<DOCUMENT>
<TYPE>EX-99.A3
<SEQUENCE>3
<FILENAME>dex99a3.txt
<DESCRIPTION>ARTICLES SUPPLEMENTARY
<TEXT>
<PAGE>

                                                                Exhibit a.3


                        MANAGED MUNICIPALS PORTFOLIO INC.
            ARTICLES SUPPLEMENTARY CREATING AND FIXING THE RIGHTS OF
               MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK,
              SERIES M, SERIES T, SERIES W, SERIES Th AND SERIES F
                              ("PREFERRED SHARES")





<PAGE>


                                TABLE OF CONTENTS
DESIGNATION ...................................................................4
DEFINITIONS ...................................................................5
PART I .......................................................................25
 1.  NUMBER OF AUTHORIZED SHARES .............................................25
 2.  DIVIDENDS ...............................................................25
     (a) RANKING .............................................................25
     (b) CUMULATIVE CASH DIVIDENDS ...........................................26
     (c) DIVIDENDS CUMULATIVE FROM DATE OF ORIGINAL ISSUE ....................26
     (d) DIVIDEND PAYMENT DATES AND ADJUSTMENT THEREOF ...................... 26
     (e) DIVIDEND RATES AND CALCULATION OF DIVIDENDS .........................26
     (f) CURING A FAILURE TO DEPOSIT .........................................28
     (g) DIVIDEND PAYMENTS BY FUND TO AUCTION AGENT ..........................29
     (h) AUCTION AGENT AS TRUSTEE OF DIVIDEND PAYMENTS BY FUND ...............29
     (i) DIVIDENDS PAID TO HOLDERS ...........................................29
     (j) DIVIDENDS CREDITED AGAINST EARLIEST ACCUMULATED BUT
         UNPAID DIVIDENDS ....................................................29
     (k) DIVIDENDS DESIGNATED AS EXEMPT-INTEREST DIVIDENDS ...................29
3.   GROSS-UP PAYMENTS....................................................... 29
     (a) MINIMUM RATE PERIODS AND SPECIAL RATE PERIODS OF 28 RATE
         PERIOD DAYS OR FEWER ................................................30
     (b) SPECIAL RATE PERIODS OF MORE THAN 28 RATE PERIOD DAYS ...............30
     (c) NO GROSS-UP PAYMENTS IN THE EVENT OF A REALLOCATION .................30
4.       DESIGNATION OF SPECIAL RATE PERIODS .................................30
     (a) LENGTH OF AND PRECONDITIONS FOR SPECIAL RATE PERIOD .................30
     (b) ADJUSTMENT OF LENGTH OF SPECIAL RATE PERIOD .........................31
     (c) NOTICE OF PROPOSED SPECIAL RATE PERIOD ..............................31
     (d) NOTICE OF SPECIAL RATE PERIOD .......................................31
     (e) FAILURE TO DELIVER NOTICE OF SPECIAL RATE PERIOD ....................32
5.    VOTING RIGHTS ..........................................................32
     (a) ONE VOTE PER SHARE OF PREFERRED SHARES ..............................32
     (b) VOTING FOR ADDITIONAL DIRECTORS .....................................33
     (c) HOLDERS OF PREFERRED SHARES TO VOTE ON CERTAIN OTHER MATTERS ........34
     (d) BOARD MAY TAKE CERTAIN ACTIONS WITHOUT SHAREHOLDER APPROVAL .........35
     (e) RELATIVE RIGHTS AND PREFERENCES .....................................36
     (f) NO PREEMPTIVE RIGHTS OR CUMULATIVE VOTING ...........................36
     (g) VOTING FOR DIRECTORS SOLE REMEDY FOR FUND'S FAILURE TO PAY
         DIVIDENDS ...........................................................36
     (h) HOLDERS ENTITLED TO VOTE ............................................36
6.   1940 ACT PREFERRED SHARES ASSET COVERAGE ................................36
7.   PREFERRED SHARES BASIC MAINTENANCE AMOUNT ...............................37
8    [RESERVED] ..............................................................39
9.   RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS .......................39
     (a) DIVIDENDS ON SHARES OTHER THAN PREFERRED SHARES .....................39

<PAGE>


      (b) DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO COMMON
          SHARES UNDER THE 1940 ACT ..........................................39
      (c) OTHER RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS ............40
10.   [RESERVED] .............................................................40
11.   REDEMPTION .............................................................40
      (a) OPTIONAL REDEMPTION ................................................40
      (b) MANDATORY REDEMPTION ...............................................42
      (c) NOTICE OF REDEMPTION ...............................................43
      (d) NO REDEMPTION UNDER CERTAIN CIRCUMSTANCES ..........................43
      (e) ABSENCE OF FUNDS AVAILABLE FOR REDEMPTION ..........................43
      (f) AUCTION AGENT AS DIRECTOR OF REDEMPTION PAYMENTS BY FUND ...........44
      (g) SHARES FOR WHICH NOTICE OF REDEMPTION HAS BEEN GIVEN ARE
          NO LONGER OUTSTANDING ..............................................44
      (h) COMPLIANCE WITH APPLICABLE LAW .....................................44
      (i) ONLY WHOLE SHARES OF PREFERRED SHARES MAY BE REDEEMED ..............44
12.   LIQUIDATION RIGHTS .....................................................45
      (a) RANKING ............................................................45
      (b) DISTRIBUTIONS UPON LIQUIDATION .....................................45
      (c) PRO RATA DISTRIBUTIONS .............................................45
      (d) RIGHTS OF JUNIOR SHARES ............................................45
      (e) CERTAIN EVENTS NOT CONSTITUTING LIQUIDATION ........................45
13.   RATING AGENCY RESTRICTIONS .............................................44
14.   MISCELLANEOUS ..........................................................50
      (a) [RESERVED] .........................................................50
      (b) NO FRACTIONAL SHARES ...............................................50
      (c) STATUS OF SHARES OF PREFERRED SHARES REDEEMED, EXCHANGED
          OR OTHERWISE ACQUIRED BY THE FUND ..................................50
      (d) BOARD MAY RESOLVE AMBIGUITIES ......................................51
      (e) HEADINGS NOT DETERMINATIVE .........................................51
      (f) NOTICES ............................................................51
PART II ......................................................................51
1.     ORDERS ................................................................51
2.     SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT ...............53
3.     DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE AND
       APPLICABLE RATE .......................................................55
4.     ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL
       ORDERS AND ALLOCATION OF SHARES .......................................57
5.     NOTIFICATION OF ALLOCATIONS ...........................................60
6.     AUCTION AGENT .........................................................60
7.     TRANSFER OF SHARES OF PREFERRED SHARES ................................60
8.     GLOBAL CERTIFICATE ....................................................61


<PAGE>

                  MANAGED MUNICIPALS PORTFOLIO INC., a Maryland corporation
(the "Fund"), certifies to the State Department of Assessments and Taxation of
Maryland that:

                  FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Fund by Article V of the Fund's Articles of Incorporation,
as heretofore amended (which, as hereafter restated, amended and supplemented
from time to time are, together with these Articles Supplementary, herein called
the "Charter"), the Board of Directors has, by resolution, reclassified from the
unissued Common Shares of the Fund and authorized the issuance of 10,000
shares of Municipal Auction Rate Cumulative Preferred Stock, par value $.001 per
share, liquidation preference $25,000 per share, having such designation or
designations as to series, and such number of shares per series, as is set forth
under "Designations" below.

                  SECOND: The preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the shares of each series of Preferred Shares are as follows (each
such series being referred to herein as a series of Preferred Shares, and shares
of all such series being referred to herein individually as a share of Preferred
Shares and collectively as Preferred Shares):

                                   DESIGNATION

          SERIES M: A series of 2,000 shares of preferred stock, par value
$.001 per share, liquidation preference $25,000 per share, is hereby designated
"Municipal Auction Rate Cumulative Preferred Stock, Series M" ("Series M"). Each
share of Series M shall have an Initial Rate Period of _____ days, an initial
dividend rate for its Initial Rate Period equal to ___% per annum and an initial
Dividend Payment Date of ________, 2002 and such other preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption, in addition to those required by applicable
law, as are set forth in Part I and Part II of these Articles Supplementary. The
Series M shall constitute a separate series of Preferred Shares of the Fund.

          SERIES T: A series of 2,000 shares of preferred stock, par value
$.001 per share, liquidation preference $25,000 per share, is hereby designated
"Municipal Auction Rate Cumulative Preferred Stock, Series T" ("Series T"). Each
share of Series T shall have an Initial Rate Period of ____ days, an initial
dividend rate for its Initial Rate Period equal to ___% per annum and an initial
Dividend Payment Date of ________, 2002 and such other preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption, in addition to those required by applicable
law, as are set forth in Part I and Part II of these Articles Supplementary. The
Series T shall constitute a separate series of Preferred Shares of the Fund.

          SERIES W: A series of 2,000 shares of preferred stock, par value
$.001 per share, liquidation preference $25,000 per share, is hereby designated
"Municipal Auction Rate Cumulative Preferred Stock, Series W" ("Series W"). Each
share of Series W shall have an Initial Rate Period of ____ days, an initial
dividend rate for its Initial Rate Period equal to ___% per annum and an initial
Dividend Payment Date of ________, 2002 and such other preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption, in addition to those required by applicable
law, as are set

                                      -4-


<PAGE>

forth in Part I and Part II of these Articles Supplementary. The Series W shall
constitute a separate series of Preferred Shares of the Fund.

          SERIES Th: A series of 2,000 shares of preferred stock, par value
$.001 per share, liquidation preference $25,000 per share, is hereby designated
"Municipal Auction Rate Cumulative Preferred Stock, Series Th" ("Series Th").
Each share of Series Th shall have an Initial Rate Period of ___ days, an
initial dividend rate for its Initial Rate Period equal to ___% per annum and an
initial Dividend Payment Date of ________, 2002 and such other preferences,
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption, in addition to those required by
applicable law, as are set forth in Part I and Part II of these Articles
Supplementary. The Series Th shall constitute a separate series of Preferred
Shares of the Fund.

          SERIES F: A series of 2,000 shares of preferred stock, par value
$.001 per share, liquidation preference $25,000 per share, is hereby designated
"Municipal Auction Rate Cumulative Preferred Stock, Series F" ("Series F"). Each
share of Series F shall have an Initial Rate Period of ___ days, an initial
dividend rate for its Initial Rate Period equal to ___% per annum and an initial
Dividend Payment Date of _______, 2002 and such other preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption, in addition to those required by applicable
law, as are set forth in Part I and Part II of these Articles Supplementary. The
Series F shall constitute a separate series of Preferred Shares of the Fund.

         Subject to the provisions of Section 13(c)(ii) of Part I hereof, the
Board of Directors of the Fund may, in the future, reclassify additional shares
of the Fund's stock as Preferred Shares, with the same preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption and other terms herein described, except that
the Applicable Rate for the Initial Rate Period, its initial Payment Date and
any other changes in the terms herein set forth shall be as set forth in the
Articles Supplementary reclassifying such shares as Preferred Shares.

         Capitalized terms used in Part I and Part II of these Articles
Supplementary shall have the meanings provided in the "Definitions" section
immediately following.

                                   DEFINITIONS

                  As used in Parts I and II of these Articles Supplementary, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:

                  (a) ""AA" COMPOSITE COMMERCIAL PAPER RATE" on any date for
any Rate Period of shares of a series of Preferred Shares, shall mean (i) (A) in
the case of any Minimum Rate Period or any Special Rate Period of fewer than 49
Rate Period Days, the interest equivalent of the 30-day rate; provided, however,
that if such Rate Period is a Minimum Rate Period and the "AA" Composite
Commercial Paper Rate is being used to determine the Applicable Rate for shares
of such series when all of the Outstanding shares of such series are subject to
Submitted Hold Orders, then the interest equivalent of the seven-day rate, and
(B) in

                                      -5-

<PAGE>

the case of any Special Rate Period of (1) 49 or more but fewer than 70 Rate
Period Days, the interest equivalent of the 60-day rate; (2) 70 or more but
fewer than 85 Rate Period Days, the arithmetic average of the interest
equivalent of the 60-day and 90-day rates; (3) 85 or more but fewer than 99 Rate
Period Days, the interest equivalent of the 90-day rate; (4) 99 or more but
fewer than 120 Rate Period Days, the arithmetic average of the interest
equivalent of the 90-day and 120-day rates; (5) 120 or more but fewer than 141
Rate Period Days, the interest equivalent of the 120-day rate; (6) 141 or more
but fewer than 162 Rate Period Days, the arithmetic average of the interest
equivalent of the 120-day and 180-day rates; (7) 162 or more but fewer than 183
Rate Period Days, the interest equivalent of the 180-day rate, in each case 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, as
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York for the Business Day next preceding such date; and (8) in the case of a
Special Rate Period of 183 or more Rate Period Days, the Treasury Rate which
most closely matches the Special Rate; or (ii) in the event that the Federal
Reserve Bank of New York does not make available any such rate, then the
arithmetic average of such rates, as quoted on a discount basis or otherwise, by
the Commercial Paper Dealers to the Auction Agent for the close of business on
the Business Day next preceding such date. If any Commercial Paper Dealer does
not quote a rate required to determine the "AA" Composite Commercial Paper Rate,
the "AA" Composite Commercial Paper Rate shall be determined on the basis of the
quotation or quotations furnished by the remaining Commercial Paper Dealer or
Commercial Paper Dealers and any Substitute Commercial Paper Dealer or
Substitute Commercial Paper Dealers selected by the Fund to provide such rate or
rates not being supplied by any Commercial Paper Dealer or Commercial Paper
Dealers, as the case may be, or, if the Fund does not select any such Substitute
Commercial Paper Dealer or Substitute Commercial Paper Dealers, by the remaining
Commercial Paper Dealer or Commercial Paper Dealers. For purposes of this
definition, the "interest equivalent" of a rate stated on a discount basis (a
"discount rate") for commercial paper of a given days' maturity shall be equal
to the quotient (rounded upwards to the next higher one-thousandth (.001) of 1%)
of (A) the discount rate divided by (B) the difference between (x) 1.00 and (y)
a fraction, the numerator of which shall be the product of the discount rate
times the number of days in which such commercial paper matures and the
denominator of which shall be 360.

        (b) "ACCOUNTANT'S CONFIRMATION" shall have the meaning specified in
paragraph (c) of Section 7 of Part I of these Articles Supplementary.

        (c) "AFFILIATE" shall mean, for purposes of the definition of
"Outstanding," any Person known to the Auction Agent to be controlled by, in
control of or under common control with the Fund; provided, however, that no
Broker-Dealer controlled by, in control of or under common control with the Fund
shall be deemed to be an Affiliate nor shall any corporation or any Person
controlled by, in control of or under common control with such corporation one
of the trustees, directors, or executive officers of which is a Director of the
Fund be deemed to be an Affiliate solely because such trustee, director or
executive officer is also a Director of the Fund.

        (d)  "AGENT MEMBER" shall mean a member of or participant in the
Securities Depository that will act on behalf of a Bidder.

                                      -6-


<PAGE>

        (e)  "ALL HOLD ORDER RATE" shall have the meaning specified in
subparagraph b(iii) of Section 3 of Part I of these Articles Supplementary.

        (f)  "ANNUAL VALUATION DATE" shall mean the last Business Day of each
December of each year.

        (g)  "APPLICABLE RATE" shall have the meaning specified in
subparagraph (e)(i) of Section 2 of Part I of these Articles Supplementary.

        (h) "AUCTION" shall mean each periodic implementation of the Auction
Procedures.

        (i) "AUCTION AGENCY AGREEMENT" shall mean the agreement between the
Fund and the Auction Agent which provides, among other things, that the Auction
Agent will follow the Auction Procedures for purposes of determining the
Applicable Rate for shares of a series of Preferred Shares so long as the
Applicable Rate for shares of such series is to be based on the results of an
Auction.

        (j) "AUCTION AGENT" shall mean the entity appointed as such by a
resolution of the Board of Directors in accordance with Section 6 of Part II of
these Articles Supplementary.

        (k) "AUCTION DATE" with respect to any Rate Period for shares of a
series of Preferred Shares, shall mean the Business Day next preceding the first
day of such Rate Period.

        (l) "AUCTION PROCEDURES" shall mean the procedures for conducting
Auctions set forth in Part II of these Articles Supplementary.

        (m) "AVAILABLE PREFERRED SHARES" shall have the meaning specified in
paragraph (a) of Section 3 of Part II of these Articles Supplementary.

        (n) "BENCHMARK RATE" shall have the meaning specified in paragraph
(b)(iii) of Section 3 of Part II of these Articles Supplementary.

        (o) "BENEFICIAL OWNER" with respect to shares of a series of Preferred
Shares, means a customer of a Broker-Dealer who is listed on the records of that
Broker-Dealer (or, if applicable, the Auction Agent) as a holder of shares of
such series.

        (p) "BID" and "BIDS" shall have the respective meanings specified
in paragraph (a) of Section 1 of Part II of these Articles Supplementary.

        (q) "BIDDER" and "BIDDERS" shall have the respective meanings specified
in paragraph (a) of Section 1 of Part II of these Articles Supplementary;
provided, however, that neither the Fund nor any affiliate thereof shall be
permitted to be a Bidder in an Auction, except that any Broker-Dealer that is an
affiliate of the Fund may be a Bidder in an Auction, but only if the Orders
placed by such Broker-Dealer are not for its own account.

                                      -7-

<PAGE>

        (r) "BOARD OF DIRECTORS" shall mean the Board of Directors of the Fund
or any duly authorized committee thereof.

        (s) "BROKER-DEALER" shall mean any broker-dealer, commercial bank or
other entity permitted by law to perform the functions required of a
Broker-Dealer in Part II of these Articles Supplementary, that is a member of,
or a participant in, the Securities Depository or is an affiliate of such member
or participant, has been selected by the Fund and has entered into a
Broker-Dealer Agreement that remains effective.

        (t) "BROKER-DEALER AGREEMENT" shall mean an agreement among the Fund,
the Auction Agent and a Broker-Dealer pursuant to which such Broker-Dealer
agrees to follow the procedures specified in Part II of these Articles
Supplementary.

        (u) "BUSINESS DAY" shall mean a day on which the New York Stock Exchange
is open for trading and which is neither a Saturday, Sunday nor any other day on
which banks in The City of New York, New York, are authorized by law to close.

        (v) "CHARTER" shall have the meaning specified on the first page of
these Articles Supplementary.

        (w) "CLOSING TRANSACTION" shall have the meaning specified in paragraph
(a)(i)(A) of Section 13 of Part I of these Articles Supplementary.

        (x) "CODE" means the Internal Revenue Code of 1986, as amended.

        (y) "COMMERCIAL PAPER DEALERS" shall mean Lehman Commercial Paper
Incorporated, Goldman, Sachs & Co. and Merrill Lynch, Pierce, Fenner & Smith
Incorporated and any other commercial paper dealer selected by the Fund as to
which Moody's, Fitch or any substitute rating agency then rating the Preferred
Shares shall not have objected or, in lieu of any thereof, their respective
affiliates or successors, if such entity is a commercial paper dealer.

        (z) "COMMON SHARES" shall mean the shares of common stock, par value
$.001 per share, of the Fund.

        (aa) "CURE DATE" shall mean the Preferred Shares Basic Maintenance
Cure Date or the 1940 Act Cure Date, as the case may be.

        (bb) "DATE OF ORIGINAL ISSUE" with respect to shares of a series of
Preferred Shares, shall mean the date on which the Fund initially issued such
shares.

        (cc) "DEPOSIT SECURITIES" shall mean cash and Municipal Obligations
rated at least P-1, MIG-1 or VMIG-1 by Moody's or F1 by Fitch.


        (dd) "DISCOUNTED VALUE" as of any Valuation Date, shall mean, (i) with
respect to a Fitch Eligible Asset or Moody's Eligible Asset that is not
currently callable as of such Valuation Date at the option of the issuer
thereof, the lesser of the Market Value or par value thereof divided by the
Fitch Discount Factor for a Fitch Eligible Asset or Moody's


                                      -8-

<PAGE>



Discount Factor for a Moody's Eligible Asset, or (ii) with respect to a Fitch
Eligible Asset or Moody's Eligible Asset that is currently callable as of such
Valuation Date at the option of the issuer thereof, the quotient of (1) the
lesser of the Market Value or next call price thereof, including any call
premium, divided by (2) the Fitch Discount Factor for Fitch Eligible Assets or
the Moody's Discount Factor for Moody's Eligible Assets.

        (ee) "DIVIDEND PAYMENT DATE" with respect to shares of a series of
Preferred Shares, shall mean any date on which dividends are payable on shares
of such series pursuant to the provisions of paragraph (d) of Section 2 of Part
I of these Articles Supplementary.

        (ff) "DIVIDEND PERIOD," with respect to shares of a series of Preferred
Shares, shall mean the period from and including the Date of Original Issue of
shares of such series to but excluding the initial Dividend Payment Date for
shares of such series and any period thereafter from and including one Dividend
Payment Date for shares of such series to but excluding the next succeeding
Dividend Payment Date for shares of such series.

