<DOCUMENT>
<TYPE>EX-99.A3
<SEQUENCE>5
<FILENAME>dex99a3.txt
<DESCRIPTION>EXHIBIT A3
<TEXT>
<PAGE>

                                                                  EXHIBIT (a)(3)

                   THE FIRST AUSTRALIA PRIME INCOME FUND, INC.

                  Articles Supplementary creating one series of
                         Auction Market, Preferred Stock

                  The First Australia Prime Income Fund, Inc., a Maryland
corporation having its principal Maryland 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 charter, the board of
directors has authorized the issuance of one series of up to 1,000 shares of its
authorized preferred stock, par value $.01 per share, liquidation preference
$100,000 per share, designated Auction Market Preferred Stock, Series D.

                  SECOND: Pursuant to Section 2-411 of the Maryland General
Corporation Law and authority granted by Article IV 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, consistent with, and subject to, the authorization referred to in Article
FIRST of these Articles Supplementary, the terms of the shares of Auction Market
Preferred Stock, Series D.

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

                                   DESIGNATION

                  SERIES D: A series of 1,000 shares of preferred stock, par
value $.01 per share, liquidation preference $100,000 per share, is hereby
designated "Auction Market Preferred Stock, Series D." Each share of Auction
Market Preferred Stock, Series D shall be issued on the Date of Original Issue
(as herein defined); have an Initial Dividend Payment Date (as herein defined)
of August 22, 1989; and have such other preferences, limitations and relative
voting rights, in addition to those required by applicable law or set forth in
the Corporation's Articles of Incorporation applicable to preferred stock of the
Corporation, as are set forth in these Articles Supplementary. The Auction
Market Preferred Stock, Series D shall constitute a separate series of preferred
stock of the Corporation, and each share of Auction Market Preferred Stock,
Series D shall be identical.

                  1. Definitions.

                  Capitalized terms not defined in this paragraph 1 shall have
the respective meanings specified in paragraph 8(a) hereof. Unless the context
or use indicates another or different meaning, the following terms shall have
the following meanings, whether used in the singular or plural:

                  "'AA' Composite Commercial Paper Rate," on any date, means (i)
the interest equivalent of the 30-day rate on commercial paper placed on behalf
of issuers whose corporate bonds are rated "AA" by S&P, or the equivalent of
such rating by S&P or another rating agency,

                                       1

<PAGE>

as such 30-day rate is made available on a discount basis or otherwise by the
Federal Reserve Bank of New York for the Business Day immediately preceding such
date, or (ii) in the event that the Federal Reserve Bank of New York does not
make available such a rate, then the arithmetic average of the interest
equivalent of the 30-day rate on commercial paper placed on behalf of such
issuers, as quoted to the Auction Agent on a discount basis or otherwise by the
Commercial Paper Dealers for the close of business on the Business Day
immediately preceding such date. If any Commercial Paper Dealer does not quote a
rate required to determine the 30-day "AA" Composite Commercial Paper Rate, the
30-day "AA" Composite Commercial Paper Rate will be determined on the basis of
the quotation or quotations furnished by any Substitute Commercial Paper Dealer
or Substitute Commercial Paper Dealers selected by the Corporation to provide
such rate or rates not being supplied by the Commercial Paper Dealer. "Interest
Equivalent" as used herein means the equivalent yield on a 360-day basis of a
discount basis security to an interest bearing security.

                  "Accountant's Confirmation" has the meaning set forth in
Paragraph 7(b)(iii) hereof.

                  "Agent Member" means the member of the Securities Depository
that will act on behalf of an Existing Holder or Potential Holder and that is
identified as such in such holder's Purchaser's Letter.

                  "AMPS" means the Auction Market Preferred Stock, Series D.

                  "AMPS Basic Maintenance Amount" means, as of any date, the
dollar amount equal to the sum of (a) $100,000 times the number of shares of
AMPS then outstanding; (b) the aggregate liquidation preference of other
Preferred Stock then outstanding, if any; (c) the Dividend Coverage Amount; (d)
the aggregate Projected Dividend Amount; (e) the aggregate principal amount of
any then outstanding indebtedness of the Corporation for money borrowed; (f)
projected expenses of the Corporation for the next succeeding three month
period; and (g) the greater of $200,000 or the Corporation's current liabilities
as of such date to the extent not otherwise reflected in any of (a) through (f)
above. The Board of Directors shall have the authority, to the extent permitted
by Maryland law, to adjust, modify, alter or change from time to time the
elements comprising the AMPS Basic Maintenance Amount from those set forth in
these Articles Supplementary if the Rating Agencies advise the Corporation in
writing that the change will not adversely affect their respective then-current
ratings of the AMPS.

                  "AMPS Basic Maintenance Cure Date," with respect to the
failure by the Corporation to maintain the AMPS Basic Maintenance Amount (as
required by paragraph 7(b) hereof) as of each Valuation Date, means the fifth
Business Day following such Valuation Date.

                  "ANNIE MAEs" are securities issued against mortgage pools by
Australian National Mortgage Pool Agency Ltd., an affiliate of Security Pacific
National Bank and are rated by Australian Ratings.

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

                  "Applicable Rate" has the meaning specified in paragraph
3(c)(i) below.

                                       2

<PAGE>

                  "Articles of Incorporation" means the Articles of
Incorporation of the Corporation, as amended and restated from time to time,
including as amended by these Articles Supplementary.

                  "Auction" means each operation of the Auction Procedures.

                  "Auction Agent" means Manufacturers Hanover Trust Company
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 and to act as transfer agent, registrar,
paying agent and redemption agent.

                  "Auction Agent Agreement" has the meaning specified in
paragraph 3(c)(i) below.

                  "Auction Date" has the meaning specified in paragraph 8(a)
below.

                  "Auction Procedures" means the procedures for conducting
Auctions set forth in paragraph 8 below.

                  "Australian Corporate Bonds" means debt obligations of
Australian corporations (other than Australian Government Securities, Australian
Semi-Government Securities, Bank Bills, Eurobonds and Australian Short-Term
Securities) provided, that such debt obligations shall not be deemed to be
Eligible Portfolio Property unless they are issued by the corporations listed
below and such obligations have the following characteristics: (a) the principal
amount outstanding on the date of determination is at least equal to A$50
million, (b) the security is publicly traded, (c) the security is non-callable,
(d) the security is rated at least AA- by S&P, (e) the security has a tender
panel and (f) the maturity date of the security is not later than the 10th
anniversary of the issuance date of such security.

                  Issuers with a public long-term S&P rating or whose parent has
a public long-term S&P rating and there is an explicit guarantee backing the
subsidiary's debt service payments ("Guaranteed Australian Corporate Bonds"):

                  FANMAC Premier Trust Co. No. 6-13
                  Ford Credit Australia
                  National Australia Bank
                  State Bank of Victoria

                  Issuers, which shall be designated in writing from time to
time by S&P, without a public long-term S&P rating but whose parent has a
long-term S&P rating but has not explicitly guaranteed the subsidiary's debt
service payments ("Non-Guaranteed Corporate Bonds").

In addition, if the determination is being made for S&P, (a) not more than 10%
of the aggregate Market Value of the Eligible Portfolio Property of the
Corporation can consist of Australian Corporate Bonds issued by a single issuer,
(b) not more than 50% (if the issue is rated AAA by S&P) or 33.3% (if the issue
is rated AA or A by S&P) or 20% (if the issue is rated BBB by S&P) of the
aggregate Market Value of the Eligible Portfolio Property of the Corporation can
consist

                                       3

<PAGE>

of Australian Corporate Bonds from issues representing a single industry, (c)
not more than 5% of the then-outstanding principal amount of any one issue can
be included in Eligible Portfolio Property and (d) not more than 20% of the
outstanding aggregate principal amount of the Australian Corporate Bonds held by
the Corporation and included in Eligible Portfolio Property shall be comprised
of securities with a then-outstanding issue size of less than A$150 million.

                  The Board of Directors shall have the authority to adjust,
modify, alter or change from time to time the list of securities and eligibility
criteria as set forth above if each Rating Agency advises the Corporation in
writing that the change or specification will not adversely affect its
then-current rating of the AMPS

                  "Australian Currency" means such coin or currency of Australia
as at the time shall be legal tender for payment of public and private debts

                  "Austalian Ratings" means Australian Ratings Pty Ltd or its
successors.

                  "Australian Government Securities" means all publicly traded
securities issued and guaranteed by the Government of the Commonwealth of
Australia with a fixed maturity (i.e. no perpetuals).

                  "Australian Securities" means ANNIE MAEs, Australian Corporate
Bonds, Australian Government Securities, Australian Semi-Government Securities,
Australian Short-Term Securities, Bank Bills, Eurobonds, MMSs, MTCs, New Zealand
Securities, NMMC Securities.

                  "Australian Semi-Government Securities" means the following
publicly traded semi-government securities with a fixed maturity (i.e. no
perpetuals) and which are explicitly guaranteed by the Commonwealth of Australia
or the respective Australian state, provided, that if the calculation is being
made for Moody's, the then-current rating by Moody's of any outstanding senior
long-term debt issue explicitly guaranteed by the respective Australian state is
identical to the then-current Moody's rating of any senior long-term debt
denominated in the same currency which debt is guaranteed by the Commonwealth of
Australia:

                  1. Electricity Trust of South Australia, a body established
         under the Electricity Trust of South Australia Act 1946 (South
         Australia).

                  2. Gas & Fuel Corporation of Victoria, a corporation
         established under the Gas and Fuel Corporation Act 1950 (Victoria).

                  3. Melbourne & Metropolitan Board of Works, a board
         constituted under section 4 of the Melbourne & Metropolitan Board of
         Works Act 1958 (Victoria).

                  4. New South Wales Treasury Corporation, a corporation
         constituted under section 4 of the Treasury Corporation Act 1983 (New
         South Wales).

                  5. A Territory authority being an authority within the meaning
         of that term under section 43 of the Northern Territory (Self
         Government) Act (Commonwealth)

                                       4





<PAGE>

         provided that the specific issue is guaranteed by the Treasurer of the
         Commonwealth of Australia.

                  6. The State Electricity Commission of Qld, a commission
         constituted under the Electricity Act 1976 (Qld).

                  7. Queensland Treasury Corporation, a corporation established
         under the Treasury Corporation Act 1988 (Qld).

                  8. South Australian Financing Authority an authority
         established under the Government Financing Authority Act 1982 (South
         Australia).

                  9. State Electricity Commission of Victoria, a commission
         established under the State Electricity Commission Act 1958 (Victoria).

                  10. State Energy Commission of Western Australia, a commission
         established under the State Energy Commission Act 1979 (Western
         Australia).

                  11. The Australian Telecommunications Commission, a commission
         established under section 4 of the Telecommunications Act 1975
         (Commonwealth).

                  12. Victorian Public Authorities Finance Agency an agency
         constituted under section 3 of the Victorian Public Authorities Act
         1984 (Victoria).

                  13. Australian Industry Development Corporation a body
         established under Section 5 of the Australian Industries Development
         Corporation Act (Commonwealth).

                  14. South Australian Finance Trust Limited, a body corporate
         proclaimed by the Governor of South Australia to be a semi-government
         authority pursuant to the Public Finance and Audit Act 1987 (South
         Australia).

                  15. The Western Australian Treasury Corporation.

                  16. Hydro-Electricity Commission of Tasmania.

                  17. Tasmanian Public Finance Corp.

                  18. Tasmanian Development Authority.

                  The Board of Directors shall have the authority to adjust,
modify, alter or change from time to time the list of securities as set forth
above if each Rating Agency advises the Corporation in writing that the change
or specification will not adversely affect its then-current rating of the AMPS.

                  "Australian Short-Term Securities" means promissory notes and
other short-term commercial paper issued by Australian institutions rated A-l+
by S&P and Prime-1 by Moody's

                                       5

<PAGE>

or with a long-term rating from S&P at least as high as their then-current
comparable rating of AMPS and with a long-term foreign currency debt rating from
Moody's of at least Aa3.

                  "Authorized Newspaper" means The Wall Street Journal, or if
not published on such date, The New York Times, or if neither of such papers is
published on such date, a newspaper, printed in the English language, of general
circulation in the Borough of Manhattan, The City of New York, that carries
financial news and is customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays.

                  "Bank Bills" means bills of exchange (as defined in the Bills
of Exchange Act of the Commonwealth of Australia) issued, accepted or endorsed
by Australian banks (x) with a rating from S&P at least as high as their
then-current comparable rating of the AMPS and (y) (i) if the Bank Bill has a
remaining term to maturity from the date of determination of 30 days or less,
rated Prime-1 by Moody's, (ii) with a long-term foreign currency debt rating
from Moody's of at least Aa3 or (iii) as otherwise approved in writing by
Moody's.

                  "Board of Directors" means the Board of Directors of the
Corporation or, except as used in paragraph 6 hereof, any duly authorized and
empowered committee thereof.

                  "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 are authorized or obligated by law to close;
provided, that for purposes of determining Valuation Dates, Cure Dates and any
Failure to Cure, "Business Day" means a day on which the New York Stock Exchange
and the Australian Stock Exchange Limited are open for trading and which is not
a Saturday, Sunday or other day on which banks in The City of New York or in
Sydney, Australia are authorized or obligated by law to close.

                  "Cash" means such coin or currency of the United States of
America as at the time shall be legal tender for payment of public and private
debts.

                  "Certificate of Minimum Liquidity" has the meaning specified
in paragraph 7(c)(i) below.

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

                  "Commission" means the Securities and Exchange Commission.

                  "Common Stock" means shares of the common stock, par value
$.01 per share, of the Corporation.

                  "Corporate Bonds" means debt obligations of U.S. corporations
(other than Short-Term Money Market Instruments or U.S. Government Obligations)
rated Aa or better by Moody's or AA or better by S&P, which corporate debt
obligations (a) provide for the periodic payment of interest thereon in cash,
(b) do not provide for conversion or exchange into equity capital at any time
over their respective lives, (c) have been registered under the Securities Act
of 1933, as amended, and (d) have not had notice given in respect thereof that
any such corporate

                                       6

<PAGE>

debt obligations are the subject of an offer by the issuer thereof of exchange
or tender for cash, securities or any other type of consideration (except that
corporate debt obligations in an amount not exceeding 10% of the aggregate value
of the Corporation's assets at any time shall not be subject to the provisions
of this clause (d)). In addition, no corporate debt obligation held by the
Corporation shall be deemed a Corporate Bond (i) if it fails to meet the
criteria in column (1) below or (ii) to the extent (and only to the
proportionate extent) the acquisition or holding thereof by the Corporation
causes the Corporation to exceed any applicable limitation set forth in column
(2) or (3) below as of any relevant date of determination (provided that in the
event that the Corporation shall exceed any such limitation, the Corporation
shall designate, in its sole discretion, the particular Corporate Bond(s) and/or
portions thereof which shall be deemed to have caused the Corporation to exceed
such limitation):

<TABLE>
<CAPTION>
                           Column 1                   Column 2                    Column 3
                           --------                   --------                    --------

                                                                              Maximum Percent of
                                                 Maximum Percent of         Value of Corporation
                                                Value of Corporation          Assets, Including
                            Minimum               Assets, Including           Eligible Portfolio
                            Original              Eligible Portfolio         Property, Invested in
Rating                    Issue Size of         Property, Invested in          any One Industry
(1)                        Each Issue             any One Issuer (2)             Category (2)
------------------  -----------------------  ---------------------------  ----------------------------
                        ($ in millions)
<S>                 <C>                      <C>                          <C>
Aaa/AAA                      $100                      10.0%                        50.0%
Aa/AA                         100                      10.0                         33.3
</TABLE>

(1)  In the event that a Corporate Bond has received a different rating from
     each of the Rating Agencies, the lower of the two ratings will be
     controlling. Rating designations include (+) or (-) modifiers to the rating
     where appropriate.

