CERTIFICATE OF DETERMINATION OF PREFERENCES
                                       OF
                    9.5% CUMULATIVE PREFERRED STOCK, SERIES N
                                       OF
                              PUBLIC STORAGE, INC.
                              --------------------
  [As Filed in the Office of the Secretary of State of the State of California
                               on March 17, 2000]


                  The undersigned,  Harvey Lenkin and Sarah Hass,  President and
Secretary,  respectively,  of PUBLIC STORAGE, INC., a California corporation, do
hereby certify:

                  FIRST:   The  Restated   Articles  of   Incorporation  of  the
Corporation  authorize  the issuance of  50,000,000  shares of stock  designated
"preferred  shares,"  issuable  from  time to time  in one or more  series,  and
authorize  the Board of Directors to fix the number of shares  constituting  any
such  series,  and to determine or alter the  dividend  rights,  dividend  rate,
conversion  rights,  voting  rights,  right and terms of redemption  (including,
without limitation, sinking fund provisions), the redemption price or prices and
the  liquidation  preference  of any wholly  unissued  series of such  preferred
shares, and the number of shares constituting any such series.

                  SECOND:  The Board of  Directors of the  Corporation  did duly
adopt the resolutions  attached hereto as Exhibit A and  incorporated  herein by
reference  authorizing  and  providing for the creation of a series of preferred
shares to be known as "9.5% Cumulative Preferred Stock, Series "N" consisting of
9,600 shares, none of the shares of such series having been issued.

                  We further  declare under penalty of perjury under the laws of
the State of California that the matters set forth in this  certificate are true
and correct of our own knowledge.

                  IN  WITNESS  WHEREOF,   the  undersigned  have  executed  this
certificate this 17th day of March, 2000.


                                                              /S/ HARVEY LENKIN
                                                              -----------------
                                                              Harvey Lenkin
                                                                President


                                                             /S/ SARAH HASS
                                                             --------------
                                                               Sarah Hass
                                                                Secretary

<PAGE>

                                    EXHIBIT A

                      RESOLUTION OF THE BOARD OF DIRECTORS
                             OF PUBLIC STORAGE, INC.


                    ESTABLISHING A SERIES OF 9.5% CUMULATIVE
                            PREFERRED STOCK, SERIES N


                  RESOLVED  that pursuant to the  authority  conferred  upon the
Board of Directors by Article III of the Restated  Articles of  Incorporation of
this  Corporation,  there  is  hereby  established  a series  of the  authorized
preferred shares of this Corporation having a par value of $.01 per share, which
series shall be designated  "9.5% Cumulative  Preferred Stock,  Series N," shall
consist of 9,600 shares and shall have the  following  rights,  preferences  and
privileges:

                  (a)      Dividend Rights.

                  (1)  Dividends  shall be payable in cash on each share of this
Series when, as and if declared by the Board of Directors,  out of funds legally
available  therefor (i) for the period (the "INITIAL  DIVIDEND PERIOD") from and
including the date of issuance of such share (the "ISSUE DATE") to but excluding
the first day of the first calendar  quarter  occurring after the Issue Date and
(ii) for each quarterly  dividend period thereafter (the Initial Dividend Period
and each quarterly dividend period being hereinafter individually referred to as
a "DIVIDEND PERIOD" and collectively  referred to as "DIVIDEND PERIODS"),  which
quarterly  Dividend Periods shall be in four equal amounts and shall commence on
January 1, April 1, July 1 and October 1 in each year (each, a "DIVIDEND  PERIOD
COMMENCEMENT  DATE"),  commencing on the first day of the first calendar quarter
occurring  after the Issue  Date,  and  shall  end on and  include  the day next
preceding the next Dividend Period  Commencement Date, at a rate per annum equal
to 9.5% of the $25,000 per share stated value  thereof  (the  "DIVIDEND  RATE").
Dividends on each share of this Series shall be  cumulative  from the Issue Date
and shall be payable (i)  quarterly,  in  arrears,  on or before the last day of
each  Dividend  Period and (ii) in the event of  redemption,  on the  applicable
redemption date; provided, that if any such day shall be a Saturday,  Sunday, or
a day on which  banking  institutions  in the  State of New York or the State of
California are authorized or obligated by law to close,  or a day which is or is
declared  a  national  or a New York or  California  state  holiday  (any of the
foregoing  a  "NON-BUSINESS  DAY"),  then  the  payment  date  shall be the next
succeeding day which is not a Non-Business Day. Each such dividend shall be paid
to the  holders of record of shares of this  Series as they  appear on the stock
register of the  Corporation on such record date, not more than 45 days nor less
than 15 days preceding the payment date thereof,  as shall be fixed by the Board
of Directors.  Dividends on account of arrears for any past Dividend Periods may
be declared  and paid at any time,  without  reference  to any regular  dividend
payment date, to holders of record on such date,  not more than 45 days nor less
than 15 days preceding the payment date thereof, as may be fixed by the Board of
Directors.  After full  cumulative  dividends  on this  Series have been paid or
declared  and  funds  therefor  irrevocably  deposited  in trust  for  immediate
payment,  including for the then current Dividend Period,  the holders of shares
of this Series will not be entitled  to any further  dividends  with  respect to
that Dividend Period.

