<DOCUMENT>
<TYPE>EX-99.2D
<SEQUENCE>3
<FILENAME>ex99-2di.txt
<DESCRIPTION>EXHIBIT 2(D)(I)
<TEXT>


<PAGE>


                         FORM OF ARTICLES SUPPLEMENTARY

               COHEN & STEERS REIT AND PREFERRED INCOME FUND, INC.

            Articles Supplementary Creating And Fixing The Rights of
               Series TH28 Taxable Auction Market Preferred Shares

         Cohen & Steers REIT and Preferred Income Fund, Inc., a Maryland
corporation having its principal office in the City of Baltimore in the State of
Maryland (the "Corporation"), certifies to the State Department of Assessments
and Taxation of Maryland that:

         First: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Article FIFTH of its Articles of Incorporation, as amended
and supplemented, (which as hereafter amended, restated and supplemented from
time to time, is together with these Articles Supplementary, the "Charter"), and
the Maryland General Corporation Law (the "MGCL"), the Board of Directors has
duly classified out of the Corporation's authorized and unissued common stock,
and authorized the creation and issuance of, 3,560 shares of the Corporation's
Taxable Auction Market Preferred Shares (par value $.001 per share) (the "AMPS")
and has further classified all of such shares as "Series TH28 AMPS," liquidation
preference $25,000 per share (herein referred to as the "Series").

         Second: Pursuant to Section 2-411 of the MGCL and authority granted by
Article III of the Corporation's By-laws, the Board of Directors of the
Corporation has appointed a pricing committee (the "Pricing Committee") and has
authorized such Pricing Committee to fix the terms of the Series, as set forth
herein.

         Third: The preferences, voting powers, restrictions, limitations as to
dividends, qualifications, and terms and conditions of redemption, of the Series
are as follows:

                                   DESIGNATION

         Series TH28 AMPS: A series of 3,560 AMPS, par value $.001 per share,
liquidation preference $25,000 per share, is hereby designated "Series TH28
Taxable Auction Market Preferred Shares". Each share of the Series may be issued
on a date to be determined by the Board of Directors of the Corporation or
pursuant to their delegated authority; have an initial dividend rate per annum,
initial Dividend Period and an initial Dividend Payment Date as will be
determined in advance of the issuance thereof by the Board of Directors of the
Corporation or pursuant to their delegated authority; and have such other
preferences, rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption, in addition to those
required by applicable law, or as are set forth in Part I and Part II of these
Articles Supplementary. The Series will constitute a separate series of AMPS of
the Corporation.

         Subject to the provisions of Section 11(b) of Part I hereof, the Board
of Directors of the Corporation may, in the future, reclassify additional shares
of the Corporation's unissued common stock as 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 dividend rate for its initial Dividend Period, its
initial





<PAGE>


Dividend Payment Date and any other changes in the terms herein set forth will
be as set forth in the Articles Supplementary with respect to the additional
shares.

         As used in Part I and Part II of these Articles Supplementary,
capitalized terms will have the meanings provided in Section 17 of Part I and
Section 1 of Part II of these Articles Supplementary.

                             Part I: Terms of AMPS

         1. Number of Shares; Ranking.

         (a) The initial number of authorized shares constituting the Series is
3,560 shares. No fractional shares of the Series will be issued.

         (b) Shares of the Series, which at any time have been redeemed or
purchased by the Corporation will, after such redemption or purchase, have the
status of authorized but unissued shares of preferred stock.

         (c) Shares of the Series will rank on a parity with shares of any other
series of preferred stock of the Corporation (including any other AMPS) as to
the payment of dividends to which such shares are entitled.

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

         2. Dividends.

         (a) The Holders of shares of the Series will be entitled to receive,
when, as and if declared by the Board of Directors, out of funds legally
available therefor, cumulative cash dividends on their shares at the Applicable
Rate, determined as set forth in paragraph (c) of this Section 2, and no more,
payable on the respective dates determined as set forth in paragraph (b) of this
Section 2. Dividends on the Outstanding shares of the Series issued on the Date
of Original Issue will accumulate from the Date of Original Issue.

         (b) (i) Dividends will be payable when, as and if declared by the Board
of Directors following the initial Dividend Payment Date, subject to
subparagraph (b)(ii) of this Section 2, on the shares of the Series, as follows:

                      (A) with respect to any Dividend Period of one year or
                 less, on the Business Day following the last day of such
                 Dividend Period; provided, however, if the Dividend Period is
                 more than 91 days then the first Business Day of each calendar
                 month within such period, and on the Business Day following the
                 last day of such Dividend Period; and



                                       2





<PAGE>


                      (B) with respect to any Dividend Period of more than one
                 year, on the first Business Day of each calendar month within
                 such Dividend Period and on the Business Day following the last
                 day of such Dividend Period.

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

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

             (iv) All moneys paid to the Paying Agent for the payment of
         dividends will be held in trust for the payment of such dividends by
         the Paying Agent for the benefit of the Holders specified in
         subparagraph (b)(v) of this Section 2. Any moneys paid to the Paying
         Agent in accordance with the foregoing but not applied by the Paying
         Agent to the payment of dividends will, upon request and to the extent
         permitted by law, be repaid to the Corporation at the end of 90 days
         from the date on which such moneys were to have been so applied.

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

         (c) (i) The dividend rate on Outstanding shares of the Series during
the period from and after the Date of Original Issue to and including the last
day of the initial Dividend Period therefor will be equal to the rate as
determined in the manner set forth under "Designation" above. For each
subsequent Dividend Period for the Series, the dividend rate will be equal to
the rate per annum that results from an Auction (but the rate set at the Auction
will not exceed the Maximum Rate); provided, however, that if an Auction for any
subsequent Dividend Period of the Series is not held for any reason or if
Sufficient Clearing Orders have not been made in an Auction (other than as a
result of all shares of the Series being the subject of Submitted Hold Orders
and other than in an Auction for a Special Dividend Period), then the dividend
rate on the shares of the Series for any such Dividend Period will be the
Maximum Rate (except (i) during a Default Period when the dividend rate will be
the Default Rate, as set forth in Section 2(c)(ii) below or (ii) after a Default
Period and prior to the beginning of the next Dividend Period when the dividend
rate will be the Maximum Rate at the close of business on the last day of such
Default Period). If the Corporation has declared a Special Dividend Period and
there are not Sufficient Clearing Orders, the dividend rate for the next rate
period will be the same as during the current rate period. If as a result of an
unforeseeable disruption of the financial markets, an



                                      3





<PAGE>


Auction cannot be held for a period of more than three Business Days, the
dividend rate for the Subsequent Dividend Period will be the same as the
dividend rate for the current Dividend Period.

             (ii) Subject to the cure provisions in Section 2(c)(iii) below, a
         "Default Period" with respect to the Series will commence on any date
         the Corporation fails to deposit irrevocably in trust in same-day
         funds, with the Paying Agent by 12:00 noon, New York City time, (A) the
         full amount of any declared dividend on the Series payable on the
         Dividend Payment Date (a "Dividend Default") or (B) the full amount of
         any redemption price (the "Redemption Price") payable on the date fixed
         for redemption (the "Redemption Date") (a "Redemption Default" and
         together with a Dividend Default, hereinafter referred to as
         "Default").

             Subject to the cure provisions of Section 2(c)(iii) below, a
         Default Period with respect to a Dividend Default or a Redemption
         Default will end on the Business Day on which, by 12:00 noon, New York
         City time, all unpaid dividends and any unpaid Redemption Price will
         have been deposited irrevocably in trust in same-day funds with the
         Paying Agent. In the case of a Dividend Default, the Applicable Rate
         for each Dividend Period commencing during a Default Period will be
         equal to the Default Rate, and each subsequent Dividend Period
         commencing after the beginning of a Default Period will be a Standard
         Dividend Period; provided, however, that the commencement of a Default
         Period will not by itself cause the commencement of a new Dividend
         Period. No Auction will be held during a Default Period.

             (iii) No Default Period with respect to a Dividend Default or
         Redemption Default will be deemed to commence if the amount of any
         dividend or any Redemption Price due (if such default is not solely due
         to the willful failure of the Corporation) is deposited irrevocably in
         trust, in same-day funds with the Paying Agent by 12:00 noon, New York
         City time within three Business Days after the applicable Dividend
         Payment Date or Redemption Date, together with an amount equal to the
         Default Rate applied to the amount of such non-payment based on the
         actual number of days comprising such period divided by 360 for the
         Series. The Default Rate will be equal to the Reference Rate multiplied
         by three (3).

             (iv) The amount of dividends per share payable (if declared) on
         each Dividend Payment Date of each Dividend Period (or in respect of
         dividends on another date in connection with a redemption during such
         Dividend Period) will be computed by multiplying the Applicable Rate
         (or the Default Rate) for such Dividend Period (or a portion thereof)
         by a fraction, the numerator of which will be the number of days in
         such Dividend Period (or portion thereof) that such share was
         Outstanding and for which the Applicable Rate or the Default Rate was
         applicable and the denominator of which will be 360 for the Series,
         multiplying the amount so obtained by $25,000, and rounding the amount
         so obtained to the nearest cent.

         (d) Any dividend payment made on shares of the Series will first be
credited against the earliest accumulated but unpaid dividends.



                                       4





<PAGE>


         (e) For so long as the shares of the Series are Outstanding, except as
otherwise contemplated by Part I of these Articles Supplementary, the
Corporation will 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 Shares or other
shares ranking junior to the Series as to dividends or upon liquidation) with
respect to Common Shares or any other capital stock of the Corporation ranking
junior to the Series as to dividends or upon liquidation, or call for
redemption, redeem, purchase or otherwise acquire for consideration any Common
Shares or other capital stock ranking junior to the Series (except by conversion
into or exchange for shares of the Corporation ranking junior to the Series as
to dividends and upon liquidation), unless (i) immediately after such
transaction, the Corporation would have Eligible Assets with an aggregate
Discounted Value at least equal to the Preferred Shares Basic Maintenance Amount
and the 1940 Act Preferred Shares Asset Coverage would be achieved, (ii) all
cumulative and unpaid dividends due on or prior to the date of the transaction
have been declared and paid in full with respect to the Corporation's preferred
stock, including the Series, or will have been declared and sufficient funds for
the payment thereof deposited with the Auction Agent, and (iii) the Corporation
has redeemed the full number of shares of preferred stock required to be
redeemed by any mandatory provision for redemption including the Series required
to be redeemed by any provision for mandatory redemption contained in Section
3(a)(ii) of Part I of these Articles Supplementary.

         (f) The Series will rank on a parity with all other series of
Outstanding AMPS. For so long as shares of the Series are Outstanding, except as
set forth in the next sentence, the Corporation will not declare, pay or set
apart for payment on any series of stock of the Corporation ranking, as to the
payment of dividends, on a parity with the Series for any period unless full
cumulative dividends have been or contemporaneously are declared and paid on the
Series through their most recent Dividend Payment Date. When dividends are not
paid in full upon the Series through its most recent Dividend Payment Dates or
upon any other series of stock ranking on a parity as to the payment of
dividends with the Series through its most recent respective Dividend Payment
Dates, all dividends declared upon the Series and any other such series of stock
ranking on a parity as to the payment of dividends with the Series will be
declared pro rata so that the amount of dividends declared per share on the
Series and such other series of preferred stock ranking on a parity therewith
will in all cases bear to each other the same ratio that accumulated dividends
per share on the Series and such other series of preferred stock ranking on a
parity therewith bear to each other.

         3. Redemption.

         (a) (i) After the initial Dividend Period, subject to the provisions of
this Section 3 and to the extent permitted under the 1940 Act and Maryland law,
the Corporation may, at its option, redeem in whole or in part out of funds
legally available therefor shares of the Series herein designated as (A) having
a Dividend Period of one year or less, on the Business Day after the last day of
such Dividend Period by delivering a notice of redemption not less than 15
calendar days and not more than 40 calendar days prior to the Redemption Date,
at a redemption price per share equal to $25,000, plus an amount equal to
accumulated but unpaid dividends thereon (whether or not earned or declared) to
the Redemption Date ("Redemption Price"), or (B) having a Dividend Period of
more than one year, on any Business Day prior to the end of the relevant
Dividend Period by delivering a notice of redemption not less than 15 calendar
days and not



                                       5





<PAGE>


more than 40 calendar days prior to the Redemption Date, at the Redemption
Price, plus a redemption premium, if any, determined by the Board of Directors
after consultation with the Broker-Dealers and set forth in any applicable
Specific Redemption Provisions at the time of the designation of such Dividend
Period as set forth in Section 4 of Part I of these Articles Supplementary;
provided, however, that during a Dividend Period of more than one year, no
shares of the Series will be subject to optional redemption except in accordance
with any Specific Redemption Provisions approved by the Board of Directors after
consultation with the Broker-Dealers at the time of the designation of such
Dividend Period. Notwithstanding the foregoing, the Corporation will not give a
notice of or effect any redemption pursuant to this Section 3(a)(i) unless, on
the date on which the Corporation gives such notice and on the Redemption Date,
(a) the Corporation has available Deposit Securities with maturity 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 by reason of the redemption of the Series on the
Redemption Date and (b) the Corporation would have Eligible Assets with an
aggregate Discounted Value at least equal to the Preferred Shares Basic
Maintenance Amount immediately subsequent to such redemption, if such redemption
were to occur on such date, it being understood that the provisions of paragraph
(d) of this Section 3 will be applicable in such circumstances in the event the
Corporation makes the deposit and takes the other action required thereby.

             (ii) If the Corporation fails as of any Valuation Date to meet the
         Preferred Shares Basic Maintenance Amount Test or, as of the last
         Business Day of any month, the 1940 Act Preferred Shares Asset
         Coverage, and such failure is not cured within ten Business Days
         following the relevant Valuation Date, in the case of a failure to meet
         the Preferred Shares Basic Maintenance Amount Test, or the last
         Business Day of the following month in the case of a failure to meet
         the 1940 Act Preferred Shares Asset Coverage (each an "Asset Coverage
         Cure Date"), the Series will be subject to mandatory redemption out of
         funds legally available therefor. The number of shares of the Series to
         be redeemed in such circumstances will be equal to the lesser of (A)
         the minimum number of shares of the Series the redemption of which, if
         deemed to have occurred immediately prior to the opening of business on
         the relevant Asset Coverage Cure Date, would result in the Corporation
         meeting the Preferred Shares Basic Maintenance Amount Test, and the
         1940 Act Preferred Shares Asset Coverage, as the case may be, in either
         case as of the relevant Asset Coverage Cure Date (provided that, if
         there is no such minimum number of shares the redemption of which would
         have such result, all shares of the Series then Outstanding will be
         redeemed) and (B) the maximum number of shares of the Series that can
         be redeemed out of funds expected to be available therefor on the
         Mandatory Redemption Date at the Mandatory Redemption Price set forth
         in subparagraph (a)(iii) of this Section 3.

