<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>dsmbfexhibit.txt
<DESCRIPTION>ARTICLES SUPPLEMENTARY PERFERRED STOCK
<TEXT>
                 DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC.

               Articles Supplementary Creating Three Series of

                             Auction Preferred Stock

      Dreyfus Strategic Municipal Bond Fund, Inc., a Maryland corporation having
its principal Maryland office in the City of Baltimore in the State of Maryland
(the "Corporation"), certifies to the State Department of Assessments and
Taxation of Maryland that:

      FIRST: Pursuant to authority expressly vested in the board of directors of
the Corporation by Article FIFTH of its Articles of Incorporation, the Board of
Directors has classified from the Corporation's capital stock and authorized the
issuance of three series of 2,480 shares each of authorized preferred stock, par
value $.001 per share, liquidation preference $25,000 per share, designated
respectively: Auction Preferred Stock, Series A, Auction Preferred Stock, Series
B and Auction Preferred Stock, Series C.

      SECOND: Pursuant to Section 2-411 of the Maryland General Corporation Law
and authority granted by Article II of the Corporation's By-laws, the Board of
Directors of the Corporation has appointed a pricing committee (the "Pricing
Committee") and has authorized such Pricing Committee to fix, consistent with,
and subject to, the authorization referred to in Article FIRST of these Articles
Supplementary, the terms of the shares of Auction Preferred Stock, Series A,
Auction Preferred Stock, Series B and Auction Preferred Stock, Series C.

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

                                   DESIGNATION

      Series A: A series of 2,480 shares of preferred stock, par value $.001 per
share, liquidation preference $25,000 per share, hereby is designated "Auction
Preferred Stock Series A." Each share of Auction Preferred Stock, Series A shall
be issued on the Date of Original Issue (as herein defined); and have such other
preferences, limitations and relative voting rights, in addition to those
required by applicable law or set forth in the Corporation's Articles of
Incorporation applicable to preferred stock of the Corporation, as are set forth
in these Articles Supplementary. The Auction Preferred Stock, Series A shall
constitute a separate series of preferred stock of the Corporation, and each
share of Auction Preferred Stock, Series A shall be identical.

      Series B: A series of 2,480 shares of preferred stock, par value $.001 per
share, liquidation preference $25,000 per share, hereby is designated "Auction
Preferred Stock Series B." Each share of Auction Preferred Stock, Series B shall
be issued on the Date of Original Issue (as herein defined); and have such other
preferences, limitations and relative voting rights, in addition to those
required by applicable law or set forth in the Corporation's Articles of
Incorporation applicable to preferred stock of the Corporation, as are set forth
in these Articles Supplementary. The Auction Preferred Stock, Series B shall
constitute a separate series of preferred stock of the Corporation, and each
share of Auction Preferred Stock, Series B shall be identical.

      Series C: A series of 2,480 shares of preferred stock, par value $.001 per
share, liquidation preference $25,000 per share, hereby is designated "Auction
Preferred Stock Series C." Each share of Auction Preferred Stock, Series C shall
be issued on the Date of Original Issue (as herein defined); and have such other
preferences, limitations and relative voting rights, in addition to those
required by applicable law or set forth in the Corporation's Articles of
Incorporation applicable to preferred stock of the Corporation, as are set forth
in these Articles Supplementary. The Auction Preferred Stock, Series C shall
constitute a separate series of preferred stock of the Corporation, and each
share of Auction Preferred Stock, Series C shall be identical.

            1.    Definitions.
                  -----------

            (a) Capitalized terms not defined in this paragraph 1 shall have the
respective meanings specified in paragraph 10 hereof. Unless the context or use
indicates another or different meaning, the following terms shall have the
following meanings, whether used in the singular or plural:

            "'AA' Composite Commercial Paper Rate," on any Valuation Date, means
(i) the Interest Equivalent of the rate on commercial paper placed on behalf of
issuers whose corporate bonds are rated "AA" by S&P or "Aa" by Moody's or the
equivalent of such rating by another nationally recognized statistical rating
organization, as such rate is made available on a discount basis or otherwise by
the Federal Reserve Bank of New York for the Business Day immediately preceding
such date, or (ii) in the event that the Federal Reserve Bank of New York does
not make available such a rate, then the arithmetic average of the Interest
Equivalent of the rate on commercial paper placed on behalf of such issuers, as
quoted on a discount basis or otherwise by PaineWebber Incorporated or its
successors that are Commercial Paper Dealers, to the Auction Agent for the close
of business on the Business Day immediately preceding such date. If one of the
Commercial Paper Dealers does not quote a rate required to determine the "AA"
Composite Commercial Paper Rate, the "AA" Composite Commercial Paper Rate will
be determined on the basis of the quotation or quotations furnished by any
Substitute Commercial Paper Dealer or Substitute Commercial Paper Dealers
selected by the Fund to provide such rate or rates not being supplied by the
Commercial Paper Dealer. If the number of Dividend Period days shall be (i) 7 or
more but fewer than 49 days, such rate shall be the Interest Equivalent of the
30-day rate on such commercial paper; (ii) 49 or more but fewer than 70 days,
such rate shall be the Interest Equivalent of the 60-day rate on such commercial
paper; (iii) 70 or more days but fewer than 85 days, such rate shall be the
arithmetic average of the Interest Equivalent of the 60-day and 90-day rates on
such commercial paper; (iv) 85 or more days but fewer than 99 days, such rate
shall be the Interest Equivalent of the 90-day rate on such commercial paper;
(v) 99 or more days but fewer than 120 days, such rate shall be the arithmetic
average of the Interest Equivalent of the 90-day and 120-day rates on such
commercial paper; (vi) 120 or more days but fewer than 141 days, such rate shall
be the Interest Equivalent of the 120-day rate on such commercial paper; (vii)
141 or more days but fewer than 162 days, such rate shall be the arithmetic
average of the Interest Equivalent of the 120-day and 180-day rates on such
commercial paper; and (viii) 162 or more days but fewer than 183 days, such rate
shall be the Interest Equivalent of the 180-day rate on such commercial paper.

            "Accountant's Confirmation" has the meaning set forth in paragraph
7(c) of these Articles Supplementary.

            "Additional Dividend" has the meaning set forth in paragraph 2(e) of
these Articles Supplementary.

            "Adviser" means the Corporation's investment adviser which shall be
The Dreyfus Corporation or any other entity that may serve as the Corporation's
investment adviser.

            "Affiliate" means any Person known to the Auction Agent to be
controlled by, in control of, or under common control with, the Corporation.

            "Agent Member" means a member of the Securities Depository that will
act on behalf of a Beneficial Owner of one or more shares of APS or a Potential
Beneficial Owner.

            "Anticipation Notes" shall mean the following Municipal Obligations:
revenue anticipation notes, tax anticipation notes, tax and revenue anticipation
notes, grant anticipation notes and bond anticipation notes.

            "Applicable Percentage" has the meaning set forth in paragraph
10(a)(vii) of these Articles Supplementary.

            "Applicable Rate" means the rate per annum at which cash dividends
are payable on the APS or Other APS, as the case may be, for any Dividend
Period.

            "APS" means, as the case may be, the Auction Preferred Stock.

            "APS Basic Maintenance Amount," as of any Valuation Date, means the
dollar amount equal to (i) the sum of (A) the product of the number of shares of
APS and Other APS Outstanding on such Valuation Date multiplied by the sum of
(a) $25,000 and (b) any applicable redemption premium attributable to the
designation of a Premium Call Period; (B) the aggregate amount of cash dividends
(whether or not earned or declared) that will have accumulated for each share of
APS and Other APS Outstanding, in each case, to (but not including) the end of
the current Dividend Period for each series of APS that follows such Valuation
Date in the event the then current Dividend Period will end within 49 calendar
days of such Valuation Date or through the 49th day after such Valuation Date in
the event the then current Dividend Period for each series of APS will not end
within 49 calendar days of such Valuation Date; (C) in the event the then
current Dividend Period will end within 49 calendar days of such Valuation Date,
the aggregate amount of cash dividends that would accumulate at the Maximum
Applicable Rate applicable to a Dividend Period of 28 or fewer days on any
shares of APS and Other APS Outstanding from the end of such Dividend Period
through the 49th day after such Valuation Date, multiplied by the S&P Volatility
Factor, determined from time to time by S&P (except that if such Valuation Date
occurs during a Non-Payment Period, the cash dividend for purposes of
calculation would accumulate at the then current Non-Payment Period Rate); (D)
the amount of anticipated expenses of the Corporation for the 90 days subsequent
to such Valuation Date (including any premiums payable with respect to a
Policy); (E) the amount of the Corporation's Maximum Potential Additional
Dividend Liability as of such Valuation Date; and (F) any current liabilities as
of such Valuation Date to the extent not reflected in any of (i)(A) through
(i)(E) (including, without limitation, and immediately upon determination, any
amounts due and payable by the Corporation pursuant to repurchase agreements and
any amounts payable for Municipal Obligations purchased as of such Valuation
Date) less (ii) either (A) the Discounted Value of any of the Corporation's
assets, or (B) the face value of any of the Corporation's assets if such assets
mature prior to or on the date of redemption of APS or payment of a liability
and are either securities issued or guaranteed by the United States Government
or Deposit Securities, in both cases irrevocably deposited by the Corporation
for the payment of the amount needed to redeem shares of APS subject to
redemption or to satisfy any of (i)(B) through (i)(F).

            "APS Basic Maintenance Cure Date," with respect to the failure by
the Corporation to satisfy the APS Basic Maintenance Amount (as required by
paragraph 7(a) of these Articles Supplementary) as of a given Valuation Date,
means the second Business Day following such Valuation Date.

            "APS Basic Maintenance Report" means a report signed by any of the
President, Treasurer, any Vice President or any Assistant Treasurer of the
Corporation which sets forth, as of the related Valuation Date, the assets of
the Corporation, the Market Value and the Discounted Value thereof (seriatim and
in aggregate), and the APS Basic Maintenance Amount.

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

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

            "Auction Agent" means Bankers Trust Company unless and until another
commercial bank, trust company or other financial institution appointed by a
resolution of the Board of Directors of the Corporation or a duly authorized
committee thereof enters into an agreement with the Corporation to follow the
Auction Procedures for the purpose of determining the Applicable Rate and to act
as transfer agent, registrar, dividend disbursing agent and redemption agent for
the APS and Other APS.

            "Auction Procedures" means the procedures for conducting Auctions
set forth in paragraph 10 of these Articles Supplementary.

            "Beneficial Owner" means a customer of a Broker-Dealer who is listed
on the records of that Broker-Dealer (or, if applicable, the Auction Agent) as a
holder of shares of APS or a Broker-Dealer that holds APS for its own account.

            "Board of Directors" or "Board" means the Corporation's Board of
Directors and, to the extent permitted by law, any committee thereof.

            "Broker-Dealer" means any broker-dealer, or other entity permitted
by law to perform the functions required of a Broker-Dealer in paragraph 10 of
these Articles Supplementary, that has been selected by the Corporation and has
entered into a Broker-Dealer Agreement with the Auction Agent that remains
effective.

            "Broker-Dealer Agreement" means an agreement between the Auction
Agent and a Broker-Dealer pursuant to which such Broker-Dealer agrees to follow
the procedures specified in paragraph 10 of these Articles Supplementary.

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

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

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

            "Common Stock" means the shares of common stock designated as common
stock, par value $.001 per share, of the Corporation.

            "Corporation" means Dreyfus Strategic Municipal Bond Fund, Inc.,
a Maryland corporation.

            "Date of Original Issue" means, with respect to any share of APS or
Other APS, the date on which the Corporation originally issues such share.

            "Deposit Securities" means cash and Municipal Obligations rated at
least A2 (having a remaining maturity of 12 months or less), P-1, VMIG-1 or
MIG-1 by Moody's or A (having a remaining maturity of 12 months or less), A-1+
or SP-1+ by S&P.

            "Discounted Value" means the quotient of the Market Value thereof
divided by the applicable S&P Discount Factor.

            "Dividend Payment Date," with respect to APS, has the meaning set
forth in paragraph 2(b)(i) of these Articles Supplementary and, with respect to
Other APS, has the equivalent meaning.

            "Dividend Period" means any of the Initial Dividend Period, 28-Day
Dividend Period or the Special Dividend Period. The Board of Directors may
change the 28-Day Dividend Period to seven days, upon prior notice to Holders,
in which case, 7-Day Dividend Period shall be substituted for 28-Day Dividend
Period.

            "Escrow Bonds" mean Municipal Obligations that (i) have been
determined to be legally defeased in accordance with S&P's legal defeasance
criteria, (ii) have been determined to be economically defeased in accordance
with S&P's economic defeasance criteria and assigned a rating of AAA by S&P,
(iii) are not rated by S&P but have been determined to be legally defeased by
Moody's, or (iv) have been determined to be economically defeased by Moody's and
assigned a rating no lower than the rating that is Moody's equivalent of S&P's
AAA rating.

