SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:

[   ]    Preliminary Proxy Statement
[   ]    Confidential, for Use of the Commission Only (as permitted by
         Rule 14a-6(e)(2))
[ X ]    Definitive Proxy Statement
[   ]    Definitive Additional Materials
[   ]    Soliciting Material Pursuant to Sec. 240.14a-12

                         BOULDER TOTAL RETURN FUND, INC.
                (Name of Registrant as Specified In Its Charter)


                             Stephen C. Miller, Esq.
                          1680 38th Street, Suite 800
                            Boulder, Colorado 80301
                                 (303) 442-2156

                   (Name of Person(s) Filing Proxy Statement)

Payment of Filing Fee (Check the appropriate box):

[ X ]   No fee required.

[   ]   Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

         1)       Title of each class of securities to which transactions
                  applies:

         2)       Aggregate number of securities to which transaction applies:

         3)       Per unit price or other underlying value of transaction
                  computed pursuant to Exchange Act Rule 0-11 (Set forth the
                  amount on which the filing fee is calculated and state how it
                  was determined):

         4)       Proposed maximum aggregate value of transaction:

         5)       Total fee paid:

[   ]   Fee paid previously with preliminary materials.

[   ]    Check box if any part of the fee is offset as provided by Exchange
         Act Rule 0-11(a)(2) and identity the filing for which the offsetting
         fee was paid previously. Identify the previous filing by registration
         statement number, or the Form or Schedule and the date of its filing.

         1) Amount Previously Paid:
         2) Form, Schedule or Registration Statement No.:
         3) Filing Party:
         4) Date Filed:




[GRAPHIC OMITTED]                                BOULDER TOTAL RETURN FUND, INC.
                                                     1680 38TH STREET, SUITE 800
                                                         BOULDER, COLORADO 80301


March 27, 2006

Dear Fellow Stockholder,

     You are cordially invited to attend the 2006 Annual Meeting of Stockholders
of Boulder Total Return Fund, Inc., a Maryland  corporation (the "Fund"),  which
will be held on April 24, 2006 at 9:00 a.m. Mountain Standard Time (local time),
at the Scottsdale Plaza Resort, 7200 North Scottsdale Road, Scottsdale, Arizona.
Details of the  business  to be  presented  at the  meeting  can be found in the
accompanying Notice of Annual Meeting and Proxy Statement.

     There are two non-routine proposals contained in this Proxy. The first is a
proposal to amend the charter of the Fund (the "Charter") to facilitate a rating
upgrade of the Fund's  taxable  auction  market  preferred  stock (the  "AMPS").
Presently,  the Fund is  leveraged  with  $77.5  million  in AMPS.  The AMPS are
auctioned  every 28 days,  at which time a new interest rate is set and assigned
to  them.   Presently  the  AMPS  are  rated  by  two  national   credit  rating
organizations,  Moody's  Investors  Services,  Inc.  ("Moody's")  and Standard &
Poor's  ("S&P").  The ratings are presently  "Aa1"(Moody's)  and "AA" (S&P).  In
connection with this proposal, these ratings will be upgraded to "Aaa" and "AAA"
respectively.  Since auction  interest  rates are  typically  lower for AMPS and
other financial  instruments that have  higher/better  credit ratings,  the Fund
anticipates  that the upgraded AMPS will receive a better auction  interest rate
for the Fund and thus  could  reduce  the  expenses  associated  with the Fund's
leverage.  Passage of the  proposal  will  require  approval by the holders of a
majority of the AMPS and a majority  of the common  stock  voting  together as a
single class,  and a majority of the AMPS voting as a separate class.  Upgrading
the  ratings  as  described  above is not  conditioned  on the  passage  of this
proposal  as the Fund has other  avenues it can pursue to  upgrade  the  ratings
without amending the Charter.

     The second  non-routine  proposal is a  housecleaning  item that resolves a
conflict  between a provision in the Fund's charter that establishes the size of
the Board of  Directors  at five,  and a provision in the terms of the AMPS that
requires  an increase  in the size of the Board when the AMPS  dividends  are in
arrears for a period of two years.  Under the  proposal,  the charter  provision
would be made subject to the provision in the terms of the AMPS.

     As Chairman of the Board, I encourage you to support each of the proposals.
After  careful  review by those  Directors who are not  "interested  persons" as
defined in the Investment Company Act of 1940 (the "Independent Directors"), the
Board of Directors unanimously approved and has recommended to stockholders that
they approve each of the proposals.

     We hope you plan to attend the meeting. Your vote is important. Whether or
not you are able to attend, it is important that your shares be represented at
the Meeting. At your earliest convenience, we ask that you please complete,
sign, date and return the enclosed Proxy Card or authorize proxies via telephone
or the Internet to cast your vote at the meeting.

     On behalf of the Board of Directors and the management of the Fund, I
extend our appreciation for your continued support.


Sincerely,

/s/ Richard I. Barr

Richard I. Barr
Chairman of the Board






[GRAPHIC OMITTED]                                BOULDER TOTAL RETURN FUND, INC.
                                                     1680 38TH STREET, SUITE 800
                                                        BOULDER, COLORADO  80301


                    NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
                          To Be Held on April 24, 2006


To the Stockholders:

     Notice is hereby given that the Annual Meeting of  Stockholders  of Boulder
Total Return Fund, Inc., a Maryland  corporation  (the "Fund"),  will be held at
the Scottsdale Plaza Resort, 7200 North Scottsdale Road, Scottsdale,  Arizona at
9:00 a.m.  Mountain  Standard Time (local time),  on April 24, 2006, to consider
and vote on the following  Proposals,  all of which are more fully  described in
the accompanying Proxy Statement:

     1.   The election of Directors of the Fund (Proposal 1).

     2.   Amendments  to the  charter  of the Fund  which  will  repeal in their
          entirety all of the  currently  existing  terms of the Fund's  taxable
          auction market  preferred stock and substitute in lieu thereof the new
          terms set forth in the Form of Articles of  Amendment  attached to the
          accompanying Proxy Statement as Exhibit A (Proposal 2).

     3.   An  amendment to the charter of the Fund to provide that the number of
          directors of the Fund shall be five,  subject to the provisions of any
          class or series of Preferred Stock (Proposal 3).

     4.   To  transact  such other  business  as may  properly  come  before the
          Meeting or any adjournments and postponements thereof.

     The Board of Directors of the Fund has fixed the close of business on March
22, 2006 as the record date for the  determination  of  stockholders of the Fund
entitled to notice of and to vote at the Annual Meeting and any postponements or
adjournments thereof.  This Proxy Statement,  Notice of Annual Meeting and proxy
card are first being mailed to stockholders on or about March 27, 2006.


                                  By Order of the Board of Directors,

                                  /s/ Stephanie Kelley

                                  STEPHANIE KELLEY
                                  Secretary

March 27, 2006


--------------------------------------------------------------------------------
STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD OR
AUTHORIZE  PROXIES  VIA  TELEPHONE  OR THE  INTERNET.  THE PROXY CARD  SHOULD BE
RETURNED  IN THE  ENCLOSED  ENVELOPE,  WHICH  NEEDS NO  POSTAGE IF MAILED IN THE
UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON
THE INSIDE COVER.
--------------------------------------------------------------------------------




                      INSTRUCTIONS FOR SIGNING PROXY CARDS


         The following general rules for signing proxy cards may be of
assistance to you and may avoid the time and expense to the Fund involved in
validating your vote if you fail to sign your proxy card properly.

         1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.

         2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.

         3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of registration. For
example:



                                                                    

            Registration                                               Valid Signature

            Corporate Accounts
            (1)  ABC Corp.                                             ABC Corp.
            (2)  ABC Corp.                                             John Doe, Treasurer
            (3)  ABC Corp., c/o John Doe Treasurer                     John Doe
            (4)  ABC Corp. Profit Sharing Plan                         John Doe, Trustee

            Trust Accounts
            (1)  ABC Trust                                             Jane B. Doe, Trustee
            (2)  Jane B. Doe, Trustee, u/t/d 12/28/78                  Jane B. Doe

            Custodian or Estate Accounts
            (1)  John B. Smith, Cust.,                                 John B. Smith
                  f/b/o John B. Smith, Jr. UGMA
            (2)  John B. Smith                                         John B. Smith, Jr., Executor







[GRAPHIC OMITTED]                                BOULDER TOTAL RETURN FUND, INC.
                                                     1680 38TH STREET, SUITE 800
                                                        BOULDER, COLORADO  80301

             QUESTIONS & ANSWERS REGARDING THE MEETING AND PROPOSALS


Question 1: What is the purpose of the Annual Meeting?

Answer:  At the Meeting,  stockholders  will be asked to vote on the election of
directors as well as the approval of amendments to the charter of the Fund which
will repeal in their entirety all of the currently  existing terms of the Fund's
taxable  auction  market  preferred  stock (the "AMPS") and  substitute  in lieu
thereof the new terms set forth in the Form of Articles of Amendment attached to
the accompanying Proxy Statement as Exhibit A.

Question 2: Who is being nominated for election at the Meeting?

Answer:  The Board has nominated the following five  Directors,  each to serve a
one-year term until the annual  meeting in 2007 and until their  successors  are
duly elected and qualify: Richard I. Barr, Joel W. Looney, Dr. Dean L. Jacobson,
Susan L. Ciciora,  and Dennis R. Causier. The holders of Common Stock will elect
three of the five  directors  standing  for election and the holders of the AMPS
will elect the  remaining  two  directors.  Mr.  Barr and Ms.  Ciciora are being
nominated to represent the interests of the holders of the AMPS.

Question 3: Why is the Board recommending Proposal No. 2

Answer: If adopted, Proposal No. 2 would amend and restate the terms of the AMPS
to  facilitate a rating  upgrade of the AMPS.  Presently,  the Fund is leveraged
with $77.5 million of AMPS. The AMPS are auctioned  every 28 days, at which time
a new interest rate is set and assigned to them. Presently the AMPS are rated by
two national  credit rating  organizations,  Moody's  Investors  Services,  Inc.
("Moody's")   and  Standard  &  Poor's   ("S&P").   The  ratings  are  presently
"Aa1"(Moody's)  and "AA" (S&P). In connection with this proposal,  these ratings
are  expected  to be  upgraded to "Aaa" and "AAA"  respectively.  Since  auction
interest rates are typically lower for AMPS and other financial instruments that
have higher/better  credit ratings,  the Fund anticipates that the upgraded AMPS
will receive a better  auction  interest rate for the Fund and thus could reduce
the  expenses  associated  with the Fund's  leverage.  Upgrading  the ratings as
described above is not conditioned on the passage of Proposal No. 2, as the Fund
has other  avenues it can pursue to upgrade the  ratings  without  amending  the
Fund's charter.  Passage of the proposal will require approval by the holders of
a majority of the AMPS and a majority of the common stock  voting  together as a
single class, and a majority of the AMPS voting as a separate class.

Question 4: How do the Horejsi Affiliates (as defined below at Page 2) intend to
vote on Proposal No. 2?

Answer:  The Horejsi Affiliates intend to vote in favor of the proposals.

Question 5: How does the Board recommend that stockholders vote on the various
proposals?

Answer: If no instructions are indicated on your proxy, the representatives
holding proxies will vote in accordance with the recommendations of the Board.
The Board, including all of the non-interested Directors, has unanimously
recommended that stockholders vote FOR all of the Proposals.

Question 6: Who is entitled to vote?

Answer:  Stockholders  of record at the close of business on March 22, 2006 (the
"Record  Date") are  entitled  to notice of and to vote at the  Meeting  and any
postponements  or adjournments  thereof.  Each of the shares  outstanding on the
Record Date is entitled to one vote on each of the Proposals.

Question 7: What is the required quorum for the Meeting?

Answer:  The holders of at least a majority of the  outstanding  shares of stock
(without regard to class) of the Fund must be represented at the Meeting, either
in person or by proxy, in order to constitute a quorum permitting business to be
conducted at the Meeting.  If you have  completed,  executed and returned  valid
proxies (in writing,  by phone or by Internet) or attend the Meeting and vote in
person, your shares will be counted for purposes of determining whether there is
a quorum,  even if you abstain from voting on any or all matters  introduced  at
the Meeting.


Question 8: How do I vote?

Answer:  Your  vote is very  important.  Stockholders  can vote in person at the
Meeting or authorize proxies to cast their votes ("proxy voting") by proxy. Most
stockholders   will  have  a  choice  of  proxy  voting  over  the  Internet  at
http://www.proxyvote.com, by using a toll-free telephone number or by completing
and signing a Proxy Card and mailing it in the postage-paid  envelope  provided.
Please  refer to your  Proxy  Card or the  information  forwarded  by your bank,
broker or other  nominee to see which options are available to you. If you proxy
vote by Internet or telephone, you do NOT need to return your Proxy Card. If you
vote by proxy,  the  individuals  named on the Proxy Card as proxy  holders will
vote your shares in accordance with your  instructions.  You may specify whether
your shares  should be voted for all,  some or none of the nominees for director
and whether your shares should be voted for or against the other  proposals.  If
you execute an otherwise valid proxy but do not provide voting instructions, the
persons  named as proxies or their  substitutes  will cast your votes FOR all of
the Proposals.

Question 9: Can I revoke or change my proxy?

Answer:  Yes. You may change or revoke your proxy at any time before the Meeting
by timely  delivery of a properly  executed,  later-dated  proxy  (including  an
Internet or phone  proxy),  by sending a written  revocation to the Secretary of
the Fund at the Fund's address listed on the accompanying  Notice of Meeting, or
by  attending  and  voting  in person at the  Meeting.  The  powers of the proxy
holders will be suspended  with respect to your shares if you attend the meeting
in person and revoke  your proxy,  but  attendance  at the  Meeting  will not by
itself revoke a previously granted proxy.






[GRAPHIC OMITTED]                                BOULDER TOTAL RETURN FUND, INC.
                                                     1680 38TH STREET, SUITE 800
                                                        BOULDER, COLORADO  80301

                         ANNUAL MEETING OF STOCKHOLDERS
                                 April 24, 2006

                                 PROXY STATEMENT

     This proxy  statement  ("Proxy  Statement")  for Boulder Total Return Fund,
Inc., a Maryland  corporation ("BTF" or the "Fund"),  is furnished in connection
with the solicitation of proxies by the Fund's Board of Directors (collectively,
the "Board" and individually,  the "Directors") for use at the Annual Meeting of
Stockholders  of the Fund to be held on  Monday,  April 24,  2006,  at 9:00 a.m.
Mountain  Standard Time (local time),  at the Scottsdale  Plaza Resort,  7200 N.
Scottsdale Drive, Scottsdale, Arizona, and at any adjournments and postponements
thereof (the  "Meeting").  A Notice of Annual Meeting of Stockholders  and proxy
card accompany this Proxy Statement. Proxy solicitations will be made, beginning
on or about March 27, 2006,  primarily by mail, but proxy solicitations may also
be made by telephone,  by Internet on the Fund's website,  telegraph or personal
interviews  conducted by officers of the Fund and PFPC Inc.,  the transfer agent
of the Fund. Any cost of proxy  solicitation and expenses incurred in connection
with the  preparation of this Proxy Statement and its enclosures will be paid by
the Fund.  The Fund also will  reimburse  brokerage  firms and  others for their
expenses in forwarding  solicitation  material to the  beneficial  owners of its
shares.  The Board has fixed  the  close of  business  on March 22,  2006 as the
record date (the "Record Date") for the  determination of stockholders  entitled
to notice of and to vote at the Meeting and any  postponements  or  adjournments
thereof.

     The Annual Report of the Fund,  including audited financial  statements for
the fiscal  year ended  November  30,  2005,  has been  mailed to  stockholders.
Additional  copies  are  available  upon  request,  without  charge,  by calling
1-800-331-1710.  The report is also  viewable  online at the  Fund's  website at
www.boulderfunds.net.  The report is not to be  regarded  as proxy  solicitation
material.

     Boulder Investment Advisers,  L.L.C.  ("BIA"), 1680 38th Street, Suite 800,
Boulder,  Colorado 80301 and Stewart  Investment  Advisers  ("SIA"),  Bellerive,
Queen Street, St. Peter, Barbados,  currently serve as co-investment advisers to
the Fund.  BIA and SIA are  collectively  referred to herein as the  "Advisers".
Fund Administrative Services, L.L.C., serves as co-administrator to the Fund and
is located at 1680 38th Street,  Suite 800, Boulder,  Colorado 80301.  Investors
Bank & Trust  Company  ("IBT") acts as the  co-administrator  to the Fund and is
located at 200 Clarendon Street, Boston, Massachusetts 02116. PFPC Inc. ("PFPC")
acts as the transfer  agent to the Fund and is located at 4400  Computer  Drive,
Westborough, Massachusetts 01581.

     If the enclosed  proxy is properly  executed and returned by April 24, 2006
in time to be voted at the Meeting,  the Shares (as defined  below)  represented
thereby will be voted in accordance with the instructions marked thereon. Unless
instructions to the contrary are marked  thereon,  a proxy will be voted FOR the
election  of the  nominees  for  Directors,  FOR  Proposals  2 and 3 and, in the
discretion  of the proxy  holder,  on any other  matters that may properly  come
before  the  Meeting.  Any  stockholder  who has  given a proxy has the right to
revoke it at any time prior to its exercise  either by attending the Meeting and
casting his or her votes in person or by  submitting a letter of revocation or a
later-dated proxy to the Fund's Secretary at the above address prior to the date
of the Meeting.

     A quorum of the Fund's stockholders is required for the conduct of business
at the  Meeting.  Under the Bylaws of the Fund, a quorum is  constituted  by the
presence in person or by proxy of the  holders of a majority of the  outstanding
shares (without regard to class) of the Fund as of the Record Date. In the event
that a quorum is not  present at the  Meeting,  or in the event that a quorum is
present but sufficient  votes to approve one or more proposals are not received,
the persons  named as proxies may propose and vote for one or more  adjournments
of the Meeting to permit  further  solicitation  of proxies  with respect to any
proposal that did not receive the votes necessary for its passage.  With respect
to those  proposals for which there is represented a sufficient  number of votes
in  favor,  actions  taken  at the  Meeting  will be  approved  and  implemented
irrespective of any adjournments  with respect to any other proposals.  Any such
adjournment will require the affirmative vote of a majority of votes cast on the
matter at the Meeting. If a quorum is present, the persons named as proxies will
vote those  proxies which they are entitled to vote FOR any proposal in favor of
such an adjournment and will vote those proxies required to be voted AGAINST any
proposal against any such adjournment.


The Fund has two classes of stock:  common stock, par value $0.01 per share (the
"Common Stock"),  and preferred stock, par value $0.01 per share (the "Preferred
Stock"),  1,000 shares of which have been  designated  as AMPS (the Common Stock
and AMPS are  collectively  referred to herein as the  "Shares").  On the Record
Date, the following number of Shares of the Fund were issued and outstanding:



             Common Stock                                   AMPs
              Outstanding                               Outstanding
              -----------                               -----------
              12,338,660                                    775


     SECURITY  OWNERSHIP OF CERTAIN  BENEFICIAL OWNERS. The following table sets
forth certain information regarding the beneficial ownership of the Shares as of
the Record Date by each person who is known by the Fund to  beneficially  own 5%
or more of the Fund's outstanding  Common Stock. To the Fund's knowledge,  there
are no 5% or greater beneficial owners of the AMPS.




              Name of Owner*                   Number of Shares          Number of Shares            Percentage
                                              Directly Owned (1)      Beneficially Owned (2)     Beneficially Owned
------------------------------------------- ------------------------ -------------------------- ----------------------
                                                                                               
Badlands Trust Company, LLC  (1)(3)                          0               5,382,982                  43.63%
Stewart R. Horejsi Trust No. 2A (4)                          0               5,382,982                  43.63%
Ernest Horejsi Trust  No. 1B (1)                     3,413,138               3,413,138                  27.66%
Lola Brown Trust No. 1B (1)                          1,370,515               1,370,515                  11.11%
Evergreen Atlantic LLC (1)                             343,748                 343,748                   2.79%
Stewart West Indies Trust (1)(2)                       104,627                 255,876                   2.07%
Susan L. Ciciora Trust (1)(2)                           72,176                 175,300                   1.42%
John S. Horejsi Trust (1)(2)                            53,080                 104,642                   0.85%
Evergreen Trust (1)(2)                                  25,698                  63,510                   0.51%

                                            ------------------------ -------------------------- ----------------------
Aggregate Shares Owned by Horejsi                    5,382,982               5,382,982                  43.63%
Affiliates (defined below) **
------------------------------------------- ------------------------ -------------------------- ----------------------
Alter Asset Management, Inc.***                      1,167,234               1,167,234                   9.5%



*    The  address of  Evergreen  Atlantic  LLC is 1680 38th  Street,  Suite 800,
     Boulder, Colorado 80301. The address of each other listed owner is Badlands
     Trust  Company,  LLC,  c/o Ron Kukes,  Alaska  First  Bank & Trust,  3301 C
     Street, Suite 100, Anchorage, AK 99503.

**   Aggregate  number  and  percentage  are less than the sum total of  amounts
     shown for each owner  because  the same  shares may be deemed  beneficially
     owned by more than one party (see Footnotes 1 through 4 below).

***  As stated in a Schedule 13G Amendment No. 6 filed with the  Securities  and
     Exchange Commission on February 13, 2006.

(1)  Direct Ownership.  Evergreen Atlantic,  LLC ("EALLC"),  The Evergreen Trust
     (the "Evergreen  Trust"),  John S. Horejsi Trust ("John  Trust"),  Susan L.
     Ciciora Trust ("Susan Trust"), Stewart West Indies Trust ("SWI Trust"), the
     Lola Brown Trust No. 1B (the "Brown  Trust"),  the Ernest Horejsi Trust No.
     1B (the "EH Trust"), Badlands Trust Company, LLC ("Badlands"),  the Stewart
     R. Horejsi  Trust No. 2A (the "SRH Trust") and Stewart R. Horejsi are, as a
     group,  considered  to be a  "control  person" of the Fund (as that term is
     defined in Section 2(a)(9) of the 1940 Act).  EALLC,  the Evergreen  Trust,
     John Trust,  Susan  Trust,  SWI Trust,  the Brown  Trust,  the EH Trust and
     Badlands  (for the  purposed of this Proxy are  collectively  the  "Horejsi
     Affiliates") directly own the shares indicated for such entity in the table
     above,  totaling  5,382,982  (43.63%).  However,  these  entities and other
     trusts or companies with  interlocking  management  and/or common ownership
     may be deemed to indirectly own additional Fund shares,  which are included
     in the table above.

(2)  Indirect Ownership through EALLC. Numbers shown in the table include shares
     held  directly  (see  Footnote  No. 1) and shares  that may be deemed to be
     beneficially  owned indirectly  through ownership of EALLC. The outstanding
     membership  interests in EALLC are owned by the Evergreen  Trust, the Susan
     Trust, the John Trust and the SWI Trust in the following percentages - 11%,
     30%,  15% and 44%.  The  Trustees  of the  Evergreen  Trust are  Stephen C.
     Miller, Larry Dunlap and Badlands. Badlands is the sole trustee for each of
     the Susan  Trust,  the John Trust and the SWI Trust.  Mr.  Horejsi is not a
     beneficiary under any of the foregoing trusts. Badlands has sole discretion
     with respect to the Susan Trust,  John Trust and SWI Trust while any action
     by  the  Evergreen   Trust  requires  a  majority  vote  of  the  trustees.
     Consequently,   both  the  trusts  and  each  trustee  disclaim  beneficial
     ownership of shares owned by EALLC. Mr. Horejsi is the manager of EALLC.


(3)  Ownership by Badlands.  The number shown includes shares that may be deemed
     to be beneficially  owned indirectly by Badlands through direct or indirect
     ownership by the Brown Trust,  the EH Trust,  EALLC,  Evergreen  Trust, the
     Susan Trust, the John Trust and the SWI Trust. Badlands is the sole trustee
     of the Susan Trust,  the John Trust and the SWI Trust,  which together with
     the  Evergreen  Trust  control  EALLC (see  Footnote  No. 2), the other two
     trustees  of  Evergreen  Trust being  Stephen C.  Miller and Larry  Dunlap.
     Badlands,  together  with Larry  Dunlap and Susan  Ciciora  (Mr.  Horejsi's
     daughter),  is one of three  trustees  of both the  Brown  Trust and the EH
     Trust.