             (iii) In determining the shares of the Series required to be
         redeemed in accordance with the foregoing Section 3(a)(ii), the
         Corporation will allocate the number of shares required to be redeemed
         to satisfy the Preferred Shares Basic Maintenance Amount Test or the
         1940 Act Preferred Shares Asset Coverage, as the case may be, pro rata
         or among the Holders of the Series in proportion to the number of
         shares they hold and shares of other preferred stock subject to
         mandatory redemption provisions similar to those contained in this
         Section 3, subject to the further provisions of this subparagraph


                                       6





<PAGE>


         (iii). The Corporation will effect any required mandatory redemption
         pursuant to: (A) the Preferred Shares Basic Maintenance Amount Test, as
         described in subparagraph (a)(ii) of this Section 3, no later than 30
         days after the Corporation last met the Preferred Shares Basic
         Maintenance Amount Test, or (B) the 1940 Act Preferred Shares Asset
         Coverage, as described in subparagraph (a)(ii) of this Section 3, no
         later than 30 days after the Asset Coverage Cure Date (the "Mandatory
         Redemption Date"), except that if the Corporation does not have funds
         legally available for the redemption of, or is not otherwise legally
         permitted to redeem, the number of shares of the Series which would be
         required to be redeemed by the Corporation under clause (A) of
         subparagraph (a)(ii) of this Section 3 if sufficient funds were
         available, together with shares of other preferred stock which are
         subject to mandatory redemption under provisions similar to those
         contained in this Section 3, or the Corporation otherwise is unable to
         effect such redemption on or prior to such Mandatory Redemption Date,
         the Corporation will redeem those shares of the Series, and shares of
         other preferred stock which it was unable to redeem, on the earliest
         practicable date on which the Corporation will have such funds
         available, upon notice pursuant to Section 3(b) to record owners of the
         shares of the Series to be redeemed and the Paying Agent. The
         Corporation will deposit with the Paying Agent funds sufficient to
         redeem the specified number of shares of the Series with respect to a
         redemption required under subparagraph (a)(ii) of this Section 3, by
         1:00 P.M., New York City time, of the Business Day immediately
         preceding the Mandatory Redemption Date. If fewer than all of the
         Outstanding shares of the Series are to be redeemed pursuant to this
         Section 3(a)(iii), the number of shares to be redeemed will be redeemed
         pro rata from the Holders of such shares in proportion to the number of
         shares of the Series held by such Holders, by lot or by such other
         method as the Corporation will deem fair and equitable, subject,
         however, to the terms of any applicable Specific Redemption Provisions.
         "Mandatory Redemption Price" means the Redemption Price plus (in the
         case of a Dividend Period of one year or more only) a redemption
         premium, if any, determined by the Board of Directors after
         consultation with the Broker-Dealers and set forth in any applicable
         Specific Redemption Provisions.

         (b) In the event of a redemption pursuant to the foregoing Section
3(a), the Corporation will file a notice of its intention to redeem with the
Securities and Exchange Commission so as to provide at least the minimum notice
required under Rule 23c-2 under the 1940 Act or any successor provision. In
addition, the Corporation will deliver a notice of redemption to the Auction
Agent and Rating Agencies (the "Notice of Redemption") containing the
information set forth below (i) in the case of an optional redemption pursuant
to Section 3(a)(i) above, one Business Day prior to the giving of notice to the
Holders, (ii) in the case of a mandatory redemption pursuant to Section 3(a)(ii)
above, on or prior to the 10th day preceding the Mandatory Redemption Date. Only
with respect to shares held by the Securities Depository, the Auction Agent will
use its reasonable efforts to provide telephonic notice to each Holder of shares
of the Series called for redemption not later than the close of business on the
Business Day immediately following the day on which the Auction Agent determines
the shares to be redeemed (or, during a Default Period with respect to such
shares, not later than the close of business on the Business Day immediately
following the day on which the Auction Agent receives Notice of Redemption from
the Corporation). The Auction Agent will confirm such telephonic notice in
writing not later than the close of business on the third Business Day preceding
the date fixed for redemption by providing the Notice of Redemption to each
Holder



                                       7





<PAGE>


of shares called for redemption, the Paying Agent (if different from the Auction
Agent) and the Securities Depository. Notice of Redemption will be addressed to
the registered owners of shares of the Series at their addresses appearing on
the share records of the Corporation. Such Notice of Redemption will set forth
(i) the date fixed for redemption, (ii) the number and identity of shares of the
Series to be redeemed, (iii) the redemption price (specifying the amount of
accumulated dividends to be included therein), (iv) that dividends on the shares
to be redeemed will cease to accumulate on such date fixed for redemption, and
(v) the provision under which redemption will be made. No defect in the Notice
of Redemption or in the transmittal or mailing thereof will affect the validity
of the redemption proceedings, except as required by applicable law. If fewer
than all shares held by any Holder are to be redeemed, the Notice of Redemption
mailed to such Holder will also specify the number of shares to be redeemed from
such Holder.

         (c) Notwithstanding the provisions of paragraph (a) of this Section 3,
no preferred stock, including the Series, may be redeemed at the option of the
Corporation unless all dividends in arrears on the Outstanding shares of the
Series and any other preferred stock have been or are being contemporaneously
paid or set aside for payment; provided, however, that the foregoing will not
prevent the purchase or acquisition of outstanding shares of preferred stock
pursuant to the successful completion of an otherwise lawful purchase or
exchange offer made on the same terms to holders of all outstanding shares of
preferred stock.

         (d) Upon the deposit of funds sufficient to redeem shares of the Series
with the Paying Agent and the giving of the Notice of Redemption to the Auction
Agent under paragraph (b) of this Section 3, dividends on such shares will cease
to accumulate and such shares will no longer be deemed to be Outstanding for any
purpose (including, without limitation, for purposes of calculating whether the
Corporation has met the Preferred Shares Basic Maintenance Amount Test or the
1940 Act Preferred Shares Asset Coverage), and all rights of the Holders of the
shares so called for redemption will cease and terminate, except the right of
such Holder to receive the redemption price specified herein, but without any
interest or other additional amount. Such redemption price will be paid by the
Paying Agent to the nominee of the Securities Depository. The Corporation will
be entitled to receive from the Paying Agent, promptly after the date fixed for
redemption, any cash deposited with the Paying Agent in excess of (i) the
aggregate redemption price of the shares of the Series called for redemption on
such date and (ii) such other amounts, if any, to which Holders of shares of the
Series called for redemption may be entitled. Any funds so deposited that are
unclaimed at the end of two years from such redemption date will, to the extent
permitted by law, be paid to the Corporation, after which time the Holders of
shares of the Series so called for redemption may look only to the Corporation
for payment of the redemption price and all other amounts, if any, to which they
may be entitled; provided, however, that the Paying Agent will notify all
Holders whose funds are unclaimed by placing a notice in The Wall Street Journal
concerning the availability of such funds once each week for three consecutive
weeks. The Corporation will be entitled to receive, from time to time after the
date fixed for redemption, any interest earned on the funds so deposited.

         (e) To the extent that any redemption for which Notice of Redemption
has been given is not made by reason of the absence of legally available funds
therefor, or is otherwise prohibited, such redemption will be made as soon as
practicable to the extent such funds become legally available or such redemption
is no longer otherwise prohibited. Failure to redeem shares of the Series will
be deemed to exist at any time after the date specified for redemption in a
Notice of



                                       8





<PAGE>


Redemption when the Corporation will have failed, for any reason whatsoever, to
deposit in trust with the Paying Agent the redemption price with respect to any
shares for which such Notice of Redemption has been given. Notwithstanding the
fact that the Corporation may not have redeemed shares of the Series for which a
Notice of Redemption has been given, dividends may be declared and paid on
shares of the Series and will include those shares of the Series for which
Notice of Redemption has been given but for which deposit of funds has not been
made.

         (f) All moneys paid to the Paying Agent for payment of the redemption
price of shares of the Series called for redemption will be held in trust by the
Paying Agent for the benefit of holders of shares so to be redeemed.

         (g) So long as any shares of the Series are held of record by the
nominee of the Securities Depository, the redemption price for such shares will
be paid on the date fixed for redemption to the nominee of the Securities
Depository for distribution to Agent Members for distribution to the persons for
whom they are acting as agent.

         (h) Except for the provisions described above, nothing contained in
these Articles Supplementary limits any right of the Corporation to purchase or
otherwise acquire any shares of the Series outside of an Auction at any price,
whether higher or lower than the price that would be paid in connection with an
optional or mandatory redemption, so long as, at the time of any such purchase,
there is no arrearage in the payment of dividends on, or the mandatory or
optional redemption price with respect to, any shares of the Series for which
Notice of Redemption has been given and the Corporation meets the 1940 Act
Preferred Shares Asset Coverage and the Preferred Shares Basic Maintenance
Amount Test after giving effect to such purchase or acquisition on the date
thereof. Any shares which are purchased, redeemed or otherwise acquired by the
Corporation will have no voting rights. If fewer than all the Outstanding shares
of the Series are redeemed or otherwise acquired by the Corporation, the
Corporation will give notice of such transaction to the auction agent, in
accordance with the procedures agreed upon by the Board of Directors.

         (i) In the case of any redemption pursuant to this Section 3, only
whole shares of the Series will be redeemed, and in the event that any provision
of the Charter would require redemption of a fractional share, the Auction Agent
will be authorized to round up so that only whole shares are redeemed.

         (j) Notwithstanding anything herein to the contrary, including, without
limitation, Section 6(k) of Part I of these Articles Supplementary, the Board of
Directors, upon notification to each Rating Agency, may authorize, create or
issue other series of preferred stock, including other series of AMPS, ranking
on a parity with the Series with respect to the payment of dividends or the
distribution of assets upon dissolution, liquidation or winding up of the
affairs of the Corporation, to the extent permitted by the 1940 Act, if upon
issuance of any such series, either (A) the net proceeds from the sale of such
stock (or such portion thereof needed to redeem or repurchase the Outstanding
Series) are deposited with the Paying Agent in accordance with Section 3(d) of
Part I of these Articles Supplementary, Notice of Redemption as contemplated by
Section 3(b) of Part I of these Articles Supplementary has been delivered prior
thereto or is sent promptly thereafter, and such proceeds are used to redeem all
Outstanding shares of the Series or (B) the Corporation would meet the 1940 Act
Preferred Shares Asset Coverage, the Preferred



                                       9





<PAGE>


Shares Basic Maintenance Amount Test and the requirements of Section 12(b) of
Part I of these Articles Supplementary.

         4. Designation of Dividend Period.

         (a) The initial Dividend Period for the Series will be as determined in
the manner set forth under "Designation" above. The Corporation will designate
the duration of subsequent Dividend Periods of the Series; provided, however,
that no such designation is necessary for a Standard Dividend Period and,
provided further, that any designation of a Special Dividend Period will be
effective only if (i) notice thereof will have been given as provided herein,
(ii) any failure to pay in a timely manner to the Auction Agent the full amount
of any dividend on, or the redemption price of, the Series will have been cured
as provided above, (iii) Sufficient Clearing Orders will have existed in an
Auction held on the Auction Date immediately preceding the first day of such
proposed Special Dividend Period, (iv) if the Corporation will have mailed a
Notice of Redemption with respect to any shares, the redemption price with
respect to such shares will have been deposited with the Paying Agent, (v) in
the case of the designation of a Special Dividend Period, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, or any successor Broker-Dealer designated by the
Corporation, will have notified the Corporation in writing that it does not
object to the designation of such Special Dividend Period and (vi) each Rating
Agency will have confirmed in writing to the Corporation that such designation
will not adversely affect their respective then-current ratings of the Series.

         (b) If the Corporation proposes to designate any Special Dividend
Period, not fewer than seven Business Days (or two Business Days in the event
the duration of the Dividend Period prior to such Special Dividend Period is
fewer than eight days) nor more than 30 Business Days prior to the first day of
such Special Dividend Period, notice will be (i) made by press release and (ii)
communicated by the Corporation by telephonic or other means to the Auction
Agent and each Broker-Dealer and confirmed in writing promptly thereafter. Each
such notice will state (A) that the Corporation proposes to exercise its option
to designate a succeeding Special Dividend Period, specifying the first and last
days thereof and the Maximum Rate for such Special Dividend Period and (B) that
the Corporation will by 3:00 P.M., New York City time, on the second Business
Day next preceding the first day of such Special Dividend Period, notify the
Auction Agent, who will promptly notify the Broker-Dealers, of either (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 will be a Standard Dividend Period.
No later than 3:00 P.M., New York City time, on the second Business Day next
preceding the first day of any proposed Special Dividend Period, the Corporation
will deliver to the Auction Agent, who will promptly deliver to the
Broker-Dealers and Existing Holders, either:

             (i) a notice stating (A) that the Corporation 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 Corporation has determined not to
         exercise its option to designate a Special Dividend Period.



                                       10





<PAGE>


         If the Corporation fails to deliver either such notice with respect to
any designation of any proposed Special Dividend Period to the Auction Agent or
is unable to make the confirmation provided in clause (v) of paragraph (a) of
this Section 4 by 3:00 P.M., New York City time, on the second Business Day next
preceding the first day of such proposed Special Dividend Period, the
Corporation will 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 Standard Dividend Period.

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

         6. Voting Rights.

         (a) Except as otherwise provided in the Charter or as otherwise
required by applicable law, (i) each Holder of shares of the Series will be
entitled to one vote for each share of the Series held on each matter on which
the Holders of the Series are entitled to vote, and (ii) the holders of the
Outstanding shares of preferred stock, including the Series, and holders of
shares of Common Shares will vote together as a single class on all matters
submitted to the stockholders; provided, however, that, with respect to the
election of directors, the holders of the Outstanding shares of preferred stock,
including the Series, will be entitled, as a class, to the exclusion of the
holders of all other securities and classes of capital stock, including the
Common Shares, to elect two directors of the Corporation, each share of
preferred stock, including the Series, entitling the holder thereof to one vote.
The identities of the nominees of such directorships may be fixed by the Board
of Directors. Subject to paragraph (b) of this Section 6, the holders of
outstanding shares of Common Shares and outstanding shares of preferred stock,
including the Series, voting together as a single class, will be entitled to
elect the balance of the directors.

         (b) If at any time dividends on the Series will be unpaid in an amount
equal to two full years' dividends on the Series (a "Voting Period"), the number
of directors constituting the Board of Directors will be automatically increased
by the smallest number of additional directors that, when added to the number of
directors then constituting the Board of Directors, will (together with the two
directors elected by the holders of preferred stock, including the Series,
pursuant to paragraph (a) of this Section 6) constitute a majority of such
increased number, and the holders of any shares of preferred stock, including
the Series, will be entitled, voting as a single class on a one-vote-per-share
basis (to the exclusion of the holders of all other securities and classes of
capital stock of the Corporation), to elect the smallest number of such
additional directors of the Corporation that will constitute a majority of the
total number of directors of the Corporation so increased. The Voting Period and
the voting rights so created upon the



                                       11





<PAGE>


occurrence of the conditions set forth in this paragraph (b) of Section 6 will
continue unless and until all dividends in arrears on the Series will have been
paid or declared and sufficient cash or specified securities are set apart for
the payment of such dividends. Upon the termination of a Voting Period, the
voting rights described in this paragraph (b) of Section 6 will cease, subject
always, however, to the revesting of such voting rights in the holders of
preferred stock, including the Series, upon the further occurrence of any of the
events described in this paragraph (b) of Section 6.

         (c) As soon as practicable after the accrual of any right of the
holders of shares of preferred stock, including the Series, to elect additional
directors as described in paragraph (b) of this Section 6, the Corporation will
notify the Auction Agent, and the Auction Agent will 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 ten nor more than 90 days after the date of
mailing of such notice. If the Corporation 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 will 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
preferred stock, including the Series, 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 capital stock of
the Corporation), will be entitled to elect the number of directors prescribed
in paragraph (b) of this Section 6 on a one-vote-per-share basis. At any such
meeting or adjournment thereof in the absence of a quorum, a majority of the
holders of shares of preferred stock, including Holders of the Series, present
in person or by proxy will have the power to adjourn the meeting without notice,
other than an announcement at the meeting, until a quorum is present.

         (d) For purposes of determining any rights of the holders of the shares
of preferred stock, including the Series, to vote on any matter, whether such
right is created by these Articles Supplementary, by statute or otherwise, if
redemption of some or all of the shares of preferred stock, including the
Series, is required, no holder of shares of preferred stock, including the
Series, will be entitled to vote and no share of preferred stock, including the
Series, will be deemed to be "outstanding" for the purpose of voting or
determining the number of shares required to constitute a quorum, if prior to or
concurrently with the time of determination, sufficient Deposit Securities for
the redemption of such shares have been deposited in the case of the Series in
trust with the Paying Agent for that purpose and the requisite Notice of
Redemption with respect to such shares will have been given as provided in
Section 3(b) of Part I of these Articles Supplementary and in the case of other
preferred stock the Corporation has otherwise met the conditions for redemption
applicable to such shares.