(2)  The referenced percentages represent maximum cumulative totals for the
     related rating category and each lower rating category.

The Board of Directors shall be authorized to adjust, modify, alter or change
from time to time the assets (and/or the characteristics thereof) included
within the definition of Corporate Bonds for purposes of determining compliance
with the AMPS Basic Maintenance Amount to encompass other assets constituting,
and/or other characteristics of, corporate debt obligations from those set forth
in these Articles Supplementary if the Rating Agencies advise the Corporation in
writing that the change will not adversely affect their respective then-current
ratings of the AMPS.

                  "Corporation" means The First Australia Prime Income Fund,
Inc.

                  "Cure Date" means the AMPS Basic Maintenance Cure Date or the
1940 Act Cure Date, as the case may be.

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

                                       7

<PAGE>

                  "Deposit Securities" means Cash, U. S. Government Obligations
and Short-Term Money Market Instruments. Except for purposes of determining
compliance with the AMPS Basic Maintenance Amount, each Deposit Security shall
bc deemed to have a value equal to its principal or face amount payable at
maturity plus any interest payable thereon after delivery of such Deposit
Security but only if payable on or prior to the applicable payment date in
advance of which the relevant deposit is made.

                  "Discount Factor" means, for any asset held by the
Corporation, the number set forth opposite each such type of asset in the
following table or such other factor required under the guidelines established
by the Rating Agencies from time to time (it being understood that any asset
held by the Corporation and not listed in the following table or as provided in
writing by the Rating Agencies shall have a Discounted Value of zero):

<TABLE>
<CAPTION>
                                                                                    Moody's              S&P
                                                                                    Discount           Discount
Type of Eligible Portfolio Property                                                  Factor             Factor
-----------------------------------                                              --------------     --------------
<S>                                                                              <C>                <C>
Cash and Short-Term Money Market Instruments                                           1.00             1.00

Australian Government Securities:
     with a current outstanding issue size less than A$100,000,000 and with a
     remaining term to maturity equal to or longer than 46 days from the date
     of determination                                                                  1.85             1.50(4)

     with a current outstanding issue size of at least A$100,000,000 but less
     than or equal to A$150,000,000 and with a remaining term to maturity equal
     to or longer than 46 days from the date of determination                          1.85             1.40

     with a current outstanding issue size greater than A$150,000,000 and with a
     remaining term to maturity equal to or longer than 46 days from the date
     of determination                                                                  1.60             1.40

     with any current outstanding issue size and with a remaining term to
     maturity shorter than 46 days from the date of determination                      1.00             1.00(4)

Australian Semi-Government Securities (5):
     with a current outstanding issue size less than A$100,000,000 and with a
     remaining term to maturity equal to or longer than 46 days from the date
     of determination                                                                  1.85             1.55(4)

     with a current outstanding issue size of at least A$100,000,000 but less
     than or equal to A$150,000,000 and with a remaining term to maturity equal
     to or longer than 46 days from the date of determination                          1.85             1.45
</TABLE>

                                       8

<PAGE>

<TABLE>
<CAPTION>
                                                                                    Moody's             S&P
                                                                                    Discount          Discount
Type of Eligible Portfolio Property                                                  Factor            Factor
-----------------------------------                                              --------------    --------------
<S>                                                                              <C>               <C>
     with a current outstanding issue size greater than A$150,000,000 and with a
     remaining term to maturity equal to or longer than 46 days from the date
     of determination                                                                  1.60             1.45

     with any current outstanding issue size and with a remaining term to
     maturity shorter than 46 days from the date of determination                      1.00             1.00(4)

Australian Semi-Government Securities (Tasmanian) (6):
     with a current outstanding issue size less than A$100,000,000 and with a
     remaining term to maturity equal to or longer than 46 days from the date
     of determination                                                                  1.94             1.60(4)

     with a current outstanding issue size of at least A$100,000,000 but less
     than or equal to A$150,000,000 and with a remaining term to maturity equal
     to or longer than 46 days from the date of determination                          1.94             1.50

     with a current outstanding issue size greater than A$150,000,000 and with a
     remaining term to maturity equal to or longer than 46 days from the date
     of determination                                                                  1.69             1.50

     with any current outstanding issue size and with a remaining term to
     maturity shorter than 46 days from the date of determination                      1.05             1.00(4)

Bank Bills:
     with maturities of less than or equal to 46 days from the last Valuation
     Date at which the AMPS Basic Maintenance Amount was met                           1.00             1.00

     with maturities of 47-56 days from the last Valuation Date on which the
     AMPS Basic Maintenance Amount was met                                             1.00             1.40

     with maturities of 57-90 days from the last Valuation Date on which the
     AMPS Basic Maintenance Amount was met                                             1.35             1.40

     with maturities of 91-180 days from the last Valuation Date on which the
     AMPS Basic Maintenance Amount was met                                             1.35             1.45
</TABLE>

                                       9

<PAGE>

<TABLE>
<CAPTION>
                                                                                    Moody's              S&P
                                                                                    Discount           Discount
Type of Eligible Portfolio Property                                                  Factor             Factor
-----------------------------------                                              --------------     --------------
<S>                                                                              <C>                <C>
Australian Currency                                                                    1.43              1.57(7)

Guaranteed Eurobonds:
     with a current outstanding issue size less than or equal to A$100 million
     with a remaining term to maturity of more than 56 days                           _____              2.00

     with a current outstanding issue size exceeding A$l00 million with a
     remaining term to maturity of more than 56 days                                   ____              1.90

     with any current outstanding issue size and with a remaining term to
     maturity of less than 56 days                                                     ____              1.00

Non-Guaranteed Eurobonds:
     with a current outstanding issue size less than or equal to A$100 million
     with a remaining term to maturity of more than 56 days                            ____              2.15

     with a current outstanding issue size exceeding A$100 million with a
     remaining term to maturity of more than 56 days                                   ____              2.00

     with any current outstanding issue size and with a remaining term to
     maturity of less than 56 days                                                     ____              1.00

Guaranteed Australian Corporate Bonds:
     with a current outstanding issue size less than or equal to A$150 million
     with a remaining term to maturity of more than 56 days                            ____              1.70

     with a current outstanding issue size exceeding A$150 million with a
     remaining term to maturity of more than 56 days                                   ____              1.60

     with any current outstanding issue size and with a remaining term to
     maturity of less than 56 days                                                     ____              1.00

Non-Guaranteed Australian Corporate Bonds:
     with a current outstanding issue size less than or equal to A$150 million
     with a remaining term to maturity of more than 56 days                            ____              1.80
</TABLE>

                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                                                    Moody's              S&P
                                                                                    Discount           Discount
Type of Eligible Portfolio Property                                                  Factor             Factor
-----------------------------------                                              --------------     --------------
<S>                                                                              <C>                <C>
with a current outstanding issue size exceeding A$150 million with a remaining
term to maturity of more than 56 days                                                  ____              1.70

with any current outstanding issue size and with a remaining term to maturity
of less than 56 days                                                                   ____              1.00

GNMA Certificates with fixed interest rates                                             (1)              1.30
GNMA Certificates with adjustable interest rates                                       1.59              1.30
FHLMC and FNMA Certificates with fixed interest rates                                   (1)              1.35
FHLMC and FNMA Certificates with adjustable interest rates                             1.58              1.35
FHLMC Multifamily Securities                                                            (1)              1.65
FHLMC and FNMA Certificates with variable interest rates                                (1)              1.35
GNMA Graduated Payment Securities                                                     (1)(2)             1.50(3)
U.S. Government Obligations having a remaining term to maturity of 90 days or
     less                                                                              1.08              1.00
U.S. Government Obligations having a remaining term to maturity of more than 90
     days but not more than one year                                                   1.08              1.25
U.S. Government Obligations having a remaining term to maturity of more than
     one year but not more than two years                                              1.14              1.25
U.S. Government Obligations having a remaining term to maturity of more than
     two years but not more than three years                                           1.19              1.25
U.S. Government Obligations having remaining term to maturity of more than
     three years but not more than four years                                          1.25              1.25
U.S. Government Obligations having a remaining term to maturity of more than
     four years but not more than five years                                           1.31              1.25
U.S. Government Obligations having a remaining term to maturity of more than
     five years but not more than seven years                                          1.39              1.33
U.S. Government Obligations having a remaining term to maturity of more than
     seven years but not more than 10 years                                            1.47              1.33
U.S. Government obligations having a remaining term to maturity of more than 10
     years but not more than 15 years                                                  1.53              1.35
U.S. Government Obligations having a remaining term to maturity of more than 15
     years but not more than 20 years                                                  1.60              1.45
U.S. Government Obligations having a remaining term to maturity of more than 20
     years but not more than 30 years                                                  1.61              1.45
</TABLE>

-----------------
(1)  The Discount Factor determined therefor in writing by the Rating Agencies.

(2)  Unless the Rating Agencies shall agree, GNMA Graduated Payment Securities
     with a coupon rate lower than 5% shall not be included in Eligible
     Portfolio Property.

                                       11


<PAGE>

(3)  A Discount Factor of 1.50 applies in the case of GNMA Graduated Payment
     Securities as to which the Corporation notifies the Auction Agent that
     scheduled principal payments are being made to holders; in the case of GNMA
     Graduated Payment Securities as to which the Fund notifies the Auction
     Agent that scheduled principal payments are not being made to holders, the
     Discount Factor shall be that which is determined in writing by the Rating
     Agencies.

(4)  Provided that the current outstanding issue size (as determined on each
     Quarterly Valuation Date) is equal to or greater than A $10,000,000.

(5)  Excluding securities of Hydro-Electricity Commission of Tasmania, Tasmanian
     Public Finance Corp. and Tasmanian Development Authority.

(6)  Securities of Hydro-Electricity Commission of Tasmania, Tasmanian Public
     Finance Corp. and Tasmanian Development Authority.

(7)  If the determination is being made (A) while the Corporation is not in
     compliance with the Credit Line Test as defined under the definition of
     Forward Contract or (B) following a Valuation Date related to a Failure to
     Cure, but prior to the consummation of any mandatory redemption required
     pursuant to paragraph 5(b), if a Forward Contract shall not be in place as
     provided in the definition of Forward Contract, then the Discount Factor
     will be 1.65 for all currency attributable to Australian Government
     Securities, Australian Semi-Government Securities and Bank Bills and will
     be 1.75 for all currency attributable to Australian Corporate Bonds and
     Eurobonds.

The Board of Directors shall have the authority to adjust, modify, alter or
change from time to time the initial Discount Factor as set forth above applied
to determine the Discounted Value of any item of Eligible Portfolio Property or
may specify from time to time a Discount Factor for any asset constituting
Eligible Portfolio Property if each Rating Agency advises the Corporation in
writing that the change or specification will not adversely affect its
then-current rating of the AMPS .

                  "Discounted Value," with respect to any asset held by the
Corporation, means the quotient of the Market Value of such asset divided by the
applicable Discount Factor; provided that in no event shall the Discounted Value
of any asset constituting Eligible Portfolio Property as of any date exceed the
unpaid principal balance or face amount of such asset as of that date; provided
further that the Discounted Value of all Australian Securities shall be further
discounted by the Discount Factor applicable to Australian Currency.

                  "Dividend Coverage Amount," as of any date of determination,
means:

                         (a)  the aggregate of the product of

                              (i)   the number of shares of AMPS outstanding on
                  such date multiplied by $100,000,

                              (ii) the Applicable Rate in effect as of such
                  date, and

                                       12



<PAGE>

                       (iii) a fraction, the numerator of which is the number of
               days in the Dividend Period ending on the next Dividend Payment
               Date (determined by including the first day thereof but excluding
               the last day thereof) and the denominator of which is 360;

                       plus

                   (b) dividends projected to accumulate from the last dividend
payment date with respect to each series of Preferred Stock, not including the
AMPS, until the next dividend payment date for such series;

                       plus

                   (c) dividends accumulated but unpaid for any prior dividend
periods with respect to any shares of Preferred Stock;

                       less

                   (d) the combined value of any Dividend Coverage Assets
irrevocably deposited by the Corporation for the payment of dividends on the
AMPS and other Preferred Stock, if any.

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

               "Dividend Payment Date" means each date of payment of dividends
as provided in paragraph 3(b) below.

               "Dividend Period" means the Initial Dividend Period and each
subsequent period commencing on a Dividend Payment Date and ending on and
including the calendar day prior to the next Dividend Payment Date.

               "dollar" or "$" shall mean U.S. dollars. Amounts in Australian or
New Zealand dollars shall be converted to U.S. dollars at the rates reported by
Morgan Guaranty Trust Company for the date of determination or such other source
as shall have been approved in writing by the Rating Agencies.

               "Eligible Portfolio Property" means Australian Government
Securities, Australian Semi-Government Securities, Cash, Bank Bills, Australian
Currency, U.S. Government Obligations, Short-Term Money Market Instruments, FNMA
Certificates, FHLMC Certificates, FHLMC Multifamily Securities, GNMA
Certificates, and GNMA Graduated Payment Securities and, if the calculation is
being made for S&P, Eurobonds and Australian Corporate Bonds; provided, (i) if
the determination is being made for Moody's, (x) that not more than 20% in the
aggregate of the total Market Value of Eligible Portfolio Property shall consist
of Australian Government Securities and/or Australian Semi-Government Securities
with a current outstanding

                                       13

<PAGE>

issue size less than A$150,000,000 and (y) that not more than 10% in the
aggregate of the total Market Value of Eligible Portfolio Property shall consist
of Australian Semi-Government Securities described under items 16, 17 and 18 of
such definition and (ii) if the determination is being made for S&P that no
Australian Government Securities or Australian Semi-Government Securities
contained in Eligible Portfolio Property shall have a current outstanding issue
size less than A$10,000,000 (as determined on each Quarterly Valuation Date);
provided further that, if the determination is being made for S&P, not more than
10% in the aggregate of the total Market Value of the Eligible Portfolio
Property shall consist of Australian Semi-Government Securities issued by any
single issuer and that not more than 20% in the aggregate of the total Market
Value of the Eligible Portfolio Property shall consist of Australian
Semi-Government Securities guaranteed by any single state (except that in the
case of each of Victoria and New South Wales, such percentage shall be 25%). The
Board of Directors shall have the authority to specify from time to time other
assets as Eligible Portfolio Property if the Rating Agencies advise the
Corporation in writing that the specification will not adversely affect their
respective then-current ratings of the AMPS.

