<DOCUMENT>
<TYPE>EX-99.A3
<SEQUENCE>5
<FILENAME>dex99a3.txt
<DESCRIPTION>EXHIBIT (A)(3)
<TEXT>
<PAGE>

                                                                  EXHIBIT (a)(3)


                        THE FIRST COMMONWEALTH FUND, INC.

                  Articles Supplementary creating one series of
                        Auction Market Preferred Stock*

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

       FIRST: Pursuant to authority expressly vested in the Board of Directors
of the Corporation by Article V(b) of its Charter, the Board of Directors has
authorized the issuance of one series of up to 1,500 shares of its authorized
preferred stock, par value $.001 per share, liquidation preference $50,000 per
share, plus an amount equal to accumulated but unpaid dividends (whether or not
earned or declared) thereon, designated Auction Market Preferred Stock, Series
W-7.

       SECOND: Pursuant to section 2-411 of the Maryland General Corporation law
and authority granted by Article IV.1 of the Corporation's By-Laws, the Board of
Directors of the Corporation has appointed a pricing committee (the "Pricing
Committee") and has authorized such Pricing Committee to fix, consistent with,
and subject to, the authorization referred to in Article FIRST of these Articles
Supplementary, the terms of the shares of Auction Market Preferred Stock, Series
W-7.

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

                                   DESIGNATION

       SERIES W-7: A series of 600 shares of preferred stock, par value $.001
per share, liquidation preference $50,000 per share plus an amount equal to
accumulated but unpaid dividends (whether or not earned or declared) thereon, is
hereby designated "Auction Market Preferred Stock, Series W-7." Each share of
Auction Market Preferred Stock, Series W-7 (sometimes referred to herein as "the
AMPS"), shall be issued on July 30, 1992; have an Initial Dividend Rate equal to
3.50% per annum; have an Initial Dividend Payment Date of August 6, 1992; and
have such other preferences, voting powers, limitations as to dividends,
qualifications and terms and conditions of redemption, and relative voting
rights, in addition to those required by applicable law or set forth in the
Corporation's Articles of Incorporation applicable to preferred stock of the
Corporation, as are set forth in these Articles Supplementary. The Auction
Market Preferred Stock, Series W-7 shall constitute a separate series of
preferred stock of the Corporation, and each share of Auction Market Preferred
Stock, Series W-7 shall be identical.

--------
*      Registered Trademark of Merrill Lynch & Co., Inc.

<PAGE>

       1. Definitions.

              (a) Unless the context or use indicates another or different
meaning or intent, in these Articles Supplementary the following terms have the
following meanings, whether used in the singular or plural:

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

              "Accountant's Confirmation" has the meaning set forth in paragraph
7(c) hereof.

              "Administrator" shall mean Princeton Administrators, Inc. or any
successor administrator to the corporation who acts in such capacity.

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

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

                                        2

<PAGE>

              "AMPS" means the Auction Market Preferred Stock, Series W-7 of the
Corporation and any other series of AMPS which may be issued.

              "AMPS Basic Maintenance Amount," as of any Valuation Date, means
the dollar amount equal to the sum of (A) the product of the number of shares of
AMPS outstanding on such Valuation Date multiplied by the sum of (a) $50,000 and
(b) any applicable redemption premium attributable to the designation of a
Premium Call Period; (B) the aggregate amount of cash dividends (whether or not
earned or declared) that will have accumulated for each share of AMPS
Outstanding, in each case, to (but not including) the end of the current
Dividend Period that follows such Valuation Date; (C) the aggregate amount of
cash dividends that would accumulate at the then current Maximum Applicable Rate
on any shares of AMPS Outstanding from the end of such Dividend Period through
the 48th day after such Valuation Date, multiplied by the larger of the
potential dividend rate increase factors (currently 304%) determined from time
to time by Moody's and S&P (except that if such Valuation Date occurs during a
Non-Payment Period, the cash dividend for purposes of calculation would
accumulate at the then current Non-Payment Period Rate); (D) the amount of
anticipated expenses of the Corporation for the 90 days subsequent to such
Valuation Date; and (E) the greater of $200,000 or the Corporation's current
liabilities as of such Valuation Date not otherwise reflected in any of (A)
through (D) above.

              "AMPS Basic Maintenance Cure Date," with respect to the failure by
the Corporation to satisfy either the Moody's Test or the S&P Test (as required
by paragraph 7(a) of these Articles Supplementary) as of a given Valuation Date,
means the fifth Business Day following such Valuation Date.

              "AMPS Basic Maintenance Report" means a report executed by the
Corporation and delivered to the Auction Agent and the Rating Agencies with
respect to the valuation (in U.S. dollars) of the Eligible Portfolio Property,
as described in paragraph 7 hereof; provided, that all or any portion of any
such report may be prepared by the custodian for the Eligible Portfolio
Property, EquitiLink Australia Limited, Princeton Administrators, Inc., and/or
EquitiLink International Management Limited.

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

              "Applicable Percentage" has the meaning set forth in paragraph 13
(a) (vii) hereof which rate after the Initial Dividend Period, shall be
determined by the Auction Agent in accordance with paragraph 13 hereof.

              "Applicable Rate" means the rate per annum at which cash dividends
are payable on the AMPS for any Dividend Period, which rate, after the Initial
Dividend Period, shall be determined by the Auction Agent in accordance with
paragraph 13(d) hereof.

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

              "Auction Agent" means Manufacturers Hanover Trust Company unless
and until another commercial bank, trust company or other financial institution
appointed by a resolution of the Board of Directors of the Corporation or a duly
authorized committee thereof enters into

                                        3

<PAGE>

an agreement with the Corporation to follow Auction Procedures for the purpose
of determining the Applicable Rate and to act as transfer agent, registrar,
dividend disbursing agent and redemption agent for the AMPS.

              "Auction Procedures" means the procedures for conducting Auctions
set forth in paragraph 13 hereof.

              "Australian Bank Bills" means bills of exchange (as defined is the
Bills of Exchange Act of the Commonwealth of Australia) issued, accepted or
endorsed by Australian banks with (x) in the case of S&P (i) a rating from S&P
at least as high as S&P's then-current rating for the AMPS or (ii) in the case
of any Bank Bill with a remaining term to maturity from the date of
determination of 365 days or less, a rating from S&P at least as high as S&P's
short-term rating comparable to its then-current rating for the AMPS and (y) in
the case of Moody's (i) a long-term foreign currency debt rating from Moody's of
at least Aa3 or (ii) in the case of any Bank Bill with a remaining term to
maturity from the date of determination of 180 days or less, a rating from
Moody's of Prime-1 or (iii) any other rating as Moody's shall approve in
writing.

              "Australian Convertible Eurobonds" means bonds which are
denominated in Australian Currency issued by the New South Wales Treasury
Corporation or the Queensland Treasury Corporation which, confer respectively,
upon the holder an option to exchange such bonds for a like principle amount of
New South Wales Treasury Inscribed stock or Queensland Treasury Corporation
Inscribed Stock of identical maturity and coupon.

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

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

                     FANMAC Premier Trust Co. No. 1-22 and any
                     subsequent issues rated by S&P - Australian
                     Ratings
                     Ford Credit Australia
                     National Australia Bank
                     State Bank of Victoria
                     Custom Credit Corporation Ltd.

                                        4

<PAGE>

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

              In addition, for purposes of the S&P Test, (a) not more than 10%
of the aggregate Discounted Value of the S&P Eligible Portfolio Property of the
Corporation can consist of Australian Corporate Bonds issued by a single issuer,
(b) not more than 50% (if the issue is rated AAA by S&P) or 33.3% (if the issue
is rated AA or A by S&P) or 20% (if the issue is rated BBB by S&P) of the
aggregate Discounted Value of the S&P Eligible Portfolio Property of the
Corporation can consist of Australian Corporate Bonds from issues representing a
single industry, (c) not more than 5% of the then-outstanding principal amount
of any one issue can be included in S&P Eligible Portfolio Property and (d) not
more than 20% of the outstanding aggregate principal amount of the Australian
Corporate Bonds held by the Corporation and included in S&P Eligible Portfolio
Property shall be comprised of securities with a then outstanding issue size of
less than A$100 million.

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

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

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

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

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

              In addition, for purposes of the S&P Test, (a) not more than 10%
of the aggregate Discounted Value of the S&P Eligible Portfolio Property of the
Corporation can consist of

                                        5

<PAGE>

Eurobonds from a single issuer, (b) not more than 50% (if the issue is rated AAA
by S&P) or 33.3% (if the issue is rated AA or A by S&P) or 20% (if the issue is
rated BBB by S&P) of the aggregate Discounted Value of the S&P Eligible
Portfolio Property of the Corporation can consist of Eurobonds from issues
representing a single industry, (c) not more than 5% of the then outstanding
principal amount of any one issue can be included is S&P Eligible Portfolio
Property and (d) not more than 20% of the outstanding aggregate principal amount
of the Eurobonds held by the Corporation and included in S&P Eligible Portfolio
Property shall be comprised of securities with an outstanding issue size of less
than A$50 million.

              "Australian Government Securities" means, in the case of S&P, all
publicly traded securities issued and guaranteed by the Government of the
Commonwealth of Australia with fixed maturities (i.e. no perpetuals) and in the
case of Moody's, any publicly traded security which is (i) either issued by the
Government of the Commonwealth of Australia and is rated Aaa by Moody's or is
guaranteed by the Government of the Commonwealth of Australia or any
semi-sovereign Australian entity whose domestic currency long-term debt is rated
Aaa by Moody's (ii) is denominated and payable in Australian currency or is
convertible into a security constituting Eligible Portfolio Property by Moody's
and (iii) is not a variable rate, indexed-linked, zero coupon or stripped
security.

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

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

              "Australian Semi-Government Securities" means publicly traded
semi-government securities with a fixed maturity (i.e. no perpetuals) issued by
the following entities and which, except as indicated, are explicitly guaranteed
by the Commonwealth of Australia or the respective Australian state:

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

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

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

              4.     New South Wales Treasury Corporation, a corporation
       constituted under section 4 of the Treasury Corporation Act 1983 (New
       South Wales), including its Australian Convertible Eurobond issues, in
       the case of S&P.

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

                                        6

<PAGE>

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

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

              7.     Queensland Treasury Corporation, a corporation established
       under the Treasury Corporation Act 1988 (Qld), including its Australian
       Convertible Eurobond issues, in the case of S&P.

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

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

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

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

              12.    (with respect to S&P only) and without any guarantee by the
       Commonwealth of Australia or the respective Australian State: Australian
       and Overseas Telecommunications Corporation, Limited.

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

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

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

              16.    The Western Australian Treasury Corporation.

              17.    Hydro-Electricity Commission of Tasmania.

              18.    Tasmanian Public Finance Corp.

              19.    Tasmanian Development Authority.

              20.    Australian Trade Commission.

                                        7

<PAGE>

              21.    (with respect to S&P only) FANMAC Premier Trust Co. (Nos.
       1-22) and any subsequent issues rated by S&P - Australian Ratings.

              22.    (with respect to S&P only) Australian Wool Corporation.

              23.    Commonwealth Bank of Australia.

              24.    State Bank of New South Wales.

              "Australian Short Term Securities" means promissory notes and
other short term commercial paper issued by Australian institutions which, for
purposes of the S&P Test, are rated A-1+ by S&P or have a long-term rating from
S&P at least as high as their then-current comparable rating of AMPS and, for
purposes of the Moody's Test, are rated Prime-1 by Moody's or have a long-term
foreign currency debt rating from Moody's of at least Aa3.

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

              "Board of Directors" means the Board of Directors of the
Corporation or, except as used in paragraphs 2 and 5 hereof, any duly authorized
and empowered committee thereof, including the Pricing Committee.

              "Broker-Dealer" shall mean any broker-dealer, or other entity
permitted by law to perform the functions required of a Broker-Dealer in
paragraph 13 hereof, that has been selected by the Corporation and has entered
into a Broker-Dealer Agreement with the Auction Agent that remains effective.

              "Broker-Dealer Agreement" shall mean an agreement between the
Auction Agent and a Broker-Dealer pursuant to which such Broker-Dealer agrees to
follow the procedures specified in paragraph 13 hereof.

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

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

              "Canadian Government Securities" means, in the case of S&P, all
publicly traded securities issued and guaranteed by the Government of Canada
with fixed maturities (i.e. no perpetuals) and which is non-callable and in the
case of Moody's, (i) any publicly traded security which is either issued by the
Government of Canada and is rated Aaa by Moody's or is guaranteed by the
Government of Canada or any semi-sovereign Canadian entity whose domestic
currency long-term debt is rated Aaa by Moody's (ii) is denominated and payable
in

                                        8

<PAGE>

Canadian currency or is convertible into a security constituting Eligible
Portfolio Property by Moody's and (iii) is not a variable rate, indexed-linked,
zero coupon or stripped security.

              "Canadian Securities" means Canadian Government Securities.

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

              "Charter" means the Articles of Incorporation, as amended and
supplemented (including these Articles Supplementary), of the Corporation on
file in the State Department of Assessments and Taxation of Maryland.

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

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

              "Commission" means the Securities and Exchange Commission.

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

              "Corporate Bonds" means debt obligations of U.S. corporations
(other than Short Term Money Market Instruments or U.S. Government Obligations)
rated Aa or better by Moody's for purposes of the Moody's Test or AA or better
by S&P for purposes of the S&P Test, which corporate debt obligations (a)
provide for the periodic payment of interest thereon in cash, (b) do not provide
for conversion or exchange into equity capital at any time over their respective
lives, (c) have been registered under the Securities Act of 1933, as amended,
and (d) have not had notice given in respect thereof that any such corporate
debt obligations are the subject of an offer by the issuer thereof of exchange
or tender for cash, securities or any other type of consideration (except that
corporate debt obligations in an amount not exceeding 10% of the aggregate value
of the Corporation's assets at any time shall not be subject to the provisions
of this clause (d)). In addition, no corporate debt obligation held by the
Corporation shall be deemed a Corporate Bond (i) if it fails to meet the
criteria in column (1) below or (ii) to the extent (and only to the
proportionate extent) the acquisition or holding thereof by the Corporation
causes the Corporation to exceed any applicable limitation set forth in column
(2) or (3) below as of any relevant date of determination (provided that in the
event that the Corporation shall exceed any such limitation, the Corporation
shall designate, in its sole discretion, the particular Corporate Bond(s) and/or
portions thereof which shall be deemed to have caused the Corporation to exceed
such limitation):

                                        9

<PAGE>

<TABLE>
<CAPTION>
                                          Column 1                    Column 2                     Column 3
                                          --------                    --------                     --------
                                                                                                   Maximum
                                                                       Maximum                 Percent of Value
                                                                  Percent of Value              of Corporation
                                                                   of Corporation             Assets, Including
                                                                  Assets, Including             Eligible Port-
                                                                   Eligible Port-              folio Property,
                                      Minimum Original             folio Property,             Invested in any
            Rating                      Issue Size of              Invested in any               One Industry
             (1)                         Each Issue                One Issuer (2)                Category (2)
-------------------------------    ------------------------    ------------------------     -----------------------
                                       ($ in millions)
<S>                                <C>                         <C>                          <C>
Aaa/AAA..............                       $100                         10.0%                        50.0%
Aa/AA................                        100                         10.0                         33.3
</TABLE>

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

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

              "Corporation" means The First Commonwealth Fund, Inc., a Maryland
corporation.