                  (2) Dividends  payable on shares of this Series for any period
greater or less than a full  Dividend  Period,  including  the Initial  Dividend
Period,  shall be computed on the basis of a 360-day year  consisting  of twelve
30-day months.

                  (3) The Corporation  shall not declare or pay or set apart for
payment  any  dividends  on  any  series  of  preferred  shares  ranking,  as to
dividends,  on a parity  with or  junior  to the  shares  of this  Series  as to
dividends or upon liquidation  unless full cumulative  dividends with respect to
shares of this Series have been or  contemporaneously  are declared and paid, or
declared and a sum sufficient for payment thereof irrevocably deposited in trust
for immediate payment,  for all Dividend Periods  terminating on or prior to the
date of payment of any such dividends on such other series of preferred  shares.
When dividends are not paid in full upon the shares of this Series and any other
series  of  preferred  shares  ranking  on a parity  therewith  as to  dividends

                                       2

<PAGE>

(including,  without limitation,  the shares of the Corporation's 10% Cumulative
Preferred  Stock,  Series A (the "SERIES A PREFERRED  STOCK"),  9.20% Cumulative
Preferred  Stock,  Series B (the "SERIES B PREFERRED  STOCK"),  9.50% Cumulative
Preferred  Stock,  Series D (the  "SERIES D PREFERRED  STOCK"),  10%  Cumulative
Preferred  Stock,  Series E (the "SERIES E PREFERRED  STOCK"),  9.75% Cumulative
Preferred Stock,  Series F (the "SERIES F PREFERRED  STOCK"),  8-7/8% Cumulative
Preferred  Stock,  Series G (the "SERIES G PREFERRED  STOCK"),  8.45% Cumulative
Preferred Stock,  Series H (the "SERIES H PREFERRED  STOCK"),  8-5/8% Cumulative
Preferred  Stock,  Series I (the  "SERIES I  PREFERRED  Stock"),  8%  Cumulative
Preferred Stock,  Series J (the "SERIES J PREFERRED  STOCK"),  8 1/4% Cumulative
Preferred Stock,  Series K (the "SERIES K PREFERRED  STOCK"),  8 1/4% Cumulative
Preferred  Stock,  Series L (the "SERIES L PREFERRED  STOCK"),  8.75% Cumulative
Preferred Stock,  Series M (the "SERIES M PREFERRED  STOCK") and Adjustable Rate
Cumulative  Preferred Stock,  Series C (the "ADJUSTABLE RATE PREFERRED STOCK")),
all  dividends  declared  upon  shares of this  Series  and any other  series of
preferred shares ranking on a parity therewith as to dividends shall be declared
pro rata so that the  amount of  dividends  declared  per share on the shares of
this Series and such other series of preferred shares shall in all cases bear to
each  other  that same ratio  that the  accumulated  dividends  per share on the
shares of this  Series and such other  series of  preferred  shares bear to each
other.  Except as provided in the  preceding  sentence,  unless full  cumulative
dividends  on the  shares of this  Series  have been paid for all past  Dividend
Periods,  no dividends (other than in shares of the Corporation's  common stock,
par value $.10 per share (together with any other shares of capital stock of the
Corporation  into which such shares shall be  reclassified  or changed  ("COMMON
SHARES"),  or another  stock  ranking  junior to the shares of this Series as to
dividends  and upon  liquidation)  shall be  declared  or paid or set  aside for
payment nor shall any other  distribution  be made upon the Common  Shares or on
any other  stock of the  Corporation  ranking  junior to or on a parity with the
shares  of  this  Series  as to  dividends  or  upon  liquidation.  Unless  full
cumulative  dividends  on the shares of this  Series have been paid for all past
Dividend Periods, no Common Shares or any other stock of the Corporation ranking
junior to or on a parity with the shares of this Series as to  dividends or upon
liquidation  shall  be  redeemed,  purchased,  or  otherwise  acquired  for  any
consideration (or any moneys be paid to or made available for a sinking fund for
the  redemption  of any  shares  of any such  stock) by the  Corporation  or any
subsidiary,  except by conversion  into or exchange for stock of the Corporation
ranking  junior  to  the  shares  of  this  Series  as  to  dividends  and  upon
liquidation.