               "Eurobonds" means debt securities which are denominated in
Australian Currency, are issued by the issuers listed below and which have the
following characteristics: (a) the principal amount outstanding on the date of
determination is at least equal to A$50 million, (b) the security is publicly
traded, (c) the security is non-callable, (d) the security is rated at least AA-
by S&P and (e) the maturity date of the security is not later than the 10th
anniversary of the issuance date of such security.

               Issuers with a public long-term S&P rating or whose parent has a
public long-term S&P rating and there is an explicit guarantee backing the
subsidiary's debt service payments ("Guaranteed Eurobonds"):

                       Australian Telecom
                       Finnish Export Credit Corp.
                       National Australia Bank
                       State Bank of New South Wales.
                       State Electricity of Victoria
                       Swedish Export Credit Corp.

               Issuers, which shall be designated in writing from time to time
by S&P, without a public long-term S&P rating but whose parent has a long-term
S&P rating but has not explicitly guaranteed the subsidiary's debt service
payments ("Non-Guaranteed Eurobonds").

In addition, if the determination is being made for S&P, (a) not more than 10%
of the aggregate Market value of the Eligible Portfolio Property of the
Corporation can consist of Eurobonds from a single issuer, (b) not more than 50%
(if the issue is rated AAA by S&P) or 33.3% (if the issue is rated AA or A by
S&P) or 20% (if the issue it rated BBB by S&P) of the aggregate Market Value of
the Eligible Portfolio Property of the Corporation can consist of Eurobonds from
issues representing a single industry, (c) not more than 5% of the then
outstanding principal amount of any one issue can be included in Eligible
Portfolio Property and (d) not more than 20% of the outstanding aggregate
principal amount of the Eurobonds held by the Corporation and included

                                       14

<PAGE>

in Eligible Portfolio Property shall be comprised of securities with an
outstanding issue size of less than A$100 million.

               The Board of Directors shall have the authority to adjust,
modify, alter or change from time to time the list of securities and eligibility
criteria as set forth above if each Rating Agency advises the Corporation in
writing that the change or specification will not adversely affect its
then-current rating of the AMPS.

               "Failure to Cure" shall mean a failure by the Corporation to
maintain the AMPS Basic Maintenance Amount or 1940 Act AMPS Asset Coverage
Requirement, as the case may be, which failure is not cured on or before the
third day following the related Valuation Date as reflected in a Portfolio
Valuation Report delivered to S&P and confirmed by the Corporation's Independent
Accountants.

               "FANMAC Certificates" are securities issued by a trustee against
housing loans made through the New South Wales Department of Housing and consist
of a series of closed trusts or pools. The mortgage manager is the First
Australian National Mortgage Acceptance Corporation Ltd. ("FANMAC"). FANMAC is
owned partially by the Government of the State of New South Wales with the
remainder owned by other institutions. The Government of the State of New South
Wales has provided the FANMAC Trust with an assurance as to availability of
funds to meet payments. The securities have been rated by Australian Ratings and
S&P. FANMAC securities are subject to a call provision under which borrowers
(mortgagors) can repay early and the investors in a particular pool can be
repaid on a pro rata basis.

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

               "FHLMC Certificate" means a mortgage participation certificate in
physical or book-entry form, the timely payment of interest on and the ultimate
collection of principal of which is guaranteed by FHLMC, and which evidences a
proportional undivided interest in, or participation interest in, specified
pools of fixed-, variable- or adjustable-rate, fully amortizing, level pay
mortgage loans with terms up to 30 years, secured by first liens on one- to
four-family residences.

               "FHLMC Multifamily Security" means a "Plan B Multifamily
Security" in physical or book-entry form, the timely payment of interest on and
the ultimate collection of principal of which is guaranteed by FHLMC, and which
evidences a proportional undivided interest in, or participation interest in,
specified pools of fixed-rate, fully amortizing, level pay mortgage loans with
terms up to 30 year, secured by first priority mortgages on multifamily
residences containing 5 or more units and which are designed primarily for
residential use, the inclusion of which in the Eligible Portfolio Property will
not, in and of itself, impair, or cause the AMPS to fail to retain, the rating
assigned to such AMPS by each of the Rating Agencies, as evidenced by a letter
to such effect from each of the Rating Agencies.

               "FNMA" means the Federal National Mortgage Association, a United
States Government-sponsored private corporation established pursuant to Title
VIII of the Housing and Urban Development Act of 1966, and includes any
successor thereto.

                                       15

<PAGE>

               "FNMA Certificate" means a mortgage pass-through certificate in
physical or book-entry form, the full and timely payment of principal of and
interest on which is guaranteed by FNMA, and which evidences a proportional
undivided interest in specified pools of fixed-, variable- or adjustable-rate,
fully amortizing, level pay mortgage loans with terms up to 30 years, secured by
first liens on 1 to 4 family residences.

               "Forward Contract" means a contract, entered into following a
Failure to Cure, between the Corporation and a commercial bank or other
financial institution whose short-term debt is rated at least A-l+ by S&P or
whose long-term debt is rated at least AA by S&P (an "Eligible Bank"), which
provides that the Corporation will sell a specified amount of Australian
Currency to such Eligible Bank on a specified date for a specified amount of
U.S. dollars. The date of payment in U.S. dollars shall not be later than the
30th day following the Valuation Date related to the Failure to Cure and the
amount of U.S. dollars shall be sufficient to redeem all shares of AMPS required
to be redeemed. On the Date of Original Issue and on each Quarterly Valuation
Date thereafter, the Corporation will confirm in writing to S&P that the
Corporation has a credit line with an Eligible Bank (the "Credit Line Test").
The Credit Line Test shall be deemed to be satisfied on any date if the
Corporation has delivered such confirmation to S&P on the Date of Original Issue
or the most recent Quarterly Valuation Date, as the case may be. The Board of
Directors shall have the authority, to the extent permitted by Maryland law, to
adjust, modify, alter or change from time to time the elements comprising the
Forward Contract from those set forth in these Articles Supplementary if S&P
advises the Corporation in writing that the change will not adversely affect its
then-current rating of the AMPS.

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

               "GNMA Certificate" means a fully modified pass-through
certificate in physical or book-entry form, the full and timely payment of
principal of and interest on which is guaranteed by GNMA and which evidences a
proportional undivided interest in specified pools of fixed- variable- or
adjustable-rate, fully amortizing, level pay mortgage loans with terms up to 30
years, secured by first liens on 1 to 4 family residences.

               "GNMA Graduated Payment Security" means a fully modified
pass-through certificate in physical or book-entry form, the full and timely
payment of principal of and interest on which is guaranteed by GNMA, which
obligation is backed by the full faith and credit of the United States, and
which evidences a proportional undivided interest in specified pools of
graduated payment mortgage loans with terms up to 30 years, with payments that
increase annually at a predetermined rate for up to the first five or ten years
of the mortgage loan and that are secured by first-priority mortgages on one- to
four-unit residences; provided that such loans shall be past the graduated
payment period.

               "GNMA Multifamily Security" means a fully modified pass-through
certificate in physical or book-entry form, the full and timely payment of
principal of and interest on which is guaranteed by GNMA, which obligation is
backed by the full faith and credit of the United States, and which evidences a
proportional undivided interest in specified pools of fixed-rate mortgage, level
pay loans with terms up to 30 years secured by first-priority mortgages on
multifamily residences, the inclusion of which in the Eligible Portfolio
Property will not, in and

                                       16

<PAGE>

of itself, impair or cause the AMPS to fail to retain the rating assigned to
such AMPS by each of the Rating Agencies as evidenced by a letter to such effect
from each of the Rating Agencies.

               "Holder" means a Person in whose name one or more outstanding
shares of AMPS are registered on the Stock Books.

               "Independent Accountants" means the Corporation's independent
accountants, which shall be a nationally recognized accounting firm.

               "Industry Category" means, as to any Corporate Bond, any of the
industry categories set forth in the following table:

               1.   Aerospace and Defense
               2.   Airlines
               3.   Automobile/Auto Parts/Truck Manufacturing
               4.   Banks/Savings and Loans
               5.   Finance Companies/Consumer Credit
               6.   Financial Services - Brokerage/Syndication/Leasing
               7.   Building/Construction
               8.   Real Estate Development/REITS
               9.   Broadcasting - TV, Cable, and Radio
               10.  Publishing
               11.  Electronics/Computers
               12.  Electrical Equipment
               13.  Diversified/Conglomerate Services
               14.  Diversified/Conglomerate Manufacturing
               15.  Leisure/Amusement/Motion Pictures
               16.  Agricultural Chemicals
               17.  Chemicals
               18.  Food
               19.  Beverage
               20.  Tobacco
               21.  Retail
               22.  Consumer Durable Goods/Home Furnishings
               23.  Grocery/Convenience Stores
               24.  Healthcare/Drugs/Hospital Supplies
               25.  Childcare/Toys
               26.  Personal Care Products/Cosmetics
               27.  Hotel/Gaming
               28.  Insurance Companies
               29.  Machinery
               30.  Metals/Mining
               31.  Oil/Natural Gas
               32.  Oil Services
               33.  Packaging/Containers
               34.  Paper/Forest Products/Printing
               35.  Pollution Control/Waste Removal

                                       17

<PAGE>

               36.  Electric Utilities
               37.  Other Utilities
               38.  Rail/Trucking/Overnight Delivery
               39.  Telephone/Communications
               40.  Textiles/Apparel
               41.  Transportation
               42.  Agricultural/Agricultural Equipment
               43.  Miscellaneous

The Board of Directors shall have the authority to change the industry
categories applicable with respect to the Corporation from those set forth in
these Articles Supplementary if the Rating Agencies advise the Corporation in
writing that the change will not adversely affect their respective then-current
ratings of the AMPS.

               "Initial Dividend Payment Date" has the meaning set forth in
paragraph 3(b) below.

               "Initial Dividend Period "has the meaning specified in paragraph
3(b) below.

               "Investment Company Act" means the Investment Company Act of 1940
(15 U.S. Code (S) 80 et seq.), as, amended from time to time.

               "Lien" has the meaning set forth in paragraph 3(d)(iv) below.

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

                        (a) as to Australian Securities, the product of (i) the
         outstanding aggregate principal balance of the security as determined
         by the Corporation by any method which the Corporation believes
         reliable, as of the applicable Reporting Date and (ii) the dollar value
         of the lower of two bid prices per dollar of outstanding principal
         amount as of such applicable Reporting Date for such security, provided
         by two recognized securities dealers in Australia making a market in
         such security (as evidenced by such dealer's participation in the
         dealer panel for such security) to the Corporation or its agent, at
         least one of which shall be provided in writing or by telecopy, telex,
         other electronic transcription, computer obtained quotation reducible
         to written form or similar means (and in turn provided to the
         Corporation by any such means by such agent); plus, (x) if the
         determination is being made for Moody's, accrued interest to the date
         of determination if the next interest coupon on such security is due
         and payable within 56 days of such date of determination and (y) if the
         determination is being made for S&P, accrued interest.

                        (b) as to GNMA Certificates, GNMA Graduated Payment
         Securities, FNMA Certificates, FHLMC Certificates and FHLMC Multifamily
         Securities, the product of (i) the aggregate unpaid principal amount of
         the mortgage loans evidenced by each such certificate or security, as
         the case may be, as of the close of business in New York City on the
         last Business Day prior to such date of determination and (ii) the
         lower of the bid prices for the same kind of certificate or, if not
         available, some other security

                                       18

<PAGE>

         having, as nearly as practicable, comparable interest rates and
         maturities, as quoted to the Corporation by two nationally recognized
         securities dealers, who are members of the National Association of
         Securities Dealers selected by the Corporation and making a market
         therein, with at least one such quotation in writing plus, (x) if the
         determination is being made for Moody's, accrued interest to the date
         of determination if the next interest coupon on such security is due
         and payable within 56 days of such date of determination and (y) if the
         determination is being made for S&P, accrued interest;

                        (c) as to Australian Currency and Bank Bills and to
         Cash, demand deposits and bankers' acceptances included in Short-Term
         Money Market Instruments, the face value thereof; and

                        (d) as to next Business Day repurchase agreements, the
         face value thereof plus accrued interest.

Without amending the Articles of Incorporation, (i) the calculation of the
Market Value of an asset constituting Eligible Portfolio Property may be changed
to any method recognized by the Rating Agencies from that set forth in these
Articles Supplementary and (ii) a method recognized by the Rating Agencies for
calculating the Market Value of any asset identified as Eligible Portfolio
Property may be specified if the Rating Agencies advise the Corporation in
writing that the change or specification will not adversely affect their
respective then-current ratings of the AMPS.

               "Maximum Applicable Rate" at any Auction will be the rate
obtained by multiplying the 30 day "AA" Composite Commercial Paper Rate on the
date of such Auction by the Applicable Percentage determined as set forth below
based on the lower of the credit rating or ratings assigned to the AMPS by
Moody's and S&P (or if Moody's or S&P or both shall not make such rating
available, the equivalent of either or both of such ratings by a Substitute
Rating Agency or two Substitute Rating Agencies or, in the event that only one
such rating shall be available, the percentage will be based on such rating).

                                                   Applicable
                     Credit Rating                 Percentage
----------------------------------------------------------------

S&P                     Moody's
---                     -------

AA-or Above             "aa3" or Above                150%
A-to A+                 "a3" to "a1"                  160%
BBB- to BBB+            "baa3" to baa1"               250%
Below BBB-              Below "baa3"                  275%

               The Corporation shall take all reasonable action necessary to
enable S&P and Moody's to provide a rating for the AMPS. If either S&P or
Moody's shall not make such a rating available, or neither S&P nor Moody's shall
make such a rating available, Merrill Lynch, Pierce, Fenner & Smith Incorporated
or its respective affiliates and successors, after consultation with the
Corporation, shall select a nationally recognized securities rating agency or
two

                                       19

<PAGE>

nationally recognized securities rating agencies to act as a Substitute Rating
Agency or Substitute Rating Agencies, as the case may be.

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

               "Moody's" means Moody's Investors Service, Inc. or its
successors.

               "MMSs" are mortgage backed securities issued against mortgage
pools by MGICA Securities Ltd., a wholly-owned subsidiary of AMP Society Ltd.,
an Australian insurance company, and rated by Australian Ratings.

               "MTCs" are securities issued against specific mortgages by a
trustee and are similar to "pass-through" certificates. MTCs are issued on a
continuous basis, insured by Australian insurance companies against both
mortgage default and an early call, and rated by Australian Ratings.

               "New Zealand Securities" means those New Zealand government,
semi-government and other securities determined from time to time in writing by
the Rating Agencies.