         (e) The terms of office of all persons who are directors of the
Corporation at the time of a special meeting of Holders of the Series and
holders of other shares of preferred stock to elect directors pursuant to
paragraph (b) of this Section 6 will continue, notwithstanding the election at
such meeting by the holders of the number of directors that they are entitled to
elect.

         (f) Simultaneously with the termination of a Voting Period, the terms
of office of the additional directors elected by the Holders of the Series and
holders of shares of other preferred



                                       12





<PAGE>


stock pursuant to paragraph (b) of this Section 6 will terminate, the remaining
directors will constitute the directors of the Corporation and the voting rights
of such holders to elect additional directors pursuant to paragraph (b) of this
Section 6 will cease, subject to the provisions of the last sentence of
paragraph (b) of this Section 6.

         (g) Unless otherwise required by law or in the Corporation's Charter,
the Holders of the Series will not have any relative rights or preferences or
other special rights other than those specifically set forth herein. In the
event that the Corporation fails to pay any dividends on the Series of the
Corporation or fails to redeem any shares of the Series which it is required to
redeem, or any other event occurs which requires the mandatory redemption of the
Series and the required Notice of Redemption has not been given, other than the
rights set forth in paragraph (a) of Section 3 of Part I of these Articles
Supplementary, the exclusive remedy of the Holders of the Series will be the
right to vote for directors pursuant to the provisions of paragraph (b) of this
Section 6. In no event will the Holders of the Series have any right to sue for,
or bring a proceeding with respect to, such dividends or redemptions or damages
for the failure to receive the same.

         (h) For so long as any shares of preferred stock, including the Series,
are outstanding, the Corporation will not, without the affirmative vote of the
Holders of a majority of the outstanding preferred stock, (i) institute any
proceedings to be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to bankruptcy or insolvency, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Corporation or a substantial part of its property, or
make any assignment for the benefit of creditors, or, except as may be required
by applicable law, admit in writing its inability to pay its debts generally as
they become due or take any corporate action in furtherance of any such action;
(ii) create, incur or suffer to exist, or agree to create, incur or suffer to
exist, or consent to cause or permit in the future (upon the happening of a
contingency or otherwise) the creation, incurrence or existence of any material
lien, mortgage, pledge, charge, security interest, security agreement,
conditional sale or trust receipt or other material encumbrance of any kind upon
any of the Corporation's assets as a whole, except (A) liens the validity of
which are being contested in good faith by appropriate proceedings, (B) liens
for taxes that are not then due and payable or that can be paid thereafter
without penalty, (C) liens, pledges, charges, security interests, security
agreements or other encumbrances arising in connection with any indebtedness
senior to the Series, (D) liens, pledges, charges, security interests, security
agreements or other encumbrances arising in connection with any indebtedness
permitted under clause (iii) below and (E) liens to secure payment for services
rendered including, without limitation, services rendered by the Corporation's
Paying Agent and the Auction Agent; or (iii) create, authorize, issue, incur or
suffer to exist any indebtedness for borrowed money or any direct or indirect
guarantee of such indebtedness for borrowed money or any direct or indirect
guarantee of such indebtedness, except the Corporation may borrow as may be
permitted by the Corporation's investment restrictions; provided, however, that
transfers of assets by the Corporation subject to an obligation to repurchase
will not be deemed to be indebtedness for purposes of this provision to the
extent that after any such transaction the Corporation has Eligible Assets with
an aggregate Discounted Value at least equal to the Preferred Shares Basic
Maintenance Amount as of the immediately preceding Valuation Date.



                                       13





<PAGE>


         (i) The affirmative vote of the holders of a majority, as defined in
the 1940 Act, of the outstanding shares of preferred stock, including the
Series, voting together as a separate class, will be required to approve any
plan of reorganization (as such term is used in the 1940 Act) adversely
affecting such shares or any action requiring a vote of security holders of the
Corporation under Section 13(a) of the 1940 Act. In the event a vote of holders
of shares of preferred stock is required pursuant to the provisions of Section
13(a) of the 1940 Act, the Corporation will, not later than ten Business Days
prior to the date on which such vote is to be taken, notify each Rating Agency
that such vote is to be taken and the nature of the action with respect to which
such vote is to be taken and will, not later than ten Business Days after the
date on which such vote is taken, notify each Rating Agency of the results of
such vote.

         (j) The affirmative vote of the Holders of a majority, as defined in
the 1940 Act, of the outstanding shares of preferred stock of any series, voting
separately from any other series, will be required with respect to any matter
that materially and adversely affects the rights, preferences, or powers of that
series in a manner different from that of other series or classes of the
Corporation's shares of capital stock. For purposes of the foregoing, no matter
will be deemed to adversely affect any rights, preference or power unless such
matter (i) alters or abolishes any preferential right of such series; (ii)
creates, alters or abolishes any right in respect of redemption of such series;
or (iii) creates or alters (other than to abolish) any restriction on transfer
applicable to such series. The vote of holders of any series described in this
Section (j) will in each case be in addition to a separate vote of the requisite
percentage of Common Shares and/or preferred stock necessary to authorize the
action in question.

         (k) The Board of Directors, without the vote or consent of any holder
of shares of preferred stock, including the Series, or any other stockholder of
the Corporation, may from time to time amend, alter or repeal any or all of the
definitions contained herein, add covenants and other obligations of the
Corporation, or confirm the applicability of covenants and other obligations set
forth herein, all in connection with obtaining or maintaining the rating of any
Rating Agency with respect to the Series, and any such amendment, alteration or
repeal will not be deemed to affect the preferences, rights or powers of the
Series or the Holders thereof, provided that the Board of Directors receives
written confirmation from each relevant Rating Agency (with such confirmation in
no event being required to be obtained from a particular Rating Agency with
respect to definitions or other provisions relevant only to and adopted in
connection with another Rating Agency's rating of the Series) that any such
amendment, alteration or repeal would not adversely affect the rating then
assigned by such Rating Agency.

         In addition, subject to compliance with applicable law, the Board of
Directors may amend the definition of Maximum Rate to increase the percentage
amount by which the Reference Rate is multiplied or the percentage spread added
to the Reference Rate to determine the Maximum Rate shown therein without the
vote or consent of the holders of shares of preferred stock, including the
Series, or any other stockholder of the Corporation, but only with confirmation
from each Rating Agency, and after consultation with the Broker-Dealers,
provided that immediately following any such increase the Corporation would meet
the Preferred Shares Basic Maintenance Amount Test.



                                       14





<PAGE>


         7. Liquidation Rights.

         (a) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders of
shares of preferred stock, including the Series, will be entitled to receive out
of the assets of the Corporation available for distribution to stockholders,
after claims of creditors but before distribution or payment will be made in
respect of the Common Shares or to any other shares of stock of the Corporation
ranking junior to the preferred stock, as to liquidation payments, a liquidation
distribution in the amount of $25,000 per share (the "Liquidation Preference"),
plus an amount equal to all unpaid dividends accrued to and including the date
fixed for such distribution or payment (whether or not declared by the Board of
Directors, but excluding interest thereon), but such Holders will be entitled to
no further participation in any distribution or payment in connection with any
such liquidation, dissolution or winding up. The Series will rank on a parity
with shares of any other series of preferred stock of the Corporation as to the
distribution of assets upon dissolution, liquidation or winding up of the
affairs of the Corporation.

         (b) If, upon any such liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the assets of the
Corporation available for distribution among the holders of all outstanding
shares of preferred stock, including the Series, will be insufficient to permit
the payment in full to such holders of the amounts to which they are entitled,
then such available assets will be distributed among the holders of all
outstanding shares of preferred stock, including the Series, ratably in any such
distribution of assets according to the respective amounts which would be
payable on all such shares if all amounts thereon were paid in full. Unless and
until payment in full has been made to the holders of all outstanding shares of
preferred stock, including the Series, of the liquidation distributions to which
they are entitled, no dividends or distributions will be made to holders of
Common Shares or any stock of the Corporation ranking junior to the preferred
stock as to liquidation.

         (c) Neither the consolidation nor merger of the Corporation with or
into any other entity or entities, nor the sale, lease, exchange or transfer by
the Corporation of all or substantially all of its property and assets, will be
deemed to be a liquidation, dissolution or winding up of the Corporation for
purposes of this Section 7.

         (d) After the payment to Holders of the Series of the full preferential
amounts provided for in this Section 7, the Holders of the Series as such will
have no right or claim to any of the remaining assets of the Corporation.

         (e) In the event the assets of the Corporation or proceeds thereof
available for distribution to the Holders of the Series, upon dissolution,
liquidation or winding up of the affairs of the Corporation, whether voluntary
or involuntary, will be insufficient to pay in full all amounts to which such
Holders are entitled pursuant to paragraph (a) of this Section 7, no such
distribution will be made on account of any shares of any other series of
preferred stock unless proportionate distributive amounts will be paid on
account of the Series, ratably, in proportion to the full distributable amounts
to which holders of all shares of preferred stock are entitled upon such
dissolution, liquidation or winding up.



                                       15





<PAGE>


         (f) Subject to the rights of the holders of shares of other preferred
stock or after payment will have been made in full to the Holders of the Series
as provided in paragraph (a) of this Section 7, but not prior thereto, any other
series or class of shares ranking junior to the Series with respect to the
distribution of assets upon dissolution, liquidation or winding up of the
affairs of the Corporation will, subject to any 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 the Series will not be entitled to
share therein.

         8. Auction Agent. For so long as any shares of the Series are
Outstanding, the Auction Agent, duly appointed by the Corporation to so act,
will be in each case a commercial bank, trust company or other financial
institution independent of the Corporation and its Affiliates (which, however,
may engage or have engaged in business transactions with the Corporation or its
Affiliates) and at no time will the Corporation or any of its Affiliates act as
the Auction Agent in connection with the Auction Procedures. If the Auction
Agent resigns or for any reason its appointment is terminated during any period
that any shares of the Series are Outstanding, the Corporation 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
Corporation may remove the auction agent provided that prior to such removal the
Corporation will have entered into such an agreement with a successor auction
agent.

         9. 1940 Act Preferred Shares Asset Coverage. The Corporation will
maintain, as of the last Business Day of each month in which any shares of the
Series are Outstanding, the 1940 Act Preferred Shares Asset Coverage; provided,
however, that Section 3(a)(ii) will be the sole remedy in the event the
Corporation fails to do so.

         10. Preferred Shares Basic Maintenance Amount. So long as any shares of
the Series are Outstanding and any Rating Agency so requires, the Corporation
will maintain, as of each Valuation Date, Moody's Eligible Assets and S&P
Eligible Assets, as applicable, having an aggregate Discounted Value equal to or
greater than the Preferred Shares Basic Maintenance Amount; provided, however,
that Section 3(a)(ii) will be the sole remedy in the event the Corporation fails
to do so.

         11. Certain Other Restrictions. So long as any shares of the Series are
Outstanding and S&P, Moody's or any Other Rating Agency that is rating such
shares so requires, the Corporation will not, unless it has received written
confirmation from S&P (if S&P is then rating the Series), Moody's (if Moody's is
then rating the Series) and (if applicable) such Other Rating Agency, that any
such action would not impair the rating then assigned by such Rating Agency to
the Series, engage in any one or more of the following transactions:

         (a) purchase or sell futures contracts or options thereon with respect
to portfolio securities or write put or call options on portfolio securities;

         (b) except in connection with a refinancing of the Series, issue
additional shares of any series of preferred stock, including the Series or
reissue any shares of preferred stock, including the Series previously purchased
or redeemed by the Corporation;

         (c) engage in any short sales of securities;



                                       16





<PAGE>


         (d) lend portfolio securities;

         (e) merge or consolidate into or with any other fund; or

         (f) for purposes of valuation of Moody's Eligible Assets: (A) if the
Corporation writes a call option, the underlying asset will be valued as
follows: (1) if the option is exchange-traded and may be offset readily or if
the option expires before the earliest possible redemption of the Series, at the
lower of the Discounted Value of the underlying security of the option and the
exercise price of the option or (2) otherwise, it has no value; (B) if the
Corporation writes a put option, the underlying asset will be valued as follows:
the lesser of (1) exercise price and (2) the Discounted Value of the underlying
security; and (C) call or put option contracts which the Corporation buys have
no value. For so long as the Series is rated by Moody's: (A) the Corporation
will not engage in options transactions for leveraging or speculative purposes;
(B) the Corporation will not write or sell any anticipatory contracts pursuant
to which the Corporation hedges the anticipated purchase of an asset prior to
completion of such purchase; (C) the Corporation will not enter into an option
transaction with respect to portfolio securities unless, after giving effect
thereto, the Corporation would continue to have Eligible Assets with an
aggregate Discounted Value equal to or greater than the Preferred Shares Basic
Maintenance Amount; (D) the Corporation will not enter into an option
transaction with respect to portfolio securities unless after giving effect to
such transaction the Corporation would continue to be in compliance with the
provisions relating to the Preferred Shares Basic Maintenance Amount; (E) for
purposes of the Preferred Shares Basic Maintenance Amount assets in margin
accounts are not Eligible Assets; (F) the Corporation will write only
exchange-traded options on exchanges approved by Moody's (if Moody's is then
rating the Series); (G) where delivery may be made to the Corporation with any
of a class of securities, the Corporation will assume for purposes of the
Preferred Shares Basic Maintenance Amount that it takes delivery of that
security which yields it the least value; (H) the Corporation will not engage in
forward contracts; and (I) there will be a quarterly audit made of the
Corporation's options transactions by the Corporation's independent auditors to
confirm that the Corporation is in compliance with these standards.

         (g) For so long as the Series is rated by S&P and Moody's, the
Corporation will not purchase or sell futures contracts, write, purchase or sell
options on futures contracts or write put options (except covered put options)
or call options (except covered call options) on portfolio securities unless it
receives written confirmation from S&P and Moody's that engaging in such
transactions will not impair the ratings then assigned to the Series by S&P and
Moody's.

         (h) Change the Pricing Service referred to in the definition of Market
Value.

         (i) Enter into reverse repurchase agreements.

         12. Compliance Procedures for Asset Maintenance Tests. For so long as
any shares of the Series are Outstanding and any Rating Agency so requires:

         (a) As of each Valuation Date, the Corporation will determine (i) the
Market Value of each Eligible Asset owned by the Corporation on that date, (ii)
the Discounted Value of each such Eligible Asset, (iii) whether the Preferred
Shares Basic Maintenance Amount Test is met as



                                       17





<PAGE>


of that date, (iv) the value (as used in the 1940 Act) of the total assets of
the Corporation, less all liabilities, and (v) whether the 1940 Act Preferred
Shares Asset Coverage is met as of that date.

         (b) Upon any failure to meet the Preferred Shares Basic Maintenance
Amount Test or 1940 Act Preferred Shares Asset Coverage on any Valuation Date,
the Corporation may use reasonable commercial efforts (including, without
limitation, altering the composition of its portfolio, purchasing shares of the
Series outside of an Auction or, in the event of a failure to file a certificate
on a timely basis, submitting the requisite certificate), to meet (or certify in
the case of a failure to file a certificate on a timely basis, as the case may
be) the Preferred Shares Basic Maintenance Amount Test or 1940 Act Preferred
Shares Asset Coverage on or prior to the Asset Coverage Cure Date.

         (c) Compliance with the Preferred Shares Basic Maintenance Amount and
1940 Act Asset Coverage Tests will be determined with reference to those shares
of the Series which are deemed to be Outstanding hereunder.