        (gg) "EXISTING HOLDER," with respect to shares of a series of Preferred
Shares, shall mean a Broker-Dealer (or any such other Person as may be permitted
by the Fund) that is listed on the records of the Auction Agent as a holder of
shares of such series.

        (hh) "EXPOSURE PERIOD" shall mean the period commencing on a given
Valuation Date and ending 49 days thereafter.

        (ii) "FAILURE TO DEPOSIT," with respect to shares of a series of
Preferred Shares, shall mean a failure by the Fund to pay to the Auction Agent,
not later than 12:00 noon, New York City time, (A) on the Business Day next
preceding any Dividend Payment Date for shares of such series, in funds
available on such Dividend Payment Date in The City of New York, New York, the
full amount of any dividend (whether or not earned or declared) to be paid on
such Dividend Payment Date on any share of such series or (B) on the Business
Day next preceding any redemption date in funds available on such redemption
date for shares of such series in The City of New York, New York, the Redemption
Price to be paid on such redemption date for any share of such series after
notice of redemption is mailed pursuant to paragraph (c) of Section 11 of Part I
of these Articles Supplementary; provided, however, that the foregoing clause
(B) shall not apply to the Fund's failure to pay the Redemption Price in respect
of shares of Preferred Shares when the related Notice of Redemption provides
that redemption of such shares is subject to one or more conditions precedent
and any such condition precedent shall not have been satisfied at the time or
times and in the manner specified in such Notice of Redemption.

        (jj) "FEDERAL TAX RATE INCREASE" shall have the meaning specified in
the definition of "Fitch Volatility Factor" and "Moody's Volatility Factor."

        (kk) "FITCH" shall mean Fitch, Inc. and its successors.

        (ll) "FITCH DISCOUNT FACTOR" shall mean, for purposes of determining
the Discounted Value of any Fitch Eligible Asset, the percentage determined by
reference to the rating on such asset and the shortest Exposure Period set forth
opposite such rating that is the

                                      -9-

<PAGE>

same length as or is longer than the Exposure Period, in accordance with the
table set forth below.

<TABLE>
<CAPTION>


                                              RATING CATEGORY

<S>                         <C>         <C>         <C>        <C>           <C>         <C>

EXPOSURE PERIOD               AAA*        AA*        A*          BBB*          F1**        UNRATED***

7 weeks ..................       151%       159%        166%         173%         136%           225%
8 weeks or less but greater
than 7 weeks .............       154%       161%        168%         176%         137%           231%
9 weeks or less but greater
than 8 weeks .............       158%       163%        170%         177%         138%           240%
</TABLE>

                  *    Fitch rating (or, if not rated by Fitch, see (mm) below).

                  **   Municipal Obligations rated F1 by Fitch (or, if not rated
by Fitch, see (mm) below), which do not mature or have a demand feature at par
exercisable in 30 days and which do not have a long-term rating.

                  ***  Municipal Obligations rated less than BBB by Fitch (or,
if not rated by Fitch, see (mm) below) or unrated, not to exceed 10% of Fitch
Eligible Assets.

                  Notwithstanding the foregoing, (i) the Fitch Discount Factor
for short-term Municipal Obligations will be 115%, so long as such Municipal
Obligations are rated at least F2 by Fitch (or, if not rated by Fitch, rated
MIG-1, VMIG-1 or P-1 by Moody's or at least A-1+ or SP-1+ by S&P) and mature or
have a demand feature at par exercisable in 30 days or less, and (ii) no Fitch
Discount Factor will be applied to cash or to Receivables for Municipal
Obligations Sold.

                  Notwithstanding the foregoing, inverse floating rate
structured securities, including primary market and secondary market residual
interest bonds, may constitute no more than 10% of the Discounted Value of Fitch
Eligible Assets. The Fitch Discount Factor for such securities shall be the
product of (x) the percentage determined by reference to the rating on the
security underlying such inverse floating rate structured securities multiplied
by (y) 1.25.

                  (mm) "FITCH ELIGIBLE ASSET" shall mean cash, Receivables for
Municipal Obligations Sold or a Municipal Obligation that (i) pays interest in
cash, (ii) does not have its Fitch rating, as applicable, suspended by Fitch,
and (iii) is part of an issue of Municipal Obligations of at least $10,000,000.
Municipal Obligations issued by any one issuer and rated BB or lower or not
rated (for the purposes of this definition only, "Other Securities") may
comprise no more than 4% of total Fitch Eligible Assets; such Other Securities,
if any, together with any Municipal Obligations issued by the same issuer and
rated BBB by Fitch may comprise no more than 6% of total Fitch Eligible Assets;
such Other Securities and BBB-rated Municipal Obligations, if any, together with
any Municipal Obligations issued by the same issuer and rated A by Fitch, may
comprise no more than 10% of total Fitch Eligible Assets; and such Other
Securities, and BBB and A-rated Municipal Obligations, if any, together with any
Municipal Obligations issued by the same issuer and rated AA by Fitch, may
comprise no more than 20% of total Fitch Eligible Assets. For purposes of the
foregoing sentence any Municipal Obligation backed by the guaranty, letter of
credit or insurance issued by a third party shall be deemed to be issued by such
third party if the issuance of such third party credit is the sole determinant
of the rating on such Municipal Obligation. Other Securities issued by issuers
located within a single state or territory may comprise no more than 12% of
total Fitch Eligible Assets; such Other

                                      -10-

<PAGE>

Securities, if any, together with any Municipal Obligations issued by issuers
located within the same state or territory and rated BBB by Fitch, may comprise
no more than 20% of total Fitch Eligible Assets; such Other Securities,
BBB-rated Municipal Obligations, if any, together with any Municipal Obligations
issued by issuers located within the same state or territory and rated A by
Fitch, may comprise no more than 40% of total Fitch Eligible Assets; and such
Other Securities and BBB and A-rated Municipal Obligations, if any, together
with any Municipal Obligations issued by issuers located within the same state
or territory and rated AA by Fitch, may comprise no more than 60% of total Fitch
Eligible Assets. For purposes of applying the foregoing requirements and
applying the applicable Fitch Discount Factor, if a Municipal Obligation is not
rated by Fitch but is rated by Moody's and S&P, such Municipal Obligation
(excluding short-term Municipal Obligations) will be deemed to have the Fitch
rating which is the lower of the Moody's and S&P rating. If a Municipal
Obligation is not rated by Fitch but is rated by Moody's or S&P, such Municipal
Obligation (excluding short-term Municipal Obligations) will be deemed to have
such rating. Eligible Assets shall be calculated without including cash; and
Municipal Obligations rated F1 by Fitch or, if not rated by Fitch, rated MIG-1,
VMIG-1 or P-1 by Moody's; or, if not rated by Moody's, rated A-1+/AA or SP-1+/AA
by S&P shall be considered to have a long-term rating of A. When the Fund sells
a Municipal Obligation and agrees to repurchase such Municipal Obligation at a
future date, such Municipal Obligation shall be valued at its Discounted Value
for purposes of determining Fitch Eligible Assets, and the amount of the
repurchase price of such Municipal Obligation shall be included as a liability
for purposes of calculating the Preferred Shares Basic Maintenance Amount. When
the Fund purchases a Fitch Eligible Asset and agrees to sell it at a future
date, such Fitch Eligible Asset shall be valued at the amount of cash to be
received by the Fund upon such future date, provided that the counterparty to
the transaction has a long-term debt rating of at least A by Fitch and the
transaction has a term of no more than 30 days, otherwise, such Fitch Eligible
Asset shall be valued at the Discounted Value of such Fitch Eligible Asset.

            Notwithstanding the foregoing, an asset will not be considered
a Fitch Eligible Asset for purposes of determining the Preferred Shares Basic
Maintenance Amount to the extent it is (i) subject to any material lien,
mortgage pledge, security interest or security agreement of any kind
(collectively, "Liens"), except for (a) Liens which are being contested in good
faith by appropriate proceedings and which Fitch (if Fitch is then rating the
Preferred Shares) has indicated to the Fund will not affect the status of such
asset as a Fitch Eligible Asset, (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 or cash advanced to the Fund by the Fund's
investment adviser, custodian or the Auction Agent, (d) Liens by virtue of any
repurchase agreement, and (e) Liens in connection with any futures margin
account; or (ii) deposited irrevocably for the payment of any liabilities.

            (nn) "Fitch Hedging Transaction" shall have the meaning specified
in paragraph 13(b)(1) of Part I of these Articles Supplementary.

            (oo) "Fitch Volatility Factor" shall mean, as of any Valuation
Date, (i) in the case of any Minimum Rate Period, any Special Rate Period of 28
Rate Period Days or fewer, or any Special Rate Period of 57 Rate Period Days or
more, a multiplicative factor equal to 275%, except as otherwise provided in the
last sentence of this definition; (ii) in the case of any Special Rate Period of
more than 28 but fewer than 36 Rate Period Days, a multiplicative

                                      -11-

<PAGE>

factor equal to 203%; (iii) in the case of any Special Rate Period of more than
35 but fewer than 43 Rate Period Days, a multiplicative factor equal to 217%;
and (iv) in the case of any Special Rate Period of more than 42 but fewer than
50 Rate Period Days, a multiplicative factor equal to 226%; and (v) in the case
of any special Rate Period of more than 49 but fewer than 57 Rate Period Days, a
multiplicative factor equal to 235%. If, as a result of the enactment of changes
to the Code, the greater of the maximum marginal Federal individual income tax
rate applicable to ordinary income and the maximum marginal Federal corporate
income tax rate applicable to ordinary income will increase, such increase being
rounded up to the next five percentage points (the "Federal Tax Rate Increase"),
until the effective date described in (i) above in this definition instead shall
be determined by reference to the following table:

          FEDERAL TAX RATE INCREASE               FITCH VOLATILITY FACTOR

                    5%                                   295%
                   10%                                   317%
                   15%                                   341%
                   20%                                   369%
                   25%                                   400%
                   30%                                   436%
                   35%                                   477%
                   40%                                   525%

            (pp) "FORWARD COMMITMENTS" shall have the meaning specified in
paragraph (a)(iv) of Section 13 of Part I of these Articles Supplementary.

            (qq) "FUND" shall mean the entity named on the first page of these
Articles Supplementary, which is the issuer of the shares of Preferred Shares.

            (rr) "GROSS-UP PAYMENT" means payment to a Holder of shares of
Preferred Shares of an amount which, when taken together with the aggregate
amount of Taxable Allocations made to such Holder to which such Gross-up Payment
relates, would cause such Holder's dividends in dollars (after Federal income
tax consequences) from the aggregate of such Taxable Allocations and the related
Gross-up Payment to be equal to the dollar amount of the dividends which would
have been received by such Holder if the amount of such aggregate Taxable
Allocations would have been excludable from the gross income of such Holder.
Such Gross-up Payment shall be calculated (i) without consideration being given
to the time value of money; (ii) assuming that no Holder of shares of Preferred
Shares is subject to the AMT with respect to dividends received from the Fund;
and (iii) assuming that each Taxable Allocation and each Gross-up Payment
(except to the extent such Gross-up Payment is designated as an exempt-interest
dividend under Section 852(b)(5) of the Code or successor provisions) would be
taxable in the hands of each Holder of shares of Preferred Shares at the maximum
marginal combined regular Federal personal income tax rate applicable to
ordinary income (taking into account the Federal income tax deductibility of
state and local taxes paid or incurred) or net capital gains, as applicable, or
the maximum marginal regular Federal corporate income tax rate applicable to
ordinary income or net capital gains, as applicable, whichever is greater, in
effect at the time such Gross-up Payment is made.

            (ss) "HOLDER" with respect to shares of a series of Preferred
Shares, shall mean the registered holder of such shares as the same appears on
the record books of the Fund.

                                      -12-

<PAGE>

            (tt) "HOLD ORDER" and "HOLD ORDERS" shall have the respective
meanings specified in paragraph (a) of Section 1 of Part II of these Articles
Supplementary.

            (uu) "INDEPENDENT ACCOUNTANT" shall mean a nationally recognized
accountant, or firm of accountants, that is with respect to the Fund an
independent public accountant or firm of independent public accountants under
the Securities Act of 1933, as amended from time to time.

            (vv) "INITIAL RATE PERIOD" for shares of Series M, Series T, Series
W, Series Th and Series F shall be the period from and including the Date of
Original Issue thereof to but excluding _______, 2002, _______, 2002, _______,
2002, _______, 2002 and _______, 2002, respectively.

            (ww) "INTEREST EQUIVALENT" means a yield on a 360-day basis of a
discount basis security which is equal to the yield on an equivalent
interest-bearing security.

            (xx) "KENNY INDEX" shall have the meaning specified in the
definition of "Taxable Equivalent of the Short-Term Municipal Bond Rate."

            (yy) "LATE CHARGE" shall have the meaning specified in subparagraph
(e)(1)(B) of Section 2 of Part I of these Articles Supplementary.

            (zz) "LIQUIDATION PREFERENCE" with respect to a given number of
shares of Preferred Shares, means $25,000 times that number.

            (aaa) "MARKET VALUE" of any asset of the Fund shall mean the market
value thereof determined by FT Interactive Data, J.J. Kenny or any other pricing
service or services designated from time to time by management or the Board of
Directors, provided that management or the Board of Directors obtains written
assurance from Moody's and Fitch, if Moody's and Fitch are then rating the
Preferred Shares, and from any substitute rating agency then rating the
Preferred Shares that such designation will not impair the rating then assigned
by Moody's, Fitch or such substitute rating agency to the Preferred Shares (the
"Pricing Service"). Market Value of any asset shall include any interest accrued
thereon. The Pricing Service values portfolio securities at the mean between the
quoted bid and asked price or the yield equivalent when quotations are readily
available. Securities for which quotations are not readily available are valued
at fair value as determined by the Pricing Service using methods which include
consideration of: yields or prices of municipal bonds of comparable quality,
type of issue, coupon, maturity and rating; indications as to value from
dealers; and general market conditions. The Pricing Service may employ
electronic data processing techniques or a matrix system, or both, to determine
valuations. If the Pricing Service fails to provide the Market Value of any
Municipal Obligation, such Municipal Obligation shall be valued at the lower of
two bid quotations (one of which shall be in writing) obtained by the Fund from
two dealers who are members of the National Association of Securities Dealers,
Inc. and are making a market in such Municipal Obligations. Futures contracts
and options are valued at closing prices for such instruments established by the
exchange or board of trade on which they are traded, or if market quotations are
not readily available, are valued at fair value as determined by the Pricing
Service


                                      -13-

<PAGE>

or if the Pricing Service is not able to value such instruments they shall
be valued at fair value on a consistent basis using methods determined in good
faith by the Board of Directors.


            (bbb) "MAXIMUM POTENTIAL GROSS-UP PAYMENT LIABILITY" as of any
Valuation Date, shall mean the aggregate amount of Gross-up Payments that would
be due if the Fund were to make Taxable Allocations, with respect to any taxable
year, estimated based upon dividends paid and the amount of undistributed
realized net capital gains and other taxable income earned by the Fund, as of
the end of the calendar month immediately preceding such Valuation Date, and
assuming such Gross-up Payments are fully taxable.

            (ccc) "MAXIMUM RATE" for shares of a series of Preferred Shares on
any Auction Date for shares of such series, shall mean:

            (i)   in the case of any Auction Date which is not the Auction Date
immediately prior to the first day of any proposed Special Rate Period
designated by the Fund pursuant to Section 4 of Part I of these Articles
Supplementary, the product of (A) the Reference Rate on such Auction Date for
the next Rate Period of shares of such series and (B) the Rate Multiple on such
Auction Date, unless shares of such series have or had a Special Rate Period
(other than a Special Rate Period of 28 Rate Period Days or fewer) and an
Auction at which Sufficient Clearing Bids existed has not yet occurred for a
Minimum Rate Period of shares of such series after such Special Rate Period, in
which case the higher of:

            (A)   the dividend rate on shares of such series for the
then-ending Rate Period; and

            (B)   the product of (1) the higher of (x) the Reference Rate on
such Auction Date for a Rate Period equal in length to the then-ending Rate
Period of shares of such series, if such then-ending Rate Period was 364 Rate
Period Days or fewer, or the Treasury Note Rate on such Auction Date for a Rate
Period equal in length to the then-ending Rate Period of shares of such series,
if such then-ending Rate Period was more than 364 Rate Period Days, and (y) the
Reference Rate on such Auction Date for a Rate Period equal in length to such
Special Rate Period of shares of such series, if such Special Rate Period was
364 Rate Period Days or fewer, or the Treasury Note Rate on such Auction Date
for a Rate Period equal in length to such Special Rate Period, if such Special
Rate Period was more than 364 Rate Period Days and (2) the Rate Multiple on such
Auction Date; or

            (ii)  in the case of any Auction Date which is the Auction Date
immediately prior to the first day of any proposed Special Rate Period
designated by the Fund pursuant to Section 4 of Part I of these Articles
Supplementary, the product of (A) the highest of (1) the Reference Rate on such
Auction Date for a Rate Period equal in length to the then-ending Rate Period of
shares of such series, if such then-ending Rate Period was 364 Rate Period Days
or fewer, or the Treasury Note Rate on such Auction Date for a Rate Period equal
in length to the then-ending Rate Period of shares of such series, if such
then-ending Rate Period was more than 364 Rate Period Days, (2) the Reference
Rate on such Auction Date for the Special Rate Period for which the Auction is
being held if such Special Rate Period is 364 Rate Period Days or fewer or the
Treasury Note Rate on such Auction Date for the Special Rate Period for which
the Auction is being held if such Special Rate Period is more than 364 Rate
Period Days, and (3) the

                                      -14-

<PAGE>

Reference Rate on such Auction Date for Minimum Rate Periods and (B) the
Rate Multiple on such Auction Date.


            (ddd) "MINIMUM RATE PERIOD" shall mean any Rate Period consisting
of 7 Rate Period Days.

            (eee) "MOODY'S" shall mean Moody's Investors Service, Inc., a
Delaware corporation, and its successors.

            (fff) "MOODY'S DISCOUNT FACTOR" shall mean, for purposes of
determining the Discounted Value of any Moody's Eligible Asset, the percentage
determined by reference to the rating on such asset and the shortest Exposure
Period set forth opposite such rating that is the same length as or is longer
than the Moody's Exposure Period, in accordance with the table set forth below:

<TABLE>
<CAPTION>


                                                               RATING CATEGORY

                          --------------------------------------------------------------------------------------------
EXPOSURE PERIOD            Aaa*       Aa*       A*      Baa*    OTHER**     (V)MIG-1***      SP-1+****   UNRATED*****
---------------           ---------  -------   -------  ------  -------      -----------     ----------- -------------
<S>                        <C>        <C>       <C>     <C>       <C>           <C>            <C>            <C>
7 weeks                      151%       159%     166%    173%      187%          136%           148%           225%
8 weeks or less but
greater than 7 weeks          154       161      168     176       190            137           149            231
9 weeks or less but
greater than 8 weeks          158       163      170     177       192            138           150            240
</TABLE>



                  -------------------
                  *     Moody's rating.

                  **    Municipal Obligations not rated by Moody's but rated
BBB by S&P.

                  ***   Municipal Obligations rated MIG-1 or VMIG-1, which do
not mature or have a demand feature at par exercisable in 30 days and which do
not have a long-term rating.

                  ****  Municipal Obligations not rated by Moody's but rated
A-1+ or SP-1+ by S&P, which do not mature or have a demand feature at par
exercisable in 30 days and which do not have a long-term rating.

                  ***** Municipal Obligations rated less than Baa3 by Moody's or
less than BBB by S&P or not rated by Moody's or S&P not to exceed 10% of Moody's
Eligible Assets.

                  Notwithstanding the foregoing, (i) the Moody's Discount Factor
for short-term Municipal Obligations will be 115%, so long as such Municipal
Obligations are rated at least MIG-1, VMIG-1 or P-1 by Moody's and mature or
have a demand feature at par exercisable in 30 days or less or 125% as long as
such Municipal Obligations are rated at least A-1+/AA or SP-1+/AA by S&P and
mature or have a demand feature at par exercisable in 30 days or less and (ii)
no Moody's Discount Factor will be applied to cash or to Receivables for
Municipal Obligations Sold.

                  Notwithstanding the foregoing, inverse floating rate
structured securities, including primary market and secondary market residual
interest bonds, may constitute no more than 10% of the Discounted Value of
Moody's Eligible Assets. The Moody's Discount Factor

                                      -15-

<PAGE>

for such securities shall be the product of (x) the percentage determined by
reference to the rating on the security underlying such inverse floating rate
structured securities multiplied by (y) 1.25.