               "NMMC Securities" National Mortgage Market Corporation Ltd.
("NMMC") has issued both AUSSIE MACs, which are medium term bearer securities,
and National Mortgage Market Bonds. NMMC is a private company which is owned
partially by the Government of the State of Victoria and partially by private
institutions. Both AUSSIE MACs and National Mortgage Bonds are rated by
Australian Ratings.

               "Notice of Redemption" has the meaning specified in paragraph
5(e) below.

               "Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer, the Secretary, any Assistant Treasurer, any
Assistant Secretary or Assistant Controller of the Corporation.

               "Officers' Certificate" means a certificate signed by an Officer
of the Corporation.

               "Other AMPS" means the auction market preferred stock or
remarketed preferred stock or similar adjustable rate preferred stock of the
Corporation other than the AMPS.

               "Other Permitted Assets" means Australian Corporate Bonds,
Eurobonds, Australian Short Term Securities, New Zealand Securities, FANMAC
Certificates, NMMC Securities, MTCs, MMSs, ANNIE MAEs, GNMA Multifamily
Securities and Corporate Bonds.

               "Paying Agent" means Manufacturers Hanover Trust Company and its
successors or any other paying agent appointed by the Corporation to perform the
functions performed by the Paying Agent.

                                       20

<PAGE>

               "Person" means an individual, a corporation, a company, a
voluntary association, a partnership, a trust, an unincorporated organization or
a government or any agency, instrumentality or political subdivision thereof.

               "Preferred Stock" means the preferred stock of the Corporation
including the AMPS.

               "Portfolio Calculation" shall have the meaning specified in
paragraph 7(b)(ii).

               "Portfolio Valuation Report" means a report executed by the
Corporation and delivered to the Auction Agent and the Rating Agencies with
respect to the valuation (in U.S. dollars) of the Eligible Portfolio Property,
as described in paragraph 7 hereof; provided, that all or any portion of any
such report may be prepared by the custodian for the Eligible Portfolio
Property, EquitiLink Australia Limited, The Prudential Insurance Company of
America, Prudential Mutual Fund Management, Inc. and/or EquitiLink International
Management Limited; provided further that such Portfolio Valuation Report may be
delivered to the Auction Agent and the Rating Agencies in summary form, however
the Corporation shall retain a copy of the full Portfolio Valuation Report in
its files and make such report available to its Independent Accountants and the
Rating Agencies upon their request.

               "Projected Dividend Amount" for the AMPS and other Preferred
Stock, if any, shall mean, if the date of determination is a Valuation Date, the
amount of dividends, based on the number of shares of AMPS and other Preferred
Stock, if any, outstanding on such Valuation Date, projected to accumulate on
such shares from the next succeeding Dividend Payment Date or Dates until the
63rd day after such Valuation Date, at the following dividend rates:

                        (a) if the Valuation Date is the Date of Original Issue
         or a Dividend Payment Date, for the period beginning on (and including)
         the first following Dividend Payment Dates and ending on (and
         including) the 63rd day following such Valuation Date, the product of
         2.40 and (x) the Maximum Applicable Rate on the Date of Original Issue
         (in the case of the Date of Original Issue) or (y) the Maximum
         Applicable Rate as of the last occurring Auction Date (in the case of
         any Dividend Payment Date); and

                        (b) if such Valuation Date is not the Date of Original
         Issue or a Dividend Payment Date, (i) for the period beginning on (and
         including) the first following Dividend Payment Dates and ending on
         (but not including) the sooner of the second following Dividend Payment
         Date for such shares or the 64th day following such Valuation Date, the
         product of 2.40 and (x) the Maximum Applicable Rate on the Date of
         Original Issue (in the case of a Valuation Date occurring prior to the
         first Auction Date) or (y) the Maximum Applicable Rate on the last
         occurring Auction Date (in the case of any other Valuation Date), (ii)
         for the period, if any, beginning on (and including) the second
         following Dividend Payment Date and ending on (but not including) the
         64th day following such Valuation Date, the product of 2.40 and the
         rate specified in clause (x) or (y) above and (iii) for the period, if
         any, beginning on (and including) the third following

                                       21

<PAGE>

         Dividend Payment Date and ending on (but not including) the 64th day
         following such Valuation Date, the product of 2.94 and the rate
         specified in clause (x) or (y) above.

If the date of determination is not a Valuation Date, then the Projected
Dividend Amount on such date of determination shall equal the Projected Dividend
Amount therefor on the immediately preceding Valuation Date, adjusted to reflect
any decrease in the number of shares of AMPS outstanding. The calculation of the
Projected Dividend Amount may be made on bases other than those set forth above
if the Rating Agencies shall have advised the Corporation in writing that the
revised calculation of the Projected Dividend Amount would not adversely affect
their respective then-current ratings of the AMPS.

               "Purchaser's Letter" shall mean a letter in which a prospective
purchaser agrees, among other things, that ownership of shares of AMPS will be
maintained in book entry form by the Securities Depository for such prospective
purchaser's Agent Member, and which is required to be executed by each purchaser
of shares of AMPS.

               "Quarterly Valuation Date" means, so long as any shares of AMPS
are outstanding, the last Valuation Date of January, April, July and October of
each year.

               "Rating Agencies" means Moody's and S&P or their successors so
long as such rating agency is then rating the AMPS.

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

               "Securities Depository" means The Depository Trust Company and
any successor thereto.

               "Scheduled Payment Day" has the meaning specified in paragraph
3(b) below.

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

                        (a) demand deposits in, certificates of deposit of, and
         bankers' acceptances issued by, any depository institution, the
         deposits of which are insured by the Federal Deposit Insurance
         Corporation or the Federal Savings and Loan Insurance Corporation,
         provided that, at the time of the Corporation's investment therein, the
         commercial paper or other unsecured short-term debt obligations of such
         depository institution are rated Prime-1 by Moody's and A-l+ by S&P and
         are issued by institutions whose long-term debt obligations are rated
         at least A-2 by Moody's;

                                       22

<PAGE>

                        (b) repurchase obligations with respect to a U.S.
         Government Obligation, FNMA Certificate, FHLMC Certificate or GNMA
         Certificate entered into with a depository institution, (x) the
         deposits of which are insured by the Federal Deposit Insurance
         Corporation or the Federal Savings and Loan Insurance Corporation, (y)
         the commercial paper or other unsecured short-term debt obligations of
         which are rated Prime-1 by Moody's and A-l+ by S&P, and (z) the
         long-term debt obligations of which are rated at least A-2 by Moody's,
         which securities must be repurchased within one Business Day from the
         date such repurchase obligation was entered into; and

                        (c) commercial paper rated at the time of the
         Corporation's investment therein Prime-1 by Moody's and A-l+ by S&P and
         issued by institutions whose long-term debt obligations are rated at
         least A-2 by Moody's.

               "S&P" means Standard & Poor's Corporation or any successor
thereto.

               "Stock Books" means the stock transfer books of the Corporation
maintained by the Paying Agent with respect to the shares of AMPS.

               "Subsequent Dividend Period" has the meaning specified in
paragraph 3(b) below.

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

               "Substitute Rating Agency" and "Substitute Rating Agencies" mean
a nationally recognized securities rating agency or two nationally recognized
securities rating agencies, respectively, selected by Merrill Lynch, Pierce,
Penner & Smith Incorporated, or its affiliate or successor, in consultation with
the Corporation to act as the substitute rating agency or substitute rating
agencies, as the case may be, to determine the credit ratings of the shares of
AMPS.

               "Type I Corporate Bonds" as of any date means Corporate Bonds
whose Moody's rating is Aaa and whose S&P rating is AAA as of such date.

               "Type II Corporate Bonds" as of any date means Corporate Bonds
whose Moody's rating is at least Aa and whose S&P rating is at least AA+ to AA-
as of such date.

               "U.S. Government Obligations" means direct obligations of the
United States, provided that such direct obligations are entitled to the full
faith and credit of the United States and that any such obligations, other than
United States Treasury Bills, provide for the periodic payment of interest and
the full payment of principal at maturity or call for redemption.

               "Valuation Date" means each Friday of each month or, if such day
is not a Business Day, the next preceding Business Day, provided, that the first
Valuation Date may occur on any other date established by the Corporation;
provided, further, that such date shall not be earlier than 4 Business Days
prior to, and not later than, the Date of Original Issue.

               "Voting Period" has the meaning specified in paragraph 6(b)
below.

                                       23

<PAGE>

               "1940 Act AMPS Asset Coverage Ratio" means, as of the date of
determination, the ratio of the Fund's net assets to its senior securities
representing indebtedness plus the liquidation value of its Preferred Stock,
including the shares of AMPS.

               "1940 Act AMPS Asset Coverage Requirement" means the requirement
that the Corporation maintain, with respect to shares of AMPS, as of the last
Friday of each month in which any shares of AMPS are outstanding, asset coverage
of at least 200% with respect to senior securities representing indebtedness
plus the liquidation value of its Preferred Stock, including the shares of AMPS
(or such other asset coverage as may in the future be specified in or under the
Investment Company Act as the minimum asset coverage for senior securities which
are stock of a closed-end investment company as a condition of paying dividend
on its common stock).

               "1940 Act Cure Date," with respect to the failure by the
Corporation to maintain the 1940 Act AMPS Asset Coverage Requirement (as
required by paragraph 7(a) hereof) as of last Valuation Date of each month,
means the last Valuation Date of the following month.

               2.  Fractional Shares. No fractional shares of AMPS shall be
issued.

               3.  Dividends.

                   (a) Holders of shares of AMPS shall be entitled to receive,
when, as, and if declared by the Board of Directors, out of funds legally
available therefor, cumulative cash dividends at the Applicable Rate per annum
(determined as set forth below) payable on the respective dates set forth below.

                   (b) Dividends on the shares of AMPS shall accumulate from the
Date of Original Issue. Accumulated dividends shall be payable commencing on
August 22, 1989 (the 21st day after the Date of Original Issue), with respect to
the Auction Market Preferred Stock, Series D (hereinafter such date is referred
to as the "Initial Dividend Payment Date") and on each day thereafter which is
the last day of each succeeding 28-day period after such date. If any such last
day (the "Scheduled Payment Day") is not a Business Day or, unless the
Securities Depository shall make dividend payments in same-day funds, the day
succeeding the Scheduled Payment Day is not a Business Day, dividends payable on
such Scheduled Payment Day shall be paid on the first Business Day succeeding
such Scheduled Payment Day that is next succeeded by a day which is also a
Business Day; provided, however, that if the Securities Depository shall make
dividend payments with respect to the shares of AMPS in same-day funds, such
next succeeding day need not be a Business Day. Any date on which a dividend on
the AMPS is payable pursuant to this paragraph 3(b) is herein called a "Dividend
Payment Date". The period beginning on (and including) the Date of Original
Issue and ending on (but not including) the Initial Dividend Payment Date is
referred to herein as the "Initial Dividend Period". Each successive period
commencing on, and including, the Dividend Payment Date for the previous
Dividend Period and ending on and including the calendar day preceding the next
succeeding Dividend Payment Date is referred to herein as a "Subsequent Dividend
Period" and the Initial Dividend Period and each Subsequent Dividend Period
together are sometimes referred to herein as "Dividend Periods." The record date
for the payment of dividends will be the Auction Date immediately preceding the
Dividend Payment Date.

                                       24

<PAGE>

                       (c)  (i)   The Applicable Rate for the Auction Market
Preferred Stock, Series D shall be 9.125% per annum for the Initial Dividend
Period. For the purpose of calculating the rate of dividends per annum payable
on shares of AMPS (the "Applicable Rate") for each Subsequent Dividend Period
the Corporation shall enter into an agreement with the Auction Agent (the
"Auction Agent Agreement"). The Applicable Rate on the shares of AMPS for each
Subsequent Dividend Period shall be determined by the Auction Agent in
accordance with the Auction Agent Agreement, which shall provide that the
Auction Agent will follow the Auction Procedures described in paragraph 8 hereof
to determine the Applicable Rate. In the event there is no Auction Agent on the
Business Day prior to the first day of a Dividend Period, the Applicable Rate
for such Dividend Period shall be equal to the Maximum Applicable Rate that
could have resulted pursuant to the Auction Procedures, as determined by the
Corporation, on such Business Day. If no Auction is held on any Auction Date for
any other reason, the Applicable Rate for the Dividend Period beginning on the
Business Day following such Auction Date shall be equal to the Maximum
Applicable Rate that could have resulted pursuant to the Auction Procedures, as
determined by the Auction Agent (or, if there is no Auction Agent, by the
Corporation), on such Business Day. The Corporation shall exercise its best
efforts to maintain an Auction Agent pursuant to an agreement containing terms
no less favorable to the Corporation than the terms of the Auction Agent
Agreement.

                            (ii)  The amount of dividends per share payable on
                  shares of AMPS for each Dividend Period or part thereof shall
                  be determined by the Corporation and shall be an amount equal
                  to $100,000 per share of AMPS multiplied by the product of (1)
                  the Applicable Rate for such Dividend Period and (2) a
                  fraction, the numerator of which shall be the actual number of
                  days in such Dividend Period or part thereof and the
                  denominator of which shall be 360. All dollar amounts used in
                  or resulting from such calculations will be rounded to the
                  nearest cent (with 0.5 cents being rounded up).

                            (iii) If the Corporation fails to deposit, in
                  same-day funds, with the Paying Agent by 12:00 noon, New York
                  City time, (A) on any Dividend Payment Date an amount
                  sufficient to pay the dividends (whether or not earned or
                  declared) payable on such Dividend Payment Date or (B) on any
                  redemption date for the AMPS an amount sufficient to redeem on
                  such date fixed for redemption the shares as to which notice
                  of redemption has been given (including an amount equal to
                  dividends thereon, whether or not earned or declared,
                  accumulated but unpaid to such redemption date), then, in
                  either case, beginning with the Dividend Payment Date or
                  redemption date, as the case may be, on which such failure
                  occurs and continuing until the Dividend Payment Date that is
                  or immediately follows the date the Corporation remedies such
                  failure as provided in the third sentence of this paragraph,
                  the Applicable Rate for each Dividend Period shall be equal to
                  275% of the "AA" Composite Commercial Paper Rate in effect on
                  the second Business Day preceding the first day of such
                  Dividend Period. Notwithstanding the foregoing, if the
                  Corporation remedies such failure by depositing, in same-day
                  funds, with the Paying Agent by 12:00 noon, New York City
                  time, on the first, second or third Business Day following
                  such Dividend Payment Date or date fixed for redemption, as
                  the case may be, an amount equal to (x) the unpaid dividends
                  or unpaid redemption payments plus (y) a late charge

                                       25

<PAGE>

                  computed at an annual rate of 275% of the "AA" Composite
                  Commercial Paper Rate in effect on the second Business Day
                  preceding the date of such failure applied to the amount of
                  such unpaid dividends or unpaid redemption payments based on
                  the number of days elapsed from the applicable Dividend
                  Payment Date or date fixed for redemption to the date on which
                  funds for such dividends or redemption payments are deposited
                  with the Paying Agent divided by 360, then the Applicable Rate
                  for the then-current Dividend Period will be that established
                  on the immediately preceding Auction Date. If, subsequent to
                  the three Business Day grace period referred to in the
                  preceding sentence, the Corporation remedies such failure to
                  pay dividends or the redemption payments by depositing with
                  the Paying Agent all amounts required by the first sentence of
                  this paragraph plus all dividends (computed at the rate
                  specified in the first sentence of this paragraph) accumulated
                  (whether or not earned or declared) but unpaid to the Dividend
                  Payment Date that is or immediately precedes the date of such
                  remedy, then the Applicable Rate in respect of each Dividend
                  Period commencing after such remedy will be determined in
                  accordance with the Auction Procedures until such time as
                  there is another failure to pay either dividends or the
                  redemption payments with respect to shares of AMPS. In the
                  event of any such remedy described in the preceding sentence,
                  the Corporation will, not more than 30 nor less than five
                  Business Days prior to the next Auction Date, notify the
                  Auction Agent, all Holders and the Securities Depository in
                  writing of the date of the next Auction.