                  (b)      Liquidation.

                  In the  event of any  voluntary  or  involuntary  liquidation,
dissolution,  or winding up of the  Corporation,  the  holders of shares of this
Series are  entitled to receive out of the assets of the  Corporation  available
for distribution to  shareholders,  before any distribution of assets is made to
holders of Common Shares or any other class or series of shares  ranking  junior
to the shares of this Series upon liquidation,  liquidating distributions in the
amount of $25,000 per share plus all accumulated and unpaid  dividends  (whether
or not earned or declared) for the then current and all past  Dividend  Periods.
If, upon any voluntary or involuntary liquidation, dissolution, or winding up of
the  Corporation  the amounts  payable with respect to the shares of this Series
and any other shares of the Corporation ranking as to any such distribution on a
parity  with the  shares of this  Series  are not paid in full,  the  holders of
shares of this Series and of such other shares (including,  without  limitation,
the shares of Series A, Series B, Series D, Series E, Series F, Series G, Series
H,  Series I,  Series J,  Series K,  Series L and Series M  Preferred  Stock and
Adjustable Rate Preferred Stock) will share ratably in any such  distribution of
assets of the  Corporation  in  proportion to the full  respective  preferential
amounts  to which they are  entitled.  After  payment of the full  amount of the
liquidating  distribution  to which they are entitled,  the holders of shares of
this  Series  will  not  be  entitled  to  any  further   participation  in  any
distribution of assets by the Corporation.

                  (1) Written  notice of any such  liquidation,  dissolution  or
winding up of the  Corporation,  stating the payment date or dates when, and the
place or places where the amounts  distributable in such circumstances  shall be
payable,  shall be given by first class mail, postage pre-paid, not less than 30
nor more than 60 days prior to the payment date stated  therein,  to each record
holder of the shares of this Series at the respective  addresses of such holders
as the same shall appear on the stock transfer records of the Corporation.

                  (2) For purposes of liquidation  rights, a reorganization  (as
defined in Section 181 of the California  Corporations Code) or consolidation or
merger of the Corporation with or into any other  corporation or corporations or
a sale of all or  substantially  all of the assets of the  Corporation  shall be
deemed not to be a liquidation, dissolution or winding up of the Corporation.

                                       3

<PAGE>

                  (c)      Redemption.

                  (1) Except as provided in clause (9) below, the shares of this
Series are not  redeemable  prior to March 17, 2005. On and after such date, the
shares of this  Series  are  redeemable  at the  option of the  Corporation,  by
resolution  of the Board of  Directors,  in whole or in part,  from time to time
upon not less than 30 nor more than 60 days' notice,  at a cash redemption price
of $25,000 per share plus all accumulated and unpaid  dividends  (whether or not
earned or declared) to the date of redemption.

                  (2) If fewer than all the  outstanding  shares of this  Series
are to be redeemed,  the number of shares to be redeemed  will be  determined by
the Board of  Directors,  and such shares  shall be  redeemed  pro rata from the
holders of record of such shares in proportion to the number of such shares held
by such holders (with adjustments to avoid redemption of fractional shares).

