or exchange of Fund shares with a holding period of 6 months or
  less will be treated as a long-term capital loss to the extent of any capital
  gain distributions received with respect to such shares. In addition, all or a
  portion of a loss realized on a redemption or other disposition of Fund shares
  may be disallowed under &#147;wash sale&#148; rules to the extent the shareholder
  acquires other substantially identical shares (whether through the reinvestment
  of distributions or otherwise) within the period beginning 30 days before the
  redemption of the loss shares and ending 30 days after such date. Any disallowed
  loss will result in an adjustment to the shareholder&#146;s tax basis in some or all
of the other shares acquired.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sales
  charges paid upon a purchase of shares cannot be taken into account for
  purposes of determining gain or loss on a sale of shares before the 91st day
  after their purchase to the extent a sales charge is reduced or eliminated in a
  subsequent acquisition of shares of the Fund (or of another fund) pursuant to
  the reinvestment or exchange privilege. Any disregarded amounts will result in
  an adjustment to the shareholder&#146;s tax basis in some or all of any other shares
acquired.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders
  may be entitled to offset their capital gain dividends with capital loss. There
  are a number of statutory provisions affecting when capital loss may be offset
  against capital gain, and limiting the use of loss from certain investments and
  activities. Accordingly, shareholders with capital loss are urged to consult
their tax advisors.</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends
  and distributions on the Fund&#146;s shares generally are subject to federal income
  tax as described herein to the extent they do not exceed the Fund&#146;s realized
  income and gains, even though such dividends and distributions may economically
  represent a return of a particular shareholder&#146;s investment. Such distributions
  are likely to occur in respect of shares purchased at a time when the Fund&#146;s
  net asset value reflects gains that are either unrealized, or realized but not
  distributed. Such realized gains may be required to be distributed even when
  the Fund&#146;s net asset value also reflects unrealized losses. Certain dividends
  declared in October, November or December and paid in the following January
  will be taxed to shareholders as if received on December 31 of the year in
  which they were declared. In addition, certain other distributions made after
  the close of a taxable years of the Fund may be &#147;spilled back&#148; and treated as
  paid by the Fund (except for purposes of the 4% excise tax) during such prior
  taxable year. In such case, however, shareholders will be treated as having
  received such dividends in the taxable year in which the distributions were
actually made.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amounts
  paid by the Fund to individuals and certain other shareholders who have not
  provided the Fund with their correct taxpayer identification number (&#147;TIN&#148;) and
  certain certifications required by the IRS as well as shareholders with respect
  to whom the Fund has received certain information from the IRS or a broker may
  be subject to &#147;backup withholding&#148; of federal income tax arising from the
  Fund&#146;s taxable dividends and other distributions as well as the gross proceeds
  of sales of shares, at a rate equal to the fourth highest rate of tax
  applicable to a single individual (currently 28%). An individual&#146;s TIN generally
is his or her social security number. Backup</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>29</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>withholding is
  not an additional tax. Any amounts withheld under the backup withholding rules
  from payments made to a shareholder may be refunded or credited against such
  shareholder&#146;s U.S. federal income tax liability, if any, provided that the
required information is furnished to the IRS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
  Treasury regulations, if a shareholder recognizes a loss on a disposition of
  the Fund&#146;s shares of $2 million or more for an individual shareholder or $10
  million or more for a corporate shareholder, the shareholder must file with the
  IRS a disclosure statement on Form 8886. Direct shareholders of portfolio
  securities are in many cases excepted from this reporting requirement, but
  under current guidance, shareholders of a RIC are not excepted. Future guidance
  may extend the current exception from this reporting requirement to
  shareholders of most or all RICs. The fact that a loss is reportable under
  these regulations does not affect the legal determination of whether the
  taxpayer&#146;s treatment of the loss is proper. Shareholders should consult their
  tax advisors to determine the applicability of these regulations in light of
their particular circumstances.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund will inform shareholders of the source and tax status of all distributions
  promptly after the close of each calendar year. The IRS has taken the position
  that if a RIC has more than one class of shares, it may designate distributions
  made to each class in any year as consisting of no more than that class&#146;s
  proportionate share of a particular type of income for that year, including
  ordinary income and net capital gain. A class&#146;s proportionate share of a
  particular type of income for a year is determined according to the percentage
  of total dividends paid by the RIC during that year to the class. The IRS,
  however, will not render such designations ineffective for federal income tax
  purposes even if it is a disproportionate designation as long as such
  designation is made pursuant to a rule described in a registration statement
that was filed with the SEC before June 13, 1989.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund has received a private letter ruling from the IRS that states that the IRS
  will respect the Fund&#146;s proposed method of designating income eligible for the
  Dividends Received Deduction to the RPS, common stock and the APS. More
  specifically, the IRS will respect the Fund&#146;s designation of income eligible
  for the Dividends Received Deduction to the RPS pro rata between dividend
  income that is eligible for the Dividends Received Deduction (and that
  constitutes qualified dividend income) and dividend income that is eligible for
  the Dividends Received Deduction (but does not constitute qualified dividend
  income). To the extent any qualifying income remains after dividends are paid
  on the RPS, distributions on the common stock and the APS will be designated as
  income eligible for the Dividends Received Deduction on a pro rata basis
  between these classes. Dividend income that constitutes qualified dividend
  income (but is not eligible for the Dividends Received Deduction) and net
  capital gain will be designated to the common stock and the APS (and to the RPS
  to the extent the Fund&#146;s qualified income is less than the distribution to the
RPS) on a pro rata basis among these classes.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  foregoing discussion does not address the special tax rules applicable to
  certain classes of investors, such as tax-exempt entities, foreign investors,
  insurance companies and financial institutions. Shareholders should consult their
  own tax advisors with respect to special tax rules that may apply in their
  particular situations, as well as the state, local and, where applicable,
foreign tax consequences of investing in the Fund.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2><B>EXPERTS</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  statement of assets and liabilities of the Fund as of December 31, 2005
  including the schedule of investments as of December 31, 2005 and the related
  statements of operations and cash flows for the year then ended and the
  statement of changes in net assets for each of the two years in the period then
  ended and the financial highlights for each of the four years in the period
  then ended, incorporated by reference in this Statement of Additional
  Information, have been audited by Ernst &amp; Young LLP, independent registered
  public accounting firm, as set forth in their report thereon appearing
  elsewhere herein, and are incorporated by reference in reliance upon such
  report given upon the authority of such firm as experts in accounting and
  auditing. Ernst &amp; Young LLP, located at 233 South Wacker Drive, Chicago,
Illinois 60606, provides accounting and auditing services to the Fund.</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2>30</FONT></P>
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<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>ADDITIONAL
INFORMATION</B></FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
  Registration Statement on Form N-2, including amendments thereto, relating to
  the shares offered hereby, has been filed by the Fund with the SEC in
  Washington, D.C. The prospectus and this Statement of Additional Information do
  not contain all of the information set forth in the Registration Statement,
  including any exhibits and schedules thereto. For further information with respect
  to the Fund and the shares offered hereby, reference is made to the
  Registration Statement. Statements contained in the prospectus and this
  Statement of Additional Information as to the contents of any contract or other
  document referred to are not necessarily complete and in each instance
  reference is made to the copy of such contract or other document filed as an
  exhibit to the Registration Statement, each such statement being qualified in
  all respects by such reference. A copy of the Registration Statement may be
  inspected without charge at the SEC&#146;s principal office in Washington, D.C., and
  copies of all or any part thereof may be obtained from the SEC upon the payment
  of certain fees prescribed by the SEC. The Fund files its complete schedule of
  portfolio holdings for the first and third quarter of its fiscal year with the
  SEC on Form N-Q. The Fund&#146;s Form N-Q will be available on the SEC&#146;s website at
  http://www.sec.gov. The Fund&#146;s Form N-Q, when available, may be reviewed and
  copied at the SEC&#146;s Public Reference Room in Washington, D.C.. Information
  regarding the operation of the Public Reference Room may be obtained by calling
  1-800-SEC-0330. The Fund&#146;s Form N-Q, when available, may also be obtained, upon
request, by calling (800) 699-1236.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2><B>FINANCIAL STATEMENTS</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  audited financial statements listed below are incorporated herein by reference
  from the Fund&#146;s Annual Report to Shareholders for the year ended December 31,
  2005 as filed with the SEC on Form N-CSR on March 2, 2006 (no. 811-4915). All
  other portions of the Annual Report to Shareholders on Form N-CSR are not
incorporated herein by reference and are not part of this SAI.</FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="3%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="92%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Report of
    independent registered public accountants</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Schedule of
    Investments at December 31, 2005</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Statement of
    Assets and Liabilities at December 31, 2005</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Statement of
    Operations for the year ended December 31, 2005</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Statement of
    Changes in Net Assets for the years ended December 31, 2005 and 2004</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Statement of
    Cash Flows for the year ended December 31, 2005</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Notes to
    Financial Statements</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&#151;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Financial
    Highlights - Selected Per Share Data and Ratios</FONT></P>
  </TD>
  </TR>
</TABLE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies
  of the Fund&#146;s Annual and Semi-Annual Reports to Shareholders may be obtained
  without charge by writing to the Fund at its address at 55 East Monroe Street,
  Suite 3600, Chicago, Illinois 60603 or by calling (800) 699-1236. The Fund&#146;s
  Annual Report and Semi-Annual Report to Shareholders are also available on the
  Fund&#146;s website at http://www.dnpselectincome.com.</FONT>

<DIV><FONT SIZE=3> </FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2>31</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P ALIGN=CENTER><FONT SIZE=2><B>APPENDIX A</B></FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV ALIGN=CENTER><FONT SIZE=2><B>DNP SELECT INCOME FUND INC.</B></FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2><B>Form of Articles Supplementary Creating
  Series M, Series W and Series F of</B></FONT>

<DIV><FONT SIZE=3> </FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2><B>Auction Preferred Stock</B></FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;DNP
  SELECT INCOME FUND INC., a Maryland corporation having its principal Maryland
  office in the City of Baltimore (the &#147;Fund&#148;), certifies to the State Department
of Assessments and Taxation of Maryland that:</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FIRST:
  Pursuant to authority expressly vested in the Board of Directors of the Fund by
  Article FIFTH of its charter (which as hereafter amended, restated and
  supplemented from time to time is referred to herein, together with these
  Articles Supplementary, as the &#147;Charter&#148;), the Board of Directors has
  classified out of the Fund&#146;s authorized and unissued preferred stock and has
  authorized the creation and issuance of three series of 4,000 shares each of
  Auction Preferred Stock, par value $.001 per share, liquidation preference
  $25,000 per share, designated respectively: Auction Preferred Stock, Series M;
  Auction Preferred Stock, Series W; and Auction Preferred Stock, Series F (each
  such series being referred to herein as a series of APS, and all such series,
  together with any additional series of Auction Preferred Stock that may be
  classified and designated by the Board of Directors of the Fund as provided
herein, being referred to collectively as APS).</FONT></P>
<P><FONT SIZE=3> </FONT>

<DIV><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECOND:
  The preferences, conversion and other rights, voting powers, restrictions,
  limitations as to dividends, qualifications, and terms and conditions of
redemption, of the APS are as follows:</FONT></DIV>
<DIV><FONT SIZE=3> </FONT></DIV>
<P ALIGN=CENTER><FONT SIZE=2>DESIGNATION</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUCTION
  PREFERRED STOCK, SERIES M: A series of 4,000 shares of preferred stock, par
  value $.001 per share, liquidation preference $25,000 per share plus
  accumulated but unpaid dividends, if any, thereon (whether or not earned or
  declared), is hereby designated &#147;Auction Preferred Stock, Series M.&#148; Each share
  of Auction Preferred Stock, Series M shall be issued on a Date of Original
  Issue (as herein defined) to be determined by the Board of Directors of the
  Fund or a duly authorized committee thereof; have an Initial Dividend Rate,
  Initial Dividend Payment Date and Subsequent Dividend Payment Day (each as
  herein defined) to be determined by the Board of Directors of the Fund or a
  duly authorized committee thereof; and have such other preferences, limitations
  and relative voting rights, in addition to those required by applicable law or
  set forth in the Charter applicable to preferred stock of the Fund, as are set
  forth in Part I and Part II of these Articles Supplementary. The Auction
  Preferred Stock, Series M shall constitute a separate series of preferred stock
  of the Fund, and each share of Auction Preferred Stock, Series M shall be
identical.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUCTION
  PREFERRED STOCK, SERIES W: A series of 4,000 shares of preferred stock, par
  value $.001 per share, liquidation preference $25,000 per share plus
  accumulated but unpaid dividends, if any, thereon (whether or not earned or
  declared), is hereby designated &#147;Auction Preferred Stock, Series W.&#148; Each share
  of Auction Preferred Stock, Series W shall be issued on a Date of Original
  Issue (as herein defined) to be determined by the Board of Directors of the
  Fund or a duly authorized committee thereof; have an Initial Dividend Rate,
  Initial Dividend Payment Date and Subsequent Dividend Payment Day (each as
  herein defined) to be determined by the Board of Directors of the Fund or a
  duly authorized committee thereof; and have such other preferences, limitations
  and relative voting rights, in addition to those required by applicable law or
  set forth in the Charter applicable to preferred stock of the Fund, as are set
  forth in Part I and Part II of these Articles Supplementary. The Auction
  Preferred Stock, Series W shall constitute a separate series of preferred stock
  of the Fund, and each share of Auction Preferred Stock, Series W shall be
identical.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AUCTION
  PREFERRED STOCK, SERIES F: A series of 4,000 shares of preferred stock, par
  value $.001 per share, liquidation preference $25,000 per share plus
  accumulated but unpaid dividends, if any, thereon (whether or not earned or
  declared), is hereby designated &#147;Auction Preferred Stock, Series F.&#148; Each share
  of Auction Preferred Stock, Series F shall be issued on a Date of Original
  Issue (as herein defined) to be determined by the Board of Directors of the
  Fund or a duly authorized committee thereof; have an Initial Dividend Rate,
  Initial Dividend Payment Date and Subsequent Dividend Payment Day (each as
herein defined) to be determined</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-1</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>by the Board
  of Directors of the Fund or a duly authorized committee thereof; and have such
  other preferences, limitations and relative voting rights, in addition to those
  required by applicable law or set forth in the Charter applicable to preferred
  stock of the Fund, as are set forth in Part I and Part II of these Articles
  Supplementary. The Auction Preferred Stock, Series F shall constitute a
  separate series of preferred stock of the Fund, and each share of Auction
Preferred Stock, Series F shall be identical.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Board of Directors of the Fund may, in the future, by resolution duly adopted,
  without shareholder approval (except as otherwise provided by these Articles
  Supplementary or required by applicable law), classify additional shares out of
  the Fund&#146;s authorized and unissued preferred stock as one or more additional
  series of Auction Preferred Stock, with the same preferences, rights, voting
  powers, restrictions, limitations as to dividends, qualifications and terms and
  conditions of redemption and other terms herein described, except that the Date
  of Original Issue, Initial Dividend Rate and Initial Dividend Payment Date of
  shares of each such additional series, and any other changes in the terms
  herein set forth, shall be as set forth in the Articles Supplementary with
respect to such additional series.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-2</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>


<P ALIGN=CENTER><FONT SIZE=2><B>TABLE OF CONTENTS</B></FONT></P>
<p><FONT SIZE=3> </FONT>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=100%>
  <TR style="font-size:1px" >
  <TD WIDTH="9%" VALIGN=BOTTOM>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=BOTTOM>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="80%" VALIGN=BOTTOM>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=BOTTOM>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  </TR>

<TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Page</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="3" VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B001">DEFINITIONS</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-4</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B002">PART I.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-14</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B003">1.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B003">Ranking</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-14</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B004">2.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B004">Dividends</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-14</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B005">3.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B005">Designation of Special Dividend Periods</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-17</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B006">4.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B006">Voting Rights</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-18</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B007">5.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B007">Investment Company Act Preferred Stock Asset Coverage</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-20</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B008">6.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B008">Preferred Stock Basic Maintenance Coverage</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-21</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B009">7.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B009">Restrictions on Dividends and Other Distributions</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-22</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B010">8.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B010">Redemption</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-22</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B011">9.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B011">Liquidation Rights</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-25</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B012">10.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B012">Certain Rating Agency Requirements and Restrictions</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-26</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B013">11.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B013">Miscellaneous</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-26</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B014">PART II.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-27</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B015">1.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B015">Orders</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-27</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B016">2.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B016">Submission of Orders by Broker-Dealers to Auction Agent</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-28</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B017">3.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B017">Determination of Sufficient Clearing Bids, Winning Bids Rate and
    Applicable Dividend Rate</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-29</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B018">4.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B018">Acceptance and Rejection of Submitted Bids and Submitted Sell
    Orders and Allocation of Shares</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-31</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B019">5.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B019">Auction Agent</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-32</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B020">6.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B020">Transfer of APS</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-33</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B021">7.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B021">Global Certificate</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-33</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B022">8.</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2><A   HREF="#B022">Force Majeure</A></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>A-33</FONT></P>
  </TD>
  </TR>
</TABLE>
<div><FONT SIZE=3> </FONT></div>
<P ALIGN=CENTER><FONT SIZE=2>A-3</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P ALIGN=CENTER><A NAME=B001></A><FONT SIZE=2><B>DEFINITIONS</B></FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
  used in Parts I and II of these Articles Supplementary, the following terms
  shall have the following meanings (with terms defined in the singular having
  comparable meanings when used in the plural and vice versa), unless the context
otherwise requires:</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
&#147;ACCOUNTANT&#146;S CONFIRMATION&#148; shall have the meaning specified in paragraph (c)
of Section 6 of Part I of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
&#147;AFFILIATE&#148; means, for purposes of the definition of &#147;Outstanding,&#148; any Person
  known to the Auction Agent to be controlled by, in control of or under common
  control with the Fund; <I>provided, however, </I>that
  no Broker-Dealer controlled by, in control of or under common control with the
  Fund shall be deemed to be an Affiliate nor shall any corporation or any Person
  controlled by, in control of or under common control with such corporation, one
  of the trustees, directors or executive officers of which is a director of the
  Fund, be deemed to be an Affiliate solely because such trustee, director or
executive officer is also a director of the Fund.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
&#147;AGENT MEMBER&#148; means a member of or participant in the Securities Depository
that will act on behalf of a Bidder.</FONT></P>
<DIV><FONT SIZE=3> </FONT></DIV>
<FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)
&#147;ALL HOLD RATE&#148; means 80% of the Reference Rate.</FONT>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)
&#147;ANNUAL VALUATION DATE&#148; means, for so long as any shares of APS are
  outstanding, December 31 of each year, or, if such day is not a Valuation Date,
the next preceding Valuation Date.</FONT></P>
<DIV><FONT SIZE=3> </FONT></DIV>
<FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)
&#147;APPLICABLE DIVIDEND RATE&#148; shall have the meaning specified in subparagraph
(d)(i)(D) of Section 2 of Part I of these Articles Supplementary.</FONT>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)
&#147;APPLICABLE PERCENTAGE&#148; means the percentage determined based on the credit
  rating assigned to the series of APS on such date by Moody&#146;s (if Moody&#146;s is
  then rating the APS) and S&amp;P (if S&amp;P is then rating the APS) as
  follows:</FONT>
<DIV><FONT SIZE=3> </FONT></DIV>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=60%>
  <TR style="font-size:1px" >
  <TD WIDTH="25%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="20%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="21%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="10%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="21%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="3" VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Credit Ratings</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="3" VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Applicable</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Moody&#146;s</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>S&amp;P</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Percentage</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>Aaa</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>AAA</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>125%</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Aa3 to Aa1</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>AA- to AA+</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>150%</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>A3 to A1</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>A- to A+</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>200%</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Baa3 to Baa1</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>BBB- to BBB+</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>250%</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>Ba1 and
    lower</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>BB+ and
    lower</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>300%</FONT></P>
  </TD>
  </TR>
</TABLE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
  purposes of this definition, the &#147;prevailing rating&#148; of shares of a series of
  preferred stock shall be (i) If not Aaa/AAA, then Aa3/AA- or higher if such
  shares have a rating of Aa3 or better by Moody&#146;s and AA- or better by S&amp;P
  or the equivalent of such ratings by such agencies or a Substitute Rating
  Agency or Substitute Rating Agencies selected as provided below, (ii) if not
  Aa3/AA- or higher, then A3/A- if such shares have a rating of A3 or better by
  Moody&#146;s and A- or better by S&amp;P or the equivalent of such ratings by such
  agencies or a Substitute Rating Agency or Substitute Rating Agencies selected
  as provided below, (iii) if not A3/A- or higher, then Baa3/BBB- if such shares
  have a rating of Baa3 or better by Moody&#146;s and BBB- or better by S&amp;P or the
  equivalent of such ratings by such agencies or a Substitute Rating Agency or
Substitute Rating Agencies selected as provided below.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Applicable Percentage as so determined shall be further subject to upward but
  not downward adjustment in the discretion of the Board of Directors after
  consultation with the Broker-Dealers, provided that immediately following any
  such increase the Fund would be in compliance with the Preferred Stock Basic
  Maintenance Amount. The Fund shall take all reasonable action necessary to enable
  either Moody&#146;s or S&amp;P to provide a rating for each series of APS. If
  neither Moody&#146;s nor S&amp;P shall make such a rating available, the Fund shall
select one or more Substitute Rating Agencies.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-4</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)
&#147;APPLICABLE SPREAD&#148; means:</FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=60%>
  <TR style="font-size:1px" >
  <TD WIDTH="25%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="20%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="21%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="10%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="21%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="3" VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Credit Ratings</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="3" VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Applicable</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Moody&#146;s</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>S&amp;P</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Spread</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>Aaa</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>AAA</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>125 bps</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Aa3 to Aa1</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>AA- to AA+</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>150 bps</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>A3 to A1</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>A- to A+</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>200 bps</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Baa3 to Baa1</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>BBB- to BBB+</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>250 bps</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>Ba1 and
    lower</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>BB+ and
    lower</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>300 bps</FONT></P>
  </TD>
  </TR>
</TABLE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)
&#147;APPLICABLE SPREAD OVER THE REFERENCE RATE&#148; means the rate equaling the sum of
the Applicable Spread plus the Reference Rate.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(10)
&#147;APS&#148; shall have the meaning set forth on the first page of these Articles
Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(11)
&#147;AUCTION&#148; means each periodic implementation of the Auction Procedures.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(12)
&#147;AUCTION AGENCY AGREEMENT&#148; means the agreement between the Fund and the Auction
  Agent which provides, among other things, that the Auction Agent will follow
  the Auction Procedures for purposes of determining the Applicable Dividend Rate
  for shares of a series of APS so long as the Applicable Dividend Rate for
shares of such series is to be based on the results of an Auction.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13)
&#147;AUCTION AGENT&#148; means the entity appointed as such by a resolution of the Board
  of Directors in accordance with Section 5 of Part II of these Articles
Supplementary. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(14)
&#147;AUCTION DATE,&#148; with respect to any Subsequent Dividend Period, means the
Business Day next preceding the first day of such Subsequent Dividend Period.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(15)
&#147;AUCTION PROCEDURES&#148; means the procedures for conducting Auctions set forth in
Part II of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(16)
&#147;AVAILABLE APS&#148; shall have the meaning specified in subparagraph (a)(i) of
Section 3 of Part II of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(17)
&#147;BENEFICIAL OWNER,&#148; with respect to shares of a series of APS, means a customer
  of a Broker-Dealer who is listed on the records of that Broker-Dealer (or, if
applicable, the Auction Agent) as a holder of shares of such series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(18)
&#147;BID&#148; and &#147;BIDS&#148; shall have the respective meanings specified in paragraph (a)
of Section 1 of Part II of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(19)
&#147;BIDDER&#148; and &#147;BIDDERS&#148; shall have the respective meanings specified in paragraph
  (a) of Section 1 of Part II of these Articles Supplementary; provided, however,
  that neither the Fund nor any affiliate thereof shall be permitted to be a
  Bidder in an Auction, except that any Broker-Dealer that is an affiliate of the
  Fund may be a Bidder in an Auction, but only if the Orders placed by such
Broker-Dealer are not for its own account.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(20)
&#147;BOARD OF DIRECTORS&#148; means the Board of Directors of the Fund or any duly
authorized committee thereof.</FONT></P>
<DIV><FONT SIZE=3> </FONT></DIV>
<FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(21)
&#147;BROKER-DEALER&#148; means any broker-dealer, commercial bank or other entity
permitted by law to perform the functions required of a Broker-Dealer in Part
II of these Articles Supplementary, that is a member of, or a participant in,
the Securities Depository or is an affiliate of such member or participant, has
been selected by the Fund (with the consent of UBS Securities LLC, which
consent shall not be unreasonably withheld or delayed) and has entered into a
Broker-Dealer Agreement that remains effective.</FONT>
<DIV><FONT SIZE=3> </FONT></DIV>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(22)
&#147;BROKER-DEALER AGREEMENT&#148; means an agreement among the Fund, the Auction Agent
  and a Broker-Dealer pursuant to which such Broker-Dealer agrees to follow the
procedures specified in Part II of these Articles Supplementary.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-5</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(23)
&#147;BUSINESS DAY&#148; means a day on which the New York Stock Exchange is open for
  trading and which is neither a Saturday, Sunday nor any other day on which
banks in The City of New York, New York, are authorized by law to close.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(24)
&#147;CODE&#148; means the Internal Revenue Code of 1986, as amended.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(25)
&#147;COMMON STOCK&#148; means the common stock, par value $.001 per share, of the Fund.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(26)
&#147;CURE DATE&#148; means the Preferred Stock Basic Maintenance Cure Date or the
Investment Company Act Cure Date, as the case may be.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(27)
&#147;DATE OF ORIGINAL ISSUE,&#148; with respect to shares of a series of APS, means the
date on which the Fund initially issued such shares.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(28)
&#147;DISCOUNT FACTOR&#148; means a Moody&#146;s Discount Factor (if Moody&#146;s is then rating
  the APS), an S&amp;P Discount Factor (if S&amp;P is then rating the APS) or a
  Substitute Rating Agency Discount Factor (if a Substitute Rating Agency is then
rating the APS), as the case may be.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(29)
&#147;DISCOUNTED VALUE,&#148; with respect to any asset held by the Fund as of any date,
  means the Moody&#146;s Discounted Value of such asset (if Moody&#146;s is then rating the
  APS), the S&amp;P Discounted Value of such asset (if S&amp;P is then rating the
  APS) or a Substitute Rating Agency Discounted Value of such asset (if a
Substitute Rating Agency is then rating the APS), as the case may be. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(30)
&#147;DIVIDEND PAYMENT DATE,&#148; with respect to shares of a series of APS, means any
  date on which dividends are payable on shares of such series pursuant to the
  provisions of paragraph (c) of Section 2 of Part I of these Articles
Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(31)
&#147;DIVIDEND PERIOD,&#148; with respect to shares of a series of APS, means the period
  from and including the Date of Original Issue of shares of such series to, but
  excluding, the initial Dividend Payment Date for shares of such series and any
  period thereafter from, and including, one Dividend Payment Date for shares of
  such series to, but excluding, the next succeeding Dividend Payment Date for
shares of such series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(32)
&#147;ELIGIBLE ASSET&#148; means a Moody&#146;s Eligible Asset (if Moody&#146;s is then rating the
  APS), an S&amp;P Eligible Asset (if S&amp;P is then rating the APS) or a
  Substitute Rating Agency Eligible Asset (if a Substitute Rating Agency is then
rating the APS), as the case may be.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(33)
&#147;EXISTING HOLDER,&#148; with respect to shares of a series of APS, means a
  Broker-Dealer (or any such other Person as may be permitted by the Fund) that
  is listed on the records of the Auction Agent as a holder of shares of such
series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(34)
&#147;FAILURE TO DEPOSIT,&#148; with respect to shares of a series of APS, means a
  failure by the Fund to pay to the Auction Agent, not later than 12:00 noon, New
  York City time, (A) on any Dividend Payment Date for shares of such series, in
  funds available on such Dividend Payment Date in The City of New York, New
  York, the full amount of any dividend (whether or not earned or declared) to be
  paid on such Dividend Payment Date on any share of such series or (B) on the
  Business Day next preceding any redemption date in funds available on such
  redemption date for shares of such series in The City of New York, New York,
  the Redemption Price to be paid on such redemption date for any share of such
  series after notice of redemption is mailed pursuant to paragraph (c) of
  Section 8 of Part I of these Articles Supplementary; provided, however, that
  the foregoing clause (B) shall not apply to the Fund&#146;s failure to pay the
  Redemption Price in respect of shares of a series of APS when the related
  Notice of Redemption provides that redemption of such shares is subject to one
  or more conditions precedent until any such condition precedent shall not have
  been satisfied at the time or times and in the manner specified in such Notice
of Redemption.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(35)
&#147;FITCH&#148; means Fitch, Inc. and its successors at law.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(36)
&#147;FUND&#148; means the entity named on the first page of these Articles
Supplementary, which is the issuer of the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(37)
&#147;HOLDER,&#148; with respect to shares of a series of APS, means the registered
holder of such shares as the same appears on the record books of the Fund.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-6</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(38)
&#147;HOLD ORDER&#148; and &#147;HOLD ORDERS&#148; shall have the respective meanings specified in
paragraph (a) of Section 1 of Part II of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(39)
&#147;INDEPENDENT ACCOUNTANT&#148; means a nationally recognized registered public
  accounting firm that is independent with respect to the Fund under the auditor
independence rules promulgated by the Securities and Exchange Commission.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(40)
&#147;INITIAL DIVIDEND PAYMENT DATE,&#148; with respect to shares of a series of APS,
  shall be a date determined by the Board of Directors or a duly authorized
  committee thereof in connection with the initial issuance of shares of such
series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(41)
&#147;INITIAL DIVIDEND PERIOD,&#148; with respect to shares of a series of APS, means the
  period from and including the Date of Original Issue thereof to, but excluding,
the Initial Dividend Payment Date for shares of such series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(42)
&#147;INITIAL DIVIDEND RATE,&#148; with respect to shares of a series of APS, shall be a
  rate determined by the Board of Directors or a duly authorized committee
thereof in connection with the initial issuance of shares of such series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(43)
&#147;INITIAL PREFERRED DIRECTORS&#148; means the two directors of the Fund designated by
  the Board of Directors, in connection with the first issuance of Preferred
Stock by the Fund, to represent the holders of Preferred Stock.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(44)
&#147;INVESTMENT COMPANY ACT&#148; means the Investment Company Act of 1940, as amended
from time to time.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(45)
&#147;INVESTMENT COMPANY ACT CURE DATE,&#148; with respect to the failure by the Fund to
  maintain the Investment Company Act Preferred Stock Asset Coverage (as required
  by Section 5 of Part I of these Articles Supplementary) as of the last Business
Day of each month, means the last Business Day of the following month.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(46)
&#147;INVESTMENT COMPANY ACT PREFERRED STOCK ASSET COVERAGE&#148; means asset coverage,
  as defined in Section 18(h) of the Investment Company Act, of at least 200%
  with respect to all outstanding senior securities of the Fund which are stock,
  including all outstanding shares of any series of APS (or such other asset
  coverage as may in the future be specified in or under the Investment Company
  Act as the minimum asset coverage for senior securities which are stock of a
  closed-end investment company as a condition of declaring dividends on its
common stock).</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(47)
&#147;LATE CHARGE&#148; shall have the meaning specified in subparagraph (d)(i)(B) of
Section 2 of Part I of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(48)
&#147;LIBOR&#148; means the London Interbank Offered Rate.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(49)
&#147;LIBOR DEALERS&#148; means UBS Securities LLC and such other dealer or dealers as
  the Fund may from time to time appoint, or, in lieu of any thereof, their respective
affiliates or successors.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(50)
&#147;LIBOR RATE&#148; means on any Auction Date (i) the rate for deposits in U.S.
  dollars for the designated Dividend Period, which appears on display page 3750
  of Moneyline&#146;s Telerate Service (&#147;Telerate Page 3750&#148;) (or such other page as
  may replace that page on that service, or such other service as may be selected
  by the LIBOR Dealer or its successors that are LIBOR Dealers) as of 11:00 a.m.,
  London Time, on the date that is the London Business Day preceding the Auction
  Date (the &#147;LIBOR Determination Date&#148;), or (ii) if such rate does not appear on
  Telerate Page 3750 or such other page as may replace such Telerate Page 3750,
  (A) the LIBOR Dealer shall determine the arithmetic mean for the offered
  quotations of the Reference Banks to leading banks in the London interbank
  market for deposits in U.S. dollars for the designated Dividend Period in an
  amount determined by such LIBOR dealer by reference to requests for quotations
  as of approximately 11:00 a.m. (London time) on such date made by such LIBOR
  Dealer to the Reference Banks, (B) if at least two of the Reference Banks
  provide such quotations, LIBOR Rate shall equal such arithmetic mean of such
  quotations, (C) if only one or none of the Reference Banks provide such quotations,
  LIBOR rate shall be deemed to be the arithmetic mean of the offered quotations
  that leading banks in The City of New York selected by the LIBOR Dealer (after
  obtaining the Fund&#146;s approval) are quoting on the relevant LIBOR Determination
  Date for deposits in U.S. dollars for the designated Dividend Period in an
  amount determined by the LIBOR Dealer (after obtaining the Fund&#146;s approval)
that is representative of a</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-7</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>single
  transaction in such market at such time by reference to the principal London
  offices of leading banks in the London interbank market; <I>provided, however, </I>that if one of the
  LIBOR Dealers does not quote a rate required to determine the LIBOR Rate, the
  LIBOR Rate will be determined on the basis of the quotation or quotations
  furnished by any Substitute LIBOR Dealer or Substitute LIBOR Dealers selected
  by the Fund to provide such rate or rates not being supplied by the LIBOR
  Dealer; <I>provided, further, </I>that
  if the LIBOR Dealer and Substitute LIBOR Dealers are required but unable to determine
  a rate in accordance with at least one of the procedures provided above, LIBOR
  Rate shall be LIBOR Rate as determined on the previous Auction Date. If the
  number of Dividend Period days shall be (i) 7 days or more, but fewer than 21
  days, such rate shall be the seven-day LIBOR rate; (ii) 21 days or more, but
  fewer than 49 days, such rate shall be the one-month LIBOR rate; (iii) 49 days
  or more but fewer than 77 days, such rate shall be the two-month LIBOR rate;
  (iv) 77 days or more, but fewer than 112 days, such rate shall be the
  three-month LIBOR rate; (v) 112 days or more, but fewer than 140 days, such
  rate shall be the four-month LIBOR rate; (vi) 140 days or more, but fewer than
  168 days, such rate shall be the five-month LIBOR rate; (vii) 168 days or more,
  but fewer than 189 days, such rate shall be the six-month LIBOR rate; (viii)
  189 days or more, but fewer than 217 days, such rate shall be the seven-month
  LIBOR rate; (ix) 217 days or more, but fewer than 252 days, such rate shall be
  the eight-month LIBOR rate; (x) 252 days or more, but fewer than 287 days, such
  rate shall be the nine-month LIBOR rate; (xi) 287 days or more, but fewer than
  315 days, such rate shall be the ten-month LIBOR rate; (xii) 315 days or more,
  but fewer than 343 days, such rate shall be the eleven-month LIBOR rate; and
  (xiii) 343 days or more, but fewer than 365 days, such rate shall be the
twelve-month LIBOR rate.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(51)
&#147;LIQUIDATION PREFERENCE,&#148; with respect to a given number of shares of a series
of APS, means $25,000 times that number.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(52)
&#147;LONDON BUSINESS DAY&#148; means any day on which commercial banks are generally
open for business in London.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(53)
&#147;MARKET VALUE&#148; means the Moody&#146;s Market Value (if Moody&#146;s is then rating the
  APS), the S&amp;P Market Value (if S&amp;P is then rating the APS) or a
  Substitute Rating Agency Market Value (if a Substitute Rating Agency is then
rating the APS), as the case may be.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(54)
&#147;MAXIMUM DIVIDEND RATE,&#148; for any Dividend Period will be the higher of the
  Applicable Percentage of the Reference Rate or the Applicable Spread Over the
  Reference Rate. The Applicable Percentage will be determined based on the
  credit rating assigned on such date to such shares by S&amp;P and Moody&#146;s (or
  if S&amp;P or Moody&#146;s shall not make such rating available, the equivalent of
such rating by a Substitute Rating Agency) as follows:</FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=60%>
  <TR style="font-size:1px" >
  <TD WIDTH="20%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="20%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="19%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="3%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="16%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="3%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="14%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="1%" VALIGN=TOP>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM ROWSPAN=3>
  <P ALIGN=CENTER><FONT SIZE=1><B>Applicable<BR>Percentage<BR>of the</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="3" VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Credit Ratings</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="3" VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Applicable</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Moody&#146;s</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>S&amp;P</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Reference Rate</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1><B>Spread</B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>Aaa</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>AAA</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>125%</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>125 bps</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Aa3 to Aa1</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>AA- to AA+</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>150%</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>150 bps</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>A3 to A1</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>A- to A+</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>200%</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>200 bps</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Baa3 to Baa1</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>BBB- to BBB+</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>250%</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=2>250 bps</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>Ba1 and
    lower</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6" NOWRAP>
  <P><FONT SIZE=2>BB+ and
    lower</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>300%</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>300 bps</FONT></P>
  </TD>
  <TD VALIGN=TOP BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
</TABLE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming
  the Fund maintains an AAA/Aaa rating on the APS, the practical effect of the
  different methods used to calculate the Maximum Dividend Rate is shown in the
table below:</FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=60%>
  <TR style="font-size:1px" >
  <TD WIDTH="23%" VALIGN=BOTTOM>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=BOTTOM>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="10%" VALIGN=BOTTOM>
  <P ALIGN=RIGHT>&nbsp;</P>
  </TD>
  <TD WIDTH="9%" VALIGN=BOTTOM>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=BOTTOM>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="10%" VALIGN=BOTTOM>
  <P ALIGN=RIGHT>&nbsp;</P>
  </TD>
  <TD WIDTH="9%" VALIGN=BOTTOM>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=BOTTOM>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="19%" COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER>&nbsp;</P>
  </TD>
  <TD WIDTH="2%" VALIGN=BOTTOM>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Maximum</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Maximum</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Dividend</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Dividend
    Rate</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Rate Using</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Using the</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Method
    Used</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>the
    Applicable</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Applicable</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>to
    Determine</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Reference</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Percentage
    of the</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Spread
    Over the</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>the
    Maximum</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Rate</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Reference
    Rate</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Reference
    Rate</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1><B>Dividend
    Rate</B></FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <HR SIZE=1 WIDTH="100%" NOSHADE COLOR=BLACK ALIGN=CENTER>

</TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>1%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=RIGHT><FONT SIZE=2>1.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=RIGHT><FONT SIZE=2>2.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>Spread</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=2>2%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>2.50</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>3.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=2>Spread</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>3%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=RIGHT><FONT SIZE=2>3.75</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=RIGHT><FONT SIZE=2>4.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>Spread</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=2>4%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>5.00</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>5.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=2>Spread</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>5%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=RIGHT><FONT SIZE=2>6.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=RIGHT><FONT SIZE=2>6.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P ALIGN=CENTER><FONT SIZE=2>Either</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM BGCOLOR="#E6E6E6">
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=2>6%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>7.50</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P ALIGN=RIGHT><FONT SIZE=2>7.25</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=2>%</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=BOTTOM>
  <P ALIGN=CENTER><FONT SIZE=2>Percentage</FONT></P>
  </TD>
  <TD VALIGN=BOTTOM>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-8</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
  Fund shall take all reasonable action necessary to enable S&amp;P and Moody&#146;s
  to provide a rating for each series of APS. If S&amp;P or Moody&#146;s shall not
  make such a rating available, DNP Select Income Fund Inc. or its affiliates and
  successors, after consultation with the Fund and the Broker-Dealers, shall
  select a nationally recognized statistical rating organization to act as a
Substitute Rating Agency.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(55)
&#147;MOODY&#146;S&#148; means Moody&#146;s Investors Service, Inc., a Delaware corporation, and
its successors.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(56)
&#147;MOODY&#146;S DISCOUNTED VALUE,&#148; with respect to any asset held by the Fund as of
  any date, means, except as may be otherwise provided in the definition of
&#147;Discounted Value&#148; set forth in the Moody&#146;s Guidelines, the quotient of the
  Market Value of such asset divided by the applicable Moody&#146;s Discount Factor; <I>provided, however, </I>that any asset as to
  which there is no Moody&#146;s Discount Factor shall have a Moody&#146;s Discounted Value
of zero. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(57)
&#147;MOODY&#146;S DISCOUNT FACTORS&#148; means the discount factors set forth in the Moody&#146;s
  Guidelines for use in calculating the Moody&#146;s Discounted Value of the Fund&#146;s
assets in connection with Moody&#146;s rating of the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(58)
&#147;MOODY&#146;S ELIGIBLE ASSETS&#148; means assets of the Fund set forth in the Moody&#146;s
  Guidelines as &#147;Eligible Assets&#148; for purposes of determining maintenance of the
  Moody&#146;s Preferred Stock Basic Maintenance Amount in connection with Moody&#146;s
rating of the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(59)
&#147;MOODY&#146;S GUIDELINES&#148; means that certain document entitled &#147;Moody&#146;s Preferred
  Stock Guidelines&#148; and adopted by the Board of Directors as of the date hereof; <I>provided, however, </I>that any of the
  provisions of said document may from time to time be amended, altered or repealed
  by the Board of Directors in its sole discretion, without any vote or consent
  of shareholders of the Fund, based on a determination by the Board of Directors
  that such action is necessary or appropriate in connection with obtaining or
  maintaining the rating assigned by Moody&#146;s to the APS or revising the Fund&#146;s
  investment restrictions or policies consistent with guidelines adopted by
  Moody&#146;s, and any such amendment, alteration or repeal will not be deemed to
  affect the preferences, rights or powers of the APS or the Holders thereof,
  provided that the Board of Directors receives written confirmation from Moody&#146;s
  that any such amendment, alteration or repeal would not adversely affect the
rating then assigned by Moody&#146;s to the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(60)
&#147;MOODY&#146;S MARKET VALUE,&#148; with respect to any asset of the Fund, means the amount
set forth in the Moody&#146;s Guidelines as the &#147;Market Value&#148; of such asset.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(61)
&#147;MOODY&#146;S PREFERRED STOCK BASIC MAINTENANCE AMOUNT&#148; means the amount set forth
in the Moody&#146;s Guidelines as the &#147;Preferred Stock Basic Maintenance Amount.&#148;</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(62)
&#147;NOTICE OF REDEMPTION&#148; means any notice with respect to the redemption of
  shares of a series of APS pursuant to paragraph (c) of Section 8 of Part I of
these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(63)
&#147;NOTICE OF SPECIAL DIVIDEND PERIOD&#148; means any notice with respect to a Special
  Dividend Period of shares of a series of APS pursuant to subparagraph (d)(i) of
Section 3 of Part I of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(64)
&#147;ORDER&#148; and &#147;ORDERS&#148; shall have the respective meanings specified in paragraph
(a) of Section 1 of Part II of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(65)
&#147;OUTSTANDING&#148; means, as of any Auction Date with respect to shares of a series
  of APS, the number of shares of such series theretofore issued by the Fund
  except, without duplication, (i) any shares of such series theretofore
  cancelled or delivered to the Auction Agent for cancellation or redeemed by the
  Fund, (ii) any shares of such series as to which the Fund or any Affiliate
  thereof shall be an Existing Holder and (iii) any shares of such series
  represented by any certificate in lieu of which a new certificate has been
executed and delivered by the Fund.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(66)
&#147;PAYING AGENT&#148; means The Bank of New York, unless and until another entity
  appointed by a resolution of the Board of Directors enters into an agreement
  with the Fund to serve as paying agent with respect to the APS, which Paying
Agent may be the same as the Auction Agent.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-9</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(67)
&#147;PERSON&#148; means and includes an individual, a partnership, a corporation, a
  trust, an unincorporated association, a joint venture or other entity or a
government or any agency or political subdivision thereof.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(68)
&#147;POTENTIAL BENEFICIAL OWNER,&#148; with respect to shares of a series of APS, means
  a customer of a Broker-Dealer that is not a Beneficial Owner of shares of such
  series but that wishes to purchase shares of such series, or that is a
  Beneficial Owner of shares of such series that wishes to purchase additional
shares of such series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(69)
&#147;POTENTIAL HOLDER&#148; means any Broker-Dealer or any such other Person as may be
  permitted by the Fund, including any Existing Holder, who may be interested in
acquiring APS (or, in the case of an Existing Holder, additional APS).</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(70)
&#147;PREFERRED DIRECTOR&#148; means the Initial Preferred Directors and the Subsequent
Preferred Directors.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(71)
&#147;PREFERRED STOCK&#148; means the preferred stock, par value $.001 per share, of the
Fund.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(72)
&#147;PREFERRED STOCK BASIC MAINTENANCE AMOUNT&#148; means the Moody&#146;s Preferred Stock
  Basic Maintenance Amount (if Moody&#146;s is then rating the APS), the S&amp;P
  Preferred Stock Basic Maintenance Amount (if S&amp;P is then rating the APS) or
  a Substitute Rating Agency Basic Maintenance Amount (if a Substitute Rating
Agency is then rating the APS), as the case may be.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(73)
&#147;PREFERRED STOCK BASIC MAINTENANCE CURE DATE,&#148; with respect to the failure by
  the Fund to satisfy any Preferred Stock Basic Maintenance Amount (as required
  by Section 6 of Part I of these Articles Supplementary) as of a given Valuation
Date, means the eighth Business Day following such Valuation Date.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(74)
&#147;PREFERRED STOCK BASIC MAINTENANCE REPORT&#148; means a report signed by the
  President, Treasurer or any Senior Vice President or Vice President of the Fund
  which sets forth, as of any Valuation Date, the assets of the Fund, the Market
  Value and the Discounted Value thereof (seriatim and in aggregate) and each
Preferred Stock Basic Maintenance Amount.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(75)
&#147;RATING AGENCIES&#148; means S&amp;P and Moody&#146;s for so long as S&amp;P and Moody&#146;s
  issue ratings for the APS, and, at such time as S&amp;P and/or Moody&#146;s no
  longer issues a rating for the APS, the Substitute Rating Agency or Substitute
Rating Agencies, as the case may be. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(76)
&#147;REDEMPTION PRICE&#148; means the applicable redemption price specified in paragraph
(a) or (b) of Section 8 of Part I of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(77)
&#147;REFERENCE BANKS&#148; means four major banks in the London interbank market
  selected by UBS Securities LLC or its affiliates or successors or such other
party as the Fund may from time to tome appoint.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(78)
&#147;REFERENCE RATE&#148; means (i) with respect to a Standard Dividend Period or a
  Special Dividend Period having 364 or fewer days, the applicable LIBOR Rate and
  (ii) with respect to a Special Dividend Period having 365 or more days, the
applicable U.S. Treasury Note Rate.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(79)
&#147;S&amp;P&#148; means Standard &amp; Poor&#146;s, a division of The McGraw-Hill Companies,
Inc., and its successors.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(80)
&#147;S&amp;P DISCOUNTED VALUE,&#148; with respect to any asset held by the Fund as of
  any date, means, except as may be otherwise provided in the definition of
&#147;Discounted Value&#148; set forth in the S&amp;P Guidelines, the quotient of the
  Market Value of such asset divided by the applicable S&amp;P Discount Factor;
  provided, however, that any asset as to which there is no S&amp;P Discount
Factor shall have an S&amp;P Discounted Value of zero. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(81)
&#147;S&amp;P DISCOUNT FACTORS&#148; means the discount factors set forth in the S&amp;P
  Guidelines for use in calculating the S&amp;P Discounted Value of the Fund&#146;s
assets in connection with S&amp;P&#146;s rating of the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(82)
&#147;S&amp;P ELIGIBLE ASSETS&#148; means assets of the Fund set forth in the S&amp;P
  Guidelines as &#147;Eligible Assets&#148; for purposes of determining maintenance of the
  S&amp;P Preferred Stock Basic Maintenance Amount in connection with S&amp;P&#146;s
rating of the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(83)
&#147;S&amp;P GUIDELINES&#148; means that certain document entitled &#147;Standard &amp;
  Poor&#146;s Preferred Stock Guidelines&#148; and adopted by the Board of Directors as of
  the date hereof; <I>provided, however, </I>that
any of the</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-10</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>provisions of
  said document may from time to time be amended, altered or repealed by the
  Board of Directors in its sole discretion, without any vote or consent of
  shareholders of the Fund, based on a determination by the Board of Directors
  that such action is necessary or appropriate in connection with obtaining or
  maintaining the rating assigned by S&amp;P to the APS or revising the Fund&#146;s
  investment restrictions or policies consistent with guidelines adopted by
  S&amp;P, and any such amendment, alteration or repeal will not be deemed to
  affect the preferences, rights or powers of the APS or the Holders thereof,
  provided that the Board of Directors receives written confirmation from S&amp;P
  that any such amendment, alteration or repeal would not adversely affect the
rating then assigned by S&amp;P to the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(84)
&#147;S&amp;P MARKET VALUE,&#148; with respect to any asset of the Fund, means the amount
set forth in the S&amp;P Guidelines as the &#147;Market Value&#148; of such asset.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(85)
&#147;S&amp;P PREFERRED STOCK BASIC MAINTENANCE AMOUNT&#148; means the amount set forth
in the S&amp;P Guidelines as the &#147;Preferred Stock Basic Maintenance Amount.&#148;</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(86)
&#147;SECURITIES ACT&#148; means the Securities Act of 1933, as amended from time to
time.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(87)
&#147;SECURITIES DEPOSITORY&#148; means The Depository Fund Company and its successors
  and assigns or any other securities depository selected by the Fund which
  agrees to follow the procedures required to be followed by such securities
depository in connection with the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(88)
&#147;SELL ORDER&#148; and &#147;SELL ORDERS&#148; shall have the respective meanings specified in
paragraph (a) of Section 1 of Part II of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(89)
&#147;SETTLEMENT DATE&#148; means any date on which (i) a new Subsequent Dividend Period
  begins, and (ii) shares of APS which have been tendered and sold in an Auction
are delivered through the Securities Depository.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(90)
&#147;SPECIAL DIVIDEND PERIOD,&#148; with respect to shares of a series of APS, shall
  have the meaning specified in paragraph (a) of Section 3 of Part I of these
Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(91)
&#147;SPECIAL REDEMPTION PROVISIONS&#148; shall have the meaning specified in
subparagraph (a)(i) of Section 8 of Part I of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(92)
&#147;STANDARD DIVIDEND PERIOD,&#148; with respect to shares of a series of APS, means
  the Initial Dividend Period for shares of such series or any Subsequent
Dividend Period consisting of seven days.</FONT></P>
<P> </P>
</font>
<p><font size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(93) &#147;SUBMISSION DEADLINE&#148; means 1:00 p.m., New York City time, on any Auction Date or such other time on any Auction Date by which Broker-Dealers are required to submit Orders to the Auction Agent as specified by the Auction Agent from time to time.</font></p>
<p> </p>
<FONT SIZE=3>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(94)
&#147;SUBMITTED BID&#148; and &#147;SUBMITTED BIDS&#148; shall have the respective meanings
  specified in paragraph (a) of Section 3 of Part II of these Articles
Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(95)
&#147;SUBMITTED HOLD ORDER&#148; and &#147;SUBMITTED HOLD ORDERS&#148; shall have the respective meanings
  specified in paragraph (a) of Section 3 of Part II of these Articles
Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(96)
&#147;SUBMITTED ORDER&#148; and &#147;SUBMITTED ORDERS&#148; shall have the respective meanings
specified in paragraph (a) of Section 3 of Part II of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(97)
&#147;SUBMITTED SELL ORDER&#148; and &#147;SUBMITTED SELL ORDERS&#148; shall have the respective
  meanings specified in paragraph (a) of Section 3 of Part II of these Articles
Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(98)
&#147;SUBSEQUENT DIVIDEND PAYMENT DAY,&#148; with respect to shares of a series of APS
  shall be a day of the week determined by the Board of Directors or a duly
  authorized committee thereof in connection with the initial issuance of shares
of such series.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(99)
&#147;SUBSEQUENT DIVIDEND PERIOD,&#148; with respect to shares of a series of APS, means
  the period from and including the first day following the Initial Dividend
  Period of shares of such series to but excluding the next Dividend Payment Date
  for shares of such series and any period thereafter from and including one
  Dividend Payment Date for shares of such series to but excluding the next
  succeeding Dividend Payment Date for shares of such series; <I>provided, however, </I>that if any Subsequent
Dividend Period is also a Special Dividend Period, such</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-11</FONT></P>
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<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>term means the
  period commencing on the first day of such Special Dividend Period and ending
on the last day of the last Dividend Period thereof.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(100)
&#147;SUBSEQUENT PREFERRED DIRECTOR&#148; means any director elected from time to time to
  succeed either (i) an Initial Preferred Director or (ii) another Subsequent
Preferred Director.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(101)
&#147;SUBSTITUTE LIBOR DEALER&#148; means any dealer selected by the Fund; provided,
however, that none of such entities shall be a LIBOR Dealer.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(102)
&#147;SUBSTITUTE RATING AGENCY&#148; means a nationally recognized statistical rating
  organization selected by the Fund, in accordance with the provisions hereof, to
  act as a substitute rating agency to determine the credit rating of the shares
of APS. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(103)
&#147;SUBSTITUTE RATING AGENCY DISCOUNTED VALUE,&#148; with respect to any Substitute
  Rating Agency and any asset held by the Fund as of any date, means, except as
  may be otherwise provided in the definition of &#147;Discounted Value&#148; set forth in
  the Substitute Rating Agency Guidelines applicable to such Substitute Rating
  Agency, the quotient of the Market Value of such asset divided by the
  Substitute Rating Agency Discount Factor applicable to such Substitute Rating
  Agency and such asset; <I>provided, however, </I>that
  any asset as to which there is no Substitute Rating Agency Discount Factor
  applicable to such Substitute Rating Agency and such asset shall have a
Substitute Rating Agency Discounted Value of zero. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(104)
&#147;SUBSTITUTE RATING AGENCY DISCOUNT FACTORS&#148; means the discount factors set
  forth in the Substitute Rating Agency Guidelines applicable to a Substitute
  Rating Agency for use in calculating the Substitute Rating Agency Discounted
  Value of the Fund&#146;s assets in connection with such Substitute Rating Agency&#146;s rating
of the RP. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(105)
&#147;SUBSTITUTE RATING AGENCY ELIGIBLE ASSETS,&#148; with respect to any Substitute
  Rating Agency, means assets of the Fund set forth in the Substitute Rating
  Agency Guidelines applicable to such Substitute Rating Agency as &#147;Eligible
  Assets&#148; for purposes of determining maintenance of the Substitute Rating Agency
  Preferred Stock Basic Maintenance Amount in connection with such Substitute
Rating Agency&#146;s rating of the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(106)
&#147;SUBSTITUTE RATING AGENCY GUIDELINES&#148; means any document adopted by the Board
  of Directors, in connection with the selection of a Substitute Rating Agency,
  setting forth the guidelines supplied by such Substitute Rating Agency in
  connection with its assignment of a rating to the APS; <I>provided, however, </I>that any of the
  provisions of said document may from time to time be amended, altered or
  repealed by the Board of Directors in its sole discretion, without any vote or
  consent of shareholders of the Fund, based on a determination by the Board of
  Directors that such action is necessary or appropriate in connection with
  obtaining or maintaining the rating assigned by such Substitute Rating Agency
  to the APS or revising the Fund&#146;s investment restrictions or policies
  consistent with guidelines adopted by such Substitute Rating Agency, and any
  such amendment, alteration or repeal will not be deemed to affect the
  preferences, rights or powers of the APS or the Holders thereof, provided that
  the Board of Directors receives written confirmation from such Substitute Rating
  Agency that any such amendment, alteration or repeal would not adversely affect
the rating then assigned by such Substitute Rating Agency to the APS.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(107)
&#147;SUBSTITUTE RATING AGENCY MARKET VALUE,&#148; with respect to any Substitute Rating
  Agency and any asset of the Fund, means the amount set forth as the &#147;Market
  Value&#148; of such asset in the Substitute Rating Agency Guidelines applicable to
such Substitute Rating Agency.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(108)
&#147;SUBSTITUTE RATING AGENCY PREFERRED STOCK BASIC MAINTENANCE AMOUNT,&#148; with
  respect to any Substitute Rating Agency, means the amount set forth as the
&#147;Preferred Stock Basic Maintenance Amount&#148; in the Substitute Rating Agency
Guidelines applicable to such Substitute Rating Agency. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(109)
&#147;SUBSTITUTE U.S. GOVERNMENT SECURITIES DEALER&#148; any U.S. Government securities
  dealer selected by the Fund as to which Moody&#146;s, S&amp;P, or any Substitute
  Rating Agency then rating the APS shall not have objected; <I>provided, however, </I>that none of such
entities shall be a U.S. Government Securities Dealer.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(110)
&#147;SUFFICIENT CLEARING BIDS&#148; shall have the meaning specified in paragraph (a) of
Section 3 of Part II of these Articles Supplementary.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-12</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(111)
&#147;TREASURY NOTE&#148; means a direct obligation of the U.S. Government having a
maturity at the time of issuance of five years or less but more than 364 days. </FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(112)
&#147;U.S. GOVERNMENT SECURITIES DEALER&#148; means Lehman Government Securities Incorporated,
  Goldman, Sachs &amp; Co., Salomon Brothers Inc., Morgan Guaranty Fund Company
  of New York and any other U.S. Government securities dealer selected by the
  Fund as to which Moody&#146;s (if Moody&#146;s is then rating the APS) and S&amp;P (if
  S&amp;P is then rating the APS) shall not have objected or their respective
  affiliates or successors, if such entity is a U.S. Government securities
dealer.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(113)
&#147;U.S. TREASURY NOTE RATE&#148; on any date means (i) the yield as calculated by
  reference to the bid price quotation of the actively traded, current coupon
  Treasury Note with a maturity most nearly comparable to the length of the
  related Dividend Period, as such bid price quotation is published on the
  Business Day immediately preceding such date by the Federal Reserve Bank of New
  York in its Composite 3:30 p.m. Quotations for U.S. Government Securities
  report for such Business Day, or (ii) if such yield as calculated is not
  available, the Alternate Treasury Note Rate on such date. &#147;Alternate Treasury
  Note Rate&#148; on any date means the yield as calculated by reference to the arithmetic
  average of the bid price quotations of the actively traded, current coupon
  Treasury Note with a maturity most nearly comparable to the length of the
  related Dividend Period, as determined by the bid price quotations as of any
  time on the Business Day immediately preceding such date, obtained from at
least three U.S. Government Securities Dealers.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(114)
&#147;VALUATION DATE&#148; means the last Business Day of each week, or such other date
  as the Fund and the Rating Agencies may agree upon for purposes of determining
the Preferred Stock Basic Maintenance Amount.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(115)
&#147;VOTING PERIOD&#148; shall have the meaning specified in paragraph (b) of Section 4
of Part I of these Articles Supplementary.</FONT></P>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(116)
&#147;WINNING BID RATE&#148; shall have the meaning specified in paragraph (a) of Section
3 of Part II of these Articles Supplementary.</FONT></P>
<P ALIGN=CENTER><FONT SIZE=2>A-13</FONT></P>
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<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P ALIGN=CENTER><A NAME=B002></A><FONT SIZE=2><B>PART I.</B></FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="4%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>1.<A NAME=B003></A></B></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Ranking.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    The shares of a series of APS shall rank on a parity with each other, with
    shares of any other series of APS and with shares of any other series of
    Preferred Stock as to the payment of dividends by the Fund and as to the
    distribution of assets upon dissolution, liquidation or winding up of the
    affairs of the Fund.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    No Holder of shares of any series of APS shall have, solely by reason of
    being such a Holder, any preemptive right or, unless otherwise determined by
    the Board of Directors, any other right to acquire, purchase or subscribe for
    any shares of Preferred Stock or Common Stock or other securities of the Fund
    which the Fund may hereafter issue or sell.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>2.<A NAME=B004></A></B></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Dividends.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    <I>Cumulative Cash Dividends. </I>The
    Holders of shares of a series of APS shall be entitled to receive, when, as
    and if declared by the Board of Directors, out of funds legally available
    therefor in accordance with the Charter and applicable law, cumulative cash dividends
    at the Applicable Dividend Rate for shares of such series, determined as set
    forth in paragraph (d) of this Section 2, and no more, payable on the
    Dividend Payment Dates with respect to shares of such series determined
    pursuant to paragraph (c) of this Section 2. Holders of shares of a series of
    APS shall not be entitled to any dividend, whether payable in cash, property
    or shares, in excess of full cumulative dividends, as herein provided, on
    shares of such series. No interest, or sum of money in lieu of interest,
    shall be payable in respect of any dividend payment or payments on shares of
    a series of APS which may be in arrears, and, except to the extent set forth
    in subparagraph (d)(i) of this Section 2, no additional sum of money shall be
    payable in respect of any such arrearage.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    <I>Dividends Cumulative From Date of Original
    Issue. </I>Dividends on shares of a series of APS shall accumulate at
    the Applicable Dividend Rate for shares of such series from the Date of
    Original Issue thereof.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    <I>Dividend Payment Dates and Adjustment
    Thereof. </I>The Dividend Payment Dates with respect to shares of a
    series of APS shall be the Initial Dividend Payment Date with respect to such
    series and each Subsequent Dividend Payment Day with respect to such series
    thereafter; provided, however, that:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    if the day on which dividends would otherwise be payable on shares of such
    series is not a Business Day, then such dividends shall be payable on such
    shares on the first Business Day that falls after such day; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    the Fund in its discretion may establish the Dividend Payment Dates in
    respect of any Special Dividend Period of shares of a series of APS
    consisting of more than 28 days; <I>provided,
    however, </I>that such dates shall be set forth in the Notice of
    Special Dividend Period relating to such Special Dividend Period, as
    delivered to the Auction Agent, which Notice of Special Dividend Period shall
    be filed with the Secretary of the Fund; and <I>provided,
    further, </I>that (A) any such Dividend Payment Date shall be a
    Business Day and (B) the last Dividend Payment Date in respect of such
    Special Dividend Period shall be the Business Day immediately following the
    last day thereof.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    <I>Dividend Rates and Calculation of
    Dividends. </I></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    <I>Dividend Rates. </I>The dividend
    rate on shares of a series of APS during the period from and after the Date
    of Original Issue of shares of such series to and including the last day of
    the Initial Dividend Period of shares of such series shall be equal to the
    Initial Dividend Rate. For each Subsequent Dividend Period of shares of such
    series thereafter, the dividend rate on shares of such series shall be equal
    to the rate per annum that results from an Auction for shares of such series
    on the Auction Date next preceding such Subsequent Dividend Period; <I>provided, however, </I>that if:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    an Auction for any such Subsequent Dividend Period is not held for any reason
    other than as described below and in Section 8 of Part II, the dividend rate
    on shares of such series for such Subsequent Dividend Period will be the
    Maximum Dividend Rate for shares of such series on the Auction Date therefor;</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-14</FONT></P>
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<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    any Failure to Deposit shall have occurred with respect to shares of such
    series during any Initial Dividend Period or Subsequent Dividend Period
    thereof (other than any Special Dividend Period consisting of more than 364
    days or any Subsequent Dividend Period succeeding any Special Dividend Period
    consisting of more than 364 days during which a Failure to Deposit occurred
    that has not been cured), but, prior to 12:00 Noon, New York City time, on
    the third Business Day next succeeding the date on which such Failure to
    Deposit occurred, such Failure to Deposit shall have been cured in accordance
    with paragraph (e) of this Section 2 and the Fund shall have paid to the
    Auction Agent a late charge (&#147;Late Charge&#148;) equal to the sum of (1) if such
    Failure to Deposit consisted of the failure timely to pay to the Auction
    Agent the full amount of dividends with respect to any Dividend Period of the
    shares of such series, an amount computed by multiplying (x) 200% of the
    Reference Rate for the Initial Dividend Period or Subsequent Dividend Period
    during which such Failure to Deposit occurs on the Dividend Payment Date for
    such Dividend Period by (y) a fraction, the numerator of which shall be the
    number of days for which such Failure to Deposit has not been cured in
    accordance with paragraph (e) of this Section 2 (including the day such
    Failure to Deposit occurs and excluding the day such Failure to Deposit is
    cured) and the denominator of which shall be 360, and applying the rate
    obtained against the aggregate Liquidation Preference of the outstanding shares
    of such series and if such Failure to Deposit consisted of the failure timely
    to pay to the Auction Agent the Redemption Price of the shares, if any, of
    such series for which Notice of Redemption has been mailed by the Fund
    pursuant to paragraph (c) of Section 8 of this Part I, an amount computed by
    multiplying (x) 300% of the Reference Rate for the Initial Dividend Period or
    Subsequent Dividend Period during which such Failure to Deposit occurs on the
    redemption date by (y) a fraction, the numerator of which shall be the number
    of days for which such Failure to Deposit is not cured in accordance with
    paragraph (e) of this Section 2 (including the day such Failure to Deposit
    occurs and excluding the day such Failure to Deposit is cured) and the denominator
    of which shall be 360, and applying the rate obtained against the aggregate
    Liquidation Preference of the outstanding shares of such series to be
    redeemed, no Auction will be held in respect of shares of such series for the
    Subsequent Dividend Period thereof and the dividend rate for shares of such
    series for such Subsequent Dividend Period will be the Maximum Dividend Rate
    for shares of such series on the Auction Date for such Subsequent Dividend
    Period;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)
    any Failure to Deposit shall have occurred with respect to shares of such
    series during any Initial Dividend Period or Subsequent Dividend Period
    thereof (other than any Special Dividend Period consisting of more than 364
    days or any Subsequent Dividend Period succeeding any Special Dividend Period
    consisting of more than 364 days during which a Failure to Deposit occurred
    that has not been cured), and, prior to 12:00 Noon, New York City time, on
    the third Business Day next succeeding the date on which such Failure to
    Deposit occurred, such Failure to Deposit shall not have been cured in
    accordance with paragraph (e) of this Section 2 or the Fund shall not have
    paid the applicable Late Charge to the Auction Agent, no Auction will be held
    in respect of shares of such series for the first Subsequent Dividend Period
    thereof thereafter (or for any Subsequent Dividend Period thereof thereafter
    to and including the Subsequent Dividend Period during which (1) such Failure
    to Deposit is cured in accordance with paragraph (e) of this Section 2 and
    (2) the Fund pays the applicable Late Charge to the Auction Agent (the
    condition set forth in this clause (2) to apply only in the event S&amp;P is
    rating such shares at the time the Fund cures such Failure to Deposit), in
    each case no later than 12:00 Noon, New York City time, on the fourth
    Business Day prior to the end of such Subsequent Dividend Period), and the
    dividend rate for shares of such series for each such Subsequent Dividend
    Period shall be a rate per annum equal to the Maximum Dividend Rate for
    shares of such series on the Auction Date for such Subsequent Dividend Period
    (but with the prevailing rating for shares of such series, for purposes of
    determining such Maximum Dividend Rate, being deemed to be below BBB-); or </FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)
    any Failure to Deposit shall have occurred with respect to shares of such
    series during a Special Dividend Period thereof consisting of more than 364
    days, or during any Subsequent Dividend Period thereof succeeding any Special
    Dividend Period consisting of more than 364 days during which a Failure to
    Deposit occurred that has not been cured, and, prior to 12:00 Noon, New</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-15</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>York City
    time, on the fourth Business Day preceding the Auction Date for the
    Subsequent Dividend Period next succeeding such Subsequent Dividend Period,
    such Failure to Deposit shall not have been cured in accordance with
    paragraph (e) of this Section 2 or, in the event S&amp;P is then rating such
    shares, the Fund shall not have paid the applicable Late Charge to the Auction
    Agent (such Late Charge, for purposes of this subparagraph (D), to be
    calculated by using, as the Reference Rate, the Reference Rate applicable to
    a Special Dividend Period (x) consisting of more than 182 days but fewer than
    365 days and (y) commencing on the date on which the Subsequent Dividend
    Period during which Failure to Deposit occurs commenced), no Auction will be
    held in respect of shares of such series for such Subsequent Dividend Period
    (or for any Subsequent Dividend Period thereof thereafter to and including
    the Subsequent Dividend Period during which (1) such Failure to Deposit is
    cured in accordance with paragraph (e) of this Section 2 and (2) the Fund
    pays the applicable Late Charge to the Auction Agent (the condition set forth
    in this clause (2) to apply only in the event S&amp;P is rating such shares
    at the time the Fund cures such Failure to Deposit), in each case no later
    than 12:00 Noon, New York City time, on the fourth Business Day prior to the
    end of such Subsequent Dividend Period), and the dividend rate for shares of
    such series for each such Subsequent Dividend Period shall be a rate per
    annum equal to the Maximum Dividend Rate for shares of such series on the
    Auction Date for such Subsequent Dividend Period (but with the prevailing
    rating for shares of such series, for purposes of determining such Maximum
    Dividend Rate, being deemed to be below BBB-) (the rate per annum at which
    dividends are payable on shares of a series of APS for any Initial Dividend
    Period or Subsequent Dividend Period thereof being herein referred to as the
  &#147;Applicable Dividend Rate&#148; for shares of such series).</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    <I>Calculation of Dividends. </I>The
    amount of dividends per share payable on shares of a series of APS on any
    date on which dividends shall be payable on shares of such series shall be
    computed by multiplying the Applicable Dividend Rate for shares of such
    series in effect for such Dividend Period or Dividend Periods or part thereof
    for which dividends have not been paid by a fraction, the numerator of which
    shall be the number of days in such Dividend Period or Dividend Periods or
    part thereof and the denominator of which shall be 365 if such Dividend
    Period is a Standard Dividend Period and 360 in all other cases, and applying
    the rate obtained against $25,000.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
    <I>Curing a Failure to Deposit. </I>A
    Failure to Deposit with respect to shares of a series of APS shall have been
    cured (if such Failure to Deposit is not solely due to the willful failure of
    the Fund to make the required payment to the Auction Agent) with respect to
    any Initial Dividend Period or Subsequent Dividend Period of shares of such
    series if, within the respective time periods described in subparagraph
    (d)(i) of this Section 2, the Fund shall have paid to the Auction Agent (A)
    all accumulated and unpaid dividends on shares of such series and (B) without
    duplication, the Redemption Price for shares, if any, of such series for
    which Notice of Redemption has been mailed by the Fund pursuant to paragraph
    (c) of Section 8 of Part I of these Articles Supplementary; <I>provided, however, </I>that the foregoing
    clause (B) shall not apply to the Fund&#146;s failure to pay the Redemption Price
    in respect of shares of a series of APS when the related Redemption Notice
    provides that redemption of such shares is subject to one or more conditions
    precedent until any such condition precedent shall not have been satisfied at
    the time or times and in the manner specified in such Notice of Redemption.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
    <I>Dividend Payments by Fund to Auction
    Agent. </I>The Fund shall pay to the Auction Agent, not later than
    12:00 Noon, New York City time, on each Dividend Payment Date for shares of a
    series of APS, an aggregate amount of same day funds, equal to the dividends
    to be paid to all Holders of shares of such series on such Dividend Payment
    Date.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
    <I>Auction Agent as Trustee of Dividend
    Payments by Fund. </I>All moneys paid to the Auction Agent for the
    payment of dividends (or for the payment of any Late Charge) shall be held in
    trust for the payment of such dividends (and any such Late Charge) by the
    Auction Agent for the benefit of the Holders specified in paragraph (h) of
    this Section 2. Any moneys paid to the Auction Agent in accordance with the
    foregoing but not applied by the Auction Agent to the payment of dividends
    (and any such Late Charge) will, to the extent permitted by law and upon
    written request be repaid to the Fund at the end of 90 days from the date on
    which such moneys were so to have been applied. Dividends Paid to Holders.
    Each dividend on shares of a series of APS shall be paid on the Dividend
    Payment Date therefor to the Holders thereof as their names appear on the
    record books of the Fund on the Business Day next preceding such Dividend
    Payment Date.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-16</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
    <I>Dividends Credited Against Earliest
    Accumulated but Unpaid Dividends. </I>Any dividend payment made on
    shares of a series of APS shall first be credited against the earliest
    accumulated but unpaid dividends due with respect to such shares. Dividends
    in arrears for any past Dividend Period may be declared and paid at any time,
    without reference to any regular Dividend Payment Date, to the Holders as
    their names appear on the record books of the Fund on such date, not
    exceeding 15 days preceding the payment date thereof, as may be fixed by the
    Board of Directors.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>3.<A NAME=B005></A></B></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Designation of Special Dividend Periods.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    <I>Length of and Preconditions for Special
    Dividend Period. </I>The Fund, at its option, may designate any
    succeeding Subsequent Dividend Period of shares of a series of APS as a
    Special Dividend Period consisting of a specified number of days evenly
    divisible by seven and not more than 1,820 (a &#147;Special Dividend Period&#148;); <I>provided, however, </I>that such Special
    Dividend Period may consist of a number of days not evenly divisible by seven
    if all shares of such series of APS are to be redeemed at the end of such
    Special Dividend Period. A designation of a Special Dividend Period shall be
    effective only if (A) notice thereof shall have been given in accordance with
    paragraph (b) and subparagraph (c)(i) of this Section 3, (B) an Auction for
    shares of such series shall have been held on the Auction Date immediately
    preceding the first day of such proposed Special Dividend Period and Sufficient
    Clearing Bids for shares of such series shall have existed in such Auction,
    and (C) if any Notice of Redemption shall have been mailed by the Fund
    pursuant to paragraph (c) of Section 8 of this Part I with respect to any
    shares of such series, the Fund has available liquid securities equal to the
    Redemption Price. In the event the Fund wishes to designate any succeeding
    Subsequent Dividend Period for shares of a series of APS as a Special
    Dividend Period consisting of more than 28 days, the Fund shall notify
    Moody&#146;s (if Moody&#146;s is then rating the APS) and S&amp;P (if S&amp;P is then
    rating such series) in advance of the commencement of such Subsequent
    Dividend Period that the Fund wishes to designate such Subsequent Dividend
    Period as a Special Dividend Period and shall provide Moody&#146;s (if Moody&#146;s is
    then rating the APS) and S&amp;P (if S&amp;P is then rating such series) with
    such documents as it may request.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP nowrap>
<p> </p>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    <I>Notice of Proposed Special Dividend
    Period. </I>If the Fund proposes to designate any succeeding
    Subsequent Dividend Period of shares of a series of APS as a Special Dividend
    Period pursuant to paragraph (a) of this Section 3, not less than 20 (or such
    lesser number of days as may be agreed to from time to time by the Auction
    Agent) nor more than 30 days prior to the date the Fund proposes to designate
    as the first day of such Special Dividend Period (which shall be such day
    that would otherwise be the first day of a Standard Dividend Period), notice
    shall be mailed by the Fund by first-class mail, postage prepaid, to the
    Holders of shares of such series. Each such notice shall state (A) that the
    Fund may exercise its option to designate a succeeding Subsequent Dividend
    Period of shares of such series as a Special Dividend Period, specifying the
    first day thereof and (B) that the Fund will, by 11:00 a.m., New York City
    time, on the second Business Day next preceding such date (or by such later
    time or date, or both, as may be agreed to by the Auction Agent) notify the
    Auction Agent of either (x) its determination, subject to certain conditions,
    to exercise such option, in which case the Fund shall specify the Special
    Dividend Period designated, or (y) its determination not to exercise such
    option.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    <I>Notice of Special Dividend Period. </I>No
    later than 11:00 a.m., New York City time, on the second Business Day next
    preceding the first day of any proposed Special Dividend Period of shares of
    a series of APS as to which notice has been given as set forth in paragraph
    (b) of this Section 3 (or such later time or date, or both, as may be agreed
    to by the Auction Agent), the Fund shall deliver to the Auction Agent either:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP nowrap>
  <p> </p>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    a notice (&#147;Notice of Special Dividend Period&#148;) stating (A) that the Fund has
    determined to designate the next Subsequent Dividend Period of shares of such
    series as a Special Dividend Period, specifying the same and the first day
    thereof, (B) the Auction Date immediately prior to the first day of such
    Special Dividend Period, (C) that such Special Dividend Period shall not
    commence if (1) an Auction for shares of such series shall not be held on
    such Auction Date for any reason, (2) an Auction for shares of such series
    shall be held on such Auction Date but Sufficient Clearing Bids for shares of
    such series shall not exist in such Auction, (3) full cumulative dividends
    and any amounts due with respect to redemptions have not been paid in full as
    of such Auction Date, or (4) the Fund does not receive confirmation from
    Moody&#146;s (if Moody&#146;s is then rating the APS) or S&amp;P (if S&amp;P is then
    rating the APS) that the proposed Special Dividend Period will not affect
    such rating agency&#146;s then-current</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-17</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="90%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>rating on
    the APS, (D) the scheduled Dividend Payment Dates for shares of such series
    during such Special Dividend Period and (E) the Special Redemption
    Provisions, if any, applicable to shares of such series in respect of such
    Special Dividend Period, such notice to be accompanied by a Preferred Stock
    Basic Maintenance Report showing that, as of the third Business Day next
    preceding such proposed Special Dividend Period, Moody&#146;s Eligible Assets (if
    Moody&#146;s is then rating the APS) and S&amp;P Eligible Assets (if S&amp;P is
    then rating such series) each have an aggregate Discounted Value at least
    equal to the Preferred Stock Basic Maintenance Amount as of such Business Day
    (assuming for purposes of the foregoing calculation that the Maximum Dividend
    Rate is the Maximum Dividend Rate on such Business Day as if such Business
    Day were the Auction Date for the proposed Special Dividend Period); or (ii)
    a notice stating that the Fund has determined not to exercise its option to
    designate a Special Dividend Period of shares of such series and that the
    next Subsequent Dividend Period of shares of such series shall be a Standard
    Dividend Period.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP nowrap>
 <p> </p>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    <I>Failure to Deliver Notice of Special
    Dividend Period. </I>If the Fund fails to deliver either of the
    notices described in subparagraphs (c)(i) or (c)(ii) of this Section 3 (and,
    in the case of the notice described in subparagraph (c)(i) of this Section 3,
    a Preferred Stock Basic Maintenance Report to the effect set forth in such
    subparagraph (if either Moody&#146;s or S&amp;P is then rating the series in
    question)) with respect to any designation of any proposed Special Dividend
    Period to the Auction Agent by 11:00 a.m., New York City time, on the second
    Business Day next preceding the first day of such proposed Special Dividend
    Period (or by such later time or date, or both, as may be agreed to by the
    Auction Agent), the Fund shall be deemed to have delivered a notice to the
    Auction Agent with respect to such Special Dividend Period to the effect set
    forth in sub-paragraph (c)(ii) of this Section 3. In the event the Fund
    delivers to the Auction Agent a notice described in subparagraph (c)(i) of
    this Section 3, it shall file a copy of such notice with the Secretary of the
    Fund, and the contents of such notice shall be binding on the Fund. In the
    event the Fund delivers to the Auction Agent a notice described in
    subparagraph (c)(ii) of this Section 3, the Fund will provide Moody&#146;s (if
    Moody&#146;s is then rating the series in question) and S&amp;P (if S&amp;P is
    then rating the series in question) a copy of such notice.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP nowrap>
<p> </p>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>4.</B><A NAME=B006></A></FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2><B>Voting Rights.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    <I>One Quarter of a Vote Per Share of APS. </I>Except
    as otherwise provided in the Charter or as otherwise required by law, (i)
    each Holder of shares of a series of APS shall be entitled to one quarter of
    a vote for each such share held by such Holder on each matter submitted to a
    vote of shareholders of the Fund, and (ii) the holders of shares of Preferred
    Stock, including shares of each series of APS, and the holders of shares of
    Common Stock shall vote together as a single class; provided, however, that,
    at any meeting of the shareholders of the Fund held for the election of
    directors, the holders of shares of Preferred Stock, including shares of each
    series of APS, represented in person or by proxy at said meeting, shall be
    entitled, as a class, to the exclusion of the holders of all other securities
    and classes of stock of the Fund, to elect a director to succeed any
    Preferred Director whose term is expiring or whose seat on the Board of
    Directors is vacant, each share of any series of APS entitling the holder
    thereof to one quarter of a vote. Subject to paragraph (b) of this Section 4,
    the holders of the outstanding shares of Common Stock shall be entitled, as a
    class, to the exclusion of the holders of all other securities and classes of
    stock of the Fund, to elect the balance of the directors.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    <I>Voting For Additional Directors.</I></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    <I>Voting Period. </I>Except as
    otherwise provided in the Charter or as otherwise required by law, during any
    period in which any one or more of the conditions described in clauses (A) or
    (B) of this subparagraph (b)(i) shall exist (such period being referred to
    herein as a &#147;Voting Period&#148;), the number of directors constituting the Board
    of Directors shall be automatically increased by the smallest number that,
    when added to the two directors elected exclusively by the holders of shares
    of Preferred Stock, including shares of each series of APS, would constitute
    a majority of the Board of Directors as so increased by such smallest number,
    and the holders of shares of Preferred Stock, including shares of each series
    of APS, shall be entitled, voting as a class on a one-vote-per-share basis
    (to the exclusion of the holders of all other securities and classes of stock
    of the Fund), to elect such smallest number of additional directors, together
    with the two directors that such holders are in any event entitled to elect.
    A Voting Period shall commence:</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-18</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    if at the close of business on any dividend payment date accumulated
    dividends (whether or not earned or declared) on any outstanding shares of
    any series of APS, equal to at least two full years&#146; dividends shall be due
    and unpaid and sufficient cash or specified securities shall not have been
    deposited with the Auction Agent for the payment of such accumulated
    dividends; or</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    if at any time holders of shares of Preferred Stock, including shares of each
    series of APS, are entitled under the Investment Company Act to elect a
    majority of the directors of the Fund.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
    the termination of a Voting Period, the voting rights described in this
    subparagraph (b)(i) shall cease, subject always, however, to the reverting of
    such voting rights in the holders of shares of Preferred Stock upon the
    further occurrence of any of the events described in this subparagraph
    (b)(i).</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    <I>Notice of Special Meeting. </I>As
    soon as practicable after the accrual of any right of the holders of shares
    of Preferred Stock, including shares of each series of APS, to elect
    additional directors as described in subparagraph (b)(i) of this Section 4,
    the Fund shall notify the Auction Agent and the Auction Agent shall call a
    special meeting of such holders, by mailing a notice of such special meeting
    to such holders, such meeting to be held not less than 10 nor more than 20
    days after the date of mailing of such notice. If the Fund fails to send such
    notice to the Auction Agent or if the Auction Agent does not call such a
    special meeting, it may be called by any such holder on like notice. The
    record date for determining the holders entitled to notice of and to vote at
    such special meeting shall be the close of business on the fifth Business Day
    preceding the day on which such notice is mailed. At any such special meeting
    and at each meeting of holders of shares of Preferred Stock, including shares
    of each series of APS, held during a Voting Period at which directors are to
    be elected, such holders, voting together as a class (to the exclusion of the
    holders of all other securities and classes of stock of the Fund), shall be
    entitled to elect the number of directors prescribed in subparagraph (b)(i)
    of this Section 4 on a one-vote-per-share basis.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    <I>Terms of Office of Existing Directors. </I>The
    terms of office of all persons who are directors of the Fund at the time of a
    special meeting of Holders of shares of each series of APS and other holders
    of shares of Preferred Stock to elect directors shall continue,
    notwithstanding the election at such meeting by the Holders and such other
    holders of the number of directors that they are entitled to elect, and the
    persons so elected by the Holders and such other holders, together with the
    two incumbent directors elected by the Holders and such other holders of
    Preferred Stock and the remaining incumbent directors elected by the holders
    of shares of Common Stock, shall constitute the duly elected directors of the
    Fund.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
    <I>Terms of Office of Certain Directors to
    Terminate Upon Termination of Voting Period. </I>Simultaneously with
    the termination of a Voting Period, the terms of office of the additional
    directors elected by the Holders of shares of each series of APS and other
    holders of shares of Preferred Stock pursuant to subparagraph (b)(i) of this
    Section 4 shall terminate, the remaining directors shall constitute the
    directors of the Fund and the voting rights of the Holders and such other
    holders to elect additional directors pursuant to subparagraph (b)(i) of this
    Section 4 shall cease, subject to the provisions of the last sentence of
    subparagraph (b)(i) of this Section 4.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    <I>Holders of APS to Vote on Certain Other
    Matters.</I></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    <I>Capitalization Matters. </I>So long
    as shares of any series of APS are outstanding, the Fund shall not, without
    the affirmative vote or consent of the Holders of at least two thirds of the
    shares of all series of Preferred Stock 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 shares ranking prior to the APS with
    respect to the payment of dividends or the distribution of assets on
    liquidation or (b) amend, alter or repeal the provisions of the Charter or
    these Articles Supplementary, whether by merger, consolidation or otherwise,
    so as to materially and adversely affect any right, preference, privilege or
    voting power of shares of any series of APS or the Holders thereof; provided,
    however, that any increase in the amount of the authorized APS 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
    Preferred Stock, in each case ranking on a parity with or junior to the APS,
    will not be deemed to materially and adversely affect such rights,
    preferences, privileges or voting</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-19</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>powers
    unless such issuance would cause the Fund not to satisfy the Investment
    Company Act Preferred Stock Asset Coverage or the Preferred Stock Basic
    Maintenance Amount.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    <I>Investment Company Act Matters. </I>Unless
    a higher percentage is provided for under the Charter, the affirmative vote
    of the holders of at least a &#147;majority of the outstanding Preferred Stock&#148; at
    the time, voting separately as one class, shall 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 Investment
    Company Act. For purposes of the foregoing, &#147;majority of the outstanding
    Preferred Stock&#148; shall mean (A) 67% or more of the shares of Preferred Stock
    present at a meeting, if the holders of more than 50% of the outstanding
    shares of Preferred Stock are present or represented by proxy or (B) more
    than 50% of the outstanding shares of Preferred Stock, whichever is less.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    <I>Separate Class Voting. </I>The
    class vote of Holders of shares of Preferred Stock, including APS, described
    in this paragraph (c) shall 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 APS, necessary to authorize the action in question.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
    <I>Voting by Series. </I>In addition
    to any vote of the requisite percentage of shares of Common Stock and shares
    of Preferred Stock, including APS, otherwise necessary to authorize any
    proposed action under the Charter or the Investment Company Act, on any
    matter on which 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 APS, 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. For purposes of the foregoing, &#147;majority of the
    outstanding shares of any series of Preferred Stock&#148; shall mean (A) 67% or
    more of the shares of such series of Preferred Stock present at a meeting, if
    the holders of more than 50% of the outstanding shares of such series are
    present or represented by proxy or (B) more than 50% of the outstanding
    shares of such series, whichever is less.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    <I>Voting Rights Set Forth Herein Are Sole
    Voting Rights. </I>Unless otherwise required by law, the Holders of
    shares of any series of APS shall not have any relative rights or preferences
    or other special rights other than those specifically set forth herein.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
    <I>No Preemptive Rights Or Cumulative Voting.
    </I>The Holders of shares of any series of APS shall have no
    preemptive rights or rights to cumulative voting.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
    <I>Voting For Directors Sole Remedy For
    Fund&#146;s Failure To Pay Dividends. </I>In the event that the Fund fails
    to pay any dividends on shares of any series of APS, the exclusive remedy of
    the Holders shall be the right to vote for directors pursuant to the
    provisions of this Section 4.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
    <I>Holders Entitled To Vote. </I>For
    purposes of determining any rights of the Holders to vote on any matter,
    whether such right is created by these Articles Supplementary, by the other
    provisions of the Charter, by statute or otherwise, no Holder shall be
    entitled to vote the shares of any series of APS and no shares of any series
    of APS shall be deemed to be &#147;outstanding&#148; 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, the
    requisite Notice of Redemption with respect to such shares shall have been
    mailed as provided in paragraph (c) of Section 8 of this Part I and the
    Redemption Price for the redemption of such shares shall have been deposited
    in trust with the Auction Agent for that purpose. No shares of any series of
    APS held by the Fund or any affiliate of the Fund (except for shares held by
    a Broker-Dealer that is an affiliate of the Fund for the account of its
    customers) shall have any voting rights or be deemed to be outstanding for
    voting or other purposes.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>5. </B><A NAME=B007></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Investment Company Act Preferred Stock Asset Coverage.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    Fund shall maintain, as of the last Business Day of each month in which any
    shares of any series of APS are outstanding, the Investment Company Act
    Preferred Stock Asset Coverage.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-20</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="95%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>6. </B><A NAME=B008></A></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>Preferred Stock Basic Maintenance Coverage.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    The Fund shall maintain, on each Valuation Date, (i) if Moody&#146;s is then
    rating the APS, Moody&#146;s Eligible Assets having an aggregate Moody&#146;s
    Discounted Value at least equal to the Moody&#146;s Preferred Stock Basic
    Maintenance Amount, (ii) if S&amp;P is then rating the APS, S&amp;P Eligible
    Assets having an aggregate S&amp;P Discounted Value at least equal to the
    S&amp;P Preferred Stock Basic Maintenance Amount and (iii) if any Substitute
    Rating Agency is then rating the APS, Substitute Rating Agency Eligible
    Assets having an aggregate Substitute Rating Agency Discounted Value at least
    equal to the Substituted Rating Agency Preferred Stock Basic Maintenance
    Amount, in each case applicable to each such Substitute Rating Agency.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    On or before 5:00 p.m., New York City time, on the third Business Day after
    each Valuation Date, the Fund shall complete and deliver to the Auction Agent
    and the Paying Agent a Preferred Stock Basic Maintenance Report, which will
    be deemed to have been delivered to the Auction Agent and the Paying Agent if
    the Auction Agent and the Paying Agent receive a copy or telecopy, telex or
    other electronic transcription thereof and on the same day the Fund mails to
    the Auction Agent and the Paying Agent for delivery on the next Business Day
    the full Preferred Stock Basic Maintenance Report. A failure by the Fund to
    deliver a Preferred Stock Basic Maintenance Report under this paragraph 6(b)
    without the prior consent of the Auction Agent and the Paying Agent shall be
    deemed to be delivery of a Preferred Stock Basic Maintenance Report
    indicating the Discounted Value for all assets of the Fund is less than the
    Preferred Stock Basic Maintenance Amount, as of the relevant Valuation Date.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    Within ten Business Days after the date of delivery to the Auction Agent and
    the Paying Agent of a Preferred Stock Basic Maintenance Report in accordance
    with paragraph 6(b) above relating to a Annual Valuation Date, the
    Independent Accountant will confirm in writing to the Auction Agent and the
    Paying Agent (i) the mathematical accuracy of the calculations reflected in
    such Report, (ii) that, in such Report, the Fund determined in accordance
    with these Articles Supplementary the assets of the Fund which constitute
    Eligible Assets at such Annual Valuation Date, (iii) that, in such Report,
    the Fund determined in accordance with these Articles Supplementary whether
    the Fund had, at such Annual Valuation Date, Eligible Assets of an aggregate
    Discounted Value at least equal to the Preferred Stock Basic Maintenance
    Amount, (iv) with respect to the S&amp;P rating on portfolio securities of
    the Fund, issuer name, issue size and coupon rate listed in such Report, that
    information has been traced and agrees with the information listed by
    Bloomberg, L.P. or an alternative reputable source (in the event such
    information does not agree or such information is not listed by Bloomberg,
    L.P. or an alternative reputable source, the Independent Accountant will
    inquire of S&amp;P what such information is, and provide a listing in their
    letter of such differences, if any), (v) with respect to the Moody&#146;s ratings
    on portfolio securities of the Fund, issuer name, issue size and coupon rate
    listed in such Report, that information has been traced and agrees with the
    information listed by Bloomberg, L.P. or an alternative reputable source (in
    the event such information does not agree or such information is not listed
    by Bloomberg, L.P. or an alternative reputable source, the Independent
    Accountant will inquire of Moody&#146;s what such information is, and provide a
    listing in their letter of such differences, if any), (vi) with respect to
    any Substitute Rating Agency&#146;s ratings on portfolio securities of the Fund,
    issuer name, issue size and coupon rate listed in such Report, that
    information has been traced and agrees with the information listed by
    Bloomberg, L.P. or an alternative reputable source (in the event such
    information does not agree or such information is not listed by Bloomberg,
    L.P. or an alternative reputable source, the Independent Accountant will
    inquire of such Substitute Rating Agency what such information is, and
    provide a listing in their letter of such differences, if any) and (vii) with
    respect to the bid or mean price (or such alternative permissible factor used
    in calculating the Market Value) provided by the custodian of the Fund&#146;s
    assets to the Fund for purposes of valuing securities in the Fund&#146;s
    portfolio, the Independent Accountant has traced the price used in such
    Report to the bid or mean price listed in the Fund&#146;s accounting records as of
    such date 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
  &#147;Accountant&#146;s Confirmation&#148;). If any Accountant&#146;s Confirmation delivered
    pursuant to this paragraph 6(c) shows that an error was made in the Preferred
    Stock Basic Maintenance Report for a Annual Valuation Date, or shows that a
    lower aggregate Discounted Value for the aggregate of all Eligible Assets of
    the Fund 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 Fund, and the Fund shall accordingly
    amend the Preferred</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-21</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="90%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>Stock Basic
    Maintenance Report to the Auction Agent and Paying Agent promptly following
    receipt by the Auction Agent and the Paying Agent of such Accountant&#146;s
    Confirmation.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>7.<A NAME=B009></A></B></FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2><B>Restrictions on Dividends and Other Distributions.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    For so long as any share of APS is outstanding, the Fund 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 APS as to dividends or upon liquidation) in respect
    of the Common Stock or any other stock of the Fund ranking junior to or on a
    parity with the shares of APS 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 Fund ranking junior to the
    shares of APS as to dividends and upon liquidation) or any other such parity
    stock (except by conversion into or exchange for stock of the Fund ranking
    junior to or on a parity with the shares of APS as to dividends and upon
    liquidation), unless (A) immediately after such transaction, the Preferred
    Stock Basic Maintenance Amount and the Investment Company Act Preferred Stock
    Asset Coverage would be achieved, (B) full cumulative dividends on shares of
    APS and shares of other Preferred Stock ranking on a parity with the APS with
    respect to the payment of dividends and the distribution of assets upon
    dissolution, liquidation or winding up of the affairs of the Fund 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) the Fund has redeemed the full number of shares of
    APS required to be redeemed by any provision for mandatory redemption
    contained herein.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    When dividends are not paid in full upon the shares of each series of APS
    through its most recent Dividend Payment Date or upon the shares of any other
    class or series of stock of the Fund ranking on a parity with the APS as to
    the payment of dividends through their most recent respective dividend
    payment dates, all dividends declared upon the shares of each series of APS
    and the shares of any other such class or series of stock ranking on a parity
    with the APS as to the payment of dividends shall be declared pro rata so
    that the amount of dividends declared per share on each series of APS and
    such other class or series of stock shall in all cases bear to each other the
    same ratio that accumulated dividends per share on such series of APS and
    such other class or series of stock bear to each other (for purposes of this
    sentence, the amount of dividends declared per share on each series of APS
    shall be based on the Applicable Dividend Rate for such share for the
    Dividend Periods during which dividends were not paid in full).</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>8.</B><A NAME=B010></A></FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2><B>Redemption.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    <I>Optional Redemption.</I></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    Subject to the provisions of subparagraph (v) of this paragraph (a), shares
    of any series of APS may be redeemed, at the option of the Fund, as a whole
    or from time to time in part, on any Dividend Payment Date for shares of such
    series, out of funds legally available therefor, at a redemption price per
    share equal to the sum of $25,000 plus an amount equal to accumulated but
    unpaid dividends thereon (whether or not earned or declared) to (but not
    including) the date fixed for redemption; <I>provided,
    however, </I>that (1) shares of a series of APS may not be redeemed in
    part if after such partial redemption fewer than 300 shares of such series
    remain outstanding; (2) shares of a series of APS are redeemable by the Fund
    during the Initial Dividend Period thereof only on the second Business Day
    next preceding the last Dividend Payment Date for such Initial Dividend
    Period; and (3) subject to sub-paragraph (ii) of this paragraph (a), the
    Notice of Special Dividend Period relating to a Special Dividend Period of
    shares of a series of APS, as delivered to the Auction Agent and filed with
    the Secretary of the Fund, may provide that shares of such series shall not
    be redeemable during the whole or any part of such Special Dividend Period
    (except as provided in subparagraph of this paragraph (a)) or shall be
    redeemable during the whole or any part of such Special Dividend Period only
    upon payment of such redemption premium or premiums as shall be specified in
    such notice (&#147;Special Redemption Provisions&#148;).</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-22</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="90%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    A Notice of Special Dividend Period relating to shares of a series of APS for
    a Special Dividend Period thereof may contain Special Redemption Provisions
    only if the Fund&#146;s Board of Directors, after consultation with the
    Broker-Dealer or Broker-Dealers for such Special Dividend Period of shares of
    such series, determines that such Special Redemption Provisions are in the
    best interest of the Fund.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    If fewer than all of the outstanding shares of a series of APS are to be
    redeemed pursuant to subparagraph (i) of this paragraph (a), the number of
    shares of such series to be redeemed shall be determined by the Board of
    Directors, and such shares shall be redeemed pro rata from the Holders of
    shares of such series in proportion to the number of shares of such series
    held by such Holders.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
    Subject to the provisions of subparagraph (v) of this paragraph (a), shares
    of any series of APS may be redeemed, at the option of the Fund, as a whole
    but not in part, out of funds legally available therefor, on the first day
    following any Dividend Period thereof included in a Special Dividend Period
    consisting of more than 364 days if, on the date of determination of the
    Applicable Dividend Rate for shares of such series for such Special Dividend
    Period, such Applicable Dividend Rate equaled or exceeded on such date of
    determination the Treasury Note Rate for such Special Dividend Period, at a
    redemption price per share equal to the sum of $25,000 plus an amount equal
    to accumulated but unpaid dividends thereon (whether or not earned or
    declared) to (but not including) the date fixed for redemption.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)
    The Fund may not on any date mail a Notice of Redemption pursuant to
    paragraph (c) of this Section 8 in respect of a redemption contemplated to be
    effected pursuant to this paragraph (a) unless on such date the Fund has
    available liquid securities having a value not less than the amount
    (including any applicable premium) due to Holders of any series of APS by
    reason of redemption of such shares or such redemption date, and (b) the
    Discounted Value of Moody&#146;s Eligible Assets (if Moody&#146;s is then rating the
    APS) and S&amp;P Eligible Assets (if S&amp;P is then rating the APS) each at
    least equals the Preferred Stock Basic Maintenance Amount, and would at least
    equal the Preferred Stock Basic Maintenance Amount immediately subsequent to
    such redemption if such redemption were to occur on such date.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    <I>Mandatory Redemption. </I>The Fund
    shall redeem, at a redemption price equal to $25,000 per share plus
    accumulated but unpaid dividends thereon (whether or not earned or declared)
    to (but not including) the date fixed by the Board of Directors for
    redemption, certain shares of APS, if the Fund fails to have either Moody&#146;s
    Eligible Assets or S&amp;P Eligible Assets with a Discounted Value greater
    than or equal to the Preferred Stock Basic Maintenance Amount or fails to
    maintain the Investment Company Act Preferred Stock Asset Coverage, in
    accordance with the requirements of the rating agency or agencies then rating
    the APS, and such failure is not cured on or before the Preferred Stock Basic
    Maintenance Cure Date or the Investment Company Act Cure Date, as the case
    may be. The number of shares of APS to be redeemed shall be equal to the
    lesser of (i) the minimum number of shares of APS, together with all other
    shares of Preferred Stock subject to redemption or retirement, the redemption
    of which, if deemed to have occurred immediately prior to the opening of
    business on the Cure Date, would have resulted in the Fund&#146;s having Moody&#146;s
    Eligible Assets and S&amp;P Eligible Assets with a Discounted Value greater
    than or equal to the Preferred Stock Basic Maintenance Amount or maintaining
    the Investment Company Act Preferred Stock Asset Coverage, as the case may
    be, on such Cure Date (<I>provided, however, </I>that
    if there is no such minimum number of shares of APS and other shares of
    Preferred Stock the redemption or retirement of which would have had such
    result, all shares of APS and other Preferred Stock then outstanding shall be
    redeemed), and (ii) the maximum number of shares of APS, together with all
    other shares of Preferred Stock subject to redemption or retirement, that can
    be redeemed out of funds expected to be legally available therefor in accordance
    with the Charter and applicable law. In determining the shares of APS
    required to be redeemed in accordance with the foregoing, the Fund shall
    allocate the number required to be redeemed to satisfy the Preferred Stock
    Basic Maintenance Amount or the Investment Company Act Preferred Stock Asset
    Coverage, as the case may be, pro rata among shares of APS and other
    Preferred Stock (and, then, pro rata among each series of APS) subject to
    redemption or retirement. The Fund shall effect such redemption on the date
    fixed by the Fund therefor, which date shall not be earlier than 20 days nor
    later than 22 days after such Cure Date, except that if the Fund does not
    have funds legally available for the redemption of all of the required number
    of shares of APS and other Preferred Stock which are subject to redemption or
    retirement or the Fund otherwise is unable to effect such redemption on or
    prior to 22 days after such Cure Date, the</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-23</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="95%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Fund shall
    redeem those shares of APS and other Preferred Stock which it was unable to
    redeem on the earliest practicable date on which it is able to effect such
    redemption. If fewer than all of the outstanding shares of a series of APS
    are to be redeemed pursuant to this paragraph (b), the number of shares of
    such series to be redeemed shall be redeemed pro rata from the Holders of
    shares of such series in proportion to the number of shares of such series
    held by such Holders.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    <I>Notice of Redemption. </I>If the
    Fund shall determine or be required to redeem shares of a series of APS
    pursuant to paragraph (a) or (b) of this Section 8, it shall mail a Notice of
    Redemption with respect to such redemption by first-class mail, postage
    prepaid, to (i) each Holder of the shares of such series to be redeemed, at such
    Holder&#146;s address as the same appears on the record books of the Fund on the
    record date established by the Board of Directors (ii) to Moody&#146;s, if Moody&#146;s
    is then rating the APS and to S&amp;P, if S&amp;P is then rating the APS.
    Such Notice of Redemption shall be so mailed not less than 20 nor more than
    45 days prior to the date fixed for redemption and (iii) to the Auction
    Agent. Each such Notice of Redemption shall state: (i) the redemption date;
    (ii) the number of shares of APS to be redeemed and the series thereof; (iii)
    the CUSIP number for shares of such series; (iv) the Redemption Price; (v)
    the place or places where the certificate(s) for such shares (properly
    endorsed or assigned for transfer, if the Board of Directors shall so require
    and the Notice of Redemption shall so state) are to be surrendered for
    payment of the Redemption Price; (vi) that dividends on the shares to be
    redeemed will cease to accumulate on such redemption date; and (vii) that the
    holders of any shares of a series of APS being so redeemed shall not
    participate in the Auction, if any, immediately preceding the redemption
    date; and (viii) the provisions of this Section 8 under which such redemption
    is made. If fewer than all shares of a series of APS held by any Holder are
    to be redeemed, the Notice of Redemption mailed to such Holder shall also
    specify the number of shares of such series to be redeemed from such Holder.
    The Fund may provide in any Notice of Redemption relating to a redemption
    contemplated to be effected pursuant to paragraph (a) of this Section 8 that
    such redemption is subject to one or more conditions precedent and that the
    Fund shall not be required to effect such redemption unless each such
    condition shall have been satisfied at the time or times and in the manner specified
    in such Notice of Redemption.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    <I>No Redemption Under Certain Circumstances.
    </I>Notwithstanding the provisions of paragraphs (a) or (b) of this
    Section 8, if any dividends on shares of a series of APS (whether or not
    earned or declared) are in arrears, no shares of such series shall be
    redeemed unless all outstanding shares of such series are simultaneously
    redeemed, and the Fund shall not purchase or otherwise acquire any shares of
    such series; <I>provided, however, </I>that
    the foregoing shall not prevent the purchase or acquisition of all
    outstanding shares of such series pursuant to the successful completion of an
    otherwise lawful purchase or exchange offer made on the same terms to, and
    accepted by, Holders of all outstanding shares of such series.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
    <I>Absence of Funds Available for Redemption.
    </I>To the extent that any redemption for which Notice of Redemption
    has been mailed is not made by reason of the absence of legally available
    funds therefor in accordance with the Charter and applicable law, such
    redemption shall be made as soon as practicable to the extent such funds
    become available. Failure to redeem shares of APS shall be deemed to exist at
    any time after the date specified for redemption in a Notice of Redemption
    when the Fund shall have failed, for any reason whatsoever, to deposit in
    trust with the Auction Agent the Redemption Price with respect to any shares
    for which such Notice of Redemption has been mailed; <I>provided, however, </I>that the foregoing
    shall not apply in the case of the Fund&#146;s failure to deposit in trust with
    the Auction Agent the Redemption Price with respect to any shares where (1)
    the Notice of Redemption relating to such redemption provided that such
    redemption was subject to one or more conditions precedent and (2) any such
    condition precedent shall not have been satisfied at the time or times and in
    the manner specified in such Notice of Redemption. Notwithstanding the fact
    that the Fund may not have redeemed shares of APS for which a Notice of Redemption
    has been mailed, dividends may be declared and paid on shares of APS and
    shall include those shares of APS for which a Notice of Redemption has been
    mailed.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
    <I>Auction Agent as Director of Redemption
    Payments by Fund. </I>All moneys paid to the Auction Agent for payment
    of the Redemption Price of shares of APS called for redemption shall be held
    in trust by the Auction Agent for the benefit of Holders of shares so to be
    redeemed.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
    <I>Shares for Which Notice of Redemption Has Been
    Given Are no Longer Outstanding. </I>Provided a Notice of Redemption
    has been mailed pursuant to paragraph (c) of this Section 8, upon the deposit
    with the</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-24</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px" >
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="95%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>Auction
    Agent (on the Business Day next preceding the date fixed for redemption
    thereby, in funds available on the next Business Day in The City of New York,
    New York) of funds sufficient to redeem the shares of APS that are the
    subject of such notice, dividends on such shares shall cease to accumulate
    and such shares shall no longer be deemed to be outstanding for any purpose,
    and all rights of the Holders of the shares so called for redemption shall
    cease and terminate, except the right of such Holders to receive the
    Redemption Price, but without any interest or other additional amount, except
    as provided in subparagraph (e)(i) of Section 2 of this Part I. Upon
    surrender in accordance with the Notice of Redemption of the certificates for
    any shares so redeemed (properly endorsed or assigned for transfer, if the
    Board of Directors shall so require and the Notice of Redemption shall so
    state), the Redemption Price shall be paid by the Auction Agent to the
    Holders of shares of APS subject to redemption. In the case that fewer than
    all of the shares represented by any such certificate are redeemed, a new
    certificate shall be issued, representing the unredeemed shares, without cost
    to the Holder thereof. The Fund shall be entitled to receive from the Auction
    Agent, promptly after the date fixed for redemption, any cash deposited with
    the Auction Agent in excess of (i) the aggregate Redemption Price of the
    shares of APS called for redemption on such date and (ii) all other amounts
    to which Holders of shares of APS called for redemption may be entitled. Any
    funds so deposited that are unclaimed at the end of 90 days from such
    redemption date shall, to the extent permitted by law, be repaid to the Fund,
    after which time the Holders of shares of APS so called for redemption may
    look only to the Fund for payment of the Redemption Price and all other amounts
    to which they may be entitled.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
    <I>Compliance with Applicable Law. </I>In
    effecting any redemption pursuant to this Section 8, the Fund shall use its
    best efforts to comply with all applicable conditions precedent to effecting
    such redemption under the Investment Company Act and any applicable Maryland
    law, but shall effect no redemption except in accordance with the Investment
    Company Act and any applicable Maryland law.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    <I>Only Whole Shares of APS May Be Redeemed. </I>In
    the case of any redemption pursuant to this Section 8, only whole shares of
    APS shall be redeemed, and in the event that any provision of the Charter
    would require redemption of a fractional share, the Auction Agent shall be
    authorized to round up so that only whole shares are redeemed.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
    <I>Modification of Redemption Procedures. </I>Notwithstanding
    any of the foregoing provisions of this Section 8, the Fund may modify any or
    all of the requirements relating to the Notice of Redemption provided that
    (i) any such modification does not materially and adversely affect any Holder
    of shares of the relevant series of APS, and (ii) the Fund receives written
    notice from Moody&#146;s (if Moody&#146;s is then rating the APS) and S&amp;P (if
    S&amp;P is then rating the APS) that such modification would not impair the
    ratings assigned by Moody&#146;s and S&amp;P to shares of APS.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>9.</B><A NAME=B011></A></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>Liquidation Rights.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    <I>Distributions Upon Liquidation. </I>Upon
    the dissolution, liquidation or winding up of the affairs of the Fund,
    whether voluntary or involuntary, the Holders of shares of all series of APS
    then outstanding shall be entitled to receive and to be paid out of the
    assets of the Fund available for distribution to its shareholders, before any
    payment or distribution shall be made on the Common Stock or on any other
    class of shares of the Fund ranking junior to the APS upon dissolution,
    liquidation or winding up, an amount equal to the Liquidation Preference with
    respect to such shares plus an amount equal to all dividends thereon (whether
    or not earned or declared) accumulated but unpaid to (but not including) the
    date of final distribution in same day funds in connection with the
    liquidation of the Fund. After the payment to the Holders of shares of all
    series of APS of the full preferential amounts provided for in this paragraph
    (a), the Holders of shares of any series of APS as such shall have no right
    or claim to any of the remaining assets of the Fund.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    <I>Pro Rata Distributions. </I>In the
    event the assets of the Fund available for distribution to the Holders of
    shares of all series of APS upon any dissolution, liquidation, or winding up
    of the affairs of the Fund, whether voluntary or involuntary, shall be
    insufficient to pay in full all amounts to which such Holders are entitled
    pursuant to paragraph (a) of this Section 9, no such distribution shall be
    made on account of any shares of any other class or series of Preferred Stock
    ranking on a parity with the APS with respect to the distribution of assets
    upon such dissolution, liquidation or winding up, unless proportionate
    distributive amounts shall be paid on account of the shares of all series of
    APS, ratably, in proportion to the full</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-25</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="95%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>distributable
    amounts for which holders of all such parity shares are respectively entitled
    upon such dissolution, liquidation or winding up.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    <I>Rights of Junior Shares. </I>Subject
    to the rights of the holders of shares of any series or class or classes of
    shares ranking on a parity with the APS with respect to the distribution of
    assets upon dissolution, liquidation or winding up of the affairs of the
    Fund, after payment shall have been made in full to the Holders of shares of
    all series of APS as provided in paragraph (a) of this Section 9, but not
    prior thereto, any other series or class or classes of shares ranking junior
    to the APS with respect to the distribution of assets upon dissolution,
    liquidation or winding up of the affairs of the Fund shall, subject to the
    respective terms and provisions (if any) applying thereto, be entitled to
    receive any and all assets remaining to be paid or distributed, and the
    Holders of shares of any series of APS shall not be entitled to share
    therein.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    <I>Certain Events Not Constituting
    Liquidation. </I>Neither the sale of all or substantially all the
    property or business of the Fund, nor the merger or consolidation of the Fund
    into or with any business trust or corporation nor the merger or consolidation
    of any business trust or corporation into or with the Fund shall be a
    dissolution, liquidation or winding up, whether voluntary or involuntary, for
    the purposes of this Section 9.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>10.<A NAME=B012></A></B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>Certain Rating Agency Requirements and Restrictions.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    For so long as any shares of APS are outstanding and Moody&#146;s is then rating
    the APS, the Fund will perform all actions required by the Moody&#146;s Guidelines
    and will not engage in any transactions proscribed by restrictions set forth
    in the Moody&#146;s Guidelines, unless it has received written confirmation from
    Moody&#146;s that such noncompliance would not adversely affect the rating then
    assigned by Moody&#146;s to the APS.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    For so long as any shares of APS are outstanding and S&amp;P is then rating
    the APS, the Fund will perform all actions required by the S&amp;P Guidelines
    and will not engage in any transactions proscribed by restrictions set forth
    in the S&amp;P Guidelines, unless it has received written confirmation from
    S&amp;P that such noncompliance would not adversely affect the rating then
    assigned by S&amp;P to the APS.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    For so long as any shares of APS are outstanding and any Substitute Rating
    Agency is then rating the APS, the Fund will perform all actions required by
    the Substituted Rating Agency Guidelines relating to such Substitute Rating
    Agency and will not engage in any transactions proscribed by restrictions set
    forth in the Substituted Rating Agency Guidelines relating to such Substitute
    Rating Agency, unless it has received written confirmation from such
    Substituted Rating Agency that such noncompliance would not adversely affect
    the rating then assigned by such Substituted Rating Agency to the APS.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>11.<A NAME=B013></A></B></FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>Miscellaneous.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    <I>No Fractional Shares. No fractional shares
    of APS shall be issued.</I></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    <I>Status of Shares of APS Redeemed,
    Exchanged or Otherwise Acquired by the Fund. </I>Shares of APS which
    are redeemed, exchanged or otherwise acquired by the Fund shall return to the
    status of authorized and unissued shares of Preferred Stock without
    designation as to series.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    <I>Board May Resolve Ambiguities. </I>To
    the extent permitted by applicable law, the Board of Directors may interpret
    or adjust the provisions of these Articles Supplementary to resolve any
    inconsistency or ambiguity or to remedy any formal defect, and may amend
    these Articles Supplementary with respect to any series of APS prior to the
    issuance of shares of such series.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    <I>Headings Not Determinative. </I>The
    headings contained in these Articles Supplementary are for convenience of
    reference only and shall not affect the meaning or interpretation of these
    Articles Supplementary. </FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
    <I>Notices. </I>All notices or
    communications, unless otherwise specified in the Bylaws of the Fund or these
    Articles Supplementary, shall be sufficiently given if in writing and
    delivered in person or mailed by first-class mail, postage prepaid.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-26</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>