     Badlands is a limited  liability company organized under the laws of Alaska
     authorized to do business as a trust company,  which is wholly owned by the
     SRH Trust,  an irrevocable  trust  organized by Mr. Stewart Horejsi for the
     benefit of his issue. The Managers of Badlands are Larry Dunlap, Stephen C.
     Miller, Laura Tatooles,  Laura Rhodenbaugh and Ron Kukes.  Badlands and its
     managers  disclaim  beneficial  ownership of shares  owned  directly by the
     EALLC, the Evergreen Trust, the Susan Trust, the John Trust, the SWI Trust,
     the Brown Trust and the EH Trust.

(4)  Indirect  Ownership by SRH Trust.  The number  shown in the table  reflects
     shares that may be deemed to be beneficially  owned indirectly  through the
     SRH  Trust's  ownership  of  Badlands.  The  trustees  of the SRH Trust are
     Badlands,  Laura Tatooles and Brian Sippy.  Both the Trust and its trustees
     disclaim  beneficial  ownership of shares  beneficially  owned  directly or
     indirectly by Badlands.

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

     Information as to beneficial  ownership in the previous  paragraph has been
obtained from a representative of the beneficial  owners;  all other information
as to  beneficial  ownership is based on reports filed with the  Securities  and
Exchange Commission (the "SEC") by such beneficial owners.

     As of the Record Date, Cede & Co., a nominee  partnership of the Depository
Trust Company, held of record, but not beneficially, 12,285,303 shares or 99.57%
of Common Stock outstanding and 775 shares or 100% of AMPS outstanding.

     As of the Record Date, the executive officers and directors of the Fund, as
a group,  owned  5,416,378  shares of Common  Stock (this  amount  includes  the
aggregate  shares of Common  Stock  owned by the  Horejsi  Affiliates  set forth
above) and 0 shares of AMPS, representing 43.90% of Common Stock outstanding and
0% of AMPS.

     In order  that your  Shares  may be  represented  at the  Meeting,  you are
requested to vote on the following matters:



                                   PROPOSAL 1

                        ELECTION OF DIRECTORS OF THE FUND

     The Charter  provides  that all of the  Directors  stand for election  each
year. The Board has nominated the following five Director  nominees to stand for
election,  each for a one-year term and until their  successors are duly elected
and  qualify:  Richard I. Barr,  Joel W.  Looney,  Dennis R.  Causier,  Susan L.
Ciciora and Dr. Dean L. Jacobson.  Only the Common Stock holders are entitled to
vote on the election of Messrs.  Looney,  Causier and Jacobson and only the AMPS
holders are entitled to vote on the election of Mr. Barr and Ms.  Ciciora.  At a
regularly  scheduled meeting of the Board of Directors held on January 26, 2006,
Alfred  G.  Aldridge,  Jr.  notified  the  Board  that he would  not  stand  for
re-election as a Director of the Fund and the Board (upon  recommendation of the
Nominating  Committee) nominated Dennis R. Causier to fill his upcoming vacancy.
The above  nominees  have  consented  to serve as  Directors  if  elected at the
Meeting for the one-year term. If the designated  nominees  decline or otherwise
become unavailable for election,  however, the proxy confers discretionary power
on the  persons  named  therein  to vote in favor  of a  substitute  nominee  or
nominees for the Board.





     INFORMATION ABOUT DIRECTORS AND OFFICERS.  Set forth in the following table
is information about the nominees for election to the Board of Directors:



--------------------------------- ------------------------ ------------------------------------------------ -----------------
Name, Address*, Age                 Position, Length of           Principal Occupation(s) and Other         Number of Funds
                                   Term Served, and Term    Directorships Held During the Past Five Years       in Fund
                                         of Office                                                              Complex+
                                                                                                              Overseen by
                                                                                                                Director
--------------------------------- ------------------------ ------------------------------------------------ -----------------
                                                                                                          

Independent Directors
Richard I. Barr                   Director of the Fund     Retired.    Manager,    Advantage   Sales   and         3
Chairman                          since 1999.  Chairman    Marketing,  Inc. (food  brokerage),  1963-2001;
Age:  67                          of the Board since       Director,  Boulder Growth & Income Fund,  Inc.,
                                  2003. Current Nominee    since 2002; Director, First Financial Fund,
                                  for a term to expire     Inc., since 2001.
                                  at the 2007 annual
                                  meeting.

Joel W. Looney,                   Director of the Fund     Partner,   Financial   Management   Group,  LLC         3
Age:  43                          since 2001. Current      (investment  adviser),  since July  1999;  CFO,
                                  Nominee for a term to    Bethany College,  1995-1999;  Director, Boulder
                                  expire at the 2007       Growth  & Income  Fund,  Inc.,  since  2002 and
                                  annual meeting.          Chairman of the Board since 2004;  Director and
                                                           Chairman of the Board,  First  Financial  Fund,
                                                           Inc., since 2003.

Dennis R. Causier**               Current Nominee for a    Retired.  Managing Director and Chairman,  P.S.         2
Age: 57                           term to expire at the    Group,  PLC  (engineering  and   construction),
                                  2007 annual meeting.     1966-2001;     Owner,     Professional    Yacht
                                                           Management    Services   (yacht    management),
                                                           2002-present.   Director,   Boulder   Growth  &
                                                           Income Fund, Inc., since 2004; Director,  First
                                                           Financial Fund, Inc., since 2004.

Dr. Dean L. Jacobson              Director of the Fund     Founder and President of Forensic  Engineering,         2
Age:  67                          since October 2004.      Inc. (engineering investigations);  since 1997,
                                  Current Nominee for a    Professor    Emeritus    at    Arizona    State
                                  term to expire at the    University;   prior  to  1997,   Professor   of
                                  2007 annual meeting.     Engineering   at  Arizona   State   University;
                                                           Director,  First  Financial Fund,  Inc.,  since
                                                           2003.
--------------------------------- ------------------------ ------------------------------------------------ -----------------
Interested Director***
--------------------------------- ------------------------ ------------------------------------------------ -----------------
Susan L. Ciciora                  Director of the Fund     Trustee  of the  Brown  Trust and the EH Trust;         1
Age:  41                          since 2001.  Current     Director  of  Horejsi  Charitable   Foundation,
                                  nominee for a term to    Inc.  (private  charitable  foundation),  since
                                  expire at the 2007       1997;  Director,  Boulder Growth & Income Fund,
                                  annual meeting.          Inc.,  January 2002 to October 2004;  Director,
                                                           First Financial Fund, Inc., since 2003.


* Unless  otherwise  specified,  the  Directors'  respective  addresses  are c/o
Boulder Total Return Fund, Inc., 1680 38th Street, Suite 800, Boulder,  Colorado
80301.

** Mr.  Causier is a British  citizen and a resident of Spain and  substantially
all of his assets are located outside of the United States.  As a result, it may
be difficult to realize  claims in courts of the United States  predicated  upon
civil liabilities under federal  securities laws of the United States.  The Fund
has been advised that there is substantial doubt as to (i) the enforceability in
Spain of such civil  remedies  and  criminal  penalties  as are  afforded by the
federal  securities  laws of the United States,  (ii) whether the Spanish courts
would enforce  judgments of United States courts obtained in actions against Mr.
Causier predicated upon the civil liability provisions of the federal securities
laws, or (iii) whether  Spanish  courts would  enforce,  in an original  action,
liabilities  against Mr. Causier  predicated solely on federal  securities laws.
Mr. Causier has appointed the Secretary of the Fund (presently  Stephanie Kelley
in Boulder, Colorado) as his agent for service of process in any legal action in
the United States,  thus subjecting him to the jurisdiction of the United States
courts

*** Ms.  Ciciora  is an  "interested  person"  as a result of the  extent of her
beneficial  ownership  of Fund shares and by virtue of her  indirect  beneficial
ownership of BIA and FAS.

+ Includes  the Fund,  Boulder  Growth & Income Fund,  Inc. and First  Financial
Fund, Inc.

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

     From the late 1980's  until  January,  2001,  Mr.  Looney  served,  without
compensation,  as  one of  three  trustees  of the  Mildred  Horejsi  Trust,  an
affiliate of the EH Trust.




     The names of the  executive  officers  of the Fund are  listed in the table
below.  Each  officer  was  elected to office by the Board at a meeting  held on
April 26, 2005. This table also shows certain additional  information.  Officers
are elected  annually  and each  officer will hold such office until a successor
has been elected by the Board.



------------------------------ -------------------------- ----------------------------------------------------------
                                  Position, Length of
Name, Address, Age             Term Served, and Term of     Principal Occupation(s) and Other Directorships held
                        Office During the Past Five Years
------------------------------ -------------------------- ----------------------------------------------------------
                                                    

Stephen C. Miller              President of the Fund      President  of and  General  Counsel  for BIA since  1999;
1680 38th Street,              since 1999 and Director    Manager, Fund Administrative  Services, LLC ("FAS") since
Suite 800                      from 1999 through          1999;  Vice  President  of SIA since 1999;  Director  and
Boulder, CO 80301              October 2004.  Appointed   President of Boulder  Growth & Income Fund,  Inc.,  since
Age:  53                       annually.                  2002  (resigned  as  Director  in  2004);   Director  and
                                                          President of First Financial Fund, Inc. since 2003 (resigned
                                                          as Director and Chairman in 2004); President and General
                                                          Counsel, Horejsi, Inc. (liquidated in 1999); General Counsel,
                                                          Brown Welding Supply, LLC (sold in 1999); officer of various
                                                          other Horejsi Affiliates; Of Counsel, Krassa & Miller, LLC
                                                          since 1991.

Carl D. Johns                  Chief Financial Officer,   Vice President and Treasurer of BIA and Assistant
1680 38th Street,              Chief Accounting           Manager of FAS, since April, 1999; Vice President, Chief
Suite 800                      Officer, Vice President    Financial Officer and Chief Accounting Officer, Boulder
Boulder, CO 80301              and Treasurer since        Growth & Income Fund, Inc., since January 2002 and First
Age: 43                        1999.  Appointed           Financial Fund, Inc., since August 2003.
                               annually.

Stephanie J. Kelley            Secretary since 2000.      Secretary, Boulder Growth & Income Fund, Inc., since
1680 38th Street,              Appointed annually.        January 2002 and First Financial Fund, Inc., since
Suite 800                                                 August 2003; Assistant Secretary and Assistant Treasurer
Boulder, CO 80301                                         of various other entities affiliated with the Horejsi
Age:  49                                                  family; employee of FAS since March 1999.

Nicole L. Murphey              Assistant Secretary        Assistant Secretary, Boulder Growth & Income Fund, Inc.
1680 38th Street,              since 2000.  Appointed     since January 2002 and First Financial Fund, Inc. since
Suite 800                      annually.                  August 2003; employee of FAS since July 1999.
Boulder, CO 80301
Age:  29



     Set forth in the following table are the nominees for election to the Board
together with the dollar range of equity securities  beneficially  owned by each
Director as of the Record  Date,  as well as the  aggregate  dollar range of the
Fund's  equity  securities  in all  funds  overseen  in a family  of  investment
companies  (i.e.,  other  funds  managed  by  BIA  and  SIA  (collectively,  the
"Advisers")).




                                   OWNERSHIP OF THE FUND BY DIRECTORS
---------------------------------------------------------------------------------------------------------
-------------------------------------- -------------------------------- ---------------------------------
 Independent Directors and Nominees        Dollar Range of Equity          Aggregate Dollar Range of
                                           Securities in the Fund        Equity Securities in All Funds
                                                                          in the Family of Investment
                                                                                   Companies
-------------------------------------- -------------------------------- ---------------------------------

                                                                        
           Richard I. Barr                      Over $100,000                    Over $100,000
           Joel W. Looney                    $50,001 to $100,000                 Over $100,000
          Dean L. Jacobson                   $10,001 to $50,000                $10,001 to $50,000
          Dennis R. Causier                  $10,001 to $50,000                $50,001 to $100,000

  Interested Directors and Nominees
-------------------------------------- -------------------------------- ---------------------------------

          Susan L. Ciciora                     Over $100,000+                    Over $100,000



+ 3,413,138,  343,748 and 1,370,515 Shares of the Fund are held by the EH Trust,
EALLC and the Lola Trust, respectively.  Accordingly,  Ms. Ciciora may be deemed
to have indirect beneficial  ownership of such Shares. Ms. Ciciora disclaims all
such beneficial ownership. Ms. Ciciora directly owns 6,267 shares of the Fund.

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

     None  of  the   independent   Directors  or  their  family   members  owned
beneficially  or of record any securities of the Advisers or any person directly
or  indirectly  controlling,  controlled  by, or under  common  control with the
Advisers.


     DIRECTOR AND OFFICER  COMPENSATION.  The following table sets forth certain
information  regarding the  compensation of the Fund's  Directors for the fiscal
year ended November 30, 2005. No persons (other than the independent  Directors,
as set forth below) currently receive compensation from the Fund for acting as a
Director or officer. Directors and executive officers of the Fund do not receive
pension or retirement benefits from the Fund.  Non-interested  Directors receive
reimbursement for travel and other out of pocket expenses incurred in connection
with Board meetings.




                                              Aggregate
                                             Compensation
Name of Person and Position with the        from the Fund       Total Compensation from
Fund                                           Paid to         the Fund and Fund Complex
                                              Directors            Paid to Directors
----------------------------------------- ------------------- ----------------------------
                                                                  
Alfred G. Aldridge, Jr., Director              $29,000                  $54,000
                                                                       (2 funds)

Richard I. Barr, Director and Chairman         $33,000                  $87,000
of the Board                                                           (3 funds)

Joel W. Looney, Director                       $32,000                 $100,000
                                                                       (3 funds)

Dr. Dean Jacobson, Director                    $29,000                  $57,500
                                                                       (2 funds)

Dennis R. Causier, Director Nominee               $0                    $53,500
                                                                       (2 funds)

Susan L. Ciciora, Director                        $0                      $0



     Each  Director of the Fund who was not a  Director,  officer or employee of
one of the Advisers,  or any of their  affiliates,  receives a fee of $8,000 per
annum plus  $4,000  for each in person  meeting,  $500 for each Audit  Committee
meeting and $500 for each  telephonic  meeting of the Board.  In  addition,  the
Chairman of the Board and the Chairman of the Audit  Committee  receives  $1,000
per meeting.  Each non-interested  Director of the Fund is reimbursed for travel
and  out-of-pocket  expenses  associated  with  attending  Board  and  Committee
meetings.  The Board  held ten  meetings  (six of which  were held by  telephone
conference  call) during the fiscal year ended November 30, 2005.  Each Director
currently  serving in such capacity for the entire fiscal year attended at least
75% of the  meetings of  Directors  and any  Committee  of which he is a member.
Directors  currently  serving  and who served  less than the entire  fiscal year
attended at least 75% of such  meetings  held during their tenure as a Director.
The aggregate  remuneration paid to the Directors of the Fund for acting as such
during the fiscal year ended November 30, 2005 amounted to $123,000.



                      COMMITTEES OF THE BOARD OF DIRECTORS

     AUDIT  COMMITTEE;  REPORT  OF AUDIT  COMMITTEE.  The  purpose  of the Audit
Committee is to assist Board oversight of the integrity of the Fund's  financial
statements,  the Fund's compliance with legal and regulatory  requirements,  the
independent auditor's qualifications and independence and the performance of the
Fund's independent  auditors.  The Audit Committee reviews the scope and results
of  the  Fund's  annual  audit  with  the  Fund's  independent  accountants  and
recommends  the  engagement  of  such  accountants.   Management,   however,  is
responsible  for the  preparation,  presentation  and  integrity  of the  Fund's
financial  statements,  and the  independent  accountants  are  responsible  for
planning  and carrying  out proper  audits and  reviews.  The Board of Directors
adopted a written  charter for the Audit  Committee on January 23, 2002 and most
recently  amended the Charter on January 23, 2004. A copy of the Audit Committee
Charter was attached as an appendix to the Fund's 2004 annual proxy statement.

     The  Audit  Committee  is  composed  entirely  of  the  Fund's  independent
Directors,  consisting of Messrs. Aldridge, Barr, Jacobson and Looney. The Board
of Directors has determined  that Joel Looney  qualifies as an "audit  committee
financial  expert," as defined under the  Securities  and Exchange  Commission's
Regulation  S-K,  Item  401(h).  The  Audit  Committee  is  in  compliance  with
applicable  rules  of  the  listing   requirements  for  closed-end  fund  audit
committees, including the requirement that all members of the audit committee be
"financially  literate" and that at least one member of the audit committee have
"accounting  or related  financial  management  expertise," as determined by the
Board.  The Audit  Committee is required to conduct its operations in accordance
with applicable  requirements of the  Sarbanes-Oxley  Act and the Public Company
Accounting  Oversight  Board, and the members of the Audit Committee are subject
to the fiduciary duty to exercise  reasonable care in carrying out their duties.
Each member of the Audit  Committee is  independent,  as that term is defined by
the NYSE Listing Standards. The Audit Committee met four times during the fiscal
year ended November 30, 2005.

     In  connection  with the  audited  financial  statements  as of and for the
period ended  November 30, 2005,  included in the Fund's  Annual  Report for the
period  ended  November  30, 2005 (the  "Annual  Report"),  at a meeting held on
January 26, 2006,  the Audit  Committee  considered  and  discussed  the audited
financial  statements  with  management  and the  independent  accountants,  and
discussed  the  audit  of  such  financial   statements   with  the  independent
accountants.

     The Audit  Committee has received the written  disclosures  and letter from
the independent  accountants  required by Independence  Standards Board Standard
No. 1 (Independence  Discussions  with Audit  Committees) and has discussed with
independent  accountants their independence.  The Audit Committee discussed with
the independent  accountants the accounting  principles  applied by the Fund and
such  other  matters  brought to the  attention  of the Audit  Committee  by the
independent  accountants  required by  Statement of Auditing  Standards  No. 61,
Communications With Audit Committees, as currently modified or supplemented.


     The members of the Audit  Committee are not  professionally  engaged in the
practice  of  auditing  or  accounting  and are not  employed by the Fund in any
accounting,  financial  management or internal control capacity.  Moreover,  the
Audit  Committee  relies on and makes no independent  verification  of the facts
presented  to it or  representations  made  by  management  or  the  independent
accountants.  Accordingly,  the Audit Committee's  oversight does not provide an
independent  basis to  determine  that  management  has  maintained  appropriate
accounting and financial reporting principles and policies, or internal controls
and procedures,  designed to assure  compliance  with  accounting  standards and
applicable   laws  and   regulations.   Furthermore,   the   Audit   Committee's
considerations  and discussions  referred to above do not provide assurance that
the audit of the Fund's financial  statements has been carried out in accordance
with generally accepted  accounting  standards or that the financial  statements
are presented in accordance with generally accepted accounting principles.

     Based on its  consideration  of the audited  financial  statements  and the
discussions  referred to above with management and the  independent  accountants
and  subject to the  limitation  on the  responsibilities  and role of the Audit
Committee  set  forth in the  charter  and  those  discussed  above,  the  Audit
Committee  of the Fund  recommended  to the  Board  that the  audited  financial
statements be included in the Fund's Annual Report and be mailed to stockholders
and filed with the SEC.

     Submitted by the Audit Committee of the Fund's Board of Directors:

                  Alfred G. Aldridge, Jr.
                  Richard I. Barr
                  Dean L. Jacobson
                  Joel W. Looney

     NOMINATING  COMMITTEE.  The Board of Directors  has a nominating  committee
(the "Nominating  Committee") consisting of Messrs. Looney,  Jacobson,  Aldridge
and Barr,  which is responsible for  considering  candidates for election to the
Board in the  event a  position  is  vacated  or  created.  Each  member  of the
Nominating Committee is independent, as that term is defined by the NYSE Listing
Standards.  The  Nominating  Committee did not meet during the fiscal year ended
November 30, 2005. The Nominating Committee met on January 16, 2006 and again on
January 26, 2006, to consider the  nomination  of Dennis R.  Causier.  Dennis R.
Causier was being  considered to fill a vacancy on the Board  resulting from the
resignation of Alfred G. Aldridge, Jr. At this meeting, the Nominating Committee
considered  the  qualifications  and  determined  the  suitability  of Dennis R.
Causier  to  be  Director  and  resolved  to  recommend  Dennis  R.  Causier  to
stockholders for election at the 2006 Annual Meeting.

The Board of Directors has adopted a charter for the  Nominating  Committee that
is  available  on  the  Fund's  website,  www.boulderfunds.net.  The  Nominating
Committee  does  not have a  formal  process  for  identifying  candidates.  The
Nominating   Committee  takes  into  consideration  such  factors  as  it  deems
appropriate  when  nominating  candidates.  These factors may include  judgment,
skill,  diversity,  experience with investment companies and other organizations
of  comparable   purpose,   complexity,   size  and  subject  to  similar  legal
restrictions and oversight, the interplay of the candidate's experience with the
experience of other Board members,  and the extent to which the candidate  would
be a desirable addition to the Board and any committees thereof.  The Nominating
Committee  will  consider  all  qualified  candidates  in the same  manner.  The
Nominating  Committee  may modify  its  policies  and  procedures  for  director
nominees and recommendations in response to changes in the Fund's circumstances,
and as applicable legal or listing standards change.

     The Nominating Committee would consider director candidates  recommended by
stockholders  (if a vacancy  were to exist) and  submitted  in  accordance  with
applicable  law and  procedures  as  described  in  this  Proxy  Statement  (see
"Submission of Stockholder  Proposals" below).  Such  recommendations  should be
forwarded to the Secretary of the Fund.

     The Fund does not have a compensation committee.





                           OTHER BOARD-RELATED MATTERS

     Stockholders who wish to send  communications to the Board should send them
to the  address  of  the  Fund  and to the  attention  of the  Board.  All  such
communications will be directed to the Board's attention.

     The Fund does not have a formal policy regarding Board member attendance at
the Annual Meeting of Stockholders;  however,  all of the Directors of the Fund,
who were  Directors at the time,  attended the April 26, 2005 Annual  Meeting of
Stockholders.

     Vote  Required.  The  election of Messrs.  Looney,  Jacobson and Causier as
Directors  of the Fund will require the  affirmative  vote of a plurality of the
votes cast by holders of the Common  Stock at the  Meeting in person or by proxy
on Proposal 1. The election of Mr. Barr and Ms. Ciciora as Directors of the Fund
will  require  the  affirmative  vote of a  plurality  of the votes  cast by the
holders of the AMPS at the Meeting in person or by proxy on Proposal 1.

THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,  UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF ALL THE NOMINEES.


                                   PROPOSAL 2

              CHARTER AMENDMENTS RELATING TO THE TERMS OF THE AMPS

The second proposal to be considered at the Meeting is approval of amendments to
the  charter  of the  Fund,  which  will  repeal  in their  entirety  all of the
currently  existing terms of the Fund's taxable  auction market  preferred stock
(the  "AMPS")  and  substitute  in lieu  thereof  the new terms set forth in the
proposed Form of Articles of Amendment for the Fund described below and attached
to this Proxy Statement as Exhibit A (the "Amendments").  The Board proposes and
unanimously recommends that stockholders approve the Amendments.

Purpose of the Amendments.  Presently,  the Fund is leveraged with $77.5 million
of taxable  auction market  preferred  stock.  The AMPS are auctioned  through a
Dutch  auction  process  every 28 days at which time a new interest rate is set.
Presently  the  AMPS are  rated by two  national  credit  rating  organizations,
Moody's  Investors  Services,  Inc.  ("Moody's")  and Standard & Poor's  ("S&P")
(Moody's and S&P are  collectively  referred to as the "Rating  Agencies").  The
ratings are  presently  "Aa1" from  Moody's  and "AA" from S&P (the  "Ratings").
Since auction  market  preferred  rates are typically  lower for auction  market
preferred stocks that have  higher/better  credit ratings,  the Fund anticipates
that, if upgraded, the AMPS will typically receive better auction interest rates
for the Fund,  thus reducing the dividend  expenses  associated  with the Fund's
leverage.  Accordingly,  management has recommended that the Ratings be upgraded
to "Aaa" and "AAA" respectively.

Because  the  conditions  for  upgrading  the  AMPS to  "Aaa"  and  "AAA"  rated
instruments  are largely a factor of asset  coverage,  and  because  most of the
asset coverage  definitions and calculations are set forth in the charter of the
Fund,  including the current AMPS terms setting forth the terms of the AMPS (the
"Current AMPS Terms"),  upgrading the AMPS will require  extensive  revisions to
the Current AMPS Terms.  In addition to amending the  coverage  definitions  and
calculation  provisions of the Current AMPS Terms,  management  has  recommended
that  the  Fund  also  amend  the  Current   AMPS  Terms  to  deal  with  market
interruptions  resulting  from force majeure  events such as the 9-11  terrorist
attacks and the termination of  AMPS-elected  directors upon the Fund's complete
redemption  of the  AMPS.  These  last two  provisions  are  commonplace  in the
governing documents for recently issued auction market preferred stock. Finally,
the Current AMPS Terms are amended  versions  from an original that is almost 20
years old which were  extensively  revised in 2000 to deal with changing  rating
agencies and changing from a  dividend-received-deduction-eligible  product to a
taxable product.  Management  believes that, since it must extensively amend the
Current  AMPS Terms in any event in  connection  with  upgrading  the AMPS,  the
Amendments  will vastly simplify the Current AMPS Terms,  eliminate  ambiguities
and  inconsistencies,  and bring the  Current  AMPS Terms into  conformity  with
current  rating agency and auction  market  preferred  practices.  Upgrading the
Ratings as described above is not conditioned on the passage of this Proposal as
the Fund has other avenues it can pursue to upgrade the Ratings without amending
the Current AMPS Terms.