                            (d)   (i)  The Corporation will not issue any other
series or class of stock which is senior to the AMPS. The Corporation will not
issue any series or class of stock which is on a parity with the shares of AMPS
unless it has been advised in writing by the Rating Agencies that such issuance
will not adversely affect their respective then-current ratings of the AMPS. No
Holders of shares of AMPS shall be entitled to any dividends, whether payable in
cash, property or stock, in excess of full cumulative dividends, as provided in
this paragraph 3, on shares of AMPS. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payments on any shares of
AMPS that may be in arrears.

                                  (ii) For so long as shares of AMPS are
                  outstanding, the Corporation shall not declare, pay or set
                  apart for payment any dividend or other distribution in
                  respect of the Common Stock or any other stock of the
                  Corporation ranking junior to the shares of AMPS as to
                  dividends or upon liquidation, or call for redemption, redeem,
                  purchase or otherwise acquire for consideration any shares of
                  Common Stock or any other stock of the Corporation ranking
                  junior to the shares of AMPS as to dividends or upon
                  liquidation (except by conversion into or exchange for stock
                  of the Corporation ranking junior to the shares of AMPS as to
                  dividends and upon liquidation), unless, in each case,
                  immediately thereafter, (A) the AMPS Basic Maintenance Amount
                  would be met, (B) the 1940 Act AMPS Assets Coverage
                  Requirement would be met, (C) all mandatory redemptions of
                  shares of Preferred Stock pursuant to paragraph 5(b) hereof
                  have been completed, (D) the Minimum Liquidity Level would be
                  met and (E) all accumulated and unpaid dividends for all past
                  dividend periods for all Preferred Stock shall have been or
                  are contemporaneously paid in full (or declared and sufficient
                  Deposit Securities have been set apart for their payment).
                  Prior to the

                                       26

<PAGE>

                  payment of any such dividend or other distribution, the
                  Corporation will provide the Auction Agent and the Rating
                  Agencies with a Portfolio Valuation Report (which may be the
                  regular weekly report) and a certificate demonstrating
                  compliance with the foregoing conditions.

                            (iii) Any dividend payment made on the shares of
                  AMPS shall first be credited against the dividends accumulated
                  with respect to the earliest Dividend Period for which
                  dividends have not been paid.

                            (iv)  For so long as any shares of AMPS are
                  outstanding, the Corporation shall not 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
                  (collectively "Liens") upon any of its Eligible Portfolio
                  Property, except for (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 to secure payment
                  for services rendered by the Auction Agent in connection with
                  the AMPS and (D ) Liens otherwise incurred in connection with
                  borrowings made in the ordinary course of business in
                  accordance with the Corporation's stated investment objective,
                  policies and restrictions.

                        (e) Not later than 12:00 noon, New York City time, on
the Business Day next preceding each Dividend Payment Date, the Corporation
shall deposit with the Paying Agent Deposit Securities constituting immediately
available funds in an amount sufficient to pay the dividends that are payable on
such Dividend Payment Date. The Corporation may direct the Paying Agent with
respect to the investment of any such Deposit Securities, provided that the
proceeds of any such investment will be available at the opening of business on
such Dividend Payment Date in immediately available funds.

                        (f) Dividends in arrears for any past Dividend Period
may be declared and paid to the Holders at any time, without reference to any
regular Dividend Payment Date.

                        (g) For dividends paid in respect of any fiscal year of
the Corporation, any dividends declared on the AMPS shall be paid first from
earned surplus, to the extent thereof, and then from any other legally available
source, and any dividends declared on the Common Stock shall be paid from earned
surplus or other sources to the extent not distributed to the Existing Holders.
Further, for dividends paid in respect of any fiscal year of the Corporation,
any dividends declared on AMPS shall be paid from current and accumulated
earnings and profits (within the meaning of the Internal Revenue Code of 1986,
as amended (the "Code")) to the extent available, pro rata from investment
company taxable income (as that term is defined in Section 852(b)(2) of the Code
and before taking into account the deduction for dividends paid) and from net
capital gain (as that term is defined in Code Section 1222(11)). To the extent
current and accumulated earnings and profits remain after satisfying the
Existing Holders, dividends paid in respect of any fiscal year of the
Corporation declared on the Common Stock

                                       27

<PAGE>

shall be paid from current and accumulated earnings and profits, from investment
company taxable income (before the deduction for dividends paid) and from net
capital gain, to the extent not distributed to Existing Holders. Distributions
of net capital gain of the Corporation for a taxable year to Existing Holders
and holders of Common Stock shall be designated by the Corporation as capital
gain dividends (under Code Section 852(b)(3)) in the same proportion as net
capital gain of the Corporation for the taxable year in respect of which the
distribution is made is distributed to such Existing Holders and holders of
Common Stock. Designations of foreign taxes deemed paid by stockholders
(pursuant to Code Section 853) shall be made in the same proportion as income
subject to such taxes is distributed to stockholders for the taxable year in
respect of which the distribution is made. The Board of Directors or any duly
authorized committee thereof may change the allocation of income and/or
designations described herein if, in its sole judgment, it deems it advisable to
do so for the purpose of maintaining the qualification of the Corporation as a
regulated investment company for federal income tax purposes and/or to avoid tax
consequences which, in the sole judgment of the Board of Directors, would be
adverse to the Corporation or its stockholders.

                  4.    Liquidation Rights

                        (a)  In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the Holders of
shares of AMPS shall be entitled to receive out of the assets of the Corporation
available for distribution to stockholders, but before any distribution or
payment shall be made in respect of the Common Stock or any other stock of the
Corporation ranking junior to the AMPS as to liquidation payments, a liquidation
distribution in the amount of $100,000 per share, plus an amount equal to all
unpaid dividends accumulated to and including the date fixed for such
distribution or payment (whether or not earned or declared by the Corporation,
but excluding interest thereon), but such Holders shall be entitled to no
further participation in any distribution or payment in connection with any such
liquidation, dissolution or winding up.

                        (b)  If, upon any such liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the assets of
the Corporation available for distribution among the Holders of all outstanding
shares of AMPS shall be insufficient to permit the payment in full to such
Holders of the amounts to which they are entitled, then such available assets
shall be distributed among the Holders of shares of Preferred Stock, including
the AMPS, 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.

                        (c)  Neither the consolidation or merger of the
Corporation with or into any other corporation or corporations, nor the sale,
lease or exchange by the Corporation of all or substantially all of its property
and assets, shall be deemed to be a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation for purposes of this paragraph 4.

                  5.    Redemption.

                  Shares of the AMPS shall be redeemable by the Corporation as
provided below:

                                       28

<PAGE>

                            (a)   To the extent permitted under the Investment
Company Act and Maryland law, the Corporation at its option, upon filing with
the Commission, mailing and publishing a Notice of Redemption as described in
paragraph 5(e) hereof, may redeem shares of AMPS, in whole or in part, on the
next succeeding scheduled Dividend Payment Dates for those shares of AMPS called
for redemption, out of funds legally available therefor, at a redemption price
equal to $100,000 per share plus an amount equal to dividends thereon (whether
or not earned or declared) accumulated to but unpaid through the date fixed for
redemption. The Corporation may not give a Notice of Redemption relating to an
optional redemption as described in this paragraph unless, at the time of giving
such Notice of Redemption, 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 due to Holders of
shares of AMPS by reason of the redemption of their shares on such redemption
date.

                            (b)   The Corporation shall redeem, at a redemption
price of $100,000 per share plus accumulated but unpaid dividends through the
date of redemption, shares of AMPS to the extent permitted under the Investment
Company Act and Maryland law, on the date fixed by the Board of Directors
applicable to those shares of AMPS called for redemption, if the Corporation
fails to maintain the AMPS Basic Maintenance Amount or 1940 Act AMPS Asset
Coverage Requirement, as the case may be, and such failure is not cured on or
before the Cure Date as reflected in a Portfolio Valuation Report delivered to
the Auction Agent and the Rating Agencies and confirmed by the Corporation's
Independent Accountants. The number of shares to be redeemed shall be equal to
the lesser of (i) the minimum number of shares of AMPS the redemption of which,
if deemed to have occurred immediately prior to the opening of business on the
Cure Date, together with all shares other Preferred Stock subject to redemption
or retirement, would result in the satisfaction of the AMPS Basic Maintenance
Amount or the 1940 Act AMPS Asset Coverage Requirement, as the case may be, on
such Cure Date (provided that, if there is no such minimum number of shares the
redemption of which would have such result, all shares of AMPS together with all
shares of other Preferred Stock subject to redemption or retirement then
outstanding shall be redeemed), and (ii) the maximum number of shares of AMPS
together with all shares of other Preferred Stock subject to redemption or
retirement that can be redeemed out of funds expected to be legally available
therefor on such redemption date. In determining the number of shares of AMPS
required to be redeemed in accordance with the foregoing, the Corporation shall
allocate the amount required to achieve (x) the 1940 Act AMPS Asset Coverage
Requirement, pro rata among the AMPS and any other Preferred Stock and (y) the
AMPS Basic Maintenance Amount, pro rata, among the AMPS and any Other AMPS. The
Corporation shall effect such redemption not later than 45 days after such Cure
Date, except that if the Corporation does not have funds legally available for
the redemption of all the required number of shares of AMPS which are subject to
mandatory redemption, the next Dividend Payment Date with respect to any share
to be redeemed is more than 45 days after such Cure Date or the Corporation
otherwise is unable to effect such redemption on or prior to such 45th day, the
Corporation shall redeem those shares of AMPS which it was unable to redeem on
the earliest practicable date on which it is able to effect such redemption.
Within 30 days after the Cure Date, the Corporation shall transfer to or
maintain with State Street Bank and Trust Company, the Corporation's custodian,
Deposit Securities in an amount sufficient to redeem the number of shares of
AMPS to be redeemed.

                                       29

<PAGE>

                            (c)   Notwithstanding the other provisions of this
paragraph 5, no shares of AMPS may be redeemed other than as specified below,
unless all accumulated and unpaid dividends on all outstanding shares of AMPS
and other Preferred Stock for all past dividend periods shall have been or are
contemporaneously paid or declared and Deposit Securities maturing on or prior
to the date fixed for redemption are set apart for the payment of such
dividends; provided, however, that the Corporation without regard to such
limitations, (x) may redeem, purchase or otherwise acquire shares of AMPS (A)
with other Preferred Stock as a whole, pursuant to an optional redemption or (B)
pursuant to a purchase or exchange offer made for all of the outstanding shares
of AMPS and other Preferred Stock, and (y) shall redeem, purchase or otherwise,
acquire shares of AMPS with other Preferred Stock as a whole if required
pursuant to a mandatory redemption, to the extent permitted under the Investment
Company Act, Maryland law and the Articles of Incorporation.

                            (d)   If fewer than all the outstanding shares of
AMPS are to be redeemed, the shares to be redeemed shall be identified by the
Board of Directors by lot, on a pro rata basis, or such other manner as will not
discriminate unfairly against any record holder of shares of such AMPS.

                            (e)   Whenever shares of AMPS are to be redeemed,
the Corporation shall, not fewer than 30 days prior to the applicable redemption
date, file with the Commission as required under the Investment Company Act, a
written notice of redemption (a "Notice of Redemption"). The Notice of
Redemption shall be (i) mailed by first class mail, postage prepaid, to each
holder of shares of AMPS to be redeemed, and (ii) published by the Corporation
in an Authorized Newspaper, not fewer than 15 nor more than 20 days prior to
such redemption date. Not fewer than five nor more than 10 days before such
mailing date, the Corporation shall mail the Notice of Redemption to the Paying
Agent. Each Notice of Redemption shall state (A) the series of AMPS or Other
AMPS to be redeemed, (B) the redemption date, (C) the redemption price, (D) the
place or places where such AMPS are to be redeemed, (E) that dividends on the
shares to be redeemed will cease to accumulate on such redemption date, (F) the
provision of these Articles Supplementary under which the redemption is being
made, (G) if less than all the outstanding shares of AMPS are to be redeemed,
the number of shares to be redeemed and the basis upon which the shares to be
redeemed are to be selected and (H) the CUSIP number or numbers of the shares to
be redeemed. No defect in the Notice of Redemption or in the mailing or
publication thereof shall affect the validity of the redemption proceedings,
except as required by applicable law.

                            (f)   On each redemption date, the Securities
Depository shall surrender the certificate evidencing the shares of AMPS. Each
Holder of shares of AMPS that were called for redemption shall then be entitled
to receive payment of the redemption price for each share. If fewer than all of
the shares represented by such certificate are to be redeemed, the Corporation
shall issue a new certificate for the shares not redeemed.

                            (g)   If the Corporation shall give a Notice of
Redemption, then by 12:00 noon, New York City time, on the Business Day next
preceding the date fixed for redemption the Corporation shall deposit with the
Paying Agent Deposit Securities constituting immediately available funds in an
amount sufficient to redeem the shares of AMPS to be redeemed. In such event the
Corporation shall give the Paying Agent irrevocable instructions

                                       30

<PAGE>

and authority to pay the redemption price to the holders of the shares of AMPS
called for redemption upon the redemption date. The Corporation may direct the
Paying Agent with respect to the investment of any Deposit Securities so
deposited provided that the proceeds of any such investment will be available at
the opening of business oh such redemption date. The Deposit Securities
deposited with the Paying Agent pursuant to the immediately preceding sentence
and the shares of AMPS to be redeemed and funds deposited with a paying agent
with irrevocable instructions to pay the redemption price with respect to any
other shares of Preferred Stock for which a notice of redemption has been duly
given shall be excluded from the calculation of the AMPS Basic Maintenance
Amount, the 1940 Act AMPS Asset Coverage Ratio, and the 1940 Act AMPS Asset
Coverage Requirement. Upon the date of such deposit, or if no such deposit is
made, then upon such date fixed for redemption (unless the Corporation shall
default in making payment of the redemption price), all rights of the Holders of
the shares of AMPS so called for redemption shall cease and terminate except the
right of the Holders thereof to receive the redemption price thereof inclusive
of accumulated but unpaid dividends, but without any interest, and such shares
shall no longer be deemed outstanding for any purpose. The Corporation shall be
entitled to receive, promptly after the date fixed for redemption, any cash in
excess of the aggregate redemption price of the shares of AMPS called for
redemption on such date and any remaining Deposit Securities. Any assets so
deposited which are unclaimed at the end of one year from such redemption date
shall, to the extent permitted by law, be repaid to the Corporation, after which
the Holders of the shares of AMPS so called for redemption shall look only to
the Corporation for payment thereof. The Corporation shall be entitled to
receive, from time to time after the date fixed for redemption, any interest on
the Deposit Securities so deposited.