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

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

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

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

                                       10

<PAGE>

<TABLE>
<CAPTION>
                                                                     Moody's                 S&P
                                                                    Discount               Discount
          Type of Eligible Portfolio Property                        Factor                 Factor (2)
---------------------------------------------------------     ---------------------    --------------------
<S>                                                           <C>                      <C>
Cash and Short Term Money Market
   Instruments other than commercial paper
   with a remaining term to maturity equal
   to or less than 46 days                                           1.000 (1)                1.000

   commercial paper with a remaining term
   to maturity equal to or less than 46 days                         1.150                    1.000

Cash and Short Term Money Market
   Instruments other than commercial paper
   with a remaining term to maturity equal
   to or less than 46 days                                           1.000 (1)                1.000

Repurchase Agreements                                                1.000                    1.000

Australian Government Securities:
   with any current outstanding issue size
   and with a remaining term to maturity
   shorter than 46 days from the Valuation
   Date                                                              1.000 (1)                1.000

   with a current outstanding issue size less
   than A$100,000,000 and with a
   remaining term to maturity equal to or
   longer than 46 days but not more than 2
   years from the Valuation Date                                     1.730                    1.470

   with a current outstanding issue size of at
   least A$100,000,000 but less than or
   equal to A$150,000,000 and with a
   remaining term to maturity equal to or
   longer than 46 days but not more than 2
   years from the Valuation Date                                     1.730                    1.340

   with a current outstanding issue size
   greater than A$150,000,000 and with a
   remaining term to maturity equal to or
   longer than 46 days but not more than 2
   years from the Valuation Date                                     1.520                    1.340

                 -0-
</TABLE>

                                       11

<PAGE>

<TABLE>
<CAPTION>
                                                                     Moody's                    S&P
                                                                    Discount                 Discount
          Type of Eligible Portfolio Property                        Factor                   Factor (2)
---------------------------------------------------------     ---------------------    --------------------
     <S>                                                      <C>                      <C>
     with a current outstanding issue size less
     than A$100,000,000 and with a
     remaining term to maturity longer than 2
     years but not more than 5 years from the
     Valuation Date                                                  1.730                    1.580

     with a current outstanding issue size of at
     least A$100,000,000 but less than or
     equal to A$150,000,000 and with a
     remaining term to maturity longer than 2 years
     but not more than 5 years from the
     Valuation Date                                                  1.730                    1.436

     with a current outstanding issue size
     greater than A$150,000,000 and with a
     remaining term to maturity longer than 2
     years but not more than 5 years from the
     Valuation Date                                                  1.730                    1.436

                         -0-

     with a current outstanding issue size less
     than A$100,000,000 and with a
     remaining term to maturity longer than 5
     years but not more than 10 years from
     the Valuation Date                                              1.730                    1.608

     with a current outstanding issue size of at
     least A$100,000,000 but less or equal to
     A$150,000,000 and with a remaining
     term to maturity longer than 5 years but
     not more than 10 years from the
     Valuation Date                                                  1.730                    1.462

     with a current outstanding issue size
     greater than A$150,000,000 and with a
     remaining term to maturity longer than 5
     years but not more than 10 years from
     the Valuation Date                                              1.520                    1.462

                         -0-

     with a current outstanding issue size less
     than A$100,000,000 and with a
     remaining term to maturity longer than
     10 years but not more than 20 years from
     the Valuation Date                                              1.730                    1.679
</TABLE>

                                       12

<PAGE>

<TABLE>
<CAPTION>
                                                                                              S&P
                                                                Moody's Discount            Discount
          Type of Eligible Portfolio Property                        Factor                 Factor (2)
---------------------------------------------------------     ---------------------    --------------------
<S>                                                           <C>                      <C>
     with a current outstanding issue size of at least
     A$100,000,000 but less than or equal to
     A$150,000,000 and with a remaining term to maturity
     longer than 10 years but not more than 20 years
     from the Valuation Date                                         1.730                    1.526

     with a current outstanding issue size greater than
     A$150,000,000 and with a remaining term to
     maturity longer than 10 years but not more than 20
     years from the Valuation Date                                   1.520                    1.526

     Australian Semi-Government Securities (3):
     with any current outstanding issue size and with a
     remaining term to maturity shorter than 46 days
     from the Valuation Date                                         1.000 (1)                1.000

     with a current outstanding issue size less than
     A$100,000,000 and with a remaining term to
     maturity equal to or longer than 46 days but not
     more than 2 years from the Valuation Date                       1.730                    1.639

     with a current outstanding issue size of at least
     A$100,000,000 but less than or equal to
     A$150,000,000 and with a remaining term to
     maturity, equal to or longer than 46 days but not
     more than 2 years from the Valuation Date                       1.730                    1.490

     with a current outstanding issue size greater than
     A$150,000,000 and with a remaining term to
     maturity equal to or longer than 46 days but not
     more than 2 years from the Valuation Date                       1.520                    1.490

                          -0-

     with a current outstanding issue size less than
     A$100,000,000 and with a remaining term to maturity
     longer than 2 years but not more than 5 years from
     the Valuation Date                                              1.730                    1.745
</TABLE>

                                       13

<PAGE>

<TABLE>
<CAPTION>
                                                                                              S&P
                                                                Moody's Discount            Discount
          Type of Eligible Portfolio Property                        Factor                 Factor (2)
---------------------------------------------------------     ---------------------    --------------------
<S>                                                           <C>                      <C>
     with a current outstanding issue size of at least
     A$100,000,000 but less than or equal to A$150,000,000
     and with a remaining term to maturity longer than 2
     years but not more than 5 years from the Valuation Date         1.730                    1.586

     with a current outstanding issue size greater than
     A$150,000,000 and with a remaining term to
     maturity longer than 2 years but not more than 5
     years from the Valuation Date                                   1.520                    1.586

                          -0-

     with a current outstanding issue size less than
     A$100,000,000 and with a remaining term to maturity
     longer than 5 years but not more than 10 years from
     the Valuation Date                                              1.730                    1.773

     with a current outstanding issue size of at least
     A$100,000,000 but less than or equal to
     A$150,000,000 and with a remaining term to
     maturity longer than 5 years but not more than 10
     years from the Valuation Date                                   1.730                    1.612

     with a current outstanding issue size greater than
     A$150,000,000 and with a remaining term to
     maturity longer than 5 years but not more than 10
     years from the Valuation Date                                   1.520                    1.612

                            -0-

     with a current outstanding issue size less than
     A$100,000,000 and with a remaining term to maturity
     longer than 10 years but not more than 20 years
     from the Valuation Date                                         1.730                    1.844
</TABLE>

                                       14

<PAGE>

<TABLE>
<CAPTION>
                                                                     Moody's                   S&P
                                                                    Discount                 Discount
          Type of Eligible Portfolio Property                        Factor                   Factor (2)
---------------------------------------------------------     ---------------------    --------------------
<S>                                                           <C>                      <C>
     with a current outstanding issue size of at
     least A$100,000,000 but less than or
     equal to A$150,000,000 and with a
     remaining term to maturity longer than
     10 years but not more than 20 years from
     the Valuation Date                                              1.730                     1.676

     with a current outstanding issue size
     greater than A$150,000,000 and with a
     remaining term to maturity longer than
     10 years but not more than 20 years from
     the Valuation Date                                              1.520                     1.676

                      -0-

Australian Semi-Government Securities
     (Tasmanian) (4):
     with any current outstanding issue size
     and with a remaining term to maturity
     shorter than 46 days from the Valuation
     Date                                                            1.050                     1.000

     with a current outstanding issue size less
     than A$100,000,000 and with a
     remaining term to maturity equal to or
     longer than 46 days but not more than 2
     years from the Valuation Date                                   1.820                     1.694

     with a current outstanding issue size of at
     least A$100,000,000 but less than or
     equal to A$150,000,000 and with a
     remaining term to maturity equal to or
     longer than 46 days but not more than 2
     years from the Valuation Date                                   1.820                     1.540

     with a current outstanding issue size
     greater than A$150,000,000 and with a
     remaining term to maturity equal to or
     longer than 46 days but not more than 2
     years from the Valuation Date                                   1.160                     1.540

                      -0-
</TABLE>

                                       15

<PAGE>

<TABLE>
<CAPTION>
                                                                     Moody's                   S&P
                                                                    Discount                 Discount
          Type of Eligible Portfolio Property                        Factor                   Factor (2)
---------------------------------------------------------     ---------------------    --------------------
<S>                                                           <C>                      <C>
     with a current outstanding issue size less
     than A$100,000,000 and with a
     remaining term to maturity longer than 2
     years but not more than 5 years from the
     Valuation Date                                                  1.820                     1.800
</TABLE>

                                       16

<PAGE>

<TABLE>
<CAPTION>
                                                                     Moody's                S&P
                                                                    Discount              Discount
          Type of Eligible Portfolio Property                        Factor                Factor
---------------------------------------------------------     ---------------------    ----------------
<S>                                                           <C>                      <C>
     with a current outstanding issue size of at
     least A$100,000,000 but less than or
     equal to A$150,000,000 and with a
     remaining term to maturity longer than 2
     years but not more than 5 years from the
     Valuation Date                                                  1.820                  1.636

     with a current outstanding issue size
     greater than  A$150,000,000 and with a
     remaining term to maturity longer than 2
     years but not more than 5 years from the
     Valuation Date                                                  1.600                  1.636

                      -0-

     with a current outstanding issue size less
     than A$100,000,000 and with a
     remaining term to maturity longer than 5
     years but not more than 10 years from
     the Valuation Date                                              1.820                  1.828

     with a current outstanding issue size of at
     least A$100,000,000 but less than or
     equal to A$150,000,000 and with a
     remaining term to maturity longer than 5
     years but not more than 10 years from
     the Valuation Date                                              1.820                  1.662

     with a current outstanding issue size
     greater than A$150,000,000 and with a
     remaining term to maturity longer than 5
     years but not more than 10 years from
     the Valuation Date                                              1.600                  1.662

                      -0-

     with a current outstanding issue size less
     than A$100,000,000 and with a
     remaining term to maturity longer than
     10 years but not more than 20 years from
     the Valuation Date                                              1.820                  1.899
</TABLE>

                                       17

<PAGE>

<TABLE>
<CAPTION>
                                                                     Moody's                 S&P
                                                                    Discount               Discount
          Type of Eligible Portfolio Property                        Factor                 Factor
---------------------------------------------------------     ---------------------    --------------------
<S>                                                           <C>                      <C>
     with a current outstanding issue size of at least
     A$100,000,000 but less than or equal to A$150,000,000
     and with a remaining term to maturity longer than
     10 years but not more than 20 years from the
     Valuation Date                                                  1.820                   1.726

     with a current outstanding issue size greater than
     A$150,000,000 and with a remaining term to maturity
     longer than 10 years but not more than 20 years from
     the Valuation Date                                              1.160                   1.726

                            -0-

Australian Bank Bills:
     with maturities of less than or equal to 46 days
     from the Valuation Date                                         1.000 (1)               1.000

     with maturities of 47-56 days from the last
     Valuation Date                                                  1.350                   1.400

     with maturities of 57-90 days from the Valuation
     Date                                                            1.350                   1.400

     with maturities of 91-180 days from the Valuation
     Date                                                            1.350                   1.450

Australian Currency                                                  1.350                   1.570

Australian Guaranteed Eurobonds:
     with a current outstanding issue size less than
     or equal to A$50,000,000 with a remaining term to
     maturity of more than 56 days from the Valuation
     Date                                                             ----                   2.000

     with a current outstanding issue size exceeding
     A$50,000,000 with a remaining term to maturity of
     more than 56 days from the Valuation Date                        ----                   1.900

     with any current outstanding issue size and with a
     remaining term to maturity of less than 56 days
     from the Valuation Date                                          ----                   1.000
</TABLE>

                                       18

<PAGE>

<TABLE>
<CAPTION>
                                                                  Moody's                  S&P
                                                                 Discount                Discount
          Type of Eligible Portfolio Property                     Factor                  Factor
---------------------------------------------------------     ----------------       ----------------
<S>                                                           <C>                    <C>
Australian Non-Guaranteed Eurobonds:
     with a current outstanding issue size less than or
     equal to A$50,000,000 with a remaining term to
     maturity of more than 56 days from the Valuation
     Date                                                          ----                   2.150

     with a current outstanding issue size exceeding
     A$50,000,000 with a remaining term to maturity of
     more than 56 days from the Valuation Date                     ----                   2.000

     with any current outstanding issue size and with a
     remaining term to maturity of less than 56 days
     from the Valuation Date                                       ----                   1.000

Guaranteed Australian Corporate Bonds:
     with a current outstanding issue size less than or
     equal to A$100,000,000 with a remaining term to
     maturity of more than 56 days from the Valuation Date         ----                   1.700

     with a current outstanding issue size exceeding
     A$100,000,000 with a remaining term to maturity of
     more than 56 days from the Valuation Date                     ----                   1.600

     with any current outstanding issue size and with a
     remaining term to maturity of less than 56 days
     from the Valuation Date                                       ----                   1.000

Non-Guaranteed Australian Corporate Bonds:
     with a current outstanding issue size less than or
     equal to A$100,000,000 with a remaining term to
     maturity of more than 56 days from the Valuation
     Date                                                          ----                   1.800

     with a current outstanding issue size exceeding
     A$100,000,000 with a remaining term to maturity of
     more than 56 days from the Valuation Date                     ----                   1.700
</TABLE>

                                       19

<PAGE>

                                                      Moody's            S&P
                                                      Discount         Discount
        Type of Eligible Portfolio Property            Factor           Factor
---------------------------------------------------  -----------       ---------
     with any current outstanding issue size
     and with a remaining term to maturity of
     less than 56 days from the Valuation
     Date                                                ----           1.000

Canadian Currency
                                                        1.070           1.110
Canadian Government Securities:
     with any current outstanding issue size
     and with a remaining term to maturity
     shorter than 46 days from the Valuation
     Date                                               1.000 (1)       1.000

     with a current outstanding issue size less
     than C$200,000,000 and with a
     remaining term to maturity equal to or
     longer than 46 days but less than 3 years
     from the Valuation Date                            1.290            ----

     with a current outstanding issue size of at
     least C$200,000,000 but less than
     C$500,000,000 and with a remaining
     term to maturity equal to or longer than
     46 days but less than 3 years from the
     Valuation Date                                     1.290           1.203

                                       20

<PAGE>
                                                        Moody's           S&P
                                                        Discount        Discount
       Type of Eligible Portfolio Property            Factor (5)(6)      Factor
 ------------------------------------------------------------------     --------

     with a current outstanding issue size
     equal to or greater than C$500,000,000
     and with a remaining term to maturity
     equal to or longer than 46 days
     but less than 3 years from the Valuation Date        1.290          1.094

                      -0-

     with a current outstanding issue size less
     than C$200,000,000 and with a
     remaining term to maturity equal to or
     longer than 3 years but less than 5 years
     from the Valuation Date                              1.420           ----

     with a current outstanding issue size of at
     least C$200,000,000 but less than
     C$500,000,000 and with a remaining
     term to maturity equal to or longer than 3
     years but less than 5 years from the
     Valuation Date                                       1.420          1.305

     with a current outstanding issue size
     equal to or greater than C$500,000,000
     and with a remaining term to maturity
     equal to or longer than 3 years but less
     than 5 years from the Valuation Date                 1.420          1.186

                     -0-

     with a current outstanding issue size less
     than C$200,000,000 and with a
     remaining term to maturity equal to or
     longer than 5 years but less than 7 years
     from the Valuation Date                              1.420           ----

     with a current outstanding issue size of at
     least C$200,000,000 but less than
     C$500,000,000 and with a remaining
     term to maturity equal to or longer than 5
     years but less than 7 years from the
     Valuation Date                                       1.420          1.305

