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


                                                                  Exhibit a.3


                          INTERMEDIATE MUNI FUND, INC.

        FORM OF ARTICLES SUPPLEMENTARY CREATING AND FIXING THE RIGHTS OF
           MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED STOCK, SERIES M
                              ("PREFERRED SHARES")

<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

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


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

<PAGE>

<TABLE>
<CAPTION>

<S>  <C>      <C>      <C>                                                                                                 <C>
              (f)      NO PREEMPTIVE RIGHTS OR CUMULATIVE VOTING ......................................................... 35
              (g)      VOTING FOR DIRECTORS SOLE REMEDY FOR FUND'S FAILURE TO PAY DIVIDENDS .............................. 35
              (h)      HOLDERS ENTITLED TO VOTE .......................................................................... 35
     6.       1940 ACT PREFERRED SHARES ASSET COVERAGE ................................................................... 36
     7.       PREFERRED SHARES BASIC MAINTENANCE AMOUNT .................................................................. 36
     8.       [RESERVED] ................................................................................................. 38
     9.       RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS .......................................................... 38
              (a)      DIVIDENDS ON SHARES OTHER THAN PREFERRED SHARES ................................................... 38
              (b)      DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO COMMON SHARES UNDER THE 1940 ACT ................ 39
              (c)      OTHER RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS ........................................... 39
     10.      [RESERVED] ................................................................................................. 39
     11.      REDEMPTION ................................................................................................. 40
              (a)      OPTIONAL REDEMPTION ............................................................................... 40
              (b)      MANDATORY REDEMPTION .............................................................................. 41
              (c)      NOTICE OF REDEMPTION .............................................................................. 42
              (d)      NO REDEMPTION UNDER CERTAIN CIRCUMSTANCES ......................................................... 42
              (e)      ABSENCE OF FUNDS AVAILABLE FOR REDEMPTION ......................................................... 42
              (f)      AUCTION AGENT AS DIRECTOR OF REDEMPTION PAYMENTS BY FUND .......................................... 43
              (g)      SHARES FOR WHICH NOTICE OF REDEMPTION HAS BEEN GIVEN ARE NO LONGER OUTSTANDING .................... 43
              (h)      COMPLIANCE WITH APPLICABLE LAW .................................................................... 43
              (i)      ONLY WHOLE SHARES OF PREFERRED SHARES MAY BE REDEEMED ............................................. 43
     12.      LIQUIDATION RIGHTS ......................................................................................... 44
              (a)      RANKING ........................................................................................... 44
              (b)      DISTRIBUTIONS UPON LIQUIDATION .................................................................... 44
              (c)      PRO RATA DISTRIBUTIONS ............................................................................ 44
              (d)      RIGHTS OF JUNIOR SHARES ........................................................................... 44
              (e)      CERTAIN EVENTS NOT CONSTITUTING LIQUIDATION ....................................................... 45
     13.      FUTURES AND OPTIONS TRANSACTIONS: FORWARD COMMITMENTS ...................................................... 45
     14.      MISCELLANEOUS .............................................................................................. 51
              (a)      [RESERVED] ........................................................................................ 51
              (b)      NO FRACTIONAL SHARES .............................................................................. 51
              (c)      STATUS OF SHARES OF PREFERRED SHARES REDEEMED, EXCHANGED OR OTHERWISE ACQUIRED BY THE FUND ........ 51
              (d)      BOARD MAY RESOLVE AMBIGUITIES ..................................................................... 51
              (e)      HEADINGS NOT DETERMINATIVE ........................................................................ 51
              (f)      NOTICES ........................................................................................... 51
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

PART II
     1.       ORDERS ..................................................................................................... 51
     2.       SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT .................................................... 53
     3.       DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE AND APPLICABLE RATE ............................ 55
     4.       ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL ORDERS AND ALLOCATION OF SHARES .............. 57
     5.       NOTIFICATION OF ALLOCATIONS ................................................................................ 60
     6.       AUCTION AGENT .............................................................................................. 60
     7.       TRANSFER OF SHARES OF PREFERRED SHARES ..................................................................... 61
     8.       GLOBAL CERTIFICATE ......................................................................................... 61
</TABLE>

<PAGE>



                  INTERMEDIATE MUNI FUND, INC., a Maryland corporation (the
"Fund"), certifies to the State Department of Assessments and Taxation of
Maryland that:

                  FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Fund by Article V of the Fund's Articles of Incorporation,
as heretofore amended (which, as hereafter restated, amended or supplemented
from time to time are, together with these Articles Supplementary, herein called
the "Charter"), the Board of Directors has, by resolution, reclassified from the
unissued Common Shares of the Fund and authorized the issuance of 2,000 shares
of Municipal Auction Rate Cumulative Preferred Stock, Series M, par value $.001
per share, liquidation preference $25,000 per share.

                  SECOND: The preferences, rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and conditions of
redemption of the Municipal Auction Rate Cumulative Preferred Stock, Series M,
are as follows:

                                   DESIGNATION

         2,000 shares of Preferred Stock, par value $.001 per share, liquidation
preference $25,000 per share, are hereby designated Municipal Auction Rate
Cumulative Preferred Stock, Series M ("Preferred Shares"). Each share of the
Preferred Shares shall have an Applicable Rate for its Initial Rate Period
equal to ___% per annum and an initial Dividend Payment Date of February 5,
2002; and each share of the Preferred Shares shall have such other preferences,
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms and conditions of redemption, in addition to those required by
applicable law, as are set forth in Part I and Part II of these Articles
Supplementary. Subject to the provisions of Section 10(c) of Part I hereof, the
Board of Directors of the Fund may, in the future, reclassify additional shares
of the Fund's stock as Preferred Shares, with the same preferences, rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption and other terms herein described, except that
the Applicable Rate for the Initial Rate Period, its initial Payment Date
and any other changes in the terms herein set forth shall be as set forth in the
Articles Supplementary reclassifying such shares as Preferred Shares.

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

                                   DEFINITIONS

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

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

                                      - 5 -

<PAGE>


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

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

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

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

                  (e) "ALL HOLD ORDER RATE" shall have the meaning specified in
subparagraph (b)(iii) of Section 3 of Part 1 of these Articles Supplementary.


                                      - 6 -

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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



                                      - 7 -

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                    (dd) "DISCOUNTED VALUE" as of any Valuation Date, shall
mean, (i) with respect to a Fitch Eligible Asset or Moody's Eligible Asset that
is not currently callable as of such Valuation Date at the option of the issuer
thereof, the lesser of the Market Value or par value thereof divided by the
Fitch Discount Factor for a Fitch Eligible Asset or Moody's Discount Factor for
a Moody's Eligible Asset, or (ii) with respect to a Fitch Eligible Asset or
Moody's Eligible Asset that is currently callable as of such Valuation Date at
the option of the issuer thereof, the quotient of (1) the lesser of the Market
Value or next call price thereof,

                                      - 8 -

<PAGE>

including any call premium, divided by (2) the Fitch Discount Factor for Fitch
Eligible Assets or the Moody's Discount Factor for Moody's Eligible Assets.

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

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

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

                    (hh) "EXPOSURE PERIOD" shall mean the period commencing on a
given Valuation Date and ending 56 days thereafter.