            "Existing Holder" means a Broker-Dealer or any such other Person as
may be permitted by the Corporation that is listed as the holder of record of
shares of APS in the Share Books.

            "Forward Commitment" has the meaning set forth in paragraph 8(c) of
these Articles Supplementary.

            "Holder" means a Person identified as a holder of record of shares
of APS in the Stock Register.

            "Independent Accountant" means a nationally recognized accountant,
or firm of accountants, that is, with respect to the Corporation, an independent
public accountant or firm of independent public accountants under the Securities
Act of 1933, as amended.

            "Initial Dividend Payment Date" means the Initial Dividend Payment
Date as determined by the Board of Directors of the Corporation with respect to
each series of APS or Other APS, as the case may be.

            "Initial Dividend Period" has the meaning set forth in paragraph
2(c)(i) of these Articles Supplementary and, with respect to Other APS, has the
equivalent meaning.

            "Initial Dividend Rate" means the rate per annum applicable to the
Initial Dividend Period for such series of APS and, with respect to Other APS,
has the equivalent meaning. The Initial Dividend Rate shall be 3.47% for Series
A APS, 3.47% for Series B APS and 3.47% for Series C APS.

            "Initial Margin" means the amount of cash or securities deposited
with a broker as a margin payment at the time of purchase or sale of a futures
contract.

            "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.

            "Inverse Floaters" mean trust certificates or other instruments
evidencing interests in one or more Municipal Obligations that qualify as S&P
Eligible Assets (and are not part of a private placement of Municipal
Obligations and satisfy the issuer and original issue size requirements of
clause (vii) of the definition of S&P Eligible Assets) the interest rates on
which are adjusted at short term intervals on a basis that is inverse to the
simultaneous readjustment of the interest rates on corresponding floating rate
trust certificates or other instruments issued by the same issuer, provided that
the ratio of the aggregate dollar amount of floating rate instruments to inverse
floating rate instruments issued by the same issuer does not exceed one to one
at their time of original issuance unless the floating rate instruments have
only one reset remaining until maturity.

            "Long Term Dividend Period" means a Special Dividend Period
consisting of a specified period of one whole year or more but not greater than
five years.

            "Mandatory Redemption Price" means $25,000 per share of APS plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared) to the date fixed for redemption and excluding Additional Dividends.

            "Marginal Tax Rate" means the maximum marginal regular Federal
individual income tax rate applicable to ordinary income or the maximum marginal
regular Federal corporate income tax rate, whichever is greater.

            "Market Value" of any asset of the Corporation shall be the market
value thereof determined by the Pricing Service. Market Value of any asset shall
include any interest accrued thereon. The Pricing Service shall value portfolio
securities at the quoted bid prices or the mean between the quoted bid and asked
price or the yield equivalent when quotations are not readily available.
Securities for which quotations are not readily available shall be valued at
fair value as determined by the Pricing Service using methods which include
consideration of: yields or prices of Municipal Obligations of comparable
quality, type of issue, coupon, maturity and rating; indications as to value
from dealers; and general market conditions. The Pricing Service may employ
electronic data processing techniques and/or a matrix system to determine
valuations. If the Pricing Service is unable to value a security, the security
shall be valued at the lower of two dealer bids obtained by the Corporation from
dealers who are members of the National Association of Securities Dealers, Inc.
and who make a market in the security, at least one of which shall be in
writing. 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 on a consistent basis using methods determined in good faith by the Board
of Directors.

            "Maximum Applicable Rate," with respect to APS, has the meaning set
forth in paragraph 10(a)(vii) of these Articles Supplementary and, with respect
to Other APS, has the equivalent meaning.

            "Maximum Potential Additional Dividend Liability," as of any
Valuation Date, means the aggregate amount of Additional Dividends that would be
due if the Corporation were to make Retroactive Taxable Allocations, with
respect to any fiscal year, estimated based upon dividends paid and the amount
of undistributed realized net capital gains and other taxable income earned by
the Corporation, as of the end of the calendar month immediately preceding such
Valuation Date and assuming such Additional Dividends are fully taxable.

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

            "Municipal Obligations" means "Municipal Obligations" as defined in
the Corporation's Registration Statement on Form N-2 (File Nos. 333-84123 and
811-05877) relating to the APS on file with the Securities and Exchange
Commission, as such Registration Statement may be amended from time to time, as
well as short-term Municipal Obligations and Inverse Floaters.

            "Municipal Index" has the meaning set forth in paragraph 8(a) of
these Articles Supplementary.

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

            "1940 Act APS Asset Coverage" means 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 Corporation which are shares of capital stock,
including all outstanding shares of APS and Other APS (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 of capital stock
of a closed-end investment company as a condition of paying dividends on its
Common Stock).

            "1940 Act Cure Date," with respect to the failure by the Corporation
to maintain the 1940 Act APS Asset Coverage (as required by paragraph 6 of these
Articles Supplementary) as of the last Business Day of each month, means the
last Business Day of the following month.

            "Non-Call Period" has the meaning set forth under the definition of
"Specific Redemption Provisions."

            "Non-Payment Period" means any period commencing on and including
the day on which the Corporation shall fail to (i) declare, prior to the close
of business on the second Business Day preceding any Dividend Payment Date, for
payment on or (to the extent permitted by paragraph 2(c)(i) of these Articles
Supplementary) within three Business Days after such Dividend Payment Date to
the Holders as of 12:00 noon, New York City time, on the Business Day preceding
such Dividend Payment Date, the full amount of any dividend on shares of APS
payable on such Dividend Payment Date or (ii) deposit, irrevocably in trust, in
same-day funds, with the Auction Agent by 12:00 noon, New York City time, (A) on
such Dividend Payment Date the full amount of any cash dividend on such shares
payable (if declared) on such Dividend Payment Date or (B) on any redemption
date for any shares of APS called for redemption, the Mandatory Redemption Price
per share of such APS or, in the case of an optional redemption, the Optional
Redemption Price per share, and ending on and including the Business Day on
which, by 12:00 noon, New York City time, all unpaid cash dividends and unpaid
redemption prices shall have been so deposited or shall have otherwise been made
available to Holders in same-day funds; provided that, a Non-Payment Period
shall not end unless the Corporation shall have given at least five days' but no
more than 30 days' written notice of such deposit or availability to the Auction
Agent, all Existing Holders (at their addresses appearing in the Share Books)
and the Securities Depository. Notwithstanding the foregoing, the failure by the
Corporation to deposit funds as provided for by clauses (ii)(A) or (ii)(B) above
within three Business Days after any Dividend Payment Date or redemption date,
as the case may be, in each case to the extent contemplated by paragraph 2(c)(i)
of these Articles Supplementary, shall not constitute a "Non-Payment Period."

            "Non-Payment Period Rate" means, initially, 200% of the applicable
Reference Rate (or 275% of such rate if the Corporation has provided
notification to the Auction Agent prior to the Auction establishing the
Applicable Rate for any dividend pursuant to paragraph 2(f) hereof that net
capital gains or other taxable income will be included in such dividend on
shares of APS), provided that the Board of Directors of the Corporation shall
have the authority to adjust, modify, alter or change from time to time the
initial Non-Payment Period Rate if the Board of Directors of the Corporation
determines and S&P (and any Substitute Rating Agency in lieu of S&P in the event
such party shall not rate the APS) advise the Corporation in writing that such
adjustment, modification, alteration or change will not adversely affect its
then current ratings on the APS.

            "Normal Dividend Payment Date" has the meaning set forth in
paragraph 2(b)(i) of these Articles Supplementary.

            "Notice of Redemption" means any notice with respect to the
redemption of shares of APS pursuant to paragraph 4 of these Articles
Supplementary.

            "Notice of Revocation" has the meaning set forth in paragraph
2(c)(iii) of these Articles Supplementary.

            "Notice of Special Dividend Period" has the meaning set forth in
paragraph 2(c)(iii) of these Articles Supplementary.

            "Optional Redemption Price" means $25,000 per share plus an amount
equal to accumulated but unpaid dividends (whether or not earned or declared) to
the date fixed for redemption and excluding Additional Dividends plus any
applicable redemption premium attributable to the designation of a Premium Call
Period.

            "Other APS" means the Auction Rate Preferred Stock of the
Corporation, other than the APS.

            "Outstanding" means, as of any date (i) with respect to APS, shares
of APS therefor issued by the Corporation except, without duplication, (A) any
shares of APS theretofore canceled or delivered to the Auction Agent for
cancellation, or redeemed by the Corporation, or as to which a Notice of
Redemption shall have been given and Deposit Securities shall have been
deposited in trust or segregated by the Corporation pursuant to paragraph 4(c)
and (B) any shares of APS as to which the Corporation or any Affiliate thereof
shall be a Beneficial Owner, provided that shares of APS held by an Affiliate
shall be deemed outstanding for purposes of calculating the APS Basic
Maintenance Amount and (ii) with respect to shares of other Preferred Stock, has
the equivalent meaning.

            "Parity Shares" means the APS and each other outstanding series of
Preferred Stock the holders of which, together with the holders of the APS,
shall be entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in proportion to the
full respective preferential amounts to which they are entitled, without
preference or priority one over the other.

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

            "Policy" means an insurance policy purchased by the Corporation
which guarantees the payment of principal and interest on specified Municipal
Obligations during the period in which such Municipal Obligations are owned by
the Corporation; provided, however, that, as long as the APS are rated by S&P,
the Corporation will not obtain any Policy unless S&P advises the Corporation in
writing that the purchase of such Policy will not adversely affect its
then-current rating on the APS.

            "Potential Beneficial Owner" means a customer of a Broker-Dealer or
a Broker-Dealer that is not a Beneficial Owner of shares of APS but that wishes
to purchase such shares, or that is a Beneficial Owner that wishes to purchase
additional shares of APS.

            "Potential Holder" means any Broker-Dealer or any such other Person
as may be permitted by the Corporation, including any Existing Holder, who may
be interested in acquiring shares of APS (or, in the case of an Existing Holder,
additional shares of APS).

            "Preferred Stock" means the preferred shares of capital stock, par
value $.001 per share, of the Corporation, and includes APS and Other APS.

            "Premium Call Period" has the meaning set forth under the definition
of "Specific Redemption Provisions."

            "Pricing Service" means S&P J.J. Kenny Evaluation Services or any
pricing service designated by the Board of Directors of the Corporation provided
the Corporation obtains written assurance from S&P that such designation will
not impair the rating then assigned by S&P to the APS.

            "Quarterly Valuation Date" means the last Business Day of the last
month of each fiscal quarter of the Corporation in each fiscal year of the
Corporation, commencing February 29, 2000.

            "Receivables for Municipal Obligations Sold" has the meaning set
forth under the definition of S&P Discount Factor.

            "Reference Rate" means: (i) with respect to a Dividend Period or a
Short Term Dividend Period having 28 or fewer days, the higher of the applicable
"AA" Composite Commercial Paper Rate and the Taxable Equivalent of the
Short-Term Municipal Bond Rate, (ii) with respect to any Short Term Dividend
Period having more than 28 but fewer than 183 days, the applicable "AA"
Composite Commercial Paper Rate, (iii) with respect to any Short Term Dividend
Period having 183 or more but fewer than 364 days, the applicable U.S. Treasury
Bill Rate and (iv) with respect to any Long Term Dividend Period, the applicable
U.S. Treasury Note Rate.

            "Request for Special Dividend Period" has the meaning set forth in
paragraph 2(c)(iii) of these Articles Supplementary.

            "Response" has the meaning set forth in paragraph 2(c)(iii) of these
Articles Supplementary.

            "Retroactive Taxable Allocation" has the meaning set forth in
paragraph 2(e) of these Articles Supplementary.

            "Right," with respect to the APS, has the meaning set forth in
paragraph 2(e) of these Articles Supplementary and, with respect to Other APS,
has the equivalent meaning.