                                       21

<PAGE>

                                                        Moody's        S&P
                                                       Discount      Discount
          Type of Eligible Portfolio Property         Factor(5)(6)    Factor
----------------------------------------------------- -----------    ---------
     with a current outstanding issue size
     equal to or greater than C$500,000,000
     and with a remaining term to maturity
     equal to or longer than 5 years
     but less than 7 years from the Valuation Date        1.420         1.186

                       -0-

     with a current outstanding issue size less
     than C$200,000,000 and with a
     remaining term to maturity equal to or
     longer than 7 years but less than 10 years
     from the Valuation Date                              1.510          ----

     with a current outstanding issue size of at
     least C$200,000,000 but less than
     C$500,000,000 and with a remaining
     term to maturity equal to or longer than 7
     years but less than 10 years from the
     Valuation Date                                       1.510         1.305

     with a current outstanding issue size
     equal to or greater than C$500,000,000
     and with a remaining term to maturity
     equal to or longer than 7 years but less
     than 10 years from the Valuation Date                1.510         1.186

                       -0-

     with a current outstanding issue size less
     than C$200,000,000 and with a
     remaining term to maturity equal to or
     longer than 10 years but less than 15
     years from the Valuation Date                        1.510          ----

     with a current outstanding issue size of at
     least C$200,000,000 but less than
     C$500,000,000 and with a remaining
     term to maturity equal to or longer than
     10 years but less than 15 years from the
     Valuation Date                                       1.510         1.459

     with a current outstanding issue size
     equal to or greater than C$500,000,000
     and with a remaining term to maturity
     equal to or longer than 10 years but less
     than 15 years from the Valuation Date                1.510         1.326

                                       22

<PAGE>

<TABLE>
<CAPTION>
                                                                 Moody's                    S&P
                                                                 Discount                 Discount
          Type of Eligible Portfolio Property                    Factor (5)(6)             Factor
-------------------------------------------------------       -------------------      --------------
<S>                                                           <C>                      <C>
                         -0-

     with a current outstanding issue size less than
     C$200,000,000 and with a remaining term to
     maturity equal to or longer than 15 years from the
     Valuation Date                                                  1.820                   ----

     with a current outstanding issue size of at least
     C$200,000,000 but less than C$500,000,000 and with
     a remaining term to maturity equal to or longer
     than 15 years from the Valuation Date                           1.820                  1.459

     with a current outstanding issue size equal to or
     greater than C$500,000,000 and with a remaining
     term to maturity equal to or longer than 15 years
     from the Valuation Date                                         1.820                  1.326

                         -0-

GNMA Certificates with fixed interest rates                             (7)                 1.300
GNMA Certificates with adjustable interest rates                     1.450                  1.300
</TABLE>

                                       23

<PAGE>

<TABLE>
<CAPTION>
                                                                    Moody's                 S&P
                                                                    Discount              Discount
          Type of Eligible Portfolio Property                        Factor (10)           Factor
-------------------------------------------------------          ------------------    --------------
<S>                                                                <C>                   <C>
FHLMC and FNMA Certificates with fixed interest rates                (7)                   1.350
FHLMC and FNMA Certificates with adjustable interest
     rates                                                           1.290                 1.350
FHLMC Multifamily Securities                                                               1.650
FHLMC and FNMA Certificates with variable interest
     rates                                                                                 1.350
GNMA Graduated Payment Securities                                                          1.500   (7)(8)(9)

United Kingdom Currency                                              1.160                 1.600

United Kingdom Government Securities:
     with any current outstanding issue size and with a
     remaining term to maturity shorter than 46 days
     from the Valuation Date                                         1.000 (1)             1.000

     with a current outstanding issue size equal to or
     less than (Pounds)500,000,000 and with a remaining
     term to maturity equal to or longer than 46 days
     but not more than 3 years from the Valuation Date               1.440                  ----

     with a current outstanding issue size of at least
     (Pounds)500,000,000 but less than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or longer than 46 days but not
     more than 3 years from the Valuation Date                       1.440                 1.415

     with a current outstanding issue size equal to or
     greater than (Pounds)700,000,000 and with a
     remaining term to maturity equal to or longer than
     46 days but not more than 3 years from the
     Valuation Date                                                  1.440                 1.286

                           -0-

     with a current outstanding issue size equal to or
     less than (Pounds)500,000,000 and with a remaining
     term to maturity equal to or longer than 3 years
     but not more than 5 years from the Valuation Date               1.530                  ----
</TABLE>

                                       24

<PAGE>

<TABLE>
<CAPTION>
                                                                    Moody's                S&P
                                                                    Discount             Discount
          Type of Eligible Portfolio Property                        Factor (10)          Factor
-------------------------------------------------------          ------------------   --------------
<S>                                                              <C>                  <C>
     with a current outstanding issue size of at least
     (Pounds)500,000,000 but less than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or longer than 3 years but less
     than 5 years from the Valuation Date                             1.530                1.415

     with a current outstanding issue size of at least
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or longer than 3 years but less
     than 5 years from the Valuation Date                             1.530                1.286

                         -0-

     with a current outstanding issue size less than
     (Pounds)500,000,000 and with a remaining term to
     maturity equal to or greater than 5 years but less
     than 7 years from the Valuation Date                             1.630                 ----

     with a current outstanding issue size of at least
     (Pounds)500,000,000 but less than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or greater than 5 years but less
     than 7 years from the Valuation Date                             1.630                1.443

     with a current outstanding issue size greater than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or greater than 5 years but less
     than 7 years from the Valuation Date                             1.630                1.312

                         -0-

     with a current outstanding issue size equal to or
     less than (Pounds)500,000,000 and with a remaining
     term to maturity equal to or longer than 3 years
     but not more than 5 years from the Valuation Date                1.530                 ----
</TABLE>

                                       25

<PAGE>

<TABLE>
<CAPTION>
                                                                 Moody's                 S&P
                                                                 Discount              Discount
          Type of Eligible Portfolio Property                     Factor (10)           Factor
-------------------------------------------------------       ------------------    --------------
     <S>                                                      <C>                   <C>
     with a current outstanding issue size of at least
     (Pounds)500,000,000 but less than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or longer than 3 years but less
     than 5 years from the Valuation Date                           1.530                1.415

     with a current outstanding issue size of at least
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or longer than 3 years but less
     than 5 years from the Valuation Date                           1.530                1.286

                         -0-

     with a current outstanding issue size less than
     (Pounds)500,000,000 and with a remaining term to
     maturity equal to or greater than 5 years but less
     than 7 years from the Valuation Date                           1.630                 ----

     with a current outstanding issue size of at least
     (Pounds)500,000,000 but less than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or greater than 5 years but less
     than 7 years from the Valuation Date                           1.630                1.443

     with a current outstanding issue size greater than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or greater than 5 years but less
     than 7 years from the Valuation Date                           1.630                1.312

                         -0-

     with a current outstanding issue size less than
     (Pounds)500,000,000 and with a remaining term to
     maturity equal to or longer than 7 years but less
     than 10 years from the Valuation Date                          1.680                 ----

     with a current outstanding issue size of at least
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or longer than 7 years but less
     than 10 years from the Valuation Date                          1.680                1.443
</TABLE>

                                       26

<PAGE>

<TABLE>
<CAPTION>
                                                                 Moody's                S&P
                                                                 Discount             Discount
          Type of Eligible Portfolio Property                     Factor (10)          Factor
-------------------------------------------------------       ------------------    ------------
     <S>                                                      <C>                   <C>
     with a current outstanding issue size of at least
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or longer than 7 years but less
     than 10 years from the Valuation Date                         1.680                1.312

     with a current outstanding issue size less than
     (Pounds)500,000,000 and with a remaining term to
     maturity equal to or greater than 10 years but
     less than 15 years from the Valuation Date                    1.680                 ----

     with a current outstanding issue size of at least
     (Pounds)500,000,000 but less than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or greater than 10 years but
     less than 15 years from the Valuation Date                    1.680                1.507

     with a current outstanding issue size equal to or
     greater than (Pounds)700,000,000 and with a
     remaining term to maturity equal to or greater
     than 10 years but less than 15 years from the
     Valuation Date                                                1.680                1.370

                          -0-

     with a current outstanding issue size less than
     (Pounds)500,000,000 and with a remaining term to
     maturity equal to or greater than 15 years from the
     Valuation Date                                                l.680                 ----

     with a current outstanding issue size of at least
     (Pounds)500,000,000 but less than or equal to
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or greater than 15 years from the
     Valuation Date                                                1.680                1.569

     with a current outstanding issue size greater than
     (Pounds)700,000,000 and with a remaining term to
     maturity equal to or greater than 15 years from the
     Valuation Date                                                1.680                1.426

                          -0-
</TABLE>

                                       27

<PAGE>

<TABLE>
<CAPTION>
                                                                    Moody's                S&P
                                                                    Discount             Discount
          Type of Eligible Portfolio Property                        Factor (10)          Factor
-------------------------------------------------------          ------------------    ------------
<S>                                                              <C>                   <C>
U.S. Government Obligations having a remaining term to
     maturity of 90 days or less                                      1.060                1.000

U.S. Government Obligations having a remaining term to
     maturity of more than 90 days but not more than
     one year                                                         1.060                1.060

U.S. Government Obligations having a remaining term to
     maturity of more than one year but not more than
     two years                                                        1.110                1.200

U.S. Government Obligations having a remaining term to
     maturity of more than two years but not more than
     three years                                                      1.150                1.200

U.S. Government Obligations having a remaining term to
     maturity of more than three years but not more
     than four years                                                  1.200                1.200

U.S. Government Obligations having a remaining term to
     maturity of more than four years but not more than
     five years                                                       1.240                1.200

U.S. Government Obligations having a remaining term to
     maturity of more than five years but not more than
     seven years                                                      1.290                1.250

U.S. Government Obligations having a remaining term to
     maturity of more than seven years but not more
     than 10 years                                                    1.340                1.250

U.S. Government Obligations having a remaining term to
     maturity of more than 10 years but not more than
     15 years                                                         1.370                1.300

U.S. Government Obligations having a remaining term to
     maturity of more than 15 years but not more than
     20 years                                                         1.410                1.380

U.S. Government Obligations having a remaining term to
     maturity of more than 20 years but not more than
     30 years                                                         1.420                1.380
</TABLE>

_________________________________________________________

(1)  In the case of Moody's, the remaining term to maturity of Moody's Eligible
     Portfolio Property with a Moody's Discount Factor of 1.000 shall be
     measured from the last Valuation Date on which the Moody's Test was met for
     the purpose of determining the

                                       28

<PAGE>

     number of shares of AMPS to be redeemed which would result in satisfaction
     of the Moody's Test as contemplated by paragraph 4(a)(ii) hereof.

(2)  Provided that in the case of S&P, the current outstanding issue size (as
     determined on each Quarterly Valuation Date) is equal to or greater than
     A$l0,000,000.

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

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

(5)  In the case of Moody's, with an original principal balance of at least
     C$150,000,000.

(6)  In the case of Moody's, assets with a remaining maturity of greater than 20
     years may not constitute more than 5% of Moody's Eligible Portfolio
     Property.

(7)  The Discount Factor determined therefor in writing by the Rating Agency.

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

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

(10) In the case of Moody's, with an original principal balance of at
     least (Pounds)600,000,000.

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

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

         (a)  the aggregate of the product of

              (i)  the number of shares of AMPS Outstanding on such date
     multiplied by $50,000,

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

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<PAGE>

              (iii) a fraction, the numerator of which is the number of days in
     the Dividend Period ending on the next Dividend Payment Date (determined by
     including the first day thereof but excluding the last day thereof) and the
     denominator of which is 365;

                    plus

         (b) dividends accumulated but unpaid (whether or not earned or
declared) for any prior dividend periods with respect to any of the AMPS;

                    plus

         (c) the aggregate amount of all liabilities existing on such date which
are payable on or prior to the next Dividend Payment Date;

                    less

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

                    plus

              (ii)  the value of Eligible Portfolio Property sold as of such
     date determined in accordance with paragraph 9(d) hereof;

                    plus

              (iii) interest on Eligible Portfolio Property which is scheduled
     to be paid on or prior to the next Dividend Payment Date.

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

         "Dividend Payment Date," with respect to AMPS, has the meaning set
forth in paragraph 2(b)(i) hereof.

         "Dividend Period" means the Initial Dividend Period, any 7-Day Dividend
Period, and any Special Dividend Period.

         "Dollar" or "$" shall mean U.S. dollars. Amounts in Canadian,
Australian or New Zealand dollars or United Kingdom pounds sterling shall be
converted to U.S. dollars at the rates reported by the Pricing Service for the
date of determination or such other source as shall have been approved in
writing by the Rating Agencies.

                                       30

<PAGE>

         "Eligible Portfolio Property" means S&P Eligible Portfolio Property and
Moody's Eligible Portfolio Property.

         "Existing Holder" means a Person who has signed a Purchaser's Letter
and is listed as the holder of record of shares of AMPS in the Stock Books.

         "Failure to Cure" means the failure by the Corporation to satisfy the
Moody's Test, the S&P Test or the 1940 Act Asset Coverage requirement, as the
case may be, which failure is not cured by the relevant Cure Date.

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

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

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

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

         "FNMA" means the Federal National Mortgage Association, a United States
Government-sponsored private corporation established pursuant to Title VIII of
the Housing and Urban Development Act of 1968, and includes any successor
thereto.

         "FNMA Certificate" means a mortgage pass-through certificate in
physical or book-entry form, the full and timely payment of principal of and
interest on which is guaranteed by FNMA, and which evidences a proportional
undivided interest in specified pools of fixed-,

                                       31

<PAGE>

variable- or adjustable-rate, fully amortizing, level pay mortgage loans with
terms up to 30 years, secured by first liens on 1 to 4 family residences.

         "Forward Contract" means a contract, entered into following a Failure
to Cure, between the Corporation and a commercial bank or other financial
institution whose short-term debt is rated at least A-l+ by S&P or whose
long-term debt is rated at least AA of S&P (an "Eligible Bank"), which provides
that the Corporation will sell a specified amount of Australian Currency,
Canadian Currency, United Kingdom Currency or New Zealand Currency to such
Eligible Bank on a specified date for a specified amount of U.S. dollars. The
date of payment in U.S. dollars shall not be later than the 30th day following
the Valuation Date related to the Failure to Cure and the amount of U.S. dollars
shall be sufficient to redeem all shares of AMPS required to be redeemed. On the
Date of Original Issue and on each Quarterly Valuation Date thereafter, the
Corporation will confirm in writing to S&P that the Corporation has a
credit-line with an Eligible Bank (the "Credit Line Test"). The Credit Line Test
shall be deemed to be satisfied on any date if the Corporation has delivered
such confirmation to S&P on the Date of Original Issue or the most recent
Quarterly Valuation Date, as the case may be.

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

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

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

         "GNMA Multifamily Security" means a fully modified certificate in
physical or book-entry form, the full and timely payment of principal of and
interest on which is guaranteed by GNMA, which obligation is backed by the full
faith and credit of the United States, and which evidences a proportional
undivided interest in specified pools of fixed-rate mortgage, level pay loans
with terms up to 30 years secured by first-priority mortgages on multifamily
residences, the inclusion of which in the Eligible Portfolio Property will not,
in and of itself, impair or cause the AMPS to fail to retain the rating assigned
to such AMPS by each of the Rating Agencies as evidenced by a letter to such
effect from each of the Rating Agencies.