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

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

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

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

                                     - 9 -

<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
RATING CATEGORY
-------------------------------------------------------------------------------------------------------------
EXPOSURE PERIOD                 AAA*        AA*        A*          BBB*          F1**        UNRATED***
<S>                            <C>        <C>        <C>         <C>           <C>           <C>
-------------------------------------------------------------------------------------------------------------
7 weeks .....................    151%       159%        166%         173%         136%           225%
-------------------------------------------------------------------------------------------------------------
8 weeks or less but
greater than 7 weeks ........    154%       161%        168%         176%         137%           231%
-------------------------------------------------------------------------------------------------------------
9 weeks or less
but greater than 8 weeks ....    158%       163%        170%         177%         138%           240%
-------------------------------------------------------------------------------------------------------------
</TABLE>


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


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

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

                  Notwithstanding the foregoing, (i) the Fitch Discount Factor
for short-term Municipal Obligations will be 115%, so long as such Municipal
Obligations are rated at least F1 by Fitch (or, if not rated by Fitch, rated
MIG-1, VMIG-1 or P-1 by Moody's or at least A-1+ or SP-1+ by S&P) and mature or
have a demand feature at par exercisable in 30 days or less, and (ii) no Fitch
Discount Factor will be applied to cash or to Receivables for Municipal
Obligations Sold.

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

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

                                     - 10 -

<PAGE>

may comprise no more than 12% of total Fitch Eligible Assets; such Other
Securities, if any, together with any Municipal Obligations issued by issuers
located within the same state or territory and rated BBB by Fitch, may comprise
no more than 20% of total Fitch Eligible Assets; such Other Securities,
BBB-rated Municipal Obligations, if any, together with any Municipal Obligations
issued by issuers located within the same state or territory and rated A by
Fitch, may comprise no more than 40% of total Fitch Eligible Assets; and such
Other Securities and BBB and A-rated Municipal Obligations, if any, together
with any Municipal Obligations issued by issuers located within the same state
or territory and rated AA by Fitch, may comprise no more than 60% of total Fitch
Eligible Assets. For purposes of applying the foregoing requirements and
applying the applicable Fitch Discount Factor, if a Municipal Obligation is not
rated by Fitch but is rated by Moody's and S&P, such Municipal Obligation
(excluding short-term Municipal Obligations) will be deemed to have the Fitch
rating which is the lower of the Moody's and S&P rating. If a Municipal
Obligation is not rated by Fitch but is rated by Moody's or S&P, such Municipal
Obligation (excluding short-term Municipal Obligations) will be deemed to have
such rating. Eligible Assets shall be calculated without including cash; and
Municipal Obligations rated F1 by Fitch or, if not rated by Fitch, rated MIG-1,
VMIG-1 or P-1 by Moody's; or, if not rated by Moody's, rated A-1+/AA or SP-1+/AA
by S&P; shall be considered to have a long-term rating of A. When the Fund sells
a Municipal Obligation and agrees to repurchase such Municipal Obligation at a
future date, such Municipal Obligation shall be valued at its Discounted Value
for purposes of determining Fitch Eligible Assets, and the amount of the
repurchase price of such Municipal Obligation shall be included as a liability
for purposes of calculating the Preferred Shares Basic Maintenance Amount. When
the Fund purchases a Fitch Eligible Asset and agrees to sell it at a future
date, such Fitch Eligible Asset shall be valued at the amount of cash to be
received by the Fund upon such future date, provided that the counterparty to
the transaction has a long-term debt rating of at least A by Fitch and the
transaction has a term of no more than 30 days, otherwise, such Fitch Eligible
Asset shall be valued at the Discounted Value of such Fitch Eligible Asset.

                  Notwithstanding the foregoing, an asset will not be considered
a Fitch Eligible Asset for purposes of determining the Preferred Shares Basic
Maintenance Amount to the extent it is (i) subject to any material lien,
mortgage, pledge, security interest or security agreement of any kind
(collectively, "Liens"), except for (a) Liens which are being contested in good
faith by appropriate proceedings and which Fitch (if Fitch is then rating the
Preferred Shares) has indicated to the Fund will not affect the status of such
asset as a Fitch Eligible Asset, (b) Liens for taxes that are not then due and
payable or that can be paid thereafter without penalty, (c) Liens to secure
payment for services rendered or cash advanced to the Fund by the Fund's
investment adviser, custodian or the Auction Agent, (d) Liens by virtue of any
repurchase agreement, and (e) Liens in connection with any futures margin
account; or (ii) deposited irrevocably for the payment of any liabilities.

                  (nn) "FITCH HEDGING TRANSACTION" shall have the meaning
specified in paragraph 13(b)(1) of Part I of these Articles Supplementary.

                  (oo) "FITCH VOLATILITY FACTOR" shall mean, as of any
Valuation Date, (i) in the case of any Minimum Rate Period, any Special Rate
Period of 28 Rate Period Days or fewer, or any Special Rate Period of 57 Rate
Period Days or more, a multiplicative factor equal

                                     - 11 -

<PAGE>


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

FEDERAL TAX RATE INCREASE            FITCH VOLATILITY FACTOR
            5%                                 295%
           10%                                 317%
           15%                                 341%
           20%                                 369%
           25%                                 400%
           30%                                 436%
           35%                                 477%
           40%                                 525%

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

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

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

                                     - 12 -

<PAGE>

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

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

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

                    (vv) "INITIAL RATE PERIOD" shall be the period from and
including the Date of Original Issue to but excluding February 5, 2002.

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

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

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

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

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

                                     - 13 -

<PAGE>

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

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

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

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

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

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

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

                                     - 14 -

<PAGE>

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

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

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



<TABLE>
<CAPTION>

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

                  -------------------
                  *     Moody's rating.
                  **    Municipal Obligations not rated by Moody's but rated at
least BBB by S&P.

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

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

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

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

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

                                     - 15 -

<PAGE>

                  (ggg) "MOODY'S ELIGIBLE ASSET" shall mean cash, Receivables
for Municipal Obligations Sold or a Municipal Obligation that (i) pays interest
in cash, (ii) does not have its Moody's rating, as applicable, suspended by
Moody's, and (iii) is part of an issue of Municipal Obligations of at least
$10,000,000. Municipal Obligations issued by any one issuer and rated BBB or
lower by S&P, Ba or B by Moody's or not rated by S&P and Moody's (for the
purposes of this definition only, "Other Securities") may comprise no more than
4% of total Moody's Eligible Assets; such Other Securities, if any, together
with any Municipal Obligations issued by the same issuer and rated Baa by
Moody's or A by S&P, may comprise no more than 6% of total Moody's Eligible
Assets; such Other Securities, Baa and A-rated Municipal Obligations, if any,
together with any Municipal Obligations issued by the same issuer and rated A by
Moody's or AA by S&P, may comprise no more than 10% of total Moody's Eligible
Assets; and such Other Securities, Baa, A and AA-rated Municipal Obligations, if
any, together with any Municipal Obligations issued by the same issuer and rated
Aa by Moody's or AAA by S&P, may comprise no more than 20% of total Moody's
Eligible Assets. For purposes of the foregoing sentence, any Municipal
Obligation backed by the guaranty, letter of credit or insurance issued by a
third party shall be deemed to be issued by such third party if the issuance of
such third party credit is the sole determinant of the rating on such Municipal
Obligation. Other Securities issued by issuers located within a single state or
territory may comprise no more than 12% of total Moody's Eligible Assets; such
Other Securities, if any, together with any Municipal Obligations issued by
issuers located within a single state or territory and rated Baa by Moody's or A
by S&P, may comprise no more than 20% of total Moody's Eligible Assets; such
Other Securities, Baa and A-rated Municipal Obligations, if any, together with
any Municipal Obligations issued by issuers located within a single state or
territory and rated A by Moody's or AA by S&P, may comprise no more than 40% of
total Moody's Eligible Assets; and such Other Securities, Baa, A and AA-rated
Municipal Obligations, if any, together with any Municipal Obligations issued by
issuers located within a single state or territory and rated Aa by Moody's or
AAA by S&P, may comprise no more than 60% of total Moody's Eligible Assets. For
purposes of applying the foregoing requirements and applying the applicable
Moody's Discount Factor, if a Municipal Obligation is not rated by Moody's but
is rated by S&P, such Municipal Obligation (excluding short-term Municipal
Obligations) will be deemed to have the Moody's rating which is one full rating
category lower than its S&P rating; a Municipal Obligation shall be deemed to be
rated BBB by S&P if rated BBB-, BBB or BBB+ by S&P; Moody's Eligible Assets
should be calculated without including cash; and Municipal Obligations rated
MIG-1, VMIG-1 or P-1 or, if not rated by Moody's, rated A1+/AA or SP1+/AA by
S&P, shall be considered to have a long-term rating of A. When the Fund sells a
Municipal Obligation and agrees to repurchase such Municipal Obligation at a
future date, such Municipal Obligation shall be valued at its Discounted Value
for purposes of determining Moody's Eligible Assets and the amount of the
repurchase price of such Municipal Obligation shall be included as a liability
for purposes of calculating the Preferred Shares Basic Maintenance Amount. When
the Fund purchases a Moody's Eligible Asset and agrees to sell it at a future
date, such Moody's Eligible Asset shall be valued at the amount of cash to be
received by the Fund upon such future date, provided that the counterparty to
the transaction has a long-term debt rating of at least A2 from Moody's and the
transaction has a term of no more than 30 days; otherwise, such Moody's Eligible
Asset shall be valued at the Discounted Value of such Moody's Eligible Asset.