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

            "S&P Discount Factor" means, for purposes of determining the
Discounted Value of any Municipal Obligation which constitutes an S&P Eligible
Asset, the percentage determined by reference to (a) the rating by S&P or
Moody's on such Municipal Obligation and (b) the S&P Exposure Period, in
accordance with the table set forth below:

                             S&P Discount Factors Rating Category

Exposure Period             AAA     AA       A      BBB    Unrated*
---------------             ---     --       -      ---    -------

45 Business Days.........  190%    195%    210%     250%     220%
25 Business Days.........  170     175     190      230      220
10 Business Days.........  155     160     175      215      220
7 Business Days..........  150     155     170      210      220
3 Business Days..........  130     135     150      190      220
*           Eligible Assets not rated by S&P or rated less than BBB
by S&P and not rated at least the equivalent of an "A" rating by
another Rating Agency.
=====================================================================

            Notwithstanding the foregoing, (i) the S&P Discount Factor for
short-term Municipal Obligations will be 115%, so long as such Municipal
Obligations are rated A-1+ or SP-1+ by S&P and mature or have a demand feature
exercisable in 30 days or less, 120% if such Municipal Obligations are rated A-1
or SP-1- by S&P and mature or have a demand feature exercisable within 30 days
or less, or 125% if such Municipal Obligations are not rated by S&P but are
rated VMIG-1, P-1 or MIG-1 by Moody's; provided, however, such short-term
Municipal Obligations rated by Moody's but not rated by S&P having a demand
feature exercisable in 30 days or less must be backed by a letter of credit,
liquidity facility or guarantee from a bank or other financial institution
having a short-term rating of at least A-1+ from S&P; and further provided that
such short-term Municipal Obligations rated by Moody's but not rated by S&P may
comprise no more than 50% of short-term Municipal Obligations that qualify as
S&P Eligible Assets; (ii) no S&P Discount Factor will be applied to cash,
options or to Receivables for Municipal Obligations Sold; and (iii) except as
set forth in clause (i) above, in the case of any Municipal Obligation that is
not rated by S&P but qualifies as a S&P Eligible Asset pursuant to clause (1)(c)
of the following paragraph, such Municipal Obligation will be deemed to have a
S&P rating one full rating category lower than the S&P rating category that is
the equivalent of the rating category in which such Municipal Obligation is
placed by another Rating Agency. "Receivables for Municipal Obligations Sold,"
for purposes of calculating S&P Eligible Assets as of any Valuation Date, means
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 the
Valuation Date. For purposes of the foregoing, Anticipation Notes rated SP-1+
or, if not rated by S&P, rated VMIG-1 by Moody's, which do not mature or have a
demand feature exercisable in 30 days and which do not have a long-term rating,
shall be considered to be short-term Municipal Obligations. In calculating the
Discounted Value of the Corporation's portfolio (1) the S&P Discount Factors
will be applied to futures and Inverse Floaters and (2) a Discount Factor of
388% will be applied to Municipal Obligations rated AAA by S&P which are not
interest bearing or do not pay interest at least semi-annually.

            "S&P Eligible Asset" means cash, Receivables for Municipal
Obligations Sold or a Municipal Obligation that (i) is issued by any of the 50
states, the territories and their subdivisions, counties, cities, towns,
villages, and school districts, agencies, such as authorities and special
districts created by the states, and certain federally sponsored agencies such
as local housing authorities (payments made on these bonds are exempt from
regular federal income taxes and are generally exempt from state and local taxes
in the state of issuance), (ii) is interest bearing and pays interest at least
semi-annually; (iii) is payable with respect to principal and interest in United
States Dollars; (iv) is publicly rated BBB or higher by S&P or, except in the
case of Anticipation Notes that are grant anticipation notes or bond
anticipation notes, which must be rated by S&P to be included in S&P Eligible
Assets, if not rated by S&P but rated by another Rating Agency, is rated at
least A by such agency; (v) is not part of a private placement (except in the
case of Inverse Floaters); (vi) is not subject to a covered call or covered put
option written by the Corporation; and (vii) is part of an issue of Municipal
Obligations with an original issue size of at least $20 million or, if of an
issue with an original issue size below $20 million (but in no event below $10
million), is issued by an issuer with a total of at least $50 million of
securities outstanding.


<PAGE>


            Notwithstanding the foregoing:

            (1) Municipal Obligations (excluding Escrow Bonds) of any one issuer
or guarantor (excluding bond insurers) will be considered S&P Eligible Assets
only to the extent the fair market value of such obligations does not exceed 10%
of the aggregate fair market value of the S&P Eligible Assets, provided that 2%
is added to the applicable S&P Discount Factor for every 1% by which the fair
market value of such Municipal Obligations exceeds 5% of the aggregate fair
market value of the S&P Eligible Assets, and provided that Municipal Obligations
(excluding Escrow Bonds) not rated or rated less than BBB by S&P or not rated at
least A by another Rating Agency with respect to any one issuer or guarantor
(excluding bond insurers) will be considered S&P Eligible Assets only to the
extent the fair market value of such Municipal Obligations does not exceed 5% of
the aggregate fair market value of S&P Eligible Assets;

            (2) Municipal Obligations not rated at least BBB by S&P or not rated
by S&P, or not rated at least A by another Rating Agency, will be considered S&P
Eligible Assets only to the extent the fair market value of such Municipal
Obligations does not exceed 20% of the aggregate fair market value of S&P
Eligible Assets; provided however, that if the fair market value of such
Municipal Obligations exceeds 20% of the aggregate fair market value of S&P
Eligible Assets, a portion of such Municipal Obligations (selected by the
Corporation) will not be considered S&P Eligible Assets, so that the fair market
value of such Municipal Obligations (excluding such portion) does not exceed 20%
of the aggregate fair market value of S&P Eligible Assets;

            (3) Municipal Obligations not rated at least BBB by S&P or not rated
by S&P, but rated at least A by another Rating Agency, will be considered S&P
Eligible Assets only to the extent the fair market value of such Municipal
Obligations does not exceed 50% of the aggregate fair market value of S&P
Eligible Assets; provided however, that if the fair market value of such
Municipal Obligations exceeds 50% of the aggregate fair market value of S&P
Eligible Assets, a portion of such Municipal Obligations (selected by the
Corporation) will not be considered S&P Eligible Assets, so that the fair market
value of such Municipal Obligations (excluding such portion) does not exceed 50%
of the aggregate fair market value of S&P Eligible Assets;

            (4) Long-term Municipal Obligations (excluding Escrow Bonds) issued
by issuers in any one state or territory will be considered S&P Eligible Assets
only to the extent the fair market value of such Municipal Obligations does not
exceed 25% of the aggregate fair market value of S&P Eligible Assets; and

                  (5) Municipal Obligations which are not interest bearing or do
      not pay interest at least semi-annually will be considered S&P Eligible
      Assets if rated AAA by S&P.

            "S&P Exposure Period" means the maximum period of time following a
Valuation Date, including the Valuation Date and the APS Basic Maintenance Cure
Date, that the Corporation has under these Articles Supplementary to cure any
failure to maintain, as of such Valuation Date, the Discounted Value for its
portfolio at least equal to the APS Basic Maintenance Amount (as described in
paragraph 7(a) of these Articles Supplementary).

            "S&P Hedging Transactions" has the meaning set forth in paragraph
8(a) of these Articles Supplementary.

            "S&P Volatility Factor" means 277% or such other potential dividend
rate increase factor as S&P advises the Corporation in writing is applicable.

            "Securities Depository" means The Depository Trust Company or any
successor company or other entity elected by the Corporation as securities
depository for the shares of APS that agrees to follow the procedures required
to be followed by such securities depository in connection with the shares of
APS.

            "Service" means the United States Internal Revenue Service.

            "Series A APS" means the Auction Preferred Stock, Series A.

            "Series B APS" means the Auction Preferred Stock, Series B.

            "Series C APS" means the Auction Preferred Stock, Series C.

            "Short Term Dividend Period" means a Special Dividend Period
consisting of a specified number of days (other than 28 or, if the Corporation
changes the 28-Day Dividend Period to a 7-Day Dividend Period, seven), evenly
divisible by seven and not fewer than seven nor more than 364.

            "Special Dividend Period" means a Dividend Period consisting of (i)
a specified number of days (other than 28 or, if the Corporation changes the
28-Day Dividend Period to a 7-Day Dividend Period, seven), evenly divisible by
seven and not fewer than seven nor more than 364 or (ii) a specified period of
one whole year or more but not greater than five years (in each case subject to
adjustment as provided in paragraph 2(b)(i)).

            "Specific Redemption Provisions" means, with respect to a Special
Dividend Period either, or any combination of, (i) a period (a "Non-Call
Period") determined by the Board of Directors of the Corporation, after
consultation with the Auction Agent and the Broker-Dealers, during which the
shares of APS subject to such Dividend Period shall not be subject to redemption
at the option of the Corporation and (ii) a period (a "Premium Call Period"),
consisting of a number of whole years and determined by the Board of Directors
of the Corporation, after consultation with the Auction Agent and the
Broker-Dealers, during each year of which the shares of APS subject to such
Dividend Period shall be redeemable at the Corporation's option at a price per
share equal to $25,000 plus accumulated but unpaid dividends plus a premium
expressed as a percentage of $25,000, as determined by the Board of Directors of
the Corporation after consultation with the Auction Agent and the
Broker-Dealers.

            "Stock Books" means the books maintained by the Auction Agent
setting forth at all times a current list, as determined by the Auction Agent,
of Existing Holders of the APS.

            "Stock Register" means the register of Holders maintained on behalf
of the Corporation by the Auction Agent in its capacity as transfer agent and
registrar for the APS.

            "Subsequent Dividend Period," with respect to APS, has the meaning
set forth in paragraph 2(c)(i) of these Articles Supplementary and, with respect
to Other APS, has the equivalent meaning.

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

            "Substitute Rating Agency" and "Substitute Rating Agencies" mean a
nationally recognized statistical rating organization or two nationally
recognized statistical rating organizations, respectively, selected by
PaineWebber Incorporated or its affiliates and successors, after consultation
with the Corporation, to act as the substitute rating agency or substitute
rating agencies, as the case may be, to determine the credit ratings of the
shares of APS.

            "Taxable Equivalent of the Short-Term Municipal Bond Rate" on any
date means 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 (the
"Kenny Index") or any successor index, 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 Information Systems Inc. or any successor
thereto, based upon 30-day yield evaluations at par of bonds the interest on
which is excludable for regular Federal income tax purposes under the Code of
"high grade" component issuers selected by Kenny Information Systems Inc. or any
such successor from time to time in its discretion, which component issuers
shall include, without limitation, issuers of general 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 Marginal Tax Rate
(expressed as a decimal); 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 Information
Systems Inc. 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 Marginal
Tax Rate (expressed as a decimal). The Corporation may not utilize a successor
index to the Kenny Index unless S&P provides the Corporation with written
confirmation that the use of such successor index will not adversely affect the
then-current S&P rating of the APS.

            "Treasury Bonds" has the meaning set forth in paragraph 8(a) of
these Articles Supplementary.

            "28-Day Dividend Period" means a Dividend Period consisting of 28
days. If the Corporation changes the 28-Day Dividend Period to seven days, then
7-Day Dividend Periods will be substituted for 28-Day Dividend Periods.

            "U.S. Treasury Bill Rate" on any date means (i) the Interest
Equivalent of the rate on the actively traded Treasury Bill with a maturity most
nearly comparable to the length of the related Dividend Period, as such rate is
made available on a discount basis or otherwise by the Federal Reserve Bank of
New York in its Composite 3:30 P.M. Quotations for U.S. Government Securities
report for such Business Day, or (ii) if such yield as so calculated is not
available, the Alternate Treasury Bill Rate on such date. "Alternate Treasury
Bill Rate" on any date means the Interest Equivalent of the yield as calculated
by reference to the arithmetic average of the bid price quotations of the
actively traded Treasury Bill with a maturity most nearly comparable to the
length of the related Dividend Period, as determined by bid price quotations as
of any time on the Business Day immediately preceding such date, obtained from
at least three recognized primary U.S. Government securities dealers selected by
the Auction Agent. "U.S. Treasury Note Rate" on any date means (i) the yield as
calculated by reference to the bid price quotation of the actively traded,
current coupon Treasury Note with a maturity most nearly comparable to the
length of the related Dividend Period, as such bid price quotation is published
on the Business Day immediately preceding such date by the Federal Reserve Bank
of New York in its Composite 3:30 P.M. Quotations for U.S. Government Securities
report for such Business Day, or (ii) if such yield as so calculated is not
available, the Alternate Treasury Note Rate on such date. "Alternate Treasury
Note Rate" on any date means the yield as calculated by reference to the
arithmetic average of the bid price quotations of the actively traded, current
coupon Treasury Note with a maturity most nearly comparable to the length of the
related Dividend Period, as determined by the bid price quotations as of any
time on the Business Day immediately preceding such date, obtained from at least
three recognized primary U.S. Government securities dealers selected by the
Auction Agent.

            "Valuation Date" means, for purposes of determining whether the
Corporation is maintaining the APS Basic Maintenance Amount, each Business Day
commencing with the Date of Original Issue.

            "Variation Margin" means, in connection with an outstanding futures
contract owned or sold by the Corporation, the amount of cash or securities paid
to or received from a broker (subsequent to the Initial Margin payment) from
time to time as the price of such futures contract fluctuates.