                 (ggg) "MOODY'S ELIGIBLE ASSET" shall mean cash, Receivables for
Municipal Obligations Sold or a Municipal Obligation that (i) pays interest in
cash, (ii) does not have its Moody's rating, as applicable, suspended by
Moody's, and (iii) is part of an issue of Municipal Obligations of at least
$10,000,000. Municipal Obligations issued by any one issuer and rated BBB or
lower by S&P, or Ba or lower by Moody's, or not rated by S&P or Moody's (for the
purposes of this definition only, "Other Securities") may comprise no more than
4% of total Moody's Eligible Assets; such Other Securities, if any, together
with any Municipal Obligations issued by the same issuer and rated Baa by
Moody's or A by S&P, may comprise no more than 6% of total Moody's Eligible
Assets; such Other Securities, Baa, and A-rated Municipal Obligations, if any,
together with any Municipal Obligations issued by the same issuer and rated A by
Moody's or AA by S&P, may comprise no more than 10% of total Moody's Eligible
Assets; and such Other Securities, Baa, A and AA-rated Municipal Obligations, if
any, together with any Municipal Obligations issued by the same issuer and rated
Aa by Moody's or AAA by S&P, may comprise no more than 20% of total Moody's
Eligible Assets. For purposes of the foregoing sentence, any Municipal
Obligation backed by the guaranty, letter of credit or insurance issued by a
third party shall be deemed to be issued by such third party if the issuance of
such third party credit is the sole determinant of the rating on such Municipal
Obligation. Other Securities issued by issuers located within a single state or
territory may comprise no more than 12% of total Moody's Eligible Assets; such
Other Securities, if any, together with any Municipal Obligations issued by
issuers located within a single state or territory and rated Baa by Moody's or A
by S&P, may comprise no more than 20% of total Moody's Eligible Assets; such
Other Securities, Baa, A-rated Municipal Obligations, if any, together with any
Municipal Obligations issued by issuers located within a single state or
territory and rated A by Moody's or AA by S&P, may comprise no more than 40% of
total Moody's Eligible Assets; and such Other Securities, Baa, A and AA-rated
Municipal Obligations, if any, together with any Municipal Obligations issued by
issuers located within a single state or territory and rated Aa by Moody's or
AAA by S&P, may comprise no more than 60% of total Moody's Eligible Assets. For
purposes of applying the foregoing requirements and applying the applicable
Moody's Discount Factor, if a Municipal Obligation is not rated by Moody's but
is rated by S&P, such Municipal Obligation (excluding short-term Municipal
Obligations) will be deemed to have the Moody's rating which is one full rating
category lower than its S&P rating, respectively; a Municipal Obligation shall
be deemed to be rated BBB by S&P if rated BBB-, BBB or BBB+ by S&P; Moody's
Eligible Assets should be calculated without including cash; and Municipal
Obligations rated MIG-1, VMIG-1 or P-1 or, if not rated by Moody's, rated A1+/AA
or SP-1+/AA by S&P, shall be considered to have a long-term rating of A. When
the Fund sells a Municipal Obligation and agrees to repurchase such Municipal
Obligation at a future date, such Municipal Obligation shall be valued at its
Discounted Value for purposes of determining Moody's Eligible Assets and the
amount of the repurchase price of such Municipal Obligation shall be included as
a liability for purposes of calculating the Preferred Shares Basic Maintenance
Amount. When the Fund purchases a Moody's Eligible Asset and agrees to sell it
at a future date, such Moody's Eligible Asset shall be valued at the amount of
cash to be received by the Fund upon such future date, provided that the
counterparty to the transaction has a long-term debt rating of at least A2 from
Moody's and the transaction has a term of no more than 30 days; otherwise, such
Moody's Eligible Asset shall be valued at the Discounted Value of such Moody's
Eligible Asset.

                                      -16-

<PAGE>

                Notwithstanding the foregoing, an asset will not be considered
a Moody's Eligible Asset for purposes of determining the Preferred Shares Basic
Maintenance Amount to the extent it is (i) subject to any Liens, except for (a)
Liens which are being contested in good faith by appropriate proceedings and
which Moody's (if Moody's is then rating the Preferred Shares) has indicated to
the Fund will not affect the status of such asset as a Moody's Eligible Asset,
(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 or
cash advanced to the Fund by the Fund's investment adviser, custodian or the
Auction Agent, (d) Liens by virtue of any repurchase agreement, and (e) Liens in
connection with any futures margin account; or (ii) deposited irrevocably for
the payment of any liabilities.

                (hhh) "Moody's Hedging Transaction" shall have the meaning
specified in paragraph (a)(i) of Section 13 of Part I of these Articles
Supplementary.

                (iii) "MOODY'S VOLATILITY FACTOR" shall mean, as of any
Valuation Date, (i) in the case of any Minimum Rate Period, any Special Rate
Period of 28 Rate Period Days or fewer, or any Special Rate Period of 57 Rate
Period Days or more, a multiplicative factor equal to 275%, except as otherwise
provided in the last sentence of this definition; (ii) in the case of any
Special Rate Period of more than 28 but fewer than 36 Rate Period Days, a
multiplicative factor equal to 203%; (iii) in the case of any Special Rate
Period of more than 35 but fewer than 43 Rate Period Days, a multiplicative
factor equal to 217%; (iv) in the case of any Special Rate Period of more than
42 but fewer than 50 Rate Period Days, a multiplicative factor equal to 226%;
and (v) in the case of any Special Rate Period of more than 49 but fewer than 57
Rate Period Days, a multiplicative factor equal to 235%. If, as a result of the
enactment of changes to the Code, the greater of the maximum marginal Federal
individual income tax rate applicable to ordinary income and the maximum
marginal Federal corporate income tax rate applicable to ordinary income will
increase, such increase being rounded up to the next five percentage points (the
"Federal Tax Rate Increase"), until the effective date of such increase, the
Moody's Volatility Factor in the case of any Rate Period described in (i) above
in this definition instead shall be determined by reference to the following
table:

      FEDERAL                       VOLATILITY
     TAX RATE                         FACTOR
     INCREASE                         ------
     --------

          5%                            295%
         10%                            317%
         15%                            341%
         20%                            369%
         25%                            400%
         30%                            436%
         35%                            477%
         40%                            525%

                (jjj) "MUNICIPAL INDEX" shall have the meaning specified in
paragraph (a)(i) of Section 13 of Part I of these Articles Supplementary.

                                      -17-

<PAGE>

                (kkk) "Municipal Obligations" shall mean any and all
instruments that pay interest or make other distributions that are exempt from
regular Federal income tax and in which the Fund may invest consistent with the
investment policies and restrictions contained in its registration statement on
Form N-2 (333-73556) ("Registration Statement"), as the same may be amended from
time to time.

                (lll) "1940 ACT" shall mean the Investment Company Act of 1940,
as amended from time to time.

                (mmm) "1940 ACT CURE DATE," with respect to the failure by the
Fund to maintain the 1940 Act Preferred Shares Asset Coverage (as required by
Section 6 of Part I of these Articles Supplementary) as of the last Business Day
of each month, shall mean the last Business Day of the following month.

                (nnn) "1940 ACT PREFERRED SHARES ASSET COVERAGE" shall mean
asset coverage, as defined in Section 18(h) of the 1940 Act, of at least 200%
with respect to all outstanding senior securities of the Fund which are shares
of stock, including all outstanding shares of Preferred Shares (or such other
asset coverage as may in the future be specified in or under the 1940 Act as the
minimum asset coverage for senior securities which are shares or stock of a
closed-end investment company as a condition of declaring dividends on its
common shares or stock).

                (ooo) "NOTICE OF REDEMPTION" shall mean any notice with respect
to the redemption of shares of Preferred Shares pursuant to paragraph (c) of
Section 11 of Part I of these Articles Supplementary.

                (ppp) "NOTICE OF SPECIAL RATE PERIOD" shall mean any notice with
respect to a Special Rate Period of shares of Preferred Shares pursuant to
subparagraph (d)(i) of Section 4 of Part I of these Articles Supplementary.

                (qqq) "ORDER" and "ORDERS" shall have the respective meanings
specified in paragraph (a) of Section 1 of Part II of these Articles
Supplementary.

                (rrr) "OTHER SECURITIES" shall have the meaning specified, as
applicable, in the definitions of "Fitch Eligible Assets" and "Moody's Eligible
Assets" above.

                (sss) "OUTSTANDING" shall mean, as of any Auction Date with
respect to shares of a series of Preferred Shares, the number of shares of such
series theretofore issued by the Fund except, without duplication, (i) any
shares of such series theretofore cancelled or delivered to the Auction Agent
for cancellation or redeemed by the Fund, (ii) any shares of such series as to
which the Fund or any Affiliate thereof shall be an Existing Holder and (iii)
any shares of such series represented by any certificate in lieu of which a new
certificate has been executed and delivered by the Fund.

                (ttt) "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.

                                      -18-

<PAGE>

                (uuu) "POTENTIAL BENEFICIAL OWNER," with respect to shares of a
series of Preferred Shares, shall mean a customer of a Broker-Dealer that is not
a Beneficial Owner of shares of such series but that wishes to purchase shares
of such series, or that is a Beneficial Owner of shares of such series that
wishes to purchase additional shares of such series.

                (vvv) "POTENTIAL HOLDER," with respect to shares of a series of
Preferred Shares, shall mean a Broker-Dealer (or any such other person as may be
permitted by the Fund) that is not an Existing Holder of shares of such series
or that is an Existing Holder of shares of such series that wishes to become the
Existing Holder of additional shares of such series.

                (www) "PREFERRED SHARES" shall have the meaning set forth on the
first page of these Articles Supplementary.

                (xxx) "PREFERRED SHARES BASIC MAINTENANCE AMOUNT" as of any
Valuation Date, shall mean the dollar amount equal to the sum of (i)(A) the
product of the number of shares of Preferred Shares outstanding on such date
multiplied by $25,000 plus any redemption premium applicable to shares of
Preferred Shares then subject to redemption; (B) the aggregate amount of
dividends that will have accumulated at the Applicable Rate (whether or not
earned or declared) to (but not including) the first Dividend Payment Date for
shares of Preferred Shares outstanding that follows such Valuation Date; (C) the
aggregate amount of dividends that would accumulate on shares of each series of
Preferred Shares outstanding from such first respective Dividend Payment Date
therefor through the 49th day after such Valuation Date, at the Maximum Rate
(calculated as if such Valuation Date were the Auction Date for the Rate Period
commencing on such Dividend Payment Date) for a Minimum Rate Period of shares of
such series to commence on such Dividend Payment Date, assuming, solely for
purposes of the foregoing, that if on such Valuation Date the Fund shall have
delivered a Notice of Special Rate Period to the Auction Agent pursuant to
Section 4(d)(i) of this Part I with respect to shares of such series, such
Maximum Rate shall be the higher of (a) the Maximum Rate for the Special Rate
Period of shares of such series to commence on such Dividend Payment Date and
(b) the Maximum Rate for a Minimum Rate Period of shares of such series to
commence on such Dividend Payment Date, multiplied by the greater of the Moody's
Volatility Factor (if Moody's is then rating the Preferred Shares) and the Fitch
Volatility Factor (if Fitch is then rating the Preferred Shares) applicable to a
Minimum Rate Period, or, in the event the Fund shall have delivered a Notice of
Special Rate Period to the Auction Agent pursuant to Section 4(d)(i) of this
Part I with respect to shares of such series designating a Special Rate Period
consisting of 56 Rate Period Days or more, the Moody's Volatility Factor and
Fitch Volatility Factor applicable to a Special Rate Period of that length
(except that (1) if such Valuation Date occurs at a time when a Failure to
Deposit has occurred that has not been cured, the dividend for purposes of
calculation would accumulate at the current dividend rate then applicable to the
shares in respect of which such failure has occurred and (2) for those days
during the period described in this subparagraph (C) in respect of which the
Applicable Rate in effect immediately prior to such Dividend Payment Date will
remain in effect, the dividend for purposes of calculation would accumulate at
such Applicable Rate (or other rate or rates, as the case may be) in respect of
those days); (D) the amount of anticipated expenses of the Fund for the 90 days
subsequent to such Valuation Date; (E) the amount of the Fund's Maximum
Potential Gross-up Payment Liability in respect of shares of Preferred Shares as
of such Valuation Date; (F) the amount of any indebtedness or obligations of the
Fund senior in right of payment to the Preferred Shares; and

                                      -19

<PAGE>

(G) any current liabilities as of such Valuation Date to the extent not
reflected in any of (i)(A) through (i)(F) (including, without limitation, any
payables for Municipal Obligations purchased as of such Valuation Date and any
liabilities incurred for the purpose of clearing securities transactions) less
(ii) the value (i.e., for purposes of current Moody's guidelines, the face value
of cash, short-term Municipal Obligations rated MIG-1, VMIG-1 or P-1, and
short-term securities that are the direct obligation of the U.S. government,
provided in each case that such securities mature on or prior to the date upon
which any of (i)(A) through (i)(G) become payable, otherwise the Moody's
Discounted Value) of any of the Fund's assets irrevocably deposited by the Fund
for the payment of any of (i)(A) through (i)(G).

                (yyy) "PREFERRED SHARES BASIC MAINTENANCE CURE DATE," with
respect to the failure by the Fund to satisfy the Preferred Shares Basic
Maintenance Amount (as required by paragraph (a) of Section 7 of Part I of these
Articles Supplementary) as of a given Valuation Date, shall mean the seventh
Business Day following such Valuation Date.

                (zzz) "PREFERRED SHARES BASIC MAINTENANCE REPORT" shall mean a
report signed by the President, Treasurer, Controller, Assistant Controller or
any Senior Vice President or Vice President of the Fund which sets forth, as of
the related Valuation Date, the assets of the Fund, the Market Value and the
Discounted Value thereof (seriatim and in aggregate), and the Preferred Shares
Basic Maintenance Amount.

                (aaaa) "PRICING SERVICE" shall have the meaning specified in
the definition of "Market Value" above.

                (bbbb) "QUARTERLY VALUATION DATE" shall mean the last Business
Day of each February, May, August and November of each year, commencing on
May 31, 2002.

                                      -20-

<PAGE>

                (cccc) "Rate Multiple," for shares of Preferred Shares on any
Auction Date, shall mean the percentage, determined as set forth in the columns
below (depending on whether the Fund has notified the Auction Agent of its
intent to allocate income taxable for Federal income tax purposes to such shares
prior to the Auction establishing the Applicable Rate for such shares as
provided in these Articles Supplementary) and based on the lower of the credit
rating or ratings assigned, at the close of business on the Business Day next
preceding such Auction Date, to shares of such Preferred Shares by Moody's or
Fitch (or if Moody's and Fitch shall not make such rating available, the
equivalent of either or both of such ratings by S&P or a nationally recognized
statistical rating organization (as that term is used in the rules and
regulations of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended from time to time) that acts as a substitute
rating agency in respect of shares of Preferred Shares) (the Fund taking all
reasonable action to enable such rating agency to provide a rating for such
shares):

<TABLE>
<CAPTION>


                CREDIT RATING                       APPLICABLE PERCENTAGE-            APPLICABLE PERCENTAGE -
                                                         NO NOTIFICATION                    NOTIFICATION
<S>                          <C>                        <C>                                     <C>

      MOODY'S                  FITCH
   Aa3 or higher           AA- or higher                      110%                                150%
      A3 to A1                A- to A+                        125%                                160%
    Baa3 to Baa1            BBB- to BBB+                      150%                                250%
     Ba3 to Ba1              BB- to BB+                       200%                                275%
     Below Ba3               Below BB-                        250%                                300%
</TABLE>



                (dddd) "RATE PERIOD," with respect to shares of a series of
Preferred Shares, shall mean the Initial Rate Period of shares of such series
that have a Moody's rating of Aaa (if Moody's is then rating the Preferred
Shares) and a Fitch long-term debt rating of AAA (if Fitch is then rating the
Preferred Shares) and any Subsequent Rate Period, including any Special Rate
Period, of shares of such series.

                (eeee) "RATE PERIOD DAYS," for any Rate Period or Dividend
Period, means the number of days that would constitute such Rate Period or
Dividend Period but for the application of paragraph (d) of Section 2 of Part I
of these Articles Supplementary or paragraph (b) of Section 4 of Part I of these
Articles Supplementary.

                (ffff) "RECEIVABLES FOR MUNICIPAL OBLIGATIONS SOLD" shall mean
for purposes of calculation of Moody's Eligible Assets and Fitch Eligible Assets
as of any Valuation Date, no more than the aggregate of the following: (i) the
book value of receivables for Municipal Obligations sold as of or prior to such
Valuation Date if such receivables are due within five business days of such
Valuation Date, and if the trades which generated such receivables are (x)
settled through clearing house firms with respect to which the Fund has received
prior written authorization from Moody's (if Moody's is then rating the
Preferred Shares) and Fitch (if Fitch is then rating the Preferred Shares) or
(y) with counterparties having a Moody's long-term debt rating of at least Baa3
(if Moody's is then rating the Preferred Shares) and a Fitch long-term debt
rating of BBB (if Fitch is then rating the Preferred Shares); and (ii) the
Discounted Value of Municipal Obligations sold as of or prior to such Valuation
Date which

                                      -21-

<PAGE>

generated receivables, if such receivables are due within five business
days of such Valuation Date but do not comply with either of the conditions
specified in (i) above.

                (gggg) "REDEMPTION PRICE" shall mean the applicable redemption
price specified in Section 11 of Part I of these Articles Supplementary.

                (hhhh) "REFERENCE RATE" shall mean (i) the higher of the
Taxable Equivalent of the Short-Term Municipal Bond Rate and the "AA" Composite
Commercial Paper Rate in the case of Minimum Rate Periods and Special Rate
Periods of 28 Rate Period Days or fewer, (ii) the "AA" Composite Commercial
Paper Rate in the case of Special Rate Periods of more than 28 Rate Period Days
but fewer than 183 Rate Period Days; and (iii) the Treasury Bill Rate in the
case of Special Rate Periods of more than 182 Rate Period Days but fewer than
365 Rate Period Days.

                (iiii) "REGISTRATION STATEMENT" has the meaning specified in
the definition of "Municipal Obligations."

                (jjjj) "S&P" shall mean Standard & Poor's Rating Group
and its successors.

                (kkkk) "SECURITIES DEPOSITORY" shall mean The Depository
Trust Company and its successors and assigns or any other securities depository
selected by the Fund which agrees to follow the procedures required to be
followed by such securities depository in connection with the Preferred Shares.

                (llll) "SELL ORDER" and "SELL ORDERS" shall have the respective
meanings specified in paragraph (a) of Section 1 of Part II of these Articles
Supplementary.

                (mmmm) "SPECIAL RATE PERIOD," with respect to shares of a series
of Preferred Shares, shall have the meaning specified in paragraph (a) of
Section 4 of Part I of these Articles Supplementary.

                (nnnn) "SPECIAL REDEMPTION PROVISIONS" shall have the meaning
specified in subparagraph (a)(i) of Section 11 of Part I of these Articles
Supplementary.

                (oooo) "SUBMISSION DEADLINE" shall mean 1:30 P.M., New York
City time, on any Auction Date or such other time on any Auction Date by which
Broker-Dealers are required to submit Orders to the Auction Agent as specified
by the Auction Agent from time to time.

                (pppp) "SUBMITTED BID" and "SUBMITTED BIDS" shall have the
respective meanings specified in paragraph (a) of Section 3 of Part II of these
Articles Supplementary.

                (qqqq) "SUBMITTED HOLD ORDER" and "SUBMITTED HOLD ORDERS" shall
have the respective meanings specified in paragraph (a) of Section 3 of Part II
of these Articles Supplementary.

                                      -22-

<PAGE>

                (rrrr) "SUBMITTED ORDER" and "SUBMITTED ORDERS" shall have the
respective meanings specified in paragraph (a) of Section 3 of Part II of these
Articles Supplementary.

                (ssss) "SUBMITTED SELL ORDER" and "SUBMITTED SELL ORDERS" shall
have the respective meanings specified in paragraph (a) of Section 3 of Part II
of these Articles Supplementary.

                (tttt) "SUBSEQUENT RATE PERIOD," with respect to shares of a
series of Preferred Shares, shall mean the period from and including the first
day following the Initial Rate Period of shares of such series to but excluding
the next Dividend Payment Date for shares of such series and any period
thereafter from and including one Dividend Payment Date for shares of such
series to but excluding the next succeeding Dividend Payment Date for shares of
such series; provided, however, that if any Subsequent Rate Period is also a
Special Rate Period, such term shall mean the period commencing on the first day
of such Special Rate Period and ending on the last day of the last Dividend
Period thereof. In general, a subsequent Rate Period shall be a Minimum Rate
Period of 7 Rate Period Days, unless such subsequent Rate Period is also a
Special Rate Period.

                (uuuu) "SUBSTITUTE COMMERCIAL PAPER DEALER" shall mean Credit
Suisse First Boston or Morgan Stanley & Co., Incorporated or their respective
affiliates or successors, if such entity is a commercial paper dealer; provided,
however, that none of such entities shall be a Commercial Paper Dealer.

                (vvvv) "SUBSTITUTE U.S. GOVERNMENT SECURITIES DEALER" shall
mean Credit Suisse First Boston and Merrill Lynch, Pierce, Fenner & Smith
Incorporated or their respective affiliates or successors, if such entity is a
U.S. Government securities dealer; provided, however, that none of such entities
shall be a U.S. Government Securities Dealer.

                (wwww) "SUFFICIENT CLEARING BIDS" shall have the meaning
specified in paragraph (a) of Section 3 of Part II of these Articles
Supplementary.

                (xxxx) "TAXABLE ALLOCATION" shall have the meaning specified in
Section 3 of Part I of these Articles Supplementary.