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

                                       32

<PAGE>

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

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

               (1)  Aerospace and Defense: Major Contractor, Subsystems,
         Research, Aircraft Manufacturing, Arms, Ammunition;

               (2)  Automobile: Automotive Equipment, Auto-Manufacturing, Auto
         Parts Manufacturing, Personal Use Trailers, Motor Homes, Dealers;

               (3)  Banking: Bank Holding, Savings and Loans, Consumer Credit,
         Small Loan, Agency, Factoring, Receivables;

               (4)  Beverage, Food and Tobacco: Beer and Ale, Distillers, Wines
         and Liquors, Distributors, Soft Drink Syrup, Bottlers, Bakery, Mill
         Sugar, Canned Foods, Corn Refiners, Dairy Products, Meat Products,
         Poultry Products, Snacks, Packaged Foods, Distributors, Candy, Gum,
         Seafood, Frozen Food, Cigarettes, Cigars, Leaf/Snuff, Vegetable Oil;

               (5)  Buildings and Real Estate: Brick, Cement, Climate Controls,
         Contracting, Engineering, Construction, Hardware, Forest Products
         (building-related only), Plumbing, Roofing, Wallboard, Real Estate,
         Real Estate Development, REITs, Land Development;

               (6)  Chemicals, Plastics and Rubber: Chemicals (non-agriculture),
         Industrial Gases, Sulphur, Plastics, Plastic Products, Abrasives,
         Coatings, Paints, Varnish, Fabricating;

               (7)  Containers, Packaging and Glass: Glass, Fiberglass,
         Containers made of: Glass, Metal, Paper, Plastic, Wood or Fiberglass;

               (8)  Personal and Non-Durable Consumer Products (Manufacturing
         Only): Soaps, Perfumes, Cosmetics, Toiletries, Cleaning Supplies,
         School Supplies;

               (9)  Diversified/Conglomerate Manufacturing;

               (10) Diversified/Conglomerate Service;

               (11) Diversified Natural Resources, Precious Metals and Minerals:
         Fabricating, Distribution, Mining and Sales;

               (12) Ecological: Pollution Control, Waste Removal, Waste
         Treatment, Waste Disposal;

                                       33

<PAGE>

               (13) Electronics: Computer Hardware, Electric Equipment,
         Components, Controllers, Motors, Household Appliances, Information
         Service Communication Systems, Radios, TVs, Tape Machines, Speakers,
         Printers, Drivers, Technology;

               (14) Finance: Investment Brokerage, Leasing, Syndicating,
         Securities;

               (15) Farming and Agriculture: Livestock, Grains, Produce,
         Agricultural Chemicals, Agricultural Equipment, Fertilizers;

               (16) Grocery: Grocery Stores, Convenience Food Stores;

               (17) Healthcare, Education and Childcare: Ethical Drugs,
         Proprietary Drugs, Research, Health Care Centers, Nursing Homes, HMOs,
         Hospitals, Hospital Supplies, Medical Equipment;

               (18) Home and Office Furnishings, Housewares, and Durable
         Consumer Products: Carpets, Floor Coverings, Furniture, Cooking,
         Ranges;

               (19) Hotels, Motels, Inns and Gaming;

               (20) Insurance: Life, Property and Casualty, Broker, Agent,
         Surety;

               (21) Leisure, Amusement, Motion Pictures, Entertainment: Boating,
         Bowling, Billiards, Musical Instruments, Fishing, Photo Equipment,
         Records, Tapes, Sports, Outdoor Equipment (Camping), Tourism, Resorts,
         Games, Toy Manufacturing, Motion Picture Production Theaters, Motion
         Picture Distribution;

               (22) Machinery (Non-Agriculture, Non-Construction,
         Non-Electronic): Industrial, Machine Tools, Steam Generators;

               (23) Mining, Steel, Iron and Non-Precious Metals: Coal, Copper,
         Lead, Uranium, Zinc, Aluminum, Stainless Steel, Integrated Steel, Ore
         Production, Refractories, Steel Mill Machinery, Mini-Mills,
         Fabricating, Distribution and Sales;

               (24) Oil and Gas: Crude Producer, Retailer, Well Supply, Service
         and Drilling;

               (25) Personal, Food and Miscellaneous Services;

               (26) Printing, Publishing and Broadcasting: Graphic Arts, Paper,
         Paper Products, Business Forms, Magazines, Books, Periodicals,
         Newspapers, Textbooks, Radio, TV, Cable, Broadcasting Equipment;

                                       34

<PAGE>

               (27) Cargo Transport: Rail, Shipping, Railroads, Rail-care
         Builders, Ship Builders, Containers, Container Builders, Parts,
         Overnight Mail, Trucking, Truck Manufacturing, Trailer Manufacturing,
         Air Cargo, Transport;

               (28) Retail Stores: Apparel, Toy, Variety, Drugs, Department,
         Mail Order Catalog, Showroom;

               (29) Telecommunications: Local, Long Distance, Independent,
         Telephone, Telegraph, Satellite, Equipment, Research, Cellular;

               (30) Textiles and Leather: Producer, Synthetic Fiber, Apparel
         Manufacturer, Leather Shoes;

               (31) Personal Transportation: Air, Bus, Rail, Car Rental;

               (32) Utilities: Electric, Water, Hydro Power, Gas, Diversified.

         "Initial Dividend Payment Date" means the Initial Dividend Payment Date
specified herein with respect to the AMPS.

         "Initial Dividend Period," with respect to the AMPS, has the meaning
set forth in paragraph 2(c)(i) hereof.

         "Initial Dividend Rate," with respect to the AMPS, means the rate per
annum specified herein applicable to the Initial Dividend Period.

         "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.

         "Investment Manager" means EquitiLink International Management Limited
or any successor manager to the Corporation who acts in such capacity in
conformance with Section 15 of the 1940 Act.

         "Lien" has the meaning set forth in paragraph 2(d)(iii) hereof.

         "Long Term Dividend Period" means a Special Dividend Period consisting
of a specified period of whole years not greater than five years.

         "Mandatory Redemption Price" means $50,000 per share of AMPS plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared) to the date fixed for redemption.

         "Market Value" means the amount determined with respect to specific
assets of the Corporation in the manner set forth below, it being understood
that Market Value shall include any interest accrued thereon but, in the case of
Moody's, only if the next interest coupon on such asset is due and payable
within 47 days of the Reporting Date, and that a designated Pricing Service may
be used where indicated.

                                       35

<PAGE>

         (a) as to Australian, Canadian and United Kingdom securities, the
Administrator shall value such securities at the last trade price quoted by a
designated Pricing Service if such trade price reflects a trade on, or within 1
local business day prior to, the Reporting Date. If no such trade price is
available, the Administrator shall value such securities, where practicable, at
the bid prices or the mean between the bid and asked price quoted by a
designated Pricing Service on the Reporting Date, or if such quotes are not
readily available, at fair value as determined by either the Administrator or a
designated Pricing Service using methods which include: consideration of yields
or prices of assets of comparable quality, type of issue, coupon, maturity and
rating; indications as to value from dealers; and general market conditions.
Either the Administrator or a designated Pricing Service may employ electronic
data processing techniques and/or a matrix system to determine valuations. In
the event the Administrator or a designated Pricing Service is unable to value a
security, the security shall be valued at the lower of two dealer bids (at least
one of which shall be in writing or by telecopy, telex or other electronic
transcription, computer obtained quotation reduced to written form or similar
means) quoted to the Corporation, by two recognized securities dealers in either
(a) Australia, with respect to Australian securities, (b) Canada, with respect
to Canadian securities or (c) the United Kingdom, with respect to United Kingdom
securities, such securities dealers making a market in the applicable
securities.

         (b) as to GNMA Certificates, GNMA Graduated Payment Securities, FNMA
Certificates, FHLMC Certificates and FHLMC Multifamily Securities, the
Administrator shall value such securities as the product of (i) the aggregate
unpaid principal amount of the mortgage loans evidenced by each such certificate
or security, as the case may be, as of the close of business in New York City on
the last Business Day prior to such date of determination and (ii) the lower of
the bid prices for the same kind of certificate or, if not available, some other
security having, as nearly as practicable, comparable interest rates and
maturities, as quoted to the Corporation by two nationally recognized securities
dealers, who are members of the National Association of Securities Dealers
selected by the Corporation and making a market therein, with at least one such
quotation in writing plus, (x) if the determination is being made for Moody's,
accrued interest to the date of determination if the next interest coupon on
such security is due and payable within 56 days of such date of determination
and (y) if the determination is being made for S&P, accrued interest;

         (c) as to Australian, Canadian and United Kingdom Currency and as to
Cash, demand deposits (and in the case of S&P only, bankers' acceptances)
included in Short Term Money Market Instruments, the Administrator shall value
such currency or securities as the face value thereof;

         (d) as to next Business Day repurchase agreements, the face value
thereof; and

         (e) as to U.S. Government Obligations, the Administrator shall value
such securities at the bid prices quoted by a designated Pricing Service or the
mean between the bid and asked price quoted by a designated Pricing Service on
the Reporting Date, or if such quotes are not readily available, at fair value
as determined by either the Administrator or a designated Pricing Service using
methods which include: consideration of yields or prices of assets of comparable
quality, type of issue, coupon, maturity and rating; indications as to value
from

                                       36

<PAGE>

dealers; and general market conditions. Either the Administrator or a designated
Pricing Service may employ electronic data processing techniques and/or a matrix
system to determine valuations. In the event the administrator or a designated
Pricing Service is unable to value a security, the security shall be valued at
the lower of two dealer bids (at least one of which shall be in writing or by
telecopy, telex or other electronic transcription, computer obtained quotation
reduced to written form or similar means) quoted to the Corporation by two
nationally recognized securities dealers, who are members of the National
Association of Securities Dealers selected by the Corporation and making a
market therein.

         "Maximum Applicable Rate," with respect to AMPS, has the meaning set
forth in paragraph 13 (a) (vii) hereof.

         "Minimum Liquidity Level" means, as of any Valuation Date, an aggregate
Market Value of the Corporation's Dividend Coverage Assets not less than the
Dividend Coverage Amount.

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

         "Moody's Eligible Portfolio Property" means Australian Bank Bills,
Australian Currency, Australian Government Securities, Australian
Semi-Government Securities, Canadian Currency, Canadian Securities, Cash, United
Kingdom Currency, United Kingdom Securities, U.S. Government Obligations, Short
Term Money Market Instruments, FNMA Certificates, FHLMC Certificates, FHLMC
Multifamily Securities, GNMA Certificates and GNMA Graduated Payment Securities,
provided, (x) that not more than 20% in the aggregate of the total Discounted
Value of Moody's Eligible Portfolio Property shall consist of the Australian
Government Securities and/or Australian Semi-Government Securities with a
current outstanding issue size less than A$150,000,000 and (y) that not more
than 10% in the aggregate of the total Discounted Value of Moody's Eligible
Portfolio Property shall consist of Australian Semi-Government Securities
described under items 17, 18 and 19 of such definition.

         "Moody's Test" has the meaning set forth in paragraph 7(a) hereof.

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

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

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

         "1940 Act AMPS Asset Coverage" means asset coverage, as defined in
section 18(h) of the 1940 Act, of at least 200% with respect to all outstanding
senior securities of the Corporation which are stock, including all outstanding
shares of AMPS (or such other asset coverage as may in the future be specified
in or under the 1940 Act as the minimum asset

                                       37

<PAGE>

coverage for senior securities which are stock of a closed-end investment
company as a condition of paying dividends on its common stock).

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

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

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

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

         "Non-Payment Period Rate" means, initially, 300% of the applicable
Reference Rate provided that the Board of Directors of the Corporation shall
have the authority to adjust, modify, alter or change from time to time the
initial Non-Payment Period Rate if the Board of Directors of the Corporation
determines and Moody's and S&P (and any Substitute Rating Agency in lieu of
Moody's or S&P in the event either of such parties shall not rate ____ AMPS)
advise the Corporation in writing that such adjustment, modification, alteration
or change will not adversely affect their then-current ratings on the AMPS.

                                       38

<PAGE>

          "Normal Dividend Payment Date" has the meaning set forth in paragraph
2(b)(1) hereof.

          "Notice of Redemption" means any notice with respect to the redemption
of shares of AMPS pursuant to paragraph 4 hereof.

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

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

          "Optional Redemption Price" shall mean $50,000 per share plus an
amount equal to accumulated but unpaid dividends (whether or not earned or
declared) to the date fixed for redemption plus any applicable redemption
premium attributable to the designation of a Premium Call Period.

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

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

          "Person" 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.

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

          "Preferred Stock" means the preferred stock of the Corporation, and
includes the AMPS.

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

          "Pricing Service" shall mean any of Reuters Information Services,
Inc., Telerate Systems, Inc., Bloomberg L.P. or Wood Gundy Inc. or any other
pricing service designated by

                                       39

<PAGE>

the Board of Directors of the Corporation provided the Corporation obtains
written assurance from S&P and Moody's that such designation will not impair the
rating then assigned by S&P and Moody's to the AMPS.

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

          "Purchaser's Letter" means a letter addressed to the Corporation, the
Auction Agent and a Broker-Dealer in which a Person agrees, among other things,
to offer to purchase, purchase, offer to sell and/or sell shares of AMPS as set
forth in paragraph 13 hereof.

          "Quarterly Valuation Date" means the last Valuation Date of January,
April, July and October of each year.

          "Rating" means a rating assigned by S&P or Moody's to a particular
security or to a particular issuer; provided, however, in the case of S&P, a
particular unrated security will be deemed to have received the rating S&P has
assigned to a rated debt security if S&P shall have received a letter from the
President, Vice President, or Treasurer of the Corporation certifying that the
unrated issue is identical to the rated issue in respect of (i) its terms, (ii)
its ranking, (iii) its issuer and (iv) guarantees and any other support
mechanisms provided by the issuer or any third party to enhance the credit of
the rated security.

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

          "Reference Rate" means: (i) with respect to a 7-Day Dividend Period or
a Short Term Dividend Period having fewer than 183 days, the applicable "AA"
Composite Commercial Paper Rate, (ii) with respect to any Short Term Dividend
Period having 183 or more but fewer than 364 days, the applicable U.S. Treasury
Bill Rate and (iii) with respect to any Long Term Dividend Period, the
applicable U.S. Treasury Note Rate.

          "Reporting Date," with respect to any price referred to in the
definition of the Market Value of an item of Eligible Portfolio Property, shall
mean the date as of which the Market Value of such item of Eligible Portfolio
Property is to be determined.

          "Repurchase Agreements" means, repurchase obligations with respect to
a U.S. Government Obligation, FNMA Certificate, FHLMC Certificate or GNMA
Certificate under which the Fund buys such securities from counterparties who
agree to buy back such securities within one Business Day from the date such
repurchase obligations were entered into where the counterparty is either (i) a
depository institution the deposits of which (x) are insured by the Federal
Deposit Insurance Corporation or the Federal Savings and Loan Insurance
Corporation, (y) the commercial paper or other unsecured short-term debt
obligations of which are rated Prime-1 by Moody's and A-1+ by S&P, and (z) the
long-term debt obligations of which are rated at least A-2 by Moody's; or (ii) a
broker-dealer registered as such with the Securities and Exchange Commission
under the Securities Act of 1934, as amended, (x) the commercial paper or other
unsecured short-term debt obligation of which are rated Prime-1 by Moody's and
A-1+ by S&P and (z) the long-term debt obligations of which are rated at least
A-2 by Moody's.

                                       40

<PAGE>

          "Request for Special Dividend Period" has the meaning set forth in
paragraph 2(c)(iii) hereof.

          "Response" has the meaning set forth in paragraph 2(c)(iii) hereof.