            (b) The foregoing definitions of Accountant's Confirmation, APS
Basic Maintenance Amount, APS Basic Maintenance Cure Date, APS Basic Maintenance
Report, Deposit Securities, Discounted Value, Independent Accountant, Initial
Margin, Inverse Floaters Market Value, Maximum Potential Additional Dividend
Liability, S&P Discount Factor, S&P Eligible Asset, S&P Exposure Period, S&P
Hedging Transactions, S&P Volatility Factor, Valuation Date and Variation Margin
have been determined by the Board of Directors of the Corporation in order to
obtain a AAA rating from S&P on the APS on their Date of Original Issue; and the
Board of Directors of the Corporation shall have the authority, without
shareholder approval, to amend, alter or repeal from time to time the foregoing
definitions and the restrictions and guidelines set forth thereunder if S&P or
any Substitute Rating Agency advises the Corporation in writing that such
amendment, alteration or repeal will not adversely affect its then current
rating on the APS.

            2. Dividends. (a) The Holders of a particular series of APS shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation, out of funds legally available therefor, cumulative dividends each
consisting of (i) cash at the Applicable Rate, (ii) a Right to receive cash as
set forth in paragraph 2(e) below, and (iii) any additional amounts as set forth
in paragraph 2(f) below, and no more, payable on the respective dates set forth
below. Dividends on the shares of each series of APS so declared and payable
shall be paid (i) in preference to and in priority over any dividends declared
and payable on the Common Stock, and (ii) to the extent permitted under the Code
and to the extent available, out of net tax-exempt income earned on the
Corporation's investments. To the extent permitted under the Code, dividends on
shares of APS will be designated as exempt-interest dividends. For the purposes
of this section, the term "net tax-exempt income" shall exclude capital gains of
the Corporation.

            (b) (i) Cash dividends on shares of each series of APS shall
accumulate from the Date of Original Issue and shall be payable, when, as and if
declared by the Board of Directors, out of funds legally available therefor,
commencing on the Initial Dividend Payment Date. Following the Initial Dividend
Payment Date for a series of APS, dividends on that series of APS will be
payable, at the option of the Corporation, either (i) with respect to any 28-Day
Dividend Period and any Short Term Dividend Period of 35 or fewer days, on the
day next succeeding the last day thereof, or (ii) with respect to any Short Term
Dividend Period of more than 35 days and with respect to any Long Term Dividend
Period, monthly on the first Business Day of each calendar month during such
Short Term Dividend Period or Long Term Dividend Period and on the day next
succeeding the last day thereof (each such date referred to in clause (i) or
(ii) being herein referred to as a "Normal Dividend Payment Date"), except that
if such Normal Dividend Payment Date is not a Business Day, then the Dividend
Payment Date shall be the first Business Day next succeeding such Normal
Dividend Payment Date. Although any particular Dividend Payment Date may not
occur on the originally scheduled date because of the exception discussed above,
the next succeeding Dividend Payment Date, subject to such exception, will occur
on the next following originally scheduled date. If for any reason a Dividend
Payment Date cannot be fixed as described above, then the Board of Directors
shall fix the Dividend Payment Date. The Board of Directors by resolution prior
to authorization of a dividend by the Board of Directors may change a Dividend
Payment Date if such change does not adversely affect the contract rights of the
Holders of shares of APS set forth in the Articles of Incorporation. The Initial
Dividend Period, 28-Day Dividend Periods and Special Dividend Periods with
respect to a series of APS are hereinafter sometimes referred to as Dividend
Periods. Each dividend payment date determined as provided above is hereinafter
referred to as a "Dividend Payment Date."

            (ii) Each dividend shall be paid to the Holders as they appear in
the Stock Register as of 12:00 noon, New York City time, on the Business Day
preceding the Dividend Payment Date. 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 they appear on the Stock Register on a
date, not exceeding 15 days prior to the payment date therefor, as may be fixed
by the Board of Directors of the Corporation.

            (c) (i) During the period from and including the Date of Original
Issue to but excluding the Initial Dividend Payment Date for each series of APS
(the "Initial Dividend Period"), the Applicable Rate shall be the Initial
Dividend Rate. Commencing on the Initial Dividend Payment Date for each series
of APS, the Applicable Rate for each subsequent dividend period (hereinafter
referred to as a "Subsequent Dividend Period"), which Subsequent Dividend Period
shall commence on and include a Dividend Payment Date and shall end on and
include the calendar day prior to the next Dividend Payment Date (or last
Dividend Payment Date in a Dividend Period if there is more than one Dividend
Payment Date), shall be equal to the rate per annum that results from
implementation of the Auction Procedures. The Applicable Rate for each Dividend
Period commencing during a Non-Payment Period shall be equal to the Non-Payment
Period Rate; and each Dividend Period, commencing after the first day of, and
during, a Non-Payment Period shall be a 28-Day Dividend Period in the case of
each series of APS. Except in the case of the willful failure of the Corporation
to pay a dividend on a Dividend Payment Date or to redeem any shares of APS on
the date set for such redemption, any amount of any dividend due on any Dividend
Payment Date (if, prior to the close of business on the second Business Day
preceding such Dividend Payment Date, the Corporation has declared such dividend
payable on such Dividend Payment Date to the Holders of such shares of APS as of
12:00 noon, New York City time, on the Business Day preceding such Dividend
Payment Date) or redemption price with respect to any shares of APS not paid to
such Holders when due may be paid to such Holders in the same form of funds by
12:00 noon, New York City time, on any of the first three Business Days after
such Dividend Payment Date or due date, as the case may be, provided that, such
amount is accompanied by a late charge calculated for such period of non-payment
at the Non-Payment Period Rate applied to the amount of such non-payment based
on the actual number of days comprising such period divided by 365. In the case
of a willful failure of the Corporation to pay a dividend on a Dividend Payment
Date or to redeem any shares of APS on the date set for such redemption, the
preceding sentence shall not apply and the Applicable Rate for the Dividend
Period commencing during the Non-Payment Period resulting from such failure
shall be the Non-Payment Period Rate. For the purposes of the foregoing, payment
to a person in same-day funds on any Business Day at any time shall be
considered equivalent to payment to such person in New York Clearing House
(next-day) funds at the same time on the preceding Business Day, and any payment
made after 12:00 noon, New York City time, on any Business Day shall be
considered to have been made instead in the same form of funds and to the same
person before 12:00 noon, New York City time, on the next Business Day.

            (ii) The amount of cash dividends per share of any series of APS
payable (if declared) on the Initial Dividend Payment Date, each 28-Day Dividend
Period and each Dividend Payment Date of each Short Term Dividend Period shall
be computed by multiplying the Applicable Rate for such Dividend Period by a
fraction, the numerator of which will be the number of days in such Dividend
Period or part thereof that such share was outstanding and the denominator of
which will be 365, multiplying the amount so obtained by $25,000, and rounding
the amount so obtained to the nearest cent. During any Long Term Dividend
Period, the amount of cash dividends per share of a series of APS payable (if
declared) on any Dividend Payment Date shall be computed by multiplying the
Applicable Rate for such Dividend Period by a fraction, the numerator of which
will be such number of days in such part of such Dividend Period that such share
was outstanding and for which dividends are payable on such Dividend Payment
Date and the denominator of which will be 360, multiplying the amount so
obtained by $25,000, and rounding the amount so obtained to the nearest cent.

            (iii) With respect to each Dividend Period that is a Special
Dividend Period, the Corporation may, at its sole option and to the extent
permitted by law, by telephonic and written notice (a "Request for Special
Dividend Period") to the Auction Agent and to each Broker-Dealer, request that
the next succeeding Dividend Period for a series of APS be a number of days
(other than 28 or, if the Corporation changes the 28-Day Dividend Period to a
7-Day Dividend Period, seven), evenly divisible by seven and not fewer than
seven nor more than 364 in the case of a Short Term Dividend Period or one whole
year or more but not greater than five years in the case of a Long Term Dividend
Period, specified in such notice, provided that the Corporation may not give a
Request for Special Dividend Period of greater than 28 days (and any such
request shall be null and void) unless, for any Auction occurring after the
initial Auction, Sufficient Clearing Bids were made in the last occurring
Auction and unless full cumulative dividends, any amounts due with respect to
redemptions, and any Additional Dividends payable prior to such date have been
paid in full. Such Request for Special Dividend Period, in the case of a Short
Term Dividend Period, shall be given on or prior to the second Business Day but
not more than seven Business Days prior to an Auction Date for a series of APS
and, in the case of a Long Term Dividend Period, shall be given on or prior to
the second Business Day but not more than 28 days prior to an Auction Date for a
series of APS. Upon receiving such Request for Special Dividend Period, the
Broker-Dealer(s) shall jointly determine whether, given the factors set forth
below, it is advisable that the Corporation issue a Notice of Special Dividend
Period for the series of APS as contemplated by such Request for Special
Dividend Period and the Optional Redemption Price of the APS during such Special
Dividend Period and the Specific Redemption Provisions and shall give the
Corporation and the Auction Agent written notice (a "Response") of such
determination by no later than the second Business Day prior to such Auction
Date. In making such determination the Broker-Dealer(s) will consider (1)
existing short-term and long-term market rates and indices of such short-term
and long-term rates, (2) existing market supply and demand for short-term and
long-term securities, (3) existing yield curves for short-term and long-term
securities comparable to the APS, (4) industry and financial conditions which
may affect the APS, (5) the investment objective of the Corporation, and (6) the
Dividend Periods and dividend rates at which current and potential beneficial
holders of the APS would remain or become beneficial holders. If the
Broker-Dealer(s) shall not give the Corporation and the Auction Agent a Response
by such second Business Day or if the Response states that given the factors set
forth above it is not advisable that the Corporation give a Notice of Special
Dividend Period for the series of APS, the Corporation may not give a Notice of
Special Dividend Period in respect of such Request for Special Dividend Period.
In the event the Response indicates that it is advisable that the Corporation
give a Notice of Special Dividend Period for the series of APS, the Corporation
may by no later than the second Business Day prior to such Auction Date give a
notice (a "Notice of Special Dividend Period") to the Auction Agent, the
Securities Depository and each Broker-Dealer which notice will specify (i) the
duration of the Special Dividend Period, (ii) the Optional Redemption Price as
specified in the related Response and (iii) the Specific Redemption Provisions,
if any, as specified in the related Response. The Corporation also shall provide
a copy of such Notice of Special Dividend Period to Moody's and S&P. The
Corporation shall not give a Notice of Special Dividend Period and, if the
Corporation has given a Notice of Special Dividend Period, the Corporation is
required to give telephonic and written notice of its revocation (a "Notice of
Revocation") to the Auction Agent, each Broker-Dealer, and the Securities
Depository on or prior to the Business Day prior to the relevant Auction Date if
(x) either the 1940 Act APS Asset Coverage is not satisfied or the Corporation
shall fail to maintain S&P Eligible Assets with an aggregate Discounted Value at
least equal to the APS Basic Maintenance Amount, on each of the two Valuation
Dates immediately preceding the Business Day prior to the relevant Auction Date
on an actual basis and on a pro forma basis giving effect to the proposed
Special Dividend Period (using as a pro forma dividend rate with respect to such
Special Dividend Period the dividend rate which the Broker-Dealers shall advise
the Corporation is an approximately equal rate for securities similar to the APS
with an equal dividend period), (y) sufficient funds for the payment of
dividends payable on the immediately succeeding Dividend Payment Date have not
been irrevocably deposited with the Auction Agent by the close of business on
the third Business Day preceding the related Auction Date or (z) the
Broker-Dealer(s) jointly advise the Corporation that after consideration of the
factors listed above they have concluded that it is advisable to give a Notice
of Revocation. The Corporation also shall provide a copy of such Notice of
Revocation to S&P. If the Corporation is prohibited from giving a Notice of
Special Dividend Period as a result of any of the factors enumerated in clause
(x), (y) or (z) above or if the Corporation gives a Notice of Revocation with
respect to a Notice of Special Dividend Period for any series of APS, the next
succeeding Dividend Period will be a 28-Day Dividend Period. In addition, in the
event Sufficient Clearing Bids are not made in the applicable Auction or such
Auction is not held for any reason, such next succeeding Dividend Period will be
a 28-Day Dividend Period and the Corporation may not again give a Notice of
Special Dividend Period for the APS (and any such attempted notice shall be null
and void) until Sufficient Clearing Bids have been made in an Auction with
respect to a 28-Day Dividend Period.

            (d) (i) Holders shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of full cumulative dividends and
applicable late charges, as herein provided, on the shares of APS (except for
Additional Dividends as provided in paragraph 2(e) hereof and additional
payments as provided in paragraph 2(f) hereof). Except for the late charge
payable pursuant to paragraph 2(c)(i) hereof, no interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment on the
shares of APS that may be in arrears.