<P ALIGN=CENTER><A NAME=B014></A><FONT SIZE=2><B>PART II.</B></FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>1.</B><A NAME=B015></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Orders.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    <I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to the Submission Deadline on each
    Auction Date for shares of a series of APS:</I></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    each Beneficial Owner of shares of such series may submit to its
    Broker-Dealer by telephone or otherwise information as to:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    the number of Outstanding shares, if any, of such series held by such
    Beneficial Owner which such Beneficial Owner desires to continue to hold
    without regard to the Applicable Dividend Rate for shares of such series for
    the next Subsequent Dividend Period of such shares;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    the number of Outstanding shares, if any, of such series held by such
    Beneficial Owner which such Beneficial Owner offers to sell if the Applicable
    Dividend Rate for shares of such series for the next Subsequent Dividend
    Period of shares of such series shall be less than the rate per annum
    specified by such Beneficial Owner; and/or</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)
    the number of Outstanding shares, if any, of such series held by such
    Beneficial Owner which such Beneficial Owner offers to sell without regard to
    the Applicable Dividend Rate for shares of such series for the next
    Subsequent Dividend Period of shares of such series; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    one or more Broker-Dealers, using lists of Potential Beneficial Owners, shall
    in good faith for the purpose of conducting a competitive Auction in a
    commercially reasonable manner, contact Potential Beneficial Owners (by
    telephone or otherwise), including Persons that are not Beneficial Owners, on
    such lists to determine the number of shares, if any, of such series which each
    such Potential Beneficial Owner offers to purchase if the Applicable Dividend
    Rate for shares of such series for the next Subsequent Dividend Period of
    shares of such series shall not be less than the rate per annum specified by
    such Potential Beneficial Owner.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
  the purposes hereof, the communication by a Beneficial Owner or Potential
  Beneficial Owner to a Broker-Dealer, or by a Broker-Dealer to the Auction
  Agent, of information referred to in clause (i)(A), (i)(B), (i)(C) or (ii) of
  this paragraph (a) is hereinafter referred to as an &#147;Order&#148; and collectively as
&#147;Orders&#148; and each Beneficial Owner and each Potential Beneficial Owner placing
  an Order with a Broker-Dealer, and such Broker-Dealer placing an order with the
  Auction Agent, is hereinafter referred to as a &#147;Bidder&#148; and collectively as
&#147;Bidders&#148;; an Order containing the information referred to in clause (i)(A) of
  this paragraph (a) is hereinafter referred to as a &#147;Hold Order&#148; and
  collectively as &#147;Hold Orders&#148;; an Order containing the information referred to
  in clause (i)(B) or (ii) of this paragraph (a) is hereinafter referred to as a
&#147;Bid&#148; and collectively as &#147;Bids&#148;; and an Order containing the information
  referred to in clause (i)(C) of this paragraph (a) is hereinafter referred to as
a &#147;Sell Order&#148; and collectively as &#147;Sell Orders.&#148;</FONT></P>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    A Bid by a Beneficial Owner or an Existing Holder of shares of a series of
    APS subject to an Auction on any Auction Date shall constitute an irrevocable
    offer to sell:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    the number of Outstanding shares of such series specified in such Bid if the
    Applicable Dividend Rate for shares of such series determined on such Auction
    Date shall be less than the rate specified therein;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    such number or a lesser number of Outstanding shares of such series to be
    determined as set forth in clause (iv) of paragraph (a) of this Part II if
    the Applicable Dividend Rate for shares of such series determined on such
    Auction Date shall be equal to the rate specified therein; or</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)
    the number of Outstanding shares of such series specified in such Bid if the
    rate specified therein shall be higher than the Maximum Dividend Rate for
    shares of such series, or such number or a lesser number of Outstanding shares
    of such series to be determined as set forth in clause (iii) of paragraph (b)
    of Section 4 of this Part II if the rate specified therein shall be higher
    than the Maximum Dividend Rate for shares of such series and Sufficient
    Clearing Bids for shares of such series do not exist.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-27</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="95%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    A Sell Order by a Beneficial Owner or an Existing Holder of shares of a
    series of APS subject to an Auction on any Auction Date shall constitute an
    irrevocable offer to sell:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    the number of Outstanding shares of such series specified in such Sell Order;
    or</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    such number or a lesser number of Outstanding shares of such series as set
    forth in clause (iii) of paragraph (b) of Section 4 of this Part II if Sufficient
    Clearing Bids for shares of such series do not exist; <I>provided, however, </I>that a Broker-Dealer
    that is an Existing Holder with respect to shares of a series of APS shall
    not be liable to any Person for failing to sell such shares pursuant to a
    Sell Order described in the proviso to paragraph (c) of Section 2 of this
    Part II if (1) such shares were transferred by the Beneficial Owner thereof
    without compliance by such Beneficial Owner or its transferee Broker-Dealer
    (or other transferee person, if permitted by the Fund) with the provisions of
    Section 6 of this Part II or (2) such Broker-Dealer has informed the Auction
    Agent pursuant to the terms of its Broker-Dealer Agreement that, according to
    such Broker-Dealer&#146;s records, such Broker-Dealer believes it is not the
    Existing Holder of such shares.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    A Bid by a Potential Beneficial Owner or a Potential Holder of shares of a
    series of APS subject to an Auction on any Auction Date shall constitute an
    irrevocable offer to purchase:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    the number of Outstanding shares of such series specified in such Bid if the
    Applicable Dividend Rate for shares of such series determined on such Auction
    Date shall be higher than the rate specified therein; or</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    such number or a lesser number of Outstanding shares of such series as set
    forth in clause (v) of paragraph (a) of Section 4 of this Part II if the
    Applicable Dividend Rate for shares of such series determined on such Auction
    Date shall be equal to the rate specified therein. </FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    No Order for any number of shares of APS other than whole shares shall be
    valid.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    A Bid by a Potential Beneficial Owner or a Potential Holder specifying a rate
    higher than the Maximum Dividend Rate for shares of APS on the Auction Date
    will not be accepted.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>2.</B><A NAME=B016></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Submission of Orders by Broker-Dealers to Auction Agent.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    Each Broker-Dealer shall submit in writing to the Auction Agent prior to the
    Submission Deadline on each Auction Date all Orders for shares of APS of a
    series subject to an Auction on such Auction Date obtained by such
    Broker-Dealer, designating itself (unless otherwise permitted by the Fund) as
    an Existing Holder in respect of shares subject to Orders submitted or deemed
    submitted to it by Beneficial Owners and as a Potential Holder in respect of
    shares subject to Orders submitted to it by Potential Beneficial Owners, and
    shall specify with respect to each Order for such shares:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    the name of the Bidder placing such Order (which shall be the Broker-Dealer
    unless otherwise permitted by the Fund);</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    the aggregate number of shares of such series that are the subject of such
    Order;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    to the extent that such Bidder is an Existing Holder of shares of such
    series:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    the number of shares, if any, of such series subject to any Hold Order of
    such Existing Holder;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    the number of shares, if any, of such series subject to any Bid of such
    Existing Holder and the rate specified in such Bid; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)
    the number of shares, if any, of such series subject to any Sell Order of
    such Existing Holder; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
    to the extent such Bidder is a Potential Holder of shares of such series, the
    rate and number of shares of such series specified in such Potential Holder&#146;s
    Bid.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    If any rate specified in any Bid contains more than three figures to the
    right of the decimal point, the Auction Agent shall round such rate up to the
    next highest one thousandth (.001) of 1%.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-28</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    If an Order or Orders covering all of the outstanding shares of a series of
    APS held by any Existing Holder is not submitted to the Auction Agent prior
    to the Submission Deadline, the Auction Agent shall deem a Hold Order to have
    been submitted by or on behalf of such Existing Holder covering the number of
    Outstanding shares of such series held by such Existing Holder and not
    subject to Orders submitted to the Auction Agent; <I>provided, however, </I>that if an Order or Orders covering all
    of the Outstanding shares of such series held by any Existing Holder is not
    submitted to the Auction Agent prior to the Submission Deadline for an
    Auction relating to a Special Dividend Period consisting of more than 28
    days, the Auction Agent shall deem a Sell order to have been submitted by or
    on behalf of such Existing Holder covering the number of outstanding shares
    of such series held by such Existing Holder and not subject to Orders
    submitted to the Auction Agent.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    If one or more Orders of an Existing Holder is submitted to the Auction Agent
    covering in the aggregate more than the number of Outstanding shares of a
    series of APS subject to an Auction held by such Existing Holder, such Orders
    shall be considered valid in the following order of priority:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    all Hold Orders for shares of such series shall be considered valid, but only
    up to and including in the aggregate the number of Outstanding shares of such
    series held by such Existing Holder, and if the number of shares of such
    series subject to such Hold Orders exceeds the number of Outstanding shares
    of such series held by such Existing Holder, the number of shares subject to
    each such Hold Order shall be reduced pro rata to cover the number of
    Outstanding shares of such series held by such Existing Holder;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    any Bid for shares of such series shall be considered valid up to and
    including the excess of the number of Outstanding shares of such series held
    by such Existing Holder over the number of shares of such series subject to
    any Hold Orders referred to in clause (i) above;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    subject to subclause (A), if more than one Bid of an Existing Holder for
    shares of such series is submitted to the Auction Agent with the same rate
    and the number of Outstanding shares of such series subject to such Bids is
    greater than such excess, such Bids shall be considered valid up to and
    including the amount of such excess, and the number of shares of such series
    subject to each Bid with the same rate shall be reduced pro rata to cover the
    number of shares of such series equal to such excess;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)
    subject to subclauses (A) and (B), if more than one Bid of an Existing Holder
    for shares of such series is submitted to the Auction Agent with different
    rates, such Bids shall be considered valid in the ascending order of their
    respective rates up to and including the amount of such excess; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)
    in any such event, the number, if any, of such Outstanding shares of such
    series subject to any portion of Bids considered not valid in whole or in
    part under this clause (ii) shall be treated as the subject of a Bid for
    shares of such series by or on behalf of a Potential Holder at the rate
    therein specified; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    all Sell Orders for shares of such series shall be considered valid up to and
    including the excess of the number of Outstanding shares of such series held
    by such Existing Holder over the sum of shares of such series subject to
    valid Hold Orders referred to in clause (i) above and valid Bids referred to
    in clause (ii) above.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
    If more than one Bid for one or more shares of a series of APS is submitted
    to the Auction Agent by or on behalf of any Potential Holder, each such Bid
    submitted shall be a separate Bid with the rate and number of shares therein
    specified.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) Any
    Order submitted by a Beneficial Owner or a Potential Beneficial Owner to its
    Broker-Dealer, or by a Broker-Dealer to the Auction Agent, prior to the
    Submission Deadline on any Auction Date, shall be irrevocable.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>3.</B><A NAME=B017></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Determination of Sufficient Clearing Bids, Winning Bids Rate and
    Applicable Dividend Rate.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    Not earlier than the Submission Deadline on each Auction Date for shares of a
    series of APS, the Auction Agent shall assemble all valid Orders submitted or
    deemed submitted to it by the Broker-Dealers in</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-29</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
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  <P>&nbsp;</P>
  </TD>
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  <P>&nbsp;</P>
  </TD>
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  <P>&nbsp;</P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>respect of
    shares of such series (each such Order as submitted or deemed submitted by a
    Broker-Dealer being hereinafter referred to individually as a &#147;Submitted Hold
    Order,&#148; a &#147;Submitted Bid&#148; or a &#147;Submitted Sell Order,&#148; as the case may be, or
    as a &#147;Submitted Order&#148; and collectively as &#147;Submitted Hold Orders,&#148;
  &#147;Submitted Bids&#148; or &#147;Submitted Sell Orders,&#148; as the case may be, or as
  &#147;Submitted Orders&#148;) and shall determine for such series:</FONT></P>
  </TD>
  </TR>
  <TR>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    the excess of the number of Outstanding shares of such series over the number
    of Outstanding shares of such series subject to Submitted Hold Orders (such
    excess being hereinafter referred to as the &#147;Available APS&#148; of such series);</FONT></P>
  </TD>
  </TR>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    from the Submitted Orders for shares of such series whether:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    the number of Outstanding shares of such series subject to Submitted Bids of
    Potential Holders specifying one or more rates equal to or lower than the
    Maximum Dividend Rate for shares of such series exceeds or is equal to the
    sum of:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    the number of Outstanding shares of such series subject to Submitted Bids of
    Existing Holders specifying one or more rates higher than the Maximum
    Dividend Rate for shares of such series; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)
    the number of Outstanding shares of such series subject to Submitted Sell
    Orders in the event such excess or such equality exists (other than because
    the number of shares of such series in subclauses (B) and (C) above is zero
    because all of the Outstanding shares of such series are subject to Submitted
    Hold Orders), such Submitted Bids in subclause (A) above being hereinafter
    referred to collectively as &#147;Sufficient Clearing Bids&#148; for shares of such
    series); and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    if Sufficient Clearing Bids for shares of such series exist, the lowest rate
    specified in such Submitted Bids (the &#147;Winning Bid Rate&#148; for shares of such
    series) which if:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)
    (I) each such Submitted Bid of Existing Holders specifying such lowest rate
    and (II) all other such Submitted Bids of Existing Holders specifying lower
    rates were rejected, thus entitling such Existing Holders to continue to hold
    the shares of such series that are subject to such Submitted Bids; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)
    (I) each such Submitted Bid of Potential Holders specifying such lowest rate
    and (II) all other such Submitted Bids of Potential Holders specifying lower
    rates were accepted;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>would result
    in such Existing Holders described in subclause (A) above continuing to hold
    an aggregate number of Outstanding shares of such series which, when added to
    the number of Outstanding shares of such series to be purchased by such
    Potential Holders described in subclause (B) above, would equal not less than
    the Available APS of such series.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
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  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    Promptly after the Auction Agent has made the determinations pursuant to
    paragraph (a) of this Section 3, the Auction Agent shall advise the Fund of
    the Maximum Dividend Rate for shares of the series of APS for which an
    Auction is being held on the Auction Date and, based on such determination
    the Applicable Dividend Rate for shares of such series for the next
    Subsequent Dividend Period thereof as follows:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    if Sufficient Clearing Bids for shares of such series exist, that the
    Applicable Dividend Rate for all shares of such series for the next
    Subsequent Dividend Period thereof shall be equal to the Winning Bid Rate for
    shares of such series so determined;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    if sufficient Clearing Bids for shares of such series do not exist (other
    than because all of the Outstanding shares of such series are subject to
    Submitted Hold Orders), that the Applicable Dividend Rate for all shares of
    such series for the next Subsequent Dividend Period thereof shall be equal to
    the Maximum Dividend Rate for shares of such series; or</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    if all of the Outstanding shares of such series are subject to Submitted Hold
    Orders, that the Applicable Dividend Rate for all shares of such series for
    the next Subsequent Dividend Period thereof shall be the All Hold Rate.</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-30</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>4.</B><A NAME=B018></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Acceptance and Rejection of Submitted Bids and Submitted Sell Orders
    and Allocation of Shares.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Existing
    Holders shall continue to hold the shares of APS that are subject to
    Submitted Hold Orders, and, based on the determinations made pursuant to
    paragraph (a) of Section 3 of this Part II, the Submitted Bids and Submitted
    Sell Orders shall be accepted or rejected by the Auction Agent and the
    Auction Agent shall take such other action as set forth below:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    If Sufficient Clearing Bids for shares of a series of APS have been made, all
    Submitted Sell Orders with respect to shares of such series shall be accepted
    and, subject to the provisions of paragraphs (d) and (e) of this Section 4, Submitted
    Bids with respect to shares of such series shall be accepted or rejected as
    follows in the following order of priority and all other Submitted Bids with
    respect to shares of such series shall be rejected:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    Existing Holders&#146; Submitted Bids for shares of such series specifying any
    rate that is higher than the Winning Bid Rate for shares of such series shall
    be accepted, thus requiring each such Existing Holder to sell the shares of
    APS subject to such Submitted Bids;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    Existing Holders&#146; Submitted Bids for shares of such series specifying any
    rate that is lower than the Winning Bid Rate for shares of such series shall
    be rejected, thus entitling each such Existing Holder to continue to hold the
    shares of APS subject to such Submitted Bids;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    Potential Holders&#146; Submitted Bids for shares of such series specifying any
    rate that is lower than the Winning Bid Rate for shares of such series shall
    be accepted;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
    each Existing Holder&#146;s Submitted Bid for shares of such series specifying a
    rate that is equal to the Winning Bid Rate for shares of such series shall be
    rejected, thus entitling such Existing Holder to continue to hold the shares
    of APS subject to such Submitted Bid, unless the number of Outstanding shares
    of APS subject to all such Submitted Bids shall be greater than the number of
    shares of APS (&#147;remaining shares&#148;) in the excess of the Available APS of such
    series over the number of shares of APS subject to Submitted Bids described
    in clauses (ii) and (iii) of this paragraph (a), in which event such
    Submitted Bid of such Existing Holder shall be rejected in part, and such
    Existing Holder shall be entitled to continue to hold shares of APS subject
    to such Submitted Bid, but only in an amount equal to the number of shares of
    APS of such series obtained by multiplying the number of remaining shares by
    a fraction, the numerator of which shall be the number of Outstanding shares
    of APS held by such Existing Holder subject to such Submitted Bid and the
    denominator of which shall be the aggregate number of Outstanding shares of
    APS subject to such Submitted Bids made by all such Existing Holders that
    specified a rate equal to the Winning Bid Rate for shares of such series; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)
    each Potential Holder&#146;s Submitted Bid for shares of such series specifying a
    rate that is equal to the Winning Bid Rate for shares of such series shall be
    accepted but only in an amount equal to the number of shares of such series
    obtained by multiplying the number of shares in the excess of the Available
    APS of such series over the number of shares of APS subject to Submitted Bids
    described in clauses (ii) through (iv) of this paragraph (a) by a fraction,
    the numerator of which shall be the number of Outstanding shares of APS
    subject to such Submitted Bid and the denominator of which shall be the
    aggregate number of Outstanding shares of APS subject to such Submitted Bids
    made by all such Potential Holders that specified a rate equal to the Winning
    Bid Rate for shares of such series.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    If Sufficient Clearing Bids for shares of a series of APS have not been made
    (other than because all of the Outstanding shares of such series are subject
    to Submitted Hold Orders), subject to the provisions of paragraph (d) of this
    Section 4, Submitted Orders for shares of such series shall be accepted or
    rejected as follows in the following order of priority and all other
    Submitted Bids for shares of such series shall be rejected:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    Existing Holders&#146; Submitted Bids for shares of such series specifying any
    rate that is equal to or lower than the Maximum Dividend Rate for shares of
    such series shall be rejected, thus entitling such Existing Holders to
    continue to hold the shares of APS subject to such Submitted Bids;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    Potential Holders&#146; Submitted Bids for shares of such series specifying any
    rate that is equal to or lower than the Maximum Dividend Rate for shares of
    such series shall be accepted; and</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-31</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    Each Existing Holder&#146;s Submitted Bid for shares of such series specifying any
    rate that is higher than the Maximum Dividend Rate for shares of such series
    and the Submitted Sell Orders for shares of such series of each Existing
    Holder shall be accepted, thus entitling each Existing Holder that submitted
    or on whose behalf was submitted any such Submitted Bid or Submitted Sell
    Order to sell the shares of such series subject to such Submitted Bid or
    Submitted Sell Order, but in both cases only in an amount equal to the number
    of shares of such series obtained by multiplying the number of shares of such
    series subject to Submitted Bids described in clause (ii) of this paragraph
    (b) by a fraction, the numerator of which shall be the number of Outstanding
    shares of such series held by such Existing Holder subject to such Submitted
    Bid or Submitted Sell Order and the denominator of which shall be the
    aggregate number of Outstanding shares of such series subject to all such
    Submitted Bids and Submitted Sell Orders.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
    If all of the Outstanding shares of a series of APS are subject to Submitted
    Hold Orders, all Submitted Bids for shares of such series shall be rejected.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
    If, as a result of the procedures described in clause (iv) or (v) of
    paragraph (a) or clause (iii) of paragraph (b) of this Section 4, any
    Existing Holder would be entitled or required to sell, or any Potential
    Holder would be entitled or required to purchase, a fraction of a share of a
    series of APS on any Auction Date, the Auction Agent shall, in such manner as
    it shall determine in its sole discretion, round up or down the number of
    shares of such series of APS to be purchased or sold by any Existing Holder
    or Potential Holder on such Auction Date as a result of such procedures so
    that the number of shares so purchased or sold by each Existing Holder or
    Potential Holder on such Auction Date shall be whole shares of APS.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
    If, as a result of the procedures described in clause (v) of paragraph (a) of
    this Section 4, any Potential Holder would be entitled or required to
    purchase less than a whole share of a series of APS on any Auction Date, the
    Auction Agent shall, in such manner as it shall determine in its sole discretion,
    allocate shares of APS of such series for purchase among Potential Holders so
    that only whole shares of APS of such series are purchased on such Auction
    Date as a result of such procedures by any Potential Holder, even if such
    allocation results in one or more Potential Holders not purchasing shares of
    APS of such series on such Auction Date.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
    Based on the results of each Auction for shares of a series of APS, the
    Auction Agent shall determine the aggregate number of shares of such series
    to be purchased and the aggregate number of shares of such series to be sold
    by Potential Holders and Existing Holders and, with respect to each Potential
    Holder and Existing Holder, to the extent that such aggregate number of
    shares to be purchased and such aggregate number of shares to be sold differ,
    determine to which other Potential Holder(s) or Existing Holder(s) they shall
    deliver, or from which other Potential Holder(s) or Existing Holder(s) they
    shall receive, as the case may be, shares of APS of such series.
    Notwithstanding any provision of the Auction Procedures to the contrary, in
    the event an Existing Holder or Beneficial Owner of a series of APS with
    respect to whom a Broker-Dealer submitted a Bid to the Auction Agent for such
    shares that was accepted in whole or in part, or submitted or is deemed to
    have submitted a Sell Order for such shares that was accepted in whole or in
    part, fails to instruct its Agent Member to deliver such shares against
    payment therefor, partial deliveries of shares of APS that have been made in
    respect of Potential Holders&#146; or Potential Beneficial Owners&#146; submitted Bids
    for shares of such series that have been accepted in whole or in part shall
    constitute good delivery to such Potential Holders and Potential Beneficial
    Owners.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
    Neither the Fund nor the Auction Agent nor any affiliate of either shall have
    any responsibility or liability with respect to the failure of an Existing
    Holder, a Potential Holder, a Beneficial Owner, a Potential Beneficial Owner
    or its respective Agent Member to deliver shares of any series of APS or to
    pay for shares of any series of APS sold or purchased pursuant to the Auction
    Procedures or otherwise.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>5.</B><A NAME=B019></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Auction Agent.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
    so long as shares of any series of APS are outstanding, the Auction Agent,
    duly appointed by the Fund to so act, shall be in each case a commercial
    bank, trust company or other financial institution independent of the Fund
    and its affiliates (which however may engage or have engaged in business
    transactions with the Fund or its affiliates) and at no time shall the Fund
    or any of its affiliates act as the Auction Agent in connection with the
    Auction Procedures. If the Auction Agent resigns or for any reason its
    appointment is terminated during any period that shares of any series of APS
    are outstanding, the Board of Directors shall use its best efforts promptly</FONT></P>
  </TD>
  </TR>
</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-32</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P ALIGN=LEFT STYLE='PAGE-BREAK-BEFORE: ALWAYS'></P>
<PAGE>
<BR>
<TABLE ALIGN=CENTER  BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH="100%">
  <TR style="font-size:1px">
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="5%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  <TD WIDTH="85%" VALIGN=TOP>
  <P>&nbsp;</P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>thereafter
    to appoint another qualified commercial bank, trust company or financial
    institution to act as the Auction Agent. The Auction Agent&#146;s registry of
    Existing Holders of a series of APS shall be conclusive and binding on the
    Broker-Dealers. A Broker-Dealer may inquire of the Auction Agent between 3:00
    p.m. on the Business Day preceding an Auction for a series of APS and 9:30
    a.m. on the Auction Date for such Auction to ascertain the number of shares
    of such series in respect of which the Auction Agent has determined such
    Broker-Dealer to be an Existing Holder. If such Broker-Dealer believes it is
    the Existing Holder of fewer shares of such series than specified by the
    Auction Agent in response to such Broker-Dealer&#146;s inquiry, such Broker-Dealer
    may so inform the Auction Agent of that belief. Such Broker-Dealer shall not,
    in its capacity as Existing Holder of shares of such series, submit Orders in
    such Auction in respect of shares of such series covering in the aggregate
    more than the number of shares of such series specified by the Auction Agent
    in response to such Broker-Dealer&#146;s inquiry.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>6.</B><A NAME=B020></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Transfer of APS.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
    otherwise permitted by the Fund, a Beneficial Owner or an Existing Holder may
    sell, transfer or otherwise dispose of shares of any series of APS only in
    whole shares and only pursuant to a Bid or Sell Order placed with the Auction
    Agent in accordance with the procedures described in this Part II or to a
    Broker-Dealer; <I>provided, however, </I>that
    (a) a sale, transfer or other disposition of shares of APS from a customer of
    a Broker-Dealer who is listed on the records of that Broker-Dealer as the
    holder of such shares to that Broker-Dealer or another customer of that
    Broker-Dealer shall not be deemed to be a sale, transfer or other disposition
    for purposes of this Section 6 if such Broker-Dealer remains the Existing
    Holder of the shares so sold, transferred or disposed of immediately after
    such sale, transfer or disposition and (b) in the case of all transfers other
    than pursuant to Auctions, the Broker-Dealer (or other Person, if permitted
    by the Fund) to whom such transfer is made shall advise the Auction Agent of
    such transfer.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>7.</B><A NAME=B021></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Global Certificate.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD COLSPAN="4" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior
    to the commencement of a Voting Period, (i) all of the shares of a series of
    APS outstanding from time to time shall be represented by one global certificate
    registered in the name of the Securities Depository or its nominee and (ii)
    no registration of transfer of shares of a series of APS shall be made on the
    books of the Fund to any Person other than the Securities Depository or its
    nominee.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=2><B>8.</B><A NAME=B022></A></FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2><B>Force Majeure.</B></FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
    Notwithstanding anything else set forth herein, if an Auction Date for shares
    of a series of APS is not a Business Day because the New York Stock Exchange
    is closed for business due to an &#147;act of God,&#148; natural disaster, act of war,
    civil or military disturbance, act of terrorism, sabotage, riots or a loss or
    malfunction of utilities or communications services or the Auction Agent is
    not able to conduct an Auction in accordance with the Auction Procedures for
    any such reason, then the Applicable Dividend Rate for shares of such series
    for the next Subsequent Dividend Period shall be the Applicable Dividend Rate
    most recently in effect for shares of such series, <I>provided, however, </I>that, if the affected Subsequent
    Dividend Period is a Special Dividend Period, the next Subsequent Dividend
    Period shall be a Standard Dividend Period and the Applicable Dividend Rate
    for shares of such series during such Standard Dividend Period shall be 80%
    of the Reference Rate applicable to such Standard Dividend Period.</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="3" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
    Notwithstanding anything else set forth herein, if a Dividend Payment Date is
    not a Business Day because the New York Stock Exchange is closed for business
    due to an act of God, natural disaster, act of war, civil or military
    disturbance, act of terrorism, sabotage, riots or a loss or malfunction of
    utilities or communications services or the dividend payable on such date can
    not be paid for any such reason, then:</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
    the Dividend Payment Date for the affected Dividend Period shall be the next
    Business Day on which the Fund and the Paying Agent, if any, are able to
    cause the dividend to be paid using their reasonable best efforts;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
    the affected Dividend Period shall end on the day it would have ended had
    such event not occurred and the Dividend Payment Date had remained the
    scheduled date; and</FONT></P>
  </TD>
  </TR>
  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>

<TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=3> </FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>


  <TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD COLSPAN="2" VALIGN=TOP>
  <P><FONT SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)
    the next Dividend Period will begin and end on the dates on which it would
    have begun and ended had such event not occurred and the Dividend Payment
    Date remained the scheduled date.</FONT></P>
  </TD>
  </TR>

<TR>
  <TD VALIGN=TOP>
  <P><FONT SIZE=3> </FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  <TD VALIGN=TOP>
  <P><FONT SIZE=1>&nbsp;</FONT></P>
  </TD>
  </TR>



</TABLE>
<P ALIGN=CENTER><FONT SIZE=2>A-33</FONT></P>
<HR NOSHADE ALIGN=CENTER WIDTH="100%" SIZE=4>
<P align="left" style="page-break-before:always"></P>
<PAGE>


<P align="center">
<FONT size=2 face="serif">PART C: OTHER INFORMATION </FONT></P>
<P>
<U><FONT size=2 face="serif">Item 25</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Financial Statements and Exhibits</FONT></U><FONT size=2 face="serif"> </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=4% align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD width=4% align=right>
      <div align="left"><FONT size=2 face="serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></div></TD>
        <TD colspan=2 align=left>
  <FONT size=2 face="serif">Financial Statements</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD colspan=2 align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD colspan=2 align=left>
  <B><FONT size=2 face="serif">In Part A:</FONT></B>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD width=2% align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD width=90% align=left>
  <FONT size=2 face="serif">Financial Highlights - Selected Per Share Data and Ratios</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Financial Highlights - Information Regarding Senior Securities</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD colspan=2 align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD colspan=2 align=left>
  <B><FONT size=2 face="serif">In Part B:</FONT></B>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Report of independent registered public accountants</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left> </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Schedule of Investments at December 31, 2005</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Statement of Assets and Liabilities at December 31, 2005</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Statement of Operations for the year ended December 31, 2005</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Statement of Changes in Net Assets for the years ended December 31, 2005 and 2004</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Statement of Cash Flows for the year ended December 31, 2005</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left> </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Notes to Financial Statements</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Financial Highlights - Selected Per Share Data and Ratios</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left> </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR align="left" valign="bottom">
    <TD colspan="4"> </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right>&nbsp;</TD>
        <TD align=right>
        <div align="left"><FONT size=2 face="serif">2.</FONT>
          </div></TD>
        <TD colspan="2" align=left>
  <FONT size=2 face="serif">Exhibits</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">a.1</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Articles of Incorporation (Incorporated by reference from post-effective amendment no.</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">46 to Registrant&#146;s registration statement under the Investment Company Act of 1940 on</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
    <TD align=left></TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">a.2</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Amendment to Articles of Incorporation (Incorporated by reference from post-effective</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">amendment no. 46 to Registrant&#146;s registration statement under the Investment Company</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left></TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
</TABLE>
<BR>
<P align="center">
<FONT size=2 face="serif">33</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=4% align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width=3% align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD width=4% align=left>
  <FONT size=2 face="serif">a.3</FONT>&nbsp;
        </TD>
        <TD width=89% align=left>
  <FONT size=2 face="serif">Second Amendment to Articles of Incorporation (Incorporated by reference from post-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">effective amendment no. 46 to Registrant&#146;s registration statement under the Investment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">a.4</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Articles Supplementary creating Remarketed Preferred Stock, Series A, B, C, D</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">and E (Incorporated by reference from post-effective amendment no. 46 to Registrant&#146;s</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">registration statement under the Investment Company Act of 1940 on Form N-2, no. 811-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">a.5</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Articles Supplementary creating Remarketed Preferred Stock, Series I</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">(Incorporated by reference from post-effective amendment no. 46 to Registrant&#146;s</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">registration statement under the Investment Company Act of 1940 on Form N-2, no. 811-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">a.6</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Third Amendment to Articles of Incorporation (Incorporated by reference from post-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">effective amendment no. 46 to Registrant&#146;s registration statement under the Investment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">a.7</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Fourth Amendment to Articles of Incorporation (Incorporated by reference from post-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">effective amendment no. 46 to Registrant&#146;s registration statement under the Investment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">a.8</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Fifth Amendment to Articles of Incorporation (Incorporated by reference from post-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">effective amendment no. 46 to Registrant&#146;s registration statement under the Investment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">a.9</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Sixth Amendment to Articles of Incorporation (Incorporated by reference from post-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">effective amendment no. 46 to Registrant&#146;s registration statement under the Investment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">a.10</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Seventh Amendment to Articles of Incorporation (Incorporated by reference from post-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">effective amendment no. 46 to Registrant&#146;s registration statement under the Investment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left> </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left nowrap><FONT size=2 face="serif">a.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD align=left><FONT size=2 face="serif">Form of Articles Supplementary Creating Series M, Series W and Series F of Auction Preferred Stock </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><FONT size=2 face="serif">(Incorporated by reference to Appendix
    A to the Statement of Additional Information). </FONT></TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">b.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Bylaws (Incorporated by reference from post-effective amendment no. 47 to Registrant&#146;s</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">registration statement under the Investment Company Act of 1940 on Form N-2, no. 811-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">c.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">None</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.1</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Specimen common stock certificate (Incorporated by reference from Registrant&#146;s</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">registration statement on Form N-2, no. 33-10421)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.2</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Remarketed Preferred Stock, Series A (Incorporated by reference</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">from pre-effective amendment no. 2 to Registrant&#146;s registration statement on Form N-2,</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 33-22933)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.3</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Remarketed Preferred Stock, Series B (Incorporated by reference</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">from pre-effective amendment no. 1 to Registrant&#146;s registration statement on Form N-2,</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 33-24101)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.4</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Remarketed Preferred Stock, Series C (Incorporated by reference</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">from pre-effective amendment no. 1 to Registrant&#146;s registration statement on Form N-2,</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 33-24100)</FONT>&nbsp;
        </TD>
  </TR>
</TABLE>
<BR>
<P align="center">
<FONT size=2 face="serif">34</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width="4%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="3%" align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD width="4%" align=left>
  <FONT size=2 face="serif">d.5</FONT>&nbsp;
        </TD>
        <TD width="89%" align=left>
  <FONT size=2 face="serif">Form of certificate of Remarketed Preferred Stock, Series D (Incorporated by reference</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">from pre-effective amendment no. 1 to Registrant&#146;s registration statement on Form N-2,</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 33-24102)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.6</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Remarketed Preferred Stock, Series E (Incorporated by reference</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">from pre-effective amendment no. 1 to Registrant&#146;s registration statement on Form N-2,</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 33-24099)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.7</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Remarketed Preferred Stock, Series I (Incorporated by reference</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">from pre-effective amendment no. 2 to Registrant&#146;s registration statement on Form N-2,</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 33-22933)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR>
    <TD colspan=4></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.8</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Auction Preferred Stock,
  Series M </FONT>
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.9</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Auction Preferred Stock,
  Series W </FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">d.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Auction Preferred Stock,
  Series F </FONT>&nbsp;
        </TD>
  </TR>
  <TR>
    <TD colspan=4> </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">e.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Document setting forth the terms of Registrant&#146;s
  dividend reinvestment plan (Incorporated </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><FONT size=2 face="serif">by reference from post-effective amendment
    no. 46 to Registrant's registration statement </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><FONT size=2 face="serif">under the Investment Company Act of
    1940 on Form N-2, no. 811-4915) </FONT>&nbsp; </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR>
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">f.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">None</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">g.1</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Investment Advisory Agreement (Incorporated by reference from post-effective</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">amendment no. 39 to Registrant&#146;s registration statement under the Investment Company</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">g.2</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Service Agreement (Incorporated by reference from post-effective amendment no. 39 to</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Registrant&#146;s registration statement under the Investment Company Act of 1940 on Form</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">g.3</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Administration Agreement (Incorporated by reference from post-effective amendment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 39 to Registrant&#146;s registration statement under the Investment Company Act of 1940</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
    <TD colspan=4> </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">h.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Underwriting Agreement</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR>
    <TD colspan=4> </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">i.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Not applicable</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">j.1</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Custody Agreement (Incorporated by reference from post-effective amendment no. 45 to</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Registrant&#146;s registration statement under the Investment Company Act of 1940 on Form</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">j.2</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Foreign Custody Manager Agreement (Incorporated by reference from post-effective</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">amendment no. 45 to Registrant&#146;s registration statement under the Investment Company</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.1</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Fund Accounting Agreement (Incorporated by reference from post-effective amendment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 45 to Registrant&#146;s registration statement under the Investment Company Act of 1940</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.2</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Remarketing Agreement (Incorporated by reference from exhibit k.3 to</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">pre-effective amendment no. 3 to Registrant&#146;s registration statement on Form N-2, no.</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">33-22933)</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="4" align=left></TD>
  </TR>
</TABLE>
<BR>
<P align="center">
<FONT size=2 face="serif">35</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=4% align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width=3% align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD width=4% align=left>
  <FONT size=2 face="serif">k.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;
        </TD>
        <TD width=89% align=left>
  <FONT size=2 face="serif">Form of Paying Agent Agreement (Incorporated by reference from exhibit k.4 to</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">pre-effective amendment no. 3 to Registrant&#146;s registration statement on Form N-2, no.</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">33-22933)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.4</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Credit Agreement (Incorporated by reference from post-effective amendment no. 46 to</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Registrant&#146;s registration statement under the Investment Company Act of 1940 on Form</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.5</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Depositary Agreement (Incorporated by reference from post-effective amendment no. 46</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">to Registrant&#146;s registration statement under the Investment Company Act of 1940 on</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.6</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Letter Amendment to Depositary Agreement (Incorporated by reference from post-</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">effective amendment no. 46 to Registrant&#146;s registration statement under the Investment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.7</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Second Letter Amendment to Depositary Agreement (Incorporated by reference from</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">post-effective amendment no. 46 to Registrant&#146;s registration statement under the</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Investment Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.8</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Placement Agency Agreement (Incorporated by reference from post-effective amendment</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">no. 46 to Registrant&#146;s registration statement under the Investment Company Act of 1940</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.9</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Letter Amendment to Placement Agency Agreement (Incorporated by reference from</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">post-effective amendment no. 46 to Registrant&#146;s registration statement under the</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Investment Company Act of 1940 on Form N-2, no. 811-4915)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR>
    <TD colspan=4></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Auction Agency Agreement</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">k.11</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Moody&#146;s Preferred Stock Guidelines</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR>
    <TD colspan=4>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><FONT size=2 face="serif">k.12</FONT></TD>
    <TD align=left><FONT size=2 face="serif">Form of Standard &amp; Poor&#146;s Preferred Stock Guidelines</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><FONT size=2 face="serif">l.1</FONT></TD>
    <TD align=left><FONT size=2 face="serif">Opinion and Consent of Mayer, Brown, Rowe &amp; Maw LLP</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left><FONT size=2 face="serif">l.2</FONT></TD>
    <TD align=left><FONT size=2 face="serif">Opinion and Consent of DLA Piper Rudnick Gray Cary US LLP</FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left> </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">m.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Not applicable</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">n.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Consent of Independent Registered Public Accounting Firm</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">o.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Not applicable</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">p.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Subscription Agreement for initial capital (Incorporated by reference from Registrant&#146;s</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">registration statement on Form N-2, no. 33-10421)</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">q.</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Not applicable</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
        <TD colspan=4>

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">r.1*</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Amended and Restated Code of Ethics of Registrant</FONT></TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">r.2*</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Amended and Restated Code of Ethics of Duff &amp; Phelps Investment Management Co.</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>
  <FONT size=2 face="serif">(investment adviser to Registrant)</FONT></TD>
  </TR>
  <TR>
        <TD colspan=4>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
        <TD align=left>
  <FONT size=2 face="serif">s.*</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Powers of Attorney</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="4" align=left></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD colspan="2" align=left><FONT size=2 face="serif">* Previously filed </FONT></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="4" align=left> </TD>
  </TR>
</TABLE>
<BR>
<P align="center">
<FONT size=2 face="serif">36</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<P>
<U><FONT size=2 face="serif">Item 26</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Marketing Arrangements</FONT></U><FONT size=2 face="serif"> </FONT></P>

<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See Exhibit h to this Registration Statement.</FONT></P>

<P>
<U><FONT size=2 face="serif">Item 27</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Other Expenses of Issuance and Distribution</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the estimated expenses to be incurred in connection with the offering described in this registration statement: </FONT></P>

<TABLE width="60%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD colspan="3" align=left><hr size="1" noshade>    </TD>
  </TR>
  <TR valign="bottom">
        <TD width=86% align=left>
        <div align="left"><FONT size=2 face="serif">Registration and filing fees</FONT>&nbsp;
          </div></TD>
        <TD width=1% align=right>
        <div align="left"><FONT size=2 face="serif">&#36;</FONT>
          </div></TD>
        <TD width=13% align=right><font size=2 face="serif">&nbsp;32,100</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=3>
  <HR noshade size=1>
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">Rating fees</FONT>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=right><font size=2 face="serif">40,000</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=3>
  <HR noshade size=1>
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">Printing*</FONT>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=right><font size=2 face="serif">100,000</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=3>
  <HR noshade size=1>
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">Accounting fees and expenses</FONT>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=right><font size=2 face="serif">45,000</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=3>
  <HR noshade size=1>
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">Legal fees and expenses*</FONT>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=right><font size=2 face="serif">190,000</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=3>
  <HR noshade size=1>
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">Miscellaneous*</FONT>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=right><font size=2 face="serif">1,000</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=3>
  <HR noshade size=1>
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<FONT size=2 face="serif">Total*</FONT>&nbsp;
        </TD>
        <TD align=right>
      <div align="left"><FONT size=2 face="serif">&#36;</FONT></div></TD>
        <TD align=right><font size=2 face="serif">408,100</font></TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
    <TD align=right>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left><hr size="1" noshade></TD>
  </TR>
  <TR valign="bottom">
    <TD colspan="3" align=left>&nbsp; &nbsp; &nbsp; <FONT size=2 face="serif">* Estimated </FONT> </TD>
  </TR>
</TABLE>
 <BR>
<P>
<U><FONT size=2 face="serif">Item 28</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Persons Controlled by or Under Common Control</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund does not consider that it is controlled, directly or indirectly, by any person.</FONT></P>
<P>
<U><FONT size=2 face="serif">Item 29</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Number of Holders of Securities</FONT></U><FONT size=2 face="serif"> </FONT></P>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
        <TD width=24% align=left>

          <div align="left"></div></TD>
        <TD width=76% align=center>
  <FONT size=2 face="serif">Number of</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>

          <div align="left"></div></TD>
        <TD align=center>
  <FONT size=2 face="serif">Record Holders</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=right>
        <center>
          <U><FONT size=2 face="serif">Title of Class</FONT></U>&nbsp;
    </center></TD>
        <TD align=center>
  <U><FONT size=2 face="serif">February 28, 2006</FONT></U>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=right nowrap>
        <div align="left"><FONT size=2 face="serif">Common Stock, &#36;.001 par
            value</FONT>&nbsp;
          </div></TD>
        <TD align=center>
  <FONT size=2 face="serif">23,360</FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right nowrap>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=right nowrap>
        <div align="left"><FONT size=2 face="serif">Preferred Stock, &#36;.001
            par value</FONT>&nbsp;
          </div></TD>
        <TD align=center>
  <FONT size=2 face="serif">1</FONT>&nbsp;
        </TD>
  </TR>
</TABLE>
 <BR>
<P>
<U><FONT size=2 face="serif">Item 30</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Indemnification</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P> <FONT face="serif"> <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maryland
      law permits a corporation to include in its charter a provision limiting
      the liability of its directors and officers to the corporation and its
      stockholders for money damages, except for liability resulting from (a)
      actual receipt of an improper benefit or profit in money, property or services
      or (b) active and deliberate dishonesty established by a final judgment
      and which is material to the cause of action. The Registrant&#146;s charter
      contains a provision which eliminates directors' and officers' liability
to the maximum extent permitted by Maryland law. </font></FONT></P>
<P> <FONT size="2" face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maryland law requires
    a corporation (unless its charter provides otherwise, which the Registrant&#146;s
    charter does not) to indemnify a director or officer who has been successful
    in the defense of any proceeding to which he is made a party by reason of
    his service in that capacity. Maryland law permits a corporation to indemnify
    its present and former directors and officers, among others, against judgments,
    penalties, fines, settlements and reasonable expenses actually incurred by
    them in connection with any proceeding unless it is established that: </FONT></P>
<blockquote>
  <p><FONT size="2" face="serif">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the act or omission was material to the matter
            giving rise to the proceeding and (i) was committed in bad faith or (ii)
            was the result of active and deliberate dishonesty, <br>
        <br>
  </FONT></p>
  <p><FONT size="2" face="serif">&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the director or officer actually received
            an improper personal benefit in money, property or services or <br>
        <br>
  </FONT></p>
  <p><FONT size="2" face="serif">&nbsp;&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;in the case of any criminal proceeding, the
            director or officer had reasonable cause to believe that the act or omission
            was unlawful. </FONT></p>
</blockquote>
<P> <FONT size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A court may order
    indemnification if it determines that the director or officer is fairly and
    reasonably entitled to indemnification, even though the prescribed standard
    of conduct is not met. However, indemnification for an adverse judgment in
    a suit by or in the right of the corporation, or for a judgment of liability
    on the basis that personal benefit was improperly received, is limited to
    expenses. </FONT></P>
<P> <FONT size="2" face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, Maryland
    law permits a corporation to advance reasonable expenses to a director or
    officer upon receipt of (a) a written affirmation by the director or officer
    of his good faith belief that he has met the standard of conduct necessary
    for indemnification and (b) a written undertaking by him or on his behalf
    to repay the amount paid or reimbursed if it is ultimately determined that
    the standard of conduct was not met. </FONT></P>
<P> <FONT size="2" face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant&#146;s
    charter obligates it, to the maximum extent permitted by Maryland law but
    subject to the exclusion required by Section 17(h) of the Investment Company
    Act of 1940, to indemnify (a) any present or former director or officer or
    (b) any director or officer who, at the Registrant&#146;s request, serves
    another enterprise as a director or officer. The Bylaws of the Registrant
    obligate it to provide advance of expenses to the fullest extent permitted
    by Maryland law, except as limited by the Investment Company Act of 1940.
    Additionally, the Registrant&#146;s Bylaws permit it to indemnify any other
    employees or agents of the Registrant to the extent authorized by the Registrant&#146;s
    Board of Directors.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the &#147;1933 Act&#148;)
  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 </FONT></P>
<P align="center"><FONT size=2 face="serif">37</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<P>
  <FONT size=2 face="serif">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. </FONT></P>

<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">The Registrant, its directors and officers, the Adviser and persons affiliated with them are insured under  policies of insurance maintained by the Registrant and the Adviser, within the limits
  and subject to the limitations of the policies, 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 policies expressly exclude 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. </FONT></P>

<P>
<U><FONT size=2 face="serif">Item 31</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Business and Other Connections of Investment Adviser</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Neither Duff &amp; 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. </FONT></P>
<P>
<U><FONT size=2 face="serif">Item 32</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Location of Accounts and Records</FONT></U><FONT size=2 face="serif"> </FONT></P>
<P></P>
<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<font size=2 face="serif">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, Suite 3600,
    Chicago, Illinois 60603), the Adviser, the Administrator and the Fund&#146;s
    custodian and transfer agents. See &#147;Management of the Fund-Investment
    Adviser,&#148; &#147;Management of the Fund-Administrator&#148; and &#147;Underwriting-Custodian
    agent, transfer agent and auction agent&#148; for the addresses of the Adviser,
    the Administrator and the Fund&#146;s custodian and transfer agents. </font></p>
<p></p>
<P>
<U><FONT size=2 face="serif">Item 33</FONT></U><FONT size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Management Services</FONT></U></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif"> Not applicable.</FONT></P>
<P><U><FONT size=2 face="serif">Item 34</FONT></U><FONT
size=2 face="serif">. </FONT><U><FONT size=2 face="serif">Undertakings</FONT></U><FONT size=2 face="serif"> </FONT></P>

<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif"> 1. The Registrant hereby undertakes to suspend the offering of shares until it amends its Prospectus if (a) subsequent to the effective date of its registration statement, the net asset value declines more than 10
percent from its net asset value as of the effective date of the Registration Statement or (b) the net asset value increases to an amount greater than its net proceeds as stated in the Prospectus.</FONT></P>

<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">2.
Not applicable.  </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">3. Not applicable.</FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">4.
    Not applicable.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">5.
The Registrant hereby undertakes: </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">(a) for the purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of Prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in
the form of Prospectus filed by the Registrant under Rule 497(h) under the Securities Act of 1933 shall be deemed to be part of the Registration Statement as of the time it was declared effective; and </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">(b) for the purpose of determining any liability under
  the Securities Act of 1933, each post-effective amendment that contains a form
  of Prospectus shall be deemed to be a new registration  statement relating to
the </FONT></P>
<P align="center">
<FONT size=2 face="serif"> 38</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<P>
<FONT size=2 face="serif">securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">6. The Registrant undertakes to send by first class mail or other means designed to ensure equally prompt delivery within two business days of receipt of a written or oral request, its Statement of Additional Information.
</FONT></P>
<P align="center">
<FONT size=2 face="serif">39</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<P align="center">
<FONT size=2 face="serif">EXHIBIT INDEX </FONT></P>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
        <TD width="24%" align=left>&nbsp;

        </TD>
        <TD width="61%" align=left>&nbsp;

        </TD>
        <TD width="15%" align=right>
        <div align="left"><FONT size=2 face="serif">Sequential</FONT>&nbsp;
          </div></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <U><FONT size=2 face="serif">Exhibit No.</FONT></U>&nbsp;
        </TD>
        <TD align=left>
  <U><FONT size=2 face="serif">Description</FONT></U>&nbsp;
        </TD>
        <TD align=right>
        <div align="left"><U><FONT size=2 face="serif">Page No.</FONT></U>&nbsp;
          </div></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">d.8</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Auction Preferred Stock, Series M</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">d.9</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Auction Preferred Stock, Series W</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">d.10</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of certificate of Auction Preferred Stock, Series F</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">h</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Underwriting Agreement</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">k.10</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Auction Agency Agreement</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">k.11</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Moody&#146;s Preferred Stock Guidelines</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">k.12</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Form of Standard &amp; Poor&#146;s Preferred Stock Guidelines</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">l.1</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Opinion and Consent of Mayer, Brown, Rowe &amp; Maw LLP</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">l.2</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Opinion and Consent of DLA Piper Rudnick Gray Cary US LLP</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>
  <FONT size=2 face="serif">n</FONT>&nbsp;
        </TD>
        <TD align=left>
  <FONT size=2 face="serif">Consent of Independent Registered Public Accounting Firm</FONT>&nbsp;
        </TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
<BR>

<P align="center">
<FONT size=2 face="serif">40</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>


<P align="center">
<B><FONT size=2 face="serif">SIGNATURES </FONT></B></P>

<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Pursuant to requirements
  of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant
  has duly caused this registration statement to be signed on its behalf by the
  undersigned, thereunto duly authorized in the city of Chicago, and the state
of Illinois, on the 22nd day of March, 2006. </FONT></P>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=50% align=left>&nbsp;</TD>
        <TD width=50% align=left>
  <FONT size=2 face="serif">DNP SELECT INCOME FUND INC.</FONT>&nbsp;
        </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
        <TD>&nbsp;

        </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
        <TD>&nbsp;

        </TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
        <TD>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
        <TD align=left nowrap>
  <FONT size=2 face="serif">By:</FONT> <font size="2"><u>&nbsp;&nbsp;/s/
  Nathan I. Partain&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;</font> </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
        <TD align=left>
 &nbsp; &nbsp; &nbsp;&nbsp;<FONT size=2 face="serif">Name: Nathan I. Partain </FONT>&nbsp;
        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left>&nbsp;</TD>
        <TD align=left>
 &nbsp; &nbsp; &nbsp;  <FONT size=2 face="serif">Title: President and Chief Executive
   Officer </FONT>&nbsp;
        </TD>
  </TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT size=2 face="serif">Pursuant to the requirements of the Securities Act of 1933, registration statement has been signed by the following persons in the capacities and on the dates indicated. </FONT></P>

<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
        <TD width=24% align=center nowrap>
  <B><U><FONT size=2 face="serif">Signature</FONT></U></B>&nbsp;
        </TD>
        <TD width=20%>&nbsp;
        </TD>
        <TD width=22% align=center>
  <B><U><FONT size=2 face="serif">Title</FONT></U></B>&nbsp;
        </TD>
        <TD width=13%>&nbsp;
        </TD>
        <TD width=21% align=right>
        <center>
          <B><U><FONT size=2 face="serif">Date</FONT></U></B>&nbsp;
          </center></TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>          <center>
          <p align="left"><font size="2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Nathan I. Partain &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>
            </font></p>      </center></TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Nathan I. Partain</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left><center>
          <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
          </font>
          </u>
        </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">President and</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Chief Executive Officer</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">(Principal Executive Officer)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap>
         <font size="2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;/s/ Joseph C. Curry, Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Joseph C. Curry, Jr.</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left> <center>
          <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u>
        </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Senior Vice President</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">and Treasurer</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">(Principal Financial and</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Accounting Officer)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=right nowrap>
        <center>
          <FONT size=2 face="serif">*<br>
          ________________________________</FONT>
    </center></TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Stewart E. Conner</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left> <center>
          <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u>
        </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=right nowrap>
        <center>
          <FONT size=2 face="serif">*<br>
    ________________________________</FONT>
    </center></TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Connie K. Duckworth</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left> <center>
          <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u>
        </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=right nowrap> <center>
          <FONT size=2 face="serif">*<br>
    ________________________________</FONT>
    </center></TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Robert J. Genetski</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left> <center>
          <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u>
        </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=right nowrap> <p align=center><FONT size=2 face="serif">*<br>________________________________</FONT></p></TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Francis E. Jeffries</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left> <center>
          <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u>
        </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">and Chairman of the Board</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5 nowrap>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=right nowrap> <center>
          <FONT size=2 face="serif">*<br>
    ________________________________</FONT>
    </center></TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Nancy Lampton</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left> <center>
          <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u>
        </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap>&nbsp;

        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
        </TD>
        <TD align=left>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
    <TD align=left nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align=center><FONT size=2 face="serif">and Vice Chairman of the Board</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
</TABLE>
 <BR>
<P align="center">
<FONT size=2 face="serif">41</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P>
<PAGE>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR valign="bottom">
        <TD width=22% align=right nowrap> <center>
          <FONT size=2 face="serif">*<br>
    ________________________________</FONT>
        </center></TD>
        <TD width=21% align=right nowrap>&nbsp;</TD>
        <TD width=22% align=center>
  <FONT size=2 face="serif">Christian H. Poindexter</FONT>&nbsp;
        </TD>
    <TD width=14% align=center>&nbsp;</TD>
    <TD width=21% align=center> <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u> </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>

          <center>
    </center></TD>
        <TD align=left>&nbsp;</TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=5>

          <center>
    </center></TD>
  </TR>
  <TR>
        <TD colspan=5>

          <center>
    </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=right>
          <center>
            <FONT size=2 face="serif">*<br>
    ________________________________</FONT>
          </center></TD>
        <TD align=right>&nbsp;</TD>
        <TD align=center>
  <FONT size=2 face="serif">Carl F. Pollard</FONT>&nbsp;
        </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u> </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>

          <center>
    </center></TD>
        <TD align=left>&nbsp;</TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=5>

          <center>
    </center></TD>
  </TR>
  <TR>
        <TD colspan=5>

          <center>
    </center></TD>
  </TR>
  <TR valign="bottom">
        <TD align=right> <center>
          <FONT size=2 face="serif">*<br>
    ________________________________</FONT>
        </center></TD>
        <TD align=right>&nbsp;</TD>
        <TD align=center>
  <FONT size=2 face="serif">David J. Vitale</FONT>&nbsp;
        </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center> <u><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;March 22, 2006&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </font> </u> </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=center>
  <FONT size=2 face="serif">Director</FONT>&nbsp;
        </TD>
    <TD align=center>&nbsp;</TD>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR>
        <TD colspan=5>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5>&nbsp;

        </TD>
  </TR>
  <TR>
        <TD colspan=5>&nbsp;

        </TD>
  </TR>
  <TR valign="bottom">
        <TD align=left nowrap> <FONT size=2 face="serif">*By:</FONT>&nbsp;<font size="2"><u>/s/
        Nathan I. Partain&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u></font></TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=center>
  <FONT size=2 face="serif">Nathan I. Partain</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left>&nbsp;</TD>
  </TR>
  <TR valign="bottom">
        <TD align=center>
  <FONT size=2 face="serif">Attorney-in-Fact</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
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`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2D(8)
<SEQUENCE>3
<FILENAME>c40133_ex-d8.txt
<TEXT>

                                                                     Exhibit d.8

CERTIFICATE NUMBER                                              NUMBER OF SHARES

         1                                                                 4,000

                           DNP SELECT INCOME FUND INC.
                             a Maryland corporation
                        Series M Auction Preferred Stock
                            $.001 Par Value Per Share
                    $25,000 Liquidation Preference Per Share

                                                           CUSIP NO. ___________

      This certifies Cede & Co. is the owner of 4,000 fully paid and
non-assessable shares of Series M Auction Preferred Stock, par value $.001 per
share, $25,000 liquidation preference per share, of DNP Select Income Fund Inc.
(the "Fund") transferable only on the books of the Fund by the holder thereof in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid unless countersigned by the
transfer agent and registrar.

      IN WITNESS WHEREOF, the Fund has caused this Certificate to be signed by
its duly authorized officers this _______ day of March 2006.

THE BANK OF NEW YORK                         DNP SELECT INCOME FUND INC.
As Transfer Agent and Registrar

By: ________________________________       By:   _______________________________
       Authorized Signature                        Name: Nathan I. Partain
                                                   Title: President

                                           By:   _______________________________
                                                   Name: Joseph C. Curry, Jr.
                                                   Title: Treasurer

<PAGE>

                                  TRANSFER FORM

      FOR VALUE RECEIVED, ____________________________ hereby sells, assigns and
transfers unto _______________ the shares of Series M Auction Preferred Stock
represented by this Certificate, and does hereby irrevocably constitute and
appoint _______________________ attorney to transfer said shares on the books of
the within named Fund with full power of substitution in the premises.

Dated: _____________________, _______

      In presence of:
_____________________________________              ___________________________

      Shares of Series M Auction Preferred Stock evidenced by this Certificate
may be sold, transferred or otherwise disposed of only pursuant to the
provisions of the Fund's Articles Supplementary Creating Series M, Series W and
Series F of Auction Preferred Stock, a copy of which may be obtained at the
office of the State Department of Assessments and Taxation of Maryland.

      The Fund will furnish information about the restrictions on
transferability to any stockholder upon request and without charge. Any such
request should be addressed to the Secretary of the Fund.

      The Fund will furnish to any stockholder on request and without charge a
full statement of the designations, and any preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the stock of each
class authorized to be issued, the differences in the relative rights and
preferences between shares of any series of any authorized preferred or special
class to the extent they have been set, and the authority of the Board of
Directors to classify unissued shares and to set the relative rights and
preference thereof and of any subsequent series of such preferred or special
classes. Any such request should be addressed to the Secretary of the Fund.

      Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Fund or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2D(9)
<SEQUENCE>4
<FILENAME>c40133_ex-d9.txt
<TEXT>

                                                                     Exhibit d.9

CERTIFICATE NUMBER                                              NUMBER OF SHARES

         1                                                                 4,000

                           DNP SELECT INCOME FUND INC.
                             a Maryland corporation
                        Series W Auction Preferred Stock
                            $.001 Par Value Per Share
                    $25,000 Liquidation Preference Per Share

                                                           CUSIP NO. ___________

      This certifies Cede & Co. is the owner of 4,000 fully paid and
non-assessable shares of Series W Auction Preferred Stock, par value $.001 per
share, $25,000 liquidation preference per share, of DNP Select Income Fund Inc.
(the "Fund") transferable only on the books of the Fund by the holder thereof in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid unless countersigned by the
transfer agent and registrar.

      IN WITNESS WHEREOF, the Fund has caused this Certificate to be signed by
its duly authorized officers this _______ day of March 2006.

THE BANK OF NEW YORK                         DNP SELECT INCOME FUND INC.
As Transfer Agent and Registrar

By: ________________________________         By: _______________________________
      Authorized Signature                         Name:  Nathan I. Partain
                                                   Title: President

                                             By: _______________________________
                                                   Name:  Joseph C. Curry, Jr.
                                                   Title: Treasurer

<PAGE>

                                  TRANSFER FORM

      FOR VALUE RECEIVED, ____________________________ hereby sells, assigns and
transfers unto _______________ the shares of Series W Auction Preferred Stock
represented by this Certificate, and does hereby irrevocably constitute and
appoint _______________________ attorney to transfer said shares on the books of
the within named Fund with full power of substitution in the premises.

Dated: _____________________, _______

      In presence of:

___________________________________          ________________________________

      Shares of Series W Auction Preferred Stock evidenced by this Certificate
may be sold, transferred or otherwise disposed of only pursuant to the
provisions of the Fund's Articles Supplementary Creating Series M, Series W and
Series F of Auction Preferred Stock, a copy of which may be obtained at the
office of the State Department of Assessments and Taxation of Maryland.

      The Fund will furnish information about the restrictions on
transferability to any stockholder upon request and without charge. Any such
request should be addressed to the Secretary of the Fund.

      The Fund will furnish to any stockholder on request and without charge a
full statement of the designations, and any preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the stock of each
class authorized to be issued, the differences in the relative rights and
preferences between shares of any series of any authorized preferred or special
class to the extent they have been set, and the authority of the Board of
Directors to classify unissued shares and to set the relative rights and
preference thereof and of any subsequent series of such preferred or special
classes. Any such request should be addressed to the Secretary of the Fund.

      Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Fund or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2D(10)
<SEQUENCE>5
<FILENAME>c40133_ex-d10.txt
<TEXT>

                                                                    Exhibit d.10

CERTIFICATE NUMBER                                              NUMBER OF SHARES

        1                                                                  4,000

                           DNP SELECT INCOME FUND INC.
                             a Maryland corporation
                        Series F Auction Preferred Stock
                            $.001 Par Value Per Share
                    $25,000 Liquidation Preference Per Share

                                                           CUSIP NO. ___________

      This certifies Cede & Co. is the owner of 4,000 fully paid and
non-assessable shares of Series F Auction Preferred Stock, par value $.001 per
share, $25,000 liquidation preference per share, of DNP Select Income Fund Inc.
(the "Fund") transferable only on the books of the Fund by the holder thereof in
person or by duly authorized attorney upon surrender of this Certificate
properly endorsed. This Certificate is not valid unless countersigned by the
transfer agent and registrar.

      IN WITNESS WHEREOF, the Fund has caused this Certificate to be signed by
its duly authorized officers this _______ day of March 2006.

THE BANK OF NEW YORK                         DNP SELECT INCOME FUND INC.
As Transfer Agent and Registrar

By: _______________________________          By: _______________________________
       Authorized Signature                         Name:  Nathan I. Partain
                                                    Title: President

                                             By: _______________________________
                                                    Name:  Joseph C. Curry, Jr.
                                                    Title: Treasurer

<PAGE>

                                  TRANSFER FORM

      FOR VALUE RECEIVED, ____________________________ hereby sells, assigns and
transfers unto _______________ the shares of Series F Auction Preferred Stock
represented by this Certificate, and does hereby irrevocably constitute and
appoint _______________________ attorney to transfer said shares on the books of
the within named Fund with full power of substitution in the premises.

Dated: _____________________, _______

       In presence of:

_________________________________          _________________________________

      Shares of Series F Auction Preferred Stock evidenced by this Certificate
may be sold, transferred or otherwise disposed of only pursuant to the
provisions of the Fund's Articles Supplementary Creating Series M, Series W and
Series F of Auction Preferred Stock, a copy of which may be obtained at the
office of the State Department of Assessments and Taxation of Maryland.

      The Fund will furnish information about the restrictions on
transferability to any stockholder upon request and without charge. Any such
request should be addressed to the Secretary of the Fund.

      The Fund will furnish to any stockholder on request and without charge a
full statement of the designations, and any preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the stock of each
class authorized to be issued, the differences in the relative rights and
preferences between shares of any series of any authorized preferred or special
class to the extent they have been set, and the authority of the Board of
Directors to classify unissued shares and to set the relative rights and
preference thereof and of any subsequent series of such preferred or special
classes. Any such request should be addressed to the Secretary of the Fund.

      Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Fund or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2H
<SEQUENCE>6
<FILENAME>c40133_exh-992h.htm
<TEXT>

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<P align="right">Exh. h</P>
<P align="right"><b>Exh. 99.2 h  </b></P>
<P align="center"><FONT size=4 face="serif">DNP Select Income Fund Inc. </FONT></P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT face="serif">Auction Preferred Stock </FONT></P>
<P align="center">
<FONT face="serif">Par Value &#36;0.001 Per Share </FONT></P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT face="serif">FORM OF UNDERWRITING AGREEMENT </FONT></P>
<P align="center">&nbsp;</P>
<P align="center">&nbsp;</P>
<P align="center">
<FONT face="serif">March __, 2006 </FONT></P>

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<P align="center">
<FONT face="serif">UNDERWRITING AGREEMENT </FONT></P>
<P align="right">
<FONT face="serif">March __, 2006 </FONT></P>
<P>
<FONT face="serif">UBS Securities LLC <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as Representative(s) <br>
c/o UBS Securities LLC <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;as Managing Representative <br>
299 Park Avenue <br>
New York, New York 10171-0026 </FONT></P>
<P>
<FONT face="serif">Ladies and Gentlemen: </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">DNP Select Income Fund Inc., a Maryland corporation (the "Fund"), proposes to issue and sell to the underwriters named in Schedule A annexed hereto (the "Underwriters") an aggregate of 12,000 shares
of preferred stock of the Fund, par value &#36;0.001 per share, designated Auction Preferred Stock ("APS"), of which 4,000 shares have been designated Series M APS, 4,000 shares have been designated Series W APS and 4,000 shares have been designated
Series F APS, each with a liquidation preference of &#36;25,000 per share (the "Shares"). The Shares are described in the Prospectus which is defined below. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">The Fund has filed, in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations thereunder (collectively called the "Securities Act"), and with the
provisions of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder (collectively called the "Investment Company Act"), with the Securities and Exchange Commission (the "Commission") a registration statement on
Form N-2 (File Nos. 333-130590 and 811-04915), including a prospectus and a statement of additional information, relating to the Shares. The Fund has furnished to the Representatives, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (including a preliminary statement of additional information) (each thereof, including such preliminary statement of additional information, being herein called a "Preliminary Prospectus") relating to the Shares. Except
where the context otherwise requires, the registration statement, as amended when it becomes effective (the "Effective Date"), including all documents filed as a part thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to Rule 497 under the Securities Act and deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act is herein
called the "Registration Statement," and the prospectus (including the statement of additional information), in the form filed by the Fund with the Commission pursuant to Rule 497 under the Securities Act or, if no such filing is required, the form
of final prospectus (including the form of final statement of additional information) included in the Registration Statement at the time it became effective, is herein called the "Prospectus."</FONT></P>
<P align="center">
<FONT face="serif">2 </FONT></P>

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<P>
<FONT face="serif">In addition, the Fund has filed a Notification of Registration on Form N-8A (the "Notification") pursuant to Section 8 of the Investment Company Act. UBS Securities LLC ("UBS Securities" or the "Managing Representative") will act
as managing representative for the Underwriters. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Duff &amp; Phelps Investment Management Co., an Illinois corporation ("Investment Adviser"), acts as the Fund's investment adviser pursuant to an Investment Advisory Agreement by and between the Fund
and the Investment Adviser, dated as of May 1, 1998 (the "Investment Advisory Agreement"). The Bank of New York acts as the custodian (the "Custodian") of the Fund's cash and portfolio assets pursuant to a Master Custody Agreement, dated as of
February 26, 1999 (the "Custodian Agreement"). J.J.B. Hilliard, W.L. Lyons, Inc. acts as the administrator of the Fund pursuant to an Administration Agreement, dated as of May 1, 1998 (the "Administration Agreement"). The Fund is a party to a
Service Agreement, dated as of May 1, 1998 (the "Service Agreement"), with the Investment Adviser and Phoenix Investment Partners, Ltd. ("Phoenix") whereby Phoenix provides the Investment Adviser the services of its employees and the use of various
facilities and the Investment Adviser reimburses Phoenix for the direct or indirect costs thereof. The Fund has issued and outstanding preferred stock with aggregate liquidation preference of &#36;500,000,000 designated Remarketed Preferred Stock
("RPS") and Merrill Lynch, Pierce, Fenner &amp; Smith Incorporated acts as remarketing agent pursuant to a Remarketing Agreement dated November 17, 1988. In connection with the issuance of the RPS, the Fund adopted articles supplementary (the "RPS
Articles Supplementary) to the Fund's articles of incorporation (the "Articles of Incorporation"). The Fund has issued and outstanding commercial paper notes with aggregate principal amount of &#36;200,000,000 (the "CP Notes") and has entered into
the following agreements with respect to its CP Notes: a Depository Agreement dated April 29, 1993, as amended by letter agreements dated June 9, 1994 and February 14, 2003, and a Placement Agency Agreement dated April 29, 1993, as amended by a
letter amendment dated February 14, 2003 (the agreements referred to in this sentence collectively referred to as the "CP Notes Agreements"). In addition, the Fund has entered into a Credit Agreement dated February 14, 2003 with the lenders party
thereto, The Bank of New York as administrative agent and BNY Capital Markets, Inc., as lead arranger and book runner (as amended and supplemented to the date hereof, the "Backup Credit Facility Agreement"). In addition, the Fund has adopted a
dividend reinvestment plan (the "Dividend Reinvestment Plan") pursuant to which holders of common stock ("Common Shares") of the Fund may have their dividends automatically reinvested in additional Common Shares of the Fund if so elected.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">In connection with the issuance of the Shares, the Fund has adopted articles supplementary (the "APS Articles Supplementary) to the Articles of Incorporation. The Bank of New York will act as the
Fund's auction agent with respect to the Shares pursuant to an Auction Agency Agreement, dated as of March __, 2006 (the "Auction Agency Agreement"). The Fund has entered into a Letter Agreement, dated as of March __, 2006, with the Depository Trust
Company (the "DTC Agreement"). The Fund has adopted rating agency guidelines (the "Rating Agency Guidelines") in connection with the issuance of the Shares. </FONT></P>
<P align="center">
<FONT face="serif">3 </FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
<TD width="37">&nbsp;</TD> <TD colspan=2>
<FONT face="serif">The Fund, the Investment Adviser and the Underwriters agree as follows:</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">1.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Sale and Purchase</FONT></B><FONT face="serif">. Upon the basis of the warranties and representations and subject to the terms and conditions herein set forth, the Fund agrees to sell to the respective Underwriters and each of
the Underwriters, severally and not jointly, agrees to purchase from the Fund the aggregate number of Shares set forth opposite the name of such Underwriter in Schedule A attached hereto in each case at a purchase price of &#36;24,750.00 per Share.
The Fund is advised that the Underwriters intend (i) to make a public offering of their respective portions of the Shares as soon after the effective date of the Registration Statement as is advisable and (ii) initially to offer the Shares upon the
terms set forth in the Prospectus. The Underwriters may from time to time increase or decrease the public offering price after the initial public offering to such extent as they may determine.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">2.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Payment and Delivery</FONT></B><FONT face="serif">. Payment of the purchase price for the Shares shall be made by the Underwriters to the Fund by Federal Funds wire transfer, against delivery of the Shares to you through the
facilities of the Depository Trust Company ("DTC") for the respective accounts of the Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York City time on the third business day following the date of this Underwriting Agreement
(unless another date or time shall be agreed to by you and the Fund). The time at which such payment and delivery are actually made is hereinafter sometimes called the "Time of Purchase" or the "Closing Date." Certificates for the Shares, if any,
shall be delivered to you in definitive form in such names and in such denominations as you shall specify on the second business day preceding the Time of Purchase. For the purpose of expediting the checking of the certificates for the Shares by
you, the Fund agrees to make such certificates, if any, available to you for such purpose at least one full business day preceding the Time of Purchase.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">3.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Representations and Warranties of the Fund and the Investment Adviser</FONT></B><FONT face="serif">.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD colspan=2>
<FONT face="serif">Each of the Fund and the Investment Adviser jointly and severally represents and warrants to each Underwriter as follows:</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD width="41" valign=top nowrap>
<FONT face="serif">(a)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD width="1023">
<FONT face="serif">On (i) the Effective Date and the date on which the Prospectus is first filed with the Commission pursuant to Rule 497(b), (h) or (j) under the Securities Act, as the case may be, (ii) the date on which any post- effective
amendment to the Registration Statement (except any post- effective amendment which is filed with the Commission after the later of (x) one year from the date of this Underwriting Agreement or (y) the date on which the distribution of the Shares is
completed) became or becomes effective or any amendment or supplement to the Prospectus was or is filed with the Commission and (iii) the Closing Date, the Registration Statement, the Prospectus and any such amendment or supplement thereto and the
Notification complied or will comply in all material respects with the requirements of the Securities Act and the Investment Company Act,</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">4</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>

<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">as the case may be. On the Effective Date and on the date that any post- effective amendment to the Registration Statement (except any post- effective amendment which is filed with the Commission after the later of (x) one year
from the date of this Underwriting Agreement or (y) the date on which the distribution of the Shares is completed) became or becomes effective, neither the Registration Statement nor any such amendment did or will contain any untrue statement of a
material fact or omit to state a material fact required to be stated in it or necessary to make the statements in it not misleading. Except as permitted under Rule 430 under the Securities Act (and other applicable rules under Regulation C under the
Securities Act), the Preliminary Prospectus dated March __, 2006 did not, as of such date, contain any untrue statement of a material fact or omit to state a material fact required to be stated in it or necessary to make the statements in it, in
light of the circumstances under which they were made, not misleading. At the Effective Date and, if applicable, the date the Prospectus or any amendment or supplement to the Prospectus was or is filed with the Commission and at the Closing Date,
the Prospectus did not or will not, as the case may be, contain any untrue statement of a material fact or omit to state a material fact required to be stated in it or necessary to make the statements in it, in light of the circumstances under which
they were made, not misleading. The foregoing representations in this Section 3(a) do not apply to statements or omissions relating to the Underwriters made in reliance on and in conformity with information furnished in writing to the Fund by the
Underwriters expressly for use in the Registration Statement, the Prospectus, or any amendments or supplements thereto, as described in Section 9(f) hereof.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(b)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund has been duly formed, is validly existing as a corporation under the laws of the state of Maryland, with full power and authority to conduct all the activities conducted by it, to own or lease all assets owned or leased
by it and to conduct its business as described in the Registration Statement and Prospectus, and the Fund is duly licensed and qualified to do business and in good standing in each jurisdiction in which its ownership or leasing of property or its
conducting of business requires such qualification, except where the failure to be so qualified or be in good standing would not reasonably be expected to have a material adverse effect on the Fund, and the Fund owns, possesses or has obtained and
currently maintains all governmental licenses, permits, consents, orders, approvals and other authorizations, whether foreign or domestic, necessary to carry on its business as contemplated in the Prospectus, except where the failure to obtain such
licenses, permits, consents, orders, approvals and other authorizations, either alone or in the aggregate, would not reasonably be expected to have a material adverse effect. The Fund has no subsidiaries.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(c)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The capitalization of the Fund is as set forth in the Registration Statement and the Prospectus. The Common Shares conform in all material respects</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">5</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>

<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">to the description of them in the Prospectus. All the outstanding Common Shares have been duly authorized and are validly issued, fully paid and nonassessable. The Fund's currently outstanding RPS conform in all material respects
to the description of them in the Prospectus. All the outstanding RPS have been duly authorized and are validly issued, fully paid and nonassessable. The Shares to be issued and delivered to and paid for by the Underwriters in accordance with this
Underwriting Agreement against payment therefor as provided by this Underwriting Agreement have been duly authorized and when issued and delivered to the Underwriters will have been validly issued and will be fully paid and nonassessable. No person
is entitled to any preemptive or other similar rights with respect to the Shares.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(d)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund is duly registered with the Commission under the Investment Company Act as a diversified, closed-end management investment company, and, subject to the filing of any final amendment to the Registration Statement (a "Final
Amendment"), if not already filed, all action under the Securities Act and the Investment Company Act, as the case may be, necessary to make the public offering and consummate the sale of the Shares as provided in this Underwriting Agreement has or
will have been taken by the Fund.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(e)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund has full power and authority to enter into each of this Underwriting Agreement, the Investment Advisory Agreement, the Custodian Agreement, the Administration Agreement, the Service Agreement, the Remarketing Agreement,
the Auction Agency Agreement, the DTC Agreement, the CP Notes Agreements, the Backup Credit Facility Agreement and the Dividend Reinvestment Plan (collectively, the "Fund Agreements") and to perform all of the terms and provisions hereof and thereof
to be carried out by it and (i) each Fund Agreement has been duly and validly authorized, executed and delivered by or on behalf of the Fund, (ii) each Fund Agreement does not violate in any material respect any of the applicable provisions of the
Investment Company Act or the Investment Advisers Act of 1940, as amended, and the rules and regulations thereunder (collectively called the "Advisers Act"), as the case may be, and (iii) assuming due authorization, execution and delivery by the
other parties thereto, each Fund Agreement constitutes the legal, valid and binding obligation of the Fund enforceable in accordance with its terms, (A) subject, as to enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law) and (B) except as rights to indemnity thereunder may be limited by federal or state securities
laws.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(f)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">None of (i) the execution and delivery by the Fund of the Fund Agreements, (ii) the issue and sale by the Fund of the Shares as contemplated by this Underwriting Agreement and (iii) the performance</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">6</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">by the Fund of its obligations under any of the Fund Agreements or consummation by the Fund of the other transactions contemplated by the Fund Agreements conflicts with or will conflict with, or results or will result in a breach
of, (x) the Articles of Incorporation, RPS Articles Supplementary or bylaws of the Fund, each as amended through the date hereof, (y) the APS Articles Supplementary and the Rating Agency Guidelines, each as amended through the date hereof, or (z)
any agreement or instrument to which the Fund is a party or by which the Fund is bound, or any law, rule or regulation, or order of any court, governmental instrumentality, securities exchange or association or arbitrator, whether foreign or
domestic, applicable to the Fund, other than (a) state securities or "blue sky" laws applicable in connection with the purchase and distribution of the Shares by the Underwriters pursuant to this Underwriting Agreement or (b) in the case of clause
(z), that would not reasonably be expected to have a material adverse effect on the Fund.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(g)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund is not currently in breach of, or in default under, any written agreement or instrument to which it is a party or by which it or its property is bound or affected except for any breach or default that would not reasonably
be expected to have a material adverse affect on the Fund.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(h)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">No person has any right to the registration of any securities of the Fund because of the filing of the registration statement.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(i)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">No consent, approval, authorization or order of any court or governmental agency or body or securities exchange or association, whether foreign or domestic, is required by the Fund for the consummation by the Fund of the
transactions to be performed by the Fund or the performance by the Fund of all the terms and provisions to be performed by or on behalf of it in each case as contemplated in the Fund Agreements, except such as (i) have been obtained under the
Securities Act, the Investment Company Act, or the Advisers Act, and (ii) may be required by the New York Stock Exchange or under state securities or "blue sky" laws, in connection with the purchase and distribution of the Shares by the Underwriters
pursuant to this Underwriting Agreement.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(j)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Common Shares are listed on the New York Stock Exchange.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(k)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Ernst &amp; Young LLP, whose report appears in the Prospectus, are an independent registered public accounting firm with respect to the Fund as required by the Securities Act and the Investment Company Act.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(l)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The statement of assets and liabilities included or incorporated by reference in the Registration Statement and the Prospectus presents fairly in all material respects, in accordance with generally accepted accounting principles
in the United States applied on a consistent basis, the financial position of the Fund as of the date indicated.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">7</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>

<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(m)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund will maintain a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets through an asset reconciliation procedure or otherwise at reasonable intervals and appropriate action is taken with respect to any
differences.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(n)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Since the date as of which information is given in the Registration Statement and the Prospectus, except as otherwise stated therein, (i) there has been no material adverse change in the condition (financial or otherwise),
business, prospects, properties, net assets or results of operations of the Fund, whether or not arising in the ordinary course of business and (ii) there have been no transactions entered into by the Fund other than those in the ordinary course of
its business.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(o)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">There is no action, suit or proceeding before or by any court, commission, regulatory body, administrative agency or other governmental agency or body, foreign or domestic, now pending, or, to the knowledge of the Fund, threatened
against or affecting the Fund, which (i) might result in any material adverse change in the condition, financial or otherwise, business affairs or business prospects of the Fund or might materially adversely affect the properties or assets of the
Fund or (ii) is of a character required to be described in the Registration Statement or the Prospectus; and there are no contracts, franchises or other documents that are of a character required to be described in, or that are required to be filed
as exhibits to, the Registration Statement that have not been described or filed as required.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(p)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Shares have been, or prior to the Closing Date will be, assigned a rating of "AAA" by Standard &amp; Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&amp;P") and "Aaa" by Moody's Investors Service,
Inc. ("Moody's").</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(q)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The issuance of the Shares shall not result in a suspension, qualification, withdrawal or downgrade of any of the ratings assigned by Moody's and S&amp;P to the outstanding RPS of the Fund.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(r)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund intends to direct the investment of the proceeds of the offering of the Shares in such a manner as to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">8</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(s)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">To the knowledge of the Fund and the Investment Adviser after due inquiry, no advertising, sales literature or other promotional materials (excluding road show slides) were authorized or prepared by or on behalf of the Fund or the
Investment Adviser or any representative thereof for use in connection with the public offering or sale of the Shares (collectively, the "sales materials"); any sales materials and any road show slides or road show tapes complied and comply in all
material respects with the applicable requirements of the Securities Act and the rules and interpretations of the National Association of Securities Dealers, Inc.; and neither the sales materials nor the road show slides authorized or prepared by
the Fund or authorized or prepared on behalf of the Fund by the Investment Adviser or any representative thereof for use in connection with the public offering or sale of the Shares contained or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(t)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund has elected to be treated, and has qualified, as a regulated investment company within the meaning of Section 851 of the Code for each taxable year of the Fund beginning on or prior to the Closing Date.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD><font face="serif">In addition, any certificate signed by any officer of the Fund and delivered to the Underwriters or counsel for the</font></TD>
</TR>
<TR>
<TD>&nbsp;</TD><TD colspan="2">
<FONT face="serif"> Underwriters in connection with the</FONT><FONT face="serif"> offering of the Shares shall be deemed to be a representation and warranty by the Fund as to matters covered thereby, to each Underwriter.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">4.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Representations and Warranties of the Investment Adviser</FONT></B><FONT face="serif">. The Investment Adviser represents to each Underwriter as follows:</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(a)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Investment Adviser has been duly formed, is validly existing as a corporation under the laws of the State of Illinois with full power and authority to perform its obligations under the Investment Adviser Agreements (as defined
below) and as described in the Registration Statement and Prospectus, and the Investment Adviser is duly licensed and qualified to do business and in good standing in each jurisdiction in which it is required to be so qualified in order to perform
its obligations under the Investment Adviser Agreements (as defined below) and as described in the Registration Statement and Prospectus, except to the extent that failure to be so qualified or be in good standing would not have a material adverse
affect on the Investment Adviser's ability to perform its obligations under the Investment Adviser Agreements (as defined below) and as described in the Registration Statement and Prospectus; and the Investment Adviser owns, possesses or has
obtained and currently maintains all governmental licenses, permits, consents, orders, approvals and other authorizations, whether foreign or domestic, necessary to perform its obligations under the Investment Adviser Agreement (as defined below)
and as described in the Registration Statement and Prospectus.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">9</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(b)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Investment Adviser is (i) duly registered as an investment adviser under the Advisers Act and (ii) not prohibited by the Advisers Act or the Investment Company Act from acting as the investment adviser for the Fund as
contemplated by the Investment Advisory Agreement, the Registration Statement and the Prospectus.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(c)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Investment Adviser has full power and authority to enter into each of this Underwriting Agreement and the Investment Advisory Agreement (collectively, the "Investment Adviser Agreements") and to carry out all the terms and
provisions hereof and thereof to be carried out by it; and each Investment Adviser Agreement has been duly and validly authorized, executed and delivered by the Investment Adviser; none of the Investment Adviser Agreements violate any of the
applicable provisions of the Investment Company Act or the Advisers Act; and assuming due authorization, execution and delivery by the other parties thereto, each Investment Adviser Agreement constitutes a legal, valid and binding obligation of the
Investment Adviser, enforceable in accordance with its terms, (i) subject, as to enforcement, to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (ii) except as rights to indemnity thereunder may be limited by federal or state securities laws.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(d)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Neither (i) the execution and delivery by the Investment Adviser of any Investment Adviser Agreement nor (ii) the consummation by the Investment Adviser of the transactions contemplated by, or the performance of its obligations
under any Investment Adviser Agreement conflicts or will conflict with, or results or will result in a breach of, the Articles of Incorporation or By-Laws of the Investment Adviser or any agreement or instrument to which the Investment Adviser is a
party or by which the Investment Adviser is bound, or any law, rule or regulation, or order of any court, governmental instrumentality, securities exchange or association or arbitrator, whether foreign or domestic, applicable to the Investment
Adviser, except in each case for such conflicts or breaches which do not, either alone or in the aggregate, have a material adverse effect on the Investment Adviser's ability to perform its obligations under any Investment Adviser
Agreement.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(e)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">No consent, approval, authorization or order of any court, governmental agency or body or securities exchange or association, whether foreign or domestic, is required for the consummation of the transactions contemplated in, or
the performance by the Investment Adviser of its obligations under, any Investment Adviser Agreement, as the case may be, except such as (i) have been obtained under the Securities Act, the Investment Company Act, or the Advisers Act, and (ii) may
be required by the New York Stock Exchange or under state securities or "blue sky"</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">10</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
<TD>&nbsp;</TD> <TD>&nbsp;</TD>
<TD> <FONT face="serif">laws, in connection with the purchase and distribution of the Shares by the Underwriters pursuant to this Underwriting Agreement.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(f)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The description of the Investment Adviser and its business and the statements attributable to the Investment Adviser in the Registration Statement and the Prospectus comply with the requirements of the Securities Act and the
Investment Company Act and do not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus), in light of the
circumstances under which they were made, not misleading.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(g)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Except as disclosed, there is no action, suit or proceeding before or by any court, commission, regulatory body, administrative agency or other governmental agency or body, foreign or domestic, now pending or, to the knowledge of
the Investment Adviser, threatened against or affecting the Investment Adviser of a nature required to be disclosed in the Registration Statement or Prospectus or that might reasonably be expected to have a material adverse effect on the Investment
Adviser's ability to perform its obligations under the Investment Advisory Agreement.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(h)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">In the event that the Fund or the Investment Adviser makes available any promotional materials (other than the sales materials) intended for use only by qualified broker-dealers and registered representatives thereof by means of
an Internet web site or similar electronic means, the Investment Adviser will install and maintain pre-qualification and password- protection or similar procedures which will effectively prohibit access to such promotional materials by persons other
than qualified broker-dealers and registered representatives thereof.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>  <TD>&nbsp;</TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD colspan=2>
<FONT face="serif"> <FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, any certificate signed by any officer of the Investment Adviser</FONT> and delivered to the Underwriters or counsel for the Underwriters in connection with the offering of the Shares shall be deemed to be a representation and warranty by the Investment Adviser as to matters covered thereby, to each
Underwriter.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">5.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Agreements of the Parties</FONT></B><FONT face="serif">.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(a)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">If the registration statement relating to the Shares has not yet become effective, the Fund will promptly file a Final Amendment, if not previously filed, with the Commission, and will use its best efforts to cause such
registration statement to become effective and, as soon as the Fund is advised, will advise the Managing Representative when the Registration Statement or any amendment thereto has become effective. If the Registration Statement has become effective
and the Prospectus contained therein omits certain information at the time of effectiveness pursuant to Rule 430A under the Securities Act, the Fund will file a 430A</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">11</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">Prospectus pursuant to Rule 497(h) under the Securities Act as promptly as practicable, but no later than the second business day following the earlier of the date of the determination of the offering price of the Shares or the
date the Prospectus is first used after the Effective Date. If the Registration Statement has become effective and the Prospectus contained therein does not so omit such information, the Fund will file a Prospectus pursuant to Rule 497(b) or a
certification pursuant to Rule 497(j) under the Securities Act as promptly as practicable, but no later than the fifth business day following the date of the later of the Effective Date or the commencement of the public offering of the Shares after
the Effective Date. In either case, the Fund will provide the Managing Representative satisfactory evidence of the filing. The Fund will not file with the Commission any Prospectus or any other amendment (except any post- effective amendment which
is filed with the Commission after the later of (x) one year from the date of this Underwriting Agreement or (y) the date on which distribution of the Shares is completed) or supplement to the Registration Statement or the Prospectus unless a copy
has first been submitted to the Managing Representative a reasonable time before its filing and the Managing Representative has not objected to it in writing within a reasonable time after receiving the copy.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(b)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">For a period of three years from the date hereof, the Fund will advise the Managing Representative promptly (i) of the issuance by the Commission of any order in respect of the Fund or the Investment Adviser which relates to the
Fund, or which relates to any material arrangements or proposed material arrangements involving the Fund or the Investment Adviser, (ii) of the initiation or threatening of any proceedings for, or receipt by the Fund of any notice with respect to,
any suspension of the qualification of the Shares for sale in any jurisdiction or the issuance of any order by the Commission suspending the effectiveness of the Registration Statement, (iii) of receipt by the Fund, or any representative or attorney
of the Fund, of any other communication from the Commission relating in any material way to the Fund, the Registration Statement, the Notification, any Preliminary Prospectus, the Prospectus or to the transactions contemplated by this Underwriting
Agreement and (iv) the issuance by any court, regulatory body, administrative agency or other governmental agency or body, whether foreign or domestic, of any order, ruling or decree, or the threat to initiate any proceedings with respect thereto,
regarding the Fund, which relates in any material way to the Fund or any material arrangements or proposed material arrangements involving the Fund. The Fund will make every reasonable effort to prevent the issuance of any order suspending the
effectiveness of the Registration Statement and, if any such order is issued, to obtain its lifting as soon as possible.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(c)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">If not delivered prior to the date of this Underwriting Agreement, the Fund will deliver to the Managing Representative, without charge, a signed</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">12</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">copy of the Registration Statement and the Notification and of any amendments (except any post-effective amendment which is filed with the Commission after the later of (x) one year from the date of this Underwriting Agreement or
(y) the date on which the distribution of the Shares is completed) to either the Registration Statement or the Notification (including all exhibits filed with any such document) and as many conformed copies of the Registration Statement and any
amendments thereto (except any post-effective amendment which is filed with the Commission after the later of (x) one year from the date of this Underwriting Agreement or (y) the date on which the distribution of the Shares is completed) (excluding
exhibits) as the Managing Representative may reasonably request.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(d)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">During such period as a prospectus is required by law to be delivered by an underwriter or a dealer, the Fund will deliver, without charge, to the Representatives, the Underwriters and any dealers, at such office or offices as the
Representatives may designate, as many copies of the Prospectus as the Representatives may reasonably request, and, if any event occurs during such period as a result of which it is necessary to amend or supplement the Prospectus, in order to make
the statements therein, in light of the circumstances under which they were made, not misleading in any material respect, or if during such period it is necessary to amend or supplement the Prospectus to comply with the Securities Act or the
Investment Company Act, the Fund promptly will prepare, submit to the Managing Representative, file with the Commission and deliver, without charge, to the Underwriters and to dealers (whose names and addresses the Managing Representative will
furnish to the Fund) to whom Shares may have been sold by the Underwriters, and to other dealers on request, amendments or supplements to the Prospectus so that the statements in such Prospectus, as so amended or supplemented, will not, in light of
the circumstances under which they were made, be misleading in any material respect and will comply with the Securities Act and the Investment Company Act. Delivery by the Underwriters of any such amendments or supplements to the Prospectus will not
constitute a waiver of any of the conditions in Section 6 hereof.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(e)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund will make generally available to holders of the Fund's securities, as soon as practicable but in no event later than the last day of the 18th full calendar month following the calendar quarter in which the Effective Date
falls, an earnings statement, if applicable, satisfying the provisions of the last paragraph of Section 11(a) of the Securities Act and, at the option of the Fund, Rule 158 under the Securities Act.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(f)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Fund's counsel and accountants in connection with the registration of the Shares and all other expenses in connection with the
preparation, printing and filing of the Registration</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">13</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or reproducing this
Underwriting Agreement and any other documents in connection with the offering, purchase, sale and delivery of the Shares (including advertising expenses of the Underwriters, if any); (iii) the cost of preparing share certificates, if any; (iv) the
expenses (including, but not limited to, travel, hotels and other accommodations) incurred by the Fund's or the Investment Adviser's directors, officers, employees and other personnel in connection with meetings held with registered brokers in
connection with the offering of the Shares, the preparing to market and the marketing of the Shares; (v) any fees charged by securities rating services for rating the Shares; (vi) the fees and expenses of the Depository Trust Company and its
nominee, the Custodian and the Auction Agent; and (vii) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for. The Fund and the Adviser may otherwise agree between
themselves as to the payment of the foregoing expenses, whether or not the transactions contemplated by this Underwriting Agreement are consummated, provided, however, that in no event shall the Underwriters be obligated to pay any of the foregoing
expenses. It is understood, however, that, except as provided in this Section 5 and Section 8 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel and stock transfer taxes, if any, on resale of
any of the Shares by them, except any advertising expenses connected with any offers they may make.</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(g)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">If the transactions contemplated by this Underwriting Agreement are not consummated, except as otherwise provided herein, no party will be under any liability to any other party, except that (i) if this Underwriting Agreement is
terminated by the Representatives or the Underwriters because of any inability, failure or refusal on the part of the Fund or the Investment Adviser to comply with any material terms of this Agreement or because any of the conditions in Section 6
are not met, the Investment Adviser or an affiliate and the Fund, jointly and severally, will reimburse the Underwriters for all out-of-pocket expenses (including the reasonable fees, disbursements and other charges of their counsel) reasonably
incurred by them in connection with the proposed purchase and sale of the Shares (provided, however, that the Fund and the Investment Adviser shall not be liable for any loss of anticipated profits or speculative or consequential or similar damages
for such termination) and (ii) no Underwriter who has failed or refused to purchase the Shares agreed to be purchased by it under this Underwriting Agreement, in breach of its obligations pursuant to this Underwriting Agreement, will be relieved of
liability to the Fund, the Investment Adviser and the other Underwriters for damages occasioned by its default.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">14</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(h)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Without the prior written consent of the Managing Representative, the Fund will not offer, sell or register with the Commission, or announce an offering of, any equity securities of the Fund, within 180 days after the Effective
Date, except for the Shares and the Additional APS, in each case as described in the Prospectus, and any issuances of Common Shares pursuant to the Dividend Reinvestment Plan.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(i)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund will direct the investment of the net proceeds of the offering of the Shares in such a manner as to comply in all material respects with the investment objectives and policies of the Fund as described in the
Prospectus.</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(j)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">No later than the Closing Date, the Underwriters will provide, and will cause any selling group member to whom they have sold Shares to provide, the Auction Agent with a list of the record names of the persons to whom they have
sold Shares, the number of Shares sold to each such person, and the number of Shares they are holding as of the Closing Date; provided that in lieu of thereof, an Underwriter may provide the Auction Agent with a list indicating itself as the sole
holder of all the Shares sold by such Underwriter.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">6.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Conditions of the Underwriters' Obligations</FONT></B><FONT face="serif">. The obligations of the</FONT><FONT face="serif"> Underwriters to purchase the Shares are subject to the accuracy on the date of this Underwriting Agreement, and on the Closing Date, of the representations of the Fund and the Investment Adviser in this Underwriting Agreement, to the accuracy and completeness of all material statements made by the Fund or the Investment Adviser or any of their respective officers in any certificate delivered to the Managing Representative or its counsel pursuant to this Underwriting Agreement, to performance by the Fund and the Investment Adviser of their respective obligations under this Underwriting Agreement and to each of the following additional conditions:</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(a)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Registration Statement must have become effective by 5:30 p.m., New York City time, on the date of this Underwriting Agreement or such later date and time as the Managing Representative consents to in writing.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD><TD>&nbsp;</TD>  <TD>
<FONT face="serif">The Prospectus must have been filed in accordance with Rule 497(b) or (h) or a certificate must have been filed in accordance with Rule 497(j), as the case may be, under the Securities Act.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(b)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">No order suspending the effectiveness of the Registration Statement may be in effect and no proceedings for such purpose may be pending before or, to the knowledge of counsel to the Underwriters, threatened by the Commission, and
any requests for additional information on the part of the Commission (to be included in the Registration Statement or the Prospectus or otherwise) must be complied with or waived to the reasonable satisfaction of the Managing
Representative.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">15</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(c)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Since the dates as of which information is given in the Registration Statement and the Prospectus as of the date of this Underwriting Agreement, (i) there must not have been any material change in the Common Shares, the Shares, or
the RPS or the liabilities of the Fund except as set forth in or contemplated by the Prospectus (provided that a change in the Fund's net asset value, liabilities or portfolio securities in the exercise of normal investment operations shall not be
deemed to be a material change); (ii) there must not have been any material adverse change in the general affairs, prospects, management, business, financial condition or results of operations of the Fund or the Investment Adviser whether or not
arising from transactions in the ordinary course of business as set forth in or contemplated by the Prospectus (provided that a change in the Fund's net asset value, liabilities or portfolio securities in the exercise of normal investment operations
shall not be deemed to be a material change); (iii) the Fund must not have sustained any material loss or interference with its business from any court or from legislative or other governmental action, order or decree, whether foreign or domestic,
or from any other occurrence not described in the Registration Statement and Prospectus; and (iv) there must not have occurred any event that makes untrue or incorrect in any material respect any statement or information contained in the
Registration Statement or Prospectus or that is not reflected in the Registration Statement or Prospectus but should be reflected therein in order to make the statements or information therein (in the case of the Prospectus, in light of the
circumstances in which they were made) not misleading in any material respect; if, in the judgment of the Managing Representative, any such development referred to in clause (i), (ii), (iii), or (iv) of this paragraph (c) makes it impracticable or
inadvisable to consummate the sale and delivery of the Shares pursuant to this Underwriting Agreement by the Underwriters, at the initial public offering price of the Shares.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(d)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Managing Representative must have received on the Closing Date a certificate, dated such date, of the President or a Vice-President and the chief financial or accounting officer of each of the Fund and the Investment Adviser
certifying (in their capacity as such officers and, with respect to clauses (ii), (iii) and (vi) below, on behalf of the Fund and the Investment Adviser, as the case may be) that (i) the signers have carefully examined the Registration Statement,
the Prospectus, and this Underwriting Agreement, (ii) the representations of the Fund (with respect to the certificates from such Fund officers) and the representations of the Investment Adviser (with respect to the certificates from such officers
of the Investment Adviser) in this Underwriting Agreement are accurate on and as of the date of the certificate, (iii)(A) there has not been any material adverse change in the general affairs, prospects, management, business, financial condition or
results of operations of the Fund (with respect to the certificates from such Fund officers) and (B) there has not been any material change with respect to the Fund (with respect to the certificates of</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
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<FONT face="serif">16</FONT></P>

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  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">from such Fund officers) or the Investment Adviser (with respect to the certificates from such officers of the Investment Adviser), which change would materially and adversely affect the ability of the Fund or the Investment
Adviser, as the case may be, to fulfill its obligations under this Underwriting Agreement or the Investment Advisory Agreement, whether or not arising from transactions in the ordinary course of business, (iv) with respect to the Fund only, to the
knowledge of such officers, no order suspending the effectiveness of the Registration Statement, prohibiting the sale of any of the Shares or otherwise having a material adverse effect on the Fund has been issued and no proceedings for any such
purpose are pending before, or to the knowledge of such officers after reasonable investigation, threatened by the Commission or any other regulatory body, whether foreign or domestic, (v) no order having a material adverse effect on the ability of
the Investment Adviser to fulfill its obligations under this Underwriting Agreement or the Investment Advisory Agreement, as the case may be, has been issued and no proceedings for any such purpose are pending before or, to the knowledge of the
officers of the Investment Adviser, after reasonable investigation, threatened by the Commission or any other regulatory body, whether foreign or domestic, and (vi) each of the Fund (with respect to the certificates from such Fund officers) and the
Investment Adviser (with respect to the certificates from such officers of the Investment Adviser) has performed all of its respective agreements that this Underwriting Agreement requires it to perform by such Closing Date (to the extent not waived
in writing by the Managing Representative).</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(e)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Managing Representative must have received on the Closing Date the opinions dated such Closing Date substantially in the form of Schedules B and C to this Underwriting Agreement from the counsel identified in each such
Schedule. With respect to the opinion from the counsel identified in such Schedule B, to the extent that the matters addressed in such opinion relate to matters of Maryland law, such counsel may rely upon the opinion of DLA Piper Rudnick Gray Cary
US LLP addressed to such counsel.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(f)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Managing Representative must have received on the Closing Date from Skadden, Arps, Slate, Meagher &amp; Flom LLP and its affiliated entities an opinion dated such Closing Date with respect to the Fund, the Shares, the
Registration Statement and the Prospectus, this Underwriting Agreement and the form and sufficiency of all proceedings taken in connection with the sale and delivery of the Shares. Such opinion and proceedings shall fulfill the requirements of this
Section 6(f) only if such opinion and proceedings are satisfactory in all respects to the Managing Representative. The Fund and the Investment Adviser must have furnished to such counsel such documents as counsel may reasonably request for the
purpose of enabling them to render such opinion.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">17</FONT></P>

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<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(g)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Managing Representative must have received on the date this Underwriting Agreement is signed and delivered by you a signed letter, dated such date, substantially in the form of Schedule D to this Underwriting Agreement from
the independent registered public accounting firm designated in such Schedule. The Managing Representative also must have received on the Closing Date a signed letter from such accountants, dated as of such Closing Date, confirming on the basis of a
review in accordance with the procedures set forth in their earlier letter that nothing has come to their attention during the period from a date not more than five business days before the date of this Underwriting Agreement, specified in the
letter, to a date not more than five business days before such Closing Date, that would require any change in their letter referred to in the foregoing sentence.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(h)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Shares shall have been accorded a rating of "AAA" by S&amp;P and "Aaa" by Moody's, and a letter to such effect, dated on or before the Closing Date, shall have been delivered to the Managing Representative.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(i)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The issuance of the Shares shall not result in a suspension, qualification, withdrawal or downgrade on any of the ratings assigned by Moody's and S&amp;P to the outstanding RPS of the Fund.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(j)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">As of the Closing Date, and assuming the receipt of the net proceeds from the sale of the Shares, the Investment Company Act Preferred Stock Asset Coverage and the Preferred Stock Basic Maintenance Amount (each as defined in the
APS Articles Supplementary) each will be met.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR>
<TD>&nbsp;</TD> <TD colspan=2>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All opinions, letters, evidence and certificates mentioned above or</FONT> <FONT face="serif">elsewhere in this Underwriting Agreement will comply only if they are in form and scope reasonably satisfactory to counsel for the Underwriters, provided that any such documents, forms of which are annexed hereto, shall be deemed
satisfactory to such counsel if substantially in such form.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">7.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Termination</FONT></B><FONT face="serif">. This Underwriting Agreement may be terminated by the Managing Representative by notifying the Fund at any time:</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(a)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">before the later of the effectiveness of the Registration Statement and the time when any of the Shares are first generally offered pursuant to this Underwriting Agreement by the Managing Representative to dealers by letter or
telegram;</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(b)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">at or before the Closing Date if, in the sole judgment of the Managing Representative, payment for and delivery of the Shares is rendered impracticable or inadvisable because (i) trading in the equity securities of the Fund is
suspended by the Commission or by the principal exchange that lists the Common Shares, (ii) trading in securities generally on the New York Stock Exchange or the Nasdaq Stock Market shall have been</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">18</FONT></P>

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  <TD nowrap valign=top>&nbsp;</TD>
  <TD> <FONT face="serif">suspended or limited or minimum or maximum prices shall have been generally established on such exchange or over-the-counter market, (iii) additional material governmental restrictions, not in force on the date of this Underwriting Agreement, have been imposed upon trading in securities or trading has been suspended on any U.S. securities exchange, (iv) a general banking moratorium has been established by U.S. federal or New York authorities or (v) any material adverse change in the financial or securities markets in the United States or in political, financial or economic conditions in the United States or any outbreak or material escalation of hostilities or declaration by the United States of a national emergency or war or other calamity, terrorist activity or crisis shall have occurred the effect of any of which is such as to make it, in the sole judgment of the Managing Representative, impracticable or inadvisable to market the Shares on the terms and in the manner
contemplated by the Prospectus; or</FONT> </TD>
</TR>
<TR>
  <TD>&nbsp;</TD>
  <TD nowrap valign=top>&nbsp;</TD>
  <TD>&nbsp;</TD>
</TR>
<TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(c)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">at or before the Closing Date, if any of the conditions specified in Section 6 have not been fulfilled when and as required by this Underwriting Agreement.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">8.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Substitution of Underwriters</FONT></B><FONT face="serif">. If one or more of the Underwriters fails (other than for a reason sufficient to justify the termination of this Underwriting Agreement) to purchase on the Closing Date
the Shares agreed to be purchased on the Closing Date by such Underwriter or Underwriters, the Managing Representative may find one or more substitute underwriters to purchase such Shares or make such other arrangements as the Managing
Representative deems advisable, or one or more of the remaining Underwriters may agree to purchase such Shares in such proportions as may be approved by the Managing Representative, in each case upon the terms set forth in this Underwriting
Agreement. If no such arrangements have been made within 36 hours after the Closing Date, and</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(a)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">the number of Shares to be purchased by the defaulting Underwriters on the Closing Date does not exceed 10% of the Shares that the Underwriters are obligated to purchase on the Closing Date, each of the nondefaulting Underwriters
will be obligated to purchase such Shares on the terms set forth in this Underwriting Agreement in proportion to their respective obligations under this Underwriting Agreement, or</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(b)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">the number of Shares to be purchased by the defaulting Underwriters on the Closing Date exceeds 10% of the Shares to be purchased by all the Underwriters on such Closing Date, the Fund will be entitled to an additional period of
24 hours within which to find one or more substitute underwriters reasonably satisfactory to the Managing Representative to purchase such Shares on the terms set forth in this Underwriting Agreement.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">19</FONT></P>

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<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the occurrence of the circumstances described in the foregoing paragraph (b), either the Managing Representative or the Fund will have the right to postpone the Closing Date for not more than five business days in order that
necessary changes and arrangements (including any necessary amendments or supplements to the Registration Statement or the Prospectus) may be effected by the Managing Representative and the Fund. If the number of Shares to be purchased on the
Closing Date by such defaulting Underwriter or Underwriters exceeds 10% of the Shares that the Underwriters are obligated to purchase on the Closing Date, and none of the nondefaulting Underwriters or the Fund makes arrangements pursuant to this
Section within the period stated for the purchase of the Shares that the defaulting Underwriters agreed to purchase, this Underwriting Agreement will terminate without liability on the part of any nondefaulting Underwriter, the Fund, or the
Investment Adviser, except as provided in Sections 5(g) and 9 hereof. Any action taken under this Section will not affect the liability of any defaulting Underwriter to the Fund or the Investment Adviser or to any nondefaulting Underwriters arising
out of such default. A substitute underwriter will become an Underwriter for all purposes of this Underwriting Agreement.</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">9.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD colspan=2>
<B><FONT face="serif">Indemnity and Contribution</FONT></B><FONT face="serif">.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(a)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Each of the Fund and the Investment Adviser, jointly and severally, agrees to indemnify, defend and hold harmless each Underwriter, its partners, directors and officers, and any person who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended, (collectively the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder are called the "Exchange Act"), and
their successors and assigns of all of the foregoing persons from and against any loss, damage, expense, liability or claim (including the reasonable cost of investigation) which, jointly or severally, any such Underwriter or any such person may
incur under the Securities Act, the Exchange Act, the Investment Company Act, the Advisers Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or in the Registration Statement as amended by any post-effective amendment thereof by the Fund) or in a Prospectus (the term "Prospectus" for the purpose of this Section 9
being deemed to include any Preliminary Prospectus, the sales materials, the Prospectus and the Prospectus as amended or supplemented by the Fund), or arises out of or is based upon any omission or alleged omission to state a material fact required
to be stated in either such Registration Statement or Prospectus or necessary to make the statements made therein (with respect to the Prospectus, in light of the circumstances under which they were made) not misleading, except insofar as any such
loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in and in conformity with information furnished in writing by or on behalf of any</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">20</FONT></P>

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    <TD>&nbsp;</TD>
    <TD> <FONT face="serif"></FONT><FONT face="serif">Underwriter to the Fund or the Investment Adviser expressly for use with reference to any Underwriter in such Registration Statement or such Prospectus or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in such Registration Statement or such Prospectus or necessary to make such information (with respect to the Prospectus, in light of the circumstances under which they were made) not misleading, provided, however, that the indemnity agreement contained in this subsection (a) with respect to any Preliminary Prospectus or amended Preliminary Prospectus shall not inure to the benefit of any Underwriter (or to the benefit of any person controlling such Underwriter) from whom the person asserting any such loss, damage, expense, liability or claim purchased the Shares which is the subject thereof if the Prospectus corrected any such alleged untrue statement
or omission and if such Underwriter failed to send or give a copy of the Prospectus to such person at or prior to the written confirmation of the sale of such Shares to such person, unless the failure is the result of noncompliance by the Fund with Section 5(d) hereof. </FONT> </TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">If any action, suit or proceeding (together, a "Proceeding") is brought against an Underwriter or any such person in respect of which indemnity may be sought against the Fund or the Investment Adviser pursuant to the foregoing paragraph, such Underwriter or such person shall promptly notify the Fund or the Investment Adviser, as the case may be, in writing of the institution of such Proceeding and the Fund or the Investment Adviser shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify the Fund or the Investment Adviser shall not relieve the Fund or the Investment Adviser from any liability which the Fund or the Investment Adviser may have to any Underwriter or any such person or otherwise. Such Underwriter or such person shall have the right to employ its or their own counsel in any
such case, but the reasonable fees and expenses of such counsel shall be at the expense of such Underwriter or of such person unless the employment of such counsel shall have been authorized in writing by the Fund or the Investment Adviser, as the case may be, in connection with the defense of such Proceeding or the Fund or the Investment Adviser shall not have, within a reasonable period of time in light of the circumstances, employed counsel to have charge of the defense of such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from, additional to or in conflict with those available to the Fund or the Investment Adviser (in which case the Fund or the Investment Adviser shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties), in any of which events such reasonable fees and expenses shall be borne by the Fund or the Investment</FONT></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
</TABLE>
<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center">
<FONT face="serif">21</FONT></P>

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  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">Adviser and paid as incurred (it being understood, however, that the Fund or the Investment Adviser shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). Neither the Fund nor the Investment Adviser shall be liable for any settlement of any Proceeding effected without its
written consent but if settled with the written consent of the Fund or the Investment Adviser, the Fund or the Investment Adviser, as the case may be, agrees to indemnify and hold harmless any Underwriter and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel as
contemplated by the second sentence of this paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such settlement is entered into more than 60 business
days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement and (iii) such indemnified
party shall have given the indemnifying party at least 30 days' prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened
Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(b)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Each Underwriter severally agrees to indemnify, defend and hold harmless the Fund and the Investment Adviser, and each of their respective shareholders, partners, managers, members, trustees, directors and officers, and any person
who controls the Fund or the Investment Adviser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the successors and assigns of all of the foregoing persons from and against any loss, damage, expense,
liability or claim (including the reasonable cost of investigation) which, jointly or severally, the Fund or the Investment Adviser or any such person may incur under the Securities Act, the Exchange Act, the Investment Company Act, the Advisers
Act, the common law or otherwise, insofar as such loss, damage, expense, liability or claim arises out of or is based upon any untrue statement or alleged untrue statement of a material fact contained in and in conformity with information furnished
in writing by or on behalf of such Underwriter to the Fund or the Investment Adviser expressly for use with reference to such Underwriter in the Registration Statement (or in the</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
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<FONT face="serif">22</FONT></P>

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    <TD>&nbsp;</TD>
    <TD><font face="serif"> <FONT face="serif">Registration Statement as amended by any post-effective amendment thereof by the Fund) or in a Prospectus, or arises out of or is based upon any omission or alleged omission to state a material fact in connection with such information required to be stated in such Registration Statement or such Prospectus or necessary to make such information not misleading (with respect to the Prospectus, in light of the circumstances under which they were made).</FONT> </font></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
    <TD> <FONT face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">If any Proceeding is brought against the Fund, the Investment Adviser or any such person in respect of which indemnity may be sought against any Underwriter pursuant to the foregoing paragraph, the Fund, the Investment Adviser or such person shall promptly notify such Underwriter in writing of the institution of such Proceeding and such Underwriter shall assume the defense of such Proceeding, including the employment of counsel reasonably satisfactory to such indemnified party and payment of all fees and expenses; provided, however, that the omission to so notify such Underwriter shall not relieve such Underwriter from any liability which such Underwriter may have to the Fund, the Investment Adviser or any such person or otherwise. The Fund, the Investment Adviser or such person shall have the right to employ its own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of the Fund, the
Investment Adviser or such person, as the case may be, unless the employment of such counsel shall have been authorized in writing by such Underwriter in connection with the defense of such Proceeding or such Underwriter shall not have, within a reasonable period of time in light of the circumstances, employed counsel to have charge of the defense of such Proceeding or such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to or in conflict with those available to such Underwriter (in which case such Underwriter shall not have the right to direct the defense of such Proceeding on behalf of the indemnified party or parties, but such Underwriter may employ counsel and participate in the defense thereof but the fees and expenses of such counsel shall be at the expense of such Underwriter), in any of which events such fees and expenses shall be borne by such Underwriter and paid as incurred (it being
understood, however, that such Underwriter shall not be liable for the expenses of more than one separate counsel (in addition to any local counsel) in any one Proceeding or series of related Proceedings in the same jurisdiction representing the indemnified parties who are parties to such Proceeding). No Underwriter shall be liable for any settlement of any such Proceeding effected without the written consent of such Underwriter but if settled with the written consent of such Underwriter, such Underwriter agrees to indemnify and hold harmless the Fund, the Investment Adviser and any such person from and against any loss or liability by reason of such settlement. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and </FONT></FONT></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
</TABLE>

<P>&nbsp;</P>
<P>&nbsp;</P>
<P align="center">
<FONT face="serif">23</FONT></P>

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  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">expenses of counsel as contemplated by the second sentence of this paragraph, then the indemnifying party agrees that it shall be liable for any settlement of any Proceeding effected without its written consent if (i) such
settlement is entered into more than 60 business days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date
of such settlement and (iii) such indemnified party shall have given the indemnifying party at least 30 days' prior notice of its intention to settle. No indemnifying party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability on claims that are the subject matter of such Proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR>
  <TD colspan=3>&nbsp;</TD>
</TR></TABLE>
<P>&nbsp;</P>
<P align="center">
<FONT face="serif">24</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(c)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">If the indemnification provided for in this Section 9 is unavailable to an indemnified party under subsections (a) and (b) of this Section 9 in respect of any losses, damages, expenses, liabilities or claims referred to
therein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">25</FONT></P>

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<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">such indemnified party as a result of such losses, damages, expenses, liabilities or claims (i) in such proportion as is appropriate to reflect the relative benefits received by the Fund and the Investment Adviser on the one hand
and the Underwriters on the other hand from the offering of the Shares or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Fund and the Investment Adviser on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such losses, damages, expenses,
liabilities or claims, as well as any other relevant equitable considerations. The relative benefits received by the Fund and the Investment Adviser on the one hand and the Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by the Fund and the total underwriting discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the Shares. The relative fault of the Fund and the Investment Adviser on the one hand and of the Underwriters on the other shall be determined by reference to, among other things, whether the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission relates to information supplied by the Fund or the Investment Adviser or by the Underwriters and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the losses, damages, expenses, liabilities and claims referred to in this subsection shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with investigating, preparing to defend or defending any Proceeding.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(d)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund, the Investment Adviser and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in subsection (c) above. Notwithstanding the provisions of this Section 9, no Underwriter shall be required to
contribute any amount in excess of the fees and commissions received by such Underwriter. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute pursuant to this Section 9 are several in proportion to their respective underwriting commitments and not joint.</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">(e)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The indemnity and contribution agreements contained in this Section 9 and the covenants, warranties and representations of the Fund contained in</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">26</FONT></P>

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<TR>
<TD>&nbsp;</TD> <TD>&nbsp;</TD>
<TD> <FONT face="serif">this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of any Underwriter, its partners, directors or officers or any person (including each partner, officer or director of such person) who controls any Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, or by or on behalf of the Fund or the Investment Adviser, its shareholders, partners, advisers, members, trustees, directors or officers or any person who controls the Fund or the Investment Adviser within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and shall survive any termination of this Agreement or the issuance and delivery of the Shares. The Fund and the Investment Adviser and each Underwriter agree promptly to notify each other of the commencement of any Proceeding against it and, in the case of the Fund or the Investment Adviser, against any of the Fund's or the Investment Adviser's
shareholders, partners, managers, members, trustees, directors or officers in connection with the issuance and sale of the Shares, or in connection with the Registration Statement or Prospectus.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(f)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The Fund and the Investment Adviser each acknowledge that the statements with respect to (1) the public offering of the Shares as set forth on the cover page of and (2) stabilization and selling concessions and reallowances of
selling concessions and payment of fees to Underwriters that meet certain minimum sales thresholds under the caption "Underwriting" in the Prospectus constitute the only information furnished in writing to the Fund by the Underwriters expressly for
use in such document. The Underwriters severally confirm that these statements are correct in all material respects and were so furnished by or on behalf of the Underwriters severally for use in the Prospectus.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD nowrap valign=top>
<FONT face="serif">(g)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Notwithstanding any other provisions in this Section 9, no party shall be entitled to indemnification or contribution under this Underwriting Agreement against any loss, claim, liability, expense or damage arising by reason of
such person's willful misfeasance, bad faith, gross negligence or reckless disregard of its duties in the performance of its duties hereunder.</FONT><FONT face="serif"> The parties hereto acknowledge that the foregoing provision shall be applicable solely as to matters arising under Section 17(i) of the Investment Company Act, and shall not be construed to impose any duties or obligations upon any such parties under this Agreement other than as specifically set forth herein.</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">10.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD colspan=2>
<B><FONT face="serif">Notices</FONT></B><FONT face="serif">. Except as otherwise herein provided, all statements, requests, notices and agreements shall be in writing or by telegram and, if to the Underwriters, shall be sufficient in all respects if
delivered or sent to UBS Securities LLC, 299 Park Avenue, New York, NY 10171-0026, Attention: Syndicate Department and, if to the Fund or the Investment Adviser, shall be sufficient in all respects if delivered or sent to the Fund or the Investment
Adviser, as the case may be, at the</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">27</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">offices of the Fund or the Investment Adviser at Duff &amp; Phelps Investment Management Co., 55 East Monroe Street, Suite 3600, Chicago, Illinois 60603.</FONT>     </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">11.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">Governing Law; Construction</FONT></B><FONT face="serif">. This Agreement and any claim, counterclaim or dispute of any kind or nature whatsoever arising out of or in any way relating to this Agreement ("Claim"), directly or
indirectly, shall be governed by, and construed in accordance with, the laws of the State of New York. The Section headings in this Agreement have been inserted as a matter of convenience of reference and are not a part of this
Agreement.</FONT>       </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">12.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">Submission to Jurisdiction</FONT></B><FONT face="serif">. Except as set forth below, no Claim may be commenced, prosecuted or continued in any court other than the courts of the State of New York located in the City and County
of New York or in the United States District Court for the Southern District of New York, which courts shall have jurisdiction over the adjudication of such matters, and the Fund and UBS</FONT><FONT face="serif"> Securities each consent to the jurisdiction of such courts and personal service with respect thereto. The Fund and UBS Securities hereby consent to personal jurisdiction, service and venue in any court in which any Claim arising out of or in any way relating to this Agreement is brought by any third party against UBS Securities or any indemnified party. Each of UBS Securities, the Fund (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Investment Adviser (on its behalf and, to the extent permitted by applicable law, on behalf of its unitholders and affiliates) waives all right to trial by jury in any action, proceeding or counterclaim (whether based upon contract, tort or otherwise) in any way arising out of or relating to this
Agreement. Each of the Fund and the Investment Adviser agrees that a final judgment in any such action, proceeding or counterclaim brought in any such court shall be conclusive and binding upon the Fund or the Investment Adviser, as the case may be, and may be enforced in any other courts in the jurisdiction of which the Fund or the Investment Adviser, as the case may be, is or may be subject, by suit upon such judgment.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">13.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">Parties at Interest</FONT></B><FONT face="serif">. The Agreement herein set forth has been and is made solely for the benefit of the Underwriters, the Fund and the Investment Adviser and to the extent provided in Section 9
hereof the controlling persons, shareholders, partners, members, trustees, managers, directors and officers referred to in such section, and their respective successors, assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as such purchaser, from any of the Underwriters) shall acquire or have any right under or by virtue of this Agreement.</FONT>     </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">14.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">Counterparts</FONT></B><FONT face="serif">. This Agreement may be signed by the parties in one or more counterparts which together shall constitute one and the same agreement among the parties.</FONT>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">28</FONT></P>

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<TR>
        <TD nowrap valign=top>
<FONT face="serif">15.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">Successors and Assigns</FONT></B><FONT face="serif">. This Agreement shall be binding upon the </FONT><FONT face="serif">Underwriters, the Fund and the Investment Adviser, and any successor or assign of any substantial portion of the Fund's, the Investment Adviser's, or any of the Underwriters' respective businesses and/or assets.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD>&nbsp;</TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">29</FONT></P>

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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">If the foregoing correctly sets forth the understanding among the Fund, the Investment Adviser and the Underwriters, please so indicate in the space provided below, whereupon this letter and your
acceptance shall constitute a binding agreement among the Fund, the Investment Adviser and the Underwriters, severally. </FONT></P>
<P>&nbsp;</P>
<table width="100%"  border="0">
  <tr>
    <td width="49%">&nbsp;</td>
    <td width="51%"> <FONT face="serif">Very truly yours,</FONT><BR></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td> <FONT face="serif">DNP SELECT INCOME FUND INC.</FONT><BR></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><p><FONT face="serif">__________________________ </FONT><BR>
          <FONT face="serif">By:</FONT><BR>
          <FONT face="serif">Title:</FONT></p>
      <p><BR>
          <FONT face="serif">DUFF &amp; PHELPS INVESTMENT</FONT><BR>
        <FONT face="serif">MANAGEMENT CO. </FONT></p></td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td>&nbsp;</td>
    <td><FONT face="serif">__________________________</FONT><BR>
      <FONT face="serif">By:</FONT><BR>
      <FONT face="serif">Title:</FONT><BR></td></tr>

</table>
<P><font face="serif"></font></P>
<TABLE><TR><TD nowrap>&nbsp;</TD>
</TR></TABLE>
<TABLE><TR><TD nowrap>&nbsp;</TD>
</TR></TABLE>
<TABLE><TR><TD nowrap><BR>
</TD></TR></TABLE>
<P align="center">
<FONT face="serif">30</FONT></P>

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<P>
<FONT face="serif">Accepted and agreed to as of the <br>
date first above written, on behalf of <br>
themselves and the other several <br>
Underwriters named in Schedule A </FONT></P>
<P>
<FONT face="serif">UBS SECURITIES LLC </FONT></P>
<P>
<FONT face="serif">By: UBS SECURITIES LLC</FONT></P>
<P>
<FONT face="serif">__________________________<BR> By:    Title:</FONT></P>
<P>
<FONT face="serif">__________________________<BR> By: Title:</FONT></P>
<P align="center">
<FONT face="serif">31</FONT></P>

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<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD colspan="7" align=left>
          <center>
    <B><FONT size=2 face="serif">SCHEDULE A</FONT></B>&nbsp;                  </center></TD>
  </TR>
<TR>
        <TD colspan=7>&nbsp;

        </TD>
</TR>
<TR>
        <TD colspan=7>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD width=30% align=left>&nbsp;

        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=10% align=center>
<B><U><FONT size=2 face="serif">Series</FONT></U></B>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=35% align=center>
<B><U><FONT size=2 face="serif">Series</FONT></U></B>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><U><FONT size=2 face="serif">Series</FONT></U></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=30% align=left>
<B><U><FONT size=2 face="serif">Name</FONT></U></B>&nbsp;
        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=10% align=center>
<B><U><FONT size=2 face="serif">M</FONT></U></B>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=35% align=center>
<B><U><FONT size=2 face="serif">W</FONT></U></B>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><U><FONT size=2 face="serif">F</FONT></U></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=30% align=left>
<FONT size=2 face="serif">UBS Securities LLC</FONT>&nbsp;
        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=10% align=left>&nbsp;

        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=35% align=left>&nbsp;

        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=16% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD colspan=7>&nbsp;

        </TD>
</TR>
<TR>
        <TD colspan=7>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD width=30% align=left>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT size=2 face="serif">TOTAL</FONT></B>&nbsp;
        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=10% align=left>&nbsp;

        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=35% align=left>&nbsp;

        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=16% align=left>&nbsp;

        </TD>
</TR>
</TABLE>
<BR>
<P align="center">
<FONT face="serif">A-1</FONT></P>

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<TABLE align="center">
  <TR><TD nowrap>
<FONT face="serif">SCHEDULE B</FONT><BR>
</TD></TR></TABLE>
<center>
</center>
<P align="center">
<FONT face="serif">FORM OF OPINION OF <br>
</FONT><FONT face="serif">MAYER, BROWN, ROWE &amp; MAW LLP REGARDING THE FUND</FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">1.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">The Fund is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Maryland and is qualified to do business as a foreign corporation in the State of Illinois, which such counsel has
been advised by an officer of the Fund is the only state in which the Fund maintains an office for the conduct of its business.</FONT>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">2.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">The Fund has the corporate power and authority to: (i) own its properties and conduct its business as described in the Registration Statement and the Prospectus; and (ii) execute, deliver, and perform its obligations under the
Fund Agreements.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">3.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">To such counsel's knowledge, the Fund does not have any subsidiaries.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">4.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">The Shares, conform in all material respects as to all statements as to legal matters relating thereto contained in the Prospectus. No person is entitled to any preemptive or other similar rights with respect to the Common Shares
or the issuance of the Shares.</FONT>   </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">5.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">The number of authorized Common Shares, RPS and Shares is as set forth in the Prospectus under the caption "Capitalization." All Common Shares and RPS that to such counsel's knowledge have been issued and are outstanding prior to
the issuance of the Shares have been duly authorized and validly issued and are fully paid and non-assessable.</FONT>   </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">6.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">The Shares have been duly authorized for issuance and sale to the Underwriters pursuant to the Underwriting Agreement and, when issued and delivered by the Fund pursuant to the Underwriting Agreement against payment of the
consideration set forth in the Underwriting Agreement, will be validly issued and fully paid and non-assessable.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">7.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">The Registration Statement, including any Rule 462(b) Registration Statement, has become effective under the 1933 Act, any required filing of the Prospectus pursuant to Rule 497(c) or Rule 497(h) has been made in the manner and
within the time period required by Rule 497, and to such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement or of any Rule 462(b) Registration Statement has been issued, or proceedings therefor threatened,
under the 1933 Act.</FONT>      </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">8.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">The Fund is duly registered with the Commission under the 1940 Act as a closed-end diversified management investment company.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">B-1</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">9.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Other than with respect to financial statements and related notes and schedules and any other financial, accounting and statistical information that is included or incorporated by reference in, or omitted from, the following
documents, as to which such counsel need express no opinion: the Registration Statement, including any Rule 462(b) Registration Statement and any Rule 430A Information, the Prospectus and any amendment or supplement thereto through the date hereof
complied as to form in all material respects with the requirements of the 1933 Act, the 1940 Act and the Rules and Regulations thereunder.</FONT>       </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">10.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Insofar as the statements in the Prospectus under the captions "Description of APS," "Description of capital structure" and "U.S. federal income tax matters" and in the Registration Statement under Item 30 (Indemnification)
constitute summaries of legal matters, provisions of the Fund's articles of incorporation or bylaws or legal proceedings or legal conclusions referred to therein, those statements fairly present the information called for with respect to those legal
matters, documents, proceedings or conclusions.</FONT>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">11.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">To such counsel's knowledge, there is no action, suit, proceeding, inquiry or investigation by or before any court or governmental agency that is pending against the Fund or to which any of its properties are subject or that is
threatened against the Fund, which may reasonably be expected to result in a material adverse effect or to materially and adversely affect the properties or assets of the Fund, the consummation by the Fund of the transactions contemplated in the
Underwriting Agreement or the performance by the Fund of its obligations thereunder.</FONT>     </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">12.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The terms of each of the Fund Agreements and the Fund's articles of incorporation, bylaws, articles supplementary adopted in connection with the issuance of the RPS and the articles supplementary adopted in connection with the
issuance of the Shares do not violate in any material respect any applicable provision of 1940 Act, the Rules and Regulations thereunder, the Advisers Act or the Advisers Act Rules and Regulations.</FONT>    </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">13.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Neither the execution and delivery by the Fund of, and the performance by the Fund of its obligations under, the Fund Agreements, nor the issuance and sale of the Shares to the Underwriters and the use by the Fund of the proceeds
thereof as provided by the Underwriting Agreement and as described in the Prospectus under the caption "Use of Proceeds": (i) violate the Fund's articles of incorporation, bylaws, articles supplementary adopted in connection with the issuance of the
RPS, the articles supplementary adopted in connection with the issuance of the Shares, or the Rating Agency Guidelines; (ii) violate, breach or constitute a default or event of default under the terms of any agreement or instrument that is filed as
an exhibit to the Registration Statement and to which the Fund is a party or by which its property may be bound, except</FONT>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">B-2</FONT></P>

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<TD>&nbsp;</TD> <TD>
<FONT face="serif">for violations, breaches or defaults that would not have a material adverse effect; (iii) violate the laws of the United States or the States of Maryland, New York or Illinois that are, in such counsel's experience, applicable to
the transactions of the types covered by the Fund Agreements (the "Covered Laws"); (iv) violate the terms of any order of any court, governmental instrumentality, securities exchange or association or arbitrator specifically naming the Fund and
known to such counsel or (v) to such counsel's knowledge, require the Fund to obtain any consent or approval by, or make any filing with, any court, regulatory body, administrative or other governmental body, agency or official under any statute,
rule, or regulation of the State of Maryland or of the United States, other than consents, approvals and filings previously obtained or made and in full force and effect and the filing of the articles supplementary adopted in connection with the
issuance of the Shares with the State Department of Assessments and Taxation of Maryland.</FONT>        </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">14.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The execution and delivery of, and performance of the Fund's obligations under, each of the Fund Agreements have been duly authorized by all necessary action of the Fund, and the Fund has duly executed and delivered each of the
Fund Agreements.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">15.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Each of the Fund Agreements constitutes the legal, valid and binding obligation of the Fund, enforceable against it in accordance with its terms, except as the enforceability thereof may be limited by the effect of bankruptcy,
insolvency, fraudulent transfer, reorganization, receivership, moratorium, and other, similar laws affecting the rights and remedies of creditors generally and by general principles of equity (whether applied by a court of law or equity), and except
as rights to indemnity thereunder may be limited by federal or state securities laws.</FONT>    </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">In addition, such counsel shall state that they are not opining as to factual matters, and the character of determinations involved in the registration process is such that such counsel are not
passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the information included or incorporated by reference in the Registration Statement and the Prospectus or in any amendment or supplement thereto. Such
counsel may assume the correctness and completeness of the information included or incorporated by reference therein, and such counsel need have made no independent investigation or verification of that information. However, such counsel shall state
that they have participated in the preparation of the Registration Statement and the Prospectus and in discussions with certain officers and directors of the Fund, certain officers and employees of the Adviser and your Representative, and such
counsel shall have reviewed certain Fund records and documents relative to the Fund and the Adviser. Based on that participation and review, such counsel shall advise you that nothing has come to such counsel's attention that causes such counsel to
believe that the Registration Statement, including any Rule 462(b) Registration Statement and any Rule 430A Information, at the time it became effective, contained an untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements</FONT></P>
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<FONT face="serif">B-3</FONT></P>

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<FONT face="serif">therein not misleading, or that the Prospectus or any amendment or supplement thereto, at the time that the Prospectus was issued or at the Closing Date, included an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. This paragraph does not address, and such counsel need express no opinion with respect to, the financial
statements and related notes and schedules, and other financial, accounting, and statistical information, included in, incorporated by reference in, or omitted from the Registration Statement, the Prospectus, or any amendment or supplement to either
of them. Such counsel need also express no opinion with respect to any matter relating to compliance with financial covenants or financial requirements.</FONT><B><FONT face="serif"> </FONT></B></P>
<P align="center">
<FONT face="serif">B-4</FONT></P>