          "S&P" means Standard & Poor's Corporation or its successors.

          "S&P Eligible Portfolio Property" means Australian Bank Bills,
Australian Currency, Australian Government Securities, Australian
Semi-Government Securities, Canadian Currency, Canadian Securities, Cash, United
Kingdom Currency, United Kingdom Securities, U.S. Government Obligations, Short
Term Money Market Instruments, FNMA Certificates, FHLMC Certificates, FHLMC
Multifamily Securities, GNMA Certificates, GNMA Graduated Payment Securities,
Australian Eurobonds and Australian Corporate Bonds; provided, that no
Australian Government Securities or Australian Semi-Government Securities
contained in S&P Eligible Portfolio Property shall have a current outstanding
issue size less than A$10,000,000 (as determined on each Quarterly Valuation
Date); provided further that, not more than 10% in the aggregate of the total
Discounted Value of the S&P Eligible Portfolio Property shall consist of
Australian Semi-Government Securities issued by any single issuer (except that
in the case of New South Wales Treasury Corporation, such percentage shall be
25%) and that not more than 20% in the aggregate of the total Market Value of
the S&P Eligible Portfolio Property shall consist of Australian Semi-Government
Securities guaranteed by any single state (except that in the case of each of
Victoria and New South Wales, such percentage shall be 25%).

          "S&P Test" has the meaning set forth in paragraph 7(a) hereof.

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

          "7-Day Dividend Period" means, with respect to the AMPS, a Dividend
Period consisting of seven days.

          "Short Term Dividend Period" means a Dividend Period consisting of a
specified number of days (other than 7), evenly divisible by seven and not fewer
than seven or more than 364.

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

          (a)  demand deposits in, certificates of deposit of, and (in the case
of S&P only, bankers' acceptances) issued by, any depository institution, the
deposits of which are insured by the Federal Deposit Insurance Corporation or
the Federal Savings and Loan Insurance Corporation, provided that, at the time
of the Corporation's investment therein, the commercial paper or other unsecured
short-term debt obligations of such depository institution are rated Prime-1 by
Moody's and A-1+ by S&P and are issued by institutions whose long-term debt
obligations are rated at least A2 by Moody's;

                                       41

<PAGE>

          (b)  commercial paper rated at the time of the Corporation's
investment therein Prime-1 by Moody's and A-1+ by S&P and issued by institutions
whose long-term debt obligations are rated at least A2 by Moody's; provided,
that in the case of Moody's such commercial paper must have a maturity of 270
days or less.

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

          "Specific Redemption Provisions" means, with respect to a Special
Dividend Period either, or any combination of, (i) a period (a "Non-Call
Period") determined by the Board of Directors of the Corporation, after
consultation with the Auction Agent and the Broker-Dealers, during which the
shares of AMPS subject to such Dividend Period shall not be subject to
redemption at the option of the Corporation and (ii) a period (a "Premium Call
Period"), consisting of a number of whole years and determined by the Board of
Directors after consultation with the Auction Agent and the Broker-Dealers,
during each year of which the shares of AMPS subject to such Dividend Period
shall be redeemable at the Corporation's option at a price per share equal to
$50,000 plus accumulated but unpaid dividends plus a premium expressed as a
percentage of $50,000, as determined by the Board of Directors of the
Corporation after consultation with the Auction Agent and the Broker-Dealers.

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

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

          "Subsequent Dividend Period," with respect to AMPS, has the meaning
set forth in paragraph 2(c)(i) hereof.

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

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

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

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

                                       42

<PAGE>

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

          "United Kingdom Government Securities" means, in the case of S&P, all
publicly traded securities issued and guaranteed by the Government of the United
Kingdom with fixed maturities (i.e. no perpetuals) and which are non-callable,
non-convertible and not index-linked and in the case of Moody's, any publicly
traded security which is (i) either issued by the Government of the United
Kingdom and is rated Aaa by Moody's or is guaranteed by the Government of the
United Kingdom or any semi-sovereign United Kingdom entity whose domestic
currency long-term debt is rated Aaa by Moody's (ii) is denominated and payable
in United Kingdom Currency or is convertible into a security constituting
Moody's Eligible Portfolio Property and (iii) is not a variable rate,
indexed-linked, zero coupon or stripped security.

          "United Kingdom Securities" means all United Kingdom Government
Securities.

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

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

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

                                       43

<PAGE>

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

         "Voting Period" has the meaning specified in paragraph 5(b) hereof.

         (b)   The foregoing definitions in Paragraph 1(a) have been established
by the Board of Directors of the Corporation in order to obtain a "aa" rating
from Moody's and a AA rating from S&P on the AMPS on their Date of Original
Issue; and the Board of Directors of the Corporation shall have the authority to
adjust, modify, alter or change from time to time the foregoing definitions and
the restrictions and guidelines set forth thereunder and to add additional
definitions or delete definitions if, where relevant to the rating accorded by
Moody's and S&P or any Substitute Rating Agency, such agency advises the
Corporation in writing that such adjustment, modification, alteration, change,
addition or deletion will not adversely affect its then-current rating on the
AMPS.

     2.  Dividends.

         (a)   The Holders shall be entitled to receive, when as and if declared
by the Board of Directors of the Corporation, out of funds legally available
therefor, cumulative dividends each consisting of cash at the Applicable Rate
and no more, payable on the respective dates set forth below. Dividends on the
shares of AMPS so declared and payable shall be paid in preference to and in
priority over any dividends declared and payable on the Common Stock.

         (b)   (i)   Cash dividends on shares of AMPS shall accumulate from
     the Date of Original Issue and shall be payable, when, as and if declared
     by the Board of Directors commencing on the Initial Dividend Payment Date.
     Following the Initial Dividend Payment Date the dividends on the AMPS will
     be payable, at the option of the Corporation, either (i) with respect to
     any 7-Day Dividend Period or any Short Term Dividend Period of 91 or fewer
     days on the day next succeeding the last day thereof, (ii) with respect to
     any Short Term Dividend Period of more than 91 and fewer than 365 days, on
     the 92nd day thereof, the 183rd day thereof, if any, the 274th day thereof,
     if any, and on the day next succeeding the last day thereof and (iii) with
     respect to any Long Term Dividend Period, quarterly on the first day of
     each January, April, July and October during such Long Term Dividend Period
     and on the day next succeeding the last day thereof (each such date
     referred to in clause (i), (ii) or (iii) being herein referred to as a
     "Normal Dividend Payment Date"), except that (i) if such Normal Dividend
     Payment Date is not a Business Day, then the Dividend Payment Date shall be
     the next succeeding date if both such dates following the Normal Dividend
     Payment Date are Business Days, or (ii) if the date following such Normal
     Dividend Payment Date is not a Business Day, then the Dividend Payment Date
     will be the date next preceding such normal Dividend Payment Date if both
     such date and such Normal Dividend Payment Date are Business Days or (iii)
     if such Normal Dividend Payment Date and either the preceding date or the
     succeeding date are not Business Days, then the Dividend Payment Date shall
     be the first Business Day next preceding such Normal Dividend Payment Date
     that is next succeeded

                                       44

<PAGE>

by a Business Day. Although any particular Dividend Payment Date may not occur
on the originally scheduled date because of the exceptions discussed above, the
next succeeding Dividend Payment Date, subject to such exceptions, will occur on
the next following originally scheduled date. If for any reason a Dividend
Payment Date cannot be fixed as described above, then the Board of Directors
shall fix the Dividend Payment Date. The Initial Dividend Period, 7-Day Dividend
Periods and Special Dividend Periods are hereinafter sometimes referred to as
Dividend Periods. Each dividend payment date determined as provided above is
hereinafter referred to as a "Dividend Payment Date."

               (ii)   Each dividend shall be paid to Holders as they appear in
the Stock Register as of 12:00 noon, New York City time, on the Business Day
preceding the dividend Payment Date. Dividends in arrears for any past Dividend
Period may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to the Holders as they appear on the Stock Register on a
date, not exceeding 15 days prior to the payment date therefor, as may be fixed
by the Board of Directors of the Corporation.

         (c)   (i)    During the period from and including the Date of Original
Issue to but excluding the Initial Dividend Payment Date (the "Initial Dividend
Period"), the Applicable Rate shall be the Initial Dividend Rate. Commencing on
the Initial Dividend Payment Date, the Applicable Rate for each subsequent
dividend period (hereinafter referred to as a "Subsequent Dividend Period"),
which Subsequent Dividend Period shall commence on and include a Dividend
Payment Date and shall end on and include the calendar day prior to the next
Dividend Payment Date, shall be equal to the rate per annum that results from
implementation of the Auction Procedures.

               The Applicable Dividend Rate for each Dividend Period commencing
during a Non-Payment Period shall be equal to the Non-Payment Period Rate; and
each Dividend Period, commencing after the first day of, and during, a
Non-Payment Period shall be a 7-Day Dividend Period. Any amount of any dividend
due on any Dividend Payment Date (if, prior to the close of business on the
second Business Day preceding such Dividend Payment Date, the Corporation has
declared such dividend payable on such Divided Payment Date to the Holders of
such shares of AMPS as of 12:00 noon, New York City time, on the Business Day
preceding such Dividend Payment Date) or redemption price with respect to any
shares of AMPS not paid to such Holders when due may be paid to such Holders in
the same form of funds by 12:00 noon, New York City time, on any of the first
three Business Days after such Dividend Payment Date or due date, as the case
may be, provided that, such amount is accompanied by a late charge calculated
for such period of non-payment at the Non-Payment Period Rate applied to the
amount of such non-payment based on the actual number of days comprising such
period divided by 365. For the purposes of the foregoing, payment to a person in
same-day funds on any Business Day at any time shall be considered equivalent to
payment to such person in New York Clearing House (next-day) funds at the same
time on the preceding Business Day, and any payment made after 12:00 noon, New
York City time, on any Business Day shall be considered to have been made
instead in the same form of funds and to the same person before 12:00 noon, New
York City time, on the next Business Day.

                                       45

<PAGE>

               (ii)   The amount of cash dividends per share of AMPS payable (if
declared) on each Dividend Payment Date of each 7-Day Dividend Period and each
Short Term Dividend Period shall be computed by multiplying the Applicable Rate
for such Dividend Period by a fraction, the numerator of which will be the
number of days in such Dividend Period such share was outstanding and the
denominator of which will be 365, multiplying the amount so obtained by $50,000,
and rounding the amount so obtained to the nearest cent. During any Long Term
Dividend Period, the amount of dividends per share payable on any Dividend
Payment Date shall be computed on the basis of a year consisting of twelve
30-day months.

               (iii)  With respect to each Dividend Period that is a Special
Dividend Period, the Corporation may, at its sole option and to the extent
permitted by law, by telephonic and written notice (a "Request for Special
Dividend Period") to the Auction Agent and to each Broker-Dealer, request that
the next succeeding Dividend Period for the AMPS be a number of days (other than
7), evenly divisible by seven, and not fewer than seven or more than 364 in the
case of a Short Term Dividend Period or a number of whole years not greater than
five years in the case of a Long Term Dividend Period, specified in such notice,
provided that for any Auction occurring after the initial Auction, the
Corporation may not give a Request for Special Dividend Period (and any such
request shall be null and void) unless the Corporation has received written
confirmation from Moody's and S&P that such action would not impair the ratings
then assigned to the AMPS by Moody's and S&P and unless Sufficient Clearing Bids
were made in the last occurring Auction and unless full cumulative dividends and
any amounts due with respect to redemptions payable prior to such date have been
paid in full. Such Request for Special Dividend Period, in the case of a Short
Term Dividend Period, shall be given on or prior to the fourth day but not more
than seven days prior to an Auction Date for the AMPS and, in the case of a Long
Term Dividend Period, shall be given on or prior to the 14th day but not more
than 28 days prior to an Auction Date for the AMPS. Upon receiving such Request
for Special Dividend Period, the Broker-Dealer(s) shall jointly determine
whether, given the factors set forth below, it is advisable that the Corporation
issue a Notice of Special Dividend Period for the AMPS as contemplated by such
Request for Special Dividend Period and the Optional Redemption Price of the
AMPS during such Special Dividend Period and the Specific Redemption Provisions
and shall give the Corporation and the Auction Agent written notice (a
"Response") of such determination by no later than the third day prior to such
Auction Date. In making such determination the Broker-Dealer(s) will consider
(1) existing short-term and long-term market rates and indices of such
short-term and long-term rates, (2) existing market supply and demand for
short-term and long-term securities, (3) existing yield curves for short-term
and long-term securities comparable to the AMPS, (4) industry and financial
conditions which may affect the AMPS, (5) the investment objective of the
Corporation, and (6) the Dividend Periods and dividend rates at which current
and potential beneficial holders of the AMPS would remain or become beneficial
holders. If the Broker-Dealer(s) shall not give the Corporation and the Auction
Agent a Response by such third day or if the Response states that given the
factors set forth above it is not advisable that the Corporation give a Notice
of Special Dividend Period for the AMPS, the Corporation may not give a Notice
of Special Dividend Period in respect of such Request for Special Dividend
Period. In the event the Response indicates that it is advisable that the

                                       46

<PAGE>

Corporation give a Notice of Special Dividend Period for the AMPS, the
Corporation may by no later than the second day prior to such Auction Date give
a notice (a "Notice of Special Dividend Period") to the Auction Agent, the
Securities Depository and each Broker-Dealer which notice will specify (i) the
duration of the Special Dividend Period, (ii) the Optional Redemption Price as
specified in the related Response and (iii) the Specific Redemption Provisions,
if any, as specified in the related Response. The Corporation shall not give a
Notice of Special Dividend Period or, if the Corporation shall have already
given a Notice of Special Dividend Period, the Corporation is required to give
telephonic and written notice (a "Notice of Revocation") to the Auction Agent,
each Broker-Dealer, and the Securities Depository on or prior to the Business
Day prior to the relevant Auction Date if (x) either the 1940 Act AMPS Asset
Coverage is not satisfied or the Corporation shall fail to satisfy either the
Moody's Test or S&P Test in each case on each of the two Valuation Dates
immediately preceding the Business Day prior to the relevant Auction Date on an
actual basis and on a pro forma basis giving effect to the proposed Special
Dividend Period (using as a pro forma dividend rate with respect to such special
Dividend Period the dividend rate which the Broker-Dealers shall advise the
Corporation is an approximately equal rate for securities similar to the AMPS
with an equal dividend period), provided that in calculating the aggregate
Discounted Value of Moody's Eligible Portfolio Property, the Moody's exposure
period shall be deemed to be one week longer than the period utilized to produce
the discount factors assigned by Moody's under the definition of Discount
Factors found in paragraph 1(a), (y) sufficient funds for the payment of
dividends payable on the immediately succeeding Dividend Payment Date have not
been irrevocably deposited with the Auction Agent by the close of business on
the third Business Day preceding the related Auction Date or (z) the
Broker-Dealer(s) jointly advise the Corporation that after consideration of the
factors listed above they have concluded that it is advisable to give a Notice
of Revocation. If the Corporation is prohibited from giving a Notice of Special
Dividend Period as a result of any of the factors enumerated in clause (x), (y)
or (z) of the prior sentence or if the Corporation gives a Notice of Revocation
with respect to a Notice of Special Dividend Period for the AMPS, the next
succeeding Dividend Period for that series will be a 7-Day Dividend Period. In
addition, in the event Sufficient Clearing bids are not made in the applicable
Auction or such Auction is not held for any reason, such next succeeding
Dividend Period will be a 7-Day Dividend Period and the Corporation may not
again give a Notice of Special Dividend Period for the AMPS (and any such
attempted notice shall be null and void) until Sufficient Clearing Bids have
been made in an Auction with respect to a 7-Day Dividend Period.