            (ii) For so long as any share of APS is Outstanding, the Corporation
shall not declare, pay or set apart for payment any dividend or other
distribution (other than a dividend or distribution paid in shares of, or
options, warrants or rights to subscribe for or purchase, Common Stock or other
shares of capital stock, if any, ranking junior to the shares of APS as to
dividends or upon liquidation) in respect of the Common Stock or any other
shares of capital stock of the Corporation ranking junior to or on a parity with
the shares of APS as to dividends or upon liquidation, or call for redemption,
redeem, purchase or otherwise acquire for consideration any shares of the Common
Stock or any other such junior shares (except by conversion into or exchange for
shares of the Corporation ranking junior to the shares of APS as to dividends
and upon liquidation) or any other such Parity Shares (except by conversion into
or exchange for stock of the Corporation ranking junior to or on a parity with
the shares of APS as to dividends and upon liquidation), unless (A) immediately
after such transaction, the Corporation shall have S&P Eligible Assets with an
aggregate Discounted Value equal to or greater than the APS Basic Maintenance
Amount and the Corporation shall maintain the 1940 Act APS Asset Coverage, (B)
full cumulative dividends on shares of APS and shares of Other APS due on or
prior to the date of the transaction have been declared and paid or shall have
been declared and sufficient funds for the payment thereof deposited with the
Auction Agent, (C) any Additional Dividend required to be paid under paragraph
2(e) below on or before the date of such declaration or payment has been paid
and (D) the Corporation has redeemed the full number of shares of APS required
to be redeemed by any provision for mandatory redemption contained herein.

            (e) Each dividend shall consist of (i) cash at the Applicable Rate,
(ii) an uncertificated right (a "Right") to receive an Additional Dividend (as
defined below), and (iii) any additional amounts as set forth in paragraph 2(f)
below. Each Right shall thereafter be independent of the share or shares of APS
on which the dividend was paid. The Corporation shall cause to be maintained a
record of each Right received by the respective Holders. A Right may not be
transferred other than by operation of law. If the Corporation retroactively
allocates any net capital gains or other income subject to regular Federal
income taxes to shares of APS without having given advance notice thereof to the
Auction Agent as described in paragraph 2(f) hereof solely by reason of the fact
that such allocation is made as a result of the redemption of all or a portion
of the outstanding shares of APS or the liquidation of the Corporation (the
amount of such allocation referred to herein as a "Retroactive Taxable
Allocation"), the Corporation will, within 90 days (and generally within 60
days) after the end of the Corporation's fiscal year for which a Retroactive
Taxable Allocation is made, provide notice thereof to the Auction Agent and to
each holder of a Right applicable to such shares of APS (initially as nominee of
The Depository Trust Company) during such fiscal year at such holder's address
as the same appears or last appeared on the Stock Books of the Corporation. The
Corporation will, within 30 days after such notice is given to the Auction
Agent, pay to the Auction Agent (who will then distribute to such holders of
Rights), out of funds legally available therefor, an amount equal to the
aggregate Additional Dividend with respect to all Retroactive Taxable
Allocations made to such holders during the fiscal year in question.

            An "Additional Dividend" means payment to a present or former holder
of shares of APS of an amount which, when taken together with the aggregate
amount of Retroactive Taxable Allocations made to such holder with respect to
the fiscal year in question, would cause such holder's dividends in dollars
(after Federal income tax consequences) from the aggregate of both the
Retroactive Taxable Allocations and the Additional Dividend to be equal to the
dollar amount of the dividends which would have been received by such holder if
the amount of the aggregate Retroactive Taxable Allocations would have been
excludable from the gross income of such holder. Such Additional Dividend shall
be calculated (i) without consideration being given to the time value of money;
(ii) assuming that no holder of shares of APS is subject to the Federal
alternative minimum tax with respect to dividends received from the Corporation;
and (iii) assuming that each Retroactive Taxable Allocation would be taxable in
the hands of each holder of shares of APS at the greater of: (x) the maximum
marginal regular Federal individual income tax rate applicable to ordinary
income or capital gains depending on the taxable character of the distribution
(including any surtax); or (y) the maximum marginal regular Federal corporate
income tax rate applicable to ordinary income or capital gains depending on the
taxable character of the distribution (disregarding in both (x) and (y) the
effect of any state or local taxes and the phase out of, or provision limiting,
personal exemptions, itemized deductions, or the benefit of lower tax brackets).

            (f) Except as provided below, whenever the Corporation intends to
include any net capital gains or other income subject to regular Federal income
taxes in any dividend on shares of APS, the Corporation will notify the Auction
Agent of the amount to be so included at least five Business Days prior to the
Auction Date on which the Applicable Rate for such dividend is to be
established. The Corporation may also include such income in a dividend on
shares of a series of APS without giving advance notice thereof if it increases
the dividend by an additional amount calculated as if such income was a
Retroactive Taxable Allocation and the additional amount was an Additional
Dividend, provided that the Corporation will notify the Auction Agent of the
additional amounts to be included in such dividend at least five Business Days
prior to the applicable Dividend Payment Date.

            (g)   No fractional shares of APS shall be issued.

            3. Liquidation Rights. Upon any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the Holders shall be
entitled to receive, out of the assets of the Corporation available for
distribution to shareholders, before any distribution or payment is made upon
any Common Stock or any other shares of ranking junior in right of payment upon
liquidation to the APS, the sum of $25,000 per share plus accumulated but unpaid
dividends (whether or not earned or declared) thereon to the date of
distribution, and after such payment the Holders will be entitled to no other
payments other than Additional Dividends as provided in paragraph 2(e) hereof.
If upon any liquidation, dissolution or winding up of the Corporation, the
amounts payable with respect to the APS and any other Outstanding class or
series of Preferred Stock of the Corporation ranking on a parity with the APS as
to payment upon liquidation are not paid in full, the Holders and the holders of
such other class or series will share ratably in any such distribution of assets
in proportion to the respective preferential amounts to which they are entitled.
After payment of the full amount of the liquidating distribution to which they
are entitled, the Holders will not be entitled to any further participation in
any distribution of assets by the Corporation except for any Additional
Dividends. A consolidation, merger or statutory share exchange of the
Corporation with or into any other corporation or entity or a sale, whether for
cash, shares of stock, securities or properties, of all or substantially all or
any part of the assets of the Corporation shall not be deemed or construed to be
a liquidation, dissolution or winding up of the Corporation.

            4.    Redemption.  (a)  Shares of APS shall be redeemable by the
                  ----------
Corporation as provided below:

            (i) To the extent permitted under the 1940 Act and Maryland law,
upon giving a Notice of Redemption, the Corporation at its option may redeem
shares of any series of APS, in whole or in part, out of funds legally available
therefor, at the Optional Redemption Price per share, on any Dividend Payment
Date; provided that no share of APS may be redeemed at the option of the
Corporation during (A) the Initial Dividend Period with respect to a series of
shares or (B) a Non-Call Period to which such share is subject. In addition,
holders of APS which are redeemed shall be entitled to receive Additional
Dividends to the extent provided herein. The Corporation may not give a Notice
of Redemption relating to an optional redemption as described in this paragraph
4(a)(i) unless, at the time of giving such Notice of Redemption, the Corporation
has available Deposit Securities with maturity or tender dates not later than
the day preceding the applicable redemption date and having a value not less
than the amount due to Holders by reason of the redemption of their shares of
APS on such redemption date.

            (ii) The Corporation shall redeem, out of funds legally available
therefor, at the Mandatory Redemption Price per share, shares of APS to the
extent permitted under the 1940 Act and Maryland law, on a date fixed by the
Board of Directors, if the Corporation fails to maintain S&P Eligible Assets
with an aggregate Discounted Value equal to or greater than the APS Basic
Maintenance Amount as provided in paragraph 7(a) or to satisfy the 1940 Act APS
Asset Coverage as provided in paragraph 6 and such failure is not cured on or
before the APS Basic Maintenance Cure Date or the 1940 Act Cure Date (herein
collectively referred to as a "Cure Date"), as the case may be. In addition,
holders of APS so redeemed shall be entitled to receive Additional Dividends to
the extent provided herein. The number of shares of APS to be redeemed shall be
equal to the lesser of (i) the minimum number of shares of APS the redemption of
which, if deemed to have occurred immediately prior to the opening of business
on the Cure Date, together with all shares of other Preferred Stock subject to
redemption or retirement, would result in the Corporation having S&P Eligible
Assets with an aggregate Discounted Value equal to or greater than the APS Basic
Maintenance Amount or satisfaction of the 1940 Act APS Asset Coverage, as the
case may be, on such Cure Date (provided that, if there is no such minimum
number of shares of APS and shares of other Preferred Stock the redemption of
which would have such result, all shares of APS and shares of other Preferred
Stock then Outstanding shall be redeemed), and (ii) the maximum number of shares
of APS, together with all shares of other Preferred Stock subject to redemption
or retirement, that can be redeemed out of funds expected to be legally
available therefor on such redemption date. In determining the number of shares
of APS required to be redeemed in accordance with the foregoing, the Corporation
shall allocate the number required to be redeemed which would result in the
Corporation having S&P Eligible Assets with an aggregate Discounted Value equal
to or greater than the APS Basic Maintenance Amount or satisfaction of the 1940
Act APS Asset Coverage, as the case may be, pro rata among shares of APS of all
series, Other APS and other Preferred Stock subject to redemption pursuant to
provisions similar to those contained in this paragraph 4(a)(ii); provided that,
shares of APS which may not be redeemed at the option of the Corporation due to
the designation of a Non-Call Period applicable to such shares (A) will be
subject to mandatory redemption only to the extent that other shares are not
available to satisfy the number of shares required to be redeemed and (B) will
be selected for redemption in an ascending order of outstanding number of days
in the Non-Call Period (with shares with the lowest number of days to be
redeemed first) and by lot in the event of shares having an equal number of days
in such Non-Call Period. The Corporation shall effect such redemption on a
Business Day which is not later than 35 days after such Cure Date, except that
if the Corporation does not have funds legally available for the redemption of
all of the required number of shares of APS and shares of other Preferred Stock
which are subject to mandatory redemption or the Corporation otherwise is unable
to effect such redemption on or prior to 35 days after such Cure Date, the
Corporation shall redeem those shares of APS which it is unable to redeem on the
earliest practicable date on which it is able to effect such redemption out of
funds legally available therefor.

            (b) Notwithstanding any other provision of this paragraph 4, no
shares of APS may be redeemed pursuant to paragraph 4(a)(i) of these Articles
Supplementary (i) unless all dividends in arrears on all remaining outstanding
shares of Parity Shares shall have been or are being contemporaneously paid or
declared and set apart for payment and (ii) if redemption thereof would result
in the Corporation's failure to maintain S&P Eligible Assets with an aggregate
Discounted Value equal to or greater than the APS Basic Maintenance Amount. In
the event that less than all the outstanding shares of a series of APS are to be
redeemed and there is more than one Holder, the shares of that series of APS to
be redeemed shall be selected by lot or such other method as the Corporation
shall deem fair and equitable.

            (c) Whenever shares of APS are to be redeemed, the Corporation, not
less than 17 nor more than 30 days prior to the date fixed for redemption, shall
mail a notice ("Notice of Redemption") by first-class mail, postage prepaid, to
each Holder of shares of APS to be redeemed and to the Auction Agent. The
Corporation shall cause the Notice of Redemption to also be published in the
eastern and national editions of The Wall Street Journal. The Notice of
Redemption shall set forth (i) the redemption date, (ii) the amount of the
redemption price, (iii) the aggregate number of shares of APS of such series to
be redeemed, (iv) the place or places where shares of APS of such series are to
be surrendered for payment of the redemption price, (v) a statement that
dividends on the shares to be redeemed shall cease to accumulate on such
redemption date (except that holders may be entitled to Additional Dividends)
and (vi) the provision of these Articles Supplementary pursuant to which such
shares are being redeemed. No defect in the Notice of Redemption or in the
mailing or publication thereof shall affect the validity of the redemption
proceedings, except as required by applicable law.

            If the Notice of Redemption shall have been given as aforesaid and,
concurrently or thereafter, the Corporation shall have deposited in trust with
the Auction Agent, or segregated in an account at the Corporation's custodian
bank for the benefit of the Auction Agent, Deposit Securities (with a right of
substitution) having an aggregate Discounted Value (utilizing in the case of S&P
an S&P Exposure Period of 3 Business Days) equal to the redemption payment for
the shares of APS as to which such Notice of Redemption has been given with
irrevocable instructions and authority to pay the redemption price to the
Holders of such shares, then upon the date of such deposit or, if no such
deposit is made, then upon such date fixed for redemption (unless the
Corporation shall default in making the redemption payment), all rights of the
Holders of such shares as shareholders of the Corporation by reason of the
ownership of such shares will cease and terminate (except their right to receive
the redemption price in respect thereof and any Additional Dividends, but
without interest), and such shares shall no longer be deemed outstanding. The
Corporation shall be entitled to receive, from time to time, from the Auction
Agent the interest, if any, on such Deposit Securities deposited with it and the
Holders of any shares so redeemed shall have no claim to any of such interest.
In case the Holder of any shares so called for redemption shall not claim the
redemption payment for his shares within one year after the date of redemption,
the Auction Agent shall, upon demand, pay over to the Corporation such amount
remaining on deposit and the Auction Agent shall thereupon be relieved of all
responsibility to the Holder of such shares called for redemption and such
Holder thereafter shall look only to the Corporation for the redemption payment.