                  Notwithstanding the foregoing, an asset will not be considered
a Moody's Eligible Asset for purposes of determining the Preferred Shares Basic
Maintenance Amount to the extent

                                     - 16 -

<PAGE>

it is (i) subject to any Liens, except for (a) Liens which are being contested
in good faith by appropriate proceedings and which Moody's (if Moody's is then
rating the Preferred Shares) has indicated to the Fund will not affect the
status of such asset as a Moody's Eligible Asset, (b) Liens for taxes that are
not then due and payable or that can be paid thereafter without penalty, (c)
Liens to secure payment for services rendered or cash advanced to the Fund by
the Fund's investment adviser, custodian or the Auction Agent, (d) Liens by
virtue of any repurchase agreement, and (e) Liens in connection with any futures
margin account; or (ii) deposited irrevocably for the payment of any
liabilities.


                    (hhh) "MOODY'S HEDGING TRANSACTION" shall have the meaning
specified in paragraph (a)(i) of Section 13 of Part I of these Articles
Supplementary.

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

       FEDERAL                                     VOLATILITY
       TAX RATE                                      FACTOR
       INCREASE                                      ------
       --------
          5%                                          295%
         10%                                          317%
         15%                                          341%
         20%                                          369%
         25%                                          400%
         30%                                          436%
         35%                                          477%
         40%                                          525%

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

                                     - 17 -

<PAGE>

                    (kkk) "MUNICIPAL OBLIGATIONS" shall mean any and all
instruments that pay interest or make other distributions that are exempt from
regular Federal income tax and in which the Fund may invest consistent with the
investment policies and restrictions contained in its registration statement on
Form N-2 (333-73414) ("Registration Statement"), as the same may be amended from
time to time.

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

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

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

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

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

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

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

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

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

                                     - 18 -

<PAGE>

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

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

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

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

                                     - 19 -

<PAGE>

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

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

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

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

                    (bbbb) "QUARTERLY VALUATION DATE" shall mean the last
Business Day of each March, June, September and December of each year,
commencing on March 28, 2002.

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

<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------
            CREDIT RATING                       APPLICABLE PERCENTAGE-         APPLICABLE PERCENTAGE-
                                                  NO NOTIFICATION                    NOTIFICATION
-----------------------------------------
    MOODY'S               FITCH
<S>              <C>                       <C>                             <C>
 Aa3 or higher         AA- or higher                    110%                            150%
---------------  ------------------------  ------------------------------  ------------------------------
   A3 to A1              A- to A+                       125%                            160%
---------------  ------------------------  ------------------------------  ------------------------------
</TABLE>


                                     - 20 -

<PAGE>



    Baa3 to Baa1     BBB- to BBB+           150%             250%
  ---------------  ----------------   ---------------  ----------------
     Ba3 to Ba1       BB- to BB+            200%             275%
  ---------------  ----------------   ---------------  ----------------
     Below Ba3        Below BB-             250%             300%
  ---------------  ----------------   ---------------  ----------------

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

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

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

                    (ffff) "RECEIVABLES FOR MUNICIPAL OBLIGATIONS SOLD" shall
mean for purposes of calculation of Moody's Eligible Assets and Fitch Eligible
Assets as of any Valuation Date, no more than the aggregate of the following:
(i) the book value of receivables for Municipal Obligations sold as of or prior
to such Valuation Date if such receivables are due within five business days of
such Valuation Date, and if the trades which generated such receivables are (x)
settled through clearing house firms with respect to which the Fund has received
prior written authorization from Moody's (if Moody's is then rating the
Preferred Shares) and Fitch (if Fitch is then rating the Preferred Shares) or
(y) with counterparties having a Moody's long-term debt rating of at least Baa3
(if Moody's is then rating the Preferred Shares) and a Fitch long-term debt
rating of BBB (if Fitch is then rating the Preferred Shares); and (ii) the
Discounted Value of Municipal Obligations sold as of or prior to such Valuation
Date which generated receivables, if such receivables are due within five
business days of such Valuation Date but do not comply with either of the
conditions specified in (i) above.

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

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

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

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

                    (kkkk) "SECURITIES DEPOSITORY" shall mean The Depository
Trust Company and its successors and assigns or any other securities depository
selected by the Fund

                                     - 21 -

<PAGE>

which agrees to follow the procedures required to be followed by such securities
depository in connection with the Preferred Shares.

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

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

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

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

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

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

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

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

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

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


                                     - 22 -

<PAGE>

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

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

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

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

                    (zzzz) "TAXABLE EQUIVALENT OF THE SHORT-TERM MUNICIPAL BOND
RATE," on any date for any Rate Period of 28 Rate Period Days or fewer, shall
mean 90% of the quotient of (A) the per annum rate expressed on an interest
equivalent basis equal to the Kenny S&P 30 day High Grade Index or any successor
index (the "Kenny Index") (provided, however, that any such successor index must
be approved by Moody's (if Moody's is then rating the Preferred Shares) and
Fitch (if Fitch is then rating the Preferred Shares)), made available for the
Business Day immediately preceding such date but in any event not later than
8:30 A.M., New York City time, on such date by Kenny S&P Evaluation Services or
any successor thereto, based upon 30-day yield evaluations at par of short-term
bonds the interest on which is excludable for regular Federal income tax
purposes under the Code of "high grade" component issuers selected by Kenny S&P
Evaluation Services or any such successor from time to time in its discretion,
which component issuers shall include, without limitation, issuers of general
obligation bonds, but shall exclude any bonds the interest on which constitutes
an item of tax preference under Section 57 (a)(5) of the Code, or successor
provisions, for purposes of the "alternative minimum tax," divided by (B) 1.00
minus the maximum marginal regular Federal individual income tax rate applicable
to ordinary income or the maximum marginal regular Federal corporate income tax
rate applicable to ordinary income (in each case expressed as a decimal),
whichever is greater; provided, however, that if the Kenny Index is not made so
available by 8:30 A.M., New York City time, on such date by Kenny S&P Evaluation
Services or any successor, the Taxable Equivalent of the Short-Term Municipal
Bond Rate shall mean the quotient of (A) the per annum rate expressed on an
interest equivalent basis equal to the most recent Kenny Index so made available
for any preceding Business Day, divided by (B) 1.00 minus the maximum marginal
regular Federal individual income tax rate applicable to ordinary income or the
maximum marginal regular Federal corporate income tax rate applicable to
ordinary income (in each case expressed as a decimal), whichever is greater.