                (yyyy) "TAXABLE INCOME" shall have the meaning specified
in paragraph (b)(iii) of Section 3 of Part II of these Articles Supplementary.

                (zzzz) "TAXABLE EQUIVALENT OF THE SHORT-TERM MUNICIPAL BOND
RATE," on any date for any Rate Period of 28 Rate Period Days or fewer, shall
mean 90% of the quotient of (A) the per annum rate expressed on an interest
equivalent basis equal to the Kenny S&P 30 day High Grade Index or any successor
index (the "Kenny Index") (provided, however, that any such successor index must
be approved by Moody's (if Moody's is then rating the Preferred Shares) and
Fitch (if Fitch is then rating the Preferred Shares)), made available for the
Business Day immediately preceding such date but in any event not later than
8:30 A.M., New York City time, on such date by Kenny S&P Evaluation Services or
any successor thereto, based upon 30-day yield evaluations at par of short-term
bonds the interest on which is excludable for regular Federal income tax
purposes under the Code of "high grade" component issuers selected by Kenny S&P
Evaluation Services or any such successor from time to time in its discretion,
which component issuers shall include, without limitation, issuers of general

                                      -23-

<PAGE>

obligation bonds, but shall exclude any bonds the interest on which constitutes
an item of tax preference under Section 57 (a)(5) of the Code, or successor
provisions, for purposes of the "alternative minimum tax," divided by (B) 1.00
minus the maximum marginal regular Federal individual income tax rate applicable
to ordinary income or the maximum marginal regular Federal corporate income tax
rate applicable to ordinary income (in each case expressed as a decimal),
whichever is greater; provided, however, that if the Kenny Index is not made so
available by 8:30 A.M., New York City time, on such date by Kenny S&P Evaluation
Services or any successor, the Taxable Equivalent of the Short-Term Municipal
Bond Rate shall mean the quotient of (A) the per annum rate expressed on an
interest equivalent basis equal to the most recent Kenny Index so made available
for any preceding Business Day, divided by (B) 1.00 minus the maximum marginal
regular Federal individual income tax rate applicable to ordinary income or the
maximum marginal regular Federal corporate income tax rate applicable to
ordinary income (in each case expressed as a decimal), whichever is greater.

                (aaaaa) "TREASURY BILL" shall mean a direct obligation of the
U.S. Government having a maturity at the time of issuance of 364 days or less.

                (bbbbb) "TREASURY BILL RATE," on any date for any Rate Period,
shall mean (i) the bond equivalent yield, calculated in accordance with
prevailing industry convention, of the rate on the most recently auctioned
Treasury Bill with a remaining maturity closest to the length of such Rate
Period, as quoted in The Wall Street Journal on such date for the Business Day
next preceding such date; or (ii) in the event that any such rate is not
published in The Wall Street Journal, then the bond equivalent yield, calculated
in accordance with prevailing industry convention, as calculated by reference to
the arithmetic average of the bid price quotations of the most recently
auctioned Treasury Bill with a remaining maturity closest to the length of such
Rate Period, as determined by bid price quotations as of the close of business
on the Business Day immediately preceding such date obtained from the U.S.
Government Securities Dealers to the Auction Agent. If any U.S. Government
Securities Dealer does not quote a rate required to determine the Treasury Bill
Rate or the Treasury Note Rate, the Treasury Bill Rate or the Treasury Note Rate
shall be determined on the basis of the quotation or quotations furnished by the
remaining U.S. Government Securities Dealer or U.S. Government Securities
Dealers and any substitute U.S. Government Securities Dealers selected by the
Fund to provide such rate or rates not being supplied by any U.S. Government
Securities Dealer of U.S. Government Securities Dealers, as the case may be, or,
if the Fund does not select any such Substitute U.S. Government Securities
Dealer or Substitute U.S. Government Securities Dealers, by the remaining U.S.
Government Securities Dealer or U.S. Government Securities Dealers.

                (ccccc) "TREASURY FUTURES" shall have the meaning specified
in paragraph (a)(i) of Section 13 of Part I of these Articles Supplementary.

                (ddddd) "TREASURY NOTE" shall mean a direct obligation of the
U.S. Government having a maturity at the time of issuance of five years or less
but more than 364 days.

                (eeeee) "TREASURY NOTE RATE," on any date for any Rate Period,
shall mean (i) the yield on the most recently auctioned Treasury Note with a
remaining maturity closest to the length of such Rate Period, as quoted in The
Wall Street Journal on such date for

                                      -24-

<PAGE>

the Business Day next preceding such date; or (ii) in the event that any such
rate is not published in The Wall Street Journal, then the yield as calculated
by reference to the arithmetic average of the bid price quotations of the most
recently auctioned Treasury Note with a remaining maturity closest to the length
of such Rate Period, as determined by bid price quotations as of the close of
business on the Business Day immediately preceding such date obtained from the
U.S. Government Securities Dealers to the Auction Agent. If any U.S. Government
Securities Dealer does not quote a rate required to determine the Treasury Bill
Rate or the Treasury Note Rate, the Treasury Bill Rate or the Treasury Note Rate
shall be determined on the basis of the quotation or quotations furnished by the
remaining U.S. Government Securities Dealer or U.S. Government Securities
Dealers and any Substitute U.S. Government Securities Dealers selected by the
Fund to provide such rate or rates not being supplied by any U.S. Government
Securities Dealer or U.S. Government Securities Dealers, as the case may be, or,
if the Fund does not select any such Substitute U.S. Government Securities
Dealer or Substitute U.S. Government Securities Dealers, by the remaining U.S.
Government Securities Dealer or U.S. Government Securities Dealers.

                (fffff) "U.S. GOVERNMENT SECURITIES DEALER" shall mean Lehman
Government Securities Incorporated, Goldman, Sachs & Co., Salomon Brothers Inc.,
Morgan Guaranty Trust Company of New York and any other U.S. Government
Securities dealer selected by the Fund as to which Moody's (if Moody's is then
rating the Preferred Shares) or Fitch (if Fitch is then rating the Preferred
Shares) shall not have objected or their respective affiliates or successors, if
such entity is a U.S. Government securities dealer.

                (ggggg) "VALUATION DATE" shall mean, for purposes of determining
whether the Fund is maintaining the Preferred Shares Basic Maintenance Amount,
the last Business Day of each month.

                (hhhhh) "VOTING PERIOD" shall have the meaning specified in
paragraph (b) of Section 5 of Part I of these Articles Supplementary.

                (iiiii) "WINNING BID RATE" shall have the meaning specified in
paragraph (a) of Section 3 of Part II of these Articles Supplementary.

                                     PART I

                1.     NUMBER OF AUTHORIZED SHARES.  The initial number of
authorized shares constituting Series M is 2,000 shares.  The initial number
of authorized shares constituting Series T is 2,000 shares.  The initial number
of authorized shares constituting Series W is 2,000 shares.  The initial number
of authorized shares constituting Series Th is 2,000 shares.  The initial number
of authorized shares constituting Series F is 2,000 shares.  No fractional
shares of any Series shall be issued.


                2.     DIVIDENDS.

                      (a) RANKING. The shares of a series of Preferred Shares
shall rank on a parity with each other with shares of any other series of
Preferred Shares and with shares of any other series of preferred stock as to
the payment of dividends by the Fund.

                                      -25-

<PAGE>


                      (b)  CUMULATIVE CASH DIVIDENDS. The Holders of shares of
Preferred Shares of any series shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available therefor in
accordance with the Charter and applicable law, cumulative cash dividends at the
Applicable Rate for shares of such series, determined as set forth in paragraph
(e) of this Section 2, and no more (except to the extent set forth in Section 3
of this Part I), payable on the Dividend Payment Dates with respect to shares of
such series determined pursuant to paragraph (d) of this Section 2. Holders of
shares of Preferred Shares shall not be entitled to any dividend, whether
payable in cash, property or shares, in excess of full cumulative dividends, as
herein provided, on shares of Preferred Shares. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on shares of Preferred Shares which may be in arrears, and, except to
the extent set forth in subparagraph (e)(i) of this Section 2, no additional sum
of money shall be payable in respect of any such arrearage.

                      (c)  DIVIDENDS CUMULATIVE FROM DATE OF ORIGINAL ISSUE.
Dividends on shares of Preferred Shares of any series shall accumulate at the
Applicable Rate for shares of such series from the Date of Original Issue
thereof.


                      (d) DIVIDEND PAYMENT DATES AND ADJUSTMENT THEREOF.
Dividends shall be payable on shares of Series M, Series T, Series W, Series Th
and Series F for the Initial Rate Period on ______, 2002, ______, 2002, ______,
2002, ______, 2002 and ______, 2002, respectively, and, if declared by the Board
of Directors, on each seventh day thereafter (each date being a "Dividend
Payment Date"); provided, however, that:

                      (i)  if the day on which dividends would otherwise be
payable on Preferred Shares is not a Business Day, then such dividends shall be
payable on such shares on the first Business Day that falls after such day, and

                      (ii) notwithstanding this paragraph (d) of Section 2,
the Fund in its discretion may establish the Dividend Payment Date in respect of
any Special Rate Period of shares of a series of Preferred Shares consisting of
more than 28 Rate Period Days; provided, however, that such date shall be set
forth in the Notice of Special Rate Period relating to such Special Rate Period,
as delivered to the Auction Agent, which Notice of Special Rate Period shall be
filed with the Secretary of the Fund; and further provided that (1) any such
Dividend Payment Date shall be a Business Day and (2) the last Dividend Payment
Date in respect of such Special Rate Period shall be the Business Day
immediately following the last day thereof, as such last day is determined in
accordance with paragraph (b) of Section 4 of this Part I.

                       (e) DIVIDEND RATES AND CALCULATION OF DIVIDENDS.

                       (i) DIVIDEND RATES. The dividend rate on shares of
Preferred Shares of any series during the period from and after the Date of
Original Issue of shares of such series to and including the last day of the
Initial Rate Period of shares of such series shall be equal to the rate per
annum set forth with respect to shares of such series under "Designation" above.
For each Subsequent Rate Period of shares of such series thereafter, the
dividend rate on shares of such series shall be equal to the rate per annum that
results from an Auction for shares of such

                                      -26-

<PAGE>

series on the Auction Date next preceding such Subsequent Rate Period;
provided, however, that if:

                (A) an Auction for any such Subsequent Rate Period is not held
for any reason other than as described below, the dividend rate on shares of
such series for such Subsequent Rate Period will be the Maximum Rate for shares
of such series on the Auction Date therefor;

                (B) any Failure to Deposit shall have occurred with respect to
shares of such series during any Rate Period thereof (other than any Special
Rate Period consisting of more than 364 Rate Period Days or any Rate Period
succeeding any Special Rate Period consisting of more than 364 Rate Period Days
during which a Failure to Deposit occurred that has not been cured), but, prior
to 12:00 Noon, New York City time, on the third Business Day next succeeding the
date on which such Failure to Deposit occurred, such Failure to Deposit shall
have been cured in accordance with paragraph (f) of this Section 2 and the Fund
shall have paid to the Auction Agent a late charge ("Late Charge") equal to the
sum of (1) if such Failure to Deposit consisted of the failure timely to pay to
the Auction Agent the full amount of dividends with respect to any Dividend
Period of the shares of such series, an amount computed by multiplying (x) 200%
of the Reference Rate for the Rate Period during which such Failure to Deposit
occurs on the Dividend Payment Date for such Dividend Period by (y) a fraction,
the numerator of which shall be the number of days for which such Failure to
Deposit has not been cured in accordance with paragraph (f) of this Section 2
(including the day such Failure to Deposit occurs and excluding the day such
Failure to Deposit is cured) and the denominator of which shall be 360, and
applying the rate obtained against the aggregate Liquidation Preference of the
outstanding shares of such series and (2) if such Failure to Deposit consisted
of the failure timely to pay to the Auction Agent the Redemption Price of the
shares, if any, of such series for which Notice of Redemption has been mailed by
the Fund pursuant to paragraph (c) of Section 11 of this Part I, an amount
computed by multiplying (x) 200% of the Reference Rate for the Rate Period
during which such Failure to Deposit occurs on the redemption date by (y) a
fraction, the numerator of which shall be the number of days for which such
Failure to Deposit is not cured in accordance with paragraph (f) of this Section
2 (including the day such Failure to Deposit occurs and excluding the day such
Failure to Deposit is cured) and the denominator of which shall be 360, and
applying the rate obtained against the aggregate Liquidation Preference of the
outstanding shares of such series to be redeemed, no Auction will be held in
respect of shares of such series for the Subsequent Rate Period thereof and the
dividend rate for shares of such series for such Subsequent Rate Period will be
the Maximum Rate on the Auction Date for such Subsequent Rate Period;

                (C) any Failure to Deposit shall have occurred with respect to
shares of such series during any Rate Period thereof (other than any Special
Rate Period consisting of more than 364 Rate Period Days or any Rate Period
succeeding any Special Rate Period consisting of more than 364 Rate Period Days
during which a Failure to Deposit occurred that has not been cured), and, prior
to 12:00 Noon, New York City time, on the third Business Day next succeeding the
date on which such Failure to Deposit occurred, such Failure to Deposit shall
not have been cured in accordance with paragraph (f) of this Section 2 or the
Fund shall not have paid the applicable Late Charge to the Auction Agent, no
Auction will be held in respect of shares of such series for the first
Subsequent Rate Period thereof thereafter (or for any Rate Period thereof
thereafter to and including the Rate Period during which (1) such Failure to
Deposit is cured in


                                      -27-

<PAGE>


accordance with paragraph (f) of this Section 2 and (2) the Fund pays the
applicable Late Charge to the Auction Agent (the condition set forth in this
clause (2) to apply only in the event Moody's is rating such shares at the time
the Fund cures such Failure to Deposit), in each case no later than 12:00 Noon,
New York City time, on the fourth Business Day prior to the end of such Rate
Period), and the dividend rate for shares of such series for each such
Subsequent Rate Period shall be a rate per annum equal to the Maximum Rate for
shares of such series on the Auction Date for such Subsequent Rate Period (but
with the prevailing rating for shares of such series, for purposes of
determining such Maximum Rate, being deemed to be "Below "ba3"/BB2"); or

                (D) any Failure to Deposit shall have occurred with respect to
shares of such series during a Special Rate Period consisting thereof of more
than 364 Rate Period Days, or during any Rate Period thereof succeeding any
Special Rate Period consisting of more than 364 Rate Period Days during which a
Failure to Deposit occurred that has not been cured, and, prior to 12:00 Noon,
New York City time, on the fourth Business Day preceding the Auction Date for
the Rate Period subsequent to such Rate Period, such Failure to Deposit shall
not have been cured in accordance with paragraph (f) of this Section 2 or, in
the event Moody's is then rating such shares, the Fund shall not have paid the
applicable Late Charge to the Auction Agent (such Late Charge, for purposes of
this subparagraph (D), to be calculated by using, as the Reference Rate, the
Reference Rate applicable to a Rate Period (x) consisting of more than 182 Rate
Period Days but fewer than 365 Rate Period Days and (y) commencing on the date
on which the Rate Period during which Failure to Deposit occurs commenced), no
Auction will be held in respect of shares of such series for such Subsequent
Rate Period (or for any Rate Period thereof thereafter to and including the Rate
Period during which (1) such Failure to Deposit is cured in accordance with
paragraph (f) of this Section 2 and (2) the Fund pays the applicable Late Charge
to the Auction Agent (the condition set forth in this clause (2) to apply only
in the event Moody's is rating such shares at the time the Fund cures such
Failure to Deposit), in each case no later than 12:00 Noon, New York City time,
on the fourth Business Day prior to the end of such Rate Period), and the
dividend rate for shares of such series for each such Subsequent Rate Period
shall be a rate per annum equal to the Maximum Rate for shares of such series on
the Auction Date for such Subsequent Rate Period (but with the prevailing rating
for shares of such series, for purposes of determining such Maximum Rate, being
deemed to be "Below "ba3"/BB2") (the rate per annum at which dividends are
payable on shares of a series of Preferred Shares for any Rate Period thereof
being herein referred to as the "Applicable Rate" for shares of such series).

                (ii) CALCULATION OF DIVIDENDS. The amount of dividends per share
payable on shares of a series of Preferred Shares on any date on which dividends
shall be payable on shares of such series shall be computed by multiplying the
Applicable Rate for shares of such series in effect for such Dividend Period or
Dividend Periods or part thereof for which dividends have not been paid by a
fraction, the numerator of which shall be the number of days in such Dividend
Period or Dividend Periods or part thereof and the denominator of which shall be
365 if such Dividend Period consists of 7 Rate Period Days and 360 for all other
Dividend Periods, and applying the rate obtained against $25,000.

                (f)  CURING A FAILURE TO DEPOSIT. A Failure to Deposit shall
have been cured (if such Failure to Deposit is not solely due to the willful
failure of the Fund to make the required payment to the Auction Agent) with
respect to any Rate Period of shares of a series of Preferred Shares if, within
the respective time periods described in subparagraph (e)(i) of this Section 2,
the

                                      -28-

<PAGE>


Fund shall have paid to the Auction Agent (A) all accumulated and unpaid
dividends on shares of such series and (B) without duplication, the Redemption
Price for shares, if any, of such series for which Notice of Redemption has been
mailed by the Fund pursuant to paragraph (c) of Section 11 of Part I of these
Articles Supplementary; provided, however, that the foregoing clause (B) shall
not apply to the Fund's failure to pay the Redemption Price in respect of shares
of Preferred Shares when the related Redemption Notice provides that redemption
of such shares is subject to one or more conditions precedent and any such
condition precedent shall not have been satisfied at the time or times and in
the manner specified in such Notice of Redemption.

                (g) DIVIDEND PAYMENTS BY FUND TO AUCTION AGENT. The Fund shall
pay to the Auction Agent, not later than 5:00 p.m., New York City time, on the
Business Day next preceding each Dividend Payment Date for shares of a series of
Preferred Shares, an aggregate amount of funds available on the next Business
Day in The City of New York, New York, equal to the dividends to be paid to all
Holders of shares of such series on such Dividend Payment Date.

                (h) AUCTION AGENT AS TRUSTEE OF DIVIDEND PAYMENTS BY FUND. All
moneys paid to the Auction Agent for the payment of dividends (or for the
payment of any Late Charge) shall be held in trust for the payment of such
dividends (and any such Late Charge) by the Auction Agent for the benefit of the
Holders specified in paragraph (i) of this Section 2. Any moneys paid to the
Auction Agent in accordance with the foregoing but not applied by the Auction
Agent to the payment of dividends (and any such Late Charge) will, to the extent
permitted by law, be repaid to the Fund at the end of 90 days from the date on
which such moneys were so to have been applied.

                (i) DIVIDENDS PAID TO HOLDERS. Each dividend on shares of a
series of Preferred Shares shall be paid on the Dividend Payment Date therefor
to the Holders thereof as their names appear on the record books of the Fund on
the Business Day next preceding such Dividend Payment Date.

               (j)  DIVIDENDS CREDITED AGAINST EARLIEST ACCUMULATED BUT UNPAID
DIVIDENDS. Any dividend payment made on shares of a series of Preferred Shares
shall first be credited against the earliest accumulated but unpaid dividends
due with respect to such shares. Dividends in arrears for any past Dividend
Period may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to the Holders as their names appear on the record books
of the Fund on such date, not exceeding 15 days preceding the payment date
thereof, as may be fixed by the Board of Directors.

                (k) DIVIDENDS DESIGNATED AS EXEMPT-INTEREST DIVIDENDS.
Dividends on shares of Preferred Shares shall be designated as exempt-interest
dividends up to the amount of tax-exempt income of the Fund, to the extent
permitted by, and for purposes of, Section 852 of the Code.

                3.  GROSS-UP PAYMENTS.  Holders of shares of Preferred Shares
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available therefor, dividends in an amount equal
to the aggregate Gross-up Payments as follows:

                                      -29-

<PAGE>

                (a)  MINIMUM RATE PERIODS AND SPECIAL RATE PERIODS OF 28 RATE
PERIOD DAYS OR FEWER. If, in the case of any Minimum Rate Period or any Special
Rate Period of 28 Rate Period Days or fewer, the Fund allocates any net capital
gains or other income taxable for Federal income tax purposes to a dividend paid
on shares of Preferred Shares without having given advance notice thereof to the
Auction Agent as provided in Section 5 of Part II of these Articles
Supplementary (such allocation being referred to herein as a "Taxable
Allocation") solely by reason of the fact that such allocation is made
retroactively as a result of the redemption of all or a portion of the
outstanding shares of Preferred Shares or the liquidation of the Fund, the Fund
shall, prior to the end of the calendar year in which such dividend was paid,
provide notice thereof to the Auction Agent and direct the Fund's dividend
disbursing agent to send such notice with a Gross-up Payment to each Holder of
such shares that was entitled to such dividend payment during such calendar year
at such Holder's address as the same appears or last appeared on the record
books of the Fund.

                (b)  SPECIAL RATE PERIODS OF MORE THAN 28 RATE PERIOD DAYS. If,
in the case of any Special Rate Period of more than 28 Rate Period Days, the
Fund makes a Taxable Allocation to a dividend paid on shares of Preferred
Shares, the Fund shall, prior to the end of the calendar year in which such
dividend was paid, provide notice thereof to the Auction Agent and direct the
Fund's dividend disbursing agent to send such notice with a Gross-up Payment to
each Holder of shares that was entitled to such dividend payment during such
calendar year at such Holder's address as the same appears or last appeared on
the record books of the Fund.