            5. Voting Rights. (a) General. Except as otherwise provided in the
Articles of Incorporation, each Holder of shares of APS shall be entitled to one
vote for each share held on each matter submitted to a vote of stockholders of
the Corporation, and the holders of outstanding shares of Preferred Stock,
including APS, and of shares of Common Stock shall vote together as a single
class; provided that, at any meeting of the stockholders of the Corporation held
for the election of directors, the holders of outstanding shares of Preferred
Stock, including APS, shall be entitled, as a class, to the exclusion of the
holders of all other securities and classes of capital stock of the Corporation,
to elect two directors of the Corporation. Subject to paragraph 5(b) hereof, the
holders of outstanding shares of capital stock of the Corporation, including the
holders of outstanding shares of Preferred Stock, including APS, voting as a
single class, shall elect the balance of the directors.

            (b) Right to Elect Majority of Board of Directors. During any period
in which any one or more of the conditions described below shall exist (such
period being referred to herein as a "Voting Period"), the number of directors
constituting the Board of Directors shall be automatically increased by the
smallest number that, when added to the two directors elected exclusively by the
holders of shares of Preferred Stock, would constitute a majority of the Board
of Directors as so increased by such smallest number; and the holders of shares
of Preferred Stock shall be entitled, voting separately as one class (to the
exclusion of the holders of all other securities and classes of shares of
capital stock of the Corporation), 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:

            (i) if at any time accumulated dividends (whether or not earned or
declared, and whether or not funds are then legally available in an amount
sufficient therefor) on the outstanding shares of APS 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

            (ii) if at any time holders of any other shares of Preferred Stock
are entitled to elect a majority of the directors of the Corporation under the
1940 Act. Upon the termination of a Voting Period, the voting rights described
in this paragraph 5(b) shall cease, subject always, however, to the reverting of
such voting rights in the Holders upon the further occurrence of any of the
events described in this paragraph 5(b)

            (c) Right to Vote with Respect to Certain Other Matters. So long as
any shares of APS are outstanding, the Corporation shall not, without the
affirmative vote of the holders of a majority of the shares of Preferred Stock
Outstanding at the time, voting separately as one class: (i) authorize, create
or issue any class or series of shares of capital stock ranking prior to the APS
or any other series of Preferred Stock with respect to payment of dividends or
the distribution of assets on liquidation, provided, however, that no vote is
required to authorize the issuance of another class or series of Preferred Stock
which is substantially identical in all respects to the shares of APS, if the
Corporation obtains written confirmation from S&P that the issuance of any
additional shares would not impair the rating then assigned by S&P to the APS;
or (ii) amend, alter or repeal the provisions of the Articles of Incorporation,
whether by merger, consolidation or otherwise, so as to adversely affect any of
the contract rights expressly set forth in the Articles of Incorporation of
holders of shares of APS or any other Preferred Stock. So long as any shares of
APS are outstanding, the Corporation may not, without the affirmative vote of
the holders of at least 66-2/3% of the shares of APS outstanding at the time,
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 Corporation is solvent and does not foresee becoming insolvent. To the
extent permitted under the 1940 Act, in the event shares of more than one series
of APS are outstanding, the Corporation shall not approve any of the actions set
forth in clause (i) or (ii) which adversely affects the contract rights
expressly set forth in the Articles of Incorporation of a Holder of shares of a
series of APS differently than those of a Holder of shares of any other series
of APS without the affirmative vote of the holders of at least a majority of the
shares of APS of each series adversely affected and outstanding at such time
(each such adversely affected series voting separately as a class). The
Corporation shall notify S&P ten Business Days prior to any such vote described
in clause (i) or (ii). Unless a higher percentage is provided for under the
Articles of Incorporation, the affirmative vote of the holders of a majority of
the outstanding shares of Preferred Stock, including APS, voting together as a
single class, will be required to approve any plan of reorganization (including
bankruptcy proceedings) adversely affecting such shares or any action requiring
a vote of security holders under Section 13(a) of the 1940 Act. The class vote
of holders of shares of Preferred Stock, including APS, described above will in
each case be in addition to a separate vote of the requisite percentage of
shares of Common Stock and shares of Preferred Stock, including APS, voting
together as a single class necessary to authorize the action in question.

            (d)   Voting Procedures.

            (i) As soon as practicable after the accrual of any right of the
holders of shares of Preferred Stock to elect additional directors as described
in paragraph 5(b) above, the Corporation shall call a special meeting of such
holders and instruct the Auction Agent to mail 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 Corporation fails to send such
notice to the Auction Agent or if the Corporation 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 held during a Voting Period, such Holders, voting together as a class
(to the exclusion of the holders of all other securities and classes of shares
of capital stock of the Corporation), shall be entitled to elect the number of
directors prescribed in paragraph 5(b) above. At any such meeting or adjournment
thereof in the absence of a quorum, a majority of such holders present in person
or by proxy shall have the power to adjourn the meeting without notice, other
than by an announcement at the meeting, to a date not more than 120 days after
the original record date.

            (ii) For purposes of determining any rights of the Holders to vote
on any matter or the number of shares required to constitute a quorum, whether
such right is created by these Articles Supplementary, by the other provisions
of the Articles of Incorporation, by statute or otherwise, a share of APS which
is not Outstanding shall not be counted.

            (iii) Subject to the provisions of paragraph 5(b) hereof, the terms
of office of all persons who are directors of the Corporation at the time of a
special meeting of Holders and holders of other Preferred Stock to elect
directors shall continue, notwithstanding the election at such meeting by the
Holders and such other holders of the number of directors that they are entitled
to elect, and the persons so elected by the Holders and such other holders,
together with the two incumbent directors elected by the Holders and such other
holders of Preferred Stock and the remaining incumbent directors elected by the
holders of the Common Stock and Preferred Stock, shall constitute the duly
elected directors of the Corporation.

            (iv) Simultaneously with the expiration of a Voting Period, the
terms of office of the additional directors elected by the Holders and holders
of other Preferred Stock pursuant to paragraph 5(b) above shall terminate, the
remaining directors shall constitute the directors of the Corporation and the
voting rights of the Holders and such other holders to elect additional
directors pursuant to paragraph 5(b) above shall cease, subject to the
provisions of the last sentence of paragraph 5(b).

            (v) Solely for purposes of the provisions of paragraphs 5 (b) and
(d) hereof, 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 August 20, 1999, the Corporation elected
to be subject to Section 3-804(b) of the MGCL, which vests in the Board the
power to fix the number of directors of the Corporation, to be effective upon
the occurrence of the conditions giving rise to a Voting Period, notwithstanding
any contrary provisions in the Corporation's Charter or Bylaws. Except as set
forth above, the Corporation has not elected to be subject to the provisions of
Title 3 Subtitle 8 of the MGCL.

            (e) Exclusive Remedy. Unless otherwise required by law, the Holders
of shares of APS shall not have any rights or preferences other than those
specifically set forth herein. The Holders of shares of APS shall have no
preemptive rights or rights to cumulative voting. In the event that the
Corporation fails to pay any dividends on the shares of APS, the exclusive
remedy of the Holders shall be the right to vote for directors pursuant to the
provisions of this paragraph 5.

            (f) Notification to S&P and Moody's. In the event a vote of Holders
of APS is required pursuant to the provisions of Section 13(a) of the 1940 Act,
the Corporation shall, not later than ten Business Days prior to the date on
which such vote is to be taken, notify S&P that such vote is to be taken and the
nature of the action with respect to which such vote is to be taken and, not
later than ten Business Days after the date on which such vote is taken, notify
S&P of the result of such vote.

            6.    1940 Act APS Asset Coverage.  The Corporation shall
                  ---------------------------
maintain, as of the last Business Day of each month in which any share of APS
is outstanding, the 1940 Act APS Asset Coverage.

            7. APS Basic Maintenance Amount. (a) The Corporation shall maintain,
on each Valuation Date, and shall verify to its satisfaction that it is
maintaining on such Valuation Date S&P Eligible Assets having an aggregate
Discounted Value equal to or greater than the APS Basic Maintenance Amount. Upon
any failure to maintain the required Discounted Value, the Corporation will use
its best efforts to alter the composition of its portfolio to retain a
Discounted Value at least equal to the APS Basic Maintenance Amount on or prior
to the APS Basic Maintenance Cure Date.

            (b) On or before 5:00 p.m., New York City time, on the third
Business Day after a Valuation Date on which the Corporation fails to satisfy
the APS Basic Maintenance Amount, the Corporation shall complete and deliver to
the Auction Agent, and S&P, a complete APS Basic Maintenance Report as of the
date of such failure, 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 Corporation mails to
the Auction Agent for delivery on the next Business Day the complete APS Basic
Maintenance Report. The Corporation will deliver an APS Basic Maintenance Report
to the Auction Agent and S&P, on or before 5:00 p.m., New York City time, on the
third Business Day after a Valuation Date on which the Corporation cures its
failure to maintain S&P Eligible Assets, with an aggregate Discounted Value
equal to or greater than the APS Basic Maintenance Amount or on which the
Corporation fails to maintain S&P Eligible Assets, with an aggregate Discounted
Value which exceeds the APS Basic Maintenance Amount by 5% or more. The
Corporation will also deliver an APS Basic Maintenance Report to the Auction
Agent and S&P as of each Quarterly Valuation Date on or before the third
Business Day after such date. Additionally, on or before 5:00 p.m., New York
City time, on the third Business Day after the first day of a Special Dividend
Period, the Corporation will deliver an APS Basic Maintenance Report to S&P and
the Auction Agent. The Corporation shall also provide S&P with an APS Basic
Maintenance Report when specifically requested by S&P. A failure by the
Corporation to deliver an APS Basic Maintenance Report under this paragraph 7(b)
shall be deemed to be delivery of an APS Basic Maintenance Report indicating the
Discounted Value for S&P Eligible Assets of the Corporation is less than the APS
Basic Maintenance Amount, as of the relevant Valuation Date.

            (c) Within ten Business Days after the date of delivery of an APS
Basic Maintenance Report in accordance with paragraph 7(b) above relating to a
Quarterly Valuation Date, the Independent Accountant will confirm in writing to
the Auction Agent and S&P (i) the mathematical accuracy of the calculations
reflected in such Report (and in any other APS Basic Maintenance Report,
randomly selected by the Independent Accountant, that was delivered by the
Corporation during the quarter ending on such Quarterly Valuation Date), (ii)
that, in such Report (and in such randomly selected Report), the Corporation
correctly determined the assets of the Corporation which constitute S&P Eligible
Assets at such Quarterly Valuation Date in accordance with these Articles
Supplementary, (iii) that, in such Report (and in such randomly selected
Report), the Corporation determined whether the Corporation had, at such
Quarterly Valuation Date (and at the Valuation Date addressed in such randomly
selected Report) in accordance with these Articles Supplementary, S&P Eligible
Assets of an aggregate Discounted Value at least equal to the APS Basic
Maintenance Amount, (iv) with respect to the S&P ratings on Municipal
Obligations, the issuer name, issue size and coupon rate listed in such Report,
that the Independent Accountant has requested that S&P verify such information
and the Independent Accountant shall provide a listing in its letter of any
differences, (v) 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 Moody's (in the event such information is not
verified by Moody's, the Independent Accountant will inquire of Moody's what
such information is, and provide a listing in its letter of any differences),
(vi) 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
Corporation's assets to the Corporation for purposes of valuing securities in
the Corporation's portfolio, the Independent Accountant has traced the price
used in such Report to the bid or mean price listed in such Report as provided
to the Corporation 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 (vii) with respect to such confirmation to
Moody's, that the Corporation has satisfied the requirements of paragraph 8(b)
of these Articles Supplementary (such confirmation is herein called the
"Accountant's Confirmation").

            (d) Within ten Business Days after the date of delivery to the
Auction Agent and S&P of an APS Basic Maintenance Report in accordance with
paragraph 7(b) above relating to any Valuation Date on which the Corporation
failed to maintain S&P Eligible Assets with an aggregate Discounted Value equal
to or greater than the APS Basic Maintenance Amount, and relating to the APS
Basic Maintenance Cure Date with respect to such failure, the Independent
Accountant will provide to the Auction Agent and S&P an Accountant's
Confirmation as to such APS Basic Maintenance Report.