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

                    (bbbbb) "TREASURY BILL RATE," on any date for any Rate
Period, shall mean (i) the bond equivalent yield, calculated in accordance with
prevailing industry convention, of the rate on the most recently auctioned
Treasury Bill with a remaining maturity closest to the length of such Rate
Period, as quoted in The Wall Street Journal on such date for the Business

                                     - 23 -

<PAGE>

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

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

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

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

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

                                     - 24 -

<PAGE>

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

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

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

                                     PART I

                    1. NUMBER OF AUTHORIZED SHARES. The number of authorized
shares constituting the Preferred Shares is 2,000.


                    2. DIVIDENDS.

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

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

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

                    (d) DIVIDEND PAYMENT DATES AND ADJUSTMENT THEREOF. Dividends
shall be payable for the Initial Rate Period on February 5, 2002, and, if
declared by the Board of Directors, on each seventh day thereafter (each date
being a "Dividend Payment Date"); provided, however, that:

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

                                     - 25 -

<PAGE>

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

                         (e) DIVIDEND RATES AND CALCULATION OF DIVIDENDS.

                         (i) DIVIDEND RATES. The dividend rate on shares of
Preferred Shares during the period from and after the Date of Original Issue to
and including the last day of the Initial Rate Period shall be equal to the rate
per annum set forth under "Designation". For each Subsequent Rate Period
thereafter, the dividend rate on Preferred Shares shall be equal to the rate per
annum that results from an Auction on the Auction Date next preceding such
Subsequent Rate Period; provided, however, that if:

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

                         (B) any Failure to Deposit shall have occurred during
any Rate Period thereof (other than any Special Rate Period consisting of more
than 364 Rate Period Days or any Rate Period succeeding any Special Rate Period
consisting of more than 364 Rate Period Days during which a Failure to Deposit
occurred that has not been cured), but, prior to 12:00 Noon, New York City time,
on the third Business Day next succeeding the date on which such Failure to
Deposit occurred, such Failure to Deposit shall have been cured in accordance
with paragraph (f) of this Section 2 and the Fund shall have paid to the Auction
Agent a late charge ("Late Charge") equal to the sum of (1) if such Failure to
Deposit consisted of the failure timely to pay to the Auction Agent the full
amount of dividends with respect to any Dividend Period, an amount computed by
multiplying (x) 200% of the Reference Rate for the Rate Period during which such
Failure to Deposit occurs on the Dividend Payment Date for such Dividend Period
by (y) a fraction, the numerator of which shall be the number of days for which
such Failure to Deposit has not been cured in accordance with paragraph (f) of
this Section 2 (including the day such Failure to Deposit occurs and excluding
the day such Failure to Deposit is cured) and the denominator of which shall be
360, and applying the rate obtained against the aggregate Liquidation Preference
of the outstanding Preferred Shares and (2) if such Failure to Deposit consisted
of the failure timely to pay to the Auction Agent the Redemption Price of the
shares, if any, for which Notice of Redemption has been mailed by the Fund
pursuant to paragraph (c) of Section 11 of this Part I, an amount computed by
multiplying (x) 200% of the Reference Rate for the Rate Period during which such
Failure to Deposit occurs on the redemption date by (y) a fraction, the
numerator of which shall be the number of days for which such Failure to Deposit
is not cured in accordance with paragraph (f) of this Section 2 (including the
day such Failure to Deposit occurs and excluding the day such Failure to Deposit
is cured) and the denominator of which shall be 360, and applying the rate
obtained against the aggregate Liquidation Preference

                                     - 26 -

<PAGE>

of the outstanding Preferred Shares to be redeemed, no Auction will be held for
the Subsequent Rate Period and the dividend rate for such Subsequent Rate Period
will be the Maximum Rate on the Auction Date for such Subsequent Rate Period;

                         (C) any Failure to Deposit shall have occurred during
any Rate Period (other than any Special Rate Period consisting of more than 364
Rate Period Days or any Rate Period succeeding any Special Rate Period
consisting of more than 364 Rate Period Days during which a Failure to Deposit
occurred that has not been cured), and, prior to 12:00 Noon, New York City time,
on the third Business Day next succeeding the date on which such Failure to
Deposit occurred, such Failure to Deposit shall not have been cured in
accordance with paragraph (f) of this Section 2 or the Fund shall not have paid
the applicable Late Charge to the Auction Agent, no Auction will be held in
respect of Preferred Shares for the first Subsequent Rate Period thereof
thereafter (or for any Rate Period thereof thereafter to and including the Rate
Period during which (1) such Failure to Deposit is cured in accordance with
paragraph (f) of this Section 2 and (2) the Fund pays the applicable Late Charge
to the Auction Agent (the condition set forth in this clause (2) to apply only
in the event Moody's is rating such shares at the time the Fund cures such
Failure to Deposit), in each case no later than 12:00 Noon, New York City time,
on the fourth Business Day prior to the end of such Rate Period), and the
dividend rate for Preferred Shares for each such Subsequent Rate Period shall be
a rate per annum equal to the Maximum Rate on the Auction Date for such
Subsequent Rate Period (but with the prevailing rating for shares of Preferred
Shares, for purposes of determining such Maximum Rate, being deemed to be "Below
"ba3"/BB2"); or

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

                                     - 27 -

<PAGE>


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

                         (f)  CURING A FAILURE TO DEPOSIT. A Failure to Deposit
shall have been cured (if such Failure to Deposit is not solely due to the
willful failure of the Fund to make the required payment to the Auction Agent)
with respect to any Rate Period if, within the respective time periods described
in subparagraph (e)(i) of this Section 2, the Fund shall have paid to the
Auction Agent (A) all accumulated and unpaid dividends on Preferred Shares and
(B) without duplication, the Redemption Price for shares, if any, for which
Notice of Redemption has been mailed by the Fund pursuant to paragraph (c) of
Section 11 of Part I of these Articles Supplementary; provided, however, that
the foregoing clause (B) shall not apply to the Fund's failure to pay the
Redemption Price in respect of shares of Preferred Shares when the related
Redemption Notice provides that redemption of such shares is subject to one or
more conditions precedent and any such condition precedent shall not have been
satisfied at the time or times and in the manner specified in such Notice of
Redemption.

                         (g)  DIVIDEND PAYMENTS BY FUND TO AUCTION AGENT. The
Fund shall pay to the Auction Agent, not later than 12:00 Noon, New York City
time, on the Business Day next preceding each Dividend Payment Date for shares
of Preferred Shares, an aggregate amount of funds available on the next Business
Day in The City of New York, New York, equal to the dividends to be paid to all
Holders of shares on such Dividend Payment Date.

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

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

                         (j)  DIVIDENDS CREDITED AGAINST EARLIEST ACCUMULATED
BUT UNPAID DIVIDENDS. Any dividend payment made on shares of Preferred Shares
shall first be credited against the earliest accumulated but unpaid dividends
due with respect to such shares. Dividends in arrears for any past Dividend
Period may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to the Holders as their names appear on

                                     - 28 -

<PAGE>

the record books of the Fund on such date, not exceeding 15 days preceding the
payment date thereof, as may be fixed by the Board of Directors.

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

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

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

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

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

                         4.  DESIGNATION OF SPECIAL RATE PERIODS.

                         (a) LENGTH OF AND PRECONDITIONS FOR SPECIAL RATE
PERIOD. The Fund, at its option, may designate any succeeding Subsequent Rate
Period of shares of Preferred Shares as a Special Rate Period consisting of a
specified number of Rate Period Days evenly divisible by seven subject to
adjustment as provided in paragraph (b) of this Section 4. A designation of a
Special Rate Period shall be effective only if

                                     - 29 -

<PAGE>

(A) notice thereof shall have been given in accordance with paragraph (c) and
subparagraph (d)(i) of this Section 4, (B) an Auction shall have been held on
the Auction Date immediately preceding the first day of such proposed Special
Rate Period and Sufficient Clearing Bids shall have existed in such Auction, and
(C) if any Notice of Redemption shall have been mailed by the Fund pursuant to
paragraph (c) of Section 11 of this Part I with respect to any shares of
Preferred Shares, the Redemption Price with respect to such shares shall have
been deposited with the Auction Agent. In the event the Fund wishes to designate
any succeeding Subsequent Rate Period for shares of Preferred Shares as a
Special Rate Period consisting of more than 28 Rate Period Days, the Fund shall
notify Fitch (if Fitch is then rating the Preferred Shares) and Moody's (if
Moody's is then rating the Preferred Shares) in advance of the commencement of
such Subsequent Rate Period that the Fund wishes to designate such Subsequent
Rate Period as a Special Rate Period and shall provide Fitch (if Fitch is then
rating the Preferred Shares) and Moody's (if Moody's is then rating the
Preferred Shares) with such documents as either may request.