                  (3) Notwithstanding the foregoing, if any dividends, including
any accumulation, on the shares of this Series are in arrears, no shares of this
Series  shall be  redeemed  unless  all  outstanding  shares of this  Series are
simultaneously  redeemed,  and the  Corporation  shall not purchase or otherwise
acquire, directly or indirectly,  any shares of this Series; provided,  however,
that the foregoing  shall not prevent the purchase or  acquisition  of shares of
this Series pursuant to a purchase or exchange offer provided such offer is made
on the same terms to all holders of shares of this Series.

                  (4)  Immediately  prior to any  redemption  of  shares of this
Series, the Corporation shall pay, in cash, any accumulated and unpaid dividends
through the  redemption  date,  unless a redemption  date falls after a dividend
payment  record date and prior to the  corresponding  dividend  payment date, in
which case each holder of shares of this Series at the close of business on such
dividend  payment record date shall be entitled to the dividend  payable on such
shares on the corresponding dividend payment date notwithstanding the redemption
of such shares before such dividend payment date.  Except as expressly  provided
herein  above,  the  Corporation  shall make no payment or allowance  for unpaid
dividends,  whether  or not in  arrears,  on shares of this  Series  called  for
redemption.

                  (5) Notice of redemption  shall be given by  publication  in a
newspaper  of general  circulation  in the County of Los Angeles and The City of
New York,  such  publication  to be made once a week for two  successive  weeks,
commencing  not less than 30 nor more than 60 days  prior to the date  fixed for
redemption  thereof.  A similar  notice  will be mailed by the  Company by first
class mail, postage pre-paid, to each record holder of the shares of this Series
to be redeemed,  not less than 30 nor more than 60 days prior to such redemption
date,  to the  respective  addresses of such holders as the same shall appear on
the stock transfer records of the Corporation.  Each notice shall state: (i) the
redemption date; (ii) the number of shares of this Series to be redeemed;  (iii)
the  redemption  price;  (iv) the place or places  where  certificates  for such
shares are to be surrendered for payment of the redemption  price;  and (v) that
dividends  on the  shares  to be  redeemed  will  cease  to  accumulate  on such
redemption  date. If fewer than all the shares of this Series held by any holder
are to be  redeemed,  the notice  mailed to such holder  shall also  specify the
number of shares of this Series to be redeemed from such holder.

                  (6) In order to  facilitate  the  redemption of shares of this
Series,  the Board of Directors may fix a record date for the  determination  of
the shares to be redeemed, such record date to be not less than 30 nor more than
60 days prior to the date fixed for such redemption.

                  (7) Notice having been given as provided above, from and after
the date fixed for the  redemption  of shares of this Series by the  Corporation
(unless the  Corporation  shall fail to make  available  the money  necessary to
effect such  redemption),  the holders of shares  selected for redemption  shall
cease to be shareholders  with respect to such shares and shall have no interest
in or claim against the  Corporation  by virtue thereof and shall have no voting
or other  rights with  respect to such  shares,  except the right to receive the
moneys payable upon such redemption from the Corporation,  less any required tax
withholding amount, without interest thereon, upon surrender (and endorsement or
assignment  of  transfer,  if required by the  Corporation  and so stated in the
notice) of their  certificates,  and the  shares  represented  thereby  shall no
longer be deemed to be outstanding.  If fewer than all the shares represented by
a certificate are redeemed,  a new certificate shall be issued,  without cost to
the holder thereof,  representing the unredeemed shares. The Corporation may, at
its option, at any time after a notice of redemption has been given, deposit the
redemption price for the shares of this Series designated for redemption and not