            (e) If any Accountant's Confirmation delivered pursuant to
subparagraph (c) or (d) of this paragraph 7 shows that an error was made in the
APS Basic Maintenance Report for a particular Valuation Date for which such
Accountant's Confirmation as required to be delivered, or shows that a lower
aggregate Discounted Value for the aggregate of all S&P Eligible Assets of the
Corporation was determined by the Independent Accountant, the calculation or
determination made by such Independent Accountant shall be final and conclusive
and shall be binding on the Corporation, and the Corporation shall accordingly
amend and deliver the APS Basic Maintenance Report to the Auction Agent and S&P
promptly following receipt by the Corporation of such Accountant's Confirmation.

            (f) On or before 5:00 p.m., New York City time, on the first
Business Day after the Date of Original Issue of the shares of APS, the
Corporation will complete and deliver to S&P an APS Basic Maintenance Report as
of the close of business on such Date of Original Issue. Within five Business
Days of such Date of Original Issue, the Independent Accountant will confirm in
writing to S&P (i) the mathematical accuracy of the calculations reflected in
such Report and (ii) that the aggregate Discounted Value of S&P Eligible Assets
reflected thereon equals or exceeds the APS Basic Maintenance Amount reflected
thereon. Also, on or before 5:00 p.m., New York City time, on the first Business
Day after shares of Common Stock are repurchased by the Corporation, the
Corporation will complete and deliver to S&P an APS Basic Maintenance Report as
of the close of business on such date that Common Stock is repurchased.

            8.    Certain Other Restrictions And Requirements.
                  -------------------------------------------

            (a) For so long as any shares of APS are rated by S&P, the
Corporation will not purchase or sell futures contracts, write, purchase or sell
options on futures contracts or write put options (except covered put options)
or call options (except covered call options) on portfolio securities unless it
receives written confirmation from S&P that engaging in such transactions will
not impair the ratings then assigned to the shares of APS by S&P, except that
the Corporation may purchase or sell futures contracts based on the Bond Buyer
Municipal Bond Index (the "Municipal Index") or United States Treasury Bonds or
Notes ("Treasury Bonds") and write, purchase or sell put and call options on
such contracts (collectively, "S&P Hedging Transactions"), subject to the
following limitations:

            (i) the Corporation will not engage in any S&P Hedging Transaction
based on the Municipal Index (other than transactions which terminate a futures
contract or option held by the Corporation by the Corporation's taking an
opposite position thereto ("Closing Transactions")), which would cause the
Corporation at the time of such transaction to own or have sold the least of (A)
more than 1,000 outstanding futures contracts based on the Municipal Index, (B)
outstanding futures contracts based on the Municipal Index exceeding in number
25% of the quotient of the Market Value of the Corporation's total assets
divided by $1,000 or (C) outstanding futures contracts based on the Municipal
Index exceeding in number 10% of the average number of daily traded futures
contracts based on the Municipal Index in the 30 days preceding the time of
effecting such transaction as reported by The Wall Street Journal;

            (ii) the Corporation will not engage in any S&P Hedging Transaction
based on Treasury Bonds (other than Closing Transactions) which would cause the
Corporation at the time of such transaction to own or have sold the lesser of
(A) outstanding futures contracts based on Treasury Bonds and on the Municipal
Index exceeding in number 25% of the quotient of the Market Value of the
Corporation's total assets divided by $100,000 ($200,000 in the case of the
two-year United States Treasury Note) or (B) outstanding futures contracts based
on Treasury Bonds exceeding in number 10% of the average number of daily traded
futures contracts based on Treasury Bonds in the 30 days preceding the time of
effecting such transaction as reported by The Wall Street Journal;

            (iii) the Corporation will engage in Closing Transactions to close
out any outstanding futures contract which the Corporation owns or has sold or
any outstanding option thereon owned by the Corporation in the event (A) the
Corporation does not have S&P Eligible Assets with an aggregate Discounted Value
equal to or greater than the APS Basic Maintenance Amount on two consecutive
Valuation Dates and (B) the Corporation is required to pay Variation Margin on
the second such Valuation Date;

            (iv) the Corporation will engage in a Closing Transaction to close
out any outstanding futures contract or option thereon in the month prior to the
delivery month under the terms of such futures contract or option thereon unless
the Corporation holds the securities deliverable under such terms; and

            (v) when the Corporation writes a futures contract or option
thereon, it will either maintain an amount of cash, cash equivalents or high
grade (rated A or better by S&P), fixed-income securities in a segregated
account with the Corporation's custodian, so that the amount so segregated plus
the amount of Initial Margin and Variation Margin held in the account of or on
behalf of the Corporation's broker with respect to such futures contract or
option equals the Market Value of the futures contract or option, or, in the
event the Corporation writes a futures contract or option thereon which requires
delivery of an underlying security, it shall hold such underlying security in
its portfolio.

            For purposes of determining whether the Corporation has S&P Eligible
Assets with a Discounted Value that equals or exceeds the APS Basic Maintenance
Amount, the Discounted Value of cash or securities held for the payment of
Initial Margin or Variation Margin shall be zero and the aggregate Discounted
Value of S&P Eligible Assets shall be reduced by an amount equal to (i) 30% of
the aggregate settlement value, as marked to market, of any outstanding futures
contracts based on the Municipal Index which are owned by the Corporation plus
(ii) 25% of the aggregate settlement value, as marked to market, of any
outstanding futures contracts based on Treasury Bonds which contracts are owned
by the Corporation.

            (b) For so long as shares of APS are rated by S&P, the Corporation
will not, unless it has received written confirmation from S&P that such action
would not impair the rating then assigned to shares of APS by S&P (i) borrow
money except for the purpose of clearing transactions in portfolio securities
(which borrowings shall under any circumstances be limited to the lesser of $10
million and an amount equal to 5% of the Market Value of the Corporation's
assets at the time of such borrowings and which borrowings shall be repaid
within 60 days and not be extended or renewed and shall not cause the aggregate
Discounted Value of S&P Eligible Assets to be less than the APS Basic
Maintenance Amount), (ii) engage in short sales of securities, (iii) lend any
securities, (iv) issue any class or series of stock ranking prior to or on a
parity with the APS with respect to the payment of dividends or the distribution
of assets upon dissolution, liquidation or winding up of the Corporation, (v)
reissue any APS previously purchased or redeemed by the Corporation, (vi) merge
or consolidate into or with any other Corporation or entity, (vii) change the
Pricing Service or (viii) engage in reverse repurchase agreements.

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

            10.   Auction Procedures.
                  ------------------

            (a) Certain definitions. As used in this paragraph 10, the following
terms shall have the following meanings, unless the context otherwise requires:

            (i) "APS" means the shares of auction preferred stock being
auctioned pursuant to this paragraph 10.

            (ii) "Auction Date" means the first Business Day preceding the first
day of a Dividend Period.

            (iii) "Available APS" has the meaning specified in paragraph
10(d)(i) below.

            (iv)  "Bid" has the meaning specified in paragraph 10(b)(i)
below.

            (v)   "Bidder" has the meaning specified in paragraph 10(b)(i)
below.

            (vi)  "Hold Order" has the meaning specified in paragraph
10(b)(i) below.

            (vii) "Maximum Applicable Rate" for any Dividend Period will be the
Applicable Percentage of the Reference Rate. The Applicable Percentage will be
determined based on (i) the credit rating assigned on such date to such shares
by S&P (or if S&P shall not make such rating available, the equivalent of such
rating by a Substitute Rating Agency) and (ii) whether the Corporation has
provided notification to the Auction Agent prior to the Auction establishing the
Applicable Rate for any dividend pursuant to paragraph 2(f) hereof that net
capital gains or other taxable income will be included in such dividend on
shares of APS as follows:

                                      Applicable         Applicable
                                     Percentage Of      Percentage Of
                                   Reference Rate --   Reference Rate --
            S&P Credit Ratings    ------------------- -----------------
                                    No Notification     Notification

          AA- or higher........          110%               150%
          A- to A+.............          125                160
          BBB- to BBB+.........          150                250
          Below BBB-...........          200                275

------------------------------------------------------------------------------
            The Corporation shall take all reasonable action necessary to enable
S&P to provide a rating for each series of APS. If S&P shall not make such a
rating available, the underwriter or its affiliates and successors, after
consultation with the Corporation, shall select a nationally recognized
statistical rating organization to act as a Substitute Rating Agency.

            (viii)      "Order" has the meaning specified in paragraph
10(b)(i) below.

            (ix)  "Sell Order" has the meaning specified in paragraph
10(b)(i) below.

            (x) "Submission Deadline" means 1:00 P.M., New York City time, on
any Auction Date or such other time on any Auction Date as may be specified by
the Auction Agent from time to time as the time by which each Broker-Dealer must
submit to the Auction Agent in writing all Orders obtained by it for the Auction
to be conducted on such Auction Date.

            (xi)  "Submitted Bid" has the meaning specified in paragraph
10(d)(i) below.

            (xii) "Submitted Hold Order" has the meaning specified in
paragraph 10(d)(i) below.

            (xiii)      "Submitted Order" has the meaning specified in
paragraph 10(d)(i) below.

            (xiv) "Submitted Sell Order" has the meaning specified in
paragraph 10(d)(i) below.

            (xv)  "Sufficient Clearing Bids" has the meaning specified in
paragraph 10(d)(i) below.

            (xvi) "Winning Bid Rate" has the meaning specified in paragraph
10(d)(i) below.

            (b)   Orders by Beneficial Owners, Potential Beneficial Owners,
Existing Holders and Potential Holders.

            (i) Unless otherwise permitted by the Corporation, Beneficial Owners
and Potential Beneficial Owners may only participate in Auctions through their
Broker-Dealers. Broker-Dealers will submit the Orders of their respective
customers who are Beneficial Owners and Potential Beneficial Owners to the
Auction Agent, designating themselves as Existing Holders in respect of shares
subject to Orders submitted or deemed submitted to them by Beneficial Owners and
as Potential Holders in respect of shares subject to Orders submitted to them by
Potential Beneficial Owners. A Broker-Dealer may also hold shares of APS in its
own account as a Beneficial Owner. A Broker-Dealer may thus submit Orders to the
Auction Agent as a Beneficial Owner or a Potential Beneficial Owner and
therefore participate in an Auction as an Existing Holder or Potential Holder on
behalf of both itself and its customers. On or prior to the Submission Deadline
on each Auction Date:

            (A) each Beneficial Owner may submit to its Broker-Dealer
information as to:

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

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

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

            (B) each Broker-Dealer, using a list of Potential Beneficial Owners
that shall be maintained in good faith for the purpose of conducting a
competitive Auction, shall contact Potential Beneficial Owners, including
Persons that are not Beneficial Owners, on such list to determine the number of
Outstanding shares, if any, of APS which each such Potential Beneficial Owner
offers to purchase, provided that the Applicable Rate for the next succeeding
Dividend Period shall not be less than the rate per annum specified by such
Potential Beneficial Owner.

            For the purposes hereof, the communication by a Beneficial Owner or
Potential Beneficial Owner to a Broker-Dealer, or the communication by a
Broker-Dealer acting for its own account to the Auction Agent, of information
referred to in clause (A) or (B) of this paragraph 10(b)(i) is hereinafter
referred to as an "Order" and each Beneficial Owner and each Potential
Beneficial Owner placing an Order, including a Broker-Dealer acting in such
capacity for its own account, is hereinafter referred to as a "Bidder"; an Order
containing the information referred to in clause (A)(1) of this paragraph
10(b)(i) is hereinafter referred to as a "Hold Order"; an Order containing the
information referred to in clause (A)(2) or (B) of this paragraph 10(b)(i) is
hereinafter referred to as a "Bid"; and an Order containing the information
referred to in clause (A)(3) of this paragraph 10(b)(i) is hereinafter referred
to as a "Sell Order." Inasmuch as a Broker-Dealer participates in an Auction as
an Existing Holder or a Potential Holder only to represent the interests of a
Beneficial Owner or Potential Beneficial Owner, whether it be its customers or
itself, all discussion herein relating to the consequences of an Auction for
Existing Holders and Potential Holders also applies to the underlying beneficial
ownership interests represented.

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

                  (1) the number of Outstanding shares of APS specified in such
      Bid if the Applicable Rate determined on such Auction Date shall be less
      than the rate per annum specified in such Bid; or (1) such number or a
      lesser number of Outstanding shares of APS to be determined as set forth
      in paragraph 10(e)(i)(D) if the Applicable Rate determined on such Auction
      Date shall be equal to the rate per annum specified therein; or

                  (2) a lesser number of Outstanding shares of APS to be
      determined as set forth in paragraph 10(e)(ii)(C) if such specified rate
      per annum shall be higher than the Maximum Applicable Rate and Sufficient
      Clearing Bids do not exist.