                         (b) ADJUSTMENT OF LENGTH OF SPECIAL RATE PERIOD. In the
event the Fund wishes to designate a Subsequent Rate Period as a Special Rate
Period, but the day following what would otherwise be the last day of such
Special Rate Period is not (a) a Tuesday that is a Business Day, then the Fund
shall designate such Subsequent Rate Period as a Special Rate Period consisting
of the period commencing on the first day following the end of the immediately
preceding Rate Period and ending (a) on the first Monday that is followed by a
Tuesday that is a Business Day preceding what would otherwise be such last day.

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

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

                                     - 30 -

<PAGE>

     (i) a notice ("Notice of Special Rate Period") stating (A) that the Fund
has determined to designate the next succeeding Rate Period of Preferred Shares
as a Special Rate Period, specifying the same and the first day thereof, (B) the
Auction Date immediately prior to the first day of such Special Rate Period, (C)
that such Special Rate Period shall not commence if (1) an Auction for shares of
Preferred Shares shall not be held on such Auction Date for any reason or (2) an
Auction for shares of Preferred Shares shall be held on such Auction Date but
Sufficient Clearing Bids for shares of Preferred Shares shall not exist in such
Auction, (D) the scheduled Dividend Payment Dates for shares of Preferred Shares
during such Special Rate Period and (E) the Special Redemption Provisions, if
any, applicable to shares of Preferred Shares in respect of such Special Rate
Period, such notice to be accompanied by a Preferred Shares Basic Maintenance
Report showing that, as of the third Business Day next preceding such proposed
Special Rate Period, Moody's Eligible Assets (if Moody's is then rating the
Preferred Shares) and Fitch Eligible Assets (if Fitch is then rating the
Preferred Shares) each have an aggregate Discounted Value at least equal to the
Preferred Shares Basic Maintenance Amount as of such Business Day (assuming for
purposes of the foregoing calculation that (a) the Maximum Rate is the Maximum
Rate on such Business Day as if such Business Day were the Auction Date for the
proposed Special Rate Period, and (b) the Moody's Discount Factors applicable to
Moody's Eligible Assets and the Fitch Discount Factors applicable to Fitch
Eligible Assets are determined by reference to the first Exposure Period longer
than the Exposure Period then applicable to the Fund, as described in the
definitions of Moody's Discount Factor and Fitch Discount Factor herein); or

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

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

     5. VOTING RIGHTS.

     (a) ONE VOTE PER SHARE OF PREFERRED SHARES. Except as otherwise provided in
the Charter or as otherwise required by law, (i) each Holder of shares of
Preferred Shares shall be entitled to one vote for each share of Preferred
Shares held by such


                                     - 31 -

<PAGE>

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

     (b)  VOTING FOR ADDITIONAL DIRECTORS.

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

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

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

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

     (ii) NOTICE OF SPECIAL MEETING. As soon as practicable after the accrual of
any right of the holders of preferred stock, including Preferred Shares, to
elect additional Directors as described in subparagraph (b)(i) of this Section
5, the Fund shall notify the Auction Agent and the Auction Agent shall call a
special meeting of such holders, by mailing a notice of such special meeting to
such holders, such meeting to be held not less than 10 nor more than 20 days
after the date of mailing of such notice. If the Fund fails to send such notice
to the Auction Agent or if the Auction Agent does not call such a special
meeting, it may be

                                     - 32 -

<PAGE>

called by any such holder on like notice. The record date for determining the
holders entitled to notice of and to vote at such special meeting shall be the
close of business on the fifth Business Day preceding the day on which such
notice is mailed. At any such special meeting and at each meeting of holders of
preferred stock, including Preferred Shares, held during a Voting Period at
which Directors are to be elected, such holders, voting together as a class (to
the exclusion of the holders of all other securities and classes of shares of
stock of the Fund), shall be entitled to elect the number of Directors
prescribed in subparagraph (b)(i) of this Section 5 on a one-vote-per-share
basis.

     (iii) TERMS OF OFFICE OF EXISTING DIRECTORS. The terms of office of all
persons who are Directors of the Fund at the time of a special meeting of
Holders and holders of other shares of preferred stock of the Fund to elect
Directors shall continue, notwithstanding the election at such meeting by the
Holders and such other holders of the number of Directors that they are entitled
to elect, and the persons so elected by the Holders and such other holders,
together with the two incumbent Directors elected by the Holders and such other
holders of shares of preferred stock of the Fund and the remaining incumbent
Directors elected by the holders of the Common Shares and preferred stock,
including Preferred Shares, shall constitute the duly elected Directors of the
Fund.


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

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

     (c)  HOLDERS OF PREFERRED SHARES TO VOTE ON CERTAIN OTHER MATTERS.

     (i)  INCREASES IN CAPITALIZATION. So long as any shares of Preferred Shares
are outstanding, the Fund shall not, without the affirmative vote or consent of
the Holders of at least a majority of the shares of Preferred Shares outstanding
at the time, in person or by proxy, either in writing or at a meeting, voting as
a separate class: (a) authorize, create or issue any class or series of shares
ranking prior to or on a parity with shares of Preferred Shares with respect to
the payment of dividends or the distribution of assets upon dissolution,
liquidation or winding up of the affairs of the Fund, or authorize, create or
issue additional shares of any series

                                     - 33 -

<PAGE>

of Preferred Shares (except that, notwithstanding the foregoing, but subject to
the provisions of paragraph (c) of Section 13 of this Part I, the Board of
Directors, without the vote or consent of the Holders of Preferred Shares, may
from time to time authorize and create, and the Fund may from time to time issue
additional shares of, any series of Preferred Shares, or classes or series of
preferred shares ranking on a parity with shares of Preferred Shares with
respect to the payment of dividends and the distribution of assets upon
dissolution, liquidation or winding up of the affairs of the Fund if the Fund
receives written confirmation from Moody's (if Moody's is then rating the
Preferred Shares) and Fitch (if Fitch is then rating the Preferred Shares) that
such authorization, creation and issuance would not impair the rating then
assigned by such rating agency to the Preferred Shares; provided, however, that
if Moody's or Fitch is not then rating the shares of Preferred Shares, the
aggregate liquidation preference of all Preferred Shares of the Fund outstanding
after any such issuance, exclusive of accumulated and unpaid dividends, may not
exceed $40,000,000) or (b) amend, alter or repeal the provisions of the Charter,
or these Articles Supplementary, whether by merger, consolidation or otherwise,
so as to affect any preference, right or power of such shares of Preferred
Shares or the Holders thereof; provided, however, that (i) none of the actions
permitted by the exception to (a) above will be deemed to affect such
preferences, rights or powers, (ii) a division or split of a share of Preferred
Shares will be deemed to affect such preferences, rights or powers only if the
terms of such division adversely affect the Holders of shares of Preferred
Shares and (iii) the authorization, creation and issuance of classes or series
of shares ranking junior to shares of Preferred Shares with respect to the
payment of dividends and the distribution of assets upon dissolution,
liquidation or winding up of the affairs of the Fund, will be deemed to affect
such preferences, rights or powers only if Moody's or Fitch is then rating
shares of Preferred Shares and such issuance would, at the time thereof, cause
the Fund not to satisfy the 1940 Act Preferred Shares Asset Coverage or the
Preferred Shares Basic Maintenance Amount. So long as any shares of Preferred
Shares are outstanding, the Fund shall not, without the affirmative vote or
consent of the Holders of at least a majority of the shares of Preferred Shares
outstanding at the time, in person or by proxy, either in writing or at a
meeting, voting as a separate class, file a voluntary application for relief
under Federal bankruptcy law or any similar application under state law for so
long as the Fund is solvent and does not foresee becoming insolvent.