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

               (ii)   For so long as any share of AMPS is Outstanding, the
Corporation shall not declare, pay or set apart for payment any dividend or
other distribution (other than a dividend or distribution paid in shares of, or
options, warrants or rights to

                                       47

<PAGE>

     subscribe for or purchase, Common Stock or other stock, if any, ranking
     junior to the shares of AMPS as to dividends or upon liquidation) in
     respect of the Common Stock or any other stock of the Corporation ranking
     junior to or on a parity with the shares of AMPS as to dividends or upon
     liquidation, or call for redemption, redeem, purchase or otherwise acquire
     for consideration any shares of the Common Stock or any other such junior
     stock (except by conversion into or exchange for stock of the Corporation
     ranking junior to the shares of AMPS as to dividends and upon liquidation)
     or any other such Parity Stock (except by conversion into or exchange for
     stock of the Corporation ranking junior to or on a parity with the shares
     of AMPS as to dividends and upon liquidation), unless (A) immediately after
     such transaction, the Corporation shall satisfy the Moody's Test and the
     S&P Test and the Corporation shall maintain the 1940 Act AMPS Asset
     Coverage, (B) full cumulative dividends on shares of AMPS due on or prior
     to the date of the transaction have been declared and paid or shall have
     been declared and sufficient funds for the payment thereof deposited with
     the Auction Agent, and (C) the Corporation has redeemed the full number of
     shares of AMPS required to be redeemed by any provision for mandatory
     redemption contained herein.

               (iii)  For so long as any shares of AMPS are outstanding, the
     Corporation shall not create, incur or suffer to exist, or agree to create,
     incur or suffer to exist, or consent to cause or permit in the future (upon
     the happening of a contingency or otherwise) the creation, incurrence or
     existence of any lien, mortgage, pledge, charge, security interest,
     security agreement, conditional sale or trust receipt or other material
     encumbrance of any kind (collectively "Liens") upon any of its Eligible
     Portfolio Property, except for (A) Liens the validity of which are being
     contested in good faith by appropriate proceedings, and, in the case of
     Moody's, with respect to which Moody's has indicated would not affect the
     rating then assigned by Moody's and (B) Liens for taxes that are not then
     due and payable or that can be paid thereafter without penalty.

               (iv)   For so long as the AMPS shall be rated by S&P or Moody's,
     the Corporation shall not borrow money, except for the purpose of clearing
     transactions in portfolio securities, or guaranty another party's
     obligations or, unless it has received written confirmation from S&P and/or
     Moody's that such activity would not adversely affect the respective
     ratings of S&P and/or Moody's, (i) lend securities, (ii) issue any class or
     series of stock ranking prior to or on a parity with any series of AMPS
     with respect to the payment of dividends or the distribution of assets of
     the Corporation, (iii) engage in short sales, (iv) sell or purchase futures
     or options other than Forward Contracts, (v) engage in reverse repurchase
     agreements or (vi) merge or consolidate with any other corporation or
     entity.

         (e)   Each dividend shall consist of cash at the Applicable Dividend
               Rate.

         (f)   No fractional shares of AMPS shall be issued.

     3.  Liquidation Rights. Upon any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, the Holders shall be entitled
to receive, out of the assets of the Corporation available for distribution to
shareholders, before any distribution or payment is made upon any Common Stock
or any other capital stock ranking junior in right of

                                       48

<PAGE>

payment upon liquidation to the AMPS, the sum of $50,000 per share plus
accumulated but unpaid dividends (whether or not earned or declared) thereon to
date of distribution, and after such payment the holders of AMPS will be
entitled to no other payments. If upon liquidation, dissolution or winding up of
the Corporation, the amounts payable with respect to the AMPS and any other
Outstanding class or series of Preferred Stock of the Corporation ranking on a
parity with the AMPS as to payment upon liquidation are not paid in full, the
Holders and the holders of such other class or series will share ratably in any
such distribution of assets in proportion to the respective preferential amounts
to which they are entitled. After payment of the full amount of the liquidating
distribution to which they are entitled, the Holders will not be entitled to any
further participation in any distribution of assets by the Corporation. A
consolidation, merger or statutory share exchange of the Corporation with or
into any other Corporation or entity or a sale, whether for cash, shares of
stock, securities or properties, of all or substantially all or any part of the
assets of the Corporation shall not be deemed or construed to be a liquidation,
dissolution or winding up of the corporation.

     4.  Redemption.

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

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

                   (ii) The Corporation shall redeem, out of funds legally
     available therefor, at the Mandatory Redemption Price per share, shares of
     AMPS to the extent permitted under the 1940 Act and Maryland law, on a date
     fixed by the Board of Directors, if the Corporation fails to satisfy either
     the Moody's Test or the S&P Test as provided in paragraph 7(a) or to
     satisfy the 1940 Act AMPS Asset Coverage as provided in paragraph 6 and
     such failure is not cured on or before the AMPS Basic Maintenance Cure Date
     or the 1940 Act Cure Date (herein respectively referred to as a "Cure
     Date"), as the case may be. The number of shares of AMPS to be redeemed
     shall be equal to the lesser of (i) the minimum number of shares of AMPS
     the redemption of which, if deemed to have occurred immediately prior to
     the opening of business on the Cure Date, together with all shares of other
     Preferred Stock subject to redemption or retirement, would result in
     satisfaction of the Moody's Test or the S&P Test or the 1940 Act AMPS Asset
     Coverage, as the case may be, on such Cure Date (provided that, if there is
     no such minimum number of shares of AMPS and shares of other Preferred
     Stock the redemption of which would have such result, all shares of AMPS
     and other Preferred Stock then Outstanding shall be redeemed), and (ii) the
     maximum number of shares of AMPS,

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<PAGE>

     together with all shares of other Preferred Stock subject to redemption or
     retirement, that can be redeemed out of funds expected to be legally
     available therefor on such redemption date. In determining the number of
     shares of AMPS required to be redeemed in accordance with the foregoing,
     the Corporation shall allocate the number required to be redeemed which
     would result in the satisfaction of the Moody's Test or the S&P Test or the
     1940 Act AMPS Asset Coverage, as the case may be, pro rata among shares of
     AMPS and other Preferred Stock subject to redemption pursuant to provisions
     similar to those contained in this paragraph 4(a)(ii); provided that,
     shares of AMPS which may not be redeemed at the option of the Corporation
     due to the designation of a Non-Call Period applicable to such shares (A)
     will be subject to mandatory redemption only to the extent that other
     shares are not available to satisfy the number of shares required to be
     redeemed and (B) will be selected for redemption in an ascending order of
     outstanding number of days in the Non-Call Period (with shares with the
     lowest number of days to be redeemed first) and by lot in the event of
     shares having an equal number of days in such Non-Call Period. The
     Corporation shall affect such redemption on a Business Day which is not
     later than 30 days after such Cure Date, except that if the Corporation
     does not have funds legally available for the redemption of all of the
     required number of shares of AMPS and shares of other Preferred Stock which
     are subject to mandatory redemption or the Corporation otherwise is unable
     to affect such redemption on or prior to 30 days after such Cure Date, the
     Corporation shall redeem those shares of AMPS which it is unable to redeem,
     on the earliest practicable date on which it is able to effect such
     redemption out of funds legally available therefor.

          (b)  Notwithstanding any other provision of this paragraph 4, no
shares of AMPS may be redeemed pursuant to paragraph 4(a)(i) hereof unless (i)
all dividends in arrears on all remaining outstanding shares of Parity Stock
shall have been or are being contemporaneously paid or declared and set apart
for payment and (ii) if redemption thereof would result in the Corporation's
failure to satisfy either the Moody's Test or the S&P Test. In the event that
less than all the outstanding shares of AMPS are to be redeemed and there is
more than one Holder, the shares of AMPS to be redeemed shall be selected by lot
or such other method as the Corporation shall deem fair equitable.

          (c)  So long as the AMPS shall be rated by Moody's, the Corporation
shall, by the fifth Business Day after a Failure to Cure, be required to hold an
amount, composed of Cash or any other asset constituting Moody's Eligible
Portfolio Property which has a Moody's Discount Factor as of such fifth Business
Day of 1.000 and which matures prior to the date set for redemption which has an
aggregate Discounted Value at least equal to the redemption payment for the
shares of AMPS to be redeemed; provided, however, that this obligation may be
satisfied by depositing Cash in trust as contemplated by paragraph 4(d) below;
and provided further that the Corporation shall sell assets prior to such fifth
Business Day if necessary to meet the requirements of this paragraph (c), it
being understood that in no event shall it sell any asset prior to maturity
which had a Moody's Discount Factor of 1.000 measured as of the last Valuation
Date on which the Moody's Test was met if it would be necessary to utilize such
asset in order to make any redemption payment contemplated by this paragraph 4.

          (d)  Whenever shares of AMPS are to be redeemed, the Corporation, not
less than 5 nor more than 30 days prior to the date fixed for redemption, shall
send a notice ("Notice of

                                       50

<PAGE>

Redemption") by first-class mail, postage prepaid or by facsimile transmission,
to each Holder of shares of AMPS to be redeemed and to the Auction Agent. The
Corporation shall cause the Notice of Redemption to also be published in the
eastern and national editions of The Wall Street Journal. The Notice of
Redemption shall set forth (i) the redemption date, (ii) the amount of the
redemption price, (iii) the aggregate number of shares of AMPS to be redeemed,
(iv) the place or places where shares of AMPS are to be surrendered for payment
of the redemption price, (v) a statement that dividends on the shares to the
redeemed shall cease to accumulate on such redemption date and (vi) the
provision of these Articles Supplementary pursuant to which such shares are
being redeemed. No defect in the Notice of Redemption or in the mailing or
publication thereof shall affect the validity of the redemption proceedings,
except as required by applicable law.

          If the Notice of Redemption shall have been given as aforesaid and,
concurrently or thereafter, the Corporation shall have deposited in trust with
the Auction Agent a cash amount equal to the redemption payment for the shares
of AMPS as to which such Notice of Redemption has been given with irrevocable
instructions and authority to pay the redemption price to the Holders of such
shares, then upon the date of such deposit or, if no such deposit is made, then
upon such date fixed for redemption (unless the Corporation shall default in
making the redemption payment), all rights of the Holders of such shares as such
shareholders of the Corporation by reason of the ownership of such shares will
cease and terminate (except their right to receive the redemption price in
respect thereof but without interest), and such shares shall no longer be deemed
outstanding. The Corporation shall be entitled to receive, from time to time,
from the Auction Agent the interest, if any, on such moneys deposited with it
and the Holders of any shares so redeemed shall have no claim to any of such
interest. In case the Holder of any shares, so called for redemption shall not
claim the redemption payment for his shares within one year after the date of
redemption, the Auction Agent shall, upon demand, pay over to the Corporation
such amount remaining on deposit and the Auction Agent shall thereupon be
relieved of all responsibility to the Holder of such shares called for
redemption and such Holder thereafter shall look only to the Corporation for the
redemption payment.

     5.   Voting Rights

            (a)  General. Each holder of AMPS shall be entitled to one vote for
each share held on each matter on which the holders of the AMPS are entitled to
vote and, except as otherwise provided in the Charter or By-Laws or by law, the
holders of the AMPS and the Common Stock shall vote together as one class on all
matters submitted to the stockholders; provided, however, that at any meeting of
stockholders of the Corporation at which directors are to be elected, the
holders of Preferred Stock of all series, voting separately as a single class,
shall be entitled to elect two members of the Board of Directors, and the
holders of Common Stock, voting separately as a single class, shall be entitled
to elect the balance of the members of the Board of Directors, provided,
further, however, that the identity of the two directors representing the
holders of outstanding shares of Preferred Stock may be designated by the Board
of Directors until the first meeting of the Corporation's stockholders at which
holders of shares of Preferred Stock shall be entitled to vote for the election
of directors.

                                       51

<PAGE>

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

                 (i)  During any period in which (A) dividends on any
     outstanding Preferred Stock of any series shall be due and unpaid in an
     amount equal to two full years' dividends; or (B) the Corporation fails to
     redeem any shares of Preferred Stock that are required to be redeemed
     pursuant to paragraph 4(b) above or that would have been so redeemed but
     for the requirement that redemption be made out of legally available funds,
     or (C) holders of any other shares of Preferred Stock are entitled to elect
     a majority of the directors of the Corporation (the "Voting Period"), the
     number of directors constituting the Board of Directors shall automatically
     be increased by the smallest number that, when added to the two directors
     elected by the holders of Preferred Stock pursuant to paragraph 5(a) above,
     will constitute a majority of the total number of directors so increased;
     and at a special meeting of stockholders, which shall be called and held as
     soon as practicable, and at all subsequent meetings at which directors are
     to be elected, the holders of Preferred Stock of all series voting
     separately as a single class shall be entitled to elect the smallest number
     of additional directors of the Corporation who, together with the two
     directors elected by the holders of Preferred Stock pursuant to paragraph
     5(a) above, will constitute a majority of the total number of directors of
     the Corporation so increased. The terms of office of the persons who are
     directors at the time of that election shall continue.

                 (ii) If the Corporation thereafter shall pay, or declare and
     set apart for payment, in full all dividends payable on all outstanding
     shares of Preferred Stock of all series for all past dividend periods and
     if the Corporation has remedied any failure to redeem shares of Preferred
     Stock that are required to be redeemed pursuant to paragraph 4(a) above,
     and holders of no other series of Preferred Stock are entitled to elect a
     majority of the directors of the Corporation, the Voting Period and the
     voting rights stated in this paragraph 5(b) shall cease, and the terms of
     office of all additional directors elected by the holders of Preferred
     Stock (but not of the directors elected by the holders of Common Stock or
     the two directors regularly elected by the holders of Preferred Stock as
     provided in paragraph 5(a)), shall terminate automatically, subject always,
     however, to the revesting of such voting rights in the holders of shares of
     Preferred Stock upon the further occurrence of any of the events described
     in clauses (A), (B) or (C) of paragraph 5(b)(i).

          (c) Voting Procedures.

                 (i)  As soon as practicable after the accrual of any right of
     the holders of shares of Preferred Stock to elect directors pursuant to
     paragraph 5(b), the Corporation shall call a special meeting of, and mail a
     notice to, such holders of shares of Preferred Stock. Such special meeting
     shall be held not less than 10 nor more than 80 days after the date of
     mailing of such notice. If the Corporation fails to send such notice, the
     meeting may be called by any holder of shares of Preferred Stock on like
     notice. The record date for determining the holders of shares of Preferred
     Stock entitled to notice of and to vote at such special meeting shall be
     the close of business on the fifth Business Day preceding the day in which
     such notice is given. At any such special meeting and at each meeting at
     which directors are elected held during a Voting Period, the holders of

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<PAGE>

     shares of Preferred Stock, voting together as a class (to the exclusion of
     the holders of shares of Common Stock), shall be entitled to elect the
     number of directors prescribed in paragraph 5(b) above on a
     one-vote-per-share basis. At any such meeting or adjournment thereof in the
     absence of a quorum, a majority of the holders of shares of Preferred
     Stock, present in person or by proxy or any officer of the Corporation
     present entitled to preside or act as Secretary of such meeting shall have
     the power to adjourn the meeting without further notice to a date not more
     than 120 days after the original record date for such meeting.

                 (ii)  For purposes of determining any rights of the holders of
     shares of Preferred Stock to vote on any matter, whether such right is
     created by the Articles of Incorporation, these Articles Supplementary, by
     statute or otherwise, only holders of shares of Outstanding Preferred Stock
     shall be entitled to vote.