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

                  (1)   the number of Outstanding shares of APS specified in
      such Sell Order; or

                  (2) such number or a lesser number of Outstanding shares of
      APS to be determined as set forth in paragraph 10(e)(ii)(C) if Sufficient
      Clearing Bids do not exist.

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

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

                  (2) such number or a lesser number of Outstanding shares of
      APS to be determined as set forth in paragraph 10(e)(i)(E) if the
      Applicable Rate determined on such Auction Date shall be equal to the rate
      per annum specified therein.

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

            (i) Each Broker-Dealer shall submit in writing or through the
Auction Agent's Auction Processing System to the Auction Agent prior to the
Submission Deadline on each Auction Date all Orders obtained by such
Broker-Dealer, designating itself (unless otherwise permitted by the
Corporation) as an Existing Holder in respect of shares subject to Orders
submitted or deemed submitted to it by Beneficial Owners and as a Potential
Holder in respect of shares subject to Orders submitted to it by Potential
Beneficial Owners, and specifying with respect to each Order:

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

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

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

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

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

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

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

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

            (iii) If an Order or Orders covering all of the Outstanding shares
of APS held by an Existing Holder are not submitted to the Auction Agent prior
to the Submission Deadline, the Auction Agent shall deem a Hold Order (in the
case of an Auction relating to a Dividend Period which is not a Special Dividend
Period) and a Sell Order (in the case of an Auction relating to a Special
Dividend Period) to have been submitted on behalf of such Existing Holder
covering the number of Outstanding shares of APS held by such Existing Holder
and not subject to Orders submitted to the Auction Agent.

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

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

            (B) any Bids submitted on behalf of such Existing Holder shall be
considered valid, in the ascending order of their respective rates per annum if
more than one Bid is submitted on behalf of such Existing Holder, up to and
including the excess of the number of Outstanding shares of APS held by such
Existing Holder over the number of shares of APS subject to any Hold Order
referred to in paragraph 10(c)(iv)(A) above (and if more than one Bid submitted
on behalf of such Existing Holder specifies the same rate per annum and together
they cover more than the remaining number of shares that can be the subject of
valid Bids after application of paragraph 10(c)(iv)(A) above and of the
foregoing portion of this paragraph 10(c)(iv)(B) to any Bid or Bids specifying a
lower rate or rates per annum, the number of shares subject to each of such Bids
shall be reduced pro rata so that such Bids, in the aggregate, cover exactly
such remaining number of shares); and the number of shares, if any, subject to
Bids not valid under this paragraph 10(c)(iv)(B) shall be treated as the subject
of a Bid by a Potential Holder; and

            (C) any Sell Order shall be considered valid up to and including the
excess of the number of Outstanding shares of APS held by such Existing Holder
over the number of shares of APS subject to Hold Orders referred to in paragraph
10(c)(iv)(A) and Bids referred to in paragraph 10(c)(iv)(B); provided that if
more than one Sell Order is submitted on behalf of any Existing Holder and the
number of shares of APS subject to such Sell Orders is greater than such excess,
the number of shares of APS subject to each of such Sell Orders shall be reduced
pro rata so that such Sell Orders, in the aggregate, cover exactly the number of
shares of APS equal to such excess.

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

            (vi) Any Order submitted by a Beneficial Owner as 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.

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

            (i) Not earlier than the Submission Deadline on each Auction Date,
the Auction Agent shall assemble all Orders submitted or deemed submitted to it
by the Broker-Dealers (each such Order as submitted or deemed submitted by a
Broker-Dealer being hereinafter referred to 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 shall determine:

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

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

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

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

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

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

                  (2) each Submitted Bid from Potential Holders specifying the
      Winning Bid Rate and all other Submitted Bids from Potential Holders
      specifying lower rates per annum were accepted, thus entitling the
      Potential Holders to purchase the shares of APS that are the subject of
      such Submitted Bids, would result in the number of shares subject to all
      Submitted Bids specifying the Winning Bid Rate or a lower rate per annum
      being at least equal to the Available APS.

            (ii) Promptly after the Auction Agent has made the determinations
pursuant to paragraph 10(d)(i), the Auction Agent shall advise the Corporation
of the Maximum Applicable Rate and, based on such determinations, the Applicable
Rate for the next succeeding Dividend Period as follows:

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

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

            (C) if all of the Outstanding shares of APS are the subject of
Submitted Hold Orders, that the Dividend Period next succeeding the Auction
shall automatically be the same length as the immediately preceding Dividend
Period and the Applicable Rate for the next succeeding Dividend Period shall be
equal to 40% of the Reference Rate (or 60% of such rate if the Corporation has
provided notification to the Auction Agent prior to the Auction establishing the
Applicable Rate for any dividend pursuant to paragraph 2(f) hereof that net
capital gains or other taxable income will be included in such dividend on
shares of APS) on the date of the Auction.

            (e) Acceptance and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation of Shares. Based on the determinations made pursuant to
paragraph 10(d)(i), the Submitted Bids and Submitted Sell Orders shall be
accepted or rejected and the Auction Agent shall take such other action as set
forth below:

            (i) If Sufficient Clearing Bids have been made, subject to the
provisions of paragraph 10(e)(iii) and paragraph 10(e)(iv), Submitted Bids and
Submitted Sell Orders shall be accepted or rejected in the following order of
priority and all other Submitted Bids shall be rejected:

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

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

            (C) the Submitted Bid of each of the Potential Holders specifying
any rate per annum that is lower than the Winning Bid Rate shall be accepted;

            (D) the Submitted Bid of each of the Existing Holders specifying a
rate per annum that is equal to the Winning Bid Rate shall be rejected, thus
entitling each such Existing Holder to continue to hold the Outstanding shares
of APS that are the subject of such Submitted Bid, unless the number of
Outstanding shares of APS subject to all such Submitted Bids shall be greater
than the number of Outstanding shares of APS ("Remaining Shares") equal to the
excess of the Available APS over the number of Outstanding shares of APS subject
to Submitted Bids described in paragraph 10(e)(i)(B) and paragraph 10(e)(i)(C),
in which event the Submitted Bids of each such Existing Holder shall be
accepted, and each such Existing Holder shall be required to sell Outstanding
shares of APS, but only in an amount equal to the difference between (1) the
number of Outstanding shares of APS then held by such Existing Holder subject to
such Submitted Bid and (2) the number of shares of APS obtained by multiplying
(x) the number of Remaining Shares by (y) a fraction the numerator of which
shall be the number of Outstanding shares of APS held by such Existing Holder
subject to such Submitted Bid and the denominator of which shall be the sum of
the number of Outstanding shares of APS subject to such Submitted Bids made by
all such Existing Holders that specified a rate per annum equal to the Winning
Bid Rate; and

            (E) the Submitted Bid of each of the Potential Holders specifying a
rate per annum that is equal to the Winning Bid Rate shall be accepted but only
in an amount equal to the number of Outstanding shares of APS obtained by
multiplying (x) the difference between the Available APS and the number of
Outstanding shares of APS subject to Submitted Bids described in paragraph
10(e)(i)(B), paragraph 10(e)(i)(C) and paragraph 10(e)(i)(D) by (y) a fraction
the numerator of which shall be the number of Outstanding shares of APS subject
to such Submitted Bid and the denominator of which shall be the sum of the
number of Outstanding shares of APS subject to such Submitted Bids made by all
such Potential Holders that specified rates per annum equal to the Winning Bid
Rate.

            (ii) If Sufficient Clearing Bids have not been made (other than
because all of the Outstanding shares of APS are subject to Submitted Hold
Orders), subject to the provisions of paragraph 10(e)(iii), Submitted Orders
shall be accepted or rejected as follows in the following order of priority and
all other Submitted Bids shall be rejected:

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

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

            (C) the Submitted Bids of each Existing Holder specifying any rate
per annum that is higher than the Maximum Applicable Rate shall be accepted and
the Submitted Sell Orders of each Existing Holder shall be accepted, in both
cases only in an amount equal to the difference between (1) the number of
Outstanding shares of APS then held by such Existing Holder subject to such
Submitted Bid or Submitted Sell Order and (2) the number of shares of APS
obtained by multiplying (x) the difference between the Available APS and the
aggregate number of Outstanding shares of APS subject to Submitted Bids
described in paragraph 10(e)(ii)(A) and paragraph 10(e)(ii)(B) by (y) a fraction
the numerator of which shall be the number of Outstanding shares of APS held by
such Existing Holder subject to such Submitted Bid or Submitted Sell Order and
the denominator of which shall be the number of Outstanding shares of APS
subject to all such Submitted Bids and Submitted Sell Orders.

            (iii) If, as a result of the procedures described in paragraph
10(e)(i) or paragraph 10(e)(ii), any Existing Holder would be entitled or
required to sell, or any Potential Holder would be entitled or required to
purchase, a fraction of a share of APS on any Auction Date, the Auction Agent
shall, in such manner as in its sole discretion it shall determine, round up or
down the number of shares of APS to be purchased or sold by any Existing Holder
or Potential Holder on such Auction Date so that each Outstanding share of APS
purchased or sold by each Existing Holder or Potential Holder on such Auction
Date shall be a whole share of APS.

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

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

            (f) Miscellaneous. The Corporation may interpret the provisions of
this paragraph 10 to resolve any inconsistency or ambiguity, remedy any formal
defect or make any other change or modification that does not substantially
adversely affect the rights of Beneficial Owners of APS. A Beneficial Owner or
an Existing Holder (A) may sell, transfer or otherwise dispose of shares of APS
only pursuant to a Bid or Sell Order in accordance with the procedures described
in this paragraph 10 or to or through a Broker-Dealer, provided that in the case
of all transfers other than pursuant to Auctions such Beneficial Owner or
Existing Holder, its Broker-Dealer, if applicable, or its Agent Member advises
the Auction Agent of such transfer and (B) except as otherwise required by law,
shall have the ownership of the shares of APS held by it maintained in book
entry form by the Securities Depository in the account of its Agent Member,
which in turn will maintain records of such Beneficial Owner's beneficial
ownership. Neither the Corporation nor any Affiliate shall submit an Order in
any Auction. Any Beneficial Owner that is an Affiliate shall not sell, transfer
or otherwise dispose of shares of APS to any Person other than the Corporation.
All of the Outstanding shares of APS of a series shall be represented by a
single certificate registered in the name of the nominee of the Securities
Depository unless otherwise required by law or unless there is no Securities
Depository. If there is no Securities Depository, at the Corporation's option
and upon its receipt of such documents as it deems appropriate, any shares of
APS may be registered in the Stock Register in the name of the Beneficial Owner
thereof and such Beneficial Owner thereupon will be entitled to receive
certificates therefor and required to deliver certificates therefor upon
transfer or exchange thereof.

            11. Securities Depository; Stock Certificates. (a) If there is a
Securities Depository, one certificate for all of the shares of APS of each
series shall be issued to the Securities Depository and registered in the name
of the Securities Depository or its nominee. Additional certificates may be
issued as necessary to represent shares of APS. All such certificates shall bear
a legend to the effect that such certificates are issued subject to the
provisions restricting the transfer of shares of APS contained in these Article
Supplementary. Unless the Corporation shall have elected, during a Non-Payment
Period, to waive this requirement, the Corporation will also issue stop-transfer
instructions to the Auction Agent for the shares of APS. Except as provided in
paragraph (b) below, the Securities Depository or its nominee will be the
Holder, and no Beneficial Owner shall receive certificates representing its
ownership interest in such shares.

            (b) If the Applicable Rate applicable to all shares of APS of a
series shall be the Non-Payment Period Rate or there is no Securities
Depository, the Corporation may at its option issue one or more new certificates
with respect to such shares (without the legend referred to in paragraph 11(a))
registered in the names of the Beneficial Owners or their nominees and rescind
the stop-transfer instructions referred to in paragraph 11(a) with respect to
such shares.


<PAGE>


            IN WITNESS WHEREOF, DREYFUS STRATEGIC MUNICIPAL BOND FUND, INC., has
caused these presents to be signed in its name and on its behalf by its Vice
President and witnessed by its Assistant Secretary as of the 22nd day of
September, 1999, and its Vice President acknowledges that these Articles
Supplementary are the act and deed of Dreyfus Strategic Municipal Bond Fund,
Inc., and, under the penalties of perjury, that the matters and facts set forth
herein with respect to authorization and approval are true in all material
respects to the best of her knowledge, information and belief.

                                    DREYFUS STRATEGIC MUNICIPAL
                                     BOND FUND, INC.



                                    By: /s/ Stephanie D.
                                        -----------------
                                    Pierce
                                    -----------------------------
                                       Stephanie D. Pierce
                                       Vice President, Assistant Secretary
                                         and Assistant Treasurer

WITNESS:

/s/ Christopher J. Kelley
---------------------------------
Christopher J. Kelley
Assistant Secretary

</TEXT>
</DOCUMENT>