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

     (d) BOARD MAY TAKE CERTAIN ACTIONS WITHOUT SHAREHOLDER APPROVAL. The Board
of Directors may, without the vote or consent of the


                                     - 34 -

<PAGE>

Holders of the Preferred Shares, or any other stockholder of the Fund, from time
to time amend, alter or repeal any or all of the definitions of the terms listed
below, or any provision of the Articles Supplementary viewed by Moody's or Fitch
as a predicate for any such definition, and any such amendment, alteration or
repeal will not be deemed to affect the preferences, rights or powers of the
Preferred Shares or the Holders thereof, provided the Board of Directors
receives written confirmation from Moody's (if Moody's is then rating the
Preferred Shares) and Fitch (if Fitch is then rating the Preferred Shares), that
any such amendment, alteration or repeal would not impair the ratings then
assigned to the Preferred Shares by Moody's (if Moody's is then rating the
Preferred Shares) or Fitch (if Fitch is then rating the Preferred Shares):

<TABLE>
<CAPTION>

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

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

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

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

     (h) HOLDERS ENTITLED TO VOTE. For purposes of determining any rights of the
Holders to vote on any matter, whether such right is created by these Articles
Supplementary, by the other provisions of the Charter, by statute or otherwise,
no Holder shall be entitled to vote any share of Preferred Shares and no share
of Preferred Shares shall be deemed to be "outstanding" for the purpose of
voting or determining the number of shares required to constitute a quorum if,
prior to or concurrently with the time of determination of shares entitled to
vote or shares deemed outstanding for quorum purposes, as the case may be, the
requisite Notice of Redemption with respect to such shares shall have been
mailed as provided in paragraph (c) of Section 11 of this Part I and the
Redemption Price for the redemption of such

                                     - 35 -

<PAGE>

shares shall have been deposited in trust with the Auction Agent for that
purpose. No share of Preferred Shares held by the Fund or any affiliate of the
Fund (except for shares held by a Broker-Dealer that is an affiliate of the Fund
for the account of its customers) shall have any voting rights or be deemed to
be outstanding for voting or other purposes.

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

     7. PREFERRED SHARES BASIC MAINTENANCE AMOUNT.

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

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

     (c) Within ten Business Days after the date of delivery of a Preferred
Shares Basic Maintenance Report in accordance with paragraph (b) of this Section
7 relating to a Quarterly Valuation Date that is also an Annual Valuation Date,
the Fund shall cause the Independent Accountant to confirm in writing to Fitch
(if Fitch is then rating the shares of Preferred Shares), Moody's (if Moody's is
then rating the shares of Preferred Shares) and the Auction Agent (if either
Fitch or Moody's is then rating the shares of Preferred Shares) (i) the
mathematical accuracy of the calculations reflected in such Report (and in any
other Preferred

                                     - 36 -

<PAGE>

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

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

     (e) If any Accountant's Confirmation delivered pursuant to paragraph (c) or
(d) of this Section 7 shows that an error was made in the Preferred Shares Basic
Maintenance Report for a particular Valuation Date for which such Accountant's
Confirmation was required to be delivered, or shows that a lower aggregate
Discounted Value for the aggregate of all Fitch Eligible Assets (if Fitch is
then rating the Preferred Shares) or Moody's Eligible Assets (if

                                     - 37 -

<PAGE>

Moody's is then rating the Preferred Shares), as the case may be, of the Fund
was determined by the Independent Accountant, the calculation or determination
made by such Independent Accountant shall be final and conclusive and shall be
binding on the Fund, and the Fund shall accordingly amend and deliver the
Preferred Shares Basic Maintenance Report to Fitch (if Fitch is then rating the
Preferred Shares), Moody's (if Moody's is then rating the Preferred Shares) and
the Auction Agent (if either Fitch or Moody's is then rating the Preferred
Shares) promptly following receipt by the Fund of such Accountant's
Confirmation.

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

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

     8. [RESERVED].

     9. RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS.

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

                                     - 38 -

<PAGE>

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

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

     10. [RESERVED]


                                     - 39 -

<PAGE>

     11. REDEMPTION.

     (a) OPTIONAL REDEMPTION.

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

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

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

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

     (v) The Fund may not on any date mail a Notice of Redemption pursuant to
paragraph (c) of this Section 11 in respect of a redemption contemplated to be
effected pursuant to this paragraph (a) unless on such date (a) the Fund has
available Deposit Securities with maturity or tender dates not later than the
day preceding the applicable redemption date and having a value not less than
the amount (including any applicable premium) due to Holders of

                                     - 40 -

<PAGE>

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

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

                                     - 41 -

<PAGE>

such redemption. If fewer than all of the outstanding shares of Preferred Shares
are to be redeemed pursuant to this paragraph (b), the number of shares to be
redeemed shall be redeemed pro rata from the Holders of shares in proportion to
the number of shares held by such Holders.

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

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

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

                                     - 42 -

<PAGE>

the time or times and in the manner specified in such Notice of Redemption.
Notwithstanding the fact that the Fund may not have redeemed shares of Preferred
Shares for which a Notice of Redemption has been mailed, dividends may be
declared and paid on shares of Preferred Shares and shall include those shares
of Preferred Shares for which a Notice of Redemption has been mailed.

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

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

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

     (i)  ONLY WHOLE SHARES OF PREFERRED SHARES MAY BE REDEEMED. In the case of
any redemption pursuant to this Section 11, only whole shares of Preferred
Shares shall be redeemed, and in the event that any provision of the Charter
would

                                     - 43 -

<PAGE>


require redemption of a fractional share, the Auction Agent shall be authorized
to round up so that only whole shares are redeemed.

     12.  LIQUIDATION RIGHTS.

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

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

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

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

                                     - 44 -

<PAGE>

     (e)  CERTAIN EVENTS NOT CONSTITUTING LIQUIDATION. Neither the sale of all
or substantially all the property or business of the Fund, nor the merger or
consolidation of the Fund into or with any corporation nor the merger or
consolidation of any corporation into or with the Fund shall be a dissolution,
liquidation or winding up, whether voluntary or involuntary, for the purposes of
this Section 12.

     13.  FUTURES AND OPTIONS TRANSACTIONS: FORWARD COMMITMENTS.

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

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

     (A)  the Fund will not engage in any Moody's Hedging Transaction based on
the Municipal Index (other than transactions which terminate a futures contract
or option held by the Fund by the Fund's taking an opposite position thereto
("Closing Transactions")) which would cause the Fund at the time of such
transaction to own or have sold 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;

     (B)  the Fund will not engage in any Moody's Hedging Transaction based on
Treasury Futures (other than Closing Transactions) which would cause the Fund at
the time of such transaction to own or have sold

     (I)  outstanding futures contracts based on Treasury Futures having an
aggregate Market Value exceeding 20% of the aggregate Market Value of Moody's
Eligible Assets owned by the Fund and rated Aa by Moody's (or, if not rated by
Moody's, rated AAA by S&P), or

     (II) outstanding futures contracts based on Treasury Futures having an
aggregate Market Value exceeding 40% of the aggregate Market Value of all
Municipal Bonds constituting Moody's Eligible Assets owned by the Fund (other
than Moody's Eligible Assets already subject to a Moody's Hedging Transaction)
and rated Baa or A by Moody's (or, if not rated by Moody's, rated A or AA by
S&P) (for purpose of the foregoing clauses (I) and (II), the Fund shall be
deemed to own futures contracts that underlie any outstanding options written by
the Fund);