         (d) The Corporation will deliver to each Rating Agency a certificate
which sets forth a determination of items (i)-(iii) of paragraph (a) of this
Section 12 (a "Preferred Shares Basic Maintenance Certificate") as of (A) on or
before the 5th Business Day after the Date of Original Issue, (B) the last
Valuation Date of each month (such monthly report to include the net asset value
and trade price as of that date), (C) any date requested by any Rating Agency,
(D) a Business Day on or before any Asset Coverage Cure Date relating to the
Corporation's cure of a failure to meet the Preferred Shares Basic Maintenance
Amount Test, (E) any day that Common Shares or AMPS are redeemed and (F) any day
the S&P Eligible Assets have an aggregate discounted value less than or equal to
110% of the Preferred Shares Basic Maintenance Amount. Such Preferred Shares
Basic Maintenance Certificate will be delivered in the case of clause (i)(A) on
the Date of Original Issue and in the case of all other clauses above on or
before the seventh Business Day after the relevant Valuation Date or Asset
Coverage Cure Date.

         (e) The Corporation will deliver to each Rating Agency a certificate
which sets forth a determination of items (iv) and (v) of paragraph (a) of this
Section 12 (a "1940 Act Preferred Shares Asset Coverage Certificate") (i) as of
the Date of Original Issue, and (ii) as of (A) the last Valuation Date of each
quarter thereafter, and (B) as of a Business Day on or before any Asset Coverage
Cure Date relating to the failure to meet the 1940 Act Preferred Shares Asset
Coverage. Such 1940 Act Preferred Shares Asset Coverage Certificate will be
delivered in the case of clause (i) on the Date of Original Issue and in the
case of clause (ii) on or before the seventh Business Day after the relevant
Valuation Date or the Asset Coverage Cure Date. The certificates required by
paragraphs (d) and (e) of this Section 12 may be combined into a single
certificate.

         (f) Within fifteen Business Days of the Date of Original Issue and any
redemption of the Series, the Corporation will deliver to each Rating Agency a
letter prepared by the Corporation's independent auditors (an "Auditor's
Certificate") regarding the accuracy of the calculations made by the Corporation
in the Preferred Shares Basic Maintenance Certificate and the 1940 Act Preferred
Shares Asset Coverage Certificate required to be delivered by the Corporation on
the Date of Original Issue. Within fifteen Business Days after delivery of the
Preferred Shares Basic Maintenance Certificate and the 1940 Act Preferred Shares
Asset Coverage Certificate relating to



                                       18





<PAGE>


the last Valuation Date of each fiscal year of the Corporation, the Corporation
will deliver to the Auction Agent and each Rating Agency an Auditor's
Certificate regarding the accuracy of the calculations made by the Corporation
in a Preferred Shares Basic Maintenance Certificate with respect to a date
randomly selected by the Corporation's independent auditors during such fiscal
year. In addition, the Corporation will deliver to the persons specified in the
preceding sentence an Auditor's Certificate regarding the accuracy of the
calculations made by the Corporation on each Preferred Shares Basic Maintenance
Certificate and 1940 Act Preferred Shares Asset Coverage Certificate delivered
in relation to an Asset Coverage Cure Date within ten days after the relevant
Asset Coverage Cure Date. If an Auditor's Certificate shows that an error was
made in any such report, the calculation or determination made by the
Corporation's independent auditors will be conclusive and binding on the
Corporation.

         (g) The Auditor's Certificates referred to in paragraph (f) above will
confirm, based upon the independent auditor's review of portfolio data provided
by the Corporation, (i) the mathematical accuracy of the calculations reflected
in the related Preferred Shares Basic Maintenance Amount Certificates and 1940
Act Preferred Shares Asset Coverage Certificates and (ii) that, based upon such
calculations, the Corporation had, at such Valuation Date, met the Preferred
Shares Basic Maintenance Amount Test.

         (h) In the event that a Preferred Shares Basic Maintenance Certificate
or 1940 Act Preferred Shares Asset Coverage Certificate with respect to an
applicable Valuation Date is not delivered within the time periods specified in
this Section 12, the Corporation will be deemed to have failed to meet the
Preferred Shares Basic Maintenance Amount Test or the 1940 Act Preferred Shares
Asset Coverage, as the case may be, on such Valuation Date for purposes of
Section 12(b) of Part I of these Articles Supplementary. In the event that a
Preferred Shares Basic Maintenance Certificate, a 1940 Act Preferred Shares
Asset Coverage Certificate or an applicable Auditor's Certificate with respect
to an Asset Coverage Cure Date is not delivered within the time periods
specified herein, the Corporation will be deemed to have failed to meet the
Preferred Shares Basic Maintenance Amount Test or the 1940 Preferred Shares
Asset Coverage, as the case may be, as of the related Valuation Date.

         (i) The Corporation will provide S&P and Moody's with no less than 30
days' notification of: (i) any material changes to the Corporation's
organizational documents and material contracts, (ii) any redemptions, or (iii)
any failed Auctions.

         (j) The Corporation will provide to S&P and Moody's an audited
financial statement for its fiscal year.

         13. Notice. All notices or communications hereunder, unless otherwise
specified in these Articles Supplementary, will be sufficiently given if in
writing and delivered in person, by telecopier or mailed by first-class mail,
postage prepaid. Notices delivered pursuant to this Section 13 will be deemed
given on the earlier of the date received or the date five-days after which such
notice is mailed, except as otherwise provided in these Articles Supplementary
or by the MGCL for notices of stockholders' meetings.

         14. Waiver. To the extent permitted by Maryland Law, Holders of at
least two-thirds of the Outstanding shares of the Series may waive any provision
hereof intended for their benefit in



                                       19





<PAGE>


accordance with such procedures as may from time to time be established by the
Board of Directors.

         15. Termination. In the event that no shares of the Series are
Outstanding, all rights and preferences of such shares established and
designated hereunder will cease and terminate, and all obligations of the
Corporation under these Articles Supplementary will terminate.

         16. Amendment. Subject to the provisions of these Articles
Supplementary, the Board of Directors may, by resolution duly adopted without
stockholder approval (except as otherwise provided by these Articles
Supplementary or required by applicable law), amend these Articles Supplementary
to reflect any amendments hereto which the Board of Directors is entitled to
adopt pursuant to the terms of Section 6(k) of Part I of these Articles
Supplementary without stockholder approval. To the extent permitted by
applicable law, the Board of Directors may interpret, amend or adjust the
provisions of these Articles Supplementary to resolve any inconsistency or
ambiguity or to remedy any patent defect.

         17. Definitions. As used in Part I and Part II of these Articles
Supplementary, the following terms will 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:

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

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

             "AMPS" has the meaning set forth in paragraph FIRST in the preamble
         of these Articles Supplementary.

             "Applicable Percentage" means the percentage determined based on
         the credit rating assigned to the Series on such date by Moody's (if
         Moody's is then rating the Series) and S&P (if S&P is then rating the
         Series) as follows:

                   Credit Ratings
                   --------------                       Applicable
         Moody's                      S&P               Percentage
         -------                      ---               ----------

           Aaa                        AAA                  125%
        Aa3 to Aa1                AA- to AA+               150%
         A3 to A1                  A- to A+                200%
       Baa3 to Baa1              BBB- to BBB+              250%
      Ba1 and lower              BB+ and lower             300%



                                       20





<PAGE>


             For purposes of this definition, the "prevailing rating" of shares
         of the Series will be (i) AAA if such shares have a rating of AAA by
         Moody's or S&P or the equivalent of such ratings by such agencies or
         substitute rating agencies selected as provided below; (ii) if not AAA,
         then AA- if such shares have a rating of AA- or better by Moody's or
         S&P or the equivalent of such ratings by such agencies or substitute
         rating agencies selected as provided below, (iii) if not AA- or higher,
         than A- if such shares have a rating of A- or better by Moody's or S&P
         or the equivalent of such ratings by such agencies or substitute rating
         agencies selected as provided below, (iv) if not A- or higher then BBB-
         if such shares have a rating of BBB- or better by Moody's or S&P or the
         equivalent of such ratings by such agencies or substitute rating
         agencies selected as provided below, (v) if not BBB- or higher, then
         below BBB-; provided, however, that if such shares are rated by only
         one rating agency, the prevailing rating will be determined without
         reference to the rating of any other rating agency.

             The Applicable Percentage as so determined will 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
         that immediately following any such increase the Corporation would be
         in compliance with the Preferred Shares Basic Maintenance Amount. The
         Corporation will take all reasonable action necessary to enable either
         Moody's or S&P to provide a rating for the Series. If neither Moody's
         nor S&P will make such a rating available, the Corporation will select
         another Rating Agency to act as a substitute Rating Agency.

             "Applicable Rate" means, with respect to the Series for each
         Dividend Period (i) if Sufficient Clearing Orders exist for the Auction
         in respect thereof, the Winning Bid Rate, (ii) if Sufficient Clearing
         Orders do not exist for the Auction in respect thereof, the Maximum
         Rate, and (iii) in the case of any Dividend Period if all the shares of
         the Series are the subject of Submitted Hold Orders for the Auction in
         respect thereof, 90% of the Reference Rate.

             "Applicable Spread" means the spread determined based on the credit
         rating assigned to the Series on such date by Moody's (if Moody's is
         then rating the Series) and S&P (if S&P is then rating the Series) as
         follows:

                   Credit Ratings
                   --------------                       Applicable
         Moody's                      S&P                 Spread
         -------                      ---                 ------

           Aaa                        AAA                125 bps
        Aa3 to Aa1                AA- to AA+             150 bps
         A3 to A1                  A- to A+              200 bps
       Baa3 to Baa1              BBB- to BBB+            250 bps
      Ba1 and lower              BB+ and lower           300 bps

             For purposes of this definition, the "prevailing rating" of shares
         of the Series will be (i) AAA if such shares have a rating of AAA by
         Moody's or S&P or the equivalent of such ratings by such agencies or
         substitute rating agencies selected as provided below; (ii) if not AAA,
         then AA- if such shares have a rating of AA- or better by Moody's or



                                       21





<PAGE>

         S&P or the equivalent of such ratings by such agencies or substitute
         rating agencies selected as provided below, (iii) if not AA- or higher,
         than A- if such shares have a rating of A- or better by Moody's or S&P
         or the equivalent of such ratings by such agencies or substitute rating
         agencies selected as provided below, (iv) if not A- or higher then BBB-
         if such shares have a rating of BBB- or better by Moody's or S&P or the
         equivalent of such ratings by such agencies or substitute rating
         agencies selected as provided below, (v) if not BBB- or higher, then
         below BBB-; provided, however, that if such shares are rated by only
         one rating agency, the prevailing rating will be determined without
         reference to the rating of any other rating agency.

             The Applicable Spread as so determined will 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
         that immediately following any such increase the Corporation would be
         in compliance with the Preferred Shares Basic Maintenance Amount. The
         Corporation will take all reasonable action necessary to enable either
         Moody's or S&P to provide a rating for the Series. If neither Moody's
         nor S&P will make such a rating available, the Corporation will select
         another Rating Agency to act as a substitute Rating Agency.

             "Approved Price" means the "fair value" as determined by the
         Corporation in accordance with the valuation procedures adopted from
         time to time by the Board of Directors and for which the Corporation
         receives a mark-to-market price (which, for the purpose of clarity,
         does not mean a Market Value Price) from an independent source at least
         semi-annually.

             "Asset Coverage Cure Date" has the meaning set forth in Section
         3(a)(ii) of these Articles Supplementary.

             "Auction" means each periodic operation of the Auction Procedures.

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

             "Auction Date" means the first Business Day next preceding the
         first day of a Dividend Period for the Series.

             "Auction Procedures" means the procedures for conducting Auctions
         as set forth in Part II of these Articles Supplementary.

             "Auditor's Certificate" has the meaning set forth in Section 12(f)
         of Part I of these Articles Supplementary.

             "Beneficial Owner," 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 the Series.



                                       22





<PAGE>


             "Bid" has the meaning set forth in Section 2(a)(ii) of Part II of
         these Articles Supplementary.

             "Bidder" has the meaning set forth in Section 2(a)(ii) of Part II
         of these Articles Supplementary, provided however that neither the
         Corporation nor any Affiliate will be permitted to be Bidder in an
         Auction.

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

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

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

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

             "Charter" has the meaning set forth in the preamble to these
         Articles Supplementary.

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

             "Commission" means the Securities and Exchange Commission.

             "Common Shares" means the shares of the Corporation's Common Stock,
         par value $.001 per share.

             "Corporation" has the meaning set forth in the preamble to these
         Articles Supplementary.

             "Date of Original Issue" means the date on which the Series is
         originally issued by the Corporation.

             "Default" has the meaning set forth in Section 2(c)(ii) of Part I
         of these Articles Supplementary.

             "Default Period" has the meaning set forth in Sections 2(c)(ii) or
         (iii) of Part I of these Articles Supplementary.

             "Default Rate" has the meaning set forth in Sections 2(c)(iii) of
         Part I of these Articles Supplementary.


                                       23





<PAGE>


             "Deposit Securities" means cash and any obligations or securities,
         including Short Term Money Market Instruments that are Eligible Assets,
         rated at least AAA or A-1 by S&P, except that, for purposes of optional
         redemption, such obligations or securities will be considered "Deposit
         Securities" only if they also are rated at least P-1 by Moody's.

             "Discount Factor" means the S&P Discount Factor (if S&P is then
         rating the Series), the Moody's Discount Factor (if Moody's is then
         rating the Series) or the discount factor established by any Other
         Rating Agency which is then rating the Series and which so requires,
         whichever is applicable.

             "Discounted Value"

             (a) for Moody's means the quotient of the Market Value of an
         Eligible Asset divided by the applicable Discount Factor, provided that
         with respect to an Eligible Asset that is currently callable,
         Discounted Value will be equal to the quotient as calculated above or
         the call price, whichever is lower, and that with respect to an
         Eligible Asset that is prepayable, Discounted Value will be equal to
         the quotient as calculated above or the par value, whichever is lower.

             (b) for S&P means the quotient of the Market Value of an Eligible
         Asset divided by the applicable Discount Factor.

             "Dividend Default" has the meaning set forth in Section 2(c)(ii) of
         Part I of these Articles Supplementary.

             "Dividend Payment Date" means any date on which dividends are
         payable pursuant to Section 2(b) of Part I hereof.

             "Dividend Period" means the initial period determined in the manner
         set forth under "Designation" above, and thereafter the period
         commencing on the Business Day following each Dividend Period and
         ending on the calendar day immediately preceding the next Dividend
         Payment Date.

             "Eligible Assets" means Moody's Eligible Assets (if Moody's is then
         rating the Series), S&P Eligible Assets (if S&P is then rating the
         Series), and/or Other Rating Agency Eligible Assets if any Other Rating
         Agency is then rating the Series, whichever is applicable.

             "Existing Holder" has the meaning set forth in Section 1 of Part II
         of these Articles Supplementary.

             "Hold Order" has the meaning set forth in Section 2(a)(ii) of Part
         II of these Articles Supplementary.

             "Holder" means, with respect to the Series, the registered holder
         of shares of the Series as the same appears on the stock ledger or
         stock records of the Corporation.

             "Investment Manager" means Cohen & Steers Capital Management, Inc.



                                       24





<PAGE>


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

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



                                       25





<PAGE>


             "Liquidation Preference" means $25,000 per share of the Series.

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

             "Mandatory Redemption Date" has meaning set forth in Section
         3(a)(iii) of Part I of these Articles Supplementary.

             "Mandatory Redemption Price" has the meaning set forth in Section
         3(a)(iii) of Part I of these Articles Supplementary.