                (c)  NO GROSS-UP PAYMENTS IN THE EVENT OF A REALLOCATION. The
Fund shall not be required to make Gross-up Payments with respect to any net
capital gains or other taxable income determined by the Internal Revenue Service
to be allocable in a manner different from that allocated by the Fund.

                4.   DESIGNATION OF SPECIAL RATE PERIODS.

                (a)  LENGTH OF AND PRECONDITIONS FOR SPECIAL RATE PERIOD. The
Fund, at its option, may designate any succeeding Subsequent Rate Period of
shares of a series of Preferred Shares as a Special Rate Period consisting of a
specified number of Rate Period Days evenly divisible by seven and not more than
1,820, subject to adjustment as provided in paragraph (b) of this Section 4. A
designation of a Special Rate Period shall be effective only if (A) notice
thereof shall have been given in accordance with paragraph (c) and subparagraph
(d)(i) of this Section 4, (B) an Auction for shares of such series shall have
been held on the Auction Date immediately preceding the first day of such
proposed Special Rate Period and Sufficient Clearing Bids shall have existed in
such Auction, and (C) if any Notice of Redemption shall have been mailed by the
Fund pursuant to paragraph (c) of Section 11 of this Part I with respect to any
shares of such series, the Redemption Price with respect to such shares shall
have been deposited with the Auction Agent. In the event the Fund wishes to
designate any succeeding Subsequent Rate Period for shares of a series of
Preferred Shares as a Special Rate Period consisting of more than 28 Rate Period
Days, the Fund shall notify Fitch (if Fitch is then rating such series) and
Moody's (if Moody's is then rating such series) in advance of the commencement
of such Subsequent Rate Period that the Fund wishes to designate such Subsequent
Rate Period as a Special Rate Period and shall provide Fitch (if Fitch is then
rating

                                      -30-

<PAGE>

such series) and Moody's (if Moody's is then rating such series) with such
documents as either may request.

                (b)   ADJUSTMENT OF LENGTH OF SPECIAL RATE PERIOD. In the event
the Fund wishes to designate a Subsequent Rate Period for any series of
Preferred Shares as a Special Rate Period for such shares, but the day following
what would otherwise be the last day of such Special Rate Period is not for
Series M, a Tuesday that is a Business Day; for Series T, a Wednesday that is a
Business Day; for Series W, a Thursday that is a Business Day; for Series Th, a
Friday that is a Business Day; and for Series F, a Monday that is a Business
Day, then the Fund shall designate such Subsequent Rate Period as a Special Rate
Period consisting of the period commencing on the first day following the end of
the immediately preceding Rate Period and ending for Series M, on the first
Monday that is followed by a Tuesday that is a Business Day preceding what would
otherwise be such last day; for Series T, on the first Tuesday that is followed
by a Wednesday that is a Business Day preceding what would otherwise be such
last day; for Series W, on the first Wednesday that is followed by a Thursday
that is a Business Day preceding what would otherwise be such last day; for
Series Th, on the first Thursday that is followed by a Friday that is a Business
Day preceding what would otherwise be such last day; and for Series F, on the
first Friday that is followed by a Monday that is a Business Day preceding what
would otherwise be such last day.

                (c)   NOTICE OF PROPOSED SPECIAL RATE PERIOD. If the Fund
proposes to designate any succeeding Subsequent Rate Period of shares of a
series of Preferred Shares as a Special Rate Period pursuant to paragraph (a) of
this Section 4, not less than 20 (or such lesser number of days as may be agreed
to from time to time by the Auction Agent) nor more than 30 days prior to the
date the Fund proposes to designate as the first day of such Special Rate Period
(which shall be such day that would otherwise be the first day of a Minimum Rate
Period), notice shall be (i) published or caused to be published by the Fund in
a newspaper of general circulation to the financial community in The City of New
York, New York, which carries financial news, and (ii) mailed by the Fund by
first-class mail, postage prepaid, to the Holders of shares of such series. Each
such notice shall state (A) that the Fund may exercise its option to designate a
succeeding Subsequent Rate Period of shares of such series as a Special Rate
Period, specifying the first day thereof and (B) that the Fund will, by 11:00
A.M., New York City time, on the second Business Day next preceding such date
(or by such later time or date, or both, as may be agreed to by the Auction
Agent) notify the Auction Agent of either (x) its determination, subject to
certain conditions, to exercise such option, in which case the Fund shall
specify the Special Rate Period designated, or (y) its determination not to
exercise such option.

                (d)   NOTICE OF SPECIAL RATE PERIOD. No later than 11:00 A.M.,
New York City time, on the second Business Day next preceding the first day of
any proposed Special Rate Period of shares of a series of Preferred Shares as to
which notice has been given as set forth in paragraph (c) of this Section 4 (or
such later time or date, or both, as may be agreed to by the Auction Agent), the
Fund shall deliver to the Auction Agent either:

                (i)   a notice ("Notice of Special Rate Period") stating (A)
that the Fund has determined to designate the next succeeding Rate Period of
shares of such series as a Special Rate Period, specifying the same and the
first day thereof, (B) the Auction Date immediately prior to the first day of
such Special Rate Period, (C) that such Special Rate Period shall not commence
if (1) an Auction for shares of such series shall not be held on such Auction
Date for any reason or (2) an Auction for shares of such series shall be held on
such Auction Date but Sufficient Clearing Bids for shares of such series shall
not exist in such Auction, (D) the scheduled Dividend Payment Dates for shares
of such series during such Special Rate Period and (E) the Special Redemption
Provisions, if any, applicable to shares of such series in respect of such
Special Rate Period, such notice to be accompanied by a Preferred Shares Basic
Maintenance Report showing that, as of the third Business Day next preceding
such proposed Special Rate Period, Moody's Eligible Assets (if Moody's is then
rating such series) and Fitch

                                      -31-

<PAGE>

Eligible Assets (if Fitch is then rating such series) each have an aggregate
Discounted Value at least equal to the Preferred Shares Basic Maintenance Amount
as of such Business Day (assuming for purposes of the foregoing calculation that
(a) the Maximum Rate is the Maximum Rate on such Business Day as if such
Business Day were the Auction Date for the proposed Special Rate Period, and (b)
the Moody's Discount Factors applicable to Moody's Eligible Assets and the Fitch
Discount Factors applicable to Fitch Eligible Assets are determined by reference
to the first Exposure Period longer than the Exposure Period then applicable to
the Fund, as described in the definitions of Moody's Discount Factor and Fitch
Discount Factor herein); or

                (ii) a notice stating that the Fund has determined not to
exercise its option to designate a Special Rate Period of shares of such series
and that the next succeeding Rate Period of shares of such series shall be a
Minimum Rate Period.

                (e)  FAILURE TO DELIVER NOTICE OF SPECIAL RATE PERIOD.
If the Fund fails to deliver either of the notices described in subparagraphs
(d)(i) or (d)(ii) of this Section 4 (and, in the case of the notice described in
subparagraph (d)(i) of this Section 4, a Preferred Shares Basic Maintenance
Report to the effect set forth in such subparagraph (if either Moody's or Fitch
is then rating the series in question)) with respect to any designation of any
proposed Special Rate Period to the Auction Agent by 11:00 A.M., New York City
time, on the second Business Day next preceding the first day of such proposed
Special Rate Period (or by such later time or date, or both, as may be agreed to
by the Auction Agent), the Fund shall be deemed to have delivered a notice to
the Auction Agent with respect to such Special Rate Period to the effect set
forth in subparagraph (d)(ii) of this Section 4. In the event the Fund delivers
to the Auction Agent a notice described in subparagraph (d)(i) of this Section
4, it shall file a copy of such notice with the Secretary of the Fund, and the
contents of such notice shall be binding on the Fund. In the event the Fund
delivers to the Auction Agent a notice described in subparagraph (d)(ii) of this
Section 4, the Fund will provide Moody's (if Moody's is then rating the series
in question) and Fitch (if Fitch is then rating the series in question) a copy
of such notice.

                5.   VOTING RIGHTS.

                (a)  ONE VOTE PER SHARE OF PREFERRED SHARES. Except as
otherwise provided in the Charter or as otherwise required by law, (i) each
Holder of shares of Preferred Shares shall be entitled to one vote for each
share of Preferred Shares held by such Holder on each matter submitted to a vote
of shareholders of the Fund, and (ii) the holders of outstanding shares of
preferred stock, including each share of Preferred Shares, and of Common Shares
shall vote together as a single class; provided, however, that, at any meeting
of the shareholders of the Fund held for the election of Directors, the holders
of outstanding shares of preferred stock, including Preferred Shares,
represented in person or by proxy at said meeting, shall be entitled, as a
class, to the exclusion of the holders of all other securities and classes of
shares of stock of the Fund, to elect two Directors of the Fund, each share of
preferred stock, including each share of Preferred Shares, entitling the holder
thereof to one vote. Subject to paragraph (b) of this Section 5, the holders of
outstanding Common Shares and shares of preferred stock, including Preferred
Shares, voting together as a single class, shall elect the balance of the
Directors.

                                      -32-


<PAGE>

                (b)  VOTING FOR ADDITIONAL DIRECTORS.

                (i)  VOTING PERIOD. During any period in which any one or more
of the conditions described in subparagraphs (A) or (B) of this subparagraph
(b)(i) shall exist (such period being referred to herein as a "Voting Period"),
the number of Directors constituting the Board of Directors shall be
automatically increased by the smallest number that, when added to the two
Directors elected exclusively by the holders of preferred stock, including
Preferred Shares, would constitute a majority of the Board of Directors as so
increased by such smallest number; and the holders of shares of preferred stock,
including Preferred Shares, shall be entitled, voting as a class on a
one-vote-per-share basis (to the exclusion of the holders of all other
securities and classes of shares of stock of the Fund), to elect such smallest
number of additional Directors, together with the two Directors that such
holders are in any event entitled to elect. A Voting Period shall commence:

                (A)  if at the close of business on any dividend payment date
accumulated dividends (whether or not earned or declared) on any outstanding
shares of preferred stock, including Preferred Shares, equal to at least two
full years' dividends shall be due and unpaid and sufficient cash or specified
securities shall not have been deposited with the Auction Agent for the payment
of such accumulated dividends; or

                (B)  if at any time holders of Preferred Shares are entitled
under the 1940 Act to elect a majority of the Directors of the Fund.

                 Upon the termination of a Voting Period, the voting rights
described in this subparagraph (b)(i) shall cease, subject always, however, to
the revesting of such voting rights in the Holders upon the further occurrence
of any of the events described in this subparagraph (b)(i).

                (ii)  NOTICE OF SPECIAL MEETING. As soon as practicable after
the accrual of any right of the holders of preferred stock, including Preferred
Shares, to elect additional Directors as described in subparagraph (b)(i) of
this Section 5, the Fund shall notify the Auction Agent and the Auction Agent
shall call a special meeting of such holders, by mailing a notice of such
special meeting to such holders, such meeting to be held not less than 10 nor
more than 20 days after the date of mailing of such notice. If the Fund fails to
send such notice to the Auction Agent or if the Auction Agent does not call such
a special meeting, it may be called by any such holder on like notice. The
record date for determining the holders entitled to notice of and to vote at
such special meeting shall be the close of business on the fifth Business Day
preceding the day on which such notice is mailed. At any such special meeting
and at each meeting of holders of preferred stock, including Preferred Shares,
held during a Voting Period at which Directors are to be elected, such holders,
voting together as a class (to the exclusion of the holders of all other
securities and classes of shares of stock of the Fund), shall be entitled to
elect the number of Directors prescribed in subparagraph (b)(i) of this Section
5 on a one-vote-per-share basis.

                (iii) TERMS OF OFFICE OF EXISTING DIRECTORS. The terms of
office of all persons who are Directors of the Fund at the time of a special
meeting of Holders and holders of other shares of preferred stock of the Fund to
elect Directors shall continue,

                                      -33-

<PAGE>

notwithstanding the election at such meeting by the Holders and such other
holders of the number of Directors that they are entitled to elect, and the
persons so elected by the Holders and such other holders, together with the two
incumbent Directors elected by the Holders and such other holders of shares of
preferred stock of the Fund and the remaining incumbent Directors elected by the
holders of the Common Shares and preferred stock, including Preferred Shares,
shall constitute the duly elected Directors of the Fund.

                (iv)  TERMS OF OFFICE OF CERTAIN DIRECTORS TO TERMINATE UPON
TERMINATION OF VOTING PERIOD. Simultaneously with the termination of a Voting
Period, the terms of office of the additional Directors elected by the Holders
and holders of other shares of preferred stock of the Fund pursuant to
subparagraph (b)(i) of this Section 5 shall terminate, the remaining Directors
shall constitute the Directors of the Fund and the voting rights of the Holders
and such other holders to elect additional Directors pursuant to subparagraph
(b)(i) of this Section 5 shall cease, subject to the provisions of the last
sentence of subparagraph (b)(i) of this Section 5.

                (v)   Solely for purposes of the provisions of Section 5(b)(i)
of this Part I, and subject to the terms thereof in accordance with the 1940 Act
and Section 3-803(f) of the Maryland General Corporation Law (the "MGCL"), by
resolution of its Board of Directors on March 14, 2002, the Fund elected to be
subject to Section 3-804(b) of the MGCL, which vests in the Board of Directors
the power to fix the number of Directors of the Fund, to be effective upon the
occurrence of the conditions giving rise to a Voting Period, notwithstanding any
contrary provisions in the Fund's Charter or Bylaws. Except as set forth above
and in Articles Supplementary filed with the Maryland State Department of
Assessments and Taxation on May 24, 2001, the Fund has not elected to be subject
to the provisions of Title 3, Subtitle 8 of the MGCL.

                (c)   HOLDERS OF PREFERRED SHARES TO VOTE ON CERTAIN OTHER
MATTERS.
                (i)   INCREASES IN CAPITALIZATION; BANKRUPTCY. So long as any
shares of Preferred Shares are outstanding, the Fund shall not, without the
affirmative vote or consent of the Holders of at least a majority of the shares
of Preferred Shares outstanding at the time, in person or by proxy, either in
writing or at a meeting, voting as a separate class: (a) authorize, create or
issue any class or series of shares ranking prior to or on a parity with shares
of Preferred Shares with respect to the payment of dividends or the distribution
of assets upon dissolution, liquidation or winding up of the affairs of the
Fund, or authorize, create or issue additional shares of any series of Preferred
Shares (except that, notwithstanding the foregoing, but subject to the
provisions of paragraph (c) of Section 13 of this Part I, the Board of
Directors, without the vote or consent of the Holders of Preferred Shares, may
from time to time authorize and create, and the Fund may from time to time issue
additional shares of, any series of Preferred Shares, or classes or series of
preferred shares ranking on a parity with shares of Preferred Shares with
respect to the payment of dividends and the distribution of assets upon
dissolution, liquidation or winding up of the affairs of the Fund if the Fund
receives written confirmation from Moody's (if Moody's is then rating the
Preferred Shares) and Fitch (if Fitch is then rating the Preferred Shares) that
such authorization, creation and issuance would not impair the rating then
assigned by such rating agency to the Preferred Shares; provided, however, that
if Moody's

                                      -34-


<PAGE>

or Fitch is not then rating the shares of Preferred Shares, the aggregate
liquidation preference of all Preferred Shares of the Fund outstanding after any
such issuance, exclusive of accumulated and unpaid dividends, may not exceed
$250,000,000) or (b) amend, alter or repeal the provisions of the Charter, or
these Articles Supplementary, whether by merger, consolidation or otherwise, so
as to affect any preference, right or power of such shares of Preferred Shares
or the Holders thereof; provided, however, that (i) none of the actions
permitted by the exception to (a) above will be deemed to affect such
preferences, rights or powers, (ii) a division or split of a share of Preferred
Shares will be deemed to affect such preferences, rights or powers only if the
terms of such division adversely affect the Holders of shares of Preferred
Shares and (iii) the authorization, creation and issuance of classes or series
of shares ranking junior to shares of Preferred Shares with respect to the
payment of dividends and the distribution of assets upon dissolution,
liquidation or winding up of the affairs of the Fund, will be deemed to affect
such preferences, rights or powers only if Moody's or Fitch is then rating
shares of Preferred Shares and such issuance would, at the time thereof, cause
the Fund not to satisfy the 1940 Act Preferred Shares Asset Coverage or the
Preferred Shares Basic Maintenance Amount. So long as any shares of Preferred
Shares are outstanding, the Fund shall not, without the affirmative vote or
consent of the Holders of at least a majority of the shares of Preferred Shares
outstanding at the time, in person or by proxy, either in writing or at a
meeting, voting as a separate class, file a voluntary application for relief
under Federal bankruptcy law or any similar application under state law for so
long as the Fund is solvent and does not foresee becoming insolvent.

                (ii) 1940 ACT MATTERS. Unless a higher percentage is provided
for in the Charter, (A) the affirmative vote of the Holders of a "majority of
the outstanding" (as such term is defined in the 1940 Act) preferred stock of
the Fund, including Preferred Shares, voting as a separate class, shall be
required to approve (A) any plan of reorganization (as such term is used in the
1940 Act) adversely affecting such shares and (B) any action requiring a vote of
security holders of the Fund under Section 13(a) of the 1940 Act. In the event a
vote of Holders of Preferred Shares is required pursuant to the provisions of
Section 13(a) of the 1940 Act, the Fund shall, not later than ten Business Days
prior to the date on which such vote is to be taken, notify Moody's (if Moody's
is then rating the Preferred Shares) and Fitch (if Fitch is then rating the
Preferred Shares) that such vote is to be taken and the nature of the action
with respect to which such vote is to be taken. The Fund shall, not later than
ten Business Days after the date on which such vote is taken, notify Moody's (if
Moody's is then rating the Preferred Shares) and Fitch (if Fitch is then rating
the Preferred Shares) of the results of such vote.

                (d)  BOARD MAY TAKE CERTAIN ACTIONS WITHOUT SHAREHOLDER
APPROVAL. The Board of Directors may, without the vote or consent of the Holders
of the Preferred Shares, or any other stockholder of the Fund, from time to time
amend, alter or repeal any or all of the definitions of the terms listed below,
or any provision of the Articles Supplementary viewed by Moody's or Fitch as a
predicate for any such definition, and any such amendment, alteration or repeal
will not be deemed to affect the preferences, rights or powers of the Preferred
Shares or the Holders thereof, provided the Board of Directors receives written
confirmation from Moody's (if Moody's is then rating the Preferred Shares) and
Fitch (if Fitch is then rating the Preferred Shares), that any such amendment,
alteration or repeal would not impair the ratings then assigned to the Preferred
Shares by Moody's (if Moody's is then rating the Preferred Shares) or Fitch (if
Fitch is then rating the Preferred Shares):

                                      -35-

<PAGE>
<TABLE>
<CAPTION>

<S>                                                     <C>
Annual Valuation Date                                    Market Value
Accountant's Confirmation                                Maximum Potential Additional Dividend Liability
Annual Valuation Date                                    Moody's Discount Factor
Closing Transaction                                      Moody's Eligible Assets
Deposit Securities                                       Moody's Hedging Transactions
Discounted Value                                         Moody's Volatility Factor
Exposure Period                                          Municipal Bonds
Fitch Discount Factor                                    Municipal Index
Fitch Eligible Assets                                    Quarterly Valuation Date
Fitch Hedging Transactions                               Receivables for Municipal Obligations Sold
Fitch Volatility Factor                                  Preferred Shares Basic Maintenance Amount
Forward Commitments                                      Preferred Shares Basic Maintenance Cure Date
Hedging Transactions                                     Preferred Shares Basic Maintenance Report
Independent Accountant                                   Treasury Futures
1940 Act Preferred Shares Asset Coverage                 Valuation Date
1940 Act Cure Date
</TABLE>



                (e)  RELATIVE RIGHTS AND PREFERENCES. Unless otherwise required
by law or provided elsewhere in the Charter, the Holders of shares of Preferred
Shares shall not have any relative rights or preferences or other special rights
other than those specifically set forth herein.

                (f)  NO PREEMPTIVE RIGHTS OR CUMULATIVE VOTING.  The Holders
of shares of Preferred Shares shall have no preemptive rights or rights to
cumulative voting.

                (g)  VOTING FOR DIRECTORS SOLE REMEDY FOR FUND'S FAILURE TO PAY
DIVIDENDS. In the event that the Fund fails to pay any dividends on the shares
of Preferred Shares, the exclusive remedy of the Holders shall be the right to
vote for Directors pursuant to the provisions of this Section 5.

                (h)  HOLDERS ENTITLED TO VOTE. For purposes of determining any
rights of the Holders to vote on any matter, whether such right is created by
these Articles Supplementary, by the other provisions of the Charter, by statute
or otherwise, no Holder shall be entitled to vote any share of Preferred Shares
and no share of Preferred Shares 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, the requisite Notice of Redemption with respect to such shares shall
have been mailed as provided in paragraph (c) of Section 11 of this Part I and
the Redemption Price for the redemption of such shares shall have been deposited
in trust with the Auction Agent for that purpose. No share of Preferred Shares
held by the Fund or any affiliate of the Fund (except for shares held by a
Broker-Dealer that is an affiliate of the Fund for the account of its customers)
shall have any voting rights or be deemed to be outstanding for voting or other
purposes.