                 (iii) The directors elected by the holders of shares of
     Preferred Stock pursuant to paragraph 5(b) shall (subject to the provisions
     of any applicable law) be subject to removal for cause only by the vote of
     the holders of at least 80% of the shares of Preferred Stock Outstanding
     and any vacancy resulting from such removal shall be filled for the
     unexpired term by the same vote. Any vacancy on the Board of Directors
     occurring for any other reason (in the case of directors subject to
     election by the holders of shares of Preferred Stock) may be filled only by
     vote of the holders of at least a majority of shares of Preferred Stock
     Outstanding, and if not so filled, such vacancy shall (subject to the
     provisions of any applicable law) be filled by a majority of the remaining
     directors (or the remaining director) who were elected by the holders of
     shares of Preferred Stock. Any other vacancy on the Board of Directors
     during a Voting Period shall be filled and provided in the Corporation's
     By-Laws.

          (d) Right to Vote with Respect to Certain Other Matters. So long as
any shares of AMPS are Outstanding, the Corporation shall not, without the
affirmative vote of the holders of a majority of the shares of Preferred Stock
Outstanding at the time, voting separately as one class: (i) authorize, create
or issue, or increase the authorized or issued amount of, any class or series of
stock ranking prior to or on a parity with any series of Preferred Stock with
respect to payment of dividends or the distribution of assets on liquidation,
other than the authorization, creation or issuance of other series of AMPS or
increase the authorized amount of AMPS or any other Preferred Stock, or (ii)
amend, alter or repeal the provisions of the Charter, whether by merger,
consolidation or otherwise, so as to adversely affect any of the contract rights
expressly set forth in the Charter of holders of shares of AMPS or any other
Preferred Stock. To the extent permitted under the 1940 Act, in the event shares
of more than one series of AMPS are outstanding, the Corporation shall not
approve any of the actions set forth in clause (i) or (ii) which adversely
affects the contract rights expressly set forth in the Charter of a Holder of
shares of a series of AMPS differently than those of a Holder of shares of any
other series of AMPS without the affirmative vote of the holders of at least a
majority of the shares of AMPS of each series adversely affected and outstanding
at such time (each such adversely affected series voting separately as a class).
The Corporation shall notify Moody's and S&P 10 Business Days prior to any such
vote described in clause (i) or (ii). Unless a higher percentage is provided for
under the Charter, the affirmative vote of the holders of a majority of the
Outstanding shares of Preferred Stock, including AMPS, voting together as a
single class, will be required to approve any plan of

                                       53

<PAGE>

reorganization (including bankruptcy proceedings) adversely affecting such
shares or any action requiring a vote of security holders under Section 13(a) of
the 1940 Act. The class vote of holders of shares of Preferred Stock, including
AMPS, described above will, in each case, be in addition to a separate vote of
the requisite percentage of shares of Common Stock and shares of Preferred
Stock, including AMPS, voting together as a single class necessary to authorize
the action in question.

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

              (e)    Exclusive Remedy. Unless otherwise required by law, the
Holders shall not have any relative rights or preferences or other special
rights other than those specifically set forth herein. In the event that the
Corporation fails to pay any dividends on the shares of AMPS or the Corporation
fails to redeem any shares of AMPS which it is required to redeem, or any other
event occurs which requires the mandatory redemption of AMPS and the required
Notice of Redemption has not been given, the exclusive remedy of the Holders
shall be the right to vote for directors pursuant to the provisions of this
paragraph 6. In no event shall the Holders have any right to sue for, or bring a
proceeding with respect to, such dividends or redemptions or damages for the
failure to receive the same.

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

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

     7.   AMPS Basic Maintenance Amount.

              (a)    The Corporation shall maintain, on each Valuation Date, and
shall verify to its satisfaction that it is maintaining on such Valuation Date,
(i) S&P Eligible Portfolio Property having an aggregate Discounted Value equal
to or greater than the AMPS Basic Maintenance Amount, (the "S&P Test") and (ii)
Moody's Eligible Portfolio Property having an aggregate Discounted Value equal
to or greater than the AMPS Basic Maintenance Amount (the "Moody's Test"). Upon
any failure to satisfy either the S&P Test or the Moody's Test, the Corporation
will use its best efforts to alter the composition of its portfolio so as to
satisfy such test on or prior to the AMPS Basic Maintenance Cure Date.

              (b)    On or before 10:00 a.m. New York City time on the fourth
Business Day after (i) the Date of Original Issuance, (ii) each Quarterly
Valuation Date thereafter, (iii) any Valuation Date on which the Corporation
shall fail to satisfy either the Moody's Test or S&P

                                       54

<PAGE>

Test, (iv) any Valuation Date on which it cures its failure to satisfy either
the Moody's Test or S&P Test, (v) any Valuation Date on which it fails to exceed
the Moody's Test or the S&P Test by 25% or more, or (vi) any Valuation Date as
may be specified by S&P, the Corporation shall complete and deliver to Moody's
and S&P and the Auction Agent, in the case of clauses (i) and (ii) and to the
relevant Rating Agency, in the case of clauses (iii) - (vi), an AMPS Basic
Maintenance Report as of the relevant Valuation Date. In addition, on or before
5:00 p.m., New York City time, on the first Business Day after a date on which
shares of Common Stock are repurchased by the Corporation, the Corporation will
also complete and deliver to the Auction Agent, S&P and Moody's an AMPS Basic
Maintenance Report as of the close of business on the date the Common Stock was
repurchased. All such AMPS Basic Maintenance Reports shall be deemed to have
been delivered to Moody's, S&P or the Auction Agent upon receipt of a copy or
telecopy, telex or other electronic transcription thereof if on the same day the
Corporation mails the AMPS Basic Maintenance Report for delivery on the next
possible Business Day. A failure by the Corporation to deliver an AMPS Basic
Maintenance Report as contemplated by this paragraph 7(b) shall be deemed to be
delivery of an AMPS Basic Maintenance Report indicating a failure to satisfy the
Moody's Test and the S&P Test.

              (c)    Within seven Business Days after the required date of
delivery of the initial AMPS Basic Maintenance Report or any AMPS Basic
Maintenance Report delivered with respect to a Quarterly Valuation Date in
accordance with paragraph 7(b) above, the Corporation shall deliver to the
Auction Agent and the Rating Agencies a report or reports (the "Accountant's
Confirmation") reviewing the portfolio calculations, prepared by the
Corporation's Independent Accountants, relating to such AMPS Basic Maintenance
Report (and reviewing the portfolio calculations relating to any other AMPS
Basic Maintenance Report, randomly selected by the Independent Accountants, that
was delivered by the Corporation during the quarter ending on each Quarterly
Valuation Date) substantially to the effect that (i) the Independent Accountants
have read such AMPS Basic Maintenance Report (each, a "Report"); (ii) with
respect to the 1940 Act AMPS Asset Coverage Ratio, AMPS Basic Maintenance Amount
and Minimum Liquidity Level, the result of the calculations set forth in each
Report have been recalculated and are numerically correct; (iii) with respect to
the excess or deficiency of the aggregate Discounted Value of the S&P Eligible
Portfolio Property or the Moody's Eligible Portfolio Property amount when
compared to the AMPS Basic Maintenance Amount, the results of the calculation
set forth in each Report have been recalculated and are numerically correct;
(iv) with respect to the excess or deficiency of the Dividend Coverage Assets
amount when compared to the Minimum Liquidity Level, the result of the
calculations set forth in each Report have been recalculated and are numerically
correct; (v) with respect to (a) any trade price, bid or mean price (or such
alternative permissible factor used in calculating the Market Value) provided to
the Corporation for purposes of valuing securities in the Corporation's
portfolio, the Independent Accountant has compared the price used in such Report
to the trade price, the bid or mean price listed in such Report as provided to
the Corporation and verified that such information agrees; (b) with respect to
the lower of two bid prices provided to the Corporation for purposes of valuing
securities in the portfolio, the Independent Accountants have compared the price
used in each Report with the lower of the two bid prices listed in the Report
and verified that such information agrees (in the event such information does
not agree, the Independent Accountants will provide a listing in their report of
such differences); and (vi) that the assets listed in each Report conform with
the definition of S&P Eligible Portfolio Property or Moody's Eligible Portfolio
Property, as the case may be. If any letter reviewing the portfolio calculations
delivered pursuant to this paragraph

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<PAGE>

shows that an error was made in an AMPS 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 S&P Eligible Portfolio Property or Moody's Eligible Portfolio
Property, as the case may be, was determined by the Independent Accountants, the
calculation or determination made by such Independent Accountants shall be final
and conclusive and shall be binding on the Corporation, and the Corporation
shall promptly amend the AMPS Basic Maintenance Report and deliver the amended
AMPS Basic Maintenance Report to the Auction Agent, S&P and Moody's.

              (d)    For so long as shares of AMPS are rated by Moody's, in
managing the Corporation's portfolio, the Investment Manager will not alter the
composition of the Corporation's portfolio if, in the reasonable belief of the
Investment Manager, the effect of any such alteration would be to cause the
Corporation to have Moody' Eligible Portfolio Property with an aggregate
Discounted Value, as of the immediately preceding Valuation Date, less than the
AMPS Basic Maintenance Amount as of such Valuation Date; provided, however, that
in the event that, as of the immediately preceding Valuation Date, the aggregate
Discounted Value of Moody's Eligible Portfolio Property exceeded the AMPS Basic
Maintenance Amount by 25% or less, the Investment Manager will not alter the
composition of the Corporation's portfolio in a manner reasonable expected to
reduce the aggregate Discounted Value of Moody's Eligible Portfolio Property
unless the Corporation shall have confirmed that, after giving effect to such
alteration, the aggregate Discounted Value of Moody's Eligible Portfolio
Property would exceed the AMPS Basic Maintenance Amount.

      8.  Liquidity Coverage.

              (a)    For so long as the AMPS shall be rated by S&P, as of each
Valuation Date as long as any shares of AMPS are Outstanding, the Corporation
shall determine (i) the Market Value of the Dividend Coverage Assets owned by
the Corporation as of that Valuation Date, (ii) the Dividend Coverage Amount on
that Valuation Date, and (iii) whether the Minimum Liquidity Level is met as of
the Valuation Date. The calculations of the Dividend Coverage Assets, the
Dividend Coverage Amount and whether the Minimum Liquidity Level is met shall be
set forth in a certificate (a "Certificate of Minimum Liquidity") dated as of
the Valuation Date. The AMPS Basic Maintenance Report and the Certificate of
Minimum Liquidity may be combined in one certificate. The Corporation shall
cause the Certificate of Minimum Liquidity to be delivered to the Auction Agent
not later than the close of business on the third Business Day after the
Valuation Date. The Minimum Liquidity Level shall be deemed to be met as of any
date of determination if the Corporation has timely delivered a Certificate of
Minimum Liquidity relating to such date, which states that the same has been met
and which is not manifestly inaccurate. In the event that a Certificate of
Minimum Liquidity is not delivered to the Auction Agent when required, the
Minimum Liquidity Level shall be deemed not to have been met as of the
applicable date.

              (b)    If the Minimum Liquidity Level is not met as of any
Valuation Date, then the Corporation shall purchase or otherwise acquire
Dividend Coverage Assets (with the proceeds from the liquidation of Eligible
Portfolio Property or otherwise) to the extent necessary so that the Minimum
Liquidity Level is met as of the fifth Business Day following such Valuation
Date. The Corporation shall, by such fifth Business Day, provide to the Auction
Agent a Certificate of

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<PAGE>

Minimum Liquidity setting forth the calculations of the Dividend Coverage Assets
and the Dividend Coverage Amount and showing that the Minimum Liquidity Level is
met as of such fifth Business Day together with a report of the custodian of the
Corporation's assets confirming the amount of the Corporation's Dividend
Coverage Assets as of such fifth Business Day and in any event, by the next
Dividend Payment Date.

     9.  Calculation of AMPS Basic Maintenance Amount; Accounting Treatment.

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

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

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

              (d)    With respect to Eligible Portfolio Property sold by the
Corporation as of or prior to the Valuation Date, the Market Value of such
property will be reflected in Eligible Portfolio Property and will be discounted
at the appropriate Discount Factor, provided, however, that if the determination
is being made by Moody's, the sales price of such property will be reflected as
Cash or Australian Currency, Canadian Currency or United Kingdom Currency, as
appropriate, to the extent that such receivable is due and payable within 5
Business Days (determined as for a Valuation Date) and trades generating the
receivable are (i) settled through clearing house firms with respect to which
the issuer has received prior authorization from Moody's or (ii) with
counterparties having a long-term rating by Moody's of at least Baa3 and if the
determination is being made for S&P, the sales price of such property will be
reflected in Cash or Australian Currency, Canadian Currency or United Kingdom
Currency, as appropriate, to the extent that such receivable is due and payable
within 5 Business Days (determined as for a Valuation Date).

    10.  Other Permitted Assets. In addition to Eligible Portfolio Property, the
Corporation may own other assets and securities, if the inclusion of any such
type of assets or securities is deemed by the Board of Directors to be in the
best interest of the Corporation. Other assets and other securities may be
included in a Rating Agency's Eligible Portfolio Property if such Rating Agency
has advised the Corporation in writing that the inclusion of such assets or
securities in Eligible Portfolio Property would not adversely affect its
respective then-current ratings of the shares of AMPS.

    11.  Failure to Satisfy the Moody's Test or the S&P Test. Within ten
Business Days after the date of delivery to the Auction Agent of a AMPS Basic
Maintenance Report in accordance with paragraph 7(b) above relating to any
Valuation Date on which the Corporation failed to satisfy the Moody's Test or
the S&P Test, and relating to the Cure Date with respect to such

                                       57

<PAGE>

failure to satisfy such test, the Independent Accountants will provide to the
Auction Agent and the Rating Agencies an Accountant's Confirmation as to such
AMPS Basic Maintenance Report.

    12.  Notice and Amendments

              (a)    In addition to the authority given the Board of Directors
to from time to time, adjust, modify, alter, change, add to or delete certain
definitions and related terms set forth in paragraph 1(a) as contemplated by
paragraph 1(b) hereof and the authority given the Corporation to interpret the
provisions of paragraph 13 as contemplated by paragraph 13(f), the Board of
Directors of the Corporation shall have the authority to amend, adjust, modify,
alter or change the terms of the Articles Supplementary establishing the Series
W-7 AMPS also without shareholder approval to reflect changes required in
connection with the creation of one or more additional series of Auction Market
Preferred Stock of the same class as the Series W-7 AMPS; provided, however,
that no such additional series shall have any rights or preferences upon
liquidation as to payments of dividends or conditions of redemption or voting
power which are superior to the rights and conditions applicable to the Series
W-7 AMPS, it being intended that every series of Auction Market Preferred Stock
issued by the Corporation is to constitute a series of the same class for
purposes of the 1940 Act.

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

    13.  Auction Procedures.

              (a)    Certain definitions. As used in this paragraph 13, the
following terms shall have the following meanings, unless the context otherwise
requires:

                     (i)    "AMPS" shall mean the shares of AMPS being auctioned
    pursuant to this paragraph 13.

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

                     (iii)  "Available AMPS" shall have the meaning specified in
    paragraph 13(d)(i) below.

                     (iv)   "Bid" shall have the meaning specified in paragraph
    13(b)(i) below.

                     (v)    "Bidder" shall have the meaning specified in
    paragraph 13(b)(i) below.

                     (vi)   "Hold Order" shall have the meaning specified in
    paragraph 13(b)(i) below.