     (C)  the Fund will engage in Closing Transactions to close out any
outstanding

                                     - 45 -

<PAGE>

futures contract based on the Municipal Index if the amount of open interest in
the Municipal Index as reported by The Wall Street Journal is less than 5,000;
and

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

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

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

     (I)  Discounted Value and

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

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

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

     (I)  the exercise price and

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

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

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

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

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


     (C)  where the Fund is the seller under a futures contract, 10% of the
settlement price of the futures contract;


                                     - 46 -

<PAGE>

     (D)  where the Fund is the purchaser under a futures contract, the
settlement price of assets purchased under such futures contract;

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

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

     (iv) For so long as any Preferred Shares are rated by Moody's, the Fund
will not enter into any contract to purchase securities for a fixed price at a
future date beyond customary settlement time (other than such contracts that
constitute Moody's Hedging Transactions that are permitted under Section
13(a)(ii) of this Part I), except that the Fund may enter into such contracts to
purchase newly-issued securities on the date such securities are issued
("Forward Commitments"), subject to the following limitation:

     (A)  the Fund will maintain in a segregated account with its custodian
cash, cash equivalents or short-term, fixed-income securities rated P-1, MTG-1
or MIG-1 by Moody's and maturing prior to the date of the Forward Commitment
with a Market Value that equals or exceeds the amount of the Fund's obligations
under any Forward Commitments to which it is from time to time a party or
long-term fixed income securities with a Discounted Value that equals or exceeds
the amount of the Fund's obligations under any Forward Commitment to which it is
from time to time a party; and

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

     For purposes of determining whether the Fund has Moody's Eligible Assets
with an aggregate Discounted Value that equals or exceeds the Preferred Shares
Basic Maintenance Amount, the Discounted Value of all Forward Commitments to
which the Fund is a party and of all securities deliverable to the Fund pursuant
to such Forward Commitments shall be zero.

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

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

     (A)  the Fund will not engage in any Fitch Hedging Transaction based on the
Municipal Index (other than Closing Transactions) which would cause the Fund at
the time of such transactions to own or have sold outstanding futures contracts
based on the Municipal Index

                                     - 47 -

<PAGE>

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 the Effecting
such transaction as reported by The Wall Street Journal;

     (B)  the Fund will not engage in any Fitch Hedging Transaction based on
Treasury Futures (other than Closing Transactions) which would cause the Fund at
the time of such transaction to own or have sold

     (I)  outstanding futures contracts based on Treasury Futures having an
aggregate Market Value exceeding 20% of the aggregate Market Value of Fitch
Eligible Assets owned by the Fund and rated AA by Fitch (or, if not rated by
Fitch, rated Aa by Moody's; or, if not rated by Moody's, rated AAA by S&P), or

     (II) outstanding futures contracts based on Treasury Futures having an
aggregate Market Value exceeding 40% of the aggregate Market Value of all
Municipal Bonds constituting Fitch Eligible Assets owned by the Fund (other than
Fitch Eligible Assets already subject to a Fitch Hedging Transaction) and rated
A or BBB by Fitch (or, if not rated by Fitch, rated Baa by Moody's, or, if not
rated by Moody's rated A or AA by S&P) (for purposes of the foregoing clauses
(I) and (II), the Fund shall be deemed to own futures contracts that underlie
any outstanding options written by the Fund);

     (C)  the Fund will engage in Closing Transactions to close any outstanding
futures contract based on the Municipal Index if the amount of open interest in
the Municipal Index as reported by The Wall Street Journal is less than 5,000;
and

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

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

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

     (I)  Discounted Value and

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

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

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

                                     - 48 -

<PAGE>

     (I)  the exercise price and

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

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

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

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

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

     (C)  where the Fund is the seller under a futures contract, 10% of the
settlement price of the futures contract;

     (D)  where the Fund is the purchaser under a futures contract, the
settlement price of assets purchased under such futures contract;

     (E)  the settlement price of the underlying futures contract if the Fund
writes put options on a futures contract and does now own the underlying
contract; and

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

     (iv) For so long as any Preferred Shares are rated by Fitch, the Fund will
not enter into any contract to purchase securities for a fixed price at a future
date beyond customary settlement time (other than such contracts that constitute
Fitch Hedging Transactions that are permitted under Section 13(b)(ii) of this
Part I), except that the Fund may enter into Forward Commitments, subject to the
following limitation:


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

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

                                     - 49 -

<PAGE>

     For purposes of determining whether the Fund has Fitch Eligible Assets with
an aggregate Discounted Value that equals or exceeds the Preferred Shares Basic
Maintenance Amount, the Discounted Value of all Forward Commitments to which the
Fund is a party and of all securities deliverable to the Fund pursuant to such
Forward Commitments shall be zero.

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

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

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

     (B) such borrowing

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

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

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

     (iii) engage in any short sales of securities;

     (iv) lend securities;

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

     (vi) change the Pricing Service; and

     (vii) enter into reverse repurchase agreements.

     In the event any Preferred Shares are outstanding and another
nationally-recognized statistical rating organization is rating such shares in
addition to or in lieu of Moody's

                                     - 50 -

<PAGE>

or Fitch, the Fund shall comply with any restrictions imposed by such rating
agency, which restrictions may be more restrictive than those imposed by Moody's
or Fitch.

     14. MISCELLANEOUS.

     (a) [RESERVED]

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

     (c) STATUS OF SHARES OF PREFERRED SHARES REDEEMED, EXCHANGED OR OTHERWISE
ACQUIRED BY THE FUND. Shares of Preferred Shares which are redeemed, exchanged
or otherwise acquired by the Fund shall return to the status of authorized and
unissued Preferred Shares without designation as to series.

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

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

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

                                    PART II

     1. ORDERS

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

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

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

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

     (C) the number of Outstanding shares, if any, held by such Beneficial Owner

                                     - 51 -

<PAGE>

which such Beneficial Owner offers to sell without regard to the Applicable Rate
for the next succeeding Rate Period; and

     (ii) one or more Broker-Dealers, using lists of Potential Beneficial
Owners, shall in good faith for the purpose of conducting a competitive Auction
in a commercially reasonable manner, contact Potential Beneficial Owners (by
telephone or otherwise), including Persons that are not Beneficial Owners, on
such lists to determine the number of shares, if any, which each such Potential
Beneficial Owner offers to purchase if the Applicable Rate for the next
succeeding Rate Period 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 by a Broker-Dealer to the
Auction Agent, of information referred to in clause (i)(A), (i), (B), (i), (C)
or (ii) of this paragraph (a) is hereinafter referred to as an "Order" and
collectively as "Orders" and each Beneficial Owner and each Potential Beneficial
Owner placing an Order with a Broker-Dealer, and such Broker-Dealer placing an
Order with the Auction Agent, is hereinafter referred to as a "Bidder" and
collectively as "Bidders"; an Order containing the information referred to in
clause (i)(A) of this paragraph (a) is hereinafter referred to as a "Hold Order"
and collectively as "Hold Orders"; an Order containing the information referred
to in clause (i)(B) or (ii) of this paragraph (a) is hereinafter referred to as
a "Bid" and collectively as "Bids"; and an Order containing the information
referred to in clause (i)(C) of this paragraph (a) is hereinafter referred to as
a "Sell Order" and collectively as "Sell Orders."

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

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

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

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

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

                                     - 52 -

<PAGE>

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

     (B) such number or a lesser number of Outstanding shares of Preferred
Shares as set forth in clause (iii) of paragraph (b) of Section 4 of this Part
II if Sufficient Clearing Bids for shares of Preferred Shares do not exist;
provided, however, that a Broker-Dealer that is an Existing Holder with respect
to shares of Preferred Shares shall not be liable to any Person for failing to
sell such shares pursuant to a Sell Order described in the proviso to paragraph
(c) of Section 2 of this Part II if (1) such shares were transferred by the
Beneficial Owner thereof without compliance by such Beneficial Owner or its
transferee Broker-Dealer (or other transferee person, if permitted by the Fund)
with the provisions of Section 7 of this Part II or (2) such Broker-Dealer has
informed the Auction Agent pursuant to the terms of its Broker-Dealer Agreement
that, according to such Broker-Dealer's records, such Broker-Dealer believes it
is not the Existing Holder of such shares.