                                       4

<PAGE>

yet redeemed,  plus any  accumulated  and unpaid  dividends  thereon to the date
fixed for  redemption,  with the transfer agent or agents for this Series,  as a
trust  fund  for the  benefit  of the  holders  of the  shares  of  this  Series
designated for redemption,  together with irrevocable instructions and authority
to such transfer agent or agents that such funds be delivered upon redemption of
such  shares  and to pay,  on and after the date fixed for  redemption  or prior
thereto, the redemption price of the shares to their respective holders upon the
surrender  of their  share  certificates.  From and  after  the  making  of such
deposit,  the holders of the shares  designated for redemption shall cease to be
shareholders  with respect to such shares and shall have no interest in or claim
against  the  Corporation  by virtue  thereof  and shall have no voting or other
rights with respect to such shares,  except the right to receive from such trust
fund the moneys payable upon such  redemption,  without interest  thereon,  upon
surrender  (and   endorsement,   if  required  by  the   Corporation)  of  their
certificates, and the shares represented thereby shall no longer be deemed to be
outstanding.  Any balance of such moneys  remaining  unclaimed at the end of the
five-year period  commencing on the date fixed for redemption shall be repaid to
the  Corporation  upon its request  expressed  in a  resolution  of its Board of
Directors.

                  (8) Any shares of this Series that shall at any time have been
redeemed  shall,  after  such  redemption,  have the  status of  authorized  but
unissued  preferred shares,  without  designation as to series until such shares
are  once  more  designated  as part of a  particular  series  by the  Board  of
Directors.

                  (9) If the Board of Directors of the Corporation shall, at any
time and in good faith,  be of the opinion that  ownership of  securities of the
Corporation  has or may become  concentrated  to an extent  that may prevent the
Corporation  from  qualifying as a real estate  investment  trust under the REIT
Provisions of the Internal  Revenue Code, then the Board of Directors shall have
the  power,  by lot or other  means  deemed  equitable  by them to  prevent  the
transfer  of and/or  to call for  redemption  a number of shares of this  Series
sufficient,  in the opinion of the Board of Directors,  to maintain or bring the
direct or indirect  ownership  thereof into conformity with the  requirements of
such a real estate  investment  trust under the REIT  Provisions of the Internal
Revenue  Code.  The  redemption  price to be paid for  shares of this  Series so
called for redemption, on the date fixed for redemption, shall be the average of
the highest bid and the lowest asked  quotations  on the last business day prior
to  the  redemption  date  as  reported  by  the  National   Quotation   Bureau,
Incorporated  or a  similar  organization  selected  from  time  to  time by the
Corporation  or if there be no such bid and asked  quotations,  as determined by
the Board of  Directors in good faith;  provided  that if interests in shares of
this Series are  represented by depositary  shares,  then the  redemption  price
shall be determined in accordance  with the  foregoing,  but with respect to one
depositary  share,  multiplied by the number of depositary  shares that together
represent an interest in one share of this Series. From and after the date fixed
for  redemption  by the Board of  Directors,  the  holder of any  shares of this
Series so called for redemption shall cease to be entitled to any distributions,
voting  rights and other  benefits  with  respect to such shares of this Series,
other than the right to payment of the redemption price determined as aforesaid.
"REIT  Provisions of the Internal  Revenue Code" shall mean Sections 856 through
860 of the Internal  Revenue Code of 1986, as amended.  In order to exercise the
redemption  option set forth in this clause (9),  with  respect to the shares of
this Series, the Corporation shall give notice of redemption by publication in a
newspaper  of general  circulation  in the County of Los Angeles and The City of
New York,  such  publication  to be made once a week for two  successive  weeks,
commencing  not less than 30 nor more than 60 days  prior to the date  fixed for
redemption.  A similar  notice will be mailed by the  Corporation by first class
mail, postage pre-paid, to each record holder of the shares of this Series to be
redeemed,  not less than 30 nor more than 60 days prior to such redemption date,
to the  respective  addresses  of such  holders as the same shall  appear on the
stock  transfer  records of the  Corporation.  Each notice shall state:  (i) the
redemption date; (ii) the number of shares of this Series to be redeemed;  (iii)
the  redemption  price;  (iv) the place or places  where  certificates  for such
shares are to be surrendered for payment of the redemption  price;  and (v) that
dividends  on the  shares  to be  redeemed  will  cease  to  accumulate  on such
redemption  date. If fewer than all the shares of this Series held by any holder
are to be  redeemed,  the notice  mailed to such holder  shall also  specify the
number of shares of this Series to be redeemed from such holder.