At Board  Meetings held in July and October of 2005 and January 2006,  the Board
considered  recommendations  from  management  to upgrade the AMPS as  discussed
above.  At the January 2006 Board meeting,  the Board approved a  recommendation
from  management  to upgrade  the  Ratings  and, in  connection  therewith,  the
Amendments,  subject to  shareholder  approval and subject to receipt of certain
confirmations from the Rating Agencies. The Board considered a number of factors
in its  deliberations,  including  that (i)  upgrading the AMPS from the current
"Aa1" and "AA" ratings to "Aaa" and "AAA" should reduce the Fund's relative cost
of leverage;  (ii) extensive amendment of the Current AMPS Terms is necessary to
facilitate  the  upgrade of the AMPS in any  event;  (iii) the  Amendments  will
modernize  the  Current  AMPS Terms and  simplify  and  streamline  the  auction
procedures,  coverage calculations and other testing and oversight procedures of
the Current AMPS Terms;  (iv) the Amendments will not adversely  affect the AMPS
or the contract  rights of the AMPS nor will it impair the ratings by the Rating
Agencies,  indeed it will  enhance the  ratings;  (v) with respect to changes to
deal with force  majeure  events,  the  Amendments  ensure that,  if a terrorist
attack or other  force  majeure  event were to occur,  the AMPS  auction  can be
conducted  pursuant to clear  procedures set forth in the Amendments and without
detriment to the Fund or its holders of Common  Stock;  and (vi) with respect to
termination of the AMPS directors upon redemption of the AMPS, in the event of a
redemption  in full of the AMPS,  separate  representatives  for the AMPS  would
serve no valid business  purpose.  Finally,  the Board found that the Amendments
were consistent with current market practice for new issuances of auction market
preferred stock.  Indeed,  the Fund's sister fund, Boulder Growth & Income Fund,
Inc.   recently   issued  "AAA"  rated  auction  market   preferred  stock  with
substantially the same terms as those proposed under this Proposal. Accordingly,
for the foregoing reasons,  the Board found that the Amendments were in the best
interest of the Fund. The Fund has had  conversations  with both Rating Agencies
about the Amendments.  The Rating Agencies have indicated preliminarily that the
changes would not impair their ratings on the AMPS. In any event, the Amendments
will not be implemented  unless both Rating Agencies confirm that the Amendments
will not impair the Ratings.


The following Comparison Table summarizes the proposed Amendments to the Current
AMPS Terms.  This  summary is  qualified  in its  entirety by  reference  to the
Amendments  as set forth in the Form of Articles of  Amendment  attached to this
Proxy Statement as Exhibit A.



                                Comparison Table

                  Current AMPS Terms versus Amended AMPS Terms



Provision or Subject         Current AMPS Terms                                 Proposed Amended AMPS Terms
---------------------------- -------------------------------------------------- -------------------------------------------------

                                                                          
Determination and Payment    The Fund's auctions are held every fourth          There are no substantive changes.
of Dividends                 Tuesday and dividends for the preceding period
                             are paid on the Wednesday immediately following
                             each auction date.  The dividend rate is set by
                             auction.
Auction Procedures                                                              There are no substantive changes.

Force Majeure Events         The Current AMPS Terms do not provide for          The Amendments contain provisions establishing
                             auction procedures in the event of a terrorist     procedures to be followed in instances where an
                             attack or other force majeure event that affects   AMPS auction cannot be held, or the auction
                             the national markets.                              agent for the Fund is not able to conduct an
                                                                                auction in accordance with the established
                                                                                auction procedures, or the dividend payable
                                                                                on such date cannot be paid because
                                                                                the date on which the auction normally would be held
                                                                                (or thedividend  would be paid) is not a business
                                                                                day  because the NYSE is closed because of an
                                                                                Extraordinary  Event (e.g., an act of God, natural
                                                                                disaster,  extreme weather,  act of war, civil or
                                                                                military disturbance,  act of terrorism,  sabotage,
                                                                                riots   or  a  loss   or   malfunction   of
                                                                                utilities or communications  services).  The
                                                                                Amendments establish how the dividend rate is
                                                                                determined, when the dividend will be paid,
                                                                                and  how  a  dividend  period  will  be  established
                                                                                if  an Extraordinary Event occurs.

Voting                       Voting - General.  Under the Current AMPS Terms,   Voting - General.  No substantive changes.
                             each AMPS holder is entitled to one vote for
                             each share of AMPS held on each matter submitted
                             to a vote of stockholders and the holders of
                             AMPS and Common Stock vote together as a single
                             class.

                             Voting - Directors.  Under the Current AMPS        Voting - Directors.  No substantive changes
                             Terms, at any director election, the holders of    except that, under the Amended AMPS Terms, the
                             the AMPS are entitled, voting as a single class,   holders of the AMPS and Common Stock, voting as
                             to elect two directors (i.e.,  the AMPS            a single class, elect the non-AMPS directors.
                             directors).  The holders of the Fund's common
                             stock, voting as a separate class, elect the
                             balance of the directors.

                             If the Fund has not paid two year's AMPS dividends,
                             the number of directors is automatically increased
                             by the smallest number that, when added to the two
                             directors elected exclusively by the holders of the
                             AMPS would constitute a majority of the Board, in
                             which case the holders of the AMPS are entitled,
                             voting as a single class, to elect such smallest
                             number of additional directors, together with the
                             two directors that the AMPS holders are in any
                             event entitled to elect.

Termination of AMPS          The Current AMPS Terms do not provide for          Under the Current AMPS Terms and the 1940
Directors upon               termination of the AMPS Directors upon a           Act, holders of the AMPS, voting as a single
Redemption of the            redemption of the AMPS.                            class, are entitled to elect two of the Fund's
AMPS                                                                            directors  while holders of the Common Stock are
                                                                                entitled to elect the remaining  directors.  The
                                                                                Amendment provides that directors  elected  by
                                                                                holders  of the AMPS will  terminate automatically
                                                                                upon full redemption of the AMPS.  Notably, in
                                                                                such a  redemption  in  full,  all  obligations  to
                                                                                the AMPS holders  will cease and  separate
                                                                                representatives for them would serve no valid
                                                                                business  purpose.  Moreover,  in this circumstance,
                                                                                the 1940  Act  provision  requiring  separate
                                                                                representatives  for  holders of  preferred  stock
                                                                                would no longer apply.

Rating Agency
Guidelines                   The Rating Agency guidelines were                  The Rating Agency guidelines are only referenced in
                             incorporated in various provisions throughout      the Amendment, thus giving the Rating Agencies the
                             the text of the Current AMPS Terms.                ability to amend the guidelines without amending the
                                                                                terms of the AMPS.


Amendment or Modification    Without the affirmative vote of at least a         The provisions in the Amendment are
- Stockholder Approval       majority of the AMPS shares, the Fund may not      substantially the same as those in the Current
Required                     amend, alter or repeal the AMPS terms so as to     AMPS Terms.
                             adversely affect in any material respect any of the
                             contract rights associated with the AMPS or alter,
                             modify or eliminate any of the rights, preferences
                             or privileges of the AMPS so as to adversely affect
                             the AMPS.

Amendment or Modification    The Board, without the vote or consent of the      The Amendments provide that the rights of the
- No Stockholder Approval    AMPS stockholders, may from time to time amend     AMPS or the holders thereof, including, without
Required                     the Current AMPS Terms, if (A) such amendment,     limitation, the interpretation or applicability
                             alteration or repeal is at the request of a        of any or all covenants or other obligations of
                             Rating Agency and (B) it is determined by the      the Fund contained in the AMPS terms or of
                             Board that the amendment will not adversely        certain definitions in the AMPS terms, may from
                             affect the contract rights of shares of AMPS or    time to time be modified, altered or repealed
                             adversely affect the AMPS as supported by the      by the Board of Directors in its sole
                             Fund's counsel's opinion.                          discretion, based on a determination by the
                                                                                Board  of  Directors   that  such  action  is
                                                                                necessary  or appropriate in connection  with
                                                                                obtaining or maintaining the rating of any  Rating
                                                                                Agency  with  respect  to the AMPS or revising  the
                                                                                Fund's  investment  restrictions  or  policies
                                                                                consistent  with  guidelines of any Rating  Agency,
                                                                                and any such  modification,  alteration or repeal
                                                                                will not be deemed to affect the  preferences,
                                                                                rights or powers of AMPS or the holders  thereof,
                                                                                provided  that  the  Board  of  Directors
                                                                                receives  written  confirmation  from each  relevant
                                                                                Rating  Agency  that any such  modification,
                                                                                alteration  or  repeal would not adversely  affect
                                                                                the rating then assigned by such Rating Agency.

Amendment of Certain         The Board, without the vote or consent of the      The Amendment contains substantially similar
Rating Agency Definitions    AMPS stockholders, may from time to time amend     language. However, in addition, the Rating
                             certain rating agency definitions provided that    Agency guidelines, which contain most of the the
                             Board receives confirmation from the               Rating Rating Agency definitions, may be amended by
                             Agencies that the amendment does not impair the    the respective Rating Agency without the vote,
                             Ratings then assigned.                             consent or approval of the Board, or any holder
                                                                                of shares of the AMPS, including any series
                                                                                of AMPS, or any other stockholder of  the Fund.

Increases in Capitalization  The affirmative vote of at least 80% of the AMPS   The Board is permitted to cause the issuance of
                             shares is required to authorize, create or issue   additional shares of the AMPS or other
                             any class or series of stock ranking prior to or   preferred stock ranking on parity with the
                             on a parity with the AMPS with respect to          the AMPS if the Fund obtains written confirmation
                             payment of dividends or the distribution of        from the Rating Agencies that the issuance of a
                             assets upon dissolution, liquidation or winding    class or series would not impair the rating
                             up of the affairs of the Fund.                     then assigned by such rating agency to the
                                                                                AMPS.  Otherwise,  the  affirmative  vote of a
                                                                                majority  of outstanding AMPS shares is required to
                                                                                issue additional AMPS or other preferred shares.

Dividend Payment Dates       Every fourth Wednesday, subject to adjustments     No changes.
                             for special rate periods.

Maximum Length of Special    There is no express limit on the length of a       Designation of special dividend periods longer
Rate Periods                 special rate period.                               than 28 days are limited to a maximum of 5
                                                                                years.

Late Charge on Any Failure   The late charge is calculated using 275% of the    The late charge is calculated using 300% of the
to Deposit                   "AA" composite commercial paper rate.              LIBOR rate.

Designation of AMPS          There are no provisions regarding how AMPS         The Board determines which Directors are to be
Directors                    Directors are designated or which Directors are    designated AMPS Directors and elected by the
                             to be AMPS Directors and elected by the holders    holders of the AMPS.
                             of the AMPS.

Special Meetings to Elect    Special meetings for the election of additional    Special meetings for the election of additional
Additional AMPS Directors    AMPS directors (e.g., if the Fund fails to pay     AMPS directors are to be held not less than 10
                             its AMPS dividend) are to be held not less than    nor more than 20 days after mailing the notice.
                             10 nor more than 30 days after mailing the
                             notice.

Restrictions on Dividends    No dividends may be declared or paid or set        No substantive changes.
                             apart for payment on any of the Fund's
                             securities ranking, as to the payment of
                             dividends, on a parity with the AMPS unless full
                             cumulative dividends have been or
                             contemporaneously are declared and paid on the
                             shares of AMPS and any other parity stock
                             through the most recent dividend payment date.
                             When dividends are not so paid on the AMPS or
                             other parity stock, all dividends declared upon
                             shares of AMPS and any other such parity stock
                             shall be declared pro rata.  The AMPS  shall not
                             be entitled to any dividend, whether payable in
                             cash, property or stock, in excess of full
                             cumulative dividends.


                             As long as any the AMPS are outstanding, the Fund
                             may not declare, pay or set apart for payment any
                             dividend or other distribution in respect of the
                             Common Stock or any other stock of the Fund ranking
                             junior to the AMPS or call for redemption, redeem,
                             purchase or otherwise acquire for consideration any
                             Common Stock or any other shares of the Corporation
                             ranking junior to the AMPS as to dividends or upon
                             liquidation, unless (i) immediately thereafter, the
                             1940 Act asset coverage is met and the various
                             Rating Agency asset coverage ratios are met, (ii)
                             full cumulative dividends on all shares of AMPS for
                             all past rate periods have been paid or declared
                             and a sum sufficient for the payment of such
                             dividends set apart for payment; and (iii) the Fund
                             the Corporation has redeemed the full number of
                             shares of AMPS required to be redeemed by any
                             provision for mandatory redemption.

Redemption                   The Fund may redeem the AMPS in whole but not in   The Fund may redeem in whole or part upon prior
                             part upon prior notice (i.e., not less than 3      notice (i.e., not less than 15 calendar days
                             nor more than 33 days).                            and not more than 40 calendar days).

                             Notice for mandatory redemption is not less than   Notice for mandatory redemption is not less than 15
                             3 nor more than 33 days.                           calendar days nor more than 40 calendar days.

Status of AMPS Redeemed      Redeemed AMPS return to the status of authorized   Redeemed AMPS return to the status of
                             and unissued shares of AMPS.                       authorized and unissued shares of preferred
                                                                                stock, without further designation.

Liquidation Rights                                                              No substantive changes.



Vote Required.  Approval of the Amendments will require the affirmative  vote of
(a) a majority of the votes  entitled to be cast by the holders of Common  Stock
and AMPS,  voting  together  as a single  class and (b) a majority  of the votes
entitled to be cast by the holders of the AMPS, voting as a separate class.

THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,  UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 2.


                                   PROPOSAL 3

        AMENDMENT TO THE CHARTER WITH RESPECT TO THE NUMBER OF DIRECTORS

     The Board proposes and unanimously  recommends that stockholders approve an
amendment to the Fund's  Charter to provide  Section 5.1 of the  Charter,  which
states that the number of directors  of the Fund shall be five,  be made subject
to the  provisions of the AMPS or any new class or series of preferred  stock of
the Fund.  Both the Current  AMPS Terms as well as the  Amendments  contemplated
under  Proposal  2 above  provide  for  increasing  the size of the Board  under
certain  limited  circumstances  (e.g.,  if the Fund has not paid the  dividends
under the AMPS) so as to give the  holders  of the AMPS the  ability  to elect a
majority of the  Directors.  However,  given the  language of Section 5.1, it is
unclear whether the size of the Board could be legally increased under the terms
of the  Current  AMPS  Terms in order to give  the  AMPS  holders  the  majority
contemplated under the 1940 Act.

     Section 5.1 of the Charter reads as follows:

          The number of directors shall be five.

Proposal 3 would amend Section 5.1 of the Charter to read,  in its entirety,  as
follows:


          Subject to the terms of any class or series of  Preferred  Stock,  the
     number of directors shall be five.

Purpose of the  Amendment.  The  purpose of this  Proposal is to  eliminate  the
conflict  between (i) the language of Section 5.1 of the Charter  which,  in its
present  form,   clearly  sets  the  number  of  Directors  at  five,  (ii)  the
requirements  imposed by the AMPS terms for the protection of the holders of the
AMPS and (iii) the requirements imposed by the 1940 Act which require provisions
to be made to allow the holders of the AMPS to elect a majority of the Directors
at any time dividends remain unpaid for a period of two years.

The Board  considered  this Proposal at a special meeting held on March 6, 2006.
The Board has  determined  that this  Proposal is  advisable to conform with the
1940 Act and the intent of the AMPS terms.

Vote  Required.  Approval  of  Proposal 3  requires  the  affirmative  vote of a
majority  of the votes  entitled  to be cast on the matter by the holders of the
Common Stock and AMPS, voting as a single class.

THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,  UNANIMOUSLY
RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 3.


                       SUBMISSION OF STOCKHOLDER PROPOSALS

     Notice is hereby given that for a stockholder proposal to be considered for
inclusion in the Fund's proxy  material  relating to its 2007 annual  meeting of
stockholders,  the  stockholder  proposal  must be received by the Fund no later
than November 27, 2006.  Any such proposal shall set forth as to each matter the
stockholder  proposes to bring before the meeting (i) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting,  (ii) the name and address,  as they appear on the
Fund's books,  of the stockholder  proposing such business,  (iii) the class and
number of shares of the capital stock of the Fund which are  beneficially  owned
by the  stockholder,  and (iv) any material  interest of the stockholder in such
business.   Stockholder   proposals,   including  any  accompanying   supporting
statement, may not exceed 500 words. A stockholder desiring to submit a proposal
must be a record or beneficial owner of Shares with a market value of $2,000 and
must have held such Shares for at least one year. Further,  the stockholder must
continue  to hold such  Shares  through  the date on which the  meeting is held.
Documentary  support  regarding  the foregoing  must be provided  along with the
proposal. There are additional requirements regarding proposals of stockholders,
and a  stockholder  contemplating  submission  of a proposal is referred to Rule
14a-8  promulgated  under the 1934 Act. The timely submission of a proposal does
not guarantee its inclusion in the Fund's proxy materials.

     Pursuant to the Fund's By-laws,  at any annual meeting of the stockholders,
only  business  that  has been  properly  brought  before  the  meeting  will be
conducted.  To be properly brought before the annual meeting,  the business must
be (i)  specified in the notice of meeting,  (ii) by or at the  direction of the
Board of Directors,  or (iii) otherwise properly brought before the meeting by a
stockholder.  For business to be properly brought before the annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing to
the  Secretary  of the  Fund.  To be  timely,  a  stockholder's  notice  must be
delivered to the  Secretary at 1680 38th Street,  Suite 800,  Boulder,  Colorado
80301 no later  than 5:00  p.m.,  Mountain  Time,  on the 120th day prior to the
first  anniversary of the date of mailing of the notice for the preceding year's
annual  meeting.  However,  if the date of the  annual  meeting is  advanced  or
delayed  by more  than 30 days  from the  first  anniversary  of the date of the
preceding year's annual meeting,  for notice by the stockholder to be timely, it
must be delivered not later than 5:00 p.m.,  Mountain  Time, on the later of the
120th day prior to the date of such  annual  meeting or the tenth day  following
the day on which public  announcement of the date of such meeting is first made.
The public  announcement  of a postponement  or adjournment of an annual meeting
shall not commence a new time period for the giving of a stockholder's notice as
described above.

     Pursuant to the Fund's By-laws,  such stockholder's  notice shall set forth
(i) as to each individual whom the stockholder proposes to nominate for election
or reelection as a director,  (A) the name, age,  business address and residence
address of such  individual,  (B) the class,  series and number of any shares of
stock of the Fund that are beneficially  owned by such individual,  (C) the date
such shares were acquired and the  investment  intent of such  acquisition,  (D)
whether  such  stockholder  believes  any  such  individual  is,  or is not,  an
"interested  person" of the Fund,  as  defined  in the 1940 Act and  information
regarding such individual that is sufficient,  in the discretion of the Board of
Directors or any  committee  thereof or any  authorized  officer of the Fund, to
make  such  determination  and  (E)  all  other  information  relating  to  such
individual  that is required to be  disclosed  in  solicitations  of proxies for
election of directors in an election contest (even if an election contest is not
involved), or is otherwise required, in each case pursuant to Regulation 14A (or
any  successor  provision)  under  the  Exchange  Act and the  rules  thereunder
(including  such  individual's  written  consent  to being  named  in the  proxy
statement as a nominee and to serving as a director if elected);  (ii) as to any
other  business  that the  stockholder  proposes to bring before the meeting,  a
description  of such  business,  the reasons for proposing  such business at the
meeting and any material  interest in such business of such  stockholder and any
Stockholder  Associated  Person  (as  defined  below),  individually  or in  the
aggregate,  including  any  anticipated  benefit  to  the  stockholder  and  the
Stockholder Associated Person therefrom;  (iii) as to the stockholder giving the
notice and any Stockholder  Associated Person,  the class,  series and number of
all shares of stock of the Fund which are owned by such  stockholder and by such
Stockholder  Associated  Person,  if any, and the nominee holder for, and number
of, shares owned  beneficially  but not of record by such stockholder and by any
such Stockholder Associated Person; (iv) as to the stockholder giving the notice
and any  Stockholder  Associated  Person  covered by the  immediately  preceding
clauses (ii) or (iii), the name and address of such stockholder,  as they appear
on the Fund's stock ledger and current name and address,  if  different,  and of
such  Stockholder  Associated  Person;  and  (v)  to  the  extent  known  by the
stockholder  giving the notice,  the name and  address of any other  stockholder
supporting  the nominee for election or reelection as a director or the proposal
of  other  business  on the  date of  such  stockholder's  notice.  "Stockholder
Associated  Person" of any  stockholder  shall mean (i) any person  controlling,
directly or indirectly,  or acting in concert with, such  stockholder,  (ii) any
beneficial  owner of shares of stock of the Fund owned of record or beneficially
by such  stockholder  and (iii) any person  controlling,  controlled by or under
common control with such Stockholder Associated Person.



                             ADDITIONAL INFORMATION

     INDEPENDENT  ACCOUNTANTS.  The Audit Committee of the Board,  consisting of
those Directors who are not  "interested  persons" (as defined in the 1940 Act),
will select the Fund's independent accountants for the Fund's fiscal year ending
November 30, 2006 at the Board's  regular  quarterly  meeting in July 2006. KPMG
served as independent accountants for the Fund for the Fund's fiscal year ending
November 30, 2005. A  representative  of KPMG will not be present at the Meeting
but will be  available  by  telephone  and will  have an  opportunity  to make a
statement if the  representative  so desires and will be available to respond to
appropriate questions.

     Set forth  below are audit fees and  non-audit  related  fees billed to the
Fund for  professional  services  received from KPMG for the Fund's fiscal years
ended November 30, 2004 and 2005, respectively.




              Fiscal Year Ended        Audit Fees       Audit-Related Fees*      Tax Fees**         All Other Fees

                                                                                             
                  11/30/2004             $23,600              $16,000              $5,850                $0

                  11/30/2005             $25,250              $16,800              $6,000                $0


*    "Audit  Related  Fees"  are  those  fees  billed  to the  Fund  by  KPMG in
     connection with their agreed-upon procedures reports under the terms of the
     AMPS.  Such reports are required  quarterly by Moody's  Investors  Service,
     Inc. and Standard & Poor's in connection  with  maintaining  public ratings
     for the AMPS.

**   "Tax Fees" are those fees  billed to each Fund by KPMG in  connection  with
     tax  consulting  services,  including  primarily  the review of each Fund's
     income tax returns.

     The Audit Committee  Charter requires that the Audit Committee  pre-approve
all audit and non-audit services to be provided by the auditors to the Fund, and
all non-audit  services to be provided by the auditors to the Fund's  investment
adviser and any service  providers  controlling,  controlled  by or under common
control with the Funds' investment adviser  ("affiliates") that provide on-going
services to each Fund, if the engagement  relates directly to the operations and
financial reporting of each Fund, or to establish detailed pre-approval policies
and procedures for such services in accordance with applicable  laws. All of the
audit,  audit-related and tax services described above for which KPMG billed the
Fund fees for the fiscal  years ended  November  30, 2004 and  November 30, 2005
were pre-approved by the Audit Committee.

     KPMG has  informed  the Fund that it has no direct  or  indirect  financial
interest in the Fund. For the Fund's fiscal year ended  November 30, 2005,  KPMG
did not provide any non-audit services or bill any fees for such services to the
Funds' investment adviser or any affiliates thereof that provide services to the
Fund. The Horejsi  Affiliates have engaged KPMG from time to time in the past to
provide  various  accounting,  auditing and  consulting  services and  currently
engages KPMG as a consultant with respect to ongoing tax related issues. For the
twelve months ended  November 30, 2004,  the Horejsi  Affiliates  paid $3,800 to
KPMG for their  services.  For the twelve  months ended  November 30, 2005,  the
Horejsi  Affiliates paid $0 to KPMG for their services.  The Audit Committee has
considered and concluded that the provision of non-audit  services is compatible
with maintaining the auditors' independence.

     SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING  COMPLIANCE.  Section 16(a) of
the 1934 Act and Section 30(h) of the 1940 Act requires the Fund's Directors and
officers,  persons affiliated with the Fund's investment  advisers,  and persons
who own more than 10% of a registered  class of the Fund's  securities,  to file
reports of  ownership  and  changes of  ownership  with the SEC and the New York
Stock  Exchange.  Directors,  officers  and  greater-than-10%  stockholders  are
required by SEC regulations to furnish the Fund with copies of all Section 16(a)
forms they file. Based solely upon the Fund's review of the copies of such forms
it receives and written  representations  from such  persons,  the Fund believes
that  through the date hereof all such filing  requirements  applicable  to such
persons were complied with.


     BROKER NON-VOTES AND ABSTENTIONS.  An uninstructed proxy for shares held by
brokers or nominees as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote and (ii) the broker or nominee
does not have  discretionary  voting  power on a  particular  matter is a broker
"non-vote". Proxies that reflect abstentions or broker non-votes will be counted
as shares that are present  and  entitled to vote on the matter for  purposes of
determining the presence of a quorum. Abstentions and broker non-votes will have
no effect on the result of the vote in the  election of directors in Proposal 1.
Abstentions  and broker  non-votes  will have the same  effect as votes  against
Proposal 2 and 3.

                    OTHER MATTERS TO COME BEFORE THE MEETING

     The Fund does not intend to present any other business at the Meeting,  nor
is it aware  that any  stockholder  intends  to do so.  If,  however,  any other
matters are  properly  brought  before the  Meeting,  the  persons  named in the
accompanying   form  of  proxy  will  vote  thereon  in  accordance  with  their
discretion.




--------------------------------------------------------------------------------
STOCKHOLDERS ARE REQUESTED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD OR
AUTHORIZE  PROXIES  VIA  TELEPHONE  OR THE  INTERNET.  THE PROXY CARD  SHOULD BE
RETURNED  IN THE  ENCLOSED  ENVELOPE,  WHICH  NEEDS NO  POSTAGE IF MAILED IN THE
UNITED STATES. INSTRUCTIONS FOR THE PROPER EXECUTION OF PROXIES ARE SET FORTH ON
THE INSIDE COVER.
--------------------------------------------------------------------------------






                                   EXHIBIT A


                         BOULDER TOTAL RETURN FUND, INC.

                              ARTICLES OF AMENDMENT


BOULDER TOTAL RETURN FUND, INC., a Maryland  corporation  (referred to herein as
the  "Fund"  or  the  "Corporation"),  certifies  to  the  State  Department  of
Assessments and Taxation of Maryland that:

FIRST:  The charter of the  Corporation  (the  "Charter")  is hereby  amended by
deleting in their  entirety the terms of the Taxable  Auction  Market  Preferred
Stock of the  Corporation  incorporated  by  reference  in  Section  4.11 of the
Charter and  substituting  in lieu thereof the  following  preferences,  rights,
voting   powers,   restrictions,   limitations   as  to   dividends   and  other
distributions,  qualifications,  and terms and conditions of redemption,  which,
upon any  restatement  of the  Charter,  shall be made part of Article IV of the
Charter,  with any necessary or appropriate  renumbering or  re-lettering of the
sections or subsections set forth below.

                     TAXABLE AUCTION MARKET PREFERRED STOCK

DESIGNATION

AMPS:  1,000  shares of  preferred  stock,  par value  $0.01 per  share,  of the
Corporation  are  classified  and designated  Taxable  Auction Market  Preferred
Stock, par value $0.01 per share, liquidation preference $100,000 per share (the
"AMPS").  Each AMPS shall have such other  preferences,  rights,  voting powers,
restrictions,   limitations   as   to   dividends   and   other   distributions,
qualifications  and terms and  conditions  of  redemption,  in addition to those
required by applicable  law or set forth in the Charter  applicable to shares of
Preferred Stock ("Preferred  Stock"),  as are set forth in Part I and Part II of
these  terms of the  AMPS.  The AMPS  shall  constitute  a  separate  series  of
Preferred Stock.

Subject to the provisions of Section 11 of Part I hereof, the Board of Directors
may, in the future,  authorize  the  issuance of  additional  AMPS with the same
preferences,  rights, voting powers,  restrictions,  limitations as to dividends
and other  distributions,  qualifications and terms and conditions of redemption
and other terms herein described,  except that the Initial Dividend Period,  the
Applicable Rate for the Initial Dividend Period and the initial Dividend Payment
Date  shall  be as set  forth in the  Articles  Supplementary  relating  to such
additional AMPS.

Capitalized  terms  used in Part I and Part II of these  terms of the AMPS shall
have the  meanings  (with the terms  defined in the singular  having  comparable
meanings when used in the plural and vice versa)  provided in the  "Definitions"
section immediately following, unless the context otherwise requires.

DEFINITIONS

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

"1940 Act" means the  Investment  Company Act of 1940,  as amended  from time to
time, and the rules and regulations thereunder.

"1940 Act Cure Date",  with  respect to the failure by the Fund to maintain  the
1940 Act Preferred  Share Asset  Coverage (as required by Section 5 of Part I of
these terms of the AMPS) as of the last  Business Day of each month,  shall mean
the last Business Day of the following month.

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

"Affected  Series" has the meaning set forth in Section  4(c) of Part I of these
terms of the AMPS.

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


"Agent Member" means a member of, or participant  in, the Securities  Depository
that will act on behalf of a  Beneficial  Owner of one or more AMPS or on behalf
of a Potential Beneficial Owner.

"Annual  Valuation Date" means the last Friday before the fiscal year end of the
Fund (or if the last  Friday is a holiday,  then the  immediate  prior  business
day).

"Applicable  Percentage" and "Applicable Spread" mean the percentage  determined
based on the lower of the credit  ratings  assigned  to the AMPS on such date by
Moody's and S&P (or if Moody's and S&P are not making such rating available, the
equivalent of such rating by a Substitute Rating Agency):

                      Applicable Percentage Payment Table

           Credit Ratings                   Applicable       Applicable Spread
                                            Percentage
      Moody's              S&P
        Aaa                AAA                 125%                1.25%
    Aa3 to Aa1          AA- to AA+             150%                1.50%
     A3 to A1            A- to A+              200%                2.00%
   Baa3 to Baa1        BBB- to BBB+            250%                2.50%
   Ba1 and lower      BB+ and lower            300%                3.00%



The Applicable  Percentage and the Applicable  Spread as so determined  shall be
further  subject to upward but not downward  adjustment in the discretion of the
Board of Directors (as defined below),  provided that immediately  following any
such  increase the Fund would be in compliance  with the  Preferred  Stock Basic
Maintenance Amount (as defined below). The Fund shall take all reasonable action
necessary  to enable  Moody's and S&P to provide a rating for the AMPS.  If both
Moody's and S&P shall not make such a rating  available,  the Fund shall  select
another  nationally  recognized  statistical  rating  organization to act as the
Substitute Rating Agency.  However,  the Fund shall not be required to have more
than one such rating organization provide a rating for the AMPS.

"Applicable  Rate" means the rate per annum at which cash  dividends are payable
on the AMPS for any Dividend Period.

"Approved  Price" means the "fair value" as determined by the Fund in accordance
with  the  valuation  procedures  adopted  from  time to time  by the  Board  of
Directors and for which the Fund receives a  marked-to-market  price (which, for
the purpose of clarity,  shall not mean Market Value) from an independent source
at least semi-annually.

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

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

"Auction  Date" with respect to any Dividend  Period shall mean the Business Day
next preceding the first day of such Dividend Period.

"Auction  Procedures" means the procedures for conducting  Auctions set forth in
Part II of these terms of the AMPS.

"Auditors'  Confirmation" has the meaning set forth in Section 6(c) of Part I of
these terms of the AMPS.

"Available AMPS" shall have the meaning  specified in paragraph (a) of Section 3
of Part II of these terms of the AMPS.

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

"Bid" and "Bids" shall have the respective  meanings  specified in paragraph (a)
of Section 1 of Part II of these terms of the AMPS.


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

"Board of Directors" " means the Board of Directors of the Fund.

"Broker-Dealer"  means any  broker-dealer,  or other entity  permitted by law to
perform the functions  required of a Broker-Dealer  in Part II of these terms of
the  AMPS,  that  has  been  selected  by  the  Fund  and  has  entered  into  a
Broker-Dealer Agreement with the Auction Agent that remains effective.

"Broker-Dealer  Agreement"  means an agreement  between the Auction  Agent and a
Broker-Dealer  pursuant  to  which  such  Broker-Dealer  agrees  to  follow  the
procedures specified in Part II of these terms of the AMPS.

"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 New
York City are authorized or obligated by law to close.

"Closing  Transaction" has the meaning set forth in Section 8(b)(i) of Part I of
these terms of the AMPS.

"Code"  means the Internal  Revenue Code of 1986,  as amended from time to time.
Each  reference  herein to a section of the Code shall be deemed to include  the
United States  Treasury  Regulations in effect  thereunder and applicable to the
AMPS or the use of proceeds thereof, and also includes all applicable amendments
or successor provisions unless the context requires otherwise.

"Common Stock" means the common stock, par value $0.01 per share, of the Fund.

"Cure Date" shall mean the Preferred  Stock Basic  Maintenance  Cure Date or the
1940 Act Cure Date.

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

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

"Discount  Factor" means an S&P Discount Factor or a Moody's Discount Factor, as
applicable.

"Discounted  Value" of any asset of the Fund  means the  quotient  of the Market
Value of an Eligible Asset divided by the applicable Discount Factor.

"Dividend  Payment  Date,"  with  respect to AMPS,  shall mean any date on which
dividends are payable on the AMPS pursuant to the provisions of paragraph (d) of
Section 2 of Part I of these terms of the AMPS.

"Dividend  Period"  with  respect to shares of a series of AMPS,  shall mean the
period from and including the Date of Original Issue of shares of such series to
but  excluding the initial  Dividend  Payment Date for shares of such series and
any period thereafter from and including one Dividend Payment Date for shares of
such series to but  excluding  the next  succeeding  Dividend  Payment  Date for
shares of such series.

"Eligible Asset" means an S&P Eligible Asset (if S&P is then rating the AMPS), a
Moody's  Eligible  Asset (if Moody's is then  rating the AMPS)  and/or any asset
included in the calculations  used by any Rating Agency then rating the AMPS for
purposes of determining such Rating Agency's rating on the AMPS, as applicable.

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

"Exposure  Period" on a Valuation Date means the period  commencing on such date
and ending 49 days  thereafter for Moody's.  With respect to S&P, the term shall
have the meaning set forth in the S&P Guidelines for "S&P Exposure Period".  The
Exposure  Period  may be  modified  by  resolution  of the  Board of  Directors;
provided,  however,  that the Fund shall have received  confirmation  in writing
from each Rating Agency that any such  modification  shall not adversely  affect
such Rating Agency's then-current rating of the AMPS.

"Failure to Deposit",  with respect to shares of a series of AMPS,  shall mean a
failure by the Fund to pay to the Auction Agent,  not later than 12:00 noon, New
York City time, (A) on the Business Day next preceding any Dividend Payment Date
for shares of such series,  in funds available on such Dividend  Payment Date in
the City of New York, New York, the full amount of any dividend  (whether or not
earned or  declared)  to be paid on such  Dividend  Payment Date on any share of
such series or (B) on the Business Day next  preceding  any  redemption  date in
funds available on such redemption date for shares of such series in the City of
New York, New York, the Redemption  Price to be paid on such redemption date for
any share of such  Series  after  Notice of  Redemption  is mailed  pursuant  to
paragraph  (c) of  Section  9 of Part I of these  terms of the  AMPS;  provided,
however,  that the foregoing clause (B) shall not apply to the Fund's failure to
pay the  Redemption  Price  in  respect  of AMPS  when  the  related  Notice  of
Redemption  provides  that  redemption  of such shares is subject to one or more
conditions  precedent  and any such  condition  precedent  shall  not have  been
satisfied  at the time or times and in the manner  specified  in such  Notice of
Redemption.


"Forward  Commitment"  has the meaning set forth in Section 8(a)(v) of Part I of
these terms of the AMPS.

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

"Hold Order" and "Hold Orders" shall have the respective  meanings  specified in
paragraph (a) of Section 1 of Part II of these terms of the AMPS.

"Independent  Accountant" means a nationally recognized  accountant,  or firm of
accountants, that is, with respect to the Fund, an independent public accountant
or firm of independent  public  accountants under the Securities Act and serving
as such for the Fund.

"Initial  Dividend  Period,"  with respect to shares of a series of AMPS,  shall
have the meaning specified with respect to shares of such series in Section 2(d)
of Part I of these terms of the AMPS.

"Late  Charge"  shall have the meaning  specified in  subparagraph  (e)(i)(B) of
Section 2 of Part I of these terms of the AMPS.

"LIBOR Dealer" means Merrill Lynch, Pierce, Fenner & Smith Incorporated and such
other  dealer or dealers as the Fund from time to time may  appoint  or, in lieu
thereof, their respective affiliates and successors.

"LIBOR  Rate," on any  Auction  Date,  means (i) the rate for  deposits  in U.S.
dollars for the designated  Dividend Period,  which appears on display page 3750
of Moneyline's  Telerate  Service  ("Telerate Page 3750") (or such other page as
may replace that page on that service,  or such other service as may be selected
by the LIBOR Dealer or its successors  that are LIBOR Dealers) as of 11:00 a.m.,
London time,  on the day that is the London  Business Day  preceding the Auction
Date (the "LIBOR  Determination  Date"), or (ii) if such rate does not appear on
Telerate  Page 3750 or such other page as may replace such  Telerate  Page 3750,
(A) the  LIBOR  Dealer  shall  determine  the  arithmetic  mean  of the  offered
quotations  of the  Reference  Banks to leading  banks in the  London  interbank
market for deposits in U.S.  dollars for the  designated  Dividend  Period in an
amount  determined by such LIBOR Dealer by reference to requests for  quotations
as of  approximately  11:00 a.m.  (London  time) on such date made by such LIBOR
Dealer  to the  Reference  Banks,  (B) if at least  two of the  Reference  Banks
provide such quotations, the LIBOR Rate shall equal such arithmetic mean of such
quotations,  (C) if  only  one or  none  of the  Reference  Banks  provide  such
quotations,  the LIBOR  Rate  shall be deemed to be the  arithmetic  mean of the
offered  quotations  that leading  banks in The City of New York selected by the
LIBOR Dealer (after  obtaining the Fund's  approval) are quoting on the relevant
LIBOR  Determination  Date  for  deposits  in U.S.  dollars  for the  designated
Dividend Period in an amount determined by the LIBOR Dealer (after obtaining the
Fund's approval) that is representative  of a single  transaction in such market
at such time by reference to the  principal  London  offices of leading banks in
the London interbank market; provided, however, that if one of the LIBOR Dealers
does not quote a rate required to determine the LIBOR Rate,  the LIBOR Rate will
be  determined  on the basis of the  quotation  or  quotations  furnished by any
Substitute  LIBOR Dealer or  Substitute  LIBOR  Dealers  selected by the Fund to
provide  such rate or rates not being  supplied  by the LIBOR  Dealer;  provided
further,  that if the LIBOR Dealer and Substitute LIBOR Dealers are required but
unable to  determine a rate in  accordance  with at least one of the  procedures
provided  above,  the LIBOR Rate shall be the LIBOR  Rate as  determined  on the
previous  Auction Date. If the number of Dividend  Period days shall be (i) 7 or
more but fewer than 21 days,  such rate shall be the seven-day  LIBOR rate; (ii)
more than 21 but fewer  than 49 days,  such rate  shall be the  one-month  LIBOR
rate;  (iii) 49 or more but fewer than 77 days, such rate shall be the two-month
LIBOR  rate;  (iv) 77 or more but fewer  than 112 days,  such rate  shall be the
three-month LIBOR rate; (v) 112 or more but fewer than 140 days, such rate shall
be the  four-month  LIBOR rate;  (vi) 140 or more but fewer than 168 days,  such
rate shall be the  five-month  LIBOR rate;  (vii) 168 or more but fewer than 189
days, such rate shall be the six-month LIBOR rate;  (viii) 189 or more but fewer
than 217 days, such rate shall be the  seven-month  LIBOR rate; (ix) 217 or more
but fewer than 252 days, such rate shall be the eight-month  LIBOR rate; (x) 252
or more but fewer than 287 days,  such rate shall be the nine-month  LIBOR rate;
(xi) 287 or more but fewer than 315 days, such rate shall be the ten-month LIBOR
rate;  (xii)  315 or more  but  fewer  than 343  days,  such  rate  shall be the
eleven-month  LIBOR rate;  and (xiii) 343 or more but fewer than 365 days,  such
rate shall be the twelve-month LIBOR rate.


"Lien" means any material lien, mortgage,  pledge, security interest or security
agreement of any kind.

"Liquidation Preference," with respect to a given number of AMPS, means $100,000
times that number.

"London Business Day" means any day on which commercial banks are generally open
for business in London.

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

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

"Maximum  Applicable  Rate" with respect to AMPS for any Dividend  Period is the
higher of the Applicable  Percentage of the Reference Rate or the Reference Rate
plus the Applicable Spread. The Applicable  Percentage and the Applicable Spread
for any regular  dividend  period shall be determined  based on the lower of the
credit  ratings  assigned to the AMPS by Moody's and S&P on the auction date for
such  period  as set  forth in the  definition  of  "Applicable  Percentage  and
Applicable Spread". If Moody's and/or S&P do not make such rating available, the
rate  shall be  determined  by  reference  to  equivalent  ratings  issued  by a
Substitute Rating Agency. In the case of a special rate period,  (1) the Maximum
Applicable Rate shall be specified by the Fund in the Notice of Special Dividend
Period for such Dividend  Payment Period and (2) the  Applicable  Percentage and
Applicable  Spread shall be  determined on the date two business days before the
first day of such Special  Dividend  Period.  The Auction Agent shall round each
applicable Maximum Applicable Rate to the nearest  one-thousandth (0.001) of one
percent per annum,  with any such number ending in five  ten-thousandths  of one
percent  being  rounded  upwards to the  nearest  one-thousandth  (0.001) of one
percent.

"Minimum  Dividend  Period" shall mean any Dividend Period of twenty-eight  (28)
days.

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

"Moody's  Discount  Factor" means the discount  factors set forth in the Moody's
Guidelines for use in calculating  the Discounted  Value of the Fund's assets in
connection with Moody's ratings of the AMPS.

"Moody's  Eligible  Assets"  means  assets of the Fund set forth in the  Moody's
Guidelines as eligible for inclusion in calculating the Discounted  Value of the
Fund's assets in connection with Moody's ratings of the AMPS.

"Moody's  Guidelines"  shall mean the Moody's  Preferred  Stock  Guidelines,  as
amended from time to time as provided  below.  The terms of the AMPS are subject
to the  Moody's  Guidelines  for so long as the AMPS are rated by  Moody's.  The
Moody's  Guidelines  may be  amended  by Moody's  without  the vote,  consent or
approval  of the Fund,  the Board of  Directors  or any  holder of shares of the
AMPS, including any series of AMPS, or any other stockholder of the Fund.

"Municipal  Obligations" means municipal obligations,  including municipal bonds
and  short-term  municipal  obligations,  the interest from which is exempt from
federal  income  taxes.

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

"Non-Payment  Period  Rate"  for  any  period  means,  initially,  300%  of  the
applicable  Reference Rate,  provided that the Board of Directors 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  determines  and the Rating
Agencies  advise  the  Fund  in  writing  that  such  adjustment,  modification,
alteration or change will not adversely  affect its then current  ratings on the
AMPS.


"Notice of  Redemption"  shall mean any notice with respect to the redemption of
AMPS  pursuant  to  paragraph  (c) of Section 9 of Part I of these  terms of the
AMPS.

"Notice of Special  Dividend  Period"  shall mean any notice  with  respect to a
Special Dividend Period of AMPS pursuant to paragraph (b) of Section 3 of Part I
of these terms of the AMPS.

"Optional  Redemption  Price"  means  $100,000 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.

"Order" and "Orders" shall have the respective  meanings  specified in paragraph
(a) of Section 1 of Part II of these terms of the AMPS.

"Outstanding"  means,  as of any date (i) AMPS  theretofore  issued  by the Fund
except,  without duplication,  (A) any AMPS theretofore canceled or delivered to
the Auction  Agent for  cancellation,  or redeemed by the Fund, or as to which a
Notice of  Redemption  shall have been given and Deposit  Securities  shall have
been  deposited in trust or segregated by the Fund pursuant to Section 9 of Part
I of these  terms  of the  AMPS  and (B) any  AMPS as to  which  the Fund or any
Affiliate (other than an Affiliate that is a  Broker-Dealer)  thereof shall be a
Beneficial  Owner,  provided  that  AMPS  held by an  Affiliate  shall be deemed
outstanding for purposes of calculating  the Preferred  Stock Basic  Maintenance
Amount and (ii) with respect to other  preferred  stock of the Fund, the meaning
equivalent to that for AMPS as set forth in clause (i) of this paragraph.

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

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

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

"Preferred Stock Basic Maintenance Amount", as of any Valuation Date, shall have
the meaning set forth in the respective Rating Agency Guidelines.

"Preferred Stock Basic  Maintenance  Cure Date",  with respect to the failure by
the Fund to satisfy the Preferred Stock Basic Maintenance Amount (as required by
Section 6 of Part I of these  terms of the AMPS) as of a given  Valuation  Date,
means the sixth Business Day following such Valuation Date.

"Preferred  Stock  Basic  Maintenance  Report"  means a report as of the related
Valuation  Date of the assets of the Fund,  the Market Value and the  Discounted
Value  thereof  (seriatim  and in  aggregate),  and the  Preferred  Stock  Basic
Maintenance Amount.

"Preferred Stock Paying Agent" means Deutsche Bank Trust Company Americas unless
and until  another bank or trust company has been  appointed as Preferred  Stock
Paying  Agent by a  resolution  of the Board of Directors  and  thereafter  such
substitute bank or trust company.

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

"Pricing Service" means any pricing service designated by the Board of Directors
of the Fund and approved by the Rating Agencies, as applicable,  for purposes of
determining  whether the Fund has Eligible  Assets with an aggregate  Discounted
Value that equals or exceeds the Preferred Stock Basic Maintenance Amount.

"Rating Agency" or "Rating Agencies" shall mean, collectively,  Moody's and S&P,
or such other nationally  recognized rating organization selected by the Fund to
act as the  Substitute  Rating  Agency  (defined  below) to determine the credit
ratings of the AMPS.

"Rating  Agency  Guidelines"  means the S&P  Guidelines  (if S&P is then  rating
AMPS), Moody's Guidelines (if Moody's is then rating AMPS) and the guidelines of
any  Substitute  Rating  Agency (if a  Substitute  Rating  Agency is then rating
AMPS), whichever is applicable.


"Receivables  for  Municipal  Obligations  Sold"  shall  mean  for  purposes  of
calculation  of  Eligible  Assets  as of any  Valuation  Date,  no more than the
aggregate of the following:

     (i) the book value of receivables for Municipal  Obligations  sold as of or
prior to such  Valuation Date if such  receivables  are due within five business
days of such Valuation Date, and if the trades which generated such  receivables
are (x) settled through  clearing house firms with respect to which the Fund has
received  prior  written  authorization  from  the  Rating  Agency  or (y)  with
counterparties  having the Rating  Agency's  long-term  debt  rating of at least
Baa3; and

         (ii) the Rating Agency's Discounted Value of Municipal Obligations sold
     as of or prior to such Valuation Date which generated receivables, if such
receivables are due within five business days of such Valuation Date but do not
comply with either of the conditions specified in (i) above.

"Redemption  Price"  shall mean the  applicable  redemption  price  specified in
paragraph (a) or (b) of Section 9 of Part I of these terms of the AMPS.

"Reference  Banks" means Merrill  Lynch,  Pierce,  Fenner & Smith  Incorporated,
Citigroup Global Markets Inc., UBS Securities LLC or any other major bank in the
London interbank market chosen by the LIBOR Dealer or Substitute LIBOR Dealer.

"Reference Rate" means (i) with respect to a dividend period having 364 or fewer
days,  the  applicable  LIBOR Rate and (ii) with  respect  to a dividend  period
having 365 or more days, the applicable Treasury Index Rate.

"Rule 2a-7 Money Market Funds" means investment  companies  registered under the
1940 Act that comply with Rule 2a-7 thereunder.

"Rule 144A Securities"  means securities which are restricted as to resale under
federal  securities laws but are eligible for resale pursuant to Rule 144A under
the Securities Act as determined by the Fund's  investment  manager or portfolio
manager acting pursuant to procedures approved by the Board of Directors.