                6.   1940 ACT PREFERRED SHARES ASSET COVERAGE.  The Fund shall
maintain, as of the last Business Day of each month in which any share of
Preferred Shares is outstanding, the 1940 Act Preferred Shares Asset Coverage.


                                      -36-

<PAGE>

               7.    PREFERRED SHARES BASIC MAINTENANCE AMOUNT.

                     (a) So long as shares of Preferred Shares are outstanding,
the Fund shall maintain, on each Valuation Date, and shall verify to its
satisfaction that it is maintaining on such Valuation Date, (i) Fitch Eligible
Assets having an aggregate Discounted Value equal to or greater than the
Preferred Shares Basic Maintenance Amount (if Fitch is then rating the shares of
Preferred Shares) and (ii) Moody's Eligible Assets having an aggregate
Discounted Value equal to or greater than the Preferred Shares Basic Maintenance
Amount (if Moody's is then rating the shares of Preferred Shares).

                     (b) On or before 5:00 P.M., New York City time, on the
seventh Business Day after a Valuation Date on which the Fund fails to satisfy
the Preferred Shares Basic Maintenance Amount, and on the seventh Business Day
after the Preferred Shares Basic Maintenance Cure Date with respect to such
Valuation Date, the Fund shall complete and deliver to Fitch (if Fitch is then
rating the shares of Preferred Shares), Moody's (if Moody's is then rating the
shares of Preferred Shares) and the Auction Agent (if either Fitch or Moody's is
then rating the shares of Preferred Shares) a Preferred Shares Basic Maintenance
Report as of the date of such failure or such Preferred Shares Basic Maintenance
Cure Date, as the case may be, which will be deemed to have been delivered to
the Auction Agent if the Auction Agent receives a copy or telecopy, telex or
other electronic transcription thereof and on the same day the Fund mails to the
Auction Agent for delivery on the next Business Day the full Preferred Shares
Basic Maintenance Report. The Fund shall also deliver a Preferred Shares Basic
Maintenance Report to (i) the Auction Agent (if either Moody's or Fitch is then
rating the shares of Preferred Shares) as of the last Business Day of each
month, and (ii) Moody's (if Moody's is then rating the shares of Preferred
Shares) and Fitch (if Fitch is then rating the shares of Preferred Shares), in
each case on or before the seventh Business Day after such day. A failure by the
Fund to deliver a Preferred Shares Basic Maintenance Report pursuant to the
preceding sentence shall be deemed to be delivery of a Preferred Shares Basic
Maintenance Report indicating the Discounted Value for all assets of the Fund is
less than the Preferred Shares Basic Maintenance Amount, as of the relevant
Valuation Date.


                     (c) Within ten Business Days after the date of delivery of
a Preferred Shares Basic Maintenance Report in accordance with paragraph (b) of
this Section 7 relating to a Quarterly Valuation Date that is also an Annual
Valuation Date, the Fund shall cause the Independent Accountant to confirm in
writing to Fitch (if Fitch is then rating the shares of Preferred Shares),
Moody's (if Moody's is then rating the shares of Preferred Shares) and the
Auction Agent (if either Fitch or Moody's is then rating the shares of Preferred
Shares) (i) the mathematical accuracy of the calculations reflected in such
Report (and in any other Preferred Shares Basic Maintenance Report, randomly
selected by the Independent Accountant, that was delivered by the Fund during
the quarter ending on such Annual Valuation Date), (ii) that, in such Report
(and in such randomly selected Report), the Fund determined in accordance with
these Articles Supplementary whether the Fund had, at such Annual Valuation Date
(and at the Valuation Date addressed in such randomly-selected Report), Fitch
Eligible Assets (if Fitch is then rating the shares of Preferred Shares) of an
aggregate Discounted Value at least equal to the Preferred Shares Basic
Maintenance Amount and Moody's Eligible Assets (if Moody's is then rating the
shares of Preferred Shares) of an aggregate Discounted Value at least equal to
the Preferred Shares Basic Maintenance Amount, (iii) that, in such Report (and
in such randomly

                                      -37-

<PAGE>

selected Report), the Fund determined whether the Fund had, at such Annual
Valuation Date (and at the Valuation Date addressed in such randomly selected
Report) in accordance with these Articles Supplementary, with respect to the
Fitch ratings on Municipal Obligations, the issuer name, issue size and coupon
rate listed in such Report, verified by the Independent Accountant by reference
to Bloomberg Financial Services or another independent source approved in
writing by Moody's (if Moody's is then rating the Preferred Shares) and Fitch
(if Fitch is then rating the Preferred Shares) and the Independent Accountant
shall provide a listing in its letter of any differences, (iv) with respect to
the Moody's ratings on Municipal Obligations, the issuer name, issue size and
coupon rate listed in such Report, that such information has been verified by
the Independent Accountant by reference to Bloomberg Financial Services or
another independent source approved in writing by Moody's (if Moody's is then
rating the Preferred Shares) and Fitch (if Fitch is then rating the Preferred
Shares) and the Independent Accountant shall provide a listing in its letter of
any differences, (v) with respect to the bid or mean price (or such alternative
permissible factor used in calculating the Market Value) provided by the
custodian of the Fund's assets to the Fund for purposes of valuing securities in
the Fund's portfolio, that the Independent Accountant has traced the price used
in such Report to the bid or mean price listed in such Report as provided to the
Fund and verified that such information agrees (in the event such information
does not agree, the Independent Accountant will provide a listing in its letter
of such differences) and (vi) with respect to such confirmation to Moody's (if
Moody's is then rating the Preferred Shares) and Fitch (if Fitch is then rating
the Preferred Shares), that the Fund has satisfied the requirements of Section
13 of this Part I of these Articles Supplementary (such confirmation is herein
called the "Accountant's Confirmation").

                     (d)  Within ten Business Days after the date of delivery
of a Preferred Shares Basic Maintenance Report in accordance with paragraph (b)
of this Section 7 relating to any Valuation Date on which the Fund failed to
satisfy the Preferred Shares Basic Maintenance Amount, and relating to the
Preferred Shares Basic Maintenance Cure Date with respect to such failure to
satisfy the Preferred Shares Basic Maintenance Amount, the Fund shall cause the
Independent Accountant to provide to Fitch (if Fitch is then rating the shares
of Preferred Shares), Moody's (if Moody's is then rating the Preferred Shares)
and the Auction Agent (if either Fitch or Moody's is then rating the Preferred
Shares) an Accountant's Confirmation as to such Preferred Shares Basic
Maintenance Report.

                     (e)  If any Accountant's Confirmation delivered pursuant
to paragraph (c) or (d) of this Section 7 shows that an error was made in the
Preferred Shares Basic Maintenance Report for a particular Valuation Date for
which such Accountant's Confirmation was required to be delivered, or shows that
a lower aggregate Discounted Value for the aggregate of all Fitch Eligible
Assets (if Fitch is then rating the Preferred Shares) or Moody's Eligible Assets
(if Moody's is then rating the Preferred Shares), as the case may be, of the
Fund was determined by the Independent Accountant, the calculation or
determination made by such Independent Accountant shall be final and conclusive
and shall be binding on the Fund, and the Fund shall accordingly amend and
deliver the Preferred Shares Basic Maintenance Report to Fitch (if Fitch is then
rating the Preferred Shares), Moody's (if Moody's is then rating the Preferred
Shares) and the Auction Agent (if either Fitch or Moody's is then rating the
Preferred Shares) promptly following receipt by the Fund of such Accountant's
Confirmation.

                                      -38-

<PAGE>


                     (f)  On or before 5:00 p.m., New York City time, on the
first Business Day after the Date of Original Issue of any shares of Preferred
Shares, the Fund shall complete and deliver to Fitch (if Fitch is then rating
the Preferred Shares) and Moody's (if Moody's is then rating the Preferred
Shares) a Preferred Shares Basic Maintenance Report as of the close of business
on such Date of Original Issue.

                     (g)  On or before 5:00 p.m., New York City time, on the
seventh Business Day after either (i) the Fund shall have redeemed Common Shares
or (ii) the ratio of the Discounted Value of Fitch Eligible Assets or the
Discounted Value of Moody's Eligible Assets to the Preferred Shares Basic
Maintenance Amount on any Valuation Date is less than or equal to 110% or (iii)
whenever requested by Moody's or Fitch, the Fund shall complete and deliver to
Fitch (if Fitch is then rating the shares of Preferred Shares) or Moody's (if
Moody's is then rating the shares of Preferred Shares), as the case may be, a
Preferred Shares Basic Maintenance Report as of the date of either such event.

                     8.   [RESERVED].

                     9.   RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS.

                     (a)  DIVIDENDS ON SHARESOTHER THAN PREFERRED SHARES.
Except as set forth in the next sentence, no dividends shall be declared or paid
or set apart for payment on the shares of any class or series of shares of stock
of the Fund ranking, as to the payment of dividends, on a parity with shares of
Preferred Shares for any period unless full cumulative dividends have been or
contemporaneously are declared and paid on the shares of each series of
Preferred Shares through its most recent Dividend Payment Date. When dividends
are not paid in full upon the shares of each series of Preferred Shares through
its most recent Dividend Payment Date or upon the shares of any other class or
series of shares of stock of the Fund ranking on a parity as to the payment of
dividends with shares of Preferred Shares through their most recent respective
dividend payment dates, all dividends declared upon shares of Preferred Shares
and any other such class or series of shares of stock ranking on a parity as to
the payment of dividends with shares of Preferred Shares shall be declared pro
rata so that the amount of dividends declared per share on shares of Preferred
Shares and such other class or series of shares of stock shall in all cases bear
to each other the same ratio that accumulated dividends per share on the shares
of Preferred Shares and such other class or series of shares of stock bear to
each other (for purposes of this sentence, the amount of dividends declared per
share of Preferred Shares shall be based on the Applicable Rate for such share
for the Dividend Periods during which dividends were not paid in full).

                     (b)  DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO
COMMON SHARES UNDER THE 1940 ACT. The Board of Directors shall not declare any
dividend (except a dividend payable in Common Shares), or declare any other
distribution, upon the Common Shares, or purchase Common Shares, unless in every
such case the Preferred Shares have, at the time of any such declaration or
purchase, an asset coverage (as defined in and determined pursuant to the 1940
Act) of at least 200% (or such other asset coverage as may in the future be
specified in or under the 1940 Act as the minimum asset coverage for senior
securities which are shares or stock of a closed-end investment company as a
condition of

                                      -39-

<PAGE>

declaring dividends on its common shares or stock) after deducting the
amount of such dividend, distribution or purchase price, as the case may be.

                     (c)    OTHER RESTRICTIONS ON DIVIDENDS AND OTHER
DISTRIBUTIONS. For so long as any Preferred Shares are outstanding, and except
as set forth in paragraph (a) of this Section 9 and paragraph (c) of Section 12
of this Part I, (A) the Fund shall not declare, pay or set apart for payment any
dividend or other distribution (other than a dividend or distribution paid in
shares of, or in options, warrants or rights to subscribe for or purchase,
Common Shares or other shares, if any, ranking junior to the shares of Preferred
Shares as to the payment of dividends and the distribution of assets upon
dissolution, liquidation or winding up) in respect of the Common Shares or any
other shares of the Fund ranking junior to or on a parity with the shares of
Preferred Shares as to the payment of dividends or the distribution of assets
upon dissolution, liquidation or winding up, or call for redemption, redeem,
purchase or otherwise acquire for consideration any Common Shares or any other
such junior shares (except by conversion into or exchange for shares of the Fund
ranking junior to the shares of Preferred Shares as to the payment of dividends
and the distribution of assets upon dissolution, liquidation or winding up), or
any such parity shares (except by conversion into or exchange for shares of the
Fund ranking junior to or on a parity with Preferred Shares as to the payment of
dividends and the distribution of assets upon dissolution, liquidation or
winding up), unless (i) full cumulative dividends on shares of each series of
Preferred Shares through its most recently ended Dividend Period shall have been
paid or shall have been declared and sufficient funds for the payment thereof
deposited with the Auction Agent and (ii) the Fund has redeemed the full number
of shares of Preferred Shares required to be redeemed by any provision for
mandatory redemption pertaining thereto, and (B) the Fund shall not declare, pay
or set apart for payment any dividend or other distribution (other than a
dividend or distribution paid in shares of, or in options, warrants or rights to
subscribe for or purchase, Common Shares or other shares, if any, ranking junior
to shares of Preferred Shares as to the payment of dividends and the
distribution of assets upon dissolution, liquidation or winding up) in respect
of Common Shares or any other shares of the Fund ranking junior to shares of
Preferred Shares as to the payment of dividends or the distribution of assets
upon dissolution, liquidation or winding up, or call for redemption, redeem,
purchase or otherwise acquire for consideration any Common Shares or any other
such junior shares (except by conversion into or exchange for shares of the Fund
ranking junior to shares of Preferred Shares as to the payment of dividends and
the distribution of assets upon dissolution, liquidation or winding up), unless
immediately after such transaction the Discounted Value of Moody's Eligible
Assets (if Moody's is then rating the shares of Preferred Shares) and Fitch
Eligible Assets (if Fitch is then rating the shares of Preferred Shares) would
each at least equal the Preferred Shares Basic Maintenance Amount.

                     10.    [RESERVED]

                     11.    REDEMPTION.

                     (a)    OPTIONAL REDEMPTION.

                     (i)    Subject to the provisions of subparagraph (v) of
this paragraph (a), shares of Preferred Shares of any series may be redeemed, at
the option of the Fund, as a whole or from time to time in part, on the second
Business Day preceding any Dividend Payment Date for


                                      -40-

<PAGE>

shares of such series, out of funds legally available therefor, at a redemption
price per share equal to the sum of $25,000 plus an amount equal to accumulated
but unpaid dividends thereon (whether or not earned or declared) to (but not
including) the date fixed for redemption; provided, however, that (1) shares of
a series of Preferred Shares may not be redeemed in part if after such partial
redemption fewer than 250 shares of such series remain outstanding; (2) shares
of a series of Preferred Shares are redeemable by the Fund during the Initial
Rate Period only on the second Business Day next preceding the last Dividend
Payment Date for such Initial Rate Period; and (3) subject to subparagraph (ii)
of this paragraph (a), the Notice of Special Rate Period relating to a Special
Rate Period of shares of a series of Preferred Shares, as delivered to the
Auction Agent and filed with the Secretary of the Fund, may provide that shares
of such series shall not be redeemable during the whole or any part of such
Special Rate Period (except as provided in subparagraph (iv) of this paragraph
(a)) or shall be redeemable during the whole or any part of such Special Rate
Period only upon payment of such redemption premium or premiums as shall be
specified therein ("Special Redemption Provisions").

                (ii)   A Notice of Special Rate Period relating to shares of a
series of Preferred Shares for a Special Rate Period thereof may contain Special
Redemption Provisions only if the Fund's Board of Directors, after consultation
with the Broker-Dealer or Broker-Dealers for such Special Rate Period of shares
of such series, determines that such Special Redemption Provisions are in the
best interest of the Fund.

                (iii)  If fewer than all of the outstanding shares of a series
of Preferred Shares are to be redeemed pursuant to subparagraph (i) of this
paragraph (a), the number of shares of such series to be redeemed shall be
determined by the Board of Directors, and such shares shall be redeemed pro rata
from the Holders of shares of such series in proportion to the number of shares
of such series held by such Holders.

                (iv)   Subject to the provisions of subparagraph (v) of this
paragraph (a), shares of any series of Preferred Shares may be redeemed, at the
option of the Fund, as a whole but not in part, out of funds legally available
therefor, on the first day following any Dividend Period thereof included in a
Rate Period consisting of more than 364 Rate Period Days if, on the date of
determination of the Applicable Rate for shares of such series for such Rate
Period, such Applicable Rate equaled or exceeded on such date of determination
the Treasury Note Rate for such Rate Period, at a redemption price per share
equal to the sum of $25,000 plus an amount equal to accumulated but unpaid
dividends thereon (whether or not earned or declared) to (but not including) the
date fixed for redemption.

                (v)    The Fund may not on any date mail a Notice of Redemption
pursuant to paragraph (c) of this Section 11 in respect of a redemption
contemplated to be effected pursuant to this paragraph (a) unless on such date
(a) the Fund has available Deposit Securities with maturity or tender dates not
later than the day preceding the applicable redemption date and having a value
not less than the amount (including any applicable premium) due to Holders of
shares of Preferred Shares by reason of the redemption of such shares on such
redemption date and (b) the Discounted Value of Moody's Eligible Assets (if
Moody's is then rating the shares of Preferred Shares) and the Discounted Value
of Fitch Eligible Assets (if Fitch is then rating the shares of Preferred
Shares) each at least equal the Preferred Shares Basic Maintenance Amount, and
would at least equal the Preferred Shares Basic Maintenance Amount immediately


                                      -41-

<PAGE>

subsequent to such redemption if such redemption were to occur on such date. The
Fund shall not be required to have available Deposit Securities as described in
clause (a) of this subparagraph (v) in respect of a redemption of any shares of
Preferred Shares, as a whole or in part, contemplated to be effected pursuant to
paragraph 11(a) where such redemption is subject to the issuance of shares of
any other series of preferred stock of the Fund. For purposes of determining in
clause (b) of the preceding sentence whether the Discounted Value of Moody's
Eligible Assets and Fitch Eligible Assets at least equals the Preferred Shares
Basic Maintenance Amount, the Moody's Discount Factors applicable to Moody's
Eligible Assets and the Fitch Discount Factor applicable to Fitch Discount
Assets shall be determined by reference to the first Exposure Period longer than
the Exposure Period then applicable to the Fund, as described in the definition
of Moody's Discount Factor and Fitch Discount Factor herein.

                (b) MANDATORY REDEMPTION. The Fund shall redeem, at a
redemption price equal to $25,000 per share plus accumulated but unpaid
dividends thereon (whether or not earned or declared) to (but not including) the
date fixed by the Board of Directors for redemption, certain of the shares of
Preferred Shares, if the Fund fails to have either Moody's Eligible Assets with
a Discounted Value or Fitch Eligible Assets with a Discounted Value greater than
or equal to the Preferred Shares Basic Maintenance Amount or fails to maintain
the 1940 Act Preferred Shares Asset Coverage, in accordance with the
requirements of the rating agency or agencies then rating the shares of
Preferred Shares, and such failure is not cured on or before the Preferred
Shares Basic Maintenance Cure Date or the 1940 Act Cure Date, as the case may
be. The number of shares of Preferred Shares to be redeemed shall be equal to
the lesser of (i) the minimum number of shares of Preferred Shares, the
redemption of which, if deemed to have occurred immediately prior to the opening
of business on the Cure Date, would have resulted in the Fund's having both
Moody's Eligible Assets with a Discounted Value and Fitch Eligible Assets with a
Discounted Value greater than or equal to the Preferred Shares Basic Maintenance
Amount or maintaining the 1940 Act Preferred Shares Asset Coverage, as the case
may be, on such Cure Date (provided, however, that if there is no such minimum
number of shares of Preferred Shares the redemption or retirement of which would
have had such result, all shares of Preferred Shares then outstanding shall be
redeemed), and (ii) the maximum number of shares of Preferred Shares that can be
redeemed out of funds expected to be legally available therefor in accordance
with the Charter and applicable law. In determining the shares of Preferred
Shares required to be redeemed in accordance with the foregoing, the Fund shall
allocate the number required to be redeemed to satisfy the Preferred Shares
Basic Maintenance Amount or the 1940 Act Preferred Shares Asset Coverage, as the
case may be, pro rata among shares of Preferred Shares subject to redemption or
retirement. The Fund shall effect such redemption on the date fixed by the Fund
therefor, which date shall not be earlier than 20 days nor later than 40 days
after such Cure Date, except that if the Fund does not have funds legally
available for the redemption of all of the required number of shares of
Preferred Shares which are subject to redemption or retirement or the Fund
otherwise is unable to effect such redemption on or prior to 40 days after such
Cure Date, the Fund shall redeem those shares of Preferred Shares which it was
unable to redeem on the earliest practicable date on which it is able to effect
such redemption. If fewer than all of the outstanding shares of a series of
Preferred Shares are to be redeemed pursuant to this paragraph (b), the number
of shares of such series to be redeemed shall be redeemed pro rata from the
Holders of shares of such series in proportion to the number of shares of such
series held by such Holders.