             "Market Value" means the fair market value of an asset of the
         Corporation as computed as follows: Securities listed on the New York
         Stock Exchange at the last sale price reflected on the consolidated
         tape at the close of the New York Stock Exchange on the Business Day as
         of which such value is being determined provided that, if there has
         been no sale on such day, the securities are valued at the closing bid
         prices on such day and provided further that, if no bid prices are
         quoted on such day, then the security is valued by such method as the
         Board of Directors will determine in good faith to reflect its fair
         market value. Readily marketable securities not listed on the New York
         Stock Exchange but listed on other domestic or foreign securities
         exchanges or admitted to trading on the National Association of
         Securities Dealers Automated Quotations, Inc. ("NASDAQ") National List
         are valued in a like manner. Portfolio securities traded on more than
         one securities exchange are valued at the last sale price on the
         Business Day as of which such value is being determined as reflected on
         the tape at the close of the exchange representing the principal market
         for such securities. Readily marketable securities traded in the
         over-the-counter market, including listed securities whose primary
         market is believed by the Investment Manager to be over-the-counter,
         but excluding securities admitted to trading on the NASDAQ National
         List, are valued at the current bid prices as reported by NASDAQ or, in
         the case of securities not quoted by NASDAQ, the National Quotation
         Bureau or such other comparable source as the directors deem
         appropriate to reflect their fair market value. The fair market value
         of certain fixed-income securities is computed based upon (i) the basis
         of prices provided by a Pricing Service or (ii) the lower of the value
         set forth in bids from two independent dealers in securities, one of
         which bids will be in writing, in each case with interest accrued added
         to such computation for those assets of the Corporation where such
         computation does not include interest accrued. The independent dealers
         from whom bids are sought will be either (a) market makers in the
         securities being valued or (b) members of the National Association of
         Securities Dealers, Inc. Where securities are traded on more than one
         exchange and also over-the-counter, the securities will generally be
         valued using the quotations the Board of Directors believes reflect
         most closely the value of such securities.

             "Maximum Rate," for shares of the Series on any Auction Date for
         such shares, will mean for any rate period, the greater of the
         Applicable Percentage of the Reference Rate or the Applicable Spread
         plus the Reference Rate. The Auction Agent will round each applicable
         Maximum Rate to the nearest one-thousandth (0.001) of one percent per



                                       26





<PAGE>


         annum, with any such number ending in five ten-thousandths of one
         percent being rounded upwards to the nearest one-thousandth (0.001) of
         one percent.

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

             "Moody's Discount Factor" means, for purposes of determining the
         Discounted Value of any Moody's Eligible Asset, the percentage
         determined as follows. The Moody's Discount Factor for any Moody's
         Eligible Asset other than the securities set forth below will be the
         percentage provided in writing by Moody's.

             (a) Preferred Stock and Common Stock of REITs, Other Real Estate
         Companies and non-Real Estate Companies:

<TABLE>
<CAPTION>
                                                                                      Discount
                                                                                  Factor (1)(2)(3)
                                                                                  ----------------
<S>                                                                                      <C>
             Common stock of REITs and other real estate companies                        154%
             Preferred stock of REITs
                 with Senior Implied Moody's (or S&P or Fitch) rating:                    154%
                 without Senior Implied Moody's (or S&P or Fitch) rating:                 208%
             Preferred stock of Other Real Estate Companies
                 with Senior Implied Moody's (or S&P or Fitch) rating:                    208%
                 without Senior Implied Moody's (or S&P or Fitch) rating:                 250%
             Preferred Securities of non-real estate companies (4)(5):
             The Moody's Discount Factor for non-real estate preferred
                 securities will be
                 (A)  for taxable preferred securities issued by a utility,
                      industrial, financial issuer or other non-real estate
                      related issuers with Moody's or equivalent S&P or
                      Fitch ratings:
                                                                                    Aaa   150%
                                                                                    Aa    155%
                                                                                    A     160%
                                                                                    Baa   165%
                                                                                    Ba    196%
                                                                                    B     216%
                                                                                    >B, NR250%

                 (B)  for DRD eligible preferred securities issued by a
                      utility, industrial, financial issuer, or other
                      non-real estate related issuers
                     (i) Investment grade                                                 165%
                     (ii) non-investment grade                                            216%
</TABLE>



                                       27





<PAGE>


<TABLE>
<CAPTION>
                                                                                      Discount
                                                                                  Factor (1)(2)(3)
                                                                                  ----------------

<S>                                                                                       <C>
                 (C)  for auction rate preferred securities,                              350%
</TABLE>

     ------------
(1)  A Discount Factor of 250% will be applied to those assets in a single
     Moody's Real Estate Industry/Property Sector Classification which exceed
     30% of Moody's Eligible Assets but are not greater than 35% of Moody's
     Eligible Assets.

(2)  A Discount Factor of 250% will 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.

(3)  A Discount Factor of 250% will be applied if the market capitalization
     (including common stock and preferred stock) of a real estate issuer is
     below $500 million.

(4)  Applies to preferred securities which have a minimum issue size of $50
     million.

(5)  Non-real estate eligible preferred securities will be issued by investment
     grade companies having a senior unsecured debt rating that is Baa3 or
     higher by Moody's or BBB- by S&P or Fitch and pay dividends in U.S. Dollars
     or Euros. The market value of eligible non-cumulative preferred issues are
     subject to standard preferred stock discount factors multiplied by a factor
     of 1.10.

             (b) Debt securities (1)(2)(3):

             The percentage 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.

<TABLE>
<CAPTION>
         Terms of Maturity of Debt Security (1)              Aaa     Aa      A      Baa     Ba      B    Unrated (2, 3)
         --------------------------------------              ---     --      -      ---     --      -    --------------
<S>                                                         <C>     <C>    <C>     <C>     <C>     <C>        <C>
         1 year or less                                     109%    112%   115%    118%    137%    150%       250%
         2 years or less (but longer than 1 year)           115%    118%   122%    125%    146%    160%       250%
         3 years or less (but longer than 2 years)          120%    123%   127%    131%    153%    168%       250%
         4 years or less (but longer than 3 years)          126%    129%   133%    138%    161%    176%       250%
         5 years or less (but longer than 4 years)          132%    135%   139%    144%    168%    185%       250%
         7 years or less (but longer than 5 years)          139%    143%   147%    152%    179%    197%       250%
         10 years or less (but longer than 7 years)         145%    150%   155%    160%    189%    208%       250%
         15 years or less (but longer than 10 years)        150%    155%   160%    165%    196%    216%       250%
         20 years or less (but longer than 15 years)        150%    155%   160%    165%    196%    228%       250%
         30 years  or less (but longer than 20 years)       150%    155%   160%    165%    196%    229%       250%
         Greater than 30 years                              165%    173%   181%    189%    205%    240%       250%
</TABLE>
         ------------

(1)  The Moody's Discount Factors for debt securities will also be applied to
     any interest rate swap or cap, in which case the rating of the counterparty
     will determine the appropriate rating category.



                                       28





<PAGE>


(2)  Corporate debt securities if (A) securities that do not pay interest in
     U.S. dollars, the Corporation will contact Moody's to obtain the applicable
     currency conversion rates; (B) for debt securities rated B and below taken
     together with 'Unrated' securities, no more than 10% of the original amount
     of such issue may constitute Moody's Eligible Assets; (C) such securities
     have been registered under the 1933 Act or are restricted as to resale
     under federal securities laws but are eligible for resale pursuant to Rule
     144A under the 1933 Act as determined by the Corporation'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 will be considered Moody's Eligible Assets if
     they are publicly traded; and (D) such securities are not subject to
     extended settlement.

(3)  Unless conclusions regarding liquidity risk as well as estimates of both
     the probability and severity of default for the Corporation's assets can be
     derived from other sources as well as combined with a number of sources as
     presented by the Corporation to Moody's, securities rated below B by
     Moody's and unrated securities, which are securities rated by neither
     Moody's, S&P nor Fitch, are limited to 10% of Moody's Eligible Assets. If a
     corporate debt security is unrated by Moody's, S&P or Fitch, the
     Corporation will use the percentage set forth under 'Below B and Unrated'
     in this table. Ratings assigned by S&P or Fitch are generally accepted by
     Moody's at face value. However, adjustments to face value may be made to
     particular categories of credits for which the S&P and/or Fitch rating does
     not seem to approximate a Moody's rating equivalent.

             (c) U.S. Treasury Securities and U.S. Treasury Strips (as defined
         by Moody's):

<TABLE>
<CAPTION>
                                                               U.S. Treasury           U.S. Treasury
                                                            Securities Discount       Strips Discount
         Remaining Term to Maturity                                Factor                  Factor
         --------------------------                                ------                  ------
<S>                                                                 <C>                     <C>
         1 year or less                                             107%                    107%
         2 years or less (but longer than 1 year)                   113%                    115%
         3 years or less (but longer than 2 years)                  118%                    121%
         4 years or less (but longer than 3 years)                  123%                    128%
         5 years or less (but longer than 4 years)                  128%                    135%
         7 years or less (but longer than 5 years)                  135%                    147%
         10 years or less (but longer than 7 years)                 141%                    163%
         15 years or less (but longer than 10 years)                146%                    191%
         20 years or less (but longer than 15 years)                154%                    218%
         30 years  or less (but longer than 20 years)               154%                    244%
</TABLE>

             (d) Short -Term Instruments and Cash.

         The Moody's Discount Factor applied to Moody's Eligible Assets that are
         short term money instruments (as defined by Moody's) will be (i) 100%,
         so long as such portfolio securities mature or have a demand feature at
         par exercisable within 49 days of the relevant valuation date, (ii)
         102%, so long as such portfolio securities mature or have a demand
         feature at par not exercisable within 49 days of the relevant valuation
         date, and (iii) 125%, if such securities are not rated by Moody's, so
         long as such portfolio securities are rated at least A-1 by S&P and
         mature or have a demand feature at par exercisable within 49 days of
         the relevant valuation date. A Moody's Discount Factor of 100% will be
         applied to cash.



                                       29





<PAGE>


             (e) Rule 144A Debt or Preferred Securities:

             The Moody's Discount Factor applied to Rule 144A debt or preferred
         securities will be

             (i) 130% of the Moody's Discount Factor, which would apply if the
         securities have registration rights under the 1933 Act after 365 days,
         and

             (ii) 120% of the Moody's Discount Factor if the securities have
         registration rights within 365 days of calculation of the Basic
         Maintenance Amount.

             (f) Convertible Securities:

<TABLE>
<CAPTION>
                          MOODY'S RATING CATEGORY(1)

Industry Category          Aaa        Aa        A        Baa        Ba        B         NR
-----------------          ---        --        -        ---        --        -         --
<S>                        <C>       <C>      <C>       <C>        <C>       <C>       <C>
Utility                    162%      167%     172%      188%       195%      199%      300%
Industrial                 256%      261%     266%      282%       290%      293%      300%
Financial                  233%      238%     243%      259%       265%      270%      300%
Transportation             250%      265%     275%      285%       290%      295%      300%

</TABLE>

------------
(1)  Unless conclusions regarding liquidity risk as well as estimates of both
     the probability and severity of default for the Corporation's assets can be
     derived from other sources as well as combined with a number of sources as
     presented by the Corporation to Moody's, securities rated below B by
     Moody's and unrated securities, which are securities rated by neither
     Moody's, S&P nor Fitch, are limited to 10% of Moody's Eligible Assets. If a
     corporate debt security is unrated by Moody's, S&P or Fitch, the
     Corporation will use the percentage set forth under "Below B and Unrated"
     in this table. Ratings assigned by S&P or Fitch are generally accepted by
     Moody's at face value. However, adjustments to face value may be made to
     particular categories of credits for which the S&P and/or Fitch rating does
     not seem to approximate a Moody's rating equivalent.

             "Moody's Eligible Assets" means the following:

             (i) Common Stock, Preferred Stock and any debt security of REITs
         and Other Real Estate Companies, and Preferred Stock and debt
         securities of non real estate companies:

                 (A) which comprise at least 7 of the total number of Moody's
             Real Estate Industry/Property Sector Classifications ("Moody's
             Sector Classifications") and Moody's Industry Classifications, of
             which no more than 35% may constitute a single such classification;

                 (B) which in the aggregate constitute at least 40 separate
             issues of common stock, preferred stock, and debt securities issued
             by at least 30 issuers;

                 (C) issued by a single issuer which in the aggregate constitute
             no more than 6.0% of the Market Value of Moody's Eligible Assets,
             and



                                       30





<PAGE>


                 (D) issued by a single issuer which, with respect to 50% of the
             Market Value of Moody's Eligible Assets, constitute in the
             aggregate no more than 5% of Market Value of Moody's Eligible
             Assets;

             (ii) Unrated debt securities issued by an issuer which:

                 (A) has not filed for bankruptcy within the past three years

                 (B) is current on all principal and interest on its fixed
             income obligations;

                 (C) is current on all preferred stock dividends;

                 (D) possesses a current, unqualified auditor's report without
             qualified, explanatory language; and

                 (E) in the aggregate taken together with securities rated Ba1
             by Moody's, or comparable by S&P or Fitch, and below do not exceed
             10% of the discounted Moody's Eligible Assets;

             (iii) Interest rate swaps entered into according to International
         Swap Dealers Association ("ISDA") standards if

                 (A) the counterparty to the swap transaction has a short-term
             rating of not less than P-1 by Moody's or A-1 by S&P or, if the
             counterparty does not have a short-term rating, the counterparty's
             senior unsecured long-term debt rating is A3 or higher by Moody's
             or A- or higher by S&P or Fitch;

                 (B) the original aggregate notional amount of the interest rate
             swap transaction or transactions is not to be greater than the
             liquidation preference of the Series originally issued;

                 (C) the interest rate swap transaction will be marked-to-market
             daily;

                 (D) an interest rate swap that is in-the-money is discounted at
             the counterparty's corporate debt rating for the maturity of the
             swap for purposes of calculating Moody's Eligible Assets; and

                 (E) an interest rate swap that is out-of-the money includes
             that negative mark-to-market amount as indebtedness for purposes of
             calculating the Preferred Shares Basic Maintenance amount.

             (iv) U.S. Treasury Securities and Treasury Strips (as defined by
         Moody's);

             (v) Short-Term Money Market Instruments so long as

                 (A) such securities are rated at least P-1,

                 (B) in the case of demand deposits, time deposits and overnight
             funds, the supporting entity is rated at least A2, or



                                       31





<PAGE>


                 (C) in all other cases, the supporting entity (1) is rated A2
             and the security matures within one month, (2) is rated A1 and the
             security matures within three months or (3) is rated at least Aa3
             and the security matures within six months; provided, however, that
             for purposes of this definition, such instruments (other than
             commercial paper rated by S&P and not rated by Moody's) need not
             meet any otherwise applicable Moody's rating criteria.

             (vi) Cash including, for this purpose, interest and dividends due
         on assets rated

                 (A) Baa3 or higher by Moody's if the payment date is within
             five Business Days of the Valuation Date,

                 (B) A2 or higher if the payment date is within thirty days of
             the Valuation Date, and

                 (C) A1 or higher if the payment date is within 49 days of the
             relevant valuation date and receivables for Moody's Eligible Assets
             sold if the receivable is due within five Business Days of the
             Valuation Date, and if the trades which generated such receivables
             are (1) settled through clearing house firms with respect to which
             the Corporation has received prior written authorization from
             Moody's or (2) with counterparties having a Moody's long-term debt
             rating of at least Baa3 or (3) with counterparties having a Moody's
             Short-Term Money Market Instrument rating of at least P-1.