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

"S&P Discount Factor" means the discount factors set forth in the S&P Guidelines
for use in calculating  the Discounted  Value of the Fund's assets in connection
with S&P's ratings of the AMPS.

"S&P Eligible  Assets" means assets of the Fund set forth in the S&P  Guidelines
as eligible for  inclusion in  calculating  the  Discounted  Value of the Fund's
assets in connection with S&P's ratings of the AMPS.

"S&P Guidelines" shall mean the S&P Preferred Stock Guidelines,  as amended from
time to time as  provided  below.  The terms of the AMPS are  subject to the S&P
Guidelines  for so long as the AMPS are rated by S&P. The S&P  Guidelines may be
amended by S&P without the vote,  consent or approval of the Fund,  the Board of
Directors or any holder of shares of the AMPS,  including any series of AMPS, or
any other stockholder of the Fund.

"Securities Act" means the Securities Act of 1933, as amended from time to time.

"Securities  Depository"  means The Depository  Trust Company and its successors
and  assigns or any  successor  securities  depository  selected  by the Fund as
securities depository for the AMPS that agrees to follow the procedures required
to be followed by such securities depository in connection with the AMPS.

"Sell Order" and "Sell Orders" shall have the respective  meanings  specified in
paragraph (a) of Section 1 of Part II of these terms of the AMPS.

"Share  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.

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

"Short Term Dividend  Period" means a Special  Dividend  Period  consisting of a
specified  number of days,  evenly  divisible by seven and not fewer than 28 nor
more than 364.

"Special  Dividend  Period",  with respect to shares of a series of AMPS,  shall
have the  meaning  specified  in  paragraph  (a) of Section 3 of Part I of these
terms of the AMPS.


"Special Redemption Provisions" shall have the meaning specified in subparagraph
(a)(i) of Section 9 of Part I of these terms of the AMPS.

"Specific  Redemption  Provisions"  means,  with  respect to a Special  Dividend
Period either, or both, of

     (i)  a  period  (a  "Non-Call  Period")   determined  by  the  Fund,  after
consultation  with the Auction  Agent and the  Broker-Dealers,  during which the
AMPS subject to such  Dividend  Period shall not be subject to redemption at the
option of the Fund; and

     (ii) a period (a  "Premium  Call  Period")  determined  by the Fund,  after
consultation with the Auction Agent and the Broker-Dealers,  during each year of
which the AMPS subject to such Dividend Period shall be redeemable at the Fund's
option  at a price per share  equal to  $100,000  plus  accumulated  but  unpaid
dividends plus a premium expressed as a percentage of $100,000, as determined by
the Fund after consultation with the Auction Agent and the Broker-Dealers.

"Submission  Deadline"  shall mean 1:00 P.M. New York City time,  on any Auction
Date or such other time on any Auction Date by which Broker-Dealers are required
to submit  Orders to the Auction  Agent as specified  by the Auction  Agent from
time to time.

"Submitted  Bid"  and  "Submitted  Bids"  shall  have  the  respective  meanings
specified in paragraph (a) of Section 3 of Part II of these terms of the AMPS.

"Submitted  Hold Order" and  "Submitted  Hold Orders" shall have the  respective
meanings  specified in  paragraph  (a) of Section 3 of Part II of these terms of
the AMPS.

"Submitted  Order" and  "Submitted  Orders" shall have the  respective  meanings
specified in paragraph (a) of section 3 of part II of these terms of the AMPS.

"Submitted  Sell Order" and  "Submitted  Sell Orders" shall have the  respective
meanings  specified in  paragraph  (a) of Section 3 of Part II of these terms of
the AMPS.

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

"Substitute  LIBOR  Dealer"  means any LIBOR  dealer  selected by the Fund as to
which the Rating Agencies shall not have objected;  provided, however, that none
of such entities shall be an existing LIBOR Dealer (as defined above).

"Substitute  Rating  Agency" means a nationally  recognized  statistical  rating
organization  selected  by the Fund to act as the  substitute  rating  agency to
determine the credit ratings of the AMPS.

"Substitute  U.S.  Government  Securities  Dealer"  means  any  U.S.  Government
securities dealer selected by the Fund as to which the Rating Agencies shall not
have  objected;  provided,  however,  that  none of such  entities  shall  be an
existing U.S. Government Securities Dealer.

"Sufficient  Clearing Bids" has the meaning set forth in Section 3 of Part II of
these terms of the AMPS.

"Treasury Index Rate",  means the average yield to maturity for actively traded,
marketable U.S.  Treasury fixed interest rate securities  having the same number
of 30-day periods to maturity as the length of the applicable  Dividend  Period,
determined,  to the extent  necessary,  by linear  interpolation  based upon the
yield for such  securities  having the next  shorter and next  longer  number of
30-day periods to maturity  treating all Dividend  Periods with a length greater
than the longest  maturity for such  securities as having a length equal to such
longest  maturity,  in all cases  based  upon data set forth in the most  recent
weekly  statistical  release  published by the Board of Governors of the Federal
Reserve System (currently in H.15(519));  provided,  however, if the most recent
such  statistical  release  shall not have  been  published  during  the 15 days
preceding the date of  computation,  the foregoing  computations  shall be based
upon the average of comparable data as quoted to the Fund by at least three U.S.
Government  Securities Dealers selected by the Fund; provided further,  however,
that if one of the U.S.  Government  Securities  Dealers  does not  quote a rate
required to determine the Treasury  Index Rate,  the Treasury Index Rate will be
determined  on the  basis  of  the  quotation  or  quotations  furnished  by any
Substitute  U.S.  Government  Securities  Dealer or Substitute  U.S.  Government
Securities  Dealers selected by the Fund to provide such rate or rates not being
supplied by the U.S. Government Securities Dealer; provided further, that if the
U.S.  Government  Securities  Dealer and Substitute U.S.  Government  Securities
Dealers are required but unable to determine a rate in accordance  with at least
one of the  procedures  provided  above,  the  Treasury  Index Rate shall be the
Treasury Index Rate as determined on the previous Auction Date.


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

"U.S.   Government   Securities  Dealer"  means  Lehman  Government   Securities
Incorporated, Goldman, Sachs & Co., Salomon Brothers Inc., Morgan Guaranty Trust
Company of New York and any other U.S. Government  Securities dealer selected by
the Fund as to which  the  Rating  Agencies  shall  not have  objected  or their
respective  affiliates  or  successors,  if  such  entity  is a U.S.  Government
securities dealer.

"U.S.  Treasury  Securities"  means  direct  obligations  of the  United  States
Treasury that are entitled to the full faith and credit of the United States.

"U.S.  Treasury  Strips"  means  securities  based on U.S.  Treasury  Securities
created  through the Separate  Trading of  Registered  Interest and Principal of
Securities program.

"Valuation  Date"  means,  for  purposes  of  determining  whether  the  Fund is
maintaining the Preferred Stock Basic Maintenance  Amount, the last Business Day
of each week commencing with the Date of Original Issue.

"Valuation  Procedures"  means the  procedures  adopted from time to time by the
Board of Directors for valuing the assets of the Fund.

"Voting  Period" has the meaning set forth in Section 4 of Part I of these terms
of the AMPS.

"Winning Bid Rate" shall have the meaning  specified in paragraph (a) of Section
3 of Part II of these terms of the AMPS.

                                     PART I

     1.  NUMBER  OF  AUTHORIZED   SHARES.   The  number  of  authorized   shares
constituting  the AMPS is 1,000,  such shares  having the  preferences,  rights,
voting   powers,   restrictions,   limitations   as  to   dividends   and  other
distributions,  qualifications  and terms and  conditions  of  redemption as set
forth herein.

     2. DIVIDENDS.

          (a)  Ranking.  The shares of a series of the AMPS shall rank on parity
     with each  other,  with  shares  of any  other  series of the AMPS and with
     shares  of any  other  series  of  Preferred  Stock  as to the  payment  of
     dividends by the Fund.

          (b) Cumulative Cash Dividends. The Holders of any series of AMPS shall
     be  entitled  to  receive,  when,  as and if  authorized  by the  Board  of
     Directors  and  declared  by the  Fund,  out  of  funds  legally  available
     therefor,  in accordance  with these terms of the AMPS and applicable  law,
     cumulative cash dividends at the Applicable Rate for shares of such series,
     determined  as set forth in  paragraph  (e) of this Section 2, and no more,
     payable on the Dividend Payment Dates with respect to shares of such series
     determined  pursuant to  paragraph  (d) of this  Section 2. Holders of AMPS
     shall not be entitled to any dividend, whether payable in cash, property or
     shares,  in excess of full cumulative  dividends,  as herein  provided,  on
     AMPS. No interest, or sum of money in lieu of interest, shall be payable in
     respect  of any  dividend  payment  or  payments  on AMPS  which  may be in
     arrears, and, except to the extent set forth in subparagraph (e)(i) of this
     Section 2, no  additional  sum of money  shall be payable in respect of any
     such arrearage.  To the extent permitted under the Code,  dividends on AMPS
     will be designated as exempt-interest  dividends.  For the purposes of this
     section,  the term "net  tax-exempt  income" shall exclude capital gains of
     the Fund.

          (c) Dividends Cumulative From Date of Original Issue. Dividends on any
     series of AMPS shall  accumulate at the Applicable  Rate for shares of such
     series from the Date of Original Issue thereof.

          (d) Dividend Payment Dates and Adjustment Thereof.


               (i) The Dividend  Payment Date with respect to the AMPS,  for the
          Initial Dividend Period, was September 13, 2000.

               (ii) The Dividend Payment Date for any Subsequent Dividend Period
          shall be:

                    (A) with  respect  to any  Minimum  Dividend  Period and any
               Short Term  Dividend  Period of 35 or fewer days, on the Business
               Day next  succeeding  the last  day of such  Subsequent  Dividend
               Period; and

                    (B) with respect to any Short Term  Dividend  Period of more
               than 35 days and with respect to any Long Term  Dividend  Period,
               monthly on the first  Business Day of each calendar  month during
               such Short Term Dividend  Period or Long Term Dividend Period and
               on the  Business  Day  next  succeeding  the  last  day  of  such
               Subsequent  Dividend Period (each such date referred to in clause
               (i) or  (ii)  being  herein  referred  to as a  "Normal  Dividend
               Payment Date"),  except that if such Normal Dividend Payment Date
               is not a Business  Day,  then the Dividend  Payment Date shall be
               the first  Business  Day next  succeeding  such  Normal  Dividend
               Payment Date.  Although any particular  Dividend Payment Date may
               not  occur  on  the  originally  scheduled  date  because  of the
               exceptions  discussed above, the next succeeding Dividend Payment
               Date,  subject  to  such  exceptions,  will  occur  on  the  next
               following originally scheduled Dividend Payment Date; and

               (iii)  Notwithstanding the foregoing,  the Fund in its discretion
          may  establish  Dividend  Payment  Dates  other  than as  provided  in
          paragraph  (d) of this  Section 2 of Part I of these terms of the AMPS
          in respect  of any  Special  Dividend  Period of shares of a series of
          AMPS  consisting  of more than a Minimum  Dividend  Period (a "Special
          Dividend Payment Date"); provided, however, that such Special Dividend
          Payment  Dates  shall be set forth in the Notice of  Special  Dividend
          Period (as defined herein)  relating to such Special  Dividend Period,
          as delivered to the Auction  Agent,  which Notice of Special  Dividend
          Period  shall be filed with the  Secretary  of the Fund;  and  further
          provided  that (1) any such Special  Dividend  Payment Date shall be a
          Business Day and (2) the last Special Dividend Payment Date in respect
          of such Special  Dividend Period shall be the Business Day immediately
          following the last day thereof.

     (e) Dividend Rates and Calculation of Dividends.

          (i) Dividend  Rates.  The dividend  rate on the AMPS during the period
     from and after the Date of Original  Issue of the AMPS to and including the
     last day of the  Initial  Dividend  Period of the AMPS was 6.57% per annum.
     The initial dividend rate on any series of AMPS subsequently established by
     the Fund shall be the rate set forth in or determined  in  accordance  with
     the  resolutions of the Board of Directors  establishing  such series.  For
     each Subsequent  Dividend Period of shares of such series  thereafter,  the
     dividend rate on shares of such series shall be equal to the rate per annum
     that  results from an Auction for shares of such series on the Auction Date
     next preceding such Subsequent Dividend Period; provided, however, that if:

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

               B. any Failure to Deposit  shall have  occurred  with  respect to
          shares of such series during any Dividend Period thereof but, prior to
          12:00  Noon,  New York  City  time,  on the  third  Business  Day next
          succeeding  the date on which such Failure to Deposit  occurred,  such
          Failure to Deposit shall have been cured in accordance  with paragraph
          (f) of this  Section 2 and the Fund  shall  have  paid to the  Auction
          Agent a late charge  ("Late  Charge")  equal to the sum of (1) if such
          Failure  to  Deposit  consisted  of the  failure  timely to pay to the
          Auction  Agent  the full  amount  of  dividends  with  respect  to any
          Dividend  Period of the shares of such series,  an amount  computed by
          multiplying  (x) 300% of the  Reference  Rate for the Dividend  Period
          during  which such Failure to Deposit  occurs on the Dividend  Payment
          Date for such  Dividend  Period by (y) a fraction,  the  numerator  of
          which  shall be the number of days for which  such  Failure to Deposit
          has not been cured in accordance  with paragraph (f) of this Section 2
          (including  the day such Failure to Deposit  occurs and  excluding the
          day such  Failure to Deposit  is cured) and the  denominator  of which
          shall be 360,  and applying the rate  obtained  against the  aggregate
          Liquidation  Preference of the  outstanding  shares of such series and
          (2) if such Failure to Deposit  consisted of the failure timely to pay
          to the Auction Agent the  Redemption  Price of the shares,  if any, of
          such series for which Notice of Redemption has been mailed by the Fund
          pursuant  to  paragraph  (c) of  Section  9 of this  Part I, an amount
          computed  by  multiplying  (x)  300%  of the  Reference  Rate  for the
          Dividend  Period  during which such  Failure to Deposit  occurs on the
          redemption date by (y) a fraction, the numerator of which shall be the
          number of days for  which  such  Failure  to  Deposit  is not cured in
          accordance  with  paragraph  (f) of this Section 2 (including  the day
          such Failure to Deposit  occurs and  excluding the day such Failure to
          Deposit  is cured)  and the  denominator  of which  shall be 360,  and
          applying  the  rate  obtained   against  the   aggregate   Liquidation
          Preference  of the  outstanding  shares of such series to be redeemed,
          then no Auction  will be held in respect of shares of such  series for
          the  Subsequent  Dividend  Period  thereof and the  dividend  rate for
          shares of such series for such Subsequent  Dividend Period will be the
          Maximum  Applicable Rate for shares of such series on the Auction Date
          for such Subsequent Dividend Period; or


               C. any Failure to Deposit  shall have  occurred  with  respect to
          shares of such series during any Dividend Period  thereof,  and, prior
          to 12:00  Noon,  New York City time,  on the third  Business  Day next
          succeeding  the date on which such Failure to Deposit  occurred,  such
          Failure  to  Deposit  shall not have  been  cured in  accordance  with
          paragraph  (f) of this  Section 2 or the Fund  shall not have paid the
          applicable  Late Charge to the Auction Agent,  then no Auction will be
          held in  respect  of shares of such  series  for the first  Subsequent
          Dividend Period  thereafter (or for any Dividend Period  thereafter to
          and  including  the Dividend  Period  during which (1) such Failure to
          Deposit is cured in  accordance  with  paragraph (f) of this Section 2
          and (2) the Fund pays the applicable  Late Charge to the Auction Agent
          (the condition set forth in this clause (2) to apply only in the event
          Moody's is rating such shares at the time the Fund cures such  Failure
          to  Deposit),  in each case no later  than 12:00  Noon,  New York City
          time,  on the fourth  Business  Day prior to the end of such  Dividend
          Period), and the dividend rate for shares of such series for each such
          Subsequent  Dividend  Period  shall be a rate per  annum  equal to the
          Non-Payment  Period Rate for shares of such series on the Auction Date
          for such Subsequent Dividend Period.

          (ii)  Calculation  of  Dividends.  The amount of  dividends  per share
     payable on shares of a series of AMPS on any date on which  dividends shall
     be payable on shares of such series  shall be computed by  multiplying  the
     Applicable  Rate for  shares of such  series in  effect  for such  Dividend
     Period or Dividend  Periods or part  thereof for which  dividends  have not
     been paid,  by a fraction,  the  numerator  of which shall be the number of
     days in such  Dividend  Period or Dividend  Periods or part thereof and the
     denominator  of which shall be 360, and applying the rate obtained  against
     $100,000, and rounding the amount obtained to the nearest cent.

          (f) Curing a Failure to Deposit.  A Failure to Deposit with respect to
     shares  of a series of AMPS  shall  have been  cured  (if such  Failure  to
     Deposit is not solely  due to the  willful  failure of the Fund to make the
     required  payment to the Auction Agent) with respect to any Dividend Period
     of shares of such series if, within the respective  time periods  described
     in  subparagraph  (e)(i) of this Section 2, the Fund shall have paid to the
     Auction Agent (A) all accumulated and unpaid  dividends and Late Charges on
     shares of such Series and (B) without duplication, the Redemption Price for
     shares,  if any, of such  series for which  Notice of  Redemption  has been
     mailed by the Fund  pursuant  to  paragraph  (c) of  Section 9 of Part I of
     these terms of the AMPS; provided,  however,  that the foregoing clause (B)
     shall  not  apply to the  Fund's  failure  to pay the  Redemption  Price in
     respect  of AMPS  when the  related  Notice  of  Redemption  provides  that
     redemption  of such shares is subject to one or more  conditions  precedent
     and any such condition  precedent shall not have been satisfied at the time
     or times and in the manner specified in such Notice of Redemption.


          (g) Dividend  Payments by Fund to Auction Agent. The Fund shall pay to
     the Auction  Agent,  not later than 12:00 Noon,  New York City time, on the
     Business  Day next  preceding  each  Dividend  Payment Date for shares of a
     series of AMPS, an aggregate amount of funds available on the next Business
     Day in the City of New York, New York, equal to the dividends to be paid to
     all Holders of shares of such series on such Dividend Payment Date.

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

          (i) Dividends Paid to Holders.  Each dividend on AMPS shall be paid on
     the respective  Dividend Payment Date to the Holders thereof as their names
     appear on the Share Books on the Business Day next  preceding such Dividend
     Payment Date.

          (j)  Dividends  Credited  Against  Earliest   Accumulated  but  Unpaid
     Dividends.  Any  dividend  payment  made on AMPS  shall  first be  credited
     against the earliest  accumulated but unpaid  dividends due with respect to
     such  shares.  Dividends  in arrears  for any past  Dividend  Period may be
     declared and paid at any time,  without  reference to any regular  Dividend
     Payment  Date,  to the Holders as their names  appear on the Share Books on
     such date, not exceeding 15 days preceding the payment date thereof, as may
     be fixed by the Board of Directors.

     3. DESIGNATION OF SPECIAL DIVIDEND PERIODS.

          (a) The Fund,  at its 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,  may  request  that the next
     succeeding  Dividend Period for any series of AMPS will be a number of days
     (other than twenty-eight)  evenly divisible by seven, and not more than 364
     in the case of a Short Term  Dividend  Period or one whole year or more but
     not  greater  than five years in the case of a Long Term  Dividend  Period,
     specified in such notice, provided that the Fund may not give a Request for
     Special  Dividend  Period  (and any  such  request  will be null and  void)
     unless, for any Auction occurring after the initial Auction, (i) an Auction
     for shares of such series is held on the Auction Date immediately preceding
     the first day of such proposed  Special  Dividend  Period,  (ii) Sufficient
     Clearing  Bids  were  made in  such  Auction,  and  (iii)  full  cumulative
     dividends and any amounts due with respect to redemptions have been paid in
     full, and provided further that the Fund may not request a Special Dividend
     Period unless the Fund shall have received  written  confirmation  from the
     Rating Agencies that the Fund's election of the proposed  Special  Dividend
     Period would not impair the rating then assigned by the Rating  Agencies of
     the applicable series of AMPS and the lead Broker-Dealer  designated by the
     Fund,  initially Merrill Lynch, Pierce,  Fenner & Smith Incorporated,  does
     not object to the declaration of such Special Dividend Period. Such Request
     for Special Dividend  Period,  in the case of a Short Term Dividend Period,
     shall be given on or prior to the  second  Business  Day but not more  than
     seven  Business  Days prior to an Auction  Date for the AMPS of that series
     and, in the case of a Long Term Dividend Period, shall be given on or prior
     to the second Business Day but not more than  twenty-eight days prior to an
     Auction Date for the AMPS of that series.  Upon  receiving such Request for
     Special Dividend  Period,  the  Broker-Dealers  jointly shall determine the
     Optional  Redemption  Price of the AMPS of that series  during such Special
     Dividend Period and the Specific  Redemption  Provisions and shall give the
     Fund  and  the  Auction  Agent  written   notice  (a  "Response")  of  such
     determination  by no  later  than the  second  Business  Day  prior to such
     Auction  date.  In  making  such  determination,  the  Broker-Dealers  will
     consider (i) existing  short-term and long-term market rates and indices of
     such short-term and long-term rates, (ii) existing market supply and demand
     for  short-term and long-term  securities,  (iii) existing yield curves for
     short-term and long-term  securities  comparable to the AMPS, (iv) industry
     and financial  conditions which may affect the AMPS of that series, (v) the
     investment  objectives  of the  Fund  and (vi)  the  Dividend  Periods  and
     dividend  rates at which  current and potential  beneficial  holders of the
     AMPS would remain or become beneficial holders.


          (b) After  providing  the Request for Special  Dividend  Period to the
     Auction Agent and each  Broker-Dealer  as set forth above,  the Fund, by no
     later than the second  Business Day prior to such Auction Date,  may give a
     notice (a "Notice of Special  Dividend  Period") to the Auction Agent,  the
     Securities  Depository,  each  Broker-Dealer  and the Rating  Agency  which
     notice will specify the duration of the Special Dividend  Period.  The Fund
     will not give a Notice of Special  Dividend  Period  and, if such Notice of
     Special Dividend Period was given already, will give telephonic and written
     notice of its revocation (a "Notice of  Revocation")  to the Auction Agent,
     each Broker-Dealer,  the Securities  Depository and the Rating Agency on or
     prior to the Business Day prior to the relevant  Auction Date if (x) either
     the 1940 Act Preferred  Share Asset  Coverage or the Preferred  Stock Basic
     Maintenance  Amount  is not  satisfied,  on each of the two  Business  Days
     immediately  preceding the Business Day prior to the relevant  Auction Date
     or (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 Auction Date immediately preceding such Dividend
     Payment Date.  The Fund also shall provide a copy of such Notice of Special
     Dividend  Period to each  Rating  Agency.  If the Fund is  prohibited  from
     giving a Notice of  Special  Dividend  Period  as a result  of the  factors
     enumerated  in  clause  (x) or (y)  above or if the Fund  gives a Notice of
     Revocation with respect to a Notice of Special  Dividend  Period,  the next
     succeeding  Dividend  Period  for that  series  of AMPS  will be a  Minimum
     Dividend Period. In addition, in the event Sufficient Clearing Bids are not
     made in an Auction,  or if an Auction is not held for any reason,  the next
     succeeding  Dividend Period will be a Minimum Dividend Period, and the Fund
     may not  again  give a Notice  of  Special  Dividend  Period  (and any such
     attempted notice will be null and void) until Sufficient Clearing Bids have
     been made in an Auction  with  respect  to a Minimum  Dividend  Period.

     4. VOTING RIGHTS.

          (a) One Vote Per Share of AMPS.  Except as  otherwise  provided in the
     Charter or as  otherwise  required by law, (i) each Holder of AMPS shall be
     entitled  to one vote for each  share of AMPS  held by such  Holder on each
     matter  submitted  to a vote of  stockholders  of the  Fund,  and  (ii) the
     holders  of  outstanding  AMPS and any other  class or series of  Preferred
     Stock and of Common Stock shall vote together as a single class;  provided,
     however, that the holders of outstanding AMPS and any other class or series
     of Preferred  Stock shall be entitled,  as a class, to the exclusion of the
     holders  of all  classes  and  series  of stock of the  Fund,  to elect two
     Directors of the Fund out of the entire Board of Directors  (regardless  of
     the number of  Directors),  each  share of the AMPS and any other  class or
     series  of  Preferred  Stock  entitling  the  holder  thereof  to one vote;
     provided,  further,  that the  Board of  Directors  shall  determine  which
     Directors  are to be elected by the holders of the AMPS and any other class
     or series of  Preferred  Stock  and the  holders  of the AMPS and any other
     class or series of  Preferred  Stock  shall be  entitled  to elect only the
     Directors so designated as being elected by the holders of the AMPS and any
     other  class or series of  Preferred  Stock,  when  their  term  shall have
     expired; provided, finally, that, if the Board of Directors is divided into
     classes,  such Directors elected by the holders of the AMPS any other class
     or series of Preferred Stock shall be allocated as evenly as possible among
     the classes of Directors as determined  by the Board of Directors.  Subject
     to paragraph (b) of this Section 4, the holders of outstanding Common Stock
     and Preferred  Stock,  voting  together as a single class,  shall elect the
     balance of the Directors.