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<FONT face="serif">SCHEDULE C</FONT><BR>
</TD></TR></TABLE>
<center>
</center>
<P align="center">
<FONT face="serif">FORM OF OPINION OF INTERNAL COUNSEL<br>
</FONT><FONT face="serif">REGARDING DUFF &amp; PHELPS INVESTMENT MANAGEMENT CO. </FONT></P>
<P>
<FONT face="serif">i. The Investment Adviser is validly existing as a corporation under the laws of the State of Illinois with full corporate power and authority to own or lease all of the assets owned or leased by it and to conduct its business as
described in the Registration Statement and Prospectus and to enter into and perform its obligations under the Investment Adviser Agreements. </FONT></P>
<P>
<FONT face="serif">ii. The Investment Adviser is duly registered as an investment adviser under the Advisers Act and is not prohibited by the Advisers Act or the Investment Company Act from acting as investment adviser for the Fund under the
Investment Advisory Agreement as contemplated by the Registration Statement and the Prospectus. </FONT></P>
<P>
<FONT face="serif">iii. Each Investment Adviser Agreement has been duly and validly authorized, executed and delivered by the Investment Adviser; each Investment Adviser Agreement complies in all material respects with all provisions of the
Investment Company Act and the Advisers Act; and assuming due authorization, execution and delivery by each of the other parties thereto, each Investment Adviser Agreement constitutes a legal, valid and binding obligation of the Investment Adviser,
enforceable against the Investment Adviser in accordance with its terms, (1) subject, as to enforcement, to applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law) and (2) except as rights to indemnity thereunder may be limited by public policy or federal or state securities laws
(except that counsel may state that it expresses no opinion as to the reasonableness or fairness of compensation payable under the Investment Advisory Agreement). </FONT></P>
<P>
<FONT face="serif">iv. Neither (A) the execution and delivery by the Investment Adviser of any Investment Adviser Agreement nor (B) the consummation by the Investment Adviser of the transactions contemplated by, or the performance of its obligations
under, any Investment Adviser Agreement conflicts or will conflict with, or results or will result in a breach of, (i) the articles of incorporation or by-laws of the Investment Adviser, (ii) any agreement or instrument listed on an Annex to such
opinion (which the Investment Adviser, in an officer's certificate accompanying such opinion or otherwise delivered to the Underwriters on the Closing Date, shall have identified as the only material agreements or instruments to which the Investment
Adviser is a party or by which the Investment Adviser is bound) or (iii) any applicable United States federal or New York or Illinois law, rule or regulation (other than state securities or "blue sky" laws, as to which such counsel need express no
opinion), or order of any New York or Illinois or United States federal court, governmental instrumentality, securities exchange or association or arbitrator, (or any other orders of any court, governmental instrumentality, securities</FONT></P>
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<FONT face="serif">C-1</FONT></P>

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<FONT face="serif">exchange or association or arbitrator, whether foreign or domestic, in any other jurisdiction, as set forth on an Annex to such opinion (which the Investment Adviser, in an officer's certificate accompanying such opinion or
otherwise delivered to the Underwriters on the Closing Date, shall have identified as the only orders that are material to the Investment Adviser) in each case specifically naming the Investment Adviser and (in the case of New York or Illinois or
United States federal orders) known to such counsel, except in the case of each of clauses (ii) and (iii) for such conflicts or breaches which do not, either alone or in the aggregate, have a material adverse effect on the Investment Adviser's
ability to perform its obligations under any Investment Adviser Agreement. </FONT></P>
<P>
<FONT face="serif">v. To such counsel's knowledge, no consent, approval, authorization or order of any New York or Illinois or United States federal court, governmental agency or body or securities exchange or association is required for the
consummation of the transactions contemplated in, or the performance by the Investment Adviser of its obligations under, the Underwriting Agreement or any Investment Adviser Agreement, except (i) such as have been obtained under the United States
federal securities laws and (ii) may be required by the New York Stock Exchange or under state securities or "blue sky" laws, in connection with the purchase and distribution of the Shares by the Underwriters pursuant to the Underwriting Agreement.
</FONT></P>
<P>
<FONT face="serif">vi. To such counsel's knowledge, there is no legal or governmental proceeding pending or threatened against the Investment Adviser that is either (i) required to be described in the Registration Statement or Prospectus that is not
described therein or (ii) which would, under Section 9 of the Investment Company Act, make the Investment Adviser ineligible to act as the Fund's investment adviser. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Such counsel shall state that for purposes of the foregoing opinions, they assume that the law of the State of
 Connecticut is the same as the law of the State of New York and the law of the State of Illinois. Such counsel shall state that they have participated in the preparation of the Registration Statement and the Prospectus and in discussions with certain officers and directors of the Fund, certain
officers and employees of the Investment Adviser and your Representative, and such counsel shall have reviewed certain Fund records and documents relative to the Fund and the Investment Adviser. Based on that participation and review, such counsel
shall advise you that nothing has come to such counsel's attention that causes such counsel to believe that the Registration Statement, including any Rule 462(b) Registration Statement and any Rule 430A Information, at the time it became effective,
contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus or any amendment or supplement thereto, at the time
that the Prospectus was issued or at the Closing Date, included an untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. This paragraph does not address, and such counsel need express no opinion with respect to, the financial statements and related notes and schedules, and other financial, accounting, and statistical information, included in,
incorporated by reference in, or omitted from the Registration Statement, the Prospectus, or any amendment or</FONT></P>
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<FONT face="serif">C-2</FONT></P>

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<P>
<FONT face="serif">supplement to either of them. Such counsel need also express no opinion with respect to any matter relating to compliance with financial covenants or financial requirements.</FONT><B><FONT face="serif"> </FONT></B></P>
<P align="center">
<FONT face="serif">C-3</FONT></P>

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  <TABLE>
    <TR><TD nowrap>
    <FONT face="serif">SCHEDULE D</FONT><BR>
    </TD></TR>
  </TABLE>
  <TABLE>
    <TR><TD nowrap>
    <FONT face="serif">FORM OF ACCOUNTANT'S LETTER</FONT><BR>
    </TD></TR>
  </TABLE>
</center>
<TABLE><TR><TD nowrap>
<FONT face="serif">March , 2006</FONT><BR>
</TD></TR></TABLE>
<TABLE><TR><TD width="361" nowrap>
<FONT face="serif">DNP Select Income Fund Inc.</FONT><BR>
<FONT face="serif">55 East Monroe Street </FONT><BR>
<FONT face="serif">Suite 3600 </FONT><BR>
<FONT face="serif">Chicago, IL 60603 </FONT><BR>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and</FONT><BR>
<FONT face="serif">UBS Securities LLC </FONT><BR>
<FONT face="serif">As Managing Representative </FONT><BR>
<FONT face="serif">c/o UBS Securities LLC </FONT><BR>
<FONT face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;299 Park Avenue </FONT><BR>
<FONT face="serif"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New York, NY 10171 </FONT><BR>
</TD></TR></TABLE>
<TABLE><TR><TD nowrap>
<FONT face="serif">Dear Ladies and Gentlemen:</FONT><BR>
</TD></TR></TABLE>
<P>
<FONT face="serif">We have audited the statement of assets and liabilities, including the schedule of investments, of the DNP Select Income Fund Inc. (the "Fund") as of December 31, 2005 and the related statements of operations and cash flows for
the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended incorporated by reference in the Registration Statement
(No. 333-130590) on Form N-2 for the registration of 4,000 shares each of Series M, Series W and Series F Auction Preferred Stock (being referred to herein as the "Auction Preferred Stock") filed by the Fund under the Securities Act of 1933 (the
"Act") and under the Investment Company Act of 1940 (the "1940 Act") (Registration No. 811-04915); such financial statements and our report with respect thereto are incorporated by reference in such Registration Statement as amended as of March &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2006, herein referred to as the "Registration Statement." In connection with the Registration Statement: </FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">1.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">We are an independent registered public accounting firm with respect to the Fund within the meaning of the Act, the 1940 Act and the applicable published rules and regulations thereunder adopted by the Securities and Exchange
Commission ("SEC") and the Public Company Accounting Oversight Board (United States) ("PCAOB").</FONT>  </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">2.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">In our opinion, the financial statements audited by us and included in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Act, the 1940 Act and the related
rules and regulations adopted by the SEC.</FONT>        </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">D-1</FONT></P>

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        <TD nowrap valign=top>
<FONT face="serif">3.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">We have not audited any financial statements of the Fund as of any date or for any period subsequent to December 31, 2005. The purpose (and therefore the scope) of our audit for the year ended December 31, 2005 was to enable us to
express our opinion on the financial statements at December 31, 2005 and for the year then ended. Therefore, we are unable to express and do not express an opinion on the financial position, results of operations, cash flows, changes in net assets,
or the financial highlights of the Fund as of any date or for any period subsequent to December 31, 2005.</FONT>        </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">4.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">For purposes of this letter, we have read the 2006 minutes of meetings of the shareholders and the Board of Directors of the Fund as set forth in the minute book through March 17, 2006, officials of the Fund having advised us that
the minutes of all such meetings through that date were set forth therein (our work did not extend to March 23, 2006).</FONT>   </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
<TD>&nbsp;</TD> <TD>
<FONT face="serif">The foregoing procedure does not constitute an audit made in accordance with the standards of the PCAOB. Accordingly, we make no representations as to the sufficiency of the foregoing procedures for your purposes.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">5.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Fund officials have advised us that no financial statements as of any date or for any period subsequent to December 31, 2005 are available; accordingly, the procedures carried out by us with respect to changes in financial
statement items after December 31, 2005 have, of necessity, been limited. We have inquired of certain officials of the Fund who have responsibility for financial and accounting matters as to whether there was any change at March 17, 2006 in the
capital stock or net assets of the Fund as compared with the amounts shown on the audited December 31, 2005 financial statements included in the Registration Statement. On the basis of these inquiries and our reading of the minutes as described in
4. above, nothing came to our attention that caused us to believe that there was any such change in capital stock or net assets of the Fund, except that Fund officials have advised us that net assets increased from &#36;1,904,206,908 at December 31,
2005 to &#36;1,986,442,614 at March 17, 2006.</FONT>    </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">6.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Our audits of the financial statements for the periods referred to in the introductory paragraph of this letter was comprised of audit tests and procedures deemed necessary for the purpose of expressing an opinion on such
financial statements taken as a whole. For neither the periods referred to therein nor any other period did we perform audit tests for the purpose of expressing an opinion on individual balances of accounts or summaries of selected transactions such
as those enumerated below and, accordingly, we do not express an opinion thereon.</FONT>        </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">7.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">At your request, we have read and performed procedures with regard to the following as set forth in the Registration Statement on the indicated pages:</FONT>        </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
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<FONT face="serif">D-2</FONT></P>

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<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
  <TD width=11% align=center>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD width=11% align=center>
<FONT face="serif">Prospectus</FONT>
        </TD>
        <TD width=89% align=left>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
  <TD width=11% align=center>&nbsp;</TD>
        <TD width=11% align=center>
<U><FONT face="serif">Page</FONT></U>
        </TD>
        <TD width=89% align=left>
<U><FONT face="serif">Procedures and findings</FONT></U>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=3>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
  <TD width=11% align=right>&nbsp;</TD>
        <TD width=11% align=right valign="top">
      <div align="left"><FONT face="serif">2.</FONT>
    </div></TD>
        <TD width=89% align=left>
<B><FONT face="serif">"Use of Leverage" </FONT></B><FONT face="serif">&#150; We compared the proceeds received from outstanding CP Notes of $197,255,382 at December 31, 2005 to the audited financial statements as of December 31, 2005 and found it to be in agreement.</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=3>

          <div align="left"></div></TD>
</TR>
<TR align="left" valign="top">
  <TD width=11%>&nbsp;</TD>
        <TD width=11%>
      <div align="left"><FONT face="serif">11-13.</FONT>
          </div></TD>
        <TD width=89%>
<B><FONT face="serif">"Financial Highlights" </FONT></B><FONT face="serif">&#150;  In the table "Selected Per Share Data and Ratios", we compared the amounts or percentages in the columns titled 2005, 2004, 2003 and 2002 to the Financial Highlights table included in the audited financial statements referred to in the introductory paragraph of this letter and found them to be in agreement.</FONT>&nbsp;
        </TD>
</TR>
<TR align="left" valign="top">
        <TD colspan=3>

          <div align="left"></div></TD>
</TR>
<TR align="left" valign="top">
  <TD width=11%>&nbsp;</TD>
        <TD width=11%>

          <div align="left"></div></TD>
        <TD width=89%>
<FONT face="serif">In the table, "Information Regarding Senior Securities", we compared amounts in the columns "Aggregate Amount Outstanding", "CP Notes Average Market Value per $100,000 of Principal Amount", "Aggregate Amount Outstanding" and "Liquidation Preference and Average Market Value Per Share" for the years December 31, 2005, 2004, 2003 and 2002 to the audited financial statements for the respective years ended December 31, 2005, 2004, 2003 and 2002 and found them to be in agreement.</FONT>&nbsp;
        </TD>
</TR>
<TR align="left" valign="top">
        <TD colspan=3>

          <div align="left"></div></TD>
</TR>
<TR align="left" valign="top">
  <TD width=11%>&nbsp;</TD>
        <TD width=11%>

          <div align="left"></div></TD>
        <TD width=89%>
<FONT face="serif">We recomputed the amounts in the columns titled "Asset Coverage per $1,000 of Principal Amount (unaudited)" and "Asset Coverage per Share (unaudited)" for the years ended December 31, 2005, 2004, 2003 and 2002 as described in the Registration Statement and found them to be in agreement. </FONT>&nbsp;
        </TD>
</TR>
<TR align="left" valign="top">
        <TD colspan=3>

          <div align="left"></div></TD>
</TR>
<TR align="left" valign="top">
  <TD width=11%>&nbsp;</TD>
        <TD width=11%>
      <div align="left"><FONT face="serif">13-14.</FONT>
          </div></TD>
        <TD width=89%>
<B><FONT face="serif">"The Fund" </FONT></B><FONT face="serif">&#150; We compared the range of interest rates on CP Notes during the year ended December 31, 2005, of 2.60% to 4.54% and the proceeds received from outstanding CP Notes of $197,255,382 at December 31, 2005 to the audited financial statements as of December 31, 2005 and found them to be in agreement. </FONT>&nbsp;
        </TD>
</TR>
<TR align="left" valign="top">
        <TD colspan=3>

          <div align="left"></div></TD>
</TR>
<TR align="left" valign="top">
  <TD width=11%>&nbsp;</TD>
        <TD width=11%>

          <div align="left"></div></TD>
        <TD width=89%>
<FONT face="serif">We compared the number of Common and Preferred Stock as of December 31, 2005 in the column titled "Number of shares outstanding" to the audited financial statements as of December 31, 2005 and found them to be in agreement.</FONT>&nbsp;
        </TD>
</TR>
<TR align="left" valign="top">
        <TD colspan=3>

          <div align="left"></div></TD>
</TR>
<TR align="left" valign="top">
  <TD width=11%>&nbsp;</TD>
        <TD width=11%>
      <div align="left"><FONT face="serif">15.</FONT>
          </div></TD>
        <TD width=89%>
<B><FONT face="serif">"Capitalization" </FONT></B><FONT face="serif">&#150; We compared the dollar amounts shown in the column titled "Actual" to the audited financial statements as of December 31, 2005 and found them to be in agreement.  We compared the dollar amounts shown under the caption "Actual" with the dollar amounts shown under the caption "As Adjusted" </FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>

<P align="center">
<FONT face="serif">D-3</FONT></P>

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<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD width="113">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD width="113">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD width="988">
<FONT face="serif">and found them to be in agreement with the exception of (i) "Preferred Stock" which has been adjusted for the issuance of 12,000 shares of &#36;25,000 stated value of Auction Preferred Stock amounting to &#36;300,000,000, and (ii)
"Paid-in surplus" and "Net assets applicable to common stock" which each have been adjusted for the underwriting discounts and offering costs of &#36;3,408,100 related to the issuance of the Auction Preferred Stock, (however, we do not comment as to
the reasonableness of the underwriting discounts or offering costs or whether such issuance will actually take place). We express no opinion on the reasonableness of the amounts in that they were based on financial statements and other information
that were not audited by us.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">15.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Portfolio composition" </FONT></B><FONT face="serif">&#150; We recomputed the market value of the Fund's portfolio, exclusive of short-term instruments, of 78% as invested in equity securities and 22% as invested in other
securities, based on the respective amounts in the audited financial statements as of December 31, 2005 and found them to be in agreement.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">18.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Lending of portfolio securities" </FONT></B><FONT face="serif">&#150; We compared the market value of securities loaned of &#36;659,052,519 and the payable upon return of securities on loan of &#36;683,471,220 to the audited
financial statements as of December 31, 2005 and found them to be in agreement.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">19.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Use of Leverage" </FONT></B><FONT face="serif">&#150; We compared the proceeds received from outstanding CP Notes of &#36;197,255,382 at December 31, 2005 to the audited financial statements as of December 31, 2005 and found
it to be in agreement.</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">23.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Subordination risk" </FONT></B><FONT face="serif">&#150; We compared the proceeds received from outstanding CP Notes of &#36;197,255,382 at December 31, 2005 to the audited financial statements as of December 31, 2005 and
found it to be in agreement.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">29.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Investment Adviser" </FONT></B><FONT face="serif">&#150; We compared the investment advisory fees received of &#36;14,771,365, &#36;13,869,531 and &#36;13,069,523 for the years ended December 31, 2005, 2004 and 2003 to the
audited financial statements for the years ended December 31, 2005, 2004 and 2003 and found them to be in agreement.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">38.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Rating Agency Guidelines and Asset Coverage" </FONT></B><FONT face="serif">&#150; We have obtained an analysis prepared by the Fund's administrator, Hilliard Lyons computing the asset coverage for the Fund as of December 31,
2005, assuming i) the issuance on that date of all shares of Auction Preferred Stock offered in the Registration Statement and</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">D-4</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>

<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
<TD>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD> <TD>
<FONT face="serif">giving effect to the deduction of related sales load and related offering costs estimated at &#36;3,408,100 and ii) the issuance on that date of all shares of Auction Preferred Stock offered in the Registration Statement and
giving effect to the deduction of related sales load and related offering costs estimated at &#36;3,408,100 and that all amounts outstanding under the CP notes had been repaid in full as of such date. Based on the analysis prepared by Hilliard
Lyons, the asset coverage was 291% and 338%, respectively.</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">46.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Description of capital structure" </FONT></B><FONT face="serif">&#150; We compared the number of shares of common and preferred stock outstanding of 223,835,635 and 5,000, respectively, to the audited financial statements as
of December 31, 2005 and found them to be in agreement.</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">47.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<B><FONT face="serif">"Description of Borrowings" </FONT></B><FONT face="serif">- We compared the range of interest rates on CP Notes during the year ended December 31, 2005, of 2.60% to 4.54% and the proceeds received from outstanding CP Notes of
&#36;197,255,382 at December 31, 2005 to the audited financial statements as of December 31, 2005 and found them to be in agreement.</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">8.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">It should be understood that we make no representations as to questions of legal interpretation or as to the sufficiency for your purposes of the procedures enumerated in the preceding paragraph; also, such procedures would not
necessarily reveal any material misstatement of the information identified in 7. above. Further, we have addressed ourselves solely to the foregoing data as set forth in the Registration Statement and make no representations as to the adequacy of
disclosure or as to whether material facts have been omitted.</FONT>    </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">9.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">This letter is solely for the information of the addressees and to assist the underwriters in conducting and documenting their investigation of the affairs of the Fund in connection with the offering of the securities covered by
the Registration Statement, and is not to be used, circulated, quoted or otherwise referred to within or without the underwriting group for any other purpose, including, but not limited to, the registration, purchase or sale of securities, nor is it
to be filed with or referred to in whole or in part in the Registration Statement or any other document, except that reference may be made to it in the underwriting agreement or in any list of closing documents pertaining to the offering of the
securities covered by the Registration Statement.</FONT>        </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<TABLE width="33%" align="right">
  <TR><TD nowrap>
    <center>
      <FONT face="serif">Very truly yours,</FONT><BR>
    </center></TD></TR></TABLE>
<P align="center">
<FONT face="serif"><br>
D-5</FONT></P>

<HR noshade  width="100%" size=4>

</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K(10)
<SEQUENCE>7
<FILENAME>c40133_ex99k10.txt
<TEXT>
                                                                 Exhibit 99.2K10




                           DNP SELECT INCOME FUND INC.


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

                            AUCTION AGENCY AGREEMENT

                           dated as of March [ ], 2006

                                   Relating to

                             Auction Preferred Stock

                                       of

                           DNP SELECT INCOME FUND INC.

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



                              THE BANK OF NEW YORK
                                as Auction Agent


<PAGE>

         This Auction Agency  Agreement  (this  "Agreement"),  dated as of March
___,  2006,  is between DNP Select Income Fund Inc. (the "Fund") and The Bank of
New York, a New York banking corporation.

         The Fund proposes to issue three series of shares of auction  preferred
stock, par value $.001 per share,  designated  Series M Auction Preferred Stock,
liquidation  preference  $25,000 per share,  Series W Auction  Preferred  Stock,
liquidation  preference $25,000 per share, and Series F Auction Preferred Stock,
liquidation  preference  $25,000 per share,  and may in the future  issue one or
more additional  series of Auction  Preferred Stock  (collectively,  the "APS"),
pursuant to Articles Supplementary (as defined below).

         The Fund desires that The Bank of New York  perform  certain  duties as
agent in  connection  with  each  Auction  (as  defined  below)  of APS (in such
capacity, the "Auction Agent"), and as the transfer agent,  registrar,  dividend
paying agent and redemption agent with respect to the APS (in such capacity, the
"Paying Agent"),  upon the terms and conditions of this Agreement,  and the Fund
hereby  appoints The Bank of New York as said Auction  Agent and Paying Agent in
accordance with those terms and conditions (hereinafter generally referred to as
the "Auction Agent," except in Sections III and IV below).

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants contained herein, the Fund and the Auction Agent agree as follows:

I.       DEFINITIONS AND RULES OF CONSTRUCTION.

         1.1 TERMS DEFINED BY REFERENCE TO THE ARTICLES SUPPLEMENTARY.

         Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary.

         1.2 CERTAIN DEFINED TERMS.

         As used herein, the following terms shall have the following  meanings,
unless the context otherwise requires:

                  (a)  "Agent  Member" of any  Person  shall mean such  Person's
agent member or a  participant  in the  Securities  Depository  that will act on
behalf of a Bidder.

                  (b)   "Articles   Supplementary"   shall  mean  any   articles
supplementary  filed by the Fund with the State  Department of  Assessments  and
Taxation of Maryland,  specifying the powers,  preferences  and rights of one or
more series of APS.

                  (c) "Auction" shall have the meaning  specified in Section 2.1
hereof.

                  (d)  "Auction  Procedures"  shall mean the Auction  Procedures
that are set forth in Part II of the Articles Supplementary.

                  (e)  "Authorized  Officer"  shall  mean each  Vice  President,
Assistant Vice  President and Assistant  Treasurer of the Auction Agent assigned
to the Dealing and Trading Group of its Corporate Trust Division and every other
officer or employee of the Auction Agent  designated as an "Authorized  Officer"
for purposes  hereof in a written  communication  from the Auction  Agent to the
Fund.

                  (f)  "Broker-Dealer   Agreement"  shall  mean  each  agreement
between the Auction Agent and a broker-dealer substantially in the form attached
hereto as EXHIBIT A.

<PAGE>

                  (g)  "Closing"  shall mean the date the Fund  consummates  the
transactions for the issuance and sale of the APS.

                  (h) "Existing  Holder" shall mean, with respect to the Auction
Agent, such Person who is a Broker-Dealer,  and with respect to a Broker-Dealer,
such Person who is a Beneficial Owner of shares of APS.

                  (i) "Fund  Officer"  shall mean the Chairman,  the  President,
each Vice  President  (whether  or not  designated  by a number or word or words
added before or after the title "Vice President"), the Secretary, the Treasurer,
each  Assistant  Secretary  and each  Assistant  Treasurer of the Fund and every
other  officer  or  employee  of the Fund  designated  as a "Fund  Officer"  for
purposes hereof in a written notice from the Fund to the Auction Agent.

                  (j)  "Holder"  shall be a holder of record of one or more APS,
listed as such in the share register  maintained by the Paying Agent pursuant to
Section 4.6 hereof.

                  (k) "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.

         1.3 RULES OF CONSTRUCTION.

         Unless the context or use  indicates  another or  different  meaning or
intent, the following rules shall apply to the construction of this Agreement:

                  (a) Words  importing  the singular  number  shall  include the
plural number and vice versa.

                  (b)  The  captions   and   headings   herein  are  solely  for
convenience  of reference and shall not  constitute a part of this Agreement nor
shall they affect its meaning, construction or effect.

                  (c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.

                  (d) All references herein to a particular time of day shall be
to New York City time.

II.      THE AUCTION.

         2.1 PURPOSE; INCORPORATION BY REFERENCE OF AUCTION PROCEDURES.

                  (a) The Articles  Supplementary  provides that the  Applicable
Dividend Rate on the APS for each  Dividend  Period  therefor  after the initial
Dividend  Period  shall be the rate per  annum  that a  commercial  bank,  trust
company or other  financial  institution  appointed by the Fund advises  results
from the implementation of the Auction Procedures. The Board of Directors of the
Fund has adopted a resolution  appointing  The Bank of New York as Auction Agent
for purposes of the Auction  Procedures.  The Auction Agent hereby  accepts such
appointment  and  agrees  that,  on each  Auction  Date,  it  shall  follow  the
procedures  set forth in this  Section  II and the  Auction  Procedures  for the
purpose of  determining  the  Applicable  Dividend Rate for the APS for the next
Dividend  Period.  Each periodic  operation of such  procedures  is  hereinafter
referred to as an "Auction."

                  (b) All of the provisions  contained in the Auction Procedures
are incorporated herein by reference in their entirety and shall be deemed to be
a part  hereof to the same  extent as if such  provisions  were set forth  fully
herein.  In the event of any  conflict  between the Auction  Procedures  and the
terms hereof, the Auction Procedures shall govern and control.

                                       2
<PAGE>

         2.2 PREPARATION  FOR EACH AUCTION;  MAINTENANCE OF REGISTRY OF EXISTING
HOLDERS.

                  (a) As of the date hereof,  the Fund shall provide the Auction
Agent with a list of the Broker-Dealers previously approved by the Fund pursuant
to Section  2.5(d)  hereof and shall cause to be delivered to the Auction  Agent
for execution by the Auction Agent a Broker-Dealer Agreement signed by each such
Broker-Dealer. The Auction Agent shall keep such list current and accurate based
solely upon information  provided to it by the Fund and shall indicate  thereon,
or on a separate list, the identity of each Existing Holder,  if any, whose most
recent Order was submitted by a Broker-Dealer  on such list and resulted in such
Existing Holder continuing to hold or purchase APS. Not later than five Business
Days  prior  to  any  Auction  Date  for  which  any  change  in  such  list  of
Broker-Dealers  is to be  effective,  the Fund shall notify the Auction Agent in
writing  of  such  change  and,  if  any  such  change  is  the  addition  of  a
Broker-Dealer  to such list, the Fund shall cause to be delivered to the Auction
Agent for execution by the Auction  Agent a  Broker-Dealer  Agreement  signed by
such  Broker-Dealer.  The Auction Agent shall have entered into a  Broker-Dealer
Agreement  with  each  Broker-Dealer  prior  to the  participation  of any  such
Broker-Dealer in any Auction.

                  (b) The  provisions  contained  in  Section 3 of Part I of the
Articles Supplementary  concerning Special Dividend Periods and the notification
of a Special  Dividend  Period  will be  followed by the Fund and, to the extent
applicable,  the  Auction  Agent,  and  the  provisions  contained  therein  are
incorporated  herein by reference in their  entirety and shall be deemed to be a
part of this Agreement to the same extent as if such  provisions  were set forth
fully herein.

                  (c) The Applicable Percentage and the Applicable Spread on the
date of this Agreement are those rates as determined by the Fund and provided to
the  Auction  Agent on the date  hereof.  If there is any  change in the  credit
rating of APS by the rating agency (or substitute or successor  rating agencies)
referred to in the definition of "Applicable Percentage" and "Applicable Spread"
resulting in any change in the  Applicable  Percentage or Applicable  Spread for
APS after the date given  herewith,  the Fund shall notify the Auction  Agent in
writing of such change in the Applicable  Percentage or Applicable  Spread prior
to 12:00 Noon on the  Business Day prior to the next Auction Date for any series
of APS succeeding such change.  In determining the Maximum Dividend Rate for any
series of APS on any Auction Date as set forth in 2.2(d)(i) hereof,  the Auction
Agent shall be entitled to rely on the last Applicable Percentage and Applicable
Spread for APS of which it has most recently  received notice from the Fund (or,
in the absence of such notice,  the percentage or spread determined by reference
to the definition of Applicable Percentage and Applicable Spread, respectively).

                  (d)  (i)  On  each  Auction  Date,  the  Auction  Agent  shall
determine the  Applicable  Dividend Rate and the Maximum  Dividend  Rate. If any
U.S. Treasury Note Rate is not quoted on an interest or bond equivalent,  as the
case may be,  basis,  the  Auction  Agent  shall  convert the quoted rate to the
interest or bond equivalent  thereof as set forth in the definition of such rate
in the  Articles  Supplementary  if the rate  obtained by the  Auction  Agent is
quoted on a discount  basis,  or if such rate is quoted on a basis other than an
interest or bond  equivalent  or discount  basis the Auction Agent shall convert
the quoted rate to an interest or bond equivalent rate after  consultation  with
the Fund as to the method of such conversion.

                           (ii)  If  any  LIBOR  Rate  is  to be  determined  by
reference to Moneyline's  Telerate Page 3750 or by rate  quotations  provided by
LIBOR  Dealer(s),  as the case may be,  and  Moneyline's  Telerate  Page 3750 is
unavailable or the LIBOR Dealer(s) fail to provide rate quotations,  as the case
may be (as  described in the  Articles  Supplementary),  then the Auction  Agent
shall  immediately  notify  the Fund so that the Fund can  determine  whether to
select a Substitute LIBOR Dealer(s) to provide such rate  quotation(s) not being
supplied.

                                       3
<PAGE>

                           (iii) If any U.S.  Treasury  Note Rate is to be based
on rates supplied by U.S.  Government  Securities Dealers and one or more of the
U.S.  Government  Securities  Dealers  shall  not  provide a  quotation  for the
determination  of  such  U.S.  Treasury  Note  Rate,  the  Auction  Agent  shall
immediately  notify the Fund so that the Fund can determine  whether to select a
Substitute  U.S.  Government  Securities  Dealer or Substitute  U.S.  Government
Securities  Dealers to provide the quotation or quotations not being supplied by
any U.S. Government Securities Dealer or U.S. Government Securities Dealers. The
Fund shall promptly advise the Auction Agent of any such selection.

                  (e) (i) The Auction Agent shall maintain a current registry of
the Existing Holders of the APS (the "Registry") based upon information provided
to it by Broker-Dealers for purposes of each individual Auction.  The Fund shall
use  commercially  reasonable  efforts to provide or cause to be provided to the
Auction Agent within ten Business Days  following the date of the Closing a list
of the  initial  Existing  Holders of APS,  and the  Broker-Dealer  of each such
Existing  Holder through which such Existing Holder  purchased such shares.  The
Auction Agent may  conclusively  rely upon, as evidence of the identities of the
Existing  Holders,  such list,  the results of each Auction and notices from any
Existing Holder, the Agent Member of any Existing Holder or the Broker-Dealer of
any Existing Holder with respect to such Existing  Holder's  transfer of any APS
to another Person.

                           (ii) In the event of any partial  redemption  of APS,
the Fund shall promptly request the Securities  Depository to notify the Auction
Agent in writing of the  identities  of the Agent  Members  (and the  respective
numbers  of shares)  from the  accounts  of which  shares  have been  called for
redemption  and the  person  or  department  at such  Agent  Member  to  contact
regarding  such  redemption.  At least two  Business  Days prior to the  Auction
preceding  the date of  redemption,  the Auction  Agent shall request each Agent
Member so identified  to disclose to the Auction  Agent (upon  selection by such
Agent Member of the Existing Holders whose shares are to be redeemed) the number
of APS of each  such  Existing  Holder,  if any,  to be  redeemed  by the  Fund,
provided that the Auction Agent has been  furnished  with the name and telephone
number  of a person or  department  at such  Agent  Member  from  which it is to
request such information.  In the absence of receiving any such information with
respect to an Existing  Holder,  from such  Existing  Holder's  Agent  Member or
otherwise,  the  Auction  Agent may  continue to treat such  Existing  Holder as
having ownership of the number of APS shown in the Registry.

                           (iii) The Auction Agent shall  register a transfer of
the ownership of APS from an Existing Holder to another Existing  Holder,  or to
another  Person if  permitted  by the Fund,  only if (A) such  transfer  is made
pursuant to an Auction or (B) if such transfer is made other than pursuant to an
Auction,  the Auction Agent has been notified of such transfer in writing,  in a
notice substantially in the form of EXHIBIT B to the Broker-Dealer Agreement, by
such Existing Holder or by the Agent Member of such Existing Holder. The Auction
Agent is not required to accept any notice of transfer  delivered for an Auction
unless it is received by the Auction Agent by 3:00 p.m. on the Business Day next
preceding the Auction  Date.  The Auction Agent shall rescind a transfer made on
the Registry of any APS if the Auction Agent has been notified in writing,  in a
notice substantially in the form of EXHIBIT C to the Broker-Dealer Agreement, by
the Agent Member or the  Broker-Dealer  of any Person that (i) purchased any APS
and the  seller  failed  to  deliver  such  shares  or (ii) sold any APS and the
purchaser  failed to make payment to such Person upon  delivery to the purchaser
of such shares.

                  (f) The  Auction  Agent may,  but shall not be  obligated  to,
request  that  the  Broker  Dealers,  as set  forth  in  Section  3.2(b)  of the
Broker-Dealer  Agreements,  provide  the  Auction  Agent  with a list  of  their
respective  customers that such Broker-Dealers  believe are Beneficial Owners of
APS. The Auction Agent shall keep  confidential  any such  information and shall
not  disclose  any such  information  so provided  to any Person  other than the
relevant  Broker-Dealer and the Fund; provided,  however, that the Auction Agent
reserves the right and is authorized to disclose any such  information if (a) it
is ordered to do so by a court of competent  jurisdiction or a regulatory  body,
judicial or  quasi-judicial  agency or

                                       4
<PAGE>

authority having the authority to compel such  disclosure,  (b) it is advised by
its counsel  that its failure to do so would be unlawful or (c) failure to do so
would expose the Auction Agent to loss, liability,  claim, damage or expense for
which it has not received indemnity or security satisfactory to it.

         2.3 AUCTION SCHEDULE.

         The Auction Agent shall  normally  conduct  Auctions every 7 days after
the first Auction in accordance with the schedule set forth below. Such schedule
may be changed by the Auction Agent with the consent of the Fund,  which consent
shall not be withheld  unreasonably.  The Auction Agent shall give notice of any
such change to each  Broker-Dealer.  Such notice shall be received  prior to the
first Auction Date on which any such change shall be effective.

TIME                                            EVENT

By 9:30 a.m.                     Auction  Agent  shall  advise  the Fund and the
                                 Broker-Dealers  of Maximum Dividend Rate as set
                                 forth in Section 2.2(d)(i) hereof.

9:30 a.m. - 1:00 p.m.            Auction   Agent  shall   assemble   information
                                 communicated   to  it  by   Broker-Dealers   as
                                 provided  in  Section  2(a)  of  Part II of the
                                 Articles Supplementary.

Not earlier  than  1:00p.m.      Auction   Agent   shall   make   determinations
                                 pursuant  to  Section  3(a)  of  Part II of the
                                 Articles Supplementary.

By approximately  3:30 p.m.      Auction  Agent  shall  advise  the  Fund of the
                                 results of the  Auction as  provided in Section
                                 3(b) of Part II of the Articles Supplementary.

                                 Submitted  Bids and Submitted  Sell Orders will
                                 be  accepted  and  rejected in whole or in part
                                 and  APS  will  be  allocated  as  provided  in
                                 Section   4  of   Part   II  of  the   Articles
                                 Supplementary.  Auction Agent shall give notice
                                 of the Auction  results as set forth in Section
                                 2.4 hereof.

         Except  as  provided  in  the  immediately  following  paragraph,   the
Submission Deadline will be 1:00 p.m.; provided, however, that the Auction Agent
shall be  entitled  to  accept  Orders  from  any  Broker-Dealer  following  the
Submission  Deadline  (but in any event  prior to the  communication  of Auction
results as  provided  below) so long as the Orders from such  Broker-Dealer  are
accompanied by a certification  to the Auction Agent from such  Broker-Dealer to
the effect that (i) such Orders were  communicated to, and time-stamped by, such
Broker-Dealer  prior to the  Submission  Deadline and (ii) a force majeure event
(including,  without limitation, a technological failure or malfunction) impeded
the  Broker-Dealer's  ability  to  submit  the  Orders  prior to the  Submission
Deadline.

         The  Auction  Agent will follow the Bond  Market  Association's  Market
Practice U.S. Holiday  Recommendations  for shortened  trading days for the bond
markets  (the "BMA  Recommendation")  unless  the  Auction  Agent is  instructed
otherwise.  In  the  event  of a BMA  Recommendation  on an  Auction  Date,  the
Submission Deadline will be 11:30 a.m., instead of 1:00 p.m.

         2.4 NOTICE OF AUCTION RESULTS.

         On each Auction Date, the Auction Agent shall notify  Broker-Dealers of
the results of the Auction held on such date by  telephone  or other  electronic
means acceptable to the parties.

                                       5
<PAGE>

         2.5 BROKER-DEALERS.

                  (a) Not later than 12:00 noon on each Auction  Date,  the Fund
shall pay to the Auction  Agent in Federal  Funds or similar  same-day  funds an
amount  in  cash  equal  to (i) in the  case  of any  Auction  Date  immediately
preceding  a seven day  Dividend  Period,  the  product  of (A) a  fraction  the
numerator of which is the number of days in such Dividend Period  (calculated by
counting  the first  day of such  Dividend  Period  but  excluding  the last day
thereof)  and the  denominator  of which is 360,  times (B) 1/4 of 1%, times (C)
$25,000 times (D) the sum of the aggregate  number of outstanding  APS for which
the Auction is conducted  and (ii) in the case of any Special  Dividend  Period,
the  amount  determined  by mutual  consent  of the Fund and the  Broker-Dealers
pursuant to Section 3.5 of the Broker-Dealer Agreements. The Auction Agent shall
apply such  moneys as set forth in Section 3.5 of the  Broker-Dealer  Agreements
and shall  thereafter  remit to the Fund any remaining funds paid to the Auction
Agent pursuant to this Section 2.5(a).

                  (b) The  Fund  shall  not  designate  any  Person  to act as a
Broker-Dealer,  or permit an Existing Holder or a Potential  Beneficial Owner to
participate in Auctions through any Person other than a  Broker-Dealer,  without
the prior written  approval of the Auction  Agent,  which  approval shall not be
withheld unreasonably.

                  (c)  The  Auction  Agent  shall  terminate  any  Broker-Dealer
Agreement as set forth therein if so directed in writing by the Fund.

                  (d) Subject to Section 2.5(b)  hereof,  the Auction Agent from
time to time shall enter into such  Broker-Dealer  Agreements  as the Fund (with
the consent of UBS Securities LLC, which shall not be  unreasonably  withheld or
delayed) shall request in writing.

                  (e) The Auction Agent shall maintain a list of Broker-Dealers.

         2.6  OWNERSHIP  OF APS  AND  SUBMISSION  OF BIDS  BY THE  FUND  AND ITS
AFFILIATES.

         Neither  the Fund nor any  Affiliate  of the Fund may  submit  any Sell
Order or Bid, directly or indirectly,  in any Auction,  except that an Affiliate
of the Fund that is a Broker-Dealer  may submit a Sell Order or Bid on behalf of
a Beneficial  Owner or a Potential  Beneficial  Owner. The Fund shall notify the
Auction  Agent in writing  if the Fund or, to the best of the Fund's  knowledge,
any  Affiliate  of the Fund  becomes  a  Beneficial  Owner  of any APS.  Any APS
redeemed, purchased or otherwise acquired (i) by the Fund shall not be reissued,
except in accordance  with the  requirements  of the  Securities Act of 1933, as
amended  ("Securities  Act") or (ii) by its Affiliates  shall not be transferred
(other than to the Fund). The Auction Agent shall have no duty or liability with
respect to enforcement of this Section 2.6.

         2.7 ACCESS TO AND MAINTENANCE OF AUCTION RECORDS.

         The Auction  Agent shall  afford to the Fund,  its agents,  independent
public  accountants  and  counsel,  access at  reasonable  times  during  normal
business  hours to review and make  extracts  or copies (at the Fund's sole cost
and expense) of all books, records,  documents and other information  concerning
the conduct and results of Auctions, provided that any such agent, accountant or
counsel shall  furnish the Auction Agent with a letter from the Fund  requesting
that the Auction Agent afford such person access at least one Business Day prior
to the date of such access. The Auction Agent shall maintain records relating to
any  Auction  for a period of at least  two years  after  such  Auction  (unless
requested in writing by the Fund to maintain such records for such longer period
not in excess of four years, then for such longer period),  and such records, in
reasonable detail,  shall accurately and fairly reflect the actions taken by the
Auction Agent  hereunder.  The Fund agrees to keep  confidential any information
regarding the customers of any Broker-Dealer  received from the Auction Agent in
connection  with this  Agreement  or

                                       6
<PAGE>

any Auction, and shall not disclose such information or permit the disclosure of
such   information   without  the  prior  written   consent  of  the  applicable
Broker-Dealer  to anyone  except such agent,  accountant  or counsel  engaged to
audit or review the results of Auctions as  permitted  by this  Section 2.7. The
Fund reserves the right to disclose any such information if it is advised by its
counsel  that its  failure to do so would (i) be  unlawful  or (ii) expose it to
liability,   unless  the  Broker-Dealer   shall  have  offered   indemnification
satisfactory to the Fund. Any such agent,  accountant or counsel,  before having
access to such  information,  shall agree to keep such information  confidential
and not to disclose such  information or permit  disclosure of such  information
without the prior written consent of the applicable Broker-Dealer, provided that
such agent,  accountant  or counsel  may reserve the right to disclose  any such
information  if it is advised by its counsel that its failure to do so would (i)
be unlawful or (ii) expose it to liability,  unless the Broker-Dealer shall have
offered  indemnification  satisfactory to such agent, accountant or counsel. The
Auction Agent shall have no  responsibility  for, and shall have no liability in
connection with, the Fund's performance of its duties under this Section 2.7.

III. THE AUCTION AGENT AS PAYING AGENT.

         3.1 THE PAYING AGENT.

         The Board of Directors of the Fund has adopted a resolution  appointing
The Bank of New York as Auction Agent and Paying Agent.  The Paying Agent hereby
accepts  such  appointment  and agrees to act in  accordance  with its  standard
procedures and the provisions of the Articles  Supplementary which are specified
herein with respect to the APS and as set forth in this Section III.

         3.2 THE FUND'S NOTICES TO THE PAYING AGENT.

         Whenever any APS are to be redeemed, the Fund promptly shall deliver to
the  Paying  Agent a Notice of  Redemption,  which  will be mailed by the Paying
Agent to each Holder at least five  Business  Days prior to the date such Notice
of Redemption is required to be mailed  pursuant to the Articles  Supplementary.
The Paying Agent shall have no  responsibility to confirm or verify the accuracy
of any such Notice.

         3.3 THE FUND TO PROVIDE FUNDS FOR DIVIDENDS AND REDEMPTIONS.

                  (a) Not later than 12:00 noon on each  Dividend  Payment Date,
the Fund shall  deposit  with the Paying  Agent an  aggregate  amount of Federal
Funds or similar  same-day  funds equal to the declared  dividends to be paid to
Holders  on such  Dividend  Payment  Date,  and  shall  give  the  Paying  Agent
irrevocable  written  instructions  to apply such  funds to the  payment of such
dividends on such Dividend Payment Date.

                  (b) If the Fund  shall  give a Notice of  Redemption,  then by
noon of the date fixed for redemption,  the Fund shall deposit in trust with the
Paying  Agent an aggregate  amount of Federal  Funds or similar  same-day  funds
sufficient  to redeem such APS called for  redemption  and shall give the Paying
Agent irrevocable written instructions and authority to pay the redemption price
to the Holders of APS called for redemption upon surrender of the certificate or
certificates therefor.

         3.4 DISBURSING DIVIDENDS AND REDEMPTION PRICE.

         After  receipt  of the  Federal  Funds or  similar  same-day  funds and
instructions  from the Fund  described  in Section 3.3 above,  the Paying  Agent
shall pay to the  Holders  (or  former  Holders)  entitled  thereto  (i) on each
Dividend  Payment  Date,  dividends  on the APS,  and (ii) on any date fixed for
redemption, the redemption price of any shares of APS called for redemption. The
amount of dividends  for any  Dividend  Period to be paid by the Paying Agent to
Holders  will be  determined  by the Fund as set

                                       7
<PAGE>

forth in Section 2 of Part I of the Articles Supplementary. The redemption price
to be paid by the  Paying  Agent to the  Holders of any shares of APS called for
redemption  will  be  determined  as set  forth  in  Section  8 of Part I of the
Articles  Supplementary.  The Paying Agent shall have no duty to  determine  the
redemption  price and may rely on the amount  thereof set forth in the Notice of
Redemption.

IV.      THE PAYING AGENT AS TRANSFER AGENT AND REGISTRAR.

         4.1 ORIGINAL ISSUE OF SHARE CERTIFICATES.

         On the Date of  Original  Issue of the APS,  one  certificate  for each
series of APS shall be issued by the Fund and  registered  in the name of Cede &
Co., as nominee of the Securities  Depository,  and  countersigned by the Paying
Agent.

         4.2 REGISTRATION OF TRANSFER OR EXCHANGE OF SHARES.

         Except as provided in this  Section  4.2,  the APS shall be  registered
solely  in the  name  of  the  Securities  Depository  or  its  nominee.  If the
Securities  Depository shall give notice of its intention to resign as such, and
if  the  Fund  shall  not  have  selected  a  substitute  Securities  Depository
acceptable  to the  Paying  Agent  prior to such  resignation,  then  upon  such
resignation  the APS, at the Fund's  request,  may be registered for transfer or
exchange,  and a new  certificate  thereupon  shall be issued in the name of the
designated  transferee or transferees,  upon surrender of the old certificate in
form deemed by the Paying Agent to be properly  endorsed  for transfer  with (a)
all necessary  endorsers'  signatures  guaranteed in such manner and form and by
such guarantor as the Paying Agent may reasonably  require,  (b) such assurances
as the  Paying  Agent  shall deem  necessary  or  appropriate  to  evidence  the
genuineness and effectiveness of each necessary endorsement and (c) satisfactory
evidence of compliance  with all  applicable  laws relating to the collection of
taxes in  connection  with any  registration  of  transfer  or exchange or funds
necessary for the payment of such taxes.  If the  certificate for the APS is not
held by the  Securities  Depository  or its nominee,  payments  upon transfer of
shares in an Auction shall be made in Federal Funds or similar same-day funds to
the Auction Agent against delivery of certificates therefor.

         4.3 REMOVAL OF LEGEND.

         Any  request  for  removal  of a legend  indicating  a  restriction  on
transfer from a certificate evidencing APS shall be accompanied by an opinion of
counsel  stating  that  such  legend  may be  removed  and  such  shares  may be
transferred free of the restriction described in such legend, said opinion to be
delivered  under cover of a letter from a Fund  Officer  authorizing  the Paying
Agent to remove the legend on the basis of said opinion.

         4.4 LOST, STOLEN OR DESTROYED SHARES CERTIFICATES.

         The Paying Agent shall issue and register a replacement certificate for
a  certificate  represented  to have been lost,  stolen or  destroyed,  upon the
fulfillment of such requirements as shall be deemed  appropriate by the Fund and
by the Paying  Agent,  subject at all times to  provisions  of law, the Articles
Supplementary  governing such matters and  resolutions  adopted by the Fund with
respect to lost,  stolen or destroyed  securities.  The Paying Agent may issue a
new  certificate  in  exchange  for and upon  the  cancellation  of a  mutilated
certificate.  Any request by the Fund to the Paying Agent to issue a replacement
or new  certificate  pursuant  to this  Section  4.4  shall  be  deemed  to be a
representation  and warranty by the Fund to the Paying Agent that such  issuance
will comply with provisions of applicable law and the Articles Supplementary and
resolutions of the Fund.

                                       8
<PAGE>

         4.5 DISPOSITION OF CANCELED CERTIFICATES: RECORD RETENTION.

         The  Paying  Agent  shall  retain  stock  certificates  which have been
canceled in transfer or in exchange and accompanying documentation in accordance
with applicable rules and regulations of the Securities and Exchange  Commission
(the  "Commission")  for at  least  two  calendar  years  from  the date of such
cancellation.  The Paying Agent,  upon written request by the Fund, shall afford
to the Fund,  its agents and counsel  access at  reasonable  times during normal
business  hours to review and make  extracts  or copies (at the Fund's sole cost
and expense) of such certificates and accompanying  documentation.  Upon written
request  by the  Fund  at any  time  within  the  six  month  period  commencing
immediately after the expiration of this two-year period, the Paying Agent shall
deliver to the Fund the canceled  certificates and  accompanying  documentation.
The Fund,  at its expense,  shall  retain such records for a minimum  additional
period of at least four calendar  years from the date of delivery of the records
to the Fund and shall make such  records  available  during  this  period at any
time,  or from  time  to  time,  for  reasonable  periodic,  special,  or  other
examinations by representatives of the Commission. The Fund also shall undertake
to furnish to the Commission,  upon demand, either at its principal office or at
any regional  office,  complete,  correct and current hard copies of any and all
such records.

         4.6 STOCK REGISTER.

         The Paying Agent shall maintain the stock register, which shall contain
a list of the Holders,  the number of shares held by each Holder and the address
of each Holder.  The Paying Agent shall record in the stock  register any change
of  address  of a Holder  upon  written  notice by such  Holder.  In case of any
written  request or demand for the inspection of the share register or any other
books of the Fund in the  possession of the Paying Agent,  the Paying Agent will
notify  the Fund and secure  instructions  as to  permitting  or  refusing  such
inspection.  The Paying Agent reserves the right,  however, to exhibit the stock
register  or other  records to any  person in case it is advised by its  counsel
that its failure to do so would (i) be unlawful or (ii) expose it to  liability,
unless the Fund shall have offered  indemnification  satisfactory  to the Paying
Agent.

         4.7 RETURN OF FUNDS.

         Any funds  deposited  with the Paying  Agent by the Fund for any reason
(other  than for the  payment of amounts  due to the  Paying  Agent)  under this
Agreement, including for the payment of dividends or the redemption of APS, that
remain with the Paying  Agent  after 12 months  shall be repaid to the Fund upon
written request by the Fund.

V.       REPRESENTATIONS AND WARRANTIES.

         5.1 REPRESENTATIONS AND WARRANTIES OF THE FUND.

         The Fund represents and warrants to the Auction Agent that:

                           (i)  the  Fund  is  duly  organized  and  is  validly
existing as a corporation under the laws of the State of Maryland,  and has full
power to execute and deliver this  Agreement and to authorize,  create and issue
the APS;

                           (ii)  the  Fund is  registered  with  the  Commission
under the 1940 Act as a closed-end, diversified, management investment company;

                           (iii)  this  Agreement  has  been  duly  and  validly
authorized,  executed and delivered by the Fund and constitutes the legal, valid
and binding obligation of the Fund,  enforceable  against the Fund in accordance
with its terms, subject to bankruptcy, insolvency, reorganization and other laws
of general  applicability  relating  to or  affecting  creditors'  rights and to
general equitable principles;

                                       9
<PAGE>

                           (iv) the form of the certificate  evidencing  the APS
complies with all applicable laws of the State of Maryland;

                           (v) the APS have  been  duly  and  validly authorized
by the Fund and,  upon  completion of the initial sale of the APS and receipt of
payment  therefor,   will  be  validly  issued  by  the  Fund,  fully  paid  and
nonassessable;

                           (vi) at the  time  of the  offering  of the  APS, the
shares offered will be registered under the Securities Act and no further action
by or before any  governmental  body or authority of the United States or of any
state thereof is required in connection  with the execution and delivery of this
Agreement or will be required in  connection  with the issuance of shares of the
APS, except such action as required by applicable state securities laws;

                           (vii) the execution and delivery  of  this  Agreement
and the  issuance  and  delivery of the APS do not and will not  conflict  with,
violate,  or result in a breach of the terms,  conditions or  provisions  of, or
constitute a default  under,  the  Charter,  any order or decree of any court or
public authority having jurisdiction over the Fund, or any mortgage,  indenture,
contract,  agreement or  undertaking to which the Fund is a party or by which it
is bound; and

                           (viii)  no taxes are payable  upon or in  respect  of
the  execution  of this  Agreement  or will be payable upon or in respect of the
issuance of the APS.

         5.2 REPRESENTATIONS AND WARRANTIES OF THE AUCTION AGENT.

         The Auction Agent represents and warrants to the Fund that:

                           (i) the  Auction  Agent  is  duly  organized  and  is
validly existing as a banking corporation in good standing under the laws of the
State of New York and has the  corporate  power to enter  into and  perform  its
obligations under this Agreement; and

                           (ii)  this  Agreement  has  been  duly  and   validly
authorized,  executed and  delivered by the Auction  Agent and  constitutes  the
legal,  valid and binding obligation of the Auction Agent,  enforceable  against
the  Auction  Agent  in  accordance  with  its  terms,  subject  to  bankruptcy,
insolvency,  reorganization and other laws of general applicability  relating to
or affecting creditors' rights and to general equitable principles.

VI.      THE AUCTION AGENT.

         6.1 DUTIES AND RESPONSIBILITIES.

                  (a) The Auction Agent is acting solely as  nonfiduciary  agent
for the Fund hereunder and owes no fiduciary duties to any Person.

                  (b) The Auction  Agent  undertakes  to perform such duties and
only such duties as are set forth specifically in this Agreement, and no implied
covenants or obligations  shall be read into this Agreement  against the Auction
Agent. To the extent any provision contained herein conflicts with any provision
incorporated herein by reference, the terms hereof shall control.

                  (c) In the absence of willful  misconduct or negligence on its
part,  the Auction Agent shall not be liable for any action  taken,  suffered or
omitted by it or for any error of judgment made by it in the  performance of its
duties under this Agreement.

                                       10
<PAGE>

                  (d) In no event shall the Auction Agent be liable for special,
punitive,  indirect  or  consequential  loss or  damage  of any kind  whatsoever
(including,  but not limited to, lost  profits),  even if the Auction  Agent has
been advised of the likelihood of such loss or damage and regardless of the form
of action.

         6.2 RIGHTS OF THE AUCTION AGENT.

                  (a) The Auction Agent may conclusively rely upon, and shall be
fully  protected in acting or  refraining  from acting upon,  any  communication
authorized  hereby  and  any  proper  written  instruction,   notice,   request,
direction, consent, report, certificate,  share certificate or other instrument,
paper or document  reasonably  believed by it to be genuine.  The Auction  Agent
shall not be liable for acting or  refraining  from  acting  upon any  telephone
communication  authorized hereby which the Auction Agent reasonably  believes in
good faith,  after  reasonable  inquiry,  to have been given by the Fund or by a
Broker-Dealer.  The Auction Agent may record telephone  communications  with the
Fund or with the Broker-Dealers or with both.

                  (b) The Auction  Agent may consult with counsel of its choice,
and the advice of such  counsel  shall be full and  complete  authorization  and
protection in respect of any action  taken,  suffered or omitted by it hereunder
in good faith and in reasonable reliance thereon.

                  (c) The Auction Agent shall not be required to advance, expend
or risk its own  funds  or  otherwise  incur  or  become  exposed  to  financial
liability in the performance of its duties hereunder. The Auction Agent shall be
under no liability for interest on any money received by it hereunder  except as
otherwise agreed to in writing with the Fund.

                  (d) The Auction  Agent may perform its duties and exercise its
rights  hereunder  either  directly or by or through agents or attorneys and, in
the  absence  of  misconduct  or  negligence  on the part of any  such  agent or
attorney, shall not be responsible for the conduct on the part of any such agent
or attorney appointed by it with due care.

                  (e) The  Auction  Agent  shall not be liable  for any error of
judgment  made in good faith  unless the Auction  Agent shall have been  grossly
negligent  in  ascertaining  (or  failing  to  ascertain)  the  pertinent  facts
necessary to make such  judgment.  In no event shall the Auction Agent be liable
for special,  indirect or  consequential  loss or damages of any kind whatsoever
(including,  but not limited to, loss of profits), even if the Auction Agent has
been advised of the  likelihood  of such loss or damages and  regardless  of the
form of action, except in the event of willful misconduct or gross negligence on
the part of the Auction Agent.

                  (f) The Auction  Agent shall not be required to and shall make
no representations and have no  responsibilities  as to the validity,  accuracy,
value or genuineness of any signatures or  endorsements,  other than its own and
those of its authorized officers.  The Auction Agent makes no representations as
to and shall have no liability  with respect to the  correctness of the recitals
in, or the validity,  accuracy or adequacy of this Agreement,  any Broker-Dealer
Agreement,  any offering  material used in connection with the offer and sale of
the APS or any other  agreement or instrument  executed in  connection  with the
transactions contemplated herein or in any thereof. The Auction Agent shall have
no obligation or liability in respect of the registration or exemption therefrom
of the APS under federal or state  securities laws in respect of the sufficiency
or the  conformity  of any  transfer  of the APS  pursuant  to the  terms of the
Auction Agency  Agreement,  any Broker-Dealer  Agreement,  or any other document
contemplated thereby or related thereto.

                                       11
<PAGE>

                  (g) Whenever in the  administration  of the provisions of this
Agreement the Auction  Agent shall deem it necessary or desirable  that a matter
be proved or  established  prior to taking or  suffering  any action to be taken
hereunder,  such matter  (unless  other  evidence  in respect  thereof be herein
specifically prescribed) may, in the absence of negligence, bad faith or willful
misconduct on the part of the Auction Agent, be deemed to be conclusively proved
and  established  by a  certificate  signed by the Fund or a  Broker-Dealer  and
delivered  to the  Auction  Agent,  and  such  certificate,  in the  absence  of
negligence,  bad faith or willful  misconduct on the part of the Auction  Agent,
shall be full warrant to the Auction Agent for any action taken or omitted by it
under the provisions of this Agreement upon the faith thereof.

                  (h)  The  Auction  Agent  shall  not  be  bound  to  make  any
investigation  into the facts or matters stated in any resolution,  certificate,
statement,  instrument,  opinion, report, notice, request, consent,  entitlement
order,  approval  or  other  paper  or  document  furnished  by  the  Fund  or a
Broker-Dealer,  except to the extent that such failure to  investigate  would be
deemed grossly negligent.

                  (i) Any corporation into which the Auction Agent may be merged
or converted or with which it may be consolidated,  or any corporation resulting
from any merger, conversion or consolidation to which the Auction Agent shall be
a party,  or any corporation  succeeding to the dealing and trading  business of
the Auction Agent shall be the successor of the Auction  Agent  hereunder,  with
the consent of the Fund but without  the  execution  or filing of any paper with
any party  hereto or any further  act on the part of any of the parties  hereto,
except  where any  instrument  of transfer or  assignment  is required by law to
effect such succession, anything herein to the contrary notwithstanding.

         6.3 COMPENSATION, EXPENSES AND INDEMNIFICATION.

                  (a) The Fund shall pay to the Auction  Agent from time to time
reasonable compensation for all services rendered by it under this Agreement and
under the  Broker-Dealer  Agreements as shall be set forth in a separate writing
signed by the Fund and the Auction  Agent,  subject to adjustments if the APS no
longer  are held of record by the  Securities  Depository  or its  nominee or if
there shall be such other change as shall  increase or decrease  materially  the
Auction Agent's obligations hereunder or under the Broker-Dealer Agreements.

                  (b) The  Fund  shall  reimburse  the  Auction  Agent  upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Auction Agent in accordance  with any provision of this  Agreement and of
the Broker-Dealer  Agreements (including the reasonable  compensation,  expenses
and disbursements of its agents and counsel),  except any expense,  disbursement
or advance attributable to its gross negligence or willful misconduct.

                  (c)  The  Fund  shall  indemnify  the  Auction  Agent  and its
officers, directors, employees and agents for, and hold it harmless against, any
loss,  liability  or  expense  incurred  without  gross  negligence  or  willful
misconduct on the part of the Auction Agent arising out of or in connection with
its  agency  under  this  Agreement  and  under  the  Broker-Dealer  Agreements,
including  the costs and  expenses  of  defending  itself  against  any claim of
liability in connection  with its exercise or  performance  of any of its duties
hereunder and thereunder, except such as may result from its gross negligence or
willful misconduct.

         6.4 FORCE MAJEURE

         The  Auction  Agent  shall not be  responsible  for or  liable  for any
failure or delay in the  performance  of its  obligations  under this  Agreement
arising out of or caused,  directly or indirectly,  by circumstances  beyond its
reasonable control,  including,  without limitation,  acts of God;  earthquakes;

                                       12
<PAGE>

fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots;
acts of terrorism;  interruptions,  loss or malfunctions of utilities;  computer
(hardware or software) or communications  services;  accidents;  labor disputes;
acts of civil or military authority or governmental actions; it being understood
that the Auction Agent shall use reasonable  efforts which are  consistent  with
accepted  practices  in the banking  industry to resume  performance  as soon as
practicable under the circumstances.