             "Moody's Industry Classifications" means, for the purposes of
         determining Moody's Eligible Assets, each of the following Industry
         Classifications:

              1.  Aerospace & Defense
              2.  Automobile
              3.  Banking
              4.  Beverage, Food & Tobacco
              5.  Buildings & Real Estate
              6.  Chemicals, Plastics & Rubber
              7.  Containers, Packaging & Glass
              8.  Personal & Nondurable Consumer Projects (Manufacturing Only)
              9.  Diversified/Conglomerate Manufacturing
             10.  Diversified/Conglomerate Service
             11.  Diversified Natural Resources, Precious Metals & Minerals
             12.  Ecological
             13.  Electronics
             14.  Finance
             15.  Farming & Agriculture
             16.  Grocery
             17.  Healthcare, Education & Childcare
             18.  Home & Office Furnishings, Housewares & Durable Consumer
                  Products
             19.  Hotels, Motels, Inns and Gaming
             20.  Insurance



                                       32





<PAGE>


             21.  Leisure, Amusement, Entertainment
             22.  Machinery (Nonagriculture, Nonconstruction, Nonelectronic)
             23.  Mining, Steel, Iron & Nonprecious Metals
             24.  Oil & Gas
             25.  Personal, Food & Misc. Services
             26.  Printing & Publishing
             27.  Cargo Transport
             28.  Retail Stores
             29.  Telecommunications
             30.  Textiles & Leather
             31.  Personal Transportation
             32.  Utilities
             33.  Broadcasting & Entertainment

             "Moody's Real Estate Industry/Property Sector Classification"
         means, for the purposes of determining Moody's Eligible Assets, each of
         the following Industry Classifications (as defined by the National
         Association of Real Estate Investment Trusts, "NAREIT"):

             (i)     Office
             (ii)    Industrial
             (iii)   Mixed
             (iv)    Shopping Centers
             (v)     Regional Malls
             (vi)    Free Standing
             (vii)   Apartments
             (viii)  Manufactured Homes
             (ix)    Diversified
             (x)     Lodging/Resorts
             (xi)    Health Care
             (xii)   Home Financing
             (xiii)  Commercial Financing
             (xiv)   Self Storage
             (xv)    Specialty

             The Corporation will use its discretion in determining which NAREIT
         Industry Classification is applicable to a particular investment in
         consultation with the independent auditor and/or Moody's, as necessary.

             "1933 Act" means the Securities Act of 1933, as amended.

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

             "1940 Act Preferred Shares Asset Coverage" means asset coverage, as
         determined in accordance with Section 18(h) of the 1940 Act, of at
         least 200% with respect to all outstanding senior securities of the
         Corporation which are stock, including all Outstanding AMPS (or such
         other asset coverage as may in the future be specified in or



                                       33





<PAGE>


         under the 1940 Act as the minimum asset coverage for senior securities
         which are stock of a closed-end investment company as a condition of
         declaring dividends on its common shares), determined on the basis of
         values calculated as of a time within 48 hours (not including Sundays
         or holidays) next preceding the time of such determination.

             "1940 Act Preferred Shares Asset Coverage Certificate" means the
         certificate required to be delivered by the Corporation pursuant to
         Section 12(f) of these Articles Supplementary.

             "Notice of Redemption" means any notice with respect to the
         redemption of the Series pursuant to Section 3 of Part I of these
         Articles Supplementary.

             "Order" has the meaning set forth in Section 2(a)(ii) of Part II of
         these Articles Supplementary.

             "Other Rating Agency" means any rating agency other than S&P or
         Moody's then providing a rating for the Series pursuant to the request
         of the Corporation.

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

             "Other Real Estate Companies" companies which generally derive at
         least 50% of their revenue from real estate or has at least 50% of its
         assets in real estate, but not including REITs.

             "Outstanding" means, as of any date, shares of the Series
         theretofore issued by the Corporation except, without duplication, (i)
         any shares of the Series theretofore canceled, redeemed or repurchased
         by the Corporation, or delivered to the Auction Agent for cancellation
         or with respect to which the Corporation has given notice of redemption
         and irrevocably deposited with the Paying Agent sufficient funds to
         redeem such shares and (ii) any shares of the Series represented by any
         certificate in lieu of which a new certificate has been executed and
         delivered by the Corporation. Notwithstanding the foregoing, (A) for
         purposes of voting rights (including the determination of the number of
         shares required to constitute a quorum), any shares of the Series as to
         which the Corporation or any Affiliate is the Existing Holder will be
         disregarded and not deemed Outstanding; (B) in connection with any
         Auction, any shares of the Series as to which the Corporation or any
         person known to the Auction Agent to be an Affiliate is the Existing
         Holder will be disregarded and not deemed Outstanding; and (C) for
         purposes of determining the Preferred Shares Basic Maintenance Amount,
         shares of the Series held by the Corporation will be disregarded and
         not deemed Outstanding, but shares held by any Affiliate will be deemed
         Outstanding.

             "Paying Agent" 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 Corporation to serve as paying agent, which
         paying agent may be the same as the Auction Agent.



                                       34





<PAGE>


             "Person" or "Person" means and includes an individual, a
         partnership, the corporation, a trust, a corporation, a limited
         liability company, an unincorporated association, a joint venture or
         other entity or a government or any agency or political subdivision
         thereof.

             "Potential Beneficial Owner or Holder" has the meaning set forth in
         Section 1 of Part II of these Articles Supplementary.

             "Preferred Shares Basic Maintenance Amount" means as of any
         Valuation Date as the dollar amount equal to the sum of:

                 (i)(A) the product of the number of shares of the Series
             outstanding on such date multiplied by $25,000 (plus the product of
             the number of shares of any other series of preferred shares
             outstanding on such date multiplied by the liquidation preference
             of such shares), plus any redemption premium applicable to the
             shares of the Series (or other preferred shares) then subject to
             redemption; (B) the aggregate amount of dividends that will have
             accumulated at the Applicable Rate (whether or not earned or
             declared) to (but not including) the first Dividend Payment Date
             for the shares of the Series outstanding that follows such
             Valuation Date (plus the aggregate amount of dividends, whether or
             not earned or declared, that will have accumulated in respect of
             other outstanding preferred shares to, but not including, the first
             respective dividend payment date for such other shares that follows
             such Valuation Date); (C) the aggregate amount of dividends that
             would accumulate on shares of the Series outstanding from such
             first Dividend Payment Date therefor through the 56th day after
             such Valuation Date, at the Maximum Rate (plus the aggregate amount
             of dividends that would accumulate on other outstanding preferred
             shares from the first respective dividend payment date for such
             shares after the Valuation Date through the 56th day after such
             Valuation Date, at the respective maximum rates for such other
             outstanding preferred shares); (D) the amount of anticipated
             expenses of the Corporation for the 90 days subsequent to such
             Valuation Date; (E) the amount of any indebtedness or obligations
             of the Corporation senior in right of payment to the Series; and
             (F) any current liabilities as of such Valuation Date, to the
             extent not reflected in any of (i)(A) through (i)(F) less

                 (ii) the value (i.e., for purposes of current Moody's
             guidelines, the face value of cash and short-term securities that
             are the direct obligation of the U.S. government, provided in each
             case that such securities mature on or prior to the date upon which
             any of (i) (A) through (i) (F) become payable, otherwise the
             Moody's Discounted Value) (i.e., for the purposes of the current
             S&P guidelines, the face value of cash, and short term securities
             that are the direct obligations of the U.S. government, provided in
             each case that such securities mature on or prior to the date upon
             which any of (i)(A) through (i)(F) becomes payable, otherwise the
             S&P Discounted Value) of any of the Corporation's assets
             irrevocably deposited by the Corporation for the payment of any of
             (i)(A) through (i)(F).



                                       35





<PAGE>


             "Preferred Shares Basic Maintenance Amount Test" means a test which
         is met if the lower of the aggregate Discounted Values of the Moody's
         Eligible Assets or the S&P Eligible Assets meets or exceeds the
         Preferred Shares Basic Maintenance Amount. The Corporation will notify
         Moody's if coverage declines below 1.30X the Preferred Shares Basic
         Maintenance Amount.

             "Preferred Shares Basic Maintenance Certificate" has the meaning
         set forth in Section 12(d) of Part I of these Articles Supplementary.

             "Pricing Service" means any of the following:

                 Bloomberg
                 Bridge Global Pricing
                 Chanin Capital Partners
                 Data Resources Inc. (a McGraw-Hill company)
                 FT Interactive Data
                 J.J. Kenny Drake
                 JP Morgan Pricing Services
                 Loan Pricing Corporation (owned by Reuters)
                 Meenan, Mcdevitt & Co., Inc
                 Reuters
                 Securities Evaluation Services
                 Standard & Poor's Evaluation Services
                 Thomson Financial Securities Management
                 Telerate
                 Telekurs
                 Trepp Pricing Service
                 Van Kampen Merritt Investment Advisory Corp Pricing
                     Service
                 CIBC World Markets

             "Rating Agency" means Moody's and S&P as long as such rating agency
         is then rating the Series.

             "Redemption Date" has the meaning set forth in Section 2(c)(ii) of
         Part II of these Articles Supplementary.

             "Redemption Default" has the meaning set forth in Section 2(c)(ii)
         of Part I of these Articles Supplementary.

             "Redemption Price" has the meaning set forth in Section 3(a)(i) of
         Part I of these Articles Supplementary.

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



                                       36





<PAGE>


             "Reference Rate" means, with respect to the determination of the
         Default Rate, the applicable LIBOR Rate (for a Dividend Period of fewer
         than 365 days) or the applicable Treasury Index Rate (for a Dividend
         Period of 365 days or more).

             "Registrar" 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 Corporation to serve as transfer agent.

             "REIT" or real estate investment trust, means a company dedicated
         to owning, and usually operating, income producing real estate, or to
         financing real estate.

             "S&P" means Standard & Poor's, a division of The McGraw-Hill
         Companies, Inc., or its successors at law.

             "S&P Discount Factor" means, with respect to an S&P Eligible Asset
         specified below, the following applicable number, provided that the S&P
         Exposure Period is 25 Business Days or less:

             (a) Types of S&P Eligible Assets

<TABLE>
<CAPTION>
                                                                                    Discount Factor for
         Type of S&P Eligible Asset                                                     AAA Rating
         --------------------------                                                     ----------
<S>                                                                                          <C>
         Common Stock of REITs and other real estate companies                               162%
         DRD Eligible Preferred Stock with a senior or preferred stock
            rating of at least BBB-                                                          245%
         REIT and Non-DRD eligible Preferred Stock with a senior or
            preferred stock rating of at least BBB-                                          164%
         DRD Eligible Preferred Stock with a senior or preferred stock
            rating below BBB-                                                                250%
         REIT and non-DRD Eligible Preferred Stock with a senior or
            preferred stock rating below BBB-                                                169%
         Un-rated DRD Eligible Preferred Stock                                               255%
         Un-rated Non-DRD Eligible and un-rated REIT Preferred Stock                         174%
         Convertible bonds rated AAA to AAA-                                                 165%
         Convertible bonds rated AA+ to AA-                                                  170%
         Convertible bonds rated A+ to A-                                                    175%
         Convertible bonds rated BBB+ to BBB-                                                180%
         Convertible bonds rated BB+ to BB-                                                  185%
         Convertible bonds rated B+ to B                                                     190%
         Convertible bonds rated B-                                                          195%
         Convertible bonds rated CCC+                                                        205%
         Convertible bonds rated CCC                                                         220%
         U.S. Short-Term Money Market Investments with maturities of 180
            days or less                                                                     104%
         U.S. Short-Term Money Market Investments with maturities of
            between 181 and 360 days                                                         113%
         U.S. Government Obligations (52 week Treasury Bills)                                102%
         U.S. Government Obligations (Two-Year Treasury Notes)                               104%
         U.S. Government Obligations (Five-Year Treasury Notes)                              110%
         U.S. Government Obligations (Ten-Year Treasury Notes)                               117%
</TABLE>



                                       37





<PAGE>


<TABLE>
<CAPTION>
                                                                                    Discount Factor for
         Type of S&P Eligible Asset                                                     AAA Rating
         --------------------------                                                     ----------
<S>                                                                                          <C>
         U.S. Government Obligations (Thirty-Year Treasury Bonds)                            130%
         Agency Mortgage Collateral (Fixed 15-Year)                                          129%
         Agency Mortgage Collateral (Fixed 30-Year)                                          132%
         Agency Mortgage Collateral (ARM 1/1)                                                122%
         Agency Mortgage Collateral (ARM 3/1)                                                123%
         Agency Mortgage Collateral (ARM 5/1)                                                123%
         Agency Mortgage Collateral (ARM 10/1)                                               123%
         Mortgage Pass-Through Fixed (15 Year)                                               131%
         Mortgage Pass-Through Fixed (30 Year)                                               134%
             Debt securities of REIT's and other real estate companies
                according to the following corporate bond schedule
             Corporate Bonds rated at least AAA                                              110%
             Corporate Bonds rated at least AA+                                              111%
             Corporate Bonds rated at least AA                                               113%
             Corporate Bonds rated at least AA-                                              115%
             Corporate Bonds rated at least A+                                               116%
             Corporate Bonds rated at least A                                                117%
             Corporate Bonds rated at least A-                                               118%
             Corporate Bonds rated at least BBB+                                             120%
             Corporate Bonds rated at least BBB                                              122%
             Corporate Bonds rated at least BBB-                                             124%
             Corporate Bonds rated at least BB+                                              129%
             Corporate Bonds rated at least BB                                               135%
             Corporate Bonds rated at least BB-                                              142%
             Corporate Bonds rated at least B+                                               156%
             Corporate Bonds rated at least B                                                169%
             Corporate Bonds rated at least B-                                               184%
             Corporate Bonds rated at least CCC+                                             202%
             Corporate Bonds rated at least CCC                                              252%
             Corporate Bonds rated at least CCC-                                             350%
         Cash and Cash Equivalents                                                           100%
</TABLE>

             (b) Interest rate swaps entered into according to International
         Swap Dealers Association ("ISDA") standards if

                 (i) the counterparty to the swap transaction has a short-term
             rating of A-1 or equivalent by S&P or, if the counterparty does not
             have a short-term rating, the counterparty's senior unsecured
             long-term debt rating is A-, or equivalent by S&P, or higher.

                 (ii) the original aggregate notional amount of the interest
             rate swap transaction or transactions is not to be greater than the
             liquidation preference of the Series.

                 (iii) The interest rate swap transaction will be
             marked-to-market weekly by the swap counterparty.



                                       38





<PAGE>


                 (iv) If the Corporation fails to maintain an aggregate
             discounted value at least equal to the basic maintenance amount on
             two consecutive valuation dates then the agreement will terminate
             immediately.

                 (v) For the purpose of calculating the asset coverage test 90%
             of any positive mark-to-market valuation of the Corporation's
             rights will be eligible assets. 100% of any negative mark-to-market
             valuation of the Corporation's rights will be included in the
             calculation of the Preferred Shares Basic Maintenance Amount.

                 (vi) The Corporation must maintain liquid assets with a value
             at least equal to the net amount of the excess, if any, of the
             Corporation's obligations over its entitlement with respect to each
             swap. For caps/floors, must maintain liquid assets with a value at
             least equal to the Corporation's obligations with respect to such
             caps or floors.

             (c) Cash and Cash Equivalents

                 (i) Cash and Cash Equivalents and demand deposits in an "A-1+"
             rated institution are valued at 100%. "A-1+" rated commercial
             paper, with maturities no greater than 30 days and held instead of
             cash until maturity, is valued at 100%. Securities with next-day
             maturities invested in "A-1+" rated institutions re considered cash
             equivalents and are valued at 100%. Securities maturing in 181 to
             360 calendar days are valued at 114.2%.

                 (ii) The S&P Discount Factor for shares of unrated Money Market
             Funds affiliated with the Corporation used as "sweep" vehicles will
             be 110%. Money Market Funds rated "AAAm" will be discounted at the
             appropriate level as dictated by the exposure period. No S&P
             Discount Factor will be applied to Money Market Funds rated AAAm by
             S&P with effective next day maturities.