                                       58

<PAGE>

             (vii)  "Maximum Applicable Rate" for any Dividend Period will be
the Applicable Percentage of the Reference Rate. The Applicable Percentage will
be determined based on the lower of the credit rating or ratings assigned on
such date to such shares by Moody's and S&P (or if Moody's or S&P or both shall
not make such rating available, the equivalent of either or both of such ratings
by a Substitute Rating Agency or two Substitute Rating Agencies or, in the event
that only one such rating shall be available, such rating).


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

      "aa3" or higher            AA- or higher              150%
      "a3" to "a1"               A- to A+                   175%
      "baa3" to "baa1"           BBB- to BBB+               250%
      Below "baa3"               Below BBB-                 300%

      The Corporation shall take all reasonable action necessary to enable S&P
and Moody's to provide a rating for the AMPS. If either S&P or Moody's shall not
make such a rating available, or neither S&P nor Moody's shall make such a
rating available, Merrill Lynch, Pierce, Fenner & Smith Incorporated or its
affiliates and successors, after consultation with the Corporation, shall select
a nationally recognized statistical rating organization or two nationally
recognized statistical rating organizations to act as a Substitute Rating Agency
or Substitute Rating Agencies, as the case may be.

             (viii) "Order" shall have the meaning specified in paragraph
13(b)(i) below.

             (ix)   "Sell Order" shall have the meaning specified in paragraph
13(b)(i) below.

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

             (xi)   "Submitted Bid" shall have the meaning specified in
paragraph 13(d)(i) below.

             (xii)  "Submitted Hold Order" shall have the meaning specified in
paragraph 13(d)(i) below.

             (xiii) "Submitted Order" shall have the meaning specified in
paragraph 13(d)(i) below.

                                       59

<PAGE>

            (xiv) "Submitted Sell Order" shall have the meaning specified in
paragraph 13(d)(i) below.

            (xv)  "Sufficient Clearing Bids" shall have the meaning specified in
paragraph 13(d)(i) below.

            (xvi) "Winning Bid Rate" shall have the meaning specified in
paragraph 13(d)(i) below.

      (b) Orders by Existing Holders and Potential Holders.

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

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

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

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

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

                  (B) each Broker-Dealer, using a list of Potential Holders that
shall be maintained in good faith for the purpose of conducting a competitive
Auction, shall contact Potential Holders, including Persons that are not
Existing Holders, on such list to determine the number of Outstanding shares, if
any, of AMPS which each such Potential Holder offers to purchase, provided that
the Applicable Rate for the next succeeding Dividend Period shall not be less
than the rate per annum specified by such Potential Holder. For the purposes
hereof, the communication to a Broker-Dealer of information referred to in
clause (A) or (B) of this paragraph 13(b)(i) is hereinafter referred to as an
"Order" and each Existing Holder and each Potential Holder placing an Order is
hereinafter referred to as a "Bidder"; an Order containing the information
referred to in clause (A) (1) of this paragraph 13(b)(i) is hereinafter referred
to as a "Hold Order"; an Order containing the information referred to in clause
(A)(2) or (B) of this paragraph 13(b)(i) is hereinafter referred to as a "Bid";
and an Order containing the information referred to in clause (A) (3) of this
paragraph 13(b)(i) is hereinafter referred to as a "Sell Order".

                                       60

<PAGE>

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

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

                       (2) such number or a lesser number of Outstanding shares
        of AMPS to be determined as set forth in paragraph 13(e)(i)(D) if the
        Applicable Rate determined on such Auction Date shall be equal to the
        rate per annum specified therein; or

                       (3) a lesser number of Outstanding shares of AMPS to be
        determined as set forth in paragraph 13(e)(ii)(C) if such specified rate
        per annum shall be higher than the Maximum Applicable Rate and
        Sufficient Clearing Bids do not exist.

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

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

                       (2) such number or a lesser number of Outstanding shares
        of AMPS to be determined as set forth in paragraph 13(e)(ii)(C) if
        Sufficient Clearing Bids do not exist.

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

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

                       (2) such number or a lesser number of Outstanding shares
        of AMPS to be determined as set forth in paragraph 13(e)(i)(E) if the
        Applicable Rate determined on such Auction Date shall be equal to the
        rate per annum specified therein.

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

                  (i)  Each Broker-Dealer shall submit in writing or through the
Auction Agent's Auction Processing System to the Auction Agent prior to the
Submission Deadline on each Auction Date all Orders obtained by such
Broker-Dealer and specifying with respect to each Order:

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

                                       61

<PAGE>

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

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

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

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

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

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

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

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

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

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

                  (B) any Bids submitted on behalf of such Existing Holder shall
be considered valid, in the ascending order of their respective rates per annum
if more than one Bid is submitted on behalf of such Existing Holder, up to and
including the

                                       62

<PAGE>

         excess of the number of Outstanding shares of AMPS held by such
         Existing Holder over the number of shares of AMPS subject to any Hold
         Order referred to in paragraph 13 (c)(iv)(A) above (and if more than
         one Bid submitted on behalf of such Existing Holder specifies the same
         rate per annum and together they cover more than the remaining number
         of shares that can be the subject of valid Bids after application of
         paragraph 13(c)(iv)(A) above and of the foregoing portion of this
         paragraph 13(c)(iv)(B) to any Bid or Bids specifying a lower rate or
         rates per annum, the number of shares subject to each of such Bids
         shall be reduced pro rata so that such Bids, in the aggregate, cover
         exactly such remaining number of shares); and the number of shares, if
         any, subject to Bids not valid under this paragraph 13(c)(iv)(B) shall
         be treated as the subject of a Bid by a Potential Holder; and

                             (C) any Sell Order shall be considered valid up to
         and including the excess of the number of Outstanding shares of AMPS
         held by such Existing Holder over the number of shares of AMPS subject
         to Hold Orders referred to in paragraph 13(c)(iv)(A) and Bids referred
         to in paragraph 13(c)(iv)(B); provided that if more then one Sell Order
         is submitted on behalf of any Existing Holder and the number of shares
         of AMPS subject to such Sell Orders is greater than such excess, the
         number of shares of AMPS subject to each of such Sell Orders shall be
         reduced pro rata so that such Sell Orders, in the aggregate, cover
         exactly the number of shares of AMPS equal to such excess.

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

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

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

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

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

                                       63

<PAGE>

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

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

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

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

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

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

             (ii)   Promptly after the Auction Agent has made the determinations
     pursuant to paragraph 13(d)(i), the Auction Agent shall advise the
     Corporation of the Maximum Applicable Rate and, based on such
     determinations, the Applicable Rate for the next succeeding Dividend Period
     as follows:

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

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

                    (C)  if all of the Outstanding shares of AMPS are the
     subject of Submitted Hold Orders, that the Dividend Period next succeeding
     the Auction shall automatically be the same length as the immediately
     preceding Dividend Period and the Applicable Rate for the next succeeding
     Dividend Period shall be equal to 90% of the Reference Rate on the date of
     the Auction.

                                       64

<PAGE>

          (e)  Acceptance and Rejection of Submitted Bids and Submitted Sell
Orders and Allocation of Shares. Based on the determinations made pursuant to
paragraph 13(d)(i), the Submitted Bids and Submitted Sell Orders shall be
accepted or rejected and the Auction Agent shall take such other action as set
forth below:

                 (i)   If Sufficient Clearing Bids have been made, subject to
     the provisions of paragraph 13(e)(iii) and paragraph 13(e)(iv), Submitted
     Bids and Submitted Sell Orders shall be accepted or rejected in the
     following order of priority and all other Submitted Bids shall be rejected:

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

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

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

                       (D)  the Submitted Bid of each of the Existing Holders
     specifying a rate per annum that is equal to the Winning Bid Rate rejected,
     thus entitling each such Existing Holder to continue to hold the
     Outstanding shares of AMPS that are the subject of such Submitted Bid,
     unless the number of Outstanding shares of AMPS subject to all such
     Submitted Bids shall be greater than the number of Outstanding shares of
     AMPS ("Remaining Shares") equal to the excess of the Available AMPS over
     the number of Outstanding shares of AMPS subject to Submitted Bids
     described in paragraph 13 (e)(i)(B) and paragraph 13(e) (i)(C), in which
     event the Submitted Bids of each such Existing Holder shall be accepted,
     and each such Existing Holder shall be required to sell Outstanding shares
     of AMPS, but only in an amount equal to the difference between (1) the
     number of Outstanding shares of AMPS then held by such Existing Holder
     subject to such Submitted Bid and (2) the number of shares of AMPS obtained
     by multiplying (x) the number of Remaining Shares by (y) a fraction the
     numerator of which shall be the number of Outstanding shares of AMPS held
     by such Existing Holder subject to such Submitted Bid and the denominator
     of which shall be the sum of the numbers of Outstanding shares of AMPS
     subject to such Submitted Bids made by all such Existing Holders that
     specified a rate per annum equal to the Winning Bid Rate; and

                       (E)  the Submitted Bid of each of the Potential Holders
     specifying a rate per annum that is equal to the Winning Bid Rate shall be
     accepted but only in an amount equal to the number of Outstanding shares of
     AMPS obtained by multiplying (x) the difference between the Available AMPS
     and the number of Outstanding shares of AMPS subject to Submitted Bids
     described in paragraph

                                       65

<PAGE>

     13(e)(i)(B), paragraph 13(e)(i)(C) and paragraph 13(e)(i)(D) by (y) a
     fraction the numerator of which shall be the number of Outstanding shares
     of AMPS subject to such Submitted Bid and the denominator of which shall be
     the sum of the number of Outstanding shares of AMPS subject to such
     Submitted Bids made by all such Potential Holders that specified rates per
     annum equal to the Winning Bid Rate.

                   (ii)   If Sufficient Clearing Bids have not been made (other
     than because all of the Outstanding shares of AMPS are subject to Submitted
     Hold Orders), subject to the provisions of paragraph 13(e)(iii), Submitted
     Orders shall be accepted or rejected as follows in the following order of
     priority and all other Submitted Bids shall be rejected:

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

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

                          (C)   the Submitted Bids of each Existing Holder
     specifying any rate per annum that is higher than the Maximum Applicable
     Rate shall be accepted and the Submitted Sell Orders of each Existing
     Holder shall be accepted, in both cases only in an amount equal to the
     difference between (1) the number of Outstanding shares of AMPS then held
     by such Existing Holder subject to such Submitted Bid or Submitted Sell
     Order and (2) the number of shares of AMPS obtained by multiplying (x) the
     difference between the Available AMPS and the aggregate number of
     Outstanding shares of AMPS subject to Submitted Bids described in paragraph
     13(e)(ii)(A) and paragraph 13(e) (ii)(B) by (y) a fraction the numerator of
     which shall be the number of Outstanding shares of AMPS held by such
     Existing Holder subject to such Submitted Bid or Submitted Sell Order and
     the denominator of which shall be the number of Outstanding shares of AMPS
     subject to all such Submitted Bids and Submitted Sell Orders.

                   (iii)  If, as a result of the procedures described in
     paragraph 13(e) (i) or paragraph 13(e)(ii), any Existing Holder would be
     entitled or required to sell, or any potential Holder would be entitled or
     required to purchase, a fraction of a share of AMPS on any Auction Date,
     the Auction Agent shall, in such manner as in its sole discretion it shall
     determine, round up or down the number of shares of AMPS to be purchased or
     sold by any Existing Holder or Potential Holder on such Auction Date so
     that each Outstanding share of AMPS purchased or sold by each Existing
     Holder or Potential Holder on such Auction Date shall be a whole share of
     AMPS.

                   (iv)   If, as a result of the procedures described in
     paragraph 13(e)(i), any Potential Holder would be entitled or required to
     purchase less than a whole share of AMPS on any Auction Date, the Auction
     Agent shall, in such manner as in its sole discretion it shall determine,
     allocate shares of AMPS for purchase among Potential

                                       66

<PAGE>

     Holders so that only whole shares of AMPS are purchased on such Auction
     Date by any Potential Holder, even if such allocation results in one or
     more of such Potential Holders not purchasing any shares of AMPS on such
     Auction Date.

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

            (f)  Miscellaneous. The Corporation may interpret the provisions of
this paragraph 13 to resolve any inconsistency or ambiguity, remedy any formal
defect or make any other change or modification that does not substantially
adversely affect the rights of Existing Holders of AMPS. An Existing Holder (i)
may sell, transfer or otherwise dispose of shares of AMPS only pursuant to a Bid
or Sell Order in accordance with the procedures described in this paragraph 13
or to or through a Broker-Dealer or to a Person that has delivered a signed copy
of a Purchaser's Letter to the Auction Agent, provided that in the case of all
transfers other than pursuant to Auctions such Existing Holder, its
Broker-Dealer or its Agent Member advises the Auction Agent of such transfer and
(ii) except as otherwise required by law, shall have the ownership of the shares
of AMPS held by it maintained in book entry form by the Securities Depository in
the account of its Agent Member, which in turn will maintain records of such
Existing Holder's beneficial ownership. Neither the Corporation nor any
affiliate shall submit an Order in any Auction. Any Existing Holder that is an
Affiliate shall not sell, transfer or otherwise dispose of shares of AMPS to any
Person other than the Corporation. All of the Outstanding shares of AMPS shall
be represented by a single certificate registered in the name of the nominee of
the Securities Depository unless otherwise required by law or unless there is no
Securities Depository. If there is no Securities Depository, at the
Corporation's option and upon its receipt of such documents as it deems
appropriate, any shares of AMPS may be registered in the Stock Register in the
name of the Existing Holder thereof and such Existing Holder thereupon will be
entitled to receive certificates therefor and required to deliver certificates
therefor upon transfer or exchange thereof.

     14. Securities Depository; Stock Certificates.

            (a)  If there is a Securities Depository, one certificate for all of
the shares of Series W-7 AMPS shall be issued to the Securities Depository and
registered in the name of the Securities Depository or its nominee. Additional
certificates may be issued as necessary to represent shares of AMPS. All such
certificates shall bear a legend to the effect that such certificates are issued
subject to the provisions restricting the transfer of shares of AMPS contained
in these Articles Supplementary and each Purchaser's Letter. Unless the
Corporation shall have elected, during a Non-Payment Period, to waive this
requirement, the Corporation will

                                       67

<PAGE>

also issue stop-transfer instructions to the Auction Agent for the shares of
AMPS. Except as provided in paragraph (b) below, the Securities Depository or
its nominee will be the Holder, and no Existing Holder shall receive
certificates representing its ownership interest in such shares.

          (b)  If the Applicable Rate applicable to all shares of AMPS shall be
the Non-Payment Period Rate or there is no Securities Depository, the
Corporation may at its option issue one or more new certificates with respect to
such shares (without the legend referred to in paragraph 14(a)) registered in
the names of the Existing Holders or their nominees and rescind the
stop-transfer instructions referred to in paragraph 14(a) with respect to such
shares.

     IN WITNESS WHEREOF, THE FIRST COMMONWEALTH FUND, INC. has caused these
presents to be signed in its name and on its behalf by a duly authorized
officer, and its corporate seal to be hereunto affixed and attested by its
Assistant Secretary, and the said officers of the Corporation further
acknowledge said instrument to be the corporate act of the Corporation, and
state under the penalties of perjury that to the best of their knowledge,
information and belief the matters and facts herein set forth with respect to
approval are true in all material respects, all on July 24, 1992.


                             THE FIRST COMMONWEALTH FUND, INC.

                             By:  /s/ Margaret A. Bancroft, attorney in-fact for
                                  ------------------------
                                  Name: Laurence S. Freedman
                                  Title: President

Attest:

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

                                       68

</TEXT>
</DOCUMENT>