                  (d) Maintenance of Debt Ratio. Without the affirmative vote or
the written  consent of the holders of a majority of the shares of this  Series,
the Corporation will not take any action that would result in a ratio of Debt to
Assets (the "Debt Ratio") in excess of 50%.

                  "DEBT" means, as of any date of determination, all liabilities
that  should,  in  accordance  with GAAP,  be  reflected  as a liability  on the
consolidated  balance sheet of the Corporation as of such date of determination;

                                       5

<PAGE>

PROVIDED,  HOWEVER,  that "Debt" shall not include  liabilities  included in the
consolidated balance sheet under the headings "accrued and other liabilities" or
"minority  interest" to the extent that the inclusion of such liabilities  under
such headings is consistent with the Corporation's past practice.

                  "ASSETS"  means, as of any date of  determination,  all assets
that  should,  in  accordance  with  GAAP,  be  reflected  as an  asset  on  the
consolidated balance sheet of the Corporation as of such date of determination.

                  "GAAP" means generally  accepted  accounting  principles as in
effect in the United States of America from time to time, consistently applied.

                  (e) Voting  Rights.  The shares of this Series  shall not have
any voting powers either general or special,  except as required by law,  except
as set forth in Section (d) hereof and except that:

                  (1) (A) If the  Corporation  shall fail to pay full cumulative
dividends on the shares of this Series or any other of its preferred  shares for
six quarterly dividend payment periods,  whether or not consecutive (a "DIVIDEND
DEFAULT"),  the holders of all outstanding  preferred shares, voting as a single
class without  regard to series,  will be entitled to elect two Directors  until
full cumulative dividends for all past dividend payment periods on all preferred
shares have been paid or declared and funds therefor set apart for payment. Such
right to vote separately as a class to elect Directors  shall,  when vested,  be
subject,  always,  to the same provisions for the vesting of such right to elect
Directors separately as a class in the case of future Dividend Defaults.  At any
time when such  right to elect  Directors  separately  as a class  shall have so
vested,  the  Corporation  may,  and upon the written  request of the holders of
record  of not less  than 20% of the total  number  of  preferred  shares of the
Corporation then outstanding  shall,  call a special meeting of stockholders for
the election of Directors.  In the case of such a written request,  such special
meeting  shall be held within 90 days after the delivery of such request and, in
either case, at the place and upon the notice  provided by law and in the Bylaws
of the Corporation,  provided that the Corporation shall not be required to call
such a special meeting if such request is received less than 120 days before the
date  fixed  for  the  next  ensuing  Annual  Meeting  of  Shareholders  of  the
Corporation and the holders of all classes of outstanding  preferred  shares are
afforded the  opportunity  to elect such Directors (or fill any vacancy) at such
Annual Meeting of Shareholders. Directors elected as aforesaid shall serve until
the next  Annual  Meeting of  Shareholders  of the  Corporation  or until  their
respective  successors  shall be elected and qualified.  If, prior to the end of
the term of any Director  elected as aforesaid,  a vacancy in the office of such
Director shall occur during the  continuance of a Dividend  Default by reason of
death,  resignation,  or  disability,  such  vacancy  shall  be  filled  for the
unexpired  term by the  appointment  of a new Director for the unexpired term of
such former  Director,  such  appointment  to be made by the remaining  Director
elected as aforesaid.