VII.     MISCELLANEOUS.

         7.1 TERM OF AGREEMENT.

                  (a) The term of this Agreement is unlimited unless it shall be
terminated  as  provided  in this  Section  7.1.  The  Fund may  terminate  this
Agreement at any time by so  notifying  the Auction  Agent in writing,  provided
that,  if any APS  remain  outstanding,  the Fund  shall  have  entered  into an
agreement with a successor  auction agent.  The Auction Agent may terminate this
Agreement  upon prior  notice to the Fund on the date  specified in such notice,
which date shall be no earlier than 60 days after  delivery of such notice.  The
Auction  Agent may resign after 30 days  following the delivery of notice to the
Fund that the Auction  Agent has not been paid amounts due to it. If the Auction
Agent  terminates  this Agreement  while any APS remains  outstanding,  the Fund
shall use its best efforts to enter into an agreement  with a successor  auction
agent containing substantially the same terms and conditions as this Agreement.

                  (b) Except as otherwise  provided in this Section 7.1(b),  the
respective  rights  and  duties of the Fund and the  Auction  Agent  under  this
Agreement  shall  cease  upon   termination  of  this   Agreement.   The  Fund's
representations,  warranties,  covenants  and  obligations  to the Auction Agent
under  Sections 5.1 and 6.3 hereof shall survive the  termination  hereof.  Upon
termination  of this  Agreement,  the Auction  Agent shall (i) resign as Auction
Agent under the  Broker-Dealer  Agreements,  (ii) at the Fund's written request,
deliver promptly to the Fund copies of all books and records maintained by it in
connection  with its duties  hereunder,  and (iii) at the written request of the
Fund,  transfer promptly to the Fund or to any successor auction agent any funds
deposited by the Fund with the Auction Agent (whether in its capacity as Auction
Agent  or as  Paying  Agent)  pursuant  to this  Agreement  which  have not been
distributed previously by the Auction Agent in accordance with this Agreement.

         7.2 COMMUNICATIONS.

         Except  for (i)  communications  authorized  to be  made  by  telephone
pursuant to this Agreement or the Auction Procedures and (ii)  communications in
connection with Auctions (other than those expressly required to be in writing),
all notices,  requests and other  communications to any party hereunder shall be
in writing  (including  telecopy or similar  writing) and shall be given to such
party at its address or telecopier number set forth below:


If to the Fund,                   DNP Select Income Fund Inc.
addressed to:                     Attn:  Nathan I. Partain
                                  55 East Monroe Street, Suite 3600
                                  Chicago, Illinois 60603
                                  Telephone: (312) 630-4613
                                  Facsimile: (312) 630-2226
                                  Email: Nathan_Partain@dpimc.com

                                       13
<PAGE>

If to the Auction Agent,          The Bank of New York
addressed to:                     Corporate Trust Administration
                                  Attn: Dealing and Trading Group - Auction Desk
                                  101 Barclay Street, Floor 7W
                                  New York, New York 10286

                                  Telephone (212) 815-3450
                                  Facsimile: (212) 815-3440 or (212) 815-3443
                                  Email: bnyctauctionunit@bankofny.com

or such other address or telecopier  number as such parry  hereafter may specify
for such  purpose by notice to the other  party.  Each such  notice,  request or
communication shall be effective when delivered at the address specified herein.
Communications  shall be given on  behalf of the Fund by a Fund  Officer  and on
behalf of the Auction Agent by an Authorized Officer.

         7.3 ENTIRE AGREEMENT.

         This  Agreement  contains  the entire  agreement  between  the  parties
relating to the subject matter hereof,  and there are no other  representations,
endorsements,  promises, agreements or understandings, oral, written or implied,
between the parties  relating to the subject matter  hereof,  except for written
agreements relating to the compensation of the Auction Agent.

         7.4 BENEFITS.

         Nothing  herein,  express or implied,  shall give to any Person,  other
than the Fund,  the Auction Agent and their  respective  successors and assigns,
any benefit of any legal or equitable right, remedy or claim hereunder.

         7.5 AMENDMENT; WAIVER.

                  (a) This  Agreement  shall not be deemed  or  construed  to be
modified, amended, rescinded, canceled or waived, in whole or in part, except by
a written instrument signed by a duly authorized  representative of the party to
be charged.  The Fund shall notify the Auction Agent in writing of any change in
the Articles  Supplementary  prior to the effective date of any such change.  If
any such change in the Articles  Supplementary  materially increases the Auction
Agent's obligations hereunder,  the Fund shall obtain the written consent of the
Auction Agent prior to the effective date of such change.

                  (b) Failure of either  party  hereto to exercise  any right or
remedy  hereunder  in the event of a breach  hereof by the other party shall not
constitute a waiver of any such right or remedy with  respect to any  subsequent
breach.

         7.6 SUCCESSORS AND ASSIGNS.

         This Agreement  shall be binding upon,  inure to the benefit of, and be
enforceable by, the respective  successors and permitted  assigns of each of the
Fund and the Auction  Agent.  This Agreement may not be assigned by either party
hereto absent the prior written consent of the other party,  which consent shall
not be withheld unreasonably.

                                       14
<PAGE>

         7.7 SEVERABILITY.

         If any clause,  provision or section  hereof shall be ruled  invalid or
unenforceable  by  any  court  of  competent  jurisdiction,  the  invalidity  or
unenforceability  of such clause,  provision or section  shall not affect any of
the remaining clauses, provisions or sections hereof.

         7.8 EXECUTION IN COUNTERPARTS.

         This Agreement may be executed in several  counterparts,  each of which
shall be an  original  and all of which  shall  constitute  but one and the same
instrument.

         7.9 GOVERNING LAW.

         This  Agreement  shall be governed by and construed in accordance  with
the laws of the  State  of New  York  applicable  to  agreements  made and to be
performed in said state.

         7.10 JURISDICTION.

         The parties agree that all actions and proceedings  arising out of this
Auction Agency Agreement or any of the transactions contemplated hereby shall be
brought in the County of New York,  and, in  connection  with any such action or
proceeding,  submit to the jurisdiction  of, and venue in, such County.  Each of
the  parties  hereto also  irrevocably  waives all right to trial by jury in any
action,  proceeding  or  counterclaim  arising  out  of  this  Agreement  or the
transactions contemplated hereby.



                               [Signature pages follow]

                                       15
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly  authorized  officers as of
the date first above written.

                                          DNP SELECT INCOME FUND INC.



                                          By:
                                              ----------------------------------
                                              Name:
                                              Title:


                                          THE BANK OF NEW YORK, As Auction Agent



                                          By:
                                              ----------------------------------
                                              Name:
                                              Title:




                                       16
<PAGE>

                                                                       EXHIBIT A



                           DNP SELECT INCOME FUND INC.


                              THE BANK OF NEW YORK,
                                as Auction Agent

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

                             BROKER-DEALER AGREEMENT

                           dated as of March [ ], 2006

                                   Relating to

                             Auction Preferred Stock

                                       of

                           DNP SELECT INCOME FUND INC.

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

                               UBS SECURITIES LLC


<PAGE>

                             BROKER-DEALER AGREEMENT

         This  Broker-Dealer  Agreement  dated as of March [ ], 2006, is between
The Bank of New York, a New York banking  corporation (the "Auction Agent") (not
in its individual  capacity,  but solely as agent of DNP SELECT INCOME FUND INC.
(the  "Fund")),  pursuant  to  authority  granted  to it in the  Auction  Agency
Agreement  dated as of March [ ], 2006  between the Fund and the  Auction  Agent
(the "Auction  Agency  Agreement"),  and UBS  SECURITIES  LLC (together with its
successors and assigns, "BD").

         The Fund  proposes to issue  4,000  preferred  shares of the Fund,  par
value  $0.001 per share,  designated  Series M Auction  Preferred  Stock,  4,000
preferred  shares of the Fund, par value $0.001 per share,  designated  Series W
Auction  Preferred  Stock,  and 4,000  preferred  shares of the Fund,  par value
$0.001 per  share,  designated  Series F Auction  Preferred  Stock,  each with a
liquidation  preference of $25,000 per share, and may in the future issue one or
more additional  series of Auction  Preferred Stock  (collectively,  the "APS"),
pursuant to the Fund's Articles of Incorporation and the Articles  Supplementary
(as defined below).

         The Fund's Articles Supplementary provide that for each Dividend Period
after the initial  Dividend  Period,  the Applicable  Dividend Rate for APS then
outstanding  shall be equal to the rate per annum that  results  from an Auction
for  Outstanding  APS on the  respective  Auction  Date  therefor.  The Board of
Directors of the Fund has adopted a resolution  appointing  The Bank of New York
as Auction Agent for purposes of the Auction Procedures, and pursuant to Section
2.5 of the Auction  Agency  Agreement,  the Fund has  requested and directed the
Auction Agent to execute and deliver this Agreement.

         The  Auction  Procedures  require  the  participation  of one  or  more
Broker-Dealers.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants contained herein, the Auction Agent and BD agree as follows:

VIII.    DEFINITIONS AND RULES OF CONSTRUCTION.

         1.1 TERMS DEFINED BY REFERENCE TO THE ARTICLES SUPPLEMENTARY.

         Capitalized terms not defined herein shall have the respective meanings
specified in the Articles Supplementary.

         1.2 TERMS DEFINED HEREIN.

         As used herein, the following terms shall have the following  meanings,
unless the context otherwise requires:

                  (a)   "Articles   Supplementary"   shall  mean  any   articles
supplementary  filed by the Fund with the State  Department of  Assessments  and
Taxation of Maryland  specifying  the powers,  preferences  and rights of one or
more series of APS.

                  (b)  "Auction  Procedures"  shall mean the Auction  Procedures
that are set forth in Part II of the Articles Supplementary.

                  (c) "Authorized  Officer" of the Auction Agent shall mean each
Vice President, Assistant Vice President and Assistant Treasurer assigned to the
Dealing  and  Trading  Group of its  Corporate  Trust  Division  and every other
officer or employee of the Auction Agent  designated as an "Authorized  Officer"
for purposes of this Agreement in a written communication to BD.

<PAGE>

                  (d) "BD  Officer"  shall mean each  officer or  employee of BD
designated  as a "BD  Officer"  for  purposes  of this  Agreement  in a  written
communication to the Auction Agent.

                  (e)  "Broker-Dealer  Agreement"  shall mean this Agreement and
any   substantially   similar   agreement   between  the  Auction  Agent  and  a
Broker-Dealer.

         1.3 RULES OF CONSTRUCTION.

         Unless the context or use  indicates  another or  different  meaning or
intent, the following rules shall apply to the construction of this Agreement:

                  (a) Words  importing  the singular  number  shall  include the
plural number and vice versa.

                  (b)  The  captions   and   headings   herein  are  solely  for
convenience of reference and shall not constitute a part of this Agreement,  nor
shall they affect its meaning, construction or effect.

                  (c) The words "hereof," "herein," "hereto," and other words of
similar import refer to this Agreement as a whole.

                  (d) All references herein to a particular time of day shall be
to New York City time.

IX.      NOTIFICATION OF DIVIDEND.

         The  provisions  contained  in  Section  3 of  Part I of  the  Articles
Supplementary  concerning the  notification of a Special Dividend Period will be
followed by the Auction Agent and BD, and the provisions  contained  therein are
incorporated  herein by reference in their  entirety and shall be deemed to be a
part of this Agreement to the same extent as if such  provisions  were set forth
fully herein.

X.       THE AUCTION.

         1.4 PURPOSE; INCORPORATION BY REFERENCE OF AUCTION PROCEDURES.

                  (a) On  each  Auction  Date,  the  provisions  of the  Auction
Procedures  will be followed by the Auction Agent for the purpose of determining
the  Applicable  Dividend  Rate for the  APS,  for each  Dividend  Period.  Each
periodic  operation  of  such  procedures  is  hereinafter  referred  to  as  an
"Auction."

                  (b) All of the provisions  contained in the Auction Procedures
are incorporated herein by reference in their entirety and shall be deemed to be
a part of this Agreement to the same extent as if such provisions were set forth
fully herein.

                  (c) BD agrees to act as, and  assumes the  obligations  of and
limitations and restrictions  placed upon, a Broker-Dealer under this Agreement.
BD  understands  that other Persons  meeting the  requirements  specified in the
definition  of  "Broker-Dealer"  contained  in  "Definitions"  in  the  Articles
Supplementary   may  execute  a  Broker-Dealer   Agreement  and  participate  as
Broker-Dealers in Auctions.

                  (d) BD and other  Broker-Dealers  may  participate in Auctions
for their own accounts.  However, the Fund, by notice to BD and all other Broker
Dealers,  may prohibit all  Broker-Dealers  from submitting Bids in Auctions for
their own  accounts,  PROVIDED that  Broker-Dealers  may continue to submit Hold
Orders and Sell Orders.

                                       2
<PAGE>

         1.5 PREPARATION FOR EACH AUCTION.

                  (a) Not later than 9:30 A.M. on each Auction Date for the APS,
the Auction  Agent shall  advise BD by telephone  or other  electronic  means of
communication  acceptable to the parties of the Maximum  Dividend Rate in effect
on such Auction Date.

                  (b) The Auction  Agent from time to time may, but shall not be
obligated to, request BD to provide it with a list of the  respective  customers
BD believes are Beneficial Owners of APS. BD shall comply with any such request,
and the Auction Agent shall keep  confidential any such  information,  including
information received as to the identity of Bidders in any Auction, and shall not
disclose any such information so provided to any Person other than the Fund; and
such  information  shall  not be  used by the  Auction  Agent  or its  officers,
employees, agents or representatives for any purpose other than such purposes as
are described herein or in the Auction Agency Agreement; provided, however, that
the Auction  Agent  reserves  the right and is  authorized  to disclose any such
information  if (a) it is ordered to do so by a court of competent  jurisdiction
or a regulatory body, judicial or quasi-judicial  agency or authority having the
authority to compel such  disclosure,  (b) it is advised by its counsel that its
failure to do so would be  unlawful  or (c)  failure  to do so would  expose the
Auction Agent to loss, liability,  claim, damage or expense for which it has not
received indemnity or security satisfactory to it. In the event that the Auction
Agent is required to  disclose  information  in  accordance  with the  foregoing
sentence,  it shall provide written notice of such requirement to BD as promptly
as  practicable.  The Auction  Agent shall,  subject to the terms of the Auction
Agency  Agreement,  transmit any list of  customers  BD believes are  Beneficial
Owners of APS and information  related thereto only to its officers,  employees,
agents or representatives  who need to know such information for the purposes of
acting in  accordance  with this  Agreement,  and the  Auction  Agent  shall use
commercially  reasonable efforts to prevent the transmission of such information
to others and shall cause its officers, employees, agents and representatives to
abide by the foregoing confidentiality restrictions; PROVIDED, HOWEVER, that the
Auction Agent shall have no  responsibility  or liability for the actions of any
of its officers,  employees,  agents or representatives after they have left the
employ of the Auction Agent.

         1.6 AUCTION SCHEDULE; METHOD OF SUBMISSION OF ORDERS.

                  (a) The Fund and the Auction Agent shall conduct  Auctions for
APS in  accordance  with the  schedule  set forth  below.  Such  schedule may be
changed at any time by the  Auction  Agent with the  consent of the Fund,  which
consent shall not be withheld unreasonably.  The Auction Agent shall give notice
of any such  change to BD.  Such  notice  shall be  received  prior to the first
Auction Date on which any such change shall be effective.

TIME                                       EVENT

By 9:30 A.M.                     Auction  Agent  shall  advise  the Fund and the
                                 Broker-Dealers  of the Maximum Dividend Rate as
                                 set forth in Section 3.2(a) hereof.

9:30 A.M. - 1:00 P.M.            Auction   Agent  shall   assemble   information
                                 communicated   to  it  by   Broker-Dealers   as
                                 provided  in  Section  3(a)  of  Part II of the
                                 Articles  Supplementary.

Not earlier than 1:00 P.M.       Auction   Agent   shall   make   determinations
                                 pursuant  to  Section  3(a)  of  Part II of the
                                 Articles Supplementary.

                                       3
<PAGE>

TIME                                       EVENT

By approximately 3:30 P.M.       Auction  Agent  shall  advise  the  Fund of the
(and not later than the close    results of the  Auction as  provided in Section
of business)                     3(b) of Part II of the Articles Supplementary.

                                 Submitted  Bids and Submitted  Sell Orders will
                                 be  accepted  and  rejected in whole or in part
                                 and  APS  will  be  allocated  as  provided  in
                                 Section   4  of   Part   II  of  the   Articles
                                 Supplementary.

                                 Auction  Agent shall give notice of the Auction
                                 results as set forth in Section 3.4(a) hereof.

         Except  as  provided  in  the  immediately  following  paragraph,   the
Submission Deadline will be 1:00 P.M.; provided, however, that the Auction Agent
shall be  entitled  to  accept  Orders  from  any  Broker-Dealer  following  the
Submission  Deadline  (but in any event  prior to the  communication  of Auction
results as  provided  below) so long as the Orders from such  Broker-Dealer  are
accompanied by a certification  to the Auction Agent from such  Broker-Dealer to
the effect that (i) such Orders were  communicated to, and time-stamped by, such
Broker-Dealer  prior to the  Submission  Deadline and (ii) a force majeure event
(including,  without limitation, a technological failure or malfunction) impeded
the  Broker-Dealer's  ability  to  submit  the  Orders  prior to the  Submission
Deadline.

         The  Auction  Agent will follow the Bond  Market  Association's  Market
Practice U.S. Holiday  Recommendations  for shortened  trading days for the bond
markets  (the "BMA  Recommendation")  unless  the  Auction  Agent is  instructed
otherwise.  In  the  event  of a BMA  Recommendation  on an  Auction  Date,  the
Submission Deadline will be 11:30 A.M., instead of 1:00 P.M.

                  (b) BD  agrees  to  maintain  a list of  Potential  Beneficial
Owners and to contact the Potential  Beneficial  Owners on such list on or prior
to each  Auction  Date for the purposes set forth in Section 2 of Part II of the
Articles Supplementary.

                  (c) BD shall submit  Orders to the Auction Agent in writing in
substantially  the form attached  hereto as Exhibit A. BD shall submit  separate
Orders to the Auction Agent for each  Potential  Beneficial  Owner or Beneficial
Owner on whose behalf BD is  submitting  an Order and shall not net or aggregate
the Orders of Potential  Beneficial  Owners or Beneficial Owners on whose behalf
BD is submitting Orders.

                  (d) BD  shall  deliver  to the  Auction  Agent  (i) a  written
notice,  substantially in the form attached hereto as Exhibit B, of transfers of
APS, made through BD by an Existing Holder to another Person other than pursuant
to an Auction,  and (ii) a written  notice,  substantially  in the form attached
hereto as Exhibit C, of the failure of APS to be transferred to or by any Person
that purchased or sold APS through BD pursuant to an Auction.  The Auction Agent
is not  required  to accept any notice  delivered  pursuant  to the terms of the
foregoing  sentence  with  respect to an Auction  unless it is  received  by the
Auction  Agent by 3:00 P.M. on the Business Day next  preceding  the  applicable
Auction Date.

         1.7 NOTICE OF AUCTION RESULTS.

                  (a) On each Auction Date, the Auction Agent shall notify BD by
telephone or other  electronic  means  acceptable  to the parties of the Auction
results.  On the Business Day next  succeeding  such Auction  Date,  the Auction
Agent shall notify BD in writing of the  disposition of all Orders  submitted by
BD in the Auction held on such Auction Date.

                                       4
<PAGE>

                  (b)  BD  shall  notify  each   Beneficial   Owner,   Potential
Beneficial  Owner,  Existing  Holder or Potential  Holder on whose behalf BD has
submitted  an Order,  of the Auction  results  and take such other  action as is
required of BD.

         If any  Beneficial  Owner or Existing  Holder selling APS in an Auction
fails to deliver such shares,  the  Broker-Dealer of any Person that was to have
purchased  APS in such  Auction  may  deliver  to such  Person a number of whole
shares of APS that is less than the number of shares  that  otherwise  was to be
purchased  by such Person.  In such event,  the number of APS to be so delivered
shall be  determined  by such  Broker-Dealer.  Delivery of such lesser number of
shares shall  constitute good delivery.  Upon the occurrence of any such failure
to deliver  shares,  such  Broker-Dealer  shall deliver to the Auction Agent the
notice  required by Section  3.3(d)(ii)  hereof.  Notwithstanding  the foregoing
terms  of this  Section  3.4(b),  any  delivery  or  non-delivery  of APS  which
represents  any departure  from the results of an Auction,  as determined by the
Auction  Agent,  shall be of no effect  unless and until the Auction Agent shall
have been notified of such delivery or non-delivery in accordance with the terms
of Section  3.3(d)(ii) hereof. The Auction Agent shall have no duty or liability
with respect to enforcement of this Section 3.4(b). Any delivery or non-delivery
of APS which  represents  any departure from the results of an Auction shall not
affect the results of the Auction.

         1.8 SERVICE CHARGE TO BE PAID TO BD.

         On the Business Day next  succeeding  each  Auction  Date,  the Auction
Agent shall pay to BD from moneys received from the Fund an amount equal to: (a)
in the case of any Auction Date immediately  preceding a Dividend Period of less
than one year,  the  product of (i) a  fraction  the  numerator  of which is the
number of days in such Dividend Period  (calculated by counting the first day of
such Dividend  Period but excluding the last day thereof) and the denominator of
which is 360, times (ii) 1/4 of 1%, times (iii)  $25,000,  times (iv) the sum of
(A) the aggregate number of APS placed by BD in the applicable Auction that were
(x) the subject of a Submitted  Bid of a  Beneficial  Owner  submitted by BD and
continued  to be held as a result of such  submission  and (y) the  subject of a
Submitted Bid of a Potential Beneficial Owner submitted by BD and were purchased
as a result of such submission  plus (B) the aggregate  number of APS subject to
valid Hold Orders  (determined  in  accordance  with Section 2 of Part II of the
Articles Supplementary) submitted to the Auction Agent by BD plus (C) the number
of APS deemed to be subject to Hold  Orders by  Beneficial  Owners  pursuant  to
Section 2 of Part II of the Articles  Supplementary that were acquired by BD for
its own account or were acquired by such  Beneficial  Owners through BD; and (b)
in the case of any Auction Date immediately  preceding a Special Dividend Period
of one year or longer,  that amount as mutually  agreed upon by the Fund and BD,
based on the selling  concession  that would be applicable to an underwriting of
fixed or  variable  rate  preferred  shares  with a similar  final  maturity  or
variable rate dividend  period,  at the  commencement  of such Special  Dividend
Period.

         For purposes of subclause (a)(iv)(C) of the foregoing sentence,  if any
Beneficial  Owner who acquired APS through BD transfers  those shares to another
Person other than pursuant to an Auction,  then the Broker-Dealer for the shares
so transferred shall continue to be BD, PROVIDED,  HOWEVER, that if the transfer
was effected by, or if the  transferee is, a  Broker-Dealer  other than BD, then
such Broker-Dealer shall be the Broker-Dealer for such shares.

XI.      THE AUCTION AGENT

         4.1. DUTIES AND RESPONSIBILITIES.

                  (a) The Auction Agent is acting solely as  nonfiduciary  agent
for the Fund hereunder and owes no fiduciary duties to any Person.

                                       5
<PAGE>

                  (b) The Auction  Agent  undertakes  to perform such duties and
only such duties as are set forth specifically in this Agreement, and no implied
covenants or  obligations  shall be read into the Agreement  against the Auction
Agent.

                  (c) In the absence of  negligence,  bad faith or misconduct on
its part,  the Auction Agent shall not be liable for any action taken,  suffered
or omitted by it or for any error of judgment made by it in the  performance  of
its duties under this Agreement.

                  (d) In no event shall the Auction Agent be liable for special,
punitive,  indirect  or  consequential  loss or  damage  of any kind  whatsoever
(including,  but not limited to, lost  profits),  even if the Auction  Agent has
been advised of the likelihood of such loss or damage and regardless of the form
of action.

         4.2. RIGHTS OF THE AUCTION AGENT.

                  (a) The Auction Agent may conclusively rely upon, and shall be
fully  protected in acting or  refraining  from acting upon,  any  communication
authorized  hereby  and  any  proper  written  instruction,   notice,   request,
direction, consent, report, certificate,  share certificate or other instrument,
paper or document  reasonably  believed by it to be genuine.  The Auction  Agent
shall not be liable for acting or  refraining  from  acting  upon any  telephone
communication  authorized hereby which the Auction Agent reasonably  believes in
good faith,  after  reasonable  inquiry,  to have been given by the Fund or by a
Broker-Dealer.  The Auction Agent may record telephone  communications  with the
Fund or with the Broker-Dealers or with both.

                  (b) The Auction  Agent may consult with counsel of its choice,
and the advice of such  counsel  shall be full and  complete  authorization  and
protection in respect of any action  taken,  suffered or omitted by it hereunder
in good faith and in reasonable reliance thereon.

                  (c) The Auction Agent shall not be required to advance, expend
or risk its own  funds  or  otherwise  incur  or  become  exposed  to  financial
liability in the performance of its duties hereunder. The Auction Agent shall be
under no liability for interest on any money received by it hereunder  except as
otherwise agreed to in writing with the Fund.

                  (d) The Auction  Agent may perform its duties and exercise its
rights  hereunder  either  directly or by or through agents or attorneys and, in
the absence of willful  misconduct  or gross  negligence on the part of any such
agent or attorney,  shall not be responsible  for the conduct on the part of any
such agent or attorney appointed by it with due care.

                  (e) The  Auction  Agent  shall not be liable  for any error of
judgment  made in good faith  unless the Auction  Agent shall have been  grossly
negligent  in  ascertaining  (or  failing  to  ascertain)  the  pertinent  facts
necessary to make such  judgment.  In no event shall the Auction Agent be liable
for special,  indirect or  consequential  loss or damages of any kind whatsoever
(including,  but not limited to, loss of profits), even if the Auction Agent has
been advised of the  likelihood  of such loss or damages and  regardless  of the
form of action, except in the event of willful misconduct or gross negligence on
the part of the Auction Agent.

                  (f) The Auction  Agent shall not be required to and shall make
no representations and have no  responsibilities  as to the validity,  accuracy,
value or genuineness of any signatures or  endorsements,  other than its own and
those of its authorized officers.

                                       6
<PAGE>

                  (g) Whenever in the  administration  of the provisions of this
Agreement the Auction  Agent shall deem it necessary or desirable  that a matter
be proved or  established  prior to taking or  suffering  any action to be taken
hereunder,  such matter  (unless  other  evidence  in respect  thereof be herein
specifically  prescribed)  may,  in the  absence  of  negligence,  bad  faith or
misconduct on the part of the Auction Agent, be deemed to be conclusively proved
and  established  by a  certificate  signed by the Fund or a  Broker-Dealer  and
delivered  to the  Auction  Agent,  and  such  certificate,  in the  absence  of
negligence,  bad faith or misconduct on the part of the Auction Agent,  shall be
full  warrant to the Auction  Agent for any action  taken or omitted by it under
the provisions of this Agreement upon the faith thereof.

                  (h)  The  Auction  Agent  shall  not  be  bound  to  make  any
investigation  into the facts or matters stated in any resolution,  certificate,
statement,  instrument,  opinion, report, notice, request, consent,  entitlement
order,  approval  or  other  paper  or  document  furnished  by  the  Fund  or a
Broker-Dealer,  except to the extent that such failure to  investigate  would be
deemed grossly negligent.

                  (i) Any corporation into which the Auction Agent may be merged
or converted or with which it may be consolidated,  or any corporation resulting
from any merger, conversion or consolidation to which the Auction Agent shall be
a party,  or any corporation  succeeding to the dealing and trading  business of
the Auction Agent shall be the successor of the Auction  Agent  hereunder,  with
the consent of the Fund and BD but without the  execution or filing of any paper
with any party hereto,  except where any instrument or transfer or assignment is
required  by law to effect  such  succession,  anything  herein to the  contrary
notwithstanding.

XII.     MISCELLANEOUS.

         1.9 TERMINATION.

         Any party may  terminate  this  Agreement  at any time upon five  days'
prior  written  notice  to the  other  party;  PROVIDED,  HOWEVER,  that  if the
Broker-Dealer is UBS Securities LLC, it may not terminate this Agreement without
first obtaining the prior written consent of the Fund to such termination, which
consent  shall  not be  withheld  unreasonably.  The  Auction  Agent is  without
discretion  to  terminate  this  Agreement  and will move to  terminate  it only
pursuant to written direction from the Fund. This Agreement shall  automatically
terminate upon the redemption of all outstanding APS or upon  termination of the
Auction Agent Agreement.

         1.10 FORCE MAJEURE.

         Neither party to this Agreement  shall be responsible or liable for any
failure or delay in the  performance  of its  obligations  under this  Agreement
arising out of or caused,  directly or indirectly,  by circumstances  beyond its
reasonable control,  including,  without limitation,  acts of God;  earthquakes;
fires;  floods;  wars;  civil  or  military  disturbances;   sabotage;  acts  of
terrorism;  epidemics; riots; interruptions,  loss or malfunctions or utilities;
computer  (hardware or  software)  or  communications  services  (provided  that
Auction  Agent  has not  been  grossly  negligent  with  respect  to  selection,
operation or maintenance of such utilities,  computer  (hardware or software) or
communications  service);  accidents;  labor disputes; acts of civil or military
authority or governmental  actions;  it being  understood that the parties shall
use  reasonable  efforts which are  consistent  with  accepted  practices in the
banking  industry  to  resume  performance  as soon  as  practicable  under  the
circumstances.

         1.11  PARTICIPANT  IN  SECURITIES  DEPOSITORY;  PAYMENT OF DIVIDENDS IN
SAME-DAY FUNDS.

                  (a) BD is, and shall remain for the term of this Agreement,  a
member of, or a participant  in, the  Securities  Depository (or an affiliate of
such a member or participant).

                                       7
<PAGE>

                  (b) BD  represents  that  it (or if BD does  not act as  Agent
Member,  one of its  affiliates)  shall make all  dividend  payments  on the APS
available in same-day funds on each Dividend  Payment Date to customers that use
BD (or its affiliate) as Agent Member.

         1.12 AGENT MEMBER.

         At the date hereof, BD is a participant of the Securities Depository.

         1.13 COMMUNICATIONS.

         Except  for (i)  communications  authorized  to be  made  by  telephone
pursuant to this Agreement or the Auction Procedures and (ii)  communications in
connection  with the  Auctions  (other  than those  expressly  required to be in
writing), all notices,  requests and other communications to any party hereunder
shall be in writing  (including  telecopy or similar writing) and shall be given
to such party at its address or telecopier number set forth below:

If to the Auction Agent,
addressed to:                The Bank of New York
                             Corporate Trust Administration
                             Attention: Dealing and Trading Group - Auction Desk
                             101 Barclay Street, Floor 7W
                             New York, New York  10286
                             Telephone No.: (212) 815-3450
                             Facsimile No.: (212) 815-3440 or (212) 815-3443
                             Email: bnyctauctionunit@bankofny.com
If to the BD,
addressed to:                UBS Securities LLC
                             1285 Avenue of the Americas, 15th Floor
                             New York, NY 10019
                             Attn: Manager, Short-Term Trading Desk
                             Telephone No.: (212) 713-4692
                             Facsimile No.: (212) 713-3797

         or such other address or telecopier  number as such party hereafter may
         specify  for such  purpose  by  notice to the  other  party.  Each such
         notice,  request or communication  shall be effective when delivered at
         the address specified herein.  Communications  shall be given on behalf
         of BD by a BD  Officer  and  on  behalf  of  the  Auction  Agent  by an
         Authorized  Officer.  BD may record telephone  communications  with the
         Auction Agent.

         1.14 ENTIRE AGREEMENT.

         This  Agreement  contains  the entire  agreement  between  the  parties
relating to the subject matter hereof,  and there are no other  representations,
endorsements,  promises, agreements or understandings, oral, written or implied,
between the parties relating to the subject matter hereof.

         1.15 BENEFITS.

         Nothing  in this  Agreement,  express  or  implied,  shall  give to any
person,  other  than the Fund,  the  Auction  Agent and BD and their  respective
successors and permitted  assigns,  any benefit of any legal or equitable right,
remedy or claim under this Agreement.

                                       8
<PAGE>

         1.16 AMENDMENT; WAIVER.

                  (a) This  Agreement  shall not be deemed  or  construed  to be
         modified, amended, rescinded,  canceled or waived, in whole or in part,
         except  by  a   written   instrument   signed  by  a  duly   authorized
         representative of the party to be charged.

                  (b) Failure of either party to this  Agreement to exercise any
         right or remedy hereunder in the event of a breach of this Agreement by
         the other  party  shall not  constitute  a waiver of any such  right or
         remedy with respect to any subsequent breach.

         1.17 SUCCESSORS AND ASSIGNS.

         This Agreement  shall be binding upon,  inure to the benefit of, and be
enforceable  by, the respective  successors and permitted  assigns of each of BD
and the Auction Agent. This Agreement may not be assigned by either party hereto
absent the prior written consent of the other party and the Fund.

         1.18 SEVERABILITY.

         If any clause,  provision or section of this  Agreement  shall be ruled
invalid or unenforceable by any court of competent jurisdiction,  the invalidity
or  unenforceability  of such clause,  provision or section shall not affect any
remaining clause, provision or section hereof.

         1.19 EXECUTION IN COUNTERPARTS.

         This Agreement may be executed in several  counterparts,  each of which
shall be an  original  and all of which  shall  constitute  but one and the same
instrument.

         1.20 GOVERNING LAW.

         This  Agreement  shall be governed by and construed in accordance  with
the laws of the  State  of New  York  applicable  to  agreements  made and to be
performed wholly in said state.

         1.21 JURISDICTION.

         The parties agree that all actions and proceedings  arising out of this
Broker-Dealer Agreement or any of the transactions  contemplated hereby shall be
brought in the County of New York,  and, in  connection  with any such action or
proceeding,  submit to the jurisdiction  of, and venue in, such County.  Each of
the  parties  hereto also  irrevocably  waives all right to trial by jury in any
action,  proceeding  or  counterclaim  arising  out  of  this  Agreement  or the
transactions contemplated hereby.


                            [SIGNATURE PAGES FOLLOW]


                                       9
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly  authorized  officers as of
the date first above written.

                                         THE BANK OF NEW YORK, As Auction Agent


                                         By:
                                              ---------------------------------
                                              Name:
                                              Title:

                                         UBS SECURITIES LLC


                                         By:
                                              ---------------------------------
                                              Name:
                                              Title:



                                       10
<PAGE>

                                    EXHIBIT A

                              THE BANK OF NEW YORK
                                AUCTION BID FORM

<TABLE>
<CAPTION>
Submit To:                                                     Issue:
- ---------                                                      -----
<S>                                                            <C>
The Bank of New York                                           DNP SELECT INCOME FUND INC.
Corporate Trust Administration                                 Auction Preferred Stock ("APS")
Attention: Dealing and Trading Group-Auction Desk
101 Barclay Street, Floor 7W
New York, New York  10286
Telephone No.: (212) 815-3450

Facsimile No.: (212) 815-3440 or (212) 815-3443

The  undersigned  Broker-Dealer  submits  the  following  Order on behalf of the
Bidder listed below:

Name of Bidder:
               --------------------------------------




                                BENEFICIAL OWNER

APS now held                                                   HOLD
             -------------------                                    ---------------------------
                                                               BID at rate of
                                                                              -----------------
Series                                                         SELL
       -----------                                                  ---------------------------
</TABLE>



                           POTENTIAL BENEFICIAL OWNER

                                                 # of Series ___ APS ___________
                                                 BID at rate of __________




         Notes:

         (1)      If submitting more than one Bid for one Bidder, use additional
                  Auction Bid Forms.

         (2)      If one or more Bids  covering in the  aggregate  more than the
                  number of outstanding  shares held by any Beneficial Owner are
                  submitted,  such bid shall be considered valid in the order of
                  priority  set  forth in the  Auction  Procedures  on the above
                  issue.

         (3)      A Hold or Sell Order may be placed only by a Beneficial  Owner
                  covering  a number of shares  not  greater  than the number of
                  shares currently held.

         (4)      Potential  Beneficial Owners may make only Bids, each of which
                  must  specify  a rate.  If more than one Bid is  submitted  on
                  behalf of any Potential  Beneficial  Owner, each Bid submitted
                  shall be a separate Bid with the rate specified.


                                       A-1
<PAGE>

         (5)      Bids may  contain no more than  three  figures to the right of
                  the  decimal  point  (.001  of  1%).  Fractions  will  not  be
                  accepted.

         (6)      An Order  must be  submitted  in whole  shares  of APS with an
                  aggregate liquidation preference of $25,000.





         UBS SECURITIES LLC


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

         Authorized Signature
                             --------------------------------




                                       A-2

<PAGE>

                                    EXHIBIT B

         (Note:  To be used only for  transfers  made other than  pursuant to an
         Auction)

                                  TRANSFER FORM

         Re:    DNP SELECT INCOME FUND INC.
                Auction Preferred Stock ("APS")

We are (check one):

         [ ] the Existing Holder named below;

         [ ] the Broker-Dealer for such Existing Holder; or

         [ ] the Agent Member for such Existing Holder.

         We  hereby  notify  you that  such  Beneficial  Owner  has  transferred
____________ Series ___ APS to __________________________________________





                                                --------------------------------
                                                (Name of Existing Holder)


                                                --------------------------------
                                                (Name of Broker-Dealer)


                                                --------------------------------
                                                (Name of Agent Member)



By:
     ------------------------------------
     Printed                                                               Name:
     Title:


                                       B-1

<PAGE>

                                    EXHIBIT C

          (Note: To be used only for failures to deliver or to pay for
                        APS sold pursuant to an Auction)

                         NOTICE OF A FAILURE TO DELIVER

         We are a Broker-Dealer for  _______________________  (the "Purchaser"),
which purchased  _________  Series ___ APS of DNP SELECT INCOME FUND INC. in the
Auction held on ____________________ from the seller of such shares.

         We hereby notify you that (check one):

______ the Seller failed to deliver such shares to the Purchaser.

______ the Purchaser  failed to make payment to the Seller upon delivery of such
shares.


                                         Name:
                                               ---------------------------------
                                               UBS SECURITIES LLC


                                         By:
                                               ---------------------------------
                                               Printed Name:
                                               Title:



                                       C-1

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K(11)
<SEQUENCE>8
<FILENAME>c40133_ex-k11.htm
<TEXT>

<HTML>
<HEAD>
   <TITLE></TITLE>
</HEAD>

<BODY bgcolor="#ffffff">


<P align="right">
<B><FONT face="serif">Exhibit k.11</FONT></B></P>
<P align="center">
<B><FONT face="serif">FORM OF MOODY&#146;S PREFERRED STOCK GUIDELINES </FONT></B></P>
<P align="center">
<B><FONT face="serif">As proposed to be adopted by the Board of Directors <br>
of DNP Select Income Fund Inc. </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Set forth below for DNP Select Income Fund Inc. (the &#147;Fund&#148;) are the Moody&#146;s Guidelines, as defined in one or more articles supplementary (&#147;Articles Supplementary&#148;)
establishing and fixing the preferences, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption, of one of more series of preferred stock, par value &#36;.001 per share, of the Fund
(&#147;Fund Preferred Stock&#148;). Capitalized terms used but not defined herein shall have the respective meanings assigned to such terms in the relevant Articles Supplementary.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Any of the provisions of this document may from time to time be amended, altered or repealed by the Board of Directors in its sole discretion, without any vote or consent of shareholders of the Fund,
based on a determination by the Board of Directors that such action is necessary or appropriate in connection with obtaining or maintaining the rating assigned by Moody&#146;s to the Fund Preferred Stock or revising the Fund&#146;s investment
restrictions or policies consistent with guidelines adopted by Moody&#146;s, and any such amendment, alteration or repeal will not be deemed to affect the preferences, rights or powers of the Fund Preferred Stock or the Holders thereof, provided
that the Board of Directors receives written confirmation from Moody&#146;s that any such amendment, alteration or repeal would not adversely affect the rating then assigned by Moody&#146;s to the Fund Preferred Stock. </FONT></P>
<P>
<B><FONT face="serif">1. Certain Definitions. </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">As used in this document, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the
context otherwise requires: </FONT></P>
<blockquote>
  <p>
  <FONT face="serif">&#147;ADR&#148; means American Depository Receipts. </FONT></p>
  <p><FONT face="serif">&#147;AMEX&#148; means American Stock Exchange LLC.</FONT></p>
  <p><FONT face="serif"> &#147;ARMs&#148;</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">means adjustable-rate mortgages.
</FONT></p>
  <p><FONT face="serif">&#147;Asset-Backed and Mortgage-Backed Securities&#148; means: </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) asset-backed securities if (A) such securities are rated at least Aa3 by Moody&#146;s or at least AA- by S&amp;P or Fitch, (B) the securities are part of an issue that is &#36;250 million or
  greater, or the issuer of such securities has a total of &#36;500 million or greater of asset-backed securities outstanding at the time of purchase of the securities by the Fund and (C) the expected average life of the securities is not greater than
  4 years; </FONT></p>
</blockquote>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) CMOs, including CMOs with interest rates that float at a multiple of the change in the underlying index according to a pre-set formula; </FONT><I><FONT face="serif">provided</FONT></I><FONT
face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that any CMO held by the Fund (A) has been rated Aaa by Moody&#146;s or AAA by S&amp;P or Fitch, (B) does not have a coupon which floats inversely, (C) is not
    portioned as an interest-only or principal-only strip and (D) is part of an issuance that had an original issue size of at least &#36;100 million; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) PACs and TACs; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that such PACs or TACs are (A) backed by
  certificates of either the FNMA, the GNMA or the FHLMC representing ownership in single-family first lien mortgage loans with original terms of 30 years, (B) part of an issuance that had an original issue size of at least &#36;10 million, (C) part
  of PAC or TAC classes that have payment priority over other PAC or TAC classes, (D) if TACs, TACs that do not support PAC classes, and (E) if TACs, not considered reverse TACs (i.e., do not protect against extension risk); </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) consolidated senior debt obligations of FHLBs, senior long-term debt of the FNMA, and consolidated system wide bonds and FCS Financial Assistance Fund Bonds of FFCBs (collectively, &#147;FHLB,
  FNMA and FFCB Debentures&#148;); </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that such FHLB, FNMA and FFCB Debentures are (A) direct issuance corporate debt
  rated Aaa by Moody&#146;s, (B) senior debt obligations backed by the FHLBs, FFCBs or FNMA and (C) part of an issue entirely denominated in U.S. dollars;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(v) mortgage pass-throughs rated at least Aa by Moody&#146;s and pass-throughs issued prior to 1987 (if rated AA by S&amp;P and based on fixed-rate mortgage loans) by Travelers Mortgage Services,
  Citicorp Homeowners, Citibank, N.A., Sears Mortgage Security or RFC &#150; Salomon Brothers Mortgage Securities, Inc.; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT
face="serif">, that (A) certificates must evidence a proportional, undivided interest in specified pools of fixed or adjustable rate mortgage loans, secured by a valid first lien, on one- to four-family residential properties and (B) the securities
  are publicly registered (not issued by FNMA, GNMA or FHLMC); </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vi) private-placement mortgage pass-throughs; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that (A)
  certificates represent a proportional undivided interest in specified pools of fixed-rate mortgage loans, secured by a valid first lien, on one- to four-family residential properties, (B) documentation is held by a trustee or independent custodian,
  (C) pools of mortgage loans are serviced by servicers that have been approved by the FNMA or the FHLMC and funds shall be advanced to meet deficiencies to the extent provided in the pooling and servicing agreements creating such certificates, and
  (D) pools have been rated Aa or better by Moody&#146;s; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vii) whole loans (e.g., direct investments in mortgages); </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that
  (A) at least 65% of such loans (1) have seasoning of no less than 6 months, (2) are secured by single-family detached residences, (3) are owner-</FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">-2-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <p>
    <FONT face="serif">occupied primary residences, (4) are secured by a first-lien, fully-documented mortgage, (5) are neither currently delinquent (30 days or more) nor delinquent during the preceding year, (6) have loan-to-value ratios of 80% or
    below, (7) carry normal hazard insurance and title insurance, as well as special hazard insurance, if applicable, (8) have original terms to maturity not greater than 30 years, with at least one year remaining to maturity, (9) have a minimum of
&#36;10,000 remaining principal balance, (10) for loans underwritten after January 1, 1978, FNMA and/or FHLMC forms are used for fixed-rate loans, and (11) such loans are whole loans and not participations; (B) for loans that do not satisfy the
    requirements set forth in the foregoing clause (A), (1) non-owner occupied properties represent no greater than 15% of the aggregate of either the adjustable-rate pool or the fixed-rate pool, (2) multi-family properties (those with five or more
    units) represent no greater than 15% of the aggregate of either the adjustable-rate pool or the fixed-rate pool, (3) condominiums represent no greater than 10% of the aggregate of either the adjustable-rate pool or the fixed-rate pool, and any
    condominium project must be 80% occupied at the time the loan is originated, (4) properties with loan-to-value ratios exceeding 80% represent no greater than 25% of the aggregate of either the adjustable-rate pool or the fixed-rate pool and the
    portion of the mortgage on any such property that exceeds a loan-to-value ratio of 80% is insured with Primary Mortgage Insurance from an insurer rated at least Baa3 by Moody&#146;s and (5) loan balances in excess of the current FHLMC limit plus
&#36;75,000 represent no greater than 25% of the aggregate of either the adjustable-rate pool or the fixed-rate pool, loan balances in excess of &#36;350,000 represent no greater than 10% of the aggregate of either the adjustable-rate pool or the
    fixed-rate pool, and loan balances in excess of &#36;1,000,000 represent no greater than 5% of the aggregate of either the adjustable-rate pool or the fixed-rate pool; (C) no greater than 5% of the pool of loans is concentrated in any one zip code;
    (D) the pool of loans contains at least 100 loans or &#36;2 million in loans per servicer; (E) for ARMs, (1) any ARM is indexed to the National Cost of Funds index, the 11th District Cost of Funds index, the 1-year Treasury or the 6-month Treasury,
    (2) the margin over the given index is between 0.15% and 0.25% for either cost-of-funds index and between 0.175% and 0.325% for Treasuries, (3) the maximum yearly interest rate increase is 2%, (4) the maximum life-time interest rate increase is
    6.25% and (5) ARMs may include Federal Housing Administration and Department of Veterans Affairs loans; and (F) for &#147;teaser&#148; loans, (1) the initial discount from the current ARM market rate is no greater than 2%, (2) the loan is
    underwritten at the market rate for ARMs, not the &#147;teaser&#148; rate, and (3) the loan is seasoned six months beyond the &#147;teaser&#148; period. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Bank Loans&#148; means direct purchases of, assignments of, participations in and other interests in (i) any bank loan or (ii) any loan made by an investment bank, investment fund or other
financial institution; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that such loan under this clause (ii) is similar to those typically made, syndicated,
purchased or participated by a commercial bank or institutional loan investor in the ordinary course of business. </FONT></P>
<P align="center">
<FONT face="serif">-3-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Cash Equivalents&#148; means interest and dividends due on assets rated (i) Baa3 or higher by Moody&#146;s if the payment date is within five Business Days of the Valuation Date, (ii) A2 or
higher if the payment date is within thirty days of the Valuation Date, and (iii) A1 or higher if the payment date is within the Exposure Period.</FONT></P>
<P>
<FONT face="serif">&#147;CMOs&#148; means collateralized mortgage obligations. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Corporate Debt Securities&#148; means corporate debt securities (including convertible preferred securities) if (i) such securities are rated B3 or higher by Moody&#146;s; (ii) such securities
provide for the periodic payment of interest in cash in U.S. dollars or euros, except that such securities that do not pay interest in U.S. dollars or euros shall be considered Eligible Assets if they are rated by Moody&#146;s or S&amp;P or Fitch;
(iii) in the case of corporate debt securities which provide for conversion or exchange into equity capital at some time over their lives, the issuer of such securities is rated at least B3 by Moody&#146;s; (iv) such securities have been registered
under the Securities Act, or are restricted as to resale under federal securities laws but are eligible for resale pursuant to Rule 144A under the Securities Act, as determined by the Fund&#146;s investment manager or portfolio manager acting
pursuant to procedures approved by the Board of Directors, except that such securities that are not subject to U.S. federal securities laws shall be considered Eligible Assets if they are publicly traded; and (v) such securities are not subject to
extended settlement. In addition, if any issue of corporate debt securities is rated Ba1 or below, no more than 10% of the original amount of such issue may constitute Eligible Assets. Notwithstanding the foregoing, (i) corporate debt securities not
rated at least B3 by Moody&#146;s or not rated by Moody&#146;s shall be considered to be Eligible Assets only to the extent the Market Value of such corporate debt securities does not exceed 10% of the aggregate Market Value of all Eligible Assets;
</FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that if the Market Value of such corporate debt securities exceeds 10% of the aggregate Market Value of all
Eligible Assets, a portion of such corporate debt securities (selected by the Fund) shall not be considered Eligible Assets, so that the Market Value of such corporate debt securities (excluding such portion) does not exceed 10% of the aggregate
Market Value of all Eligible Assets; and (ii) corporate debt securities rated by neither Moody&#146;s nor S&amp;P nor Fitch shall be considered to be Eligible Assets only to the extent such securities are issued by entities which (A) have not filed
for bankruptcy within the past three years, (B) are current on all principal and interest in their fixed income obligations, (C) are current on all preferred stock dividends, and (D) possess a current, unqualified auditor&#146;s report without
qualified, explanatory language. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Discount Factors&#148; means the following Discount Factors which are to be used for purposes of calculating the &#147;Discounted Value&#148; of the assets of the Fund for purposes of
determining maintenance of the &#147;Preferred Stock Basic Maintenance Amount&#148; (it being understood that any asset held by the Fund for which no Discount Factor is specified in these Guidelines shall have a Discounted Value of zero). The
Discount Factor applied to any Eligible Asset that is not denominated in U.S. dollars shall be the product of (i) the Discount Factor applicable to such asset as set forth below and (ii) the Discount Factor determined by reference to the currency in
which such asset is denominated in accordance with the table set forth in paragraph (s) below (it being understood that if the currency in which such asset is denominated is not set forth in such table, the Fund shall contact Moody&#146;s to obtain
the applicable Discount Factor).</FONT></P>
<P align="center">
<FONT face="serif">-4-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <p>
    <FONT face="serif">(a) </FONT><U><FONT face="serif">Asset-Backed and Mortgage-Backed Securities</FONT></U><FONT face="serif">. </FONT></p>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) The Discount Factor applied to asset-backed securities shall be 1.31.</FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) The Discount Factor applied to FHLB, FNMA and FFCB Debentures shall be determined in accordance with, as the case may be, (A) the table set forth in subparagraph (iii) below (in the event that
    such FHLB, FNMA and FFCB Debentures constitute CMOs) and (B) the table set forth in subparagraph (iv) below (in the event that such FHLB, FNMA and FFCB Debentures constitute mortgage pass-throughs).</FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) The Discount Factor applied to CMOs, PACs and TACs shall be determined by reference to the weighted average life of the security in accordance with the table set forth below. </FONT></p>
  </blockquote>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">Remaining Term to Maturity</FONT> &nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">Discount Factor</FONT>
        </TD>
</TR>
<TR>
        <TD><HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">3 years or less</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">1.33</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">7 years or less (but longer than 3 years)</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">1.42</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">10 years or less (but longer than 7 years)</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">1.58</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">20 years or less (but longer than 10 years)</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">1.74</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">Greater than 20 years</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">2.05</FONT>&nbsp;
        </TD>
</TR>
</TABLE><BR>

  <blockquote>
      <blockquote>
        <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) The Discount Factor applied to residential mortgage pass-throughs (including private-placement mortgage pass-throughs), GNMA Multifamily Securities, GNMA Certificates, FNMA Certificates, FHLMC
        Certificates and FHLMC Multifamily Securities shall be determined by reference to the coupon paid by such security in accordance with the table set forth below. With respect to GNMA Graduated Payment Securities, the same Discount Factor shall apply
        in the case of such securities as applies to GNMA Certificates with fixed interest rates determined at the point the certificates become seasoned.</FONT></p>

        <blockquote>
        <TABLE width="35%" border=0 align="center" cellpadding=0 cellspacing=0>
    <TR valign="bottom">
          <TD width=25% align=center>
            <div align="left"><FONT face="serif">Coupon</FONT>
            </div></TD>
          <TD width=38% align=center>
            <center>
              <FONT face="serif">Discount Factor</FONT>
          </center></TD>
    </TR>
    <TR valign="bottom">
      <TD align=right><HR align="left" width="60" size=1 noshade></TD>
      <TD align=CENTER><HR align="center" width="120" size=1 noshade></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">5</FONT><FONT face="serif">%</FONT>            </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.66</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">6%</FONT>
        </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.62</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">7%</FONT>
        </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.58</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">8%</FONT>
        </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.54</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">9%</FONT>
        </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.51</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">10%</FONT>
        </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.48</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">11%</FONT>
        </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.44</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">12</FONT><FONT face="serif">%</FONT>             </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.42</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=right>          <div align="left"><FONT face="serif">13%</FONT>
            </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.39</FONT>&nbsp;
            </center></TD>
    </TR>
    <TR valign="bottom">
          <TD width=25% align=center>          <div align="left"><FONT face="serif">Adjustable</FONT>
              </div></TD>
          <TD width=38% align=right>
            <center>
              <FONT face="serif">1.65</FONT>&nbsp;
            </center></TD>
    </TR>
  </TABLE>

    </blockquote>
  </blockquote>
</blockquote>
<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Notwithstanding the foregoing, the Discount Factor applied to fixed-rate pass-throughs that are not rated by Moody&#146;s and are serviced by a servicer approved by </FONT></P>
<P align="center"> <FONT face="serif">-5-</FONT></P>
<p><BR>

</p>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<P>
<FONT face="serif">Moody&#146;s shall be determined by reference to the Discount Factor table relating to whole loans set forth in subparagraph (v) below.</FONT></P>
<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(v) The Discount Factor applied to whole loans shall be determined by reference to the coupon paid by such security in accordance with the table set forth below. </FONT></p>
    <TABLE width="35%" border=0 cellpadding=0 cellspacing=0>
      <TR valign="bottom">
        <TD width=25% align=center>
          <div align="left"><FONT face="serif">Coupon</FONT> </div></TD>
        <TD width=38% align=center> <center>
          <FONT face="serif">Discount Factor</FONT>
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD align=right><HR align="left" width="60" size=1 noshade></TD>
        <TD align=center><HR align="center" width="120" size=1 noshade></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">5</FONT> % </div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.72</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">6%</FONT> </div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.67</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">7</FONT> %</div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.63</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">8</FONT>%</div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.59</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">9%</FONT> </div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.55</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">10</FONT>%</div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.51</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">11</FONT>%</div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.48</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">12</FONT>%</div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.45</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=right> <div align="left"><FONT face="serif">13%</FONT> </div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.42</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=25% align=center> <div align="left"><FONT face="serif">Adjustable</FONT> </div></TD>
        <TD width=38% align=right> <center>
          <FONT face="serif">1.70</FONT>&nbsp;
        </center></TD>
      </TR>
    </TABLE>

  </blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(b) </FONT><U><FONT face="serif">Bank Loans and Senior Loans</FONT></U><FONT face="serif">. The Discount Factor applied to Bank Loans and Senior Loans shall be the amount specified in accordance with
  the table set forth below (or such lower amount as Moody&#146;s may approve in writing from time to time):</FONT></p>
</blockquote>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD align=left>

        </TD>
        <TD>&nbsp;
  </TD>
        <TD colspan="7" align=left>
          <center>
            <FONT face="serif">Moody&#146;s Rating Category</FONT>
          </center></TD>
  </TR>
<TR>
        <TD>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD><HR noshade size=1></TD>
        <TD colspan=3>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD align=left>

        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=center>
<FONT face="serif">Caa and below</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=left>

        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=center>
<FONT face="serif">(including</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=left>

        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>

        </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=center>
<FONT face="serif">distressed and</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=center>
<FONT face="serif">Type of Loan</FONT>
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=center nowrap>
<FONT face="serif">Aaa-A</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=center>
<FONT face="serif">Baa and Ba</FONT><SUP><FONT face="serif">(1)</FONT></SUP>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=right><center><FONT face="serif">B</FONT><SUP><FONT face="serif">(1)</FONT></SUP>
    </center></TD>
        <TD align=left>&nbsp;</TD>
        <TD align=center>
<FONT face="serif">unrated)</FONT><SUP><FONT face="serif">(1)</FONT></SUP>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>&nbsp;</TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>&nbsp;</TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
        <TD>&nbsp;

        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR>
        <TD colspan=9>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD align=center>
          <div align="left"><FONT face="serif">Senior Loans greater than</FONT>
    </div></TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>

          <center>
    </center></TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD align=right>
          <div align="left"><FONT face="serif">&#36;250</FONT>
    <FONT face="serif">MM</FONT>          </div></TD>
        <TD>&nbsp;
  </TD>
        <TD align=center>
<FONT face="serif">1.18</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=center>
<FONT face="serif">1.36</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=right>
          <center>
            <FONT face="serif">1.49</FONT>
    </center></TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=center>
<FONT face="serif">2.50</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=center>
          <div align="left"><FONT face="serif">non-Senior Loans greater</FONT>
    </div></TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>

          <center>
    </center></TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD align=right>
          <div align="left"><FONT face="serif"> <FONT face="serif">than &#36;</FONT>250</FONT>
    <FONT face="serif">MM</FONT>          </div></TD>
        <TD>&nbsp;
  </TD>
        <TD align=center>
<FONT face="serif">1.28</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=center>
<FONT face="serif">1.46</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=right>
          <center>
            <FONT face="serif">1.59</FONT>
    </center></TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=center>
<FONT face="serif">2.50</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">Bank Loans less than</FONT>
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;</TD>
        <TD align=left>

          <center>
    </center></TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=left>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD align=right>
          <div align="left"><FONT face="serif">&#36;250MM</FONT>
    </div></TD>
        <TD>&nbsp;
  </TD>
        <TD align=center>
<FONT face="serif">1.38</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=center>
<FONT face="serif">1.56</FONT>&nbsp;
        </TD>
        <TD align=center>&nbsp;</TD>
        <TD align=right>
          <center>
            <FONT face="serif">1.69</FONT>
    </center></TD>
        <TD align=left>&nbsp;