                                      -42-

<PAGE>

                (c)  NOTICE OF REDEMPTION. If the Fund shall determine or be
required to redeem shares of a series of Preferred Shares pursuant to paragraph
(a) or (b) of this Section 11, it shall mail a Notice of Redemption with respect
to such redemption by first class mail, postage prepaid, to each Holder of the
shares of such series to be redeemed, at such Holder's address as the same
appears on the record books of the Fund on the record date established by the
Board of Directors. Such Notice of Redemption shall be so mailed not less than
20 nor more than 40 days prior to the date fixed for redemption. Each such
Notice of Redemption shall state: (i) the redemption date; (ii) the number of
shares of Preferred Shares to be redeemed and the series thereof; (iii) the
CUSIP number for shares of such series; (iv) the Redemption Price; (v) the place
or places where the certificate(s) for such shares (properly endorsed or
assigned for transfer, if the Board of Directors shall so require and the Notice
of Redemption shall so state) are to be surrendered for payment of the
Redemption Price; (vi) that dividends on the shares to be redeemed will cease to
accumulate on such redemption date; and (vii) the provisions of this Section 11
under which such redemption is made. If fewer than all shares of a series of
Preferred Shares held by any Holder are to be redeemed, the Notice of Redemption
mailed to such Holder shall also specify the number of shares of such series to
be redeemed from such Holder. The Fund may provide in any Notice of Redemption
relating to a redemption contemplated to be effected pursuant to paragraph (a)
of this Section 11 that such redemption is subject to one or more conditions
precedent and that the Fund shall not be required to effect such redemption
unless each such condition shall have been satisfied at the time or times and in
the manner specified in such Notice of Redemption.

                (d)  NO REDEMPTION UNDER CERTAIN CIRCUMSTANCES. Notwithstanding
the provisions of paragraphs (a) or (b) of this Section 11, if any dividends on
shares of Preferred Shares (whether or not earned or declared) are in arrears,
no shares of such series shall be redeemed unless all outstanding shares of such
series are simultaneously redeemed, and the Fund shall not purchase or otherwise
acquire any shares of such series; provided, however, that the foregoing shall
not prevent the purchase or acquisition of all outstanding shares of such shares
pursuant to the successful completion of an otherwise lawful purchase or
exchange offer made on the same terms to, and accepted by, Holders of all
outstanding shares of such series.

                (e)  ABSENCE OF FUNDS AVAILABLE FOR REDEMPTION. To the extent
that any redemption for which Notice of Redemption has been mailed is not made
by reason of the absence of legally available funds therefor in accordance with
the Charter and applicable law, such redemption shall be made as soon as
practicable to the extent such funds become available. Failure to redeem shares
of Preferred Shares shall be deemed to exist at any time after the date
specified for redemption in a Notice of Redemption when the Fund shall have
failed, for any reason whatsoever, to deposit in trust with the Auction Agent
the Redemption Price with respect to any shares for which such Notice of
Redemption has been mailed; provided, however, that the foregoing shall not
apply in the case of the Fund's failure to deposit in trust with the Auction
Agent the Redemption Price with respect to any shares where (1) the Notice of
Redemption relating to such redemption provided that such redemption was subject
to one or more conditions precedent and (2) any such condition precedent shall
not have been satisfied at the time or times and in the manner specified in such
Notice of Redemption. Notwithstanding the fact that the Fund may not have
redeemed shares of Preferred Shares for which a Notice of Redemption has been
mailed, dividends may be declared and paid on shares of Preferred Shares

                                      -43-

<PAGE>

and shall include those shares of Preferred Shares for which a Notice of
Redemption has been mailed.

                (f)   AUCTION AGENT AS DIRECTOR OF REDEMPTION PAYMENTS BY FUND.
All moneys paid to the Auction Agent for payment of the Redemption Price of
shares of Preferred Shares called for redemption shall be held in trust by the
Auction Agent for the benefit of Holders of shares so to be redeemed.

                (g)   SHARES FOR WHICH NOTICE OF REDEMPTION HAS BEEN GIVEN ARE
NO LONGER OUTSTANDING. Provided a Notice of Redemption has been mailed pursuant
to paragraph (c) of this Section 11, upon the deposit with the Auction Agent (on
the Business Day next preceding the date fixed for redemption thereby, in funds
available on the next Business Day in The City of New York, New York) of funds
sufficient to redeem the shares of Preferred Shares that are the subject of such
notice, dividends on such shares shall cease to accumulate and such shares shall
no longer be deemed to be outstanding for any purpose, and all rights of the
Holders of the shares so called for redemption shall cease and terminate, except
the right of such Holders to receive the Redemption Price, but without any
interest or other additional amount, except as provided in subparagraph (e)(i)
of Section 2 of this Part I and in Section 3 of this Part I. Upon surrender in
accordance with the Notice of Redemption of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of Directors
shall so require and the Notice of Redemption shall so state), the Redemption
Price shall be paid by the Auction Agent to the Holders of shares of Preferred
Shares subject to redemption. In the case that fewer than all of the shares
represented by any such certificate are redeemed, a new certificate shall be
issued, representing the unredeemed shares, without cost to the Holder thereof.
The Fund shall be entitled to receive from the Auction Agent, promptly after the
date fixed for redemption, any cash deposited with the Auction Agent in excess
of (i) the aggregate Redemption Price of the shares of Preferred Shares called
for redemption on such date and (ii) all other amounts to which Holders of
shares of Preferred Shares called for redemption may be entitled. Any funds so
deposited that are unclaimed at the end of 90 days from such redemption date
shall, to the extent permitted by law, be repaid to the Fund, after which time
the Holders of shares of Preferred Shares so called for redemption may look only
to the Fund for payment of the Redemption Price and all other amounts to which
they may be entitled. The Fund shall be entitled to receive, from time to time
after the date fixed for redemption, any interest on the funds so deposited.

                (h)   COMPLIANCE WITH APPLICABLE LAW. In effecting any
redemption pursuant to this Section 11, the Fund shall use its best efforts to
comply with all applicable conditions precedent to effecting such redemption
under the 1940 Act and any applicable Maryland law, but shall effect no
redemption except in accordance with the 1940 Act and any applicable Maryland
law.

                (i) ONLY WHOLE SHARES OF PREFERRED SHARES MAY BE REDEEMED. In
the case of any redemption pursuant to this Section 11, only whole shares of
Preferred Shares shall be redeemed, and in the event that any provision of the
Charter would require redemption of a fractional share, the Auction Agent shall
be authorized to round up so that only whole shares are redeemed.

                                      -44-

<PAGE>

                12.   LIQUIDATION RIGHTS.

                (a)   RANKING. The shares of a series of Preferred Shares
shall rank on a parity with each other, with shares of any other series of
Preferred Shares and with shares of any other series of preferred stock as to
the distribution of assets upon dissolution, liquidation or winding up of the
affairs of the Fund.

                (b)   DISTRIBUTIONS UPON LIQUIDATION. Upon the dissolution,
liquidation or winding up of the affairs of the Fund, whether voluntary or
involuntary, the Holders of shares of Preferred Shares then outstanding shall be
entitled to receive and to be paid out of the assets of the Fund available for
distribution to its shareholders, before any payment or distribution shall be
made on the Common Shares or on any other class of shares of the Fund ranking
junior to the Preferred Shares upon dissolution, liquidation or winding up, an
amount equal to the Liquidation Preference with respect to such shares plus an
amount equal to all dividends thereon (whether or not earned or declared)
accumulated but unpaid to (but not including) the date of final distribution in
same day funds, together with any payments required to be made pursuant to
Section 3 of this Part I in connection with the liquidation of the Fund. After
the payment to the Holders of the shares of Preferred Shares of the full
preferential amounts provided for in this paragraph (b), the Holders of
Preferred Shares as such shall have no right or claim to any of the remaining
assets of the Fund.

                (c)   PRO RATA DISTRIBUTIONS. In the event the assets of the
Fund available for distribution to the Holders of shares of Preferred Shares
upon any dissolution, liquidation, or winding up of the affairs of the Fund,
whether voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such Holders are entitled pursuant to paragraph (b) of this
Section 12, no such distribution shall be made on account of any shares of any
other class or series of preferred stock ranking on a parity with the shares of
Preferred Shares with respect to the distribution of assets upon such
dissolution, liquidation or winding up unless proportionate distributive amounts
shall be paid on account of the shares of Preferred Shares, ratably, in
proportion to the full distributable amounts for which holders of all such
parity shares are respectively entitled upon such dissolution, liquidation or
winding up.

                (d)   RIGHTS OF JUNIOR SHARES. Subject to the rights of the
holders of shares of any series or class or classes of shares ranking on a
parity with the shares of Preferred Shares with respect to the distribution of
assets upon dissolution, liquidation or winding up of the affairs of the Fund,
after payment shall have been made in full to the Holders of the shares of
Preferred Shares as provided in paragraph (b) of this Section 12, but not prior
thereto, any other series or class or classes of shares ranking junior to the
shares of Preferred Shares with respect to the distribution of assets upon
dissolution, liquidation or winding up of the affairs of the Fund shall, subject
to the respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the Holders
of the shares of Preferred Shares shall not be entitled to share therein.

                (e)   CERTAIN EVENTS NOT CONSTITUTING LIQUIDATION.  Neither the
sale of all or substantially all the property or business of the Fund, nor the
merger or consolidation of the Fund into or with any corporation nor the merger
or consolidation of any

                                      -45-

<PAGE>

corporation into or with the Fund shall be a dissolution, liquidation or winding
up, whether voluntary or involuntary, for the purposes of this Section 12.

                13.  RATING AGENCY RESTRICTIONS

                (a)  If Moody's is rating any Preferred Shares, then:

                (i)  For so long as any Preferred Shares are rated by Moody's,
the Fund will not buy or sell futures contracts, write, purchase or sell call
options on futures contracts or purchase put options on futures contracts or
write call options (except covered call options) on portfolio securities unless
it receives written confirmation from Moody's that engaging in such transactions
would not impair the ratings then assigned to such Preferred Shares by Moody's,
except that the Fund may purchase or sell exchange-traded futures contracts
based on the Bond Buyer Municipal Bond Index (the "Municipal Index") or United
States Treasury Bonds, Bills or Notes ("Treasury Futures"), and purchase, write
or sell exchange-traded put options on such futures contracts and purchase,
write or sell exchange-traded call options on such futures contracts
(collectively, "Moody's Hedging Transactions"), subject to the following
limitations:

                (A)  the Fund will only engage in Moody's Hedging Transactions
for the purpose of hedging against changes in the value of the Fund's portfolio
securities due to anticipated changes in interest rates or market conditions;
the amount hedged will vary from time to time and may involve the purchase and
sale of futures contracts based on the Municipal Index or Treasury Futures to
reduce or eliminate the amount hedged;

                (B)  the Fund will not engage in any Moody's Hedging
Transaction which would cause the Fund, at the time of such transaction, to own
or have sold net outstanding futures contracts having an aggregate Market Value
exceeding 33 1/3% of the aggregate Market Value of assets owned by the Fund; and

                (C)  the Fund will not enter into an option unless, after
giving effect thereto, the Fund would continue to have Moody's Eligible Assets
with an aggregate Discounted Value equal to or greater than the Preferred Shares
Basic Maintenance Amount.

                (ii) For purposes of determining whether the Fund has Moody's
Eligible Assets with an aggregate Discounted Value that equals or exceeds the
Preferred Shares Basic Maintenance Amount, the Discounted Value of Moody's
Eligible Assets which the Fund is obligated to deliver or receive pursuant to an
outstanding option shall be as follows:

                (A)  assets subject to call options written by the Fund which
are either exchange-traded and "readily reversible" or which expire within 49
days after the date as of which such valuation is made shall be valued at the
lesser of:

                (I)  Discounted Value and

                (II) the exercise price of the call option written by the Fund;

                 (B) assets subject to call options written by the Fund not
meeting the requirements of clause (A) of this sentence shall have no value;

                                      -46-


<PAGE>

                (C)  assets subject to put options written by the Fund shall be
valued at the lesser of:

                (I)   the exercise price and

                (II)  the Discounted Value of the subject security; and

                (D)   where delivery may be made to the Fund with any security
of a class of securities, the Fund shall assume that it will take delivery of
the security with the lowest Discounted Value.

                (iii) For purposes of determining whether the Fund has Moody's
Eligible Assets with an aggregate Discounted Value that equals or exceeds the
Preferred Shares Basic Maintenance Amount, the following amounts shall be
subtracted from the aggregate Discounted Value of the Moody's Eligible Assets
held by the Fund:

                (A)   10% of the exercise price of a written call option;

                (B)   the exercise price of any written put option;

                (C)   the settlement price of the underlying futures contract
if the Fund writes put options on a futures contract; and

                (D)   105% of the Market Value of the underlying futures
contracts if the Fund writes call options on a futures contract and does not own
the underlying contract.

                (iv)  For so long as any Preferred Shares are rated by Moody's,
the Fund may enter into contracts to purchase securities for a fixed price at a
future date beyond customary settlement time ("Forward Commitments"), provided
that:

                (A)   the Fund will maintain in a segregated account with its
custodian cash, cash equivalents or short-term, fixed-income securities rated
P-1, MTG-1, MIG-1, or Baa or higher by Moody's or, if not rated by Moody's,
rated A1+/AA, SP-1+/AA, A or AA or higher by S&P, and maturing prior to the date
of the Forward Commitment with a Market Value that equals or exceeds the amount
of the Fund's obligations under any Forward Commitment to which it is from time
to time a party or long-term fixed income securities with a Market Value that
equals or exceeds the amount of the Fund's obligations under any Forward
Commitment to which it is from time to time a party; and

                (B)   the Fund will not enter into a Forward Commitment unless,
after giving effect thereto, the Fund would continue to have Moody's Eligible
Assets with an aggregate Discounted Value equal to or greater than the Preferred
Shares Maintenance Amount.

                For purposes of determining whether the Fund has Moody's
Eligible Assets with an aggregate Discounted Value that equals or exceeds the
Preferred Shares Basic Maintenance Amount, the Discounted Value of Forward
Commitments will be the Discounted Value as calculated by applying the
respective Moody's Discount Factor.

                                      -47-

<PAGE>

                (b)   If Fitch is rating any Preferred Shares, then:

                (i)   For so long as any Preferred Shares are rated by Fitch,
the Fund will not buy or sell futures contracts, write, purchase or sell call
options on futures contracts or purchase put options on futures contracts or
write call options (except covered call options) on portfolio securities unless
it receives written confirmation from Fitch that engaging in such transactions
would not impair the ratings then assigned to such Preferred Shares by Fitch,
except that the Fund may purchase or sell exchange-traded futures contracts
based on the Municipal Index or Treasury Futures, and purchase, write or sell
exchange-traded put options on such futures contracts and purchase, write or
sell exchange-traded call options on such futures contracts (collectively,
"Fitch Hedging Transactions"), subject to the following limitations:

                (A)   the Fund will only engage in Fitch Hedging Transactions
for the purpose of hedging against changes in the value of the Fund's portfolio
securities due to anticipated changes in interest rates or market conditions;
the amount hedged will vary from time to time and may involve the purchase and
sale of futures contracts based on the Municipal Index or Treasury Futures to
reduce or eliminate the amount hedged;

                (B)   the Fund will not engage in any Fitch Hedging Transaction
which would cause the Fund, at the time of such transaction, to own or have sold
net outstanding futures contracts having an aggregate Market Value exceeding 33
1/3% of the aggregate Market Value of assets owned by the Fund; and

                (C)   the Fund will not enter into an option unless, after
giving effect thereto, the Fund would continue to have Fitch Eligible Assets
with an aggregate Discounted Value equal to or greater than the Preferred Shares
Basic Maintenance Amount.

                (ii)  For purposes of determining whether the Fund has Fitch
Eligible Assets with an aggregate Discounted Value that equals or exceeds the
Preferred Shares Basic Maintenance Amount, the Discounted Value of Fitch
Eligible Assets which the Fund is obligated to deliver or receive pursuant to an
outstanding option shall be as follows:

                (A)   assets subject to call options written by the
Fund which are either exchange-traded and "readily reversible" or which expire
within 49 days after the date as of which such valuation is made shall be valued
at the lesser of:

                (I)   Discounted Value and

                (II)  the exercise price of the call option written by the Fund;

                (B)   assets subject to call options written by the
Fund not meeting the requirements of clause (A) of this sentence shall have no
value;
                (C)   assets subject to put options written by the Fund shall be
valued at the lesser of:

                (I)   the exercise price and


                                      -48-

<PAGE>

                (II)   the Discounted Value of the subject security; and

                (D)    where delivery may be made to the Fund with any security
of a class of securities, the Fund shall assume that it will take delivery of
the security with the lowest Discounted Value.

                (iii)  For purposes of determining whether the Fund has Fitch
Eligible Assets with an aggregate Discounted Value that equals or exceeds the
Preferred Shares Basic Maintenance Amount, the following amounts shall be
subtracted from the aggregate Discounted Value of the Fitch Eligible Assets held
by the Fund:

                 (A)   10% of the exercise price of a written call option;

                 (B)   the exercise price of any written put option;

                 (C)   the settlement price of the underlying futures contract
if the Fund writes put options on a futures contract; and

                 (D)   105% of  the Market Value of the underlying futures
contracts if the Fund writes call options on a futures contract and does not
own the underlying contract.

                 (iv)  For so long as any Preferred Shares are rated by Fitch,
the Fund may enter into Forward Commitments, provided that:

                  (A)  the Fund will maintain in a segregated account with its
custodian cash, cash equivalents or short-term, fixed-income securities rated
F-1 or BBB or higher by Fitch (or, if not rated by Fitch, rated P-1, MTG-1 or
MIG-1, or Baa or higher by Moody's) and maturing prior to the date of the
Forward Commitment with a Market Value that equals or exceeds the amount of the
Fund's obligations under any Forward Commitment to which it is from time to time
a party or long-term fixed income securities with a Market Value that equals or
exceeds the amount of the Fund's obligations under any Forward Commitment to
which it is from time to time a party; and

                  (B)  the Fund will not enter into a Forward Commitment unless,
after giving effect thereto, the Fund would continue to have Fitch Eligible
Assets with an aggregate Discounted Value equal to or greater than the Preferred
Shares Maintenance Amount.

                  For purposes of determining whether the Fund has Fitch
Eligible Assets with an aggregate Discounted Value that equals or exceeds the
Preferred Shares Basic Maintenance Amount, the Discounted Value of Forward
Commitments will be the Discounted Value as calculated by applying the
respective Fitch Discount Factor.

                  (c) For so long as any Preferred Shares are outstanding and
Moody's or Fitch or both is rating such shares, the Fund will not, unless it has
received written confirmation from Moody's or Fitch or both, as applicable, that
any such action would not impair the rating then assigned by such rating agency
to such shares, engage in any one or more of the following transactions:

                                      -49-


<PAGE>

                  (i)   borrow money, except that the Fund may, without
obtaining the written confirmation described above, borrow money for the purpose
of clearing securities transactions if

                  (A)   the Preferred Shares Basic Maintenance Amount
would continue to be satisfied after giving effect to such borrowing and

                  (B)   such borrowing

                  (I)   is privately arranged with a bank or other person and is
evidenced by a promissory note or other evidence of indebtedness that is not
intended to be publicly distributed or

                  (II)  is for "temporary purposes," is evidenced by a
promissory note or other evidence of indebtedness and is in an amount not
exceeding 5% of the value of the total assets of the Fund at the time of the
borrowing (for purposes of the foregoing, "temporary purposes" means that the
borrowing is to be repaid within sixty days and is not to be extended or
renewed);

                  (ii)  except as provided in Section 5 of this Part I, issue
additional shares of any series of Preferred Shares or any class or series of
shares ranking prior to or on a parity with Preferred Shares with respect to the
payment of dividends or the distribution of assets upon dissolutions,
liquidation or winding up of the Fund, or reissue any Preferred Shares
previously purchased or redeemed by the Fund;

                  (iii) engage in any short sales of securities;

                  (iv)  lend securities;

                  (v)   merge or consolidate into or with any other corporation
or entity;

                  (vi)  change the Pricing Service; and (vii) enter into
reverse repurchase agreements.

                  In the event any Preferred Shares are outstanding and another
nationally-recognized statistical rating organization is rating such shares in
addition to or in lieu of Moody's or Fitch, the Fund shall comply with any
restrictions imposed by such rating agency, which restrictions may be more
restrictive than those imposed by Moody's or Fitch.

                  14.   MISCELLANEOUS.

                  (a)   [RESERVED]

                  (b)   NO FRACTIONAL SHARES.  No fractional shares of
Preferred Shares shall be issued.

                  (c)   STATUS OF SHARES OF PREFERRED SHARES REDEEMED, EXCHANGED
OR OTHERWISE ACQUIRED BY THE FUND.  Shares of Preferred Shares


                                      -50-

<PAGE>

which are redeemed, exchanged or otherwise acquired by the Fund shall return
to the status of authorized and unissued Preferred Shares without designation as
to series.

                  (d)   BOARD MAY RESOLVE AMBIGUITIES. To the extent permitted
by applicable law, the Board of Directors may interpret or adjust the provisions
of these Articles Supplementary to resolve any inconsistency or ambiguity or to
remedy any formal defect, and may amend these Articles Supplementary with
respect to any series of Preferred Shares prior to the issuance of shares of
such series.

                  (e)   HEADINGS NOT DETERMINATIVE. The headings contained in
these Articles Supplementary are for convenience of reference only and shall not
affect the meaning or interpretation of these Articles Supplementary.

                  (f)   NOTICES. All notices or communications, unless
otherwise specified in the By-Laws of the Fund or these Articles Supplementary,
shall be sufficiently given if in writing and delivered in person or mailed by
first-class mail, postage prepaid.