          (b) Voting For Additional Directors.

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


                    (A) if at the close of business on any Dividend Payment Date
               accumulated  dividends (whether or not earned or declared) on any
               outstanding  AMPS,  equal to at least two full  years'  dividends
               shall  be  due  and  unpaid  and  sufficient  cash  or  specified
               securities  shall not have been  deposited with the Auction Agent
               for the payment of such accumulated dividends; or

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

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

               (ii) Notice of Special Meeting.  As soon as practicable after the
          accrual of any right of the Holders of Preferred Stock,  including the
          AMPS,  to elect  additional  Directors as  described  in  subparagraph
          (b)(i) of this Section 4, the Fund shall notify the Auction  Agent and
          the Auction  Agent shall call a special  meeting of such  Holders,  by
          mailing a notice of such special meeting to such Holders, such meeting
          to be held not less than ten nor more than  twenty days after the date
          of mailing of such  notice.  If the Fund fails to send such  notice to
          the Auction Agent or if the Auction Agent does not call such a special
          meeting,  it may be called  by any such  Holder  on like  notice.  The
          record date for determining  the Holders  entitled to notice of and to
          vote at such  special  meeting  shall be the close of  business on the
          fifth  Business Day  preceding the day on which such notice is mailed.
          At any  such  special  meeting  and at  each  meeting  of  Holders  of
          Preferred  Stock,  including the AMPS,  held during a Voting Period at
          which Directors are to be elected, such Holders,  voting together as a
          class (to the  exclusion of the holders of all other classes or series
          of stock of the  Fund),  shall be  entitled  to elect  the  number  of
          Directors  prescribed  in  subparagraph  (b)(i) of this Section 4 on a
          one-vote-per-share basis.

               (iii) Terms of Office of Existing Directors.  The terms of office
          of all persons who are  Directors of the Fund at the time of a special
          meeting  of Holders  and  holders  of other  Preferred  Stock to elect
          Directors shall continue, notwithstanding the election at such meeting
          by the Holders and such other holders of the number of Directors  that
          they are entitled to elect,  and the persons so elected by the Holders
          and such other  holders,  together  with the two  incumbent  Directors
          elected by the Holders and such other  holders of Preferred  Stock and
          the remaining incumbent Directors elected by the holders of the Common
          Stock and AMPS,  shall  constitute  the duly elected  Directors of the
          Fund.

               (iv)  Terms of Office of  Certain  Directors  to  Terminate  Upon
          Termination of Voting Period. Simultaneously with the termination of a
          Voting Period, the terms of office of the additional Directors elected
          by the  Holders and  holders of other  classes or series of  Preferred
          Stock  pursuant  to  subparagraph  (b)(i)  of  this  Section  4  shall
          terminate,  the remaining  Directors shall constitute the Directors of
          the Fund, the number of Directors  constituting the Board of Directors
          shall  decrease  accordingly  and the voting rights of the Holders and
          such  other  holders  to  elect  additional   Directors   pursuant  to
          subparagraph  (b)(i) of this  Section 4 shall  cease,  subject  to the
          provisions of the last sentence of subparagraph (b)(i) of this Section
          4.

          (c) Holders of AMPS to Vote on Certain Other Matters.

               (i) Increases in Capitalization and Charter  Amendments.  So long
          as  any  AMPS  are  outstanding,  the  Fund  shall  not,  without  the
          affirmative  vote or consent of the  Holders of at least a majority of
          the AMPS  outstanding  at the time,  in person or by proxy,  either in
          writing or at a meeting,  voting as a separate  class:  (a) authorize,
          create or issue any class or series of shares ranking prior to or on a
          parity with the AMPS with  respect to the payment of  dividends or the
          distribution of assets upon dissolution,  liquidation or winding up of
          the  affairs of the Fund,  or  authorize,  create or issue  additional
          shares  of any  series  of  AMPS  (except  that,  notwithstanding  the
          foregoing,  but  subject  to the  provisions  of  paragraph  (c)(i) of
          Section 9 of this Part I, the Board of Directors,  without the vote or
          consent of the Holders of AMPS,  may from time to time  authorize  and
          create, and the Fund may from time to time issue, additional shares of
          any  series of AMPS or  classes  or series  of other  Preferred  Stock
          ranking on a parity with AMPS with respect to the payment of dividends
          and the  distribution  of  assets  upon  dissolution,  liquidation  or
          winding up of the  affairs of the Fund,  if the Fund  obtains  written
          confirmation  from the Rating Agencies that the issuance of a class or
          series would not impair the rating then assigned by such rating agency
          to the AMPS and the Fund  continues  to comply with  Section 13 of the
          1940  Act,  the  1940  Act  Preferred  Share  Asset  Coverage  and the
          Preferred Stock Basic Maintenance Amount requirements);  or (b) amend,
          alter or repeal the provisions of the Charter including these terms of
          the AMPS,  whether by merger,  consolidation  or  otherwise,  so as to
          adversely  affect any  preference,  right or power of such AMPS or the
          Holders  thereof;  provided,  however,  that (i)  none of the  actions
          permitted by the  exception to (a) above will be deemed to affect such
          preferences,  rights or powers, (ii) a division of AMPS will be deemed
          to affect such preferences, rights or powers only if the terms of such
          division   adversely   affect  the  Holders  of  AMPS  and  (iii)  the
          authorization,  creation  and  issuance of classes or series of shares
          ranking  junior to the AMPS with  respect to the payment of  dividends
          and the  distribution  of  assets  upon  dissolution,  liquidation  or
          winding up of the  affairs of the Fund,  will be deemed to affect such
          preferences,  rights or powers  only if Moody's or S&P is then  rating
          the AMPS and such issuance would, at the time thereof,  cause the Fund
          not to satisfy  the 1940 Act  Preferred  Share  Asset  Coverage or the
          Preferred Stock Basic Maintenance Amount. So long as any shares of the
          AMPS are outstanding, the Fund shall not, without the affirmative vote
          or consent of the Holders of at least 66 2/3% of the AMPS  outstanding
          at the time, in person or by proxy, either in writing or at a meeting,
          voting as a separate  class,  file a voluntary  application for relief
          under Federal  bankruptcy law or any similar  application  under state
          law for so long as the Fund is solvent and does not  foresee  becoming
          insolvent.  If any action set forth above would  adversely  affect the
          rights of one or more  series  (the  "Affected  Series")  of AMPS in a
          manner  different  from any other  series  of AMPS,  the Fund will not
          approve any such action without the affirmative vote or consent of the
          Holders  of at least a majority  of the  shares of each such  Affected
          Series  outstanding  at the time,  in  person  or by proxy,  either in
          writing  or at a  meeting  (each  such  Affected  Series  voting  as a
          separate class).


               (ii) 1940 Act and Other  Matters.  Unless a higher  percentage is
          provided for in the Charter,  (A) the affirmative  vote of the Holders
          of at least a majority of the AMPS outstanding at the time,  voting as
          a separate  class,  shall be required to approve any conversion of the
          Fund from a closed-end to an open-end  investment  company and (B) the
          affirmative  vote of the  Holders of a  "majority  of the  outstanding
          AMPS,"  voting as a separate  class,  shall be required to approve any
          plan  of  reorganization  (as  such  term is  used  in the  1940  Act)
          adversely  affecting such shares.  The affirmative vote of the Holders
          of a "majority of the  outstanding  AMPS," voting as a separate class,
          shall be  required to approve  any action not  described  in the first
          sentence of this Section 4(c)(ii) requiring a vote of security holders
          of the Fund under  section 13(a) of the 1940 Act. For purposes of this
          subparagraph (c)(ii), "majority of the outstanding AMPS" means (i) 67%
          or more of such  shares  present at a meeting,  if the Holders of more
          than 50% of such shares are present or represented  by proxy,  or (ii)
          more than 50% of such shares,  whichever is less.  In the event a vote
          of Holders of AMPS is required  pursuant to the  provisions of section
          13(a) of the 1940 Act,  the Fund  shall,  not later than ten  Business
          Days prior to the date on which  such vote is to be taken,  notify the
          Rating  Agencies  that such vote is to be taken and the  nature of the
          action with respect to which such vote is to be taken. The Fund shall,
          not later than ten Business  Days after the date on which such vote is
          taken, notify the Rating Agencies of the results of such vote.

          (d) Facts Ascertainable Outside Charter. The rights of the AMPS or the
     Holders thereof,  including,  without  limitation,  the  interpretation  or
     applicability  of any or all  covenants  or other  obligations  of the Fund
     contained  herein or of the definitions of the terms listed below, all such
     covenants,  obligations  and  definitions  having been adopted  pursuant to
     Rating  Agency  Guidelines,  may from time to time be modified,  altered or
     repealed  by the  Board of  Directors  in its sole  discretion,  based on a
     determination  by the Board of  Directors  that such action is necessary or
     appropriate in connection  with obtaining or maintaining  the rating of any
     Rating  Agency with respect to the AMPS or revising  the Fund's  investment
     restrictions  or policies  consistent with guidelines of any Rating Agency,
     and any such  modification,  alteration  or  repeal  will not be  deemed to
     affect the  preferences,  rights or powers of AMPS or the Holders  thereof,
     provided that the Board of Directors  receives  written  confirmation  from
     each  relevant  Rating  Agency  (with such  confirmation  in no event being
     required to be obtained  from a  particular  Rating  Agency with respect to
     definitions or other provisions  relevant only to and adopted in connection
     with  another   Rating   Agency's   rating  of  the  AMPS)  that  any  such
     modification,  alteration or repeal would not  adversely  affect the rating
     then assigned by such Rating Agency.






1940 Act Cure Date
1940 Act Preferred Share Asset Coverage
Annual Valuation Date
Applicable Percentage
Auditor's Confirmation
Closing Transaction
Deposit Securities
Discount Factor
Discounted Value
Eligible Asset
Exposure Period
Failure to Deposit
S&P Discount Factor
S&P Eligible Asset
S&P Hedging Transaction
S&P Loan Category
S&P Industry Classification
Forward Commitment
Independent Accountant
Market Value
Maximum Applicable Rate
Moody's Discount Factor
Moody's Eligible Asset
Moody's Hedging Transaction
Moody's Industry Classification
Outstanding
Preferred Stock Basic Maintenance Amount
Preferred Stock Basic Maintenance Cure Date
Preferred Stock Basic Maintenance Report
Pricing Service
Receivables for Municipal Obligations Sold
Reference Rate
Swap
Valuation Date

          (e) Rights Set Forth  Herein Are Sole  Rights;  No  Appraisal  Rights.
     Unless  otherwise  required by law,  the Holders of AMPS shall not have any
     relative  rights or  preferences  or other special  rights other than those
     specifically  set forth  herein.  No holder of AMPS  shall be  entitled  to
     exercise the rights of an objecting  stockholder  under Title 3, Subtitle 2
     of the Maryland General Corporation Law or any successor statute.

          (f) No  Preemptive  Rights Or Cumulative  Voting.  The Holders of AMPS
     shall have no preemptive rights or rights to cumulative voting.

          (g) Voting  For  Directors  Sole  Remedy  For  Trust's  Failure To Pay
     Dividends.  In the event  that the Fund fails to pay any  dividends  on the
     AMPS,  the  exclusive  remedy of the Holders shall be the right to vote for
     Directors pursuant to the provisions of this Section 4.

          (h) Holders  Entitled To Vote. For purposes of determining  any rights
     of the  Holders  to vote on any  matter,  whether  such right is created by
     these terms of the AMPS, by the other  provisions of the Charter by statute
     or otherwise,  no Holder shall be entitled to vote any share of AMPS and no
     share of AMPS shall be deemed to be  Outstanding  for the purpose of voting
     or  determining  the number of shares  required to  constitute a quorum if,
     prior to or concurrently  with the time of determination of shares entitled
     to vote or shares deemed  outstanding for quorum purposes,  as the case may
     be, the requisite  Notice of  Redemption  with respect to such shares shall
     have been mailed as provided in  paragraph  (c) of Section 9 of this Part I
     and the Redemption  Price for the redemption of such shares shall have been
     deposited  in trust with the Auction  Agent for that  purpose.  No share of
     AMPS held by the Fund or any  affiliate of the Fund (except for shares held
     by a Broker-Dealer  that is an affiliate of the Fund for the account of its
     customers)  shall have any voting rights or be deemed to be outstanding for
     voting or other purposes.

          (i) Terms of Office of Certain Directors to Terminate.  Simultaneously
     with  and  at the  time  that  none  of  the  issued  shares  of  AMPS  are
     Outstanding,  the terms of office of any  Directors  elected  solely by the
     holders  of such  shares  of AMPS  shall  automatically  terminate  and the
     remaining directors shall constitute the directors of the Fund.


     5. 1940 ACT PREFERRED SHARE ASSET COVERAGE.  The Fund shall maintain, as of
the last Business Day of each month in which any AMPS are Outstanding,  the 1940
Act Preferred Share Asset Coverage.

     6. PREFERRED SHARES BASIC MAINTENANCE AMOUNT.

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

          (b) On or before 5:00 p.m.,  New York City time, on the third Business
     Day after a Valuation Date on which the Fund fails to satisfy the Preferred
     Stock Basic  Maintenance  Amount,  and on the third  Business Day after the
     Preferred Stock Basic  Maintenance Cure Date with respect to such Valuation
     Date,  the Fund shall  complete  and deliver to Moody's (if Moody's is then
     rating the  AMPS),  S&P (if S&P is then  rating  the AMPS) and the  Auction
     Agent (if either Moody's or S&P is then rating the AMPS) a Preferred  Stock
     Basic  Maintenance  Report as of the date of such failure or such Preferred
     Stock Basic Maintenance Cure Date, as the case may be, which will be deemed
     to have been delivered to the Auction Agent if the Auction Agent receives a
     copy or telecopy,  telex or other electronic  transcription  thereof and on
     the same day the Fund mails to the Auction  Agent for  delivery on the next
     Business Day the full Preferred Stock Basic  Maintenance  Report.  The Fund
     shall also deliver a Preferred  Stock Basic  Maintenance  Report to (i) the
     Auction Agent (if either  Moody's or S&P is then rating the AMPS) as of the
     last Friday of each calendar  month (or, if such day is not a Business Day,
     the  immediately  prior  Business  Day),  (ii)  Moody's (if Moody's is then
     rating  the AMPS) and S&P (if S&P is then  rating  the AMPS) as of the last
     Friday of each  calendar  month (or, if such day is not a Business Day, the
     immediately  prior  Business  Day),  in each  case on or  before  the third
     Business  Day after such day. A failure by the Fund to deliver a  Preferred
     Stock Basic Maintenance  Report pursuant to the preceding sentence shall be
     deemed  to be  delivery  of a  Preferred  Stock  Basic  Maintenance  Report
     indicating the Discounted Value for all assets of the Fund is less than the
     Preferred  Stock Basic  Maintenance  Amount,  as of the relevant  Valuation
     Date.

          (c) Within ten Business Days after the date of delivery of a Preferred
     Stock Basic  Maintenance  Report in accordance  with  paragraph (b) of this
     Section 6 relating to an Annual  Valuation  Date,  the Fund shall cause the
     Independent Accountant to confirm in writing to Moody's (if Moody's is then
     rating the  AMPS),  S&P (if S&P is then  rating  the AMPS) and the  Auction
     Agent (if either Moody's or S&P is then rating the AMPS):

               (i) the mathematical  accuracy of the  calculations  reflected in
          such  Preferred  Stock  Basic  Maintenance  Report  (and in any  other
          Preferred Stock Basic  Maintenance  Report,  randomly  selected by the
          Independent  Accountant,  that was  prepared  by the Fund  during  the
          quarter ending on such Quarterly Valuation Date),

               (ii) that, in such Preferred Stock Basic Maintenance  Report (and
          in such randomly selected  Preferred Stock Basic Maintenance  Report),
          the Fund  correctly  determined in accordance  with this Statement the
          assets  of the Fund  which  constitute  Moody's  Eligible  Assets  (if
          Moody's is then  rating the AMPS) and S&P  Eligible  Assets (if S&P is
          then rating the AMPS),

               (iii) that, in such Preferred Stock Basic Maintenance Report (and
          in such randomly selected  Preferred Stock Basic Maintenance  Report),
          the Fund determined whether the Fund had, at such Quarterly  Valuation
          Date (and at the Valuation  Date  addressed in such randomly  selected
          Report) in accordance with this Statement,  Moody's Eligible Assets of
          an aggregate  Discounted  Value at least equal to the Preferred  Stock
          Basic  Maintenance  Amount  and S&P  Eligible  Assets of an  aggregate
          Discounted   Value  at  least  equal  to  the  Preferred  Stock  Basic
          Maintenance Amount,

               (iv) with respect to the S&P ratings on portfolio  securities  of
          the Fund, the issuer name,  issue size and coupon rate, if any, listed
          in such Report, that the Independent Accountant has requested that S&P
          verify such information and the Independent  Account and shall provide
          a listing in its letter of any differences,


               (v) with respect to the Moody's  ratings on portfolio  securities
          of the Fund,  the issuer  name,  issue size and coupon  rate,  if any,
          listed in such Preferred  Stock Basic  Maintenance  Report,  that such
          information   has  been   verified  by  Moody's  (in  the  event  such
          information  is not verified by Moody's,  the  Independent  Accountant
          will  inquire  of Moody's  what such  information  is,  and  provide a
          listing in its letter of any differences) and

               (vi) with  respect to the bid or mean price (or such  alternative
          permissible  factor used in calculating  the Market Value) provided by
          the custodian of the Fund's assets to the Fund for purposes of valuing
          securities in the Fund's  portfolio,  the  Independent  Accountant has
          traced the price used in such Preferred Stock Basic Maintenance Report
          to the  bid or  mean  price  listed  in  such  Preferred  Stock  Basic
          Maintenance  Report as  provided  to the Fund and  verified  that such
          information  agrees (in the event such information does not agree, the
          Independent  Accountant  will  provide a listing in its letter of such
          differences)  (such  confirmation  is  herein  called  the  "Auditor's
          Confirmation").

          (d) Within ten Business Days after the date of delivery of a Preferred
     Stock Basic  Maintenance  Report in accordance  with  paragraph (b) of this
     Section  6  relating  to any  Valuation  Date on which  the Fund  failed to
     satisfy the Preferred Stock Basic Maintenance  Amount,  and relating to the
     Preferred Stock Basic Maintenance Cure Date with respect to such failure to
     satisfy the Preferred Stock Basic Maintenance  Amount, the Fund shall cause
     the  Independent  Auditors to provide to Moody's (if Moody's is then rating
     the AMPS),  S&P (if S&P is then rating the AMPS) and the Auction  Agent (if
     either Moody's or S&P is then rating the AMPS) an Auditors' Confirmation as
     to such Preferred Stock Basic Maintenance Report.

          (e) If any Auditor's  Confirmation delivered pursuant to paragraph (c)
     or (d) of this  Section  6 shows  that an error  was made in the  Preferred
     Stock Basic  Maintenance  Report for a particular  Valuation Date for which
     such Auditor's  Confirmation was required to be delivered,  or shows that a
     lower aggregate  Discounted Value for the aggregate of all Moody's Eligible
     Assets (if Moody's is then rating the AMPS) or S&P Eligible  Assets (if S&P
     is then rating the AMPS), as the case may be, of the Fund was determined by
     the Independent  Accountant,  the calculation or determination made by such
     Independent  Accountant  shall be final and conclusive and shall be binding
     on the Fund, and the Fund shall accordingly amend and deliver the Preferred
     Stock  Basic  Maintenance  Report to Moody's (if Moody's is then rating the
     AMPS),  S&P (if S&P is then  rating  the  AMPS) and the  Auction  Agent (if
     either Moody's or S&P is then rating the AMPS) promptly  following  receipt
     by the Fund of such Auditors' Confirmation.

          (f) On or before 5:00 p.m.,  New York City time, on the first Business
     Day after the Date of Original  Issue of any AMPS,  the Fund shall complete
     and deliver to Moody's (if Moody's is then rating the AMPS) and S&P (if S&P
     is then rating the AMPS) a Preferred Stock Basic  Maintenance  Report as of
     the close of business on such Date of Original Issue.  Within five Business
     Days of such Date of Original  Issue,  the Fund shall cause the Independent
     Accountant to confirm in writing to the Auction Agent (if either Moody's or
     S&P is then rating the AMPS),  Moody's (if Moody's is then rating the AMPS)
     and S&P (if S&P is then rating the AMPS) (i) the  mathematical  accuracy of
     the  calculations  reflected  in such  Report and (ii) that the  Discounted
     Value of the respective Eligible Assets reflected thereon equals or exceeds
     the Preferred Stock Basic Maintenance Amount reflected thereon.

          (g) On or before 5:00 p.m.,  New York City time, on the third Business
     Day after either (i) the Fund shall have redeemed  Common Stock or (ii) the
     ratio  of the  Discounted  Value  of  Moody's  Eligible  Assets  or the S&P
     Eligible  Assets to the Preferred  Stock Basic  Maintenance  Amount is less
     than or equal to 105%, or (iii)  whenever  requested by Moody's or S&P, the
     Fund shall  complete  and deliver to Moody's (if Moody's is then rating the
     AMPS)  or S&P (if S&P is then  rating  the  AMPS),  as the  case  may be, a
     Preferred Stock Basic Maintenance Report as of the date of such event.

     7. RESTRICTIONS ON DIVIDENDS AND OTHER DISTRIBUTIONS.

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


          (b)  Dividends  and Other  Distributions  with Respect to Common Stock
     Under the 1940 Act.  The Fund  shall not  declare  any  dividend  (except a
     dividend payable in Common Stock), or declare any other distribution,  upon
     the Common Stock, or purchase  Common Stock,  unless in every such case the
     AMPS  have,  at the  time of any such  declaration  or  purchase,  an asset
     coverage  (as  defined in and  determined  pursuant  to the 1940 Act) of at
     least 200% (or such other asset  coverage as may in the future be specified
     in or  under  the  1940  Act as  the  minimum  asset  coverage  for  senior
     securities which are shares or stock of a closed-end  investment company as
     a condition  of declaring  dividends  on its common  shares or stock) after
     deducting the amount of such dividend,  distribution  or purchase price, as
     the case may be.

          (c) Other  Restrictions on Dividends and Other  Distributions.  For so
     long as any AMPS are outstanding,  and except as set forth in paragraph (a)
     of this Section 7 and paragraph (c) of Section 9 of this Part I,

               (A) the Fund shall not declare,  pay or set apart for payment any
          dividend or other distribution  (other than a dividend or distribution
          paid in shares of, or in options,  warrants or rights to subscribe for
          or purchase,  Common Stock or other shares,  if any, ranking junior to
          the AMPS as to the payment of dividends and the distribution of assets
          upon dissolution,  liquidation or winding up) in respect of the Common
          Stock or any other shares of the Fund ranking junior to or on a parity
          with the AMPS as to the payment of  dividends or the  distribution  of
          assets  upon  dissolution,  liquidation  or  winding  up,  or call for
          redemption,  redeem,  purchase or otherwise  acquire for consideration
          any Common Stock or any other such junior shares (except by conversion
          into or exchange for shares of the Fund ranking  junior to the AMPS as
          to the  payment  of  dividends  and the  distribution  of assets  upon
          dissolution,  liquidation  or winding  up), or any such parity  shares
          (except by conversion  into or exchange for shares of the Fund ranking
          junior to or on a parity with AMPS as to the payment of dividends  and
          the  distribution of assets upon  dissolution,  liquidation or winding
          up), unless (i) full cumulative  dividends on shares of each series of
          AMPS through its most recently ended  Dividend  Period shall have been
          paid or shall have been declared and sufficient  funds for the payment
          thereof  deposited  with  the  Auction  Agent  and  (ii)  the Fund has
          redeemed  the full  number  of AMPS  required  to be  redeemed  by any
          provision for mandatory redemption pertaining thereto, and

               (B) the Fund shall not declare,  pay or set apart for payment any
          dividend or other distribution  (other than a dividend or distribution
          paid in shares of, or in options,  warrants or rights to subscribe for
          or purchase,  Common Stock or other shares,  if any, ranking junior to
          AMPS as to the payment of  dividends  and the  distribution  of assets
          upon  dissolution,  liquidation  or  winding  up) in respect of Common
          Stock or any other shares of the Fund ranking junior to AMPS as to the
          payment of dividends or the  distribution of assets upon  dissolution,
          liquidation or winding up, or call for redemption, redeem, purchase or
          otherwise acquire for consideration any Common Stock or any other such
          junior shares (except by conversion into or exchange for shares of the
          Fund  ranking  junior to AMPS as to the payment of  dividends  and the
          distribution of assets upon  dissolution,  liquidation or winding up),
          unless  immediately  after such  transaction  the Discounted  Value of
          Moody's  Eligible  Assets (if Moody's is then rating the AMPS) and S&P
          Eligible  Assets (if S&P is then rating the AMPS) would at least equal
          the Preferred Stock Basic Maintenance Amount.