        </TD>
        <TD align=center>
<FONT face="serif">2.70</FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>
<P>
<FONT face="serif">(1) If a Senior Loan is not rated by any of Moody&#146;s, S&amp;P or Fitch, the Fund shall use the applicable Discount Factor set forth under the column entitled &#147;Caa and below (including distressed and unrated)&#148; in the
table above. Ratings assigned by S&amp;P and/or Fitch are generally accepted by Moody&#146;s at face value. However, adjustments to face value may be made to particular categories of securities for which the ratings by S&amp;P and/or Fitch do not
seem to approximate a Moody&#146;s rating equivalent. Split-rated securities assigned by S&amp;P and Fitch (i.e., these rating agencies assign different rating categories to the security) shall be accepted at the lower of the two ratings;
</FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that, in a situation where a security is rated &#147;B&#148; (or equivalent) by a given rating agency and rated
&#147;CCC&#148; (or equivalent) by another rating agency, </FONT></P>
<P align="center">
<FONT face="serif">-6-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<P>
<FONT face="serif">the Fund shall use the applicable Discount Factor set forth under the column entitled &#147;B&#148; in the table above.</FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(c) </FONT><U><FONT face="serif">Cash Equivalents</FONT></U><FONT face="serif">. The Discount Factor applied to Cash Equivalents shall be 1.00.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(d) </FONT><U><FONT face="serif">Eligible Common Stocks of U.S. issuers and non-U.S. issuers for which</FONT></U><FONT face="serif"> </FONT><U><FONT face="serif">ADRs are traded</FONT></U><FONT
face="serif">. The Discount Factor applied to Eligible Common Stocks of U.S. issuers and non-U.S. issuers for which ADRs are traded (other than Eligible Common Stocks of REITs) shall be determined by reference to the industry of the issuer of such
  Eligible Common Stock in accordance with the table set forth below.</FONT></p>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=26% align=left>
 <FONT face="serif">Industry</FONT>&nbsp;
        </TD>
        <TD width=20%>&nbsp;
  </TD>
        <TD width=44% align=center>
 <FONT face="serif">Discount Factor</FONT>
        </TD>
  </TR>
<TR valign="bottom">
  <TD align=left><HR align="left" width="80" size=1 noshade></TD>
  <TD>&nbsp;</TD>
  <TD align=center><HR width="100" size=1 noshade></TD>
</TR>
<TR valign="bottom">
        <TD width=26% align=left>
<FONT face="serif">Utility</FONT>&nbsp;
        </TD>
        <TD width=20%>&nbsp;
  </TD>
        <TD width=44% align=right>
          <center>
            <FONT face="serif">1.70</FONT>
          </center></TD>
  </TR>
<TR valign="bottom">
        <TD width=26% align=left>
<FONT face="serif">Industrial</FONT>&nbsp;
        </TD>
        <TD width=20%>&nbsp;
  </TD>
        <TD width=44% align=right>
          <center>
            <FONT face="serif">2.64</FONT>
          </center></TD>
  </TR>
<TR valign="bottom">
        <TD width=26% align=left>
<FONT face="serif">Financial</FONT>&nbsp;
        </TD>
        <TD width=20%>&nbsp;
  </TD>
        <TD width=44% align=right>
          <center>
            <FONT face="serif">2.41</FONT>**          </center></TD>
  </TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Notwithstanding the foregoing, the amount of Eligible Common Stocks issued by public utility companies with nuclear facilities under construction (as determined by the Fund&#146;s investment adviser)
which may be included in the aggregate Discounted Value of the Fund&#146;s Eligible Assets for purposes of comparison with the Preferred Stock Basic Maintenance Amount shall be limited to five percent of the Market Value of the Eligible Assets.
</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(e) </FONT><U><FONT face="serif">Eligible Common Stock and Eligible Preferred Stock of REITs and other</FONT></U><FONT face="serif"> </FONT><U><FONT face="serif">real estate companies</FONT></U><FONT
face="serif">. The Discount Factor applied to the Eligible Common Stock and the Eligible Preferred Stock of REITs shall be determined in accordance with the table set forth below.</FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=59% align=left>
 <FONT face="serif">Type of Security</FONT>
        </TD>
        <TD width=27% align=center>
 <FONT face="serif">Discount Factor </FONT> <FONT face="serif">(1) (2) (3)</FONT>
        </TD>
</TR>
<TR valign="bottom">
  <TD align=left><HR align="left" width="100" size=1 noshade></TD>
  <TD align=center><HR align="center" width="200" size=1 noshade></TD>
</TR>
<TR valign="bottom">
        <TD width=59% align=left>
          <div align="left"><FONT face="serif">Eligible Common Stock of REITs</FONT>&nbsp;
          </div></TD>
        <TD width=27% align=center>
<FONT face="serif">1.54</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=59% align=left>
          <div align="left"><FONT face="serif">Eligible Preferred Stock of REITs</FONT>&nbsp;
          </div></TD>
        <TD width=27% align=left>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD width=59% align=center>
          <div align="left"><FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;With Senior Implied Rating (by Moody&#146;s or S&amp;P)</FONT>&nbsp;
          </div></TD>
        <TD width=27% align=center>
<FONT face="serif">1.54</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=59% align=right>
          <div align="left"><FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;without Senior Implied Rating (by Moody&#146;s or S&amp;P)</FONT>&nbsp;
          </div></TD>
        <TD width=27% align=center>
<FONT face="serif">2.08</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=59% align=left>
          <div align="left"><FONT face="serif">Eligible Preferred Stock of other real estate companies</FONT>&nbsp;
          </div></TD>
        <TD width=27% align=left>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD width=59% align=center>
          <div align="left"><FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;With Senior Implied Rating (by Moody&#146;s or S&amp;P)</FONT>&nbsp;
          </div></TD>
        <TD width=27% align=center>
<FONT face="serif">2.08</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=59% align=right>
          <div align="left"><FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;without Senior Implied Rating (by Moody&#146;s or S&amp;P)</FONT>&nbsp;
          </div></TD>
        <TD width=27% align=center>
<FONT face="serif">2.50</FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>
<blockquote>
  <blockquote>
    <table width="65%" border="0">
      <tr align="left" valign="top" bgcolor="#FFFFFF">
        <td><FONT face="serif">(1)</FONT></td>
        <td><FONT face="sans-serif"></FONT><FONT face="serif">A Discount Factor of 2.50 shall be applied to those assets in a single Real Estate Industry/ Property Sector Classification which exceeds 30% of the aggregate Market Value of all Eligible Assets but are not greater than 35% of the aggregate Market Value of all Eligible Assets. </FONT></td>
      </tr>
      <tr align="left" valign="top" bgcolor="#FFFFFF">
        <td>&nbsp;</td>
        <td>&nbsp;</td>
      </tr>
      <tr align="left" valign="top" bgcolor="#FFFFFF">
        <td><FONT face="serif">(2)</FONT><FONT face="sans-serif">&nbsp; </FONT><FONT face="serif">&nbsp;</FONT></td>
        <td><FONT face="serif">A Discount Factor of 2.50 shall be applied if dividends on such securities have not been paid consistently (either quarterly or annually) over the previous three years, or for such shorter time period that such securities have been outstanding. </FONT></td>
      </tr>
    </table>
  </blockquote>
</blockquote>
<p>&nbsp;</p>
<P align="center">
<FONT face="serif">-7-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>
<blockquote>
  <blockquote>
<table width="65%" border="0">
  <tr align="left" valign="top" bgcolor="#FFFFFF">
    <td><FONT face="serif">(3)&nbsp;</FONT></td>
    <td> <FONT face="serif"> A Discount Factor of 2.50 shall be applied if the market capitalization (including Eligible Common Stock and Eligible Preferred Stock) of an issuer is below &#36;500 million. </FONT></td>
  </tr>
</table>
</blockquote>
</blockquote>

<blockquote>
  <blockquote>
    <blockquote>
      <p>
        <FONT face="serif">(f) </FONT><U><FONT face="serif">Corporate Debt Securities</FONT></U><FONT face="serif">.</FONT></p>
      <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraphs (ii) and (iii) below, the Discount Factor for Corporate Debt Securities shall be determined by reference to the rating on such asset with reference to the remaining term
      to maturity of such asset, in accordance with the table set forth below.</FONT></p>
    </blockquote>
  </blockquote>
</blockquote>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD align=left>&nbsp;

        </TD>
        <TD>&nbsp;
  </TD>
        <TD colspan="13" align=left>
          <center>
          <FONT face="serif">Moody&#146;s Rating Category</FONT>&nbsp;
          </center></TD>
  </TR>
<TR>
        <TD>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD><HR noshade size=1>
        </TD>
        <TD colspan=9>
<HR noshade size=1>
        </TD>
        <TD><HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">Term to Maturity of</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">Corporate Debt Security (2)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">Aaa</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">Aa</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">A</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">Baa</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">Ba</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">B</FONT>&nbsp;
          </center></TD>
        <TD align=left><center>
        </center></TD>
        <TD align=left>          <center>
        <FONT face="serif"> Unrated</FONT><FONT face="serif">(1)</FONT>          </center></TD>
</TR>
<TR valign="bottom">
  <TD align=left><HR noshade size=1></TD>
  <TD>&nbsp;&nbsp;&nbsp;</TD>
  <TD align=left><hr align="center" size=1 noshade></TD>
  <TD><center>
&nbsp;&nbsp;&nbsp;  </center></TD>
  <TD align=left><HR align="center" size=1 noshade></TD>
  <TD><center>
&nbsp;&nbsp;&nbsp;  </center></TD>
  <TD align=left><HR align="center" size=1 noshade></TD>
  <TD><center>
&nbsp;&nbsp;&nbsp;  </center></TD>
  <TD align=left><HR align="center" size=1 noshade></TD>
  <TD><center>
&nbsp;&nbsp;&nbsp;  </center></TD>
  <TD align=left><HR align="center" size=1 noshade></TD>
  <TD><center>
&nbsp;&nbsp;&nbsp;  </center></TD>
  <TD align=left><HR align="center" size=1 noshade></TD>
  <TD><center>
&nbsp;&nbsp;&nbsp;  </center></TD>
  <TD align=right><HR align="center" size=1 noshade></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">1 year or less</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.09</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.12</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.15</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.18</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.37</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.50</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">2 years or less (but longer than 1</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">year)</FONT></TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.15</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.18</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.22</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.25</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.46</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.60</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">3 years or less (but longer than 2</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.20</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.23</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.27</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.31</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.53</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.68</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">4 years or less (but longer than 3</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.26</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.29</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.33</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.38</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.61</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.76</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">5 years or less (but longer than 4</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.32</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.35</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.39</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.44</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.68</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.85</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">7 years or less (but longer than 5</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.39</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.43</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.47</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.52</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.79</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.97</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD colspan=3 align=left>
<FONT face="serif">10 years or less (but longer than 7</FONT>&nbsp;
        </TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.45</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.50</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.55</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.60</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.89</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">2.08</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD colspan=3 align=left>
<FONT face="serif">15 years or less (but longer than 10</FONT>&nbsp;
        </TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.50</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.55</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.60</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.65</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.96</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">2.16</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD colspan=3 align=left>
<FONT face="serif">20 years or less (but longer than 15</FONT>&nbsp;
        </TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.50</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.55</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.60</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.65</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.96</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">2.28</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD colspan=3 align=left>
<FONT face="serif">30 years or less (but longer than 20</FONT>&nbsp;
        </TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">years)</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.50</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.55</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.60</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.65</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.96</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">2.29</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD align=left>
<FONT face="serif">Greater than 30 years</FONT>&nbsp;
        </TD>
        <TD>&nbsp;
  </TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.65</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.73</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.81</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">1.89</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">2.05</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=left>
          <center>
          <FONT face="serif">2.40</FONT>&nbsp;
          </center></TD>
        <TD>
          <center>
    </center></TD>
        <TD align=right>
          <center>
          <FONT face="serif">2.50</FONT>&nbsp;
          </center></TD>
</TR>
</TABLE>
<HR align="left" width="72" size=1 noshade>
<div align="left"></div>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">(1)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Unless conclusions regarding liquidity risk as well as estimates of both the probability and severity of default for the Fund&#146;s assets can be derived from other sources, securities rated below B by Moody&#146;s and unrated
securities, which are securities rated by neither Moody&#146;s, S&amp;P nor Fitch, shall be limited to 10% of the aggregate Market Value of all Eligible Assets. If a Corporate Debt Security is unrated by Moody&#146;s, S&amp;P or Fitch, the Fund
shall use the Discount Factor set forth under &#147;Unrated&#148; in this table. Ratings assigned by S&amp;P or Fitch are generally accepted by Moody&#146;s at face value. However, adjustments to face value may be made to particular categories of
credits for which the S&amp;P and/or Fitch rating does not seem to approximate a Moody&#146;s rating equivalent.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">-8-</FONT></P>

<HR noshade  width="100%" size=4>
<P align="left" style="page-break-before:always"></P><PAGE>
<TABLE border=0 cellspacing=0 cellpadding=0>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD> <FONT face="serif">Split rated securities assigned by S&amp;P and Fitch shall be accepted at the lower of the two ratings.</FONT></TD>
  </TR>
  <TR>
    <TD nowrap valign=top>&nbsp;</TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR>
    <TD nowrap valign=top><FONT face="serif">(2)</FONT><FONT face="sans-serif">&nbsp; </FONT><FONT face="serif">&nbsp; &nbsp; &nbsp;      </FONT></TD>
    <TD> <FONT face="serif">The Discount Factors for Corporate Debt Securities shall also be applied to any interest rate swap or cap, in which case the rating of the counterparty shall determine the appropriate rating category. </FONT></TD>
  </TR>
  <TR>
    <TD colspan=2>&nbsp;</TD>
  </TR>
</TABLE>

<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) The Discount Factor for Corporate Debt Securities which provide for conversion or exchange into equity capital at some time over their lives (&#147;Convertible Securities&#148;) shall be
    determined by reference to the delta of such asset with reference to the rating on such asset, in accordance with the guidelines set forth below. (1)(2) </FONT></p>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(A) Convertible Securities having a delta that ranges between .4-0 shall be discounted using the Discount Factors set forth in the table relating to Discount Factors for Corporate Debt Securities set
      forth in subparagraph (f)(i) above.</FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(B) The Discount Factor for Convertible Securities having a delta that ranges from 1-.8 shall be determined by reference to the rating on such asset in accordance with the table set forth
      below:</FONT></p>
  </blockquote>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=54% align=left>
 <FONT face="serif">Moody&#146;s Rating Category</FONT>
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=33% align=center>
 <FONT face="serif">Discount Factor</FONT>
        </TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="center" size=1 noshade></TD>
  <TD>&nbsp;</TD>
  <TD align=center><hr align="center" size=1 noshade></TD>
</TR>
<TR valign="bottom">
        <TD width=54% align=left>
<FONT face="serif">Ranging from Aaa-Baa3</FONT>&nbsp;
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=33% align=center>
          <center>
          <FONT face="serif">1.95</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=54% align=left>
<FONT face="serif">Ba1 or lower</FONT>&nbsp;
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">2.29</FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>
<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(C) The Discount Factor for Convertible Securities having a delta that ranges from .8-.4 shall be determined by reference to the rating on such asset in accordance with the table set forth
      below:</FONT></p>
  </blockquote>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=54% align=left>
 <FONT face="serif">Moody&#146;s Rating Category</FONT>
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=33% align=center>
 <FONT face="serif">Discount Factor</FONT>
        </TD>
</TR>
<TR valign="bottom">
  <TD align=left><hr align="center" size=1 noshade></TD>
  <TD>&nbsp;</TD>
  <TD align=center><hr align="center" size=1 noshade></TD>
</TR>
<TR valign="bottom">
        <TD width=54% align=left>
<FONT face="serif">Ranging from Aaa-Baa3</FONT>&nbsp;
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.92</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=54% align=left>
<FONT face="serif">Ba1 or lower</FONT>&nbsp;
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">2.26</FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>
<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(D) The Discount Factor for Convertible Securities that are unrated by Moody&#146;s shall be 2.50.</FONT><FONT face="serif"> </FONT></p>
  </blockquote>
</blockquote>
<hr align="left" width="100" size=1 noshade>
<P>
<FONT face="serif">(1) Ratings assigned by S&amp;P or Fitch are generally accepted by Moody&#146;s at face value. </FONT></P>
<P>
<FONT face="serif">(2) Upon conversion of Convertible Securities to Eligible Common Stock, the Discount Factors applicable to Eligible Common Stock shall apply. </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) Any Corporate Debt Security that is issued by a regulated public utility company and that has a remaining maturity of more than 30 years shall have a Discount Factor of zero.</FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">-9-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(g) </FONT><U><FONT face="serif">Financial Contracts</FONT></U><FONT face="serif">. The Discount Factor applied to Financial Contracts shall be determined by reference to the rating of such assets
      with reference to the remaining term to maturity in accordance with the Discount Factor table used for Corporate Debt Securities in subparagraph (i) above. </FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(h) </FONT><U><FONT face="serif">Short-term instruments</FONT></U><FONT face="serif">. The Discount Factor applied to short-term portfolio securities, including without limitation Short Term Money
      Market Instruments, shall be (i) 1.00, so long as such portfolio securities mature or have a demand feature at par exercisable within the Exposure Period; (ii) 1.15, so long as such portfolio securities do not mature within the Exposure Period or
      have a demand feature at par not exercisable within the Exposure Period; and (iii) 1.25, if such securities are not rated by Moody&#146;s, so long as such portfolio securities are rated at least A-1+/AA or SP-1+/AA by S&amp;P and mature or have a
      demand feature at par exercisable within the Exposure Period.</FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) </FONT><U><FONT face="serif">Municipal Debt Obligations</FONT></U><FONT face="serif">. The Discount Factor applied to Municipal Debt Obligations shall be the amount determined by reference to the
      rating on such asset in accordance with the table set forth below:</FONT></p>
    <TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
      <TR valign="bottom">
        <TD width=46% align=right>
          <div align="left"> <FONT face="serif">Moody&#146;s Rating </FONT> <FONT face="serif">Category</FONT> </div></TD>
        <TD width=18%>&nbsp; </TD>
        <TD width=35% align=center> <FONT face="serif">Discount Factor</FONT> </TD>
      </TR>
      <TR>
        <TD>
          <HR noshade size=1>
        </TD>
        <TD> </TD>
        <TD>
          <HR noshade size=1>
        </TD>
      </TR>
      <TR valign="bottom">
        <TD width=46% align=left> <FONT face="serif">Aaa</FONT>&nbsp; </TD>
        <TD width=18%>&nbsp; </TD>
        <TD width=35% align=center> <FONT face="serif">1.51</FONT>&nbsp; </TD>
      </TR>
      <TR valign="bottom">
        <TD width=46% align=left> <FONT face="serif">Aa</FONT>&nbsp; </TD>
        <TD width=18%>&nbsp; </TD>
        <TD width=35% align=center> <FONT face="serif">1.59</FONT>&nbsp; </TD>
      </TR>
      <TR valign="bottom">
        <TD width=46% align=left> <FONT face="serif">A</FONT>&nbsp; </TD>
        <TD width=18%>&nbsp; </TD>
        <TD width=35% align=center> <FONT face="serif">1.60</FONT>&nbsp; </TD>
      </TR>
      <TR valign="bottom">
        <TD width=46% align=left> <FONT face="serif">Baa</FONT>&nbsp; </TD>
        <TD width=18%>&nbsp; </TD>
        <TD width=35% align=center> <FONT face="serif">1.73</FONT>&nbsp; </TD>
      </TR>
      <TR valign="bottom">
        <TD width=46% align=left> <FONT face="serif">Unrated (1)</FONT>&nbsp; </TD>
        <TD width=18%>&nbsp; </TD>
        <TD width=35% align=center> <FONT face="serif">2.25</FONT>&nbsp; </TD>
      </TR>
    </TABLE>
    </blockquote>
</blockquote>
<hr align="left" width="100" size=1 noshade>
<FONT face="serif">(1) Unless conclusions regarding liquidity risk as well as estimates of both the probability and severity of default for the municipal issuer&#146;s assets can be derived from other sources as well as combined with a number of
sources as presented by the Fund to Moody&#146;s, securities rated below Baa by Moody&#146;s and unrated securities, which are securities rated by neither Moody&#146;s, S&amp;P nor Fitch, shall be limited to 10% of the aggregate Market Value of all
Eligible Assets. If a Municipal Debt Obligation is unrated by Moody&#146;s, S&amp;P or Fitch, the Fund shall use the Discount Factor set forth under &#147;Unrated&#148; in the table set forth above. Ratings assigned by S&amp;P or Fitch are generally
accepted by Moody&#146;s at face value. However, adjustments to face value may be made to particular categories of credits for which the S&amp;P and/or Fitch rating does not seem to approximate a Moody&#146;s rating equivalent. Split-rated
securities assigned by S&amp;P and Fitch shall be accepted at the lower of the two ratings. </FONT>
<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(j) </FONT><U><FONT face="serif">Municipal Obligations and Receivables for Municipal Obligations Sold</FONT></U><FONT face="serif">. The Discount Factor applied to Municipal Obligations shall be
      determined in accordance with the table set forth below. </FONT></p>
  </blockquote>
</blockquote>
<BR>

<P align="center">
<FONT face="serif">-10-</FONT></P>
<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>
<p>&nbsp;</p>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
  <TR valign="bottom">
    <TD width=46% align=right>
      <div align="left"> <FONT face="serif">Moody&#146;s Rating </FONT> <FONT face="serif">Category</FONT> </div></TD>
    <TD width=18%>&nbsp; </TD>
    <TD width=35% align=center> <FONT face="serif">Discount Factor</FONT> </TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR noshade size=1>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=46% align=left> <FONT face="serif">MIG-1, VMIG-1, P-1 (1)</FONT>&nbsp; </TD>
    <TD width=18%>&nbsp; </TD>
    <TD width=35% align=center> <FONT face="serif">1.00</FONT> </TD>
  </TR>
  <TR valign="bottom">
    <TD width=46% align=left> <FONT face="serif">MIG-1, VMIG-1, P-1 (2) </FONT>&nbsp; </TD>
    <TD width=18%>&nbsp; </TD>
    <TD width=35% align=center> <FONT face="serif">1.36</FONT>&nbsp; </TD>
  </TR>
</TABLE>
<p>&nbsp;</p>
<hr align="left" width="100" size=1 noshade>
<FONT face="serif">(1) Moody&#146;s rated Municipal Obligations that have a maturity less than or equal to 49 days and Municipal Obligations not rated by Moody&#146;s but rated the equivalent to MIG-1, VMIG-1, or P-1 by S&amp;P or F1 by Fitch that
    have a maturity less than or equal to 49 days.</FONT>
<P>
<FONT face="serif">(2) Moody&#146;s rated Municipal Obligations that have a maturity greater than 49 days and Municipal Obligations not rated by Moody&#146;s but rated the equivalent to MIG-1, VMIG-1, or P-1 by S&amp;P or F1 by Fitch that have a
maturity greater than 49 days. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Notwithstanding the foregoing, no Discount Factor shall be applied to Receivables for Municipal Obligations Sold that are due within five Business Days of a given Valuation Date. The Discount Factor
for Receivables for Municipal Obligations Sold that are due within six and 30 Business Days of a given Valuation Date shall be the Discount Factor applicable to the Municipal Obligations sold. </FONT></P>
<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(k) </FONT><U><FONT face="serif">Eligible Preferred Stock</FONT></U><FONT face="serif">. The Discount Factor applied to Eligible Preferred Stock (other than Eligible Preferred Stock of REITs) shall be
      determined by reference to the rating of such assets in accordance with the table set forth below. </FONT></p>
    <TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
      <TR valign="bottom">
        <TD width=48% align=left>  <FONT face="serif">Moody&#146;s Rating Category</FONT> &nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=center> <center>
          <FONT face="serif">Discount Factor</FONT> <FONT face="serif">(1)(2)</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD align=left><HR noshade size=1></TD>
        <TD>&nbsp;</TD>
        <TD align=right><HR noshade size=1></TD>
      </TR>
      <TR valign="bottom">
        <TD width=48% align=left> <FONT face="serif">Aaa</FONT>&nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=right> <center>
          <FONT face="serif">1.50</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=48% align=left> <FONT face="serif">Aa</FONT>&nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=right> <center>
          <FONT face="serif">1.55</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=48% align=left> <FONT face="serif">A</FONT>&nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=right> <center>
          <FONT face="serif">1.60</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=48% align=left> <FONT face="serif">Baa</FONT>&nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=right> <center>
          <FONT face="serif">1.65</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=48% align=left> <FONT face="serif">Ba</FONT>&nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=right> <center>
          <FONT face="serif">1.96</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=48% align=left> <FONT face="serif">B</FONT>&nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=right> <center>
          <FONT face="serif">2.16</FONT>&nbsp;
        </center></TD>
      </TR>
      <TR valign="bottom">
        <TD width=48% align=left> <FONT face="serif">&lt;B or Not Rated</FONT>&nbsp; </TD>
        <TD width=10%>&nbsp; </TD>
        <TD width=40% align=right> <center>
          <FONT face="serif">2.50</FONT>&nbsp;
        </center></TD>
      </TR>
    </TABLE>
    <p>&nbsp;</p>
  </blockquote>
</blockquote>
<hr align="left" width="100" size=1 noshade>
<FONT face="serif">(1) In the case of Eligible Preferred Stock which also constitutes Rule 144A Securities, the Discount Factor shall be increased by an additional 0.20.</FONT>
<P>
<FONT face="serif">(2) DRD shall be assigned a different Discount Factor. Investment grade DRDs shall be given a 1.65 Discount Factor and non-investment grade DRDs will receive a 2.16 Discount Factor. </FONT></P>
<blockquote>
  <blockquote>
    <p>
      <FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>(l) </FONT><U><FONT face="serif">Receivables</FONT></U><FONT face="serif">. The Discount Factor applied to Receivables shall be 1.00. </FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(m) </FONT><U><FONT face="serif">Rule144A Securities</FONT></U><FONT face="serif">. The Discount Factor applied to Rule 144A Securities whose terms include rights to registration under the Securities
      Act within one year and Rule 144A Securities which do not have such registration rights within one year shall be 120% and 130%, respectively, of the Discount Factor which would apply were the securities registered under the Securities
      Act.</FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(n) </FONT><U><FONT face="serif">Rule 2a-7 Money Market Funds</FONT></U><FONT face="serif">. The Discount Factor for Rule 2a-7 Money Market Funds shall be 1.10.</FONT></p>
  </blockquote>
</blockquote>
<P align="center">
<FONT face="serif">-11-</FONT></P>

<BR>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(o) </FONT><U><FONT face="serif">Structured Notes</FONT></U><FONT face="serif">. The Discount Factor applied to Structured Notes shall be (i) in the case of a corporate issuer, the Discount Factor
      used for Corporate Debt Securities, whereby the rating on the issuer of the Structured Note shall be the rating on the Structured Note for purposes of determining the Discount Factor in the table relating to Corporate Debt Securities; and (ii) in
      the case of an issuer that is the U.S. government or an agency or instrumentality thereof, the Discount Factor used for U.S. Government Obligations.</FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(p) </FONT><U><FONT face="serif">Rated TRACERS</FONT></U><FONT face="serif">. The Discount Factor applied to rated TRACERS shall be the Discount Factor used for Corporate Debt Securities, based on (i)
      Morgan Stanley&#146;s senior unsecured rating and (ii) the term to maturity.</FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(q) </FONT><U><FONT face="serif">TRAINS</FONT></U><FONT face="serif">. The Discount Factor applied to TRAINS shall be the Discount Factor used for Corporate Debt Securities, based on (i) Lehman
      Brothers&#146; senior unsecured rating and (ii) the term to maturity. </FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(r) </FONT><U><FONT face="serif">U.S. Government Obligations and U.S. Treasury Strips</FONT></U><FONT face="serif">. The Discount Factor applied to U.S. Government Obligations and U.S. Treasury Strips
      shall be determined by reference to the remaining term to maturity of such assets in accordance with the table set forth below.</FONT></p>
  </blockquote>
</blockquote>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=19% align=left>&nbsp;

        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=center>
<FONT face="serif">U.S. Government</FONT>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">U.S. Treasury</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>&nbsp;

        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=center>
<FONT face="serif">Obligations</FONT>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=19% align=center>
          <center>
          <FONT face="serif">Strips</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=34% align=left>
 <FONT face="serif">Remaining Term to Maturity</FONT>
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=center>
 <FONT face="serif">Discount Factor</FONT>
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">Discount Factor</FONT>
          </center></TD>
</TR>
<TR valign="bottom">
  <TD align=left><HR noshade size=1></TD>
  <TD>&nbsp;</TD>
  <TD align=right><HR noshade size=1></TD>
  <TD>&nbsp;</TD>
  <TD align=right><HR noshade size=1></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">1 year or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.07</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.07</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">2 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>&nbsp;<FONT face="serif">1 year)</FONT>&nbsp; </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.13</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.15</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">3 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>&nbsp;<FONT face="serif">2 years)</FONT> </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.18</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.21</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">4 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>
<FONT face="serif">3 years)</FONT> </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.23</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.28</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">5 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>
<FONT face="serif">4 years)</FONT>&nbsp;</TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.28</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.35</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">7 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>
<FONT face="serif">5 years)</FONT> </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.35</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.47</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">10 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>&nbsp;<FONT face="serif">7 years)</FONT> </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.41</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.63</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">15 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>&nbsp;<FONT face="serif">10 years)</FONT>&nbsp; </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.46</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">1.91</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">20 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>&nbsp;<FONT face="serif">15 years)</FONT> </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.54</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">2.18</FONT>&nbsp;
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">30 years or less</FONT>&nbsp;
        </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=left>

          <center>
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=19% align=left>
<FONT face="serif">(but longer than</FONT>
<FONT face="serif">20 years)</FONT>&nbsp; </TD>
        <TD width=15%>&nbsp;
  </TD>
        <TD width=21% align=right>
          <center>
          <FONT face="serif">1.54</FONT>&nbsp;
        </center></TD>
        <TD width=9%>
          <center>
    </center></TD>
        <TD width=19% align=right>
          <center>
          <FONT face="serif">2.44</FONT>&nbsp;
        </center></TD>
</TR>
</TABLE>
<BR>
<blockquote>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(s) </FONT><U><FONT face="serif">Assets Not Denominated in U.S. Dollars</FONT></U><FONT face="serif">. The Discount Factor applied to any Eligible Asset that is not denominated in U.S. dollars shall
      be the product of (i) the Discount Factor applicable to such asset pursuant to the definition of &#147;Discount Factors&#148; </FONT></p>
  </blockquote>
</blockquote>
<P align="center">
<FONT face="serif">-12-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <blockquote>
    <p>
      <FONT face="serif">set forth herein and (ii) the Discount Factor determined by reference to the currency in which such asset is denominated in accordance with the table set forth below (it being understood that if the currency in which such asset is
      denominated is not set forth in the table set forth below, the Fund shall contact Moody&#146;s to obtain the applicable Discount Factor): </FONT></p>
  </blockquote>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=41% align=left>
 <FONT face="serif">Currency</FONT>
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
 <FONT face="serif">Discount Factor</FONT>
        </TD>
</TR>
<TR valign="bottom">
  <TD align=left><HR noshade size=1></TD>
  <TD>&nbsp;</TD>
  <TD align=center><HR noshade size=1></TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Canadian dollar</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.07</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Euro</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.11</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Great Britain pound</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.15</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Japanese yen</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.16</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Australian dollar</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.13</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Hong Kong dollar</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.00</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">New Zealand dollar</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.14</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Norwegian krone</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.11</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Swedish krona</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.13</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Thai baht</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.19</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=41% align=left>
<FONT face="serif">Korean won</FONT>&nbsp;
        </TD>
        <TD width=24%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.21</FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Notwithstanding the foregoing, for so long as is required by Moody&#146;s to maintain its then-current credit ratings of the Fund Preferred Stock, the Discount Factor with respect to an Eligible Asset
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 Asset shall be the then-current discount factor provided by Moody&#146;s to
the Fund in writing for the purpose of such determination. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Discounted Value,&#148; with respect to any asset held by the Fund as of any date, means the quotient of the Market Value of such asset divided by the applicable Discount Factor; </FONT><I><FONT
face="serif">provided, however, </FONT></I><FONT face="serif">that, in the event the Fund 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; </FONT><I><FONT face="serif">provided, further, </FONT></I><FONT face="serif">that in no event shall the Discounted Value of any Eligible Asset as of any date exceed the
unpaid principal balance or face amount of such asset as of that date.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Dividends-Received Deduction&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;DRD&#148; means Eligible</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">Preferred Stock whose dividends are eligible for the Dividends Received Deduction. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible Assets&#148; shall, except as otherwise provided herein, include Asset-Backed and Mortgage-Backed Securities, Bank Loans, cash, Cash Equivalents, Corporate Debt Securities, Eligible
Common Stocks, Eligible Preferred Stocks, FHLMC Certificates, FHLMC Multifamily Securities, Financial Contracts, FNMA Certificates, GNMA Certificates, GNMA Graduated Payment Securities, GNMA Multifamily Securities, Municipal Debt Obligations,
Municipal Obligations, Receivables, Receivables for Municipal Obligations Sold, Rule 144A </FONT></P>
<P align="center">
<FONT face="serif">-13-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<P>
<FONT face="serif">Securities, Rule 2a-7 Money Market Funds, Senior Loans, Short Term Money Market Instruments, Structured Notes, rated TRACERs, TRAINs, U.S. Government Obligations, U.S. Treasury Strips and any other asset held by the Fund that has
been assigned a Discount Factor by Moody&#146;s and is included within the definition of Eligible Assets set forth herein or pursuant to an amendment or supplement hereto.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">In order to be included as &#147;Eligible Assets&#148; for purposes of determining maintenance of the &#147;Preferred Stock Basic Maintenance Amount&#148;, securities must be issued by entities which
(A) have not filed for bankruptcy within the past year, (B) are current on all principal and interest in their fixed income obligations, (C) are current on all preferred stock dividends and (D) possess a current, unqualified auditor&#146;s report
without qualified, explanatory language.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">In order to be included as &#147;Eligible Assets&#148; for purposes of determining maintenance of the &#147;Preferred Stock Basic Maintenance Amount,&#148; Corporate Debt Securities and Eligible
Preferred Stock held by the Fund must be within the following diversification and issue size requirements:</FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=12% align=left>

        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=center>
          <center>
            <FONT face="serif">Maximum</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=center>
          <center>
            <FONT face="serif">Maximum</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=center>
          <center>
          <FONT face="serif">Minimum Issue Size</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=center>
<FONT face="serif">Ratings </FONT><SUP><FONT face="serif">1</FONT></SUP>
        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=center>
          <center>
            <FONT face="serif">Permitted Amount</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">Permitted</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif">(&#36; in million) </FONT><SUP><FONT face="serif">5</FONT></SUP>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=left>

        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=center>
          <center>
            <FONT face="serif">from any </FONT><FONT face="serif">Single</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=center>
          <center>
            <FONT face="serif">Amount from any</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=left>

        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=center>
          <center>
            <FONT face="serif">Issuer </FONT><SUP><FONT face="serif">2,3</FONT></SUP>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=center>
          <center>
            <FONT face="serif">Single Industry </FONT><SUP><FONT face="serif">3,4</FONT></SUP>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=left>

          <center>
        </center></TD>
</TR>
<TR valign="bottom">
  <TD align=left><HR noshade size=1></TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=right><HR noshade size=1></TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=right><HR noshade size=1></TD>
  <TD align=left>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=right>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD align=right><HR noshade size=1></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=left>
<FONT face="serif">Aaa</FONT>
        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=right>
          <center>
            <FONT face="serif">100%</FONT>
          </center></TD>
        <TD width=3% align=left>
          <center>
          <FONT face="serif"> </FONT>&nbsp;
          </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">100</FONT><FONT face="serif">%</FONT>
      </center></TD>
        <TD width=3% align=left>
          <center>
          &nbsp;
          </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=right>
          <center>
          </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif">&#36;100</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=left>
<FONT face="serif">Aa</FONT>
        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=right>
          <center>
            <FONT face="serif">20</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">60</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif">&nbsp; <SUP><FONT face="serif"></FONT></SUP> 100</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=left>
<FONT face="serif">A</FONT>
        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=right>
          <center>
            <FONT face="serif">10</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">50</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif">&nbsp; <SUP><FONT face="serif"></FONT></SUP> 100</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=left>
<FONT face="serif">Baa</FONT>
        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=right>
          <center>
            <FONT face="serif">6</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">50</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif">&nbsp; <SUP><FONT face="serif"></FONT></SUP> 100</FONT>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=left>
<FONT face="serif">Ba</FONT>
        </TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=right>
          <center>
            <FONT face="serif">4</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">12</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif"><SUP><FONT face="serif"></FONT></SUP>&nbsp; <SUP><FONT face="serif"></FONT></SUP> &nbsp; <SUP><FONT face="serif"></FONT></SUP>&nbsp; <SUP><FONT face="serif"></FONT></SUP> 50 </FONT><SUP><FONT face="serif">6</FONT></SUP>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=right>
          <div align="left"><FONT face="serif">B1</FONT><FONT face="serif">-B2</FONT>          </div></TD>
        <TD width=3% align=left>&nbsp;
        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=right>
          <center>
            <FONT face="serif">3</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">8</FONT>
          </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=3%>
          <center>
    </center></TD>
        <TD width=3% align=left>

          <center>
        </center></TD>
        <TD width=2%>
          <center>
    </center></TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif"><SUP><FONT face="serif"></FONT></SUP>&nbsp; <SUP><FONT face="serif"></FONT></SUP> &nbsp; <SUP><FONT face="serif"></FONT></SUP>&nbsp; 50 </FONT><SUP><FONT face="serif">6</FONT></SUP>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=12% align=center>
          <div align="left"><FONT face="serif">B3 or below</FONT>
          </div></TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=10%>&nbsp;
  </TD>
        <TD width=18% align=right>
          <center>
            <FONT face="serif">2</FONT>
          </center></TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=17% align=right>
          <center>
            <FONT face="serif">5</FONT>
          </center></TD>
        <TD width=3% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=3% align=left>

        </TD>
        <TD width=2%>&nbsp;
  </TD>
        <TD width=20% align=right>
          <center>
          <FONT face="serif"><SUP><FONT face="serif"></FONT></SUP>&nbsp; <SUP><FONT face="serif"></FONT></SUP> &nbsp; <SUP><FONT face="serif"></FONT></SUP>&nbsp; 50 </FONT><SUP><FONT face="serif">6</FONT></SUP>&nbsp;
          </center></TD>
</TR>
</TABLE>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
        <TD nowrap valign=top>
<SUP><FONT face="serif">1</FONT></SUP>&nbsp; &nbsp; &nbsp;      </TD>
        <TD>
<FONT face="serif">Refers to the Eligible Preferred Stock rating and senior debt rating of the portfolio holding.</FONT>        </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<SUP><FONT face="serif">2</FONT></SUP>&nbsp; &nbsp; &nbsp;      </TD>
        <TD>
<FONT face="serif">Companies subject to common ownership of 25% or more are considered as one issuer.</FONT>    </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<SUP><FONT face="serif">3</FONT></SUP>&nbsp; &nbsp; &nbsp;      </TD>
        <TD>
<FONT face="serif">Percentages represent a portion of the aggregate Market Value of Corporate Debt Securities and Eligible Preferred Stock.</FONT>      </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<SUP><FONT face="serif">4</FONT></SUP>&nbsp; &nbsp; &nbsp;      </TD>
        <TD>
<FONT face="serif">Industries are determined according to Industry Classifications, as defined herein.</FONT>   </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<SUP><FONT face="serif">5</FONT></SUP>&nbsp; &nbsp; &nbsp;      </TD>
        <TD>
<FONT face="serif">Except for Eligible Preferred Stock, which has a minimum issue size of &#36;50 million.</FONT>       </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<SUP><FONT face="serif">6</FONT></SUP>&nbsp; &nbsp; &nbsp;      </TD>
        <TD>
<FONT face="serif">Portfolio holdings from issues ranging from &#36;50 million to &#36;100 million shall be limited to 20% of the aggregate Market Value of all Eligible Assets.</FONT> </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">Common Stocks&#148; means common stocks (i) which (A) are traded on a National Securities Exchange or in the over-the-counter
market, (B) if cash dividend paying, pay cash dividends in U.S. dollars and (C) may be sold without restriction by the Fund; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT
face="serif">, that (1) common stock which, while Eligible Assets owned by the Fund, ceases paying any regular cash dividend will no longer be considered Eligible Assets until 71 days after the </FONT></P>
<P align="center">
<FONT face="serif">-14-</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>


<P>
<FONT face="serif">date of the announcement of such cessation, unless the issuer of the common stock has senior debt securities rated at least A3 by Moody&#146;s and (2) the aggregate Market Value of the Fund&#146;s holdings of the common stock of
any issuer in excess of 4% in the case of utility common stock and 6% in the case of non-utility common stock of the aggregate Market Value of the Fund&#146;s holdings shall not be Eligible Assets, (ii) which are securities denominated in any
currency other than the U.S. dollar or securities of issuers formed under the laws of jurisdictions other than the United States, its states and the District of Columbia for which there are dollar-denominated ADRs or their equivalents which are
traded in the United States on a National Securities Exchange or in the over-the-counter market and are issued by banks formed under the laws of the United States, its states or the District of Columbia or (iii) which are securities of issuers
formed under the laws of jurisdictions other than the United States (and in existence for at least five years) for which no ADRs are traded; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT
face="serif">however</FONT></I><FONT face="serif">, that the aggregate Market Value of the Fund&#146;s holdings of securities denominated in currencies other than the U.S. dollar and ADRs in excess of (A) 6% of the aggregate Market Value of the
outstanding shares of common stock of such issuer thereof or (B) 10% of the aggregate Market Value of all of the Fund&#146;s Eligible Assets with respect to issuers formed under the laws of any single such non-U.S. jurisdiction other than Australia,
Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden, Switzerland and the United Kingdom, shall not be Eligible Assets. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">Preferred Stock&#148; means any preferred stock if (i) dividends on such preferred stock are cumulative, (ii) such securities
provide for the periodic payment of dividends thereon in cash in U.S. dollars or euros and do not provide for conversion or exchange into, or have warrants attached entitling the holder to receive, equity capital at any time over the respective
lives of such securities, (iii) the issuer of such preferred stock has common stock listed on either NYSE or AMEX, and (iv) such preferred stock has paid consistent cash dividends in U.S. dollars or euros over the last three years or has a minimum
rating of A1 (if the issuer of such preferred stock has other preferred issues outstanding that have been paying dividends consistently for the last three years, then an issue of preferred stock without such a dividend history would also be
eligible). In addition, such preferred stock must have the following diversification requirements: (i) the preferred stock issue must be greater than &#36;50 million and (ii) the minimum holding by the Fund of each issue of preferred stock is
&#36;500,000 and the maximum holding of preferred stock of each issue is 10% of the aggregate Market Value of all Eligible Assets. In addition, preferred stock issued by transportation companies shall not be considered Eligible Assets. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Exposure Period&#148; means the period commencing on a given Valuation Date and ending 49 days thereafter. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;FFCBs&#148; means Federal Farm Credit Banks.</FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;FHLBs&#148; means Federal Home Loan Banks. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHLMC&#148; means the Federal Home Loan Mortgage Fund created by Title III of the Emergency Home Finance Act of 1970, and includes any successor thereto. </FONT></P>
<P align="center">
<FONT face="serif">-15-</FONT></P>

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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHLMC Certificate&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHLMC Multifamily Security&#148; means a &#147;Plan B Multifamily Security&#148; 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 Assets will not, in and of itself, impair or cause the Fund Preferred Stock to fail to retain the ratings assigned to the Fund Preferred Stock by Moody&#146;s, as evidenced
by a letter to such effect delivered to the Fund by Moody&#146;s. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Financial Contracts&#148; means financial contracts, as such term is defined in Section 3(c)(2)(B)(ii) of the Investment Company Act, not otherwise provided for in the definition of
&#147;Eligible Assets&#148; for purposes of determining maintenance of the &#147;Preferred Stock Basic Maintenance Amount,&#148; but only upon receipt by the Fund of a letter from Moody&#146;s specifying any conditions on including such financial
contract in Eligible Assets and assuring the Fund that including such financial contract in the manner so specified would not affect the credit ratings assigned by Moody&#146;s to the Fund Preferred Stock. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FNMA&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FNMA Certificate&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Forward Commitments&#148; has the meaning set forth in subparagraph (e)(v) of Section 2 hereof.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;GNMA&#148; means the Government National Mortgage Association, and includes any successor thereto. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;GNMA Certificate&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;GNMA Graduated Payment Security&#148; means a fully modified pass-through certificate in physical or book-entry form, the full and timely payment of principal of and interest </FONT></P>
<P align="center">
<FONT face="serif">-16-</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>


<P>
<FONT face="serif">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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Hedging Transactions&#148; has the meaning set forth in paragraph (e) of Section 2 hereof. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Industry Classification&#148; means, for purposes of determining which securities shall be included as &#147;Eligible Assets&#148; for purposes of determining maintenance of the &#147;Preferred
Stock Basic Maintenance Amount&#148;, each of the following industry classifications (or such other classifications as Moody&#146;s may from time to time approve for application to the Fund Preferred Stock): </FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">1.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Aerospace and Defense: Major Contractor, Subsystems, Research, Aircraft Manufacturing, Arms, and Ammunition</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">2.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Automobile: Automobile Equipment, Auto-Manufacturing, Auto Parts Manufacturing, Personal Use Trailers, Motor Homes, Dealers</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">3.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Banking: Bank Holding, Savings and Loans, Consumer Credit, Small Loan, Agency, Factoring, Receivables</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">4.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Beverage, Food and Tobacco: Beer and Ale, Distillers, Wines and Liquors, Distributors, Soft Drink Syrup, Bottlers, Bakery, Mill Sugar, Canned Foods, Corn Refiners, Dairy Products, Meat Products, Poultry Products, Snacks, Packaged
Foods, Candy, Gum, Seafood, Frozen Food, Cigarettes, Cigars, Leaf/Snuff, Vegetable Oil</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">5.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Buildings and Real Estate: Brick, Cement, Climate Controls, Contracting, Engineering, Construction, Hardware, Forest Products (building-related only), Plumbing, Roofing, Wallboard, Real Estate, Real Estate Development, REITs, Land
Development</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">6.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Chemicals, Plastics and Rubber: Chemicals (non-agricultural), Industrial Gases, Sulfur, Plastics, Plastic Products, Abrasives, Coatings, Paints, Varnish, Fabricating</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">7.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Containers, Packaging and Glass: Glass, Fiberglass, Containers made of: Glass, Metal, Paper, Plastic, Wood or Fiberglass</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">8.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Personal and Non-Durable Consumer Products (Manufacturing Only): Soaps, Perfumes, Cosmetics, Toiletries, Cleaning Supplies, School Supplies</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">9.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Diversified/Conglomerate Manufacturing</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">-17-</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>


<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">10.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Diversified/Conglomerate Service</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">11.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Diversified Natural Resources, Precious Metals and Minerals: Fabricating, Distribution</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">12.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Ecological: Pollution Control, Waste Removal, Waste Treatment and Waste Disposal</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">13.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Electronics: Computer Hardware, Electric Equipment, Components, Controllers, Motors, Household Appliances, Information Service Communicating Systems, Radios, TVs, Tape Machines, Speakers, Printers, Drivers, Technology</FONT>     </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">14.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Finance: Investment Brokerage, Leasing, Syndication, Securities</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">15.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Farming and Agriculture: Livestock, Grains, Produce, Agriculture Chemicals, Agricultural Equipment, Fertilizers</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">16.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Grocery: Grocery Stores, Convenience Food Stores</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">17.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Healthcare, Education and Childcare: Ethical Drugs, Proprietary Drugs, Research, Health Care Centers, Nursing Homes, HMOs, Hospitals, Hospital Supplies, Medical Equipment</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">18.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Home and Office Furnishings, House wares, and Durable Consumer Products: Carpets, Floor Coverings, Furniture, Cooking, Ranges</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">19.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Hotels, Motels, Inns and Gaming</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">20.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Insurance: Life, Property and Casualty, Broker, Agent, Surety</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">21.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Leisure, Amusement, Motion Pictures, Entertainment: Boating, Bowling, Billiards, Musical Instruments, Fishing, Photo Equipment, Records, Tapes, Sports, Outdoor Equipment (Camping), Tourism, Resorts, Games, Toy Manufacturing,
Motion Picture Production Theaters, Motion Picture Distribution</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">22.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Machinery (Non-Agricultural, Non-Construction, Non-Electronic): Industrial, Machine Tools, and Steam Generators</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">23.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Mining, Steel, Iron and Non-Precious Metals: Coal, Copper, Lead, Uranium, Zinc, Aluminum, Stainless Steel, Integrated Steel, Ore Production, Refractories, Steel Mill Machinery, Mini-Mills, Fabricating, Distribution and Sales of
the foregoing</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">24.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Oil and Gas: Crude Producer, Retailer, Well Supply, Service and Drilling</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">-18-</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">25.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Printing, Publishing, and Broadcasting: Graphic Arts, Paper, Paper Products, Business Forms, Magazines, Books, Periodicals, Newspapers, Textbooks, Radio, T.V., Cable Broadcasting Equipment</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">26.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Cargo Transport: Rail, Shipping, Railroads, Rail-car Builders, Ship Builders, Containers, Container Builders, Parts, Overnight Mail, Trucking, Truck Manufacturing, Trailer Manufacturing, Air Cargo, Transport</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">27.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Retail Stores: Apparel, Toy, Variety, Drugs, Department, Mail Order Catalog, Showroom</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">28.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Telecommunications: Local, Long Distance, Independent, Telephone, Telegraph, Satellite, Equipment, Research, Cellular</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">29.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Textiles and Leather: Producer, Synthetic Fiber, Apparel Manufacturer, Leather Shoes</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">30.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Personal Transportation: Air, Bus, Rail, Car Rental</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">31.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Utilities: Electric, Water, Hydro Power, Gas</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">32.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Diversified Sovereigns: Semi-sovereigns, Canadian Provinces, Supra-national Agencies</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">The Fund shall use its discretion in determining which industry classification is applicable to a particular investment in consultation with the Independent Accountant and Moody&#146;s, to the extent
the Fund considers necessary. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Market Value&#148; means, initially, the market value of any asset of the Fund determined by any pricing service designated by the Fund and approved by Moody&#146;s (the &#147;Pricing
Service&#148;). The &#147;Market Value&#148; of any asset shall include any interest accrued thereon. The Pricing Service shall value an asset at the lower of the quoted bid price and the mean between the quoted bid and ask price or the yield
equivalent when quotations are readily available. Securities and other property for which quotations are not readily available shall be valued at fair value as determined by the Pricing Service, using methods which include consideration of: yields
or prices of securities of comparable quality, type of issue, coupon, maturity and rating; indications as to value from dealers; and general market conditions. The Pricing Service may employ electronic data processing techniques and/or a matrix
system to determine valuations. If the Pricing Service fails to provide the Market Value of any securities, such securities shall be valued at the lower of two bid quotations (at least one of which shall be in writing) obtained by the Fund from two
dealers who are members of the NASD and are making a market in such securities. If two bid quotations are not readily available for any securities, such securities shall be valued at fair value on a consistent basis using methods determined in good
faith by the Board of Directors. Futures contracts and options shall be valued at closing prices for such instruments established by the exchange or board of trade on which they are traded or, if market quotations are not readily available, shall be
valued at fair value as determined by the Pricing Service or, if the Pricing Service is not able to value such instruments, shall be valued at fair value on a consistent basis using methods determined in good </FONT></P>
<P align="center">
<FONT face="serif">-19-</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>


<P>
<FONT face="serif">faith by the Board of Directors. All other assets shall be valued at fair value on a consistent basis using methods determined in good faith by the Board of Directors. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Municipal Debt Obligation&#148; means any municipal debt obligation with a term to maturity of greater than one year that (i) pays interest in cash, (ii) does not have a Moody&#146;s rating, as
applicable, suspended by Moody&#146;s, and (iii) is part of an issue of municipal debt obligations of at least &#36;5,000,000, except for municipal debt obligations rated below A by Moody&#146;s, in which case the minimum issue size is
&#36;10,000,000. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Municipal Obligation&#148; means an obligation, including municipal bonds and short-term municipal obligations, with a term to maturity of one year or less, the interest from which is exempt
from federal income taxes and that (i) pays interest in cash, (ii) does not have its Moody&#146;s rating suspended by Moody&#146;s, and (iii) is part of an issue of obligations of at least &#36;10,000,000 (except for issues rated Aaa by
Moody&#146;s, as provided in the chart below).</FONT></P>
<P>
<FONT face="serif">Municipal Obligations in the Fund&#146;s portfolio must be within the following diversification and issue size requirements in order to be included within Eligible Assets: </FONT></P>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Maximum</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=left>&nbsp;

        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Permitted</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Maximum</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Amount of</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Permitted</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Municipal</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Amount of</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Obligations</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Municipal</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=left>&nbsp;

        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">from any Single</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Obligations</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">Minimum</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Underlying</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">from any Single</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>&nbsp;

        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">Issue Size</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">Obligor (1)</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">State(1)(3)</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">Rating</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">(&#36; Millions)</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">(%)</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">(%)</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
  <TD align=left><HR noshade size=1></TD>
  <TD>&nbsp;</TD>
  <TD align=center><HR noshade size=1></TD>
  <TD>&nbsp;</TD>
  <TD align=center><HR noshade size=1></TD>
  <TD>&nbsp;</TD>
  <TD align=center><HR noshade size=1></TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">Aaa</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">N/A</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">100</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">100</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">Aa</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">10</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">20</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">60</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">A</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">10</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">10</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">40</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">Baa</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">10</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">6</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">20</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">Ba</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">10</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">4</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">12</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">B</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">10</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">3</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">12</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=9% align=left>
<FONT face="serif">Other (2)</FONT>&nbsp;
        </TD>
        <TD width=31%>&nbsp;
  </TD>
        <TD width=12% align=center>
<FONT face="serif">10</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">2</FONT>&nbsp;
        </TD>
        <TD width=3%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">12</FONT>&nbsp;
        </TD>
</TR>
</TABLE>
<BR>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
        <TD nowrap valign=top>
<FONT face="serif">(1)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">The referenced percentages represent maximum cumulative percentages of the aggregate Market Value of all Eligible Assets for the related rating category and each lower rating category.</FONT>      </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">(2)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Municipal Obligations rated Caa or below by Moody&#146;s, or if not rated by Moody&#146;s rated the equivalent by S&amp;P or Fitch and unrated securities.</FONT>    </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR><TR>
        <TD nowrap valign=top>
<FONT face="serif">(3)</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Territorial bonds (other than those issued by Puerto Rico and counted collectively) are each limited to 10% of the aggregate Market Value of all Eligible Assets. For diversification purposes, Puerto Rico shall be treated as a
state.</FONT>   </TD>
</TR>
<TR><TD colspan=2>&nbsp;</TD></TR></TABLE>
<P align="center">
<FONT face="serif">-20-</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>


<P>
<FONT face="serif">N/A Not applicable. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;NAREIT&#148; means National Association of Real Estate Investment Trusts. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;NASD&#148; means National Association of Securities Dealers, Inc. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;National Securities Exchange&#148; means the NYSE, AMEX, Midwest Stock Exchange, Philadelphia Stock Exchange, Boston Stock Exchange, NASDAQ System or any other national securities exchange.
</FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;NRSRO&#148; means a national recognized statistical ratings organization. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;NYSE&#148; means New York Stock Exchange, Inc. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;PACs&#148; means planned amortization class bonds. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Preferred Stock Basic Maintenance Amount&#148; means, as of any date, the sum of (i) the aggregate liquidation preference of the shares of Fund Preferred Stock outstanding, (ii) to the extent
not covered in (i), the aggregate amount of accumulated but unpaid cash dividends with respect to the shares of Fund Preferred Stock</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">outstanding, (iii) the aggregate principal amount of any
other then outstanding indebtedness of the Fund for money borrowed, (iv) an amount equal to the sum of (x) the aggregate accrued but unpaid interest on the indebtedness referred to in the foregoing clause (iii) 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, (v) the aggregate Projected Dividend Amount, (vi) redemption premium, if any, and (vii) the greater of &#36;200,000 or an amount equal
to projected expenses of the Fund (including, without limitation, fee and indemnification obligations of the Fund incurred in connection with any commercial paper program undertaken by the Fund or with any credit facility related thereto) for the
next three month period.</FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;Pricing Service&#148; has the meaning set forth in the definition of &#147;Market Value&#148;. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Projected Dividend Amount&#148; for the Fund Preferred Stock as of any date shall have the following meaning: </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(a) If the date of determination is a Valuation Date, then the Projected Dividend Amount on such date of determination shall equal the amount of cash dividends, based on the number of shares of Fund
Preferred Stock</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">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: </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) If the Valuation Date is the Date of Original Issue or a Dividend Payment Date, (A) 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 in effect on such Valuation Date, and (B) 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 on the Date of Original Issue (in the </FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">-21-</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <p>
    <FONT face="serif">case of the Date of Original Issue) or (y) the Maximum Dividend Rate as of the last occurring Settlement Date (in the case of any Dividend Payment Date); and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) If such Valuation Date is not the Date of Original Issue or a Dividend Payment Date, (A) 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 (B) 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 (in the case of any other Valuation Date) and (C) 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. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(b) 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 Fund Preferred Stock outstanding.</FONT><B><FONT face="serif"> </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Real Estate Industry/Property Sector Classification&#148; means, for purposes of determining which securities shall be included as &#147;Eligible Assets&#148; for purposes of determining
maintenance of the &#147;Preferred Stock Basic Maintenance Amount&#148;, each of the following industry classifications (as defined by NAREIT): </FONT></P>
<TABLE border=0 cellspacing=0 cellpadding=0>
<TR>
  <TD nowrap valign=top>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD>
        <TD nowrap valign=top>
<FONT face="serif">1.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Office</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">2.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Industrial</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">3.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Mixed</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">4.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Shopping Centers</FONT>      </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">5.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Regional Malls</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">6.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Free Standing</FONT> </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">7.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Apartments</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">8.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Manufactured Homes</FONT>    </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">9.</FONT>&nbsp; &nbsp; &nbsp;        </TD>
        <TD>
<FONT face="serif">Diversified</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">10.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Lodging/Resorts</FONT>       </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">11.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Health Care</FONT>   </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">12.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Home Financing</FONT>        </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">13.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Commercial Financing</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR><TR>
  <TD nowrap valign=top>&nbsp;</TD>
        <TD nowrap valign=top>
<FONT face="serif">14.</FONT>&nbsp; &nbsp; &nbsp;       </TD>
        <TD>
<FONT face="serif">Self Storage</FONT>  </TD>
</TR>
<TR><TD colspan=3>&nbsp;</TD></TR></TABLE>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">The Fund shall use its discretion in determining which NAREIT industry classification is applicable to a particular investment in consultation with the Independent Accountant and/or Moody&#146;s, as
necessary. </FONT></P>
<P align="center">
<FONT face="serif">-22-</FONT></P>

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<P align="left" style="page-break-before:always"></P><PAGE>


<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Receivable&#148; means a receivable for Eligible Assets sold if the receivable is due within five Business Days of the Valuation Date and if the trades which generated such receivable are (i)
settled through clearing house firms or (ii) (A) with counterparties having a Moody&#146;s long-term debt rating of at least Baa3 or (B) with counterparties having a Short Term Money Market Instrument rating of at least P-1. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Receivables for Municipal Obligations Sold&#148; shall mean no more than the aggregate of the following: (i) the book value of receivables for Municipal Obligations sold as of or prior to such
Valuation Date if such receivables are due within five Business Days of such Valuation Date, and if the trades which generated such receivables are (A) settled through clearinghouse firms with respect to which the Fund has received prior written
authorization from Moody&#146;s or (B) with counterparties having a Moody&#146;s long-term debt rating of at least Baa3, and (ii) the Discounted Value of Municipal Obligations sold as of or prior to such Valuation Date which generated receivables,
if such receivables are due within the Exposure Period but do not comply with either of the conditions specified in (i)(A) or (i)(B) above. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;REIT&#148; means an entity qualifying as a real estate investment trust under the Code. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Rule 2a-7 Money Market Funds&#148; means investment companies registered under the Investment Company Act that comply with Rule 2a-7 thereunder. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Rule 144A Securities&#148;</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">means securities which are restricted as to resale under federal securities laws but are eligible for resale
pursuant to Rule 144A under the Securities Act, as determined by the Fund&#146;s investment manager or portfolio manager acting pursuant to procedures approved by the Board of Directors. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Senior Implied Rating&#148; means an NRSRO&#146;s opinion of a corporate family&#146;s ability to honor its financial obligations and is assigned by the NRSRO to a corporate family as if it had
(i) a single class of debt or (ii) a single consolidated legal entity structure. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Senior Loans&#148; means senior Bank Loans.  </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Short Term Money Market Instruments&#148; means short term money market instruments if (i) such securities are rated at least P-1, (ii) in the case of demand deposits, time deposits and
overnight funds, the supporting entity is rated at least A2, or (iii) in all other cases, the supporting entity (A) is rated A2 and the security matures within one month, (B) is rated A1 and the security matures within three months or (C) is rated
at least Aa3 and the security matures within six months; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that for purposes of this definition, such instruments
(other than commercial paper rated by S&amp;P and not rated by Moody&#146;s) need not meet any otherwise applicable S&amp;P rating criteria.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Structured Notes&#148; means privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a benchmark asset or market, such as
selected securities or an index of securities, or the differential performance of two assets or markets, such as indices reflecting bonds. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;TACs&#148; means targeted amortization class bonds. </FONT></P>
<P align="center">
<FONT face="serif">-23-</FONT></P>

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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;TRACERS&#148; means traded custody receipts representing direct ownership in a portfolio of underlying securities. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;TRAINS&#148; means Targeted Return Index Securities, which are trust certificates comprised of bonds that are chosen to track a particular index. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Government Obligations&#148; 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 U. S. Treasury Bills, provide for the periodic payment of interest and the full payment of principal at maturity or call for redemption. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Treasury Bills&#148; means securities that (i) are direct obligations of, or fully guaranteed by, the full faith and credit of the United States, (ii) mature in one year or less and (iii)
are issued at a discount from face value and mature at face value. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">U.S. Treasury Securities&#148; means direct obligations of the United States Treasury that are entitled to the full faith and credit of the United States.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Treasury Strips&#148; means securities based on U.S. Treasury Securities created through the Separate Trading of Registered Interest and Principal of Securities program. </FONT></P>
<P>
<B><FONT face="serif">2. Certain Requirements and Restrictions. </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">For so long as any shares of Fund Preferred Stock are outstanding and Moody&#146;s is then rating such shares of Fund Preferred Stock, the Fund will perform all actions required by this Section 2 and
will not engage in any transactions proscribed by restrictions set forth in this Section 2, unless the Fund has received written confirmation from Moody&#146;s that such noncompliance would not adversely affect the ratings then assigned by
Moody&#146;s to such shares of Fund Preferred Stock. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(a) The Fund shall not issue senior securities representing indebtedness as defined under the Investment Company Act. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The Fund shall not merge or consolidate into or with any other fund. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(c) The Fund shall not engage in interest rate swaps, caps and floors, and in the event that the Fund obtains Moody&#146;s prior written consent to engage in such interest rate swaps, caps and floors,
the following conditions shall be satisfied:</FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) the unsecured senior debt or claims paying ability of the counterparty to the swap, cap or floor shall be rated A3 or better by Moody&#146;s or A&#150; or better by S&amp;P or Fitch;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) the swap, collar or floor shall be marked-to-market daily by the counterparty;</FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">-24-</FONT></P>

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<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) a swap, collar or floor that is &#147;in the money&#148; shall be valued at 95% of the accrued net excess of the Fund&#146;s entitlements over its obligations for purposes of calculating the
    Investment Company Act Preferred Stock Asset Coverage;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) 100% of any accrued net excess of the Fund&#146;s obligations over its entitlements with respect to a swap, cap or floor that has not been defeased through the segregation of liquid assets on the
    Fund&#146;s books and records shall be included as a liability of the Fund for the purposes of calculating the Preferred Stock Basic Maintenance Amount;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(v) the swap, cap or floor notional amount shall not exceed the liquidation preference of the shares of APS outstanding; and</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vi) the Fund intends to terminate the swap, cap or floor if the Fund fails to maintain the Investment Company Act Preferred Stock Asset Coverage on the last Business Day of any two consecutive
    months. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(d) The Fund shall not purchase or sell futures contracts or related options or engage in reverse repurchase agreement transactions. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(e) The Fund shall not purchase or sell any exchange-traded futures, option or option on a futures contract based on an index, and in the event that the Fund obtains Moody&#146;s prior written consent
to purchase or sell any such exchange-traded futures, option or option on a futures contract based on an index (collectively, &#147;Hedging Transactions&#148;), the following conditions shall be satisfied (provided, however, that transactions that
are terminating contracts already held by the Fund at the time of such transactions are exempt from such conditions): </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) for financial futures contracts based on an index, the total number of contracts held at any one time shall not exceed, without the prior written consent of Moody&#146;s, 10% of the average open
    interest for the 30 days preceding the purchase of such transaction as reported by </FONT><I><FONT face="serif">The Wall Street Journal </FONT></I><FONT face="serif">or other respectable news source approved by Moody&#146;s;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) the Market Value of financial futures contracts based on an index approved by Moody&#146;s shall be limited to 80% of the aggregate Market Value of all Eligible Assets or 50% of the Fund&#146;s
    aggregate holdings, whichever is greater; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) financial futures contracts based on an index shall be limited to clearinghouses that are rated no lower than A by Moody&#146;s (or, if not rated by Moody&#146;s but rated by S&amp;P or Fitch,
    rated A by S&amp;P or Fitch); </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) the Fund shall not, without the prior written consent of Moody&#146;s, (A) engage in options or futures transactions for leveraging or speculative purposes or (B) write any call option or sell
    any financial futures contracts for the purpose of hedging an anticipated purchase of an asset; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(v) the Fund shall not, without the prior written consent of Moody&#146;s, enter into any contract to purchase securities for a fixed price at a future date beyond </FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">-25-</FONT></P>