                       (h)  Shares of AMPS that have been redeemed, purchased or
otherwise acquired by the Corporation may not be reissued, shall not be deemed
outstanding, and shall be retired and cancelled. Shares with respect to which a
Notice of Redemption has been given as provided in paragraph 5(e) above shall
not be deemed outstanding for purposes of the Auction Procedures set forth in
paragraph 8 hereof.

                       (i)  In addition to redemption rights expressly
established under these Articles Supplementary, the Corporation may repurchase
shares of AMPS to the extent now or hereafter permitted by the laws of the State
of Maryland and by the Investment Company Act.

                       (j)  If the Corporation shall not have funds legally
available for the redemption of all the shares of the AMPS to be redeemed on any
redemption date (or is otherwise legally unable to effect such redemption), the
Corporation shall redeem on such redemption date the number of shares of AMPS as
it shall be legally able to redeem, ratably from each Existing Holder whose
shares are to be redeemed and the remainder of the shares of the AMPS required
to be redeemed shall be redeemed, as provided in paragraph 5(b) above.

                  6.   Voting Rights

                       (a)  General. Each holder of AMPS shall be entitled to
one vote for each share held on each matter on which the holders of the AMPS are
entitled to vote and, except as otherwise provided in the Articles of
Incorporation, these Articles Supplementary or by law, the holders of the AMPS
and the Common Stock shall vote together as one class on all matters

                                       31

<PAGE>

submitted to the stockholders; provided, however, that at any meeting of
stockholders of the Corporation at which directors are to be elected, the
holders of Preferred Stock of all series, voting separately as a single class,
shall be entitled to elect two members of the Board of Directors, and the
holders of Common Stock, voting separately as a single class, shall be entitled
to elect the balance of the members of the Board of Directors; provided,
further, however, that the identity of the two directors representing the
holders of outstanding shares of Preferred Stock may be designated by the Board
of Directors until the first meeting of the Corporation's stockholders at which
holders of shares of Preferred Stock shall be entitled to vote for the election
of directors.

                       (b)  Right to Elect Majority of Board of Directors.

                       (i)  During any period in which (A) dividends on any
         outstanding Preferred Stock of any series shall be due and unpaid in an
         amount equal to two full years' dividends; or (B) the Corporation fails
         to redeem any shares of Preferred Stock that are required to be
         redeemed pursuant to paragraph 5(b) above or that would have been so
         redeemed but for the requirement that redemption be made out of legally
         available funds, or (C) holders of any other shares of Preferred Stock
         are entitled to elect a majority of the directors of the Corporation
         (the "Voting Period"), the number of directors constituting the Board
         of Directors shall automatically be increased by the smallest number
         that, when added to the two directors elected by the holders of
         Preferred Stock pursuant to paragraph 6(a) above, will constitute a
         majority of the total number of directors so increased; and at a
         special meeting of stockholders, which shall be called and held as soon
         as practicable, and at all subsequent meetings at which directors are
         to be elected, the holders of Preferred Stock of all series voting
         separately as a single class shall be entitled to elect the smallest
         number of additional directors of the Corporation who, together with
         the two directors elected by the holders of Preferred stock pursuant to
         paragraph 6(a) above, will constitute a majority of the total number of
         directors of the Corporation so increased. The terms of office of the
         persons who are directors at the time of that election shall continue.

                       (ii) If the Corporation thereafter shall pay, or
         declare and set apart for payment, in full all dividends payable on all
         outstanding shares of Preferred Stock of all series for all past
         dividend periods and if the Corporation has remedied any failure to
         redeem shares of Preferred Stock that are required to be redeemed
         pursuant to paragraph 5(b) above, and holders of no other series of
         Preferred Stock are entitled to elect a majority of the directors of
         the Corporation the Voting Period and the voting rights stated in this
         paragraph 6(b) shall cease, and the terms of office of all additional
         directors elected by the holders of Preferred Stock (but not of the
         directors elected by the holders of Common Stock or the two directors
         regularly elected by its holders of Preferred Stock) as provided in
         paragraph 6(a) shall terminate automatically, subject always, however,
         to the revesting of such voting rights in the holders of shares of
         Preferred Stock upon the further occurrence of any of the events
         described in clauses (A), (B) or (C) of paragraph 6(b)(i).

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<PAGE>

                  (c)      Voting Procedures.

                           (i)   As soon as practicable after the accrual of any
         right of the holders of shares of Preferred Stock to elect directors
         pursuant to paragraph 6(b), the Corporation shall call a special
         meeting of, and mail a notice to, such holders of shares of Preferred
         Stock. Such special meeting shall be held not less then 10 nor more
         than 80 days after the date of mailing of such notice. If the
         Corporation fails to send such notice, the meeting may be called by any
         holder of shares of Preferred Stock on like notice. The record date for
         determining the holders of shares of Preferred Stock entitled to notice
         of and to vote at such special meeting shall be the close of business
         on the fifth Business Day preceding the day on which such notice is
         given. At any such special meeting and at each meeting at which
         directors are elected held during a Voting Period, the holders of
         shares of Preferred Stock, voting together as a class (to the exclusion
         of the holders of shares of Common Stock), shall be entitled to elect
         the number of directors prescribed in paragraph 6(b) above on a
         one-vote-per-share basis. At any such meeting or adjournment thereof in
         the absence of a quorum, a majority of the holders of shares of
         Preferred Stock, present in person or by proxy or any officer of the
         Corporation present entitled to preside or act as Secretary of such
         meeting shall have the power to adjourn the meeting without further
         notice to a date not more than 120 days after the original record date
         for such meeting.

                           (ii)  For purposes of determining any rights of the
         holders of shares of Preferred Stock to vote on any matter, whether
         such right is created by the Articles of Incorporation, these Articles
         Supplementary, by statute or otherwise, no holder of shares of
         Preferred Stock shall be entitled to vote and no share of Preferred
         Stock shall be deemed to be "outstanding" for the purpose of voting or
         determining the number of shares required to constitute a quorum, if
         prior to or concurrently with the time of determination of shares
         entitled to vote or shares deemed outstanding for quorum purposes, as
         the case may be, such share shall have been redeemed or called for
         redemption as provided in paragraph 5(e) and sufficient Deposit
         Securities with maturities on or prior to the redemption date shall
         have been deposited in trust with the Paying Agent to effect such
         redemption.

                           (iii) The directors elected by the holders of shares
         of Preferred Stock pursuant to paragraph 6(b) shall (subject to the
         provisions of any applicable law) be subject to removal only by the
         vote of the holders of a majority of shares of Preferred Stock
         outstanding. Any vacancy on the Board of Directors occurring by reason
         of such removal or otherwise (in the case of directors subject to
         election by the holders of shares of Preferred Stock) may be filled
         only by vote of the holders of at least a majority of shares of
         Preferred Stock outstanding, and if not so filled such vacancy shall
         (subject to the provisions of any applicable law) be filled by a
         majority of the remaining directors (or the remaining director) who
         were elected by the holders of shares of Preferred Stock. Any other
         vacancy on the Board of Directors during a Voting Period shall be
         filled as provided in the Corporation's By-Laws.

                                       33

<PAGE>

                            (iv) At any time when the holders of shares of
         Preferred Stock become entitled to elect additional directors pursuant
         to paragraph 6(b), the maximum number of directors fixed by the By-Laws
         of the Corporation or otherwise shall automatically be increased by the
         number of such additional directors if required; and at such time as
         the holders of shares of Preferred Stock shall no longer be entitled to
         elect directors pursuant to paragraph 6(b), such exact number shall
         automatically be decreased by the number by which they were increased
         by reason of this provision.

                       (d)  Certain Corporate Acts. So long as any of AMPS are
outstanding, the Corporation shall not, subject to the requirements of the
Investment Company Act and Maryland law, without the affirmative vote or consent
of the holders of at least two-thirds of the votes of the shares of AMPS
outstanding at the time, either in person or by proxy, either in writing or at a
meeting (voting separately as one class) in addition any vote required by
Article Fifth of the Articles of Incorporation: (x) amend, alter or repeal the
provisions of the Articles of Incorporation including these Articles
Supplementary, whether by merger, consolidation or otherwise, so as to
materially and adversely affect any right, preference, privilege or voting power
of such shares of AMPS or the Holders thereof, or (y) create, authorize, issue,
incur or suffer to exist any indebtedness for borrowed money or any direct or
indirect guarantee of any such indebtedness, provided, however, that the
Corporation may authorize the issuance of indebtedness for borrowed money, for
temporary or emergency purposes or for the clearance of transactions, in an
aggregate amount not to exceed the lesser of $10,000,000 or 10% of the aggregate
liquidation preference of the shares of AMPS outstanding at any one time without
any such consent or approval, provided that, with or without the consent or
approval of the holders, such action would not result in the lowering of the
then-current ratings of the shares of AMPS by the Rating Agencies (as evidenced
in writing by the Rating Agencies); provided that any increase in the amount of
the authorized AMPS or the creation and issuance of other series of Preferred
Stock, or any increase in the amount of authorized shares of such series or of
any other series of Preferred Stock, in each case ranking on a parity with or
junior to the AMPS will not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers unless such issuance would
cause the Corporation not to satisfy the 1940 Act AMPS Asset Coverage
Requirement or the AMPS Basic Maintenance Amount.

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

                       (e)  Exclusive Remedy. Unless otherwise required by law,
the Holders shall 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 shares of AMPS or the Corporation
fails to redeem any shares of AMPS which it is required to redeem, or any other
event occurs which requires the mandatory redemption of AMPS and the required
Notice of Redemption has not been given, the exclusive remedy of the Holders
shall be the right to vote for directors pursuant to the provisions of this
paragraph 6. In no event shall the Holders 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.

                                       34

<PAGE>

                       (f)  Notification to Rating Agencies. In the event a vote
of holders of AMPS is required pursuant to the provisions of Section 13(a) of
the Investment Company Act, the Corporation shall, not later than ten Business
Days prior to the date on which such vote is to be taken, notify the Rating
Agencies that such vote is to be taken and the nature of the action with respect
to which such vote is to be taken.

                   7.  Asset and Liquidity Coverage.

                       (a)  1940 Act AMPS Asset Coverage Requirement.

                   The Corporation shall maintain, as of the last Valuation Date
of each month in which any share of AMPS is outstanding, the 1940 Act AMPS Asset
Coverage Requirement. The calculation of the 1940 Act AMPS Asset Coverage Ratio
shall be included in each Portfolio Valuation Report.

                       (b)  AMPS Basic Maintenance Amount.

                            (i)   For so long as any shares of AMPS are
         outstanding, the Corporation will maintain, on each Valuation Date,
         Eligible Portfolio Property having an aggregate Discounted Value at
         least equal to the AMPS Basic Maintenance Amount, each as of such
         Valuation Date.

                            (ii)  On the Date of Original Issue and on or before
         10:00 A.M., New York City time, on the fourth Business Day after any
         other Valuation Date thereafter, the Corporation shall complete and
         deliver to the Auction Agent a summary Portfolio Valuation Report,
         which will be deemed to have been delivered to the Auction Agent (A) if
         the Auction Agent receives a copy or telecopy, telex or other
         electronic transcription thereof, or (B) if the Auction Agent receives
         a telecopy, telex or other electronic transcription setting forth at
         least the applicable Discounted Value of the aggregate of all Eligible
         Portfolio Property (the "Portfolio Calculation") and the AMPS Basic
         Maintenance Amount each as of the relevant Valuation Date and on the
         same day the Corporation mails to the Auction Agent for delivery on the
         next Business Day the summary Portfolio Valuation Report. A failure by
         the Corporation to deliver a Portfolio Valuation Report to the Auction
         Agent under this paragraph 7(b)(ii) shall be deemed to be delivery of a
         Portfolio Valuation Report indicating a Discounted Value for all
         Eligible Portfolio Property of less than the AMPS Basic Maintenance
         Amount, as of the relevant Valuation Date. The Corporation shall also
         deliver promptly copies of each Portfolio Valuation Report to each of
         the Rating Agencies.

                            (iii) Within seven Business Days after the date of
         delivery to the Auction Agent of the first Portfolio Valuation Report
         and each Portfolio Valuation Report in accordance with paragraph
         7(b)(ii) above relating to a Quarterly Valuation Date, the Corporation
         shall deliver to the Auction Agent and the Rating Agencies a report or
         reports (the "Accountant's Confirmation") reviewing the Portfolio
         Calculation, prepared by the Corporation's Independent

                                       35

<PAGE>

         Accountants, relating to such Portfolio Valuation Report (and reviewing
         the Portfolio Calculation relating to any other Portfolio Valuation
         Report, randomly selected by the Independent Accountants, that was
         delivered by the Corporation during the quarter ending on such
         Quarterly Valuation Date) substantially to the effect that (A) the
         Independent Accountants have read such Portfolio Valuation Reports
         (each, a "Report"), (B) with respect to the 1940 Act AMPS Asset
         Coverage Ratio, AMPS Basic Maintenance Amount and Minimum Liquidity
         Level, the results of the calculations set forth in each Report have
         been recalculated and are numerically correct; (C) with respect to the
         excess or deficiency of the Discounted Value amount when compared to
         the AMPS Basic Maintenance Amount, the results of the calculation set
         forth in each Report have been recalculated and are numerically
         correct; (D) with respect to the excess or deficiency of the Dividend
         Coverage Assets amount when compared to the Minimum Liquidity Level,
         the results of the calculation set forth in each Report have been
         recalculated and are numerically correct; (E) with respect to the lower
         of two bid prices provided to the Corporation for purposes of valuing
         securities in the portfolio, the Independent Accountants have traced
         the price used in each Report to the lower of the two bid prices listed
         in the Report and verified that such information agrees (in the event
         such information does not agree, the Independent Accountants will
         provide a listing in their report of such differences); (F) that the
         assets listed in each Report conform with the definition of Eligible
         Portfolio Property; and (G) the calculations used by the Corporation in
         calculating the 1940 Act AMPS Asset Coverage Ratio, the AMPS Basic
         Maintenance Amount and the Minimum Liquidity Level are in compliance
         with the format set forth in the form of Portfolio Valuation Report
         attached as an exhibit to the Auction Agent Agreement. If any letter
         reviewing the Portfolio Calculation delivered pursuant to this
         paragraph shows that a lower aggregate Discounted Value for the
         aggregate of all Eligible Portfolio Property was determined by the
         Independent Accountants, the calculation or determination made by such
         Independent Accountants shall be final and conclusive and shall be
         binding on the Corporation, and the Corporation shall promptly amend
         the Portfolio Valuation Report and deliver the amended Portfolio
         Valuation Report to the Auction Agent.