                                    PART II

                  1.    ORDERS

                  (a)   Prior to the Submission Deadline on each Auction Date
for shares of Preferred Shares:

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

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

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

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

                  (ii)  one or more Broker-Dealers, using lists of Potential
Beneficial Owners, shall in good faith for the purpose of conducting a
competitive Auction in a commercially reasonable manner, contact Potential
Beneficial Owners (by telephone or otherwise), including Persons that are not
Beneficial Owners, on such lists to determine the number of shares, if any,
which each such Potential Beneficial Owner offers to purchase if the Applicable
Rate for the next succeeding Rate Period of shares of such series shall not be
less than the rate per annum specified by such Potential Beneficial Owner.

                                      -51-

<PAGE>

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

                  (b) (i) A Bid by a Beneficial Owner or an Existing Holder of
shares of a series of Preferred Shares subject to an Auction on any Auction Date
shall constitute an irrevocable offer to sell:

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

                  (B) such number or a lesser number of Outstanding shares of
such series to be determined as set forth in clause (iv) of paragraph (a) of
Section 4 of this Part II if the Applicable Rate for shares of such series
determined on such Auction Date shall be equal to the rate specified therein; or

                 (C)  the number of Outstanding shares of such series
specified in such Bid if the rate specified therein shall be higher than the
Maximum Rate for shares of such series, or such number or a lesser number of
Outstanding shares of such series to be determined as set forth in clause (iii)
of paragraph (b) of Section 4 of this Part II if the rate specified therein
shall be higher than the Maximum Rate for shares of such series and Sufficient
Clearing Bids for shares of such series do not exist.

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

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

                 (B)  such number or a lesser number of Outstanding shares of
such series as set forth in clause (iii) of paragraph (b) of Section 4 of this
Part II if Sufficient Clearing Bids for shares of such series do not exist;
provided, however, that a Broker-Dealer that is an Existing Holder with respect
to shares of a series of Preferred Shares shall not be liable to any Person for
failing to sell such shares pursuant to a Sell Order described in the proviso to
paragraph (c) of Section 2 of this Part II if (1) such shares were transferred
by the Beneficial Owner thereof without compliance by such Beneficial Owner or
its transferee Broker-Dealer (or other transferee

                                      -52-

<PAGE>

person, if permitted by the Fund) with the provisions of Section 7 of this Part
II or (2) such Broker-Dealer has informed the Auction Agent pursuant to the
terms of its Broker-Dealer Agreement that, according to such Broker-Dealer's
records, such Broker-Dealer believes it is not the Existing Holder of such
shares.

                (iii)   A Bid by a Potential Beneficial Holder or a Potential
Holder of shares of a series of Preferred Shares subject to an Auction on any
Auction Date shall constitute an irrevocable offer to purchase:

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

                 (B)    such number or a lesser number of Outstanding shares of
such series as set forth in clause (v) of paragraph (a) of Section 4 of this
Part II if the Applicable Rate for shares of such series determined on such
Auction Date shall be equal to the rate specified therein.

                 (C)    No Order for any number of shares of Preferred Shares
other than whole shares shall be valid.

                 2.    SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION
AGENT.

                (a)    Each Broker-Dealer shall submit in writing to the Auction
Agent prior to the Submission Deadline on each Auction Date all Orders for
shares of Preferred Shares of a series subject to an Auction on such Auction
Date obtained by such Broker-Dealer, designating itself (unless otherwise
permitted by the Fund) as an Existing Holder in respect of shares subject to
Orders submitted or deemed submitted to it by Beneficial Owners and as a
Potential Holder in respect of shares subject to Orders submitted to it by
Potential Beneficial Owners, and shall specify with respect to each Order for
such shares:

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

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

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

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

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

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


                                      -53-

<PAGE>

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

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

                (c)    If an Order or Orders covering all of the Outstanding
shares of Preferred Shares of a series held by any Existing Holder is not
submitted to the Auction Agent prior to the Submission Deadline, the Auction
Agent shall deem a Hold Order to have been submitted by or on behalf of such
Existing Holder covering the number of Outstanding shares of such series held by
such Existing Holder and not subject to Orders submitted to the Auction Agent;
provided, however, that if an Order or Orders covering all of the Outstanding
shares of such series held by any Existing Holder is not submitted to the
Auction Agent prior to the Submission Deadline for an Auction relating to a
Special Rate Period consisting of more than 28 Rate Period Days, the Auction
Agent shall deem a Sell Order to have been submitted by or on behalf of such
Existing Holder covering the number of outstanding shares of such series held by
such Existing Holder and not subject to Orders submitted to the Auction Agent.

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

                (i)    all Hold Orders for shares of such series shall be
considered valid, but only up to and including in the aggregate the number of
shares of Outstanding shares of such series held by such Existing Holder, and if
the number of shares of such series subject to such Hold Orders exceeds the
number of Outstanding shares of such series held by such Existing Holder, the
number of shares subject to each such Hold Order shall be reduced pro rata to
cover the number of Outstanding shares of such series held by such Existing
Holder;

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

                (A)    subject to subclause (A), if more than one Bid of an
Existing Holder for shares of such series is submitted to the Auction Agent with
the same rate and the number of Outstanding shares of such series subject to
such Bids is greater than such excess, such Bids shall be considered valid up to
and including the amount of such excess, and the number of shares of such series
subject to each Bid with the same rate shall be reduced pro rata to cover the
number of shares of such series equal to such excess;

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

                                      -54-

<PAGE>

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

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

                (e)    If more than one Bid for one or more shares of a series
of  Preferred Shares is submitted to the Auction Agent by or on behalf of any
Potential Holder, each such Bid submitted shall be a separate Bid with the rate
and number of shares therein specified.

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

                3.   DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE
AND APPLICABLE RATE.

                (a)  Not earlier than the Submission Deadline on each Auction
Date for shares of a series of Preferred Shares, the Auction Agent shall
assemble all valid Orders submitted or deemed submitted to it by the
Broker-Dealers in respect of shares of such series (each such Order as submitted
or deemed submitted by a Broker-Dealer being hereinafter referred to
individually as a "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 for such series:

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

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

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

                (B)  the number of Outstanding shares of such series subject to
Submitted Bids of Existing Holders specifying one or more rates higher than the
Maximum Rate for shares of such series;


                (C)  and the number of Outstanding shares of such series
subject to Submitted Sell Orders (in the event such excess or such equality
exists (other than because the number of shares of such series in subclauses (B)
and (C) above is zero because all of the Outstanding shares of

                                      -55-

<PAGE>



such series are subject to Submitted Hold Orders), such Submitted Bids in
subclause (A) above being hereinafter referred to collectively as "Sufficient
Clearing Bids"); and

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

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

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

                (b)   Promptly after the Auction Agent has made the
determinations pursuant to paragraph (a) of this Section 3, the Auction Agent
shall advise the Fund of the Maximum Rate for shares of the series of Preferred
Shares for which an Auction is being held on the Auction Date and, based on such
determination, the Applicable Rate for shares of such series for the next
succeeding Rate Period thereof as follows:

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

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

                (iii) if all of the Outstanding shares of such series are
subject to Submitted Hold Orders, that the Applicable Rate for all shares of
such series for the next succeeding Rate Period thereof shall be equal to the
lesser of the Kenny Index (if such Rate Period consists of fewer than 183 Rate
Period Days) or the product of (A)(I) the "AA" Composite Commercial Paper Rate
on such Auction Date for such Rate Period, if such Rate Period consists of fewer
than 183 Rate Period Days; (II) the Treasury Bill Rate on such Auction Date for
such Rate Period, if such Rate Period consists of more than 182 but fewer than
365 Rate Period Days; or (III) the Treasury Note Rate on such Auction Date for
such Rate Period, if such Rate Period is more than 364 Rate Period Days (the
rate described in the foregoing clause (A)(I), (II) or (III), as applicable,
being referred to herein as the "Benchmark Rate") and (B) 1 minus the maximum
marginal regular Federal personal income tax rate applicable to ordinary income
(taking into account the Federal income tax deductibility of state and local
taxes paid or incurred) or the maximum marginal regular Federal corporate
income tax rate applicable to ordinary income, whichever is greater; provided,
however, that if the Fund has notified the

                                      -56-

<PAGE>

Auction Agent of its intent to allocate to Preferred Shares in such Rate Period
any net capital gains or other income taxable for Federal income tax purposes
("Taxable Income"), the Applicable Rate for Preferred Shares for such Rate
Period will be (i) if the Taxable Yield Rate (as defined below) is greater than
the Benchmark Rate, then the Benchmark Rate, or (ii) if the Taxable Yield Rate
is less than or equal to the Benchmark Rate, then the rate equal to the sum of
(x) the lesser of the Kenny Index (if such Rate Period consists of fewer than
183 Rate Period Days) or the product of the Benchmark Rate multiplied by the
factor set forth in the preceding clause (B) and (y) the product of the maximum
marginal regular Federal personal income tax rate applicable to ordinary income
(taking into account the Federal income tax deductibility of state and local
taxes paid or incurred) or the maximum marginal regular Federal corporate income
tax applicable to ordinary income, whichever is greater, multiplied by the
Taxable Yield Rate. For purposes of the foregoing, Taxable Yield Rate means the
rate determined by (a) dividing the amount of Taxable Income available for
distribution per such share of Preferred Shares by the number of days in the
Dividend Period in respect of which such Taxable Income is contemplated to be
distributed, (b) multiplying the amount determined in (a) above by 365 (in the
case of a Dividend Period of 7 Rate Period Days) or 360 (in the case of any
other Dividend Period), and (c) dividing the amount determined in (b) above by
$25,000.

           4.   ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL
ORDERS AND ALLOCATION OF SHARES.

           Existing Holders shall continue to hold the shares of Preferred
Shares that are subject to Submitted Hold Orders, and, based on the
determinations made pursuant to paragraph (a) of Section 3 of this Part II, the
Submitted Bids and Submitted Sell Orders shall be accepted or rejected by the
Auction Agent and the Auction Agent shall take such other action as set forth
below:

           (a)  If Sufficient Clearing Bids for shares of a series of Preferred
Shares have been made, all Submitted Sell Orders with respect to shares of such
series shall be accepted and, subject to the provisions of paragraphs (d) and
(e) of this Section 4, Submitted Bids with respect to shares of such series
shall be accepted or rejected as follows in the following order of priority and
all other Submitted Bids with respect to shares of such series shall be
rejected:

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

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

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

                                      -57-

<PAGE>

          (iv)  each Existing Holder's Submitted Bid for shares of such series
specifying a rate that is equal to the Winning Bid Rate for shares of such
series shall be rejected, thus entitling such Existing Holder to continue to
hold the shares of Preferred Shares subject to such Submitted Bid, unless the
number of Outstanding shares of Preferred Shares subject to all such Submitted
Bids shall be greater than the number of shares of Preferred Shares ("remaining
shares") in the excess of the Available Preferred Shares of such series over the
number of shares of Preferred Shares subject to Submitted Bids described in
clauses (ii) and (iii) of this paragraph (a), in which event such Submitted Bid
of such Existing Holder shall be rejected in part, and such Existing Holder
shall be entitled to continue to hold shares of Preferred Shares subject to such
Submitted Bid, but only in an amount equal to the number of shares of Preferred
Shares of such series obtained by multiplying the number of remaining shares by
a fraction, the numerator of which shall be the number of Outstanding shares of
Preferred Shares held by such Existing Holder subject to such Submitted Bid and
the denominator of which shall be the aggregate number of Outstanding shares of
Preferred Shares subject to such Submitted Bids made by all such Existing
Holders that specified a rate equal to the Winning Bid Rate for shares of such
series; and

         (v)    each Potential Holder's Submitted Bid for shares of such series
specifying a rate that is equal to the Winning Bid Rate for shares of such
series shall be accepted but only in an amount equal to the number of shares of
such series obtained by multiplying the number of shares in the excess of the
Available Preferred Shares of such series over the number of shares of Preferred
Shares subject to Submitted Bids described in clauses (ii) through (iv) of this
paragraph (a) by a fraction, the numerator of which shall be the number of
Outstanding shares of Preferred Shares subject to such Submitted Bid and the
denominator of which shall be the aggregate number of Outstanding shares of
Preferred Shares subject to such Submitted Bids made by all such Potential
Holders that specified a rate equal to the Winning Bid Rate for shares of such
series.

         (b)    If Sufficient Clearing Bids for shares of a series of Preferred
Shares have not been made (other than because all of the Outstanding shares are
subject to Submitted Hold Orders), subject to the provisions of paragraph (d) of
this Section 4, Submitted Orders for shares of such series shall be accepted or
rejected as follows in the following order of priority and all other Submitted
Bids for shares of such series shall be rejected:

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

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

        (iii)   Each Existing Holder's Submitted Bid for shares of such series
specifying any rate that is higher than the Maximum Rate for shares of such
series and the Submitted Sell Orders for shares of such series of each Existing
Holder shall be accepted, thus entitling each Existing Holder that submitted or
on whose behalf was submitted any such Submitted Bid or

                                      -58-

<PAGE>

Submitted Sell Order to sell the shares of such series subject to such Submitted
Bid or Submitted Sell Order, but in both cases only in an amount equal to the
number of shares of such series obtained by multiplying the number of shares of
such series subject to Submitted Bids described in clause (ii) of this paragraph
(b) by a fraction, the numerator of which shall be the number of shares of
Outstanding such series held by such Existing Holder subject to such Submitted
Bid or Submitted Sell Order and the denominator of which shall be the aggregate
number of Outstanding shares of such series subject to all such Submitted Bids
and Submitted Sell Orders.

       (c)    If all of the Outstanding shares of a series of Preferred Shares
are subject to Submitted Hold Orders, all Submitted Bids for shares of such
series shall be rejected.

       (d)    If, as a result of the procedures described in clause (iv) or (v)
of paragraph (a) or clause (iii) of paragraph (b) of this Section 4, any
Existing Holder would be entitled or required to sell, or any Potential Holder
would be entitled or required to purchase, a fraction of a share of a series of
Preferred Shares on any Auction Date, the Auction Agent shall, in such manner as
it shall determine in its sole discretion, round up or down the number of shares
of Preferred Shares to be purchased or sold by any Existing Holder or Potential
Holder on such Auction Date as a result of such procedures so that the number of
shares so purchased or sold by each Existing Holder or Potential Holder on such
Auction Date shall be whole shares of Preferred Shares.

      (e)     If, as a result of the procedures described in clause (v) of
paragraph (a) of this Section 4, any Potential Holder would be entitled or
required to purchase less than a whole share of a series of Preferred Shares on
any Auction Date, the Auction Agent shall, in such manner as it shall determine
in its sole discretion, allocate shares of Preferred Shares of such series for
purchase among Potential Holders so that only whole shares of Preferred Shares
of such series are purchased on such Auction Date as a result of such procedures
by any Potential Holder, even if such allocation results in one or more
Potential Holders not purchasing shares of Preferred Shares of such series on
such Auction Date.

     (f)      Based on the results of each Auction for shares of a series of
Preferred Shares, the Auction Agent shall determine the aggregate number of
shares of such series to be purchased and the aggregate number of shares of such
series to be sold by Potential Holders and Existing Holders and, with respect to
each Potential Holder and Existing Holder, to the extent that such aggregate
number of shares to be purchased and such aggregate number of shares to be sold
differ, determine to which other Potential Holder(s) or Existing Holder(s) they
shall deliver, or from which other Potential Holder(s) or Existing Holder(s)
they shall receive, as the case may be, shares of Preferred Shares of such
series. Notwithstanding any provision of the Auction Procedures or the
Settlement Procedures to the contrary, in the event an Existing Holder or
Beneficial Owner of shares of a series of Preferred Shares with respect to whom
a Broker-Dealer submitted a Bid to the Auction Agent for such shares that was
accepted in whole or in part, or submitted or is deemed to have submitted a Sell
Order for such shares that was accepted in whole or in part, fails to instruct
its Agent Member to deliver such shares against payment therefor, partial
deliveries of shares of Preferred Shares that have been made in respect of
Potential Holders' or Potential Beneficial Owners' Submitted Bids for shares of
such series that have been accepted in whole or in part shall constitute good
delivery to such Potential Holders and Potential Beneficial Owners.

                                      -59-

<PAGE>

            (g)    Neither the Fund nor the Auction Agent nor any affiliate of
either shall have any responsibility or liability with respect to the failure of
an Existing Holder, a Potential Holder, a Beneficial Owner, a Potential
Beneficial Owner or its respective Agent Member to deliver shares of Preferred
Shares of any series or to pay for shares of Preferred Shares of any series sold
or purchased pursuant to the Auction Procedures or otherwise.

            5.     NOTIFICATION OF ALLOCATIONS.

                   Whenever the Fund intends to include any net capital gains or
other income taxable for Federal income tax purposes in any dividend on shares
of Preferred Shares, the Fund shall, in the case of a Minimum Rate Period or a
Special Rate Period of 28 Rate Period Days or fewer, and may, in the case of any
other Special Rate Period, notify the Auction Agent of the amount to be so
included not later than the Dividend Payment Date next preceding the Auction
Date on which the Applicable Rate for such dividend is to be established.
Whenever the Auction Agent receives such notice from the Fund, it will be
required in turn to notify each Broker-Dealer, who, on or prior to such Auction
Date, in accordance with its Broker-Dealer Agreement, will be required to notify
its Beneficial Owners and Potential Beneficial Owners of shares of Preferred
Shares believed by it to be interested in submitting an Order in the Auction to
be held on such Auction Date.

            6.     AUCTION AGENT.

                   For so long as any shares of Preferred Shares are
outstanding, the Auction Agent, duly appointed by the Fund to so act, shall be
in each case a commercial bank, trust company or other financial institution
independent of the Fund and its affiliates (which however, may engage or have
engaged in business transactions with the Fund or its affiliates) and at no time
shall the Fund or any of its affiliates act as the Auction Agent in connection
with the Auction Procedures. If the Auction Agent resigns or for any reason its
appointment is terminated during any period that any shares of Preferred Shares
are outstanding, the Board of Directors shall use its best efforts promptly
thereafter to appoint another qualified commercial bank, trust company or
financial institution to act as the Auction Agent. The Auction Agent's registry
of Existing Holders of shares of a series of Preferred Shares shall be
conclusive and binding on the Broker- Dealers. A Broker-Dealer may inquire of
the Auction Agent between 3:00 p.m. on the Business Day preceding an Auction for
shares of a series of and 9:30 a.m. on the Auction Date for such Auction to
ascertain the number of shares of such series in respect of which the Auction
Agent has determined such Broker-Dealer to be an Existing Holder. If such
Broker-Dealer believes it is the Existing Holder of fewer shares of such series
than specified by the Auction Agent in response to such Broker-Dealer's inquiry,
such Broker-Dealer may so inform the Auction Agent of that belief. Such
Broker-Dealer shall not, in its capacity as Existing Holder of shares of such
series, submit Orders in such Auction in respect of shares of such series
covering in the aggregate more than the number of shares of such series
specified by the Auction Agent in response to such Broker-Dealer's inquiry.

            7.    TRANSFER OF SHARES OF PREFERRED SHARES.

                  Unless otherwise permitted by the Fund, a Beneficial Owner or
an Existing Holder may sell, transfer or otherwise dispose of shares of
Preferred Shares only in whole shares

                                      -60-

<PAGE>


and only pursuant to a Bid or Sell Order placed with the Auction Agent in
accordance with the procedures described in this Part II or to a Broker-Dealer,
provided, however, that (a) a sale, transfer or other disposition of shares of
Preferred Shares from a customer of a Broker-Dealer who is listed on the records
of that Broker-Dealer as the holder of such shares to that Broker-Dealer or
another customer of that Broker-Dealer shall not be deemed to be a sale,
transfer or other disposition for purposes of this Section 7 if such
Broker-Dealer remains the Existing Holder of the shares so sold, transferred or
disposed of immediately after such sale, transfer or disposition and (b) in the
case of all transfers other than pursuant to Auctions, the Broker-Dealer (or
other Person, if permitted by the Fund) to whom such transfer is made shall
advise the Auction Agent of such transfer.

                  8. GLOBAL CERTIFICATE.

                  Prior to the commencement of a Voting Period, (i) all of the
shares of a series of Preferred Shares outstanding from time to time shall be
represented by one global certificate registered in the name of the Securities
Depository or its nominee and (ii) no registration of transfer of shares of a
series of Preferred Shares shall be made on the books of the Fund to any Person
other than the Securities Depository or its nominee.


                                      -61-


<PAGE>

                  IN WITNESS WHEREOF, MANAGED MUNICIPALS PORTFOLIO INC. has
caused these presents to be signed as of __________ ___, 2002 in its name and on
its behalf by its President or a Vice President and witnessed by its Secretary
or Assistant Secretary and the said officers of the Fund acknowledge said
instrument to be the corporate act of the Fund, and state under penalties of
perjury that to the best of their knowledge, information and belief the matters
and facts therein set forth with respect to authorization and approval are true
in all material respects.

                                            MANAGED MUNICIPALS PORTFOLIO INC.

                                            By:
                                               ---------------------------------

                                               Title:

WITNESS:

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

Title:



                                      -62-

</TEXT>
</DOCUMENT>