                  (B) In addition to the right to elect  Directors  set forth in
clause (A) above, if, without the affirmative vote or the written consent of the
holders  of a  majority  of the  shares of this  Series,  on the last day of two
consecutive  fiscal quarters of the  Corporation,  the Debt Ratio exceeds 50% (a
"DEBT RATIO  DEFAULT"),  the holders of all  outstanding  shares of this Series,
voting as a single class, will be entitled to elect two Directors until the Debt
Ratio as of the last day of a fiscal  quarter of the  Corporation  is reduced to
50% or less. Such right to vote separately as a class to elect Directors  shall,
when vested, be subject,  always, to the same provisions for the vesting of such
right to elect Directors  separately as a class in the case of future Debt Ratio
Defaults.  At any time when such right to elect Directors  separately as a class
shall have so vested,  the Corporation  may, and upon the written request of the
holders  of record  of not less  than 20% of the total  number of shares of this
Series then  outstanding  shall,  call a special meeting of stockholders for the
election  of  Directors.  In the case of such a written  request,  such  special
meeting  shall be held within 90 days after the delivery of such request and, in
either case, at the place and upon the notice  provided by law and in the Bylaws
of the Corporation,  provided that the corporation shall not be required to call
such a special meeting if such request is received less than 120 days before the
date  fixed  for  the  next  ensuing  Annual  Meeting  of  Shareholders  of  the
Corporation  and  the  holders  of  shares  of  this  Series  are  afforded  the
opportunity to elect such Directors (or fill any vacancy) at such Annual Meeting
of  Shareholders.  Directors  elected as  aforesaid  shall  serve until the next
Annual Meeting of  Shareholders  of the  Corporation  or until their  respective
successors  shall be elected and qualified.  If, prior to the end of the term of
any  Director  elected as  aforesaid,  a vacancy in the office of such  Director
shall occur during the  continuance  of a Debt Ratio Default by reason of death,
resignation,  or disability, such vacancy shall be filled for the unexpired term

                                       6

<PAGE>

by the  appointment  of a new  Director  for the  unexpired  term of such former
Director,  such  appointment  to be made by the  remaining  Director  elected as
aforesaid.

                  (2) The affirmative vote or consent of the holders of at least
662/3% of the outstanding  shares of this Series,  voting separately as a class,
will be required  for any  amendment  to the  Articles of  Incorporation  of the
Corporation  that  will  adversely  alter or  change  the  powers,  preferences,
privileges  or rights of the shares of this  Series,  except as set forth below.
The  affirmative  vote or  consent  of the  holders  of (i) at least  50% of the
outstanding  shares of this Series,  voting  separately as a class,  and (ii) at
least  662/3% of the  outstanding  shares of this Series and any other series of
preferred  shares  ranking on a parity with this Series as to dividends and upon
liquidation  (including,  without limitation,  the shares of Series A, Series B,
Series D,  Series E, Series F, Series G, Series H, Series I, Series J, Series K,
Series L and Series M Preferred  Stock and  Adjustable  Rate  Preferred  Stock),
voting as a single class  without  regard to series,  will be required to issue,
authorize  or increase  the  authorized  amount of any class or series of shares
ranking prior to this Series as to dividends or upon  liquidation or to issue or
authorize any obligation or security  convertible  into or evidencing a right to
purchase any such security,  but the Articles of Incorporation may be amended to
increase the number of authorized  preferred  shares ranking on a parity with or
junior to this Series or to create another class of preferred  shares ranking on
a parity  with or junior  to this  Series  without  the vote of the  holders  of
outstanding shares of this Series.

                  (3)  The  affirmative  vote or  consent  of the  holders  of a
majority of the outstanding shares of this Series, voting separately as a class,
will be required for any amendment or repeal of the following  provisions of the
Bylaws of the  Corporation,  which  would be  adverse  to the  interests  of the
holders of shares of this Series, and for any other changes to the Bylaws of the
Corporation  that affect these  provisions in a manner which would be adverse to
the  interests  of the holders of shares of this Series:  Article IV,  Section 2
(relating  to the  Corporation's  permissible  Asset  Coverage),  Article  VIII,
Section 2(g) and (h) (relating to the Corporation's  investment policy) and each
of the defined terms used in any of the foregoing provisions.

                  (4)  Except to the  extent  required  pursuant  to clause  (3)
above,  nothing  herein  shall be taken to  require a class  vote or  consent in
connection  with the  authorization,  designation,  increase  or issuance of any
shares of any  class or series  (including  additional  preferred  shares of any
series) that rank junior to or on a parity with this Series as to dividends  and
liquidation  rights  or  in  connection  with  the  authorization,  designation,
increase  or  issuance  of  any  bonds,  mortgages,  debentures  or  other  debt
obligations of the Corporation.

                  (5) The right to elect  Directors  set forth in clause  (1)(B)
above is not  intended  to be the  exclusive  remedy of holders of the shares of
this Series in the event of a Debt Ratio Default.

                  (f) Conversion.  The shares of this Series are not convertible
into  shares  of  any  other  class  or  series  of  the  capital  stock  of the
Corporation.

                                       7