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

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

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

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

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

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

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

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

                                     - 53 -

<PAGE>

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

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

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

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

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

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

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

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

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

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

                                     - 55 -

<PAGE>

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

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

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

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

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

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

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

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

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

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

     (A) the number of Outstanding shares of Preferred Shares subject to
Submitted


                                     - 55 -

<PAGE>

Bids of Potential Holders specifying one or more rates equal to or lower than
the Maximum Rate for shares of Preferred Shares exceeds or is equal to the sum
of:

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

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

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

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

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

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

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

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


     (iii) if all of the Outstanding shares of Preferred Shares are subject to
Submitted Hold Orders, that the Applicable Rate for all shares of Preferred
Shares for the next succeeding Rate Period thereof shall be equal to the lesser
of the Kenny Index (if such Rate Period consists of fewer than 183 Rate Period
Days) or the product of (A)(I) the "AA"



                                     - 56-

<PAGE>

Composite Commercial Paper Rate on such Auction Date for such Rate Period, if
such Rate Period consists of fewer than 183 Rate Period Days; (II) the Treasury
Bill Rate on such Auction Date for such Rate Period, if such Rate Period
consists of more than 182 but fewer than 365 Rate Period Days; or (III) the
Treasury Note Rate on such Auction Date for such Rate Period, if such Rate
Period is more than 364 Rate Period Days (the rate described in the foregoing
clause (A)(I), (II) or (III), as applicable, being referred to herein as the
"Benchmark Rate") and (B) 1 minus the maximum marginal regular Federal personal
income tax rate applicable to ordinary income (taking into account the Federal
income tax deductibility of state and local taxes paid or incurred) or the
maximum marginal regular Federal corporate income tax rate applicable to
ordinary income, whichever is greater; provided, however, that if the Fund has
notified the Auction Agent of its intent to allocate to Preferred Shares in such
Rate Period any net capital gains or other income taxable for Federal income tax
purposes ("Taxable Income"), the Applicable Rate for Preferred Shares for such
Rate Period will be (i) if the Taxable Yield Rate (as defined below) is greater
than the Benchmark Rate, then the Benchmark Rate, or (ii) if the Taxable Yield
Rate is less than or equal to the Benchmark Rate, then the rate equal to the sum
of (x) the lesser of the Kenny Index (if such Rate Period consists of fewer than
183 Rate Period Days) or the product of the Benchmark Rate multiplied by the
factor set forth in the preceding clause (B) and (y) the product of the maximum
marginal regular Federal personal income tax rate applicable to ordinary income
(taking into account the Federal income tax deductibility of state and local
taxes paid or incurred) or the maximum marginal regular Federal corporate income
tax applicable to ordinary income, whichever is greater, multiplied by the
Taxable Yield Rate. For purposes of the foregoing, Taxable Yield Rate means the
rate determined by (a) dividing the amount of Taxable Income available for
distribution per such share of Preferred Shares by the number of days in the
Dividend Period in respect of which such Taxable Income is contemplated to be
distributed, (b) multiplying the amount determined in (a) above by 365 (in the
case of a Dividend Period of 7 Rate Period Days) or 360 (in the case of any
other Dividend Period), and (c) dividing the amount determined in (b) above by
$25,000.

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

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

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

     (i) Existing Holders' Submitted Bids for shares of Preferred Shares
specifying any rate that is higher than the Winning Bid Rate for shares of
Preferred Shares shall

                                      -57-

<PAGE>



be accepted, thus requiring each such Existing Holder to sell the shares of
Preferred Shares subject to such Submitted Bids;

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

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

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

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

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

     (i)  Existing Holders' Submitted Bids for shares of Preferred Shares
specifying any rate that is equal to or lower than the Maximum Rate for shares
of Preferred

                                     - 58 -

<PAGE>


Shares shall be rejected, thus entitling such Existing Holders to continue to
hold the shares of Preferred Shares subject to such Submitted Bids;

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

     (iii) Each Existing Holder's Submitted Bid for shares of Preferred Shares
specifying any rate that is higher than the Maximum Rate for shares of Preferred
Shares and the Submitted Sell Orders for shares of Preferred Shares of each
Existing Holder shall be accepted, thus entitling each Existing Holder that
submitted or on whose behalf was submitted any such Submitted Bid or Submitted
Sell Order to sell the shares of Preferred Shares subject to such Submitted Bid
or Submitted Sell Order, but in both cases only in an amount equal to the number
of shares of Preferred Shares obtained by multiplying the number of shares of
Preferred Shares subject to Submitted Bids described in clause (ii) of this
paragraph (b) by a fraction, the numerator of which shall be the number of
shares of Outstanding Preferred Shares held by such Existing Holder subject to
such Submitted Bid or Submitted Sell Order and the denominator of which shall be
the aggregate number of Outstanding shares of Preferred Shares subject to all
such Submitted Bids and Submitted Sell Orders.

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

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

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

     (f) Based on the results of each Auction for shares of Preferred Shares,
the Auction Agent shall determine the aggregate number of shares of Preferred
Shares to be purchased and the aggregate number of shares of Preferred Shares to
be sold by Potential Holders and Existing Holders and, with respect to each
Potential Holder and Existing Holder, to the extent that such aggregate number
of shares to be purchased and such aggregate number of shares to be sold differ,
determine to which other Potential Holder(s) or Existing Holder(s) they


                                     - 59 -

<PAGE>


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

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

     5. NOTIFICATION OF ALLOCATIONS.

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

     6. AUCTION AGENT.

     For so long as any shares of Preferred Shares are outstanding, the Auction
Agent, duly appointed by the Fund to so act, shall be in each case a commercial
bank, trust company or other financial institution independent of the Fund and
its affiliates (which however, may engage or have engaged in business
transactions with the Fund or its affiliates) and at no time shall the Fund or
any of its affiliates act as the Auction Agent in connection with the Auction
Procedures. If the Auction Agent resigns or for any reason its appointment is
terminated during any period that any shares of Preferred Shares are
outstanding, the Board of Directors shall use its best efforts promptly
thereafter to appoint another qualified commercial bank, trust company or
financial institution to act as the Auction Agent. The Auction Agent's registry
of Existing Holders of shares of Preferred Shares shall be conclusive and
binding on the Broker- Dealers. A Broker-Dealer may inquire of the Auction Agent
between 3:00 p.m. on the Business Day preceding an Auction and 9:30 a.m. on the
Auction Date for such Auction to ascertain the number of shares in respect of
which the Auction Agent has determined such Broker-Dealer to


                                     - 60 -

<PAGE>



be an Existing Holder. If such Broker-Dealer believes it is the Existing Holder
of fewer shares than specified by the Auction Agent in response to such
Broker-Dealer's inquiry, such Broker-Dealer may so inform the Auction Agent of
that belief. Such Broker-Dealer shall not, in its capacity as Existing Holder of
shares of Preferred Shares, submit Orders in such Auction covering in the
aggregate more than the number of shares specified by the Auction Agent in
response to such Broker-Dealer's inquiry.

     7.   TRANSFER OF SHARES OF PREFERRED SHARES.

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

     8.   GLOBAL CERTIFICATE.

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

                                     - 61 -

<PAGE>


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


                                               INTERMEDIATE MUNI FUND, INC.
                                               By:
                                                  -----------------------------

                                               Title:
         WITNESS:

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

         Title:

                                     - 62 -

</TEXT>
</DOCUMENT>