             "S&P Eligible Assets" will mean:

                 (A) Deposit Securities;

                 (B) U.S. Government Obligations and U.S. Government Agencies;

                 (C) Corporate Indebtedness. Evidences of indebtedness other
             than Deposit Securities, U.S. Government Obligations and Municipal
             Obligations that are not convertible into or exchangeable or
             exercisable for stock of a corporation (except to the extent of ten
             percent (10%) in the case of a share exchange or tender offer)
             ("Other Debt") and that satisfy all of the following conditions:

                     (1) be no more than 10% of total assets may be below a S&P
                 rating of BBB-, or comparable Moody's or Fitch rating, or
                 unrated;

                     (2) the remaining term to maturity of such Other Debt will
                 not exceed fifty (50) years;



                                       39





<PAGE>


                     (3) such Other Debt must provide for periodic interest
                 payments in cash over the life of the security;

                     (4) no more than 10% of the issuers of such evidences of
                 indebtedness do not file periodic financial statements with the
                 U.S. Securities and Exchange Commission;

                     (5) which, in the aggregate, have an average duration of
                 not more than 12 years.

                 (D) Convertible Corporate Indebtedness. Evidences of
             indebtedness other than Deposit Securities, U.S. Government
             Obligations and Municipal Obligations that are convertible into or
             exchangeable or exercisable for stock of a corporation and that
             satisfy all of the following conditions:

                     (1) such evidence of indebtedness is rated at least CCC by
                 S&P; and

                     (2) if such evidence of indebtedness is rated BBB or lower
                 by S&P, the market capitalization of the issuer of such
                 evidence of indebtedness is at least $100 million;

                 (E) Agency Mortgage Collateral. Certificates guaranteed by U.S.
             Government Agencies (as defined below) (e.g., FNMA, GNMA and FHLMC)
             for timely payment of interest and full and ultimate payment of
             principal. Agency Mortgage Collateral also evidence undivided
             interests in pools of level-payment, fixed, variable, or adjustable
             rate, fully amortizing loans that are secured by first liens on
             one- to four-family residences residential properties (or in the
             case of Plan B FHLMC certificates, five or more units primarily
             designed for residential use) ("Agency Mortgage Collateral").
             Agency Mortgage Collateral the following conditions apply:

                     (1) For GNMA certificates backed by pools of graduated
                 payment mortgages, levels are 20 points above established
                 levels;

                     (2) Qualifying "large pool" FNMA mortgage-backed securities
                 and FHLMC participation certificates are acceptable as eligible
                 collateral. The eligible fixed-rate programs include FNMA
                 MegaPools, FNMA Majors, FHLMC Multilender Swaps, and FHLMC
                 Giant certificates. Eligible adjustable rate mortgage ("ARMs")
                 programs include nonconvertible FNMA ARM MegaPools and FHLMC
                 weighted average coupon ARM certificates. Eligible FHLMC Giant
                 programs exclude interest-only and principal only stripped
                 securities;

                     (3) FNMA certificates backed by multifamily ARMs pegged to
                 the 11th District Cost of Funds Index are acceptable as
                 eligible collateral at 5 points above established levels; and



                                       40





<PAGE>




                                    (4) Multiclass REMICs issued by FNMA and
                           FHLMC are acceptable as eligible collateral at the
                           collateral levels established for CMOs.

                           (F) Mortgage Pass-Through Certificates. Publicly
                  issued instruments maintaining at least a AA- ratings by S&P.
                  Certificates evidence proportional, undivided interests in
                  pools of whole residential mortgage loans. Pass-through
                  certificates backed by pools of convertible ARMs are
                  acceptable as eligible collateral at 5 points above the levels
                  established for pass-through certificates backed by fixed or
                  non-convertible ARM pools.

                           (G) Preferred Stocks. Preferred stocks that satisfy
                  all of the following conditions:

                                    1. The preferred stock issue has a senior
                           rating from S&P, or the preferred issue must be
                           rated. In the case of Yankee preferred stock, the
                           issuer should have a S&P senior rating of at least
                           "BBB-", or the preferred issue must be rated at least
                           "BBB-".

                                    2. The issuer--or if the issuer is a special
                           purpose corporation, its parent--is listed on either
                           the New York Stock Exchange, the American Stock
                           Exchange or NASDAQ if the traded par amount is less
                           than $1,000. If the traded par amount is $1,000 or
                           more exchange listing is not required.

                                    3. The collateral pays cash dividends
                           denominated in U.S. dollars.

                                    4. Private placement 144A with registration
                           rights are eligible assets.

                                    5. The minimum market capitalization of
                           eligible issuers is US$100 million.

                                    Restrictions for floating-rate preferred
                           stock:

                                            1. Holdings 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.

                                            2. The floating-rate preferred stock
                                    may not have been subject to a failed
                                    Auction.

                                    Restrictions for adjustable--or auction-rate
                           preferred stock:

                                            1. The total fair market value of
                                    adjustable-rate preferred stock held in the
                                    portfolio may not exceed 10% of eligible
                                    assets.

                                    Concentration Limits:


                                       41




<PAGE>



                                            1. Total issuer exposure in
                                    preferred stock of any one issuer is limited
                                    to 10% of the fair market value of eligible
                                    assets.

                                            2. Preferred stock rated below B-
                                    (including non-rated preferred stock) and
                                    preferred stock with a market cap of less
                                    than US$100 million are limited to no more
                                    than 15% of the fair market value of the
                                    eligible assets.

                                            3. Add 5 points to
                                    over-collateralization level for issuers
                                    with a senior rating or preferred stock
                                    rating of less than BBB-.

                                            4. Add 10 point to
                                    over-collateralization level of issuers with
                                    no senior rating, preferred stock rating or
                                    dividend history.

                           (H) Common Stocks of REITs and Other Real Estate
                  Companies. Common stocks of REITs and Other Real Estate
                  Companies that satisfy all of the following conditions:

                                    (1) such common stock (including the common
                           stock of any predecessor or constituent issuer) has
                           been traded on a recognized national securities
                           exchange or quoted on the National Market System (or
                           any equivalent or successor thereto) of NASDAQ, but
                           excluding "144a" or "pink sheet" stock not carried in
                           daily newspaper over-the-counter listings;

                                    (2) the market capitalization of such issuer
                           of common stock exceeds $100 million;

                                    (3) the issuer of such common stock is not
                           an entity that is treated as a partnership for
                           federal income taxes;

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

                  Escrow Bonds may comprise 100% of the Corporation's S&P
         Eligible Assets. Bonds that are legally defeased and secured by direct
         U.S. Government Obligations are not required to meet any minimum
         issuance size requirement. Bonds that are economically defeased or
         secured by other U.S. agency paper must meet the minimum issuance size
         requirement for the Trust described above. Bonds initially rated or
         rerated as an escrow bond by another Rating Agency are limited to 50%
         of the Corporation's S&P Eligible Assets, and carry one full rating
         lower than the equivalent S&P rating for purposes of determining the
         applicable discount factors. Bonds economically defeased and either
         initially rated or rerated by S&P or another Rating Agency are assigned
         that




                                       42


<PAGE>





         same rating level as its debt issuer, and will remain in its
         original industry category unless it can be demonstrated that a legal
         defeasance has occurred.

                  With respect to the above, the Corporation portfolio must
         consist of no less than 20 issues representing no less than 10
         industries as determined by the S&P Industry Classifications and S&P
         Real Estate Industry/Property sectors.

                  For purposes of determining the discount factors applicable to
         collateral not rated by S&P, the collateral will carry an S&P rating
         one full rating level lower than the equivalent S&P rating.

                  "S&P Exposure Period" will mean the sum of (i) that number of
         days from the last Valuation Date on which the Corporation's Discounted
         Value of S&P Eligible Assets were greater than the Preferred Shares
         Basic Maintenance Amount to the Valuation Date on which the
         Corporation's Discounted Value of S&P Eligible Assets failed to exceed
         the Preferred Shares Basic Maintenance Amount, (ii) the maximum number
         of days following a Valuation Date that the Corporation has under this
         Statement to cure any failure to maintain a Discounted Value of S&P
         Eligible Assets at least equal to the Preferred Shares Basic
         Maintenance Amount, and (iii) the maximum number of days the
         Corporation has to effect a mandatory redemption under Section 3(a)(ii)
         of Part I of these Articles Supplementary.

                  "S&P Industry Classifications" will mean, for the purposes of
         determining S&P Eligible Assets, each of the following industry
         classifications (as defined by the S&P global industry classification):

                      Aerospace & Defense
                      Air Freight and Logistics Airlines
                      Automobiles
                      Automobile Components
                      Beverages
                      Biotechnology
                      Building Products
                      Cable
                      Capital Markets
                      Computers & Peripherals
                      Commercial Banks
                      Commercial Services & Supplies
                      Communications Equipment
                      Construction & Engineering
                      Consumer Finance
                      Containing & Packaging
                      Distributors
                      Diversified Financial Services
                      Diversified Telecommunication Services
                      Electric Utilities
                      Electrical Equipment



                                       43


<PAGE>



                      Electronic Equipment & Instrument
                      Energy Equipment & Services
                      Food & Staples Retailing
                      Food Products
                      Gas Utilities
                      Healthcare Equipment & Supplies
                      Healthcare Providers & Services
                      Hotels, Restaurants & Leisure
                      Household Durables
                      Household Products
                      Industrial Conglomerates
                      Insurance
                      Internet & Catalog Retail
                      Internet Software & Services
                      IT Services
                      Leisure Equipment & Products
                      Machinery
                      Marine
                      Media
                      Metals & Mining
                      Office Electronics
                      Oil & Gas
                      Packaging and Containers
                      Paper & Forest Products
                      Personal Products
                      Pharmaceuticals
                      Real Estate
                      Retail
                      Road & Rail
                      Software
                      Specialty Retail
                      Semiconducters and Semi Conducter Equipment
                      Textiles, Apparel and Luxury Goods
                      Thrift & Mortgage Finance
                      Tobacco
                      Trading Companies & Distributors
                      Transportation and Infrastructure
                      Transportation Utilities
                      Water Utilities
                      Wireless Telecommunication Services

                  "S&P Real Estate Industry/Property Sector Classification"
         means, for the purposes of determining S&P Eligible Assets, each of the
         following Industry Classifications (as defined by NAREIT):

                        1. Office
                        2. Industrial



                                       44


<PAGE>




                        3. Mixed
                        4. Shopping Centers
                        5. Regional Malls
                        6. Free Standing
                        7. Apartments
                        8. Manufactured Homes
                        9. Diversified
                       10. Lodging/Resorts
                       11. Health Care
                       12. Home Financing
                       13. Commercial Financing
                       14. Self Storage
                       15. Specialty

                  The Corporation will use its discretion in determining which
         NAREIT Industry Classification is applicable to a particular
         investment, and, when necessary will consult with the independent
         auditor and/or S&P, as necessary.

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

                  "Sell Order" has the meaning set forth in Section 2(a)(ii) of
         Part II of these Articles Supplementary.

                  "Short-Term Money Market Instrument" means the following types
         of instruments if, on the date of purchase or other acquisition thereof
         by the Corporation, the remaining term to maturity thereof is not in
         excess of 180 days:

                           (i) commercial paper rated A-1 if such commercial
                  paper matures in 30 days or A-1+ if such commercial paper
                  matures in over 30 days;

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

                           (iii) overnight funds;

                           (iv) U.S. Government Securities; and

                           (v) Rule 2a-7 eligible money market funds.



                                       45


<PAGE>




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

                  "Specific Redemption Provisions" means, with respect to any
         Special Dividend Period of more than one year, either, or any
         combination of (i) a period (a "Non-Call Period") determined by the
         Board of Directors after consultation with the Broker-Dealers, during
         which the shares subject to such Special Dividend Period are not
         subject to redemption at the option of the Corporation and (ii) a
         period (a "Premium Call Period"), consisting of a number of whole years
         as determined by the Board of Directors after consultation with the
         Broker-Dealers, during each year of which the shares subject to such
         Special Dividend Period will be redeemable at the Corporation's option
         at a price per share equal to the Liquidation Preference plus
         accumulated but unpaid dividends (whether or not earned or declared)
         plus a premium expressed as a percentage or percentages of the
         Liquidation Preference or expressed as a formula using specified
         variables as determined by the Board of Directors after consultation
         with the Broker-Dealers.

                  "Standard Dividend Period" means a Dividend Period of 28 days
         unless the day after such 28th day is not a Business Day, then the
         number of days ending on the calendar day next preceding the next
         Business Day (such Business Day, being the Dividend Payment Date).

                  "Submission Deadline" 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.

                  "Transfer Agent" 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 Corporation to serve as Transfer
         Agent.

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

                  "U.S. Government Securities" means direct obligations of the
         United States or by its agencies or instrumentalities that are entitled
         to the full faith and credit of the United




                                       46


<PAGE>



         States and that, other than United States Treasury Bills, provide for
         the periodic payment of interest and the full payment of principal at
         maturity or call for redemption.

                  "Valuation Date" means the last Business Day of each week, or
         such other date as the Corporation and Rating Agencies may agree to for
         purposes of determining the Preferred Shares Basic Maintenance Amount.

                  "Voting Period" has the meaning set forth in Section 6(b) of
         Part I of these Articles Supplementary.

                  "Winning Bid Rate" has the meaning set forth in Section
         4(a)(iii) of Part II of these Articles Supplementary.

         18. Interpretation. References to sections, subsections, clauses,
sub-clauses, paragraphs and subparagraphs are to such sections, subsections,
clauses, sub-clauses, paragraphs and subparagraphs contained in this Part I or
Part II hereof, as the case may be, unless specifically identified otherwise.

                          Part II: Auction Procedures

         1. Certain Definitions. As used in Part II of these Articles
Supplementary, the following terms will have the following meanings, unless the
context otherwise requires and all section references below are to Part II of
these Articles Supplementary except as otherwise indicated: Capitalized terms
not defined in Section 1 of Part II of these Articles Supplementary will have
the respective meanings specified in Part I of these Articles Supplementary.

                  "Agent Member" means a member of or participant in the
         Securities Depository that will act on behalf of existing or Potential
         Holders of shares of the Series.

                  "Available Shares of the Series" has the meaning set forth in
         Section 4(a)(i) of Part II of these Articles Supplementary.

                  "Existing Holder" means (a) a person who beneficially owns
         those shares of the Series listed in that person's name in the records
         of the Auction Agent or (b) the beneficial owner of those shares of the
         Series which are listed under such person's Broker-Dealer's name in the
         records of the Auction Agent, which Broker-Dealer will have signed a
         Master Purchaser's Letter.

                  "Hold Order" has the meaning set forth in Section 2(a)(ii) of
         Part II of these Articles Supplementary.

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

                  "Order" has the meaning set forth in Section 2(a)(ii) of Part
         II of these Articles Supplementary.



                                       47


<PAGE>




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

                  "Sell Order" has the meaning set forth in Section 2(a)(ii) of
         Part II of these Articles Supplementary.

                  "Submitted Bid Order" has the meaning set forth in Section
         4(a) of Part II of these Articles Supplementary.

                  "Submitted Hold Order" has the meaning set forth in Section
         4(a) of Part II of these Articles Supplementary.

                  "Submitted Order" has the meaning set forth in Section 4(a) of
         Part II of these Articles Supplementary.

                  "Submitted Sell Order" has the meaning set forth in Section
         4(a) of Part II of these Articles Supplementary.

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

                  "Winning Bid Rate" means the lowest rate specified in the
         Submitted Orders which, if (A) each Submitted Hold/Sell Order from
         Existing Holders specifying such lowest rate and all other Submitted
         Hold/Sell Orders from Existing Holders specifying lower rates were
         accepted and (B) each Submitted Buy Order from Potential Holders
         specifying such lowest rate and all other Submitted Buy Orders from
         Potential Holders specifying lower rates were accepted, would result in
         the Existing Holders described in clause (A) above continuing to hold
         an aggregate number of shares of the Series which, when added to the
         number of shares of the Series to be purchased by the Potential Holders
         described in clause (B) above and the number of shares of the Series
         subject to Submitted Hold Orders, would be equal to the number of
         shares of the Series.