                  (c)    Liquidity Coverage.

                         (i)   As of each Valuation Date as long as any shares
         of AMPS are outstanding, the Corporation shall determine (A) the Market
         Value of the Dividend Coverage Assets owned by the Corporation as of
         that Valuation Date, (B) the Dividend Coverage Amount on that Valuation
         Date, and (C) whether the Minimum Liquidity Level is met as of that
         Valuation Date. The calculations of the Dividend Coverage Assets, the
         Dividend Coverage Amount and whether the Minimum Liquidity Level is met
         shall be set forth in a certificate (a "Certificate of Minimum
         Liquidity") dated as of the Valuation Date. The Portfolio Valuation
         Report and the Certificate of Minimum Liquidity may be combined in one
         certificate. The Corporation shall cause the Certificate of Minimum
         Liquidity to be delivered to the Auction Agent not later than the close
         of business on the third Business Day after the Valuation Date. The
         Minimum Liquidity Level shall be

                                       36

<PAGE>

         deemed to be met as of any date of determination if the Corporation has
         timely delivered a Certificate of Minimum Liquidity relating to such
         date, which states that the same has been met and which is not
         manifestly inaccurate. In the event that a Certificate of Minimum
         Liquidity is not delivered to the Auction Agent when required, the
         Minimum Liquidity Level shall be deemed not to have been met as of the
         applicable date.

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

                  (d)  Calculation of AMPS Basic Maintenance Amount; Accounting
         Treatment.

                       (i)   Eligible Portfolio Property of the Corporation
         shall be determined on an accrual basis in accordance with customary
         practice under which Eligible Portfolio Property purchased and not yet
         received are so reflected as Eligible Portfolio Property.

                       (ii)  Dividends on the Common Stock which are payable in
         Common Stock shall, after the effective date of any election by a
         holder of Common Stock to receive such dividend, be excluded from
         current liabilities.

                       (iii) Withholding taxes with respect to interest earned
         on any asset of the Corporation if such interest is not included in
         Eligible Portfolio Property, shall be excluded from current
         liabilities.

                       (iv)  With respect to Eligible Portfolio Property sold by
         the Corporation as of or prior to the Valuation Date, (x) if the
         determination is being made for Moody's, the sales price of such
         property will be reflected as Cash or Australian Currency, as
         appropriate, in Eligible Portfolio Property, to the extent that such
         receivable is due and payable within 5 Business Days (determined as for
         a Valuation Date) and is not subject to any dispute and (y) if the
         determination is being made for S&P, the Market Value of such property
         will be reflected in Eligible Portfolio Property and will be discounted
         at the appropriate Discount Factor.

                  (e)  Other Permitted Assets. In addition to Eligible Portfolio
Property, the Corporation may own Other Permitted Assets and may also own other
securities, if the inclusion of any such type of other securities is deemed by
the Board of Directors to be in the best interest

                                       37

<PAGE>

of the Corporation. Other Permitted Assets and such other securities may be
included in Eligible Portfolio Property if the Rating Agencies have advised the
Corporation in writing that the inclusion of such Other Permitted Assets or
other securities in Eligible Portfolio Property would not adversely affect their
respective then-current ratings of the shares of AMPS.

         (f) Failure to Satisfy AMPS Basic Maintenance Amount. Within ten
Business Days after the date of delivery to the Auction Agent of a Portfolio
Valuation Report in accordance with paragraph 7(b) above relating to any
Valuation Date on which the Corporation failed to satisfy the AMPS Basic
Maintenance Amount, and relating to the Cure Date with respect to such failure
to satisfy the AMPS Basic Maintenance Amount, the Independent Accountants will
provide to the Auction Agent and the Rating Agencies an Accountant's
Confirmation as to such Portfolio Valuation Report.

     8.  Auction Procedures.

         (a) Certain Definitions.

         Capitalized terms not defined in this paragraph 8(a) shall have the
respective meanings specified in paragraph 1. As used in this paragraph 8, the
following terms shall have the following meanings, unless the context otherwise
requires:

             (i)    "Affiliate" shall mean any Person known to the Auction Agent
         to be controlled by, in control of, or under common control with, the
         Corporation.

             (ii)   "Agent member" shall mean the member of the Securities
         Depository that will act on behalf of an Existing Holder or a Potential
         Holder and is identified as such in such holder's Purchaser's Letter.

             (iii)  "AMPS" shall mean the shares of AMPS being auctioned
         pursuant to this paragraph.

             (iv)   "Auction" shall mean the periodic operation of the
         procedures set forth in this paragraph 8.

             (v)    "Auction Date" shall mean the first Business Day next
         preceding the first day of a Dividend Period.

             (vi)   "Available AMPS" shall have the meaning specified in
         paragraph 8(d)(i) below.

             (vii)  "Bid" and "Bids" shall have the respective meanings
         specified in paragraph 8(b)(i) below.

             (viii) "Bidder" and "Bidders" shall have the respective meanings
         specified in paragraph 8(b)(i) below.

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<PAGE>

              (ix)   "Broker-Dealer" shall mean any broker-dealer, or other
         entity permitted by law to perform the functions required of a
         Broker-Dealer in this paragraph 8, that has been selected by the
         Corporation and has entered into a Broker-Dealer Agreement with the
         Auction Agent that remains effective.

              (x)    "Broker-Dealer Agreement" shall mean an agreement between
         the Auction Agent and a Broker-Dealer pursuant to which such
         Broker-Dealer agrees to follow the procedures specified in this
         paragraph 8.

              (xi)   "Existing Holder", when used with respect to shares of
         AMPS, shall mean a Person who has signed a Purchaser's Letter and is
         listed as the beneficial owner of such shares of AMPS in the records of
         the Auction Agent.

              (xii)  "Hold Order" and "Hold Orders" shall have the respective
         meanings specified in paragraph 8(b)(i) below.

              (xiii) "Order" shall have the meaning specified in paragraph
         8(b)(i) below.

              (xiv)  "Outstanding" shall mean, as of any date, shares of AMPS
         theretofore issued by the Corporation except, without duplication, (A)
         any shares of AMPS theretofore cancelled or delivered to the Auction
         Agent for cancellation, or redeemed by the Corporation, or as to which
         a Notice of Redemption shall have been given and moneys shall have been
         deposited in trust by the Corporation pursuant to paragraph 5(g) and
         (B) any shares of AMPS as to which the Corporation or any Affiliate
         thereof shall be an Existing Holder.

              (xv)   "Person" shall mean and include an individual, a
         partnership, a corporation, a trust, an unincorporated association, a
         joint venture or other entity or a government or any agency or
         political subdivision thereof.

              (xvi)  "Potential Holder" shall mean any Person, including any
         Existing Holder, (A) who shall have executed a Purchaser's Letter and
         (B) who may be interested in acquiring shares of AMPS (or, in the case
         of an Existing Holder, additional shares of AMPS).

              (xvii) "Securities Depository" shall mean The Depository Trust
         Company and its successors and assigns or any other securities
         depository selected by the Corporation which agrees to follow the
         procedures required to be followed by such securities depository in
         connection with shares of AMP.

              (xviii) "Sell Order" and "Sell Orders" shall have the respective
         meanings specified in paragraph 8(b)(i) below.

              (xix) "Submission Deadline" shall mean 12:30 P.M., New York City
         time, on any Auction Date or such other time on any Auction Date (as
         may be specified by the Auction Agent from time to time) as the time by
         which each

                                       39

<PAGE>

         Broker-Dealer must submit to the Auction Agent in writing all Orders
         obtained by it for the Auction to be conducted on such Auction Date.

                     (xx)    "Submitted Bid" and "Submitted Bids" shall have the
         respective meanings specified in paragraph 8(d)(1) below.

                     (xxi)   "Submitted Hold Order" and "Submitted Hold Orders"
         shall have the respective meanings specified in paragraph 8(d)(i)
         below.

                     (xxii)  "Submitted Order" and "Submitted Orders" shall have
         the respective meanings specified in paragraph B(d)(i) below.

                     (xxiii) "Submitted Sell Order" and "Submitted Sell Orders"
         shall have the respective meanings specified in paragraph 8(d)(i)
         below.

                     (xxiv)  "Sufficient Clearing Bids" shall have the meaning
         specified in paragraph 8(d)(i) below.

                     (xxv)   "Winning Bid Rate" shall have the meaning specified
         in paragraph 8(d)(i) below.

             (b)     Orders by Existing Holders and Potential Holders.

                     (i) On or prior to the Submission Deadline on each Auction
         Date:

             (A)     each Existing Holder may submit to a Broker-Dealer
         information as to:

                     (1) the number of Outstanding shares, if any, of AMPS held
             by such Existing Holder which such Existing Holder desires to
             continue to hold without regard to the Applicable Rate for the next
             Dividend Period;

                     (2) the number of Outstanding shares, if any, of AMPS held
             by such Existing Holder which such Existing Holder desires to
             continue to hold, provided that the Applicable Rate for the next
             succeeding Dividend Period shall not be less than the rate per
             annum then specified by such Existing Holder; and/or

                     (3) the number of Outstanding shares, if any, of AMPS held
             by such Existing Holder which such Existing Holder offers to sell
             without regard to the Applicable Rate for the next succeeding
             Dividend Period; and

             (B)     each Broker-Dealer, using a list of Potential Holders
         that shall be maintained in good faith for the purposes of conducting a
         competitive Auction, shall contact Potential Holders, including Persons
         that are not Existing Holders, on such list to determine the number of
         Outstanding shares, if any, of AMPS which each such Potential Holder
         offers to purchase provided that the Applicable Rate for the next
         succeeding

                                       40

<PAGE>

         Dividend Period shall not be less than the rate per annum specified by
         such Potential Holder.

         For the purposes hereof, the communication to a Broker-Dealer of
information referred to in clause (A) or (B) of this paragraph 8(b)(i) is
hereinafter referred to as an "Order" and collectively as "Orders" and each
Existing Holder and each Potential Holder placing an Order is hereinafter
referred to as a "Bidder" and collectively as "Bidders"; an Order containing the
information referred to in clause (A)(1) of this paragraph 8(b) is hereinafter
referred to as a "Hold Order" and collectively as "Hold Orders"; an Order
containing the information referred to in clause (A)(2) or (B) of this paragraph
8(b) is hereinafter referred to as a "Bid" and collectively as "Bids"; and an
Order containing the information reverted to in clause (A)(3) of this paragraph
8(b) is hereinafter referred to as a "Sell Order" and collectively as "Sell
Orders".

                     (ii) (A) A Bid by an Existing Holder shall constitute an
         irrevocable offer to sell:

                     (1)  the number of Outstanding shares of AMPS specified in
             such Bid if the Applicable Rate determined on such Auction Date
             shall be less than the rate per annum specified in such Bid;

                     (2)  such number or a lesser number of Outstanding shares
         of AMPS to be determined as set forth in paragraph 8(e)(i)(D) if the
         Applicable Rate determined on such Auction Date shall be equal to the
         rate per annum specified therein; or

                     (3)  a lesser number of Outstanding shares of AMPS to be
             determined as set forth in paragraph 8(e)(ii)(C) if such specified
             rate, per annum, shall be higher than the Maximum Applicable Rate
             and Sufficient Clearing Bids do not exist.

             (B)     A Sell Order by an Existing Holder shall constitute an
         irrevocable offer to sell:

                     (1)  the number of Outstanding shares of AMPS special such
             Sell Order; or

                     (2)  such number or a lesser number of Outstanding shares
         of AMPS to be determined as set forth in paragraph 8(e)(ii)(C) if
         Sufficient Clearing Bids do not exist.

             (C)     A Bid by a Potential Holder shall constitute an irrevocable
         offer to purchase:

                     (1)  the number of Outstanding shares of AMPS specified in
             such Bid if the Applicable Rate determined on such Auction Date
             shall be higher than the rate per annum specified in such Bid; or

                                       41

<PAGE>

                 (2)   such number or a lesser number of Outstanding shares of
             AMPS to be determined as set forth in paragraph 8(e)(i)(E) if the
             Applicable Rate determined on such Auction Date shall be equal to
             the rate per annum specified therein.

             (c) Submission of Orders by Broker-Dealers to Auction Agent.

                 (i)   Each Broker-Dealer shall submit in writing to the Auction
         Agent prior to the Submission Deadline on each Auction Date all Orders
         obtained by such Broker-Dealer specifying with respect to each order:

             (A) the name of the Bidder placing such Order;

             (B) the aggregate number of Outstanding shares of AMPS that are the
         subject of such Order;

             (C) to the extent that such Bidder is an Existing Holder:

                 (1)   the number of Outstanding shares, if any, of AMPS subject
         to any Hold Order placed by such Existing Holder;

                 (2)   the number of Outstanding shares, if any, of AMPS subject
         to any Bid placed by such Existing Holder and the rate per annum
         specified in such Bid; and,

                 (3)   the number of Outstanding shares, if any, of AMPS subject
         to any Sell Order placed by such Existing Holder; and

             (D) to the extent such Bidder is a Potential Holder the rate per
         annum specified in such Potential Holder's Bid.

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

                 (iii) If an Order or Orders covering all of the Outstanding
         shares of AMPS held by an Existing Holder is not submitted to the
         Auction Agent prior to the Submission Deadline, the Auction Agent shall
         deem a Hold Order to have been submitted on behalf of such Existing
         Holder covering the number of Outstanding shares of AMPS held by such
         Existing Holder and not subject to Orders submitted to the Auction
         Agent.