     8. RATING AGENCY RESTRICTIONS.

          (a) Moody's Restrictions.  For so long as any shares of AMPS are rated
     by Moody's, the Fund may buy or sell option contracts or write call options
     on portfolio securities,  swaps and securities lending, however if the Fund
     intends to buy or sell financial futures contracts, write, purchase or sell
     call  options on  financial  futures  contracts  or purchase put options on
     financial  futures  contracts,  it must receive written  confirmation  from
     Moody's to engage in such  transactions  as they could  impair the  ratings
     then  assigned  to the shares of AMPS by  Moody's,  (collectively  "Moody's
     Hedging Transactions"), subject to the following limitations:


               (i) Future And Call Options:  For purposes of the Preferred Stock
          Basic  Maintenance  Amount,  futures held by the Fund and call options
          sold by the Fund shall not be  included  as Moody's  Eligible  Assets.
          Likewise, assets held in segregated accounts, including assets used to
          cover good faith margin deposits and maximum daily variation payments,
          in connection  with such futures and any uncovered  call options shall
          not be included as Moody's Eligible Assets. For call options purchased
          by the Fund,  the Market Value of the call options will be included as
          Moody's  Eligible Asset subject to a Moody's  Discount Factor mutually
          agreed to between the Fund and Moody's.

               (ii)  Securities  Lending:  The Fund  may  engage  in  securities
          lending  in an amount  not to exceed  10% of the  Fund's  total  gross
          assets or such other percentage as the Fund and Moody's may agree. For
          purposes of calculating the Preferred Stock Basic Maintenance  Amount,
          such securities lent shall be included as Moody's Eligible Assets with
          the  appropriate  Moody's  Discount  Factor  applied to each such lent
          security.  The  obligation  to  return  such  collateral  shall not be
          included as an  obligation/liability  for purposes of calculating  the
          Preferred  Stock  Basic  Maintenance  Amount.  Moreover,  the Fund may
          reinvest cash  collateral for securities  lent in conformity  with its
          investment  objectives  and policies and the provisions of these terms
          of the AMPS in  securities  that  otherwise  would  qualify as Moody's
          Eligible Assets.  As collateral for securities lent, the Fund also may
          receive  securities that otherwise  would qualify as Moody's  Eligible
          Assets.  In either  such  event,  to the  extent  that the  securities
          lending collateral  constitutes  Moody's Eligible Assets, if the value
          of such collateral exceeds,  whether due to appreciation or otherwise,
          the value of the  securities  lent,  in each case after  applying  the
          appropriate  Moody's Discount Factor, such excess shall be included as
          a Moody's Eligible Asset. Conversely,  if the discounted value of such
          securities lending collateral is less than the discounted value of the
          securities   lent,   such   difference   shall  be   included   as  an
          obligation/liability  of the  Fund for  purposes  of  calculating  the
          Preferred Stock Basic Maintenance Amount.

     If not otherwise provided for in (a)(i)-(ii) above,  derivative instruments
     shall be treated as  follows:  Any  derivative  instruments  will be valued
     pursuant to the Valuation Procedures on a Valuation Date. The amount of the
     net  payment  obligation  and  the  cost  of  a  closing  transaction,   as
     appropriate,  on any  derivative  instrument  on a  Valuation  Date will be
     counted as a liability  for purposes of  determining  the  Preferred  Stock
     Basic Maintenance  Amount. Any derivative  instrument with respect to which
     the Fund is owed  payment on the  Valuation  Date that is not based upon an
     individual  security or securities  that are Moody's  Eligible  Assets will
     either have a mutually  agreed upon  valuation  by Moody's and the Fund for
     purposes of determining  Moody's  Eligible  Assets or will be excluded from
     Moody's  Eligible Assets.  Any derivative  instrument with respect to which
     the Fund is owed  payment  on the  Valuation  Date  that is  based  upon an
     individual security or securities that are Moody's Eligible Assets (e.g., a
     purchased  call  option on a bond that is  in-the-money)  will be valued as
     follows for purposes of determining  Moody's Eligible Assets:  (A) For such
     derivative   instruments  that  are  exchange  traded,  the  value  of  the
     in-the-money  amount of the payment  obligation to the Fund will be reduced
     by  applying  the  Moody's  Discount  Factor  (as  it  would  apply  to the
     underlying  security  or  securities)  and then added to  Moody's  Eligible
     Assets;  and (B) for such  derivative  instruments  that  are not  exchange
     traded,  the value of the in-the-money  amount of the payment obligation to
     the Fund will be (1) reduced as described in (A) and (2) further reduced by
     applying to the remaining amount the Moody's Discount Factor  determined by
     reference to the credit  rating of the  derivative  counterparty,  with the
     remaining  amount  after these  reductions  then added to Moody's  Eligible
     Assets.

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

               (iii) Exchange Traded Future, Etc. If the Fund purchases or sells
          any  exchange-traded  futures,  option or option on  futures  contract
          based on an index approved by Moody's,  it is subject to the following
          limitations  (transactions that are terminating contracts already held
          by the Fund are exempt):

               For  financial  futures  contracts  based on an index  the  total
               number  of  contracts  purchased  should  not  exceed  10% of the
               average open  interest for the 30 days  preceding the purchase of
               such  transaction as reported by The Wall Street Journal or other
               respectable news source approved by Moody's;

               Financial futures contracts based on an index approved by Moody's
               are  limited  to 80% of  Moody's  Eligible  Assets  or 50% of the
               Fund's holdings, whichever is greater; and


               Financial  futures  contracts based on an index should be limited
               to clearinghouses  that are rated no lower than A by Moody's (or,
               if not rated by Moody's but rated by S&P or Fitch, rated A by S&P
               or Fitch).

     The Fund  may  engage  in  financial  futures  contracts  to close  out any
     outstanding  financial  futures  contract  based on any index  approved  by
     Moody's,  if the  average  open  interest  for  the 30 days  preceding  the
     transaction as reported by The Wall Street Journal or any other respectable
     news source  approved by Moody's is equal to or greater  than the amount to
     be closed as determined by Moody's and the Fund.

     The Fund will engage in a Closing Transaction  (defined below) to close out
     any  outstanding  financial  futures  contract  by no later  than the fifth
     Business Day of the month in which such contract expires and will engage in
     a Closing  Transaction to close out any  outstanding  option on a financial
     futures  contract by no later than the first  Business  Day of the month in
     which such option expires;

     The Fund will engage in Moody's Hedging  Transactions  only with respect to
     financial  futures  contracts or options thereon having the next settlement
     date or the settlement date immediately thereafter;

     The Fund will not:

                    (A)  Engage  in  options   and  futures   transactions   for
               leveraging or speculative purposes;

                    (B) Write  any call  option  or sell any  financial  futures
               contracts for the purpose of hedging an  anticipated  purchase of
               an asset;

                    (C)  Enter  into an  option or  futures  transaction  unless
               Moody's has been notified of the Fund's intentions.  In addition,
               the Fund must  present to Moody's  that it will  continue to have
               Moody's Eligible Assets with an aggregate  Discounted Value equal
               to or greater than the Preferred Stock Basic Maintenance Amount.

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

                    (A) The call option written by the Fund must be either
         exchange-traded and "readily reversible" or expires within 49 days
         after the date of valuation and should be valued at the lesser of:

                         (i) The Discounted Value, or

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

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

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

                         (i) The exercise price of the put option, or

                         (ii) The Discounted Value of the subject security; and

                    (D) Where  delivery of a security or class of securities may
               be made to the Fund,  it shall take  delivery of the  security or
               class of securities with the lowest Discounted Value.

               (iv) Adjustments for Options and Futures Contracts.  For purposes
          of determining  whether the Fund has Moody's  Eligible  Assets with an
          aggregate  Discounted Value that equals or exceeds the Preferred Stock
          Basic  Maintenance  Amount,  the following amounts shall be subtracted
          from the aggregate  Discounted  Value of the Moody's  Eligible  Assets
          held by the Fund:

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

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

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

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


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

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

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

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

          (b)  Other  Restrictions.  For so long as  shares of AMPS are rated by
     either  Moody's or S&P, the Fund will not,  unless it has received  written
     confirmation  from  Moody's or S&P,  as the case may be,  that such  action
     would not impair the ratings then  assigned to shares of AMPS by Moody's or
     S&P, as the case may be:

               (i) borrow money except for the purpose of clearing  transactions
          in   portfolio   securities   (which   borrowings   shall   under  any
          circumstances  be limited to the lesser of $10  million  and an amount
          equal to 5% of the Market  Value of the  Fund's  assets at the time of
          such  borrowings and which  borrowings  shall be repaid within 60 days
          and not be  extended  or  renewed  and shall  not cause the  aggregate
          Discounted  Value  of  Moody's  Eligible  Assets  to be less  than the
          Preferred Stock Basic Maintenance Amount),

               (ii) engage in short sales of securities;

               (iii) issue any class or series of stock ranking prior to or on a
          parity with the AMPS with  respect to the payment of  dividends or the
          distribution of assets upon dissolution,  liquidation or winding up of
          the Fund;

               (iv)  reissue any AMPS  previously  purchased  or redeemed by the
          Fund;

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

               (vi) change the Pricing Service; or

               (vii) engage in reverse repurchase agreements.

     9. REDEMPTION.

          (a) Optional Redemption.

               (i) To the extent  permitted under the 1940 Act and Maryland law,
          the Fund at its option  may,  without  the  consent of the  Holders of
          AMPS,  redeem  AMPS having a Dividend  Period of one year or less,  in
          whole or in  part,  on the  business  day  after  the last day of such
          Dividend Period upon not less than fifteen calendar days' and not more
          than forty calendar days' prior notice. The optional  redemption price
          per share will be the Liquidation Preference per share, plus an amount
          equal to  accumulated  but unpaid  Dividends  thereon  (whether or not
          earned or  declared) to the date fixed for  redemption.  AMPS having a
          Dividend  Period of more than one year are redeemable at the option of
          the  Fund,  in  whole or in  part,  prior  to the end of the  relevant
          Dividend Period,  subject to any specific redemption provision,  which
          may include the payment of redemption  premiums to the extent required
          under any applicable specific redemption provisions. The Fund will not
          make any optional  redemption unless,  after giving effect thereto (i)
          the Fund has available  certain Deposit  Securities with maturities or
          tender  dates  not  later  than  the  day  preceding  the   applicable
          Redemption Date and having a value not less than the amount (including
          any  applicable  premium) due to holders of the AMPS by reasons of the
          redemption of the AMPS on such date fixed for the  redemption and (ii)
          the Fund has  eligible  assets with an aggregate  discounted  value at
          least  equal  to  the  Preferred  Stock  Basic   Maintenance   Amount.
          Notwithstanding the foregoing,  AMPS may not be redeemed at the option
          of the Fund unless all dividends in arrears on the  outstanding  AMPS,
          and all other shares of outstanding  Preferred  Stock have been or are
          being  contemporaneously  paid or set aside for  payment.  A Notice of
          Special  Dividend  Period  relating  to a Special  Dividend  Period of
          shares of a series of AMPS,  as  delivered  to the  Auction  Agent and
          filed with the Secretary of the Fund,  may provide that shares of such
          series  shall not be  redeemable  during the whole or any part of such
          Special Dividend Period or shall be redeemable during the whole or any
          part of  such  Special  Dividend  Period  only  upon  payment  of such
          redemption premium or premiums as shall be specified therein ("Special
          Redemption Provisions").


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

               (iii) The Fund may not on any date  mail a Notice  of  Redemption
          pursuant to paragraph (c) of this Section 9 in respect of a redemption
          contemplated  to be effected  pursuant to this paragraph (a) unless on
          such date (A) the Fund has available Deposit  Securities with maturity
          or tender  dates  not  later  than the day  preceding  the  applicable
          redemption date and having a value not less than the amount (including
          any  applicable  premium)  due to  Holders  of AMPS by  reason  of the
          redemption  of  such  shares  on  such  redemption  date,  and (B) the
          Discounted Value of Moody's Eligible Assets (if Moody's is then rating
          the AMPS) and S&P  Eligible  Assets  (if S&P is then  rating the AMPS)
          each at least equals the Preferred Stock Basic Maintenance Amount, and
          would at least  equal the  Preferred  Stock Basic  Maintenance  Amount
          immediately  subsequent to such  redemption if such redemption were to
          occur on such date.  For purposes of  determining in clause (B) of the
          preceding  sentence  whether the Discounted  Value of Moody's Eligible
          Assets at least equals the Preferred Stock Basic  Maintenance  Amount,
          the Moody's  Discount  Factors  applicable to Moody's  Eligible Assets
          shall be determined by reference to the first  Exposure  Period longer
          than the Exposure  Period then applicable to the Fund, as described in
          the definition of Moody's Discount Factor herein.

          (b) Mandatory Redemption. The Fund shall redeem, at a redemption price
     equal to $100,000 per share plus accumulated but unpaid  dividends  thereon
     (whether or not earned or declared) to (but not  including)  the date fixed
     by the Board of Directors for redemption,  certain of the AMPS, if the Fund
     fails to have either Moody's  Eligible Assets or S&P Eligible Assets with a
     Discounted  Value  greater  than or  equal  to the  Preferred  Stock  Basic
     Maintenance  Amount or fails to maintain the 1940 Act Preferred Share Asset
     Coverage,  in accordance with the  requirements of the Rating Agencies then
     rating the AMPS,  and such failure is not cured on or before the  Preferred
     Stock Basic  Maintenance  Cure Date or the 1940 Act Cure Date,  as the case
     may be. The number of AMPS to be  redeemed  shall be equal to the lesser of
     (i) the minimum  number of AMPS,  together with all other  Preferred  Stock
     subject to redemption or retirement,  the redemption of which, if deemed to
     have  occurred  immediately  prior to the  opening of  business on the Cure
     Date,  would have resulted in the Fund's having Moody's Eligible Assets and
     S&P Eligible  Assets with a Discounted  Value  greater than or equal to the
     Preferred  Stock  Basic  Maintenance  Amount  or  maintaining  the 1940 Act
     Preferred  Stock  Asset  Coverage,  as the case may be,  on such  Cure Date
     (provided,  however,  that if there is no such  minimum  number of AMPS and
     other  Preferred Stock the redemption or retirement of which would have had
     such result,  all AMPS and other Preferred Stock then outstanding  shall be
     redeemed),  and (ii) the maximum  number of AMPS,  together  with all other
     Preferred  Stock subject to redemption or retirement,  that can be redeemed
     out of funds otherwise  legally  available  therefor in accordance with the
     Charter and applicable law. In determining the AMPS required to be redeemed
     in  accordance  with the  foregoing,  the Fund  shall  allocate  the number
     required to be redeemed to satisfy the  Preferred  Stock Basic  Maintenance
     Amount or the 1940 Act Preferred Share Asset Coverage,  as the case may be,
     pro rata among AMPS and other  Preferred  Stock (and,  then, pro rata among
     each series of AMPS) subject to redemption  or  retirement.  The Fund shall
     effect such  redemption on the date fixed by the Fund therefor,  which date
     shall not be earlier  than twenty days nor later than forty days after such
     Cure Date,  except that if the Fund does not have funds  legally  available
     for the  redemption  of all of the  required  number  of the AMPS and other
     Preferred  Stock which are subject to  redemption or retirement or the Fund
     otherwise  is unable to effect  such  redemption  on or prior to forty days
     after such Cure Date, the Fund shall redeem those AMPS and other  Preferred
     Stock  which it was unable to redeem on the  earliest  practicable  date on
     which  it is able to  effect  such  redemption.  If  fewer  than all of the
     outstanding  shares of a series of AMPS are to be redeemed pursuant to this
     paragraph  (b), the shares of such series to be redeemed  shall be selected
     by lot or such other method that the Fund deems fair and equitable.


          (c) Notice of  Redemption.  If the Fund  determines  or is required to
     redeem  shares of a series of AMPS pursuant to paragraph (a) or (b) of this
     Section  9, it shall  mail a Notice  of  Redemption  with  respect  to such
     redemption by  first-class  mail,  postage  prepaid,  to each Holder of the
     shares of such series to be redeemed,  at such Holder's address as the same
     appears on the Share Books on the record date  established  by the Board of
     Directors and to the Auction Agent.  Such Notice of Redemption  shall be so
     mailed  not less than  fifteen  nor more than  forty days prior to the date
     fixed for redemption.  Each such Notice of Redemption  shall state: (i) the
     redemption  date;  (ii) the  number of AMPS to be  redeemed  and the series
     thereof;  (iii) the  CUSIP  number  for  shares  of such  series;  (iv) the
     Redemption Price; (v) the place or places where the certificate(s) for such
     shares  (properly  endorsed  or  assigned  for  transfer,  if the  Board of
     Directors shall so require and the Notice of Redemption shall so state) are
     to be surrendered for payment of the Redemption  Price; (vi) that dividends
     on the shares to be redeemed will cease to  accumulate  on such  redemption
     date;  (vii)  that the  Holders  of any shares of a series of AMPS being so
     redeemed  shall  not  participate  in  the  Auction,  if  any,  immediately
     preceding the redemption  date; and (viii) the provisions of this Section 9
     under which such  redemption  is made. If fewer than all shares of a series
     of AMPS held by any Holder  are to be  redeemed,  the Notice of  Redemption
     mailed to such  Holder  shall  also  specify  the  number of shares of such
     series to be redeemed from such Holder.  The Fund may provide in any Notice
     of Redemption relating to a redemption contemplated to be effected pursuant
     to paragraph  (a) of this Section 9 that such  redemption is subject to one
     or more  conditions  precedent  and that the Fund shall not be  required to
     effect such redemption unless each such condition shall have been satisfied
     at the  time  or  times  and in the  manner  specified  in such  Notice  of
     Redemption.

          (d) No Redemption  Under Certain  Circumstances.  Notwithstanding  the
     provisions of paragraphs  (a) or (b) of this Section 9, if any dividends on
     shares of a series of AMPS  (whether  or not  earned  or  declared)  are in
     arrears,  no shares of such series shall be redeemed unless all outstanding
     shares of such Series are simultaneously  redeemed,  and the Fund shall not
     purchase or otherwise acquire any shares of such series; provided, however,
     that the  foregoing  shall not prevent the purchase or  acquisition  of all
     outstanding shares of such series pursuant to the successful  completion of
     an otherwise  lawful  purchase or exchange offer made on the same terms to,
     and accepted by, Holders of all outstanding shares of such series.

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

          (f) Auction  Agent as Trustee of  Redemption  Payments  by Trust.  All
     moneys paid to the Auction  Agent for  payment of the  Redemption  Price of
     AMPS called for redemption  shall be held in trust by the Auction Agent for
     the benefit of Holders of shares so to be redeemed.

          (g) Shares for Which Notice of Redemption Has Been Given Are no Longer
     Outstanding.  Provided a Notice of Redemption  has been mailed  pursuant to
     paragraph  (c) of this Section 9, upon the deposit  with the Auction  Agent
     (on the Business Day next preceding the date fixed for redemption  thereby,
     in funds  available on the next  Business Day in The City of New York,  New
     York) of funds  sufficient  to redeem the AMPS that are the subject of such
     notice,  dividends on such shares shall cease to accumulate and such shares
     shall no longer be deemed to be outstanding for any purpose, and all rights
     of the  Holders  of the  shares so called for  redemption  shall  cease and
     terminate,  except  the right of such  Holders to  receive  the  Redemption
     Price,  but without  any  interest or other  additional  amount,  except as
     provided  in  subparagraph  (e)(i) of Section 2 of this Part I. The Auction
     Agent  shall pay the  Redemption  Price to the  Holders of AMPS  subject to
     redemption  upon  surrender of the  certificates  for the shares  (properly
     endorsed or  assigned  for  transfer,  if the Board of  Directors  shall so
     require  and the Notice of  Redemption  shall so state) to be  redeemed  in
     accordance  with the Notice of Redemption.  In the case that fewer than all
     of the shares  represented  by any such  certificate  are  redeemed,  a new
     certificate shall be issued,  representing the unredeemed  shares,  without
     cost to the Holder thereof.  The Fund shall be entitled to receive from the
     Auction  Agent,  promptly  after the date  fixed for  redemption,  any cash
     deposited with the Auction Agent in excess of (i) the aggregate  Redemption
     Price of the AMPS  called  for  redemption  on such date and (ii) all other
     amounts to which Holders of AMPS called for redemption may be entitled. Any
     funds so deposited  that are  unclaimed at the end of ninety days from such
     redemption  date shall,  to the extent  permitted  by law, be repaid to the
     Fund,  after  which time the Holders of AMPS so called for  redemption  may
     look only to the Fund for  payment  of the  Redemption  Price and all other
     amounts to which they may be entitled.


          (h)  Compliance  with  Applicable  Law. In  effecting  any  redemption
     pursuant to this Section 9, the Fund shall effect no  redemption  except in
     accordance with the 1940 Act and any applicable Maryland law.

          (i) Only Whole  AMPS May be  Redeemed.  In the case of any  redemption
     pursuant to this Section 9, only whole AMPS shall be  redeemed,  and in the
     event that any  provision  of the Charter  would  require  redemption  of a
     fractional share, the Auction Agent shall be authorized to round up so that
     only whole shares are redeemed.

          (j) Modification of Redemption Procedures.  Notwithstanding any of the
     foregoing  provisions  of this Section 9, the Fund may modify any or all of
     the requirements  relating to the Notice of Redemption  without the consent
     of the Holders of the AMPS or holders of Common  Stock,  provided  that (i)
     any such  modification  does not materially and adversely affect any Holder
     of the relevant  series of AMPS, and (ii) the Fund receives  written notice
     from  Moody's  (if Moody's is then rating the AMPS) and S&P (if S&P is then
     rating  the AMPS)  that such  modification  would not  impair  the  ratings
     assigned by Moody's and S&P to shares of AMPS.

     10. LIQUIDATION RIGHTS.

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

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

          (c) Pro  Rata  Distributions.  In the  event  the  assets  of the Fund
     available  for  distribution  to the Holders of AMPS upon any  dissolution,
     liquidation, or winding up of the affairs of the Fund, whether voluntary or
     involuntary, shall be insufficient to pay in full all amounts to which such
     Holders are entitled  pursuant to paragraph (b) of this Section 10, no such
     distribution  shall be made on account of any shares of any other  class or
     series of Preferred Stock ranking on a parity with the AMPS with respect to
     the distribution of assets upon such dissolution, liquidation or winding up
     unless  proportionate  distributive amounts shall be paid on account of the
     AMPS,  ratably,  in proportion to the full distributable  amounts for which
     holders of all such  parity  shares  are  respectively  entitled  upon such
     dissolution, liquidation or winding up.

          (d) Rights of Junior  Shares.  Subject to the rights of the holders of
     shares of any series or class or classes of shares ranking on a parity with
     the AMPS with  respect  to the  distribution  of assets  upon  dissolution,
     liquidation  or winding up of the affairs of the Fund,  after payment shall
     have been made in full to the Holders of the AMPS as provided in  paragraph
     (b) of this Section 10, but not prior thereto, any other series or class or
     classes  of  shares  ranking  junior  to  the  AMPS  with  respect  to  the
     distribution of assets upon  dissolution,  liquidation or winding up of the
     affairs of the Fund shall,  subject to the respective  terms and provisions
     (if any)  applying  thereto,  be  entitled  to  receive  any and all assets
     remaining to be paid or distributed,  and the Holders of the AMPS shall not
     be entitled to share therein.

          (e) Certain Events Not Constituting  Liquidation.  Neither the sale of
     all or  substantially  all the  property or  business of the Fund,  nor the
     merger  or  consolidation  of the Fund into or with any  business  trust or
     corporation  nor the  merger  or  consolidation  of any  business  trust or
     corporation  into or with the Fund shall be a  dissolution,  liquidation or
     winding up,  whether  voluntary  or  involuntary,  for the purposes of this
     Section 10.