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<blockquote>
  <p>
    <FONT face="serif">customary settlement time (other than such contracts that constitute Hedging </FONT><FONT face="serif">Transactions that are otherwise permitted under this paragraph (e), except that the Fund may enter into such contracts to purchase newly issued securities on the date such securities are issued (&#147;Forward Commitments&#148;),
    subject to the following limitations: </FONT></p>
  <blockquote>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(A) the Fund shall maintain in a segregated account with its custodian cash, cash equivalents or short-term, fixed-income securities rated P-1, MTG-1, MIG-1, or Baa or higher by Moody&#146;s or, if
      not rated by Moody&#146;s, rated F-1 by Fitch, and maturing prior to the date of the Forward Commitment with a Market Value that equals or exceeds the amount of the Fund&#146;s obligations under any Forward Commitment to which it is from time to
      time a party or long-term fixed income securities with a Discounted Value that equals or exceeds the amount of the Fund&#146;s obligations under any Forward Commitment to which it is from time to time a party; and </FONT></p>
    <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(B) the Fund shall not enter into a Forward Commitment unless, after giving effect thereto, the Fund would continue to have Eligible Assets with an aggregate Discounted Value equal to or greater than
      the Preferred Stock Basic Maintenance Amount.</FONT></p>
  </blockquote>
</blockquote>
<P align="center">
<FONT face="serif">-26-</FONT></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2K(12)
<SEQUENCE>9
<FILENAME>c40133_ex-k12.htm
<TEXT>

<HTML>
<HEAD>
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<P align="right">
<B><FONT face="serif">Exhibit k.12 </FONT></B></P>
<P align="center">
<B><FONT face="serif">FORM OF STANDARD &amp; POOR&#146;S PREFERRED STOCK GUIDELINES </FONT></B></P>
<P align="center">
<B><FONT face="serif">As proposed to be adopted by the Board of Directors<br>
of DNP Select Income Fund Inc. </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Set forth below for DNP Select Income Fund Inc. (the &#147;Fund&#148;) are the S&amp;P Guidelines, as defined in one or more articles supplementary (&#147;Articles Supplementary&#148;) establishing
and fixing the preferences, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption, of one of more series of preferred stock, par value &#36;.001 per share, of the Fund (&#147;Fund Preferred
Stock&#148;). Capitalized terms used but not defined herein shall have the respective meanings assigned to such terms in the relevant Articles Supplementary.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Any of the provisions of this document may from time to time be amended, altered or repealed by the Board of Directors in its sole discretion, without any vote or consent of shareholders of the Fund,
based on a determination by the Board of Directors that such action is necessary or appropriate in connection with obtaining or maintaining the rating assigned by S&amp;P to the Fund Preferred Stock or revising the Fund&#146;s investment
restrictions or policies consistent with guidelines adopted by S&amp;P, and any such amendment, alteration or repeal will not be deemed to affect the preferences, rights or powers of the Fund Preferred Stock or the Holders thereof, provided that the
Board of Directors receives written confirmation from S&amp;P that any such amendment, alteration or repeal would not adversely affect the rating then assigned by S&amp;P to the Fund Preferred Stock. </FONT></P>
<P>
<B><FONT face="serif">1. Certain Definitions. </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">As used in this document, the following terms shall have the following meanings (with terms defined in the singular having comparable meanings when used in the plural and vice versa), unless the
context otherwise requires: </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;ADR&#148; means American Depository Receipts. &#147;AMEX&#148; means American Stock Exchange LLC. &#147;ARMs&#148;</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">means adjustable-rate mortgages. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;Bankers Acceptances&#148; means time drafts drawn on and accepted by a bank.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Certificates of Deposit&#148; means debt instruments issued by a bank that generally pay interest.</FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif"></FONT>&#147;CMOs&#148; means collateralized mortgage obligations. </FONT></P>
<P> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Collateralized Mortgage Obligations&#148; means publicly registered CMO issuances which satisfy the following conditions:</FONT></P>
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<P align="left" style="page-break-before:always"></P><PAGE>
<blockquote>
  <p>
    <FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) such CMO issuances maintain &#145;AAA&#146; ratings by S&amp;P;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) such CMO issuances are current interest-bearing, fixed- or floating-rate, and are backed by pools of GNMA Certificates, FNMA Certificates, FHLMC Certificates or whole loans; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) no more than 25% of the aggregate Market Value of the collateral backing any single CMO issuance can be from one private sector CMO issuer.</FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Commercial Paper&#148; means high-grade unsecured notes sold by major corporations and finance companies either directly by such corporations and finance companies or indirectly through
dealers.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Demand Deposits&#148; means account balances that, without prior notice to the bank, can be drawn on by check, cash, or by transfer to other accounts. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><FONT face="serif">&#147;</FONT></B><FONT face="serif">Discount Factors &#148; means the following Discount Factors which are to be used for purposes of calculating the &#147;Discounted Value&#148; of the assets of
the Fund for purposes of determining maintenance of the &#147;Preferred Stock Basic Maintenance Amount&#148; (it being understood that any asset held by the Fund for which no Discount Factor is specified in these Guidelines shall have a Discounted
Value of zero). To the extent the Market Value of the securities of any single issuer owned by the Fund exceeds 5% of the aggregate Market Value of all Eligible Assets, the Discount Factor applied to such securities shall be increased by 0.02 for
each percentage of such concentration above 5% of the aggregate Market Value of all Eligible Assets.</FONT></P>
<blockquote>
  <p>
  <FONT face="serif">(a) </FONT><U><FONT face="serif">Eligible Common Stock</FONT></U><FONT face="serif">. </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraph (iii) below, the Discount Factor applied to Eligible Common Stock (including ADRs), other than Eligible Common Stock of REITs, shall be 1.7848.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) Subject to subparagraph (iii) below, the Discount Factor applied to Eligible Common Stock of REITs shall be 1.5178.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) The Discount Factor for Eligible Common Stock that has not been listed on an exchange or traded for more than 15 months (eligible stock exchanges are the National Securities Exchanges, the
    Washington Stock Exchange, the Pacific Stock Exchange and National Market Quotations) shall be the Discount Factor set forth in subparagraph (i) or (ii) above, as applicable, increased by 0.20.</FONT></p>
  <p>
  <FONT face="serif">(b) </FONT><U><FONT face="serif">Eligible Preferred Stock</FONT></U><FONT face="serif">.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraphs (ii) and (iii) below, the Discount Factor applied to Eligible Preferred Stock shall be determined by reference to the type of Eligible Preferred Stock in accordance with
    the table set forth below. </FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">2</FONT></P>

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<TABLE width="75%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=61% align=right>
          <center>
          <B><FONT face="serif">Type of Eligible Preferred Stock</FONT></B>&nbsp;
          </center></TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=25% align=center>
<B><FONT face="serif">Discount Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
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        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=61% align=left>
<FONT face="serif">Fixed rate Preferred stock</FONT>&nbsp;
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">2.9568</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=61% align=left>
<FONT face="serif">Adjustable rate Preferred stock</FONT>&nbsp;
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">2.7212</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=61% align=left>
<FONT face="serif">Taxable Preferred (non-DRD)</FONT>&nbsp;
        </TD>
        <TD width=12%>&nbsp;
  </TD>
        <TD width=25% align=center>
<FONT face="serif">1.9202</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
</TABLE><BR>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) The Discount Factor for Eligible Preferred Stock the issuer of which has a senior debt rating or a preferred stock rating of less than BBB shall be the applicable Discount Factor set forth in the
    table in subparagraph (i) above increased by 0.05.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) The Discount Factor for Eligible Preferred Stock the issuer of which has no senior debt rating or preferred stock rating, or no dividend history, shall be the applicable Discount Factor set
    forth in the table in subparagraph (i) above increased by 0.10.</FONT></p>
  <p>
  <FONT face="serif">(c) </FONT><U><FONT face="serif">Eligible Corporate Bonds</FONT></U><FONT face="serif">.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraph (ii) below, The Discount Factors applied to Eligible Corporate Bonds shall be determined by reference to the rating on such asset in accordance with the table set forth
  below.</FONT></p>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=37% align=center>
<B><FONT face="serif">Rating</FONT></B>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <B><FONT face="serif">Discount</FONT></B>&nbsp;
          </center></TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>&nbsp;

        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <B><FONT face="serif">Factor</FONT></B>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">AAA</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">1.1836</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">AA</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">1.1942</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">A</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">1.2099</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">BBB</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">1.2543</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">BB</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">1.4139</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">B</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">1.7691</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">CCC</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">4.9524</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">CCC-</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=right>
          <center>
          <FONT face="serif">14.3113</FONT>&nbsp;
          </center></TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR align="center" size=1 noshade>
        </TD>
</TR>
</TABLE>
<BR>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) Any Eligible Corporate Bond that is issued by a regulated public utility company and that has a remaining maturity of more than 30 years shall have a Discount Factor of zero.</FONT></p>
  <p>
    <FONT face="serif">(d) </FONT><U><FONT face="serif">Eligible Convertible Bonds and Eligible Convertible Preferred Stock</FONT></U><FONT face="serif">.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraph (ii) below, the Discount Factors applied to Eligible Convertible Bonds and Eligible Convertible Preferred Stock shall be determined by reference to the rating on such asset
    in accordance with the table set forth below.</FONT></p>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=37% align=center>
<B><FONT face="serif">Rating</FONT></B>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=center>
<B><FONT face="serif">Discount</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>&nbsp;

        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=center>
<B><FONT face="serif">Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">AAA</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.5888</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">AA</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.6539</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=37% align=left>
<FONT face="serif">A</FONT>&nbsp;
        </TD>
        <TD width=29%>&nbsp;
  </TD>
        <TD width=33% align=center>
<FONT face="serif">1.7191</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>

  <TR valign="bottom">
    <TD width=18% align=left> <FONT face="serif">BBB</FONT>&nbsp; </TD>
    <TD width=56%>&nbsp; </TD>
    <TD width=25% align=right> <center>
      <FONT face="serif">1.7843</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR align="center" size=1 noshade>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=18% align=left> <FONT face="serif">BB</FONT>&nbsp; </TD>
    <TD width=56%>&nbsp; </TD>
    <TD width=25% align=right> <center>
      <FONT face="serif">1.8494</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR align="center" size=1 noshade>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=18% align=left> <FONT face="serif">B</FONT>&nbsp; </TD>
    <TD width=56%>&nbsp; </TD>
    <TD width=25% align=right> <center>
      <FONT face="serif">1.9146</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR align="center" size=1 noshade>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=18% align=left> <FONT face="serif">CCC</FONT>&nbsp; </TD>
    <TD width=56%>&nbsp; </TD>
    <TD width=25% align=right> <center>
      <FONT face="serif">1.9798</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR noshade size=1>
    </TD>
  </TR>
</TABLE>
<p><BR>
</p>
<P align="center">
<FONT face="serif">3</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <p align="left"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) Any Eligible Convertible Bond that is issued by a regulated public utility company and that has a remaining maturity of more than 30 years shall have a Discount Factor of zero.</FONT></p>
</blockquote>
<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(e) </FONT><U><FONT face="serif">Short-Term Money Market Instruments</FONT></U><FONT face="serif">. The Discount Factors applied to Short-Term Money Market Instruments shall be determined by reference
to the rating of such assets with reference to the remaining term to maturity of such assets in accordance with the table set forth below.</FONT></P>
<BR>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=80% align=center>
<B><FONT face="serif">Type of Instrument and Remaining Term to Maturity</FONT></B>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<B><FONT face="serif">Discount</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>&nbsp;

        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<B><FONT face="serif">Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">Cash and Demand Deposits in an A-1+ rated institution</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<FONT face="serif">1.0000</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">Eligible Short-Term Money Market Instruments with next-day</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<FONT face="serif">1.0000</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">maturity invested in institutions rated &#145;A-1+&#146;</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">Commercial Paper rated A-1+ or A-1, if less than 30 days</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<FONT face="serif">1.0570</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">maturity and held to maturity</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">Commercial Paper rated A-2, with a maturity of between one</FONT>
<FONT face="serif">and 360 days</FONT>&nbsp; </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<FONT face="serif">1.6500</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">All other Eligible Short-Term Money Market Instruments with a</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<FONT face="serif">1.0520</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">maturity of 180 days or less</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">All other Eligible Short-Term Money Market Instruments with a</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=center>
<FONT face="serif">1.1630</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=80% align=left>
<FONT face="serif">maturity of between 181 and 360 days</FONT>&nbsp;
        </TD>
        <TD width=7%>&nbsp;
  </TD>
        <TD width=11% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
</TABLE>
<BR>
<blockquote>
  <p>
  <FONT face="serif"><FONT face="serif"></FONT>(f) </FONT><U><FONT face="serif">U.S. Treasury Securities</FONT></U><FONT face="serif">. </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraphs (ii) and (iii) below, the Discount Factors applied to U.S. Treasury Securities shall be determined by reference to the remaining term to maturity of such assets in
    accordance with the table set forth below.</FONT></p>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=69% align=center>
<B><FONT face="serif">Remaining Term to Maturity</FONT></B>&nbsp;
        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Discount</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=69% align=left>&nbsp;

        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=69% align=left>
<FONT face="serif">One year or less.</FONT>&nbsp;
        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.0284</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=69% align=left>
<FONT face="serif">More than one year but not more than 2</FONT>&nbsp;
<FONT face="serif">years</FONT> </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.0541</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=69% align=left>
<FONT face="serif">More than 2 years but not more than 5</FONT>&nbsp;
        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.1335</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=69% align=left>
<FONT face="serif">years.</FONT>&nbsp;
        </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=69% align=left>
<FONT face="serif">More than 5 years but not more than 10</FONT>&nbsp;<FONT face="serif">years.</FONT>&nbsp; </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.2284</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=69% align=left>
<FONT face="serif">More than 10 years but not more than 30</FONT>
<FONT face="serif">years.</FONT>&nbsp; </TD>
        <TD width=14%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.4180</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
</TABLE>
<BR>
<P align="center">
<FONT face="serif">4</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) The Discount Factor applied to an interest-only U.S. Treasury Strip shall be the Discount Factor that is set forth in the table in subparagraph (i) above for a U.S. Treasury Security having a
    remaining term to maturity that is one category greater than the remaining term to maturity of such interest-only U.S. Treasury Strip.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) The Discount Factor applied to a principal-only U.S. Treasury Strip shall be the Discount Factor that is set forth in the table in subparagraph (i) above for a U.S. Treasury Security having a
    remaining term to maturity that is two categories greater than the remaining term to maturity of such principal-only U.S. Treasury Strip. </FONT></p>
</blockquote>
<p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(g) </FONT><U><FONT face="serif">U.S. Agency Mortgage Collateral, GNMA Certificates, FHLMC Certificates,</FONT></U><FONT face="serif"> </FONT><U><FONT face="serif">FNMA Certificates, FHLMC Multifamily
  Securities and GNMA Graduated Payment Securities</FONT></U><FONT face="serif">.</FONT></p>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraphs (ii) and (iii) below, the Discount Factors applied to U.S. Agency Mortgage Collateral, GNMA Certificates, FHLMC Certificates, FNMA Certificates, FHLMC Multifamily
    Securities and GNMA Graduated Payment Securities shall be determined by reference to the type and term to maturity of such assets in accordance with the table set forth below.</FONT></p>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left>
 &nbsp;<B><FONT face="serif">Type of Asset and Term to Maturity</FONT></B>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Discount</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>&nbsp;

        </TD>
        <TD width=64% align=left>&nbsp;

        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left>
<FONT face="serif">15-year Fixed</FONT>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.407</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=2>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left>
<FONT face="serif">30-year Fixed</FONT>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.442</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=2>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>
<FONT face="serif">1/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT> </TD>
        <TD width=64% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.306</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>
<FONT face="serif">3/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT> </TD>
        <TD width=64% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.313</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>
<FONT face="serif">5/1</FONT>
<FONT face="serif">ARMs</FONT> </TD>
        <TD width=64% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.319</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left>
<FONT face="serif">10/1 ARMs</FONT>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.322</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=2>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
</TABLE>
<BR>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) The Discount Factor for GNMA Graduated Payment Securities shall be the applicable Discount Factor set forth in the table in subparagraph (i) above increased by 0.20.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) The Discount Factor for FNMA Certificates backed by multifamily adjustable rate mortgages pegged to the 11</FONT><SUP><FONT face="serif">th</FONT></SUP><FONT face="serif"> District Cost of Funds
    Index shall be the applicable Discount Factor set forth in the table in subparagraph (i) above increased by 0.05.</FONT></p>
  <p>
    <FONT face="serif">(h) </FONT><U><FONT face="serif">Mortgage Pass-Through Certificates</FONT></U><FONT face="serif">. </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) Subject to subparagraph (ii) below, the Discount Factors applied to Mortgage Pass-Through Certificates shall be determined by reference to the type and term to maturity of such assets in
  accordance with the table set forth below.</FONT></p>
</blockquote>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=70% colspan=2 align=right>
          <center>
          <B><FONT face="serif">Type of Asset and Term to Maturity</FONT></B>&nbsp;
          </center></TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Discount</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=13% align=left>&nbsp;

        </TD>
        <TD width=56% align=left>&nbsp;

        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=13% align=right>
          <div align="left"><FONT face="serif">15-year Fixed</FONT>&nbsp;
          </div></TD>
        <TD width=56% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.432</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=13% align=right>
          <div align="left"><FONT face="serif">30-year</FONT>
            <FONT face="serif">Fixed</FONT>          </div></TD>
        <TD width=56% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.467</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>  <TR valign="bottom">
    <TD width=5% align=left> <FONT face="serif">1/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT></TD>
    <TD width=14% align=right>&nbsp;  </TD>
    <TD width=67%>&nbsp; </TD>
    <TD width=10% align=right> <center>
      <FONT face="serif">1.355</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR align="center" size=1 noshade>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left> <FONT face="serif">3/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT></TD>
    <TD width=14% align=right>&nbsp;  </TD>
    <TD width=67%>&nbsp; </TD>
    <TD width=10% align=right> <center>
      <FONT face="serif">1.361</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR align="center" size=1 noshade>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=5% align=left> <FONT face="serif">5/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT></TD>
    <TD width=14% align=right>&nbsp;  </TD>
    <TD width=67%>&nbsp; </TD>
    <TD width=10% align=right> <center>
      <FONT face="serif">1.367</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR align="center" size=1 noshade>
    </TD>
  </TR>
  <TR valign="bottom">
    <TD width=20% colspan=2 align=left> <FONT face="serif">10/1 ARMs</FONT>&nbsp; </TD>
    <TD width=67%>&nbsp; </TD>
    <TD width=10% align=right> <center>
      <FONT face="serif">1.370</FONT>&nbsp;
    </center></TD>
  </TR>
  <TR>
    <TD colspan=2>
      <HR noshade size=1>
    </TD>
    <TD> </TD>
    <TD>
      <HR noshade size=1>
    </TD>
  </TR>
</TABLE>
<p><BR>
</p>
<P align="center">
<FONT face="serif">5</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<BR>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) The Discount Factors applied to Mortgage Pass-Through Certificates backed by pools of convertible ARMs shall be the applicable Discount Factor set forth in the table in subparagraph (i) above
    increased by 0.05. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) </FONT><U><FONT face="serif">Fixed-Rate and Adjustable-Rate Mortgages (Conventional/FHA/VA Mortgages</FONT></U><FONT face="serif"> </FONT><U><FONT face="serif">and Whole Loans)</FONT></U><FONT
face="serif">. The Discount Factors applied to Fixed-Rate and Adjustable-Rate Mortgages shall be determined by reference to the type and term to maturity of such assets in accordance with the table set forth below.</FONT></P>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left><center>
        <B><FONT face="serif">Type of Asset and Term to Maturity</FONT></B>&nbsp;
        </center></TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Discount</FONT></B>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>&nbsp;

        </TD>
        <TD width=64% align=left>&nbsp;

        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<B><FONT face="serif">Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left>
<FONT face="serif">15-year Fixed</FONT>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.460</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=2>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left>
<FONT face="serif">30-year Fixed</FONT>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.495</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=2>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>
<FONT face="serif">1/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT> </TD>
        <TD width=64% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.409</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>
<FONT face="serif">3/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT> </TD>
        <TD width=64% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.420</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=5% align=left>
<FONT face="serif">5/1</FONT>&nbsp;<FONT face="serif">ARMs</FONT> </TD>
        <TD width=64% align=right>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.421</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=70% colspan=2 align=left>
<FONT face="serif">10/1ARMs</FONT>&nbsp;
        </TD>
        <TD width=11%>&nbsp;
  </TD>
        <TD width=16% align=center>
<FONT face="serif">1.424</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD colspan=2>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
</TABLE>
<BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(j) </FONT><U><FONT face="serif">Collateralized Mortgage Obligations and Multiclass REMICs issued by FNMA</FONT></U><FONT face="serif"> </FONT><U><FONT face="serif">and FHLMC</FONT></U><FONT
face="serif">. The Discount Factor applied to Collateralized Mortgage Obligations and Multiclass REMICs issued by FNMA and FHLMC shall be determined by reference to the weighted average life of such assets in accordance with the table set forth
below.</FONT></P>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=66% align=left>
 &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;<B><FONT face="serif">Weighted Average Life</FONT></B>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=23% align=center>
<B><FONT face="serif">Discount Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">Less than 5 years</FONT>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=23% align=center>
<FONT face="serif">1.40</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">Greater than or equal to 5 years and less than 10</FONT>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=23% align=center>
<FONT face="serif">1.50</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=66% align=left>
<FONT face="serif">years</FONT>&nbsp;
        </TD>
        <TD width=9%>&nbsp;
  </TD>
        <TD width=23% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
</TABLE><BR>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(k) </FONT><U><FONT face="serif">Unsecured Corporate Debt Obligations of FNMA, FHLMC, FHLB, Farm Credit</FONT></U><FONT face="serif"> </FONT><U><FONT face="serif">System and Sallie Mae</FONT></U><FONT
face="serif">. The Discount Factors applied to Unsecured Corporate Debt Obligations of FNMA, FHLMC, FHLB, Farm Credit System and Sallie Mae shall be determined by reference to the term to maturity of such assets in accordance with the table set
forth below.</FONT></P>
<TABLE width="50%" border=0 align="center" cellpadding=0 cellspacing=0>
<TR valign="bottom">
        <TD width=68% align=center>
<B><FONT face="serif">Term to Maturity</FONT></B>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=center>
<B><FONT face="serif">Discount Factor</FONT></B>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=68% align=left>
<FONT face="serif">Less than one year</FONT>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=center>
<FONT face="serif">1.18</FONT>&nbsp;
        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=68% align=left>
<FONT face="serif">Greater than or equal to one year and less than 5</FONT>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=center>
<FONT face="serif">1.38</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=68% align=left>
<FONT face="serif">years</FONT>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=68% align=left>
<FONT face="serif">Greater than or equal to 5 years and less than 10</FONT>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=center>
<FONT face="serif">1.45</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=68% align=left>
<FONT face="serif">years</FONT>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
<TR valign="bottom">
        <TD width=68% align=left>
<FONT face="serif">Greater than or equal to 10 years and less than 15</FONT>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=center>
<FONT face="serif">1.50</FONT>&nbsp;
        </TD>
</TR>
<TR valign="bottom">
        <TD width=68% align=left>
<FONT face="serif">years</FONT>&nbsp;
        </TD>
        <TD width=8%>&nbsp;
  </TD>
        <TD width=23% align=left>&nbsp;

        </TD>
</TR>
<TR>
        <TD>
<HR noshade size=1>
        </TD>
        <TD>
        </TD>
        <TD>
<HR noshade size=1>
        </TD>
</TR>
</TABLE><BR>
<P align="center">
<FONT face="serif">6</FONT></P>

<HR noshade  width="100%" size=4>

<P align="left" style="page-break-before:always"></P><PAGE>


<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(l) </FONT><U><FONT face="serif">FHA-Insured Multifamily Loans</FONT></U><FONT face="serif">. The Discount Factor applied to FHA-Insured Multifamily Loans shall be 1.90. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT face="serif">(m) </FONT><U><FONT face="serif">Receivables</FONT></U><FONT face="serif">. </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) The Discount Factor applied to receivables relating to the sale of Eligible Assets due within five Business Days of a Valuation Date is 1.00. </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) The Discount Factor applied to receivables relating to the sale of Eligible Assets that are due in more than five Business Days of a Valuation Date shall be the Discount Rate used for such
    Eligible Assets. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Notwithstanding the foregoing, for so long as is required by S&amp;P to maintain its then-current credit rating of the Fund Preferred Stock, the Discount Factor with respect to an Eligible Asset 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 Asset shall be the then-current Discount Factor provided by S&amp;P to the Fund
in writing for the purpose of such determination. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Discount Notes&#148; means short-term unsecured debt obligations issued by FNMA, FHLMC, FHLB, the Farm Credit System and Sallie Mae. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Discounted Value,&#148; with respect to any asset held by the Fund as of any date, means the quotient of the Market Value of such asset divided by the applicable Discount Factor; </FONT><I><FONT
face="serif">provided, however,</FONT></I><FONT face="serif"> that, in the event the Fund has written a call option on such asset, the Discounted Value of such asset shall be zero; </FONT><I><FONT face="serif">provided, further,</FONT></I><FONT
face="serif"> that in no event shall the Discounted Value of any Eligible Asset as of any date exceed the unpaid principal balance or face amount of such asset as of that date.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible Assets&#148; shall, except as otherwise provided below, include cash, Collateralized Mortgage Obligations, Eligible Common Stock, Eligible Convertible Bonds, Eligible Convertible
Preferred Stock, Eligible Corporate Bonds, Eligible Preferred Stock, FHA-Insured Multifamily Loans, FHLMC Certificates, FHLMC Multifamily Securities, Fixed-Rate and Adjustable-Rate Mortgages (Conventional/FHA/VA Mortgages and Whole Loans), FNMA
Certificates, GNMA Certificates, GNMA Graduated Payment Securities, GNMA Multifamily Securities, Mortgage Pass-Through Certificates, Short Term Money Market Instruments, Unsecured Corporate Debt Obligations of FNMA, FHLMC, FHLB, Farm Credit System
and Sallie Mae, U.S. Agency Mortgage Collateral, U.S. Treasury Securities and any other asset held by the Fund that has been assigned a Discount Factor by S&amp;P and is included within the definition of Eligible Assets set forth herein or pursuant
to an amendment or supplement hereto.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">No securities of any single issuer owned by the Fund shall be deemed to be &#147;Eligible Assets&#148; for purposes of determining maintenance of the &#147;Preferred Stock Basic Maintenance
Amount&#148; to the extent that the Market Value of such securities owned by the Fund exceeds 10% of the aggregate Market Value of all Eligible Assets.** </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible Common Stock&#148; means common stocks or ADRs (i) of which the Fund holds no more than the average monthly trading volume over the past year, (ii) which have a </FONT></P>
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<P>
<FONT face="serif">minimum market capitalization of at least &#36;100 million, (iii) which are neither restricted stocks (Rule 144A Securities) or any pink sheet stocks (generally, stock that are not carried in daily over-the-counter newspaper
listings) and (iv) which are owned by the Fund.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible Convertible Bonds&#148; means all convertible bonds that are rated at least &#145;CCC&#150;&#146; by S&amp;P; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">,
</FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that all such convertible bonds that are rated below &#145;BBB&#150;&#146; by S&amp;P must have a minimum market capitalization of &#36;100 million (it being understood, for
purposes of this definition, that market capitalization levels assume weekly valuation at the lower of two bid quotations obtained by the Fund from two dealers who are members of NASD and are making a market in such securities).</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible Convertible Preferred Stock&#148; means all convertible preferred stock that is rated at least &#145;CCC&#150;&#146; by S&amp;P; </FONT><I><FONT face="serif">provided</FONT></I><FONT
face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that all such convertible preferred stock that is rated below &#145;BBB&#150;&#146; by S&amp;P must have a minimum market capitalization of &#36;100 million (it being
understood, for purposes of this definition, that market capitalization levels assume weekly valuation at the lower of two bid quotations obtained by the Fund from two dealers who are members of NASD and are making a market in such
securities).</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible Corporate Bonds&#148; means debt securities issued by a corporation and Yankee Bonds which (i) provide for periodic interest payments in cash over the life of the security, (ii) are not
convertible or exchangeable into capital of the security&#146;s issuer at any time (except that not more than 10% in Market Value of the corporate debt securities pool may be subject to exchange or tender offer), and (iii) have a remaining term to
maturity of 30 years or less. In addition, no debt securities shall be Eligible Corporate Bonds unless such securities satisfy all of the following conditions: </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) financial statements are publicly available for the issuer of such debt securities and such debt securities are registered under the Securities Act of 1933; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) private placement 144A debt securities with registration rights are deemed to be Eligible Assets; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) in the case of a debt security issued under a MTNP, such debt security is part of a series of medium term notes which exceeds &#36;5 million in aggregate Market Value; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) no non-rated debt securities owned by the Fund shall be deemed to be Eligible Corporate Bonds to the extent the Market Value of such debt securities owned by the Fund exceeds 5% of aggregate
    Market Value of all Eligible Assets;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(v) at least 80% of the Market Value of high-yield debt securities (collateral rated below &#145;BBB-&#146;) owned by the Fund have a minimum original issue size of &#36;100 million, and the other 20%
    have a minimum original issue size of &#36;50 million; </FONT></p>
</blockquote>
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<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vi) no debt securities having an S&amp;P rating ranging from &#145;CCC-&#146; to &#145;CCC+&#146; owned by the Fund shall be deemed to be Eligible Corporate Bonds to the extent the Market Value of
    such debt securities owned by the Fund exceeds 20% of the aggregate Market Value of all Eligible Assets;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vii) no debt securities rated below &#145;CC-&#146; by S&amp;P owned by the Fund shall be deemed to be Eligible Corporate Bonds to the extent the Market Value of such debt securities owned by the
    Fund exceeds 15% of the aggregate Market Value of all Eligible Assets; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(viii) no Sovereigns shall be deemed to be Eligible Corporate Bonds to the extent the Market Value of such Sovereigns owned by the Fund exceeds 50% of the aggregate Market Value of all Eligible
    Assets;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ix) no Sovereigns rated &#145;A-&#146; or better by S&amp;P shall be deemed to be Eligible Corporate Bonds to the extent the Market Value of such Sovereigns owned by the Fund exceeds 100% of the
    aggregate Market Value of all Sovereigns deemed to be Eligible Corporate Bonds pursuant to subparagraph (viii) above; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(x) no Sovereigns rated between &#145;BBB&#150;&#146; and &#145;BBB+&#146; by S&amp;P shall be deemed to be Eligible Corporate Bonds to the extent the Market Value of such Sovereigns owned by the Fund
    exceeds 25% of the aggregate Market Value of all Sovereigns deemed to be Eligible Corporate Bonds pursuant to subparagraph (viii) above; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(xi) no Sovereigns rated below &#145;BBB&#150;&#146; by S&amp;P shall be deemed to be Eligible Corporate Bonds to the extent the Market Value of such Sovereigns owned by the Fund exceeds 10% of the
    aggregate Market Value of all Sovereigns deemed to be Eligible Corporate Bonds pursuant to subparagraph (viii) above. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eligible Preferred Stock&#148; means preferred stocks that satisfy all of the following conditions:</FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) the preferred stock issuer has a senior debt rating from S&amp;P, or the preferred issue is rated. In the case of Yankee Preferred Stock, the issuer has a S&amp;P senior debt rating of at least
&#145;BBB&#146;, or the preferred issue is rated at least &#145;BBB&#146;; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) the issuer &#150; or if the issuer is a special-purpose corporation, its parent &#150; is listed on either the NYSE, the AMEX or the NASDAQ System if the traded par amount is less than
&#36;1,000; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, that if the traded par amount is &#36;1,000 or more, exchange listing is not required; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) the preferred stock pays cash dividends denominated in U.S. dollars; </FONT></p>
</blockquote>
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<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) private placement 144A preferred stock with registration rights are deemed to be Eligible Assets; </FONT></p>
  <p>
    <FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(</FONT>v) the issuer has a minimum market capitalization of &#36;100 million; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vi) if such preferred stock is floating-rate preferred stock, (x) holdings of such floating-rate preferred stock must be limited to stock with a dividend period of less than or equal to 49 days,
    except for a new issue, where the first dividend period may be up to 64 days and (y) such floating-rate preferred stock may not have been subject to a failed auction; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vii) if such preferred stock is adjustable- or auction-rate preferred stock, the total Market Value of such adjustable-rate preferred stock held in the portfolio may not exceed 10% of the Eligible
    Assets; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(viii) no preferred stock of any issuer owned by the Fund shall be deemed to be Eligible Preferred Stock to the extent the Market Value of such preferred stock owned by the Fund exceeds 10% of the
    aggregate Market Value of all Eligible Assets; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ix) no preferred stock rated below &#145;B-&#146; (including non-rated preferred stock) owned by the Fund shall be deemed to be Eligible Preferred Stock to the extent the extent the Market Value of
    such preferred stock owned by the Fund exceeds 15% of the aggregate Market Value of all Eligible Assets. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Eurodollar Deposits&#148; means U.S. dollar-denominated deposits at foreign banks or foreign branches of American banks. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Federal Funds&#148; means next day funds deposited by commercial banks at Federal Reserve Banks, including funds in excess of bank reserve requirements. </FONT></P>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT face="serif">&#147;FFCBs&#148; means Federal Farm Credit Banks.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHA-Insured Multifamily Loans&#148; means FHA multifamily loans which satisfy the following conditions:</FONT><B><FONT face="serif"> </FONT></B></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) such loans are first-lien, current interest-bearing, have a minimum principal balance of &#36;100,000, and have at least a one-year minimum remaining to maturity; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) such loans are accompanied by evidence of an FHA insurance commitment;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) the Market Value of any one such loan does not exceed 5% of the aggregate Market Value of the portfolio of such loans;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) such loans are initially included in minimum blocks of &#36;5 million, per the insurance program under the National Housing Act;</FONT></p>
</blockquote>
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<blockquote>
  <p align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(</FONT><FONT face="serif">v) the collateral pools underlying such loans are homogenous;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vi) in the case of project loans, such loans have at least a 90% occupancy rate at the time the loan is pledged, and such occupancy rate is confirmed by the managerial report dated not more than one
    year prior to the date of pledging, and annually thereafter; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vii) if such loans are insured under Section 221(d)(4) of the National Housing Act and are putable, such characteristic is identified along with the put period;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(viii) the prepayment and call protection features of such loans are identified, and the locations of the applicable projects are disclosed;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ix) in the case of defaulted mortgage loans, such loans may continue to be valued for up to 90 days after default; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT
face="serif">however</FONT></I><FONT face="serif">, that after 90 days following such default, such loans must be valued at zero (it being understood that any such loan in default is to be liquidated or substituted during such 90-day period); and
  </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(x) the conditions set forth in sub-clauses (i) through (ix) above are certified by a nationally recognized independent accounting firm at the closing for such loans and for every audit for such loans
    thereafter. </FONT></p>
</blockquote>
<P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHLBs&#148; means Federal Home Loan Banks. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHLMC&#148; means the Federal Home Loan Mortgage Fund created by Title III of the Emergency Home Finance Act of 1970, and includes any successor thereto. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHLMC Certificate&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FHLMC Multifamily Security&#148; means a &#147;Plan B Multifamily Security&#148; 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 Assets will not, in and of itself, impair or cause the Fund Preferred Stock to fail to retain the ratings assigned to the Fund Preferred Stock by S&amp;P, as evidenced by a
letter to such effect delivered to the Fund by S&amp;P. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Fixed-Rate and Adjustable-Rate Mortgages (Conventional/FHA/VA Mortgages and Whole Loans)&#148; means mortgage pools which (i) consist of at least 100 loans each secured by single-family,
one-unit, detached primary residence and (ii) satisfy the following conditions: </FONT></P>
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<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(A) the loan-to-value ratio (&#147;LTV&#148;) of each such pool is 80% or less, and the loan balance of each loan included in each such pool is not greater than &#36;400,000, except as noted in the
      other conditions set forth below; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(B) no more than 25% of each pool may have LTVs greater than 80% but less than or equal to 90%; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT
face="serif">however</FONT></I><FONT face="serif">, that no more than 10% of each pool may have an original LTV in excess of 80%, but less than or equal to 95%; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(C) loans with LTVs in excess of 80% are covered by &#147;AA&#148; primary mortgage insurance accompanied by an adjustor policy when negative amortization is present;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(D) no more than 25% of each pool may have loan balances between &#36;400,000 and &#36;600,000; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT
face="serif">however</FONT></I><FONT face="serif">, that the maximum size of any loan is appropriate with respect to the market area of the originator; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(E) no more than 10% of each pool may represent condominiums that are four stories or less; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(F) the total proportion of each pool represented by loans meeting the conditions of any of subparagraphs (B), (D) or (E) above does not exceed 35% of such pool; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(G) in each pool, no single loan has the characteristics described in more than one of subparagraphs (B), (D) or (E) above; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(H) in each pool, properties securing the loans are well dispersed geographically and are in areas with strong economies; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(I) in the case of each ARM collateral pool, such pool is homogenous, and all mortgages included in such pool are tied to the same index, have similar caps, and have same frequency of interest rate
      and payments that adjust in the same quarter. </FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FNMA&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;FNMA Certificate&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;GNMA&#148; means the Government National Mortgage Association, and includes any successor thereto. </FONT></P>
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<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;GNMA Certificate&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;GNMA Graduated Payment Security&#148; 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. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Market Value&#148; means, initially, the market value of any asset of the Fund determined by any pricing service designated by the Fund and approved by Moody&#146;s and S&amp;P, if Moody&#146;s
and S&amp;P are then rating the Fund Preferred Stock, and from any Substitute Rating Agency then rating the Fund Preferred Stock (the &#147;Pricing Service&#148;). The &#147;Market Value&#148; of any asset shall include any interest accrued thereon.
The Pricing Service shall value an asset at the lower of the quoted bid price and the mean between the quoted bid and ask price or the yield equivalent when quotations are readily available. Securities and other property for which quotations are not
readily available shall be valued at fair value as determined by the Pricing Service, using methods which include consideration of: yields or prices of securities of comparable quality, type of issue, coupon, maturity and rating; indications as to
value from dealers; and general market conditions. The Pricing Service may employ electronic data processing techniques and/or a matrix system to determine valuations. If the Pricing Service fails to provide the Market Value of any securities, such
securities shall be valued at the lower of two bid quotations (at least one of which shall be in writing) obtained by the Fund from two dealers who are members of the NASD and are making a market in such securities. If two bid quotations are not
readily available for any securities, such securities shall be valued at fair value on a consistent basis using methods determined in good faith by the Board of Directors. Futures contracts and options shall be valued at closing prices for such
instruments established by the exchange or board of trade on which they are traded or, if market quotations are not readily available, shall be valued at fair value as determined by the Pricing Service or, if the Pricing Service is not able to value
such instruments, shall be valued at fair value on a consistent basis using methods determined in good faith by the Board of Directors. All other assets shall be valued at fair value on a consistent basis using methods determined in good faith by
the Board of Directors. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Mortgage Pass-Through Certificates&#148; means publicly issued certificates which (i) evidence proportional, undivided interests in pools of whole residential mortgage loans and (ii) maintain at
least &#145;AA-&#145; rating by S&amp;P; </FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, </FONT><I><FONT face="serif">however</FONT></I><FONT face="serif">, that certificates rated at an S&amp;P &#145;AA-&#145; equivalent by
another nationally recognized credit rating agency may be eligible on a case-by-case basis.</FONT></P>
<P>
<FONT face="serif">&#147;MTNP&#148; means a medium term note program. </FONT></P>
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<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;NASD&#148; means National Association of Securities Dealers, Inc. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;National Securities Exchange&#148; means the NYSE, AMEX, Midwest Stock Exchange, Philadelphia Stock Exchange, Boston Stock Exchange, NASDAQ System or any other national securities exchange.
</FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;NYSE&#148; means New York Stock Exchange, Inc. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Permitted Bank&#148; means any bank, domestic or foreign, whose Commercial Paper is rated &#145;A-1+&#146; or, subject to the conditions set forth in subparagraph (ii)(B) of the definition of
&#147;Short-Term Money Market Instruments&#148;, &#145;A-1&#146;. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Preferred Stock Basic Maintenance Amount&#148; means, initially, as of any date, the sum of (i) the aggregate liquidation preference of the shares of Fund Preferred Stock outstanding, (ii) to
the extent not covered in (i), the aggregate amount of accumulated but unpaid cash dividends with respect to the shares of Fund Preferred Stock outstanding, (iii) the aggregate principal amount of, and an amount equal to accrued but unpaid interest
on, any other then outstanding indebtedness of the Fund for money borrowed, (iv) the aggregate Projected Dividend Amount, (v) redemption premium, if any, and (vi) the greater of &#36;200,000 or an amount equal to projected expenses of the Fund
(including, without limitation, fee and indemnification obligations of the Fund incurred in connection with any commercial paper program undertaken by the Fund or with any credit facility related thereto) for the next three month period.</FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Pricing Service&#148; has the meaning set forth in the definition of &#147;Market Value&#148;. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Projected Dividend Amount&#148; for the Fund Preferred Stock as of any date shall have the following meaning: </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(a) If the date of determination is a Valuation Date, then the Projected Dividend Amount on such date of determination shall equal the amount of cash dividends, based on the number of shares of Fund
Preferred Stock</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">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: </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) If the Valuation Date is the Date of Original Issue or a Dividend Payment Date, (A) 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 in effect on such Valuation Date, and (B) 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 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 (in the
    case of any Dividend Payment Date); and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) If such Valuation Date is not the Date of Original Issue or a Dividend Payment Date, (A) 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 (B) for the period beginning on (and </FONT></p>
</blockquote>
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<FONT face="serif">14</FONT></P>

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<P>
<FONT face="serif">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 (in the case of any other Valuation Date) and (C) 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.
</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(b) 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 Fund Preferred Stock outstanding.</FONT><B><FONT face="serif"> </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;REIT&#148; means an entity qualifying as a real estate investment trust under the United States Internal Revenue Code of 1986, as amended. </FONT></P>
<P>
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;REMICs&#148; means real estate mortgage investment conduits.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Repurchase Agreement&#148; means an agreement between a seller and buyer of securities, generally U.S. Government securities, where the seller agrees to repurchase the securities at an agreed
upon price and generally at a stated time. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Rule 144A Securities&#148;</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">means securities which are restricted as to resale under federal securities laws but are eligible for resale
pursuant to Rule 144A under the Securities Act, as determined by the Fund&#146;s investment manager or portfolio manager acting pursuant to procedures approved by the Board of Directors. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Short-Term Money Market Instruments&#148; means short-term money market instruments, including, without limitation, cash, Bankers Acceptances, Certificates of Deposit, Commercial Paper, Demand
Deposits, Eurodollar Deposits, Federal Funds, Repurchase Agreements and Discount Notes, which (i) mature in one to 360 days and (ii) satisfy the following conditions: </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(A) short-term money market instruments, other than Commercial Paper, must be issued by an institution that, at the time of investment, is a Permitted Bank;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(B) short-term money market instruments, other than Commercial Paper, invested in an institution rated &#145;A-1&#146; must have a maturity of 30 days or less, and the aggregate Market Value of all
      Eligible Short-Term Money Market Instruments, other than Commercial Paper, invested in institutions rated &#145;A-1&#146; may not exceed 20% of the aggregate Market Value of all Eligible Assets;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(C) in the case of Eurodollar Deposits, (x) such Eurodollar Deposits must be issued by a Permitted Bank through its head office and/or any branch whose sovereign rating is rated the same or higher
      than the issuing bank and (y) to </FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">15</FONT></P>

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<P>
<FONT face="serif">the extent such Eurodollar deposits are deposited through the Cayman Islands branch of a Permitted Bank, such Cayman Islands branch must operate under a &#147;B Operating License,&#148; which license is verified by the Permitted
Bank;</FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(D) Commercial Paper must have a rating of &#145;A-1+&#146;, &#145;A-1&#146; or &#145;A-2&#146; to qualify as an Eligible Short-Term Money Market Instrument, and the aggregate Market Value of all
    Commercial Paper rated &#145;A-1&#146; or &#145;A-2&#146; owned by the Fund may not exceed 20% of the aggregate Market Value of all Eligible Assets; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(E) Commercial Paper rated &#145;A-1&#146; owned by the Fund must be divided equally among at least three issuers; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(F) Commercial Paper rated &#145;A-2&#146; owned by the Fund must be divided equally among at least five issuers.</FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Sovereign&#148; means a Yankee Bond which is issued by a foreign government or province or a supranational agency. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Unsecured Corporate Debt Obligations of FNMA, FHLMC, FHLB, Farm Credit System and Sallie Mae&#148; means direct issuance corporate debt securities of FNMA, FHLMC, FHLB, the Farm Credit System or
Sallie Mae which satisfy the following conditions:</FONT><B><FONT face="serif"> </FONT></B></P>
<blockquote>
  <p>
    <FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(</FONT>i) such corporate debt securities are not exchangeable; and </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) such corporate debt securities mature in 15 years or less, and pay interest periodically.</FONT></p>
  <p>
    <FONT face="serif">&#147;U.S. Agency Mortgage Collateral&#148; means the following securities: </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(i) certificates that (x) are guaranteed by GNMA for the full and timely payment of principal and interest and (y) evidence fractional undivided interests in pools of level-payment; fixed-, variable-,
    or adjustable-rate; or fully amortizing mortgage loans that are secured by first liens on one- to four-family residences;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(ii) certificates that (x) are guaranteed by FNMA for the full and timely payment of principal and interest and (y) evidence proportional undivided interests in pools of level-payment; fixed-,
    variable-, or adjustable-rate; fully amortizing mortgage loans that are secured by first liens on one- to four-family residences;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iii) certificates that (x) are guaranteed by FHLMC for the timely payment of interest and ultimate payment of principal and (y) evidence proportional undivided interests in pools of level-payment;
    fixed-, variable-, or adjustable-rate; fully amortizing mortgage loans that are secured by first liens on one- to four-family residences (</FONT><I><FONT face="serif">provided</FONT></I><FONT face="serif">, that, in the case of multifamily Plan B
    FHLMC certificates, the pools contain fixed-rate, fully amortizing mortgage loans </FONT></p>
</blockquote>
<P align="center">
<FONT face="serif">16</FONT></P>

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<blockquote>
  <p>
    <FONT face="serif">that are secured by first liens on properties containing five or more units and designed primarily for residential use); </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(iv) qualifying &#147;large pool&#148; FNMA mortgage-backed securities, FHLMC participation certificates and FNMA MegaPools;</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(v) FNMA Majors, FHLMC Multilender Swaps, and FHLMC Giant certificates; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vi) non-convertible FNMA adjustable-rate mortgage MegaPools and FHLMC weighted average coupon adjustable-rate mortgage certificates; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(vii) FHLMC Giant programs</FONT><B><FONT face="serif"> </FONT></B><FONT face="serif">excluding interest-only and principal-only stripped securities; </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(viii) FNMA Certificates backed by multifamily adjustable-rate mortgages pegged to the 11</FONT><SUP><FONT face="serif">th</FONT></SUP><FONT face="serif"> District Cost of Funds Index; and </FONT></p>
  <p>
    <FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(</FONT>ix) multiclass REMICs issued by FNMA and FHLMC.</FONT></p>
</blockquote>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Treasury Bills&#148; means securities that (i) are direct obligations of, or fully guaranteed by, the full faith and credit of the United States, (ii) mature in one year or less and (iii)
are issued at a discount from face value and mature at face value. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Treasury Bonds&#148; means securities that (i) are direct obligations of, or fully guaranteed by, the full faith and credit of the United States, (ii) mature in more than ten years and
(iii) pay interest semiannually.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Treasury Notes&#148; means securities that (i) are direct obligations of, or fully guaranteed by, the full faith and credit of the United States, (ii) generally mature in two, three, five
or ten years and (iii) are issued at or near face value and bear interest semiannually.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Treasury Securities&#148; means securities that are direct obligations of, or fully guaranteed by, the full faith and credit of the United States, including U.S. Treasury Bills, U.S.
Treasury Notes, U.S. Treasury Bonds and U.S. Treasury Strips.</FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;U.S. Treasury Strips&#148; means (i) securities that are based on securities that are direct obligations of, or fully guaranteed by, the full faith and credit of the United States and (ii)
created through the Separate Trading of Registered Interest and Principal of Securities program. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Yankee Bond&#148; means a debt security which is issued by a foreign government, province, supranational agency or foreign corporation. </FONT></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">&#147;Yankee Preferred Stock&#148; means preferred stock which is issued by a foreign corporation and is offered and sold in the U.S. and denominated in U.S. dollars. </FONT></P>
<P>&nbsp;</P>
<P align="center">
<FONT face="serif">17</FONT></P>

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<P align="left" style="page-break-before:always"> <PAGE>

<B><FONT face="serif">2. Certain Requirements and Restrictions. </FONT></B></P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">For so long as any shares of Fund Preferred Stock are outstanding and S&amp;P is then rating such shares of Fund Preferred Stock, the Fund will perform all actions required by this Section 2 and will
not engage in any transactions proscribed by restrictions set forth in this Section 2, unless the Fund has received written confirmation from S&amp;P that such noncompliance would not adversely affect the ratings then assigned by S&amp;P to such
shares of Fund Preferred Stock. </FONT></P>
<blockquote>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(a) The aggregate amount of borrowings by the Fund (including guarantees made by the Fund) shall be limited to an amount equal to 10% of the value of the Fund&#146;s assets. </FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(b) The Fund shall not incur any borrowings unless S&amp;P advises the Fund in writing that such borrowings will not adversely affect its then-current rating on the Fund Preferred Stock.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(c) The Fund shall not purchase or sell futures contracts or related options or engage in reverse repurchase agreement transactions unless S&amp;P advises the Fund in writing that such action or
    actions will not adversely affect its then-current rating on the Fund Preferred Stock.</FONT></p>
  <p> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">(d) The Fund 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 Fund, unless, in each case, S&amp;P advises the Fund in writing that such action or actions will not adversely affect its then-current ratings on the Fund Preferred
    Stock.</FONT><B><FONT face="serif"> </FONT></B></p>
</blockquote>
<P align="center">
<FONT face="serif">18</FONT></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2L(1)
<SEQUENCE>10
<FILENAME>c40133_ex-l1.txt
<TEXT>

                                                                     Exhibit L.1

March 22, 2006                                      Mayer, Brown, Rowe & Maw LLP
                                                           71 South Wacker Drive
                                                    Chicago, Illinois 60606-4637

                                                         Main Tel (312) 782-0600
                                                         Main Fax (312) 701-7711
                                                          www.mayerbrownrowe.com

DNP Select Income Fund Inc.
55 East Monroe Street, Suite 3600
Chicago, Illinois 60603

Re:  Registration Statement on Form N-2
     1933 Act File No. 333-130590
     1940 ACT FILE NO. 811-04915

Ladies and Gentlemen:

      We have acted as counsel to DNP Select Income Fund Inc., a closed-end
management investment company organized as a Maryland corporation (the "Fund"),
in connection with the proposed offering by the Fund of 4,000 shares of Auction
Preferred Stock, Series M, $.001 par value per share, 4,000 shares of Auction
Preferred Stock, Series W, $.001 par value per share, and 4,000 shares of
Auction Preferred Stock, Series F, $.001 par value per share, of the Fund
(collectively, the "Preferred Stock").

      This opinion is furnished in connection with the filing of the Fund's
Registration Statement on Form N-2 under the Securities Act of 1933, as amended
(File No. 333-130590) (the "Registration Statement").

      In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such records of the
Fund and such agreements, certificates of public officials, certificates of
officers or other representatives of the Fund and others, and such other
documents, certificates and records as we have deemed necessary or appropriate
as a basis for the opinions set forth herein. In our examination, we have
assumed the legal capacity of all natural persons, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
conformed or photostatic copies and the authenticity of the originals of such
copies. In making our examination of documents, we have assumed that the parties
thereto, other than the Fund, had or will have the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof on such parties. We have also assumed that the underwriting agreement
(the "Underwriting Agreement") between the Fund and the underwriter party
thereto (the "Underwriter") relating to the offer and sale of the Preferred
Stock will be executed and delivered in substantially the form reviewed by us
and that the share certificates representing each series of Preferred Stock will
conform to the specimen examined by us. As to any facts

 Berlin Brussels Charlotte Chicago Cologne Frankfurt Houston London Los Angeles
New York Palo Alto Paris Washington, D.C. Independent Mexico City Correspondent:
                        Jauregui, Navarrete y Nader S.C.

    Mayer, Brown, Rowe & Maw LLP operates in combination with our associated
       English limited liability partnership in the offices listed above.

<PAGE>

DNP Select Income Fund Inc.
March 22, 2006
Page 2

material to the opinions expressed herein which we have not independently
established or verified, we have relied upon statements and representations of
officers and other representatives of the Fund and others.

      We do not express any opinion as to any laws concerning any law other than
the law of the State of Illinois and, to the extent set forth herein, the law of
the State of Maryland. Insofar as the opinion expressed herein relates to or is
dependent upon matters governed by the law of the State of Maryland, we have
relied on the opinion of DLA Piper Rudnick Gray Cary US LLP dated the date
hereof.

      Based upon and subject to the foregoing, we are of the opinion that when
(i) the Registration Statement becomes effective, (ii) the Underwriting
Agreement has been duly executed and delivered, (iii) certificates representing
the Preferred Stock in the form of the specimen certificates examined by us have
been manually signed by an authorized officer of the transfer agent and
registrar for the Preferred Stock and registered by such transfer agent and
registrar, (iv) the Preferred Stock has been delivered to and paid for by the
Underwriter in accordance with the terms of the Underwriting Agreement, (v) the
Pricing Committee of the Board of Directors of the Fund (the "Board") has
determined certain of the terms, rights and preferences of the Preferred Stock
pursuant to authority delegated to it by the Board and (vi) the Articles
Supplementary relating to the Preferred Stock have been filed with the State
Department of Assessments and Taxation of Maryland, the issuance and sale of the
Preferred Stock will have been duly authorized by the Fund, and the Preferred
Stock will be validly issued, fully paid and nonassessable.

      We hereby consent to the filing of this opinion with the U.S. Securities
and Exchange Commission as an exhibit to the Registration Statement. We also
consent to the reference to our firm in the Registration Statement.

                                                Very truly yours,

                                                /s/ MAYER, BROWN, ROWE & MAW LLP

LRH/JRS
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2L(2)
<SEQUENCE>11
<FILENAME>c40133_ex-l2.txt
<TEXT>

                                                                     Exhibit L.2

                                              DLA PIPER RUDNICK GRAY CARY US LLP
                                              The Marbury Building
                                              6225 Smith Avenue
                                              Baltimore, Maryland 21209-3600
                                              T 410.580.3000
                                              F 410.580.3001
                                              W www.dlapiper.com

                                 March 22, 2006

DNP SELECT INCOME FUND INC.
55 East Monroe Street
Chicago, Illinois 60603

      Re:   REGISTRATION STATEMENT ON FORM N-2 (FILE NOS. 333-130590 AND
            811-04915)

Ladies and Gentlemen:

      We serve as special Maryland counsel to DNP Select Income Fund Inc., a
Maryland corporation (the "COMPANY"), in connection with the Company's
above-referenced Registration Statement on Form N-2 (the "REGISTRATION
STATEMENT") filed with the Securities and Exchange Commission (the "COMMISSION")
under the Securities Act of 1933, as amended (the "ACT"), relating to the sale
and issuance of 4,000 shares of Series M Auction Preferred Stock, $.001 par
value per share, 4,000 shares of Series W Auction Preferred Stock, $.001 par
value per share, and 4,000 shares of Series F Auction Preferred Stock, $.001 par
value per share, of the Company (collectively, the "SHARES"), each with a
liquidation preference of $25,000 per share, as described in the Registration
Statement. This opinion is being provided at your request in connection with the
filing of the Registration Statement.

      In connection with our representation of the Company, and as a basis for
the opinion hereinafter set forth, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents (collectively, the "DOCUMENTS"):

      1.    The Registration Statement, in the form in which it was transmitted
to the Commission under the Act;

SERVING CLIENTS GLOBALLY

<PAGE>

                                                     DNP SELECT INCOME FUND INC.
                                                                  March 22, 2006
                                                                          Page 2

      2.    The form of Articles Supplementary relating to the Shares (the
"ARTICLES SUPPLEMENTARY"), certified as of the date hereof by the Secretary of
the Company;

      3.    The charter of the Company (the "CHARTER"), certified as of a recent
date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");

      4.    The Bylaws of the Company, certified as of the date hereof by the
Secretary of the Company;

      5.    Resolutions adopted by the Board of Directors of the Company (the
"RESOLUTIONS") relating to the registration, sale and issuance of the Shares,
certified as of the date hereof by the Secretary of the Company;

      6.    A short-form certificate of the SDAT as to the good standing of the
Company, dated as of the date hereof; and

      7.    A certificate (the "SECRETARY'S CERTIFICATE") executed by T. Brooks
Beittel, the Secretary of the Company, dated as of the date hereof.

      In expressing the opinion set forth below, we have assumed the following:

      1.    Each individual executing any of the Documents, whether on behalf of
such individual or another person, is legally competent to do so.

      2.    Each individual executing any of the Documents on behalf of a party
(other than the Company) is duly authorized to do so.

      3.    Each of the parties (other than the Company) executing any of the
Documents has duly and validly executed and delivered each of the Documents to
which such party is a signatory, and such party's obligations set forth therein
are legal, valid and binding.

      4.    All Documents submitted to us as originals are authentic. All
Documents submitted to us as certified or photostatic copies conform to the
original documents. All signatures on all such Documents are genuine. All public
records reviewed or relied upon by us or on our behalf are true and complete.
All statements and information contained in the Documents are true and complete.
There has been no oral or written modification or amendment to the Documents, or
waiver of any provision of the Documents, by action or omission of the parties
or otherwise.

<PAGE>

                                                     DNP SELECT INCOME FUND INC.
                                                                  March 22, 2006
                                                                          Page 3

      5.    The pricing committee established by the Board of Directors in the
Resolutions will adopt resolutions (the "PRICING RESOLUTIONS") approving the
Articles Supplementary and authorizing the issuance of the Shares within the
limits set forth in the Resolutions.

      6.    Articles Supplementary in all material respects identical to the
form included as an exhibit to the Secretary's Certificate will be executed by
the appropriate officers of the Company and filed with and accepted for record
by the SDAT prior to the issuance of the Shares.

      7.    The final versions of all Documents will conform in all material
respects to the versions thereof submitted to us in draft form.

      Based upon the foregoing, and subject to the assumptions, limitations and
qualifications stated herein, it is our opinion that:

      1.    The Company is a corporation duly incorporated and existing under
and by virtue of the laws of the State of Maryland and is in good standing with
the SDAT.

      2.    The Shares have been duly authorized and will be validly issued,
fully paid and non-assessable upon issuance and delivery in exchange for the
consideration described in the Resolutions, the Pricing Resolutions and the
Registration Statement.

      The foregoing opinion is limited to the substantive laws of the State of
Maryland and we do not express any opinion herein concerning any other law. We
express no opinion as to compliance with the securities (or "blue sky") laws of
the State of Maryland. The opinion expressed herein is subject to the effect of
judicial decisions which may permit the introduction of parol evidence to modify
the terms or the interpretation of agreements.

      We assume no obligation to supplement this opinion if any applicable law
changes after the date hereof or if we become aware of any fact that might
change the opinion expressed herein after the date hereof.

      This opinion is being furnished to you for submission to the Commission as
an exhibit to the Registration Statement.

      We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of the name of our firm therein under the
heading "Legal opinions". In giving this consent, we do not admit that we are
within the category of persons whose consent is required by Section 7 of the
Act.

<PAGE>

                                                     DNP SELECT INCOME FUND INC.
                                                                  March 22, 2006
                                                                          Page 4

                                          Very truly yours,

                                          /s/ DLA PIPER RUDNICK GRAY CARY US LLP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2N
<SEQUENCE>12
<FILENAME>c40133_ex99n.htm
<TEXT>

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<P align="right">
<FONT face="serif">Exhibit n </FONT></P>
<P align="center">
<FONT face="serif">CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM </FONT></P>
<P align="justify">
<FONT face="serif">We consent to the reference to our firm under the captions &#147;Financial Highlights &#150; Selected Per Share Data and Ratios&#148;, &#147;Financial Highlights &#150; Information Regarding Senior Securities&#148; and
&#147;Experts&#148; and to the use of our report dated February 15, 2006 incorporated by reference in the Registration Statement (Form N-2) and related Prospectus and Statement of Additional Information of  DNP Select Income Fund Inc. filed with
the Securities and Exchange Commission in this Pre-Effective Amendment No. 1 to the Registration Statement under the Securities Act of 1933 (File No. 333-130590) and in this Amendment No. 49 to the Registration Statement under the Investment Company Act of 1940 (File No. 811-04915). </FONT></P>
<P align="right">
<FONT face="serif">/s/ ERNST &amp; YOUNG LLP </FONT></P>
<FONT face="serif">Chicago, Illinois </FONT><BR>
<FONT face="serif">March 17, 2006</FONT> <BR>

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