                 (iv)  If one or more Orders on behalf of an Existing Holder
         covering in the aggregate more than the number of Outstanding shares of
         AMPS held by an Existing Holder are submitted to the Auction Agent,
         such Orders shall be considered valid as follows and in the following
         order of priority:

                                       42

<PAGE>

                  (A) any Hold Order submitted on behalf of such Existing Holder
         shall be considered valid up to and including the number of Outstanding
         shares of AMPS held by such Existing Holder; provided that if more than
         one Hold Order is submitted on behalf of such Existing Holder and the
         number of shares of AMPS subject to such Holders exceeds the number of
         Outstanding shares of AMPS held by such Existing Holder, the number of
         shares of AMPS subject to each of such Hold Orders shall be reduced pro
         rata so that such Hold Orders, in the aggregate, cover the number of
         Outstanding shares of AMPS held by such Existing Holder;

                  (B) any Bids submitted on behalf of such Existing Holder shall
         be considered valid, in the ascending order of their respective rates
         per annum if more than one Bid is submitted on behalf of such Existing
         Holder, up to and including the excess of the number of Outstanding
         shares of AMPS held by such Existing Holder over the number of shares
         of AMPS subject to any Hold Order referred to in paragraph 8(c)(iv)(A)
         above (and if more than one Bid submitted on behalf of such Existing
         Holder specifies the same rate per annum and together they cover more
         than the remaining number of shares than can be the subject of valid
         Bids after application of paragraph 8(c)(iv)(A) above and of the
         foregoing portion of this paragraph 8(c)(iv)(B) to any Bid or Bids
         specifying a lower rate or rates per annum, the number of shares
         subject to each of such Bids shall be reduced pro rata so that such
         Bids, in the aggregate, cover exactly such remaining number of shares);
         and the number of shares, if any, subject to Bids not valid under this
         paragraph 8(c)(iv)(B) shall be treated as the subject of a Bid by a
         Potential Holder; and

                  (C) any Sell Order shall be considered valid up to and
         including the excess of the number of Outstanding shares of AMPS held
         by such Existing Holder over the number of shares of AMPS subject to
         Hold Orders referred to in paragraph 8(c)(iv)(A) and Bids referred to
         in paragraph 8(c)(iv)(B), provided that if more than one Sell Order is
         submitted on behalf of any Existing Holder and the number of shares of
         AMPS subject to such Sell Orders is greater than such excess, the
         number of shares of AMPS subject to each of such Sell Orders shall be
         reduced pro rata so that such Sell Orders, in the aggregate cover
         exactly the number of shares of AMPS equal to such excess.

                      (v) If more than one Bid is submitted on behalf of any
         Potential Holder, each Bid submitted shall be a separate Bid with the
         rate and number of shares of AMPS therein specified.

                  (d) Determination of Sufficient Clearing Bids, Winning Bid
         Rate and Available Rate.

                      (i) Not earlier than the Submission Deadline on each
         Auction Date, the Auction Agent shall assemble all Orders submitted or
         deemed submitted to it by the Broker-Dealers (each such Order as
         submitted or deemed submitted by a Broker-Dealer being hereinafter
         referred to as a "Submitted Hold Order," a "Submitted Bid" or a
         "Submitted Sell Order," as the case may be, or as a "Submitted Order"
         and collectively as "Submitted Hold Orders," "Submitted Bids" or
         "Submitted Sell Orders," as the case may be, or as "Submitted Orders")
         and shall determine:

                                       43

<PAGE>

                  (A) the excess of the total number of Outstanding shares of
         AMPS over the number of Outstanding shares of AMPS that are the subject
         of Submitted Hold Orders (such excess being hereinafter referred to as
         the "Available AMPS");

                  (B) from the Submitted Orders whether the number of
         Outstanding shares of AMPS that are the subject of Submitted Bids by
         Potential Holders specifying one or more rates per annum equal to or
         lower than the Maximum Applicable Rate exceeds or is equal to the sum
         of:

                      (1)  the number of Outstanding shares of AMPS that are the
         subject of Submitted Bids by Existing Holders specifying one or more
         rates per annum higher than the Maximum Applicable Rate; and

                      (2)  the number of Outstanding shares of AMPS that are
         subject to Submitted Sell Orders.

        (if such excess or such equality exists (other than because the number
        of Outstanding shares of AMPS in clauses (1) and (2) above are each zero
        because all of the Outstanding shares of AMPS are the subject of
        Submitted Hold Orders), such Submitted Bids by Potential Holders being
        hereinafter referred to collectively as "Sufficient Clearing Bids"); and

                  (C) if Sufficient Clearing Bids exist, the lowest rate per
         annum specified in the Submitted Bids (the "Winning Bid Rate") that if:

                      (1)  each Submitted Bid from Existing Holders specifying
                  the Winning Bid Rate and all other Submitted Bids from
                  Existing Holders specifying lower rates per annum were
                  rejected, thus entitling such Existing Holders to continue to
                  hold the shares of AMPS that are the subject of such Submitted
                  Bids, and

                      (2)  each Submitted Bid from Potential Holders specifying
                  the Winning Bid Rate and all other Submitted Bids from
                  Potential Holders specifying lower rates per annum were
                  accepted, thus entitling those Potential Holders to purchase
                  the shares of AMPS that are the subject of such Submitted
                  Bids,

        would result in the number of shares subject to all Submitted Bids
        specifying the Winning Bid Rate or a lower rate per annum being at
        least equal to the Available AMPS.

                      (ii) Promptly after the Auction Agent has made the
        determinations pursuant to paragraph 8(d)(i), the Auction Agent shall
        advise the Corporation of the Maximum Applicable Rate and, based on all
        such determinations, the Applicable Rate for the next succeeding
        Dividend Period as follows:

                  (A) if Sufficient Clearing Bids exist, that the Applicable
         Rate for the next succeeding Dividend Period shall be equal to the
         Winning Bid Rate;

                                       44

<PAGE>

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

                  (C) if all the shares of AMPS are the subject of Submitted
         Hold Orders, that the Applicable Rate for the next succeeding Dividend
         Period shall be equal to 90% of the 30 day "AA" Composite Commercial
         Paper Rate an the date of the Auction.

                      (e) Acceptance and Rejection of Submitted Bids and
Submitted Sell Orders and Allocations of Shares.

                      Based on the determinations made pursuant to paragraph
8(d)(i), the Submitted Bids and Submitted Sell Orders shall be accepted or
rejected and the Auction Agent shall take such other action as set forth below:

                      (i) If Sufficient Clearing Bids have been made, subject to
         the provisions of paragraphs 8(e)(iii) and 8(e)(iv), Submitted Bids and
         Submitted Sell Orders shall be accepted or rejected in the following
         order of priority and all other Submitted Bids shall be rejected:

                  (A) the Submitted Sell Orders of Existing Holders shall be
         accepted and the Submitted Bid of each of the Existing Holders
         specifying any rate per annum that is higher than the Winning Bid Rate
         shall be accepted, thus requiring each such Existing Holder to sell the
         Outstanding shares of AMPS that are the subject of such Submitted Sell
         Order or Submitted Bid;

                  (B) the Submitted Bid of each of the Existing Holders
         specifying any rate per annum that is lower than the Winning Bid Rate
         shall be accepted, thus entitling each such Existing Holder to continue
         to hold the Outstanding shares of AMPS that are the subject of such
         Submitted Bid;

                  (C) the Submitted Bid of each of the Potential Holders
         specifying any rate per annum that is lower than the Winning Bid Rate
         shall be accepted, thus requiring each such Potential Holder to
         purchase the shares of AMPS that are the subject of such Submitted
         Bids;

                  (D) the Submitted Bid of each of the Existing Holders
         specifying a rate per annum that is equal to the Winning Bid Rate shall
         be rejected, thus entitling such Existing Holder to continue to hold
         the Outstanding shares of AMPS that are the subject of such Submitted
         Bid, unless the number of Outstanding shares of AMPS subject to all
         such Submitted Bids shall be greater than the number of Outstanding
         shares of AMPS ("Remaining Shares") equal to the excess of the
         Available AMPS over the number of Outstanding shares of AMPS subject to
         Submitted Bids described in paragraphs 8(e)(i)(B) and 8(e)(i)(C), in
         which event the Submitted Bids of each such Existing Holder shall be
         accepted, and each such Existing Holder shall be required to sell
         Outstanding shares of AMPS, but only if an amount equal to the
         difference between (1) the number of Outstanding shares of AMPS then
         held by such Existing Holder subject to such

                                       45

<PAGE>

         Submitted Bid and (2) the number of shares of AMPS obtained by
         multiplying (x) the number of Remaining Shares by (y) a fraction the
         numerator of which shall be the number of Outstanding shares of AMPS
         held by such Existing Holder subject to such Submitted Bid and the
         denominator of which shall be the sum of the numbers of Outstanding
         shares of AMPS subject to such Submitted Bids made by all such Existing
         Holders that specified a rate per annum equal to the Winning Bid Rate;
         and

                  (E) the Submitted Bid of each of the Potential Holders
         specifying a rate per annum that is equal to the Winning Bid Rate shall
         be accepted, thus requiring each such Potential Holder to purchase the
         shares of AMPS that are the subject of such Submitted Bids; but only in
         an amount equal to the number of Outstanding shares of AMPS obtained by
         multiplying (x) the difference between the Available AMPS and the
         number of shares of AMPS subject to Submitted Bids described in
         paragraphs 8(e)(i)(B), 8(e)(i)(C) and 8(e)(i)(D) by (y) a fraction the
         numerator of which shall be the number of Outstanding shares of AMPS
         subject to such Submitted Bid and the denominator of which shall be the
         sum of the numbers of Outstanding shares of AMPS subject to such
         Submitted Bids made by all such Potential Holders that specified rates
         per annum equal to the Winning Bid Rate.

                      (ii) If Sufficient Clearing Bids have not been made (other
than because all of the Outstanding shares of AMPS are subject to Submitted Hold
Orders), subject to the provisions of paragraph 8(e)(iii), Submitted Orders
shall be accepted or rejected as follows in the following order of priority and
all other Submitted Bids shall be rejected:

                  (A) the Submitted Bid of each Existing Holder specifying any
         rate per annum that is equal to or lower than the Maximum Applicable
         Rate shall be rejected, thus entitling such Existing Holder to continue
         to hold the Outstanding shares of AMPS that are the subject of such
         Submitted Bid;

                  (B) the Submitted Bid of each Potential Holder specifying any
         rate per annum that is equal to or lower than the Maximum Applicable
         Rate shall be accepted, thus requiring such Potential Holder to
         purchase the Outstanding shares of AMPS that are the subject of such
         Submitted Bid; and

                  (C) the Submitted Bid of each Existing Holder specifying any
         rate per annum that is higher than the Maximum Applicable Rate shall be
         accepted and the Submitted Sell Order of each Existing Holder shall be
         accepted, thus requiring each such Existing Holder to sell the shares
         of AMPS that are the subject of such Submitted Bid or Submitted Sell
         Order, in both cases only in an amount equal to the difference between
         (1) the number of Outstanding shares of AMPS then held by such Existing
         Holder subject to such Submitted Bid or Submitted Sell Order and (2)
         the number of Outstanding shares of AMPS obtained by multiplying (x)
         the difference between the Available AMPS and the aggregate number of
         Outstanding shares of AMPS subject to Submitted Bids described in
         paragraphs 8(e)(ii)(A) and 8(e)(ii)(B) by (y) a fraction the numerator
         of which shall be the number of Outstanding shares of AMPS held by such
         Existing Holder subject to such Submitted Bid or Submitted Sell Order
         and the denominator of which

                                       46

<PAGE>

         shall be the number of Outstanding shares of AMPS subject to all such
         Submitted Bids and Submitted Sell Orders.

                  (iii) If, as a result of the procedures described in
paragraphs 8(e)(i) or 8(e)(ii), 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 AMPS on any Auction Date, the Auction Agent
shall, in such manner as in its sole discretion it shall determine, round up or
down the number of shares of AMPS to be purchased or sold by any Existing Holder
or Potential Holder on such Auction Date so that each Outstanding share of AMPS
purchased or sold by each Existing Holder or Potential Holder on such Auction
Date shall be a whole share of AMPS.

                  (iv) If, as a result of the procedures described in paragraph
8(e)(i), any Potential Holder would be entitled or required to purchase less
than a whole share of AMPS on any Auction Date, the Auction Agent shall, in such
manner as in its sole discretion it shall determine, allocate shares of AMPS for
purchase among Potential Holders so that only whole shares of AMPS are purchased
on such Auction Date by any Potential Holder, even if such allocation results in
one or more of such Potential Holders not purchasing any shares of AMPS on such
Auction Date.

                  (v) Based on the results of each Auction, the Auction Agent
shall determine, with respect to each Broker-Dealer that submitted Bids or Sell
Orders on behalf of Existing Holders or Potential Holders, the aggregate number
of Outstanding shares of AMPS to be purchased and the aggregate number of
Outstanding shares of AMPS to be sold by such Potential Holders and Existing
Holders and, to the extent that such aggregate number of Outstanding shares to
be sold differ, the Auction Agent shall determine to which other Broker-Dealer
or Broker-Dealers acting for one or more purchasers such Broker-Dealer shall
deliver, or from which other Broker-Dealer or Broker-Dealers acting for one or
more sellers such Broker-Dealer shall receive, as the case may be, Outstanding
shares of AMPS.

            (f)   Participation in Auctions.

                  Neither the Corporation nor any Affiliate of the Corporation
may submit an order in any Auction.

             9.   Miscellaneous.

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

                  (b) If there is a Securities Depository, one certificate for
all of the shares of AMPS shall be issued to the Securities Depository and
registered in the name of the Securities Depository or its nominee. Such
certificate shall bear a legend to the effect that such certificate is issued
subject to the provisions contained in these Articles Supplementary and each
Purchaser's Letter. The Corporation will also issue stop-transfer instructions
to the Paying

                                       47

<PAGE>

Agent for the shares of AMPS. Except as provided in paragraph (c) below, the
Securities Depository or its nominee will be the Holder, and no beneficial owner
shall receive certificates representing its ownership interest in such shares.

                  (c) If there is no Securities Depository, the Corporation may
at its option issue one or more new certificates with respect to such shares
(without the legend referred to in paragraph 9(b) registered in the names of the
beneficial owners or their nominees and rescind the stop-transfer instruction
referred to in paragraph 9(b) with respect to such shares.

                  (d) The Corporation shall exercise its best efforts to
maintain an Auction Agent pursuant to an agreement containing terms not
materially less favorable to the Corporation than the terms of the Auction Agent
Agreement first entered into by the Corporation pursuant to the resolutions
adopted by the Board of Directors on December 13, 1988.

                  (e) The Corporation shall use its best efforts to maintain a
rating of the AMPS from each of the Rating Agencies.

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

                  (g) So long as any shares of AMPS shall be outstanding, the
Corporation shall not engage in "short sales" or "hedging" or enter into
"futures contracts" or "option contracts" (other than Forward Contracts) with
respect to the Eligible Portfolio Property.

                  IN WITNESS WHEREOF, THE FIRST AUSTRALIA PRIME INCOME FUND,
INC., has caused these presents to be signed in its name and on its behalf by
its President and its corporate seal to be hereunder affixed and attested by its
Assistant Secretary on this 25/th/ day of July, 1989, and its President
acknowledges that these Articles Supplementary are the act and deed of The First
Australia Prime Income Fund, Inc., and, under the penalties of perjury, that the
matters and facts set forth herein with respect to authorization and approval
are true in all material respects to the best of his knowledge, information and
belief.

                                     THE FIRST AUSTRALIA PRIME INCOME FUND, INC.


                                     By:  /s/ Margaret A. Bancroft
                                          -------------------------------
                                          Attorney-in-fact
                                          for Brian M. Sherman, President

ATTEST:


/s/ Margaret A. Bancroft
----------------------------
Assistant Secretary

                                       48

</TEXT>
</DOCUMENT>