         2. Orders.

         (a) On or prior to the Submission Deadline on each Auction Date for
shares of the Series:

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



                                       48


<PAGE>




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

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

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

               (ii) each Broker-Dealer, using lists of Potential Beneficial
          Owners, will 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 the Series which each such Potential Beneficial
          Owner offers to purchase if the Applicable Rate for such shares for
          the next succeeding Dividend Period of such shares will not be less
          than the rate per annum specified by such Potential Beneficial Owner.

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

          (b) (i) A Bid by a Beneficial Owner or an Existing Holder of shares of
the Series subject to an Auction on any Auction Date will constitute an
irrevocable offer to sell:

                    (A) the number of Outstanding shares of the Series specified
               in such Bid if the Applicable Rate for shares of the Series
               determined on such Auction Date will be less than the rate
               specified therein;

                    (B) such number or a lesser number of Outstanding shares of
               the Series to be determined as set forth in clause (iv) of
               paragraph (a) of Section 5 of this Part II if the Applicable Rate
               for such shares determined on such Auction Date will be equal to
               the rate specified therein; or



                                       49


<PAGE>




                    (C) the number of Outstanding shares of the Series specified
               in such Bid if the rate specified therein will be higher than the
               Maximum Rate for such shares, or such number or a lesser number
               of Outstanding shares of the Series to be determined as set forth
               in clause (iii) of paragraph (b) of Section 5 of this Part II if
               the rate specified therein will be higher than the Maximum Rate
               for such shares and Sufficient Clearing Bids for such shares do
               not exist.

               (ii) A Sell Order by a Beneficial Owner or an Existing Holder of
          shares of the Series subject to an Auction on any Auction Date will
          constitute an irrevocable offer to sell:

                    (A) the number of Outstanding shares the Series specified in
               such Sell Order; or

                    (B) such number or a lesser number of Outstanding shares of
               the Series as set forth in clause (iii) of paragraph (b) of
               Section 5 of this Part II if Sufficient Clearing Bids for such
               shares do not exist;

          provided, however, that a Broker-Dealer that is an Existing Holder
          with respect to shares of the Series will 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 3 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 Corporation) 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's records, such
          Broker-Dealer believes it is not the Existing Holder of such shares.

               (iii) A Bid by a Potential Holder of shares of the Series subject
          to an Auction on any Auction Date will constitute an irrevocable offer
          to purchase:

                    (A) the number of Outstanding shares of the Series specified
               in such Bid if the Applicable Rate for such shares determined on
               such Auction Date will be higher than the rate specified therein;
               or

                    (B) such number or a lesser number of Outstanding shares of
               the Series as set forth in clause (v) of paragraph (a) of Section
               5 of this Part II if the Applicable Rate for such shares
               determined on such Auction Date will be equal to the rate
               specified therein.

          (c) No Order for any number of shares of the Series other than whole
shares will be valid.

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

          (a) Each Broker-Dealer will submit in writing to the Auction Agent
prior to the Submission Deadline on each Auction Date all Orders for shares of
the Series subject to an Auction on such Auction Date obtained by such
Broker-Dealer, designating itself (unless



                                       50


<PAGE>




otherwise permitted by the Corporation) 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 will specify with respect to
each Order for such shares:

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

               (ii) the aggregate number of shares of the Series that are the
          subject of such Order;

               (iii) to the extent that such Bidder is an Existing Holder of
          such shares:

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

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

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

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

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

          (c) If an Order or Orders covering all of the Outstanding shares of
the Series held by any Existing Holder is not submitted to the Auction Agent
prior to the Submission Deadline, the Auction Agent will deem a Hold Order to
have been submitted by or on behalf of such Existing Holder covering the number
of Outstanding shares of the Series held by such Existing Holder and not subject
to Orders submitted to the Auction Agent; provided, however, that if an Order or
Orders covering all of the Outstanding shares of the 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 91
Dividend Period days, the Auction Agent will deem a Sell Order to have been
submitted by or on behalf of such Existing Holder covering the number of
outstanding shares of the Series held by such Existing Holder and not subject to
Orders submitted to the Auction Agent.

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

               (i) all Hold Orders for such shares will be considered valid, but
          only up to and including in the aggregate the number of Outstanding
          shares of the Series held by such




                                       51


<PAGE>



          Existing Holder, and if the number of shares of the Series subject to
          such Hold Orders exceeds the number of Outstanding shares of the
          Series held by such Existing Holder, the number of shares subject to
          each such Hold Order will be reduced pro rata to cover the number of
          Outstanding shares of the Series held by such Existing Holder;

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

                    (B) subject to subclause (A), if more than one Bid of an
               Existing Holder for shares of the Series is submitted to the
               Auction Agent with the same rate and the number of Outstanding
               shares of the 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 the Series
               subject to each Bid with the same rate will be reduced pro rata
               to cover the number of shares of the Series equal to such excess;

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

                    (D) in any such event, the number, if any, of such
               Outstanding shares of the Series subject to any portion of Bids
               considered not valid in whole or in part under this clause (ii)
               will be treated as the subject of a Bid for shares of the Series
               by or on behalf of a Potential Holder at the rate therein
               specified; and

               (iii) all Sell Orders for shares of the Series will be considered
          valid up to and including the excess of the number of Outstanding
          shares of the Series held by such Existing Holder over the sum of
          shares of the Series subject to valid Hold Orders referred to in
          clause (i) above and valid Bids referred to in clause (ii) above.

          (e) If more than one Bid for one or more shares of the Series 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
therein specified.

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

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

          (a) Not earlier than the Submission Deadline on each Auction Date for
shares of the Series, the Auction Agent will assemble all valid Orders submitted
or deemed submitted to it by the Broker-Dealers in respect of shares of the
Series (each such Order as submitted or deemed submitted by a Broker-Dealer
being hereinafter referred to individually as a "Submitted Hold Order," a
"Submitted Bid" or a "Submitted Sell Order," as the case may be, or as a
"Submitted



                                       52


<PAGE>




Order" and collectively as "Submitted Hold Orders," "Submitted Bids" or
"Submitted Sell Orders," as the case may be, or as "Submitted Orders") and will
determine for such series:

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

               (ii) from the Submitted Orders for shares of the Series whether:

                    (A) the number of Outstanding shares of the Series subject
               to Submitted Bids of Potential Holders specifying one or more
               rates equal to or lower than the Maximum Rate (for all Dividend
               Periods) for shares of the Series; exceeds or is equal to the sum
               of

                    (B) the number of Outstanding shares of the Series subject
               to Submitted Bids of Existing Holders specifying one or more
               rates higher than the Maximum Rate (for all Dividend Periods) for
               shares of the Series; and

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

               (iii) if Sufficient Clearing Bids for shares of the Series exist,
          the lowest rate specified in such Submitted Bids (the "Winning Bid
          Rate" for shares of the Series) which if:

                    (A) (I) each such Submitted Bid of Existing Holders
               specifying such lowest rate and (II) all other such Submitted
               Bids of Existing Holders specifying lower rates were rejected,
               thus entitling such Existing Holders to continue to hold the
               shares of the Series that are subject to such Submitted Bids; and

                    (B) (I) each such Submitted Bid of Potential Holders
               specifying such lowest rate and (II) all other such Submitted
               Bids of Potential Holders specifying lower rates were accepted;
               would result in such Existing Holders described in subclause (A)
               above continuing to hold an aggregate number of Outstanding
               shares of the Series which, when added to the number of
               Outstanding shares of the Series to be purchased by such
               Potential Holders described in subclause (B) above, would equal
               not less than the Available Shares of the Series.

          (b) Promptly after the Auction Agent has made the determinations
pursuant to paragraph (a) of this Section 4, the Auction Agent will advise the
Corporation of the Maximum Rate for shares of the Series for which an Auction is
being held on the Auction Date and, based on such determination, the Applicable
Rate for shares of the Series for the next succeeding Dividend Period thereof as
follows:



                                       53


<PAGE>




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

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

               (iii) if all of the Outstanding shares of the Series are subject
          to Submitted Hold Orders, that the Applicable Rate for all shares of
          the Series for the next succeeding Dividend Period thereof will be 90%
          of the Reference Rate.

          5. Acceptance and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation. Existing Holders will continue to hold the shares of the
Series that are subject to Submitted Hold Orders, and, based on the
determinations made pursuant to paragraph (a) of Section 4 of this Part II, the
Submitted Bids and Submitted Sell Orders will be accepted or rejected by the
Auction Agent and the Auction Agent will take such other action as set forth
below:

          (a) If Sufficient Clearing Bids for shares of the Series have been
made, all Submitted Sell Orders with respect to shares of such series will be
accepted and, subject to the provisions of paragraphs (d) and (e) of this
Section 5, Submitted Bids with respect to shares of the Series will be accepted
or rejected as follows in the following order of priority and all other
Submitted Bids with respect to shares of the Series will be rejected:

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

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

               (iii) Potential Holders' Submitted Bids for shares of the Series
          specifying any rate that is lower than the Winning Bid Rate for shares
          of the Series will be accepted;

               (iv) each Existing Holder's Submitted Bid for shares of the
          Series specifying a rate that is equal to the Winning Bid Rate for
          shares of the Series will be rejected, thus entitling such Existing
          Holder to continue to hold shares of the Series subject to such
          Submitted Bid, unless the number of Outstanding shares of the Series
          subject to all such Submitted Bids will be greater than the number of
          shares of the Series ("remaining shares") in the excess of the
          Available Shares of the Series over the number of shares of the Series
          subject to Submitted Bids described in clauses (ii) and (iii) of this
          paragraph (a), in which event such Submitted Bid of such Existing
          Holder will be rejected in part, and such Existing Holder will be
          entitled to continue to hold shares of the Series subject




                                       54


<PAGE>




          to such Submitted Bid, but only in an amount equal to the shares of
          the Series obtained by multiplying the number of remaining shares by a
          fraction, the numerator of which will be the number of Outstanding
          shares of the Series held by such Existing Holder subject to such
          Submitted Bid and the denominator of which will be the aggregate
          number of Outstanding shares of the Series subject to such Submitted
          Bids made by all such Existing Holders that specified a rate equal to
          the Winning Bid Rate for shares of the Series; and

               (v) each Potential Holder's Submitted Bid for shares of the
          Series specifying a rate that is equal to the Winning Bid Rate for
          shares of the Series will 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 Shares of the Series over the
          number of shares of the Series subject to Submitted Bids described in
          clauses (ii) through (iv) of this paragraph (a) by a fraction, the
          numerator of which will be the number of Outstanding shares of the
          Series subject to such Submitted Bid and the denominator of which will
          be the aggregate number of Outstanding shares of the Series subject to
          such Submitted Bids made by all such Potential Holders that specified
          a rate equal to the Winning Bid Rate for shares of the Series.

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

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

               (ii) Potential Holders' Submitted Bids for shares of the Series
          specifying any rate that is equal to or lower than the Maximum Rate
          for shares of the Series will be accepted; and

               (iii) Each Existing Holder's Submitted Bid for shares of the
          Series specifying any rate that is higher than the Maximum Rate for
          shares of the Series and the Submitted Sell Orders for shares of the
          Series of each Existing Holder will 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 the
          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 the
          Series obtained by multiplying the number of shares of the Series
          subject to Submitted Bids described in clause (ii) of this paragraph
          (b) by a fraction, the numerator of which will be the number of
          Outstanding shares of the Series held by such Existing Holder subject
          to such Submitted Bid or Submitted Sell Order and the denominator of
          which will be the aggregate number of Outstanding shares of the Series
          subject to all such Submitted Bids and Submitted Sell Orders.



                                       55


<PAGE>



          (c) If all of the Outstanding shares of the Series are subject to
Submitted Hold Orders, all Submitted Bids for shares of the Series will be
rejected.

          (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 5, 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 the Series
on any Auction Date, the Auction Agent will, in such manner as it will determine
in its sole discretion, round up or down the number of shares of the Series 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 will be
whole shares of the Series.

          (e) If, as a result of the procedures described in clause (v) of
paragraph (a) of this Section 5 any Potential Holder would be entitled or
required to purchase less than a whole share of the Series on any Auction Date,
the Auction Agent will, in such manner as it will determine in its sole
discretion, allocate shares of the Series for purchase among Potential Holders
so that only whole shares of the 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 the Series on
such Auction Date.

          (f) Based on the results of each Auction for shares of the Series, the
Auction Agent will determine the aggregate number of shares of the Series to be
purchased and the aggregate number of shares of the 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 will deliver, or
from which other Potential Holder(s) or Existing Holder(s) they will receive, as
the case may be, shares of the Series. Notwithstanding any provision of the
Auction Procedures or the Settlement Procedures to the contrary, in the event an
Existing Holder or Beneficial Owner of shares of the Series 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 the Series that have been made in respect of Potential
Holders' or Potential Beneficial Owners' Submitted Bids for shares of such
series that have been accepted in whole or in part will constitute good delivery
to such Potential Holders and Potential Beneficial Owners.

          (g) Neither the Corporation nor the Auction Agent nor any affiliate of
either will 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 any shares of the
Series or to pay for shares of the Series sold or purchased pursuant to the
Auction Procedures or otherwise.

          6. Transfer of AMPS. Unless otherwise permitted by the Corporation, a
Beneficial Owner or an Existing Holder may sell, transfer or otherwise dispose
of shares of the Series only in whole shares and only pursuant to a Bid or Sell
Order placed with the Auction Agent in accordance with the procedures described
in this Part II or to a Broker-Dealer; provided,




                                       56


<PAGE>



however, that (a) a sale, transfer or other disposition of shares of the Series
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 will 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 Corporation) to whom such transfer is made will advise the
Auction Agent of such transfer.

         7. Force Majeure.

         (a) Notwithstanding anything else set forth herein, if an Auction Date
is not a Business Day because the New York Stock Exchange is closed for business
for more than three consecutive Business Days 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 reason, then the Applicable Rate for the next Dividend Period
will be the Applicable Rate determined on the previous Auction Date, provided
that, if the New York Stock Exchange is closed for such reason for three or less
than three consecutive Business Days, then the Applicable Rate for the next
Dividend Period will be the Applicable Rate determined by Auction on the first
Business Day following such Auction Date.

         (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 for more than three consecutive Business Days 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:

                  (i) the Dividend Payment Date for the affected Dividend Period
         will be the next Business Day on which the Corporation and its paying
         agent, if any, are able to cause the dividend to be paid using their
         reasonable best efforts;

                  (ii) the affected Dividend Period will end on the day it would
         have ended had such event not occurred and the Dividend Payment Date
         had remained the scheduled date; and

                  (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.

                         [Remainder of page left blank]



                                       57


<PAGE>




         IN WITNESS WHEREOF, COHEN & STEERS REIT AND PREFERRED INCOME FUND,
INC. has caused these presents to be signed in its name and on its behalf by its
Vice President and witnessed by its Assistant Secretary as of this       day of
April, 2004.

WITNESS:



By:
    ----------------------------
Name:  Lawrence B. Stoller
Title:  Assistant Secretary


                                      COHEN & STEERS REIT AND PREFERRED
                                      INCOME FUND, INC.



                                      By:
                                         ----------------------------------
                                      Name: Adam M. Derechin
                                      Title: Vice President



         THE UNDERSIGNED, Vice President of the COHEN & STEERS REIT AND
PREFERRED INCOME FUND, INC., who executed on behalf of the Corporation the
foregoing Articles Supplementary hereby acknowledges the foregoing Articles
Supplementary to be the corporate act of the Corporation and hereby certifies to
the best of his knowledge, information, and belief that the matters and facts
set forth herein with respect to the authorization and approval thereof are true
in all material respects under the penalties of perjury.


                                      -------------------------------------
                                      Name: Adam M. Derechin
                                      Title: Vice President



                                       58




</TEXT>
</DOCUMENT>