          (f)  Liquidation   Preference   Opt-Out.   In  determining  whether  a
     distribution  (other than upon  voluntary or  involuntary  dissolution)  by
     dividend, redemption or other acquisition of shares of stock of the Fund or
     otherwise is permitted under the Maryland General  Corporation Law, amounts
     that would be needed,  if the Fund were to be  dissolved at the time of the
     distribution,  to satisfy the  preferential  rights upon dissolution of the
     Holders of the AMPS will not be added to the Fund's total liabilities.

     11. MISCELLANEOUS.

          (a) Modification of Terms. Subject to the provisions of these terms of
     the AMPS, the Board of Directors may, without stockholder  approval (except
     as otherwise  provided by these terms of the AMPS or required by applicable
     law), modify these terms of the AMPS to reflect any change hereto which the
     Board of Directors is entitled to adopt  pursuant to the terms of Section 4
     hereof, this Section 11 or otherwise without stockholder approval.

          (b) No  Fractional  Shares.  No  fractional  shares  of AMPS  shall be
     issued.

          (c) Status of AMPS  Redeemed,  Exchanged or Otherwise  Acquired by the
     Fund. AMPS which are redeemed,  exchanged or otherwise acquired by the Fund
     shall return to the status of authorized  and unissued  shares of Preferred
     Stock without further designation as to class or series.

          (d)  Board  May  Resolve  Ambiguities.  To  the  extent  permitted  by
     applicable law, the Board of Directors may modify,  interpret or adjust the
     provisions  of these  terms of the AMPS to  resolve  any  inconsistency  or
     ambiguity or to remedy any formal defect,  and may amend these terms of the
     AMPS with  respect to any series of AMPS prior to the issuance of shares of
     such series.

          (e) Headings Not Determinative.  The headings contained in these terms
     of the AMPS are for  convenience of reference only and shall not affect the
     meaning or interpretation hereof.

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

          (g) Certificate for AMPS.  Except as may be otherwise  provided by the
     Board of  Directors,  and subject to Section 7 of Part II of these terms of
     the AMPS, Holders of the AMPS are not entitled to certificates representing
     the shares of stock held by them.

                                    PART II

     1. ORDERS.

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

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

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

                    (B) the number of Outstanding shares, if any, of such series
               to be  purchased  or  held  by  such  Beneficial  Owner,  if  the
               Applicable  Rate for shares of such series for the next  Dividend
               Period  is not less  than the rate  specified  in the bid,  which
               shares such Beneficial  Owner shall be deemed to offer to sell if
               the  Applicable  Rate  for  shares  of such  series  for the next
               succeeding Dividend Period of shares of such series shall be less
               than the rate  per  annum  specified  by such  Beneficial  Owner;
               and/or

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


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

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

          (b) Bidding and Selling.

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

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

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

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

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

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

                    (B) such number or a lesser number of Outstanding  shares of
               such  series  as set forth in clause  (iii) of  paragraph  (b) of
               Section 4 of this Part II if Sufficient  Clearing Bids for shares
               of  such  series  do  not  exist;   provided,   however,  that  a
               Broker-Dealer  that is an Existing  Holder with respect to shares
               of a series of AMPS shall not be liable to any Person for failing
               to sell such  shares  pursuant to a Sell Order  described  in the
               proviso to paragraph (c) of Section 2 of this Part II if (1) such
               shares were  transferred by the Beneficial  Owner thereof without
               compliance   by  such   Beneficial   Owner   or  its   transferee
               Broker-Dealer  (or other transferee  person,  if permitted by the
               Fund)  with the  provisions  of  Section 6 of this Part II or (2)
               such Broker-Dealer has informed the Auction Agent pursuant to the
               terms of its  Broker-Dealer  Agreement  that,  according  to such
               Broker-Dealer's  records,  such Broker Dealer  believes it is not
               the Existing Holder of such shares.


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

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

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

          (c) No Order for any number of AMPS other than whole  shares  shall be
     valid.

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

               (iii) if all of the Outstanding shares of such series are subject
          to  Submitted  Hold  Orders,  then the  Dividend  Period to which such
          Auction relates shall be a Minimum  Dividend Period and the Applicable
          Rate for all shares of such  series for the next  succeeding  Dividend
          Period thereof shall be 90% of the  applicable  Reference Rate on such
          Auction Date.

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

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

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

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

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


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

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

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

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

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

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

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

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


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

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

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

          (g)  None  of the  Fund,  the  Advisers,  the  Auction  Agent  nor any
     affiliate of any of them, shall have any  responsibility  or liability with
     respect  to the  failure of an  Existing  Holder,  a  Potential  Holder,  a
     Beneficial  Owner, a Potential  Beneficial  Owner or its  respective  Agent
     Member to deliver  AMPS of any series or to pay for AMPS of any series sold
     or purchased pursuant to the Auction Procedures or otherwise.

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

     6. TRANSFER OF AMPS.  Unless otherwise  permitted by the Fund, a Beneficial
Owner or an Existing Holder may sell, transfer or otherwise dispose of AMPS only
in whole shares and only pursuant to a Bid or Sell Order placed with the Auction
Agent  in  accordance  with the  procedures  described  in this  Part II or to a
Broker-Dealer; provided, however, that (a) a sale, transfer or other disposition
of AMPS from a customer of a Broker-Dealer  who is listed on the records of that
Broker-Dealer  as the  holder of such  shares to that  Broker-Dealer  or another
customer  of that  Broker-Dealer  shall not be deemed to be a sale,  transfer or
other disposition for purposes of this Section 6 if such  Broker-Dealer  remains
the  Existing  Holder  of  the  shares  so  sold,  transferred  or  disposed  of
immediately after such sale,  transfer or disposition and (b) in the case of all
transfers other than pursuant to Auctions,  the  Broker-Dealer (or other Person,
if permitted by the Fund) to whom such transfer is made shall advise the Auction
Agent of such transfer.


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

     8. FORCE MAJEURE.

          (a) Notwithstanding anything else set forth herein, if an Auction Date
     is not a Business  Day  because  the New York Stock  Exchange is closed for
     business  due to an act of God,  natural  disaster,  act of war,  civil  or
     military  disturbance,  act of  terrorism,  sabotage,  riots  or a loss  or
     malfunction of utilities or communications services or the Auction Agent is
     not able to conduct an Auction in  accordance  with the Auction  Procedures
     for any such  reason,  then the Auction Rate for the next  Dividend  Period
     shall be the Auction Rate determined on the previous Auction Date.

          (b)  Notwithstanding  anything  else set forth  herein,  if a Dividend
     Payment Date is not a Business  Day because the New York Stock  Exchange is
     closed for business  due to an act of God,  natural  disaster,  act of war,
     civil or military disturbance, act of terrorism,  sabotage, riots or a loss
     or  malfunction  of  utilities or  communications  services or the dividend
     payable on such date can not be paid for any such reason, then:

               (i) the Dividend  Payment Date for the affected  Dividend  Period
          shall be the next Business Day on which the Fund and its paying agent,
          if any,  are  able to  cause  the  dividend  to be  paid  using  their
          reasonable best efforts;

               (ii) the affected  Dividend  Period shall end on the day it would
          have ended had such event not occurred  and the Dividend  Payment Date
          had remained the scheduled date; and

               (iii) the next Dividend Period will begin and end on the dates on
          which it would have begun and ended had such  event not  occurred  and
          the Dividend Payment Date remained the scheduled date.



SECOND:  The foregoing  amendments to the Charter were declared advisable by the
Board of Directors of the Corporation and approved by the stockholders  entitled
to vote on the matter.

THIRD: The undersigned President of the Corporation  acknowledges these Articles
of Amendment to be the corporate act of the  Corporation  and, as to all matters
or  facts  required  to  be  verified  under  oath,  the  undersigned  President
acknowledges that, to the best of his knowledge,  information and belief,  these
matters and facts are true in all material  respects and that this  statement is
made under the penalties for perjury.





                            [SIGNATURE PAGE FOLLOWS]






     IN WITNESS WHEREOF,  the Corporation has caused these Articles of Amendment
to be signed in its name and on its behalf by its  President  and attested to by
its Secretary on this _____ day of April, 2006.



ATTEST:                               BOULDER TOTAL RETURN FUND, INC.





_______________________________       By:_________________________________(SEAL)

Stephanie Kelley, Secretary              Stephen C. Miller, President







                                   APPENDIX A

                              SETTLEMENT PROCEDURES

     Capitalized terms used herein shall have the respective  meanings specified
in the terms of the AMPS.

          (a) On each Auction Date,  the Auction Agent shall notify by telephone
     or through the Auction Agent's auction processing system the Broker-Dealers
     that participated in the Auction held on such Auction Date and submitted an
     Order on behalf of any Beneficial Owner or Potential Beneficial Owner of:

               (i) the Applicable  Rate fixed for the next  succeeding  Dividend
          Period;

               (ii)   whether   Sufficient   Clearing   Bids   existed  for  the
          determination of the Applicable Rate;

               (iii)  if  such   Broker-Dealer   (a  "Seller's   Broker-Dealer")
          submitted a Bid or a Sell Order on behalf of a Beneficial  Owner,  the
          number of AMPS, if any, to be sold by such Beneficial Owner;

               (iv) if such Broker-Dealer (a "Buyer's Broker-Dealer")  submitted
          a Bid on behalf of a Potential  Beneficial  Owner, the number of AMPS,
          if any, to be purchased by such Potential Beneficial Owner;

               (v) if the aggregate  number of AMPS to be sold by all Beneficial
          Owners on whose  behalf such  Broker-Dealer  submitted a Bid or a Sell
          Order  exceeds the  aggregate  number of AMPS to be  purchased  by all
          Potential   Beneficial  Owners  on  whose  behalf  such  Broker-Dealer
          submitted  a  Bid,   the  name  or  names  of  one  or  more   Buyer's
          Broker-Dealers (and the name of the Agent Member, if any, of each such
          Buyer's  Broker-Dealer)  acting  for  one or more  purchasers  of such
          excess  number of AMPS and the number of such  shares to be  purchased
          from one or more Beneficial Owners on whose behalf such  Broker-Dealer
          acted by one or more Potential  Beneficial Owners on whose behalf each
          of such Buyer's Broker-Dealers acted;

               (vi) if the  aggregate  number  of AMPS  to be  purchased  by all
          Potential   Beneficial  Owners  on  whose  behalf  such  Broker-Dealer
          submitted a Bid exceeds the aggregate number of AMPS to be sold by all
          Beneficial Owners on whose behalf such  Broker-Dealer  submitted a Bid
          or  a  Sell  Order,  the  name  or  names  of  one  or  more  Seller's
          Broker-Dealers (and the name of the Agent Member, if any, of each such
          Seller's  Broker-Dealer) acting for one or more sellers of such excess
          number of AMPS and the number of such shares to be sold to one or more
          Potential  Beneficial Owners on whose behalf such Broker-Dealer  acted
          by one or more Beneficial Owners on whose behalf each of such Seller's
          Broker-Dealers acted; and

               (vii)  the  Auction  Date of the  next  succeeding  Auction  with
          respect to the AMPS.

          (b) On each Auction Date, each  Broker-Dealer  that submitted an Order
     on behalf of any Beneficial Owner or Potential Beneficial Owner shall:

               (i)  in  the  case  of  a   Broker-Dealer   that  is  a   Buyer's
          Broker-Dealer,  instruct  each  Potential  Beneficial  Owner  on whose
          behalf such Broker-Dealer  submitted a Bid that was accepted, in whole
          or in part, to instruct such Potential Beneficial Owner's Agent Member
          to pay to  such  Broker-Dealer  (or  its  Agent  Member)  through  the
          Securities  Depository the amount  necessary to purchase the number of
          AMPS to be  purchased  pursuant  to such Bid  against  receipt of such
          shares and advise such  Potential  Beneficial  Owner of the Applicable
          Rate for the next succeeding Dividend Period;

               (ii)  in  the  case  of  a  Broker-Dealer   that  is  a  Seller's
          Broker-Dealer,  instruct  each  Beneficial  Owner on whose behalf such
          Broker-Dealer submitted a Sell Order that was accepted, in whole or in
          part,  or a Bid that was  accepted,  in whole or in part,  to instruct
          such Beneficial  Owner's Agent Member to deliver to such Broker-Dealer
          (or its Agent Member) through the Securities  Depository the number of
          AMPS to be sold  pursuant to such Order against  payment  therefor and
          advise any such  Beneficial  Owner that will  continue to hold AMPS of
          the Applicable Rate for the next succeeding Dividend Period;


               (iii)  advise  each   Beneficial   Owner  on  whose  behalf  such
          Broker-Dealer  submitted a Hold Order of the  Applicable  Rate for the
          next succeeding Dividend Period;

               (iv)  advise  each   Beneficial   Owner  on  whose   behalf  such
          Broker-Dealer  submitted  an  Order of the  Auction  Date for the next
          succeeding Auction; and

               (v) advise each Potential  Beneficial  Owner on whose behalf such
          Broker-Dealer  submitted a Bid that was accepted, in whole or in part,
          of the Auction Date for the next succeeding Auction.

          (c) On the basis of the  information  provided  to it  pursuant to (a)
     above, each Broker-Dealer that submitted a Bid or a Sell Order on behalf of
     a Potential  Beneficial  Owner or a Beneficial  Owner shall, in such manner
     and at such  time or  times  as in its sole  discretion  it may  determine,
     allocate  any funds  received by it  pursuant to (b)(i)  above and any AMPS
     received  by it pursuant to (b)(ii)  above among the  Potential  Beneficial
     Owners,  if any, on whose behalf such  Broker-Dealer  submitted  Bids,  the
     Beneficial  Owners,  if any, on whose behalf such  Broker-Dealer  submitted
     Bids  that  were  accepted  or  Sell  Orders,   and  any  Broker-Dealer  or
     Broker-Dealers  identified to it by the Auction Agent pursuant to (a)(v) or
     (a)(vi) above.

          (d) On each Auction Date:

               (i) each Potential  Beneficial  Owner and Beneficial  Owner shall
          instruct its Agent Member as provided in (b)(i) or (ii) above,  as the
          case may be;

               (ii) each Seller's  Broker-Dealer which is not an Agent Member of
          the Securities  Depository  shall instruct its Agent Member to (A) pay
          through  the  Securities   Depository  to  the  Agent  Member  of  the
          Beneficial Owner delivering shares to such  Broker-Dealer  pursuant to
          (b)(ii)  above the amount  necessary to purchase  such shares  against
          receipt of such  shares,  and (B)  deliver  such  shares  through  the
          Securities Depository to a Buyer's Broker-Dealer (or its Agent Member)
          identified  to such  Seller's  Broker-Dealer  pursuant to (a)(v) above
          against payment therefor; and

               (iii) each Buyer's  Broker-Dealer which is not an Agent Member of
          the Securities  Depository  shall instruct its Agent Member to (A) pay
          through the Securities Depository to a Seller's  Broker-Dealer (or its
          Agent  Member)  identified   pursuant  to  (a)(vi)  above  the  amount
          necessary to purchase  the shares to be  purchased  pursuant to (b)(i)
          above  against  receipt of such  shares,  and (B) deliver  such shares
          through the Securities Depository to the Agent Member of the purchaser
          thereof against payment therefor.

          (e) On the day after the Auction Date:

               (i) each Bidder's Agent Member  referred to in (d)(i) above shall
          instruct  the  Securities   Depository  to  execute  the  transactions
          described in (b)(i) or (ii) above, and the Securities Depository shall
          execute such transactions;

               (ii)  each  Seller's  Broker-Dealer  or its  Agent  Member  shall
          instruct  the  Securities   Depository  to  execute  the  transactions
          described  in  (d)(ii)  above,  and the  Securities  Depository  shall
          execute such transactions; and

               (iii)  each  Buyer's  Broker-Dealer  or its  Agent  Member  shall
          instruct  the  Securities   Depository  to  execute  the  transactions
          described  in (d)(iii)  above,  and the  Securities  Depository  shall
          execute such transactions.

          (f) If a Beneficial  Owner selling AMPS in an Auction fails to deliver
     such shares (by authorized book-entry),  a Broker-Dealer may deliver to the
     Potential  Beneficial  Owner on behalf of which it submitted a Bid that was
     accepted a number of whole AMPS that is less than the number of shares that
     otherwise was to be purchased by such Potential  Beneficial  Owner. In such
     event, the number of AMPS to be so delivered shall be determined  solely by
     such  Broker-Dealer.  Delivery  of  such  lesser  number  of  shares  shall
     constitute  good  delivery.  Notwithstanding  the  foregoing  terms of this
     paragraph (f), any delivery or non-delivery of shares which shall represent
     any departure from the results of an Auction,  as determined by the Auction
     Agent,  shall be of no effect unless and until the Auction Agent shall have
     been  notified of such  delivery or  non-delivery  in  accordance  with the
     provisions  of  the  Auction   Agency   Agreement  and  the   Broker-Dealer
     Agreements.











                                      PROXY


                         BOULDER TOTAL RETURN FUND, INC.

                    PROXY SOLICITED BY THE BOARD OF DIRECTORS

The  undersigned  holder of shares of Common Stock of Boulder Total Return Fund,
Inc., a Maryland  corporation  (the "Fund"),  hereby appoints Stephen C. Miller,
Carl  D.  Johns,  and  Jon-Luc  Dupuy,  or any  of  them,  as  proxies  for  the
undersigned,  with full powers of  substitution  in each of them,  to attend the
Annual  Meeting  of  Stockholders  (the  "Annual  Meeting")  to be  held  at the
Scottsdale Plaza Resort,  7200 N. Scottsdale Road,  Scottsdale,  Arizona at 9:00
a.m.   Mountain  Standard  Time  (local  time),  on  April  24,  2006,  and  any
adjournments or postponements  thereof, to cast on behalf of the undersigned all
votes that the  undersigned  is  entitled  to cast at the Annual  Meeting and to
otherwise  represent the  undersigned  at the Annual Meeting with all the powers
possessed by the  undersigned  if personally  present at the Meeting.  The votes
entitled to be cast will be cast as instructed  below. If this Proxy is executed
but no  instruction is given,  the votes entitled to be cast by the  undersigned
will be cast "FOR" each of the nominees for Director and "FOR" each of the other
proposals described in the Proxy Statement.  The undersigned hereby acknowledges
receipt  of  the  Notice  of  Annual  Meeting  and  Proxy  Statement.  In  their
discretion,  the proxies are  authorized to vote upon such other business as may
properly come before the Meeting.  A majority of the proxies  present and acting
at the Annual  Meeting in person or by  substitute  (or, if only one shall be so
present,  then  that  one)  shall  have and may  exercise  all of the  power and
authority of said proxies  hereunder.  The undersigned  hereby revokes any proxy
previously given.


                   CONTINUED AND TO BE SIGNED ON REVERSE SIDE





Please indicate your vote by an "X" in the appropriate box below.

This proxy,  if properly  executed,  will be voted in the manner directed by the
undersigned  stockholder.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3.

Please refer to the Proxy Statement for a discussion of the Proposals.

                                                                                             

------------ ------------------------------------------------------------- ----------- ----------------- -------------------------
             Election of Directors:  Nominees are Joel W. Looney,  Dennis  FOR____     WITHHOLD___       FOR ALL EXCEPT ___
 1.          R. Causier., and Dr. Dean L. Jacobson.

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

Instruction:  If you do not wish your shares voted "for" a  particular  nominee,
mark the "For All  Except"  box and  strike a line  through  the  name(s) of the
nominee(s). Your shares will be voted "For" the remaining nominee(s).

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ELECTION OF ALL THE NOMINEES
----------------------------------------------------------------------------------------------------------------------------------

2.             Amendments  to the Fund's  charter (the  "Charter")  which  FOR___      AGAINST ___       ABSTAIN ___
               will  repeal  in  their  entirety  all  of  the  currently
               existing  terms  of  the  Fund's  taxable  auction  market
               preferred  stock and  substitute  in lieu  thereof the new
               terms set forth in the Form of Articles of Amendment.

----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,  UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------

3.             An  amendment to the Charter to provide that the number of  FOR___      AGAINST ___       ABSTAIN ___
               directors  of the  Fund  shall  be  five,  subject  to the
               provisions of any class or series of Preferred Stock.

----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,  UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------


MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT        ____

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

NOTE:  Please sign exactly as your name appears on this Proxy.  If joint owners,
EACH should sign this Proxy. When signing as attorney, executor,  administrator,
trustee, guardian or corporate officer, please give your full title.

Signature:
                   -------------------------

Date:
                   -------------------------

Signature:
                   -------------------------

Date:
                   -------------------------



                                [AMPS PROXY CARD]


                                      PROXY

                         BOULDER TOTAL RETURN FUND, INC.

                    PROXY SOLICITED BY THE BOARD OF DIRECTORS

The undersigned  holder of shares of the Taxable Auction Market  Preferred Stock
("AMPS")  of Boulder  Total  Return  Fund,  Inc.,  a Maryland  corporation  (the
"Fund"), hereby appoints Stephen C. Miller, Carl D. Johns, and Jon-Luc Dupuy, or
any of them as proxies for the undersigned,  with full powers of substitution in
each of them,  to  attend  the  Annual  Meeting  of  Stockholders  (the  "Annual
Meeting") to be held at the Scottsdale  Plaza Resort,  7200 N. Scottsdale  Road,
Scottsdale,  Arizona at 9:00 a.m.  Mountain Standard Time (local time), on April
24, 2006, and any  adjournments or postponements  thereof,  to cast on behalf of
the undersigned all votes that the undersigned is entitled to cast at the Annual
Meeting and to otherwise  represent the  undersigned  at the Annual Meeting with
all the  powers  possessed  by the  undersigned  if  personally  present  at the
Meeting. The votes entitled to be cast will be cast as instructed below. If this
Proxy is executed but no instruction is given,  the votes entitled to be cast by
the  undersigned  will be cast "FOR" each of the nominees for Director and "FOR"
each of the other proposals  described in the Proxy  Statement.  The undersigned
hereby acknowledges receipt of the Notice of Annual Meeting and Proxy Statement.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting.  A majority of the proxies  present and
acting at the Annual  Meeting in person or by substitute  (or, if only one shall
be so present,  then that one) shall have and may  exercise all of the power and
authority of said proxies  hereunder.  The undersigned  hereby revokes any proxy
previously given.


                   CONTINUED AND TO BE SIGNED ON REVERSE SIDE





Please indicate your vote by an "X" in the appropriate box below.

This proxy,  if properly  executed,  will be voted in the manner directed by the
undersigned  stockholder.  IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR
PROPOSALS 1, 2 AND 3.

Please refer to the Proxy Statement for a discussion of the Proposals.

                                                                                             

------------ ------------------------------------------------------------- ----------- ----------------- -------------------------
1.           Election of  Directors:  Nominees  are Susan L.  Ciciora and  FOR____     WITHHOLD___       FOR ALL EXCEPT ___
             Richard I. Barr.
----------------------------------------------------------------------------------------------------------------------------------

Instruction:  If you do not wish your shares voted "for" a  particular  nominee,
mark the "For All  Except"  box and  strike a line  through  the  name(s) of the
nominee(s). Your shares will be voted "For" the remaining nominee(s).

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" ELECTION OF ALL THE NOMINEES
----------------------------------------------------------------------------------------------------------------------------------

2.             Amendments  to the Fund's  charter (the  "Charter")  which  FOR___      AGAINST ___       ABSTAIN ___
               will  repeal  in  their  entirety  all  of  the  currently
               existing  terms  of  the  Fund's  taxable  auction  market
               preferred  stock and  substitute  in lieu  thereof the new
               terms set forth in the Form of Articles of Amendment.

----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,  UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------

3.             An  amendment to the Charter to provide that the number of  FOR___      AGAINST ___       ABSTAIN ___
               directors  of the  Fund  shall  be  five,  subject  to the
               provisions of any class or series of Preferred Stock.

----------------------------------------------------------------------------------------------------------------------------------
THE BOARD OF DIRECTORS, INCLUDING ALL OF THE INDEPENDENT DIRECTORS,  UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" THIS
PROPOSAL, AS MORE FULLY DESCRIBED IN THE PROXY STATEMENT
----------------------------------------------------------------------------------------------------------------------------------



MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT        ____

PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.

NOTE:  Please sign exactly as your name appears on this Proxy.  If joint owners,
EACH should sign this Proxy. When signing as attorney, executor,  administrator,
trustee, guardian or corporate officer, please give your full title.

Signature:
                   -------------------------

Date:
                   -------------------------

Signature:
                   -------------------------

Date:
                   -------------------------